Cameron Johnson (13996) Steven F. Alder (0033) Assistant Attorneys General MARK L. SHURTLEFF (4666) UTAH ATTORNEY GENERAL

F I LED Counsel for the Division of Oil, Gas, and Mining 1594 West North Temple, Suite 300

AUG 2 1 2012 S6CRETARY, BOARD OF

OIL. GAS & MlMNG Salt Lake City, Utah 84116 Telephone: (801) 538-7247

BEFORE THE BOARD OF OIL, GAS, AND MINING DEPARTMENT OF NATURAL RESOURCES

IN AND FOR THE STATE OF UTAH

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IN THE MATTER OF THE PETITION BY THE DIVISION OF OIL, GAS & MINING FOR AN ORDER:

(1) TO DIRECT THE DIVISION TO COMPLETE RECLAMATION, AND AUTHORIZE A CIVIL SUIT TO RECOVER COSTS FROM MARK MILLER AND EXPECTATION MINE, Ml035/0024;

(2) TO COMPEL PAYMENT OF THE PENALTIES FOR CESSATION ORDERS MC2006-03-04-01 AND MC2006-03-13-01; AND

(3) TO TAKE ALL OTHER ACTIONS NECESSARY TO RECLAIM THE LANDS AT S~ of SW 'l4, ofNW 'l4, S22, T4S, R1 W SLB&M SALT LAKE COUNTY, UTAH.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER

DOCKET NO.: 2012-023 CAUSE NO.: S/035/0024

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This Cause came on for hearing before the Utah Board of Oil, Gas and Mining

(the "Board") on Wednesday, July 25,2012 at approximately 3 p.m., in the Auditorium

of the Utah Department of Natural Resources Building in Salt Lake City, Utah. The

following Board members were present and participated at the hearing: Chairman James

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T. Jensen, Jean Semborski, Ruland J. Gill, Jr., Kelly L. Payne and Carl F. Kendel. Board

members Jake Y. Harouny and Chris D. Hansen were unable to attend and participate.

The Board was represented by Michael S. Johnson, Esq., Assistant Attorney General.

Testifying on behalf of Petitioner Utah Division of Oil, Gas and Mining (the

"Division") was Paul Baker - Mining Reclamation Specialist. Cameron Johnson, Esq.,

Steve Alder, Esq., appeared as attorneys for the Division. Mr. Baker's testimony

explained what actions the Division had taken before filing the Notice of Agency Action

seeking the withdrawal of the NOr, the fines issued against Expectations Mine

("Expectations"), and what outstanding reclamation work remained at the site. Mr.

Johnson informed the Board about the proposed agreement between the parties which

would create a repayment plan for the fines associated with the Second Cause of Action.

Expectations was not represented by counsel and did not have a representative at

the hearing.

The Board, having considered the testimony presented and the exhibits received

into evidence at the hearing, being fully advised, and for good cause, hereby makes the

following findings of fact, conclusions of law and order in this Cause.

FINDINGS OF FACT

1. Mark Miller dba as Expectations Mine was once qualified to do business

in Utah, but has failed to renew a business license since May 12,2005.

2. Expectations is the designated operator of the Expectations Mine at the

following locations in Section 22, Township 4 South, Range 1 West SLB&M, Salt Lake

County, Utah.

3. Expectations is responsible for reclaiming the mine site for its mines

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pursuant to its signed Small Mine Reclamation Contract with the Division on May 6,

2005.

4. On April 6, 2005 Respondent filed a Notice of Intention to Commence

Mining Operations ("NOI") with the Division.

5. On April 7, 2005 Far West Bank established LOC No. 15413685 for the

mine valued at $3,000.

6. On May 9, 2006 the Division issued Order # 1 to Respondent for the

following:

a. Failure to file a Notice of Intention to Commence Large Mining

Operations before beginning large mining operations under Utah Admin. Code

R647-3-114;

b. Failure to conduct mining operations as shown in the Notice of

Intention to Commence Small Mining Operations under Utah Admin Code

R647-3-105 and 106; and

c. Failure to maintain adequate surety under Utah Admin. Code

R647-3-111.

The total penalty amount was $1,320.

7. Order # 1 was modified on May 24, 2006 to give the Respondent

additional time to complete the reclamation of the areas outside ofthe original NOr.

8. On June 9,2006 Respondent requested additional time from the Division

to complete the required reclamation work.

9. On June 29,2006 the Division modified Order # 1 and granted

Respondent an extension for the reclamation of areas outside ofthe original NOI until

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July 10, 2006.

10. On October 24, 2006, Respondent requested an informal conference with

the Division to appeal Order #1.

11. On October 27,2006 the Division gave notice that an informal conference

was set for November 14,2006.

12. On November 1,2006 Respondent was issued Cessation Order No.

MC2006-03-13-01 ("Order # 2") for:

a. Failure to conduct mining operations as shown in the Notice of

Intention to Commence Small Mining Operations under Utah Admin. Code

R647-3-114, 105, and 106; and

b. Failure to maintain adequate surety under Utah Admin. Code

R647-3-111.

13. Order # 2 required Respondent to immediately stop mining outside of the

original 3.2 acres and to immediately begin the following actions:

a. Re-grade and seed disturbed areas in excess of 3.2 acres;

b. File a revised NOI showing both the reclaimed areas and the areas

where future operations will be conducted;

c. Complete regarding and seeding of all areas outside the approved

3.2 acre permitted disturbed area; and

d. File a NOI to Commence Large Mining Operations addressing all

pertinent requirements of the Utah Admin. Code R647 rules including all areas

that have been disturbed by mining operations.

14. On November 28,2006 the Division issued Respondent a letter detailing

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the fines associated with Order # 2. The Division's proposed assessment was $2,310.

15. On December 12, 2006 the Division modified Order # 1 to require

Respondent to only reseed disturbed areas outside of the NOI lands rather than having to

post an additional surety.

16. On December 18, 2006 the Division recalculated the civil penalty

assessment associated with Order # 2 based on the Respondent's efforts to comply with

the order's requirements. The fine total was reduced to $1,760.

17. On March 17,2007 the Division issued Respondent a letter that gave

notice of his outstanding fines associated with Orders # 1 and # 2.

18. On November 16,2007 the Division withdrew Respondent's NOI for

failing to pay annual permit fees and outstanding fines. This withdrawal immediately

stopped any mining activity and required the Respondent to immediately begin

reclamation work pursuant to the reclamation contract.

19. On June 13, 2008 the Division sent Respondent a final assessment letter

regarding Orders # 1 and # 2. Respondent's outstanding fines totaled $3,080.

20. On October 20, 2009 the Division mailed Respondent a letter informing

him again of the outstanding fines related to Orders # 1 and # 2 and of the Division's

intent to seek a forfeiture ofthe surety.

21. On June 13,2011 the Division received notice that Respondent's LOC

was not going to be either renewed or extended by Far West Bank.

22. On June 16,2011 the Division replied to Far West Bank and informed the

bank that it had notified Respondent that a replacement surety must be provided by

August 14, 2011. The Division also provided the Bank with notice that if Respondent

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failed to provide a replacement surety, the Division would begin to immediately seek

payment for the full amount.

23. On June 16,2011 the Division gave Respondent notice of Far West's

actions and the Division's proposed plans in the event Respondent did not provide an

alternative reclamation surety by August 14,2011. In the same letter, the Division also

reminded Respondent of the outstanding fines related to Orders # 1 and # 2.

24. Respondent did not renew the surety or provide an alternative by the

August 14,2011 deadline. As a result, the Respondent's surety expired and the

reclamation contract signed by both the Respondent and the Division was breached.

25. The fines associated with Orders # 1 and # 2 remain outstanding.

26. On June 11,2012 the Division filed a Notice of Agency Action seeking a

Board order for the repayment of costs associated with completing the outstanding

reclamation work at the site and an order allowing the Division to seek judicial

enforcement against Expectations for the outstanding fines.

27. The remaining reclamation work that needs to be completed is not

extensive. The Division requires Expectations to remove the litter that is scattered

throughout the site and to remove the oil contaminated soil and replace it with fresh soil.

28. Shortly after receiving the NOAA filed by the Division, Expectations

began to work towards a resolution that would allow it to pay down the outstanding fines

over a twenty-four month period. However, an agreement was not finalized before the

hearing began on July 25, 2012.

29. At the hearing, the Board called the Division's witness, Mr. Paul Baker

("Baker"), to address the Division's history of interactions with the Expectations Mine.

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30. Baker affirmed the correctness ofthe facts as alleged in the Division's

NOAA to the Board, which the Board accepted.

31. Expectations was not represented by counsel and did not have a

representative at the hearing.

CONCLUSIONS OF LAW

1. Under Utah Code Ann. § 40-8-13, Expectations is required to have a NOI

before it can begin any mining operations at its Site.

2. An operator's NOI may be withdrawn if the operator "substantially fails to

perform reclamation" or "fails to provide and maintain surety as required" in

accordance with Utah Code Ann. § 40-8-16(2)(a) and(b).

3. An operator is required to reclaim mine site in accordance with the

Divisions' requirements and the requirements of Utah Admin. Code R647-4-111.

4. If an operator fails to conduct reclamation, the Board may, after notice and

hearing, order that the "the costs and expenses of reclamation, together with costs of

recollection including attorney's fees be recovered in a civil action brought by the

attorney general against the operator in any appropriate court" under Utah Admin.

Rule R647-3-112(2).

5. Under Utah Code Ann. § 40-8-9. 1 (3)(a) "a civil penalty assessed by the

division shall be final only after the person charged with a violation described under

Subsection (1) has been given an opportunity for public hearing."

6. Under Utah Code Ann. § 40-8-9.1 (3 )(b) "if a public hearing is held, the

board shall make findings of facts and shall issue a written decision as to the

occurrence of the violation and the amount of the penalty which is warranted,

incorporating, when appropriate, an order requiring the order to be paid."

7. Under Utah Code Ann. § 40-8-9.1(4) "[c]ivil penalties owed under this

chapter may be recovered in a civil action brought by the attorney general of Utah at

the request of the board in any appropriate district court of the state."

ORDER

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Based upon the Request, testimony, and evidence submitted, and the findings of

fact and conclusions oflaw stated above, the Board hereby orders:

1. The Request in this cause is granted.

2. NOT S/035/0024 for the Expectations Mine located at S~ of SW Y4, of

NW Y4, S22, T4S, R1 W SLB&M Salt Lake County, Utah is formally withdrawn.

3. Expectations owes a total of $3,080 in fines arising from Cessation Orders

MC2006-03-04-01 ("Order #1) and MC2006-03-13-01 ("Order #2).

4. The Division is authorized to seek the judicial enforcement of the

penalties arising from Orders # 1 and # 2 in the Third District Court of Utah pursuant to

Utah Code Ann. § 40-8-9.1(4) if an alternative payment plan or agreement is not reached

between the parties first.

5. The Division is authorized to begin reclamation work at the Expectations

Mine located at S~ of SW Y4, ofNW Y4, S22, T4S, R1 W SLB&M Salt Lake County.

6. The Division is authorized to seek the repayment of all reclamation costs

from Expectations Mine as well as any other additional costs and attorney's fees

associated with this matter.

7. Notice re: Right to Seek Judkial Review by the Utah Supreme Court or to

Request Board Reconsideration: As required by Utah Code Ann. § 63G-4-208(e) - (g),

the Board hereby notifies all parties in interest that they have the right to seek judicial

review of this final Board Order in this formal adjudication by filing a timely appeal with

the Utah Supreme Court within 30 days after the date that this Order is issued. Utah

Code Ann. §§ 63G-4-401(3)(a) and 403. As an alternative to seeking immediate judicial

review, and not as a prerequisite to seeking judicial review, the Board also hereby notifies

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parties that they may elect to request that the Board reconsider this Order, which

constitutes a final agency action of the Board. Utah Code Ann. § 63G-4-302, entitled,

"Agency Review - Reconsideration," states:

(l)(a) Within 20 days after the date that an order is issued for which

review by the agency or by a superior agency under Section 63G-

4-301 is unavailable, and if the order would otherwise constitute

final agency action, any party may file a written request for

reconsideration with the agency, stating the specific grounds upon

which relief is requested.

(b) Unless otherwise provided by statute, the filing of the request is

not a prerequisite for seeking judicial review of the order.

(2) The request for reconsideration shall be filed with the agency and

one copy shall be mailed to each party by the person making the

request.

(3)(a) The agency head, or a person designated for that purpose, shall

issue a written order granting the request or denying the request.

(b) If the agency head or the person designated for that purpose does

not issue an order within 20 days after the filing of the request, the

request for reconsideration shall be considered to be denied.

fd. The Board also hereby notifies the parties that Utah Admin. Code Rule R641-

110-100, which is part of a group of Board rules entitled, "Rehearing and Modification of

Existing Orders," states:

Any person affected by a final order or decision of the Board may file

a petition for rehearing. Unless otherwise provided, a petition for rehearing

must be filed no later than the 10th day of the month following the date of 9

signing of the final order or decision for which the rehearing is sought. A copy

of such petition will be served on each other party to the proceeding no later

than the 15th day of that month.

Jd. See Utah Admin. Code Rule R641-11 0-200 for the required contents of a

petition for Rehearing. If there is any conflict between the deadline in Utah Code Ann. §

63 G-4-302 and the deadline in Utah Admin. Code R641-11 0-1 00 for moving to rehear

this matter, the Board hereby rules that the later of the two deadlines shall be available to

any party moving to rehear this matter. If the Board later denies a timely petition for

rehearing, the party may stilI seek judicial review of the Order by perfecting a timely

appeal with the Utah Supreme Court within 30 days thereafter.

8. The Board retains continuing jurisdiction over all the parties and over the

subj ect matter of this cause, except to the extent said jurisdiction may be divested by the

filing of a timely appeal to seek judicial review of this order by the Utah Supreme Court.

DATED this 2/4; of August, 2012

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~~r5::::: BOARD OF OIL, GAS, AND MINING

James T. Jensen, Chamnan

CERTIFICATE OF SERVICE

I hereby certify that I caused a true and correct copy of the foregoing FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER for Docket No. 2012-023, Cause No. S/03510024 to bemailedwithPostageprepaid.this~dayof ¢/..:f.sr .2012.to the following:

Cameron Johnson Steven F. Alder Assistant Attorneys General Utah Division of Oil, Gas & Mining 1594 West North Temple, Suite 300 Salt Lake City, UT 84116 [Via Email]

Michael S. Johnson Assistant Attorneys General Utah Board of Oil, Gas & Mining 1594 West North Temple, Suite 300 Salt Lake City, UT 84116 [Via Email]

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Mark Miller 11949 Hidden Canyon Lane Sandy, UT 84092