'Green' Pork in Montana

[BigHornRam]

Still think PCL is a dog, Jose?

Farm bill provision allows state to buy Plum Creek land
Posted on May 15
By MICHAEL JAMISON of the Missoulian



Montana could purchase vast forested swaths of Plum Creek Timber Co. land, valued at hundreds of millions of dollars, under a little-known provision tucked into the nation’s farm bill.

That $307 billion piece of legislation passed through the Senate on Thursday, after clearing the House a day before.

Congressional critics called the provision “green pork,” and complained the program’s narrow criteria were met only in Montana, where Plum Creek owns 1.2 million acres.


The provision, pushed by Sen. Max Baucus, D-Mont., would allow states or nonprofit groups to issue $500 million in federal tax-credit bonds. Money raised would buy up critical forestland now being eyed for real estate development.

“Max doesn’t want to see these prime hunting and fishing lands turned into golf courses, condos and strip malls,” said Baucus spokesman Barrett Kaiser. “Private timberland is being gobbled up for development, and this provision gives states the tools they need for land conservation.”

Local governments like that idea, worried as they are about the public costs of servicing new residential neighborhoods in the woods, and conservationists like it, too, as it ensures recreational access and wildlife security.

Under the provision, the state or a nonprofit would sell up to $500 million in tax-credit bonds to an investor. In return, the investor would receive a tax credit of somewhat more than the initial $500 million.

The state or nonprofit then would use a portion of the money to purchase key lands. The remainder would be invested, so that when the bond matured, the issuer could pay back to the federal treasury the $500 million in deferred taxes.

The provision would cost taxpayers an estimated $250 million over 10 years n the additional tax credit claimed by the bond buyer, plus the interest lost on tax money not collected.

An alternative allows the state or nonprofit to forego the bonds and simply receive a $250 million payout from the federal government for purchase of the forest lands.

To qualify for Baucus’ “Forestry Bond” program, the woodsy parcels must be adjacent to U.S. Forest Service lands, must be at least 40,000 acres in size, and must be covered by a native fish conservation plan approved by the U.S. Fish and Wildlife Service.

(In 2000, Plum Creek signed onto just such a plan for its lands in Montana, ensuring fish would be protected even as logging continued.)

“However green it may seem, this provision is little more than a massive corporate subsidy for a single company,” said Rep. Eric Cantor, R-Va.

“That’s ridiculous,” countered Melanie Parker. “This is about people and places, not corporations and Congress. The benefits all go to communities, not companies.“

Parker is director of Condon-based Northwest Connections, working in an area where Plum Creek real estate sales have been notoriously hot, and money for conservation deals has been increasingly scarce.

“What this does,” Parker said, “is help communities confront what is the one single issue that has the potential to change the entire face of western Montana.”

For more information, read Friday's Missoulian or go to Missoulian.com.

 

[TheTone]

Interesting, Is this a one time insert into the farm bill or will it be kept in future generations. I can see this potentially having implications in Idaho in the future. Who is going to carry the contract on the lands? Will they be converted to forest service, state fish and game lands, or maybe school trust lands?

 

[shoots-straight]

Max has done some good things for Montana, I guess that's why he's been in Congress so long.

 

[1_pointer]

That sounds like a pretty good deal. But, like most things, the Devil's in the details and I like to hear some of the answers to Tone's questions. But, at first blush that looks like a pretty good deal for MT and hopefully for the public...

 

[BigHornRam]

I read somewhere that at least 50% of the purchased properties would go to the USFS, that's why the land needs to be adjacent to Forest Service land to qualify. I'm not big on any 'pork' spending, but this one sounds as good as it gets when it comes to that.

 

[BigHornRam]

More Information

As well as the conservative National Reviews political spin on this. I can think of worse ways to spend $250 million in taxpayer money.

HELENA — Some federal House Republicans are accusing Democratic Sen. Max Baucus of inserting a $500 million "tax earmark" into the $307 billion federal farm bill the Senate passed Thursday.


The House overwhelmingly passed the bill Wednesday.

The Baucus-authored provision authorizes the issuance of $500 million in tax-credit Qualified Forestry Conservation Bonds, which can be used for forest purchases meeting the following criteria:


Some portion of the land acquired must be adjacent to U.S. Forest Service land;


At least half of the land acquired must be transferred to the Forest Service;


All of the land must be subject to a native fish habitat conservation plan approved by the U.S. Fish and Wildlife Service; and


At least 40,000 acres must be acquired.

Critics — some of whom dubbed the measure "Baucus Bonds" — say there's only one piece of land in the country that meets those criteria: a portion of the 1.6 million acres Plum Creek Timber Co. owns in Montana. The company wants to sell that portion to the Nature Conservancy.

"This piece of land happens to lie predominantly in the state of Montana and is owned by timber giant Plum Creek," Rep. Eric Cantor, R-Va., said in floor debate last week.

Cantor introduced a motion that would have struck the Baucus provision from the bill, but it was defeated in a House vote. Republican Rep. Denny Rehberg of Montana voted against Cantor's motion.

Bridger Pierce, a spokesman for Rehberg, said the Baucus provision, "was in Montana's best interest, and Denny voted accordingly."

Rep. Jim McCrery, R-La., said Baucus' measure is less of a tax provision than it is an appropriation to the Nature Conservancy to buy Plum Creek land. He added that he believes it has no place in the farm bill.

"It's an appropriation disguised very cleverly as a forest tax credit bond," McCrery said. "I don't know if $500 million is an appropriate amount of money for this piece of property. ... I don't know what the Nature Conservancy might have offered for this piece of property. But my guess is that when you have a $200 million subsidy from the taxpayers, it just might distort the market. It just might raise the value of land in that particular parcel and all around that parcel."

According to a joint taxation committee report, the forestry bond provision would cost the federal government about $250 million over the next 10 years.

Baucus' spokesman, Barrett Kaiser, said the measure creates a national program that is a model for conservation-financing initiatives to prevent sensitive lands from being sold to developers. He denied that the provision targeted any specific project or sale.

"The Fish and Wildlife Service has identified seven different areas that this provision could be applicable that would qualify for the bonding proposal," Kaiser said. "Max is establishing this to be a model to establish conservation projects in Montana and across the country."

In 1999, Plum Creek reorganized from a timber company to a real-estate investment trust and began selling land to developers for high-end residential developments. Forest advocates, local and state officials and environmentalists in Montana and around the country have been frantically looking for ways to acquire those lands to stall or prevent residential sprawl deep into the forest lands.

Carol Guthrie, a spokeswoman for Baucus, recently told the National Journal that "Sen. Baucus is looking for ways to prevent pristine lands from being turned into golf courses, strip malls and condos."

"If anybody is a beneficiary of this bill, it's the American people," Kaiser said. "It's the folks who want to take their kids hunting and fishing on these pristine lands."

Critics say the measure was the result of a back-room deal between Plum Creek, the Nature Conservancy and Baucus' office to federally finance a portion of a sale of tens of thousands of acres of Plum Creek land to the nonprofit conservation group.

A Nature Conservancy official said in an e-mail that the organization does not have a deal with Plum Creek or any other timber company.

"We have in the past, as you may know, worked with communities in the Blackfoot (Valley) on purchasing 88,000 acres from Plum Creek," Kat Imhoff, the Conservancy's Montana state director, stated in an e-mail Thursday afternoon. "And we continue to be in touch with Plum Creek, both since they are Montana's largest landowner and due to our past collaborative success. As in the past, our practice also is to not discuss specific real-estate negotiations, no matter what the situation."

In her e-mail, Imhoff stated that the Nature Conservancy and other groups such as the Trust for Public Lands "have been working on these complex issues for years trying to find solutions."

"We are grateful to Sen. Baucus for stepping up to help create new tools," Imhoff wrote.

According to the National Review Online, Plum Creek spent about $220,000 lobbying Congress in the first quarter of this year, and its political action committee gave $400,000 in campaign contributions to members of both parties over the last decade. That article also states that Plum Creek employees donated $16,600 to Baucus, chairman of the Senate Finance Committee, this election cycle.

Kaiser said Plum Creek did not approach Baucus about the provision.

"Max was approached by the Nature Conservancy and the Trust for Public Lands," Kaiser said.

Officials for Plum Creek could not be reached Thursday.

Reach Tribune Capitol Bureau Chief John S. Adams at 442-9493, or [email protected]