Legislature(2019 - 2020)ADAMS 519
03/22/2020 11:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB115 | |
| SB155 | |
| SB134 | |
| SB172 | |
| SB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 155 | TELECONFERENCED | |
| + | SB 55 | TELECONFERENCED | |
| + | SB 134 | TELECONFERENCED | |
| + | SB 172 | TELECONFERENCED | |
| += | SB 115 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 155(RES)
"An Act relating to exploration and mining rights;
relating to annual labor requirements with respect to
mining claims and related leases; relating to
statements of annual labor; defining 'labor'; and
providing for an effective date."
12:41:35 PM
CHAD HUTCHINSON, STAFF, SENATE MAJORITY, introduced himself
and indicated SB 155 was a mining rights bill. The bill was
the product of a multi-year process in which the sponsor
had been working with a number of stakeholders including
the Alaska Miners Association Working Group. The working
group was composed of several members including J.P.
Tangeman, Ramona Monroe, Deanna Crockett, Karl Hanneman,
and a number of small placer miners from Interior Alaska.
The Department of Natural Resources (DNR) had been helpful
in crafting the legislation. He noted that a couple of
members of the Senate had taken a special interest in the
bill over the years. He reported that the genesis of the
bill started during the Walker administration.
Mr. Hutchinson began the PowerPoint Presentation:
"Committee Substitute for Sponsor Substitute for Senate
Bill 155 (CSSSSB155(RES)) (copy on file). He addressed
slide 2 which discussed the purpose of the bill. The
legislation was an attempt to correct perceived problems
that had occurred throughout the mining industry over a
couple of decades. The bill addressed due process and
proper notice.
Mr. Hutchinson reported that Senator bishop had been
approached by small miners from the Interior and small
miners, in general, about paperwork violations causing them
to have problems related to their mineral interests. In
some cases, miners experienced a de facto taking their
mineral interests because of a typo in an Affidavit of
Annual Labor or other required paperwork. Essentially, the
bill was about mining rights. He thought the bill was
timely because it would help to ensure that Alaskas mining
laws would be adequately equipped for the future of the
nation and Alaska. As the state was looking at a new
economy it would be considering electric vehicles, the
internet, a planned integrated electrical grid system, and
smart homes, for example. The reality was that raw
materials were needed for all of the things he mentioned.
Alaska was a resource-rich state. He cited several of the
states resources. He remarked that the bill synced well
with some of the goals at the federal level. Senator
Murkowski was moving forward with the American Energy and
Innovation Act. The importance of mineral security was one
of the principles being considered in the act, as there was
an increased focus on decreasing the United States
reliance on China. China produced a significant amount of
rare earth elements including critical and strategic
minerals related to national defense. There was a national
appetite for the state to move in a different direction.
Mr. Hutchinson indicated that the foundation of the bill
started with the Alaska Constitution. He cited Article 8,
Section 1 that talked about the general policy of
developing resources available for maximum use and being
consistent with the publics interest. Article 8, Section
11 of the constitution dealt with mineral rights recognized
at statehood. The rights continued based on statements or
affidavits of annual labor. He explained that a miner was
required to provide a document that stated that they were
producing on the land and to pay royalties and rents on the
land. He indicated there would be further discussion on how
the state was ensuring that miners were in the best
position to do what they did best - produce. The state was
trying to give the benefit of the doubt to miners, as it
was in the interest of the state, small businesses, and
large businesses. The bill was also designed for miners in
the field and based on real world experience. Much of the
bill was directly based on an injustice that had likely
occurred previously and had been relayed to the Alaska
Miners Association.
Mr. Hutchinson moved to slide 3 which provided an example.
He explained that a small miner in the Interior had a small
typo on one of his filings related to his Statement of
Annual Labor. Even though the statement was filed properly
with the recorder's office and the notary stamp contained
the correct date, he was accused of abandoning the claim
because he failed to put the date on his statement. It was
a large problem for miners because they had invested time
and money but did not have a guarantee that they would have
a right to their claim in the future. The bill addressed
the problem.
12:48:27 PM
Mr. Hutchinson continued to slide 4 which addressed
qualifications in sections 1, 2, and 3. The bill was broken
into large sections. Sections 1, 2 and 3 addressed
qualifications. Currently, a person had to be a U.S.
citizen and 18 years old. A U.S. Corporation qualified as
an interest. Guardians of minors also qualified. The bill
would add a few provisions that occurred in real life that
the working group recommended for 2020. He read the list
from the slide:
Section 1 AS 38.05.190(a) is amended -
Qualifications
Adds that mining rights can be acquired by:
• Conservators of minors or incapacitated adults;
• Individuals at least 18 years of age or older who
have declared their intentions to become citizens
of the United States;
• Limited Liability Companies (LLCs);
• Registered trusts (with a qualified trustee)
Mr. Hutchinson noted that the word "persons" was changed to
"individuals" in the bill. Also, the language as it
pertained to declaring intentions to become a citizen of
the United States went back to the federal mining law of
1872.
Mr. Hutchinson turned to slide 5 which addressed Section 2
of the bill. The section had to do with due process and
proper notice. Senator Bishop wanted to make sure that
miners were given the ability that if there was a typo or
some sort of error, they would be given proper notice,
given time to cure the issue, and allowed to move forward
with production. If an unqualified person received notice,
they might become qualified or transfer their interest
within 90 days after due process and written notice and
before the department made a "void" declaration.
Mr. Hutchinson moved to slide 6 which addressed Section 3
dealing with qualifications specific to process. The
written notice was very important to Senator Bishop. There
were two levels of notice that existed in the bill. The
first was written notice via certified mail. The second was
a notice via regular mail. He explained that many miners in
the field were away from civilization. If a miner failed to
rectify the issue, the result would be void.
12:53:29 PM
Mr. Hutchinson discussed additional measures of Section 3
on slide 7:
• (f) If the unqualified person fails to cure the
defect within 90 days after the department sent
written notice, the department may declare the
exploration or mining interest "void" and open to
location. There shall be no third-party location or
judicial action within those 90 days.
• (g) "qualified to do business in this state" means
holding a certificate issued by the Commissioner of
Commerce, Community, and Economic Development
(necessary to do business in the state).
Mr. Hutchinson indicated Section 4 and Section 5 dealt with
mining claims on slide 8. He explained that deposit rights
were established in the State of Alaska by using a system
called the Meridian Township, Range, Section, and Claim
(MTRSC) System. It was suggested that a valid MTRSC system
location presumptively established the rights of the
deposits in the section that a miner filled out.
Mr. Hutchinson displayed slide 9 which showed a form
completed by miners. He reviewed the form contents
including the area for a claims sketch. The example was
done on a computer. However, he had seen forms with hand
drawn maps with xs denoting location.
Mr. Hutchinson moved to Section 5 of the bill on slide 10.
Section 5 dealt with mining claims and changes in locations
and amended notices. The bill eliminated some unnecessary
language that, because of changes made later in the bill,
was no longer relevant. There was a reference to
AS 38.05.200 which indicated that notices could be amended
at any time to correspond to amended locations, as long as
it did not interfere with the rights of others. It allowed
the miner to amend and correct, providing more freedom and
flexibility as long as the document was recorded in the
same manner as the original form.
Mr. Hutchinson returned to the theme of making sure miners
were producing and that every benefit of the doubt was
given to them to ensure that they would bring raw materials
to market.
Mr. Hutchinson advanced to slide 11 which showed an
Affidavit of Annual Labor. He indicated sections 6, 7, 8,
and 9 dealt with annual labor. Annual labor was one of the
things under the state constitution the miner had to do to
show that he was producing on the land. The sheet shown on
the slide was an example of a form miners had to complete.
The form showed who, what, when, and why details. The form
demonstrated that the ground was being worked. He reviewed
each section of the form. The most important section was at
the bottom of the form where a labor description was
provided. It explained the activities of the miners
including moving dirt, building roads, or exploration. The
form had to be completed every year and submitted to DNR.
12:57:35 PM
Mr. Hutchinson explained that Section 6 of the bill on
slide 12 outlined the guidelines of performance of annual
labor. The bill included a few new provisions that mirrored
more of what happened in reality. Sometimes there were
mineral interests, boundaries of federal or private Native
regional corporation land or state land. The bill sponsor
wanted to make it clear that one Statement of Annual Labor
and the performance occurring on the land could also
include the adjacent federal and private mineral interests
that might be in close vicinity.
Mr. Hutchinson noted that in the labor portion he included
what it looked like as it related to the amount miners
might have to pay if they did not work the grounds. The
rates included $100 for each claim and $400 for each
quarter section. If miners were not producing, they could
choose to pay a monetary fee. One of the provisions
included in the bill was that a miner could not pay in lieu
of producing or conducting labor on the ground for not more
than five consecutive years. The state did not want miners
sitting on grounds paying nominal amounts and not producing
raw materials.
Co-Chair Foster asked that if a miner with 10 claims or 10
quarter sections which were all adjacent to each other (all
touching) would only have to complete one affidavit rather
than one for each. He queried the fee and asked about
claims nearby. Mr. Hutchinson responded that as long as
there was a common plan for development in the areas, only
one Statement of Annual Labor would be required. The
purpose of the bill was to reduce paperwork for miners and
to make sure they were producing.
Co-Chair Foster asked if they would qualify if the claims
were 1 mile away rather than adjacent to each other. Mr.
Hutchinson presumed they would be touching. However, he
indicated there was someone online to answer the question.
Co-Chair Foster was comfortable with the answer. He also
asked for clarification about the ability to pay a fee if a
miner did not work the land. Mr. Hutchinson responded that
a miner could currently pay a fee. The bill would provide
particulars to the labor itself. The bill would also allow
a miner to pay without producing. However, a cap was being
inserted which would not allow payment beyond five
consecutive years.
Co-Chair Foster thought that as long as a miner worked once
every five years, they would be able to make payments for
five years. He provided an example and asked if he was
correct. Mr. Hutchinson deferred to Brent Goodrum from DNR
who was online.
1:01:48 PM
BRENT GOODRUM, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES (via teleconference), reported that currently in
state regulations miners were able to pay in lieu of labor.
The bill sought to define the limit in statute to no more
than five consecutive years.
Representative Josephson assumed that the point of the
five-year cap was to put a claim in service and produce it,
rather than for someone to only talk about it for several
years. Mr. Hutchinson responded in the affirmative.
Representative Josephson referenced Co-Chair Fosters
example of 10 adjacent claims. He wondered whether all ten
claims would be satisfied if the claim holder only worked
one of them. Mr. Hutchinson deferred to Mr. Goodrum. Mr.
Goodrum responded that if they were to work one particular
claim and held the other claims in common the labor on the
one claim would satisfy the other claims.
Representative Josephson asked if the new provision was
more generous than in current law where there was a more
overreaching expansive effort. He asked if he had made a
fair assessment. Mr. Goodrum replied that it was the
current practice as well with any affidavits of labor.
Labor that was conducted on claims that were held in common
could be attributed to all of the claims and covered them.
It was consistent with how DNR was currently doing things.
Representative Josephson asked that if he had a claim on
state land which was adjacent to federal land, a miner
would have to have a joint plan of development with the
federal claim owner. He wondered if he was correct. Mr.
Goodrum responded that Representative Josephson was
correct. Currently, in a situation where an adjacent
mineral interest was federal or private, it was a slightly
different nuance being captured in the bill.
1:06:00 PM
Representative Josephson asked Mr. Hutchinson if the
removal of the word "affidavit" would influence the
document being a sworn statement.
Mr. Hutchinson responded that it would not have the same
legal effect as an affidavit. The reason for the removal of
the word and replacing it with "Statement" was because
there had been errors on the affidavits in the past.
However, it proved to be factually inaccurate. He suggested
that it was a real-world issue, particularly with small
family mines. The sponsor thought it would be better to
declare it a Statement of Annual Labor rather than an
affidavit that would be filed with the court. It would be
slightly different. The obligation and the expectation were
for a person to tell the truth. Technically, it would be a
statement rather than an affidavit.
Co-Chair Foster asked about miners submitting affidavits
for claims that were scattered and inaccessible by road. He
asked if there was any enforcement in terms of making sure
miners actually did the labor that they reported.
Mr. Goodrum responded that currently the affidavits of
annual labor were prima facie evidence that the labor had,
in fact, taken affect. As the legislature went forward with
the legislation designed to help clarify and prove some of
the deficiencies that were currently in statute, DNR would
also have to look at what regulations would help clarify
how DNR would work with the statutes. He suggested that
some of the work could be done. For instance, a miner in a
geographic area flying lidar or performing some other
activity that might encompass all of the claim properties,
would likely be contributing to the labor necessary to a
particular claim. He suggested that additional work would
be required of DNR moving forward with the legislation.
Representative Wool asked to return to slide 9. He
referenced the squares [Representative Wool was referring
to the squares in the claim sketch]. He asked if each
square with a number was an individual claim. Mr.
Hutchinson believed the answer was yes.
Representative Wool suggested that for any work of $100 on
one of the 10 claims that were touching would count for all
10 claims. He asked if the reason for including the
requirement of labor was to ensure that the person was
actually working the claim. He thought it was more valuable
to the state for someone to work the claim rather than
paying $100 to the state. Mr. Hutchinson stated that the
representative was correct. He explained that the reason
the bill included a 5-year threshold was to avoid someone
simply sitting on the resource rather than mining the
interest. The bill was attempting to remedy the problem.
Representative Wool asked how long the fee had been $100.
Mr. Hutchinson would have to look up the information. To
his knowledge the amount had not changed significantly over
the course of the mining industry.
Representative Wool suggested that the fee of $100 could
have been in effect in 1970. Mr. Hutchinson indicated the
amount had been around for a while. He would have to double
check the specific date.
1:12:15 PM
Mr. Hutchinson continued to Section 7 on slide 13 which
dealt with the information found on the Statement of Annual
Labor. The bill would make things crystal clear to the
miners what the expectations were of the state. He read the
list from the slide:
Section 7 - AS 38.05.210(b) Clarifies the information
found in a Statement of Annual Labor
Added:
• Individual signs the statement to certify that
it is true and correct to the best of the
individual's knowledge.
• The statement must include:
• The assessment work year
• The name and land administration number
assigned by the department
• Every meridian, township, range, and
section in which the mining claim is
located
• The recording district
• The total amount of work required
• A description of the labor performed
• The value of the labor performed
(including excess labor value from
previous year)
• The name and mailing address of the owner
designated to receive notices
Mr. Hutchinson moved to slide 14 dealing with annual labor
and paper requirements as stipulated in Section 8 of the
bill. He restated that the benefit of the doubt was being
given to the miner. The bill encouraged miners to produce
and take minerals from the ground. The bill would also
remove some of the restrictions having to do with paperwork
violations. The provision in Section 8 would allow miners
to correct their Statement of Annual Labor at any time
before DNR declared that the interest was invalid. He read
from the slide:
Section 8 AS 38.05.210(c) -Allows for statements of
annual labor to be corrected at any time (before
"invalid" declaration)
Added:
• The Statement of Annual Labor, whether recorded
before or after the effective date of this Act,
may be corrected or amended before the 90-day
cure period.
• The corrected Statement of Annual Labor shall be
recorded like the original.
• A corrected statement may not be applied against
labor required to be done during a subsequent
year.
• A corrected statement shall be recorded in 90
days.
Removed:
• 2-year threshold has been removed. In other
words: There had to be a correction within two-
years.
Mr. Hutchinson elaborated that one of the things that had
been a problem for some of the mineral interests was that
there could not have been a correction of a Statement of
Annual Labor that went beyond a 2-year period. The bill
would open the limited window to anytime.
Mr. Hutchinson moved to section 9 on slide 15 which added
new provisions. The provisions had to do with some of the
technicalities related to statements of annual labor. He
restated many of the provisions including certified mail,
proper notice, and a 90-day threshold.
Mr. Hutchinson continued to slide 16. The information was
added in statute (AS 38.05.215 - AS. 38.05.235) and applied
to an instance where there were two co-owners and one of
them had to forfeit their interest. The process involved
publication, going through the proper process of recording
in the recording district. He as happy to answer questions
regarding the specific topic at a later time.
Mr. Hutchinson continued to Section 10 which defined labor
on slide 17 and slide 18. He read the list beginning on
slide 17 and continuing on slide 18:
Section 10 Labor includes:
• Work performed in good faith on a mining claim,
leasehold location, or mining lease that is directly
related to exploring for, developing, or producing
minerals, including:
• Excavating, tunneling, drilling, or clearing land
• Constructing or maintaining roads, trails, and
landing strips
• Extracting or producing ore
• Performing metallurgical analyses, environmental
studies, economic feasibility studies, engineering,
and permitting
• Constructing settling ponds, water supplies, and other
utilities
• Providing worker housing
• Performing reclamation activities under a reclamation
plan
• Transporting workers and equipment in the state to or
from a mining site (not to exceed 50% of the total
value of labor in the Statement of Annual Labor for
the assessment year)
• Conducting a geological or airborne survey by a
qualified expert and verified by a detailed report
that sets out:
• The location of the survey
• The nature, extent, and cost of the survey
• The name, address, and professional background of
the person conducting the work
Mr. Hutchinson noted that a qualified expert was previously
defined in AS 38.05.242(6).
Mr. Hutchinson continued to slide 19, Section 11 which
dealt with the abandonment of a claim. It tied in with a
previous example of a typo scenario. He elaborated that the
issue of abandonment of a claim would arise if no labor
occurred, no rent was paid, or no royalties were paid.
Under such circumstances another miner could work the
ground.
Mr. Hutchinson explained that the heart of the legislation
was removing the provision that if a Statement of Annual
Labor did not accurately set out essential facts it would
become void and would have no effect. Essentially, a typo
on a Statement of Annual Labor would no longer be a back-
breaker as it related to a miners ability to continue to
work the ground. It alleviated the abandonment issue in
which a miner had invested a significant amount of time and
equipment and resources just because of a typo in their
Statement of Annual Labor.
Mr. Hutchinson turned to slide 20 which continued to
address Section 11 of the legislation. It was a clean-up
provision related to rents and royalties and specified that
if there had been a partial payment of rents and royalties,
the miner would have the ability to cure the situation
paying the full payment amount due to the State of Alaska.
Mr. Hutchinson moved to slide 21 dealing with transfers in
Section 12 of the bill. The section dealt with transferring
a claim from an unqualified person to a qualified person.
The section outlined the procedure. One of the provisions
that had been eliminated was a nebulous provision related
to regulations deemed to be too vague.
Mr. Hutchinson moved to slide 22, Section 13 that dealt
with another clean-up provision. It ensured that mining on
state selected land located on or after an active
unpatented federal mining claim could be located only with
recorded permission of the unpatented federal mining claim
holder.
Mr. Hutchinson scrolled to slide 23 which related to
Section 14 of the bill. The provision stated that DNR was
not required to go back and look through their files for
compliance issues without any sort of good cause. He
reported that DNR naturally went through the process when
some of the filings were presented to the department. Some
of the small miners' groups were concerned that DNR was
unilaterally looking through the files for typos and
violations. The bill ensured that it was not the case.
1:18:11 PM
Mr. Hutchinson reviewed slide 24 regarding sections 15, 16,
and 17 of the bill. Section 15 dealt with applicability
which mostly applied to Section 8 and Section 9 and Section
13 - the written permission from the federal unpatented
holder. Section 16 ensured that there was a smooth
transition process. As the state went through regulations
there would not be any declarations of abandonment moving
forward if the legislation were to become law. Section 17
indicated an immediate effective date. He concluded his
presentation and was available for questions.
Representative Wool had a question about labor and the $100
fee. He suggested paying $100 was much easier than actually
doing work. He asked what would happen presently if a miner
did not meet the labor requirement. He also asked how long
a miner could not do labor. Mr. Hutchinson answered that
$100 was in statute currently. The bill would limit the
time a person could sit on a claim without working to 5
years.
Representative Wool wondered how it appeared in statute
presently. He asked if the timeframe was indefinite. Mr.
Hutchinson answered that it was the reason for implementing
a restriction.
Representative Wool suggested that people holding onto
claims and not developing them were more likely mom-and-pop
operations. Mr. Hutchinson had mentioned molybdenum,
magnesium, and graphite, which he thought would be pursued
by corporate entities rather than the smaller miner. He
wondered if there was a disconnect mostly for gold. Mr.
Hutchinson commented that it was for the future. He noted
that the Alaska Miners Association included large and small
miners. Generally, there had been a consensus in support.
If there was time, the committee would hear testimony from
some of the larger mines that had capital interests off to
the sideline but were supportive of the bill. It started
with the mom-and-pop operations and the smaller miners too.
1:22:01 PM
Representative Wool asked if there were small mining
operations that also looked for other minerals besides
gold. Mr. Hutchinson indicated that it started with gold
which was an important mineral.
Representative LeBon shared that he had provided banking
services for many gold miners during his past career as a
banker. He agreed that it was long overdue to clean up some
of the statutes and regulations related to mining. He
attested that the concerns and issues brought up by Mr.
Hutchinson were very real, as he had heard about them
often. The relationships that miners had with DNR was not
always good. He suggested that the bill would likely help
improve those relationships. The bill would lend itself to
increased mining productivity and encourage entry into the
industry for individuals who wanted to start a gold mine.
He thought it would be easier for potential miners to take
the initial step in investing in a gold mining operation.
He argued that the legislation was not only advantageous
for current miners, it would also benefit future miners
encouraged by the changes presented in the bill. He was in
full support of the bill.
Vice-Chair Ortiz appreciated the legislation. He asked
about the regulatory environment in relationship to the
mining industry prior to the bill. He wondered if Alaska
was viewed as a friendly and supportive environment to the
mining industry prior to the bill. Mr. Hutchinson answered
that he had heard Senator Bishop state numerous times that
he believed Alaska's law was 50 years behind.
Vice-Chair Ortiz asked if Mr. Hutchinsons response meant
that Alaska was less open to the mining industry. Mr.
Hutchinson answered there had been a struggle with the
perception of how DNR was interpreting some of the
provisions in statute. He brought up the example he had
previously provided about de facto abandonment where a
miner received a document stating that his claim was
abandoned. He was not provided with an ability to cure the
issue. Generally, constitutionally, a person was entitled
to due process and notice. He thought a legitimate case
could be made that there had been de facto takings that had
occurred over decades where the affected miner did not have
the ability to cure in a way that satisfied constitutional
requirements of due process and proper notice.
Vice-Chair Ortiz asked what the most significant impact
would be of enacting the bill. Mr. Hutchinson answered that
the hope was increased production. He believed the
legislation would provide more stability with the states
statutes. He suggested that the due process provisions
created a higher probability that people could invest the
necessary capital knowing that the law was structured in a
way that placed miners in a good position to be successful.
Co-Chair Foster shared that he had grown up mining and his
family had been in the mining industry. He asked for
verification that the bill did not affect the carryforward
for the affidavits. For example, if a miner did $1000 in
labor in the current year, he would be able to carry over a
portion to the following year. He did not believe the bill
changed the provision. He asked if he was correct. Mr.
Hutchinson responded, "Thats correct."
Co-Chair Foster suggested that if a miner was deficient in
their rent payment made on the affidavit of labor, they
would receive a notice indicating that there had to be a
cure. However, if a miner were to send in the affidavit of
labor past the due date, it would be considered an
abandonment of a claim and there would be no further notice
provided to the miner. He asked if he was accurate.
Mr. Hutchinson answered there was a balance. He elaborated
that the bill provided a miner the ability to cure within a
timeframe. Ultimately, the idea was to increase production.
If a miner received notice that there was some sort of
deficiency, was given the opportunity to cure, and did not
act, someone else in line could step in. The bill was
encouraging someone to produce the claim. The bill struck a
balance.
Co-Chair Foster suggested that it was not only addressing a
deficiency in a rent payment, it also provided a miner the
opportunity to cure a situation in which the affidavit was
not submitted in a timely manner. He asked if he was
correct. Mr. Hutchinson answered that once a miner had
proper notice, they would have 90 days to cure the defect.
If they were not able to, it could constitute
abandonment.
1:28:59 PM
Representative Josephson stated that currently the process
was indefinite. A person could receive a claim and
effectively turn it into their cabin site without any other
burden than an annual fee. Mr. Hutchinson answered that he
had only heard the concern anecdotally. It was a concern
that existed and, the bill was attempting to move away from
such a practice.
Representative Josephson asked how his constituents
benefited from small mines, in terms of rents and
royalties. Mr. Hutchinson deferred to DNR to answer the
question.
Mr. Goodrum replied mining was an important industry in
Alaska. Every year it contributed a significant amount of
money to the states coffers. Within DNR, the state
collected rental payments annually in addition to or in
lieu of labor payments made. Miners were also required to
make royalty payments to the state when they produced. He
continued that miners paid other taxes to the Department of
Revenue (DOR) pulling in far more money than DNR from the
mining industry. He noted presentations being done in the
Senate Resources Committee in which many of the numbers
were captured from the mining industry. He reiterated that
mining had been an important part of Alaskas history and
would be a critical industry going forward in the state.
Representative Josephson commented that although there were
mines throughout Alaska, they tended to be regions like the
Minto area, the North Star Borough, and the Seward
Peninsula. He suggested that small mines were more
intensively located in certain parts of the state. He asked
if he was correct. Mr. Hutchinson answered in the
affirmative.
Representative Wool wanted to better understand the term
"carry forward" as mentioned by Co-Chair Foster. He
provided an example. He asked, if a miner spent $5000 in
one year for dirt work, whether it would carry the claim 50
years. Mr. Hutchinson deferred the question to the
department.
Mr. Goodrum responded that if a person held 10 mining
claims and the requirement was for $100 of labor on each
claim which would be a total of $1000 to be done in the
year. It could all be done on one of the claims if the
miner was developing them sequentially such as moving
upstream. If there was a positive balance of annual labor
that was completed, the labor could be carried forward. He
indicated there was a specified amount that could be
carried forward which he thought was for less than 5 years.
He indicated that Ramona Monroe was on the phone and could
provide additional detail.
RAMONA MONROE, ALASKA MINERS ASSOCIATION, ANCHORAGE (via
teleconference), answered that the law would allow the
carry forward to be applied in the year the work was done
plus four sequential years if there was sufficient labor to
satisfy the labor requirement for each of the four
subsequent years for a total of five years. The goal was
that at least once every five years a miner was working
their land.
1:34:24 PM
Co-Chair Johnston OPENED public testimony.
KARL HANNEMAN, ALASKA MINERS ASSOCIATION, ANCHORAGE (via
teleconference), spoke in support of the legislation. He
was a member of the Alaska Miners Association working
group that had advocated for the changes presented in the
bill. The changes were primarily process and administrative
in nature. The goal was to improve the efficiency and the
relationship between the miners and DNR. It was an
important step forward in terms of simplifying the
administration of mining claims. He asked members for their
consideration and thanked them for their time.
1:35:24 PM
Co-Chair Johnston CLOSED public testimony.
Co-Chair Johnston asked the department to review the fiscal
note.
Mr. Goodrum reviewed the fiscal impact note [FN1 (DNR),
OMB Component Number 3002] which essentially covered what
would be required of the department to do additional work.
Under current statute certain activities occurred by
operation of law. The bill would create a process and a
timeframe in which DNR employees would need to make contact
with certain miners and to provide the time period and
window to make administrative corrections. For example, in
FY 21 the fiscal note would be $176,700 for two Natural
Resource Specialist I employees to assume the duties of
communicating with miners to ensure mining claims and
rental properties were properly maintained.
Representative Knopp asked if the positions would have
other job duties as assigned or would they be limited to
contacting miners.
Mr. Goodrum responded that positions would be additional
positions. Currently there was about 35,000 mining claims
throughout the state. The mining section had about 20
personnel actively manning them. The fiscal note would come
from program receipts generated from the mining industry.
He reported that in FY 19 the mining industry generated
$5.4 million to DNR alone. The Department of Revenue
received several other monies related to mining. The
program receipts would be generated by the department and
the Division of Mining, Land and Water from mining
activities.
Representative Knopp looked at the fourth paragraph of the
fiscal note that discussed the Natural Resource
Specialist I. He had only seen two qualifications; A miner
had to be a minimum of 18 years of age and had to be a U.S.
citizen. He wondered if there were other qualifications.
Mr. Goodrum noted that at the beginning of the bill a
couple of sections talked about modifications to
qualifications. Some of them had to do with limited
liability corporations and trusts. However, the
preponderance of the work would be done when someone
identified a potential error in a Statement of Annual Labor
and communication with the potentially affected miner. The
specialist would have to provide a time and process for a
miner to amend, correct, or cure a deficiency.
Qualifications only played a small part. The larger portion
of work that would be done by the 2 Natural Resource
Specialists would be working with mineral tenure and
mineral rights that were acquired and properly maintaining
them.
Representative Knopp referred to deficiency notices. He
asked about deficiencies other than annual work
requirements.
1:40:02 PM
Mr. Goodrum responded that the positions would be located
in the Minerals Property Section of DNR. He mentioned MTRSC
claims and working with miners regarding which mineral
rights were being acquired at the time of filing the
claims. Sometimes there might be other private property or
other things withheld. The two positions would be
corresponding with miners to ensure that the mining rights
acquired were understood by all parties. The positions
would ensure that when corrections needed to be made, the
department was notifying and corresponding with miners to
provide support for them in protecting their rights.
Representative Knopp noted there was nothing included in
the travel line on the fiscal note. He asked Mr. Goodrum to
comment.
Mr. Goodrum answered that quite likely employees from the
mining section would be traveling who were involved in
permitting. The division did over-flights throughout the
state to ensure work was done in a proper fashion. The two
particular positions being discussed would be more involved
with written correspondence and phone calls rather than
traveling to the field.
SB 155 was HEARD and HELD in committee for further
consideration.