By Eric L. Martin
For many Americans, the last half of August brings into intense focus all that the end of summer entails: back to school, Labor Day barbeques, etc. However, to those in the western U.S. mining industry, the last half of August also implicates the critical task of ensuring that unpatented federal mining claims do not become automatically void by operation of law for failure to timely pay annual maintenance fees.
For its first 100-plus years, the General Mining Law of 1872’s requirements for maintaining an unpatented mining claim on public lands did not materially change. Generally speaking, prior to “patenting” the mining claim (i.e., the federal government conveying title to the subject land to a claimant who discovered a valuable mineral deposit within the claim), federal law called for a claimant to perform $100 of “assessment work” by September 1 each year. (30 U.S.C. § 28. Most labor or improvements conducted in good faith toward developing a claim into a paying mine qualified as assessment work.)
The Federal Land Policy and Management Act (FLPMA) of 1976 changed that paradigm by imposing new federal filing requirements on assessment work. Under Section 314 of FLPMA (43 U.S.C. § 1744), on or before December 30 each year a claimant needed to (a) record in the local county records an affidavit that such assessment work had been timely performed and (b) file a copy of that affidavit with the applicable U.S. Bureau of Land Management (BLM) office. Failure to timely file these instruments conclusively constituted an abandonment of the subject claim.
Less than 20 years later, Congress began fundamentally changing the maintenance requirements, the result of which is the current mandate that, with one exception discussed below, an annual maintenance fee – currently $165 for each unpatented lode claim or 20 acres subject to a placer claim – must be paid by September 1 each year in order to maintain the claim for the assessment year that begins that same day. (30 U.S.C. §§ 28f(a), 28j(c). Maintenance fee payment is in lieu of performing assessment work and making those FLPMA filings.) Failure to timely pay the maintenance fee, though, automatically renders the subject claim null and void by operation of law (30 U.S.C. § 28i).
As a result, each summer the BLM receives thousands of maintenance fee payments. According to the U.S. Department of the Interior, the BLM collected over $65 million from nearly 391,000 unpatented mining claims in fiscal year 2020. Notwithstanding the continuing debate over reforming the General Mining Law of 1872, this is a profit-generating program for the federal government, as the BLM’s fiscal year 2020 budget for “Mining Law Administration” was approximately $40 million.
Each summer someone invariably fails to timely pay the maintenance fee and then challenges the BLM’s determination that the claim is null and void. To take just one recent example, in Davis, 198 IBLA 128 (2022), the claimant mistakenly submitted a check for $40 less than the required maintenance fee amount, offered after the September 1 deadline to remedy his mistake, and had his state legislator encourage the BLM to allow such remedy. The Interior Board of Land Appeals had none of it, reiterating once again that there is no legal authority “to excuse a mining claimant’s lack of compliance with the maintenance fee…requirements, extend the time for compliance, or afford any relief from the automatic claim forfeiture provisions in the law. This is true ‘regardless of the reason that a claimant misses the deadline.’”
There is the one exception to payment of annual maintenance fees. Under the so-called “small miner exception,” a claimant (together with any related parties) having no more than 10 claims can perform annual assessment work instead of paying the maintenance fees. 30 U.S.C. § 28f(d); 43 CFR pt. 3835. Navigating this exception’s requirements, which include making FLPMA filings, can be complicated and fraught with risk. For example, in King, 198 IBLA 134 (2022), the claimants timely filed with the applicable BLM office their FLPMA affidavits for the 2021 assessment year, but the BLM had no record of timely receiving the claimants’ maintenance fee waiver certifications for the 2022 assessment year. The IBLA rejected the claimants’ arguments based on copies of the maintenance fee waiver certifications in the claimants’ files and the weight of the envelopes received by the BLM, which the claimants asserted demonstrated that the envelopes contained the requisite certifications. Because the claimants did not provide “any corroborating evidence” that the maintenance fee waiver certifications had actually been filed, the claimants did not “overcome the presumption that their waiver certifications were not timely filed” and their claims were null and void by operation of law.
Avoiding annual maintenance requirements by patenting mining claims under the General Mining Law of 1872 has not been a viable option for nearly 30 years. Since the early 1990s, Congress has used appropriations bills to prohibit the BLM from accepting new patent applications. (See, e.g., Consolidated Appropriations Act, 2023, Pub. Law No. 117-328, 136 Stat. 4459, § 404(a) no funding “shall be obligated or expended to accept or process applications for a patent for any mining or mill site claim located under the general mining laws.”).
Shockingly, though, the BLM is still processing patent applications received on or before September 30, 1994 when this now long-running moratorium first took effect. Earlier this year an individual, whose now-deceased parents had filed a patent application in the mid-1980s, shared with me that the application is still pending with the BLM nearly 40 years later. Courts, though, have recognized that (a) the BLM is obligated by law to issue a patent if a proper application was filed, the requisite fee was paid, and the BLM has determined that the subject claim is valid, and (b) not making a decision on a pending patent application for 20 years constitutes an unreasonable delay. (Swanson v. Babbitt, 3 F.3d 1348 (9th Cir. 1993); Sims v. Ellis, 972 F. Supp. 2d 1196 (D. Idaho 2013).)
For anyone with unpatented federal mining claims, do not put end of summer planning ahead of making sure those mining claims are timely maintained by September 1. Take action to avoid the risk of losing the claims, and that Labor Day barbeque will be all the more enjoyable.
Law columnist Eric Martin is a partner at Stoel Rives LLP and leads its Natural Resources Industry Group. His practice focuses on transactions and development of subsurface resources and renewable fuels, such as renewable natural gas. Eric has handled transactional, development and operational issues for a variety of projects on both private and public lands, including mining ventures for precious and base metals, industrial minerals and construction materials. He can be reached at [email protected].