County forest board lands

AN ACT Relating to directing an audit of county forest board 1
lands; creating new sections; and providing expiration dates.2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
NEW SECTION. Sec. 1. (1)(a) The legislature finds that since 4
statehood, 21 counties took possession of approximately 538,000 acres 5
of tax foreclosed land capable of producing timber. In 1935, after 6
passage of chapter 126, Laws of 1935, those counties deeded those 7
timberlands to the state forest board, now the department of natural 8
resources.9
(b) Chapter 126, Laws of 1935 provided a trust structure, where 10
upon the exchange of deeds, the timberlands would be held in trust 11
and protected from sale in perpetuity for the purpose of revenue 12
generation from timber and other products. This trust structure 13
referenced and incorporated chapter 154, Laws of 1923, which 14
recognized the entity that transferred the land to the state as the 15
grantor, with reserved rights to valuable materials on the lands. The 16
1935 law explicitly added "forest products" to the list of valuable 17
materials, and provided for the deeded timberlands to be administered 18
by the state as trustee, with the grantor counties as the 19
beneficiaries of the future net revenue from timber harvests.20
H-2646.1
HOUSE BILL 2327
State of Washington 69th Legislature 2026 Regular Session
By Representatives Dent and Reeves
Prefiled 01/08/26. Read first time 01/12/26. Referred to Committee
on Agriculture & Natural Resources.
p. 1 HB 2327
(c) As evidenced in historical documents, the counties that 1
deeded timberlands to the state did so under the explicit 2
understanding that by granting the land, they would create a 3
perpetual trust. In exchange for the current value of the land, the 4
county beneficiaries would receive the future benefit of perpetual, 5
protected timber revenue. 6
(d) Chapter 126, Laws of 1935, like the enabling act, imposed 7
upon the state similar fiduciary duties, like federal grant land 8
trusts, in the management and administration of the county forest 9
board trust lands, referred to in statute as "state forestlands." The 10
Washington state department of natural resources is the trust manager 11
and manages these lands on behalf of the state. As the trust manager, 12
the department of natural resources' duties to the trust 13
beneficiaries are bound both by statute and by common law trust 14
principles. 15
(e) Since 1935, the legislature has amended the 1935 law multiple 16
times, but always preserved the fundamental trust structure. The 17
recent Washington supreme court case Conservation Northwest v. Franz 18
(Conservation Nw. v. Comm'r of Pub. Lands , 199 Wn.2d 813 (2022)) 19
recognized the department of natural resources' enduring and express 20
trust obligation to harvest timber on these lands for the generation 21
of revenue to the county beneficiaries. 22
(f) During the same period, the management of these trust lands 23
has become significantly more complex. Timber harvest has been 24
increasingly restricted by other values and interests, including both 25
mandatory and discretionary environmental policies. This has resulted 26
in continuously lower harvest volumes and associated loss of revenue 27
to the county beneficiaries. 28
(g) Trusts are one of the oldest legal concepts, and since their 29
inception, have been based on principles of fairness and equity. To 30
preserve and enforce these fundamental principles, a trust structure 31
must provide ascertainable standards and transparency for a 32
beneficiary to evaluate the performance and ensure protection of 33
their rights. 34
(h) The legislature finds that a review of the current statutes 35
and trust management of the county forest board lands is needed to 36
inform potential statutory adjustments. These adjustments may be 37
necessary to ensure the trust structure adheres to the conditions 38
under which counties exchanged their lands and to fundamental trust 39
concepts. The legislature intends to direct the joint legislative 40
p. 2 HB 2327
audit and review committee to review the existing trust structure and 1
terms, analyze the management of the trusts under that structure, and 2
provide recommendations for improvement. 3
(2) This section expires June 30, 2028. 4
NEW SECTION. Sec. 2. (1) The joint legislative audit and review 5
committee, in consultation with a third party with relevant legal 6
expertise, shall review:7
(a) The structure and parameters of the trust established in 8
1935, including applicable common law trust principles, under which 9
counties transferred tax foreclosed forest lands to the state for 10
management; 11
(b) The performance of the trust and of the department of natural 12
resources as trust manager, in accordance with the trust structure 13
and parameters and the applicable common law trust principles. The 14
review of the performance of the trust must include, by county, the 15
volume of timber offered for sale and that not offered for sale over 16
the past three decades pursuant to the sustainable harvest 17
calculations; and 18
(c) The structures and parameters of other trusts established for 19
comparable purposes, including the use of ascertainable standards and 20
other methods by which trusts provide transparency and performance 21
measures to enable the protection and enforcement of beneficiaries' 22
rights. 23
(2) The joint legislative audit and review committee shall 24
analyze the findings of the review under subsection (1) of this 25
section and develop recommendations for any adjustments to the trust 26
structure or parameters to ensure adherence to the conditions under 27
which counties exchanged their lands and to fundamental trust 28
concepts as described in section 1 (1)(g) of this act. The committee 29
must consider, but is not limited to, the potential application of 30
other trust examples reviewed under subsection (1)(c) of this 31
section. 32
(3) The joint legislative audit and review committee shall submit 33
its findings and recommendations to the appropriate committees of the 34
legislature by December 31, 2027. 35
(4) This section expires June 30, 2028. 36
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