READ FIRST TIME 02/7/06.   

     AN ACT Relating to regulation of surface mining by ensuring adequate performance security to cover reclamation costs for mines and providing fees for the operation of the surface mining program; amending RCW 78.44.085, 78.44.045, 78.44.087, and 42.56.270; adding new sections to chapter 78.44 RCW; creating a new section; and providing an effective date.

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 ((a)) an expansion of a permitted surface mine, a new reclamation permit under RCW 78.44.081, or for combining existing public or private reclamation permits, shall pay a nonrefundable application fee to the department before being granted ((a surface mining)) the requested permit or permit expansion. 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 dollars)) in an amount pursuant to this section. The annual permit fee shall be payable to the department prior to the reclamation permit being issued and on the ((first)) anniversary of the permit date ((and)) each year thereafter.
     (4)(a) Except as otherwise provided in this subsection, each public or private permit holder must pay an annual fee under this section based on the categories of aggregate or mineral mined or extracted during the previous twelve months, as follows:
     (i) Zero to fifty thousand tons: A fee of one thousand two hundred fifty dollars;
     (ii) More than fifty thousand tons to three hundred fifty thousand tons: A fee of two thousand five hundred dollars;
     (iii) More than three hundred fifty thousand tons: A fee of three thousand five hundred dollars.
     (b) 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.
     (c) 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, and if each mine has less than seven acres of disturbed area.
     (((3))) (5) Any production records, mineral assessments, and trade secrets submitted by a permit holder, mine operator, or landowner to the department are to be held as confidential and not released as part of a public records request under chapter 42.56 RCW.
     (6) 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, pay fines, or ((cancellation of)) cancel the reclamation permit as provided in this chapter.
     (((4))) (7) All fees collected by the department shall be deposited into the surface mining reclamation account created in RCW 78.44.045.
     (((5))) (8) 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))) (9) Within sixty days after receipt of ((a permit application)) an application for a new or expanded permit, the department shall advise applicants of any information necessary to successfully complete the application.
     (10) In addition to other enforcement authority, the department may refer matters to a collection agency licensed under chapter 19.16 RCW when permit fees or fines are past due. The collection agency may impose its own fees for collecting delinquent permit fees or fines.

Sec. 2   RCW 78.44.045 and 1993 c 518 s 10 are each amended to read as follows:
     (1) The surface mining reclamation account is created in the state treasury. Annual mining fees, funds received by the department from state, local, or federal agencies for research purposes, as well as other mine-related funds and fines received by the department shall be deposited into this account. Except as otherwise provided in this section, the surface mine reclamation account may be used by the department only to:
     (((1))) (a) Administer its regulatory program pursuant to this chapter;
     (((2))) (b) Undertake research relating to surface mine regulation, reclamation of surface mine lands, and related issues; and
     (((3))) (c) Cover costs arising from appeals from determinations made under this chapter.
     (2) At the end of each fiscal biennium, any money collected from fees charged under RCW 78.44.085 that was not used for the administration and enforcement of surface mining regulation under this chapter must be used by the department for surveying and mapping sand and gravel sites in the state.
     (3) Fines, interest, and other penalties collected by the department under the provisions of this chapter shall be used to reclaim surface mines abandoned prior to 1971.

Sec. 3   RCW 78.44.087 and 1997 c 186 s 1 are each amended to read as follows:
     (1) The department should ensure that a sufficient performance security is available to reclaim each surface mine permitted under this chapter. To ensure sufficient funds are available:
     (a) The department shall not issue a reclamation permit, except to public or governmental agencies, until the applicant has either deposited with the department an acceptable performance security on forms prescribed ((and furnished)) by the department that is deemed adequate by the department to cover reclamation costs or has complied with the blanket performance security option in section 4 of this act. A public or governmental agency shall not be required to post performance security.
     (b) 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 is not in a form that is acceptable to the department.
     (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. 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.
     (10) 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.
     (((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. 4   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 prescribed in RCW 78.44.087, 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 landowner 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. 5   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.

Sec. 6   RCW 42.56.270 and 2005 c 274 s 407 are each amended to read as follows:
     The following financial, commercial, and proprietary information is exempt from disclosure under this chapter:
     (1) Valuable formulae, designs, drawings, computer source code or object code, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss;
     (2) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (a) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (b) highway construction or improvement as required by RCW 47.28.070;
     (3) Financial and commercial information and records supplied by private persons pertaining to export services provided under chapters 43.163 and 53.31 RCW, and by persons pertaining to export projects under RCW 43.23.035;
     (4) Financial and commercial information and records supplied by businesses or individuals during application for loans or program services provided by chapters 43.163, 43.160, 43.330, and 43.168 RCW, or during application for economic development loans or program services provided by any local agency;
     (5) Financial information, business plans, examination reports, and any information produced or obtained in evaluating or examining a business and industrial development corporation organized or seeking certification under chapter 31.24 RCW;
     (6) Financial and commercial information supplied to the state investment board by any person when the information relates to the investment of public trust or retirement funds and when disclosure would result in loss to such funds or in private loss to the providers of this information;
     (7) Financial and valuable trade information under RCW 51.36.120;
     (8) Financial, commercial, operations, and technical and research information and data submitted to or obtained by the clean Washington center in applications for, or delivery of, program services under chapter 70.95H RCW;
     (9) Financial and commercial information requested by the public stadium authority from any person or organization that leases or uses the stadium and exhibition center as defined in RCW 36.102.010;
     (10) Financial information, including but not limited to account numbers and values, and other identification numbers supplied by or on behalf of a person, firm, corporation, limited liability company, partnership, or other entity related to an application for a liquor license, gambling license, or lottery retail license;
     (11) Proprietary data, trade secrets, or other information that relates to: (a) A vendor's unique methods of conducting business; (b) data unique to the product or services of the vendor; or (c) determining prices or rates to be charged for services, submitted by any vendor to the department of social and health services for purposes of the development, acquisition, or implementation of state purchased health care as defined in RCW 41.05.011; ((and))
     (12)(a) When supplied to and in the records of the department of community, trade, and economic development:
     (i) Financial and proprietary information collected from any person and provided to the department of community, trade, and economic development pursuant to RCW 43.330.050(8) and 43.330.080(4); and
     (ii) Financial or proprietary information collected from any person and provided to the department of community, trade, and economic development or the office of the governor in connection with the siting, recruitment, expansion, retention, or relocation of that person's business and until a siting decision is made, identifying information of any person supplying information under this subsection and the locations being considered for siting, relocation, or expansion of a business;
     (b) When developed by the department of community, trade, and economic development based on information as described in (a)(i) of this subsection, any work product is not exempt from disclosure;
     (c) For the purposes of this subsection, "siting decision" means the decision to acquire or not to acquire a site;
     (d) If there is no written contact for a period of sixty days to the department of community, trade, and economic development from a person connected with siting, recruitment, expansion, retention, or relocation of that person's business, information described in (a)(ii) of this subsection will be available to the public under this chapter; and
     (13) Any production records, mineral assessments, and trade secrets submitted by a permit holder, mine operator, or landowner to the department of natural resources under RCW 78.44.085.

NEW SECTION.  Sec. 7   Section 6 of this act takes effect July 1, 2006.

NEW SECTION.  Sec. 8   The department of natural resources shall establish a surface mining advisory committee that will recommend 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 appropriate committees of the legislature containing the committee's findings by September 1, 2006.