COMMENTS: Comprehensive Environmental Response, Compensation, and Liability Act

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August 17, 2016

Honorable Gina McCarthy
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W. (1101A)
Washington, D.C. 20460

Dear Administrator McCarthy:

The Western Governors’ Association (WGA) appreciates the opportunity to provide comments on the Environmental Protection Agency’s (EPA) federalism assessment for the agency’s pending rulemaking under section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) for the hardrock mining industry.


WGA represents the Governors of 19 western states and three U.S.-flag islands. The Association is an instrument of the Governors for bipartisan policy development, information exchange and collective action on issues of critical importance to the western United States.

As stated in WGA Policy Resolution 2014-07, Bonding for Mine Reclamation, (1) all western states in which mining occurs have staff dedicated to ensuring that ongoing mine operations develop and follow appropriate reclamation plans. It is in Western states’ legal and economic interest to assure hardrock mining facilities are designed, constructed and operated to minimize risks to the environment and ensure reclamation objectives will be completed. State regulators ensure proper mine closure on both private and public lands, and they coordinate with federal land management agencies to ensure financial assurance is adequate.

Western Governors understand EPA will soon publish a notice of proposed rulemaking (NOPR) under section 108(b) of CERCLA, pursuant to a D.C. Circuit court approval of a negotiated settlement between EPA and several non-governmental organizations. (2) Western Governors and state regulators have ongoing concerns regarding substantive and technical aspects of EPA’s pending NOPR. Those matters are likely to be addressed in individual state and mining industry comments. This comment letter focuses on concerns surrounding the process by which EPA has approached this rulemaking. 

Rule Development Process Concerns

WGA Policy Resolution 2014-09, Respecting State Authority and Expertise, (3) articulates Western Governors’ view of meaningful federal-state consultation. Governors believe federal agencies should consult with them and their regulators on a substantive basis at the earliest stages of problem identification and federal decision-making, prior to the publication of policy proposals. Consultation and engagement should continue through formal rulemaking and policy-making processes and during the implementation phase. While publication of this NOPR is mandated, EPA has not offered to engage in substantive consultation with Western Governors since late January.

The agency has recently chosen to engage with state partners on a perfunctory basis. EPA has not, however, engaged in substantive discussion of the pending proposed rule. The agency has been unwilling or unable to share a draft of the proposed rule or information regarding the formula EPA will use to calculate required financial assurance amounts.

Western Governors, the Interstate Mining Compact Commission (IMCC), the Environmental Council of the States (ECOS), and the Association of State and Territorial Solid Waste Management Officials (ASTSWMO) have requested pre-publication review of EPA’s proposed rule. Absent such review, these groups have requested from EPA substantive information on the proposed rule. That information has not been provided. EPA did not address concerns expressed or substantive questions posed in WGA’s March 29, 2016 letter to your attention (4) during the May 18, 2016 federalism consultation meeting in Washington, D.C.; in EPA’s June 9, 2016 response letter to WGA; (5) or in either of the “short-term working group” calls held with states on July 7 and 19, 2016.

In the March 29 WGA letter to EPA, Western Governors requested substantive consultation well before launch of a formal rulemaking. Western Governors further requested that they – and state regulators – be afforded an opportunity to review EPA’s proposal before submission to the White House Office of Management and Budget for finalization. In addition, Western Governors requested EPA provide the following information:

  • A detailed state consultation timeline and plan for obtaining individual state comments from Governors and state regulators;
  • All technical and scientific materials and analyses used to support any proposed rule and an indication of whether such materials were peer-reviewed;
  • A statement indicating how EPA solicited ideas about alternative methods of compliance and potential flexibilities in order to reduce the economic burden placed on affected entities;
  • A statement indicating how EPA solicited information from Governors and state regulators as to whether or not the proposed rule will duplicate similar state requirements;
  • A copy of a federalism assessment or the reason why EPA did not complete a federalism assessment;
  • Explanation of the reason existing state programs are insufficient to address the concerns and an analysis of any conflicts in the proposed rule with state programs; and
  • Analysis of financial assurance instruments that would satisfy any proposed EPA requirement.

EPA has not provided this information to Western Governors. To date, Governors and state regulators have been afforded only assurances that EPA’s rule will not duplicate or preempt existing state regulations. EPA has, for example, expressed a, “belie[f] that the approach to the proposed rule that is currently under consideration will address the issues,” raised by Governors. (6) Despite ongoing requests, no draft language has been provided to Western Governors to clarify EPA’s approach. The Governors believe that EPA should provide Governors and state regulators an opportunity to review a pre-publication copy of the draft rule, model and formula for calculation of financial assurance amounts as that is the only manner to ensure EPA’s engagement with states will be substantive and meaningful.

Federal Preemption of State Law

Western Governors remain concerned that EPA’s pending financial assurance regulation for the hardrock mining industry may preempt existing state regulations. This concern was raised in the March 29 WGA letter on this subject and has been consistently reiterated to the agency in subsequent communications. While we appreciate EPA’s consistent expression of its intent not to pursue regulation having a preemptory effect, (7) absent clear communication from EPA regarding the substance of its planned rule proposal, our concerns remain substantively unaddressed.

State Letters

EPA has cited the following four letters, addressed to Jim Berlow, Director of the Program Implementation and Information Division of the EPA Office of Resource Conservation and Recovery, as evidence that agency action under section 108(b) of CERCLA will not preempt existing state law:

  • February 11, 2011 letter from the Office of the Alaska Attorney General;
  • February 24, 2011 letter from the Water Quality Division of the Arizona Department of Environmental Quality;
  • February 28, 2011 letter from the Office of the Colorado Attorney General; and
  • February 28, 2011 letter from the New Mexico Environment Department.

EPA’s use of these letters is evidence that five years ago the agency sought substantive state input for a then-contemplated CERCLA financial assurance rulemaking. These letters do not – in and of themselves – indicate that EPA’s pending proposal will not be preemptive. While these letters are still valid and are not antiquated, EPA is taking them out of context. Western Governors view EPA’s use of these letters as problematic for several reasons, including:

  • The 2011 state letters were written to express four states’ concerns over potential preemption and not as expressions of the states’ beliefs that EPA financial assurance regulations would be patently non-preemptive in nature.
  • The letters were not written in response to a draft EPA rule. They merely opine on existing state regulation and the need for EPA to avoid preempting state law.
  • These letters establish that differences exist between various states’ financial assurance regulations. EPA should view these differences as evidence that a blanket regulatory scheme is not workable. Further, due to the differences of states’ regulations, pre-publication review of a draft rule would be useful to identify areas of potential preemption.
  • These letters represent only four states. It is inappropriate for EPA to view them as representative of all western states.

Federalism Consultation Meeting

EPA held a Federalism Consultation for CERCLA 108(b) meeting on May 18, 2016, consistent with Executive Order 13132. (8) This meeting was attended by representatives from WGA, ECOS, IMCC and ASTSWMO. We appreciate EPA’s willingness to hold such a meeting, despite the agency’s classification as an independent regulatory agency. Section 3, Federalism Policymaking Criteria, of President Clinton’s Executive Order 13132 states in part: (9)

“When undertaking to formulate and implement policies that have federalism implications, agencies shall:

    • Encourage [s]tates to develop their own policies to achieve program objectives and to work with appropriate officials in other states;
    • Where possible, defer to [s]tates to establish standards;
    • In determining whether to establish uniform national standards, consult with appropriate [s]tate and local officials as to the need for national standards and any alternatives that would limit the scope of national standards or otherwise preserve [s]tate prerogatives and authority; and
    • Where national standards are required by [f]ederal statutes, consult with appropriate [s]tate and local officials in developing those standards.”

We would contend that the Federalism Consultation meeting did not constitute substantive consultation with the states. Specific aspects of EPA’s proposal were not discussed. When asked during this meeting whether EPA would provide draft language to states prior to publication, EPA staff were adamant in their response that they were not “allowed” to do so. EPA staff did not, however, state what statute or regulation precluded distribution of the draft to state partners.

Governors expect EPA’s consultation process to respect states as sovereigns and full partners, not simply as stakeholders or members of the public. Western Governors believe that providing them a draft rule, model and formula for calculation of bond amounts in the pre-publication stage is appropriate and the only manner to ensure the engagement of states is substantive and meaningful. (10)

Additional Industry Sectors

The January 29, 2016 D.C. Circuit court order directed EPA to determine by December 1, 2016 whether to issue notices of proposed rulemaking on CERCLA 108(b) financial assurance requirements for (a) chemical manufacturing; (b) petroleum and coal products manufacturing; and (c) electric power generation, transmission and distribution industries. During the May 18 federalism consultation meeting, EPA indicated the agency plans to utilize that meeting not only as satisfying state consultation regarding the hardrock mining industry, but also the other three industries for which EPA may seek to establish financial assurance requirements. The possibility that EPA would deem the May 18 meeting to satisfy consultation for all industries is unacceptable.

Given the importance of these industries for state economies – and the expectation that states will be respected as sovereign and full partners – Western Governors again request that substantive consultation with state partners be pursued by EPA in the manner set forth in WGA Policy Resolution 2014-09. This substantive consultation should far exceed that provided for the pending hardrock mining rule and should involve state review of draft language prior to any rule’s proposal.


Development of – and consultation with state partners regarding – EPA’s pending financial assurance rule for the hardrock mining sector has proven unsatisfactory. Though EPA has initiated opportunities for engagement between federal, state and industry partners regarding this proposal, those opportunities have not been transparent, participatory, or collaborative. State engagement opportunities have lacked the substantive depth necessary to alleviate concerns over potential preemption and duplication of state programs.

We request EPA provide Western Governors answers to the questions posed in the March 29 WGA letter to EPA, and reiterated herein, and that EPA provide Governors and state regulators with the draft rule, model and formula for calculation of bond amounts for the hardrock mining financial assurance rule before its publication. Similarly, we request EPA substantively consult with states – in a manner consistent with WGA Policy Resolution 2014-09 – with regard to potential financial assurance regulation of the (a) chemical manufacturing; (b) petroleum and coal products manufacturing; and (c) electric power generation, transmission and distribution industries well in advance of rule publication.


Steve Bullock
Governor of Montana
Chair, WGA

Dennis Daugaard
Governor of South Dakota
Vice Chair, WGA

(1) Attached and incorporated by reference.
(2) Order In re: Idaho Conservation League, et al., No. 14-1149 (D.C. Cir. Jan. 29, 2016).
(3) Attached and incorporated by reference.
(4) Attached and incorporated by reference.
(5) Responding to the March 29, 2016, WGA letter.
(6) June 9, 2016 letter from EPA to Western Governors, page 1.
(7) Id. at page 2.
(8) Executive Order 13132 – Federalism (August 4, 1999).
(9) Id. at section 3(d)(1)-(4).
(10) WGA Policy Resolution 2014-09: Respecting State Authority and Expertise, section B(4)(b).

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