House Bill 141 — Mined land reclamation

House Bill 141 — Mined land reclamation

by
Phil Haunschild
February 22, 2019

Bill description: HB 141 would make it easier for mining operations to establish reclamation plans and would require underground mines to establish such plans.

Rating: +1

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

Under current law, a mining company must provide a bond to the state to ensure that when a company concludes a mining operation, there will be money to pay for reclamation efforts and mitigate the environmental impacts of the mine. Without a financial assurance that the land will be reclaimed, mining facilities could be left unremediated indefinitely, with open pit mines, slag piles, or tailings ponds.

While maintaining the requirement for financial assurance, HB 141 would give companies more flexibility in providing it. Rather than only using bonds, a company could use a surety bond, a corporate guarantee, a letter of credit, a certificate of deposit, or a trust fund.

By allowing companies more options to show proof that they can pay for reclamation efforts, HB 141 would make it easier for them to operate. For example, if a company has a letter of credit from an investor, it could start operations without having to raise the capital required to show financial assurance. The creditor may offer the credit based upon the future profits of the minerals mined by the company.

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Under current law, the state Board of Land Commissioners cannot require bonds in an amount higher than $15,000 per acre unless it goes through a public process to increase that amount on a case-by-case basis. A similar provision applies to cyanidation facilities. The board cannot require a bond in an amount of more than $5 million per facility.

HB 141 would eliminate this cap for most mines. The $15,000 and $5 million caps would only apply to mines that affect less than five acres. Larger mines would simply be required to provide financial assurance in an amount “based on the estimated reasonable costs of completing reclamation.”

(-1)

Currently, companies are required to provide their bonds in an amount ten percent higher than the estimated costs of reclamation. HB 141 would only require companies to cover the estimated costs of reclamation, eliminating the requirement for the additional ten percent.

(+1)

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

Currently, Idaho’s mine reclamation law only applies to surface mines. HB 141 would extend it to include all underground mines as well, such as shaft or tunnel mines. Underground mines would be responsible for making the same reclamation efforts for their impact on the surface as surface mines do. Underground mines would not be responsible to reclaim facilities underground..

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Under current law, mining companies must report to the state board when they have completed all of their reclamation requirements, at which point the board reviews the land and determines whether the requirements have been met. If the board determines the reclamation process is completed, it reduces the bonds required based on the total amount completed.

HB 141 would give companies the ability to report when they have completed just a portion of their reclamation requirements. If the board determines that the company has completed a portion of their requirements, it would reduce the financial assurance required by the amount completed.

This change would allow companies to receive portions of their financial assurance back as they make progress, rather than having to wait until the very end to obtain their complete bond back.

(+1)

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