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(a) The royalty rate must be set as follows, based on the adjusted gross value of coal from the leased area that is sold, disposed of, or consumed by the lessee:
(1) five percent for noncompetitive leases;
(2) no less than five percent for competitive leases where royalty is a bid variable;
(3) no less than five percent nor more than 12 percent for competitive leases where royalty is not a bid variable.
(b) For leases in existence on June 18, 1982, the royalty rate will be changed, at the next time of royalty adjustment, to five percent of the adjusted gross value.
(c) The lessee shall pay the royalty on or before the last day of the month following the month of production.
(d) For leases issued after June 18, 1982, the royalty rate is subject to adjustment by the commissioner not more frequently than every 10 years. The royalty adjustment must take into account the current royalty rates and other consideration being paid for coal of similar quality in the same general area or other relevant areas and all other relevant factors including changes in market conditions, transportation costs, the composition and special characteristics of the deposit, and the Btu content of the coal. A lease in existence on June 18, 1982, will be adjusted in accordance with the terms of the lease.
(e) In this section and in 11 AAC 85.255, "adjusted gross value" means gross value less any deductions authorized under 11 AAC 85.225.
History: Eff. 6/18/82, Register 82; am 12/31/82, Register 84
Authority: AS 38.05.020
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Last modified 7/05/2006