BILL ANALYSIS                                                                                                                                                                                                    Ó





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          |                                                                 |
          |         SENATE COMMITTEE ON NATURAL RESOURCES AND WATER         |
          |                   Senator Fran Pavley, Chair                    |
          |                    2011-2012 Regular Session                    |
          |                                                                 |
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          BILL NO: SB 657                    HEARING DATE: April 12, 2011  

          AUTHOR: Gaines                     URGENCY: Yes  
          VERSION: As Introduced             CONSULTANT: Katharine Moore  
          DUAL REFERRAL: Environmental QualityFISCAL: Yes  
          SUBJECT: Vacuum or suction dredge equipment.  
          
          BACKGROUND AND EXISTING LAW
          Suction dredge mining is an instream technique that uses a 
          vacuum system to pull gravel and other materials up from a 
          river, stream or lake bed. On-board equipment is used to process 
          the collected matter and remove any trace amounts of gold before 
          exhausting the remainder ("tailings") back into the water.  
          Suction dredge miners search for gold not collected by previous 
          large-scale mining operations.  They target sub-surface 
          "slickens" layers, often buried under gravel, which are 
          relatively enriched in gold as well as mercury used in and lost 
          from traditional mining practices.  A permit issued by the 
          California Department of Fish and Game (DFG) is required to 
          operate suction dredge mining equipment in California.  Suction 
          dredge mining for gold is also subject to other laws, including, 
          but not limited to, provisions of the Clean Water Act 
          administered by the Corps of Engineers and the State Water 
          Resources Control Board.  From 1999 - 2009, DFG sold 
          approximately 3,200 resident and an additional 450 non-resident 
          suction dredge mining permits annually. In 2009, 3,643 total 
          permits were sold and the permit fees for residents and 
          non-residents were $47 and $185.25, respectively. Suction dredge 
          permit fees are deposited in the Fish and Game Preservation Fund 
          where they are used to support DFG functions.

          DFG's existing regulations governing suction dredge mining were 
          promulgated after preparing and certifying an environmental 
          impact report (EIR) under the California Environmental Quality 
          Act (CEQA) in 1994. These regulations were legally challenged in 
          Karuk Tribe of California et al., v. California Department of 
          Fish and Game et al., (Alameda County Superior Court Case No. 
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          RG05-211597).  In 2006 the court ordered DFG to conduct further 
          environmental review of its suction dredge mining regulations 
          under CEQA and to implement, if necessary, mitigation measures 
          to protect coho salmon and other fish species in the watershed 
          of the Klamath, Scott, and Salmon Rivers that were listed as 
          threatened or endangered since the completion of the 1994 EIR.  

          Despite the court's ruling, DFG did not start the EIR process 
          and continued to issue suction dredge permits. Another lawsuit 
          was filed (Leeon Hillman et al. v. California Dept. of Fish and 
          Game et al., Alameda County Superior Court Case No. RG09-43444), 
          and in July 2009 the court specifically prohibited DFG from 
          issuing any suction dredge mining permits as long as the related 
          litigation was pending.  At the same time, the Legislature 
          passed and the Governor signed SB 670 (Wiggins, c. 62, Statutes 
          of 2009) on August 6, 2009.  SB 670 imposed an immediate 
          temporary moratorium on suction dredge mining until three 
          specified actions occur: 1. DFG completes the court-ordered 
          environmental review of its permitting program; 2. DFG updates 
          the existing regulations governing the program as necessary; and 
          3. The updated regulations take effect.

          The draft subsequent EIR (DSEIR) for suction dredge mining and 
          its accompanying proposed revised regulations were released for 
          public comment in February 2011 and are described below.  DFG 
          expects to complete the effort, including any updates to the 
          existing regulations, by late summer 2011. The public comment 
          period is open until April 29, 2011.

          Neither SB 670 nor any other provision of law authorizes DFG to 
          issue refunds to permit holders.  Last year, SB 889 (Aanestad) 
          proposed refunding permit fees to those holding 2009 permits 
          when the ban went into effect.  It passed this committee by a 
          vote of 7-1 and the Senate Floor by a vote of 28-1.  It 
          subsequently failed in Assembly Water Parks and Wildlife.
          
          PROPOSED LAW
          This bill would:
             o    Delete the legislative prohibition and all restrictions 
               on suction dredge mining imposed by SB 670.
             o    Exempt suction dredge mining from CEQA until January 1, 
               2014.
             o    Require DFG to refund pro-rated fees to 2009 permit 
               holders.
             o    Require DFG to prepare a report containing an economic 
               analysis of the prohibition on suction dredge mining by 
               January 1, 2014.
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          ARGUMENTS IN SUPPORT
          According to the author, "SB 657 would ensure that all 
          industries are given the same treatment when a potential cause 
          for concern arises?The suction dredging industry should not be 
          shut down on a hunch that there are problems or dangers in its 
          operation.  The early EIR was not conclusive in its findings 
          that this industry was so detrimental that it needed to be shut 
          down entirely, and until there is a final EIR with findings to 
          the contrary, the miners should be allowed to continue in their 
          business.  If the state puts procedures and safeguards in place 
          for a reason, those procedures should be followed.  This bill 
          will allow the industry to continue until there is conclusive 
          evidence that the economic benefits to the entire industry are 
          less than the detriment to the environment through suction 
          dredging."

          The Regional Council of Rural Counties (RCRC) believes that the 
          2009 legislative ban occurred with "minimal scientific 
          background" and that the "existing regulatory permitting process 
          was adequate to ensure the protection of our aquatic species and 
          natural resources while allowing individuals to mine their legal 
          claim ?"  RCRC further states that "mining remains an important 
          part of Ŭrural] culture and history.  Mining is an equally 
          important aspect of these communities' economy both as a result 
          of the mining itself and also as an attraction for tourism" and 
          appears to argue for the fairness of returning at least a 
          portion of the permit fees for 2009.

          Additional letters from individuals make similar arguments that 
          the current ban on suction dredge mining is not supported by 
          science; the DSEIR fails to show harm to fish or the 
          environment; fish populations have been depleted by other causes 
          (including fishing); and the ban has had severe financial 
          impacts at the individual, local and state level.

          ARGUMENTS IN OPPOSITION
          The Sierra Fund, among others, argues that suction dredge mining 
          was only banned in California "after DFG acknowledged numerous 
          environmental impacts from the activity.  The bill was adopted 
          with more than Ŭa] 2/3 vote in both houses. The prohibition must 
          stay in place until the completion of a court-ordered 
          environmental review by DFG.  ŬTheir] draft document, now being 
          circulated for public comment, documents numerous significant 
          and unmitigatable impacts of suction dredge mining on everything 
          from fish and water quality to environmental health.  There will 
          continue to be numerous environmental impacts, even under the 
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          department's proposed new regulations.  Their review provides 
          rigorous scientific data about the role of suction dredge mining 
          in releasing and mobilizing the highly toxic mercury found 
          alongside the gold in California's rivers and streams left over 
          from mining that ended more than 100 years ago.  DFG has 
          acknowledged that the suction dredge program costs the state 
          hundreds of thousands of dollars more than it collects in permit 
          fees.  The Sierra Fund believes that the court-ordered 
          environmental review process should be completed before any new 
          suction dredge permits are issued."

          Clean Water Action adds that, "it is inappropriate to allow 
          permits which may not coincide with these upcoming regulations," 
          and further raises environmental justice, water quality and 
          related issues.

          COMMENTS 
           Author's intention  :  According to the author's office, this bill 
          is intended to lead to the reinstatement of suction dredge 
          mining in California under existing regulations, regardless of 
          the regulations' inadequacy (see comment below), while the DSEIR 
          process is completed, and revised regulations are approved and 
          implemented.  Put plainly, the idea appears to be to remove the 
          legislative ban on suction dredge mining, undercut the basis of 
          the court orders suspending suction dredge mining (by suspending 
          CEQA) while still forcing a CEQA process (the development of the 
          DSEIR) to continue.  In its current form, SB 657 does not do 
          that: apparently a drafting error substituted "economic" for 
          "environmental" in the provision referring to completion of a 
          study. 
           
          This bill is double-referred  .  Should this bill pass this 
          committee, it will be heard by the Senate Committee on 
          Environmental Quality (EQ).  EQ's jurisdiction includes CEQA and 
          its provisions, as well as water quality, hazardous materials 
          and other issues relevant to suction dredge mining.  Therefore 
          these issues will only be briefly described here in so far as 
          they provide background to and illuminate matters pertinent to 
          this committee.

           The court orders are still in effect  .  Further court action 
          would be required in addition to the passage of this bill in 
          order to allow suction dredge mining again in California, 
          barring other regulatory action.

           Existing (1994) suction dredge mining regulations are 
          insufficiently protective of fish and other wildlife.   DFG staff 
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          and independent academic experts testified unequivocally during 
          the original court case that the 1994 suction dredge mining 
          regulations are insufficiently protective of special status fish 
          due to both improved technical understanding and changes in 
          endangered species listings that occurred after the mining 
          regulations were developed.  The 1994 regulations, for example, 
          permit suction dredge mining during time periods and on rivers 
          where special status species, such as coho salmon, pink salmon, 
          chum salmon, green sturgeon, pacific lamprey, Klamath river 
          lamprey and river lamprey are present.  The DSEIR and draft 
          regulations (described below) propose additional restrictions on 
          water bodies and time periods where suction dredge mining is 
          allowed in order to protect fish (as broadly defined by DFG to 
          include wild fish, mollusks, crustaceans, invertebrates, or 
          amphibians, including any part, spawn, or ova thereof).  SB 657 
          contains no provision to update the 1994 regulations, although 
          DFG's regulations must certify that suction dredge mining will 
          not be deleterious to fish.

          Additionally, impacts on "non-fish" wildlife are only indirectly 
          mitigated under the proposed stricter regulations accompanying 
          the recently-released DSEIR. For example, nesting birds may be 
          less likely to be disturbed on a particular reach where suction 
          dredge mining is limited.  However, the cumulative impacts to 
          wildlife are still identified as significant and unavoidable 
          (see below).  Therefore, the less-restrictive 1994 regulations 
          are also unlikely to fully mitigate these impacts. 

           Mercury and fish  .  Suction dredge mining has been shown to 
          result in the suspension/resuspension of mercury-containing fine 
          particles through the water column.  Due to the size of the 
          particles involved, they may remain suspended for considerable 
          periods (hours-to-days) and, following oxidation and 
          methylation, the mercury may become more biologically available 
          to fish downstream.  In many locations, fish higher in the food 
          chain are already considerably stressed by mercury loadings due 
          to historic mining and/or other sources.  Methylmercury 
          advisories are in place for numerous California water bodies 
          including lakes and river stretches in the Sierra Nevada 
          foothills in Nevada, Placer, and Yuba counties and the San 
          Francisco Bay Delta.  Concentrations of mercury in fish tissue 
          in these areas are also above criteria developed for the 
          protection of mammalian and avian wildlife, and occasionally 
          exceed levels that have been found to adversely affect fish 
          health or reproduction. 

           It is too soon to assess the role of the ban on suction dredge 
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          mining on the recovery of populations of fish and other species  . 
           The temporary moratorium has not been in place long enough to 
          impact species whose lifetimes are longer than approximately 6 - 
          12 months (e.g. salmon). Instream suction dredge mining is not 
          the root cause of the fisheries' many problems. It can, however, 
          be a contributing factor:  the impacts of suction dredging vary 
          according to size of the waterbody, fish species present, 
          season, frequency and intensity of dredging and cumulative 
          impacts can occur. Suction dredge mining can have a negative 
          impact on local fish, particularly, for example, when dredging 
          coincides with the incubation of embryos in stream gravels.  

           Status of the DSEIR and accompanying revised proposed 
          regulations.   The DSEIR includes a set of updated suction dredge 
          regulations that would avoid deleterious effects to fish and 
          analyzes the potential environmental impacts of suction dredging 
          under these updated regulations.  The DSEIR evaluates four 
          program alternatives: a no program alternative (continuation of 
          the existing moratorium); a 1994 regulations alternative 
          (continuation of previous regulations); a water quality 
          alternative (including additional program restrictions for water 
          bodies listed as impaired pursuant to the Clean Water Act 
          §303(d) for sediment and mercury); and a reduced intensity 
          alternative (limiting permit issuance and methods of operation 
          to reduce the intensity of environmental effects).

          The significant and unavoidable impacts of suction dredge mining 
          identified in the DSEIR from continued mining include:
             o    The effects of mercury resuspension and discharge from 
               mining
             o    The effects of resuspension and discharge from mining of 
               other trace metals
             o    The effects on special status passerines (e.g. birds) 
               associated with riparian habitats
             o    Substantial adverse changes in the significance of 
               historical resources
             o    Substantial adverse changes in the significance of 
               unique archaeological resources
             o    Exposure of the public to noise levels in excess of city 
               or county standards
             o    Cumulative impacts on wildlife species and their 
               habitats, turbidity and related discharges, and mercury 
               resuspension and discharge.

          The strength of these identified impacts depends critically upon 
          implementation of the revised proposed regulations accompanying 
          the DSEIR: the new regulations are essential to mitigation.
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          DFG asserts that these issues are outside its jurisdiction and 
          thus beyond its control, although the proposed regulations 
          include distribution of a "Best Management Practices" pamphlet 
          providing information to miners on how to mitigate these impacts 
          on their own.    

          In addition to distribution of pamphlets, the draft proposed 
          regulations include updated application requirements; 
          limitations on the number of permits issued annually; equipment 
          restrictions (e.g. smaller nozzle size), requirements regarding 
          the methods of operation and guidance regarding the location of 
          activities, including locations which are seasonally or 
          permanently closed to suction dredge mining.  More specific 
          restrictions on the movement of material (e.g. tailings must be 
          stabilized) and the preservation of channels, sites, vegetation 
          and riparian habitats are required.  

          One beneficial impact identified by the DSEIR is on the 
          availability of, or access to placer gold deposits.  

           Has the state refunded license fees in the past?   In general, 
          permit and license fees paid to DFG are not refundable. 
          Then-Governor Schwarzenegger, however, ordered DFG to refund 
          permit fees paid to the commercial salmon fishery following the 
          closure of the 2008 - 2009 and 2009 - 2010 seasons.  It is not 
          clear that the governor had or has the emergency authority to 
          order theses license refunds, but the order was not challenged.

          According to DFG, pro-rated refunds to 2009 permit holders would 
          be $121,000 ($267,000 for a full refund).  The required economic 
          analysis would cost $100,000 - $200,000

           A recent economic analysis is available  . As part of the DSEIR 
          process, a representative survey of 2008 resident and 
          non-resident permit holders was conducted.  Residents 
          participated in about 83,900 days (15 trips of about 2 days 
          each) of suction dredging, and nonresidents accounted for an 
          additional 17,350 days (4.5 trips of about 7 days each). The 
          most popular watersheds for residents were the Yuba River, 
          Feather River and the American River, while the Klamath River 
          was most popular with non-residents.  Income from gold recovery 
          was, on average, about 6% of a miner's income, although 69% 
          reported that suction dredging represented one percent or less 
          of their total income.  This aligns with the survey results that 
          indicate that 82% of resident dredgers considered their activity 
          to be recreational (slightly fewer non-resident dredgers do).  
          The survey results estimate that approximately $4.6 million in 
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          trip-related spending was attributed to suction dredge mining in 
          2008 across California which created an estimated 50 jobs 
          resulting in increases of $2.5 million in personal income and 
          $123,000 in sales taxes.  It is unclear what fraction of an 
          additional $7.4 million in equipment and maintenance was spent 
          in California. 

          












          SUPPORT
          Regional Council of Rural Counties
          L & M Timber Company
          3 Individuals

          OPPOSITION
          California Sportfishing Protection Alliance
          California Trout
          Center for Biological Diversity
          Central Sierra Environmental Resource Center
          Clean Water Action
          Coastal Environmental Rights Foundation
          Defenders of Wildlife
          Environmental Law Foundation
          Environmental Protection Information Center
          Foothill Conservancy
          Friends of the River
          Friends of the Trinity River
          Northern California Council, Federation of Fly Fishers
          Pacific Coast Federation of Fishermen's Associations
          Planning and Conservation League
          Sacramento River Preservation Trust
          Sierra Club
          South Yuba River Citizen's League
          The Karuk Tribe
          The Sierra Fund
          Trout Unlimited
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          1 Individual














































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