1     
MINING SURETY REQUIREMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Phil Lyman

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies providers related to surety requirements for mining operations.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     exempts the state and political subdivisions from the requirement to provide surety
14     related to reclamation of a mining operation; and
15          ▸     makes technical and conforming changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          None
20     Utah Code Sections Affected:
21     AMENDS:
22          40-8-7, as last amended by Laws of Utah 2008, Chapter 382
23          40-8-14, as last amended by Laws of Utah 2011, Chapter 125
24          40-8-16, as last amended by Laws of Utah 1989, Chapter 22
25          40-8-18, as last amended by Laws of Utah 2003, Chapter 35
26          40-8-19, as enacted by Laws of Utah 1975, Chapter 130
27     

28     Be it enacted by the Legislature of the state of Utah:
29          Section 1. Section 40-8-7 is amended to read:
30          40-8-7. Board and division -- Authority.
31          (1) The board and the division may require:
32          (a) that a notice of intention for [all] mining operations be filed with, and approved by,
33     the division, before the mining operation commences or continues pursuant to Sections 40-8-13
34     and 40-8-23;
35          (b) the reclamation of lands affected by mining operations after [the effective date of
36     this chapter] May 13, 1975, having due regard for innate differences in mineral deposits;
37          (c) for mining operations, including small mining operations, the furnishing and
38     maintenance of reasonable surety to guarantee that the land affected is reclaimed according to
39     approved plans consistent with on-site conditions except as provided in Subsection (4);
40          (d) that the operator rehabilitate, close, or mitigate the impacts of [each] a drill hole,
41     shaft, or tunnel as required under Section 40-8-13;
42          (e) that the operator pay legally determined public liability and property damage claims
43     resulting from mining operations;
44          (f) that every operator who conducts mining operations in the state maintain suitable
45     records and make periodic reports to the division as required under this chapter;
46          (g) that with respect to [all] mining operations, a notice of intention is filed with and,
47     if required by this chapter, approved by the division before [any such] the mining operations
48     are commenced or continued pursuant to Section 40-8-23;
49          (h) the suspension of mining operations in an emergency situation;
50          (i) the payment of fixed, uniform, and nonescalating permit fees; or
51          (j) that mining operations be conducted to minimize or prevent hazards to public health
52     and safety.
53          (2) [No] A rule [established] made by the board with respect to mined land
54     reclamation [shall] may not have retroactive effect on existing reclamation plans included as a
55     part of an approved notice of intention to commence mining operations which was approved
56     [prior to] before the effective date of the rule.
57          (3) The board may [promulgate] make rules relating to the surety for mining operations
58     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
59          (4) (a) For purposes of this Subsection (4):
60          (i) "Political subdivision" means a:
61          (A) county;
62          (B) municipality;
63          (C) school district;
64          (D) local district under Title 17B, Limited Purpose Local Government Entities - Local
65     Districts;
66          (E) special service district under Title 17D, Chapter 1, Special Service District Act; or
67          (F) any other political subdivision of the state.
68          (ii) "State" means:
69          (A) the state; or
70          (B) an office, department, agency, authority, commission, board, institution, hospital,
71     college, university, or other instrumentality of the state.
72          (b) The state or a political subdivision is exempt from a requirement to provide surety
73     to the board or division for mining operations if the mining operations are operated by the state
74     or political subdivision.
75          Section 2. Section 40-8-14 is amended to read:
76          40-8-14. Surety requirement -- Liability of small mining operations for failure to
77     reclaim -- Forfeiture of surety.
78          (1) (a) [After] Subject to Subsection 40-8-7(4), after receiving notification that a notice
79     of intention for mining operations has been approved, but [prior to] before commencement of
80     those operations, the operator shall provide surety to the division, in a form and amount
81     determined by the division or board as provided in this section.
82          (b) In determining the amount of surety under this section, the division may use the
83     average cost of reclamation per acre.
84          (c) The board shall annually establish a figure representing the average cost of
85     reclamation per acre after receiving a presentation from the division concerning the average
86     cost of reclamation per acre and providing opportunity for public comment.
87          (2) (a) Except as provided in Subsection (3), the division shall approve the amount and
88     form of surety.
89          (b) In determining the amount of surety to be provided, the division shall consider:
90          (i) the magnitude, type, and costs of approved reclamation activities planned for the
91     land affected; and
92          (ii) the nature, extent, and duration of operations under the approved notice.
93          (c) The division shall approve a fixed amount estimated to be required to complete
94     reclamation at any point in time covered by the notice of intent.
95          (d) (i) The division shall determine the amount of surety required for [notices] a notice
96     of intention, by using cost data from current large mining sureties.
97          (ii) The costs shall be adjusted to reflect the nature and scope of activities in the
98     affirmative statement filed under Subsection 40-8-18(4).
99          (e) (i) In determining the form of surety to be provided by the operator, the division
100     shall approve a method acceptable to the operator consistent with the requirements of this
101     chapter.
102          (ii) The form of surety that the operator may provide includes[, but is not limited to,]
103     the following:
104          (A) collateral;
105          (B) a bond or other form of insured guarantee;
106          (C) deposited securities; or
107          (D) cash.
108          (3) (a) If the operator proposes reclamation surety in the form of a written contractual
109     agreement, the board shall approve the form of surety.
110          (b) In making this decision, the board shall consider:
111          (i) the operator's:
112          (A) financial status;
113          (B) assets within the state;
114          (C) past performance in complying with contractual agreements; and
115          (D) facilities available to carry out the planned work;
116          (ii) the magnitude, type, and costs of approved reclamation activities planned for the
117     land affected; and
118          (iii) the nature, extent, and duration of operations under the approved notice.
119          (4) In determining the amount and form of surety to be provided under this section,
120     consideration shall be given to similar requirements made on the operator by landowners,
121     governmental agencies, or others, with the intent that surety requirements shall be coordinated
122     and not duplicated.
123          (5) The liability under surety provisions shall continue until liability, in part, or in its
124     entirety, is released by the division.
125          (6) (a) If the operator of a mining operation, including a small mining operation, fails
126     or refuses to carry out the necessary land reclamation as outlined in the approved notice of
127     intention, the board may, after notice and hearing, declare any surety filed for this purpose
128     forfeited.
129          (b) With respect to the surety filed with the division, the board shall request the
130     attorney general to take the necessary legal action to enforce and collect the amount of liability.
131          (c) If surety or a bond has been filed with the Division of Forestry, Fire, and State
132     Lands, the School and Institutional Trust Lands Administration, or any agency of the federal
133     government, the board shall certify a copy of the transcript of the hearing and transmit [it] the
134     certified copy to the agency together with a request that the necessary forfeiture action be
135     taken.
136          (d) The forfeited surety shall be used only for the reclamation of the land to which [it]
137     the forfeited surety relates, and any residual amount returned to the rightful claimant.
138          Section 3. Section 40-8-16 is amended to read:
139          40-8-16. Approved notice of intention valid for life of operation -- Withdrawal,
140     withholding, or refusal of approval -- Procedure and basis.
141          (1) An approved notice of intention or approved revision of [it] a notice of intention
142     remains valid for the life of the mining operation, as stated in [it] the notice of intention, unless
143     the board withdraws the approval as provided in Subsection (2).
144          (2) The board or the division [shall] may not withdraw approval of a notice of intention
145     or revision of [it] a notice of intention, except as follows:
146          (a) Approval may be withdrawn [in the event that] if the operator substantially fails to
147     perform reclamation or conduct mining operations so that the approved reclamation plan can be
148     accomplished.
149          (b) Approval may be withdrawn [in the event that] if the operator fails to provide and
150     maintain surety as may be required under this chapter unless the operator is exempt under
151     Subsection 40-8-7(4).
152          (c) Approval may be withdrawn [in the event that] if mining operations are
153     continuously shut down for a period in excess of five years, unless the extended period is
154     accepted upon application of the operator.
155          (3) Approval of a notice of intention may not be refused, withheld, nor withdrawn by
156     the division until the operator, who holds or has applied for such approval, has had an
157     opportunity to request a hearing before the board, present evidence, cross-examine, and
158     participate fully in the proceedings. Based on the record of the hearing, the board [will] shall
159     issue an order concerning the refusal, withholding, or withdrawal of the notice of intention. If
160     no hearing is requested, the division may refuse, withhold, or withdraw approval of a notice of
161     intention.
162          (4) [In the event that] If the division or the board withdraws approval of a notice of
163     intention or [its] the notice of intention's revision, [all] mining operations included under the
164     notice of intention shall be suspended in accordance with procedures and schedule approved by
165     the division.
166          Section 4. Section 40-8-18 is amended to read:
167          40-8-18. Notice of intention to revise operations -- Procedure.
168          (1) (a) Since mining operations and related reclamation plans may need to be revised to
169     accommodate changing conditions or new technology, an operator conducting mining
170     operations under an approved notice of intention shall submit to the division a notice of
171     intention when revising mining operations.
172          (b) The notice of intention to revise mining operations shall be submitted in the form
173     required by the rules [promulgated] made by the board.
174          (2) (a) The division shall designate a notice of intention to revise mining operations
175     [will be designated] as an amendment to the existing notice of intention [by the division],
176     based on rules [promulgated] made by the board.
177          (b) An amendment of a notice of intention [will] shall be reviewed and considered for
178     approval or disapproval by the division within 30 days of receipt of a notice of intention to
179     revise mining operations.
180          (3) (a) A notice of intention to revise mining operations, if not designated as an
181     amendment of a notice of intention as set forth in Subsection (2), shall be processed and
182     considered for approval by the division in the same manner and within the same time period as
183     an original notice of intention.
184          (b) The operator shall be authorized and bound by the requirements of the existing
185     notice until the revision is acted upon and any revised surety requirements are established and
186     satisfied.
187          (4) (a) If a change in the mining operation occurs, a mining operation representative
188     shall submit an amendment to the notice of intention.
189          (b) Although approval of an amendment to the notice of intention by small mining
190     operations is not required, a revised surety shall be filed by the permittee [prior to] before
191     implementing the amended notice of intention unless exempt under Subsection 40-8-7(4).
192          Section 5. Section 40-8-19 is amended to read:
193          40-8-19. Transfer of mining operation under approved notice of intention.
194          (1) Whenever an operator succeeds to the interest of another operator who holds an
195     approved notice of intention or revision covering a mining operation, by sale, assignment,
196     lease, or other means, the division may release the first operator from [his] the first operator's
197     responsibilities under [his] the first operator's approved notice of intention, including surety,
198     provided the successor assumes all of the duties of the former operator, to the satisfaction of
199     the division, under [this] the approved notice of intention, including [its] the successor's then
200     approved reclamation plan and the posting of surety unless exempt under Subsection 40-8-7(4).
201          (2) Upon the satisfactory assumption of [such responsibilities] the duties described in
202     Subsection (1) by the successor operator, under conditions approved by the division, the
203     approved notice of intention shall be transferred to the successor operator.