HOUSE BILL REPORT

SSB 5193

BYSenate Committee on Natural Resources (originally sponsored by Senators Peterson, Sellar, Stratton and Barr)

Regulating mining on public lands.

House Committe on Natural Resources

Majority Report:  Do pass.  (18)

      Signed by Representatives Sutherland, Chair; K. Wilson, Vice Chair; Amondson, Ballard, Basich, Beck, Belcher, Bumgarner, Cole, Hargrove, Haugen, R. King, Meyers, Sayan, Schmidt, C. Smith, Spanel and S. Wilson.

House Staff:Bill Koss (786-7129)

AS PASSED HOUSE MARCH 27, 1987

BACKGROUND:

The Department of Natural Resources leases state lands for mining exploration and development.  Some of the statutes regulating mining have not been updated since 1927.  There is concern that with increasing interest in mining and recreational prospecting, the Department of Natural Resources needs clear authority to protect the state's interests and to ensure environmental protection. The department believes existing procedures are cumbersome and provide inadequate authority for the department to reject applications for mining on lands where mining is inappropriate.

SUMMARY:

The Department of Natural Resources (DNR) has authority to issue permits and leases for prospecting and mining valuable minerals.  Surface resources and energy commodities are leased under other authority and are excluded here.  The statutory minimum size of land allowed for lease is established at 640 acres or an entire government surveyed section.

The DNR is authorized to issue placer mining contracts at public auction for mining known mineral deposits.  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 rejection is in the best interest of the state.

The discretionary site investigation and report that DNR prepares is eliminated since the site inspection is conducted 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.

DNR's bonding authority is eliminated.  In its place, the DNR state land leases and mining contracts will include the reservation of rights language established by law in 1911 which establishes the requirement that the surface owner be compensated.

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 minimum amount of annual prospecting work and 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.  Early termination of prospecting leases is provided at the lessee's request.  The requirement that the term of prospecting lease be deducted from the term of subsequent mining contract is eliminated.  A deadline is established for filing an application to convert a prospecting lease to a mining contract.  The filing period for the filing is extended from 60 to 180 days.

The lessee is required to submit a development plan including a reclamation plan 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 provide information obtained during the prospecting period to the department.  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 current 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.  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.

Fiscal Note:      Attached.

House Committee ‑ Testified For:    Cleve Pinnix, Department of Natural Resources; and J. T. Quigg, Northwest Mining Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    DNR faced a problem administering mineral leases using 20-year old laws.  They worked with the mining industry and recreational prospectors to develop a system acceptable to everyone.  The proposal provides flexibility to operators, more income to DNR, adequate environmental protection, and a more simple system under which everyone can operate.

House Committee - Testimony Against:      None Presented.