AN
ACT Relating to improving the business practices associated with selling
valuable materials on trust land; amending RCW 79.01.084, 79.01.116, 79.01.124,
79.01.132, 79.01.160, 79.01.184, 79.01.188, 79.01.204, 79.01.232, 79.01.240,
79.01.340, 79.01.392, 79.01.795, 79.64.030, 79.64.040, and 79.64.050; and
adding new sections to chapter 79.01 RCW.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
79.01.084 and 1982 1st ex.s. c 21 s 150 are each amended to read as follows:
The
commissioner of public lands shall cause to be prepared, and furnish to
applicants, blank forms of applications for the appraisal, transfer, and
purchase of any state lands and the purchase of ((timber, fallen timber,
stone, gravel, or other)) valuable materials situated thereon, and for
the lease of state lands((, which)). These forms shall contain
((such)) instructions ((as will)) to inform and aid ((intending))
applicants ((in making applications)).
Sec.
2. RCW
79.01.116 and 1982 1st ex.s. c 21 s 152 are each amended to read as follows:
(1)
In no case shall any lands granted to the state be offered for sale unless the
same shall have been appraised by the board of natural resources within ninety
days prior to the date fixed for the sale((, and in no case shall any other
state lands, or any materials on any state lands, be offered for sale unless
the same shall have been appraised by the commissioner of public lands within
ninety days prior to the date fixed for the sale)).
(2)
For the sale of valuable materials from state land under this title, if the
board of natural resources is required by law to appraise the sale, the board
must establish a minimum appraisal value that is valid for a period of one
hundred eighty days, or a longer period as may be established by resolution.
The board may reestablish the minimum appraisal value at any time. For any
valuable materials sales that the board is required by law to appraise, the
board may by resolution transfer this authority to the commissioner of public
lands.
(3)
Where the board of natural resources has set a minimum appraisal value for a
valuable materials sale, the commissioner of public lands may set the final
appraisal value of valuable materials for auction, which must be equal to or
greater than the board of natural resources' minimum appraisal value. The
commissioner may also appraise any valuable materials sale not required by law
to be approved by the board of natural resources.
Sec.
3. RCW
79.01.124 and 1982 1st ex.s. c 21 s 154 are each amended to read as follows:
((Timber,
fallen timber, stone, gravel, or other)) Valuable material situated
upon state lands may be sold separate from the land, when in the judgment of
the commissioner of public lands, it is for the best interest of the state so
to sell the same((, and in case the estimated amount of timber on any tract
of state lands, shall exceed one million feet to the quarter section, the
timber shall be sold separate from the land)). When application is made
for the purchase of any valuable materials ((situated upon state
lands, the same inspection and report shall be had as upon an application for
the appraisement and sale of such lands, and)), the commissioner of
public lands shall appraise the value of the valuable materials
((applied for)) if the commissioner determines it is in the best
interest of the state to sell. No ((timber, fallen timber, stone,
gravel, or other)) valuable materials((,)) shall be sold for
less than the appraised value thereof.
Sec.
4. RCW
79.01.132 and 1999 c 51 s 1 are each amended to read as follows:
(1)
When ((any timber, fallen timber, stone, gravel, or other)) valuable
materials on state lands ((is)) are sold separate from the
land, ((it)) they may be sold as a lump sum sale or as a scale
sale. Lump sum sales under five thousand dollars appraised value shall be paid
for in cash on the day of sale. The initial deposit shall be
maintained until all contract obligations of the purchaser are satisfied.
However, all or a portion of the initial deposit may be applied as the final
payment for the valuable materials in the event the department of natural
resources determines that adequate security exists for the performance or
fulfillment of any remaining obligations of the purchaser under the sale
contract.
(2)
The initial deposits required in RCW 79.01.204((,)) may not ((to))
exceed twenty-five percent of the actual or projected purchase price, but in
the case of lump sum sales appraised at over five thousand dollars the
initial deposit may not be less than five thousand dollars, and
shall be made on the day of the sale((, and in the case of)). For
those sales appraised below the amount specified in RCW 79.01.200, the
department of natural resources may require full cash payment on the day of
sale.
(3)
The purchaser shall notify the department of natural resources before any ((timber
is cut and before removal or processing of any valuable materials on the sale
area, at which time)) operation takes place on the sale site. Upon
notification, the department of natural resources ((may)) shall
determine and require((, in the amount determined by the department,))
advance payment for the cutting, removal, or processing((,
and/or cutting)) of ((timber or other)) the valuable
materials, ((or)) or may allow purchasers to guarantee payment by
submitting as adequate security bank letters of credit, payment bonds, ((or))
assignments of savings accounts, assignments of certificates of deposit, or
other methods acceptable to the department as adequate security. The
amount of such advance payments and/or security shall be determined by the
department and at all times equal or exceed the value of timber cut and
other valuable materials processed or removed until paid for. ((The initial
deposit shall be maintained until all contract obligations of the purchaser are
satisfied: PROVIDED HOWEVER, That all or a portion of said initial deposit may
be applied as the final payment for said materials in the event the department
of natural resources determines that adequate security exists for the
performance or fulfillment of any remaining obligations of the purchaser under
the sale contract.))
(4)
In all cases where ((timber, fallen timber, stone, gravel, or other))
valuable materials ((is)) are sold separate from the land,
the same shall revert to the state if not removed from the land within the
period specified in the sale contract. ((Said)) The specified
period shall not exceed five years from the date of the purchase thereof:
PROVIDED, That the specified periods in the sale contract for stone, sand, fill
material, or building stone shall not exceed ((twenty)) thirty
years((: PROVIDED FURTHER, That)).
(5)
In all cases where, in the judgment of the department of natural resources,
the purchaser is acting in good faith and endeavoring to remove such materials,
the department of natural resources may extend the time for the removal thereof
for any period not exceeding ((twenty)) forty years from the date
of purchase for the stone, sand, fill material, or building stone or for
a total of ten years beyond the normal termination date specified in the
original sale contract for all other material((,)). Extension of a
contract is contingent upon payment to the state of a sum to be fixed by
the department of natural resources, based on the estimated loss of income per
acre to the state resulting from the granting of the extension ((but)).
In no event may the extension payment be less than fifty dollars per
extension, plus interest on the unpaid portion of the contract. The interest
rate shall be fixed, from time to time, by rule adopted by the board of natural
resources and shall not be less than six percent per annum. The applicable
rate of interest as fixed at the date of sale ((and)), the
maximum extension payment ((shall be set forth in the contract.)),
and the method for calculating the unpaid portion of the contract upon
which such interest shall be paid by the purchaser shall be set forth in the
contract. The department of natural resources shall pay into the state treasury
all sums received for such extension and the same shall be credited to the fund
to which was credited the original purchase price of the material so sold.
((However,))
(6) A direct sale of valuable materials may be sold to the applicant for
cash at full appraised value without notice or advertising. The board of
natural resources shall, by resolution, establish the value amount of a direct
sale not to exceed twenty thousand dollars in appraised sale value, and
establish procedures to assure that competitive market prices and
accountability will be guaranteed.
(7)
The department may, in addition to any other securities, require a performance
security to guarantee compliance with all contract requirements. The security
is limited to those types listed in subsection (3) of this section. The value
of the performance security will, at all times, equal or exceed the value of
work performed or to be performed by the purchaser.
(8)
Any time that the department of natural resources sells timber by contract that
includes a performance bond, the department shall require the purchaser to
present proof of any and all taxes paid prior to the release of the performance
bond. Within thirty days of payment of taxes due by the timber purchaser, the
county treasurer shall provide certified evidence of taxes paid, clearly
disclosing the sale contract number.
(9)
The provisions of this section apply unless otherwise provided by statute. The
board of natural resources shall establish procedures to protect against cedar
theft and to ensure adequate notice is given for persons interested in
purchasing cedar.
Sec.
5. RCW
79.01.160 and 1959 c 257 s 15 are each amended to read as follows:
All
sales of ((timber)) valuable materials upon state lands shall be
made subject to the right, power, and authority of the commissioner of
public lands to prescribe rules ((and regulations)) or procedures
governing the manner of the sale and removal of the ((timber with a
view to the protection of the nonmerchantable timber against destruction or
injury by fire or from other causes, and)) valuable materials. Such
((rules or regulations)) procedures shall be binding ((upon
the)) when contained within a purchaser's ((of the timber))
contract for valuable materials and ((his)) apply to the
purchaser's successors in interest and shall be enforced by the
commissioner of public lands.
Sec.
6. RCW
79.01.184 and 1997 c 116 s 2 are each amended to read as follows:
When
the department of natural resources shall have decided to sell any state lands
or valuable materials thereon, or with the consent of the board of regents of
the University of Washington, or by legislative directive, shall have decided
to sell any lot, block, tract, or tracts of university lands, or the ((timber,
fallen timber, stone, gravel, or other)) valuable materials thereon,
it shall be the duty of the department to ((forthwith)) fix the date,
place, and time of sale, and no sale shall be had on any day which is a legal
holiday.
The
department shall give notice of the sale by advertisement published not less
than two times during a four week period prior to the time of sale in at least
one newspaper of general circulation in the county in which the whole, or any
part of any lot, block, or tract of land to be sold, or the material upon which
is to be sold is situated, and by ((causing)) posting a copy of
((said)) the notice ((to be posted)) in a conspicuous
place in the department's Olympia office ((and)), the region
headquarters administering such sale, and in the office of the county
auditor of such county((, which)). The notice shall specify the
place, date, and time of sale, the appraised value thereof, and describe
with particularity each parcel of land to be sold, or from which valuable
materials are to be sold((, and)). In the case of valuable
materials sales, the estimated volume ((thereof,)) will
be identified and ((specify that)) the terms of sale will be ((posted))
available in the region headquarters and the department's Olympia
office.
((However,))
The advertisement is for informational purposes only, and under no
circumstances does the information in the notice of sale constitute a warranty
that the purchaser will receive the stated values, volumes, or acreage. All
purchasers are expected to make their own measurements, evaluations, and
appraisals.
A
direct sale of valuable materials may be sold to the applicant for cash at full
appraised value without notice or advertising. The board of natural resources
shall, by resolution, establish the value amount of a direct sale not to exceed
twenty thousand dollars in appraised sale value, and establish procedures to ((assure))
ensure that competitive market prices and accountability will be
guaranteed.
Sec.
7. RCW
79.01.188 and 1982 1st ex.s. c 21 s 157 are each amended to read as follows:
The commissioner of public lands shall cause to be printed a list
of all public lands, or valuable materials thereon, and the appraised
value thereof, that are to be sold ((in the several counties of the state,
said lists)). This list should be published in a pamphlet form to
be issued at least four weeks prior to the date of any sale of the lands or valuable
materials ((enumerated)) thereon((, such lands and materials to be
listed under the name of the county wherein located, in alphabetical order
giving the appraised values, the character of the same, and such other
information as may be of interest to prospective buyers. Said commissioner of
public lands shall cause to be distributed to the auditor of each county in the
state a sufficient number of such lists to supply the demands made upon them
respectively as reported by such auditors. And said county auditors shall keep
the list so furnished in a conspicuous place or receptacle on the counter of
the public office of their respective departments, and, when requested so to
do, shall mail copies of such lists to residents of their counties)). The
list should be organized by county and by alphabetical order, and provide sale
information to prospective buyers. The commissioner of public lands shall
retain for free distribution in his or her office and the ((district))
region offices sufficient copies of ((said lists)) the
pamphlet, to be kept in a conspicuous place ((or receptacle on the
counter of the general office of the commissioner of public lands, and the
districts)), and, when requested so to do, shall mail copies of ((said
lists)) the pamphlet as issued to any requesting applicant ((therefor)).
((Proof of publication of the notice of sale shall be made by affidavit of
the publisher, or person in charge, of the newspaper publishing the same and
proof of posting the notice of sale and the receipt of the lists shall be made
by certificate of the county auditor which shall forthwith be sent to and filed
with the commissioner of public lands.)) The commissioner of public
lands may seek additional means of publishing the information in the pamphlet,
such as on the internet, to increase the number of prospective buyers.
Sec.
8. RCW
79.01.204 and 1982 c 27 s 2 are each amended to read as follows:
Sales
by public auction under this chapter shall be conducted under the direction of
the department of natural resources((, by)) or its authorized
representative ((or by the county auditor of the county in which the sale is
held)). The department or department's representative ((and the
county auditor)) are hereinafter referred to as auctioneers. On or before
the time specified in the notice of sale each bidder shall deposit with the
auctioneer, in cash or by certified check, cashier's check, ((or postal))
money order payable to the order of the department of natural resources, or by
bid guarantee in the form of bid bond acceptable to the department, an amount
equal to the deposit specified in the notice of sale. The deposit shall
include a specified amount of the appraised price for the land or valuable
materials offered for sale, together with any fee required by law for the
issuance of contracts, deeds, or bills of sale. Said deposit may, when prescribed
in notice of sale, be considered an opening bid of an amount not less than the
minimum appraised price established in the notice of sale. The successful
bidder's deposit will be retained by the auctioneer and the difference, if any,
between the deposit and the total amount due shall on the day of the sale be
paid in cash, certified check, cashier's check, bank draft, ((postal))
or money order, ((or by personal check)) made payable to the
department. If a bid bond is used, the share of the total deposit due
guaranteed by the bid bond shall, within ten days of the day of sale, be paid
in cash, certified check, cashier's check, ((or postal)) money order,
or other acceptable payment method payable to the department. Other
deposits, if any, shall be returned to the respective bidders at the conclusion
of each sale. The auctioneer shall deliver to the purchaser a memorandum of
his or her purchase containing a description of the land or materials
purchased, the price bid, and the terms of the sale. The auctioneer shall at
once send to the department the cash, certified check, cashier's check, bank
draft, ((postal)) money order, ((or)) bid guarantee, or other
acceptable payment method received from the purchaser, and a copy of the
memorandum delivered to the purchaser, together with such additional report of
his or her proceedings with reference to such sales as may be required
by the department.
Sec.
9. RCW
79.01.232 and 1927 c 255 s 58 are each amended to read as follows:
When
((timber, fallen timber, stone, gravel, or other)) valuable materials((,
shall have been)) are sold separate from the land and the purchase
price is paid in full, the commissioner of public lands shall cause a
bill of sale, signed by the commissioner and attested by the seal of his or
her office, setting forth the time within which such material shall be
removed, to be issued to the purchaser and to be recorded in the office of the
commissioner of public lands, upon the payment of the fee provided for in this
chapter.
NEW
SECTION. Sec. 10. A
new section is added to chapter 79.01 RCW to read as follows:
For
the purposes of this title, "appraisal" means an estimate of the
market value of land or valuable materials. The estimate must reflect the
value based on market conditions at the time of the sale or transfer offering.
The appraisal must reflect the department of natural resources' best effort to
establish a reasonable market value for the purpose of setting a minimum bid at
auction or transfer. A purchaser of state lands or valuable materials may not
rely upon the appraisal prepared by the department of natural resources for
purposes of deciding whether to make a purchase from the department. All
purchasers are required to make their own independent appraisals.
Sec.
11. RCW
79.01.240 and 1982 1st ex.s. c 21 s 164 are each amended to read as follows:
Any
sale, transfer, or lease of state lands ((made by mistake, or not in
accordance with law, or obtained)) in which the purchaser, transfer
recipient, or lessee obtains the sale or lease by fraud or
misrepresentation((, shall be)) is void, and the contract of
purchase((,)) or lease((, issued thereon,)) shall be of no
effect((, and the holder of such contract, or lease, shall be required to
surrender the same to the department of natural resources, which, except in the
case of fraud on the part of the purchaser, or lessee, shall cause the money
paid on account of such surrendered contract, or lease, to be refunded to the
holder thereof, provided the same has not been paid into the state treasury)).
In the event of fraud, the contract, transferred property, or lease must be
surrendered to the department of natural resources, but the purchaser, transfer
recipient, or lessee may not be refunded any money paid on account of the
surrendered contract, transfer, or lease. In the event that a mistake is
discovered in the sale or lease of state lands, or in the sale of valuable
materials on state lands, the department may take action to correct the mistake
in accordance with RCW 79.01.740 if maintaining the corrected contract,
transfer, or lease is in the best interests of the affected trust or trusts.
Sec.
12. RCW
79.01.340 and 1982 1st ex.s. c 21 s 171 are each amended to read as follows:
Any
county or city or the United States of America or state agency desiring to
locate, establish, and construct a road or street over and across any state
lands of the state of Washington shall by resolution of the board of county
commissioners of such county, or city council or other governing body of such
city, or proper agency of the United States of America, or state agency, cause
to be filed in the office of the department of natural resources a petition for
a right of way for such road or street, setting forth the reasons for the
establishment thereof, accompanied by a duly attested copy of a plat made by
the county or city engineer or proper agency of the United States of America,
or state agency, showing the location of the proposed road or street with
reference to the legal subdivisions, or lots and blocks of the official plat,
or the lands, over and across which such right of way is desired, the amount of
land to be taken and the amount of land remaining in each portion of each legal
subdivision or lot or block bisected by such proposed road or street.
Upon
the filing of such petition and plat the department of natural resources, if
deemed for the best interest of the state to grant the petition, shall cause
the land proposed to be taken to be inspected and shall appraise the value of
((any timber)) the land and valuable materials thereon and notify
the petitioner of such appraised value.
If
there ((be)) are no ((timber)) valuable materials
on the proposed right of way, or upon the payment of the appraised value of ((any
timber)) the land and valuable materials thereon, to the department
of natural resources in cash, or by certified check drawn upon any bank in this
state, or ((postal)) money order, except for all rights of way granted
to the department of natural resources on which the ((timber)) valuable
materials, if any, shall be sold at public auction or by sealed bid, the
department may approve the plat filed with the petition and file and enter the
same in the records of his or her office, and such approval and record
shall constitute a grant of such right of way from the state.
Sec.
13. RCW
79.01.392 and 1961 c 73 s 8 are each amended to read as follows:
Upon
the filing of the plat and field notes, as provided in RCW 79.01.388, the land
applied for and the ((standing timber and/or reproduction)) valuable
materials on the right of way applied for, and the marked danger trees to
be felled off the right of way, if any, and the improvements included in the
right of way applied for, if any, shall be appraised as in the case of an
application to purchase state lands. Upon full payment of the appraised value
of the land applied for, or upon payment of an annual rental when the
department of natural resources deems a rental to be in the best interests of
the state, and upon full payment of the appraised value of the ((standing
timber, reproduction,)) valuable materials and improvements, if any,
the commissioner of public lands shall issue to the applicant a certificate of
the grant of such right of way stating the terms and conditions thereof and
shall enter the same in the abstracts and records in his or her office,
and thereafter any sale or lease of the lands affected by such right of way
shall be subject to the easement of such right of way. Should the corporation,
company, association, individual, state agency, political subdivision of the
state, or the United States of America, securing such right of way ever
abandon the use of the same for a period of sixty months or longer for
the purposes for which it was granted, the right of way shall revert to the
state, or the state's grantee.
Sec.
14. RCW
79.01.795 and 1987 c 126 s 2 are each amended to read as follows:
When
the department finds ((timber)) valuable materials on state land
that ((is)) are damaged by fire, wind, flood, or from any other
cause, it shall determine if the ((sale)) salvage of the damaged
((timber)) valuable materials is in the best interest of the
trust for which the land is held. If ((selling)) salvaging the
((timber)) valuable materials is in the best interest of the
trust, the department shall proceed to offer the ((timber)) valuable
materials for sale ((within a period not to exceed seven months from the
date of first identifying the damaged timber)). The valuable materials,
when offered for sale, must be sold in the most expeditious and efficient
manner as determined by the department. In determining if the sale is in
the best interest of the trust the department shall consider the net value of
the ((timber)) valuable materials and relevant elements of the
physical and social environment. ((If selling the timber is not in the best
interest of the trust, the department shall not offer it for sale until such
time as in the department's determination it is in the trust's best interest.
If
elements of the physical or social environment extend the time required to
prepare the timber for sale beyond seven months from the date of first
identifying the damaged timber, the department shall prepare the timber for
sale at the earliest time practicable.))
Sec.
15. RCW
79.64.030 and 1999 c 279 s 1 are each amended to read as follows:
Funds
in the account ((derived)) from the ((gross proceeds of)) moneys
received from leases, sales, contracts, licenses, permits, easements, and
rights of way issued by the department and affecting school lands, university
lands, scientific school lands, normal school lands, capitol building lands, or
institutional lands shall be pooled and expended by the department solely for
the purpose of defraying the costs and expenses necessarily incurred in
managing and administering all of the trust lands enumerated in this section.
Such funds may be used for similar costs and expenses in managing and
administering other lands managed by the department provided that such
expenditures that have been or may be made on such other lands shall be repaid
to the resource management cost account together with interest at a rate
determined by the board of natural resources.
Costs
and expenses necessarily incurred in managing and administering agricultural
college lands shall not be deducted from proceeds ((derived)) received
from the sale of such lands or from the sale of resources that are part of the
lands. Costs and expenses incurred in managing and administering agricultural
college trust lands shall be funded by appropriation under RCW 79.64.090.
An
accounting shall be made annually of the accrued expenditures from the pooled
trust funds in the account. In the event the accounting determines that
expenditures have been made from moneys ((derived)) received from
trust lands for the benefit of other lands, such expenditure shall be
considered a debt and an encumbrance against the property benefitted, including
property held under chapter 76.12 RCW. The results of the accounting shall be
reported to the legislature at the next regular session. The state treasurer
is authorized, upon request of the department, to transfer funds between the
forest development account and the resource management cost account solely for
purpose of repaying loans pursuant to this section.
Sec.
16. RCW
79.64.040 and 1999 c 279 s 2 are each amended to read as follows:
The
board shall determine the amount deemed necessary in order to achieve the
purposes of this chapter and shall provide by rule for the deduction of this
amount from the ((gross proceeds of)) moneys received from all
leases, sales, contracts, licenses, permits, easements, and rights of way
issued by the department and affecting public lands, provided that no deduction
shall be made from the proceeds from agricultural college lands. Moneys
received as deposits from successful bidders, advance payments, and security
under RCW 79.01.132 and 79.01.204 prior to December 1, 1981, which have not
been subjected to deduction under this section are not subject to deduction
under this section. The deductions authorized under this section shall in no
event exceed twenty-five percent of the ((total sum)) moneys received
by the department in connection with any one transaction pertaining to public
lands other than second class tide and shore lands and the beds of navigable
waters, and fifty percent of the ((total gross proceeds)) moneys
received by the department pertaining to second class tide and shore lands and
the beds of navigable waters.
Sec.
17. RCW
79.64.050 and 1961 c 178 s 5 are each amended to read as follows:
All
deductions from ((gross proceeds)) moneys received made in
accordance with RCW 79.64.040 shall be paid into the account and the balance
shall be paid into the state treasury to the credit of the fund otherwise
entitled to the proceeds.
NEW
SECTION. Sec. 18. A
new section is added to chapter 79.01 RCW to read as follows:
(1)
In the event that the department of natural resources determines that
regulatory requirements or some other circumstance beyond the control of both
the department and the purchaser has made a valuable materials contract wholly
or partially impracticable to perform, the department may cancel any portion of
the contract which could not be performed. In the event of such a
cancellation, the purchaser shall not be liable for the purchase price of any
portions of the contract so canceled. Market price fluctuations shall not
constitute an impracticable situation for valuable materials contracts.
(2)
Alternatively, and notwithstanding any other provision in this title, the
department of natural resources may substitute valuable materials from another
site in exchange for any valuable materials which the department determines
have become impracticable to remove under the original contract. Any
substituted valuable materials must belong to the identical trust involved in
the original contract, and the substitute materials shall be determined by the
department of natural resources to have an appraised value that is not greater
than the valuable materials remaining under the original contract. The
substitute valuable materials and site shall remain subject to all applicable
permitting requirements and the state environmental policy act, chapter 43.21C
RCW, for the activities proposed at that site. In any such substitution, the
value of the materials substituted shall be fixed at the purchase price of the
original contract regardless of subsequent market changes. Consent of the
purchaser shall be required for any substitution under this section.
