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CSSB 156(RES): "An Act amending the Alaska Land Act to clarify the requirement of a single written best interest finding required for the sale, lease, or other disposal of state land or resources or an interest in them, and relating to certain disposals involving multiphased development; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 156(RES)                                                                   
01 "An Act amending the Alaska Land Act to clarify the requirement of a single written                                     
02 best interest finding required for the sale, lease, or other disposal of state land or                                  
03 resources or an interest in them, and relating to certain disposals involving multiphased                               
04 development; and providing for an effective date."                                                                      
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1.  The uncodified law of the State of Alaska is amended by adding a new section                         
07 to read:                                                                                                                
08       LEGISLATIVE PURPOSE.  (a)  In 1994, the legislature amended AS 38.05.035 in                                       
09 reaction to a series of decisions by the Alaska Supreme Court concerning what the court                                 
10 characterized as the Department of Natural Resources' "phasing" of its review of various                                
11 mining and oil and gas projects and deciding that phasing generally should not be allowed.                              
12       (b)  The amendment to AS 38.05.035(e) provided that, in preparing its best interest                               
13 finding, the Department of Natural Resources may limit the scope of its review and finding to                           
14 the disposal phase of a multiphase project if certain conditions were met.                                              
01       (c)  Although the legislature did intend that there would be a detailed review of the                             
02 project at any later phase, the legislature did not intend that the Department of Natural                               
03 Resources would have to issue another best interest finding as part of that review.                                     
04       (d)  When passing the 1994 amendments, the legislature was aware that the post-                                   
05 disposal phases, which are exploration, development, and transportation, would be subjected                             
06 to numerous federal, state, and local laws, regulations, policies, and ordinances; reviewed by                          
07 numerous agencies; and subjected to public review and comment.  For example,                                            
08            (1)  before an onshore exploration well can be drilled in the Cook Inlet, a                                  
09 lessee, in addition to complying with the lease's stipulations and mitigation measures,                                 
10 typically must                                                                                                          
11                 (A)  conduct a cultural resource study with the Department of Natural                                   
12       Resources, division of parks, office of history and archaeology; and                                              
13                 (B)  obtain                                                                                             
14                      (i)  from the state and borough an Alaska coastal management                                       
15            program consistency determination;                                                                           
16                      (ii)  from the Division of Oil and Gas of the Department of                                        
17            Natural Resources approval of a plan of operation;                                                           
18                      (iii)  from the Department of Natural Resources, division of                                       
19            mining, land, and water a land use permit;                                                                   
20                      (iv)  from the Department of Fish and Game a special area, and                                     
21            possibly a fish habitat, permit;                                                                             
22                      (v)  from the Department of Natural Resources, division of                                         
23            mining, land, and water a temporary water use permit;                                                        
24                      (vi)  from the Department of Environmental Conservation a                                          
25            wastewater disposal permit;                                                                                  
26                      (vii)  from the Department of Environmental Conservation                                           
27            approval of an oil discharge prevention and contingency plan;                                                
28                      (viii)  from the Department of Environmental Conservation a                                        
29            solid waste disposal permit;                                                                                 
30                      (ix)  from the Department of Environmental Conservation a                                          
31            certificate of reasonable assurance that state water quality standards are met;                              
01                      (x)  from the United States Army Corps of Engineers a permit                                       
02            issued under 33 U.S.C. 1344 (sec. 404 of the Clean Water Act);                                               
03                      (xi)  from the Alaska Oil and Gas Conservation Commission a                                        
04            conservation order; and                                                                                      
05                      (xii)  from the Alaska Oil and Gas Conservation Commission a                                       
06            permit to drill; and                                                                                         
07            (2)  for a typical offshore exploration well in the Cook Inlet, in addition to                               
08 complying with the lease's stipulations and mitigation measures, a lessee typically must                                
09                 (A)  obtain                                                                                             
10                      (i)  from the state and borough an Alaska coastal management                                       
11            program consistency determination;                                                                           
12                      (ii)  from the Department of Natural Resources, division of oil                                    
13            and gas, approval of a plan of operation;                                                                    
14                      (iii)  from the Department of Environmental Conservation an air                                    
15            quality permit;                                                                                              
16                      (iv)  from the Department of Environmental Conservation                                            
17            approval of an oil discharge prevention and contingency plan;                                                
18                      (v)  from the Department of Environmental Conservation an                                          
19            annular injection approval under a general permit;                                                           
20                      (vi)  from the Department of Environmental Conservation a                                          
21            certificate of reasonable assurance that state water quality standards are met;                              
22                      (vii)  from the United States Army Corps of Engineers a permit                                     
23            issued under 33 U.S.C. 403 (sec. 10 of the Rivers and Harbors Act of 1899);                                  
24                      (viii)  from the United States Environmental Protection Agency                                     
25            a National Pollutant Discharge Elimination System (NPDES) waste disposal                                     
26            permit;                                                                                                      
27                      (ix)  from the Alaska Oil and Gas Conservation Commission a                                        
28            conservation order; and                                                                                      
29                      (x)  from the Alaska Oil and Gas Conservation Commission a                                         
30            permit to drill; and                                                                                         
31                 (B)  meet the requirements, under the Alaska coastal management                                         
01       program, of public notice and the opportunity to comment.                                                         
02       (e)  In Kachemak Bay Conservation Society v.  State, Department of Natural                                        
03 Resources, 6 P.3d 270 (2000), the Alaska Supreme Court considered the 1994 amendment;                                   
04 the Court recognized that it empowered the department to phase, but declared that the                                   
05 department "is obliged, at each phase of development, to issue a best interests finding . . .                           
06 relating to that phase before the proposed development may proceed."                                                    
07       (f)  This Act is intended to make clear that                                                                      
08            (1)  no other best interest finding is required after the disposal phase;                                    
09            (2)  the best interest finding shall be based upon known information or                                      
10 information that is made available to the director, even if all potential cumulative impacts of                         
11 the project are not known; and                                                                                          
12            (3)  public notice and the opportunity to comment shall be provided at each                                  
13 phase of the project.                                                                                                   
14    * Sec. 2.  AS 38.05.035(e) is amended to read:                                                                     
15            (e)  Upon a written finding that the interests of the state will be best served, the                         
16       director may, with the consent of the commissioner, approve contracts for the sale,                               
17       lease, or other disposal of available land, resources, property, or interests in them.  In                    
18       approving a contract under this subsection, the director need only prepare a                                  
19       single written finding.  In addition to the conditions and limitations imposed by law,                        
20       the director may impose additional conditions or limitations in the contracts as the                              
21       director determines, with the consent of the commissioner, will best serve the interests                          
22       of the state.  The preparation and issuance of the written finding by the director are                        
23       [IS] subject to the following:                                                                                    
24                 (1)  with the consent of the commissioner and subject to the director's                                 
25       discretion, for a specific proposed disposal of available land, resources, or property, or                        
26       of an interest in them, the director, in the written finding,                                                     
27                      (A)  shall establish the scope of the administrative review on                                     
28            which the director's determination is based, and the scope of the written                                    
29            finding supporting that determination; the scope of the administrative review                            
30            and finding may address only reasonably foreseeable, significant effects of the                              
31            uses proposed to be authorized by the disposal;                                                              
01                      (B)  may limit the scope of an administrative review and finding                                   
02            for a proposed disposal to                                                                                   
03                           (i)  applicable statutes and regulations;                                                     
04                           (ii)  the facts pertaining to the land, resources, or                                         
05                 property, or interest in them, that the director finds are material to the                              
06                 determination and that are known to the director or knowledge of which                                  
07                 is made available to the director during the administrative review; and                                 
08                           (iii)  issues that, based on the statutes and regulations                                     
09                 referred to in (i) of this subparagraph, on the facts as described in (ii) of                           
10                 this subparagraph, and on the nature of the uses sought to be authorized                                
11                 by the disposal, the director finds are material to the determination of                            
12                 whether the proposed disposal will best serve the interests of the state;                               
13                 and                                                                                                     
14                      (C)  may, if the project for which the proposed disposal is                                        
15            sought is a multiphased development, limit the scope of an administrative                                    
16            review and finding for the proposed disposal to the applicable statutes and                                  
17            regulations, facts, and issues identified in (B)(i) - (iii) of this paragraph that                           
18            pertain solely to the disposal [A DISCRETE] phase of the project when                                    
19                           (i)  the only uses to be authorized by the proposed                                           
20                 disposal are part of that [DISCRETE] phase;                                                             
21                           (ii)  the disposal is an oil and gas disposal and, before                                 
22                 the next phase of the project may proceed, public notice and the                                    
23                 opportunity to comment are provided under regulations adopted                                       
24                 by the department unless the project is subject to a consistency                                    
25                 review under AS 46.40 and public notice and the opportunity to                                      
26                 comment are provided under AS 46.40.096(c);                                                         
27                           (iii)  the department's approval is required before the                                   
28                 next phase of the project may proceed; and                                                              
29                           (iv) [(iii)]  the department describes its reasons for a                                  
30                 decision to phase [AND CONDITIONS ITS APPROVAL TO                                                       
31                 ENSURE THAT ANY ADDITIONAL USES OR ACTIVITIES                                                           
01                 PROPOSED FOR THAT OR ANY LATER PHASE OF THE                                                             
02                 PROJECT WILL SERVE THE BEST INTERESTS OF THE STATE];                                                    
03                 (2)  the director shall discuss in the written finding prepared and issued                              
04       under this subsection the reasons that each of the following was not material to the                              
05       director's determination that the interests of the state will be best served:                                     
06                      (A)  facts pertaining to the land, resources, or property, or an                                   
07            interest in them other than those that the director finds material under (1)(B)(ii)                          
08            of this subsection; and                                                                                      
09                      (B)  issues based on the statutes and regulations referred to in                                   
10            (1)(B)(i) of this subsection and on the facts described in (1)(B)(ii) of this                                
11            subsection;                                                                                                  
12                 (3)  a written finding for an oil and gas lease sale under AS 38.05.180 is                              
13       subject to (g) of this section;                                                                                   
14                 (4)  a contract for the sale, lease, or other disposal of available land or                             
15       an interest in land is not legally binding on the state until the commissioner approves                           
16       the contract, but if the appraised value is not greater than $50,000 in the case of the                           
17       sale of land or an interest in land, or $5,000 in the case of the annual rental of land or                        
18       interest in land, the director may execute the contract without the approval of the                               
19       commissioner;                                                                                                     
20                 (5)  public notice requirements relating to the sale, lease, or other                                   
21       disposal of available land or an interest in land for oil and gas proposed to be                                  
22       scheduled in the five-year oil and gas leasing program under AS 38.05.180(b), except                              
23       for a sale under (6)(F) of this subsection, are as follows:                                                       
24                      (A)  before a public hearing, if held, or in any case not less than                                
25            180 days before the sale, lease, or other disposal of available land or an interest                          
26            in land, the director shall make available to the public a preliminary written                               
27            finding that states the scope of the review established under (1)(A) of this                                 
28            subsection and includes the applicable statutes and regulations, the material                                
29            facts and issues in accordance with (1)(B) of this subsection, and information                               
30            required by (g) of this section, upon which the determination that the sale,                                 
31            lease, or other disposal will serve the best interests of the state will be based;                           
01            the director shall provide opportunity for public comment on the preliminary                                 
02            written finding for a period of not less than 60 days;                                                       
03                      (B)  after the public comment period for the preliminary written                                   
04            finding and not less than 90 days before the sale, lease, or other disposal of                               
05            available land or an interest in land for oil and gas, the director shall make                               
06            available to the public a final written finding that states the scope of the review                          
07            established under (1)(A) of this subsection and includes the applicable statutes                             
08            and regulations, the material facts and issues in accordance with (1) of this                                
09            subsection, and information required by (g) of this section, upon which the                                  
10            determination that the sale, lease, or other disposal will serve the best interests                          
11            of the state is based;                                                                                       
12                 (6)  before a public hearing, if held, or in any case not less than 21 days                             
13       before the sale, lease, or other disposal of available land, property, resources, or                              
14       interests in them other than a sale, lease, or other disposal of available land or an                             
15       interest in land for oil and gas under (5) of this subsection, the director shall make                            
16       available to the public a written finding that, in accordance with (1) of this subsection,                        
17       sets out the material facts and applicable statutes and regulations and any other                                 
18       information required by statute or regulation to be considered upon which the                                     
19       determination that the sale, lease, or other disposal will best serve the interests of the                        
20       state was based; however, a written finding is not required before the approval of                                
21                      (A)  a contract for a negotiated sale authorized under                                             
22            AS 38.05.115;                                                                                                
23                      (B)  a lease of land for a shore fishery site under AS 38.05.082;                                  
24                      (C)  a permit or other authorization revocable by the                                              
25            commissioner;                                                                                                
26                      (D)  a mineral claim located under AS 38.05.195;                                                   
27                      (E)  a mineral lease issued under AS 38.05.205;                                                    
28                      (F)  an exempt oil and gas lease sale under AS 38.05.180(d) of                                     
29            acreage subject to a best interest finding issued within the previous 10 years or                            
30            a reoffer oil and gas lease sale under AS 38.05.180(w) of acreage subject to a                               
31            best interest finding issued within the previous 10 years, unless the                                        
01            commissioner determines that substantial new information has become                                          
02            available that justifies a supplement to the most recent best interest finding for                           
03            the exempt oil and gas lease sale acreage and for the reoffer oil and gas lease                              
04            sale acreage; however, for each oil and gas lease sale described in this                                     
05            subparagraph, the director shall call for comments from the public; the                                      
06            director's call for public comments must provide opportunity for public                                      
07            comment for a period of not less than 30 days; if the director determines that a                             
08            supplement to the most recent best interest finding for the acreage is required                              
09            under this subparagraph,                                                                                     
10                           (i)  the director shall issue the supplement to the best                                      
11                 interest finding not later than 90 days before the sale;                                                
12                           (ii)  not later than 45 days before the sale, the director                                    
13                 shall issue a notice describing the interests to be offered, the location                               
14                 and time of the sale, and the terms and conditions of the sale; and                                     
15                           (iii)  the supplement has the status of a final written best                                  
16                 interest finding for purposes of (i) and (l) of this section;                                           
17                      (G)  a shallow gas lease authorized under AS 38.05.177 in an                                       
18            area for which leasing is authorized under AS 38.05.177;                                                     
19                      (H)  a surface use lease under AS 38.05.255;                                                       
20                      (I)  a permit, right-of-way, or easement under AS 38.05.850;                                       
21                 (7)  the director shall include in                                                                      
22                      (A)  a preliminary written finding, if required, a summary of                                      
23            agency and public comments, if any, obtained as a result of contacts with other                              
24            agencies concerning a proposed disposal or as a result of informal efforts                                   
25            undertaken by the department to solicit public response to a proposed disposal,                              
26            and the department's preliminary responses to those comments; and                                            
27                      (B)  the final written finding a summary of agency and public                                      
28            comments received and the department's responses to those comments.                                          
29    * Sec. 3.  This Act takes effect immediately under AS 01.10.070(c).