Legislature(2019 - 2020)SENATE FINANCE 532

03/13/2020 09:00 AM Senate FINANCE

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09:04:44 AM Start
09:06:00 AM SB155
10:10:19 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 155 EXPLORATION & MINING RIGHTS; ANNUAL LABOR TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 13, 2020                                                                                            
                         9:04 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:04:44 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair von Imhof called the Senate Finance Committee                                                                          
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Natasha von Imhof, Co-Chair                                                                                             
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Click Bishop                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Cathy Giessel; Chad Hutchison, Council for the                                                                          
Senate Majority.                                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Ramona Monroe, Mining Attorney, Alaska Miners Association;                                                                      
Greg Beischer, Alaska Miners Association; Deantha Crocket,                                                                      
Executive Director, Alaska Miners Association.                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 155    EXPLORATION & MINING RIGHTS; ANNUAL LABOR                                                                             
                                                                                                                                
          SB 155 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
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."                                                                                          
                                                                                                                                
9:06:00 AM                                                                                                                    
                                                                                                                                
SENATOR  CLICK BISHOP,  SPONSOR, discussed  the bill.  // He                                                                    
expressed  that  that bill  was  a  "due process"  bill  for                                                                    
miners. He  referenced Section  8, Article  XI of  the state                                                                    
constitution.                                                                                                                   
                                                                                                                                
9:07:38 AM                                                                                                                    
                                                                                                                                
CHAD HUTCHISON,  COUNCIL FOR THE SENATE  MAJORITY, addressed                                                                    
a  presentation entitled  "COMMITTEE SUBSTITUTE  FOR SPONSOR                                                                    
SUBSTITUTE FOR  SENATE BILL 155 (CSSSSB155(RES)),"  (copy on                                                                    
file). He  detailed that the  bill was a  multi-year process                                                                    
bill  that   had  been  in   the  works  since   the  Walker                                                                    
Administration.                                                                                                                 
                                                                                                                                
Senator Bishop  pointed out that the  current administration                                                                    
embraced  the concept  of the  bill and  had worked  closely                                                                    
with the sponsor.                                                                                                               
                                                                                                                                
9:08:45 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison looked at Slide  2, "This Bill is about Mining                                                                    
Rights":                                                                                                                        
                                                                                                                                
     ? Mining   A large  part of Alaska's past, present, and                                                                    
     future.                                                                                                                    
     ?  Alaska  Constitution Article  8,  Sec.  1    General                                                                    
     Policy                                                                                                                     
     ? Encourage development of the resources                                                                                   
     ?  Alaska Constitution  Article  8, Sec.  11    Mineral                                                                    
     Rights                                                                                                                     
     ?  Designed for  miners out  in the  field?not lawyers.                                                                    
     Pursuant                                                                                                                   
    to Governor Dunleavy's "Open for Business" Policy.                                                                          
     ? Based on "real world" experience.                                                                                        
                                                                                                                                
Mr. Hutchison noted  that there was an  increase in interest                                                                    
in integrated electrical systems in  the Lower 48 and Alaska                                                                    
could play  a part  creating conductors for  electricity. He                                                                    
said  that  the  American  Energy   Innovation  Act  had  an                                                                    
emphasis  on mineral  security and  that many  minerals were                                                                    
found  in  Alaska.  He  shared   that  mineral  rights  were                                                                    
established  at statehood  and were  based on  statements of                                                                    
annual  labor, paying  rents, royalties,  and fees.  He said                                                                    
that the bill  was based on real world  experience. He noted                                                                    
that helpful statistics were available.                                                                                         
                                                                                                                                
9:11:01 AM                                                                                                                    
                                                                                                                                
Senator Bishop  relayed that the  most recent update  he had                                                                    
received  indicated that  the  economic  benefits of  mining                                                                    
would be  realized by  the passage of  the bill.  He related                                                                    
that  $4 billion  had  been  spent in  the  state on  mining                                                                    
exploration since  1981. He said  that capital  was  waiting                                                                    
on  the sidelines   for the  legislation to  pass. He  noted                                                                    
that there were  over 600 small mines in the  state that had                                                                    
produced over  $105 million in  2016. He furthered  that the                                                                    
economic impact  to the state  from small  mining operations                                                                    
was considerable.                                                                                                               
                                                                                                                                
9:12:27 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked  to look at Slide 2.  He assumed that                                                                    
the photo on  the slide was a placer miner.  He wondered why                                                                    
he was mining in a three-piece suit.                                                                                            
                                                                                                                                
Senator Bishop thought the photograph  looked like the miner                                                                    
was on the beach in Nome.                                                                                                       
                                                                                                                                
Mr. Hutchison thought the attire was a sign of the time.                                                                        
                                                                                                                                
9:13:43 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison moved to Slide 3, "EXAMPLE":                                                                                      
                                                                                                                                
     ? Small miner in Alaska                                                                                                    
     ? Small typo in date.                                                                                                      
     ? Was forced to refile his claim.                                                                                          
     ? Tremendous risk! Top filing is an issue.                                                                                 
     ? Lost investment/equipment/time.                                                                                          
     ? Hurt production for Alaska.                                                                                              
                                                                                                                                
Mr. Hutchison  said that  the slide  focused on  due process                                                                    
and proper notice.                                                                                                              
                                                                                                                                
Senator Bishop noted  that the slide had been  shown to each                                                                    
office  as an  affidavit  of annual  labor.  He thought  the                                                                    
fourth  bullet was  the most  important. He  emphasized that                                                                    
the current  law did not  protect miners  rights  or provide                                                                    
for due process.                                                                                                                
                                                                                                                                
9:14:58 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison noted that the  typo referenced on Slide 3 was                                                                    
a  date,  which  constituted abandonment  and  placed  undue                                                                    
stress on the miner.                                                                                                            
                                                                                                                                
9:15:21 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison referenced Slide 4, "SECTIONS 1, 2, 3                                                                             
DEAL WITH QUALIFICATIONS":                                                                                                      
                                                                                                                                
     Section 1  AS 38.05.190(a) is amended -                                                                                    
     Qualifications                                                                                                             
     Adds that mining rights can be acquired by:                                                                                
          ? Conservators of minors or incapacitated adults;                                                                     
          ? Individuals at least 18 years of age or older                                                                       
          who  have  declared  their  intentions  to  become                                                                    
          citizens of the United States;                                                                                        
          ? Limited Liability Companies (LLCs);                                                                                 
          ? Registered trusts (with a qualified trustee)                                                                        
9:16:21 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof asked  about the  first bullet  point on                                                                    
the slide. She asked about the meaning of the bullet point.                                                                     
                                                                                                                                
Mr.  Hutchison   explained  that  guardianship   existed  in                                                                    
statute and allowed  for the guardian to  protect the miner.                                                                    
The  update,  he  thought,  would   apply  to  small  mining                                                                    
operations    such as  placer mines in  the Interior  of the                                                                    
Alaska.                                                                                                                         
                                                                                                                                
Co-Chair von  Imhof suggested that the  bullet point widened                                                                    
the net  for guardianship.  She addressed the  second bullet                                                                    
point  and  asked  whether  there   was  a  time  limit  for                                                                    
individuals  that had  declared their  intentions to  become                                                                    
citizens.                                                                                                                       
                                                                                                                                
Mr.  Hutchison  stated  there  was  no  time  limit  in  the                                                                    
legislation.  He offered  to provide  more information  at a                                                                    
later date.                                                                                                                     
                                                                                                                                
9:18:38 AM                                                                                                                    
                                                                                                                                
Mr.  Hutchison turned  to Slide  5, "SECTIONS  1, 2,  3 DEAL                                                                    
WITH QUALIFICATIONS (CONTINUED)":                                                                                               
                                                                                                                                
     Section 2  AS 38.05.190(b) is repealed and reenacted                                                                       
                                                                                                                                
     An unqualified person may  become qualified or transfer                                                                    
     the  interest  to a  qualified  person  within 90  days                                                                    
     after  the  department  sends written  notice.  If  the                                                                    
     defect is not  cured, the department may  make a "void"                                                                    
     declaration.                                                                                                               
                                                                                                                                
Mr. Hutchison  explained that the  intent was to  ensure the                                                                    
ability for [proper notice, due  process, and the ability to                                                                    
cure in a timely manner.                                                                                                        
                                                                                                                                
9:19:45 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison  considered Slide  6, "SECTIONS  1, 2,  3 DEAL                                                                    
WITH QUALIFICATIONS (CONTINUED)":                                                                                               
                                                                                                                                
     ?  Section  3  -  New   subsections  are  added  to  AS                                                                    
     38.05.190.  These are  new subsections  (c), (d),  (e),                                                                    
     (f), and (g).                                                                                                              
     ? (c)  - If the  department learns that  an unqualified                                                                    
     person has  acquired an interest, the  department shall                                                                    
     send written  notice by certified mail,  return receipt                                                                    
     requested, to the most recent address on file.                                                                             
     ?  Interest will  be void  unless cured  or transferred                                                                    
     within 90 days.                                                                                                            
     ? DNR may send an  additional copy of notice by regular                                                                    
     mail.                                                                                                                      
     ?  (d)    Failure to  comply will  result in  a "void."                                                                    
     However, there  shall be no  "void" declaration  if the                                                                    
     person becomes qualified.                                                                                                  
     ? (e)    An unqualified  person can cure  either before                                                                    
     or after  receiving notice. However,  a person  may not                                                                    
     cure if there has been  "void" declaration. If "void" a                                                                    
     person cannot re-stake for one year                                                                                        
                                                                                                                                
Mr.  Hutchison   thought  it  was  an   important  facet  of                                                                    
operations that proper notice be given to miners.                                                                               
                                                                                                                                
9:21:16 AM                                                                                                                    
                                                                                                                                
Senator Olson had experienced that  miners were not checking                                                                    
their mail regularly  because their work took  them far away                                                                    
from the post office, which  meant that they certainly would                                                                    
not be available to receive  a certified letter. He wondered                                                                    
how to  ensure a  person was  not taken  advantage of  by an                                                                    
unqualified person trying to file on top of them.                                                                               
                                                                                                                                
Mr. Hutchison  noted that the  subject was  being addressed,                                                                    
and the bill proposed to add an additional layer of notice.                                                                     
                                                                                                                                
9:22:31 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski asked  about Section  2 and  Section 3                                                                    
and asked about the definition of an "unqualified person."                                                                      
                                                                                                                                
Mr.  Hutchison  went  back  to  Slide  4.  He  replied  that                                                                    
examples would  be a miner  that did not have  a conservator                                                                    
or an incapacitated adult that did not have a conservator.                                                                      
                                                                                                                                
Senator  Wielechowski  wondered  how  such  a  person  could                                                                    
acquire an interest it they were unqualified.                                                                                   
                                                                                                                                
Mr. Hutchison responded that the  person could have received                                                                    
the claim through a will or  some way through a small family                                                                    
community.                                                                                                                      
                                                                                                                                
Co-Chair von  Imhof noted that there  were experts available                                                                    
to answer questions.                                                                                                            
                                                                                                                                
9:24:04 AM                                                                                                                    
                                                                                                                                
RAMONA  MONROE, MINING  ATTORNEY, ALASKA  MINERS ASSOCIATION                                                                    
(via teleconference),  explained that a miner  might acquire                                                                    
a  mining interest  without being  qualified. She  said that                                                                    
under current  law, a limited  lability company  (LLC) would                                                                    
not be qualified. She related  that some people might not be                                                                    
aware of  that fact  and transfer  their mining  interest to                                                                    
LLCs  and the  question was  whether that  invalidated their                                                                    
interest.  She  stated that  there  were  things that  could                                                                    
happen  that would  cause someone  to acquire  the interests                                                                    
before they became qualified.                                                                                                   
                                                                                                                                
9:25:42 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison displayed Slide 7, "SECTION 3 - CONTINUED                                                                         
                                                                                                                                
      ? (f)    If the  unqualified person fails to  cure the                                                                    
     defect  within  90  days   after  the  department  sent                                                                    
     written   notice,  the   department  may   declare  the                                                                    
     exploration  or  mining  interest "void"  and  open  to                                                                    
     location.  There shall  be no  third-party location  or                                                                    
     judicial action within those 90 days.                                                                                      
     ? (g)   "qualified to  do business in this state" means                                                                    
     holding a certificate issued by the                                                                                        
     Commissioner  of  Commerce,   Community,  and  Economic                                                                    
     Development (necessary to do business in the state).                                                                       
                                                                                                                                
9:26:52 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison highlighted Slide 8, "SECTIONS 4,5 DEAL WITH                                                                      
MINING CLAIMS":                                                                                                                 
                                                                                                                                
     ?  Section  4     AS 38.05.195(b)     Establishment  of                                                                    
     deposit  rights  when  using  the  Meridian,  Township,                                                                    
     Range,  Section, and  Claim  system  (MTRSC). How  does                                                                    
     MTRSC  work? Location  of a  claim is  based on  ground                                                                    
     locations of  quarter sections, or, quarter  by quarter                                                                    
     sections of a township  on a rectangular survey system.                                                                    
     The locator marks the claim,  using the MTRSC system in                                                                    
     good faith.  The corners  are marked  on the  ground of                                                                    
     the claim,  in the event  of a conflict. The  system is                                                                    
     approved by the commissioner.                                                                                              
     ?  Adds:  a  valid MTRSC  system  location  establishes                                                                    
     rights to deposits within the  section that are open to                                                                    
     claim staking at the time of location.                                                                                     
                                                                                                                                
9:27:27 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison looked  at Slide 9, which  showed a photograph                                                                    
of a  State Mining Claim Location  Certificate. He described                                                                    
the  legal  description  of  the   claim  as  shown  on  the                                                                    
certificate, which showed a detailed computer sketch.                                                                           
                                                                                                                                
9:28:07 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison addressed Slide 10, "SECTIONS 4,5 DEAL WITH                                                                       
MINING CLAIMS":                                                                                                                 
                                                                                                                                
     ? Section  5   AS  38.05.195(d)   Changes  in locations                                                                    
     and amended notices.                                                                                                       
     ?  Eliminated unnecessary  language  and  focused on  a                                                                    
     simple procedure outlined in AS                                                                                            
     38.05.200.  Notices  can  be amended  at  any  time  to                                                                    
     correspond with  the amended locations, if  it does not                                                                    
     interfere with  the rights of  others. If there  was an                                                                    
     error  in the  notice  or certificate  of location,  an                                                                    
     amended certificate  of location  shall be  recorded in                                                                    
     the same manner and with the same effect as the                                                                            
     original certificate.                                                                                                      
                                                                                                                                
9:28:50 AM                                                                                                                    
                                                                                                                                
Mr.  Hutchison advanced  to Slide  11, "AFFIDAVIT  OF ANNUAL                                                                    
LABOR,"  which  showed  an example  of  what  the  affidavit                                                                    
looked  like. He  explained  that  the affidavits  sometimes                                                                    
contained  handwritten  notes  describing annual  labor.  He                                                                    
described the various fields on the document.                                                                                   
                                                                                                                                
9:30:16 AM                                                                                                                    
                                                                                                                                
Senator  Olson  considered  the labor  affidavit  and  asked                                                                    
whether the  form would  be filled out  by minors  working a                                                                    
claim. He asked about protection through child labor laws.                                                                      
                                                                                                                                
Mr. Hutchison stated that the labor would be varied.                                                                            
                                                                                                                                
Senator  Bishop stated  there were  some  exemptions in  the                                                                    
Department  of  Labor  and Workforce  Development,  such  as                                                                    
overtime  rates.  He  offered to  provide  more  information                                                                    
regarding the  child labor topic  after consulting  with the                                                                    
department. He spoke  to money spent on a  claim, the labor,                                                                    
how annual labor was calculated.                                                                                                
                                                                                                                                
9:32:46 AM                                                                                                                    
                                                                                                                                
Senator  Olson  reiterated  his concern  about  child  labor                                                                    
issues,  and  how to  ensure  that  miners could  work  with                                                                    
families without getting in trouble.                                                                                            
                                                                                                                                
Senator Bishop deferred to the Department of Labor.                                                                             
                                                                                                                                
Co-Chair von  Imhof discussed  guidelines and  limits around                                                                    
work on fishing  boats. She thought there  were common sense                                                                    
guidelines that could dictate child labor.                                                                                      
                                                                                                                                
Senator   Olson  thought   that   the  bureaucratic   issues                                                                    
surrounding  mining  claims  clearly already  lacked  common                                                                    
sense.                                                                                                                          
                                                                                                                                
Co-Chair von Imhof  thought the topic might  be addressed by                                                                    
an invited testifier.                                                                                                           
                                                                                                                                
9:34:43 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison looked at Slide 12, "SECTIONS 6,7,8,9 DEAL                                                                        
WITH ANNUAL LABOR":                                                                                                             
                                                                                                                                
     ? Section 6      AS 38.05.210(a) - Outlines clear                                                                          
     guidelines for performance of annual labor                                                                                 
     Performing annual labor means that the miner is                                                                            
     working the ground and trying to produce.                                                                                  
                                                                                                                                
     ? Added:                                                                                                                   
          ? Annual labor performance may include adjacent                                                                       
          federal/private mineral interests held in common.                                                                     
               ? May include adjacent mineral interests.                                                                        
               ? Expenditures may be made on or for the                                                                         
               benefit   of   any   one   claim,   leasehold                                                                    
               location, etc.                                                                                                   
          ? Labor shall be performed at the following                                                                           
          rates:                                                                                                                
               ? $100 for each claim;                                                                                           
               ? $400 for each quarter section MTRSC claim                                                                      
               ? $100 for each partial or whole 40 acres of                                                                     
               each mining claim not established using the                                                                      
               MTRSC system.                                                                                                    
          ? For not more than five consecutive years, the                                                                       
          claim holder may make a cash payment instead of                                                                       
          performing annual labor.                                                                                              
                                                                                                                                
Mr. Hutchison reiterated that the intent of the changes in                                                                      
statute was to increase mining production in the state.                                                                         
                                                                                                                                
9:36:18 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison showed Slide 13, "SECTIONS 6,7,8,9 DEAL WITH                                                                      
ANNUAL LABOR":                                                                                                                  
                                                                                                                                
     Section 7      AS 38.05.210(b) - Clarifies the                                                                             
     information found in a statement of annual labor                                                                           
     ? Added:                                                                                                                   
          ? Individual signs the statement to certify that                                                                      
          it is true and correct to the best of the                                                                             
          individual's knowledge.                                                                                               
          ? The statement must include:                                                                                         
     ? The assessment work year                                                                                                 
     ? The name and land administration number assigned by                                                                      
     the department                                                                                                             
     ? Every meridian, township, range, and section in                                                                          
     which the mining claim is located                                                                                          
     ? The recording district                                                                                                   
     ? The total amount of work required                                                                                        
     ? A description of the labor performed                                                                                     
     ? The  value of  the labor performed  (including excess                                                                    
     labor value from previous year)                                                                                            
     ? The name and mailing  address of the owner designated                                                                    
     to receive notices                                                                                                         
                                                                                                                                
9:36:40 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison referenced Slide 14, "SECTIONS 6,7,8,9 DEAL                                                                       
WITH ANNUAL LABOR":                                                                                                             
                                                                                                                                
      ? Section 8   AS  38.05.210(c) - Allows for statements                                                                    
     of annual  labor to  be corrected  at any  time (before                                                                    
     "invalid" declaration)                                                                                                     
     ? Added:                                                                                                                   
          ? The statement of  annual labor, whether recorded                                                                    
          before or  after the effective  date of  this Act,                                                                    
          may be corrected                                                                                                      
         or amended before the 90-day cure period.                                                                              
          ? The  corrected statement  of annual  labor shall                                                                    
          be recorded like the original.                                                                                        
          ?  A  corrected  statement   may  not  be  applied                                                                    
          against  labor  required  to   be  done  during  a                                                                    
          subsequent year.                                                                                                      
          ? A  corrected statement  shall be recorded  in 90                                                                    
          days.                                                                                                                 
     ? Removed:                                                                                                                 
          ?  2-year threshold  has  been  removed. In  other                                                                    
          words: There  had to be  a correction  within two-                                                                    
          years.                                                                                                                
                                                                                                                                
9:37:49 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison turned to Slide 15, "SECTIONS 6,7,8,9 DEAL                                                                        
WITH ANNUAL LABOR":                                                                                                             
                                                                                                                                
     ?  Section 9    AS  38.05.210    Added new  subsections                                                                    
     (e), (f), (g), (h), (i), (j), and (k)                                                                                      
     ?  (e)    A single  statement  of annual  labor may  be                                                                    
     recorded  for  the  benefit of  more  than  one  mining                                                                    
     claim.                                                                                                                     
     ? (f) - A timely  recorded statement of annual labor is                                                                    
     prima facia evidence of performance.                                                                                       
     ? (g)  The department shall  not declare a mining claim                                                                    
     invalid based on a deficiency  in a statement of annual                                                                    
     labor until 90 days after written notice.                                                                                  
     ? Certified mail                                                                                                           
     ? May send additional copy sent via regular mail                                                                           
     ? (h)    If  person fails  to correct  in 90  days, the                                                                    
     department  may make  a "invalid"  declaration. No  3rd                                                                    
     Party  location  or  judicial action  within  those  90                                                                    
     days.                                                                                                                      
     ? (i) - A decision  to declare a location invalid based                                                                    
     on a deficiency in a  statement of annual labor must be                                                                    
     issued no later  than five years after the  date of the                                                                    
     annual labor is recorded.                                                                                                  
     ? (j)  - Failure of  a co-owner to contribute  shall be                                                                    
     treated in accordance with AS 38.05.215-AS 38.05.235.                                                                      
                                                                                                                                
Mr. Hutchison considered Slide 16, "AS 38.05.215-AS                                                                             
38.05.235 WHAT DO THOSE STATUTES SAY?":                                                                                         
                                                                                                                                
      ?  A  non-contributing  co-owner may  be  required  to                                                                    
     forfeit  their interest  to the  other co-owner,  after                                                                    
     direct written  notice or  90 days  public notice  in a                                                                    
     local  newspaper of  record from  the contributing  co-                                                                    
     owner.                                                                                                                     
     ?  If a  forfeiture occurs,  within 120  days, the  co-                                                                    
     owner  that  claims  forfeiture  shall  record  in  the                                                                    
     recorder's office where the claim is located:                                                                              
     ? Copy of notice                                                                                                           
     ? Affidavit of service                                                                                                     
     ? Affidavit of co-owner                                                                                                    
     ?  Must  include  that delinquent  amount  has  not  be                                                                    
     rectified.                                                                                                                 
     ? If  a lienholder on  an unpatented mining  claim, the                                                                    
     lienholder   may  perform   annual  labor   to  prevent                                                                    
     forfeiture.                                                                                                                
     ? Notice must be sent to the address of owner.                                                                             
     ?  Lienholder   work  shall  be  reimbursed.   Must  be                                                                    
     properly recorded 90 within completion.                                                                                    
     ?  A lawsuit  may  be  filed to  enforce  a lien  after                                                                    
     notice of the claim of lien.                                                                                               
     ? A lien  for performance of annual labor  must be done                                                                    
     in good faith to protect interests.                                                                                        
                                                                                                                                
9:40:27 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison discussed the slide.                                                                                              
                                                                                                                                
9:40:43 AM                                                                                                                    
                                                                                                                                
Senator Bishop  interjected that the department  did look at                                                                    
the  affidavits   every  time  a  minor   submitted  for  an                                                                    
application. He  thought the bill  would allow the  miner to                                                                    
cure the issue and retain their ground.                                                                                         
                                                                                                                                
9:41:18 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison displayed Slide 17, "SECTION 10 DEFINES                                                                           
"LABOR"":                                                                                                                       
                                                                                                                                
     ? Section 10 Labor includes:                                                                                               
     ?  Work performed  in  good faith  on  a mining  claim,                                                                    
     leasehold location,  or mining  lease that  is directly                                                                    
     related  to  exploring  for, developing,  or  producing                                                                    
     minerals, including:                                                                                                       
    ? Excavating, tunneling, drilling, or clearing land                                                                         
     ?  Constructing  or   maintaining  roads,  trails,  and                                                                    
     landing strips                                                                                                             
     ? Extracting or producing ore                                                                                              
                                                                                                                                
9:41:36 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison highlighted Slide 18, " "LABOR" CONTINUED":                                                                       
                                                                                                                                
     ?  Performing   metallurgical  analyses,  environmental                                                                    
     studies,  economic  feasibility  studies,  engineering,                                                                    
     and permitting                                                                                                             
     ?  Constructing  settling  ponds, water  supplies,  and                                                                    
     other utilities                                                                                                            
     ? Providing worker housing                                                                                                 
     ?   Performing    reclamation   activities    under   a                                                                    
     reclamation plan                                                                                                           
     ? Transporting  workers and equipment  in the  state to                                                                    
     or from a  mining site (not to exceed 50%  of the total                                                                    
     value of  labor in  the statement  of annual  labor for                                                                    
     the assessment year)                                                                                                       
     ?  Conducting  a geological  or  airborne  survey by  a                                                                    
     qualified  expert and  verified  by  a detailed  report                                                                    
     that sets out:                                                                                                             
     ? The location of the survey                                                                                               
     ? The nature, extent, and cost of the survey                                                                               
     ?  The name,  address, and  professional background  of                                                                    
     the person conducting the work                                                                                             
                                                                                                                                
9:42:20 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison looked at Slide 19, "SECTION 11 DEFINES                                                                           
ABANDONMENT":                                                                                                                   
                                                                                                                                
     Section  11     AS  38.05.265(a) and  (b)  -  Clarifies                                                                    
     "abandonment"                                                                                                              
     ? (a) -  Failure to perform labor  or make improvements                                                                    
     or make  a payment  in lieu of  labor, timely  record a                                                                    
     certificate of  location or statement of  annual labor,                                                                    
     timely pay  annual rental, or  timely pay  any required                                                                    
     production royalties constitutes abandonment.                                                                              
     ? A locator  may not relocate the claim  until one year                                                                    
     after abandonment.                                                                                                         
     ? Removed:                                                                                                                 
     ? A statement of annual  labor that does not accurately                                                                    
    set out essential facts is void and has no effect.                                                                          
     ?  If  an  annual  rental   or  a  royalty  payment  is                                                                    
     deficient  but is  otherwise  timely paid,  abandonment                                                                    
     does  not result  if full  payment is  made within  the                                                                    
     period  described in  the  deficiency  notice from  the                                                                    
     department   or  30   days  after   a  final   judgment                                                                    
     establishing the  amount due (if the  deficiency amount                                                                    
     due was contested).                                                                                                        
                                                                                                                                
Mr. Hutchison  noted that  if there was  no labor,  no rent,                                                                    
and no royalty  payments then the claim  could be abandoned.                                                                    
He pointed out the removal of  the harsh penalty for a small                                                                    
typo.                                                                                                                           
                                                                                                                                
9:43:46 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison addressed Slide 20, " SECTION 11 CONTINUED":                                                                      
                                                                                                                                
     ? (b)    Added "rents and royalties."  The language now                                                                    
     states that  unless another person  has located  on the                                                                    
     abandoned claim  or leasehold location (or  the area is                                                                    
     closed  to mineral  location), a  person  may cure  the                                                                    
     failure to record  or pay rents or  royalties (that led                                                                    
     to abandonment) by:                                                                                                        
     ?  Properly recording  the certificate  of location  or                                                                    
     statement of annual labor;                                                                                                 
     ? Paying any required rental or royalties; and                                                                             
     ? Paying the penalty equal  to the annual rent from the                                                                    
     mining claim or leasehold location.                                                                                        
                                                                                                                                
                                                                                                                                
9:44:03 AM                                                                                                                    
                                                                                                                                
Mr.  Hutchison advanced  to  Slide  21, "  SECTION  12    AS                                                                    
38.05.270 - TRANSFERS":                                                                                                         
                                                                                                                                
     ? Clarified  that the evidence  of the sale,  lease, or                                                                    
     other  transfer  of  mining  property  or  interest  in                                                                    
     mining  property be  recorded, but  eliminated existing                                                                    
     language  which stated  "OR SHALL  BE  APPROVED BY  THE                                                                    
     DIRECTOR  IN COMPLIANCE  WITH SUCH  REGULATIONS AS  THE                                                                    
     COMMISSIONER MAY ADOPT].                                                                                                   
     ?  Why?  The  removed  language  was  too  vague.  What                                                                    
     "regulations?" Clarity and  a "streamlined process" was                                                                    
     sought for the miners.                                                                                                     
                                                                                                                                
9:45:02 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison  looked at  Slide 22,  "SECTION 13  DEALS WITH                                                                    
RECOGNITION OF LOCATIONS":                                                                                                      
                                                                                                                                
     ?Section 13   AS 38.05.275(a)  - Ensures that mining on                                                                    
     state  selected  land located  on  or  after an  active                                                                    
     unpatented  federal mining  claim may  be located  only                                                                    
     with  recorded  permission  of the  unpatented  federal                                                                    
     mining claim holder.                                                                                                       
                                                                                                                                
Mr.  Hutchison  stated  the  section   of  the  bill  was  a                                                                    
clarification provision.                                                                                                        
                                                                                                                                
9:45:34 AM                                                                                                                    
                                                                                                                                
Mr. Hutchison spoke to Slide  23, "SECTION 14   AS 38.05.283                                                                    
  DEPARTMENTAL REVIEW":                                                                                                         
                                                                                                                                
     ? DNR is not required  to go back and unilaterally look                                                                    
     though their files for "compliance issues."                                                                                
                                                                                                                                
Mr. Hutchison detailed  that Section 14 was  added in Senate                                                                    
Resources Committee  and stressed that DNR  was not required                                                                    
to go  back through  their files  to search  for requirement                                                                    
issues.                                                                                                                         
                                                                                                                                
9:45:58 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski  was concerned  with Section 14  of the                                                                    
bill.  He thought  the section  gave broad  latitude to  the                                                                    
department  to  ignore laws.  He  gave  the example  of  the                                                                    
requirement in  Section 3 that  the department   shall  send                                                                    
notice but then Section 14 removed the requirement.                                                                             
Mr. Hutchison thought  Senator Wielechowski's instincts were                                                                    
correct. He elaborated that if  a third party came forward                                                                      
this  would be  a different  scenario  but left  to its  own                                                                    
devices  the  department  was  not  required  to  look  back                                                                    
through files without cause.                                                                                                    
                                                                                                                                
9:47:38 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski   maintained  his  concern   with  the                                                                    
section.  He thought  the section  could lead  to harsh  due                                                                    
process issues. He urged more thought on the section.                                                                           
                                                                                                                                
Mr.  Hutchison thought  the sponsor  was open  to clarifying                                                                    
language in the section.                                                                                                        
                                                                                                                                
Senator Bishop  thought Senator  Wielechowski was  raising a                                                                    
good point.  He explained  that a claim  application process                                                                    
was rigorous.                                                                                                                   
                                                                                                                                
9:49:01 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof suggested  Senator Wielechowski work with                                                                    
the bill sponsor and reference  the relevant conversation in                                                                    
the Senate Resources Committee.                                                                                                 
                                                                                                                                
9:49:20 AM                                                                                                                    
                                                                                                                                
Mr.  Hutchison referenced  Slide  24, "SECTIONS  15, 16,  17                                                                    
DEAL  WITH APPLICABILITY,  THE TRANSITION  PROCESS, AND  THE                                                                    
EFFECTIVE DATE":                                                                                                                
                                                                                                                                
     Section 15 - Clarifies applicability                                                                                       
     Section 16 - Ensures a smooth transition process (for                                                                      
     regulations).                                                                                                              
     Section 17  Immediate effective date.                                                                                      
                                                                                                                                
Mr. Hutchison showed Slide 25, "Questions?"                                                                                     
                                                                                                                                
Senator  Bishop  addressed  Senator Olson's  question  about                                                                    
child labor  under AS  23.10.330 He  noted that  child labor                                                                    
law  has an  exemption that  allows a  child to  work for  a                                                                    
company owned by the parent,  when supervised by the parent,                                                                    
this applies to all businesses including mining claims.                                                                         
                                                                                                                                
9:50:44 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof solicited further comments or questions.                                                                     
Senator   Olson   mentioned  controversy   surrounding   the                                                                    
proposed Pebble Mine. He cited  that most recently there was                                                                    
a graphite  mine near  Nome. He  mentioned a  company called                                                                    
the  Rivers of  Gold  that  was planning  on  mining on  the                                                                    
Solomon River  and in  Golovin Bay. He  asked what  the bill                                                                    
would do  to allay the  concerns of the  resident population                                                                    
of that  area that  the mining  operation would  not disrupt                                                                    
their way of life.                                                                                                              
                                                                                                                                
Senator  Bishop   thought  there  was  quite   a  regulatory                                                                    
permitting process any mine had  to go through. He mentioned                                                                    
the graphite  deposit north of  Nome, which had  been slowed                                                                    
in  its permitting  process due  to concerns  voiced by  the                                                                    
locals in  that area.  Residents had expressed  concerns and                                                                    
now  the  department  was doing  due  diligence  with  local                                                                    
tribes. He stated  all the bill would  protect smaller mines                                                                    
and ensure that capital flowed into the state.                                                                                  
                                                                                                                                
Co-Chair von Imhof solicited further  questions for the bill                                                                    
sponsor.                                                                                                                        
                                                                                                                                
Co-Chair von Imhof  asked if Senator Olson  wanted to pursue                                                                    
the topic of child labor.                                                                                                       
                                                                                                                                
Senator Olson  thought the cited  statute had spoken  to his                                                                    
concern.                                                                                                                        
                                                                                                                                
9:54:16 AM                                                                                                                    
                                                                                                                                
Ms.  Monroe expressed  that she  had worked  in a  volunteer                                                                    
capacity  with the  Alaska  Miners  Association for  several                                                                    
years. She  said that the  question of mineral  tenure arose                                                                    
frequently  in her  practice. She  thought  there were  many                                                                    
issues that were  not addressed in law that  the bill helped                                                                    
to clarify.                                                                                                                     
                                                                                                                                
9:55:35 AM                                                                                                                    
                                                                                                                                
GREG    BEISCHER,    ALASKA    MINERS    ASSOCIATION    (via                                                                    
teleconference), spoke in support of  the bill. He stated he                                                                    
was president  and CEO  of Millrock  Resources Inc.  He said                                                                    
that he hoped  to discover a great treasure  like the Greens                                                                    
Creek  Mine.  He  said   that  international  partners  were                                                                    
invited  to participate  in mineral  investment to  find new                                                                    
mines  in  the future.  He  said  that mineral  titles  were                                                                    
paramount to the work. He  lamented that other countries did                                                                    
not always have  titles. He opined that  security of mineral                                                                    
title was  not clear in  the state  and that the  bill would                                                                    
correct  that  issue.  He  provided  some  examples  of  the                                                                    
importance of clear  mineral title to claims.  He shared the                                                                    
ways that his  company had lost their claims  due to unclear                                                                    
mineral title.                                                                                                                  
                                                                                                                                
9:59:41 AM                                                                                                                    
                                                                                                                                
Mr.  Beischer  continued  his   remarks.  He  stressed  that                                                                    
certainty  of title  was critical  to mining  work. He  said                                                                    
that attracting  capital to the state  was difficult because                                                                    
investors  were  wary of  the  unclear  claim ownership  and                                                                    
mineral title. He encouraged passage of the legislation.                                                                        
                                                                                                                                
10:02:00 AM                                                                                                                   
                                                                                                                                
DEANTHA   CROCKET,   EXECUTIVE   DIRECTOR,   ALASKA   MINERS                                                                    
ASSOCIATION  (via teleconference),  testified in  support of                                                                    
the  bill.  The  association  had   been  working  with  the                                                                    
Department  of   Natural  Resources  to  refine   the  final                                                                    
language  of the  bill.  The legislation  was  a product  of                                                                    
several  hours of  working with  all  involved parties.  She                                                                    
wanted  to  address  Senator  Olson's  question  about  mail                                                                    
distribution.  The  90 days  was  the  timeframe settled  on                                                                    
after extensive conversation about  what was reasonable when                                                                    
considering all  factors. She  contended that  miners should                                                                    
take  some responsibility  and have  some accountability  in                                                                    
making sure that their affairs were in order.                                                                                   
                                                                                                                                
10:05:23 AM                                                                                                                   
                                                                                                                                
Co-Chair   von  Imhof   thanked   the   testifier  for   the                                                                    
information.                                                                                                                    
                                                                                                                                
Ms.  Crocket continued  to  address  various questions  from                                                                    
committee members. She  related that care had  been taken to                                                                    
not  put  additional burden  on  DNR  and she  reminded  the                                                                    
committee  that  the  department  had  suffered  significant                                                                    
budget cuts over  the previous years. She  stressed that DNR                                                                    
should  not be  required to  arbitrarily review  every labor                                                                    
affidavit as they did not have the resources to so.                                                                             
                                                                                                                                
Co-Chair von  Imhof thanked her  for bringing the  issue up,                                                                    
as Senator Wielechowski  would work with the  sponsor on the                                                                    
issue.                                                                                                                          
                                                                                                                                
Ms. Crockett thanked  the committee for taking  up the issue                                                                    
in the legislation. She indicated  that there was nothing in                                                                    
the bill that took up environmental issues.                                                                                     
                                                                                                                                
10:07:46 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof OPENED Public Testimony.                                                                                     
                                                                                                                                
10:07:56 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof CLOSED Public Testimony.                                                                                     
                                                                                                                                
10:08:05 AM                                                                                                                   
                                                                                                                                
Senator  Bishop  addressed  the  fiscal  note  with  an  OMB                                                                    
component  number  3002.  He  pointed  to  the  second  page                                                                    
regarding the DGF fund request:                                                                                                 
                                                                                                                                
     To  implement  this  act DNR  will  need  2  additional                                                                    
     Natural   Resource    Specialist   I's    to   research                                                                    
     deficiencies in qualifications  of mining right holders                                                                    
     and   annual   labor  affidavits,   review   deficiency                                                                    
     assertions, issue  written notices,  adjudicate whether                                                                    
     cures  to  these  deficiencies have  been  made,  issue                                                                    
     decisions including whether or  not a mining rights are                                                                    
     voided or invalidated.                                                                                                     
                                                                                                                                
     As the bill  will require DNR to  adopt new regulations                                                                    
     and assume additional  obligations, DNR anticipates the                                                                    
     bill will require the following expenditures.                                                                              
                                                                                                                                
     Personnel Cost- $148.7 total annually                                                                                      
                                                                                                                                
Co-Chair  von Imhof  indicated that  a person  from DNR  was                                                                    
available  for  questions. She  would  be  setting the  bill                                                                    
aside.                                                                                                                          
                                                                                                                                
Co-Chair  von Imhof  reviewed the  agenda for  the following                                                                    
Monday meeting at 9:00 a.m.                                                                                                     
                                                                                                                                
SB  155  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
10:10:19 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:10 a.m.                                                                                         

Document Name Date/Time Subjects
SB 155 Presentation v. G 2.24.2020.pdf SFIN 3/13/2020 9:00:00 AM
SB 155
SB 155 Sectional v. G 2.24.2020.pdf SFIN 3/13/2020 9:00:00 AM
SB 155
SB 115 Explanation of Changes v. G 2.24.2020.pdf SFIN 3/13/2020 9:00:00 AM
SB 115
SB 155 Sponsor Statement v. G 2.24.2020.pdf SFIN 3/13/2020 9:00:00 AM
SB 155
SB 155 - Support Testimony Provided by Sponsor 2.28.2020.pdf SFIN 3/13/2020 9:00:00 AM
SB 155