Senate Bill No. 359

Introduced By toews

A Bill for an Act entitled: "An Act requiring the department of natural resources and conservation to offer for sale certain state land in Daniels County; creating new trust land replacement accounts, directing proceeds from the lands sold in Daniels County to the new accounts, and specifying the general use of account funds; providing for the transfer of a portion of the state's royalty interest to a purchaser of state land in Daniels County if the land has undeveloped mineral interests; providing conditions of sale for the lands to be offered for sale in Daniels County, unless the conditions do not meet the constitutional requirements regarding sale of state lands; amending sections 77-2-301, 77-2-303, 77-2-304, 77-2-307, 77-2-329, and 77-2-343, MCA; and providing an immediate effective date."

Be it enacted by the Legislature of the State of Montana:

NEW SECTION. Section 1.  Sale of certain state lands required -- retention of certain state interests -- conditions of sale. (1) The department, with the approval of the board, shall offer for sale at auction state lands within the borders of Daniels County that:

(a) as of [the effective date of this act], are under lease in accordance with this chapter; and

(b) are leased by a lessee who desires to have the land subject to the lessee's lease offered for sale in accordance with this section.

(2) Sales must be conducted in the manner prescribed by this section, the Montana constitution, and other applicable state law.

(3) For land with undeveloped mineral interests, a royalty interest in the amount of 1% of the state's royalty interest must be transferred to the purchaser as a condition of purchase. All other mineral and royalty interests in the state lands must remain with the state.

(4)(3) In order to ensure that the sale of state lands does not have an adverse effect on other land values in the affected counties, the board shall establish a systematic plan of sale that allows for the sale of not more than 10% of the state land in the county in any 1 year. The land may be sold on a certificate of purchase with a 30% downpayment and 15 annually amortized payments, with the interest rate set at a percentage based on the rate established by the board of investments for other state investments at the time that the contract for sale is entered.

(5)(4) The acreage limitation in 77-2-307 does not apply to sales made under the provisions of this section.

(6)(5) All revenue generated from the sale of state land authorized under this section must be deposited in the trust land replacement accounts and accounted for and disbursed according to the requirements of [section 2].

(7)(6) A sale of state land under this section may not be conducted in any manner that prohibits the board from meeting its constitutional mandate to obtain full market value of the estate.


NEW SECTION. Section 2.  Trust land replacement accounts created -- use of funds. (1) There is a trust land replacement account in each permanent fund referenced in subsection (5) in the state treasury. Notwithstanding the provisions of 77-2-337, funds transferred to or paid to the state from land sales pursuant to [section 1] must be deposited in the trust land replacement account within the permanent fund arising from the grant to which the sold land belonged and must be disbursed in accordance with this section.

(2) Funds in the trust land replacement accounts must be separately accounted for and may be used only for acquiring real property for each individual trust established in sections 10, 11, 14, and 17 of The Enabling Act, to replace trust lands that are exchanged or transferred.

(3) Funds in the trust land replacement accounts may be expended by the department only when authorized by the board.

(4) The legislature may from time to time appropriate additional money for deposit into the trust land replacement accounts.

(5) All proceeds from sales of state land pursuant to [section 1] must be disbursed in accordance with this section and within 5 years of the date of receipt or revert after expiration of that period to the permanent fund arising from the grant to which the sold land belonged, in conformance with 77-2-337.

Section 3.  Section 77-2-301, MCA, is amended to read:

"77-2-301.   Sales of state land under board control. The board is hereby vested with has the power and authority to decide when sales of state lands are to be held and what state lands are to be offered for sale, subject to the limitations of this title, as the best interests of the state may appear to require. As a general rule and except as provided in 77-2-318 and [section 1], no a sale of state lands shall may not be held unless applications have been made for the purchase of lands within one county by prospective purchasers representing at least 12 families."

Section 4.  Section 77-2-303, MCA, is amended to read:

"77-2-303.   Restrictions on land available for sale. (1) Except as provided in 77-2-318, lands classified as timberlands are not subject to sale, but timber thereon on those lands may be sold and disposed of in the manner provided by law.

(2)  Lands which Except for lands sold under the provisions of [section 1], lands that in the judgment of the board are likely to contain valuable deposits of coal, oil, oil shale, phosphate, metals, sodium, or other valuable mineral deposits are not subject to sale, either the surface land or any of such deposits therein in the land. However, this does not prohibit the sale of lands containing sand, gravel, building stone, brick clay, or similar materials.

(3)  (a) There is also reserved from sale from all state lands bordering on navigable lakes or bordering on nonnavigable meandered lakes and from all state lands bordering on navigable streams, as the board may deem considers in the best interests of the state, a strip of land which shall include that includes all the land lying between low-water mark and high-water mark and which in addition shall extend extending in width landward from the line of high-water mark of such 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 such the abutting government lot at its narrowest point is less than 100 feet, then the reserved strip hereby reserved shall extend extends to and include includes the next adjoining 40-acre tract or government lot. The land reserved from sale by this subsection shall be is subject to the granting of easements the same as other state lands.

(b)  Such strips 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, however, be leased as provided in this title for the leasing of other state lands."

Section 5.  Section 77-2-304, MCA, is amended to read:

"77-2-304.   Mineral reservations in state lands. All Except for mineral interests incidental to a sale made under the provisions of [section 1], all coal, oil, oil shale, gas, phosphate, sodium, and other mineral deposits in state lands, except sand, gravel, building stone, and brick clay, which that were not reserved by the United States before July 1, 1927, are reserved to the state. All those deposits are reserved from sale except upon a rental and royalty basis as provided by law. A Except for the 1% of the state's amount of interest acquired by a purchaser under [section 1], a purchaser of state lands acquires no may not acquire a right, title, or interest in or to any of those deposits. The state also reserves for itself and its lessees the right to enter upon these lands to prospect for, develop, mine, and remove those deposits and to occupy and use so much of the surface of the lands as may be required for all purposes reasonably extending to the exploring for, mining, and removal of the deposits therefrom from the lands, but the lessee shall make just payment to pay the purchaser for all damage done by reason of such entry upon the land and the use and occupancy of the surface thereof of the land."

Section 5.  Section 77-2-307, MCA, is amended to read:

"77-2-307.   Limitation on acreage. (1) Except as provided in subsection subsections (2) and (3), no a person or corporation may not purchase more than one section of state land, and this area shall may not include more than 160 acres of land susceptible of irrigation.

(2)  The limitations in subsection (1) as to area and irrigability do not apply to:

(a)  lands within a federal irrigation project wherein where the Congress of the United States of America authorizes water to be furnished to an area exceeding 160 irrigable acres; or

(b)  lands to be sold to a tribal government as provided in 77-2-306.

(3) The limitation in subsection (1) as to area does not apply to lands sold under the provisions of [section 1]."

Section 6.  Section 77-2-329, MCA, is amended to read:

"77-2-329.   Terms of payment. (1) Every Except for lands sold under the provisions of [section 1], a purchaser of state land shall pay on the day of sale that portion of the purchase price as he may desire the purchaser desires, but in no case less than 10% of the total sales price. In case the balance on the purchase price is not an exact multiple of $25, then he the purchaser shall pay such an additional sum as is necessary to reduce the balance to an even multiple of $25.

(2)  The purchaser shall pay the balance of the purchase price within 30 days. The department may extend this deadline up to 30 additional days for good cause."

Section 7.  Section 77-2-343, MCA, is amended to read:

"77-2-343.   Patent provisions. (1) Such deed or patent shall contain the reservation of easements for rights-of-way to the United States, reservation of all minerals in the land as provided in 77-2-304, and all other reservations to which the particular land conveyed is subject.

(2)  If the land is located within the boundaries of a federal irrigation project, the patent shall must contain a lien clause substantially in the following form: The land hereby conveyed is located within the boundaries of a federal irrigation project and is subject to all liens which that the United States may have thereon on the land by reason of its being located under such the irrigation project.

(3)  This section does not require any reservation in a patent which that was not an express or implied reservation in the certificate of purchase pursuant to which the patent is issued. The statutes in effect when such the certificate of purchase was issued must govern."

NEW SECTION. Section 8.  Codification instruction. [Sections 1 and 2] are 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 [sections 1 and 2].

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