by Matt Comisky
AFRC Washington State Manager
This is Part 1 of a three-part series about the Trust Land Transfer program in Washington State. In this series we will cover three basic questions. The first question will be “what is trust land transfer?” In our following post, we will explore “why should you or anyone care?” And in our third post we explore “what can we do about it?” Let’s get started.
What is Trust Land Transfer or TLT?
Trust Land Transfer Program or TLT as most people refer to it, is a Washington State Department of Natural Resources (DNR) managed program which began in the late 1980’s. The program involves DNR staff identifying (prior to each legislative biennium) certain trust lands that which they view as underperforming as revenue generators due to their difficulty to manage, but otherwise “provide greater social benefit through non-revenue generating activities.”
The list of candidate trust lands is reviewed by DNR staff, other agencies and the Commissioner of Public Lands. Staff presents the list to the Board of Natural Resources for informational purposes and once approved by the Commissioner it is forwarded to the Governor’s office. The list is submitted to the legislature, and approved lands are transferred out of the trust land base to conservation status under DNR management or other public agencies to be managed for non-revenue, generally conservation and recreational, purposes. The transfer package approved by the Commissioner, Governor, and Legislature is “authorized and funded as a section in the Capital Budget Bill.” The legislature funds the program by authorizing the transfer and providing an appropriation for the value of the land (which goes to the Real Property Replacement Account) and timber (which goes to the Common School Construction Account).
As the biennium proceeds individual transactions are brought before the Board of Natural Resources for approval of each transfer. In some situations, where the proposed TLT parcels are not currently Common School Trust, an inter-trust exchange must first take place. Typically, in these situations the parcels proposed for transfer are County trust lands. These lands must first be exchanged for Common School lands of similar value. Often the acres and timber age classes are different, but the dollar values are roughly the same. This creates potential issues of intergenerational equities, undivided loyalty, and erosion of the corpus of the trust. All issues we will explain in Part 2 of this series.
Upon BNR approval of the transfers, and inter-trust exchanges if needed, DNR staff completes the necessary work to complete the real estate transactions. The appropriated funds are then distributed to the two accounts based on the values identified in the appraisal presented to the Board of Natural Resources.
One caveat to the program is the expectation that the parcels selected have an 80% “aggregate timber value” with 20% of the total value in the land. This is to assure the maximum amount of the appropriation is deposited into the Common School Construction Account. This does however create challenges when some parcels which are perfect candidates for this program have a lower timber to land value ratio. Often these parcels are viewed as unsuitable for the program and they remain in trust management status.
This covers the TLT program mechanics at a high level. While there is guidance in the selection of proposed parcels, there traditionally has been very little oversight of the true need to transfer parcels and whether DNR is adhering to its trust mandates. These mandates include its fiduciary obligations to generate revenue, undivided loyalty, inter-generational equities and to protect the corpus of the trust. In Part 2 we will explore some of these issues in our effort to answer the question “why you should care?”
