Opinion ID: 2639890
Heading Depth: 4
Heading Rank: 2

Heading: A payment-in-lieu of annual labor is timely if postmarked by September 1.

Text: Our agreement with DNR that miners must perform annual labor by September 1 or face forfeiture of their claims does not resolve the issue before us, however, because Chalovich also argues that 11 AAC 86.220(h) unreasonably and arbitrarily requires actual receipt of payment by the September 1 deadline rather than accepting a postmark as the date of payment. DNR acknowledges that it received payment from Chalovich on September 3, 1999 in an envelope postmarked on September 1. Chalovich claims that his payment was timely because it was mailed by the deadline, and he argues that a rigid requirement of receipt unfairly makes miners dependent upon the efficiency of the postal service. While the department did not address this issue in its briefing, the commissioner stated in his July 1, 2002 final decision that the requirement of actual receipt was enacted to treat cash payment the same as actual labor. Whether it is reasonable and not arbitrary for DNR to require actual receipt of payment in lieu of annual labor is a close question, but we must resolve it in favor of Chalovich. We reach this conclusion, despite the deferential standard of review applicable to this regulation, for two reasons. First, a requirement of actual receipt is not necessary to achieve DNR's goal of equal treatment of all claim holders. Second, the state's deadlines are no longer consistent with federal mining law, which has adopted a modified postmark rule, and while we do not require consistency between state and federal mining law, it is persuasive that BLM does not impose such a rigid requirement. We address each reason in turn. DNR argues that it is necessary to require actual receipt of cash payments by September 1 to ensure that all miners are treated equally. We agree that since the $100 cash payment per claim is a substitute for the actual performance of labor, miners should face the same deadlines regardless of how they fulfill the labor obligation. But we cannot agree that the contested regulation is an appropriate way to achieve this goal. In fact, for reasons that we explain below, the regulation actually undermines DNR's goal of equal treatment. Further, by requiring actual receipt of payment by September 1, the department unnecessarily exposes miners to risk of forfeiture due solely to the vagaries of the postal service. [44] This regulation is starkly different from the one proposed by DNR in 1989 when it revised the mining regulations in response to the legislature's amendment of AS 38.05.210 to allow payment in lieu of labor. As originally proposed, the regulation treated as timely cash payments made within ninety days after the end of the labor year. [45] After a citizen commented that the regulation effectively provided some miners with an additional ninety days to complete annual labor, DNR adopted the current regulation which requires receipt of payment on September 1. [46] The record shows that the department appropriately considered the public comment and made changes to its proposed regulations in an effort to ensure that all miners had the same amount of time to complete their annual labor requirements. Unfortunately, in attempting to resolve one potential inequity, DNR created another. There is no apparent reason to impose forfeiture on a miner who mails a payment of cash in lieu of labor on September 1 so long as the date of mailing can be verified through a postmark. Such a miner would receive no advantage over one who actually performs labor, nor would acceptance of a postmark as evidence of performance create an unreasonable delay in notifying DNR that labor was performed. This is particularly true since miners who physically perform labor need not inform the state of such performance until November 30. [47] If anything, the department's requirement of physical receipt means that a miner making a cash-in-lieu payment must make the payment well in advance of the deadline in case delivery of his payment is delayed by the postal service. The likelihood of such an occurrence is non-negligible since most miners are likely to mail payments or affidavits to DNR rather than deliver them in person. [48] If cash-in-lieu is a substitute for annual labor, miners who pay it should have the same time to perform as miners who actually perform annual labor. Accordingly, we hold that a miner who mails payment on or before September 1, and who can verify the date of such mailing through a postmark, has performed annual labor by the end of the mining year. We find further support for our decision today in the law applicable to federal mining claims. While Alaska is not required to adopt the same regulations as the federal government, it is persuasive that BLM has adopted a modified postmark rule precisely to avoid unwarranted forfeiture of mining claims due to delays by the postal service. In 1982 the BLM amended its regulations to treat as timely annual filings that were postmarked by the deadline so long as they were received by DNR within twenty days of the (then) December 30 filing deadline. [49] This amendment did not completely change the receipt rule to a postmark rule, because filings received after the twenty-day period were still rejected even if postmarked by December 30. [50] These regulations were subsequently amended to provide a fifteen-day grace period [51] and to govern payment of annual maintenance fees, [52] which are due by September 1. [53] The legislative history of the 1982 amendments shows that BLM made the changes to save a large number of mining claimants from the loss of their claims due to delays in the mails over the holiday season. [54] BLM noted that strict application of the existing regulation had led to the loss of claims due solely to the heavy volume of holiday mail and unusual delays in delivery times, with annual proofs of labor ... postmarked two or three weeks prior to the statutory December 30th deadlines [being] delivered to the proper BLM office in January, which is after the filing deadline. [55] But BLM was not worried solely about holiday-related mail delays because federal regulations now provide for a fifteen-day grace period for payment of the annual maintenance fee, which is due on or before September 1. Thus when DNR amended its regulations in 1990 to permit payment in lieu of annual labor and to require actual receipt of payment by the September 1 deadline, [56] federal regulations permitted a twenty-day grace period during which an affidavit of labor postmarked by the due date of December 30 could be received by BLM and still be treated as timely filed. [57] While consistency between state and federal mining law is not required, we find it persuasive that the federal government has recognized the injustice of allowing a miner's claims to be forfeited due solely to problems with mail delivery. Because requiring receipt of payment-in-lieu violates DNR's stated goal of equal treatment, because DNR's regulations impose inconsistent and possibly confusing standards for timeliness, and because the federal government has adopted a less rigid standard, we find that the challenged regulation unreasonably fails to treat as timely a payment postmarked by the regulatory deadline of September 1.