Montana Regulatory Program/Reclamation Plan

<RULE> DEPARTMENT OF THE INTERIOR <SUBAGY>Office of Surface Mining Reclamation and Enforcement</SUBAGY> <CFR>30 CFR Part 926</CFR> <DEPDOC>[SATS No. MT-040-FOR; Docket No. OSM-2023-0001; S1D1S SS08011000 SX064A000 231S180110; S2D2S SS08011000 SX064A000 23XS501520]</DEPDOC> <SUBJECT>Montana Regulatory Program/Reclamation Plan</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Surface Mining Reclamation and Enforcement, Interior. <HD SOURCE="HED">ACTION:</HD> Final rule; approving, in part. <SUM> <HD SOURCE="HED">SUMMARY:</HD> We, the Office of Surface Mining Reclamation and Enforcement (OSMRE), are approving, in part, an amendment to the Montana regulatory program under the Surface Mining Control and Reclamation Act of 1977 (SMCRA or the Act). During the 2019 legislative session, Montana updated its Montana Strip and Underground Mine Reclamation Act codified in the Montana Code Annotated. Accordingly, Montana submitted this amendment to OSMRE on its own initiative. The amendment requires a permit applicant's compliance information to be updated and approved if a bankruptcy or reorganization results in a change of ownership for the applicant. Furthermore, the amendment requires permit owners to provide financial assurance for employee pensions. Lastly, the amendment makes a typographical correction. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> The effective date is December 19, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Jeffrey Fleischman, Field Office Director, Office of Surface Mining Reclamation and Enforcement, 100 East B Street, Casper, Wyoming 82602, Telephone: (307) 261-6550, Email: <E T="03">jfleischman@osmre.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <EXTRACT> <FP SOURCE="FP-2">I. Background on the Montana Program</FP> <FP SOURCE="FP-2">II. Submission of the Amendment</FP> <FP SOURCE="FP-2">III. OSMRE's Findings</FP> <FP SOURCE="FP-2">IV. Summary and Disposition of Comments</FP> <FP SOURCE="FP-2">V. OSMRE's Decision</FP> <FP SOURCE="FP-2">VI. Statutory and Executive Order Reviews</FP> </EXTRACT> <HD SOURCE="HD1">I. Background on the Montana Program</HD> Section 503(a) of SMCRA permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior approved the Montana program on October 24, 1980. You can find background information on the Montana program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Montana program in the October 24, 1980, <E T="04">Federal Register</E> (45 FR 70445). You can also find later actions concerning the Montana program and program amendments at 30 CFR 926.25. <HD SOURCE="HD1">II. Submission of the Amendment</HD> By letter dated February 16, 2023 (Administrative Record No. MT-040-01), Montana sent OSMRE an amendment to its program under SMCRA (30 U.S.C. 1201 <E T="03">et seq.</E> ). We found Montana's proposed amendment to be administratively complete on February 17, 2023. Montana submitted the proposed amendment to OSMRE, on its own volition, following changes to its statutes in 2019. During the 2019 legislative session, the Montana legislature passed Senate Bill 201 (SB 201). SB 201 updated the Montana Strip and Underground Mine Reclamation Act codified at Montana Code Annotated (Mont. Code Ann. or MCA) sec. 82-4-222. In order to implement SB 201, Montana first proposed to add language at Mont. Code Ann. sec. 82-4-222(1)(g)(i) that would require an applicant for a permit to update its ownership information in the Applicant Violator System and with the Montana Department of Environmental Quality (DEQ) if bankruptcy or reorganization results in changes to ownership parties specified in this section. The proposed language also requires that DEQ approve these changes. Second, Montana proposed to add language at Mont. Code Ann. sec. 82-4-222(1)(g)(iii) that would require DEQ to develop rules for permit owners to provide bonding or other financial assurance necessary to meet their financial obligations for employee pensions and reclamation obligations. Furthermore, operators would be prohibited from passing associated costs from financial assurance for employee pension programs onto purchasers who are dependent on the operator to generate electricity for customers. Lastly, Montana proposed a typographical correction at Mont. Code Ann. sec. 82-4-222(1)(q). SB 201 states that the purpose of the statute is to ensure private pensions plans remain in good standing and that employees who have earned benefits under those plans receive them. It also states that it is imperative that private employers not backtrack on pension plans or shift the burden to the State of Montana, and that if a private pension plan fails to provide earned benefits, the State of Montana may be burdened with additional financial responsibilities and demands. We announced receipt of the proposed amendment in the May 23, 2023, <E T="04">Federal Register</E> (88 FR 33018). 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 amendment. No hearing or meeting was requested, and we did not receive any comments in relation to the proposed rule. The public comment period ended on June 22, 2023. <HD SOURCE="HD1">III. OSMRE's Findings</HD> The following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving, in part, the amendment as described below. <HD SOURCE="HD2">A. Mont. Code Ann. Sec. 82-4-222(1)(g)(i)</HD> We are not approving Montana's proposed revision of Mont. Code Ann. sec. 82-4-222(1)(g)(i). Montana proposed a substantive revision to Mont. Code Ann. sec. 82-4-222(1)(g)(i) that does not have a direct counterpart in the Federal regulations. As proposed, Mont. Code Ann. sec. 82-4-222(1)(g)(i) would require an applicant for a permit to update its compliance history and ownership and control information in the Applicant Violator System and with the Montana DEQ if bankruptcy or reorganization results in changes in a permittee's officers, partners, directors, “or any individual owning of record or beneficially, alone or with associates, 10% or more of any class of stock of the applicant.”. The proposed language would also require that DEQ approve these changes. Montana's proposed amendment conflicts with Federal regulations because all changes to ownership information resulting from bankruptcy would trigger permit approval provisions and give DEQ approval authority over changes in a permittee's applicant and operator information. Under Federal regulations, while a regulatory authority has approval authority over transfer, assignment, or sale of permit rights (TAS), it does not have approval authority over changes in applicant and operator information. See 30 CFR 774.17. OSMRE clarified this distinction in its December 3, 2007, rule, which states that “a change of a permittee's owners or controllers does not constitute a transfer, assignment, or sale.” (72 FR 68000, 68008-09). While there could be situations related to bankruptcy that would trigger a TAS, such as the conveying of permit rights to a new person or a reorganization resulting in a new type of business entity, not all changes from bankruptcy, including a change in individual owners or operators, would trigger a TAS. Under the proposed regulation, all changes resulting from bankruptcy trigger a TAS, even when those changes do not effectuate a transfer, assignment, or sale of permit rights, and that conflicts with the Federal regulations. With this issue in mind, OSMRE is denying the proposed amendment to Mont. Code Ann. sec. 82-4-222(1)(g)(i). We note that this permittee information is still required to be updated anytime there is a change of ownership or control, regardless of the reason for the change. And while the regulatory authority must require changes to ownership and control information to be updated in the Applicant Violator System, it cannot provide for all ownership and control information changes resulting from bankruptcy to trigger the need for a permit approval. We note that the proposed amendment to Mont. Code Ann. sec. 82-4-222(1)(g)(i) has only been interpreted in terms of whether the section conflicts with SMCRA and its regulations. There has been no official determination as to whether Mont. Code Ann. sec. 82-4-222(1)(g)(i) conflicts with other Federal laws, such as Federal bankruptcy law under 11 U.S.C. 101-1532. While we understand and commend Montana's effort to limit the financial burden on the State should a bankruptcy occur, this section of the statute, as currently written, is less effective than the Federal regulations and must be denied. We encourage Montana and DEQ to resubmit the amendment with changes addressing this issue to OSMRE through the informal amendment process. Through the informal amendment process, OSMRE and the State can collaborate on proposed changes to Montana's coal regulations that may achieve the State's goal of lessening the State's financial burden while also meeting SMCRA requirements. <HD SOURCE="HD2">B. Mont. Code Ann. Sec. 82-4-222(1)(g)(iii)</HD> We are not approving Montana's proposed revision of Mont. Code Ann. sec. 82-4-222(1)(g)(iii). Montana proposed a substantive revision to Mont. Code Ann. sec. 82-4-222(1)(g)(iii) that does not have a direct counterpart in the Federal regulations. 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