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Land Board Hearing Recap

Tuesday, July 15, 2025

• All board members present, with the Superintendent joining remotely
• Review the Final Agenda
• Download the Meeting Materials

Department Report

Timber Sales Revenue

• Attachment: Trust Land – Timber Sales

• Endowment Timber Sales:

• 8 endowment timber sales sold in June, all with competitive bidding, bringing 67% over appraised value
• 2 sales didn’t sell; will be re-auctioned
• 1 Good Neighbor Authority sale sold, with 95% over appraised value
• Total endowment volume sold: 39.6 million board feet for $11.5 million
• GNA volume: 3.9 million board feet for $680,000+
• July sales offering: 30.5 million board feet, appraised at $9.7 million
• Volume under contract: 493 million board feet worth $142 million
• FY25 revenue to date: $83.3 million; projected $8.7 million in July
• Harvest receipts at 180% and harvest volume at 102% of the three-year average
• Stumpage prices remain strong, averaging $305/MBF, up from $187 last year

• Attachment: Trust Land – Leases and Permits

• 13 non-timber endowment instruments issued in June, including 8 land use permits for mostly short-term uses
• Real estate transactions included:
  • 1 deed acquired
  • 1 deed granted
• 1 easement granted to Payette Land Trust for access in McCall, with a $289,000 payment from the general fund
• Non-timber revenue for FY25 totaled $8.75 million, slightly above forecast
• Revenue exceeded both the three-year average and forecast target
• Permanent fund revenue totaled over $2.6 million, with 81% from sand and gravel
• Agriculture revenue came in about $200,000 under projection due to:
  • One lease in default for $90,000 (now resolved)
  • Another expected payment from the Café Center University lease not yet posted

Fire Season Update

• Attachment: Fire Season Update

Land Bank Aging Report

• Attachment: Land Bank Aging Report

• Current Land Bank balance is just over $76 million

• Balance reflects a recent $10 million transfer to the Permanent Fund

• Transferred amount has been removed from the current Land Bank total

Endowment Fund Investment Board

• Attachments:
  • EFIB Manager's Report
  • EFIB Investment Report

• Endowment Fund finished FY25 up 11.7%, with a strong 3.4% return in June

• Current fiscal year performance is flat, up about 2% through mid-July

• Three-year average annual return is 11.6%, contributing to endowment and beneficiary growth

• Underperformed benchmark by 0.6%, mainly due to domestic equity performance

• Greater allocation to mid and small caps (vs. large caps) hurt performance as large caps, especially the "Magnificent 7," outperformed

• Active managers underperformed benchmarks, particularly in small-cap equities

• Speculative stocks (e.g., AI and crypto companies) surged, while IDL’s managers focused on more stable, profitable firms

• Global equity returns also underperformed, as managers avoided overvalued large-cap tech stocks

• Overall, fund remains strong and conservatively positioned, prioritizing long-term stability over short-term gains

Regular Agenda

Proposed Legislation 2026 Session

• Attachment: Proposed Legislation 2026 Session
• Approved - 5-0

• Forest fire protection assessment structure

  • Current assessment: up to $0.65 per acre for forest land (currently at $0.60) and up to $40 surcharge per improved parcel

  • Proposal includes increasing the improved parcel surcharge from $40 to up to $100

  • Fire deficiency fund balance has been flat; expenditures increasing while revenues have not kept pace

  • Growth in wildland-urban interface increases preparedness and response costs

  • The surcharge increase is aimed at ensuring future funding for wildfire protection programs

  • Approximately 67,280 parcels with residential improvements currently assessed the $40 surcharge

  • The increase could generate about $1 million annually to support fire preparedness and response
• Endowment Land Commercial Lease Term

  • Proposal to extend endowment land commercial lease terms from current 49 years up to 99 years

  • Change aims to align lease terms with industry norms and support commercial leasing opportunities

  • Longer lease terms expected to encourage investment and increase revenue

  • Current 49-year term seen as insufficient by some commercial tenants for financing needs

  • Concerns raised about lease management over a 99-year period and continuity of administration

  • Department assures lease records and management practices ensure smooth transitions despite long terms

  • Further stakeholder input, including from commercial real estate experts, suggested before finalizing

  • Questions raised about extending commercial leases from 49 to 99 years; concerns about permanence and land value changes

  • Suggestions to consider renewal options (e.g., 5- or 10-year rolling renewals) instead of long fixed terms

  • Renewing leases requires re-advertisement due to disposition rules, making rolling renewals challenging on endowment land

  • Department open to revising or withdrawing proposals based on feedback and legislative developments

  • Recommendation to remove fuels reduction from all-hazard proposal for separate consideration

  • Support expressed for extending lease terms but with flexibility to adjust based on stakeholder input

• All Hazard Incident Response
  • Idaho Office of Emergency Management, Idaho Fire Chiefs Association, and Department are developing a statewide MOU for coordinated wildfire and all-hazard response

  • Focus on enhancing Type 3 Incident Management Teams (IMTs) to manage wildfires and other emergencies like hurricanes, floods, tornadoes

  • Department currently lacks authority to mobilize fire service organizations, pay overtime, and cover costs for all-hazard responses effectively

  • Proposal to add new Idaho Code section authorizing use of deficiency warrants for all-hazard assignments, allowing timely response and reimbursement

  • Deficiency warrants enable spending beyond appropriated budgets temporarily for urgent, unpredictable emergencies

  • Current authority sufficient for wildfire but not for other hazards like floods or slides

  • Discussion includes challenges around funding prescribed fire for fuel reduction under this framework

  • Goal is to improve rapid mobilization, resource payment, and cost recovery without affecting wildfire budget limits

  • Legislative challenges may be expected due to nature of deficiency warrants and spending beyond appropriations

Endowment Land Exchange: Benewah County

• Attachment: Endowment Land Exchange: Benewah County
• Approved 5-0

• Exchange Details:

  • County trades 120 acres of timberland with no encumbrances, high timber value, strategic location within endowment holdings.
  • Endowment land trade includes 103 acres with a  gravel pit and rodeo arena.

  • County land appraised higher by $91,000; Department will use Earnings Reserve funds to cover the gap.

• Benefits to endowment include:

  • Higher timber revenue

  • Improved land access and management

  • Elimination of inholdings

• Due diligence completed (appraisals, environmental reviews, third-party validation).

• Financial Consideration:

  • $91,000 value gap in favor of county; proposed to be covered by School of Science ER funds (as Capitol Permanent Fund lacks ER funds).

  • Legal counsel confirmed tax-exempt status of entities makes 1031 exchange rules inapplicable.

• Board Discussion Highlights:

  • Timing delays explained by reappraisal and survey needs after adjusting parcel sizes.

  • Concerns about opportunity cost of using $91,000 addressed—expectation of quick timber harvest return.

  • No public opposition noted; Upriver Saddle Club supports exchange.

Disposition of Driggs 160 Endowment Parcel

• Attachment: Disposition of Driggs 160 Endowment Parcel

• Approved 5-0

• 160 acres of state endowment rangeland near Driggs, ID owned by Charitable Institutions endowment and currently leased for grazing ($963/year).

• A local expressed interest in late 2023; department recommends public auction to maximize endowment revenue.

• The locations is a flat, scenic parcel with high residential and recreational appeal; strong views of the Tetons.

• Disposition process:

  • County commissioners will be notified; have 60 days to object.

  • Parcel will be sold via public auction in Teton County or local office.

  • Auction terms:

    • Non-refundable bid deposit (3% or $10,000 minimum)

    • 3% buyer’s premium

    • No contingencies; buyer covers closing costs within 60 days

• Appraisal completed; department working with real estate advisor to set starting bid.

• Legal classification remains rangeland; reclassification not needed.

• Lessee communication confirmed regarding potential sale.

Executive Session

None

Information Agenda

Proposed Rule IDAPA 20.03.04, Rules for the Regulation of Beds, Water, and Airspace Over Navigable Lakes in Idaho

• Attachment: Proposed Rule IDAPA 20.03.04
• Rulemaking Timeline:
  • Negotiated rulemaking approved by Land Board on Feb. 20, 2024.
  • Comprehensive review scheduled for 2025 under Executive Order 2020-01 (Zero-Based Regulation).
  • Public engagement occurred throughout 2024–2025.

• Public Engagement:

  • Notices posted in the Idaho Administrative Bulletin.
  • Outreach to lessees, real estate associations, agencies, and permit holders.
  • 8 public meetings held with video conferencing options.
  • 38 in-person and 23 virtual attendees.

• Rule Content Highlights:

  • No changes to single-family dock, community dock, or marina decking requirements.
  • No fee increases proposed.
  • Incorporated the International Fire Code by reference to improve safety standards (applies to buildings, fueling stations, and public/commercial structures over water).
  • Fire Code enforced by the Idaho State Fire Marshal.

• Revisions Made:

  • Simplified language and reduced regulatory burden.
  • Reduced total word count and eliminated 27 restrictive words.
  • Clarified vague terms by expanding definitions (e.g., navigational vs. non-navigational encroachments).
  • Removed outdated or redundant provisions.

• Next Steps:

  • Proposed rule will be published in the September 3, 2025 Administrative Bulletin.
  • Public comment will be accepted after publication.

Adjournment