DNR outlines land‑replacement plan for encumbered forests; Clallam officials press for quicker revenue

The Department of Natural Resources told the Clallam County Revenue Advisory Committee on May 18 that state funding and a land‑pool strategy are being used to replace state trust lands that are encumbered by habitat‑conservation plans and other restrictions, and committee members said the county needs clearer, faster revenue outcomes.

DNR Asset Management Division Manager Susan Beal said the agency manages acquisitions/divestitures, real‑estate valuation and projects planning for trust lands and that the Trust Land Transfer (TLT) program exists to reposition underperforming parcels so beneficiaries receive more productive land. "Trust Land Transfer is a legislatively funded land‑portfolio program that allows DNR to reposition certain state trust lands to better serve the trust beneficiaries by divesting from underperforming parcels and acquiring replacement lands," Beal said.

Why it matters: Clallam County and its junior taxing districts (fire districts, school districts and others) since 2023 have had large parcels classed as encumbered — for example because of marbled‑murrelet habitat or other forest‑practice limits — that substantially limit near‑term timber revenue. Committee members repeatedly asked whether replacement purchases will deliver money quickly enough to offset lost revenues and how any proceeds will be split among taxing districts.

Dwayne Evans, identified in the meeting as an assistant deputy for Uplands, described statutory and appraisal mechanics: counties may ask the Board of Natural Resources during a transfer appraisal to distribute up to 100% of a parcel’s timber value to beneficiaries at the time of transfer. "The county can ask for a portion of the timber value, up to 100% of the timber value, to be distributed to the beneficiaries," Evans said, noting counties must weigh taking immediate cash versus using the funds to purchase more replacement acres.

DNR said some replacement purchases already include merchantable timber (helping near‑term revenue), but many encumbered parcels cannot be harvested in the foreseeable future because of federal and state habitat and forest‑practice rules. Beal said DNR is appraising identified replacement parcels now and holding appropriated funds in an interest‑bearing replacement account until purchases are completed.

Funding and purchases cited in the briefing included smaller appropriations that funded purchases described as the Reed 80, portions of Burke Mountain (Clallam County) and the Day Bob inter‑trust exchange (Jefferson County), a roughly $5 million appropriation that earned interest while held, and larger, interlinked provisos including a 2023 carbon‑dense/structurally‑complex forest proviso (discussed as a roughly $70 million appropriation aimed at conserving up to 2,000 acres). DNR reported an account balance of about $16.5 million for one pool of acquired lands and said appraisals are ongoing.

Several committee members pressed DNR on three practical points:

- Timing: how soon replacement lands will be harvestable and produce revenue for local taxing districts. DNR said timing varies by parcel and that the department aims to spend existing replacement‑account funds quickly where good purchases are found.

- Apportionment: how proceeds from a land pool or timber sale in another county (DNR described a large purchase and right of first refusal held with a conservation partner) will be apportioned back to Clallam’s junior taxing districts. DNR said it needs correct GIS tax‑district overlays from the county assessor to map encumbered acres and compute distributions; once revenue is generated, DNR will distribute funds to county treasurers and local actors must decide internal apportionment rules.

- Economic impact: commissioners and taxing‑district representatives warned that lost near‑term timber flows can harm local mills, wages and services such as fire protection and school staffing. A representative from the timber industry also told the committee that acquisitions from private land to DNR often lower available harvest volume by 20–30 percent because of HCP encumbrances, which can reduce mill supply and risk further economic impacts.

Public commenters and industry representatives urged continued engagement with beneficiaries and attendance at Board of Natural Resources hearings. Beal said DNR is coordinating appraisals and looking for replacement properties locally when possible; she described a land‑pool approach so several encumbered counties can share revenue from larger, consolidated purchases.

The meeting did not produce a new formal decision on a specific parcel for Clallam County but left clear next steps: DNR will follow up with county GIS/assessor staff to finalize overlays that determine distribution shares; appraisals will continue; and the committee requested a future written breakdown of lease and revenue projections. The committee scheduled a follow‑up meeting for June 15.

Quote selection (attribution preserved):

"Trust Land Transfer is a legislatively funded land‑portfolio program that allows DNR to reposition certain state trust lands to better serve the trust beneficiaries by divesting from underperforming parcels and acquiring replacement lands," Susan Beal said.

"The county can ask for a portion of the timber value, up to 100% of the timber value, to be distributed to the beneficiaries," said Dwayne Evans, assistant deputy for Uplands.

Next steps: DNR will continue appraisals, work with Clallam County assessor staff to produce GIS layers for apportionment, and report back on prospective replacement parcels and revenue timing at future meetings.