financial assurance; reclamation; escrow; trusts

HB2278 - financial assurance; reclamation; escrow; trusts

Energy

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Walt Blackman
Last action: 2026-04-13
Official status: Chapter 54
Effective date: Not listed

Plain English Breakdown

The bill does not provide specific details about how much interest can be earned or what fees might apply.

Financial Assurance for Mining Operations

This law adds cash deposits with third-party escrow or trust accounts as a new type of financial assurance mechanism for mining operations in Arizona.

What This Bill Does

Adds cash deposits held by third parties, like banks or trusts, to the list of ways companies can provide money to ensure they follow reclamation rules after mining activities end.
Specifies that any interest earned on these deposits belongs to the company and can be used for final cleanup costs.
Requires the State Mine Inspector to release a portion of the interest earned when some of the deposited funds are released back to the company.
Makes small changes to existing laws to fit with these new rules.

Who It Names or Affects

Companies and individuals who operate exploration operations, mining units, and aggregate mining units in Arizona that cause surface disturbances.

Terms To Know

Reclamation: The process of restoring land after it has been disturbed by mining activities to make it safe and stable for future use.
Financial Assurance Mechanism: A way that companies show they have enough money set aside to cover the costs of cleaning up a site after mining is finished.

Limits and Unknowns

The bill does not specify how much interest can be earned or what fees might apply.
It's unclear if this change will affect state finances since no fiscal impact was noted in the summary.

Bill History

2026-04-09 Senate
Governor signed
2026-04-08 House
Transmitted to House
2026-04-08 Senate
Senate third read passed
2026-04-02 Senate
Senate committee of the whole
2026-03-24 Senate
Senate minority caucus
2026-03-24 Senate
Senate majority caucus
2026-03-23 Senate
Senate consent calendar
2026-03-03 Senate
Senate second read
2026-03-02 Senate
Senate Rules: PFC
2026-03-02 Senate
Senate Natural Resources: DP
2026-03-02 Senate
Senate first read
2026-02-23 Senate
Transmitted to Senate
2026-02-23 House
House third read passed
2026-02-17 House
House minority caucus
2026-02-17 House
House majority caucus
2026-02-16 House
House consent calendar
2026-01-21 House
House second read
2026-01-20 House
House Rules: C&P
2026-01-20 House
House Natural Resources, Energy & Water: DP
2026-01-20 House
House first read

Official Summary Text

HB2278 - 572R - Senate Fact Sheet

Assigned to
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COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

FACT SHEET FOR
H.B. 2278

financial
assurance; reclamation; escrow; trusts

Purpose

Adds cash deposits with a third-party escrow or trust account to the list
of statutorily prescribed allowable financial assurance mechanisms for owners
and operators of exploration operations, mining units and aggregate mining
units who create surface disturbances.

Background

Owners and operators of exploration operations, mining units and
aggregate mining units who create surface disturbances must provide financial
assurance mechanisms to the State Mine Inspector. Allowable financial assurance
mechanisms include any, or a combination of, the following: 1) surety bond; 2)
certificate of deposit; 3) trust fund with pay-in period; 4) letter of credit;
5) insurance policy; 6) certificate of self-insurance; 7) cash deposit with the
State Treasurer; 8) evidence of ability to meet a corporate financial test or
corporate guarantees; 9) annuities; and 10) additional financial assurance
mechanisms that are acceptable to the State Mine Inspector (A.R.S. ��
27-991

and
27-1291
).

An owner or operator may apply to the State Mine Inspector to release all
or part of the statutorily outlined financial assurance. Within 60 days after
receiving an application for the release of financial assurance, the State Mine
Inspector must release all or part of the financial assurance except for any
amount that is necessary to perform the reclamation measures identified in the
reclamation plan. After the reclamation measures have been performed, the
remaining financial assurance must be released, except that 10 percent must be
retained for the cost of care, monitoring and one reseeding, if necessary, for
areas that have been revegetated (A.R.S.

��
27-996

and
27-1296
).

Reclamation
means measures that are taken on surface disturbances
at exploration operations and mining units to achieve stability and safety
consistent with post-mining land use objectives specified in the reclamation
plan (A.R.S. ��
27-901

and
27-1201
).

There is no anticipated fiscal impact to the state General Fund
associated with this legislation.

Provisions

Adds
cash deposits with a third-party escrow or trust account to the list of
statutorily prescribed allowable financial assurance mechanisms for owners and
operators of exploration operations, mining units and aggregate mining units
who create surface disturbances.

Deems that all interest and earnings accrued through the prescribed cash
deposit with a

third-party escrow or trust account, minus any applicable administrative fees
and costs imposed by the third-party escrow or trust, are the property of the
owner or operator of the exploration operations and mining units and may be
applied toward the final reclamation costs.

Requires the State Mine Inspector, on partial release or substitution of
monies deposited in a third-party escrow or trust account, to release the
proportional share of any interest earned.

Requires the State Mine Inspector, if the financial assurance is a
third-party escrow or trust account, to release the proportional share of any
interest earned.

Makes technical and conforming changes.

Becomes effective on the general effective date.

House Action

NREW����������� 2/10/26����� DP������ 8-1-1-0

3
rd
Read��������� 2/23/26����������������� 46-11-3

Prepared by Senate Research

March 13, 2026

SB/ci

Current Bill Text

Read the full stored bill text

Chapter 0054 - 572R - H Ver of HB2278

House Engrossed

financial assurance;
reclamation; escrow; trusts

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

CHAPTER 54

HOUSE BILL 2278

AN
ACT

Amending sections 27-991, 27-996,
27-1291 and 27-1296, Arizona Revised Statutes; RELATING to
financial assurance for reclamation.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 27-991, Arizona Revised
Statutes, is amended to read:

START_STATUTE
27-991.

Financial assurance requirements; form

A.
Beginning April 1, 1997,
As
required by this chapter, owners and operators of exploration operations and
mining units who create surface disturbances shall provide financial assurance
mechanisms to the inspector as provided by this article.

B. Allowable financial assurance mechanisms for
the
purposes of this article include any or a combination of
the following:

1. Surety bond.

2. Certificate of deposit.

3. Trust fund with pay-in period.

4. Letter of credit.

5. Insurance policy.

6. Certificate of self-insurance.

7. Cash deposit with the state treasurer.

8. Evidence of ability to meet a corporate financial
test or corporate guarantees as provided by 40 Code of Federal Regulations
section 264.143(f).

9. Annuities.

10. cash deposit with a Third-party
escrow or trust account.

10.

11.
Additional
financial assurance mechanisms that are acceptable to the inspector.

C. All interest and earnings accrued
through a cash deposit with a third-party escrow or trust account made
pursuant to subsection B, paragraph 10 of this section, minus any applicable
administrative fees and costs imposed by the third-party escrow or trust
account, are the property of the owner or operator of exploration operations
and mining units and may be applied toward the final reclamation costs.� On
partial release or substitution of monies deposited in a third-party
escrow or trust account, the inspector shall release the proportional share of
any interest earned.�
END_STATUTE

Sec. 2. Section 27-996, Arizona Revised
Statutes, is amended to read:

START_STATUTE
27-996.

Release of financial assurance

A. An owner or operator may apply to the
state mine
inspector to release all or part of the financial
assurance provided under this article. The application shall:

1. Describe the reclamation measures that have been
performed.

2. Describe any surface disturbances included in the
reclamation plan that have not been disturbed.

3. Contain an estimate of the costs of reclamation
measures that have not been performed.

B. Within sixty days after receiving a complete
application, the inspector shall release all or part of the financial assurance
except for any amount that is necessary to perform the reclamation measures
identified in the reclamation plan.
If the financial assurance
is a third-party escrow or trust account, the inspector shall release the
proportional share of any interest earned.
After the
reclamation measures have been performed, the remaining financial assurance
shall be released, except that ten per cent shall be retained for the costs of
care, monitoring and one reseeding, if necessary, for areas that have been
revegetated. The inspector shall release the retained monies after a
period of not more than three growing seasons after the supplemental management
or other man-induced inputs have been finally removed or as otherwise
provided in section 27-992, subsection B.
END_STATUTE

Sec. 3. Section 27-1291, Arizona Revised
Statutes, is amended to read:

START_STATUTE
27-1291.

Financial assurance
requirements; form

A.
On or before January 1, 2007,

As required by this chapter, owners and operators of exploration operations and
aggregate mining units who create surface disturbances shall provide financial
assurance mechanisms to the inspector as provided by this article.

B. Allowable financial assurance mechanisms for
purposes of this article include any or a combination of the following:

1. Surety bond.

2. Certificate of deposit.

3. Trust fund with pay-in period.

4. Letter of credit.

5. Insurance policy.

6. Certificate of self-insurance.

7. Cash deposit with the state treasurer.

8. Evidence of ability to meet a corporate financial
test or corporate guarantees as provided by 40 Code of Federal Regulations
section 264.143(f).

9. Annuities.

10. Bonding pools.

11. cash deposit with a Third-party
escrow or trust account.

11.

12.
Additional
financial assurance mechanisms that are acceptable to the inspector.

C. All interest and earnings accrued
through a cash deposit with a third-party escrow or trust account made
pursuant to subsection B, paragraph 10 of this section, minus any applicable
administrative fees and costs imposed by the third-party escrow or trust
account, are the property of the owner or operator of exploration operations
and mining units and may be applied toward the final reclamation costs.� On
partial release or substitution of monies deposited in a third-party
escrow or trust account, the inspector shall release the proportional share of
any interest earned.
END_STATUTE

Sec. 4. Section 27-1296, Arizona Revised Statutes, is amended to read:

START_STATUTE
27-1296.

Release of financial
assurance

A. An owner or
operator may apply to the
state mine
inspector to release
all or part of the financial assurance provided under this article. The
application shall:

1. Describe the reclamation measures that have been
performed.

2. Describe any surface disturbances proposed in the
reclamation plan that have not been disturbed.

3. Contain an estimate of the costs of reclamation
measures that have not been performed.

B. Within sixty days after receiving a complete
application, the inspector shall release all or part of the financial assurance
except for any amount that is necessary to perform the reclamation measures
identified in the reclamation plan.
If the financial assurance
is a third-party escrow or trust account, the inspector shall release the
proportional share of any interest earned.
After the
reclamation measures have been performed, the remaining financial assurance
shall be released, except that ten
per cent

percent
shall be retained for the costs of care, monitoring and one
reseeding, if necessary, for areas that have been revegetated.� The inspector
shall release the retained monies after a period of not more than three growing
seasons after the supplemental management or other man-induced inputs have been
finally removed or as otherwise provided in section 27-1292, subsection
B.
END_STATUTE

APPROVED BY THE GOVERNOR APRIL 13, 2026.

FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 13, 2026.