2013 Montana Legislature

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SENATE BILL NO. 369

INTRODUCED BY FACEY, HAMLETT, RIPLEY, VINCENT

 

AN ACT GENERALLY REVISING LAWS RELATED TO STATE LAND CABIN AND HOME SITES; REQUIRING THE BOARD OF LAND COMMISSIONERS, CONSISTENT WITH THE BOARD'S CONSTITUTIONAL FIDUCIARY DUTY OF ATTAINING FULL MARKET VALUE, TO MAKE AVAILABLE FOR SALE AT THE REQUEST OF THE LESSEE OR IMPROVEMENT OWNER ALL LEASED OR VACANT STATE LAND, CABIN OR HOME SITES, AND CABIN SITE IMPROVEMENTS; PROVIDING A PROCESS FOR SELLING ALL LEASED OR VACANT STATE LAND AND CABIN SITE IMPROVEMENTS FOR CABIN AND HOME SITES; PROVIDING FOR A VALUATION PROCESS PRIOR TO SALE; EXEMPTING THE SALE OF CABIN OR HOME SITE LOTS FROM THE PROVISIONS OF TITLE 75, CHAPTER 1, PARTS 1 THROUGH 3; PROVIDING RULEMAKING AUTHORITY; AMENDING SECTIONS 77-2-303, 77-2-311, 77-2-318, 77-2-363, AND 77-2-366, MCA; REPEALING SECTION 77-2-320, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.

 

     WHEREAS, implementation of the state cabin site leasing laws has become dysfunctional and those laws have become subject to continuous and unproductive litigation; and

     WHEREAS, a significant number of state land cabin site properties are vacant and are producing no revenue for the state trust land beneficiaries; and

     WHEREAS, the implementation of the state cabin site leasing laws has caused a loss in value of lessee private property improvements; and

     WHEREAS, the sale of all state land cabin site properties is the only long-term and viable solution to resolve the state cabin site leasing law issues and maximize revenue to the state trust land beneficiaries; and

     WHEREAS, it is recognized that in order to maximize the revenue from the sale of these state cabin site properties to the state trust land beneficiaries, the properties must be sold over a reasonable period of time.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

 

     Section 1.  Section 77-2-303, MCA, is amended to read:

     "77-2-303.  Restrictions on land available for sale. (1) Subject to purchase by the department pursuant to 17-6-340, land that in the judgment of the department is likely to contain valuable deposits of coal, oil, oil shale, phosphate, metals, sodium, or other valuable mineral deposits is not subject to sale of either the surface land or any of the mineral deposits. However, this subsection does not prohibit the sale of lands containing sand, gravel, building stone, brick clay, or similar materials.

     (2)  (a) There Except any lands previously leased as cabin sites, there is reserved from sale from all state land bordering on navigable lakes, nonnavigable meandered lakes, and navigable streams, that the board considers in the best interests of the state, a strip of land that includes all the land lying between low-water mark and high-water mark and that extends in width landward from the line of high-water mark of the lake or stream the full width of the 40-acre tract or government lot abutting the line of high-water mark. If the width of the abutting government lot at its narrowest point is less than 100 feet, then the strip reserved must extend to and include the next adjoining 40-acre tract or government lot. The land reserved from sale by this subsection is subject to the granting of easements the same as other state lands.

     (b)  Strips of land bordering on meandering lakes or on navigable streams, except the strip lying between low-water and high-water mark, whether surveyed and platted into blocks and lots or not, may be leased as provided in this title for the leasing of other state lands."

 

     Section 2.  Section 77-2-311, MCA, is amended to read:

     "77-2-311.  Survey and plat of shore lands. The board may cause any part of the lands bordering on lakes described in 77-2-303(2) and on navigable streams that are reserved from sale to be surveyed and platted into blocks and lots. The lots may not be less than 125 feet in width, measured in the general direction of the abutting water front, except that any former cabin or home sites proposed for sale or sold by the board may possess a width less than 125 feet. In all surveys and plats the strip of 100 feet in width along the water front, referred to in 77-2-303(2)(a), must be reserved for the use and enjoyment of the public. Cabin sites or home sites bordering on meandered lakes or navigable streams may be surveyed and sold consistent with the procedures provided in 77-2-361 through 77-2-367."

 

     Section 3.  Section 77-2-318, MCA, is amended to read:

     "77-2-318.  Sale of leased cabin or home sites or city or town lots. (1) At the request of the lessee and if consistent with the orderly development and management of state lands, the board may make available for sale, in the manner provided in this part, any leased cabin or home site or city or town lot that is under lease during the 15th year of any 15-year lease that was established through the open competitive bidding process or through the transition process provided for in 77-1-236 or subsection (4) of this section.

     (1) (a) The board shall, consistent with the board's constitutional fiduciary duty of attaining full market value, make available for sale within a reasonable period of time as provided in this part those lands that were state land cabin or home sites on [the effective date of this act], at the request of a lessee or an improvement owner and with the consent of any mortgagee or other owner of an interest in the cabin or home site improvements, only if the requested sale is consistent with the board's constitutional fiduciary duty of attaining full market value and with the provisions of this part and if the sale is approved by the board.

     (b) (i) The disposition of proceeds of any sale of state land property pursuant to this section must comply with the provisions of 77-2-337.

     (ii) The proceeds of any sale of cabin site improvements pursuant to this part must go to the owner of record of the improvements.

     (2)  The lessee requesting the sale department shall have prepared a current certificate of survey for the property. The cost of preparation of the certificate of survey must be included in the settlement for improvements, as provided for in 77-2-325, if a person other than the lessee is the purchaser.

     (3)  The sale of a lease is exempt from the subdivision laws, except that the development of any new, replacement, or additional water supply or sewage disposal system on the property must be approved pursuant to the review procedure, fee, and other requirements of Title 76, chapter 4, part 1.

     (4)  By January 1, 2012 2014, the board shall adopt rules to ensure that the sales process authorized pursuant to this section is orderly and consistent with its constitutional fiduciary duties and that the number of leased cabin or home sites or city or town lots made available for sale at any given time is consistent with the board's constitutional duty of attaining full market value.

     (5)  Upon a sale of leased land, the department shall, upon compliance with 77-2-101 through 77-2-106, grant a permanent easement across state lands to secure access using current routes.

     (6) For purposes of this section, "cabin site improvements" has the meaning provided in [section 6]."

 

     Section 4.  Section 77-2-363, MCA, is amended to read:

     "77-2-363.  Land banking land sales and limitations -- sale preparation costs. (1) (a) The board may not cumulatively sell or dispose of more than 250,000 acres of state land. Seventy-five percent of the acreage cumulatively sold must be isolated parcels that do not have a legal right of access by the public. At any one time during the life of the land banking process, the board may not sell more than 20,000 acres of state land unless the board has acted to use the revenue from that land to make purchases pursuant to 77-2-364.

     (b)  The estimated fair market value must be determined by a Montana-licensed and Montana-certified appraiser.

     (2)  (a) A person bidding to purchase state land offered for sale shall 20 days prior to the day of auction deposit with the department a bid bond in the form of a certified check or cashier's check drawn on any Montana bank equal to at least 20% of the minimum sale price specified by the department pursuant to 77-2-323(1) to guarantee the bidder's payment of the purchase price. Bid bonds submitted to secure a bid upon a parcel formerly leased as a cabin or home site need only be equal to 5% of the minimum sale price as specified by the department.

     (b)  If the current lessee of the land to be sold has initiated the sale as authorized by 77-2-364, the lessee may cancel the sale by giving notice to the department at least 10 days prior to the day of the auction. When the sale is canceled by the lessee, the lessee shall pay the costs incurred by the department for the preparation of the sale, including any costs incurred for preparation of documents required by 75-1-201.

     (c)  The department shall retain the bid bond of the successful bidder and shall return the bid bonds of the unsuccessful bidders. If the successful bidder fails to comply with the terms of the sale for any reason, the successful bidder's bid bond must be forfeited and credited to the interest and income account of the proper trust.

     (3)  Except for a sale that is initiated by the lessee of the parcel of land proposed for sale, prior to the proposed sale of any parcel of state land under the land banking process, the board shall give 60 days' notice of the proposed sale to the lessee of the parcel to allow the lessee sufficient time to determine whether the lessee wishes to propose an exchange of the land to the board.

     (4)  For a sale initiated by the board or, the department, or the cabin or home site lessee, the lessee of the land must be afforded all the rights and privileges to match the high bid, as provided in 77-2-324.

     (5)  (a) When Except as provided in subsection (6), when the lessee has initiated a sale of land under this section, the lessee shall remit to the department the estimated costs of preparing the parcel for sale, including but not limited to appraisals, cultural surveys, environmental review pursuant to Title 75, chapter 1, parts 1 through 3, and land surveys, if necessary. Payment must be made within 10 days after the board has provided preliminary approval for the sale of the parcel.

     (b)  If the parcel is sold to the lessee, the funds remitted for the costs of the sale must be applied to the actual costs at closing. If the parcel is sold to a party other than the lessee, the funds remitted by the lessee must be refunded to the lessee and actual costs of preparing the parcel for sale must be assessed to the purchaser at closing.

     (6) For the sale of a parcel formerly leased as a cabin or home site:

     (a) the department shall assume the cost of the land survey; and

     (b) the sale is exempt from the provisions of Title 75, chapter 1, parts 1 through 3."

 

     Section 5.  Section 77-2-366, MCA, is amended to read:

     "77-2-366.  Land banking and state land cabin and home sites -- report reports to environmental quality council. (1) (a) The department shall provide a report to the environmental quality council by the July 1 prior to each regular legislative session that describes the results of the land banking program in detail.

     (b) At a minimum, the report must summarize the sale and purchase transactions made through the program by type, location, acreage, value, and trust beneficiary. The environmental quality council shall make any recommendations that it determines necessary regarding the implementation of the state land banking process, including recommendations for legislation.

     (2) Because it is the legislature's intent that the board implement the provisions of 77-2-318(1) in a timely manner, on or before July 1 of each year, the department, in consultation with the appropriate stakeholders, shall report to the environmental quality council by providing a summary of land sales of those lands that were state land cabin or home sites pursuant to 77-2-318 and efforts by the department to comply with the requirements of 77-2-318(1)."

 

     Section 6.  Valuation of cabin or home site and improvements -- rulemaking. (1) (a) Prior to the board's approval of any sale of state land leased as a cabin or home site or state land with a vacant cabin or home site as provided in 77-2-318, the board shall separately determine the full market value of the land and the value of the cabin site improvements existing on the land and the value of any necessary access easement across existing state lands from the nearest public road. The appraisal to determine these values must be based upon comparable sales of nearby existing properties with the hypothetical condition that the state parcel to be sold is accessible for all lawful purposes. The appraisal must determine the raw undeveloped value of the parcel and the value of the cabin site improvements.

     (b) (i) In determining the value of state land leased as a cabin or home site pursuant to subsection (1)(a), the department shall establish a list that is acceptable to the board of no fewer than two third-party independent appraisers that are available to conduct the appraisal of the land and the cabin site improvements. The department shall provide a copy of the list to the cabin site or home site lessee. The lessee shall provide the department with a list of at least 50% of the appraisers from the department's list. The department shall select the appraiser to conduct the appraisal from the list provided by the lessee.

     (ii) The department shall assume the proportionate cost of the appraisal of the state land valuation. The lessee shall assume the proportionate cost of the appraisal of the valuation of the cabin site improvements.

      (c) The board shall disclose the results of the appraisal to the cabin site or home site lessee of the land for sale and shall give that lessee notice and opportunity for an administrative hearing before the department to contest those valuations. The department shall review the arguments and evidence received at the hearing to make a recommendation of the values of the land and the cabin site improvements to the board. The board shall make a final determination on the values of the land and cabin site improvements.

     (2) (a) If the lessee consents to the terms and conditions of the proposed sale and the valuation of cabin site improvements, the sale must proceed utilizing the board's final determination of the values, and the lessee is obligated to transfer its interest in the cabin site improvements existing on the cabin or home site lease according to the board's final determination of their value.

     (b) Nothing in this section prohibits the lessee from accepting a price for the cabin site improvements existing on the cabin or home site that is less than the board's final determination of value.

     (3) For purposes of this section and 77-2-318, "cabin site improvements" includes but is not limited to:

     (a) a home or residence;

     (b) outbuildings and structures;

     (c) sleeping cabins;

     (d) utilities;

     (e) water systems;

     (f) septic systems;

     (g) docks; and

     (h) landscaping.

     (4) The board may adopt rules to implement the provisions of this section.

 

     Section 7.  Repealer. The following section of the Montana Code Annotated is repealed:

77-2-320.        & #160;  Appraisal review board.

 

     Section 8.  Codification instruction. [Section 6] is intended to be codified as an integral part of Title 77, chapter 2, part 3, and the provisions of Title 77, chapter 2, part 3, apply to [section 6].

 

     Section 9.  Effective date. [This act] is effective on passage and approval.

- END -

 


Latest Version of SB 369 (SB0369.ENR)
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