BILL REQ. #:  S-0789.3 

Read first time 01/27/2005.   Referred to Committee on Natural Resources, Ocean & Recreation.

     AN ACT Relating to managing state granted lands for multiple benefits and increasing monetary benefits to trust beneficiaries; and adding a new chapter to Title 79 RCW.

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

NEW SECTION.  Sec. 1   The legislature finds that at statehood the federal government granted three million acres of land to the state for the support of education, corrections, social services, and other governmental functions. While large portions of these lands were sold and the proceeds together with interest on these proceeds were used to fund these functions, the state currently owns about two million two hundred thousand acres of these lands, of which about one million five hundred thousand acres are forest lands.
     The legislature further finds that the substantial increase in state population, increased costs of performing these functions, the substantial portions of forest granted lands that are in stages of regeneration, and the declines in prices for fiber, have combined to steadily increase the gap between the state's financial contributions for carrying out these functions and the portion derived from revenues from granted lands.
     The legislature further finds that there is increasing public demand for management of these lands for multiple benefits for which revenues derived from commodity extraction are but one of the benefits provided by these lands. In many cases, such management is consistent with the demands from education, corrections, and social services beneficiaries of the revenues, but in other cases a multiple benefit management approach may not be consistent with the overriding trust obligation to these beneficiaries that court decisions have held the state must meet in managing these lands. This has been the source of the increasing demands by these beneficiaries that the trust corpus be shifted to assets, other than these lands, which may provide a higher rate of financial returns.
     For these reasons, it is the purpose of this chapter to establish a program that over a substantial period of time may fully compensate the trusts for their interest in these lands, and to direct that the lands transferred from granted lands trust status be managed on a multiple benefit basis. It is further the intent of this chapter to declare that these lands are to be held in trust for the benefit of all citizens of the state, and that these lands must be retained in public ownership for all time. Finally, it is the intent of this chapter to initiate a review of the statutory and, if necessary, constitutional, revisions necessary to allow the funds provided for purchase of the trusts' interests in these lands to be invested in such a manner that will allow higher rates of return than has been the recent experience with the permanent funds of these trusts.

NEW SECTION.  Sec. 2   The state granted lands purchase program is created. The program consists of the identification, appraisal, and purchase of the trust interests pursuant to sections 3 through 5 of this act, the management of purchased lands under the provisions of sections 6 and 8 of this act, the declaration of a trust for these lands under section 7 of this act to the benefit of all the people of the state, and a review under section 9 of this act regarding methods to achieve greater financial rates of return to benefit the trusts.

NEW SECTION.  Sec. 3   (1) Beginning no later than December 31, 2012, and by December 31st of each successive even-numbered year through 2012, the department of natural resources shall complete an appraisal of the fair market value of at least twenty-five percent of the acreage of state lands held for the benefit of the following:
     (a) Common school, indemnity and escheat;
     (b) Agricultural school;
     (c) Scientific school;
     (d) University;
     (e) Normal school;
     (f) Charitable, educational, penal, and reformatory institutions; and
     (g) State capitol buildings.
     (2) By December 31, 2006, the department shall develop a prioritized list of parcels suitable for purchase and inclusion in the state granted lands purchase program. A prioritized list must be prepared for each category of designated trust lands specified in subsection (1) of this section. The lists must be revised to delete parcels purchased and include additional parcels sufficient so that the aggregate value of parcels on the list is at least twice that of the projected purchases in the next succeeding biennium directed under sections 4 and 5 of this act. The department shall prioritize parcels for each category of designated trust by considering the parcels most suitable for management for maximizing multiple benefits from uses of the lands without placing as the highest priority the monetized economic returns that may be obtained in the near term from the lands. In selecting parcels for inclusion on the list and in establishing a priority order the department should consider the opportunities for managing for such benefits as: Fish and wildlife habitat and production; improving forest health conditions; satisfying diverse recreational demands in the region; protecting drinking water supplies of nearby communities; mitigating storm water flows; and protecting forest stands with special biological diversity, geological value, or scenic value.

NEW SECTION.  Sec. 4   (1) Beginning July 1, 2007, from appropriations authorized for this specific purpose in the omnibus appropriations act, the department shall execute purchase agreements for parcels on the list of common school trust parcels authorized in section 3(2) of this act that in aggregate value total the amounts appropriated for such purchases. It is the intent of this chapter that future biennial appropriations be made in substantially similar amounts through successive biennia and in such amounts that all lands held in common school trust status may be purchased by June 30, 2057.
     (2) The purchase funds shall be deposited in the common school construction account, or as directed in the omnibus appropriations act. No deduction shall be made for the resource management cost account under RCW 79.64.040. The department may recover reasonable costs to implement the purchase transactions from the amounts appropriated for the purchase program.

NEW SECTION.  Sec. 5   (1) Beginning July 1, 2007, from appropriations authorized for this specific purpose in the omnibus appropriations act, the department shall execute purchase agreements for parcels on the lists for the following designated trusts:
     (a) Agricultural school;
     (b) Scientific school;
     (c) University;
     (d) Normal school;
     (e) Charitable, educational, penal, and reformatory institutions; and
     (f) State capitol buildings.
     (2) The purchase agreements executed shall in the aggregate value total the amounts appropriated for purchase of parcels from each designated trust. It is the intent of this chapter that future biennial appropriations be made in substantially similar amounts through successive biennia and in such amounts that the trust interest in all lands held in each of the specified trusts may be purchased by June 30, 2027.
     (3) The purchase funds shall be deposited in the permanents fund for each trust created in chapter 43.79 RCW, or as directed in the omnibus appropriations act. No deduction shall be made for the resource management cost account under RCW 79.64.040. The department may recover reasonable costs to implement the purchase transactions from the amounts appropriated for the purchase program.

NEW SECTION.  Sec. 6   (1) The lands included in the state granted lands purchase program must be managed by the department of natural resources under existing management statutes, policies, and agreements to the extent not inconsistent with the management criteria of this section. The valuable materials thereon may be sold in the same manner and for the same purposes as is authorized for state lands, and charges may be made for recreational or other uses of the lands.
     (2) The lands must be managed with all the various renewable resources in mind so that they are utilized in the combination that will best meet the needs of all of the state's citizens. The department shall manage these lands with the entire land base in mind so that some resources or services may be emphasized on parts of the lands and some land may be used for less than all of the resources or services. The department should seek a harmonious and coordinated management of the various resources of the lands, each with the other, without impairment of the productivity of the land, with consideration being given to the relative values of the various resources, and not necessarily the combination of uses that will give the greatest dollar return or the greatest unit output. Among the values and uses that should be considered by the department in managing the multiple use lands are: The economic and environmental aspects of various systems of renewable resource management, including silviculture and protection of forest resources; providing for outdoor recreation, range, timber, watershed, wildlife, and fish; providing for a diversity of plant and animal communities; and providing for protection of streams, streambanks, shorelines, lakes, wetlands, and other bodies of water from detrimental changes in chemical, biological, or hydrological characteristics.

NEW SECTION.  Sec. 7   The legislature declares that state lands in the state granted lands purchase program are held in trust for all the people of the state for all time. These lands shall not be conveyed from state ownership except as specifically authorized by an act of the legislature.

NEW SECTION.  Sec. 8   The state granted lands purchase program management account is created in the state treasury. All receipts from revenues derived from lands in the program and other moneys appropriated to the account or received by the state for the benefit of the lands must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used for all purposes related to management of lands included in the program.

NEW SECTION.  Sec. 9   (1) The future of the statehood trusts review commission is established. The governor shall chair the commission and shall appoint members that reflect the interests of the beneficiaries of the trusts. The commission also includes the following as members:
     (a) The state treasurer;
     (b) The chair of the state investment board;
     (c) Two members of the senate, one from each major caucus, selected by the president of the senate;
     (d) Two members of the house of representatives, one from each major caucus, selected by the speaker of the house of representatives; and
     (e) The commissioner of public lands.
     (2) The commission shall review the history of financial management of the permanent funds created for the support of the designated trusts listed in section 3 of this act, and the investment objectives and policies of these funds as well as other public funds managed by the state. The commission shall determine if modifications in the investment objectives and policies of these permanent funds, including changes in the assets held in the funds, may provide for greater rates of return while protecting the principal of the funds. Where alternative investment approaches are identified, the commission shall analyze necessary administrative, statutory, and constitutional revisions that may be required to implement the alternative approaches.
     (3) The commission shall include its analyses and recommendations in a report to the appropriate fiscal and policy committees of the senate and house of representatives by December 31, 2007.

NEW SECTION.  Sec. 10   Sections 1 through 9 of this act constitute a new chapter in Title 79 RCW.