(1) A lessee or licensee desiring to sublease may apply on the standard application form prescribed by the department. A sublease in order to be legal must be approved by the department. A sublease will only be approved if all rentals or other payments or reports due have been submitted, and if the terms of the lease or license have not been violated. If a sublease is made on terms less advantageous to the sublessee than terms given by the state or without filing a copy of the sublease and receiving the department's approval, the director shall cancel the lease or license subject to the appeal procedures provided in ARM 36.25.121.
(2) The sublessee may only compensate the lessee based upon a $/A.U.M. rate for grazing lands, or a crop share, or cash basis on agricultural land depending upon the terms of the state lease.In other words, the lessee may only be compensated upon the same unit of measurement as the lessee's rental to the state is based. Such rate may not exceed the rate charged by the state for such lease.Failure to comply with this provision may be grounds for cancellation of the lease pursuant to ARM 36.25.121.
(3) The subleasing of state land may result in loss of preference right to meet the high bid offered for the lease or license at renewal, as provided in ARM 36.25.117 and 77-6-208 and 77-6-212 , MCA. In addition, pursuant to the same rules and statutes, subleasing may cause the loss of the lease.
(4) A lessee or licensee of state land shall not sublease such land as part of the sale of his own fee lands or the sale of any improvements, crops, or leasehold interest.To transfer such lease or license as part of the sale of lands, improvements, crops, or leasehold interest, the lessee or licensee must assign the lease or license as provided in ARM 36.25.118.Failure to comply with the terms of this rule shall be grounds for cancellation of the lease or license, subject to appeal procedures in ARM 36.25.121.
(5) The lessee or licensee is responsible for the actions of the sublessee. Any action committed by the sublessee which if committed by the lessee or licensee would result in cancellation of the lease or any other penalty will be deemed to have been committed by the lessee or licensee.
(6) Custom farming shall not be considered a subleasing situation for the purposes of these rules. Management of the lease or license must be exercised at all times by the lessee or licensee. Failure to provide such management in the absence of an approved sublease may be sufficient grounds for cancellation of the lease or license and/or loss of the preference right at the time of renewal. The state shall not be subject to any reduction in rentals due to custom farming methods. Lessees engaged in custom farming shall file a copy of the custom farming agreement with the department. Such agreement shall set forth the names of the parties involved, the cost of services rendered, the duration of the agreement, and the state leases or licenses involved. Under no circumstances may the cost of services be based upon a percentage of the crop grown on state lands.
(7) If livestock are present on state land, there will be a presumption that the livestock either belong to the lessee or licensee, or that such livestock were placed on the state land with the lessee's or licensee's permission.