03/02/2004 01:55 PM House FIN

HOUSE BILL NO. 344                                                                                                            
                                                                                                                                
     An Act relating to annual rental fees for mining                                                                           
     claims, and providing for reduced royalties during the                                                                     
     first three years of production.                                                                                           
                                                                                                                                
REPRESENTATIVE  HUGH  'BUD'  FATE  noted that  the  bill  was                                                                   
designed  to  keep  the  small   Alaska  mining  industry  in                                                                   
business.   Since  1980's, Alaska  has seen  the small  miner                                                                   
disappear  because   of  the   costs  associated   with  that                                                                   
industry.  There  is a 'glitch' in the Alaska  statutes.  The                                                                   
language causes a miner to automatically  lose their claim if                                                                   
the required paperwork was filed a day late.                                                                                    
                                                                                                                                
HB  344  would  "fix"  that  language,  granting  a  deadline                                                                   
extension.  New  language would allow a miner  to keep claims                                                                   
by filing  the paperwork  and paying a  penalty equal  to one                                                                   
years  rent.   He  pointed out  that  Alaska  was founded  on                                                                   
mining  before oil  was important  to  the State's  industry.                                                                   
Small mines have  brought cash to the local  communities.  HB
 is an important  first step in reviving  an industry that                                                                   
is good for local communities and the State as a whole.                                                                         
                                                                                                                                
JIM POUND, STAFF, REPRESENTATIVE  HUGH 'BUD' FATE, offered to                                                                   
answer questions of the Committee.                                                                                              
                                                                                                                                
BOB  LOEFFLER, DIRECTOR,  MINING,  LAND  AND WATER  DIVISION,                                                                   
DEPARTMENT  OF  NATURAL  RESOURCES, pointed  out  that  often                                                                   
times the miners are late in their  filings.  He commented on                                                                   
circumstances  that  affect  the  miners.   HB  344  provides                                                                   
flexibility  and alternatives.   It  will help  to save  some                                                                   
claims and will help small miners remain viable.                                                                                
                                                                                                                                
Representative  Foster   voiced  his  appreciation   for  the                                                                   
legislation.   He asked  what would happen  if a  miner filed                                                                   
late and  another miner  "staked" that  claim.  Mr.  Loeffler                                                                   
replied that had  been extensively discussed  with the Mining                                                                   
Association.  The bill could rectify  the claim as long as no                                                                   
one had staked intervening rights.   If someone staked in the                                                                   
interim,  the  language  would  not cure  the  problem.    He                                                                   
pointed out  that this is part  of a long tradition  from the                                                                   
1872 mining bill.                                                                                                               
                                                                                                                                
Representative Croft asked the  penalty and if interest would                                                                   
be calculated.  Mr. Loeffler replied  that the miner would be                                                                   
required to pay whatever was owed  and an additional one-year                                                                   
rental.                                                                                                                         
                                                                                                                                
Representative  Croft  inquired if  the  bill had  originally                                                                   
addressed  royalties.  Mr.  Pound responded  that it  did and                                                                   
after calculation,  it  was determined  that would save  only                                                                   
about $20  to $60 dollars so it  was decided not to  be worth                                                                   
the  process.    Representative  Fate  interjected  that  the                                                                   
legislation  started the same  as HB 232,  but that  bill did                                                                   
not "meaningfully help the small miner".                                                                                        
                                                                                                                                
Representative Fate  MOVED to report  CS HB 344 (RES)  out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  344 (RES)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation  and with  a new  note by Department  of                                                                   
Natural Resources.