Print Friendly SENATE BILL NO. 1446 – State land leases, payment method
SENATE BILL NO. 1446
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S1446..........................................by RESOURCES AND ENVIRONMENT
STATE LAND - LEASES - Amends existing law to provide that the State Board
of Land Commissioners may provide that rentals for commercial leases and
cottage site leases, and some other leases, may be paid by the date and
upon the terms set by the board in the lease.
02/17 Senate intro - 1st rdg - to printing
02/18 Rpt prt - to Res/Env
02/28 Rpt out - rec d/p - to 2nd rdg
02/29 2nd rdg - to 3rd rdg
03/07 3rd rdg - PASSED - 31-0-4
AYES--Andreason, Boatright, Bunderson, Burtenshaw, Cameron, Crow,
Danielson, Darrington, Deide, Dunklin, Geddes, Hawkins, Ingram,
Ipsen, Keough, Lee, McLaughlin, Noh, Richardson, Riggs, Risch, Sandy,
Schroeder, Sorensen, Stegner, Stennett, Thorne, Walton, Wheeler,
Absent and excused--Davis, Frasure, King-Barrutia, Parry
Floor Sponsor - Schroeder
Title apvd - to House
03/08 House intro - 1st rdg - to Res/Con
03/10 Rpt out - rec d/p - to 2nd rdg
03/13 2nd rdg - to 3rd rdg
03/23 3rd rdg - PASSED - 64-0-6
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Boe, Bruneel,
Callister, Campbell, Chase, Cheirrett, Clark, Crow, Cuddy, Denney,
Ellsworth, Field(13), Field(20), Gagner, Geddes, Hadley, Hammond,
Hansen(23), Hansen(29), Hornbeck, Jaquet, Jones, Judd, Kellogg,
Kempton, Kendell, Kunz, Lake, Linford, Loertscher, Mader, Marley,
McKague, Meyer, Montgomery, Mortensen, Moss, Moyle, Pearce, Pischner,
Pomeroy, Reynolds, Ridinger, Ringo, Robison, Sali, Schaefer, Sellman,
Shepherd, Smith, Smylie, Stevenson, Stoicheff, Stone, Taylor, Tilman,
Trail, Wheeler, Zimmermann
NAYS -- None
Absent and excused -- Black, Deal, Gould, Henbest, Wood, Mr Speaker
Floor Sponsor - Field(20)
Title apvd - to Senate
03/24 To enrol
03/27 Rpt enrol - Pres signed - Sp signed
03/28 To Governor
03/29 Governor signed
Session Law Chapter 84
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE SENATE
SENATE BILL NO. 1446
BY RESOURCES AND ENVIRONMENT COMMITTEE
1 AN ACT
2 RELATING TO STATE LAND LEASES; AMENDING SECTION 58-304, IDAHO CODE, TO PROVIDE
3 THAT THE STATE BOARD OF LAND COMMISSIONERS MAY LEASE ANY PORTION OF THE
4 STATE LAND AT A RENTAL AMOUNT FIXED AND DETERMINED BY THE BOARD, TO PRO-
5 VIDE TERMS AND TO PROVIDE THAT GRAZING LEASES SHALL PROVIDE FOR ANNUAL
6 PAYMENTS UPON CERTAIN DATES; AMENDING SECTION 58-305, IDAHO CODE, TO PRO-
7 VIDE THAT ALL LEASES OF STATE LAND EXCEPT MINERAL LEASES SHALL BE CONDI-
8 TIONAL UPON THE PAYMENT OF THE RENTAL; AND AMENDING SECTION 58-307, IDAHO
9 CODE, TO DELETE LANGUAGE REGARDING ANNUAL RENTALS BEING DUE AND PAYABLE IN
10 ADVANCE OF YEAR ONE OF THE LEASE AND BY JANUARY 1 OF EACH SUCCEEDING YEAR.
11 Be It Enacted by the Legislature of the State of Idaho:
12 SECTION 1. That Section 58-304, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 58-304. LEASES. The state board of land commissioners may lease any por-
15 tion of the state land of the state, at an annual a rental the amount of which
16 shall be fixed and determined by the state board. The rental amount shall be
17 due and payable by the date and upon the terms set by the board in the lease.
18 Provided however, all grazing leases shall provide for annual payments which
19 shall be due and payable by the date set by the board in the lease, but in no
20 case shall the rental for grazing leases be due and payable earlier than Janu-
21 ary 1 or later than May 1 of each succeeding year.
22 (2) The state board of land commissioners shall notify the lessee of any
23 increase in the applicable rental rate six (6) months in advance of the date
24 the rent is due and payable.
25 (3) The lessee shall pay the annual rental to the director of the depart-
26 ment of lands, who shall receipt for the same in the name of the board ,. Upon
27 receiving such annual rental, the director shall immediately transmit the same
28 to the state treasurer.
29 SECTION 2. That Section 58-305, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 58-305. PAYMENT OF RENTAL IN ADVANCE -- EXTENSION OF TIME -- ADJUSTMENT
32 OF COMPETITIVE BID RENTAL RATES. All leases of state land, except mineral
33 leases, shall be conditional upon the payment of rental, annually, in advance,
34 and a violation of this condition shall work a forfeiture of the lease, at the
35 option of the state board of land commissioners, after thirty (30) days'
36 notice to the lessee, such notice being sent to the post office of the lessee,
37 as given by himself to the director of the department of lands when the lease
38 is issued: provided however, that upon the application of any person, firm,
39 corporation or association from whom such rent is or will be owing, the state
40 board of land commissioners is hereby given authority and power to, in its
41 discretion, extend the time of payment of such moneys for said leases for not
1 to exceed two (2) successive years: provided, that the applicant enters into
2 an agreement with the said state board of land commissioners to pay the inter-
3 est on said amount of rent money from January first 1 of the year which the
4 same is otherwise due, to the date of payment, at the rate per annum set by
5 the state board of land commissioners; that this authority shall extend to
6 amounts due on outstanding leases, leases renewed and new applications for
7 leases. Lease rental rates established by competitive bidding may not be
8 adjusted during the term of a lease, except that the state board of land com-
9 missioners upon a finding of a material change of circumstances from those
10 existing at the time of auction, may, after a majority vote of those present,
11 reduce the rental to no less than fair market value.
12 SECTION 3. That Section 58-307, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 58-307. TERM OF LEASE -- APPLICATION FOR RENEWAL -- ALLOWANCE FOR
15 IMPROVEMENTS. (1) No lease of state public school endowment lands, other than
16 those valuable for stone, coal, oil, gas or other minerals, shall be for a
17 longer term than ten (10) years.
18 (2) Notwithstanding any other provisions of law, all state lands may be
19 leased for a period of up to twenty-five (25) years to the federal government,
20 to federal agencies, state agencies, counties, or cities, school districts or
21 political subdivisions when leased for public purposes. Such leases for public
22 purposes may be entered into by negotiation and shall secure a rental amount
23 based on the fair market value of the state land.
24 (3) Notwithstanding any other provisions of law, only the state endowment
25 lands, other than public school endowment lands, described below may be leased
26 for a period of up to forty-nine (49) years for commercial purposes, under
27 such terms and conditions as may be set by the board, provided that the board
28 consults with the county commissioners of the county in which the lands are
29 located before leasing the lands described below, and the use for which the
30 land is leased shall be consistent with the local planning and zoning ordi-
31 nances insofar as is reasonable and practicable. The department shall hold a
32 hearing, on each of the parcels described below, in the community in which the
33 parcel is located.
34 (a) One (1) parcel - E1/2, Section 5, T2N, R2E, Boise Meridian, contain-
35 ing three hundred twenty (320) acres, more or less, and located south of
36 the Boise Airport on Pleasant Valley Road.
37 (b) One (1) parcel - SWSWNW, Section 27, T3N, R2E, Boise Meridian, con-
38 taining eight (8) acres, more or less, located northeasterly of the Boise
39 Airport and north of the Boise Interagency Fire Center.
40 (c) Four (4) parcels - E1/2SW, W1/2SE, NESE, Section 31; SW1/4, Section
41 32, T3N, R2E, Boise Meridian, all containing three hundred sixty (360)
42 acres, more or less, located south of the Boise Airport and west of Pleas-
43 ant Valley Road.
44 (d) Three (3) parcels - SWSW, Section 28; Pt. SESE, Section 29 (east of
45 the Railroad R/W, now a bikepath); W1/2NW, Section 33, all in T3N, R18E,
46 Boise Meridian, all containing one hundred twenty-five (125) acres, more
47 or less, located two (2) miles northerly of Hailey, Idaho, excepting
48 therefrom, a parcel of land, containing twenty (20) acres, more or less,
49 at a location to be determined with access to the sheep driveway located
50 on the county road.
51 (e) One (1) parcel - SWNE, Section 32, T3N, R2E, Boise Meridian, contain-
52 ing forty (40) acres, more or less, located southerly and westerly of the
53 Boise Airport off Gowen Road; Public Building Endowment.
1 (f) Two (2) parcels - Part NESWNE, Section 35, T3N, R2E, Boise Meridian,
2 containing three and fifteen hundredths (3.15) acres, more or less; Part
3 NENESE, Section 35, T3N, R2E, Boise Meridian, containing one and eight-
4 tenths (1.8) acres, more or less; both located northerly and easterly of
5 I-84 between the Broadway Interchange and the Gowen Road/State Highway 21
6 Interchange; Normal School Endowment.
7 (g) One (1) parcel - Part Lot 1, Section 1, T2N, R2E, Boise Meridian,
8 containing five (5) acres, more or less, located near the Gowen Road/State
9 Highway 21 Exit from I-84; Penitentiary Endowment.
10 (h) One (1) parcel - N1/2NW1/4SW1/4, SW1/4NW1/4SW1/4, Section 4, T2N,
11 R2E, Boise Meridian, excepting that portion deeded to Ada County for a
12 public road, containing twenty-eight and seventy-nine hundredths (28.79)
13 acres, more or less, located south of the Boise Airport and east of Pleas-
14 ant Valley Road; Normal School Endowment.
15 (4) Notwithstanding any other provisions of law, only the state public
16 school endowment lands described below may be leased for commercial purposes,
17 for a term not to exceed ten (10) years, and the board may grant, upon payment
18 of good and valuable consideration, a preferential right to renew said lease
19 not more than four (4) times, provided that the board shall consult with the
20 county commissioners of the county in which the lands are located before leas-
21 ing the lands described below, and the use for which the land is leased shall
22 be consistent with the local planning and zoning ordinances insofar as is rea-
23 sonable and practicable. The department shall hold a hearing, on each of the
24 parcels described below, in the community in which the parcel is located.
25 (a) One (1) parcel - All, Section 16, T3N, R18E, Boise Meridian, contain-
26 ing six hundred forty (640) acres, more or less, and located in Ohio Gulch
27 some five (5) miles northerly of Hailey, Idaho.
28 (b) One (1) parcel - E1/2NE, Section 16, T18N, R3E, Boise Meridian, con-
29 taining eighty (80) acres, more or less, and located northwesterly of the
30 intersection of Deinhard Lane and Sampson Trail in McCall, Idaho.
31 (c) One (1) parcel - S1/2NW, NESW, Part NWSW, Part SWSW, Part SESW, Sec-
32 tion 36, T3N, R2E, Boise Meridian, containing one hundred seventy-eight
33 and seventy-one hundredths (178.71) acres, more or less, located northerly
34 and easterly of I-84 between the Broadway Interchange and the Gowen
35 Road/State Highway 21 Interchange; Public School Endowment.
36 (d) One (1) parcel - NE1/4SW1/4, SE1/4NW1/4SW1/4, Section 4, T2N, R2E,
37 Boise Meridian, containing fifty (50) acres, more or less, located south
38 of the Boise Airport and east of Pleasant Valley Road; Public School
40 (e) Two (2) parcels - Lot 14 (Pt. NESE), Lot 16 (Pt. N2SE), SWSE, Lot 17
41 (SESE), Section 22, Township 6 North, Range 36 East, Boise Meridian, con-
42 taining one hundred twenty-seven and seventeen hundredths (127.17) acres
43 more or less; NWSW, Pt. SWSW, Section 23, Township 6 North, Range 36 East,
44 Boise Meridian, containing forty-eight (48) acres, more or less, located
45 fifty (50) miles north of Idaho Falls at the junction of State Highway 28
46 and Interstate Highway 15.
47 (f) One (1) parcel - Lot 9 (Pt. NWNE, Pt. NENW), Lot 10 (Pt. SWNE, Pt.
48 SENW), Section 12, Township 2 North, Range 37 East, Boise Meridian, con-
49 taining nineteen and twenty-seven hundredths (19.27) acres, more or less,
50 located adjacent to the U of I/ISU Center in Idaho Falls.
51 (g) One (1) parcel - Lots 1 and 2, Section 8, Township 2 North, Range 38
52 East, Boise Meridian, containing seven and seventy-seven hundredths (7.77)
53 acres, more or less, located on Lincoln Street in Idaho Falls.
54 (h) One (1) parcel - W1/2, Section 16; Lot 1 and 2 (E2NE), W2NE, Section
55 17, Township 3 South, Range 18 East, Boise Meridian, containing four hun-
1 dred eighty and fifty-seven hundredths (480.57) acres more or less,
2 located on State Highway 93 north of Shoshone at Shoshone Ice Caves.
3 (5) The term "commercial purposes" means industrial enterprises, retail
4 sales outlets, business and professional office buildings, hospitality enter-
5 prises, commercial recreational activities, multifamily residential develop-
6 ments and other similar businesses. For purposes of this section, agricultural
7 leases, grazing leases, oil and gas leases, mineral leases, geothermal leases
8 and single family, recreational cottage site and homesite leases are not con-
9 sidered leases for commercial purposes.
10 (6) The board may require that all fixed improvements constructed upon
11 land leased for commercial purposes be removed or become the property of the
12 state upon termination of the lease, and that any heirs, encumbrances or
13 claims of third parties with respect to any improvements shall be expressly
14 subordinate and subject to the rights of the state under this section.
15 (7) Except for geothermal, oil and gas, and mineral leases, the lease
16 year shall run from January 1 through December 31, and all leases shall expire
17 on December 31 of the year of expiration.
18 (8) The annual rental shall be due and payable in advance of year one of
19 the lease and by January 1 of each succeeding year, except for grazing leases
20 which shall be due and payable by the date set by the state board of land com-
21 missioners in the lease, but in no case shall the rental for grazing leases be
22 due and payable earlier than January 1 or later than May 1 of each succeeding
24 (9) All applications to lease or to renew an existing lease which expires
25 December thirty-first 31 of any year, shall be filed in the office of the
26 director of the department of lands by the thirtieth day of April preceding
27 the date of such expiration. Such applications will be considered by the state
28 land board and be disposed of in the manner provided by law; except that the
29 board may reject conflicting applications for a lease for commercial purposes
30 if the lessee exercises the preference right to renew clause.
31 ( 109) Where conflicts appear upon leases which do not contain a preferen-
32 tial right to renew clause, such applications shall be considered as having
33 been filed simultaneously. However, nothing herein shall be construed to pre-
34 vent the state board of land commissioners from accepting and considering
35 applications for new leases at any time.
36 (1 10) In case improvements have been made on land while under lease which
37 is expiring, and the former lessee is not the successful bidder, but the land
38 is leased to another, the amount of such improvements shall be paid to the
39 former lessee. The following shall be considered improvements: plowing done
40 within one (1) year, provided no crop has been raised on the plowed land after
41 such plowing, fencing, buildings, cisterns, wells, growing crops and any other
42 asset which shall be considered an improvement by the director.
43 (1 21) Commercial leases of the state lands described in this section shall
44 not be subject to the conflict auction provisions of section 58-310, Idaho
45 Code. The board may, at its discretion, call for proposals and sealed bids by
46 public advertisement, and may evaluate said proposals and award the lease to
47 the bidder whose proposal achieves the highest return over the term of the
48 lease and who is capable of meeting such terms and conditions as may be set by
49 the board; in the alternative, the board may call for lease applications by
50 public advertisement and if more than one (1) person files an application to
51 hold an auction in the same manner as provided in section 58-310, Idaho Code.
52 In either case, the board must obtain a reasonable rental, based upon fair
53 market value of the state land, throughout the duration of the lease. The
54 board may reject any or all proposals and any or all bids, and may reoffer the
55 lease at a later date if the board determines that the proposals or bids do
1 not achieve the highest and best use of the land at market rental.
STATEMENT OF PURPOSE
This RS would change Idaho Code Sections 58-304, 58-305 and
58-307 to provide that rentals for commercial leases and
cottage site leases, and some other leases may be paid on a
monthly, quarterly, semi-annual or annual basis -- rather
than just annually.
It is common practice in the commercial leasing sector to pay
rents monthly. This is particularly true when office building
rentals exceed $200,000 to $300,000 per year. It is also common
practice in commercial leasing that a requirement to pay rent
annual, in advance, also includes a three percent discount in
Removing the word "annual" in I.C. 58-304 leaves the Land Board
the latitude to determine frequency of payment based on the amount
of rental due and as fixed in the lease. Small commercial leases
could still be paid on an annual basis. Allowing monthly, quarterly
or semi-annual payment would eliminate the three percent discount
There are no additional costs associated with this legislation.
Existing staff would administer monthly payments. There is a benefit
to those lessees that have large commercial leases because they will
not have to borrow money to make a large annual payment. There is a
benefit to the endowments because there is no need to allow a
discount on rent. The public would benefit because the endowments
will realize more income, which acts as an offset to taxes.
CONTACT: Stan Hamilton, Director
Department of Lands
STATEMENT OF PURPOSE/FISCAL IMPACT S 1446