[Federal Register Volume 60, Number 35 (Wednesday, February 22, 1995)]
[Rules and Regulations]
[Pages 9974-9984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4259]




[[Page 9973]]

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Part III





Department of the Interior





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Office of Surface Mining Reclamation and Enforcement



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30 CFR Parts 870, 886, 887, and 888



Abandoned Mine Reclamation Grant Procedures; Final Rule

Federal Register / Vol. 60, No. 35 / Wednesday, February 22, 1995 / 
Rules and Regulations
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[[Page 9974]] 


DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Parts 870, 886, 887, and 888

RIN No. 1029-AB72


Abandoned Mine Reclamation Grant Procedures

AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM), 
Interior.

ACTION: Final rule.

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SUMMARY: These regulations incorporate new grant procedures implemented 
by OSM and make editorial changes to ensure consistency with the 
statutory changes to Title IV of the Surface Mining Control and 
Reclamation Act (SMCRA) of 1977, Public Law 95-87.

EFFECTIVE DATE: March 24, 1995.

FOR FURTHER INFORMATION CONTACT: Norman J. Hess, Office of Surface 
Mining Reclamation and Enforcement, U.S. Department of the Interior, 
1951 Constitution Avenue NW., Washington, D.C. 20240; Telephone: 202-
208-2949.

SUPPLEMENTARY INFORMATION:

I. Background
II. Final Rules and Disposition of Comments
III. Procedural Matters

I. Background

A. Summary of the Abandoned Mine Land (AML) Program

    The AML Program was established by SMCRA, Pub. L. 95-87, 30 U.S.C. 
1201 et seq., in response to concern over extensive environmental 
damage caused by past coal mining activities. In effect, the Abandoned 
Mine Reclamation Fund (Fund) and the program it supports is the coal 
industry's equivalent to the ``Superfund'' administered by the 
Environmental Protection Agency to address hazardous waste discharges.
    The eligibility requirements for reclamation of abandoned mine 
lands are contained in Section 404 of SMCRA. Funding of reclamation 
projects is subject to a priority schedule. For example, ``Priority 1'' 
projects concern those that involve the protection of public health, 
safety, general welfare, and property from extreme danger of the 
adverse effects of coal mining practices. ``Priority 3'' projects, on 
the other hand, concern environmental problems associated with past 
coal mining practices that do not necessarily constitute a public 
health or safety threat or affect the general welfare.
    The Fund, administered by the Secretary of the Interior through 
OSM, is financed by a reclamation fee assessment on every ton of mined 
coal at the rate of 35 cents per ton of surface mined coal, 15 cents 
per ton of underground mined coal, and 10 cents per ton for lignite. 
Expenditures from the Fund are subject to appropriation by Congress.
    The Fund is divided into the State/Indian tribe and Federal shares 
with each State or Indian tribe under a federally approved reclamation 
program entitled to fifty percent of the reclamation fees collected 
from coal operations within the State or respective Indian lands. 
Annually, these States/Indian tribes receive grants to carry out 
reclamation projects under their AML programs. States are authorized to 
use up to $3 million of their State-share funds to establish State coal 
mine subsidence insurance programs, and are also authorized to deposit 
up to ten percent of their annual grants into special interest-bearing 
State trust accounts available for future reclamation purposes or for 
acid mine drainage reclamation projects.
    The Federal expenses share of the Fund is allocated among a number 
of programs such as Federal emergency projects (involving sudden and 
life-threatening situations that demand immediate attention), high-
priority reclamation projects in States and Indian lands without 
federally approved reclamation programs (referred to as ``nonprogram'' 
States/Indian tribes), and the Small Operator Assistance Program, which 
provides financial assistance to small coal operators to help defray 
certain costs associated with the surface coal mining permitting 
process. At present, 23 States and three Indian tribes have OSM 
approved abandoned mine reclamation programs.

B. Proposed Rules

    OSM published proposed rules at 58 FR 59334-59342 (November 8, 
1993) concerning abandoned mine reclamation grant procedures and 
requested comments from the public. During the comment period on the 
proposed rules, OSM received comments from a variety of sources.
    Pursuant to Executive Order 12866, every Federal agency is required 
within applicable statutory limits to select regulatory goals that 
maximize benefits to society and to select the most effective means to 
achieve these goals. To this end OSM has received comments and 
recommendations from the public and representatives of coal mining 
States/Indian tribes.
    All comments received during the comment period were considered in 
this rulemaking process, and all substantive comments received are 
addressed in the following preamble. All comments received are 
available for inspection in the OSM Administrative Record, room 660, 
800 North Capitol Street, NW, Washington, D.C. 20001.

C. Overview of Changes to Abandoned Mine Land Grant Regulations

    Over the years, Congress has made several amendments to the 
provisions in Title IV of SMCRA. These amendments have been, or are in 
the process of being, implemented by OSM. In addition, the Department 
has adopted the governmentwide Grants Management Common Rule (43 CFR 
part 12; subpart C). Due to these changes, certain regulatory 
references are now outdated or refer to statutory provisions that no 
longer exist. Therefore, in this rulemaking OSM is editing the AML 
regulations in 30 CFR chapter VII, subchapter R, to ensure that they 
will be consistent with agency practice and all past amendments to 
Title IV of SMCRA. The specific changes proposed to the AML rules are 
set forth below.

II. Final Rules and Disposition of Comments

Part 870-Abandoned Mine Reclamation Fund-Fee Collection and Coal 
Production Reporting

    Section 870.5 is revised to include Indian tribes in the definition 
of ``agency'' to reflect the OSM has approved Abandoned Mine 
Reclamation programs for three Indian tribes: the Crow, Hopi, and 
Navajo. See Section 405(k) of Pub. L. No. 100-71, 101 Stat. 416 (1987). 
No comments were received on this section which is adopted as proposed.

Part 886--State Reclamation Grants

    Section 886.1 is revised by adding the term ``Indian tribes'' and 
deleting specific reference to ``State reclamation plan[s]'' to reflect 
that OSM has approved abandoned mine reclamation programs for three 
Indian tribes: the Crow, Hopi, and Navajo. In every instance in this 
document where Indian tribe has been inserted, the purpose is to add 
clarity and avoid confusion by reflecting the fact that OSM approval 
has been extended to Indian tribal programs as well as State programs. 
See Pub. L. No. 100-71, 101 Stat. 416 (1987). No comments were received 
on this section which is therefore adopted as proposed.
    OSM also amended Sec. 886.3 by making certain editorial changes. 
Subsection (b) has been deleted and the subsection designation for 
subsection (a) removed. The word ``allocated'' has also been replaced 
with ``distributed annually.'' [[Page 9975]] This revision clarifies 
that AML grant funds as ``distributed'' to States and Indian tribes. 
The previous use of the word ``allocated'' was, in the context used, 
inappropriate. Allocation means the administrative identification in 
the records of OSM of monies in the Fund for a specific purpose, e.g. 
identification of monies for exclusive use by a State/Indian tribe, 
whereas ``distribution'' is the process by which OSM makes those monies 
available to States/Indian tribes after the monies are appropriated 
from the AML Fund by Congress. Throughout this final rule, editorial 
changes have been made to clarify this terminology. In addition, the 
word ``annually'' is added to reflect the current procedure that exists 
for AML grant distribution. States/Indian tribes with approved AML 
programs are eligible to submit AML grant requests on an annual basis.
    Subsection 886.3(b) has been deleted due to the legislative changes 
effectuated by the 1990 amendments to Title IV of SMCRA. See the 
Abandoned Mine Reclamation Act (AMRA) of 1990, Pub. L. 101-508 
(November 5, 1990). All funds are now allocated for a specific purpose 
(see 30 U.S.C. 1232(g)). Accordingly, the reference to 30 CFR 
Sec. 886.3 concerning ``remaining funds'' is no longer relevant.
    No comments concerning this section were received from the public, 
thus, this section is adopted as proposed.
    Section 886.10 addresses information collection requirements and 
the appropriate OMB clearance number. OSM revised and amended this 
section by updating the data contained in the section and including the 
estimated reporting burden per response for complying with the 
information collection requirements. The revision also provides OSM and 
OMB addresses were comments regarding the information collection 
requirements may be sent. No comments were received on this section 
which is adopted as proposed.
    Section 886.11 is amended to reflect that OSM has approved 
Abandoned Mine Reclamation plans for three Indian tribes: the Crow, 
Hopi, and Navajo. No comments were received on this section, which is 
thus adopted as proposed.
    Section 886.12(a) is amended by removing the word ``State.'' This 
amendment would reflect that Tribal programs have been approved by OSM.
    Section 886.12(b), which outlines the permissible uses for grant 
moneys under this part, is amended by revising the subsection to 
reflect specific changes made by the 1990 amendments to Title IV of 
SMCRA. See Pub. L. No. 101-508.
    Rather than listing certain reclamation objectives, OSM is 
referencing specific statutory and regulatory provisions that detail 
eligibility requirements. This change avoids confusion and provides 
clearer direction for the States/Indian tribes.
    One commenter observed that the last sentence of subsection (b) 
appears to require the use of fuels other than petroleum or natural gas 
where public facility projects are constructed with abandoned mine land 
grant funds. This commenter was unclear as to why such a requirement 
has been included, and further felt that this restriction was 
inappropriate in the context of these regulations.
    OSM responds that this provision stems from Executive Order 12185 
which requires, to the extent technologically and economically 
feasible, that public facilities planned, constructed or modified in 
whole or part with Federal funds (e.g., abandoned mine land grant 
funds) should utilize fuel other than petroleum or natural gas. This 
provision has been in the regulations since 1982. If a State/Indian 
tribe determines that a public facility project incorporating such 
provisions is not technologically or economically feasible, then 
compliance with this requirement would not be required.
    Subsection 886.13(a) is revised by deleting any reference to 
administrative grants as being separated grants in and of themselves. 
This change reflects the current OSM policy of awarding all AML funds 
through a single grant. Administrative costs in this grant would no 
longer require a second grant, but would cover only the first year of 
the grant.
    Two commenters expressed concern on behalf of their members 
regarding the requirement to begin the 12-month administrative period 
at the beginning of the grant since it may not coincide with the 
grantee's fiscal year. The proposed rule would require grantees to 
shift their construction grant period to coincide with the fiscal year, 
thereby losing much of the favorable construction season. The commenter 
suggests that grantees be allowed to assign the 12-month performance 
period for the administrative portion of a grant to any 12-month period 
within the first 18 months of a grant. This additional flexibility 
would allow the grantee's administrative cost period to coincide with 
it's fiscal year, while the construction portion of a grant can be 
scheduled to coincide with the construction season.
    OSM has not accepted this comment and does not believe that a 
change to the proposed rule language is required since sufficient 
flexibility exists under the current system and the proposed rule as 
evidenced by several States that already have made determinations to 
adjust their administrative period to coincide with the start of their 
fiscal year.
    Section 886.13(b) is also revised in order to implement changes 
made by the 1990 amendments to SMCRA. These statutory amendments 
deleted a reference to ``impact assistance funding'' in Section 402(g) 
of SMCRA (30 U.S.C. Sec. 1232), and moved these reclamation objectives 
to the non-coal provisions in new SMCRA Section 411 (30 U.S.C. 
Sec. 1240(a)). A similar change has been made in these regulations. 
Additionally, and to avoid confusion, OSM has replaced the specific 
reference to Sections 403 and 409 (30 U.S.C. Secs. 1233 and 1239), of 
SMCRA with a general reference to SMCRA.
    OSM also has deleted paragraphs (b)(2) and (b)(3) of Sec. 886.13 
which refer to specific AML projects. Under the revised AML grant 
procedures, project specific information would be, in part, in 
Abandoned Mine Land Inventory System and, in part, submitted at the 
time of project activation. This change will decrease certain 
administration costs of States/Indian tribes, thereby allowing more AML 
funds to be used for specific AML reclamation purposes.
    Two commenters suggested that open-ended grants be allowed, in lieu 
of the current 3-year limitation, so as to accommodate longer 
performance periods.
    OSM accepts the comment to provide flexibility in the grant period. 
This change is being made to accommodate longer performance periods 
where a need is demonstrated by a State/Indian tribe. Since no grant 
period is specified in the statute, OSM believes that it has the 
requisite authority under Subsection 413(a) of SMCRA to alter the 
current 3-year grant period. OSM acknowledges, however, that longer 
grant periods may pose certain processing and fiscal problems. 
Accordingly, OSM is planning to examine this concept, developing 
proposed specific procedures for an open-ended grant program and 
testing the procedures by means of selected State programs before 
making a final policy decision.
    The existing Sec. 886.14 includes a reference to Section 405(f) of 
SMCRA, relating to project information required from applicants. Since 
Sec. 886.14 is revised to relate solely to budget information, 
submission of information relating to Section 405(f) now is discussed 
in the preamble to Sec. 886.16.
    Section 886.14 is revised to reflect that OSM will not require 
annual budget estimates. This clarifies that States/Indian tribes 
should no longer submit site specific information to OSM as part 
[[Page 9976]] of this process. The budget information called for by 
this revision would provide information that OSM needs to formulate its 
own budget requests to Congress. In addition, the deletion of the word 
``administrative'' is because under the new procedures outlined in this 
proposed rule, administrative grants would no longer be separate 
grants. Other changes to this section are editorial in nature and are 
designed to reflect existing OSM practice and procedure.
    Since no comments were received on this section, it is adopted as 
proposed.
    Section 886.15(c) is renumbered as Sec. 886.15(a) and revised by 
replacing the word ``allocated'' with ``distributed'' in order to 
clarify that AML funds are ``distributed'' to States/Indian tribes 
annually. See the discussion above of proposed revisions to Sec. 886.3. 
In addition, the previous paragraphs (c)(1)-(6), which refer to 
specific forms, are deleted in favor of a generalized instruction to 
use approved forms. This change eliminates the need to amend these 
regulations if there needs to be a change in form requirements, e.g., 
when a new Federal law is passed.
    Section 886.15(a) is renumbered as Sec. 886.15(b) and amended by 
revising subsection (a) which allows OSM 90 days in which to act upon a 
grant application. This amendment would require OSM action on a grant 
application within 60 days of submittal. This change promotes the 
overall goal of expediting the AML granting process.
    In the interests of greater precision and clarification, OSM has 
also made an editorial change to the redesignated Subsection 886.15(b) 
which eliminates ``* * * act upon * * *'' and substitutes ``* * * 
approve or disapprove * * *''. The use of this language is consistent 
with the wording of subsequent sections.
    One commenter stated that the prior Sec. 886.15(a) provides that 
grants shall be approved by the Director. The commenter pointed out 
that under the current system, grants are approved by the Field Office 
Director. The commenter asked whether this regulatory language signals 
a change from the current practice.
    OSM has not changed the regulatory language that provides authority 
to the Director to approve grants to the States/Indian tribes. OSM 
points out, however, that the Director has formally delegated this 
authority to the Field Office level.
    Section 886.15(b), which has been redesignated as Sec. 886.15(c), 
gives OSM 30 days to approve or disapprove a revised application, is 
revised to allow OSM to treat the revised application as an original. 
OSM would then have 60 days (under the new Sec. 886.15(b)) to approve 
or disapprove the application. This change reflects OSM's view that 30 
days could be an insufficient amount of time for it to evaluate revised 
applications. OSM considers 60 days to be a more realistic time frame 
in which to execute this task.
    Several commenters stated that in the prior Subsection 886.15(b), 
OSM should define what constitutes a minor revision to the grant 
application. In their view, these minor revisions should not start the 
60-day clock for OSM review and approval. In addition, one commenter 
provided the opinion that the 60-day review and approval process should 
be shortened to a period of 30 days.
    OSM does not agree with these comments. It does not believe that a 
30-day period provides sufficient time to review and process grants and 
agree upon specific details with States/Indian tribes. Accordingly, OSM 
has not acted upon that part of the comment to reduce the grant 
processing time period. Furthermore, because of the variation in 
eligible grant activities and projects, OSM does not believe that the 
States/Indian tribes would be better served by attempting to further 
define what is or is not a ``minor revision.'' By trying to list or 
define items that may or may not occur, one assumes the risk of being 
over or under inclusive in the class of items described. This 
ultimately leads to further administrative problems between the States/
Indian tribes and OSM. The agency's goal has been and will continue to 
be to process all grant applications within the 60-day period 
contemplated by the regulations. Where revisions are required and are 
submitted accurately and timely by the States/Indian tribes, OSM will 
attempt in good faith either to meet or take action quicker than the 
60-day time period. It must be understood, however, that if there are 
time delays in obtaining the necessary revisions, it may not be 
possible in all cases to meet the 60-day period. However, it is a goal 
that OSM will continue to strive toward.
    Section 886.15(d) is revised by inserting the requirement that 
States/Indian tribes comply with all Federal laws in order to apply for 
grants under this Part. The deletion of the reference to OSM 
implementing regulations is merely an editorial change.
    Section 886.15(f) is removed because the requirements of this 
subsection are redundant. Specifically, the information called for in 
this subsection is also required when States/Indian tribes submit 
reclamation plans for OSM approval. See 30 CFR 884.13(c)(7).
    Section 886.16 is amended to make some editorial and substantive 
changes. Specifically, Sec. 886.16(a) is revised by deleting reference 
to Director approval of an agency's grant application. This is an 
editorial change; the deleted language is superfluous in light of the 
fact that a ``grant agreement'' is in fact the document that represents 
approval of the agency's grant application. Therefore, the existence of 
a grant agreement denotes that OSM has in fact approved the agency's 
grant application.
    Paragraph (3) of Sec. 886.16(a) requires that the grant agreement 
include project specific amounts. This paragraph is deleted in order to 
simplify the AML granting process. Specifically, the deletion of 
paragraph (a)(3) provides that individual projects will no longer be 
included in the grant agreement. Instead, this information will be 
submitted to OSM Field Offices on a project-by-project basis before OSM 
approves the expenditure of funds for individual projects. Current 
provisions of these regulations (See recordkeeping and reporting 
requirements discussed in Secs. 886.23 and 886.24), combined with the 
National Environmental Policy Act (NEPA) compliance process discussed 
in revised Subsection 886.16(d) below, alleviate the need for approval 
of specific project amounts in the grant agreement.
    Paragraph (a)(4) of Sec. 886.16 requires that the grant agreement 
include allowable transfers of funds. Likewise, paragraph (b) of 886.16 
requires Director approval of agency assignment of functions and funds. 
Paragraph (a)(4) is removed, and paragraph (b) is revised to give the 
States/Indian tribes more flexibility in administering their AML grant 
monies. The revision to paragraph (b) would alleviate the need for 
Director approval prior to assignment by the States/Indian tribes. In 
the view of OSM, States/Indian tribes are in the best position to 
dictate which entities are better suited to carry out day-to-day 
reclamation activities. With OSM approval no longer necessary, 
paragraph (a)(4) becomes irrelevant and is therefore removed.
    Section 886.16(c) is also deleted and paragraph (d) is revised and 
renumbered as paragraph (c) to reflect changes in the procedures 
required to effectuate a grant agreement between OSM and a State/Indian 
tribe. This amendment reflects a change in the technical administration 
of the grant agreement process. Specifically, this amendment requires 
that the Director sign and transmit only two copies of the grant 
agreement to the agency, instead of the four required prior to 
amendment. In addition, this amendment changes the time period for the 
agency to execute the grant from 3 weeks to 20 days. For purposes of 
this [[Page 9977]] section, the agency is now required to sign the 
agreement and return it to OSM within the 20-day period. Since the 
grant, when signed by the Director, would obligate funds, subsection 
(c) states that failure of the State/Indian tribe to execute the grant 
within 20 days would result in a deobligation of the total Federal 
grant amount. Thus, if the signed agreement is not returned to OSM by 
the close of business on the 20th day after the designated OSM official 
signs it and OSM has not granted an extension, OSM will initiate 
deobligation procedures.
    Several commenters have stated that OSM should allow liberal 
extensions of the 20-day period to execute a grant agreement based upon 
reasonable justification provided by the State/Indian tribe. Otherwise, 
commenters note, grantees could be faced with automatic premature 
deobligations simply because they are unable to obtain the appropriate 
approvals and authorizing signatures within the 20 calendar day period.
    OSM has accepted this comment and made a change in the language of 
Sec. 886.16(c) to provide that an extension of time may be approved 
verbally or in writing by the individual delegated the authority to 
sign grant agreements. Specifically, the word ``formally'' has been 
deleted to allow an oral or other less formal mechanism of approval. 
OSM notes that the States/Indian tribes are the primary delivery 
mechanism for the AML program. The actual signing of the grant 
agreements is not a complex matter; OSM will endeavor to continue to 
keep it as uncomplicated as possible.
    In addition, one commenter has requested that the 20-day period of 
Sec. 886.16(c) be lengthened to 45 days to allow sufficient time to 
execute grant agreements.
    OSM has declined to extend the 20-day period based upon experience 
over the past decade that reflects that there has been few if any 
problems encountered by the involved parties in meeting the specified 
time period.
    New Secs. 886.16(d) and 886.16(e) are added to clarify that 
compliance with NEPA is required before AML grant funds may be used by 
the State/Indian tribe and that a completed Form OSM-76 must be 
submitted prior to the use of funds for construction activities. 
Currently, OSM grant procedure requires NEPA compliance at the 
construction grant award stage. Since the issuance of a grant need not 
contain authorization of expenditures for any specific project, that 
action should not require NEPA compliance. Instead, NEPA compliance is 
deferred until the State/Indian tribe requests authorization to expend 
funds under the grant. The actual initiation of each project is the 
action that might have a significant effect on the environment. Under 
these procedures, NEPA documentation would be developed as a normal 
part of project planning rather than up front in a grant application. 
Although OSM field office approval would still be required before the 
States/Indian tribes are authorized to proceed with individual 
projects, OSM believes that the overall management of the grant by the 
States/Indian tribes is enhanced by this action.
    One commenter stated that Sec. 886.16(d) should be revised to 
clarify that the provisions of the National Environmental Policy Act of 
1969 apply to coal AML projects only and not to noncoal projects.
    OSM disagrees with this comment. NEPA applies to both coal and 
noncoal projects. NEPA compliance must occur for every project.
    Prior to the time that authorization to expend funds for 
construction activities is requested, information specific to the 
project is provided to the OSM field office by the State/Indian tribe. 
The required information is provided on the Form OSM-76, Abandoned Mine 
Land Problem Area Description (OMB No. 1029-0081). This information 
conforms to that required in section 405(f) of SMCRA.
    Several commenters asked for clarification on whether the filing of 
Form OSM-76 with grant applications applies to both coal and noncoal 
projects. Commenters objected to having to file a Form OSM-76 with 
noncoal projects.
    Although unfunded noncoal problem areas/projects do not have to be 
included in the AML inventory, if such projects are funded, OSM is 
required under section 403(c) of SMCRA to establish procedures for, and 
to track, accomplishments. This is being implemented for all Title IV 
projects through States/Indian tribes submitting information on Form 
OSM-76.
    It is noted that budgets are ``revised'' and grants are 
``amended.'' Because of the method of approving an AML grant, a budget 
by itself is not required to be revised. Thus, the title of Section 
886.17 would be changed from ``Grant and budget revisions'' to read 
``Grant amendments.''
    Section 886.17 is amended by revising paragraph (a)(1) which refers 
to OMB Circular A-102. This editorial change properly refers to the 
Grants Management Common Rule. This editorial change has been made 
throughout this rule.
    Paragraph (a)(2) of Sec. 886.17, which discusses events that 
trigger notification requirements, is revised by deleting subparagraphs 
(i) and (ii) and inserting language specifying that notification is 
necessary for changes that will result in an extension of the grant 
period, or require additional funds, or make a budget transfer from 
administrative costs to project costs or vice versa. This revision 
eliminates the need to notify OSM of project-specific changes, but 
retains the mandates of the Grants Management Common Rule. This 
simplifies the grant process; OSM would not require project-by-project 
approval of State/Indian tribe AML projects at the time of initial 
grant approval. Thus, a grant amendment would not be necessary merely 
due to changes in individual projects that do not effect the overall 
grant period, funding, or cost category.
    Several commenters stated that Sec. 886.17(a)(2) should be revised 
to clarify that budget transfers, from administrative costs to project 
costs to indirect costs and vice versa, require notification only and 
do not require a grant amendment.
    OSM disagrees with the comments. The Grants Management Common Rule, 
(43 CFR part 12, subpart C.30(c)(3)), requires that when a grant 
provides funding for both construction and nonconstruction activities, 
the grantee must obtain prior written approval from the awarding agency 
before making any fund or budget transfers from nonconstruction to 
construction or vice versa. This requirement is being implemented by 
the grantee formally amending its approved budget.
    Likewise, paragraphs (b)(1) and subparagraphs (b)(3) (i)-(iii) of 
section 886.17, which require OSM approval for budget revisions of 
$5,000 or 5 percent of the grant amount, except in certain enumerated 
circumstances, are removed by these amendments. Thus, the requirements 
in paragraphs (b)(1) and (b)(3) (i)-(iii) of section 886.17 are deleted 
in favor of the new instructions in revised paragraph 886.17(a)(2). 
This is a conforming change that is brought about by the Grants 
Management Common Rule and would codify existing practices.
    In addition, paragraph (b)(2) of section 886.17 is revised to allow 
OSM 30 days, instead of the current 15 days, in which to either approve 
or disapprove the amendment. Paragraph (b)(2) is redesignated as 
subsection (b). The proposed 30-day time limit reflects OSM's 
evaluation of the time needed to complete its review of the amendment.
    In regard to paragraph 886.17(b)(2), one commenter stated that they 
prefer 15 days instead of the specified 30-day [[Page 9978]] period to 
approve or disapprove grant amendments.
    Based on past experience, OSM is of the opinion that a 30-day 
period provides a reasonable and sufficient time to review and approve 
or disapprove a grant amendment. Accordingly, OSM has not acted upon 
this comment and will endeavor to process all grant amendments as 
quickly as possible within the 30-day period contemplated by the 
regulation.
    Section 886.18, discussing conditions for grant reduction, 
suspension, and termination, is amended by revising paragraph (a)(2) to 
make a minor editorial change to the reference from 30 CFR 872.11(b)(2) 
to 30 CFR 872.11(b)(1) and 872.11(b)(2). This is a conforming change 
made necessary by rulemaking to implement the AMRA, Pub. L. 101-508.
    In the interest of clarity, OSM has decided to substitute the word 
``obligate'' for ``expend'' in paragraph 886.18(a)(2). Paragraph 
402(g)(1)(D) of SMCRA uses the term ``expended,'' but the term 
``obligate'' is deemed to be a more technically correct financial term 
to reflect an irrevocable commitment of funds by a grantee.
    In regard to paragraph 886.18(a)(2), one commenter observed that if 
a grantee fails to expend distributed funds within a 3-year grant 
period, those funds will be expended by the Secretary to accomplish the 
purposes of Title IV. The commenter disagrees with this section due to 
annual distribution decreases and anticipated future decreases due to 
the amendments to SMCRA. The commenter feels that all distributed funds 
should be utilized only by the respective State/Indian tribe for the 
purposes of Title IV.
    Except for the editorial change previously mentioned, OSM does not 
believe that any changes should be made to this regulation. Section 
402(g)(1)(D) of SMCRA specifically provides for the Secretary to use 
moneys granted, but not expended, within 3 years after the grant award. 
Note however, that even though the language of this provision has not 
been modified, OSM has always been able to work with the States/Indian 
tribes on expending appropriated funds.
    Paragraph (a)(3) of section 886.18 is also revised by specifying 
that certain Indian tribes may receive reclamation funds without having 
an approved regulatory program. Under the 1987 amendments to SMCRA, the 
Crow, Hopi, and Navajo Indian tribes do not have an approved Title V 
program prior to being eligible to receive AML funds. See 30 U.S.C. 
1235(k) (1988).
    Subsection 886.18(b) is replaced by a new subsection (b). The new 
subsection (b) incorporates remedial measures outlined in the Grants 
Management Common Rule.
    Also, the current subsection (b) is revised and redesignated as 
subsection (c). This new subsection (c) contains editorial changes to 
indicate that the ``OSM official delegated grant signature authority'' 
is the person who would give notice of grant reduction, suspension, or 
termination of a grant. In addition, subsection (c) requires certified 
mail transmittal of the required written notice. Subsection (c) also 
adds a new paragraph (7) that would incorporate the concept of mutual 
termination of a grant as outlined in the Grants Management Common 
Rule.
    Likewise, the current subsection 886.18(c) is redesignated as 
subsection (d) and revised to clarify that State or Tribal appeals of 
OSM decisions to reduce, suspend, or terminate a grant are evaluated to 
the Director of OSM. This rule provides that the Director would have 30 
days from receipt to decide the appeal. The Director's decision could 
then be appealed to the Secretary.
    These appeals would be processed in accordance with existing OSM 
procedures. OSM has elected not to codify the details of this process 
since the procedures may be amended as necessary.
    One commenter stated that, before reduction or termination of a 
grant, the grantee should be allowed to complete the appeal process 
provided in Subsection 886.18(d). Hence, paragraph 886.18(c)(2) should 
be revised to provide for the initiation and completion of the appeals 
process before any final action is taken to reduce or terminate a 
grant.
    OSM accepts this comment and notes that no regulatory language 
change is required because the authority to appeal a reduction, 
suspension or termination of a grant exists in paragraph 886.18(d). 
Under this paragraph the Director must decide the appeal within 30 days 
of receipt. Further, a grantee can then appeal the Director's decision 
to the Secretary who also has 30 days to act upon the appeal.
    Section 886.19, which explains requirements for an audit, is 
revised to remove an outdated reference to OMB Circular A-102.
    Two commenters requested further clarification of Section 886.19 by 
incorporating appropriate reference to specific published Office of 
Management and Budget guidance.
    In order to provide guidance to grantees, OSM has revised section 
886.19 to state that the agency shall arrange for an independent audit 
pursuant to guidance provided by the General Accounting Office and the 
Office of Management and Budget. This revision is being done in a 
general fashion because the applicable circulars and other guidance 
documents could be modified and/or combined in the future.
    Section 886.20, which outlines administrative procedures for 
agencies under this Part, is revised by replacing references to OMB 
Circular A-102 with the Grants Management Common Rule. This change will 
alleviate the need for rulemaking to effectuate every minor change in 
form requirements. No comments were received on this section which is 
adopted as proposed.
    Section 886.21, outlining allowable costs, is revised by deleting 
the work ``project'' in paragraph (a). As discussed throughout this 
rulemaking, these amendments eliminate certain project specific grant 
procedures under the AML program. The revision will have little 
substantive effect since previous grants, although containing project-
specific information, were for overall reclamation activities.
    One commenter has noted that ``acquisition of land'' is an 
allowable cost. That commenter has stated that OSM may want to clarify 
Sec. 886.21(a) to note that acquisition is limited to lands affected by 
coal and noncoal mining, i.e., does not include public facility 
projects authorized under Section 411(f) of SMCRA.
    OSM has not made any change to Sec. 886.21. This is a general 
provision that addresses grants as a whole; if specific limitations 
exist in Title IV of SMCRA, those limitations would have to be complied 
with as required.
    Section 886.22(a) contains some editorial changes in order to 
properly reference the Grants Management Common Rule. In addition, 
subsection (d), mandating that drawdowns be made by the agency as 
closely as possible to the time of making disbursements, is revised by 
requiring that when advances are appropriate, they should be made as 
closely as possible to the actual time of disbursement. This change 
will reflect current practice and procedure. No comments were received 
on this section which is thus adopted as proposed.
    Section 886.23 is amended by replacing the semi annual reporting 
requirement with an annual reporting requirement. In the view of OSM, 
annual reporting is sufficient to ensure proper Federal oversight. The 
AML program has been in effect in most States for over a decade. This 
change represents the growing maturity of these [[Page 9979]] programs 
and the confidence that OSM has in their management.
    In order to maintain consistency in the regulatory language, OSM is 
making a technical change and thereby deleting reference to 
``cooperative agreements'' in Sec. 886.23. The term ``grant'' as used 
in this regulation includes financial assistance in the form of grants 
and/or cooperative agreements.
    Several commenters stated their support of the OSM proposal in 
Sec. 886.23(a) to change the reporting requirements to an annual cycle 
rather than semi annual.
    OSM agrees with the commenters that this change will assist in 
reducing administrative burdens on grantees and recognizes the superior 
performance of the States/Indian tribes in administering their AML 
programs over the years.
    In addition, existing paragraph (a) and (b) are revised by deleting 
references to specific form requirements. This is accomplished by 
deleting a portion of paragraph (a), all of paragraphs (a)(1)-(2), and 
all of paragraph (b). In place of these references to specific forms, 
this amendment directs agencies to submit reporting forms specified by 
OSM. This change eliminates the need for rulemaking procedures to amend 
these regulations in every instance when form requirements change. In 
addition, many of the forms required by this section anticipate the 
need for project-specific information. In light of the changes that are 
made by these amendments, specific information no longer needs to be 
submitted to OSM in advance. Some project-specific information would be 
provided to OSM at the time a grantee requests approval for 
expenditures of funds for individual projects. Additional detailed 
information would also be available in the grantee's files.
    A revised paragraph (b) is added to Sec. 886.23 which requires, at 
the completion of a grant, agency submission of closeout reports as 
specified by OSM. Specifically, subsection (b) requires submission of 
Form OSM-76 upon project completion. This submission is necessary to 
comply with the requirement in section 403(c) of SMCRA that on a 
regular basis OSM note on its inventory those projects completed under 
Title IV.
    Section 886.23(c) is deleted, since the requirement to submit Form 
OSM-76 upon project completion is now contained in revised subsection 
(b), as noted above.
    Several commenters observed that Sec. 886.23(b) states that a 
completed Form OSM-76 shall be submitted upon project completion, not 
grant expiration. Because of the 3-year limitation for construction 
grants and the fact that many projects may not begin until the end of 
the first construction season due to fiscal year constraints, some 
projects may require funding from more than one grant. Consequently, 
some projects may not be completed when grant closeout reports are due, 
and a Form OSM-76 sent at that time would be incomplete. Because of 
this situation, the commenters suggest that OSM needs to define 
``project completion'' within the framework of this section.
    OSM agrees in part. However, the term ``project completion'' refers 
to when the actual construction/reclamation work is completed. This 
could involve more than one grant; likewise, it means that if the 
reclamation is completed at a site after one year of the grant, the 
Form OSM-76 is due at that time. This is necessary to fulfill the 
mandate of Section 403(c) requiring that the inventory be updated 
annually with all completed projects.
    Section 886.24 is amended by revising subsection (a) which requires 
agencies to keep records in accordance with OMB Circular A-102. OSM is 
revising this subsection to properly reference the Grants Management 
Common Rule, which supersedes Circular A-102 for purposes of this Part.
    Section 886.24(b), which mandates certain recordkeeping 
requirements for subgrantees and contractors, is deleted. Designation 
of subsection (a) is removed and paragraph (1) and (2) are redesignated 
as subsections (a) and (b) respectively. In OSM's judgment, the 
information called for by this subsection would be redundant in light 
of the requirements of the Grants Management Common Rule.
    No comments were received on this section. This section is being 
adopted as proposed.
    OSM adds a new Sec. 886.25 to simplify the existing regulation by 
including special Indian land procedures (formerly part 888) in part 
886.
    New Sec. 886.25(a) discusses the Director's authority to mitigate 
emergencies or extreme dangers resulting from past coal mining 
practices and to perform other reclamation on Indian lands not subject 
to an approved reclamation program.
    New Sec. 886.25(b) is a conforming change that would incorporate 
the language of deleted subsection 888.11(a).
    New Sec. 886.25(c) is a conforming change that would incorporate 
the language of deleted subsection 888.11(b).
    New Sec. 886.25(d) is a conforming change that would incorporate 
the language of deleted subsection 888.11(c).
    New Sec. 886.25(e) is a conforming change that would incorporate 
the language of deleted subsection 888.11(d).
    No comments were received on this section, which is therefore 
adopted as proposed.

Part 887--Subsidence Insurance Program Grants

    Section 887.3 discusses the Director's authority to approve or 
disapprove grants for subsidence insurance up to a total of $3 million 
in States with approved reclamation plans. The reference to section 
402(g)(2) of SMCRA is revised to properly reference section 402(g)(1) 
in light of the 1990 amendments to SMCRA. The reference to 
Sec. 872.11(b)(2) is changed to a more general reference to 
Sec. 872.11(b) in order to reference some explanatory language found in 
that paragraph.
    Section 887.10 deals with information collection requirements and 
their submission to OMB for approval. The collection of this 
information will not be required until it has been approved by OMB. OSM 
has revised and amended this section by updating the data contained in 
the section and including the estimated reporting burden per response 
for complying with the information collection requirements. The 
revision also provides the OSM and OMB addresses where comments 
regarding the information collection requirements may be sent.
    Section 887.11 discusses eligibility for subsidence insurance 
program grants under this Part. This section is revised by making minor 
editorial changes. The reference to Sec. 872.11(b)(2) is changed to a 
more general reference to Sec. 872.11(b) in order to reference some 
explanatory language found in that paragraph. In addition, the 
reference to SMCRA section 402(g)(2) is revised to properly reference 
section 402(g)(1) in light of the 1990 amendments to SMCRA.
    Section 887.12 is amended by replacing all references to OMB 
Circular A-102 with references to the Grants Management Common Rule. As 
discussed above, this change reflects the fact that the Grants 
Management Common Rule supersedes OMB Circular A-102 for the purposes 
of this Part.
    In addition, Sec. 887.12(b), which specifies the contents of a 
grant application under this Part, is revised by adding a reference to 
the procedures of 30 CFR part 886. This amendment advances the goal of 
simplifying the AML grants process by providing a uniform set of 
procedures for the grant application process. The effect of this 
amendment is to combine the process of applying for reclamation grants 
under [[Page 9980]] part 886 and for subsidence insurance program 
grants under this Part.
    Section 887.13 is amended by replacing reference to OMB Circular A-
102 with reference to the Grants Management Common Rule. As discussed 
above, this change is made throughout these amendments.
    No comments were received in regard to any of the above sections 
contained in part 887, hence these sections are adopted as proposed.

Part 888--Indian Reclamation Programs

    OSM deletes part 888 and incorporates its provisions into new 
section 886.25. See the discussion of proposed revisions of section 
886.25 above. No comments were received concerning this deletion.

III. Procedural Matters

Paperwork Reduction Act

    The collections of information contained in this rule have been 
approved by the Office of Management and Budget under 44 U.S.C. 3501 et 
seq. and assigned clearance numbers 1029-0059, 1029-0090, and 1029-
0107.

Author

    The principal author of this rule is Norman J. Hess, Division of 
Abandoned Mine Land Reclamation, Office of Surface Mining Reclamation 
and Enforcement, 1951 Constitution Avenue NW., Washington, D.C. 20240; 
Telephone: 202-208-2949.

Executive Order 12866

    This rule has been reviewed under Executive Order 12866.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, 5 U.S.C. et 
seq., the Department of the Interior has determined that this rule will 
not have a significant economic effect on a substantial number of small 
entities.

National Environmental Policy Act

    OSM has prepared a final environmental assessment (EA) of this 
rule, and has made a finding that this rule will not significantly 
affect the quality of the human environment under Section 102(2)(C) of 
NEPA, 42 U.S.C. 4332(2)(C). A finding of no significant impact (FONSI), 
has been approved for this final rule in accordance with OSM procedures 
under NEPA. The EA and FONSI are on file in the OSM Administrative 
Record, room 660, 800 N. Capitol Street NW., Washington, DC.

Executive Order 12778 on Civil Justice Reform

    This rule has been reviewed under the applicable standards of 
Section 2(b)(2) of Executive Order 12778, Civil Justice Reform (56 FR 
55195). In general, the requirements of Section 2(b)(2) of Executive 
Order 12778 are covered by the preamble discussion of this rule. 
Additional remarks follow concerning individual elements of the 
Executive Order:
    A. What is the preemptive effect, if any, to be given to the 
regulation?
    The rule specifies procedures for the Federal grants program under 
Title IV of SMCRA. This rule is not intended to preempt State law 
except that to the extent States wish to participate in the program, 
they must comply with the Federal rules.
    B. What is the effect on existing Federal law or regulations, if 
any, including all provisions repealed or modified?
    This rule modifies the AML grant process regulations pursuant to 
SMCRA as described herein, and is not intended to modify the rules or 
provisions of any other Federal statute. The preceding discussion of 
this rule specifies the Federal regulatory provisions that are affected 
by this rule.
    C. Does the rule provide a clear and certain legal standard for 
affected conduct rather than a general standard, while promoting 
simplification and burden reduction?
    The standards established by this rule are as clear and certain as 
practicable, given the complexity of the topics covered and the 
mandates of SMCRA.
    D. What is the retroactive effect, if any, to be given to the 
regulation?
    This rule is not intended to have retroactive effect.
    E. Are administrative proceedings required before parties may file 
suit in court? Which proceedings apply? Is the exhaustion of 
administrative remedies required?
    No administrative proceedings are required before parties may file 
suit in court challenging the provisions of this rule under Section 
526(a) of SMCRA, 30 U.S.C. 1276(a). Prior to any judicial challenge to 
the application of this rule, however, administrative procedures must 
be exhausted.
    F. Does the rule define key terms, either explicitly or by 
reference to other regulations or statues that explicitly define those 
items?
    Terms that are important to the understanding of this rule are set 
forth in 30 CFR 870.5 and 887.5.
    G. Does the rule address other important issues affecting clarity 
and general draftsmanship of regulations set forth by the Attorney 
General, with the concurrence of the Director of the Office of 
Management and Budget, that are determined to be in accordance with the 
purposes of the Executive Order?
    The Attorney General and the Director of the Office of Management 
and Budget have not issued any guidance on this requirement.

List of Subjects

30 CFR Part 870

    Reporting and recordkeeping requirements, Surface mining, 
Underground mining.

30 CFR Part 886

    Grant programs--natural resources, Reporting and recordkeeping 
requirements, Surface mining, Underground mining.

30 CFR Part 887

    Grant programs--natural resources, Insurance, Surface mining, 
Underground mining.

30 CFR Part 888

    Indian land, Surface mining, Underground mining.

    Dated: January 18, 1995.
Bob Armstrong,
Assistant Secretary--Land and Minerals Management.

    Accordingly, 30 CFR parts 870, 886, 887, and 888 are amended as set 
forth below:
CHAPTER VII--OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, 
DEPARTMENT OF THE INTERIOR SUBCHAPTER R--ABANDONED MINE LAND 
RECLAMATION

PART 870--ABANDONED MINE RECLAMATION FUND--FEE COLLECTION AND COAL 
PRODUCTION REPORT

    1. The authority citation for part 870 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq., as amended.

    2. Section 870.5 is amended by revising the definition of 
``Agency'' to read as follows:


Sec. 870.5  Definitions

 * * * * *
    Agency means the State agency designated by the Governor, or in the 
case of Indian tribes, the Tribal agency designated by the equivalent 
head of an Indian tribe, to administer the State/Indian tribe 
reclamation program and to receive and administer grants under this 
part.
 * * * * *
[[Page 9981]]

    3. The heading of part 886 is revised to read as follows:

PART 886--STATE AND TRIBAL RECLAMATION GRANTS

    4. The authority citation for part 886 is revised to read as 
follows:

    Authority: 30 U.S.C. 1201 et seq., as amended.

    5. Section 886.1 is revised to read as follows:


Sec. 886.1  Scope.

    This part sets forth procedures for grants to States/Indian tribes 
having an approved plan for the reclamation of eligible lands and water 
and other activities necessary to carry out the plan as approved. OSM's 
``Final Guidelines for Reclamation Programs and Projects'' (45 FR 
14810-14819, March 6, 1980) should be used as applicable.
    6. Section 886.3 is revised to read as follows:


Sec. 886.3  Authority.

    The Director is authorized to approve or disapprove applications 
for grants under this part if the total amount of the grants does not 
exceed the moneys appropriated by the Congress. Such moneys are 
distributed annually to the States/Indian tribes.
    7. Section 886.10 is revised to read as follows:


Sec. 886.10  Information collection.

    The collections of information contained in 30 CFR part 886 have 
been approved by the Office of Management and Budget under 44 U.S.C. 
3501 et seq. and assigned clearance number 1029-0059. The information 
will be collected to meet the requirements of Section 405 of the Act, 
which allows the Secretary to grant funds to States/Indian tribes 
pursuant to Section 402(g) and which are necessary to implement the 
State/Indian tribe reclamation program. This information will be used 
by the OSM to ensure that the State/Indian tribe complies with the 
Grants Management Common Rule (43 CFR part 12, subpart C) and sound 
principles of grants management. The obligation to respond is required 
to obtain a benefit in accordance with Pub. L. 95-87. Public reporting 
burden for this information is estimated to average 4 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. Send comments 
regarding this burden estimate or any other aspect of this collection 
of information, including suggestions for reducing the burden, to the 
Office of Surface Mining Reclamation and Enforcement, Information 
Collection Clearance Officer, 1951 Constitution Avenue NW., Room 640 
NC, Washington, D.C. 20240; and the Office of Management and Budget, 
Paperwork Reduction Project (1029-0059), Washington D.C. 20503.
    8. Section 886.11 is revised to read as follows:


Sec. 886.11  Eligibility for grants.

    A State/Indian tribe is eligible for grants under this part if it 
has a reclamation plan approved under part 884 of this chapter.
    9. Section 886.12 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec. 886.12  Coverage and amount of grants.

    (a) An agency may use moneys granted under this Part to administer 
the approved reclamation program and to carry out the specific 
reclamation activities included in the plan and described in the annual 
grant agreement. The moneys may be used to cover costs to the agency 
for services and materials obtained from other State and Federal 
agencies or local jurisdictions according to OMB Circular A-87.
    (b) Grants shall be approved for reclamation and eligible lands and 
water in accordance with 30 U.S.C. 1234 and 1241 and 30 CFR 874.12, 
875.12, and 875.14, and in accordance with the priorities stated in 30 
U.S.C. 1233 and 1241 and 30 CFR 874.13 and 875.15. To the extent 
technologically and economically feasible, public facilities that are 
planned, constructed, or modified in whole or in part with abandoned 
mine land grant funds should use fuel other than petroleum or natural 
gas.
* * * * *
    10. Section 886.13 is revised to read as follows:


Sec. 886.13  Grant period.

    (a) The period for administrative costs of the authorized agency 
should not exceed the first year of the grant.
    (b) The Director shall approve a grant period on the basis of the 
information contained in the grant application showing that projects to 
be funded will fulfill the objectives of 30 U.S.C. 1201 et seq.
    11. Section 886.14 is revised to read as follows:


Sec. 886.14   Annual submission of budget information.

    The agency shall cooperate with OSM in the development of 
information for use by the Director in the preparation of his/her 
requests for appropriation of moneys for reclamation grants. OSM shall 
determine the schedule for submitting this information on an annual 
basis. Funds required to prepare this submission may be included in the 
grants under 30 CFR 886.12.
    12. Section 886.15 is amended by revising and redesignating 
paragraph (a) as (b); by revising and redesignating paragraph (b) as 
(c); by revising and redesignating paragraph (c) as (a); by revising 
paragraph (d); and by removing paragraph (f) to read as follows:


Sec. 886.15   Grant application procedures.

    (a) An agency shall use application forms and procedures specified 
by OSM. A preapplication is not required if the total of the grant 
requested is within the amounts distributed to the State/Indian tribe 
annually by the Director based on the Congressional appropriation.
    (b) OSM shall approve or disapprove a grant application within 60 
days of receipt. If OSM approves an agency's grant application, a grant 
agreement shall be prepared and signed by the agency and the Director.
    (c) If the application is not approved, OSM shall inform the agency 
in writing of the reasons for disapproval and may propose modifications 
if appropriate. The agency may resubmit the application or appropriate 
revised portions of the application. OSM shall process the revised 
application as an original application.
    (d) The agency shall agree to perform the grant in accordance with 
the Act, applicable Federal laws and regulations, and applicable OMB 
and Treasury Circulars.
* * * * *
    13. Section 886.16 is amended by revising paragraphs (a) and (b); 
by removing paragraph (c); by redesignating paragraph (d) as (c); by 
revising redesignated paragraph (c); by redesignating paragraph (e) as 
(f); and by adding new paragraphs (d) and (e) to read as follows:


Sec. 886.16   Grant agreements.

    (a) OSM shall prepare a grant agreement that includes:
    (1) A statement of the work to be covered by the grant; and
    (2) A statement of the approvals of specific actions required under 
this subchapter or the conditions to be met before approvals can be 
given if moneys are included in the grant for these actions.
    (b) The State/Indian tribe may assign functions and funds to other 
Federal, State, or local agencies. The grantee [[Page 9982]] agency 
shall retain responsibility for overall administration of that grant, 
including use of funds and reporting.
    (c) The Director shall sign two copies of the agreement and 
transmit them either by certified mail, return receipt requested, or by 
hand delivery, to the agency for countersignature. The grant 
constitutes an obligation of Federal funds at the time the Director 
signs the agreement. The agency shall have 20 calendar days from the 
date of the Director's signature to execute the agreement in order to 
accept its terms and conditions. Unless an extension of time is 
approved by the Director, failure to execute the agreement within 20 
calendar days shall result in an immediate deobligation of the total 
Federal grant amount.
    (d) Although the funds are obligated when the Director signs the 
agreement, for any expenditure requiring compliance with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), funds 
may not be used by the State/Indian tribe until all actions necessary 
to ensure compliance with NEPA are taken.
    (e) The agency shall submit a completed Form OSM-76 (Abandoned Mine 
Land Reclamation Problem Area Description) showing proposed funding for 
any planned non-emergency project work to the applicable OSM field 
office before it may use funds for construction activities.
* * * * *
    14. Section 886.17 is revised to read as follows:


Sec. 886.17   Grant amendments.

    (a) Grant amendments. (1) A grant amendment is a written alteration 
of the terms or conditions of the grant agreement, whether accomplished 
on the initiative of the agency or OSM. All procedures for grant 
amendments shall conform to those in 43 CFR part 12, subpart C.
    (2) The agency shall promptly notify the Director, or the Director 
shall promptly notify the agency, in writing of events or proposed 
changes that may require a grant amendment. The agency shall notify the 
Director in advance of changes that will result in an extension of the 
grant period or require additional funds, or when the agency plans to 
make a budget transfer from administrative costs to project costs or 
vice versa.
    (b) OSM shall either approve or disapprove the amendment within 30 
days of its receipt.
    15. Section 886.18 is amended by revising paragraphs (a)(2) and 
(a)(3); by redesignating paragraphs (b) and (c) as paragraphs (c) as 
(d) respectively; by adding a new paragraph (b); and by revising the 
newly redesignated paragraphs (c) and (d) to read as follows:


Sec. 886.18  Grant reduction, suspension, and termination.

    (a) * * *
    (2) If an agency fails to obligate moneys distributed and granted 
within three years from the date of grant award, or within an extension 
granted under Sec. 886.13 or Sec. 886.17, OSM may reduce the grant in 
accordance with Sec. 872.11 (b)(1) and (b)(2) of this subchapter.
    (3) If an agency fails to implement, enforce, or maintain an 
approved State regulatory program or any part thereof and, as a result, 
the administration and enforcement grant provided under part 735 of 
this chapter is terminated, OSM shall terminate the grant awarded under 
this part. This paragraph does not apply to Indian tribes who receive 
reclamation funds without having an approved regulatory program.
* * * * *
    (b) Remedies for noncompliance. If a grantee or subgrantee 
materially fails to comply with any term of an award, whether stated in 
a Federal statute or regulation, an assurance in a State plan or 
application, a notice of award, or elsewhere, OSM may take one or more 
the following actions, as appropriate in the circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee;
    (2) Disallow (that is, deny both use of funds and matching credit 
for) all or part of the cost of the activity or action not in 
compliance;
    (3) Wholly or partly suspend or terminate the current award for the 
grantee's or subgrantee's program;
    (4) Withhold further grant awards for the program; or
    (5) Take other remedies that may be legally available.
    (c) Grant reduction, suspension, and termination procedures. (1) 
The OSM official delegated grant signature authority shall give the 
agency at least 30 days written notice of intent to reduce, suspend, or 
terminate a grant. OSM must send this notice by certified mail, return 
receipt requested. OSM shall include in the notice the reasons for the 
proposed action and the proposed effective date of the action.
    (2) OSM shall afford the agency opportunity for consultation and 
remedial action before reducing or terminating a grant.
    (3) The OSM official delegated grant signature authority shall 
notify the agency of the termination, suspension, or reduction of the 
grant in writing by certified mail, return receipt requested.
    (4) Upon termination, the agency shall refund or credit to the Fund 
that remaining portion of the grant money not encumbered. However, the 
agency shall retain any portion of the grant that is required to meet 
contractual commitments made before the effective date of termination.
    (5) Upon receiving notification of OSM's intent to terminate the 
grant, the agency shall not make any new commitments without OSM's 
approval.
    (6) OSM may allow termination costs as determined by applicable 
Federal cost principles listed in Office of Management and Budget 
Circular A-87.
    (7) Either OSM or the agency may terminate or reduce a grant if 
both parties agree that continuing the program would not produce 
beneficial results commensurate with the further expenditure of funds. 
Such a termination for convenience shall be handled as an amendment and 
shall be signed by the OSM official delegated grant signature 
authority.
    (d) Appeals. (1) Within 30 days of OSM's decision to reduce, 
suspend, or terminate a grant, the agency may appeal the decision to 
the Director.
    (i) The agency shall include in the appeal a statement of the 
decision being appealed and the facts that the agency believes justify 
a reversal or modification of the decision.
    (ii) The Director shall decide the appeal within 30 days of 
receipt.
    (2) Within 30 days of the Director's decision to reduce, suspend, 
or terminate a grant, the agency may appeal the decision to the 
Secretary.
    (i) The agency shall include in the appeal a statement of the 
decision being appealed and the facts that the agency believes justify 
a reversal or modification of the decision.
    (ii) The Secretary shall act upon the appeal within 30 days of 
receipt.
    16. Section 886.19 is revised to read as follows:


Sec. 886.19  Audit.

    The agency shall arrange for an independent audit pursuant to 
guidance provided by the General Accounting Office and the Office of 
Management and Budget.
    17. Section 886.20 is revised to read as follows:


Sec. 886.20  Administrative procedures.

    The agency shall follow administrative procedures governing 
accounting, payment, property, and related requirements contained in 43 
CFR part 12, subpart C and use the property form specified by OSM and 
[[Page 9983]] approved by the Office of Management and Budget.
    18. Section 886.21 is amended by revising paragraph (a) to read as 
follows:


Sec. 886.21  Allowable costs.

    (a) Allowable reclamation costs include actual costs of 
construction, operation and maintenance, planning and engineering, 
construction inspection, other necessary administrative costs, and up 
to 90 percent of the costs of the acquisition of land.
* * * * *
    19. Section 886.22 is amended by revising paragraphs (a) and (d) to 
read as follows:


Sec. 886.22  Financial management.

    (a) The agency shall account for grant funds in accordance with the 
requirements of 43 CFR part 12, subpart C. Accounting for grant funds 
must be accurate and current.
* * * * *
    (d) When advances are made, they should be made as closely as 
possible to the actual time of the disbursement.
* * * * *
    20. Section 886.23 is revised to read as follows:


Sec. 886.23  Reports.

    (a) For each grant, the agency shall annually submit to OSM 
reporting forms specified by OSM.
    (b) At the completion of each grant, the agency shall submit a 
completed Form OSM-76 and any other closeout reports specified by OSM.
    21. Section 886.24 is amended by revising paragraph (a) and 
deleting its designation as (a); revising paragraph (a)(1) and 
redesignating as (a); redesignating paragraph (a)(2) as (b); and by 
removing the existing paragraph (b) to read as follows:


Sec. 886.24  Records.

    The agency shall maintain complete records in accordance with 43 
CFR part 12, subpart C. This includes, but is not limited to, books, 
documents, maps, and other evidence and accounting procedures and 
practices sufficient to reflect properly--
    (a) The amount and disposition of all assistance received for the 
program; and
    (b) * * *
    22. Section 886.25 is added to read as follows:


Sec. 886.25  Special Indian lands procedures.

    (a) This section applies to Indian lands not subject to an approved 
Tribal reclamation program. The Director is authorized to mitigate 
emergency situations or extreme danger situations arising from past 
mining practices and begin reclamation of other areas determined to 
have high priority on such lands.
    (b) The Director is authorized to receive proposals from Indian 
tribes for projects that should be carried out on Indian lands subject 
to this Section and to carry out these projects under parts 872 through 
882 of this chapter.
    (c) For reclamation activities carried out under this section on 
Indian lands, the Director shall consult with the Indian tribe and the 
Bureau of Indian Affairs office having jurisdiction over the Indian 
lands.
    (d) If a proposal is made by an Indian tribe and approved by the 
Director, the Tribal governing body shall approve the project plans. 
The costs of the project may be charged against the money allocated to 
OSM under Sec. 872.11(b)(5).
    (e) Approved projects may be carried out directly by the Director 
or through such arrangements as the Director may make with the Bureau 
of Indian Affairs or other agencies.

PART 887--SUBSIDENCE INSURANCE PROGRAM GRANTS

    23. The authority citation for part 887 is revised to read as 
follows:

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

    24. Section 887.3 is revised to read as follows:


Sec. 887.3  Authority.

    The Director is authorized to approve or disapprove applications 
for grants up to a total amount of $3,000,000 for each State with an 
approved State reclamation plan provided moneys are available under 
Sec. 872.11(b) of this chapter and Section 402(g)(1) of Pub. L. 95-87 
(30 U.S.C. 1232).
    25. Section 887.10 is revised to read as follows:


Sec. 887.10  Information collection.

    The collections of information contained in 30 CFR part 887 have 
been approved by the Office of Management and Budget under 44 U.S.C. 
3501 et seq., and assigned clearance number 1029-0107. The information 
will be used to grant funds to State regulatory authorities and Indian 
tribes to administer their subsidence insurance program. Response is 
required to obtain a benefit in accordance with 30 U.S.C. 1201 et seq. 
Public reporting burden for this information is estimated to average 40 
hours per response, including the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing the 
burden, to the Office of Surface Mining Reclamation and Enforcement, 
Information Collection Clearance Officer, 1951 Constitution Avenue, 
N.W., Room 640 NC, Washington, D.C. 20240; and the Office of Management 
and Budget, Paperwork Reduction Project (1029-0107), Washington, D.C. 
20503.
    26. Section 887.11 is revised to read as follows:


Sec. 887.11  Eligibility for grants.

    A State is eligible for grants under this part if it has a State 
reclamation plan approved under part 884 of this chapter and if it has 
funds available under Sec. 872.11(b) of this chapter and Section 
402(g)(1) of SMCRA, as amended, 30 U.S.C. 1232.
    27. Section 887.12 is amended by revising paragraph (a), the 
introductory sentence of paragraph (b), and paragraph (e) to read as 
follows:


Sec. 887.12  Coverage and amount of grants.

    (a) An agency may use moneys granted under this part to develop, 
administer, and operate a subsidence insurance program to insure 
private property against damages caused by subsidence resulting from 
underground coal mining. The moneys may be used to cover costs to the 
agency for services and materials obtained from other State and Federal 
agencies or local jurisdictions according to OMB Circular A-87. Moneys 
granted may be used to cover capitalization requirements and initial 
reserve requirements mandated by applicable State law provided use of 
such moneys is consistent with the Grants Management Common Rule (43 
CFR part 12, subpart C).
    (b) The grant application shall be submitted under the procedures 
of 30 CFR part 886 and contain the following:
* * * * *
    (e) Insurance premiums shall be considered program income and must 
be used to further eligible subsidence insurance program objectives in 
accordance with 43 CFR part 12, subpart C.
    28. Section 887.13 is revised to read as follows:


Sec. 887.13  Grant period.

    The grant funding period shall not exceed eight years from the time 
the grant is approved by OSM. Unexpended funds remaining at the end of 
any grant period shall be returned according to the 43 CFR part 12, 
subpart C. [[Page 9984]] 

PART 888--[REMOVED]

    29. Part 888 is removed.

[FR Doc. 95-4259 Filed 2-21-95; 8:45 am]
BILLING CODE 4310-05-M