Rep. Stephanie Herseth Sandlin, D-S.D., voted against a bill that would rewrite federal mining law.

HR2262, which the House passed Thursday, would require hard-rock mining companies to pay royalties on minerals extracted from public lands.

"I don't disagree with the underlying intent of the bill," Herseth Sandlin said. Money from the royalties would pay for cleanups of old mines.

But Herseth Sandlin, South Dakota's lone member of the House, said the revenue-distribution formula passed by the House favored bigger mining states like Nevada.

She also objected to a 4 percent royalty on gross revenues, rather than net profits. That would disproportionately hurt small companies such as the Pacer Corp., which employs 38 people to mine mica near Custer.

Pacer president Duff Kruse said the gross-revenue tax would amount to a "minerals tariff" on U.S. producers. Kruse said he already can't sell mica on the West Coast because China can mine it and ship it across the Pacific Ocean cheaper than Pacer's cost.

Kruse and Herseth Sandlin also objected to a provision that would make it easier for environmentalists to sue mining companies, even if the companies are complying with permits. Even if the lawsuits failed, Kruse said, he'd be stuck with the cost of defending his company.

Environmentalists generally support the law, including Dick Fort, of ACTion for the Environment in the Black Hills, though he said he understood Herseth Sandlin's objections. "She may have a couple of good points there," he said.

Still, Fort was disappointed she didn't vote for the measure. "My feeling is, pass something and improve it as we go along," he said.

Herseth Sandlin said she might vote for the measure if her objections were answered in a House-Senate conference committee version of the bill, but so far, there is no Senate version of the bill.

Fort said he was surprised the measure got this far, and he didn't expect it to become law. "We may need a more sympathetic administration for that," he said.

Contact Bill Harlan at 394-8424 or bill.harlan@rapidcityjournal.com