Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Notices 63187

In those instances when Indian

royalty coal is washed, transported, or

sold under non-arm’s-length conditions,

it is necessary for MMS to obtain other

data, and in some cases, appropriate

sales contracts, to accurately determine

if the value of coal and the gross

proceeds for royalty calculation

purposes have been correctly computed

by the lessee. Coal sales contracts for

Indian lands are required to be

submitted only upon request by MMS.

We estimate that four lessees may be

requested to submit sales contracts and

that each submission will take 3 hours

to prepare, a total of 12 burden hours.

Authorization to deduct coal

transportation and washing allowances

continues for 12 months, or until the

contract is changed or terminated. We

estimate that recordkeeping for these

allowances will require 1 hour per

respondent annually (5 respondents × 1

hour = 5 burden hours). Therefore, the

total annual burden hour estimate for

this information collection is 18 burden

hours (1+12+5=18).

Dated: November 20, 1997.

Joan Killgore,

Acting Associate Director for Royalty

Management.

[FR Doc. 97–31082 Filed 11–25–97; 8:45 am]

BILLING CODE 4310–MR–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

Request for Determination of Valid

Existing Rights Within the Wayne

National Forest

AGENCY: Office of Surface Mining

Reclamation and Enforcement, Interior.

ACTION: Notice of decision.

SUMMARY: This notice announces the

decision of the Office of Surface Mining

Reclamation and Enforcement (OSM) on

a request by Edward and Madeiline

Blaire and Buckingham Coal Company,

Inc. (Buckingham) for a determination

of valid existing rights (VER) under

section 522(e) of the Surface Mining

Control and Reclamation Act of 1977

(SMCRA). OSM has determined that the

requesters do possess VER to mine coal

by surface methods on 25.2 acres of

federal lands within the Wayne National

Forest in Perry County, Ohio. This

decision is based on the ‘‘takings

standard,’’ which requires OSM to

evaluate whether a determination that

the requester does not have VER would

result in a compensable taking of a

property interest under the Fifth

Amendment to the U.S. Constitution.

FOR FURTHER INFORMATION CONTACT:

Peter Michael, Office of Surface Mining

Reclamation and Enforcement,

Appalachian Regional Coordinating

Center, Room 218, Three Parkway

Center, Pittsburgh, PA 15220.

Telephone: (412) 937–2867. E-mail

address: pmichael@osmre.gov.

SUPPLEMENTARY INFORMATION:

I. Background on VER Requirements

for National Forest Lands

Section 522(e) of SMCRA (30 U.S.C.

1272(e)) prohibits surface coal mining

operations on certain lands unless a

person has VER to conduct such

operations or unless the operation was

in existence on August 3, 1977, the date

of enactment of SMCRA. Section

522(e)(2) in relevant part, applies the

prohibition to federal lands within the

boundaries of any national forest unless

the Secretary of the Interior finds that

(1) there are no significant recreational,

timber, economic, or other values that

may be incompatible with surface coal

mining operations and (2) the surface

operations and impacts are incident to

an underground coal mine.

Under section 523 of the Act and 30

CFR 740.11, the state definition of VER

applies to all federal lands in states with

regulatory programs approved under

section 503 of SMCRA. However, under

30 CFR 745.13, the Secretary has

exclusive authority to determine VER

for surface coal mining and reclamation

operations on federal lands within the

boundaries of the areas specified in

paragraphs (e)(1) and (e)(2) of section

522 of the Act. OSM reaffirmed these

basic principles in the preamble to the

suspension notice concerning VER

published on November 20, 1986 (51 FR

41954). However, to be consistent with

a previous federal court decision

concerning OSM’s March 13, 1979

definition of VER, the preamble

included the caveat that, in states with

an all-permits standard for VER, OSM

would apply the standard as if it

contained a good-faith component. In

other words, if the state program

requires that a person obtain all

necessary permits prior to August 3,

1977, to qualify for VER, OSM will

apply the standard as if it recognizes

that a person also has VER in situations

where that person has made a good faith

effort to obtain all necessary permits by

that date.

The approved Ohio program relies

primarily upon the all-permits standard.

Ohio Revised Code 1501:13–3–

02(A)(1)(a). However, the United States

District Court for the Southern District

of Ohio has prohibited OSM from using

the state program definition or the

policy set forth in the November 20,

1986 suspension notice. Belville Mining

Co. v. Lujan, No. C–1–89–790 (S.D. Ohio

July 22, 1991), modified, Sept. 21, 1992.

In separate litigation, the same court

applied a takings standard to a VER

determination. Sunday Creek Coal Co.

v. Hodel, No. C12–88–0416 (S.D. Ohio

1988).

In the Belville litigation, OSM made a

commitment to the court to apply a

takings standard in determining

whether a person possesses VER to

conduct surface coal mining operations

on federal lands within the court’s

jurisdiction, including the Wayne

National Forest, until a new federal rule

defining VER is in place. Therefore, in

the Southern District of Ohio, under the

takings standard, a person has VER if, as

of the date of the lands come under the

protection of section 522(e) of SMCRA,

application of the prohibitions of

section 522(e) would result in a

compensable taking of property under

the Fifth Amendment to the U.S.

Constitution.

II. Request for VER Determination

On August 14, 1995, James F. Graham

of Buckingham requested that OSM

determine whether the company has

VER to remove the No. 6 coal seam,

using block cut, contour, and area

mining methods, from 25.2 acres of

federal lands within the authorized

boundaries of the Wayne National

Forest in Perry County, Ohio.

Buckingham previously submitted an

application for a permit to conduct

surface mining and reclamation

operations on this parcel and an

adjoining 10.7 acres of land in private

ownership to the Ohio Department of

Natural Resources (ODNR), Division of

Reclamation on March 8, 1995. Of the

35.9 acres in the permit application,

Buckingham proposes to mine a total of

12.6 acres of coal. The federal

government owns the surface overlying

9.8 of these acres.

The lands included in the request lie

along the eastern edge of a 134-acre

parcel for which the United States of

America purchased the surface rights

from Daniel C. Jenkins, Jr. and other

interested parties on April 24, 1967, and

the Blaires on May 1, 1967. The U.S.

Department of Agriculture, Forest

Service (USFS) currently manages the

land as part of the Wayne National

Forest. The Blaires own the mineral

estate and Mr. Graham is the lessee of

all coal within that estate.

The property extends from north to

south along an ephemeral tributary of

Pine Run and is about 1.8 miles

northeast of the city of Shawnee, Ohio.

Its southern limit is adjacent to County
63188 Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Notices

Route 43. The center of the property lies

on the boundary between Sections 11

and 14 on the New Straightsville, Ohio

USGS Quadrangle.

The proposed permit area, including

the federal lands, has been affected by

past surface and underground mining of

the No. 6 coal seam. Two unreclaimed

highwalls and an impoundment remain

on 5.1 acres at the southern end of the

property. The coal which the requester

proposes to surface mine comprises a

line of barrier pillars in an abandoned

underground mine beneath the Pine

Run tributary. The requester estimates

that the extractable coal reserves total

88,200 tons.

On August 28, 1995, OSM notified the

USFS that it had received a request for

a VER determination from Buckingham

and requested that the USFS provide a

title opinion and any related

information concerning Buckingham’s

property right to mine coal by the

methods proposed. By letter dated April

24, 1996, the USFS submitted a report

from the U.S. Department of

Agriculture’s General Counsel that

concluded that the Blaires do have the

property right to remove the coal by

surface mining methods. (A person must

possess the right to conduct the

proposed activity under state property

law before OSM can issue a positive

VER determination under SMCRA.)

In a notice published in the March 1,

1996 Federal Register (61 FR 8074),

OSM provided opportunity for public

comment on the Buckingham request. In

response to a request for a public

hearing from the Buckeye Forest

Council, OSM reopened the public

comment period by notice published in

the July 16, 1996 Federal Register (61

FR 37078). The public hearing took

place at the Ohio University Inn in

Athens, Ohio on August 8, 1996. The

comment period closed on August 16,

1996.

On September 16, 1996, OSM

requested additional information from

Buckingham. Buckingham forwarded

supplemental information on September

17 and October 3, 1996. The October 3

submittal also added the Blaires as

persons requesting the VER

determination.

On May 27, 1997, OSM again

requested that Buckingham and the

Blaires provide additional information

relating to the economic viability of the

proposed surface mining operation and

other potential uses for the property. On

August 7, 1997, Buckingham and the

Blaires supplied information responsive

to the request after OSM agreed to treat

the information as presumptively

confidential and protected commercial

or financial information within the

limitations of the Freedom of

Information Act.

III. The Applicable Standard

Pursuant to OSM’s commitment to the

court in the Southern District of Ohio,

as set forth in the portion of this notice

entitled ‘‘Background on VER

Requirements for National Forest

Lands,’’ OSM evaluated Buckingham’s

request in accordance with judicial case

law involving takings and the Attorney

General’s Guidelines for the Evaluation

of Risk and Avoidance of Unanticipated

Takings, issued June 30, 1988. See 56

FR 33165 (July 18, 1991). Specifically,

OSM relied upon a three-part regulatory

takings analysis commonly used by the

courts in deciding whether

governmental action has effected a

compensable taking of private property.

This analysis includes a determination

of: (1) The economic impact of the

proposed government policy or action

on the property interest involved, (2) the

extent to which the action or regulation

interferes with any reasonable,

investment-backed expectations of the

owner of the property interest, and (3)

the character of the government action.

Under the standard for compensable

takings, OSM will not find that the

Blaires have VER unless OSM makes

either of two sets of findings. First, OSM

could find that the Blaires have

demonstrated that, as of August 3, 1977,

application of the prohibition would

preclude all economic use of the

property. In the alternative, OSM could

find that prohibition would not

substantially advance a legitimate

public purpose of SMCRA. Under the

latter option, OSM would also have to

find that the Blaires have demonstrated

either that prohibition of surface coal

mining would significantly diminish the

property’s value, or that prohibition

would substantially interfere with the

Blaires’ investment-backed

expectations. If the Blaires have VER to

surface mine the 25.2 acres, then the

lease to Buckingham would also convey

VER to Buckingham.

IV. Application of the Standard

This matter involves a situation where

governmental regulation has the

potential to result in a taking of private

property. The rights of property owners

are not absolute and government may,

within limits, regulate the use of

property. But, the United States

Supreme Court has long held that

regulation that affects the value, use, or

transfer of property may constitute a

taking if it goes too far. Pennsylvania

Coal Co. v. Mahon, 260 U.S. 393 (1922).

In making the VER determination, OSM

must decide whether prohibiting surface

coal mining on the property would

cause economic impacts on the property

or interfere with reasonable, investmentbacked expections of the persons with

an interest in the property to the extent

that justice and fairness would require

that the public, rather than the private

property owners, pay for the public use

of the property. Armstrong v. United

States, 364 U.S. 40, 49 (1959).

When regulation goes too far in

infringing on private property rights is

not precisely definable. The Supreme

Court has consistently ‘‘eschewed any

‘set formula’ for determining how far is

too far, preferring to ‘engage in * * *

essentially ad hoc, factual inquiries.’ ’’

Lucas v. South Carolina Coastal

Council, 505 U.S. 1003, 1015 (1992),

quoting Penn Central Transportation

Co, v. New York City, 438 U.S. 104, 124

(1978). To aid in this determination,

however, the Court has identified the

three factors referenced in Part III above

as having ‘‘particular significance.’’

Connolly v. Pension Benefit Guaranty

Corp., 475 U.S. 211, 224–25 (1986).

A. Protected Property Interest

In Lucas, the Supreme Court

recognized what it characterized as a

‘‘logically antecedent inquiry’’ into a

takings claimant’s title prior to the

inquiry into whether the government

has interfered with rights inherent in

that title in a manner that rises to the

level of a Fifth Amendment taking. Id.

at 1027. Thus, OSM starts with this

inquiry.

The Court notes in Lucas that its

takings jurisprudence ‘‘has traditionally

has been guided by the understandings

of our citizens regarding the content of,

and the State’s power over the ‘bundle

of rights’ that they acquire when they

obtain title to property.’’ Id. at 1027.

Thus, the Court continues, some

regulation of rights should be expected.

‘‘In the case of personal property, by

reason of the State’s traditionally high

degree of control over commercial

dealings,’’ the possibility of significant

impacts should be anticipated. Id. at

1027–28. But, the Court indicated that

interests in land have greater

expectations of protection. Id. at 1028.

Further, the Court suggested that an

‘‘owner’s reasonable expectations’’ may

be critical to a takings determination. Id.

at 1016 n. 7. These expectations are

those that ‘‘have been shaped by the

State’s law of property—i.e., whether

and to what degree the State’s law has

accorded legal recognition and

protection to the particular interest in

land with respect to which the takings

claimant alleges a diminution (or

elimination of) value.’’ Id. at 1016 n. 7.
Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Notices 63189

1 In any case, as noted below, OSM did not base

its decision on the economic impacts of prohibition

of mining on Buckingham’s current property

interests, but rather on the property interests that

existed on August 3, 1977.

In this case, the critical property

interest is the mineral estate held by the

Blaires. This is an interest in land

historically accorded recognition and

protection by the courts of Ohio, as well

as all other states. This is not the type

of interest that might normally be

expected to be subject to deprivation

without compensation. Thus, the Blaires

possess title to an interest subject to

Fifth Amendment protection.

B. Economic Impact of the Prohibition

Evaluation of the economic impact of

a government action on a property

interest involves determination of the

economic and property interest or

interests affected, the degree of the

economic impact on the property

interests, the character and present use

of the property, the duration of the

proposed governmental action, and

whether the proposed government

action carries benefits to the private

property owner that offset or mitigate

any adverse economic impact.

With respect to the property interest

affected, OSM considers the relevant

unit of property for analysis to be the

land for which VER is requested and all

other contiguous units of property

under the same ownership and/or same

use. See 56 FR 33161 (July 18, 1991). In

this case, the relevant unit of property

is the 134-acre tract of property for

which the Blaires own the mineral

estate.

The VER determination requested by

the Blaires and Buckingham includes

only 25.2 acres of this unit. The

economic interest in this coal has been

split, since the Blaires have leased the

right to mine the coal at issue to

Buckingham in return for a one dollar

royalty per ton of the coal mined.

Hence, the Blaires’ place the value of

their interest in the coal at $88,200,

based on an estimated 88,200 tons of

recoverable coal. OSM’s analysis

confirms the requesters’ estimate of the

recoverable coal reserves.

Administrative Record No. 206

(hereinafter, ‘‘A.R. ll’’). Furthermore,

OSM’s evaluation of information

provided by Buckingham concerning

coal quality and overburden ratios

confirms the proposed operation is

economically viable, which means that

the Blaires’ royalty interest has

economic value. (A.R. 219.)

With respect to Buckingham’s

interest, the company contends that the

coal is a necessary and integral part of

a larger operation. Specifically, the

company states that it needs the lowsulfur coal from this property to blend

with higher-sulfur coal from its other

mines to meet contractual supply

obligations with a local utility.

Buckingham further contends that it

will suffer losses amounting to

approximately 3.5 million dollars if it

cannot mine the coal in question. This

contention is based upon the

assumption Buckingham will be unable

to market the coal from its other

reserves if it cannot blend this coal with

the coal from the national forest tract.

OSM’s analysis, however, finds that

Buckingham may have other options

with far less dramatic financial

implications. (A.R. 220.) For example,

obtaining low-sulfur coal from another

source could reduce the projected

financial impact by 90% or more.

Alternatively, Buckingham might be

able to renegotiate its supply contract

and acquire sulfur dioxide emission

allowances to package with its higher

sulfur coat, which would reduce the

potential losses by 67–90 percent.

Under either option, OSM agrees that

the company likely would sustain some

lost profit potential if it cannot develop

the proposed mine. However, it is not

clear from the record what the loss in

market value of the leased coal would

be, as distinguished from lost profits in

Buckingham’s business dealings.1

Analysis of the economic impact of a

prohibition on surface mining involves

a number of factors. First, there cannot

be a compensable taking unless there is

a diminution in the value of the

requesters’ property rights. Thus, if the

coal could be extracted by some other

method, there may be no taking issue.

If this is not possible, any value

allegedly taken must be compared to

other value in the property that has

accrued or will accrue to the owners. If

a prohibition would affect merely one

strand of a bundle of property rights and

would not be significant, there may be

no taking. Thus, it must be determined

whether the property proposed surface

coal mining.

With respect to alternative methods of

mining, the requesters claim that the

absence of competent rock above the

coal seam precludes underground

mining. The requesters also dismiss

auger mining as a viable alternative,

because they contend that method is not

suitable for the removal of pillars from

abandoned underground mine

workings.

After a technical review, OSM finds

that underground mining is not feasible

for this site because of stress relief

fracturing, roof stability and water

inflow problems. (A.R. 206.) In addition,

because of the need to establish a faceup to perform auger mining and due to

the irregular shape of the remaining

block of coal and the fact that entries

have been cut through it in the past so

that it is not solid, OSM agrees that

auger mining is an unviable option for

mining the coal.

Since alternative methods of mining

are not possible here, other benefits

derived from the property or other

potential uses for the property are

relevant. The 134-acre tract for which

the Blaires own the mineral interest has

previously been underground and/or

surface mined. Maps in OSM’s mine

map repository indicate this mining was

completed prior to 1940, which predates

the current owners’ acquisition of the

property. Thus, the bulk of the use of

the coal interest in this property has

already been derived from the property

by the Blaires’ predecessors in interest.

Prohibition of mining the remainder of

the coal, then, would only deprive the

Blaires of the use of the unmined pillars

of coal.

OSM’s investigation indicate there

may be other recoverable coal from the

No. 6 seam within the 134-acre tract.

(A.R. 222). The maps in OSM’s mine

map repository show barrier pillars

along Pine Run which, if still existing,

may be surface mineable. The record

provides no further information on the

value of that coal. In addition, the 1961

New Straightsville USGS topographic

quadrangle indicates that surface

mining has already occurred along both

sides of the run. In any event, any

remaining coal could not be surface

mined absent a VER determination.

Underground extraction of the

remainder of the workings appears

infeasible because of mine-stability and

safety considerations, as well as the low

percentage of coal remaining. (A.R. 222.)

Published geologic maps and cross

sections for Ohio indicate the potential

existence of other seams below the No.

6 coal seam. However, there has been

little interest in mining these seams to

date and ODNR has no records of

marketable coal beneath the No. 6 seam

in Perry County. (A.R. 222.) An ODNR

geologist advised that the occurrence of

these coal beds is spotty and, where

present, the quality of the coal can

change significantly between locations.

(A.R. 222.) Thus, there is no data to

indicate any value in lower coal seams

in which the Blaires may have an

interest.

Other potential uses of the mineral

estate include oil and gas production.

The Blaires receive royalties from two

wells operating since 1987 on the 134-

acre tract of land. Another well drilled

on the property proved economically

unproductive. The wells tap the Clinton
63190 Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Notices

2OSM did not base its decision on evaluation of

the investment-backed expectations of Buckingham,

because Buckingham did not hold the coal rights on

August 3, 1977.

sandstone, which is the most productive

oil and gas deposit in the region. Income

from the two economically productive

wells has been modest. Based on the

state’s regulatory restrictions on spacing

of oil and gas wells and information

provided by the Blaires concerning

performance of the existing wells, OSM

determined that the Blaires could

potentially develop two or three

additional wells on the property, the

value of which, with the existing wells,

would likely be approximately the same

as the value of the coal royalties the

Blaires expect to receive from their coal

interest. (A.R. 221.) Other deposits may

exist, but their presence and

recoverability are entirely speculative.

Clay also exists on the property, with

the shallowest deposit located

immediately underneath the No. 6 coal

seam. However, the market for clay is

limited (Perry County produced less

than 18,000 tons in the last two years

combined) and its value is low,

generally about one-fifth that of coal.

(A.R. 222.) Most clay mining occurs in

conjunction with coal mining and is

secondary to the coal mining. In

addition, the requesters state that the

type of clay on the property is not in

demand, so no market exists. Therefore,

OSM finds that the record (including

available market and geologic

information) indicates that the clay on

the property is not economically

recoverable and that clay mining does

not constitute a reasonable alternative

use of the property.

Based on the record before it and on

the analysis in this decision, OSM finds

that application of the 552(e)(2)

prohibition to the Blaires property (the

mineral estate of the 134-acre parcel)

would not deny the Blaires all economic

use of the property in question. In

particular, OSM finds that predecessors

in interest to the Blaires have already

made reasonable economic use of the

coal rights on the 134 acres, because the

record shows that the coal on this

property has already been underground

and surface mined. Further, OSM finds

that the Blaires are making economic

use of the oil and gas rights they hold

in the 134 acres by means of two

operating oil and gas wells and available

information indicates the Blaires could

potentially operate as many as three

more wells on their property.

However, because the remaining coal

on the Blaires property can only be

mined by surface methods, OSM also

concludes that a negative VER

determination would preclude recovery

of the remaining coal, and therefore

would cause diminution in the value of

the Blaires’ property.

C. Interference With Reasonable,

Investment-Backed Expectations

This element of the standard taking

analysis requires an evaluation of (1) the

owner’s demonstrated expectations for

use of the property, (2) whether the

expectations are reasonable and

investment-backed, and (3) the degree to

which the government action interferes

with these expectations.

The Blaires cite the acquisition of the

property with an expectation of mining,

contending that the coal was the

principal value of the mineral estate.

Buckingham points to its investment of

resources in preparation of a permit

application, as well as significant

additional investments in an integrated

mining operation that it claims relies

upon access to the high sulfur coal

under the national forest tract.

Buckingham invested significant

resources (several million dollars) in

both acquiring the contract to be served

by the integrated operation, and in

establishing the mining operation.2

While the Blaires may have had

expectations of exploiting the mineral

interest when they acquired the

property, it appears their acquisition

was by inheritance and, consequently

involved no investment. Presumably,

the purchase they cite was the original

purchase by the predecessor in interest.

OSM does not consider this an

investment by the Blaires, and therefore

concludes that the record does not

demonstrate that the Blaires have

investment-backed expectations.

D. Character of the Government Action

This element of the takings analysis

requires an evaluation of (1) the

intended purpose of the enabling

statute, (2) whether the action will

substantially advance a legitimate

public purpose, and (3) the degree to

which the regulated activity contributes

to a harm that the governmental action

is designed to address.

The public purpose in this matter is

Congress’ intent to protest federal lands

in national forests from the harmful

affects of surface coal mining

operations. The prohibition, specified in

section 522(e)(2) of SMCRA, is based on

Congress’ determination that federal

lands in the national forests are places

that are generally incompatible with

surface coal mining operations. See S.

Rep. No. 95–128, at 55 (1977). Congress

was concerned that mining might

destroy the land’s potential for other

equally or more desirable land uses. Id.

For purposes of this takings analysis,

OSM will assess the degree to which the

mining of this specific property would

contribute to the harm Congress

proposed to address by prohibiting

mining. This determination, then, must

address the intended uses, purposes and

values of this particular national forest

land.

The United States acquired the

surface rights to this parcel pursuant to

the Weeks Forestry Act of 1911, 16

U.S.C. § 515. The Weeks Act authorized

the Secretary of Agriculture to

‘‘purchase such forested, cut-over, or

denuded lands within the watersheds of

navigable streams as in his judgment

may be necessary to the regulation of

the flow of navigable streams or for the

production of timber.’’ Id. Thus, the

principal purposes for acquiring land

for the national forests under this Act

were to provide watershed control and

to ensure a national timber supply. But,

over time, the uses, purposes and values

of the national forests have expanded. In

the Multiple-Use Sustained-Yield Act of

1960, Congress expressed its policy

‘‘that the national forests are established

and shall be administered for outdoor

recreation, range, timber, watershed,

and wildlife and fish purposes.’’ 16

U.S.C. § 528. The Secretary of

Agriculture was further ‘‘directed to

develop and administer the renewable

surface resources of the national forests

for multiple use and sustained yield of

the several products and services

obtained therefrom.’’ 16 U.S.C. § 529.

Accordingly, the current purpose of

national forest lands is to provide a

diversified, multiple use of the forest

resources. Pursuant to the Forest and

Rangeland Renewable Resources

Planning Act of 1974, as amended by

the National Forest Management Act,

national forest administrators are

required to prepare forest management

plans. 16 U.S.C. § 1604. The Wayne

National Forest has such a plan. This

plan provides guidance on the uses,

purposes and values of lands within the

forest. The tract at issue here is included

in Management Area 3.3, which has a

designated management goal of

providing (1) high-quality hardwoods

on a sustained-yield basis; (2) wildlife

habitat diversity, favoring species that

require mature and overmature

hardwoods; and (3) dispersed

recreational activities, such as hiking,

horseback riding and hunting. Forest

areas managed for these purposes are

intended to be in blocks of 1,000 acres

or larger. Provision is made for mineral

exploration and extraction.

More general statements in the forest

plan recognize the existence of

considerable private mineral ownership
Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Notices 63191

on federal lands within the national

forest. The plan does not specifically

address surface coal mining, but it does

refer to the possibility of surface mining

and recognizes that mineral extraction

will occur throughout the forest. With

respect to minerals, the forest

management goal provides that the

USFS administer private mineral rights

so that all activities and operations are

prudently consistent with the best

private management practices.

The persons requesting the VER

determination claim that the proposed

surface coal mining operation would not

adversely impact these uses, purposes

and values. They state that the land in

its current condition has no significant

recreational, timber, or economic values

incompatible with the proposed surface

mining. They point out that the USFS

has not developed the land for

recreation. There are no camp sites,

picnic sites or hiking trails. Further, it

is noted that the tract is not contiguous

with any other USFS property and only

approximately twenty acres of relatively

undisturbed timber is at issue. They also

assert that development of the property

as a resource is limited by the

topography, soil conditions, shape of

the area and timber quality. Finally, the

requesters contend that the proposed

mining and reclamation would improve

the land in some respects by eliminating

highwalls and subsidence depressions

resulting from previous surface and

underground mining operations.

OSM’s examination of the property

confirms that the requesters have

accurately portrayed the condition of

the property. In particular, the size of

the subject property and its isolated

location render it of limited current use

and value for the purposes specified by

the USFS. As indicated, the size of the

property is small for the intended uses

and the USFS has not developed the

property. Also, it is approximately

three-fourths of a mile from any other

national forest tract, with properties

owned by a number of other persons

separating the forest tracts, making

consolidation in the near future

unlikely. In addition, the quality of the

timber does not appear to be consistent

with the purposes delineated for the

property. It has been characterized as

low to medium quality by the USFS.

(A.R. 223.) Further, the property

exhibits scars of previous mining that

would benefit from reclamation, as

claimed.

Finally, the USFS has not asserted

that any governmental interest in the

national forest would be significantly

impacted by the proposed mining. (A.R.

223.) Rather, the USFS has confirmed

that the proposed operation likely

would have no significant impact on the

current uses, purposes and values of

this land. In addition, the USFS has

provided input to the state regulatory

authority concerning the proposed

reclamation plan for the site and has

stated that the agency will work closely

with the state to ensure that reclamation

fully returns the land to its planned use

under the USFS management plan for

this area. (A.R. 112.) Thus, OSM finds

that mining the subject tract would have

no significant impact on the current

uses, purposes and values of the

national forest.

V. Summary and Disposition of

Comments

As discussed in Part II of this notice,

OSM solicited public comments and

held a public hearing on the request for

a VER determination. Approximately

175 people attended the public hearing

and OSM received approximately 150

comments. With two exceptions, all

commenters opposed a positive VER

determination. Most of the comments

are addressed in the foregoing analysis

of this matter. The following, however,

are more specific responses to the

comments made.

A number of commenters argued that

OSM should rely upon the good-faith

all-permits standard rather than the

takings standard in making the VER

determination. As discussed in Part I of

this notice, as a result of litigation, OSM

must use the takings standard when

making VER determinations in the

Southern District of Ohio.

One commenter proposed delaying a

decision on the request until OSM

adopts a final federal rule defining VER.

OSM finds no support in law or

regulation for this course of action. The

agency has an obligation to execute its

responsibilities with due diligence.

Several commenters questioned the

propriety of Buckingham requesting the

VER determination, since it did not own

the coal in question. As noted in Part II

of this notice, the owners of the mineral

estate (the Blaires) subsequently joined

Buckingham in requesting the VER

determination. OSM notes, however,

that Buckingham, as the lessee of the

coal, also possesses an interest in the

coal and is appropriately a part of the

determination.

Some commenters emphasized

SMCRA’s expressed intent to protect

public lands and urged OSM to accord

preference to the public interest over the

private interests when conducting the

takings analysis. As discussed in Parts

III and IV of this notice, OSM has

conducted its takings analysis in

accordance with its understanding of

applicable takings jurisprudence.

Many commenters expressed concern

about Buckingham’s ability to reclaim

the site and avoid adverse impacts to

soil, water, wildlife habitats and

ecosystems. While these concerns are

not pertinent to the VER determination

process, the regulatory authority must

address them as part of its review of the

permit application. Under both SMCRA

and the Ohio program, the regulatory

authority may not approve a permit

application unless it finds that

reclamation in accordance with the

requirements of the approved program

is feasible and that the operation has

been designed to ensure compliance

with these requirements. In addition,

the USFS has provided input to the state

concerning the proposed reclamation

plan for the operation, and has stated

that it does not anticipate that the

proposed surface coal mining operation

would significantly affect the current

use of value of the affected lands for

national forest purposes.

A few commenters also expressed

concern that a positive VER

determination in this case could

establish an adverse precedent for

allowing surface coal mining in the

national forests. Since all takings

analyses are fact-specific and limited to

the unique circumstances of each case,

OSM does not consider this case to have

precedential value of the nature feared

by the commenters.

VI. Conclusion

OSM deems the Blaires’ interest to be

key to this VER determination. If the

Blaires had VER on August 3, 1977, they

could transfer it under the lease to

Buckingham. Conversely, if the Blaires

did not possess VER as of that date, then

VER could not be created by transferring

one small portion of the coal rights to

Buckingham.

As of August 3, 1977, if OSM applied

the section 522(e)(2) prohibition to the

Blaires’ property, the Blaires would be

deprived of the right to conduct surface

coal mining on federal lands portion of

the proposed permit area, which would

mean that they could not recover

approximately 88,200 tons of coal. This

deprivation is slight, because the

majority of the coal on the entire 134-

acre parcel has already been exploited

by predecessors of the Blaires. In

addition, the Blaires also have a

remaining use of their mineral estate in

the form of oil and gas production. The

value of the remaining oil and gas

interest is probably about equivalent to

the value of the coal interest. Thus,

OSM finds that (1) most of the economic

use of the Blaires’ coal interest has

already been made by previous

exploitation; (2) the Blaires retain
63192 Federal Register / Vol. 62, No. 228 / Wednesday, November 26, 1997 / Notices

substantial remaining use of their

mineral property interests in the form of

oil and gas production; (3) prohibition

of the proposed surface coal mining

would cause a diminution in value of

the Blaires’ property; and (4) the Blaires

have no reasonable, investment-backed

expectations of surface mining this land.

Finally, the agency finds that mining

of this national forest tract would not

contribute significantly to the harm

Congress addressed through the

prohibition of mining on federal lands

within national forests. Because of its

small size, isolated location relative to

other national forest lands, and

previously mined condition, the tract is

of limited current use for the designated

national forest purposes. The proposed

surface coal mining operation would

have only minimal short-term impacts

on the current use and value of the land.

There are no anticipated adverse longterm impacts. Thus, mining the tract

would have no significant impact on the

forest and reclamation will restore the

land to the planned uses under the

management plan. Therefore, OSM

concludes that the record does not

demonstrate that prohibition of surface

coal mining of the property in question

would substantially advance the section

522(e) prohibition.

OSM also finds that, because most of

the coal on this property has already

been mined, the use of that part of the

Blaires’ property interest has already

occurred. Therefore, a prohibition on

surface mining the remaining coal

would not totally abrogate a property

interest historically viewed as an

essential stick in the bundle of property

rights. However, because prohibition

would diminish the value of the Blaires’

property and would not substantially

advance a legitimate public purpose of

SMCRA, OSM finds that application of

the statutory prohibition on surface

mining the Blaires’ property would

constitute a compensable taking of the

Blaires’ property interests under the

Fifth Amendment to the U.S.

Constitution. Therefore, OSM finds that

the Blaires have VER for the lands in

question and that Buckingham acquired

VER for the same lands by virtue of its

lease of the Blaires’ coal rights.

VII. Appeals

Any person who is or may be

adversely affected by this decision may

appeal to the Interior Board of Land

Appeals under 43 CFR 4.1390 et seq.

(1988). Notice of intent to appeal must

be filed within 30 days from the date of

publication of this notice of decision in

a local newspaper with circulation in

Perry County, Ohio.

Dated: November 19, 1997.

John A. Holbrook, II,

Acting Regional Director, Appalachian

Regional Coordinating Center.

[FR Doc. 97–31041 Filed 11–25–97; 8:45 am]

BILLING CODE 4310–05–M

INTERNATIONAL TRADE

COMMISSION

[Investigation No. 337-TA–372 (Enforcement

Proceeding)]

In the Matter of Certain NeodymiumIron-Boron Magnets, Magnet Alloys,

and Articles Containing Same; Notice

of Commission Determination to Deny

Motion of YBM Magnex, Inc. to be

Substituted for Complainant Crucible

Materials Corporation

AGENCY: U.S. International Trade

Commission.

ACTION: Notice.

SUMMARY: Notice is hereby given that

the U.S. International Trade

Commission (‘‘the Commission’’)

determined to deny as moot the

September 25, 1997, motion of YBM

Magnex, Inc. (‘‘YBM’’) to substitute

YBM for complainant Crucible Materials

Corporation (‘‘Crucible’’) in the abovereferenced enforcement proceeding.

FOR FURTHER INFORMATION CONTACT: Jay

H. Reiziss, Esq., Office of the General

Counsel, U.S. International Trade

Commission, telephone 202–205–3116.

SUPPLEMENTARY INFORMATION: On May

16, 1996, the Commission instituted a

formal enforcement proceeding based

on an enforcement complaint filed by

Crucible Materials Corporation

(‘‘Crucible’’) alleging that respondents

San Huan New Materials High Tech,

Inc. (‘‘San Huan’’), Ningbo Konit

Industries, Inc. (‘‘Ningbo’’), and Tridus

International, Inc. (‘‘Tridus’’)

(collectively ‘‘respondents’’) had

violated the Commission’s October 11,

1995, consent order wherein those

respondents agreed not to sell for

importation, import, or sell after

importation magnets which infringe any

of claims 1–3 of Crucible’s U.S. Letters

Patent 4,588,439 (‘‘the ‘439 patent’’) by

importing or selling magnets that

infringed the claims in issue of the ‘439

patent. On December 24, 1996,

following an evidentiary hearing, the

presiding administrative law judge

(‘‘ALJ’’) issued a recommended

determination (‘‘RD’’) finding that

respondents had violated the consent

order on 33 different days and

recommending that the Commission

impose a civil penalty of $1,625,000 on

respondents. The Commission adopted

the bulk of the RD’s findings on

violation on April 8, 1997, and issued

an opinion explaining that

determination on April 15, 1997,

finding that respondents violated the

consent order on 31 days between

October 11, 1995, and October 10, 1996.

On September 26, 1997, the

Commission issued its final

determination in the enforcement

proceeding, imposing a $1.55 million

civil penalty on respondents, revoking

the consent order and issuing an

exclusion order directed to foreign

respondents San Huan and Ningbo and

a cease and desist order directed to

domestic respondent Tridus, denying

Crucible’s request for attorneys’ fees and

its petition for reconsideration of the

Commission’s prior determination

regarding the application of the Federal

Circuit decision in Maxwell v. J. Baker,

Inc. 86 F.3d 1098, 29 U.S.P.Q.2d 1001

(Fed. Cir.), reh’g denied, suggestion of

reh’g in banc declined (1996), cert.

denied, 117 S. Ct. 1244 (1997), and

denying respondents’ request that the

Commission require the domestic

industry to submit periodic reports

regarding its status as a domestic

industry. Thus, there are no outstanding

issues in this investigation.

On September 25, 1997, YBM moved

to be substituted as the complainant in

this investigation in place of Crucible in

light of the fact that YBM had acquired

the ‘439 patent from Crucible. On

October 6, 1997, respondents and the

Commission investigative attorney filed

replies to YBM’s motion opposing it as

moot in light of the fact that the

Commission concluded this

investigation on September 26, 1997.

Because the Commission concluded

this investigation on September 26,

1997, the Commission determined to

deny YBM’s motion as moot. The

Commission noted, however, that it

would have granted YBM’s motion had

this proceeding still been ongoing.

This action is taken under the

authority of section 337 of the Tariff Act

of 1930, as amended (19 U.S.C. § 1337),

and section 210.75 of the Commission’s

Rules of Practice and Procedure (19 CFR

§ 210.75).

By order of the Commission.

Issued: November 20, 1997.

Donna R. Koehnke,

Secretary.

[FR Doc. 97–31091 Filed 11–25–97; 8:45 am]

BILLING CODE 7020–02–P