An Act relating to best interest findings and land use permits, rights-of-way, and easements issued by the Department of Natural Resources; and providing for an effective date.

Updated: April 19, 2000

Senate Bill 255 is intended to clarify the fact that permits issued by the Department of Natural Resources (DNR) pursuant to AS 38.05.850 are exempt from the best interest finding requirement imposed by AS 38.05.035 (e) which applies to disposals of State land.

AS 38.05.850 authorizes the director of the Division of Lands, without the DNR Commissioner's consent and without the necessity of a best interest finding, to issue permits, rights-of-way, and easements on State land for such purposes as roads, field gathering lines, or transmission and distribution pipelines, telephone or electric transmission and distribution lines, log storage, oil well drilling sites and production facilities. All permits issued by DNR are issued pursuant to AS 38.05.850.

Recently the Alaska Supreme Court ruled that a conditional right-of-way permit issued by DNR for construction of an electric transmission line required a best interest finding. The Court's decision jeopardizes the status of permits previously issued by DNR under AS 38.05.850 as each of those permits may, under the Court's logic, constitute a disposal of State land for which a best interest finding was required. The court's decision has potentially dramatic implications for the oil, gas, mining, timber, utility and transportation industries. In order for DNR to comply with the Court's ruling and to survive legal challenges to the permits which it issues, DNR will likely have to issue best interest findings for almost every permit issued under AS 38.95.850.

The consequences of such an approach would (1) strain DNR's budget, (2) substantially delay the permitting process and, (3) negatively impact development and use of State land resources.

SB 255 confirms by clarification and amendment that permits, right-of-way and easements issued under AS 38.05.850 are exempt from the best interest finding requirement of AS 38.05.035(e). SB 255 allows DNR to continue managing State lands cost effectively. There are no negative monetary implications to this Bill.

The request that SB 255 be applied retroactively to all DNR permits issued since July 27, 1981 coincides with the effective date of the permit exception in AS 38.05.035 (e)(6)(C). Retroactive application will eliminate challenges to DNR permits that were issued without a best interest finding and that may still be subject to challenge.

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