SB 1270 Proposes Significant California Mining Reform

by Jeffer Mangels Butler & Mitchell LLP
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The recent submittal of significant proposed revisions to California's mining law, the Surface Mining and Reclamation Act ("SMARA"), signals potentially broad-reaching changes to the statute. On February 21, 2014, Senator Fran Pavely (D) introduced SB 1270, a bill proposing to overhaul various sections of SMARA. SB 1270 proposes fundamental changes to SMARA. Click here for a copy of SB 1270.

If these changes go through, mine owners and operators will be subject to a new regulatory system under which the State will assume a far greater and centralized role in various aspects of SMARA, including mine inspections, enforcement, and establishment of financial assurance mechanisms. The mining industry also faces the likely prospect of increased carrying costs, arising from such proposals as changes to the annual reporting fee structure (proposed at a minimum of $1,000/year on a per-acre basis, and with no maximum cap), to increased ability to appeal decisions relating to the State's "3098" list.

Specifically, SB 1270 proposes the following notable changes:

  1. Designation of the Office of Mine Reclamation as the "Division of Mines", to be headed by a new "State Mine Inspector".
  2. The State Mine Inspector would be responsible for mine inspections, shifting inspection duties away from local counties and cities.
  3. Establishment of a minimum $1,000 annual reporting fee, assessed on a per-acre basis and without any maximum fee limit.
  4. Creation of a mandatory notice of violation and remedial process to be undertaken by counties and cities for non-compliance with SMARA. Previously, counties and cities had discretion to undertake such actions for non-compliance with SMARA.
  5. Transfer to the Director of the Department of Conservation sole authority for proposing financial assurances (e.g., bonding requirements) for new or amended mining operations. The Director would also be granted the authority to review and change all existing financial assurances via an administrative decision by January 1, 2016.
  6. Significant expansion of appeal rights of decisions by the Department of Conservation ("Department") to list, de-list, or failing to list or de-list, mining operators from the States' "3098 List." Specifically, the proposed change would allow lead agencies and "affected persons" (i.e., members of the public) to appeal any such decisions. Mining operations not on the list are precluded from selling sand, gravel, aggregates or other mined materials to state or local agencies. Since OMR updates the 3098 List at least quarterly, the proposed change could subject mining operations to quarterly challenges relating to listing/de-listing decisions.
  7. Creation of a process under which counties and cities can unilaterally decide to forego their lead agency duties under SMARA, and transfer such duties to the State Mining and Geology Board ("SMGB").
  8. Addition of a requirement that reclamation plans for mining operations be certified by a registered professional geologist, geophysicist, or professional engineer.
  9. Addition of a requirement that reclamation plans include schedules for reclamation that must be updated annually based upon the "then-current' condition of the mine site.

If enacted, SB 1270 would signal significant changes to day-to-day mining operations in the State, and threatens to add new or increased hurdles to mining operators. This coming legislative session promises to be one of the more important sessions to the mining industry in recent memory, and all mining interests in the State need to keep abreast of SB 1270 as it works through the Legislature. Our firm is actively working on SB 1270 so stay tuned for updates in the coming weeks and months.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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