02/19/2014 01:00 PM House RESOURCES

          HB 135-PETERSVILLE RECREATIONAL MINING AREA                                                                       
                                                                                                                                
1:32:46 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SADDLER  announced that  the  first  order of  business                                                               
would be HOUSE BILL NO. 135,  "An Act relating to the reservation                                                               
of  certain mining  claims from  all uses  incompatible with  the                                                               
purposes  for establishing  the  Petersville Recreational  Mining                                                               
Area."                                                                                                                          
                                                                                                                                
1:32:56 PM                                                                                                                    
                                                                                                                                
JIM POUND, Staff,  Representative Wes Keller, on  behalf of prime                                                               
sponsor of  HB 135, stated  that HB 135  will allow the  state to                                                               
fulfill an agreement  it made back in the 1990s  with a potential                                                               
business owner.  This bill would  allow the state to obtain about                                                               
200  acres  of  federal  land  it  has  previously  selected  and                                                               
determine the  land use as  most likely recreational mining.   He                                                               
said this area  [in the Petersville Recreational  Mining Area] is                                                               
currently  being "somewhat"  managed by  the stakeholder  who has                                                               
long ago developed historic sites,  buildings, and equipment from                                                               
mining.    This bill  could  help  the [Petersville  Recreational                                                               
Mining  Area] become  the  home  of a  mining  museum and  create                                                               
opportunities  for  locals  and  tourists  to  try  gold  panning                                                               
without worrying about  being on someone else's claim.   He asked                                                               
members for their support for HB 135.                                                                                           
                                                                                                                                
1:34:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON understood  that if HB 135  passes it would                                                               
then  be up  to  the  Department of  Natural  Resources (DNR)  to                                                               
determine  the  allowable  land  uses.    He  asked  for  further                                                               
clarification  since he  interprets  the bill  to  mean it  would                                                               
reserve   the  land   from  all   uses   incompatible  with   the                                                               
recreational mining district.                                                                                                   
                                                                                                                                
BRENT  GOODRUM, Director,  Central  Office,  Division of  Mining,                                                               
Land  and Water,  Department of  Natural Resources  (DNR), stated                                                               
that  HB 135  would remove  a parcel  of land  from the  southern                                                               
portion  of  the  Petersville  Recreational   Mining  Area.    He                                                               
explained that House  Bill 46 passed the legislature  in May 1997                                                               
and was  signed into law  creating a recreational mining  area in                                                               
Petersville  in  the upper  Susitna  Valley.   He  described  the                                                               
northern Petersville Recreational Mining  Area, which consists of                                                               
approximately 280  acres and is  currently open and  active under                                                               
state   ownership;  however,   the   southern   portion  of   the                                                               
aforementioned mining  area consists  of approximately  220 acres                                                               
of  state-selected land  that is  still under  federal ownership.                                                               
This bill would seek to  specifically remove the southern portion                                                               
from the Petersville Recreational Mining Area.                                                                                  
                                                                                                                                
1:36:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON referred  to [page  1, line  5, subsection                                                               
(f),]  which read,  "The  vacant  and unappropriated  state-owned                                                               
land  and water  and the  state land  and water  acquired in  the                                                               
future  that lie  within the  following  described mining  claims                                                               
described in United  States Mineral Survey No.  2384 are reserved                                                               
from all uses incompatible with  the purposes of this section and                                                               
are assigned  to the  department for  control and  management [as                                                               
the  Petersville Recreational  Mining  Area:....]"   He said  the                                                               
title  reads, "An  Act  relating to  the  reservation of  certain                                                               
mining claims  from all uses  incompatible with the  purposes for                                                               
establishing  the  Petersville  Recreational Mining  Area."    He                                                               
asked for further clarification on the bill.                                                                                    
                                                                                                                                
MR. GOODRUM responded that this  language relates to the creation                                                               
of the  Petersville Recreational  Mining Area  but the  aspect he                                                               
will focus on would remove sections  of land from the mining area                                                               
that   comprises  the   southern  portion   of  the   Petersville                                                               
Recreational Mining Area.                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON said he understood  and thanked Mr. Goodrum                                                               
for the clarification.                                                                                                          
                                                                                                                                
1:37:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SADDLER noted  the committee  is working  on Version  A                                                               
[the original version] of HB 135.                                                                                               
                                                                                                                                
CO-CHAIR SADDLER opened public testimony on HB 135.                                                                             
                                                                                                                                
1:38:39 PM                                                                                                                    
                                                                                                                                
MICHELE  STEVENS  stated  she  was   a  lifelong  Alaskan.    She                                                               
summarized her written  testimony [in members' packets].   In the                                                               
1990s she  gifted about 500 acres  of state mining claims  to the                                                               
state  with  the  hope  that  she would  be  able  to  operate  a                                                               
recreational mining operation  on the site.  At the  time, it was                                                               
illegal  to conduct  any recreational  mining  on mining  claims.                                                               
Although House Bill 46 was  initiated and passed the legislature,                                                               
the Department  of Natural Resources  (DNR), Division  of Mining,                                                               
Land and Water  was not able to move forward  with the agreement.                                                               
Thus,  HB 135  would  remove the  parcel in  order  to allow  the                                                               
mining claims  to revert back  to her in  hopes that she  will be                                                               
able to  proceed forward with  a new  mechanism - a  mining lease                                                               
from  the  State of  Alaska  that  would  allow her  to  [conduct                                                               
recreational mining  activities].   Same questions arose  in 2012                                                               
on whether the land would revert  back to her, which was remedied                                                               
by placing amendments on the  Peters Creek's claims.  She related                                                               
her  understanding that  if HB  135 passes  the land  will revert                                                               
back to her  and that she will  be able to move  forward with the                                                               
aforementioned state's agreement in a different manner.                                                                         
                                                                                                                                
1:41:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER  related his understanding that  this bill would                                                               
mean  all  parties  could  fulfill the  intent  of  the  previous                                                               
agreement made [in  the 1990s].  Thus, this bill  would clear the                                                               
path forward to reach the original intent, he said.                                                                             
                                                                                                                                
MS. STEVENS answered yes.  She said  this bill would put her on a                                                               
different path.   She remarked  that Steve Hirshbah  has "blazed"                                                               
some  trails  by working  with  the  DNR  on  land leases.    She                                                               
anticipated  that  under the  bill  she  would  be able  to  move                                                               
forward with the state [on the aforementioned agreement].                                                                       
                                                                                                                                
1:42:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON asked for further  clarification on the                                                               
zero fiscal note.   She wondered whether the state  would need to                                                               
spend  money  or if  Ms.  Stevens  is requesting  any  additional                                                               
funding.                                                                                                                        
                                                                                                                                
MS.  STEVENS answered  that  the  State of  Alaska  would not  be                                                               
putting any  money into the  process.  Instead, she  thought that                                                               
the state  would likely gain  revenue by allowing her  to operate                                                               
her business.                                                                                                                   
                                                                                                                                
1:42:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER  asked her to  outline her hopes  and intentions                                                               
for recreational mining activity in the Petersville area.                                                                       
                                                                                                                                
MS.  STEVENS responded  that her  buildings were  built in  1996.                                                               
Additionally, she has  obtained a Marion shovel that  was used to                                                               
build the  Panama Canal and used  on the Alaska Railroad  as well                                                               
as  for  mining  in  the  Petersville area.  She  would  like  to                                                               
consider opening a  museum to showcase mining relics  such as the                                                               
shovel and to open the creek area for gold panning and picnics.                                                                 
                                                                                                                                
1:43:33 PM                                                                                                                    
                                                                                                                                
JULES  TILESTON, speaking  as a  private citizen,  noted that  he                                                               
previously served as  the director of the Division  of Mining and                                                               
Water  Management  21 years  ago  when  this situation  initially                                                               
began.   He  stated he  has  submitted written  testimony to  the                                                               
committee.  He said he strongly supports the bill as written.                                                                   
                                                                                                                                
1:44:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TARR    surmised   the    proposed   Petersville                                                               
Recreational  Mining  Area  operation  would be  similar  to  the                                                               
operation at Crow Creek mine.                                                                                                   
                                                                                                                                
MR.  TILSTON   confirmed  this;  however,  she   noted  that  the                                                               
difference between  Petersville area and  Crow Creek is  that the                                                               
Crow Creek mine  is on private land completely owned  by the Crow                                                               
Creek group  as allowable under  the federal mining  laws whereas                                                               
the Petersville  mining claim  would be  managed under  the final                                                               
jurisdiction by the state's DNR.                                                                                                
                                                                                                                                
1:44:48 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER, after  first determining no one  else wished to                                                               
testify, closed public testimony on HB 135.                                                                                     
                                                                                                                                
1:45:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked whether this area  is accessible by                                                               
road.                                                                                                                           
                                                                                                                                
MR.  GOODRUM confirmed  a road  lies  in close  proximity to  the                                                               
southern portion of the Petersville Recreational Mining Area.                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON asked for  a more definitive definition of                                                               
"close proximity."                                                                                                              
                                                                                                                                
MR. GOODRUM  directed attention  to a  map in  committee members'                                                               
packets that  shows a  faint line  for the road.   He  offered to                                                               
provide more precise information on the road.                                                                                   
                                                                                                                                
REPRESENTATIVE   JOHNSON   wondered   what   type   of   business                                                               
opportunity and  clientele would be  served, for example,  if the                                                               
mining would  be geared for  tourists or  if one person  seeks to                                                               
generate mining revenue.                                                                                                        
                                                                                                                                
MR.  GOODRUM  replied  that  the division  would  work  with  the                                                               
applicant  on a  business plan.    Currently, the  land is  still                                                               
considered  federal land  and  the state  needs  to complete  the                                                               
conveyance process.  He anticipated  the division would then work                                                               
on a business plan with  the potential applicant to determine how                                                               
the rules  would be applied.   He characterized this as  being an                                                               
important first  step to  "untangle" this  complicated situation.                                                               
He   offered  his   belief  that   this   information  would   be                                                               
forthcoming.                                                                                                                    
                                                                                                                                
1:47:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI  referred to  a memo in  members' packets                                                               
from  the  [Division  of  Legal  and  Research  Services],  Legal                                                               
Services [dated  January 29,  2013] from  Donald M.  Bullock, Jr.                                                               
who  raised  the  question  on  the  reason  mining  claims  were                                                               
excluded from this bill.                                                                                                        
                                                                                                                                
MR. GOODRUM answered that the  entire Petersville mining area was                                                               
at  one point  state-selected land  with previous  federal mining                                                               
claims located  there.   A mineral survey  was conducted  in 1984                                                               
that prevented  the state from  taking ownership of  the selected                                                               
land.   The aforementioned federal  mining claims  were abandoned                                                               
prior  to  the  land  being  patented.    Therefore  the  state's                                                               
selection  still "hovered"  over the  top and  the state  has the                                                               
ability to  bring the  land into ownership.   During  the mineral                                                               
survey that  land was surveyed  and the easiest way  to reference                                                               
back and  identify this  area is to  reference the  1984 surveys.                                                               
This  is  how  the  Petersville   Recreational  Mining  Area  was                                                               
created, he said, since it leveraged existing surveys in place.                                                                 
                                                                                                                                
REPRESENTATIVE  KAWASAKI  inquired  whether any  current  federal                                                               
claims exist on that land.                                                                                                      
                                                                                                                                
MR.  GOODRUM answered  that to  his knowledge  there are  not any                                                               
active  federal  claims  that in  the  [Petersville  Recreational                                                               
Mining Area].                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KAWASAKI asked  whether recreational  use is  the                                                               
best use of the lands or if other uses exist.                                                                                   
                                                                                                                                
MR. GOODRUM replied that the  aforementioned land use question is                                                               
several steps  down the road.   He said the state  determines the                                                               
best  use  of the  land  and  the  division  will work  with  the                                                               
potential  applicant  on  the   appropriate  type  of  activities                                                               
allowable on  the land.  He  said, "I think that  those decisions                                                               
are still in front of us, but  it's clearly paved the way for the                                                               
state to follow through on  what had been originally conceived as                                                               
far as what could be done with this area."                                                                                      
                                                                                                                                
1:49:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON moved to  report HB 135 out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note.   There being no  objection, HB  135 was reported  from the                                                               
House Resources Standing Committee.