02/25/2004 01:07 PM House RES

HB 344-MINING FEES, RENTALS, & ROYALTIES                                                                                      
                                                                                                                                
CHAIR DAHLSTROM announced  that the next order  of business would                                                               
be 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."                                                                                           
                                                                                                                                
CO-CHAIR  MASEK  clarified  that   [Version  I]  was  before  the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 2517                                                                                                                     
                                                                                                                                
JIM  POUND,  Staff  to Representative  Hugh  Fate,  Alaska  State                                                               
Legislature, came forward  to explain CSHB 344(RES)  on behalf of                                                               
Representative Fate, sponsor.  Mr.  Fate said the language in the                                                               
CS  more so  meets the  requirements of  what the  intent of  the                                                               
original bill  was, which was to  help the small miner  "get back                                                               
out in  the field  and stay back  out in the  field" in  order to                                                               
bring [the small mining] economy back  to Alaska.  He said the CS                                                               
allows that  if the small  miner is  late on filing  the required                                                               
paperwork,  that  person  is not  automatically  deemed  to  have                                                               
abandoned the  site, and it gives  [the small miner] a  "cure" in                                                               
order to prevent  that from happening, although  the cure doesn't                                                               
come without  penalty.  If  the paperwork  is filed even  one day                                                               
late,  the small  miner will  ultimately have  to pay  one year's                                                               
rent on his or  her claims.  He said the  sponsor worked with the                                                               
Department  of Natural  Resources  (DNR) and  the Alaska  Miner's                                                               
Association very closely and it  was mutually agreed that this is                                                               
the  direction that  will have  the most  positive impact  on the                                                               
mining industry.                                                                                                                
                                                                                                                                
Number 2449                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO  asked how  much money  this bill  will save                                                               
the average placer miner.                                                                                                       
                                                                                                                                
MR. POUND  said it is  not so much  a case  of saving money.   He                                                               
said currently,  if a miner  files his  or her paperwork  one day                                                               
late, the  state deems  that mine as  abandoned, and  that person                                                               
will ultimately  lose his or her  claims.  He said  the amount of                                                               
money  a particular  miner might  lose is  dependant on  how much                                                               
that person has in his or her claims.                                                                                           
                                                                                                                                
Number 2414                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG asked about  extensions for filing late                                                               
paperwork.   He  asked how  much time  a small  miner would  have                                                               
under the bill before the mine is considered abandoned.                                                                         
                                                                                                                                
BOB  LOEFFLER,  Director, Division  of  Mining,  Land and  Water,                                                               
Department of Natural Resources, replied  that the way the system                                                               
has worked  since the 1872  mining law,  is that the  mining year                                                               
ends on  September 30,  and the  miner has  until November  30 to                                                               
either pay  or record his  or her annual  labor and pay  rent [on                                                               
the mining  claim].   If for  some reason the  miner is  late, he                                                               
said those claims are abandoned by  operation of law and there is                                                               
nothing he can do about it.   Mr. Loeffler said it is the miner's                                                               
responsibility and has  been since 1872 to ensure that  he or she                                                               
files  the [required  paperwork] on  time.   Every year,  he said                                                               
there are about a dozen people  that don't have a good excuse and                                                               
some of those  people come in begging [him] to  do [something for                                                               
them],  although there  is nothing  he can  do under  the current                                                               
law.   He said  this bill would  give a miner  who pays  late the                                                               
opportunity to cure.  Under  current law, the mines are abandoned                                                               
and  may not  be staked  for  a year.   During  that year  period                                                               
someone  else may  stake  that  claim and  it  would become  that                                                               
person's claim.   He  said the  [late paying]  miner can  cure by                                                               
paying a  penalty.   Mr. Loeffler said  it's typically  the small                                                               
miners -  through error,  incompetence, or old  age -  that "blow                                                               
it" occasionally,  and it averages about  a dozen or two  dozen a                                                               
year.  He  said this [bill] gives those miners  an opportunity to                                                               
keep working.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GUTTENBERG asked  what the  remedy would  be with                                                               
the passage of this bill.                                                                                                       
                                                                                                                                
MR. LOEFFLER said  it would allow the miner to  pay a penalty and                                                               
the abandonment is cured.                                                                                                       
                                                                                                                                
REPRESENTATIVE GUTTENBERG asked what the penalty is.                                                                            
                                                                                                                                
MR.  LOEFFLER said  the  miner  would have  to  pay  for what  is                                                               
already owed and  an additional penalty equal to  the annual rent                                                               
for that mining claim.                                                                                                          
                                                                                                                                
CO-CHAIR  DAHLSTOM  offered  her understanding  that  the  year's                                                               
annual  rent  will be  a  different  number for  each  individual                                                               
claim.                                                                                                                          
                                                                                                                                
MR. LOEFFLER said  the annual rent depends on how  long the claim                                                               
has been  in existence, so there  could be a couple  of different                                                               
numbers.                                                                                                                        
                                                                                                                                
Number 2163                                                                                                                     
                                                                                                                                
REPRESENTATIVE  STEPOVICH asked  what the  time limit  is on  the                                                               
penalty.                                                                                                                        
                                                                                                                                
MR. LOEFFLER said  there is no time limit, but  there would be no                                                               
real reason to  do it after a year because  that miner could just                                                               
re-stake his or her claim.                                                                                                      
                                                                                                                                
REPRESENTATIVE STEPOVICH asked if anyone could stake the claim.                                                                 
                                                                                                                                
MR. LOEFFLER said  the law is really consistent  with history and                                                               
tradition since  1872, and  the it works  if someone  else hasn't                                                               
asserted  contrary rights.   If  someone else  stakes the  claim,                                                               
that person gets the claim.   He indicated that a miner could not                                                               
lose his or her claim if  over-staked by another miner as long as                                                               
the paperwork is current.                                                                                                       
                                                                                                                                
Number 2105                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO  asked how  long a person  could be  late on                                                               
filing his or her paperwork.                                                                                                    
                                                                                                                                
MR.  LOEFFLER said  as  long as  no  one stakes  a  claim to  the                                                               
contrary and the  miner wants to pay all of  the penalties, it is                                                               
fine with him.                                                                                                                  
                                                                                                                                
REPRESENTATIVE STEPOVICH  asked if a  slow pay is better  than no                                                               
pay.                                                                                                                            
                                                                                                                                
MR. LOEFFLER replied yes.                                                                                                       
                                                                                                                                
Number 2039                                                                                                                     
                                                                                                                                
REPRESENTATIVE HEINZE moved to report  CSHB 344(RES), Version 23-                                                               
LS1298\I,  Bullock,  2/20/04  out of  committee  with  individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no  objection,   CSHB  344(RES)  was  reported   from  the  House                                                               
Resources Standing Committee.