Bill to Exclude Nonprofits from State Land Leases Could Scuttle Flathead Valley Outdoor Recreation Programs

A bill recently introduced in the Montana Legislature would restrict nonprofit organizations from leasing state land, a measure that, if enacted, would scuttle outdoor-recreation based programs across the Flathead Valley, including shooting ranges, ski and snowmobile clubs, veterans food pantries, faith-based summer camps, and trails programs.

House Bill 647 is sponsored by Rep. Brandon Ler, R-Savage, who told members of the House Natural Resource Committee on Feb. 26 that he introduced the measure as a way to prioritize the interests of agricultural producers, including farmers and ranchers, over those of tax-exempt 501(c)(3) charitable programs. Ler said nonprofit organizations with state land leases compete against “hard-working Montanans” by removing parcels from the state’s production inventory.

“My reasoning behind this is hardworking people in Montana, mainly agriculture, you know, it’s land that they can make a living off of, rent from the state, with dollars going toward the state, and I just believe they should have the first right to take this opportunity to rent state land,” Ler said. “I don’t want it to be taken up by nonprofits. Nonprofits don’t pay any income tax into the state or into the federal government like agriculture does.”

Several proponents spoke in favor of the bill, including Miles Hutton, a Blaine County commissioner and rancher in north-central Montana who said “nonprofits use non-taxable charitable funds to compete with private ranchers and farmers who work at a disadvantage with taxable income.”

“It’s not a fair playing field,” Hutton said.

Shelby DeMars testified in favor of the bill on behalf of United Property Owners of Montana and echoed Hutton’s concerns, saying “we don’t want to see nonprofits competing with individual farmers and ranchers trying to make their operations work, which often includes leasing state land.”

Opponents of the measure pushed back against those concerns, saying it’s unusual — if not unheard of — for a nonprofit to face any competition when bidding on a land lease. Meanwhile, the bill would affect nearly 200 individual leases between the Montana Department of Natural Resources and Conservation (DNRC) and about 40 nonprofit organizations, providing a range of outdoor recreation opportunities across the state, including many in the Flathead Valley.

Ryan Weiss, deputy trust lands administrator at the DNRC, said he’s not aware of any cases in which a lease with a nonprofit removed trust land from agricultural or timber production.

“We have approximately 200 agreements with 40 nonprofits ranging from conservation and agriculture groups to faith-based organizations, civic educational, and recreational entities,” Weiss told members of the House Natural Resource Committee on Feb. 26. “A lot of the time, a nonprofit will lease land that’s classified as timber, or that’s classified as agriculture, in order to maintain or groom trails for recreational users. But that doesn’t remove the land from production.”

The agency is required to generate revenue for public schools and other institutions through agriculture, grazing, commercial timber, mineral development, commercial development, and licenses, including conservation licenses for public use. In determining the “highest and best use” of state trust land, Weiss said the agency will often enter into a recreation-use lease with an organization on parcels that are classified as agriculture or timber. However, rather than remove the land from under that classification, the agency deems the uses as “compatible,” allowing them to function in tandem.

“In those instances, which would be a significant portion of the 40 nonprofits that are outdoor-recreation based, they are not taking land out of production,” he said. “It is essentially a stacked use that is compatible with the classified use.”

According to the preliminary results of a public records request the Beacon submitted to DNRC, nonprofit organizations with a state land lease in northwest Montana include: the Cabinet Ridge Riders, a sports and recreation club in Trout Creek; Camp Ponderosa, a veterans training and support center on the Swan River State Forest; Flathead Valley Disc Golf; the Future Farmers of America; Glacier Nordic Club, a cross-country skiing program based in Whitefish; the North Shore Nordic Club; the North Valley Sportsman Club, a shooting range in Columbia Falls; the NW Montana Veterans Stand Down and Food Pantry in Evergreen; the Seeley Lake Driftriders Snowmobile Club; and Snow Action Sports in Whitefish.

Last fiscal year, recreation on trust land contributed more than $2.3 million to public education, according to DNRC.

For 22 years, the North Shore Nordic Club has paid an annual $800 land use license in order to groom seven miles of trails on parcels managed by the DNRC in Bigfork. The bill’s introduction this week prompted a call to action from the nonprofit ski club, which sent an email blast urging its supporters to “Save Bigfork Community Nordic Center!” and urged them to submit written comment opposing the legislation.

But it’s not just outdoor-based recreation opportunities that opponents of the measure worry are at stake.

Mark Aagenes, of The Nature Conservancy, said the nonprofit organization operates a community grass bank in north-central Montana to provide grazing access for local families working in agriculture in exchange for adopting sustainable practices on their own property. The partnership helps preserve grasslands, Aagenes said, as well as promote the region’s ranching heritage.

“We prioritize ag families, and we prioritize being able to offer those properties for grazing,” Aagenes said. “We also really try to make sure there are opportunities for young families to make sure the next generation of ranchers is going to have a chance to make a living off the land.”

Because The Nature Conservancy’s land portfolio encompasses parcels it leases from the state, however, “this bill would impact our ability to provide grass to the community.”

Patrick Yawakie, speaking on behalf of the Blackfeet Nation, the Confederated Salish and Kootenai Tribes, the Fort Belknap Indian Community and the Chippewa Cree Tribe of Rocky Boy, said the tribes he represents “all have working partnerships with nonprofits who work to protect cultural land and resources in the area as well as bison restoration efforts” that require state land leases.

“This would be harmful to nonprofits who provide food security to rural and low-income communities in the state,” he said, specifically mentioning the People’s Food Sovereignty Program on the Flathead Indian Reservation.

Lorianne Burhop, policy director of the Montana Nonprofit Association, said prohibiting the state from leasing land to nonprofits “discriminates against nonprofits as a class of corporation in Montana, treating nonprofits different than our for-profit counterparts.” She referred to impacts to the North Shore Nordic Club as an example of the bill’s unintended consequences.

“Thousands of cross-country skiers enjoy these trails every winter,” she said. “This bill would shut down that organization and the service they provide to the community. It’s not the place of the government to interfere in the marketplace in this way. Nonprofits should have the same opportunity to access state land leases as anyone else. It’s in the state’s and our communities’ best interest for nonprofits to have the option to lease state land to provide programs and services that make our state a better place for all.”

Although a DNRC attorney was not on hand at the committee hearing to field questions about the constitutional legality of the bill, Weiss said he’d look into it.

“I am not an attorney, although I think it would be prudent to check with one to ensure we are on the right side of the law with this,” Weiss said of HB 647, in response to a question about its legality from Rep. Marilyn Marler, D-Missoula.

Marcus Strange, of the Property and Environment Research Center (PERC), said Montana has a duty to maximize revenue from state trust lands, and that outdoor-based recreation programs have strengthened the bottom line, not detracted from it.

“This bill elevates certain interests over others and frankly takes potential actors and critical revenue away from local schools and out of the market,” Strange told the committee. “All interests including [non-governmental organizations] should be at the table while we let the competitive bidding process determine which offers will meet the state’s trust duties to maximize revenues from these lands.”

“Our perspective is these lands can maintain multiple uses that conservation access and agriculture can work together and that there should be a collaborative approach,” Strange continued. “So we feel that keeping all interested parties at the table and in the market is the best solution. Conservation and agriculture are compatible and can go hand and hand on these parcels.”

Frank Szollosi, of the Montana Wildlife Federation, described it as “an access issue for rank-and-file people who like to hunt and fish and recreate.”

“We appreciate the access that is provided by all landowners across Montana, including the state,” Szollosi said.

Acknowledging the complexity of the issue, Ler, the bill’s primary sponsor, said he “may have bit off more than I can chew” and offered to provide the committee with “a couple amendments to make sure that a veterans hospital doesn’t get kicked off.”

As of publication time, the amendments still had not been attached to the bill’s status and the committee had not taken action.

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