Section 38.05.183. Sale of royalty.

   (a) The sale, exchange, or other disposal of a mineral obtained by the state as a royalty under AS 38.05.182, the sale, exchange, or other disposal in whole or in part of a right to receive future mineral production under a state lease under this chapter, or the sale, exchange, or other disposal of gas delivered to the state under AS 43.55.014(b) shall be by competitive bid and the sale, exchange, or other disposal made to the highest responsible bidder, except that competitive bidding is not required when the commissioner, after prior written notice to the Alaska Royalty Oil and Gas Development Advisory Board under AS 38.06.050, determines that the best interest of the state does not require it or that no competition exists.
   (b) When competitive bids are required, the commissioner, after prior written notice to the Alaska Royalty Oil and Gas Development Advisory Board, may reject all bids on a determination that because of the amount of the bids, the lack of responsibility on the part of the bidders, or for reasons consistent with the criteria set out in AS 38.06.070, the acceptance of the bids would not be in the best interest of the state.
   (c) If the commissioner determines that a sale, exchange, or other disposal of a mineral obtained by the state as a royalty under AS 38.05.182, of a right to receive future mineral production under a state lease under this chapter, or of gas delivered to the state under AS 43.55.014(b) shall be made otherwise than by competitive bid, and the Alaska Royalty Oil and Gas Development Advisory Board has been notified in writing of that determination, the commissioner shall make public in writing the specific findings and conclusions on which that determination is based.
   (d) Oil or gas taken in kind by the state as its royalty share or gas delivered to the state under AS 43.55.014(b) may not be sold or otherwise disposed of for export from the state until the commissioner determines that the oil or gas is surplus to the present and projected intrastate domestic and industrial needs. The commissioner shall make public, in writing, the specific findings and reasons on which the determination is based.
   (e) When a sale, exchange, or other disposal of oil or gas taken in kind by the state as its royalty share, or a sale, exchange, or other disposal in whole or in part of a right to receive future royalty oil or gas, under a state lease under this chapter is made other than by competitive bid, or when a sale, exchange, or other disposal of gas delivered to the state under AS 43.55.014(b) is made other than by competitive bid, the sale, exchange, or other disposal shall be awarded by the commissioner to the prospective buyer whose proposal offers the maximum benefits to citizens of the state. The commissioner shall consider
        (1) the cash value offered;
        (2) the projected effects of the sale, exchange, or other disposal on the economy of the state;
        (3) the projected benefits of refining or processing the oil or gas in the state;
        (4) the ability of the prospective buyer to provide refined products or by-products for distribution and sale in the state with price or supply benefits to the citizens of the state; and
        (5) the criteria listed in AS 38.06.070(a).
   (f) The commissioner may not enter into a contract for the sale of royalty oil unless the contract provides that any material amendment to the contract that appreciably reduces the consideration received by the state requires prior approval of the legislature.
   (g) AS 38.05.035(e) does not apply to a sale, exchange, or other disposal of oil or gas under this section.
   (h) Upon legislative approval, the commissioner may enter into a contract to sell royalty gas taken in kind by the state to a gas or electric utility at a negotiated price for the gas if the commissioner, after considering the consumer benefits, other benefits, and detriments of the sale, makes a written finding that the sale is in the best interest of the state. In this subsection,
        (1) "gas or electric utility" has the meaning given in AS 38.05.180(bb);
        (2) "royalty gas taken in kind by the state" does not include royalty gas taken in kind by the state from gas production on land patented to the state under
             (A) P.L. 84-830, 70 Stat. 709 (Alaska Mental Health Enabling Act);
             (B) 38 Stat. 1214 (Act of March 4, 1915); or
             (C) 43 U.S.C. 1635 in settlement of the claims of the state under 38 Stat. 1214.

Authorities

38.05.810;38.06.010;38.06.050;38.06.055

Notes

Implemented As

11 AAC 03.010
11 AAC 03.020
11 AAC 03.022
11 AAC 03.024
11 AAC 03.026
11 AAC 03.030
11 AAC 03.040
11 AAC 03.050
11 AAC 03.060
11 AAC 03.100
11 AAC 03.110
11 AAC 03.120
11 AAC 03.130
11 AAC 03.140
11 AAC 03.150
11 AAC 03.160
11 AAC 03.170
11 AAC 03.180
11 AAC 03.190
11 AAC 03.200
11 AAC 03.210
11 AAC 03.220
11 AAC 03.230
11 AAC 03.240
11 AAC 82.705
11 AAC 82.710
11 AAC 82.715

References

11 AAC 03.060
11 AAC 03.210
11 AAC 82.710
AS 38.05.810 Public and charitable use.
AS 38.06.010 Purpose.
AS 38.06.050 Board review and recommendation required.
AS 38.06.055 Legislative approval.

History

(Sec. 1 ch 56 SLA 1970; am Sec. 3 ch 9 SSSLA 1974; am Sec. 9, 10 ch 112 SLA 1980; am Sec. 2 ch 68 SLA 1984; am Sec. 2 ch 105 SLA 1984; am Sec. 1 ch 64 SLA 1985; am Sec. 3 ch 55 SLA 1986; am Sec. 6 ch 134 SLA 1990; am Sec. 29 - 32 ch 14 SLA 2014)