Legislature(2013 - 2014)CAPITOL 106
03/21/2013 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB1 | |
| HB59 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 1 | TELECONFERENCED | |
| += | HB 127 | TELECONFERENCED | |
| + | HB 59 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 1-ALASKA MINING DAY
8:04:37 AM
CHAIR LYNN announced that the first order of business was SENATE
BILL NO. 1, "An Act establishing May 10 of each year as Alaska
Mining Day."
8:05:01 AM
SENATOR CATHY GIESSEL, Alaska State Legislature, stated that SB
1 would establish May 10th as Alaska Mining Day. She said that
this day was chosen since the General Mining Act of the United
States was approved on May 10, 1872. The Act has been amended
numerous times, but the essential principles remain in place:
If a citizen ventures on to federal public land not otherwise
designated as a park, refuge, or set aside in any other way, and
with his/her own energy, intellect, finances, and hard work
finds a valuable mineral deposit, then that citizen has the
first right to develop that mineral deposit, after obtaining the
required environmental and operating permits. Senator Giessel
related that the Act paved way for mineral development in Alaska
and many of the communities represented by the committee were
established because of mining. Well-known, large gold rushes
occurred in: Juneau in 1880; Turnagain Arm in 1885; Fortymile
in 1886; Kenai in 1888; Circle in 1892; the Klondike in 1896;
Nome in 1898; Fairbanks in 1902; and Iditarod in 1908. The Gold
Rush and copper discovery at Kennecott in 1905 brought miners,
adventurers, merchants and their families to Alaska in droves.
They built towns, roads, dams, ports and railroads in Alaska and
moved Alaska to a territory status in 1912 and eventually to
statehood.
SENATOR GIESSEL continued as follows:
If Alaska were a country it would be in the top ten
for a lot of our precious metals and strategic
minerals: gold, zinc - largest zinc deposit in the
world - silver, copper, platinum, molybdenum, rare
earth developments, which are used in all of the new
technology - clean energy technology. China now holds
the monopoly on rare earth elements, but lo and
behold, Alaska has a massive deposit.
SENATOR GIESSEL stated that Alaska Mining Day highlights that
tremendous history and the state's future in this industry, and
contributes significantly to communities. For example, in
Juneau, four of the hydroelectric projects were built over a
hundred years ago by the mining industry and the hydroelectric
projects still operate today. Also, hydroelectric projects
represent clean and durable energy. She pointed out that at
Lake Dorothy, the main purpose of the project was to bolster the
energy needs of Greens Creek Mine. In fact, Greens Creek Mine
in Juneau is now the largest private sector employer in Juneau -
with 340 employees - and the mine contributes significantly to
this economy. In conclusion, Senator Giessel stated that the
purpose of Alaska Mining Day on May 10th is to highlight and
draw attention and respect for Alaska's mining heritage. In
response to a comment, she said, "If it can't be grown it must
be mined."
CHAIR LYNN emphasized that Alaska must diversify its economy,
and one of the principal ways that can happen is through mining.
8:09:30 AM
REPRESENTATIVE ISAACSON said he can see that some may find this
bill frivolous. He wondered if the Alaska Mining Day could
become a day of education and whether the sponsor envisions this
as a day that students would have a day off from school.
SENATOR GIESSEL highlighted the Alaska Resource Education
Program, which is a program that has been developed, in part, by
the Alaska Miners Association, with packets distributed to
teachers throughout the state. In fact, the program emphasizes
the significant role that minerals play in the everyday lives of
Alaskans. She referred to a video in which fifth graders select
and showcase a mineral. She offered her belief it is important
for students to understand that mining is not detrimental to the
environment, can be done safely, and can coexist with other
industries.
8:11:35 AM
REPRESENTATIVE ISAACSON referred language [in a sentence
beginning on line 10 through line 13 of SB 1, which read as
follows:]
Alaska Mining Day may be observed by educational and
celebratory events, projects, and activities to
increase public awareness of and appreciation for
mining and miners in the state and the many uses for
the minerals mined in the state.
REPRESENTATIVE ISAACSON suggested that if the language were
amended to change "may" to "shall", it could ensure mining
education would get into the school system.
CHAIR LYNN asked whether the sponsor was amenable to such
change.
SENATOR GIESSEL advised that such a change should be pondered
and she would consider it. In response to Representative
Isaacson, she answered that the Alaska Mining Association, Inc.
(AMA) is active in all communities, and she feels confident it
will move forward with [the methods of promoting public
awareness listed in the aforementioned language], "regardless of
what this resolution says."
REPRESENTATIVE ISAACSON said he wants to ensure school districts
[observe Alaska Mining Day], because [to do so] is "a proper
role of education."
CHAIR LYNN said he is not opposed to any changes, but pointed
out that any change to the bill at this point may slow the
process.
8:15:25 AM
REPRESENTATIVE HUGHES acknowledged Alaska is a resource state,
and said she likes the pun, "We've barely scraped the surface."
She said she has had an opportunity to tour Usibelli Coal Mine,
Inc. She asked to put on the record that prior to all the
environmental laws being adopted, the Usibelli family for three
generations has shown stewardship. She offered her belief that
the reclamation the mine performs is impressive. In fact, the
care and stewardship by Alaskans has also been impressive. She
mentioned she attended a recent Energy Council meeting in
Washington, D.C., and she enjoyed telling members of Congress
how Alaskans take care of Alaska's environment. She asked about
the rare earth elements and if there has been any effort to
encourage the rare earth metals industry in Alaska.
SENATOR GIESSEL answered that Niblack Mining Corporation has a
mining project, which is located just south and west of "here"
[on the southeast side of Prince of Wales Island]. She deferred
to Ed Fogels for more information.
CHAIR LYNN remarked that he gets nervous when China has a
monopoly on anything.
REPRESENTATIVE GATTIS said that she thinks Alaska Mining Day is
a great thing to do to ensure Alaskan kids recognize the effects
of mining on Alaska. She also said she is going to be voting
yes today.
CHAIR LYNN related that he is the first cross-sponsor in the
House for SB 1.
REPRESENTATIVE KREISS-TOMKINS commented that the Prince of Wales
Niblack and Bokan Mountain mines are in his district. These
communities are excited about the potential of these mines, and
he is excited about this bill and the companion bill.
8:20:14 AM
DEANTHA CROCKETT, Associate Director, Alaska Miners Association,
Inc. (AMA), stated that making Alaska Mining Day a state holiday
would increase the popularity of the industry. She expressed
appreciation for Senator Giessel's sponsorship of SB 1. She
said it is important not to forget the contributions of the
mining industry. Ms. Crockett related that the mining industry
employs about 5,000 people directly and about 9,000 indirectly,
with an average industry wage of $100,000. Many of these jobs
are in rural areas that do not offer many other opportunities.
She stated that AMA helps fund local governments and the Alaska
Native corporations. She emphasized the importance of
recognizing the presence that mining has in the state, including
its rich history in communities such as Juneau, Fairbanks, and
Nome. She offered her belief that having an Alaska Mining Day
is a great way to recognize the mining history in Alaska.
8:21:53 AM
EDMUND FOGELS, Deputy Commissioner, Office of the Commissioner,
Department of Natural Resources (DNR), stated that the
department supports the bill, which would establish May 10th of
each year as Alaska Mining Day. He acknowledged that mining has
played a critical role in Alaska's history and continues to play
a critical role. While mining may seem overshadowed by oil and
gas in economic contributions, it is still very significant. He
echoed Ms. Crockett's statement that mining provides over 5,000
jobs, with an average wage of $100,000. He characterized the
jobs as being highly skilled jobs, including engineers,
environmental scientists, heavy equipment operators, and
mechanics. In fact, these are career building jobs. Mining
provides economic benefits to some of the poorest regions in
rural Alaska. For example, the Red Dog Mine is the only
taxpayer in the Northwest Arctic Borough (NWAB). He pointed out
that mines like the mine proposed by Donlin Gold LLC have the
potential to really carry the economy for generations. He
stated one aspect of his job has been to ensure that a strong
environmental permitting process exists for these projects. He
said all seven of the currently operating mines have a sound
environmental record with agency people monitoring the sites.
He offered his assurance that Alaska's water and fish are being
protected, as well as other environmental resources. He pointed
out that the division has been working to strengthen the mining
sector. He said the governor has initiated a strategic and
critical minerals initiative, including a statewide assessment
for strategic and critical minerals, including rare earth
elements. He noted that rare earth elements are also referred
to as REE. He described the Bokan Mountain project on southern
Prince of Wales Island as very promising.
8:24:11 AM
MR. FOGELS explained there are two types of rare earth elements:
heavy rare earth elements and light rare earth elements. He
pointed out that one of the biggest mines in the nation in
California contains light rare earth elements, but the more
valuable and important ones are the heavy rare earth elements.
He indicated that Bokan Mountain is blessed with high
concentrations of heavy rare earth elements.
8:24:49 AM
CHAIR LYNN remarked that someone said China has a monopoly on
rare earth elements. He asked whether any rare earth elements
are being produced in the U.S.
MR. FOGELS offered that Mountain Pass in California is the only
mine he is aware of at this time. Most of the rare earth
elements are being produced by China so it is imperative for
other sources to be developed.
CHAIR LYNN asked for the impact if China were to "cut off" rare
earth elements.
MR. FOGELS offered his belief that it would be a bad situation
if that were to happen; the minerals are important for defense
and alternative energy purposes. One interesting fact, he
noted, is the color red in flat screen televisions can only be
produced by the rare earth element europium. He characterized
these metals as being very important.
CHAIR LYNN asked whether this is critical to the U.S. defense.
MR. FOGELS answered yes.
CHAIR LYNN asked how close Alaska is to producing rare earth
elements.
MR. FOGELS answered that in Alaska, the company is close to
submitting permit applications. He estimated an average time
frame for permitting something like the Bokan Mountain mine,
which is anticipated to be a small mine, would be two or three
years in permitting - including federal permitting - and another
year in construction.
CHAIR LYNN asked whether any other locations in Alaska may have
rare earth elements.
MR. FOGELS answered that about 70 known locations contain rare
earth elements, but the department has not investigated them
enough to know if the minerals are economically feasible to
develop, so right now Bokan Mountain is the only one. In fact,
the Division of Geologic and Geophysical Surveys (DGGS), [within
DNR], is in the process of reviewing rare earth elements in
Alaska.
8:28:41 AM
REPRESENTATIVE HUGHES asked whether the department has put a
price tag on REE in Alaska.
MR. FOGELS answered no.
REPRESENTATIVE HUGHES asked whether any work has occurred.
MR. FOGELS explained that exploration companies drill, perform
assay reports, and develop an exploration model. He stated that
the value is unknown, but he predicted the state has so much
unexplored land that many more mining deposits are likely to be
found.
REPRESENTATIVE HUGHES said she thinks it would be helpful and
supportive if the information was available.
8:31:16 AM
REPRESENTATIVE KELLER asked whether the legislature needs to
work on the royalty tax structure.
MR. FOGELS responded that a number of years ago AMA brought up a
leading expert on mining taxes who reviewed the state's taxes
and royalty taxes as compared to other countries and determined
that Alaska was "in the middle of the pack." Beyond that the
state has not done significant work on tax structure evaluation.
He stated the primary economic benefit of mining is that it
benefits the local economies. For example, mining benefits the
community of Fairbanks with the Fort Knox mine; Juneau with the
Greens Creek and Kensington mines; and the Northwest Arctic
Borough with the Red Dog mine. He pointed out that while some
people focus solely on the state treasury as a benchmark, some
mines, such as the Red Dog Mine, are located on private land.
Kensington mine and Greens Creek mine are located on federal
land. He reported that Pogo and Usibelli mines are the only
ones on general state land, while Fort Knox is located on Mental
Health Trust Land. Therefore, it really isn't fair to consider
mining based solely on mining tax contributions to the treasury.
REPRESENTATIVE KELLER asked where he could find a copy of the
report on the tax structure.
MR. FOGELS answered there wasn't a specific report since the
aforementioned royalty tax analysis was performed in a series of
meetings with a tax specialist, although he offered to try to
locate a PowerPoint on the matter.
REPRESENTATIVE KELLER commented that when he hears the term
"Roads to Resources," it reminds him of the big deposit at the
Ambler mineral project. He remarked the legislature is working
on the preliminary stages of this mining project.
8:35:29 AM
MICHAEL SATRE, Executive Director, Council of Alaska Producers
(CAP), stated that the council is a non-profit trade association
that represents the large producing metal mines and major metal
development projects in Alaska. He emphasized that the council
supports establishing Alaska Mining Day. He reiterated Ms.
Crockett's comments on the significant economic benefits the
industry provides to the State of Alaska. He offered his belief
that Deputy Commissioner Fogels has done a wonderful job talking
about many aspects of the mining industry and has emphasized the
importance of the industry today. He also reminded members that
establishing Alaska Mining Day is about honoring the people who
have built the mining industry over the years. He mentioned
former Deputy Commissioner David Stone, Department of Labor, who
unexpectedly died last year. He remarked that Mr. Stone would
have loved to share his stories with the committee. He also
mentioned contributions by other Alaskans, such as Earl
Beistline, Fairbanks; Bartlett Lee "Bart" Thane, Juneau; and
Peter Miscovich, Flat, Alaska. He said that through their sweat
equity, they helped build the mining industry and the state.
Further, mining has allowed him to work in his hometown of
Juneau. In closing, he remarked that Alaska Mining Day is not
just about infrastructure and the economics, but about people
that have built the state, as well.
8:37:40 AM
CHAIR LYNN, after first determining no one else wished to
testify, closed public testimony on SB 1.
8:38:00 AM
REPRESENTATIVE KELLER moved to report SB 1 out of committee with
individual recommendations and the accompanying zero fiscal
note. There being no objection, SB 1 was reported from the
House State Affairs Standing Committee.