## Facts

- Alaska’s Surface Coal Mining Control and Reclamation Act (ASCMCRA) requires a permit before conducting a “surface coal mining and reclamation operation” in Alaska.
- In January 1985, Diamond Shamrock–Chuitna Coal Joint Venture (Diamond) applied to the Alaska Department of Natural Resources (DNR), Division of Mining, for a permit to conduct surface coal mining on the west side of Cook Inlet.
- After extensive agency review, public comment, and revisions, DNR approved the permit in 1987 (with approvals dated March 5 and August 21, 1987).
- The approved permit did not treat several related facilities as part of the permit area, including certain off-site components such as port stockpiling/loading facilities, a coal conveyor to the port, gravel pits, employee housing, access/haul roads (including an approximately 11-mile haul road), and an airstrip.
- Trustees for Alaska, Alaska Center for the Environment, and two individuals (Trustees) participated in the permitting process and challenged DNR’s approval through an administrative appeal to the DNR Commissioner.
- After a hearing, a hearing officer recommended rejecting the challenges relevant on appeal; the Commissioner adopted the proposed decision.
- Trustees sought judicial review in the superior court. The superior court largely affirmed the Commissioner; it initially ruled the haul road could not be excluded from ASCMCRA coverage, but on rehearing concluded the road could be handled through a separate ASCMCRA permit.
- Trustees appealed to the Alaska Supreme Court, contesting (1) DNR’s treatment of off-site facilities, (2) the bond amount, (3) the showing supporting the reclamation plan’s ability to restore land capability/uses, and (4) bond-release criteria.

## Issues

1. Whether DNR erred or abused its discretion by refusing to require that specified off-site facilities related to the mining project be covered under Diamond’s ASCMCRA permit.
2. Whether DNR violated ASCMCRA by approving a bond amount that did not reflect the reclamation costs the State might have to bear if the operator defaulted.
3. Whether DNR could approve the permit without an adequate showing that Diamond’s reclamation plan would restore the land to the statutorily required postmining condition and land-use capability.
4. Whether ASCMCRA requires bond-release criteria that condition release on successful completion of reclamation, rather than on less demanding milestones.

## Decision

- The Alaska Supreme Court **affirmed in part, reversed in part, and remanded** for further proceedings.
- The court held that federal SMCRA regulations may be used as interpretive assistance, but Alaska’s ASCMCRA program is judged primarily by Alaska law; Alaska law is displaced only where inconsistent with the federal statute itself.
- On **off-site facilities**, the court rejected a categorical rule that every project-related component must be covered by a single permit, but ruled that DNR must apply ASCMCRA’s definitions and purposes to determine whether particular facilities are functionally part of the “surface coal mining and reclamation operation” and therefore must be brought within ASCMCRA permitting and reclamation controls (whether within the same permit area or through appropriate ASCMCRA permitting).
- The court required further agency work where DNR’s treatment of certain facilities (including the haul road and other support components) affected the scope of reclamation duties and the financial assurances needed to secure them.
- On **bonding**, the court held that ASCMCRA’s performance bond must be set at a level sufficient to cover the cost of completing required reclamation if the operator fails to perform, and the bond analysis must match the lands and facilities for which ASCMCRA reclamation duties apply.
- On the **reclamation plan**, the court did not impose an across-the-board requirement that the land be returned to identical prior uses in every instance; instead, it focused on whether the record and findings support the statutory reclamation standards and approved postmining land capability. Where the agency record and findings were not adequate to show compliance, the matter required further proceedings.
- On **bond release**, the court accepted phased release in principle, but required that release criteria be tied to demonstrated reclamation success and stability consistent with ASCMCRA, rather than allowing release without sufficient proof that required reclamation results have been achieved.

## Legal Principles

- In a state “primacy” program under SMCRA, federal regulations may inform interpretation, but they do not alone supply the legal test for state permitting decisions; inconsistency with the federal statute (not merely a federal regulation) is the key displacement inquiry.
- ASCMCRA permit-area and operational-scope questions turn on statutory definitions and the functional role of facilities in the mining and reclamation operation; an agency may not avoid ASCMCRA duties by treating integral components as outside the regulated operation without adequate analysis.
- A performance bond under ASCMCRA must be sufficient to protect the public from the cost of completing required reclamation if the operator defaults, and the bond amount must reflect the reclamation obligations that attach to the regulated operation.
- Permit approval must be supported by an adequate record and findings showing that the reclamation plan can meet ASCMCRA’s reclamation standards and approved postmining land-use capability.
- Bond-release standards may allow staged release, but releases must be conditioned on evidence that reclamation requirements for the relevant phase have been successfully completed and are stable.

## Conclusion

The Alaska Supreme Court largely sustained DNR’s authority to structure permitting for a surface coal mine under ASCMCRA but required additional proceedings where DNR’s treatment of off-site facilities, bonding, reclamation-plan support, and bond-release criteria did not adequately demonstrate compliance with ASCMCRA’s statutory requirements and protections.


Trustees for Alaska v. Gorsuch, 835 P.2d 1239 (1992)