03/17/2014 03:30 PM Senate RESOURCES

          HB 135-PETERSVILLE RECREATIONAL MINING AREA                                                                       
                                                                                                                                
3:32:21 PM                                                                                                                    
CHAIR GIESSEL announced HB 135 to be up for consideration.                                                                      
                                                                                                                                
REPRESENTATIVE  KELLER, sponsor  of  HB 135  said  this bill  was                                                               
before them last session and didn't  quite make it.{ He said that                                                               
basically  it   allows  the  state   to  fulfill  a   good  faith                                                               
transaction  between it  and a  potential business  owner in  the                                                               
90s;  HB 135  is needed  for the  deal to  come to  fruition. The                                                               
state cannot get  title to 220 acres, because the  Bureau of Land                                                               
Management  (BLM)  has  it.  That  land  is  destined  to  become                                                               
recreational  mining land.  So,  it is  supported  by the  Alaska                                                               
Miners Association.                                                                                                             
                                                                                                                                
3:33:05 PM                                                                                                                    
SENATOR MICCICHE joined the committee                                                                                           
                                                                                                                                
3:34:19 PM                                                                                                                    
JIM  POUND,   staff  to   Representative  Keller,   Alaska  State                                                               
Legislature, Juneau,  Alaska, said they are  mostly talking about                                                               
the Petersville Road area near  Trapper Creek where someone wants                                                               
to  make a  mining museum  out of  the remaining  buildings of  a                                                               
mining facility. It would be designed  for people to do some gold                                                               
panning without having to worry  about stepping on someone else's                                                               
claim.                                                                                                                          
                                                                                                                                
3:35:39 PM                                                                                                                    
BRENT  GOODRUM, Director,  Division  of Mining,  Land and  Water,                                                               
Department of  Natural Resources  (DNR), Juneau, Alaska,  said HB
 is simple, but the issue  is complex. He explained that a Ms.                                                               
Stevens has a  number of at-risk standing state  mining claims on                                                               
top of state  selected federal lands. The lands  are currently in                                                               
a  legislatively designated  area  - that  being the  Petersville                                                               
Recreational Mining  Area - as  well as being subject  to Mineral                                                               
Closing Order 674.                                                                                                              
                                                                                                                                
He  explained that  in May  of 1997,  HB 46  was signed  into law                                                               
establishing   two  areas   for   recreational   mining  in   the                                                               
Petersville  area   of  the  Upper  Susitna   Valley.  The  North                                                               
Petersville  Recreational  Area,   approximately  280  acres,  is                                                               
currently  open   and  active.   The  southern  portion   of  the                                                               
Petersville  Recreational Mining  Area, approximately  220 acres,                                                               
is not yet in state ownership.                                                                                                  
                                                                                                                                
HB  135  is the  first  necessary  step  to  begin to  unravel  a                                                               
complexity  of issues  by simply  removing  the southern  portion                                                               
from legislative  designation, which  would move the  area closer                                                               
to  potentially   fulfilling  what   the  state   had  originally                                                               
envisioned with this land.                                                                                                      
                                                                                                                                
3:37:27 PM                                                                                                                    
SENATOR BISHOP  asked if this bill  would allow the same  type of                                                               
use  that  occurs   at  the  Pedro  Monument   in  Fairbanks  for                                                               
recreational mining.                                                                                                            
                                                                                                                                
MR.  GOODRUM  answered that  it  would  be  very similar  to  the                                                               
activities at Crow Creek Mine  near Girdwood, which is on private                                                               
land, and El Dorado Gold Mine near Fairbanks.                                                                                   
                                                                                                                                
SENATOR  BISHOP  asked  for  a  description  of  approved  mining                                                               
methods.                                                                                                                        
                                                                                                                                
MR.   GOODRUM  answered   they  hadn't   developed  an   official                                                               
management plan, but  a recreational mining area  would have some                                                               
sort  of lease  or  concession where  gold panning  opportunities                                                               
would  be made  available to  tourists. Traditionally,  you don't                                                               
have that  type of activity  on active commercial  mining claims.                                                               
People could learn about gold  mining history and activities with                                                               
the structure and the equipment that is already there.                                                                          
                                                                                                                                
3:39:21 PM                                                                                                                    
SENATOR MICCICHE  said they are  talking about 200 acres  of land                                                               
and asked  him to  talk about the  prohibition against  local and                                                               
special   legislation  in   Article   2,  section   19,  of   the                                                               
Constitution and the ruling by Mr. Bullock.                                                                                     
                                                                                                                                
3:40:17 PM                                                                                                                    
ASHLEY BROWN,  Assistant Attorney  General, Civil  Division, Oil,                                                               
Gas  and  Mining Section,  Department  of  Law (DOL),  Anchorage,                                                               
Alaska, responded  that she  had looked  at Mr.  Bullock's letter                                                               
that   concluded   this   legislation   did   not   violate   the                                                               
constitutional provision.                                                                                                       
                                                                                                                                
3:41:09 PM                                                                                                                    
MICHELE  STEVENS,  representing   herself,  Petersville,  Alaska,                                                               
supported HB 135. She said she  is the property owner in question                                                               
and  this  legislation removes  several  mining  claims from  the                                                               
southern  part of  the recreational  mining  area. She  explained                                                               
that  in  1994, she  discussed  the  creation of  a  recreational                                                               
mining area located  at Petersville with the  Division of Mining.                                                               
At  that time  the director  was  Jules Tileston  and the  deputy                                                               
commissioner  was  Marty  Rutherford.  The  federal  claims  were                                                               
already  surveyed, so  she and  the  division agreed  to use  the                                                               
federal monuments  and names as  reference points  and boundaries                                                               
for the  proposed site. She  agreed to gift the  federal portions                                                               
of  her  state  mining  claims,  which  encompassed  the  federal                                                               
claims, to the State of Alaska  with an express commitment by the                                                               
Division of  Mining that  once the federal  land was  conveyed to                                                               
Alaska approximately  220 acres of  that area would  become known                                                               
as the Petersville Recreational Mining  Area and be leased to her                                                               
for   establishment   of   a   commercial   recreational   mining                                                               
concession. This would include a museum and other amenities.                                                                    
                                                                                                                                
In December  1996, Jules Tileston introduced  regulations for the                                                               
use  of Petersville  Recreational Area  and thus  started working                                                               
with her, the Alaska Miners  Association (AMA), and the president                                                               
of the Yetna Mining District to  secure a place that provided the                                                               
public a high quality chance to  pan for gold and revenues to the                                                               
state,   that  promoted   local   enterprise   and  provided   an                                                               
educational experience about  gold mining. At this  time having a                                                               
recreational business on  a mining claim was not  allowed and the                                                               
Division of  Mining chose  to go through  legislation to  get the                                                               
recreational area designated.                                                                                                   
                                                                                                                                
MS. STEVENS  said the  intent of  the DNR was  to lease  back the                                                               
southern recreational area to her  when it received conveyance of                                                               
the  land  from the  BLM.  HB  135  provided direction  that  the                                                               
department  should aggressively  pursue the  opportunity to  have                                                               
private  enterprise  develop  and   run  a  high  quality  public                                                               
recreational experience centered on gold panning.                                                                               
                                                                                                                                
Subsequent to the  claims being gifted to her by  the Division of                                                               
Mining  and  issuance  of  the Mineral  Closing  Order,  the  DNR                                                               
Division of  Lands determined  that it  could not  under existing                                                               
state law establish a lease  without it going out to competitive,                                                               
commercial bid. Then in 2006 the  Division of Lands found a legal                                                               
way for  a commercial  business to  be operated  on a  portion of                                                               
state  mining  claim by  establishing  a  miscellaneous land  use                                                               
lease  provided  there  was concurrence  with  the  mining  claim                                                               
holder.  This approach  cannot  be used  on  lands designated  by                                                               
statute as a recreational mining area.                                                                                          
                                                                                                                                
She explained that  the HB 135 contains two  provisions: it would                                                               
reinstate  her  full mineral  rights  to  those portions  of  her                                                               
mining  claims in  the southern  recreational area  and it  would                                                               
remove the  statutory designation and  allow the DNR to  lift the                                                               
Mineral Closing Order,  which would give the  state the authority                                                               
to go  forward and her  claims would  become whole. Then  the DNR                                                               
could fulfill its original agreement with her.                                                                                  
                                                                                                                                
Questions arose  around a letter  from Dick Mylius  about whether                                                               
or not the claim would revert back  to her, but the state has now                                                               
accepted her  amendment to  the claims  and in  the event  HB 135                                                               
passes, the land  will automatically revert back to  her and make                                                               
her whole.  The DNR, the AMA,  and the Yetna Mining  District all                                                               
concur  that this  is the  best mechanism  with which  to proceed                                                               
forward.                                                                                                                        
                                                                                                                                
3:46:13 PM                                                                                                                    
CHAIR  GIESSEL,  finding  no   further  comments,  closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
REPRESENTATIVE KELLY thanked them  for their consideration adding                                                               
that it had been going on a long time and had a lot of support.                                                                 
                                                                                                                                
SENATOR DYSON moved  to report HB 135,  version 28-LS0190\A, from                                                               
committee    with   attached    fiscal   note    and   individual                                                               
recommendations. There were no objections and it was so ordered.