43 CFR Part 3800

[WO-300-1990-PB-24 1A] RIN 1004-AD44

Mining Claims Under the General Mining Laws; Surface Management

AGENCY: Bureau of Land Management, Interior.

ACTION: Final rule.

I. What Is the Background of This Rulemaking?

On March 23, 2001, BLM published a proposed rule (66 FR 16162) to suspend, in whole or in part, the regulations we issued on November 21, 2000 (65 FR 69998) , which became effective on January 20, 2001 (hereinafter, the 2000 rule), and put in their place, in whole or in part, the regulations that existed on January 19, 2001, which, for the most part, BLM adopted in 1980 (hereinafter, the 1980 rule). As stated in the proposal, the suspension would provide BLM the opportunity to review some of the requirements of the 2000 rule in light of issues the plaintiffs raised in legal challenges to the rule and concerns expressed by others, including several states. We also requested comment on whether we should retain some combination of the 2000 regulations and the 1980 regulations. The 45-day comment period on the proposal closed on May 7, 2001. BLM received approximately 49,000 comments.

On June 15, 2001 (66 FR 32571), we published a final rule revising section 3809.505, which addressed how the new financial guarantee requirements of the 2000 rule affect existing approved plans of operations. The final rule made no substantive change in the requirements except to postpone the date by which operators must comply with the financial guarantee requirements. The rule changes the date by which operators with plans of operation approved by BLM before January 20, 2001, must provide a new financial guarantee--from July 19, 2001, to November 20, 2001, and to September 13, 2001, for operations without any financial guarantee. The extension was intended to give BLM field offices and state government agencies time to prepare to administer the requirements. We also announced in that rule that it is our intention to retain the financial guarantee provisions of the 2000 rule.

Congress also directed BLM as to how to conduct the rulemaking and what provisions BLM could include in a final rule. In particular, Congress provided express guidance to BLM in the FY 2000 and FY 2001 Interior Appropriations Acts as follows:

None of the funds in this Act or any other Act shall be used by the Secretary of the Interior to promulgate final rules to revise 43 CFR subpart 3809, except that the Secretary, following the public comment period required by section 3002 of Public Law 106-31, may issue final rules to amend 43 CFR Subpart 3809 which are not inconsistent with the recommendations contained in the National Research Council report entitled ``Hardrock Mining on Federal Lands'' so long as these regulations are also not inconsistent with existing statutory authorities. Nothing in this section shall be construed to expand the existing statutory authority of the Secretary. (Public Law 106-113, 113 Stat. 1501, App. C., 113 Stat. 1501A-210 sec. 357 (1999).)

(See the National Research Council Report , entitled Hardrock Mining on Federal Lands (NRC Report), September, 1999).

An identical provision was enacted in Sec. 156 of the FY 2001 Interior Appropriations Act (Public Law 106-291, sec. 156, 114 Stat. 922, 962-63 (Oct. 11, 2000)).

Following issuance of the 2000 rule four lawsuits were filed challenging the rule, three in the U.S. District Court for the District of Columbia (brought by the National Mining Association (NMA), the Newmont Mining Corporation, and the Mineral Policy Center and two other environmental groups), and one in the U.S. District Court for Nevada (brought by the State of Nevada). These cases include National Mining Association v. Department of the Interior, No. 00CV-2998 (D.D.C. filed December 15, 2000); Newmont Mining Corporation v. Department of the Interior, No. 01CV-23 (D.D.C. filed January 5, 2001); Mineral Policy Center v. Department of the Interior, No. 01CV-73 (D.D.C. filed January 16, 2001); and State of Nevada v. DOI, No. CV-N01-0040-ECR-VPC (D. NV filed January 19, 2001).

The industry plaintiffs and the State of Nevada assert that BLM improperly issued the 2000 rule and violated numerous statutes, including:

The specific congressional provisions cited above applicable to promulgation of the revised 3809 rule;

The notice and comment provisions of the Administrative Procedure Act, particularly with regard to the ``substantial irreparable harm'(SIH) standard of the final regulatory definition of the term ``unnecessary or undue degradation;'

The National Environmental Policy Act;
The Regulatory Flexibility Act;
The Federal Land Policy and Management Act; and
The General Mining Law.

The environmental plaintiffs assert that the 3809 regulations are not sufficiently stringent and improperly allow mining operations on lands without valid mining claims or mill sites.

On January 19, 2001, the Federal District Court in the National Mining Association suit denied NMA's motion for a preliminary injunction to stay the effective date of the final rules, holding that the plaintiff did not successfully meet its burden of showing that the revised 3809 rule becoming effective would cause irreparable harm. As to the merits of the plaintiff's claims, the Court concluded that, although such claims

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may or may not have merit, it was unclear at the preliminary injunction stage of the proceeding that the NMA would eventually prevail. The litigation is currently stayed pending this rulemaking.

On February 2, 2001, the Nevada Governor sent a letter to the Secretary of the Interior requesting postponement of the effective date and the implementation of the revised 3809 rule based on legal deficiencies associated with promulgation of the new regulations and the assertion that the revised 3809 rules were unnecessary. In his February 2, 2001, letter, the Governor expressed concern that:

These new regulations will, if not overturned, impose significant new and unnecessary regulatory burdens on Western States and will preclude mining companies from engaging in operations they might otherwise pursue, thereby leading to a dramatic decrease in employment and revenue in the mining sector and a corresponding decrease in tax revenue and other economic benefits to Western states. BLM's own Final Environmental Impact statement concludes that the new rules will result in a loss of up to 6,050 jobs, up to $396 million in total income and up to $877 million in total industry output.

The Governor was particularly concerned because Nevada would bear the greatest impact of the revised 3809 regulations.

In the March 23, 2001, proposal, BLM acknowledged that the plaintiffs, including the State of Nevada, raised serious concerns regarding the revised 3809 regulations. These factors were, in part, the basis for BLM's proposal to suspend the 2000 rule. In the March 23, 2001, proposal we stated:

If BLM were to implement the new regulations, and then be required to change back again if the new rules are found deficient, the impact on both large and small miners is of substantial concern. Many of the latter, particularly, may not be sophisticated in dealing with changing regulatory requirements. On a larger scale, implementation of the 2000 rule could create an uncertain economic environment. (66 FR 10164)

* * * we specifically solicit comments as to whether some provisions of the revised 3809 rules should not be suspended while BLM conducts its review of the issues. For example, rather than suspending all of the revised 3809 rules, BLM could leave in place some or all of the new revisions that address the specific regulatory gaps identified by the National Research Council (as identified in Alternative 5, the ``NRC Alternative,'' in BLM's final environmental impact statement), which most commenters agreed are warranted. BLM requests comments on this approach or others, e.g., whether all of the revised rules should be suspended until either BLM completes further rulemaking or until the litigation is resolved.

Basis and Purpose of the Rule

After reviewing comments, we have decided that acting in phases provides the best approach to achieving the overall objective of preventing unnecessary or undue degradation while providing opportunities to explore, develop, and produce minerals.

The first phase was to postpone the deadlines in the financial guarantee requirements for those operating under plans of operations approved before January 20, 2001, to enable both BLM and states to prepare to implement the requirements. At the same time we affirmed our intention to retain the substantive financial guarantee requirements of the 2000 rule. We published a final rule to this effect in the Federal Register on June 15, 2001 (66 FR 32571).

Today's action is the second step in the process. We are amending the regulations in a way that removes from the regulatory scheme the components of the 2000 rule that created the most uncertainty regarding proper regulatory standards, while leaving in place the remainder of the rule. BLM continues to believe that undertaking implementation of certain provisions of the new regulatory program applicable to hardrock mining on public lands before additional examination of the legal, economic, and environmental concerns that plaintiffs raise could prove unnecessarily disruptive and confusing to the mining industry and the states that, together with BLM, regulate the mining industry. We removed these provisions in today's rulemaking.

The provisions we are retaining reflect the many comments that support retention of the 2000 rules. The retained provisions will not unnecessarily disrupt the mining industry and will prevent unnecessary or undue degradation of the public lands while the agency considers whether further changes to the rules are warranted. For the most part, the rationale for retaining many sections of the 2000 rules is set forth in the November 2000 Federal Register preamble to those rules. The provisions we are leaving in place implement recommendations of the NRC Report, although we are continuing to consider whether we should modify specific provisions.

In an effort to avoid a regulatory vacuum, the March 23 notice proposed a regulatory scheme wherein the 2000 rules would have been suspended in one part of the Code of Federal Regulations (proposed subpart 3809a) and the 1980 rules would have been reinstated as subpart 3809. We do not need such an approach in these final rules because, for the most part, we are retaining the overall regulatory structure of the 2000 rules. With such a scheme in place we avoid a regulatory vacuum by removing specific provisions of the 2000 rules, replacing such provisions by corresponding provisions of the 1980 rules, or by continuing provisions from the 2000 rule that reflect the previous status quo that existed in the absence of specific provisions in the 1980 rules. We explain this latter situation in the discussion of specific sections.

As the next phase, we are also publishing in the Federal Register a proposed rule containing the same changes as in this final rule, as well as some additional changes we had not considered previously. The proposed rule we published on March 23, 2001, provides a logical and legally sufficient basis for today's action which changes only a few sections of the 2000 rules. However, we recognize that because of the high level of interest in this rule among affected industry groups, environmental organizations, and states, we might benefit from providing an opportunity to comment on the specific changes we are adopting today. As a result of those comments we may make further adjustments to the rules.

While we considered providing an opportunity for further public comment before issuing this final rule, we decided that it is more important to resolve as much uncertainty as to the status of the 2000 rules as quickly as possible. This benefits all affected parties by clarifying the Department's position on several issues involved in the litigation challenging the 2000 rules. However, if comments in the companion proposed rule indicate that additional changes to the rules are warranted, we will make these changes in a subsequent final rule.

This final rule is authorized by the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.) (FLPMA) and the Mining Law of 1872, as amended (hereinafter ``mining laws''). Section 302(b) of FLPMA, 43 U.S.C. 1732(b), directs the Secretary to manage development of the public lands. In addition, the final rule we are adopting today carries out the FLPMA directive that, ``[i]n managing the public lands, the Secretary shall, by regulation or otherwise, take any action necessary to prevent unnecessary or undue degradation of the public lands.'' See 43 U.S.C. 1732(b).

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The final rule we are adopting today is consistent with the FLPMA directive. We issue it under the general rulemaking authorities of FLPMA and the mining laws (43 U.S.C. 1733 and 1740 and 30 U.S.C. 22, respectively).

Consistency With the NRC Report Recommendations

As described earlier, in the fiscal year 2001 appropriations act for the Department of the Interior (Pub. L. 106-113, Sec. 357), Congress prohibited the Secretary from spending money to issue final 3809 rules other than those ``which are not inconsistent with the recommendations contained in the [NRC Report] so long as these regulations are also not inconsistent with existing statutory authorities.'' Comments we received during this and earlier comment periods indicate that there are divergent views on the consistency question. Some respondents strongly believe that the ``not inconsistent with'' provision sets strict limits on what we can include in this rule. That is, we can promulgate only regulations that conform exactly to specific NRC Report recommendations, and no more. Commenters on the March 23 proposal made extensive arguments in support of their views. Much discussion reiterated the positions and comments received before the November 2000 rules were published.

In the Federal Register preamble of the 2000 rule (65 FR 69999), we discussed this issue at length, and we continue to stand by the points we made in that discussion. There is no need to repeat those discussions here. It is clear that ``not inconsistent with'' is a more lenient standard than others that Congress could have chosen to use. For instance, Congress could have expressly said that the BLM rules could not ``go beyond'' the NRC recommendations, but it did not. Accordingly, BLM continues to interpret the Appropriations Act as not barring BLM from promulgating rules that address matters not expressly covered by the NRC Report. Nevertheless, BLM has carefully considered the entire NRC Report in deciding what course of action to take.

Today's rule continues in place those sections that specifically address NRC recommendations. As a practical matter, however, it is not feasible to publish a regulation which so narrowly interprets the Appropriation Act that BLM could not promulgate rules with provisions necessary to implement the specific overall recommendation. For example, the public and the regulated industry are better served if the financial guarantee requirements the NRC recommends include a description of acceptable instruments, and provisions on release and forfeiture, to mention a few components of a sound financial guarantee program.

In addition, we continue to leave in place portions of the 2000 rule that specific NRC recommendations do not address. We do so because BLM needs such provisions for sound land management. For example, this rule retains section 3809.101, which addresses what an operator may do with mineral materials on mining claims. Although the NRC did not discuss this issue, the problem has existed for years and the rule helps alleviate industry concerns and improves the Bureau's ability to manage mineral resources. We are still considering whether we need to make additional changes. However, today's action removes those provisions that created the most questions regarding consistency with the NRC Report. We now see ourselves in a position to learn more through the implementation of these rules before we engage in additional rulemaking.

Summary of Rule Adopted

Today's rule makes several changes to the 2000 rule. The rule continues to address regulatory gaps identified in the NRC Report. Today's changes do not affect that.

We are changing the definition of ``operator,'' found at section 3809.5. We are restoring the definition contained in the 1980 regulations.

We are also changing the definition of ``unnecessary or undue degradation'' found at section 3809.5. The proposal leading to the 2000 rule did not contain the ``substantial irreparable harm'' clause in the definition of unnecessary or undue degradation (paragraph 4). As discussed above, all but one of the lawsuits contended that the SIH provision in the definition of unnecessary or undue degradation violated the Administrative Procedure Act, NEPA, and FLPMA. Today's action removes that provision.

We also amend section 3809.116 by revising paragraph (a), which established a joint and several liability provision. This also was a provision generating numerous comments suggesting that (1) BLM had exceeded its authority and (2) liability should be proportional. As with the SIH provision, the comments we received were highly critical of the policy itself and also questioned its legality. In its revised form, the paragraph provides that mining claimants and operators are liable for obligations that accrue while they hold their interests. In effect, this returns the regulation to that in place prior to the 2000 rule.

We also amend the standards contained in section 3809.420. We removed most of the 2000 rules' environmental and operational performance standards and replaced them with the 1980 rule standards. We chose to maintain the general standards in section 3809.420(a), because these standards form a foundation upon which operators should base their plans of operations. We are unaware of widespread concern addressing these broad standards. From the 2000 rule we have retained and renumbered sections 3809.420(c)(3) and (4). These sections codify the longstanding BLM policies on acid mine drainage and use of cyanide.

The last substantive changes are the elimination of sections 3809.702 and 3809.703, which established administrative civil penalties. Throughout the process of preparing the 2000 rule, BLM was aware, as was the NRC, that BLM's authority to impose civil penalties is uncertain. Therefore, we have decided to remove these sections. At the same time, we intend to work with the Congress to clarify our authority. BLM's authority to establish an administrative penalty scheme is uncertain and, until such authority is clearly established, administrative penalties should not be part of subpart 3809.