No. 27811 (Amendment): R850-50. Range Management

DAR File No.: 27811
Filed: 04/14/2005, 11:19
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

The agency believes that these amendments will facilitate a more positive outcome for industry and the respective trust beneficiaries by enhancing more equitable returns to the Trust and providing incentives for permittees to improve stewardship practices.

 

Summary of the rule or change:

The change to Section R850-50-600 provides for the agency to assess 50% of the difference between the base grazing fee assessed the permittee by the agency and the fee received by the permittee for a sublease on their permit. The change to Section R850-50-1000 allows the agency to extend the period of time for grazing permits beyond 15 years if substantial investments for range improvement projects are made by the permittee on the allotment.

 

State statutory or constitutional authorization for this rule:

Subsections 53C-1-302(1)(a)(ii) and 53C-2-201(1)(a), and Section 53C-5-102

 

Anticipated cost or savings to:

the state budget:

It is anticipated that there will be a savings to the State through the assessment of 50% of the difference between the grazing fee charged by the agency to the permittee and the amount the permittee receives from their sublessee under a sublease. The actual amount the State receives will vary according to the amount our permittee charges their sublessee. The extension of a permit beyond the term of 15 years will not cost the agency additional money, but the improvements required to extend the permit could potentially improve the land so that it would support a greater number of Animal Unit Month (AUMs) and thus increase the amount the State would receive from the grazing permit.

 

local governments:

Local government will not be affected by these changes since they do not regulate grazing activities or receive any revenue from grazing. Because local government doesn't participate in grazing operations, they would never become a permittee, thus subject to the grazing rules.

 

other persons:

It is anticipated that there will be an increased cost to the permittee because of the agency's assessment of 50% of the difference between what the permittee would pay us per AUM for the grazing permit and what he would in turn receive from his sublessee. Previously, the agency assessed a flat fee for approving a sublease. The permittee could potentially receive less of the sublease fees or the sublessee could pay higher sublease fees to compensate for the amount that would have to be paid to the agency for the sublease. The extension of the permit period beyond 15 years could potentially save the permittee the application fee required to apply for the permit again, in addition to the value added to his operation due to the improvements made to the range.

 

Compliance costs for affected persons:

There are no compliance costs per se, however, the agency's approval of a sublease and the subsequent assessment of the 50% difference in the amount received by the agency and the amount the permittee receives for the sublease will most likely lower the amount the permittee will be able to keep from the sublease. The costs involved to have the permit extended beyond the 15 year term would be for the required improvements to the range. However, those improvements could potentially increase the value of the range for the permittee.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

Two changes are addressed in this rule modification. The first will allow the Trust Lands Administration to share in the revenues currently received solely by our grazing permittees. The current practice allows grazing permittees to further sublease forage resources on trust lands for $1/AUM, regardless of the fee that the permittee charges to the sublessee. The rule change will require the permittee to share this subleasing fee on a 50/50 ratio with Trust Lands Administration. We anticipate that this will continue to encourage the permittee to negotiate for the best price possible while still allowing a fair market return to the Trust Lands Administration for its forage resources. The second modification should not have any financial impacts on the permittee except positive benefits associated with retaining the right to maintain a permit beyond the normal expiration date if the permittee has practiced good stewardship measures and created additional forage values through range improvements. Kevin S. Carter, Director

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

School and Institutional Trust Lands
Administration
675 E 500 S
SALT LAKE CITY UT 84102-2818

 

Direct questions regarding this rule to:

Kim S. Christy at the above address, by phone at 801-538-5183, by FAX at 801-355-0922, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/31/2005

 

This rule may become effective on:

06/01/2005

 

Authorized by:

Kevin S. Carter, Director

 

 

RULE TEXT

R850. School and Institutional Trust Lands, Administration.

R850-50. Range Management.

R850-50-600. Grazing Permit Terms.

No grazing permit shall be issued for a period of time exceeding 15 years. The agency may at its discretion, however, extend the period of time beyond 15 years if it determines that substantial range improvements approved pursuant to R850-50-1100 warrant such an extension. Every grazing permit executed under these rules shall include the following terms and conditions:

1. Terms, conditions, and provisions that shall protect the interests of the trust beneficiaries with reference to securing the payment to the agency of all amounts owed.

2. Terms, conditions, and provisions that shall protect the range resources from improper and unauthorized grazing uses.

3. Other terms, conditions, and provisions that may be deemed necessary by the agency or board in effecting the purpose of these rules and not inconsistent with any of its provisions.

4. The agency may cancel or suspend grazing permits, in whole or in part, after 30 days notice by certified mail to the permittee for a violation of the terms of the permit, or of these rules, or upon the issuance of a lease or permit, the purpose of which the agency has determined to be a higher and better use, or disposal of the trust land. Failure to pay the required rental within the time prescribed shall automatically work a forfeiture and cancellation of the permits and all rights thereunder.

5. Locked gates on trust land without written approval are prohibited. If such approval is granted, keys shall be supplied to the agency and other appropriate parties requiring access to the area as approved by the agency, including those with fire and regulatory responsibilities.

6. Supplemental livestock feeding on trust grazing lease lands may be permitted subject to written authorization by the agency with the designation of a specific area, length of time, number and class of livestock, and subject to a determination that this shall not inflict long term damage upon the land. The agency may assess an additional fee for authorized supplemental feeding. Emergency supplemental feeding shall be allowed for ten days prior to notification.

 

R850-50-1000. Assignment and Subleasing of Grazing Permits.

1. Permittee shall not assign, partially assign, sublease, mortgage, pledge, or otherwise transfer, dispose or encumber any interest in the permit without the written consent of the agency. To do so shall automatically, and without notice, work a forfeiture and cancellation of the permit.[ Consent for subleasing shall only be given if the sublease is compatible with the best interests of the beneficiaries and long-term management of the land and will not unreasonably conflict with the interests of other permittees in the area.

2. The agency may assess an additional fee based upon either the fair market value of the permit or a flat fee per AUM for its approval of any assignment, partial assignment, or sublease which shall be based on the following criteria:]

2. The agency shall assess a fee equal to 50% of the difference between the base grazing fee per AUM assessed by the agency and the AUM fee received by the permittee through the sublease multiplied by the number of AUMs subleased, or a $1.00 per AUM minimum fee, whichever is greater, for its approval of any sublease. The approval of any sublease shall be subject to the following restrictions:

(a) Consent for subleasing shall only be given if the sublease is compatible with the best interests of the beneficiaries and long-term management of the land and will not unreasonably conflict with the interests of other permittees in the area.

[(a)](b) Subleases in-lieu of a collateral assignment shall not be approved.

[(b) An approved sublease shall be valid only for the remaining term of the permit.](c) Any subleases shall not be effective for more than five years.

3. The agency may assess an additional fee based upon either the fair market value of the permit or a flat fee per AUM for its approval of any assignment or partial assignment.

[3.]4. Mortgage agreements or collateral assignments are for the convenience of the permittee. The term of a mortgage agreement or collateral assignment shall not exceed the remaining term of the permit. If the grazing permit is renewed, the permittee may also renew the mortgage agreement or collateral assignment of the permit pursuant to these rules.

 

KEY: administrative procedures, range management

[June 3, 2003]June 1, 2005

Notice of Continuation June 27, 2002

53C-1-302(1)(a)(ii)

53C-2-201(1)(a)

53C-5-102