Tenants of underperforming state land leases could trigger a public auction to buy the land

The state land commissioner would prioritize selling underperforming commercial state land when the tenant says it is willing and ready to buy, and would sell it at public auction to the highest and best bidder. Underperforming commercial state land is leased commercial land that meets at least one condition, such as being too small to develop alone, landlocked, lacking infrastructure, paying rent below an acceptable share of appraised value, rising in value faster than rent, or having improvements that would cut the sale value to the trust. A person who holds the lease, or whose lease ended less than one year before applying, may apply. An applicant may file one application for many leased parcels or a separate application for each parcel. Within 18 months after receiving an application, the commissioner must appraise, advertise, and hold the auction.

Each auction would be open to eligible bidders from all commercial land uses, and the commissioner could not tilt it toward one use. This applies to auctions the commissioner holds under the new section and to the tenants who trigger them. If the lease expires or the tenant asks to renew during the 18 months, the commissioner still goes ahead with the auction unless the applicant withdraws the application. Only a person who holds, or in the previous 18 months held, the lease on the land can trigger an auction.

The state land department would give ample notice to a tenant of an underperforming commercial lease before ending the lease. This applies to the state land department and to tenants of underperforming commercial leases. The notice must come before the lease is terminated.