BILL REQ. #:  S-4425.1 

Read first time 02/02/10.   Referred to Committee on Natural Resources, Ocean & Recreation.

     AN ACT Relating to the forestry riparian easement program; amending RCW 76.13.120 and 76.13.140; creating a new section; and prescribing penalties.

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

NEW SECTION.  Sec. 1   The legislature recognizes that well managed forest lands are an important part of the ecosystem that help to provide fish and wildlife habitat, clean water, and other environmental amenities. Therefore, it is the intent of the legislature that the forestry riparian easement program be utilized to assist small forest landowners who have been financially impacted as a direct result of adoption of forest practices rules consistent with the forests and fish report, as defined in RCW 76.09.020, in order to facilitate ongoing forest land ownership.

Sec. 2   RCW 76.13.120 and 2004 c 102 s 1 are each amended to read as follows:
     (1) The legislature finds that the state should acquire easements along riparian and other sensitive aquatic areas from small forest landowners willing to sell or donate such easements to the state provided that the state will not be required to acquire such easements if they are subject to unacceptable liabilities and that the state may not acquire such easements if:
     (a) The harvest limitations are or would be a result of the requirements of the federal clean water act or the requirements of the shoreline management act established in chapter 90.58 RCW;
     (b) Such easement is eligible for compensation under the riparian open space program established in RCW 76.09.040 or the Washington wildlife and recreation program whose primary purpose is to acquire habitat conservation and outdoor recreation land as specified in chapter 79A.15 RCW;
     (c) Any parcel subject to the easement has not received a current use classification as specified under chapter 84.34 RCW; and
     (d) Any parcel subject to the easement qualifies for alternative management plans as specified under RCW 76.13.130. The legislature therefore establishes a forestry riparian easement program.
     (2) The definitions in this subsection apply throughout this section and RCW 76.13.100 and 76.13.110 unless the context clearly requires otherwise.
     (a) "Forestry riparian easement" means an easement covering qualifying timber granted voluntarily to the state by a small forest landowner.
     (b) "Qualifying timber" means those trees along riparian and other sensitive aquatic areas covered by a forest practices application that the small forest landowner is required to leave unharvested under the rules adopted under RCW 76.09.055 and 76.09.370 or that is made uneconomic to harvest by those rules, and for which the small landowner is willing to grant the state a forestry riparian easement. "Qualifying timber" is timber within or bordering a commercially reasonable harvest unit as determined under rules adopted by the forest practices board, or timber for which an approved forest practices application for timber harvest cannot be obtained because of restrictions under the forest practices rules.
     (c) "Forest land" has the same meaning as the term "timber land" as defined in RCW 84.34.020 and shall not qualify for alternative management plans as specified under RCW 76.13.130.
     (d) "Small forest landowner" means: (i) A landowner ((meeting all of the following characteristics: (i) A forest landowner as defined in RCW 76.09.020 whose interest in the land and timber is in fee or)) who owns no more than one thousand acres of forest land in the state and who has rights to the timber to be included in the forestry riparian easement that extend at least fifty years from the date the forest practices application associated with the easement is submitted; and (ii) an entity that has harvested from its own lands in this state during the three years prior to the year of application an average timber volume that would qualify the owner as a small harvester under RCW 84.33.035((; and (iii) an entity that certifies at the time of application that it does not expect to harvest from its own lands more than the volume allowed by RCW 84.33.035 during the ten years following application. If a landowner's prior three-year average harvest exceeds the limit of RCW 84.33.035, or the landowner expects to exceed this limit during the ten years following application, and that landowner establishes to the department of natural resources' reasonable satisfaction that the harvest limits were or will be exceeded to raise funds to pay estate taxes or equally compelling and unexpected obligations such as court-ordered judgments or extraordinary medical expenses, the landowner shall be deemed to be a small forest landowner)).
     For purposes of determining whether a person qualifies as a small forest landowner, the small forest landowner office, created in RCW 76.13.110, shall evaluate the landowner under this definition, pursuant to RCW 76.13.160((, as of the date that the forest practices application is submitted or the date the landowner notifies the department that the harvest is to begin with which the forestry riparian easement is associated)). A small forest landowner must have had legal ownership of the parcel subject to the easement prior to adoption of forest practices rules consistent with the forests and fish report as defined in RCW 76.09.020 and can include an individual, partnership, corporate, or other nongovernmental legal entity((. If a landowner grants timber rights to another entity for less than five years, the landowner may still qualify as a small forest landowner under this section)), provided that the partnership, corporate, or other nongovernmental legal entity was established for the purposes of long-term commercial timber production. A small forest landowner shall not have any outstanding violations of the forest practices act as specified in chapter 76.09 RCW, shall not be in default on a financial obligation to an agency of the state including noncompliance with a child support order under RCW 74.20A.320, and shall not have received compensation under the forestry riparian easement program in the previous three biennia. If a landowner is unable to obtain an approved forest practices application for timber harvest for any of his or her land because of restrictions under the forest practices rules, the landowner may still qualify as a small forest landowner under this section.
     (d) "Completion of harvest" means that the trees have been harvested from an area and that further entry into that area by mechanized logging or slash treating equipment is not expected.
     (3) The department of natural resources is authorized and directed to accept and hold in the name of the state of Washington forestry riparian easements granted by small forest landowners covering qualifying timber and to pay compensation to such landowners in accordance with subsections (6) ((and (7))) through (9) of this section. The department of natural resources may not transfer the easements to any entity other than another state agency.
     (4) Forestry riparian easements shall be effective for fifty years from the date the forest practices application associated with the qualifying timber is submitted to the department of natural resources, unless the easement is terminated earlier by the department of natural resources voluntarily, based on a determination that termination is in the best interest of the state, or under the terms of a termination clause in the easement. For parcels subject to the easement, if at any time during the term of the easement a small forest landowner changes the current use classification as specified in chapter 84.34 RCW or any information contained in the application is determined by the small forest landowner office to be false, the small forest landowner shall, in addition to penalties incurred in RCW 84.34.070, refund the total compensation received for the easement plus, a twenty percent penalty. This refund and penalty shall be considered a lien upon the land as specified in RCW 84.34.090.
     (5) Forestry riparian easements shall be restrictive only, and shall preserve all lawful uses of the easement premises by the landowner that are consistent with the terms of the easement and the requirement to protect riparian functions during the term of the easement, subject to the restriction that the leave trees required by the rules to be left on the easement premises may not be cut during the term of the easement. No right of public access to or across, or any public use of the easement premises is created by this statute or by the easement. Forestry riparian easements shall not be deemed to trigger the compensating tax of or otherwise disqualify land from being taxed under chapter 84.33 or 84.34 RCW.
     (6) Beginning in calendar year 2010, the small forest landowner office as created in RCW 76.13.110 shall solicit applications for the forestry riparian easement program. For applications that have been previously submitted to the small forest landowner office but have not received funding, the small forest landowner office shall obtain from the landowner any supplemental information necessary to verify the landowners' qualifications to participate in the program. The date upon which the supplemental information is received shall constitute the date of application. The small forest landowner office, along with the small forest landowner advisory committee, shall prioritize submitted applications: (a) First in descending order based on the ratio of qualifying timber impacted as a direct result of adoption of forest practices rules consistent with the forest and fish report, as defined in RCW 76.09.020, to the total merchantable stand of timber on the parcels subject to the easement; and (b) second in descending order according to development potential. In October of every even-numbered year, the small forest landowner office shall submit the prioritized list of applications to the governor, the office of financial management, and the legislature for funding consideration in the biennial budget.
     (7) Upon application of a small forest landowner for a riparian easement that is associated with a forest practices application and the landowner's marking of the qualifying timber on the qualifying lands, the small forest landowner office shall determine the compensation to be offered to the small forest landowner as provided for in this section and final compensation must be based on the market value of timber at the time of harvest. The small forest landowner office shall also determine the compensation to be offered to a small forest landowner for qualifying timber for which an approved forest practices application for timber harvest cannot be obtained because of restrictions under the forest practices rules and final compensation must be based on the market value of timber at the time the application receives funding. The legislature recognizes that there is not readily available market transaction evidence of value for easements of this nature, and thus establishes the following methodology to ascertain the value for forestry riparian easements. Values so determined shall not be considered competent evidence of value for any other purpose.
     The small forest landowner office shall establish the volume of the qualifying timber. Based on that volume and using data obtained or maintained by the department of revenue under RCW 84.33.074 and 84.33.091, the small forest landowner office shall attempt to determine the fair market value of the qualifying timber as of the ((date the forest practices application associated with the qualifying timber was submitted or the date the landowner notifies the department that the harvest is to begin)) dates specified in this section. Removal of any qualifying timber before the expiration of the easement must be in accordance with the forest practices rules and the terms of the easement. There shall be no reduction in compensation for reentry.
     (((7))) (8) Except as provided in subsection (((8))) (9) of this section, the small forest landowner office shall, subject to available funding, offer compensation to the small forest landowner in the amount of fifty percent of the value determined in subsection (((6))) (7) of this section((, plus the compliance and reimbursement costs as determined in accordance with RCW 76.13.140)). If the landowner accepts the offer for qualifying timber that will be harvested pursuant to an approved forest practices application, the department of natural resources shall pay the compensation promptly upon (a) completion of harvest in the area covered by the forestry riparian easement; (b) verification that there has been compliance with the rules requiring leave trees in the easement area; and (c) execution and delivery of the easement to the department of natural resources. If the landowner accepts the offer for qualifying timber for which an approved forest practices application for timber harvest cannot be obtained because of restrictions under the forest practices rules, the department of natural resources shall pay the compensation promptly upon (i) verification that there has been compliance with the rules requiring leave trees in the easement area; and (ii) execution and delivery of the easement to the department of natural resources. Upon donation or payment of compensation, the department of natural resources may record the easement.
     (((8) For approved forest practices applications where the regulatory impact is greater than the average percentage impact for all small landowners as determined by the department of natural resources analysis under the regulatory fairness act, chapter 19.85 RCW, the compensation offered will be increased to one hundred percent for that portion of the regulatory impact that is in excess of the average. Regulatory impact includes trees left in buffers, special management zones, and those rendered uneconomic to harvest by these rules. A separate average or high impact regulatory threshold shall be established for western and eastern Washington. Criteria for these measurements and payments shall be established by the small forest landowner office.))
     (9) Applications that are not funded in the biennial budget shall be reconsidered and reprioritized by the small forest landowner office and the small forest landowner advisory committee for the following biennium.
     (10) An application for inclusion in the forestry riparian easement program shall include an affidavit signed by the small forest landowner that includes a list of all parcels in the state owned by the landowner that have received a current use classification as specified in chapter 84.34 RCW and the total acres within each parcel.
     (11) The forest practices board shall adopt rules under the administrative procedure act, chapter 34.05 RCW, to implement the forestry riparian easement program, including the following:
     (a) A standard version or versions of all documents necessary or advisable to create the forestry riparian easements as provided for in this section;
     (b) Standards for descriptions of the easement premises with a degree of precision that is reasonable in relation to the values involved;
     (c) Methods and standards for cruises and valuation of forestry riparian easements for purposes of establishing the compensation. The department of natural resources shall perform the timber cruises of forestry riparian easements required under this chapter and chapter 76.09 RCW. Any rules concerning the methods and standards for valuations of forestry riparian easements shall apply only to the department of natural resources, small forest landowners, and the small forest landowner office;
     (d) A method to determine that a forest practices application involves a commercially reasonable harvest, and adopt criteria for entering into a forest riparian easement where a commercially reasonable harvest is not possible or a forest practices application that has been submitted cannot be approved because of restrictions under the forest practices rules;
     (e) A method to address blowdown of qualified timber falling outside the easement premises;
     (f) A formula for sharing of proceeds in relation to the acquisition of qualified timber covered by an easement through the exercise or threats of eminent domain by a federal or state agency with eminent domain authority, based on the present value of the department of natural resources' and the landowner's relative interests in the qualified timber;
     (g) ((High impact regulatory thresholds;
     (h))) A method to determine timber that is qualifying timber because it is rendered uneconomic to harvest by the rules adopted under RCW 76.09.055 and 76.09.370; and
     (((i))) (h) A method for internal department of natural resources review of small forest landowner office compensation decisions under subsection (((7))) (8) of this section.

Sec. 3   RCW 76.13.140 and 2002 c 120 s 3 are each amended to read as follows:
     In order to assist small forest landowners to remain economically viable, the legislature intends that the small forest landowners be able to net fifty percent of the value of the trees left in the buffer areas. ((The amount of compensation offered in RCW 76.13.120 shall also include the compliance costs for participation in the riparian easement program. For purposes of this section, "compliance costs" includes the cost of preparing and recording the easement, and any business and occupation tax and real estate excise tax imposed because of entering into the easement.)) The office may contract with private consultants that the office finds qualified to perform timber cruises of forestry riparian easements or to lay out streamside buffers and comply with other forest and fish regulatory requirements related to the forest riparian easement program. ((The department shall reimburse small forest landowners for the actual costs incurred for laying out the streamside buffers and marking the qualifying timber once a contract has been executed for the forestry riparian easement program. Reimbursement is subject to the work being acceptable to the department. The small forest landowner office shall determine how the reimbursement costs will be calculated.))