OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 1 of 3

COALEX STATE INQUIRY REPORT - 283

May 1994

Olga Brunning, Esquire

Maryland Department of Natural Resources

Tawes Building

580 Taylor Avenue, Room C-4

Annapolis, Maryland 21401

TOPIC: TRANSFERABILITY OF VALID EXISTING RIGHTS (VER)

INQUIRY: An operator of a tipple (with VER) wanted to transfer the permit; however, he 

did not get all of the papers in before the permit expired. Is the VER transferable to the 

new operator, particularly in this situation where there was a break in the permit? 

Please locate any relevant information on these issues. 

SEARCH RESULTS: Research was conducted using COALEX and LEXIS. A 1991 

preamble to OSM's proposed rule on VER discussing the transferability of VER was 

identified; a copy is attached. No information was retrieved on the issue of the expiration 

of a permit before the completion of its proposed transfer and the resulting effect on 

VER. To provide general background information, materials on transfer of permit rights 

and continuing permittee obligations when permits expire are included as part of the 

Report. 

TRANSFERABILITY of VER

56 FR 33152 (JULY 18, 1991). Proposed rule. Areas designated by Act of 

Congress.

"Transferability of VER. The legislative history of SMCRA suggests that Congress 

wanted to avoid any compensable takings.... Many, if not most, property rights in coal 

are transferable under State law. Any VER regulatory definition or policy adopted by 

OSM that would have the effect of limiting or abrogating the right to transfer property 

would risk effecting a compensable taking. In addition, a review of VER law under other 

Federal statutes indicates no clear or typical Congressional intent the VER be 

nontransferable. OSM believes that to interpret SMCRA to impose or authorize a limit 

on VER transferability would not comply with the intent of Congress in enacting 

SMCRA. Thus, the property rights requirement in this proposed section incorporates the 

concept that VER is transferable.
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 2 of 3

"...[I]f a person with a property interest in the coal on the applicable effective ate had 

VER, that person could, if permitted by applicable laws and regulations, transfer the 

VER to a successor after the effective date. The transferred right would suffice as the 

basis for a finding of VER for the successor in interest. The determination of VER takes 

into account the nature of the rights on the applicable effective date. Subsequent 

property transactions cannot be used to create VER if it did not exist on the effective 

date."

See excerpt on transferability of VER in 53 FR 52374 (December 27, 1988). Proposed 

rules. Applicability of the prohibitions of SMCRA to the surface impacts of underground 

coal mining. 

TRANSFER OF PERMIT RIGHTS

A list of Federal Register preambles on proposed and final rules for Parts 773 and 774 

dating back to June, 1982 is attached.

PERMIT EXPIRATION

54 FR 13814 (APRIL 5, 1989). Final rule. Permit renewal. 

The rule removed the requirements to renew a permit for which the permit term expired 

when only reclamation activities remained to be performed. The preamble discusses the 

obligations that continue until final bond release.

44 FR 14902 (MARCH 13, 1979). Permanent program preamble - Final rule. Section 

788.14 Application for renewals.

"3. Also suggested was an addition to this section allowing an operation to continue 

under the terms of the old permit, should the application for renewal be contested 

beyond the term of the old permit. This suggestion was rejected. Section 771.21(b)(2) 

[now 774.15] of the regulations requires that applications for renewal be submitted at 

least 120 days prior to expiration of the permit involved, which should be ample time in 

which to process renewal applications. Section 506(d) of the Act and 30 CFR 788.16 

[now 774.14] state that an operation shall have the right of successive renewal, unless 

the regulatory authority makes certain findings. If these finding are not made, the 

permittee could continue mining past the term of the original permit, even if the decision 

of the regulatory authority was contested by opponents of renewal. However, if the 

regulatory authority found that the permit should not be renewed, and the original term 

of the permit expired during an appeal, the operator should not be able to continue to 

operate under the Act."

See the two Interior administrative decisions attached: WHITE WINTER COALS, INC., 

1 IBSMA 305, IBSMA 79-29 (1979). STRAIGHT LINE COAL CORPORATION v OSM, 

Docket No. NX 0-104-R (1981).
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 3 of 3

ATTACHMENTS

A. 56 FR 33152 (JULY 18, 1991). Proposed rule. Areas designated by Act of 

Congress. 

B. 53 FR 52374 (DECEMBER 27, 1988). Proposed rules. Applicability of the 

prohibitions of SMCRA to the surface impacts of underground coal mining. 

C. A list of Federal Register preambles on proposed and final rules for Parts 773 

and 774 dating back to June, 1982. 

D. 54 FR 13814 (APRIL 5, 1989). Final rule. Permit renewal. 

E. 44 FR 14902 (MARCH 13, 1979). Permanent program preamble - Final rule. 

Section 788.14 Application for renewals. 

F. WHITE WINTER COALS, INC., 1 IBSMA 305, IBSMA 79-29 (1979). 

G. STRAIGHT LINE COAL CORPORATION v OSM, Docket No. NX 0-104-R 

(1981).