BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 108|
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                              UNFINISHED BUSINESS


          Bill No:  SB 108
          Author:   Rubio (D)
          Amended:  9/2/11 
          Vote:     21

           
           SENATE NATURAL RES. AND WATER COMMITTEE  :  9-0, 4/26/11
          AYES:  Pavley, La Malfa, Cannella, Evans, Fuller, Kehoe, 
            Padilla, Simitian, Wolk

           SENATE APPROPRIATIONS COMMITTEE  :  8-0, 5/16/11
          AYES:  Kehoe, Alquist, Emmerson, Lieu, Pavley, Price, 
            Runner, Steinberg
          NO VOTE RECORDED:  Walters

           SENATE FLOOR  :  39-0, 5/23/11 (Consent)
          AYES:  Alquist, Anderson, Berryhill, Blakeslee, Calderon, 
            Cannella, Corbett, Correa, De León, DeSaulnier, Dutton, 
            Emmerson, Evans, Fuller, Gaines, Hancock, Hernandez, 
            Huff, Kehoe, La Malfa, Leno, Lieu, Liu, Lowenthal, 
            Negrete McLeod, Padilla, Pavley, Price, Rubio, Runner, 
            Simitian, Steinberg, Strickland, Vargas, Walters, Wolk, 
            Wright, Wyland, Yee
          NO VOTE RECORDED:  Harman

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Surface mining:  idle mines

           SOURCE  :     California Construction and Industrial 
          Materials Association

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           DIGEST  :    This bill 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 operation 
          that became idle and that failed to get an approved IMP and 
          was thus considered abandoned prior to January 1, 2013 to 
          be returned to idle status if an IMP is approved by July 1, 
          2013 and various requirements, as specified, are met.

           Assembly Amendments  (1) authorize the Office of Mine 
          Reclamation to enter any mine site for which a mine 
          operator has requested a correction of mine status in order 
          to conduct an inspection, (2) require the mine operator to 
          be responsible for the reasonable cost of this inspection, 
          (3) authorize a mine operator who has failed to properly 
          report mineral production or status prior to January 1, 
          2012, to correct the report in the 2012 annual report if 
          the report is submitted on or before July 1, 2013, and (4) 
          authorize a mine to return to idle status after being 
          considered abandoned if an interim management plan is 
          approved by July 1, 2013.

           ANALYSIS  :    Existing law, under the Surface Mining and 
          Reclamation Act (SMARA) of 1975:

          1. Prohibits a person from conducting a surface mining 
             operation unless, among other things, a reclamation plan 
             has been submitted to and approved by the lead agency 
             for the operation. 

          2. Requires an operator, within 90 days of a surface mining 
             operation becoming idle, to submit to the lead agency 
             for review and approval, an IMP. 

          3. Defines "idle" to mean a curtailment for a period of one 
             year or more of surface mining operations by more than 
             90 percent of the operation's previous maximum annual 
             mineral production, with the intent to resume those 
             surface mining operations at a future date.

          4. Requires a surface mining operation that remains idle 
             for over one year after becoming idle, without obtaining 

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             approval of an IMP, in certain circumstances, to be 
             considered abandoned and requires the operator to 
             commence and complete reclamation in accordance with the 
             approved reclamation plan.

          5. Authorizes an IMP to remain in effect for a period not 
             to exceed five years, after which, the lead agency is 
             authorized to take certain actions, including renewing 
             the IMP for another period not to exceed five years, if 
             the lead agency finds that the surface mining operator 
             has complied fully with the IMP.

          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 percent of the maximum annual mineral production 
             within any of the last five years during which an IMP 
             has not been approved and where there is an intent to 
             resume surface mining operations at a future date. 

          2. Allows 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 
             (CDC) to attach corrected annual reports to the 2012 
             annual report so long as the corrected annual reports 
             are submitted on or before July 1, 2013 and if the lead 
             agency and the director of CDC confirms in writing all 
             of the following: 

             A.    The operator has provided written notification to 
                the lead agency that it intends to continue surface 
                mining operations; 

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

             C.    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 or applicable compliance order 
                issued pursuant to SMARA, has an approved financial 
                assurance in place that the lead agency determines is 
                adequate for reclamation pursuant to the approved 

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                reclamation plan, and the mining operation has been 
                inspected by the lead agency. The Office of Mine 
                Reclamation may enter a mine site to conduct an 
                inspection; 

             D.    The operator has demonstrated that there are 
                commercially useful mineral reserves remaining at the 
                surface mining operation; 

             E.    Unpaid fees for the years during which the 
                operation's status was not properly reported have 
                been paid to CDC; and 

             F.    The operator provides evidence to support any 
                modified production reported on corrected annual 
                reports. 

          3. Allows a mine operation that became idle that failed to 
             prepare and have approved an IMP and was thus considered 
             abandoned by law prior to January 1, 2013, to return to 
             idle status, without prejudice, at the request of the 
             operator if an IMP is approved by July 1, 2013 and upon 
             lead agency verification of compliance with #2 above. 

          4. Requires the mine operator to be responsible for the 
             reasonable costs of an inspection conducted by the 
             Office of Mine Reclamation pursuant to #2C above.

           Background
           
          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 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 

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          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 CDC.  A lead agency 
          must respond in writing to any comments from the CDC.  
          Typically, the IMP 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 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 CDC along with appropriate reporting fees, 
          and are subject to annual inspections.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Assembly Appropriations Committee, unknown 
          one-time costs, potentially exceeding $200,000 to the CDC 
          during 2011-12 and 2012-13 to inspect mines for which the 
          owners seek to change the mine's status from abandoned to 
          idle.

           SUPPORT  :   (Verified  8/30/11)

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          California Construction and Industrial Materials 
          Association (source)
          California Cement Manufacturers Environmental Coalition
          CalPortland
          CEMEX
          County of Siskiyou - Board of Supervisors
          Frank B. Marks Son, Inc.
          National Cement
          Regional Council of Rural Counties
          SEPE Consulting
          Specialty Minerals Inc.
          Vulcan Materials Company
          Werner Corporation
          West Coast Aggregates, Inc.

           OPPOSITION  :    (Verified  8/30/11)

          Department of Conservation
          Department of Finance

           ARGUMENTS IN SUPPORT  :    The author's office and sponsor, 
          the California Construction and Industrial Materials 
          Association (CalCIMA) state that this 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's office 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's office 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 this bill and 
          they all assert that current law inadvertently penalizes 
          operators who experience decreased construction activity.  
          They strongly support provisions in SMARA that would 

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          provide expanded opportunities to file IMPs.

           ARGUMENTS IN OPPOSITION  :    The Department of Finance is 
          opposed to this bill because (1) "this bill results in 
          additional costs on the Surface Mining and Reclamation 
          Account for monitoring work by Conservation, which is not 
          reflected in the 2011 Budget Act," and (2) "this bill does 
          not require a mining operator to update the reclamation 
          plan or provide proof of adequate financial assurance if it 
          changes its status from abandoned to idle or active."


          CTW:kc  9/7/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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