BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
889 (Aanestad)
Hearing Date: 05/03/2010 Amended: As introduced
Consultant: Brendan McCarthy Policy Vote: NR&W 7-1
SB 889 (Aanestad), Page 2
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BILL SUMMARY: SB 889, an urgency measure, requires the
Department of Fish and Game to provide a refund for suction
dredge mining permit fees, due to the closure of suction dredge
mining in the middle of the 2009 season.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Refunding fees (including Up to $270 Special
*
administrative costs)
Avoided refund costs due Unknown, likely to be over
($200) Special *
to litigation
* Fish and Game Preservation Fund.
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STAFF COMMENTS:
Suction dredge mining entails using a vacuum system to pull up
gravel and other materials from river beds and then using
on-board equipment to sort out trace amounts of gold from the
river bottom, before returning the water and gravel to the
river. In most of the state, suction dredge mining is permitted
year round. However, most mining activity takes place in the
summer months. Some areas of the state are closed to suction
dredge mining entirely or for specified times of the year.
Under current law, persons engaging in suction dredge mining are
required to apply for a permit from the Department of Fish and
Game and pay a permit fee.
In recent years, there have been lawsuits against the Department
over its regulation of suction dredge mining. In these lawsuits,
concerns have been raised about the impact of this activity on
salmon spawning habitat. On July 9, 2009, a court issued a
preliminary injunction barring the Department from issuing
permits. On August 6, 2009, suction dredge mining activity was
suspended in the state with the enactment of SB 670 (Wiggins,
SB 889 (Aanestad), Page 2
Chapter 62, Statutes of 2009). SB 670 prohibits suction dredge
mining from resuming until the Department completes an
environmental impact report and revises its existing
regulations. The Department estimates these activities will be
complete by the summer of 2011.
In 2009, the Department issued 3,068 resident permits ($47.00)
and 585 non-resident permits ($185.25). Current law does not
authorize the Department to refund permit fees.
This bill authorizes the Department to issue a refund to any
suction dredge mining permit holder that requests such a refund.
The total number of permit holders that will request refunds
under this bill is unknown, but is likely to be high, given the
mid-season closure in 2009 and the prominence of this issue
amongst permit holds. The Department estimates the cost to
refund all permits issued in 2009 to be about $270,000 including
administrative costs to process refunds.
If this bill is not enacted, the Department may face legal
challenges. To date, there has been one small claims court case
against the Department (Wegner v. Koch et. al., Los Angeles
County Small Claims Court). In that case, the court found for
the plaintiff and ordered the Department to refund the
plaintiff's permit fee ($47.00) and pay court costs ($32.50). In
addition to the cost of the judgment, the Department and the
Attorney General's office incurred legal expenses associated
with the claim. Given the outcome of this case, additional
claims against the state are likely.
The potential costs to the state from future claims are unknown.
However, if 50 percent of permittees pursue legal action against
the Department and other courts make similar findings, costs to
the Department could be over $200,000, including permit refunds,
administration, and legal oversight costs.
This bill is an urgency measure.