California Mining Update
AB 1142 and SB 209: What operators need to know about SMARA modernization
Changes will be effective January 1, 2017
Matthew J. Sanders
This article was first published in The Conveyor magazine, a publication of CalCIMA.
On April 18, 2016, Governor Jerry Brown signed into law two bills that together provide the most significant update to the California Surface Mining and Reclamation Act (SMARA) in 25 years. Assembly Bill (AB) 1142 (Gray) and Senate Bill (SB) 209 (Pavley) are the outgrowth of more modest changes in recent years, and of a promise by the Governor, in 2013, to reform SMARA from “top to bottom.” Although the bills are not effective until January 1, 2017, operators must be aware of their changes and start planning for their implementation.
Most important in the near term are changes to SMARA’s inspections process, financial assurance approval process, reclamation plan requirements, and inspector qualifications.
Beginning in 2017, operators must request, on their annual reports, an inspection date within 12 months of their prior inspection. For inspections conducted in 2016, the 12-month date will be triggered for 2017.
The annual inspection date is the starting point for wholly new annual financial assurance review and approval processes. Note the plural—under AB 1142 and SB 209, SMARA will now have (1) a process for financial assurance cost estimates (FACEs) for new or amended reclamation plans and (2) another process for annual FACE updates. Each process sets new steps and deadlines that are tied to the annual inspection date. Moreover, each process provides the Department of Conservation (DOC) a new right to formally consult with lead agencies and operators during the FACE review process, and to give DOC a new right to appeal a lead agency’s approval of a FACE. Annual financial assurance review was already a SMARA requirement, but the new legislation formalizes the review process to provide greater clarity and transparency.
Corporate self-bonding is now permitted for companies worth more than $35 million, subject to regulations which will be approved by the SMGB. Multiple operations can combine their assets to pass the financial test, but self-bonding is limited to 75% of the value of an operator’s FACE(s). Continue reading