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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, Whitworth, Williams NAYS--None 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 Effective: 07/01/00
S1446|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature Second Regular Session - 2000IN 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 landof the state,atan annuala rentaltheamountof which16shall befixed and determined by thestateboard. 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 theannualrental 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 suchannualrental, 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 2 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 Januaryfirst1 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. 3 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 39 Endowment. 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- 4 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 of19the lease and by January 1 of each succeeding year, except for grazing leases20which shall be due and payable by the date set by the state board of land com-21missioners in the lease, but in no case shall the rental for grazing leases be22due and payable earlier than January 1 or later than May 1 of each succeeding23year.24(9)All applications to lease or to renew an existing lease which expires 25 Decemberthirty-first31 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 (110) 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 (121) 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 5 1 not achieve the highest and best use of the land at market rental.
STATEMENT OF PURPOSE RS09942C1 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 rental. 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 on rentals. FISCAL IMPACT 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 334-0200 STATEMENT OF PURPOSE/FISCAL IMPACT S 1446