SMGB and DOC Begin Making Regulatory Changes Required by SMARA Reforms

The Legislature recently passed the most significant reforms to SMARA in more than 20 years, as we detailed in a prior post here. These reform measures touch every key process in SMARA, including the reclamation plan review and approval process, the financial assurances review and approval process, annual inspections, vested rights determinations, inspections, enforcement, and annual fees. The SMARA reforms become effective January 1, 2017.

A number of the new and amended SMARA statutory provisions require subsequent changes in the SMARA regulations. The SMARA regulations are typically adopted by the State Mining and Geology Board (“SMGB”), and occasionally by the state Department of Conservation (“DOC”). These regulations help implement SMARA’s statutory requirements.

The DOC prepared and presented to the SMGB at its June 9 meeting a report detailing the potential regulatory changes that the SMGB and DOC will need to adopt in response to the SMARA reforms. That report is available here. Regulatory changes will include changes to the calculation of annual operator fees, new financial assurance cost estimate and mechanism forms, new mine inspector guidance and training requirements, and new corporate self-bonding provisions, among others. The SMARA reforms specify a timeframe for the SMGB and DOC to complete some of these regulatory changes, but not all.

These regulatory changes must be adopted through a formal “rulemaking” process required by the California Administrative Procedure Act (“APA”). The APA requires agencies to circulate proposed regulatory changes to the public for review and comment, respond to comments received, consider the changes at a public hearing, and comply with other procedural requirements. The SMGB and DOC will follow this process, which affords mine operators, lead agencies, and other stakeholders an important opportunity to help shape the new regulations.

The SMGB has already begun work on adopting changes to the annual operator fee regulations. These changes are necessary in light of the new fee structure the Legislature adopted as part of the SMARA reforms. Under the new structure, operator annual fees will increase from approximately $5,000 this year to $6,000 in 2017, $8,000 in 2018, and $10,000 in 2019. The SMGB has prepared an “Initial Statement of Reasons” explaining the proposed regulatory changes, and the 45-day public comment period begins July 1 and runs through August 19, according to the SMGB’s public notice available here. The SMGB intends to adopt the final fee regulation changes in September. The complete rulemaking process is available here.

The SMGB and DOC expect to require up to two years to complete all the regulatory changes required by the SMARA reforms.

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