Banning Municipal Code Ch. 3.18 Mining Tax and Mining Impact Fund

A. Mining is important statewide industry and regulated by state law under the 1976 Surface Mining and Reclamation Act, Public Resources Code §§ 2710 et seq. ("SMARA"). State law encourages local regulation permitting local agencies to act as lead agencies. Mining areas are an important state-wide resource with benefits enjoyed regionally and statewide, as provided in SMARA.

B. Mining is a significant use in the city with at least one hundred eighty-six acres in mined areas that have been dedicated to the extraction and processing of rock materials since 1925. Mining is a unique use within the community in terms of the long-term nature of the use and the extent and significance of its impact on surrounding properties.

C. Mining impacts include, but are not limited to, deterioration of streets and other public infrastructure facilities; degradation of air quality; public health and safety hazards; increased noise; slope stability and slope erosion problems; security and safety concerns; visual blight; water quality impacts; impacts on the San Gorgonio River; problems with sand and particulate matter; and loss of developable land for other uses. The negative impacts of mining are significant, felt on properties beyond the operational boundaries of the pit, and are experienced locally.

D. The purpose of this chapter is to establish a comprehensive taxing scheme for mining operations, both to support the city's general governmental operations and to raise revenue to study, analyze, monitor, regulate, administer, correct, remediate and mitigate mining impacts and to facilitate reclamation of mining pits.

E. Ultimately, it is the city's goal that mining operations are so conducted as to be a good neighbor to persons residing or working in the city and that at such time as a mining use is discontinued, the property be restored to a usable condition which is readily adaptable to alternate land uses and will create no danger to public health or safety. It is the purpose of this chapter to facilitate these goals and ensure the following:

1. Adverse environmental effects are prevented or minimized and that mined lands are reclaimed to a usable condition which is readily adaptable for alternative land uses;

2. The production and conservation of minerals are encouraged, while giving consideration to values relating to recreation, watershed, wildlife, range and forage, and aesthetic enjoyment;

3. Residual hazards to the public health and safety are eliminated.

(Res. No. 2014-58, Exh. A, 7-22-14)

The definitions set forth in this section shall govern the construction of this chapter.

"Excavation" means the physical removal of rock materials from the earth for use in commercial purposes, whether or not the rock materials are thereafter processed.

"Mining Impact Fund" means that fund that may be established by the city council to allay the impacts of mining as described in Section 3.18.040.

"Operator" means any person who is engaged in surface mining operations, or who contracts with others to conduct operations on his or her behalf, except a person who is engaged in surface mining operations as an employee with wages as his or her sole compensation.

"Person" means any individual, firm, association, corporation, organization or partnership, or any city, county, district, or the state or any department or agency thereof.

"Processing" means, with respect to rock materials, treating, crushing, recrushing, sorting, mixing, remixing or sluicing of rock materials which originated or were excavated either inside or outside of the corporate boundaries of the city.

"Rock materials" means rock, sand, gravel, dirt, rock products or similar materials.

(Res. No. 2014-58, Exh. A, 7-22-14)

A. Tax for Rock Material Excavation/Processing/Transportation. Notwithstanding any other provisions of this code relating to taxes and special taxes, there is imposed upon each person or entity engaged in the business of excavating, processing and transporting rock materials from any real property located within the city, for the purpose of commercial use thereof other than on the property where so excavated, a tax of eighty cents per ton of rock materials so excavated, processed and transported. The excavation, processing, transportation components of these operations are not taxed separately and the tax applies singly to the whole operation, and even if the processing itself occurs offsite. For purposes of calculating the tax, tonnage is measured at the transport weigh station and applied to the weight of rock materials exiting a mining operation for purposes of sale.

B. Tax for Rock Material Processing. Notwithstanding any other provisions of this code relating to taxes or special taxes, there is imposed upon each person or entity engaged in the business of importing and processing rock materials to be used as fill for a mining pit at any location within the city a tax of one-third of the tax for excavation per ton of rock materials so imported, provided that such tax is subject to modification through a development agreement per section 3.18.050. The reduced rate is established to encourage reclamation activities.

C. General Tax. The purposes of the taxes in this section are to raise revenue and are not regulatory. The revenue shall be placed in the city's general fund to finance the general operations of the city. Such operations may include, but are not limited to: paying for basic or enhanced law enforcement or public safety services, park, recreational, and senior services, neighborhood preservation, community services, infrastructure improvement and maintenance, and other such general services. Additionally, the revenue could be set aside with the purpose of mitigating mining impacts in accordance with section 3.18.040.

D. Cost of Living Adjustment. The taxes imposed in subsections A and B above shall be paid quarterly on the twentieth day in the months of July, October, January and April of each year, and shall be adjusted for Fiscal Year 2018-2019 based upon the percentage change in the Los Angeles-Long Beach-Anaheim Consumer Price Index (C.P.I.) and based upon the Riverside-San Bernardino-Ontario C.P.I. for Fiscal Year 2019-2020 and thereafter, with the twelve month period being measured from March of the current year compared with March of the prior year. The C.P.I. adjustment shall take effect and be imposed on July 1 of each year.

E. Effective July 1, 2016, the eighty-cent per-ton tax rate in subsection A of this section is hereby suspended and reduced to twenty-five cents per ton of rock materials excavated, processed and transported.

The suspension of the eighty-cent per-ton tax rate in subsection A, and the reduced tax rate of twenty-five cents per ton of rock materials excavated, processed and transported established herein, shall remain in full force and effect unless and until the city council adopts an ordinance lifting the suspension or modifying the tax rate, which adoption shall be consistent with the findings and purpose of Ordinance No. 1502.

(Res. No. 2014-58, Exh. A, 7-22-14; Ord. No. 1502, § 2, 11-7-16; Ord. No. 1545, § 2, 5-28-19)

The city reserves the right to establish by resolution or ordinance adopted by the city council a special fund dedicated to the purpose of mitigating the actual impacts of mining operations in the city. This mining impact fund may be funded by revenues generated by that general tax set forth in section 3.18.030. The mining impact fund may be administered by the director over city finance as a special fund of the city.

A. Mining impact funds may be expended upon the city's remediation of actual impacts upon the environment directly or indirectly caused by mining operations, including without limitation:

1. Repair, modification, resurfacing, or reconstruction of deteriorated streets and related public infrastructure facilities;

2. Remediation of toxic or contaminated property resulting from mining and processing activities;

3. Abatement of degraded air quality;

4. Abatement of public health and safety hazards, including health and safety hazards caused by access routes, traffic volumes, and usage conflicts;

5. Abatement of increased noise;

6. Remediation of slope instability and slope erosion problems, including potentially unsafe damage to levees, flood infrastructure and protective berms along the San Gorgonio River;

7. Remediation of problems with sand and particulate matter and sand, gravel and particulate matter on public rights-of-way and properties;

8. Addressing security and safety concerns;

9. Abatement of visual blight;

10. Remediation of water quality impacts;

11. Addressing loss of developable land for other uses;

12. Providing loans or grants to owners of property impacted by mining operations for purposes of constructing improvements to alleviate mining impacts; and

13. Any other impacts resulting from mining and processing which affect public health, safety and welfare or public property.

B. The mining impact funds may also be expended for purposes reasonably related to studying, quantifying, analyzing, monitoring, administering, enforcing, correcting or mitigating negative impacts in the city from mining and processing activities, whether or not such impacts are specifically listed herein. This includes the costs of professional services related thereto such as engineering, auditing, monitoring, financial services, planning, architectural and other consulting services, city administrative expenses, and legal expenses. Legal services may include defending any legal challenge to the validity of this chapter or any measure or action taken pursuant hereto, the cost of analyzing and preparing any implementation measure or strategy and the cost of any legal action related to the enforcement of any mining-related program.

C. Any expenditure shall be made in accordance with applicable law, whether set forth in ordinance, rule, or regulation of the city or other governmental agency of appropriate jurisdiction, or state or federal law. All such expenditures shall have a public purpose and be authorized by valid and applicable law.

(Res. No. 2014-58, Exh. A, 7-22-14)

Nothing in this chapter shall be construed as preventing the city from entering into a development agreement with any mining operator pursuant to Government Code sections 65864 et seq. By the terms of such development agreement, the city and a person or entity having legal or equitable interest in real property dedicated to the excavation and processing of rock material may establish certain development and operational rights for the property, including limitations upon such development and operational rights and requirements for specific mitigation measures to be undertaken by the mine operator. The mining tax rate imposed upon the excavation and processing of rock material established in section 3.18.030 may be modified by the terms of such development agreement.

(Res. No. 2014-58, Exh. A, 7-22-14)

A. All mine operators shall maintain detailed records relating to rock material tonnage, sales revenues, and gross income from rock material sales attributable to mining operations within the city for a period at least three years. The operator of a rock material extraction or processing business shall keep and maintain accurate records on all vehicles entering or exiting the facility engaged in activity that could result in taxation under section 3.18.030. The records kept by the operator shall contain the following information:

(i) The size, empty weight and load capacity of each vehicle entering or exiting his facility that is engaged in activity that could result in taxation under section 3.18.030, and

(ii) The loaded weight of each vehicle carrying rock material to or from the facility, and

(iii) For each day, the number of vehicles engaged in carrying rock material to or from the facility.

Accurate scales shall be loaded on or immediately adjacent to the facility and shall be kept and maintained in good condition by the owner or operator of the rock material extraction and processing business and shall be routinely and regularly tested in order to ensure its accurate calibration. It shall be the responsibility of the operator of the rock material extraction or processing business to operate the scales so that accurate weights are made and recorded.

B. No owner or operator of a rock material extraction or processing business shall permit any vehicle carrying any material for which a tax could be imposed under section 3.18.130 to enter or leave the facility without a weight ticket. A receipt of each ticket shall be kept and maintained by the operator of the business pursuant to subsection (A) above. Each weight ticket shall contain the following information:

(i) The size, empty weight and load capacity of the vehicle; and

(ii) The loaded weight of the vehicle carrying rock, sand or gravel to or from the facility; and

(iii) The cargo weight.

C. The city shall have the right at any time during regular business hours to inspect such records upon seventy-two hours' notice for purposes of allowing the city, or its duly authorized representative, to conduct a financial review or audit to verify the accuracy of taxes paid pursuant to section 3.18.030. Should a city audit find that the mine operator has underpaid taxes paid pursuant to section 3.18.030 by a shortfall of or exceeding one percent of the taxes actually due in any one-year period, the operator shall bear all costs of the city's audit.

D. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the city or an officer thereof to prevent or enjoin the collection of taxes, fees or fines sought to be collected pursuant to any provision or resolution ordinance of the city for the payment of all taxes, fees or fines. Payment of all taxes, fees or fines, interest and penalties shall be required as a condition precedent to seeking judicial review of the validity or application of any such tax, fees or fines, and such payment shall continue pending completion or final judgment in said judicial action.

(Res. No. 2014-58, Exh. A, 7-22-14)

Notwithstanding this ordinance's adoption by the people [Nov. 4, 2014], the city council shall be free to amend any provision hereof through the regular process of adoption of ordinances under state law, provided that the amendment is consistent with the intent hereof, further the purposes of this chapter, and except that the tax rate as set forth in section 3.18.030 may only be increased by the people.

(Res. No. 2014-58, Exh. A, 7-22-14)