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| MEDIA RELEASE Contact: Chuck Cushman ccushman@pacifier.com (360) 687-3087, fax (360) 687-2973 Don Fife CVRP@mindspring.com (760) 248-6583, fax (714) 731-3745
NEW BRINKERHOFF TAX ON MINERAL RIGHTS PROTESTED
SAN BERNARDINO, CA Glen Brinkerhoff of the San Bernardino County Tax Assessor’s office has come up with a new tax that prospectors are calling the “Brinkerhoff Tax.” This is a tax on claims that are being prospected, but not being mined. There is only expenditure of venture capital and no cash flow to pay additional taxes as there would be with an operating mine. The only fair way to know the value of the mining claim value is to drill and block out mineral reserves. However, under federal and state definition, to qualify as “reserves,” government approval based on drilling and blocking is required; this can take decades.
The County tried a similar tax about thirty years ago, and it was dropped as it did not produce the intended revenue, and as it apparently had the fatal flaw of basing the tax on comparative sales of nearby fee simple property. Unpatented mining claims only give the claimant the right to look for minerals. It is much less than a fee simple ownership of private property. Mining claims are “split estate” lands with the federal government owning and controlling the surface rights. The mining claim owner only has a limited right to use the surface to look for minerals. Federal, state, and local government environmental regulations are time-consuming and very expensive. Commonly, it takes 10 to 20 years to open a new discovery.
The odds of finding a valid discovery on any given mining claim are remote -- on the order of 1 to several thousands. According to Homestake Mining’s 100 years of records for North America, only 1 in 5,000 claims evaluated by them ever became a successful mine. Even oil and gas exploration is less risky: the U.S. geological Survey estimates that it takes 100 exploration wells to find a single new onshore oil discovery in America.
The Brinkerhoff Mining Claim Tax apparently bases the tax value on the federal claim “holding fee” and on the amount of money spent on exploration. This fee is a form of federal property tax, and even the Clinton administration’s Attorney General’s opinion to Senator Bennett Johnson, Chairman of the Energy and Natural Resources Committee, found such taxes illegal.
San Bernardino County Taxpayers could be taxed on split estate oil and mineral rights. The Brinkerhoff tax could extend to the possessary interest in mineral rights to private property, and create a nightmare for land owners.
The Brinkerhoff tax will be one more blow to the mineral exploration and prospecting business. Some may remember how Bill Gray, formerly of the Federal Office of Management and Budget, instituted a $100 per year federal claim tax on the 1.2 million mining claims in the western U.S. Instead of the anticipated income, the result was the loss of about 80% of mining claims.
San Bernardino County is known to be especially mineral rich. However, legislation (e.g. S-21) has eliminated some 10 million acres with its estimated 1 trillion dollars in mineral wealth to the county and state economies. Fees and over-regulation have been responsible for more than 15,000 mining claims having been abandoned.
Mineral exploration on mining claims is the Research and Development or seed grain for replacing depleted mineral reserves. It is the basis of the county’s largest industry, mining.
The Brinkerhoff tax would be the death-knell for many, if not all, of the remaining small prospectors, leaving only a few wealthy mining corporations. The Chairman of the Board of Supervisors, Bill Postmus, is running for San Bernardino County Assessor with a pledge (www.billpostmus.com/Issues.htm) of no new federal, state or local taxes. Perhaps the Board of Supervisors is just unaware that the assessor’s office is raising this tax. As a responsible voter, call Supervisor Postmus at (760) 955-5400, e-mail him at SupervisorPostmus@sbcounty.gov, fax him at (909) 387-3029, write him at County Center, 385 N. Arrowhead Ave., 5th floor, San Bernardino, CA 92415-0110 and tell him you are opposed to this new tax. You can also contact him at his campaign headquarters, info@billpostmus.com , (909) 297-3010, fax (909) 297-3018, and Bill Postmus for County Assessor, P.O. Box 2417, Rancho Cucamonga, CA Affected mineral rights owners should do even more. Appeal this tax. Call (909) 889-0200 to have the county send you the proper appeal forms. Walt Wegner
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