BILL REQ. #:  S-1184.2 

Read first time 02/10/2003.   Referred to Committee on Natural Resources, Energy & Water.

     AN ACT Relating to sales of valuable materials; amending RCW 79.01.184 and 79.01.200; and reenacting and amending RCW 79.01.132.

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

Sec. 1   RCW 79.01.132 and 2001 c 250 s 4 and 2001 c 187 s 1 are each reenacted and amended to read as follows:
     (1) When valuable materials on state lands are sold separate from the land, 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 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. 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 operation takes place on the sale site. Upon notification, the department of natural resources shall determine and require advance payment for the cutting, removal, or processing of the valuable materials, or may allow purchasers to guarantee payment by submitting as adequate security bank letters of credit, payment bonds, 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.
     (4) In all cases where valuable materials 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. 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 thirty years.
     (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 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. 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, the maximum extension payment, 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.
     (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)) one hundred 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 property 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 property 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.
     (10) With respect to public land timber sales, the harvest unit may not be larger than sixty acres and the approval of the sale by the board of natural resources is not required.

Sec. 2   RCW 79.01.184 and 2001 c 250 s 6 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 valuable materials thereon, it shall be the duty of the department to 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 posting a copy of the notice in a conspicuous place in the department's Olympia office, the region headquarters administering such sale, and in the office of the county auditor of such county. 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. In the case of valuable materials sales, the estimated volume will be identified and the terms of sale will be available in the region headquarters and the department's Olympia office.
      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)) one hundred thousand dollars in appraised sale value, and establish procedures to ensure that competitive market prices and accountability will be guaranteed.
     With respect to public land timber sales, the harvest unit may not be larger than sixty acres and the approval of the sale by the board of natural resources is not required.

Sec. 3   RCW 79.01.200 and 1989 c 148 s 3 are each amended to read as follows:
     All sales of land shall be at public auction, and all sales of valuable materials shall be at public auction or by sealed bid to the highest bidder, on the terms prescribed by law and as specified in the notice provided, and no land or materials shall be sold for less than its appraised value: PROVIDED, That on public lands granted to the state for educational purposes sealed bids may be accepted for sales of timber or stone only: PROVIDED FURTHER, That when valuable material has been appraised at an amount not exceeding ((one)) five hundred thousand dollars, the department of natural resources, when authorized by the board of natural resources, may arrange for the sale at public auction of said valuable material and for its removal under such terms and conditions as the department may prescribe, after the department shall have caused to be published not less than ten days prior to sale a notice of such sale in a newspaper of general circulation located nearest to property to be sold. This section does not apply to direct sales authorized in RCW 79.01.184.
     With respect to public land timber sales, the harvest unit may not be larger than sixty acres and the approval of the sale by the board of natural resources is not required.