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Committee presses state lands on subleasing rules; asks LSO to draft clarifying legislation
Summary
The committee discussed statutory subleasing rules for state trust lands, received OSLI revenue and compliance numbers, and voted to ask Legislative Services Office to draft legislation clarifying how non-owned livestock and family entities are treated under 36-5-105.
Members of the Agriculture, State & Public Lands & Water Resources Committee spent substantial time on June 11 on state-trust land subleasing and non-owned-livestock rules. Stacia Berry, director of the Office of State Lands and Investments, walked the committee through the statutory language in 36-5-105(d) and the office's Chapter 4 rules; she also provided recent sublease and revenue figures.
Berry read the statute's core points: assignments, subleases or contracts require director approval, and approval "should not be arbitrarily or unreasonably withheld;" actions must be "in order to the greatest benefit of the state land trust beneficiaries;" and when a lessee allows non-owned livestock to graze, that use is not a sublease provided a 1-to-1 owned-to-nonowned ratio is not exceeded for more than two years in any 10-year period, the lessee documents non-owned livestock to the office and the lessee retains full management responsibility. OSLI's Chapter 4 rule adds a 60-day reporting requirement for non-owned livestock.
Berry gave recent compliance and revenue figures tied to the 2023 update of the provision: in 2023 the office approved 69 subleases that generated about $41,000 in revenue; in 2024 there were 263 approved subleases for about $243,000; and in 2025 to date the office had approved 259 subleases for about $217,000. She said only four lessees have reported under the non-owned-livestock provision to date.
Industry witnesses urged clarification. Jim McGagney of the Wyoming Stockgrowers Association and Brett Moline of the Wyoming Farm Bureau said the statute as implemented created confusion for family operations and for entities with related ownership structures. McGagney described the prior interpretation as a "nightmare" for operators trying to determine when 50% of gain must be paid to the state and urged either statutory or rule changes to reduce confusion over related-family entities and calculation of excess rental. Moline and others urged any change to be explicit and include a grandfathering approach for existing lessees.
The committee considered a Stockgrowers concept paper presented by McGagney that would restore a clearer distinction between true subleases and family or management arrangements. Among other proposals it suggested that family-linked entities holding common ownership above a suggested threshold (the concept paper used 80% as an example) should not be treated as a commercial sublease. Industry also floated the alternative of a modest surcharge on certain non-owned livestock arrangements instead of a full sublease requirement.
After discussion, Senator Pearson moved — and Senator Ide seconded — a motion asking the Legislative Services Office to draft legislation, with input from industry stakeholders and LSO, to clarify the statutory framework for subleasing and non-owned livestock on state trust lands. The committee approved the motion.
Ending — The committee directed LSO to produce draft language for review; the committee did not adopt final statutory language on June 11 and will consider drafts in future meetings.
