RELATES TO:
KRS
350.010,
350.028,
350.060,
350.151,
350.465,
30 C.F.R. Parts 702, 730-733, 735, 917,
30 U.S.C. 1253,
1255,
1291
NECESSITY, FUNCTION, AND CONFORMITY: KRS Chapter 350 in
pertinent part requires the cabinet to promulgate administrative regulations
pertaining to surface coal mining and reclamation operations. KRS Chapter 350
also recognizes exemptions from regulation for certain types of operations.
This administrative regulation recognizes a regulatory exemption for operations
in which coal is extracted incidental to the extraction of other minerals. The
administrative regulation sets forth application requirements and procedures
for obtaining approval of these exemptions, requirements for public notice and
disclosure of information concerning the exemption, standards for cabinet
approval of the exemption, conditions for maintaining the exemption, rights of
entry and inspection to the site for which the exemption was granted, and
enforcement procedures and reporting requirements applicable to the
exemption.
Section 1. Measurement and
Reporting Period.
(1) The beginning of the
cumulative measurement period shall be:
(a)
For mining areas where extraction of coal or other minerals commenced on or
after August 3, 1977, the date extraction of coal or other minerals commenced
at that mining area; and
(b) For
mining areas where coal or other minerals were extracted prior to August 3,
1977, the operator shall select and consistently use one (1) of the following,
subject to cabinet approval: the date extraction of coal or other minerals
commenced at that mining area or August 3, 1977.
(2) The end of the
cumulative measurement
period and the end of the twelve (12) month period (for annual reporting
purposes pursuant to Section 9 of this administrative regulation) shall be:
(a) For mining areas where extraction of coal
or other minerals commenced on or after the effective date of this
administrative regulation, the last day of the calendar quarter during which
coal extraction commenced, and each anniversary of that day thereafter;
and
(b) For mining areas where coal
or other minerals were extracted prior to the effective date of this
administrative regulation, December 31, 1992 and each anniversary of that day
thereafter.
Section
2. Application Requirements and Procedures.
(1)
(a) Any
person who plans to commence or continue coal extraction after the effective
date of this administrative regulation, in reliance on the incidental mining
exemption, shall file a complete application for exemption with the cabinet for
each mining area.
(b) Following the
effective date of this administrative regulation, a person shall not commence
coal extraction based upon the exemption until the cabinet approves the
application for exemption, except as provided in subsection (5)(c) of this
section.
(2) Existing
operations. Any person who has commenced coal extraction at a mining area,
prior to the effective date of this administrative regulation, in reliance upon
the incidental mining exemption, may continue mining operations for sixty (60)
days after the effective date of this administrative regulation. Coal
extraction shall not continue after this sixty (60) day period unless that
person files an administratively complete application for exemption with the
cabinet. If an administratively complete application is filed within sixty (60)
days, the person may continue extracting coal in reliance on the exemption
beyond the sixty (60) day period until the cabinet makes an administrative
decision on the application.
(3)
Additional information. The cabinet shall notify the applicant if the
application for exemption is incomplete and may at any time require submittal
of additional information.
(4)
Public comment period. Following publication of the newspaper notice required
by Section 3(9) of this administrative regulation, the cabinet shall provide a
period of no less than thirty (30) days during which any person having an
interest that is or may be adversely affected by a decision on the application
may submit written comments or objections.
(5) Exemption determination.
(a) No later than ninety (90) days after
filing of an administratively complete application, the cabinet shall make a
written determination whether, and under what conditions, the persons claiming
the exemption are exempt under this administrative regulation, and shall notify
the applicant and persons submitting comments on the application of the
determination and the basis for the determination.
(b) The determination of exemption shall be
based upon information contained in the application and any other information
available to the cabinet at that time.
(c) If the cabinet fails to provide an
applicant with the determination specified in paragraph (a) of this subsection,
an applicant who has not begun may commence coal extraction pending a
determination on the application unless the cabinet issues an interim finding,
together with reasons therefore, that the applicant shall not begin coal
extraction.
(6)
Administrative review.
(a) In accordance with
the procedures established under
400
KAR 1:110, Section 9, within thirty (30) days of the
notification of a determination under subsection (5) of this section, any
person adversely affected by the determination may request a formal hearing to
review the determination.
(b) A
request for formal hearing filed under
400
KAR 1:110, Section 9 shall not suspend the effect of a
determination under subsection (5) of this section.
Section 3. Contents of
Application
for Exemption. An
application for exemption shall include at a minimum:
(1) The name and address of the
applicant;
(2) A list of the
minerals sought to be extracted;
(3) Estimates of annual production of coal
and the other minerals within each mining area over the anticipated life of the
mining operation;
(4) Estimated
annual revenues to be derived from bona fide sales of coal and other minerals
to be extracted within the mining area;
(5) If coal or the other minerals are to be
used rather than sold, estimated annual fair market values at the time of
projected use of the coal and other minerals to be extracted from the mining
area;
(6) The basis for all annual
production, revenue, and fair market value estimates;
(7) A description, including county, city if
within municipal boundaries, and boundaries of the land, of sufficient
certainty that the mining areas can be located and distinguished from other
mining areas;
(8) An estimate to
the nearest acre of the number of acres that will compose the mining area over
the anticipated life of the mining operation;
(9) Evidence of publication, in the newspaper
of largest bona fide circulation (according to the definition in
KRS 424.110 to
424.120)
in the county of the mining area, of a public notice that an application for
exemption has been filed with the cabinet. The public notice shall identify the
persons claiming the exemption and shall contain a description of the proposed
operation and its locality sufficient for interested persons to identify the
operation;
(10) Representative
stratigraphic cross-section(s) based on test borings or other information
identifying and showing:
(a) The relative
position, approximate thickness, and density of the coal and each other mineral
to be extracted for commercial use or sale; and
(b) The relative position and thickness of
any material, not classified as other minerals, that will also be extracted
during the conduct of mining activities;
(11) A map of appropriate scale that clearly
identifies the mining area;
(12) A
general description of mining and mineral processing activities for the mining
area;
(13) A summary of sale
commitments and agreements, if any, that the applicant has received for future
delivery of other minerals to be extracted from the mining area, or a
description of potential markets for the other minerals;
(14) If the other minerals are to be
commercially used by the applicant, a description specifying the use;
(15) For operations having extracted
coal or
other minerals prior to filing an
application for exemption, in addition to the
information required above, the following information:
(a) Any relevant documents the operator has
received from the cabinet documenting the operation's exemption from the
requirements of the SMCRA, KRS Chapter 350, and 405 KAR;
(b) The cumulative production of the coal and
other minerals from the mining area; and
(c) Estimated tonnages of stockpiled coal and
other minerals; and
(16)
Any other information pertinent to the qualification of the operation as
exempt.
Section 4.
Public Availability of Information.
(1) Except
as provided in subsection (2) of this section, all information submitted to the
cabinet under this administrative regulation shall be made immediately
available for public inspection and copying at the department's regional office
with jurisdiction over coal mining in the locality of the subject exempt
operation, until at least three (3) years after expiration of the period during
which the subject mining area is active.
(2) The cabinet may keep information
submitted to the cabinet under this administrative regulation confidential if
the person submitting it requests in writing, at the time of submission, that
it be kept confidential and if the information concerns trade secrets or is
privileged commercial or financial information of the persons intending to
conduct operations under this administrative regulation.
(3) Information requested to be held as
confidential under subsection (2) of this section shall not be made publicly
available until after notice and opportunity to be heard is afforded persons
both seeking and opposing disclosure of the information.
Section 5. Requirements for Exemption.
(1) Activities are exempt from the
requirements of
SMCRA, KRS Chapter 350, and 405 KAR (excluding this
administrative regulation) if all of the following are satisfied:
(a) The cumulative production of coal
extracted from the mining area does not exceed sixteen and two-thirds (16 2/3)
percent of the total cumulative production of coal and other minerals removed
for purposes of bona fide sale or reasonable commercial use, determined
annually.
(b) The coal is produced
from one (1) or more seams lying above the deepest stratum from which other
minerals are extracted for purposes of bona fide sale or reasonable commercial
use, or from a seam immediately below this deepest stratum.
(c) The cumulative revenue derived from the
coal extracted from the mining area does not exceed fifty (50) percent of the
total cumulative revenue derived from the coal and other minerals removed for
purposes of bona fide sale or reasonable commercial use, determined annually.
If the coal extracted or the minerals removed are used by the operator or
transferred to a related entity for use instead of being sold in a bona fide
sale, then the fair market value of the coal or other minerals shall be
calculated at the time of use or transfer and shall be considered rather than
revenue.
(2) Persons
that are seeking or have obtained an exemption under this administrative
regulation from the requirements of
SMCRA, KRS Chapter 350, and 405 KAR
Chapters 7 through 24 (excluding this administrative regulation) shall comply
with the following:
(a) Each other mineral
upon which an exemption under this administrative regulation is based shall be
a commercially valuable mineral for which a market exists or which is mined in
bona fide anticipation that a market will exist for the mineral in the
reasonably foreseeable future, not to exceed twelve (12) months from the end of
the current period for which cumulative production is calculated. A legally
binding agreement for the future sale of other minerals shall be sufficient to
demonstrate this standard.
(b) If
either coal or other minerals are transferred or sold by the operator to a
related entity for its use or sale, the transaction shall be made for
legitimate business purposes.
Section 6. Conditions of Exemption and Right
of Inspection and Entry.
(1) A person
conducting activities covered by this administrative regulation shall:
(a) Maintain on-site, or at other locations
available to authorized representatives of the cabinet and the Secretary of the
U.S. Department of the Interior, information necessary to verify the exemption
including, but not limited to, commercial use and sales information, extraction
tonnages, and a copy of the exemption application and exemption approved by the
cabinet;
(b) Notify the cabinet
upon completion of the mining operations or permanent cessation of all coal
extraction activities; and
(c)
Conduct operations in accordance with the approved application or, if
authorized to extract coal under Section 2(2) or (5)(c) of this administrative
regulation prior to submittal or approval of an exemption application, in
accordance with the standards of this administrative regulation.
(2) Authorized representatives of
the cabinet and the Secretary of the U.S. Department of the Interior shall have
the right to conduct inspections of operations claiming exemption under this
administrative regulation.
(3) Each
authorized representative of the cabinet and the Secretary of the U.S.
Department of the Interior conducting an inspection under this administrative
regulation shall:
(a) Have a right of entry
to, upon, and through any mining and reclamation operations without advance
notice or a search warrant, upon presentation of appropriate
credentials;
(b) At reasonable
times and without delay, have access to and copy any records relevant to the
exemption; and
(c) Have a right to
gather physical and photographic evidence to document conditions, practices, or
violations at a site.
(4) No search warrant shall be required with
respect to any activity under subsections (2) and (3) of this section, except
that a search warrant may be required for entry into a building.
Section 7. Stockpiling of
Minerals.
(1) Coal.
Coal extracted and
stockpiled may be excluded from the calculation of
cumulative production until
the time of its sale, transfer to a related entity, or use:
(a) Up to an amount equaling a twelve (12)
month supply of the coal required for future sale, transfer, or use as
calculated based upon the average annual sales, transfer, and use from the
mining area over the two (2) preceding years; or
(b) For a mining area where coal has been
extracted for a period of less than two (2) years, up to an amount that would
represent a twelve (12) month supply of the coal required for future sales,
transfer, or use as calculated based on the average amount of coal sold,
transferred, or used each month.
(2) Other minerals.
(a) The cabinet shall disallow all or part of
an operator's tonnages of stockpiled other minerals for purposes of meeting the
requirements of this administrative regulation if the operator fails to
maintain adequate and verifiable records of the mining area of origin or the
disposition of stockpiles, or if the disposition of the stockpiles indicates
the lack of commercial use or market for the minerals.
(b) The cabinet shall only allow an operator
to utilize tonnages of stockpiled other minerals for purposes of meeting the
requirements of this administrative regulation if:
1. The stockpiling is necessary to meet
market conditions or is consistent with generally accepted industry practices;
and
2. Except as provided in
paragraph (c) of this subsection, the stockpiled other minerals do not exceed a
twelve (12) month supply of the mineral required for future sales as approved
by the cabinet on the basis of the exemption application.
(c) The cabinet may allow an operator to
utilize tonnages of stockpiled other minerals beyond the twelve (12) month
limit established in paragraph (b) of this subsection if the operator can
demonstrate to the cabinet's satisfaction that the additional tonnage is
required to meet future business obligations of the operator, such as may be
demonstrated by a legally binding agreement for future delivery of the
minerals.
(d) The cabinet may
periodically revise the other mineral stockpile tonnage limits in accordance
with the criteria established by paragraphs (b) and (c) of this subsection
based on additional information available to the cabinet.
Section 8. Revocation and
Enforcement.
(1) Cabinet responsibility. The
cabinet shall conduct an annual compliance review of the
mining area,
utilizing:
(a) The annual report submitted
pursuant to Section 9 of this administrative regulation;
(b) An on-site inspection; and
(c) Any other information available to the
cabinet.
(2) If the
cabinet has reason to believe that a specific mining area was not exempt under
the provisions of this administrative regulation at the end of the previous
reporting period, is not exempt, or will be unable to satisfy the exemption
criteria at the end of the current reporting period, the cabinet shall notify
the operator that the exemption may be revoked and the reason(s) therefor. The
exemption shall be revoked unless the operator demonstrates to the cabinet
within thirty (30) days that the mining area in question did meet and will
continue to meet the criteria for exemption.
(3)
(a) If
the cabinet finds that an operator has not demonstrated that activities
conducted in the mining area qualify for the exemption, the cabinet shall
revoke the exemption and immediately notify the operator and interveners. If a
decision is made not to revoke an exemption, the cabinet shall immediately
notify the operator and interveners.
(b) In accordance with the procedures
established under
400
KAR 1:110, Section 9, within thirty (30) days of the
notification of a decision whether to revoke an exemption, any person adversely
affected by the decision may request a formal hearing to review the
decision.
(c) A request for formal
hearing filed under
400
KAR 1:110, Section 9 shall not suspend the effect of a
decision whether to revoke an exemption.
(4) Direct enforcement.
(a) An operator mining in accordance with the
terms of an approved exemption shall not be cited for violations of KRS Chapter
350 or 405 KAR Chapters 7 through 24 that occurred prior to the revocation of
the exemption.
(b) An operator who
does not conduct activities in accordance with the terms of an approved
exemption and knows or ought to know that the activities are not in accordance
with the approved exemption shall be subject to direct enforcement action for
violations of KRS Chapter 350 and 405 KAR Chapters 7 through 24 that occur
during the period of the activities.
(c) Upon revocation of an exemption or denial
of an exemption application, an operator shall stop conducting surface coal
mining operations until a permit is obtained, and shall comply with the
reclamation standards of KRS Chapter 350 and 405 KAR Chapters 7 through 24 with
regard to conditions, areas, and activities existing at the time of revocation
or denial.
Section
9. Reporting Requirements.
(1)
(a) Following approval by the cabinet of an
exemption for a mining area, the person receiving the exemption shall, for each
mining area, file a written report annually with the cabinet containing the
information specified in subsection (2) of this section.
(b) The report shall be filed no later than
thirty (30) days after the end of the twelve (12) month period as determined in
accordance with Section 1(2) of this administrative regulation.
(c) The information in the report shall
cover:
1. Annual production of coal and other
minerals and annual revenue derived from coal and other minerals during the
preceding twelve (12) month period; and
2. The cumulative production of coal and
other minerals and the cumulative revenue derived from coal and other
minerals.
(2)
For each period and
mining area covered by the report, the report shall
specify:
(a) The number of tons of extracted
coal sold in bona fide sales and the total revenue derived from these
sales;
(b) The number of tons of
coal extracted and used or transferred by the operator or related entity and
the estimated total fair market value of this coal;
(c) The number of tons of coal
stockpiled;
(d) The number of tons
of other commercially valuable minerals extracted and sold in bona fide sales
and total revenue derived from these sales;
(e) The number of tons of other commercially
valuable minerals extracted and used or transferred by the operator or related
entity and the estimated total fair market value of these minerals;
and
(f) The number of tons of other
commercially valuable minerals removed and stockpiled by the
operator.