36.25.121 CANCELLATION OF LEASE OR LICENSE
(1) The department may cancel any lease or license if the lessee or licensee commits fraud or misrepresents facts to the department which, if known, would have had an effect on the issuance of the lease or license, uses the land for any purpose not authorized in the lease or license, or violates the terms of the lease or license or these rules, fails to manage the land in a husbandlike manner consistent with conservation of the land resources and the perpetuation of its productivity, or for any other reason provided by law. The lessee or licensee of a canceled lease or license shall not be entitled to any refunds or exemptions from any payments due to the state.
(2) As provided in 77-6-211, MCA, the department shall immediately notify the lessee or licensee by certified mail of the cancellation and the reason for it, and the lease or license shall be deemed canceled 15 days after such notice is received by the lessee or licensee, unless the lessee or licensee files a notice of appeal with the department prior to the expiration of the 15-day period, in which case the lease or license remains in effect until the board decides the matter. Within 10 days after receipt of notice of appeal the department shall notify the lessee or licensee of the time and place of the hearing before the board. The time and place of the hearing may be changed by the board after 10 days notice to the lessee or licensee. The board shall conduct an open hearing under the rules set out in the Montana Administrative Procedure Act, 2-4-101 et seq., MCA. A hearings examiner may be appointed to conduct the hearing. The burden of proof to show why the lease or license should not be canceled shall be borne by the lessee or licensee. The board may reinstate the lease or license where it finds that the violation is not serious enough to warrant cancellation and restore all rights and privileges upon payment of a penalty up to 3 times the annual rental against the lessee or licensee. Payment of the penalty may be considered as a notice of appeal for the purpose of keeping the lease in effect until the board decides the matter. If the board does not reinstate the lease or license, the land shall be re-advertised for lease or license in accordance with ARM 36.25.115.