 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
financial assurance; reclamation; escrow; trusts
Purpose
Adds cash deposits with a third-party escrow or trust account to the list of statutorily prescribed allowable financial assurance mechanisms for owners and operators of exploration operations, mining units and aggregate mining units who create surface disturbances.
Background
Owners and operators of exploration operations, mining units and aggregate mining units who create surface disturbances must provide financial assurance mechanisms to the State Mine Inspector. Allowable financial assurance mechanisms include any, or a combination of, the following: 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 the State Treasurer; 8) evidence of ability to meet a corporate financial test or corporate guarantees; 9) annuities; and 10) additional financial assurance mechanisms that are acceptable to the State Mine Inspector (A.R.S. §§ 27-991 and 27-1291).
An owner or operator may apply to the State Mine Inspector to release all
or part of the statutorily outlined financial assurance. Within 60 days after
receiving an application for the release of financial assurance, the State Mine
Inspector must release all or part of the financial assurance except for any
amount that is necessary to perform the reclamation measures identified in the
reclamation plan. After the reclamation measures have been performed, the
remaining financial assurance must be released, except that 10 percent must be
retained for the cost of care, monitoring and one reseeding, if necessary, for
areas that have been revegetated (A.R.S.
§§ 27-996
and 27-1296).
Reclamation means measures that are taken on surface disturbances at exploration operations and mining units to achieve stability and safety consistent with post-mining land use objectives specified in the reclamation plan (A.R.S. §§ 27-901 and 27-1201).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Adds cash deposits with a third-party escrow or trust account to the list of statutorily prescribed allowable financial assurance mechanisms for owners and operators of exploration operations, mining units and aggregate mining units who create surface disturbances.
2.
Deems that all interest and earnings accrued through the prescribed cash
deposit with a
third-party escrow or trust account, minus any applicable administrative fees
and costs imposed by the third-party escrow or trust, are the property of the
owner or operator of the exploration operations and mining units and may be
applied toward the final reclamation costs.
3. Requires the State Mine Inspector, on partial release or substitution of monies deposited in a third-party escrow or trust account, to release the proportional share of any interest earned.
4. Requires the State Mine Inspector, if the financial assurance is a third-party escrow or trust account, to release the proportional share of any interest earned.
5. Makes technical and conforming changes.
6. Becomes effective on the general effective date.
House Action
NREW 2/10/26 DP 8-1-1-0
3rd Read 2/23/26 46-11-3
Prepared by Senate Research
March 13, 2026
SB/ci