The 3rd meeting of the Land Stewardship and Conservation Task Force was held on Thursday, November 12, 2009, at 1:00 PM, in Room 129 of the Capitol Annex. Representative Charlie Hoffman, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Brandon Smith, Co-Chair; Representative Charlie Hoffman, Co-Chair; Hugh Archer, Larry Arnett, Elizabeth Bennett, Frances Brown, William Brown, Mark Dennen, Don Dott, Bob Marrett, William Martin, K.A. Owens, Scott Travis, and Bruce Williams.
Guests: Charles Bush, Director, Division of Real Properties; Natalie Holloman, Acquisition Branch Manager Division of Real Properties; and Scott Aubrey, Assistant Director, Division of Real Properties.
LRC Staff: Stefan Kasacavage and Ashlee McDonald.
Chair Hoffman stated that a quorum was present and asked for motions to approve the minutes from the July 9 and August 13 meetings. After a motion and a second, the minutes were approved. Chair Hoffman thanked Sen. Webb and Rep. Stumbo for his appointment to the chairmanship of the task force. He then recognized Co-Chair Smith for introductory comments.
Co-Chair Smith thanked all of the members for the work that they had done on the task force and assured them that their work would help further land conservation and stewardship objectives in the General Assembly.
Chair Hoffman asked Bruce Williams to begin discussion on the adoption of the task force’s legislative proposals for the 2010 General Assembly. Mr. Williams started by reviewing the steps that the task force had taken to reach the legislative proposals under consideration. At previous meetings, the task force heard testimony on land conservation programs that had been implemented in other states. Many of the members also shared their expertise on land conservation programs already working within the Commonwealth. The members worked together to form the legislative proposals currently under consideration by the task force.
Mr. Williams continued that most of the task force members agreed that Kentucky had not kept pace with conservation programs enacted in other states, that the existing land stewardship and conservation programs within the state are underfunded, and that the people of the Commonwealth will support a dedicated revenue source for land conservation purposes if they are convinced that the money will be spent wisely. The legislative proposals were made with these principles in mind. The task force recommended that legislation be introduced in the 2010 General Assembly to establish a land stewardship fund and its governing board. Additionally the task force recommended that legislation be proposed to amend the state constitution to provide for a one-eighth of one percent (1/8%) sales tax increase to provide revenue for the land stewardship and conservation fund. Mr. Williams stated that he understood the political difficulty in passing such a constitutional amendment, especially given the current financial downturn, but he nevertheless believed that the time was now to introduce the idea to the public and determine whether sufficient support for it existed.
Co-chair Smith voiced his concern with being able to pass a constitutional amendment, especially one involving a tax increase. He then asked if there were any alternative funding mechanisms that the task force had considered if there was no support to pass the constitutional amendment. Mr. Williams answered that other states did a variety of different things to raise revenue for land conservation purposes, but the consensus within the task force was that if we want to make a significant impact with the land conservation program, we must have a significant source of funding. Real estate transfer fees, gaming revenues, and other sources were considered, but the increased sales tax was the only source of funds significant enough (in the neighborhood of $30 million per year) to accomplish the goals that the task force had for the land conservation program.
Co-Chair Smith asked what the task force thought about the real estate transfer tax. Mr. Williams responded that the fee would have to be very high in order to raise the amount of revenue required. Mr. Marrett added that with the slump in the real estate market, it was not a very good time to consider fee increases that could further depress sales.
Co-Chair Smith said that he understood, but that he wanted a backup plan in place in case the constitutional amendment did not gain traction so that another year would not pass without any useful land conservation initiatives.
Mr. Archer said that Colorado was a state that uses lottery money for conservation and environmental tourism promotion. All lottery revenues go toward conservation purposes; there is no special lottery ticket dedicated for environmental protection.
Co-Chair Smith stated that the state’s financial situation would make it difficult to pass sales tax increases during the upcoming session, so he was looking for alternative revenue streams. Mr. Williams responded that he wanted to allow citizens to decide whether they would be willing to raise the sales tax on themselves through the constitutional amendment. Legislation setting up the fund and the board would at least put the pieces in place for a comprehensive statewide land conservation policy. Whether the constitutional amendment was introduced during this session or later would be the decision of legislative sponsors.
Co-Chair Smith said that adventure tourism user fees for conservation and hunting lands could possibly be used in the future to fund land conservation. Mr. Williams agreed that user fees would be a very good source of revenue for the fund.
Mr. Dott said that he understood the fear that trying too much with the legislative funding mechanism could mean that it would fail and yet another year would go by without any progress on the issue of land conservation. However, he felt that it was the opinion of the task force that now was the time to try something to provide the necessary revenue source for wide-ranging conservation programs within the state. It would probably take several years to build the popular support to pass the constitutional amendment, but now would be a good time to start the process.
Mr. Arnett mentioned that he wanted to remove reference to using surface mining fines as a possible source of revenue for the land conservation fund from the draft of the task force’s legislative proposals.
Chair Hoffman responded that he would be afforded the opportunity to make the motion to amend the proposals at the appropriate time.
Mr. Owens said that he believed that as a starting point, the language regarding using surface mining fines as revenue for the land conservation fund should be left in, since it could be removed at any time by a member of the general assembly should the bill get drafted and introduced. Mr. Marrett responded that including those provisions would muddle the issue and would not provide sufficient funding for the goals of task force’s proposals in any event.
Mr. Dott asked whether it would be more efficient to increase funding to modified versions of existing land conservation boards, like the PACE Board and the Kentucky Land Heritage Conservation Board, instead of creating a new board. These boards already have the expertise to make sound land acquisition decisions for conservation purposes. Mr. Williams responded that the task force members had discussed this issue, but they feel that creating a new board allows the existing boards to continue with their missions without interference. It also allows for the implementation of a statewide land conservation strategy, through which the various existing boards could work together, instead of in competition against each other, to fund land conservation in Kentucky toward a common goal.
After a motion to consider and a second, the task force adopted the “Task Force Findings” portion of its legislative proposals by voice vote. A motion was then made and seconded to consider adoption of the recommendation to establish the Land Stewardship and Conservation Trust Fund. Mr. Arnett made a motion to direct staff to strike all language referring to the use of fines from surface mining as a source of revenue for the fund. The motion was seconded and adopted by voice vote. The task force then adopted the recommendation to establish the amended Land Stewardship and Conservation Trust Fund section by voice vote.
A motion was then made and seconded to consider adoption of the task force’s recommendation to establish the Land Stewardship and Conservation Board. Ms. Brown made a motion, which was subsequently seconded, to add representatives from the Kentucky State Nature Preserves Commission and Kentucky Farm Bureau to the recommended membership of the board. The amendment was adopted by voice vote. The recommendation to establish the board as amended was then adopted by voice vote.
Mr. Owens made a motion to consider adoption of the task force’s recommendation to introduce legislation to make a constitutional amendment to increase the Kentucky sales tax by one-eighth of one percent (1/8%) to be used for land conservation purposes. Mr. Williams seconded the motion, and the task force adopted the recommendation by voice vote.
Chair Hoffman then asked Charles Bush and his colleagues from the Division of Real Properties to give their presentation on the state land acquisition process.
Charles Bush, Director, Scott Aubrey, Assistant Director, and Natalie Holloman, Acquisition Branch Manager of the Division of Real Properties began their presentation. Mr. Bush said that the purpose of the presentation was to explain to the task force the various stages of the division’s acquisition process.
Ms. Holloman explained that the division did state land acquisition for all real property interests, including leasing of real property, surplus land, and easements. The first step of the land acquisition process is the identification of a willing seller of a piece of property that a state agency wants to acquire. The division handles all business dealings with the seller. The requesting agency submits a memo to the division outlining the need for the property. Once all of the background information is submitted, the division solicits bids for the title search and appraisals. In order to proceed through the process, there must be no unresolved problems with the title. A desk review is then done of the appraisals and sent to the requesting agency for comment. As long as there are no problems raised in the comments, an order is signed by the Secretary of Finance approving of an offer being made to the property owner based on the appraisal. If the offer is accepted, the division proceeds with a contract for the purchase of the real estate and execution of the contract.
At this point, the survey work is done. Surveys used to be conducted at the beginning of the process, but it was determined to be a waste of taxpayers’ dollars to spend money on a survey for property that may not end up being acquired. Survey work can add two or more months to the end of the acquisition process. The Division of Engineering also conducts environmental reviews on all properties at this time. If any problems are found, they proceed with additional testing. The division works with Finance Cabinet officials and the Office of Legal Services to prepare a deed and to accomplish the closing.
Mr. Williams asked if the division purchased options. Ms. Holloman responded that historically, it was not a problem to purchase an option. However, if it is a monetary option, there is a high risk of spending tax dollars without any of the deals actually going through. For this reason, monetary options are not regularly pursued.
Mr. Dott asked if it would be more efficient to take bids from an attorney to do all the title work for lands to be acquired in a certain region over the course of a year. This way, each title opinion would not have to be rebid through the thirty-day process.
Mr. Aubrey responded that it would be difficult to find an attorney to bid blindly to work on more than one title deed. The amount of time and work that it takes to accomplish researching a title deed varies greatly from property to property. An attorney would be unlikely to bid on a title deed that could take much longer than expected to accomplish. Mr. Bush added that through e-mail and other measures, the process has been sped up significantly.
Mr. Archer commented that the division needed more staff to accomplish the volume of land acquisition that was funded through state boards and agencies.
Chair Hoffman thanked the representatives from the Division of Real Properties for their presentation and asked Don Dott, Director of the Kentucky Nature Preserves Commission, to address the task force on protected area maps of the Commonwealth.
Mr. Dott began by discussing a map of Kentucky lands managed for conservation purposes that are owned by state, local, and federal agencies. Fort Knox and the Daniel Boone National Forest represented the largest areas on the map. The conserved areas were large, but very fragmented. It would be very beneficial from a conservation standpoint to connect closely situated but disjointed areas into single contiguous conserved areas. This would allow for the natural movement of animal species to and from adjoining habitats and help to protect riparian corridors. The federal government manages the most conserved land in Kentucky with about 1.1 million acres, followed by the state which manages about 664 thousand acres. Local governments account for the management of about 38 thousand acres and private owner have about 55 thousand acres.
Blocks of conserved lands must be made larger to more successful protect animal habitats. When conserved lands are broken up by roads or otherwise fragmented, the lands are much more vulnerable to invasive species and habitat destruction. Recent statistics show that Kentucky converts 130 acres (1 square mile) of forests and fields into developed land each week. This is one of the highest rates in the country. Kentucky ranks last among surrounding states in state owned conservation lands (1% of the state).
Chair Hoffman thanked the members for their hard work. There being no further business, the meeting was adjourned.