Legislation to change natural resources fund sparks outcry

Posted at 8:54 AM, May 27, 2017

LANSING, Mich. (AP) — Lawmakers’ bid to exert more control over how the state buys and improves land for public recreation and conservation is hitting stiff resistance from Gov. Rick Snyder’s administration and sparking a constitutional conflict.

The state Senate this past week unanimously voted to issue more grants from the popular Michigan Natural Resources Trust Fund than recommended, a break from what is typically a rubber-stamp process. And in a closer vote, the Republican-controlled chamber approved new rules for how the money is spent each year — requiring, for example, that 25 percent be used for development projects instead of the current mandate that no more than 25 percent go toward recreation facilities.

The fund consists of royalties paid by oil and gas development companies that buy and lease state-owned mineral rights. Used exclusively to purchase and improve land for public recreation and protection of natural features, it has awarded more than $1 billion for trails, parks, boat launches and other projects in every county over its 41-year history — including Belle Isle and the Department of Natural Resources Outdoor Adventure Center in Detroit, and swaths of land in the Upper Peninsula.

The fund has accumulated a maximum $500 million in principal, so royalties now go to the Michigan State Parks Endowment Fund. But interest and earnings on the $500 million is still used for land and recreation projects every year.

Legislators are frustrated that the Natural Resources Trust Fund board is not spending more of the money above the cap.

Instead of allocating $47.6 million for 27 acquisitions and 87 development projects per the request, the Senate added $7.7 million for another 43 recreational projects for which applications were submitted — many of them at parks and trails. Projects include splash pads in South Haven and

Gibraltar, beach improvements in Lake Odessa and a mountain bike park in Munising.

“I think the (GOP) caucus and the Senate all agree that they ought to go in this. They have the money. We’re doing it,” said Sen. Darwin Booher, an Evart Republican who is sponsoring the legislation. “This is oil and gas money that belongs to all the people. Use it. That’s what it’s for.”

The fund would have at least $580 million after this year’s grants are issued.

The state Department of Natural Resources — whose director sits on the trust fund’s five-member board — opposes the bills, calling them unconstitutional. The agency has asked Attorney General Bill Schuette for a legal opinion.

“It’s very clear in the constitution that the trust fund board makes the recommendations on which projects should be funded. And because they didn’t recommend all of the projects to be funded, then the Legislature really didn’t have the authority to add projects,” said Steve DeBrabander, who manages the DNR’s grants section. “While we’re all for public outdoor recreation, we do have a process that’s been very successful, that’s very accountable and we believe follows the constitution.”

The legislation will next be considered by the GOP-led House.

Administration officials are concerned about a number of proposed changes in a bill that won approval 24-14, with all 11 Democrats and three Republicans opposed. One change would ensure that a quarter of yearly spending goes for recreation projects, a revision to a provision that says up to a quarter must be used for that purpose.

The board should have flexibility if there is a “once-in-a-time, incredible” opportunity to buy land for the public, DeBrabander said.

He also criticized provisions that would permanently let lawmakers add more projects than recommended — as long as they have been scored by the board — and give local governments their grants upfront instead of reimbursing them gradually.

Environmentalists said the bills would “politicize” a nonpartisan process.

The Michigan Environmental Council cited a provision that would require the state to apply for and be rejected for trust funds before it could use other funds for outdoor recreation projects. Another would let the state use trust funds to buy land previously acquired with federal money.

“Wasting trust fund dollars on land already in public hands would be fiscally irresponsible and contrary to the fund’s purpose, which is to expand and improve opportunities for Michigan residents to enjoy the outdoors,” President Chris Kolb said in a statement. “It’s one of many provisions in this bill that just don’t make much sense and raise a fundamental question: Why are lawmakers messing with a system that has worked remarkably well for more than 40 years?”

But top Republicans defended the legislation.

“The constitution is very clear — that the Legislature shall provide by law for the implementation of the Natural Resources Trust Fund,” said Senate Appropriations Committee Chairman Dave Hildenbrand of Lowell. “Many members of the Legislature want to ensure the trust fund process is working in a transparent and efficient manner, and that we are utilizing and leveraging the trust fund resources to the best of our ability.”