BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1142


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          Date of Hearing:  April 11, 2106


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          AB 1142  
          (Gray) - As Amended March 16, 2016


          SUBJECT:  Mining and geology:  surface mining


          SUMMARY:  Makes numerous changes to the Surface Mining and  
          Reclamation Act (SMARA) that are all part of the year-long  
          stakeholder process convened by the Governor's office in 2015 to  
          recommend substantive and procedural changes to the state's  
          mining laws.


          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).  Reclamation plans and financial assurances must be  
            submitted to the Director of the Department of Conservation  
            (DOC) for review.


          2)Requires the Board to impose an annual reporting fee for each  








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            active or idle mining operation.  Specifies that the maximum  
            fee for any single mining operation may not exceed $4,000  
            annually and may not be less than $100 annually, as adjusted  
            for the cost of living, for the purpose of carrying out SMARA.


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


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


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


          6)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.


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


          8)Establishes administrative penalties of not more than $5,000  
            per day from the original date of noncompliance for operators  
            who violate or fail to comply with an order by the lead agency  
            or the director.








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          9)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  
               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.

             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.

          10)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 or DOC.


          THIS BILL:


          1)Requires DOC to provide an accounting of how mining fee  
            revenue is spent.








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          2)Defines "reclamation" and "financial assurances",


          3)Allows DOC to appeal financial assurance approvals that they  
            believe are inadequate to the Board.


          4)Clarifies the financial assurance and reclamation plan appeal  
            process to the Board, establishes time frames for hearings,  
            specifies issues that need to be considered, and clarifies  
            under what circumstances the Board can decline to hear  
            appeals.


          5)Clarifies what must be included in a reclamation plan,  
            including requiring maps, diagrams, and calculations in the  
            reclamation plan be done by appropriately licensed  
            professionals.


          6)Requires lead agencies to certify that the proposed  
            reclamation plan is complete and compliant with applicable  
            statutes and regulations. 


          7)Allows DOC to make a determination of incompleteness and  
            remand the reclamation plan back to the lead agency for  
            improvements prior to approval.  Sets a deadline of 30 days  
            for DOC to notify a lead agency and the operator that a  
            reclamation plan is incomplete.  Sets deadline of 30 days for  
            DOC to prepare written comments on the reclamation plan after  
            notifying that a reclamation plan is incomplete.


          8)Prohibits a financial assurance mechanism shall not be  
            released without the consent of the lead agency and DOC. 









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          9)Clarifies how a lead agency may cause the forfeiture of  
            financial assurance mechanism when an operator is financially  
            incapable of completing reclamation in accordance with its  
            approved reclamation plan 


          10)Requires the Board to develop a form for submission of  
            financial assurances.


          11)Establishes a formal process for review of financial  
            assurance cost estimate (FACE) by DOC, and includes the  
            ability of the DOC to require consultations with lead agencies  
            when they do not agree with the DOC's assessment of the FACE.   
            Requires lead agencies to explain in writing why the lead  
            agency is not modifying the FACE pursuant to comments made by  
            the DOC.


          12)Allows a lead agency employee, under specified conditions, to  
            conduct inspections of surface mining operations conducted by  
            the lead agency. 


          13)Specifies that if the operator does not request an inspection  
            date or the lead agency is unable to inspect on the requested  
            date, the lead agency must provide a minimum five 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 6 months of receipt of the report  
            and instead requires inspections at 12-month intervals.


          14)Requires that DOC to establish an inspection training program  
            that all inspectors must complete by July 1, 2020.  Requires  
            inspectors to retake the training at least every five years.










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          15)Requires inspection reports to be submitted to the DOC within  
            90 days and specify what is to be included in the reports.


          16)Requires lead agency to outline intended plan of action to  
            remedy violations noted in inspection report.


          17)Allows DOC or the Board to apply to the small claims court or  
            superior court to collect unpaid administrative fees.  Allows  
            the lead agency or DOC to assess administrative penalties on  
            operators who do not pay annual reporting fees.


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, there are unknown costs to the Surface Mining and  
          Reclamation Account for additional review by the director of  
          reclamation plans and financial assurances.


          COMMENTS:  


          1)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  
          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  








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          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.





            In the Governor's signing statement for SB 447 (Lara, 2013),  
            Chapter 417, Statutes of 2013, he 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)   Financial assurances are not released until reclamation  
               is complete;











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



             e)   Quality inspections of mines occur annually;



             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.





            The goal of these talks is to amend SMARA to meet its intent.   
            DOC released language on these issues and solicited feedback  
            from stakeholders.  This language was amended into this 


            bill and SB 209 (Pavley), and, therefore, the current bill is  
            the product of the Governor's stakeholder process.










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          1)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 toward 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 creates a new layer of DOC review of  
            reclamation plans to ensure they are complete and to give the  
            Director an opportunity to improve the plans.  AB 1142 also  
            attempts to improve financial assurances by making sure they  
            are adequate and prevent the release of mechanisms prior to  
            completion of reclamation by requiring both the DOC and lead  
            agency to agree to their release.   

          2)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 can be included in a SMARA permit.  These  








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            conditions can include requirements that deal with water  
            quality issues and streambed alterations.  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 mines frequently or adequately. AB 1142  
            requires the DOC to establish an inspection training program  
            and for inspectors to retake the program every five years.



          3)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.  AB 1142 allows  
            the lead agency or DOC to assess administrative penalties of  
            operators who do not pay annual reporting fees.  AB 1142  
            provides the Board with more tools to work with lead agencies  
            to address problems with their implementation of SMARA, such  
            as remedial plans or taking away some of their powers.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file










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          Opposition


          None on file




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