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Land Board Hearing Recap

Tuesday, March 21, 2023 

• All members were present
• Review the Final Agenda
• Download the Meeting Materials

Regular Agenda

Brisbie LLC Land Exchange-Final Approval

• Attachment: Brisbie LLC Land Exchange-Final Approval

• Approved 4-1

• Governor Brad Little asked about sand and gravel rights on the property. Real Estate Program Specialist Zane Lathim noted IDL does not own the sand and gravel rights.

• Attorney General Raul Labrador stated the exchange doesn’t make sense to him. He sees the value of the property in the north but didn’t understand why the state would want to get rid of the mineral rights. He thought there were hidden costs to the state and the deal seems like a trick. Lathim explained Brisbie is a land holding company and the property is for Meta or Facebook and Brisbie’s job is to provide a piece of property with full fee title.

• The Attorney General wanted to know the cost to the state in tax benefits. Deputy Director Bill Haagenson explained the tax impact for the land to be acquired but said he wasn’t certain how the land in Ada County would be taxed.

• The Attorney General wanted an explanation of what tax benefits Meta would receive from the state. The Deputy Director explained he didn’t know as that does not fall under IDL and the beneficiaries.

• The Governor explained there are many acres that are a split estate. He said the issue here is this is a very capital intensive project. In some places someone will come in and purchase the minerals on a split estate and then use it to politically stop a project or use it to extort money. He noted that this looks like an unbalanced exchange, but the reason is it unbalanced is that it is a big project they are paying an ample sum to make sure no one can stop or slow the project.

• The Attorney General asked who owns the mineral rights and who owns the land. Lathim explained IDL owns the mineral rights and Brisbie owns the surface.

• Secretary of State Phil McGrane stated he would likely support this exchange because it is a benefit to the beneficiaries. It was the apparent inequity that bothered him.

• Controller Brandon Woolf asked if the land IDL would receive backs up to existing IDL land. Lathim stated that it does on both the east and west sides. The Controller commented that the Western Watersheds decision made it clear that the Land Board can only take into consideration what is the best interest of the beneficiaries.

• Superintendent of Public Instruction Debbie Critchfield appreciated the discussion and as a landowner understands the expectation of owning surface and subsurface so this seems fair and reasonable.

Benewah Land Exchange-Due Diligence Approval

• Attachment: Benewah Land Exchange-Due Diligence Approval

• Approved 5-0

• The Secretary of State said in the balance he would like to see more land for the beneficiaries.

• The Controller asked about the money IDL is making from the current leases of the rodeo grounds and the rock quarry. Lathim stated it is very little, in the $500 or $600 range for each per year.

• The Governor stated that will be part of the valuation in the due diligence.

Negotiated Rulemaking IDAPA 20.01.01, Rules of Practice and Procedure Before the State Board of Land Commissioners

• Attachment: Negotiated Rulemaking IDAPA 20.01.01, Rules of Practice and Procedure Before the State Board of Land Commissioners

• Approved 5-0

• The Attorney General asked if this is the usual rulemaking process or if this would make amendments to the rulemaking process. He also asked if the Land Board normally gives the department this much authority. Policy and Communications Chief Scott Phillips noted that this is how rules have been handled previously. IDL routinely go to the board per the governor’s zero based regulation. On a five year schedule we review 20% of our rules, we have 19 rule chapters right now. IDL seeks permission from the board to begin the rulemaking process, we go through the public process and bring the results of that process back to the board for adoption as a pending rule. This is business as usual for us.

• The Attorney General asked if his attorneys would participate throughout this process. Phillips confirmed the deputy Attorney Generals are part of this process.

• The Superintendent asked about the public involvement process. Phillips explained the process.

• The Superintendent asked if notes and meeting summaries be available to Land Board members. Phillips stated they would be and would also be posted on the website for the public to see.

Consent Agenda

• Consent agenda approved 5-0

Timber License Plate Fund

• Attachment: Timber License Plate Fund

• The Controller noticed the leadership tour is not scheduled this year and asked if it would be brought back in the future. Jennifer Okerlund Director of the Idaho Forest Products Commission stated it was cancelled due to budget constraints, but they hope to bring it back in the future. They hope to do a smaller tour this year with the help of Scott Phillips.

• The Controller noted he found the tour very valuable when newly elected.

Disclaimer of Interest Request DI600323-Horseshoe Bend Schools, Payette River 

• Attachment: Disclaimer of Interest Request DI600323-Horseshoe Bend Schools, Payette River

• The Superintendent asked if it is standard to charge school districts and other government agencies application fees. Division Administrator Mick Thomas said the application fees and final fees are charged to all applicants.

• The Governor noted if actual costs are more than the $600 total, then the applicant must pay more. He noted we are equal opportunity and charge everyone the same.

Department Report

• Timber

  • Attachment: Trust Land – Timber Sales

  • The Governor asked for a report next month that looks at species compared to the stumpage prices.

  • The Governor noted the new FAMP went into place a couple of years ago and IDL hired additional foresters. He wanted to know how the additional employees line up with the same amount being harvested. The Deputy Director stated each timber sale contract takes several years to complete so it will likely take a couple of years to see the increase reflected in harvest numbers.

• Leases & Permits

  • Attachment: Trust Land – Leases and Permits

  • The Governor asked what was not being reflected in forecasting when comparing actual receipts vs. money expected. The Deputy Director said new activities would not have been captured in the forecast.

  • The Controller noted there were a lot of upticks in sand and gravel last year. The Deputy Director noted it was very active last year and has dipped a bit this year.

• Legislative Summary
  

  • Attachment: Status Update - Legislative Summary

  • No questions

Endowment Fund Investment Board

• EFIB Manager's Report
  • Attachment: EFIB Manager's Report
  • No questions
• EFIB Investment Report

  • Attachment: EFIB Investment Report

  • The Attorney General asked about green vs. red on the report. EFIB Investment Officer Chris Halvorson explained that green shows being ahead of the benchmark, red indicates being behind on the benchmark.

  • The Attorney General asked about investment exposure from banks. Halvorson explained it is very limited exposure.

  • The Secretary asked about the real estate number that were there last month and gone this month. Halvorson stated real estate numbers will be given when there are solid numbers to report. The numbers available are behind by a quarter.

Information Agenda

2024 Grazing Lease Rate

• Attachment: 2024 Grazing Lease Rate

• The Secretary expressed concern that there is inflation everywhere but we have a decrease in lease rates and asked if it was due to a lag. Real Estate Section Manager Jason Laney noted the indices being used are from 2022 and part of the lag time is that 6-month notice for a rate increase is required, resulting in a two year lag.

• The Attorney General asked for an explanation as to why an increase in prices paid index results in a decrease in the lease rate. Laney explained that is how the formula is structured. An increase on price paid index results in our lease rate decreasing but cattle prices and forage prices will increase the rate. Unfortunately, the paid price index is more heavily weighted so even when the cattle and forage prices go up, it isn’t always reflected in our rates.

• The Secretary said he assumes we don’t see that with private ground. Laney noted that private lease rates tend to stay stable or increase.

Disclaimer of Interest Delegation of Authority 

• Attachment: Disclaimer of Interest Delegation of Authority 

• The Secretary asked if it necessary to bring forward the delegation of authority forward if it is greater than 25% easement. Thomas stated it would be required to go to Land Board because it is outside the threshold.

• The Controller noted that in 2014 the same thing was done with timber sales with certain criteria established. He likes the idea here as well if there are certain criteria established that would require certain disclaimers to come before the board under certain circumstances.

• The Secretary asked why we are seeing the increase in requests. The Governor noted real estate is worth more money. Thomas stated there is more real estate activity in Idaho. They realize as they want to sell that property there is a clouded title and they want to resolve it.

• The Secretary asked if the waterway shifts if the state would gain more ground. Thomas confirm that is the case.

Master Fire Agreement Update 

• Attachment: Master Fire Agreement Update 

• The Secretary said it sounds like there was at a meeting of the minds so after your two years of negotiation the agreement is finally there. State Forester Craig Foss said that is correct. This will be a five year agreement from the date of signing.

• The Governor asked if there are chunks of land in Idaho where the feds will now be in charge and if they will let it burn. Foss stated there are now federal lands that will go back to the feds but the expectation is aggressive initial attack.

• The Governor asked what other states do not have an agreement. Foss stated there are agreements in different stages and that Montana recently signed.

• The Governor asked if we are the last to go into agreement. Foss stated for Region 1 and Region 4 that is correct.

• The Governor asked if IDL will need more money to cover additional areas. Foss stated this is the final year of requests then another analysis will be conducted. The goal is not to continue to bring big requests forward.

• The Governor stated that he and Director Miller were very involved and he was pleasantly surprised. He stated this was a Herculean effort. He said we are not going to have the issues we would have had because of the good work that was done.

Executive Session

• none

Adjournment