89 FR 158 pgs. 66214-66218 - Kentucky Regulatory Program
Type: RULEVolume: 89Number: 158Pages: 66214 - 66218
Pages: 66214, 66215, 66216, 66217, 66218Docket number: [SATS No. KY-260-FOR; Docket ID: OSM-2018-0008; S1D1S SS08011000 SX064A000 245S180110; S2D2S SS08011000 SX064A000 24XS501520]
FR document: [FR Doc. 2024-18040 Filed 8-14-24; 8:45 am]
Agency: Interior Department
Sub Agency: Surface Mining Reclamation and Enforcement Office
Official PDF Version: PDF Version
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DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
30 CFR Part 917
[SATS No. KY-260-FOR; Docket ID: OSM-2018-0008; S1D1S SS08011000 SX064A000 245S180110; S2D2S SS08011000 SX064A000 24XS501520]
Kentucky Regulatory Program
AGENCY:
Office of Surface Mining Reclamation and Enforcement, Interior.
ACTION:
Final rule; approval of amendment, with one exception.
SUMMARY:
We, the Office of Surface Mining Reclamation and Enforcement (OSMRE), are approving an amendment, with one exception, to the Kentucky regulatory program (Kentucky program) under the Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act). We are approving changes to statutory provisions that involve civil penalty fund distributions, self-bonding, and major permit revisions related to underground mining. We are not approving a provision that involves civil penalty escrow accounts.
DATES:
The rule is effective September 16, 2024.
FOR FURTHER INFORMATION CONTACT:
Michael Castle, Field Office Director, Lexington Field Office, Office of Surface Mining Reclamation and Enforcement, Telephone: (859) 260-3900, email: mcastle@osmre.gov.
SUPPLEMENTARY INFORMATION:
I. Background on the Kentucky Program
II. Submission of the Amendment
III. OSMRE's Findings
IV. Summary and Disposition of Comments
V. OSMRE's Decision
VI. Statutory and Executive Order Reviews
I. Background on the Kentucky Program
Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). Based on these criteria, the Secretary of the Interior conditionally approved the Kentucky program effective May 18, 1982. You can find background information on the Kentucky program, including the Secretary's findings, the disposition of comments, and conditions of approval in the May 18, 1982, Federal Register (47 FR 21434). You can also find later actions concerning Kentucky's program and program amendments at 30 CFR 917.11, 917.12, 917.13, 917.15, 917.16, and 917.17. The regulatory authority in Kentucky is the Kentucky Energy and Environment Cabinet, Department of Natural Resources (herein referred to as the Cabinet).
II. Submission of the Amendment
By letter dated September 19, 2018 (Administrative Record Number KY-2007-01), the Cabinet submitted an amendment to its program under SMCRA (30 U.S.C. 1201 et seq. ), docketed as KY-260-FOR. The amendment seeks to revise the Kentucky Revised Statutes (KRS) to include statutory changes that involve civil penalty escrow accounts, civil penalty fund distributions, self-bonding, and major permit revisions related to underground mining.
The General Assembly of the Commonwealth of Kentucky enacted statutory changes through House Bill 261, which was signed by the Governor on April 2, 2018, and became effective on July 14, 2018. See 2018 Ky. Acts ch. 85. These changes are codified at KRS Chapter 350, Surface Coal Mining, sections 350.0301, 350.064, 350.070, 350.518, and 350.990. The Cabinet was not required to promulgate administrative regulations as a result of the law.
We announced receipt of the proposed amendment in the May 10, 2019, Federal Register (84 FR 20595) (Administrative Record No. KY-2007-17). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on these provisions. We did not hold a public hearing or meeting because none was requested. The public comment period ended on June 10, 2019. No public comments were received.
III. OSMRE's Findings
[top] The following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are
A. Civil Penalty Escrow Account, KRS 350.0301, Petition challenging determination of cabinet-Conduct of hearings-Administrative regulations-Secretary may designate deputy secretary to sign final orders.
Kentucky seeks to revise KRS 350.0301(5) by removing language requiring Kentucky's administrative regulations to include provisions that: (1) require that operators place civil penalty funds in escrow before a formal hearing on the amount of the assessment of the civil penalties; and (2) allow Kentucky to waive the escrow requirement for individuals who demonstrate with substantial evidence an inability to pay the proposed civil penalty assessment into escrow.
OSMRE Finding: In 2005, the Supreme Court of Kentucky decided Commonwealth of Kentucky Natural Resources and Environmental Protection Cabinet v. Kentec Coal Co., Inc., 177 S.W.3d 718 (Ky. 2005), in which the Court concluded that Kentucky's prepayment requirements, codified at the time in the Kentucky Administrative Regulations at 405 KAR 7:092, were in violation of the due process and equal protection clauses of the United States Constitution and section 2 of the Kentucky Constitution, which prohibits arbitrary State action. In response to the Court's decision, Kentucky first removed notice of its prepayment requirements from two documents provided to operators, a Notice of Assessment of Civil Penalties and a Penalty Assessment Conference Officer's Report, and Kentucky added language to those documents making clear that prepayment was no longer required to request a formal administrative hearing. By letter dated March 28, 2006, Kentucky sent us notice of these revisions, which we docketed as Program Amendment No. KY-250-FOR and subsequently disapproved on September 18, 2006 (71 FR 54586). 1
Footnotes:
1 ?In 2017, Kentucky removed the prepayment requirement from 405 KAR 7:092, see 43 Ky.R. 1876 (April 1, 2017), and subsequently recodified this provision to 400 KAR 1:110, effective August 4, 2017.
In our decision of September 18, 2006 (71 FR 54586), we concluded that removing the requirement to place civil penalty funds in escrow prior to a formal hearing on the assessment renders the program less stringent than section 518(c) of SMCRA, 30 U.S.C. 1268, and less effective than the Federal regulations at 30 CFR 845.19(a), and therefore disapproved the amendment. As stated in that document, the Supreme Court of Kentucky rulings notwithstanding, section 518(c) of SMCRA and the Federal regulations require prepayment of a proposed penalty if a hearing is requested. Section 518(c) of SMCRA states that should the person charged with the penalty wish to contest the amount of the penalty or the fact of the violation, that person must forward the proposed amount of the penalty to the Secretary for placement into an escrow account pending resolution of the contest. 30 U.S.C. 1268(c). Section 518(c) further states that failure to forward the money accordingly shall result in a waiver of all legal rights to contest the violation or the amount of the penalty. Id. The Federal regulations repeat this requirement, specifying that the petition and proposed penalty amount must be submitted to the Office of Hearings and Appeals. 30 CFR 845.19(a). Federal courts of appeals have found these provisions consistent with the due process and equal protection requirements of the United States Constitution. See, e.g., Graham vs. Office of Surface Mining, Reclamation and Enforcement, 722 F.2d 1106 (3d Cir. 1983).
Kentucky's proposed revision to KRS 350.0301 directly relates to the same revisions that we disapproved on September 18, 2006, codified at 30 CFR 917.12(f). Kentucky's further steps to remove the requirement to prepay the assessed penalty into escrow when administrative hearing is requested continues to render Kentucky's program less stringent that section 518(c) of SMCRA and less effective than the Federal regulations at 30 CFR 845.19(a), and therefore are not approved.
B. Self-Bonding-KRS 350.064, Reclamation bond to be filed by applicant.
Kentucky seeks to revise KRS 350.064(2) by removing language that allows self-bonding in the State. A self-bond is a bond of the applicant and is backed only by the overall financial health of the applicant, without separate surety or specific pledges of collateral. In order to have qualified and received approval for self-bond in Kentucky, the applicant must successfully demonstrate a history of financial solvency and continuous operation and the existence of a suitable agent to receive service of process.
OSMRE Finding: Section 509(c) of SMCRA, 30 U.S.C. 1259, and its implementing regulations at 30 CFR 800.4(d), Regulatory Authority Responsibilities; 30 CFR 800.5, Definitions; 30 CFR 800.12, Form of the Performance Bond; and 30 CFR 800.23, Self-bonding, permit a regulatory authority to accept different forms of performance bonds, including self-bonds, as a mechanism to ensure that funds will be available to complete the reclamation plan if the work has to be performed by the regulatory authority in the event of a forfeiture. The regulatory authority may accept a self-bond without separate surety when the applicant demonstrates, to the satisfaction of the regulatory authority, the existence of a suitable agent to receive service of process and a history of financial solvency and continuous operation sufficient for authorization to self-insure or bond such amount. Some State regulatory programs have accepted self-bonds to guarantee reclamation.
It is reasonable that Kentucky reconsider acceptance of this type of performance bond as a reclamation guarantee. In fact, there are no active self-bonds being held by Kentucky at this time. SMCRA and its implementing regulations do not require that a regulatory authority include a self-bond in their regulatory programs; therefore, we find that the elimination of self-bonding in the Kentucky program renders the program no less stringent than SMCRA and no less effective than the Federal regulations, and we approve this change.
C. Permit Revisions-KRS 350.070, Permit revisions.
Kentucky seeks to revise KRS 350.070(1) by removing language that requires an operator to submit a major permit revision application for an extension of an underground mining area that is more than incidental boundary revisions, but which does not include planned subsidence or other new proposed surface disturbances. Kentucky also seeks to delete subsection (6)(b), which defines the maximum number of acres for a revision to be considered an incidental boundary revision involving underground operations.
[top] OSMRE Finding: Kentucky originally added the above requirement, which we approved, through Kentucky House Bill 707 of 1994, enacted 1995 Ky. Acts ch. 301. See 60 FR 33110 (June 27, 1995). In our approval, we explained that the Federal regulations do not require that areas overlying proposed underground workings be included in the permit area if no surface disturbance is planned. Id. At 33113. Therefore, under those circumstances, where no surface disturbance is planned by an extension
For the same reason that we approved the inclusion of this requirement in 1994, we approve its removal. Neither SMCRA nor the Federal regulations require Kentucky to include those areas within the permit area. Thus, this amendment does not render Kentucky's program less stringent than SMCRA or less effective than the Federal regulations at 30 CFR 774.13, Permit revisions, or 30 CFR part 784, Underground Mining Permit Applications-Minimum Requirements for Reclamation and Operation Plan.
D. Civil Penalty Funds and Distribution-KRS 350.518, [relating to Kentucky's bond pool], and KRS 350.990, Penalties.
Kentucky seeks to delete KRS 350.518(11), which requires penalty funds in excess of $800,000 in any fiscal year to be equally deposited between: (a) the Kentucky Reclamation Guaranty Fund (KRGF), which finances Kentucky's alternative bonding system, or bond pool; and (b) the Abandoned Mine Land (AML) supplemental fund, which was established under KRS 350.139 and consists primarily of interest generated on funds derived from the forfeiture of conventional bonds, and which is to be used to supplement forfeited conventional bonds that are inadequate to complete the reclamation plan. In a complementary revision, Kentucky seeks to delete similar language from KRS 350.990(1). KRS 350.990(1) further directs that the money disbursed to the KRGF be used for the purposes set forth in KRS 350.500-350.521 (relating to Kentucky's bond pool) and KRS 350.595 (relating to Kentucky's Abandoned Mine Land Enhancement Program, which provides partial bond coverage for eligible remining operations), and that money disbursed to the AML supplemental fund established under KRS 350.139(1) be used for the purposes of that section. In place of these deleted allocations, Kentucky seeks to add language to KRS 350.990(1) that directs that penalties in excess of $800,000 in any fiscal year be deposited into the restricted fund account of the Office of the Commissioner of the Department for Natural Resources to be disbursed for the purposes set out in KRS chapters 350 (Surface Coal Mining), 351 (Department for Natural Resources), and 352 (Mining Regulations). KRS chapters 351 and 352 consist of Kentucky's coal mine safety laws.
OSMRE Finding: We approved the provision to equally distribute civil penalty funds in excess of $800,000 into two specific reclamation funds in KY-218 on May 10, 2000 (65 FR 29949). At that time, civil penalties collected in any fiscal year up to $800,000 were deposited with the State Treasury to the credit of Kentucky's general fund, see KRS 350.139, and any sums in excess of $800,000 were to go to the Kentucky Bond Pool Fund (BPF) (the predecessor to the KRGF). From there, one half of the excess would go to a new bond forfeiture supplemental fund but only when the balance of the BPF was above the maximum of the operating range necessary to ensure solvency ($16 million at the time). A review of the adequacy of the BPF was conducted in 2011; the findings concluded that reclamation performance bonds were not always sufficient to complete reclamation required in approved permits. As a result, the program was amended by KY-256 on January 29, 2018 (83 FR 3948) to ensure bond amounts were adequate to complete reclamation in the event of forfeiture. As part of that effort, Kentucky eliminated the BPF and replaced it with the KRGF, which carried greater safeguards, such as periodic actuarial studies to determine the amount necessary to ensure its solvency. At the same time, Kentucky removed the $16 million minimum balance and, instead, required periodic actuarial studies in order to determine the necessary balance of the KRGF.
In our 2000 approval, we noted that Kentucky was not diverting any money away from the BPF except for proceeds in excess of the amount necessary to guarantee its solvency. See 65 FR 29949 at 29950. In our 2018 approval, we noted that the safeguards provided in the KRGF ensure the KRGF's solvency, and therefore removing the commitment of civil penalty money to the KRGF to achieving a particular minimum balance was not inconsistent with SMCRA or its implementing regulations. See 83 FR 3948 at 3953.
The Kentucky revisions described above broaden the potential uses of civil penalty funds to any purposes set out in KRS chapters 350, 351, and 352, which would include the current purposes laid out for the KRGF and the AML supplemental fund established under chapter 350. Kentucky has the discretion to allocate its funds in a manner that supports the objectives of its program. Unlike performance bond funds, no Federal requirements exist that direct penalty funds be used for reclamation. Our regulations at 30 CFR 845.21 explain our use of Federal civil penalties for reclamation subject to Congressional authorization; however, this provision was the result of a continuing resolution by Congress in 1987, which, for the first time, authorized us to use civil penalty money in this manner and was not part of the broader SMCRA program required of the States. See 53 FR 16016 (May 4, 1988). Because, as was the case when we approved this requirement in 2000, neither SMCRA nor the Federal regulations require civil penalty funds to be used on reclamation, Kentucky's program is not less stringent than SMCRA or less effective than the Federal regulations at 30 CFR 845.21 by using these funds for other purposes; therefore, we approve these revisions.
IV. Summary and Disposition of Comments
Public Comments
We solicited public comments and provided an opportunity for a public hearing on the proposed amendment in the May 10, 2019, Federal Register document announcing receipt of this amendment (84 FR 20595). Because no one requested an opportunity to speak at a public hearing, none was held. We did not receive any comments from the public.
Federal Agency Comments
On December 3, 2018, under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we requested comments on the amendment from various Federal agencies with an actual or potential interest in the Kentucky program (Administrative Record Nos. KY-2007-08, 09, 10, 11, 12, 13, 14). We did not receive any comments.
Environmental Protection Agency (EPA) Concurrence and Comments
Under 30 CFR 732.17(h)(11)(ii), we are required to obtain written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq. ). None of the revisions that Kentucky proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment. However, on December 3, 2018, under 30 CFR 732.17(h)(11)(i), we requested comments from the EPA on the amendment (Administrative Record No. KY-2007-09 and 10). We did not receive any comments from EPA.
State Historical Preservation Officer (SHPO) and the Advisory Council on Historic Preservation (ACHP)
[top] Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and the ACHP on amendments
V. OSMRE's Decision
Based on the above findings, we are approving Kentucky's amendment submitted to OSMRE on September 19, 2018 (Administrative Record No. KY-2007-01), with one exception. For the reasons stated above, removal of the requirement for civil penalty funds to be placed in escrow before a formal hearing is not approved, and therefore the requirement is not eliminated from Kentucky's program.
To implement the approval of the remaining four provisions, we are amending the Federal regulations at 30 CFR part 917 that codify decisions concerning the Kentucky program. In accordance with the Administrative Procedure Act (5 U.S.C. 500 et seq. ), this rule will take effect 30 days after the date of publication.
VI. Statutory and Executive Order Reviews
Executive Order 12630-Governmental Actions and Interference With Constitutionality Protected Property Rights
This rule would not effect a taking of private property or otherwise have taking implications that would result in private property being taken for government use without just compensation under the law. Therefore, a takings implication assessment is not required. This determination is based on an analysis of the relevant Federal regulations.
Executive Order 12866-Regulatory Planning and Review, Executive Order 13563-Improving Regulation and Regulatory Review, and Executive Order 14094-Modernizing Regulatory Review
Executive Order 12866, as amended by Executive Order 14094, provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB) will review all significant rules. Pursuant to OMB guidance, dated October 12, 1993 (OMB Memo M-94-3), the approval of State program and/or plan amendments is exempted from OMB review under Executive Order 12866, as amended by Executive Order 14094. Executive Order 13563, which reaffirms and supplements Executive Order 12866, retains this exemption.
Executive Order 12988-Civil Justice Reform
The Department of the Interior has reviewed this rule as required by section 3(a) of Executive Order 12988. The Department has determined that this Federal Register document meets the criteria of section 3 of Executive Order 12988, which is intended to ensure that the agency review its legislation and proposed regulations to eliminate drafting errors and ambiguity; that the agency write its legislation and regulations to minimize litigation; and that the agency's legislation and regulations provide a clear legal standard for affected conduct rather than a general standard, and promote simplification and burden reduction. Because section 3 focuses on the quality of Federal legislation and regulations, the Department limited its review under this Executive order to the quality of this Federal Register document and to changes to the Federal regulations. The review under this Executive order does not extend to the language of the State regulatory program or to the program amendment that the Commonwealth of Kentucky drafted.
Executive Order 13132-Federalism
This rule has potential federalism implications as defined under section 1(a) of Executive Order 13132, which directs agencies to "grant the States the maximum administrative discretion possible" with respect to Federal statutes and regulations administered by the States. Kentucky, through its approved regulatory program, implements and administers SMCRA and its implementing regulations at the State level. This rule approves an amendment to the Kentucky program submitted and drafted by the State and, thus, is consistent with the direction to provide maximum administrative direction to States.
Executive Order 13175-Consultation and Coordination With Indian Tribal Governments
The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175 and have determined that it has no substantial direct effects on the distribution of power and responsibilities between the Federal Government and Tribes. The basis for this determination is that our decision on the Kentucky program does not include Indian lands as defined by SMCRA or other Tribal lands and it does not affect the regulation of activities on Indian lands or other Tribal lands. Indian lands under SMCRA are regulated independently under the applicable Federal Indian program. The Department's consultation policy also acknowledges that our rules may have Tribal implications where the State proposing the amendment encompasses ancestral lands in areas with mineable coal. We are currently working to identify and engage appropriate Tribal stakeholders to devise a constructive approach for consulting on these amendments.
Executive Order 13211-Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
Executive Order 13211 requires agencies to prepare a Statement of Energy Effects for a rulemaking that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not significant energy action under the definition in Executive Order 13211, a Statement of Energy Effects is not required.
National Environmental Policy Act
Consistent with sections 501(a) and 702(d) of SMCRA (30 U.S.C. 1251(a) and 1292(d), respectively) and the U.S. Department of the Interior Departmental Manual, part 516, section 13.5(A), State program amendments are not major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C).
Paperwork Reduction Act
This rule does not include requests and requirements of an individual, partnership, or corporation to obtain information and report it to a Federal agency. As this rule does not contain information collection requirements, a submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not required.
Regulatory Flexibility Act
[top] This rule will not have a significant economic impact on a substantial number of small entities under the
Small Business Regulatory Enforcement Fairness Act
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based on an analysis of the State submittal, which mostly reflects State policy choices not required by or prohibited by Federal law. For the part of this rule disapproving one of the State's proposed revisions, the determination is based on an analysis of the corresponding Federal regulations, which were determined not to constitute a major rule.
Unfunded Mandates Reform Act
This rule will not impose an unfunded mandate on State, local, or Tribal governments, or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. This determination is based on an analysis of the State submittal, which mostly reflects State policy choices not required by or prohibited by Federal law. For the part of this rule disapproving one of the State's proposed revisions, the determination is based on an analysis of the corresponding Federal regulations, which were determined not to impose an unfunded mandate. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.
List of Subjects in 30 CFR Part 917
Intergovernmental relations, Surface mining, Underground mining.
Thomas D. Shope,
Regional Director, North Atlantic-Appalachian Region.
For the reasons set out in the preamble, the Office of Surface Mining Reclamation and Enforcement amends 30 CFR part 917 as set forth below:
PART 917-KENTUCKY
1. The authority citation for part 917 continues to read as follows:
Authority:
30 U.S.C. 1201 et seq.
2. Section 917.12 is amended by adding paragraph (i) to read as follows:
§?917.12 State regulatory program and proposed program amendment provisions not approved.
(i) We are not approving revisions to KRS 350.0301 made by 2018 Ky. Acts ch. 85 that would have eliminated a requirement that Kentucky promulgate regulations providing that operators must place proposed civil penalty assessments into an escrow account prior to a formal hearing on the amount of the assessment.
3. Section 917.15 is amended by adding a new entry to the table in paragraph (a) in chronological order by "Date of Final Publication" to read as follows:
§?917.15 Approval of Kentucky regulatory program amendments.
(a) * * *
| Original amendment submission date | Date of final publication | Citation/description |
|---|---|---|
| * * * * * * * | ||
| September 19, 2018 | August 15, 2024 | KRS 350.064, KRS 350.070, KRS 350.518, and KRS 350.990. |
[FR Doc. 2024-18040 Filed 8-14-24; 8:45 am]
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