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DNRC proposes joint‑venture development on trust lands to unlock housing; members ask about auctions and trust proceeds
Summary
House Bill 379 would let the Department of Natural Resources and Conservation lease trust land to developers under commercial joint ventures, enabling subdivision and later sale of lots to support housing while preserving land‑bank replacement requirements; the DNRC says sales proceeds would be reinvested to benefit trust beneficiaries, and members pressed constitutional and public‑value questions.
Representative Larry Brewster opened HB 379 on behalf of the Department of Natural Resources and Conservation (DNRC), describing a proposal to merge the commercial leasing and land‑banking programs to facilitate housing development on parcels in the path of growth. "This bill does exactly what it says in the title," Brewster said, framing the proposal as an additional tool to generate revenue for trust beneficiaries while supporting local housing needs.
Deidra Kloberdans, Real Estate Management Bureau Chief at DNRC, told the committee the department manages more than 5.2 million surface acres for multiple trust beneficiaries and that the proposed commercial joint venture program would allow DNRC to lease trust land to a developer for due diligence and infrastructure work before selling lots through the land‑banking sale process. Kloberdans said most statutory and rule authority already exists; the bill would mostly modernize procedures (for example, replacing a county‑courthouse auction requirement with a public sale process more like private sector practice).
Supporters including Gale Heide, development director for Habitat for Humanity of Gallatin Valley, said the change could make otherwise infeasible affordable housing projects workable by aligning lease and sale mechanics and allowing developers to share risk. Heide emphasized local housing shortfalls, citing county AMI and housing demand figures.
Committee members pressed several topics: how removing the courthouse auction requirement squares with the constitutional obligation to maximize trust value; whether sale proceeds would remain dedicated to trust beneficiaries, particularly common schools; and how the Land Board would retain oversight. Kloberdans said proposals would be appraised, reviewed through a public RFP process, and require Land Board approvals at multiple stages; sale proceeds would go into the land bank and be reinvested to acquire replacement lands designated to the same trust beneficiaries.
Members also asked about safeguards for public participation and minimum sale prices; DNRC responded that public RFPs, appraisal processes, and land‑board approvals would preserve competitive and public processes while modernizing the venue for sales to increase participation.
Sponsor Brewster closed by saying the bill offers a tool to unlock developable parcels surrounded by communities and urged a do pass recommendation.
Next steps: The hearing closed and the DNRC offered to provide written materials and responses to committee follow‑ups.
