SENATE BILL REPORT
SB 6062
As of January 18, 2024
Title: An act relating to the authority of the department of natural resources to lease trust assets for the benefit of trust beneficiaries and the state.
Brief Description: Concerning the authority of the department of natural resources to lease trust assets for the benefit of trust beneficiaries and the state.
Sponsors: Senators Torres and Van De Wege; by request of Department of Natural Resources.
Brief History:
Committee Activity: Agriculture, Water, Natural Resources & Parks: 1/18/24.
Brief Summary of Bill
  • Allows the Department of Natural Resources (DNR) to lease trust assets, deemed to be temporarily available for use on nonstate land.
  • Establishes that leases for trust assets may not to exceed 20 years.
  • Requires DNR to follow certain leasing provisions for leases of state lands when leasing trust assets.
SENATE COMMITTEE ON AGRICULTURE, WATER, NATURAL RESOURCES & PARKS
Staff: Karen Epps (786-7424)
Background:

The Department of Natural Resources (DNR) manages a number of different categories of land, each for a specific purpose and under different management requirements.  These include approximately 3 million acres of federally-granted lands and state forest lands, which DNR manages to support common schools, counties, and other public institutions.

 

DNR has the authority to lease state lands for various purposes, including commercial, industrial, residential, agricultural, and recreational uses, in order to obtain a fair-market rental return to the state or appropriate trust.  DNR also manages more than 600,000 acres of state forest lands which were acquired primarily through tax foreclosures in the 1920s and 1930s, and to a lesser extent through purchases by the state or gifts to the state. State forest lands are managed for the benefit of the counties in which the lands are located.
 
DNR generally may not lease state lands for longer than ten years, although longer leases are specifically authorized in multiple instances.  Lands leased for agricultural purposes may not exceed 25 years, except leases for tree fruit or grape production, which may be for up to 55 years.  Leases for commercial, industrial, or business purposes may extend to 99 years, but leases that extend terms beyond 55 years must be reported to the Office of Financial Management and the appropriate committees of the Legislature within 30 days of the date of the execution of the lease.  Share crop leases may not exceed ten years.
Summary of Bill:

DNR may lease trust assets, deemed to be temporarily available for use on nonstate lands, for commercial, industrial, residential, agricultural, and recreational purposes in order to obtain a market rental return and if the lease is in the best interest of the state or affected trust. Trust assets may be leased for a term not to exceed 20 years.
 
DNR must exercise general supervision and control over the lease of state trust assets. If DNR leases trust assets, the lease must contain the specific use or uses to which the asset is to be employed. During the lease of any trust asset, DNR may alter and amend the terms and conditions of the lease if, in the opinion of DNR, it is in the best interest of the state and in agreement with the lessee. 
Appropriation: None.
Fiscal Note: Requested on January 13, 2024.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.