1996-01-26                     House Journal                      Page 2544
HB 453                                                                       
HOUSE BILL NO. 453 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
HOUSE BILL NO. 453                                                            
An Act relating to best interest findings for oil and gas lease sales         
for the area onshore and north of the Umiat baseline.                         
                                                                               
was read the first time and referred to the House Special Committee            
on Oil and Gas, Resources and Finance Committees.                              
                                                                               
                                                                               
The following fiscal note applies:                                             
                                                                               
Zero fiscal note, Dept. of Natural Resources, 1/26/96                          
                                                                               
                                                                               
The Governor's transmittal letter, dated January 26, 1996, appears             
below:                                                                         
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     
transmitting a bill that streamlines the process for annual oil and gas        
lease sales on the North Slope.  This bill changes the method of               
making best interest findings for leasing onshore areas of the North           
Slope.  These changes are part of the Administrations continuing effort        
to make the states oil and gas leasing program competitive in the              
international market, while ensuring that development occurs in an             
environmentally responsible manner.                                            

1996-01-26                     House Journal                      Page 2545
HB 453                                                                       
Area-wide oil and gas lease sales are permitted under current law with         
no statutory acreage limitation for the sales.  This gives the                 
commissioner of the Department of Natural Resources broad discretion           
in determining what acreage to place in the states five-year oil and gas       
leasing program.  But best interest findings are now done for each             
individual lease sale.  Under this proposal, the department will not           
have to issue a new best interest finding before each North Slope sale;        
a single best interest finding would be made for all area tracts offered       
over the 5-year sale period.  This increases the certainty that oil and        
gas leases will be offered each year.                                          
                                                                               
This new process will not prevent the Department of Natural Resources          
from amending a best interest finding.  The department will analyze            
any new information and revise a finding as necessary.  Another aspect         
of this bill would allow the state to put land in the annual lease sale        
as the state receives title from the federal government by requiring           
only that the acreage has been subject to a best interest finding in the       
previous five years, instead of having actually been offered for sale.         
                                                                               
This proposal for area-wide leasing ensures sound environmental                
development of the North Slope under a streamlined process --                  
providing industry the certainty of annual lease sales and regulatory          
efficiency, and providing the state the benefits of jobs and enhanced          
development opportunities.  I urge your prompt consideration and               
passage of this bill.                                                          
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Tony Knowles                                                             
						Governor