COALEX REPORT 283

	Coalex Report 283

This is the Office of Surface Mining's library of COALEX Research Reports. COALEX is a database of mining and reclamation information, including the Surface Mining Law and regulations, maintained in LEXIS-NEXIS -- a commercial, on-line research service. These reports have been compiled under a cooperative agreement between the Office of Surface Mining and the Interstate Mining Compact Commission, which represents most U.S. coal producing states. The following report includes an analysis of a specific issue requested by a state regulatory authority with responsibility for carrying out the Surface Mining Law. Copies of the research reports and attachments are available to the public, upon request. For additional information, or to obtain copies of the listed attachments, contact Ron Tarquinio by phone at (202) 208-2882 or by e-mail at rtarquin@osmre.gov.

                   
COALEX State Inquiry Report - 283
May, 1994

Olga Brunning, Esquire
Maryland Department of Natural Resources
Tawes Building
580 Taylor Avenue, Room C-4
Annapolis, Maryland 21401

TOPIC: TRANSFERABILITY OF VALID EXISTING RIGHTS (VER)

INQUIRY: An operator of a tipple (with VER) wanted to transfer the permit; however, he did not
get all of the papers in before the permit expired. Is the VER transferable to the new operator,
particularly in this situation where there was a break in the permit? Please locate any relevant
information on these issues.

SEARCH RESULTS: Research was conducted using COALEX and LEXIS. A 1991 preamble to OSM's
proposed rule on VER discussing the transferability of VER was identified; a copy is attached. No
information was retrieved on the issue of the expiration of a permit before the completion of its
proposed transfer and the resulting effect on VER. To provide general background information,
materials on transfer of permit rights and continuing permittee obligations when permits expire are
included as part of the Report.  

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

TRANSFERABILITY of VER
56 FR 33152 (JULY 18, 1991). Proposed rule. Areas designated by Act of Congress.
"Transferability of VER. The legislative history of SMCRA suggests that Congress wanted to avoid
any compensable takings.... Many, if not most, property rights in coal are transferable under State
law. Any VER regulatory definition or policy adopted by OSM that would have the effect of limiting
or abrogating the right to transfer property would risk effecting a compensable taking. In addition,
a review of VER law under other Federal statutes indicates no clear or typical Congressional intent
the VER be nontransferable. OSM believes that to interpret SMCRA to impose or authorize a limit
on VER transferability would not comply with the intent of Congress in enacting SMCRA. Thus, the
property rights requirement in this proposed section incorporates the concept that VER is
transferable.

"...[I]f a person with a property interest in the coal on the applicable effective ate had VER, that
person could, if permitted by applicable laws and regulations, transfer the VER to a successor after
the effective date. The transferred right would suffice as the basis for a finding of VER for the
successor in interest. The determination of VER takes into account the nature of the rights on the
applicable effective date. Subsequent property transactions cannot be used to create VER if it did
not exist on the effective date."

   See excerpt on transferability of VER in 53 FR 52374 (December 27, 1988). Proposed rules.
Applicability of the prohibitions of SMCRA to the surface impacts of underground coal mining.


TRANSFER OF PERMIT RIGHTS
A list of Federal Register preambles on proposed and final rules for Parts 773 and 774 dating back
to June, 1982 is attached.


PERMIT EXPIRATION
54 FR 13814 (APRIL 5, 1989). Final rule. Permit renewal.
   The rule removed the requirements to renew a permit for which the permit term expired when
only reclamation activities remained to be performed. The preamble discusses the obligations that
continue until final bond release.

44 FR 14902 (MARCH 13, 1979). Permanent program preamble - Final rule. Section 788.14
Application for renewals.
"3. Also suggested was an addition to this section allowing an operation to continue under the
terms of the old permit, should the application for renewal be contested beyond the term of the old
permit. This suggestion was rejected. Section 771.21(b)(2) [now 774.15] of the regulations
requires that applications for renewal be submitted at least 120 days prior to expiration of the
permit involved, which should be ample time in which to process renewal applications. Section
506(d) of the Act and 30 CFR 788.16 [now 774.14] state that an operation shall have the right of
successive renewal, unless the regulatory authority makes certain findings. If these finding are not
made, the permittee could continue mining past the term of the original permit, even if the
decision of the regulatory authority was contested by opponents of renewal. However, if the
regulatory authority found that the permit should not be renewed, and the original term of the
permit expired during an appeal, the operator should not be able to continue to operate under the
Act."

   See the two Interior administrative decisions attached: WHITE WINTER COALS, INC., 1 IBSMA
305, IBSMA 79-29 (1979). STRAIGHT LINE COAL CORPORATION v OSM, Docket No. NX 0-104-R
(1981).


ATTACHMENTS
A.   56 FR 33152 (JULY 18, 1991). Proposed rule. Areas designated by Act of Congress.
B.   53 FR 52374 (DECEMBER 27, 1988). Proposed rules. Applicability of the prohibitions of
     SMCRA to the surface impacts of underground coal mining.
C.   A list of Federal Register preambles on proposed and final rules for Parts 773 and 774
     dating back to June, 1982.
D.   54 FR 13814 (APRIL 5, 1989). Final rule. Permit renewal.
E.   44 FR 14902 (MARCH 13, 1979). Permanent program preamble - Final rule. Section 788.14
     Application for renewals.
F.   WHITE WINTER COALS, INC., 1 IBSMA 305, IBSMA 79-29 (1979). 
G.   STRAIGHT LINE COAL CORPORATION v OSM, Docket No. NX 0-104-R (1981).


Research conducted by: Joyce Zweben Scall

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