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Legislation & Regulation

Legislative and Regulatory Update

December 2010 by Scott Harn

• The good, the bad, and the ugly
The November elections changed the picture considerably when it comes to legislation.

The Good. We may actually get to see how screwed up the Federal Reserve Bank is when Democrats lose control of the House come January 2011.

Congressman Ron Paul (R-Texas) is in line to chair the House subcommittee on Domestic and International Monetary Policy, the committee that oversees the Federal Reserve.

Paul authored the book, End the Fed, and also authored several bills over the past few years that would have required an audit of the government agency if approved by Congress. He has spoken many times about his desire to rein in government spending and reduce deficits. And, he is in favor of restoring the gold standard, which would require every US Dollar to be backed by gold.

While Paul won’t likely be successful in his goals to reinstate the gold standard or to shut down the Federal Reserve system, it certainly will be entertaining to see him match wits with Fed Chairman Ben Bernanke and attempt to expose some of the backroom deals that took place with the $700 billion Troubled Asset Relief Program, better known as TARP, and the bailouts of companies like AIG and Goldman Sachs.

Expect to see more gridlock in Congress come January with a Democratic Senate and a Republican House. In our view, we all benefit when Congress cannot pass countless new laws and regulations. Many bills were under consideration that were unfavorable to miners, including increased mining claim maintenance and location fees, hefty royalties, and placing millions of additional acres off-limits to mining. Many of these bills will be difficult, if not impossible, to pass in the new Congress.

Cap-and-trade legislation, which would have created an entirely new regulatory mess for all businesses, appears to be dead.

The Bad. There’s still a “lame duck” session of Congress, which has already commenced and could continue until December 17. Those who have lost their reelection bids have nothing to lose. Democrats are still in control until the end of the year, and there is plenty of damage that can be done before they head out the door. Watch for unfavorable legislation attached to spending bills. There is still a minute possibility that an omnibus lands bill could be voted upon before Congress adjourns. Over 170 environmental groups sent a letter to Congress on November 10, asking for a vote on a package of 20 land bills that would designate 2 million acres off-limits to mining and other development. These bills include BLM and national forest lands in California, Colorado, Idaho, Montana, New Mexico and South Dakota.

The Ugly. The current administration still has plenty of tools at their disposal to wreak havoc on miners. Administrative policies, directives, and executive orders can still be used to try to restrict mining and other public land uses. The EPA continues down a path toward regulating greenhouse gas emissions without the approval of Congress. And, there is currently no recourse if President Obama utilizes the Antiquities Act to place additional lands off-limits by creating new national monuments.

• California and Oregon dredge permits
California. The new draft Environmental Impact Report on suction gold dredging in California is scheduled to be released in late December 2010, assuming there are no further delays. We expect to see a heavy handed approach to regulation based on past experiences with California’s Department of Fish & Game, and it will be of utmost importance for miners to stay involved in this process.

Meanwhile, several lawsuits are still slowly making their way through California courts, with no early resolution in sight.

Oregon. Oregon miners are continuing their battle with the Oregon Department of Environmental Quality. The Eastern Oregon Mining Association (EOMA) appealed a Court of Appeals decision to the Oregon Supreme Court regarding the requirement for a 700PM permit for suction dredging from 2005.

In a ruling that ignored all case precedent, the Court of Appeals stated that both an Army Corps 402 and 404 are required, but DEQ lacked the authority to regulate 404-type discharges.

While the appeal to the Supreme Court was pending, DEQ issued a new 2010 700PM permit that was essentially identical to the previous one, ignoring the Court of Appeals ruling. And because a new 700PM permit was issued, the Oregon Supreme Court dismissed the appeal as moot.

A new round of lawsuits have now been filed by EOMA and the Waldo Mining District, challenging the 2010 700PM permit. The Northwest Environmental Defense Center, Klamath-Siskiyou Wildlands Center and Rogue Riverkeeper have also filed a lawsuit against DEQ, claiming the new permit is not restrictive enough.

The Waldo Mining District and EOMA are in need of donations to help fund these lawsuits.
     Waldo Mining District
     PO Box 1574
     Cave Junction, OR 97523

     EOMA
     PO Box 932
     Baker City, OR 97814

by Scott Harn

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