00                             SENATE BILL NO. 62                                                                          
01 "An Act relating to surface use restrictions for oil and gas leases; relating to gas leases in                          
02 Kachemak Bay; relating to the renewable energy grant fund; and providing for an                                         
03 effective date."                                                                                                        
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1.  AS 38.05 is amended by adding a new section to read:                                                 
06 Sec. 38.05.176. Effect of surface use restrictions in specified acreage.                                              
07 Unless specifically provided, a statute that restricts the surface use of an oil and gas                                
08 lease or a gas only lease in specified acreage does not also restrict subsurface use for                                
09 oil and gas resource development that can be accomplished by drilling from acreage                                      
10       that does not have surface use restrictions.                                                                      
11    * Sec. 2.  AS 38.05.184(b) is amended to read:                                                                     
12 (b)  Except as provided in (h) of this section, no [NO] additional oil or gas                                       
13 leases may be issued by the department or any other state agency for the exploration                                    
14 for or the development or production of oil and gas on state-owned land and waters                                      
01 seaward of the mean higher high water line, beginning at Anchor Point; then around                                      
02 the perimeter of Kachemak Bay, to Point Pogibshi; then west to the three mile limit of                                  
03 state land and waters; then north to a point three miles west of Anchor Point; then east                                
04       to the mean higher high water line of Anchor Point, the point of beginning.                                       
05    * Sec. 3.  AS 38.05.184 is amended by adding a new subsection to read:                                             
06            (h)  The director may offer gas only leases within Township 5 South, Range 15                                
07       West, Seward Meridian, Alaska. A lessee shall                                                                     
08                 (1)  have no right to surface use; and                                                                  
09                 (2)  be limited to drilling from onshore leased lands for all exploration                               
10       for or development or production of gas.                                                                          
11    * Sec. 4.  AS 42.45.045(b) is amended to read:                                                                     
12 (b)  The authority shall administer the fund as a fund distinct from other funds                                        
13       of the authority. The fund consists of                                                                            
14 (1)  money appropriated to the fund by the legislature to provide grants                                                
15       for certain energy projects determined by the legislature;                                                        
16 (2)  gifts, bequests, contributions from other sources, and federal                                                     
17       money;                                                                                                            
18                 (3)  interest earned on the fund balance; and                                                           
19 (4)  money appropriated to the fund by the legislature from the                                                     
20 state's rentals, royalties, lease sale proceeds, and net profit shares under                                        
21 AS 38.05.180(f) and (g) from gas only leases under AS 38.05.184(h); an                                              
22 appropriation under this paragraph may be made after deposits to the Alaska                                         
23 permanent fund of amounts required under art. IX, sec. 15, Constitution of the                                      
24 State of Alaska [INVESTMENTS TO BE MANAGED BY THE DEPARTMENT OF                                                     
25 REVENUE, WHICH SHALL BE THE FIDUCIARY OF THE FUND UNDER                                                                 
26       AS 37.10.071].                                                                                                    
27    * Sec. 5.  AS 42.45.045(c) is amended to read:                                                                     
28 (c) The fund is not a dedicated fund. Investments of the fund shall be                                              
29 managed by the Department of Revenue, which shall be the fiduciary of the fund                                      
30       under AS 37.10.071.                                                                                           
31    * Sec. 6.  This Act takes effect immediately under AS 01.10.070(c).