37-284. Conflicting short-term lease
applications; preference rights
A. A conflicting application for an existing lease for a term of not more than ten
years shall be filed at least two hundred seventy days but not more than one year before
the expiration date on the lease. The conflicting application must be accompanied by a
list of nonremovable improvements on the leased lands on file with the department,
including fences. The conflicting applicant must post a surety bond or other form of
security in the amount of two thousand five hundred dollars or twenty per cent of the
rental payments over the term of the current lease, whichever is greater. The department
shall calculate the amount of the security within thirty days after receiving the
conflicting application, and the conflicting applicant must post the security within
thirty days after the department determines the amount. If the conflicting applicant is
unsuccessful or withdraws the application, the department shall return the security to
the applicant. If the conflicting applicant is successful, the security shall be applied
against the value of the nonremovable improvements.
B. When the department receives a conflicting application, the department shall
give the existing lessee thirty days' notice to file an application for renewal pursuant
to this section.
C. If two or more applicants apply to lease the same land for a term of not more
than ten years, the department shall approve the application of the one who, after
investigation or hearing, appears to have the best right and equity to the lease. The
order of filing shall not be a controlling factor in deciding who is entitled to the
lease. If it appears that none of the applicants has any right or equities superior to
those of another that would outweigh an offer of additional rent, and if it is in the
best interest of the trust, the department, at a stated time and after due notice to all
applicants, may receive bids submitted in accordance with rules of the department. If one
of the competing applicants is the existing lessee who has a preferred right of renewal
pursuant to section 37-291, the department shall extend the preferred right of renewal to
the existing lessee if the existing lessee offers a bid matching the highest bid. The
department shall approve the application of the bidder who in all respects is eligible to
receive a lease upon the land and will pay the highest annual rental, or the department
may reject all bids.
D. Before the department issues a lease to the successful bidder, the successful
bidder shall pay one full year of rent and, unless all parties agree to an extended
payment schedule, the appraised value of any nonremovable improvements pursuant to
section 37-322.01. If the successful bidder does not pay one full year of rent or the
value of any nonremovable improvements within thirty days after the department requests
payment, the department may offer the lease to the next best bidder. A lease that is
issued pursuant to this section shall require the lessee to pay annual rent that is equal
to the amount of annual rent bid, unless a reappraisal or rental adjustment requires a
higher amount.
E. Any person residing upon contiguous land for which the person has an allowed
United States homestead entry or for which the person has received a patent from the
United States upon a homestead entry, upon application, shall have a preferred right to
lease the amount of contiguous state land necessary for personal use.
F. Any person lawfully occupying any lands, the title to which is acquired by the
state by operation of law, shall have a preference right to lease the occupied land
provided application to do so is made within thirty days from and after written notice by
the department to such occupant of the acquisition of title.
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