9616 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Rules and Regulations 

DEPARTMENT OF THE INTERIOR 

Office of Surface Mining Reclamation 

and Enforcement 

30 CFR Part 942 

RIN 1029-AC50 

Tennessee Federal Regulatory 

Program 

AGENCY: Office of Surface Mining 

Reclamation and Enforcement, Interior. 

ACTION: Final rule. 

SUMMARY: We, the Office of Surface 

Mining Reclamation and Enforcement 

(OSM), are finalizing changes to the 

Tennessee Federal regulatory program 

regarding performance bonds and 

revegetation success standards. These 

revisions provide a mechanism to use 

our statutory authority to accept 

financial assurances in the form of trust 

funds and annuities in Tennessee to 

fund the treatment of long-term 

postmining pollutional discharges from 

surface coal mining operations and thus 

satisfy performance bond obligations for 

treatment of those discharges. Our 

previous regulations also did not 

facilitate the growth of forests, and we 

are taking a number of steps to ensure 

the reestablishment of high quality 

hardwood forests where the postmining 

land uses are related to forestry. To 

minimize competition with woody 

plants and support healthier tree 

growth, we are removing the 80% 

ground cover revegetation success 

standard for mine sites with postmining 

land uses of wildlife habitat, 

undeveloped land, recreation, or 

forestry; limiting the herbaceous ground 

cover success standards to those 

necessary to control erosion and support 

the forestry-related postmining land use; 

requiring seed mixes and seeding rates 

of herbaceous vegetation for those land 

uses to be specified in the permit; and 

removing the limitations on the amount 

of bare areas that can remain after 

reclamation of mine sites with those 

land uses. 

EFFECTIVE DATE: April 2, 2007. 

FOR FURTHER INFORMATION CONTACT: Tim 

Dieringer, Field Office Director, U.S. 

Department of the Interior, Office of 

Surface Mining Reclamation and 

Enforcement, Knoxville Field Office, 

710 Locust Street, 2nd Floor, Knoxville, 

Tennessee 37902; Telephone: 865–545– 

4103; E-mail: tdieringer@osmre.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background on the Tennessee Federal 

Program 

II. Background on This Rulemaking 

III. How and why are we revising the 

Tennessee Federal program regulations? 

IV. How did we respond to the comments 

that we received on the proposed rule? 

V. Procedural Determinations 

I. Background on the Tennessee Federal 

Program 

Section 503(a) of the Surface Mining 

Control and Reclamation Act of 1977 

(SMCRA or the Act), 30 U.S.C. 1253, 

permits a State to assume primacy for 

the regulation of surface coal mining 

and reclamation operations on nonFederal and non-Indian lands within its 

borders under certain conditions. The 

Secretary of the Interior conditionally 

approved the Tennessee program on 

August 10, 1982. However, because of 

actions that we took pursuant to 30 CFR 

Part 733 to correct shortcomings in the 

administration and implementation of 

the approved Tennessee program on 

May 16, 1984, the State repealed most 

of the Tennessee Coal Surface Mining 

Law of 1980, Tennessee Code Annotated 

59–8–301–59–8–339, and its 

implementing regulations, effective 

October 1, 1984. As a result, on October 

1, 1984, we withdrew approval of the 

Tennessee permanent regulatory 

program and promulgated a Federal 

program for Tennessee under the 

authority of section 504(a) of the Act, 30 

U.S.C. 1254(a). This program appears in 

30 CFR Part 942, where it replaced the 

disapproved State program. With the 

promulgation of a Federal regulatory 

program, we became the regulatory 

authority under SMCRA in Tennessee. 

You can find background information 

on the Tennessee Federal program, 

including our findings and the 

disposition of comments, in the October 

1, 1984, Federal Register. 49 FR 38874. 

II. Background on This Rulemaking 

We published the proposed rule 

underlying this final rule on April 6, 

2006. 71 FR 17682. On May 3, 2006, we 

extended the public comment period 

until June 30, 2006, and provided notice 

of a requested public hearing that was 

held on June 1, 2006. 71 FR 25992. 

III. How and why are we revising the 

Tennessee Federal program 

regulations? 

A. Section 942.800: Bond and Insurance 

Requirements for Surface Coal Mining 

and Reclamation Operations 

On April 6, 2006, we published 

proposed revisions to the Tennessee 

Federal program that provided a 

mechanism to use our authority to 

implement trust funds and annuities for 

funding treatment of long-term 

postmining pollutional discharges. 71 

FR 17682. Those revisions, which we 

are adopting in slightly revised form in 

this final rule, reflect our efforts to 

provide a system suitable for the longterm funding of the treatment of the 

postmining pollutional discharges that 

exist in Tennessee and any 

unanticipated discharges that may occur 

in the future. 

We are adopting new § 942.800(c), 

which we proposed as § 942.800(b)(4), 

to provide us with a mechanism to use 

our statutory authority to accept trust 

funds and annuities as an alternative 

system as provided for in SMCRA at 

Section 509(c), 30 U.S.C. 1259(c), by 

which permittees may satisfy the 

requirement to provide a performance 

bond to cover the treatment of 

postmining pollutional discharges. Final 

§ 942.800(c) reads as follows: 

(c) Special consideration for sites with 

long-term postmining pollutional discharges. 

With the approval of the Office, the permittee 

may establish a trust fund, annuity or both 

to guarantee treatment of long-term 

postmining pollutional discharges in lieu of 

posting one of the bond forms listed in 

§ 800.12 of this chapter for that purpose. The 

trust fund or annuity will be subject to the 

following conditions: 

(1) The Office will determine the amount 

of the trust fund or annuity, which must be 

adequate to meet all anticipated treatment 

needs, including both capital and operational 

expenses. 

(2) The trust fund or annuity must be in 

a form approved by the Office and contain all 

terms and conditions required by the Office. 

(3) The trust fund or annuity must provide 

that the United States or the State of 

Tennessee is irrevocably established as the 

beneficiary of the trust fund or of the 

proceeds from the annuity. 

(4) The Office will specify the investment 

objectives of the trust fund or annuity. 

(5) Termination of the trust fund or annuity 

may occur only as specified by the Office 

upon a determination that no further 

treatment or other reclamation measures are 

necessary, that a replacement bond or 

another financial instrument has been 

posted, or that the administration of the trust 

fund or annuity in accordance with its 

purpose requires termination. 

(6) Release of money from the trust fund 

or annuity may be made only upon written 

authorization of the Office or according to a 

schedule established in the agreement 

accompanying the trust fund or annuity. 

(7) A financial institution or company 

serving as a trustee or issuing an annuity 

must be one of the following: 

(i) A bank or trust company chartered by 

the Tennessee Department of Financial 

Institutions; 

(ii) A national bank chartered by the Office 

of the Comptroller of the Currency; 

(iii) An operating subsidiary of a national 

bank chartered by the Office of the 

Comptroller of the Currency; 

(iv) An insurance company licensed or 

authorized to do business in Tennessee by 

the Tennessee Department of Commerce and 

Insurance or designated by the Commissioner 

of that Department as an eligible surplus 

lines insurer; or 


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(v) Any other financial institution or 

company with trust powers and with offices 

located in Tennessee, provided that the 

institution’s or company’s activities are 

examined or regulated by a State or Federal 

agency. 

(8) Trust funds and annuities, as described 

in this paragraph, must be established in a 

manner that guarantees that sufficient 

moneys will be available to pay for treatment 

of postmining pollutional discharges 

(including maintenance, renovation, and 

replacement of treatment and support 

facilities as needed), the reclamation of the 

sites upon which treatment facilities are 

located and areas used in support of those 

facilities. 

(9) When a trust fund or annuity is in place 

and fully funded, the Office may approve 

release under § 800.40(c)(3) of this chapter of 

conventional bonds posted for a permit or 

permit increment, provided that, apart from 

the pollutional discharge and associated 

treatment facilities, the area fully meets all 

applicable reclamation requirements and the 

trust fund or annuity is sufficient for 

treatment of pollutional discharges and 

reclamation of all areas involved in such 

treatment. The portion of the permit required 

for postmining water treatment must remain 

bonded. However, the trust fund or annuity 

may serve as that bond. 

SMCRA, its implementing 

regulations, and our policy require that 

the performance bond be sufficient to 

cover treatment of those discharges in 

the event that the permittee fails to do 

so. Section 509(a) of SMCRA, 30 U.S.C. 

1259(a), requires that each permittee 

post a performance bond conditioned 

upon faithful performance of all the 

requirements of the Act and the permit. 

That section of the Act also specifies 

that ‘‘[t]he amount of the bond shall be 

sufficient to assure the completion of 

the reclamation plan if the work had to 

be performed by the regulatory authority 

in the event of forfeiture * * *.’’ 30 

U.S.C. 1259(a). Section 509(e) of the Act 

provides that ‘‘[t]he amount of the bond 

or deposit required and the terms of 

each acceptance of the applicant’s bond 

shall be adjusted by the regulatory 

authority from time to time as affected 

land acreages are increased or decreased 

or where the cost of future reclamation 

changes.’’ 30 U.S.C. 1259(e). The 

statutory requirements for a 

‘‘reclamation plan’’ include the 

measures to be taken to ensure water 

quality. 30 U.S.C. 1258(a)(13). 

Our regulations at 30 CFR Part 800 

implement the requirements of section 

509 of the Act, 30 U.S.C. 1259. Those 

regulations, first promulgated in 1979, 

were revised in 1983 in a manner that 

clearly implies that performance bonds 

must be adjusted when unanticipated 

events, such as postmining pollutional 

discharges, increase the cost of 

reclamation (in this case, treatment of 

the discharges). 

In our discussion of determining bond 

amounts in the March 13, 1979, Federal 

Register (44 FR 15111), we noted: 

The Office recognizes that the regulatory 

authority cannot reasonably establish the 

initial bond amount based upon speculative 

events such as the need to abate ground 

water pollution, since the operation must be 

designed initially to prevent such 

consequences in order to qualify for a permit. 

However, such unplanned consequences 

occasionally occur due to improper mining 

or reclamation, or because an important 

variable was not evaluated properly. When 

such consequences are identified prior to the 

release of all liability and termination of the 

permit in accordance with Part 807, the 

permittee’s legal obligation to abate them 

necessarily adds to the cost of reclamation. 

Under such circumstances, the regulatory 

authority would be authorized to impose 

additional bond liability under that permit, 

or to retain a larger portion of the total 

liability than otherwise required in response 

to an application for release of bond, in order 

to ensure adequate funding to complete the 

abatement work required (Sections 805.14(a) 

and 807.12(d)). 

According to this 1979 preamble 

discussion, regulatory authorities have 

discretionary authority to increase 

bonds to reflect the increased costs of 

reclamation that result from the 

occurrence of unanticipated events such 

as postmining pollutional discharges. 

However, in the preamble to our 1983 

revisions to the bonding rules, we 

indicate that increases in bond amounts 

under those circumstances are 

mandatory, not discretionary: 

If at any time the cost of future reclamation 

under the bond changes, the regulatory 

authority is required to adjust the bond 

accordingly (Sec. 800.15(a)). Thus, the 

amount of the bond for any increment must 

at all times be sufficient to assure the 

completion of the reclamation plan if the 

work had to be performed by the regulatory 

authority. 

48 FR 32937, July 19, 1983. 

Under 30 CFR 780.21(h) and 

784.14(g), one component of the 

reclamation plan is a hydrologic 

reclamation plan. Among other things, 

this plan must include the provision of 

‘‘water-treatment facilities when 

needed.’’ Consequently, the bond must 

be adequate to cover the cost of treating 

long-term pollutional discharges 

because treatment of those discharges is 

part of the reclamation plan. 

We further affirmed and clarified our 

position on financial guarantees for 

long-term postmining pollutional 

discharges in a March 31, 1997, 

document entitled, ‘‘Policy Goals and 

Objectives on Correcting, Preventing 

and Controlling Acid/Toxic Mine 

Drainage.’’ Objective 2 under the policy 

goal concerning environmental 

protection requires that financial 

responsibility associated with acid mine 

drainage (AMD) be fully addressed. 

Specifically, the policy includes the 

following strategies: 

Strategy 2.2—If, subsequent to permit 

issuance, monitoring identifies acid- or toxicforming conditions which were not 

anticipated in the mining and operation plan, 

the regulatory authority should require the 

operator to adjust the financial assurance. 

Strategy 2.3—Where inspections 

conducted in response to bond release 

requests identify surface or subsurface water 

pollution, bond in an amount adequate to 

abate the pollution should be held as long as 

water treatment is required, unless a 

financial guarantee or some other enforceable 

contract or mechanism to ensure continued 

treatment exists. 

When responding to commenters on 

the policy who objected to the 

requirement that permittees post 

financial guarantees for treatment of 

pollutional discharges during and after 

land reclamation (comment no.16), we 

stated: 

Section 509(a) of the Act requires that each 

permittee post a performance bond 

conditioned upon faithful performance of all 

the requirements of the Act and the permit. 

Paragraph (b) of this Section of the Act 

specifies that ‘‘[t]he amount of the bond shall 

be sufficient to assure the completion of the 

reclamation plan if the work had to be 

performed by the regulatory authority in the 

event of forfeiture.’’ The hydrologic 

reclamation plan is part of the reclamation 

plan to which this section refers. Section 

519(c) of SMCRA authorizes release of this 

bond only when the regulatory authority is 

satisfied that the reclamation required by the 

bond has been accomplished, and paragraph 

(c)(3) specifies that ‘‘no bond shall be fully 

released until all reclamation requirements of 

this Act are fully met.’’ Furthermore, section 

519(b) of the Act provides that whenever a 

bond release is requested, the regulatory 

authority must conduct an inspection to 

evaluate the reclamation work performed, 

including ‘‘whether pollution of surface or 

subsurface water is occurring, the probability 

of continuance of future occurrence of such 

pollution, and the estimated cost of abating 

such pollution.’’ Therefore, there is no doubt 

that, under SMCRA, the permittee must 

provide a financial guarantee to cover 

treatment of postmining discharges when 

such discharges develop and require 

treatment. 

On May 30, 2000, our Knoxville, 

Tennessee Field Office (KFO) issued 

Field Office Policy Memorandum No. 37 

entitled ‘‘Policy for Requiring Bond 

Adjustments on Permitted Sites 

Requiring Long-Term Treatment of 

Pollutional Discharges.’’ This policy 

described the general procedure that the 

KFO would utilize to require 

adjustments to performance bonds on 

sites in Tennessee where unanticipated 

pollutional discharges are occurring and 


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long-term treatment is required. The 

policy requires that treatment costs be 

estimated based on an assumption that 

treatment will be needed for at least 75 

years, absent convincing evidence to the 

contrary. Between June and September 

of the year in which the policy was 

issued, the KFO ordered some 

permittees in Tennessee to submit 

permit revisions to provide for the 

installation, operation and maintenance 

of long-term treatment systems and to 

adjust performance bonds accordingly. 

Those permittees then sought 

administrative review of the KFO’s 

orders. However, on October 2, 2000, 

the National Mining Association (NMA) 

filed suit in the United States District 

Court for the Northern Division of the 

Eastern District of Tennessee seeking to 

overturn the policy. NMA v. Babbitt, No. 

3:00–CV–549 (E.D. Tenn. filed Oct 2, 

2000). The plaintiffs alleged that the 

KFO’s Policy Memorandum No. 37 was 

unlawfully adopted in violation of the 

rulemaking requirements of the 

Administrative Procedure Act, is 

inconsistent with the permitting and 

bonding provisions of SMCRA by 

requiring retroactive revision of permits 

that have already expired and the 

posting of performance bond for expired 

permits, and violates the Due Process 

Clause of the U.S. Constitution. 

The Department of the Interior’s 

Office of Hearings and Appeals then 

placed the administrative appeals of the 

KFO’s orders to individual permittees in 

abeyance pending resolution of the 

Federal district court case. On July 24, 

2001, the Federal district court litigation 

also was placed in abeyance in response 

to NMA’s request that the parties pursue 

settlement of the case. Settlement 

negotiations are ongoing. 

The Tennessee Federal program 

regulations at 30 CFR 942.800 

incorporate the Federal bonding 

regulations in 30 CFR Part 800 by 

reference. In addition, that section of the 

Tennessee Federal program contains a 

few Tennessee-specific bonding 

provisions. As adopted on October 1, 

1984, the Tennessee Federal program 

relies upon a conventional bonding 

system in which site-specific 

performance bonds must be filed with 

the KFO. The KFO determines the 

amount of the performance bond based 

upon the approved reclamation plan 

and adjusts that amount periodically 

when the cost of future reclamation 

changes. The bond amount must be 

sufficient to assure completion of the 

reclamation plan if we have to perform 

the work in the event of bond forfeiture. 

A system that provides an income 

stream may be better suited to ensuring 

the treatment of long-term pollutional 

discharges, such as AMD, than 

conventional bonds. Surety bonds, the 

most common form of conventional 

bond, are especially ill-suited for this 

purpose because surety companies 

normally do not underwrite a bond 

when there is no expectation of release 

of liability. Further, a mandate that 

would require the permittee to 

immediately post other forms of 

conventional bonds, such as cash or 

negotiable bonds, may force insolvency 

on a permittee that is currently treating 

pollutional discharges but is unable to 

provide the large sums required to 

guarantee treatment through 

conventional bonding instruments. 

Insolvency will most likely lead to 

forfeiture of existing bonds and the 

proceeds of that forfeiture may not be 

sufficient to ensure long-term treatment 

of discharges. 

On May 17, 2002, we published an 

advance notice of proposed rulemaking 

(ANPR) entitled ‘‘Bonding and Other 

Financial Assurance Mechanisms for 

Treatment of Long-Term Pollutional 

Discharges and Acid/Toxic Mine 

Drainage (AMD) Related Issues.’’ 67 FR 

35070. In that ANPR, we sought 

comments on, among other things, the 

form and amount of financial assurance 

that should be required to guarantee 

treatment of postmining pollutional 

discharges. Commenters on the ANPR 

disagreed as to whether financial 

assurance should be required, but they 

largely agreed that, if it was, surety 

bonds are not the best means—or even 

an appropriate means—of 

accomplishing that purpose. For 

instance, the Surety Association of 

America stated that surface coal mining 

operations ‘‘would not be prudently 

bondable if the scope of the obligation 

included perpetual treatment of 

discharge[s].’’ According to the 

Association, ‘‘the problem of acid mine 

drainage requires a funding vehicle, and 

a surety bond is not a funding vehicle.’’

Through responses to the ANPR and 

the experience of Pennsylvania 

(discussed below), we have determined 

that the best approach to provide an 

alternative for financial assurances for 

long-term treatment of pollutional 

discharges is to allow the permittee to 

establish a dedicated income-producing 

account, such as a trust fund or annuity 

or both, that is held by a third party as 

trustee for the regulatory authority. The 

income stream from a fully funded trust 

fund or annuity will be used to fund 

treatment of postmining pollutional 

discharges (including maintenance, 

renovation, and replacement of 

treatment and support facilities as 

needed), the reclamation of the sites 

upon which treatment facilities are 

located and areas used in support of 

those facilities. However, until this 

rulemaking, our regulations did not 

provide for a mechanism to accept such 

accounts in satisfaction of the 

Tennessee Federal program’s bonding 

requirements. The addition of paragraph 

(c) to 30 CFR 942.800 now implements 

our statutory authority and establishes 

the parameters under which trust funds 

and annuities must operate. 

By adding paragraph (c), we are 

building on the experience of 

Pennsylvania, which has successfully 

implemented similar provisions. 

Pennsylvania amended its Surface 

Mining Conservation and Reclamation 

Act to include the authority to accept 

trust funds and annuities to fund 

treatment of postmining discharges. 

Pennsylvania’s statutes allow the 

complete release of any conventional 

bonds remaining after land reclamation 

has been fully completed and the 

revegetation responsibility period has 

expired for a site with a pollutional 

discharge if provisions have been made 

for sound future treatment of that 

discharge. 52 Pa. Cons. Stat. Ann. 

1396.4(g)(3). Pennsylvania’s provisions 

state that sound future treatment must 

consist of another approved financial 

instrument, such as a trust fund, that 

will fully secure the long-term treatment 

obligation and is applicable to the area 

associated with that treatment. 52 Pa. 

Cons. Stat. Ann. 1396.4(d.2). This rule 

is not intended to mirror the provisions 

of the Pennsylvania program, but rather 

to adapt the concepts behind 

Pennsylvania’s program for use in the 

Tennessee Federal program. 

When Pennsylvania submitted the 

amendment to its program authorizing 

the use of trust funds and annuities, it 

characterized those financial 

instruments as collateral bonds, and we 

approved them as such. 70 FR 25472, 

amended at 70 FR 52916. However, the 

Federal regulations at 30 CFR 800.11(e) 

provide another option for approving 

trust funds and annuities. Those 

regulations implement the provision in 

section 509(c) of SMCRA, 30 U.S.C. 

1259(c), authorizing OSM and the States 

to establish an ‘‘alternative system that 

will achieve the objectives and purposes 

of the bonding program pursuant to this 

section.’’ The regulations at 30 CFR 

800.11(e) require that those alternative 

systems (1) ‘‘assure that the regulatory 

authority will have available sufficient 

money to complete the reclamation plan 

for any areas which may be in default 

at any time;’’ and (2) ‘‘provide a 

substantial economic incentive for the 

permittee to comply with all 

reclamation provisions.’’ As we noted in 

the proposed rule, establishment of a 


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trust fund or annuity would satisfy the 

first criterion, while the permittee’s 

provision of the moneys needed to 

establish a trust fund or annuity and the 

express terms of the trust would satisfy 

the second criterion. 71 FR 17684. 

In this rulemaking, we are providing 

for the use of trust funds and annuities 

in Tennessee as an alternative bonding 

system (ABS), as provided for in section 

509(c) of the Act. As an ABS, trust funds 

and annuities are not subject to the 

provisions of 30 CFR 800.12, 800.20, 

800.21, and 800.23 because those 

provisions pertain only to various types 

of conventional bonds. Except as 

otherwise provided in this rule, trust 

funds and annuities will generally be 

subject to the other provisions of 30 CFR 

Part 800. Specific information on the 

portions of 30 CFR Part 800 that apply 

to individual trust funds and annuities 

will be set forth in a formal written trust 

fund or annuity agreement made 

between the KFO and the permittee 

responsible for treating the discharge. 

We will allow permittees a reasonable 

time to fully fund trust funds and 

annuities rather than requiring a lumpsum deposit as would be required for 

collateral bonds. We will use the 

provisions of 30 CFR 800.15(a) on a sitespecific basis to establish a schedule for 

periodic review to ensure that trusts and 

annuities contain sufficient funds for 

treatment of the discharge, and 

maintenance and reclamation of 

associated facilities. 

A permittee with postmining 

pollutional discharges that establishes a 

trust fund or annuity to guarantee 

funding for treatment will be able to 

secure release of conventional bonds on 

the portion of their permit that does not 

support the treatment of the discharge. 

However, the trust fund or annuity must 

be fully funded before the permittee 

qualifies for release of the conventional 

bond. A fully funded trust fund or 

annuity would be available to fund 

treatment and reclamation activities in 

the event of a permittee’s bankruptcy or 

dissolution. 

In implementing this rule, we will 

first determine whether a postmining 

pollutional discharge requiring longterm treatment exists. If so, and if the 

permittee elects to use a trust fund or 

annuity to satisfy the financial 

assurance (performance bond) 

obligation for discharge treatment, we, 

in consultation with the permittee, will 

develop a formal written agreement that 

sets forth the details of the trust fund or 

annuity. While we will consult in good 

faith with the permittee on the terms of 

the trust fund or annuity, including the 

selection of the trustee, the investment 

mix making up the trust fund or 

annuity, and the amount and duration 

of the trust agreement or annuity, we 

retain the final authority and 

responsibility to establish bond 

amounts, terms, and conditions, as 

provided by 30 CFR 800.16 and this 

rule. In determining the amount needed 

to fully fund the trust fund or annuity, 

we will consider the quality and 

quantity of the discharge, anticipated 

future changes in discharge quantity 

and quality, treatment options, support 

facilities needed, treatment facility 

maintenance, renovation, and 

replacement intervals, current and 

projected investment performance, and 

any other factors necessary to ensure 

ongoing treatment and reclamation of 

the discharge. We will use this rule, 

existing OSM policies, and computer 

software designed to estimate treatment 

and associated costs to calculate the 

amount of funding required to fulfill 

treatment obligations. 

We anticipate that a fully funded trust 

or annuity may include provisions for 

payments to the permittee as a 

mechanism to cover the cost of water 

treatment, especially for those 

permittees no longer generating income 

from the mining of coal. Payments from 

the income stream of a fully funded 

trust fund or annuity will not be 

considered a bond release or a bond 

forfeiture. This rule establishes an ABS 

authorizing the establishment of a trust 

or annuity that produces an income 

stream that can be transferred to a 

permittee or other entity to pay for the 

treatment costs provided for in 

§ 942.800(c)(8). The trust fund or 

annuity will also include other 

provisions that provide for the 

continuation of treatment in the event 

that the permittee fails to meet its 

treatment obligations. 

This rule does not alter our existing 

responsibilities or those of permittees or 

any other Federal or State agency 

relating to postmining pollutional 

discharges. Existing treatment 

requirements and obligations, as well as 

permitting and enforcement 

responsibilities, are not affected by this 

rule. 

Because of the adoption of this rule, 

we will not be pursuing a national 

rulemaking regarding the use of trust 

funds and annuities in response to the 

ANPR that we published in 2002. The 

successful implementation of trusts and 

annuities in the Pennsylvania program 

and our explicit addition of trust funds 

and annuities as an ABS in Tennessee 

with this rulemaking demonstrate that 

adequate authority for the use of trust 

funds and annuities is already available 

under SMCRA and its implementing 

regulations. Therefore, a national rule is 

not needed. 

B. Sections 942.816(f)(3) and (4) and 

942.817(e)(3) and (4): Revegetation 

Success Requirements for ForestryRelated Postmining Land Uses 

On April 6, 2006, we proposed 

revisions to the Tennessee Federal 

program regulations regarding groundcover revegetation success standards for 

reclaimed lands with postmining land 

uses of wildlife habitat, undeveloped 

land, recreation, or forestry. In this final 

rule, we are adopting the revisions as 

proposed, with one technical correction 

and minor editorial modifications to 

reflect plain language principles. The 

technical correction replaces the term 

‘‘mining and reclamation plan’’ in the 

proposed rule with ‘‘reclamation plan’’

to be consistent with terminology used 

elsewhere throughout the Federal 

regulations. 

The revisions modify 30 CFR 

942.816(f)(3) and 942.817(e)(3) by 

eliminating the 80% vegetative ground 

cover revegetation success standard for 

reclaimed lands with postmining land 

uses of wildlife habitat, undeveloped 

land, recreation, or forestry. The 

regulations will be changed to state that 

herbaceous ground cover should be 

limited to that necessary to control 

erosion and support the postmining 

land use and that the permit will specify 

the ground cover seed mixes and 

seeding rates to be used. Final 

§§ 942.816(f)(3) and 942.817(e)(3) read 

as follows: 

(3) For areas developed for wildlife habitat, 

undeveloped land, recreation, or forestry, the 

stocking of woody plants must be at least 

equal to the rates specified in the approved 

reclamation plan. To minimize competition 

with woody plants, herbaceous ground cover 

should be limited to that necessary to control 

erosion and support the postmining land use. 

Seed mixes and seeding rates will be 

specified in the permit. 

Section 515(b)(19) of SMCRA, 30 

U.S.C. 1265(b)(19), requires 

establishment of a diverse, effective, and 

permanent vegetative cover, at least 

equal to the premining cover, that is 

capable of self-regeneration and plant 

succession. The Federal regulations at 

30 CFR 816.116 (for surface mining 

activities) and 817.117 (for underground 

mining activities) provide national 

requirements and parameters for 

revegetation success standards. Sections 

816.116(b)(3) and 817.116(b)(3) 

establish requirements pertinent to 

revegetation success standards for areas 

to be developed for postmining land 

uses of fish and wildlife habitat, 

recreation, undeveloped land, or forest 

products. Those regulations provide that 


jlentini on PROD1PC65 with RULES2
9620 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Rules and Regulations 

1Tree Survival on a Mountaintop Surface Mine in 

West Virginia King, J., J. Skousen, West Virginia 

University Morgantown, American Society of 

Mining and Reclamation, 2003. 

2Herbaceous Ground Cover Effects on Native 

Hardwoods Planted on Mined Land Burger, J.A., 

D.O. Mitchem, C.E. Zipper, R. Williams, Virginia 

Polytechnic Institute and State University, 

American Society of Mining and Reclamation, 2005. 

3Top 10 Principles for Managing Competing 

Vegetation to Maximize Regeneration Success and 

Long-Term Yields R.G. Wagner, University of 

Maine. 

4How to Restore Forests on Surface-Mined Land 

Burger, J.A., C.E. Zipper, Virginia Polytechnic 

Institute and State University, Powell River Project, 

Virginia Cooperative Extension Publication 460–

123, Revised 2002. 

‘‘success of vegetation shall be 

determined on the basis of tree and 

shrub stocking and vegetative ground 

cover.’’

At the time that we promulgated the 

Federal program for Tennessee, the 

national rules at §§ 816.116(a)(1) and 

817.116(a)(1) required the regulatory 

authority to select the standards for 

revegetation success and include them 

in the regulatory program. 49 FR 38874. 

Therefore, we included specific 

standards in the Tennessee Federal 

program at §§ 942.816(f)(3) and 

942.817(e)(3) for areas with postmining 

land uses of wildlife habitat, recreation, 

or forest products. Those regulations 

required a minimum 80% ground cover 

on mined lands reclaimed for those 

postmining land uses. In the preamble 

discussion of those rules, we noted that 

a minimum level of 80% vegetative 

coverage was necessary to control 

erosion on the steep terrain that is 

common to eastern Tennessee. 49 FR 

38888. 

In addition, we adopted 

§§ 942.816(f)(4) and 942.817(e)(4) which 

prohibit bare areas larger than onesixteenth of an acre in size and that total 

more than 10% of the area seeded. We 

adopted these provisions because we 

believed that they were necessary to 

prevent the release of bonds on lands 

that meet the overall requirements of 

80% or 90% ground cover, but still have 

localized areas that are not yet stabilized 

with respect to soil erosion. 49 FR 

38888. 

We have learned much more about 

reestablishing vegetation, particularly 

trees, on mined land in the years since 

we adopted those standards. Permittees 

generally prefer pasture or grazing land 

as postmining land uses because they do 

not require the extra work and expense 

of planting trees and ensuring 

successful tree establishment. Thus, the 

reclamation of mine sites has typically 

resulted in dense grasslands with few 

trees. Many trees that were planted had 

low survival rates and required 

replanting, while those that survived 

often did not reach their optimal growth 

potential, which further discouraged 

operators from considering a land use 

that required planting trees. 

We recognize the importance and 

benefits of promoting the 

reestablishment of forests, especially 

native hardwood forests, on mined land. 

Consequently, we have determined that 

changes to our regulations are necessary 

to promote and enable the establishment 

of diverse, vigorous forests on reclaimed 

mine sites. The conventional method of 

mine reclamation typically includes 

using bulldozers to grade and track-in 

spoil, creating smooth slopes. This 

method results in a compacted soil 

surface that not only inhibits root 

growth of seedlings and planted stock, 

but also restricts infiltration of 

precipitation and increases runoff. To 

prevent erosion from runoff, operators 

seed the regraded areas with aggressive, 

quick-growing herbaceous ground 

covers. This method of reclamation is 

very effective in producing dense 

hayland and pastureland. However, it is 

very detrimental to establishing forested 

land on mine sites for three reasons. 

First, the dense herbaceous ground 

covers used to control erosion compete 

with newly planted trees and tree 

seedlings for soil nutrients, water, and 

sunlight. Second, soil compaction 

inhibits root growth as well as water 

infiltration. Third, the dense ground 

cover provides habitat for rodents and 

other animals that damage tree seedlings 

and young trees. 

In summarizing research into ground 

cover and its effects on establishment of 

trees on mined lands, Jim King and Jeff 

Skousen of West Virginia University 

noted in 2003: 

The negative effects of overly abundant 

and aggressive ground cover on the survival 

and growth of trees planted on reclaimed 

mine lands has long been known. Trees 

planted into introduced, aggressive forages 

[especially tall fescue and sericea lespedeza] 

often are overtopped by the grass or legume 

and are unable to break free (Burger and 

Torbert, 1992; Torbert et al., 1995). The 

seedlings are pinned to the ground and have 

little chance for survival. If it is known that 

trees are to be planted, a tree-compatible 

ground cover should be seeded that will be 

less competitive with trees. Tree-compatible 

ground cover should be slow growing, 

sprawling or low growing, not allopathic, and 

non-competitive with trees (Burger and 

Torbert, 1992). Plass (1968) reported that 

after four growing seasons the height growth 

of sweetgum and sycamore planted into an 

established stand of tall fescue on spoil banks 

was significantly retarded. Andersen et al. 

(1989) found that survival and height growth 

for red oak and black walnut was 

significantly greater on sites where ground 

cover was chemically controlled.1

Researchers affiliated with the 

Virginia Polytechnic Institute and State 

University also found that: 

The use of tree-compatible ground covers 

during reclamation can allow seedlings to 

survive at rates exceeding the 70% that is 

necessary to achieve regulatory compliance 

without the expense of follow-up herbicide 

treatment. Furthermore, our experience 

indicates that sowing tree-compatible ground 

covers at reduced rates often allows invasion 

by woody vegetation from adjacent forests. 

The results of this study suggest that sowing 

ground cover at reduced rates achieving 50 

to 70% cover, instead of 90% currently 

required by Virginia’s regulations, would also 

greatly improve the likelihood of hardwood 

reforestation success.2

Researchers from the University of 

Maine determined that even a small 

amount of herbaceous ground cover can 

inhibit tree growth: 

Additional research has found that 

herbaceous vegetation (grasses and 

broadleaves) in small amounts (<20% cover) 

around seedlings immediately after planting 

will substantially reduce early stand growth.3

These researchers are united in their 

findings that even ground cover 

significantly less than the 80% ground 

cover standard in Tennessee’s rules 

would still be detrimental to tree 

survival and growth. 

We have also determined that dense 

herbaceous ground cover impedes the 

natural succession of native forest 

plants, thereby frustrating attainment of 

the requirement in section 515(b)(19) of 

SMCRA, 30 U.S.C. 1265(b)(19), for 

establishment of a diverse, effective, 

permanent vegetative cover of the same 

seasonal variety native to the area and 

capable of self-regeneration and plant 

succession. As Burger and Zipper noted: 

Another purpose of low ground cover 

seeding rates is to allow the invasion of 

native plant species such as yellow poplar, 

red maple, birches and other light-seeded 

trees. Dense ground covers prevent the 

natural seeding-in of native plants.4

While excessive herbaceous ground 

cover is detrimental to tree growth and 

survival and natural succession, we are 

cognizant that some vegetative cover is 

often needed to meet the cover 

requirements of 30 CFR 816.111(a)(3) 

and (4) and 817.111(a)(3) and (4). 

Additional cover may be needed to 

control erosion on newly reclaimed 

mine sites, as required by 30 CFR 

816.95(a) and 817.95(a), and to prevent 

the contribution of additional 

suspended solids to streamflow outside 

the permit area, as required by 30 CFR 

816.45(a) and 817.45(a) and section 

515(b)(10)(B)(i) of SMCRA, 30 U.S.C. 

1265(b)(10)(B)(i). However, the amount 

of vegetative ground cover necessary to 

control erosion on any particular site is 


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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Rules and Regulations 9621 

5Herbaceous Ground Cover Effects on Native 

Hardwoods Planted on Mined Land Burger, J.A., 

D.O. Mitchem, C.E. Zipper, R. Williams, Virginia 

Polytechnic Institute and State University, 

American Society of Mining and Reclamation, 2005. 

6 Influence of Grading Intensity on Ground Cover 

Establishment, Erosion, and Tree Establishment on 

Steep Slopes Torbert, J.L., Burger, J.A., Virginia 

Polytechnic Institute and State University, 

International Land Reclamation and Mine Drainage 

Conference and the Third International Conference 

on the Abatement of Acidic Drainage, 1994. 

a function of the site topography, 

composition of the surface material, 

precipitation amounts, and the degree of 

soil compaction. Loosely graded or 

uncompacted material, particularly if 

placed on a relatively gentle slope, may 

have virtually no runoff or erosion and 

would require little or no herbaceous 

vegetative ground cover to control 

erosion. Conversely, highly compacted 

material placed on a steep slope 

severely limits infiltration and increases 

runoff so that a dense vegetative cover 

may be needed to control erosion. 

Researchers have stated: 

Non-compacted mine soils have higher 

infiltration rates and erode less than graded 

soils. When using the Forestland 

Reclamation Approach, less ground cover is 

needed to prevent erosion and protect water 

quality, and in the process, diverse mixes of 

trees are able to survive and grow at rates that 

will create an economically viable forest.5

Third-year results show that intensive 

grading did not result in better ground cover 

establishment or erosion control. In fact, 

erosion was highest on the intensively graded 

plots.6

Loosely grading the topsoil or topsoil 

substitutes on reclaimed mine sites will 

result in less compacted growing media, 

which will increase water infiltration 

and limit the amount of runoff. This in 

turn will limit erosion and 

sedimentation as well as make more 

water available for tree growth. Limited 

compaction is also more favorable to 

tree root growth, which will increase 

survival and growth rates. 

Forestry researchers agree that 

productive forest land can best be 

created on reclaimed mine land by 

using techniques that we will refer to as 

the Forestry Reclamation Approach 

(FRA). The FRA is a series of five 

techniques designed to reestablish 

healthy productive forests on reclaimed 

mine lands. These techniques include 

(1) Creating a suitable rooting medium 

for tree growth that is no less than four 

feet deep and that is comprised of 

topsoil, weathered sandstone and/or the 

best available material; (2) loosely 

grading the topsoil or topsoil substitute 

to create a non compacted growth 

medium; (3) using herbaceous ground 

covers that are compatible with growing 

trees; (4) planting two types of trees—

early succession species (for wildlife 

and soil stability) and commercially 

valuable crop trees; and (5) using proper 

tree-planting techniques. 

We examined the factors in Federal 

and State regulations that may act as 

impediments to implementing the FRA. 

We determined that there were no 

regulations regarding backfilling and 

grading that would act as impediments 

to implementation of the provisions of 

the FRA that require a minimum of four 

feet of topsoil or topsoil substitutes to be 

loosely graded. Thus, we did not 

propose any changes in our backfilling 

and grading regulations as part of this 

rulemaking. 

However, we did identify the ground 

cover standards and bare area 

restrictions adopted as part of the 

Tennessee Federal program on October 

1, 1984, as impediments to the FRA and 

disincentives to forest restoration. 

Elimination of the 80% vegetative 

ground cover standard and bare area 

restrictions will provide us with the 

flexibility to adjust the amount of 

vegetative ground cover required on 

mine sites with postmining land uses 

related to forestry to levels that are 

sufficient to control erosion without 

impairing tree growth and survival. To 

minimize competition with woody 

plants while meeting other regulatory 

requirements, we are revising our rules 

to specify that herbaceous ground cover 

should be limited to that amount 

necessary to control erosion and support 

the approved postmining land use. We 

will take into account all site 

characteristics when determining the 

level of vegetative ground cover suitable 

for a mine site and require permittees to 

specify the ground cover seeding mixes 

and seeding rates in the permit. 

As proposed, we are also expanding 

the postmining land uses to which the 

regulations at §§ 942.816(f)(3) and 

942.817(e)(3) apply by including 

undeveloped land and by modifying the 

postmining land use of forest products 

to forestry. We made these changes to 

accurately reflect the postmining land 

uses that require the establishment of 

trees and shrubs. The revised version of 

the national regulations at 

§§ 816.116(b)(3) and 817.116(b)(3) that 

we adopted in a separate rulemaking on 

August 30, 2006, likewise includes 

undeveloped land as a postmining land 

use to which its requirements apply. See 

71 FR 51695–51697. 

SMCRA and its implementing 

regulations clearly require control of 

erosion and prevention of additional 

sedimentation. They also require 

establishment of a vegetative cover that 

is capable of stabilizing the soil surface 

from erosion. See 30 CFR 816.111(a)(4) 

and 817.111(a)(4). At the same time, 

research has demonstrated that many 

types of herbaceous ground cover are 

detrimental to tree growth and natural 

succession and thus would impede 

attainment of the postmining land uses 

of wildlife habitat, recreation, or 

forestry. The regulatory modifications 

that we are adopting in this rule will 

ensure that the FRA can be effectively 

implemented in Tennessee. 

C. Removal of Restrictions on the 

Amount of Bare Areas for Postmining 

Land Uses of Wildlife Habitat, 

Undeveloped Land, Recreation, or 

Forestry 

As proposed, we are revising the 

Tennessee Federal program regulations 

to exempt sites with postmining land 

uses of wildlife habitat, undeveloped 

land, recreation, or forestry from the 

restrictions of §§ 942.816(f)(4) and 

942.817(e)(4) concerning bare areas. 

This change facilitates implementation 

of the FRA, which requires the use of 

less competitive herbaceous vegetative 

ground covers at lower seeding rates, or 

in some cases no herbaceous ground 

cover at all. Consequently, some areas 

may be essentially bare except for tree 

seedlings and volunteer herbaceous 

vegetation. As we noted earlier, reduced 

levels of herbaceous vegetative ground 

cover are necessary for natural 

succession of native forest plants and to 

reduce competition between grasses and 

legumes and planted tree seedlings for 

water, nutrients and sunlight. To 

achieve this goal, some areas must be 

devoid of herbaceous ground cover 

because many native woody plants and 

forbs require bare soil conditions for 

seed germination. In addition, most 

traditionally planted herbaceous ground 

cover species are not expected to be part 

of the mature forest plant community. 

Final §§ 942.816(f)(4) and 

942.817(e)(4) reads as follows: 

(4) Bare areas shall not exceed onesixteenth (1⁄16) acre in size and total not more 

than ten percent (10%) of the area seeded, 

except for areas developed for wildlife 

habitat, undeveloped land, recreation, or 

forestry. 

Nothing in this rule change should be 

construed as negating the requirement 

in 30 CFR 816.111(a)(3) and 

817.111(a)(3) that reestablished 

vegetation on mined lands be at least 

equal in extent of cover to the natural 

vegetation of the area. Nor does this 

change alter the applicability of the 

erosion control requirement in 30 CFR 

816.95(a) and 817.95(a). 


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9622 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Rules and Regulations 

IV. How did we respond to the 

comments that we received on the 

proposed rule? 

A. Section 942.800(c), (proposed as 

§ 942.800(b)(4)): Bond and Insurance 

Requirements for Surface Coal Mining 

and Reclamation Operations 

Of the 13 commenters on the 

proposed revisions to 30 CFR 

942.800(b), which we are adopting as 30 

CFR 942.800(c) in this final rule, four 

were coal companies, two were 

associations representing the coal 

industry, two were government 

agencies, two were environmental 

groups, one was an association 

representing mining states, one was an 

organization that administers trusts in 

other states, and one was a private 

citizen. 

Seven commenters generally 

supported the concept of using trust 

funds and annuities to satisfy financial 

assurance requirements for treatment of 

long-term postmining pollutional 

discharges, but requested that we put 

more details concerning the creation 

and administration of those mechanisms 

in the rule. 

We appreciate the support from these 

commenters. However, we do not find it 

necessary or appropriate to adopt the 

suggestions for more specific regulations 

regarding the creation and 

administration of trust funds and 

annuities. The purpose of this rule is to 

provide us with mechanism to use our 

statutory authority to accept trust funds 

and annuities in lieu of conventional 

performance bond instruments to fund 

treatment of postmining pollutional 

discharges. The final rule establishes a 

framework (with safeguards) within 

which we will accept trust funds and 

annuities. It is not, nor was it intended 

to be, a handbook that specifies all the 

details of how trust funds or annuities 

would work. Those details are best 

worked out on an individual basis, 

taking into consideration the 

characteristics of the discharge, the 

mine site, the investment instrument, 

and economic projections at the time 

that the trust or annuity is finalized. The 

KFO will address the specifics of each 

trust fund or annuity in formal written 

agreements with permittees. This 

approach is consistent with the manner 

in which conventional bond amounts 

are calculated, which is left to the 

discretion of the regulatory authority. In 

situations where we are the regulatory 

authority, Directive TSR–1, ‘‘Handbook 

for Calculation of Reclamation Bond 

Amounts,’’ governs those calculations. 

Two commenters requested that we 

either increase bond amounts or require 

both bonds and trusts on the same mine 

site. We find that there is no legal basis 

or practical reason to do so. Under 

section 509(a) of SMCRA, ‘‘[t]he amount 

of the bond shall be sufficient to assure 

the completion of the reclamation plan 

if the work had to be performed by the 

regulatory authority in the event of 

forfeiture and in no case shall the bond 

for the entire area under one permit be 

less than $10,000.’’ 30 U.S.C. 1259(a). In 

addition, section 509(c) specifies that an 

ABS, such as the trust funds and 

annuities approved under this rule, 

must ‘‘achieve the objectives and 

purposes of the bonding program 

pursuant to this section.’’ 30 U.S.C. 

1259(c). Because § 942.800(c)(1) requires 

the trust fund or annuity to ‘‘be 

adequate to meet all anticipated 

treatment needs, including both capital 

and operating expenses,’’ the amount of 

the trust fund or annuity should be 

sufficient to meet the requirements of 

section 509(c) of SMCRA. On a case-bycase basis, depending upon the stage of 

mining during which a trust fund or 

annuity is established, a mine may have 

both conventional bonds and a trust 

fund or annuity. Requiring multiple 

bonds in all cases goes beyond the 

requirements of section 509(c) and 

would place an unnecessary burden on 

permittees. 

In the remainder of this section of the 

preamble, we will discuss comments 

directed at specific sections of our 

revision to § 942.800, followed by 

comments of a more general nature that 

were directed to the use of trust funds 

and annuities. We will not discuss 

comments that are beyond the scope of 

this rulemaking, such as comments that 

do not pertain to the rule provisions that 

we proposed to revise on April 6, 2006. 

Section 942.800(c)(1), (Proposed as 

§ 942.800(b)(4)(i)) 

Subsection 942.800(c)(1) provides that 

we will determine the amount of the 

trust fund or annuity, which must be 

adequate to meet all anticipated 

treatment needs, including both capital 

and operating expenses. 

Five commenters suggested that the 

method for determining the amount of 

the trust fund or annuity must be 

objective and clearly stated in the rule. 

Two commenters recommend that we 

use the AMDTreat software (a computer 

program used to estimate costs 

associated with treating discharges) or 

the Pennsylvania law, as a model, to 

determine the amount needed. One 

commenter provided two mathematical 

formulas to calculate the present value 

of the amount needed to fund the trust, 

while another commenter noted that 

historic operating and capital costs for 

chemical treatment and construction of 

the treatment systems are important 

indicators of future costs. Also, a 

commenter indicated that data from the 

permittee should be used to determine 

the amount of the trust fund or annuity 

because of personal experience with 

OSM requiring excessive bond amounts 

based on outdated and erroneous 

information. 

As previously noted, our rule 

establishes a framework (with 

safeguards) within which we will accept 

trust funds and annuities. It is not, nor 

was it intended to be, a handbook that 

specifies all the details of how trust 

funds or annuities would work. Those 

details are best worked out on an 

individual basis, taking into 

consideration the characteristics of the 

discharge, the mine site, the method of 

treatment, the investment instruments, 

and economic projections at the time 

that the trust or annuity is finalized. 

Consequently, we are not making the 

changes sought by the commenters. We 

do not believe that it is advisable to 

limit our flexibility by including all the 

variables that may factor in to the 

determination of the amount of the trust 

fund or annuity in the rule. Doing so 

could restrict our ability to consider the 

most current information and 

technology available when determining 

the amount of money needed to fully 

fund a trust fund or annuity. 

When calculating the amount of a 

trust fund or annuity, we plan to look 

at, but are not limited to, the following 

sources: Historic treatment cost data (if 

any) supplied by the permittee; existing 

publicly available software, such as 

AMDTreat; and publicly available 

policies and guidelines, such as OSM 

Directive TSR–1, ‘‘Handbook for 

Calculation of Reclamation Bond 

Amounts.’’ For instance, the AMDTreat 

software developed cooperatively by the 

Pennsylvania Department of 

Environmental Protection, the West 

Virginia Department of Environmental 

Protection, and OSM is one tool 

available to the KFO to use to estimate 

the costs of treatment and the costs of 

constructing and maintaining all 

associated treatment facilities. 

Section 942.800(c)(2), (Proposed as 

§ 942.800(b)(4)(ii)) 

In subsection 942.800(c)(2), we 

require that the trust fund or annuity be 

in a form that we approve and contain 

all the terms and conditions that we 

require. We received no comments on 

this provision. 

Section 942.800(c)(3), (Proposed as 

§ 942.800(b)(4)(iii)) 

In subsection 942.800(c)(3), we 

require that a trust fund or annuity 


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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Rules and Regulations 9623 

irrevocably establish the United States 

or Tennessee as the beneficiary of the 

trust fund or of the proceeds from the 

annuity. This provision is intended to 

ensure that moneys in the trust fund or 

annuity will be available to the 

regulatory authority for treatment 

regardless of an operator’s financial 

circumstances or business status. 

The one commenter on this 

subsection recommended that the rule 

be revised to allow trust accounts 

established for purposes of termination 

of jurisdiction to name alternative trust 

beneficiaries, such as the State of 

Tennessee. We disagree with the 

commenter’s assumption that trust 

funds or annuities will be established 

for purposes of termination of 

jurisdiction. This rulemaking provides 

for the establishment of a trust fund or 

annuity as an ABS, which means that 

we are retaining jurisdiction over the 

mine site with respect to treatment of 

the postmining pollutional discharge. 

However, we are accepting the 

commenter’s suggestion to name the 

State of Tennessee as an alternative 

beneficiary. When OSM became the 

regulatory authority for the State of 

Tennessee, we stated that the bonds 

posted for the Federal program for 

Tennessee would be payable to ‘‘‘The 

United States or the State of Tennessee’

* * * so as to ease the transition in the 

event that [Tennessee] reassumes 

primary regulatory authority.’’ 49 FR 

38877–38878. Because conventional 

bonds in Tennessee are payable to the 

United States and the State of 

Tennessee, we decided to require trust 

funds and annuities to be treated in a 

similar fashion to remain consistent 

with existing provisions. We have 

revised § 942.800(c)(3) to include this 

provision to be consistent with 

§ 942.800(b)(2). 

Section 942.800(c)(4), (Proposed as 

§ 942.800(b)(4)(iv)) 

Subsection 942.800(c)(4) requires that 

we specify the investment objectives of 

the trust fund or annuity. Four 

commenters stated that the investment 

objectives of the trust fund should be 

both defined in the rule and spelled out 

in the trust agreement. The commenters 

asserted that the permittee should 

choose the investment objectives subject 

to approval by the regulatory authority. 

The commenters opined that if the 

regulatory authority alone selects the 

investment objectives, it may use an 

overly conservative mix of assets that 

may adversely impact the investment 

performance of the trust. Additionally, 

one commenter stated that trusts created 

under these rules should allow 

Tennessee law to regulate the duties and 

obligations of the trustees, which would 

include making proper investment 

decisions. Another commenter 

recommended deleting this 

subparagraph entirely because OSM is 

not equipped to control the investment 

objectives of the trust fund or annuity. 

The commenter argued that the 

investment objectives of the trust should 

be established by the trust agreements 

themselves and by professionals with 

experience in managing trust accounts. 

We are adopting the rule as proposed 

because (1) We see no benefit to 

restricting our flexibility by specifying 

investment objectives in the rule, and 

(2) we must retain final control of the 

investment objectives to protect the 

assets of the trust or annuity and ensure 

that sufficient funds will be available for 

treatment. However, nothing in this rule 

will prevent us from implementing this 

provision in a manner consistent with 

the other comments that we received on 

this subparagraph, should we determine 

that it would be appropriate and 

beneficial to do so. Also, while we 

retain ultimate control of the investment 

objectives, which will be defined in the 

trust or annuity agreement, the trustee 

will make decisions regarding the 

investment of the assets of the trust fund 

or annuity. Trustees have an inherent 

obligation to comply with Tennessee 

law, so there is no need for us to add 

that requirement to this rule. 

Section 942.800(c)(5), (Proposed as 

§ 942.800(b)(4)(v)) 

Subsection 942.800(c)(5) provides that 

termination of the trust fund or annuity 

may occur only as specified by OSM 

upon a determination that no further 

treatment or other reclamation measures 

are necessary, that a replacement bond 

or another financial instrument has been 

posted, or that the trust fund or annuity 

can no longer be administered to carry 

out the purpose for which it was 

established. As an example of a trust 

fund or annuity that is terminated 

because it can no longer carry out the 

purpose for which it was established, 

the trust documents may specify that a 

trust will be terminated if the regulatory 

authority determines that it is too small 

to be administered effectively. This 

provision allows us to keep the trust 

fund or annuity in place as long as 

necessary and practical to maintain and 

reclaim treatment facilities. 

Five commenters asserted that the 

rule should address the duration of the 

trust and the criteria for termination of 

the trust fund or annuity. The 

commenters requested the 

establishment of objective criteria, based 

on time or other factors, to establish the 

point at which the trust fund or annuity 

must be terminated and the remaining 

assets of the trust or annuity must be 

returned to the permittee. One 

commenter suggests that we modify the 

rule to require the regulatory authority 

to make a determination, based on sitespecific information, of how long 

treatment is anticipated. The commenter 

further suggests that we modify the rule 

to provide for monitoring of the 

untreated discharge for a period not to 

exceed two years after treatment is 

completed. After two years, the trust 

should be terminated and the proceeds 

returned to the operator. 

We do not agree that the suggested 

provisions should be part of the rule. In 

order to meet the purposes of § 509 of 

the Act, the alternative system should 

meet the objectives and purposes of the 

bonding program established by 

SMCRA, including the requirement that 

liability ‘‘be for the duration of the 

surface coal mining and reclamation 

operation,’’ 30 U.S.C. 1259(b). 

Consequently, each agreement for a trust 

fund or annuity will specify the 

anticipated length of treatment, based 

on site-specific information. Defining 

treatment goals is an integral part of 

determining the funds necessary for 

sustaining the trust fund or annuity. 

Furthermore, if appropriate, the formal 

trust fund or annuity agreement may 

define a post-treatment monitoring 

program and the program’s anticipated 

duration. We intend for trust funds and 

annuities to be an additional option for 

permittees to fulfill their bonding 

obligations, while providing greater 

flexibility than conventional bonds. 

It is important to distinguish the 

duration of the trust or annuity from the 

duration of the obligation to the 

permittee to perform treatment of a 

pollutional discharge. We are providing 

that a trust fund or annuity may be 

terminated if replaced by another bond 

or financial instrument in 

§ 942.800(c)(5), consistent with § 800.30 

and other provisions of part 800. Thus, 

we anticipate that a trust or annuity of 

limited duration may need to be 

replaced by another bond or financial 

instrument if the permittee’s obligation 

to treat a pollutional discharge extends 

beyond the term of the trust or annuity. 

Rather than establishing an arbitrary 

duration in this rule, we have chosen to 

set the duration of the trust fund or 

annuity on a case-by-case basis, which 

will allow us to consider the anticipated 

need for treatment for each site, the 

permittee’s proposals for meeting the 

treatment obligations, and other 

considerations, such as the 

requirements of Tennessee law. 

One commenter noted that the 

specification of objective performance 


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standard criteria, such as 

reestablishment of biologic integrity, 

would eliminate any potential dispute 

between the permittee and OSM as to 

when it is appropriate to terminate the 

trust fund or annuity. According to the 

commenter, these types of objective 

performance standards exist in 

provisions of the Act detailing when a 

bond may be released. 

In response, we note that the trust or 

annuity agreement will specify 

treatment goals and requirements. We 

see no need or purpose to limit our 

flexibility by incorporating specific 

criteria in the rule itself. Indeed, doing 

so may be impossible or impractical, 

given the variation in discharges and the 

treatment standards applicable to those 

discharges. The KFO will evaluate 

whether the permittee has met the 

treatment goals in the agreements before 

terminating the trust or annuity. In 

order to provide a structure for how and 

when a trust fund or annuity will be 

released, we intend to incorporate the 

procedures for bond release under 30 

CFR 800.40 into the formal agreement 

creating the trust fund or annuity. This 

provision will provide a permittee with 

a mechanism for terminating the trust 

fund or annuity in the event that the 

permittee believes that no further 

treatment or other reclamation measures 

are necessary. We also intend to 

incorporate the notification procedures 

of § 519 of the Act and 30 CFR 800.40 

into the trust documents in order to 

inform the public about any request to 

release the trust fund or annuity. 

Section 942.800(c)(6), (Proposed as 

§ 942.800(b)(4)(vi)) 

Subsection 942.800(c)(6) provides that 

the release of money from the trust fund 

or annuity may be made only upon our 

written authorization. As discussed 

below, we have modified this provision 

to require that release of money from the 

trust fund or annuity to any source may 

be made only upon our written 

authorization or as a disbursement 

according to a schedule established in 

the agreement accompanying the trust 

fund or annuity. As we noted in the 

preamble to the proposed rule, we 

included this provision in our rule to 

ensure that we are aware of all 

expenditures from the trust fund or 

annuity and that the disbursements are 

used for their intended purpose, 71 FR 

17684. While we expect that the 

permittee will be treating the discharge 

with funds from the trust fund or 

annuity, we also intend that the trustee 

have the authority to employ other 

entities to continue treatment in the 

event that the permittee cannot or does 

not undertake the actions required for 

compliance. 

One commenter stated that we should 

allow withdrawal or release of funds 

according to the terms of the trust or 

annuity agreement instead of requiring 

written authorization to release money 

from the trust fund or annuity to the 

permittee. Another commenter 

suggested that we allow distributions of 

the funds on an annual basis to 

reimburse the permittee for capital 

investments and operating and 

maintaining treatment facilities. 

Similarly, another commenter stated 

that the trust fund or annuity 

agreements should include specific 

payment schedules for treatment costs. 

Finally, one commenter suggested that 

we modify this subsection to indicate 

the criteria that we will follow to release 

funds from the trust fund or annuity and 

clarify that release of funds to a 

permittee will not impair the ability of 

the fund to guarantee treatment. 

We have modified the rule to include 

the option of disbursing funds according 

to a schedule established in the trust 

fund or annuity agreement. That 

schedule could provide for annual 

payments if desired. Disbursement 

according to a schedule established in 

the trust fund or annuity agreement 

would meet our objective of ensuring 

that we are aware of withdrawals from 

the trust fund or annuity and that those 

funds are disbursed only for legitimate 

purposes. 

However, we do not agree that 

establishing release criteria in the rules 

would be beneficial or appropriate. 

Those details are best determined on a 

case-by-case basis; they will be set forth 

in the agreement accompanying the 

trust fund or annuity. The commenter’s 

concern that release of funds to the 

permittee may impair the ability of the 

trust fund or annuity to guarantee 

treatment is misplaced. We will use our 

authority under 30 CFR 800.15(a) to 

periodically evaluate all trust funds and 

annuities to ensure that sufficient funds 

will be available to meet the treatment 

mandate. If that evaluation indicates 

that a shortfall exists or will develop, 

we will require that the permittee 

provide additional funds to supplement 

the trust fund or annuity. 

Section 942.800(c)(7), (Proposed as 

§ 942.800(b)(4)(vii)) 

In subsection 942.800(c)(7), we 

specify which financial institutions and 

companies may serve as trustees or 

issue annuities. These requirements are 

intended to ensure that only qualified 

businesses and institutions administer 

the trust funds and annuities, thus 

reducing the possibility that the trust 

funds and annuities could be 

mismanaged. In a change from the 

proposed rule, we are adding insurance 

companies licensed or authorized to do 

business in Tennessee to the list of 

acceptable financial institutions to issue 

annuities for the treatment of long-term 

postmining pollutional discharges. This 

addition reflects the fact that insurance 

companies are major providers of 

annuities. 

One commenter suggested changing 

the rule to allow the permittee to pick 

the trustee subject to OSM approval. In 

response, we note that nothing in the 

rule would prohibit this arrangement. 

We expect to collaborate with a 

permittee in the establishment of a trust 

fund or annuity, including the selection 

of the trustee. 

Three commenters suggested that we 

allow entities organized as non-profit 

organizations under 26 U.S.C. 501(c)(3), 

such as The Clean Streams Foundation, 

Inc. (CSF), to act as trustees through a 

participation agreement. CSF currently 

acts as a trustee for trust funds for water 

treatment systems in Pennsylvania. The 

commenters were concerned that 

organizations such as CSF might not 

meet the requirements of this subsection 

and would not be eligible to serve as 

trustees in Tennessee. One commenter 

stated that organizations like CSF are in 

a better position to administer trusts 

because most financial institutions are 

unwilling to take title to real property or 

to oversee the operation of treatment 

facilities. According to the commenter, 

organizations such as CSF can perform 

these and other functions that financial 

institutions are unwilling to undertake. 

In addition, the commenter 

recommended that § 942.800(c)(7) 

(proposed as § 942.800(b)(4)(vii)) be 

revised to allow any organization to 

serve as a trustee as long as the 

custodian of the financial assets of the 

trust fund is an appropriate financial 

institution. Another commenter stated 

that the use of non-profit organizations 

would provide tax advantages to 

permittees and noted that Pennsylvania 

has extensive experience setting up 

charitable trusts for this purpose. 

As we noted in the preamble to our 

proposed rule, we want to ensure that 

institutions eligible to serve as trustees 

or to issue annuities are qualified 

business institutions capable of 

administering the trust funds or 

annuities in a competent manner so that 

the trust fund or annuity will remain 

solvent for the long-term treatment of 

pollutional discharges, 71 FR 17684. We 

recognize that Pennsylvania’s 

regulations allow for State or Federally 

regulated trust companies to act as 

trustees and issue annuities. Finally, 30 


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CFR 942.800(c)(7) likewise provides that 

any financial institution or company 

with trust powers and offices located in 

Tennessee is eligible to participate in 

the program as long as the activities of 

the institution are examined or 

regulated by a State or Federal agency. 

This rule does not prohibit non-profit 

organizations from becoming trustees 

provided the organization meets the 

qualifications set forth in the rule. Nor 

does it prohibit the permittee or the 

institution acting as the trustee from 

contracting with a non-profit 

organization to administer the treatment 

system if the permittee elects not to 

operate that system. 

Section 942.800(c)(8), (Proposed as 

§ 942.800(b)(4)(viii)) 

Subsection 942.800(c)(8) provides that 

trust funds and annuities must be 

established in a manner that guarantees 

that sufficient moneys will be available 

to pay for treatment of postmining 

pollutional discharges (including 

maintenance, renovation, and 

replacement of treatment and support 

facilities as needed), the reclamation of 

the sites upon which treatment facilities 

are located and areas used in support of 

those facilities. The language of the final 

rule is more precise than that of the 

proposed rule, which would have 

required that ‘‘trust funds and annuities 

be established to guarantee that funds 

are available to pay for treatment of 

postmining pollutional discharges or 

reclamation of the mine site or both.’’

As discussed below, commenters found 

the proposed rule language too broad. 

One commenter stated that the use of 

trust funds and annuities as an 

alternative bonding mechanism should 

be limited to treatment of postmining 

pollutional discharges exclusively. 

According to the commenter, the 

proposed rule would allow us to use 

moneys from trust funds and annuities 

on lands that previously met 

performance standards and have 

received release of all conventional 

bonds. Consequently, the commenter 

recommended deletion of the phrase ‘‘or 

reclamation of the mine site or both’’

from this subsection. Similarly, a 

different commenter requested that we 

clarify in the rule that trust funds and 

annuities are not available to meet 

general reclamation requirements. 

Another commenter stated that we 

have inconsistently described the scope 

of activities for which the trust fund or 

annuity is established. The commenter 

noted that while proposed 

§ 942.800(b)(4)) states that the scope of 

the rule is limited to ‘‘treatment of longterm postmining pollutional 

discharges;’’ proposed subparagraph 

§ 942.800(b)(4)(i) references ‘‘all 

anticipated treatment needs,’’ proposed 

subparagraph § 942.800(b)(4)(v) 

references ‘‘treatment or reclamation 

measures,’’ and proposed 

§ 942.800(b)(4)(viii) references 

‘‘treatment of postmining pollutional 

discharges or reclamation of the mine 

site, or both.’’ The commenter 

recommended that we delete the 

reference to ‘‘reclamation’’ in 

subparagraphs (v) (as proposed) and 

(viii) (as proposed) and use the term 

‘‘long-term postmining pollutional 

discharge.’’

We do not agree with the commenters 

that the trust fund or annuity should be 

used exclusively for treatment of longterm postmining pollutional discharges. 

While that is its primary purpose, we 

also need to ensure that funds are 

available for maintenance, renovation, 

and replacement of the treatment system 

as necessary and, once there is no longer 

a need for treatment, for reclamation of 

the land upon which treatment facilities 

are sited, together with any areas used 

to support those facilities, such as 

access roads. Further, we agree with the 

commenters that a trust fund or annuity 

is not intended to be used for the 

reclamation of portions of the mine site 

not associated with a treatment facility 

or used in support of such a facility. We 

recognize that the proposed language 

may have been too broad and subject to 

misinterpretation. Consequently, we 

have used revised § 942.800(c)(8) to 

specify the activities which may be 

funded as treatment and reclamation. 

Section 942.800(c)(9), (Proposed as 

§ 942.800(b)(4)(ix)) 

In subsection 942.800(c)(9), we allow 

the release of conventional bonds 

posted for the mine site as a whole if, 

apart from the pollutional discharge and 

associated treatment facilities, the 

permittee has met all applicable 

reclamation requirements and has fully 

funded a trust fund or annuity adequate 

for treatment of long-term postmining 

pollutional discharges and reclamation 

of areas associated with that treatment. 

The establishment of trust funds or 

annuities for treatment of long-term 

pollutional discharges will constitute a 

replacement of bonds under 30 CFR 

800.30 for the areas upon which the 

discharge and treatment and support 

facilities are located. Once a fully 

funded trust fund or annuity exists, 

there is no need to retain bonds for 

other areas for which all reclamation 

requirements have been met and the 

revegetation responsibility period has 

expired. Conventional bonds for those 

areas may be released, subject to the 

requirements of 30 CFR 800.40. 

Two commenters requested that we 

clarify this subsection to emphasize the 

long-term nature of the problem. These 

commenters also found our use of the 

word ‘‘reclamation’’ in the final phrase 

of this subsection confusing. According 

to the commenters, the term 

‘‘reclamation’’ should refer only to the 

removal of the treatment facility and 

reclamation of the ground where it was 

located, not mining impacts in the area. 

The commenters recommend modifying 

the final part of subparagraph (ix) (as 

proposed) to state, ‘‘* * * and the sum 

in the trust fund is sufficient to 

guarantee the treatment of the 

pollutional discharges for as long as it 

will be needed and to reclaim the 

treatment facilities at the end of that 

time.’’

While we have made minor wording 

changes in subparagraph (9) for clarity, 

we do not find it necessary or 

appropriate to adopt the language 

proposed by the commenters. Like the 

proposed rule, the final rule requires 

that the trust fund or annuity be 

‘‘sufficient for treatment of pollutional 

discharges and reclamation of all areas 

involved in such treatment.’’ This 

language establishes the appropriate 

scope of the trust fund or annuity, 

which includes treatment of the 

discharge and reclamation of areas upon 

which treatment facilities are located 

and areas used in support of those 

facilities. The language proposed by the 

commenters would not necessarily 

include reclamation of areas used in 

support of treatment facilities. We also 

find it unnecessary to add the qualifier 

‘‘long-term’’ before ‘‘pollutional 

discharge’’ in subparagraph (9) because 

the heading of paragraph (c) clearly 

states that the entire paragraph applies 

only to sites with long-term postmining 

pollutional discharges. 

Another commenter requested that we 

replace the word ‘‘may’’ with the word 

‘‘shall’’ in this subparagraph to remove 

any uncertainty concerning approval of 

final bond release once the trust fund or 

annuity to address long-term pollutional 

discharges is established. A different 

commenter stated that the rule should 

be revised to clarify that the final bond 

release would occur when the trust fund 

or annuity was fully funded. 

Both section 519(c) of SMCRA, 30 

U.S.C. 1269(c), and the Federal 

regulations regarding approval of bond 

release applications at 30 CFR 800.40(c) 

provide that the regulatory authority 

may release all or part of the bond for 

the entire permit area or an incremental 

area if it is satisfied that reclamation has 

been accomplished. Therefore, a change 

from ‘‘may’’ to ‘‘shall’’ in this rule 

would be inconsistent with the bond 


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release provisions of both the Act and 

our bond release rules. Consequently, 

we are not making the requested change. 

However, in response to the second 

comment, we are changing the language 

of the rule slightly to specify that the 

trust fund or annuity must be fully 

funded before conventional bonds may 

be released and to make it clear that 

release of the conventional bond will 

not extend to the treatment of 

discharges. 

Other comments referring to 

subsection 942.800(c)(9) were primarily 

concerned with termination of 

jurisdiction. We discuss the relationship 

between termination of jurisdiction and 

this rulemaking in the General 

Comments on § 942.800(c) below. 

General Comments on § 942.800(c), 

(Proposed as § 942.800(b)(4)) 

One commenter stated that the 

proposed rule contained insufficient 

detail about the mechanics of how trusts 

will be created and administered. As a 

result, the commenter argued that he 

could not adequately comment on the 

proposal. Additionally, the commenter 

asserted that by not including those 

details, we violated the Administrative 

Procedure Act (APA). The commenter 

noted that the purpose of the notice 

requirement in § 553(b) of the APA is to 

allow potentially affected members of 

the public to file meaningful comments 

under § 553(c) of the APA. According to 

the commenter, it was impossible to 

submit meaningful comments on the 

proposed rule because of the lack of 

detail on how the process would work. 

As we noted above and in the 

preamble to the proposed rule, we 

proposed the regulations at 

§ 942.800(b)(4) (now § 942.800(c)) to 

provide the KFO with a mechanism to 

use our statutory authority to establish 

trust funds and annuities. 71 FR 17684. 

The rule included nine criteria that all 

trust funds and annuities would be 

required to meet, as well as an extensive 

preamble discussion. We believe that 

this information was sufficient to 

provide a basis for informed comment, 

both on the concept of trust funds and 

annuities for the treatment of long-term 

postmining pollutional discharges and 

on the criteria for those funding 

mechanisms. The comments that we 

received from other persons support 

that conclusion. 

We also complied with the other 

notice requirements of § 553(b) of the 

APA by stating the time, place, and 

nature of public rulemaking 

proceedings, by referring to the legal 

authority under which the rule was 

proposed, and by providing the terms or 

substance of the proposed rule or a 

description of the subjects and issues 

involved. We provided instructions on 

how to submit comments on the 

proposed rule, extended the public 

comment period, and provided notice of 

a requested public hearing that was held 

on June 1, 2006. 71 FR 17682; 71 FR 

25992. 

Two commenters stated a preference 

for approval of the use of trust funds 

and annuities as an ABS rather than as 

a collateral bond. One of those 

commenters stated that trust 

instruments are not traditional bonds 

that would fit the collateral bond 

provisions of § 800.21. The other 

commenter noted that although he 

preferred treating trust accounts as an 

ABS, they could also qualify as 

collateral bonds. 

As previously stated in this preamble, 

we are approving trust funds and 

annuities as an ABS. Trust funds and 

annuities meet the requirements for an 

ABS as set forth in 30 CFR 800.11(e) 

because once they are fully funded, the 

trust accounts or annuities will ensure 

that we will have sufficient funds to 

complete the reclamation plan for any 

areas on which the permittee may be in 

default on reclamation obligations at 

any time. Additionally, the permittee 

provides the money needed to establish 

a trust fund or annuity. Thus, the 

permittee has a substantial economic 

incentive to comply with all 

reclamation provisions as required by 

the second criterion for establishing an 

ABS under 30 CFR 800.11(e). 

Three commenters stated that the rule 

contained no explanation as to which 

site-specific circumstances qualify as a 

long-term pollutional discharge. 

According to the commenters, failure to 

define the term ‘‘pollutional discharge’’

would allow the rule to be extended to 

situations beyond its intended scope. 

Two commenters stated that the term 

should mean only discharges that will 

exist after reclamation has been 

completed and will not meet applicable 

standards for point-source discharges 

that are subject to the Clean Water Act 

(CWA). Another commenter proposed 

that we define pollutional discharges as 

‘‘discharges that cannot meet State 

water quality standards or approved 

alternative standards.’’ This commenter 

stated that such a definition would limit 

the applicability of this rule to the 

postmining situations for which it was 

intended. 

We do not agree with the commenters 

that the term ‘‘pollutional discharge’’

needs to be defined as part of this 

regulation, nor do we understand how 

the lack of a definition could result in 

misuse of this rule. We have used this 

term for more than a decade without 

confusion. Any discharge that is not in 

compliance with applicable standards is 

a pollutional discharge. 

Three commenters noted that the 

method of treatment could have a major 

influence on the amount and terms and 

conditions of the required trust fund or 

annuity. According to the commenters, 

the rule should recognize that multiple 

upstream discharges can be treated more 

efficiently with a single downstream 

treatment facility when circumstances 

warrant. In addition, four commenters 

stated that we should address passive 

treatment systems as an option for 

treating discharges. 

Nothing in the proposed or final rules 

restricts the type of treatment systems 

that permittees may use or where they 

may be located. Consequently, we find 

that there is no need to revise the rule 

in response to these comments. 

Two commenters stated that we 

should consider allowing operators to 

bank credits for water treatment. As an 

example, operators could treat 

discharges that are not required by law 

and then use this treatment as a credit 

towards any other water treatment 

obligations that they may have. 

This comment is beyond the scope of 

this rulemaking. We did not propose 

any changes regarding a permittee’s 

water treatment obligations, nor do we 

have the authority to do so under 

SMCRA. Section 702(a) of the Act, 30 

U.S.C. 1292(a), in essence provides that 

nothing in SMCRA (and by 

extrapolation its implementing 

regulations) may be construed as 

superseding, amending, modifying, or 

repealing the CWA and its 

implementing regulations. 

Two commenters stated that the rule 

should specify that the trust fund or 

annuity can be funded over time by the 

permittee, in some cases over a period 

of several years. 

Nothing in the final rule prohibits the 

funding of a trust fund or annuity over 

time. In addition, the preambles to both 

the proposed and final rules clearly 

state that we will allow a reasonable 

amount of time for permittees to fund 

trust funds and annuities. However, 

both the proposed and final rules do 

specify that any conventional bonds for 

the mine site may not be released until 

the trust fund or annuity is fully funded. 

Two commenters indicated that the 

rule should be revised to clarify how the 

trust funds are used, such as allowing 

the operator to be reimbursed directly 

from the trust for all expenses of 

treatment and capital expenditures that 

are incurred. Additionally, five 

commenters indicated that the rule 

should provide for the periodic 

evaluation of the trust funds or 


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annuities to ensure that they have the 

appropriate amount of assets to treat 

AMD. These commenters also suggested 

that the rule state how underfunded or 

overfunded trusts will be adjusted. 

Trust funds and annuities can have 

different disbursement requirements. 

Therefore, we are not modifying the rule 

to establish rigid disbursement criteria. 

We will specify the mechanics of 

disbursements from the trust fund or 

annuity in the formal trust agreements 

with the permittee. 

With regard to comments pertaining 

to the periodic evaluation of the trust 

fund or annuity amounts, the formal 

agreement with the permittee will make 

the trust fund or annuity subject to the 

provisions of 30 CFR 800.15(a), which 

require periodic adjustment by the 

regulatory authority when the cost of 

future reclamation changes. That 

paragraph of the bonding regulations 

further allows the regulatory authority 

to specify periodic times or set a 

schedule for reevaluating and adjusting 

the bond amount. We will set such a 

schedule in the formal trust or annuity 

agreement. Therefore, we do not find it 

necessary to modify the Tennessee 

Federal program rules in the manner 

advocated by the commenters. 

Four commenters stated that 

conventional SMCRA reclamation 

bonds should be released on a schedule 

according to existing regulations. 

We agree, with one caveat. As stated 

above, the March 31, 1997, policy 

statement provides that no bond should 

be released for any permit with a longterm postmining pollutional discharge 

until there is adequate financial 

assurance for treatment of that 

discharge. Therefore, subsection 

942.800(c)(9) of this final rule requires 

that a fully funded trust fund or annuity 

be in place before conventional bonds 

for the mine site may be released. 

One commenter expressed concern 

that we intend to keep both a 

conventional reclamation bond and a 

trust fund or annuity in place for the 

same area. Two other commenters stated 

that it was their understanding that if 

treatment of a discharge was required 

before land reclamation was complete, 

we would require a conventional bond 

for land reclamation and a trust fund for 

the discharge. 

In response, we note that § 942.800(c) 

of this final rule authorizes the use of 

trust funds and annuities only for the 

treatment of long-term postmining 

pollutional discharges and reclamation 

of the areas upon which discharge 

treatment systems and support facilities 

are located. Under the Tennessee 

Federal program regulations at 30 CFR 

942.800, the permittee must post 

conventional performance bonds for all 

other portions of the mine site and all 

other reclamation responsibilities. The 

final rule allows the release of all 

conventional bonds for a site with a 

postmining pollutional discharge once a 

fully funded trust fund or annuity is in 

place, provided the site otherwise 

qualifies for bond release under 30 CFR 

800.40. There could be a period where 

both conventional bonds and a partially 

funded trust fund or annuity exist 

simultaneously for the same mine site. 

As examples, if a permittee is funding 

a trust fund or annuity over time, or if 

other areas of the mine do not qualify 

for release under 30 CFR 800.40, then 

both a conventional bond and a trust 

fund or annuity could cover the permit. 

Three commenters requested that we 

clarify that the effluent limits of 40 CFR 

Part 434 are no longer applicable after 

termination of jurisdiction and bond 

release and when a trust fund or annuity 

is fully funded. In contrast, two other 

commenters expressed concern that 

treatment to meet the effluent limits in 

40 CFR Part 434 may not be sufficient 

to protect classified uses designated for 

waters of the State of Tennessee. 

In response, we note that, in keeping 

with section 702(a) of SMCRA, 30 

U.S.C. 1292(a), we have no authority to 

modify discharge treatment standards 

established under the authority of the 

CWA or its implementing regulations. 

Issuance of a National Pollutant 

Discharge Elimination System (NPDES) 

permit for point-source discharges and 

establishment of effluent limits for those 

discharges is the responsibility of the 

agency charged with administering the 

CWA in Tennessee. 

Five commenters requested that we 

add a provision requiring termination of 

OSM jurisdiction once a fully funded 

trust fund or annuity has been 

established. One of those commenters 

cited the language from the preamble to 

our termination of jurisdiction rule in 

support of his argument. 53 FR 44361–

62 (November 2, 1988). The commenter 

asserted that adequate provisions could 

be made in the trust agreement to 

provide us with the ability to inspect 

and monitor the treatment process. 

Another commenter stated that we 

should make a distinction between 

those trust accounts that are posted as 

alternatives to surety bonds for active 

permits and those trust accounts that are 

established in accordance with the 

preamble to the termination of 

jurisdiction rule to meet the 

requirements for ‘‘a contract or other 

mechanism enforceable under other 

provisions of law’’ to provide financial 

assurance for long term treatment. This 

commenter suggested an approach 

similar to that used by Pennsylvania 

where consent orders are enforceable 

agreements that do not depend on the 

regulatory authority retaining 

jurisdiction under SMCRA to oversee 

compliance. The commenter urged us to 

consider other alternatives to provide 

financial assurance for purposes of 

terminating jurisdiction. 

For the reasons set forth below, we are 

not making the changes sought by the 

commenters. In response to a question 

about sites with postmining pollutional 

discharges, the preamble to our 

termination of jurisdiction rule at 30 

CFR 700.11(d) discussed the possibility 

of full bond release (and hence 

termination of jurisdiction) if there are 

‘‘assurances which provide through a 

contract or other mechanism 

enforceable under other provisions of 

law to provide, for example, long term 

treatment of an alternative water supply 

or acid discharge.’’ 53 FR 44361, 

November 2, 1988. We have not 

determined whether trust funds and 

annuities could be structured to qualify 

for full bond release and termination of 

jurisdiction. We do not find such a 

determination necessary because 

termination of jurisdiction is a 

discretionary action on the part of the 

regulatory authority. As provided in 30 

CFR 700.11(d)(1), a ‘‘regulatory 

authority may terminate its jurisdiction 

under the regulatory program over the 

reclaimed site of a completed surface 

coal mining and reclamation operation, 

or increment thereof * * * .’’ (emphasis 

added.) 

We have elected not to exercise that 

discretion with respect to postmining 

pollutional discharges and associated 

treatment facilities and support areas. 

We believe that our decision to classify 

trust funds and annuities established for 

the long-term treatment of postmining 

pollutional discharges as an ABS and to 

retain jurisdiction over the treatment 

site is a superior means of achieving the 

purpose of SMCRA set forth at section 

102(a) of the Act. 30 U.S.C. 1202(a) (‘‘to 

protect society and the environment 

from the adverse effects of surface coal 

mining operations’’). By retaining 

jurisdiction over the discharge and 

associated treatment and support 

facilities, we can monitor the site, its 

treatment needs, and the adequacy of 

the trust fund or annuity. Contrary to 

the commenters’ assertions, we would 

have no such authority if we terminated 

jurisdiction. Similarly, because we have 

classified trust funds and annuities as 

an ABS, we have authority under the 

bond adjustment provisions of 30 CFR 

800.15(a) to order the permittee to 

contribute more funds if the assets of 

the trust fund or annuity require 


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adjustment to reflect changes in 

discharge quality or quantity or 

investment performance or projections. 

We could not do so if we terminated 

jurisdiction. Indeed, in the absence of 

complaints from the public, we 

probably would not be aware of the 

situation because we would have no 

inspection or monitoring authority. 

Our decision to retain jurisdiction and 

classify trust funds and annuities as an 

ABS avoids these problems. However, 

nothing in this rule would prohibit us 

from terminating jurisdiction over the 

portion of the mine site that is not 

involved with treatment of the discharge 

once the requirements of § 942.800(c)(9) 

are met and bond is fully released on 

that portion of the mine site. 

One commenter suggested that the 

proposed rule should not be applied 

retroactively, but prospectively only. 

The commenter reasoned there is 

currently no requirement for bond or 

other financial assurances for treatment 

of AMD. The commenter cited Bowen v. 

Georgetown University Hospital, 488 

U.S. 204 (1988) and NMA v. DOI, 177 

F. 3d 1 (D.C. Cir. 1999), for the 

proposition that retroactive application 

of rulemaking is prohibited unless 

specifically authorized by Congress. 

As explained at length in the 

preamble to both this rule and the 

proposed rule, we disagree with the 

commenter’s assertion that there is no 

existing Federal regulation requiring 

bond or financial assurances for 

treatment of postmining pollutional 

discharges. We interpret the 1983 

changes to the Federal bonding 

regulations in 30 CFR Part 800 as 

confirming that requirement. The final 

rule that we are adopting today does not 

alter that requirement or otherwise 

modify the national bonding 

regulations. Instead, it merely provides 

permittees in Tennessee with the option 

of replacing conventional bonds with 

trust funds or annuities as a means of 

satisfying the bonding requirements for 

treatment of long-term postmining 

pollutional discharges. 

Five commenters stated that the rule 

must specify standards for termination 

of the trust fund or annuity, such as 

requiring that the untreated discharge 

meet Tennessee water quality standards 

or approved alternative standards, thus 

demonstrating that no further treatment 

is necessary. 

In response, we note that 

§ 942.800(c)(5) of this rule provides that, 

apart from replacement with a different 

financial assurance or administrative 

necessity, termination may only occur if 

we determine ‘‘that no further treatment 

or other reclamation measures are 

necessary.’’ This rule language should 

be sufficient to ensure that premature 

termination does not occur. The formal 

trust fund or annuity agreement will 

contain specific treatment standards for 

each discharge, which will reflect the 

standards in the NPDES permit. Under 

section 702(a) of SMCRA, 30 U.S.C. 

1292, we have no authority to deviate 

from those standards. The formal 

agreement also will specify the steps 

that must be taken to demonstrate that 

treatment is no longer needed, which 

may vary with site conditions and the 

nature of the discharge. 

Two commenters stated that the 

proposed rule failed to address formal 

participation by the permittee. 

According to the commenters, the rule 

should require that we provide notice to 

the permittee under the permit revision 

provisions of section 511(c) of SMCRA, 

30 U.S.C. 1261(c), when we determine 

that a long-term postmining pollutional 

discharge exists. 

We find that no rule change is needed 

in response to these comments. 

Whenever an unanticipated postmining 

pollutional discharge develops, we will 

order the permittee to revise the 

reclamation plan to address the 

discharge. In those cases, the permit 

revision notification requirements of the 

Act and regulations will apply. 

Two commenters noted that because 

the Tennessee Department of 

Environment and Conservation (TDEC) 

has primary authority to regulate 

discharges to waters of Tennessee under 

the CWA as well as State law, there is 

overlapping jurisdiction between OSM 

and TDEC. The commenters found the 

rule to be unclear on how the proposed 

trust funds would mesh with TDEC’s 

responsibilities. The commenters 

requested that decisions regarding the 

terms of the trust be made jointly with 

TDEC and OSM. Specifically, the 

commenters request that the proposed 

rule be changed to indicate that TDEC’s 

approval is needed for the 

determinations made under our 

proposal at § 942.800(b)(4)(i), (v), (vi), 

and (viii) (now designated as 

§ 942.800(c)(1), (5), (6), and (8)). 

We can find no reason to modify the 

rule in the manner that the commenters 

advocate. Discharge treatment standards 

will be established based upon the 

permits issued by TDEC as the CWA 

authority. Under section 702(a) of 

SMCRA, 30 U.S.C. 1292(a), we have no 

authority to establish different treatment 

standards or requirements for pointsource discharges regulated under the 

CWA. Conversely, TDEC has no 

jurisdiction over the bonding of surface 

coal mining operations in Tennessee 

under SMCRA. Therefore, there is no 

need to seek TDEC approval for actions 

related to trust funds and annuities, 

which we are approving as an ABS 

under section 509(c) of SMCRA, 30 

U.S.C. 1259(c). 

Another commenter expressed 

concerns about the workload that the 

rule would impose on the Tennessee’s 

CWA authority and the State’s ability to 

meet those demands. As we explained 

in the preceding paragraph, this rule 

places no demands upon Tennessee’s 

CWA authority. 

Two commenters stated that the rule 

appears to be internally inconsistent 

about who is responsible for treatment 

of pollutional discharges and how the 

funds are to be released for treatment. 

The commenters point out that 

proposed 30 CFR 942.800(b)(4)(vi) 

allows funds from the trust to be 

released to the permittee, while 

proposed 30 CFR 942.800(b)(4)(viii) 

provided that the trust fund or annuity 

must guarantee that moneys are 

available for OSM to pay for treatment. 

Two commenters also stated that the 

rule should specify that the permittee 

remains liable for the costs of the longterm treatment. According to the 

commenters, this clarification would 

diminish any incentive to underfund 

the trust. 

We understand why the commenters 

described a potential internal 

inconsistency, but we do not agree that 

proposed subsections (b)(4)(vi) and (viii) 

(final subparagraphs (c)(6) and (8)) are, 

in fact, inconsistent. However, we have 

made minor revisions to address the 

commenters’ concern. Final 

subparagraph (c)(6) allows release of 

funds for treatment purposes (but only 

according to a set schedule or when 

authorized by OSM), while final 

subparagraph (c)(8) requires that the 

trust fund or annuity be structured in a 

manner that guarantees that sufficient 

funds will be available for treatment and 

reclamation needs. We removed the 

phrase ‘‘to the permittee’’ from (c)(6) 

(proposed as § 942.800(b)(4)(vi)) so now 

this provision requires our written 

authorization for release of funds from 

the trust fund or annuity to any entity. 

We also removed the unnecessary 

reference to OSM in subparagraph (c)(8) 

that appeared in the proposed rule. 

Nothing in this rule alters a 

permittee’s responsibility for the 

treatment of discharges under SMCRA 

or the Federal regulations. Permittees 

are responsible for reclamation 

obligations under their permits, 

including treatment of discharges, 

regardless of whether those obligations 

are secured by a bond, a trust fund, or 

an annuity. In the event the permittee 

defaults on those reclamation 

obligations, we will use the bond, trust 


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fund, or annuity to fulfill the 

reclamation obligation. Therefore, there 

is no incentive for the trust to be 

underfunded. 

Two commenters inquired whether 

OSM, Tennessee or the trustee would be 

responsible for complying with NPDES 

permit provisions if the permittee failed 

to do so. In response, we note that the 

formal trust fund or annuity agreement 

will set forth the procedure to be 

followed in the event that the permittee 

does not fulfill its obligations, which, at 

a minimum, will include ensuring that 

funds are available to continue 

treatment of the discharge. That is one 

of the purposes of establishing a trust 

fund or annuity, which is structured to 

provide an income stream and 

continuation of treatment in the event 

the permittee fails to fulfill its treatment 

obligations. If we are required to forfeit 

a trust fund or annuity, we are acting in 

our capacity as the regulatory authority. 

However, that is the extent of our 

responsibility under SMCRA and these 

rules. We are not the permittee, and we 

do not become the permittee when the 

permittee defaults on reclamation 

obligations, which means that we do not 

assume the permittee’s NPDES 

compliance duties. The State of 

Tennessee is not a party to these trust 

funds and annuities, so it would not 

have any NPDES compliance duties if 

the permittee defaults on reclamation 

obligations. 

Two commenters asserted that OSM 

should consult with the Environmental 

Protection Agency (EPA) with regard to 

the proposed rule because EPA has 

designated coal mining as a primary 

industry. The commenters stated that 

another reason for consulting with EPA 

is that EPA must approve all NPDES 

permits for coal mining prior to 

issuance by TDEC. 

This rule pertains only to the means 

by which permittees may comply with 

the bonding requirements of SMCRA 

and the Tennessee Federal regulatory 

program with respect to funding the 

treatment of postmining pollutional 

discharges. EPA has no jurisdiction over 

performance bond requirements under 

SMCRA, nor does SMCRA require 

consultation with EPA on regulations 

concerning those requirements. 

Two commenters suggested that the 

wording of the proposed rule might 

unintentionally create a broader 

exception from bonding requirements 

than we intended. The commenters 

noted that 30 CFR 942.800(a) states that 

the general rules for bond and insurance 

requirements apply ‘‘except as provided 

in paragraph (b) of this section * * * .’’

The commenters assert that the addition 

of proposed subparagraph (b)(4) (now 

designated as paragraph (c)) would 

expand the situations in which the 

bonding requirements do not apply and 

appears to exempt the entire mine site 

from the bonding requirements, rather 

than just the pollutional discharge. The 

commenters suggested moving our 

proposed requirements for trust funds 

and annuities from subparagraph (b)(4) 

to a new paragraph (c) and modifying 

the first two sentences to read, ‘‘If OSM 

makes a determination that a site will 

need to have long-term treatment of 

pollutional discharges, it may require 

the permittee to establish a trust fund to 

guarantee such treatment will be 

provided as long as it is necessary.’’

The commenters raise a potentially 

valid point, in part. All three 

subparagraphs of existing paragraph (b) 

refer to the transition from the defunct 

Tennessee State regulatory program to 

the current Federal regulatory program 

for Tennessee. Consequently, the 

provisions of proposed 30 CFR 

942.800(b)(4) do not logically belong in 

paragraph (b). Therefore, in the final 

rule, we are codifying proposed 

subparagraph (b)(4) as paragraph (c) and 

slightly revising paragraph (a) to 

incorporate the new paragraph (c). We 

are also adding language that clarifies 

that the provisions of paragraph (c) may 

be used in lieu of posting one of the 

forms of conventional bonds listed in 30 

CFR 800.12. We have revised proposed 

§ 942.800(b)(4)(viii) (now 

§ 942.800(c)(8)) to avoid any possibility 

that paragraph (c) could be construed as 

applying to the entire mine site. We also 

revised proposed § 942.800(b)(4)(ix) 

(now § 942.800(c)(9)) to make it clear 

that the treatment and reclamation 

obligation on the portion of the mine 

site associated with treatment of the 

discharges remains secured under the 

trust fund or annuity in the event 

conventional bonds for the permit are 

released. These changes should remedy 

the potential problem identified by the 

commenters. 

One commenter requested that we 

add a provision to prescribe a process 

for transferring responsibilities under a 

trust agreement to another permittee, a 

landowner, or a lessee. The commenter 

stated that the provisions of 30 CFR 

942.774 regarding revision, renewal and 

transfer, assignment, or sale of permit 

rights do not cover or relate to situations 

where another permittee, the 

landowner, or a subsequent lessee 

desires to assume the permittee’s 

responsibilities under an existing trust 

agreement. 

We do not interpret SMCRA or our 

regulations as allowing the transfer of 

reclamation liability from the permittee 

to other persons by any mechanism 

other than transfer of the permit itself in 

accordance with the process established 

at 30 CFR 774.17 for the transfer, 

assignment or sale of permit rights. 

Paragraphs (b)(3) and (d)(2) of that 

section require that any successor to a 

permit submit a bond or other guarantee 

or obtain the bond coverage of the 

original permittee before the regulatory 

authority can approve the transfer, 

assignment, or sale of the permit. Those 

regulations also apply in situations in 

which the bond takes the form of trust 

funds and annuities approved as an 

ABS. However, if a landowner, lessee, 

or another permittee wishes to assume 

the permittee’s responsibilities under 

the trust fund or annuity agreement, 

nothing in the rule that we are adopting 

today would prohibit the permittee and 

that person from entering into a 

contractual agreement separate from the 

trust or annuity agreement, although 

ultimate responsibility would still 

reside with the permittee in accordance 

with the terms of the trust or annuity 

document. 

A commenter suggested that we might 

want to require permittees to provide 

rights to the real property needed to 

facilitate water treatment as part of the 

trust. According to the commenter, the 

rights to real property may be necessary 

to ensure successful treatment of 

discharges. 

The acquisition of property rights may 

or may not be required in every trust 

situation. In general, the rights that 

allow mining provide access to the site 

for reclamation. In the event a right-ofentry issue arises, it can be addressed in 

the individual trust agreement. 

One commenter stated that trust funds 

are unlikely to generate enough capital 

to meet all SMCRA reclamation 

requirements. 

We agree that there may be some 

situations in which the permittee is 

unable to obtain the capital needed to 

establish a trust fund or annuity. 

However, that fact should not operate to 

preclude the establishment of trust 

funds or annuities in situations in 

which the permittee can obtain the 

necessary capital. Furthermore, trust 

funds and annuities are not intended to 

meet all SMCRA reclamation 

requirements as this commenter 

suggests. Rather, we are approving the 

use of these mechanisms as a means of 

providing financial assurance for the 

long-term treatment of postmining 

pollutional discharges and reclamation 

of associated facilities. The regulations 

continue to require the posting of a 

conventional bond for land reclamation 

on the remainder of the site. 


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One commenter noted that the 

adequacy of the bond is more important 

than the bonding instrument. 

We agree that adequacy of the bond is 

important, but we cannot discount the 

importance of the instrument to secure 

long-term treatment of postmining 

pollutional discharges. An incomeproducing financial instrument, such as 

a trust fund or annuity, is a more 

appropriate method of funding 

treatment of these discharges than a 

conventional bond. 

One commenter stated that we need to 

increase bonds because bond forfeitures 

have allowed mining companies to 

avoid their reclamation obligations and 

have placed those obligations on OSM. 

The commenter argued that permittees 

should post both bonds and annuities 

because annuities based on stock market 

performance can shrink as well as grow. 

Thus, if the annuities shrink, they may 

not be funded sufficiently to provide the 

necessary treatment. 

We disagree that permittees should be 

required to post both conventional 

bonds and trust funds or annuities for 

the same reclamation liability. Under 

section 509 of SMCRA, 30 U.S.C. 1259, 

and 30 CFR 800.14, we have no basis for 

requiring bond amounts in excess of the 

amount that we determine may 

reasonably be needed if the permittee 

defaults on reclamation obligations and 

we need to contract with a third party 

to complete the reclamation plan. We 

recognize that investment performance 

is subject to fluctuations that may 

adversely impact the assets of trust 

funds and annuities. Consequently, like 

Pennsylvania, we will structure trust 

funds and annuities to maintain a 

cushion against those times when 

investment performance does not 

approach the target rate. In addition, as 

authorized by 30 CFR 800.15(a) and 

incorporated by the trust documents, we 

will conduct periodic reviews of trust 

funds and annuities and require that the 

permittee make additional contributions 

if the cushion proves to be an 

inadequate safeguard against market 

fluctuations. 

B. Sections 942.816(f)(3) and 

942.817(e)(3): Revegetation Success 

Standards What Are the Revisions to 

§§ 942.816(f)(3) and 942.817(e)(3) 

Of the 56 commenters submitting 

comments on the proposed revisions to 

30 CFR 942.816(f)(3) and 942.817(e)(3), 

twenty-three were from environmental 

groups, one was from an association 

representing the coal industry, two were 

from coal companies, two were from 

government agencies, one was from an 

association representing mining states, 

and 27 did not provide an affiliation. 

While six of the comments were 

favorable, fifty commenters were 

opposed to what the commenters 

viewed as a weakening of the 

revegetation success standards of the 

Tennessee Federal program. 

Numerous commenters expressed 

their opposition to changes in the shrub 

and tree stocking standards, even 

though the proposed rules did not alter 

the existing tree and shrub stocking 

standards under the Tennessee Federal 

program. The modified revegetation 

requirements that we proposed on April 

6, 2006, apply only to vegetative ground 

cover on sites with a postmining land 

use requiring the planting of trees, i.e., 

wildlife habitat, undeveloped land, 

recreation, or forestry. The regulations 

at 30 CFR 942.816(f)(3)(i) and (ii) and 

942.817(e)(3)(i) and (ii), which address 

the stocking levels of woody plants for 

those postmining land uses, are not 

affected by these changes. 

Twenty-six commenters expressed 

concern that the proposed rules would 

‘‘waive’’ the revegetation requirements 

for postmining land uses of wildlife 

habitat, undeveloped land, recreation, 

or forestry. The commenters generally 

suggest that we specify minimal 

planting requirements for trees and 

shrubs, require that trees and shrub 

plantings be species native to the area, 

and require that functional tests 

measuring the number of trees and 

shrubs that must survive be conducted 

years after planting and prior to any 

bond release. 

As we have noted, the only changes 

regarding revegetation in this 

rulemaking are the elimination of the 

80% ground cover requirement from 30 

CFR 942.816(f)(3) and 942.817(e)(3) for 

postmining land uses of wildlife habitat, 

undeveloped land, recreation, or 

forestry. In addition, we are eliminating 

the bare area restriction of 30 CFR 

942.816(f)(4) and 942.817(e)(4) for those 

lands with a forestry-related postmining 

land use. 

We did not propose to modify the tree 

and shrub stocking and planting 

arrangement requirements of the 

Tennessee Federal program at 

§§ 942.816(f)(3)(i)–(ii) and 

942.817(e)(3)(i)–(ii). Therefore, 

comments regarding tree and shrub 

planting standards are outside the scope 

of this rulemaking, which means we 

will not discuss them. 

Additionally, the elimination of the 

80% vegetative ground cover standard 

does not constitute a ‘‘waiver’’ of the 

ground cover vegetation success 

standards. We are retaining the ground 

cover success standards of the 

Tennessee Federal program at 30 CFR 

942.816(f)(3)(iii) and 30 CFR 

942.817(e)(3)(iii), which provide that 

vegetative ground cover must not be less 

than that required to achieve the 

postmining land use. That requirement 

is the same as the one found in our 

national regulations at 30 CFR 

816.116(b)(3)(iii) and 817.116(b)(3)(iii) 

regarding vegetative ground cover 

success standards for areas with 

postmining land uses requiring the 

planting of trees and shrubs. Removing 

the 80% vegetative ground cover 

requirement from 30 CFR 942.816(f)(3) 

and 30 CFR 942.817(e)(3) is consistent 

with our national regulations at 

816.116(b)(3)(iii) and 817.116(b)(3)(iii), 

which do not require a fixed percentage 

of vegetative ground cover. Instead, the 

national rules, and now the Tennessee 

Federal program rules, provide that, to 

achieve revegetation success, vegetative 

ground cover must not be less than that 

required to achieve the approved 

postmining land use. 

One commenter argued that the 

scientific studies cited in the proposed 

rule to justify elimination of the 80% 

vegetative ground cover requirement 

mistakenly identify ground cover 

density as the cause of forest 

regeneration failure. According to the 

commenter, the altered hydrology and 

soil conditions of reclaimed mine sites, 

not excessive ground cover, prevent 

long-term survival of trees. The 

commenter notes that any area receiving 

sufficient precipitation in eastern 

Tennessee will proceed by secondary 

succession from grassland to forest 

regardless of the amount of herbaceous 

ground cover. However, the commenter 

also asserts that mined mountaintops, 

which have no forested slopes above 

them to provide a seed source, would 

require human seeding or tree planting. 

The research we cited does not 

identify vegetative ground cover density 

alone as the cause of tree growth failure 

and mortality, but rather identifies it as 

a significant contributing factor. 

Because traditional mine reclamation 

typically includes compacting surface 

soil materials, application of fertilizers 

and other soil amendments at high rates, 

and then seeding the site with quickgrowing, aggressive grasses and 

legumes, the resulting vegetative ground 

cover is so dense that most tree 

seedlings and newly planted trees 

cannot compete effectively for nutrients, 

water and sunlight. In addition, the 

dense herbaceous cover provides 

favorable habitat for small mammals 

that eat tree seeds and damage tree 

seedlings and saplings. 

We agree with the commenter that 

trees will eventually volunteer on mine 

sites, but dense vegetative ground 

covers will inhibit their growth and 


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increase mortality. Our objective is to 

establish, as quickly as practicable, 

vigorous and healthy forests of native 

species on reclaimed mine lands. Our 

removal of the 80% ground cover 

success standard eliminates one of the 

regulatory barriers that we have 

determined inhibits the reestablishment 

of high-quality hardwood forests. 

In addition to reducing competition 

from aggressive herbaceous ground 

covers, loosely graded surface soil 

materials increase water infiltration and 

make more water available for tree 

growth as well as providing a favorable 

medium for root growth and 

development. While we agree with the 

commenter’s views on how hydrology 

and soil conditions affect tree growth on 

conventionally reclaimed mines, mine 

sites with reduced compaction and less 

aggressive ground cover are more likely 

to overcome these obstacles. 

One commenter agreed that some 

types of herbaceous ground covers 

inhibit tree seedling growth less than 

others do. However, the commenter 

stated that, rather than relaxing 

vegetative ground cover standards, we 

should study the types of ground covers 

and specify which herbaceous ‘‘treefriendly’’ ground covers should be used 

to balance erosion control and tree 

establishment. 

As previously discussed in this 

preamble, we have found that the 80% 

ground cover success requirement is not 

only in conflict with tree establishment 

and regeneration, it also interferes with 

the statutory requirement to establish a 

diverse, effective, permanent vegetative 

cover comprised of species native to the 

area. In addition, in most cases, it is not 

needed to control erosion if the FRA is 

followed. Our rules at 30 CFR 

816.111(a)(4) and 817.111(a)(4) continue 

to provide that vegetative ground cover 

must be sufficient to control erosion and 

to maintain soil stability. We will 

continue to encourage the use of those 

types of ground cover that achieve that 

requirement without substantially 

inhibiting the growth, survival, and 

regeneration of trees and shrubs. 

One commenter expressed concern 

that the proposed rule language was 

vague and that we did not provide 

substitute requirements for the 80% 

ground cover rule or the bare area 

restrictions. The commenter suggested 

that we incorporate guidelines for tree 

planting or monitoring of natural 

succession to achieve tree coverage 

goals before bond release. The 

commenter also requested that we 

include specific runoff-monitoring 

procedures. Other commenters stated 

that the regulations should specify the 

number of trees, shrubs, and other 

vegetation that must be planted on 

reclaimed mine sites, including the 

number of species to be planted and the 

survival rate by which success will be 

judged. 

The existing regulations for the 

Tennessee Federal program at 30 CFR 

942.816(f)(3)(i) and 942.817(e)(3)(i), 

which were not affected by this 

rulemaking, provide that we must 

specify stocking levels and planting 

arrangements on the basis of local and 

regional conditions after consultation 

with the State agencies responsible for 

the administration of forestry and 

wildlife programs. Subparagraph (ii) of 

those rules contains standards for 

evaluating the success of tree and shrub 

growth and survival. Our surface water 

monitoring requirements are found at 30 

CFR 780.21(j), 784.14(i), 816.41(e), and 

817.41(e). We do not agree that separate 

runoff monitoring is needed to evaluate 

the requirement that ground cover be 

adequate to control erosion. Visual 

inspection of the site for rills and gullies 

will suffice. 

A commenter characterized the rule 

as promoting ‘‘patchwork’’ revegetation 

upon a larger-scale mining site. The 

commenter expresses a belief that we 

should focus on reforestation of the 

entire mine site as was intended by 

SMCRA. 

First, SMCRA does not allow us to 

require that mined lands be returned to 

forest conditions. Section 515(b)(2), 30 

U.S.C. 1265(b)(2), requires that mined 

lands be reclaimed to a condition 

capable of supporting the uses that they 

were capable of supporting prior to 

mining or to higher or better uses. 

Consequently, the regulations that we 

are adopting in this rulemaking only 

apply to mine sites with a postmining 

land use requiring the planting of trees 

and shrubs. For those mine sites, the 

rule eliminates the arbitrary 80% 

ground cover requirement and the 

limitation on the maximum amount of 

bare area. The revised regulations seek 

to encourage tree growth and survival 

by limiting competition from excessive 

herbaceous ground cover. Research and 

an examination of reclaimed mine sites 

has demonstrated that competition from 

herbaceous ground cover, along with 

excessive soil compaction during 

backfilling, regrading, and topsoiling, 

has resulted in the creation of 

grasslands with few trees on most 

reclaimed mine sites. We believe that 

adoption of this rule, which removes 

requirements that make it difficult to 

establish woody plants, will increase 

the probability that permittees will 

return mined lands to forestry-related 

postmining land uses. 

In Tennessee, most mine sites were 

originally forested prior to mining and 

the surrounding land is, for the most 

part, still forested. Conventional 

reclamation has resulted in forest 

fragmentation and the ‘‘patchwork’’

revegetation that is the subject of the 

commenter’s concern. We anticipate 

that adoption of the rule changes 

discussed in this preamble will lessen 

the occurrence of ‘‘patchwork’’

revegetation by creating more favorable 

conditions in which mine sites can and 

will be returned to healthy, productive 

forests consistent with surrounding 

lands. 

One commenter stated that we have 

not identified how past hardwood treeplanting failures can be avoided in the 

future. 

We disagree with this comment. In 

our April 6, 2006, notice, we identified 

the major factors that negatively affect 

tree growth on reclaimed mine lands, 

such as compaction and competition 

from grasses. We also explained that 

forestry researchers have agreed that 

productive forestland can best be 

created on reclaimed mine land by 

using the FRA. Specific comments 

regarding the FRA are discussed under 

the General Comments section below. 

A commenter expressed concern that 

implementation and enforcement of 

compaction requirements would no 

longer be a priority on reclaimed 

landforms where compaction is 

necessary to stabilize the backfilled 

spoils or to prevent settlement-related 

highwall exposure. 

The regulations we are approving in 

this rulemaking do not replace or 

supersede any existing stability or 

highwall elimination requirements. 

Mined-out areas must still be backfilled 

in a manner that meets all stability and 

highwall elimination requirements. 

One commenter stated that the 

proposed rule changes fail to provide 

information on tree-compatible 

groundcover species and do not require 

the use of low levels of nitrogen 

fertilizer (to avoid stimulating overly 

lush herbaceous vegetation). 

We believe that these details are best 

addressed through the permit 

application submission and review 

process rather than in our regulations. 

A commenter stated that if OSM 

intends to leave all or part of mine sites 

devoid of vegetation, the reclamation 

plan should specify how the resultant 

increase in sediment will be controlled. 

Alternatively, we should produce 

credible models demonstrating that an 

increase in sedimentation will not 

occur. According to the commenter, 

failure to do so will cause pollution to 

Tennessee’s waters. 


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As discussed earlier in this preamble, 

non-compacted mine soils have higher 

infiltration rates and erode less than 

graded soils, which generally translates 

to lower runoff rates. Thus, when using 

the FRA, less ground cover is needed to 

prevent erosion and protect water 

quality. Regardless, nothing in the rules 

that we are adopting today supersedes 

the existing regulations at 30 CFR 

816.45(a) and 817.45(a), which require 

the use of appropriate sediment control 

measures that prevent, to the extent 

possible, using the best technology 

currently available, additional 

contributions of sediment to streamflow 

or to runoff outside the permit area. 

Also, under 30 CFR 816.42 and 817.42, 

point-source discharges must comply 

with applicable State or Federal effluent 

limitations. 

Many commenters referred to removal 

of the 80% requirement as a ‘‘waiver’’

of revegetation ground cover success 

standards. As we noted earlier, we are 

not promulgating regulations that create 

a ‘‘waiver’’ of revegetation ground cover 

success standards. Instead, we are 

revising the vegetative ground cover 

success standards for mine sites where 

the postmining land uses are related to 

forestry. These revisions will support 

the growth and survivability of trees on 

those postmining land uses. The rule 

that we are adopting today does not 

alter the existing ground cover 

requirements in our revegetation rules at 

30 CFR 816.111(a)(3), 817.111(a)(3), 

942.816(f)(3)(iii), and 942.817(e)(3)(iii), 

which remain in effect. 

Several commenters mentioned that 

we should ensure that native trees, 

shrubs, and other vegetation were 

planted to help the revegetation of mine 

sites. For example, one commenter 

recommended that we require 

revegetation using native grasses, forbs, 

shrubs, and trees because these would 

likely not be as competitive with native 

trees and they would have beneficial 

effects on wildlife. Another commenter 

requested that we specify in the 

regulations that the permittee must 

plant a diverse mix of trees, shrubs, and 

herbs native to the area to qualify for the 

new revegetation requirements. 

Our regulations at 30 CFR 816.111 

and 817.111 provide that the species 

planted must be native to the area and 

that introduced species are only allowed 

where necessary to achieve the 

approved postmining land use when 

authorized by the regulatory authority. 

Therefore, it would be redundant to 

include a requirement for native species 

selection as part of this rulemaking. 

One commenter asked whether the 

removal of the 80% ground cover 

standard would apply to existing sites 

where the fill was compacted and the 

site could not meet the prior 80% 

ground cover success standard or 

whether it would only apply to new 

mines that are permitted after the rule 

is in effect. 

The revised regulations will apply to 

existing or future permits approved with 

postmining land uses of wildlife habitat, 

undeveloped land, recreation, or 

forestry, but existing mines must 

conform to the requirements in their 

reclamation plans. If an existing 

permit’s reclamation plan incorporates 

or adopts the 80% ground cover success 

standard or limits the amount of bare 

area, the permittee must either comply 

with the existing permit requirements or 

seek a permit revision under 30 CFR 

942.774 to modify those requirements. 

C. Sections 942.816(f)(4) and 

942.817(e)(4): Revegetation Success 

Standards—Bare Area Restrictions 

We received nine comments on our 

proposal to exempt mine sites reclaimed 

for the purposes of wildlife habitat, 

undeveloped land, recreation, or 

forestry from the bare area limitation 

requirements of 30 CFR 942.816(f)(4) 

and 942.817(e)(4). Seven of these 

comments were unfavorable and two 

comments were favorable. Of the nine 

commenters, three were from 

environmental groups, three were from 

academic institutions, one was from an 

association representing mining States, 

one was from a government agency, and 

one was from industry. The seven 

unfavorable comments were primarily 

concerned about the potential for 

erosion from the bare areas that the 

revised rules allow on reclaimed mine 

sites. The commenters suggested that 

eliminating this standard for mine sites 

reclaimed for forestry-related 

postmining land uses would allow 

permittees to completely forego 

revegetation on mine sites. 

We exempted mine sites with 

postmining land uses related to forestry 

from the bare area limitation 

requirements of §§ 942.816(f)(4) and 

942.817(e)(4) because portions of mine 

sites reclaimed using the FRA may have 

sparse vegetative ground cover. These 

potential bare areas are desirable 

because they allow planted trees to grow 

without the threat of competition from 

aggressive ground covers. Bare areas 

also allow native grasses, shrubs, and 

trees from surrounding areas to 

voluntarily reseed the reclaimed mine 

site. 

With respect to the commenters’

concerns over increased erosion and 

sedimentation, our regulations will not 

allow reclaimed mine sites to be 

completely devoid of vegetation. While 

the change we are making as part of this 

rulemaking may result in some portions 

of mine sites without vegetation, the 

reclamation plan and the permittee will 

still have to comply with all existing 

regulations, including 30 CFR 

816.111(a)(4) and 817.111(a)(4), which 

state that permittees must establish a 

vegetative cover that is capable of 

stabilizing the soil surface from erosion; 

30 CFR 816.116(a)(3) and 817.116(a)(3), 

which require that the extent of cover be 

at least equal in extent of cover to the 

natural vegetation of the area, and 30 

CFR 816.95(a) and 817.95(a), which 

require control of erosion on exposed 

surfaces. 

Additionally, our bond release 

regulations at 30 CFR 800.40(c)(2) 

provide that ‘‘[n]o part of the bond or 

deposit shall be released under this 

paragraph so long as the lands to which 

the release would be applicable are 

contributing suspended solids to 

streamflow or runoff outside the permit 

area in excess of the requirements set by 

section 515(b)(1)) of the Act * * *.’’

One commenter noted that the 

proposed rule would allow bare areas 

not just on sites developed for forestry, 

but also for wildlife habitat, 

undeveloped land, and recreation. 

According to the commenter, it is not 

clear that trees would be used in the 

latter three land uses. Consequently, the 

commenter recommended that all three 

of those uses be deleted from the 

regulations. 

We disagree with the commenter’s 

premise that trees would not be a part 

of the reclamation plan for postmining 

land uses of wildlife habitat, 

undeveloped land, and recreation. By 

including these land uses in 30 CFR 

942.816(f)(3) and 942.817(e)(3), we are 

requiring that the revegetation success 

standards for those land uses be based 

primarily on the establishment of trees 

and shrubs. In addition, our regulations 

at 30 CFR 816.111 and 817.111 require, 

among other things, the establishment of 

a diverse, effective, permanent 

vegetative cover that is at least equal in 

extent of cover to the natural vegetation 

of the area and capable of stabilizing the 

soil surface from erosion. Those 

requirements apply to all mined lands 

regardless of the postmining land use. 

One commenter recommended that 

the exemption from the restriction on 

bare areas be limited to those lands 

where trees or shrubs will ultimately 

provide the majority of the ground 

cover. 

The change in our regulations 

removing the bare area restriction 

applies only to those postmining mine 

uses for which we anticipate that trees 

and shrubs will provide the majority of 


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the ground cover. Therefore, there is no 

need to modify the rule as the 

commenter suggested. 

Our experience has shown that plants 

and trees will voluntarily germinate on 

any bare areas. In fact, sites mined prior 

to the passage of the Act before 

revegetation requirements were in effect 

have reverted to forest from volunteer 

reseeding. Consequently, we anticipate 

that bare areas will encourage natural 

succession, which will assist in 

fulfilling the requirement of § 515(b)(19) 

of the Act, 30 U.S.C. 1265(b)(19), to 

establish a diverse, effective, permanent 

vegetative cover of the seasonal variety 

native to the land to be affected and 

capable of self-regeneration and plant 

succession. 

D. General Comments on the Proposed 

Revisions to the Tennessee Revegetation 

Requirements 

We received numerous comments that 

did not address the specific changes to 

the revegetation portion of the 

Tennessee Federal program that we set 

forth in our April 6, 2006, proposed 

rule. Many of these comments focused 

on aspects of FRA other than the ground 

cover change contained in this 

rulemaking. While these comments are 

not directly responsive to this 

rulemaking, we have decided to 

respond. 

The use of the FRA is voluntary in 

Tennessee. However, through the 

Appalachian Regional Reforestation 

Initiative, we are encouraging the use of 

the FRA in reclaiming mine sites that 

include planting trees. We believe that 

as more operators become aware of the 

effectiveness of the FRA, an increasing 

number of operators will use the 

method to successfully restore forests. 

Several commenters stated that we are 

implementing the FRA without 

providing any specifics about how it 

should be considered in the reclamation 

plan, or which standards apply to lands 

reclaimed under the FRA. These 

commenters requested that the rule 

include such details as the amount and 

type of grading and compaction, the 

type and number of trees species 

planted, which sites or types of mines 

would qualify for the FRA, and other 

criteria the commenters deemed 

necessary for successful implementation 

of the FRA. 

For example, one commenter 

generally supported the attempt to 

promote reforestation on reclaimed 

mine sites, but expressed concern that 

we were revising our rules to adopt the 

FRA. The commenter pointed out that 

we neither defined the FRA in the rule 

nor defined what constitutes successful 

implementation of the FRA as a mine 

reclamation practice. The commenter 

asserted that the rule should set forth 

performance standards that must be 

attained in order to determine if the 

FRA was implemented successfully. 

The commenter also suggested that we 

establish performance standards that 

include a ‘‘minimum stand density’’ of 

trees and shrubs growing with sufficient 

vigor to demonstrate long-term survival 

and regeneration. Furthermore, the 

commenter opined that the bond release 

term for forestry-related reclamation 

should be increased to allow more time 

to determine whether the reclaimed 

mine site has met the performance 

standards. 

The purpose of this rulemaking is to 

remove regulatory barriers to effective 

tree establishment and growth for those 

areas where trees will be planted as part 

of the reclamation. With the exception 

of the changes being made by this final 

rule, the reclamation practices 

advocated by the FRA can be 

implemented within existing 

regulations. Whether the other aspects 

of FRA are or are not implemented as 

a part of tree planting is beyond the 

scope of this rulemaking since those 

other aspects are within the existing 

performance standards related to 

backfilling, grading, and revegetation. 

For example, the Tennessee Federal 

program at 30 CFR 942.816(f)(3)(i) and 

(ii) and 30 CFR 942.817(e)(3)(i) and (ii) 

already provides that revegetation 

success standards for postmining land 

uses involving woody plants must 

include stocking and planting 

arrangement requirements. 

Additionally, section 515(b)(20) of 

SMCRA, 30 U.S.C. 1265(b)(20), 

establishes the revegetation 

responsibility period at five years after 

the last year of augmented seeding, 

fertilizing, irrigation, or other work 

(excluding normal husbandry practices). 

Several commenters noted that the 

FRA and the changes made by this 

rulemaking should be conducted first as 

a pilot program. Specifically, one 

commenter stated that this rule should 

be considered experimental and 

provisionally implemented only on a 

predetermined, relatively small area 

until its feasibility and efficacy can be 

documented. Similarly, another 

commenter stated that permits should 

only be granted when a permittee can 

demonstrate that the proposed 

reclamation techniques have proven 

successful on mine sites with similar 

characteristics. In addition, another 

commenter suggested that we should 

reevaluate whether any mine can 

comply with SMCRA’s revegetation 

requirements rather than embark upon 

another unproven experiment. The 

commenter noted that some permittees 

have previously attempted reforestation 

of postmining land and have either 

failed or met with something far less 

than success. 

The benefits of reduced ground cover 

for tree seedling establishment and 

growth have been demonstrated by 

research conducted by major 

universities throughout the United 

States. In further support of our 

conclusion, one commenter submitted 

additional research in support of the 

FRA’s techniques. The research 

provided by the commenter indicates 

that native trees often show poor growth 

in areas with heavy ground cover and 

that the use of less-competitive native 

grasses can aid in forest succession. 

Various commenters expressed their 

opinions regarding aspects of the 

potential effects of reduced compaction. 

Some commenters expressed concerns 

that the language of the rule did not 

address compaction and grading and 

suggested that we promulgate new 

regulations specific to the reduced 

grading and compaction of the soil 

under the FRA. One commenter asserted 

that the preamble to our proposed rule 

created a hidden rule setting forth 

guidance for grading and reduced 

compaction of soil on mine sites. 

Our revision to these rules only 

removes regulatory barriers that impede 

successful establishment of trees. While 

minimizing compaction is a critical part 

of successful forest restoration, there is 

sufficient flexibility within existing 

rules to provide for it. Our existing rules 

provide specific standards addressing 

erosion control, sedimentation, water 

quality, and other related issues that are 

not affected by this rulemaking. Further, 

the rule promulgated here is designed to 

address variations in compaction. As 

compaction is reduced, infiltration is 

increased and runoff is reduced. This 

rule requires that ground cover in areas 

where trees are planted be limited to 

that necessary to control erosion and 

support the postmining land use. 

Therefore, where compaction and runoff 

are high, more ground cover will be 

required. Where compaction and runoff 

are low, less ground cover will be 

required. 

Some commenters expressed concerns 

that loose grading of the topsoil or 

topsoil substitute would cause erosion 

and sedimentation, especially on steep 

slopes. One commenter, for example, 

expressed concerns that the rule change 

would allow placement of loose or 

uncompacted soil on mine sites with 

steep slopes, which would cause high 

levels of erosion. The commenter noted 

that nothing in the rule requires mine 

operators to increase the capacity of 


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erosion and sedimentation controls to 

accommodate the increased 

sedimentation. 

Again, there is nothing in this rule 

that modifies existing regulatory 

requirements related to compaction and 

the rule continues to require ground 

cover sufficient to control erosion. 

Another commenter expressed 

concerns about the effects that 

sedimentation from mining will have on 

populations of rare and endangered 

species in streams. In response, we note 

that this rule still requires control of 

erosion and that nothing in this rule 

alters our regulations concerning 

protection of fish and wildlife, 

including threatened and endangered 

species. See 30 CFR 780.16, 784.21, 

816.97 and 817.97. All operations must 

continue to comply with those 

regulations. Furthermore, this rule will 

promote more rapid restoration of forest 

cover on mined lands, which will 

benefit stream quality and associated 

wildlife. 

Another commenter suggested that 

the provisions of the FRA for loose 

grading of topsoil or topsoil substitutes 

would lead to more water infiltration 

into reclaimed backfill areas and that 

excessive water in the backfill would 

contribute to landslides. 

In response, we again note that this 

rule does not alter existing stability 

requirements, including the regulations 

related to backfilling and grading. For 

example, 30 CFR 816.102(c) requires 

spoils to be compacted where advisable 

to ensure stability. 

One commenter expressed concerns 

about the difference in sedimentation 

between tree-only plantings versus 

plantings with a more diverse cover. In 

addition, the commenter questioned 

how these differences in cover related to 

sequestering nutrients, controlling 

flooding, capturing water for recharging 

aquifers, and developing fertile soils. 

Our changes to the ground cover 

standards in the Tennessee Federal 

program do not alter any regulations 

regarding soil erosion. The regulations 

at 30 CFR 816.45(a) and 30 CFR 

817.45(a) require the use of appropriate 

sediment control measures to prevent, 

to the extent possible, additional 

contributions of suspended solids to 

streamflow or to runoff outside the 

permit area. Additionally, the 

regulations at 30 CFR 816.111(a)(4) and 

30 CFR 817.111(a)(4) require all 

permittees to establish a vegetative 

cover on all reclaimed areas that is 

capable of stabilizing the soil surface 

from erosion. All Tennessee mine sites 

must still comply with these 

regulations. 

One commenter also suggested that 

permittees might not adopt the FRA 

because they would have to dispose of 

the extra spoil resulting from not 

compacting soil materials. Again, there 

is nothing in this rulemaking that alters 

backfilling or compaction standards. 

This rulemaking is limited to the ground 

cover aspect of FRA. 

Several commenters suggested types 

of materials that could be used to 

provide or enhance a tree-friendly 

growing medium. For example, one 

commenter recommended that we 

require permittees to gather fallen leaves 

from urban areas to amend soils on 

reclaimed surface mines. Another 

commenter advocated the use of 

biosolids for reclaiming mine lands. The 

commenter noted that biosolids 

counteract the sulfur and other pyrite 

and acidic materials in mine spoils, 

bring the pH back to neutral, and 

provide large amounts of organic 

materials. Another commenter 

advocated requiring permittees to 

improve mine soils. 

We acknowledge that the soil 

supplements advocated by the 

commenters may have value, but these 

comments are outside the scope of this 

rulemaking. 

One commenter advocated saving all 

the topsoil or organic matter on mine 

sites. In response, we note that the 

Federal regulations at 30 CFR 816.22 

and 30 CFR 817.22 already require the 

salvage of topsoil, including the organic 

layer, unless the regulatory authority 

approves the use of a topsoil substitute 

that is equal to or more suitable for 

sustaining vegetation than the original 

topsoil. 

One commenter requested increased 

permittee maintenance of sites after 

planting because animals and landslides 

destroy trees and shrubs. 

Our existing regulations provide 

sufficient safeguards to ensure the 

stability of the land and the adequacy of 

revegetation on reclaimed mine sites. At 

30 CFR 942.816(f)(3) and 942.817(e)(3), 

the Tennessee Federal program provides 

success standards for trees and shrubs 

on sites with a postmining land use of 

wildlife habitat, undeveloped land, 

recreation, or forestry. These regulations 

require that at least 80% of trees and 

shrubs have been in place for at least 

three growing seasons and that the trees 

and shrubs must be healthy. According 

to those regulations, no trees and shrubs 

in place for less than two growing 

seasons may be counted in determining 

stocking adequacy. Those regulations 

also provide that vegetative ground 

cover must not be less than that 

required to achieve the approved 

postmining land use. In addition, under 

30 CFR 816.116(c) and 817.116(c), the 

revegetation responsibility period in 

Tennessee extends for five full years 

after the last year of augmented seeding, 

fertilization, irrigation or work other 

than normal husbandry practices. This 

rulemaking does not affect any of these 

rules. 

One commenter expressed concern 

that mining operations would cause the 

death of small animals. The commenter 

noted, for example, that there are 

genetically isolated, evolutionarily 

distinct, and unique species of 

amphibians and reptiles in the 

Cumberland Mountains. The commenter 

stated that OSM needs to consider the 

effect of mining on the biological 

heritage of animals as well as plants. 

While these comments are outside the 

scope of this rulemaking, the existing 

Federal regulations at 30 CFR 780.16 

and 784.21 provide that applications for 

surface coal mining operations must 

include a fish and wildlife protection 

and enhancement plan. This plan must 

include a description of how, to the 

extent possible, using the best 

technology currently available, the 

operator will minimize disturbances 

and avoid adverse impacts on fish and 

wildlife and related environmental 

values, including compliance with the 

Endangered Species Act, during the 

operations and how enhancement of 

these resources will be achieved where 

practicable. 

A commenter suggested that we 

require public review of reclamation 

plans and regular inspections of mine 

sites. 

Again, while this comment is outside 

the scope of today’s rule, existing 

Federal regulations and the Tennessee 

Federal program already provide for 

public review. Sections 30 CFR 773.6 

and 942.773 provide for public 

participation in the permitting process 

including procedures for filing 

objections to applications. In addition, 

30 CFR 842.11 and 942.842 set forth 

procedures for periodic Federal 

inspections and monitoring. 

Two commenters suggested that the 

rules would result in degraded water 

quality at mine sites. 

This rule, which limits excess ground 

cover where trees are planted, still 

requires ground cover sufficient to 

control erosion. Further, existing 

Federal regulations regarding control of 

sediment from mine sites require 

prevention, to the extent possible, of 

additional contributions of suspended 

solids to streamflow. Additionally, 

under 30 CFR 816.42 and 817.42, 

discharges from mine sites must comply 

with all applicable State and Federal 

water quality laws and regulations and 


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with the effluent limitations for coal 

mining promulgated by the EPA as set 

forth in 40 CFR Part 434. The 

regulations at 30 CFR 780.21 provide for 

the assessment of water quality prior to 

mining and require a ground and 

surface water monitoring plan and a 

hydrologic reclamation plan. This 

information is to be used to minimize 

disturbance to the hydrologic balance, 

prevent material damage outside the 

permit area, and to protect the rights of 

present water users. 

One commenter stated that the 

proposed amendments to the Tennessee 

Federal program constitute a major 

Federal action that requires detailed 

cumulative impact analysis and 

preparation of an environmental impact 

statement (EIS) under the National 

Environmental Policy Act (NEPA). The 

commenter stated that the proposed rule 

or an EIS should have better addressed 

reforestation and revegetation 

reclamation concerns and provided 

evidence that the proposed actions will 

not affect Tennessee’s watersheds, 

reservoirs and water resources. 

We disagree with the commenter’s 

assertions. Section 702(d) of SMCRA 

specifies that the promulgation of a 

Federal regulatory program for a State 

under section 504 of SMCRA does not 

constitute a major action within the 

meaning of § 102(2)(C) of NEPA. 

Therefore, there is no need to prepare an 

EIS for those programs. Consequently, 

the adoption of amendments to the 

Tennessee Federal program, which we 

adopted under section 504 of SMCRA, 

30 U.S.C. 1254, does not constitute a 

major action within the meaning of 

§ 102(2)(C) of NEPA and does not 

require preparation of an EIS. 

The commenter also stated that OSM 

must determine the effects of the 

proposed rules on the Tennessee Valley 

Authority’s recent Programmatic EIS 

and the U.S. Army Corps of Engineers’

Floodplain Management Program in 

Tennessee’s coalfields and consult with 

those agencies before enacting this rule. 

The commenter also stated that the 

results of any consultation with various 

government agencies and with 

individuals and organizations having an 

interest in the proposed amendment are 

missing. 

In response, we note that there is no 

requirement that we address the effect 

of the rule on documents prepared by 

other agencies, and we have addressed 

any comments that we received from 

State and Federal agencies. 

One commenter stated that the 

revisions to the rules give the KFO too 

much discretion in determining the 

appropriate herbaceous vegetative 

ground cover success standards. 

While the revisions in this rulemaking 

do provide discretion to the KFO to 

approve ground cover success 

standards, that discretion is tempered 

with the existing regulations that 

require control of erosion. The KFO 

cannot approve a reclamation plan that 

does not provide for adequate erosion 

control from the site. For mine sites 

with postmining land uses related to 

forestry, the KFO will require that the 

permittee’s reclamation plans carefully 

balance the need for erosion control 

with a vegetative ground cover that does 

not interfere with tree growth and 

survival. 

Other commenters discussed a wide 

range of issues that are unrelated to the 

proposed rule. We are not addressing 

those comments because they are 

beyond the scope of this rulemaking. 

V. Procedural Determinations 

Executive Order 12866—Regulatory 

Planning and Review 

This document is not a significant 

rule and is not subject to review by the 

Office of Management and Budget under 

Executive Order 12866. 

a. This rule will not have an effect of 

$100 million or more on the economy. 

The revisions to the bonding 

requirements and revegetation standards 

will not adversely affect in a material 

way the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

or Tribal governments or communities. 

As discussed in the preamble to the 

proposed rule and the preamble to the 

final rule, the bonding provisions 

should benefit coal operators who 

experience unanticipated pollutional 

discharges by providing them with an 

alternative financial mechanism for the 

treatment of AMD. The bonding 

revisions will not add to the operator’s 

cost of doing business since the existing 

regulations in 30 CFR 942.800 and 30 

CFR Part 800 already require that a bond 

amount be adequate for the cost of 

reclamation and, when necessary, be 

adjusted to insure that adequate funds 

are available. The trust funds or 

annuities will allow continued 

treatment of postmining pollutional 

discharges by the operator and will 

assist in preventing bankruptcies and 

potential bond forfeitures since sureties 

will not likely fund treatment. There are 

approximately 52 mining operations in 

Tennessee with AMD problems that 

may avail themselves of the new 

bonding provisions. 

Our estimates have found that 

approximately 10 companies will take 

advantage of the rule that eliminates the 

arbitrary ground cover requirements on 

mine sites to be reclaimed for wildlife 

habitat, undeveloped land, recreation, 

or forestry. Approximately 1000–1500 

acres are eligible for Phase III bond 

release annually in Tennessee. The 

changes to the rules will encourage 

reforestation of this acreage and provide 

the basis for healthy, vigorous tree 

growth. While economic benefits of 

reforestation to mine operators are 

limited, the benefits to the environment 

are numerous and include: Creating 

diverse, productive forests that provide 

watershed protection, wildlife habitat, 

recreational opportunities, and remove 

carbon dioxide from the air. 

Additionally, there are economic 

benefits of reforested sites because 

forests can offer substantial revenue for 

landowners who own the trees and job 

opportunities for local residents who 

harvest the trees and use the lumber. 

b. This rule will not create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another agency. 

c. This rule does not alter the 

budgetary effects of entitlements, grants, 

user fees, or loan programs or the rights 

or obligations of their recipients. 

d. This rule does not raise novel legal 

or policy issues. 

Regulatory Flexibility Act 

The Department of the Interior 

certifies that this rule will not have a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.). As previously stated, 

the revisions to the existing regulations 

may benefit the regulated industry by 

allowing an alternative source of 

bonding. Further, the rule produces no 

adverse effects on competition, 

employment, investment, productivity, 

innovation, or the ability of United 

States enterprises to compete with 

foreign-based enterprises in domestic or 

export markets. 

Small Business Regulatory Enforcement 

Fairness Act 

For the reasons previously stated, this 

rule is not a major rule under 5 U.S.C. 

804(2), the Small Business Regulatory 

Enforcement Fairness Act. This rule: 

a. Does not have an annual effect on 

the economy of $100 million or more. 

b. Will not cause a major increase in 

costs or prices for consumers, 

individual industries, Federal, State, or 

local government agencies, or 

geographic regions. 

c. Does not have significant adverse 

effects on competition, employment, 

investment, productivity, innovation, or 

the ability of U.S.-based enterprises to 


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compete with foreign-based enterprises 

for the reasons stated above. 

Unfunded Mandates 

This rule does not impose an 

unfunded mandate on State, Tribal, or 

local governments or the private sector 

of more than $100 million per year. The 

rule does not have a significant or 

unique effect on State, Tribal, or local 

governments or the private sector. A 

statement containing the information 

required by the Unfunded Mandates 

Reform Act (2 U.S.C. 1501 et seq.) is not 

required. 

Executive Order 12630—Takings 

The revisions to the Tennessee 

Federal program governing the use of 

trust funds or annuities to fund 

treatment of postmining pollutional 

discharges and the changes to the 

revegetation success standards do not 

have any significant takings 

implications under Executive Order 

12630. Therefore, a takings implication 

assessment is not required. 

Executive Order 12988—Civil Justice 

Reform 

In accordance with Executive Order 

12988, the Office of the Solicitor has 

determined that this rule does not 

unduly burden the judicial system and 

meets the requirements of sections 3(a) 

and 3(b)(2) of the Order. 

Executive Order 13132—Federalism 

In accordance with Executive Order 

13132, the rule does not have significant 

Federalism implications to warrant the 

preparation of a Federalism Assessment 

for the reasons discussed above. 

Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

In accordance with Executive Order 

13175, we have evaluated the potential 

effects of this rule on Federallyrecognized Indian tribes. We have 

determined that the revisions would not 

have substantial direct effects on the 

relationship between the Federal 

Government and Indian tribes, or on the 

distribution of power and 

responsibilities between the Federal 

Government and Indian Tribes. 

Executive Order 13211—Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This rule is not considered a 

significant energy action under 

Executive Order 13211. The revisions to 

the Tennessee Federal program that 

govern use of trust funds or annuities to 

fund treatment of postmining 

pollutional discharges and the changes 

to the revegetation success standards 

will not have a significant effect on the 

supply, distribution, or use of energy. 

Paperwork Reduction Act 

This rule does not contain collections 

of information which require approval 

by the Office of Management and 

Budget under 44 U.S.C. 3501 et seq. 

National Environmental Policy Act 

This rule does not require an 

environmental impact statement 

because section 702(d) of SMCRA (30 

U.S.C. 1292(d)) provides that 

promulgation of Federal programs do 

not constitute major Federal actions 

within the meaning of section 102(2)(C) 

of the NEPA (42 U.S.C. 4332(2)(C)). This 

rulemaking was promulgated under 

section 504 of SMCRA, 30 U.S.C. 1254, 

and therefore is not subject to NEPA 

requirements. 

List of Subjects in 30 CFR Part 942 

Intergovernmental relations, Surface 

mining, Underground mining. 

Dated: February 21, 2007. 

C. Stephen Allred, 

Assistant Secretary, Land and Minerals 

Management. 

■ Accordingly, we are amending 30 CFR 

Part 942 as set forth below. 

PART 942—TENNESSEE 

■ 1. The authority citation for 30 CFR 

Part 942 continues to read as follows: 

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

■ 2. Amend § 942.800 by revising 

paragraph (a) and adding paragraph (c) 

to read as follows: 

§ 942.800 Bond and insurance 

requirements for surface coal mining and 

reclamation operations. 

(a) Except as provided in paragraphs 

(b) and (c) of this section, part 800 of 

this chapter, Bond and Insurance 

Requirements for Surface Coal Mining 

and Reclamation Operations Under 

Regulatory Programs, shall apply to any 

person conducting surface mining and 

reclamation operations. 

(b) * * * 

(c) Special consideration for sites with 

long-term postmining pollutional 

discharges. With the approval of the 

Office, the permittee may establish a 

trust fund, annuity or both to guarantee 

treatment of long-term postmining 

pollutional discharges in lieu of posting 

one of the bond forms listed in § 800.12 

of this chapter for that purpose. The 

trust fund or annuity will be subject to 

the following conditions: 

(1) The Office will determine the 

amount of the trust fund or annuity, 

which must be adequate to meet all 

anticipated treatment needs, including 

both capital and operational expenses. 

(2) The trust fund or annuity must be 

in a form approved by the Office and 

contain all terms and conditions 

required by the Office. 

(3) The trust fund or annuity must 

provide that the United States or the 

State of Tennessee is irrevocably 

established as the beneficiary of the 

trust fund or of the proceeds from the 

annuity. 

(4) The Office will specify the 

investment objectives of the trust fund 

or annuity. 

(5) Termination of the trust fund or 

annuity may occur only as specified by 

the Office upon a determination that no 

further treatment or other reclamation 

measures are necessary, that a 

replacement bond or another financial 

instrument has been posted, or that the 

administration of the trust fund or 

annuity in accordance with its purpose 

requires termination. 

(6) Release of money from the trust 

fund or annuity may be made only upon 

written authorization of the Office or 

according to a schedule established in 

the agreement accompanying the trust 

fund or annuity. 

(7) A financial institution or company 

serving as a trustee or issuing an 

annuity must be one of the following: 

(i) A bank or trust company chartered 

by the Tennessee Department of 

Financial Institutions; 

(ii) A national bank chartered by the 

Office of the Comptroller of the 

Currency; 

(iii) An operating subsidiary of a 

national bank chartered by the Office of 

the Comptroller of the Currency; 

(iv) An insurance company licensed 

or authorized to do business in 

Tennessee by the Tennessee Department 

of Commerce and Insurance or 

designated by the Commissioner of that 

Department as an eligible surplus lines 

insurer; or 

(v) Any other financial institution or 

company with trust powers and with 

offices located in Tennessee, provided 

that the institution’s or company’s 

activities are examined or regulated by 

a State or Federal agency. 

(8) Trust funds and annuities, as 

described in this paragraph, must be 

established in a manner that guarantees 

that sufficient moneys will be available 

to pay for treatment of postmining 

pollutional discharges (including 

maintenance, renovation, and 

replacement of treatment and support 

facilities as needed), the reclamation of 

the sites upon which treatment facilities 

are located and areas used in support of 

those facilities. 


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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Rules and Regulations 9637 

(9) When a trust fund or annuity is in 

place and fully funded, the Office may 

approve release under § 800.40(c)(3) of 

this chapter of conventional bonds 

posted for a permit or permit increment, 

provided that, apart from the pollutional 

discharge and associated treatment 

facilities, the area fully meets all 

applicable reclamation requirements 

and the trust fund or annuity is 

sufficient for treatment of pollutional 

discharges and reclamation of all areas 

involved in such treatment. The portion 

of the permit required for postmining 

water treatment must remain bonded. 

However, the trust fund or annuity may 

serve as that bond. 

■ 3. In § 942.816, revise paragraph (f)(3) 

introductory text and paragraph (f)(4) as 

follows: 

§ 942.816 Performance standards—

Surface mining activities. 

* * * * * 

(f) * * * 

(3) For areas developed for wildlife 

habitat, undeveloped land, recreation, 

or forestry, the stocking of woody plants 

must be at least equal to the rates 

specified in the approved reclamation 

plan. To minimize competition with 

woody plants, herbaceous ground cover 

should be limited to that necessary to 

control erosion and support the 

postmining land use. Seed mixes and 

seeding rates will be specified in the 

permit. 

* * * * * 

(4) Bare areas shall not exceed onesixteenth (1/16) acre in size and total 

not more than ten percent (10%) of the 

area seeded, except for areas developed 

for wildlife habitat, undeveloped land, 

recreation, or forestry. 

■ 4. In § 942.817, revise paragraph (e)(3) 

introductory text and paragraph (e)(4) as 

follows: 

§ 942.817 Performance standards—

Underground mining activities. 

* * * * * 

(e) * * * 

(3) For areas developed for wildlife 

habitat, undeveloped land, recreation, 

or forestry, the stocking of woody plants 

must be at least equal to the rates 

specified in the approved reclamation 

plan. To minimize competition with 

woody plants, herbaceous ground cover 

should be limited to that necessary to 

control erosion and support the 

postmining land use. Seed mixes and 

seeding rates will be specified in the 

permit. 

* * * * * 

(4) Bare areas shall not exceed onesixteenth (1/16) acre in size and total 

not more than ten percent (10%) of the 

area seeded, except for areas developed 

for wildlife habitat, undeveloped land, 

recreation, or forestry. 

[FR Doc. E7–3649 Filed 3–1–07; 8:45 am] 

BILLING CODE 4310–05–P 


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