COALEX State Inquiry Report - 321
April, 1995

Randy Elkins, Esquire
10 McJunkin Road
Nitro, West Virginia 25143

TOPIC: TRANSFER, ASSIGNMENT OR SALE OF PERMIT RIGHTS
       (Updates Reports Nos. 231 and 169)

INQUIRY: Is there any material that describes the percentage of stock or shares be sold to qualify for
a "transfer, assignment or sale" requiring compliance with change in ownership rules? What about a
two-person partnership where one partner sells out?

SEARCH RESULTS: Several existing COALEX State Inquiry Reports were identified which address
aspects of this inquiry. Using LEXIS, several relevant OSM Directives, proposed "transfer" rules and
final ownership and control rules were identified to update the enclosed reports. A quote from a 1994
Directive on the definition of "transfer" appears below, the additional materials are attached.

  Please note: Copies of the COALEX Reports are enclosed without attachments. If you need copies of
the attachments, please contact the IMCC office.

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OSM DIRECTIVE, Subject No. INE-42, Transmittal No. 665, "Verification of federal permittee ownership
and control information after site disturbance" (Issued 3/26/91 and incorporates INE-42-1, dated
6/12/92, and INE-42-2, dated 8/5/94)
   Definitions:
 
"a. Transfer, assignment, or sale of permit rights (permit transfer) is a change in ownership or other
effective control over the right to conduct surface coal mining operations under a permit. This definition
is based on the common understanding of the terms to include any effective shift in control over rights,
in addition to technical changes in ownership. (See 30 CFR 701.5 and 44 FR 15106, March 13, 1979.)
The term includes, for example, changes such as a new officer, director, as well as the addition of a
new operator (not listed in the original permit) who actually performs surface coal mining operations,
or owner of 10 percent or more of any class of voting stock, except in situations involving two or more
levels of ownership of an entity, the percentages of ownership which any remote owner has in the
entity. For example, a 45 percent owner of a 20 percent owner will be considered to own a 9 percent
interest."


ATTACHMENTS
A.   COALEX STATE INQUIRY REPORT - 131, "Individual liability of corporate officer, director or
     agent" (1989).
B.   COALEX STATE INQUIRY REPORT - 148, "Contractor liability for violations; ownership and
     control of operations" (1990).
C.   COALEX STATE INQUIRY REPORT - 169, "Ownership and control; AVS" (1991).
D.   COALEX STATE INQUIRY REPORT - 231, "Ownership and control: related parties" (1992).
E.   OSM DIRECTIVE, Subject No. INE-42, Transmittal No. 665, "Verification of federal permittee
     ownership and control information after site disturbance" (Issued 3/26/91 and incorporates
     INE-42-1, dated 6/12/92, and INE-42-2, dated 8/5/94).
F.   OSM DIRECTIV E Subject No. INE-33, Transmittal No. 636, "510(c) Permit review procedures
     for federal permit applications" (Issued 9/18/90 and incorporated INE-33-1, dated 6/12/92 and
     INE-33-2, dated 8/5/94).
G.   OSM DIRECTIVE, Subject No. INE-2, Transmittal No. 688, "Ownership and control information
     update after receipt of a cessation order" (Issued 9/3/91).
H.   59 FR 54306 (OCTOBER 28, 1994). Final rules. AVS standards and procedures for ownership
     and control determinations.
I.   58 FR 34652 (JUNE 28, 1993). Proposed rules. Definition and procedures for transfer,
     assignment and sale of permit rights; Definitions of ownership and control; Permit information
     requirements and the AVS system.


Research conducted by: Joyce Zweben Scall