BILL ANALYSIS                                                                                                                                                                                                    



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          SENATE THIRD READING
          SB 108 (Rubio)
          As Amended  August 26, 2011
          Majority vote 

           SENATE VOTE  :39-0  
           
           NATURAL RESOURCES   9-0         APPROPRIATIONS      17-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Chesbro, Knight,          |Ayes:|Fuentes, Harkey,          |
          |     |Brownley, Dickinson,      |     |Blumenfield, Bradford,    |
          |     |Grove, Halderman, Hill,   |     |Charles Calderon, Campos, |
          |     |Monning, Skinner          |     |Davis, Donnelly, Gatto,   |
          |     |                          |     |Hall, Hill, Lara,         |
          |     |                          |     |Mitchell, Nielsen, Norby, |
          |     |                          |     |Solorio, Wagner           |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Amends the definition of an idle mine by taking a 
          snapshot of a five-year period, rather than the life of the 
          mine, to determine if production has been curtailed to the point 
          where the interim management plan (IMP) requirements should 
          apply; allows a mining operator to come into compliance with the 
          Surface Mining and Reclamation Act's (SMARA) idle mine 
          requirements by July 1, 2013, if the operator has neglected to 
          prepare an interim management plan as required by law.  
          Specifically,  this bill:

           1)Defines idle mines as those at which operations are curtailed 
            for a period of one year or more by more than 90% of the 
            maximum annual mineral production within any of the last five 
            years and where there is an intent to resume surface mining 
            operations at a future date.

          2)Permits a mine operator who has failed to properly report a 
            mine's mineral production or mine status on its annual report 
            to the director of the Department of Conservation (DOC) to 
            correct the report in its 2012 annual report if the following 
            occurs:

             a)   The 2012 annual report is submitted on or before July 1, 
               2013; and, 









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             b)   The lead agency confirms in writing to the DOC all of 
               the following:

               i)     The operator has notified the lead agency and the 
                 director of DOC that it intends to continue surface 
                 mining operations and provides evidence to support any 
                 production modified on the corrected annual report;

               ii)    The operator has an existing, valid permit or a 
                 vested right to conduct surface mining operations; 

               iii)   The operator's reclamation plan has been approved 
                 and is in compliance with SMARA and the mining operation 
                 is in compliance with the approved reclamation plan, has 
                 an approved financial assurance in place, and has been 
                 inspected by the lead agency.  The Office of Mine 
                 Reclamation may enter a mine site to conduct an 
                 inspection; and, 

               iv)    The operator demonstrates that there are 
                 commercially useful mineral reserves remaining at the 
                 permitted surface mining operation.

          3)Requires payment of all unpaid fees for the years during which 
            the operation's status was not properly reported.

          4)Allows a mine operation that is considered abandoned because 
            it became idle and did not have an approved IMP to return to 
            the idle status at the request of the operator if an IMP is 
            approved by July 1, 2013, and 2) and 3) above are met.

          5)Requires the mine operator to be responsible for the 
            reasonable costs of an inspection conducted by the Office of 
            Mine Reclamation pursuant to 2) b) iii) above.

           EXISTING LAW  :

          1)Prohibits conducting surface mining operations without first 
            obtaining a permit, submitting a reclamation plan, and 
            providing financial assurances to a lead agency, which is 
            usually a local government.   

           2)Requires a surface mining operator to submit an IMP to the 
            lead agency for review and approval within 90 days of a 








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            surface mining operation becoming idle.  
           
           3)Defines idle mines as those at which operations are curtailed 
            for a period of one year or more by more than 90% of the 
            previous maximum annual mineral production and where there is 
            an intent to resume surface mining operations at a future 
            date.

          4)Requires that an IMP, among other things, provide measures for 
            maintaining the site in a safe and stable condition.

          5)Establishes that an IMP is an amendment to the applicable 
            reclamation plan and is not subject to the California 
            Environmental Quality Act.
           
           6)Allows an IMP to remain in effect for a period not to exceed 
            five years, at which time the lead agency shall either:  a) 
            renew the IMP for another period not to exceed five years if 
            the surface mining operator has complied fully with the IMP; 
            or, b) require the surface mining operator to commence 
            reclamation in accordance with its approved reclamation plan.
           
           7)Classifies a surface mining operation that remains idle for 
            over one year without an approved IMP as "abandoned" and 
            requires the operator to commence and complete reclamation in 
            accordance with the approved reclamation plan.

          8)Requires the owner or the operator of a mining operation 
            within the state to annually provide the director of the 
            Department of Conservation with a report that identifies, 
            among other things, the mining operation's status (i.e., 
            active, idle, reclaimed, or in the process of being reclaimed) 
            and the commodities produced by the mine and the type of 
            mining operation.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, unknown one-time costs, potentially exceeding 
          $200,000 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.

           COMMENTS  :  According to a 2011 State Mining and Geology Board 
          report, lack of operator adherence to statutory requirements can 
          result in many surface mining operations becoming abandoned even 








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          if such operations had an intent to resume mining.  
           
           Currently, 97 mines should have IMPs but only 35 have them, and 
          35 lead agencies (more than 28% of all lead agencies in 
          California) had mines that required IMPs but did not have them 
          in place.

          Lack of operator compliance with SMARA's idle mine requirements, 
          and lack of IMP monitoring by SMARA lead agencies, has resulted 
          in many surface mining operations becoming statutorily 
          abandoned, even if such operations had an intent to resume 
          mining.

          In the report's conclusion, the State Mining and Geology Board 
          highlights the need for legislative action to provide relief to 
          operators that failed to follow statutory requirements for IMPs.

          This bill provides a brief amnesty period for a mining operator 
          who did not adhere to SMARA's statutory requirements regarding 
          IMPs.  Specifically, this bill will allow a mining operator to 
          come into compliance with the idle mine requirements by July 1, 
          2013.  Without this amnesty, an operator of a mine that has 
          inadvertently become abandoned will be forced to execute its 
          reclamation plan.  If an operator wishes to resume mining, it 
          would be able to do so once reclamation is completed and new 
          permits are obtained.  This would lead to an absurd and 
          unproductive result since the operator would have to essentially 
          undue the reclamation work it was required to complete. 

          This bill also amends the definition of an idle mine by taking a 
          snapshot of a five year period, rather than the life of the 
          mine, to determine if production has been curtailed to the point 
          where the interim management plan requirements should apply.  
          This amendment is in response to the recession and will prevent 
          a mine from becoming idle simply because the demand for 
          materials is significantly lower than usual.


           Analysis Prepared by  :    Mario DeBernardo / NAT. RES. / (916) 
          319-2092 


                                                                FN: 0002287









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