# Title 85 — University and School Lands, Board of

## Article 85-04 — Surface Land Management

## Chapter 85-04-07 — Land Sales under North Dakota Century Code Chapter 15-06

### § 85-04-07-01. Sale of original grant lands.

The board shall retain and manage original grant lands to produce revenue consistent with the
long-term maintenance of the original grant lands' income producing potential and ecological health.
The commissioner may propose, or accept letters of application for, the sale of original grant lands after
the original grant lands have been evaluated by the commissioner for "highest and best use" as defined
in North Dakota Century Code section 15-02-05.1 and the department considers the following criteria:
1. If the tract has been zoned or has high potential to be zoned residential, commercial, or
industrial;
2. The tract's potential for mineral development, including sand, gravel, clay, and scoria;
3. If the tract has been a source of persistent management problems, resulting in the sale of the
tract being prudent from a long-term financial point of view;
4. If the tract and adjacent trust land tracts total less than eighty acres [32.37 hectares] in size,
more or less, for grassland and less than forty acres [16.19 hectares], more or less, for
cropland or hayland, except those tracts which are severed by a highway, road, railroad,
canal, river, or lake, which may be sold if the severed portion is less than these amounts; or
5. If the tract and adjacent trust land tracts exceed eighty acres [32.37 hectares] in size, more or
less, for grassland or more than forty acres [16.19 hectares] in size, more or less, for
cropland.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06, 15-08
### § 85-04-07-02. Requirements of sale.

Any sale of original grant lands, with the exception of tracts provided in subsection 1 of section
1. The proposed sale would result in no net loss of leasable original grant lands;
2. The applicant agrees to provide accessible and leasable land equal or greater in acres and
value to the trust from which the original grant lands were sold, for which the department then
shall consider the criteria listed below in subsections a through f in any no net loss sale. Land
provided for a no net loss sale is not required to satisfy all six criteria outlined below.
a. Equal or greater value.
(1) In connection with any no net loss sale 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 in accordance with North Dakota Century Code sections 15-06-22 and
15-06-23, and shall request additional appraisals be completed by a certified
appraiser, to determine the value of the trust lands and the proposed no net loss
sale land. The same appraiser shall conduct appraisals of the trust lands and the
proposed no net loss sale land. In the event the commissioner is not satisfied with
the appraisals, the commissioner may require additional appraisals by alternative
certified appraisers.
(2) The department shall advise the appraiser regarding the scope of work to ensure
the value of the trust lands is determined by the highest and best use of the land,
not simply the present use. For example, if a no net loss sale is proposed in which
the trust lands are currently leased for grassland but the land is in the path of
residential, commercial, or industrial development, the trust lands must be
appraised for the highest and best use for residential, commercial, or industrial
development rather than its current use as grassland.
(3) The department shall consider features not reflected in the market price that 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.
b. Equal or greater income to the trusts. A no net loss sale must result in the board
receiving equal or greater income to the trusts. The projected income for the proposed no
net loss sale land will be estimated using the board's minimum lease rate. The minimum
lease rate for the proposed no net loss sale land will be compared to the present income
received by the trusts from the trust lands, including all current and potential future
revenue streams from surface leases, encumbrances, development of natural resources,
and other sources, and any tax liability.
c. Acreage. A no net loss sale should result in the board receiving equal or greater acreage.
The board may, however, consider receiving less acreage in return for one or more of the
following:
(1) Improved dedicated access;
(2) Substantially higher value; or
(3) Substantially higher income.
d. Consolidation of trust lands. The proposed no net loss sale must not fragment trust land
holdings by creating isolated parcels of trust land. In all no net loss sales, the board shall
reserve all minerals underlying the trust lands pursuant to section 5 of article IX of the
Constitution of North Dakota subject to applicable law.
e. Potential for long-term appreciation. The proposed no net loss sale land must have
similar revenue potential as the trust lands.
f. Access. A no net loss sale must not diminish access to trust lands. The no net loss land
should provide equal or improved access.
3. Any land acquired pursuant to a sale of original grant lands, subject to no net loss, shall be
treated by the board as "original grant lands".
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06, 15-08

### § 85-04-07-03. Sale procedure.

1. A letter of application for purchase of original grant lands meeting the criteria in section
a. A nonrefundable application fee in an amount set by the board;
b. A legal description of the trust lands; and
c. A legal description of the lands to be provided to ensure no net loss.
Upon board approval, a sale of original grant lands must be conducted in accordance with
North Dakota Century Code chapter 15-06.
2. Upon receipt of a letter of application to purchase a tract, the potential sale must be presented
to the commissioner for preliminary approval or rejection.
3. The commissioner may recommend to the board that a tract meeting the criteria of section
Upon a determination that the application covers a tract the board is willing to sell, the
department shall post on the department's website a notice of the application for sale, any
supporting documentation, and instructions for submitting public comments. The department
also shall publish notice of a letter of application for sale in the official newspaper of the county
where the nominated tract is 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 tract 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. 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 tract for sale as shown on the published notice;
and
d. A detailed statement as to whether the interested person supports or opposes the sale.
4. The board shall review all appraisals, any public comments, other relevant information
including title examinations, and determine whether to proceed with the sale. If the board
decides to proceed with the sale, the board shall establish a minimum acceptable sale price.
5. If the land is leased, the commissioner shall notify the lessee of the intent to sell the property
during the months of October through January.
6. The department shall notify the applicant, if any, of the price set by the board, which must be
the minimum acceptable sale price.
7. The department may contract a legal metes and bounds survey for the tract to be sold at
public auction under North Dakota Century Code chapter 15-06.
8. If the applicant desires to proceed, the applicant shall submit to the department a formal offer
to purchase. The formal offer to purchase must serve as the opening bid at the public sale.
The applicant shall provide five percent of the minimum sale price as earnest money, as a
condition of the formal offer to purchase.

9. Land must be advertised for sale at public auction under North Dakota Century Code chapter
15-06.
10. If no bids are received on a tract for which no formal application was received, the tract may
be sold for the board-established minimum acceptable sale price to the first interested party at
a private sale during the six months following the date of the auction.
11. The sale of any tract under this chapter may be by:
a. Contract under section 6 of article IX of the Constitution of North Dakota; or
b. A purchase agreement requiring twenty percent payment of the purchase price on the
day of the sale, which may include earnest money paid, and the balance due within sixty
calendar days. The balance due date may be extended at the commissioner's discretion,
up to a maximum of one hundred eighty days from the date of the sale. Interest must be
charged on any remaining balance, beginning sixty days after the date of sale, at the
Bank of North Dakota base rate plus one percent.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06, 15-08
### § 85-04-07-04. Payment of costs.

The purchaser is responsible for payment of all costs, including appraisals, title examinations, and
other costs as may be necessary to complete the sale.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06, 15-08
### § 85-04-07-05. Board review.

Within thirty days of a decision under these rules, an aggrieved party may request the
commissioner review the decision. The aggrieved party seeking review shall submit any information
required by the commissioner as part of this request. Within thirty days of the commissioner's review,
the aggrieved party may request board review and the commissioner shall recommend if board review
is warranted.
History: Effective January 1, 2021.
General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02
Law Implemented: NDCC 15-06, 15-08
