In October, The Property and Environment Research Center (PERC) published a report, Diversifying State Trust Land Revenue Through Conservation Uses, which examines the growing shift toward conservation-oriented management of state trust lands in the American West. These 40 million acres, granted to the states by the federal government to generate revenue for public schools and other beneficiaries, were historically used for resource extraction like mining and logging. Today, states are exploring conservation uses—such as easements, leasing, and outdoor recreation—to generate short-term income while ensuring the land’s long-term profitability by preserving natural resources. By diversifying their revenue streams to include conservation initiatives, states can fulfill their fiduciary responsibility, protect natural resources, and meet the growing demand for outdoor recreation.
State trust lands are unique from other state-owned lands because they were granted by the federal government under the Northwest Ordinance of 1785 to support public education. After many states sold the land for immediate profit, the federal government imposed stringent usage restrictions on both additional and remaining state trust lands in the 1860s and 1870s to ensure long-term funding for public schools.
Unfortunately for conservation, these restrictive policies prioritize immediate revenue generation, such as requiring upfront payments on any land use, as well as “use it or lose it” rules that limit flexibility in changing the designated use of a land parcel. “Use it or lose it” rules mandate that certain lands must be used for their designated purpose, often logging, or else the right to use the land may be revoked. These restrictions were put in place more than 150 years ago when the industrial environment was different, particularly regarding energy.
The energy landscape of the 1800s was largely driven by resource extraction to support economic growth. While industries like mining and logging remain important today, we now have a more diversified energy portfolio that includes renewables, nuclear, and fossil fuels. Given the reduced reliance on resource extraction, state trust land policies should adapt to the changing markets and diversify their revenue streams, as the energy sector has.
Some stakeholders worry that expanding conservation uses on these lands could hurt the cattle ranching and logging industries. While these concerns are real, states have a duty to adapt to changing market demands and consider diversified revenue opportunities. While traditional resource industries have declined since the 20th century, the outdoor recreation industry has seen remarkable growth. In fact, there were 175.8 million participants in outdoor recreation in 2023, up from about 160 million in 2020. This surge in participation reflects the broader growth of the sector. According to the Bureau of Economic Analysis, the industry saw a 4.8% increase in inflation-adjusted terms in 2022—exceeding the 1.9% growth of the overall U.S. economy. This represents a huge opportunity for these lands to capitalize on a flourishing industry.
According to PERC’s report, conservation-oriented management of state trust lands includes conservation leasing, conservation easements, and land sales, exchanges, and transfers. Conservation leases allow land to be temporarily leased—for periods between 10 to 50 years— with the goal of protecting natural resources, wildlife, and cultural heritage. Conservation easements, which can be temporary or permanent, require land preservation in exchange for monetary compensation, often in the form of tax credits. Both leases and easements can be held by private or public entities; however, some states, like Montana, restrict easements to government agencies and NGOs. Lastly, land sales, exchanges, and transfers help manage these lands by selling less valuable parcels, exchanging land for better use, and transferring land to conservation agencies.
These tools can help meet the growing demand for outdoor recreation and tourism while preserving the original purpose of state trust lands. By creating parks within these lands, conservation leases, and easements could create spaces for various recreational activities, such as hiking, biking, birdwatching, and camping. Not only do these activities provide public enjoyment, but they also help foster a deeper appreciation for the natural environment.
Additionally, these programs could facilitate fishing and hunting, which are integral to conservation. Managed hunting and fishing programs contribute to wildlife management, help control populations of certain species, and fund conservation efforts through licensing fees and excise taxes on equipment. This approach not only opens up more public access to the land, but also supports conservation efforts, ensuring that these lands continue to be valuable for future generations.
Currently, outdated legal barriers and land use restrictions are holding back the potential for conservation on state trust lands. As a result, land managers cannot tap into new revenue opportunities, like conservation and outdoor recreation. To better utilize these lands, states should reform their policies. This includes creating separate land leasing programs for conservation and revising “use it or lose it” laws that limit participation. Doing so would unlock new revenue, preserve the value of state trust lands, and fulfill fiduciary duties while supporting environmental goals.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
