Section 38.05.081 - Leases of state land for carbon management purposes(a) The commissioner may lease state land for carbon management purposes. A lease agreement under this section must include land use restrictions and authorizations consistent with the carbon management purpose of the lease. (b) A person may apply to lease land for a carbon management purpose by submitting an application to the department. An application to lease land must include (1) the specific location, description, and amount of land the applicant wants to lease; (2) a detailed summary of the proposed purpose the land will be used for; and (3) additional information and requirements established by the department in regulation, including any application fees. (c) Upon receiving an application, the department shall solicit competitive interest by issuing a public notice in the manner prescribed in AS 38.05.945. The notice must contain an announcement seeking competitive interest. If competing carbon management applications are received following notice, the applications will be awarded under (d) of this section. (d) If the director receives two or more applications for the same land, the director shall consider reasonable factors in awarding the lease, including proposed monetary consideration, the value to the state, the potential revenue to the state, and the qualifications of the applicant, including whether the applicant has previous experience with carbon management, the anticipated lease term, how the proposed use would accommodate concurrent use of the land, consistency with existing state area or management plans, and any additional requirement established by the department in regulation. If one or more applicants have proposed different carbon management purposes, the director shall consider each applicant's proposal and determine which proposed use is more appropriate for the selected state land. An application for a lease of state land under this section, including supporting documentation submitted to the department for review, is a public record subject to AS 40.25.110 - 40.25.220. An aggrieved applicant may appeal to the commissioner for a review of the director's determination within 20 days after receiving notice of the determination. (e) A lease under this section may not exceed a period of 55 years. The lease must contain terms and conditions for performance, including benchmarks, and must require the lessee to make progress toward development or continual maintenance of the leased land sufficient to meet the carbon management purpose of the lease. During the term of the lease, the commissioner shall terminate the lease if (1) the commissioner determines that the land is not being used for the carbon management purpose approved by the commissioner; or (2) the lessee fails to meet the requirements of the lease and, after being given a reasonable opportunity by the commissioner to comply with the lease, the commissioner determines that the lessee has still failed to comply with the lease. (f) A lessee under this section is not entitled to a preference right to purchase the leased land. (g) Compensation for a lease under this section (1) shall be designed to maximize the return to the state and be a form of compensation provided under AS 38.05.073(m); (2) shall be separately accounted for under AS 37.05.142; and (3) may be used by the legislature to make appropriations to the department to carry out the purposes of this section. (h) The provisions of AS 38.05.070 and 38.05.095 concerning subleasing, assignment, lease renewals, and lease extensions apply to leasing under this section. (i) Before entering into a lease of land under this section, the director must (1) evaluate information received during a solicitation of competitive interest under (c) of this section; and (2) find under AS 38.05.035(e) that leasing the land for the proposed carbon management purpose is in the best interests of the state; the findings must include (A) reasonably foreseeable effects that a project may have on the state or local economy, including potential effects on mining, timber, and other resource development sectors; (B) anticipated annual revenue that the lease will yield to the state; (C) an assessment and consideration of the known mineral potential, including current claim status, within the project area; (D) the proposed monetary consideration under the agreement, the value to the state, and the potential revenue to the state; and (E) a summary of public comments received in response to the solicitation of competitive interest required under (c) of this section and the department's response to those comments. (j) State land used for carbon management purposes must, to the extent practicable, remain open to (1) the public for access, hunting, fishing, and other generally allowed uses as determined by the department; and (2) other resource development, including mining. (k) Notwithstanding AS 38.05.300, state land used for carbon management purposes must remain open to mineral exploration and development. A lease under this section does not constitute an exception to the requirements of AS 38.05.300(a). (l) By February 1 of each year, the commissioner shall prepare a report on the lease agreements entered into under this section, transmit the report to the senate secretary and the chief clerk of the house of representatives, and notify the legislature that the report is available. The report must contain the following information: (1) the number of total leases entered into each fiscal year from the fiscal year ending June 30, 2024, until the present; (2) a complete list of lease information for each ongoing lease that includes (A) a general description of the location of the lease; (B) the date the lease was executed; (C) the identity of each person on the lease; (D) a summary of the underlying carbon management purpose; (E) the current status of the leased land with regard to the carbon management purpose; (F) the amount of carbon offset credits generated and sold under the lease cumulatively and during the current fiscal year; (G) a summary of the compensation agreed on for the lease and an explanation of how the amount was determined; and (H) the identity of each individual having an ownership interest in an entity on the lease; (3) a complete list of leases that expired or were terminated during the preceding or current fiscal year and the reason the lease expired or was terminated; and (4) a description of the cumulative revenue received by the state from leases, the revenue received by the state from leases during the preceding fiscal year, and the anticipated revenue the state will receive from leases in the current fiscal year. (m) In this section, "carbon management" means a greenhouse gas mitigation measure or nongeologic carbon sequestration project.Added by SLA 2023, ch. 2,sec. 5, eff. 5/24/2023.