No. 30324 (Amendment): R850-80. Sale of Trust Lands

DAR File No.: 30324
Filed: 08/15/2007, 11:12
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 sales program for ways to improve and streamline the process. The proposed changes to the agency's sales rule are a result of the comprehensive review.

Summary of the rule or change:

Major changes to the sale program rules are: 1) all sales will be agency-initiated. Applications will no longer be accepted, but nominations will be considered; 2) persons nominating a parcel for sale may be required to submit a deposit in advance which will be used to offset certain costs in preparing the parcel for sale; 3) the sale of trust land will be prohibited in certain circumstances; 4) bids for less than the minimum acceptable price will not be accepted if the price has been disclosed; 5) if the successful bidder defaults on the down payment or other obligations, the property may be offered to the second highest bidder, upon approval by the director; and 6) procedures for limited types of agency-initiated sales, including over-the-counter sales and listings with realtors, 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); Section 53C-4-102; Subsection 53C-4-202(6); Section 63-2-304; and Subsections 72-5-203(1)(a)(i) and 72-5-203(2)(a)

Anticipated cost or savings to:

the state budget:

It is not anticipated that there will be any additional costs or savings to the state as a result of these rule changes. Previously, the agency recouped certain costs associated with preparing a parcel for sale at the time the parcel was sold. Under these rules changes, those same costs will be recouped prior to the sale because the persons nominating parcels for sale may be required to submit a deposit in advance to offset these costs. There won't be any additional cost or savings to the state as a result of these rule changes than what already existed under the previous rule.

local governments:

Local government would not have any cost or savings as a result of these rule changes unless they were the entity nominating a parcel of trust land for sale. In that situation, they would encounter the same cost or savings as any other business or person.

small businesses and persons other than businesses:

It is anticipated that there would be a savings of the $250 application fee for small businesses or other persons to request that the agency sell a particular parcel of trust land. Under the changes being made to this rule, the $250 application fee will no longer be charged because the agency won't be accepting sale applications. However, persons nominating parcels, could potentially be required to submit a deposit to the agency in advance of the sale of the nominated parcel. This advance deposit would cover certain costs incurred by the agency in preparing the parcel for sale. If the person or business nominating the parcel is not the successful bidder at the auction, the advance deposit they paid would be refunded to them by the agency. If they the prevailing bidder at the sale, the advance deposit paid will be applied toward the closing costs on the parcel.

Compliance costs for affected persons:

A potential compliance cost for affected persons could be the payment of an advance deposit to offset certain costs for preparing a parcel for sale, that may be required of the person nominating it. However, the deposit would be refunded if the person was not the successful bidder at the auction. If the nominating person was the successful bidder at the auction, the amount of the advance deposit would be credited against the closing fees. It is not anticipated that there would be any other compliance costs connected with these rule changes.

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

The new rule set will save money for businesses since it no longer requires them to submit an application fee to purchase trust lands. Instead, the process will be driven by discussion and consultation. If the Administration determines to offer a parcel for sale, the applicant may be required to cover up-front costs, with the understanding that those costs will be reimbursed if another party prevails at the sale. In addition, parcels where the high bidder fails to close the sale may now be offered to the next high bidder without the burden of additional time and processing costs. 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.

R850-80. Sale of Trust Lands.

R850-80-100. Authorities.

This rule implements Sections 6, 8, 10, and 12 of the Utah Enabling Act, Articles X and XX of the Utah Constitution, and Subsections 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 the terms and conditions for the sale of trust land.[; and Subsection 72-5-203(2)(a) which directs the Administration to enact rules establishing a process by which responsible authorities may apply to convert permissive temporary easements or rights-of-entry to permanent easements or rights-of-entry.]

 

R850-80-150. Planning.

[Pursuant to Subsection 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 proposal for review by]Submit proposals for the sale of trust lands to the Resource Development Coordinating Committee (RDCC) unless the proposal is exempt from such review;

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

3. [Evaluation of and response to]Evaluate any comments received through the notice and advertising processes[solicitation process] conducted pursuant to R850-80-[400(1)]600 and R850-80-615.

 

R850-80-200. Sale of Trust Lands.

The agency may sell trust land[s] if the agency determines that the sale of the land would be in the best interest of the trust beneficiaries and provided that the land is sold for[at] no less than [the ]fair market value.[ if the agency determines that sale of the lands would be consistent with these rules and in the best interest of the trust beneficiaries.]

 

R850-80-250. [Determination of the Status]Evaluation of Temporary Easements,[ and] Rights-of-Entry and Existing Rights of Record.

[1. ]Prior to the sale of any trust land, the agency shall undertake the notification process set forth in [R850-80-250(2)]R850-40-250(2) to evaluate whether any temporary easement or right-of-entry [created under Subsection 72-5-203(1)(a)(i) ]exists on the subject property. [This evaluation shall not adjudicate the status of any highway crossing trust land that may have been established pursuant to any federal statute, such as R.S. 2477. Highways established in accordance with the requirements of federal law, including R.S. 2477, prior to the state taking title to the underlying property are recognized as valid existing rights.]The agency shall also evaluate the presence and impact of other valid existing rights of record on the subject property prior to sale, and take any appropriate steps to mitigate adverse impacts resulting from such rights.

[ 2. In order to determine the existence of a statutory temporary easement or right-of-entry on the subject property, the agency shall give notice to responsible authorities, as defined in Subsection 72-5-202(1), that the subject property is proposed for disposal through sale. This notice will permit any responsible authority asserting a temporary easement or right-of-entry pursuant to Subsection 72-5-203(1)(a)(i) to file an application to make such temporary easement or right-of-entry permanent (the "application"). The application shall contain a description of the facts which lead the applicant to believe that a statutory temporary easement or right-of-entry exists on the subject property, and other information that may be required by the agency to verify the assertion. Notice shall be provided as follows:

(a) Certified notice shall be mailed to the Attorney General and the executive body of the county in which the subject property is located. This notice shall include the legal description of the subject property proposed for sale and a map showing its location. The executive body of the county will have 90 days from the date of the notice within which to submit the application.

(b) Notice to other responsible authorities who may have an interest in the subject property will be given through publication 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. In addition to the legal description of the subject property being considered for sale, the advertisement shall put responsible authorities on notice that the agency may take action extinguishing the temporary easement or right-of-entry upon sale of the subject property. Other responsible authorities will have 90 days from the first date of publication within which to submit the application.

3. Upon the receipt of an application to convert a temporary easement or right-of-entry into a permanent property easement or right-of-entry, the agency will evaluate the request pursuant to the fiduciary responsibilities of the agency as described in Section 53C-1-302. A decision on whether or not to approve the application will be made at least 30 days prior to the sale of the subject property. Prior to the agency approving or rejecting an application, if any, the agency will review the supporting documentation submitted by the applicant. The agency shall consider material submitted by any responsible authority pursuant to the applicant's appropriate statutory authority. If no application is received after notice is given pursuant to R850-80-250(2), or if an application to make the temporary easement or right-of-entry permanent is not approved, the temporary easement or right-of-entry granted pursuant to Subsection 72-5-203(1)(a)(i) on the subject property will be extinguished upon the execution of a certificate of sale.

]

R850-80-300. Sales Initiation Process.

The sales process [may]shall be initiated by[:] an agency determination to evaluate the appropriateness of the sale of a particular parcel of trust land. The evaluation shall be undertaken in accordance with R850-80-500. In determining the appropriateness of a parcel of trust land for sale, the agency may consider nominations by interested parties.

[ 1. The acceptance of a completed application form pursuant to R850-3-400; or,

2. A determination by the director that disposal of a parcel of property is timely and in the best interests of the trust land beneficiaries.

]

R850-80-400. [Competitive Offering]Sales Deposits.

If the agency evaluates a parcel of trust land for sale due to a nomination by an interested party, the person making such nomination may be required to deposit funds in an amount determined by the agency to be used to offset costs incurred in preparing the parcel for sale. In the event the person making the deposit is the successful purchaser of such land, the deposit shall be a credit against any fees charged by the agency to the purchaser for preparing the land for sale. In the event the person making the deposit is not the successful purchaser of such land or the land is not offered for sale, the deposit shall be refunded.

[ 1. Upon acceptance of a lease or sale application, the agency shall solicit competing applications for lease, sale or exchange through commercially feasible means, including publication at least once a week for three consecutive weeks in one or more newspapers of general circulation in the county in which the sale is proposed. Certified notice that competing applications are being solicited shall be sent to lessees/permittees of record, adjoining lessees/permittees, and adjoining landowners at least 30 days prior to the selection of the successful applicant.

2. Notification and advertising shall include a description of the location of the parcel and any other information which may create interest in the parcel. The successful applicant shall bear the cost of the advertising.

3. The agency shall allow each applicant at least 20 days from the date of mailing of notice as evidenced by the certified mailing posting receipt (Postal Service form 3800), within which to submit a sealed bid containing their proposal for the subject parcel. Competing bids shall be evaluated using the criteria found in R850-30-500(2)(g), R850-80-500, and R850-90-200.

4. The director shall select the preferred applicant. If the preferred application is for a lease, it shall proceed through the process as outlined in R850-30-500(5). If the preferred application is for a sale, it shall proceed through the process outlined in R850-80-500. If the preferred application is for an exchange, it shall be processed pursuant to R850-90-300.

5. If any competing application received pursuant to R850-80-400 qualifies as a unit development lease as defined in R850-30-1100, the agency shall extend the sealed bid proposal deadline to 120 days.

]

R850-80-500. Sale Determination Procedures.

1. Preliminary Analysis

(a) The director [may offer]shall not offer trust land for sale[, without further market analysis or sale determination, trust lands which have been] when:

i) [designated for disposal in General Management Plans; or]the subject property is appreciating in value at a rate in excess of the anticipated return from the investment of the principle;

[ ii) offered for sale within the previous three years but not purchased.

(b) The director may also offer for sale trust lands subject to market analysis and sale determination as provided in R850-80-500(2) and R850-80-500(3) when lands are not precluded from consideration under R850-80-500(1)(c).

(c) The director shall not further consider an application for sale when:

i) the sale results in an unmanageable or uneconomical parcel of trust land, or eliminates or materially restricts access to a remnant holding, without additional remuneration to cover any loss in value to the remnant parcel;

ii) the land has been, or is intended to be designated for development pursuant to R850-140;

iii) the director finds that withdrawing the parcel from public application to develop a marketing plan is justified by market trends or anticipated market demand in the area; or

iv) the director finds that the sale may lead to development which may have a negative effect on the value, developability or marketability of any remaining land holdings.

] ii) there is no evidence of competitive market interest, unless the purpose of the sale is to test the market in a particular area;

iii) the sale would create obstacles to future mineral development on trust lands; or

iv) in the sole discretion of the director, it has been determined that the sale would foreclose future development or management options which would likely result in greater long term economic benefit.

2. Market Analysis

(a) The agency shall conduct a market analysis of a proposed sale of trust land which shall include an estimate of value. If the estimate of value is determined by an appraisal, the cost of the appraisal shall be borne by the successful purchaser.[contract for an appraisal in accordance with agency specifications for the purpose of estimating the fair market value of the trust land. The cost of the appraisal shall be borne by the successful purchaser of the parcel. The agency will determine the minimum acceptable selling price of the subject parcel using the appraisal, the data in (b) below and any other information which is deemed relevant. The minimum acceptable selling price of the parcel, as determined by the agency, shall be provided protected records status pursuant to Subsection 63-2-304(1) or 63-2-304(7) until the sale is consummated, unless otherwise ordered by the director.]

(b) The market analysis may also include the evaluation of:[ agency shall conduct an economic analysis of the proposal, which shall include:

i) appraisal;]

[ii)]i) real estate trends;

[iii)]ii) market demand;

[iv)]iii opportunity costs including potential for appreciation; and

[v)]iv) associated management costs of retention.

3. Sale Determination

[If the market analysis conducted pursuant to R850-80-500(2) above indicates that the increase in income to the trust from leasing the parcel, or from retaining the parcel for appreciation purposes, can reasonably be expected to exceed the return to the trust beneficiaries from the sale of the parcel, the director shall deny the sale application.](a) The director may take into account any factor and circumstances deemed relevant, as well as any applicable policy adopted by the board, when making a determination as to whether to sell trust land. Prior to the sale of trust land, the agency shall take prudent and cost-effective actions to increase the value of the land.

(b) If a sale is determined to be appropriate, the agency shall determine the minimum acceptable selling price of the subject property, which minimum acceptable selling price shall not be less than fair market value. This determination may include information from any of the following:

i) the appraisal;

ii) the data gathered pursuant to R850-80-500(2); and

iii) any other information which the agency considers relevant.

(c) The minimum acceptable selling price shall be provided protected records status until the sale is consummated, unless otherwise ordered by the director.

 

R850-80-550. Methods of Sale.

[Upon authorization to sell trust land and related assets by the director pursuant to R850-80-300(2) or R850-80-500, the agency shall dispose of the land or assets using methods described below:]

The agency may sell land or assets using one of the methods described below:

1. A public sale pursuant to R850-80-[600]610, or

2. A negotiated sale pursuant to R850-80-620.[to a party, either directly or using a broker or real estate marketing entity, after appropriate advertising of the proposed sale and 30-days prior written notice to the board and affected beneficiary institutions describing the terms, reasons and other pertinent facts of the proposed sale. Board approval is required in any of the following situations:

(a) the value of the parcel exceeds $100,000;

(b) the parcel to be sold exceeds 320 acres in size; or

(c) advertising brings forth additional interested purchasers.]

 

R850-80-600. Public Sale Notice and Advertising.[Procedures.]

[1. If a sale is authorized pursuant to R850-30-500(2)(h) or R850-80-400(4), the applicant shall be required to submit an amount equal to 10% of the offer to purchase. This amount shall constitute the applicant's bid for the purchase of the parcel and shall be provided protected records status pursuant to Subsection 63-2-304(1) or 63-2-304(7) until sealed bids are opened at a subsequent auction. The applicant will be allowed to enter into oral bidding subject to R850-80-600(5).

2. All sales shall be advertised through publication at least once each week for three consecutive weeks in one or more newspapers of general circulation in the county in which the land is located. Notices shall also be posted in the local governmental administrative building or courthouse and other appropriate locations. This advertisement shall indicate when and where the sale will be held. It shall contain a general description of the parcel to be sold including township, range and section and a brief description of where the parcel is located. The advertisement shall also indicate the agency office where parties interested in purchasing the land can obtain more information.

3. At least 30 days prior to the sale, notice shall be sent by certified mail to each person who owns property adjoining the land proposed for sale.

4. In addition to the requirements of R850-80-600(2), the agency may advertise sales using commonly accepted methods to the extent which the director has determined may reasonably increase the potential for additional bidding at the sale. Applicant's deposit for advertising specified by R850-80-300(1) will not be used for additional advertising.]1. At least 30 days prior to a public sale, notice shall be sent by certified mail to:

(a) the appropriate county authority in which the subject property is located with a request to have the notice posted in the governmental administrative building or courthouse and other appropriate locations;

(b) lessees/permittees of record on the subject property; and

(c) adjoining landowners as shown on county records.

2. The notice of sale shall include:

(a) the date, time, and location where the sale will be held;

(b) a general description of the subject property including township, range, and section and a brief description of the location of the subject property; and

(c) contact information of the agency office where interested parties can obtain more information.

3. The agency may advertise public sales using any other methods the director has determined may increase the potential for additional competition at the sale.[

5. Public sales shall commence with:

(a) the submission of fixed price sealed bids. A sealed bid shall contain an amount equal to at least 10% of the total amount offered to purchase the property. The agency may require these funds to be in the form of a certified check. On cash sales the purchaser shall pay the purchase price in full with guaranteed funds. The agency reserves the right to reject any bid however submitted. No less than three of those submitting the highest bids shall be allowed to enter into oral bidding, beginning at the amount of the highest sealed bid. The number of additional parties allowed to participate in oral bidding shall be those parties who submit a sealed bid that is within 20% of the third highest sealed bid. In the event that a parcel is offered both as one piece, and broken into several sub-parcels, the prevailing bidders for each of the sub-parcels shall be allowed to participate in the oral bidding when the parcel is offered as one piece. Current Grazing Permittees, Material Permittees and Special Use Lessees who submit sealed bids shall automatically qualify to enter into oral bidding, even if their sealed bid does not otherwise meet the qualifications described above. A bidder shall be held to the value of the bidder's sealed bid; or

(b) the payment of an agency-established bidding deposit. When the sales method outlined in this subsection is used, the agency may waive the requirement to not disclose the minimum acceptable sales price imposed by R850-80-500(2)(a).]

 

R850-80-610. Public Sale Auctions.

Public sale auctions shall be conducted as follows:

1. Sealed bids shall be accepted until the day prior to the auction by the agency, or on the day of the auction by the officer conducting the auction.

2. A sealed bid shall contain funds in an amount equal to at least 10% of the total bid amount offered to purchase the subject property and may be required to consist of certified funds. Bids and bid deposits shall be a specified dollar amount. The agency reserves the right to reject any bid however submitted.

3. Purchasers who have defaulted on certificates of sale may be required to make larger down-payments or submit sealed bids in the form of certified funds even if such a requirement is not contained in the notice of sale.

4. The persons submitting the three highest bids shall be allowed to enter into oral bidding, which shall begin at the amount of the highest sealed bid, subject to those terms and conditions of R850-80-610(5). Those persons who submit a sealed bid that is within 20% of the third highest sealed bid shall also be allowed to participate in oral bidding, subject to those terms and conditions of R850-80-610(5).

5. In the event the minimum selling price of a property is disclosed prior to the auction, persons who bid less than the disclosed minimum selling price shall be disqualified and shall not be eligible for oral bidding, even if such bids would otherwise meet those requirements in R850-80-610(4) or (6).

6. Only current grazing permittees, materials permittees and special use lessees on the subject property who submit sealed bids shall automatically qualify to enter into oral bidding, subject to those terms and conditions of R850-80-610(5).

7. All bids, whether sealed or oral, constitute a valid offer to purchase. An attempt to withdraw a sealed bid after the first sealed bid has been read, or an attempt to withdraw or amend an oral bid may result in the forfeiture of the bid deposit and any other remedy afforded the agency at law or equity.

[6.]8. If, after the first round of oral bidding, no bid is submitted which equals or exceeds the agency's [pursuant to R850-80-600(5)(a) equals or exceeds the ]minimum selling price, then the sale shall not be made except as provided below.

(a) [The bidders who participated in the oral bidding may, at]At the discretion of the officer conducting the sale, qualified bidders may[be allowed to] enter into additional rounds of oral bidding,[ with the] starting at the[amount being the previous] high bid reached in the previous round.[ In the event that more than one sealed bid was submitted, but there was no oral bidding, those persons having submitted a sealed bid who would have been allowed to enter into oral bidding pursuant to R850-80-600(5) shall be allowed to enter into oral bidding with the starting amount being the highest sealed bid. ]

(b) To facilitate the sale of the parcel, the officer conducting the sale may divulge the minimum [acceptable ]selling price[;].

[(b) if there is still not a successful bidder, the person submitting the highest bid, whether it be sealed or oral, may request the agency to reevaluate the minimum selling price. If the agency chooses to accept the request of the person submitting the highest bid, it shall contract for an independent appraisal, the cost for which shall be borne by the requesting party. If this appraisal indicates a value less than the highest bid, then the agency may elect to notify the highest bidder by certified mail and give him two weeks from the date of notice in which to purchase the property pursuant to R850-80-600(7).

7.]9. At the [consummation]conclusion of the [sale]auction, the agency shall collect from the successful bidder:

(a) a down payment in the amount required by the sale notice;

(b) [at least 10% of the total sale price, ]interest on the unpaid balance from the date of sale to the first day of the following month; and

(c) reimbursement of costs incurred in preparing the parcel for sale, which may include costs incurred for advertising, appraisal, cultural resource investigations, environmental assessments, and a sale processing charge.[, the advertising and appraisal costs, and a sales closing charge. The balance shall be payable in no more than 20 annual payments. ]

10. The first payment shall be [payable]due one year from the first day of the month following the sale; subsequent payments shall be [payable]due on the first day of the same month each year thereafter until the balance is paid in full.

11. [Payments]Amounts paid in excess of the current obligations shall be applied to principal. [Any]The unpaid balance, plus interest to date, may be paid in full at any time without penalty.

[8.]12. If the successful bidder defaults on the down payment or otherwise fails to meet the requirements of R850-80-610(9), the property may, upon approval by the director, be offered for sale to the person whose bid was second highest at the auction provided that the terms of the sale shall meet or exceed the minimum acceptable selling price established for the subject property. The second highest bidder shall have 30 days from the date of the agency's offer to submit the amounts required under R850-80-610(9).

13. The interest rate which shall be charged against any unpaid balance at the [time of sale]conclusion of the auction shall be the prime rate, as [published by Zion's First National Bank,]determined by the agency on the date the public sale is approved by the director, plus 2 1/2% (Prime Rate + 2 1/2%).[ as ascertained on the date that the sale is approved.] Interest shall be calculated on a 365-day basis. Every year thereafter, the interest rate which shall be charged against the unpaid balance shall be the prime rate, as [published by Zion's First National Bank,]determined by the agency on the date of billing, plus 2 1/2% (Prime Rate + 2 1/2%).[ as ascertained on the Monday prior to the first of the month previous to the due date of the annual installment.]

[9.]14. Third parties owning authorized improvements on the parcel at the time of the sale shall be allowed 90 days from the date of the sale to remove the improvements. This provision is not applicable when such improvements are permitted under a valid existing right of record when such right survives the sale of the parcel.

 

R850-80-615. Negotiated Sale Notice and Advertising.

1. Prior to an agency decision to initiate a negotiated sale, notice of such shall be sent by certified mail to:

(a) the appropriate county authority in which the subject property is located with a request to have the notice posted in the governmental administrative building or courthouse and other appropriate locations;

(b) lessees/permittees of record on the subject property; and

(c) adjoining landowners as shown on county records.

2. The notice of sale shall include:

(a) a general description of the subject property including township, range, and section and a brief description of the location of the subject property; and

(b) contact information of the agency office where interested parties can obtain more information.

3. The agency may advertise negotiated sales using any other methods the director has determined may increase the potential for additional interest in the subject property.

 

R850-80-620. Negotiated Sale Procedures.

1. Negotiated sales shall be advertised in the manner set forth in R850-80-615. In the event a competing offer(s) is received, the agency shall evaluate the offers and determine what action is in the best interest of the beneficiaries.

2. The board and affected beneficiary institution(s) shall be provided notice 30 days prior to the sale describing the terms, reasons, and other pertinent facts of the proposed negotiated sale.

3. Board approval of a negotiated sale is required if:

(a) the value of the subject property exceeds $250,000.00;

(b) the subject property exceeds 320 acres in size; or

(c) additional interested person(s) indicate to the agency an interest in purchasing the subject property.

4. A purchaser of trust land sold at a negotiated sale may be required to reimburse the agency for costs incurred in preparing the parcel for sale, which may include costs for advertising, appraisal, cultural resource investigations, environmental assessments, and a sale processing charge.

 

R850-80-700. Certificates of Sale.

1. [As soon as reasonably possible following the]Following a public sale[,] or upon concurrence of the parties in a negotiated sale, the agency shall prepare and deliver a certificate of sale to the purchaser. This certificate shall contain a legal description of the [land purchased,]subject property, and shall include:

(a) information regarding the amount paid[,];

(b) the amount due[,];

(c) the time when the principal and interest shall become due[,];

(d) the beneficiary of the land[,];

(e) provisions for remedies the agency may elect in the event of a default, as such remedies are set forth in R850-80-700(8); and

(f) [and ]any other terms, covenants, deed restrictions, or conditions which the agency [finds]considers appropriate.[ Upon payment in full, the agency shall issue a patent pursuant to Subsection 53C-4-102(7).]

2. Certificates of sale [shall]must be executed by the purchaser and returned to the agency within 30 days from the date of the purchaser's receipt of the certificate. If the certificate is not received by the agency within the 30 day period, certified notice [will]shall be sent to the purchaser giving notice that after 30 days the sale [will]may be canceled with all monies received, including the down-payment, forfeited to the [Trust Lands Administration]agency. Notification by certified mail, return receipt requested, of this forfeiture provision shall accompany the transmittal of the certificate to the purchaser.

3. A certificate of sale shall be signed by the director after it has been signed by the purchaser and returned to the agency. The certificate [and the agreement of sale ]shall not be final and no rights shall vest in the purchaser until the certificate is executed by the director. The agency reserves the right to [reject bids]cancel a sale of trust land for any reason prior to execution of the certificate by the director.

4. A certificate of sale may be assigned to any person qualified to purchase trust lands, provided that the assignment is approved by the [agency]director, and that no assignment is effective until approval is given by the director in writing.

5. An assignment of a certificate of sale shall[must] be consistent with these rules, executed by the assignee and assignor and acknowledged, and shall clearly set forth the certificate of sale number, the land involved, and the name and address of the assignee.

6. Assignment of a certificate of sale does not relieve the assignor from any obligations [responsibility ]under the original [contract]certificate of sale.

7. Upon payment in full and surrender of the original certificate of sale for any tract of land sold, or payment in full of any amounts required under R850-80-750(3) for the partial release of property, the agency shall issue a patent to the appropriate person.

8. In the event of a purchaser's default under the certificate of sale, the agency's remedies shall include, without limitation, acceleration of the debt, forfeiture, any remedy which the agency may pursue under the certificate of sale, suite for judgment, foreclosure as provided for under Section 57-1-19 et seq. for trust deeds, and any other remedies afforded at law or equity.

 

R850-80-750. Partial Releases.

[7. ]Partial release[s] of property sold under a certificate[s] of sale may be allowed at the discretion of the [agency]director. The following conditions [must]shall be met:

[ (a) A partial release may only be made for parcels ten acres or larger;

] [(b)]1. Access to the remainder of the land must be preserved without restriction;

[(c)]2. All utilities and infrastructure, including water, sewer and storm drains, electric power, and natural gas, installed on land covered by the certificate [must]shall have the capacity and capability to service all trust land[s] originally included [covered by ]in the certificate;

[(d)]3. Unless the director makes a written finding that waiver of this condition would be in the best interests of the trust beneficiaries, payment shall be made to the agency in an amount equal to 125% of the original price per acre[ paid by the purchaser under the certificate of sale], multiplied by the number of acres to be released, plus interest on that amount to the date payment is received. The payment shall be in the form of [guaranteed]certified funds, and shall be applied to principal. This payment shall not affect the amount or due dates of annual payments;

[(e)]4. Unless the director makes a written finding that waiver of this condition would be in the best interests of the beneficiaries, the 125% payment required by paragraph [(d)]3 above shall not include the 10% down payment [required by statute ]or any [other payment not designated by the payor, and accepted by the agency for that purpose;]annual installment paid under the certificate of sale;

[(f)]5. The buyer shall provide a survey and legal description prepared and sealed by a Utah Registered Land Surveyor of the parcel to be released and the remaining land under the certificate; and

[(g)]6. The value of the remaining land shall not be reduced [below the remaining]to an amount less than the remaining principal balance of the certificate.[

8. Certificates issued pursuant to this section shall contain provisions for remedies that the agency may elect in the event of default. Those remedies shall include, without limitation, acceleration of the debt, forfeiture, any remedy which the agency may pursue under the contract of sale, suit for judgment, foreclosure as provided for under Section 57-1-19 et seq. for trust deeds, and any other remedies afforded at law or equity. Purchasers who have defaulted on certificates of sale may be required to make larger down-payments on subsequent sales.]

 

[R850-80-800. Agency-Initiated Sales.

1. The agency may also offer lands for sale when they have been:

(a) Subdivided by the agency pursuant to Subsection 53C-4-102(4); or

(b) Otherwise subdivided pursuant to state law; and the subdivision is accepted by the director.

2. Sales of parcels pursuant to this section shall be made according to the following procedures:

(a) The agency may offer the subject parcels for sale after advertising pursuant to R850-80-600(2).

(b) The minimum acceptable sales price shall be no less than the appraised fair market value of the parcel and shall be disclosed.

(c) Sales shall be by public oral auction, with the minimum acceptable sales price as the starting bid. Buyers may be represented by third parties.

(d) Bidders must qualify by placing a deposit with the agency for each parcel on which they bid. The amount of the deposit shall be established by the agency for each public auction. Deposits shall be returned to unsuccessful bidders.

(e) Sealed bids shall be accepted from those unable to attend the auction and, if they equal or exceed the minimum acceptable sales price, shall be the starting bids in the oral auction. Sealed bids must clearly designate the lot on which the bid is made, and must include the qualifying deposit.

(f) Payment by the successful bidder shall be made pursuant to the applicable provisions of R850-80-600(7).

(g) In addition to the sales price, each purchaser of a parcel shall pay:

i) a prorated portion of the appraisal costs; and

ii) an application and sales processing charge.

(h) Other provisions of the sale shall be administered pursuant to R850-80-600(8), R850-80-600(10) and R850-80-700.

3. Over the Counter Sales

(a) Following a public auction, the director may designate any unsold parcel for over the counter sale. The designation shall continue in force for a period determined by the director, but not to exceed two years.

(b) The minimum acceptable price of an unsold parcel on an over the counter sale shall be set by the director, using one of the following:

i) The average price of at least three parcels closest in size and characteristics which were sold at the related public auction under R850-80-800(2); or

ii) A reappraisal.

4. At the discretion of the director, unsold parcels may be retained for offering at a subsequent public auction.

5. At the discretion of the director, unsold parcels may be listed with a realtor at the minimum acceptable price plus an amount equivalent to the commission which the realtor will charge on the sale.

]

KEY: administrative procedures, sales

Date of Enactment or Last Substantive Amendment: [October 4, 2004]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-4-102; 53C-4-202(6); 63-2-304; 72-5-203(1)(a)(i); 72-5-203(2)(a)