SB 1270: A Major Shift in California Mine Regulation

Senator Fran Pavley (D-Agoura Hills) recently introduced Senate Bill 1270, legislation intended to overhaul the way surface mining is regulated in California. The current version of SB 1270 can be found here.

SB 1270 proposes to alter SMARA in three ways:

1. SB 1270 reduces local agencies' land use authority over surface mines, and installs that power in the state Department of Conservation instead.

• Inspections and Enforcement: SB 1270 would eliminate lead agencies' inspection authority, and authorize a new "State Mine Inspector" in the Department of Conservation ("Department") to conduct all annual compliance inspections of surface mines instead. The Department would be empowered to require lead agencies to then carry out enforcement actions for noncompliance issues identified during inspections.
• Financial Assurances: SB 1270 would eliminate lead agencies' authority to review and approve financial assurances for surface mines, and give that power exclusively to the Department. The Department would be authorized to review and require changes to existing financial assurances. The bill would also authorize the Department to seize an operator's financial assurances without a public hearing as is currently required. Operators, further, would lose their existing right to appeal financial assurances issues to the lead agency, and would be required to appeal those issues directly to the State Mining and Geology Board ("SMGB").

2. SB 1270 subjects surface mine operators to an "uncapped" annual fee.

SB 1270 would eliminate the current maximum fee in favor of a minimum $1,000 fee without upper limit. The uncapped fees would be based on "a cost per acre" pursuant to new regulations to be adopted by the SMGB. The bill would also allow the SMGB to increase fees as it deems necessary to cover the Department and SMGB's administrative operating costs, without limit.

3. SB 1270 subjects operators, lead agencies, and the Department to new legal challenge.

SB 1270 creates new opportunity for legal challenge in three respects.

• First, SB 1270 creates a new right for third parties to appeal a local agency's approval of a reclamation plan to the SMGB.
• Second, SB 1270 creates a new right for third parties to appeal the Department's decision to approve or deny approval of financial assurances to the SMGB.
• Third, SB 1270 creates a new right for third parties to appeal to the SMGB the Department's quarterly placement, maintenance, or removal of surface mine operations from the "AB 3098" list of operations approved to sell material to local and state agencies. For those not on the list, such a legal challenge would, under the bill, preclude placement on the list until the challenge is resolved.

SB 1270 appears to follow on amendments to the state Surface Mining and Reclamation Act ("SMARA") enacted last year. Senate Bill 447 clarified that surface mining operations may remain on the Department-maintained "AB 3098" list while working to resolve compliance issues. Importantly, SB 447 also requires the Department to submit a comprehensive report to the Legislature by January 1, 2018, on statewide SMARA compliance. In his signing statement accompanying SB 447, Governor Brown noted that SB 447 was only "interim leniency" as the Legislature took time to reform SMARA "from top to bottom." Presumably, such reform would occur once the Legislature has the Department's comprehensive report in hand.

Senator Pavley introduced her legislation, however, in advance of the comprehensive SB 447 report and without input from key stakeholder groups. The bill cites nearly decade-old data compiled by the SMGB as support for its proposed revisions. SB 1270 also comes on the heel of a report prepared by a "blue ribbon panel" convened by Department Director Mark Nechodom to recommend measures to improve the Department's administration of SMARA. The Department has not yet fully implemented that report's findings.

Concerns so far expressed by local agencies, mine operators and other stakeholders run along several lines. First, local agencies object to SB 1270's infringement on their local land use authority. Second, SB 1270 would increase direct annual fee costs to operators, financial assurance costs, enforcement costs, and costs related to new legal challenges. Operators are concerned that increased costs will result in workforce reductions. Third, both local agencies and operators question the Department's ability to regulate surface mines more effectively than local governments.

The Senate Committee on Natural Resources and Water, chaired by Senator Pavley, is currently analyzing SB 1270. As always, we will continue to monitor this bill and provide regular updates, as well as any additional legislative developments regarding mining in California. If you want more information on this bill, feel free to contact us at bjohnson@hthglaw.com or aguernsey@hthglaw.com.

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