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West Virginia Regulatory Program

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Information about this document as published in the Federal Register.

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AGENCY:

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

ACTION:

Final rule; approval of amendment.

SUMMARY:

We are approving an amendment to the West Virginia regulatory program (the West Virginia program) under the Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act). West Virginia revised its Code of State Regulations (CSR) concerning surety bonds. The amendment is intended to provide the State with an alternative source of reliable financial information about the surety, and to allow sureties that are licensed and in good financial condition but are not currently listed with the U.S. Department of the Treasury as an acceptable surety of Federal bonds to provide surety bonds to the coal industry in West Virginia. The amendment was authorized by the West Virginia Secretary of State as an emergency rule under the State's Administrative Procedures Act.

DATES:

Effective Date: December 30, 2005.

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FOR FURTHER INFORMATION CONTACT:

Mr. Roger W. Calhoun, Director, Charleston Field Office, 1027 Virginia Street East, Charleston, West Virginia 25301. Telephone: (304) 347-7158, Internet address: chfo@osmre.gov.

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SUPPLEMENTARY INFORMATION:

I. Background on the West Virginia Program

II. Submission of the Amendment

III. OSM's Findings

IV. Summary and Disposition of Comments

V. OSM's Decision

VI. Procedural Determinations

I. Background on the West Virginia 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, “* * * a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of the Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to the 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 West Virginia program on January 21, 1981. You can find background information on the West Virginia program, including the Secretary's findings, the disposition of comments, and conditions of approval of the West Virginia program in the January 21, 1981, Federal Register (46 FR 5915). You can also find later actions concerning West Virginia's program and program amendments at 30 CFR 948.10, 948.12, 948.13, 948.15, and 948.16.

II. Submission of the Amendment

By letter dated October 17, 2005 (Administrative Record Number WV-1441), the West Virginia Department of Environmental Protection (WVDEP) submitted an amendment to its program under SMCRA (30 U.S.C. 1201 et seq.). The amendment consists of a proposed emergency rule revision to CSR 38-2-11.3.a.3 concerning surety bonds, a briefing document, an emergency rule justification, which includes an affidavit that was submitted in support of the emergency rule package, and a decision by the Secretary of State dated October 11, 2005, approving the emergency rule.

In its submittal of this amendment, the WVDEP stated that its current rule at CSR 38-2-11.3.a.3 requires that after July 1, 2001, a surety must be recognized by the Treasurer of the State as holding a certificate of authority from the United States Department of the Treasury as an acceptable surety on Federal bonds (otherwise referred to as being “T-Listed”). The WVDEP stated that the original standard was adopted to address concerns about the financial solvency of sureties providing reclamation bonds in West Virginia. The WVDEP did not have the necessary resources or expertise to regularly and timely monitor the financial condition of sureties doing business in West Virginia. However, a surety that is T-Listed is required to provide, on a regular basis, financial information to the U.S. Department of the Treasury, which reviews this information and provides its findings to State regulatory agencies. While this information provided by the Department of the Treasury has been helpful, WVDEP Start Printed Page 77322stated, this restriction has prevented sureties that are not T-Listed, and that are otherwise in good financial condition, from providing reclamation bonds in West Virginia. The WVDEP stated that this, along with other reasons, has adversely impacted the market for reclamation bonds in West Virginia. Further, the WVDEP stated, since a surety must have at least two years experience providing surety bonds before it can be T-Listed, a new insurance company or an existing insurance company that has not previously issued surety bonds cannot offer surety bonds in West Virginia.

The WVDEP stated that the emergency rule amendment to CSR 38-2-11.3.a.3 not only addresses the concerns noted above by providing an alternative source of reliable financial information about the surety, but it also allows sureties that are licensed and in good financial condition but are not T-Listed to provide surety bonds in West Virginia.

The WVDEP stated that an “emergency” exists under the State's Administrative Procedures Act because there is presently a great demand for reclamation bonds from the coal industry in West Virginia that is not being met by the limited number of sureties currently offering surety bonds in West Virginia. As a result, alternative, more expensive means are being used by coal companies to comply with the State's bonding requirements. Among other things, this has greatly restricted the availability of capital for the development of new coal mines and the creation of new jobs. The State acknowledges that at a time when coal is so important to West Virginia's economy, this dearth of surety bonds is having a significant negative impact on West Virginia's coal industry. The proposed amendment to 38 CSR 2 is thus necessary “to prevent substantial harm to the public interest.”

By electronic mail dated November 4, 2005, WVDEP submitted revisions it made to its emergency rule based upon the State's comment period which ended on October 27, 2005 (Administrative Record Number WV-1447). The revision package consists of the amended emergency rule, Form #8 Notice of an Emergency Amendment to an Emergency Rule, amended Emergency Rule Questionnaire dated October 28, 2005, and Form #3 Notice of Agency Approval of a Proposed Rule and Filing with the Legislative Rulemaking Review Committee. These documents were filed with the West Virginia Secretary of State and the Legislative Rulemaking Review Committee on November 2, 2005.

We announced receipt of the proposed amendment in the November 8, 2005, Federal Register (70 FR 67654). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the adequacy of the proposed amendment (Administrative Record Number WV-1448). We did not hold a hearing or a meeting because no one requested one. The public comment period closed on December 8, 2005. We received comments from one industry organization and one Federal agency.

III. OSM's Findings

Following are the findings that we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment in full, as modified on November 4, 2005. Any revisions that we do not specifically discuss below concern nonsubstantive wording or editorial changes and are approved here without discussion.

CSR 38-2-11.3.a.3 Surety

The existing rule currently provides that surety received after July 1, 2001, must be recognized by the Treasurer of the State as holding a current certificate of authority from the U.S. Department of the Treasury as an acceptable surety on Federal bonds. In its October 17, 2005, submittal, CSR 38-2-11.3.a.3 was proposed to be amended by adding new language at the end of the existing requirement to provide as follows:

11.3.a.3. Surety received after July 1, 2001 must: (i) be recognized by the treasurer of state as holding a current certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds; Or (ii) submit to the Secretary proof that the surety holds a valid license issued by the basis a certificate of good standing or other evidence demonstrating that the surety remains licensed or otherwise in good standing with the West Virginia Insurance Commissioner and the insurance regulator of its domiciliary state and within four (4) years take all steps necessary to obtain a certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds.

The WVDEP filed the emergency rule with the West Virginia Secretary of State on September 21, 2005. The Secretary of State approved the rule on an emergency basis pursuant to W. Va. Code 29A-3-15a on October 11, 2005.

The WVDEP also filed a legislative rule containing the same language with the Secretary of State on September 21, 2005 (Administrative Record Number WV-1442). At the same time, the State announced a public comment period on the legislative rule. The public comment period commenced on September 21, 2005, and closed on October 27, 2005. A public hearing was held at the WVDEP office in Kanawha City prior to the close of the comment period.

On October 3, 2005, the WVDEP provided OSM a copy of the proposed rule for informal review. Unlike the State's existing surety bond provisions at CSR 38-2-11.3.a.1 and the Federal surety bond requirements at 30 CFR 800.20(a), the proposed revision at CSR 38-2-11.3.a.3 did not appear to require the surety to be licensed to do business in the State. To resolve this concern and to make additional clarifications without altering the purpose or intent of either the emergency or the legislative rule, on October 14, 2005 (Administrative Record Number WV-1443), OSM recommended that the language in both rules be revised as follows:

11.3.a.3. Any company that executes surety bonds in the State after July 1, 2001, must: (i) Be recognized by the treasurer of the state as holding a current certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds by being included on the Treasury Department's listing of approved sureties (Department Circular 570); or (ii) submit proof to the Secretary that it holds a valid license issued by the West Virginia Insurance Commissioner, and agree to submit to the Secretary on at least a quarterly basis a certificate of good standing from the West Virginia Insurance Commissioner and such other evidence from the insurance regulator of its domiciliary state, if other than West Virginia, demonstrating that it is also in good standing in that state. Companies not included on the United States Treasury Department's listing of approved sureties must diligently pursue application for listing, submit evidence on a semi-annual basis demonstrating that they are pursuing such listing, and within four (4) years, obtain a certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds.

At the time, State officials agreed that while the recommended technical revisions offered by OSM appeared to clarify that a surety must be licensed to do business in the State and did not change the intent of their initial rule, they needed to wait until after the close of their comment period before making any changes to the rule. The WVDEP stated that it would submit the revisions and any additional changes to OSM after the close of the State's comment period on October 27, 2005. The WVDEP further stated that the revision would be in the form of both an emergency and a legislative rule. We subsequently stated in our November 8, 2005, proposed rule notice that if the WVDEP submits revised rules that contain language identical to the language recommended by OSM, and Start Printed Page 77323quoted above, that revised language would be acted upon by OSM in this final rulemaking. If substantive changes beyond or other than those recommended by OSM were included in the revised rules, we stated that we may need to reopen the comment period.

The legislative rule was submitted to the Legislative Rulemaking Review Committee after the close of the comment period, and it is to be acted upon by the West Virginia Legislature during the upcoming 2005-2006 regular legislative session. If that rule is adopted with the identical language recommended by OSM as quoted above, no further action will be required by OSM, and it will become part of West Virginia's permanent regulatory program upon submission by the State.

Given that an emergency situation currently exists in West Virginia with regard to surety bonds and to avoid any unnecessary delays in approving the proposed State rule, we requested comments on both the proposed State rule and our suggested revisions to that rule as quoted above. We stated in the proposed rule notice that any changes adopted by the State after the close of its public comment period would result in the revision to both its emergency and legislative rules. As mentioned above, any substantive changes in the proposed State rules that go beyond the suggested language provided by OSM and quoted above would also be subject to further rulemaking.

In its November 4, 2005, submittal, the WVDEP provided revisions to its emergency rule at CSR 38-2-11.3.a.3 that were approved by the West Virginia Secretary of State. The effective date of the revision is September 21, 2005. As proposed in the State's November 4, 2005, submittal, the existing language was deleted and CSR 38-2-11.3.a.3 now provides as follows:

11.3.a.3. Any company that executes surety bonds in the State after July 1, 2001, must: (i) Be recognized by the treasurer to [of] the state as holding a current certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds by being included on the Treasury Department's listing of approved sureties (Department Circular 570); or (ii) submit proof to the Secretary that it holds a valid license issued by the West Virginia Insurance Commissioner, and agree to submit to the Secretary on at least a quarterly basis a certificate of good standing from the West Virginia Insurance Commissioner and such other evidence from the insurance regulator of its domiciliary state, if other than West Virginia, demonstrating that it is also in good standing in that state. Companies not included on the United States Treasury Department's listing of approved sureties must diligently pursue application for listing, submit evidence on a semi-annual basis demonstrating that they are pursuing such listing, and within four (4) years, obtain a certificate of authority from the United States Department of the Treasury as an acceptable surety on federal bonds.

With the exception of the typographical error which the State intends to correct (“to” should be changed to “of”), we find that the revised emergency rule language submitted by the State on November 4, 2005, is identical to the language that OSM recommended it adopt, and that is quoted above, to resolve our initial concerns with the language that was submitted on October 17, 2005. Furthermore, we find that, as amended, the emergency rule at CSR 38-2-11.3.a.3 contains changes that have no direct Federal counterparts, but is, nevertheless, consistent with and no less effective than the Federal regulations at 30 CFR 800.20(a) concerning surety bonds and can be approved. As we stated above, the legislative rule that will make permanent the provisions of the emergency rule was submitted to the West Virginia Legislative Rulemaking Review Committee on November 2, 2005. That provision will be acted upon by the West Virginia Legislature during the upcoming 2005-2006 regular legislative session. If that legislative rule is adopted with language identical to that which we are approving here, and quoted above, no further action will be required by OSM, and it will become part of West Virginia's permanent regulatory program upon submission by the State. Any substantive changes to that legislative rule that go beyond the language that we are approving here and quoted above will be subject to public review and further rulemaking.

IV. Summary and Disposition of Comments

Public Comments

We published a Federal Register notice on November 8, 2005, and asked for public comments on the proposed State amendment (Administrative Record Number WV-1448). One organization responded on December 2, 2005 (Administrative Record Number WV-1450). The West Virginia Coal Association (WVCA) encouraged OSM's approval of the amendment. According to the WVCA, there are currently a very limited number of surety companies offering surety bonds in West Virginia. Because of market conditions, there is a great demand for surety bonds. The WVCA said that the proposed amendment would not only have the potential to increase the availability of bonds in West Virginia, but it would do so without increasing any risk for the State. It would only allow surety companies that are licensed in West Virginia and in good standing/good financial condition, but are not T-listed, to market surety bonds in West Virginia. As noted above in the finding, we are approving the amendment.

Federal Agency Comments

Under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we requested comments on the amendment from various Federal agencies with an actual or potential interest in the West Virginia program (Administrative Record Number WV-1446). We only received comments from the U.S. Environmental Protection Agency. Its comments are summarized below.

Environmental Protection Agency (EPA) Concurrence and Comments

Under 30 CFR 732.17(h)(11)(ii), we are required to obtain written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.). None of the revisions that West Virginia proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment.

Under 30 CFR 732.17(h)(11)(i), we requested comments on the amendment from EPA (Administrative Record Number WV-1446). EPA responded by letter dated December 5, 2005, and stated that it did not identify any apparent inconsistencies with the Clean Water Act or other statutes and regulations under EPA's jurisdiction. EPA went on to say, “Our primary interests concerning reclamation bonds are that they be sufficient to provide restoration of land and water resources in case of bankruptcy and that surety companies which underwrite these bonds remain solvent.” (Administrative Record Number WV-1451). We note that the amendment that we are approving here does not alter the State's approved bonding requirements concerning the amount of bond.

V. OSM's Decision

Based on the above findings, we are approving the program amendment West Virginia sent us on October 17, 2005, and amended on November 4, 2005. To implement this decision, we are amending the Federal regulations at 30 CFR part 948, which codify decisions concerning the West Virginia program. We find that good cause exists under 5 Start Printed Page 77324U.S.C. 553(d)(3) to make this final rule effective immediately. Section 503(a) of SMCRA requires that the State's program demonstrate that the State has the capability of carrying out the provisions of the Act and meeting its purposes. Making this rule effective immediately will expedite that process. SMCRA requires consistency of State and Federal standards.

VI. Procedural Determinations

Executive Order 12630—Takings

This rule does not have takings implications. This determination is based on the analysis performed for the Federal bonding regulations.

Executive Order 12866—Regulatory Planning and Review

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

Executive Order 12988—Civil Justice Reform

The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 and has determined that this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments because each program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR parts 730, 731, and 732 have been met.

Executive Order 13132—Federalism

This rule does not have federalism implications. SMCRA delineates the roles of the Federal and State Governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be “in accordance with” the requirements of SMCRA, and section 503(a)(7) requires that State programs contain rules and regulations “consistent with” regulations issued by the Secretary pursuant to SMCRA.

Executive Order 13175—Consultation and Coordination With Indian Tribal Governments

In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally-recognized Indian tribes and have determined that the rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The basis for this determination is that our decision is on a State regulatory program and does not involve a Federal regulation involving Indian lands.

Executive Order 13211—Regulations That Significantly Affect the Supply, Distribution, or Use of Energy

On May 18, 2001, the President issued Executive Order 13211 which requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required.

National Environmental Policy Act

This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)).

Paperwork Reduction Act

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq.).

Regulatory Flexibility Act

The Department of the Interior certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The State submittal, which is the subject of this rule, is consistent with and no less effective than the Federal bonding regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon the data and assumptions used in the Federal bonding regulations.

Small Business Regulatory Enforcement Fairness Act

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the analysis performed under various laws and executive orders for the Federal bonding regulations.

Unfunded Mandates

This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the analysis performed under various laws and executive orders for the Federal bonding regulations.

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List of Subjects in 30 CFR Part 948

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Dated: December 15, 2005.

Michael K. Robinson,

Acting Regional Director, Appalachian Region.

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For the reasons set out in the preamble,

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PART 948—WEST VIRGINIA

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1. The authority citation for part 948 continues to read as follows:

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

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2. Section 948.15 is amended by adding a new entry to the table in chronological order by “Date of publication of final rule” to read as follows:

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Approval of West Virginia regulatory program amendments.
* * * * *
Original amendment submission dateDate of publication of final ruleCitation/description
*        *        *        *        *        *        *
October 17, 2005, and amended November 4, 2005December 30, 2005CSR 38-2-11.3.a.3.
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[FR Doc. 05-24643 Filed 12-29-05; 8:45 am]

BILLING CODE 4310-05-P