BILL ANALYSIS Ó 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 SB 108 Page 2 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. SB 108 Page 3 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