04/29/2004 09:05 AM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 486(FIN)                                                                                             
     "An  Act   relating  to  reclamation   bonding  and   financial                                                            
     assurance  for certain mines;  relating to financial  assurance                                                            
     limits for lode mines;  establishing the mine reclamation trust                                                            
     fund; and providing for an effective date."                                                                                
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated that the Senate  Rules Committee  by Request                                                            
of the Governor  sponsors this bill,  Version 23-GH2106\D.  It would                                                            
remove the $750 per acre  limitation currently in place on hard rock                                                            
or "lode  mines" and would  instead require  "companies to  bond for                                                            
reasonable   and  probable  cost   of  reclamation."  The   bill  is                                                            
accompanied  by a zero fiscal  note from  the Department of  Natural                                                            
Resources."                                                                                                                     
                                                                                                                                
NANCY  WELCH,   Special   Assistant  to   Commissioner  Tom   Irwin,                                                            
Department  of Natural Resources,  informed  the Committee  that the                                                            
Alaska  Miners  Association  and the  Council  of  Alaska  Producers                                                            
support this  bill. She was unaware  of any opposition to  the bill.                                                            
                                                                                                                                
BOB  LOEFFLER,  Director,  Division   of  Mining,  Land  and  Water,                                                            
Department of  Natural Resources, testified via teleconference  from                                                            
an offnet site  to comment that the State's current  reclamation law                                                            
was established  at a time when only placer mines  were operating in                                                            
the State.  This legislation would  take into consideration  bonding                                                            
requirements  that better align with  the State's current  situation                                                            
that includes large mines  such as the Fort Knox, Pogo, Red Dog, and                                                            
True North  mines. The changes include  the elimination of  the bond                                                            
reclamation amount that  could be charged as it was more appropriate                                                            
to  placer mines  and  not to  large mines;  providing  companies  a                                                            
variety  of  options  through  which  to  adhere  to  State  bonding                                                            
requirements, and providing  the opportunity for mines to contribute                                                            
to a voluntary  mine reclamation  trust fund  which the State  would                                                            
manage until  the funds were required.  He voiced pleasure  that the                                                            
bill has  garnered  support from  the industry  and reiterated  that                                                            
there is no known opposition to the bill.                                                                                       
                                                                                                                                
Senator  Hoffman asked  whether  the bill  would be  limited to  new                                                            
mines or would be retroactive.                                                                                                  
                                                                                                                                
Mr. Loeffler clarified  that the reclamation bonding  language would                                                            
remain unchanged  in regards to placer mines. Were  this legislation                                                            
adopted, the  entirety of the large  mines have agreed to  waive the                                                            
required $750 per acre  limitation and replace that requirement with                                                            
one of a variety of reclamation bonding options.                                                                                
                                                                                                                                
Senator  B. Stevens  moved to report  the bill  from Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objection,  CS HB  486  (FIN)  was  REPORTED  from                                                            
Committee with zero fiscal  note #1, dated January 21, 2004 from the                                                            
Department  of Natural  Resources  and a  new $21,000  fiscal  note,                                                            
dated April 26, 2004 from the Department of Revenue.