OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

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COALEX STATE INQUIRY REPORT - 262

October 1993

Tim Taylor

Department of Natural Resources

Division of Reclamation

P.O. Box 147

201 W Main Street

Jasonville, Indiana 47438

TOPIC: NON-COMMERCIAL USE OF "OTHER MINERALS"

INQUIRY: A landfill operator occasionally runs into patches of coal while excavating 

shale and clay ("other minerals"). These other minerals are used by the landfill operator 

rather than sold for commercial use. Does the 16 2/3 exemption apply to this situation? 

Related topics: Definition of mineral; commercial development; government financed 

construction and landfill. 

SEARCH RESULTS: Existing COALEX Reports were identified for each of the main 

and related topics. Additional research was conducted using COALEX and LEXIS to 

update these Reports. The Reports and additional materials are listed below. Copies 

are attached (NOTE: Reports are included without their attachments).

COMMERCIAL DEVELOPMENT

COALEX COMPARISON REPORT - 173, "Coal removal incident to private 

development" (1991).

During the course of constructing a private, commercial project, the construction 

company found coal. Both a survey and research were conducted to determine if the 

construction company needed a permit to remove the coal.

Generally, the retrieved Interior administrative decisions stated that if the privately 

funded construction projects fell within the scope of SMCRA, a permit was required. 

However, a 1990 opinion was identified that reversed precedent: the ALJ used a twopart test to determine that a particular privately funded project was not subject to OSM's 

jurisdiction: (1) Does the coal enter commerce? (2) What is the underlying purpose of 

the excavation through which the coal is encountered?

GOVERNMENT FINANCED CONSTRUCTION
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

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COALEX STATE INQUIRY REPORT - 115, "Exemption for government-financed 

construction" (1989). 

This Report provides Interior administrative decisions which discuss the exemption from 

obtaining a mining permit when the extraction of coal is an incidental part of 

government-financed construction.

In determining whether the extraction of coal is "necessary to enable construction", 

"necessary" was defined as an engineering, not an economic, necessity. 

COALEX STATE INQUIRY REPORT - 133, "Exemption for government-financed 

construction" (1989). [Includes 115]

The Report provides legislative history on exemptions. No material was identified that 

addressed the issue of whether a request for an exemption for a government-financed

construction project (a landfill) must be made at the time the original permit is issued or 

if it may be authorized after the permit is issued.

ADDITIONAL DECISIONS

WILDER COAL CO. v OSM, 112 IBLA 107, IBLA 87-576 (1989).

The Board affirmed the ALJ decision, finding that the auguring of coal was performed in 

order to finance the grading the airport commission wished done and not because it was 

necessary to the construction of the airport. "Although the excavation down to the level 

of that seam may have been advisable as a means of assuring the stability of the 

surface, the extraction of the coal was not necessary to enable the construction of the 

airport facilities."

VICTOR CONTRACTING CORP. v OSM; DICKENSON COUNTY, VA. v OSM, Docket 

Nos. NX 91-22-R, NX 91-23-R, NX 91-25-R, NX 91-26-R (1992).

The ALJ upheld the Virginia Division of Mined Lands Reclamation determination that the 

Honeycamp Landfill project qualified for the government-financed construction 

exemption. The primary purpose of the project was to bring the landfill into compliance 

with new waste management regulations and to expand the landfill to increase its use 

for an additional 10 plus years. Removal of the previously mined coal beneath the ridge 

created greater stability and lessened possible leachate problems.

T-SQUARE, INC. v OSM, Docket No. NX 6-77-R (1988).

T-Square had a permit to mine clay and shale but did not have a permit to mine the coal 

they removed. Their defense was the 16 2/3 exemption. The ALJ cited to CORDOVA 

CLAY CO., INC. v OSMRE, Docket No. NX 5-3-R (1986) to determine whether the 

exemption applied:
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

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"The test, then is what was the primary intention of the Applicant in conducting this 

operation and, of course, the only way to determine this intention is by examining its 

outward manifestations. The Applicant in this particular case must first prove by 

competent evidence that it is primarily seeking clay and, secondly, that no more than 16 

2/3 percent of the material removed for commercial purposes was coal. In proving this 

the Applicant must necessarily show that there was reasonable expectation of selling all 

the material, other than coal, in order to claim it was removed for commercial purposes."

16 2/3 EXEMPTION

COALEX STATE INQUIRY REPORT - 47 (June, 1985), incorporating COALEX 

STATE INQUIRY REPORT - 24 (December, 1984). Topic: 16 2/3 exemption.

Report 24 provides legislative history on SMCRA 701(28) and includes the May 7, 1984 

notice of proposed rulemaking from the Federal Register. Report 47 updates the prior 

report.

COALEX STATE INQUIRY REPORT - 134, "16 2/3 exemption" (1990). [Updates 

earlier Reports]

Included here are the regulatory history of the exemption, including the December 20, 

1989 final rules, and relevant decisions. 

The 1989 rules established criteria and procedures for determining whether an 

operation qualifies for the exemption. The main requirements for obtaining the 

exemption include a tonnage test and "two straightforward and easily measured criteria 

to define incidental mining, the stratigraphic test and the revenue test."

DEFINITION OF MINERAL

COALEX COMPARISON REPORT - 113, "Definitions of soil and mineral" (June, 

1989). 

This Report addressed the question of whether clay extracted from a borrow pit and 

used for fill dirt is a "mineral", requiring permitting, or "dirt". Included is a table 

summarizing state definitions of "mineral" and "clay" and a discussion of relevant case 

law.

COALEX STATE INQUIRY REPORT - 182, "Definition of soil and mineral" (1991). 

[Includes 113]

REPORT - 182 is an adjunct to REPORT - 134. It includes additional MCNABB 

decisions and the Indiana administrative decision for which both Reports were 

prepared.
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

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COALEX STATE INQUIRY REPORT - 191, "Is fill dirt considered a 'mineral' for 

regulatory purposes? [Includes Reports 24, 47, 113, 134 and 182]

This Report updates Report 182 by the addition of a more recent state case and the 

inclusion of the Alabama administrative decision for which the research was conducted.

ADDITIONAL DECISIONS

JDG, INC. v OSM, 107 IBLA 210, IBLA 87-158 (1989).

HEADNOTES: "To qualify for an exemption under sec. 701(28)(A) of the Surface Mining 

Control and Reclamation Act of 1977, 30 U.S.C. Sec. 1291(28)(A) (1982), exemption of 

coal must be incidental to the extraction of other minerals and constitute less than 16 

2/3 percent of the tonnage of minerals removed for purposes of commercial use and 

sale. The burden of proving entitlement to the exemption rests upon the party claiming 

it."

ROBERT L. CLEWELL et al., 123 IBLA 253, IBLA 91-321 (1992).

HEADNOTES: "An operation is exempt from SMCRA if extraction of coal is incidental to 

extraction of other materials and constitutes less than 16 2/3 percent of the tonnage of 

minerals removed for purposes of commercial use and sale. If an operation is not 

exempt, mining without a valid permit would constitute a violation."

ATTACHMENTS

1. COALEX COMPARISON REPORT - 173, "Coal removal incident to private 

development" (1991). 

2. COALEX STATE INQUIRY REPORT - 115, "Exemption for government-financed 

construction" (1989). 

3. COALEX STATE INQUIRY REPORT - 133, "Exemption for government-financed 

construction" (1989). [Includes 115] 

4. WILDER COAL CO. v OSM, 112 IBLA 107, IBLA 87-576 (1989). 

5. VICTOR CONTRACTING CORP. v OSM; DICKENSON COUNTY, VA. v OSM, 

Docket Nos. NX 91-22-R, NX 91-23-R, NX 91-25-R, NX 91-26-R (1992). 

6. T-SQUARE, INC. v OSM, Docket No. NX 6-77-R (1988). 

7. COALEX STATE INQUIRY REPORT - 47 (June, 1985), incorporating State 

Inquiry Report 24 (December, 1984). Topic: 16 2/3 exemption. 

8. COALEX STATE INQUIRY REPORT - 134, "16 2/3 exemption" (1990). [Updates 

earlier Reports] 

9. COALEX COMPARISON REPORT - 113, "Definitions of soil and mineral" (June, 

1989). 

10.COALEX STATE INQUIRY REPORT - 182, "Definition of soil and mineral" 

(1991). [Includes 113] 
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

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11.COALEX STATE INQUIRY REPORT - 191, "Is fill dirt considered a 'mineral' for 

regulatory purposes? [Includes Reports 24, 47, 113, 134 and 182] 

12.JDG, INC. v OSM, 107 IBLA 210, IBLA 87-158 (1989). 

13.ROBERT L. CLEWELL et al., 123 IBLA 253, IBLA 91-321 (1992).