Alaska Administrative Code
Title 11 - Natural Resources
Part 6 - Lands
Chapter 85 - Coal
Article 3 - General Leasing Provisions
11 AAC 85.230 - Royalty in kind

(a) Royalty from a coal lease may be taken in kind under the provisions of 11 AAC 82.700 - 11 AAC 82.715, if the commissioner determines that taking in kind would be in the best interest of the state. The commissioner will consider the financial or legal hardships the taking may have on the lessee, including, but not limited to, the necessity for additional capital equipment, increased costs in production, and the inability to meet existing contractual obligations to customers.

(b) Notwithstanding 11 AAC 82.700, nine months' written notice will be given to each lessee of the election to take the royalty in kind.

(c) Notwithstanding 11 AAC 82.700, if the commissioner elects to take royalty in kind, the lessee shall deliver the royalty coal on the leased premises free of charge, into trucks or other carriers, slurry pipelines, or onto storage piles designated by the commissioner. The lessee is not required to provide free storage for longer than 30 days or pay slurry pipeline charges for any coal run onto storage piles or into slurry pipelines. The commissioner may elect to receive the royalty coal at point of sale or any other established unloading or transfer point between the lease and the point of sale, but the lessee will not be required to pay delivery and handling costs.