# Title 85 — University and School Lands, Board of

## Article 85-04 — Surface Land Management

## Chapter 85-04-06 — Land Exchange

### § 85-04-06-01. Approval of land exchange.

The board may approve an exchange of trust lands which it determines is in the best interests of
the trusts and complies with current law. Under North Dakota Century Code section 15-06-01, any land
received under an exchange of original grant land maintains its status as "original grant lands".
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: N.D. Constitution article IX, § 6; NDCC 15-06-01, 15-06-19.1
### § 85-04-06-02. Criteria for land exchange.

The department shall consider the criteria listed below numbered one through six in any land
exchange. Land exchanges are not required to satisfy all six criteria outlined below.
1. Equal or greater value.
a. In connection with any exchange the department may use information, provided by the
applicant or the department’s own knowledge, regarding lands and resources to estimate
value for purposes of a preliminary evaluation, including completion of an environmental
assessment. The commissioner shall procure appraisals, completed by a certified
appraiser, to determine the value of the trust lands and the proposed exchange land. The
same appraiser shall conduct appraisals of the trust lands to be exchanged and the
proposed exchange land. In the event the commissioner is not satisfied with the
appraisals, the commissioner may require additional appraisals by alternative certified
appraisers.
b. The department shall advise the appraiser regarding the scope of work to ensure the
value of the trust lands to be exchanged is determined by the highest and best use of the
land, not simply the present use. For example, if an exchange is proposed in which the
trust lands to be exchanged are currently leased for grassland but the land is in the path
of residential, commercial, or industrial development, the trust lands to be exchanged
must be appraised for the highest and best use for residential, commercial, or industrial
development rather than its current use as grassland.
c. The department shall consider features not reflected in the market price which are
difficult to assign a monetary value, including location, proximity to public lands,
recreational opportunities, scenery, other amenities, and results of cultural resources
inventories in evaluating the relative value of trust lands to be exchanged.
2. Equal or greater income to the trusts. A land exchange must result in the board receiving
equal or greater income to the trusts. The projected income for the proposed exchange land
will be estimated using the board's minimum lease rate. The minimum lease rate for the
proposed exchange land will be compared to the present income received by the trusts from

the trust lands to be exchanged, including all current and potential future revenue streams
from surface leases, encumbrances, development of natural resources, and other sources,
and any tax liability.
3. Acreage. Land exchanges should result in the board receiving equal or greater acreage. The
board, however, may consider receiving less acreage in return for substantially higher value or
income, or both.
4. Consolidation of trust lands. The proposed land exchange must not fragment trust land
holdings by creating isolated parcels of trust land. In all exchanges, the board shall reserve all
minerals underlying the trust lands to be exchanged pursuant to section 5 of article IX of the
Constitution of North Dakota subject to applicable law.
5. Potential for long-term appreciation. The proposed exchange land must have similar revenue
potential as the trust lands to be exchanged.
6. Access. A land exchange must not diminish access to trust lands. Accessible trust lands
should be exchanged with lands that offer equal or improved access.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06-19.1, 15-06-22, 15-07-02
### § 85-04-06-03. Application for land exchange.

An applicant shall submit a written letter of application to the commissioner to request a land
exchange. The application must include:
1. Legal description of the trust lands to be exchanged;
2. Legal description of the proposed exchange land;
3. Applicant's estimated valuation of the proposed exchange land;
4. The most recent tax assessment for the proposed exchange land;
5. Statement of ownership of the proposed exchange land, including owners' names and
ownership interest;
6. Purpose of exchange request; and
7. A nonrefundable application fee as determined by the board.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06-19.1
### § 85-04-06-04. Evaluation of application.

The department shall evaluate the application and may request the applicant provide additional
information. After the department’s evaluation:
1. The commissioner may reject an application:
a. If the application does not meet the requirements of subsections 1 and 2 of section
85-04-06-02; or
b. If the application fails to comply with North Dakota law.

2. If the commissioner determines an application meets the requirements of section 85-04-06-02,
the commissioner shall present the application to the board to determine if the application
reflects a tract the board is willing to exchange.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06-19.1
### § 85-04-06-05. Comments and notice.

1. Upon receipt of an application for land exchange and a determination by the board that the
application covers a tract the board is willing to exchange, the department shall post on the
department's website a notice of the application for land exchange, any supporting
documentation, and instructions for submitting public comments. The department also shall
publish notice of an application for land exchange in the official newspaper of the county
where the proposed exchange land and proposed trust lands to be exchanged are located
and in the Bismarck Tribune. Notice must be published once each week for three consecutive
weeks prior to the deadline for comments. The notice must contain the legal description of the
proposed exchange land and proposed trust lands to be exchanged and the deadline for
comments. If publication of any notice is omitted inadvertently by any newspaper or the notice
contains typographical errors, the department may proceed with the scheduled comment
period if it appears the omission or error is not prejudicial to the department's interest.
2. All comments must be in writing and contain the following:
a. Name and address of the interested person;
b. Applicant's name and address;
c. The legal description of the proposed exchange land and proposed trust lands to be
exchanged as shown on the published notice; and
d. A detailed statement as to whether the interested person supports or opposes the
proposed land exchange.
3. The department shall give notice of the proposed exchange to any entity having a property
interest in any portion of trust lands involved in the exchange as reflected in the records of the
department and if the land is leased, the commissioner shall notify the lessee of the intent to
exchange the property during the months of October through January.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06-19.1
### § 85-04-06-06. Exchange report.

Following the department's application evaluation, the board's determination that the application
covers a tract the board is willing to exchange, and expiration of the public comment period, the
department shall prepare an exchange report to be presented to the board, which will include the
following:
1. A summary discussion of how the exchange meets or exceeds any of the six criteria for land
exchange under section 85-04-06-02;
2. A summary of public comments received on the proposed exchange;
3. The department's concerns or opinions of the merits of the proposed exchange;

4. The department's recommendations for board direction regarding further review, if needed, of
the proposed exchange; and
5. The applicant's commitment to fund the costs of the department's detailed review, including
appraisals, title examinations, advertising costs, recording fees, and other costs as may be
necessary to complete an exchange as determined by the department. The applicant is
responsible for payment of all costs, unless payment of the costs is otherwise waived by the
board or shared by the parties to the exchange.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06-19.1
### § 85-04-06-07. Board authorization.

Upon receipt of the department's exchange report, the board shall consider the specific
recommendations of the department and public comments and evaluate the merits of the land
exchange. The board shall determine whether further review and public comment are required.
When a proposed exchange satisfies the exchange criteria, the board may exercise its discretion to
suspend further review and disapprove the application as not in the best interests of the trusts.
Alternatively, the board may direct the commissioner to complete specific tasks relating to the
merits of the proposed exchange and report back to the board with findings before proceeding further.
When the board is satisfied that the department and applicant have generated all information
necessary for its decision, the board shall review and determine whether the proposed exchange is in
the best interests of the trusts.
The commissioner is authorized to complete all documents for the exchange on the board's behalf
if the board approves the exchange.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06-19.1
