HomeMy WebLinkAbout2013-05-14 - AGENDA REPORTS - CEMEX SOLEDAD CYN SETTLEMENT (2)Agenda Item: 8
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by:
DATE: May 14, 2013
SUBJECT: FEDERAL LEGISLATION: S. 771
DEPARTMENT: City Manager's Office
RECOMMENDED ACTION
Michael P. Murphy
City Council adopt "support" position for S. 771 and transmit position statements to Senator
Barbara Boxer, Senator Dianne Feinstein, Representative Howard P. "Buck" McKeon, Members
of the Senate Committee on Energy and Natural Resources, Members of Congress as appropriate,
the Director of the United States Bureau of Land Management, and the Secretary of the Interior.
BACKGROUND
On April 18, 2013, United States Senator Barbara Boxer (D -CA) introduced S. 771, the Soledad
Canyon Settlement Act. This bill is the latest legislative effort to resolve the now 14 -year old
dispute between the City of Santa Clarita and CEMEX regarding proposed sand and gravel
mining in Soledad Canyon. An important addition to this session's legislative effort is Senator
Dianne Feinstein's co-sponsorship of S. 771.
The United States Bureau of Land Management (BLM) has issued two, ten-year consecutive
contracts to CEMEX, USA for the purpose of mining 56,000,000 tons net of sand and gravel in
the Soledad Canyon area, immediately east of the City of Santa Clarita. The proposed mining
site involves surface estate owned by the City of Santa Clarita, with subsurface mineral rights
owned by the Bureau of Land Management.
In 2007, the City of Santa Clarita and CEMEX entered into an agreement, with the specific intent
of both entities focusing their efforts on seeking a mutually agreeable solution to the dispute.
Over the past six years, the City and CEMEX have worked cooperatively with each other in
developing legislation to resolve the dispute. While earlier legislative bills have not been
successful in getting through the federal legislative process, information learned from each of
A �pG����C�D
those attempts is being incorporated into the new effort.
New information that influences the overall discussion of whether Soledad Canyon is an
appropriate place for siting a large scale sand and gravel mine includes important national
environmental resource studies. The Bureau of Land Management in its South Coasl Resource
Draft Management Plan, currently in process, has identified the Upper Santa Clara River area as
"An Area of Critical Environmental Concern." The National Park Service, as part of the ongoing
Rim of the Valley Corridor Special Resource Study, has identified the Upper Santa Clara River
area as containing nationally significant natural resources. 'these study efforts in the proposed
mine area are in addition to the 2008 East Santa Clarna Land Conservation Concept Plan and
Implementation Strategy, which identified a zone for connecting the northern and southern
sections of the Angeles National Forest to increase regional wildlife movement and habitat
preservation.
Over the past few months, Senator Boxer and her staff have been working with the City of Santa
Clarita, CEMEX, the Bureau of Land Management, and congressional staff in an effort to craft
new legislation, which Senator Boxer believes can be enacted into law. S. 771 contains the three
basic goals that have been identified by the the City and CEMEX as the central elements to any
successful legislative solution. The three key dements are I) Cancellation of the two valid
mining contracts between CEMEX and the Bureau of Land Management_ 2) Prohibitions on the
Secretary of the Interior from being able to contract, lease or otherwise convey the ability lot-
anyone
oranyone in the future to mine the site that is the subject of the two mineral contracts; and 3) Fairly
compensate CEMEX for the value of the two valid mining contracts.
The bill requires that upon enactment, the Secretary of the Interior shall immediately suspend the
two mineral contracts between BLM and CEMEX. S. 771 then requires that the Secretary of the
Interior conduct two concurrent appraisals. The first appraisal is for the Secretary to determine
the fair market value of the two CEMEX contracts with BLM and identify the amount of
royalties due to the federal government under the first 10 years of the contracts. The second
appraisal is to determine the fair market value of approximately 10,200 acres of BLM owned
lands, located in San Bernardino County, that have been identified for disposal under the 2006
Bureau of Land Management's West Mojave Land Management Plan. The lands identified in
S. 771 are the same parcels identified in earlier versions ofthe bills authored by Senator Boxer
and Representative Howard P. "Buck" McKeon.
The proceeds from the sale of lands in San Bernardino County would be used to compensate
CEMEX for the fair market value of the two contracts, as determined by the Secretary of the
Interior. In the event that the fair market value of the contracts exceeds the appraised value of the
disposal lands, the Secretary will meet with the City and CEMEX to negotiate an agreement
under which the amount of the difference shall be met.
The Secretary of the Interior is directed to cancel the two mining contracts and withdraw the area
that was the subject of the contracts from mineral entry not later than two years after the date of
enactment of the legislation, concurrent with CEMEX being compensated and all parties
fulfilling their required obligations.
IS
Senator Boxer is currently working with the Chairman of the Senate Energy and Natural
.Resources Committee to secure a hearing date at the earliest opportunity. Although CEMEX has
expressed some reservations about the bill language, it is anticipated that they will continue to be
a full partner in the curent legislative eflort. It is further expected that as the legislative process
evolves and discussions with CEMEX continue, the bill will be amended to address issues and
enhance its chances of enactment into law.
ALTERNATIVE ACTIONS
1. Take no position on S. 771
2. Oppose S. 771
3. Other action as determined by the City Council
FISCAL IMPACT
Adoption of the recommended action requires no additional resources beyond those already
approved within the City's adopted 2012/13 budget.
ATTACHMENTS
S.771 (Boxer), as introduced
13
iuFORM��iGUPO�
11:3n �;
I�)
ST N(IS. 771
5,.:,IOttN
To provide to the Scerutall- of the Interior a nwchmiism to cancel cont'racis
I'm- the Sale of materials CA -20139 and CA -22901; and for ot.hcr purposes.
IN TIIE SENATE OF THE UNITED STATES
Arita, 14, 2013
\1rS. Itosrx (I'or herS(!lf and \ll.s. PFtnn'rt;rn) introduced the folloWinr bill:
which was read. tacice and rr.fcrrrd to the Conuoillec on h;magn and Nat-
ural Rcsoureos
A BILL
To provide to the Secretary of the Interior a meelumism
to enncul contracts Por the side of m,tteriols CA -201:1,9
and C_A-229011 and Por other purposes.
1 Be it enacted by the Senade awd, House qf' Repre.senta-
2 Gives of the United States of'Amzerica dvi. Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the "Soledod Canyon Settle -
5 meat Act".
6 SEC. 2. DEFINITIONS.
7 111 this tict:
()
1 (1) CITY OF SANTA term "Citi-
2 of Santa. Clarita." Incans the City of Santa Clarita,
3 California.
4 (2) CITY OF \ IC'141RV'l1;LL.—'Phe term "City of
5 Pictorville" means the City of Pictorville, California.
6 (3) CoN'I'hAC9'S.—The twin "contracts" means
7 the 13111.0,1❑ of.` Land 1\lanagemcnt mineral contracts
8 nuinhered CA -201.39 and CA -22901.
9 (4) CONTRACT Iioni)mt—Thc term "contract
10 holder" ❑leans the private party to the contracts,
11 and any successors that hold legal interests in the
12 contracts.
13 (5) WAIT or SAN liEHNARDIlNo.—The term
14 "County of San Bernardino" means the County of
15 San lQuirdim , California.
16 (6) DW—The term "Map" means the map on -
17 titled 'Nutoryille disposal area, California" and
18 dated Nim -ch 2011.
19 (7) SPCRf:'mY.—The term "Secretary" Ingalls
20 the Secretary of the Lrterior.
21 (8) VTICTORNgT,LE ursrosni, AREA.—Thc term
22 1IVietor111e disposal area" nlcans the 10,224.32
23 acres of land identified fm• disposal in the AVest Alo-
24 ;jaye Land &lanagenicat: Plan (2006) of the Bureau
25 of Laial Dlanagununt and depieUA on the AIM).
•S 771 IS
S
3
I SEC. 3. APPRAISAL; COMPENSATION TO CONTRACT HOLD -
2 ER.
3 (a) CONTILMA' SIJSI'EN810N.—The Secretary shall
4 s ispend the contraets until the completion of the processes
5 deswihed in subsections (h) and (c), etfcetive on the date
6 of enactment of this Act.
7 (h) APPRAISALS. -
8 (i) CONTRA1:Pr nrrirnt:u,.-
9 (A) 1N (;1;:NE .Vi,.—Not, later than 90 ilii
10 after the date of enactment of this Act, tho Scu-
ll retary shall determine by mineral appraisal,
12 using the discounted cash flow method of ap-
13 praisal (in accordance with the appraisal gnide-
14
lines for appraisals of large
quantities of min -
15
oral materials contained in
section ITE) of
16
13LM AUnwal Material Appraisal
handbook I -I-
17
3630)--
18
(i) the fair market
value of the con -
19
tracts; and
20
(5) the amount of
royalties the Ped -
21
oral Government, would
receive under the
22
contracts over the Ill -year
period hegin-
23
ning on the date of enactment; of this Aet.
24
(3) CONSIDERATIONS. -Iii
making the de -
25
termination ander subparagraph
(2Q, the See -
26
retary shall assume that—
.S M IS
F
the contract holder has obtained
2
all the permits and entitlements necessary
3
to mine, produce, and sell sand and gravel
4
tinder the contract; and
5
(ii) alining operations under the con -
6
tract have commenced at the time of the
7
deternli lla.lion, wit;11 Illaxil'lllllll annual pro -
8
duction voltinles that -
9
(I) are based on the projected
10
supply and demand outlook at the
11
time of determination; and
12
(11) reflectdepletion of the re -
13
sums that are subject to lie contrncl,
14
within the effective 1 e1•iods of the con -
15
tract.
16
(C) DO�NTATroN.—The Secretary may ac -
17
sept a donation of non-l+ederal fiends to cover
18
the costs of the appraisal tinder subparagraph
19
20
(2) LAND APPRAISAL. -
21
(A) IN Gt:NIMAL.—Not later than 90 clays
22
after the date of ennetment of this Act, the See -
23
retary shall determine by appraisal standards
24
tinder existing MY and regulations, the fair
•S 771 IS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
5
market vahie of the Fictomlle disposal areaon
a net; present; valrlc basis.
(13) DONATION.—The Secretnry roay ac-
(.-ept a donation of non - F ederal 1,111)(18 to cover
the cost~ of.' the, appraisal tinder subparahrapin
(A).
(c) CO-AIPENSATION.—
(1) IN GENERA:.—Subject to para-raph (2)
not. later than 30 days after completion of the 1ip-
prilisals under subsection (b), the Secretal.y shall
offer the contract holder compensation for the can-
cellation of the contracts.
(2) CONDITIONS ON O1rnR.—An offer made by
the Secretary under paragraph (.1.) shall be subject
to the following conditions:
(A) 'Phe; cimcclInt,ion of the contnwl,� and
the provision of compensation shall he contill-
gent on the avail:lbility of funds from the sale
of the Pictm•ville disposal area under section 4,
and any additional compensation provided
under sabparagraph (D), as determined nec-
essary by the Secretary.
(13) The amount of compensation offerer)
by the Seeretary under this subsection shall be
equal to or less than the fair imirket value of
•S 771 IS
6
the contracts, ns determined under subsection
2
(b)0 )(A)(i).
3
(C) The amount; o1.` cornpeasotion offered
4
by the Secretary under this subsection shall be
5
equal to or less than the projected revenues
6
(Yenerated h%* the wile of the Pictol.vi11e disposal
7
area ander section 4, less the projected lost ro,'-
8
aloes to tllc Pcderal Uovernnlenl; over the 10-
9
fear period heal lllrinpo17 tile date of ellactlnent
10
of this Act, as determined slider subsection
11
(b)(I)(A)(ii).
12
(D) If tyre amount of projected revenues
13
described in suhparagraph (C) is less than the
14
fair market value 1'1etermined under snlrscction
15
(WO)(A)(i), t;he Secrctan, shall, not later than
16
60 days after the date on which the Director of
17
the Burcau of Land Management determines
18
the priljected revenues unl'ler sal paragraph (C),
19
ne'sutiilta: all ii,'Ivenlent with the cool.raet holder
20
and the Cit.v o1` Santa Clarit;l to provide to the
21
Secretory amounts equal to the difference, in
22
the form of -
23
(i) compensation to be received by the
24
contract holder; and
•S 771 1S
9
I (ii) compensation in a loan acceptable
2 to the Secretary to be provided by the Cite
3 or Santa Clarita.
4 O ACCiaPT_ NGE ur OF rx.-
5 (A) IN (11011011M.—The contract holder
6 shall have 60 days from the later of the date on
7 which the Secretary makes tyre offer under
8 paragraph (1) or an agreement is negotiated
9 under paragraph (2)(D) to accept the offer or
10 ag;reena:nt.
11 (13) Ct,mm.—If the contract holder does
12 not accept the offer or aarcenrent Under snb-
13 paragraph (A), the Secretary shall cancel the
14 contracts under paragraph (4) and direct that;
15 the contract holder file a claim relating to the;
16 issue of compensation in the United States
17 Court of Federal Claims.
18 (4) CANCIOM ATTON.—if no agreement can be
19 reached within the timeframe speeihed in parag7•a.ph
20 2(D), the Secretary shall -
21 (A) caned the contracts;
22 (13) withdrow those areas that, were sulrjuct.
23 to the contracts from 15n-dwr mineral entry
24 under all mineral Waging and sales authorities
25 available to the Secretary; and
•S 771 IS
la
8
1 (C) direct, that the contract holder file a
2 chdni in the United SbAcs Court of Federal
3 Claims for relief.
4 SEC. 4. SALE OF LAND NEAR VICTORVILLE, CALIFORNIA.
5 (a) IN sections 202 and
6 203 of the Federal Land Police and Awfanagement Act of
7 1976 (43 IJ.S.C. 1712, .171:3) and suhjeet to subscctiams
8 (h) through (f), the Seeretary shall offer for sale by com-
9 petitive bidding and in a manner designed to obtain the
10 highest, price possible, all right, title, and interest of the
11 United States in and to the l ictorville disposal area.
12 (b) CoAIPI,E,rtoN DATF,.—The Secretnry shall coin-
13
onn13 plete the sale cinder subsection (a) by not later than 2
14 years after the date or enactment. of this _Act.
15 (c) AV All AMIATY or, AIM—The Secretaiy shall
16 keep the A,lap on file and available for public inspection
17 in -
18 (1) the office of the Director of the Bureau of
19 Land Management; and
20 (2) the district office of the Bureau of IAIMI
21 Alanagement; located in Barstoiy California.
22 (d) Riowr or, LOCAL IaAND Usi, Awmici Iry To
23 PURCI-LASE CEHTAIN LAND. -
24 (1) IN GMNERM,.—Before a sale of laud under
25 subsection (a), the Secretary shall provide to the ap-
•S w0 IS
9
1 plicahle local land use authority an exclusive pre -
2 emptive right, as determined under State law, to
3 purchase any right, title, or interest of the United
4 States in and to any portion of the parcels of land
5 identified as "Area. A" and "thee. D" on the Allip
6 that is located within the jurisdiction of the local
7 land use authoritT, .
8 (2) TTAum;. A preemptive riglit under para -
9 graph (.l) shall be in effect for it period of 30 days
to before the land is sold under subsection (a).
11 (3) Am,rfoltTr)-.—During t;he period descrihed
12 in paragraph (2), the local land use authority may
13 purchase some or all of the right, title, and interest
14 of the United States, as provided in suhsection (a.),
15 in and to the land to he offered for sale at fair mar -
16 ket value, as determined by all appraisal conducted
17 by the Secretary.
18 (4) EKERCrsTNG RIGHT.—If the local land use
19 authority exercises the preemptive right under para -
20 graph (1.), the Secretary shall convey the land to the
21 local land list" authority immediately on payment hy
22 the local land use authority of the whim pumhasc
23 price of the applicable pareel of land.
24 (5) 1+AMUTA, 'ro by the local
25 land use authority to purchase and pay for the right,
s M Is
1
1 title, and interest of the United States in and to the
2 land cleseribed in paragraph (1) within the tune pe -
3 riod clescribed in paragraph (2) and to comply N6th
4 any other terms and conditions as the Secretary ma.y
5 require shall terminate the preemptive right of the
6 local land use authority with respect to the right,
7 title, and interest offered for sale.
8 (e) WITHDRAWAL AND RFSFi vzvrTON.-
9 (1) W1TTTDRAAVAT,.-8u1?ject to valid eXisting
10 rights, the land described in suhsection (a) is with -
1 I drawn from -
12 (A) entiT, appimp orlon, or disposal under
13 the public land hl"s;
14 (11) location, ent,i14 and patent under the
15 mining laws; and
16 (C) operation of the mineral leasing, min -
17 oral materials, and geothermal leasing laws.
18 (2) RESFRVATtoN.—In any sale or other dis-
19 poral of land under this section, there shall be re -
20 served by t;hc United States the right, of the United
21 States to prospect for, mine, and remove minerals
22 from the Conveyed hind.
23 (f) CONSULTATION.—In addition to au,p consultation
24 ottler«rzse required I1>> law, before initiating efforts to dis-
25 pose of land under this seetion, the Secr&uji shall consult.
.5 771 IS
13
1]
1 with the Cite of Vietorville, the County of San Bernardino,
2 and surface owners in the jurisdiction in which the land
3 is located regarding the potential impact of the disposal
4 and other appropriate aspects of the disposiil.
5 (g) AccOUNT.—The gross promeds of a Salo o[' land
6 under subsection (a) Shall be deposited in an accoaut ac -
7 ceptable to the Secretin, and available ono, for the pur-
8 poses of carrying out this Act.
9 SEC. 5. CANCELLATION OF CONTRACTS.
10 (a) IN GENrR.\L.—As soon as practicable after the
11 funds received from the vale under section 4 are available
12 and not later Man 2 years after the date of enactment
13 of this Act, the Secretar;}= shall cancel the contracts and
14 withdraw those areas that were sal?ject to the contracts
15 huni hirther mineral cnta;v mu'ler all mineral leasing and
16 sales authorities available to the Secretary.
17 (h) C0r�1PENS.,vTlON; RETENTuiN 1,F I r;Nuti.—On
18 cancellation of the contracts ander silbseetion (a), Hie Sec;
19 retary shall -
20 (1) provide the coinpensation agreed to under
21 seetion 3 to the contract holder by disbursement of
22 unmunts from the account; and
•S 771 IS
12
(2) retain sufficient fiends to cover the projected
2 lost royalties determined under section
3 3(b)(I)(A)(ii).
•S 771 IS
N