BILL REQ. #:  Z-0935.1 

Read first time 01/09/2006.   Referred to Committee on Natural Resources, Ocean & Recreation.

     AN ACT Relating to regulation of surface mining; amending RCW 78.44.085 and 78.44.087; adding new sections to chapter 78.44 RCW; creating a new section; and making an appropriation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 78.44.085 and 2001 1st sp.s. c 5 s 1 are each amended to read as follows:
     (1) An applicant for an expansion of the originally permitted area or a new reclamation permit, or for combining a public or private reclamation permit, shall pay a nonrefundable application fee to the department before being granted ((a surface mining)) the requested permit. The amount of the application fee shall be ((one)) two thousand five hundred dollars.
     (2) Permit holders submitting a revision to an application for an existing reclamation plan that is not an expansion shall pay a nonrefundable reclamation plan revision fee of one thousand dollars.
     (3) After June 30, ((2001)) 2006, each public or private permit holder shall pay an annual permit fee of one thousand five hundred dollars. The annual permit fee shall be payable to the department on the first anniversary of the permit date and each year thereafter. Annual fees paid by a county for mines used exclusively for public works projects and having less than seven acres of disturbed area per mine shall not exceed one thousand dollars. Annual fees are waived for all mines used primarily for public works projects if the mines are owned and primarily operated by counties with ((1993)) populations of less than twenty thousand persons based on the latest population estimates as determined by the Washington state databook prepared by the office of financial management, and if each mine has less than seven acres of disturbed area.
     (((3))) (4) Appeals from any determination of the department shall not stay the requirement to pay any annual permit fee. Failure to pay the annual fees may constitute grounds for an order to suspend surface mining, fines, or cancellation of the reclamation permit as provided in this chapter.
     (((4))) (5) All fees collected by the department shall be deposited into the surface mining reclamation account.
     (((5))) (6) If the department delegates enforcement responsibilities to a county, city, or town, the department may allocate funds collected under this section to the county, city, or town.
     (((6))) (7) Within sixty days after receipt of a new or expanded permit application, the department shall advise applicants of any information necessary to successfully complete the application.
     (8) In addition to other enforcement authority, the department may refer matters to a collection agency when permit fees or fines are past due. The collection agency may impose its own fees for collecting delinquent permit fees or fines.
     (9) Annual permit fees for surface mines that are regulated by the department under chapter 78.56 RCW, the metals mining and milling operations, are subject to chapter 78.56 RCW and the estimates of the annual fee by the department. The department of ecology shall transfer the appropriate annual fees collected under RCW 78.56.080 to the department for deposit directly to the surface mining reclamation account.

Sec. 2   RCW 78.44.087 and 1997 c 186 s 1 are each amended to read as follows:
     (1) The department should ensure that sufficient funds are available to reclaim the surface mine. The department shall not issue a reclamation permit until the applicant has deposited with the department an acceptable performance security on forms prescribed ((and furnished)) by the department, and that is adequate to cover reclamation costs. A public or governmental agency shall not be required to post performance security. No person may create a disturbed area that meets or exceeds the minimum threshold for a reclamation permit without first submitting an adequate and acceptable performance security to the department and complying with all requirements of this chapter.
     (2) ((This performance security may be)) The department may refuse to accept any performance security that the department for any reason deems to be inadequate to cover reclamation costs or not in an acceptable form.
     (3) Acceptable forms of performance security are:
     (a) Bank letters of credit acceptable to the department or irrevocable bank letters of credit from a bank or financial institution or organization authorized to transact business in the United States;
     (b) A cash deposit;
     (c) ((Negotiable)) Other forms of performance securities acceptable to the department as determined by rule;
     (d) An assignment of a savings account;
     (e) A savings certificate in a Washington bank on an assignment form prescribed by the department;
     (f) ((Assignments of interests in real property within the state of Washington)) Approved participants in a state security pool if one is established; or
     (g) A corporate surety bond executed in favor of the department by a corporation authorized to do business in the state of Washington under Title 48 RCW and authorized by the department.
     (((3))) (4) The performance security shall be conditioned upon the faithful performance of the requirements set forth in this chapter ((and of)), the rules adopted under it, and the reclamation permit.
     (((4))) (5)(a) The department ((shall have the authority to determine the amount of the performance security using a standardized performance security formula developed by the department. The amount of the security shall be determined by the department and based on the estimated costs of completing reclamation according to the approved reclamation plan or minimum standards and related administrative overhead for the area to be surface mined during (a) the next twelve-month period, (b) the following twenty-four months, and (c) any previously disturbed areas on which the reclamation has not been satisfactorily completed and approved)) must determine the amount of the performance security as prescribed by this subsection.
     (b) The department may determine the amount of the performance security based on the estimated cost of: (i) Completing reclamation according to the requirements of this chapter; or (ii) the reclamation permit for the area to be surface mined during the upcoming thirty-six months and any previously disturbed areas that have not been reclaimed.
     (c) The department may determine the amount of the performance security based on an engineering cost estimate for reclamation that is provided by the permit holder. The engineering cost estimate must be prepared using engineering principles and methods that are acceptable to the department. If the department does not approve the engineering cost estimate, the department shall determine the amount of the performance security using a standardized performance security formula developed by the department by rule.
     (((5))) (6) The department may ((increase or decrease the amount of the performance security at any time to compensate for a change in the disturbed area, the depth of excavation, a modification of the reclamation plan, or any other alteration in the conditions of the mine that affects the cost of reclamation. The department may, for any reason, refuse any performance security not deemed adequate)) recalculate a surface mine's performance security based on subsection (5) of this section. When the department recalculates a performance security, the new calculation will not be prejudiced by the existence of any previous calculation. A new performance security must be submitted to the department within thirty days of the department's written request.
     (((6))) (7) Liability under the performance security and the permit holder's obligation to maintain the calculated performance security amount shall be maintained until ((reclamation is completed according to the approved reclamation plan to the satisfaction of the department)) the surface mine is reclaimed, unless released as hereinafter provided. Partial drawings will proportionately reduce the value of a performance security but will not extinguish the remaining value. Liability under the performance security may be released only ((upon written notification by the department. Notification shall be given upon completion of compliance or acceptance by the department of a substitute performance security)) when the surface mine is reclaimed as evidenced by the department in writing or after the department receives and approves a substitute performance security. The department will notify the permit holder, and surety if applicable, when reclamation is accepted by the department as complete or upon the department's acceptance of an alternate security. The liability of the surety shall not exceed the amount of security required by this section and the department's reasonable legal fees to recover the security.
     (((7))) (8) Any interest or appreciation on the performance security shall be held by the department until ((reclamation is completed to its satisfaction. At such time, the interest shall be remitted to the permit holder; except that such interest or appreciation may be used by the department to effect reclamation in the event that the permit holder fails to comply with the provisions of this chapter and the costs of reclamation exceed the face value of the performance security)) the surface mine is reclaimed. The department may collect and use appreciation or interest accrued on a performance security to the same extent as for the underlying performance security. If the permit holder meets its obligations under this chapter, rules adopted under this chapter, and its approved reclamation permit and plan by completing reclamation, the department will return any unused performance security and accrued interest or appreciation.
     (((8))) (9) No other state agency or local government other than the department shall require performance security for the purposes of surface mine reclamation. The department may enter into written agreements with federal agencies in order to avoid redundant bonding of any surface ((mines straddling boundaries between federally controlled and other lands within)) mine that is located on both federal and nonfederal lands in Washington state. Nothing in this section prohibits a state agency or local government from requiring a performance security when the state agency or local government is acting in its capacity as a landowner and contracting for extraction-related activities on state or local government property.
     (((9) When acting in its capacity as a regulator, no other state agency or local government may require a surface mining operation regulated under this chapter to post performance security unless that state agency or local government has express statutory authority to do so. A state agency's or local government's general authority to protect the public health, safety, and welfare does not constitute express statutory authority to require a performance security. However, nothing in this section prohibits a state agency or local government from requiring a performance security when the state agency or local government is acting in its capacity as a landowner and contracting for extraction-related activities on state or local government property.))

NEW SECTION.  Sec. 3   A new section is added to chapter 78.44 RCW to read as follows:
     (1) A permit holder, in lieu of an individual performance security for each mining site, may file a blanket performance security with the department for their group of permits.
     (2) The department may reduce the required performance security calculated from its standard method, to an amount not to exceed the sum of reclamation security calculated by the department for the two surface mines with the largest performance security obligations, for nonmetal and nonfuel surface mines that meet the following conditions:
     (a) The permit holder has had a valid reclamation permit for more than ten years and can demonstrate exemplary mining and reclamation practices that have been accepted by the department;
     (b) The land owner agrees to allow the permit holder to hold a blanket security. The department must include, on forms to be signed by the landowner, notice of the risk of a lien on the landowner's lands; and
     (c) The permit holder can demonstrate substantial financial ability to perform the reclamation in the approved reclamation plan and permit.
     (3) Permit holders are not eligible for blanket securities if they are in violation of a final order of the department.
     (4) The department must consider the compliance history and the state of the existing surface mines of the permit holder before approving any blanket performance security.
     (5) Lands covered by a blanket performance security are subject to a lien placed by the department in the event of abandonment.
     (6) In lieu of the performance security required of the permit holder, the department may accept a similar security from the landowner, equal to the estimated cost of reclamation as determined by the department.

NEW SECTION.  Sec. 4   A new section is added to chapter 78.44 RCW to read as follows:
     (1) To the extent a performance security is insufficient to cover the cost of reclamation performed by the department, a lien shall be established in favor of the department upon all of the permit holder's real and personal property.
     (2) The lien attaches upon the filing of a notice of claim of lien with the county clerk of the county in which the property is located. The notice of lien claim must contain a true statement of the demand, the insufficiency of the performance security to compensate the department, and the failure of the permit holder to perform the reclamation required.
     (3) The lien becomes effective when filed.
     (4) The lien created by this section may be foreclosed by a suit in the superior court in the manner provided by law for the foreclosure of other liens on real or personal property.

NEW SECTION.  Sec. 5   The department of natural resources shall establish a surface mining advisory committee that will recommend long-term stable funding mechanisms, effective methods of accomplishing reclamation, and address other issues deemed appropriate by the committee for the effective administration of chapter 78.44 RCW. The committee is comprised of but not limited to representatives of mining interests, state and local government, environmental groups, and private landowners. The state geologist will select the members of the committee. The department of natural resources must submit a report to the legislature containing the committee's findings by September 1, 2006.

NEW SECTION.  Sec. 6   The sum of five hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30,2007, from the surface mining reclamation account to the department of natural resources for the purposes of surface mine reclamation.