R850.  School and Institutional Trust Lands, Administration.
R850-80.  Sale of Trust Lands.
R850-80-100.  Authorities.
	This rule implements Sections 6, 8, 10, and 12 of the Utah Enabling Act, Articles X and XX of the Utah Constitution, and Subsections 53C-1-302(1)(a)(ii) and 53C-4-101(1) which authorize the director to prescribe the terms and conditions for the sale of trust land.

R850-80-150.  Planning.
	In addition to those other planning responsibilities described herein, the agency shall:
	1.  Submit proposals for the sale of trust lands to the Resource Development Coordinating Committee (RDCC) unless the proposal is exempt from such review;
	2.  Evaluate and respond to comments received through the RDCC process; and
	3.  Evaluate any comments received through the notice and advertising processes conducted pursuant to R850-80-600 and R850-80-615.

R850-80-200.  Sale of Trust Lands.
	The agency may sell trust land if the agency determines that the sale of the land would be in the best interest of the trust beneficiaries and provided that the land is sold for no less than fair market value.

R850-80-250.  Evaluation of Temporary Easements, Rights-of-Entry and Existing Rights of Record.
	Prior to the sale of any trust land, the agency shall undertake the notification process set forth in R850-40-250(2) to evaluate whether any temporary easement or right-of-entry exists on the subject property.  The agency shall also evaluate the presence and impact of other valid existing rights of record on the subject property prior to sale, and take any appropriate steps to mitigate adverse impacts resulting from such rights.

R850-80-300.  Sales Initiation Process.
	The sales process shall be initiated by an agency determination to evaluate the appropriateness of the sale of a particular parcel of trust land.  The evaluation shall be undertaken in accordance with R850-80-500.  In determining the appropriateness of a parcel of trust land for sale, the agency may consider nominations by interested parties.

R850-80-400.  Sales Deposits.
	If the agency evaluates a parcel of trust land for sale due to a nomination by an interested party, the person making such nomination may be required to deposit funds in an amount determined by the agency to be used to offset costs incurred in preparing the parcel for sale.  In the event the person making the deposit is the successful purchaser of such land, the deposit shall be a credit against any fees charged by the agency to the purchaser for preparing the land for sale.  In the event the person making the deposit is not the successful purchaser of such land or the land is not offered for sale, the deposit shall be refunded.

R850-80-500.  Sale Determination Procedures.
	1.  Preliminary Analysis
	(a)  The director shall not offer trust land for sale when:
	i)  the subject property is appreciating in value at a rate in excess of the anticipated return from the investment of the principle;
	ii)  there is no evidence of competitive market interest, unless the purpose of the sale is to test the market in a particular area;
	iii)  the sale would create obstacles to future mineral development on trust lands; or
	iv)  in the sole discretion of the director, it has been determined that the sale would foreclose future development or management options which would likely result in greater long term economic benefit.
	2.  Market Analysis
	(a)  The agency shall conduct a market analysis of a proposed sale of trust land which shall include an estimate of value.  If the estimate of value is determined by an appraisal, the cost of the appraisal shall be borne by the successful purchaser.
	(b)  The market analysis may also include the evaluation of:
	i)  real estate trends;
	ii)  market demand;
	iii)  opportunity costs including potential for appreciation; and
	iv)  associated management costs of retention.
	3.  Sale Determination
	(a)  The director may take into account any factor and circumstances deemed relevant, as well as any applicable policy adopted by the board, when making a determination as to whether to sell trust land.  Prior to the sale of trust land, the agency shall take prudent and cost-effective actions to increase the value of the land.
	(b)  If a sale is determined to be appropriate, the agency shall determine the minimum acceptable selling price of the subject property, which minimum acceptable selling price shall not be less than fair market value.  This determination may include information from any of the following:
	i)  the appraisal;
	ii)  the data gathered pursuant to R850-80-500(2); and
	iii)  any other information which the agency considers relevant.
	(c)  The minimum acceptable selling price shall be provided protected records status until the sale is consummated, unless otherwise ordered by the director.

R850-80-550.  Methods of Sale.
	The agency may sell land or assets using one of the methods described below:
	1.  A public sale pursuant to R850-80-610, or
	2.  A negotiated sale pursuant to R850-80-620.

R850-80-600.  Public Sale Notice and Advertising.
	1.  At least 30 days prior to a public sale, notice shall be sent by certified mail to:
	(a)  the appropriate county authority in which the subject property is located with a request to have the notice posted in the governmental administrative building or courthouse and other appropriate locations;
	(b)  lessees/permittees of record on the subject property; and
	(c)  adjoining landowners as shown on county records.
	2.  The notice of sale shall include:
	(a)  the date, time, and location where the sale will be held;
	(b)  a general description of the subject property including township, range, and section and a brief description of the location of the subject property; and
	(c)  contact information of the agency office where interested parties can obtain more information.
	3.  The agency may advertise public sales using any other methods the director has determined may increase the potential for additional competition at the sale.

R850-80-610.  Public Sale Auctions.
	Public sale auctions shall be conducted as follows:
	1.  Sealed bids shall be accepted until the day prior to the auction by the agency, or on the day of the auction by the officer conducting the auction.
	2.  A sealed bid shall contain funds in an amount equal to at least 10% of the total bid amount offered to purchase the subject property and may be required to consist of certified funds.  Bids and bid deposits shall be a specified dollar amount.  The agency reserves the right to reject any bid however submitted.
	3.  Purchasers who have defaulted on certificates of sale may be required to make larger down-payments or submit sealed bids in the form of certified funds even if such a requirement is not contained in the notice of sale.
	4.  The persons submitting the three highest bids shall be allowed to enter into oral bidding, which shall begin at the amount of the highest sealed bid, subject to those terms and conditions of R850-80-610(5).  Those persons who submit a sealed bid that is within 20% of the third highest sealed bid shall also be allowed to participate in oral bidding, subject to those terms and conditions of R850-80-610(5).
	5.  In the event the minimum selling price of a property is disclosed prior to the auction, persons who bid less than the disclosed minimum selling price shall be disqualified and shall not be eligible for oral bidding, even if such bids would otherwise meet those requirements in R850-80-610(4) or (6).
	6.  Only current grazing permittees, materials permittees and special use lessees on the subject property who submit sealed bids shall automatically qualify to enter into oral bidding, subject to those terms and conditions of R850-80-610(5).
	7.  All bids, whether sealed or oral, constitute a valid offer to purchase.  An attempt to withdraw a sealed bid after the first sealed bid has been read, or an attempt to withdraw or amend an oral bid may result in the forfeiture of the bid deposit and any other remedy afforded the agency at law or equity.
	8.  If, after the first round of oral bidding, no bid is submitted which equals or exceeds the agency's minimum selling price, then the sale shall not be made except as provided below.
	(a)  At the discretion of the officer conducting the sale, qualified bidders may enter into additional rounds of oral bidding, starting at the high bid reached in the previous round.
	(b)  To facilitate the sale of the parcel, the officer conducting the sale may divulge the minimum selling price.
	9.  At the conclusion of the auction, the agency shall collect from the successful bidder:
	(a)  a down payment in the amount required by the sale notice;
	(b)  interest on the unpaid balance from the date of sale to the first day of the following month; and
	(c)  reimbursement of costs incurred in preparing the parcel for sale, which may include costs incurred for advertising, appraisal, cultural resource investigations, environmental assessments, and a sale processing charge.
	10.  The first payment shall be due one year from the first day of the month following the sale; subsequent payments shall be due on the first day of the same month each year thereafter until the balance is paid in full.
	11.  Amounts paid in excess of the current obligations shall be applied to principal.  The unpaid balance, plus interest to date, may be paid in full at any time without penalty.
	12.  If the successful bidder defaults on the down payment or otherwise fails to meet the requirements of R850-80-610(9), the property may, upon approval by the director, be offered for sale to the person whose bid was second highest at the auction provided that the terms of the sale shall meet or exceed the minimum acceptable selling price established for the subject property.  The second highest bidder shall have 30 days from the date of the agency's offer to submit the amounts required under R850-80-610(9).
	13.  The interest rate which shall be charged against any unpaid balance at the conclusion of the auction shall be the prime rate, as determined by the agency on the date the public sale is approved by the director, plus 2 1/2% (Prime Rate + 2 1/2%).  Interest shall be calculated on a 365-day basis.  Every year thereafter, the interest rate which shall be charged against the unpaid balance shall be the prime rate, as determined by the agency on the date of billing, plus 2 1/2% (Prime Rate + 2 1/2%).
	14.  Third parties owning authorized improvements on the parcel at the time of the sale shall be allowed 90 days from the date of the sale to remove the improvements.  This provision is not applicable when such improvements are permitted under a valid existing right of record when such right survives the sale of the parcel.

R850-80-615.  Negotiated Sale Notice and Advertising.
	1.  Prior to an agency decision to initiate a negotiated sale, notice of such shall be sent by certified mail to:
	(a)  the appropriate county authority in which the subject property is located with a request to have the notice posted in the governmental administrative building or courthouse and other appropriate locations;
	(b)  lessees/permittees of record on the subject property; and
	(c)  adjoining landowners as shown on county records.
	2.  The notice of sale shall include:
	(a)  a general description of the subject property including township, range, and section and a brief description of the location of the subject property; and
	(b)  contact information of the agency office where interested parties can obtain more information.
	3.  The agency may advertise negotiated sales using any other methods the director has determined may increase the potential for additional interest in the subject property.

R850-80-620.  Negotiated Sale Procedures.
	1.  Negotiated sales shall be advertised in the manner set forth in R850-80-615.  In the event a competing offer(s) is received, the agency shall evaluate the offers and determine what action is in the best interest of the beneficiaries.
	2.  The board and affected beneficiary institution(s) shall be provided notice 30 days prior to the sale describing the terms, reasons, and other pertinent facts of the proposed negotiated sale.
	3.  Board approval of a negotiated sale is required if:
	(a)  the value of the subject property exceeds $250,000.00;
	(b)  the subject property exceeds 320 acres in size; or
	(c)  additional interested person(s) indicate to the agency an interest in purchasing the subject property.
	4.  A purchaser of trust land sold at a negotiated sale may be required to reimburse the agency for costs incurred in preparing the parcel for sale, which may include costs for advertising, appraisal, cultural resource investigations, environmental assessments, and a sale processing charge.

R850-80-700.  Certificates of Sale.
	1.  Following a public sale or upon concurrence of the parties in a negotiated sale, the agency shall prepare and deliver a certificate of sale to the purchaser.  This certificate shall contain a legal description of the subject property, and shall include:
	(a)  information regarding the amount paid;
	(b)  the amount due;
	(c)  the time when the principal and interest shall become due;
	(d)  the beneficiary of the land;
	(e)  provisions for remedies the agency may elect in the event of a default, as such remedies are set forth in R850-80-700(8); and
	(f)  any other terms, covenants, deed restrictions, or conditions which the agency considers appropriate.
	2.  Certificates of sale must be executed by the purchaser and returned to the agency within 30 days from the date of the purchaser's receipt of the certificate.  If the certificate is not received by the agency within the 30 day period, certified notice shall be sent to the purchaser giving notice that after 30 days the sale may be canceled with all monies received, including the down-payment, forfeited to the agency.  Notification by certified mail, return receipt requested, of this forfeiture provision shall accompany the transmittal of the certificate to the purchaser.
	3.  A certificate of sale shall be signed by the director after it has been signed by the purchaser and returned to the agency.  The certificate shall not be final and no rights shall vest in the purchaser until the certificate is executed by the director.  The agency reserves the right to cancel a sale of trust land for any reason prior to execution of the certificate by the director.
	4.  A certificate of sale may be assigned to any person qualified to purchase trust lands, provided that the assignment is approved by the director, and that no assignment is effective until approval is given by the director in writing.
	5.  An assignment of a certificate of sale shall be consistent with these rules, executed by the assignee and assignor and acknowledged, and shall clearly set forth the certificate of sale number, the land involved, and the name and address of the assignee.
	6.  Assignment of a certificate of sale does not relieve the assignor from any obligations under the original certificate of sale.
	7.  Upon payment in full and surrender of the original certificate of sale for any tract of land sold, or payment in full of any amounts required under R850-80-750(3) for the partial release of property, the agency shall issue a patent to the appropriate person.
	8.  In the event of a purchaser's default under the certificate of sale, the agency's remedies shall include, without limitation, acceleration of the debt, forfeiture, any remedy which the agency may pursue under the certificate of sale, suit for judgment, foreclosure as provided for under Section 57-1-19 et seq. for trust deeds, and any other remedies afforded at law or equity.

R850-80-750.  Partial Releases.
	Partial release of property sold under a certificate of sale may be allowed at the discretion of the director.  The following conditions shall be met:
	1.  Access to the remainder of the land must be preserved without restriction;
	2.  All utilities and infrastructure, including water, sewer and storm drains, electric power, and natural gas, installed on land covered by the certificate shall have the capacity and capability to service all trust land originally included in the certificate;
	3.  Unless the director makes a written finding that waiver of this condition would be in the best interests of the trust beneficiaries, payment shall be made to the agency in an amount equal to 125% of the original price per acre, multiplied by the number of acres to be released, plus interest on that amount to the date payment is received.  The payment shall be in the form of certified funds, and shall be applied to principal. This payment shall not affect the amount or due dates of annual payments;
	4.  Unless the director makes a written finding that waiver of this condition would be in the best interests of the beneficiaries, the 125% payment required by paragraph 3 above shall not include the 10% down payment or any annual installment paid under the certificate of sale;
	5.  The buyer shall provide a survey and legal description prepared and sealed by a Utah Registered Land Surveyor of the parcel to be released and the remaining land under the certificate; and
	6.  The value of the remaining land shall not be reduced to an amount less than the remaining principal balance of the certificate.

KEY:  administrative procedures, sales
Date of Enactment or Last Substantive Amendment:  October 9, 2007
Notice of Continuation:  June 27, 2017
Authorizing, and Implemented or Interpreted Law:  53C-1-302(1)(a)(ii); 53C-2-201(1)(a); 53C-4-101(1); 53C-4-102; 53C-4-202(6); 63G-2-305; 72-5-203(1)(a)(i); 72-5-203(2)(a)