BILL ANALYSIS
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2009-2010 Regular Session |
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BILL NO: SB 1103 HEARING DATE: March 23, 2010
AUTHOR: Aanestad URGENCY: No
VERSION: As Introduced CONSULTANT: Bill Craven
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Surface mining: idle mines: low gross exemption.
BACKGROUND AND EXISTING LAW
The California Surface Mining and Reclamation Act (SMARA)
regulates mines, mine reclamation, and the financial assurances
that mine operators post to ensure compliance with the
provisions of state law. SMARA is administered by the Department
of Conservation.
Some fairly arcane provisions of SMARA deal with mines that are
"idle" and mines that qualify for a reduced fee based on a lack
of economic activity. The reduced fee is called a "low gross
exemption" fee. Operators of idle mines must maintain compliance
with SMARA by submitting an Interim Management Plan within 90
days of becoming idle. The IMP describes how the mine will be
maintained during the idle period. Once an IMP is approved by
the lead agency, it is valid for 5 years. While a mine is idle,
the operator can resume operations or at the end of the 5 year
period, renew the IMP. Mines that are out of compliance with
these provisions are considered abandoned. The department states
that approximately 100 mines in California are idle. Another 136
mines are idle in fact, but have not reported themselves as
idle, probably in the hope of avoiding the requirement to
prepare an IMP.
Under SMARA, a mining operation is classified as idle when its
annual production drops below 10% of the operation's previous
maximum annual production for at least one year, and there is an
intent on the part of the operator to resume mining in the
future. If there is no such intent, the mine is considered to be
active or abandoned.
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The minimum fee for an active or idle mine is $3,407.
The "low gross exemption" fee is an annual $468 fee. This status
may be approved by the department but it may only be used by
mine operators whose gross income was less than $100,000 per
year, and when the material is extracted from one surface mining
operation and the lead agency (usually a local government) has
approved a reclamation plan and financial assurances are in
place. Applicants may appeal a denial of this status to the
State Mining and Geology Board.
PROPOSED LAW
This bill would allow an idle surface mine to qualify for a low
gross exemption fee.
ARGUMENTS IN SUPPORT
According to the author, this is a reasonable piece of
legislation that allows a temporarily idle mine to pay a
significantly lower fee than an active mine. The author believes
that the "idle" status of a mine is related to poor economic
conditions.
ARGUMENTS IN OPPOSITION
None received.
COMMENTS
If the Committee decides to endorse the approach of this bill,
staff suggests that the operative provisions be re-drafted as
reflected in Amendment 1, below.
The Appropriations Committee may consider the possible effect on
other fees if by chance all of the idle mines (100) and the 136
mines that have not produced for two years decide to apply for
the low gross exemption and the possible effect on other mining
operators.
SUGGESTED AMENDMENTS
AMENDMENT 1
Redraft of Page 5, lines 35-40
In addition to 14 CCR 3699, a single operator or mining
company with a single mining operation that becomes idle
pursuant to Sec. 2727.1 and the regulations of the State
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Mining and Geology Board may qualify, on a calendar year
basis, for the annual low gross exemption, pursuant to all
of the provisions of Section 3699 of Title 14 of the
California Code of Regulations, provided that the operator
of the mining operation is in compliance with all
applicable provisions of this section and Chapter 9
{SMARA} and its implementing regulations, including the
provisions of PRC Section 2770 subdivisions (h)(1)-(h)(6).
SUPPORT
None Received
OPPOSITION
None Received
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