BILL ANALYSIS Ó ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2011-2012 Regular Session | | | ----------------------------------------------------------------- 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 1 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, 2 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 3 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) 4 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 5 National Cement Company of California, Inc. Teichert & Son, Inc. West Coast Aggregates, Inc. Beacon Concrete Inc. OPPOSITION None Received 6