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Regulatory and Permitting Information Desktop Toolkit

Alaska State Land Lease (3-AK-f)

A hydropower developer may need to obtain a land lease from the director of the Alaska Division of Mining Land and Water (ML&W) if the project will involve the placement of a permanent structure on lands to which the state holds title. The ML&W issues leases for the use of state lands—including tidal, submerged, and shorelands—in accordance with the Alaska Land Act, AS 32.05.070 – 38.05.105.

State Land Lease Process

3-AK-f.1 – Land Lease Application

To obtain a lease for state lands, the developer must submit a complete land lease application to the Alaska Division of Mining Land and Water (ML&W).

3-AK-f.2 to 3-AK-f.3 - Review Application Materials for Completeness

Once received, the ML&W will review the developer’s land lease application materials for completeness.

3-AK-f.4 to 3-AK-f.5 – Initiate Substantive Review of Developer’s Land Lease Application

Once the developer’s land lease application materials are complete, the ML&W will initiate a substantive review of the developer’s application, complete a survey of the requested state lands, and conduct an appraisal of the land value if necessary . The ML&W may rely upon an existing appraisal of the land value provided the appraisal was completed within two years before the date fixed for the lease. AS 38.05.840; AS 38.05.840.

3-AK-f.6 - Does the ML&W Grant the Developer a Preference Right to the Lease Without Competitive Bidding?

The ML&W may grant the owner or lessee of lands adjacent to the requested state lands a preference right to lease the state lands without undergoing the competitive bidding process if the ML&W determines that:

  1. The lease of the state land is necessary for a water-dependent purpose;
  2. The developer’s proposed use of the state land is compatible with the classification of the land and with any applicable land use plans providing for the use and management of state-owned lands; and
  3. Issuing the lease will not interfere with prior existing rights to the leased land.

Alaska Land Act, AS 32.05.075.

3-AK-f.7 to 3-AK-f.8 – Initiate Competitive Bidding Process; Provide Public Notice of Land Auction?

Generally, the ML&W must make state lands available for lease through a competitive bidding process and lease state lands to the highest qualified bidder at the public land auction. Alaska Land Act, AS 32.05.075. The ML&W must publish notice of the land auction in a newspaper of statewide circulation and in newspapers of general circulation in the vicinity of the proposed action at least 30 days before the land auction takes place. The notice must be sufficient to inform the public of the nature of the action and to provide the public with an opportunity to comment on the action. The notice must also specify a minimum acceptable bid and the required lease compensation method. Alaska Land Act, AS 32.05.945. The ML&W must also provide notice of the action, at least 30 days before the land auction takes place, to all appropriate entities identified in AS 38.05.945(c)-(d), which may include, among other parties, local municipalities, regional corporations, village corporations, and/or regional fish and game councils. For more information on notice requirements, see AS 38.05.945.

3-AK-f.9 to 3-AK-f.10 – Will the Commissioner Require Prequalification of Bidders?

The Commissioner of the Alaska Department of Natural Resources (Commissioner) may require bidders for the lease of state lands to be prequalified in order to engage in the bidding process. Note: If the Commissioner requires prequalification of bidders, notice of the land auction must include the prequalification requirements. (See element 3-AK-f.8). AS 38.05.075.

3-AK-f.11 to 3-AK-f.13 – Does the Commissioner Determine That There is Only One Qualified Bidder?

If the Commissioner determines that there is only one qualified bidder, the Commissioner may issue a lease without undergoing the competitive bidding process. The lease must reflect the approved, appraised market value of the land. AS 38.05.075.

If the Commissioner determines that there is more than one qualified bidder, the ML&W will continue with the competitive bidding process. The successful bidder must pay the first year’s rental, or the compensation that the commissioner requires, at the conclusion of the auction.

3-AK-f.14 – Appeal Decision (If Applicable)

An aggrieved bidder may appeal the ML&W’s decision to the Commissioner within five days. Following the Commissioner’s review, the aggrieved bidder may appeal the Commissioner’s decision to the superior court. AS 38.05.075.

3-AK-f.15 to 3-AK-f.16 – Complete Best Interest Finding Process

Before the ML&W may issue a lease or otherwise dispose of state land, the ML&W must first determine in a written finding that the interests of the state will be best served by the proposed action. The written finding, known as a best interest finding, considers and discusses relevant information, reflecting the hard look and reasoned approach that the ML&W takes in making its determination of whether a particular action is in the State’s best interest. Best Interest Finding Process:

3-AK-f.17 – State Land Lease

If the ML&W determines that issuing the lease will be in the State’s best interest, the ML&W, with the approval of the Commissioner, will issue the lease, along with any limitations, terms and/or conditions the ML&W deems necessary. AS 38.05.075.

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