(1) A person who desires to lease unleased state trust land for a cabinsite must apply on the standard application form prescribed by the department. The application form must be returned to the department and must be accompanied by a nonrefundable application fee. Such application shall be deemed an offer to lease land for a cabinsite as specified by the application, at a rental rate which reflects fair market value.

(2) When the department receives one or more applications to lease a cabinsite on an unleased tract of land, or on a tract which has been reclassified, it may advertise for bids on the tract and shall use the procedures set forth in this rule. The department has the discretion to put cabinsite leases up for bid even without first receiving any applications or offers for those cabinsite leases.

(3) The department will advertise cabinsites for bid in one or more of the following ways:

(a) at least once in a newspaper of general circulation, which services the area where the cabinsite is located;

(b) at least once in any newspaper, magazine, trade journal, flier, or other print medium that potential cabinsite bidders may view;

(c) sending letters to interested parties;

(d) sending e-mails to interested parties; and/or

(e) placing information on the internet.

(4) Nothing in this rule shall preclude the department from generally making it known that a cabinsite is currently unleased and that the department is accepting applications to lease state trust land for a cabinsite.

(5) All bids shall be submitted at a specific place and time as specified by the department. Bids may be sealed bids, oral auction, or submitted electronically, whichever is indicated by the department at the time it advertises for bids.

(6) All competitive bids for cabinsites shall be submitted in the form of dollars per year. In no case may a bid be considered qualified if it is less than the minimum rental specified in the bid solicitation.

(a) For a bid to be considered, the bid must:

(i) include the bid application and application fee;

(ii) include a bid deposit that is ten percent of the amount the bidder bids; and

(iii) meet any other requirements as specified in the bid solicitation.

(b) The department will specify whether the application fee and the bid deposit may be in the form of a cashier's check, money order, or from a credit card or similar electronic funds transfer for electronic bids.

(7) The cabinsite will be leased to the highest qualified bidder, with the following qualifications:

(a) if the board determines that the bid is not in the best interests of the trust and the high bid is rejected, the board will issue its reason for the rejection in writing. The lease may then be issued, at a rental rate determined by the board, to the first bidder who is willing to pay the board-determined rental, whose name is selected through a random selection process from all bidders for the cabinsite lease; or

(b) if no bidder is selected, or if the highest qualified bidder declines the bid, the department may determine if and when to reopen a lease for bid, or offer the cabinsite lease to the next highest qualified bidder at that next bidder's bid amount.

(8) The successful bidder shall sign and return the lease to the department within 30 days of receipt of the lease. If the lease is not signed and returned to the department within 30 days, the bidder shall forfeit the bid deposit, and the department may:

(a) readvertise the lease for bid;

(b) offer the lease to the next highest bidder acceptable to the department; or

(c) choose to offer the lease for bid at a later time.

(9) The rental price for the first year of a new lease shall be prorated by dividing the full amount of the rental for the first year by 365 then multiplying the result by the number of days between the lease start date and the last day of the upcoming February.

(10) When a lease is cancelled, abandoned, or otherwise terminated, the department shall attempt to lease the land in accordance with this rule.

(11) Any former lessee who has had a cabinsite lease cancelled and not reinstated by the board or department for nonpayment of rentals may bid upon that cancelled lease, or any other cabinsite lease provided that before the bid:

(a) the former lessee pays the unpaid rentals billed for that cancelled lease;

(b) if the former lessee is bidding on that cancelled lease, the former lessee must pay any unpaid taxes or similar assessments on the improvements; and

(c) the bid is in compliance with this rule.

(12) Any lessee who has had a cabinsite lease cancelled and not reinstated by the board or department for any reason other than nonpayment of rentals may be allowed to bid; however, the board or the department may reject any or all bids for a cabinsite from a lessee who has had a cabinsite lease cancelled in the past.