ELR Citation: ELR 20917
No(s). 85-5827 (D.C. Cir. Jul 22, 1986)

The court holds that the Office of Surface Mining (OSM) may assess a reclamation fee on coal produced in the United States based on the gross weight of coal prior to sale, even though the material taxed includes impurities, such as water, attributable to the post-extraction process. The court first holds that the Secretary of the Interior did not exceed his statutory authority under the Surface Mining Control and Reclamation Act in promulgating a regulation imposing the fee, used to finance restoration of resources damaged by mining, on each ton of coal produced based on the pre-sale gross weight of the coal including impurities. Neither the Act itself nor the legislative history defines the words "coal" or "coal produced," leaving the meaning of the terms ambiguous and open to the Secretary's reasonable construction. The court then holds that the Secretary's definition of "coal produced" to mean the pre-sale gross weight was reasonable. The difficulties inherent in auditing company records if moisture deductions were allowed would complicate the administrative process. In addition, the Secretary deemed it desirable to have uniform application of the fee assessment throughout the country, and the moisture of coal varies in different deposits. The court rejects plaintiff's argument that the regulation is inconsistent with the definition of coal as "combustible carbonaceous rock" found elsewhere in the regulations, since that section specifically allows for other definitions as indicated. Finally, the court holds that the regulation does not constitute an unexplained change in OSM's policies. Although the initial fee regulation was promulgated in 1978 and the revised regulation contested in this case was not promulgated until 1982, there was no national policy in the intervening four-year period corresponding to plaintiff's interpretation of the statute. All but one of the 12 operators who interpreted the regulation as plaintiff does were located in Alabama, and the most that can be said is that there was some confusion prior to the promulgation of the revised regulation.

Counsel for Appellant
Michael B. Barr, Charles D. Ossola
2000 Pennsylvania Ave. NW, Washington DC 20006
(202) 955-1515

Counsel for Appellee
Albert M. Ferlo Jr.
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2774

Before: MIKVA, STARR, and SILBERMAN, Circuit Judges.