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State of
DEPARTMENT
OF NATURAL RESOURCES |
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JENNIFER M. GRANHOLM governor |
REBECCA A. HUMPHRIES director |
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State of
DEPARTMENT
OF NATURAL RESOURCES |
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JENNIFER M. GRANHOLM governor |
REBECCA A. HUMPHRIES director |
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BILL NUMBER: |
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TOPIC: |
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SPONSOR: |
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CO-SPONSORS: |
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COMMITTEE: |
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Analysis
Done: |
POSITION
Neutral with concerns
(see Summary of Arguments, Con).
PROBLEM/BACKGROUND
In 2004, the Department
of Natural
Resources (Department) opposed the original introduced version of
House Bill 5313, which would have removed reverter language from all property
deeded to municipalities and schools for forestry purposes. The bill was amended to address some of the
Department's concerns, but still attempted to provide for the removal of the
reverter language from deeded properties, which were not "prime lands"
as defined in the subsequently approved legislation, 2004 PA 377. That Act did not provide for definite
implementation and deadline dates for removal of the reverter clause and the
time window for the conveyance or sale of properties by municipalities. Most importantly, it did not make reference
to the Community Forest Act, 1931 PA 217, which was the Act under which all
properties had been deeded. 2006 PA 179
corrected the 2004 language, and allowed the State's reverter interest to be
removed from municipal forest lands that are "not prime.".
If those lands were then sold, 50 percent of the proceeds would be
submitted to the Department of Treasury.
DESCRIPTION OF BILL
House Bill 5429 amends
Section 52706 of 1994 PA 451 (MCL 324.52706), the Natural Resources and
Environmental Act. This Bbill is intended to eliminate the requirement
that 50 percent of the proceeds from forest land conveyance by a school
district be deposited into the State Treasury.
The bBill instead directs that at least 50
percent of the proceeds be deposited into a fund or funds to be used for school
district operating expenses, or financial aid for higher education for
residents of the school district. The bBill provides for this stipulation
only if the agency conveying the property is a school
district. If the agency conveying the property is not a
school district, the Bbill directs that 50 percent of the proceeds
be deposited into the State Treasury.
The bBill also seeks to clarify the date
requirement by changing the language "4 years after the effective date of
the 2006 amendatory act" to "June 6, 2010.".
SUMMARY OF ARGUMENTS
Pro
The legislation would
simplify the date requirement.
Con
The bill would
eliminate the requirement that some of the proceeds from the sale of land that
was owned by the State and conveyed to muncipalities (schools) at no charge be
deposited into the State Treasury. In
essence, the school districts would receive all of the proceeds from such
conveyances.
The Department has some concern that
by increasing the amount of revenue potentially derived from the sale of school
(municipal) forest properties, more school systems will apply for removal of
the reverter clause from their school forest property. This may result in the loss of more managed
forest land in the State and result in conversion of forest cover types to
non-forest and wildlife habitat uses.
FISCAL/ECONOMIC IMPACT
Are there revenue or
budgetary implications in the bill to the --
Budgetary:
None
Revenue:
None
Comments:
None
Budgetary:
None
Revenue:
Proceeding with the elimination of the requirement
that 50 percent of the proceeds from the conveyance of forestland by school
districts be deposited into the State Treasury would result in lost revenue to
the State General Fund.
Comments:
None
Comments:
Municipalities and schools that change the use of
their municipal forest land, either by sale or conversion to another use, will
forgo their opportunity for long-term revenues from sustainable forest
management activities. In the
short-term, they may realize some financial benefit through the sale of former
municipal forest land.
OTHER STATE DEPARTMENTS
Department
of Management and Budget
ANY OTHER PERTINENT INFORMATION
The
Department would like to see the following language inserted into Section 4 of
the bill: “…shall have an accounting
taken, including an appraisal of the
land.” The Attorney General’s office
has advised that the Department should be requiring the sellers of the
municipal forest land to get an appraisal to show that the proceeds distributed
approximate the market, rather than allowing for bargain sales.
ADMINISTRATIVE
RULES IMPACT
Rules are not necessary to administer this Act.
_______________________________
Rebecca A. Humphries
Director
_______________________________
Date
FMFM/OLAF/BSS
