With a possible lawsuit looming, the sponsor of a bill that restructures Montana’s cabin site leasing system says he believes his legislation is on firm legal ground.
During the last session, the state Legislature passed Senate Bill 409 with broad bipartisan support. Republican Sen. Bruce Tutvedt of Kalispell said his bill establishes the framework for a market-based rate system for the state’s leased cabin sites. Tutvedt said the current system in which the state sets rates is driving lessees away because prices are too high.
The Land Board and Department of Natural Resources and Conservation have made efforts to raise lease rates by about 40 percent, a proposal that caused an outcry from leaseholders.
Earlier this month the Montana University System sent a letter to the state Land Board indicating it may file a lawsuit over Tutvedt’s legislation, arguing that the bill unconstitutionally sets the minimum bids too low. The university system receives money from the leases.
Gov. Brian Schweitzer, according to Associated Press, has also expressed concern over the legislation and said he let the bill become law without his signature only because it had passed with a veto-proof majority. Schweitzer said the law equates to a “giveaway” to leaseholders. The AP reports that the new lease system could cost the state about $5 million in lost revenues over three years.
“Thank you to the Legislature for this problem,” Schweitzer said.
Tutvedt argues that the state has an obligation to obtain “full market value” for school trust lands and the constitution “clearly” allows for the Legislature to determine the method by which market value is found. State law doesn’t allow for collecting more than full market value, he said.
“I find it kind of ironic that they don’t think the market is the best way to find market value,” he said last week.
There are about 800 cabin and home lease sites in Montana, administered by the DNRC. Tutvedt said the overall vacancy rate is roughly 10 percent and, in a guest opinion column, he wrote that “many more abandonments are coming unless the lease rates can reflect the true market value.”
Tutvedt’s bill establishes an auction system, which he said is a way to determine fair market value. Likening leaseholders to “customers” of the state, Tutvedt said leaseholders “don’t want special treatment – just fair market value.”
“If you treat your customers in bad faith they leave and they never come back,” he said.