Forestry in the 2008 Farm Bill

Congressional research reportJan 15, 2009

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RL33917

CRS Report for Congress

Prepared for Members and Committees of Congress

Forestry in the 2008 Farm Bill

Summary

The Food, Conservation, and Energy Act of 2008 (the 2008 farm bill) became law P.L. 110-246

when the House and Senate voted to override President Bush’s veto on June 18, 2008. The

conference agreement on the bill (H.R. 2419) had been enacted, vetoed by the President, and

overridden (P.L. 110-234), but inadvertently excluded the trade title. Both chambers repassed the

conference agreement (with the trade title) as H.R. 6124; it was again vetoed and again

overridden as P.L. 110-246.

The 2008 farm bill contained a forestry title and forestry provisions in other titles. General

forestry legislation is within the jurisdiction of the Agriculture Committees, and past farm bills

have included provisions addressing forestry, especially on private lands. Most federal forestry

programs are permanently authorized, and thus do not require reauthorization in the farm bill.

The forestry title (Title VIII) of the 2008 farm bill amended the Cooperative Forestry Assistance

Act of 1978 (P.L. 95-313; 16 U.S.C. §§ 2101-2114) in several ways. It added national priorities

for forestry assistance, required statewide forest assessments, created a new community forest and

open space conservation program (to protect forests threatened with conversion to non-forest

uses), established a new Coordinating Committee, added an Emergency Forest Restoration

Program, and authorized competitive allocation for some forestry assistance funding. The title

also directed cooperation and collaboration with Indian tribes, amended the Lacey Act to restrict

imports of illegally logged wood products, authorized changes to certain national forest timber

contracts, and provided grants to Hispanic-serving institutions. In addition, it reauthorized and

extended four existing programs.

Other titles also contained provisions affecting forestry. The conservation title (Title II) modified

most programs to include forestry activities and directed the creation of infrastructure for

environmental services markets (including carbon markets). The trade title (Title III) included a

section requiring lumber importers to report on imports and fees paid, to assure implementation

of the 2006 U.S.-Canada Softwood Lumber Agreement. The energy title (Title IX) included

woody biomass in many programs. Finally, the tax title (Title XV) included provisions to

authorize new tax-exempt forest conservation bonds, to modify income deductions for qualified

timber income, and to modernize and clarify the tax treatment of timber real estate investment

trusts (REITs).

Other forestry provisions were suggested by various interests, and might be considered in the next

farm bill. Funding is one issue, as half the mandatory spending for the Forest Land Enhancement

Program (FLEP) was cancelled and the program was not reauthorized. Protecting communities

from wildfire continues to be a priority for some, while controlling invasive species is a priority

for others. Assisting forest-dependent communities in diversifying their economies has also been

debated. Finally, some have expressed interest in trying to provide payments for ecosystem

services—forest values that have not traditionally been sold in the marketplace.

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Forestry in the 2008 Farm Bill

Contents

Background ...................................................................................................................................... 1

The 2008 Forestry Title.................................................................................................................... 2

Provisions Amending the CFAA ............................................................................................... 2

National Priorities ............................................................................................................... 2

Statewide Assessments and Strategies................................................................................. 3

Community Forest and Open Space Conservation Program ............................................... 3

Forest Resource Coordinating Committee .......................................................................... 3

Competitive Funding ........................................................................................................... 4

Emergency Reforestation .................................................................................................... 4

Other Provisions ........................................................................................................................ 4

Tribal-Forest Service Cooperative Relations ...................................................................... 4

Reauthorizations .................................................................................................................. 4

Illegal Logging .................................................................................................................... 5

National Forest Modifications ............................................................................................. 5

National Forest Timber Contract Options ........................................................................... 5

Hispanic-Serving Institutions .............................................................................................. 6

Forestry in Other Titles .................................................................................................................... 6

Conservation ....................................................................................................................... 6

Softwood Lumber Imports .................................................................................................. 6

Woody Biomass Energy ...................................................................................................... 7

Timber Tax Provisions ........................................................................................................ 7

Possible Forestry Issues for a Future Farm Bill ............................................................................... 8

Forestry Assistance Funding ............................................................................................... 8

Wildfire Protection .............................................................................................................. 9

Invasive Species .................................................................................................................. 9

Economic Diversity ............................................................................................................. 9

Markets for Ecosystem Services ....................................................................................... 10

Appendixes

Appendix. House, Senate, and Enacted Forestry Provisions of the 2008 Farm Bill...................... 11

Contacts

Author Contact Information........................................................................................................... 16

Acknowledgments ......................................................................................................................... 16

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Forestry in the 2008 Farm Bill

ederal forestry has historically been associated with agriculture, and with agriculture

legislation. Forestry programs have been addressed in past farm bills and other agriculture

legislation. This report provides brief background on the House and Senate Agriculture

Committees’ jurisdiction over forestry, with examples of bills addressed by the committees. It

then presents information on the forestry provisions in the 2008 farm bill, the Food,

Conservation, and Energy Act of 2008 (P.L. 110-246), organized by provisions in the forestry title

and other provisions.1 It concludes with some forestry issues that were debated and that might be

discussed in the next farm bill. The Appendix includes a side-by-side description of the House,

Senate, and enacted provisions.

Background

Both the House and Senate Committees on Agriculture have jurisdiction over “forestry in

general” and acquired national forests.2 Thus, the committees have been able to exert

considerable influence over federal forestry activities over the years. For example, the Forest and

Rangelands Renewable Resources Planning Act of 1974 (RPA, P.L. 93-378; 16 U.S.C. §§ 16001614) and the National Forest Management Act of 1976 (NFMA; P.L. 94-588), which guide

Forest Service (USFS) planning and management, were both initially referred to the Agriculture

Committees. More recently, the Healthy Forests Restoration Act of 2003 (P.L. 108-148; 16 U.S.C.

§§ 6501-6591) was referred to and reported by the Agriculture Committees.

In addition to forestry on federal lands, the Agriculture Committees have jurisdiction over

forestry research and forestry assistance to states and to private landowners.3 Forestry research is

governed largely by the Forest and Rangeland Renewable Resources Research Act of 1978 (P.L.

95-307; 16 U.S.C. §§ 1641-1647), which revised and updated the McSweeney-McNary Act of

1928. Forestry assistance is governed largely by the Cooperative Forestry Assistance Act of 1978

(CFAA; P.L. 95-313; 16 U.S.C. §§ 2101-2111), which revised and updated the Clarke-McNary

Act of 1924. Both laws were referred to and reported by the Agriculture Committees.

Recent farm bills have also included forestry provisions, primarily addressing the forestry

assistance programs. The 1990 farm bill (the Food, Agriculture, Conservation, and Trade Act of

1990, P.L. 101-624) contained a separate forestry title that:

•

created four new forestry assistance programs;

•

revised two existing forestry assistance programs;

•

amended two forestry assistance programs;

The conference agreement on the 2008 farm bill was originally approved by the House and the Senate as H.R. 2419

and vetoed by the President in May 2008. Both chambers overrode the veto, making the bill law (P.L. 110-234).

However, the trade title was inadvertently excluded from the enrolled bill. To remedy the situation, both chambers

repassed the farm bill conference agreement (including the trade title) as H.R. 6124. The President vetoed the measure

on June 18, 2008, and both chambers again overrode the veto, which made H.R. 6124 law as P.L. 110-246, and

superseded P.L. 110-234.

Jurisdiction over national forests established from the public domain lies with the House Natural Resources

Committee and the Senate Energy and Natural Resources Committee. See each Committee’s website for details on its

jurisdiction.

These three programs—forest management, forestry research, and forestry assistance—have traditionally been the

three principal branches of the USDA Forest Service.

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Forestry in the 2008 Farm Bill

•

revised the administrative provisions for forestry assistance;

•

created five special forestry research programs;

•

amended three existing forestry research programs;

•

authorized a private, non-profit tree planting foundation; and

•

created a new USFS branch: international forestry.

The 1996 farm bill (the Federal Agriculture Improvement and Reform Act of 1996, P.L. 104-127)

included only a few forestry provisions, extending the authorization for the one expiring

assistance program and adding a new funding option within an existing program.

The 2002 farm bill (the Farm Security and Rural Investment Act of 2002, P.L. 107-171) contained

a separate forestry title. The conference could not resolve many of the differences between the

House and Senate forestry provisions, and thus the conference report contained fewer provisions

than either. (Some of the disputed provisions were enacted subsequently in the Healthy Forests

Restoration Act.)

The 2008 Forestry Title

Numerous programs were created, modified, and/or extended in the forestry title of the 2008 farm

bill (Title VIII). The various provisions can be sorted into two groups: provisions amending the

Cooperative Forestry Assistance Act (CFAA), and other provisions.

Provisions Amending the CFAA

The CFAA provides various types of forestry assistance to states and private landowners.4 The

2008 farm bill modified several of the provisions, adding new requirements, authorizing new

programs and spending, and otherwise modifying forestry assistance programs.

One significant aspect of the 2008 farm bill was the lack of a private forest landowner assistance

program, which the Administration had proposed to terminate. The Forest Land Enhancement

Program (FLEP) was created in the 2002 farm bill. It was not reauthorized, and thus has expired.

FLEP funding ended earlier; funds were borrowed for wildfire suppression, a small portion was

repaid, and other funds cancelled. In the end, only about half of the $100 million of mandatory

spending enacted in 2002 was actually spent on the program. This marks the first time since the

CFAA was enacted in 1978 that no such forest landowner financial aid program is authorized.

National Priorities

The 2008 farm bill (§ 8001) established a new set of national priorities for federal assistance for

private forest conservation. It added a new subsection to § 2 of the CFAA:

For more information on these programs, see CRS Report RL31065, Forestry Assistance Programs, by (name re

dacted).

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Forestry in the 2008 Farm Bill

Act, the Secretary shall focus on the following national private forest conservation priorities,

notwithstanding other priorities specified elsewhere in this Act:

(1) Conserving and managing working forest landscapes for multiple values and uses.

(2) Protecting forests from threats, including catastrophic wildfires, hurricanes, tornados,

windstorms, snow or ice storms, flooding, drought, invasive species, insect or disease

outbreak, or development, and restoring appropriate forest types in response to such threats.

(3) Enhancing public benefits from private forests, including air and water quality, soil

conservation, biological diversity, carbon storage, forest products, forestry-related jobs,

production of renewable energy, wildlife, wildlife corridors and wildlife habitat, and

recreation.

Thus, the 2008 farm bill requires that forestry assistance aim to conserve working forests, protect

and restore forests, and enhance public benefits from private forests.

Statewide Assessments and Strategies

The 2008 farm bill (§ 8002) requires each state to conduct a statewide assessment of forest

resource conditions, trends, threats, and priorities to receive federal forestry assistance funds.

Each state also must prepare a strategy for addressing the identified threats, and describe the

resources needed to address those threats. The states were to prepare the initial assessment and

strategy, with updates as needed, and to coordinate with specified agencies and groups. The

Secretary may use up to $10 million annually for FY2008-FY2012 of appropriated forestry

assistance planning funds to assist states with their assessments and strategies.

Community Forest and Open Space Conservation Program

The farm bill (§ 8003) amended the CFAA to establish a Community Forest and Open Space

Conservation Program. The program provides grants to local governments, Indian tribes, or

nonprofit organizations to acquire lands threatened by conversion to non-forest uses and that

provide economic, environmental, educational, and recreational benefits and serve as models of

sustainable forest stewardship for other landowners. The grants may be up to 50% of the

acquisition cost, with the authorization for “such sums as are necessary.” This program is similar

to the Forest Legacy Program, which authorizes the federal acquisition, or grants to states for

their acquisition, of lands or easements on lands threatened by conversion to non-forest uses.

Forest Resource Coordinating Committee

The bill (§ 8005) replaced the existing USDA Coordinating Committee with a new Forest

Resource Coordinating Committee, composed of the heads of four USDA agencies (and chaired

by the Chief of the Forest Service) and representatives of state agencies, academia, and interest

groups. The Committee is to provide coordination and direction to the USDA agencies and to

coordinate with state agencies, focused on achieving the national priorities identified above.

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Competitive Funding

The 2008 farm bill (§ 8007) requires the Secretary to allocate a portion of funds available under

the CFAA on a competitive basis. The portion to be competitively allocated was “to be

determined by the Secretary,” in consultation with the Forest Resource Coordinating Committee.

The bill (§ 8008) also allows the Secretary to competitively allocate up to 5% of cooperative

assistance funding for “innovative national, regional, or local education, outreach, or technology

transfer projects” that contribute substantially to achieving the national priorities. These projects

require a 50% matching contribution.

Emergency Reforestation

The farm bill (§ 8203) added an Emergency Forest Restoration Program to the existing

Emergency Conservation Program under Title IV of the Agricultural Credit Act of 1978 (P.L. 95334; 16 U.S.C. §§ 2201-2205).5 The original program focused on emergency protection and

rehabilitation of wind- or water-eroded agricultural lands. The expanded program provides up to

75% of the costs (up to $50,000 annually) for landowners to rehabilitate or restore forest lands

damaged by storms, fires, drought, invasive species, or insects or diseases.

Other Provisions

Tribal-Forest Service Cooperative Relations

Subtitle B (§§ 8101-8107) addressed authorities for cultural and heritage cooperation. One

section authorizes the use of national forest lands, with federal assistance for reburial of human

remains and cultural items. Another section authorizes temporary closures of national forest lands

historically used by Indians to assure access for traditional and cultural uses. A third section

authorizes free use of trees and forest products for traditional and cultural (but not commercial)

purposes. The final substantive section generally prohibits disclosure of information on reburials

as well as information on tribal resources, cultural items, uses, or activities.

Reauthorizations

The 2008 farm bill reauthorized and/or extended several programs through 2012:

•

§ 8201, the Rural Revitalization Technologies Program, under § 2371(d)(2) of the

Food, Agriculture, Conservation, and Trade Act of 1990 (the 1990 farm bill; 7

U.S.C. § 6601(d)(2));

•

§ 8202, the Office of International Forestry, under § 2405(d) of the Global

Climate Change Prevention Act of 1990 (Title XXIV of the 1990 farm bill; 7

U.S.C. § 6704(d)); and

The CFAA contains a permanently authorized Emergency Reforestation program (16 U.S.C. § 2106a) that has not

been funded since FY1993.

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Forestry in the 2008 Farm Bill

•

§ 7413, the Renewable Resources Extension Act of 1978 (P.L. 95-306; 16 U.S.C.

§§ 1671-1676).6

•

The bill (§ 8205) also extended and modified funding for the Healthy Forest

Reserves. These reserves had been authorized through 2008 in the Healthy

Forests Restoration Act of 2003 (P.L. 108-148; 16 U.S.C. §§ 6571-6578). The

extension requires the Secretary to provide $10 million annually for the program

from the Commodity Credit Corporation for FY2008-FY2012.

Illegal Logging

The farm bill (§ 8204) amended the Lacey Act Amendments of 1981 (P.L. 97-79; 16 U.S.C. §§

3371-3378) to expand the restrictions on and penalties for importing wild plants or plant parts

(e.g., logs and lumber) removed in violation of domestic or foreign laws.7 It excluded crops,

cultivars, and plants and plant parts (e.g., seeds, roots, and cuttings) intended for planting in the

United States. It also expanded and clarified for plants the definition of taken or possessed

illegally, and establishes a process for legal plant imports.

National Forest Modifications

The bill included provisions affecting national forest lands:

•

§§ 8301 and 8303, modifying the boundary of the Green Mountain National

Forest (VT), and authorizing the sale or exchange of specific lands to the

Bromley Mountain Ski Resort, with specific directions on using any proceeds

generated by the sale or exchange;

•

§ 8302(a)-(e), directing the conveyance, without consideration, of certain USDA

lands in New Mexico to the Chihuahuan Desert Nature Park; and

•

§ 8302(f), directing the conveyance, without consideration, of certain lands in the

George Washington National Forest (VA) to the Central Advent Christian Church

of Alleghany County.

National Forest Timber Contract Options

The farm bill (§ 8401) allowed purchasers of non-salvage USFS timber sale contracts awarded

between July 1, 2004, and December 31, 2006, to request a modification to their contracts. The

options available were to cancel a portion of the contract, to have the payment rate recalculated

(called a rate redetermination), or to substitute an approved Producer Price Index for the index

specified in the contract. The Secretary may agree to the contract modification if the several

specified terms and limitations are met.

This was included in the forestry title of the Senate-passed bill (§ 8201), but was in the research and related matters

title (Title VII) in the House version and the enacted law.

See CRS Report RL33932, Illegal Logging: Background and Issues, by (name redacted).

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Forestry in the 2008 Farm Bill

Hispanic-Serving Institutions

The 2008 farm bill (§ 8402) authorized a program of competitive grants for undergraduate

scholarships to recruit, retain, and train Hispanics and other under-represented groups in forestry

and related fields. The program was authorized through 2012 at “such sums as may be necessary.”

Forestry in Other Titles

Forestry practices and woody biomass were addressed elsewhere in the 2008 farm bill, as well.

Many conservation programs include forestry practices that qualify as conservation activities for

cost-share assistance purposes. Also, many of the existing and proposed bioenergy programs

include woody biomass as a possible feedstock. Programs that include forest-related activities,

but are not focused primarily on these activities, are not included in this report; two specific

woody fuel energy programs in the 2008 farm bill are described below. The provisions addressing

softwood lumber imports from Canada and taxation of forests and forestland owners are also

discussed briefly.

Conservation

The conservation title of the 2008 farm bill (Title II) modified numerous agricultural conservation

programs to include forestry practices on nonindustrial private forest lands as approved activities

for the program.8 Forestry practices and nonindustrial private forest lands are now accepted for

the Conservation Stewardship Program (Subtitle D), Farmland Protection and Grassland Reserve

(Subtitle E), Environmental Quality Incentives Program (Subtitle F), and other conservation

programs (Subtitle G).

In addition, § 2709 added a new § 1245 to the 1985 farm bill (the Food Security Act of 1985, P.L.

99-198) addressing environmental services markets.9 The section required technical guidelines to

facilitate the development of environmental services markets, with priority on carbon markets. It

specified that the guidelines establish procedures to measure benefits, protocols to report benefits,

and a registry to track benefits. It also specified that the guidelines provide for verification of the

benefits, including possibly by independent third parties. While not establishing markets for

environmental or ecosystem services (discussed below), the guidelines would likely create the

infrastructure to allow such markets to develop.

Softwood Lumber Imports

Imports of softwood lumber from Canada have been of concern to U.S. lumber producers for

many years.10 A 2006 Softwood Lumber Agreement provided a temporary respite from the

dispute, but some U.S. producers have asserted that the Canadian producers are not paying the

export fees required by the agreement. A provision (§ 3301) in the agricultural trade and aid title

See CRS Report RL32940, Agriculture Conservation Programs: A Scorecard, by (name redacted) and (name

redacted).

See CRS Report RL34042, Environmental Services Markets in the 2008 Farm Bill, by (name redacted).

See CRS Report RL33752, Softwood Lumber Imports from Canada: Issues and Events, by (name redacted) and

(name redacted).

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of the 2008 farm bill (Title III) added a new Title VIII (Softwood Lumber) to the Tariff Act of

1930 (19 U.S.C. §§ 1202 et seq.). The provision requires softwood lumber importers to declare

imports and fees paid, allowing the federal government to verify and reconcile data on softwood

lumber imports and to assure implementation of the Agreement.

Woody Biomass Energy

The energy title of the 2008 farm bill (Title IX) included two provisions to expand the use of

woody biomass in energy production.11 Both provisions are in § 9001, which revises the energy

title of the 2002 farm bill (also Title IX). The first provision (§ 9012) created a competitive

research-and-development grant program for using woody biomass, with priorities for low-value

biomass, processes integrated with biorefineries, wood-derived transportation fuels, and improved

yield from energy plantations. Funding was authorized at $5 million annually for FY2008FY2012.

The other provision (§ 9013) created a new Community Wood Energy Program. This is a grant

program for state and local governments to develop a community wood energy plan and acquire

wood energy systems for public buildings. Project priorities are to be determined considering

energy efficiency and appropriate conservation and environmental criteria. The state or local

government monies are required to match the federal grant. Funding was authorized at $5 million

annually for FY2008-FY2012.

Timber Tax Provisions

The tax and trade provisions of the 2008 farm bill (Title XV) included provisions affecting forests

and forest landowners. The first (§15316) authorized, in limited amounts, tax-exempt private

activity bonds whose proceeds are to be used to finance private forest conservation efforts. This

would allow, for example, a non-profit organization to use tax-exempt bonds to acquire private

timberlands that were threatened with conversion to non-forest uses, such as residential

developments.

Another provision (§ 15311) added a new § 1203 to the Internal Revenue Code to permit

taxpayers to elect to deduct up to 60% of any timber gains from taxable income. The remaining

40% would be taxed at ordinary-income rates.

Finally, several provisions (§§ 15312-15315) altered and clarified the tax treatment of timber real

estate investment trusts (REITs). In recent years, most wood products companies that own

timberlands have separated the timberlands from wood processing (and other) operations, with

the timberlands administered under a REIT because of more favorable tax treatment for REIT

timber income than for wood processing company timber income. The provisions in the 2008

farm bill were to clarify, update, and make minor modifications to timber REIT taxation.

See CRS Report RL32712, Agriculture-Based Renewable Energy Production, by (name redacted).

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Forestry in the 2008 Farm Bill

Possible Forestry Issues for a Future Farm Bill

Reauthorization of the many agriculture programs is a prime reason for the periodic farm bills,

but most forestry programs are permanently authorized. This may reduce the pressure to include a

forestry title in upcoming farm bills. Nonetheless, interest groups have raised various forestry

issues other than the authorization levels for possible discussion within a future farm bill, such as

forestry assistance funding, wildfire protection, invasive species, economic diversity, and markets

for ecosystem services that have not traditionally been marketed.

Forestry Assistance Funding

Federal funding for forestry assistance programs has generally been rising, but the increase has

not been spread equally among the various programs. Since the severe 2000 fire season and the

development of the National Fire Plan, funding for cooperative fire programs (assistance to states

and volunteer fire departments) has risen substantially (more than triple pre-2000 funding), and

has remained at very high levels. Funding for Forest Legacy (acquisition of lands or easements on

lands threatened with conversion to non-forest uses) has also risen substantially, from less than $4

million in FY1998 to $50 million or more annually since FY2001 (and a request of $100 million

for FY2005). In contrast, the Administration has proposed terminating funding for the Economic

Action Program (economic assistance to rural, forest-dependent communities), and funding has

fallen from a peak of $54 million in FY2001 to less than $5 million in FY2008 (with no funds in

FY2007).

The adequacy of funding for private landowner assistance programs has been a concern for many.

These programs have provided cost-shares to qualified landowners for various forestry practices

that increase tree growth, improve wildlife habitat, protect watersheds (thus improving water

quality), and more. One of the changes enacted in the 2002 farm bill was to replace two

programs—the Forestry Incentives Program (FIP) and the Stewardship Incentives Program

(SIP)—with the Forest Land Enhancement Program (FLEP). Because funding for FIP and SIP

had been discretionary and either stagnant (FIP) or absent (SIP), FLEP was given mandatory

funding through the Commodity Credit Corporation of $100 million total through the end of

FY2007. However, some FLEP funds were borrowed to pay for firefighting and other funding

was cancelled; in total, about half of the $100 million “guaranteed” for FLEP was actually spent

on landowner assistance.

Even the existence of landowner cost-share assistance is in doubt. Forestry is included in many

conservation programs that provide financial assistance to private landowners, but FLEP was not

reauthorized in the 2008 farm bill. For the first time since 1978, no forestry-specific landowner

assistance program is authorized. Some question whether a modest forestry-specific assistance

program is needed, since a small share of the much larger conservation programs might provide

more forestry assistance funding. Nonetheless, Congress may revisit the issue of separate funding

for forest landowner assistance programs.

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Wildfire Protection

The threat of wildfire damages to resources and property seems to have increased in recent years.

Attention has focused on high biomass fuel levels (particularly in federal forests) and on homes in

or near at-risk forests, an area known as the wildland-urban interface (WUI).12 The 2002 farm bill

(§ 8003) created a new Community and Private Land Fire Assistance Program to assist

communities and private landowners in planning and other activities to protect themselves from

wildfires. The program was authorized at $35 million annually through FY2007 and “such sums

as are necessary ... thereafter.” The USFS has included such expenditures as authorized activities

in its State Fire Assistance Program. However, Congress has not appropriated funds explicitly for

this program.

Protecting private lands and structures from wildfires continues to garner congressional attention,

as the threat of wildfire persists. How to assist private landowners and communities, how to

combine this assistance with other assistance and incentive programs, and how to fund such

assistance could be debated in the farm bill context.

Invasive Species

Invasive species—non-native plants and animals that are displacing native ones—are becoming

recognized as a substantial problem.13 In a speech to the Idaho Environmental Forum on January

16, 2004, then-USFS Chief Dale Bosworth identified invasive species as one of the four major

threats to the nation’s forests and rangelands.14 The USFS’s Forest Health Management Program

has evolved from a mechanism to survey and control insects and diseases, to a program to address

all forest pests, including invasive species. Several times, the Bush Administration proposed an

Emerging Pests and Pathogens Fund to address rapidly developing problems of invasive species,

but the Appropriations Committees rejected the request both years. In its deliberations over a

future farm bill, Congress could address the structure and financing of programs to prevent and

control invasive species on federal, state, and private forests.

Economic Diversity

The economies of many rural communities have evolved around the use—finding, extracting,

processing, and selling—of natural resources. In some of these areas, one resource (e.g., timber,

minerals, livestock) has traditionally dominated the local economy, but the economies of such

areas can be devastated when that resource is depleted or when its markets are depressed

(permanently or even temporarily). Many communities have sought approaches to diversifying

their economies, to mitigate the economic and social disruption that can occur when a dominant

economic sector is depressed. The National Forest-Dependent Rural Communities Economic

Diversification Act of 1990 was enacted in §§ 2372-2379 of the 1990 farm bill to authorize

forestry and economic diversification technical assistance to “economically disadvantaged” rural

communities. Under the title Economic Action Program, funding rose from $14 million in

See CRS Report RS21880, Wildfire Protection in the Wildland-Urban Interface, by (name redacted).

See CRS Report RL30123, Invasive Non-Native Species: Background and Issues for Congress, by (name redacted) et

al.

The other three identified threats are fire and fuels, unmanaged recreation, and loss of open space. See

http://www.fs.fed.us/projects/four-threats.

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FY1996 to $54 million in FY2001, but has declined since, and President Bush has proposed

terminating the program in several budget requests. In its future farm bill deliberations, Congress

might consider ways to perpetuate economic assistance programs for traditional wood productsdependent communities, either as a continued USFS program or as part of other USDA rural

assistance programs.15

Markets for Ecosystem Services

Forests provide a broad array of environmental services—clean air and water, wildlife habitats,

pleasant scenery, and more—for which private landowners are generally not compensated,

because these services are typically not bought and sold in a marketplace. A variety of interests

have examined the possibilities of finding ways to compensate landowners for continuing to

provide ecosystem services.16 One means would be to develop such markets, and the 2008 farm

bill included a provision (§ 2709, discussed above) that could facilitate such a development.

Alternatively, some proposals are for federal “green payments” to directly reward farmers and

other landowners who provide environmental benefits through their land management practices.

Green payments for forest and other landowners’ ecosystem services might be discussed in

Congress’s deliberations in a future farm bill.

See CRS Report RL31837, An Overview of USDA Rural Development Programs, by (name redacted).

American Forests, the Southern Environmental Law Center, and others held a workshop to discuss landowner

compensation for ecosystem services provided in Washington, DC, on May 18-20, 2005.

Congressional Research Service

Appendix. House, Senate, and Enacted Forestry Provisions of the

2008 Farm Bill

House-Passed Bill

(H.R. 2419)

Current Law/Policy

Farm Security and Rural Investment Act

of 2002 [7 U.S.C. § 7901 note]

Farm, Nutrition, and Bioenergy Act of

2007 [§ 1]

Senate-Passed

Substitute Amendment

(H.R. 2419)

New Law

(P.L. 110-246)

Food and Energy Security Act of 2007

[§ 1]

Food, Conservation, and Energy Act of

2008 [§ 1]

No comparable provision.

Sense of Senate that the President should

act to ensure that imports of softwood

lumber from Canada are consistent with

the U.S.-Canada Softwood Lumber

Agreement. [§ 11903]

Amended the Tariff Act of 1930 to

require a softwood lumber importer

declaration program to verify and

reconcile data on softwood lumber

imports, to assure implementation of

U.S.-Canada Softwood Lumber

Agreement. [§ 3301]

The Forest Land Enhancement Program

provided financial aid for private forest

practices (mandatory spending of $100

million for FY2002-07). Only about half

of $100 million was spent; the remainder

was borrowed for firefighting or

cancelled by Congress. [16 U.S.C. § 2103]

General authority is provided for under

the Cooperative Forestry Assistance Act

of 1978 (CFAA, P.L. 95-313), as

amended, authorizes USDA to establish a

variety of cooperative programs to

protect and manage nonfederal forest

lands. [16 U.S.C. §§ 2101-2114]

No reauthorization provision, allowing

program to terminate.

No reauthorization provision, allowing

program to terminate.

No reauthorization provision, allowing

program to terminate.

No comparable CFAA provision.

Added new priorities: (1) conserving

working forests, (2) protecting forests

from natural threats and restoring

Similar to the House bill, but with subtle

differences in priorities for protecting and

restoring forests and for enhancing

Adopted House provision with minor

changes. [§ 8001]

AGRICULTURAL TRADE AND AID (TITLE III)

U.S.-Canada Softwood Lumber Agreement

No comparable provision.

FORESTRY (TITLE VIII)

Cooperative Forestry Programs

CRS-11

Current Law/Policy

House-Passed Bill

(H.R. 2419)

Senate-Passed

Substitute Amendment

(H.R. 2419)

New Law

(P.L. 110-246)

forests, and (3) enhancing public benefits

from private forests. [§ 8001]

benefits. [§ 8001]

No comparable CFAA provision.

No comparable provision.

Authorized new cost-share grants for local

governments, tribes, and non-profits to

acquire lands threatened by conversion to

non-forest uses and provide public

benefits. [§ 8002]

Adopted Senate provision. [§ 8003]

No comparable CFAA provision.

Added requirements for financial

assistance: state-wide forest assessment

of conditions, trends, threats, and

priorities and strategies to address

threats and describe resources. [§ 8002]

Added new requirements for financial

assistance: statewide forest plan to identify

critical areas; address regional needs; and

plan for managing and monitoring forests,

achieving national priorities. [§ 8004]

Adopted House provision with minor

changes. [§ 8002]

§ 2109(d)(1) of the CFAA defines “State”

to include “Trust Territory of the Pacific

Islands.” [16 U.S.C. § 2109]

Replaced “Trust Territory of the Pacific

Islands” with “the Federated States of

Micronesia, the Republic of the Marshall

Islands, the Republic of Palau.” [§ 8003]

Same as the House bill. [§ 8005]

Adopted House provision. [§ 8004]

Subsections of the CFAA provide for a

USDA Coordinating Committee, to

coordinate among agencies, and for State

Coordinating Committees, to coordinate

with state foresters and other interested

parties. [16 U.S.C. § 2113]

Replaced USDA Committee with new

Forest Resource Coordinating Committee, to coordinate among agencies,

state agency representatives, and others.

[§ 8004] Modified state committee duties

to include recommendations concerning

the new state-wide forest assessment and

strategies. [§ 8005]

Exempted projects proposed by Indian

tribes from State Coordinating Committee

recommendations. [§ 8003]

Adopted House provision with minor

changes. [§ 8005 & 8006]

No comparable CFAA provision.

Required a Secretary-determined portion

of funds to be allocated competitively

among states. [§ 8006]

No comparable provision.

Adopted House provision. [§ 8007]

No comparable CFAA provision.

Authorized up to 5% of funding for costshared competitively-allocated innovative

education, outreach, or technology

transfer projects. [§ 8006]

No comparable provision.

Adopted House provision. [§ 8008]

CFAA permanently authorized an Emergency Reforestation program. [16 U.S.C.

§ 2106a] It has not been funded since

FY1993.

Authorized a new Emergency Reforestation program as part of the Emergency

Conservation program (16 U.S.C. §§

2201-2204). [§ 8102]

Established new emergency landscape

restoration program to rehabilitate

croplands, grasslands, and private nonindustrial forests following natural

disasters. [§ 2398]

Adopted House provision with

changes—definitions of disaster; and

authorization of such sums as needed.

[§ 8203]

CRS-12

Current Law/Policy

House-Passed Bill

(H.R. 2419)

Senate-Passed

Substitute Amendment

(H.R. 2419)

New Law

(P.L. 110-246)

Other Forestry Provisions

No comparable provision.

Included definitions and made tribes eligible

for Forest Legacy funding [16 U.S.C. §

2103c] and forest management assistance.

[§§ 8101-8112]

No comparable provision.

Authorized Cultural and Heritage Cooperation, with purposes, definitions, and

prohibition on disclosing information, and

provides for reburial of human remains and

cultural items; for temporary area closures

for traditional and cultural purposes; and

for free use of forest products for

traditional and cultural purposes. [§§ 81218127]

Adopted Senate provision. [§§ 81018107]

The Healthy Forests Restoration Act of

2003 (P.L. 108-148) authorized

easements through FY2008 to protect

private forests for endangered species

and biodiversity. [16 U.S.C. § 6578]

Extended program with $10 million from

the CCC annually through FY2012. [§

8101]

Moved program into Food and Security

Act of 1985, authorizes such sums as

necessary, replaces 99-year easement

option with permanent easement, and

encourages tribes to participate. [§ 2331]

Adopted House provision with

changes—$9.75 million annually for

FY2009-FY2012; permanent easements

instead of 99-year easements; and

encouragement for tribal participation.

[§ 8205]

The Renewable Resources Extension Act

of 1978 (P.L. 95-306) authorized educational and technical aid via state extension agencies and eligible universities and

colleges. [16 U.S.C. §§ 1671-1676]

Extended the program through FY2012.

[§ 7507]

Extended the program through FY2012. [§

8201]

Extended the program through FY2012.

[§ 7413]

The Global Climate Change Prevention

Act of 1990 within the 1990 farm bill

authorized the Forest Service Office of

International Forestry through FY2007.

[7 U.S.C. § 6704(d)]

Extended the program through FY2012.

[§ 8103]

Extended the program through FY2012. [§

8202]

Extended the program through FY2012.

[§ 8202]

The 1990 farm bill, as amended,

authorized Rural Revitalization Through

Forestry via technology transfer, business

assistance, and local training, through

FY2008. [7 U.S.C. § 6601(d)(2)]

Extended the program through FY2012.

[§ 8104]

No comparable provision.

Adopted House provision. [§ 8201]

No comparable provision.

Authorized competitive forestry grants

No comparable provision.

Adopted House provision. [§ 8402]

CRS-13

House-Passed Bill

(H.R. 2419)

Current Law/Policy

Senate-Passed

Substitute Amendment

(H.R. 2419)

New Law

(P.L. 110-246)

to Hispanic-serving institutions to recruit,

retain, and train “Hispanics and other

under-represented groups.” [§ 8201]

No comparable provision.

Amended the Lacey Act Amendments of

1981 (P.L. 97-79; 16 §§ U.S.C. 3371-78) to

expand restrictions on and penalties for

importing wild plants/parts (e.g., lumber,

logs) removed in violation of U.S. or

foreign laws. [§ 8204]

Adopted Senate provision with

changes—definition of plant; exclusion

of recycled materials; clarification of

impact on exports; and regulations to

further define plant. [§ 8204]

No comparable provision.

Expanded boundary of Green Mountain

National Forest (VT) to allow additional

land acquisition. Authorizes exchange/ sale

of specific forest lands to Bromley

Mountain Ski Resort, with directions on

proceeds use. [§ 8203 & § 8205]

Adopted Senate provisions. [§ 8301 &

§ 8303]

No comparable provision.

Authorized certain land conveyance in

New Mexico. [§ 11075]

Adopted Senate provision, amended to

authorize a land conveyance in Virginia.

[§ 8302]

No comparable provision.

For non-salvage timber sale contracts

awarded between 7/1/04 and 12/31/06,

purchasers may request that the contract

be cancelled, the contract payment rate be

re-determined, or a substitute Producer

Price Index be used. USDA may agree to

the contract modification, if the specified

terms and limitations are met. [§ 8301]

Adopted Senate provision with minor

changes. [§ 8401]

Established (in limited amounts) a new type

of tax-exempt private activity bond for

bonds whose proceeds are used to finance

forest conservation. [§ 12211]

Adopted Senate provision with modest

changes. [§ 15316]

TAX AND TRADE PROVISIONS (TITLE XV)

Timber Provisions (Part 1, Subpart B)

Tax-exempt bonds for forest

conservation. In general, interest on

bonds issued by state and local

governments is tax-exempt if used for

governmental purposes (IRC section

103). However, not all state and local

bonds used to finance private activities

are tax exempt; private activity bonds are

CRS-14

No comparable provision.

Current Law/Policy

House-Passed Bill

(H.R. 2419)

Senate-Passed

Substitute Amendment

(H.R. 2419)

New Law

(P.L. 110-246)

subject to certain restrictions and are

subject to caps. [IRC §§ 141-142]

Deduction for qualified timber gain. For

tax years beginning before 2011,

individuals’ long term capital gain is taxed

at reduced rates (generally, 15%; section

1 of the tax code). Taxpayers are

permitted to treat the cutting of timber

as a sale eligible for capital gains

treatment. [IRC § 631]

No comparable provision.

Added new section 1203 to the Internal

Revenue Code, which permits taxpayers to

elect to deduct 60% of timber gain from

taxable income. (The remaining 40% would

be taxed at ordinary-income rates.) [§

12212]

Adopted Senate provision with

changes. [§ 15311]

Timber real estate investment trust

(REIT) provisions. REITs are speciallydefined “pass through entities” that are

permitted to deduct dividends they

distribute from taxable income, thus

eliminating corporate-level tax from

distributed income. [IRC §§ 856-859]

REITs are subject to several minimumdistribution requirements and 75% of

REIT gross income must consist of

certain types of real estate income.

No comparable provision.

Included several provisions affecting timber

REITs, including clarification that timber

gain is qualified real estate income for a

REIT. [§§ 12213-12217]

Adopted Senate provisions. [§§ 1531215315]

CRS-15

Forestry in the 2008 Farm Bill

Author Contact Information

(name redacted)

Analyst in Natural Resources Policy

/redacted/@crs.loc.gov, 7-....

Acknowledgments

Ross Gorte, retired CRS Specialist in Natural Resources Policy, made important contributions to this

report.

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