[Federal Register: December 3, 2007 (Volume 72, Number 231)]
[Rules and Regulations]
[Page 67999-68031]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de07-13]
[[Page 67999]]
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Part II
Department of the Interior
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Office of Surface Mining Reclamation and Enforcement
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30 CFR Parts 701, 773, 774 et al.
Ownership and Control; Permit and Application Information; Transfer,
Assignment, or Sale of Permit Rights; Final Rule
[[Page 68000]]
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DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
30 CFR Parts 701, 773, 774, 778, 843, and 847
RIN 1029-AC52
Ownership and Control; Permit and Application Information;
Transfer, Assignment, or Sale of Permit Rights
AGENCY: Office of Surface Mining Reclamation and Enforcement, Interior.
ACTION: Final Rule.
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SUMMARY: We, the Office of Surface Mining Reclamation and Enforcement
(OSM), are publishing this final rule to amend certain provisions of
our ``ownership and control'' and related rules, as well as our rules
pertaining to the transfer, assignment, or sale of permit rights. More
specifically, we are amending our definitions pertaining to ownership,
control, and transfer, assignment, or sale of permit rights and our
regulatory provisions governing: permit eligibility determinations;
improvidently issued permits; ownership or control challenges; post-
permit issuance actions and requirements; transfer, assignment, or sale
of permit rights; application and permit information; and alternative
enforcement. Additionally, we are removing our current rules pertaining
to improvidently issued State permits. This final rule implements
various provisions of, and is authorized by, the Surface Mining Control
and Reclamation Act of 1977 (SMCRA or the Act).
EFFECTIVE DATE: January 2, 2008.
FOR FURTHER INFORMATION CONTACT: Debbie J. Feheley, Chief, Applicant/
Violator System Office, Office of Surface Mining Reclamation and
Enforcement, Appalachian Region, 2679 Regency Road, Lexington, Kentucky
40503. Telephone: (859) 260-8424 or (800) 643-9748; electronic mail:
dfeheley@osmre.gov.
Additional information concerning OSM, this rule, and related
documents may be found on OSM's Internet home page (Internet address:
http://www.osmre.gov) and on our Applicant/Violator System Office's (AVS Office's) Internet home page (Internet address: http://
http://www.avs.osmre.gov).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background to the Final Rule
II. Public Participation in the Rulemaking Process
III. Discussion of the Final Rule
A. General Comments
B. Section 701.5--Definition: Control or Controller
C. Section 701.5--Definition: Own, Owner, or Ownership
D. Section 701.5--Definition: Transfer, Assignment, or Sale of
Permit Rights
E. Section 773.3--Information Collection
F. Section 773.7--Review of Permit Applications
G. Section 773.8--General Provisions for Review of Permit
Application Information and Entry of Information Into AVS
H. Section 773.9--Review of Applicant and Operator Information
I. Section 773.10--Review of Permit History
J. Section 773.12--Permit Eligibility Determination
K. Section 773.14--Eligibility for Provisionally Issued Permits
L. Section 773.21--Initial Review and Finding Requirements for
Improvidently Issued Permits
M. Section 773.22--Notice Requirements for Improvidently Issued
Permits
N. Section 773.23--Suspension or Rescission Requirements for
Improvidently Issued Permits
O. Section 773.26--How To Challenge an Ownership or Control or
Finding
P. Section 773.27--Burden of Proof for Ownership or Control
Challenges
Q. Section 773.28--Written Agency Decisions on Challenges to
Ownership or Control Listings or Findings
R. Section 774.9--Information Collection
S. Section 774.11--Post-permit Issuance Requirements for
Regulatory Authorities and Other Actions Based on Ownership,
Control, and Violation Information
T. Section 774.12--Post-permit Issuance Information Requirements
for Permittees
U. Section 774.17--Transfer, Assignment, or Sale of Permit
Rights
V. Section 778.8--Information Collection
W. Section 778.11--Providing Applicant and Operator Information
X. Section 843.21--Procedures for Improvidently Issued State
Permits
Y. Sections 847.11 and 847.16--Criminal Penalties and Civil
Actions for Relief
IV. Procedural Determinations
I. Background to the Final Rule
This final rule is based on our October 10, 2006, proposed rule (71
FR 59592), in which we proposed to amend certain provisions of our 2000
final ownership and control rule (65 FR 79582) and our rules pertaining
to the transfer, assignment, or sale of permit rights at 30 CFR 701.5
(definition of transfer, assignment, or sale of permit rights) and 30
CFR 774.17 (regulatory requirements). The 2000 final rule, which took
effect for Federal programs (i.e., SMCRA programs for which OSM is the
regulatory authority) on January 18, 2001, primarily addresses areas
related to ownership or control of surface coal mining operations under
section 510(c) of SMCRA. 30 U.S.C. 1260(c). Under section 510(c), an
applicant for a permit to conduct surface coal mining and reclamation
operations (hereafter ``applicant'' or ``permit applicant'') is not
eligible to receive a permit if the applicant owns or controls any
surface coal mining operation that is in violation of SMCRA or other
applicable laws. In addition to implementing section 510(c), the 2000
final rule also addresses, among other things, permit application
information requirements, post-permit issuance information
requirements, entry of information into the Applicant/Violator System
(AVS), application processing procedures, and alternative enforcement.
See generally 65 FR 79661-79671. Previously, we viewed our transfer,
assignment, or sale rules as related to our ownership and control rules
because our previous definition of transfer, assignment, or sale of
permit rights incorporated ownership and control concepts. See 30 CFR
701.5 (2007).
Shortly after we promulgated our 2000 final rule, the National
Mining Association (NMA) filed a lawsuit in the U.S. District Court for
the District of Columbia in which NMA challenged the ownership and
control and related provisions of our 2000 final rule on multiple
grounds. NMA's suit also included a challenge to our transfer,
assignment, or sale rules. Although the 2000 rule did not amend our
transfer, assignment, or sale rules, NMA argued that we reopened those
rules by proposing to revise them in the proposed rule that preceded
the 2000 final rule.
As we explained in our 2006 proposed rule, NMA's lawsuit was
another in a series of lawsuits concerning ownership and control and
related issues. Litigation in this area--involving, at times, OSM,
State regulatory authorities (administering OSM-approved State
programs), NMA, and environmental groups--has been contentious and
ongoing since at least 1988. The 2000 final rule replaced a 1997
interim final rule (62 FR 19451), which was partially invalidated by
the U.S. Court of Appeals for the District of Columbia Circuit.
National Mining Ass'n v. Dep't of the Interior, 177 F.3d 1 (DC Cir.
1999) (NMA v. DOI II). The interim final rule replaced three sets of
predecessor regulations dating back to 1988 and 1989 (53 FR 38868, 54
FR 8982, 54 FR 18438), which were invalidated by the D.C. Circuit
because the court found that one aspect of the rules was inconsistent
with section 510(c) of SMCRA. National Mining Ass'n v. Dep't of the
Interior, 105 F.3d 691 (DC Cir. 1997) (NMA v. DOI I). The
[[Page 68001]]
preamble to our 2000 final rule contains a detailed discussion of the
prior rules and the related litigation. See generally 65 FR 79582-
79584.
This continuous litigation has created regulatory uncertainty for
OSM, State regulatory authorities, the regulated community, and the
public. In an effort to end the litigation concerning our 2000 final
rule, we entered into negotiations with NMA in an attempt to settle
NMA's judicial challenge. Ultimately, in three partial settlement
agreements, we were able to settle all of the issues presented in NMA's
rule challenge. The three partial settlement agreements (along with a
modification to the third of those agreements), which were filed with
and approved by the court, are included in our public record supporting
this final rule. Under the terms of the settlement, we agreed to
publish two proposed rules in the Federal Register (one pertaining to
ownership and control and related issues and the other pertaining to
transfer, assignment, or sale issues) in accordance with the
Administrative Procedure Act's standard notice and comment procedures.
We did not agree to finalize any of the provisions as proposed and,
indeed, this final rule departs from the settlement agreement and our
2006 proposed rule in significant respects. To the extent we promulgate
final rules in accordance with the terms of the three partial
settlements, NMA agreed not to challenge those final rules.
With respect to the two proposed rules, the settlement obligated us
to take various types of actions. For example, in some instances, we
agreed to propose specific rule language. In other instances, we agreed
only to publish certain clarifications to the preamble supporting our
2000 rule (we published these clarifications in our 2006 proposed
rule--71 FR 59605-59606--and do not repeat them in this final rule).
With regard to transfer, assignment, or sale issues, we agreed only to
publish a proposed rule, and did not agree upon any specific rule
language. As part of the overall settlement, NMA also agreed to drop
several of its claims without any further action on our part. We view
the settlement as highly favorable in that it gave us the opportunity
to clarify and simplify our regulations without hampering our ability
to enforce SMCRA. More importantly, the settlement allowed us to retain
key aspects of our regulatory program without the risk of having them
overturned in court.
After giving due consideration to all public comments received on
our 2006 proposed rule, we decided to issue this final rule. Our final
rule clarifies ambiguous provisions in our previous regulations and
clearly sets forth the responsibilities and obligations of the
regulated community and regulatory authorities. Most importantly,
however, this final rule ensures that we and our State counterparts
have the tools we need to enforce SMCRA. While we are certainly aware
that not all interested parties will be entirely satisfied with every
aspect of this final rule, we are confident that, on balance, the rule,
which required difficult line drawing, strikes a fair and appropriate
balance between competing interests. Our sincere hope is that this
final rule will introduce regulatory stability--which is important to
all interested parties--to aspects of our regulatory program that have
been mired in uncertainty and litigation for years.
II. Public Participation in the Rulemaking Process
In order to obtain as broad a range of suggestions and ideas as
possible, we made sure there were ample opportunities for public
participation in the rulemaking process. To satisfy our obligations
under the settlement, we published the first of the two proposed
rules--relating to ownership and control and related issues--on
December 29, 2003. 68 FR 75036 (2003 proposed rule). We received and
granted a request for an extension of the public comment period. The
public comment period, as extended, closed on March 29, 2004. We
published the second proposed rule--relating to the transfer,
assignment, or sale of permit rights--on January 26, 2005. 70 FR 3840
(2005 proposed rule). Again, we received and granted an extension
request. The public comment period, as extended, closed on April 15,
2005.
After the comment periods had closed on the two proposed rules
described above, we reviewed all comments received and decided to meet
with representatives of our State co-regulators before taking further
action. States with OSM-approved SMCRA programs (primacy states) have
primary responsibility for the regulation of surface coal mining and
reclamation operations within their State and must have State rules
that are consistent with, and no less stringent than, our national
rules. Because any new national rules could impact the primacy States,
it was important to meet with those States prior to issuing a final
rule. We met with State representatives from June 7-9, 2005, in
Cincinnati, OH. The results of the outreach meeting are detailed in a
report that is included in our public record supporting this
rulemaking.
Based on the comments from our 2003 and 2005 proposed rules and
information gathered at our meeting with the States, we decided it was
best to combine the topics covered in the two proposed rules and issue
one new, reproposed rule. Whereas we could have proceeded to finalize
the 2003 and 2005 proposed rules, without additional public
participation, we issued the combined 2006 proposed rule for the
express purpose of allowing the public another opportunity to comment
on the proposed changes.
Our combined proposed rule was published on October 10, 2006. We
did not receive any extension requests, and the comment period closed
on December 11, 2006. We received 15 comment documents, including seven
submitted by or on behalf of State regulatory authorities, seven from
companies and associations connected with the coal mining industry, and
one from organizations representing environmental and citizens'
interests. The three primary sets of comments we received were from the
Interstate Mining Compact Commission (IMCC), the National Mining
Association (NMA), and Kentucky Resources Council, Inc. and Citizens
Coal Council (KRC/CCC) (these organizations submitted one joint comment
document). IMCC represents State regulatory authorities, the front-line
regulators under SMCRA in most coal-producing states. IMCC's comments
were supported, in whole or in part, by several State regulatory
authorities. NMA is an industry trade association. NMA's comments were
supported, in whole or in part, by several coal companies. KRC/CCC
represent environmental and citizens' interests.
We did not receive a request for a public hearing and none was
held. After our evaluation of all the public comments, and based on our
nearly 30 years of implementing the relevant statutory provisions, we
decided to issue a final rule. In short, this final rule is the
culmination of a carefully-considered, lengthy process, marked by ample
opportunities for meaningful public comment.
III. Discussion of the Final Rule
This final rule amends our definitions of ownership, control, and
transfer, assignment or sale of permit rights; amends our regulatory
provisions governing permit application information collection, permit
eligibility reviews and determinations, provisionally issued permits,
improvidently issued permits, ownership or control challenges, post-
[[Page 68002]]
permit issuance information requirements, and alternative enforcement;
and removes the Federal procedures for improvidently issued State
permits. Below, we discuss each aspect of this final rule and respond
to comments received on our 2006 proposed rule.
A. General Comments
On balance, most aspects of our 2006 proposed rule were well
received by most commenters. One commenter said that, ``[g]enerally,
the proposed rule is an improvement over the existing rule,'' noting
that ``the improvement is primarily the result of the simplification of
the rules.'' Similarly, another commenter found the proposed rule to be
a ``breath of fresh air'' that will put an end to ``unnecessary
complexity.'' Another commenter said the ``new proposed rule provides a
more reasonable and workable framework for regulatory authorities.'' We
appreciate these comments.
One commenter disagreed with virtually every aspect of our 2006
proposed rule. In addition to specific comments on the proposed
amendments, this commenter opined that we should not amend our 2000
rule because, unlike our 2006 proposed rule, the 2000 rule was ``fully
considered.'' We disagree with the premise of this comment. As
explained above, this final rule is the culmination of a lengthy
process that afforded ample opportunity for public participation.
Indeed, rather than finalizing our 2003 and 2005 proposed rules, we
instead reproposed the amendments to allow another opportunity for
public comments. In this final rule, as with our 2000 rule, we
carefully considered, and responded to, all of the comments we
received. In fact, we modified the proposed rule in several respects
based on comments.
This commenter also stated that, with a single exception, the
proposed amendments lacked a ``reasoned analysis'' or ``lawful
purpose,'' particularly to the extent that we proposed to ``change
course'' by rescinding prior rule provisions. Consistent with the
Administrative Procedure Act (APA), the primary purpose of the proposed
rule was to provide sufficient explanation of the proposed amendments
to allow for informed public comments. The best evidence that we
achieved that objective is the quality of the comments we actually
received on the proposed rule, including the comments submitted by this
commenter. Further, with regard to this final rule, it is well accepted
that we, as the agency charged with implementing SMCRA, may reconsider
the wisdom of our policies on a continuing basis. None of our
interpretations are set in stone. In our discussion of the substantive
provisions of this final rule, below, we sufficiently set forth a
``reasoned analysis'' and the basis and purpose of the amendments to
our previous rules. Finally, in many instances, the amendments to our
2000 rule do not constitute a reversal of policy but are better
described as clarifications to our previous rules.
The commenter also chides us for not litigating NMA's challenge to
our 2000 rule and instead electing to settle the litigation. In this
regard, the commenter refers to our decision to settle as an
``astonishing collapse.'' We disagree. Any litigation has an attendant
risk of loss, as past litigation over our previous ownership and
control rules demonstrates. In both NMA v. DOI I and NMA v. DOI II, the
D.C. Circuit invalidated key aspects of our prior rules, even though we
thought those rules were well reasoned and lawful. We saw our
settlement with NMA as an opportunity to eliminate the risk of losing
important aspects of our regulatory program. This rulemaking initiative
has also allowed us to simplify and clarify our previous rules, while
continuing to ensure that regulatory authorities have all the tools
they need to enforce SMCRA. We view the settlement as a success, not a
``collapse.''
The commenter implies that, as a result of our settlement with NMA,
we may have prejudged this final rule. The commenter similarly refers
to our ``supposedly reserved discretion'' to decline to adopt the
revisions we agreed to propose under the settlement. We reiterate that
under the settlement agreement, we were only required to propose two
rules--i.e., our 2003 and 2005 proposed rules--and were not required to
finalize any provisions as proposed. The best evidence that we have not
prejudged this final rule is the fact that the rule departs from the
settlement agreement and our 2003, 2005, and 2006 proposed rules in
significant respects, especially with regard to the information permit
applicants must disclose in their permit applications (see heading
III.W., below).
Next, the commenter asserts that we did not ``endorse the proposed
changes as better interpretation[s] of the statute at issue or as
better policy choices.'' Specifically with regard to our 2003 proposed
rule (which has been withdrawn), the commenter states that we ``did not
believe that SMCRA requires or would be best implemented by many, if
indeed any, of the proposed revisions.'' In support of these comments,
the commenter points to isolated portions of the preambles to our
proposed rules, where we did not state, or even imply, that we did not
endorse our own proposed rules. Rather, we simply pointed out that, at
the proposed rule stage, we did not necessarily agree with NMA's
analysis supporting its position with regard to one proposed amendment
in this multi-issue rulemaking. Moreover, our statements were limited
to the specific issue being discussed and did not, in any way, apply to
the totality of the proposed rules. To be sure, we fully endorse every
aspect of this final rule--each of which is authorized by SMCRA--as
part of our comprehensive regulatory program related to ownership and
control issues.
This commenter also expressed the opinion that our administrative
record for this rulemaking is inadequate with regard to our settlement
with NMA or our potential prejudgment of the issues in the proposed
rulemaking. The commenter asked us to supplement our public record
supporting this rulemaking with various documents pertaining to the
settlement, including the settlement agreements themselves, every draft
of the agreements, every item of correspondence relating to the
settlement, and every note or memorandum of communications relating to
the settlement. After the requested supplementation of our public
record, the commenter requested that we reopen the comment period to
solicit further comments regarding any ``actual basis'' for this
rulemaking and any possible agency prejudgment of its outcome.
In response to this comment, we will place the three partial
settlement agreements, along with a modification to the third of those
agreements, in our public record, but we otherwise decline to honor the
commenter's requests. The three partial settlement agreements discussed
above, which were filed with and approved by the U.S. District Court
for the District of Columbia, collectively represent the totality of
our settlement agreement with NMA. We note that these agreements have
been publicly available ever since they were filed with the court. The
additional information requested by the commenter is irrelevant to this
rulemaking and/or privileged. If this final rule is challenged in
court, the administrative record we will lodge with the court will
contain all information that is legally required to support the
rulemaking.
Another commenter asked about the transition from our previous
rules to these new rules. For example, the commenter asked whether
there will be a requirement for existing permittees to
[[Page 68003]]
provide information for their permits under the new rules. The
provisions we adopt in this final rule will become effective for
Federal programs 30 days after the publication date of this final rule
and will apply prospectively. The rule will apply to Federal permitting
as applications are received for new permits, renewals, revisions, and
transfers, assignments or sales. Similarly, with regard to information
requirements, existing permittees will not have to comply with the new
permit application information disclosures until their next permitting
action. The rule will become effective in primacy States after we
approve amendments to State programs and will apply in the manner
outlined above for Federal programs.
An industry commenter said it would be desirable to have better
coordination between OSM and the State regulatory authorities with
regard to the maintenance and application of ownership and control
information. We believe coordination between our AVS Office and the
State regulatory authorities on ownership or control issues is already
excellent. However, we appreciate this comment and will continue to
strive to achieve even greater levels of cooperation and coordination
with the States.
Finally, some State commenters expressed concern that our 2006
proposed rule would place an undue burden on state regulatory
authorities to identify persons who control surface coal mining
operations. In this final rule, we believe we have alleviated this
concern by making sure State regulatory authorities will have the
information they need to identify potential controllers. Further, as
always, our AVS Office remains ready to assist the States with
ownership or control investigations.
B. Section 701.5--Definition: Control or Controller
Under section 510(c) of SMCRA, 30 U.S.C. 1260(c), where ``any
surface coal mining operation owned or controlled by the applicant is
currently in violation of this Act or such other laws referred to [in]
this subsection, the permit shall not be issued * * *.'' Thus, under
this section, permit applicants who own or control surface coal mining
operations with outstanding violations of SMCRA or certain other laws
are not eligible for new permits. SMCRA does not define the terms
``owned'' or ``controlled,'' or any variations thereof.
At 30 CFR 701.5, our 2000 rule contained definitions of ``control
or controller'' and ``own, owner, or ownership'' to implement section
510(c) of the Act. In our 2006 proposed rule, we identified a problem
with our 2000 rule. On the one hand, the 2000 rule had a broad,
flexible definition of control or controller (30 CFR 701.5). For
example, any person who had the ``ability'' to determine the manner in
which a surface coal mining operation was conducted was a controller.
At the same time, we had information disclosure requirements at 30 CFR
778.11(c)(5) that required permit applicants to disclose all of their
controllers in a permit application. We deemed this unfair to permit
applicants because, under the flexible definition, reasonable minds
could differ as to who met the regulatory definition of control or
controller, and permit applicants could be taken to task for failing to
identify a person the regulatory authority later deemed to be a
controller.
To remedy this problem, we could have modified the definition of
control or controller to make it more specific, removing a regulatory
authority's leeway and flexibility to determine control relationships
on a case-by-case basis. Or, we could have made the information
disclosure requirements more objective, while retaining the flexible
definition of control or controller. In our 2006 proposed rule, we
chose to propose the latter approach. We conclude that the ``ability to
determine'' standard is desirable from a regulatory standpoint because
it ``gives regulatory authorities flexibility to consider all of the
relevant facts, on a case-by-case basis, in determining whether control
is present; regulatory authorities also have the leeway to follow
control wherever it may exist in a series of business relationships.''
(One commenter aptly referred to the ``ability to determine'' standard
as a ``general, functional definition'' that ``enable[s] regulatory
authorities to follow control in whatever unconventional direction it
may lead.'') We also conclude that it would be easier for the regulated
community to evade a definition with specific categories of controllers
by reorganizing their business structures and relationships so as not
to fall within the defined categories. In short, we feel it is
essential to have a flexible definition of control or controller that
allows regulatory authorities to identify controllers in real-world
situations. For these reasons, we are retaining the flexible ``ability
to determine'' standard that was contained in our 2000 rule by adopting
the definition of control or controller as proposed, with one minor
modification. In conjunction with retaining the ``ability to
determine'' standard, we are amending our permit application
information disclosure requirements so that they are more objective.
See heading III.W., below.
While we proposed to retain the ``ability to determine'' standard,
we proposed to amend other aspects of our definition. In our 2000 final
rule, we defined control or controller in terms of circumstances or
relationships that establish a person's control of a surface coal
mining operation. We also took the somewhat unusual step of including
in the regulatory text examples of persons who may be, but are not
always, controllers. As we explained in our 2006 proposed rule, the
National Mining Association, in its judicial challenge to our 2000
rule, alleged that our definition of control or controller was vague,
arbitrary and capricious, and contrary to NMA v. DOI II.
To settle NMA's claim, we agreed to propose removing certain
specific categories of controllers from our definition at previous
paragraphs (3) (general partner in a partnership) and (4) (person who
has the ability to commit financial or real property assets). In
addition, from previous paragraph (5), we agreed to propose removing
the phrase ``alone or in concert with others,'' the phrase ``indirectly
or directly,'' and all the examples of control at previous paragraphs
(5)(i) through (5)(vi). In satisfaction of our obligation under the
settlement agreement, we proposed these revisions to our definition of
control or controller in December 2003 (68 FR 75037). When we issued
our 2006 proposed rule, on which this final rule is based, we decided
to carry forward these aspects of our 2003 proposal. In this final
rule, we are adopting the proposed amendments because they streamline
and simplify the previous definition, without weakening it.
We stress that though we are removing certain language from the
previous definition, the new definition still allows a regulatory
authority to reach any person or entity with the ability to determine
how a surface coal mining operation is conducted. Further, the
``ability to determine'' standard will continue to encompass both
indirect and direct control, as well as control in concert with others,
where there is actual ability to control. While we are removing from
the regulatory text two specific categories of controllers (general
partner in a partnership; person who has the ability to commit
financial or real property assets), as well as the list of examples of
persons who may be controllers, we stress that, under this final rule,
all of these persons may still be controllers. In fact, as we explained
[[Page 68004]]
in the proposed rule, general partners and persons who can commit
assets are almost always controllers. See, e.g., NMA v. DOI II, 177
F.3d at 7. However, because these persons are already covered under the
``ability to determine'' standard, specific reference to them in the
regulatory text is unnecessary.
With specific reference to the examples of controllers, we deemed
it awkward to retain them in the regulatory text when the examples do
not impose any regulatory requirements. These types of examples, we
concluded, are best addressed in preamble language. Further, the
examples were potentially misleading, as they did not describe the
universe of persons who could be controllers. Although we are removing
the examples of controllers from the regulatory text, the persons in
the examples may still be controllers if they in fact have the ability
to control a surface coal mining operation. As we said in the proposed
rule, in our experience implementing section 510(c) of the Act since
1977, the persons identified in the examples are often controllers.
Therefore, our discussion of these examples in the preamble to the 2000
final rule (65 FR 79598-600) remains instructive.
For ease of reference, the examples of controllers in the 2000
definition are as follows: (1) The president, an officer, a director
(or a person performing functions similar to a director), or an agent
of an entity; (2) a partner in a partnership, or a participant, member,
or manager of a limited liability company; (3) a person who owns
between 10 and 50 percent of the voting securities or other forms of
ownership of an entity, depending upon the relative percentage of
ownership compared to the percentage of ownership by other persons,
whether a person is the greatest single owner, or whether there is an
opposing voting bloc of greater ownership; (4) an entity with officers
or directors in common with another entity, depending upon the extent
of overlap; (5) a person who owns or controls the coal mined or to be
mined by another person through lease, assignment, or other agreement
and who also has the right to receive or direct delivery of the coal
after mining; and (6) a person who contributes capital or other working
resources under conditions that allow that person to substantially
influence the manner in which a surface coal mining operation is or
will be conducted. Relevant contributions of capital or working
resources include, but are not limited to: (a) Providing mining
equipment in exchange for the coal to be extracted; (b) providing the
capital necessary to conduct a surface coal mining operation when that
person also directs the disposition of the coal; or (c) personally
guaranteeing the reclamation bond in anticipation of a future profit or
loss from a surface coal mining operation. While we decided to reprint
these examples for ease of reference, it is important to remember that
not all persons identified in these examples are always controllers; in
order to be a controller, the person must meet the regulatory
definition in this final rule. Further, this list of examples is by no
means exhaustive; that is, other persons not identified in the examples
may also be controllers.
In sum, the definition of control or controller we are adopting in
this final rule retains the most critical aspect of the 2000
definition, namely, the flexible ``ability to determine'' standard.
Like our 2000 rule, this final rule also provides that permittees and
operators of surface coal mining operations are always controllers.
Although we removed some of the language from the 2000 definition of
control or controller for the sake of simplifying the definition and
removing unnecessary verbiage, the definition in this final rule is
substantively identical to the prior definition, and we intend for
regulatory authorities to enforce it as such.
Responses to Comments
Multiple commenters responded to our proposal both in favor of and
against the proposed amendments. IMCC and other State commenters did
not oppose our proposed definition of control or controller. In
particular, these commenters found ``merit in the `ability to
determine' standard.'' IMCC and another State commenter said we should
remove the word ``other'' from paragraph (3) of the proposed
definition. In the proposed rule, paragraph (3) of the definition reads
as follows: ``(3) Any other person who has the ability to determine the
manner in which a surface coal mining operation is conducted.''
(Emphasis added.) We agree with these commenters that the word
``other'' is unnecessary. Thus, in this final rule, we are removing the
word ``other,'' so that the final paragraph, redesignated as paragraph
(c), reads: ``Any person who has the ability to determine the manner in
which a surface coal mining operation is conducted.''
Another commenter said that eliminating specific categories from
the definition, such as officers, directors, and general partners
creates an unreasonable burden for the regulatory authorities and
creates a false sense of security for applicants and permittees. We
note that under our 2000 rule, officers and directors were not deemed
to be controllers. Instead, they were included in the examples of
persons who might be controllers. Because, as explained above, we are
moving away from listing discrete categories of controllers in the
regulatory definition, we decline to add these categories of persons to
the definition. At the same time, under amended 30 CFR 778.11,
discussed below under heading III.W., the identity of these persons
will have to be disclosed by permit applicants in their permit
applications. Thus, while regulatory authorities will have to make
findings of control, they will have the information they need up front
to identify potential controllers. This commenter also suggested that
we create two classes of controllers, with one category of ``presumed''
controllers. In our 2000 rule, we made a considered decision to
eliminate the use of presumptions of ownership or control in our
definitions. We did not reopen that issue in our 2006 proposed rule,
and the commenter has not given us sufficient reason to reconsider our
decision.
NMA, an industry trade association, and other industry commenters,
noted that our proposed definition of control or controller is a ``vast
improvement over the current rules,'' but suggested that we further
revise the definition ``to be more clearly based on operations owned or
controlled by the applicant (instead of entities or any person owning
or controlling them).'' We are not adopting this suggestion because we
do not read section 510(c) of the Act to be so limiting. While section
510(c) provides that an applicant who owns or controls a surface coal
mining operation with outstanding violations is not eligible for a
permit, we have historically found that, in the specific context of
section 510(c), control of an entity is a reasonable surrogate for
control of that entity's surface coal mining operations. Thus, if an
applicant controls an entity that, in turn, controls a surface coal
mining operation with a violation, the applicant will not be eligible
for a permit. This approach has been embodied in all versions of our
ownership and control rules since the first rule was promulgated in
1988. Moreover, the approach was expressly approved by the United
States Court of Appeals for the District of Columbia Circuit in NMA's
challenge to a prior version of our rules. NMA v. DOI II, 177 F.3d at
4-5.
KRC/CCC disagreed with our proposal to remove paragraphs (3)
(general partner in a partnership) and (4) (person who has the ability
to commit financial
[[Page 68005]]
or real property assets) from our previous definition of control or
controller; the examples of control at previous 30 CFR 701.5; and the
language relating to ``indirect control'' and ``control in concert.''
KRC/CCC asserts that the ``sole rationale that OSM states for
rescinding much of the current definition of control or controller is
the same rationale the agency gives for rescinding the requirement to
list all of a permit applicants' controllers: OSM prefers to establish
a ``bright line,'' ``objective'' standard for permit information that
an applicant must submit. KRC/CCC similarly asserts that these aspects
of the proposed rule are based on our proposal to remove the
requirement for an applicant to list all of its controllers in a permit
application. These comments miss the mark. There is no linkage between
our decision to simplify the definition by removing the examples of
control and the other language identified by the commenters. Rather, as
explained above, the aspect of the control definition that related to
the information disclosure requirements was the flexible ``ability to
determine'' standard. That is, if we were going to keep that flexible
standard, which we deemed to be crucial, we wanted to eliminate
information disclosure requirements based on that standard. Thus, in
our 2006 proposed rule, we proposed to retain the ``ability to
determine'' standard in the definition, while simultaneously proposing
to make the information disclosure requirements more objective.
Our proposed definition of control or controller was an outgrowth
of our settlement with NMA. In settling NMA's challenge to the
definition, we were able to retain the ``ability to determine''
standard in exchange for proposing the other changes to the definition
that the commenters take issue with. Given that the changes to the
definition are non-substantive, and the new definition has the same
reach as its 2000 counterpart, we view the settlement on this issue to
be favorable. Moreover, we were not obligated to finalize the
definition as proposed.
Aside from the settlement, we identified other bases for the
proposed changes in the preamble to the proposed rule. For example, in
support of our proposal to remove paragraphs (3) and (4) of the
previous definition, along with the examples of control, we explained
that the persons identified in those paragraphs were already covered by
the ``ability to determine'' standard, and, thus, it was not necessary
to include them separately in the regulatory text; we also explained
that removal of the unnecessary verbiage would simplify the regulatory
text, which had become rather unwieldy and cluttered with language that
did not contain any regulatory requirements. 71 FR 59594. As we
explained above, another reason we decided to remove the examples of
control was that they were potentially misleading to the extent that
the list was not exhaustive; we did not want to create the incorrect
impression that only those persons listed could be controllers.
KRC/CCC also states that our decision to simplify the definition
``runs afoul of the fact that OSM promulgated the current definition
six years ago bases on well-supported findings that all of its elements
were necessary to allow the agency to implement SMCRA effectively.'' We
disagree with this comment. In the very passage of the preamble to the
2000 rule cited by these commenters, we stated that the definition of
``control or controller stand[s] alone, but the examples are useful * *
*.'' 65 FR 79599. Stating that the examples are ``useful'' hardly
equates with saying they are a necessary part of the regulatory text.
To the contrary, because the examples do not impose any independent
regulatory requirements, we have determined that they are best
discussed in preamble language explaining the scope of the rule.
KRC/CCC also object to the removal of the phrases ``alone or in
concert with others'' and ``indirectly or directly'' from paragraph (5)
of our previous definition of control or controller. They believe that
the removal of the phrases will impact the ability of regulatory
authorities to identify controllers, particularly in situations where
control may only be exercised indirectly, in concert with others, or
both. We understand the commenters' concern, but we nevertheless
disagree with the comment. As we explained above, we are removing these
phrases in order to simplify what had become a cumbersome definition
and because they are already encompassed in the ``ability to
determine'' standard that we are retaining in this final rule. We can
understand how a change in substance might possibly be inferred from a
change in the regulatory text without a corresponding explanation as to
the effect of the change. However, we have expressly stated, in the
preambles to our 2006 proposed rule and this final rule, that the
``ability to determine'' standard will continue to encompass both
indirect and direct control, as well as control in concert with others,
where there is actual ability to control. We will continue to enforce
this aspect of the rule in Federal program states, and we expect State
regulatory authorities to enforce it in primacy states.
After careful consideration of the public comments, we are adopting
the revisions to the definition of control or controller as proposed,
with the one minor modification discussed above. In sum, we determined
that it is best to have a clear, concise definition of control and
controller that retains the crucial ``ability to determine'' standard.
We are fully confident that the definition in this final rule will
continue to allow regulatory authorities to follow control wherever it
exists.
C. Section 701.5--Definition: Own, Owner, or Ownership
As mentioned above, section 510(c) of the Act, 30 U.S.C. 1260(c),
uses, but does not define, the term ``owned.'' Our 2000 rule, which we
are amending in this final rule, contained a definition of own, owner,
or ownership at 30 CFR 701.5. Shortly after we promulgated the 2000
rule, NMA filed its judicial challenge, which included a claim that our
definition of own, owner, or ownership was inconsistent with SMCRA,
arbitrary and capricious, and contrary to the DC Circuit's decision in
NMA v. DOI II. NMA also took issue with the ``downstream'' reach of the
rule, as it pertained to ownership. The term ``downstream,'' as used by
the DC Circuit in the NMA v. DOI I and NMA v. DOI II decisions, means a
surface coal mining operation that is down a corporate (or other
business) chain from an applicant. For example, if an applicant has a
subsidiary, the subsidiary would be considered ``downstream'' from the
applicant; by contrast, if an applicant has a parent company, the
parent company would generally be considered ``upstream'' from the
applicant. NMA's claim pertained to how far downstream a regulatory
authority can look from the applicant when making a permit eligibility
determination based on ownership (as distinct from control) of a
surface coal mining operation. Just as SMCRA does not define the terms
``owned'' or ``controlled,'' it also does not address the downstream
reach of the ownership and control provisions.
To settle NMA's claim, we agreed to propose to revise our previous
definition of own, owner, or ownership and the provision at previous 30
CFR 773.12(a)(2) that governs the downstream reach of the definition
when making a permit eligibility determination. In satisfaction of the
settlement agreement, we proposed the revisions in our 2003 proposed
rule. When we issued our 2006 proposed rule, on which this final rule
is based,
[[Page 68006]]
we decided to carry forward this aspect of the 2003 proposal. In this
final rule, we are adopting the amendments as proposed.
The first revision is to the definition itself. Our prior
definition of ownership, at 30 CFR 701.5, included persons ``possessing
or controlling in excess of 50 percent of the voting securities or
other instruments of ownership of an entity.'' (Emphasis added.) We
have concluded that the prior definition of ownership was confusing to
the extent that it included ``control'' concepts. Given that control or
controller is defined in the same section of the CFR, the natural
tendency of the reader was to try to import that definition into the
definition of own, owner, or ownership, which renders the ownership
definition nonsensical. To remove this confusion, we are adopting our
proposal to amend the definition by substituting the term ``owning of
record'' in place of ``possessing or controlling.'' Thus, the revised
definition will read as follows: ``Own, owner, or ownership, as used in
parts 773, 774, and 778 of this chapter (except when used in the
context of ownership of real property), means being a sole proprietor
or owning of record in excess of 50 percent of the voting securities or
other instruments of ownership of an entity.''
Our use of the term ``owning of record'' better effectuates our
intent with regard to the meaning of ownership (as distinct from
control), creates a ``bright line'' standard, and removes the inherent
confusion with the previous definition. As we explained in the preamble
to our 2006 proposed rule, ``owning of record'' is a term found in
section 507(b) of the Act, 30 U.S.C. 1257(b), under which permit
applicants must identify, among other things, ``any person owning[ ] of
record 10 per centum or more of any class of voting stock of the
applicant * * *.'' Because the Act itself uses the term ``owning of
record'' in an analogous context, we deemed it a good fit for our
definition of own, owner, or ownership. Moreover, we used the statutory
term ``owning of record'' in our ownership and control rules from 1988
through 2000. See, e.g., 30 CFR 773.5 (2000). It was only in our 2000
rule that we used the phrase ``possessing or controlling'' in our
ownership definition, and that definition was immediately challenged in
Federal court, in part because of the confusion that results from
defining ownership in terms of control. Since the term ``owning of
record'' has been in the statute since 1977, and in our ownership and
control rules from 1988 through 2000, regulatory authorities and the
regulated industry will be familiar with the term and its meaning.
The second revision affects 30 CFR 773.12(a)(2), with respect to
the downstream reach of the definition under the rules pertaining to
permit eligibility. In NMA v. DOI II, the D.C. Circuit held that a
regulatory authority can deny a permit based on limitless
``downstream'' control relationships. NMA v. DOI II, 177 F.3d at 4-5.
That is, if an applicant indirectly controls an operation with a
violation, through its ownership or control of intermediary entities,
the applicant is not eligible for a permit. Id. at 5. The operation
with a violation can be limitlessly downstream from the applicant.
Although the DC Circuit's decision clearly addresses downstream
control in the context of permit eligibility, it does not squarely
address the situation where there is downstream ownership of entities,
without control. For example, assume Company A owns 51 percent of
Company B, and Company B, in turn, owns 51 percent of Company C, a coal
mining company whose mining operations are in violation of SMCRA. While
it is clear that we could deny a permit to Company A if it controls
Company C through its ownership or control of Company B, it is not
clear, under the NMA v. DOI II decision, whether OSM could deny a
permit to Company A based solely on Company A's ownership of Company B,
which, in turn, owns the violator, Company C. There is at least a
plausible argument that the DC Circuit's decision does not allow us to
deny permits based solely on downstream ownership (absent control) of
an operation with a violation.
Our former rules allowed us to reach ``downstream'' with regard to
both ownership and control. Under those rules, the regulatory authority
could deny a permit if an applicant indirectly owned an operation in
violation of SMCRA or other applicable laws. The operation in violation
could be infinitely downstream from the applicant--meaning that
ownership of the operation could be indirect, through intermediary
entities--as long as there was an uninterrupted chain of ownership
between the applicant and the operation. NMA argued that this provision
was contrary to the plain meaning of SMCRA and violated principles of
corporate law. NMA claimed that ownership of a corporation does not
equate to ownership of the corporation's assets (including mining
operations). Thus, according to NMA, we should be able to deny a permit
based on ownership only if one of the applicant's own operations has a
violation.
To settle NMA's claim we agreed to propose a regulatory revision at
30 CFR 773.12(a) to limit the reach of permit denials based on
ownership to ``one level down'' from the applicant. We proposed the
revision in our 2003 proposed rule. Because we continued to find merit
in the proposal, we carried it forward in our 2006 proposed rule. In
this final rule, we are adopting the amendment to section 773.12(a) as
proposed. Under this final rule, if an applicant directly owns an
entity with an unabated or uncorrected violation of SMCRA or other
applicable laws--meaning there are no intermediary entities between the
applicant and the entity with a violation--the applicant is not
eligible for a permit. In other words, the rule would reach one level
down from the applicant to the entity the applicant owns. On the other
hand, an applicant's indirect ownership of an entity with a violation,
standing alone, would not make the applicant ineligible for a permit.
However, the same applicant would not be eligible for a permit if it
controls the violator entity.
While we stated in the preamble to our 2006 proposed rule that the
``one level down'' approach is not compelled by the Act, we conclude
that it is a reasonable interpretation of the Act, especially in light
of the DC Circuit's decision in NMA v. DOI II. Moreover, because
regulatory authorities may continue to consider violations at
``downstream'' operations, as long as control (as opposed to ownership)
is present, the amendment will not impair a regulatory authority's
ability to adequately enforce section 510(c) of the Act. The mechanics
of the amendment to 30 CFR 773.12(a) that pertains to the downstream
reach of the definition of own, owner, or ownership is further
discussed under heading III.J., below.
Responses to Comments
NMA, and other industry commenters, commented that our proposed
definition of own, owner, or ownership is ``a significant improvement
over the existing rule,'' but nevertheless stated that ``ownership of
an entity alone does not equate to ownership of the entity's surface
coal mining operation.'' As such, NMA maintains that the proposed rule
``is not entirely consistent with the principles of American corporate
law.'' Under NMA's formulation, a regulatory authority could not even
reach one level down with regard to ownership; that is, the regulatory
authority could only deny a permit based on ownership if the applicant
itself owns an operation (as opposed to an entity) with an outstanding
violation. We disagree. We
[[Page 68007]]
have historically found that, in the specific context of section
510(c), which pertains to permit eligibility and does not impose
personal financial liability on owners, ownership of an entity is a
reasonable surrogate for ownership of that entity's surface coal mining
operations. Furthermore, we have carefully considered whether this
approach is not only reasonable but also consistent with the legal
maxim that to abrogate a common-law principle, a statute must speak
directly to the question addressed by the common law. The Supreme Court
has addressed this issue consistently in Isbrandtsen Co. v. Johnson,
343 U.S. 779, 783 (1952); Mobil Oil Corp. v. Higginbotham, 436 U.S.
618, 625 (1978); Astoria Fed. Sav. & Loan Assn v. Solimino, 501 U.S.
104, 108 (1991); United States v. Texas, 507 U.S. 529, 534 (1993); and
United States v. Bestfoods, 524 U.S. 51, 63 (1998). As to this specific
principle of statutory interpretation, we believe that the
interpretation of section 510(c) adopt today with respect to an owned
surface coal mining operation is sufficiently broad to satisfy
administrative purposes while being fully consistent with Supreme Court
precedent and NMA v. DOI II.
KRC/CCC claims that our substitution of the phrase ``owning of
record'' for ``possessing or `controlling'' represents a substantive
change, despite our assertion in our 2006 proposed rule that the change
would be non-substantive. In support of their comment, KRC/CCC cites to
the preamble to our 2000 final rule, in which we stated: ``We added the
term `controlling' based on the reality that sometimes persons who do
not technically own stock (or other instruments of ownership)
nonetheless have the ability to control the stock, either by holding
the voting rights associated with the stock or other arrangement with
the owner of record.'' While we agree with these commenters that this
revision is not purely non-substantive, we are not persuaded to deviate
from the proposed amendment. The confusion we identified in the
definition--i.e., defining ownership in terms of control--was real and
is remedied by the amendment we are adopting in this final rule.
Moreover, under the old definition, which included the ``possessing or
controlling'' language, a regulatory authority would have had to make a
finding that a person controlled in excess of 50 percent of the voting
securities or other instruments of ownership of an entity. That same
finding would, in all likelihood, support a finding that that person is
a controller of the entity under our definition of control or
controller. As such, anything that might be lost under the definition
of own, owner, or ownership, would still be covered under the
definition of control or controller, based on similar proof. Thus, as
the commenters requested, the definitions, when taken together, will
``encompass[ ] all of the same persons that the existing regulations
sweeps in.''
KRC/CCC also objected to our proposal to limit the downstream reach
of our definition of own, owner, or ownership. These commenters'
objection is multi-faceted. First, they reference our statements at 71
FR 59595 that ``we do not necessarily agree with NMA's analysis [that
ownership of a corporation does not equate to ownership of the
corporation's assets]'' and ``[w]e do not believe this approach is
compelled by either SMCRA or the decision in NMA v. DOI II.'' It is
important to remember that, as discussed above, under NMA's formulation
of section 510(c) of the Act, regulatory authorities could not even
look ``one level down'' with respect to ownership. Thus, in this final
rule, we continue to disagree with NMA's argument that ownership of an
entity does not equate to ownership of that entity's surface coal
mining operations. Further, while the ``one level down'' approach is
not necessarily compelled by the Act--which is entirely silent on the
point--it is certainly a reasonable construction of section 510(c)'s
ownership provision. Also, based on NMA v. DOI II's uncertain holding
on this issue (discussed above), we did perceive at least some risk of
loss in court if our rules continued to reach infinitely downstream on
the ownership side (as opposed to the control side). Thus, the
amendment we adopt today is a good compromise on the issue, one which
allows us to retain the ability to look one level down with regard to
ownership, rather than just at the applicant's own operations.
KRC/CCC also asserts that our proposed amendment ``rests upon yet
another glaring error of statutory and regulatory interpretation.'' The
alleged ``error'' appears to be the commenters' perception that the
amendment is inconsistent with our prior statements to the effect that
ownership is distinct from control and that ownership of an operation
with a violation, standing alone, can provide the basis for a permit
denial. Our prior statements, which we continue to stand by, did not
speak to the downstream reach of the definition and are, therefore, not
inconsistent with today's amendment. Further, under this final rule,
ownership and control are still distinct concepts; thus, if an
applicant owns, but does not control, an operation with a violation,
under the definition of own, owner, or ownership, the applicant is not
eligible for a permit.
KRC/CCC further opines that ``ownership is more easily established
than control.'' Thus, in KRC/CCC's view, ``the proposed regulation will
make it more time consuming, costly, and uncertain for regulatory
authorities to pursue links between applicants and remote downstream
subsidiaries who are responsible for uncorrected regulatory
violations.'' In response, we note that, even though ownership may be
more easily established than control, regulatory authorities will be
required to enforce the rules as written, regardless of the associated
time and cost. Moreover, as explained above, regulatory authorities
will be empowered to make case-specific determinations of control based
on the flexible ``ability to determine'' standard.
Finally, KRC/CCC imply that Congress intended for SMCRA to reach
infinitely downstream with regard to ownership and state that the
proposed amendment would ``make it impossible for OSM or state
regulatory authorities to deny permits to applicants that own
subsidiaries responsible for uncorrected violations, where regulators
cannot establish the applicant's actual control of the subsidiary.'' We
disagree with the predicate to this comment--that Congress intended for
section 510(c)'s ownership provision to reach infinitely downstream. As
stated previously, Congress was entirely silent on this issue, and the
holding in NMA v. DOI II casts at least some doubt on the correctness
of KRC/CCC's position. Again, the amendment we adopt today represents a
reasonable interpretation of section 510(c).
IMCC, whose member States will be the regulatory authorities most
often making findings of downstream control under these provisions, did
not object to our proposed amendment to the downstream reach of the
rule with regard to ownership, as long as the States are empowered to
obtain the information necessary to make control findings. As explained
below under heading III.W., under this final rule, regulatory
authorities will have the necessary information.
A State commenter said that our proposal to limit the downstream
reach of ownership does not make sense. The premise of this comment is
that, under our definition of own, owner, or ownership, an owner will
always be a controller. Thus, if we can go limitlessly downstream with
regard to control, we should be able to do the same with regard to
ownership. We agree with this
[[Page 68008]]
commenter that owning greater than 50 percent of entity will almost
always confer control over that entity. However, if Company A owns
Company B and Company B owns Company C, it does not stand to reason
that Company A controls Company C. However, Company A may in fact
control or have the ability to control Company C; under this final
rule, regulatory authorities are empowered to make that finding.
This commenter also said it appears inconsistent under section
510(c) of SMCRA to distinguish between ownership and control in terms
of downstream relationships because section 510(c) couples ownership
and control. We disagree with this comment. Section 510(c) refers
disjunctively to ownership or control. As of our 2000 final rule, we
have treated ownership and control as distinct concepts. Further, these
terms have different meanings under corporate law. We conclude, for the
reasons explained above, that it is entirely appropriate, and
consistent with SMCRA, to continue to give separate effect to the
ownership and control aspects of section 510(c).
D. Section 701.5--Definition: Transfer, Assignment, or Sale of Permit
Rights
Over the years, we have found that the regulatory provisions
pertaining to the transfer, assignment, or sale (TAS) of permit rights
have generated a great deal of confusion. We have discovered that the
various State regulatory authorities have very different views as to
what constitutes a transfer, assignment, or sale requiring regulatory
approval. As mentioned above, in order to settle the litigation
instituted by NMA, we agreed to propose new transfer, assignment, or
sale rules. However, we did not agree to propose any specific
provisions. We viewed the rulemaking called for under the settlement as
an excellent opportunity to revisit our TAS rules.
In accordance with the settlement agreement, we published a
proposed rule on January 26, 2005. 70 FR 3840. In that proposed rule,
we proposed fairly sweeping changes to our TAS regulations. More
specifically, we proposed to: revise our regulatory definitions of
transfer, assignment, or sale of permit rights and successor in
interest at 30 CFR 701.5; revise our regulatory provisions at 30 CFR
774.17 relating to the transfer, assignment, or sale of permit rights;
and create, for the first time, separate rules for successors in
interest.
A number of commenters on our 2005 proposal suggested that the
broad conceptual changes we proposed were not warranted. Several
commenters stated that our statutory rationales for some of the
proposed changes, including our reading of the legislative history,
were flawed. Further, commenters suggested that we did not achieve our
primary purpose of providing greater clarity in our transfer,
assignment, or sale regulations. Upon consideration of those and other
comments, and input from our State co-regulators, we determined that we
could achieve our purpose of simplifying and clarifying our regulations
through more modest revisions to our rules.
As a result, in our 2006 proposed rule, we proposed to revise our
current definition of transfer, assignment, or sale of permit rights at
section 701.5 but to keep our existing TAS regulatory requirements
largely intact. The primary purpose of our 2006 proposal was to seek to
distinguish clearly the circumstances that will trigger a transfer,
assignment, or sale of permit rights as opposed to an information
update under 30 CFR 774.12 (see heading III.T., below).
Section 511(b) of SMCRA, 30 U.S.C. 1261(b), provides that ``[n]o
transfer, assignment, or sale of permit rights granted under any permit
issued pursuant to this Act shall be made without the written approval
of the regulatory authority.'' Under our previous definition, transfer,
assignment, or sale of permit rights meant ``a change in ownership or
other effective control over the right to conduct surface coal mining
operations under a permit issued by the regulatory authority.'' We
proposed to revise our regulatory definition of transfer, assignment,
or sale of permit rights to mean a change of a permittee. Our 2006
proposal was informed by a decision of the Department of the Interior's
Office of Hearing and Appeals (OHA) in Peabody Western Coal Co. v. OSM,
No. DV 2000-1-PR (June 15, 2000) (Peabody Western), comments received
on our 2005 proposed rule, and our further discussions with our State
co-regulators. After consideration of the public comments we received
on our 2006 proposal, we are adopting the amendment to our TAS
definition as proposed.
In Peabody Western, OHA examined the impact of NMA v. DOI II on
transfer, assignment, or sale issues. OSM had determined that Peabody
Western's change of all of its corporate officers and directors
constituted a transfer, assignment, or sale of permit rights under 30
CFR 701.5. The administrative law judge disagreed, explaining that,
after NMA v. DOI II, OSM cannot presume that an officer or director is
a controller and, therefore, a change of an officer or director, or
even a change of all officers and directors, cannot, standing alone,
automatically constitute a change of ``effective control'' triggering a
transfer, assignment, or sale of permit rights. The administrative law
judge also made other observations that we assigned particular weight
to in developing our 2006 proposed rule. The judge noted that the
``other effective control'' language is ``vague and imprecise'' and
``discloses no meaningful standard and provides no advance notice to a
regulated corporate entity'' as to which corporate changes will
constitute a transfer, assignment, or sale. This defect, according to
the judge, does not provide ``adequate advance notice of the purported
regulatory standard'' and leaves permittees ``to speculate'' as to when
regulatory approval is required. Because we ultimately agreed with many
of the judge's observations about our previous TAS rules, we did not
seek further review of OHA's decision.
Throughout our deliberations on TAS-related issues, we were mindful
of OHA's admonitions that our previous definition, to the extent it
relied on the concept of ``effective control,'' was ``vague and
imprecise'' and ``disclose[d] no meaningful standard and provide[d] no
advance notice to a regulated corporate entity'' as to which corporate
changes would constitute a transfer, assignment, or sale. We
acknowledge that our previous definition created confusion--among
regulatory authorities, the regulated industry, and the public--that
lead to various interpretations of the regulatory requirements.
We conclude that the imprecision in our previous definition was
created largely by our inclusion of the phrase ``or other effective
control.'' Under SMCRA, the concept of control, in the context of
permit eligibility, is found in section 510(c) of the Act. As explained
above, under that section, an applicant is not eligible to receive a
permit if it owns or controls an operation with an unabated or
uncorrected violation. Our previous definition of transfer, assignment,
or sale of permit rights imported the ownership and control concept
from section 510(c), but nothing in the Act compels that approach. We
conclude that importing section 510(c) ownership and control concepts
into our TAS regulations created undue confusion as to what constitutes
a transfer, assignment, or sale of permit rights. Thus, the TAS
definition we are adopting in this final rule disentangles TAS and
ownership and control concepts. This final rule clearly provides that a
change of a permittee's
[[Page 68009]]
owners or controllers does not constitute a transfer, assignment, or
sale.
In addition to responding to the decision in Peabody Western, we
also conclude that revising our definition of transfer, assignment, or
sale of permit rights to mean a change of a permittee is consistent
with the objective of section 511(b) of the Act. As explained above,
section 511(b) requires regulatory approval for a transfer, assignment,
or sale of permit rights. Those permit rights are held by the
permittee. As long as the permit continues to be held by the same
``person''--under section 701(19) of the Act, 30 U.S.C. 1291(19), the
term ``person'' includes corporations, partnerships, and other business
organizations--we see no reason to apply the regulatory provisions
governing transfer, assignment, or sale of permit rights.
Under this final rule, a change in permittee triggers a TAS that
requires regulatory approval. In determining whether there is a change
in permittee, we are looking for indicia that the existing permittee
has actually conveyed its permit rights to a new person (the putative
new permittee/successor in interest) who desires to continue mining
under the permit. There would also be a change in permittee when an
existing permittee reorganizes itself into a new type of business
entity (for example, from a partnership to a limited liability
company). In that instance, there is a fundamental legal change in the
nature of the permittee that will trigger a TAS. Similarly, a merger or
acquisition would trigger a TAS if the non-permittee entity seeks to
become the new, named permittee or if the merger or acquisition results
in a new type of business entity being created (e.g., if the permittee
is a corporation and the merged entities become a limited liability
company).
If the permittee's owners or controllers change, but the permittee
remains the same, there has not been a transfer, assignment, or sale;
in this instance, the existing permittee is the entity that will
continue mining under the permit and will, among other things, have to
maintain appropriate bond coverage. We emphasize that while a
permittee's change of an officer, director, shareholder, or certain
other persons in its organizational structure would not trigger a
transfer, assignment, or sale of permit rights under this proposal, the
permittee would be required to report certain of these changes under
final 30 CFR 774.12 (see heading III.T., below).
In sum, our final TAS definition introduces the clarity we have
been seeking with regard to our TAS regulations. Importantly, the TAS
definition also reduces the burden on both the coal mining industry and
regulatory authorities due to the fact that fewer transactions or
events will qualify as a transfer, assignment, or sale requiring an
application and regulatory approval under 30 CFR 774.17. Our TAS
definition is also fully consistent with the Act.
IMCC and other State commenters supported our proposed TAS
definition. These commenters stated that ``this is a more sensible and
understandable approach.'' Another State commenter said the new TAS
definition is much simpler and eliminates much of the confusion
regarding permit transactions.
IMMC also said we should clarify in the preamble that a corporation
that converts to a limited liability company is considered a separate
and distinct permittee, thus triggering a TAS, and that a merger will
result in a TAS unless the new merged entity continues to do business
in the existing permittee's name. In response to these comments, we
have included a preamble discussion, above, of the TAS-related effects
of these types of transactions.
NMA and other industry commenters strongly supported our proposed
definition. These commenters agreed with the holding in Peabody Western
and that the previous definition was confusing. They also agreed that
ownership and control concepts should be removed from the definition of
TAS. Another State commenter said it would really like to see a more
streamlined process for permit transfers. For the reasons stated above,
we believe our new TAS definition will substantially streamline the TAS
process.
KRC/CCC opposed our proposed definition. These commenters said our
proposal was inconsistent with SMCRA because it provides a clear avenue
for circumvention of the ownership and control provisions of section
510(c) of the Act. These commenters opine that, under the proposed
definition, an individual who owns or controls a surface coal mining
operation that is in continuing violation of SMCRA might continue to
mine without regard to section 510(c) of SMCRA by assuming control of a
clean entity that already has a mining permit. They explain that the
tainted individual may have been truly separate from the existing
permittee or the permittee may be a ``straw man'' created by the
tainted individual to circumvent section 510(c). Either way, these
commenters said our proposed definition would leave regulatory
authorities powerless to enforce section 510(c).
We understand these commenters' concerns but, for the reasons
explained above, we disagree that there is a necessary linkage between
section 510(c)'s ownership and control provisions and the TAS
provisions of section 511(b). Based on our own analysis and the near
unanimous support of other commenters, we have chosen to separate the
two concepts, and KRC/CCC's comments do not persuade us to do
otherwise. Moreover, we note that we are constrained by the DC
Circuit's decisions in NMA v. DOI I and NMA v. DOI II. In NMA v. DOI I,
the DC Circuit concluded that when making permit eligibility
determinations under section 510(c), we can only consider violations at
operations the applicant owns or controls; the court struck down our
ability to deny permits based on violations at operations owned or
controlled by the applicant's owners or controllers. 105 F.3d at 694.
If we cannot consider these ``upstream'' violations in the first
instance, when making permit eligibility determinations under section
510(c) and 30 CFR 773.12, we likewise cannot consider them under
section 511(b)'s TAS provisions (even if there were a linkage between
section 510(c) and section 511(b)). In NMA v. DOI II, the DC Circuit
held that we can deny a permit under section 510(c) only when an
applicant, through ownership or control, is in violation at the time of
application. We cannot consider current violations at an operation the
applicant ``has controlled'' but no longer does (unless the applicant
has a demonstrated pattern of willful violations under section 510(c)
of the Act). 177 F.3d at 5. Thus, even if we could consider an upstream
controller's violations, we could not consider those violations if the
controller ended the control relationship with the operation that is in
violation.
With regard to the ``straw man'' hypothetical, we note that the DC
Circuit has explained that we have the authority to determine who the
``real applicant is--i.e., to pierce the corporate veil in cases of
subterfuge'' in order to ensure that we have the true applicant before
us. NMA v. DOI I, 105 F.3d at 695. Thus, if a violator does try to set
up a ``straw man'' to evade section 510(c) of the Act, the regulatory
authority is empowered to identify the ``real applicant'' and deny the
permit if that person currently owns or controls an operation with a
violation. And, of course, a regulatory authority can always pursue an
appropriate alternative enforcement action against the ``tainted
individual'' under the Act's various enforcement provisions. See,
[[Page 68010]]
e.g., SMCRA Sec. 518(f), 30 U.S.C. 1268(f); 30 CFR part 846.
Finally, KRC/CCC takes us to task for relying on the decision in
Peabody Western because, in these commenters' view, the judge's
observations were ultra vires. These commenters assert that OHA ``is
not authorized to review the validity of the Secretary's regulations or
to shrink from applying them fully.'' These commenters also state that
OHA's decision is not precedential and does not necessarily constitute
a legal interpretation of OHA as a whole. As explained above,
regardless of its precedential value, we ultimately agreed with Peabody
Western's observations about our previous definition and opted not to
seek further review of that decision. Moreover, virtually all other
commenters agreed with the underlying basis of the Peabody Western
decision: That our previous definition was vague, imprecise, and
confusing. After the decision, we reevaluated the statutory basis for
our definition and determined that the Act does not require us to
import ownership or control concepts into the TAS analysis.
Although IMCC and other State commenters supported our proposed TAS
definition and related TAS provisions at 30 CFR 774.17 (see discussion
under heading III.U., below), they did echo KRC/CCC's concerns about a
new owner or controller with outstanding violations trying to ``enter
through the back door'' by joining an existing permittee. They said
that even though the addition of this person will no longer trigger a
TAS, the regulatory authority should be able to ``suspend the permit
immediately'' until the new person has complied with all provisions of
the Act. These commenters offered specific language to this effect that
they proposed for a new paragraph 774.12(d). Section 774.12 contains
``Post-permit issuance information requirements for permittees.'' See
heading III.T., below, for a full discussion of that section.
Again, although we understand the concern, we decline to adopt this
comment for the reasons discussed above. In the final analysis, we are
constrained by the decision in NMA v. DOI I and otherwise find no
authority in SMCRA to ``suspend the permit immediately'' when a new
person with a violation, such as an officer, director, or shareholder,
joins the permittee's organizational structure. However, as explained
above, under section 510(c) of the Act, the regulatory authority has
the authority to identify the true applicant and, the regulatory can
always employ SMCRA's array of enforcement powers to seek to compel
abatement of outstanding violations.
E. Section 773.3--Information Collection
At 30 CFR 773.3, our regulations contain a discussion of Paperwork
Reduction Act requirements and the information collection aspects of 30
CFR part 773. We proposed to amend this section by streamlining the
codified information collection discussion. We did not receive any
comments on our proposal and are adopting the amendment as proposed. A
more detailed discussion of the information collection burdens
associated with part 773 is contained under the Procedural
Determinations section (see heading IV.10.), below.
F. Section 773.7--Review of Permit Applications
We proposed to revise previous 30 CFR 773.7(a) to correct a cross-
reference and to eliminate a cross-reference that is no longer
relevant. In general, section 737.7(a) requires the regulatory
authority to review certain information developed in connection with an
application for a permit, revision, or renewal and to issue a written
decision on the application. The second sentence of the previous
section provided: ``If an informal conference is held under Sec.
773.13(c), the decision shall be made within 60 days of the close of
the conference, unless a later time is necessary to provide an
opportunity for a hearing under paragraph (b)(2) of this section.'' In
our 2000 final rule, we redesignated previous section 773.15(a)(1) as
773.7(a), but made no other revisions to the provision at that time.
After the promulgation of our 2000 rule, it came to our attention that
the cross-references in that provision were either incorrect or no
longer applicable.
We proposed to correct the first cross-reference so that it
properly refers to section 773.6(c). We also proposed to remove the
language that included the second cross-reference because it is no
longer relevant due to certain provisions in our 2000 final rule. More
specifically, we proposed to remove the qualifier phrase ``unless a
later time is necessary to provide an opportunity for a hearing under
paragraph (b)(2) of this section'' because ``(b)(2)'' referred to a
provision--previous 30 CFR 773.15(b)(2)--that no longer exists and
because the logic behind the current provision is no longer applicable.
The hearing contemplated by previous section 773.15(b)(2) was a hearing
held in conjunction with an applicant's appeal of a notice of
violation.
We did not receive any comments on our proposal and are adopting
the amendments as proposed. Thus, under this final rule, if an
applicant is pursuing a good faith appeal of a violation, and otherwise
meets the criteria of 30 CFR 773.14 (see heading III.K., below), the
applicant will be eligible to receive a provisionally issued permit.
Under these circumstances, we no longer see a need to delay the
permitting decision to provide an opportunity for a hearing on a
violation.
G. Section 773.8--General Provisions for Review of Permit Application
Information and Entry of Information Into AVS
Under 30 CFR 773.8, a regulatory authority is required to enter
certain permit application information into AVS. (See 30 CFR 701.5 for
definition of Applicant/Violator System or AVS.) We proposed to revise
previous 30 CFR 773.8 by removing the phrase ``ownership and control''
from paragraph (b)(1). We proposed this revision because we also
proposed to revise the heading of 30 CFR 778.11 by removing the phrase
``ownership and control.'' See discussion under heading III.W., below.
Our rationale for the proposed revisions was that, under Sec. 778.11,
an applicant must submit information in addition to what could be
called ``ownership and control'' information. At paragraph 773.8(b)(1),
we also proposed to add language clarifying that the information
described (through a cross-reference to sections 778.11 and 778.12(c))
is required to be disclosed.
We did not receive any specific comments on our proposal and are
adopting the amendments as proposed. Under this final rule, the entire
provision at paragraph 773.8(b)(1) now reads: ``The information you are
required to submit under Sec. Sec. 778.11 and 778.12(c) of this
subchapter.''
H. Section 773.9--Review of Applicant and Operator Information
As part of a regulatory authority's permit eligibility
determination, our regulations at 30 CFR 773.9 require regulatory
authorities to review certain information provided by permit
applicants. Similar to our amendment to section 773.8, we proposed to
revise the section heading at 30 CFR 773.9 by removing references to
``ownership and control'' information. We also proposed to revise
section 773.9(a) by removing the phrase ``applicant, operator, and
ownership or control.'' We explained that these revisions clarify that
the applicant information, required to be disclosed under section
778.11, is not
[[Page 68011]]
limited to ownership and control information.
As with the revision to section 773.8, we also proposed to revise
section 773.9(a) by clarifying that the information described in the
section (through a cross-reference to section 778.11) is not optional
and must be disclosed in a permit application. Finally, we proposed to
revise section 773.9(a) by changing the term ``business structure'' to
``organizational structure.'' We explained that this is a broader and
more inclusive description of the entities subject to the review.
We are adopting the amendments as proposed. (We respond to the one
comment we received on the proposed provision under heading III.W.,
below.) Thus, the amended section heading now reads: ``Review of
applicant and operator information'' and amended paragraph (a)
provides: ``We, the regulatory authority, will rely upon the
information that you, the applicant, are required to submit under Sec.
778.11 of this subchapter, information from AVS, and any other
available information, to review your and your operator's
organizational structure and ownership and control relationships.''
I. Section 773.10--Review of Permit History
We proposed to revise 30 CFR 773.10, which requires regulatory
authorities to, among other things, review the permit history of a
permit applicant and its operator during the permit eligibility review.
More specifically, we proposed to revise section 773.10(b) by removing
the reference to the applicant's ``controllers disclosed under
Sec. Sec. 778.11(c)(5) and 778.11(d) of this subchapter.'' In
paragraph (c), we proposed to remove the language ``your controllers,
or your operator's controllers'' from the first sentence. In the second
sentence of paragraph (c), we proposed to remove the language ``and was
not disclosed under Sec. 778.11(c)(5) of this subchapter.'' We
proposed these revisions because we also proposed to remove the
requirement at section 778.11 for an applicant to disclose its
controllers (including its ``designated controller'') in a permit
application. See discussion under heading III.W., below.
We did not receive any specific comments on our proposal and are
adopting the amendments as proposed. Under this final rule, paragraph
(b) now reads: ``We will also determine if you or your operator have
previous mining experience.'' Paragraph (c) now reads: ``If you or your
operator do not have any previous mining experience, we may conduct an
additional review under Sec. 774.11(f) of this subchapter. The purpose
of this review will be to determine if someone else with mining
experience controls the mining operation.''
J. Section 773.12--Permit Eligibility Determination
We proposed to revise our provisions for permit eligibility
determinations at 30 CFR 773.12, which, along with other provisions,
implement section 510(c) of the Act. We received multiple comments
about the different aspects of our proposed changes. After careful
consideration of all the comments we received, we decided to adopt the
amendments as proposed. Below, we discuss each aspect of the final rule
provisions and respond to comments we received on our 2006 proposals.
1. Section 773.12(a)--``Downstream'' Ownership
As indicated above, under our discussion of the definition of own,
owner, or ownership (see heading III.C), paragraph 773.12(a) is our
regulatory provision that governs the ``downstream'' reach of the rule
in terms of permit eligibility. We proposed to revise paragraph (a)(2)
so that the regulatory authority would no longer be able to deny a
permit based on indirect ownership of a surface coal mining operation
with a violation; however, we explained that we would keep the right to
deny a permit based on indirect control. To simplify the rule, we also
proposed to merge previous paragraphs (a)(2) and (a)(3), without
changing the substantive meaning of those provisions. Under the new
paragraph (a)(2), we proposed to remove the reference to ownership so
that a permit applicant would not be eligible for a permit if any
surface coal mining operation that the applicant or the applicant's
operator ``indirectly control[s] has an unabated or uncorrected
violation and [the applicant's or operator's] control was established
or the violation was cited after November 2, 1988.'' Thus, with respect
to ownership, regulatory authorities could only look ``one level down''
from the applicant in making a permit eligibility determination. For
the reasons explained under heading III.C., we are adopting these
amendments as proposed.
We have already responded to comments relating to the downstream
reach of the rule under the discussion of our amended definition of
own, owner, or ownership. See heading III.C., above.
2. Section 773.12(b)--Independent Authority Language
We also proposed to remove previous 30 CFR 773.12(b). Consistently
with the D.C. Circuit's ruling on retroactivity in NMA v. DOI II, our
2000 final rule explained, at paragraph 773.12(b), that an applicant is
eligible to receive a permit, despite it or its operator's indirect
ownership or control of an operation with an unabated or uncorrected
violation, if both the violation and the assumption of ownership or
control occurred before November 2, 1988. However, 30 CFR 773.12(b)
also provided that the applicant is not eligible to receive a permit
under this provision if there ``was an established legal basis,
independent of authority under section 510(c) of the Act, to deny the
permit * * *.''
NMA challenged 30 CFR 773.12(b), claiming that if there is an
``independent authority'' to deny the permit, that authority exists
whether or not it is referenced in the regulatory language. According
to NMA, the provision is superfluous and potentially confusing. To
settle this claim, we proposed to remove 30 CFR 773.12(b). We satisfied
our obligation under the settlement in our 2003 proposed rule. Because
we continued to find merit in the proposal, we carried it forward in
our 2006 proposed rule.
We conclude that any ``independent authority'' exists with or
without this regulatory provision. Thus, because the language is in
fact superfluous, we are adopting our proposal to remove this
provision. We assume that regulatory authorities will be familiar with
any other laws that may affect an applicant's ability to obtain a
permit. We do note that the explanation in former 30 CFR 773.12 is
still true and valid; however, we conclude that this type of
explanatory information is best left for preamble language. This
amendment makes section 773.12, as a whole, more clear and concise,
without diminishing its effectiveness. Because we removed 30 CFR
773.12(b), we also redesignated paragraphs (c), (d), and (e) as (b),
(c), and (d), respectively.
KRC/CCC oppose the removal of the ``independent authority''
language, asserting that this language served as an important reminder
to regulatory authorities involved in permit eligibility
determinations. Further, these commenters state that, because the
Federal regulations serve as a benchmark for judging counterpart
provisions in State programs, we should retain this language to signal
to States that State programs may not be drawn
[[Page 68012]]
so as to eliminate independent authority as a basis for permit denial.
Finally, these commenters claim that, to the extent the proposed change
was intended to be non-substantive, we run the risk that regulatory
personnel, the courts, or both will impute unintended meaning to the
action that OSM proposed.
We conclude that explanatory language like that contained in
previous 30 CFR 773.12 is properly contained in preamble discussions.
To the extent that a change in policy can be inferred by our removal of
this language, we clarify that we do not intend a policy change. Again,
we trust that the States are aware of the legal authorities that could
affect permit eligibility, and it is not our place to instruct States
how to enforce laws other than SMCRA.
3. State Regulatory Authorities Apply Their Own Ownership and Control
Rules
In our 2006 proposed rule, we explained in preamble language that,
in meeting its obligations under section 510(c) of the Act and the
State counterparts to that provision, each State, when it processes a
permit application, must apply its own ownership and control rules to
determine whether the applicant owns or controls any surface coal
mining operations with violations. The concept is important enough to
repeat in this final rule. Consistently with State primacy, it is
appropriate for the regulatory authority with jurisdiction over an
application to apply its own ownership or control rules when making a
permit eligibility determination, since that regulatory authority has
the greatest interest in whether or not mining should commence or
continue within its jurisdiction. However, when a regulatory authority
is applying its ownership or control rules to violations in other
jurisdictions, it is advisable for the regulatory authority to consult
and coordinate, as necessary, with the regulatory authority with
jurisdiction over the violation and our AVS Office. We also stress that
a regulatory authority processing a permit application has no authority
to make determinations relating to the initial existence or current
status of a violation, or a person's responsibility for a violation, in
another jurisdiction.
We did not receive any specific comments on this explanation in our
2006 proposed rule. However, one commenter expressed a general concern
that the ``practical effect of the proposed ownership and control rules
on interstate evaluations will be to dilute the strongest state systems
by applying the weaker rules of states who have adopted a lower
standard.'' Based on our foregoing explanation, this result should not
occur because each State will apply its own rules when making permit
eligibility determinations. Thus, States with stronger rules will apply
those provisions, and not those of any other State, when making permit
eligibility determinations.
K. Section 773.14--Eligibility for Provisionally Issued Permits
Section 773.14 of our 2000 final rule allows for the issuance of a
``provisionally issued permit'' if the applicant meets the criteria
under 30 CFR 773.14(b). The codified regulatory language used the word
``may,'' indicating that the regulatory authority had discretion to
grant a provisionally issued permit, even if the applicant otherwise
met the eligibility criteria at paragraph 773.14(b). While the preamble
discussion in our 2000 rule is not explicit on this point, we intended,
in this context, that an applicant is eligible to receive a
provisionally issued permit under the specified circumstances. See,
e.g., 65 FR 79618-19, 79622-24, 79632, 79634-35, and 79638. In order to
reconcile any ambiguity, we proposed to revise our rule language at 30
CFR 773.14(b) so that it plainly states that an applicant who meets the
30 CFR 773.14(b) eligibility criteria will be eligible for a
provisionally issued permit.
One commenter, a State regulatory authority, said changing ``may''
to ``will'' improves this section. We did not receive any other
comments on our proposal and are adopting the amendment as proposed.
However, we stress that an applicant must meet all other permit
application approval and issuance requirements before receiving a
provisionally issued permit, and the provisional permittee must comply
with all performance standards.
L. Section 773.21--Initial Review and Finding Requirements for
Improvidently Issued Permits
Sections 773.21 through 773.23 of our rules are the provisions
governing improvidently issued permits. These are permits that should
not have been issued because of an applicant's ownership or control of
a surface coal mining operation with an unabated or uncorrected
violation at the time of permit issuance. We proposed two substantive
revisions to 30 CFR 773.21(c). Below, we discuss each aspect of the
final rule provisions and respond to comments we received on our 2006
proposals.
1. Evidentiary Standard
Our first proposed revision related to our burden of proof and
evidentiary standard when making a preliminary finding that a permit
was improvidently issued. In our 2003 proposed rule, in accordance with
our settlement with NMA, we proposed to amend section 773.21(c) so that
our preliminary finding that a permit was improvidently issued ``must
be based on reliable, credible, and substantial evidence and establish
a prima facie case that [the permittee's] permit was improvidently
issued.'' See 68 FR 75039. Based on input received from our State co-
regulators--both in their comments on our 2003 proposed rule and in our
outreach meeting--we determined that requiring a prima facie case of
improvident permit issuance to be based on ``reliable, credible, and
substantial'' evidence is too high of a burden on a regulatory
authority (particularly for a preliminary finding). As a result, in our
2006 proposed rule, we proposed that a preliminary finding that a
permit was improvidently issued ``must be based on evidence sufficient
to establish a prima facie case that [the permittee's] permit was
improvidently issued.'' After reviewing the comments on our proposal,
we conclude that this evidentiary standard is consistent with the
standard that typically applies to OSM's regulatory findings. As such,
we are adopting the amendment as proposed. See headings III.P. and
III.S., below, for additional discussions on burden of proof issues.
We did not receive any adverse comments on our proposal. IMCC and
other State commenters strongly supported the proposed revision. IMCC
reiterated its comments on our 2003 proposed rule, noting that our 2003
proposal would have required more weighty evidence than would normally
be the case and essentially converted the concept of ``prima facie'' to
a higher evidentiary standard. KRC/CCC also supported the 2006
proposal. They explained that our 2003 proposed rule contained an
unexplained and unnecessary evidentiary standard for prima facie
showings. We agree with these comments and, therefore, abandoned the
2003 approach.
2. Removal of Various Posting Requirements
We proposed to remove previous 30 CFR 773.21(c)(2), which required
us to post a notice of a preliminary finding of improvident permit
issuance at our office closest to the permit area and on the Internet.
Similarly, we also proposed to remove the requirement at
[[Page 68013]]
previous paragraph 773.22(d) to post a preliminary decision ``at our
office closest to the permit area.'' Additionally, we proposed to
remove all other Internet posting requirements adopted in our 2000
final rule. In addition to paragraph 773.21(c)(2), we proposed to
remove the Internet posting requirements found at previous paragraphs
773.22(d), 773.23(c)(2), and 773.28(d). We proposed to retain the
requirement at paragraph 773.23(c)(2) to post a notice of permit
suspension or rescission at our office closest to the permit area. We
also proposed to retain the requirement at paragraph 773.28(d) to post
a final agency decision on a challenge of an ownership or control
listing or finding on AVS. After consideration of the public comments,
we adopted these amendments as proposed.
Our inclusion of the Internet posting requirements in our 2000
final rule was primarily based on comments that we should expand the
public's access to our decisions. See, e.g., 65 FR 79632. While public
access to final decisions remains important, we have concluded that the
various Internet posting requirements in our 2000 final rule were
unduly burdensome to regulatory authorities, especially when public
notice of final decisions can be accomplished by the less burdensome,
conventional method of posting them at our office closest to the permit
area. We deem it improper to require States to establish and maintain
potentially costly information technology systems and hire qualified
staff to implement posting requirements that do not have proven
utility. Moreover, nothing in the Act requires these postings. In
addition, regulatory authorities are already required to enter much of
the relevant information into AVS, which is available to the public. We
also conclude that posting preliminary findings by any method is unduly
burdensome, particularly because this information is of questionable
value to the public. In sum, in this final rule, we removed all
Internet and preliminary finding posting requirements, but retained
public posting of our final decisions.
We received only one comment on our proposal to remove these
various posting requirements. KRC/CCC opposed our proposals. First,
these commenters state that we pointed to no objection from any SMCRA
regulatory authority or to any experience of our own to support our
``conclusory assertions.'' We concede that experience under these
provisions has been limited, particularly because these requirements
never took effect for the States. However, we note that the States have
not expressed any objection to removing the provisions. In short, we
reconsidered the wisdom of these provisions prior to their widespread
implementation. As such, our removal of the provisions in this final
rule does not alter the status quo. We have concluded that our multiple
posting requirements were unnecessary overkill. Moreover, the Act
provides ample opportunities for public participation, which have been
adequate prior to and since 2000. These commenters have not given us
any reason to conclude otherwise.
Next, these commenters point to a preamble discussion in our 2000
final rule where we acknowledged, generally, the Act's public
participation requirements. However, we did not state or conclude that
the provisions we are removing in this final rule are required by the
Act. In the same preamble, we noted the Act's various public
participation requirements. Upon reconsideration of this issue, we
conclude that the Act's public participation requirements are
sufficient.
Finally, these commenters assert that our statement in our 2006
proposed rule that these provisions were of ``questionable value to the
public'' was politically motivated. We disagree. As explained above,
upon further examination, we determined that the multiple posting
requirements in our 2000 rule were unnecessary and excessive. We also
note that these commenters do not present any concrete reasons why
these posting requirements are needed. For example, the commenters do
not explain why posting requirements not contained in the Act are so
beneficial that we should require States to undertake the expense of
implementing them. In short, these commenters have not provided a
convincing argument in favor of retaining the provisions.
M. Section 773.22--Notice Requirements for Improvidently Issued Permits
We proposed to remove 30 CFR 773.22(d), which contained posting
requirements similar to those found at previous 30 CFR 773.21(c)(2),
discussed above under heading III.L. Specifically, we proposed to
remove the requirement to post a notice of proposed suspension or
rescission at our office closest to the permit area and on the
Internet. Because we proposed to remove paragraph (d), we also proposed
to redesignate paragraphs (e) through (h) as paragraphs (d) through
(g). For the reasons discussed under heading III.L., above, we are
adopting these amendments as proposed. In the final rule language that
follows this preamble discussion of our final rule, our amendments to
30 CFR 773.22 are shown as a Federal Register instruction.
N. Section 773.23--Suspension or Rescission Requirements for
Improvidently Issued Permits
We proposed to revise the posting requirements contained in 30 CFR
773.23. Previous 30 CFR 773.23(c)(2) required us to post a final notice
of permit suspension or rescission (which requires the holder of the
improvidently issued permit to cease all surface coal mining operations
on the permit) at our office closest to the permit area and on the
Internet. We proposed to remove the requirement to post final notices
on the Internet. However, because section 773.23(c)(2) pertains to
final findings (as opposed to preliminary and proposed findings under
sections 773.21 and 773.22, respectively), we proposed to retain the
requirement to post them at our office closest to the permit area. For
the reasons discussed under heading III.L., above, we are adopting the
amendments as proposed. We conclude it is appropriate to post such
notices of final actions for public view.
O. Section 773.26--How To Challenge an Ownership or Control Listing or
Finding
Sections 773.25 through 773.28 of our rules govern challenges to
ownership or control listing or findings. Generally speaking, an
ownership or control listing happens when an applicant identifies, or
``lists,'' a person as an owner or controller in a permit application.
That information is then entered into AVS by a regulatory authority. By
contrast, an ownership or control finding under 30 CFR 774.11(g)
constitutes a regulatory authority's fact-specific determination that a
person owns or controls a surface coal mining operation.
In its judicial challenge to our 2000 final rule, NMA claimed that
previous 30 CFR 773.26(a) was confusing. That section explains how and
where a person may challenge an ownership or control listing or
finding. NMA claimed that the provision did not clearly delineate the
appropriate forum in which to bring a challenge. NMA also expressed
concern that the provision seemed to refer only to applicants and
permittees but not other persons who are identified in AVS as owners or
controllers.
Section 773.25 of our 2000 final rule provided that any person
listed in a permit application or in AVS as an owner or controller, or
found by a
[[Page 68014]]
regulatory authority to be an owner or controller, may challenge the
listing or finding. As we explained in the preamble to the 2000 rule,
our intent was to allow any person listed in a permit application or in
AVS, or found to be an owner or controller, to initiate a challenge at
any time, regardless of whether there is a pending permit application
or an issued permit. See 65 FR 79631. Section 773.26(a) was never
intended to limit who may use the challenge procedures under 30 CFR
773.25; rather, it only specified the procedure and forum in which to
challenge an ownership or control listing or finding.
However, to provide even greater clarity to the language at section
773.26(a), and in accordance with our settlement with NMA, we proposed
(in our 2003 proposed rule) to revise our regulations at 30 CFR
773.26(a) to more clearly specify the forum in which a person may
initiate an ownership or control challenge. Because we continued to
find merit in the proposal, we carried it forward to our 2006 proposed
rule. Specifically, we proposed that challenges pertaining to a pending
permit application must be submitted to the regulatory authority with
jurisdiction over the pending application. We further proposed that all
other challenges concerning ownership or control of a surface coal
mining operation must be submitted to the regulatory authority with
jurisdiction over the relevant surface coal mining operation. We are
adopting this amendment as proposed.
We also proposed to add new 30 CFR 773.26(e), in accordance with
our settlement with NMA. In this final rule, we are adopting new
paragraph 773.26(e) as proposed. This new provision allows a person who
is unsure why he or she is shown in AVS as an owner or controller of a
surface coal mining operation to request an informal explanation from
our AVS Office. The new provision requires us to respond to such a
request within 14 days. Our response would be informal and would set
forth in simple terms why the person is shown in AVS. In most, if not
all, cases, the explanation would be as simple as specifying that the
person was found to be an owner or controller under 30 CFR 774.11(g)
(of which the person should already be aware due to that section's
written notice requirement) or was listed as an owner or controller in
a permit application. Understanding the basis for being shown in AVS
will give persons a better sense of the type of evidence they will need
to introduce in an ownership or control challenge. See also 30 CFR
773.27(c), which provides examples of materials a person may submit in
support of his or her ownership or control challenge.
We emphasize that, in meeting its obligations under section 510(c)
of the Act and the State counterparts to that provision, each State
must apply its own ownership and control rules to determine whether the
applicant owns or controls any surface coal mining operations with
violations. See generally 65 FR 79637. Further, we stress that an
ownership or control decision by one State is not necessarily binding
on any other State. This approach is consistent with principles of
State primacy and recognizes that not all States will have identical
ownership and control rules.
We did not receive any adverse comments on the proposed amendments.
NMA and other industry commenters voiced support for the changes,
stating that the new language ``makes clear'' that any person listed in
a permit application or in AVS may challenge that listing at any time.
Further, these commenters state that proposed paragraph 773.26(e) adds
another protection for persons listed in AVS.
P. Section 773.27--Burden of Proof for Ownership or Control Challenges
As discussed above, our rules contain provisions for challenging
ownership or control listings or findings. Under previous 30 CFR
773.27(a), a successful challenger had to prove by a preponderance of
the evidence that he or she is not, or was not, an owner or controller.
In its judicial challenge to our 2000 final rule, NMA argued that we
must demonstrate at least a prima facie case so that the challenger can
know what evidence he or she must rebut.
The preamble to our 2000 final rule already made it clear that we
had to establish a prima facie case when making a finding of ownership
or control:
[I]n making a finding [of ownership or control] under final Sec.
774.11(f), the regulatory authority must indeed make a prima facie
determination of ownership and control, based on the evidence
available to the regulatory authority. In making a prima facie
determination, the finding should include evidence of facts which
demonstrate that the person subject to the finding meets the
definition of own, owner, or ownership or control or controller in
Sec. 701.5.
65 FR 79640. Nonetheless, to settle NMA's claim and to set forth more
clearly the relative burdens of the parties, we agreed to propose
revisions to section 30 CFR 773.27(a) and 774.11(f), as well as a
related revision to 30 CFR 773.21(c) (see discussion above under
heading III.L. above). In satisfaction of our settlement obligation, we
proposed the revisions in our 2003 proposed rule. Because we continued
to find merit in the proposals, we carried them forward, in slightly
modified form, in our 2006 proposed rule. After consideration of the
public comments, we are adopting the amendments as proposed, with
slight modifications.
Under this final rule, we are amending 30 CFR 774.11(f) to clarify
that a regulatory authority's preliminary finding of ownership or
control must be based on evidence sufficient to establish a prima facie
case of ownership or control. We are also adding a new provision at
paragraph 774.11(g) that requires us to issue a final finding of
ownership or control after giving the person subject to the preliminary
finding an opportunity to submit information tending to demonstrate a
lack of ownership or control. The final finding at paragraph 774.11(g)
will be based upon, and, if necessary, amplify, the prima facie finding
under paragraph 774.11(f). As such, the final finding will, at a
minimum, be based on evidence sufficient to establish a prima facie
case. Based upon the changes at section 774.11, we have amended section
773.27(a) so that it reads:
(a) When you challenge a listing of ownership or control, or a
finding of ownership or control made under Sec. 774.11(g) of this
subchapter, you must prove by a preponderance of the evidence that
you either--
(1) Do not own or control the entire surface coal mining
operation or relevant portion or aspect thereof; or
(2) Did not own or control the entire surface coal mining
operation or relevant portion or aspect thereof during the relevant
time period.
Our amendment to paragraph (a) clarifies that a person can
challenge either an ownership or control listing or a finding of
ownership or control under 30 CFR 774.11(g). Further, due to the cross-
reference to paragraph 774.11(g), it is clear that any such challenge
will be based on a finding that is, at a minimum, supported by evidence
sufficient to establish a prima facie case of ownership or control. At
paragraphs 773.27(a)(1) and (a)(2), this final rule clarifies that the
``operation'' referred to in the previous provisions is a surface coal
mining operation.
Under the burden of proof allocation in this final rule, as under
our previous rules, if the challenge concerns a finding of ownership or
control, the regulatory authority will already have borne the initial
burden of establishing a prima facie case of ownership or control by
[[Page 68015]]
issuing its finding in accordance with paragraph 774.11(g). If the
challenge concerns an ownership or control listing, the regulatory
authority's initial burden is substantially lower: The regulatory
authority must specify only the circumstances of the listing, such as
who listed the person, the date of the listing, and in what capacity
the person was listed. In either type of challenge, after the
regulatory authority meets its initial burden, the burden shifts to the
challenger to prove, by a preponderance of the evidence, that he or she
does not, or did not, own or control the relevant surface coal mining
operation. The challenger bears the ultimate burden of persuasion.
We did not receive any adverse comments on our proposed amendments.
NMA and other industry commenters supported our proposals, noting that
the prima facie standard adds fairness to the process. KRC/CCC did not
oppose making express the implicit requirement that ownership or
control findings must be based on evidence sufficient to establish a
prima facie case.
Q. Section 773.28--Written Agency Decisions on Challenges to Ownership
or Control Listings or Findings
We proposed to revise the posting requirements of 30 CFR 773.28,
our rules governing written agency decisions on challenges to ownership
or control listings or findings. Former paragraph 773.28(d) required us
to post final decisions on ownership or control challenges on AVS and
on the AVS Office's Internet home page. We proposed to remove the
requirement to post these decisions on the Internet. However, because
30 CFR 773.28 pertains to final decisions on ownership or control
challenges, we proposed to keep the requirement to post these decisions
on AVS. Because these final decisions may have permit eligibility
consequences, it is appropriate to make such decisions publicly
available by posting them on AVS.
After consideration of the public comments received on our
proposal, we decided to adopt this amendment as proposed. Our rationale
for removing the Internet posting requirement and our responses to
comments are set forth more fully above, under the discussion of 30 CFR
773.21 (see heading III.L).
One State commenter said we should specify the location of the
posting required under paragraph 773.28(d). The final provision
requires posting on AVS. After this rule takes effect in primacy
States, our AVS Office will notify these States how to input the
required information.
R. Section 774.9--Information Collection
At 30 CFR 774.9, our regulations contain a discussion of Paperwork
Reduction Act requirements and the information collection aspects of 30
CFR part 774.9. We proposed to amend this section by streamlining the
codified information collection discussion. We did not receive any
comments and are adopting the amendment as proposed. A more detailed
discussion of the information collection burdens associated with part
774 is contained under the Procedural Determinations section (see
heading IV.10.), below.
S. Section 774.11--Post-permit Issuance Requirements for Regulatory
Authorities
We proposed several revisions to 30 CFR 774.11, which primarily
contains requirements for regulatory authorities following the issuance
of a permit. After consideration of the public comments received on our
proposals, we are adopting them as proposed, with the minor
modifications described below.
First, we proposed to revise paragraph 774.11(a)(3), which
previously required a regulatory authority to enter into AVS all
``[c]hanges of ownership or control within 30 days after receiving
notice of a change.'' We proposed to revise paragraph (a)(3) by
removing ``Changes in ownership or control'' and replacing it with
``Changes to information initially required to be provided by an
applicant under 30 CFR 778.11.'' We proposed this revision because we
also proposed to revise the heading of 30 CFR 778.11 by removing the
phrase ``ownership and control.'' See discussion below, under heading
III.W. Our rationale for the proposed revisions was that, under section
778.11, an applicant must submit information in addition to what could
be called ``ownership and control'' information. We are adopting this
amendment because we are also adopting the corresponding amendment to
section 778.11.
Second, we proposed to revise 30 CFR 774.11(e). Under the specified
circumstances, 30 CFR 774.11(c) of our rules requires us to make a
preliminary finding of permanent permit ineligibility. Paragraph 30 CFR
774.11(d) provides for administrative review of a preliminary finding.
Previous paragraph 774.11(e) provided: ``We must enter the results of
the finding and any hearing into AVS.'' There was substantial confusion
as to whether we had to enter a preliminary finding into AVS, prior to
administrative resolution.
To settle a claim brought by NMA, we agreed to clarify that a
finding of permanent permit ineligibility would be entered into AVS
only if it is affirmed on administrative review or if the person
subject to the finding does not seek administrative review and the time
for seeking administrative review has expired. To incorporate this
clarification into our regulatory requirements, we proposed to revise
paragraph 774.11(e). Specifically, at the beginning of paragraph (e),
we proposed to add the subheading ``Entry into AVS.'' We also proposed
to create new paragraph (e)(1), to provide: ``If you do not request a
hearing, and the time for seeking a hearing has expired, we will enter
our finding into AVS,'' and new paragraph (e)(2), to provide: ``If you
request a hearing, we will enter our finding into AVS only if that
finding is upheld on administrative appeal.'' After consideration of
the comments received on these proposals, we are adopting the
amendments as proposed. We conclude that, given the severe consequences
that attach to a finding of permanent permit ineligibility, it is only
fair to afford a measure of due process before entering the finding
into AVS.
Third, we proposed to revise 30 CFR 774.11(f), which governs a
regulatory authority's finding of ownership or control. As with our
amendment to 30 CFR 773.27, discussed above under heading III.P., we
proposed to revise paragraph 774.11(f) to clarify that a regulatory
authority's written finding of ownership or control must be based on
evidence sufficient to establish a prima facie case. In the preamble to
our 2000 final rule, we explained that a finding of ownership or
control must be based on a prima facie determination of ownership or
control (65 FR 79640). In our 2006 proposed rule, we proposed to make
this implicit requirement explicit. In the context of a regulatory
authority's finding of ownership or control, a prima facie case is one
consisting of sufficient evidence to establish the elements of
ownership or control and that would entitle the regulatory authority to
prevail unless the evidence is overcome by other evidence.
In our 2003 proposed rule, we proposed that a regulatory
authority's prima facie finding under section 774.11(f) must be based
on reliable, credible, and substantial evidence. However, as with
section 773.21 (see heading III.L., above), based on input received
from our State co-regulators and other commenters, we determined that
requiring a prima facie finding of ownership or control to be based on
``reliable, credible, and substantial'' evidence is too high of a
burden on a regulatory authority for an initial finding.
[[Page 68016]]
Thus, in our 2006 proposed rule, we proposed that our findings of
ownership or control under paragraph 774.11(f) ``must be based on
evidence sufficient to establish a prima facie case of ownership or
control.'' We explained that this is the evidentiary standard that
typically applies to OSM's regulatory findings. After consideration of
the public comments received on this proposal, we are adopting the
amendment as proposed.
In this final rule, we are also modifying proposed paragraph
774.11(f) to clarify that the finding in this section is a preliminary
finding. This amendment merely makes express an implicit aspect of our
2006 proposal. It was clear, in context, that the finding in paragraph
774.11(f) was intended to be preliminary, as it preceded the final
determination required under proposed paragraph 774.11(g). We are also
amending paragraph 774.11(f) to make clear that the ``operation''
referenced in that provision is a ``surface coal mining operation.''
For logistical reasons, we also proposed to merge previous
paragraph 774.11(f)(1) into new paragraph 774.11(f); merge the
substance of former paragraph 774.11(f)(2) into new paragraph 774.11(g)
(discussed below); and remove former paragraph 774.11(f)(3) to be
consistent with the removal of the requirements at previous 30 CFR
778.11(c)(5) and (d) (discussed below under heading III.W.). These
proposed changes included the removal of the requirement at previous
paragraph 774.11(f)(3) that, following a finding of ownership or
control, a person had to disclose his or her identity under 30 CFR
778.11(c)(5) and, if appropriate, certify that he or she was a
controller under 30 CFR 778.11(d). As discussed below under heading
III.W., we removed the information disclosure requirements at previous
paragraphs 778.11(c)(5) and (d). Therefore, the cross-references to
those provisions in previous section 774.11 no longer made sense. We
adopted these amendments as proposed.
Fourth, we proposed to revise section 774.11 to address NMA's claim
that our 2000 final rule denied a person the right to challenge a
decision to ``link'' it by ownership or control to a violation before
the ``link'' is entered into AVS. While we disagree with the
characterization that we enter ``links'' to violations into AVS, we
proposed to create a new paragraph 774.11(g).
In our 2006 proposed rule, we explained that, under the new
regulatory provision, after we make a preliminary written finding of
ownership or control under paragraph 774.11(f), but before we enter the
finding into AVS, we will allow the person subject to the preliminary
finding 30 days in which to submit any information tending to
demonstrate a lack of ownership or control. After reviewing all
information submitted, if we are persuaded that the person is not an
owner or controller, we will serve the person with a written notice to
that effect; if we still find the person to be an owner or controller
or if the person does not submit any information within the 30-day
period, we must enter our finding into AVS. The requirement to enter
our finding into AVS was previously found at paragraph 774.11(f)(2); we
moved that requirement into new paragraph 774.11(g).
After consideration of the public comments we received on proposed
paragraphs 774.11(f) and (g), we are adopting the amendments as
proposed, with a minor modification. We modified the proposal to
provide that, if we make a final finding (under paragraph 774.11(g))
that the person is an owner or controller, we will issue a written
finding to that person. The process under new paragraph 774.11(g) will
be informal and non-adjudicatory, and we expect regulatory authorities
to make prompt determinations after receipt of any information under
this provision. We conclude that NMA had a legitimate concern regarding
previous paragraph 774.11(f). Moreover, any delay of entry of a finding
of ownership or control into AVS will be very minor.
Fifth, we proposed to add a new paragraph 774.11(h), which would
have specified that we do not need to make a finding of ownership or
control before entering into AVS the information that permit applicants
are required to disclose under paragraphs 778.11(b) and (c). With non-
substantive changes, we are adopting the amendment as proposed.
However, we decided to move this provision to new paragraph 778.11(e)
because we determined that it makes more sense in the section
pertaining to permit information. See complete discussion under heading
III.W., below.
Finally, we proposed to make non-substantive revisions to previous
paragraph 774.11(g) and redesignate that provision. We adopted this
amendment as proposed. Final paragraph 774.11(h) now reads: ``If we
identify you as an owner or controller under paragraph (g) of this
section, you may challenge the finding using the provisions of
Sec. Sec. 773.25, 773.26, and 773.27 of this subchapter.''
IMCC and other State commenters strongly supported the evidentiary
standards in our 2006 proposed rule. IMCC reiterated its comments on
our 2003 proposed rule, noting that our 2003 proposal would have
required more weighty evidence than would normally be the case and
essentially converted the concept of ``prima facie'' to a higher
evidentiary standard. Another State commenter said ``using the prima
facie standard is an improvement and provides clarity.'' We agree with
these comments.
NMA and other industry commenters also supported the prima facie
standard. These commenters said the fact that OSM must establish a
prima facie case, coupled with the changes that limi