BILL ANALYSIS                                                                                                                                                                                                    





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          |                                                                 |
          |         SENATE COMMITTEE ON NATURAL RESOURCES AND WATER         |
          |                   Senator Fran Pavley, Chair                    |
          |                    2011-2012 Regular Session                    |
          |                                                                 |
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          BILL NO: SB 108                    HEARING DATE: April 26, 2011  

          AUTHOR: Rubio                      URGENCY: No  
          VERSION: As Introduced             CONSULTANT: Bill Craven  
          DUAL REFERRAL: No                  FISCAL: Yes  
          SUBJECT: Surface mining: idle mines.  
          
          BACKGROUND AND EXISTING LAW
          The Surface Mining and Reclamation Act (SMARA) requires that a 
          mine operator prepare a reclamation plan that is approved by the 
          lead agency, which is usually a local government. When an 
          operator decides to idle a surface mining operation, SMARA 
          requires the operator to prepare an interim management plan 
          (IMP) for approval by the lead agency. Idle mines are defined as 
          those at which operations are curtailed for a period of one year 
          or more by more than 90 percent of the previous maximum annual 
          mineral production and where there is an intent to resume 
          surface mining operations at a future date. If there is no 
          intent to resume mining, a mine is considered either active (and 
          presumably going through the reclamation process) or abandoned. 

          When a mine is idled, SMARA requires an IMP to be submitted to 
          the lead agency for review and approval within 90 days. The lead 
          agency has 60 days to review and approve the IMP, although there 
          are provisions in the law for these deadlines to be extended 
          upon mutual agreement. Because the IMP is considered an 
          amendment to a reclamation plan, it is also subject to review by 
          the Department of Conservation (department). A lead agency must 
          respond in writing to any comments from the department. 
          Typically, the interim management plan addresses public health 
          and safety issues that must be addressed until operations are 
          resumed and often include runoff, drainage, erosion control, and 
          temporary fencing.

          SMARA also provides for an appeals process if the lead agency 
          denies approval of the IMP. IMPs may remain in effect for a 
          period not to exceed five years. At that point, the lead agency 
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          may renew the IMP for another five year period if the operator 
          is in compliance with SMARA. If that does not happen, the 
          operator must begin mining or reclamation. If the plan is not 
          filed, the mine is considered abandoned and the operator is 
          responsible for beginning the reclamation process. In most 
          circumstances, mines that have been idle for more than one year 
          and have not obtained an IMP shall be considered abandoned and 
          the operator must begin reclamation.  

          The IMP is considered an amendment to the applicable reclamation 
          plan and is not subject to the California Environmental Quality 
          Act. 

          Idle mines must maintain approved financial assurances for 
          reclamation and like active mines, must file an annual report 
          with the department along with appropriate reporting fees, and 
          are subject to annual inspections. 



          PROPOSED LAW
          This bill would make four major changes to state law with regard 
          to idle mines. 

          First, the bill would enlarge from one to five years the 
          timeline by which the 90 percent reduction in production is 
          measured. 

          Second, the bill would create a series of exceptions that would 
          allow a mine that would normally be considered idle to be exempt 
          from that status and allowed to remain active. These exceptions 
          include:

           (1) Mines that produced during any 12-month period in the prior 
          two years either 25,000 or more combined tons of mineral and 
          waste or 10 percent or more of the operation's previous maximum 
          annual combined production of mineral and waste within any of 
          the last five years.
           
           (2) The operator of the surface mining operation has expended 
          in the prior two years twenty-five thousand dollars ($25,000) or 
          more on capital improvements or operating costs in connection 
          with the surface mining operation.
            
           (3) The operator of the surface mining operation has curtailed 
          production at the surface mine as a result of circumstances 
          beyond the reasonable control of the operator, including, 
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          without limitation, force majeure events, legal action, 
          regulatory or judicial orders, strikes, work slowdowns or 
          stoppages, lockouts, governmental restrictions, inability to 
          secure necessary supplies, materials or labor, or acts or 
          failures to act of third parties upon whom the operator's 
          ability to conduct surface mining operations is dependent. 
           
          (4) The operator of the surface mining operation can otherwise 
          demonstrate that the surface mining operation is not in fact 
          idle.

          Third, the bill would authorize a lead agency to continuously 
          renew an IMP for additional 5-year periods provided the operator 
          is in compliance with the IMP.

          Fourth, the bill allows lead agencies to order operators to file 
          an IMP if an operation remains idle for more than one year 
          without an IMP. Such IMPs would be in effect for five years, and 
          the bill would also add to SMARA provisions authorizing 
          operators to appeal such an order. 

          ARGUMENTS IN SUPPORT 
          The author and sponsor, the California Construction Industrial 
          Materials Association (CalCIMA) state that the bill is needed 
          because the current definition of "idle is unnecessarily narrow 
          and not suitable for mines facing ebbs or spikes in demand 
          caused by large public works projects or, alternatively, 
          depressed construction activities. The author and CalCIMA point 
          out that a year or two of high demand followed by a drop-off in 
          demand could trigger a requirement for an IMP as would a 
          depressed economy that causes a longer-term decrease in demand. 

          The author and sponsor also state that the determination of 
          "idle" when made by a lead agency could result in the immediate 
          initiation of reclamation without the operator being aware of 
          that determination. They are also concerned that existing law is 
          ambiguous regarding how many IMP renewals may be granted by a 
          lead agency. 

          Several mining companies are in support of the bill and they all 
          assert that current law inadvertently penalizes operators who 
          experience decreased construction activity. They strongly 
          support provisions in SMARA that would provide expanded 
          opportunities to file IMPs. 

          ARGUMENTS IN OPPOSITION
          None received
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          COMMENTS 
          1.The Committee should be aware that this bill has been the 
            subject of negotiations between the industry, the author, the 
            department and committee staff and the proposed amendments 
            reflect the agreements that have been reached thus far. The 
            negotiations will continue after this hearing. 

          2.The Committee may determine that the basic change in the 
            definition of "idle" (shifting to a five-year basis instead of 
            a one-year basis) is reasonable in order to establish a longer 
            snapshot of activity upon which to base a determination of 
            whether an operation is or is not idle. Additionally, there is 
            agreement among all the parties that, regardless of the 
            literal application of the definition of "idle," that 
            operators should have an opportunity to demonstrate that their 
            operation is not, in fact, idle. Language to that effect will 
            be added to the bill although for now the proposed language on 
            page 3, lines 21-22 shall remain as placeholder language.  
            (Amendment 1) 

          3.With one minor exception, the Committee may also consider 
            approving the provisions in this bill identified above that 
            would authorize a lead agency to renew an IMP for additional 
            5-year periods provided the operator is in compliance with the 
            IMP and that would allow lead agencies to order operators to 
            file an IMP if an operation remains idle for more than one 
            year without an IMP and the related procedural provisions. The 
            exception is that the word "continuously" on page 6, line 14 
            is extraneous and should be deleted. This amendment has been 
            agreed to by all the parties. (Amendment 2)

          4.One of the major objectives of the author and sponsor is to 
            expand the opportunity of mine operators to file IMPs and to 
            establish the correct status of a mine as either idle, active, 
            abandoned, or undergoing reclamation. According to technical 
            information provided by the department, 306 mines are 
            reporting active that have no production. Clearly, the mining 
            industry and the department need an opportunity to clarify 
            what mines are active and what mines are not. 

            This has been one of the major topics in the ongoing 
            discussions of this bill. Committee staff is in agreement with 
            the author's objective. However, in the meetings on this bill, 
            there is agreement that the proposed language should be 
            deleted pending further discussions. (Amendment 3)

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            There is also agreement that a new provision of the bill 
            should involve a conditional amnesty program for operators who 
            establish the correct status of their mining operations. That 
            provision may be added to the bill assuming it moves forward. 

          5. Other issues are also under discussion. For example the 
            author and sponsors proposed on page 7 a series of provisions 
            that would apply when the review of an IMP is pending or on 
            appeal. There is not yet agreement on these provisions and the 
            parties have agreed to delete them pending further discussion. 




          It bears emphasizing that the central objective of this bill is 
          worth achieving. Many mines are not properly classified as 
          either active, idle, abandoned, or undergoing reclamation and 
          the department and operators would benefit if there were a 
          general re-setting of the clock and an opportunity to correctly 
          establish a mine's status. The author and sponsors have agreed 
          that committee staff will continue to participate in the 
          discussions and that the bill may be re-heard in this Committee 
          at a future date should the chair so request. 

          Other provisions of Sec. 2770 may be obsolete, and those 
          provisions will be proposed for deletion in a subsequent 
          hearing. 

          SUGGESTED AMENDMENTS 
          
          AMENDMENT 1  
          Page 3, lines 3-20, delete , and delete lines 23-25. 

          AMENDMENT 2. 
          Page 6, line 14. Delete "continuously." 

          AMENDMENT 3. 
          Page 7, lines 11-40, delete and delete all of page 8. 


          SUPPORT
          California Cement Manufacturers Environmental Coalition
          Holliday Rock Company, Inc.
          Basic Resources, Inc.
          California Construction & industrial Materials Association
          Vulcan Materials Company, Western Division
          Lehigh Hanson
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          National Cement Company of California, Inc.
          Teichert & Son, Inc.
          West Coast Aggregates, Inc.
          Beacon Concrete Inc.


          OPPOSITION
          None Received







































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