02/14/2020 03:30 PM Senate RESOURCES

        SB 155-EXPLORATION & MINING RIGHTS; ANNUAL LABOR                                                                    
                                                                                                                                
3:49:27 PM                                                                                                                    
CHAIR  MICCICHE   reconvened  the   meeting  and   announced  the                                                               
consideration  of  SENATE  BILL  NO. 155,  "An  Act  relating  to                                                               
exploration  and   mining  rights;   relating  to   annual  labor                                                               
requirements with  respect to mining  claims and  related leases;                                                               
relating  to statements  of annual  labor; defining  'labor'; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
CHAIR MICCICHE said  SB 155 was introduced on  February 5th, when                                                               
the committee  heard a presentation  and took  invited testimony.                                                               
He said it was his intention to take public testimony today.                                                                    
                                                                                                                                
3:50:04 PM                                                                                                                    
CHAD HUTCHINSON,  Staff, Senate Majority Office,  Juneau, Alaska,                                                               
said that  the purpose  of SB  155 is to  ensure that  miners are                                                               
able to  produce. This  bill would update  the statutes  to allow                                                               
them to do so.  The genesis of the bill starts  with Section 1 of                                                               
the  Constitution  of  the  State of  Alaska,  Article  VIII.  He                                                               
paraphrased Section 1,  that resources must be  developed for the                                                               
maximum use  consistent with the  public interest.  Article VIII,                                                               
Section  11, relates  to mineral  interests  and continuation  of                                                               
mineral  interests in  the state.  It requires  that in  order to                                                               
continue  mineral  rights, annual  labor  must  be performed  and                                                               
fees, rents, royalties must be paid.                                                                                            
                                                                                                                                
He provided  a brief recap of  the sectional analysis of  SB 155.                                                               
The  first three  sections relate  to qualifications.  Sections 4                                                               
and 5 relate to mining  claims, including the Meridian, Township,                                                               
Range,  Section,  and  Claim (MTRSC)  system  and  amendments  to                                                               
mining  claims. Sections  6-9 outline  guidelines and  procedures                                                               
for annual labor. The definition  of labor was updated in Section                                                               
10.  The definition  of  abandonment is  updated  in Section  11.                                                               
Section 12  clarifies transfers from  an unqualified person  to a                                                               
qualified  person with  an interest  in a  mining claim.  He said                                                               
that Section  13 relates  to mining  claim locations,  Section 14                                                               
relates  to  applicability,  Section  15  relates  to  transition                                                               
process, and Section 16 provides the effective date.                                                                            
                                                                                                                                
3:52:12 PM                                                                                                                    
CHAIR MICCICHE opened public testimony on SB 155.                                                                               
                                                                                                                                
3:52:33 PM                                                                                                                    
JAMES  STEVENS, representing  self, Anchorage,  Alaska, testified                                                               
in opposition  to Section 11 of  SB 155. He said  he attended the                                                               
hearing on  February 5th and  it raised some  unpleasant memories                                                               
of  experiences  he   has  had  in  his   dealings  with  mineral                                                               
exploration  companies. He  said that  in addition  to protecting                                                               
the  interests of  the  miners,  the bill  needs  to protect  the                                                               
interests  of Alaskan  businesses  that work  to support  mineral                                                               
exploration in  the state. For  the past 40  years he has  been a                                                               
proponent of rural economic  development and resource development                                                               
in rural Alaska.                                                                                                                
                                                                                                                                
He spoke in opposition to the  deletion in Section 11, on page 9,                                                               
line 2, which  read, "[A STATEMENT OF ANNUAL LABOR  THAT DOES NOT                                                               
ACCURATELY  SET  OUT  THE  ESSENTIAL  FACTS IS  VOID  AND  OF  NO                                                               
EFFECT.] He said  this language allows the  Department of Natural                                                               
Resources  (DNR) to  declare  labor null  and  void, even  though                                                               
Alaskan  businesses need  administrative remedies,  besides legal                                                               
remedies to  protect themselves  from unscrupulous  junior mining                                                               
companies.                                                                                                                      
                                                                                                                                
MR.  STEVENS  related his  experience  to  illustrate his  point.                                                               
About  eight or  nine years  ago,  his family  worked to  support                                                               
mineral exploration on  some claims north of  the Pebble deposit.                                                               
The  company his  business supported  amassed  about $350,000  in                                                               
bills under  Mr. Steven's name.  This included invoices  from air                                                               
taxis,  helicopters, air  freight companies,  laborers and  other                                                               
subcontractors  who  were  engaged  and  never  paid.  Yet,  this                                                               
company had the  audacity to list the value of  all that labor on                                                               
their affidavit  of annual  labor. When he  asked DNR  to enforce                                                               
that  portion of  existing law,  the department  said it  did not                                                               
have explicit authorization to do so.                                                                                           
                                                                                                                                
MR. STEVENS said  this event has followed him for  the past eight                                                               
years. The companies  not paid blame him, yet  the mining company                                                               
was  able to  retain its  mining claims  based on  its disclosure                                                               
that listed  labor, even  though it was  unpaid labor.  The state                                                               
should  address this  clearly and  explicitly. He  suggested that                                                               
the committee  should add language to  strengthen protections for                                                               
Alaska businesses  that support  this vital industry.  He thanked                                                               
the committee for the opportunity to testify.                                                                                   
                                                                                                                                
3:56:14 PM                                                                                                                    
CHAIR MICCICHE asked him to forward his written testimony.                                                                      
                                                                                                                                
3:56:42 PM                                                                                                                    
BRONK  JORGENSEN, Trustee,  40 Mile  Mining District,  and Chair,                                                               
Alaska Minerals  Commission, Tok, Alaska,  said he is  a lifelong                                                               
Alaskan. On behalf of the  Alaska Mineral Commission, he spoke in                                                               
support  of  SB  155  to  ensure that  mineral  tenure  laws  are                                                               
modernized. It  was one  of the priorities  of the  commission in                                                               
2019 and 2020. The commission's  role is to recommend strategy to                                                               
the legislature  and governor to mitigate  constraints on mineral                                                               
development in Alaska.                                                                                                          
                                                                                                                                
MR. JORGENSEN  also offered his  support for SB 155,  speaking as                                                               
trustee the 40 Mile Mining  District. He related that many placer                                                               
miners have  had significant issues  with annual  labor reporting                                                               
in what  are known  as fatal  flaws. He  characterized this  as a                                                               
complicated  issue,  one that  creates  great  stress for  placer                                                               
miners, whether or  not they lose their mining  claims. This bill                                                               
would  put labor  affidavit requirements  clearly in  statute. He                                                               
related his experiences with fatal  flaws, including one possible                                                               
error made  by the original  claim owner  in the early  1990s. In                                                               
2011,  he also  made an  error and  was lucky  that no  one over-                                                               
staked  his claims.  He  was able  to re-stake  his  ground at  a                                                               
significant  cost,  but   he  did  not  lose   his  claims.  Most                                                               
importantly, the  bill would  provide authority  for DNR  to send                                                               
notices to  those with mining  claims to correct  clerical errors                                                               
prior to receiving notices of abandonment.                                                                                      
                                                                                                                                
MR. JORGENSEN said SB 155 is  of utmost importance to the 40 Mile                                                               
Mining District. He urged the committee to pass the bill.                                                                       
                                                                                                                                
4:00:15 PM                                                                                                                    
DAVID WRIGHT,  representing self, Fairbanks, Alaska,  said he and                                                               
his partners  are small-scale  placer miners  who have  held many                                                               
mining claims. In 2010, 2011,  and 2012 two claims were auctioned                                                               
to other  companies. In 2013,  he discovered that  the affidavits                                                               
of annual labor  had fatal flaws for both projects.  Since no one                                                               
had over-staked  the claims,  he hired  a helicopter  to re-stake                                                               
one claim, and he re-staked the  other from the ground. This came                                                               
at great  expense, but it was  better than losing the  claims. He                                                               
said he supports SB 155 because  a clerical error should not be a                                                               
reason to lose  a claim. He agreed with  [Mr. Steven's] testimony                                                               
that some  mechanism should also protect  businesses. In closing,                                                               
he said he would  like to see SB 155 pass  to correct the problem                                                               
of clerical errors being a potential avenue to lose claims.                                                                     
                                                                                                                                
4:02:50 PM                                                                                                                    
CHAIR MICCICHE  said he  would keep public  testimony open  on SB
.                                                                                                                            
                                                                                                                                
[SB 155 was held in committee].