Final bond release is ordered for 56.50 acres of the 87.15 acres withheld. The area to be released is identified as segments "B" and "C"
on Claimant's Exhibit 9.
FINDINGS OF FACT
1. By letter dated December 6, 1991, and received by the Respondent on December 9, 1991, Marigold Mining, Inc. (the "Claimant") filed a request for hearing on denial of Phase III bond release for its Liberal Mine in Spencer County.
2. The Claimant holds Permit No. S-110 to conduct surface coal mining operations at that site.
3. IC 4-21.5, IC 13-4.1, 310 IAC 0.6, and 310 IAC 12 apply to this proceeding.
4. The Department of Natural Resources (the "Department") is an agency as defined in IC 4-21.5-1-3.
5. Pursuant to IC 13-4.1-2-1(c), the administrative law judge (ALJ) is the ultimate authority for the Department in this proceeding.
6. Timothy A. Corn, an authorized representative of the Department, denied Phase III bond release on 87.13 acres of non-prime farmland at the Liberal Mine by letter dated November 12, 1991.
7. Phase III bond release on 87.13 acres of non-prime farmland was denied by the Department for the following reasons:
a. The Division of Reclamation (DOR) and the office of Surface Mining (OSM) have not established Phase III revegetation release standards for pasture; and absent such standards, the Department determined that it was not possible to qualify for Phase III release on pasture land.
b. Productivity data for the last two consecutive years has not been submitted for any of the 87.13 acres requested for Phase III bond release.
c. Revegetation had not been properly established.
8. The issue articulated in Finding 7a was found to be legal in nature and the parties agreed to address it in post-hearing briefs.
9. The Department first makes the argument that no Phase III bond releases can be made until OSM approves 310 IAC 12-5-64.1, 64.2, and 64.3 (the "proposed rules").
10. This argument is not well taken, and is rejected by the administrative law judge.
11. Until rule making action is complete under IC 4-22, a new rule has no legal effect.
12. However, since Federal law mandates that state rules cannot be less stringent than federal rules, and Indiana law specifies that no rule may be adopted that is more stringent than the corresponding federal rule (See IC 13-4.1-1-5), it is reasonable to assume that the proposed rules generally mirror federal law or they would have been summarily rejected by OSM.
13. Using Caddnar precedent as a guide (for example, see Peabody v. DNR, 5 Caddnar 153 (1991)), proposed rules submitted to OSM may be given some weight as a reflection of Natural Resources Commission policy.
14. The weight given to the proposed rule will be governed by the sufficiency of the old rule and permit provisions in deciding the controversy.
15. In the case at bar, 310 IAC 12-4-16(c)(3) specifies that "when the operator has completed successfully all surface coal mining and reclamation activities, the Department shall release the remaining portion of the bond... ; provided, however, that no bond shall be fully released until all reclamation requirements of the Act (IC 13-4.1) AND THE PERMIT (emphasis added) are fully met.
16. The provisions of 310 IAC 12-5-64, and the terms of the Claimant's permit must first be looked to in determining standards for Phase III bond release.
17. Only in a case where the above application of rule and permit provisions produces an unclear requirement would the administrative law judge give weight to policy reflected in a proposed rule.
18. In this case,
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the applicable permit provision states "on non-prime farmland soils, a vegetative cover of at least 90 percent will be maintained as a measure of revegetation success". (See permit S-110 D. Revegetation Plans (5) (last sentence)).
19. The applicable rule, 310 IAC 12-5-64) does not contradict the applicable permit provision.
20. Therefore, no policy statement is needed because the situation is clear by rule and permit as to what path the Department must follow to effect this bond release request.
21. In determining whether the claimant was entitled to any Phase III release of the 87.13 acres in dispute, the administrative law judge is faced with many contradicting facts.
22. According to the Department, under 310 IAC 12-4-16(c)(3) and 310 IAC 12-564(b), success standards for revegetation for pasture land have not been established by claimant.
23. According to the Department, productivity data for the last two consecutive years must be supplied pursuant to 310 IAC 12-564(b) and 310 IAC 12-4-16(c)(3).
24. At the hearing, the Department took the position that the same species that were provided for planting in the permit, i.e. fescue, timothy, and sweet clover, must be present at the time of Phase III bond release.
25. The approved permit provides what must be planted, and it is customary for the Department to allow deviation from such planting. The permit does not provide what species must be present at the time of final bond release. The regulations provide such standard (i.e. "diverse, permanent and effective").
26. The parties offered conflicting testimony and evidence concerning the extent of diversity of the vegetative cover at the time of the bond release inspection on October 10, 1991. However, it was uncontested that at least two desirable species were found to exist on 29.3 acres and that three desirable species were found to exist on 27.2 acres. Except for 7.5 acres, the remainder of the permit was dominated by fescue, although more than one species existed. As to 7.5 acres, there was conflicting testimony whether such real estate was dominated by weeds.
27. The claimant established that there was a diverse, effective, permanent vegetative cover for more than 90 percent of the entire permit, with an average of 95.2 percent vegetative cover.
28. Although the inspection for the purpose of bond release was critical of the vegetative cover, the prior inspections throughout the period of responsibility praised the performance of the claimant concerning vegetative cover and found that no problems existed.
29. Other than establishment of a vegetative cover of at least 90 percent, the approved permit does not require that the claimant provide "productivity data". The governing regulation at the time of the permit, 310 IAC 12-5-64(b) calls for "productivity" but does not provide for "productivity data".
30. It was customary for the Department to set production standards in the permits, as it did in the principal permit concerning prime farmland. For whatever reason, the Department chose not to require any specific productivity data concerning non-prime farmland.
31. By establishing a 90 percent vegetative cover, the claimant necessarily demonstrated "productivity".
32. Since the regulations that governed the approved permit in this case do not define "productivity data", and since the Department did not provide for productivity data in the permit, the claimant has no standard other than a 90 percent vegetative cover by which to determine productivity.
33. The legal requirement for vegetative cover is that the cover be "diverse, effective and permanent." This legal requirement is satisfied where there is a diverse vegetative cover of two or more desirable species. (See Rogers Group, Inc. v. DNR, 5 Caddnar 147 (1990)). Nothing in the permit, the statutory law, or the regulations applicable to this case requires that the specific species designated to be planted must be present at the time of bond release.
34. The existence of weeds at the time of bond release inspection does not disqualify an area from release, so long as the vegetative cover contains sufficient desirable species to meet the standards of the permit and is diverse, effective and permanent.
35. Diversity concerning the vegetative cover does not necessarily preclude one species from being dominant in relation to others.
36. However, it has been stated many times in CADDNAR that rules can be preventative in their application.
37. If an inspector can reasonably document the probable occurrence of a future problem, the law can be applied in a manner so as to address the future problem.
38. In the case of an area dominated by fescue and one other weak species, when it is clear that the fescue will surely become the only species present in a short period of time, the Department may reject this
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area for bond release under the "future problem" theory.
39. The administrative law judge will identify areas in terms of the cover sheet and map identified as claimant's Exhibit 9.
40. Bond release was correctly denied for the area called segment A.
41. This area contains 30.65 acres not approved for release.
42. Evidence shows this area contains a large amount of weeds and is heavily dominated by fescue.
43. The Department correctly notes that fescue and weeds will soon be the only growth in this area, and this combination will not qualify as diverse.
44. Bond should have been released on segment B.
45. This segment contains 29.30 acres.
46. Evidence shows that segment B had more than a 90% effective, permanent vegetative ground cover.
47. Segment Bcontained at least two species of vegetation noted in permit; and therefore, diversity is established.
48. Segment B has met requirements for Phase III release.
49. Segment C should have been approved for release also.
50. Segment C contains 27.20 acres not approved for release.
51. Evidence shows that segment C had more than a 90% effective, permanent vegetative ground cover.
52. Segment C appeared to contain three different species of vegetation; and therefore, diversity is established.
53. In sum, release was properly denied for 30.65 acres identified as segment A and improperly denied for 56.50 acres identified as segments B and C.