Earthquake Disrupts Mining Filings and Payments: What You Need to Know

The 2018 deadline to record affidavits of labor and pay rental on State of Alaska mining claims was disrupted by a 7.0 earthquake near Anchorage at 8:29 a.m. on Friday, November 30. As a result of the earthquake, the Department of Natural Resources’ Anchorage office and the State of Alaska Recorder’s Office closed, preventing the payment of rent and the recording of affidavits on the apparent last day to do so.

However, under existing DNR regulations, when the filing office is officially closed on the last day to make a filing or payment, the time for filing or paying is extended to the next day the office is open to the public:

When the last day of the time for filing or payment falls on a day the designated filing office is officially closed, the time for filing is extended to the next day the office is open to the public.
11 AAC 88.130.

State offices in Anchorage and Palmer are also closed today, December 3, 2018, and a phone call to the Juneau Recorder’s Office revealed that the servers are offline so no recording district can record documents today. This means that affidavits of labor that are recorded on Tuesday, December 4, 2018, should be considered timely. Similarly, payment of claim rentals should be considered timely if paid on Tuesday, December 4, 2018.

We are working with the Division of Mining, Land, and Water within DNR to have a formal statement issued acknowledging the effect of 11 AAC 88.130 extending the deadline for recording a 2018 affidavit of labor and paying rent.

We are aware that some claim holders submitted affidavits of labor for recording electronically and are awaiting acceptance and confirmation of those attempts to record. If you have not received confirmation from your recording district that your affidavit was accepted for recording by midday of the extended deadline, we suggest that you e-record the affidavit again.

How Will Alaska Pay its Rebatable Production Tax Credits?

Alaska’s rebatable production tax credit program was created by state legislators to be an incentive for explorers and small producers to invest in oil and gas exploration and production in the state but was hurt by its own success when oil prices dropped. The legislature repealed the program but a queue of valid outstanding credits still awaits payment.

My latest article for State Tax Notes:

  • Provides an overview of the rebatable production tax credits, which were crafted specifically to encourage exploration and development by explorers, small producers and new entrants to the state.
  • Outlines the status of funding to pay down the tax credit queue and notes that the explorers and small producers the tax credit was meant to lure have been the ones hardest hit by the lack of a significant appropriation to the oil and gas tax credit fund over the last two years for purchase of the outstanding balance of credit certificates.
  • Discusses H.B. 331, introduced in February 2018 by Alaska Gov. Bill Walker, which would establish the Alaska Tax Credit Bond Corp. in the Department of Revenue and authorize it to issue up to $1 billion in bonds to finance purchases of the oil and gas tax credits.

Check back soon for a detailed look at H.B. 331 and an update about the challenges the bill is facing as to its constitutionality.

Read the article here.

Originally published as “The Battle Over Payment for Alaska’s Tax Credits” on September 10, 2018, by State Tax Notes.

Links to my earlier columns can be found here and here.

The Battle Over the Alaska Oil and Gas Production Tax Credit

Alaska’s oil and gas production tax has been subject to continuing debate and change as lawmakers and policymakers struggle with balancing budgets in times of volatile oil prices while also encouraging the investment necessary to monetize the state’s resources to run its government, create jobs, build and maintain infrastructure, and promote economic activity. In my second article as a columnist for State Tax Notes, I provide:

  • A review of the oil and gas production tax and how it has evolved into several different structures in response to the locations of resources, population centers and developed infrastructure within the state.
  • An overview of how tax credits have evolved since 2005 — when the primary credit was meant to encourage exploration for oil and gas — as the Alaska Legislature revised the production tax and enacted new credits over the years designed to spur exploration and development activity, attract new entrants to the state, and increase production in existing fields.
  • A look at how — even as the production tax credit structure has proved to be an effective incentive for oil and gas exploration, development and production — lawmakers and policymakers, faced with low oil prices, rising budget deficits and the price tag that came with rebatable tax credits, have targeted some of the credits for reduction or elimination.

Read the article here.

Originally published as “Alaska’s Tax Credit Showdown” on April 2, 2018, by State Tax Notes.

A link to my first column can be found here.

Trump’s BLM Cannot Delay Implementation of Oil and Gas Methane Rules after Effective Date

On October 4, 2017, the United States District Court for the Northern District of California held that the Bureau of Land Management (“BLM”) cannot postpone implementation of natural gas methane emission rules because such action would violate the Administrative Procedure Act (“APA”).  Plaintiffs – the State of California, the State of New Mexico, and a coalition of seventeen conservation and tribal citizens groups (jointly “Plaintiffs”) – initiated the lawsuit in two separate actions.  Plaintiffs argued that postponing implementation of the BLM’s Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule (“Final Rule”) after its effective date violated Section 705 of the APA.

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Sage-Grouse: Short Flight for Pending 10 Million-Acre Withdrawal from General Mining Law?

Secretary of the Interior Zinke has directed that the Bureau of Land Management immediately begin implementing the recommendations in his Sage-Grouse Review Team’s report, which was was released today, concerning the 2015 greater sage-grouse amendments to federal land use management plans. (Prior post on Sage-Grouse Review Team here.) Among other things, such as coordinating federal mitigation policy with state mitigation approaches, the Trump Administration will now be moving to “[r]emove all [sagebrush focal areas (SFAs)] and the management actions tied to SFAs.” This would include the pending withdrawal for up to 20 years of over 10 million acres of SFAs on public lands in six western states from mineral location and entry under the General Mining Law .  (Prior posts on withdrawal here and here.) The report also recognizes a short-term “[n]eed to clarify under what circumstances or how the [land use management] plans recognize valid existing rights.” Because valid existing rights (i.e., a mining claim within which a valuable mineral deposit has been discovered) are relevant if a withdrawal is approved, this recommended clarification indicates that the Trump Administration may well withdraw the SFAs for a short time while it moves forward with amending the plans to remove the SFAs altogether. Continue Reading

U.S. Court of Appeals Upholds MSHA’s Right to Obtain Personnel Records from Mine Operators

On July 18, in Hopkins County Coal, LLC v. Perez, the U.S. Court of Appeals for the Sixth Circuit issued an opinion upholding two citations and an order issued to a mine operator, Hopkins County Coal, for its refusal to turn over certain personnel records requested by the Mine Safety and Health Administration (MSHA) during a § 105(c) discrimination complaint investigation. The mine operator challenged the request for the records on several grounds, arguing that the Secretary of Labor overstepped his authority because the records were not among those that the Mine Act requires operators to keep and also that neither the miner nor MSHA had ever told the mine operator what the factual basis was for the miner’s discrimination case. Continue Reading

Federal Bill Proposes Streamlined Pipeline Permitting, Vesting Authority in FERC

On July 19, 2017, Republicans in the U.S. House of Representatives passed legislation that grants the Federal Energy Regulatory Commission (“FERC”) increased autonomy over pipeline approvals.  The bill, Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 2910), is aimed at streamlining the federal permitting process for pipeline approvals.

H.R. 2901 would specify timeframes and procedures for FERC and other affected agencies to follow in conducting environmental reviews related to natural gas pipelines.  The bill would give FERC the authority to designate which other agencies will participate in the permitting and environmental review process, and FERC would hold primary authority by setting the terms of environmental reviews, requiring other federal agencies to defer to FERC.  In addition, all National Gas Act reviews would be required to proceed concurrently and finish within 90 days of the environmental review, unless otherwise mandated by law.

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Reconsidering Helium Production on Federal Lands Amid Privatization of Federal Helium Reserve

On Wednesday the Bureau of Land Management (BLM) will auction helium stored in its Cliffside Field underground storage facility in west Texas (aka the Federal Helium Reserve).  This annual auction under the Helium Stewardship Act of 2013 is part of a privatization effort that began back in 1996 and will culminate with the BLM divesting itself of that facility by 2021.  At the same time, concerns about helium supply are again rising, as production from Qatar, which accounts for 25% of global helium supply, was interrupted last month by an economic boycott in the region.  These events are prompting Congress to consider changing the nearly century-old treatment of helium under the Mineral Leasing Act of 1920.

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Senate Proposes Legislation to Modernize Federal Energy Policies

On June 28, 2017, the Senate introduced a bill that aims to revitalize and overhaul various federal energy and natural resources policies.  Senate Bill 1460 (S.1460), sponsored by Senators Lisa Murkowski (R-Arkansas) and Maria Cantwell (D-Washington), broadly proposes reform of United States policies on topics such as energy efficiency, supply and conservation.  A key highlight of S.1460 is modernization of the electric grid, an issue that has often been touted as a national security concern.  Further, on the conservation side, the bill would establish a National Park Maintenance and Revitalization Fund.  While details of the bill are still forthcoming, the bill’s authors state that S.1460 will lay out a plan to strengthen the nation’s energy infrastructure.

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With Mining Law Segregation on 10 Million Acres to Expire in Three Months, Interior Forms Sage-Grouse Review Team

Late Wednesday Secretary of the Interior Zinke signed Secretarial Order 3353 establishing a Sage-Grouse Review Team to review the Obama Administration’s 2015 amendments to federal land use management plans.  To avoid listing the greater sage-grouse under the Endangered Species Act, those plan amendments had proposed that over 10 million acres of “sagebrush focal areas” on public lands in six western states be withdrawn from mineral location and entry under the General Mining Law for up to 20 years.  The new Sage-Grouse Review Team’s work will include recommending changes to the amended plans that “give appropriate weight to the value of energy and other development on public lands within BLM’s overall multiple-use mission.”  Comprised of representatives from various Department of the Interior agencies and working with the U.S. Forest Service and state agencies, the Sage-Grouse Review Team is to provide a written report on or before August 6, 2017.

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