COMMISSIONERS

Jim Berlow

Program Implementation and Information Division

Office of Resource Conservation and Recovery

U .S. Environmental Protection Agency

1200 Pennsylvania Avenue, N.W. (5303 P)

Washington, DC 20004

Dear Mr. Berlow:

GOV DAVID A PATERSON

New York. Chairman

GOV MARTIN O'MALLEY

Maryland. Treasurer

GOV BOB RILEY

Alabarna

GOV MIKE BEEBE

Arkansas

GOV PAT QUINN

Illinois

GOV MITCHELL E DANIELS

Indiana

GOV STEVEN L. BESHEAR

Kentucky

GOV BOBBY JINDAL

Louisiana

GOV JA Y NIXON

Missouri

GOV BEVERLY EAVES PERDUE

North Carolina

We are writing as a follow up to a briefing that we received from you on July

7 concerning EP A's CERCLA 1 08(b ) rulemaking for the hardrock mining sector.

There were several concerns from the states following the briefing that I want to

bring to your attention. Most of these relate to EP A's " Approach to Analysis" and

"Significant Issues",

GOY JOHN HOEYEN

North Dakota

GOY TED STRICKLAND

Ohio

GOY BRAD HENRY

Oklahoma

GOY EDW ARD G RENDELL

Pennsylvania

One of the most important issues is the type of system or approach being

designed by EP A to ensure implementation of the Section 1 08(b ) program. We

understand that one option under consideration by EP A is a single financial

responsibility number that is applicable to an entire class of facilities. Our

experience is that such a broad brush approach generally does not work well for

mining operations and that any financial responsibility program must be tailored to

site specific conditions. It might be possible to develop a checklist ofkey

components that should be included in a financial responsibility program, but each

mine will require a separate and independent analysis to determine the appropriate

amount and type of financial assurance, based on a number of factors. Many state

regulatory programs applicable to hardrock mines already contain many of these

factors and we would be happy to discuss them with you in detail.

GOY MARK SANFORD

South Carolina

GOY PHIL BREDESEN

Tennessee

GOV RICK PERRY

Texas

In this regard, we believe that EP A should consider, as part of its rulemaking,

whether the hardrock mining sector should be considered a separate class of facilities

that are already permitted and bonded by state regulatory authorities. For instance,

many of the states tie their financial assurance programs to approved plans that

address reclamation, closure and post-closure obligations. In some cases, these

requirements may cover more than the EP A program. Where the states are not

regulating these facilities, then EP A could exercise its 1 08(b ) authority and establish

separate financial responsibility requirements. However, where the states have

programs in place that are no less stringent than what EP A might otherwise require,

those programs should take precedence and be deferred to by EP A. This approach

would recognize that state regulation effectively mitigates the "degree and duration

of risk" associated with that industry. See CERCLA Sec. lO8(b)(1).

CiOV ROBERT F MCI)ONNELL

Virginia

GOV JOE MANCHIN III

West Virginia

ASSOCIATE MEMBERS

GOY SEAN PARNELL

Alaska

GOY BILL RITTER

Colorado

GOY BILL RICHARDSON

New Mexico

GOY GARY R HERBERT

Utah

GOV Wyoming DAVE FRJ::UDENTHAl

,

EXECUTIVE DIRECTOR

GREGORY CONRAD

445-A Carlisle Drive. Hemdon. V A 20170

Phone: 703/709-8654 Fax: 703/709-8655

Web Address: www.imcc.isa.us E-Mail: gconrad@imcc.isa.us or bbotsis@imcc.isa.us

July 15,2010
We understand that EP A has had one of its contractors looking at state regulatory

programs to detennine the types of financial responsibility programs that may already address

EP A's "risky practices/classes." Nearlyall of the states on the July 7 conference call had not

been contacted by EP A's contractor and there was concern about whether EP A is receiving the

correct information about our programs. Some states have also requested meetings with EP A to

discuss the matter but have not yet had the opportunity to meet. IMCC would be willing, in this

regard, to arrange for a meeting between EP A and the mining states to discuss this information in

detail. Given the overlap with federal programs administered by the Bureau of Land

Management and the U.S. Forest Service, we believe it would be appropriate to include them in

such a meeting as well.

Another significant issue raised during the briefing was the topic of preemption. The

states have serious concerns about how and the degree to which the preemption provision at

Section 114 of CERCLA would be applicable to existing state financial assurance programs. If a

mining operation was in compliance with EP A's financial responsibility requirements and was

therefore deemed no longer subject to state requirements based on the preemption theory, such a

result would undermine the effectiveness of significant components of state regulatory programs.

One example provided during the briefing involved a state groundwater protection program that,

without effective state financial assurance as a part thereof, would be significantly undermined.

This will likely be repeated in other states as well. Similarly, where a state's program covers

more components than the EP A program but is preempted by the latter, the result would be the

gutting of the state's reclamation and closure plans, especially as these are tied to financial

obligations.

It should be noted that state financial assurance programs may be structured so as to comingle funds for different obligations (reclamation, closure and post-closure), which in turn may

result in a larger aggregate amount that would be available to the regulatory authority as needed.

This arrangement would be distinctly different than what EP A appears to be considering,

whereby smaller amounts would be limited to more narrowly defined purposes, particularly if

divided between state and federal programs. The end result would be reduced environmental

protection, increased regulatory complexity, and a greater likelihood that some issues and

concerns could go unaddressed.

During the briefing, EP A mentioned that it has developed infonnation on 51 state mining

financial assurance programs in 40 states that could be affected by preemption. We would be

very interested in receiving and reviewing this infonnation. We would also be interested in

reviewing any "model program" that EP A might consider developing to address financial

responsibility, particularly as that program would interrelate with existing state requirements.

There were several other questions raised following the briefing including:

What if a state's financial responsibility requirements are more stringent than EP A's?

What happens in the case of a forfeiture where there is shared financial responsibility?

What is the role ofBLM and the Forest Service with regard to EPA's proposed

rulemaking, especially on public lands?

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. Are there mines currently regulated by the states that already would fall into the "highest

level of risk" as presently defined by EP A under Section 1 08(b )?

Has EP A allowed enough time in its proposed rulemaking timetable to adequately

consider and address all of the issues that attend the rulemaking, particularly the

state/federal interplay regarding financial responsibilities requirements?

.

In general, the states believe that they currently have financial responsibility programs in

place that are working well and that should not be preempted by any program developed by EP A

pursuant to Section 1 08(b ) of CERCLA. While we recognize the fact that the states cannot be

delegated authority under CERCLA, we assert that EP A can defer to existing state programs that

are as effective as EPA's soon-to-be developed program. In this regard, we attach a resolution

recently adopted by the Western Governors' Association that addresses this issue. We believe

that the best option for EP A to pursue at this point is the designation of those facilities that are

already regulated by the states as a separate class of facilities that do not require EP A

intervention. We welcome the opportunity to pursue this option with you further.

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Executive Director

cc. Ben Lesser

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