BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1142|
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THIRD READING
Bill No: AB 1142
Author: Gray (D)
Amended: 9/1/15 in Senate
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 8-0, 7/14/15
AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning,
Vidak, Wolk
NO VOTE RECORDED: Stone
SENATE APPROPRIATIONS COMMITTEE: 5-0, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
ASSEMBLY FLOOR: 73-1, 6/4/15 - See last page for vote
SUBJECT: Mining and geology: surface mining
SOURCE: Author
DIGEST: This bill contains several major amendments to the
Surface Mining and Reclamation Act (SMARA). Some of these
amendments were proposed by the Governor's Office stakeholder
process on mining law reform. Specifically, the bill contains
amendments on annual mine inspections, financial assurances and
the approval of financial surety documents, reclamation plans,
enforcement, the role of the State Mining and Geology Board
including appeals, and other technical changes. The bill is
linked to SB 209 (Pavley) by contingent enactment amendments
made to both bills in the Appropriations Committees of both
houses. SB 209 deals with other aspects of SMARA.
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ANALYSIS:
Existing law:
1)Establishes the Department of Conservation (DOC) one of whose
purposes is to administer the Surface Mining and Reclamation
Act (SMARA) which is the primary state statute that applies to
surface mining activities in California for both hard metals,
minerals, and sand and gravel. DOC has administratively
created the Office of Mine Reclamation (OMR) as the primary
mine regulator for California.
2)Prohibits, generally, surface mining unless a permit is
obtained from DOC, a reclamation plan is approved, and
financial assurances have been approved. Local land use
permits are also required.
3)Provides, in SMARA, as follows:
a) Section 2772 generally sets forth the types of
information that are to be contained in reclamation plans.
This includes such features as the ownership information of
the operation, the quantity and type of minerals that will
be extracted, dates to initiate and terminate mining, depth
of mining, legal descriptions of the property to be mined,
and numerous other types of information that have been
traditionally required.
b) Section 2773 directs the reclamation plan to address
issues such as re-vegetation, erosion control, soil
stability, topography, and stream characteristics.
Importantly, it also directs the State Mining and Geology
Board (SMGB) to promulgate reclamation standards that
include wildlife habitat, stream protection, topsoil
salvage, tailing and mine waste management, and a variety
of other topics.
c) Section 2773.3 provides additional protections for
Native American sites from hard rock mining (gold and
silver).
d) Directs that local lead agencies are generally
responsible for ensuring that reclamation plans are adopted
pursuant to the California Environmental Quality Act
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(CEQA).
e) Requires annual inspections of mines to be conducted by
the lead agency, and those inspections form the basis for
surety documents (called "financial assurances" in SMARA)
that can be used to pay for any mine reclamation costs in
the event a mine operator defaults on the obligation to
reclaim a mine at the end of its useful life. In most
circumstances, the lead agency is responsible for
developing an adequate financial assurances surety.
f) Permits, under specific circumstances, for the State
Mining and Geology Board to become the lead agency when the
local lead agency fails to fulfill its statutory
responsibilities. This process is quasi-judicial with
appeals possible to the SMGB and for judicial review.
g) Protects local land use siting or permitting decisions
of local governments, while at the same time SMARA imposes
administrative and compliance responsibilities on local
governments in their capacity as local lead agencies.
h) Collects fees to pay for the administrative costs of the
mine regulatory program. Minimum fees of $100 apply to most
mines, and the maximum is $4,000. The overall program costs
are capped by statute at $3.5 million, adjusted for
inflation. The caps on mine operators and the overall
program costs have generated no increase in revenue to DOC
for several years. In fact, DOC often has greater
expenditure authority than available fee revenues in annual
budget bills. This issue is addressed in SB 209 (Pavley).
i) Requires annual inspections, although SMARA does not
specify the training that mine inspectors should have, nor
does it require DOC to offer training to local lead
agencies or others who may wish to inspect mines.
j) Does not explicitly allow local lead agencies to inspect
mines owned by those local lead agencies.
This bill proposes numerous changes to SMARA, which can be
summarized as follows:
1)Bifurcates, consistent with the Governor's stakeholder group
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recommendations, in Section 4 the term "financial assurances"
to mean both a current financial assurance cost estimate
(FACE) and a financial assurance mechanism that is at least
equal to the current approved financial assurance cost
estimate. It also continues existing practice that the review
of financial assurances shall not be considered a project for
purposes of CEQA. It contains procedures for approval of
financial assurances and appeals of inadequate financial
assurances to the SMGB.
2)Amends section 2772 of the Public Resources Code which
contains many of the provisions for mine reclamation plans.
These are not identical to the stakeholder group
recommendations but achieve many of the same objectives.
3)Establishes, although facially very complex, new procedures
that include timelines, appeal procedures, periods for review
and comment back and forth between lead agencies and the
department both for reclamation plan approvals and financial
assurance adequacy determinations. Options to ensure
compliance are set forth when noncompliance is identified by
the department.
4)Adds appeal procedures to the State Mining and Geology Board
and provisions for the Board to provide notice, hearing, and
orders to comply to lead agencies when warranted.
5)Contains, in Section 11, a new provision that improves the
administrative penalty collection procedure and has built-in
due process safeguards for the operator. The department would
be able to undertake collection activities itself rather than
using the Attorney General, and depending on the amount of
unpaid penalties, could undertake collection either in small
claims or superior courts.
6)Makes numerous technical and clarifying changes to SMARA.
Background
The DOC has identified many flaws in the administration of
SMARA. These include the lack of inspections, inadequate
financial assurances, and a labyrinthine enforcement process
that is fundamentally broken. Governor Brown in a signing
message to recent legislation called for a "top to bottom"
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review of SMARA. The administration convened a stakeholder group
that met several times in 2015 and reviewed several
SMARA-related issues.
The Senate Natural Resources and Water Committee Science Fellow
in 2012 identified many examples of failed SMARA implementation
that involved both local and state government. Highlights of
this review indicated that more than 100 closed mines have not
begun reclamation, that the rate of conducting required annual
inspections hovers in the 25% and 50% range for cities and
counties, respectively, and that financial assurance surety
documents are updated by 27 percent of the counties and only 20
percent of the cities. The data collection system of DOC has
been criticized for data gaps. The Committee report was based on
reported data.
Comments
Author's amendments in Senate Appropriations resolved many of
the issues identified in the Senate Natural Resources and Water
Committee. These include the following:
1)Incorporation of regulatory provisions from the State Mining
and Geology Board regarding the approval of reclamation plans
and financial assurances in several places throughout the
bill;
2)Deletion of phrases such as "substantially complies" in favor
of complete compliance and a definition of "substantial" so
that operators know what is expected of them. The department
has additional authority to require the re-submission of
documents that are not complete and that do not incorporate
the comments of sister regulatory agencies such as the
Department of Fish and Wildlife or regional water boards;
Appeals to the SMGB will turn on whether there was actual
compliance with SMARA.
3)Improved communication procedures between lead agencies and
the department regarding development and approval of
reclamation plans and financial assurance mechanisms and
procedures to deal with incomplete or noncompliant documents;
4)More complete and functional enforcement process that includes
improved communications between local lead agencies and the
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department as well as improved procedures for orders to comply
directed at operators to be implemented;
5)Operator options to correct deficiencies identified during an
annual inspection;
6)establishing a training program for mine inspectors and
qualifications for those inspectors;
7)A new enforcement protocol with deadlines and appeals
procedures with established deadlines; and
8)A more-defined role for the SMGB when it is necessary for it
to assume some local lead agency authorities such as when they
approve reclamation plans or financial assurances that are
inconsistent with SMARA.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, there are
unknown costs to the Surface Mining and Reclamation Account
(special) for additional review by the director of reclamation
plans and financial assurances.
SUPPORT: (Verified9/1/15)
A. Teichert & Son
Associated Builders and Contractors of California
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 Labor Federation
California Manufacturers & Technology Association
CalPortland Company
CEMEX
Chemical Industry Council of California
Fullerton chamber of Commerce
George Reed, Inc.
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Granite Construction Co
Granite Rock Company
Lehigh Hanson
National Federation of Independent Businesses
P.W. Gillibrand Co., Inc.
Robertson's
Rural County Representatives of California
Searles Valley Minerals
Southwest California Legislative Council
Southwest California Legislative Council
Specialty Minerals Inc.
Superior Ready Mix Concrete
The Associated General Contractors
United Contractors
Vulcan Materials Company
OPPOSITION: (Verified9/1/15)
Azul
Sierra Club California
California League of Conservation Voters
California Native Plant Society
Center for Biological Diversity
Claim-GV
Clean Water Action
Coastal Environmental Rights Foundation
Endangered Habitats League
Environment California
Environmental Justice Coalition for Water
Environmental Working Group
The Sierra Fund
San Juan Ridge Taxpayers Association
Trout Unlimited
Wholly H20
Wolf Creek Community Alliance
ARGUMENTS IN SUPPORT: According to the author, this bill
modernizes SMARA. He notes that the Governor called for a "top
to bottom" review of SMARA in signing SB 447 (Lara) in 2013. The
author also acknowledges that the administrative requirements of
SMARA are not being properly and fully implemented by local lead
agencies including proper inspections and annual financial
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assurance reviews.
The author contends that the bill strengthens SMARA by ensuring
better communication between local lead agencies, operators, and
the department. He feels the bill sets forth appropriate and
timely inspection schedules while promoting management
flexibility for regulators and ensuring that operators'
compliance obligations are clear.
The author believes that the bill incorporates several of the
administration's reform concepts and he points to a list of such
reforms including but not limited to: the new ability of the
director to appeal the approval of a financial assurance to the
SMGB, the inclusion of specified maps in the reclamation plan,
clarifying the incorporation of documents and standards into
reclamation plans, the provision allowing local lead agency
employees to inspect mines following a workshop, a new timeline
for the director to determine if a financial assurance or
reclamation plan is complete, and the new provision requiring
concurrence by the director with the lead agency regarding the
release to the operator of the financial assurance mechanism.
A coalition headed by the California Chamber of Commerce
believes the bill clarifies the duties and responsibilities of
mine operators, lead agencies, and the state, as well as makes
procedural improvements to the annual inspection process, the
financial assurance process, the reclamation plan approval
process, and other provisions of SMARA. The Chamber says that a
new inspection form and requiring inspections to be performed by
licensed professionals will improve the integrity of annual
inspections.
As for financial assurances, the Chamber supports the provision
that requires annual reviews of financial assurances to ensure
that those financial assurances are adequate to reclaim the site
upon the default of the operator. It also suggests that the
provisions allowing the department to determine that a financial
assurance is "complete" will drive local lead agencies to work
harder to make sure that these financial assurances are
adequate. The department is provided a new appeal right to the
SMGB for inadequate financial assurance documents.
The Chamber asserts that the proposed amendment allowing various
documents that comprise a reclamation plan to be displayed on a
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chart will allow the incorporation by reference of specified
documents.
An assortment of mining companies sent in separate letters
arguing that the bill modernizes and clarifies SMARA and
improves communication.
The California Labor Federation indicated that it supported the
bill based on a provision (since removed) that was intended to
protect jobs.
RCRC supports the training provision for local government
personnel to inspect mines, as well as the removal of a
provision from SMARA that prohibits a state licensed
professional from conducting a mine inspection for the lead
agency who had been employed by any surface mining operation
within the jurisdiction of the lead agency in any capacity
during the previous 12 months.
ARGUMENTS IN OPPOSITION: A coalition that includes The Sierra
Fund, the California League of Conservation Voters, Sierra Club
and others focus on Section 2774 in their letter.
That section has been amended along with many provisions of the
bill, and it is not known if the opposition has been removed or
not.
Section 2774, dealing with inspections, is viewed by the
opposition coalition as a key provision to make sure that
inspections and any necessary enforcement actually occur. As
originally drafted, the opposition said that the bill weakens
inspections by allowing inspections only for the purpose of
ensuring that operations are in compliance with the reclamation
plan, rather than SMARA as a whole.
Given the amendments in Senate Appropriations, the more likely
concern of the opposition is whether documents from other
reviewing agencies, such as the Department of Fish and Wildlife
and regional water boards, would be automatically included in
reclamation plans in advance of the approval of those plans. The
bill currently provides that comments from reviewing agencies
must be included and complied with in the context of appeals to
the SMGB. An author's amendment would allow such conditions of
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approval and mitigation from other reviewing agencies to be
included in an appendix prepared within 60 days of the approval
of a reclamation plan. Such provisions would then become subject
to subsequent annual inspections.
ASSEMBLY FLOOR: 73-1, 6/4/15
AYES: Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla,
Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gonzalez, Gray, Grove,
Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Linder, Lopez, Low, Maienschein,
Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Obernolte,
O'Donnell, Olsen, Patterson, Perea, Quirk, Ridley-Thomas,
Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NOES: Levine
NO VOTE RECORDED: Alejo, Gomez, Gordon, Nazarian, Rendon, Ting
Prepared by:William Craven / N.R. & W. / (916) 651-4116
9/2/15 11:47:21
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