BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 108
                                                                  Page  1

          Date of Hearing:   July 13, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     SB 108 (Rubio) - As Amended:  June 20, 2011 

          Policy Committee:                              Natural 
          ResourcesVote:9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill makes statutory definitions and reporting requirements 
          to ensure active mines are not inaccurately classified as idle.  
          Specifically, this bill:

          1)Defines idle, when used to refer to a surface mine, as one at 
            which operations are curtailed for a period of one year or 
            more by more than 90% of the maximum annual mineral production 
            compared with production during any of the last five years and 
            where there is an intent to resume surface mining operations 
            at a future date.   (This differs from the current statutory 
            definition of idle, which determines curtailment by comparing 
            current operations with maximum annual mineral production over 
            the life of the mine.)

          2)Allows a mine operator who has failed to properly report a 
            mine's mineral production or mine status prior to January 1, 
            2012, to correctly report production or mine status in the 
            mine's 2012 annual report if it is submitted on or before July 
            1, 2013, and if the lead agency makes certain findings, in 
            writing, to the Department of Conservation.

           FISCAL EFFECT  

          Potential one-time costs of an unknown amount to the Department 
          of Conservation during 2011-12 and 2012-13 to inspect mines for 
          which the owners seek to change the mine's status from abandoned 
          to idle.  

          Actual costs will depend upon the number of mines seeking a 
          change in status.  The department indicates there are 306 mines 








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          that would be affected by this bill.  The department estimates 
          that, should half of those 306 mines require inspection, the 
          department would face costs of about $350,000-equivalent to the 
          work of 2.5 positions.  However, the department would not be 
          able to recover these increased costs through fees on mine 
          operators because the annual budget of the department's Office 
          of Mine Reclamation currently reaches its statutory cap of $3.5 
          million, adjusted for inflation.  (See Public Resources Code 
          Section 2207(d)(3).)  Therefore, the department would have to 
          absorb any costs resulting from this bill, possibly to the 
          detriment of other department functions.

           COMMENTS  

           1)Rationale  .  The author intends this bill to prevent productive 
            or potentially productive surface mines from being legally 
            defined as abandoned.

           2)Background.    Under the Surface Mining and Reclamation Act 
            (SMARA), lead agencies must have adopted a surface mining 
            ordinance, approved by the Department of Conservation's State 
            Mining and Geology Board, before approving mining operations 
            in their jurisdictions. The ordinance must specify 
            requirements for mine operation permits, as well as 
            requirements for reclamation plans and maintenance of 
            financial assurances.

            In order to legally operate a mine, a mine operator must 
            possess a surface mining permit and an approved reclamation 
            plan. In general, a reclamation plan describes the nature of 
            the surface mining operation and explains how the land will be 
            restored after mining ceases, noting such concerns as 
            controlling groundwater contamination, rehabilitating habitat, 
            and stabilizing geological features.  Operators must also 
            provide financial assurances to cover the costs the local 
            government or the state would incur if either has to reclaim 
            the land in the event the operator fails to do so. 


            SMARA also requires lead agencies annually to inspect all 
            mines in their jurisdictions. These inspections in part are to 
            determine whether mine operators are operating in accordance 
            with the approved reclamation plan and mining permit. Mine 
            operators are responsible for the cost of inspection.









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            In addition, mine operators are required to report annually to 
            the lead agency and the department's Office of Mine 
            Reclamation. The report must describe the mining operation 
            during the previous calendar year and must include specified 
            information pertaining to ownership, production, land 
            disturbance and documentation of financial assurances, 
            reclamation plans and inspections. 


            A mining operation is legally considered idle if production is 
            curtailed by more than 90% of the previous maximum annual 
            mineral production for a period of one year or more and there 
            is intent to resume surface mining operations at a future 
            date.  An idle mine differs from an abandoned mine, in that 
            the latter is considered an active mine for which production 
            permanently has ceased and that must undergo reclamation, 
            consistent with a reclamation plan.


            A recent report by the State Mining and Geology Board noted 
            that, because of the failure of mine operators to follow 
            reporting requirements, many mines that have temporarily cut 
            back on production become legally classified as abandoned and 
            subject to reclamation requirements, despite mine owners' 
            intention to resume mining operations.

           3)Support  . This bill is supported by organizations representing 
            mining interests.

           4)There is no formal opposition registered to this bill.  

           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081