80 FR 15953 - Kentucky Regulatory Program

DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement

Federal Register Volume 80, Issue 58 (March 26, 2015)

Page Range		15953-15958
FR Document		2015-06962
We, the Office of Surface Mining Reclamation and Enforcement (OSMRE), are reopening the public comment period on the proposed amendment to the Kentucky regulatory program (the Kentucky program) under the Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act) that was originally published on February 20, 2013. The public comment period and opportunity for public hearing is being reopened to incorporate subsequent information (emergency regulations, permanent regulations, legislation, and revised statutes) that we received from Kentucky to address a deficiency in the Kentucky program regarding reclamation bonds and to revise its program to be administered in a manner consistent with SMCRA and the Federal regulations. This document gives the times and locations that this proposed amendment to the Kentucky program is available for your inspection, the comment period during which you may submit written comments on the amendment, and the procedures that we will follow for the public hearing, if one is requested.
Federal Register, Volume 80 Issue 58 (Thursday, March 26, 2015)
[Federal Register Volume 80, Number 58 (Thursday, March 26, 2015)]
[Proposed Rules]
[Pages 15953-15958]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-06962]


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DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation and Enforcement

30 CFR Part 917

[SATS No. KY-256-FOR; Docket ID: OSM-2012-0014; 
S1D1SSS08011000SX066A00067F154S180110; 
S2D2SSS08011000SX066A00033F15XS501520]


Kentucky Regulatory Program

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

ACTION: Proposed rule; reopening of the public comment period and 
opportunity for public hearing.

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SUMMARY: We, the Office of Surface Mining Reclamation and Enforcement 
(OSMRE), are reopening the public comment period on the proposed 
amendment to the Kentucky regulatory program (the Kentucky program) 
under the Surface Mining Control and Reclamation Act of 1977 (SMCRA or 
the Act) that was originally published on February 20, 2013. The public 
comment period and opportunity for public hearing is being reopened to 
incorporate subsequent information (emergency regulations, permanent 
regulations, legislation, and revised statutes) that we received from 
Kentucky to address a deficiency in the Kentucky program regarding 
reclamation bonds and to revise its program to be administered in a 
manner consistent with SMCRA and the Federal regulations.
    This document gives the times and locations that this proposed 
amendment to the Kentucky program is available for your inspection, the 
comment period during which you may submit written comments on the 
amendment, and the procedures that we will follow for the public 
hearing, if one is requested.

DATES: We will accept written comments on the proposed rules until 4:00 
p.m., Eastern Standard Time (EST) April 27, 2015. If requested, we will 
hold a public hearing on April 20, 2015. We will accept requests to 
speak until 4:00 p.m., EST on April 10, 2015.

ADDRESSES: You may submit comments, identified by SATS No. KY-256-FOR 
and OSM Docket No. OSM-2012-0004, by any of the following methods:
     Federal eRulemaking Portal: www.regulations.gov. The 
proposed rule has been assigned Docket ID: OSM-2012-0014. Please follow 
the online instructions for submitting comments.
     Email: Mr. Robert Evans, [email protected].
     Fax: (859) 260-8410.
     Mail/Hand Delivery: Mr. Robert Evans, Field Office 
Director, Lexington Field Office, Office of Surface Mining Reclamation 
and Enforcement, 2675 Regency Road, Lexington, Kentucky 40503. Please 
include the rule identifiers (SATS No. KY-256-FOR and Docket ID OSM-
2012-0014) with your comments.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. For detailed instructions on 
submitting comments and additional information on the rulemaking 
process, see the ``Public Comment Procedures'' heading of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: For access to the docket to review copies of the Kentucky 
program, this amendment, a listing of any scheduled public hearings, 
and all written comments received in response to this document, you 
must go to the address listed below during normal business hours, 
Monday through Friday, excluding holidays. You may receive one free 
copy of the amendment by contacting the person listed under FOR FURTHER 
INFORMATION CONTACT or the full text of the program amendment is 
available for you to read at www.regulations.gov. Mr. Robert Evans, 
Field Office Director, Lexington Field Office, Office of Surface Mining 
Reclamation and Enforcement, 2675 Regency Road, Lexington, Kentucky 
40503. Telephone: (859) 260-3900. Email: [email protected].
    In addition, you may review a copy of the amendment during regular 
business hours at the following location: Mr. Steve Hohmann, 
Commissioner, Kentucky Department for Natural Resources, 2 Hudson 
Hollow, Frankfort, Kentucky 40601. Telephone: (502) 564-6940. Email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Mr. Robert Evans, Office of Surface 
Mining Reclamation and Enforcement, Telephone: (859) 260-3900. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background on the Kentucky Program
II. Description of the Proposed Amendment
III. Public Comment Procedures
IV. Procedural Determinations

I. Background on the Kentucky Program

    Section 503(a) of the Act permits a State to assume primacy for the 
regulation of surface coal mining and reclamation operations on non-
Federal and non-Indian lands within its borders by demonstrating that 
its program includes, among other things, ``* * * State law which 
provides for the regulation of surface coal mining and reclamation 
operations in accordance with the requirements of this Act * * *; and 
rules and regulations consistent with regulations issued by the 
Secretary pursuant to this Act.'' See 30 U.S.C. 1253(a)(1) and (7). On 
the basis of these criteria, the Secretary of the Interior 
conditionally approved the Kentucky program on May 18, 1982. You can 
find background information on the Kentucky program, including the 
Secretary's findings, the disposition of comments, and conditions of 
approval, in the May 18, 1982, Federal Register (47 FR 21434). You can 
also find later actions concerning the Kentucky program and program 
amendments at 30 CFR 917.11-917.17.

II. Description of the Proposed Amendment

    Kentucky submitted information on three occasions in response to a 
Notice under 30 CFR part 733 that we sent to Kentucky on May 1, 2012 
(Docket ID OSM-2012-0014) regarding deficiencies in its bonding 
program. These submissions are intended to address the noted 
deficiencies and were submitted as follows: September 28, 2012 
(emergency and permanent administrative regulations), July 5, 2013 
(House Bill (HB) 66 and emergency and permanent regulations), and 
December 3, 2013 (revised statutes and permanent regulations). Below is 
a summary of those submissions.
    A. Kentucky Response (First Submission, September 28, 2012): We 
announced receipt of the submission on September 28, 2012, (first 
amendment request) in the February 20, 2013 Federal Register (78 FR 
11796). We are

[[Page 15954]]

summarizing the content of that submission again. Our intent is to 
issue one decision pertaining to both that submission and the two 
additional submissions announced in this Notice.
    The first amendment submission included program changes intended to 
take immediate action involving the financial inadequacies of the bond 
program. These program changes are identified as either emergency 
Kentucky Administrative Regulations (KARs) or corresponding permanent 
(ordinary) KARs. Both the emergency and permanent regulations were 
signed by the Secretary, Energy and Environment Cabinet on May 4, 2012 
and submitted to the Kentucky Legislative Research Commission (LRC) on 
that date. Kentucky recognizes emergency regulations as being valid for 
180 days unless permanent regulations are approved and replace the 
emergency regulations.
    Since Kentucky permanent regulations were approved on September 6, 
2012, the emergency regulations expired and we will not be rendering a 
decision on the emergency regulations in this, or any future, 
rulemaking. Instead, we will issue a decision only on the permanent 
regulations. We are including only a brief summary of the emergency 
administrative regulations, along with a more detailed description in 
the corresponding permanent administrative regulations. Significant 
program changes that have been submitted for approval are highlighted 
below. Minor changes such as typographical corrections, cross-reference 
changes, and paragraph renumbering are not mentioned.

1. Emergency Kentucky Administrative Regulations

     405 KAR 10:011E: This is an emergency regulation (as noted 
by an E following the section number) and is an emergency repealer that 
removes the following two administrative regulations from Chapter 10 of 
Title 405: Chapter 405 KAR 10:010, General Requirements for Performance 
Bond and Liability Insurance, and 405 KAR 10:020, Amount and Duration 
of Performance Bond. With the exception of 405 KAR 10:010, sections 4 
and 5, the contents of the repealed sections are being relocated into a 
new administrative regulation which will contain all information on 
bonding surface mine disturbances (See 405 KAR 10:015 addressed below). 
Section 4, Requirement to File a Certificate of Liability, and Section 
5, Incorporation By Reference, are being relocated to 405 KAR 10:030, 
which is addressed below.
     405 KAR 10:015E: This is an emergency regulation and it 
immediately implements certain provisions of Kentucky's plan to address 
the bonding deficiencies. This emergency regulation is identical to the 
permanent (ordinary) regulations at 405 KAR 10:015 noted below.

2. Permanent (Ordinary) Kentucky Administrative Regulations

     405 KAR 10:015, General bonding provisions: This is a new 
regulation that combines two repealed sections (405 KAR 10:010 and 
10:020 mentioned above) and incorporates parts of 405 KAR 10:030 
(addressed below). It consolidates into one regulation all current 
existing bonding criteria, types of bonds, bonding methods, terms and 
conditions of bonds, and new calculation protocols. It also contains a 
protocol for bond calculation for demolition and disposal costs for 
materials used in mining operations at preparation plants. In addition, 
it provides for the calculation of costs associated with mine sites 
that have been identified as producers of substandard effluent 
discharges requiring long term treatment. The following significant 
program changes are included within this regulation:

--Section 6, Determination of Bond Amounts: This section allows the 
cabinet to use the reclamation costs submitted in the permit 
application to establish the bond amount required, if those costs are 
higher than the reclamation costs calculated by the cabinet. It also 
requires the cabinet to review bond amounts established in the 
regulations at a minimum of every two years to determine if those 
amounts are adequate after consideration of the impacts of inflation 
and increases in reclamation costs.
--Section 7, Minimum Bond Amount: This section increases minimum bond 
amounts to $75,000 for the entire surface area under one permit, 
$75,000 per increment for incrementally bonded permits, $50,000 for a 
permit or increment operating on previously mined areas, and $10,000 
for underground mines that have only underground operations (i.e., no 
surface facilities).
--Section 8, Bonding Rate of Additional Areas: This section establishes 
new, increased bond amounts as follows:
     $2,500 per acre and each fraction thereof for coal haul 
roads, other mine access roads, and mine management areas;
     $7,500 per acre and each fraction thereof for refuse 
disposal areas;
     $10,000 per acre and each fraction thereof for an 
embankment sediment control pond. Each pond must be measured separately 
if the pond is located off-bench downstream of the proposed mining or 
storage area. The cabinet also may apply this rate to partial 
embankment structures as deemed necessary;
     $3,500 per acre and each fraction thereof for coal 
preparation plants. In addition, the bond amount must include the costs 
associated with demolition and disposal of concrete, masonry, steel, 
timber, and other materials associated with surface coal mining and 
reclamation operations;
     $2,000 per acre and each fraction thereof for operations 
on previously mined areas;
     $3,500 per acre and each fraction thereof for all areas 
not otherwise addressed; and
     For permits with substandard drainage that require long-
term treatment, the cabinet must calculate and the permittee must post 
an additional bond amount based on the annual treatment cost provided 
by the permittee, multiplied by 20 years. In lieu of posting this 
additional bond amount, the permittee may submit a satisfactory 
reclamation and remediation plan for the areas producing the 
substandard drainage.
--Section 11, Supplemental Assurance: This section now includes the 
supplemental assurance requirements previously located at 405 KAR 
16:020 (see summary of 16:020 below) and increases the supplemental 
assurance amount from $50,000 to $150,000.

     405 KAR 10:030. General requirements for liability 
insurance: This regulation has been amended. Prior to this revision the 
regulation included general requirements for the types, terms, and 
conditions of performance bonds and liability insurance. In this 
revision, all references to performance bonds have been removed from 
sections 1 through 3 and now only requirements for liability insurance 
are included (former sections 4 and 5 have been renumbered as sections 
2 and 3). Requirements for performance bonds have been moved to 405 KAR 
10:015 as noted above. Also, two forms are specified as requirements 
related to liability insurance coverage: Certificate of Liability 
Insurance, and Notice of Cancellation, Nonrenewal or Change of 
Liability Insurance.
     405 KAR 16:020. Contemporaneous reclamation: This 
regulation has been

[[Page 15955]]

amended. A new section is included (Section 1, Definitions) and it 
defines the term ``completed reclamation.'' Subsequently, other 
sections have been renumbered. Other changes include adding references 
to the new section, 405 KAR 10:015, and removing the section involving 
Supplemental Assurance. Regulatory information regarding supplemental 
assurance has been relocated to 405 KAR 10:015, noted above.
    We are not seeking comments on the emergency regulations at 10:011E 
and 10:015E as they have been replaced by 10:015. If you submitted 
comments on the emergency and permanent regulations noted above during 
the public comment period when we published the first submission (79 FR 
11796) you do not need to resubmit them, we will be considering these 
comments in our analysis of the total submission.
    B. Kentucky Response: (Second Submission, July 5, 2013, and Third 
Submission, December 3, 2013): The first submission primarily addresses 
general bonding provisions (bonding criteria, types of bonds, bonding 
methods, terms and conditions of bonds, and new calculation protocols). 
The second and third submissions address the source of revenue used to 
supplement permit-specific bonds, the Kentucky Reclamation Guaranty 
Fund (KRGF), the responsible entities for managing the fund, and other 
bond pool related provisions.
    On March 11, 2013, the General Assembly of the Commonwealth of 
Kentucky enacted HB No. 66 (HB 66), which addressed the deficiencies of 
the bonding program. This bill had an emergency clause (section 14) and 
therefore became effective upon signature of the Governor on March 22, 
2013. On July 5, 2013, Kentucky submitted HB 66 and emergency and 
permanent regulations to OSMRE for approval.
    Kentucky Revised Statutes (KRS), sections were submitted to OSMRE 
for approval in December 2013, along with final permanent regulations. 
We are including a summary of the KRS sections along with the 
corresponding HB sections even though the revised statutes were 
submitted with the third submission. This is being done since the HB 
and statutes are interrelated. The following summarizes the HB, revised 
statutes, and emergency and permanent regulations:
    1. Legislative Action and Revised Statutes--House Bill 66 (Second 
Submission) and Kentucky Revised Statutes (Third Submission): On March 
11, 2013, HB 66 was enacted and on March 22, 2013, it was signed by the 
Governor. The major changes involved repealing KRS sections 350.700 
through 350.755 (which applied to the voluntary bond pool fund and 
commission) and adding new sections 350.500 through 350.521. The 
following sections of the bill are noted along with the corresponding 
KRS sections, where available.
     HB 66 Section 1--KRS 350.500. Definitions for KRS 350.500 
to 350.521: This is a new section that provides the HB 66 definitions 
of actuarial soundness, date of the establishment of the new fund KRGF, 
Reclamation Guaranty Fund Commission (RGFC), and voluntary bond pool 
fund.
     HB 66 Section 2--KRS 350.503. Kentucky reclamation 
guaranty fund: This is a new section that establishes the KRGF, which 
is assigned to the cabinet. The KRGF is an interest-bearing reclamation 
account, requiring mandatory participation and designed to cover the 
excess costs of reclamation for coal mining sites when the permit-
specific performance (penal) bond is inadequate. This does not apply to 
permits forfeited prior to January 1, 2014, except for obligations that 
may arise from the forfeiture of bond prior to that date secured by the 
voluntary bond pool. Funds are also used to compensate the cabinet for 
costs incurred for administering the fund, procuring audits and 
actuarial studies, and operating and necessary legal expenses of the 
RGFC. The fund cannot be used for the long-term treatment of 
substandard water discharges or to repair subsidence damage. In 
addition, the fund is exempt from the requirements applicable to 
insurers.
     HB 66 Section 3--KRS 350.506. Reclamation Guaranty Fund 
Commission--Membership--Bylaws--Meetings--Conflicts of Interest--
Applicability of Executive Branch Code of Ethics: This is a new section 
that creates the RGFC that is attached to the cabinet. This section 
provides the make-up of the RGFC membership; the terms and conditions 
of membership appointments and the establishment of bylaws, official 
domicile, meeting frequency, member stipend; and attendance 
requirements. Further, it addresses limits on direct or indirect 
financial interest of the members, membership immunity from civil or 
criminal proceedings, and ethics terms.
     HB 66 Section 4--KRS 350.509. Duties of commission: This 
is a new section and it outlines the responsibilities of the RGFC that 
include reviewing, recommending, and promulgating regulations necessary 
to: Monitor and maintain the fund; establish a structure for processing 
claims and making payments; establish the mechanisms for the review of 
the viability of the fund; set a schedule for penalties for late 
payment or failure to pay fees and assessments; review and assign 
classification of mine types for fee assessments; establish a structure 
for the payment of fees and assessments; authorizing expenditures from 
the fund; notifying the permittees of suspension/reinstatement of fees, 
annually report the status of the KRGF, and take action against 
permittees to recover funds if necessary.
     HB 66 Section 5--KRS 350.512. Office of the Reclamation 
Guaranty Fund--Duties of executive director: This is a new section and 
establishes an Office of the Reclamation Guaranty Fund (ORGF) and 
appoints an executive director to manage its affairs and provides for 
the responsibilities of the executive director.
     HB 66 Section 6--KRS 350.515. Mandatory participation in 
fund--Initial capitalization--One-time assessments--Full-cost bond in 
lieu of participation: This is a new section and mandates that all 
surface coal mining permittees be participants in the fund, unless the 
permittee elects to provide full-cost bond. Member entities are given 
the option to either provide full-cost bond based on a reclamation cost 
estimate that reflects potential reclamation costs to the cabinet or 
participate in the fund, which includes assessment of fees noted in 
350.518 below.
    In addition, this section also provides for the initial 
capitalization of the KRGF fund that consists of: (1) Transfer of the 
assets and liabilities of the voluntary bond pool fund; (2) a one-time 
start-up assessment for all current permittees as of July 1, 2013 in 
the amount of $1,500; and (3) a one-time $10 per active permitted acre 
assessment. Entities entering the fund after July 1, 2013 shall pay a 
one-time assessment of $10,000 to the fund. No individual permit shall 
be issued until the one-time assessments are paid. Members of the 
former voluntary bond pool are exempt from the one-time start-up 
assessment and active permitted acre assessment. If an applicant opts 
out and elects to provide a full-cost bond, the applicant shall not be 
subject to these assessments.
     HB 66 Section 7--KRS 350.518. Permittee to submit permit-
specific bond under KRS 350.060(11)--Tonnage fees--Assignment of mine 
type classification--Inclusion of future permits of existing 
classification--Inclusion of future permits of existing voluntary bond 
pool fund members--Permit-specific penal bond--

[[Page 15956]]

Administrative regulations--Suspension of permit for arrearage in 
fees--Distribution of penalties collected under KRS 350.990(1)--Rights 
and remedies: This is a new section that provides that:

--Permit-specific bond: Each member permittee (those that did not elect 
to opt-out of the fund) shall also submit a permit-specific bond.
--Tonnage fees: In addition to the bond, each permittee shall pay a fee 
for each ton of coal mined and sold by surface and underground coal 
mining operations from each permit area. In addition, the RFGC may 
request and review documents and reports provided by the Kentucky 
Department of Natural Resources (DNR) and OSMRE to verify production 
records.
--Assignment of mine type classification: The fee assessment is based 
on the type of permit classification.
--Inclusion of existing VBP members: This section also provides that 
permits that were subject to the voluntary bond pool: (1) Are excluded 
from the one-time start-up assessment/fee; (2) are subject to the new 
tonnage fees, instead of the tonnage fees which had been previously 
established (prior to July 1, 2013); and (3) will continue to receive 
subsidization of the reclamation bonding authorized under these new 
statutes and new permanent regulations.

    The KRGF will continue to provide coverage for the existing bonds 
previously issued for them by the voluntary bond pool. It also provides 
the criteria that members of the voluntary bond pool as of July 1, 2013 
must meet in order to be included in the Fund. This section also 
specifies a maximum increase for which the total amount of bonds issued 
to any one member of the voluntary bond pool will apply.

--Permanent Regulations: Administrative regulations will be promulgated 
by the RGFC to address the reporting and payment of fees (see 
administrative regulations promulgated).
--Suspension of permit for arrearage in fees: This section also 
provides that the cabinet shall suspend a permit if the permittee is in 
arrearage in the payment of any fees assessed to the permit. Once the 
arrearage has been paid in full, the permit suspension may be lifted. 
The suspension may be appealed pursuant to the hearing provisions of 
KRS 350.0301, Petition challenging determination of cabinet, Conduct of 
hearings, etc.
--Distribution of Penalties: This section also provides the manner in 
which penalties collected shall be deposited and applied.
--Rights and Remedies: Any person who considers him or herself to be 
aggrieved by any determination made by the commission shall have all of 
the rights and remedies provided in section 350.0301 pertaining to 
petitions challenging determinations of the cabinet.
--Other Provisions and Responsibilities: This section also provides the 
terms and conditions for which an annual fee based on acreage shall 
apply for non-production permits (i.e., coal preparation and processing 
operations, loading activities, coal haulage and access roads). It also 
provides the terms and conditions for which a fee may apply for any 
expired permits or other permits not subject to the fees mentioned 
above.
    In addition, if an entity was not a participant in the Fund as of 
March 22, 2013, a permit may be considered for inclusion in the fund if 
the entity and entity's owners can meet eligibility standards 
established in permanent regulations promulgated by the RGFC. Any 
permits accepted into the fund shall require payment of a permit-
specific performance bond based on acreage and shall pay the 
actuarially determined tonnage rates prescribed. The RGFC shall make 
changes to the rates in an amount sufficient to maintain actuarial 
soundness of the fund in accordance with the annual actuarial study.
     HB 66 Section 8--KRS 350.521. Forfeiture of bonds for 
permits covered by fund--Use of additional moneys when bond 
insufficient to cover estimated reclamation cost: This is a new section 
that provides that bond for permits covered by the fund forfeited after 
January 1, 2014 shall be placed in the fund. It also provides that in 
the event that a forfeited bond is insufficient to reclaim the permit 
to the requirements, any outstanding permit-specific performance bond 
for reclamation on the forfeited permit shall be used first before any 
additional monies necessary to reclaim the permit area are withdrawn 
from the KRGF. It also provides the manner in which the request from 
the cabinet and transfer shall occur. The commission, its members, and 
employees shall not be named a party to any forfeiture action.
     HB 66 Section 9--KRS 12:020, Enumeration of departments, 
program cabinets, and administrative bodies: This section is amended to 
add the ORGF, DNR to the list of departments, program cabinets and 
their departments, and the respective major bodies.
     HB 66 Section 10--KRS 350.595. Application for inclusion 
under Abandoned Mine Land Enhancement Program--Coverage under Kentucky 
reclamation guaranty fund: This section is amended to provide that an 
applicant who desires to remine property shall send the application for 
the use of bond pool funds (for qualified AML enhancement projects) to 
the RGFC instead of the Bond Pool Commission. It also adds appropriate 
references or deletes references related to the Bond Pool.
     HB 66 Section 11--KRS 350.990. Penalties: This section is 
amended to reflect that all sums recovered, except those moneys 
collected in excess of $800,000 in any fiscal year be deposited 50% in 
the reclamation guaranty fund (rather than the bond pool fund). It 
removes the $16 million base amount below which the former bond pool 
fund could not be allowed to sink.
     HB 66 Section 12--KRS 350.700 to 350.755: The following 
sections are repealed due to the abolishment of the voluntary bond 
pool:

--350.700. Bond pool fund established;
--350.705. Bond Pool Commission;
--350.710. Powers of the Commission;
--350.720. Bond Pool (Criteria compliance records);
--350.725. Membership fee--tonnage fee;
--350.730. Tonnage fee suspension or reinstatement;
--350.735. Permit-specific penal bond;
--350.740. Permit issuance;
--350.745. Payments from fund for reclamation;
--350.750. Revocation of membership in bond pool; and
--350.755. Grounds for refusal of permit.

    We note that it is our understanding that HB 66 was intended to 
also repeal 350.715, Pool administrator, and is consistent with the 
removal of all other sections involving the voluntary bond pool 
references. However, this section remains in effect and cannot be 
removed until the repeal is submitted for approval.
     HB 66 Section 13--(no corresponding KRS section since a 
revised statute is not necessary): This section provides that the 
assets and liabilities of the voluntary bond pool be immediately 
transferred to the KRGF. Any records, files and documents associated 
with the activities of the voluntary bond pool shall also be 
transferred. The affairs of the voluntary bond pool shall be wound up, 
and the cabinet shall have disposition over

[[Page 15957]]

placement or transfer of any personnel of the voluntary bond pool. No 
existing contract shall be impaired.
     HB 66 Section 14--(no corresponding KRS section since a 
revised statute is not necessary): This section provides for the 
immediate implementation of the provisions of the bill.

2. Kentucky Administrative Regulations

     Emergency Kentucky Administrative Regulations (Second 
Submission): Following passage of HB 66, Kentucky developed emergency 
and permanent administrative regulations to remove requirements that 
were no longer applicable as part of Kentucky's bonding program and to 
prevent overlapping requirements for the former members of the 
voluntary bond pool. Both the emergency and permanent regulations were 
submitted to the Legislative Research Commission on July 3, 2013. These 
permanent regulations were approved by the Secretary, Energy and 
Environment Cabinet, on November 7, 2013. On that same date, the 
emergency regulations expired. Therefore, we will not be rendering a 
decision on the emergency regulation in this, or any future, 
rulemaking. Instead, we will issue a decision only on the permanent 
regulations.

--405 KAR 10:001E, Definitions: This is an emergency regulation that is 
necessary to immediately implement amendments to match other emergency 
regulations filed simultaneously. This section is identical to the 
permanent regulation (405 KAR 10:001), which is described below.
--405 KAR 10.070E, Kentucky Reclamation Guaranty Fund: This is an 
emergency regulation that is necessary to immediately implement the 
provisions of HB 66 related to the establishment of the KRGF and the 
RGFC. The emergency regulation will be replaced by a permanent 
regulation at 10:070, which is not identical to this emergency 
regulation. The difference is that the emergency regulation includes 
provisions for the initial capitalization of the KRGF (one time 
assessments) and the terms and conditions in which these assessments 
are paid. It also provides the terms in which former voluntary bond 
pool members report coal mined and sold until and after January 1, 
2014. These two provisions are not included in the permanent regulation 
(405 KAR 10:070) described below.
--405 KAR 10:080E: Full-cost bonding: This is an emergency regulation 
that is necessary to immediately implement the provisions of HB 66 
allowing permittees to not participate in the KRGF and provide full-
cost reclamation bonds for coal mine surface disturbances. This 
emergency regulation will be replaced by a permanent regulation at 
10:080, which is not identical to this emergency regulation. The 
difference is that this emergency regulation includes provisions 
pertaining to members with permits issued prior to July 1, 2013. It 
provides the terms and conditions in which the permittee shall make 
such election. This provision is not included in the permanent 
regulation (405 KAR 10:080) described below.
--405 KAR 10:090E, Production Fees: This is an emergency regulation 
that is necessary to immediately set the amount of the tonnage fees 
required by section 7(2)(a) and (b) of HB 66. The emergency regulation 
will be replaced by a permanent regulation, which is identical to this 
emergency regulation.
--405 KAR 10:201E, Repeal of 405 KAR 10:200: This is an emergency 
regulation that repeals Chapter 405 KAR 10:200, Kentucky Bond Pool, 
from Kentucky's administrative regulations: This emergency 
administrative regulation is necessary to remove requirements that are 
no longer applicable as part of Kentucky's bonding program and prevent 
overlapping requirements for those former members. The emergency 
administrative regulation will not be replaced by a permanent 
regulation.

    3. Permanent (Ordinary) Kentucky Administrative Regulations (Second 
and Third Submissions): In addition to the emergency regulations, 
Kentucky also submitted proposed corresponding administrative 
regulations that revise its bonding administrative regulations in its 
approved permanent regulatory program. Except as mentioned above, these 
permanent regulations are, for the most part, identical to the 
emergency regulations submitted. These permanent regulations were 
signed by the Secretary, Energy and Environment Cabinet on July 7, 2013 
and were submitted as final to OSMRE in the second submission, with the 
exception of 405 KAR 8:010, which was submitted with the third 
submission.
     405 KAR 10:001. Definitions for 405 KAR Chapter 10: This 
regulation is amended to add the definition of the following terms: 
Acquisition; active acre; actuarial soundness; dormancy fee; coal mined 
and sold; final disposition; full-cost bonding; Kentucky Reclamation 
Guaranty Fund; Office of the Reclamation Guaranty Fund; opt-out; 
member, non-production fee; and acquisition as it relates to criteria 
for identifying land historically used for cropland. The definitions of 
bond pool, bond pool administrator, and bond pool commission have been 
deleted. Bond pool and bond pool administrator have been replaced with 
and definitions of KRGF and the ORGF.
     405 KAR 10:015. General bonding provisions: This 
regulation is amended to add bonds from the KRGF to the list of types 
of performance bonds approved by the cabinet and also details how bonds 
on future permits subsidized by the KRGF for former VBP members will be 
released. It also includes the option of providing full-cost bonds to 
the section on determination of bond amount. The amendment is necessary 
to clarify that the regulated entity should provide the calculation for 
the cabinet's cost of reclamation in the event a full-cost option is 
chosen.
     405 KAR 10:070. Kentucky reclamation guaranty fund: This 
is a new regulation and provides information related to the operation 
and sources of revenue for the KRGF, classification of permits, 
reporting and payment of fees, and penalties. Permittees will be 
mandatory participants in the KRGF unless they chose to opt-out. These 
regulations require that permittees comply with reporting requirements, 
maintain production records, provide initial assessments, pay fees, 
comply with penalty provisions, and complete and submit required forms.
     405 KAR 10:080. Full-cost bonding: This is a new 
regulation and provides that members have the option to provide full-
cost bonds in lieu of maintaining membership in the KRGF (opt out) and 
the manner in which a permittee shall make such declaration. For full-
cost bond elections it also provides for the calculation of bonding 
estimates and forms required to submit such estimates, the requirement 
for a registered professional engineer to certify estimates, and the 
requirement to submit a bond once the Department has accepted the 
reclamation estimate. A member with permits issued prior to July 1, 
2013 that has made the decision to opt-out is required to post full-
cost reclamation bonds with the Department before April 30, 2014 on all 
permits held by the member.
     405 KAR 10:090. Production Fees: This is a new regulation 
and provides information on production fees, the amount of the fees, 
and the schedule that payments are to be remitted.

[[Page 15958]]

     405 KAR 8:010. General provisions for permits: This 
regulation has been amended to provide that permittees shall submit a 
minor revision application for the purpose of providing a full-cost 
reclamation bonding estimate to the cabinet. This was done to provide 
the Division of Mine Permits 30 working days after the notice of 
administrative completeness to review full-cost bonding revisions. The 
original provisions allowed for 15 working days.
    The full text of the program amendment is available for you to read 
at the locations listed above under ADDRESSES or at 
www.regulations.gov.

III. Public Comment Procedures

    Under the provisions of 30 CFR 732.17(h), we are seeking your 
comments on whether the amendment satisfies the applicable program 
approval criteria of 30 CFR 732.15. If we approve the amendment, it 
will become part of the State program. As mentioned earlier, if you 
submitted comments on the first submission during the public comment 
period (79 FR 11796) you do not need to resubmit them, we will be 
considering these comments in our analysis of the total submission.

Electric or Written Comments

    If you submit written or electronic comments on the proposed rule 
during the 30-day comment period, they should be specific, confined to 
issues pertinent to the proposed regulations, and explain the reason 
for any recommended change(s). We appreciate any and all comments, but 
those most useful and likely to influence decisions on the final 
regulations will be those that either involve personal experience or 
include citations to and analyses of SMCRA, its legislative history, 
its implementing regulations, case law, other pertinent State or 
Federal laws or regulations, technical literature, or other relevant 
publications.
    We cannot ensure that comments received after the close of the 
comment period (see DATES) or sent to an address other than those 
listed (see ADDRESSES) will be included in the docket for this 
rulemaking and considered.

Public Availability of Comments

    Before including your address, phone number, email address, or 
other personal identifying information in your comment, you should be 
aware that your entire comment including your personal identifying 
information, may be made publicly available at any time. While you can 
ask us in your comment to withhold your personal identifying 
information from public review, we cannot guarantee that we will be 
able to do so.

Public Hearing

    If you wish to speak at a public hearing, contact the person listed 
under FOR FURTHER INFORMATION CONTACT by 4:00 p.m., EST), on April 10, 
2015. If you are disabled and need reasonable accommodation to attend a 
public hearing, contact the person listed under FOR FURTHER INFORMATION 
CONTACT. We will arrange the location and time of the hearing with 
those persons requesting the hearing. If no one requests an opportunity 
to speak, we will not hold a hearing.
    To assist the transcriber and ensure an accurate record, we 
request, if possible, that each person who speaks at the public hearing 
provide us with a written copy of his or her comments. The public 
hearing will continue on the specified date until everyone scheduled to 
speak has been given an opportunity to be heard. If you are in the 
audience and have not been scheduled to speak and wish to do so, you 
will be allowed to speak after those who have been scheduled. We will 
end the hearing after everyone scheduled to speak and others present in 
the audience who wish to speak, have been heard.

Public Meeting

    If there is only limited interest in having an opportunity to 
speak, we may hold a public meeting rather than a public hearing. If 
you wish to meet with us to discuss the amendment, please request a 
meeting by contacting the person listed under FOR FURTHER INFORMATION 
CONTACT. All such meetings are open to the public and, if possible, we 
will post notices of meetings at the locations listed under ADDRESSES. 
We will make a written summary of each meeting a part of the 
administrative record.

IV. Procedural Determinations

Executive Order 12866--Regulatory Planning and Review

    This rule is exempt from review by the Office of Management and 
Budget (OMB) under Executive Order 12866.

Other Laws and Executive Orders Affecting Rulemaking

    When a State submits a program amendment to OSMRE for review, our 
regulations at 30 CFR 732.17(h) require us to publish a notice in the 
Federal Register indicating receipt of the proposed amendment, its text 
or a summary of its terms, and an opportunity for public comment. We 
conclude our review of the proposed amendment after the close of the 
public comment period and determine whether the amendment should be 
approved, approved in part, or not approved. At that time, we will also 
make the determinations and certifications required by the various laws 
and executive orders governing the rulemaking process and include them 
in the final rule.

List of Subjects in 30 CFR Part 917

    Intergovernmental relations, Surface mining, Underground mining.

    Dated: December 29, 2014.
David G. Hartos,
Deputy Regional Director, Appalachian Region.
[FR Doc. 2015-06962 Filed 3-25-15; 8:45 am]
 BILLING CODE 4310-05-P
Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Proposed Rules 15953

third party, or open source media and your inspection, the comment period Resources, 2 Hudson Hollow, Frankfort,
it may be impossible to ensure the during which you may submit written Kentucky 40601. Telephone: (502) 564–
accuracy, relevance, timeliness, and comments on the amendment, and the 6940. Email: Steve.Hohmann@ky.gov.
completeness of potential impeachment procedures that we will follow for the FOR FURTHER INFORMATION CONTACT: Mr.
information maintained prior to and public hearing, if one is requested. Robert Evans, Office of Surface Mining
during the process of being verified. DATES: We will accept written Reclamation and Enforcement,
(9) From subsection (e)(8) of the comments on the proposed rules until Telephone: (859) 260–3900. Email:
Privacy Act because the nature of the 4:00 p.m., Eastern Standard Time (EST) bevans@osmre.gov.
Giglio discovery process renders notice April 27, 2015. If requested, we will SUPPLEMENTARY INFORMATION:
of compliance with the compulsory hold a public hearing on April 20, 2015.
discovery process impractical. I. Background on the Kentucky Program
We will accept requests to speak until II. Description of the Proposed Amendment
(10) From subsections (f) and (g) of 4:00 p.m., EST on April 10, 2015. III. Public Comment Procedures
the Privacy Act because these ADDRESSES: You may submit comments, IV. Procedural Determinations
subsections are inapplicable to the identified by SATS No. KY–256–FOR
extent that the system is exempt from and OSM Docket No. OSM–2012–0004, I. Background on the Kentucky
other specific subsections of the Privacy by any of the following methods: Program
Act. • Federal eRulemaking Portal: Section 503(a) of the Act permits a
Dated: March 4, 2015. www.regulations.gov. The proposed rule State to assume primacy for the
Erika Brown Lee, has been assigned Docket ID: OSM– regulation of surface coal mining and
Chief Privacy and Civil Liberties Officer, 2012–0014. Please follow the online reclamation operations on non-Federal
United States Department of Justice. instructions for submitting comments. and non-Indian lands within its borders
[FR Doc. 2015–06938 Filed 3–25–15; 8:45 am] • Email: Mr. Robert Evans, by demonstrating that its program
BILLING CODE 4410–FB–P
bevans@osmre.gov. includes, among other things, ‘‘* * *
• Fax: (859) 260–8410. State law which provides for the
• Mail/Hand Delivery: Mr. Robert regulation of surface coal mining and
Evans, Field Office Director, Lexington reclamation operations in accordance
DEPARTMENT OF THE INTERIOR Field Office, Office of Surface Mining with the requirements of this Act * * *;
Office of Surface Mining Reclamation Reclamation and Enforcement, 2675 and rules and regulations consistent
and Enforcement Regency Road, Lexington, Kentucky with regulations issued by the Secretary
40503. Please include the rule pursuant to this Act.’’ See 30 U.S.C.
30 CFR Part 917 identifiers (SATS No. KY–256–FOR and 1253(a)(1) and (7). On the basis of these
Docket ID OSM–2012–0014) with your criteria, the Secretary of the Interior
[SATS No. KY–256–FOR; Docket ID: OSM– comments. conditionally approved the Kentucky
2012–0014; S1D1SSS08011000SX066A0006 Instructions: All submissions received program on May 18, 1982. You can find
7F154S180110; S2D2SSS08011000SX066 must include the agency name and
A00033F15XS501520] background information on the
docket number for this rulemaking. For Kentucky program, including the
Kentucky Regulatory Program detailed instructions on submitting Secretary’s findings, the disposition of
comments and additional information comments, and conditions of approval,
AGENCY: Office of Surface Mining on the rulemaking process, see the in the May 18, 1982, Federal Register
Reclamation and Enforcement, Interior. ‘‘Public Comment Procedures’’ heading (47 FR 21434). You can also find later
ACTION: Proposed rule; reopening of the of the SUPPLEMENTARY INFORMATION actions concerning the Kentucky
public comment period and opportunity section of this document. program and program amendments at 30
for public hearing. Docket: For access to the docket to CFR 917.11–917.17.
review copies of the Kentucky program,
SUMMARY: We, the Office of Surface this amendment, a listing of any II. Description of the Proposed
Mining Reclamation and Enforcement scheduled public hearings, and all Amendment
(OSMRE), are reopening the public written comments received in response Kentucky submitted information on
comment period on the proposed to this document, you must go to the three occasions in response to a Notice
amendment to the Kentucky regulatory address listed below during normal under 30 CFR part 733 that we sent to
program (the Kentucky program) under business hours, Monday through Friday, Kentucky on May 1, 2012 (Docket ID
the Surface Mining Control and excluding holidays. You may receive OSM–2012–0014) regarding deficiencies
Reclamation Act of 1977 (SMCRA or the one free copy of the amendment by in its bonding program. These
Act) that was originally published on contacting the person listed under FOR submissions are intended to address the
February 20, 2013. The public comment FURTHER INFORMATION CONTACT or the noted deficiencies and were submitted
period and opportunity for public full text of the program amendment is as follows: September 28, 2012
hearing is being reopened to incorporate available for you to read at (emergency and permanent
subsequent information (emergency www.regulations.gov. Mr. Robert Evans, administrative regulations), July 5, 2013
regulations, permanent regulations, Field Office Director, Lexington Field (House Bill (HB) 66 and emergency and
legislation, and revised statutes) that we Office, Office of Surface Mining permanent regulations), and December
received from Kentucky to address a Reclamation and Enforcement, 2675 3, 2013 (revised statutes and permanent
mstockstill on DSK4VPTVN1PROD with PROPOSALS

deficiency in the Kentucky program Regency Road, Lexington, Kentucky regulations). Below is a summary of
regarding reclamation bonds and to 40503. Telephone: (859) 260–3900. those submissions.
revise its program to be administered in Email: bevans@osmre.gov. A. Kentucky Response (First
a manner consistent with SMCRA and In addition, you may review a copy of Submission, September 28, 2012): We
the Federal regulations. the amendment during regular business announced receipt of the submission on
This document gives the times and hours at the following location: Mr. September 28, 2012, (first amendment
locations that this proposed amendment Steve Hohmann, Commissioner, request) in the February 20, 2013
to the Kentucky program is available for Kentucky Department for Natural Federal Register (78 FR 11796). We are

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summarizing the content of that • 405 KAR 10:015E: This is an thereof for an embankment
submission again. Our intent is to issue emergency regulation and it sediment control pond. Each pond
one decision pertaining to both that immediately implements certain must be measured separately if the
submission and the two additional provisions of Kentucky’s plan to address pond is located off-bench
submissions announced in this Notice. the bonding deficiencies. This downstream of the proposed mining
The first amendment submission emergency regulation is identical to the or storage area. The cabinet also
included program changes intended to permanent (ordinary) regulations at 405 may apply this rate to partial
take immediate action involving the KAR 10:015 noted below. embankment structures as deemed
financial inadequacies of the bond necessary;
2. Permanent (Ordinary) Kentucky
program. These program changes are
Administrative Regulations • $3,500 per acre and each fraction
identified as either emergency Kentucky thereof for coal preparation plants.
Administrative Regulations (KARs) or • 405 KAR 10:015, General bonding In addition, the bond amount must
corresponding permanent (ordinary) provisions: This is a new regulation that include the costs associated with
KARs. Both the emergency and combines two repealed sections (405 demolition and disposal of
permanent regulations were signed by KAR 10:010 and 10:020 mentioned concrete, masonry, steel, timber,
the Secretary, Energy and Environment above) and incorporates parts of 405 and other materials associated with
Cabinet on May 4, 2012 and submitted KAR 10:030 (addressed below). It surface coal mining and
to the Kentucky Legislative Research consolidates into one regulation all reclamation operations;
Commission (LRC) on that date. current existing bonding criteria, types • $2,000 per acre and each fraction
Kentucky recognizes emergency of bonds, bonding methods, terms and thereof for operations on previously
regulations as being valid for 180 days conditions of bonds, and new mined areas;
unless permanent regulations are calculation protocols. It also contains a • $3,500 per acre and each fraction
approved and replace the emergency protocol for bond calculation for thereof for all areas not otherwise
regulations. demolition and disposal costs for addressed; and
Since Kentucky permanent materials used in mining operations at • For permits with substandard
regulations were approved on preparation plants. In addition, it drainage that require long-term
September 6, 2012, the emergency provides for the calculation of costs treatment, the cabinet must
regulations expired and we will not be associated with mine sites that have calculate and the permittee must
rendering a decision on the emergency been identified as producers of post an additional bond amount
regulations in this, or any future, substandard effluent discharges
based on the annual treatment cost
rulemaking. Instead, we will issue a requiring long term treatment. The
provided by the permittee,
decision only on the permanent following significant program changes
multiplied by 20 years. In lieu of
regulations. We are including only a are included within this regulation:
posting this additional bond
brief summary of the emergency —Section 6, Determination of Bond amount, the permittee may submit
administrative regulations, along with a Amounts: This section allows the a satisfactory reclamation and
more detailed description in the cabinet to use the reclamation costs remediation plan for the areas
corresponding permanent submitted in the permit application to producing the substandard
administrative regulations. Significant establish the bond amount required, if drainage.
program changes that have been those costs are higher than the —Section 11, Supplemental Assurance:
submitted for approval are highlighted reclamation costs calculated by the This section now includes the
below. Minor changes such as cabinet. It also requires the cabinet to supplemental assurance requirements
typographical corrections, cross- review bond amounts established in previously located at 405 KAR 16:020
reference changes, and paragraph the regulations at a minimum of every
renumbering are not mentioned. (see summary of 16:020 below) and
two years to determine if those increases the supplemental assurance
1. Emergency Kentucky Administrative amounts are adequate after amount from $50,000 to $150,000.
Regulations consideration of the impacts of
inflation and increases in reclamation • 405 KAR 10:030. General
• 405 KAR 10:011E: This is an costs. requirements for liability insurance:
emergency regulation (as noted by an E —Section 7, Minimum Bond Amount: This regulation has been amended. Prior
following the section number) and is an This section increases minimum bond to this revision the regulation included
emergency repealer that removes the amounts to $75,000 for the entire general requirements for the types,
following two administrative surface area under one permit, terms, and conditions of performance
regulations from Chapter 10 of Title 405: $75,000 per increment for bonds and liability insurance. In this
Chapter 405 KAR 10:010, General incrementally bonded permits, revision, all references to performance
Requirements for Performance Bond and $50,000 for a permit or increment bonds have been removed from sections
Liability Insurance, and 405 KAR operating on previously mined areas, 1 through 3 and now only requirements
10:020, Amount and Duration of and $10,000 for underground mines for liability insurance are included
Performance Bond. With the exception that have only underground (former sections 4 and 5 have been
of 405 KAR 10:010, sections 4 and 5, the operations (i.e., no surface facilities). renumbered as sections 2 and 3).
contents of the repealed sections are —Section 8, Bonding Rate of Additional Requirements for performance bonds
being relocated into a new have been moved to 405 KAR 10:015 as
mstockstill on DSK4VPTVN1PROD with PROPOSALS

Areas: This section establishes new,
administrative regulation which will increased bond amounts as follows: noted above. Also, two forms are
contain all information on bonding • $2,500 per acre and each fraction specified as requirements related to
surface mine disturbances (See 405 KAR thereof for coal haul roads, other liability insurance coverage: Certificate
10:015 addressed below). Section 4, mine access roads, and mine of Liability Insurance, and Notice of
Requirement to File a Certificate of management areas; Cancellation, Nonrenewal or Change of
Liability, and Section 5, Incorporation • $7,500 per acre and each fraction Liability Insurance.
By Reference, are being relocated to 405 thereof for refuse disposal areas; • 405 KAR 16:020. Contemporaneous
KAR 10:030, which is addressed below. • $10,000 per acre and each fraction reclamation: This regulation has been

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amended. A new section is included March 22, 2013, it was signed by the establish a structure for processing
(Section 1, Definitions) and it defines Governor. The major changes involved claims and making payments; establish
the term ‘‘completed reclamation.’’ repealing KRS sections 350.700 through the mechanisms for the review of the
Subsequently, other sections have been 350.755 (which applied to the voluntary viability of the fund; set a schedule for
renumbered. Other changes include bond pool fund and commission) and penalties for late payment or failure to
adding references to the new section, adding new sections 350.500 through pay fees and assessments; review and
405 KAR 10:015, and removing the 350.521. The following sections of the assign classification of mine types for
section involving Supplemental bill are noted along with the fee assessments; establish a structure for
Assurance. Regulatory information corresponding KRS sections, where the payment of fees and assessments;
regarding supplemental assurance has available. authorizing expenditures from the fund;
been relocated to 405 KAR 10:015, • HB 66 Section 1—KRS 350.500. notifying the permittees of suspension/
noted above. Definitions for KRS 350.500 to 350.521: reinstatement of fees, annually report
We are not seeking comments on the This is a new section that provides the the status of the KRGF, and take action
emergency regulations at 10:011E and HB 66 definitions of actuarial against permittees to recover funds if
10:015E as they have been replaced by soundness, date of the establishment of necessary.
10:015. If you submitted comments on the new fund KRGF, Reclamation • HB 66 Section 5—KRS 350.512.
the emergency and permanent Guaranty Fund Commission (RGFC), Office of the Reclamation Guaranty
regulations noted above during the and voluntary bond pool fund. Fund—Duties of executive director: This
public comment period when we • HB 66 Section 2—KRS 350.503. is a new section and establishes an
published the first submission (79 FR Kentucky reclamation guaranty fund: Office of the Reclamation Guaranty
11796) you do not need to resubmit This is a new section that establishes Fund (ORGF) and appoints an executive
them, we will be considering these the KRGF, which is assigned to the director to manage its affairs and
comments in our analysis of the total cabinet. The KRGF is an interest-bearing provides for the responsibilities of the
submission. reclamation account, requiring executive director.
B. Kentucky Response: (Second mandatory participation and designed • HB 66 Section 6—KRS 350.515.
Submission, July 5, 2013, and Third to cover the excess costs of reclamation Mandatory participation in fund—
Submission, December 3, 2013): The for coal mining sites when the permit- Initial capitalization—One-time
first submission primarily addresses specific performance (penal) bond is assessments—Full-cost bond in lieu of
general bonding provisions (bonding inadequate. This does not apply to participation: This is a new section and
criteria, types of bonds, bonding permits forfeited prior to January 1, mandates that all surface coal mining
methods, terms and conditions of 2014, except for obligations that may permittees be participants in the fund,
bonds, and new calculation protocols). arise from the forfeiture of bond prior to unless the permittee elects to provide
The second and third submissions that date secured by the voluntary bond full-cost bond. Member entities are
address the source of revenue used to pool. Funds are also used to compensate given the option to either provide full-
supplement permit-specific bonds, the the cabinet for costs incurred for cost bond based on a reclamation cost
Kentucky Reclamation Guaranty Fund administering the fund, procuring estimate that reflects potential
(KRGF), the responsible entities for audits and actuarial studies, and reclamation costs to the cabinet or
managing the fund, and other bond pool operating and necessary legal expenses participate in the fund, which includes
related provisions. of the RGFC. The fund cannot be used assessment of fees noted in 350.518
On March 11, 2013, the General for the long-term treatment of below.
Assembly of the Commonwealth of substandard water discharges or to In addition, this section also provides
Kentucky enacted HB No. 66 (HB 66), repair subsidence damage. In addition, for the initial capitalization of the KRGF
which addressed the deficiencies of the the fund is exempt from the fund that consists of: (1) Transfer of the
bonding program. This bill had an requirements applicable to insurers. assets and liabilities of the voluntary
emergency clause (section 14) and • HB 66 Section 3—KRS 350.506. bond pool fund; (2) a one-time start-up
therefore became effective upon Reclamation Guaranty Fund assessment for all current permittees as
signature of the Governor on March 22, Commission—Membership—Bylaws— of July 1, 2013 in the amount of $1,500;
2013. On July 5, 2013, Kentucky Meetings—Conflicts of Interest— and (3) a one-time $10 per active
submitted HB 66 and emergency and Applicability of Executive Branch Code permitted acre assessment. Entities
permanent regulations to OSMRE for of Ethics: This is a new section that entering the fund after July 1, 2013 shall
approval. creates the RGFC that is attached to the pay a one-time assessment of $10,000 to
Kentucky Revised Statutes (KRS), cabinet. This section provides the make- the fund. No individual permit shall be
sections were submitted to OSMRE for up of the RGFC membership; the terms issued until the one-time assessments
approval in December 2013, along with and conditions of membership are paid. Members of the former
final permanent regulations. We are appointments and the establishment of voluntary bond pool are exempt from
including a summary of the KRS bylaws, official domicile, meeting the one-time start-up assessment and
sections along with the corresponding frequency, member stipend; and active permitted acre assessment. If an
HB sections even though the revised attendance requirements. Further, it applicant opts out and elects to provide
statutes were submitted with the third addresses limits on direct or indirect a full-cost bond, the applicant shall not
submission. This is being done since the financial interest of the members, be subject to these assessments.
HB and statutes are interrelated. The membership immunity from civil or • HB 66 Section 7—KRS 350.518.
mstockstill on DSK4VPTVN1PROD with PROPOSALS

following summarizes the HB, revised criminal proceedings, and ethics terms. Permittee to submit permit-specific
statutes, and emergency and permanent • HB 66 Section 4—KRS 350.509. bond under KRS 350.060(11)—Tonnage
regulations: Duties of commission: This is a new fees—Assignment of mine type
1. Legislative Action and Revised section and it outlines the classification—Inclusion of future
Statutes—House Bill 66 (Second responsibilities of the RGFC that permits of existing classification—
Submission) and Kentucky Revised include reviewing, recommending, and Inclusion of future permits of existing
Statutes (Third Submission): On March promulgating regulations necessary to: voluntary bond pool fund members—
11, 2013, HB 66 was enacted and on Monitor and maintain the fund; Permit-specific penal bond—

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placement or transfer of any personnel implement the provisions of HB 66 Reclamation Guaranty Fund; Office of
of the voluntary bond pool. No existing allowing permittees to not participate the Reclamation Guaranty Fund; opt-
contract shall be impaired. in the KRGF and provide full-cost out; member, non-production fee; and
• HB 66 Section 14—(no reclamation bonds for coal mine acquisition as it relates to criteria for
corresponding KRS section since a surface disturbances. This emergency identifying land historically used for
revised statute is not necessary): This regulation will be replaced by a cropland. The definitions of bond pool,
section provides for the immediate permanent regulation at 10:080, bond pool administrator, and bond pool
implementation of the provisions of the which is not identical to this commission have been deleted. Bond
bill. emergency regulation. The difference pool and bond pool administrator have
2. Kentucky Administrative Regulations is that this emergency regulation been replaced with and definitions of
includes provisions pertaining to KRGF and the ORGF.
• Emergency Kentucky members with permits issued prior to • 405 KAR 10:015. General bonding
Administrative Regulations (Second July 1, 2013. It provides the terms and provisions: This regulation is amended
Submission): Following passage of HB conditions in which the permittee to add bonds from the KRGF to the list
66, Kentucky developed emergency and shall make such election. This of types of performance bonds approved
permanent administrative regulations to provision is not included in the by the cabinet and also details how
remove requirements that were no permanent regulation (405 KAR bonds on future permits subsidized by
longer applicable as part of Kentucky’s 10:080) described below. the KRGF for former VBP members will
bonding program and to prevent —405 KAR 10:090E, Production Fees: be released. It also includes the option
overlapping requirements for the former This is an emergency regulation that of providing full-cost bonds to the
members of the voluntary bond pool. is necessary to immediately set the section on determination of bond
Both the emergency and permanent amount of the tonnage fees required amount. The amendment is necessary to
regulations were submitted to the
by section 7(2)(a) and (b) of HB 66. clarify that the regulated entity should
Legislative Research Commission on
The emergency regulation will be provide the calculation for the cabinet’s
July 3, 2013. These permanent
replaced by a permanent regulation, cost of reclamation in the event a full-
regulations were approved by the
which is identical to this emergency cost option is chosen.
Secretary, Energy and Environment
Cabinet, on November 7, 2013. On that
regulation. • 405 KAR 10:070. Kentucky
—405 KAR 10:201E, Repeal of 405 KAR reclamation guaranty fund: This is a
same date, the emergency regulations
10:200: This is an emergency new regulation and provides
expired. Therefore, we will not be
regulation that repeals Chapter 405 information related to the operation and
rendering a decision on the emergency
KAR 10:200, Kentucky Bond Pool, sources of revenue for the KRGF,
regulation in this, or any future,
rulemaking. Instead, we will issue a from Kentucky’s administrative classification of permits, reporting and
decision only on the permanent regulations: This emergency payment of fees, and penalties.
regulations. administrative regulation is necessary Permittees will be mandatory
to remove requirements that are no participants in the KRGF unless they
—405 KAR 10:001E, Definitions: This is
longer applicable as part of chose to opt-out. These regulations
an emergency regulation that is
Kentucky’s bonding program and require that permittees comply with
necessary to immediately implement
prevent overlapping requirements for reporting requirements, maintain
amendments to match other
those former members. The production records, provide initial
emergency regulations filed
emergency administrative regulation assessments, pay fees, comply with
simultaneously. This section is
will not be replaced by a permanent penalty provisions, and complete and
identical to the permanent regulation
regulation. submit required forms.
(405 KAR 10:001), which is described
below. 3. Permanent (Ordinary) Kentucky • 405 KAR 10:080. Full-cost bonding:
—405 KAR 10.070E, Kentucky Administrative Regulations (Second and This is a new regulation and provides
Reclamation Guaranty Fund: This is Third Submissions): In addition to the that members have the option to provide
an emergency regulation that is emergency regulations, Kentucky also full-cost bonds in lieu of maintaining
necessary to immediately implement submitted proposed corresponding membership in the KRGF (opt out) and
the provisions of HB 66 related to the administrative regulations that revise its the manner in which a permittee shall
establishment of the KRGF and the bonding administrative regulations in make such declaration. For full-cost
RGFC. The emergency regulation will its approved permanent regulatory bond elections it also provides for the
be replaced by a permanent regulation program. Except as mentioned above, calculation of bonding estimates and
at 10:070, which is not identical to these permanent regulations are, for the forms required to submit such estimates,
this emergency regulation. The most part, identical to the emergency the requirement for a registered
difference is that the emergency regulations submitted. These permanent professional engineer to certify
regulation includes provisions for the regulations were signed by the estimates, and the requirement to
initial capitalization of the KRGF (one Secretary, Energy and Environment submit a bond once the Department has
time assessments) and the terms and Cabinet on July 7, 2013 and were accepted the reclamation estimate. A
conditions in which these submitted as final to OSMRE in the member with permits issued prior to
assessments are paid. It also provides second submission, with the exception July 1, 2013 that has made the decision
the terms in which former voluntary of 405 KAR 8:010, which was submitted to opt-out is required to post full-cost
mstockstill on DSK4VPTVN1PROD with PROPOSALS

bond pool members report coal mined with the third submission. reclamation bonds with the Department
and sold until and after January 1, • 405 KAR 10:001. Definitions for 405 before April 30, 2014 on all permits
2014. These two provisions are not KAR Chapter 10: This regulation is held by the member.
included in the permanent regulation amended to add the definition of the • 405 KAR 10:090. Production Fees:
(405 KAR 10:070) described below. following terms: Acquisition; active This is a new regulation and provides
—405 KAR 10:080E: Full-cost bonding: acre; actuarial soundness; dormancy fee; information on production fees, the
This is an emergency regulation that coal mined and sold; final disposition; amount of the fees, and the schedule
is necessary to immediately full-cost bonding; Kentucky that payments are to be remitted.

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Document Created: 2015-12-18 11:46:20
Document Modified: 2015-12-18 11:46:20
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Proposed rule; reopening of the public comment period and opportunity for public hearing.
Dates		We will accept written comments on the proposed rules until 4:00 p.m., Eastern Standard Time (EST) April 27, 2015. If requested, we will hold a public hearing on April 20, 2015. We will accept requests to speak until 4:00 p.m., EST on April 10, 2015.
Contact		Mr. Robert Evans, Office of Surface Mining Reclamation and Enforcement, Telephone: (859) 260-3900. Email: [email protected]
FR Citation		80 FR 15953
CFR Associated		Intergovernmental Relations; Surface Mining and Underground Mining
80 FR 15953 - Kentucky Regulatory Program

DEPARTMENT OF THE INTERIOROffice of Surface Mining Reclamation and Enforcement

Federal Register Volume 80, Issue 58 (March 26, 2015)

DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
