(1) May be leased by the commissioner. The commissioner of public lands is authorized to execute oil and gas leases, in accordance with and by authority of chapter 79.14 RCW, upon lands of the state of Washington not under the jurisdiction of the department of natural resources.

(2) [Competitive bid requirements. All oil and gas leases issued under this regulation shall be issued after competitive bidding unless otherwise requested by the agency requesting issuance.]

[(3)] Form of lease. Oil and gas leases issued under this regulation shall contain, in addition to the statutory provisions required by chapter 79.14 RCW, further terms, conditions, covenants, and limitations necessary to maintain the suitability of the lands for their intended use after consultation with the agency having jurisdiction over such lands.

[(4)] (3) Administrative expense. The commissioner of public lands may enter into necessary agreements with other agencies to provide for the reimbursement of the department of natural resources for expenses reasonably incurred in oil and gas leasing under this regulation. In the absence of such an agreement, reimbursement for expenses shall be by deductions from lease revenues as authorized by RCW 79.64.040.

[(5)] (4) Revenue from leases. All revenue [derived] less administrative expenses from oil and gas leases issued upon lands of the state of Washington not under the jurisdiction of the department of natural resources shall be paid to the agency having jurisdiction over such lands for distribution as authorized by law.