AK HB271

Reduces the royalty rate to 3% of gross production value for seven state oil and gas leases within the Kitchen Lights Unit in Cook Inlet, effective January 1, 2026

Applies to leases with division of lands numbers 389196, 389197, 389198, 389507, 389514, 389515, and 389923

Authorizes the Department of Natural Resources to audit royalty calculations at any time and terminate the modification if leases are assigned without commissioner approval

Justifies the reduction based on declining production, rising costs, and the need to maintain affordable natural gas supply for Southcentral Alaska utilities and ratepayers

Takes effect immediately upon passage and applies retroactively to January 1, 2026