BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 108| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 : 77-0, 9/7/11 - See last page for vote SUBJECT : Surface mining: idle mines SOURCE : California Construction and Industrial Materials Association CONTINUED SB 108 Page 2 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, (4) authorize a mine to return to idle status after being considered abandoned if an interim management plan is approved by July 1, 2013, and (5) clarify that modifications to production data on an annual report will be supported with evidence, that a mine operator complying with compliance orders issued by the state or lead agency is in compliance and eligible to adjust their mine status, and make it clear a mine operator seeking relief under this measure does so without prejudice. 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 SB 108 Page 3 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 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 SB 108 Page 4 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 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 SB 108 Page 5 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 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 SB 108 Page 6 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 9/8/11) 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. Granite Construction National Cement Regional Council of Rural Counties SEPE Consulting Specialty Minerals Inc. Vulcan Materials Company Werner Corporation West Coast Aggregates, Inc. OPPOSITION : (Verified 9/8/11) 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 SB 108 Page 7 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 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." ASSEMBLY FLOOR : 77-0, 9/7/11 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Furutani, Gorell, Hueso CTW:kc 9/8/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** SB 108 Page 8