Read first time 01/11/12.   Referred to Committee on Agriculture & Natural Resources.

     AN ACT Relating to replacing encumbered state forest lands for the benefit of multiple participating counties; amending RCW 79.02.010, 79.64.100, 79.64.110, and 79.22.060; reenacting and amending RCW 43.30.385; adding new sections to chapter 79.22 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds:
     (a) Compliance with the federal endangered species act on state forest lands within small, timber-dependent counties in southwest Washington is disproportionately burdensome when compared to the total budget in these counties;
     (b) When compared to other forested parts of the state, there is a relatively small federal land base in these counties, which has resulted in substantial responsibility for endangered species act-related habitat conservation being borne by state forest lands;
     (c) Within these counties, there is limited availability of private working forest land available for use as a replacement for encumbered state forest lands;
     (d) Currently, county beneficiaries may not receive revenue derived from state forest lands located in any counties other than their own;
     (e) Through the passing of chapter 354, Laws of 2009, the legislature established the need to relieve the impact of long-term endangered species-related encumbrances on state forest lands in small, timber-dependent counties in Washington;
     (f) As a result of the implementation of chapter 354, Laws of 2009, replacement lands are to be purchased to maintain the land base and productivity of state forest lands in these counties;
     (g) There is a need for timely reinvestment in the land base of state forest lands by replacing those transferred encumbered lands with new, productive, unencumbered forest land;
     (h) The maintenance of a productive state forest land base in these counties is vital to maintaining a stable, viable natural resource economy that supports rural communities and creates local natural resource-based jobs; and
     (i) These counties have articulated the need to reestablish sustainable long-term revenue from state forest lands through the acquisition of productive timber land beyond what will be funded by the land value of transferred encumbered lands under chapter 354, Laws of 2009.
     (2) It is the intent of the legislature to authorize the board of natural resources to establish a state forest land pool for small, timber-dependent southwest Washington counties. This action allows the board of natural resources, if deemed appropriate after a required analysis, to use revenue designated for replacement of encumbered state forest land in one county to be pooled with other counties' land replacement funds to purchase forest land within any of the participating counties. This forest land would be managed as state forest land for the benefit of all counties participating in the pool, proportionate to their contribution of asset value to the land pool, according to a set of policy, administrative, and financial structures developed by the department of natural resources and adopted by the board of natural resources.
     (3) It is the further intent of the legislature that the replacement forest lands purchased to be part of the land pool are to be maintained as working forest lands. For purposes of the land pool, the department of natural resources should seek out land threatened by encroaching development and land not likely to become further encumbered in an effort to preserve working forest land to the maximum extent possible.

Sec. 2   RCW 79.02.010 and 2011 c 216 s 17 are each amended to read as follows:
     The definitions in this section apply throughout this title unless the context clearly requires otherwise.
     (1) "Aquatic lands" means all state-owned tidelands, shorelands, harbor areas, and the beds of navigable waters as defined in RCW 79.105.060 that are administered by the department.
     (2) "Board" means the board of natural resources.
     (3) "Commissioner" means the commissioner of public lands.
     (4) "Community and technical college forest reserve lands" means lands managed under RCW 79.02.420.
     (5) "Community forest trust lands" means those lands acquired and managed under the provisions of chapter 79.155 RCW.
     (6) "Department" means the department of natural resources.
     (7)(a) "Forest biomass" means the by-products of: Current forest management activities; current forest protection treatments prescribed or permitted under chapter 76.04 RCW; or the by-products of forest health treatment prescribed or permitted under chapter 76.06 RCW.
     (b) "Forest biomass" does not include wood pieces that have been treated with chemical preservatives such as: Creosote, pentachlorophenol, or copper-chrome-arsenic; wood from existing old growth forests; wood required to be left on-site under chapter 76.09 RCW, the state forest practices act; and implementing rules, and other legal and contractual requirements; or municipal solid waste.
     (8) "Improvements" means anything considered a fixture in law placed upon or attached to lands administered by the department that has changed the value of the lands or any changes in the previous condition of the fixtures that changes the value of the lands.
     (9) "Land bank lands" means lands acquired under RCW 79.19.020.
     (10) "Person" means an individual, partnership, corporation, association, organization, cooperative, public or municipal corporation, or agency of a federal, state, or local governmental unit, however designated.
     (11) "Public lands" means lands of the state of Washington administered by the department including but not limited to state lands, state forest lands, lands included in a state forest land pool, and aquatic lands.
     (12) "State forest lands" means lands acquired under RCW 79.22.010, 79.22.040, and 79.22.020.
     (13) "State lands" includes:
     (a) School lands, that is, lands held in trust for the support of the common schools;
     (b) University lands, that is, lands held in trust for university purposes;
     (c) Agricultural college lands, that is, lands held in trust for the use and support of agricultural colleges;
     (d) Scientific school lands, that is, lands held in trust for the establishment and maintenance of a scientific school;
     (e) Normal school lands, that is, lands held in trust for state normal schools;
     (f) Capitol building lands, that is, lands held in trust for the purpose of erecting public buildings at the state capital for legislative, executive, and judicial purposes;
     (g) Institutional lands, that is, lands held in trust for state charitable, educational, penal, and reformatory institutions; and
     (h) Land bank, escheat, donations, and all other lands, except aquatic lands, administered by the department that are not devoted to or reserved for a particular use by law.
     (14) "Valuable materials" means any product or material on the lands, such as forest products, forage or agricultural crops, stone, gravel, sand, peat, and all other materials of value except: (a) Mineral, coal, petroleum, and gas as provided for under chapter 79.14 RCW; and (b) forest biomass as provided for under chapter 79.150 RCW.
     (15) "State forest land pool" or "land pool" means state forest lands acquired and managed under section 3 of this act.

NEW SECTION.  Sec. 3   A new section is added to chapter 79.22 RCW under the subchapter heading "Part 1 General Provisions" to read as follows:
     (1) The board may create a state forest land pool, to be managed in accordance with this section, if the board determines that creation of a land pool is in the best interest of the state or affected trust, based on an analysis prepared by the department under section 4 of this act. The land pool may not contain more than ten thousand acres of state forest land at any one time.
     (2) A county is eligible to participate in a land pool if the board determines it:
     (a) Has a population of twenty-five thousand or less; and
     (b) Has existing state forest lands encumbered with timber harvest deferrals, associated with wildlife species listed under the federal endangered species act, more than thirty years in length.
     (3) All lands in the land pool are state forest lands and must be managed in the same manner and with the same responsibilities as other state forest lands. Proceeds from the state forest land pool must, except as provided in RCW 79.64.110, be distributed under RCW 79.22.010 and 79.22.040.
     (4)(a) A county may participate in the land pool only if it is eligible, as determined under subsection (2) of this section, and the board receives a written request to do so by the legislative authority of that county.
     (b) The board shall end any further participation of a county in the land pool if it receives a written request to do so by the legislative authority of that county. If the board receives such a request, that county's interest in the land pool as a beneficiary remains, but no new contributions of asset value may be made to the land pool on behalf of the county and no new lands may be purchased in that county for the land pool.
     (5)(a) If a land pool is created by the board, the department and the participating counties must develop a funding strategy for acquiring land to include in the land pool.
     (b) The department and participating counties may pursue funding for the transfer of state forest land encumbered by long-term wildlife-related harvest deferrals within the participating counties into status as a natural resources conservation area under chapter 79.71 RCW, and use the value of the transferred land to acquire working forest lands to include in the land pool.
     (c) The department and participating counties may pursue other land acquisition funding strategies.

NEW SECTION.  Sec. 4   A new section is added to chapter 79.22 RCW under the subchapter heading "Part 1 General Provisions" to read as follows:
     (1) Upon the request of the board in its consideration of creating a state forest land pool under section 3 of this act, the department must conduct an analysis that includes, at a minimum, the following elements:
     (a) An evaluation of how the proposed land pool would benefit the requesting counties, including revenue predictability and long-term revenue projections;
     (b) The development and proposal of a set of policy, administrative, and financial structures necessary for the department to establish the land pool, including a method to determine the percentage of revenue to be distributed to each county participating in the land pool that is based on each county's proportionate contribution of asset value to the land pool;
     (c) An estimation of the administrative costs of creating and maintaining the land pool; and
     (d) Any additional information requested by the board.
     (2) The department may coordinate its analysis with affected counties or an association representing the affected counties.

Sec. 5   RCW 79.64.100 and 2003 c 334 s 219 are each amended to read as follows:
     (1) There is created a forest development account in the state treasury. The state treasurer shall keep an account of all sums deposited ((therein and)), expended, or withdrawn ((therefrom)) from the account.
     (2)(a) Any sums placed in the forest development account shall be pledged for the purpose of:
     (i) Paying interest and principal on the bonds issued by the department under RCW 79.22.080 and 79.22.090 and the provisions of this chapter((,)); and
     ((for)) (ii) The purchase of land for growing timber.
     (b) Any bonds issued shall constitute a first and prior claim and lien against the account for the payment of principal and interest.
     (3) No sums for the ((above)) purposes identified in subsection (2) of this section shall be withdrawn or paid out of the account except upon approval of the department.
     (4) Appropriations may be made by the legislature from the forest development account to the department for the purpose of:
     (a) Carrying on the activities of the department on state forest lands((,));
     (b) Establishing a state forest land pool under section 3 of this act and carrying on the activities of the department on lands included in the land pool;
     (c) Carrying on the activities of the department on lands managed on a sustained yield basis as provided for in RCW 79.10.320((,)); and
     ((for)) (d) Reimbursement of expenditures that have been made or may be made from the resource management cost account created in RCW 79.64.020 in the management of state forest lands.

Sec. 6   RCW 79.64.110 and 2009 c 354 s 8 are each amended to read as follows:
     (1) Any moneys derived from the lease of state forest lands or from the sale of valuable materials, oils, gases, coal, minerals, or fossils from those lands, or the appraised value of these resources when transferred to a public agency under RCW 79.22.060, except as provided in RCW 79.22.060(4), must be distributed as follows:
     (((1))) (a) For state forest lands acquired through RCW 79.22.040 or by exchange for lands acquired through RCW 79.22.040:
     (((a))) (i) The expense incurred by the state for administration, reforestation, and protection, not to exceed twenty-five percent, which rate of percentage shall be determined by the board, must be returned to the forest development account created in ((the state general fund)) RCW 79.64.100.
     (((b))) (ii) Any balance remaining must be paid to the county in which the land is located or, for counties participating in a land pool created under section 3 of this act, to each participating county proportionate to its contribution of asset value to the land pool as determined by the board. Payments made under this subsection are to be paid, distributed, and prorated, except as otherwise provided in this section, to the various funds in the same manner as general taxes are paid and distributed during the year of payment.
     (((c))) (iii) Any balance remaining, paid to a county with a population of less than sixteen thousand, must first be applied to the reduction of any indebtedness existing in the current expense fund of the county during the year of payment.
     (((d))) (iv) With regard to moneys remaining under this subsection (1)(a), within seven working days of receipt of these moneys, the department shall certify to the state treasurer the amounts to be distributed to the counties. The state treasurer shall distribute funds to the counties four times per month, with no more than ten days between each payment date.
     (((2))) (b) For state forest lands acquired through RCW 79.22.010 or by exchange for lands acquired through RCW 79.22.010, except as provided in RCW 79.64.120:
     (((a))) (i) Fifty percent shall be placed in the forest development account.
     (((b))) (ii) Fifty percent shall be prorated and distributed to the state general fund, to be dedicated for the benefit of the public schools, ((and)) to the county in which the land is located or, for counties participating in a land pool created under section 3 of this act, to each participating county proportionate to its contribution of asset value to the land pool as determined by the board, and according to the relative proportions of tax levies of all taxing districts in the county. The portion to be distributed to the state general fund shall be based on the regular school levy rate under RCW 84.52.065 and the levy rate for any maintenance and operation special school levies. With regard to the portion to be distributed to the counties, the department shall certify to the state treasurer the amounts to be distributed within seven working days of receipt of the money. The state treasurer shall distribute funds to the counties four times per month, with no more than ten days between each payment date. The money distributed to the county must be paid, distributed, and prorated to the various other funds in the same manner as general taxes are paid and distributed during the year of payment.
     (((3))) (2) A school district may transfer amounts deposited in its debt service fund pursuant to this section into its capital projects fund as authorized in RCW 28A.320.330.

Sec. 7   RCW 79.22.060 and 2009 c 354 s 7 are each amended to read as follows:
     (1) With the approval of the board, the department may directly transfer or dispose of state forest lands without public auction, if the lands:
     (a) Consist of ten contiguous acres or less;
     (b) Have a value of twenty-five thousand dollars or less; or
     (c) Are located in a county with a population of twenty-five thousand or less and are encumbered with timber harvest deferrals, associated with wildlife species listed under the federal endangered species act, greater than thirty years in length.
     (2) Disposal under this section may only occur in the following circumstances:
     (a) Transfers in lieu of condemnation;
     (b) Transfers to resolve trespass and property ownership disputes; or
     (c) In counties with a population of twenty-five thousand or less, transfers to public agencies.
     (3) Real property to be transferred or disposed of under this section shall be transferred or disposed of only after appraisal and for at least fair market value, and only if the transaction is in the best interest of the state or affected trust. Valuable materials attached to lands transferred to public agencies under subsection (2)(c) of this section must be appraised at the fair market value without consideration of management or regulatory encumbrances associated with wildlife species listed under the federal endangered species act.
     (4)(a) Except as provided in (b) of this subsection, the proceeds from real property transferred or disposed of under this section shall be deposited into the park land trust revolving fund and be solely used to buy replacement land within the same county as the property transferred or disposed.
     (b) The proceeds from real property transferred or disposed of under subsections (1)(c) and (2)(c) of this section for the purpose of participating in the state forest land pool created under section 3 of this act must be deposited into the park land trust revolving fund and used to buy replacement forest land for the benefit of that county as provided in RCW 79.64.110 and located within any county participating in the land pool.
     (c) Except as otherwise provided in this subsection, in counties with a population of twenty-five thousand or less, the portion of the proceeds associated with valuable materials on ((the transferred)) state forest land transferred under subsections (1)(c) and (2)(c) of this section must be distributed as provided in RCW 79.64.110. If requested in writing by the legislative authority of a county participating in the state forest land pool created under section 3 of this act, the portion of the proceeds associated with valuable materials on state forest land transferred under subsections (1)(c) and (2)(c) of this section must be deposited in the park land trust revolving fund and used to buy replacement forest land for the benefit of that county as provided in RCW 79.64.110 and located within any county participating in the land pool.

Sec. 8   RCW 43.30.385 and 2011 c 320 s 21 and 2011 c 216 s 14 are each reenacted and amended to read as follows:
     (1) The park land trust revolving fund is to be utilized by the department for the purpose of acquiring real property, including all reasonable costs associated with these acquisitions, as a replacement for the property transferred to the state parks and recreation commission, as directed by the legislature in order to maintain the land base of the affected trusts or under RCW 79.22.060 and to receive voluntary contributions for the purpose of operating and maintaining public use and recreation facilities, including trails, managed by the department.
     (2) In addition to the other purposes identified in this section, the park land trust revolving fund may be utilized by the department to hold funding for future acquisition of lands for the community forest trust program from willing sellers under RCW 79.155.040.
     (3)(a) Proceeds from transfers of real property to the state parks and recreation commission or other proceeds identified from transfers of real property as directed by the legislature shall be deposited in the park land trust revolving fund.
     (b) Except as otherwise provided in this subsection, the proceeds from real property transferred or disposed under RCW 79.22.060 must be used solely to purchase replacement forest land, that must be actively managed as a working forest, within the same county as the property transferred or disposed. If the real property was transferred under RCW 79.22.060 (1)(c) and (2)(c) from within a county participating in the state forest land pool created under section 3 of this act, replacement forest land may be located within any county participating in the land pool.
     (c) Disbursement from the park land trust revolving fund to acquire replacement property and for operating and maintaining public use and recreation facilities shall be on the authorization of the department.
     (d) The proceeds from the recreation access pass account created in RCW 79A.80.090 must be solely used for the purpose of operating and maintaining public use and recreation facilities, including trails, managed by the department.
     (4) In order to maintain an effective expenditure and revenue control, the park land trust revolving fund is subject in all respects to chapter 43.88 RCW, but no appropriation is required to permit expenditures and payment of obligations from the fund.
     (5) The department is authorized to solicit and receive voluntary contributions for the purpose of operating and maintaining public use and recreation facilities, including trails, managed by the department. The department may seek voluntary contributions from individuals and organizations for this purpose. Voluntary contributions will be deposited into the park land trust revolving fund and used solely for the purpose of public use and recreation facilities operations and maintenance. Voluntary contributions are not considered a fee for use of these facilities.