During the 2020 legislative session, there were three bills passed affecting the Division of Oil, Gas and Mining.
Senate Bill 148 requires review of rules made related to bonding requirements; modifies the process for imposing and collecting administrative penalties; creates the Oil and Gas Administrative Penalties Account; and makes technical and conforming changes.
In response to the Oil and Gas Program audit, the Board of Oil, Gas and Mining Chairman Ruland Gill helped to educate lawmakers about this bill which allows the Division to collect administrative penalties from non-compliant operators as if the penalty were a judgment issued by a court of law. Before this bill, any fines issued by the Board were required to be collected through district court, which was expensive and time consuming. SB 148 allows the Board to collect fines directly and deposit them into an account used to offset risks the bonds do not cover.
This bill also gives the Board authority to review bonding requirements to ensure there is adequate fiscal security to the state.
Two separate bills, Senate Bill 131 and House Bill 294 affect the Minerals Program. SB 131 changes the size of small mining operations from 10 to 20 acres in unincorporated areas and 5 to 10 acres in incorporated areas. This bill affects approximately 20 permits currently in our system. The requirements for small mines are less stringent than those for large mines so this may encourage smaller operators to open new pits under the new size definitions. This will allow for smaller operators to have more opportunity to enter the market.
HB 294 exempts basalt operations under 50 acres from the Division’s regulations. Approximately five currently permitted operations will no longer be under our jurisdiction, and the bill also allows for more operations to start up without requiring a permit. This legislation is intended to be very narrow and only apply to a certain type of geology found in Southern Utah, where it is beneficial to remove basalt in order to access sand and gravel.
The Division will create and amend rules where necessary to address the new legislation.