Legislature(2003 - 2004)
03/24/2004 03:30 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 344-MINING FEES/LABOR/ROYALTIES/ABANDONMENT
CHAIR SCOTT OGAN called the Senate Resources Standing Committee
meeting to order at 3:30 p.m. Present were Senators Thomas
Wagoner, Ben Stevens, Fred Dyson, Ralph Seekins, Kim Elton and
Chair Scott Ogan. Senator Georgianna Lincoln arrived at 3:45.
The first order of business to come before the committee was HB
344.
REPRESENTATIVE HUGH FATE, sponsor, noted that he supported the
two proposed amendments and explained that the bill simply
corrects a situation in which a person makes a mistake or, for
some reason, can't get into the recorder's office to record his
assessment and other paperwork required by the department for
mining claims. If the filing does not occur on time, the claim
immediately becomes abandoned, making it open to staking or
location by someone else. Also, if that mistake has been made
and someone has overfilled the claim, the person who overfilled
it is the new claimant of the property.
This legislation allows for a true error to be made so that, if
there has not been an overfilling or the property has not been
located, a miner has the opportunity to pay a penalty and
refile. The penalty would be equal to the last year's royalty
and assessments on the property. So, he not only has to pay the
current fee, but a penalty equal to that fee, as well. Being a
former miner, he has seen people coming into the recorder's
office 10 minutes late and not being able to record.
So, all their equipment is sitting out there, their
cabins and everything else. If somebody knew that this
was going to happen, they could actually go in and
locate those claims. This gives redress for that. It
doesn't mean that they have an opportunity at all to
delay coming for 30 days.... It allows them to have
redress. But, if somebody did topfile on one of their
claims, it's up to them to know they were topfiled and
it's up to them to know that the paperwork has to be
clean, because if they do not file in a timely manner
and they are topfiled, that claim would belong to the
person who topfiled.
By the same token, if they don't file - and even if
they make an error in getting there in time...
usually, it's about a 24-hour mistake - either they
got the dates mixed up or they just can't get in for
some reason - broke down or whatever, they still, if
somebody comes in and claims that it's open ground,
even though they may have redress, it's still open
ground. So, it doesn't alter at all the law, which
allows somebody else to file a claim on open
ground.... It's a real step for a lot of the small
miners out there who have this concern and have lost
claims by not being able to get in.
SENATOR KIM ELTON asked what the typical rent is for a claim.
REPRESENTATIVE FATE replied, "If they are productive, they would
have to pay royalty; they would have to pay a labor assessment.
I think it's $200 on a two-year claim."
SENATOR ELTON asked if this would allow a miner to cure the
problem of a late filing up to any period of time as long as
nobody has filed a top claim or a claim on the claim.
REPRESENTATIVE FATE said that is correct.
CHAIR OGAN asked if he had statistics on how often this has
happened.
REPRESENTATIVE FATE replied that he had been topfiled and from
his own experience, you usually know when someone has topfiled,
because they do it year after year hoping you make a mistake.
When a miner files his assessment at the recorder's office, he
can see if he has been topfiled. "You try to make sure your
paperwork is clean." He has seen a number of miners come in one
day late because they get the dates confused. He has also
actually seen instances where miners get to the recorder's
office before the doors close. Bob Loeffler, Director, Division
of Mining, Land and Water indicated this happens quite
frequently.
CHAIR OGAN asked, if a miner decides to abandon a claim and
another person decides to topfile and then that first miner
changes his mind, is there a time limit for paying the penalty
and refiling. He pointed out that HB 344 has no time limit.
REPRESENTATIVE FATE said the first miner couldn't get his claim
back if it had been topfiled by someone else.
CHAIR OGAN said he is still missing how HB 344 changes that.
REPRESENTATIVE FATE sought hard to enlighten him saying it
doesn't change that aspect of it. This will help a small miner
who has made a mistake by being a day late or some equivalent
small blunder. In all circumstances, if no one else has
topfiled, the claim becomes open ground and under current
statute, he can't refile on his property for a full year. SB 344
allows him pay a fine and refile.
CHAIR OGAN supposed that this is like someone who pays his taxes
late and, therefore, has to pay a stiff penalty, too.
SENATOR GEROGIANNA LINCOLN arrived at 3:45 p.m. She said she
understood what Representative Fate was trying to do and asked,
"What kind of person would actually take advantage of a bill
like that and, then, what's the grace period you've got in here
for a late filing?"
MR. JIM POUND, staff to Representative Fate, replied that the
department has indicated that about 5 - 15 people per year miss
the filing deadline.
REPRESENTATIVE FATE added that there really isn't a grace period
per se.
If that ground is open after he's made the error in
not filing in a timely manner, it's not a grace
period. It's open ground.... They're usually in there
within a day or, at the latest, two.
SENATOR LINCOLN said there is a reason for deadlines and asked
for examples of other circumstances in which a miner might file
late.
REPRESENTATIVE FATE replied weather factors, sickness, injuries,
and, commonly in November, people would think it was the 31st
and be exactly 24-hours late.
It's frequent enough to be a concern and yet it's not
that prevalent, but 5 - 15 is not a small figure,
really compared to the number of small mines that we
have today out there, especially in the Interior. When
I started mining, there were 3,000 people in the small
mining industry. Within three years, there were
300....
He said that the Department of Natural Resources and the Mining
Association support this legislation.
SENATOR LINCOLN asked if a person has to physically go in and
file.
REPRESENTATIVE FATE replied that they have to go in physically.
SENATOR RALPH SEEKINS asked if there is any requirement for
notice of topfiling.
REPRESENTATIVE FATE replied no. He said that sometimes a person
who topfiles doesn't know that the ground has already been
staked. He also knows of people who topfile in huge blocks
just trying to capitalize on someone else's mistake.
SENATOR ELTON asked if someone doesn't make it in by the
deadline and wants to cure the problem six months later, is the
claim renewed for 18 months or for two years from the six-month
period.
REPRESENTATIVE FATE replied that it would be a new filing for a
two-year basis. He reminded the committee that the penalty for
late filing is equal to one year's rent, which is $100 - $200.
SENATOR FRED DYSON said he thought that a miner already has a
huge incentive to file on time and the penalty would add to
that. He moved amendment 1 on page 2, lines 10 - 13, as follows:
Page 2, lines 10-13
10(b)...mining claim, or leasehold location[, or
11 prospecting site] that includes all or part of the mining
claim, or leasehold location [, or
12 prospecting site] abandoned under (a) of this section, or
the area is closed to mineral location under AS 38.05.185
- 38.05.275, a person may cure....
The revised subsection would read as follows:
*Sec.2. AS 38.05.265 is amended by adding a new subsection to
read:
(b) Unless another person has located a mining claim,
or leasehold location that includes all or part of the
mining claim, or leasehold location abandoned under
(a) of this section, or the area is closed to mineral
location under AS 38.05.185 - 38.05.275, a person may
cure the failure to record or pay that constituted the
abandonment and cure the abandonment by
(1) properly recording a certificate of
location or a statement of annual
labor, paying any required annual
rental, and paying any required
production royalty; and
(2) paying a penalty equal to the annual
rent for the mining claim, leasehold
location, or prospecting site that was
abandoned under (a) of this section.
MR. POUND explained that there is no such thing as abandonment
of a prospecting site. They just expire after two years.
MR. CAMERON LEONARD, Assistant Attorney General, said he had
worked with Bob Loeffler at DNR and Mr. Pound on this language.
It addresses two different issues. The first being
that prospecting sites aren't abandoned in the same
way as mining claims and leasehold locations and so
there is no need to try to cure them under the new
language in 265(b). But, the more significant problem
that this amendment addresses is the possibility that
after a claim is abandoned, if for some reason the
area is closed to mineral location by the state, if
someone were to come back in at that point and try to
cure the abandoned claims without this amendment,
there might be an issue that they have a right to do
so, even though the area had been closed to mineral
location.... Those are the two changes and DNR
supports both of those changes....
CHAIR OGAN asked if this amendment would prevent a miner from
coming back into the Girdwood area that was closed to minerals
last year, for instance, and saying he had for some reason not
filed his claim. "Would this keep him from getting the claim
activated again?"
MR. LEONARD exclaimed that it would have exactly that effect.
SENATOR GEOGIANNA LINCOLN asked if "prospecting site" on line 18
was applicable to section (b)(2).
MR. LEONARD replied that she was correct and that language
should be deleted.
MR. POUND agreed.
SENATOR LINCOLN moved to delete "prospecting site" from the
proposed amendment in (b)(2). There were no objections and it
was so ordered.
SENATOR FRED DYSON moved to pass SCS HB 344(RES) from committee
with individual recommendations and accompanying fiscal note.
There were no objections and it was so ordered.
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