HB 344-MINING FEES, RENTALS, & ROYALTIES CHAIR DAHLSTROM announced that the next order of business would be HOUSE BILL NO. 344, "An Act relating to annual rental fees for mining claims, and providing for reduced royalties during the first three years of production." CO-CHAIR MASEK clarified that [Version I] was before the committee. Number 2517 JIM POUND, Staff to Representative Hugh Fate, Alaska State Legislature, came forward to explain CSHB 344(RES) on behalf of Representative Fate, sponsor. Mr. Fate said the language in the CS more so meets the requirements of what the intent of the original bill was, which was to help the small miner "get back out in the field and stay back out in the field" in order to bring [the small mining] economy back to Alaska. He said the CS allows that if the small miner is late on filing the required paperwork, that person is not automatically deemed to have abandoned the site, and it gives [the small miner] a "cure" in order to prevent that from happening, although the cure doesn't come without penalty. If the paperwork is filed even one day late, the small miner will ultimately have to pay one year's rent on his or her claims. He said the sponsor worked with the Department of Natural Resources (DNR) and the Alaska Miner's Association very closely and it was mutually agreed that this is the direction that will have the most positive impact on the mining industry. Number 2449 REPRESENTATIVE GATTO asked how much money this bill will save the average placer miner. MR. POUND said it is not so much a case of saving money. He said currently, if a miner files his or her paperwork one day late, the state deems that mine as abandoned, and that person will ultimately lose his or her claims. He said the amount of money a particular miner might lose is dependant on how much that person has in his or her claims. Number 2414 REPRESENTATIVE GUTTENBERG asked about extensions for filing late paperwork. He asked how much time a small miner would have under the bill before the mine is considered abandoned. BOB LOEFFLER, Director, Division of Mining, Land and Water, Department of Natural Resources, replied that the way the system has worked since the 1872 mining law, is that the mining year ends on September 30, and the miner has until November 30 to either pay or record his or her annual labor and pay rent [on the mining claim]. If for some reason the miner is late, he said those claims are abandoned by operation of law and there is nothing he can do about it. Mr. Loeffler said it is the miner's responsibility and has been since 1872 to ensure that he or she files the [required paperwork] on time. Every year, he said there are about a dozen people that don't have a good excuse and some of those people come in begging [him] to do [something for them], although there is nothing he can do under the current law. He said this bill would give a miner who pays late the opportunity to cure. Under current law, the mines are abandoned and may not be staked for a year. During that year period someone else may stake that claim and it would become that person's claim. He said the [late paying] miner can cure by paying a penalty. Mr. Loeffler said it's typically the small miners - through error, incompetence, or old age - that "blow it" occasionally, and it averages about a dozen or two dozen a year. He said this [bill] gives those miners an opportunity to keep working. REPRESENTATIVE GUTTENBERG asked what the remedy would be with the passage of this bill. MR. LOEFFLER said it would allow the miner to pay a penalty and the abandonment is cured. REPRESENTATIVE GUTTENBERG asked what the penalty is. MR. LOEFFLER said the miner would have to pay for what is already owed and an additional penalty equal to the annual rent for that mining claim. CO-CHAIR DAHLSTOM offered her understanding that the year's annual rent will be a different number for each individual claim. MR. LOEFFLER said the annual rent depends on how long the claim has been in existence, so there could be a couple of different numbers. Number 2163 REPRESENTATIVE STEPOVICH asked what the time limit is on the penalty. MR. LOEFFLER said there is no time limit, but there would be no real reason to do it after a year because that miner could just re-stake his or her claim. REPRESENTATIVE STEPOVICH asked if anyone could stake the claim. MR. LOEFFLER said the law is really consistent with history and tradition since 1872, and the it works if someone else hasn't asserted contrary rights. If someone else stakes the claim, that person gets the claim. He indicated that a miner could not lose his or her claim if over-staked by another miner as long as the paperwork is current. Number 2105 REPRESENTATIVE GATTO asked how long a person could be late on filing his or her paperwork. MR. LOEFFLER said as long as no one stakes a claim to the contrary and the miner wants to pay all of the penalties, it is fine with him. REPRESENTATIVE STEPOVICH asked if a slow pay is better than no pay. MR. LOEFFLER replied yes. Number 2039 REPRESENTATIVE HEINZE moved to report CSHB 344(RES), Version 23- LS1298\I, Bullock, 2/20/04 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 344(RES) was reported from the House Resources Standing Committee.