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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 the all state
21 endowment lands, other than public school endowment lands, described below may
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, tThe department
29 shall hold a hearing, on each of the parcels described below, in the community
30 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 of
33 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 Boise
36 Airport and north of the Boise Interagency Fire Center.
37 (c) Four (4) parcels - E1/2SW, W1/2SE, NESE, Section 31; SW1/4, Section
38 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 of
42 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, more
2
1 or less, located two (2) miles northerly of Hailey, Idaho, excepting
2 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 located
4 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 the
7 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; Part
10 NENESE, Section 35, T3N, R2E, Boise Meridian, containing one and eight-
11 tenths (1.8) acres, more or less; both located northerly and easterly of
12 I-84 between the Broadway Interchange and the Gowen Road/State Highway 21
13 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/State
16 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 a
19 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, containing
24 one hundred eighty-six and forty-nine hundredths (186.49) acres, more or
25 less; NWNE, S2NE, E2W2, Lots 1-4 (W2W2), SE, Section 30, Township 16
26 North, Range 3 East, Boise Meridian, containing five hundred ninety-four
27 and forty hundredths (594.40) acres, more or less; E2, E2W2, Lots 1-4
28 (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 or
30 less, all located on the west side of Cascade Reservoir.
31 (j) One (1) parcel - W2NENE, NWNE, Section 8, Township 15 North, Range 3
32 East, Boise Meridian, containing sixty (60) acres, more or less, located
33 on the west side of Cascade Reservoir.
34 (4) Notwithstanding any other provisions of law, only the state public
35 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 payment
37 of good and valuable consideration, a preferential right to renew said lease
38 not more than four (4) times, provided that the board shall consult with the
39 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 shall
41 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 the
43 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 Gulch
46 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 the
49 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-eight
52 and seventy-one hundredths (178.71) acres, more or less, located northerly
53 and easterly of I-84 between the Broadway Interchange and the Gowen
54 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 south
2 of the Boise Airport and east of Pleasant Valley Road; Public School
3 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, Range
8 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 State
10 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 38
16 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, Section
19 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 public
23 school endowment lands described below may be leased for a period of up to
24 forty-nine (49) years for commercial purposes, under such terms and conditions
25 as may be set by the board, provided that the board consults with the county
26 commissioners of the county in which the lands are located before leasing the
27 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 reasonable
29 and practicable. The department shall hold a hearing, on each of the parcels
30 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, and single 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 not pursuant 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 (120) Commercial leases of the state lands described in this section shall
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