Legislative Services Agency Office of Fiscal and Management Analysis 200 W
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LEGISLATIVE SERVICES AGENCY OFFICE OF FISCAL AND MANAGEMENT ANALYSIS 200 W. Washington St., Suite 301 Indianapolis, IN 46204 (317) 233-0696 iga.in.gov FISCAL IMPACT STATEMENT LS 6070 NOTE PREPARED: Dec 8, 2020 BILL NUMBER: HB 1222 BILL AMENDED: SUBJECT: Old Forest Areas in State Forests. FIRST AUTHOR: Rep. May BILL STATUS: As Introduced FIRST SPONSOR: FUNDS AFFECTED: GENERAL IMPACT: State & Local X DEDICATED FEDERAL Summary of Legislation: The bill requires the Department of Natural Resources (DNR), before January 1, 2022, to designate at least one undivided area comprising at least 10% of each state forest as an old forest area. It provides that, wherever possible, the size of a designated old forest area must be at least 500 acres. It sets forth certain purposes to guide the DNR in designating the old forest areas. It prohibits the DNR from conducting or allowing timber management in the old forest areas. The bill requires the DNR to produce and keep on file maps and legal descriptions of the designated old forest areas. It provides that the designation of the old forest areas may not affect hunting, fishing, and other recreational uses of the state forests, the maintenance of access roads in the state forests, or rights of access through the state forests. Effective Date: July 1, 2021. Explanation of State Expenditures: Timber Harvests: The bill prohibits timber management in old forest areas, which would decrease state expenditures associated with timber harvests from the State Forestry Fund by an estimated $6,000 to $20,000 annually. This is the estimated cost (an average of 7% of timber sales) for marking, administration, locating boundaries, and advertising the timber sales. [See Explanation of State Revenues.] Old Forest Area Maps: The DNR states that they maintain spatial and geographic maps and data for all state forests within their geographic information system application and that updating, printing, and providing these maps are considered part of their standard operating procedures. HB 1222 1 Explanation of State Revenues: Summary: The bill prohibits timber management in old forest areas, which would decrease revenue to the State Forestry Fund by an estimated $69,000 to $225,000 annually. The bill states that the old forest areas must be designated before January 1, 2022; therefore, FY 2022 revenues could be lower, but the full revenue impact of the bill might not be experienced until FY 2023. Additional Information: Timber revenues vary from year to year based on many factors such as weather and tree morbidity. Therefore, to estimate the range of revenue loss to the State Forestry Fund, the highest and lowest revenues over a 10-year period were used. Estimated Fiscal Impact on Timber Sale Revenue Assuming 10% Revenue Loss State Forestry Fund (85% distribution) $69,000 - $225,000 Counties (15% distribution) -County general fund (50% distribution) $6,000 - $20,000 -Volunteer fire departments (50% distribution) $6,000 - $20,000 Explanation of Local Expenditures: Explanation of Local Revenues: Counties that have old forest areas would collectively lose an estimated $12,000 to $40,000 annually from net timber revenues. [See Explanation of State Revenues.] State forests are listed below in order of size to indicate the proportional amount of fiscal impact to those counties. State Forest Name County Acres Morgan-Monroe State Forest Monroe County 25,668 Clark State Forest Clark County 25,000 Yellowwood State Forest Brown County 24,425 Harrison-Crawford State Forest Harrison & Crawford Counties 24,000 Jackson-Washington State Washington County 18,000 Greene-Sullivan State Forest Sullivan County 8,900 Martin State Forest Martin County 7,800 Ferdinand State Forest Dubois County 7,700 Owen-Putnam State Forest Putnam County 6,300 Pike State Forest Pike County 4,900 Selmier State Forest Jennings County 355 Fifty percent of the county’s timber sale proceeds are required to be distributed equally to volunteer fire departments within that county that have a cooperative lease agreement or contract with the Division of Forestry, with a maximum of $1,000 per volunteer fire department, unless the county legislative body authorizes a higher distribution. State Agencies Affected: Department of Natural Resources, Division of Forestry. HB 1222 2 Local Agencies Affected: Counties with state forests, and volunteer fire departments in those counties. Information Sources: Auditor’s Database; Cost-Benefit Analysis of State Timber Sales Fiscal Years 2013 - 2017; David Bausman and John Seifert, Department of Natural Resources; https://www.in.gov/dnr/forestry/7694.htm https://www.in.gov/dnr/forestry/files/fo-dnr-dof-2019-annual-report.pdf Fiscal Analyst: Heather Puletz, 317-234-9484. HB 1222 3.