Auditor: Repeal or overhaul state sustainable forestry program

A program that pays landowners to practice sustainable forestry lacks oversight and should be repealed or overhauled, according to a report released Tuesday by the Minnesota Legislative Auditor.

The state's Sustainable Forest Incentive Program, which was put in place in 2001, currently pays landowners $7 an acre for property tax relief if they follow a sustainable forestry plan aimed at preventing large tracts of forested land from being divided up or developed. Landowners with more than 1,920 acres in the program are required to provide public access to the land for hunting and recreation.

But Legislative Auditor Jim Nobles said the payments were not tied to the program's goals or to property taxes. As a result, some landowners received more money from the state than they owed in property taxes. The program has doled out about $44 million from the state's general fund between 2003 and 2013.

During a legislative hearing on the report, one other big concern was raised about the program: Some landowners have received sustainable forest incentives while also receiving money from the state to put conservation easements on their land.

That appeared to be a case of "double-dipping," said Rep. Rick Hansen, DFL-South St. Paul.

"They shouldn't be getting paid twice for the same purpose," he said.

Hansen said even with a shorter legislative session planned for 2014, lawmakers should find time to fix the program or repeal it.

Revenue Commissioner Myron Frans, whose agency administers the program, said he agreed with the report's findings. But the Department of Natural Resources, which oversees the state's forested land, warned that adding major oversight to the program would require significant resources. The program has about 2,200 participants.

Representatives of landowners and the forestry industry said they are open to changes in the program. But they said repealing it without replacing it would have negative results.

"The larger tracts of land would no longer be open to public recreation, much more land would be sold and parcelized and converted to non-forested uses," said Wayne Brandt, executive vice president of Minnesota Forest Industries. "That's not in the interest of the citizens of the state."

Other findings in the report:

• In 2012, nearly half of the acres enrolled in the Sustainable Forest Incentive Program were owned by nine entities who had more than 1,920 acres enrolled in the program. They ranged from the Fond Du Lac Band of Ojibwe with 2,132 acres to Blandin Paper Company with 185,537 acres.

• Most of the participating lands are located in northern Minnesota. St. Louis, Itasca and Koochiching counties had the most enrolled lands, accounting for 60 percent of all of the land receiving incentive payments.

• The number of participants in the program has increased steadily, but the number of acres enrolled peaked in 2011.

• The incentive payment has fluctuated over the years and peaked at $15.67 per acre in 2010. But the report said the payment amount is not tied to the program's goals or to property taxes.

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