SENATE BILL REPORT

SB 5193

BYSenators Peterson, Sellar, Stratton and Barr

Regulating mining on public lands.

Senate Committee on Natural Resources

Senate Hearing Date(s):January 27, 1987; February 9, 1987

Majority Report:  That Substitute Senate Bill No. 5193 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Owen, Chairman; DeJarnatt, Vice Chairman; Barr, Craswell, McDonald, Metcalf, Patterson, Stratton.

Senate Staff:Vic Moon (786-7469)

                  February 9, 1987

AS REPORTED BY COMMITTEE ON NATURAL RESOURCES, FEBRUARY 9, 1987

BACKGROUND:

The Department of Natural Resources has the authority to lease public lands for mining exploration and development.  The statutes regulating mining have not been updated and there is concern that with increases in interest in mining and with interest in recreational prospecting, the state needs to clarify the Department of Natural Resources' authority and to insure environmental protection for lands which are mined.  There is concern that the existing procedures are cumbersome and there is no authority for the Department to reject applications for mining on lands that are managed for other purposes.

SUMMARY:

The proposed legislation grants the Department statutory authority to issue permits and excludes surface resources and energy commodities from mineral leases.  The statutory minimum size of leases is eliminated and the tract is established at 640 acres or an entire government surveyed section.

The Department is authorized to issue placer mining contracts for gold and mining for known mineral deposits at public auction. The requirement that the first years' rental is payable at the time of the application being filed is eliminated.  The Department is authorized to reject an application and refund the application fee if it is in the best interest of the state to do so.

The discretionary site investigation and report which the Department of Natural Resources presently conducts is eliminated since the site inspection is presently accomplished as part of the State Environmental Policy Act inspection process.  The lessees obligation to make satisfactory arrangements with the holder of surface interests prior to commencing operations is clarified.

The state Department of Natural Resources' bonding authority is eliminated and a procedure is substituted which allows a direct judicial resolution of disputes.

The term of prospecting leases is extended from a maximum of two years to a maximum of seven years.  The Board of Natural Resources is authorized to set rental rates and rental policy.  A mining contract must be obtained prior to the commencement of commercial mining.  The Board of Natural Resources is authorized to set the amount of annual prospecting work and the Department may provide for payment of money in lieu of annual prospecting work for up to three years of the seven year term of the prospecting lease. Provision is included to allow early termination of prospecting leases at the lessee's request.  The existing requirement that the term of prospecting lease is deducted from the term of subsequent mining contract is eliminated.  A deadline is established for filing a timely application to convert a prospecting lease to a mining contract.  The filing period for such filing is extended from 60 to 180 days.

The lessee is required to submit a plan of development including reclamation as part of the application. The term of a mining contract is set at 20 years.  The Board of Natural Resources is given the authority to set a minimum amount of annual development work. The lessee is given the right to terminate a contract upon written notice and giving of information obtained during the prospecting period to the Department of Natural Resources.  The contract will terminate 60 days after notice if all arrears and sums which are due to the Department have been paid.

The lessee is given the right to remove improvements within a specified time period.  There are technical changes regarding the authority of the Department to develop rules, and other language changes to bring the statute into conformity with existing statutory language practice.

Land must be reclaimed after prospecting or mining are completed.  Lessees must pay for any timber removed from the leased premises for mining purposes in accordance with rules established by the Department of Natural Resources.  The Department is authorized to promulgate rules for the issuance of a recreational mineral prospecting permit.  The fees for this new permit will be set by the Board of Natural Resources.

EFFECT OF PROPOSED SUBSTITUTE:

The proposed judicial resolution of disputes is eliminated and a direct method for establishing compensation for the surface owner is substituted.  The DNR state land leases and the mining contracts will include the reservation of rights language established by law in 1911.

Fiscal Note:      available

Senate Committee - Testified: Cleve Pinnix, Department of Natural Resources; J.T. Quigg, Northwest Mining Association