SMGB Amends Guidelines Defining
Mined Lands for Financial Assurances
On July 23rd, 2004 the State Mining & Geology
Board adopted revised financial assurances guidelines for use by
lead agencies and operators in determining appropriate Financial
Assurances amounts. The revised guidelines can be found on the SMGB
website. CMA submitted comments opposing the revised guidelines
for a variety of reasons and is asking the Board to table the item
subject to further discussion with interested parties. Unfortunately,
the item was not tabled. Guidelines do not have the same binding
legal effect as regulations.
Operators reviewing the guidelines will want to take note of two
significant changes. The first change confuses the picture of what
the Financial Assurance bond amount is for. PRC 2771 (a), makes
it clear that “Lead agencies shall require financial assurances
of each surface mining operation to ensure reclamation is performed
in accordance with the surface mining operation's approved reclamation
plan, as follows:” That is that each mining operation shall
have a financial assurance sufficient to cover the costs of reclamation
under their approved reclamation plan.
The SMGB on the other hand muddied the waters of this
issue and instead said the purpose of financial assurances was as
follows, “…approved financial assurances for the reclamation
of Mined lands, and surrounding lands affected by mining activities,…”
In addition, the legislature’s definition of mined lands was
not sufficient for the Board and they sought to redefine them as
follows, “The term “mined lands” when used in
the context of SMARA, refers to all lands disturbed by the mining
process.” This amendment was proposed by Member Baca at the
meeting who on a later agenda item of approving the City of Rancho
Cordova’s mining ordinance noted that the ordinance’s
definition of mined lands did not agree with the one the Board had
just adopted.
The City of Rancho Cordova defined "mined lands"
as the legislature did in PRC 2729. “"Mined lands"
includes the surface, subsurface, and ground water of an area in
which surface mining operations will be, are being, or have been
conducted, including private ways and roads appurtenant to any such
area, land excavations, workings, mining waste, and areas in which
structures, facilities, equipment, machines, tools, or other materials
or property which result from, or are used in, surface mining operations
are located.”
The legislature was very clear and concise in defining what a reclamation
plan was and that financial assurances must be carried in an amount
sufficient to ensure the reclamation of the lands covered by the
plan. Indeed the legislature recognized that a reclamation plan
might cover impacts adjacent to the property. The key being that
those impacts on surrounding lands were addressed in the reclamation
plan and then bonded for under the structure and methods of that
plan.
CMA requested that the Board make it clear as the
legislature had which came first, Financial Assurances or the Reclamation
Plan. The Board disagreed, with Chairman Jones expressing the comment
that if it was his property he would not want it covered by a reclamation
plan. It was CMA’s position that the redress of a third party
landowner adjacent to mined lands should not be infringed upon by
the Board and that that landowner might very well wish to seek redress
via civil procedures rather than have the infringement covered by
either a reclamation plan or financial assurance mechanism. We can
understand that an adjacent landowner whose property rights were
infringed upon would likely prefer judicial redress and immediate
restoration of any damages to their property rather than a Financial
Assurance they have no claim to that would simply guarantee when
the mine ceased operation their lands would be repaired.
For more information, please contact Adam Harper.
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