Opinion ID: 501787
Heading Depth: 3
Heading Rank: 1

Heading: Incremental and Phased Bonding

Text: 178 To facilitate bonding arrangements by mine operators, the Secretary has authorized the states (as regulatory authority) to implement plans allowing both incremental and phased bonding. Under the incremental bonding prescription, 30 C.F.R. Sec. 800.11(b), 37 an operator is not required to bond all at once the entire area to be mined in a given permit term. 38 Instead, the state plan may permit the operator to bond, and then commence operations on, smaller units, specifically, [i]ndependent increments ... of sufficient size and configuration to provide for efficient reclamation operations. 30 C.F.R. Sec. 800.11(b)(4). 179 Under the Secretary's authorization for phased bonding, 30 C.F.R. Sec. 800.13(a)(2), 39 an operator need not post one bond covering all phases of reclamation. Instead, the regulatory authority may allow the operator to obtain separate bonds for each of the three phases of reclamation (backfilling, regrading and drainage control; revegetation; all remaining reclamation), provided that all phase bonds are posted at the outset, that each bond is sufficient to cover reclamation work in the phase for which it is written, and that the sum of the bonds posted equals or exceeds the total amount needed to complete the reclamation plan for the entire area covered. 30 C.F.R. Sec. 800.13(a)(2); see 48 FED.REG. 32936, 32938, 32941 (1983). 40 As each reclamation phase is completed, the bond for that phase, subject to limitations, 41 will be released. If the mine operator defaults, [f]orfeiture of phase bonds ... will involve forfeiture of the total of the phase bonds remaining for the area or increment. 48 FED.REG. 32956 (1983). The Secretary has repeated his assurance that later phase bonds could be forfeited in the event that an earlier bond was released before the need for additional work was discovered. Supplemental Brief for the Secretary of the Interior at 2, 4-5; Correction to Supplemental Brief for the Secretary of the Interior at 2. 180 The district court found the incremental bonding allowance impermissible under Sec. 509(a) of the Act; 42 the court read that provision to require each bond to cover no less than the entire area to be mined in a given permit term. PSMRL II (Round II), 21 E.R.C. at 1743. Phased bonding, the district court held, was inconsistent with Sec. 509(b) of the Act; 43 the court read that provision to prohibit break[ing] the bond into specific phases of reclamation. Id. at 1744. Rejecting the Secretary's argument that Sec. 509(c) of the Act allows both bonding forms as alternative system[s], 44 the district court ruled that Sec. 509(c) countenances only alternatives to bonding, id. at 1743, not alternative bonding schemes. 181 We pretermit the question whether incremental and/or phased bonding can be accommodated within the terms of Secs. 509(a) and (b) of the Act. Section 509(c), we hold, reasonably could be read by the Secretary to permit his approval of alternative bonding methods that will fulfill the purposes of the Act. While Sec. 509(c) is not a model of the drafter's art, and the district court's reading of the provision is a plausible one, we defer to the reasonable interpretation ultimately proffered by the Secretary. Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 844-45, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984); Chemical Mfrs. Ass'n v. NRDC, 470 U.S. 116, 125, 105 S.Ct. 1102, 1107, 84 L.Ed.2d 90 (1985). Section 509(c) reads, in relevant part: 182 [I]n lieu of the establishment of a bonding program, as set forth in this section, the Secretary may approve as part of a State or Federal program an alternative system that will achieve the objectives and purposes of the bonding program pursuant to this section. 183 (Emphasis added.) Under the district court's construction, Congress established the sole permissible bonding program, but allowed the Secretary to approve a system alternative to bonding, e.g., insurance. The Secretary, in contrast, reads the Act to permit any system that fulfills the Act's objectives and purposes; both bonding and nonbonding programs, the Secretary maintains, could fit that description. 184 The Conference Report on the bill that became the Act, we think it significant, accords with the Secretary's ultimate interpretation. The Report observed that the House bill 185 included discretionary authority for alternative bonding approaches providing the objectives and purposes of this bonding program are met. The Senate receded. 186 H.R. CONF.REP. NO. 493, 95th Cong., 1st Sess. 103 (1977), reprinted in 1977 U.S.CODE CONG. & ADMIN.NEWS 593, 735 (emphasis added). The dispositive question, it thus appears to us, is whether the Secretary rationally concluded that the incremental and phased bonding plans he permitted will achieve the [same] objectives and purposes as those achievable under a plan indisputably consistent with Secs. 509(a) and (b) of the Act. SMCRA Sec. 509(c). 187 The district court rejected incremental bonding because the area covered by such a bond could be (and likely would be) smaller than the area to be mined in the course of one permit term. But under the Secretary's prescription, no surface area could be disturbed until the regulatory authority determined that the amount of bond posted for that area was sufficient to assure completion of the reclamation plan in the event of forfeiture. 30 C.F.R. Sec. 800.11(c); Sec. 800.14(b); see 48 FED.REG. 32937 (1983). True, the regulation allows an operator to confine bonding ahead to that portion of the permitted area that the operator plans to affect in the near future. But so long as the bond is calculated (as 30 C.F.R. Sec. 800.14(b) requires) at the full cost of reclaiming that particular increment of land, and the size and configuration of the increment (as 30 C.F.R. Sec. 800.11(b)(4) requires) are appropriate for efficient reclamation, we do not see how the arrangement appreciably heightens the risk that any land will be left unreclaimed. 188 Phased bonding, too, measures up to the standard we deem critical. We reiterate that [t]he total of the phase bonds must be sufficient to cover costs to the regulatory authority to complete the reclamation plan, and bond[s] covering all three phases must be posted before disturbance of the area or increment bonded. 48 FED.REG. 32936 (1983). 189 Phase bonds are all posted before any land is disturbed, and are individually released as each reclamation phase is accomplished, with limits on release comparable to those applicable to a single bond. See supra note 42. If the operator defaults and additional work on a completed phase becomes necessary, remaining bonds can be used to complete that reclamation work, but coverage may be inadequate to carry out in full the later reclamation stage(s). A single bond covering all three reclamation phases, we note, may be released in stages as each phase is accomplished. SMCRA Sec. 519(c) (60% may be released upon backfilling, regrading and drainage control; an unspecified percent may be released upon completion of revegetation and other requirements; the remainder may be released upon expiration of the period of operator liability following revegetation). If, subsequent to partial release of the single bond, additional work on an earlier phase is required, the operator's default will have similar consequences: the unreleased portion of the bond can be used to complete that work, but an inadequate amount may remain to fulfill the subsequent phase(s). Thus phased bonding appears to create no appreciably greater risk of incomplete reclamation than does a single bond. 190 In sum, the Secretary reasonably construed Sec. 509(c) of the Act, and responsibly determined that the incremental and phased bonding programs he authorized fulfilled the statutory objective: to ensure, to the extent feasible, completion of the reclamation plan in the event that an operator defaults. We therefore reverse the district court's judgment with respect to incremental and phased bonding and uphold the Secretary's prescriptions. 191