BILL ANALYSIS Ó
AB 1142
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Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1142 (Gray) - As Amended May 5, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill modifies the Surface Mining and Reclamation Act of
1975 (SMARA). Specifically, this bill:
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1)Requires a surface mine operator to request a date for their
next annual inspection as part of their annual report. If the
operator does not request an inspection date or the lead
agency is unable to inspect on the requested date, requires
the lead agency to provide a minimum 30 days written notice of
a pending inspection or a date that is agreed upon by the
operator. Deletes the requirement for a lead agency to
conduct an inspection within six months of receipt of the
report and instead requires annual inspections.
2)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.
3)Creates a new financial assurance cost estimate (FACE) process
and requires the operator to provide the FACE to the
Department of Conservation (DOC) and the lead agency for
review. Allows DOC to comment on the FACE. Allows 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 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.
4)By April 1 of each year, requires DOC to provide each lead
agency with a notice listing each active or idle surface
mining operation within the lead agency's jurisdiction. By
July 1 of each year, requires the lead agency to provide the
DOC Director with specified information. Requires DOC to
request similar information on any new or omitted operations.
5)Requires the form provided by DOC to include all of DOC's
current information for each operation.
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6)Allows the DOC Director or Board to apply to the small claims
court or superior court to collect unpaid administrative
penalties.
FISCAL EFFECT:
7)Increased DOC costs of $1 million or more to develop a new
database to fulfill new form and notification requirements (GF
or special fund).
According to DOC, a new data collection system that
incorporates the electronic filing of documents is necessary
to meet the requirements of the bill. Annual reports,
financial assurance cost estimates, reclamation plan
amendments and permit amendments would all need to be filed
online by the lead agency to enable the database to provide
form letters based upon the information submitted by the lead
agency. Due to state information technology procurement
requirements, it is not feasible to procure an updated
database management system and meet the deadlines of the bill.
8)Initial DOC costs of approximately $775,000 for the first year
to review and organize existing files, coordinate with the
lead agency to obtain missing information and document
reclamation plan requirements (GF or special fund).
9)Ongoing annual DOC costs of approximately $500,000 to review
the reclamation plan, check for any updates to the reclamation
plan and associated permits, review inspection and annual
reports, and examine GIS data for each operation that submits
a financial assurance cost estimate (GF or special fund).
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SMARA is funded through a variety of sources. The Mine
Reclamation Account (MRA) receives revenue from two sources: 1)
a $14 daily fee paid by mines in cities and counties where the
SMGB acts as the lead agency; and 2) annual regulatory fees paid
by mine operators (reporting fees). Total annual revenue from
the daily fee is about $180,000. For the reporting fees, DOC is
required to adopt a fee schedule designed to cover its cost in
carrying out the act, including reclamation plan and financial
assurance review, mine inspection, and enforcement.
However, existing law establishes annual caps on reporting fees
for both an individual mine operator (about $5,000 in 2014-15)
and total reporting fee revenue (about $4.5 million in 2014-15).
Individual mine reporting fees are based on the total value of
the minerals extracted. Both caps are adjusted annually for
inflation. In 2015-16, total mine reporting fee revenue is
expected be $3.5 million, roughly $1 million less than the cap.
The Surface Mining and Reclamation Account (SMARA) is funded by
a portion of royalties collected from mining activities on
federal land. Under state law, the first $2 million provided to
California is deposited in the SMARA, to be used to administer
the Act. The remaining federal mining revenues provided to
California-estimated to be $93 million in 2015-16-are used to
fund K-14 education.
The Bosco-Keene Renewable Resources Investment Fund (RRIF)
receives 30% ($1.2 million in 2015-16) of the royalties provided
to the state from geothermal leases on federal lands. The
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remaining federal royalties go to local agencies (40%) and the
California Energy Commission (30%), to support geothermal
related activities, including exploration, research, and
development activities.
This bill increases expenditures to an extent that would require
the MRA cap to be increased through statute in order to cover
costs. Other alternatives include transferring funds from a
portion of the SMARA account (which is currently funding K-14
education), the RRIF (if appropriate) or the General Fund.
COMMENTS:
1)Purpose. According to the author, 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.
The administration has convened a stakeholder process to
identify the potential issues within SMARA that may require
legislative action. This bill proposes solutions to multiple
identified issues. According to the author, this bill should
move forward while the stakeholder process continues.
1)Background. There are over a thousand active mines in
California that remove aggregate for building material,
metals, and minerals. Unlike any other state, most surface
mines in California are regulated by local government
agencies.
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The Surface Mining and Reclamation Act of 1975 (SMARA)
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.
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. DOC and the Board of Mining and
Geology oversee lead agency permitting, inspection and
enforcement actions.
3)SMARA review and update. The Governor has called for a top to
bottom review of SMARA. 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;
c) Reclamation must be complete before financial assurances
are released.
d) Financial assurance may be used for reclamation if the
mine owner does not reclaim the mine;
e) Annual, quality inspections of every mine occur;
f) When inspectors find non-compliance enforcement is
clear, timely, and meaningful;
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g) The Board has tools to improve local SMARA
implementation;
h) Reporting fees and penalties are paid by operators and
fees cover the cost of the program;
i) Inappropriate exemptions from SMARA are eliminated.
On April 15, 2015, DOC developed legislative language to
improve the quality of reclamation plans in order to assist
lead agencies and DOC with reviews and inspections. The group
continues to meet to address remaining issues.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081