Summary
This regulation implements Section 8 of the Mineral Leasing Act of 1920, creating a federal licensing system for coal mining on federal lands for domestic needs. It permits only individuals, associations, municipalities, charitable organizations, and relief agencies (explicitly excluding private corporations) to obtain licenses. Municipalities can mine nonprofit coal for resident household use only, with acreage caps based on population (320-2,560 acres) and 4-year terms. Individuals/associations face 40-acre limits and 2-year terms. Coal must be used without profit. A separate provision allows relief agencies to obtain government coal for free distribution to low-income families (max 20 tons/family/year). All operations require Surface Mining Officer permits and licenses are revocable for violations.
Reason
This regulation imposes massive market distortions by prohibiting private corporations from mining, banning profit, capping acreage arbitrarily, and creating a government allocation system instead of competitive markets. The compliance bureaucracy (applications, fees, permits, renewals, tonnage tracking) imposes significant hidden costs while preventing efficient, large-scale mining operations that could deliver cheaper coal to Americans. The welfare provision through coal distribution is economically inferior to cash transfers. Federal coal resources should be leased through competitive bidding, not restricted licensing that favors municipalities and relief agencies. The regulation's New Deal-era collectivist approach violates free enterprise principles and serves no legitimate modern purpose.