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H0515......................................................by STATE AFFAIRS STATE LAND - LEASES - Amends existing law to provide authority for the State Board of Land Commissioners to lease all endowment lands for a lease period of up to forty-nine years for commercial purposes; to revise the definition of "commercial purposes"; and to provide application to mineral leases on state lands. 01/22 House intro - 1st rdg - to printing 01/23 Rpt prt - to Res/Con 02/12 Rpt out - rec d/p - to 2nd rdg 02/13 2nd rdg - to 3rd rdg 02/19 3rd rdg - PASSED - 56-8-6 AYES -- Barraclough, Barrett, Bauer, Bayer, Bedke, Bell, Black, Block, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Cuddy, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Garrett, Harwood, Henbest, Kellogg(Nonini), Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin, McKague, Meyer, Miller, Moyle, Nielsen, Pasley-Stuart, Raybould, Ring, Roberts, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Wills, Wood NAYS -- Andersen, Boe, Jaquet, Mitchell, Naccarato, Ridinger, Ringo, Trail Absent and excused -- Crow, Deal, Field(23), Gagner, Jones, Mr. Speaker Floor Sponsor - Roberts Title apvd - to Senate 02/20 Senate intro - 1st rdg - to Res/Env 03/17 Rpt out - rec d/p - to 2nd rdg 03/18 2nd rdg - to 3rd rdg 03/19 3rd rdg - PASSED - 27-8-0 AYES -- Andreason, Bailey, Brandt, Bunderson, Burtenshaw, Cameron, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Ingram, Keough, Little, Lodge, McKenzie, McWilliams, Noble, Noh, Pearce, Richardson, Sorensen, Stegner, Sweet, Williams NAYS -- Burkett(Maxand), Calabretta, Kennedy, Malepeai, Marley, Schroeder, Stennett, Werk Absent and excused -- None Floor Sponsor - Cameron Title apvd - to House 03/20 To enrol - Rpt enrol - Sp signed - Pres signed 03/22 To Governor 03/23 Governor signed Session Law Chapter 155 Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-seventh Legislature Second Regular Session - 2004 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 515 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO LEASES OF STATE LANDS; AMENDING SECTION 58-307, IDAHO CODE, TO 3 PROVIDE AUTHORITY FOR THE STATE BOARD OF LAND COMMISSIONERS TO LEASE ALL 4 ENDOWMENT LANDS FOR A LEASE PERIOD OF UP TO FORTY-NINE YEARS FOR COMMER- 5 CIAL PURPOSES, TO REVISE THE DEFINITION OF "COMMERCIAL PURPOSES" AND TO 6 PROVIDE APPLICATION TO MINERAL LEASES ON STATE LANDS. 7 Be It Enacted by the Legislature of the State of Idaho: 8 SECTION 1. That Section 58-307, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 58-307. TERM OF LEASE -- APPLICATION FOR RENEWAL -- ALLOWANCE FOR 11 IMPROVEMENTS. (1) No lease of state public school endowment lands, other than 12 those valuable for stone, coal, oil, gas or other minerals, shall be for a 13 longer term than ten (10) years. 14 (2) Notwithstanding any other provisions of law, all state lands may be 15 leased for a period of up to twenty-five (25) years to the federal government, 16 to federal agencies, state agencies, counties, or cities, school districts or 17 political subdivisions when leased for public purposes. Such leases for public 18 purposes may be entered into by negotiation and shall secure a rental amount 19 based on the fair market value of the state land. 20 (3) Notwithstanding any other provisions of law, only theall state 21 endowment lands , other than public school endowment lands, described belowmay 22 be leased for a period of up to forty-nine (49) years for commercial purposes, 23 under such terms and conditions as may be set by the board, provided that, for 24 such leases in excess of ten (10) years, the board consults with the county 25 commissioners of the county in which the lands are located before leasing the 26 lands, described below,and the use for which the land is leased shall be con- 27 sistent with the local planning and zoning ordinances insofar as is reasonable 28 and practicable. For each lease in excess of ten (10) years, t The department 29 shall hold a hearing , on each of the parcels described below,in the community30 county in which the parcel is located. 31 (a) One (1) parcel - E1/2, Section 5, T2N, R2E, Boise Meridian, contain-32 ing three hundred twenty (320) acres, more or less, and located south of33 the Boise Airport on Pleasant Valley Road.34 (b) One (1) parcel - SWSWNW, Section 27, T3N, R2E, Boise Meridian, con-35 taining eight (8) acres, more or less, located northeasterly of the Boise36 Airport and north of the Boise Interagency Fire Center.37 (c) Four (4) parcels - E1/2SW, W1/2SE, NESE, Section 31; SW1/4, Section38 32, T3N, R2E, Boise Meridian, all containing three hundred sixty (360)39 acres, more or less, located south of the Boise Airport and west of Pleas-40 ant Valley Road.41 (d) Three (3) parcels - SWSW, Section 28; Pt. SESE, Section 29 (east of42 the Railroad R/W, now a bikepath); W1/2NW, Section 33, all in T3N, R18E,43 Boise Meridian, all containing one hundred twenty-five (125) acres, more2 1 or less, located two (2) miles northerly of Hailey, Idaho, excepting2 therefrom, a parcel of land, containing twenty (20) acres, more or less,3 at a location to be determined with access to the sheep driveway located4 on the county road.5 (e) One (1) parcel - SWNE, Section 32, T3N, R2E, Boise Meridian, contain-6 ing forty (40) acres, more or less, located southerly and westerly of the7 Boise Airport off Gowen Road; Public Building Endowment.8 (f) Two (2) parcels - Part NESWNE, Section 35, T3N, R2E, Boise Meridian,9 containing three and fifteen hundredths (3.15) acres, more or less; Part10 NENESE, Section 35, T3N, R2E, Boise Meridian, containing one and eight-11 tenths (1.8) acres, more or less; both located northerly and easterly of12 I-84 between the Broadway Interchange and the Gowen Road/State Highway 2113 Interchange; Normal School Endowment.14 (g) One (1) parcel - Part Lot 1, Section 1, T2N, R2E, Boise Meridian,15 containing five (5) acres, more or less, located near the Gowen Road/State16 Highway 21 Exit from I-84; Penitentiary Endowment.17 (h) One (1) parcel - N1/2NW1/4SW1/4, SW1/4NW1/4SW1/4, Section 4, T2N,18 R2E, Boise Meridian, excepting that portion deeded to Ada County for a19 public road, containing twenty-eight and seventy-nine hundredths (28.79)20 acres, more or less, located south of the Boise Airport and east of Pleas-21 ant Valley Road; Normal School Endowment.22 (i) One (1) parcel - NWSWSE, S2SWSE, E2SW, Lot 9 (NWSW), Lot 11 (SWSW),23 Section 19, Township 16 North, Range 3 East, Boise Meridian, containing24 one hundred eighty-six and forty-nine hundredths (186.49) acres, more or25 less; NWNE, S2NE, E2W2, Lots 1-4 (W2W2), SE, Section 30, Township 1626 North, Range 3 East, Boise Meridian, containing five hundred ninety-four27 and forty hundredths (594.40) acres, more or less; E2, E2W2, Lots 1-428 (W2W2), Section 31, Township 16 North, Range 3 East, Boise Meridian, con-29 taining six hundred forty-three and ten hundredths (643.10) acres, more or30 less, all located on the west side of Cascade Reservoir.31 (j) One (1) parcel - W2NENE, NWNE, Section 8, Township 15 North, Range 332 East, Boise Meridian, containing sixty (60) acres, more or less, located33 on the west side of Cascade Reservoir.34 (4) Notwithstanding any other provisions of law, only the state public35 school endowment lands described below may be leased for commercial purposes,36 for a term not to exceed ten (10) years, and the board may grant, upon payment37 of good and valuable consideration, a preferential right to renew said lease38 not more than four (4) times, provided that the board shall consult with the39 county commissioners of the county in which the lands are located before leas-40 ing the lands described below, and the use for which the land is leased shall41 be consistent with the local planning and zoning ordinances insofar as is rea-42 sonable and practicable. The department shall hold a hearing, on each of the43 parcels described below, in the community in which the parcel is located.44 (a) One (1) parcel - All, Section 16, T3N, R18E, Boise Meridian, contain-45 ing six hundred forty (640) acres, more or less, and located in Ohio Gulch46 some five (5) miles northerly of Hailey, Idaho.47 (b) One (1) parcel - E1/2NE, Section 16, T18N, R3E, Boise Meridian, con-48 taining eighty (80) acres, more or less, and located northwesterly of the49 intersection of Deinhard Lane and Sampson Trail in McCall, Idaho.50 (c) One (1) parcel - S1/2NW, NESW, Part NWSW, Part SWSW, Part SESW, Sec-51 tion 36, T3N, R2E, Boise Meridian, containing one hundred seventy-eight52 and seventy-one hundredths (178.71) acres, more or less, located northerly53 and easterly of I-84 between the Broadway Interchange and the Gowen54 Road/State Highway 21 Interchange; Public School Endowment.55 (d) One (1) parcel - NE1/4SW1/4, SE1/4NW1/4SW1/4, Section 4, T2N, R2E,3 1 Boise Meridian, containing fifty (50) acres, more or less, located south2 of the Boise Airport and east of Pleasant Valley Road; Public School3 Endowment.4 (e) Two (2) parcels - Lot 14 (Pt. NESE), Lot 15 (Pt. NESE), Lot 16 (Pt.5 N2SE), SWSE, Lot 17 (SESE), Section 22, Township 6 North, Range 36 East,6 Boise Meridian, containing one hundred sixty and two-tenths (160.20)7 acres, more or less; NWSW, Pt. SWSW, Section 23, Township 6 North, Range8 36 East, Boise Meridian, containing forty-eight (48) acres, more or less,9 located fifty (50) miles north of Idaho Falls at the junction of State10 Highway 28 and Interstate Highway 15.11 (f) One (1) parcel - Lot 9 (Pt. NWNE, Pt. NENW), Lot 10 (Pt. SWNE, Pt.12 SENW), Section 12, Township 2 North, Range 37 East, Boise Meridian, con-13 taining nineteen and twenty-seven hundredths (19.27) acres, more or less,14 located adjacent to the U of I/ISU Center in Idaho Falls.15 (g) One (1) parcel - Lots 1 and 2, Section 8, Township 2 North, Range 3816 East, Boise Meridian, containing seven and seventy-seven hundredths (7.77)17 acres, more or less, located on Lincoln Street in Idaho Falls.18 (h) One (1) parcel - W1/2, Section 16; Lots 1 and 2 (E2NE), W2NE, Section19 17, Township 3 South, Range 18 East, Boise Meridian, containing four hun-20 dred eighty and fifty-seven hundredths (480.57) acres, more or less,21 located on State Highway 93 north of Shoshone at Shoshone Ice Caves.22 (5) Notwithstanding any other provisions of law, only the state public23 school endowment lands described below may be leased for a period of up to24 forty-nine (49) years for commercial purposes, under such terms and conditions25 as may be set by the board, provided that the board consults with the county26 commissioners of the county in which the lands are located before leasing the27 lands described below, and the use for which the land is leased shall be con-28 sistent with the local planning and zoning ordinances insofar as is reasonable29 and practicable. The department shall hold a hearing, on each of the parcels30 described below, in the community in which the parcel is located.31 (a) One (1) parcel - All, Section 36, Township 16 North, Range 2 East,32 Boise Meridian, containing six hundred forty (640) acres, more or less,33 located on the west side of Cascade Reservoir.34 ( 64) The term "commercial purposes" means industrial enterprises, retail 35 sales outlets, business and professional office buildings, hospitality enter- 36 prises, commercial recreational activities, multifamily residential develop- 37 ments and other similar businesses. For purposes of this section, agricultural 38 leases, grazing leases, oil and gas leases, mineral leases, geothermal leases, 39 communication site leases, andsingle family, recreational cottage site and 40 homesite leases, and leases for other similar uses, are not considered leases 41 for commercial purposes. 42 ( 75) The board may require that all fixed improvements constructed upon 43 land leased for commercial purposes be removed or become the property of the 44 state upon termination of the lease, and that any heirs, encumbrances or 45 claims of third parties with respect to any improvements shall be expressly 46 subordinate and subject to the rights of the state under this section. 47 ( 86) Except for geothermal, oil and gas, mineral and commercial leases, 48 the lease year shall run from January 1 through December 31, and all leases 49 shall expire on December 31 of the year of expiration. 50 ( 97) All applications to lease or to renew an existing lease which 51 expires December 31 of any year, shall be filed in the office of the director 52 of the department of lands by the thirtieth day of April preceding the date of 53 such expiration. Such applications will be considered by the state land board 54 and be disposed of in the manner provided by law; except that the board may 55 reject conflicting applications for a lease for commercial purposes if the 4 1 lessee exercises the preference right to renew clause. 2 ( 108) Where conflicts appear upon leases, except for mineral leases 3 which, do notpursuant to chapter 7, title 47, Idaho Code, contain a preferen- 4 tial right to renew clause, such applications shall be considered as having 5 been filed simultaneously. However, nothing herein shall be construed to pre- 6 vent the state board of land commissioners from accepting and considering 7 applications for new leases at any time. 8 ( 119) In case improvements have been made on land while under lease which 9 is expiring, and the former lessee is not the successful bidder, but the land 10 is leased to another, the amount of such improvements shall be paid to the 11 former lessee. The following shall be considered improvements: plowing done 12 within one (1) year, provided no crop has been raised on the plowed land after 13 such plowing, fencing, buildings, cisterns, wells, growing crops and any other 14 asset which shall be considered an improvement by the director. 15 (1 20) Commercial leases of the state lands described in this sectionshall 16 not be subject to the conflict auction provisions of section 58-310, Idaho 17 Code. The board may, at its discretion, call for proposals and sealed bids by 18 public advertisement, and may evaluate said proposals and award the lease to 19 the bidder whose proposal achieves the highest return over the term of the 20 lease and who is capable of meeting such terms and conditions as may be set by 21 the board; in the alternative, the board may call for lease applications by 22 public advertisement and if more than one (1) person files an application to 23 hold an auction in the same manner as provided in section 58-310, Idaho Code. 24 In either case, the board must obtain a reasonable rental, based upon fair 25 market value of the state land, throughout the duration of the lease. The 26 board may reject any or all proposals and any or all bids, and may reoffer the 27 lease at a later date if the board determines that the proposals or bids do 28 not achieve the highest and best use of the land at market rental.
STATEMENT OF PURPOSE RS 13484 The changes to IC 58-307 through this legislation will enable the State Board of Land Commissioners (Board) to lease state endowment lands for a period of up to forty-nine (49) years for commercial purposes. Currently the Board must seek legislative approval for long-term leasing on a parcel-by-parcel basis, which delays possible lease arrangements and inserts an element of uncertainty that can chill potential lessee interest. The Board is mandated by Article 9, Section 8 of the Idaho Constitution to manage endowment lands in such a manner as will secure the maximum long-term financial return for the beneficiary. In order to meet this mandate it is important that the Board have the ability to enter into long-term leases for commercial and industrial developments. Long-term leases in these instances promote are important to capitalize on returns greater than can be realized from short-term uses. The longer lease terms allow lessees the time necessary to recoup large capital investments. Without the ability to lease for these purposes on a long-term basis, the Board cannot effectively maximize returns to the beneficiaries, as mandated. This legislation also clarifies the uses which are considered commercial uses and are therefore eligible for long-term leases. FISCAL IMPACT Revenue to the endowment funds will increase due to development of high value commercial or industrial businesses that will generate market rent on endowment land. No additional general fund money will be needed. CONTACT Name: Jay Biladeau Agency: Department of Lands Phone: 334-0237 Statement of Purpose/Fiscal Impact H 515