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Fees and Bonding

Fees and Bonding

What costs are associated with a lease?

The charge for the lease will be based on a fair market value appraisal or the division's current fee schedule. In order to qualify for the fee schedule, the proposed site must meet certain criteria. Please refer to the fee schedule to determine if your site meets those requirements.

The current fee schedule for aquatic farmsites is $450 for the first acre or portion thereof, plus an additional $125 per acre, or portion thereof, paid annually. Also if you have related facilities, such as a floating caretaker facility or upland site for housing or storage, you will be charged fees for those uses as set out in the above-mentioned fee schedule. As with any lease, you have the option to have an appraisal done, if you prefer. The appraisal is done in accordance with appraisal instructions issued by the department.

A performance bond is also required to be posted and maintained during the lease term. The amount of the bond is determined by such factors as projected site cleanup and restoration, and any associated cleanup costs after termination of the lease, including any unpaid rentals or other obligations accruing until site restoration is complete. The minimum bond amount is $2,500. However, the bond amount may be larger after considering such items as, travel costs to reach the site for cleanup or inspection; the planned size and extent or improvements; whether the improvements, including associated facilities on state land could be towed away for use by other operators, burned onsite, or disposed of at an authorized landfill; and whether heavy equipment would be needed for upland site restoration. The bond amount could change based on changes to the existing operation, new information, or other appropriate factors.

A lessee may reduce the bond amount if three or more lessees post an association bond to cover all of their leases. The minimum-security amount is 50% of the amount individually calculated for each lease. The association must designate an agent for notification purposes and has the right to be notified of the termination of a lease covered by its bond. If neither the former lessee not the association completes the site restoration as required by AS 38.05.090, the department will use the association bond for this purpose, up to 100% of the amount individually calculated for that particular lease. The association may remove a lease that is in good standing from the coverage of the bond after 60 days notice to the department, during which time the affected lessee must make other arrangements to comply with this requirement. A lease that is in default or that has been terminated with site restoration still pending, may not be removed from the coverage of an association bond.

In addition to the annual fee and performance bond, you may also be required to pay for a boundary survey. Currently, surveys are not required for aquatic farmsites. However, the department has the authority to require one in the future to resolve disputes over boundary conflicts or acreage. The survey is done in accordance with survey instructions issued by the department.

Can I get an association bond if I have more than one site?

You may participate in an association bond if you have more than one site provided you form an association with two other lessees.