HOUSE BILL REPORT

HB 1624

BYRepresentatives Belcher, R. King, K. Wilson, Brumsickle, Haugen, Bowman, Locke, Jacobsen and Sayan

Regulating the sale of valuable materials from state-owned tidelands and shorelands.

House Committe on Natural Resources & Parks

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (10)

      Signed by Representatives Belcher, Chair;K. Wilson, Vice Chair; Beck, Ranking Republican Member; Brumsickle, Dellwo, Ferguson,R. Fisher, Fuhrman, Raiter and Sayan.

House Staff:Jean Kelley McElroy (786-7196)

AS REPORTED BY COMMITTEE ON NATURAL RESOURCES & PARKS

FEBRUARY 17, 1989

BACKGROUND:

The Department of Natural Resources (DNR) has the authority to sell or lease state-owned tidelands or beds of navigable waters for the purpose of harvesting oysters, clams, geoducks and other valuable materials like rock, sand, gravel, and silt.  Currently, DNR must sell to the highest bidder, regardless of past performance or other considerations.  There have been situations in which the department was unable to disqualify bidders with a record of past contract compliance problems.

Currently, DNR can reject the highest bid because it is not high enough only if the commissioner is satisfied that the lands or materials could be sold for at least 10 percent more than the amount of the highest bid.

DNR may enter into leases for the harvesting of geoducks.  This arrangement confers some property rights on the lessee.  This could result in a weaker position for the department in contract disputes with harvesters than if the department had simply entered into a harvesting agreement which did not confer any property rights.

Recent events, which resulted in the filing of criminal charges against some geoduck harvesters, indicate that the department needs increased access to reliable information relating to violations of laws concerning natural resources.

SUMMARY:

SUBSTITUTE BILL:  Sale requirements for sales of tidelands and shorelands belonging to the state are changed to provide for sale to the highest responsible bidder. If there is reason to believe that the highest responsible bid is not the highest price obtainable, all bids may be rejected and the department may call for new bids.

The Department of Natural Resources may reject the bid of any bidder who the department determines has defaulted within the last three years or is currently in default on a contract with the state, or who the department determines has violated, within the last three years, any law or regulation relating to the sale or lease of public land or to the sale, lease, or harvest of natural resources.  If the bidder is a partnership or corporation, the department may also reject the bid if the bidder is controlled or managed by any person who would individually be disqualified from bidding under this bill or who has controlled or managed any other partnership or corporation which would otherwise be disqualified.

The department is authorized to enter into harvesting agreements, as opposed to leases, with geoduck harvesters.

The Commissioner of Public Lands is authorized to offer and pay rewards of up to $1,000 for reliable information concerning violations of statutes relating to public lands and natural resources.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The factors which the department can consider in determining the highest responsible bidder are changed.  Some limits are put on the commissioner's discretion to offer and pay rewards for information about violations.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Stan Biles, Department of Natural Resources; Judith Merchant, Department of Fisheries.

House Committee - Testified Against:      Dick Ducharme, Utility Contractors Association; Duke Schaub, Association of General Contractors.

House Committee - Testimony For:    Currently, the department is required to lease to the highest bidder without considering any other factors, including whether the bidder has a record of failing to comply with contracts.  The department needs to be able to reject bids from people who are not compliant with contracts.  The department needs greater access to information about violations of statutes.

House Committee - Testimony Against:      The original bill gives too much discretion to the department to reject bids, and there is no system for appealing the department's decisions.  The department should continue to be required to accept the highest bid without considering other factors.