CSHB 388(O&G): "An Act revising laws relating to oil and gas leasing as related to land previously the subject of a written best interest finding; amending provisions setting out exceptions to sales, leases, or other disposals for which a revised written best interest finding is not required; authorizing annual offer of land for oil and gas leases if the land, or adjacent land, was the subject of a best interest finding and if preparation of a supplement to the best interest finding for that land is not justified; and modifying the statement of purpose in the Alaska Land Act as it applies to oil and gas leasing."
00CS FOR HOUSE BILL NO. 388(O&G) 01 "An Act revising laws relating to oil and gas leasing as related to land 02 previously the subject of a written best interest finding; amending provisions 03 setting out exceptions to sales, leases, or other disposals for which a revised 04 written best interest finding is not required; authorizing annual offer of land for 05 oil and gas leases if the land, or adjacent land, was the subject of a best 06 interest finding and if preparation of a supplement to the best interest finding 07 for that land is not justified; and modifying the statement of purpose in the 08 Alaska Land Act as it applies to oil and gas leasing." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10 * Section 1. AS 38.05.035(e) is amended to read: 11 (e) Upon a written finding that the interests of the state will be best served, the 12 director may, with the consent of the commissioner, approve contracts for the sale, lease, 13 or other disposal of available land, resources, property, or interests in them. In [, AND, 14 IN] addition to the conditions and limitations imposed by law, the director may impose
01 additional conditions or limitations in the contracts as the director determines, with the 02 consent of the commissioner, will best serve the interests of the state. The preparation 03 and issuance of the written finding by the director is subject to the following: 04 (1) with the consent of the commissioner and subject to the director's 05 discretion, for a specific proposed disposal of available land, resources, or property, or 06 of an interest in them, the director, in the written finding, 07 (A) shall establish the scope of the administrative review on 08 which the director's determination is based, and the scope of the written finding 09 supporting that determination; the scope of the review and finding may address 10 only reasonably foreseeable, significant effects of the uses proposed to be 11 authorized by the disposal; 12 (B) may limit the scope of an administrative review and finding 13 for a proposed disposal to 14 (i) applicable statutes and regulations; 15 (ii) the facts pertaining to the land, resources, or property, 16 or interest in them, that the director finds are material to the 17 determination and that are known to the director or knowledge of which 18 is made available to the director during the administrative review; and 19 (iii) issues that, based on the statutes and regulations 20 referred to in (i) of this subparagraph, on the facts as described in (ii) of 21 this subparagraph, and on the nature of the uses sought to be authorized, 22 the director finds are material to the determination of whether the 23 proposed disposal will best serve the interests of the state; and 24 (C) may, if the project for which the proposed disposal is sought 25 is a multiphased development, limit the scope of an administrative review and 26 finding for the proposed disposal to the applicable statutes and regulations, facts, 27 and issues identified in (B)(i) - (iii) of this paragraph that pertain solely to a 28 discrete phase of the project when 29 (i) the only uses to be authorized by the proposed disposal 30 are part of that discrete phase; 31 (ii) the department's approval is required before the next
01 phase of the project may proceed; and 02 (iii) the department describes its reasons for a decision to 03 phase and conditions its approval to ensure that any additional uses or 04 activities proposed for that or any later phase of the project will serve the 05 best interests of the state; 06 (2) the director shall discuss in the written finding prepared and issued 07 under this subsection the reasons that each of the following was not material to the 08 director's determination that the interests of the state will be best served: 09 (A) facts pertaining to the land, resources, or property, or an 10 interest in them other than those that the director finds material under (1)(B)(ii) 11 of this subsection; and 12 (B) issues based on the statutes and regulations referred to in 13 (1)(B)(i) of this subsection and on the facts described in (1)(B)(ii) of this 14 subsection; 15 (3) a written finding for an oil and gas lease sale under AS 38.05.180 is 16 subject to (g) of this section; 17 (4) a contract for the sale, lease, or other disposal of available land or an 18 interest in land is not legally binding on the state until the commissioner approves the 19 contract but if the appraised value is not greater than $50,000 in the case of the sale of 20 land or an interest in land, or $5,000 in the case of the annual rental of land or interest 21 in land, the director may execute the contract without the approval of the commissioner; 22 (5) public notice requirements relating to the sale, lease, or other disposal 23 of available land or an interest in land for oil and gas proposed to be scheduled in the 24 five-year oil and gas leasing program under AS 38.05.180(b), are as follows: 25 (A) before a public hearing, if held, or in any case not less than 26 180 days before the sale, lease, or other disposal of available land or an interest 27 in land, the director shall make available to the public a preliminary written 28 finding that states the scope of the review established under (1)(A) of this 29 subsection and includes the applicable statutes and regulations, the material facts 30 and issues in accordance with (1)(B) of this subsection, and information required 31 by (g) of this section, upon which the determination that the sale, lease, or other
01 disposal will serve the best interests of the state will be based; the director shall 02 provide opportunity for public comment on the preliminary written finding for 03 a period of not less than 60 days; 04 (B) after the public comment period for the preliminary written 05 finding and not less than 90 days before the sale, lease, or other disposal of 06 available land or an interest in land for oil and gas, the director shall make 07 available to the public a final written finding that states the scope of the review 08 established under (1)(A) of this subsection and includes the applicable statutes 09 and regulations, the material facts and issues in accordance with (1) of this 10 subsection, and information required by (g) of this section, upon which the 11 determination that the sale, lease, or other disposal will serve the best interests 12 of the state is based; 13 (6) before a public hearing, if held, or in any case not less than 21 days 14 before the sale, lease, or other disposal of available land, property, resources, or interests 15 in them other than a sale, lease, or other disposal of available land or an interest in land 16 for oil and gas under (5) of this subsection, the director shall make available to the 17 public a written finding that, in accordance with (1) of this subsection, sets out the 18 material facts and applicable statutes and regulations and any other information required 19 by statute or regulation to be considered upon which the determination that the sale, 20 lease, or other disposal will best serve the interests of the state was based; however, a 21 written finding is not required before the approval of 22 (A) a contract for a negotiated sale authorized under 23 AS 38.05.115; 24 (B) a lease of land for a shore fishery site under AS 38.05.082; 25 (C) a permit or other authorization revocable by the 26 commissioner; 27 (D) a mineral claim located under AS 38.05.195; 28 (E) a mineral lease issued under AS 38.05.205; 29 (F) a production license issued under AS 38.05.207; or 30 (G) an exempt oil and gas lease sale under AS 38.05.180(d) of 31 acreage subject to a best interest finding issued [OFFERED IN A SALE
01 THAT WAS HELD] within the previous 10 [FIVE] years [IF THE SALE WAS 02 SUBJECT TO A WRITTEN BEST INTEREST FINDING, UNLESS THE 03 COMMISSIONER DETERMINES THAT NEW INFORMATION HAS 04 BECOME AVAILABLE THAT JUSTIFIES A REVISION OF THE BEST 05 INTEREST FINDING;] or 06 [(H)] a reoffer oil and gas lease sale under AS 38.05.180(w) of 07 acreage subject to a best interest finding issued [OFFERED IN A SALE 08 THAT WAS HELD] within the previous 10 [FIVE] years, together with any 09 tract for which a written best interest finding has not been prepared if the 10 tract is located within and is entirely surrounded by acreage described in 11 this subparagraph for which a best interest finding was issued [IF THE 12 SALE WAS SUBJECT TO A BEST INTEREST FINDING], unless the 13 commissioner determines that substantial new information has become available 14 that justifies a supplement to [REVISION OF] the most recent best interest 15 finding for the exempt oil and gas lease sale acreage, for the reoffer oil and 16 gas lease sale acreage, and for the included tracts; however, for each oil and 17 gas lease sale described in this subparagraph, the director shall call for 18 comments from the public; the director's call for public comments must 19 provide opportunity for public comment for a period of not less than 30 20 days; if the director determines that a supplement to the most recent best 21 interest finding for the acreage is required under this subparagraph, 22 (i) the director shall issue the supplement to the best 23 interest finding not later than 90 days before the sale; 24 (ii) not later than 45 days before the sale, the director 25 shall issue a notice describing the interests to be offered, the location 26 and time of the sale, and the terms and conditions of the sale; and 27 (iii) the supplement has the status of a final written 28 best interest finding for purposes of AS 38.05.035(i) and (l); 29 (7) the director shall include in 30 (A) a preliminary written finding, if required, a summary of 31 agency and public comments, if any, obtained as a result of contacts with other
01 agencies concerning a proposed disposal or as a result of informal efforts 02 undertaken by the department to solicit public response to a proposed disposal, 03 and the department's preliminary responses to those comments; and 04 (B) the final written finding a summary of agency and public 05 comments received and the department's responses to those comments. 06 * Sec. 2. AS 38.05.180(a) is amended to read: 07 (a) The legislature finds that 08 (1) the people of Alaska have an interest in the development of the 09 state's oil and gas resources to 10 (A) maximize the economic and physical recovery of the 11 resources; 12 (B) maximize competition among parties seeking to explore and 13 develop the resources; 14 (C) maximize use of Alaska's human resources in the 15 development of the resources; 16 (2) it is in the best interests of the state 17 (A) to encourage an assessment of its oil and gas resources and 18 to allow the maximum flexibility in the methods of issuing leases to 19 (i) [(A)] recognize the many varied geographical regions 20 of the state and the different costs of exploring for oil and gas in these 21 regions; 22 (ii) [(B)] minimize the adverse impact of exploration, 23 development, production, and transportation activity; and 24 (B) to offer acreage for oil and gas leases on an annual basis, 25 specifically including annual areawide leases of state land that has been the 26 subject of a best interest finding or that is adjacent to and surrounded by 27 state land that has been the subject of a best interest finding. 28 * Sec. 3. AS 38.05.180(d) is amended to read: 29 (d) The commissioner 30 (1) may annually offer to issue oil and gas leases of the acreage 31 described in AS 38.05.035(e)(6)(G) unless the commissioner determines that
01 substantial new information has become available that justifies preparation of a 02 supplement to the best interest finding for the area proposed to be leased; 03 (2) may issue oil and gas leases in an area that has not been included 04 in a leasing program submitted, in accordance with (b) of this section, to the legislature 05 if the land to be leased 06 (A) [(1)] was previously subject to a valid state or federal oil 07 and gas lease; 08 (B) [(2)] is contiguous to land already under state, federal or 09 private lease and the commissioner makes a written finding, after hearing, that 10 leasing of the land would result in a substantial probability of early evaluation 11 and development of the land to be leased; 12 (C) [(3)] is adjacent to land owned or controlled by another 13 party on which a discovery of commercial quantities of oil or gas has been 14 made, and the commissioner finds, after hearing, that there is a reasonable 15 probability that the land to be leased contains oil or gas in communication with 16 the oil or gas discovered on the land of the other party; 17 (D) [(4)] is adjacent to land included in the federal five-year 18 Outer Continental Shelf leasing program under 43 U.S.C. 1344, and the 19 commissioner makes a written finding, after hearing, that coordinated or 20 simultaneous leasing with the federal government is in the public interest; or 21 (E) [(5)] is the subject of an oil and gas exploration license 22 issued under AS 38.05.131 - 38.05.134. 23 * Sec. 4. AS 38.05.180(w) is amended to read: 24 (w) Notwithstanding any other provisions of this section, land that was subject 25 to a best interest finding issued within the previous 10 years [WHICH HAS BEEN 26 OFFERED FOR LEASE WITHIN THE PREVIOUS FIVE YEARS AND WHICH 27 RECEIVED NO BIDS AT COMPETITIVE SALE OR FOR WHICH NO BID WAS 28 ACCEPTED] may be, at the discretion of the commissioner, immediately offered for 29 lease, under regulations adopted by the commissioner, upon terms appearing most 30 advantageous to the state; however, noncompetitive leasing is prohibited. The 31 commissioner shall establish a royalty determined to be in the public interest but not less
01 than 12 1/2 percent. A lease must provide for payment to the state of rental but need 02 not adhere to the rental schedule in (n) of this section nor to the 5,760-acres-per-lease 03 limitation in (m) of this section. The lease term may not exceed 10 years, except as 04 provided in (o) of this section. 05 * Sec. 5. AS 38.05.945(a) is amended to read: 06 (a) This section establishes the requirements for notice given by the department 07 for the following actions: 08 (1) classification or reclassification of state land under AS 38.05.300 and 09 the closing of land to mineral leasing or entry under AS 38.05.185; 10 (2) zoning of land under applicable law; 11 (3) issuance of a 12 (A) preliminary written finding under AS 38.05.035(e)(5)(A) 13 regarding the sale, lease, or disposal of an interest in state land or resources for 14 oil and gas subject to AS 38.05.180(b); 15 (B) final written finding under AS 38.05.035(e)(5)(B) regarding 16 the sale, lease, or disposal of an interest in state land or resources for oil and gas 17 subject to AS 38.05.180(b); 18 (C) written finding for the sale, lease, or disposal of an interest 19 in state land or resources under AS 38.05.035(e)(6), except an oil or gas lease 20 sale described in AS 38.05.035(e)(6)(G) for which the director must provide 21 opportunity for public comment under the provisions of that subparagraph; 22 (4) a competitive disposal of an interest in state land or resources after 23 final decision under AS 38.05.035(e); 24 (5) a public hearing under AS 38.05.856(b); 25 (6) a preliminary finding under AS 38.05.035(e) and 38.05.855(c) 26 concerning sites for aquatic farms and related hatcheries; 27 (7) a decision under AS 38.05.132 - 38.05.134 regarding the sale, lease, 28 or disposal of an interest in state land or resources.