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.