EPA, Vitter Spar Over Small Firm Outreach on Mining Insurance

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By Brian Dabbs

Nov. 2 — The Environmental Protection Agency’s insistence that it is complying with small businesses outreach rules as it crafts a hardrock mining insurance proposal is being challenged by a top Senate Republican.

Senate Small Business Committee Chairman David Vitter (R-La.) contested EPA compliance with those statutory rules to Bloomberg BNA Nov. 1, just weeks after Vitter and a Republican colleague argued the EPA is falling short on the outreach.

Meanwhile, EPA spokeswoman Monica Lee told Bloomberg BNA the agency is continuing to receive input from a small business panel in line with the Small Business Regulatory Enforcement Fairness Act (SBREFA), a 1996 statute that amended the Regulatory Flexibility Act.

The hardrock mining financial assurance proposal (RIN:2050-AG61), which is nearing a court-mandated Dec. 1 finalization, aims to secure insurance tools, such as bonds and sureties, to cover any hazardous discharges under Superfund law. The proposal is currently undergoing review at the White House Office of Management and Budget (OMB) which often includes meetings with interested parties.

Hardrock mining extracts minerals that contain gold, silver, iron, copper, zinc, nickel, tin, lead and other metals, as opposed to, for instance, coal. The EPA says it will exempt certain categories of facilities from requiring assurances, such as mines less than five acres in size and stream bed mines that don’t use hazardous substances.

Ongoing Outreach Concerns

“[President Barack] Obama and his political EPA’s failure to listen to small business concerns has been a big problem of this Administration,” Vitter told Bloomberg BNA. “Paying small businesses lip service and going through the motions is not good enough, and we expect the EPA to actually use the information given by these hardrock mining businesses to ensure unnecessary burdens are not being implemented on the industry.”

The EPA “failed” to include small business representatives in its rulemaking process and therefore violated the law, Rachel Ledbetter, a Vitter spokeswoman, told Bloomberg BNA.

EPA’s Lee declined to release information to Bloomberg BNA on the number of small businesses likely to be affected by the rulemaking, saying that information will surface following the early December release of the proposal.

Companies have litigated against rulemakings citing noncompliance with SBREFA and the Regulatory Flexibility Act in the past.

Amount of Affected Facilities

The EPA identifies mining small businesses as operations with 1,500 employees or less. That will require roughly 65 small businesses to comply with the new rulemaking, Colorado-based Michael Herrmann, a mining insurance expert with Legacy Risk Solutions LLC, said citing EPA communications.

Bonnie Gestring, a mining expert with the nonprofit environmental advocacy group Earthworks, suggested the proposal is likely to force compliance from a broad range of small businesses.

“I suspect that will include a lot of facilities, since 1,500 employees is a large number these days—particularly in light of increased mechanization within the industry,” said Gestring.

In contrast with industry and Western states, Earthworks is a staunch supporter of the rulemaking, citing EPA’s past needs to expend public resources associated with reclamation of abandoned mines.

“Regardless of size, financial assurance is a reasonable cost of doing business, given that metal mining is the leading source of toxic releases in the U.S.,” she told Bloomberg BNA. “The intent of the proposed rule is to protect taxpayers from incurring the cost of mine clean-up.” Gestring pointed to Alaskan state information on its mining industry, which reveals a workforce of less than 1,500 employees at all “major mines.”

Beth Botsis, deputy director of the Interstate Mining Compact Commission, told Bloomberg BNA small business representatives are opposed to both EPA’s outreach and what they know about the plan.

EPA Defends Compliance

In late August, the agency convened a Small Business Advocacy Review panel, consisting of EPA, Small Business Administration and OMB officials, Mathy Stanislaus, EPA Assistant Administrator, told Vitter in a September letter.

Small business representatives deliver commentary on the proposal to the panel, the EPA says.

The August panel launch would have teed up an EPA report by late October on small business and other implications of the proposal, the letter said.

“The EPA takes its responsibilities related to the Regulatory Flexibility Act and SBREFA seriously,” Stanislaus said. “Throughout the proposed rulemaking process, the EPA has provided information to enable the [small business representatives] and other interested parties to understand our current thinking and provide us with individual input.”

A Bloomberg BNA Freedom of Information Act request disclosed an August letter crafted by Senators Vitter and Jim Inhofe (R-Okla.) and sent to EPA Administrator Gina McCarthy, which challenged EPA SBREFA compliance, prompting Bloomberg BNA’s contact with Vitter’s office and the agency.

The August letter cites an EPA April communication with small business representatives and an early June meeting with those representatives. An EPA spokeswoman didn’t respond to a request to release documentation linked to that outreach effort.

To contact the reporter on this story: Brian Dabbs in Washington at bdabbs@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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