State of Michigan DEPARTMENT OF NATURAL RESOURCES Lansing
JENNIFER M. GRANHOLM governor		REBECCA A. HUMPHRIES director

BILL ANALYSIS

BILL NUMBER:	House Bill 4930, AS INTRODUCED
TOPIC:	Conveyance of State Owned Property in Whitefish Twp., Chippewa Co.
SPONSOR:	JRepresentative Gary McDowell
CO-SPONSORS:	N/A
COMMITTEE:	Appropriations
Analysis Done:	June 20, 2007

POSITION

The Department of Natural Resources (Department) strongly opposes this bill.

PROBLEM/BACKGROUND

The purpose of this bill is to transfer Sstate-owned property to Whitefish Township. The Whitefish Township/Paradise area is a popular destination for tourists in all seasons. Whitefish Township desires this property in order to build an airport.

DESCRIPTION OF BILL

HB 4930 directs the conveyance of approximately 416 acres of State-owned lands within the boundaries of the Newberry Forest Management Unit to Whitefish Township for a $1.00 consideration. The conveyance would be by quit claim deed and would reserve mineral and aboriginal antiquity rights. Additionally, the conveyance would contain a reverter clause which would terminate the grantee's rights in the property if it is used for anything other than a township airport. The bill directs that the revenue received for this conveyance ($1.00) be deposited into the General Fund.

SUMMARY OF ARGUMENTS

Pro

None

Con

The Department does not support this legislation. On April 11, 2007, the Office of Land and Facilities received a Land Transaction Application from Whitefish Township for the same property that appears on the bill. The application proposed a direct sale of the property to the Township. On May 7, 2007, a request was sent to Department staff to review the proposed transaction. The following are comments from various staff which indicate their concerns with disposing of this property:

• The Department-managed land in this area is well-consolidated and sale of the land to the Township will cause fragmentation, which leads to an increased management burden.
• The desired parcel is in close proximity to Whitefish Point Bird Observatory and would significantly disturb annual bird migrations and result in negative impacts to numerous bird populations.
• Given the historical and continued use of this area as a migration stop-over point, the Department would have great difficulty in reducing bird populations to a point that would result in expected airport safety.

· Transfer of this property would have a very detrimental impact on a State-designed cross, UP snowmobile trail. Moving this trail would require an acceptable alternative site and may not be feasible due to the wet nature of the topography nearby. Additionally, the trail is currently located so as to alleviate snowmobile congestion and a dangerous crossing. Moving the trail would cause an increased risk to the health and safety of the public, and would be extremely costly for the Department and to the snowmobile trails program.

· The area is a good jack pine producing area, and the State already has investments in scarification and advanced regeneration in the area.

· There is an existing airport approximately 26 air miles away.

• This bill, if enacted, will violate State law, specifically MCL 324.40501 and Article IX, Section 40 of the Michigan Constitution, because some of the lands to be transferred were acquired with monies derived from the sale of hunting licenses. These provisions of Michigan Law were specifically designed to prevent the diversion of hunter license fees for any uses other than those necessary for the management of the State’s wildlife.
• Article IX, Section 40, defines the activities that can be supported with revenues derived from hunting and fishing licenses. These activities include the “acquisition of land and rights in land that support wildlife and fisheries programs.” By transferring these lands to the township for $1.00 for the purposes of constructing and operating an airport, this bill would result in using license fees for an unallowable purpose in direct violation of the State’s constitution.
• Additionally, in order to be eligible for funding under the Federal Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669), Michigan had to enact “Assent Legislation” to prevent the use of hunter license fees for any purposes other than those necessary for wildlife restoration. MCL 324.40501 states that “license fees paid by hunters shall not be used for any purpose other than game and fish activities under the administration of the department.” Further, this

legislation requires Michigan to comply “with rules and regulations promulgated by the United States” under the provisions of the Wildlife Restoration Act.

• The transfer of lands for the nominal fee of $1.00 would constitute a diversion of license fees under the portion of the Code of Federal Regulation (CFR) promulgated to implement the Wildlife Restoration Act. 50 CFR 80.4(c) stipulates a “diversion of license fee revenues occurs when any portion of license revenues is used for any purpose other than the administration of the State fish and wildlife agency.” When a diversion occurs, the state becomes ineligible for federal funds under the Wildlife Restoration Act until “assets acquired with license revenues are restored, or an amount equal to license revenue diverted or current market value of assets diverted (whichever is greater) is returned and properly available for use for the administration of the State fish and wildlife agency.”
• Not withstanding the violation of the State’s constitution, the penalty for diversion is severe. Currently the Department receives approximately $7,000,000 annually through the Federal Wildlife Restoration Act.

This acquisition by the Township has been proposed various times since 1982. In 2005, a site feasibility study was commissioned by the Township. The site feasibility study is dated January 20, 2005, and was prepared by R.W. Armstrong and Associates. It contains the following concerns about the proposed location:

· In addition to the Township obtaining rights in the desired land, the Township would have to obtain avigation easements from both the Department and the Federal Forest Service to enable tree topping/clearing of trees more than 30’ tall (backslopes) or 50’ tall (approach zones).

· Although the site is located along M-123, access onto the site will require construction of a paved access road.

· There are three existing cell towers in the general area of the site which impede runway alignment.

· Whitefish Point represents an internationally recognized bird area noted for the large number of spring and fall migrating birds. This location could result in taking of protected migratory birds (protected under the Migratory Bird Treaty Act of 1918) and could also pose a risk to aircraft.

BILL NUMBER AND VERSION (i.e. s-1, AS INTRODUCED, etc) Page 2 Indicate the date the analysis was completed

DRAFT

FISCAL/ECONOMIC IMPACT

Are thereThis bill would have revenue or budgetary implications in the bill to the –

(a) Department

Budgetary:

None

Revenue:

If enacted, this bill will result in the Department losing its annual apportionment of funds under the Pittman-Robertson Wildlife Restoration Act. For fiscal years 2005, 2006, and 2007, these amounts were $7,071,306; $6,904,456; and $7,490,222 respectively.

Comments:

The bill directs the disposition of this property to the Township for a $1.00 consideration, to be deposited to the General Gund. The following are comments from Department personnel and from the above-mentioned site feasibility study:

· The current value for the standing timber on this parcel is approximately $69,500. However, the typical assigned value per acre for lands permanently taken out of production is $1,023.80 per acre. Using this figure, the lost revenue to the Department would be approximately $432,504.

· By statute, the proceeds of the sale of this property should be deposited into the State Game and Fish Fund account for those parcels purchased using State Game Fund monies, and into the Land Exchange Facilitation Fund for those parcels acquired through tax-reversion.

· The site feasibility study mentioned above indicates the estimated purchase price of the land to be between $880,000 and $950,000. This is lost revenue to the State Game and Fish Fund and the Land Exchange Facilitation Fund.

(b) State

Budgetary:

None

Revenue:

None

Comments:

See Above

(c) Local Government

Comments:

The local unit of government would be acquiring land with an estimated value of up to $950,000 for $1.00.

OTHER STATE DEPARTMENTS

Indicate here if there are other state departments that may have a concern or issue with this bill. Also indicate any concerns/issues that have been conveyed to the department hereThe Department of Environmental Quality may have concerns with air and water quality impacts. The Department of Transportation, Bureau of Aeronautics may also have concerns with this legislation.

ANY OTHER PERTINENT INFORMATION

This section could include general comment on previous or similar bill introductions or similar bill/statutes in other statesbill is being introduced concurrently with a Land Transaction Application that was submitted by Whitefish Township and received by the Department on April 11, 2007. Similar proposals have been made to the Department over the years. Department concerns and objections to this transaction have been, and continue to be consistent..

BILL NUMBER AND VERSION (i.e. s-1, AS INTRODUCED, etc) Page 3 Indicate the date the analysis was completed

DRAFT

ADMINISTRATIVE RULES IMPACT

Administrative rRules are not necessary can be promulgated to provide for administration of the act.

______________________________

Rebecca A. Humphries

Director

_______________________________

Date

FMFM/WLDBureau/Division/Office