30 Cfr 705

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PART 705—RESTRICTION ON FINANCIAL INTERESTS OF STATE EMPLOYEES

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§ 705.1 Purpose.
§ 705.2 Objectives.
§ 705.3 Authority.
§ 705.4 Responsibility.
§ 705.5 Definitions.
§ 705.6 Penalties.
§ 705.10 Information collection.
§ 705.11 Who shall file.
§ 705.13 When to file.
§ 705.15 Where to file.
§ 705.17 What to report.
§ 705.18 Gifts and gratuities.
§ 705.19 Resolving prohibited interests.
§ 705.21 Appeals procedures.

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Authority: 30 U.S.C. 1201 et seq.
Source: 42 FR 56060, Oct. 20, 1977, unless otherwise noted.
§ 705.1 Purpose.
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This part sets forth the minimum policies and procedures that States must establish and use to implement

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section 517(g) of the Act in order to eligible for reimbursement of costs of enforcing and administering the
initial regulatory program under section 502, or for grants for developing, administering and enforcing a
State regulatory program under section 705 of the Act, or to assume primary regulatory authority under
section 503 of the Act (Pub. L. 95–87). Compliance with the policies and procedures in this part will
satisfy the requirements of section 517(g) of the Act. Section 517(g) prohibits certain employees of the
State Regulatory Authority from having any direct or indirect financial interest in any underground or
surface coal mining operation. The regulations in this part are applicable to employees of the State
Regulatory Authority as defined in §705.5.

§ 705.2 Objectives.
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The objectives of this part are:
(a) To ensure that the States adopt a standard program for implementing the provisions in section 517(g)
of the Act.
(b) To establish methods which will ensure, as required by section 517(g) of the Act, that each employee
of the State Regulatory Authority who performs any function or duty under the Act does not have a direct
or indirect financial interest in any underground or surface coal mining operation.
(c) To establish the methods by which the monitoring, enforcing and reporting responsibilities of the
Secretary of the Interior as stated in section 517(g) will be accomplished.

§ 705.3 Authority.
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(a) The Secretary of the Interior is authorized by Pub. L. 95–87 to:
(1) Establish the methods by which he or she and State officials will monitor and enforce the provisions
contained in section 517(g) of the Act;
(2) Establish appropriate provisions for employees of the State Regulatory Authority who perform any
function or duty under the Act to file a statement and supplements thereto in order to identify any financial
interest which may be affected by section 517(g), and
(3) Report annually to the Congress the actions taken and not taken during the preceding calendar year
under section 517(g) of the Act.
(b) The Governor of the State, the Head of the State Regulatory Authority, or such other State official
designated by State law, is authorized to expand the provisions in this part in order to meet the particular
needs within the State.
(c) The Office of Inspector General, U.S. Department of the Interior, is authorized to conduct on behalf of
the Secretary periodic audits related to the provisions contained in section 517(g) of the Act and related to
the provisions in this part. These audits will be conducted on a cyclical basis or upon request of the
Secretary or the Director.
[42 FR 56060, Oct. 20, 1977, as amended at 56 FR 46987, Sept. 17, 1991]

§ 705.4 Responsibility.

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(a) The Head of each State Regulatory Authority shall;
(1) Provide advice, assistance, and guidance to all State employees required to file statements pursuant
to §705.11;
(2) Promptly review the statement of employment and financial interests and supplements, if any, filed by
each employee, to determine if the employee has correctly identified those listed employment and
financial interests which constitute a direct or indirect financial interest in an underground or surface coal
mining operation;
(3) Resolve prohibited financial interest situations by ordering or initiating remedial action or by reporting
the violations to the Director who is responsible for initiating action to impose the penalties of the Act;
(4) Certify on each statement that review has been made, that prohibited financial interests, if any, have
been resolved, and that no other prohibited interests have been identified from the statement;
(5) Submit to the Director such Statistics and information as he or she may request to enable preparation
of the required annual report to Congress;
(6) Submit to the Director the initial listing and the subsequent annual listings of positions as required by
§705.11 (b), (c), and (d);
(7) Furnish a blank statement 45 days in advance of the filing date established by §705.13(a) to each
State employee required to file a statement; and
(8) Inform annually each State employee required to file a statement with the Head of the State
Regulatory Authority, or such other official designated by State law or regulation, of the name, address,
and telephone number of the person whom they may contact for advice and counseling.
(b) The Director, Office of Surface Mining Reclamation and Enforcement, shall:
(1) Provide advice, assistance, and counseling to the Heads of all State Regulatory Authorities
concerning implementation of these regulations;
(2) Promptly review the statement of employment and financial interests and supplements, if any, filed by
each Head of the State Regulatory Authority. The Director will review the statement to determine if the
Head of the State Regulatory Authority has correctly identified those listed employment and financial
interests which constitute a direct or indirect financial interest in an underground or surface coal mining
operation;
(3) Recommend to the State Attorney General, or such other State official designated by State law or the
Governor of the State, the remedial action to be ordered or initiated, recommend to the Secretary that
action be taken to impose the penalties of the Act, or recommend to the Secretary that other appropriate
action be taken with respect to reimbursements, grants, or State programs;
(4) Certify on each statement filed by the Head of the State Regulatory Authority that the State has
completed the review of the statement, that prohibited financial interests have been resolved, and that no
other prohibited interests have been identified from the statement;
(5) Monitor the program by using reports requested from Heads of State Regulatory Authorities and by
using periodic audits performed by the Office of Inspector General, U.S. Department of the Interior;
(6) Prepare for the Secretary of the Interior a consolidated report to the Congress as part of the annual
report submitted under section 706 of the Act, on the actions taken and not taken during the preceding
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calendar year under section 517(g);
(7) Designate if so desired other qualified Office of Surface Mining Reclamation and Enforcement
employees as assistant counselors to assist with the operational duties associated with filing and
reviewing the statements from the Heads of each State Regulatory Authority;
(8) Furnish a blank statement by December 15 of each year, to the Head of each State Regulatory
Authority; and
(9) Inform annually, the head of each State Regulatory Authority of the requirement to file his or her
statement with the Director and supply the name, address, and telephone number of the person whom
they may contact for advice and counseling.
(c) State Regulatory Authority employees performing any duties or functions under the Act shall:
(1) Have no direct or indirect financial interest in coal mining operations;
(2) File a fully completed statement of employment and financial interest 120 days after these regulations
become effective or upon entrance to duty, and annually thereafter on the specified filing date; and
(3) Comply with directives issued by persons responsible for approving each statement and comply with
directives issued by those persons responsible for ordering remedial action.
(d) Members of advisory boards and commissions established in accordance with State laws or
regulations to represent multiple interests, who perform a function or duty under the Act, shall recuse
themselves from proceedings which may affect their direct or indirect financial interests.
[42 FR 56060, Oct. 20, 1977, as amended at 51 FR 37122, Oct. 17, 1986; 56 FR 46987, Sept. 17, 1991]

§ 705.5 Definitions.
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Act. Means the Surface Mining Control and Reclamation Act of 1977, Pub. L. 95–87.
Coal mining operation. Means the business of developing, producing, preparing or loading bituminous
coal, subbituminous coal, anthracite, or lignite, or of reclaiming the areas upon which such activities occur.
Direct financial interest. Means ownership or part ownership by an employee of lands, stocks, bonds,
debentures, warrants, partnership shares, or other holdings and also means any other arrangement
where the employee may benefit from his or her holding in or salary from coal mining operations. Direct
financial interests include employment, pensions, creditor, real property and other financial relationships.
Director. Means the Director or Acting Director of the Office of Surface Mining Reclamation and
Enforcement within the U.S. Department of the Interior.
Employee. Means (a) any person employed by the State Regulatory Authority who performs any function
or duty under the Act, and (b) advisory board or commission members and consultants who perform any
function or duty under the Act, if they perform decisionmaking functions for the State Regulatory Authority
under the authority of State law or regulations. However, members of advisory boards or commissions
established in accordance with State law or regulations to represent multiple interests are not considered
to be employees. State officials may through State law or regulations expand this definition to meet their
program needs.
Indirect financial interest. Means the same financial relationships as for direct ownership, but where the

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employee reaps the benefits of such interests, including interests held by his or her spouse, minor child
and other relatives, including in-laws, residing in the employee's home. The employee will not be deemed
to have an indirect financial interest if there is no relationship between the employee's functions or duties
and the coal mining operation in which the spouse, minor children or other resident relatives hold a
financial interest.
Office. Means the Office of Surface Mining Reclamation and Enforcement, U.S. Department of the Interior.
Performing any function or duty under this Act. Means those decisions or actions, which if performed or
not performed by an employee, affect the programs under the Act.
Prohibited financial interest. Means any direct or indirect financial interest in any coal mining operation.
Secretary. Means the Secretary of the Interior.
State Regulatory Authority. Means that office in each State which has primary responsibility at the State
level for administering this Act. Until an office is established under the provisions of section 503 or section
504 of the Act, this term shall refer to those existing State offices having primary jurisdiction for regulating,
enforcing, and inspecting any surface coal mining and reclamation operations within the State during the
interim period between the effective date of the Act and the establishment of the State Regulatory
Authority under section 503 or section 504.

§ 705.6 Penalties.
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(a) Criminal penalties are imposed by section 517(g) of the Surface Mining Control and Reclamation Act
of 1977, Pub. L. 95–87. Section 517(g) prohibits each employee of the State Regulatory Authority who
performs any function or duty under the Act from having a direct or indirect financial interest in any
underground or surface coal mining operation. The Act provides that whoever knowingly violates the
provisions of section 517(g) shall, upon conviction, be punished by a fine of not more than $2,500, or by
imprisonment of not more than one year, or by both.
(b) Regulatory penalties are imposed by this part. The provisions in section 517(g) of the Act make
compliance with the financial interest requirements a condition of employment for employees of the State
Regulatory Authority who perform any functions or duties under the Act. Accordingly, an employee who
fails to file the required statement will be considered in violation of the intended employment provisions of
section 517(g) and will be subject to removal from his or her position.

§ 705.10 Information collection.
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The collections of information contained in §§705.11 and 705.17 have been approved by the Office of
Management and Budget under 44 U.S.C. 3501 et seq. and assigned clearance number 1029–0067. The
information is being collected on OSM Form 23 and will be used to meet the requirements of section 517
(g) of the Surface Mining Control and Reclamation Act of 1977, which provides that no employee of the
State regulatory authority shall have direct or indirect financial interests in any underground or surface
coal mining operation. This information will be used by officials of the state regulatory authority to
determine whether each State employee complies with the financial interest provisions of section 517(g).
The obligation to respond is mandatory in accordance with section 517(g). Public reporting burden for this
information is estimated to average 20 minutes per response per state employee and 30 minutes per
response per State regulatory authority, including the time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing and reviewing the collection of
information. Send comments regarding this burden estimate or any other aspect of this collection of
information, including suggestions for reducing the burden, to the Information Collection Clearance

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Officer, Office of Surface Mining, 1951 Constitution Avenue NW., room 5415–L, Washington, DC 20240;
and the Office of Management and Budget, Paperwork Reduction Project 1029–0067, Washington, DC
20503.
[56 FR 46988, Sept. 17, 1991]

§ 705.11 Who shall file.
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(a) Any employee who performs any function or duty under the Act is required to file a statement of
employment and financial interests. Members of advisory boards and commissions established in
accordance with State laws or regulations to represent multiple interests, who perform a function or duty
under the Act, must file a statement of employment and financial interests. An employee who occupies a
position which has been determined by the Head of the State Regulatory Authority not to involve
performance of any function or duty under the Act or who is no longer employed by the State Regulatory
Authority at the time a filing is due, is not required to file a statement.
(b) The Head of each State Regulatory Authority shall prepare a list of those positions within the State
Regulatory Authority that do not involve performance of any functions or duties under the Act. State
Regulatory Authorities may be organized to include more activities than are covered by the Act. For
example, if a State has identified its Department of Natural Resources as the State Regulatory Authority
there may be only one or two offices within that Department which have employees who perform any
functions, or duties under the Act. In those cases, the Head of the State Regulatory Authority shall list the
title of boards, offices, bureaus or divisions within the State Regulatory Authority which do not perform
any functions or duties under the Act and list the positions not performing functions or duties under the
Act for only those boards, offices, bureaus or divisions that do have some employees performing
functions or duties under the Act. Only those employees who are employed in a listed organizational unit
or who occupy a listed position will be exempted from the filing requirements of section 517(g) of the Act.
(c) The Head of each State Regulatory Authority shall prepare and submit to the director, an initial listing
of positions that do not involve performance of any functions or duties under the Act within 60 days of the
effective date of these regulations.
(d) The Head of each State Regulatory Authority shall annually review and update this listing. For
monitoring and reporting reasons, the listing must be submitted to the Director and must contain a written
justification for inclusion of the positions listed. Proposed revisions or a certification that revision is not
required shall be submitted to the Director by no later than September 30 of each year. The Head of each
State Regulatory Authority may revise the listing by the addition or deletion of positions at any time he or
she determines such revisions are required to carry out the purpose of the law or the regulations of this
part. Additions to and deletions from the listing of positions are effective upon notification to the
incumbents of the positions added or deleted.
(e) The Secretary or the Director may modify the listing at any time one or both of them determines that
the listing submitted by the Head of a State Regulatory Authority indicates that coverage is not sufficient
to carry out the purpose of the law or the regulations of this part.
[42 FR 56060, Oct. 20, 1977, as amended at 51 FR 37122, Oct. 17, 1986]

§ 705.13 When to file.
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(a) Employees and members of advisory boards and commissions representing multiple interests
performing functions or duties under the Act shall file:

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(1) Within 120 days of the effective date of these regulations; and
(2) Annually on February 1 of each year, or at such other date as may be agreed to by the Director,
provided that such alternative date will allow sufficient time to obtain information needed by the Director
for his or her annual report to the Congress.
(b) New employees and new members of advisory boards and commissions representing multiple interest
hired, appointed, or transferred to perform functions or duties under the Act will be required to file at the
time of entrance to duty.
(c) New employees and new members of advisory boards and commissions representing multiple
interests are not required to file an annual statement on the subsequent annual filing date if this date
occurs within two months after their initial statement was filed. For example, an employee entering duty
on December 2, 1986 would file a statement on that date. Because December 2 is within two months of
February 1 the employee would not be required to file his or her next annual statement until February 1,
1988.
[51 FR 37122, Oct. 17, 1986]

§ 705.15 Where to file.
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The head of the State Regulatory Authority shall file his or her statement with the Director. All other
employees and members of advisory boards and commissions representing multiple interests, as
provided in §705.11, shall file their statements with the head of the State Regulatory Authority or such
other official as may be designated by State law or regulation.
[51 FR 37122, Oct. 17, 1986]

§ 705.17 What to report.
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(a) Each employee shall report all information required on the statement of employment and financial
interests of the employee, his or her spouse, minor children, or other relatives who are fulltime residents
of the employee's home. The report shall be on OSM Form 23 as provided by the Office. The statement
consists of three major parts, (1) a listing of all financial interests, including employment, security, real
property, creditor and other financial interests held during the course of the preceding year, (2) a
certification that none of the listed financial interests represent a direct or indirect financial interest in an
underground or surface coal mining operation except as specifically identified and described by the
employee as part of the certificate and (3) a certification by the reviewer that the form was reviewed, that
prohibited interests have been resolved, and that no other prohibited interests have been identified from
the statement.
(b) Listing of all financial interests. The statement will set forth the following information regarding any
financial interest:
(1) Employment. Any continuing financial interests in business entities and nonprofit organizations
through a pension or retirement plan, shared income, salary or other income arrangement as a result of
prior or current employment. The employee, his or her spouse or other resident relative is not required to
report a retirement plan from which he or she will receive a guaranteed income. A guaranteed income is
one which is unlikely to be changed as a result of actions taken by the State Regulatory Authority.
(2) Securities. Any financial interest in business entities and nonprofit organizations through ownership of
stock, stock options, bonds, securities or other arrangements including trusts. An employee is not
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required to report mutual funds, investment clubs or regulated investment companies not specializing in
underground and surface coal mining operations.
(3) Real Property. Ownership, lease, royalty or other interests or rights in lands or minerals. Employees
are not required to report lands developed and occupied for a personal residence.
(4) Creditors. Debts owed to business entities and nonprofit organizations. Employees are not required to
report debts owed to financial institutions (banks, savings and loan associations, credit unions, and the
like) which are chartered to provide commercial or personal credit. Also excluded are charge accounts
and similar short term debts for current and ordinary household and living expenses.
(c) Employee certification, and, if applicable, a listing of exceptions.
(1) The statement will provide for a signed certification by the employee that to the best of his or her
knowledge, (i) none of the listed financial interests represent an interest in an underground or surface coal
mining operation except as specifically identified and described as exceptions by the employee as part of
the certificate, and (ii) the information shown on the statement is true, correct, and complete.
(2) An employee is expected to (i) have complete knowledge of his or her personal involvement in
business enterprises such as a sole proprietorship and partnership, his or her outside employment and
the outside employment of the spouse and other covered relatives, and (ii) be aware of the information
contained in the annual financial statement or other corporate or business reports routinely circulated to
investors or routinely made available to the public.
(3) The exceptions shown in the employee certification of the form must provide enough information for
the Head of the State Regulatory Authority to determine the existence of a direct or indirect financial
interest. Accordingly, the exceptions should:
(i) List the financial interests;
(ii) Show the number of shares, estimated value or annual income of the financial interests; and
(iii) Include any other information which the employee believes should be considered in determining
whether or not the interest represents a prohibited interest.
(4) Employees are cautioned to give serious consideration to their direct and indirect financial interests
before signing the statement of certification. Signing the certification without listing known prohibited
financial interests may be cause for imposing the penalties prescribed in §705.6(a).
[42 FR 56060, Oct. 20, 1977, as amended at 56 FR 46988, Sept. 17, 1991]

§ 705.18 Gifts and gratuities.
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(a) Except as provided in paragraph (b) of this section, employees shall not solicit or accept, directly or
indirectly, any gift, gratuity, favor, entertainment, loan or any other thing of monetary value, from a coal
company which:
(1) Conducts or is seeking to conduct, operations or activities that are regulated by the State Regulatory
Authority; or
(2) Has interests that may be substantially affected by the performance or non-performance of the
employee's official duty.

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(b) The prohibitions in paragraph (a) of this section do not apply in the context of obvious family or
personal relationships, such as those between the parents, children, or spouse of the employee and the
employee, when the circumstances make it clear that it is those relationships rather than the business of
the persons concerned which are the motivating factors. An employee may accept:
(1) Food and refreshments of nominal value on infrequent occasions in the ordinary course of a luncheon,
dinner, or other meeting where an employee may properly be in attendance; and
(2) Unsolicited advertising or promotional material, such as pens, pencils, note pads, calendars and other
items of nominal value.
(c) Employees found guilty of violating the provisions of this section will be subject to administrative
remedies in accordance with existing or adopted State regulations or policies.

§ 705.19 Resolving prohibited interests.
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(a) Actions to be taken by the Head of the State Regulatory Authority:
(1) Remedial action to effect resolution. If an employee has a prohibited financial interest, the Head of the
State Regulatory Authority shall promptly advise the employee that remedial action which will resolve the
prohibited interest is required within 90 days.
(2) Remedial action may include:
(i) Reassignment of the employee to a position which performs no function or duty under the Act, or
(ii) Divestiture of the prohibited financial interest, or
(iii) Other appropriate action which either eliminates the prohibited interest or eliminates the situation
which creates the conflict.
(3) Reports of noncompliance. If 90 days after an employee is notified to take remedial action that
employee is not in compliance with the requirements of the Act and these regulations, the Head of the
State Regulatory Authority shall report the facts of the situation to the Director who shall determine
whether action to impose the penalties prescribed by the Act should be initiated. The report to the Director
shall include the original or a certified true copy of the employee's statement and any other information
pertinent to the Director's determination, including a statement of actions being taken at the time the
report is made.
(b) Actions to be taken by the Director:
(1) Remedial action to effect resolution. Violations of the regulations in this part of the Head of a State
Regulatory Authority, will be cause for remedial action by the Governor of the State or other appropriate
State official based on recommendations from the Director on behalf of the Secretary. The Governor or
other appropriate State official shall promptly advise the Head of the State Regulatory Authority that
remedial action which will resolve the prohibited interest is required within 90 days.
(2) Remedial action should be consistent with the procedures prescribed for other State employees by
§705.19(a)(2).
(3) Reports on noncompliance.
(i) If 90 days after the Head of State Regulatory Authority is notified to take remedial action the Governor

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or other appropriate State official notifies the Director that the Head of the State Regulatory Authority is
not in compliance with the Act and these regulations, the Director shall report the facts of the situation to
the Secretary who shall determine whether the action to impose the penalties prescribed by the Act, or to
impose the eligibility restrictions prescribed by §705.1 should be initiated.
(ii) Within 30 days of receipt of a noncompliance report from the Head of a Regulatory Authority under
§705.19(a)(3), the Director shall notify the Head of the State Regulatory Authority and the employee
involved of additional action to be taken. Actions which the Director may take include but are not limited to
the granting of additional time for resolution or the initiation of action to impose the penalties prescribed
by the Act.

§ 705.21 Appeals procedures.
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Employees have the right to appeal an order for remedial action under §705.19, and shall have 30 days to
exercise this right before disciplinary action is initiated.
(a) Employees other than the Head of the State Regulatory Authority, may file their appeal, in writing,
through established procedures within their particular State.
(b) The Head of the State Regulatory Authority may file his or her appeal, in writing, with the Director who
will refer it to the Conflict of Interest Appeals Board within the U.S. Department of the Interior.
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