No. 30323 (Amendment): R850-30. Special Use Leases

DAR File No.: 30323
Filed: 08/15/2007, 11:11
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

At the request of the Board of Trustees for the School and Institutional Trust Lands Administration, the agency has been reviewing its surface leasing program for ways to improve and streamline the processes for greater efficiency. The proposed rule changes are a result of this comprehensive review.

Summary of the rule or change:

Nine basic changes have been made to this rule. The changes are: 1) deletion of the "Unit Development Lease" category since this category is addressed in the Development Program rules; 2) lease rentals may be based on a value other than market value in certain instances; however the lease will contain a termination clause; 3) leases must now be review prior to the review date contained in the lease terms; 4) the index used to review leases will now include any index the agency deems appropriate; 5) the requirement to solicit competing applications may be waived if the director determines it would be in the best interests of the Trust Beneficiaries; 6) provisions prohibiting the leasing of trust lands in certain circumstances have been added; 7) certificates of deposit are no longer an acceptable form of bond; 8) lease amendments no longer need to be reviewed by the agency's Board of Trustees; and 9) provisions for the submission of Letters of Interest have been deleted.

State statutory or constitutional authorization for this rule:

Subsections 53C-1-302(1)(a)(ii), 53C-2-201(1)(a), and 53C-4-101(1); and Section 53C-4-202

Anticipated cost or savings to:

the state budget:

It is anticipated that there could be some savings to the state based on the elimination of the requirement to solicit competing applications in some instances and the ability to use any index the agency deems appropriate when reviewing a lease. There is also a potential loss to the state in instances where the lease rentals are based on a value other than the market value.

local governments:

The only instance where there would be any cost or savings to local government would be if local government were the applicant for a special use lease. The cost or savings would then be the same as to any other business or person.

small businesses and persons other than businesses:

It is anticipated that there could be a small cost to small business and other persons due to the broadening of the use of any index by the agency for lease reviews. Also, the provision where Certificates of Deposit will no long be an acceptable form of bond could cause an increase in costs for obtaining proper bonding.

Compliance costs for affected persons:

It is anticipated that there could be some costs involved for affected persons to comply with the changes to this rule as they seek bonding other than Certificates of Deposit. There is also the possibility of increased costs to affected persons because of the broader range of indices that can be used to review leases. A temporary compliance cost might be the potential advance deposit that could be required from a person nominating a parcel for sale.

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

This updated version of the Special Use Leasing rules streamlines the process and should result in faster response times in the best cases; and at worst, should take no longer than the original rule set. It provides the Administration with additional flexibility to accommodate applicants and lessees. In addition, it now allows for less-than-market-value leasing of lands that would otherwise remain unleased, with the ability to terminate the agreement. This will allow businesses that otherwise could not afford to lease trust lands an opportunity under controlled circumstances. - 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:

10/01/2007

This rule may become effective on:

10/08/2007

Authorized by:

Kevin S. Carter, Director

RULE TEXT

R850. School and Institutional Trust Lands, Administration.

R850-30. Special Use Leases.

R850-30-100. Authorities.

This rule implements Sections 6, 8, 10, and 12 of the Utah Enabling Act, Articles X and XX of the Utah Constitution, and Sections 53C-1-302(1)(a)(ii) and 53C-4-101(1) which authorize the [D]director [of the School and Institutional Trust Lands Administration ]to [prescribe standards and conditions]establish criteria for the leasing [and development of surface resources on Trust Lands Administration]of trust lands.

 

R850-30-150. Planning.

[Pursuant to Section 53C-2-201(1)(a), the Trust Lands Administration shall also undertake to complete the following planning obligations, in addition to the rule-based analysis and approval processes that are prescribed by this rule:]In addition to those other planning responsibilities described herein, the agency shall:

1. [To the extent required by the Memorandum of Understanding between the State Planning Coordinator and the School and Institutional Trust Lands Administration, submit the]Submit proposals to lease trust lands to [for review by ]the Resource Development Coordinating Committee (RDCC) unless the proposal is exempt from such review;[ and]

2. [Evaluation of]Evaluate and respond to comments received through the RDCC process[.]; and

3. [Evaluation of and response]Evaluate and respond to any comments received through the request for proposal process pursuant to R850-30-310 or the solicitation process [conducted ]pursuant to [R850-30-500(2)(a) or R850-30-500(2)(b)]R850-30-500(2), as applicable.

 

R850-30-200. [Surface Leasing of Trust Lands Administration Lands.]Terms of Leases.

1. The agency may issue special use leases for [terms of up to 51 years for ]surface uses of trust lands, excluding grazing, [on all school and institutional trust lands.]for terms of up to 51 years.

2. In exceptional cases, the agency may issue leases for a term of up to 99 years when it has been determined that such a term would be in the best interest of the trust beneficiaries.

3. The agency shall issue leases for the term most consistent with land management objectives found in R850-2. The term of a lease [will]shall not normally be for a period longer than specified below for a particular lease type.

(a) Military: [ten]10 years

(b) Agricultural: 20 years

[(c) Recreational 20 years

(d)](c) Telecommunications: 20 years

[(e)](d) Commercial: 51 years

[(f)](e) Industrial: 51 years

[(g)](f) Residential: 51 years

[(h)](g) Governmental (Other than Military): 51 years.

 

R850-30-300. [Classifications]Categories of Special Use Leases.

Special use leases are classified [either as standard or unit development special use leases. Applications may be made under]according to the following categories.

[1. Standard

The standard classification may include the following uses:

(a)]1. Commercial: use of trust land for a restaurant,[Restaurant,] service station, boating facilities, motels, retail businesses and similar uses may be included in this category.

[(b)]2. Industrial: [Testing ]use of trust land for testing sites, mining or extraction facilities, manufacturing plants and similar uses may be included in this category.

[(c)]3. Residential: [A lease on which the applicant intends, at the time of lease issuance, to establish]use of trust land for a private, permanent home and legal domicile may be included in this category.

[(d)]4. Agricultural: [Crop ]use of trust land for crop production, improved pasture lands, irrigation improvements and similar uses, excluding grazing, may be included in this category.

[(e) Recreational: Outdoor sports, picnicking facilities, open space, conservation zones, recreational cabin sites.]5. Telecommunications: use of trust land for the operation of towers and building for telecommunication purposes may be included in this category.

6. Governmental: use of trust land for water storage tanks, well sites, reservoirs, gun ranges and similar uses by a governmental agency may be included in this category.[

2. Unit Development Special Use Lease

The unit development lease may be issued when the proposed land use requires a planning and decision process beyond the scope of the standard special use lease procedures.]

 

R850-30-310. Requests for Proposals.

1. The agency may issue [requests]a request for proposals (RFP) for any lands on which the director has determined the potential for development exists.

2. A proposal submitted in response to the RFP may be for sale, lease, joint development, or exchange and shall receive protected records status until the director selects the preferred proposal.

3. Proposals [will]may be evaluated [on the]using the following criteria:[ found in R850-30-500(2)(g).]

(a) Income potential;

(b) Ability of proposed use to enhance adjacent trust lands;

(c) Proposed timetable for development;

(d) Ability of applicant to perform satisfactorily;

(e) Desirability of proposed use; and

(f) Any other criterion deemed appropriate by the director.

4. Requests for proposals shall be advertised through publication of a notice at least once a week for three consecutive weeks in one or more newspapers of general circulation in the county where the subject property is located [pursuant to R850-30-500(2)(d) ]as well as any other advertising methods [which ]the director determines will increase exposure of the subject property to qualified applicants. The advertisement shall indicate where a person interested in submitting a proposal may obtain an information packet.

5. Proposals shall contain a non-refundable application and review fee as specified in [R850-4]the RFP.

6. Applicants selected in an RFP process shall be exempt from [R850-30-500(2)(b) through R850-30-500(2)(e)]the application process set forth in R850-30-500.

 

R850-30-400. Lease Rates.

1. [The agency shall receive at least fair market value for surface leases. Fair market value of the subject property shall be determined by the agency based upon a market analysis including:]Lease rates shall be based on the market value and income producing capability of the subject property and may be determined by:[

(a) the income-producing ability of the highest and best use of the property; and

(b) a market study of comparable values of similar properties.

2. Lease rates shall be based on fair market value. Lease rates may be determined by the agency by:]

(a) multiplying the [fair ]market value of the subject property by the current agency-determined interest rate[.];

(b) the evaluation and use of comparable lease data; or [which may include percentage rent based on either net or gross income with a guaranteed minimum.]

(c) using either a fixed rate per acre or a crop-share formula for agricultural leases providing that the rental rate is customary and reasonable.[ The agency may require the lessee to acquire adequate crop insurance.]

2. The agency may base lease rentals on a value other than the market value of the subject property, provided that the director determines such is in the best interest of the beneficiaries and provided that the lease contains a clause whereby the agency may terminate the lease prior to the end of the lease term.

3. In addition to lease rental, the agency may require the payment of percentage rents.

[3.]4. The agency, pursuant to board policy, may [periodically ]establish a minimum lease [rates for special use leases]rental based on the costs incurred in administering the leases, and a desired minimum rate of return.

[4.]5. [Rental]Lease Review Procedures and Rental Adjustments for Special Use Leases.

[(a) Standard

i)](a) [Base rentals shall be adjusted as of the effective date specified in the respective lease through a lease review conducted by the agency. Any lease which is reviewed within one year of the effective date specified in the lease shall be deemed to have been reviewed timely and any adjustment in base rentals shall be as of the effective date.]Special use leases shall be reviewed by the agency as of the effective date specified in the respective lease and such review may result in an adjustment of base rental.

[ii)](b) Adjustments in base rentals may be based upon changes in [the ]market value including appreciation of the subject properties, changes in established indices, or other methods which may be appropriate and in the best interest of the trust beneficiaries. The determination of which method to use may be based upon an analysis of the cost effectiveness of performing the review.

[iii)](c) When using established indices, the rate of adjustment shall be [the sum of]based on the indices established for the years involved in the review period, unless the rate of adjustment exceeds a maximum adjustment rate, or fails to reach a minimum rate of adjustment as specified in the respective lease. If no maximum adjustment rate or minimum rate of increase is specified in the lease, then the percent change will increase or decrease according to the above described rate of adjustment.

[iv)](d) The index used in the review may be [composed of any or all of the components listed below, depending upon availability. The agency shall ascertain the percent change in index components annually and shall use this information to determine the percent of change to be required in the base rental of applicable leases.]the applicable component of the CPI-U or any other index determined by the agency to be appropriate.

[A) Changes in assessed value for the most current year for the appropriate category of land as published by the State Tax Commission;

B) The applicable component of the CPI-U;

C) The applicable Implicit Price Deflators for the Gross National Product;

D) Data from market analyses of comparable leases.

v) A separate index shall be established for each of the following lease types:

A) Commercial/industrial;

B) Residential;

C) Agricultural;

D) Recreational.

vi) For the purpose of this rule, the Military, Telecommunications, and Governmental lease types shall be adjusted using the Industrial Index.

vii)](e) The adjusted rental amount as determined pursuant to this rule shall be rounded to the nearest number evenly divisible by $10.[

(b) Unit Development

Rental adjustments for unit development leases shall be based upon changes in the market value of the property or the applicable index as may be appropriate as determined by the agency.

(c) Suspension, Deferral, and Waiver of Lease Rental Adjustment]

(f) The director may suspend, defer, or waive the adjustment of base rentals in specific instances, [when justified by natural disasters or periods of economic crises, ]based on a written finding that the suspension, deferral, or waiver is in the best interest of the trust beneficiaries.

 

R850-30-500. Application Procedures.

1. Applications for special use leases [should]shall indicate the appropriate lease category, as set forth in R850-30-300.[ be submitted pursuant to R850-3.]

2. [Competitive Leasing]Solicitation of Competing Applications.

[(a) The agency may advertise a parcel of land as open and available for lease.

i) The advertising shall be done pursuant to R850-30-500(2)(d) and R850-30-500(2)(e), as well as any additional advertising the director deems appropriate and shall be considered as a substitute for the competitive advertising process described in R850-30-500(2)(b).

ii) Applications received in response to agency advertising will be evaluated pursuant to R850-30-500(2)(g).

(b)](a) Upon acceptance by the director of [any]a completed special use lease application, the agency shall solicit competing lease applications and, if appropriate, sales applications. [If the subject parcel meets the established criteria for sale contained in R850-80-500(1), then applications to purchase shall also be solicited.]The solicitation of competing applications may be waived by the director based on a written finding that the waiver is in the best interest of the trust beneficiaries.

[(c) The applicant may request an exemption from R850-30-500(2)(b) by petitioning the director to provide for rules exempting that particular class of applications from the competitive process. Pursuant to this rule, ]

(b) [t]The following classes of leases are exempt from the requirements of R850-30-500(2):

i) Communication sites.

ii) Mineral and oil and gas extraction facilities when the agency does not own the mineral estate.

[(d)](c) Competing applications [will]shall be solicited through publication of a notice at least once a week for three consecutive weeks in one or more newspapers of general circulation in the county [in which the lease is offered.]where the subject property is located.

(d) Copies of the notice shall be sent by certified mail [ A]at least 30 days prior to [auction or acceptance of a bid, certified notification will be sent to ]the selection of the successful applicant to lessees/permittees of record[,] on the subject property and adjoining [permittees/lessees and adjoining ]landowners as shown on county records.

(e) Notices [will also be]shall also be sent to the appropriate county authority in which the subject property is located with a request to have the notice posted in the local governmental administrative building or courthouses.

[(e)](f) Notification and advertising shall include a general description of the parcel including township, range, and section, and any other information which may create interest in the parcel [without violating]that does not violate the confidentiality of the initial application. The successful applicant shall bear the cost of the advertising.

[(f) An applicant may claim that information provided to the agency on the initial application except for the legal description and the lease type should be protected under Section 63-2-304(1) or 63-2-304(2). The claimant shall submit a written request for protected records status pursuant to R850-6-500(3). The appropriate information shall receive protected records status during the competitive process.](g) The agency may solicit applications on trust lands when no application has been received by advertising a parcel pursuant to the process described in R850-30-500(2) or any other means, when in the best interest of the trust beneficiaries.

 

R850-30-510. Preferred Application Determination.

[(g)]1. At the conclusion of the advertising and notification process conducted pursuant to [R850-30-500(2)(b)]R850-30-500(2), the agency [shall review and select the preferred applicant]may select the preferred application using either of the following processes. The director shall have full discretion to select which process to use:

(a) Sealed Bid Process.

i) The agency shall allow all applicants at least 20 days from the date of the agency's mailing of notice, as evidenced by the certified mail posting receipt (Postal Service Form 3800), within which to submit a sealed bid containing [their]a proposal to lease, purchase or exchange the subject parcel.

ii) The agency may reject those applications for which [ Applicants not submitting] a proposal is not submitted within the prescribed time period.[ shall have their application(s) rejected.]

iii) [The]A sealed bid proposal for a lease shall contain the first year's rental unless such requirement is waived by the director. A sealed bid proposal for a sale shall contain funds in the amount of 10% of the offer to purchase.[ as required by R850-80-600(1).] These deposits are refundable if the applicant is not the successful applicant or if the applicant withdraws the application prior to [the issuance of the record of]an agency decision.

iv) Competing [bids]proposals [are]may be evaluated using the following criteria:

A) Income potential[,];

B) Ability of proposed use to enhance adjacent [state property,]trust lands;

C) Proposed timetable for development[,];

D) Ability of applicant to perform satisfactorily[, and];

E) Desirability of proposed use[.]; and

F) Any other criterion deemed appropriate by the director.

b. Negotiation Process.

[ii)]i) The director or his designee may[shall] invite each qualified applicant or interested person to meet [privately ]with the agency and present its proposal for the use of the subject property. The director or his designee may also invite persons [may request parties ]other than those responding to the initial solicitation to meet with the agency for the purpose of providing information or making a proposal. The director shall have full authority to:

A) offer counter-proposals;

B) negotiate with any or all of the applicants or interested persons to create a proposal which best satisfies the objectives of R850-2-200;

C) terminate the negotiation process entirely; or

D) require the [respondents ]applicants or interested persons to proceed through the process described in R850-30-500(2)[(g)(i)].

2. If the preferred application is for a lease, it shall be reviewed in accordance with R850-30-550. If the preferred application is for a sale, it shall be reviewed pursuant to R850-80-500. If the preferred application is for an exchange, it shall be reviewed pursuant to R850-90-200.[The director shall consult with the board, pursuant to board policies in place at the time of the consultation or as amended at that time, prior to selecting a preferred applicant or applicants.

(h) The director shall select the preferred applicant based on R850-30-500(2)(g). If the preferred application is for a lease, it shall proceed through the review process as outlined in R850-30-500(5). If the preferred application is for a purchase, it shall be reviewed pursuant to R850-80-500. If the preferred application is for an exchange, it shall be reviewed pursuant to R850-90-200.

(i) If a competing application received pursuant to R850-30-500(2) qualifies as a unit development lease as defined in R850-30-1100, the agency shall extend the sealed bid proposal deadline to 120 days.]

 

R850-30-550. Lease Determination Procedures.

1. The director shall not lease trust lands when such lease:

(a) would be inconsistent with board policy or would not be in the best interest of the trust beneficiaries;

(b) would create significant obstacles to future mineral development; or

(c) would foreclose future development or management options which would likely result in greater long term economic benefit.

 

R850-30-600. Special Use Lease Provisions.

Each lease shall contain provisions necessary to ensure responsible surface management, including those provisions enumerated under Section 53C-4-202 and the following provisions: the rights of the lessee[,]; the rights reserved to the lessor, including the right to review the lease to ensure compliance with the terms and conditions of the lease; the term of the lease; annual rentals and [royalties;]percentage rents, if applicable; reporting of technical and financial data; reservation for mineral exploration and development and other compatible uses; operation requirements; lessee's consent to suit in any dispute arising under the terms of the lease or as a result of operations carried on under the lease; procedures of notification; transfers of lease interest by lessee; terms and conditions of lease forfeiture; and protection of the state from liability [from all]associated with the actions of the lessee on the subject property.

 

R850-30-800. Bonding Provisions.

1. At the time of initial lease payment, the lessee may be required to post with the agency [a bond]performance, payment, and reclamation bonds in the form and amount and subject to any terms and conditions as may be determined by the agency to assure compliance with all terms and conditions of the lease.

2. [All bonds posted on surface leases may be used for payment of all monies, rentals, and royalties due to the lessor, also for costs of reclamation and for compliance with all other terms and conditions of the lease, and rules pertaining to the lease. ]The bond shall be in effect even if the lessee has conveyed all or part of the leasehold interest to a sublessee, assignee, or subsequent operator until the lessee fully satisfies the lease obligations, or until the bond is replaced with a new bond posted by the sublessee or assignee.

3. Bonds may be increased in reasonable amounts, at any time as the agency may order, provided lessor first gives lessee 30 days written notice stating the increase and the reason(s) for the increase.

4. Bonds may be accepted in any of the following forms at the discretion of the agency:

(a) Surety bond with an approved corporate surety registered in Utah[.];

(b) Cash deposit. [However, Trust Lands Administration will]The agency shall not be responsible for any investment returns on cash deposits[.]; or

[(c) Certificate of deposit in the name of "School and Institutional Trust Lands Administration and lessee, c/o lessee's address", with an approved state or federally insured banking institution registered in Utah. The certificate of deposit must have a maturity date no greater than 12 months, be automatically renewable, and be deposited with the agency, the lessee will be entitled to and receive the interest payments. All certificates of deposit must be endorsed by the lessee prior to acceptance by the director.

(d)](c) Other forms of surety as may be acceptable to the agency.

 

R850-30-900. Lease Assignments and Subleases.

1. Any special use lease may be assigned or subleased to any person[, firm, association, or corporation] or entity qualified to hold a lease on trust land, provided, however, that all assignments and subleases are approved by the [agency]director; and no assignment or sublease is effective until approval is given. Any assignment or sublease made without such approval is voidable at the [agency's]director's option.

2. An assignment or sublease shall take effect the day of the approval of the assignment or sublease. On the effective date of any assignment or sublease, the assignee or sublessee is bound by the terms of the lease to the same extent as if the assignee or sublessee were the original lessee, any conditions in the assignment to the contrary notwithstanding.

3. An assignment [must]shall be a sufficient legal instrument, properly executed and acknowledged, [and should clearly set forth]with the lease number, the land involved, and the name and address of the assignee, and the interest transferred clearly indicated.

[4. An assignment shall be executed according to agency procedures.

5.]4. Additional occupants of a telecommunication facility [must]shall abide by all the requirements of this rule. In addition, the agency [shall]may charge each communication site sublessee an amount based on the then current [fair ]market rental value of the premises, and such other factors as may reasonably bear upon the suitability of the sublessee as a tenant of the premises.

[6.]5. As a condition of the approval of an assignment or sublease the agency shall require:

(a) The assignee to accept the most current applicable lease form unless continuation of the existing form is clearly in the best interests of the trust beneficiaries[.]; and

(b) The [lessee]assignee or sublessee to be [acceptable]satisfactory to the [lessor]agency.

 

R850-30-1000. Lease Amendments.

1. Special use leases [issued using a competitive process ]may be amended as to the following terms and conditions [with the lessee's consent, and with prior notice to the board, ]upon the payment of all appropriate processing and other charges, and based on a written finding that the amendment would be consistent with [the school and institutional trust land management objectives found in ]R850-2.

(a) Purpose of the lease;

(b) Term of the lease;

(c) [Rental or royalty amount]Rate of rental or percentage rent;

(d) [Rental or royalty due date]Due date of rental or percentage rent; and

(e) Decrease or increase in contiguous acreage, provided that total amended acreage cannot exceed [125%]150% of the original acreage. If the total amended acreage exceeds [125%]150% of the original acreage, the amendment [must]shall be advertised pursuant to R850-30-500(2).[

2. Special use leases not issued using a competitive process may be amended as to the following terms and conditions with the lessee's consent, and with prior notice to the board, upon the payment of all appropriate processing and other charges, and based on a written finding that the amendment would be consistent with the school and institutional trust land management objectives found in R850-2.

(a) Purpose of the lease;

(b) Term of the lease;

(c) Rental or royalty amount;

(d) Rental or royalty due date; and

(e) Decrease or increase in contiguous acreage, when the amendment to increase acreage is advertised pursuant to R850-30-500(2).]

 

[R850-30-1100. Unit Development Lease.

The procedure provided below for unit development leases shall supersede any conflicting procedures found elsewhere in R850-30. All other non-conflicting rules in R850-30 shall apply to unit development leases.

1. Applicant eligibility

The unit development lease may be issued at the discretion of the agency when a complex relationship between numerous potential uses under the proposed lease indicate a planning and decision process requiring continuing agency involvement to facilitate trust management objectives. Parties continuing to have an interest in developing Trust Lands Administration lands after pre-application discussions with the agency may either file a letter of interest (R850-30-1200), or file an application for a unit development lease.

2. Application procedure

Individuals wishing to lease land under a unit development lease shall file the following material with the local agency office:

(a) The appropriate application fee pursuant to R850-4.

(b) A form, as specified by the agency, indicating tentative approval from city or county planning officials.

(c) The applicant's public disclosure statement, as specified by the agency.

(d) The applicant's Qualifications and Financial Responsibility Statement, as specified by the agency.

(e) A preliminary development plan, as defined in R850-1-200(20).

3. Application Review and Acceptance

Upon receipt of an application, the agency will review the documents to determine completeness. Applicants submitting incomplete applications shall be allowed 60 days to provide the required data. Applications not remedied within the 60-day period shall be rejected with the application fee forfeited to the Trust Lands Administration. Upon acceptance of an application, the applicant shall have 120 days within which to submit a preliminary development plan. During this 120-day period, the agency shall solicit competing applications pursuant to R850-30-500(2)(b) and contract for an appraisal of the subject parcel. The appraisal shall divide the parcel into units of similarly valued lands and shall establish a specific value for each unit. The cost of this appraisal shall be borne by the ultimate lessee of the parcel. The agency will also notify those individuals or groups who have filed letters of interest.

4. Lease Approval

Upon acceptance of an application following the competitive process, the agency shall review the application and make a recommendation to the director to approve or deny the lease.

 

R850-30-1200. Letter of Interest.

1. Parties having a continued interest in developing a particular parcel of Trust Lands Administration land, but who are not ready to commence the development, may notify the agency by a letter of interest stating the nature of continued interest.

2. The letter of interest shall remain in effect for a period not to exceed two consecutive years. Prior to the expiration of the two-year period, the interested party will be advised that the letter of interest is about to expire and that the party has the opportunity to renew under the current rules and fees.

3. The interested party shall include an address which will be used by the agency for all correspondence with that party.

4. The interested party shall submit a non-refundable fee of $100 for each contiguous tract which does not exceed 640 acres.

5. The right acquired by the fee paid is limited to the right to be notified by the agency as described in R850-30-1200(6).

6. When the agency receives an application for sale, lease, material permit or exchange for a parcel of land for which a current letter of interest is on file, the agency shall notify by certified mail all parties having letters of interest on file, regarding the subject property and the applicant.

7. Parties who have submitted a letter of interest shall have 30 days from the date the notification was sent in which to respond by submitting a competing application pursuant to R850-30-500(2). If no application is received from the party having filed a letter of interest, it will be assumed that the party has no further interest in the subject property.

]

KEY: administrative procedures, leases, trust land management, request for proposals

Date of Enactment or Last Substantive Amendment: [November 1, 2002]October 8, 2007

Notice of Continuation: June 27, 2007

Authorizing, and Implemented or Interpreted Law: 53C-1-302(1)(a)(ii); 53C-2-201(1)(a); 53C-4-101(1); 53C-4-202