56908 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation 

and Enforcement 

30 CFR Parts 870 and 872

RIN 1029–AC47

Coal Production Fees and Fee 

Allocation; Republication

Editorial Note: Federal Register Proposed 

Rule document 04–20998 was published 

originally in the Federal Register of Friday, 

September 17, 2004 at 69 FR 56132. In the 

paper edition of the September 17 issue, page 

56132 appeared as a blank page, due to a 

technical malfunction. The online edition of 

the Federal Register was not affected. A 

complete version of the document appears on 

page 56132 in both the HTML and PDF 

versions posted online on GPO Access

(http://www.gpoaccess.gov/fr/index.html). 

The corrected document is republished in its 

entirety.

AGENCY: Office of Surface Mining 

Reclamation and Enforcement (OSM), 

Interior.

ACTION: Proposed rule.

SUMMARY: This rule sets forth the criteria 

and procedures that we are proposing to 

use to establish fees under the 

abandoned mine reclamation program 

provisions of the Surface Mining 

Control and Reclamation Act of 1977 

(SMCRA or the Act). The fixed-rate fees 

established under SMCRA expire 

September 30, 2004. However, the Act 

requires that, for coal produced after 

that date, fees be established to continue 

to provide for transfers from the 

Abandoned Mine Reclamation Fund 

(the AML Fund or the Fund) to the 

Combined Benefit Fund (the Combined 

Fund or CBF). This proposed rule 

would implement that requirement in 

part. We are also publishing a final rule 

in today’s Federal Register that mirrors 

the fee establishment criteria and 

procedures in this proposed rule and 

establishes a fee for the fiscal year 

beginning October 1, 2004. Comments 

received on this proposed rule will 

assist us in determining whether to 

modify that final rule. We are also 

proposing to revise our regulations 

governing allocation and disposition of 

the fees collected and of other AML 

Fund income.

DATES: Electronic or written comments:

We will accept written comments on the 

proposed rule until 4:30 p.m., Eastern 

time, on or by November 16, 2004. 

Public hearing: If you wish to testify 

at a public hearing, you must submit a 

request on or before 4:30 p.m., eastern 

time, on October 18, 2004. We will hold 

a public hearing only if there is 

sufficient interest. Hearing 

arrangements, dates and times, if any, 

will be announced in a subsequent 

Federal Register notice. If you are a 

disabled individual who needs special 

accommodation to attend a public 

hearing, please contact the person listed 

under FOR FURTHER INFORMATION

CONTACT.

ADDRESSES: If you wish to comment on 

this proposed rule, you may submit 

your comments by any of the following 

methods to the address indicated: 

• E-mail: osmregs@osmre.gov. Please 

include docket number 1029–AC47 in 

the subject line of the message. 

• Mail/Hand-Delivery/Courier: Office 

of Surface Mining Reclamation and 

Enforcement, Administrative Record, 

Room 210, 1951 Constitution Avenue, 

NW., Washington, DC 20240. Please 

identify the comments as pertaining to 

docket number 1029–AC47. 

• Federal e-Rulemaking Portal:

http://www.regulations.gov. Follow the 

instructions provided at http://

www.regulations.gov under the ‘‘How to 

Comment’’ heading for this rule. 

You may submit a request for a public 

hearing on the proposed rule to the 

person and address specified under FOR

FURTHER INFORMATION CONTACT. If you 

are disabled and require special 

accommodation to attend a public 

hearing, please contact the person listed 

under FOR FURTHER INFORMATION

CONTACT.

FOR FURTHER INFORMATION CONTACT:

Dennis Rice, Office of Surface Mining 

Reclamation and Enforcement, 1951 

Constitution Avenue, NW., Washington, 

DC 20240. Telephone: (202) 208–2829. 

E-mail address: drice@osmre.gov. You 

will find additional information 

concerning OSM, fees on coal 

production, the Abandoned Mine 

Reclamation Fund, and abandoned mine 

reclamation in general on our home 

page at http://www.osmre.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents 

I. Background information 

A. What Is the History of the SMCRA Fee 

on Coal Production? 

B. What Is the Combined Benefit Fund? 

C. Why Do We Transfer Monies From the 

AML Fund to the CBF and How Do We 

Determine the Amount To Transfer? 

II. How Do We Propose To Determine the 

Total Amount of Fees To Collect Each 

Year? 

III. How Are We Proposing To Revise 30 CFR 

Part 870? 

IV. What Alternatives Did We Consider in 

Developing the Proposed Changes to 30 

CFR Part 870? 

V. What Is the Rationale for the Cap on 

Annual Transfers to the CBF? 

VI. What Would the Fees Be Under This 

Proposed Rule for Coal Produced After 

September 30, 2004? 

VII. How Would the Fees Collected for Coal 

Produced After September 30, 2004, Be 

Used? 

VIII. How Else Are We Proposing To Revise 

the AML Fund Rules in 30 CFR 872.11? 

IX. Why Are We Publishing a Final Rule at 

the Same Time as This Proposed Rule? 

X. How Do I Submit Comments on the 

Proposed Rule? 

XI. Procedural Matters

I. Background Information 

A. What Is the History of the SMCRA 

Fee on Coal Production? 

Title IV SMCRA created an 

abandoned mine land reclamation 

program funded by a fee, known as the 

reclamation fee, assessed on each ton of 

coal produced for sale, transfer, or use 

(‘‘produced’’). The fees collected are 

placed in the AML Fund. We, either 

directly or through grants to States and 

Indian tribes with approved AML 

reclamation plans under SMCRA, use 

appropriations from the Fund primarily 

to reclaim lands and waters adversely 

impacted by mining conducted before 

the enactment of SMCRA and to 

mitigate the adverse impacts of mining 

on individuals and communities. In 

addition, subject to appropriation, up to 

$10 million per year may be used for the 

small operator assistance program under 

section 507(c) of SMCRA, which pays 

for certain costs involved with the 

preparation of coal mining permit 

applications under Title V of SMCRA. 

Also, since Fiscal Year (FY) 1996, an 

amount equal to the interest earned by 

and paid to the Fund has been available 

for direct transfer to the United Mine 

Workers of America Combined Benefit 

Fund to defray the cost of providing 

health care benefits for certain retired 

coal miners and their dependents. 

Section 402(a) of SMCRA and existing 

30 CFR 870.13 fix the reclamation fee at 

35 cents per ton (or 10 percent of the 

value of the coal, whichever is less) for 

surface-mined coal other than lignite; 15 

cents per ton (or 10 percent of the value 

of the coal, whichever is less) for coal 

from underground mines; and 10 cents 

per ton (or 2 percent of the value of the 

coal, whichever is less) for lignite. 

Under section 402(b) of SMCRA, our 

authority to collect fees at those rates 

will expire with respect to coal 

produced after September 30, 2004, as 

will our authority to collect fees for 

AML reclamation purposes. However, 

unappropriated monies remaining in the 

Fund after that date will remain 

available for grants to State and tribal 

AML reclamation programs and the 

other purposes for which the AML Fund 

was established. 

Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 56909

As originally enacted, section 402 of 

SMCRA authorized collection of 

reclamation fees for 15 years following 

the date of enactment (August 3, 1977), 

meaning that our fee collection 

authority would have expired August 3, 

1992. However, Congress has twice 

extended that deadline. As enacted on 

November 5, 1990, Section 6003(a) of 

the Omnibus Budget Reconciliation Act 

of 1990 (Pub. L. 101–508, 104 Stat. 

1388) extended both the fees and our fee 

collection authority through September 

30, 1995. Section 6002(c) of that law 

also required that the Fund be invested 

in interest-bearing public debt 

securities, with the interest becoming 

part of the Fund. Section 19143(b) of 

Title XIX of the Energy Policy Act of 

1992 (Pub. L. 102–486, 106 Stat. 2776, 

3056) subsequently extended the fees 

and our fee collection authority through 

September 30, 2004. 

Section 2515 of Title XXV of the 

Energy Policy Act (106 Stat. 2776, 3113) 

further amended section 402(b) of 

SMCRA by adding the requirement that, 

after September 30, 2004, ‘‘the fee shall 

be established at a rate to continue to 

provide for the deposit referred to in 

subsection (h) [of section 402 of 

SMCRA].’’ See 30 U.S.C. 1232(b). The 

rule that we are proposing today would 

implement this provision of SMCRA by 

establishing criteria and procedures for 

establishment of the fee for coal 

produced on or after October 1, 2004. 

B. What Is the Combined Benefit Fund? 

The Energy Policy Act of 1992 also 

included provisions known as the Coal 

Industry Retiree Health Benefit Act of 

1992 (the Coal Act), which is codified 

at 26 U.S.C. 9701, et seq. See Public Law 

102–486, 106 Stat. 2776, 3036. The Coal 

Act created the United Mine Workers of 

America (UMWA) Combined Fund or 

CBF by merging two financially 

troubled health care plans, the UMWA 

1950 Benefit Plan and Trust and the 

UMWA 1974 Benefit Plan and Trust, 

effective February 1, 1993. See 26 U.S.C. 

9702. The CBF is a private employee 

benefit trust fund that provides health 

care and death benefits to UMWA coal 

industry retirees and their dependents 

and survivors who were both eligible to 

receive and were receiving benefits from 

the 1950 Benefit Plan or the 1974 

Benefit Plan on July 20, 1992. See 26 

U.S.C. 9703(f). Most current 

beneficiaries are widows and 

dependents of coal miners. The CBF 

health insurance plan provides 

‘‘Medigap’’ coverage; i.e., it pays for 

health care expenses remaining after 

Medicare and Medicaid reimbursement 

and covers prescription drugs. 

Under the Coal Act, the Social 

Security Administration (SSA) has the 

duty of assigning retirees and their 

dependents to former employers or 

related companies. See 26 U.S.C. 9706. 

Coal operators and related companies 

pay monthly premiums (also 

determined by the SSA) to the CBF to 

cover the costs of benefits for the 

beneficiaries assigned to them. In 

addition, under 26 U.S.C. 9704(a)(3), 

those companies must pay a monthly 

premium for the health care costs of 

eligible unassigned beneficiaries; i.e., 

those beneficiaries associated with nowdefunct coal operators for which no 

related company exists or remains in 

business. However, as discussed in Part 

I.C. below, Congress created a 

mechanism to wholly or partially offset 

premium costs for unassigned 

beneficiaries by transferring an amount 

equal to certain interest earned by the 

AML Fund to the CBF. 

C. Why Do We Transfer Monies From 

the AML Fund to the CBF and How Do 

We Determine the Amount To Transfer? 

In paragraphs (a) and (b) of section 

19143 of the Energy Policy Act of 1992, 

respectively, Congress amended the 

Internal Revenue Code of 1986 and 

SMCRA to require that, at the beginning 

of each fiscal year, starting with FY 

1996, an amount equal to the AML 

Fund’s estimated interest earnings for 

that year be transferred to the CBF to 

help defray the cost of health care 

benefits for unassigned beneficiaries. 

See section 402(h) of SMCRA (30 U.S.C. 

1232(h)) and section 9705(b) of the 

Internal Revenue Code (26 U.S.C. 

9705(b)). See also Public Law 102–486, 

106 Stat. 3047 and 3056. 

Section 9705(b)(2) of the Internal 

Revenue Code provides that any amount 

transferred to the CBF under section 

402(h) of SMCRA ‘‘shall be used to 

proportionately reduce the unassigned 

beneficiary premium under section 

9704(a)(3) of each assigned operator for 

the plan year in which transferred.’’

However, to the extent that these 

transfers do not fully cover costs for 

unassigned beneficiaries, assigned 

operators remain obligated to pay the 

difference under 26 U.S.C. 9704(a)(3) 

and (d)(3)(A). 

Section 402(h) of SMCRA (30 U.S.C. 

1232(h)) states that—

(1) In the case of any fiscal year beginning 

on or after October 1, 1995, with respect to 

which fees are required to be paid under this 

section, the Secretary shall, as of the 

beginning of such fiscal year and before any 

allocation under subsection (g), make the 

transfer provided in paragraph (2). 

(2) The Secretary shall transfer from the 

[AML] fund to the United Mine Workers of 

America Combined Benefit Fund established 

under section 9702 of the Internal Revenue 

Code of 1986 for any fiscal year an amount 

equal to the sum of—

(A) the amount of interest which the 

Secretary estimates will be earned and paid 

to the Fund during the fiscal year, plus 

(B) the amount by which the amount 

described in subparagraph (A) is less than 

$70,000,000. 

(3)(A) The aggregate amount which may be 

transferred under paragraph (2) for any fiscal 

year shall not exceed the amount of 

expenditures which the trustees of the 

Combined Fund estimate will be debited 

against the unassigned beneficiaries premium 

account under section 9704(e) of the Internal 

Revenue Code of 1986 for the fiscal year of 

the Combined Fund in which the transfer is 

made. 

(B) The aggregate amount which may be 

transferred under paragraph (2)(B) for all 

fiscal years shall not exceed an amount 

equivalent to all interest earned and paid to 

the fund after September 30, 1992, and before 

October 1, 1995. 

(4) If, for any fiscal year, the amount 

transferred is more or less than the amount 

required to be transferred, the Secretary shall 

appropriately adjust the amount transferred 

for the next fiscal year.

In sum, section 402(h)(2)(A) of 

SMCRA requires an annual transfer of 

estimated interest earnings from the 

AML Fund to the CBF. Paragraphs 

(h)(2)(B) and (3)(B) of section 402 

require the transfer of an additional 

amount from a reserve (the interest 

earned on the AML Fund between FY 

1993 and FY 1995) if the estimated 

interest earnings during the fiscal year 

will not cover eligible estimated CBF 

expenditures for that year. However, as 

explained further below, the amounts in 

the reserve fund were fully utilized in 

FY 2003 and no longer are available to 

supplement the annual transfer. In 

addition, the total amount transferred 

under paragraphs (h)(2)(A) and (B) for 

any one year may not exceed $70 

million, as discussed more fully in Part 

V below. 

The section 402(h)(2)(A) transfer is 

further limited by section 402(h)(3)(A), 

which precludes the transfer of monies 

to the CBF in excess of the CBF’s yearly 

costs for health benefits for unassigned 

beneficiaries. However, under a 

memorandum of understanding between 

OSM and the CBF trustees, which was 

signed on January 19, 2001, the amount 

transferred is not limited to estimated 

costs based on premium amounts 

determined by the SSA—it includes all 

actual health care expenditures for all 

unassigned beneficiaries, up to the 

amount authorized in section 402(h)(3) 

of SMCRA (subject to the $70 million 

cap). This approach reflects language in 

the conference report accompanying the 

FY 2001 appropriations bill for Interior 

56910 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

and related agencies. Page 200 of that 

report (H.R. Rep. No. 106–914) states:

As a general matter, the managers note that 

it has been the practice for the amount of the 

annual interest transfers under current law to 

be based on a calculation which multiplies 

the number of unassigned beneficiaries by 

that year’s per beneficiary premium rate 

established by the Social Security 

Administration (SSA) with adjustments made 

later (normally two years after the initial 

transfer) to reflect the Combined Benefit 

Fund’s actual expenditures for unassigned 

beneficiaries. This practice has an adverse 

effect on the Combined Benefit Fund’s cash 

flow and is contributing to its financial 

difficulties. * * * The managers believe that 

the interest transfer at the beginning of each 

fiscal year should be based on the Combined 

Benefit Fund trustees’ estimate of the year’s 

actual expenditures for unassigned 

beneficiaries, which may be adjusted to the 

actual amount of those expenditures at a later 

time if the initial transfer proves to be either 

too high or too low. This approach is 

completely consistent with the underlying 

statutory provision found in section 402(h) of 

the Surface Mining Control and Reclamation 

Act of 1977 which provides that the amount 

of interest transferred ‘‘shall not exceed the 

amount of expenditures that the trustees of 

the Combined Fund estimate will be debited 

against the unassigned beneficiaries premium 

account.’’

The transfer from the AML Fund to 

the CBF occurs at the beginning of the 

fiscal year based on our estimate of 

interest the AML Fund will earn during 

the fiscal year and the CBF trustees’

estimate of their health care 

expenditures for unassigned 

beneficiaries for that year. After the 

close of the fiscal year, we adjust the 

amount of the transfer to reflect actual 

interest earnings and CBF expenditures. 

There is no statute of limitations on 

adjustments to the number of 

beneficiaries. Therefore, several 

adjustments to the transfer for a 

particular year may be made in 

following years as figures are refined 

(usually as a result of bankruptcies and 

litigation), provided that the statutory 

transfer cap of $70 million for that year 

has not been reached. For example, our 

transfer in FY 2002 included 

adjustments to our first transfer in FY 

1996.

II. How Do We Propose To Determine 

the Total Amount of Fees To Collect 

Each Year? 

As explained above, section 402(b) of 

SMCRA requires the establishment of a 

fee ‘‘to continue to provide for the 

deposit referred to in subsection (h)’’ of 

SMCRA. We interpret that language as 

requiring establishment of a fee that will 

generate revenue up to, but not more 

than, the amount of net interest that the 

AML Fund is anticipated to earn in the 

coming fiscal year, subject to certain 

limitations described in detail below. 

This interpretation gives meaning to the 

section 402(b) requirement that some 

‘‘rate’’ be established. Furthermore, this 

reading construes the phrase ‘‘deposit 

referred to subsection (h)’’ in section 

402(b) to mean only what is currently 

provided for in section 402(h) (i.e., the 

transfer of an amount of money equal to 

estimated AML Fund interest earnings 

subject to the ‘‘caps’’ described below) 

and nothing more. 

The legislative history of paragraphs 

(b) and (h) of section 402 sheds little 

light on congressional intent with 

respect to the amount of fees to be 

collected for coal produced after 

September 30, 2004. The provision in 

section 402(b) concerning postSeptember 30, 2004, fees appears to 

have originated in two bills introduced 

in 1992 in the 102nd Congress. Those 

bills, H.R. 4344 and H.R. 776, both 

included a version of section 402(h) that 

would have required an annual transfer 

of $50 million from the AML Fund to 

the CBF. However, H.R. 4344 was never 

adopted, and the House removed the 

CBF transfer provisions from H.R. 776 

prior to passage. In acting on H.R. 776, 

the Senate added a variation of the 

provisions that the House had removed. 

However, instead of authorizing the 

transfer of $50 million from the AML 

Fund to the CBF each year as in the 

prior House version of section 402(h), 

the Senate version authorized transfer 

only of an amount equal to interest 

earned or estimated to be earned by the 

Fund. See 138 Cong. Rec. 10558, July 

29, 1992. The Senate did not make any 

conforming changes to section 402(b). 

The House subsequently accepted the 

Senate version without change and the 

provisions became law as part of the 

Energy Policy Act of 1992. 

Thus, the rationale for the fee 

collection target in section 870.13(b)(2) 

of the proposed rule that we are 

publishing today is the plain language 

of the statute and the absence of any 

legislative history to support a contrary 

reading. Section 402(b) of SMCRA 

provides that, after September 30, 2004, 

‘‘the fee shall be established at a rate to 

continue to provide for the deposit 

referred to in subsection (h).’’ Section 

402(h) of the Act lists two components 

of the deposit: 

(1) An estimate of the interest that 

will be earned by and paid to the AML 

Fund during the fiscal year (paragraph 

(h)(2)(A)); and 

(2) A ‘‘supplement’’ to increase that 

amount to $70 million if necessary 

(paragraph (h)(2)(B)), but with a cap on 

the total amount of the supplement for 

‘‘all fiscal years’’ equal to the interest 

earned and paid to the AML Fund from 

October 1, 1992 to September 30, 1995 

(paragraph (h)(3)(B)), and further 

capped by the needs of the CBF 

(paragraph (h)(3)(A)). 

The supplement referenced in 

paragraph (h)(2)(B) is no longer 

available because the cap in paragraph 

(h)(3)(B) has been reached. By its terms, 

the cap applies to ‘‘all fiscal years’’

without any limitation. There is nothing 

in the legislative history to suggest that 

in section 402(b) Congress meant to 

refer only to certain portions of section 

402(h). That is, we have no indication 

that Congress intended to continue the 

supplement in paragraph (h)(2)(B) 

without regard to the cap on that 

supplement in paragraph (h)(3)(B)). 

Moreover, the cap resulted in a transfer 

from the AML Fund to the CBF of only 

$49.8 million in FY 2004, which was 

based only on the estimate of interest 

that the Fund would earn in FY 2004. 

There was no supplement provided to 

raise that amount because the 

supplement already was exhausted. It 

would be anomalous to suggest that 

Congress intended for the cap in 

paragraph (h)(3)(B) to apply to the 

transfer in FY 2004 (as it did), but not 

in FY 2005, when the plain language of 

that paragraph applies the cap to ‘‘all 

fiscal years.’’

In sum, at this time nothing in 

SMCRA authorizes transfer of any 

monies to the CBF in excess of an 

amount equal to estimated interest 

earnings for that year (adjusted in future 

years to reflect actual interest earnings). 

Furthermore, there is no indication in 

the legislative history of sections 402(b) 

and (h) that Congress intended 

otherwise. 

Therefore, the reference in section 

402(b) to ‘‘the deposit referred to in 

subsection (h)’’ is best read as meaning 

that the fees established for coal 

produced after September 30, 2004, 

must be designed to generate an amount 

of revenue equal to the estimated 

interest earnings transferred to the CBF 

at the beginning of each fiscal year, with 

any modifications needed to reflect the 

true-up adjustments required by section 

402(h)(4). 

For the reasons discussed above, we 

believe that the proposed rule is a 

reasonable reconciliation of the 

statutory language with congressional 

intent as evidenced by the legislative 

history. 

III. How Are We Proposing To Revise 

30 CFR Part 870? 

As discussed in Part IX of this 

preamble, we are publishing a final rule 

in today’s Federal Register that adopts 

the same changes to Part 870 that we are 

Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 56911

proposing in this rule and puts them 

into effect immediately. However, we 

will fully consider all comments that we 

receive on this proposed rule. If we 

determine that changes are needed in 

response to those comments, we will 

issue a new final rule containing the 

appropriate modifications. As 

mentioned in Part IX, we seek comment 

on whether those changes should be 

effective as of October 1, 2004. 

We are proposing to revise 30 CFR 

870.13 by—

• Changing the section heading from 

‘‘Fee computations’’ to ‘‘Fee rates’’; 

• Redesignating existing paragraphs 

(a) through (d) as paragraphs (a)(1) 

through (4); 

• Adding a new title and introductory 

language for paragraph (a) to clarify that 

the rates in that paragraph apply only to 

fees for coal produced on or before 

September 30, 2004; and 

• Adding a new paragraph (b), which 

would establish criteria and procedures 

for use in establishing fees for coal 

produced after September 30, 2004. 

In addition, in a conforming technical 

change, we are proposing to revise 30 

CFR 870.12(d) to remove the September 

30, 2004, expiration date for fee 

payment obligations.

Proposed paragraph 870.13(b) would 

implement in part the provision in 

section 402(b) of SMCRA that requires 

that, after September 30, 2004, ‘‘the fee 

shall be established at a rate to continue 

to provide for the deposit referred to in 

subsection (h).’’ As discussed in Part 

I.C. above, section 402(h) of SMCRA 

essentially requires the transfer from the 

AML Fund to the CBF, at the beginning 

of each fiscal year, of an amount equal 

to estimated AML Fund interest 

earnings during that year to defray the 

cost of health care benefits for the plan’s 

unassigned beneficiaries. Those 

transfers effectively are capped at the 

estimated AML Fund interest earnings 

for that year, $70 million, or the CBF’s 

estimated expenditures for health care 

benefits for unassigned beneficiaries for 

that year, whichever is the smallest 

amount. Therefore, effective October 1, 

2004, we must determine the fee based 

on the amount of the transfer from the 

AML Fund to the CBF. 

We recognize that section 402(h) of 

SMCRA does not expressly require 

adjustments to reflect differences 

between estimated and actual AML 

Fund interest earnings and estimated 

and actual CBF expenditures for 

unassigned beneficiaries. Paragraphs 

(h)(1), (2), and (3) of section 402 refer 

only to the use of estimates when 

determining the amount required to be 

transferred. However, section 402(h)(4) 

of the Act provides that, ‘‘[i]f, for any 

fiscal year, the amount transferred is 

more or less than the amount required 

to be transferred, the Secretary shall 

appropriately adjust the amount 

transferred for the next fiscal year.’’ In 

our view, that provision essentially 

requires that the Secretary adjust the 

amount transferred to reflect any 

difference between the estimates used to 

determine the transfer amount at the 

beginning of the year and actual data for 

that year, as determined at a later date. 

Otherwise, section 402(h)(4) would have 

no real meaning, which would conflict 

with established principles of statutory 

construction. We invite comment on 

whether there is any other interpretation 

that would give effective meaning to 

section 402(h)(4). If so, we may 

reconsider adoption of proposed 30 CFR 

870.13(b)(2)(ii). 

Proposed paragraph 870.13(b)(1) 

would require us to establish fees on an 

annual basis. We selected this frequency 

because the amount transferred to the 

CBF each year will vary. We would 

publish the fees for each fiscal year after 

FY 2005 in the Federal Register at least 

30 days before the start of the fiscal year 

to which the fees would apply. 

Although not specified in the rule, we 

also would provide notice of the new 

fees by modifying the Abandoned Mine 

Land Payer Handbook (http://

ismdfmnt5.osmre.gov), revising the 

OSM–1 form, and issuing Payer Letters 

to permittees. 

Under the proposed rule, once we 

publish the fees for a given fiscal year, 

they would not change during that year. 

Later in this preamble we explain how 

we would make adjustments for 

differences between the estimates (for 

factors as interest earnings and coal 

production) used to establish the fees 

and actual data once the actual data 

becomes available. 

Proposed paragraph 870.13(b)(2) of 

the rule essentially would require that 

each year’s fee be established to 

generate an amount of revenue equal to 

the amount of estimated AML Fund 

interest earnings that will transfer from 

the AML Fund to the trustees of the CBF 

at the beginning of that year under 

section 402(h) of SMCRA. Consistent 

with paragraphs (h)(2)(B) and (h)(3)(A) 

of section 402 of SMCRA (see Part V of 

this preamble), paragraph (b)(2)(i) of the 

rule would cap the amount of estimated 

interest earnings transferred—and hence 

the total amount of fee collections 

needed—at the lesser of either $70 

million or the amount that the trustees 

of the CBF estimate will be debited 

against the unassigned beneficiaries 

premium account under section 9704(e) 

of the Internal Revenue Code of 1986 

(26 U.S.C. 9704(e)) for that fiscal year. 

Under proposed section 870.13(b)(2), 

calculation of the total amount of fee 

collections needed would be a threestep process. First, under proposed 

paragraph (b)(2)(i), we would estimate 

the amount that must be transferred to 

the CBF at the beginning of that fiscal 

year. We would compare the net amount 

of interest the AML Fund is estimated 

to earn during that fiscal year, the most 

recent estimate from the CBF trustees of 

their needs for unassigned beneficiaries 

for that year, and the statutory cap of 

$70 million. The estimated transfer 

amount would be the smallest of the 

three numbers. 

The second step, under proposed 

paragraph (b)(2)(ii), would be to adjust 

the estimated transfer amount to 

account for overcollections or 

undercollections in prior years. SMCRA 

requires us to establish a fee that will 

provide for the transfer under section 

402(h). As explained above, the initial 

transfer to the CBF under that section of 

the Act is based on estimates of AML 

Fund interest earnings and the CBF’s 

needs for unassigned beneficiaries 

during that year. After the close of the 

fiscal year, the amount of the transfer is 

adjusted to reflect actual interest 

earnings (and, if necessary, actual CBF 

expenditures) when that data becomes 

available. As explained more fully 

below, any difference between 

estimated and actual data would not 

result in a revision of the previously 

established fee for that year. We would 

account for any excess fees collected, or 

any deficiencies, by adjusting the next 

fee scheduled to be determined. 

For example, if we underestimate 

interest earnings, we would transfer the 

difference to the CBF, provided the CBF 

needs that amount for expenditures 

from the unassigned beneficiary 

premium account during that year and 

the transfer would not exceed the $70 

million statutory cap. We would then 

need to increase fee collections in the 

following year to recover the additional 

amount transferred. On the other hand, 

if we overestimate interest earnings or if 

the CBF’s expenditures were lower than 

the original amount transferred, the CBF 

would refund the difference and we 

would need to address the excess 

amount of fees collected. However, this 

requirement would apply only to 

adjustments for fiscal years after FY 

2004. Therefore, if we determine in FY 

2005 that we underestimated FY 2003 

interest earnings by $10 million, we 

would not include that adjustment in 

the fee calculation for FY 2006 (i.e., we 

would not increase the fee collection 

needs for FY 2006 by $10 million), 

although we would send the $10 million 

to the CBF. 

56912 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

The third step under proposed 

paragraph (b)(2)(iii) would be to adjust 

the estimated transfer amount to reflect 

differences between estimated and 

actual coal production in prior years. As 

explained above, the fee calculation for 

a fiscal year would essentially be a 

fraction. The numerator would be the 

amount of total fees to be collected for 

that fiscal year (with all adjustments), 

and the denominator would be based on 

our estimate of coal production for that 

year. If we overestimate production, the 

calculated per-ton fee would be too low 

and we would undercollect for that 

year. Conversely, if we underestimate 

production, the calculated per-ton fee 

would be too high and we would 

overcollect for that year. Therefore, just 

like when we adjust the estimated 

interest and CBF needs to actual in step 

two, when we obtain actual production 

figures for fiscal years after October 1, 

2004, we would calculate the fees we 

overcollected or undercollected and that 

number would become an adjustment in 

the next fee calculation.

We identified two options to remedy 

fee undercollections and 

overcollections. Under the first option, 

we would recalculate the fee and have 

all operators submit amended reports 

with additional payments or requests for 

credit or refund. We find this option 

impractical for several reasons. First, it 

would impose a huge paperwork burden 

on both operators and OSM. Second, we 

often make several adjustments over a 

number of years as actual data become 

available for comparison with the 

estimates used to establish the fees. 

Therefore, multiple supplemental 

reports would be required. Third, the 

adjustments likely would be very small 

(fractions of a cent), so the cost to 

operators and OSM of accounting for 

adjustments may exceed the dollar 

value of the adjustment. For all these 

reasons, we propose to reject this 

option. Under this proposed rule, we 

would not change the fee for a given 

fiscal year after we publish that fee in 

the Federal Register. 

Instead, we are proposing to adopt the 

second possible approach to account for 

adjustments. Under that approach, we 

would adjust fee calculations for future 

years to account for adjustments to 

transfers in prior years. However, we 

would not adjust the fee calculations for 

future years when the transfer 

adjustments relate to FY 2004 or earlier 

fiscal years. Adjustments for transfers in 

those years would be inappropriate 

because the fee was statutorily set for 

those years. 

The following example illustrates 

how this process would work: Assume 

estimated AML Fund interest earnings 

for FY 2008 are $60 million and the 

CBF’s estimated unassigned beneficiary 

needs are $85 million. Under that 

scenario, the amount transferred to the 

CBF would be $60 million. Under 

paragraph (b)(2)(i) of the proposed rule, 

that amount also would be the starting 

point for our fee calculations for FY 

2008. Assume further that in FY 2006 

we overestimate AML Fund interest 

earnings by $3 million, which means 

that fee collections for FY 2006 are $3 

million higher than they should have 

been. To correct this situation, we 

would subtract the $3 million 

overcollection for FY 2006 from the $60 

million estimated transfer in FY 2008, 

thereby reducing fees collected for that 

year. Hence, in FY 2008 operators as a 

group would recover the $3 million fee 

overcollection in FY 2006. 

If there are multiple adjustments for 

more than one prior fiscal year, they all 

would be incorporated in the next fee 

calculation. In addition, if we later find 

that further adjustments are needed for 

a previously adjusted fiscal year, we 

would account for that adjustment in 

the next fee calculation. Thus, returning 

to the example in the previous 

paragraph, if we determine in FY 2008 

that FY 2006 interest was overestimated 

by $4 million, not $3 million, we would 

adjust the next scheduled fiscal year’s 

fee calculation (i.e., FY 2009) by the 

additional $1 million. 

Finally, if Congress were to 

specifically appropriate additional 

funds for transfer from the AML Fund 

to the CBF, that appropriation would 

not become part of the fee calculation 

process. Thus, for example, if, in the FY 

2007 appropriations act for the 

Department of the Interior, Congress 

designated a one-time $25 million 

supplemental payment to the CBF, we 

would not include that $25 million in 

the fee calculations for FY 2007. 

Proposed paragraph 870.13(b)(3) 

provides that we would determine perton fees after comparing the amount of 

the estimated transfer to the CBF (and 

hence the total amount of fee collections 

needed) with projected coal production 

for that fiscal year. Proposed paragraph 

(b)(3)(ii) specifies that the new fees 

would maintain the same 

proportionality among surface-mined 

coal, coal produced by underground 

mining, and lignite as did the fees 

previously in effect under section 402(a) 

of SMCRA. In section 402(a) of SMCRA, 

Congress originally established lower 

fees for lignite and for coal produced by 

underground methods than it did for 

non-lignite coal produced by surface 

mining methods. According to the 

legislative history, the lower fees for 

underground mining reflect the 

‘‘disproportionately high social costs 

incurred by underground coal mine 

operators in meeting responsibilities 

under the Coal Mine Safety and Health 

Act of 1969, as amended.’’ H.R. Rep. No. 

94–1445 (1976), at 85. Section 402(b) of 

SMCRA is silent on the question of 

whether this fee differential should 

continue to apply to coal produced after 

September 30, 2004. 

After evaluating those factors, we 

propose to retain the per-ton fee ratios 

that have been in place since the 

enactment of SMCRA. Therefore, under 

proposed paragraph (b)(3)(ii), the fee per 

ton of non-lignite coal produced by 

underground methods would be 43 

percent of the fee per ton of non-lignite 

coal produced by surface methods and 

the fee per ton of lignite coal produced 

would be 29 percent of the fee per ton 

of non-lignite coal produced by surface 

methods. The provision concerning fees 

for coal produced by in situ mining 

methods also would remain 

substantively unchanged from the rule 

governing fees for coal produced by in 

situ mining methods before October 1, 

2004, in that it would continue to apply 

the underground fee to all non-lignite 

coal produced by in situ methods and 

the lignite fee to lignite coal produced 

by in situ methods. 

IV. What Alternatives Did We Consider 

in Developing the Proposed Changes to 

30 CFR Part 870? 

In developing this proposed rule, we 

considered and rejected the following 

options to implement the provision of 

section 402(b) of SMCRA requiring the 

establishment of a fee for coal produced 

after September 30, 2004: 

• Set the fee at zero and transfer only 

estimated interest earnings. 

This option is inconsistent with the 

principles of statutory construction 

because it would render the section 

402(b) provision concerning 

establishment of post-September 30, 

2004, fee rates superfluous and 

essentially inoperative. See In re 

Surface Mining Regulation Litigation,

627 F.2d 1346, 1362 (D.C. Cir. 1980) (‘‘It 

is, however, a fundamental principal of 

statutory construction that ‘effect must 

be given, if possible, to every word, 

clause and sentence of a statute * * * 

so that no part will be inoperative or 

superfluous, void or insignificant.’ ’’), 

quoting from and citing to 2A 

Sutherland, Statutory Construction, at 

§ 46.06 (4th ed. 1973). See also Boise 

Cascade Corp. v. EPA, 942 F.2d 1427, 

1432 (9th Cir. 1991) (statutes should not 

be construed so as to render any of their 

provisions superfluous). In addition, a 

fee of zero likely would not satisfy the 

section 402(h)(1) requirement that 

Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 56913

transfers from the AML Fund to the CBF 

may be made only when ‘‘fees are 

required to be paid under this section.’’

Under this approach, the AML Fund 

and, consequently, the interest earned 

thereon, would decline the fastest. 

• Assess fees at a rate that would 

generate revenues adequate to maintain 

the AML Fund at a level that would 

earn an amount of interest sufficient to 

meet CBF needs for unassigned 

beneficiaries, up to a maximum of $70 

million.

• This option could be construed to 

comply with the requirement to 

establish a fee that provides for the 

transfer to the Combined Fund under 

section 402(h). However, to maintain 

the principal in the AML Fund at a level 

that would earn sufficient interest to 

continue to provide for transfers to the 

CBF at recent levels, the fees under this 

option could be almost equal to, or even 

higher than, the current fees. There is no 

evidence that, in enacting section 

402(b), Congress intended that the 

principal balance of the AML Fund 

would or should be maintained at a 

level adequate to generate interest 

sufficient to meet CBF needs. This 

option also could have the effect of 

indefinitely extending the AML 

reclamation program by requiring 

collection of fees to replace 

appropriations for grants to States and 

tribes for those programs. There is no 

evidence that Congress intended for fees 

collected from coal produced after 

September 30, 2004, to be used for this 

purpose. Instead, the fact that Congress 

terminated the statutorily established 

reclamation fee in section 402(a) as of 

September 30, 2004, suggests the 

opposite, as does the language in section 

402(b) that requires that, after 

September 30, 2004, the fee be 

established at a rate sufficient to 

continue to provide for transfers to the 

CBF. 

• Assess a fee at a rate sufficient to 

meet any deficit between anticipated 

CBF health care benefit needs for 

unassigned beneficiaries (or $70 

million, whichever is less) and the 

amount of estimated interest earnings 

transferred. 

There is insufficient statutory 

authority to implement this option 

because nothing in either the statutory 

language or the legislative history of 

SMCRA suggests that, in section 402(b), 

Congress intended for any transfers to 

be made to the CBF in excess of an 

amount equal to yearly estimated AML 

Fund interest earnings (plus the reserve 

supplement of prior interest earnings, 

which is now depleted). Moreover, it 

would be anomalous to suggest that 

Congress intended for the CBF to 

receive a transfer of funds in an amount 

equal to estimated interest earnings in 

FY 2004 (as it did) and then to receive 

transfers in excess of that amount in FY 

2005 and thereafter. 

V. What Is the Rationale for the Cap on 

Annual Transfers to the CBF? 

Proposed 30 CFR 870.13(b) and 

872.11(e) would cap the amount 

transferred to the CBF at the beginning 

of each fiscal year at the estimated 

amount of interest earned by the AML 

Fund, estimated CBF expenditures for 

health care benefits for unassigned 

beneficiaries, or $70 million, whichever 

is the smallest amount. The first two 

items would later be adjusted to reflect 

actual interest earnings and actual CBF 

expenditures for that fiscal year, 

provided the adjustments would not 

cause aggregate transfers for that year to 

exceed $70 million. This cap is 

consistent with both historical practice 

and section 402(h) of SMCRA. 

Paragraphs (3)(A) and (4) of section 

402(h) impose the cap relating to CBF 

expenditures. The $70 million cap 

receives implied support from section 

402(h)(2)(B) of SMCRA, which allows 

transfers of estimated interest earnings 

to be supplemented by prior interest 

earnings, but only up to a total transfer 

amount of $70 million. It also reflects 

the intent of Congress as described in 

the conference report on the Energy 

Policy Act. See 138 Cong. Rec. 17578, 

17605 (1992) (‘‘provision is made for 

monies to be transferred from the 

Abandoned Mine Land Fund in an 

amount up to, but not more than, $70 

million per year * * *’’). In addition, a 

report from the House Resources 

Committee on a bill approved by the 

Committee but never adopted by the full 

House characterizes section 402(h) in its 

entirety as allowing ‘‘the transfer to the 

CBF of not more than $70 million 

annually.’’ See H.R. Rep. No. 106–1014, 

pt. 1 (2000). 

VI. What Would the Fees Be Under This 

Proposed Rule for Coal Produced After 

September 30, 2004? 

Under proposed 30 CFR 870.13(b)(1), 

we would determine fees on an annual 

basis, with notice of the fees for each 

year published in the Federal Register

30 days before the beginning of the 

fiscal year to which they would apply. 

Part VII of the preamble to the final 

rule that we are publishing in today’s 

Federal Register establishes fees for FY 

2005. 

Table 1 shows the fees for FY 2005 

and our projection of fees for the 

following ten years based on this rule; 

on currently available estimates on 

interest rates, CBF needs, and coal 

production; and on maintaining current 

congressional appropriations, grant 

formulas, and AML Fund assets 

available for investment.

TABLE 1.—FEES FOR FY 2005 AND FEE PROJECTIONS FOR FY 2006–2015 

Fiscal year 

Estimated 

AML fund interest earnings

(millions of 

dollars) 

Estimated 

CBF needs for 

unassigned 

beneficiaries

(millions of 

dollars) 

Fees for nonlignite coal 

produced by 

surface

methods

(cents per 

short ton) 

Fees for nonlignite coal 

produced by 

underground 

methods

(cents per 

short ton) 

Fees for

lignite coal

(cents per 

short ton) 

2005 ..................................................................................... 69.0 85.0 8.8 3.8 2.5 

2006 ..................................................................................... 72.0 99.6 8.7 3.7 2.5 

2007 ..................................................................................... 71.9 97.9 8.5 3.7 2.4 

2008 ..................................................................................... 69.4 96.3 8.5 3.6 2.4 

2009 ..................................................................................... 65.8 94.1 7.8 3.4 2.2 

2010 ..................................................................................... 61.6 92.2 7.3 3.1 2.1 

2011 ..................................................................................... 22.1 90.1 2.6 1.1 0.7 

2012 ..................................................................................... 17.6 87.7 2.0 0.9 0.6 

2013 ..................................................................................... 14.2 85.4 1.6 0.7 0.5 

2014 ..................................................................................... 10.9 83.2 1.2 0.5 0.4 

2015 ..................................................................................... 46.4 81.0 5.2 2.2 1.5 

56914 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

In accordance with proposed 30 CFR 

870.13(b) and 872.11(e), the fees in 

Table 1 are based upon a maximum 

annual transfer to the CBF of $70 

million or the amount of estimated AML 

Fund interest earnings for that year, 

whichever is less. (The other limiting 

factor, estimated CBF needs for 

unassigned beneficiaries, does not come 

into play because those estimates are in 

excess of $70 million for all years 

shown in the table.) 

Because section 402(h)(2)(A) of 

SMCRA refers to the transfer of an 

amount equal to the estimated interest 

‘‘earned and paid to the Fund during the 

fiscal year,’’ we originally invested the 

Fund’s assets only in short-term 

securities so as to maximize the amount 

of interest actually paid to the Fund 

during each year. By so doing, we also 

maximized the amount available for 

transfer to the CBF. However, we 

reevaluated that policy when short-term 

interest rates declined to the point that 

the Fund was earning less than $70 

million in interest each year. We 

determined that interest on long-term 

securities could be deemed to be 

constructively earned and paid to the 

Fund on a prorated basis over the life 

of those securities even though it is not 

physically collected until the securities 

reach maturity. The estimated annual 

interest earnings reported in Table 1 

reflect this interpretation. After 

changing our policy, in FY 2004, we 

invested $1.3 billion of the Fund in 

long-term public debt securities with an 

average interest rate of 4.18 percent. 

That rate is significantly more than the 

minuscule returns (currently hovering 

around one percent) recently available 

on short-term securities. However, we 

anticipate that we will need to redeem 

those long-term securities before their 

maturity dates to meet future Fund 

obligations because Congress has not 

reauthorized collection of a fee for AML 

reclamation. Consequently, the net 

interest earnings shown in Table 1 for 

FY 2011–2014 reflect the early 

redemption penalties that we expect to 

incur in those years. In other words, we 

will need to subtract early redemption 

penalties from the total estimated 

interest earnings in each of those years. 

The increase in net interest earnings 

shown for FY 2015 reflects the fact that, 

based on current estimates and 

assumptions, as of the end of FY 2014, 

all long-term securities will have been 

redeemed and that we will therefore 

incur no further early redemption 

penalties. By that time, the AML Fund 

would be invested exclusively in shortterm securities and all estimated interest 

earnings on those securities would be 

available for transfer without first 

deducting any early redemption 

penalties for long-term securities. 

Table 2 contains the coal production 

estimates that we used to establish fees 

for FY 2005 and to estimate fees for the 

other years in Table 1.

TABLE 2.—ESTIMATED COAL PRODUCTION FOR COAL SUBJECT TO FEE PAYMENT REQUIREMENTS

[In millions of short tons] 

Fiscal year 

Non-lignite 

surface 

mines 

Underground 

mines Lignite Total 

2005 ......................................................................................................................... 628 317 82 1,027 

2006 ......................................................................................................................... 640 327 85 1,052 

2007 ......................................................................................................................... 651 335 87 1,073 

2008 ......................................................................................................................... 643 346 91 1,080 

2009 ......................................................................................................................... 672 340 86 1,098 

2010 ......................................................................................................................... 672 350 86 1,108 

2011 ......................................................................................................................... 680 346 86 1,112 

2012 ......................................................................................................................... 695 345 82 1,122 

2013 ......................................................................................................................... 707 352 82 1,141 

2014 ......................................................................................................................... 709 351 82 1,142 

2015 ......................................................................................................................... 723 359 82 1,164 

The total production estimates in 

Table 2 are based upon projections in 

the Annual Energy Outlook (December 

2003) prepared by the Energy 

Information Administration within the 

Department of Energy (DOE). We 

reduced those projections by ten percent 

to reflect our historical experience 

concerning the difference between DOE 

data and the tonnage subject to 

SMCRA’s fee payment requirements. 

Allocation among the three production 

categories (surface, underground, and 

lignite) is based upon an extrapolation 

of our fee collection data for FY 2003. 

VII. How Would the Fees Collected for 

Coal Produced After September 30, 

2004, Be Used? 

Section 401(b) of the Act provides 

that the AML Fund consists of 

‘‘amounts deposited in the fund,’’

including, among other things, 

‘‘reclamation fees levied under section 

402,’’ and ‘‘interest credited to the fund 

under subsection (e).’’ Thus, under 

section 401(b) of SMCRA, fees collected 

under section 402 of the Act must be 

deposited into the AML Fund. 

Consistent with this requirement, the 

proposed rule considers all fees 

collected to be Fund revenues. See

proposed 30 CFR 872.11(a). 

The proposed rule would not affect 

the process by which transfers are made 

between the AML Fund and the CBF. 

That process will remain the same as in 

previous fiscal years under applicable 

law and our agreements with the 

Treasury Department and the CBF 

trustees. 

Section 402(g) of the Act establishes 

an allocation formula that has been 

applied to date to the fees collected and 

to other AML Fund income. Fifty 

percent of the fees collected (but no 

other type of Fund income) was 

allocated to the appropriate State or 

tribal share account (‘‘State share’’ or 

‘‘Tribal share’’). The remaining fifty 

percent of the fees collected, together 

with all other Fund income (including 

interest), were allocated among three 

other accounts, which are sometimes 

referred to collectively as the ‘‘Federal 

share,’’ as follows: 

• Twenty percent to the Secretary of 

Agriculture for use under section 406 of 

the Act, which authorizes use of those 

funds for the rural abandoned mine 

program (RAMP). This account is 

known as the RAMP allocation. 

• Forty percent for supplemental 

AML reclamation grants to non-certified 

States and tribes, based on historical 

coal production before August 3, 1977. 

This account is known as the historical 

production allocation. 

• Forty percent for the other purposes 

of Title IV, including items such as the 

small operator assistance program, the 

Clean Streams program, the emergency 

Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 56915

reclamation program, reclamation of 

high priority AML sites in States and 

tribes without approved AML 

reclamation plans, minimum program 

makeup grants, and the cost of 

administering the AML program and 

collecting fees. This account is known 

as the Secretary’s discretionary share. 

The existing regulations at 30 CFR 

872.11(a) and (b) implement the 

statutory requirements discussed above. 

Under our proposed rule, fees collected 

for coal produced for sale, transfer, or 

use before October 1, 2004, would be 

allocated according to the statutory 

scheme. Similarly, any other Fund 

income listed in section 401(b) of 

SMCRA, including, but not limited to, 

interest, user charges, recovered monies, 

and donations, would continue to be 

allocated according to that scheme. 

However, we are proposing to add 

new paragraphs (d) and (e) to section 

872.11 to address the disposition of fees 

collected for coal produced for sale, 

transfer, or use after September 30, 

2004, and modify paragraphs (a) and (b) 

accordingly. Paragraph (d) would 

allocate fees collected for coal produced 

in any fiscal year beginning after 

September 30, 2004, only to the 

accounts from which the amount of the 

transfer to the CBF (as provided in new 

paragraph (e)) was taken at the 

beginning of that year. Fee collections 

would be distributed among the 

contributing accounts in amounts 

proportionate to which those accounts 

contributed to the transfer.

We are proposing to adopt this 

approach because we believe that the 

direction in SMCRA section 402(b) to 

establish the fee at a rate to provide for 

the CBF transfer conflicts with the 

allocation scheme in section 402(g) and 

that the two provisions cannot both be 

given effect. Section 402(b) states that, 

after September 30, 2004, ‘‘the fee shall 

be established at a rate to continue to 

provide for [transfers to the CBF].’’

SMCRA section 402(b), 30 U.S.C. 

1232(b). The only purpose of the fee 

after September 30, 2004, is to support 

the continued funding of the CBF. In 

this regard, any fees collected would 

effectively replace the amount 

transferred to the CBF. Thus, we believe 

that the section 402(b) requirement to 

establish a fee to provide for the CBF 

transfer provides us with a directive to 

put whatever fees are collected back 

into the account from which the transfer 

was taken. 

Transfers to the CBF after September 

2004 will take place in the manner 

illustrated by the following example for 

FY 2005. On or about October 1, 2004, 

we will direct the Treasury Department 

to transfer from the AML Fund to the 

CBF an amount equal to the amount of 

interest that is estimated to be earned by 

the Fund during FY 2005. We will note 

from which accounts the transferred 

funds were withdrawn. We will levy a 

fee on mine operators pursuant to 

section 402(b) of the Act, with the goal 

of achieving aggregate fee collections in 

an amount equal to the amount 

transferred to the CBF. The section 

402(b) directive can be construed as a 

requirement to use those fees, once 

collected, to replenish the accounts that 

contributed monies for the transfer to 

the CBF at the beginning of the year. 

We recognize that the section 402(g) 

allocation formula arguably conflicts 

with that requirement. However, we 

believe that it is anomalous to suggest 

that Congress intended, in requiring 

establishment of the fee based on the 

CBF transfer, to also require that the fees 

collected continue to be allocated in 

accordance with the formula established 

in section 402(g) of the Act. Thus, for 

fees from coal produced after September 

30, 2004, there is an inherent conflict 

between the direction in section 402(b) 

and the allocation scheme in section 

402(g). 

When there is an ambiguity that 

cannot be reconciled, the agency has 

discretion to reasonably interpret the 

statute. It is well-settled that when a 

court reviews an agency’s construction 

of a statute that the agency administers, 

the first question for the court is—

whether Congress has directly spoken to the 

precise question at issue. If the intent of 

Congress is clear, that is the end of the 

matter; for the court, as well as the agency, 

must give effect to the unambiguously 

expressed intent of Congress * * * [I]f the 

statute is silent or ambiguous with respect to 

the specific issue, the question for the court 

is whether the agency’s answer is based on 

a permissible construction of the statute.

Chevron, U.S.A., Inc. v. Natural Res. 

Def. Council, Inc., 467 U.S. 837, 842–43 

(1984) (footnotes omitted). 

Here, the question is whether 

Congress has directly spoken to the 

precise question at issue; i.e., whether 

the statute mandates the allocation of 

fees collected for coal produced after 

September 30, 2004, and, if not, whether 

an interpretation that such allocation is 

not required is reasonable. In this case, 

the statute does not unambiguously 

require allocation of these fees. 

Therefore, the agency may make the 

reasonable interpretation that fees 

collected pursuant to section 402(b) for 

transfer to the CBF are not required to 

be allocated pursuant to section 402(g). 

Our proposed addition of paragraph (d) 

to section 872.11 of our rules reflects 

this interpretation. 

VIII. How Else Are We Proposing To 

Revise the AML Fund Rules in 30 CFR 

872.11? 

We are proposing to reorganize 30 

CFR 872.11 to incorporate plain 

language principles and make the rules 

more user-friendly. Those changes are 

not substantive revisions. In addition, 

we are proposing to eliminate 

redundant or unnecessary language, 

improve clarity and consistency of 

terminology, consolidate provisions 

concerning interest, and add a 

paragraph reflecting the statutory 

requirements concerning transfers to the 

CBF. The most significant proposed 

changes (other than those discussed in 

Part VII of this preamble) are listed 

below: 

• Removal of the sentence from 30 

CFR 872.11(a)(6) providing that interest 

and other non-fee income to the Fund 

will be credited only to ‘‘the Federal 

share.’’ ‘‘Federal share’’ is an 

anachronistic term that refers to the 

structure of section 402(g) of SMCRA as 

originally enacted. At that time, there 

were only two types of accounts: State/

tribal share and the Secretary’s 

discretionary share. However, as part of 

the Abandoned Mine Reclamation Act 

of 1990 (Pub. L. 101–508, 104 Stat. 

1388–289 through 1388–299), Congress 

carved several other mandatory 

allocations (the RAMP allocation and 

the historical production allocation) 

from the original Secretary’s 

discretionary share. The preamble to 30 

CFR 872.11(a)(6), as revised on May 31, 

1994 (see 59 FR 28148–49), clarifies that 

the term Federal share refers to three 

separate allocations (RAMP, historical 

production, and the Secretary’s 

discretionary share), consistent with the 

changes that Congress made to section 

402(g) of the Act. 

Paragraph (b) of 30 CFR 872.11 also 

specifies that interest must be allocated 

among those three accounts. Therefore, 

we are proposing to remove this 

sentence from paragraph (a), both to 

eliminate any confusion that it may 

cause and because it is redundant to 

provisions in paragraph (b). 

Furthermore, the purpose of paragraph 

(a) is to identify all types of Fund 

revenues, not to allocate those revenues. 

Paragraph (b) addresses allocations. 

• Removal of language from 30 CFR 

872.11(a)(6), (b)(3), and (b)(4) that 

references transfers from the AML Fund 

to the CBF. Proposed new paragraph (e) 

would address those transfers in a 

comprehensive fashion. Specifically, 

consistent with paragraphs (g)(1) and 

(h)(1) of section 402 of SMCRA, 

proposed new paragraph (e)(4), like the 

language proposed for deletion, 

56916 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

specifies that the amount transferred the 

CBF is not subject to the allocation 

provisions of section 402(g) of the Act 

and 30 CFR 872.11(b). 

• Modification of the introductory 

language of paragraph (b) of section 

872.11 to clarify that that paragraph 

governs allocation of all Fund revenues 

(except fees collected for coal produced 

after September 30, 2004, and an 

amount of other revenues equal to 

monies transferred to the CBF), not just 

those appropriated by Congress. 

• Modification of the provision in 

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

872.11 concerning withdrawal of 

unexpended grant funds from States and 

Indian tribes to clarify that we will 

withdraw those funds only if the State 

or tribe no longer has any eligible and 

available abandoned mine sites to 

reclaim. This change is consistent with 

the explanation of the meaning of this 

provision in the preamble to the existing 

rule (see 59 FR 28150–51, May 31, 

1994). In relevant part, the preamble 

states at 59 FR 28151 that:

OSM’s practice since the beginning of the 

AML program is not to withdraw funds from 

the States/Indian tribes. Rather, funds which 

are not expended by a State/Indian tribe 

during the grant period are returned to the 

State/Indian tribe account for future grants.

Therefore, we are proposing in 

paragraphs (b)(1)(iii) and (2)(ii) to 

specify that unexpended grant funds 

will be reallocated only if the Director 

finds in writing that the amounts 

involved are not necessary to carry out 

reclamation activities on lands within 

the State or on Indian lands subject to 

the tribe’s jurisdiction.

• Modification of paragraph (b)(3) of 

section 872.11 to specify that, consistent 

with the provisions of section 402(g)(2) 

of SMCRA, the RAMP allocation 

consists of 20 percent of all Fund 

revenues (including available interest) 

remaining after making State and tribal 

share allocations. The existing rule 

assigns RAMP ten percent of all Fund 

revenues plus 20 percent of available 

interest earnings and other 

miscellaneous Fund receipts. 

• Removal of paragraph (b)(8) of 

section 872.11 as that paragraph merely 

duplicates the requirements of 

paragraph (b)(5)(iii). 

• Revision of paragraph (b)(5)(iv) of 

section 872.11 to adopt language more 

consistent with that of section 

402(g)(3)(D), which provides that money 

from the Secretary’s discretionary share 

may be used ‘‘[f]or the administration of 

this title by the Secretary.’’ Existing 

paragraph (b)(5)(iv) provides that the 

Secretary may use those monies for 

‘‘[a]dministration of the Abandoned 

Mine Land Reclamation Program.’’ To 

avoid any confusion about the scope of 

that provision, we are proposing to 

revise this paragraph to authorize 

expenditures for ‘‘[a]dministration of 

title IV of the Act and this subchapter 

[subchapter R of our regulations].’’

• Modification of paragraph (b)(7) of 

section 872.11 to replace references to 

statutory provisions with references to 

the corresponding provisions of our 

regulations. This change would make 

our regulations more specific and userfriendly as the reader would not have to 

flip through the statute and then 

compare those provisions to our 

regulations to determine their 

applicability. 

• Addition of a new paragraph (e) to 

section 872.11 to provide a partial 

counterpart in our regulations to the 

CBF transfer requirements of section 

402(h) of SMCRA and to clarify certain 

of those requirements, especially the 

applicability of the $70 million cap on 

annual transfers (see part V of this 

preamble). 

IX. Why Are We Publishing a Final 

Rule at the Same Time as This 

Proposed Rule? 

In this proposed rule, we are 

publishing and seeking comment on the 

same changes that we are making to 30 

CFR part 870 in a final rule published 

separately in today’s Federal Register. 

As explained in the preamble to the 

final rule, we are making those changes 

effective immediately because of the 

need to have a fee in place on October 

1, 2004, and ensure the continued 

transfer of monies to the Combined 

Benefit Fund. As discussed in parts VII 

and VIII of this preamble, the proposed 

rule also includes changes to 30 CFR 

part 872, the most significant of which 

would provide that the new fees need 

not be allocated under section 402(g) of 

SMCRA. After considering comments on 

the proposed rule, we may make 

changes to any or all of the provisions 

of this proposed rule. Because the 

proposed rule mirrors the final rule that 

we are adopting today with respect to 30 

CFR part 870, the public will have the 

opportunity to comment on all issues 

that we are addressing in both the 

proposed and final rules. However, the 

final rule that we are adopting today 

will remain in place until the effective 

date of any changes that we make. We 

invite comment on whether any changes 

that we make to 30 CFR part 870 as a 

result of comments received should be 

made effective as of October 1, 2004, to 

ensure that they apply during the 

entirety of FY 2005. 

X. How Do I Submit Comments on the 

Proposed Rule? 

Electronic or Written Comments 

Your comments should reference a 

specific portion of the proposed rule or 

preamble, explain the reason for any 

recommended change or objection, and 

include supporting data when 

appropriate. The most helpful 

comments are those that include 

citations to and analyses of SMCRA, its 

legislative history, its implementing 

regulations, case law, other pertinent 

Federal laws or regulations, technical 

literature, or other relevant publications 

or that involve personal experience. 

We will not consider anonymous 

comments, but you may request that 

identifying information be withheld as 

discussed below under ‘‘Availability of 

comments.’’ Please include the docket 

number for this rulemaking (1029–

AC47) at the beginning of all written 

comments and in the subject line of all 

electronic comments. Except for 

comments provided in electronic 

format, please submit three copies of 

your comments if practicable. 

Comments received after the close of the 

comment period (see DATES) or at 

locations other than those listed above 

under ADDRESSES will not be considered 

or included in the administrative record 

of this rulemaking. 

Availability of Comments 

Except as noted below, all comments, 

including the names and addresses of 

commenters, will be available for review 

during regular business hours in our 

Administrative Record room at the 

location listed under ADDRESSES.

You may request that we withhold 

your home address from the 

administrative record. We will honor all 

such requests from individual 

commenters to the extent allowable by 

law. We also will withhold your 

identity upon request, to the extent 

allowable by law. If you wish us to 

withhold your name and/or address, 

you must state this request prominently 

at the beginning of your comment. In 

addition, if you wish this information 

withheld, please do not submit your 

comments by electronic means. 

We will not withhold names or 

addresses in comments submitted by 

organizations, business entities, or 

individuals identifying themselves as 

representatives or officials of 

organizations or business entities. All 

such comments will be available for 

public inspection in their entirety. 

Public Hearings 

We will hold a public hearing on the 

proposed rule upon request only. We

Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 56917

will announce the time, date, and 

address for any hearing in the Federal 

Register at least 7 days before the 

hearing. 

If you wish to testify at a hearing 

please contact the person listed in FOR 

FURTHER INFORMATION CONTACT, either 

orally or in writing, by 4:30 p.m., 

eastern time, on November 16, 2004. If 

no one expresses an interest in testifying 

at a hearing by that date, we will not 

hold a hearing. If only one person 

expresses an interest, we will hold a 

public meeting rather than a hearing. 

We will place a summary of the public 

meeting in the administrative record of 

this rulemaking. 

The public hearing will continue on 

the specified date until all persons 

scheduled to speak have been heard. If 

you are in the audience and have not 

been scheduled to speak but wish to do 

so, you will be allowed to testify after 

the scheduled speakers. We will end the 

hearing after all persons scheduled to 

speak and persons present in the 

audience who wish to speak have been 

heard. To assist the transcriber and 

ensure an accurate record, we request, if 

possible, that each person who testifies 

at a public hearing provide us with a 

written copy of his or her testimony. 

Public meeting: If there is only limited 

interest in a hearing, we may hold a 

public meeting in place of a public 

hearing. If you wish to meet with us to 

discuss the proposed rule, you may 

request a meeting by contacting the 

person listed under FOR FURTHER

INFORMATION CONTACT. All meetings will 

be open to the public and, if 

appropriate, we will post notice of the 

meetings. A written summary of each 

public meeting will be included in the 

administrative record of this 

rulemaking.

XI. Procedural Matters 

A. Executive Order 12866

This proposed rule is considered a 

significant rule and is subject to review 

by the Office of Management and 

Budget under Executive Order 12866. 

a. This proposed rule would not have 

an effect of $100 million or more on the 

economy. It would 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. The rule would not add to 

the existing cost of operating a mine 

under an approved regulatory program 

in any significant fashion. We anticipate 

that the average fee under this rule over 

the next ten years would be 5.7 cents 

per ton of surface-mined coal, which is 

less than 0.2 percent of the value of the 

coal, assuming an average price of $30 

per ton. Furthermore, the fees 

established under this rule would be 

lower than the existing AML 

reclamation fees, which expire on 

September 30, 2004. The fees imposed 

under this rule would result in the 

collection of an estimated $469 million 

from the coal industry during FY 2005–

2014, an average of $46.9 million per 

year. That amount is approximately $3 

billion less than what would be 

collected if the existing AML 

reclamation fee were extended another 

10 years. 

b. This proposed rule would not 

create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency. 

c. This proposed rule would not alter 

the budgetary effects of entitlements, 

grants, user fees, or loan programs or the 

rights or obligations of their recipients. 

d. This proposed rule raises novel 

legal and policy issues, which is why 

the rule is considered significant under 

Executive Order 12866. 

B. Regulatory Flexibility Act 

The Department of the Interior 

certifies that this proposed rule would 

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.). See the discussion 

in part XI.A. above. 

C. Executive Order 13211—Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This proposed rule is not considered 

a significant energy action under 

Executive Order 13211. The 

replacement of the AML reclamation fee 

by a much smaller fee for continuation 

of the transfers to the CBF would not 

have a significant effect on the supply, 

distribution, or use of energy. 

D. Small Business Regulatory 

Enforcement Fairness Act 

This proposed rule is not a major rule 

under 5 U.S.C. 804(2), the Small 

Business Regulatory Enforcement 

Fairness Act. For the reasons stated in 

part XI.A. above, this proposed rule 

would not: 

a. Have an annual effect on the 

economy of $100 million or more. 

b. Cause a major increase in costs or 

prices for consumers, individual 

industries, Federal, State, or local 

government agencies, or geographic 

regions. 

c. Have significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or the ability 

of U.S.-based enterprises to compete 

with foreign-based enterprises for the 

reasons stated above. 

E. Executive Order 12630—Takings 

This proposed rule does not have any 

significant takings implications under 

Executive Order 12630. Therefore, a 

takings implication assessment is not 

required. 

F. Executive Order 13132—Federalism 

This proposed rule does not have 

significant federalism implications 

because it does not concern 

relationships between the Federal 

government and State or local 

governmental units. Therefore, there is 

no need to prepare a Federalism 

Assessment. 

G. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

To the extent that this proposed rule 

may have a substantial direct effect 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, 

potentially affected tribal governments 

will be notified through this publication 

in the Federal Register, and by direct 

notification from OSM, of the 

ramifications of this rulemaking. This 

will enable tribal officials and other 

tribal constituencies throughout Indian 

Country to have meaningful and timely 

input in the development of the final 

rule. Upon receipt and evaluation of all 

comments, we will publish a document 

addressing the comments and making 

any appropriate changes to the final 

rule. 

H. Executive Order 12988 on Civil 

Justice Reform 

The Department of the Interior has 

determined that this proposed rule 

meets the requirements of sections 3(a) 

and 3(b)(2) of Executive Order 12988, 

‘‘Civil Justice Reform’’ (56 FR 55195). 

I. Unfunded Mandates Reform Act 

This proposed rule would not impose 

a cost of $100 million or more in any 

given year on any governmental entity 

or the private sector. 

J. Federal Paperwork Reduction Act 

The Department of the Interior has 

determined that 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. OMB has previously 

approved the collection activities and 

assigned clearance numbers 1029–0063 

and 1029–0090 for the OSM–1 form and 

56918 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

coal weight determination, respectively. 

Under this rule, the only change to the 

OSM–1 form would be a reduction in 

the fee rates printed on the form. 

K. National Environmental Policy Act 

OSM has determined that this 

rulemaking action is categorically 

excluded from the requirement to 

prepare an environmental document 

under the National Environmental 

Policy Act of 1969, as amended, 42 

U.S.C. 4332 et seq. In addition, we have 

determined that none of the 

‘‘extraordinary circumstances’’

exceptions to the categorical exclusion 

apply. This determination was made in 

accordance with the Departmental 

Manual (516 DM 2, Appendixes 1.9 and 

2).

L. Clarity of This Regulation 

Executive Order 12866 requires each 

agency to write regulations that are easy 

to understand. We invite your 

comments on how to make this rule 

easier to understand, including answers 

to questions such as the following: 

(1) Are the requirements in the rule 

clearly stated? 

(2) Does the rule contain technical 

language or jargon that interferes with 

its clarity? 

(3) Does the format of the rule 

(grouping and order of sections, use of 

headings, paragraphing, etc.) aid or 

reduce its clarity? 

(4) Would the rule be easier to 

understand if it were divided into more 

numerous but shorter sections? (A 

‘‘section’’ appears in bold type and is 

preceded by the symbol ‘‘§ ’’ and a 

numbered heading; for example, 

‘‘§ 870.13.’’) 

(5) Is the description of the rule in the 

SUPPLEMENTARY INFORMATION section of 

this preamble helpful in understanding 

the rule? 

(6) What else could we do to make the 

rule easier to understand? 

Send a copy of any comments that 

concern how we could make this rule 

easier to understand to: Office of 

Regulatory Affairs, Department of the 

Interior, Room 7229, 1849 C Street, 

NW., Washington, DC 20240. You may 

also e-mail the comments to this 

address: Exsec@ios.doi.gov.

List of Subjects 

30 CFR Part 870

Abandoned Mine Reclamation Fund, 

Reclamation fees, Reporting and 

recordkeeping requirements, Surface 

mining, Underground mining. 

30 CFR Part 872

Abandoned Mine Reclamation Fund, 

Indian lands, Reclamation fees, 

Reporting and recordkeeping 

requirements, Surface mining, 

Underground mining.

Dated: September 7, 2004. 

Chad Calvert, 

Acting Assistant Secretary, Land and 

Minerals Management.

For the reasons set forth in the 

preamble, the Department is proposing 

to amend 30 CFR parts 870 and 872 as 

follows:

PART 870—ABANDONED MINE 

RECLAMATION FUND—FEE 

COLLECTION AND COAL 

PRODUCTION REPORTING 

1. The authority citation for part 870 

continues to read as follows:

Authority: 28 U.S.C. 1746, 30 U.S.C. 1201 

et seq., and Pub. L. 105–277.

2. In § 870.12, paragraph (d) is revised 

to read as follows:

§ 870.12 Reclamation fee.

* * * * *

(d) The reclamation fee shall be paid 

after the end of each calendar quarter 

beginning with the calendar quarter 

starting October 1, 1977. 

3. Amend § 870.13 as follows: 

A. Revise the section heading. 

B. Redesignate paragraphs (a) through 

(d) as paragraphs (a)(1) through (4). 

C. Add a heading for paragraph (a). 

D. Add a new paragraph (b). 

The revision and additions read as 

follows.

§ 870.13 Fee rates. 

(a) Fees for coal produced for sale, 

transfer, or use through September 30, 

2004. (1) * * *

* * * * *

(b) Fees for coal produced for sale, 

transfer, or use after September 30, 

2004. In this paragraph (b), ‘‘we’’ refers 

to OSM, ‘‘Combined Fund’’ refers to the 

United Mine Workers of America 

Combined Benefit Fund established 

under section 9702 of the Internal 

Revenue Code of 1986 (26 U.S.C. 9702), 

and ‘‘unassigned beneficiaries premium 

account’’ refers to the account 

established under section 9704(e) of the 

Internal Revenue Code of 1986 (26 

U.S.C. 9704(e)). 

(1) Fees to be set annually. We will 

establish the fee for each ton of coal 

produced for sale, transfer, or use after 

September 30, 2004, on an annual basis. 

The fee per ton is based on the total fees 

required to be paid each fiscal year, as 

determined under paragraph (b)(2) of 

this section, allocated among the 

estimated coal production categories, as 

provided in paragraph (b)(3) of this 

section. We will publish the fees for 

each fiscal year after Fiscal Year 2005 in 

the Federal Register at least 30 days 

before the start of that fiscal year. Once 

we publish the fees, they will not 

change for that fiscal year and they will 

apply to all coal produced during that 

fiscal year. 

(2) Calculation of the total fee 

collections needed. The total amount of 

fee collections needed for any fiscal year 

is the amount that must be transferred 

from the Fund to the Combined Fund 

under section 402(h) of the Act (30 

U.S.C. 1232(h)) for that fiscal year, with 

any necessary adjustments for the 

amount of any fee overcollections or 

undercollections in prior fiscal years. 

We will calculate the amount of total fee 

collections needed as follows: 

(i) Step one. We will determine the 

smallest of the following numbers: 

(A) The estimated net interest 

earnings of the Fund during the fiscal 

year; 

(B) $70 million; or

(C) The most recent estimate provided 

by the trustees of the Combined Fund of 

the amount that will be debited against 

the unassigned beneficiary premium 

account for that fiscal year (‘‘the 

Combined Fund’s needs’’). 

(ii) Step two. We will increase or 

decrease, as appropriate, the amount 

determined under step one by the 

amount of any adjustments to previous 

transfers to the Combined Fund 

resulting from a difference between 

estimated and actual interest earnings or 

the estimated and actual Combined 

Fund’s needs. This paragraph (b)(2)(ii) 

applies only to adjustments to transfers 

for prior fiscal years beginning on or 

after October 1, 2004, and only to those 

adjustments that have not previously 

been taken into account in establishing 

fees for prior years. 

(iii) Step three. We will adjust the 

amount determined under steps one and 

two of this section by an amount equal 

to the difference between the fees 

actually collected (based on estimated 

production) and the amount that should 

have been collected (based on actual 

production) for any prior fiscal year 

beginning on or after October 1, 2004, if 

the difference has not previously been 

taken into account in establishing fees 

for prior years. 

(3) Establishment of fees. We will use 

the following procedure to establish the 

per-ton fees for each fiscal year: 

(i) Step one. We will estimate the total 

tonnage of coal that will be produced 

during that fiscal year and for which a 

fee payment obligation exists, 

categorized by the types of coal and 

mining methods described in paragraph 

(b)(3)(ii) of this section. 

Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 56919

(ii) Step two. We will allocate the total 

fee collection needs determined under 

paragraph (b)(2) of this section among 

the various categories of estimated coal 

production under paragraph (b)(3)(i) of 

this section to establish a per-ton fee 

based upon the following parameters: 

(A) The per-ton fee for anthracite, 

bituminous or subbituminous coal 

produced by underground methods will 

be 43 percent of the rate for the same 

type of coal produced by surface 

methods. 

(B) Regardless of the method of 

mining, the per-ton fee for lignite coal 

will be 29 percent of the rate for other 

types of coal mined by surface methods. 

(C) The per-ton fee for in situ mined 

coal will be the same as the fees set 

under paragraphs (b)(3)(ii)(A) and (B) of 

this section, depending on the type of 

coal mined. The fee will be based upon 

the quantity and quality of gas produced 

at the site, converted to Btu’s per ton of 

coal upon which in situ mining was 

conducted, as determined by an analysis 

performed and certified by an 

independent laboratory.

PART 872—ABANDONED MINE 

RECLAMATION FUNDS 

4. The authority citation for part 872 

is revised to read as follows:

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

5. Amend § 872.11 as follows: 

A. In paragraph (a): 

i. Revise the introductory text. 

ii. Revise paragraph (a)(1). 

iii. Remove the word ‘‘and’’ in 

paragraph (a)(4). 

iv. Remove the period and add in its 

place ‘‘; and’’ in paragraph (a)(5). 

v. Revise paragraph (a)(6). 

B. In paragraph (b): 

i. Revise the introductory text. 

ii. Revise paragraphs (b)(1) through 

(b)(5). 

iii. Add a new heading in paragraph 

(b)(6). 

iv. Revise paragraph (b)(7). 

v. Remove paragraph (b)(8). 

C. Add paragraphs (d) and (e). 

The revisions and additions read as 

follows:

§ 872.11 Abandoned Mine Reclamation 

Fund. 

(a) Fund revenues. Revenues to the 

Fund include—

(1) Fees collected under section 402 of 

the Act and part 870 of this chapter;

* * * * *

(6) Interest and any other income 

earned from investment of the Fund. 

(b) Allocation of Fund revenues.

Except as provided in paragraphs (d) 

and (e) of this section, monies deposited 

in the Fund will be allocated and used 

as follows, subject to appropriation by 

Congress—

(1) State share. An amount equal to 50 

percent of the reclamation fees collected 

under § 870.13(a) of this chapter during 

each fiscal year will be allocated at the 

end of that year to the State in which 

they were collected. 

(i) Reclamation fees collected from 

Indian lands will not be included in the 

calculation of amounts to be allocated to 

a State. 

(ii) No monies will be allocated to any 

State that advises OSM in writing that 

it does not intend to submit a State 

abandoned mine reclamation plan 

under section 405 of the Act. 

(iii) Amounts granted to a State that 

have not been expended within three 

years from the date of grant award will 

be available for use under paragraph 

(b)(5) of this section if the Director finds 

in writing that the amounts involved are 

not necessary to carry out reclamation 

activities on lands within the State. 

(2) Tribal share. An amount equal to 

50 percent of the reclamation fees 

collected from Indian lands under 

§ 870.13(a) of this chapter during each 

fiscal year will be allocated at the end 

of that year to the Indian tribe or tribes 

having an interest in the lands from 

which the fees were collected. 

(i) No monies will be allocated to any 

Indian tribe that advises OSM in writing 

that it does not intend to submit a tribal 

abandoned mine reclamation plan 

under section 405 of the Act. 

(ii) Amounts granted to an Indian 

tribe that have not been expended 

within three years from the date of grant 

award will be available for use under 

paragraph (b)(5) of this section if the 

Director finds in writing that the 

amounts involved are not necessary to 

carry out reclamation activities on 

Indian lands subject to the tribe’s 

jurisdiction. 

(3) Rural Abandoned Mine Program.

An amount equal to 20 percent of the 

monies collected and deposited in the 

Fund each fiscal year (including interest 

but excluding monies allocated under 

paragraphs (b)(1) and (2) of this section) 

will be allocated for transfer to the 

Secretary of Agriculture for the Rural 

Abandoned Mine Program authorized 

by section 406 of the Act.

(4) Grants based on historical coal 

production. An amount equal to 40 

percent of the monies collected and 

deposited in the Fund each fiscal year 

(including interest but excluding 

monies allocated under paragraphs 

(b)(1) and (2) of this section) will be 

allocated for use by the Secretary to 

supplement annual grants to States and 

Indian tribes under section 405 of the 

Act. 

(i) States and Indian tribes eligible for 

supplemental grants are those that have 

not—

(A) Certified the completion of all 

eligible coal-related reclamation needs 

under section 411(a) of the Act; and 

(B) Completed the reclamation of all 

sites meeting the priorities in 

paragraphs (a)(1) and (2) of section 403 

of the Act. 

(ii) In allocating these funds to 

eligible States and Indian tribes, the 

Secretary will use a formula based upon 

the amount of coal historically 

produced before August 3, 1977, in the 

State or from the Indian lands 

concerned. 

(iii) The Secretary will not provide 

funds under this paragraph to a State or 

Indian tribe in any year in which funds 

to be granted during that year from the 

State’s allocation under paragraph (b)(1) 

of this section or the tribe’s allocation 

under paragraph (b)(2) of this section 

will be sufficient to address all 

remaining eligible coal-related sites in 

the State or on the tribe’s Indian lands 

that meet the priorities in paragraphs 

(a)(1) and (2) of section 403 of the Act. 

(iv) Funds awarded to a State or 

Indian tribe under this paragraph may 

not exceed the amount needed to fully 

address all remaining eligible coalrelated sites in the State or on the tribe’s 

Indian lands that meet the priorities in 

paragraphs (a)(1) and (2) of section 403 

of the Act after utilizing all available 

funds under paragraph (b)(1) or (2) of 

this section. 

(5) Secretary’s discretionary share.

Monies collected and deposited in the 

Fund that are not allocated under 

paragraphs (b)(1) through (4) of this 

section may be used for any of the 

following purposes—

(i) Up to $10 million per year for the 

small operator assistance program under 

section 507(c) of the Act; 

(ii) Emergency projects under section 

410 of the Act, including grants to States 

and Indian tribes for this purpose; 

(iii) Non-emergency abandoned mine 

land reclamation projects on eligible 

lands in States without an approved 

abandoned mine reclamation plan 

under section 405 of the Act or on 

eligible Indian lands where the Indian 

tribe does not have an approved 

abandoned mine reclamation plan 

under section 405 of the Act; 

(iv) Administration of title IV of the 

Act and this subchapter; and 

(v) Projects authorized under section 

402(g)(4) of the Act in States without an 

approved abandoned mine reclamation 

plan under section 405 of the Act or on 

Indian lands where the Indian tribe does 

not have an approved abandoned mine 

56920 Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / Proposed Rules 

reclamation plan under section 405 of 

the Act. 

(6) Minimum program grants. * * * 

(7) Special allocation provisions.

Funds allocated or expended by the 

Secretary under paragraphs (b)(3) and 

(5) of this section will not be deducted 

from funds allocated or granted to a 

State or Indian tribe under paragraphs 

(b)(1), (2), (4), and (6) of this section.

* * * * *

(d) Disposition of fees collected for 

coal produced after September 30, 2004.

Fees collected under § 870.13(b) of this 

chapter for a fiscal year will be allocated 

to the accounts from which the amount 

transferred under paragraph (e) of this 

section was taken at the beginning of 

that fiscal year. The amount allocated to 

each account will be proportionate to 

the amount transferred from that 

account. 

(e) Transfers to Combined Benefit 

Fund. (1) At the beginning of each fiscal 

year for which fees must be paid under 

section 402 of the Act and § 870.13 of 

this chapter, the Secretary will transfer 

monies from the Fund to the United 

Mine Workers of America Combined 

Benefit Fund established under section 

9702 of the Internal Revenue Code of 

1986 (26 U.S.C. 9702) for the purpose 

described in section 402(h)(3)(A) of the 

Act and in the amount prescribed in 

paragraphs (h)(2) through (4) of section 

402 of the Act. 

(2) The amount of estimated Fund 

interest earnings transferred to the 

Combined Benefit Fund under 

paragraph (e)(1) of this section in any 

one fiscal year may not exceed the lesser 

of $70 million or the amount of the 

expenditures described in section 

402(h)(3)(A) of the Act. 

(3) If actual Combined Benefit Fund 

expenditures differ from the estimates 

provided under section 402(h)(3)(A) of 

the Act, or if interest earnings differ 

from the projections used to determine 

the amount of the transfer under section 

402(h)(2)(A) of the Act, the amount 

transferred from the Fund to the 

Combined Benefit Fund in future years 

will be adjusted accordingly. However, 

the total amount ultimately transferred 

for any one fiscal year may not exceed 

$70 million, although adjustments for 

transfers in prior fiscal years may result 

in the transfer of more than $70 million 

during any given year. 

(4) The amount transferred under 

paragraph (e)(1) of this section will be 

deducted from the amount of Fund 

revenues subject to allocation under 

paragraphs (b)(3) through (5) of this 

section at the end of the fiscal year.

[FR Doc. 04–20998 Filed 9–16–04; 8:45 am]

Editorial Note: Federal Register Proposed 

Rule document 04–20998 was published 

originally in the Federal Register of Friday, 

September 17, 2004 at 69 FR 56132. In the 

paper edition of the September 17 issue, page 

56132 appeared as a blank page, due to a 

technical malfunction. The online edition of 

the Federal Register was not affected. A 

complete version of the document appears on 

page 56132 in both the HTML and PDF 

versions posted online on GPO Access

(http://www.gpoaccess.gov/fr/index.html). 

The corrected document is republished in its 

entirety.

[FR Doc. R4–20998 Filed 9–21–04; 8:45 am] 

BILLING CODE 1505–01–D