Commissioners of the Land Office; granting of commercial and agricultural leases; providing for appraisal of certain improvements; directing certain reimbursement. Effective date.

An Act
ENROLLED SENATE
BILL NO. 951 By: Murdock of the Senate

and

Archer and Burns of the
House

An Act relating to the Commissioners of the Land
Office; amending 64 O.S. 2021, Section 1023, which
relates to the granting of commercial and
agricultural leases; providing for appraisal of
certain improvements; directing certain lease to
require certain reimbursement; providing condition
for lease default; prohibiting charging of certain
fees; providing for promulgation of rules; updating
statutory reference; updating statutory language; and
providing an effective date.

SUBJECT: Commissioners of the Land Office

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION 1. AMENDATORY 64 O.S. 2021, Section 1023, is
amended to read as follows:

Section 1023. A. The Commissioners of the Land Office are
authorized to grant commercial leases and agricultural leases in
trust property.

Commercial leases shall not exceed fifty-five (55) years. The
granting of any commercial lease in excess of three (3) years shall
be by public bidding at not less than fair market value. All
commercial leases shall provide for fair market value throughout the
term of the lease.

ENR. S. B. NO. 951 Page 2
Agricultural leases of trust property shall be limited to a
maximum of five (5) years and shall be by public bidding at not less
than fair market value.

The granting of any interest in trust property at less than fair
market value or not in compliance with this section is void.

Any permanent improvement made on commercial trust property from
and after the passage of this act July 1, 1989, shall revert to the
trust at the end of the lease.

B. In connection with any commercial and agricultural leases,
the Commissioners of the Land Office shall, unless otherwise
exempted by the Constitution or laws of Oklahoma this state:

1. Require payment of ad valorem property taxes on any
improvements and structures on state school land, which would
otherwise be subject to ad valorem property taxation if constructed
on privately owned land; and

2. Indemnify and hold harmless the Commissioners of the Land
Office from any financial obligation related to land, financing, or
operation.

C. An appraiser selected by the Commissioners of the Land
Office shall appraise any improvements approved by the Commissioners
of the Land Office made to the property leased as an agricultural
lease by the current lessee that cannot be removed without manifest
injury to the land. When the Commissioners enter into a new lease
for the property, the lease shall require the new lessee to
reimburse the previous lessee for the appraised value of any
improvements made by the previous lessee by the date the new lessee
is permitted to take occupancy of the property. It shall be
considered a default of the lease of the property to the new lessee
if such reimbursement is not made. Provided, no fees may be charged
to a lessee above those included in the originally accepted bid to
irrigate land used for agricultural purposes if the water is not
sourced from lands owned or managed by the Commissioners.

D. The Commissioners of the Land Office may refuse to accept
any bid or lease on a commercial, agricultural, or mineral lease

ENR. S. B. NO. 951 Page 3
where the party is in default of any installment due or in violation
of any provisions contained in a prior or current lease contract.

D. E. The Commissioners of the Land Office may refuse to accept
any bid or lease contract where the interested party cannot show
adequate creditworthiness as determined by the Land Office.

F. The Commissioners of the Land Office shall promulgate rules
to implement the provisions of this section.

SECTION 2. This act shall become effective November 1, 2025.

ENR. S. B. NO. 951 Page 4
Passed the Senate the 22nd day of May, 2025.

Presiding Officer of the Senate

Passed the House of Representatives the 22nd day of May, 2025.

Presiding Officer of the House
of Representatives

OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.

_________________________________
Governor of the State of Oklahoma

OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________