[CITE: Cool Breeze Farms v. Triad Mining, 15 CADDNAR 5 (2018)]
[VOLUME 15, PAGE 5]
Cause #: 16-138R
Caption: Cool Breeze Farms v. Triad Mining
Administrative Law Judge: Wilson
Attorneys: Cool Breeze (Kotter); Triad Mining (Illingworth); DNR (Boyko)
Date: February 28, 2018
FINAL
ORDER
The approval of the application for bond release issued by the Department is affirmed.
FINDINGS OF FACT AND CONCLUSIONS OF LAW WITH FINAL ORDER OF THE ADMINISTRATIVE LAW JUDGE
Statement of the Proceeding and Jurisdiction:
1. On September 12, 2016, Cool Breeze Farms, Inc. (“Cool Breeze”), by President, Brian Held, filed correspondence with the Natural Resources Commission (the “Commission”) seeking administrative review of approval, by the Department of Natural Resources (“Department”), of a bond release requested by Triad Mining, LLC (“Triad”).
2. The original correspondence by Cool Breeze states “Please allow this letter to serve as a formal request for administrative review of the bond release status Permit # S-311 of the Freelandville Mine. The notification letter dated September 1, 2016 from DNR was received by me on September 9, 2016. Please advise next steps.”[1]
3. The correspondence initiated a proceeding governed by IC 4-21.5-3, commonly referred to as the Administrative Orders and Procedures Act (“AOPA”), and the administrative rules adopted by the Commission at 312 IAC 3-1 to assist with the implementation of AOPA.
4. Cool Breeze, Triad and the Department are hereinafter collectively referred to as the “Parties”.
5. Administrative Law Judge (“ALJ”) Dawn Wilson was appointed under IC 14-10-2-2 to consider the correspondence as a petition requesting administrative review under AOPA and 312 IAC 3-1 and to conduct this proceeding.
6. On September 22, 2016, following the issuance of notice to Cool Breeze, Triad and the Department, ALJ Wilson held a Prehearing Conference in Jasonville, Indiana. During the Prehearing Conference, ALJ Wilson provided legal advisories to the Parties and allowed the Parties the opportunity to state their positions. During the Prehearing Conference, due to a lack of specificity in the petition as it was originally filed, the ALJ offered Cool Breeze a defined opportunity to file a more definite statement in the proceeding. Also, during the Prehearing Conference, a status conference was set for November 16, 2016.
7. On October 2, 2016, Cool Breeze filed an amended petition titled “Statement of Cause October 2, 2016” (the “Petition”). The Petition included the following allegation: “Reclamation efforts are not met in relation to Permit #S-311, phase three final release…in regards to land owned by Cool Breeze.” See the Petition.
8. The Petition specifically states the following allegations[2]:
1. Prime Farm Land requirements and criteria are not met. Includes area of
a. Wet holes in which farming is unable to occur and has not been able to even attempt farming
b. Wet holes in which farming is unable to occur and has not been able to show production
c. Large rocks in the topsoil
2. Drainage and Terracing areas are unacceptable and in violation of needed components of release
a. There are multiple area that continue to be problematic areas, some to the point of having cattails growing.
b. Erosion of the land is a considerable natural resource concern.
3. Piece meal state.
a. A portion of the land is adjacent to a lower elevation area (not in this permit) but which takes and holds water on idled coal mine ground of Cool Breeze. The ditch area is the Pollard Ditch and is completely hindered by the mining activity or lack thereof. Pollard Ditch takes water off more than 1300 acres in the area. The draining of this higher level farm should be held from release until being able to properly align into the intermittent stream. The drainage in the ditches, the vegetation, and the final reproduction cannot be reclaimed in a piece meal fashion.
b. Uncertainties of how the reclamation drainage will match up with land and erosion issues of the land.
c. A mining hauling road that cuts the Cool Breeze property in two
d. Multiple stock piles of dirt
e. Erosion of the land is a considerable natural resource concern.
Id.
9. On behalf of each Party, appearances by counsel were filed as follows:
a. On September 22, 2016, Ihor Boyko filed his appearance on behalf of the Department.
b. On October 18, 2016, Chad Sullivan filed his appearance on behalf of Triad[3].
c. On February 2, 2017, Katie Kotter filed her appearance on behalf of Cool Breeze.
d. On August 18, 2017, William Illingworth filed his appearance on behalf of Triad.
10. On November 16, 2016, and January 4, 2017, status conferences were held with all parties present and one or more present telephonically.
11. On April 19, 2017, a Final Status Conference was heard and an administrative hearing was set to be heard on June 8, 2017. The hearing date was subsequently continued at the request of Cool Breeze.
12. On June 7, 2017, a Post Final Status Conference was heard, previously ordered prehearing deadlines were extended, and the Parties were ordered to timely file status reports. Thereafter, the Parties filed status reports.
13. On August 29, 2017, following service of notice to the Parties, an additional Final Status Conference, continued at the request of Cool Breeze from its originally scheduled date of August 23, 2017, was heard. During the additional Final Status Conference, the administrative hearing was reset to be heard on October 24, 2017[4].
14. The Parties were notified by the ALJ that the hearing set for October 24, 2017, would recess at 1:00 p.m. Upon a request by Cool Breeze, the administrative hearing was reset to be heard on November 28, 2017.[5]
15. On November 20, 2017, Respondent Triad filed Motions in Limine and Cool Breeze filed its objection on that same date. Triad’s motions were denied by the ALJ on November 22, 2017.
16. On November 24, 2017, Respondent Triad filed a PreHearing Brief.
17. A hearing of the facts began on November 28, 2017, with all Parties present. Following a recess, the administrative hearing resumed on November 29, 2017, at the offices of the Commission’s Division of Hearings in Indianapolis, Indiana, with all Parties present.
18. Following the administrative hearing, the Parties were allowed the opportunity to file a post-hearing brief and proposed findings of fact and conclusions of law, on or before January 29, 2018, as determined to be appropriate by each party. On January 27, 2018, Cool Breeze filed “Cool Breeze’s Post Hearing Brief”. On January 29, 2018, Triad filed “Respondent Triad Mining, LLC’s Post-Hearing Brief” and a proposed “Final Order”. On January 29, 2018, the Department filed “Respondent DNR’s Proposed Findings of Fact and Conclusions of Law” and “Proposed Findings of Fact and Conclusions of Law”.
19. This proceeding is governed by IC 14-34, commonly referred to as the Indiana Surface Coal Mine and Reclamation Act or “I-SMCRA”. One purpose of IC 14-34 is to “Implement and enforce the federal Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201-1328).” IC 14-34-1-3(1).
20. The Department is an administrative agency of the State of Indiana with responsibility for the administration and enforcement of a program for the regulation of surface coal mining and reclamation pursuant to I-SMCRA and its implementing rules set forth at 312 IAC 25.
21. A determination by the Department to approve or disapprove an application for bond release is subject to administrative review under IC 4-21.5-3 and related rules at 312 IAC 3-1. 312 IAC 25-5-16(l).
22. The ALJ is the “ultimate authority” as defined by IC 4-21.5-3-15 for Department decisions on bond release requests. IC 14-34-2-2 and 312 IAC 3-1-2(b).
23. The ALJ has de novo jurisdiction over the subject matter and over the persons of the Parties under IC 4-21.5 and 312 IAC 3-1. IC 4-21.5-3-14(d).
[VOLUME 15, PAGE 6]
Findings of Fact:[6]
Stipulated Facts
24. During the administrative hearing, prior to the presentation of any testimony, written proposed stipulated findings of fact were submitted by the Parties. The following proposed stipulated facts are accepted by the ALJ as findings of fact in this proceeding:
a. Cool Breeze is a closely held Indiana corporation that was formed on
April 21, 1981, by Mike and Alice Held.
b. Currently, Mike and Alice Held’s son and daughter-in-law, Brian and Dena Held, manage the corporation as the majority shareholders of Cool Breeze.
c. Triad Mining, LLC is a Delaware limited liability company authorized to transact business in Indiana that was formed in August of 2014.
d. Triad Mining, LLC is the successor to Triad Mining of Indiana, Inc.
e. On or about June 8, 1995, Cool Breeze entered into Coal Mining Lease Agreement with Triad Mining of Indiana, Inc. concerning Triad’s right to mine 80 acres of Cool Breeze’s property (the “Coal Mining Lease”). An Amendment to said Lease was executed on or about April 1, 2014 (The “First Lease Agreement”).
f. On or about April 30, 1999, Triad Mining, Inc. and Cool Breeze entered into a Second Coal Mining Lease Agreement, by which Triad leased an additional 212.69 acres of Cool Breeze’s property (the “Second Coal Mining Lease”). An Amendment to the Second Coal Mining Lease was executed on or about
April 1, 2014 (the “Second Lease Amendment”).
g. The Coal Mining Lease, Second Coal Mining Lease, First Lease Amendment, and Second Lease Amendment were all assigned to Triad Mining, LLC, as successor in interest to Triad Mining, Inc.
h. Cool Breeze currently owns approximately 330 acres of farm ground in Knox County, Indiana, of which 288.71 acres are leased to Triad.
i. The Department granted a permit to conduct Surface Coal Mining and Reclamation Operations at the “Freelandville Mine”, being Permit #S-311, on or about November 21, 1994.
j. On or about June 14, 1999, the Department granted Triad an Amendment to Permit #S-311, being S-311-2, which included approximately 180.59 acres of Cool Breeze’s property in Sections 3 and 10, of Township 5 North, Range 8 West, in Knox County, Indiana.
k. On or about September 17, 2001, the Department granted Triad an Amendment to Permit #S-311, being S-311-3, which included approximately 108.12 acres of Cool Breeze’s property in Section 4, of Township 5 North, Range 8 West, in Knox County, Indiana.
l. On July 12, 2016, Triad submitted an Application for Bond Release with the Department, in which they requested a Phase II and Final Phase III Release for portions of the reclaimed area within the Freelandville Mine S-311 permits (the “Original Bond Release”).
m. Triad’s Original Bond Release requested a Phase II release of 720.1 acres and a Phase III release of 785.9 acres.
n. With respect to Cool Breeze, Triad’s Original Bond Release requested that 118.6 acres of Cool Breeze’s property located within the Permit receive a Phase II release and 116.6 acres receive a final Phase III release.
o. All of Cool Breeze’s property scheduled for Phase II and Phase III release is considered Prime Farmland.
p. On or about August 3, 2016, the Department’s Reclamation Specialist, Brad Loveless, conducted a bond release inspection of the areas requested for bond release.
q. As a result of Brad Loveless’ inspection, Triad made several revisions to its Original Bond Release, which included removing 8.8 acres of land owned by Cool Breeze from the Phase III release, and submitted a revised bond release request on
August 14, 2016 (the “Revised Bond Release”).
r. Triad’s Revised Bond Release requested a Phase II release of 718.1 acres and a Phase III release of 771.4 acres.
s. Under the Revised Bond Release, Triad requested a Phase III bond release on 107.8 acres of Cool Breeze’s property and depicted exceptions on Triad’s revised Final Phase III Bond Release Map, dated August 12, 2016.
t. The results of Brad Loveless’ inspection were detailed in a bond inspection report, dated September 1, 2016, directed to Brent Boyle at Triad (the “Inspection Result Notification”). In the Inspection Result Notification, Brad Loveless approved a Phase III release of the bonds on all property owned by Cool Breeze except the 8.8 acres depicted in Triad’s Revised Bond Release.
u. Triad bonded Cool Breeze’s property included in Permit #3-311-2 at the rate of $7,500 per acre.
v. Triad bonded Cool Breeze’s property included in Permit #S-311-3 at the rate of $8,000 per acre.
w. On or about September 12, 2016, Cool Breeze filed for administrative review of Triad’s bond release request with the Commission concerning Permit #S-311 of the Freelandville Mine.
x. On or about October 2, 2016, Cool Breeze filed a Statement of Cause with the Commission in which it contends that Cool Breeze’s property does not meet the proper reclamation requirements for Phase III release.
y. The Department and Triad contend that all required reclamation requirements have been met with respect to Cool Breeze’s property requested for Phase III release, with the exception of the 8.8 acres that were removed in the Revised Bond Release request.
See Joint Stipulation of Facts.
Permit and Bond
25. To ensure I-SMCRA compliance, Department permitting of surface mining operations is completed after a consideration of information applicable to hydrology, geology, archology, fish and wildlife, soils, blasting plans, and plans for operation. See testimony of Brent Boyle (“Boyle”). [7]
26. Bonding requirements are determined at the time of permitting. The bond amount is determined by the size of the area permitted, the depth of the coal seam, the number of acres of prime farmland that are included in the affected area and the presence of an aquafer. The determination is made at the initial point of permitting so that, following the various phases of bond release, there remains sufficient bonding to cover required reclamation. Throughout the term of an approved permit, the Department’s Director may initiate procedures to require additional bonding, if necessary. See testimony of Brad Loveless (“Loveless”) and Kevin Geier (“Geier”). See also Ex. Y[8], Attachment XI.A.1 and Ex. Z, Attachment XI.A.1.
27. Higher bonding rates are imposed when there is a higher level of prime farmland identified in the permit. See testimony of Boyle.
28. A permit for the Freelandville Mine, Permit #S-311 (the “Permit”), including its reclamation plan, was approved by the Department. Triad’s mining activities began on approximately 500 acres in the 1990s. Id.
29. The Permit has had eight amendments and the permitted area has expanded to approximately 3000 acres. The pre-mine land use identified for much of the property under permit is cropland. Id.
30. Boyle began employment with Triad in 1990. Prior to employment with Triad, he worked as an Assistant Mine Engineer conducting surveys and preparing reports, summaries and mining projections. Boyle is currently employed with Triad as a Reclamation Manager. In his current position, Boyle is to ensure I-SMCRA requirements are met, environmental issues are appropriately addressed, reports are submitted and permits are updated. Boyle currently participates in ongoing communication with Department staff to ensure that what is needed is completed. Boyle conducts site visits and oversees 13 mining sites. Boyle has “put together” approximately two dozen reclamation plans, including five or six plans for mines that have now been fully reclaimed and the bond totally released. Boyle was involved in the development of the reclamation plan for the Freelandville Mine. Id.
31. Part II of the Permit, amendment #S-311-2, identifies pre-mining grades between 1% and 6% and similar regrading post mining. See Ex. Y, Attachment IV.E.6.
32. Part VII of the Permit, amendment #S-311-3, includes a plan for soil handling. The plan identifies horizon “A” soil as the top six inches of soil and horizon “B” and “C” as the next 12 to 24 inches of soil material. The plan requires that, upon removal, horizon “A” material is to be stockpiled separately from horizon “B” and “C” materials. The plan places no differentiation between prime and non-prime topsoil that is stockpiled. During the reclamation process, topsoil is generally returned to areas near the area in which the soil is stockpiled. For cropland reclamation, 18 inches of soil depth is required. For prime farmland, a minimum depth of 48 inches of soil material is the required replacement. See testimony of Boyle and Ex. 1, pp. 10-13 and Attachment VII .B.c.(1), p. 1.
33. Part VII of the Permit, amendment #S-311-3, designates the method for determining crop yield production targets. Actual production records, soil types for specific areas and other data form the basis of the target yields, by field and crop type. See testimony of Boyle and Ex. 1, Part VII, p. 25 and Attachment VII.A.2.a(2), p. 4.
34. Attachment VI.D.1 of Part II of the Permit, amendments #S-311-2 and #S-311-3, includes a section that addresses Probable Hydrologic Consequences regarding surface water quantity. As it relates to the quantity of surface water, the section states, in part, “[s]urface runoff due to the slope of the land surface will be similar to pre-mine conditions….Surface runoff may be reduced by the potential of increased permeability of the post-mine soils after the breakup of existing fragipans and the installation of agricultural terraces which tend to reduce the surface runoff…the ultimate receiving stream for runoff from this permit is the White River via its tributary Pollard Ditch.” See Ex. Y, Attachment VI.D.1 and Ex. Z, Attachment VI.D.1.
35. All runoff within the affected permit area must be controlled in some way. See testimony of Loveless.
36. For I-SMCRA compliance, the Department does not require any specific structure to address drainage or erosion control. The Department’s reclamation focus is that the area is adequately stabilized, installed structures effectively control erosion, and that the effort meets the approved postmining land use. Id.
37. A permit describes the intention of the operation plan and the design for controls and structures specific to the permit. Id.
38. Designs for controls and structures specific to a Triad permit are prepared by Triad’s in house professional engineer and submitted to the Department. Following the Department’s approval of the designs, structures are installed in accordance with approved plan designs. See testimony of Boyle.
39. Specific to the Permit at issue in this proceeding, runoff is controlled through the engineered diversion ditch, Pollard Ditch, conveying water to an engineered sediment control structure, a pond. See testimony of Loveless and Ex. I.
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40. Regarding runoff, the Department requires and oversees the enforcement of the permits issued by Indiana Department of Environmental Management (“IDEM”) for National Pollutant Discharge Elimination System (“NPDES”) inspections and monitoring specific to coal mining. Any outfall is covered by the NPDES permit. The Department conducts inspections on areas under active NPDES permits, monitors the outfall twice a month, and checks the area for pH, iron, solids and flow. See testimony of Loveless.
41. A 2007 version of a Citizen’s Guide to Coal Mining and Reclamation in Indiana (the “Citizen’s Guide”) is posted on the Department’s website and, in part, states that “[a] mine reclamation plan will show how overburden will be graded, subsoil and topsoil replaced, and revegetated postmining land uses accomplished…” See testimony of B. Held and Ex. R, p. 17.
42. The Freelandville Mine’s Reclamation Plan revised “06/22/94” identifies a restoration plan for prime farmland and, in part, states:
a. “The applicant will remove, store and replace a total depth of 48 inches…Topsoil and subsoil will be handled separately.” See Ex. X, pp. S32-S33.
b. Conservation practices to be used to control erosion and sedimentation are directed as follows: “The measures to be used, but not limited to, as conservation practices during the liability period will consist of: the use of quick growing cover crop will be used initially with subsequent permanent species being planted during the next applicable growing season…Depending on time of year or percentage of slopes, which the applicant determines, that the gradient and length are too great for a cover crop or mulch to control erosion, terracing, dry ponds, or other erosion control methods will be used.” Id. at p. S34.
c. “The techniques used to demonstrate that prime farmland soils have been restored to equivalent levels of yield after mining will be actual crop production. This may be accomplished by either harvesting entire crops or test plots and will be conducted according to criteria as set forth in phases II and III of the permanent program bond release procedures. …Target yields are to be derived from SCS data, reference areas, or other sources approved by the division of reclamation….” Id. at p. S35.
d. “All surface water that falls onto the disturbed permit area will be controlled by certified silt basins. The effluent discharge of the silt basins will meet all applicable performance standards and will be monitored according to the NPDES requirements.” Id. at p. S40-1.
e. The Indiana State Board of Health Coal Mine Sedimentation Basin Design Summaries, signed by John G. Donan, Jr., P.E. for Donan Engineering Co., Inc., are included in the plan. Id. at p. S-49-1.
f. Measures to prevent or mitigate adverse effects on fish, wildlife and related environmental values and threatened or endangered plants are stated as follows: “There are no known threatened or endangered species within the general vicinity of the permit area. As described in part III.E, the method of mining and reclamation should minimize disturbances to fish and wildlife. The post-mining land uses are similar to pre-mining uses, which over time will at least be equal regarding habitat diversity.” Id. at p. S47. See Ex. X.
43. Condition #2 for Permit #S-311, modified June 5, 2001, prohibits mining operations within the right-of-way of County Roads 900 East and 1050 North “until the Director determines in writing that the interests of the public and affected landowners will be protected.” In December of 2014, information was submitted regarding a Temporary Road Closure Agreement between Knox County and Triad Mining, Inc. for 2200 feet of Held Road, County Road 900 East, located in Township 5 North, Range 8 West Sections 3 and 4. Thereafter, Condition #2 was again modified and limited to the right-of-way of County Road 1050 North[9]. Ex. T.
Cool Breeze Operation and Mining Involvement
44. Mike Held was the President of Cool Breeze when mining began on Cool Breeze property. See testimony of Brian Held (“B. Held”).
45. B. Held, Mike Held’s son, is currently employed in agricultural sales at Blesch Brothers Equipment Company. B. Held is the current President of Cool Breeze and has lived on Cool Breeze property his entire life, 49 years. B. Held has been involved in the farming operation for approximately 39 years. Id.
46. Dena Held (“D. Held”), B. Held’s wife, is employed by the Children and Family Services, Knox County Special Advocate Program, through Knox County Superior Court 1. D. Held has been involved as Cool Breeze management since 2014. D. Held is the current Secretary of Cool Breeze. As Secretary, her primary duty is to act as an assistant to the President. In addition, as a part of a team, D. Held maintains corporate records, including some reclamation records. D. Held does not participate in some business aspects of Cool Breeze management and does not maintain bond release and bond release inspection documentation. D. Held has lived on property owned by Cool Breeze since 1993. See testimony of D. Held.
47. Some or all property owned by Cool Breeze is located in Township 5 North, Range 8 West, in Knox County, Indiana. D. Held identified various tracts of Cool Breeze property as the “Home Place”, “West of the Road”, the “Alfalfa Field”, and “Koenig Place”. These tracts, including portions of the tracts that are not subject to a bond release request, and properties not owned by Cool Breeze, are identified within satellite images admitted as Exhibits F and N and aerial photographs admitted as Exhibit K. Id. and Ex. F, K and N.
48. Part VII of the Permit, amendment #S-311-3, states that Permit amendment #S-311-2 included mining and reclamation of approximately 182.2[10] acres owned by Cool Breeze known as the Alfalfa Field, the eastern portion of the West of the Road and the Koenig Place, all found within mapping locations identified as 3-5-8-12[11], 4-5-8-08 and 10-5-8-02. Permit amendment #S-311-3 added approximately 127.1[12] acres owned by Cool Breeze known as the western portion of West of the Road and the Home Place, at mapping location 4-5-8-08, and the Koenig Place, at mapping location 10-5-8-02. [13] See Exhibit 1, Part VII, Attachment VII.A.1.a, and Ex. G.
49. Mike Held, on behalf of Cool Breeze, signed a portion of the Permit, amendment #S-311-3. See Ex. 1, Attachment VII.A.1.g.
50. On or about 2005 or 2006, mining began on leased property owned by Cool Breeze. Various portions of Cool Breeze property were mined during different time frames. See testimony of Boyle.
51. Consistent with the leases between Cool Breeze and Triad, Cool Breeze was paid a royalty of $1.50 per ton for coal mined, in addition to other compensation. Approximately 750,000 tons of coal were removed from Cool Breeze property. While the lease agreements allowed Triad the right to farm the property and to harvest the crops, Triad allowed Cool Breeze, through its tenant, to plant and harvest crops and to retain crop proceeds. Id. and Ex. E at p. 5.
52. Reclamation efforts by Triad began in 2006 or 2007. See testimony of Boyle.
53. Triad’s reclamation efforts included soil replacement for areas that were actually mined, grading and the installation and repair of tiling and terracing. See testimony of D. Held.
54. Triad’s Freelandville Mine surface coal mining operations ended in 2010. See testimony of D. Held.
55. In 2013 and 2014, discussions between landowners and Triad resulted in a determination to leave some property owned by Cool Breeze “idle” to afford Triad the opportunity to retain a future ability to mine the area. The idle ground is not subject to any current bond release request but is adjacent to property that is included in the bond release request. Id.
Department Inspection and Bond Release
56. The Citizen’s Guide states, “[r]eclamation specialists monitor mining activities from the time the permit is issued until the last acre is reclaimed and the final bond is released.” Supra at p. 3.
57. Brad Loveless (“Loveless”) obtained an associate’s degree from Vincennes University, a bachelor’s degree from Indiana University in telecommunications and a bachelor’s degree from Indiana University in geology. Loveless has been employed within the Department’s Division of Reclamation for over 25 years and is currently employed as a Reclamation Planning Specialist. In his current position, Loveless conducts inspections of active and reclaimed sites, Loveless also conducts permit and permit revision reviews. In his current role, Loveless typically participates in three or four bond release requests per year. In 2017, Loveless performed as the assigned “Specialist” for seven bond release requests. See testimony of Loveless.
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58. Loveless began conducting inspections for the Freelandville Mine in October of 2015. Although monthly inspections were required, Loveless typically conducted inspections twice a month. During his inspections, Loveless generally reviewed the discharge data from the NPDES outfalls, checked for active erosion and evaluated the progress being made toward reclamation in accordance with the reclamation plan. Id.
59. Loveless continued to conduct inspections of the permitted property following the bond release inspection, through March of 2017. Id.
60. B. Held confirmed his awareness of monthly inspections and quarterly full inspections by Department staff. See testimony of B. Held.
61. The Citizen’s Guide identifies the general steps required for a bond release request, including an application for bond release, publication of the request, Department inspection and the Department’s evaluation of the application. The Citizen’s Guide states, “[a]n operator must formally apply for the release of all or part of the bond or deposit.” Supra at p. 10.
62. Bond release procedures typically involve a request for bond release for areas reclaimed and ripe for release, regardless of whether the areas adjacent to or near the reclaimed area are also included in the bond release request for the phase being requested. See testimony of Boyle.
63. There are three phases of bond release. Phase I bond release is completed by the bonding company, Phase II and Phase III bond releases are completed through a group of companies known as the “bond pool”. Id.
64. The majority of bond funds are reserved for Phase I bond release to ensure that the “hole has been filled up.” See testimony of Loveless. At this phase, rocks discovered in the permitted area are considered, as is the sufficiency of soil depths and a determination concerning initial seeding as a required erosion control measure. Id.
65. A Phase I “grading” bond release for prime farmland requires:
a. a minimum of 48 inches of soil material,
b. grade that is not over 6% and
c. that the area is stable and free of erosion.
See testimony of Boyle.
66. Loveless reviewed Bond Release #10 in 2008, on a total of 201.5 acres. At the time of that request, Mike Held expressed concerns that the soil depths on Cool Breeze property did not meet the required 48 inches, because he had encountered rocks. Multiple probes confirmed adequate soil depths. Thereafter, Phase I bond release on 73.1 acres of property owned by Cool Breeze was approved without objection by Cool Breeze. See testimony of Loveless and Ex. 3.
67. B. Held was involved with one or more Phase I bond releases of Cool Breeze property. At the time of those bond release requests, B. Held brought concerns to the attention of Triad and the Department. See testimony of B. Held.
68. D. Held has no knowledge of bond release requests or inspections completed in 2006, 2008 and 2011 for Cool Breeze property. See testimony of D. Held.
69. Phase I bond release for all Cool Breeze property was completed through multiple bond release requests that were submitted and approved by the Department over a period of time. See testimony of Boyle.
70. Phase II bond release, commonly known as a “revegetation” release, requires a demonstration that the established target yield for prime farmland has been met for one year. Id.
71. For Cool Breeze bonded areas identified as locations 3-5-8-02, 3-5-8-12 and 4-5-8-08, the target yield for corn was established at 119.5 bushels per acre. In 2013, the actual whole harvest yield for corn on those locations, totaling 82 acres of restored prime farmland, yielded 193.0 bushels per acre. See Ex. H, p. 5.
72. For Cool Breeze bonded areas at location 10-5-8-02, the target yield for wheat was established at 46.1 bushels per acre. In 2013, the actual whole harvest yield for the location, totaling 35.6 acres of restored prime farmland, yielded 87 bushels of wheat per acre. Id at p. 6.
73. For Phase II bond release purposes, Loveless determined that productivity was met as required for a prime farmland postmining land use. See testimony of Loveless and Ex. I.
74. Phase II bond release for Cool Breeze property was completed through multiple bond release requests that were submitted and approved by the Department over a period of time. See testimony of Boyle.
75. Cool Breeze filed no petition for administrative review of the most recent Phase II bond release request by Triad that was approved by the Department through the same document as the Phase III bond release request addressed in this proceeding.
Phase III Bond Release
76. Phase III bond release is also known as “final” bond release. For prime farmland, in addition to the single year’s yield that is necessary to qualify for a Phase II release, two additional crop years must result in crop production that meets or exceeds the target yields established in the reclamation plan. At this phase, rocks in the replacement soil material could become an issue. See testimony of Boyle.
77. In addition to the requirements for crop yields on prime farmland, all I-SMCRA requirements must be met in order to qualify for Phase III bond release. Id.
78. Typically the entity requesting bond release submits an advance map to the Department’s Division of Reclamation identifying the areas on which release is being requested. The submission is commonly followed by a site visit by Department staff, accompanied by a mining representative. Thereafter, any applicable revision to the request is included within the official bond release request. See testimony of Loveless.
79. Triad’s original Request for Bond Release #13, for Permit, #S-311, submitted in July of 2016, requested Phase III bond release on 785.9 acres. Triad’s request included required information, such as the mailing list and an example of the notification letter sent to affected landowners, a notice published in the Vincennes Sun Commercial with the Publisher’s Affidavit confirming the publication of the notice, and crop yield information and certifications. See testimony of Boyle and Ex. H.
80. Property owned by Cool Breeze for which Phase III bond release was originally requested, 116.6 acres, is located within Sections 3, 4 and 10 of Township 5 North, Range 8 West, in Knox County, Indiana. See Ex. G.
81. When an official bond release request is submitted to the Department, the Division’s Bond Coordinator conducts a completeness review that includes verification that appropriate individual notifications as well as publication of a notice of the request in a local newspaper has been completed. Once the Department determines that the request is complete, the bond release request is scheduled for a site inspection. Within 30 days, an inspector sends out notice of the inspection date to necessary persons and conducts the inspection. See testimony of Loveless.
82. Cool Breeze received a letter from the Department notifying Cool Breeze of Triad’s request for Phase III bond release on portions of Cool Breeze property. See testimony of D. Held.
83. Prior to the Department’s bond release inspection, B. Held reported his belief that some portions of Cool Breeze were insufficiently reclaimed to warrant bond release due to the presence of depressions and erosion. See testimony of Boyle.
84. On August 3, 2016, a bond release inspection was conducted that began with a meeting at the mine office. D. Held and B. Held attended the meeting, along with other property owners, Boyle and Loveless. At the meeting, D. Held and B. Held raised concerns regarding bond release, including rocks they observed in the topsoil, drainage issues and erosion that they attributed to runoff. In addition, unaware of how the productivity determinations had been verified, B. Held and D. Held raised concerns regarding the presence of one or more haul roads and the impact of those roads on crop productivity. D. Held requested the withdrawal of all property owned by Cool Breeze from the bond release request. See testimony of D. Held.
85. Following the meeting at the mine office, on August 3, 2016, a site inspection for bond release was completed for the property on which bond release had been requested, with B. Held, Boyle, Loveless and Kevin Geier present. D. Held did not participate in the site visit inspection.
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86. Kevin Geier (“Geier”) is employed by the Department’s Division of Reclamation as a Field Supervisor. Geier supervises six Division of Reclamation Inspectors. Geier has been employed by the Department since 1978, first as an inspector, after earning a bachelor’s degree from Purdue in Wildlife Science. In 1990, Geier was promoted to his current role and is a supervisor to Loveless. Geier has been designated as a Master Instructor through the Federal Office of Surface Mining Reclamation Enforcement and assists with federal technical training programs on principles related to soils, revegetation, erosion, sediment control, SMCRA field principles and enforcement procedures. Geier has participated in the evaluation of approximately 100 bond release applications. See testimony of Geier.
87. Geier was in attendance at the bond release inspection on August 3, 2016, when B. Held reported drainage control concerns and identified some terraces that B. Held determined were either not functioning as intended or designed or that could be modified to be even more effective. During the inspection, B. Held also identified areas of depression that were ponding water and erosional features that were in need of attention. Id.
88. At the time of the bond release inspection, crops were in the fields. The timing of an inspection that occurs when crops are in the fields could potentially hamper an ability to observe erosion. See testimony of Boyle and Loveless.[14]
89. During the bond release inspection, Loveless reviewed documentation concerning the hydrologic balance of the area. Loveless reviewed surface water quality records for compliance. Loveless reviewed data collected during quarterly monitoring of ground water wells and determined that there was no impact on ground water quality. Loveless reviewed information submitted by Triad to the State regarding the discharge of runoff, including rainfall, for the permitted area that was collected in engineered ditches and sediment ponds, engineered for the number of acres involved in the watershed. Loveless then reviewed his own documented historical observations and compared his data with his field observations for consistency. See testimony of Loveless and Ex. I.
90. Based on his record review and observations, Loveless determined that permitted land was not contributing solids to the stream flow or runoff outside the permit area. See testimony of Loveless. No credible contrary evidence was presented by any Party.
91. B. Held asked Loveless to remove some areas owned by Cool Breeze from the bond release. While some areas of concern were difficult to observe during the inspection held on August 3, 2016, following his consideration of B. Held’s concerns, Loveless determined that all of the areas B. Held asked to be withdrawn from the bond release should be withdrawn from bond release. See testimony of Loveless and B. Held.
92. Loveless determined that some areas of depression, areas of active erosion due to a drainage way in a field, and erosion in a diversion ditch that forced water into a field should be withheld from bond release. Specifically, for location 3-5-8-12, a ponding depression was found and it was determined that a terrace on adjacent property should be reshaped. For location 4-5-8-08, an area of depression, acreage north of a ditch and a small area subject to flooding were withdrawn from the bond release request. For location 10-5-8-02, a depression and associated drainage way were withdrawn from the request as well as a narrow strip of ground parallel to Hartzburg Road. See testimony of Loveless and Ex. I., p. 2.
93. The areas held out from the bond release included areas that could not be farmed, including an area that had cattails growing on it and an area that presented with a significant gully. See testimony of D. Held.
94. After the crops were harvested, Loveless inspected the property owned by Cool Breeze, accompanied by B. Held. During the inspection, Loveless determined that there was an additional depressed wet area that remained within the bond release area. Loveless determined that the size of the area, smaller than 750 square feet, was de minimis and that even if the identified depression impacted crop yields, the yields exceeded target yields and did not require the area to be withdrawn from the bond release request. See testimony of Loveless. Based on production evidence and the total acreage being considered, the area is determined to be de minimus.
95. After the bond release inspection, B. Held also showed Loveless a culvert on Cool Breeze property that was filled with water. This additional information did not result in any further exception in the revised bond release request. See testimony of B. Held.
96. In total, 8.8 noncontiguous acres were withheld from bond release, including one acre that was excepted from bond release on the Home Place, one acre from the Alfalfa Field, two acres (the sum of 1.7 and .3 acres) from the West of the Road and 4.8 acres (the sum of 3.5 and 1.3 acres) from the Koenig Place. See testimony of D. Held, B. Held, Ex. I and Ex. G.
97. Triad has a plan for full reclamation of the 8.8 acres withdrawn from the bond release request. Within location 10-5-8-02, a 3.5 acre tract, Triad has discussed a plan in install additional tiling and one or more dry dams to cure erosion found on the tract caused by heavy rainfall in 2016. For the 1.3 acre tract withdrawn from the bond release request, Triad has initiated the addition of fill material along the road to facilitate drainage along the ditch. At locations 3-5-8-02, 3-5-8-12 and 4-5-8-08, as time and equipment allows, Triad plans to fill two depressed, wet, one acre areas with topsoil. For the 1.7 acre and 0.3 acre areas that are adjacent to one another, during the fall of 2017, Triad removed a number of beaver dams but has not yet determined an effective cure to fully reclaim that area. Triad has delayed a determination regarding how to address any area on which it is considering additional mining to the north. See testimony of Boyle.
98. A wet spot is not erosion. Standing water on reclaimed soils could be the result of subsidence that has created one or more depressions in the ground. Id.
99. When mining occurs there is a 30% “swell factor” and it may take years for the spoil to settle. The position of the Department is that standing water on property reclaimed following a surface mining operation is typically the result of settling that can be cured by adding fill, not terracing. See testimony of Loveless.
100. A revised map identifying property requested for bond release, dated August 12, 2016, was prepared and presented to the Department. See testimony of Boyle and Ex. G, p. 2 and Ex. 2.
101. A revised bond release request, dated August 14, 2016, was for 771.4 acres, 107.8 of which were owned by Cool Breeze. Triad’s revised bond release request, states “8.8 acres of Prime cropland (PFL) has been removed from the Cool Breeze Farms properties,…Ann Dawson Dix property…MM&G Farms…[for] some drainage issues that will be resolved once the crops have been removed.” See Ex J.
102. Loveless issued the Department’s bond release inspection report on September 1, 2016, that includes the following Department conclusions:
a. Pertaining to hydrologic balance and surface water, Loveless found that “terraces, diversions, and other surface water control structures [are] located and functioning as designed in the plan of reclamation”. See Ex. I, p. 2.
b. For the Phase III release, Loveless found that “vegetation requirements and site conditions [are] consistent with the approved plan of reclamation and 312 IAC for…rills and gullies have been eliminated…[and] the area is adequately stabilized”. Id. at p. 4.
c. Loveless stated in his inspection report that the acres on which a bond release request was evaluated “are stable and free of significant erosion” and wet spots have been eliminated, except for the areas withdrawn from the bond release request. Id. at p. 4.
103. As to surface and ground water monitoring, Loveless reviewed hydrologic balance information, including baseline data collected prior and subsequent to mining operations and monthly NPDES reporting data for the 12 months prior to the review to determine compliance with effluent standards and concluded that “no pollution of the surface and groundwater outside the permit area has occurred and that adverse impacts to the hydrologic balance have been avoided.” See testimony of Loveless and Ex. I, p. 8.
104. Within the Phase III bond release request dated July 12, 2016, prime farmland crop production for the second and third crop years[15], as certified by the Cool Breeze’s tenant for whole field harvest, exceeded the target crop yields for property under bond owned by Cool Breeze.
a. For 35.6 acres identified as location 10-5-8-02, the second crop year was for corn in 2014. The target yield was 106.2 bushels of corn per acre and the actual yield was 200 bushels per acre. The third crop year was for beans in 2015. The target yield was 36.9 bushels per acre and the actual yield was 45 bushels per acre. See testimony of Boyle and Ex. H.
b. For locations 3-5-8-02, 3-5-8-12 and 4-5-8-08, totaling 80 acres, the second crop year was for corn in 2014. The target yield was 119.5 bushels of corn per acre and the actual yield was 203 bushels per acre. The third crop year was for beans in 2015. The target yield was 41.6 bushels of beans per acre and the actual yield was 45 bushels per acre. Id.
105. For Phase III prime farmland bond release purposes, Loveless determined that productivity met the required 100% success standard for prime farmland post mining land use. See testimony of Loveless and Ex I.
106. D. Held and B. Held confirm that, consistent with the requirements for bond release, based on the affidavits prepared and presented by the Cool Breeze tenant, all target yields were met and, in fact, exceeded. The crop yields reported and confirmed were for whole fields, including the 8.8 acres that were withdrawn from Triad’s revised bond release request. See testimony of D. Held and B. Held.
107. The slope of the Cool Breeze prime farmland does not exceed 6%. See testimony of D. Held, Loveless and Ex. I.
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108. Neither Loveless nor Boyle observed cattails on property owned by Cool Breeze included within the revised bond release request. See testimony of Loveless and Boyle.
109. Loveless concluded that he had observed no facts that would present him with a reason to deny Triad’s revised bond release request. Loveless determined that the all surface coal mining reclamation activities had been completed, as required. As a result, the Department approved Triad’s revised Phase III bond release request. See testimony of Loveless and Ex I.
Cool Breeze Objection-Rocks
110. D. Held and B. Held dispute that Triad has completed all required reclamation activities upon property owned by Cool Breeze within areas commonly known to the Helds as the Home Place, West of Road, Alfalfa Field and Koenig Place.[16]
111. In the Alfalfa Field, D. Held observed rocks, including some rocks that were similar in size to a softball or a volleyball. D. Held has picked up the rocks she has seen, except for a single rock in the Alfalfa Field that was too large for her to lift. D. Held saw rocks of various colors. However, while D. Held asserted that the colors could be significant, D. Held did not provide evidence to show any significance upon bond release. See testimony of D. Held.
112. D. Held disputes that the topsoil was replaced as required. The sole basis of her position is that she has observed rocks in the soil and she does not believe that topsoil has rocks in it. Id.
113. B. Held also observed rocks in the topsoil. B. Held did not observe rocks in the topsoil prior to mining. See testimony of B. Held.
114. Despite numerous inspections, Loveless did not observe an inappropriate quantity or size of rocks on the property owned by Cool Breeze in the revised bond release request. See testimony of Loveless and Ex I.
115. Boyle observed rocks on property owned by Cool Breeze that were “standard” in size. See testimony of Boyle.
Cool Breeze Objection-Wet areas
116. D. Held has observed what she believed to be wet spots and depressions within property on all four fields owned by Cool Breeze in the revised bond release request. See testimony of D. Held.
117. D. Held opines that one or more wet areas on Cool Breeze property were caused by rills and gullies, specifically, the one acre tract withheld from the Home Place, location 4-5-8-08. D. Held’s conclusion is contrary to the credible determination by Loveless that rills and gullies have been eliminated on Cool Breeze property in the revised bond release request. See testimony of D. Held and Ex. K-18. D. Held did not provide evidence to identify any specific rill or gully that could have caused a wet area. Based on the evidence presented, any conclusion that a rill or gulley caused a wet area would be scarcely more than speculation. Cool Breeze presented insufficient evidence to support a factual conclusion that a specific rill or gully caused a wet area that is covered by the revised bond release request.
118. D. Held alleges that drainage and terracing required by the Permit are not functioning in one or more undefined areas, causing wet holes. See testimony of D. Held. D. Held presented no evidence concerning specific terracing that she determined to be the cause of any specific wet area. She also failed to identify terracing with specificity that is improperly functioning or functioning in a way contrary to its design. The position of D. Held conflicts with other credible evidence from Loveless regarding the functioning of surface water control structures, including terraces.
119. D. Held identified a wet area on the Home Place, location 4-5-8-08, as an area included in the revised bond release request. See testimony of D. Held and Ex. K-17[17].
120. Clevie Bennett (“Bennett”) has been employed as an Engineering Technician with the Knox County Soil and Water Conservancy District (“SWCD”) for over five years.[18] In his current position, he surveys and designs farm erosion control plans and works with the U.S. Department of Agriculture (“USDA”) on Natural Resources Conservation Service (NRCS) programs. Bennett is not a registered professional engineer (“P.E.”) but works under the State Engineer in Indianapolis. Bennett graduated from Western Kentucky University in 1981 with a bachelor’s degree in Civil Engineering Technology and worked in the heavy highway construction industry for a number of years prior to employment with the Knox County SWCD. See testimony of Bennett.
121. Bennett conducted a site visit to Cool Breeze property on October 12, 2016, accompanied by Tom Held[19], as requested by Troy Hinkle and Tom Held. Bennett, without the benefit of designs for installed tile or structures, prepared recommendations for new structures to promote enhanced drainage on three Cool Breeze sites. Based on the survey elevations that Bennett gathered and his observations, he prepared a report[20] following his onsite visit. The report, dated November 9, 2016, was sent to Tom Held, District Conservationist, Knox County USDA/NRCS. See testimony of Bennett and Ex. P.
122. Bennett conducted a site visit to the Alfalfa Field and identified the site as Site #3. Bennett observed a wet spot in the field near a tile outlet. Bennett attributed the wet spot to the tile not having sufficient grade and suggested that the installation of new tile could offer a steeper grade. Bennett used GPS points to determine elevations but did not utilize instrumentation to confirm the depth or grade of the tile. Bennett did not review the reclamation plan and did not review any design for the tile that had been previously installed in reaching his conclusions. It is unclear from the evidence presented if the area referred to by Bennett as Site #3 is a part of the acre that was removed from the Alfalfa field following the original bond release request. Id.
123. Bennett referred to USDA guidance on ephemeral gully control on cropland. The guidance recommends against disking or smoothing ephemeral gullies and instead recommends tillage practices and vegetative control measures, with structural practices included as a more intrusive alternative. See testimony of Bennett and Ex. U[21]. It is noted that USDA guidance would have limited application to surface mining reclamation and would need to be consistent with the reclamation plan and the requirements of I-SMCRA to be a consideration relevant to the bond release request. In addition, USDA guidance may be limited in applicability to depressions for reclaimed property with a postmining approved land use of prime farmland and property on which depressions result from spoil settling.
Cool Breeze Objection-Culverts
124. D. Held alleges that improper installation of two culverts on Held Road impacts drainage on Cool Breeze property for which Triad has sought bond release. See testimony of D. Held.
125. During the site visit by Bennett in 2016, Bennett observed standing water at Site #1 and observed ponding on the north side of Held Road at an 82 inch culvert. Bennett concluded that the slope of the property was adequate to allow for drainage on the farm. Bennett also concluded that the culvert presents with a negative slope and was installed backwards. Bennett proposed the installation of a water and sediment control basin (“WASCOB”), also referred to by Bennett as a dry dam and tile system to enhance drainage in the area. Bennett did not identify whether Site #1 was a part of the property identified within the revised bond release request. See testimony of Bennett and Ex. P. Other evidence supports a conclusion that the area is not a part of the property covered by the revised bond release request.
126. For an area designated by Bennett as Site #2, Bennett discovered a current WASCOB system in place. Bennett observed that a 24 inch culvert was submerged in water on the west side of Held Road and proposed a lowering of the culvert to promote positive drainage. Id. Bennett did not identify whether Site #2 was a part of the property identified within the revised bond release request. Other evidence supports a conclusion that Site #2 is a part of or adjacent to property known as Home Place and covered by the revised bond release request.
127. Jeff Kocher (“Kocher”) has been employed by C.F.C.O., Inc. (also referred to as Complete Farm Conservation Operation) since 1997. C.F.C.O., Inc. is a contracting company that performs excavating, field drainage and design preparation for conservation and erosion control. Kocher attends workshops regarding current practices. He also attends workshops on the use of computers and design techniques. See testimony of Kocher.
128. At the request of the Helds, Kocher prepared a report, dated April 19, 2017, to address concerns reported to him by B. Held. Kocher conducted a site visit and determined that the “ditch channel downstream of the culvert [under Held Road] is higher than the culvert invert [resulting in] the existing 12″ tile line not being able to drain correctly.” Ex. Q. Kocher opined that the “only cure is to lower the ditch channel on down stream side of the culvert, which is on mine property.”[22] Id. It is determined that the 24 inch culvert referenced by Bennett is the same culvert identified by Kocher to be 30 inches.
129. Kocher also identified a potential issue involving an eight foot culvert under Held Road and opined that the culvert could be set too high to supply adequate drainage for the land upstream. See Ex Q.
130. Hand drawn markings on a map included within the “Cool Breeze Farms, Inc. Map Reference Guide” admitted as Petitioner’s Exhibit F mark the locations of an 84 inch culvert and a 24 inch culvert under Held Road. Based on the map indicators, the larger culvert is not on or adjacent to Cool Breeze property on which the revised bond release has been requested. See Ex. F, p. 5. Based on the aerial photographs of the Home Place, admitted as Exhibit K, the small culvert adjacent to the Home Place does not reveal an impact upon property subject to bond release. See Ex. F and Ex. K.
131. As to County Road 900 East, also known as Held Road, Loveless reviewed the agreement between Triad and the Knox County and determined that the road is located where it is supposed to be and it is functioning as a road. The culvert under Held Road is not a part of the engineering design in the Permit. The culverts were installed at the discretion of the county. The county, as the public road authority, approved the release of a performance bond issued by the county, specifically for the road project. See testimony of Loveless, Ex. I and Ex. T.
132. Triad installed culverts under Held Road and Boyle has no reason to dispute that one or more culverts were installed backwards. Knox County inspected the culverts and released the bond issued for the closure of the road following “full and complete performance” of the project. See testimony of Boyle and Ex. T, p. 4.
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Cool Breeze Objection-Drainage and Soil Stability
133. B. Held acknowledges that all land suffers from ongoing erosion. B. Held is aware that, prior to mining, systems were in place to control erosion on property owned by Cool Breeze. See testimony of B. Held.
134. Mike Held discussed a variety of Cool Breeze conservation plans[23] for multiple Knox County, Indiana tracts that included some soils designated as highly erodible soils, with the USDA, Soil Conservation Service. Plans, or portions of plans with dates ranging from 1969 to 2014, identify various erosion control methods including crop rotation and tillage systems. Plans also identify the potential installation of structures, including the construction of terraces, WASCOBs, grassed waterways, a diversion, a rock lined chute and inlets with underground outlets. It is unclear which, if any, of the specific plan projections were actually completed and which fields, if any, addressed within the plans are currently subject to bond release. Ex. S.
135. Minimal tillage, alternating crops planted and vegetative control measures, such as planting a cover crop, will generally assist in reducing crop land erosion, including rills, small channels caused by one or more rain or wind events and gullies, deeper channels in the soil. Ex. U.
136. B. Held does not recall seeing any rills and gullies on Cool Breeze property, pre-mining. By virtue of some Cool Breeze acreage being identified as having “highly erodible soils”, a reasonable inference is that rills or gullies did present on those acreages pre-mining, regardless of B. Held’s observation of such features. See testimony of B. Held and Ex. S.
137. Loveless noted that for a Phase III bond release, property should be free from “significant” erosion, and acknowledged that crop land is always expected to have some sheet erosion because there is no requirement for permanent vegetative cover. Loveless noted that reduced tillage is beneficial to reducing erosion and offered that erosion becomes a concern for the Department, for purposes of bond release, when the erosion interferes with the designated postmining land use. See testimony of Loveless.
138. Even though B. Held acknowledges that the slope does not exceed 6% on Cool Breeze property, B. Held believes that the length of the slope is an important consideration because a longer slope allows for water to pick up speed. See testimony of B. Held.
139. D. Held believes the soil is washing away due to inadequate slope and erosion control structures that were installed. See testimony of D. Held. D. Held provided no evidence of improper design or installation for any existing erosion control structure.
140. Boyle determined, based on his experience with reclaimed property, that terracing previously installed on Cool Breeze property for drainage purposes was functioning appropriately on property included within the revised bond release request. See testimony of Boyle. The position of Boyle is consistent with the inspection conclusions of Loveless.
141. Without specificity, D. Held asserted that rills and gullies appear within the Home Place, Koenig Place, West of Road and Alfalfa Field. D. Held identified one or more gullies in the photograph admitted as Exhibit L-1 and her belief that the gullies were the result of the improper functioning of one or more terraces. Areas in the aerial photograph admitted as Exhibit L-2 reflect both Cool Breeze property and property belonging to Triad. It is unclear if any gully referenced is included in the revised bond release request or impacts property in the revised bond release request. See testimony of D. Held and Ex. L.
142. Triad extended efforts to repair WASCOBs that experienced overflow during the reclamation period. B. Held attributes post mining overflow to tile not being large enough. See testimony of B. Held. B. Held provided no evidence of improper design or installation for any specific existing erosion control structure.
143. B. Held asserted that terracing was not completed appropriately, resulting the formation of a ditch. Id. Regardless of the void in scientific support for his assertion, B. Held failed to identify a specific location for the terracing or the ditch.
144. B. Held believes that tile present prior to mining was torn and not replaced and WASCOB’s were removed and not replaced on land that was not mined but was disturbed by the surface mining operation. He concluded that this caused inadequate drainage. Id. B. Held presented no evidence to support his assertion that tiles were torn by the surface mining operation or that WASCOBS were removed from any specific area of Cool Breeze property on which bond release was requested. In addition, B. Held presented no evidence to show any scientific causal connection between the location of any specific concern and a specific structure.
145. B. Held acknowledges that some terraces and WASCOBS are currently in place but he thinks there are not enough of them. Id.
146. Bennett observed rills and gullies during his site visit. Bennett did not identify any specific area on which he observed rills or gullies that was not withdrawn from the revised bond release request. See testimony of Bennett.
147. Without the benefit of applicable designs for existing structures, Bennett’s report[24] on the area designated by Bennett as Site #3, concluded that dry dams are not functioning because the “basins do not have the ability to store enough water” and would “need to be realigned to better fit the farm operation.” He suggested rerouting tile to a different ditch. Bennett’s report did not identify any approved structure that was not installed and did not identify any installation inconsistent with an approved design. Bennett’s report and recommendations were not checked or approved by a registered professional engineer. Id. and Ex. P.
148. Bennett was not involved with nor did he review the reclamation plan relevant to the Cool Breeze property on which bond release was requested. Bennett has no opinion on whether reclamation was completed in accordance with the applicable reclamation plan. See testimony of Bennett.
149. B. Held asked Kocher to develop a conservation plan for erosion control on Cool Breeze property known as the Koenig Place. Kocher conducted a site visit in March of 2017.
a. Kocher observed poor soil types and rocks at or near the surface of the soil.
b. Kocher observed a WASCOB that he determined was not functioning properly. Kocher did not report the basis on which he rested this conclusion and this conclusion conflicts with other credible evidence.
c. Kocher’s recommendation included the installation of additional tile, one or more berms and terraces.
d. Kocher did not review the reclamation plan for the property.
e. Kocher identified the slope of the property to be less than 6%.
See testimony of Kocher.
Cool Breeze Objection-Erosion and Hydrologic Balance
150. As to issues related to the area’s hydrologic balance, D. Held believes that Triad’s amendment to the soil in one or more areas of concern has washed away and has not cured runoff concerns. See testimony of D. Held.
151. Boyle disputes that fill previously added to permitted areas has washed away. See testimony of Boyle.
152. Following the withdrawal of some areas from the bond release request, Loveless evaluated the remaining acreage subject to the bond release request. For surface water concerns, Loveless concluded that tiling, terracing, diversions and other surface water structures were in place to control drainage and erosion and were functioning as designed. See testimony of Loveless and Ex. I.
153. The body of water prominently depicted within in Exhibit L-46 is Pollard Ditch. Pollard Ditch, the property adjacent to Pollard Ditch and property owned by Triad are not included within the revised bond release request. See testimony of D. Held.
154. B. Held has observed Pollard Ditch having no positive flow. D. Held has observed sediment on her boots while standing on Cool Breeze property. See testimony of B. Held and D. Held.
155. Pollard Ditch receives from Cool Breeze property as well as other upstream areas that are not under bond. The Pollard Ditch is designed to capture sediment and for that reason, occasionally requires the removal of sediment. Areas upstream from Cool Breeze, including areas that may be unrelated to this bond release, could be adding to the sediment load on Cool Breeze property, as well as sediment released into Pollard Ditch. See testimony of Loveless.
156. Triad determined that the required use of the best technology available to prevent suspended solids from stream flow and to minimize erosion involved the installation of sediment basins or ponds and silt structures, not WASCOBS, for the Freelandville mine. See testimony of Boyle.
157. Bennett is aware that there are storm water runoff plans but is unaware of any storm water runoff plan for the surface mining reclamation at issue in this case. While Bennett is aware that monitoring occurs consistent with NPDES requirements, he took no effluent samples during his site visit to determine the total solids suspended in water. Bennett did not gather that data because he did not believe it would be necessary to fulfill the task he was assigned, to design water control structures. See testimony of Bennett and Ex. P.
158. Donald Raymond McCormick II (“McCormick”) is the President of McCormick Farms, Inc. McCormick obtained an associate’s degree from Vincennes University and an Agricultural Science degree from Colorado State University. McCormick served on the Commission’s Advisory Council from 1990 until 2005 and was a member of the Commission from 2003 until 2005. McCormick is currently on the Board of Directors for the National Association of Soil and Water Conservation Districts. McCormick currently advocates for the Indiana Wildlife Foundation and the Nature Conservancy promoting various conservation efforts. Most recently, he has focused his efforts in areas related to soil health. See testimony of McCormick and Ex. W.
159. McCormick believes generally that all Indiana soil is highly vulnerable to erosion and that there is high erosion even on the best cared for lands. McCormick presented with a passionate concern for the loss of nutrients from Indiana soils. An unstainable loss of nutrients resulting from soil erosion is a major concern for him, including the development of a Hypoxia Zone in the Gulf of Mexico. McCormick promotes a “sweep” of practices to control erosion. For areas where erosion due to water is extreme and no other practices are able to keep it in check, he promotes the installation of WASCOB systems. McCormick offered his awareness that having a cover crop could assist in erosion control, along with other systems. See testimony of McCormick.
160. Generally, McCormick believes that, due to an impermeability of reclaimed soil, rain is not absorbed into the soil resulting in accelerated water flow and erosion, followed by the carrying of sediment into streams. Because of his belief, McCormick would require WASCOBs as the minimum erosion control for reclaimed soils. Id.
161. At the request of the Helds, McCormick toured Cool Breeze farms approximately one and one-half weeks prior to the administrative hearing. It was raining at the time McCormick took his tour. During the tour, McCormick observed rill and gully erosion on the slopes of hills, puddled water and sediment. Id.
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162. McCormick determined that the soil he viewed during his tour of Cool Breeze property had a heightened impermeability. Id. However, McCormick provided no specific scientific support for his conclusion related to Cool Breeze property that is subject to bond release.
163. McCormick did not survey the grade of the property, took no water or soil samples, did not review the amount of topsoil present on the property, did not review the crop yields on the property and did not review the reclamation plan. Id.
164. McCormick acknowledged that he is no expert in what it takes to reclaim property where coal mining has occurred and he is not very familiar with reclamation rules. McCormick believes that coal mining, generally, has resulted in long term economic decline in southern Indiana and an overall unfamiliar landscape. Id.
165. McCormick does not believe that areas can be separately repaired and analogized reclaimed property to the health of a human body. McCormick supports only a whole system approach, in addition to ongoing water monitoring systems. Id. It is unclear if his whole system approach would coincide with property ownership boundaries.
166. D. Held generally asserts that erosion of the land and improper sediment runoff impacts wildlife, the quality of water in the general area and the whole ecosystem. See testimony of D. Held. D. Held provided no specific example or scientific support for her conclusions regarding Cool Breeze property subject to bond release.
Cool Breeze Objection-Piecemeal
167. Cool Breeze objects to bond release for any acreage under bond while some areas require further reclamation efforts. D. Held offers the following specific arguments against what she describes as a “piecemeal” bond release:
a. Following a bond release of reclaimed areas, D. Held fears that the remaining available bond would be insufficient to allow for the repair of smaller, unreleased areas requiring further reclamation. See testimony of D. Held.
b. On one acre of the Alfalfa Field, location 3-5-8-12, excepted from the bond release, D. Held observed cattails. Because the acre is centrally located within the tract, D. Held believes it would be inappropriate to release the remaining Alfalfa Field acreage. Id.
c. Within the West of the Road is the haul road. D. Held believes that future reclamation of the haul road could not be appropriately completed without an overarching plan that would include the entirety of Cool Breeze property that is subject to lease with Triad. Id. and Ex. L.
d. For the Home Place, location 4-5-8-08, it is noted that D. Held identified an open pit that is not within the revised bond release request. Insufficient evidence was presented to show how any that future reclamation of the open pit would impact property within the revised bond release request. See testimony of D. Held and Ex. K-20.
e. For the Koenig Place, location 10-5-8-2, no Phase III release is being requested on a 3.5 acre area that includes a gully and a stock pile. In addition, no Phase III release is being requested on 1.3 acres on the property’s boundary line that reflects erosion.
i. D. Held expressed her concern that a portion of the wet area within the 3.5 excepted area could extend beyond the excepted area. D. Held presented no evidence to show that the area that she described as wet actually extended beyond the excepted area.
ii. D. Held does not believe that corrective measures proposed by Triad would correct specific areas, unless corrective measures encompass the whole parcel. See testimony of D. Held. Aerial photographs prominently depict green areas in a field of harvested corn that are not a part of property owned by Cool Breeze and are not otherwise included in the bond release request. An aerial photograph prominently reveals a stockpile in the center of the photograph that was not originally, and is not now, a part of the bond release request.
iii. D. Held asserts that continued mining operations on property that is not part of the bond release request has resulted in increased water flow onto Cool Breeze property. D. Held provided no evidence of increased water flow onto Cool Breeze property. D. Held provided no specific evidence that any increased water flow has resulted from the continued mining operation. D. Held’s overall conclusion was that no portion of Cool Breeze property should be released until all ground belonging to Cool Breeze have been fully reclaimed. See testimony of D. Held and Ex. N.
168. D. Held does not believe that there is proper drainage in the area of the Pollard Ditch, an area that is not included within the revised bond release request. D. Held asserts that the improper drainage ties into the land owned by Cool Breeze that is a part of the release. However, D. Held did not identify any specific Cool Breeze acreage subject to the revised bond release request that is impacted by drainage issues. D. Held provided no scientific basis to support a causal relationship between any specific drainage issue and reclamation efforts.
169. A portion of a haul road near Pollard Ditch is not part of the bond release request and is near Cool Breeze property identified as “idle ground”. D. Held contends that until Pollard Ditch, idle ground, the haul road and all existing stockpiles have been fully reclaimed, bond release for Cool Breeze property would be premature. See testimony of D. Held.
170. Future reclamation of the haul road, not a part of the revised bond release request, would not impact Cool Breeze property that is within the revised bond release request. See testimony of Loveless and Ex. I.
171. Any work necessary to complete reclamation of the haul road would have no impact on property in the area released prior to completion of the road’s reclamation, including any drainage impact. See testimony of Boyle.
172. As to the stockpile of soil materials near Cool Breeze property at location 10-5-8-02, Boyle reported Triad’s intention to use those materials at a different location. The future removal of the stockpile will not impact any Cool Breeze property within the revised bond release request. See testimony of Boyle.
173. Tom Loudermilk (“Loudermilk”) is an independent contractor who moves earth and works with cattle. Loudermilk has worked with the reclamation of mined areas for over 15 years. Loudermilk has no advanced degree but has experience with surface mining operations and has participated in coal mine safety training. Loudermilk worked with Triad on the Freelandville mine but not on property owned by Cool Breeze. See testimony of Loudermilk.
174. In the spring of 2017, the Helds asked Loudermilk to provide an opinion to them regarding erosion. Loudermilk conducted a site visit and determined that there were some areas that could be addressed both on partially reclaimed and fully reclaimed areas by installing tile, terracing and by the installation of WASCOBS. Id.
175. Loudermilk concluded that areas excepted out from the bond release request could be separately repaired. However, based on his experience, he concluded that “best practice” would be to complete the work that he recommended all at once. Id.
176. Bennett prepared whole field recommendations but his recommendations could be installed piece by piece. See testimony of Bennett.
177. A whole farm conservation plan was prepared by Kocher, at the Helds’ request. The plan includes work to be done on the area that is currently a haul road and a stockpile, neither of which are included in the revised bond release request. Kocher concluded that a one stage plan, to be completed after the haul road and stockpile are no longer present, would be more efficient than a two stage overall plan. However, Kocher determined that his plan for property not currently within the bond release request could be completed at some later time. See testimony of Kocher.
178. No area withdrawn from the bond release request would require work to be done in any area within the revised bond release. The right to access areas that still need work to achieve full reclamation is provided through leasing agreements. See testimony of Boyle.
179. Problem areas in the original bond release request were identified and removed from the revised bond release request. Based on observations of the area by Geier and the concerns identified by B. Held, Geier’s credible determination is that the areas that were withdrawn can all be fully reclaimed without a need to impact other areas, including a need for additional terracing. All of the excepted areas can be made ready for release without work being done outside the specific areas held out from the revised bond release request. See testimony of Geier.
Conclusions of Law
Burden of Proof and Standard of Review
180. IC 4-21.5-3-14(c) states that “[a]t each stage of the proceeding, the agency or other person requesting that an agency take action…has the burden of persuasion and the burden of going forward with the proof of the request….”
181. The burden of demonstrating the invalidity of an agency action is on the party who asserts the invalidity. Dep’t of Natural Res. v. Peabody Coal Co., 740 N.E.2d 129, 134 (Ind. App. 2000).
182. Following a request from Triad, the Department approved Phase II and Phase III bond release for acreage that included property on which Cool Breeze maintains a property interest. Cool Breeze contests the Department’s determination to approve the Phase III bond release and has the burden in this proceeding to show that the Department’s approval is in error.
183. “[A]n administrative law judge may not…cause implementation of [IC 14-34] to be inconsistent with or not in accordance with the federal Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201 through 1328).” IC 14-34-1-5.
184. The standard of review under AOPA is generally “preponderance of the evidence”. Indiana Dept. of Natural Resources v. United Refuge Company, Inc., 615 N.E.2d 100 (Ind. 1993) and Burke’s Vinyl Seawalls & Reynolds v DNR, 11 CADDNAR 345, 347 (2008). “Preponderance of the evidence” refers to evidence which, when considered and compared with that opposed to it, has more convincing force, and which produces in the mind of the trier of fact, a belief that what is sought is more likely true than not. Bivens v. State, 642 N.E.2d 928 (Ind. 1994).
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Bond Release Timing and Procedures
185. The Indiana Surface Mining Control and Reclamation Act (I-SMCRA) is codified at IC 14-34.
186. Pursuant to I-SMCRA, a person may not open, develop, or operate a new or previously mined or abandoned site for surface coal mining in Indiana without holding a valid surface coal mining and reclamation permit. IC 14-34-3-1. The permit application must contain, among other things, a reclamation plan. IC 14-34-3-3(17) and 312 IAC 25-4-45.
187. Each reclamation plan must include a proposed use of the land following reclamation, and a description of the various steps necessary to achieve that proposed use. In addition, the reclamation plan must state the premining condition of the land covered by the permit and the productivity of the land, including the identification of any land appropriately classified as prime farmland. IC 14-34-3-12.
188. After a surface mining permit is approved and before the issuance of the permit, a performance bond is required that is “payable to the state and conditional upon faithful performance of all requirements of [IC 14-34] and of the permit....” IC 14-34-6-1(a).
189. One purpose for the posting of a bond is to “Assure that adequate procedures are undertaken to reclaim surface areas as contemporaneously as possible with the surface coal mining operations.” IC 14-34-1-3(6).
190. Triad posted a performance bond and, thereafter, conducted mining operations on property that includes property on which Cool Breeze claims an interest under the Permit, #S-311. One or more amendments to the Permit added property or amended specific terms of the Permit. The Permit was accompanied by a complete approved reclamation plan.
191. IC 14-34-6-7 through IC 14-34-6-14, as well as 312 IAC 25-5-16, control bond release related to surface coal mining reclamation.
192. Bond release is accomplished according to a schedule established under IC 14-34-6-13, with 60% of the bond available for Phase I release “[w]hen the operator completes the backfilling, regrading, and drainage of a bonded area in accordance with the approved reclamation plan….” IC 14-34-6-13(1). A Phase II bond release of an additional 25%, may be released by the Department “[a]fter vegetation is established on the regraded mined land in accordance with the approved reclamation plan….” IC 14-34-6-13(2). A Phase III bond release, also known as a “final” bond release for the remaining bond, may be released by the Department “when the operator has successfully completed all surface coal mining and reclamation activities…The [Department] may not fully release a bond…until all reclamation requirements of this article are fully met.” IC 14-34-6-13(3).
193. Bond release pursuant to I-SMCRA, under IC 14-34-6-13, is available through 312 IAC 25-5-16(e), which states, in pertinent part:
The Department may release the bond... upon a determination the reclamation covered by the bond…has been accomplished as required by IC 14-34 according to the following schedule:
(1) Phase I. After the operator completes the backfilling, regrading, and drainage control of a bonded area under the approved reclamation plan, sixty percent (60%) of the bond or collateral for the applicable permit may be released.
(2) Phase II. After the operator establishes revegetation on the regraded mined lands under the approved reclamation plan, an additional twenty-five percent (25%) of the total original bond amount may be released. No part of the bond or deposit shall be released under this subdivision if the lands to which the release would be applicable are contributing suspended solids to the stream flow or run-off outside the permit area in excess of the limitations in IC 14-34 and until soil productivity for prime farmlands has returned to the equivalent levels of yield as nonmined land of the same soil type in the surrounding area as determined from the soil survey performed under IC 14-34. If a siltation structure is to be retained as a permanent impoundment, a bond release may occur under this subdivision if provisions for sound future maintenance by the operator or the landowner are made with the department.
(3) Phase III. The department may release the remaining bond only after the:
(A) operator has successfully completed all surface coal mining and reclamation activities required in IC 14-34, this article, or the permit; and
(B) expiration of the period specified for operator responsibility in IC 14-34-10-2.
312 IAC 25-5-16(e).
194. Triad submitted a complete Phase III[25] bond release request on 785.9 acres and properly notified necessary persons of the request. The Phase III bond release request included documentation regarding productivity on post mining land use identified as prime farmland.
195. Following the operator’s notification to certain persons, as detailed in IC 14-34-6-7, within thirty days of receipt of a bond release application, the Department must conduct an inspection and evaluation of the reclamation work involved. IC 14-34-6-9. See also 312 IAC 25-5-16(d).
196. The Department timely completed an inspection and evaluation of the reclamation work associated with the bond release request.
197. Portions of Cool Breeze property upon which release would be inappropriate were identified by Cool Breeze, the determinations were supported by the Department and all of those areas were withdrawn by Triad in its revised bond release request. Despite adequate yields to qualify the areas for bond release, six separate areas totaling 8.8 acres were removed from bond release consideration by Triad. The 8.8 acres that were removed from the bond release request include areas of active erosion in a drainage way, erosion in a diversion ditch, areas of depression and one or more areas subject to flooding.
198. A revised bond release request was submitted by Triad that excluded a request for bond release on 8.8 acres, the total of all acreage identified by Cool Breeze to be inappropriate for bond release during the bond inspection[26].
199. The inspection performed by Loveless revealed that the hydrologic balance, the road placement and the estimated cost of completion of necessary reclamation activities revegetation efforts and crops yields did not support any basis on which to deny bond release for the majority of the acreage included within the original bond release request.
200. The Department determined that reclamation requirements covered by the bond were accomplished for the property requested for release. As a result, the Department approved the revised Phase III bond release requested by Triad.
ISSUE 1: Is Bond Release Approval in Error-Prime Farmland Criteria
201. As restated, Cool Breeze alleges that prime farmland requirements and criteria are not met because (1) wet holes prevent farming, and thus production, on Cool Breeze property included within the revised bond release request and (2) rocks appear in the soil.
202. “Prime farmland…means those lands that are defined by the United States Secretary of Agriculture and have historically been used for cropland.” 312 IAC 25-1-108.
203. “Prime Farmland” is recognized as a valuable resource and special requirements have been identified for the mining and reclamation of property identified as prime farmland. A surface coal mining permit that involves land identified as prime farmland must include a plan for mining and restoration that includes special consideration and care of prime farmland soils, including:
a. The proposed method for soil and material removal, locations for the separate stockpiling areas and for the replacement of topsoil, subsoil and other material.
b. Based on soil surveys, scientific data; or standard agronomic practices, the applicant using the proposed method of reclamation must demonstrate the “capability, within a reasonable time, to achieve equivalent or higher levels of yield after mining as existed before mining.” 312 IAC 25-4-102(d)(6).
312 IAC 25-4-102.
204. For prime farmland, when issuing a permit for a surface mining permit, the Department must include a finding that the operator “has the technological capability to restore the mined area, within a reasonable time, to equivalent or higher levels of yield as nonmined prime farmland in the surrounding area under equivalent levels of management in the permit…” IC 14-34-4-9. See also IC 14-34-10-2(b)(10).
205. The Permit was issued with crop production target yields that were established at the time of the permit application in the reclamation plan. See 14-34-3-12(a)(2)(D).
206. Restoration of soil productivity for purposes of Phase III bond release is achieved when the yield during the measurement period equals or exceeds one hundred percent (100%) of the success standard established by calculating a target yield using the formula identified in 312 IAC 25-6-59 for the approved post mining land use for any three (3) years prior to final bond release. 312 IAC 25-6-143.
207. Cool Breeze property included in the revised bond release request is prime farmland.
208. Appropriate production yields were certified by the tenant of Cool Breeze for three separate postmining years. Target yields were met, and in fact, exceeded on property owned by Cool Breeze in all required years. Cool Breeze acknowledges that the target yields were met and exceeded.
209. First, Cool Breeze alleges that the prime farmland requirements and criteria are not met due to the presence of wet holes.
210. Performance standards applicable to surface mining operations also state the permittee will, “backfill, compact where advisable to ensure stability or prevent the leaching of toxic materials, and grade to restore the approximate original contour of the land with all highwalls, spoil piles, and depressions eliminated. Small depressions are allowed if needed to retain moisture to assist revegetation or as otherwise authorized under this article.” IC 14-34-10-2(b)(4).
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211. Areas owned by Cool Breeze in the original application for bond release were found to be in need of fill or other repair and were withdrawn in the revised application for bond release. One area that was not identified by Cool Breeze was identified and evaluated by the Department for potential exclusion from the bond release. Based on the size of the depression and whole field crop production results, the Department accurately determined the area to be de minimus. The minimal size of the depression and the overall yields for the field in which the depression is located qualifies the small area for bond release.
212. Prime farmland production requirements and criteria have been met for the property under Permit that is owned by Cool Breeze, on which the revised bond release was requested. No wet area has been shown to disqualify an area covered by the revised bond release request. Therefore, the property is not disqualified from Phase III bond release on this basis.
213. Second, Cool Breeze alleges that the prime farmland requirements and criteria are not met because of rocks in the topsoil. D. Held does not believe that topsoil includes rocks.
214. Despite an evaluation of rocks in the soil during the Phase I bond release process, for purposes of a Phase III bond release, performance standards state that a permittee has a duty to “[r]estore the topsoil or the best available subsoil that is best able to support vegetation.” IC 14-34-10-2(b)(9).
215. For surface mining operations involving prime farmland, specific procedures for soil removal, storage, replacement and reconstruction are delineated. The performance standards for prime farmland include a duty of the permittee to remove topsoil as a separate layer and to stockpile the material separately. When the material is replaced, the permittee is to replace the topsoil with proper compaction and uniform depth over the regraded spoil. IC 14-34-10-2(b)(10).
216. The Permit incorporates the performance standards for prime farmland and requires soil horizon segregation, stockpiling and replacement. The Permit identifies horizon A as the top six inches of soil and horizon B and C materials as the next 12 to 24 inches of soil material, with a minimum depth of 48 inches for soil material restoration on prime farmland. The plan under the Permit is consistent with I-SMCRA.
217. Triad stockpiled and replaced stocked horizons removed from Cool Breeze property or from another area.[27]
218. No party presented evidence of any specific failure by Triad to comply with the reclamation plan for the permitted area regarding soil horizon segregation, stockpiling and replacement for prime farmland.
219. Therefore, Triad met its duty to restore the soil horizon through compliance with the plan in the Permit.
220. “Topsoil” is defined as the “A soil horizon layer of the three (3) major soil horizons.” 312 IAC 25-1-153.
221. The “A” horizon is “…the uppermost mineral layer and is the part of the soil in which the organic matter is most abundant and where the leaching of soluble or suspended particles is typically the greatest.” 312 IAC 25-1-2.
222. If the topsoil is less than six inches deep, the topsoil may include unconsolidated materials immediately below the topsoil to a total depth of six inches. 312 IAC 25-6-11.
223. “Subsoil” is defined as the “B” horizon. 312 IAC 25-1-40.
224. The “B” horizon is “…the mineral layer that is typically immediately beneath the A horizon. The B horizon commonly contains more clay, iron or aluminum than the A horizon or the C horizon.” 312 IAC 25-1-16.
225. The “C” horizon is “…the deepest layer of the soil profile and consists of loose material or weathered rock that is relatively unaffected by biologic activity.” 313 IAC 25-1-9.
226. In Indiana, statutory construction requires that “[w]ords and phrases shall be taken in their plain, or ordinary and usual, sense….” IC 1-1-4-1(1).
227. “…Courts may not ‘engraft new words’ onto a statute or add restrictions where none exist. Kitchell v. Franklin, 997 N.E.2d 1020, 1026 (Ind. 2013), quoting State ex rel. Monchecourt v. Vigo Cir. Ct., 162 N.E.2d 614, 616 (Ind. 1959).
228. The statutory definitions of topsoil and the associated definitions for horizon A, B and C materials reference materials commonly found within a specific layer of soil material. However, the specific layer of soil determines the horizon, not the geological composition of the layer. The layer defined as topsoil does not exclude rocks.
229. Rocks in reclaimed topsoil may become a topic of concern in Phase III bond release when production yields do not fulfill the crop production requirements for a Phase III bond release. Rocks in the soil could provide support for denial of a Phase III bond release on the basis of inadequate crop production. Here, crop yields exceed target yields. While rocks are present in the topsoil, the rocks do not support a denial for Phase III bond release.
230. Despite the observation of rocks in the topsoil, prime farmland production requirements and criteria have been met for the Cool Breeze property under permit on which the revised bond release was requested. Therefore, the property is not disqualified for Phase III bond release because of the presence of rocks in the topsoil.
ISSUE 2: Is Bond Release Approval in Error-Drainage and Terracing
231. As restated, Cool Breeze alleges that the drainage and terracing areas on Cool Breeze property do not qualify for bond release due to (1) problematic drainage, including the presence of cattails and the improper installation of culverts and (2) erosion as a natural resource concern.
232. As to problematic drainage, Phase I bond release addresses the backfiling, regrading or drainage control of a bonded area. 312 IAC 25-6-16(e)(1).
233. Written objection to a proposed bond release must be filed with the Department, along with a request for a public hearing within 30 days after the last required publication of notice of the request. IC 14-34-6-10. The Department’s decision on a bond release request is subject to administrative review procedures under IC 4-21.5-3. IC 14-34-6-11. An administrative review request of a Department determination on bond release must be received by the Commission within 15 days of receipt of the Department’s determination. 312 IAC 25-5-16.
234. Phase I bond release previously occurred with no contest by Cool Breeze for a slope, grading or drainage issue. Cool Breeze was provided notice and opportunity to challenge a Phase I bond release. Objections were voiced by Cool Breeze management, at that time. However, no issues regarding an inappropriate slope or drainage were raised at that time on administrative review. The opportunity to challenge any Phase I bond release issue has expired. Therefore, any Phase I issue not raised by Cool Breeze at that time has been waived, except as applicable to Phase III bond release criteria.
235. For a Phase III bond release, “the [Department] may not fully release a bond or deposit until all reclamation requirements of this article are fully met.” IC 14-34-6-13(3).
236. While issues of drainage are best resolved prior to a Phase I bond release, permitting procedures require “[a] plan describing the conservation practices to be used to adequately control erosion and sedimentation and restoration of an adequate soil moisture regime during the period from completion of regrading until release of the performance bond…” 312 IAC 25-4-102(d)(5). Emphasis added.
237. Performance standards state that disturbed areas are to be backfilled and graded to minimize erosion and water pollution both on and off the site and to support the approved postmining land use. 312 IAC 25-6-50(a).
238. In addition, performance standards state that “(a) All exposed surface areas shall be protected and stabilized to effectively control erosion and air pollution attendant to erosion. (b) When rills and gullies form in regraded, topsoiled areas and the rills and gullies disrupt the approved postmining land use, disrupt the reestablishment of vegetative cover or cause or contribute to a violation of applicable effluent limitations and the rill or gully is not vegetated or otherwise stabilized, the rill or gully shall be: (1) filled, regraded, or otherwise stabilized; (2) topsoil shall be replaced; and (3) the area shall be reseeded or replanted.” 312 IAC 25-6-51. Emphasis added.
239. Pursuant to IC 14-34-1-4(a), the requirements for bond release authorized by IC 14-34-6 are not more stringent than the requirements of 30 U.S.C. 1269(c). A Phase III bond release does not impose any requirements beyond those imposed by I-SMCRA and the permit under which the bond is considered for release.
240. The Permit identifies pre-mining grades between one percent and six percent. Evidence is undisputed that the slope of the Cool Breeze property has been reclaimed, consistent with the Permit, to not more than six percent.
241. The design of the Permit’s required slope minimizes erosion on and off the mining site. Production yields reveal that the slope supports the approved postmining land use, prime farmland.
242. Triad’s reclamation plan under the Permit calls for amendment to some permitted areas with fill and the installation of terracing. Triad’s conservation practices were implemented when Triad amended areas with soil materials and installed tiling and terracing.
243. Consistent with the findings of Loveless following multiple inspections, installed structures are functioning as designed. Cool Breeze failed to present evidence of a designed structure identified in the Permit that was not installed or that was installed contrary to its approved design.
244. Stabilization to control erosion may include tillage measures. Sheet erosion on farm ground is typical and expected due to the nature of growing crops that do not provide a permanent vegetative cover. Because Triad allowed Cool Breeze to continue farming the area, evidence is lacking to show if Cool Breeze pursued such measures. Regardless, of the implementation of such measures by Cool Breeze, production levels were met, exceeded, and any erosion on Cool Breeze property within the bond release request is determined to be of a level that would not present a basis for denial of bond release because erosion did not interfere with the approved postmining land use, as revealed by the production yields.
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245. Cool Breeze enlisted Bennett, Kocher and Loudermilk to develop various conservation plans to address their perceived ongoing erosion concerns for permitted land. Multiple designs were advanced for whole farm conservation efforts by Cool Breeze. The conservation plans presented to Cool Breeze did not consider Permit requirements or the designed plans associated with the Permit. In addition, the conservation plans were not advanced by any registered professional engineer. Without some reasonably certain hypothesis that would present a scientific or engineering basis sufficient to reject the reclamation plan incorporated into the Permit, the whole farm plans advanced by Cool Breeze must be left for Cool Breeze’s consideration following bond release. No plan presented includes information sufficient to overturn the Department’s approval of the revised bond release request.
246. Evidence does not support a conclusion that reclaimed areas within the revised bond release are fully free of erosion. However, the totality of the evidence presented supports a conclusion that the areas within the revised bond release are stabilized to adequately control erosion and that erosion is minimized by the conservation practices approved in the Permit and implemented by Triad.
247. It is noted that Cool Breeze property on which cattails were observed was withdrawn from the bond release request, along with other Cool Breeze property with drainage concerns. Triad admits to the need for additional reclamation efforts on portions of the Cool Breeze property that were excluded from the revised bond release request.
248. Cool Breeze had a burden to show that the property on which bond release has been requested was insufficiently stabilized to effectively control erosion for the postmining approved land use designated in the approved Permit, prime farmland. Actual yields that exceed target yields established in the Permit qualify the property for bond release. The record of this proceeding is void of evidence that Cool Breeze property subject to bond release is not sufficiently stable for its intended use or suitable for the approved post-mining land use, prime farmland. Cool Breeze failed to meet its burden in this regard.
249. Cool Breeze also alleges that the drainage and terracing areas on Cool Breeze property do not qualify for bond release due to problematic drainage arising from improper installation of culverts by Triad.
250. Cool Breeze presented evidence that water pools on Cool Breeze property due to a failure by Triad to properly install two culverts.
251. As to the larger culvert, Held Road is not a part of the bond release request at the location of the larger culvert. In addition, Cool Breeze property subject to bond release is not adjacent to the larger culvert. Insufficient evidence was presented to show that property owned by Cool Breeze that is included within the revised bond release is impacted by the culvert installation. In addition, due to the target yields being met, and in fact, exceeded, any impact would provide no basis for a denial of bond release.
252. As to the smaller culvert[28], Cool Breeze failed to show sufficient evidence to support any conclusion that any impact on Cool Breeze property subject to bond release was more than de minimus or interferes with the approved postmining land use, prime farmland.
253. No drainage or terracing area on Cool Breeze property would disqualify the property from bond release as a result of problematic drainage or the installation of culverts. Therefore, the property included within the revised bond release request is not disqualified for Phase III bond release due to problematic drainage.
254. Cool Breeze also alleges that drainage and terracing areas are unacceptable and in violation of needed components of release in that erosion of the land is a considerable natural resource concern.
255. As additional performance standard states that a permittee has a duty “[t]o the extent possible using the best technology currently available…[m]inimize disturbances and adverse impacts of the operation on fish, wildlife, and related environmental values.” IC 14-34-10-2(b)(26)(A).
256. No known threatened or endangered species were determined to be within the general vicinity of the permit area.
257. Cool Breeze failed to present evidence to support an argument regarding any relationship between drainage and terracing as related to an impact on fish and wildlife. Therefore, the property included within the revised bond release request is not disqualified for Phase III bond release on the basis of any disturbance or adverse impact on an operation of fish and wildlife.
258. Evidence concerning any related environmental value is evaluated below.
ISSUE 3: Is Bond Release Approval in Error-Piecemeal.
259. As restated, Cool Breeze alleges that the revised bond release request is piecemeal due to a potential impact, on Cool Breeze property within the revised bond release request, through (1) erosion of the land, a considerable natural resource concern and (2) required future reclamation on unreleased property.
260. Revegetation is identified by IC 14-34-6-13(2) as a Phase II bond release issue. In addition, a Phase II bond release requirement is that no part of the bond is to be released by the Department if “the land to which the release would be applicable is contributing suspended solids to stream flow or runoff outside the permit area in excess of the requirements set forth in IC 14-34-10-2(b)(13).” IC 14-34-6-13(2)(A), 312 IAC 25-6-16(e).
261. Phase II bond release was requested simultaneously with the Phase III release request. Cool Breeze was provided notice and the opportunity to dispute that bond release. Cool Breeze filed no request for administrative review of the Phase II release request. Therefore, any Phase II issue is now waived because the time to file for administrative review of the Phase II bond release has expired.
262. Any dispute regarding allegations on the contribution of suspended solids would only be available to Cool Breeze as it relates to a requirement applicable to a Phase III bond release.
263. “Based upon IC 14-34-6-1(a), IC 14-34-6-13 and 312 IAC 25-5-16, Phase III bond release must be evaluated in broad terms encompassing not only compliance with the individual permit but also considering compliance with the entirety of IC 14-34 and 312 IAC 25.” White v DNR, 14 CADDNAR 154, 159 (2017).
264. Erosion through the operation or maintenance of Pollard Ditch would be a consideration for a Phase III bond release upon a showing that Triad failed to comply with I-SCMRA as implemented through the approved Permit.
265. A performance standard states that a permittee has a duty to “effectively control erosion and attendant air and water pollution.” IC 14-34-10-2(b)(7).
266. An additional permittee duty is to “[m]inimize disturbances to the prevailing hydrologic balance at the mine site and associated offsite areas and to the quality and quantity of water in surface and ground water systems during and after surface coal mining and reclamation operations by doing the following:…(B) Conducting surface coal mining and reclamation operations so as to prevent, to the extent possible using the best technology currently available, violations of the effluent limitations for coal mining operations established under applicable state or federal law. (C) Constructing siltation structures under clause (B) before commencement of surface coal mining operations that will be certified by an engineer licensed under IC 25-31 and constructed as designed and approved in the reclamation plan. (D) Cleaning out and removing temporary or large settling ponds or other siltation structures from drainageways after disturbed areas are revegetated and stabilized and depositing the silt and debris at a site and in a manner approved by the director.” IC 14-34-10-2(b)(13). Emphasis added.
267. Performance standards for surface coal mining operations suggest consideration of the hydrologic balance of the permit area and adjacent areas. 312 IAC 25-6-12. However, performance standards refer to planning and conducting activities. I-SMCRA requires only that the permittee satisfy the requirements of IC 14-34, 312 IAC 25 or the permit. 312 IAC 25-5-16(e)(3)(A) and also Musgrave v Squaw Creek Coal Co., 964 N.E. 2nd 891, 903 (Ct. App. 2012), cert. denied, 975 N.E.2d 360, (Ind. 2012).
268. Performance standards protect the hydrologic balance for surface mining activities consistent with the approved [reclamation and operations] plan and other surface water quality protections. See 312 IAC 25-6-23(b)(5) and 312 IAC 25-4-47(b).
269. Activities associated with the implementation of a specific performance standard are specific to each permit and the objectives for each activity. One performance standard states, “[a]ll surface drainage from the disturbed area shall be controlled through use of a siltation structure, a series of siltation structures, or such alternative techniques…before leaving the permit area. (b) Siltation structures and other approved alternate techniques [and]… shall be operated and maintained to achieve applicable federal and state effluent limitations.” 312 IAC 25-6-13(a).
270. All surface drainage from the disturbed area is to be controlled and may involve one or more temporary or permanent diversions or siltation structures. See 312 IAC 25-4-51, 312 IAC 25-6-13 and 312 IAC 25-6-14. Stream channel diversion must be designed under the supervision of a registered qualified engineer in accordance with good engineering practices and certified following construction as having been constructed in accordance with the approved plans. 312 IAC 25-6-15)(b)(4). “Discharge structures are to be designed according to standard engineering design procedures.” 312 IAC 25-6-18.
271. Performance standards to assist in efforts toward hydrologic balance through the use of sediment control measures state, “[a]ppropriate sediment control measures shall be designed, constructed, and maintained using the best technology currently available to do as follows: (1) Prevent, to the extent possible, additional contributions of suspended solids to stream flow or run-off outside the permit area. (2) Meet the more stringent of applicable Indiana and federal effluent limitations. (3) Minimize erosion to the extent possible.” 312 IAC 25-6-16(a). Emphasis added.
272. “Best technology currently available” is defined as “equipment, devices, systems, methods, or techniques that will: (1) prevent, to the extent possible, additional contributions of suspended solids to stream flow or run-off outside the permit area, but in no event result in contributions of suspended solids in excess of requirements set by applicable Indiana or federal laws; and (2) minimize, to the extent possible, disturbances and adverse impacts on fish, wildlife, and their habitats and achieve enhancement of those resources where practicable.” 312 IAC 25-1-17(a). The term could include equipment, devices, systems, methods, or techniques, construction practices, siting requirements, vegetative selection and planting requirements, scheduling of activities, and design of siltation structures. “The director shall have the discretion to determine the best technology currently available on a case-by-case basis, as authorized by IC 14-34 and this article.” 312 IAC 25-1-17(b).
273. Triad’s permitted plan calls for the installation of an engineered diversion ditch and a sediment control structure.
274. The Pollard Ditch[29] is an engineered diversion area for the Freelandville mine. The Permit includes approved designs for one or more certified siltation basins.
275. Boyle acknowledged the presence of sediment and that sediment was removed on one or more occasions. Sediment contained in areas of siltation buildup may be removed. 312 IAC 25-6-17.
276. The techniques identified within the reclamation plan and implemented by Triad represent engineering practices approved by the Department for purposes of I-SMCRA.
277. No challenge to the design of the approved diversion identified as Pollard Ditch or any siltation structure was presented by Cool Breeze. No evidence was presented to support a finding that any structure approved for installation through the Permit was not installed. No evidence was presented to show that any approved structure was installed contrary to the design approved by the Department.
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278. Partial and complete inspections of a surface mining operation are required periodically by the Department, as necessary to determine compliance with IC 14-34 and 312 IAC 25. IC 14-34-15-3 and 312 IAC 25-7-1.
279. “Surface water monitoring, reporting, and record keeping shall be conducted through bond release, in accordance with 312 IAC 25-4-32 and as specified in the effective [NPDES] permit.” 312 IAC 25-6-23(b)(1).
280. As specified within the reclamation plan, monitoring of the outfall occurred in accordance with the NPDES permit issued by IDEM.
281. Loveless conducted all required inspections of the affected areas and reviewed surface and ground water monitoring information, including NPDES data of the outflow of the Pollard Ditch diversion. As Loveless determined, adverse impacts on hydrologic balance were avoided. Cool Breeze provided no evidence to dispute the determination by Loveless.
282. Structures installed to control erosion and monitor runoff were appropriately installed, maintained and are functioning as designed. No evidence admitted disputes that required monitoring, reporting and recordkeeping have been conducted consistent with I-SMCRA, planned in the Permit as the best technology currently available. Cool Breeze failed to offer sufficient evidence of impact on Cool Breeze property subject to the bond release based on hydrologic balance and erosion of solids from Pollard Ditch. Therefore, the property under Permit that is within the revised bond release request is not disqualified for Phase III bond release due to erosion of the land, a considerable natural resource concern.
283. Second, as restated, Cool Breeze alleges that the revised bond release request is piecemeal due to future reclamation needs on property that is not being released, including the haul road, existing stockpiles and the 8.8 acres of Cool Breeze property that were withdrawn in the revised bond release request.
284. A required level of bond is determined by the Department when a Permit is initially issued, upon consideration of many factors, including the costs of reclamation for specific post mining land uses, including prime farmland. IC 14-34-6-2.
285. If the Department determines insufficient bonding remains at any point in time, the Department has the authority to increase the bond, as required. IC 14-34-6-6.
286. The Department determined an appropriate bond for the Freelandville mine, when the Permit was originally approved.
287. “After a permit is issued, the permittee may apply to the director for the release of all or part of the bond….” IC 14-34-6-7(a). See also 312 IAC 25-5-16(a).
288. The Department may authorize bond release, in whole or in part, when reclamation covered by the bond has been accomplished in accordance with the approved reclamation plan. IC 14-34-6-13. See also 312 IAC 25-5-16.
289. The Department may not fully release a bond until all reclamation requirement of IC 14-34 are fully met. IC 14-34-6-13(3).
290. “Bond release, which by law may occur in phases, is dependent upon completion, in phases, of reclamation activities within the permit area pursuant to an approved reclamation plan.” Musgrave v. IDNR and Squaw Creek Coal Co., 10 CADDNAR 178, 182 (2006). See generally, Bell v. Department of Natural Resources and Solar Sources, Inc., 7 CADDNAR 54 (1994).
291. Any area that was identified by Cool Breeze during the bond release inspection to be inappropriate for release, was confirmed by the Department to be inappropriate for release and was withdrawn from the request for bond release.
292. Cool Breeze presented estimates for the cost of completing full tract systems and full farm conservation plans.
293. However, credible evidence was presented to support a conclusion that all of the excepted areas can be made ready for release without work being done on areas included in the revised bond release request.
294. The installation of full farm conservations systems that include property not yet ready for bond release and property within the revised bond release request is not required.
295. The knowledge and experience of Boyle, Loveless and Geier sufficiently support their determination that further reclamation activities on ground adjacent to Cool Breeze property would not impact Cool Breeze property within the revised bond release request.
296. The percentages set aside for the phases of bond release under IC 14-34-6-13 are designed to provide sufficient bond. The Department has been provided the authority to increase bonding requirements, if an increase becomes necessary. The remaining bond is sufficient to fully reclaim areas held out for future reclamation at this time.
297. Under I-SMCRA, the property on which bond release has been requested is not disqualified for bond release on this basis. Cool Breeze failed to show the Department’s determination to approve the revised bond release was in error because of a need for future reclamation on any property beyond the property included in the revised bond release request.
Conclusion
1. Triad has substantially complied with the terms and conditions of IC 14-34-6-13(3) and successfully completed all coal mining and reclamation activities supporting the release of the remaining bond on the property included within the revised bond release request, as approved by the Department.
2. Criteria for bond release of property under a surface mining permit is set forth in I-SMCRA, 312 IAC 25 and the Permit, including the approved reclamation plan. The Department appropriately determined that Triad met the established requirements for the Phase III bond release request as to property owned by Cool Breeze included within the revised bond release request.
3. Cool Breeze failed to provide sufficient evidence to support a finding that the Department’s approval of Triad’s revised Phase III bond release application was in error.
4. The Department’s approval of Triad’s Phase III bond release request for Permit #S-311, as revised, is supported by a preponderance of the evidence.
[1] As stated in the request with no alteration.
[2] As stated in the Petition.
[3] Chad Sullivan did not withdraw his appearance.in this matter.
[4] October 25, 2017, was reserved as a potential additional hearing date.
[5] November 29, 2017, was reserved as a potential additional hearing date.
[6] Findings of fact that may be construed as conclusions of law and conclusions of law that may be construed as findings of fact are so deemed.
[7] Identification of evidence is provided as a reference to testimony or exhibits in the record. The reference may not be exhaustive.
[8] Petitioner’s exhibits are identified by letters. Triad’s exhibits are identified by numbers. The Department presented no exhibits.
[9] The right-of-way of County Road 1050 North, Hartzburg Road, may include 1.3 acres, within property owned by Cool Breeze known as Koenig Place, location 10-5-8-02, that was withdrawn from the bond release request.
[10] Stipulated by the Parties to be 180.59 acres.
[11] It is assumed by the ALJ that the location indicators reference the Section, Township, and Range of the tract, followed by a tract identifier specific to the mining operation.
[12] Stipulated by the Parties to be 108.12 acres.
[13] Specific lease information is included within the Stipulations of Fact identified within paragraph 24 of this decision.
[14] Despite an inspector’s prior observations, when a bond release inspection occurs during a time when crops are in the field, the importance of input from a landowner who participates in the management of reclaimed property is noted by the ALJ.
[15] Production for the first crop year may be found within paragraphs 71 and 72 of this decision.
[16] During his testimony, B. Held, stated his belief that the Department’s determination to approve the bond release was based, in part, on the fiscal needs of Triad. The allegation was not made a part of the Petition and is beyond the scope of this administrative proceeding. While it is noted that a permittee’s fiscal need is not a consideration under I-SMCRA for purposes of bond release, evidence presented would not support a conclusion that the Department based its decision to approve the bond release on Triad’s fiscal need.
[17] Ex. K, L and N were admitted over objection raised by Triad and the Department on the basis of relevance.
[18] Bennett’s testimony was admitted over Triad’s objection on the basis of relevance.
[19] Brian Held’s brother.
[20] Admitted over the objection by Triad on the basis of relevancy and objections by the Department on the basis of relevancy and materiality.
[21] Admitted over the objection by Triad on the basis of relevancy.
[22] As written with no grammatical corrections.
[23] The pages within Exhibit S are not presented in chronological order and include a date range from 1969 until, and including, 2014. Many of the pages within Exhibit S are undated, unsigned or illegible.
[24] Admitted over the objection by Triad on the basis of relevancy and objections by the Department on the basis of relevancy and materiality.
[25] Triad’s bond release request included a Phase II release request on some or all property for which the Phase III request was submitted. No request for administrative review was presented by the Petitioner for Phase II release.
[26] Acreage that was also identified as inappropriate for release that was not under Cool Breeze ownership is not identified in this decision.
[27] Any dispute that may rest on a contractual obligation between Cool Breeze and Triad, such as a lease or other agreement, would be beyond the jurisdiction of this administrative review. Morrison Estate v DNR and Black Beauty Coal, 7 CADDNAR 57 (1994).
[28] Any dispute regarding the road project that may involve a culvert design or installation approved by county officials would be beyond the scope of this proceeding.
[29] Pollard Ditch is not an area included in the revised bond release but is included here to address any impact of the structure on Cool Breeze property included within the revised bond release request.