2022 Alaska Statutes
Title 38. Public Land
Chapter 05. Alaska Land Act
Article 3. Leasing of Land Other Than for the Extraction of Natural Resources.
Sec. 38.05.073. Recreational facilities development leasing.

Universal Citation: AK Stat § 38.05.073 (2022)

(a) To identify land suitable for recreational facilities development leasing, the commissioner shall make the identification through a regional land use plan or a site-specific land use plan adopted under AS 38.04.065. The identification of land for leasing under this section shall be consistent with any existing regional recreational management plan. The commissioner may request proposals from potential lessees under this section if consistent with an adopted land use plan that expressly allows the specific type of development under consideration. Consistent with AS 38.04.065, the development of a land use plan used to identify land suitable for recreational facilities development leasing must consider the supply of recreational opportunities and alternatives, economic and social factors, and fish, wildlife, and other resources affected by the specific type and location of recreational facilities development under consideration.

(b) AS 38.05.070(a), 38.05.085(c), 38.05.090, and 38.05.103 apply to leasing under this section. The other provisions of AS 38.05.070 - 38.05.105 do not apply to leasing under this section.

(c) If the commissioner identifies land for recreational facilities development leasing under (a) of this section, at least 30 days before the commissioner decides to solicit proposals from potential lessees, the commissioner shall provide public notice of the location and the specific type of recreational facilities development being considered and request comments. The notice shall be provided to (1) a municipality if the land is entirely or partially within the boundaries of the municipality; (2) a regional corporation organized under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) if the boundaries of the corporation established by 43 U.S.C. 1606(a) encompass part or all of the land and the land encompassed by the corporation's boundaries is entirely or partially outside the municipality; (3) a village corporation organized under 43 U.S.C. 1601 if all or part of the land is within 40 miles of the village for which the corporation was established and the land is located entirely or partially outside a municipality; (4) other persons affected by the specific recreational facility development; and (5) persons who have specifically requested to be notified. Public notice identifying the location and the specific type of recreational facilities development under consideration must also be published at least twice in a newspaper of general circulation in the state and in a local newspaper in general circulation in the region where the land is located. The comments received under this subsection become part of the public record for the consideration of the commissioner.

(d) If the commissioner decides to solicit proposals, the commissioner shall prepare a written request for proposals that includes

(1) the specific type of recreational facilities development for which the land may be leased;

(2) the form of compensation that the commissioner intends to require for the lease under (1) of this subsection;

(3) the selection criteria that the commissioner will use to determine the eligibility of a developer, including the developer's financial backing and capability, experience in the proposed undertaking, ability to meet bonding or insurance requirements, and ability to comply with resource and environmental analysis requirements; and

(4) the criteria that the commissioner will use to determine the suitability of proposals.

(e) After preparing a request for proposals under (d) of this section, the commissioner may issue the request to solicit proposals from persons who are interested in leasing the land for recreational facilities development. The request for proposals must be advertised at least three times in a newspaper of general circulation in the state and in a local newspaper in general circulation in the region where the land is located. The proposals submitted to the commissioner must include the specific facts on which the potential lessee bases its ability to develop the land, including its ability to comply with the items identified in (d)(1) - (4) of this section.

(f) After soliciting proposals under (e) of this section, if the commissioner determines that only one potential lessee is acceptable, the commissioner may begin negotiations with the potential lessee to develop the terms and conditions for the lease.

(g) After soliciting proposals under (e) of this section, if the commissioner determines that two or more potential lessees are acceptable, the commissioner may select the potential lessee who submits the highest bid during a public auction or by sealed bids, whichever method the commissioner chooses. The minimum bid must equal the amount established by the commissioner plus the administrative fee established under (k) of this section. The commissioner shall also require the potential lessee to make an earnest money deposit under AS 38.05.860(b). After the commissioner selects a potential lessee, the commissioner may begin negotiations with the potential lessee to develop the terms and conditions for the lease.

(h) After developing proposed lease terms and conditions with a potential lessee under (f), (g), or (j) of this section, the commissioner may issue a preliminary decision under AS 38.05.035(e) that leasing the land to the potential lessee on the proposed terms and conditions serves the best interests of the state. During preparation of the preliminary decision, the commissioner shall consult with affected state agencies regarding issues within the agencies' areas of responsibility and expertise. The commissioner shall give public notice of the preliminary decision under AS 38.05.945 and request comments from the public and state agencies. A public hearing shall be held in the region where the land proposed for lease is located if the commissioner determines there is sufficient local interest. The preliminary decision must include

(1) a statement of the specific type of recreational facilities development for which the land will be leased;

(2) an analysis of alternative sites;

(3) a statement of the terms and conditions to be required in the proposed lease agreement;

(4) a statement of the compensation that the state may require under the proposed lease agreement;

(5) a statement of the potential economic, social, and environmental effects of the proposed development, including the effect on water quality and the traditional and recreational uses of the land;

(6) a statement of the long-term commitments of fish, wildlife, and other natural resources that would be involved in the proposed development;

(7) a statement of alternatives to the commitments identified under (6) of this subsection and alternatives or measures that may reduce or eliminate the effects identified under (5) of this subsection;

(8) an identification of any studies, including economic feasibility studies, or plans to be required by the commissioner; and

(9) for a large project, a preliminary assessment of the project's economic feasibility based on available information.

(i) After reviewing the comments received under (h) of this section, the commissioner shall make a final determination whether the proposed lease will serve the best interests of the state. If the commissioner determines that the proposed lease will serve the best interests of the state, the commissioner shall offer the lease to the proposed lessee subject to the terms, conditions, and study requirements the commissioner determines to be necessary. If a study or plan is required, the potential lessee may be required to provide and pay for the study or plan. For a large project where the commissioner has determined under (h) of this section that there may be significant economic, social, or environmental effects or long-term commitments of fish, wildlife, or other natural resources, the commissioner shall require the potential lessee to prepare and submit a comprehensive economic feasibility study to be completed no later than 18 months after the execution of the lease. State agencies with pertinent expertise or responsibilities shall be involved in the review of required plans and studies. If the plan or study involves fish, game, or customary and traditional use of natural resources, the Department of Fish and Game shall review the methodology and scope of the plan or study. If the Department of Fish and Game determines that the methodology and scope are appropriate for the plan or study, the methodology and scope may be used for the plan or study.

(j) If a potential lessee who was selected under (g) of this section declines the lease offer made under (i) of this section, the commissioner may begin negotiations with the potential lessee who provided the next highest bid under (g) of this section to develop under (g) of this section the terms and conditions for a lease.

(k) The commissioner shall require the potential lessee awarded the right to negotiate a lease under (f), (g), or (j) of this section to pay a nonrefundable administrative fee of at least $250.

(l) The commissioner shall reject all proposals or bids for a lease when it is in the best interest of the state.

(m) The compensation to be paid to the state for a lease issued under this section may include, in the discretion of the commissioner,

(1) a percentage of the annual gross receipts as reported to the United States Internal Revenue Service;

(2) a guaranteed annual minimum rent or a percentage of gross receipts, whichever is greater;

(3) the fair market rental value;

(4) a fixed annual rent that is not less than the fair market rental value of the land;

(5) a fee for each user;

(6) other compensation acceptable to the commissioner; or

(7) a combination of the above.

(n) The annual compensation paid to the state for a recreational facilities development lease shall be reevaluated and adjusted at five-year intervals. The annual compensation for each five-year period after the initial five years of the lease shall be calculated by the same method used to establish the compensation for the initial five-year period.

(o) Before a lease is issued under this section, the land to be covered by the lease shall be surveyed. The survey must be adequate to describe the land to be covered by the lease.

(p) Before entering into a lease under this section, the commissioner shall require the lessee to post a performance bond or provide other security acceptable to the commissioner to cover the costs to the department of one or more of the following, as determined by the commissioner:

(1) completing the development, including site planning, under the terms and conditions of the lease;

(2) maintaining the development under the terms and conditions of the lease;

(3) restoring the lease site if the lease is abandoned or terminated.

(q) The term of the lease may not exceed 55 years. At the expiration of the lease, the commissioner may offer the lessee a right of first refusal on a new lease under this section for the same land if the commissioner determines that leasing the land for an additional term serves the best interests of the state.

(r) The lessee's violation of a provision of this section or of a term or provision of a lease issued under this section subjects the lessee to appropriate legal action and penalties, including a forfeiture of the lease.

(s) [Repealed, § 28 ch 90 SLA 1991.]

(t) In this section, “recreational facilities development” includes the development of lodges, resorts, and other tourism and recreation-related facilities.

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