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HomeMy WebLinkAbout02-26-19 Public Comment - T. Tousignant - Limestone West Logging Project & Opposition to HB441From: Chris Mehl To: Agenda Subject: FW: Limestone West Logging Project & Oppposition to HB441 Date: Tuesday, February 26, 2019 11:37:33 AM Attachments: Timber Conservation License Update February 26, 2019.pdf Brenda, Please forward email and attachment to commissioners and staff you think relevant. I don't expect that the city commission would want to take action so am just passing along. Please include this part of my email in your note to all, thanks. Chris Mehl Bozeman Deputy Mayor cmehl@bozeman.net 406.581.4992 ________________________________________ From: Tim Tousignant [ttousignant@outlook.com] Sent: Tuesday, February 26, 2019 10:37 AM To: Chris Mehl Cc: Brad Webb Subject: Limestone West Logging Project & Oppposition to HB441 Hi Chris, Hope all is well with you. I am again reaching out to you regarding the Limestone West logging project. I want to update you on the status of the project and ask for your assistance. Legal Action Update On January 22, 2019 the Land Board Voted to proceed with the logging of Limestone West. Included in the project is the right for SOGF to bid competitively for a conservation license which would defer the logging for 25 years. For that SOGF would need to pay 100% stumpage value. * First, there is a disagreement regarding the term of the license. By law, the DNRC can establish a Conservation License term between 1–99 years. For the Limestone West Timber project, the DNRC established a 25-year term for the Conservation License for the same stand of timber that will take 90– 100 years to regrow after being logged. * To preserve the forest for only 25 out of 100 years, DNRC is requiring the Conservation Licensee to pay 100% stumpage value. If a logger paid the exact same value, it would have purchased approximately 90-100 years’ worth of the timber resource. SOGF is being required to pay 100% of the price that a logger would pay for only 25% of the benefit that a logger would receive if it won the auction. This handicaps SOGF’s ability to bid and ultimately hurts the state trust beneficiaries because DNRC is not offering a viable Conservation License alternative to attract bidders and increase competition in the Limestone West timber sale auction. * Second, there is disagreement as to the method of payment of the Conservation License. SOGF points out that in 1999 when the Conservation License statute was passed, then-Director of the DNRC, Bud Clinch, testified that the holder of a Conservation License should pay the trust beneficiaries the lost interest income for the term of the Conservation License rather than the stumpage value, seeing that the timber would remain a standing asset. A payment of lost interest income fully compensates the trust beneficiaries for a delay in receiving the full stumpage value of the timber. At the end of the license period, the state still retains the timber, which it could auction should it choose to do so. * The DNRC Auction for Limestone West is scheduled to be complete on March 5, 2019. * SOGF has asked the court for a preliminary injunction to stop the auction until our case can be heard. The judge informed us and the DNRC at a hearing last week that she will rule on that request prior to March 5th. Legislative Update If we have an uphill climb to modify the terms of the DNRC's conservation license, our task has become more difficult with the introduction of HB441 by Kerry White, the chairman of the House Natural Resource committee. * HB441 essentially eliminates the Conservation License Statute effective immediately upon passing the house, senate and governor's signature. * Odds are the house will pass the legislation and are voting on it this week. * We may have more of a chance stopping the bill in the Senate but that is questionable. * We feel our best opportunity is getting the Governor to veto the bill assuming that the house or the senate will not have enough votes to override the governor's veto. * Our legislative efforts are targeted at the Senate and the Governor. We need help from the City of Bozeman We feel it would help our efforts with the senate and the governor if the city were to oppose HB441. * Here are the reasons that we are putting forth with legislators and governor to oppose HB441: * Including the Conservation License option in a timber sale only increases competition, potentially resulting in more revenue for school beneficiaries. Eliminating the license is essentially subsidizing a special interest above a free market, which decreases potential revenue to the trust. * DNRC Director John Tubbs himself testified in opposition to this bill before the House Natural Resources Committee, stating that the Conservation License portion of the current law should be given a chance to work and has the potential to increase competition and revenue from timber sales for the state trusts. * Some fear the Conservation License will drive logging from Montana. Facts show this simply isn’t true. In the twenty years during which the Conservation License option has been available, Conservation Licenses have been pursued only twice, most recently for the proposed Limestone West timber sale. * Some argue that the Conservation License was intended to be used for small parcels of land and not entire logging projects. This also is not true. The statute clearly states the holder of a conservation license can apply it to all or a portion of a logging project. * Finally, the conservation license provides citizens and organizations an opportunity to bid for retaining the conservation values of land in a competitive process that maximizes the revenue earned by the school trusts, and it is in the long-term best interests of the citizens of Montana to preserve this alternative to logging in the statute. I am also attaching a copy of an update document that we prepared for house legislators and will provide you with additional information. Chris, I know this is a lot of information, but quite frankly if we cannot stop this bill in the legislature, our court case will be irrelevant, and the logging of Limestone West will proceed. Do you feel it is possible to have the city oppose HB441? I would welcome the opportunity to discuss any and all aspects of this request. Tim Tousignant 847.914.9659 OPPOSE HB441 WHICH REPEALS THE TIMBER CONSERVATION LICENSE, A VITAL TOOL FOR MANAGING STATE TRUST LANDS AND MAXIMIZING INCOME FOR SCHOOL TRUST BENEFICIARIES Q: What is a Timber Conservation License? In 1999, the DNRC proposed the Timber Conservation License (TCL) statute backed by the logging industry to address the logging industry’s concern that the DNRC was negotiating the deferral of Timber Sales with adjacent property owners. The TCL statute offers individuals or organizations the opportunity to defer a logging project for a term set by the DNRC. Conservation Licensees must compete with logging companies in the DNRC’s bidding process and place the highest bid to activate the license. Licensees cannot modify or make changes to the acreage/timber during the term of the license, and the DNRC retains ownership of the land and timber as well as the rights to conduct non-logging forest management activities on the area included in the license. Q: Why should you oppose HB441? • DNRC is tasked with maximizing the benefits for the School Trust Beneficiaries through its management of Montana’s State Trust Lands. • Including the Conservation License option in a timber sale increases competition, potentially resulting in more revenue for school trust beneficiaries. Eliminating the license is essentially subsidizing a special interest above a free market, decreasing potential revenue to the trust. • DNRC Director John Tubbs testified in opposition to this bill before the House Natural Resources Committee, stating that the Conservation License statute should be given a chance to work for its potential to increase competition and revenue from timber sales for the state land trust. • Some are concerned that the Conservation License might drive logging from Montana. Facts show this has not occurred: In the 20 years during which the Conservation License option has been available, it has only been used twice, presently for the first time on an entire timber sale—Limestone West. • Some argue that the Conservation License was intended to be used for small parcels of land because its first use was for a 10-acre buffer around a residence. However, the statute clearly states the holder of a Conservation License can apply it to all or a portion of a logging project. • The Conservation License provides citizens and organizations an opportunity to bid for retaining the conservation values of land in a competitive process that maximizes revenue for school trusts. If a Conservation License issues, the state retains the timber for sale again after the license expires. The state gains revenue from selling the Conservation License and loses nothing because the trees remain available for sale in the future. It is in the long-term best interests of the citizens of Montana to retain this alternative to logging. Q: Is the implementation of a Timber Conservation License like a lawsuit halting a timber sale? No, because the Conservation Licensee must be deemed the highest bidder by the DNRC to prevail, with proceeds going to the School Land Trust just like proceeds from a timber sale would. Q: Does a Winning Bid by a Timber Conservation Licensee Risk Forest Health? The Land Board voted on January 22, 2019 to include the Conservation License in the Limestone West Timber Sale. During the meeting, DNRC Director Tubbs informed the board that the risk of infestation and fire on School Trust Lands is a given in their day-to-day work. Tubbs stated that DNRC accepts those risks a normal part of their management of the School Trust Lands that would not be altered by putting a Conservation License in place. Q: Why is there currently a lawsuit in Gallatin County regarding the Limestone West Timber Sale? Save Our Gallatin Front (SOGF), a local community organization that applied for the Conservation License, has a number of concerns with the DNRC’s application of the Conservation License and they are asking the court to level the playing field between logging bidders and Conservation License bidders: • First, there is a disagreement regarding the term of the license. By law, the DNRC can establish a Conservation License term between 1–99 years. For the Limestone West Timber project, the DNRC established a 25-year term for the Conservation License for the same stand of timber that will take 90– 100 years to regrow after being logged. • To preserve the forest for only 25 out of 100 years, DNRC is requiring the Conservation Licensee to pay 100% stumpage value. If a logger paid the exact same value, it would have purchased approximately 90-100 years’ worth of the timber resource. SOGF is being required to pay 100% of the price that a logger would pay for only 25% of the benefit that a logger would receive if it won the auction. This handicaps SOGF’s ability to bid and ultimately hurts the state trust beneficiaries because DNRC is not offering a viable Conservation License alternative to attract bidders and increase competition in the Limestone West timber sale auction. • Second, there is disagreement as to the method of payment of the Conservation License. SOGF points out that in 1999 when the Conservation License statute was passed, then-Director of the DNRC, Bud Clinch, testified that the holder of a Conservation License should pay the trust beneficiaries the lost interest income for the term of the Conservation License rather than the stumpage value, seeing that the timber would remain a standing asset. A payment of lost interest income fully compensates the trust beneficiaries for a delay in receiving the full stumpage value of the timber. At the end of the license period, the state still retains the timber, which it could auction should it choose to do so. Q: What is the specific wording of the Conservation License statute? MCA 77-5-208. Timber conservation license in lieu of sale. (1) Under the direction of the board, the department may offer and provide a timber conservation license in lieu of the sale and harvesting of the timber to any person under all of the following conditions: (a) During the environmental review process required by Title 75, chapter 1, for a proposed timber sale, an interested person shall provide to the department a written request that the department defer the sale or a specific portion of the sale and that a timber conservation license for the sale or portion of the sale be authorized. (b) Upon receipt of a written request, the department shall prepare and recommend the timber sale for consideration by the board, using the alternatives of the sale with and the sale without a timber conservation license provision. (c) The department shall solicit bids simultaneously for each alternative authorized by this section to ensure that the full, fair market value is secured for the beneficiaries. (d) The successful purchaser of a timber conservation license is required to furnish a bond, as required by 77-5-202, to ensure the terms of the contract for a timber conservation license. (e) The successful purchaser of a timber conservation license is required to pay the fees for forest improvement, as required by 77-5- 204, that are included in the terms of the sale bid and applicable to the issuance of a timber conservation license. (2) If a request for the timber sale analysis and authorization of a timber conservation license is not submitted to the department prior to the completion of the environmental review process for the sale, as required by Title 75, chapter 1, a timber conservation license may not be authorized. History: En. Sec. 1, Ch. 224, L. 1999. See also Administrative Rules of Montana (ARM) 36.11.453, Timber Conservation License Bidding and Bonding. ARM 36.11.453 (4) provides that "The department shall select the bid or combined bid and timber conservation license that generates the most revenue for the trust beneficiaries." ARM 36.11.453 (7) provides that "The volume of timber associated with the timber conservation license may be counted as part of the annual timber sale requirement for the state timber sale program administered by the department."