A Citizens Guide to Montana’s State Lands and the State Land Board

Introduction

The state of Montana owns more than 5 million acres of mountains, plains and river bottoms. Montanans deeply value the clean water, open spaces and wildlife these lands provide, and we all have a stake in policy decisions concerning access, use, and long-range stewardship of these state lands. Many of the most important decisions about these resources are made by the State Land Board, but state agencies, the Legislature, the courts and the public all play significant roles in deciding how these lands are managed.

This publication is intended to familiarize readers with the history of our state lands, the role of the Land Board, and the issues currently at the center of heated policy debates over how these lands should be used and how key land management decisions should be made.

Montana currently has about 5.2 million acres of state lands - an area equivalent to the state of Massachussetts. Most of these lands were ceded to the state by the federal government under the Enabling Act of 1889 by which Montana was "enabled" to become a state. To provide funding for public education, Sections 16 and 36 of every Township were ceded "for the support of common schools." Any revenues generated from the sale of state lands must be deposited to an inviolate Permanent Fund (which had a balance of more than $316 million in 1999).

Interest generated by the Permanent Fund and revenues produced by other uses of the lands, such as ag leases, timber harvests, etc., go to support public schools. In 1999, these activities produced almost $55 million in revenue for the State of Montana.

Virtually every issue that affects state lands comes before the Board of Land Commissioners (better known as the Land Board) including but not limited to:

• easements for projects such as power lines, roads and private driveways across state land
  
• leases, bonding, and reclamation requirements for oil, gas and mining operations on state land
  
• timber sales, road construction, sedimentation and associated Endangered Species Act concerns
  
• recreational access license fees
• cabin site leases
  
• grazing and farming leases
  
• land exchanges
  
• land acquisitions by state agencies
• conservation easements
  
• land sales by any state entity including the university system, the Department of Fish, Wildlife and Parks and others
  
• adoption of Administrative Rules on uses of state lands (mining, recreational, etc.)

Article X, Section 4 of the Montana Constitution establishes a Board of Land Commissioners and authorizes the Board "to direct, control, lease, exchange, and sell school lands and lands which have been or may be granted for the support and benefit of the various state educational institutions, under such regulations and restrictions as may be provided by law."

The Governor, Attorney General, Superintendent of Public Instruction, Secretary of State and State Auditor comprise the Land Board. The Governor serves as Chair.

The Land Board oversees the management and sale/exchange of trust lands, but the day-to-day management is carried out by the Trust Lands Management Division of the Department of Natural Resources and Conservation.

Four separate bureaus comprise the Trust Lands Management Division:

• Grazing and Agricultural Management Bureau
  
• Forest Management Bureau
  
• Minerals Management Bureau
  
• Special Uses Management Bureau
  

State lands provide many conservation and recreation values to Montana citizens, as well as revenue for public education. Some states, such as Nevada, have primarily liquidated their state lands. Colorado, on the other hand, amended its constitution to make long-term stewardship a priority. The long-term, overall health of state lands depends on good management decisions made by Land Board members who should encourage and consider public involvement in the decision making process.

State Lands Issues Abound

Much like the economy of the West in general, the use of state lands is in a transition period. The debate over who should use state lands, for what purposes, and at what costs or benefits to society are of great concern to conservationists. Also in the debate is the question of who is really in charge - is it the Land Board as constitutionally mandated? Or is it the Department of Natural Resources and Conservation? The answers to these tough, complex policy questions will affect the fate of Montana's millions of acres of state lands for generations to come.

Virtually every management decision on state lands weighs revenue production against a host of other societal values including fisheries and wildlife habitat, a clean environment and recreation. Attempts to balance the need for revenue with the need for stewardship frequently result in conflict and controversy. Many in the conservation community argue that while oil and gas leases, logging, mining, grazing, and urban development all promise immediate revenue for the trust, they should be allowed only if they can be done in ways that will not permanently diminish land and water resources. Conservationists contend that Montana will maximize long-term economic productivity from its state lands only if it manages them to ensure land, water and wildlife stewardship.

Thomas Butler, the Trust Lands attorney for the Department of Natural Resources and Conservation (DNRC), believes "DNRC's principal legal obligation is to maximize trust revenue pursuant to 77-1-202 MCA. It cannot legally favor preservation of wildlife or habitat over greater revenue-producing uses of the trust land without increased compensation paid into the various trusts." However, Dan Whyte, Chief Legal Counsel for Secretary of State Mike Cooney, believes the the Land Board is required by law to "administer this trust to secure the largest measure of legitimate and reasonable advantage to the state."

A 1995 legislative change further clarifies the duties of trust lands management by requiring: "In the exercise of these powers, the guiding principle is that these lands and funds are held in trust for the support of education and for the attainment of other worthy objects helpful to the well-being of the people of this state as provided in the Enabling Act."

Whyte also points out that Article X, Sec. 11 of the 1972 Montana Constitution requires that all public trust lands,"shall be held in trust for the people..." while Article IX, Sec. 1 requires "the state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations." Whyte believes these provisions, taken together, lend strong support for stewardship management designed to ensure long-term protection of assets such as clean water and wildlife, rather than maximizing short-term revenue production.

In a landmark court case, Ravalli County Fish and Game Association, Inc. sued the Department of State Lands to prevent a change from cattle to sheep grazing on a state lease adjacent to bighorn sheep range. The Ravalli sportsmen feared the domestic sheep would spread diseases to the wild sheep and claimed the agency did not meet the requirements of the Montana Environmental Policy Act (MEPA) by failing to consider this threat in approving the grazing change.

In 1995, the Montana Supreme Court ruled in favor of the Ravalli County group and noted in the decision, "the goal of maximizing income derived from school trust lands does not exempt the DSL or any other agency from complying with applicable environmental laws...Income is 'a' consideration -- not 'the' consideration regarding school trust lands: Maximizing income is not paramount to the exclusion of wildlife or environmental considerations in the MEPA context."

Faced with a similar quandary, Colorado citizens amended their Constitution by ballot initiative in 1996 to clarify the management of trust lands. Included in the general revision of management objectives was a provision setting 300,000 acres aside as a permanent, intergenerational "Stewardship Trust" to protect the lands for their "beauty, natural values, open space and wildlife habitat." The U.S. Tenth Circuit Court of Appeals, in response to a challenge brought by several school districts, upheld stewardship as a valid option to maintain the long term values of the trust.

While DNRC considers maximizing revenue production to be a prime goal for managing trust lands, the level of revenue generated by school trust lands actually has very little to do with school funding. The Legislature appropriates General Fund money for school budgets at whatever level it considers necessary. If trust lands have produced more revenue, the legislature simply substitutes those revenues for General Fund money - it does not automatically increase the level of school funding.

The stewardship v. revenue debate over trust lands management has resulted in a sparring match between the Land Board, the Legislature, the Governor's Office and DNRC's Trust Land Management Division. The Constitution gives the Land Board the authority and duty to "direct, control, lease, exchange, and sell school lands and lands which have been or may be granted for the support and benefit of the various state educational institutions, under such regulations and restrictions as may be provided by law." But the DNRC's Trust Lands Management Division actually carries out the day-to-day management such as preparing leases, designing timber sales, compiling environmental assessments and taking public comments.

Partisan politics have exacerbated matters for most of the last decade. Every member of the Land Board except the Governor has been a Democrat, while the Governor's Office and both houses of the Legislature have been controlled by Republicans. The agency's director is appointed by and answerable to the Governor and the Legislature enters into the picture because it writes and passes the "regulations and restrictions as may be provided by law" referenced in the Constitution.

The contentious wrestling match over the fate of school lands is exemplified by HB 142, requested by the Department of Natural Resources and passed by the 1999 Legislature. The bill provides exemptions from MEPA compliance for DNRC for "lease renewals" and certain other activities associated with trust lands management. Additionally, it limits challenges to agency decisions by preventing a court from considering any "issue or evidence that was not first presented to the agency for the agency's decision prior to the agency's decision." The bill was brought to the legislature in spite of vehement opposition by the majority of Land Board members, who testified that they had not requested and did not support such a change in state lands management. Yet, with the support of Governor Racicot and the DNRC, the bill was passed into law.

Recent State Lands Conflicts and Important Board Decisions

Cutting Old Growth Forests

In 1995, the Legislature passed the "Clearcuts for Kids" bill (HB 201) which required "annual sustainable yield" to be harvested from state lands. To meet the target level of 45 to 55 million board feet per year requires harvesting old growth from the 662,000 acres of forested lands - despite the fact that Montana's old growth forests have declined by 90% in the last century. Five years later, the Land Board and DNRC are still deadlocked on the definition of old g growth, while Governor Racicot, DNRC and the timber industry continue to push for harvesting the valuable old-growth forests.

The latest development took place in June 2000, when Governor Racicot voted to cut the old growth larch and spruce in the proposed 500-acre Cyclone/Coal sale in the North Fork of the Flathead River, but was defeated when Nancy Keenan and Mike Cooney, the only other Land Board members present, voted to delay the cut until DNRC presents the Board with a new definition of old-growth (expected in October). The Board will then vote again on the Cyclone/Coal sale in November.

Urban Development

The rapid growth of Montana's urban areas is creating pressure to develop adjacent state-owned lands. In June of this year, the Montana Environmental Information Center and Citizens for a Better Flathead sued the Department of Natural Resources and the Land Board over a proposal to develop a full section (640 acres) of state lands near Kalispell.

At issue is the state proposal, already approved by the Land Board, to convert the Kalispell section from agriculture to commercial, office and residential use...all of which promise to exacerbate, not solve, the problems already being caused by urban sprawl in the area. The conservation groups want the state to analyze the total environmental, economic and social impact of the development before proceeding, as required by the Montana Environmental Policy Act. But the state believes a project-by-project analysis is sufficient. However, experience in other states with urban use of state lands has shown that a plethora of problems can arise from such developments - nearly all of which put the state in the position of being the landlord for everything from slum dwellings to malls.

Sodbusting the Great Plains

Another example of on-going management conflicts concerns sodbusting or "breaking" of native sod on state lands. In 1990, the Department of State Lands, predecessor to DNRC, issued a moratorium on sodbusting because Federal farm programs sought to reduce the acreage in agricultural production. In 1994 the state published "Procedures for Granting Land Breaking on State Lands," and in 1998, DNRC issued a Memo rescinding the moratorium entirely.

Montana Audubon and the Montana Environmental Information Center have challenged the procedures and the revocation of the moratorium arguing that DNRC has failed to comply with either the Montana Administrative Procedures Act (MAPA) or the Montana Environmental Policy Act (MEPA). Because the policy did not go through formal rulemaking, the public was never provided an opportunity to review or comment on the proposals. DNRC, however, contends that it is instituting an agency "policy" and has no responsibility to comply with MEPA, MAPA, or any other public review and comment provisions. Short of going to court, the conservationists say the problem could be solved if the Land Board itself would institute formal rule-making procedures to control DNRC, but to date that has not happened.

Oil and Gas Leases in Makoshika State Park

A final example of the struggle for control of activities concerns oil and gas drilling within Makoshika State Park, a spectacular badlands area south of Glendive. At virtually every meeting, Land Board members routinely approve oil and gas exploration activities and did so for a lease in December of 1996. But seven months later, they learned from Northern Plains Resource Council's local affiliate in Glendive that some of the parcels approved for oil and gas drilling were located inside Makoshika State Park. The group lobbied the Land Board to protect this unique public resource.

As a result, State Auditor and land board member Mark O'Keefe moved to require DNRC to adopt a "sensitive areas" policy for all oil and gas leasing. The policy requires that whenever a proposed oil and gas lease is in or immediately adjacent to parks, wildlife refuges, wilderness areas, or Indian reservations, land board members must be notified in advance of voting on whether or not to approve the project.

As for the existing lease in Makoshika, the board required DNRC to bring a proposed operating plan for the Makoshika sites to a public hearing in Glendive and before the board for review, public comment and approval.

All of these conflicts raise issues that will only become more complex as land-use patterns continue to change in Montana, and across the West. Eventually, the Supreme Court will probably settle the question of who's in charge of state lands. But there are some policy options that could be implemented in the meantime to change the way the Land Board does business so that this powerful decision making body is more accountable to and has more input from concerned citizens:

Retain independent legal counsel for the Land Board

Situation: Legal counsel for the Land Board is currently provided by a DNRC attorney. However, DNRC is directly under the supervision of the Governor and tends to provide advice and opinions that support the goals of the administration. Staff for individual board members are often not attorneys and may find themselves at a disadvantage in discussion of complex legal issues. And, with the exception of the Governor, Land Board official's support staff have limited time to spend on state lands issues and may find their other duties interfering with and shortchanging their Land Board work.

Recommendation: The Land Board should have its own attorney, independent from DNRC, so that Land Board members could base their votes on legal opinions not influenced by administration policies. Further, ALL Land Board officials should be provided with adequate staff specializing in state lands issues to:

• thoroughly analyze the issues before the Board
  
• be available on a regular basis to communicate with members of the public
  
• follow up on Land Board decisions and determine results
  

The Land Board should initiate policies

Situation: Nearly all state lands policy changes are initiated by DNRC with little public input. DNRC often seeks no public comment before taking highly controversial actions, as demonstrated by the agency's decision to lift the sodbusting moratorium, and its support for HB142 in spite of the opposition of four Land Board members.

Recommendation: As in the case of the Makoshika oil and gas leases, the Land Board should initiate policies that set the standard for agency operations and give both board members and citizens better information, in a more timely fashion, with plenty of opportunity for public review and comment. Make key information easily available to the public and provide better avenues for public input on Land Board decisions.

Situation: Members of the public literally must come to Helena and attend Land Board hearings to view technical materials such as maps, etc. and to ensure their comments are taken into consideration. Only by going through the files in Helena can citizens find out what was on a specific agenda, how board members voted on a specific issue, or what documentation they based their votes on. While MEPA requires environmental assessments and public comment periods prior to virtually all other agency decision-making, the Land Board does not have such policies, and does not make key information available to the public prior to Land Board meetings.

Recommendation: The Land Board should make every effort possible to increase citizen awareness of the issues coming before the board, the timelines for actions on the issues, and opportunities to participate in the decision making process. Important steps that could be taken include developing a land board website where upcoming and past agendas, votes, meeting minutes and other key information is posted; improving record-keeping; and, providing clear, concise information to the public in both hard copy and electronically prior to Land Board meetings. The result will invariably be better decisions by public officials who will benefit from the insights and knowledge of a more involved citizenry.

The Land Board should publish its own independent Annual Report

Situation: Currently, there is no thorough, periodic and objective review of state lands management activities. DNRC's Annual Report is useful, but does not provide complete information on Land Board activities - only abbreviated overviews of agency activities, selected performance summaries and changing "accounting methods" that confuse, rather than clarify trust lands performance monitoring. Rather than an objective review, the public and the Legislature receives a report on the agency, by the agency, which tends to diminish or omit any problems while highlighting any successes.

Recommendation: The Land Board should contract for an Annual Report by an objective third party that would:

• specifically detail Land Board actions and the results
  
• provide suggestions for improvement in management if needed
  
• provide objective, consistent interpretation of management and performance goals, accomplishments and shortcomings
  
• be available online and in hard copy.

The Department of Natural Resources and Conservation also produces an Annual Report that contains discussions of activities on state lands as well as the revenues generated. The report and other useful information can be located at the Trust Lands Management Division website: http://www.dnrc.state.mt.us/trust/tlmdhome.htm.

ABOUT THIS GUIDE

This citizen's guide was researched and written by George Ochenski and edited by Theresa Keaveny, Montana Conservation Voters Education Fund Executive Director. Thanks are due to Montana Environmental Information Center, Northern Plains Resource Council, and Montana Audubon for their contribution to this citizens' guide.