Facing diminishing fossil-fuel income, lawmakers want Wyoming to take a proactive approach to develop some of the state’s 3.6 million acres of trust lands, and recently backed a bill to jump-start that initiative.

Supported by a legislative committee, the draft bill would require the Office of State Lands and Investments to solicit proposals for the “sale, transfer, lease, development or exchange” on school trust and other state trust lands. The deadline for soliciting the proposals would be Aug. 1, 2020.

By October, the office would submit a plan for development, including commercial, retail, industrial, agricultural, recreational and residential development. The development would “maximize the value of the parcels to the greatest extent possible.” Most of the trust land, which the federal government gave to Wyoming at statehood, is dedicated to funding education.

The measure, State trust lands — proposals and study, which the Select Committee on Capital Financing and Investments advanced last month, could have widespread implications for the millions of acres. That’s because it could see the state leasing the property for new types of development instead of relying on the energy sector, which today generates 89% of trust land revenue through leases.

Currently at the state lands office, “they’re not seeking opportunities,” said Speaker of the House Steve Harshman (R-Casper), the bill’s sponsor. “They’re waiting for their phone to ring.”

The bill calls for the office to identify the potential loss of access for hunting, fishing and other recreational activities that would occur with development.

“What if I lose access to my favorite hunting spot, fishing spot?” Harshman asked the committee. “We want to know that.”

The measure riles some sportsmen who prize access to Wyoming’s open spaces.

“We will oppose this bill,” said Josh Coursey, co-founder, president and CEO of the Muley Fanatic Foundation. “When you start talking about the potential loss of access for recreation, that’s a red flag for things we value most in Wyoming.”

Second time at bat

Harshman’s bill is a variant of last session’s HB 294. Representatives passed that measure before it died in a Senate committee.

“Most ideas — it takes a couple of times,” before they are debated, refined and accepted, the House speaker told WyoFile. “I don’t think [the bill is] anything to be afraid of,” Harshman said. The measure is “more kind of an inventory — it could be eye-opening.”

The draft bill does not include, nor does it preclude, conservation as one of the identified uses for the trust lands. Wyoming’s Constitution and current state laws require the lands to be managed for “long-term growth in value and optimum, sustainable revenue production.”

Nevertheless, the state “absolutely” can consider open space values when managing the trust lands, Harshman said. “We actually should consider more of that.

“I’m a hunter too,” he told WyoFile. “We’re not talking about losing any of that stuff. [There’s] zero threat to anybody’s favorite hunting spot or fishing spot.”

Coursey is not convinced. “I was very excited last year to see it defeated,” he said of the precursor bill. “It’s even scarier this time around.”

Open space and access are “an enormous economic contributor” that drives Wyoming’s tourist industry and supports denizens’ lifestyles, he said.

“That’s something we need to hold on to and put at the forefront of the conversation,” Coursey said.

Sportsmen and sportswomen across the state worry that the state “doesn’t take into account these uses,” Rep. Andy Schwartz (D-Jackson) told WyoFile. Trust lands in Wyoming, he said, “have a lot of value that’s hard to quantify.”

Teton Village South?

Residents of and visitors to Teton County and Grand Teton National Park may also take an interest in the bill given the high value and extent of state holdings there. A 640-acre school trust section just south of Teton Village, near the base of the Jackson Hole Mountain Resort ski area, is an asset with infinitely alluring income prospects.

The property is near the luxury Shooting Star Jackson Hole golf development of 182 homes, cabins or lodges. There, one 3,310-square-foot “cabin” currently lists for $5.75 million. Yet on the school trust land, there are only six temporary construction-industry leases, including one for a landscaping business, plus a recreation permit for commercial hot-air balloon flights.

The state could increase revenue there, Jason Crowder, deputy director of the Office of State Lands and Investments, told the committee. “We see that growing into [something] better than a landscape business,” he said, “possibly into a Teton Village South, if you will.”

Development alternatives alarm residents who decry potential impacts to traffic and wildlife, as well as other changes to a once-quiet lifestyle on the west bank of the Snake River.

“Potential local impacts could be very significant,” Schwartz told the committee. “I don’t know how we address that.”

Whose rules would govern development remains undecided, Schwartz said. Teton County regulations may limit building height, density and development patterns. They may require dedicated open space and affordable housing contributions. State ownership might not require such considerations, setting up a conflict. The Wyoming Legislature has demonstrated a willingness to overrule Teton County’s local control as recently as last year.

“I think my constituents want [the parcel] to stay the way it is,” Schwartz said. “Change is not embraced or welcome.”

While Schwartz supports the inventory aspect of the bill, he finds the development element troubling. Once an inventory is made, the process jumps “immediately” to soliciting proposals, he said. He voted for the bill.

“I think there is an intermediate step,” he said.

The Kelly parcel

Harshman also eyes a state school trust section in Grand Teton National Park. The 640-acre property just north of Kelly is a short stroll from another Teton Park state section that conservationists, in conjunction with the federal government, bought for $46 million in 2016. The purchase stopped potential development and gave the federal government ownership.

The Kelly parcel also has significant conservation value, Schwartz said. For Harshman, that land could be used to solve “Jackson Hole Airport problems,” he said, possibly through an exchange.

The airport operates under a lease from the park, which imposes various restrictions and restrains potential expansion. A swap might, or might not, change that. Or it could give the state an interest in Wyoming’s busiest airport and a lucrative enterprise. Exchanging Kelly land for park property at Jackson Hole Airport would be a complex endeavor.

One reason for that complexity has roots in a park expansion decades ago, an effort made possible by Rockefeller family land donations. Because of a caveat in the donation documents, Rockefellers would likely have a say in such an exchange. A deal would require federal and Rockefeller family approval, Schwartz said.

The issue poses “a whole ‘nother question,” far more complicated than developing state land, he said.

Invest or develop?

Given the high value of property in Teton County today, Harshman said it makes him “sick to his stomach” when he thinks of a Teton County school section that sold for $5 million in the early 1990s. Another section that sold near Casper also riles him.

“I just want us to make sure deals like that don’t happen,” he said.

However, $5 million in 1992 could have grown to $103 million today if the state invested the proceeds, according to JP Morgan Chase Co. At issue is whether Wyoming development plans, plus the increasing value of the land, could outpace conventional investing.

Meantime, revenue from state trust lands has been on a roller-coaster ride, Crowder told the committee. Between fiscal year 2015 and FY 2016, the $230 million they generated dropped 32% to $156 million. A crash in the oil and gas market caused the decrease. Declining coal values have also diminished revenues. They are at $179 million in 2019, Crowder said.

Only 6.5% of trust land revenue comes from commercial development, he said. The lands office is always seeking to increase income, he told the committee. But banking on commercial development “may not cover the issue” of declining fossil fuel prices, Crowder said.

In addition to increasing revenue, Crowder’s office also tries to maximize access to state property, he told the committee. Land exchanges, including ones promoted under the bill, could provide more access to resources on and beneath landlocked state land, committee members said.