State Land Board OKs new leasing rules
Associated Press
HELENA -- The state Land Board on Monday unanimously approved new regulations that eliminate the absolute right of farmers and ranchers to maintain their state land leases by just matching a competitor's high bid.
Under the new rules, existing lessees still have an advantage when competing with another bidder for use of the land, but it is no longer an ironclad guarantee. Ultimately, the board has the final say.
The regulations will take effect Dec. 3, in plenty of time for the next annual round of lease renewals that occurs in February.
The change in how lease renewals are handled was forced by a court ruling earlier this year that concluded existing law giving lessees an automatic preference to keep a lease is unconstitutional.
Judge Jeffrey Sherlock of Helena held that such a right deprived the Land Board of discretion to decide who gets a lease, authority that is granted to the members by the constitution.
The ruling set off alarm in the agricultural community, concerned that farmers and ranchers could lose state leases that are integral parts of their operations.
Steve Pilcher, executive vice president of the Montana Stockgrowers' Association, applauded the revised regulations and the speed with which the board acted. He has said the new rules recognize the importance of having leases awarded to people with a proven track record of good land management.
State Auditor John Morrison, a board member, said the regulations restore the board's discretion in leasing decisions while still preserving some preference for current lessees.
The new regulations deal with instances where more than one person is competing for a lease. When that occurs, the existing lessee still has the right to meet the high bid so long as he has not violated land management requirements. That allows him to keep the lease.
However, if a lessee then challenges the rental rate as too high and asks for a discount, the Department of Natural Resources and Conservation must conduct a hearing at which the question of whether a competing bidder should get the lease must be considered.
The new regulations will demand department officials judge who would be the better person to manage the land.
They can consider such factors as respective management plans for crops or grazing, previous experience with such land use, nearby private land use, proposed improvements for the state land, and access to the property.
The Land Board, based on recommendations from the department, will decide who gets the lease and for how much.
Even when no hearing is held, the board could be required to settle a dispute over who should have a lease.
Still, one of the new rules makes it clear that existing leaseholders have an edge. It says the board "recognizes that retention of stable, long-term lessees who are familiar with the operating history and characteristics of the lease promotes good stewardship of the land."
Greg Petesch, chief attorney for the Legislature, had questioned whether the revised regulations maintain a preference that the court had declared unconstitutional.
But Kevin Chappell, chief of the department's Agriculture and Grazing Management Bureau, said the judge threw out the absolute right contained in law.
