4. Rental Review Procedures for Special Use
Leases
(a) Standard
i) Base rentals shall be adjusted as of the
effective date specified in the respective lease through a lease review
conducted by the division. Any lease which is reviewed within one year of the
effective date specified in the lease shall be deemed to have been reviewed
timely and any adjustment in base rentals shall be as of the effective date.
ii) Adjustments in base rentals
may be based upon changes in the market value, changes in established indices,
or other methods which may be appropriate and in the best interest of the
beneficiaries. The determination of which method to use may be based upon an
analysis of the cost effectiveness of performing the review.
iii) When using established indices, the rate
of adjustment shall be the sum of the indices established for the years
involved in the review period, unless the rate of adjustment exceeds a maximum
adjustment rate, or fails to reach a minimum rate of adjustment as specified in
the respective lease. If no maximum adjustment rate or minimum rate of increase
is specified in the lease, then the percent change will increase or decrease
according to the above described rate of adjustment.
iv) The index/indices used by the division
shall reflect the percent of change to be required in the base rental of
applicable leases. The index/indices may be amended at any time during the
first quarter of the calendar year using information from any or all of the
following sources:
(A) Changes in assessed
value for the most current year for the appropriate category of land as
published by the State Tax Commission
(B) The applicable component of the
CPI-U
(C) The applicable Implicit
Price Deflators for the Gross National Product
(D) Data from market analyses of comparable
leases
(E) Public comment
v) A separate index shall be
established for each of the following lease types:
(A) Commercial/industrial
(B) Residential
(C) Agricultural
(D) Recreational
vi) For the purpose of this rule, the
Military, Telecommunications, and Governmental lease types shall be adjusted
using the Industrial Index.
vii)
The adjusted rental amount as determined pursuant to this rule shall be rounded
to the nearest number evenly divisible by $10.
(b) Unit Development
Rental adjustments for unit development leases shall be based
upon changes in the market value of the property or the applicable index as may
be appropriate as determined by the division.
(c) Suspension, Deferral, and Waiver of Lease
Rental Adjustment
The director may suspend, defer, or waive the adjustment of
base rentals in specific instances when justified by natural disasters or
periods of economic crises, based on a written finding that the suspension,
deferral, or waiver is in the best interest of the
beneficiaries.
