HB 344-MINING FEES/LABOR/ROYALTIES/ABANDONMENT  CHAIR SCOTT OGAN called the Senate Resources Standing Committee meeting to order at 3:30 p.m. Present were Senators Thomas Wagoner, Ben Stevens, Fred Dyson, Ralph Seekins, Kim Elton and Chair Scott Ogan. Senator Georgianna Lincoln arrived at 3:45. The first order of business to come before the committee was HB 344. REPRESENTATIVE HUGH FATE, sponsor, noted that he supported the two proposed amendments and explained that the bill simply corrects a situation in which a person makes a mistake or, for some reason, can't get into the recorder's office to record his assessment and other paperwork required by the department for mining claims. If the filing does not occur on time, the claim immediately becomes abandoned, making it open to staking or location by someone else. Also, if that mistake has been made and someone has overfilled the claim, the person who overfilled it is the new claimant of the property. This legislation allows for a true error to be made so that, if there has not been an overfilling or the property has not been located, a miner has the opportunity to pay a penalty and refile. The penalty would be equal to the last year's royalty and assessments on the property. So, he not only has to pay the current fee, but a penalty equal to that fee, as well. Being a former miner, he has seen people coming into the recorder's office 10 minutes late and not being able to record. So, all their equipment is sitting out there, their cabins and everything else. If somebody knew that this was going to happen, they could actually go in and locate those claims. This gives redress for that. It doesn't mean that they have an opportunity at all to delay coming for 30 days.... It allows them to have redress. But, if somebody did topfile on one of their claims, it's up to them to know they were topfiled and it's up to them to know that the paperwork has to be clean, because if they do not file in a timely manner and they are topfiled, that claim would belong to the person who topfiled. By the same token, if they don't file - and even if they make an error in getting there in time... usually, it's about a 24-hour mistake - either they got the dates mixed up or they just can't get in for some reason - broke down or whatever, they still, if somebody comes in and claims that it's open ground, even though they may have redress, it's still open ground. So, it doesn't alter at all the law, which allows somebody else to file a claim on open ground.... It's a real step for a lot of the small miners out there who have this concern and have lost claims by not being able to get in. SENATOR KIM ELTON asked what the typical rent is for a claim. REPRESENTATIVE FATE replied, "If they are productive, they would have to pay royalty; they would have to pay a labor assessment. I think it's $200 on a two-year claim." SENATOR ELTON asked if this would allow a miner to cure the problem of a late filing up to any period of time as long as nobody has filed a top claim or a claim on the claim. REPRESENTATIVE FATE said that is correct. CHAIR OGAN asked if he had statistics on how often this has happened. REPRESENTATIVE FATE replied that he had been topfiled and from his own experience, you usually know when someone has topfiled, because they do it year after year hoping you make a mistake. When a miner files his assessment at the recorder's office, he can see if he has been topfiled. "You try to make sure your paperwork is clean." He has seen a number of miners come in one day late because they get the dates confused. He has also actually seen instances where miners get to the recorder's office before the doors close. Bob Loeffler, Director, Division of Mining, Land and Water indicated this happens quite frequently. CHAIR OGAN asked, if a miner decides to abandon a claim and another person decides to topfile and then that first miner changes his mind, is there a time limit for paying the penalty and refiling. He pointed out that HB 344 has no time limit. REPRESENTATIVE FATE said the first miner couldn't get his claim back if it had been topfiled by someone else. CHAIR OGAN said he is still missing how HB 344 changes that. REPRESENTATIVE FATE sought hard to enlighten him saying it doesn't change that aspect of it. This will help a small miner who has made a mistake by being a day late or some equivalent small blunder. In all circumstances, if no one else has topfiled, the claim becomes open ground and under current statute, he can't refile on his property for a full year. SB 344 allows him pay a fine and refile. CHAIR OGAN supposed that this is like someone who pays his taxes late and, therefore, has to pay a stiff penalty, too. SENATOR GEROGIANNA LINCOLN arrived at 3:45 p.m. She said she understood what Representative Fate was trying to do and asked, "What kind of person would actually take advantage of a bill like that and, then, what's the grace period you've got in here for a late filing?" MR. JIM POUND, staff to Representative Fate, replied that the department has indicated that about 5 - 15 people per year miss the filing deadline. REPRESENTATIVE FATE added that there really isn't a grace period per se. If that ground is open after he's made the error in not filing in a timely manner, it's not a grace period. It's open ground.... They're usually in there within a day or, at the latest, two. SENATOR LINCOLN said there is a reason for deadlines and asked for examples of other circumstances in which a miner might file late. REPRESENTATIVE FATE replied weather factors, sickness, injuries, and, commonly in November, people would think it was the 31st and be exactly 24-hours late. It's frequent enough to be a concern and yet it's not that prevalent, but 5 - 15 is not a small figure, really compared to the number of small mines that we have today out there, especially in the Interior. When I started mining, there were 3,000 people in the small mining industry. Within three years, there were 300.... He said that the Department of Natural Resources and the Mining Association support this legislation. SENATOR LINCOLN asked if a person has to physically go in and file. REPRESENTATIVE FATE replied that they have to go in physically. SENATOR RALPH SEEKINS asked if there is any requirement for notice of topfiling. REPRESENTATIVE FATE replied no. He said that sometimes a person who topfiles doesn't know that the ground has already been staked. He also knows of people who topfile in huge blocks just trying to capitalize on someone else's mistake. SENATOR ELTON asked if someone doesn't make it in by the deadline and wants to cure the problem six months later, is the claim renewed for 18 months or for two years from the six-month period. REPRESENTATIVE FATE replied that it would be a new filing for a two-year basis. He reminded the committee that the penalty for late filing is equal to one year's rent, which is $100 - $200. SENATOR FRED DYSON said he thought that a miner already has a huge incentive to file on time and the penalty would add to that. He moved amendment 1 on page 2, lines 10 - 13, as follows: Page 2, lines 10-13 10(b)...mining claim, or leasehold location[, or 11 prospecting site] that includes all or part of the mining claim, or leasehold location [, or 12 prospecting site] abandoned under (a) of this section, or  the area is closed to mineral location under AS 38.05.185  - 38.05.275, a person may cure.... The revised subsection would read as follows: *Sec.2. AS 38.05.265 is amended by adding a new subsection to read: (b) Unless another person has located a mining claim, or leasehold location that includes all or part of the mining claim, or leasehold location abandoned under (a) of this section, or the area is closed to mineral  location under AS 38.05.185 - 38.05.275, a person may cure the failure to record or pay that constituted the abandonment and cure the abandonment by (1) properly recording a certificate of location or a statement of annual labor, paying any required annual rental, and paying any required production royalty; and (2) paying a penalty equal to the annual rent for the mining claim, leasehold location, or prospecting site that was abandoned under (a) of this section. MR. POUND explained that there is no such thing as abandonment of a prospecting site. They just expire after two years. MR. CAMERON LEONARD, Assistant Attorney General, said he had worked with Bob Loeffler at DNR and Mr. Pound on this language. It addresses two different issues. The first being that prospecting sites aren't abandoned in the same way as mining claims and leasehold locations and so there is no need to try to cure them under the new language in 265(b). But, the more significant problem that this amendment addresses is the possibility that after a claim is abandoned, if for some reason the area is closed to mineral location by the state, if someone were to come back in at that point and try to cure the abandoned claims without this amendment, there might be an issue that they have a right to do so, even though the area had been closed to mineral location.... Those are the two changes and DNR supports both of those changes.... CHAIR OGAN asked if this amendment would prevent a miner from coming back into the Girdwood area that was closed to minerals last year, for instance, and saying he had for some reason not filed his claim. "Would this keep him from getting the claim activated again?" MR. LEONARD exclaimed that it would have exactly that effect. SENATOR GEOGIANNA LINCOLN asked if "prospecting site" on line 18 was applicable to section (b)(2). MR. LEONARD replied that she was correct and that language should be deleted. MR. POUND agreed. SENATOR LINCOLN moved to delete "prospecting site" from the proposed amendment in (b)(2). There were no objections and it was so ordered. SENATOR FRED DYSON moved to pass SCS HB 344(RES) from committee with individual recommendations and accompanying fiscal note. There were no objections and it was so ordered.