Section 38.05.250. Prospecting permits and leases on tide and submerged land.

   (a) The exclusive right to prospect for deposits of minerals subject to AS 38.05.185 - 38.05.275 in or on tide and submerged state land may be granted by a permit issued by the director.  A permit shall be granted to the first qualified applicant.  A permit may not include an area larger than 2,560 acres, subject to the rule of approximation. Land subject to a prospecting permit shall be as compact in form as possible taking into consideration the area involved. The term of the permit shall be 10 years.  Prospecting permits shall be conditioned upon payment of rental against which credit shall be given for useful expenditures on land covered by the permit or group of contiguous permits under common ownership or assignment.  Excess expenditures may be applied against rentals due for the following four years.  The rental shall be $3 per acre for the first two-year period of the permit, payable on the second anniversary of the permit and $3 per acre for each following year, payable annually on the anniversary date of the permit.  Minerals from land under a prospecting permit may not be mined and marketed or used, except for limited amounts necessary for sampling or testing. A person may not take or hold prospecting permits for minerals on state land under this section exceeding in the aggregate 300,000 acres.  A person may not take or hold leases for minerals on state land under this section exceeding in the aggregate 100,000 acres.
   (b) A noncompetitive lease shall be granted to a holder of a prospecting permit for so much of the land subject to the permit as is shown to the satisfaction of the director to contain workable mineral deposits. Submerged land containing known deposits of minerals subject to AS 38.05.185 - 38.05.275 may, in the discretion of the director, be offered by competitive bid. The land shall be leased to the qualified person offering the highest amount of cash bonus.
   (c) Each submerged land mining lease shall be for a period of up to 20 years and for so long as there is production in paying quantities from the leased area. A submerged land mining lease may be renewed for a period of up to 20 years at the discretion of the director if the director determines that the renewal is in the best interests of the state.
   (d) The commissioner may, on the request of the lessee, assent to the suspension of operation and production under a lease whenever in the judgment of the commissioner the suspension is necessary to promote development of the lease or the lease cannot be successfully operated under its terms.  The payment of acreage rental may be suspended during the period of suspension of operation and production.  The suspension of the lease shall extend the term of the lease by adding the period of suspension to the lease. The commissioner may extend the term of a nonproducing lease on an application by the lessee accompanied by a showing that the lessee is reasonably close to attaining production and that, despite diligent good faith efforts by the lessee, the lessee is not able to produce due to force majeure, depressed market conditions, or other situations beyond the reasonable control of the lessee.  A suspension or extension granted under this subsection may not exceed two years.

Authorities

38.05.211;38.05.212

Notes

Implemented As

11 AAC 86.500
11 AAC 86.510
11 AAC 86.515
11 AAC 86.528
11 AAC 86.530
11 AAC 86.532
11 AAC 86.535
11 AAC 86.541
11 AAC 86.545
11 AAC 86.561
11 AAC 86.575
11 AAC 86.580
11 AAC 86.800
11 AAC 86.805
11 AAC 86.810

References

11 AAC 86.135
11 AAC 86.313
11 AAC 86.532
11 AAC 86.575
11 AAC 86.760
AS 38.05.211 Annual rental.
AS 38.05.212 Production royalty.

History

(Sec. 1 art IX ch 169 SLA 1959; am Sec. 1 ch 123 SLA 1961; am Sec. 1 ch 96 SLA 1966; am Sec. 4 ch 87 SLA 1982; am Sec. 8 - 12 ch 93 SLA 1984; am Sec. 6 ch 101 SLA 1989; am Sec. 17 ch 27 SLA 2012)