School and Institutional Trust Lands Administration Grazing Fees on the Rise

Grazing Cattle

ISSUE

In March 2019, Utah’s School and Institutional Trust Lands Association (SITLA) Board of Trustees voted to increase the livestock grazing fees for both scattered and block sections. Starting July 1, scattered sections will increase from $5.82/Animal Unit Month (AUM) to $6.10/AUM. For blocks, the increase will increase from $10.15/AUM to $10.64/AUM. In both cases, the increase includes the $0.10/AUM weed and insect control fee. 

 

BACKGROUND

Given the importance of Utah’s livestock grazing on both private and public lands, combined with SITLA’s legal mandate to receive no less than fair-market value for the use of its lands to support its beneficiaries, the SITLA Board directed the Agency in March 2003 to evaluate the merits of creating a separate grazing assessment structure for selected land blocks and to explore ways of improving the overall grazing program, including stewardship practices. After two years of extensive analysis, including professional guidance from two respected agricultural economists and with input from industry leaders and other stakeholders, a completely new structure for grazing assessments was adopted by the SITLA Board. 

In 2003, the scattered section fee was $2.85/AUM and $5.00/AUM for blocks. In 2003, it was agreed upon by stakeholders there would be a standard assessment increase for three consecutive years for the scattered sections and for five consecutive years for the block lands.  After which, in 2009, an adjusted formula would determine the increases. The application of the adopted formula is now in its ninth year where it is applicable to both the standard grazing assessment and selected blocks. The formula is intended to keep assessments relatively stable into the future, yet sensitive to inflationary or deflationary pressures, depending on what changes occur in private lease rates. NOTE: the 2019 federal fee will be $1.35/AUM, down $0.06 from last year. 

As you’d expect, SITLA managers believe the results of these fee changes and increases have been positive for both the Trust and livestock users. Annual grazing program revenues have steadily increased from $350,000 in FY2001 to $1,332,881 in FY2018. The changes have also resulted in increased security for grazing permittees as well as increased stewardship through the implementation of a wide variety of range improvement projects around the state. SITLA lease contracts are for 15 years versus 10 years with the BLM and Forest Service. 

 

SITLA REVENUES

SITLA manages Utah’s 3.3 million acres of school trust lands for the public education system. SITLA generates revenue from the diverse portfolio of oil, gas, mining, real estate development and other sales, leasing and permitting activities. Revenue is deposited into the Permanent School Fund, which is now invested by the State Treasurer. Annual distributions to public school from the Permanent School Fund have grown tremendously, from $8.3 million in FY2004 to $45 million in FY2018. 

 

SITLA BOARD

The Utah Farm Bureau Federation has long been an active member of the Governor appointed SITLA Nominating Committee. This Committee is legally charged to surface, interview and recommend candidates to serve on the SITLA Board. For many years, the law required that an “Agriculture Representative” serve on the Board.  In 2012, the law was amended to replace “Agriculture Representative” with a “Renewable Resource Representative.”  Board positions are four-year terms and can serve for two consecutive terms. 



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