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36.25.1003    CABINSITE MINIMUM RENTAL

(1) Effective January 1, 2010, and for those cabinsite leases due for the lease fee adjustment process in calendar year 2008 and 2009, and except as provided in (1)(a) and (1)(b), the minimum rental for a cabinsite lease is the greater of five percent of the 2009 appraised market value of the land, excluding improvements, as determined by the Montana Department of Revenue (DOR) pursuant to 77-1-208, MCA, or $250, or a competitive bid amount as described in ARM 36.25.1009. As required by 77-1-106, MCA, this rental rate reflects the expenses commonly incurred by lessees in leasing state trust land. A cabinsite lessee may:

(a) choose to pay rental on a cabinsite lease according to the existing terms and conditions within the current lease contract with the department; or

(b) sign and execute a 2010 supplemental lease agreement (SLA), which will direct that the minimum rental shall be calculated as follows:

(i) an amount equal to the 2003 appraised parcel value determined by the DOR, increased at an annual rate of 6.53 percent, compounded annually for six years to obtain the adjusted 2009 appraised value. [Example: 2003 appraised value multiplied by (1.0653)6 equals adjusted 2009 appraised value];

(ii) the adjusted 2009 appraised value shall be compared to the 2009 appraised parcel value determined by the DOR;

(iii) the lower of either an amount equal to five percent of the adjusted 2009 appraised value or five percent of the 2009 appraised parcel value shall be the base rent applicable to the lease in the year 2010;

(iv) the annual rental due for years 2011 and thereafter shall be calculated by applying the LFI to the previous year's lease fee. Any lease renewed, reviewed, or subject to lease fee adjustment, shall pay an annual rental equal to that calculated under (b)(i) through (iv), above. In year 2010, the LFI will not be used. [Example: 2010 base rent multiplied by (1 + LFI) equals 2011 rent]; and

(v) lessees may opt to sign an SLA at any time before lease renewal.

(2) Effective for the 2025 cabinsite billing, the department will have a lease fee adjustment and review the 2024 annual cabinsite rental for each lease individually, as calculated under the provisions of (1)(b). The department will compare that cabinsite rental to an amount equal to five percent of the most recent appraised parcel value for the cabinsite lease as determined by the DOR. The difference between these two rental amounts shall be compared and described as a percentage of how much five percent of the appraised parcel value is above or below the 2024 rental as billed.

(a) If the 2024 rental, as billed, is not more than 15 percent above or below five percent of the most recent appraised parcel, then the 2025 rental will be the same as the 2024 rental.

(b) If the 2024 rental, as billed, is more than 15 percent above or below five percent of the most recent appraised parcel, then the 2024 rental will be increased or decreased by that percentage amount so it becomes identical to five percent of the appraised parcel value.

(c) The lease fee adjustment between 2024 and 2025 will not exceed a 50 percent increase or decrease.

(d) No additional LFI will be applied in determining the lease fee adjustment from 2024 to 2025.

(3) For leases that will complete their current contract rental calculation and have a lease fee adjustment, particularly those cabinsite leases due to start the lease fee adjustment process in calendar year 2011, 2012, and 2013 and beyond, the rental will be calculated per (1)(a) and (1)(b).

(4) The lease fee adjustment will occur every 15 years after the 2024 review.

(5) In the 15-year periods between lease fee adjustments, rentals will be calculated per section (1)(b).

(6) New and renewed leases will have rents calculated in accordance with (1)(b), or at the discretion of the director.

(7) Cabinsite lessees shall pay a lease rental that is the higher of the rental amounts as calculated by this rule, or the bid amount, or a minimum annual rental of $250. The lessee shall pay that higher amount until such time as the rental, as calculated by this rule, exceeds the bid amount or $250.

History: 77-1-202, 77-1-209, MCA; IMP, 77-1-208, MCA; NEW, 2010 MAR p. 1293, Eff. 5/28/10.

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