Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Trust Lands topic
No spam. Unsubscribe anytime.
DNRC official says improvement-settlement disputes are rare for grazing and agriculture leases
Summary
Kelly Motichka of DNRC told the Land Board that disputes over lessee improvements are uncommon across roughly 9,000 active leases on about 4.7 million acres; she outlined a three-option settlement approach, arbitration steps, and statutory timeframes.
Kelly Motichka, Ag and Grazing Bureau Chief for DNRC's Trust Lands Management Division, briefed the Land Board on the agency's improvement-settlement process for agriculture and grazing leases, saying disputes over improvements are rare and describing the options and timelines available when a lease changes hands.
Motichka told the board that the improvement-settlement process is defined in statute and administrative rule (as printed in the meeting handout) and cited the provisions listed in the handout. She said the agency manages close to 9,000 active leases on roughly 4,700,000 acres, including about 2,474 agriculture leases and 6,457 grazing leases. "We have renewed 6,104 State Trust Land tracts with 175 of them being competitively bid on, which is roughly 3% of the tracts that were renewed," she said, adding that 173 of those competitive tracts were retained by the lessee and two changed hands. Motichka said only one of those changes went through the arbitration process.
Motichka summarized the options when a lease changes hands during renewal: the parties can agree on the value of improvements, remove any movable improvements they agree upon, or initiate arbitration if they cannot reach agreement. She described arbitration as a process in which each party selects an arbitrator and those two select a third; if either party remains dissatisfied they may seek resolution in district court. "Most of the improvements are movable and owned by the lessee," Motichka said, and "99% of the lessees reach an agreement with the new lessees regarding settlement of improvements and do not go through this arbitration process." She also said water rights are not considered an improvement and that fences and water developments are the majority of contested items.
Board members asked for clarifications. One sought to know whether arbitration delays revenue to the state trust; Motichka replied that DNRC can issue a lease to the new lessee while an arbitration process proceeds, so there is no lapse in revenue and the arbitration is focused solely on valuation of the improvements. When asked about timing, Motichka said there is a 60-day timeframe from the beginning of the process for parties to resolve the matter (settlement or arbitration) and additional statutory timeframes for the arbitration stage, roughly another 60 days plus shorter statutory deadlines for specific steps.
Motichka concluded that improvement-settlement disputes are infrequent based on the agency's five-year data and said she would be available for follow-up questions.
(Quoted statutes and administrative rules were read from the DNRC handout as presented in the meeting: the presenter cited "MCA 70 seven-six, 302303 and 306" and "ARM 36 25 1 25" in the transcript.)
