BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 110
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          Date of Hearing:   June 28, 2011

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mike Feuer, Chair
                      SB 110 (Rubio) - As Amended:  June 8, 2011

                    PROPOSED CONSENT (As Proposed to Be Amended)

           SENATE VOTE  :  39-0
           
          SUBJECT  :  REAL PROPERTY DISCLOSURES: MINING OPERATIONS

           KEY ISSUE  :  SHOULD A THIRD-PARTY EXPERT REPORT USED BY A SELLER 
          TO COMPLY WITH REQUIREMENTS TO DISCLOSE INFORMATION ABOUT 
          NATURAL HAZARDS TO BUYERS OF REAL PROPERTY ADDITIONALLY REQUIRE 
          DISCLOSURE THAT THE PROPERTY FOR SALE IS WITHIN ONE MILE OF A 
          MINING OPERATION, AS SPECIFIED?

           FISCAL EFFECT  :  As currently in print this bill is keyed 
          non-fiscal.

                                      SYNOPSIS
          
          Existing law requires the seller of real property to make 
          certain disclosures to the prospective buyer about the proximity 
          of the property to natural hazard zones designated under the 
          Public Resources Code.  This non-controversial bill would expand 
          those disclosures by requiring an expert report commonly used to 
          fulfill the natural hazard disclosure requirements to include a 
          specified Notice of Mining Operation if the property is within 
          one mile of a mining operation, as specified.  As proposed to be 
          amended, this bill would no longer condition mining disclosure 
          requirements upon a Notice of Reclamation Plan Approval recorded 
          with the county recorder, but instead disclosure would depend on 
          whether the property is within one mile of a mining operation 
          that, pursuant to existing law, is required to annually report 
          certain identifying information about itself, including 
          longitude and latitude map data, to the Department of 
          Conservation.  This information is maintained in a statewide 
          database by the Department's Office of Mining Reclamation (OMR), 
          a database that proponents contend offers a more comprehensive 
          and convenient source of reliable information on mining 
          operations than available through county recorder offices, and 
          will thus further the policy objective of this bill to maximize 
          accurate disclosure of the proximity of mining operations for 








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          the benefit of both prospective property buyers and mine owners. 
           As proposed to be amended, the bill is supported by the 
          California Construction and Industrial Materials Association 
          (CalCIMA), several mining companies, and two major disclosure 
          companies whose job it is to prepare and distribute natural 
          hazard and other disclosure reports to purchasers of real 
          property.  This bill did not receive any "no" votes in the 
          Senate and has no known opposition.

           SUMMARY  :  Requires seller disclosure to prospective buyers of 
          real property that the property is located within one mile of a 
          mining operation.  Specifically,  this bill  :    

          1)Requires an expert who produces a natural hazard disclosure 
            report to determine, utilizing map coordinate data made 
            available by the Office of Mine Reclamation, whether the 
            property is presently located within one mile of a mine 
            operation for which map coordinate data has been reported to 
            the Department of Conservation pursuant to Section 2207 of the 
            Public Resources Code. 

          2)Requires the report, if the residential property is within one 
            mile of the mine operation, to contain the following notice:

            "NOTICE OF MINING OPERATIONS

            This property is located within one mile of a mine operation 
            for which the mine owner or operator has reported mine 
            location data to the Department of Conservation pursuant to 
            Section 2207 of the Public Resources Code.  Accordingly, the 
            property may be subject to inconveniences resulting from 
            mining operations.  You may wish to consider the impacts of 
            these practices before you complete your transaction."
          
           EXISTING LAW  :  

          1)Requires the owner or the operator of any mining operation 
            within the state to forward to the director of the Department 
            of Conservation ("Department") annually a report that 
            identifies specified information, including but not limited 
            to:

             a)   The name, address, and telephone number of the person, 
               company, or other owner of the mining operation. 
             b)   The location of the mining operation, its name, its 








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               latitude, longitude, and approximate boundaries of the 
               mining operation marked on a specified United States 
               Geological Survey map.
             c)   The name of the lead agency.  (Public Resources Code 
               Section 2207.)

          2)Requires a seller of real property that is located within one 
            of several specified hazard zones, to disclose to any 
            prospective purchaser the fact that the property is located 
            within one of these zones.  Disclosure is required if either: 

             a)   The seller or agent has actual knowledge that the 
               property is within a special flood hazard area, an area of 
               potential flooding, a very high fire hazard severity zone, 
               a wildland area having substantial forest fire risk, an 
               earthquake fault zone, or a seismic hazard zone;

             b)   The local jurisdiction has compiled a list, by parcel, 
               of properties within the zone, or has created a map that 
               includes the property, and then posted a notice at the 
               offices of the county recorded, assessor or planning agency 
               that identifies the location of the parcel list or map.  
               (Civil Code Section 1103.)

          3)Requires the above disclosures to be made upon a copy of the 
            Natural Hazard Disclosure Statement, as specified.  (Civil 
            Code Section 1103.2.)  

          4)Allows a seller of property to use an expert report or opinion 
            from a licensed engineer, land surveyor, geologist, or expert 
            in natural hazard discovery to satisfy the above natural 
            hazard disclosure requirements with respect to determination 
            of whether the property, by virtue of its location, is:

             a)   Within an airport influence area, as defined;
             b)   Within the jurisdiction of the San Francisco Bay 
               Conservation and Development Commission; 
             c)   Within one mile of property certain designated farmland 
               areas.  (Civil Code Section 1103.4.) 

          5)Requires a real property seller, or the seller's agent, to 
            disclose to buyers any material facts that would have a 
            significant and measurable effect on the value or desirability 
            of the property (if the buyer does not know, and would not 
            reasonably discover, those facts).  (Karoutas v. Homefed Bank 








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            (1991) 232 Cal.App.3d 767; Reed v. King (1983) 145 Cal.App.3d 
            261.)

          6)Requires a seller's real estate broker to conduct a reasonably 
            competent and diligent visual inspection of a property offered 
            for sale, and to disclose to potential buyers any facts 
            revealed that would materially affect the value or 
            desirability of the property.  (Civil Code Section 2079.)
           
          COMMENTS  :  Existing law requires the seller of real property to 
          make certain disclosures to the prospective buyer about the 
          proximity of the property to specified natural hazard zones 
          designated under the Public Resources Code.  This bill would 
          expand those disclosures by requiring an expert report commonly 
          used to fulfill the natural hazard disclosure requirements to 
          include a specified "Notice of Mining Operations" if the 
          property for sale is located within one mile of a mine 
          operation, as specified.  As proposed to be amended, this bill 
          would no longer condition mining disclosure requirements upon a 
          Notice of Reclamation Plan Approval recorded with the county 
          recorder, but instead disclosure would depend on whether the 
          property is within one mile of a mining operation that, pursuant 
          to existing law, is required to annually report certain 
          identifying information about itself, including longitude and 
          latitude map data, to the Department of Conservation.  This 
          information is maintained in a statewide database by the 
          Department's Office of Mining Reclamation (OMR), a database that 
          proponents contend offers a more comprehensive and convenient 
          source of reliable information on mining operations than 
          available through county recorder offices, and will thus further 
          the policy objective of this bill to maximize accurate 
          disclosure of the proximity of mining operations for the benefit 
          of both prospective property buyers and mine owners.

           Need for the bill  :  According to California Construction and 
          Industrial Materials Association (CalCIMA), the sponsor of this 
          bill, the increased urbanization of California has resulted in 
          the encroachment of some mining operations by residential 
          properties or other land uses in areas where these mining 
          operations formerly operated with few neighbors.  CalCIMA 
          states:

               Aggregates are a scarce natural resource . . . needed 
               to build our cities, homes and roads.  Aggregate mining 
               operations are often permitted on the outskirts of 








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               metropolitan areas.  However, homes and other 
               developments frequently get built up around the 
               aggregate operations.  These owners are often unaware 
               of the adjacent mining operation.  This can result in 
               conflicts and operations may have to cease early, or be 
               limited in their operations and supply of materials.  
               In effect, the ability to utilize available natural 
               resources has been limited.  

               This bill will require that new purchasers of property 
               be notified of adjacent mining operations, just as they 
               are for agricultural operations.  Ensuring that the 
               communities around these facilities are aware of their 
               presence is an important step to ensuring their 
               continued viability.

          According to the author, this bill is intended to ensure that 
          prospective purchasers have knowledge of adjacent industrial 
          uses and approved reclamation work use prior to purchasing 
          property, and are aware of the location of information on 
          reclamation plans governing the end use configuration of 
          adjacent mining property.

           This bill expands the scope of the existing Natural Hazard 
          Disclosure Statement to include mining operations .  Since 1998, 
          existing law requires sellers and their agents to issue a 
          Natural Hazard Disclosure Statement to buyers in real property 
          transactions.  The statement requires the seller or agent to 
          indicate whether a property is within any one of several 
          specified natural hazard zones, such as a high fire hazard 
          severity zone or an earthquake fault zone.  The seller may make 
          the disclosure statement directly to the prospective buyer or by 
          employing a third-party expert report pursuant to Civil Code 
          Section 1103.4.  When an expert report is used to satisfy the 
          disclosure requirement, the report must disclose whether the 
          property is located: (1) within an airport influence area, (2) 
          within the jurisdiction of the San Francisco Bay Conservation 
          and Development Commission, or (3) within one mile of designated 
          farmland properties.
            
          In order to facilitate the informed purchase of property that 
          may be impacted by proximity to mining operations, this bill 
          would additionally require the expert to determine, and disclose 
          in his or her report, whether the property is within one mile of 
          any mining operation identified and regulated by the Department 








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          of Conservation, as specified.  Like an airport or agricultural 
          farming operation, these mining operations may impact the use 
          and enjoyment of nearby property, and thus prospective owners 
          should be aware of the potential effects (e.g. noise, dust, 
          traffic or transport concerns) that mining operations may 
          produce.

           Disclosure requirement triggered when sale property is within 
          one mile of mining operation.   As recently amended, this bill 
          now requires expert disclosure within the Natural Hazard 
          Disclosure Statement when it is determined that the property for 
          sale is within a one mile radius of an identified mining 
          operation, rather than the previous radius of 1,000 feet.  
          According to the author, increasing this distance to one mile is 
          intended to mirror the one mile radius from designated farmland 
          properties that triggers disclosure under the same section of 
          existing law.  

          The author contends that the impact of living near a large-scale 
          agricultural operation is similar in many ways to the impact of 
          living near a mining operation.  For example, agricultural and 
          mining operations may both produce excess noise, dust, and light 
          pollution, and both may increase traffic associated with large 
          transport vehicles trucking materials in and out of the farm or 
          mining property along roads close to residential dwellings.  
          Agricultural and mining operations also may start very early in 
          the morning or around the clock, and vary in intensity according 
          to seasonal weather.  For these reasons, the bill reasonably 
          adopts a one-mile radius for disclosure of mining operations 
          that is consistent with parameters of the agricultural model.

           Background on mine information reported by the mine owner to the 
          state and county  :  Under Section 2207 of the Public Resources 
          Code, owners and operators of mining operations within the state 
          must annually provide to the Department specified identifying 
          information, including but not limited to the name, address, and 
          telephone number of the person, company, or other owner of the 
          mining operation, and the latitude, longitude, and approximate 
          boundaries of the mining operation marked on a specified United 
          States Geological Survey map.  The statute also requires most of 
          the same information to be submitted to the county where the 
          mine is located, in its function as the lead agency that 
          oversees mine operations in its local jurisdiction.  In both 
          cases, the information is self-reported by the mine owner or 
          operator and not independently verified by either the Department 








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          or the lead agency, so any inaccuracy in the data (including the 
          map coordinate data) is attributable to the owner's report, not 
          the entity compiling the database.

           As proposed to be amended, this bill adopts a different source 
          of information from which mining operations shall be identified 
          for purposes of the disclosure requirement.   Currently, the bill 
          requires expert determination and possible disclosure of whether 
          a property for sale is located within one mile of property 
          subject to mine operations identified in a Notice of Reclamation 
          Plan Approval recorded with the county recorder.  However, 
          according to a number of disclosure companies whose job it is to 
          research and prepare disclosure reports for purchasers of real 
          property, the Notice of Reclamation Plan Approval document is 
          often not easily accessible from many county recorder offices, 
          is often not formatted or stored in a standardized manner, and 
          does not typically contain latitude or longitude coordinates 
          (sometimes referred to as "GIS map data") that are needed to 
          accurately determine the proximity of the property to a mine 
          operation.  

          As proposed to be amended, this bill would no longer condition 
          mining disclosure requirements upon the Notice of Reclamation 
          Plan Approval recorded with the county recorder.  Instead, the 
          author proposes to amend the bill so that the disclosure 
          requirement is conditioned on whether GIS map coordinate data 
          for the mine operation has been reported to the Department of 
          Conservation, pursuant to Section 2207 of the Public Resources 
          Code.  This information is compiled into a single database 
          maintained by the Office of Mine Reclamation (OMR), within the 
          Department of Conservation, and currently can be requested from 
          OMR through a form on their website.

          After consultation with stakeholders and the Department, the 
          author has determined that the OMR database of all mines within 
          the state appears to provide a better, more comprehensive source 
          of mine location data that is also more accessible than that 
          typically available from county recorders' offices.  Therefore, 
          to further the bill's objective to maximize accurate disclosure 
          of nearby mining operations for the benefit of both prospective 
          property buyers and mine owners, the author now proposes the 
          following amendments:

               On page 4, strike lines 29 to 39, and strike page 5 in its 
               entirety, and replace with:








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               (4)   In responding to the request, the expert shall 
               determine, utilizing map coordinate data made available by 
               the Office of Mine Reclamation, whether the property is 
               presently located within one mile of a mine operation for 
               which map coordinate data has been reported to the director 
               pursuant to Section 2207 of the Public Resources Code.  If 
               the expert determines, from the available map coordinate 
               data, that the residential property is located within one 
               mile of such a mine operation, the report shall contain the 
               following notice:

               NOTICE OF MINING OPERATIONS:

               This property is located within one mile of a mine 
               operation for which the mine owner or operator has reported 
               mine location data to the Department of Conservation 
               pursuant to Section 2207 of the Public Resources Code.  
               Accordingly, the property may be subject to inconveniences 
               resulting from mining operations.  You may wish to consider 
               the impacts of these practices before you complete your 
               transaction.
           
          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Construction and Industrial Materials Association 
          (CalCIMA) (sponsor)
          California Cement Manufacturers Environmental Coalition (CCMEC)
          Fidelity National Financial/Disclosure Source 
          First American Natural Hazard Disclosure Company
          Sespe Consulting, Inc.
          Specialty Minerals, Inc.
          Vulcan Materials Company, Western Division
          Werner Corporation
           
            Opposition 
           
          None on file


           Analysis Prepared by  :    Anthony Lew / JUD. / (916) 319-2334 










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