37-290. Cancellation of lease on
reclassification of lands; preferred right to lease reclassified
land; refund of advance rental payments
A. Upon reclassification of state lands, whether upon application for
reclassification or upon initiation by the commissioner, notice of the decision shall be
served upon all interested parties of record in the department. If no appeal from the
reclassification is taken as provided for by law, or if the decision of the commissioner
is upheld on appeal, any lease upon the land reclassified shall be automatically
cancelled on the issuance of a new lease or at the time of auction, whichever
occurs first.
B. An applicant for renewal of a lease shall have a preferred right to lease the
reclassified land at the reappraised rental thereof for a term not longer than ten years
as determined by the department. The preferred right to lease does not extend to a
lessee who has not substantially complied with the terms of the lease or who has not
placed the land to the use prescribed in the lease during the term of the lease or within
the time prescribed in the lease, except when that action was excused for good cause by
written authorization by the department.
C. Upon cancellation of the lease of reclassified lands, if the land as
reclassified is leased to a person other than the existing lessee or applicant for a
renewal lease, the unused pro rata of an advance rental payment made by the existing
lessee shall be refunded to such lessee, and the lessee shall be protected in
improvements on the land owned by the lessee in the same manner as provided in section
37-322.01.
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