00                      CS FOR SENATE BILL NO. 243(RES)                                                                   
01 "An Act relating to the royalty obligation for geothermal resources."                                                   
02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
03    * Section 1. AS 38.05.181(g) is amended to read:                                                                   
04            (g)  Each geothermal lease shall be conditioned upon payment by the lessee of                                
05       a royalty of 1.75 percent [NOT LESS THAN 10 PERCENT BUT NOT MORE                                              
06       THAN 15 PERCENT] of the gross revenues derived from the production, sale, or use                                  
07       of geothermal resources under the lease during the first 10 years immediately                                 
08       following the date the geothermal resource first generates gross income and 3.5                               
09       percent of the gross revenues derived from the production, sale, or use of                                    
10       geothermal resources under the lease after that first 10-year period. Royalties                               
11       may be taken in kind rather than in value if the commissioner determines that taking in                           
12       kind would be in the best interest of the state.                                                                  
13    * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to                          
14 read:                                                                                                                   
15       APPLICABILITY; AMENDMENT OF EXISTING LEASES. (a) Section 1 of this                                                

01 Act applies to a lease for a geothermal resource or the renewal of a lease for a geothermal                             
02 resource entered into on or after the effective date of this Act.                                                       
03       (b)  The commissioner of natural resources shall offer the royalty rates in                                       
04 AS 38.05.181(g), as amended by sec. 1 of this Act, as an amendment to a lease or renewal of                             
05 lease entered into before the effective date of this Act.