Read first time 03/27/2007.   Referred to Committee on Capital Budget.

     AN ACT Relating to leasing state lands and development rights on state lands to public agencies; amending RCW 79.13.010, 79.13.060, and 79.13.110; creating a new section; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 79.13.010 and 2003 c 334 s 366 are each amended to read as follows:
     (1) Subject to other provisions of this chapter and subject to rules adopted by the board, the department may lease state lands for purposes it deems advisable, including, but not limited to, commercial, industrial, residential, agricultural, and recreational purposes in order to obtain a fair market rental return to the state or the appropriate constitutional or statutory trust, and if the lease is in the best interest of the state or affected trust.
     (2) Notwithstanding any provision in this chapter to the contrary, in leases for residential purposes, the board may waive or modify any conditions of the lease if the waiver or modification is necessary to enable any federal agency or lending institution authorized to do business in this state or elsewhere in the United States to participate in any loan secured by a security interest in a leasehold interest.
     (3) Any land granted to the state by the United States may be leased for any lawful purpose in such minimum acreage as may be fixed by the department.
     (4) The department shall exercise general supervision and control over the lease of state lands for any lawful purpose.
     (5) State lands leased or for which permits are issued or contracts are entered into for the prospecting and extraction of valuable materials, coal, oil, gas, or other hydrocarbons are subject to the provisions of chapter 79.14 RCW.
     (6) The department may also lease or lease development rights on state lands held for the benefit of the common schools to public agencies, as defined in RCW 79.17.200.

Sec. 2   RCW 79.13.060 and 2003 c 334 s 323 are each amended to read as follows:
     (1) State lands may be leased not to exceed ten years with the following exceptions:
     (a) The lands may be leased for agricultural purposes not to exceed twenty-five years, except:
     (i) Leases that authorize tree fruit or grape production may be for up to fifty-five years;
     (ii) Share crop leases may not exceed ten years;
     (b) The lands may be leased for commercial, industrial, business, or recreational purposes not to exceed fifty-five years;
     (c) The lands may be leased for public school, college, or university purposes not to exceed seventy-five years; ((and))
     (d) The lands may be leased for residential purposes not to exceed ninety-nine years; and
     (e) The lands and development rights on state lands held for the benefit of the common schools may be leased to public agencies, as defined in RCW 79.17.200, not to exceed ninety-nine years. The leases may include provisions for renewal of lease terms.
     (2) No lessee of state lands may remain in possession of the land after the termination or expiration of the lease without the written consent of the department.
     (a) The department may authorize a lease extension for a specific period beyond the term of the lease for cropping improvements for the purpose of crop rotation. These improvements shall be deemed authorized improvements under RCW 79.13.030.
     (b) Upon expiration of the lease term, the department may allow the lessee to continue to hold the land for a period not exceeding one year upon such rent, terms, and conditions as the department may prescribe, if the leased land is not otherwise utilized.
     (c) Upon expiration of the one-year lease extension, the department may issue a temporary permit to the lessee upon terms and conditions it prescribes if the department has not yet determined the disposition of the land for other purposes.
     (d) The temporary permit shall not extend beyond a five-year period.
     (3) If during the term of the lease of any state lands for agricultural, grazing, commercial, residential, business, or recreational purposes, in the opinion of the department it is in the best interest of the state so to do, the department may, on the application of the lessee and in agreement with the lessee, alter and amend the terms and conditions of the lease. The sum total of the original lease term and any extension thereof shall not exceed the limits provided in this section.

Sec. 3   RCW 79.13.110 and 2003 c 334 s 368 are each amended to read as follows:
     (1) The department may authorize the use of state land by lease at state auction for initial leases or by negotiation for existing leases.
     (2) Leases that authorize commercial, industrial, or residential uses may be entered into by public auction or negotiations at the option of the department. Negotiations are subject to rules approved by the board.
     (3) Leases to public agencies, as defined in RCW 79.17.200, may be entered into by negotiations. Property subject to lease agreements under this section must be appraised at fair market value. The leases may allow for a lump sum payment for the entire term of the lease at the beginning of the lease. The department shall calculate lump sum payments using professional appraisal standards. Renewal terms for the leases must include provisions for calculating appropriate payments upon renewal.

NEW SECTION.  Sec. 4   This act does not affect any existing right acquired or liability or obligation incurred under the sections amended or under any rule or order adopted under those sections, nor does it affect any proceeding instituted under those sections.

NEW SECTION.  Sec. 5   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

     *NEW SECTION.  Sec. 6   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.
     *Sec. 6 was vetoed. See message at end of chapter.