Legislature(2019 - 2020)BUTROVICH 205
02/19/2020 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Revenue from Alaska's Resources by the Department of Natural Resources & the Department of Revenue | |
| SB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 155 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 155-EXPLORATION & MINING RIGHTS; ANNUAL LABOR
4:36:26 PM
CHAIR MICCICHE announced that the final order of business would
be SPONSOR SUBSTITUTE FOR SENATE BILL NO. 155, "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."
He announced that there is a committee substitute (CS) before
the committee for SB 155.
4:36:59 PM
SENATOR COGHILL moved to adopt the CS, work order 31-LS1278/G.
CHAIR MICCICHE objected for purposes of discussion.
4:37:28 PM
CHAD HUTCHINSON, Senate Majority Counsel, Alaska State
Legislature, Juneau, Alaska, explained that the changes from the
CS came from the Alaska Miners Association working group in
congruence and consultation with DNR members. The themes to keep
in mind from the CS is "notice" and "due process;" the intent is
to provide miners with clarity on those two fronts.
He said the CS synchs the language related to all mining
statutes and eliminates redundancy, which the sponsor substitute
caught. The language in the bill uses terms and conditions that
miners use out in the field. The legislation is for the miners
and not the attorneys.
He addressed the changes for Committee Substitute for Sponsor
Substitute for Senate Bill 155 (CSSSSB 155(RES))-version G, as
follows:
1) On February 19, 2020 the Senate Resources Committee
adopted the following changes (via Committee Substitute
for Sponsor Substitute for Senate Bill 155):
a) In Section 3 (AS 38.05.190):
i) Further language clarified that written notice shall
be sent to the owner via certified mail with return
receipt requested to the most recent address on file
with the Department of Natural Resources. The
interest will be void if the unqualified person does
not cure the defect within 90 days. The department
may send an additional copy of the notice by regular
mail.
(1) The changes are found on page 2, lines 22-
26.
He paraphrased that Section 3 relates to qualifications for
exploration and mineral interests in Alaska. Attention to
notice and due process ensures that an unqualified person
receives written notice and an opportunity to cure, and the
department may send an additional notice document.
4:39:40 PM
He addressed Section 6 as follows:
b) In Section 6 (AS 38.05.210(a)):
i) Language about "common plan of development" was
changed to say, "including adjacent federal or
private mineral interests held in common." The
intent is to distinguish between terms used in the
oil and gas industry versus mining. This language
"better fit" commonly understood terms in the mining
industry.
(1) The changes are found on page 4, lines 13-
14.
ii) or mineral interest" was also added to better
encompass what one may encounter when adjacent
mining interests are held under common ownership.
(1) The changes are found on page 4, line 15.
MR. HUTCHINSON paraphrased that Section 6 has to do with
the annual labor performed to improve or develop the land.
The section changes language that frequently used and
better understood by miners out in the field. The section
adds the term, "or mineral interest," and synchs with
terminology used in the mining statutes.
He addressed Section 7 as follows:
c) In Section 7 (AS 38.05.210(b):
i) In (7)(C) "equal to" was removed. "Applied toward"
replaced "equal to."
(1) So, now a statement of annual labor must
include "any cash payment to the state applied
toward the value of the labor required under (a)
of this section.
(a) Why?
(i) The existing statute at AS 38.05.210(a)
provides that labor may be satisfied by work
performed in the current year, excess value
of work performed in prior years, and cash
paid equal to the value of the labor
required. While this language gives the
miner the opportunity to use one of the
three methods to the exclusion of the
others, there is no obligation that such
labor satisfaction method must be exclusive
to the others. In fact, existing practice by
some miners is to use portions of all three.
Thus, a miner may use a cash payment toward
the labor requirement to top off the work
performed or value of work from prior years.
Any cash payments must be made before the
end of the assessment year on Sept 1 and
generally before the labor affidavit is
filed, so referring to the payment in the
past tense on the affidavit is appropriate.
(2) The changes are found on page 5, line 25.
4:41:58 PM
MR. HUTCHINSON explained Section 8 as follows:
d) In Section 8 (AS 38.05.210(c)):
i) A statement of annual labor can be corrected or
amended before the 90-day period after notice was
sent under AS 38.05.210(g).
(1) The intent is to synch the 90 days cure
provisions, throughout the statutes.
(2) The changes are found on page 6, lines 10-
11.
ii) "A corrected statement following notice of
deficiency under (g) of this section shall be
recorded within 90 days after the notice is sent[.]"
was eliminated. The sentence was redundant. The
sentence previously existed on Version K, page 6,
lines 15-16.
He paraphrased that Section 8 addresses the annual labor
statement that provides due process and the ability to
cure. The section synchs language with other mining
statutes where the 90-day threshold appears and eliminates
redundancy.
He explained Section 9 as follows:
e) In Section 9 (AS 38.05.210):
i) "Shall" was changed to "may." On Version G, page 6,
line 26. The word "may" synchs with Section 3 (which
changed AS 38.05.190).
ii) Text was added to protect miners against third
party litigation during the cure period.
(1) The changes are found on page 7, lines 3-4.
iii) Section (j) from version K was deleted as it was
duplicative of the new added language in AS
38.05.283 (Section 14 in Version G).
He paraphrased that the section synchs annual labor notice
language, protects miners during the cure period, and does
not compel the department to go back in files to find
inaccuracies or typos.
4:44:29 PM
MR. HUTCHINSON explained Section 10 as follows:
f) In Section 10 (AS 38.05.240):
i) "Prospecting" was replaced with "exploring" to
provide more consistency throughout the statutes.
(1) The change is found on Version G, page 7,
line 14.
ii) The words "in support of prospecting for,
developing, or producing minerals" were deleted in
AS 38.05.240(1) because the text was redundant when
read with the rest of the statutory language.
(1) The removed language previously existed in
Version K, on page 7, lines 18-19.
He paraphrased that the section defines labor to synch with
statutes and eliminates redundancy.
He explained Section 12 as follows:
g) In Section 12 (AS 38.05.270):
i) "Evidence of" was included at the beginning of the
statutory language. One can record evidence of a
transaction, but not the act itself.
(1) The change is found on page 9, line 18.
ii) The language involving "heirs and assigns" was
eliminated. Given existing property law, the
language did not add much value. This request for
removal came from the Department of Nature Resources
(DNR). There was no objection from the Alaska Miners
Association (AMA) working group.
(1) The "heirs and assigns" language previously
existed under Version K, page 9, lines 25-26.
He paraphrased that the section deals with transfers to
unqualified and qualified interested parties. The section
focuses on mining by eliminating language involving heirs
because the process already exists throughout Alaska law.
He addressed Section 14 as follows:
h) A new Section 14 has been added (AS 38.05.283):
i) The section emphasizes, broadly, that the Department
is not required to go back and review for compliance
to these mining laws.
ii) This language was recommended by DNR. AMA does
not object. AMA does not expect DNR to review
notices or affidavits/statements.
(1) See Version G, page 10, lines 10-13.
4:47:34 PM
MR. HUTCHINSON detailed Section 15 as follows:
i) Section 15 Applicability:
i) Language was added for a clear understanding of
applicability:
(1) It now reads:
(a) "APPLICABLITY. (a) AS 38.05.210(a), as
amended by sec. 8 of this Act, and AS
38.05.210(e)-(i), enacted by sec. 9 of this
Act, apply to statements of annual labor filed
before, on, or after the effective date of this
Act, if, before the effective date of this Act,
a final decision or judgment has not been
entered invalidating the mineral interest and,
after the final decision or judgment, a claim
has not been located or a leasehold granted on
the affected land."
(b) See Version G, page 10, lines 16-21.
ii) In (b), the effective date of section 13 is now
"effective the date of this Act" instead of "July 1,
2020.
(1) See Version G, page 10, line 23.
SENATOR KAWASAKI said the changes from the CS are good. He
pointed out that the CS specifies that the 90-day cure for an
annual labor statement starts when the department sends the
notice. He asked if starting the 90-day cure would make more
sense when the miner receives notice via certified mail.
MR. HUTCHINSON agreed that starting the 90-day cure period when
the department mails the notice is not necessarily fair to the
miners. The court system deals with statutes based on sent out
versus actual receipt. In the grand scheme of things, proper
notice should be when received, something for future
consideration.
4:49:44 PM
SENATOR KIEHL asked what prompts the department to send a
noncompliance notice if the departmental review language
specifies that the department is not determining whether there
is someone out of compliance.
MR. HUTCHINSON answered third parties. He reiterated that the
emphasis is on not compelling the department to look for typos
or noncompliance if there is nothing else that gives probable
cause that there is some sort of problem.
SENATOR KIEHL agreed that there is no need for the department to
go through every file for the last hundred years of mining. He
said he is not clear on the language where the department
decides whether there is a problem when a third party brings an
issue to their attention.
MR. HUTCHINSON answered that Senator Kiehl's instincts are
correct. He said the vision is the department does have to
review the issue and respond accordingly if there is probable
cause. He explained that the emphasis is not requiring the
department to go back unilaterally if nothing exists.
CHAIR MICCICHE asked if there were comments on the fiscal note.
He said he might have some questions before the next meeting.
4:51:40 PM
He removed his objection and announced that the committee
adopted the working document, version G for SB 155.
He said the fiscal note does not apply to the CS and that is why
he asked if there were questions.
MR. HUTCHINSON stated that he believes the new fiscal note does
apply to the CS.
CHAIR MICCICHE asked Deputy Commissioner Goodrum if the new
fiscal note applies to the CS.
4:52:13 PM
BRENT GOODRUM, Deputy Commissioner, Alaska Department of Natural
Resources, Anchorage, Alaska, confirmed that the department
revised the fiscal note to synch with the CS for SB 155. The
department submitted the new fiscal note for the current
meeting.
CHAIR MICCICHE asked that the department review the fiscal note
and explain the changes to confirm that the committee is looking
at the right fiscal note.
DEPUTY COMMISSIONER GOODRUM explained that the modified fiscal
note reflects the departmental requirement to reduce three
fulltime positions to two positions. Money would also come from
designated general funds that the mining section generates.
CHAIR MICCICHE asked what the net reduction is.
DEPUTY COMMISSIONER GOODRUM replied that the reduction is about
$120,000 from the original fiscal note.
4:54:02 PM
CHAIR MICCICHE noted that public testimony remains open for SB
155.
4:54:38 PM
DAVID WRIGHT, representing self, Fairbanks, Alaska, testified in
support of the CS for SB 155. He said he and his partners own a
small mining operation in its fifteenth year. He disclosed that
DNR required the company to re-stake its mining claim. DNR and
the mining company incurred costs to address the problem. He
added that the re-staking also reset the rent clock to the start
so there was a loss of revenue to the state.
4:55:51 PM
CHAIR MICCICHE closed public testimony on SB 155.
4:56:02 PM
CHAIR MICCICHE held SB 155 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 155 SS Written Testimony Larry Barsukoff 02.14.2020.pdf |
SRES 2/19/2020 3:30:00 PM |
SB 155 |
| SB 155 SS Draft CS ver. G 02.18.2020.pdf |
SRES 2/19/2020 3:30:00 PM |
SB 155 |
| SB 155 SS Explanation of Changes ver. K to Draft CS ver. G 02.18.2020.pdf |
SRES 2/19/2020 3:30:00 PM |
SB 155 |
| DNR SRES Presentation MLW DOG Revenue 02.19.2020.pdf |
SRES 2/19/2020 3:30:00 PM |
DNR Presentation to Sen. Res. 02.19.2020 |
| DOR SRES Presentation - Resource Revenues Presentation 02.19.2020.pdf |
SRES 2/19/2020 3:30:00 PM |
Dept. of Revenue Presetnation to Senate Resources 02.19.2020 |