Committee Hears Bill to Require Cash‑Per‑Acre Bids for DNRC Agricultural Leases

Representative Brandon Gregg introduced House Bill 80 to the Senate Agriculture, Livestock and Irrigation Committee, saying the measure would allow the Department of Natural Resources and Conservation (DNRC) to competitively bid agricultural leases on a cash‑per‑acre basis only. "House Bill 80 will provide the DNRC the ability to competitively bid agricultural leases on a cash lease only basis," Gregg said during the hearing.

Kelly Matishka, agricultural and grazing bureau chief for DNRC, told the committee the change is intended to simplify a bidding and billing system she described as confusing for staff and lessees. Matishka said DNRC manages about 9,000 active leases on roughly 4,700,000 acres, about 555,000 of which are classified as agricultural, and that trust revenues from those agreements generate between $15 million and $20 million annually. "This process becomes increasingly more confusing" with mixed bids, she said, and moved to a cash‑only bidding method would "allow for a simpler and less confusing bidding and billing process for lessees and staff." (Kelly Matishka, Ag & Grazing Bureau chief.)

Under current law Matishka explained, crop‑share leases generally use a minimum 25 percent crop share set in statute; a bid that exceeds 33.33 percent crop share must be backed by a cash‑per‑acre guarantee. DNRC staff called those "combo" bids harder to evaluate because a high crop share paired with a low cash guarantee can make it difficult to determine which offer gives the best value to trust beneficiaries. Matishka said DNRC requires annual production reports and supporting tickets on crop‑share leases, and that those administrative requirements would not be necessary for newly bid cash leases.

Farm and ranch organizations testified in favor. Nicole Rolfe of the Montana Farm Bureau Federation said the bill would modernize and simplify the process for producers; Ellie Brighton, representing the Montana Stock Growers Association and the Montana Association of State Grazing Districts, and Richie Melby (testifying on behalf of Secretary of State Christy Jacobson) also urged committee passage. An online witness, Boyd Heilig of the Montana Grain Growers Association, told the committee many members preferred cash leases and found them easier to manage.

Committee members asked detailed questions about how cash amounts are calculated, protections for producers facing drought or crop failure, deposit and enforcement procedures, and how improvements and water rights are handled. Matishka said cash leases are negotiated using multi‑year (generally five‑ to ten‑year) past production averages and that grazing (which is priced by animal‑unit months, or AUMs) is excluded from the bill. On disaster protection she said cash leases can help producers because they enable insurance coverage for a larger portion of production; a committee member added that federal disaster programs and FSA insurance often cover cash‑leased production differently than crop‑share arrangements.

On enforcement Matishka said DNRC requires a $20‑per‑acre deposit from bidders that is applied toward the winner's next payment, conducts field inspections, can add stipulations to leases, and may cancel leases in extreme cases of mismanagement. She also described an "improvement settlement" process to address fences or other lessee improvements if a new lessee takes over a parcel. Questions about changes in water availability were deferred to Ryan Weiss, deputy administrator for trust lands, who said DNRC would coordinate with water‑resources officials and the lessee to manage specific situations.

The sponsor closed by urging a "do pass" and the committee staffer said he will complete a conflict check before scheduling the bill for executive action. The committee took no vote at the hearing.

What happens next: committee staff will complete a conflict check and, if clear, the bill may be scheduled for executive action; no formal committee decision was recorded at this hearing.