Opinion ID: 1198963
Heading Depth: 3
Heading Rank: 1

Heading: Acquisition of State-held mineral interests

Text: The landowners acquired ATS 201 subject to the State's reserved mineral rights and its right to explore for and extract those minerals. AS 38.05.125(a); [6] Hayes v. Alaska Juneau Forest Indus., 748 P.2d at 337 (holding that AS 38.05.125(a) reserved to the State the mineral rights in ATS 201). The superior court, in a lengthy and thoughtful memorandum decision, held that AS 38.05.130 and 11 AAC 96.140(10) obliged Hayes to either obtain the landowners' consent or post a surety bond before entering in 1982 to stake Taku Nos. 1 and 2. The court concluded that Hayes's failure to do so invalidated those two claims, requiring ejectment. [7] It implicitly reasoned that (1) staking is exploration, an activity reserved by subsection.125(a), and (2) section .130 applies to the exercise of any right reserved under subsection .125(a). [8] Hayes attacks these conclusions on various grounds. [9] Most fundamentally, he asserts that section .130 did not apply to his 1982 entry to stake. He reasons that section .130 only imposes obligations on the exercise of rights reserved pursuant to AS 38.05.125(a), and that the right to enter to stake a mineral location is not a right reserved by subsection .125(a). [10] We begin our analysis by recognizing that statutes and regulations govern how others may acquire the State's mineral rights. Discovery and appropriation are the basis for acquiring such rights. Alaska Const. art. VIII, § 11. [11] Alaska Statute 38.05.185(a) provides that the acquisition of rights in deposits on State land of minerals subject to location is governed by AS 38.05.185  38.05.275. [12] Gold is a mineral subject to location. 1 American Law of Mining § 8.01[3], at 8-4 (The Rocky Mountain Mineral Law Foundation ed., 2d ed. 1994). Subsection .185(a) also provides that State land may not be closed to mining or mineral location unless the DNR commissioner finds that mining would be incompatible with significant surface uses and unless AS 38.05.300 (which authorizes the commissioner to close State lands to mining, mineral entry or location, mineral prospecting, or mineral leasing under specified conditions) is also satisfied. Alaska Statute 38.05.185(a) thus keeps State land open to mineral location unless the commissioner specifically closes it. Under AS 38.05.195, [r]ights to deposits of minerals subject to AS 38.05.185-38.05.275 in or on state land that is open to claim staking may be acquired by discovery, location and recording. [13] Likewise, leasehold preferences in State mineral lands available only for leasing may be acquired by discovery, location and recording.... AS 38.05.205(a). State land is broadly defined to mean  all land, including shore, tide and submerged land or resources belonging to  the State. AS 38.05.965(19) (emphasis added). State land thus includes the State's reserved mineral estate. [14] See also 11 Alaska Administrative Code (AAC) 86.135 (1996). The mineral estate in ATS 201 was consequently state land. [15] Justice Rabinowitz's dissent relies on State v. Weidner, 684 P.2d 103 (Alaska 1984), but that case did not concern the effect of the subsection .125(a) reservation, or any question whether the State's reserved mineral interest remained state land. Our interpretation here is supported by a 1993 Attorney's General opinion: Because the term `state lands' is defined to include all lands and interests in lands belonging to or acquired by the state, AS 38.05.965(19), all state-owned severed mineral interests, including reserved mineral interests, are subject to location. 11 AAC 86.135. 1993 Informal Op. Att'y Gen. 563, 564. See also Moore v. State, 553 P.2d 8, 25 (Alaska 1976), where we stated: We note that sections found throughout the Alaska Land Act utilized the word land in such a way that it could only be interpreted as encompassing resources within the scope of its meaning. Admittedly, in certain provisions of the act the word land is used in a manner inconsistent with the statutory definition of the term. However, instances of such inconsistencies are few in number, and bear no special contextual significance to AS 38.05.305. Under the definition section of the act, statutory definitions are to apply unless the context otherwise requires. We find nothing about the context of AS 38.05.305 which would imply that the statutory definition of the word land should be disregarded. (Footnotes omitted.) Justice Rabinowitz's dissent argues that section .185 was not intended to allow staking of claims on lands conveyed by the State. The State's amicus brief states what we believe to be the proper reading of the mining code: When the state conveys a surface estate to another party, the state is required to reserve both the minerals and the right to explore and develop them. Mineral interests on these `split estate' lands are subject to the location of state mining claims in the same manner as on lands owned entirely by the state.  (Emphasis added.) See also 3 American Law of Mining § 71.03[5], at 43 (2d ed. 1984 & 1997 Supp.). Justice Rabinowitz is concerned that location activities will interfere with quiet enjoyment of surface rights. Dissent at 53-55. Owners of surface estates must anticipate that the State's reserved rights might someday be exercised. The dissent's concerns should not alter the result required by the mining code. They should instead be addressed either by a finding by the commissioner that mining would be incompatible with surface use, AS 38.05.185(a), or by a claim for appropriate remedies for undue interference with those rights. The dissent also relies upon the history of the 1981 amendment of AS 38.05.185. As we read that history, however, the legislature in 1981 simply limited the commissioner's discretion in determining what mineral lands would be exclusively subject to entry under lease. The dissent argues that the amendment applied only to lands in which the State retained the surface estate. If so, the amendment is irrelevant here because it did not limit the commissioner's discretion in dealing with land conveyed by the State subject to the subsection .125(a) reservation. The amendment did not change the definition of state land.