This is a message from a Ducks Unlimited official being distributed to sportsmen across Tennessee:
Your immediate action is requested to stave off legislative action aimed at eliminating this critical source of funding for wetlands conservation in Tennessee. Please distribute this information to others who may also be in a position to assist.
TENNESSEE
STATE ACTION ALERT - STATE ACTION ALERT - STATE ACTON ALERT
April 15, 2003
Background
In an effort to balance the state budget, the Senate Finance Ways and Means Committee is considering a budget proposal to redirect all real estate transfer tax funds away from the Tennessee Wildlife Resources Agency (TWRA) into the General Fund. Since enactment of the Tennessee Wetlands Acquisition Act of 1986, TWRA has used these funds, derived from a small percentage of each real estate transaction in Tennessee, to acquire, develop, maintain and manage wetland habitat in Tennessee. This funding source currently provides approximately $7 million annually to TWRA; two-thirds of which is used for wetland acquisition and one-third for the operation, maintenance and management of previously acquired wetlands. Approximately $235,000 will be provided to the county governments in lieu of taxes from this fund in 2002. To date, Tennessee has acquired 189,968 acres of wetlands and associated uplands at a cost $67,654,146. A total of 56,000 acres of wetlands have been acquired, approximately 80% of the 70,000-acre state objective for the year 2000.
Issue of Concern
The Finance Ways and Means Committee of the Tennessee Senate is currently considering a budget proposal to permanently divert all (100%) of real estate transfer tax funds away from TWRA and into the General Fund in an effort to alleviate funding shortfalls elsewhere in the state budget.
Implications
If enacted, TWRA's ability to acquire, maintain and manage wetland habitat in the state will effectively be eliminated, thereby limiting their ability to achieve the goals and objectives identified by the Governor¡¦s Interagency Wetlands Committee in the ¡§Tennessee Wetlands Conservation Strategy.¡¨
In the event that TWRA¡¦s transfer tax funding is cut-off, the sportsmen and citizens of Tennessee will feel the impact of reductions in funding in any one or all of the following ways:
- a reduction or cessation of current and future wetland acquisition activities;
- a reduction or loss of TWRA wetland management operation and maintenance activities on any or all TWRA lands;
- reductions in other important wildlife and fisheries programs as a result of redirection of funding into the operation, and maintenance associated with wetland programs;
- a loss in the quality of wetland and waterfowl management programs administered by TWRA, including refuges and waterfowl management areas;
- degradation of facilities, equipment and staffing levels at TWRA-owned and operated areas;
- reduction in the level of societal benefits derived from wetland programs in Tennessee;
- reductions in the ability of Tennessee to provide habitat for wintering waterfowl in the Mississippi Flyway.
During the past five years, TWRA has leveraged these funds many times over by partnering with other state, local and federal governments and several private organizations. The elimination of the real estate transfer tax as a source of funding for TWRA will seriously jeopardize the agency¡¦s ability to meet current and any future funding obligations. If existing obligations are not met, the agency¡¦s credibility as a responsible conservation partner will be damaged and some partners will suffer financial losses.
Call for Action
It is anticipated that members of the Senate Finance Ways and Means Committee will, in the near future, act to reduce or totally eliminate TWRA¡¦s source of funds derived from the Real Estate Transfer Tax. It is critical that members of this committee hear from the conservation community, especially Ducks Unlimited members, expressing their concern for elimination of this funding source. Please take immediate action and contact the members of the Senate Finance Ways and Means Committee (listed below) and urge them to not take any action that would totally eliminate the funding derived by TWRA for wetlands acquisition, operation and maintenance. Given the urgency of this issue, personal phone calls to the Senators or their key staff to outline your opposition to this proposed action will be the most effective. Alternatively, write a letter and fax or e-mail it to them within the next week. One-on-one meetings are also appropriate; however, time is of the essence. Key members of the committee are indicated with an asterisk (*).
Senate Finance, Ways and Means Committee:
*Senator Douglas Henry - Chairman Ph. 615-741-3291/ Fax -2380
*Senator James Kyle - Vice Chairman Ph. 615- 741-4167/ Fax-0221
*Senator William C. (Bill) Clabough - Secretary Ph. 615- 741-2427/ Fax-2180
*Senator Ben Atchley- Ph. 615-741- 3791/ Fax-6098
*Senator Ron Ramsey - Ph. 615-741-4524/ Fax 423-323-6916
*Senator Ward Crutchfield - Ph. 615-741- 6682/ Fax-2886
*Senator John Ford - Ph. 615-741-3304/ Fax-6851
*Senator Joe Haynes - Ph. 615-741-6679/ Fax-2533
Senator David Fowler ¡V Ph. 615-741-1764/ Fax-0280
Senator Roy Herron ¡V Ph. 615-741-4576/ Fax-0161
Senator Tim Burchett ¡V Ph. 615-741-1766/ Fax- NA
Real Estate Transfer Tax: An Overview
In 1986 the time was right for creating a mechanism for conserving Tennessee¡¦s wetlands with a dedicated tax to fund the program. The idea came from two different study committees -- one spawned by the legislature and the other emanating from Governor Lamar Alexander¡¦s administration. The legislature was intent on forestalling regulation of wetlands, while the Governor¡¦s task force on Tennessean¡¦s for the Outdoors set a broader agenda for conserving Tennessee¡¦s natural resources for the enjoyment of future generations.
Despite overlapping recommendations from these two committees and broad public support, Public Chapter 833 (Tennessee Code Title 11, Chapter 14) was not easy to pass. The initial legislation added $.04 to the Real Estate Transfer Tax, directed it to establishing the Wetlands Acquisition Fund, defined requirements for the land to be purchased, mandated purchases be made from willing sellers, and required cooperation between the Department of Agriculture and the Tennessee Wildlife Resources Agency for planning, decision-making and rule-making. Its passage was and still is considered one of the most important bills for conservation in Tennessee¡¦s history. Among the others are those establishing the Tennessee Wildlife Resources Agency and the Tennessee Clean Water Act.
In 1991, the legislation was amended to dedicate $.08 of the Real Estate Transfer Tax to provide three more funds in addition to the Wetlands Funds. In the process, the Director of the Wildlife Agency agreed to lower the Agency¡¦s portion to $.0325 so an Agricultural Fund could be established. The Funds and their portion of the tax are: Wetland¡¦s Fund $.0325, Local Park Land Acquisition Fund $.0175, State Parks Land Fund $.0150, and Agricultural Non-Point Water Pollution Control Fund $.0150. These designated amounts have not changed, although the amount of money has grown because of increasing real estate values and an increase in transactions stimulated by lower interest rates. The legislature has on rare occasion authorized redirecting money from these accounts for a single year; however, it was not always taken, and the authorizing legislation was never permanently altered to do so.
The first $300,000 from the Wetlands Fund was set aside in a separate account for paying county governments in lieu of taxes to make up for lost property tax revenue. Acquisitions by the State Parks Land Fund were later included in this provision. Legislation was subsequently amended to allow for paying taxes directly from these Funds. Likewise, an amendment to pay restoration costs on land acquired by the Wetlands Fund from the interest on the Fund was subsequently amended to allow the money to be paid directly from the Fund. Since 1987, the Wetlands Fund has been amended to allow for the purchase of four large areas of high biological significance located in ecologically important watersheds, yet the focus remains on wetlands. The Agricultural Fund was amended to allow for the funding of best management practices (BMPs) to address both point and non-point source water pollution problems. In 2000, the State Parks Acquisition Fund was amended to allow for the purchase of Civil War Battlefields threatened by development. Doing so helped provide a much needed match for Federal and private dollars.
A review of the history and administration of these Funds reveals that while they have always met their legislative mandates, their operation has evolved over time as better scientific data has become available and in an effort to capitalize on Federal programs. Each Fund has clearly established goals and a defined method for evaluating and recommending projects to Agency oversight committees, boards, or commissions for review before submission. Competition is fierce, only a few of the projects submitted can be funded and the ultimate selection is made by Fund Committees whose members include technical experts and citizen leaders.
Real Estate Transfer Tax: An Overview Page 2
Fund managers and their partners have cooperated to get the most creative use of every dollar in order to meet the many challenges facing Tennessee (see list). Projects have to meet more than one of the highest priorities to be selected and partners know their project must consider creative ways of minimizing on-going operating costs, consequently many local groups are providing volunteer hours and in-kind services for operations.
Since their inceptions the Wetlands and State Parks Acquisition Funds have invested $97,404,146 to acquire 236,468 acres for the state. The Agricultural Resources Fund and the Local Parks Land Acquisition Fund have invested more than $54,473,000 in nearly 15,000 projects that affected all 95 Tennessee counties. Local government, non-governmental organizations (NGOs) and individuals have helped leverage state funds with gifts of cash, land, or easements. Ratios range from a high of 1 (Wetlands Fund) to 1.75 (public and private dollars) to a low of 3 (Agricultural Fund) to 1 (public and private dollars). The later is a smaller match because of a legally mandated Federal match requirement. In many cases there would be no match for federal conservation dollars available to our state without the Real Estate Transfer tax and in all cases it provides the state with increased flexibility.
In the last five years, increasing national attention has been placed on Tennessee because of the threats to our rich biological and cultural heritage. With the help of its partners, Tennessee has been able to utilize the Real Estate Transfer tax to capitalize on more than two dozen Federal matching programs, matching funds from more than 14 private organizations and more than 60 towns and counties. Understanding how the Real Estate Transfer Tax works takes time because it is used in so many ways, yet this flexible approach, balanced by competition and public scrutiny has allowed the state to realize an uncommon gain for its investment. Each year the competition for funds increases as does the ratio of matching funds, any changes will impact this momentum.
REAL ESTATE TRANSFER TAX LEGISLATIVE TIMELINE
1986
The Tennessee Wetlands Acquisition Fund (Public Chapter 833, Tennessee Code Title 11, Chapter 14) was authorized. A dedicated funding stream was established through Tennessee Code Title 67, Chapter 4, which raised the real estate transfer tax by $.04 to $.28 per $100 to record the sale of real estate.
These bills resulted from a Wetlands Task Force created by the legislature to study how Tennessee could best address the emerging concern over wetland loss and an increasing focus on environmental regulation to protect them. The group studied various options used for addressing wetlands loss. Three options evolved: acquisition, regulation, and permitting. Acquisition from willing sellers was selected as the preferred alternative and it was determined to create a dedicated funding stream through legislation based on the Florida model.
The legislature¡¦s Wetlands Task Force coincided with Governor Lamar Alexander¡¦s Commission on Tennesseans for the Outdoors, a complementing initiative to the President¡¦s Americans for the Outdoors. Tennesseans for the Outdoors involved a bi-partisan group of civic, business, conservation, environmental, academic, local government, and state leaders.
The legislation advanced bills and they were endorsed by the administration, with support from a consortium of organizations representing interests from hunting and fishing to birding, hiking, and canoeing. The bill passed when the coalition grew to include county, municipal and business interests, in spite of concerns from the Farm Bureau and the real estate industry.
The legislation specifies certain administrative duties the fund must meet:
„h Property acquired must contain one or more of the following: hydric soils, a dominance of obligate hydrophytes, and bottomland hardwood forest
„h Acquisitions must be on a willing seller basis
„h Selection and purchase must be based on a 5 year plan set out by the Executive Director of the Tennessee Wildlife Resources Agency (TWRA) and the Commissioner of the Tennessee Department of Agriculture (TDA)
„h Interim reports are to be made to the legislature every two years
„h TWRA and TDA Commissioners were empowered to set out rules and regulations
„h Setting aside $300,000 for the Wetlands Compensation Fund to compensate local government for lost property taxes by making payment in-lieu of taxes
1989
Chapter 14 was amended to provide for acquisition of upland hardwood forest previously known as Koopers, now called Royal Blue Wildlife Management Area. Purchase of this biologically and recreationally important site was supported by East Tennesseans and their legislators, who were concerned that their grand division was not receiving a proportional share of the funding although they had important conservation concerns.
„h Amended the Wetlands Acquisition Fund to allow for interest to be used for maintenance and development of land acquired with Fund dollars.
„h Investments were encouraged for site improvement, wetland restoration, reforestation, access, trail development, and maintenance. Associated costs include: project engineering, design, construction, and manpower. Wetlands restoration costs also include installing water control structures and gates, low-level terraces, wells and pumps to facilitate flooding of terraced areas.
Real Estate Transfer Tax Timeline Page 2
1991
Wetland Acquisition Fund was amended with the Local Parks and Recreation Fund Partnership Act (67-4-409), Tennessee Code Title 69, Chapter 14. This amendment created three new Funds and a revised funding mechanism in an effort to realize more, yet not all, of the recommendations outlined by Tennesseans for the Outdoors in their final report. The bill was introduced at the urging of the Environmental Action Fund. Tennessee Recreation and Parks Association and the Tennessee Conservation League also participated in organizing grassroots support and lobbied the bill. It took two years of intensive lobbying, coalition building, and compromise to get this enhancement passed; and it passed by one vote after a compromise gained the support of the farming community and realtors. It should be noted that Tom Hensley, a lobbyist, West Tennessean, and sportsmen who volunteered his time to help, was also instrumental in the passage of this legislation.
The legislature raised the dedicated Real Estate Transfer Tax for conservation from $.04 to $.08 to add other dedicated funds for specific purposes. As part of a negotiated agreement TWRA gave up $.075 of its original $.04 to allow for development of the Agricultural Fund, while accommodating a State Lands and Local Parks Fund. At the same time, TWRA¡¦s Director and TDA¡¦s Commissioner agreed that the Agricultural fund could be used for restoration projects at Reelfoot Lake.
Wetlands Acquisition Fund $.0325
Local Parks Land Acquisition Fund $.0175
State Lands Acquisition Fund $.0150
Agricultural Non-Point Water Pollution Control Fund $.0150
Requirements Common to all of the Funds:
„h Transactions must be made with willing sellers.
„h The Commissioner of Environment and Conservation was included with the Commissioner of Agriculture and the Director of the Tennessee Wildlife Resources Agency Director for planning, site selection and rules promulgation purposes.
„h Legislative reports are to be made every 2 years.
„h Neither unused funds nor interest can revert to the general fund.
Additional Requirements Specific to Each Fund
Local Parks Land Acquisition Fund
„h Provides money for acquiring land for parks, natural areas, greenways, trails, archaeological sites, and for the purchase of land for recreation facilities.
„h Funds can also be used for trail development and capital projects.
„h Requires 50% match. Allows local government to match fund dollars with land, volunteer services, material, or equipment used for project development.
„h Mandates awarding 60% of grants to municipal governments.
State Lands Acquisition Fund
„h Provided for the acquisition of land or easements for state parks, state forests, state natural areas, boundary areas along state scenic rivers, state trail system, and for trail development in the foregoing areas.
Real Estate Transfer Tax Timeline Page 3
Agricultural Nonpoint Water Pollution Control Fund (TCA 67-4-409(l)
The Fund was established to implement a program for the abatement and prevention of nonpoint source pollution that may be caused by agricultural activities.
1997
Wetlands Acquisition Fund: After the $300,000 Wetlands Compensation Fund was exhausted, Public Chapter 542 allowed sufficient and continuing funding of payment in lieu of taxes as well as maintenance for lands acquired with the Funds to be paid directly from the Fund. It allowed Wetlands Funds to be used to acquire Scott¡¦s Gulf and the Bridgestone/Firestone Centennial WMA.
Public Chapter 542 also expanded the Wetlands Fund definition to allow for the inclusion of ¡§adjacent tracts of land¡¨ for restoration and a buffer. Further the definition of wetland was revised to say ¡§by the U. S. Department of Agriculture with the Food Securities Act of 1985, and amendments thereto.¡¨
Agricultural Non-Point Water Pollution Control Fund ¡V Name changed to Agriculture Resources Conservation Fund and it was focused on finding solutions for both point and nonpoint source water pollution. Funding provided for education on Best Management Practices (BMPs) to avoid degrading streams and for implementing BMPs to address existing problems.
1998
Wetlands Fund amended by Public Chapter 955 to allow for the stabilization of Reelfoot Lake for preserving its use as a recreational and natural resource.
Tennessee Wetlands Conservation Strategy, Third Edition, developed by the Governor¡¦s Interagency Wetlands Committee and its Technical Working Group revisited the state of wetlands in Tennessee, reviewed their purpose, the present threats to them, and associated economic costs before committing Tennessee to a 9 point plan of conservation and education, including acquiring 70,000 acres by 2000. This document was signed by the Deputy Governor for Policy, the Commissioners of Agriculture, Environment and Conservation, and Transportation, The Tennessee Director of Rural Economic and Community Development, Director of the Tennessee Wildlife Resources Agency, Tennessee Conservationist for the U. S. Natural Resource Conservation Service, and the Vice President of Water Management for the Tennessee Valley Authority.
2000
Amended State Lands Acquisition Fund (67-4-04) to include historic sites, such as Civil War battlefields.
2002
Public Chapter 864 amended the Wetlands Acquisition Fund for acquisition of International Paper land in Campbell, Scott, and Morgan counties.
Note: In an effort to balance the state¡¦s budget, the legislature has, although rarely, authorized redirecting a portion of the Funds provided for by the Real Estate Transfer Tax (Code 67, Chapter 4) to the General Fund. The money was not always taken in the amount authorized and at no time was the legislative mechanism permanently altered.
CHALLENGES BEING ADDRESSED THROUGH THE MATCHING FUNDS
PROVIDED BY THE REAL ESTATE TRANSFER TAX
Biological Diversity (as reported by The Nature Conservancy, U. S. Fish and Wildlife Service, and Tennessee Department of Environment and Conservation)
„h Tennessee has more federally listed species than all but 4 other states
„h Tennessee has the highest concentrations of freshwater fish and mussel diversity of any state. Further, its mussel populations are ranked as globally significant.
„h Seven of the top 8 most biologically diverse rivers in North America flow through Tennessee
„h Tennessee has the highest percentage of declining breeding birds of any state.
„h Snail Shell Cave in Murfreesboro is one of the most globally important caves in the world. It is ranked among the top ten on the Karst Water Institute¡¦s list of globally impaired caves and is one of only four listed in the United States.
„h Rumbling Falls Cave system near Fall Creek Falls is a recently discovered biologically rich cave with global significance, and it contains one of the largest cave rooms in the United States and the largest in the southeast. The watershed surrounding it is largely privately owned and unprotected.
Forestland (according the U. S. Forest Services Forest Resource Assessment)
„h 79% of Tennessee¡¦s forested land is on private, non-industrial farmland
„h The average forested acreage owned per forested landowner has decreased from 75 to 50 acres in 30 years. If the size and acres per industrial landowner are not considered, the average size of private, non-industrial ownership falls to 17 acres. This size is not always conducive to traditional forest uses making the property more susceptible to development.
Water Quality
On the 29th Anniversary of the American Clean Water Act, Tennessee¡¦s 2002 Ground Water 305(b) Water Quality Report to Congress evaluated the condition of almost 30,000 miles or 50% of the state¡¦s streams, with nearly 70% of those fully supporting their designated requirements and less than 6% supporting none of them. Clean-up attention has heretofore been placed on point source pollution, so that it has declined in relative importance. Current pollutants stem primarily from sources of nonpoint source pollution: siltation (27.9%), habitat alteration (25.1%), pathogens (19.6%), nutrients (9.1%), organic enrichment (6.9%), metals (2.5%), pH (2.2%), flow alteration (1.5%), organics (2.2%), other (3.1%).
Historic Imperative
„h A 5 million year old fossil site near Gray is the largest of its kind in the Eastern U. S. and it was almost lost to development. More land is needed to ensure the integrity for the long-term.
„h Tennessee has 20,000 sites related to 12,000 years of Indian history, more than any other Southeastern state. 100 of these are worthy of protection and threatened by development.
„h In 1998, the U. S. Park Service¡¦s American Battlefields Protection Program released their report evaluating more than 10,500 Civil War Battles according to military criteria. Of those 384 or 3.7% were deemed sites of strategic, tactical or thematic importance to local operations, campaigns, theaters, or the war.
„h Tennessee has 38 of these sites, ranking second to Virginia (128) for sites of most significance. Three of those sites have been lost and nine are under severe threat of loss.
„h Tennessee Division of Archaeology recently completed a Survey of Civil War Era Military Sites in Tennessee, a total of 455 sites are identified of which 61 are open to the public through the driving tour, A Path Divided: Tennessee¡¦s Civil War Heritage Trail.
Challenges Page 2
Habitat/Land Use Change
„h Tennessee ranks 8th among all states for the amount and rate of farm land/green space conversion, according to the American Farmland Trust.
Opportunity Costs
„h Tennessee has an incomparably rich biological and cultural history related to geological changes, ranging from the Mississippi River to the Southern Appalachians and to the many rivers formed by them.
„h This richness, combined with the present rate of land conversion and associated development has focused the nation¡¦s resources on saving Tennessee¡¦s most important cultural and biological assets before it is too late.
„h Federal and state agencies, national and local non-governmental organizations (NGOs) have made Tennessee their highest priority. Staff time and money are being directed here at a rate that cannot be expected to last. If we lose these opportunities to leverage funds for Tennessee, it could be a while before another window of this magnitude recurs.
„h Tennessee has been able to make maximum benefit of the Federal dollars because interest rates have propelled housing sales and refinancing to records heights, dramatically improving the dollars flowing from the Real Estate Transfer Tax. Again, this expanded window of opportunity could soon pass.
„h State partners are keenly aware of the state budget situation and are supportive and mindful of keeping on-going operating expenses to a minimum. For instance, The Wolf River Conservancy, North Chickamauga Conservancy, and Friends of Parker¡¦s Crossroads, annually provide more than 100,000 hours of volunteer labor to provide on-site management for properties they helped acquire.
SOURCES OF MATCHING FUNDS FOR THE
REAL ESTATE TRANSFER TAX 2001-2002
FEDERAL AGENCIES AND PROGRAMS
U. S. Army Corps of Engineers
Section 1135
U. S. Department of Agriculture
Natural Resources Conservation Service
U. S. Forest Service
Forest Legacy
Department of the Interior
Fish and Wildlife Service
Endangered Species
Habitat Conservation Program
State Conservation Agreements
Wildlife Conservation and Restoration Act
Migratory Birds
Neotropical Migratory Bird Act
North American Wetlands Conservation Act
State Wildlife Grants
Land and Water Conservation Fund
Local Parks
Historic Sites
National Park Service
American Battlefield Protection Program
U. S. Department of Transportation
Alternate Transportation Program
ISTEA-21
Enhancement Grant
Trailhead Grant
Viewshed Grant
U. S. Environmental Protection Agency
319 Non-Point Source Pollution Program
NON-GOVERNMENTAL ORGANIZATIONS
Civil War Preservation Trust
The Conservation Fund
Cumberland Trails Conference
Davis Bridge Memorial Foundation
Foothills Land Conservancy
Friends of Parkers Crossroads
National Fish and Wildlife Foundation
National Wild Turkey Federation
North Chickamauga Creek Conservancy
Rocky Mountain Elk Foundation
TN Civil War Preservation Trust
TN Parks and Greenways Foundation
The Nature Conservancy
Wolf River Conservancy
Sources of Matching Funds 01-02 Page 2
LOCAL GOVERNMENTS PROVIDING MATCHING DOLLARS FOR
2001-02 REAL ESTATE TRANSFER TAX FUNDS
Counties:
Anderson
Bedford
Benton
Bledsoe
Bradley
Campbell
Cannon
Carroll
Carter
Cheatham
Claiborne
Cocke
Coffee
Cumberland
Dickson
Fayette
Fentress
Franklin
Gibson
Giles
Grainger
Greene
Grundy
Hamblen
Hamilton
Hardeman
Hardin
Hawkins
Haywood
Henderson
Henry
Houston
Humphreys
Jackson
Jefferson
Johnson
Knox
Lake
Lauderdale
Lawrence
Macon
Madison
Marion
Maury
McMinn
Monroe
Montgomery
Morgan
Maury
McNairy
Obion
Overton
Pickett
Putnam
Roane
Robertson
Rutherford
Scott
Sevier
Shelby
Smith
Sullivan
Sumner
Unicoi
Union
Washington
Wayne
Weakley
White
Wilson
Municipalities:
Ardmore
Arlington
Ashland City
Athens
Baneberry
Beersheba Springs
Bethel Springs
Bristol
Brownsville
Byrdstown
Carter
Cedar Hill
Charlotte
Clarksville
Cleveland
Clifton
Columbia
Cookeville
Cowen
Crossville
Dandridge
Dresden
East Ridge
Englewood
Erin
Erwin
Estill Springs
Etheridge
Etowah
Farragut
Gallatin
Gatlinburg
Germantown
Gibson
Gleason
Gordonsville
Greenbrier
Gruetil-Laager
Halls
Harriman
Humboldt
Huntington
Jackson
Jamestown
Jasper
Jefferson City
Jonesborough
Kenton
Kingsport
Knoxville
LaFayette
LaFollette
Lawrenceburg
Lenoir City
Lexington
Livingston
Loudon
Luttrel
Madisonville
Manchester
Maryville
Memphis
Milan
Minor Hill
Mountain City
Murfreesboro
New Market
Oliver Springs
Paris
Parkers Crossroads*
Pegram
Portland
Pigeon Forge
Powell¡¦s
Ridgely
Rogersville
Rutledge
Rutherford **
Shelbyville
Signal Mountain
Sneedville
South Pittsburg
Sunbright
Tazewell
Waverly
Waynesboro
White Bluff
Woodbury
* Contributed matching funds through the State Lands Acquisition Fund. All other counties and municipalities provided matching dollars of at least 50/50 for the Local Parks Acquisition Fund.
**Town
A PARTIAL LIST OF BENEFITS PROVIDED BY
THE REAL ESTATE TRANSFER TAX
Government
„h Funds provided by the Real Estate Transfer Tax provide state government with greater flexibility, and sometimes the only source for matching Federal program dollars, for address pressing regulatory or preservation concerns.
„h Fund managers and their partners are cooperating to get the most creative use of every dollar in order to meet multiple challenges facing Tennessee (see earlier list). They are also aware and so are the applicants that they have to think about and work at minimizing on-going operating costs.
„h Local government, non-governmental organizations (NGOs) and individuals help leverage state funds with gifts of cash, land, or easements to help meet their constituents¡¦ desire for green space, trails, and recreation areas. Local government depends on these matching dollars to stimulate their own efforts with public and private grantors.
„h Without this dedicated funding sources, gifts of land, such as that for the 9,000 acre Bridgestone/Firestone Centennial Wildlife Management Area could not have happened. Wetlands and State Land Funds can be used to fund administrative costs, such as boundary surveys or pay Finance and Administration¡¦s overhead.
„h All Tennessee counties regularly benefit from one or more of these funds and they also depend on the Payment in Lieu of Taxes it provides.
Wetlands Acquisition Fund
„h 40 counties annually receive payment in lieu of taxes (PLT). From 1986-2002, the Fund has compensated local governments for lost property tax revenues in the amount of $1,415,374.16.
„h Wetlands Fund dollars used to match Forest Legacy dollars make it economically feasible for private, non-industrial forested landowners to keep their land in forest.
„h The Wetlands Fund gives farmers a market for selling and/ or enhancing their land.
„h A study funded by the Fish and Wildlife Service and the International Association of Fish and Wildlife Agencies indicated that in 1996 hunting provided $654,596,825 in sales for Tennessee, with an associated tax benefit of $38,742,176. Tennessee ranks 9th in the nation in terms of economic impacts of hunting and fishing.
Agricultural Resources Conservation Fund
„h Farmers in all 95 counties can compete for nonpoint source agriculture funds through their county Soil Conservation District at a 75% state and federal, 25% landowner match.
„h Much of the nearly $2 to $2.5 million invested through the Agricultural Fund goes directly in the economy, providing payments to: farm supply stores, heavy equipment operators, materials haulers, co-ops, seed companies, etc.
„h While difficult to measure in economic terms, nonpoint source pollution has an impact on human health, cost of water treatment, water management, and power generation according to the EPA/TDEC 305(b) report.
State and Local Parks Land Acquisition Funds
„h Parks provide a quality of life asset valued by citizens for their communities
„h Land around parks typically sells for higher prices and retains its value longer, resulting in higher property taxes
Benefits Provided by Real Estate Transfer Tax Dollars Page 2
„h An April 24, 2002 letter from Tourism Commissioner John Wade, A Path Divided, Tennessee¡¦s Civil War Heritage Trail, (driving guide) ¡§is one of the most popular brochures in our Welcome Centers statewide.¡¨
„h According to 2001 facts provided by the Tennessee Historical Commission: 5.7 million people visited Civil War sites in Tennessee; 6.3 million ¡§virtual visitors¡¨ went to Civil War web sites in Tennessee; 2,000 volunteers gave 47,000 hours of service at the different state Civil War sites, and $14 million in Federal funds were acquired for various Tennessee Civil War sites.
SUMMARY REAL ESATE TRANSFER TAX FUNDS
WETLANDS ACQUISITION FUND
Total Acres Purchased from 07/86 through 02/03 189,968
Includes: Wetlands (Wildlife Management
Areas WMAs and Refuges) 55,974
Royal Blue WMA 50,063*
Bridgestone/Firestone WMA 9,231*
International Paper WMA 74,700*
Total Investment of Wetlands Fund Dollars $67,654,146
*Act amended by the legislature to accommodate purchase of specific watersheds.
Study of 2001-02 Leverage for Wetlands Acquisition Fund
Acreage Value of Land Wetland Fund Public & Private Funds*
133,993 $28.6 million $9.5 million $22,083,905
*Not all inclusive, does not reflect value of land or easements donated by private landowners.
LOCAL PARKS LAND ACQUISITION FUND
1991- 2002
Grant Award Total $29,465,985
Minimum County or Municipal Match $29,465,985
Total Number of Grants 410*
* In accordance with Open Project Selection Process, grants are awarded with the assurance that the project is justified to meet a priority need with adequate public input. Grants have to comply by developing a local plan reflecting state planning. Other compliances include: EEOC, Title IV, and Minority Business Enterprise/Women¡¦s Business Enterprise.
STATE LANDS ACQUISITION FUND
07/1991-12/2002
Total Fund Dollars Invested $29,750,000
Acres acquired (through 12/02) 46,500*
Study of 2001-02 Leverage for State Park Lands Acquisition Fund
Acres Value of Land State Park Fund Federal Private
16,627 $26,700,000 $11,212,983 $14,615,244 $656,559
*Not all inclusive, does not reflect gifts of land or easements by private landowners.
AGRICULTURE RESOURCES CONSERVATION FUND
Total Fund Dollars Invested 1991-2002 $25,007,180*
Minimum Matching Funds Invested @ 25% $6,251,795
Total Participants 14,437
Total Best Management Practices 16,329
Total Acres of Soil Stabilized 413,789
Total Animal Waste System Projects Completed 380
*This Fund operates differently than the others, because the Department of Agriculture keeps some money in reserve for emergency projects. This allows them to work closely with the Division of Water Pollution Control on an emergency basis to help farmers who have or are at risk of receiving a Notice of Violation.
EXAMPLES OF HOW THE FUND HAS BEEN LEVERAGED
Already Completed Transactions:
Bridgestone Firestone WMA
9,000 acres $8,000,000
Wetlands Fund Administrative Costs $238,000
International Paper WMA
74,700 acre appraised at $13,600,000
Wetland¡¦s Fund Investment $ 3,500,000
John Tully WMA
11,500 acres appraised at $16,000,000
Wetland¡¦s Fund Investment $ 5,400,000
Davis Bridge Battlefield (Parker¡¦s Crossroads)
77 acres appraised at $ 727,800
State Lands Fund $ 50,000
*TEA-21 $542,240*, Civil War Trust Fund $107,800, Friends of Parkers Crossroads $27,760
*The Historical Commission had no way of leveraging this portion of the U. S. Department of Transportation¡¦s ISTEA funding until the State Park Acquisition Fund was amended to include funding historical sites. Commission members and their partners had earlier tried to secure dedicated funding for battlefield acquisition by passing vanity license legislation and they were unsuccessful.
Examples of FYE ¡¥03 Opportunity Costs (If the Wetlands Fund is diverted to the General Fund)
Projects On Deck Awaiting Building Commission Action:
Anderson Tulley Phase 2
5480 acre wetlands acquisition $6,000,000
Nature Conservancy Holding Cost through 5/30 $ 343,500*
Matching Funds Already Secured:
Forest Legacy Program (Federal Dollars) $3,477,000
Wetland Fund (State Match) $1,157,841
NAWCA Grant 1 (Federal Program) $1,000,000
NAWCA Grant 2 (Federal Program) $ 209,250**
Wetland¡¦s Fund (State Match for NAWCA) $ 571,252
*Interest accruing at $25,833 per month.
**NAWCA Grant 2 funded for $1,000,000, leaves $790,750 available for other already identified sites but have to have matching Wetlands Funds ($2,158,747) to close. Money reverts in 1 year.
North Chickamauga Creek Tract
115 acres in Chattanooga $ 800,000
Administrative Costs to State Government $ 48,000
North American Wetlands Council Grant $560,000
North Chickamauga Creek Conservancy $160,000
Wetland¡¦s Fund Investment $128,000
ANALYSIS OF REAL ESTATE TRANSFER TAX INVESTMENTS
Fund Income
The amount of tax designated for each Fund has not changed since the Fund was established; however, the annual income has increased as a function of increasing property values and the number of refinancing transactions stimulated by record low interest rates.
Fund Privilege Tax* FYE Annual Income
Wetlands Acquisition Fund $.0325 ¡¦87 $2,670,000
Per $100 ¡¦92 $4,000,000
¡¦02 $7,550,000
State Parks Acquisition Fund $.015 ¡¦92 $1,632,000
¡¦02 $3,684,000
Local Parks & Recreation Fund $.0175 ¡¥92 $1,662,800
¡¦02 $4,000,000
Agriculture Conservation Fund $.0150 ¡¦92 $1,632,000
Real estate transfer tax comes under the privilege tax category
Fund Total Acres Purchased Fund Dollars Invested Cost per Acre
Wetlands 189,968* $67,654,146 $356
State Land 46,500* $29,750,000 $640
*Does not include easements
Leverage Ratio FYE ¡¦01 & ¡¥02 State/Other Projected Income ¡¥03 Projected Match ¡¥03
Wetlands (1/1.4)* $7,000,000 $9,800,000
State Land (1/1.75) $3,400,000 $7,100,000
Local Parks Acquisition (1/1)** $3,700,000 $3,700,000
Agriculture (3/1)* $3,400,000 $1,330,000
* Ratio is partially limited by percent of Federal Match for wetlands and agriculture programs
** Minimum ratio defined by Real Estate Transfer Tax language regulating this fund.
Funds for Operating Dollars (to be moved to TWRA¡¦s already tight operating budget)
Site Management Operating Dollars
Wetlands Fund (present level) $2,750,000*
TWRA Employees Paid to Work on Restoration of Wetland¡¦s Funded Projects
16 employees 90-100% of salary paid from Wetlands Fund
7 employees funded 40-90%
125 people are partially funded
*Custodial level funding $1,750,000
Payment in Lieu of Taxes to County Governments
Wetlands Land Acquisition Fund $ 340,000
Parks Land Acquisition Fund $ 70,000
LIST OF RESEARCH CONTACTS
Tennessee Wildlife Resources Agency
Gary Myers, Director, 781-6552
Ron Fox, Assistant Director, 781-6557
Greg Wathen, Assistant to the Director, 781-6645
Brooks Garland, Attorney for the Agency, 781-6606
David McKinney, Environmental Manager, 781-6643
John Gregory, Chief of Real Estate and Forestry Division, 781-6560
Gordon Martin, Real Estate Specialist,781-6560
Joe Hopper, Biologist III, 781-6500
Lorinda Sharber, Biologist III and GIS Specialist, 781-6560
Tennessee Department of Environment and Conservation
Commissioner Betsy Child, 532.0104
Tom Callery, Assistant Commissioner, 532-4511
Dodd Galbreath, Director Policy Office, 532-8545
Joyce Hoyle, Manager, Local Parks Land Fund, 532-0748
Phelisa Bennett, Coordinator State Land Acquisition Fund, 532-5227
Reggie Reeves, Director Natural Heritage Programs, 532-0434
Paul Davis, Director of Water Pollution Control, 532-0632
Herb Harper, Director State Historical Commission, 532-1550
Fred Prouty, Director, Tennessee Wars Commission, 532-1550
Nick Fielder, State Archaeologist, 741-1588
Tennessee Department of Agriculture
Mike Countess, Assistant Commissioner, 837-5311
Jere Jetter, Assistant Commissioner, Forestry Division, 837-5435
John McClurkan, Director Non-Point Source Pollution Program
and Manager of Agricultural Resources Fund, 837-5305
David Arnold, Assistant State Forester, 837-5426
Paul Ensminger, Manager Forest Legacy Program, 423-263-1626
Tom Womack, Public Information Officer, 837-5100
Non-Governmental Organizations
Environmental Law Center (Arlington, VA)
and Vanderbilt Center for Environmental Management, Linda Breggin, 279-1861
The Conservation Fund, Rex Boner, S. E. Region Vice-President, 770-414-0211
Environmental Action Fund, Paul Davis and Jeanne Nelson for Officers
North Chickamauga Creek Conservancy, Kincaid Mills, Board Member, 423-267-3252
Tennessee Conservation League, Mike Butler, Director, 353-1133
Tennessee Parks and Greenways Foundation, Kathleen Williams, Director, 386-3171
Tennessee Parks and Recreation Association, Candace, Director
Wolf River Conservancy, Larry Smith, Director, 901-452-6500