No. 35186 (Amendment): Rule R647-3. Small Mining Operations

(Amendment)

DAR File No.: 35186
Filed: 08/29/2011 08:56:27 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the rule is to establish requirements for small mineral mining operations within Utah to protect the public. The rule change will amend three sections of the rule as a result of S.B. 282 and S.B. 15 being passed during the Legislature's 2011 General Session.

Summary of the rule or change:

Rule R647-3 establishes requirements for the permitting, reporting and reclamation of small mineral mines within Utah. The rule changes include the Board requirement to annually approve a reclamation rate per acre after a Division presentation, the modified definition of a small mining operation which impacts mine enlargements, and permit revisions if lands are annexed into an incorporated area of a county.

State statutory or constitutional authorization for this rule:

• Section 40-8-4
• Subsection 40-8-14(1)

Anticipated cost or savings to:

the state budget:

The Division will be required to present an average reclamation rate per acre to the Board for approval, but the Division conducted such presentations for the last two years. The Minerals Program will process mineral mine enlargements according to the new small mining definition. In summary, there is no material budget impact.

local governments:

No local government costs or savings are anticipated, since this rule affects mineral mining applicants and the Division.

small businesses:

Small businesses who operate a small mineral mine will utilize a new mine size definition if applying for enlargements. If the mine is located on 5 to 10 acres of unincorporated land, the small mine operator will not need to apply for a large mine operation, resulting in some savings since more information is required for a large mine permit.

persons other than small businesses, businesses, or local governmental entities:

Persons other than small businesses, businesses, or local government entities would not be impacted by this rule since it pertains to companies who conduct small mineral mining in Utah.

Compliance costs for affected persons:

No added compliance costs are expected from this rule change for mineral mine operators.

Comments by the department head on the fiscal impact the rule may have on businesses:

Businesses will not encounter a negative fiscal impact by this rule amendment. Small mineral mine operations who wish to expand to 10 acres on unincorporated land should have cost savings in comparison to the prior statute and rule.

Michael Styler, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Natural Resources
Oil, Gas and Mining; Non-CoalRoom 1210
1594 W NORTH TEMPLE
SALT LAKE CITY, UT 84116-3154

Direct questions regarding this rule to:

• Steve Schneider at the above address, by phone at 801-538-5328, by FAX at 801-359-3940, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/17/2011

Interested persons may attend a public hearing regarding this rule:

• 09/29/2011 09:00 AM, UBATC, 450 N 2000 W, Vernal, UT

This rule may become effective on:

10/26/2011

Authorized by:

John Baza, Director

RULE TEXT

R647. Natural Resources; Oil, Gas and Mining; Non-Coal.

R647-3. Small Mining Operations.

R647-3-111. Surety.

1. After receiving notification that the notice of intention is complete, but prior to commencement of operations, the operator must post a reclamation surety with the Division.

1.11. Failure to furnish and maintain reclamation surety may, after notice and opportunity for Board hearing, result in a withdrawal of the notice of intention as provided for in Section 40-8-16.

2. The Division will not require a separate surety where a reclamation surety in a form and amount acceptable to the Division is held by other governmental entities, provided that the cost estimate is accurate and the Division is named as co-beneficiary. Cooperative Agreements may be developed and entered into according to Section 40-8-22.

3. As part of the review of the notice of intention, the Division shall determine the required surety amount based on:

3.11. Site-specific calculations or estimates by the Division reflecting the cost the Division or a third party would incur to reclaim the site;

3.12. Site-specific calculations or estimates by the operator reflecting the cost the Division or a third party would incur to reclaim the site, if accurate and verifiable by the Division; or

3.13. The average dollars per acre costs for reclamation of similar operations, as determined by the Division, based upon approved surety amounts for current large mining operations.

3.14. In determining or verifying the amount of surety under [Section]Subsections 3.11 or 3.12, the Division shall use cost data from current sureties for large mining operations, adjusted as necessary to reflect the nature and scope of operations and reclamation under the notice of intention.

3.15. For the average dollars per acre in Subsection 3.13, the Board will annually approve the figure after a formal presentation from the Division and an opportunity for public comment.

4. The operator shall submit a completed Reclamation Contract (FORM MR-RC) with the required surety. The form and amount of the surety must be approved by the Division, except as provided in subpart 4.16. Acceptable forms may include:

4.11. A corporate surety bond from a surety company that is licensed to do business in Utah, that is listed in "A.M. Best's Key Rating Guide" at a rating of A- or better or a Financial Performance Rating (FPR) of 8 or better, according to the "A.M. Best's Guide". All surety companies also will be continuously listed in the current issue of the U.S. Department of the Treasury Circular 570. Operators who do not have a surety bond with a company that meets the standards of subsection 4.11 will have 120 days from the date of Division notification after enactment of the changes to subsection 4.11 to achieve compliance or face enforcement action. When the Division in the course of examining surety bonds, notifies an operator that a surety company guaranteeing its performance does not meet the standards of subsection 4.11, the operator has 120 days after notice from the Division by mail to correct the deficiency, or face enforcement action;

4.12. Federally-insured certificate of deposit payable to the State of Utah, Division of Oil, Gas and Mining;

4.13. Cash;

4.14. An irrevocable letter of credit issued by a bank organized to do business in the United States;

4.15. Escrow accounts; and

4.16. The Board may approve a written self-bonding agreement in the case of operators showing sufficient financial strength.

5. Surety shall be required until such time as the Division deems reclamation complete. The Division will promptly conduct an inspection when notified by the operator that reclamation is complete. The full release of surety shall be evidence that the operator has reclaimed as required by the Act.

5.11. A partial release of surety can be made by the Division if it determines that a substantial phase or segment of reclamation such as demolition, backfilling, regrading, or vegetation establishment has been successfully performed and the residual amount of retained surety is determined adequate to insure completion.

6. The amount of reclamation surety may be adjusted:

6.11. As required by a revision in the Notice of Intention under R647-3-115;

6.12. As a result of a periodic review by the Division conducted no more frequently than at 3 year intervals unless agreed to by the operator, which shall take into account inflation/deflation based upon an acceptable Costs Index; or

6.13. At the request of the operator.

7. Notwithstanding any other provision of these rules, for operations where the surety is in the form of a Board-approved agreement under Section 40-8-14(3), the Board shall retain the sole authority over the release, partial release, revision or adjustment of the surety amount, if any, which shall be in accordance with the agreement and the Act.

 

R647-3-114. Mine Enlargement.

Before enlarging a small mining operation beyond five [(5)] acres of surface disturbance in an incorporated area of a county or ten acres in an unincorporated area of a county, the operator must file a Notice of Intention to Commence Large Mining Operations (FORM MR-LMO) and receive Division approval.

 

R647-3-115. Revisions.

1. Small mining operators are required to submit a revision to the complete notice of intention when a significant change(s) in the small mining operation occurs. A revision can be made by submitting a revised FORM MR-SMO (or similar form) and indicating the portion(s) of the operation which is being revised.

2. Division approval of a revision of small mining operations is not required but the operational change may not be implemented until the Division determines that the revised NOI is complete.

3. In the event the Division or the operator determine at the time a revision is submitted that the amount of the current surety does not accurately reflect the potential cost to complete reclamation at any point in time during the revised small mining operations, the Division may undertake a recalculation of the surety amount as provided in R647-3-111.3. If the recalculated amount is greater than the amount of the existing surety, the revised operations may not be implemented until a revised surety is approved by the Division.

4. If the acreage within an approved small mining operation is later annexed into an incorporated area of a county, the permit may continue as a small mining operation. If the operator of such small mining operation subsequently proposes an increase of the disturbed acres, the current definitions for small or large mining operations would apply as appropriate.

 

KEY: minerals reclamation

Date of Enactment or Last Substantive Amendment: [May 25, 2011]2011

Notice of Continuation: June 2, 2008

Authorizing, and Implemented or Interpreted Law: 40-8-1 et seq.

 

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