ARIZONA HOUSE OF REPRESENTATIVES

57th Legislature, 2nd Regular Session

Majority Research Staff

House: NREW DP 8-1-1-0

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note

HB 2278: financial assurance; reclamation; escrow; trusts

Sponsor: Representative Blackman, LD 7

Caucus & COW

Overview

Allows owners or operators of mining units, aggregate mining units and exploration operations to provide financial assurance, to the State Mine Inspector, in the form of a cash deposit with a third-party escrow or trust account.

History

Current law prohibits an owner or operator of a new mining unit, new aggregate mining unit or new exploration operation from creating a surface disturbance of more than five contiguous acres until a reclamation plan and financial assurance mechanism are approved by the State Mine Inspector (SMI)(A.R.S.§§ 27-921, 27-1221).

Currently, eligible financial assurance mechanisms include any combination of: 1) surety bond; 2) certificate of deposit; 3) trust fund with pay-in period; 4) letter of credit; 5) insurance policy; 6) certificate of self-insurance; 7) cash deposit with State Treasurer; 8) evidence of ability to meet a corporate financial test or certain corporate guarantees; 9) annuities; and 10) additional financial assurance mechanisms that are acceptable to the SMI (A.R.S. §§ 27-991, 27-1291).

Provisions

1.   Expands the allowable financial assurance mechanisms provided by owners or operators of exploration operations, mining units and aggregate mining units, to the SMI, to include cash deposit with a third-party escrow or trust account. (Sec. 1, 3)

2.   Designates all interest and earnings accrued through a cash deposit with a third-party escrow or trust account as the property of the owner or operator of exploration operations, mining units and aggregate mining units. (Sec. 1, 3)

3.   Allows said interest and accrued earnings to be applied to final reclamation costs of exploration operations, mining units and aggregate mining units. (Sec. 1, 3)

4.   Requires the SMI to release the proportional share of any interest earned, upon partial release or substitution of monies deposited in a third-party escrow or trust account. (Sec. 1-4)

5.   Makes technical and conforming changes. (Sec. 1-4)

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9.   Initials CW                      HB 2278

10.  2/13/2026  Page 0 Caucus & COW

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