The records of the department show that the average rental charged for harbor area during the biennium just closed is four times that of the average rental during previous administrations.

RECOMMENDED LEGISLATION.

I submit the following recommendations which are the result of two years' experience and a careful study of the needs of this department. To make this report concise and reduce the expense of printing, I have made but brief explanation under each recommendation, but I am prepared to explain in detail to the legislative committees the necessity for these additions and amendments to existing laws.

The following citations refer to section and page of Public Land Laws as compiled by this office in January of the current year:

Section 59, page 56: This section should be amended to provide that the Board of State Land Commissioners shall have authority to determine the exact point of division between shore land and tide land on tidal rivers or streams. It is important that action be taken upon this recommendation for the reason that cases are now arising that require the determination of this point.

Section 65, page 62: This section should be amended to include cemetery sites.

Section 66, page 62: This section should be repealed. It is not in accordance with the State constitution.

Section 68, page 63: This section should be amended to provide that, when it appears to be to the best interest of the State, the Board of State Land Commissioners may offer for sale any tract of land or valuable material without application first having been filed. This authority is necessary at times to protect the State's interest, as for instance, where a tract of timber has been killed by fire and unless disposed of at once will prove a total loss.

Section 82, page 75: This section should be amended to provide for remittance by one certified check, draft or postal

order or by cash from the county auditor, instead of the individual remittance as now provided.

Section 83, page 76: This section should be amended to provide for change in the time of payment of the annual installments of principal and interest. It is suggested that these payments should fall due one year from the date of issuance of contract and annually thereafter. Not, however, to affect contracts now in existence. This would equalize the work of the office incident to the collection of payments by distributing them throughout the entire year, thus avoiding the congestion now resulting from all the payments falling due on March first.

Section 87, page 80: This section should be amended to give the Board of State Land Commissioners authority to determine the limits or boundaries between first class and second class tide and shore lands. This is of great importance.

Section 93, page 89: This section should be amended to leave the matter of hearing discretionary with the Board of State Land Commissioners. The present statute makes a hearing imperative, while in some cases of conflict the proof of ownership submitted or conditions shown in the statement of facts enables the Board to make the award and dispose of the case without a hearing.

Section 120, page 106: This should be repealed as the practice of filing a duplicate description of the tide lands in the county auditor's office was abandoned years ago and no good purpose is served by such requirement.

Section 128, page 109: This should be amended to read for a term of five years, six years being contrary to the provision of the constitution.

Section 132, page 111: This section should be amended to provide the same method of forwarding remittances as outlined in the proposed amendment to section 82, page 75.

Section 135, page 113: This should be amended to provide that notices of rentals due shall be sent not less than thirty days nor more than sixty days prior to the date when the rental

becomes due. This amendment is desirable as being better suited to the new system of bookkeeping now in use in this office and the change will result in greater economy in the clerical work and less liability to error.

Section 138, page 115: This section should be amended to provide that the special deposit, forfeited on account of failure or refusal of the applicant to accept a lease, shall be credited to the general fund the same as under section 128 of the land code.

Section 139, page 116: This should be amended to provide that the lessee shall not be entitled to have any improvements appraised that have not been authorized by the Commissioner of Public Lands. I regard this recommendation as one of the most important I have to offer for the reason that thousands of dollars are being lost to the State annually because of the fact that lessees of State lands frequently place heavy improvements upon them-in some cases amounting to $15,000.00 on a single tract-thereby preventing competitive bidding when the land is offered for sale, as the statute requires that improvements must be paid for in cash on day of sale. While I believe that lessees of State lands, especially home-builders, should be allowed to make a reasonable amount of improvement and receive credit therefor, yet it is only fair that such improvement should be made under supervision of the State in order that its interests may be protected.

Section 141, page 117: This should be amended to provide that improvements upon State lands at the time of expiration of a lease or surrender of a lease prior to any application to purchase said land, may be removed by the original lessee or at his option may remain subject to purchase by any purchaser who shall apply to purchase the land within a period of two years from the expiration or surrender of said lease, and if not removed within that time shall attach to the land and become the property of the State. It should also be amended to provide for the appraisal, under any application to lease, of any improvements found upon the land, whether the same be the

property of the State or of any former lessee or occupant of said land, and for the payment by the successful bidder on the date of leasing of the appraised valuation of such improvements in the same manner as in the sale of State lands; that when the improvements are the property of the State the amount so paid shall be turned over to the treasurer to be placed to the credit of the fund into which the proceeds derived from the sale of the land should be paid, and that where improvements are the property of a lessee whose lease has not been canceled for failure to pay rental due, the appraised value shall be paid over to him.

Section 192, page 145: This should be amended to provide for the issuance of a mining contract for a period of not to exceed twenty years and that such contract shall be issued at the discretion of the Commissioner of Public Lands.

Section 197, page 148: This should be amended to provide for a term of lease of not more than five years. This seems necessary on account of conflict with other leasing statutes and because of numerous disputes between this office and the applicants. There should also be a provision for re-leasing upon expiration of the first term.

Section 202, page 152: This should be amended to provide for the payment of an annual rental for a period of years to be determined by the Board of State Land Commissioners or by the Commissioner of Public Lands. In this connection, there should also be a provision for a form of permit or easement similar to a railroad right-of-way certificate to be issued under applications for logging roads and county road rights-of-way, under applications for irrigation rights-of-way, transmission lines, overflow rights and the like, and for the collection of a fee of $1.00 for such permit.

Section 218, page 159: This should be amended to provide for the depositing with the Commissioner of Public Lands the appraised value of the improvements where the railroad company has not made settlement with the lessee or owner of the improvements, and should give the Commissioner authority to

pay the amount over to the owner of the improvements where a legitimate claim is shown.

Sections 225-226, pages 162-163: These sections should be amended to give the Board of State Land Commissioners discretion in the matter of granting overflow rights, and to give the Board authority to fix the time within which the construction referred to under section 225 shall be commenced on pain of forfeiture of rights. There should also be an amendment to section 226 to eliminate the sixty-day provision.

Section 232, page 166: This section should be repealed and a statute substituted granting rights-of-way to drainage districts where necessary for drainage purposes. In this connection, some law should be enacted giving the State the right to reclaim its tide lands where they will have an agricultural value after reclamation.

Section 236, page 167: This section is unnecessary and obsolete, and should be repealed.

PREFERENCE RIGHT TO RE-LEASE HARBOR AREA.

Provision should be made for preference right to re-lease harbor area as in the case of uplands. Improvements placed upon harbor area are necessarily of such a nature that they can not be removed and it is not only fair to the lessee, but to the best interest of the State to provide for the preference right to re-lease. If this right is granted, it should be done at an early date as the leases heretofore granted are beginning to expire.

LEASING OF KELP GROVES.

It is extremely important that this legislature make provision for the leasing of kelp groves found in tide waters under the jurisdiction of this State. Kelp has proved to be rich in potassium salts and is in great demand as a fertilizer. At present the world's principal supply of potash comes from the European countries now engaged in war, and this has resulted in not only increasing the price but in greatly reducing the supply. Many inquiries are being received at this office from