BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1142


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          Date of Hearing:  April 27, 2015


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          AB 1142  
          (Gray) - As Amended April 6, 2015


          SUBJECT:  Mining and geology:  surface mining


          SUMMARY:  Makes numerous and significant changes to the Surface  
          Mining and Reclamation Act of 1975 (SMARA).


          EXISTING LAW:  


          1)Creates SMARA, which prohibits a person from conducting  
            surface mining operations unless the lead agency for the  
            operation issues a surface mining permit and approves a  
            reclamation plan and financial assurances for reclamation.  
            Depending on the circumstances, a lead agency can be a city,  
            county, the San Francisco Bay Conservation and Development  
            Commission, or the California State Mining and Geology Board  
            (Board). However, reclamation plans and financial assurances  
            must be submitted to the Director of the Department of  
            Conservation (DOC) for review.


          2)Provides a mechanism by which the Board can strip a local  
            agency of its lead agency status for its failure to implement  
            state law, the Board then serves as the lead agency.









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          3)Requires the Board to adopt regulations that establish state  
            policy for the reclamation of mined lands in accordance with  
            the intent of SMARA.


          4)Requires lead agencies to require financial assurances of each  
            surface mining operation to ensure reclamation is performed in  
            accordance with the surface mining operation's approved  
            reclamation plan.


          5)Requires the financial assurance to remain in effect for the  
            duration of the surface mining operation and until the  
            reclamation is complete. Requires the amount of financial  
            assurance to be adjusted annually to account for new lands  
            disturbed by surface mining operations, inflation, and  
            reclamation of lands accomplished in accordance with the  
            approved reclamation plan.


          6)Requires the lead agencies to conduct annual mine inspections  
            to determine compliance with SMARA. 


          7)Prohibits a state or local agency from acquiring or utilizing  
            sand, gravel, aggregates, or other mineral products from  
            surface mining operations unless the operation is identified  
            on the AB 3098 List (a reference to the 1992 bill that  
            established the list), which identifies all of the following  
            surface mining operations:

             a)   Surface mining operations for which a report has been  
               submitted to DOC that indicates that: (1) a reclamation  
               plan and financial assurances have been approved pursuant  
               to SMARA; (2) the operations are in compliance with the  
               state's reclamation standards; (3) the operations are in  
               compliance with the state's financial assurance guidelines;  
               and, (4) the annual reporting fee has been submitted to  








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               DOC;

             b)   Surface mining operations for which an appeal is pending  
               before the Board, provided that the appeal has not been  
               pending before the Board for more than 180 days; and,

             c)   Surface mining operations for which an inspection is  
               required and for which an inspection notice has been  
               submitted by the lead agency that indicates both compliance  
               with the approved reclamation plan and that sufficient  
               financial assurances have been approved and secured.

          8)Allows, until January 1, 2019, a surface mine operator whose  
            operations are not in compliance with its approved reclamation  
            plan to remain on the AB 3098 list if the operator stipulated  
            to an order to comply with the lead agency and or DOC.


          THIS BILL:


          1)Requires a surface mine operator, as part of their annual  
            report, to request a date for their next annual inspection. If  
            the operator does not request an inspection date or the lead  
            agency is unable to inspect on that date, the lead agency  
            shall provide a minimum 30 days written notice of a pending  
            inspection or a date that is agreed upon by the operator.  


          2)Removes the January 1, 2019 sunset on the provision allowing  
            surface mining operators, whose operations are not in  
            compliance with its approved reclamation plan, to remain on  
            the AB 3098 list if the operator stipulated to an order to  
            comply with the lead agency and/or DOC.


          3)Prohibits adjustment of financial assurances that are in  
            excess of the of the amount determined necessary to perform  
            reclamation in accordance with the surface mining operation's  








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            approved reclamation plan. 


          4)Codifies regulations dealing with the modification or release  
            of financial assurance and narrows the review of the surface  
            mining operation to the approved reclamation plan instead of  
            allowing for review of whether the plan meets reclamation plan  
            standards and whether the surface mining operator is complying  
            with the other requirements and intent of SMARA.


          5)Allows an operator to request the lead agency and the Director  
            to jointly inspect and review a request for full or partial  
            release of a financial assurance instrument and sets a  
            timeline for the inspection of 90 days after the request with  
            a requirement for a decision on the request 45 days after the  
            inspection.


          6)Deletes requirement that lead agency conduct an inspection  
            within six months of receipt of the surface mining operation  
            report and instead requires inspections annually. Limits  
            inspection to compliance with its reclamation plan instead of  
            compliance with the reclamation plan and with the other  
            requirements and intent of SMARA.  


          7)Requires a mine inspection to be conducted by a state licensed  
            geologist, state licensed civil engineer, state licensed  
            landscape architect, state licensed forester, or a qualified  
            mine inspector trained through the curriculum developed by the  
            bill. Allows a lead agency employee who is a qualified mine  
            inspector to inspect a surface mine operation conducted by  
            another department within the local agency.


          8)Creates a new financial assurance cost estimate (FACE) process  
            where the operator provides the FACE to DOC and the lead  
            agency for review. Allows DOC to comment on the FACE. Allows  








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            the lead agency to evaluate DOC's comments and provide a  
            response to the comments. Requires the lead agency to accept  
            or reject the FACE within 60 days of receipt of the DOC's  
            comments or the due date for the comments, if comments are not  
            received. Creates an appeal process and timelines if the lead  
            agency determines the FACE is inadequate. 


          9)Requires, no later than April 1 of each year, DOC to provide  
            each lead agency with a notice listing each active or idle  
            surface mining operation within the lead agency's  
            jurisdiction.


          10)Requires, no later than July 1 of each year, the lead agency  
            to provide the Director with the following information for  
            each surface mine operation:


             a)   A copy of any permit or reclamation plan amendments.


             b)   A statement that there have been no changes during the  
               previous year, as applicable.


             c)   The date of each surface mining operation's last  
               inspection.


             d)   The date of each surface mining operation's last FACE  
               review.


          11) Requires DOC to request similar information on any new or  
            omitted operations.


          12)Requires the form provided by DOC to include all of DOC's  








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            current information for each operation.


          13)Exempts the review and approval of FACE from the California  
            Environmental Quality Act.


          14)Allows the surface mine operator to fulfill the inspection  
            requirement with a third party selected by the operator if the  
            lead agency has not inspected the mine on the inspection date  
            requested or provided a 30 day-notice of a pending inspection.


          15)Requires the State Geologist, in coordination with the  
            Director, Board, lead agencies, and interested parties, to  
            develop a curriculum for training mine inspectors.


          16)Prohibits mine inspectors from inspecting mines for purposes  
            of evaluating compliance with local, state, or federal law  
            besides SMARA including, but not limited to the Porter-Cologne  
            Water Quality Control Act, the federal Clean Water Act, and  
            the Fish and Game Code.


          17)Requires the lead agency, DOC, and the Board to take into  
            account and seek to minimize the impact of any proposed  
            enforcement action on the number of existing jobs supported  
            directly or indirectly by the operation. 



          FISCAL EFFECT:  Unknown


          











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          COMMENTS:  


          1)Author's statement.  


          SMARA was first adopted in 1975 and underwent significant  
          revisions in the early 1990s and more modest revisions to  
          address implementation challenges in recent years.   
          Recently concerns have arisen that the checks and balances  
          of the system may not be working properly and the Governor,  
          in signing SB 447 (Lara, 2013) called for a "top to bottom"  
          review of the Act.





          The administration has recently convened a stakeholder  
          process to identify the potential issues within SMARA that  
          may require legislative action.  AB 1142 (Gray) proposes  
          solutions to multiple identified issues.  While the  
          stakeholder process continues, AB 1142 should move forward  
          and may be amended to include further identified solutions.  






          2)Governor's stakeholder group. SMARA was passed into law in  
            1975 and its intent remains unchanged. SMARA states:



          It is the intent of the Legislature to create and maintain  
          an effective and comprehensive surface mining and  








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          reclamation policy with regulation of surface mining  
          operations so as to assure that: 





          (a) Adverse environmental effects are prevented or  
          minimized and that mined lands are reclaimed to a usable  
          condition which is readily adaptable for alternative land  
          uses.


          (b) The production and conservation of minerals are  
          encouraged, while giving consideration to values relating  
          to recreation, watershed, wildlife, range and forage, and  
          aesthetic enjoyment.


          (c) Residual hazards to the public health and safety are  
          eliminated.





            As stated above, the Governor has called for a top to bottom  
            review of SMARA. The goal of these talks is to amend SMARA to  
            meet its intent. Multiple stakeholder group meetings have been  
            held to discuss the administration's concerns with SMARA.  
            Issues that are under discussion include:





             a)   Meaningful reclamation of disturbed mine lands;
             b)   Adequate financial assurance; 









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             c)   Financial assurances are not released until reclamation  
               is complete;


             d)   Financial assurance can be used for reclamation if the  
               mine owner does not reclaim their mine; 


             e)   Annual, quality inspections of mine occur;


             f)   When inspectors find non-compliance enforcement is  
               clear, timely, and meaningful;


             g)   The Board has tools to improve local SMARA  
               implementation;


             h)   Reporting fees and penalties are paid by operators and  
               that fees cover the cost of the program; and,


             i)   Inappropriate exemptions from SMARA are stopped.


            On April 15, 2015, DOC developed language that they assert  
            will improve the quality of reclamation plans, which will  
            assist lead agencies and the DOC in both the review and  
            inspection checklist process. Language on the other issues  
            will be developed over time. 


            Parts of AB 1142 would run counter to the direction the  
            Governor's stakeholder group is headed by making several  
            changes that would result less meaningful reclamation,  
            inadequate financial assurance, a reduction in the quality of  
            inspection and meaningful enforcement.








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          3)Reclamation.  There are over a thousand active mines in  
            California that remove aggregate for building material,  
            metals, and minerals. California is the only state in the U.S.  
            where surface mine reclamation is not regulated by the state.  
            Local governments including cities and counties are the lead  
            agencies for most mines.  However, DOC and the Board oversee  
            their permitting, inspection, and enforcement actions. Mining  
            operators are required under SMARA to develop and implement  
            reclamation plans, which will return the mine to a condition  
            where it can be used for another purpose after the mining  
            operation is complete. Annual reports and inspections are  
            supposed to ensure that mining operators are making progress  
            to reclamation. However, there are instances when the mine  
            operator cannot be located or is unable to complete the mine  
            reclamation. Financial assurances are required to make sure  
            there will be resources available to reclaim the mine.  The  
            state and lead agencies have an interest in properly reclaimed  
            mines, because a surface mine is a large hole in the ground  
            and can have many dangerous features. If the mine is  
            reclaimed, the land can be returned to another use. If it is  
            not, the state or the lead agency could be responsible for  
            protecting the public from the dangers of the mine, cleaning  
            up the mine, and reclaiming the mine. 
            


            AB 1142 would prohibit adjustment of financial assurances that  
            are in excess of the of the amount determined necessary to  
            perform reclamation in accordance with the surface mining  
            operation's approved reclamation plan and limit the review of  
            the financial assurance by the lead agency. This would stop a  
            lead agency from increasing financial assurances to cover new  
            conditions such as if the mine was deeper or wider than the  
            approved reclamation plan allowed. Lead agencies would also  
            not be able to increase the financial assurance to cover  
            increases in the prevailing wage. AB 1142 would also prohibit  
            lead agencies from considering whether the reclamation plan is  








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            sufficient and if the mine is violating any other requirements  
            of SMARA before releasing the financial assurances.





          4)Inspections.  Lead agencies are required to annually inspect  
            mines to ensure they are complying with their permits,  
            reclamation plan, and SMARA. Permit conditions imposed by a  
            regional water quality control board or the Department or Fish  
            and Wildlife, which can include requirements that deal with  
            water quality issues and streambed alterations can be included  
            in a SMARA permit. In addition, mine inspectors are the  
            inspectors most often in the mine and the last inspector in  
            the mine before it closes.  Often mine inspectors play a vital  
            role in ensuring compliance with other environmental laws.  
            However, lead agencies in the past have not always inspected  
            mine frequently. AB 1142 sets up a process for operators to  
            request a date for a mine inspection and sets up a training  
            component for mine inspectors.  However, AB 1142 also allows  
            mine operators to inspect their own mines and prohibits mine  
            inspectors from looking at compliance with other important  
            environmental laws. 



          5)Enforcement.  The largest compliance problem DOC faces is that  
            many mines do not file annual reports or pay their fees. Most  
            lead agencies do not take enforcement actions except in rare  
            egregious cases. According to one lead agency, last year all  
            of their 10 compliance orders were settled prior to a public  
            hearing. However, the administration has stated that when  
            inspections indicated non-compliance, the problems identified  
            are often never fixed. It is important that lead agencies have  
            the tools to bring mines into compliance. SB 447, until 2019,  
            allows surface mine operators whose operations are not in  
            compliance with its approved reclamation plan to remain on the  
            AB 3098 list if the operator stipulated to an order to comply  








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            with the lead agency and or DOC.  AB 1142 proposes to make SB  
            447 permanent.  However, there is not one example of this  
            provision being used. Prior to removing the sunset on this  
            provision, it is important to judge whether this provision  
            improves compliance with SMARA. 



            AB 1142 also proposes to make lead agencies take into account  
            and seek to minimize the impact of any proposed enforcement  
            action on the number of existing jobs supported directly or  
            indirectly by the surface mining operation. Surface mines  
            operations are important to many economies and most lead  
            agencies only use enforcement as a last resort. If an  
            operation is seriously out of compliance, lead agencies should  
            enforce on that operation. This provision could lead to larger  
            mines with many employees taking compliance with SMARA less  
            seriously than smaller mines. This also results in a precedent  
            where public health is pitted against employment. The goal of  
            SMARA should be to have sufficient mines in California to meet  
            the state's demand for aggregate, metals, and minerals, that  
            those mines are removing material in an environmentally  
            responsible way, and that the mine's disturbed lands are  
            reclaimed and returned to good use. Compliance with SMARA is  
            the only way that will happen.





          6)Related and Prior legislation.  
          SB 209 (Pavley) makes numerous and significant changes to the  
          Surface Mining and Reclamation Act of 1975 (SMARA). This bill is  
          awaiting hearing in the Senate Appropriations Committee.


          SB 1270 (Pavely, 2013) would create the Division of Mines within  
          DOC, which would be responsible for the DOC's role under mining  
          laws, and would amend the roles of the State Mining and Geology  








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          Board so that it is an appeals and rule-making body. This bill  
          was held in the Senate Appropriations Committee.


          SB 447 (Lara), Chapter 417, Statutes of 2013, allows, until  
          January 1, 2019, a surface mine operator whose operations are  
          not in compliance with its approved reclamation plan, to remain  
          on the AB 3098 list if the operator stipulated to an order to  
          comply with the lead agency and or DOC.  


          7)Suggested Amendments.  The author and committee may wish to  
            consider to following amendments to resolve the concerns  
            listed above:
             a)   Remove the deletion of the January 1, 2019 sunset on the  
               provision allowing surface mining operators whose  
               operations are not in compliance with its approved  
               reclamation plan to remain on the AB 3098 list if the  
               operator stipulated to an order to comply with the lead  
               agency and or DOC.


             b)   Remove the language from Section 2773.1 that states, "An  
               operator shall not be required to adjust financial  
               assurances that are in excess of the amount determined  
               necessary to perform reclamation in accordance with the  
               surface mining operation's approved reclamation plan" and  
               insert, "An operator shall only be required to replace a  
               financial assurance mechanism already in place to bond for  
               the reclamation of the surface mining operation where the  
               Financial Assurance Cost Estimate identifies a need to  
               increase the amount of the financial assurance mechanism."


             c)   Remove Sec. 5 (Section 2773.11) from the bill.


             d)   In Section 2774, remove the minimum 30-day written  
               notice of a pending inspection and replace with a 5-day  








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               notice.


             e)   Remove the language from Section 2774 that states, "An  
               operator shall not be required to adjust financial  
               assurances that are in excess of the amount determined  
               necessary to perform reclamation in accordance with the  
               surface mining operation's approved reclamation plan  
               provided that financial assurance mechanism remains in  
               effect" and insert, "An operator shall only be required to  
               replace a financial assurance mechanism already in place to  
               bond for the reclamation of the surface mining operation  
               where the Financial Assurance Cost Estimate identifies a  
               need to increase the amount of the financial assurance  
               mechanism."


             f)   Remove the language from Section 2774 that states, "(h)  
               (1) If a surface mining operation is not inspected by the  
               lead agency on the date requested by the operator pursuant  
               to Section 2207 and the operator has not received a 30-day  
               notice of pending inspection from the lead agency as  
               provided in subdivision (e), the operator may send a notice  
               to the lead agency and the director stating the operator's  
               intent to have the surface mining operation inspected by a  
               third party who has not been employed in any capacity by  
               the operator in the previous 12 months and who is a  
               state-licensed geologist, state-licensed civil engineer,  
               state-licensed landscape architect, or state-licensed  
               forester who is experienced in land reclamation. An  
                                                                                              inspector retained by the operator pursuant to this section  
               shall provide the lead agency a 15-day notice of the  
               inspector's intended inspection date for the operation and  
               shall provide a reasonable opportunity for a representative  
               of the lead agency to attend the inspection."


             g)   Remove the language from Section 2774 that states, "(5)  
               Absent express authorization under this chapter, mine  








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               inspectors shall not inspect operations for the purpose of  
               evaluating compliance with separate provisions of local,  
               state, or federal law, including, but not limited to, the  
               Porter-Cologne Water Quality Control Act (Division 7  
               (commencing with Section 13000) of the Water Code), the  
               federal Clean Water Act (33 U.S.C. Sec. 1251 et seq.), and  
               the Fish and Game Code."


             h)   Remove the language from Section 2774.1 that states,  
               "(g) In exercising enforcement authority pursuant to this  
               section, the lead agency, the director, or the board, as  
               appropriate, shall take into account and seek to minimize  
               the impact of any proposed enforcement action on the number  
               of existing jobs supported directly or indirectly by the  
               surface mining operation."


             i)   Insert language provided by author's office allowing the  
               Board or DOC to apply to small claims court for unpaid  
               administrative penalties.


          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Allied Concrete & Supply Co., Inc.
          Associated Builders and Contractors of California
          Associated General Contractors 
          BoDean
          Brown Sand, Inc.








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          California Asphalt Pavement Association
          California Building Industry Association
          California Business Properties Association
          California Chamber of Commerce
          California Construction and Industrial Materials Association 
          California Independent Petroleum Association
          California Manufacturers and Technology Association
          California-Nevada Conference of Operating Engineers
          California State Council of Laborers
          CalPortland Company
          CEMEX
          Granite Construction Company
          Granite Rock Company
          Knife River Corporation
          Livingston's Concrete Service, Inc.
          National Federation of Independent Businesses
          Puente Ready Mix, Inc.
          P.W. Gillibrand Co., Inc.
          Robertson's Ready Mix
          Rural County Representatives of California 
          Searles Valley Minerals
          Stimpel-Wiebelhaus Associates, Inc.
          Superior Ready Mix Concrete
          United Contractors 
          Werner Corporation


          Opposition


          California League of Conservation Voters
          California Native Plant Society
          Center for Biological Diversity
          Center for Environmental Health
          Coastal Environmental Rights Foundation
          Clean Water Action
          Coalition for Clean Air
          Environmental Working Group
          Environment California








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          Sierra Club
          Sierra Fund (unless amended)


          Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092