BILL ANALYSIS Ó AB 1142 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1142 (Gray) As Amended March 16, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |73-1 |(June 4, 2015) |SENATE: |35-0 |(March 31, 2016) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------- ---------------------------------------------------------------------- | | | | | | | | | | | | |COMMITTEE VOTE: | 9-0 | (April 11, |RECOMMENDATION: |concur | | | |2016) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ---------------------------------------------------------------------- (Nat. Res.) Original Committee Reference: NAT. RES. AB 1142 Page 2 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. The Senate amendments reflect an agreement between the author of this bill and the author of SB 209 (Pavley) of the current legislative session to divide the subject matter of two surface mining bills. Specifically, the Senate Amendments: 1)Require the division to provide an accounting of how fee revenue is spent. 2)Define "reclamation" and "financial assurances". 3)Allow the Department of Conservation (DOC) to appeal financial assurance approvals that they believe are inadequate to the California State Mining and Geology Board (Board). 4)Clarify the financial assurance and reclamation plan appeal process to the Board, establish time frames for hearings, specify issues that need to be considered, and clarify under what circumstances the Board can decline to hear appeals. 5)Clarify 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)Require lead agencies to certify that the proposed reclamation plan is complete and compliant with applicable statutes and regulations. 7)Allow DOC to make a determination of incompleteness and remand AB 1142 Page 3 the reclamation plan back to the lead agency for improvements prior to approval. Set a deadline of 30 days for the director of DOC (Director) to notify a lead agency and the operator that a reclamation plan is incomplete. Set deadline of 30 days for the Director to prepare written comments on the reclamation plan after notifying that a reclamation plan is incomplete. 8)Prohibit a financial assurance mechanism shall not be released without the consent of the lead agency and the department. 9)Clarify 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)Require the Board to develop a form for submission of financial assurances. 11)Delete requirement that lead agency have to accept or reject the Financial Assurance Cost Estimates (FACE) within 60 days of receipt of DOC's comments or the due date for the comments, if comments are not received. Deletes requirement for appeal process and timelines if the lead agency determines the FACE is inadequate. The Senate amendments instead, establish a formal process for review of FACE by DOC and include the ability of the DOC to require consultations with lead agencies when they do not agree with the DOC's assessment of the FACE. Require lead agencies to explain in writing why the lead agency is not modifying the FACE pursuant to comments made by the DOC. 12)Require inspection reports to be submitted to the DOC within 90 days and specifies what is to be included in the reports. 13)Require lead agency to outline intended plan of action to AB 1142 Page 4 remedy violations noted in inspection report. 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 Board. Reclamation plans and financial assurances must be submitted to the Director for review. 2)Requires the Board to impose an annual reporting fee for each 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 lead agencies to require financial assurances of each surface mining operation to ensure reclamation is performed in accordance with the surface mining operation's approved reclamation plan. 5)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. AB 1142 Page 5 6)Requires lead agencies to conduct annual mine inspections to determine compliance with SMARA. FISCAL EFFECT: 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. COMMENTS: There are over 1,000 active mines in California that remove aggregate for building material, metals, and minerals. California is the only state in the United States 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. In the Governor's signing statement for SB 447 (Lara), 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: AB 1142 Page 6 1)Meaningful reclamation of disturbed mine lands; 2)Adequate financial assurance; 3)Financial assurances are not released until reclamation is complete; 4)Financial assurance can be used for reclamation if the mine owner does not reclaim their mine; 5)Quality inspections of mines occur annually; 6)When inspectors find non-compliance enforcement is clear, timely, and meaningful; 7)The Board has tools to improve local SMARA implementation; 8)Reporting fees and penalties are paid by operators and that fees cover the cost of the program; and, 9)Inappropriate exemptions from SMARA are stopped. The goal of these talks is to amend SMARA to meet its intent. In DOC released language on these issues and solicited feedback from stakeholders. This language was amended into this bill and SB 209, and therefore, the current bill is the product of the Governor's stakeholder process. Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0002725 AB 1142 Page 7