Legislature(2003 - 2004)

03/24/2004 03:30 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         HB 344-MINING FEES/LABOR/ROYALTIES/ABANDONMENT                                                                     
                                                                                                                                
CHAIR SCOTT  OGAN called the Senate  Resources Standing Committee                                                             
meeting  to  order at  3:30  p.m.  Present were  Senators  Thomas                                                               
Wagoner, Ben  Stevens, Fred Dyson,  Ralph Seekins, Kim  Elton and                                                               
Chair  Scott Ogan.  Senator Georgianna  Lincoln arrived  at 3:45.                                                               
The first order  of business to come before the  committee was HB
344.                                                                                                                            
                                                                                                                                
REPRESENTATIVE HUGH  FATE, sponsor,  noted that he  supported the                                                               
two  proposed  amendments  and explained  that  the  bill  simply                                                               
corrects a  situation in which a  person makes a mistake  or, for                                                               
some reason, can't  get into the recorder's office  to record his                                                               
assessment  and other  paperwork required  by the  department for                                                               
mining claims.  If the filing does  not occur on time,  the claim                                                               
immediately  becomes  abandoned, making  it  open  to staking  or                                                               
location by  someone else.  Also, if that  mistake has  been made                                                               
and someone has  overfilled the claim, the  person who overfilled                                                               
it is the new claimant of the property.                                                                                         
                                                                                                                                
This legislation allows  for a true error to be  made so that, if                                                               
there has  not been an overfilling  or the property has  not been                                                               
located,  a  miner has  the  opportunity  to  pay a  penalty  and                                                               
refile. The  penalty would  be equal to  the last  year's royalty                                                               
and assessments on  the property. So, he not only  has to pay the                                                               
current fee,  but a penalty equal  to that fee, as  well. Being a                                                               
former  miner, he  has  seen people  coming  into the  recorder's                                                               
office 10 minutes late and not being able to record.                                                                            
                                                                                                                                
     So,  all their  equipment is  sitting out  there, their                                                                    
     cabins and everything else. If  somebody knew that this                                                                    
     was  going to  happen, they  could actually  go in  and                                                                    
     locate those  claims. This gives  redress for  that. It                                                                    
     doesn't mean  that they have  an opportunity at  all to                                                                    
     delay coming  for 30  days.... It  allows them  to have                                                                    
     redress. But, if  somebody did topfile on  one of their                                                                    
     claims, it's up to them  to know they were topfiled and                                                                    
     it's up  to them to know  that the paperwork has  to be                                                                    
     clean, because if  they do not file in  a timely manner                                                                    
     and they are  topfiled, that claim would  belong to the                                                                    
     person who topfiled.                                                                                                       
                                                                                                                                
     By the  same token, if  they don't  file - and  even if                                                                    
     they  make  an  error   in  getting  there  in  time...                                                                    
     usually,  it's about  a 24-hour  mistake -  either they                                                                    
     got the  dates mixed up or  they just can't get  in for                                                                    
     some reason  - broke down  or whatever, they  still, if                                                                    
     somebody  comes in  and claims  that it's  open ground,                                                                    
     even  though they  may have  redress,  it's still  open                                                                    
     ground.  So, it  doesn't alter  at all  the law,  which                                                                    
     allows  somebody   else  to   file  a  claim   on  open                                                                    
     ground....  It's a  real step  for a  lot of  the small                                                                    
     miners out  there who have  this concern and  have lost                                                                    
     claims by not being able to get in.                                                                                        
                                                                                                                                
SENATOR KIM ELTON asked what the typical rent is for a claim.                                                                   
                                                                                                                                
REPRESENTATIVE FATE replied, "If  they are productive, they would                                                               
have to pay  royalty; they would have to pay  a labor assessment.                                                               
I think it's $200 on a two-year claim."                                                                                         
                                                                                                                                
SENATOR  ELTON asked  if this  would allow  a miner  to cure  the                                                               
problem of  a late  filing up to  any period of  time as  long as                                                               
nobody has filed a top claim or a claim on the claim.                                                                           
                                                                                                                                
REPRESENTATIVE FATE said that is correct.                                                                                       
                                                                                                                                
CHAIR  OGAN asked  if he  had statistics  on how  often this  has                                                               
happened.                                                                                                                       
                                                                                                                                
REPRESENTATIVE FATE  replied that he  had been topfiled  and from                                                               
his own experience,  you usually know when  someone has topfiled,                                                               
because they  do it year  after year  hoping you make  a mistake.                                                               
When a  miner files his  assessment at the recorder's  office, he                                                               
can  see if  he has  been topfiled.  "You try  to make  sure your                                                               
paperwork is clean."  He has seen a number of  miners come in one                                                               
day  late  because they  get  the  dates  confused. He  has  also                                                               
actually  seen  instances  where  miners get  to  the  recorder's                                                               
office before  the doors close. Bob  Loeffler, Director, Division                                                               
of  Mining,   Land  and  Water   indicated  this   happens  quite                                                               
frequently.                                                                                                                     
                                                                                                                                
CHAIR  OGAN asked,  if a  miner decides  to abandon  a claim  and                                                               
another  person decides  to  topfile and  then  that first  miner                                                               
changes his  mind, is there a  time limit for paying  the penalty                                                               
and refiling. He pointed out that HB 344 has no time limit.                                                                     
                                                                                                                                
REPRESENTATIVE FATE said  the first miner couldn't  get his claim                                                               
back if it had been topfiled by someone else.                                                                                   
                                                                                                                                
CHAIR OGAN said he is still missing how HB 344 changes that.                                                                    
                                                                                                                                
REPRESENTATIVE  FATE  sought  hard  to enlighten  him  saying  it                                                               
doesn't change  that aspect of it.  This will help a  small miner                                                               
who has  made a mistake  by being a  day late or  some equivalent                                                               
small  blunder.  In  all  circumstances,   if  no  one  else  has                                                               
topfiled,  the  claim  becomes  open  ground  and  under  current                                                               
statute, he can't refile on his  property for a full year. SB 344                                                               
allows him pay a fine and refile.                                                                                               
                                                                                                                                
CHAIR OGAN supposed that this is  like someone who pays his taxes                                                               
late and, therefore, has to pay a stiff penalty, too.                                                                           
                                                                                                                                
SENATOR  GEROGIANNA LINCOLN  arrived at  3:45 p.m.  She said  she                                                               
understood what Representative  Fate was trying to  do and asked,                                                               
"What  kind of  person would  actually take  advantage of  a bill                                                               
like that and,  then, what's the grace period you've  got in here                                                               
for a late filing?"                                                                                                             
                                                                                                                                
MR. JIM  POUND, staff  to Representative  Fate, replied  that the                                                               
department has indicated  that about 5 - 15 people  per year miss                                                               
the filing deadline.                                                                                                            
                                                                                                                                
REPRESENTATIVE FATE added that there  really isn't a grace period                                                               
per se.                                                                                                                         
                                                                                                                                
     If that  ground is  open after he's  made the  error in                                                                    
     not  filing  in  a  timely manner,  it's  not  a  grace                                                                    
     period. It's  open ground.... They're usually  in there                                                                    
     within a day or, at the latest, two.                                                                                       
                                                                                                                                
SENATOR LINCOLN  said there is  a reason for deadlines  and asked                                                               
for examples of  other circumstances in which a  miner might file                                                               
late.                                                                                                                           
                                                                                                                                
REPRESENTATIVE FATE replied  weather factors, sickness, injuries,                                                               
and, commonly  in November,  people would think  it was  the 31st                                                               
and be exactly 24-hours late.                                                                                                   
                                                                                                                                
     It's frequent enough  to be a concern and  yet it's not                                                                    
     that  prevalent, but  5 -  15  is not  a small  figure,                                                                    
     really compared  to the number  of small mines  that we                                                                    
     have today out there,  especially in the Interior. When                                                                    
     I started mining, there were  3,000 people in the small                                                                    
     mining  industry.   Within  three  years,   there  were                                                                    
     300....                                                                                                                    
                                                                                                                                
He said that  the Department of Natural Resources  and the Mining                                                               
Association support this legislation.                                                                                           
                                                                                                                                
SENATOR LINCOLN  asked if a  person has  to physically go  in and                                                               
file.                                                                                                                           
                                                                                                                                
REPRESENTATIVE FATE replied that they have to go in physically.                                                                 
                                                                                                                                
SENATOR  RALPH SEEKINS  asked  if there  is  any requirement  for                                                               
notice of topfiling.                                                                                                            
                                                                                                                                
REPRESENTATIVE FATE replied  no. He said that  sometimes a person                                                               
who  topfiles  doesn't know  that  the  ground has  already  been                                                               
staked.  He also  knows  of  people who  topfile  in huge  blocks                                                               
just trying to capitalize on someone else's mistake.                                                                            
                                                                                                                                
SENATOR  ELTON  asked  if  someone  doesn't make  it  in  by  the                                                               
deadline and wants  to cure the problem six months  later, is the                                                               
claim renewed for  18 months or for two years  from the six-month                                                               
period.                                                                                                                         
                                                                                                                                
REPRESENTATIVE FATE replied  that it would be a new  filing for a                                                               
two-year basis.  He reminded the  committee that the  penalty for                                                               
late filing is equal to one year's rent, which is $100 - $200.                                                                  
                                                                                                                                
SENATOR FRED  DYSON said he  thought that  a miner already  has a                                                               
huge  incentive to  file on  time and  the penalty  would add  to                                                               
that. He moved amendment 1 on page 2, lines 10 - 13, as follows:                                                                
                                                                                                                                
Page 2, lines 10-13                                                                                                             
                                                                                                                                
10(b)...mining claim, or leasehold location[, or                                                                            
   11 prospecting site] that includes all or part of the mining                                                                 
       claim, or leasehold location [, or                                                                                       
   12 prospecting site] abandoned under (a) of this section, or                                                             
       the area is closed to mineral location under AS 38.05.185                                                            
       - 38.05.275, a person may cure....                                                                                   
                                                                                                                                
The revised subsection would read as follows:                                                                                   
                                                                                                                                
*Sec.2. AS  38.05.265 is  amended by adding  a new  subsection to                                                               
read:                                                                                                                           
     (b) Unless  another person has located  a mining claim,                                                                    
     or leasehold location that includes  all or part of the                                                                
     mining  claim, or  leasehold  location abandoned  under                                                                
     (a) of this  section, or the area is  closed to mineral                                                                
     location under  AS 38.05.185 - 38.05.275,  a person may                                                                
     cure the failure to record  or pay that constituted the                                                                    
     abandonment and cure the abandonment by                                                                                    
            (1) properly recording a certificate of                                                                             
               location   or  a  statement   of  annual                                                                         
               labor,   paying   any  required   annual                                                                         
               rental,   and    paying   any   required                                                                         
               production royalty; and                                                                                          
            (2) paying a penalty equal to the annual                                                                            
               rent for the mining claim, leasehold                                                                             
               location, or prospecting site that was                                                                           
               abandoned under (a) of this section.                                                                             
                                                                                                                                
MR. POUND  explained that there  is no such thing  as abandonment                                                               
of a prospecting site. They just expire after two years.                                                                        
                                                                                                                                
MR.  CAMERON LEONARD,  Assistant  Attorney General,  said he  had                                                               
worked with Bob Loeffler at DNR and Mr. Pound on this language.                                                                 
                                                                                                                                
     It  addresses two  different  issues.  The first  being                                                                    
     that  prospecting sites  aren't abandoned  in the  same                                                                    
     way  as mining  claims and  leasehold locations  and so                                                                    
     there is  no need  to try  to cure  them under  the new                                                                    
     language in  265(b). But, the more  significant problem                                                                    
     that this  amendment addresses is the  possibility that                                                                    
     after  a claim  is abandoned,  if for  some reason  the                                                                    
     area is  closed to  mineral location  by the  state, if                                                                    
     someone were to  come back in at that point  and try to                                                                    
     cure  the  abandoned  claims  without  this  amendment,                                                                    
     there might  be an issue that  they have a right  to do                                                                    
     so, even  though the  area had  been closed  to mineral                                                                    
     location....  Those   are  the  two  changes   and  DNR                                                                    
     supports both of those changes....                                                                                         
                                                                                                                                
CHAIR OGAN  asked if  this amendment would  prevent a  miner from                                                               
coming back  into the Girdwood  area that was closed  to minerals                                                               
last year,  for instance, and saying  he had for some  reason not                                                               
filed  his claim.  "Would this  keep him  from getting  the claim                                                               
activated again?"                                                                                                               
                                                                                                                                
MR. LEONARD exclaimed that it would have exactly that effect.                                                                   
                                                                                                                                
SENATOR GEOGIANNA LINCOLN asked if  "prospecting site" on line 18                                                               
was applicable to section (b)(2).                                                                                               
                                                                                                                                
MR.  LEONARD  replied that  she  was  correct and  that  language                                                               
should be deleted.                                                                                                              
                                                                                                                                
MR. POUND agreed.                                                                                                               
                                                                                                                                
SENATOR  LINCOLN  moved to  delete  "prospecting  site" from  the                                                               
proposed amendment  in (b)(2).  There were  no objections  and it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
SENATOR FRED DYSON  moved to pass SCS HB  344(RES) from committee                                                               
with  individual recommendations  and  accompanying fiscal  note.                                                               
There were no objections and it was so ordered.                                                                                 

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