Legislature(1999 - 2000)

02/21/2000 03:12 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                     SB 175-STATE MINING LAW                                                                                
                                                                                                                                
MR.  STEVE  BORELL,  Executive  Director   of  the  Alaska  Miners                                                              
Association, said  that SB 175 is  the result of several  years of                                                              
work between  the mining  industry and  the Department  of Natural                                                              
Resources  (DNR).   The  changes  in it  only  affect the  process                                                              
required to locate and stake mining  claims.  They do not increase                                                              
or decrease  the rights that are  established by the claims.   The                                                              
primary  catalyst for  the review  was the  on-going state  budget                                                              
challenge  combined  with technological  advances  regarding  land                                                              
records, Internet  access to land records, and  global positioning                                                              
systems (GPS).                                                                                                                  
                                                                                                                                
The advances  make  it easier  to post  the data  in a timely  and                                                              
efficient manner,  which was  the primary issue  for DNR.   Mining                                                              
claims  will be  put  into a  format  that can  be  electronically                                                              
entered  on the  state  land status  plats,  which should  improve                                                              
accuracy, accessibility,  and timeliness  of the  data.   From the                                                              
standpoint of the  mining industry, the changes  will simplify the                                                              
claim staking process  and reduce errors.  They will  also make it                                                              
possible  to use  global positioning  systems  to establish  claim                                                              
corners in the field.                                                                                                           
                                                                                                                                
SB 175 will also  allow the use of a larger size  of mining claim,                                                              
which will decrease  the amount of "pick work" for  both the miner                                                              
and DNR.  The  existing claim location system will  continue to be                                                              
available for  situations in which  the new positioning  method is                                                              
not practical.   The  bill also establishes  rent for  prospecting                                                              
sites which do not  have a rental rate on them now.   It also adds                                                              
some restrictions  on using  the new  system: Meridian,  Township,                                                              
Range, Section,  and Claim, (MTRSC).   If that system is  used, it                                                              
must be done  in a way that  will facilitate the process  for DNR.                                                              
Mr.  Borell  said  the  mining  industry  believes  SB  175  makes                                                              
appropriate changes.                                                                                                            
Number 115                                                                                                                      
                                                                                                                                
CHAIRMAN  HALFORD asked  if the  bill allows  for claim  locations                                                              
that are not posted on the ground.                                                                                              
                                                                                                                                
MR. BORELL  answered no, the post  in the ground is  the essential                                                              
starting point  according to  the state mining  law.  SB  175 does                                                              
not change that.                                                                                                                
                                                                                                                                
SENATOR  TAYLOR asked,  if it  doesn't change  the requirement  to                                                              
post on the ground, what savings  are involved and how SB 175 will                                                              
improve the system.                                                                                                             
                                                                                                                                
MR.  BORELL explained  that an  aliquot grid,  based on  meridian,                                                              
township, range and section, covers  the entire state.  If a miner                                                              
goes out and establishes claim corners  and tells DNR the location                                                              
defined  by MTRSC,  DNR's  cost is  significantly  less because  a                                                              
draftsman will  no longer  have to enter  it onto the  land status                                                              
plats.  The claim can be highlighted  on the appropriate plat with                                                              
a computer  cursor. DNR staff would  confirm the data and  hit the                                                              
enter button; the claim would then  be on the land status plat and                                                              
almost instantaneously available anywhere in the state or world.                                                                
SENATOR TAYLOR commented that DNR  is willing to use aliquot parts                                                              
and GPS with  mining claims but  it has been totally  resistant to                                                              
do anything like that when it comes to land sales in the state.                                                                 
                                                                                                                                
SENATOR LINCOLN requested a fiscal note.                                                                                        
                                                                                                                                
MR. BOB LOEFFLER,  Division of Mining, DNR, stated  support for SB
175.   The  Division  has a  problem  providing  the services  the                                                              
mining industry relies  upon.  This bill is a  partial solution to                                                              
that problem.   In the  early '90s, the  Division did  about 3,000                                                              
mining claim  stakings per year.   In FY99, there were  15,000 and                                                              
in the late '90s  there have been 10,000 to 11,000.   The Division                                                              
expects that  number to  continue.  The  Division is  pleased with                                                              
that level but when it receives more  than 10,000 applications per                                                              
year, the Division  can't turn them around fast enough.   It has a                                                              
four to six month back log in terms  of creating a record for each                                                              
mining  claim.   This bill  solves the  problem in  two ways:   it                                                              
allows for  larger mining claims,  which will require fewer  to be                                                              
processed and  it allows the miners  to stake the claims  in a way                                                              
that helps the division automate the system.                                                                                    
                                                                                                                                
MR. LOEFFLER  said the  fiscal note  is a bit  odd and  he doesn't                                                              
want  to   mislead  the  committee.   SB  175  applies   rents  to                                                              
prospecting  sites.  The  Division believes  it will generate  new                                                              
revenue of about $150,000; half would  go to the treasury and half                                                              
to the Permanent Fund.  At the same  time, the Division isn't able                                                              
to  provide the  services to  make use  of this  information.   To                                                              
reduce the backlog,  the Division will need  approximately $75,000                                                              
to process the  claims.  The Division attempted  to demonstrate in                                                              
the fiscal  note that the  bill will  create a new  revenue source                                                              
but it  will need to  capture some of  those funds to  provide the                                                              
services to  generate the  funds.  He  said DNR would  support the                                                              
bill in any form.                                                                                                               
                                                                                                                                
Number 598                                                                                                                      
                                                                                                                                
SENATOR TAYLOR asked  Mr. Loeffler if he ever talked  to anyone in                                                              
the Division  of Lands  regarding  the sale of  land, because  the                                                              
allowance  to stake  a claim  is a  conveyance of  an interest  in                                                              
state  real   property.     He  thought   there  should   be  some                                                              
coordination  between the  Division of  Land and  the Division  of                                                              
Mining.  He applauded  Mr. Loeffler for the changes  he worked out                                                              
with the miners  and for using technology to locate  these points.                                                              
He questioned  why the  Division  of Lands couldn't  use the  same                                                              
method of aliquot parts and location by GPS for land sales.                                                                     
                                                                                                                                
MR.  LOEFFLER answered  that  the Division  of  Mining, Land,  and                                                              
Water is  now one  division.  He  explained that  when a  claim is                                                              
staked on  aliquot parts, the  record will reflect  aliquot parts;                                                              
however, the on-the-ground post prevails.   Therefore, if the post                                                              
is off the aliquot  parts by 100 feet, the location  on the ground                                                              
may not be the aliquot parts.  The  mining industry was willing to                                                              
say that the record may reflect the  aliquot parts, but the actual                                                              
on-the-ground location is, in fact,  whatever the post says it is.                                                              
Therefore, if you want to know exactly  where that mining claim is                                                              
on  the  ground,  you  have  to  survey  it.    The  aliquot  part                                                              
reflection is  just a paper  location.  The  same is true  of land                                                              
sales.   While  the  use  of GPS  is  very helpful,  the  physical                                                              
location on-the-ground prevails.                                                                                                
                                                                                                                                
SENATOR  TAYLOR  said he  understands  that,  but the  land  sales                                                              
section has  not been willing  to even  talk about GPS  or aliquot                                                              
parts.  They  are insisting on on-site surveys  before anything is                                                              
actually noticed.  He thought the  same system could be applied to                                                              
land  sales.   He encouraged  Mr. Loeffler  to work  with them  to                                                              
utilize the aliquot  parts and GPS to provide  notification to the                                                              
public of  lands available for sale  and then require the  land to                                                              
be surveyed before any transaction takes place.                                                                                 
                                                                                                                                
CHAIRMAN  HALFORD   said,  based  on  the  way   DNR  handled  the                                                              
unallocated  cuts in  its  last budget,  he  isn't  sure he  would                                                              
encourage the Finance Committee to  give it any more money, but he                                                              
said this does look like a proposal that could work.                                                                            
                                                                                                                                
CHAIRMAN  HALFORD  noted  one  section  of the  bill  deletes  the                                                              
requirement that  boundaries of the  claim remain  clearly marked.                                                              
He asked how sections 7 and 8 work,  as well as the prohibition on                                                              
the prior locator, and how that applies  to both prospecting sites                                                              
and claim locations.  He said he  was wondering how it would apply                                                              
to a  person who did not  submit all of  the paperwork and  can no                                                              
longer locate on that prospecting site, while anyone else can.                                                                  
                                                                                                                                
MR. LOEFFLER  responded  if a person  does not  complete the  work                                                              
required  to keep a  prospecting site  in good  order, he  may not                                                              
stake the prospecting  site for a year but the person  can stake a                                                              
claim.  That  is consistent with existing law and  was designed to                                                              
prevent  people  from  staking  prospecting  sites  or  claims  on                                                              
speculation.                                                                                                                    
                                                                                                                                
Number 1959                                                                                                                     
                                                                                                                                
MR. BORELL explained that under current  law, a person can stake a                                                              
prospecting site  and not pay  rent and, at  the end of  one year,                                                              
automatically  extend it for  a second  year.  At  the end  of the                                                              
second year,  if the individual  was unable  to get the  work done                                                              
because of  extenuating circumstances,  the law allows  the person                                                              
to request another extension from  DNR.  The fact of the matter is                                                              
that every time  DNR receives such a request, it  involves quite a                                                              
bit work of work to decide if an extension appropriate.                                                                         
During the discussions between DNR  and the industry, they decided                                                              
to  set the  life  of  a prospecting  site  at  two years  and  to                                                              
prohibit any extensions.   At the end of the  two-year period, the                                                              
owner of the prospecting site can  stake a mining claim or a lease                                                              
hold location  on top  of that  prospecting site  and convert  the                                                              
site into  a mining claim.   That conversion  must occur  prior to                                                              
the expiration  of the prospecting  site's two-year life.   Anyone                                                              
holding a prospecting site who fails  to convert to a mining claim                                                              
would be prohibited  from staking another prospecting  site.  They                                                              
could stake  a mining  claim, but  not a  prospecting site.   They                                                              
could stake a mining  claim, however.  The idea behind  it is that                                                              
there is a two-year  period in which you have to  follow the rules                                                              
for a prospecting site and, after  that, if you don't convert, you                                                              
are out of luck for a year.  If no  one else has staked it after a                                                              
year, the person can come back and stake it.                                                                                    
                                                                                                                                
CHAIRMAN  HALFORD asked  if they  could do anything  to provide  a                                                              
valid discovery on  a piece of property on which  one doesn't have                                                              
a prospecting site.                                                                                                             
                                                                                                                                
MR. BORELL  answered yes.  You can  do work on any ground  that is                                                              
not  restricted.   The prospecting site provides  legal protection                                                              
against someone  else who  would come along  and stake  the claim,                                                              
which does happen.                                                                                                              
                                                                                                                                
Number 2198                                                                                                                     
                                                                                                                                
SENATOR  TAYLOR  moved   to  pass  SB  175  from   committee  with                                                              
individual recommendations.   There were no objections  and it was                                                              
so ordered.                                                                                                                     

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