Here's a way Alaska can make a few bucks

Recently, an interesting question about AS 38.05.275 came to my attention, and it seems to have implications for a number of holders of federal claims situated within State of Alaska-selected land. The statute allows an Alaska mining location to be placed on top of an unconveyed valid federal mining claim situated within a selection. Until the federal claim is abandoned or declared invalid, the overstaked Alaska claim is "at risk" and conveys no rights to the locator, except for a priority right to mine the land if it becomes open to entry under state law.

The purpose of the statute presumably is quite clear. State selections can be peppered with doughnut holes of withheld land due to the presence of the federal claims, and can represent a management issue where the land around the withheld land is covered with active state claims that are the subject of a major exploration effort.

It makes little sense to have different management schemes on a property being brought into production as a single mine. Furthermore, as the federal managers seem to gravitate toward making the rules governing federal claims more stringent, many individuals conclude their best interests are served by abandoning their federal claims with the expectation that their overstaked state claims will spring to life, and the company can operate under state rules as opposed to federal rules.

Neither the statute nor the regulation which implements this statute requires that the locator of the top-filed claim be the owner of the underlying federal claim; and therein lies the rub.

It appears that there are a significant number of federal mining claims within state selected lands in Alaska that have been top-filed by "at risk" state claims. Since the state does not own the land upon which the top-filed claims are located, it cannot collect rent or royalties from the state claimholder. Nor should it, because the owner of the federal claims is already making payments to the federal government, and it would be unjust for both the United States and the state to collect rent from the same parcel of land.

Likewise, there is no sunset provision for the state top-filed claims; therefore, the top-filer can maintain his claims effortlessly forever, waiting for the federal claimholder to stumble or for the federal government to invalidate the claims, thereby unjustly enriching the top-filer.

In brief, this appears to be a statutorily endorsed plan for jumping claims.

Perhaps it is time that the Alaska Legislature took a look at this question and ensure that the statute actually says what was intended. After all, if the federal claims are converted to state claims, at least the state will get the rent. Of all the issues pending before the Legislature, this is admittedly a small one; however, since the Alaska Department of Natural Resources' regulations do not resolve it, surely some vehicle can be found upon which to hang this Christmas ball.

Seasons' greetings to one and all; and may commodities prices exceed your breakeven by a large margin in 2015!