Forest Service Payments to Counties—Title I of the Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
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Forest Service Payments to Counties—
Title I of the Federal Forests County
Revenue, Schools, and Jobs Act of 2012:
Issues for Congress
-name redactedSpecialist in Natural Resources Policy
-name redactedLegislative Attorney
March 26, 2012
Congressional Research Service
7-....
www.crs.gov
R42452
CRS Report for Congress
Prepared for Members and Committees of Congress
Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Summary
Since 1908, the Forest Service (USFS) in the Department of Agriculture has paid 25% of its
receipts to the states for use on roads and schools in the counties where the national forests are
located. The Bureau of Land Management (BLM) in the Department of the Interior has paid 50%
of its receipts to the Oregon counties where the revested (returned to federal ownership) Oregon
and California Railroad (O&C) grant lands are located. Payments under these programs dropped
substantially in the 1990s, largely because of declining timber sales. In the Secure Rural Schools
and Community Self-Determination Act of 2000 (P.L. 106-393; SRS), Congress created an
optional alternative payment system for these lands, but the law expired at the end of FY2011.
The 112th Congress has considered options for addressing the lower payments from federal lands
due to lower timber sales. One bill, H.R. 4019 (Title I, the County, Schools, and Revenue Trust
for Federal Forest Land), would establish a new payment program; the House Committee on
Natural Resources has ordered the bill reported. The bill would establish the trust with receipts
from certain projects, and give the USFS the “fiduciary responsibility” to undertake projects to
achieve annual revenue requirements in counties that do not opt out of the trust program. The bill
would direct the USFS to calculate the revenue requirements and, to implement trust projects,
establish procedures for public involvement, environmental reporting, and judicial review. The
bill also would direct the allocation and use of the trust payments, and provide appropriations for
the payments until trust projects generated receipts for the trust payments.
H.R. 4019 raises several issues for Congress. One is that, although the trust program has been
described as a replacement for the SRS, the payments would apparently be in addition to the
USFS 25% and O&C 50% payments that had been replaced by the SRS. Also, the fiduciary
responsibility for trust payments makes the counties the primary beneficiary of federal land
management and could restrict the ability of individuals to challenge decisions that they feel
could degrade the federal lands and resources. The annual revenue requirement—60% of average
1980-1999 gross receipts—raises several questions: what would be included in “gross receipts”;
what receipts could be deposited in the trust (e.g., whether deposits to other accounts could
instead be deposited in the trust); how much additional revenue would be needed; and where
those revenues could come from (e.g., how much additional timber might need to be cut, how
many jobs might be created, where the timber could be cut, and what other options might be
feasible, such as permits for currently free uses). Public involvement would be limited to written
comments and objections to proposed and final trust decisions, filed before the required
environmental report is prepared. The environmental report would not need to be made available,
and could not be challenged in court or administratively. Trust project decisions would be
presumed to be in accordance with several laws, such as the National Environmental Policy Act,
the Endangered Species Act, and the National Forest Management Act. The 65% of trust project
receipts that would be paid to the states would be a significant increase over the 25% USFS
payments and the 50% O&C payments. The bill is unclear on the allocation among states; it could
be based on historic receipts or on SRS payments, with substantially different results. There could
also be numerous implementation issues, such as treatment of state education funding, inclusion
of the O&C lands, forests with some counties opting out of the trust payments, existing federal
timber sale requirements, the possible need for implementing regulations, and possible additional
staffing and funding requirements.
Congressional Research Service
Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Contents
Background...................................................................................................................................... 1
Federal Timber Harvests............................................................................................................ 1
Payments for Counties............................................................................................................... 3
Secure Rural Schools Act .......................................................................................................... 4
Title I of H.R. 4019.......................................................................................................................... 5
Section 101. Definitions ............................................................................................................ 5
Section 102. County, Schools, and Revenue Trust .................................................................... 5
Section 103. Opt-Out Option..................................................................................................... 6
Section 104. Determination of Annual Revenue Requirement and Minimum Sale
Level....................................................................................................................................... 6
Section 105. County, Schools, and Revenue Trust Projects ...................................................... 6
Public Review and Comment.............................................................................................. 7
Environmental Review........................................................................................................ 7
Section 106. Distribution of Amounts from Trust Projects ....................................................... 8
Section 107. Payments to Beneficiary Counties from County, Schools, and Revenue
Trust........................................................................................................................................ 8
Section 108. Initial Payments Pending Implementation of Trust Projects ................................ 9
Analysis of Possible Issues for Congress ........................................................................................ 9
Fiduciary Trust Responsibilities and Federal Assets ................................................................. 9
Annual Revenue Requirements ............................................................................................... 10
Gross Receipts................................................................................................................... 10
Receipts Available for Deposit to the Trust....................................................................... 10
Additional Receipts Needed.............................................................................................. 13
Where the Receipts Might Come From............................................................................. 13
Effects If Annual Revenue Requirements Are Not Met .................................................... 16
Public Involvement and Environmental Reporting ................................................................. 16
Allocation and Distribution of Trust Payments ....................................................................... 18
Implementation........................................................................................................................ 20
Provision on State Education Funding .............................................................................. 21
Inclusion of the O&C Lands ............................................................................................. 21
Implementation for Parts of National Forests ................................................................... 21
Timber Sale Practices and Procedures .............................................................................. 22
Regulations for Implementation........................................................................................ 22
Impacts on USFS Staffing and Funding............................................................................ 22
Figures
Figure 1. Federal Timber Sales........................................................................................................ 2
Tables
Table 1. Average and Calculated USFS Annual Payments, by State ............................................. 19
Congressional Research Service
Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Contacts
Author Contact Information........................................................................................................... 23
Acknowledgments ......................................................................................................................... 23
Congressional Research Service
Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
S
ince 1908, the Forest Service (USFS) in the U.S. Department of Agriculture has paid 25%
of its gross receipts from timber sales and most other revenue-generating activities to the
states for use on roads and schools in the counties where the national forests are located.
This was intended to compensate localities for the tax-exempt status of federal lands.1 Similarly,
since 1937, the Bureau of Land Management (BLM) in the U.S. Department of the Interior has
paid 50% of its gross receipts to the counties containing the “O&C lands” (described below).
Payments have declined substantially in many areas due to falling USFS and BLM timber sales.
Congress has enacted temporary programs to sustain the payments at higher levels; the most
recent such program, the Secure Rural Schools and Community Self-Determination Act of 2000
(SRS), expired following payments made for FY2011. Because of continuing concerns about
substantial declines in USFS and BLM timber sales and payments for county roads and schools,
Congress is considering related legislation. Title I of H.R. 4019, the Federal Forests County
Revenue, Schools, and Jobs Act of 2012, addresses federal land management to provide timber
jobs and revenues for county roads and schools.2 The House Committee on Natural Resources
ordered the bill reported on February 16, 2012.
Background
Federal Timber Harvests
The USFS has been selling timber for more than a century. The President was authorized to
proclaim national forests (originally called forest reserves) in 1891.3 Congressional concerns over
proclamations by President Grover Cleveland led to provisions in the Sundry Civil Expenses
Appropriations Act for FY1898 limiting the forest reservations to specific purposes, including “to
furnish a continuous supply of timber for the use and necessities of citizens,” and authorizing the
sale of “dead, matured, or large growth of trees.”4 The first timber sale was in 1899 to the
Homestake Mining Company in South Dakota.
USFS timber sales grew slowly in the subsequent decades. Then, in the 1950s, USFS sales
expanded rapidly, fueled by demand from the post-World War II economic expansion and by the
decline in timber supply from private forests. (See Figure 1.) Except for the 1980 and 1982
recessions, the high USFS timber sale level was sustained through the 1980s. The decline in
USFS sales began in 1990 with litigation to protect the northern spotted owl in western
Washington, western Oregon, and northwestern California. Though commonly believed to be a
result of listing the northern spotted owl as threatened under the Endangered Species Act (ESA),5
1
See CRS Report R42439, Compensating State and Local Governments for the Tax-Exempt Status of Federal Lands:
What Is Fair and Consistent?, by (name redacted) and (name redacted).
2
Titles II and III address different issues, and are not covered in this report. Title II amends the Payments in Lieu of
Taxes (PILT) Program (16 U.S.C. §§6901-6907; for information on the PILT Program, see CRS Report RL31392,
PILT (Payments in Lieu of Taxes): Somewhat Simplified, by (name redacted)). Title III addresses the USFS Recreation
Residence Program that authorized permits and fees for private cabins on national forest lands; for more information,
see the USFS website at http://www.fs.fed.us/specialuses/special-recreation-residence.shtml or contact (name redact
ed), CRS Specialist in Natural Resources
Policy, 7-.... or [redacted]@crs.loc.gov.
3
Act of March 3, 1891 (ch. 561, 26 Stat. 1103), Section 24 (16 U.S.C. §471, repealed in 1976).
4
Act of June 4, 1897 (ch. 2; 30 Stat. 11), 7th and 9th unnumbered paragraphs under “Surveying the Public Lands” (16
U.S.C. §§475-476, the 9th paragraph was repealed in 1976). Commonly referred to as the USFS Organic Act.
5
Act of December 28, 1973 (P.L. 93-205; 16 U.S.C. §§1531-1540). The northern spotted owl was listed as threatened
throughout its habitat on July 23, 1990.
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the original litigation was primarily under a provision of the regulations to implement the
National Forest Management Act of 1976 (NFMA)6 that required management for viable
populations of native species.7 However, USFS timber sales declined in nearly all regions in the
early 1990s, indicating more widespread problems than just northern spotted owls. USFS timber
sales have continued at relatively modest levels for the past two decades, owing to continued
concerns about the environmental effects of timber sales and relatively weak wood products
demand in the United States and globally.
Figure 1. Federal Timber Sales
(in thousand board feet)
16,000,000
BLM Western Oregon Timber
USFS Timber
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
19
4
19 0
4
19 2
4
19 4
4
19 6
4
19 8
50
19
5
19 2
5
19 4
5
19 6
5
19 8
6
19 0
6
19 2
6
19 4
6
19 6
6
19 8
7
19 0
7
19 2
7
19 4
7
19 6
7
19 8
8
19 0
8
19 2
8
19 4
86
19
8
19 8
9
19 0
9
19 2
9
19 4
9
19 6
9
20 8
00
20
0
20 2
04
20
0
20 6
0
20 8
10
0
Source: USFS: Doug Crandall, Director, Legislative Affairs, USFS. BLM: Amy Krause, Legislative Specialist, BLM.
Notes: USFS timber is harvest level rather than sale level, to avoid the spikes in sales from four very large, longterm (50-year) timber sales issued over the 70-year period. BLM timber is sale level from the O&C lands.
The Bureau of Land Management (BLM) in the U.S. Department of the Interior (DOI) also sells
timber. The vast majority (about 95%) of BLM timber sales are from the Oregon and California
(O&C) grant lands in western Oregon. These lands were granted to the Oregon and California
Railroad Company in 1869 for building a railroad north from the Oregon-California border, and
the lands were to be sold to settlers. The 2.5 million acres of timberland in western Oregon were
6
Act of October 22, 1976 (P.L. 94-588; 16 U.S.C. §§1600-1614). The viable population requirement, derived from 16
U.S.C. §1604(g)(3)(B), was at 36 C.F.R. §219.19.
7
S. L. Yaffee, The Wisdom of the Spotted Owl: Policy Lessons for a New Century (Washington: Island Press, 1994).
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returned to (“revested in”) federal ownership under a U.S. Supreme Court decision in 1915 for
violations of the terms of the grant.8 The O&C lands are often understood to include the Coos
Bay Wagon Road (CBWR) grant lands, 74,547 acres of timberland amid the O&C lands. These
lands were granted in 1869 to the Southern Oregon Company to build a military wagon road
between Coos Bay and Roseburg, Oregon, and returned (“reconveyed”) to federal ownership by
an act of Congress in 1919 to terminate litigation over violations of the terms of the original
grant. Federal administration of the O&C and CBWR lands was subject to various statutes until
Congress directed management by the DOI in the O&C Act of 1937.9 Management was initially
by the General Land Office, which was merged with the U.S. Grazing Service in 1946 to create
the BLM. As with USFS timber sales, O&C timber sales declined after 1990, as shown in Figure
1, initially owing to protection of northern spotted owl habitat.
Payments for Counties
In 1908, Congress added a provision to the Agriculture Appropriations Act directing the USFS to
give 25% of its gross receipts to the states for use on roads and schools in the counties where the
national forest lands are located.10 Thus, the money is paid to the state, and the state determines
how much goes toward roads and how much toward schools (or leaves some or all of the
discretion to the counties).11 The state also determines which programs can be funded (e.g.,
salaries, construction, maintenance, etc.) and which local governmental agency receives the funds
(e.g., counties, townships, school districts, etc.), but the state cannot retain any of the funds, even
for administrative costs. How much must be spent in each county is calculated by the USFS based
on gross receipts from all sources (timber, grazing, special use permits, etc.) and acres in each
county for each of the 156 proclaimed national forests.12 The payment basis was altered in 2008
to provide 25% of a seven-year rolling average of receipts (rather than current-year receipts), to
reduce annual fluctuations in payments. The USFS 25% payments to states have mandatory
spending authority, and thus the payments are made automatically, unless Congress acts to alter
the payments.
The O&C Act of 1937 provided for payments from the O&C lands. The act allocated 50% of
receipts directly to the counties for any governmental purpose, 25% for administering the O&C
lands (with any remainder returned to the Treasury), and 25% to pay the counties for accrued tax
liabilities through March 1, 1938; after the accrued tax liabilities were paid, the 25% was to be
used for administering the O&C lands, with any remainder provided to the counties. In practice,
after the tax liabilities were paid (by 1952), all of the 25% has been used to administer the O&C
lands, raising the Treasury share to 50%. Thus, the counties receive 50% of receipts. Payments
8
Oregon & California Railroad Co. v. United States, 238 U.S. 393 (1915).
Act of Aug. 28, 1937 (ch. 876, 52 Stat. 874; 43 U.S.C. §§1181a-j).
10
Act of May 23, 1908 (ch. 192; 35 Stat. 251), 6th unnumbered paragraph under “Forest Service” (16 U.S.C. §§500).
Commonly referred to as the USFS 25% Payments to States Act of 1908.
11
For information on state allocations of USFS payments to road and school programs, see CRS Congressional
Distribution Memorandum, Forest Service Revenue-Sharing Payments: Distribution System, by (name redacted),
November 19, 1999, available from the authors of this report.
12
The USFS has merged many national forests for administrative and planning purposes, leading to 104 administrative
units; such merged forests include the Idaho Panhandle NF (ID and MT), the Arapaho-Roosevelt NF (CO), the ApacheSitgreaves NF (AZ and NM), the Shasta-Trinity NF (CA), the Mt. Baker-Snoqualmie NF (WA), the National Forests in
Texas, the Chequamegon-Nicolet NF (WI), and many more.
9
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for the CBWR lands were not included in the O&C Act, but were included in a later act.13 The
program paralleled the O&C payments: the counties could effectively receive up to 50% of
receipts. However, the CBWR act also directed that the payments “be computed by applying the
same rates of taxation as are applied to privately owned property of similar character in such
counties.” Thus, the actual payments are the county tax bills (county tax rates for assessed value
of the lands), up to 50% of the receipts from the CBWR lands.
Concern over declining timber sales and thus declining payments, attributed to protecting spotted
owls and other species, led President Clinton to propose a 10-year payment program to address
regional economic problems resulting from protection efforts that reduced federal timber harvests
in the Pacific Northwest. Congress enacted this program in the Omnibus Budget Reconciliation
Act of 1993.14 For 1994, these “spotted owl payments” began at 85% of the average payments
between FY1986 and FY1990, and declined by 3 percentage points annually, to 58% in FY2003.
Secure Rural Schools Act
Concerns about declining timber sales and county payments continued and expanded, especially
with the declining spotted owl payments and in areas without northern spotted owls. Congress
responded with a temporary, optional substitute payment program: the Secure Rural Schools and
Community Self-Determination (SRS) Act of 2000. For counties that chose the SRS payments,
the program provided payments at the average of the three highest payments between FY1986
and FY1999. (Some counties with USFS lands chose to continue receiving payments of 25% of
gross receipts.) Under Title II of SRS, counties receiving payments of $100,000 or more were
required to spend 15%-20% of the payment on reinvestment projects (e.g., watershed
improvement, wildfire fuel reduction, etc.) on the federal lands, and under Title III up to 7%
could be used for additional specified purposes (e.g., search and rescue on federal lands). SRS
payments were authorized for six years, FY2001-FY2006. Congress enacted a one-year extension
for FY2007, then amended the SRS law in 2008. The amendment authorized a four-year
extension (though FY2011) and modified the payments through a complicated formula that
included the average of the three highest payments between FY1986 and FY1999, the eligible
federal lands in each county, and relative per capita income in each county. The amended version
also included transition payments for several states, and retained the Title II (federal land
reinvestment) and Title III (special purposes) provisions of the payments.
The amended SRS payments expired at the end of FY2011, and the USFS and O&C payments
will return to their previous historic levels (25% and 50% of receipts, respectively) for FY2012
unless Congress enacts an alternative payment program before September 30, 2012. There have
been many issues involved in congressional efforts to reauthorize SRS, as described in CRS
Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act
of 2000. One of the most significant difficulties has been the need for offsets to fund the
reauthorization of the mandatory payments, and Congress continues to examine options on this
issue.
One other issue relates to the payments more generally. The issue has been referred to as
“linkage.” Some observers have noted that, because the counties historically received a share of
13
14
Act of May 4, 1939 (ch. 144; 53 Stat. 753).
P.L. 103-66; §§13982 and 13983.
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
revenues, they were rewarded for advocating revenue-generating activities (principally timber
sales) and for opposing management that reduced or constrained activities that generate no
revenues to the local forest (e.g., protecting commercial or sport fish harvests or designating
wilderness areas). Thus, counties often allied themselves with the timber industry, and opposed
environmental groups, in debates over USFS and O&C management and budget decisions.
Because SRS payments were based on historic payments, and not on current agency receipts, they
were seen as “de-linked” from the pressure to produce revenues—a situation desired by many
environmental and conservation organizations but opposed by many user groups.
Title I of H.R. 4019
Three bills addressing USFS payments for counties have been introduced in the 112th Congress.
Two, H.R. 3599 and S. 1692, would extend the SRS Act for five additional years. The other, Title
I of H.R. 4019, takes a different approach, and thus warrants a separate analysis. This title of H.R.
4019 is called the County, Schools, and Revenue Trust for Federal Forest Land. It contains eight
sections, described below.
Section 101. Definitions
This section contains 14 definitions. Eight are unique to this bill, including defining the Secretary
of Agriculture as the “Trustee.” Two are common or defined in other sources: “State” (to include
the Commonwealth of Puerto Rico, the only territory with national forest lands); and “community
wildfire protection plans.” The other four include potentially conflicting definitions. “Federal
lands,” for example, are defined to include the National Forest System and the O&C lands
(§101(7)), and the “National Forest System” is then defined in the bill to exclude certain National
Forest System lands (§101(9)). “Secretary” is defined as the Secretary of Agriculture (§101(10)),
while “Secretary concerned” is defined as the Secretary of Agriculture for National Forest System
lands and the Secretary of the Interior for the O&C lands (§101(11)).
Section 102. County, Schools, and Revenue Trust
This section would establish the County, Schools, and Revenue Trust.15 It would direct that the
Trustee (the Secretary of Agriculture) “has a fiduciary responsibility to beneficiary counties to use
… Projects to generate amounts sufficient to satisfy the annual revenue requirements established
for units of the National Forest System.” It would establish the trust with an appropriation of
$875 million and would direct that the portion of receipts from trust projects, as required in
Section 106(a)(1), be deposited in the trust. It also would prohibit garnishment by or payment to a
county creditor; spending other than as directed in Section 107; and offsetting state funding “for
local schools, facilities, or educational purposes.”
15
For this report, the account is referred to as the trust, and the related projects, payments, and program are called trust
projects, trust payments, and the trust program.
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Section 103. Opt-Out Option
This section would allow political subdivisions of states (referred to as counties throughout the
bill and this report) with National Forest System lands eligible for payments under SRS to elect
not to participate; such an election would need to be submitted each year the county chooses not
to participate. Counties otherwise would be automatically included in the trust program. The
section would prohibit trust projects from commencing on lands in counties that have opted not to
participate.
Section 104. Determination of Annual Revenue Requirement and
Minimum Sale Level
This section would require the Secretary of Agriculture to determine, for each unit of the National
Forest System, the annual revenue requirement for the unit and the minimum sale level for the
unit. (“Unit” is not defined.) The annual revenue requirement is defined (§101(1)) as 60% of the
“average annual gross receipts from the unit during the 20-year period beginning with” FY1980
(i.e., FY1980-FY1999).
The minimum sale level is defined (§101(8)) as 50% of the “average annual chargeable timber
volume (as measured in net sawtimber volume) sold from the unit during the period beginning
with fiscal year 1980 through fiscal year 2000” (i.e., for the 21-year period). Chargeable volume
is defined (§101(4)) as “the volume of timber and other forest products that is counted toward
meeting the allowable sale quantity of a unit of National Forest System land based on the
regionally applicable utilization and merchantability standards.” Allowable sale quantity is a
provision that limits USFS timber sales to “a quantity equal to or less than a quantity which can
be removed from such [national] forest annually in perpetuity on a sustained-yield basis.”16
Accordingly, Section 104 might cause management problems for forest supervisors for meeting
the minimum sale level, if it conflicted with maintaining a perpetual supply.
Section 105. County, Schools, and Revenue Trust Projects
This section would provide for the implementation and review of projects that provide funds to be
deposited in the trust. Trust projects would include any projects, but “may not exceed the number
of projects necessary to meet the annual revenue requirement.” Trust projects could not occur on
National Forest System lands in counties that opt out of the trust program, in components of the
National Wilderness Preservation System,17 on lands where Congress had prohibited timber
harvesting,18 or on lands “over which administrative jurisdiction was assumed by the Forest
16
Allowable sale quantity is an administratively established term derived from §13 of the Forest and Rangeland
Renewable Resources Planning Act of 1974 (RPA; P.L. 93-378), as amended by the National Forest Management Act
of 1976 (NFMA; P.L. 94-588); 16 U.S.C. §1611.
17
The Wilderness Act (P.L. 88-577; 16 U.S.C. §§1131-1136) established a system of federal lands designated by
Congress to be managed under specified provisions that prohibited timber harvesting and most other commercial
activities. For more information, see CRS Report R41649, Wilderness Laws: Statutory Provisions and Prohibited and
Permitted Uses, by (name redacted).
18
It is unclear how this relates to limitations on timber harvesting established by Congress other than prohibitions; for
example, Congress directed that “scheduled timber harvesting” be planned so as to protect wild and scenic rivers in
§§10 and 12 of the Wild and Scenic Rivers Act of 1968 (P.L. 90-542; 16 U.S.C. §§1271-1287).
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Service under section 311.” It is not clear to what this latter provision refers, as there is no
Section 311 in the bill. Section 105 also would direct that trust projects be consistent with the
standards and guidelines in the NFMA plans for each National Forest System unit, but also would
allow the standards and guidelines to be modified for each trust project. Thus, it is not clear what
role existing land management plans would have in the proposed trust system.
Section 105(d) would provide for public review, public comments, and environmental review.
Section 105(e) would direct that the provisions of this section, for implementing trust projects, are
“deemed to be compliance with the requirements of” the Forest and Rangeland Renewable
Resources Planning Act of 1974 (RPA),19 the National Forest Management Act of 1976
(NFMA),20 the Multiple Use-Sustained Yield Act of 1960 (MUSYA),21 the National
Environmental Policy Act of 1969 (NEPA),22 and the Endangered Species Act of 1973 (ESA).23
Accordingly, the reviews, appeals, and analyses offered by these statutes would be superseded by
the abbreviated process within H.R. 4019.
Public Review and Comment
Section 105(d)(1) would establish a notice and comment process for trust projects. Proposed
projects would require a Federal Register notice, and the public would have 30 days to provide
written comments on the proposals. After considering the written comments, the decision-maker
would be required to issue a final decision within 90 days after the end of the comment period.
This would require another Federal Register notice, marking the start of a 30-day objection
period. Only parties who submitted written comments on the proposed projects could submit
written objections. However, there is no provision that would require consideration of the written
objections. This process is identified as the sole means for the public to seek administrative
review of trust projects.
Environmental Review
Section 105(d)(2) would require an environmental report on each proposed trust project within
180 days of the initial Federal Register notice, as much as 30 days after the deadline for written
comments on the project’s final decision. For catastrophic events, defined as events that have
caused or will cause severe damage to National Forest System lands (§101(3)), the deadline
would be shortened to 30 days, with public comment and objection periods shortened as
necessary. The environmental review would include an evaluation of environmental impacts “to
the extent the Secretary considers appropriate and feasible,” including any effect on threatened or
endangered plants or animals listed under ESA. The environmental review also would include the
public comments and objections and any response, as well as modifications needed “to ensure the
annual revenue requirement is met.” The environmental report would not be allowed to cost more
than one-third of the estimated receipts generated by the project. It is not clear whether the
environmental review would be published or otherwise available to the public. Finally, the
environmental report would not be subject to judicial review.
19
P.L. 93-378; 16 U.S.C. §§1600-1616.
P.L. 94-588; 16 U.S.C. §§1600-1616, et al.
21
P.L. 86-517; 16 U.S.C. §§528-531.
22
P.L. 91-190; 42 U.S.C. §§4321-4347.
23
P.L. 93-205; 16 U.S.C. §§1531-1540.
20
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Section 106. Distribution of Amounts from Trust Projects
This section would allocate receipts from trust projects:
•
65% would be deposited in the trust; and
•
35% would be “deposited in the general fund of the Treasury for use ... in such
amounts as may be provided in advance in appropriation Acts, for the Forest
Service.” Of this amount, up to 1% would be available for “performance-based
cash awards ... to employees of the Forest Service who assist a unit in exceeding
its minimum sale level for the fiscal year.”
Section 107. Payments to Beneficiary Counties from County,
Schools, and Revenue Trust
This section would direct that all deposits to the trust be distributed to the states each year as soon
as practicable after the end of the fiscal year. Section 107(a) would direct each state’s allocation
“to the beneficiary counties in the manner provided by” SRS Section 102(c)(1). That section of
SRS directed allocations among the counties in accordance with the USFS 25% Payments to
States Act and the Weeks Law.24 These two laws direct the states to spend the money on roads and
schools in the counties where the national forests are located; the money is not necessarily paid to
the counties, and some states direct the payments to school districts or other local governmental
entities. The USFS 25% payment allocation within each state is based on the receipts from each
proclaimed national forest and the acreage of each county within each proclaimed forest.
Section 107 is silent concerning the allocation among the states. It could be based on the current
receipts from each proclaimed national forest, as is done under the USFS 25% Payments to States
Act and the Weeks Law. However, it also could be based on the complicated formula in SRS,
based on each county’s share of historic receipts and of eligible lands, adjusted by relative per
capita income.
Section 107(b) would direct use of the trust payments in accordance with SRS Sections 102(c)(2)
and (d). SRS Section 102(c)(2) directed use of payments in accordance with the USFS 25%
Payments to States Act and the Weeks Law—that is, on roads and schools as determined by each
state. SRS Section 102(d) required that, for counties with payments greater than $350,000 in a
fiscal year, 80%-85% of the payment must have been used in accordance with Section 102(c)(2).
Up to 7% of the remainder could be used for certain projects, as specified in SRS Title III (e.g.,
for search-and-rescue or for local wildfire protection). The remaining funds were to be used as
specified in SRS Title II—reinvested in projects on the federal lands in accordance with
recommendations of local resource advisory committees (RACs) and approval of the Secretary.
Counties with smaller annual payments were excused from some or all of allocation to Title II
and Title III projects. Section 107(b) is silent on whether the Title II projects can be done as trust
projects in accordance with the implementation provisions of Section 105.
24
Act of March 1, 1911 (ch. 186, 36 Stat. 961; 16 U.S.C. §500).
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Section 108. Initial Payments Pending Implementation of Trust
Projects
This section would direct allocations of the appropriations provided to the trust for the first two
fiscal years. For FY2012, the Secretaries would make payments to beneficiary counties equal to
the FY2010 SRS payments. For FY2013, the payments would be 75% of the FY2012 payments.
The payments would be used in accordance with the provisions directed in Section 107(b).
Analysis of Possible Issues for Congress
Title I of H.R. 4019 raises many possible issues for Congress. The bill would shift the focus of
management for some federal lands to generating revenues for counties, possibly at the expense
of providing benefits to the American people for current and future generations, but also possibly
creating jobs in the timber industry. It would presume that the new management focus complies
with many existing statutes that require informing the public about possible impacts of decisions
and alternatives (NEPA), protecting rare plants and animals (ESA), and assuring sustained forest
ecosystems (NFMA). This would effectively eliminate the external enforcement of these
provisions for projects on many federal lands. There are also many technical implementation
questions. Specific issues are discussed below.
In addition, while it appears that H.R. 4019 is intended as a substitute for USFS 25% payments to
states and O&C 50% payments to counties, nowhere does the bill direct that these payments not
be made. Thus, the trust payments would apparently be in addition to the USFS 25% and O&C
50% payments. However, the bill includes no direction on deposits to the National Forest Fund to
make the USFS 25% payments.
Fiduciary Trust Responsibilities and Federal Assets
The bill would establish a fiduciary responsibility to the Secretary of Agriculture as trustee for the
trust. Typically, a trust is a collection of assets to be administered by its trustee for the
beneficiaries, typically to provide income while preserving the assets of the trust. The
beneficiaries of the income and of the assets can differ; for example, some trusts are established
to provide a surviving spouse with income while maintaining the assets for the children.
In H.R. 4019, the trust is defined as the income, not as the assets. The bill would establish a
responsibility to produce income, but is unclear on the responsibilities of the agency and the
means citizens might have to protect the assets—the federal lands and resources. H.R. 4019
would constrain some of the opportunities to challenge management decisions on trust projects to
produce income for the counties. It is not clear whether the trust requirements to manage for
income to the counties would outweigh long-term management to maintain the assets.
The counties would be the principal beneficiaries of the trust, but would appear to bear few of the
responsibilities or costs associated with the implementation and administration of the trust. That
is, the costs to prepare and administer trust projects to produce income for the counties are borne
by the federal government. In addition to the costs of the trust projects, there would also likely be
costs to establish and administer the trust, also borne by the federal government. While 35% of
the receipts from trust projects could be made available in advance in appropriations acts, it is
unclear whether this funding would be sufficient to cover the costs of implementing the trust
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projects and administering the trust. It is also unclear whether this funding would be supplemental
to or in lieu of annual appropriations.
Annual Revenue Requirements
H.R. 4019 would establish an annual revenue requirement of 60% of the average annual gross
receipts from each National Forest System unit between FY1980 and FY1999. This provision
raises a number of potential questions for Congress. For example, it may be unclear to some why
60% of annual gross receipts from FY1980 through FY1999 was selected for the bill; the
committee and subcommittee press releases and statements from the chairmen do not include
explanations for either the level or the selected period. (The eligibility period under SRS was
FY1986 through FY1999.) Other possible questions include what would be included in “gross
receipts”; what receipts would be available to make the specified payments; what additional
receipts would be needed to make the specified payments; and where those receipts might come
from.
Gross Receipts
The bill does not define “gross receipts.” For USFS 25% payments to states, “gross receipts”
include some receipts but not others. For example, timber purchaser deposits to the KnutsonVandenberg (K-V) Fund and deposits in the Salvage Timber Sale Fund are included as receipts
for USFS 25% payments.25 In contrast, timber purchaser deposits for brush disposal, fees for
forest botanical product harvests, and recreation fees under the Federal Lands Recreation
Enhancement Act are exempt from the USFS 25% payments.26 Thus, the basis for calculating the
60% of gross receipts is unclear. If the gross receipts subject to the annual revenue requirement in
the bill were the average gross receipts from FY1980 through FY1999 used to determine the
USFS 25% payments to states, then the annual revenue requirement nationally would likely be
about $550 million to $600 million. However, the actual annual revenue requirement could be
higher or lower than this estimate, depending on a host of estimates and assumptions about
options and future receipts.
Receipts Available for Deposit to the Trust
The above discussion of gross receipts suggests several categories of receipts that could be
deposited in the trust. One category of receipts that could be deposited in the trust are those
currently deposited in the National Forest Fund (NFF). This is a receipt account that accumulates
USFS receipts which are not deposited directly into an account with mandatory spending
25
Deposits to the K-V Fund (Act of June 6, 1930; ch. 416, 46 Stat. 527; 16 U.S.C. §§576-576b) were defined as
receipts for receipt-sharing in §16 of NFMA, even though up to 100% of timber sale receipts can be deposited in the
fund. Similarly, deposits to the Salvage Sale Fund (NFMA §14(h); 16 U.S.C. §472a(h)) were defined as receipts for
receipt-sharing in the 6th unnumbered paragraph under “Administrative Provisions, Forest Service” in P.L. 102-381
(Department of the Interior and Related Agencies Appropriations Act for FY1993), even though up to 100% of timber
sale receipts can be deposited in the fund.
26
See the authorizing language in each of the relevant statutes: respectively, Act of August 11, 1916 (ch. 313, 39 Stat.
446; 16 U.S.C. §490); P.L. 106-113 (Consolidated Appropriations Act for FY2000), Appendix C, §339 (16 U.S.C.
§528 note); and P.L. 108-447 (Consolidated Appropriations Act for FY2005), Division J, Title VIII (16 U.S.C. §§68016814).
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authority (an MSA).27 Congress has directed many of the NFF funds to be used for specific
purposes, such as the 10% Roads and Trails Fund. The USFS has historically reported on NFF
deposits in its annual budget justification, although that table was not included in the FY2013
budget justification. Many of the various land and resource uses generate receipts:
•
Timber sales—$18.8 million annually for FY2008-FY2010, after deducting the
mandatory spending from NFF deposits ($7.6 million annually).
•
Grazing fees—$1.9 million annually for FY2008-FY2010, after deducting the
mandatory spending from NFF deposits ($3.3 million annually).
•
Minerals—$45.3 million annually for FY2008-FY2010, after deducting the
mandatory spending from NFF deposits ($0.2 million annually). Of this amount,
$44.0 million annually for FY2008-FY2010 was collected by the Minerals
Management Service (MMS) in the U.S. Department of the Interior (now the
Office of Natural Resource Revenues) and deposited in the NFF; because the
collections are not USFS receipts, it is not certain whether they can be identified
as trust projects and deposited in the trust.
•
Recreation fees—$44.2 million annually for FY2008-FY2010, after deducting
the mandatory spending from NFF deposits ($7.6 million annually). This does
not include recreation fees under the Federal Lands Recreation Enhancement Act
(FLREA), since these collections are deposited directly into an MSA.
•
Fees for land uses and power—$16.9 million annually for FY2008-FY2010, after
deducting the mandatory spending from NFF deposits ($3.3 million annually).
Thus, NFF funds for FY2008-FY2010 that could have been available for the trust would have
averaged $127.1 million annually, if MMS deposits were included, or $83.1 million annually, if
the MMS were not included.
One possible source of funds for the trust could be funds deposited in many of the MSAs. It is
unclear whether the provisions of H.R. 4019 could override previous statutes on the disposition of
receipts to the MSAs. For certain accounts associated with timber sales, the USFS determines the
amount deposited (if any) in each of the MSAs. These accounts include:
•
The Knutson-Vandenberg (K-V) Fund—$101.9 million annually for FY2008FY2010. These funds are a portion of timber sale receipts currently used for
reforestation, timber stand improvement, and mitigation and enhancement of
other resources in timber sale areas.
•
The Salvage Sale Fund—$27.0 million annually for FY2008-FY2010. These
funds are a portion of timber sale receipts currently used to prepare and
administer additional salvage timber sales.
•
Brush Disposal—$7.5 million annually for FY2008-FY2010. These funds are
additional deposits from timber purchasers currently used to clean up the “slash”
(tree tops and limbs) in timber sale areas.
27
For a description of the USFS MSAs, see CRS Report RL30335, Federal Land Management Agencies’ Mandatory
Spending Authorities, coordinated by (name redacted).
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•
Stewardship Contracting retained receipts—$5.5 million annually for FY2008FY2010. Stewardship contracts are special timber sales where the USFS is
authorized to require additional land and resource treatments in exchange for
lower timber payments; the USFS is also authorized to retain any receipts
generated by stewardship contracts to be used for additional stewardship
contracting activities.
Because the USFS determines the amount deposited in the first three of these accounts, and can
choose not to undertake stewardship contracting, the agency could substantially expand the funds
available for the trust. The K-V and Salvage Sale Funds could be directly deposited in the trust,
while reducing or halting the use of brush disposal and stewardship contracting would likely
increase the bid prices for USFS timber sales.28 The total amount available from these accounts
that could have been available for the trust averaged $141.9 million annually for FY2008FY2010.
Funds directed to be deposited into other MSAs might also be diverted to the trust. The statutes
establishing these many MSAs direct the deposit of specified receipts into these accounts.
However, the USFS might be able to designate the activities generating these receipts as trust
projects, shifting funds from the MSAs to the trust. The total amount available from these
accounts that could have been available for the trust averaged $124.0 million annually for
FY2008-FY2010. While many of the accounts are relatively modest (less than $5 million
annually), two accounts are relatively large:
•
Recreation fees under FLREA—$64.4 million annually for FY2008-FY2010.
These funds have been used primarily to address the $5.5 billion backlog of
deferred maintenance in the national forests.
•
The 10% Roads and Trails Fund—$14.0 million annually for FY2008-FY2010.
These funds were originally set aside to supplement appropriations for road
construction; at various times, they have been returned to the U.S. Treasury to
offset USFS road appropriations, although for several years they were authorized
to be used for other forest health activities in the national forests.
There are a few MSAs that are unlikely to be available for the trust. These accounts include funds
for specific purposes that would not have been deposited into the accounts without use for those
purposes. The largest account is Restoration of Lands and Improvements, which accumulates
recoveries from cash bonds, forfeitures, judgments, settlements, and the like from contractors
who fail to complete the required work; the funds are used for others to complete the work.
Similarly, the Cooperative Work account includes deposits from contractors and cooperators for
commensurately funding jointly beneficial work (e.g., USFS expenditures to maintain jointly
used roads). The total amount from these accounts averaged $67.7 million annually for FY2008FY2010, but would probably not be available for the trust.
28
Reducing required deposits for brush disposal or additional contract requirements in stewardship contracts would
allow timber purchasers to bid more for the timber itself, although the rise in timber prices might be less than the
reduced costs in areas with little or no competitive bidding for federal timber.
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Additional Receipts Needed
The discussion of sources suggests that current NFF receipts could provide about $83 million to
$127 million annually, depending on the availability of the MMS deposits. Reducing or
eliminating the use of the several timber-related MSAs, and depositing those receipts in the trust,
could generate another $142 million annually. Shifting deposits from the other MSAs, excluding
the last group (whose funds likely would not be available for the trust), could add another $124
million to the trust. Thus, if the USFS chose (and were able) to designate all these activities as
trust projects and deposit all the receipts in the trust, total deposits in FY2008-FY2010 could have
been as much as $349 million to $393 million annually.
As described above, the trust would likely need receipts of about $550 million to $600 million
annually. If only current NFF receipts were deposited in the trust, additional annual requirements
could range from $423 million to $517 million. As NFF deposits from timber harvests averaged
$18.8 million annually for FY2008-FY2010, timber sales would need to increase by more than 20
times above the average timber harvest level of FY2008-FY2010 (2.6 billion board feet (bbf)) to
generate sufficient funds. This could lead to annual USFS timber harvests increasing to as much
as or more than the current annual timber harvest level from all lands (federal and nonfederal) in
the United States. Thus, the USFS would have to alter the way it has been selling timber and/or
allocating receipts.
If the timber receipts deposited in the timber-related MSAs were allocated to the trust as receipts
from trust projects, the need for additional annual requirements would be reduced. NFF and
timber-related MSA deposits averaged about $161 million for FY2008-FY2010. Thus, the
additional funds needed for the trust would be about $281 million to $375 million. With this
allocation, timber sales would need to increase by more modest, but still substantial, amounts—
about 175% to 233% above current levels. This would imply USFS sale levels of about 7.2 bbf to
8.7 bbf. While roughly triple the harvest levels of the past 20 years, these would be within historic
levels. (See Figure 1, above.)
If all activities that provide funds for MSAs were designated to be trust projects, the additional
annual requirements would be reduced to about $157 million to $251 million. Using additional
timber receipts (deposits to the NFF and timber-related MSA deposits, about $161 million
annually for FY2008-FY2010) would require increasing timber sales between 98% and 156%,
5.1 bbf to 6.7 bbf, double or more the FY2008-FY2010 average of 2.6 bbf.
Where the Receipts Might Come From
Additional Timber Sales
Interests disagree about whether such increased timber sales are feasible and desirable. One
question is whether sufficient timber exists in the national forests to provide the necessary
additional receipts for the annual revenue requirements. Timber inventory data show that
softwood growing stock on all forest lands increased by 23% between 1953 and 2007, and by
18% in the national forests.29 The increase has largely been in medium-sized trees (7-17 inches in
29
The timber inventory data are from W. B. Smith et al., Forest Resources of the United States, 2007, USDA Forest
Service, Gen. Tech. Rept. WO-78, Washington, DC, 2009, pp. 209-211, 249-251 (Table 18 and Table 29),
http://www.fs.fed.us/nrs/pubs/gtr/gtr_wo78.pdf). The data show forest acreage, growing stock (commercially usable
(continued...)
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diameter), while the inventory in large trees (more than 29 inches in diameter) has declined,
especially in the Pacific Coast states (Alaska, Washington, Oregon, and California).
The national forests contain more timber now than when harvest levels were much higher, and
timber growth exceeds harvests and mortality, so timber inventories will continue to grow. This is
true even with extensive wildfires and insect infestations (e.g., mountain pine beetles) in recent
years. This suggests that, biologically, more timber could be cut from the national forests, at least
in the near term and especially in salvaging trees killed by fires, insects, or diseases. However,
salvage timber and the smaller average tree diameter suggest lower values for the remaining
timber. Furthermore, in some areas of the Rocky Mountains, sawmill capacity has declined
substantially in the past 20 years, raising questions about whether sufficient markets exist for
increased federal timber harvests.30
If additional timber were harvested under the bill, additional jobs would likely be generated in the
timber industry. Job multipliers based on timber harvests are imprecise, because they are
influenced by many factors, such as tree diameters, mill characteristics, and more. One metastudy on northern spotted owl impacts in 1990 showed timber job multipliers ranging from 6 to
26 direct and indirect jobs per million board feet harvested, although most ranged from 14 to 16
jobs per million board feet.31 More recent studies have suggested that timber job multipliers are
now lower—11.28 jobs per million board feet in Washington in 2004.32 If the additional timber
sales estimated above (5.1 billion to 8.7 billion board feet) were achieved, the 2004 multiplier
would suggest additional direct and indirect timber industry jobs of 57,000 to 98,000 jobs.
The USFS likely could adjust its timber practices to provide at least some of the annual revenue
requirement. As implied above, significant additional receipts could come from receipts that
previously were being deposited in the K-V, Salvage, and brush disposal funds and were being
used in stewardship contracts. Because the level of deposits and use of stewardship contracts are
within the agency’s discretion, shifting these funds to the trust is feasible. However, additional
appropriations would likely be needed to accomplish the tasks now being supported by these
(...continued)
trees of at least 5 inches in diameter) volume, and timber growth, harvest, and mortality. In the Pacific Coast states
(Alaska, Washington, Oregon, and California), softwood growing stock declined between 1953 and 2007 by 10% on all
forest lands and by 9% in the national forests, although it rose between 1987 and 2007 (by 7% for all lands and by 9%
for national forests); these data reflect the logging of old-growth timber during the 1960s, 1970s, and 1980s. In the
Rocky Mountain states (the rest of the West), softwood growing stock increased substantially—by 43% on all lands
and by 67% in the national forests between 1953 and 2007. Softwood growing stock has also been changing in size
(diameter). The increased inventory since 1953 has been predominantly in trees between 7 and 17 inches in diameter
(small sawtimber) in all regions. In contrast, the inventory of trees greater than 29 inches in diameter (large sawtimber)
declined everywhere, by 37% nationally, although by only 5% in the Rocky Mountain states.
30
Data on numbers of sawmills are not reported. However, in 1980, there were sufficient data for the Western Wood
Products Association (WWPA) to report sawmill profiles for 11 western states. By 2010, WWPA was only able to
report sawmill profiles for 5 western states—Washington, Oregon, California, Idaho, and Montana—because too few
mills existed in the other states to report without disclosing company-specific data. (WWPA, Statistical Yearbook of the
Western Lumber Industry, annual series.)
31
See out-of-print CRS Report 92-922 ENR, Economic Impacts of Protecting Spotted Owls: A Comparison and
Analysis of Existing Studies, by (name redacted), available from the authors of this report.
32
C. L. Mason and B. R. Lippke, Jobs, Revenues, and Taxes from Timber Harvest: An Examination of the Forest
Industry Contribution to the Washington State Economy, Rural Technology Initiative, College of Forest Resources,
University of Washington, Working Paper 9, Seattle, WA, September 2007, http://www.ruraltech.org/pubs/working/09/
index.asp.
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funds—reforestation, timber sale preparation, treatment of logging debris to reduce wildfire
threats, and more.
The USFS also could likely shift timber harvests to emphasize the remaining large-diameter
timber (or at least the largest-diameter trees that remain). This could lead to ecological problems,
however. For example, one of the contributing factors in the forest health and wildfire problem of
the intermountain West has been the historic emphasis on logging large-diameter pines. Cutting
more of the large-diameter trees and leaving the small trees, undergrowth, and debris exacerbates
wildfire threats. Increased logging does not reduce wildfire threats because it puts more dead
biomass at ground level, which makes fires more difficult to control, and leaves small trees to
serve as fuel ladders to carry fires into the canopy; this could lead to catastrophic wildfires.33
Another potential ecological problem could be degraded forest conditions. It has long been
recognized that harvesting the best trees, and leaving the poorer-quality trees, is not desirable in
the long run; this approach is called “high-grading” the forest, and is generally regarded as a poor
forest management practice. Because harvests account for a relatively small acreage in any one
year, and because on-the-ground inventories occur only periodically, it could be decades before
the extent of high-grading were known, and it would take decades, if it were even feasible, to
restore the forests to healthy conditions after such practices occur. In addition, the loss of largediameter trees would likely alter the composition of wildlife populations.
Finally, it would also be possible to harvest additional timber in some national forests, and use
those revenues to provide the trust payments to other counties. Only receipts from trust projects
would be deposited in the trust, and trust projects could only occur in counties that did not opt out
of the trust payment program. However, all trust project receipts would be deposited in the trust,
and the allocation to counties in the trust payment program would not be based on where those
receipts were generated. Thus, the USFS could emphasize timber sales in areas with high timber
values, such as in the Allegheny National Forest (PA) and in the south Atlantic and Gulf coastal
national forests. For example, two of the four counties that have Allegheny NF land opted for
SRS payments, while the other two opted for the USFS 25% payments. If those two counties
opted for trust payments, the USFS could expand timber sales in those two counties to make trust
payments in other areas. This is significant, because the value of USFS timber in the Allegheny in
2010 was 20 times greater (per thousand board feet) than in Colorado or Nevada.
Other Possible Sources of Revenues
Much of the attention on H.R. 4019 has been on increased timber sales to provide the additional
revenues for the trust. However, the bill would not limit revenues to timber sales. Specifically,
Section 105(b)(2) also included “issuance of a grazing permit, issuance of a special use permit
involving land use, mineral development, power generation, or recreational use, and projects
implementing a community wildfire protection plan.” Livestock grazing is unlikely to provide
much revenue, as the administrative fee for grazing use (there is no fee for a grazing permit) is set
under a formula originally enacted in law, and administrative efforts to raise grazing fees have
been controversial.34 Potential revenues from community wildfire protection plan projects would
also likely be modest, at best. Biomass removal for wildfire protection generally involves
33
See CRS Report R40811, Wildfire Fuels and Fuel Reduction, by (name redacted).
See CRS Report RS21232, Grazing Fees: Overview and Issues, by (name redacted). The formula for
establishing federal grazing fees was authorized in the Public Rangelands Improvement Act of 1978 (P.L. 95-514; 43
U.S.C. §§1901-1908). It expired in 1985, but the formula has continued to be used by the past five Administrations.
34
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removing biomass on or near the ground, such as underbrush and small trees.35 Such biomass has
little or no commercial value. While the biomass could have some value for energy production,
such use to date has required federal and state subsidies to be viable, and no independent
commercial biomass energy facilities using biomass from forests are currently in operation.
Special use permits, however, could offer more opportunities. Special use permits are employed
for a wide variety of activities in the national forests, such as ski areas, commercial filming, and
commercial telecommunication sites. The USFS generally seeks to recover fair market values for
special use permits. New or higher fees for renewable energy production, such as from wind or
solar farms, could be a possible source of revenues, although the capacity to generate fees from
these sources and the possible environmental and social impacts from renewable energy farming
continue to be studied. Other activities for which special use permits might be required could
include other uses for which the USFS is not prohibited from charging fees. For example, under
FLREA, some recreational activities cannot be charged user fees, such as parking and picnicking,
camping at undeveloped sites, and hunting and fishing “for any person who has a right of access
for hunting or fishing privileges under a specific provision of law or treaty.” However, other
recreational users could be charged a fair market price for special use permits, such as for hunting
and fishing for persons lacking a right of access, for using all-terrain vehicles or snowmobiles off
roads, for commercial outfitters and guides, and more. The amount of possible revenues from
such special use permits is unknown, and in remote areas, the cost to collect and enforce the fees
may exceed the potential receipts. In addition, it seems likely that most of the burden of the fee
increases would be borne by people living closest to the national forests and those living in the
counties to which these revenues would be transferred.
Effects If Annual Revenue Requirements Are Not Met
The bill provides no penalties or guidance on consequences for not meeting the annual revenue
requirements.
Public Involvement and Environmental Reporting
Section 105(d)(2) would require an environmental report for each proposed trust project. The
report must be produced within 180 days of the Federal Register notice on the proposed trust
project, meaning that the USFS could issue a report 30 days after the deadline for written
comments on its final decision.
Thus, H.R. 4019 appears not to provide a notice-and-comment process on the environmental
report for either the public or other agencies. Furthermore, in cases of catastrophic events, the
USFS would be required to produce the environmental report within 30 days of the notice of the
proposed project and permitted to shorten the public comment period on the trust project. H.R.
4019 does not identify any penalties or consequences if the USFS fails to meet the specified
deadlines.
Under current law, non-trust timber sales require an environmental review under NEPA and an
ESA consultation with either the Fish and Wildlife Service (FWS) or the National Marine
Fisheries Service (NMFS) about the sale’s impacts on listed species and critical habitat. Section
35
See CRS Report R40811, Wildfire Fuels and Fuel Reduction.
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105(e), however, would exclude trust projects from NEPA and ESA compliance. Moreover, H.R.
4019’s requirements suggest that the environmental report would not be a functional equivalent of
a review under NEPA or a biological assessment under ESA. The “minimum” contents of the
report would be:
•
an evaluation of the environmental impacts, including the effect on threatened or
endangered species, to the extent “appropriate and feasible”;
•
public comments and objections and “any response” to them; and
•
any modifications to the project to ensure annual revenue is met.
Section 105 would expressly ban judicial review of the report and would limit administrative
review to an opportunity to submit objections to the trust project final decision; however, H.R.
4019 would not require USFS to review or respond to the objections. Thus, the rationale for
preparing the report is unclear, as it does not appear to inform the USFS or the public of the
consequences of a trust project in a timely manner, nor would it arguably provide agencies or the
public an adequate opportunity to comment meaningfully on the report.
If H.R. 4019 were enacted, review could not be forced under many other statutes pertaining to
timber harvests. The bill states that compliance with Section 105 would be deemed as compliance
with the requirements of the Multiple Use-Sustained Yield Act, the National Environmental
Policy Act, the Endangered Species Act, the Forest and Rangeland Renewable Resources
Planning Act, and the National Forest Management Act. It is not clear how NFMA Section 14
could be satisfied by the environmental report, as that law pertains to bidding, contracting, and
harvesting practices.36 However, it appears to mean that, under H.R. 4019, timber harvests for
trust projects would not need to be made at appraised value or overseen by federal employees.
The possibility of litigation related to trust projects would not be entirely precluded by H.R. 4019.
Courts could be asked to review violations under several laws, including the Clean Water Act,37
the Clean Air Act,38 the National Historic Preservation Act,39 and the Archaeological Resources
Protection Act.40
In addition, by barring ESA consultation, H.R. 4019 could potentially expose companies
performing trust projects to liability. The consultation process under ESA typically leads to either
FWS or NMFS issuing what is called an incidental take statement, immunizing the agency and
any applicant from liability if the project incidentally harms a listed species.41 By eliminating the
consultation process in this way, Section 105(e) insulates the USFS from ESA liability, but does
not appear to protect private parties, such as timber companies, from suit.
36
16 U.S.C. §472a.
P.L. 92-500; 33 U.S.C. §§1251 et seq.
38
P.L. 95-95; 42 U.S.C. §§7401 et al.
39
P.L. 96-515; 16 U.S.C. §§470 et seq.
40
P.L. 96-95; 16 U.S.C. §§470aa-470mm.
41
16 U.S.C. §1536(B)(4).
37
Congressional Research Service
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Allocation and Distribution of Trust Payments
The bill would allocate 65% of trust project receipts to the trust. This would be a significant
increase from the historic allocation—25% of USFS receipts and 50% of O&C receipts. The trust
payments would be allocated by the states to the counties in accordance with SRS Section
102(c)(1), which refers to the original USFS 25% payments to states. This clearly would direct
allocations for roads and schools in the counties based on revenues from each proclaimed national
forest and acreage of that national forest in each county; the payment may or may not go to the
county, depending on each state’s statutory direction.
How the trust payments would be allocated among the states is not clear. The allocation could be
based on the average 1980-1999 USFS revenues in each state; this is shown in the fifth column in
Table 1 (under “Calculated Payments, Historic Allocation”).42 Table 1 shows the historic USFS
payments: the second column shows the average annual payments for 1980-1999; the third
column shows the average annual payments for 2001-2007; and the fourth column shows the
average annual payments for 2008-2011. Because the bill refers to the distribution in SRS as
amended, the allocation of the trust payments could be based on the allocation of SRS payments
in each state; this calculated allocation is shown in the sixth column in Table 1.43
The allocation among states—by historic payments or SRS formula—would make a substantial
difference in state payments. If the allocation were based on historic payments, trust payments
would rise from the SRS 2008-2011 average annual payments in a few states, notably Oregon,
Washington, and California. In fact, the average annual trust payments in California would likely
exceed the average annual payments for any of the preceding periods. In contrast, if the allocation
were based on the SRS formula, trust payments would decline from the SRS 2008-2011 average
annual payments in many states, especially western states with large land areas but modest
historic receipts, such as Arizona, Colorado, Idaho, Montana, Nevada, Utah, and Wyoming.
In addition, because the payments would be distributed “subject to” SRS Sections 102(c)(2) and
(d), counties where the payments exceed the specified amounts must or may (depending on the
level and the circumstances) allocate 15%-20% of their payments for projects in accordance with
SRS Titles II and III. Thus, the amounts shown in the fourth and fifth data columns overstate the
likely payments in many of the counties opting for the trust payment program. For counties
opting out of the trust payment program, if current receipts were significantly higher than their
1980-1999 average receipts, the actual payments could be higher than shown in the table. The
trust payments also appear to be in addition to the USFS 25% payments, which would lead to
greater payments (perhaps substantially greater) in some areas.
42
This column equals the 65% payment of annual revenue requirement, which equals 60% of the average annual
receipts for 1980-1999 (= 4 times column 2, adjusted for the Owl Payments in Washington and Oregon).
43
This column equals the 65% payment of the national total annual revenue requirement (the total for column 5) times
each state’s share of the SRS average annual payment, 2008-2001 (= each state’s average payment divided by the
national total at the bottom of column 4).
Congressional Research Service
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Table 1. Average and Calculated USFS Annual Payments, by State
(in dollars)
Calculated
Payment,
Historic
Allocation
Calculated
Payment,
SRS
Allocation
Average 25%
Payment,
1980-1999
Average SRS
Payment,
2001-2007a
Average SRS
Payment
2008-2011b
Alabama
1,488,717
2,075,265
2,170,788
2,322,398
1,995,326
Alaska
3,860,066
9,088,096
17,862,878
6,021,703
16,419,040
Arizona
4,488,276
7,220,552
15,625,872
7,001,711
14,362,848
Arkansas
5,227,385
6,819,198
8,189,822
8,154,721
7,527,847
California
45,361,694
63,616,815
49,494,650
70,764,243
45,494,048
Colorado
3,633,940
5,996,549
16,149,657
5,668,947
14,844,297
Florida
1,725,797
2,436,086
2,758,006
2,692,243
2,535,079
Georgia
868,837
1,265,554
1,783,779
1,355,386
1,639,598
Idaho
12,543,729
20,621,665
32,781,951
19,568,217
30,132,219
Illinois
99,636
295,221
106,831
155,431
98,196
Indiana
76,431
126,352
322,140
119,232
296,102
Kentucky
396,492
580,340
2,375,536
618,527
2,183,524
Louisiana
2,855,389
3,637,394
2,389,717
4,454,407
2,196,558
Maine
29,860
40,205
88,776
46,581
81,600
Michigan
1,709,960
2,604,516
4,193,001
2,667,537
3,854,085
Minnesota
1,086,970
1,975,389
3,099,736
1,695,673
2,849,188
Mississippi
6,094,110
7,947,293
7,291,737
9,506,811
6,702,353
Missouri
1,726,648
2,641,832
4,275,925
2,693,572
3,930,307
Montana
8,648,043
12,787,744
24,156,509
13,490,948
22,203,963
Nebraska
40,737
46,161
418,420
63,549
384,600
Nevada
329,663
441,846
4,939,800
514,274
4,540,521
New Hampshire
439,611
479,327
603,829
685,793
555,022
1,587,011
2,231,740
15,659,490
2,475,737
14,393,749
5,705
14,039
27,100
8,900
24,909
North Carolina
766,760
990,562
2,224,327
1,196,146
2,044,536
North Dakota
77
98
806
120
741
Ohio
88,564
75,325
329,960
138,159
303,289
Oklahoma
741,136
1,241,571
1,159,306
1,156,172
1,065,601
109,424,123
145,056,621
106,941,284
138,004,031
98,297,330
Pennsylvania
3,377,462
5,768,269
4,325,544
5,268,841
3,975,915
South Carolina
2,124,756
3,188,849
2,346,850
3,314,620
2,157,157
South Dakota
1,880,203
3,763,028
2,659,932
2,933,116
2,444,933
Tennessee
418,880
543,608
1,419,527
653,453
1,304,788
New Mexico
New York
Oregon
Congressional Research Service
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Calculated
Payment,
Historic
Allocation
Calculated
Payment,
SRS
Allocation
Average 25%
Payment,
1980-1999
Average SRS
Payment,
2001-2007a
Average SRS
Payment
2008-2011b
Texas
3,079,676
4,552,606
3,332,525
4,804,295
3,063,160
Utah
1,287,934
1,973,408
13,262,498
2,009,177
12,190,504
Vermont
185,867
367,753
400,926
289,953
368,520
Virginia
580,269
876,676
2,044,701
905,220
1,879,430
Washington
30,658,521
41,490,084
30,863,755
37,338,243
28,369,070
West Virginia
912,926
1,949,023
2,185,209
1,424,164
2,008,581
Wisconsin
968,364
1,753,942
2,600,654
1,510,648
2,390,445
Wyoming
1,512,294
2,291,636
5,217,656
2,359,178
4,795,918
Puerto Rico
15,453
41,969
186,354
24,107
171,291
262,347,971
370,914,205
398,267,758
366,076,185
366,076,185
Total
Source: CRS calculations from USFS data in annual ASR 10-1 reports.
Note: Excludes possible trust payments for the O&C lands. Also, this payment is apparently in addition to the
USFS 25% payments to states and O&C 50% payments to counties.
a.
The average annual payments for FY2001-FY2007 were made under the original SRS Act formula, for those
opting for the SRS program, and under the USFS 25% program, for all others.
b.
The average annual payments for FY2008-FY2011 were made under the formula in the SRS Act as amended,
for those opting for the SRS program, and under the USFS 25% program, for all others.
The bill also would allocate 35% of receipts to the U.S. Treasury, and would allow the funds to be
appropriated to the USFS. For trust project receipts appropriated to the USFS, the agency would
be allowed to use up to 1% of that appropriation for bonuses to employees “who assist a unit in
exceeding its minimum sale level for the fiscal year.” This bonus would reward employees who
help in increasing timber sales, regardless of the environmental and economic consequences of
those sales, since it would be for exceeding volume targets, not for achieving revenue
requirements. Efforts to increase receipts from other sources (such as those described above)
would not be eligible for bonuses.
Implementation
The implementation of H.R. 4019 also raises a number of possible issues. Some issues may
appear to be relatively minor; for example, grazing fees are charged for actual use, not for permits
(as implied in Section 105(b)(2)), and chargeable volume (Section 101(4)) in some national
forests is calculated in growing stock (cubic feet), not in merchantable sawtimber (board feet),
making the minimum sale level calculation (Section 104(2) from the definition in Section 101(8))
difficult, at best. Six implementation provisions could raise more complicated issues and warrant
some additional discussion: the provision on state education funding; inclusion of the O&C lands;
implementation in parts of national forests; directions on timber sale practices and procedures; the
need for regulations for implementation; and impacts on USFS staffing and funding.
Congressional Research Service
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
Provision on State Education Funding
Section 102(c)(3) would direct that the “assets of the Trust shall not ... be used in lieu of or to
otherwise offset State funding sources for local schools, facilities, or educational purposes.” This
provision appears to be intended to prevent states from adjusting their allocation of state
educational funds in response to USFS state payments, as is currently done in Washington and
other states. Some might view this as federal interference in state prerogatives to allocate state
funding as the state sees fit, which would violate the Spending Clause/Tenth Amendment of the
U.S. Constitution. Others would likely argue that this is a legitimate condition of the federal trust
payments.44 While the language of Section 102(c)(3) appears to make this a requirement only for
counties choosing the trust payments, the automatic opt-in provision (§103) and the allocation
and distribution provisions (§§106 and 107) make this appear less of a voluntary grant program.
Inclusion of the O&C Lands
The bill would include payments for the O&C lands in western Oregon through the definition of
federal land (§101(7)(B)). However, some of the actions required by the bill would not be applied
to the O&C lands. The provisions of Section 105, implementing the trust projects, direct the
Secretary of Agriculture to identify trust projects on National Forest System lands. There are no
directions for the Secretary of the Interior to identify trust projects on O&C lands, and no
authorization for the trust project designation, public involvement, or environmental review
provisions to be implemented on the O&C lands. Section 106 would direct that trust project
revenues be deposited in the U.S. Treasury to be available for appropriation to the USFS. Finally,
Section 107 would direct use of the funds consistent with SRS Section 102(c), which refers to the
USFS 25% Payments to States Act requiring use of funds for roads and schools; under the 1937
O&C Act, the O&C payments have been available for any local governmental purpose. Thus, the
bill includes the O&C lands in its definition of federal land, but other provisions of the bill seem
not to apply to the O&C lands and it is not clear whether the counties with O&C lands would be
eligible for trust payments.
Implementation for Parts of National Forests
The bill would allow each county to opt out of the trust payment program, and would prohibit
trust projects from occurring on lands in counties that have opted out of the program. However,
calculations and decisions would generally be directed to be done at units of the National Forest
System. These two aspects could significantly complicate national forest management. First, the
bill does not define “unit” of the National Forest System. NFMA allows multiple national forests
to be combined for planning purposes, and the USFS has combined several national forests for
administrative purposes; for example, the Choctawhatchee National Forest (NF), with 743 acres,
is administered with three other national forests as the National Forests in Florida. However, the
USFS 25% payments to states program is organized by proclaimed national forest, not by
administrative designation. The bill is not clear on which of these approaches may or must be
used for the required calculations and decisions.
44
See CRS Report RL30315, Federalism, State Sovereignty, and the Constitution: Basis and Limits of Congressional
Power, by (name redacted).
Congressional Research Service
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
An additional possible complication is that some national forests are spread over many counties;
the Mark Twain NF, for example, has land in 29 counties in Missouri, while the Daniel Boone NF
and Jefferson NF each have land in 22 counties, the latter in three different states. Under the SRS
payment program, counties could opt in, and in 38 of the 156 proclaimed national forests (24%),
some counties opted in while others opted out. If similar choices were made under the trust
payment program, about a quarter of the national forests would be required to administer some
lands with trust projects and their implementation guidance, and other lands under MUSYA,
NFMA, and other laws. This might require additional surveying, to assure that trust projects
occur only in those counties that have not opted out of the trust payment program.
Timber Sale Practices and Procedures
Section 14 of NFMA sets forth guidelines for timber sales in the National Forest System.45 It
requires an appraisal of the timber value in each sale and advertisement of the sale. Each sale is to
be at not less than the appraised value, in open and competitive bidding. The timber harvest is to
be supervised by a USDA employee. And the Secretary of Agriculture is to develop timber
utilization standards, measurement methods, and harvesting practices “to provide for the optimum
practical use of the wood material.” Since the bill states that trust projects comply with NFMA
(among other laws), it is unclear whether these guidelines would necessarily continue to be
implemented and enforced.
Regulations for Implementation
The bill does not require regulations to implement its provisions. However, the USFS would be
implementing different timber sale procedures on different lands, depending on decisions by the
counties. Thus, regulations for the timber sale procedures for trust projects might be needed to
provide consistent practices and to assure that adequate receipts are deposited in the trust.
Moreover, counties could move into and out of the trust program from year to year, and the USFS
might need regulations to guide timber practices on sales begun as trust projects versus those
begun as non-trust projects.
Impacts on USFS Staffing and Funding
H.R. 4019 would likely increase USFS staffing needs and funding requirements. Additional staff
would likely be needed to prepare and administer the expected increase in timber sales, although
some staff might be saved by decreasing the needed environmental analysis on those sales.
However, implementing different sets of sale regulations on possibly adjoining lands could
significantly increase the total work effort. In addition, it seems likely that some additional staff
will be needed to administer the trust and trust payments.
Additional funding would likely be needed. As noted above, one possible avenue for achieving
the revenue requirements is to reduce or eliminate USFS deposits to many of the MSAs. Thus,
additional funding would likely be needed to replace funds for:
•
45
timber sale preparation and administration from the Salvage Sale Fund and
possibly the Timber Sale Pipeline Fund;
16 U.S.C. §472a.
Congressional Research Service
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Federal Forests County Revenue, Schools, and Jobs Act of 2012: Issues for Congress
•
reforestation from the K-V Fund and brush disposal funds;
•
fuel treatment to replace brush disposal funds and to replace forest health
improvements achieved through stewardship contracts; and
•
mitigation of the effects of the additional timber sales on other resource values
and conditions, such as degradation to water quality and loss of certain types of
animal habitats, from the K-V fund.
In addition, funding for staff to administer the trust and trust payments would likely be needed,
since trust funds are not authorized to be used for administration of the trust.
The extent of possible additional funding needs is unclear, but seems likely to be at least as much
as the decline in deposits to USFS MSAs—$142 million annually for FY2008-FY2010 for the
four timber-related accounts and another $124 million annually for FY2008-FY2010 for the other
MSAs. In the current tight federal fiscal situation, it is unclear how such additional funding might
be provided.
Author Contact Information
(name redacted)
Specialist in Natural Resources Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Legislative Attorney
[redacted]@crs.loc.gov, 7-....
Acknowledgments
Ross Gorte, retired CRS Specialist in Natural Resources Policy, made important contributions to this
report.
Congressional Research Service
23
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