HOUSE BILL REPORT

SB 5502

BYSenators Amondson, Kreidler, Smith and Owen

Revising advertising and sale requirements for valuable materials.

House Committe on Natural Resources & Parks

Majority Report:  Do pass.  (8)

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

House Staff:Jean Kelley McElroy (786-7196)

AS PASSED HOUSE APRIL 6, 1989

BACKGROUND:

The Department of Natural Resources (DNR) has the responsibility to manage state-owned trust and grant lands and generate income from the lands to support trust beneficiaries. One of the ways the department generates income is by the sale of valuable materials from those lands.  These sales vary in size from small sales on areas that can be cleared in one or two days to sales on areas that take much longer to clear.

Currently, DNR is required to publish notice once a week for the four weeks immediately preceding the sale in a paper of general circulation in the county in which the sale is to be held.  On occasion, sales have had to be postponed and readvertised because the newspaper has failed to meet its advertising schedule.  This has resulted in a loss of income to the trust account due to readvertising a sale for the same tract of land and due to increased administration costs.

DNR can currently require lump sum cash payment only for sales of materials valued at less than $5,000.  For all other sales, the purchaser can request an installment payment plan.  Due to changing values of materials and improved removal methods, areas with materials valued at well over $5,000 can be cleared in one or two days.  In fact, for these reasons, DNR considers sales of up to $100,000 small sales.  Further, DNR is required to receive full value for materials sold off trust lands.  The $5,000 limit can make it difficult for DNR to ensure that it receives full value for these materials.

DNR is currently authorized to sell valuable materials appraised at $20,000 or less at a public auction. The auction must be advertised 10 days prior to the sale.  This procedure is well suited to small sales.

SUMMARY:

Payment requirements are changed to allow the Department of Natural Resources to require full cash payment on the day of sale for sales of materials appraised at $100,000 or less, up from the current limit of $20,000.

The limit on the appraised value of materials which may be sold at public auction is raised from $20,000 or less to $100,000 or less.  Advertising requirements for such auctions are changed to require publication not less than 10 days before the auction rather than exactly 10 days before the auction.

The advertising requirements for sales of materials (other than sales at public auction) are changed from once a week for the four weeks immediately preceding the sale to not less than two times during the four weeks immediately preceding the sale.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Pat McElroy, Deputy Director, Department of Natural Resources.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The Department of Natural Resources and prospective buyers have been inconvenienced, and additional costs have been incurred, because sales have been cancelled due to newspapers not meeting their advertising schedules.  Allowing the department to demand full payment in advance for sales of $100,000 or less will help to prevent defaults on installment payment plans, and will aid the department in collecting full value for the materials sold.

House Committee - Testimony Against:      None Presented.