Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF NATURAL RESOURCES

AND CONSERVATION OF THE STATE OF MONTANA

In the matter of the amendment of ARM 36.25.701, 36.25.702, 36.25.705, 36.25.706, and 36.25.707 pertaining to state land leasing

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

TO: All Concerned Persons

1. On December 6, 2023, at 10:00 a.m., the Department of Natural Resources and Conservation will hold a public hearing in the Montana Room, First Floor, located at 1539 Eleventh Avenue, Helena, Montana, and via Zoom, to consider the proposed amendment of the above-stated rules. Interested parties may access the remote conferencing platform in the following ways:

a. Join Zoom Meeting: https://mt-gov.zoom.us/j/89662056237?pwd=TlQyc05tZXFkYzlYUTk5M2s5dlMxZz09; Meeting ID: 896 6205 6237, Password: 870481; or

b. Dial by Telephone: +1 646 558 8656; Meeting ID: 896 6205 6237, Password: 870481; Find your local number: https://mt-gov.zoom.us/u/kdmQ1jS6Kg

2. The department will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require accommodation, contact the department no later than 5:00 p.m. on November 24, 2023, to advise us of the nature of the accommodation that you need. Please contact Jamie Price, Department of Natural Resources and Conservation, 1539 Eleventh Avenue, P.O. Box 201601, Helena, MT 59620-1601, 406-444-6615, or e-mail [email protected].

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

36.25.701 DEFINITIONS As used in this subchapter, the following definitions apply, except where the context clearly indicates otherwise:

(1) through (6) remain the same.

(7) "Improvement owner" means a person with legal title to the improvements built upon or located on the cabin or home site, who is a current or former lessee, or their successor.

(7) through (11) remain the same but are renumbered (8) through (12).

AUTH: 77-1-204, 77-2-308, 77-2-328, 77-2-362, MCA

IMP: 77-2-328, 77-2-362, 77-2-363, MCA

REASON: The intent of the cabin and home site sales program, when enacted by SB 369 in the 2013 legislative session, was to provide a way for current and former lessees, including those who owned improvements on cabin or home sites with canceled leases, to have the opportunity to participate in the cabin and home site sales program. The addition of a definition for "improvement owner" helps to clarify the intent that those current or former lessees with the legal title to the improvements on lease lots are those owners that can nominate the lots for sale.

36.25.702 TRANSACTION COSTS FOR CABIN SITE OR HOME SITE SALES (1) and (2) remain the same.

(3) Except as provided ~~hereinabove~~ in (1) and (2), processing costs as described in ARM 36.25.701~~(9)~~(11), shall be paid by the nominator or the purchaser, respectively.

AUTH: 77-2-362, MCA

IMP: 77-2-362, MCA

REASON: The proposed amendment is necessary to correct an inaccurate reference to ARM 36.25.701(9). The correct reference is ARM 36.25.701(11).

36.25.705 PROCEDURES FOR NOMINATING AND EVALUATING CABIN SITES AND HOME SITES FOR SALE PURSUANT TO LAND BANKING (1) and (2) remain the same.

(3) The board, the department, the current lessee of, or the improvement owner ~~of the improvements resting upon a cabin site or home site,~~ may nominate that cabin site or home site for sale:

(a) through (e) remain the same.

(4) Sale of cabin sites and home sites are exempt from Montana Environmental Policy Act (MEPA) review under 77-2-363~~(6)(b)~~(7), MCA.

(5) through (13) remain the same.

(14) If the board has preliminarily approved a proposed sale, the department shall contract with a Montana-licensed certified general appraiser to appraise the cabin site or home site, including improvements under consideration for sale in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP)~~, as adopted by reference by the state Board of Real Estate Appraisers in ARM 24.207.402~~. The department will review or contract the review of the appraisal conducted by the contract appraiser.

(15) remains the same.

(16) The department shall give the lessee or improvement owner notice and opportunity for an informal 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 or home site improvements to the board.

(a) The lessee or improvements owner must file notice of appeal of value with the department within ten days of the department's notification to the lessee or improvements owner of the department's initial valuation of the land and the improvements. Within ten days after receipt of any notice of appeal the department shall notify the lessee or improvements owner of the time and place of the hearing before the director of the department, or the director's designee. Any such hearing shall be informal without adherence to strict rules of evidence as provided in 2-4-604, MCA. A hearings examiner may be appointed to conduct the hearing. The lessee or ~~owner of~~ improvements owner shall present evidence and arguments it wishes the department to consider in recommending values of land and improvements to the board.

(17) through (22) remain the same.

AUTH: 77-1-204, 77-2-308, 77-2-362, MCA

IMP: 77-2-328, 77-2-362, 77-2-363, 77-2-364, 77-2-366, MCA

REASON: The proposed amendment is necessary to correct an inaccurate reference to 77-2-363(6)(b). The correct reference is 77-2-363(7), MCA. Reference to ARM 24.207.402 is being removed as it was repealed in 2012. Updates were made to provide consistency with all references to "improvement owner," as defined in ARM 36.25.701(7).

36.25.706 TERMINATION OF LESSEE-INITIATED CABIN SITE OR HOME SITE SALE AFTER DEPOSIT AND PROCESSING COSTS PAID BY LESSEE

(1) If the current lessee of the cabin site or home site has initiated the sale, as authorized by 77-2-361 through 77-2-367, MCA, and submitted processing costs with the department, the lessee may, subject to (2), cancel the sale by sending written notice to the department by certified mail of the current lessee's intent to cancel the sale. ~~The lessee shall send written notice by certified mail to the department, postmarked no later than ten days before the date of the auction.~~

(2) To be valid, a notice of cancellation sent pursuant to (1) must be received by the department:

(a) at least 10 days before the date of the auction; and

(b) before any other person has registered for the auction by submitting a bid bond consistent with 77-2-363(2)(a), MCA, and executing a purchase agreement with the department. In the event that a sale cancellation request is received by the department on the same day that the department receives a bid bond and executed purchase agreement from another bidder, the cancellation is not valid.

~~(2)~~(3) If the lessee cancels the sale, the lessee shall pay all costs incurred by the department in preparing the sale, including but not limited to:

(a) any costs for required environmental review if not exempt under 75-1-201, 77-1-121, or 77-2-363~~(6)(b)~~(7), MCA;

(b) through (e) remain the same.

~~(3)~~(4) The processing costs and bid deposit, as required in ARM 36.25.705(13) and ~~36.25.708~~ 36.25.707(4) that are paid by the lessee must be applied toward costs incurred by the department for the canceled sale.

(4) remains the same but is renumbered (5).

AUTH: 77-1-204, 77-2-308, 77-2-328, MCA

IMP: 77-2-328, 77-2-363, MCA

REASON: The proposed amendment is necessary to add language to address the changes made in the 2023 Legislative Session in SB49. Specifically, the lessee may cancel the sale up to ten days prior to auction, unless another person has registered for the auction. In addition, updating the requirement for "giving notice" to be the date of "receiving" the written notice, rather than a "postmark" date will assist the department in processing sales and eliminating ambiguity caused by waiting for mail delivery, with potential delays in notice. Corrections are also requested for incorrect references to 77-2-363(6)(b), MCA and ARM 36.25.708(4). The correct references should be 77-2-363(7), MCA and ARM 36.25.707(4).

36.25.707 PROCEDURE FOR CONDUCTING CABIN SITE AND HOME SITE SALES (1) through (3) remain the same.

(4) A person wishing to bid upon a nominated cabin site or home site offered for sale at auction shall submit a bid deposit and execute a purchase agreement with the department. The bid deposit and purchase agreement must be ~~postmarked~~ received by the department no later than 20 days before the date of the auction.

(5) through (10) remain the same.

AUTH: 77-1-204, 77-2-308, 77-2-362, MCA

IMP: 77-2-328, 77-2-363, MCA

REASON: The proposed amendment is necessary for changing the deadline for a bid deposit and purchase agreement to be "received" by the department, rather than being "postmarked" no later than 20 days prior to the auction. This will assist the department in processing sales and will eliminate the ambiguity caused by waiting for mail delivery, with potential delays. In addition, the change more accurately reflects the requirements of 77-2-363(2)(a), MCA, which specifies that the person bidding to purchase state land shall deposit a bid bond 20 days prior to the day of the auction.

4. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted in writing to: Martin Balukas, Department of Natural Resources and Conservation, 1539 Eleventh Avenue, P.O. Box 201601, Helena, MT 59620-1601, or e-mail at [email protected], and must be received no later than 5:00 p.m. on December 6, 2023.

5. Martin Balukas, Department of Natural Resources and Conservation, has been designated to preside over and conduct this hearing.

6. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Written request may be mailed or delivered to the contact person in 2 above or may be made by completing a request form at any rules hearing held by the department.

7. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sosmt.gov/ARM/Register.

8. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by e-mail on September 26, 2023.

9. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rules will not significantly and directly impact small businesses.

/s/ Luke Casey /s/ Amanda Kaster

Luke Casey Amanda Kaster

Rule Reviewer Director

Natural Resources and Conservation

Certified to the Secretary of State October 24, 2023.