When a California state agency runs a gravel pit or other surface mine, does it have to pay county SMARA fees like any other operator, or does state-on-state fee exemption apply?

Plain-English summary

Caltrans runs gravel pits in Mono County, mining aggregate for highway construction and maintenance. Mono County is the SMARA "lead agency" for those operations and inspects them annually like any other surface mine in the county. Mono County's counsel asked AG Kamala Harris a deceptively simple billing question: can the county send Caltrans a fee bill for its SMARA work?

The AG's answer split the difference. Caltrans had to pay for the annual inspection and the inspection report. Caltrans did not have to pay for the rest of the county's SMARA work, which includes reviewing permit applications, reclamation plans, and financial assurances.

The split came out of how Government Code section 6103 interacts with SMARA's specific fee statutes. Section 6103 is the general rule: when one California public agency performs an official service for another, the receiving agency does not pay a fee unless a statute "specifically provides otherwise." So the default for Caltrans paying Mono County is no charge.

SMARA's inspection-cost statute does specifically provide otherwise. Public Resources Code section 2774, subdivision (b), says the "operator" is solely responsible for the reasonable cost of the annual inspection. The Public Resources Code's definitions of "operator" and "person" expressly include cities, counties, and "the state or any department or agency thereof." Caltrans falls inside "operator," so the inspection-cost rule overrides the section 6103 exemption. Caltrans pays.

SMARA's general fee statute does not. Public Resources Code section 2207, subdivision (e), authorizes a lead agency to impose a fee on each "mining operation" (not each "operator") to cover the lead agency's reasonable implementation costs. The AG read the word swap as deliberate. The Legislature had used "operator" with definitional reach into state agencies in the inspection-cost statute; switching to "mining operation" in the general fee statute signaled the opposite intent. Cross-checking with section 2719 sealed it: section 2719 expressly carves out an exception to section 6103 for the state fee under section 2207(d). If the general fee statute already overrode section 6103, section 2719 would be surplusage. Courts don't read statutes to be surplusage. So section 6103's exemption stays in place for general SMARA fees, and Caltrans is exempt from those.

The practical upshot is a billing matrix: a lead agency may bill a state-agency operator for annual inspections and the resulting reports, but not for permit review, reclamation plan review, financial assurance review, or other SMARA implementation work.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What is SMARA and why does it have lead-agency fees?
A: SMARA is the Surface Mining and Reclamation Act, Pub. Res. Code § 2710 et seq. It is California's permit-and-reclamation regime for surface mines. SMARA places primary regulatory responsibility with "lead agencies," usually cities or counties, which permit mines, inspect them annually, and review reclamation plans and financial assurances. The fees authorize lead agencies to recover their reasonable implementation costs. Most lead agencies set fee schedules that vary by mine size and complexity.

Q: Why does Government Code section 6103 exempt one public agency from paying another?
A: Section 6103 reflects a long-standing California policy that public funds should not circulate from one government pocket to another in payment for official services unless the Legislature has specifically said otherwise. The justification is administrative efficiency: charging the state for services another part of the state already provides just moves money around without changing the total bill paid by taxpayers. Anaheim, 164 Cal.App.3d at 702. The statute has been on the books since 1943.

Q: Why did the Legislature treat inspections differently from other SMARA work?
A: The AG's legislative-history analysis suggests inspections are functionally different. They are a recurring per-mine event, the cost can be tied to the specific operation, and the inspector is sometimes a third-party licensed professional rather than a county employee. The Legislature wanted that cost to land on the operator, not on county taxpayers, regardless of whether the operator was a state agency. The general fee statute, by contrast, funds the lead agency's overall SMARA program work, which the Legislature was content to leave under the section 6103 default.

Q: At the time of this opinion, did this resolve every fee question between Caltrans and a county lead agency?
A: No. The opinion covered the inspection-vs.-general-fee split for SMARA. Other state fee structures (CEQA review fees, building permit fees, encroachment permit fees) have their own statutory frameworks, each with its own section 6103 analysis. The opinion's bigger lesson is methodological: when a state agency thinks it is exempt, look first at section 6103, then look at the specific fee statute for the "specifically provides otherwise" language.

Q: Could a lead agency stop inspecting a Caltrans pit if Caltrans refused to pay the inspection fee?
A: SMARA requires the lead agency to conduct annual inspections of every operation in its jurisdiction. Refusal to inspect was not the AG's recommended response to a non-paying operator. The lead agency's remedy would be to bill and, if necessary, sue to collect.

Background and statutory framework

The Surface Mining and Reclamation Act of 1975 (SMARA), Pub. Res. Code § 2710 et seq., is California's regulatory regime for surface mining. The State Mining and Geology Board sets statewide policy; the Department of Conservation administers the state's role; lead agencies (typically cities or counties) handle on-the-ground permitting, inspection, and reclamation oversight.

The fee architecture sits in two related statutes. Public Resources Code section 2207 was added in 1990 and provides two sets of fees: subsection (d) authorizes a state reporting fee tied to the Department of Conservation's costs, and subsection (e) authorizes a lead-agency fee tied to the lead agency's reasonable implementation costs. Public Resources Code section 2774, subsection (b), requires annual inspections and provides that "the operator shall be solely responsible for the reasonable cost of the inspection." The Public Resources Code defines "operator" (§ 2731) and "person" (§ 2004) broadly to include state and local government entities.

Government Code section 6103, enacted in 1943, is the public-agency fee exemption. It applies to "any fee" for "the performance of any official service" by another public agency, unless a statute "specifically provides otherwise." The Anaheim case held that an exception to section 6103 requires statutory language, not mere general fee authorization.

The opinion also rested heavily on Public Resources Code section 2719, enacted in 1992. Section 2719 expressly carves out the state fee in section 2207(d) from section 6103: "neither the state nor any county, city, district, or other political subdivision shall be exempt from any fee imposed upon a mining operation pursuant to subdivision (d) of Section 2207." That explicit carve-out for subsection (d) was the AG's strongest textual proof that subsection (e) lacked the same effect. The Legislature would not have needed to write section 2719 if section 2207's "mining operation" language already overrode section 6103.

The decision relied on the El Dorado case for the principle that the Legislature is presumed aware of existing laws (here, section 6103) when enacting later statutes (SMARA's fee provisions). El Dorado, 36 Cal.4th at 994.

Citations

• Gov. Code § 6103 (public-agency fee exemption for official services)
• Pub. Res. Code § 2004 (definition of "person" includes state and agencies)
• Pub. Res. Code § 2200.5 (definitions)
• Pub. Res. Code § 2207(d) (state reporting fee)
• Pub. Res. Code § 2207(e) (lead-agency fee on each mining operation)
• Pub. Res. Code § 2719 (express carve-out from § 6103 for § 2207(d) state fee)
• Pub. Res. Code § 2731 (definition of "operator")
• Pub. Res. Code § 2735 (definition of "surface mining operation")
• Pub. Res. Code § 2770, 2773.1 (permit and reclamation plan duties)
• Pub. Res. Code § 2774(b) (annual inspection, operator pays reasonable cost)
• Cal. Code Regs., tit. 14, § 3504.5 (regulation implementing § 2774(b) operator-cost provision)
• People ex rel. Dept. of Conservation v. El Dorado County, 36 Cal.4th 971 (2005) (SMARA regulatory framework)
• Anaheim City School Dist. v. Co. of Orange, 164 Cal.App.3d 697 (1985) (Gov. Code § 25823 exception to § 6103; later-specific-statute precedence)
• Dyna-Med, Inc. v. Fair Employment & Housing Com., 43 Cal.3d 1379 (1987) (statutory construction; avoid surplusage)
• City of Pasadena v. Fox, 16 Cal.App.2d 584 (1936)
• People v. Snook, 16 Cal.4th 1210 (1997) (plain-meaning rule)
• Metropolitan Water Dist. v. Superior Court, 32 Cal.4th 491 (2004) (different words presumed different purposes)
• Shoemaker v. Myers, 52 Cal.3d 1 (1990) (no surplusage construction)

Source

• Landing page: https://oag.ca.gov/opinions/yearly-index
• Original PDF: https://oag.ca.gov/system/files/opinions/pdfs/14-1206_0.pdf

Original opinion text

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
KAMALA D. HARRIS
Attorney General

OPINION
of
KAMALA D. HARRIS
Attorney General
SARA J. RUSSELL
Deputy Attorney General

No. 14-1206
December 30, 2016

THE HONORABLE STACEY SIMON, MONO COUNTY COUNSEL, has requested an opinion on the following question:

Must the California Department of Transportation pay fees to cover Mono County's costs for (1) inspecting, and preparing a report on, the Department's surface mining operations as required by the Surface Mining and Reclamation Act, and (2) performing other duties under the Act?

CONCLUSION

The California Department of Transportation (1) must pay fees to cover Mono County's costs for inspecting, and preparing a report on, the Department's surface mining operations as required by the Surface Mining and Reclamation Act, but (2) is exempt from paying fees for the other duties Mono County is required to perform under the Act.

ANALYSIS

The Surface Mining and Reclamation Act (SMARA) establishes state policy for regulating surface mining operations. SMARA requires every surface mining operation to undergo an annual inspection and to have a permit, a reclamation plan, and financial assurances to effectuate the reclamation plan. The primary responsibility for implementing these requirements lies with "lead agencies," which are usually cities or counties. To cover its reasonable costs incurred in implementing the Act, a lead agency "may impose a fee upon each mining operation."

Mono County is a lead agency under SMARA, and it charges fees to mining operators to recover its implementation costs. One such operator is the California Department of Transportation (Caltrans), which operates gravel pits from which aggregate is mined for highway construction and maintenance projects. The question presented for our analysis is whether Caltrans, as a public agency, is exempt from paying SMARA fees to Mono County.

Public Agency Exemption from Public Fees Generally

Government Code section 6103 exempts public agencies from paying fees for official services performed by another public agency unless a statute "specifically provides otherwise." We have previously determined that the term "official service" refers to the performance by a public agency of a duty imposed by law. Thus the duties required of a lead agency under SMARA constitute "official services," and section 6103 exempts Caltrans from paying fees to Mono County for those services unless some provision in SMARA's statutory scheme specifically provides otherwise.

In examining SMARA to determine whether it creates an exception to section 6103, we use settled principles of statutory construction. "[The] first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, [we] look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible." "If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs."

Fees for Inspecting and Reporting on a Public Agency's Mining Operation

With respect to fees charged by a lead agency to inspect and prepare a report on a public agency's mining operation, we find that the plain language of SMARA creates an exception to section 6103's general exemption, which means that Caltrans is obligated to pay fees to the county for performing these responsibilities.

Under Public Resources Code section 2774, subdivision (b), a lead agency must cause each surface mining operation in its jurisdiction to be inspected annually for the purpose of determining whether the operation is in compliance with SMARA; the lead agency must then report to the California Department of Conservation on the state of compliance. On the subject of cost, this statute provides that the "operator shall be solely responsible for the reasonable cost of the inspection." "Operator" is defined as "any person who is engaged in surface mining operations," and "person" is defined as "any individual . . . or any city, county, district, or the state or any department or agency thereof." In turn, Public Resources Code section 2207, subdivision (e), authorizes a lead agency to impose a fee on each mining operation to cover its reasonable costs in implementing SMARA. Read together, these provisions clearly express an exception to section 6103 by requiring each operator, which includes public agencies, such as Caltrans, to reimburse the lead agency for its reasonable costs of inspection and reporting.

Therefore, we conclude that Caltrans is not exempt under section 6103 from paying reasonable fees imposed by Mono County to inspect and prepare a report on Caltrans's surface mining operations.

Fees for Performing Other Duties

With respect to other duties that SMARA requires a lead agency to perform, we conclude that SMARA does not create an exception to section 6103.

In addition to performing annual inspections and preparing reports, SMARA requires lead agencies to (among other things) review permit requests, reclamation plans, and financial assurances. But, in contrast to the inspection-cost statute requiring operators to bear the cost of annual inspections and reports, SMARA contains no provision requiring operators to pay for these other functions. Instead, there is only a general fee statute, Public Resources Code section 2207, which authorizes a lead agency to impose a fee on "each mining operation."

Upon close reading, we conclude that SMARA's general fee statute, by itself, does not create an exception to section 6103. Specifically, for the limited purposes of SMARA's cost and fee statutes, we find significance in the difference between the terms "operator," as used in the inspection-cost statute, and "mining operation," as used in the general fee statute. As our Supreme Court has instructed, we must presume that different words are used for different purposes in a statute, unless examination of the whole statutory scheme shows otherwise.

Examining SMARA as a whole, including its legislative history, we conclude that the Legislature's use of the different terms "operator" and "mining operation" in SMARA's inspection-cost and general fee provisions was deliberate. Public Resources Code section 2207, the general fee statute, was enacted in 1990, and authorizes two sets of fees. Subdivision (d) provides for state fees, to offset the costs of the Department of Conservation's role in implementing SMARA, and subdivision (e) provides for lead agency fees. Subdivisions (d) and (e) both impose fees on the mining operation rather than the operator. The first version of the 1990 bill that added section 2207 imposed only one fee, which was to be submitted by the "person in charge" of the mine and divided equally between the state and the lead agency. After several amendments, the bill's final language imposed two sets of fees on "each mining operation." The same bill also amended section 2774 of the Public Resources Code to require a lead agency to perform annual inspections of each mining operation, and to make the "operator" responsible for the reasonable cost of inspections. The language requiring the operator to bear the inspection cost has never been amended.

Based on this history, and as discussed above, we believe the Legislature's use of the term "operator" in the inspection-cost statute shows an intent to create an exception to section 6103's general rule exempting public agencies from having to pay fees for official services performed by another public agency. In contrast, we believe the Legislature's use of the different term "mining operation" in the general fee statute shows the opposite intent, that is, not to create an exception to section 6103.

Our interpretation gains support from the 1992 enactment of Public Resources Code section 2719, which creates an express exception to section 6103 for the state fee: "Notwithstanding any other provision of law, neither the state nor any county, city, district, or other political subdivision shall be exempt from any fee imposed upon a mining operation pursuant to subdivision (d) of Section 2207." Had the Legislature intended the term "mining operation," as used in the general fee statute, to create an exception to section 6103, then it would have been unnecessary and superfluous for the Legislature to enact Public Resources Code section 2719 to create a specific exception for the state fee. "We do not presume that the Legislature performs idle acts, nor do we construe statutory provisions so as to render them superfluous." Thus, the enactment of Public Resources Code section 2719 persuades us that SMARA's general fee statute does not create an exception to section 6103.

Therefore, we conclude that Caltrans is exempt under section 6103 from paying fees to Mono County for responsibilities performed under SMARA, other than for the reasonable costs of annual inspections and reports.

Conclusion

We conclude that the California Department of Transportation (1) must pay fees to cover Mono County's costs for inspecting, and preparing a report, on the Department's surface mining operations as required by the Surface Mining and Reclamation Act, but (2) is exempt from paying fees for the other duties Mono County is required to perform under the Act.