CHAIRMAN MILLER called the Resources Committee meeting to order at            
 3:40 p.m. and announced  HB 333  (MINING LOCATIONS ON STATE SELECTED     D    
 LAND) to be up for consideration.                                             
                                                                               
 JACK PHELPS, Legislative Aide to Representative Kott, said HB 333             
 is a very simple measure.  It addresses a situation where a miner             
 holds a federal claim on land that has been selected by the state.            
 It allows him to relinquish his federal claim when the land is                
 conveyed to the state and convert to a state claim.                           
                                                                               
 SENATOR FRANK said he thought claims of any kind would be                     
 transferred.  MR. PHELPS explained that a federal claim constitutes           
 a federal inholding and the land under the federal mining claim is            
 not actually conveyed to the state until the federal claim is                 
 relinquished.  The miner would have a choice of mining under a                
 federal claim or transferring to a state claim.                               
                                                                               
 GERRY GALLAGHER, Department of Natural Resources, said if land in             
 a township was conveyed to the state, it would be conveyed                    
 excluding those existing federal mining claims.  MR. GALLAGHER said           
 the state probably has several thousand federal mining claims that            
 are essentially inholdings within the state selections.                       
                                                                               
 SENATOR MILLER asked what would be the benefit of staying with a              
 federal claim.  MR. GALLAGHER said there are two fundamental                  
 differences - a federal claim has the right to patent and there is            
 no provision in Alaska law for that; and second, a federal mining             
 claim carries with it extralateral rights.  That means if you stake           
 your claim on a vein, your rights travel with that vein wherever it           
 goes.  Under state law there are vertical sidewalls so that you               
 only own your claim.  Congress may change federal mining law,                 
 however.                                                                      
                                                                               
 SENATOR FRANK asked about the royalty on federal claims.  MR.                 
 GALLAGHER said there is no royalty on federal claims, but numbers             
 are being discussed from 5% to 12% of the gross.  The state royalty           
 is 3% of the net.                                                             
                                                                               
 MR. GALLAGHER said the Department supports this bill.                         
                                                                               
 SENATOR FRANK noted that the state would pick up some revenue from            
 those claims that converted.  MR. GALLAGHER said that was correct.            
                                                                               
 SENATOR ZHAROFF asked if anyone opposed this measure.  MR. PHELPS             
 answered that he knew of no one opposing it.                                  
                                                                               
 Number 133                                                                    
                                                                               
 SENATOR LEMAN moved to pass the CSHB 333 from Committee with                  
 individual recommendations with the accompanying fiscal note.                 
 There were no objections and it was so ordered.