SB 108 Senate Bill - Bill Analysis

BILL ANALYSIS �

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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2011-2012 Regular Session |
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BILL NO: SB 108 HEARING DATE: April 26, 2011

AUTHOR: Rubio URGENCY: No
VERSION: As Introduced CONSULTANT: Bill Craven
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Surface mining: idle mines.

BACKGROUND AND EXISTING LAW
The Surface Mining and Reclamation Act (SMARA) requires that a
mine operator prepare a reclamation plan that is approved by the
lead agency, which is usually a local government. When an
operator decides to idle a surface mining operation, SMARA
requires the operator to prepare an interim management plan
(IMP) for approval by the lead agency. Idle mines are defined as
those at which operations are curtailed for a period of one year
or more by more than 90 percent of the previous maximum annual
mineral production and where there is an intent to resume
surface mining operations at a future date. If there is no
intent to resume mining, a mine is considered either active (and
presumably going through the reclamation process) or abandoned.

When a mine is idled, SMARA requires an IMP to be submitted to
the lead agency for review and approval within 90 days. The lead
agency has 60 days to review and approve the IMP, although there
are provisions in the law for these deadlines to be extended
upon mutual agreement. Because the IMP is considered an
amendment to a reclamation plan, it is also subject to review by
the Department of Conservation (department). A lead agency must
respond in writing to any comments from the department.
Typically, the interim management plan addresses public health
and safety issues that must be addressed until operations are
resumed and often include runoff, drainage, erosion control, and
temporary fencing.

SMARA also provides for an appeals process if the lead agency
denies approval of the IMP. IMPs may remain in effect for a
period not to exceed five years. At that point, the lead agency
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may renew the IMP for another five year period if the operator
is in compliance with SMARA. If that does not happen, the
operator must begin mining or reclamation. If the plan is not
filed, the mine is considered abandoned and the operator is
responsible for beginning the reclamation process. In most
circumstances, mines that have been idle for more than one year
and have not obtained an IMP shall be considered abandoned and
the operator must begin reclamation.

The IMP is considered an amendment to the applicable reclamation
plan and is not subject to the California Environmental Quality
Act.

Idle mines must maintain approved financial assurances for
reclamation and like active mines, must file an annual report
with the department along with appropriate reporting fees, and
are subject to annual inspections.

PROPOSED LAW
This bill would make four major changes to state law with regard
to idle mines.

First, the bill would enlarge from one to five years the
timeline by which the 90 percent reduction in production is
measured.

Second, the bill would create a series of exceptions that would
allow a mine that would normally be considered idle to be exempt
from that status and allowed to remain active. These exceptions
include:

(1) Mines that produced during any 12-month period in the prior
two years either 25,000 or more combined tons of mineral and
waste or 10 percent or more of the operation's previous maximum
annual combined production of mineral and waste within any of
the last five years.

(2) The operator of the surface mining operation has expended
in the prior two years twenty-five thousand dollars ($25,000) or
more on capital improvements or operating costs in connection
with the surface mining operation.

(3) The operator of the surface mining operation has curtailed
production at the surface mine as a result of circumstances
beyond the reasonable control of the operator, including,
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without limitation, force majeure events, legal action,
regulatory or judicial orders, strikes, work slowdowns or
stoppages, lockouts, governmental restrictions, inability to
secure necessary supplies, materials or labor, or acts or
failures to act of third parties upon whom the operator's
ability to conduct surface mining operations is dependent.

(4) The operator of the surface mining operation can otherwise
demonstrate that the surface mining operation is not in fact
idle.

Third, the bill would authorize a lead agency to continuously
renew an IMP for additional 5-year periods provided the operator
is in compliance with the IMP.

Fourth, the bill allows lead agencies to order operators to file
an IMP if an operation remains idle for more than one year
without an IMP. Such IMPs would be in effect for five years, and
the bill would also add to SMARA provisions authorizing
operators to appeal such an order.

ARGUMENTS IN SUPPORT
The author and sponsor, the California Construction Industrial
Materials Association (CalCIMA) state that the bill is needed
because the current definition of "idle is unnecessarily narrow
and not suitable for mines facing ebbs or spikes in demand
caused by large public works projects or, alternatively,
depressed construction activities. The author and CalCIMA point
out that a year or two of high demand followed by a drop-off in
demand could trigger a requirement for an IMP as would a
depressed economy that causes a longer-term decrease in demand.

The author and sponsor also state that the determination of
"idle" when made by a lead agency could result in the immediate
initiation of reclamation without the operator being aware of
that determination. They are also concerned that existing law is
ambiguous regarding how many IMP renewals may be granted by a
lead agency.

Several mining companies are in support of the bill and they all
assert that current law inadvertently penalizes operators who
experience decreased construction activity. They strongly
support provisions in SMARA that would provide expanded
opportunities to file IMPs.

ARGUMENTS IN OPPOSITION
None received
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COMMENTS
1.The Committee should be aware that this bill has been the
subject of negotiations between the industry, the author, the
department and committee staff and the proposed amendments
reflect the agreements that have been reached thus far. The
negotiations will continue after this hearing.

2.The Committee may determine that the basic change in the
definition of "idle" (shifting to a five-year basis instead of
a one-year basis) is reasonable in order to establish a longer
snapshot of activity upon which to base a determination of
whether an operation is or is not idle. Additionally, there is
agreement among all the parties that, regardless of the
literal application of the definition of "idle," that
operators should have an opportunity to demonstrate that their
operation is not, in fact, idle. Language to that effect will
be added to the bill although for now the proposed language on
page 3, lines 21-22 shall remain as placeholder language.
(Amendment 1)

3.With one minor exception, the Committee may also consider
approving the provisions in this bill identified above that
would authorize a lead agency to renew an IMP for additional
5-year periods provided the operator is in compliance with the
IMP and that would allow lead agencies to order operators to
file an IMP if an operation remains idle for more than one
year without an IMP and the related procedural provisions. The
exception is that the word "continuously" on page 6, line 14
is extraneous and should be deleted. This amendment has been
agreed to by all the parties. (Amendment 2)

4.One of the major objectives of the author and sponsor is to
expand the opportunity of mine operators to file IMPs and to
establish the correct status of a mine as either idle, active,
abandoned, or undergoing reclamation. According to technical
information provided by the department, 306 mines are
reporting active that have no production. Clearly, the mining
industry and the department need an opportunity to clarify
what mines are active and what mines are not.

This has been one of the major topics in the ongoing
discussions of this bill. Committee staff is in agreement with
the author's objective. However, in the meetings on this bill,
there is agreement that the proposed language should be
deleted pending further discussions. (Amendment 3)

There is also agreement that a new provision of the bill
should involve a conditional amnesty program for operators who
establish the correct status of their mining operations. That
provision may be added to the bill assuming it moves forward.

5. Other issues are also under discussion. For example the
author and sponsors proposed on page 7 a series of provisions
that would apply when the review of an IMP is pending or on
appeal. There is not yet agreement on these provisions and the
parties have agreed to delete them pending further discussion.

It bears emphasizing that the central objective of this bill is
worth achieving. Many mines are not properly classified as
either active, idle, abandoned, or undergoing reclamation and
the department and operators would benefit if there were a
general re-setting of the clock and an opportunity to correctly
establish a mine's status. The author and sponsors have agreed
that committee staff will continue to participate in the
discussions and that the bill may be re-heard in this Committee
at a future date should the chair so request.

Other provisions of Sec. 2770 may be obsolete, and those
provisions will be proposed for deletion in a subsequent
hearing.

SUGGESTED AMENDMENTS

AMENDMENT 1
Page 3, lines 3-20, delete , and delete lines 23-25.

AMENDMENT 2.
Page 6, line 14. Delete "continuously."

AMENDMENT 3.
Page 7, lines 11-40, delete and delete all of page 8.

SUPPORT
California Cement Manufacturers Environmental Coalition
Holliday Rock Company, Inc.
Basic Resources, Inc.
California Construction & industrial Materials Association
Vulcan Materials Company, Western Division
Lehigh Hanson
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National Cement Company of California, Inc.
Teichert & Son, Inc.
West Coast Aggregates, Inc.
Beacon Concrete Inc.

OPPOSITION
None Received