Recreation Residence Authorizations; Notice DEPARTMENT OF AGRICULTURE

SUMMARY: The Forest Service is adopting revised policies and procedures

for administering special use permits that authorize privately owned

recreation residences on National Forest System lands. This action is

in response to an administrative appeal decision by the Assistant

Secretary of Agriculture for Natural Resources and Environment that

found that certain portions of the policy adopted on August 16, 1988,

exceeded agency authority. The decision directed that those portions of

the policy be stayed from implementation pending reformulation and

publication of a revised policy in the Federal Register. In addition to

adopting new provisions affected by the appeal decision, this final

policy also conforms administrative provisions to revisions in the

Secretary of Agriculture's Administrative Appeal regulations governing

authorizations for occupancy and use of National Forest System lands,

adopted after the original recreation residence policy. This final

policy also clarifies the policy for determination of annual rental

fees. The intended effect of this action is to administer recreation

residence authorizations consistent with statutory authority.

EFFECTIVE DATE: This policy is effective June 17, 1994.

FOR FURTHER INFORMATION CONTACT:

Questions about this policy should be addressed to J. Kenneth Myers,

Lands Staff, Forest Service, USDA, P.O. Box 96090, Washington, DC

20090-6090, (202) 205-1248.

SUPPLEMENTARY INFORMATION: On August 16, 1988, the Forest Service

adopted a final policy and procedures for administering special use

permits that authorize privately-owned recreation residences on

national Forest System lands (53 FR 30924). The policy established a

new procedure for calculating annual fees, gave direction on tenure and

renewability of the permits, and described procedures to be followed

when the recreation residence lot was needed for a higher public

purpose

This policy was appealed to the Secretary of Agriculture on

September 15, 1988. The appellants alleged that the process by which

this policy was developed was flawed because the policy exceeded

statutory limitations on recreation residence use of the National

Forests, and that the appellants and the public were adversely affected

by the policy

In a decision dated February 15, 1989, the Assistant Secretary of

Agriculture for Natural Resources and Environment remanded the policy

to the Forest Service for restudy and reformulation and stayed the

implementation of certain provisions of the 1988 policy as follows: (1)

Those nonrenewal provisions relating to or requiring a showing of

higher public purpose where the lands occupied were deemed needed for

other than recreation residences; (2) those provisions requiring

automatic permit renewal 10 years prior to expiration unless nonrenewal

had been established; (3) those provisions requiring the offering of

``in-lieu'' lots to permittees who had received notice of nonrenewal or

termination; and (4) those provisions weighted against consideration of

commercial uses for lots when nonrenewal of the recreation use was

contemplated. Further, the decision expressed concern about other

provisions of the policy, such as fee determination procedures. In

addition, the Assistant Secretary required that the remaining features

of the final policy be designated as interim policy pending its

reformulation following all applicable process requirements.-

The policy adopted August 16, 1988, was issued as direction to

Forest Service personnel through amendments and interim directives to

Forest Service Manual (FSM) chapters 2340 and 2720 and Forest Service

Handbook (FSH) 2709.11--Special Uses Handbook. On June 1, 1989, at 54

FR 23499, the Forest Service gave notice that the direction in FSM 2340

and 2720 was to be revised, that the remaining portions of the policy

were designated as interim policy in compliance with the Assistant

Secretary's decision, and removed those provisions stayed by the

Assistant Secretary.

On September 20, 1989, in response to the Assistant Secretary's

decision, the Forest Service gave notice that it was seeking comments

on an Advance Notice of Proposed Policy (54 FR 38700). A 60-day comment

period was provided which was extended an additional 60 days, expiring

on January 19, 1990. In this notice, the agency offered alternative

approaches to those portions of the policy stayed by the Assistant

Secretary's decision and asked for public advice and comment on those

provisions and on the options that the agency identified to replace the

current policy provisions.

The public comment received on the September 20, 1989, notice was

considered in the development of a proposed reformulated policy

published on October 10, 1991 (56 FR 51260). A 90-day comment period

was provided for this notice which was extended an additional 60 days

to March 9, 1992. This proposed policy also provided appropriate

clarifying and explanatory material for those parts of the 1988 policy

shown as areas of concern in the Assistant Secretary's decision.

Analysis and Response to Public Comments

The Forest Service received 7,793 comments on the October 10, 1991,

notice of proposed policy. The analysis of the public comments was

accomplished using standard Forest Service procedures designed to

ensure an objective and systematic analysis. Information was tabulated

electronically. The number and percentage of responses by category of

respondents (as identified by the respondent) is as follows:

------------------------------------------------------------------------

Respondent type Number Percentage

------------------------------------------------------------------------

Permittee..................................... 4,656 60

Friend or Family of Permittee................. 996 12

Permittee Association......................... 47 1

Other Organization............................ 3 (\1\)

Interested Party, Not a Permittee............. 2,084 26

Forest Service Personnel...................... 7 (\1\)

-------------------------

Total................................... 7,793 100

------------------------------------------------------------------------

\1\Less than 1 percent.

Comments were received from 45 States, Puerto Rico and the District

of Columbia. Over 50 percent of the responses came from California

which contains about 40 percent of all recreation residences. There

were 312 comments received after the closing date of the notice and not

considered in the analysis of comments.

Respondents comments were sorted according to the proposed policy

provisions identified in the comment. They were further identified as:

(1) Agreeing with the provision, (2) agreeing with the provision but

with a contingency (comment), (3) disagreeing with the provision, and

(4) disagreeing with the provision but with a contingency.

Of the 7,793 responses received, 6,264 (80 percent) were in the

form of questionnaires developed and distributed by 2 national

permittee associations. The questionnaires presented several general

statements describing a premise or belief of what the content of the

revised policy should be to which the respondent could either agree or

disagree. For example, question 1 of the National Forest Homeowners

questionnaire stated ``I strongly support the policy provision that

says recreation residences are a valid and important recreation use,

and that it is Forest Service policy to continue them. Please leave

this provision unchanged.'' The fourth question of the National

Inholders Association questionnaire stated ``Removal of recreation

residences will cause emotional pain and disruption for forest

permittees and their families. It will cause waste of resources. For

that reason, the proposed policy of allowing removal of existing

recreation residences where there is no higher use (FSM 2721.23e) is

arbitrary and wasteful.'' The questionnaire responses were analyzed and

the general views of the respondents considered during preparation of

this final revised policy. These views were helpful in identifying

issues of concern to permittees.

Narrative comments were attached to 704 questionnaires. In

addition, 1,529 letters containing comments on specific provisions of

the proposed policy were received. The total of 2,233 narrative

responses, several of which provided very detailed analysis and

recommendations on policy provisions, provided the most useful

information in preparing the final revised policy and form the basis

for the following comment analysis.

In addition to providing the questionnaire response forms to their

members, the permittee associations provided narrative responses to the

proposed policy. These were generally detailed analysis of the policy

with the associations' recommendations for revision and improvement.

A summary of the general comments received and the agency's

response to them is presented first, followed by a summary of the

specific comments received and the agency's response. Specific comments

are organized in the same format as found in the supplementary

information to the proposed policy notice, that is, the same 7 topic

headings representing the major issues addressed in the proposed policy

are used. The comment analysis concludes with a discussion of the

matters of concern in the Assistant Secretary's decision and the

agency's response.

General Comments

Over half of the 2,233 respondents provided general comments on

recreation residence use which were not directed at specific provisions

of the policy. Many respondents affirmed their desire to keep their

cabins, at the same location, at reasonable cost, and without

continuous fear of nonrenewal of their permits. These respondents felt

the agency, through the proposed policy, was abandoning support for the

recreation residence program, was biased against permit holders, and

was seeking to remove this use from National Forest System lands. Some

respondents, however, felt the agency was biased in favor of permit

holders.

Many respondents offered eloquent testimony to the significance of

the cabin to their family, citing emotional ties to the site that span

several generations. Others emphasized the importance of the recreation

residence use to the National Forest, describing how the cabins are

used by a large segment of the public for recreation, generate income

to the Treasury, and contribute to the stewardship of the National

Forests.

One permittee association advocated expansion of existing

recreation residence tracts and establishment of new tracts. This view

was based on the belief that the agency was in violation of the Civil

Rights Act of 1964 by failing to make recreation residence lots

available to persons of minority races, or of diverse religious,

political, and sexual beliefs. On the other hand, several respondents,

favored no expansion to phasing out of all recreation residence tracts.

Many respondents objected to the appeal of the August 10, 1988,

policy and 270 suggested that the policy be restored in its entirety.

Often, these respondents stated that the proposed policy was biased and

discriminatory against cabin owners and was overly responsive to the

views of those who opposed recreation residence use. A smaller number

felt the proposed policy was an improvement over the 1988 policy, but

that there were several flaws in the 1988 policy not addressed in the

proposal, particularly that the bias in favor of permit holders, as

identified in the appeal decision, had not been corrected. Eleven

respondents offering general comments generally agreed with the

proposed policy, that it responded to the appeal decision, was

constructive and a step in the right direction.

The Forest Service recognizes that there is a divergency of opinion

on recreation residence use on the National Forests. It is sympathetic

to those who have enjoyed the privilege of the use for many years and

who want to continue the privilege. Further, the contributions these

holders make to the management and protection of the National Forests

is acknowledged.

The agency also recognizes that increasing demands are being placed

on the National Forests to meet a wider array of public uses.

Significant new public laws have been enacted since the act authorizing

privately owned recreation residences on the National Forests was

enacted in 1915. These laws, particularly the National Environmental

Policy Act and the National Forest Management Act of 1976, directly

impact the way the agency manages public and private uses of the

National Forests. Equally significant, public perceptions of how the

National Forests should be managed have changed in the 75 years the

recreation residence program has been in existence.

The agency, by policy adopted over 25 years ago, stopped the

establishment of new recreation residence tracts. Subsequently, it

stopped issuing new permits for vacant lots in already established

tracts. This has fixed the number of recreation residences in existence

to a current 15,600. This action was taken in response to an increasing

public demand for recreation use on the National Forests in the 1960's.

The rationale supporting that policy decision still applies. The

agency, while recognizing the views of those respondents who seek to

create new recreation residence opportunities, believes that such

action would not be in the public interest. It does not propose to

create tracts nor offer new permits for recreation residence use.

Recreation residences are bought and sold in the private real estate

market, and, as such, are available to all individuals under the laws

of the States and local governments in which they are located.

The Forest Service, in responding to the administrative appeal

decision, seeks a permit review and issuance process that does not show

bias in favor of the recreation residence use, nor an intent by policy

to remove the permitted use.

Readers are reminded that whether recreation residence use should

continue to be permitted on National Forest System lands is not the

issue addressed in this final policy. The Assistant Secretary's appeal

decision did not challenge the appropriateness or continuation of the

use. Rather, it focussed on legal flaws identified in the 1988 policy

and in the process by which that policy was adopted. This final policy

responds solely to the specific provisions in the appeal decision. The

agency has not revised, redirected, or otherwise changed the national

guidance stated in the 1988 policy and which was not debated in the

appeal decision.

Several respondents offered editing suggestions on the proposed

policy. For example, the words ``lot'' and ``site'' were used

interchangeably in describing the holder's permitted area. The agency

agrees that use of a single term improves clarity and has used the word

``lot'' throughout the final policy. Also, the words ``permittee'' and

``holder'' were both used to identify the party holding the permit for

the recreation residence lot. Holder is the correct term and is used

throughout the final policy.

The use of terms ``termination'' and ``revocation'' in this policy,

when describing the action leading to cessation of the privileges

granted by the permit, have caused confusion among holders and agency

field personnel alike. A recent amendment to the Manual (FSM 2705)

clarified these terms and made their use consistent with regulations at

36 CFR 251. This action requires a conforming revision to the

recreation residence policy. In most cases, the term ``revocation''

replaces the term ``termination.'' To aid readers in understanding use

of these terms in the final policy, they are defined as follows:

Revocation: The cessation of a special use authorization by

action of the authorized officer prior to the end of the specified

period of occupancy or use due to the holder's noncompliance with

the terms of the authorization, failure to exercise the privileges

granted, or for reasons that are in the interest of the general

public. Revocations are appealable by the holder.

Termination: The cessation of a special use authorization by

operation of law or the occurrence of a fixed or agreed-upon

condition, event or time without the necessity for any decision or

action by the authorized officer.

Several other editing suggestions are incorporated into the final

policy.

Finally, many respondents offered comments on provisions of the

policy that were not addressed in the Assistant Secretary's appeal

decision. For example, several respondents objected to the provision in

the permit which requires holders to ``inspect the lot and adjoining

areas for dangerous trees, hanging limbs, and other evidence of

hazardous conditions which could affect the improvements and or pose a

risk of injury to individuals.'' (Permit provision IV.G) This provision

was in the permit adopted as part of the August 10, 1988, policy. As

such, it was not considered in this revision of that policy. The agency

appreciates receiving these comments. They are an indication of holder

concerns and will be considered as the policy is updated and kept

current.

Specific Comments and Response

The October 10, 1991, Federal Register notice requested public

comments on a proposed revision to the recreation residence policy. The

material in that notice was arranged in 7 discussion topics that

grouped the revisions into elements or segments of the four agency

directives that bear on recreation residences. These 7 discussion

topics are also used in this notice. However, the entire recreation

residence policy is presented in this notice so that readers can see

the revisions in the context of the complete direction.

Many of the respondents offering specific comments also asked that

key provisions and phrases from one part of the policy be added to

provisions elsewhere in the policy to lend emphasis or clarity to the

provision. The Forest Service advises that the redundancy occurring as

a result of this would be inconsistent with agency directive system

policy. Readers are also advised that Forest Service direction for

administering recreation residence permits, or any other type of

special use authorization, does not stand alone in the agency's

administrative manual or handbooks. The direction in this notice is

dependent on overall direction affecting the entire special use program

which appears in Federal Regulations at 36 CFR part 251, subpart B, and

titles 2300 and 2700 of the Manual. In addition, other direction

affecting the management of the National Forest System bears upon the

recreation residence policy. In particular, direction dealing with

planning for all land and resource management activity and related

direction dealing with environmental analysis and compliance with the

National Environmental Policy (NEPA), found at FSM 1920, and FSM 1950

and FSH 1909.15, respectively, greatly influences the direction

contained in this notice. The agency has added cross-references where

appropriate when a specific policy provision is guided by broader

policy direction.

1. Validity of the Recreation Residence Use. The proposed direction

at FSM 2347.1 set forth the basic policy on recreation residence use

and continuance. The beginning paragraph of that section established

that recreation residences were a valid use of National Forest System

land and an important component of the overall National Forest

recreation program. A clear statement of policy followed stating that

the use could continue to occupy the Federal lands. The purpose of this

revision was to place the recreation residence use on an equal footing

with other uses when decisions involving allocation of the land were

being made.

Comments. There were 738 comments received on this proposed policy.

Most supported the policy statement and suggested it be strengthened.

For example, several respondents suggested the following language:

``Therefore, when considering nonrenewal of recreation residence

permits for an alternative use be sure that the value of the

alternative public use is equal to, or exceeds the value of the

existing recreation use.'' Other respondents opposed the provision,

stating that it overstated the importance of the use and that such

words as ``important'' implied that other uses were not important. It

was suggested that the word ``equally'' be placed before the words

``valid'' and ``important'' to provide better balance to the policy

statement.

Response. The Forest Service believes that recreation residences

are a valid and important use of the National Forests. Equally, it

believes that existing uses should be allowed to continue. The agency

recognizes that there may be rare instances when a use is not

consistent with a National Forest's Land and Resource Management Plan

(Forest plan), and the recreation residence use must give way to an

alternative public use. However, the overall policy stated in this

section is appropriate to ensure that any decision to not allow a new

permit for an established use to be issued must be fair and equitable

and supported by careful analysis and documentation. The Forest Service

is satisfied that the policy statement in FSM 2347.1 adequately

establishes the appropriateness of the recreation residence use without

the need for further clarification and will adopt the language as

proposed.

2. Conformity to the 1915 Term Permit Act. This topic is confined

to one provision of the proposed policy. Proposed paragraph 2 of FSM

2347.03 stated: ``Ensure that recreation residence use does not

preclude the general public from full enjoyment of the natural, scenic,

recreational, and other aspects of the National Forests as stipulated

in the Act of March 4, 1915 (FSM 2701).'' This provision was placed in

the proposed policy to emphasize this requirement of the 1915 Act and

uses words from the Act. This provision was worded similarly in the

1988 policy but placed in a different location. The provision was moved

into the policy section in the 1991 proposal to give greater emphasis

to the direction and thereby respond to the appeal decision's direction

to make the policy neutral.

Comment. There were 996 comments addressed to this provision of the

proposed policy. The word ``ensure'' was the focus of nearly all of the

comments. Respondents felt that use of this word, conveying certainty

of action, changed the intent of the 1915 Act language and would lead

Forest officers, upon determining any impact on ``full enjoyment,'' to

conclude that the permitted use should not continue. (It should be

noted that ``ensure'' was used in the provision in the 1988 policy.)

Some respondents pointed out that it would be impossible for a Forest

officer to ensure compliance with the Act. Other respondents stated

that the provision in the 1915 Act was not intended to discourage

continuation of the use. They pointed out that the Act does not

establish priority of use (recreation residence versus other public

uses), thus an equality, not an hierarchy, of use is implied.

Response. The Forest Service agrees that the word ``ensure'' is

inappropriate in this provision and that equality in the consideration

of uses is required. Further, the agency finds that the location of a

provision in FSM 2347.03 dealing only with recreation residences is not

correct. The subject of Manual section 2347 is ``Non-commercial

Recreation Use,'' a broad category encompassing privately built and

owned structures of which recreation residences are but one. Also

included in this category of use are private clubs and lodges,

houseboats, boat docks and wharves, and shelters. All of these non-

commercial uses come under the guidance of the 1915 Act. The agency

believes the guidance is appropriate but must be revised to reflect the

broader scope of the FSM section. Therefore, the provision is retained

but renumbered as paragraph 3 to reflect a more logical sequence of

direction. The provision has been rewritten to remove ``ensure'' and to

substitute ``non-commercial recreation sites'' for ``recreation

residences.'' The reference to the 1915 Act is also removed to avoid

redundancy, as this Act is cited in the list of authorities under which

term special use authorizations can be granted (FSM 2701).

3. Determination of Permit Renewal and Nonrenewal. The provisions

of the proposed policy dealing with continuation of the recreation

residence use, conversion to alternative public uses, and the analysis

and decision-making process involved in these actions brought forth the

largest number and most detailed comments. There were over 1,900

comments directed to these policy provisions, many of which were very

detailed, and offered lengthy revisions to the proposed policy. This is

to be expected as these provisions are at the core of the appeal

decision and are central to the holders' concern that they will be able

to continue the use. For ease of analysis, the discussion is separated

into the four parts of the proposed policy that cover this topic.

a. Recreation Residence Continuance. The applicable direction is

found at FSM 2347.03 and 2721.23e. The broad direction on continuation

of the recreation residence use (paragraph 3, FSM 2347.03 of the

proposed policy) stated: ``Continue to authorize those existing

facilities now occupying National Forest land under special use

authorization that (a) are consistent with management direction given

in the Forest Land and Resource Management Plan, (b) are at locations

where the need for an alternative public purpose has not been

established, (c) do not constitute a material, uncorrectable offsite

hazard to National Forest resources, and (d) do not endanger the health

or safety of the holder or the public.'' The proposed policy's guidance

on the decision to reissue the permit is found at FSM 2721.23e,

paragraph 1 as follows: ``The Land and Resource Management Plan (Forest

plan) provides direction for continuance of the recreation residence

use (FSM 1920). As Forest plans are revised, recreation residence use

shall be explicitly addressed in the plan through delineation of

management areas and associated management area prescriptions (FSM

1920).''

Comment. There were 136 comments received on these two provisions

of the proposed policy. The use of the Forest plan as the means of

determining recreation residence continuance is the most significant

departure the proposed policy makes from the 1988 policy. Most of the

respondents were suspicious of this change, stating their concern about

inconsistent or arbitrary local treatment of the residences, inability

to participate in the decision-making process involving Forest plans,

and the failure to use environmental analysis standards when amending

or revising Forest plans.

Respondents felt that the decision process on continuance was

flawed because continuance was determined by whether the use was

consistent with the Forest plan. They advocated a return to the process

described in the 1988 policy which stated the decision to continue the

use was to be made by a separate, free-standing analysis that did not

depend on the language of the Forest plan. In the proposed policy, the

consistency determination in the context of recreation residences would

be made on the basis of a comparison to the land and resource

allocations made in the Forest plan. If land allocated to the

recreation residence use was consistent, the use could continue. If not

consistent, the use would be analyzed to determine if it could be made

consistent or must be removed in favor of the proposed action, or

alternative public use.

Other respondents described the policy provision allowing

continuance of those existing facilities which ``. . . are at locations

where the need for an alternative public purpose has not been

established'' as a ``Pandora's box,'' since there are always

alternative purposes. They were concerned that the direction provided

no guidelines or criteria for use in weighing alternative uses of

National Forest land and thus would allow decisions which were

arbitrary and capricious. The respondents asked for a definition of

alternative public purpose.

Others opposed these provisions because they believed use of the

phrase ``continue to'' biased the decision to offer a new permit.

Finally, respondents felt that the determination of whether the use

should continue based on a policy promulgated by the agency's

Washington Office could result in arbitrary action by individuals

removed from the issue as it should be addressed. They suggested

instead that each location should be viewed on its own and not be part

of a nationwide policy. Conversely, some respondents felt the proposed

policy left too much up to the whims of local forest officials where

decisions could be made arbitrarily and capriciously without regard to

national policy.

Response. The proposed policy significantly changed the 1988

policy's direction in the way recreation residence continuance

decisions would be made. Making the Forest plan the foundation for the

decision to continue the use is a major departure from the ``analysis

of continuance'' process set forth in 1988 policy. Most permit holders

are not familiar with the forest planning process that produces the

individual National Forest Land and Resource Management plan. In fact,

many indicated they were unaware that a plan encompassing all

activities on the National Forest existed. Those that were aware of the

planning process often did not make the link between their permitted

use and the broad guidance set forth in the plan.

The agency recognizes the significance of this departure from

previous policy. However, it must be guided by statutory authority and

its own implementing direction. The National Forest Management Act of

1976 requires the agency to use an integrated, interdisciplinary forest

planning process to make the land and resource allocation decisions for

each National Forest. Further, section 6 of the 1976 Act requires that

all permits, contracts, and other instruments for the use and occupancy

of National Forest System lands shall be consistent with the Forest

plan. Thus, recreation residence use and continuance must be brought

into compliance with that direction.

Respondents' concerns that use of the Forest plan to guide permit

continuance decisions or determining alternative public purposes

reflects the lack of understanding of the planning process. The

planning policy sets forth clear direction to involve all affected

parties and the public when amending or revising a Forest plan. These

requirements are emphasized in the proposed recreation residence policy

which requires notification and involvement of holders and their

representatives (FSM 2721.23h, paragraph 2). The agency believes that

requirements that holders be involved in all actions affecting the

recreation residence use are adequately covered in the policy and will

not lead to inconsistent or arbitrary treatment of the use during

Forest planning.

Environmental analysis is the cornerstone upon which decisions by

local agency officials rest. Agency policy on environmental analysis at

FSM 1950 and FSH 1909.15 is clear and detailed. Actions which affect

the Forest plan, including those which implement the plan must be

supported by environmental documentation. Respondents concerns that the

recreation residence use will be adversely affected through a process

that they are not informed of or involved in must consider this policy

in its entirety and recognize that long-established agency policy would

not permit this to happen.

Use of the term ``alternative public purpose'' in the proposed

policy reflects the agency's recognition that the Assistant Secretary's

appeal decision required decisions on continuance to be made in a

neutral manner. The holders' desire for continued use cannot be

considered superior to other public uses but must be judged in the

context of the overall use of the land. The word ``alternative'' is

intended to convey the concept of equality of use instead of

superiority of one use over another. The agency recognizes that the

recreation residence use must be considered equally when considering

allocation of land and resources through the Forest planning process.

On the other hand, it does not, indeed, it cannot, place the use at a

higher level than other uses in the Forest planning process. It is the

Forest planning process which defines and limits alternative public

uses through allocation of land and resources. Alternative public uses

can only be those which the Forest plan defines. Thus, the phrase is

considered the most accurate way to portray the actions involved in

recreation residence continuance and will be retained in the final

policy.

The agency rejects respondents' concerns that the term ``continue

to'' in FSM 2347.03, paragraph 1, lends bias toward renewal of the

permit. The term is fully consistent with policy stating that the use

is a valid use of National Forest land. Further, it is limited by the

language which follows in the provision.

The agency also rejects respondents' objections to policy

promulgated at the national level which cannot adequately address local

conditions affecting the use, and, conversely, that such decisions

should not be made by local officials. The proposed policy balances

national policy on recreation residence use with a planning and

decision-making process made at the individual National Forest level.

This decentralized process is considered the most appropriate way to

manage these Federal lands.

Therefore, the agency will adopt the language of the proposed

policy at FSM 2347.03, paragraph 3 (renumbered as paragraph 2 in the

final policy), and FSM 2721.23e, paragraph 1, pertaining to continuance

of the use unless the use is at a location where an alternative public

purpose has been established through the Forest planning process.

Paragraph 1, FSM 2721.23e, has been edited for clarity and consistency

with the forest planning process.

b. Use Consistent With Forest Plan. The proposed policy at FSM

2721.23e, paragraph 2, provided guidance when making decisions on

continuance of the use. It stated: ``Decisions to issue new recreation

residence term permits following expiration of the current term permit

require a determination of consistency with the current Forest plan.

Make this determination by evaluating the extent to which continued

recreation residence use adheres to the standards and guidelines

contained in the management prescription for the appropriate management

area. Address continuation of recreation residence use on a tract or

group of tracts basis, not on individual sites.'' Subparagraph a then

sets forth direction when recreation residence use was consistent with

the current Forest plan. When the use was consistent with the plan, the

use would continue, a new permit issued, and the decision to issue

categorically excluded from environmental documentation, unless

``extraordinary circumstances'' were present that would merit analysis

of environmental effects. The procedural direction in FSH 41.23a

provided detailed instructions on issuing new permits when the use was

consistent with the Forest plan.

Note: The 1991 proposed policy advised that the agency was

currently revising its policies and procedures for complying with

NEPA and that the adoption of final NEPA policy could affect the

direction contained in the proposed policy relating to environmental

analysis and documentation. The final NEPA policy was adopted on

September 18, 1992 (57 FR 43180), and does affect this proposed

policy.

Changes in the recreation residence policy made necessary by the

final NEPA policy are noted in the following discussion.

Comment. There were 771 comments directed to this provision that

gives guidance where recreation residence use is consistent with the

Forest plan. While respondents favored the expedited process in issuing

a new permit, nearly all stated some degree of opposition to the

direction. Comments focused on the requirements for environmental

analysis as the basis for a decision to continue the use, particularly

the requirements relating to ``extraordinary circumstances.''

Respondents felt that recreation residences, having been in place for

many years, do not cause significant environmental effects and the

decision to issue a new permit should be categorically excluded from

environmental documentation. Respondents also suggested that requiring

environmental analysis was unnecessary, redundant, and costly. They

suggested that the requirement be severely limited and each decision to

prepare environmental documentation be reviewed by superior officials

before being implemented.

Respondents expressed concern that extraordinary circumstances,

described in the notice as including the presence of threatened or

endangered species or their critical habitat, flood plains, wetlands,

archaeological sites, or historic properties or areas, were present in

nearly every recreation residence tract, and thus would always trigger

further environmental analysis even though the recreation residence has

existed within such circumstances and without causing adverse impacts.

Respondents pointed out that the fact the use was consistent with the

Forest plan would be rendered meaningless because all uses would be

subjected to an environmental analysis or environmental impact

statement before a new permit could be issued. They felt that this

requirement was too open-ended and discretionary and would allow

generalities, such as open space, visual corridors, or general forest

areas to be defined as extraordinary circumstances. They recommended

that the presence of an assumed extraordinary circumstance should not

in itself preclude continuation of the use, or create a presumption of

inconsistency with the Forest plan, until analysis proves the

circumstance to be truly extraordinary and continued recreation

residence use a threat to the environment. One respondent suggested

that extraordinary circumstances be limited to those which are new and

did not exist in the period shortly before the time when a decision on

continuance is to be made, and that the presence of endangered species,

for example, in the area of recreation residences should not

automatically trigger the preparation of an environmental analysis or

impact statement.

The direction in FSH 2709.11, section 41.23a, providing procedural

direction on continuing the use and issuing a new permit, brought forth

comments cautioning against ``useless and unnecessary EA or EIS

studies.'' These respondents suggested that extraordinary circumstances

should not automatically require preparation of environmental analyses.

Other respondents suggested that the entire section 41.23a be removed

since the guidance prejudges, skews and appears to bias the process.

Response. The Forest Service agrees the proposed policy and

procedures applicable when recreation residence use is consistent with

the Forest plan is unnecessarily complex. It also agrees that

situations under which extraordinary circumstances would apply to

permit continuation are too broad and need refinement. When use is

consistent, the policy should provide an expedited process resulting in

a new permit. The Forest plan is the means by which environmentally

sensitive areas are identified and managed. The presence of

extraordinary circumstances should not force additional environmental

documentation unless it is clearly established that a material adverse

environmental effect could result by continuing the use.

Accordingly, the agency has substantially revised the proposed

policy at FSM 2721.23e, paragraph 2, and FSH 2709.11, section 41.23a.

This revision recognizes the public comments and the final revised NEPA

policy and procedures adopted by the agency in 1992. The NEPA policy

substantially clarified previous policy for excluding actions from

environmental documentation. Further, the agency has chosen to minimize

its direction on environmental documentation in the final policy and

guidance and instead refers to the NEPA policy found in FSH 1909.15.

Briefly, recreation residence uses that are consistent with the

Forest plan will, upon expiration of the current term permit, be issued

a new term permit. The environmental documentation supporting the

Forest plan will, in most cases, be sufficient for documenting the

decision to continue the recreation residence use.

When issuing new permits, a record of decision or decision notice

and finding of no significant impact would be prepared only if the

recreation residence use was not specifically approved in the Forest

plan decision document. Issuance of a new permit is an implementation

action of a Forest plan decision approving recreation residence use.

The NEPA compliance requirement is fulfilled by the Forest plan

environmental impact statement. Recreation residence use which has

changed since being found consistent with the Forest plan would require

further NEPA analysis and documentation. In most cases this analysis

would cause the action to fall within a category of actions excluded

from NEPA documentation.

An exception to the above may occur if the environmental

documentation supporting the decision to continue the recreation

residence use is more than 5 years old at the time of permit

expiration. This requirement is set forth in the agency's Environmental

Policy and Procedures Handbook (FSH 1909.15, sec. 18.03) and is based

on the Council on Environmental Quality's ``Forty Questions'' document.

The action necessary to issue the new term permit would commence

two years before permit expiration and the holder notified of the

action. New permits that continue the use would contain updated clauses

that reflect current Department of Agriculture regulations and other

Federal, State, or county laws applicable to the area covered by the

permit.

Therefore, the agency is adopting final policy as described above.

This is set forth at FSM 2721.23e, paragraph 1.

c. Use Not Consistent With the Forest Plan--Project Analysis. The

proposed policy at FSM 2721,23e, paragraph 2b, provided direction on

action to be taken when the recreation residence use was not consistent

with the Forest plan. Procedural guidance at FSH 41.23b described the

procedure to follow in conducting a project analysis. The recreation

residence use would be inconsistent when the lands currently authorized

for recreation residence use are allocated to other public uses by the

Forest plan. Continued recreation residence use would thus be

inconsistent with new management prescriptions, standards and

guidelines. This could occur when a Forest plan defines a management

area of the National Forest for developed recreation use and an

amendment to the plan changes this to threatened or endangered species

habitat. The recreation residence use would then apparently be

inconsistent with the new management area designation. In this case, a

``project analysis'' would be prepared to determine whether the use

could be accommodated along with the alternative public use, or must be

removed upon permit expiration.

The project analysis would identify a range of public uses

consistent with the Forest plan direction, including consideration of

continuing the recreation residence use, that would be compatible with

the management area designation. If this analysis indicates the

recreation residence use could continue, a decision would be made to

issue a new permit upon expiration of the current permit. Since

continuation of the use had been determined to be inconsistent with the

Forest plan, the plan would have to be amended to accommodate the

changed determination. If the analysis indicates that the use cannot

continue, the holder would be notified that a new permit will not be

issued upon expiration of the current permit. In this event, the holder

would receive at least 10 years of continued occupancy from the date of

notification and may be offered an alternative location, or in-lieu

lot, for the use.

Comment: There were 998 comments received on this provision of the

proposed policy. Many respondents were concerned that use of the Forest

plan to determine whether the recreation residence use should continue

was inappropriate because the plan could never focus on the specific

and different issues that a proper analysis of the use demands. Others

felt that in reality the decision on recreation residences would be

made in the plan and that the project analysis would only serve to

verify that decision. They felt that the phrase in the provision

``implement the new direction'' implied that a decision had already

been made. They recommended this provision be eliminated since it

assumes an inconsistency prior to a finding. Instead, they recommended

that new management direction be ``reviewed'' to emphasize that the

project analysis was not a sham.

Nearly all of the respondents commenting on this provision of the

proposed policy stated that the proper sequence of planning should have

the project analysis prepared before the Forest plan is amended or

revised and be the basis for the amendment or revision. This concern is

the basis for respondents' recommendation that a determination of

inconsistency be made only on the basis of a self-contained, site

specific project analysis that follows all environmental analysis

requirements. Respondents also expressed misgivings that the process

called for in the provision conveyed a bias against the use.

These concerns can be summarized by the comment of one respondent:

``The 1988 policy required a specific environmental analysis for any

decisions pertaining to `inconsistency' with the Forest plan. In the

draft policy inconsistency is now decided within the Forest plan

WITHOUT ANY EFFECTIVE RULES. This is just not reasonable and is

unfair.''

Several respondents expressed concern that recreation residence

permit holders would not be involved in the actions leading to adoption

of Forest plan amendments, or that their participation would not be

sought until the basic decisions on land use had been made. They asked

that permit holders be a part of the entire process.

Comments on the procedural guidance in FSH 41.23b for completing

project analyses focused on the addition of or emphasis on the factors

and considerations to be included in the analysis. Several suggested

recognition of environmental, economic and social costs of removing the

recreation residences. Others recommended that cost/benefit analysis of

removal be included in the analysis. Several respondents suggested that

the standards and guidelines for the project analysis were

substantially weaker in the proposed policy than those in the 1988

policy and recommended that the earlier language be restored so that

there was consistency between all National Forests. Many suggestions

were received that could be used to edit and clarify the proposed

guidance in FSH 41.23b.

Response: The respondents to this section of the proposed policy

did so under a distinct disadvantage. The proposed policy describing

Forest planning, NEPA analysis, and public involvement processes

affecting the recreation residence use was based on more complete,

overall guidance set forth elsewhere in the Manual and Handbooks. The

proposed direction for this specific use, therefore, was supplemental

to that overall guidance. Respondents were not aware of or did not have

access to this overall guidance. They sought to resolve their concerns

or objections by recommending more complete descriptions of the

processes or clarification of procedures relating to recreation

residence continuance. Thus, many of the comments summarized above

could be responded to by simply stating that the concern is thoroughly

treated elsewhere in FSM or FSH.

The agency is sympathetic to the respondents' dilemma. However, it

disputes the contention that actions affecting recreation residences

during forest planning occur without any effective rules to guide them.

The rules (direction) are clear and thorough. The agency's dilemma is

that its directives policy prohibits repetition and redundancy in

manual and handbook material for the sake of emphasis or clarity.

Direction guiding the forest planning process is found in FSM 1920.

To resolve this dilemma, the agency has placed references at

appropriate places in the final policy so that local agency officials

and holders are aware of overall direction that influences the specific

direction on recreation residence use. And, the agency believes that

respondents' concerns about forest planning, consistency

determinations, and applicability of NEPA, will be resolved as holders

become more knowledgeable about the forest planning and environmental

analysis processes. Most respondents acknowledged that the recreation

residence use should be recognized in the Forest plan. Likewise,

holders should recognize that it is in their interest to be involved in

the forest planning process, not only to protect their interests in

their recreation residences, but to demonstrate that they are part of

the National Forest community and interested in its overall management.

The Forest Service believes this final policy will encourage holder

participation in the forest planning process.

Agency policy on forest planning and NEPA evaluation does not allow

a decision to remove recreation residences to be made by the Forest

plan. The process for implementing a Forest plan, explained in FSH

1902.12, requires that any use that appears to be inconsistent with new

management direction must be analyzed and evaluated before any decision

is made to discontinue that use. In section 2721.23e, paragraph 1b, of

the final policy, the agency has clarified this point by revising the

heading to read ``Use Apparently Not Consistent With the Forest Plan.''

This revision is intended to reinforce the point that an inconsistency

determination does not result in removal of the use, only that such

action is possible. A decision on removal of the use cannot be made

until a project analysis is completed.

Project analysis should not precede forest planning. The overall

direction contained in a Forest plan is the foundation upon which all

land and resource activities of the National Forest are based. The

Forest plan promotes more integrated consideration of all land and

resource management activities. The direction in the proposed policy

providing for project analysis following implementation of the Forest

plan and identification of apparent inconsistency remains unchanged in

the final policy.

Respondents' concerns that permit holders would not be involved in

Forest planning is unfounded. Overall direction in FSM 1950, FSH

1909.15, and 36 CFR Part 216 requires local Forest Service officials to

seek the views of the public, including holders of authorizations to

use National Forest land. Further, the direction in the proposed policy

at FSM 2721.23h and FSH 2709.11, section 41.23b, paragraph 1 would

require local officials to involve permit holders in activities

involving Forest plan amendments and revisions, implementation of

plans, and project analyses. The agency believes this direction is

adequate to ensure holders' awareness of any action affecting their

use. Thus, the proposed policy in this regard remains unchanged in the

final policy.

The guidance in section 41.23b has been selectively revised to

recognize the suggestions of several respondents. The first sentence of

the section has been rewritten to reflect that Forest plan amendment or

revision does not necessarily make the recreation residence use

inconsistent with new management direction. Rather, it reflects that

continued use under the new management direction is uncertain and a

site specific project analysis is required to verify the inconsistency.

Paragraph 2 of this section of the proposed policy, titled ``Analysis

Documentation'' and describing the content of the project analysis

report and NEPA documentation, is revised in the final policy to

require information on applicable resource conditions to be included in

the report. Paragraph 3a(4), requiring a comparison of benefits and

disadvantages of the proposed alternative public use and the recreation

residence use, has been revised in the final policy to include

consideration of the cost of removing the recreation residence.

Paragraph 4 of FSH 41.23b of the proposed policy, describing the

project analysis decision and documentation, has been extensively

revised to clarify the process by which a decision is reached. Three

possible decisions are outlined: (1) If the project analysis results in

a decision to amend the Forest plan such that continued use will not be

inconsistent with the proposed alternative use, a new term permit would

be issued upon permit expiration; (2) if the project analysis results

in a decision to amend the Forest plan such that the recreation

residence use is in some degree inconsistent with the proposed

alternative use but does not conflict with it, or the proposed

alternative use can accommodate some or all of the recreation residence

use, appropriate modifications would be made to the current permit and

new term permits for the applicable lots would be issued; or (3) if the

project analysis results in a decision that the recreation residence

use remains inconsistent with the Forest plan and cannot be

accommodated with the proposed alternative use, a decision would be

made that the recreation residences are to be removed. This revision

adds a third possibility to the project analysis decision where the use

is in apparent conflict but can be accommodated with the proposed use.

Paragraph 5 of FSH 41.23b, titled ``Decision Notification,''

presents the requirements to be followed in notifying holders and other

interested parties of the project analysis decision. Two items are

added to those listed in the proposed policy: (1) Notification of

whether in-lieu lots will or will not be made available, and (2)

notification that annual fees will be adjusted during the final 10

years of use. The remainder of the paragraph has been edited for

clarity.

d. Project Analysis Decision Review. The proposed policy at

2721.23e, paragraph 2c required the authorized officer to review a

project analysis decision two years prior to permit expiration, if that

decision was more than five years old. Handbook guidance at 41.23b,

paragraph 6, described the procedure by which the project decision

would be reviewed. The review would determine if changes in resource

conditions required reconsideration of the decision. Holders and

interested publics would be notified of the review. If the review

indicated no change in resource conditions, the original decision would

be implemented. If conditions had changed, a new project analysis would

be made to determine use of the lot. A project analysis decision review

would not be appealable.

Comment. Few respondents commented on this provision although a

similar provision at FSM 2721.23a, paragraph 11, raised a concern among

several respondents that the holder would not have an opportunity to be

heard in this review.

Response. The project analysis decision review is intended to

ensure that the actions which resulted in the decision remain

applicable when the permit is about to expire since 8 to 10 years would

have elapsed since the decision was made. This could prevent removal of

a recreation residence when there is no longer a need for the

alternative public use. The agency intends that the review be

undertaken with the full knowledge and participation of the holder. It

emphasizes that the direction in 2721.23e makes it clear that holder

involvement in the review is required. The proposed policy is

considered to be fully adequate and is adopted as final policy.

e. Permit Decision Process (Diagram). The proposed policy, in

Exhibit 01, section 41.23c, presented in diagrammatic form the process

described in section 41.23a and b by which a decision is reached to

continue the recreation residence use or convert the use to an

alternative public use.

Comment: Eight respondents identified problems with the chart. They

pointed out that the process shown when a project analysis decision

allows the recreation residence use to continue (even though it had

been found to be inconsistent with the Forest plan), does not agree

with the text describing that process. The respondents suggested that

when the use is allowed to continue it should not be subject to further

review and analysis. Instead, the use should be considered as

consistent with the Forest plan and the decision process should move

directly to issuance of a new permit. In terms of the diagram, the

arrow from this box should move left to the line showing consistency

with the Forest plan instead of downward to the box showing decision

review.

Response: The Forest Service agrees with these respondents and has

revised the diagram accordingly. Readers should recognize, however,

that revisions in the direction and procedural guidance for continuance

and removal of the use, discussed earlier in this notice, have also

required revisions to the chart. The diagram appears in the final

policy as section 41.23c.

4. Permit Issuance and Term. The proposed policy at FSM 2347.1,

paragraph 3, and at FSM 2721.23a, paragraph 9, stated that permits for

recreation residence use would be issued for a maximum of 20 years.

Paragraph 10 of FSM 2721.23a provided direction for permit issuance

following a decision to convert the lot to an alternative public use.

In this event, the current term permit would be allowed to expire and a

new term permit issued for up to 10 years to satisfy any additional

time because of the 10-year notification requirement.

Comment: There were 224 responses to these permit issuance and term

provisions. Most respondents supported the 20-year term for recreation

residence use, and the 10-year notification in case of conversion to an

alternative public use. A few respondents preferred 30-year permits.

Others objected to the 10-year notification with continued occupancy

provision and the granting of additional time beyond the originally

authorized term to satisfy notification requirements, stating that the

holder accepted the original term and provisions, and should not

receive these favorable considerations.

Response: The Term Permit Act of March 4, 1915, authorizes terms up

to 30 years. The Forest Service's long-standing policy has been to

issue permits for 20-year terms, and if the use is to be terminated,

the additional 10 years granted will keep the total length of the

permit within the statutory limit. Also, specifying a maximum term of

20 years provides local agency officials flexibility in establishing

length of terms to accommodate local needs. For example, if the

official wished to have all permits on an administrative unit expire in

the same year for efficiency in administration, a term of 18 years may

be needed to match terms of permits issued earlier. The agency does not

agree to elimination of the 10-year notification requirement or the

provision providing additional occupancy when the use is to be removed.

The investment in the recreation residence and the length most have

been in existence make the agency's policy on notification and tenure

fair and equitable. Readers are reminded that the agency does not pay a

permittee for the value of the improvements when a permit expires under

its own terms and must be removed. The agency is satisfied that a 20-

year term for recreation residence term permits is appropriate and will

adopt this provision in the final policy. However, to clarify that

shorter terms may be dictated because of permit expiration and

conversion of the lot to another public purpose, the provision is

modified to reflect this exception to the 20-year term. This direction

ensures compliance with the Assistant Secretary's appeal decision

concerning indefinite tenure. This revised policy is also consistent

with the final policy provisions requiring that decisions on

continuance or removal of the use be based on the direction in the

individual National Forest plan.

5. Annual Fees in Event of Nonrenewal. The proposed policy at FSH

2709.11, section 33.2, responded to the appeal decision's direction to

reconsider the 1988 policy's direction for determining fees when a

holder is placed on notice that a new permit will not be issued; that

is, when the permit is placed on tenure. Three provisions in this

section were examined in the proposed policy. The opening paragraph of

this section stated that fees would be reduced 10 percent yearly during

the 10-year notification period. This maintained the provision in the

1988 policy. The second provision (numbered paragraph 1) provided that

in the event the decision to remove the recreation residence was

reversed and the holder was given a new 20-year term permit, the Forest

Service would recover all fees foregone while the permit was under

notice it would not be renewed. This changed the provision in the 1988

policy which provided that 50 percent of the fees would be recovered.

The third provision (numbered paragraph 2) provided that in the event

of a reversed decision and a new permit was issued with a term of less

than 10 years, fees foregone would not be recovered, but the fee would

be reduced by 10 percent for each year the permit was under tenure

notice (for example, fees for a 6-year tenure would be 60 percent of

the full fee). This maintained the policy set forth in the 1988 policy

provision.

Comment: There were 84 comments on these provisions of the proposed

policy. Most respondents asked that the 50 percent fee recovery

provision of the 1988 policy be reinstituted. They stated that the

market value of the use is reduced when permits are placed on tenure,

and, as the agency is required by law to charge fees based on fair

market value, the 50 percent recovery is more than fair because the

recovery amount should be zero. Others pointed out that the Forest

Service's explanation that no precedent could be found in the private

market providing for 50 percent recovery and therefore requiring full

repayment of foregone fees was true because the private market would

not recover foregone fees. On the other hand, several respondents asked

why a holder should be entitled to reduced fees since it is not common

practice in the private real estate market for a lessor to reduce

rental fees when not renewing a lease, especially when the improvements

must be removed by the lessee. One respondent asked whether fees for

permits under tenure were subject to the same annual index adjustment

as permits not under tenure.

Response: The agency decision in the 1988 policy to reduce fees

when permits are placed on tenure was based on its understanding of

common practice in the private real estate market. Reexamination of

this question in view of the appeal decision does not provide

information to contradict this earlier decision. The agency is not

persuaded by respondents' statements contradicting its understanding of

the private market. Therefore, the provision to reduce fees 10 percent

for each year the permit is under tenure will be maintained in the

final policy. (Section 33.2)

The agency based its decision to recover all fees foregone when a

new 20-year permit is given for a use formerly under tenure because it

could not confirm this was a common practice in the private real estate

market. It also received legal advice that it had no authority to

forgive fees foregone in this instance. Upon reexamination of this

issue for preparation of this final policy, it again was not able to

confirm that not recovering fees foregone is standard practice in the

private market. Thus, the agency will keep this provision in the final

policy. (Section 33.2, paragraph 1)

The agency is also maintaining the provision from the proposed

policy that when holders with permits on tenure are given new permits

with terms of 10 years or less past fees foregone are not recovered and

fees for the new term are reduced 10 percent a year. Holders who

receive an additional period of use but do not get a full 20-year term

permit do not have the full value of the use and thus should not pay a

full fee. This provision is adopted consistent with the provision to

reduce fees when permits are placed on tenure. The second sentence of

this provision has been edited to clarify its intent. (Section 33.2,

paragraph 2)

Readers should note that the third paragraph in this section,

describing action to be taken when holders with permits on tenure are

given new permits with terms of 10 to 20 years, was not revised in the

proposed policy and remains identical to the language in the 1988

policy. In this case, fees are to be recovered in full.

6. Offering of In-Lieu Lots. The appeal decision faulted language

in the 1988 policy that made the offering of in-lieu lots mandatory to

holders who have received notification that a new permit would not be

issued or whose permits have been terminated. (FSM 2347.1,6; FSM

2721,23a,13; FSM 2721.23f; FSH 41.23c.)

As explained in the 1991 notice of proposed policy, the intent of

the 1988 policy was to make the offering of in-lieu lots discretionary.

It was use of the word ``shall'' in one sentence of the policy that

conveyed the impression that offering of in-lieu lots was mandatory. In

addition, however, the appeal decision expressed concern that making

in-lieu lots available to holders receiving notice that their use was

to be terminated or that they would not receive a new permit limited

agency management discretion in determining use of National Forest

land. Therefore, each of the four provisions in the 1988 policy dealing

with the offering of in-lieu lots was examined. As a result, the 4

provisions dealing with in-lieu lots were revised in the proposed

policy.

The overall policy on offering in-lieu lots to holders who had been

notified that a new permit would not be issued or whose permit was

being terminated prior to expiration (except when the termination is

for noncompliance) was stated at FSM 2347.1, paragraph 6, of the

proposed policy. This provision directed agency officials to determine

the availability of in-lieu lots for eligible holders. It described

sites available for in-lieu lot purposes as those in nonconflicting

locations in established recreation residence tracts within the

National Forest containing the recreation residences to be removed or

in established tracts in adjacent National Forests. Lots appropriate

for in-lieu purposes were undeveloped lots within or adjoining

established recreation tracts not needed for other public purposes and

lots formerly occupied and now vacant. This provision also directed

that new recreation residence tracts could not be established for in-

lieu lot purposes. This reversed the 1988 policy which stated new

recreation residence tracts could be established for this purpose.

Direction in FSM 2721.23a of the proposed policy, provided that in-

lieu lots could be offered when a recreation residence was destroyed or

substantially damaged by flood, avalanche, or massive earth movement

and the holder was not allowed to rebuild. The 1988 policy stated that

every reasonable effort should be made to offer in-lieu lots in this

event.

The proposed policy in FSM 2721.23f, presented direction in cases

of nonrenewal of permits and conversion of lots to alternative public

purpose. It stated the lots may be offered if available and not needed

for alternative public purposes. The 1988 policy provided that every

reasonable effort should be made to offer the lots.

The guidance in FSH 41.23c of the proposed policy, gave detailed

procedures on the offering of in-lieu lots. The offer would be made

when notice was given that a new permit would not be issued. If a lot

became available within 12 months of the notification it could be

offered then. Priority was to be given to lots in the same recreation

residence tract or an expansion of that tract. Holders would be allowed

90 days to accept the offer of an in-lieu lot and upon acceptance the

lot would be reserved for that holder and a new permit issued. A fee

would not be charged until construction of the improvements began. The

lot reservation would expire if the holder failed to occupy the in-lieu

lot on agreed upon schedule. Holders accepting offers could continue to

use the current lot until the permit expired, but they should be

prepared to move to the new lot 24 months prior to permit expiration.

If accepted by the previous owner, the offer of an in-lieu lot would be

extended to a new owner.

The proposed Handbook guidance differed in several respects from

the 1988 policy. The proposed guidance limited availability of lots to

those becoming available to 12 months. Tracts could not be established

specifically for in-lieu lot purposes. Holders were to be given a new

permit when the offer of an in-lieu lot was accepted, a new

requirement. Fees were to be charged when construction began rather

than when improvement of the lot began, a clarification. Holders were

to be prepared to move within 24 months of permit expiration rather

than when the current use was removed, also a clarification.

Comment. There were 359 responses to the in-lieu lot provisions of

the proposed policy. Several respondents felt that the Assistant

Secretary's appeal decision required only that the 1988 policy be

changed to assure that the offering of in-lieu lots was not mandatory.

Respondents overwhelmingly objected to the changes made by the proposed

policy from the 1988 policy. Summarized, the respondents felt that the

number of sites available for in-lieu lots available should be as large

as possible and should include authority to establish new tracts for

this purpose. The general belief was that a weak in-lieu lot program,

when coupled with a policy of no new tracts for this purpose, would,

through attrition, eventually lead to removal of all or most recreation

residences. A much smaller number of respondents maintained that the

offering of in-lieu lots should be discretionary and that no new tracts

should be established for this purpose.

Respondents also objected to the removal of the phrase ``every

reasonable effort'' when directing local officials to provide in-lieu

lots to terminated or nonrenewal permits. They felt that this subtle

change in wording reversed long-standing Forest Service policy to offer

in-lieu lots in nonconflicting locations. They recommended that the

proposed policy be strengthened or the language of the 1988 policy be

restored.

Another group of respondents felt that the proposed policy ignored

the Assistant Secretary's appeal decision. They felt that any lots

available for in-lieu lots should be made available instead to the

general public for recreation residences. Their view was that the

holder whose permit expires and is notified that a new permit will not

be issued acquires no more rights to available lots than any other

member of the public and should not receive any preferential treatment.

Generally, this group of respondents felt the entire policy of offering

of in-lieu lots should be deleted but if retained should be limited

strictly to lots available within existing recreation residence tracts.

Responses to the proposed policy provision on in-lieu lot

availability following destruction of the improvements by catastrophic

event (FSM 2721.23a, paragraph 13) reflected a similar division of

views as was found in the overall policy. Some felt allowing a holder

to rebuild the improvements or to receive an in-lieu lot extends the

use indefinitely and is contrary to the appeal decision. Others felt

the proposed policy was not clear with regard to when rebuilding the

improvements would be ``consistent'' with Forest plan. Several

suggestions were made to clarify this provision. Many respondents

commented on the inclusion of fire in the list of catastrophic events

to which this provision applies. This had been suggested in the

September 1989 Advance Notice of Proposed Policy. Respondents

overwhelmingly opposed the listing of fire in this provision. They felt

the risk of loss of the recreation residence from fire is inherent in a

forest setting and thus should not be cause for permit termination.

Respondents commenting on the proposed Handbook direction at FSH

41.23c pointed out what they believed was more restrictive language

than in the 1988 policy. Specifically, they cited the 12 month limit on

offering an in-lieu lot, the 90-day limit on holders acceptance of the

lot offer, and the requirement that occupancy of the in-lieu lot begins

when construction begins.

Response. The Forest Service does not agree that the reformulation

of the in-lieu lot provisions of the 1988 recreation residence policy

should be limited to the question of whether the offer is mandatory or

discretionary. The appeal decision questioned the policy on offering of

in-lieu lots and directed that all provisions of the policy dealing

with this issue be stayed from implementation and reconsidered. The

agency, in its September 1991 proposed policy, modified it to respond

to the appeal decision's concern that the use was being perpetuated

when in-lieu lots were offered.

Under policy stated at FSM 2347.1, the agency affirms that

recreation residences are a valid use of National Forest System lands

and an important component of the overall National Forest recreation

program. It also acknowledges that there may be circumstances, albeit

very limited, where this use is not consistent with the overall

management direction for the land and the recreation residence use must

be converted to an alternative public use. When these circumstances

occur, however, the agency believes that holders of these uses should

not be subjected to the loss of the use if reasonable options are

available to accommodate the use elsewhere. Thus, it is maintaining its

long-established in-lieu lot provisions in the final policy.

The agency does recognize that certain provisions in the proposed

policy limited the scope of the 1988 policy and has reconsidered

several provisions. In FSM 2347.1, paragraph 6, the first sentence is

revised to read ``Although provision of an in-lieu lot is not required,

make a reasonable effort to provide a lot to holders whose lots will be

converted to an alternative public use and have received notification

that new permits for those lots will not be issued, or who have

received termination notices (except termination for noncompliance)

(FSM 2721.23e).''

The agency is maintaining the provision in the proposed policy that

prohibited establishment of new tracts for in-lieu lot purposes.

However, the agency points out that it is possible under the revised

second sentence of this provision to expand a recreation residence

tract in order to relocate the use to accommodate a change in land use.

Such could happen when a river is designated as a Wild and Scenic River

and recreation residences located a few feet from the riverbank are

moved several hundred feet back from the river to accommodate public

use along the riverbank. The third sentence of this provision is

clarified to identify locations suitable for in-lieu lots to include

undeveloped lands, and formerly developed and withdrawn recreation

residence lots in or adjacent to established recreation residence

tracts.

The proposed policy at FSM 2721.23a, paragraph 13, describing

action to be taken when a recreation residence is destroyed or

substantially damaged by catastrophic event, is revised to clarify when

improvements could be rebuilt or the permit terminated and in-lieu lot

available.

The proposed policy at FSM 2721.23f affirmed the overall in-lieu

lot policy stated at FSM 2347.1, paragraph 6, in connection with the

policy on continuation of recreation residence use. The language in

this provision has been revised to be consistent with the overall

policy.

The language at FSH 2709.11, section 41.23c of the proposed policy

provides the procedural guidance for implementing the overall policy on

offering in-lieu lots. Paragraph one of this section limited the

availability of lots for in-lieu lot purposes to 12 months following

notification of the holder that a new permit would not be offered. The

agency finds that this limitation is inconsistent with the policy

requiring a 10-year notification to the holder. Lots which come

available during that 10-year period should be available as in-lieu

lots if not otherwise needed for other public purposes. Thus, the

agency has restored the language of the 1988 policy as follows: ``If

lots do not become available until later, offer them then.'' Paragraph

3 allowed the holder 90 days from the date of a joint inspection to

accept the offer of an in-lieu lot. This has been clarified to require

both actions--arranging a joint inspection and providing 90 days to

decide. The paragraph is also clarified to require the 90 day period to

occur while access to the lot is possible. Paragraph 4 required that a

new permit be issued when a holder accepts the offer of an in-lieu lot.

The agency recognizes that his means the holder will have two permits

for recreation residence use for a limited period of time. However,

this provision has been kept in the final policy to be consistent with

overall special use regulations which require all users of National

Forest land to have a permit.

The agency recognizes that a holder may pay annual fees on both

permits if the current use is kept while the use on the in-lieu lot is

being constructed. Thus, it has inserted guidance that a partial fee

waiver under existing agency policy may be appropriate on the in-lieu

lot.

Readers are also advised that for consistency in terminology, the

word ``lot'' replaces the word ``site'' throughout the policy when

referring to in-lieu locations.

7. Termination During Term of Permit. Three provisions of the

proposed policy discussed actions to be taken when a recreation

residence permit had to be terminated before its term expired. The

overall policy at FSM 2347.1 listed four reasons for terminating a

permit: (1) When it is in the public interest; (2) when there is an

uncorrected breach of a permit provision; (3) when the site has been

rendered unsafe by catastrophic events; and (4) when there is other

cause as provided in 36 CFR 251.60. In adding this language, the

proposed policy removed a provision of the 1988 policy that required

termination actions to follow the same procedures established for

permit continuation or nonrenewal. Termination actions would follow

procedures for the four listed events, rather than for those procedures

for continuance or nonrenewal as the 1988 policy provided.

Direction at FSM 2721.23a, paragraph 16, of the proposed policy

reflected revisions to the overall policy, stating termination could

occur only in accordance with applicable regulations and the terms and

conditions of the permit. It also required the authorized officer

(Forest Supervisor) to submit a proposed termination for review by the

next higher official (Regional Forester). This review would only

examine the adequacy of the analysis and documentation. If deficient,

the proposed action would be returned to the authorized officer for

correction and reconsideration. This provision also proposed use of the

term ``monies'' in place of ``appropriations'' as used in the 1988

policy to describe the requirement that the Government must pay for the

holders improvements if terminating a permit before expiration of its

term, except when termination is the result of breach of the permit's

provisions.

The proposed policy at FSM 2721.23i gave direction only for

termination actions resulting from noncompliance of the terms and

provisions of the permit. It required written notice to the holder and

a reasonable period to correct the violation. The action could be taken

only if noncompliance continues after the holder receives notice and

the period allowed for correction. This provision was nearly identical

to the 1988 policy.

Comment. There were 5 responses to these provisions of the proposed

policy. Respondents felt the phrase ``in the public interest'' was

vague and apparently confused the phrase with direction elsewhere in

the proposed policy dealing with permit expiration and alternative

public use. They felt that termination should occur only when covered

by the Forest plan and other alternatives to removal of the use

considered. Most of the respondents agreed that termination during the

permit term should occur only when funds are available to purchase the

improvements. They agreed that the word ``monies'' is preferable to the

word ``appropriations.'' One respondent, however, felt that payment for

the holder's improvements should be based on the cost of the

improvements less depreciation.

Commenting on the direction in FSM 2721.23a, paragraph 16, one

respondent suggested that ``applicable regulations'' should be

specified. Most of the respondents agreed that proposed termination

actions by the Forest Supervisor should be reviewed by the Regional

Forester but suggested that the standards for analysis and

documentation for the proposed termination should be made clear.

Response. Readers are reminded that the agency, in seeking

consistency in policy terminology, has substituted the word revocation

for the word termination when describing actions that end a permit

before the end of the term specified in the permit. Further, the word

termination is used to describe the cessation of a permit as a result

of a fixed or agreed-upon event, which would include reaching the end

of the term specified in the permit. With this in mind, readers are

advised that revocation of the permit during its term and termination

of the permit are two separate and distinct actions, each unrelated to

the other. Revocation of the permit occurs when one of the four actions

listed in FSM 2347.1, paragraph 5, is triggered. Revocation of the

permit when in the public interest is not an action resulting from

direction in the Forest plan. Rather, it results from an urgent and

pressing need to reclaim the land for another public use before the

action can be considered through the Forest planning process and the

procedure for considering alternative public uses can be implemented.

For example, the construction or relocation of a public highway may

require removal of the recreation residence because the only feasible

right-of-way is on land occupied by this use. Authority to revoke a

permitted use before the permit term is completed is found at 36 CFR

251.60. This citation is added to this provision in the final policy.

It is the need to reclaim the land before completion of the permit term

that requires the Government to pay for the improvements that must be

removed.

The Forest Service recognizes that an action to revoke a permit

before completion of the term must be done under a procedure that

ensures fairness and equity to the holder. It has revised paragraph 5

in the final policy to clarify that revocation would occur only when

there is an urgent need to use the lot and the forest planning process

cannot be used.

The agency also recognizes the concern of respondents that

revocation actions be reviewed by a higher agency official. However, it

must point out that to maintain the integrity of its current appeal

regulations it cannot permit the higher level official to review a

decision before it is made. When a Forest Supervisor's decision is

appealed, the Regional Forester is the reviewing officer. The language

in the proposed policy on review of revocation actions will be

maintained in the final policy.

The agency believes that use of the word ``monies'' is appropriate

and will retain the term in the final policy. The agency does not agree

that payment for the improvements be based on the holders cost less

depreciation and will retain the method set forth in the term permit.

Readers are advised that the procedure for revoking a permit when

in the public interest and when the holder is found to be in

noncompliance with the permit terms is set forth in part VIII of the

term permit.

Revised Special Use Permit for Recreation Residences

The Assistant Secretary's appeal decision voided certain clauses of

the term special use permit used to authorize recreation residences on

National Forest System lands and adopted with the 1988 policy. Holders

who had been offered and accepted these permits in 1988 were notified

by letter that the clauses were voided and temporarily removed from the

permit and would be replaced upon adoption by the agency of a final

reformulated policy. The voided permit provisions were: Part VI.C.2,

part IX.B, C, D, and E, and part X.B. The October 10, 1991, notice

displayed the term permit in its entirety with the affected clauses

reformulated to be consistent with the revisions to the proposed

policy.

There were 346 comments received on the proposed permit. Nearly all

of the responses were directed to permit clauses not affected by the

appeal decision. The Federal Register notice explained that only policy

provisions, and permit clauses, affected by the appeal decision were

subject to review and reformulation. Hence, only those comments

directed to permit clauses affected by the adoption of the final policy

were considered in this analysis. These were considered with the

comments made to the corresponding parts of the policy and procedural

guidance.

Permit clauses are derived from basic statutes, regulations, and

policy. Thus, in reformulating the policy for administering recreation

residences, the agency must also revise the permit that is derived from

this policy. Changes made to the policy require corresponding changes

to the permit. This has been done in the adoption of this final policy.

The reformulated permit is printed in its entirety at the conclusion of

this notice (Exhibit 1 to FSH 2709.11, section 54.1). Permit clauses

revised as a result of the reformulation of the recreation residence

policy as described in this notice are printed in italic. Readers are

advised that holders of permits containing voided clauses will be sent

new clauses or new permits upon adoption of this final policy. New

permits will contain the revised clauses but are identical in all other

respects to the permit accepted in 1988.

Revision of Dispute Resolution Provisions

The October 10, 1991, Federal Register notice provided information

on the agency's policy to resolve disputes concerning recreation

residence permit administration (located at FSM 2721.23f in the 1988

policy). It pointed out that revision of the Department of Agriculture

administrative appeal regulations made on January 23, 1989 (54 FR 3342)

created a conflict with the dispute resolution provisions adopted in

the 1988 policy. Revision of these provisions, although not addressed

in the appeal decision, was necessary.

The proposed policy at FSM 2721.23h provided direction to reduce

conflict between holders and the agency by providing holders with the

opportunity to participate in an issue resolution process. Proposed

paragraph 1 of this policy required agency officials to consult with

holders and their representatives, where practicable, before issuing

written decisions on permit administration in order to reach a common

understanding and agreement. Proposed paragraph 2 encouraged holder

involvement in the public involvement process for Forest planning,

project analysis, and the permit issuance analysis process (FSM

2721.23e). This paragraph also encouraged agency officials to meet with

holders and their representatives to discuss and resolve issues prior

to issuing a decision. Proposed paragraph 3 provided guidance on

resolving actions that have been appealed, directing that the

opportunities provided in the appeal regulations (36 CFR parts 217 and

251) be utilized by the authorized officer to resolve the appeal issues

by means other than review and decision on the appeal.

The Forest Service has carefully considered the direction in the

proposed policy in its preparation of this final policy and determined

that it adequately conveys its intent to resolve disputes with holders

on recreation residence permit administration. Therefore, it is

adopting without change the direction in the proposed policy (FSM

2721.23h).

Readers are advised that further revisions to the appeal

regulations occurred on April 13, 1993 (58 FR 19369). That revision

encourages participation in the agency's public involvement processes

by expanding opportunities for pre-decisional involvement of the public

in Forest Service decisionmaking. A new part 215 was added to the

regulations that would give the public opportunity to comment, prior to

issuance of a final decision, on proposed actions that implement

National Forest land and resource management plans. Parts 217 and 251,

subpart C, of the regulations continue in effect. This final recreation

residence policy at FSM 2721.23h was examined in light of the new

appeal regulation and found to be consistent.

Clarification of Other Provisions of the Policy

In the February 15, 1989, appeal decision, the Assistant Secretary

directed the Forest Service to clarify procedures by which annual fees

are determined for recreation residence use. Specifically, the agency

was required to explain its rationale in adopting 3 components of the

fee system: (1) Use of the period 1978-1982 as the base period for

determining current fees, (2) Use of an index, the Implicit Price

Deflator-Gross National Product (IDP-GNP), to adjust fees annually to

current fair market value, and (3) Use of a factor of 5 percent applied

to the appraised value to determine the annual fee.

The Supplementary Information section of the October 10, 1991,

Federal Register notice containing the proposed policy provided

information on these three components of the fee policy. Readers were

advised that the information was to be considered as supplemental, or

background, information to the direction and procedural guidance

appearing in the policy at FSM 2721.23d-Fee Determination and FSH

2709.11, chapter 30, section 33, Recreation Residence Fees. The

information in the notice emphasized that the agency is required to

obtain fair market value for the use of the Federal lands. Fair market

value is determined by appraisal or other sound business management

practice, such as market analysis or competitive bid. Annual fees for

recreation residences are determined by appraisal. A factor of 5

percent is applied to the appraised value to determine the annual fee.

There were 55 responses to this information, which generally

supported the information presented. There was some disagreement with

the use of 5 percent of appraised value to determine the annual fee,

the respondents stating that the factor should be higher. Two

respondents felt the Consumer Price Index (CPI) should be used instead

of the IPD-GNP. Others felt the adjustment, as a national index factor,

failed to recognize depressed local real estate market conditions. As a

result, fees were escalating upward that should have been steady or

declining.

The Forest Service believes that the information presented in the

notice accurately described the rationale used to develop the fee

determination procedure in the 1988 policy, and that the information

reflects current agency direction and policy. Therefore, the agency is

adopting the explanation presented in the notice as its response to the

appeal decision's direction to present the rationale for adopting the

period 1978-1982 as the annual fee base period, the use of the IPD-GNP

as the annual fee adjustment factor, and the use of 5 percent applied

to appraised values to determine annual fees.

Having considered the comments received in response to the October

10, 1991, notice of proposed policy and having reconsidered the 1988

recreation residence policy for consistency with applicable law and

regulation, the Forest Service is adopting a revised recreation

residence policy that it believes is fully responsive to the Assistant

Secretary's appeal decision and to the concerns of holders and other

interested parties. The full text of the recreation residence policy

and procedural guidance containing the revisions described in this

notice as it would appear in the Forest Service Directive System is set

out at the end of this notice.

Readers are advised that the current interim recreation residence

policy will no longer be in effect upon adoption of this revised

policy.

Controlling Paperwork Burdens on the Public

This policy will not result in additional paperwork not already

required by law or not already approved for use. Therefore, the review

provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3507) and

implementing regulations at 5 CFR 1320 do not apply.

Regulatory Impact

This final policy has been reviewed under USDA procedures and

Executive Order 12866 on Regulatory Planning and Review. It has been

determined that this is not a significant rule. This rule will not have

an annual effect of $100 million or more on the economy nor adversely

affect productivity, competition, jobs, the environment, public health

or safety, nor State or local governments. This rule will not interfere

with an action taken or planned by another agency nor raise new legal

or policy issues. Finally, this action will not alter the budgetary

impact of entitlements, grants, user fees, or loan programs or the

rights and obligations of recipients of such programs. Accordingly,

this final policy is not subject to OMB review under Executive Order

12866.

Moreover, this final policy has been considered in light of the

Regulatory Flexibility Act (5 U.S.C. 601 et seq.), and it has been

determined that this action will not have a significant economic impact

on a substantial number of small entities as defined by that Act.

Entities affected by this policy are private individuals holding

authorizations to use National Forest System lands for the purpose of

constructing and maintaining a recreation residence. The requirements

imposed by this final policy are the minimum necessary to protect the

public interest, are not administratively burdensome or costly to meet,

and are well within the capability of small entities to perform.

Environmental Impact

Section 31.1b of Forest Service Handbook 1909.15 (57 FR 43180;

September 18, 1992) excludes from documentation in an environmental

assessment or impact statement ``rules, regulations, or policies to

establish Service-wide administrative procedures, program processes or

instructions.'' Based on consideration of the comments received and the

nature and scope of this final policy, the agency has determined that

this rule falls within this category of actions and that no

extraordinary circumstances exist which would require preparation of an

environmental assessment or environmental impact statement.

Dated: April 4, 1994.

Jack Ward Thomas,

Chief.

Reformulated Recreation Residence Policy and Procedures

Note: The Forest Service organizes its directive system by

alpha-numeric codes and subject headings. Only those sections of the

Forest Service Manual and Handbook that are the subject of this

notice are set out here. The intended audience of this direction is

Forest Service employees charged with issuing and administering

recreation residence use authorizations.

Forest Service Manual

Chapter 2340--Privately Provided Recreation Opportunities

2347--Non-Commercial Recreation Use. Section 2347-2347.12b set

forth direction for special use authorization of privately built and

owned structures on National Forest land. These structures are

maintained for the use and enjoyment of holders and their guests. As

recreation facilities, they are vacation sites and may not be used on a

permanent basis (FSM 2721.23).

2347.03--Policy

1. Management non-commercial recreation use sites in accordance

with basic recreation policy in FSM 2303 as valid and important

components of the overall National Forest recreation program.

2. Continue to authorize those existing facilities now occupying

National Forest land under special use authorization that (a) are

consistent with management direction given in the Forest Land and

Resource Management Plan (FSM 2721.23e), (b) are at locations where the

need for an alternative public purpose has not been established, (c) do

not constitute a material, uncorrectable offsite hazard to National

Forest resources, and (d) do not endanger the health or safety of the

holder or the public.

3. Manage non-commercial recreation use sites in such a way that

the general public is not precluded from full enjoyment of the natural,

scenic, recreational, and other aspects of the National Forests (FSM

2701).

4. Deny applications for construction of new facilities except

where they would replace similar existing facilities.

5. Deny any proposal for commercial activity at permitted, non-

commercial recreation use sites.

6. Require non-commercial recreation use holders to maintain their

sites to protect the natural forest environment. Do not allow

construction or placement of non-authorized facilities on these sites.

2347.1--Recreation Residences. (FSM 2721.23 and FSH 2709.11.)

Recreation residences are a valid use of National Forest System

lands. They are an important component of the overall National Forest

recreation program and have the potential of supporting a large number

of recreation person-days. They may provide special recreation

experiences that might not otherwise be available. It is Forest Service

policy to continue recreation residence use and to work in partnership

with holders of these permits to maximize the recreational benefits of

these residences.

1. Administer recreation residence special use permits to ensure

proper use of the lot for family and guest recreational purposes (FSM

2347.11).

2. Do not approve any new authorizations for full-time residences,

except in special situations to provide caretaker or other similar

services where there is a strongly demonstrated need (FSM 2347.12). Do

not approve in-lieu lots for full-time residential use.

3. Issue recreation residence term permits for a maximum of 20

years in accordance with procedures in FSM 2721.23e and FSH 2709.11,

sec. 41.23.

4. Give holders at least 10 years written advance notice if a new

permit will not be issued following expiration of the existing permit

term (FSM 2721.23a).

5. Revoke a recreation residence permit before expiration of the

term of the permit when (a) it is in the public interest, particularly

when the final decision authority does not rest with the Forest

Service, (b) there is an uncorrected breach of a permit provision(s)

(FSM 2721.23i), (c) the site has been rendered unsafe by catastrophic

events such as flood, avalanche, or massive earth movement, or (d) when

there is other cause as provided in 37 CFR 251.60. Revocation in the

public interest should not be undertaken unless monies are available to

pay for the holder's improvements and there is an urgent need to use

the lot before the action can be considered through the Forest planning

process resulting in a decision to convert to an alternative public

use. When revoking a permit for any cause, give as much advance notice

as possible (FSM 2721.23i).

6. Although provision of an in-lieu lot is not required, make a

reasonable effort to provide a lot to holders whose lots will be

converted to an alternative public use and who have received

notification that new permits for those lots will not be issued or who

have received revocation notices (except revocation for noncompliance)

(FSM 2721.23e). For this purpose, in-lieu lots must be in

nonconflicting locations in or adjacent to established tracts within

the National Forest containing the residences, or in or adjacent to

established tracts on adjacent National Forests. Appropriate lots for

consideration are undeveloped, formerly developed, and withdrawn lots

in or adjacent to established recreation residence tracts and which are

not needed in the foreseeable future for other public uses. Lots that

are vacant because of noncompliance or other factors also may be

considered as in-lieu lots. In-lieu lots should be comparable to the

lots being converted to an alternative public use when possible, but

authorized officials should advise holders that the Agency cannot

guarantee that the available in-lieu lots will be entirely comparable.

Do not establish new recreation residence tracts for in-lieu lot

purposes. Offer in-lieu lots in accordance with the procedures in FSH

2709.11, sec. 41.23c.

2347.11--Preventing Unauthorized Residential Use. Prevent

unauthorized full-time residential use by enforcing the terms of the

special use permit. Continue to administer those recreation residences

presently authorized as a principal place of residence in accordance

with provisions of the special use permit. Upon transfer or sale of

improvements, discontinue the residential use and authorize only

recreation residence use.

2347.12--Caretaker Residences.

2347.12a--Authority. Authorize caretaker use of a recreation

residence with an annual permit, Form 2700-4, under the Act of June 4,

1897. (Require applicants who currently have term permits to exchange

them as a condition of obtaining the caretaker authorization.)

2347.12b--Caretaker Residence Use. The need for a caretaker

residence rarely can be justified where yearlong occupancy is already

authorized in the tract. The Forest Supervisor may authorize a

caretaker residence in limited cases where it is demonstrated that

caretaker services are needed for the security of a recreation

residence tract and alternative security measures are not feasible or

reasonably available. The fees for caretaker residences shall be 25

percent more than those charged for recreation residence use of a

similar lot in the tract. A tract association may own caretaker

residences.

1. Authorize no more than one caretaker residence per recreation

residence tract unless factors such as size and layout of the tract

call for more than one. The affected tract association, or if there is

no association, at least 60 percent of the affected holders, must

document approval of request for a caretaker residence. Require the

applicants for caretaker use to document the caretaker services they

will provide.

2. Do not authorize construction of a new residence for caretaker

services. Issue the annual permit only for an existing residence. The

permit must contain a provision that automatically terminates

authorization for yearlong use in case of change in ownership.

3. Coordinate applications for caretaker residence permits with

local governmental agencies to avoid creating unreasonable demands or

burdens for such services as snow plowing, mail delivery, garbage

pickup, school bus, or emergency services.

4. If a lot ceases to be used as a caretaker residence, issue a new

term permit for recreation residence use to the holder, if qualified,

or to the purchaser of the improvements.

Forest Service Manual

Chapter 2720--Special Uses Administration

2721.23--Recreation Residence. the term ``recreation residence''

includes only those residences that occupy planned, approved tracts or

those groups established for recreation residence use. See FSM 2347 for

basic policy on recreation residence use.

2721.23a--Administration. The following direction relates

specifically to issuance and administration of special use permits for

recreation residences. For recreation residence permits in Alaska,

follow the additional requirements in section 1303(d) of the Alaska

National Interest Lands Conservation Act. Administer recreation

residence permits in accordance with the direction in sections

2721.23a-2721.23i and within the broad policy governing recreation

residences and permitted uses set forth in FSM 2347.1 and 36 CFR

251.50.

1. Issue special use permits for recreation residence use in the

name of one individual or to a husband and wife. Upon issuance of a new

permit that continues the use or amendment, revise authorizations that

are not issued to an individual or to a husband and wife, so that the

responsible person is identified.

2. Issue no more than one recreation residence special use permit

to a single family (husband, wife, and dependent children).

3. Do not issue special use permits for recreation residence use to

entities such as commercial enterprises, nonprofit organizations,

business associations, corporations, partnerships, or other similar

enterprises, except that a tract association may own a caretaker

residence.

4. To the extent possible, issue all recreation residence permits

in a tract, or in logical groups of tracts, with the same expiration

date.

5. To help defray costs and provide additional recreation

opportunities, a holder may obtain permission for incidental rental for

specific periods. Ensure that rental use is solely for recreation

purposes and does not change the character of the area or use to a

commercial nature. Rental arrangements must be in writing and approved

in advance by the authorized officer. The holder must remain

responsible for compliance with the special use authorization.

6. Allow no more than one dwelling per lot to be built. In those

cases where more than one dwelling (residence/sleeping cabin) currently

occupies a single lot, allow the use to continue in accordance with the

authorization. However, correct such deficiencies, if built without

prior approval, upon transfer of ownership outside of the family

(husband, wife and dependent children).

7. When a recreation residence is included in the settlement of an

estate, issue a new special use permit for the remainder of the

original permit term, updated to reflect policy and procedural changes,

to the properly determined heir, if eligible. Prior to estate

settlement, issue an annual renewable permit to the executor or

administrator to identify responsibility for the use pending final

settlement of the estate. When a recreation residence is sold, issue a

new term permit to the buyer for the remainder of the original permit

term, updated to reflect policy and procedural changes, if eligible.

8. Specify in the permit that the recreation residence must be

occupied at least 15 days annually, the minimum acceptable period of

occupancy.

9. Issue recreation residence term permits for a maximum of 20

years, except when the need for a shorter term has been determined by a

project analysis in accordance with FSM 2721.23e and FSH 2709.11,

chapter 40.

10. When a decision is made to convert the lot to an alternative

use (2721.23e), take the following actions:

a. Notify the holder of the reasons and provide a copy of the

decision documentation.

b. Allow at least 10 years of continued occupancy after

notification.

c. Allow the current term permit to expire under its own terms and

if the holder is entitled to additional time to satisfy the 10-year

notification period, issue a new term permit for the remaining period.

Clearly specify any limited tenure by including the following statement

in the permit:

``This permit will expire on (insert date) and a new permit will

not be issued.''

d. Issue term or annual permits for additional periods as needed to

allow continuation of occupancy until conversion to the alternate

public use is ready to begin.

11. Before the Forest Supervisor issues a decision to convert a lot

to an alternative public use, submit the proposed decision, supporting

documentation and summary of public comments, to the Regional Forester

for review for adequacy of the documentation and analysis. If analysis

and documentation are inadequate to support the proposed decision or

there is some other deficiency in the proposed decision, the Regional

Forester shall instruct the Forest Supervisor to remedy the

deficiencies and reconsider the proposed decision prior to making the

final decision.

12. As with any resource allocation made in a Forest plan, the

Forest Supervisor may reconsider a decision to continue or convert

recreation residence lots to an alternative public use at any time new

or changed conditions merit such reconsideration.

13. In the event a recreation residence is destroyed or

substantially damaged by a catastrophic event such as a flood,

avalanche, or massive earth movement, conduct and document an

environmental analysis to determine whether improvements on the lot can

be safely occupied in the future under Federal and State law before

issuing a permit to rebuild or terminating the permit. Normally, an

analysis should be completed within 6 months of such an event.

Allow rebuilding if the lot can be occupied safely and the use

remains consistent with the Forest Land and Resource Management Plan.

If the need for an alternative public use at the same location has been

established prior to the catastrophic event, do not allow rebuilding if

the improvements are more than 50 percent destroyed. If rebuilding is

not authorized, in-lieu lots may be offered as provided by FSM 2347.1,

paragraph 6 and FSH 2709.11, section 41.23c.

14. At the time permits are issued, advise holders that the terms

of the permit require that they notify the Forest Service if they

intend to sell their improvements and that they must provide a copy of

the permit to a prospective purchaser before finalizing a sale.

Whenever possible, the authorized officer should advise a prospective

purchaser of the terms and conditions of the permit before a sale is

final.

15. Do not stay a fee increase pending completion of an appeal of

the fee under the administrative appeal regulations. Make any

adjustments resulting from the administrative review through credit,

refund, or supplemental billing.

16. During the term of a permit, terminate or revoke the use only

in accordance with regulations at 36 CFR 251.60 and the terms and

conditions of the permit (FSM 2347.1, para. 5). Except for revocation

for noncompliance of terms of the permit, the Forest Supervisor shall

submit proposed revocations, with supporting documentation and a

summary of the public comments, to the Regional Forester for review

prior to the Forest Supervisor's issuance of a decision. If analysis

and documentation are inadequate to support the proposed decision or

there is some other deficiency in the proposed decision, the Regional

Forester shall instruct the Forest Supervisor to remedy the

deficiencies and reconsider the proposed revocation prior to making the

final decision.

2721.23b--Applications. Insofar as practicable, notify a new or

prospective owner of the requirement to make application for the

authorization to use existing improvements in accordance with 36 CFR

251.54.

2721.23c--Permit Preparation.

1. Use the Term Special Use Permit for Recreation Residence (Form

FS 2700-5a, FSH 2709.11, ch. 50), to authorize recreation residences,

except as specified in paragraph 2 of this section.

2. Use the Special Use Permit (Form FS-2700-4) when:

a. Conversion of the lot to a alternative public use is authorized,

the conversion will be delayed, and a minimum term of continued use

cannot be predicted.

b. Continuance of the recreation residence use is conditioned on

the owner complying with specific Forest Service requirements before a

term permit is issued.

c. The improvements are managed by a third party pending settlement

of an estate, bankruptcy proceedings, or other legal action.

d. Yearlong occupancy is authorized by the Forest Supervisor, at

which time the improvement ceases to be a recreation residence.

3. In either permit, identify all authorized improvements

associated with recreation residence use. Do not authorize use of more

than the statutory maximum of 5 acres under a term permit. Authorize

community or association-owned improvements, such as water systems, by

a separate special use permit (Form FS-2700-4).

2721.23d--Fee Determination. (FSH 2709.11, ch. 30.).

1. Use fair market value as determined by appraisal in determining

the base annual rental fees for recreation residence lots. Redetermine

the base fee at 20-year intervals.

2. Adjust the fee annually by the annual (second quarter to second

quarter) change in the Implicit Price Deflator-Gross National Product

(IPD-GNP).

3. Use professional appraisal standards in appraising recreation

residence lots for fee determination purposes (FSH 2709.11.)

4. Where practicable, contract with private fee appraisers to

perform the appraisal.

5. Require appraisers to coordinate the assignment closely with

affected holders by seeking advice, cooperation, and information from

the holders and local holder associations.

6. Retain only qualified appraisers. To the extent practicable, use

those appraisers most knowledgeable of market conditions within the

local area.

7. Before accepting any appraisal, conduct a full review of the

appraisal to ensure the instructions have been followed and the

assigned values are supported properly.

Forest Service Handbook 2709.11--Special Uses

Chapter 30--Fee Determination

33--Recreation Residence Fees

33.1--Base Fees and Indexing. Follow these procedures in determining

the base (beginning) fee and subsequent fees under a 20-year cycle.

1. As the initial base, use the fees established in one of the

years between 1978 and 1982. The first year of the fee cycle is the

first year of the established fee (disregarding any phase-in that may

have been provided). Adjust the full base fee forward by applying the

appropriate cumulative Implicit Price Deflator-Gross National Product

(IPD-GNP) adjustment factor shown in exhibit 01. New fees for 1989,

established in this manner, will be phased-in over a 4-year period

(1989-1992) at the rate of one-fourth of the increase each year, except

that fees will not be phased-in for those permits that limit fee

adjustments to 5-year intervals.

In those cases where there may not be a fee established for the

1978-1982 period, Regional Foresters are authorized, subject to

concurrence of the Chief, to utilize a different starting date and to

adjust the length of the fee cycle so that all permits will have a new

base fee determined during the 1998-2002 period.

2. For 1990 through the last year of the fee cycle, adjust the fees

on an annual basis by calculating the percentage change of the IPD-GNP

index (as reported by the Bureau of Economic Analysis, Department of

Commerce, in July of each year) from the second quarter of the previous

year to the second quarter of the current year and applying this

percentage adjustment factor to the current year's fees.

For term permits that restrict adjustments to 5-year intervals,

apply the IPD index adjustments cumulatively at 5-year intervals. At

the end of the current 20-year term, or earlier if agreed to by the

holder, revise permits to provide for annual indexing.

3. Limit the annual fee adjustment for 1990 and thereafter to 10

percent per year when the change in the IPD-GNP index exceeds 10

percent in any one year. The index amount in excess of 10 percent will

be carried over and applied to the fee for the next succeeding year in

which the index factor is less than 10 percent.

4. If a new permit is to be issued (FSM 2721.23a), re-appraise the

lot toward the end of the 20-year cycle. Beginning in the twenty-first

year (the first year of the next fee cycle; 1998 in the case of 1978

fees), put into effect the base fee for the next 20-year cycle by

applying 5 percent to the newly determined appraised market value of

the lot for recreation residence purposes.

5. In those few cases where one or more additional sleeping

structures (guest cabins, and so forth) have been added to a single

lot, add to the current adjusted base fee an additional charge equal to

25 percent of the fee established for a single residence use of the lot

or $100, whichever is greater, per structure.

Exhibit 01, Sec. 33.1--IPD-GNP Adjustment Factor by Year

--------------------------------------------------------------------------------------------------------------------------------------------------------

Cum.

Base fee year 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 adj.

--------------------------------------------------------------------------------------------------------------------------------------------------------

1978........................................ 1.101 1.092 1.095 1.067 1.050 1.032 1.038 1.033 1.026 1.028 1.029 1.771

1979........................................ ....... 1.092 1.095 1.067 1.050 1.032 1.038 1.033 1.026 1.028 1.029 1.609

1980........................................ ....... ....... 1.095 1.067 1.050 1.032 1.038 1.033 1.026 1.028 1.029 1.473

1981........................................ ....... ....... ....... 1.067 1.050 1.032 1.038 1.033 1.026 1.028 1.029 1.346

1982........................................ ....... ....... ....... ....... 1.050 1.032 1.038 1.033 1.026 1.028 1.029 1.261

--------------------------------------------------------------------------------------------------------------------------------------------------------

(Note: Cum. Adj.=Cumulative Adjustment.)

The above factors for fee years 1979-1986 were taken from Table 5,

Price Indexes and the Gross National Product Implicit Price Deflator,

as published in the Survey of Current Business by the Department of

Commerce, Bureau of Economic Analysis, February 1986. These factors

represent an annual rate, based on the percent change from the first

quarter to the second quarter of the indicated year. The 1987 factor of

1.026 is the percentage change in the IPD-GNP index from the second

quarter of 1985 to the second quarter of 1986 as reported in the July

1986 issue of ``United States Department of Commerce News,'' a

publication by the Bureau of Economic Analysis. The IPD-GNP index for

the second quarter of 1985 is 111.1. The 1988 and 1989 factors, were

determined following the same procedures, using the appropriate year's

publication. The factors for 1979-1989 in Exhibit 01 are shown only to

illustrate how the cumulative adjustment factor used to establish the

1989 fee is determined. The factor was determined by chain multiplying

the factor for the years within the base fee year period (for 1982 this

would be 1.050 x 1.032 x 1.038 x 1.033 x 1.026 x 1.028 x

1.029 = 1.261.) See exhibit 02 for examples of applications.

Exhibit 02, Sec. 33.1--Examples of Use of IPD-GNP Table

The following two examples illustrate use of the IPD-GNP adjustment

factors in exhibit 01 in determining the 1989 fee:

(1) Example 1. A fee of $412 that became established in 1982 (first

year in the fee cycle) would be adjusted to $520 in 1989 ($412 x

1.261). This would be the fee amount owed by a holder who does not

accept the new term permit and would remain constant until the end of

the five year adjustment period. If a new term permit is accepted, the

fee would be phased-in, and the holder would be charged $439 for 1989,

instead of the full amount.

(2) Example 2. A 1980 base year fee of $315 would be adjusted to

$464 ($315 x 1.473) with the actual 1989 charge limited to $352 for a

new term permit. A holder who keeps the old permit would pay the full

fee of $464 in 1989.

Under both examples, factors for the years 1990 and thereafter will

be determined in the same manner as the 1989 factor. Using the 1989

factor as an example, the index for the second quarter of 1987 as

reported in the July 1987 Bureau publication is 117.2; the index for

February 1988 in the July 1988 Bureau publication is 120.6. The

percentage change in the index to be used to determine 1989 fees is

120.6 minus 117.2 divided by 117.2. Thus, 1989 fees will be 2.9 percent

higher than 1988 for those permits that are indexed.

Using the above two examples, calculation of the 1990 fees for

those accepting new term permits would be as follows: (A 1990 IPD-GNP

adjustment factor of 1.028 is assumed.)

(1) Example 1. The full 1989 fee of $520 times the IPD-GNP index

factor for 1990 of 1.028 equals $535, the full fee for 1990. The

increase in the fee is $15. The amount of the 1989 fee increase to be

phased-in in 1990 is $54 ($520-$412 = $108/2 = $54). Thus, the 1990 fee

to be charged is the base 1982 fee of $412 + $54 + $15 = $484.

(2) Example 2. The full 1990 fee equals $477, a fee increase of

$13. The amount of the 1989 fee increase to be phased-in in 1990 is $75

($464-$315 = $149/2 = $75). Thus, the 1990 fee to be charged is the

base 1980 fee of $315 + $75 + $13 = $403.

33.11--Fee Credits. In billing holders for fees, reduce the fee by

the amount of any unused or remaining credits due holders under

provisions of the Appropriations Acts for fiscal years 1983 through

1986.

33.2--Fees on Nonrenewal. When permits are placed on tenure (that

is, a new special use permit will not be issued following expiration),

the annual fee for the tenth year prior to the expiration date of the

current permit becomes the base fee. The fee for each year during the

last ten years is one-tenth of the base fee multiplied by the number of

years then remaining on the permit. For example, charge a holder with

nine years remaining 90 percent of the base fee; with eight years, 80

percent; and so forth.

Use the following schedule to calculate the holder's fee during the

10-year period:

------------------------------------------------------------------------

Percent of

Years remaining on current permit base fee to

charge

------------------------------------------------------------------------

10...................................................... 100

9....................................................... 90

8....................................................... 80

7....................................................... 70

6....................................................... 60

5....................................................... 50

4....................................................... 40

3....................................................... 30

2....................................................... 20

1....................................................... 10

------------------------------------------------------------------------

When a review of the decision to convert the lot to an alternative

public use shows that changed conditions warrant continuation of the

recreation residence, use the following fee determination procedures:

1. If a new 20-year term permit is issued, the Forest Service shall

recover the amount of fees foregone while the previous permit was under

notice that the lot would be converted to an alternative public use.

Collect this amount evenly over a 10-year period in addition to the

annual fee due under the new permit. The obligation runs with the lot

and shall be charged to a subsequent purchaser.

The annual fee under the newly issued 20-year permit shall be the

annual index adjusted fee computed as though no limit on tenure

existed, plus the amount specified above until paid in full.

2. If a 20-year term permit is not issued, and the occupancy of the

subject lot is to be allowed to continue for less than 10 years (that

is, authorized by a new permit for a specified term), do not recover

past fees. Determine the fee for a new permit of less than 10 years by

computing the fee as if notice that a new permit would not be issued

had not been given, reduced by the appropriate percentage for the

number of years of the extension (that is, a 6-year tenure period

results in a fee equal to 60 percent of the base fee).

3. If a 20-year term permit is not issued, and the occupancy of the

subject lot is to be allowed to continue for more than 10 years

(authorized by a new permit for a term of less than 20 years), the

Forest Service shall recover fees as outlined in preceding paragraph 1,

computed for the most recent 10-year period in which the term of the

permit was limited.

33.3--Appraisals. Use the following process to determine the fair

market value of recreation residence lots.

1. Use appraisals made by professional appraisers for determining

the market value of the fee simple estate of the National Forest land

underlying the lot subject to a special use permit, but without

consideration as to how the authorization would or could affect the fee

title of the lot (FSH 5409.12, ch. 6 for the standard contract to be

used to establish fair market value of recreation residence lots).

2. In consultation with affected holders, select and appraise

typical lots (rather than all individual lots) within groups that have

essentially the same or similar value characteristics. Within such

groupings, adjust for measurable differences between the lots. (Once

properly established, typical site classifications should rarely

change.)

3. Ensure appraised values are based on comparable market sales of

sufficient quality and quantity that will result in the least amount of

dollar adjustment to make them reflective of the subject lots'

characteristics. Such characteristics include:

a. Physical differences between subject lot and the comparable

sales.

b. Legal constraints imposed upon the market by governmental

agencies.

c. Economic considerations evident in the local market.

d. Locational considerations of subject lot in relation to the

market (sales) comparable.

e. Functional usability and utility of the lot.

f. Amenities occurring to the lot as compared with selected sales

comparables.

g. Availability of improvements (such as roads, water systems, and

power lines) provided by nonholder entities, including the United

States. Do not adjust for improvements furnished by holders.

h. Other market forces and factors identified as having a

quantifiable effect upon value.

33.31--Appraisers.

1. Select fee appraisers who hold a current certification of

competence from a nationally recognized professional appraisal

organization. In the case of Forest Service appraisers, use those

individuals who have received adequate training through professional

appraisal organizations and who have satisfactorily completed the basic

courses necessary to demonstrate competence.

2. Require appraisers to sign a standard agreement that states:

a. The approved appraisal format to be used.

b. The approved standard forms to be used.

c. A full, complete, and accurate definition of the appraisal

problem.

d. The standards of professional competence, ethics, and practice

to which the appraiser shall adhere.

e. Those requirements of the appraisal assignment that may be

imposed under (1) statutes, (2) Federal regulations, (3) Forest Service

policies and procedures, and (4) situations unique to the given

appraisal assignment.

3. Require appraisers to notify affected holders by mail and offer

to meet with them to discuss the assignment, answer questions specific

to the assignment, and seek advice, information, and cooperation from

the holders and their local organizations. The appraiser must notify

holders of such a meeting at least 30 days in advance of the meeting.

Send notices to the address used for bills for collection. Use the

notice to give the holders advance information on the appraisal

assignment. At such meetings, require that the appraiser have available

copies of the appraisal instructions, directions, and requirements for

review by the holders. An appraisal cannot be made prior to the meeting

with the holders.

33.32--Establishing Recreation Residence Lot Value.

1. Upon receipt of the appraisal report, conduct a review of the

appraisal in conformance with the standards of the National Association

of Review Appraisers.

2. Following review and acceptance of the appraisal, notify

affected holders of Forest Service acceptance of the report. In the

notification, inform holders that they and other interested parties

have 45 days in which to review the appraisal. Upon request, provide

copies of the report(s) and supporting documentation pursuant to the

Freedom of Information Act.

3. Upon request, provide an opportunity for affected holders to

obtain, at their expense, an appraisal report from an appraiser holding

at least the same or similar qualifications as the one selected by the

Forest Service.

a. The Forest Service shall provide holders with a copy of the

standards used by the appraiser selected by the Forest Service and

holders shall provide the standards to the holder-employed appraiser.

The holder must require the observance of these standards, including a

signed certification that ensures an understanding of the appraisal

instructions and standards. Reject any appraisals that do not meet

these standards.

b. Subject the holder-furnished appraisal to the same review

requirements as the appraisal obtained by the Forest Service.

4. Give full and complete consideration to both appraisals. If the

two appraisals disagree in value by more than 10 percent, ask the two

appraisers to try and reconcile or reduce their differences. If the

appraisers cannot agree, the Forest Supervisor will utilize either or

both appraisals to determine the fee, unless a third appraisal is

requested and accepted by the Supervisor.

5. When requested, seek a third appraisal.

a. The cost shall be shared equally by the holder and the Forest

Service.

b. This appraisal must meet the same standards of the first and

second appraisals. The Forest Supervisor has discretion to accept or

reject the third appraisal.

Forest Service Manual

Chapter 2720--Special Uses Administration

2721.23e--Recreation Residence Continuance. See FSM 2347.1 for the

general policy on recreation residence use. Follow the direction in

this section and the procedures in section 41.23, FSH 2709.11 in

determining whether recreation residence term permits may be issued for

a new term at current sites. Exhibit 01, section 41.23c, FSH 2709.11,

depicts the permit continuance process.

The Land and Resource Management Plan (Forest plan) provides

direction for continuance of the recreation residence use (FSM 1920).

As Forest plans are revised, availability for recreation residence use

shall be explicitly addressed in the plan through delineation of

management areas and associated management area prescriptions (FSM

1920).

Decisions to issue new recreation residence term permits following

expiration of the current term permit require a determination of

consistency with the current Forest plan. Make this determination by

evaluating the extent to which continued recreation residence use

adheres to the standards and guidelines which apply to the appropriate

management area. Address continuation of recreation residence use on a

tract or group of tracts basis, not on individual lots.

1. Use Is Consistent With Forest Plan. When recreation residence

use is consistent with the Forest plan, it shall continue. If the use

has been analyzed sufficiently as part of a EA or EIS completed within

the 5 years prior to permit expiration, issue a new term permit upon

expiration of the current term permit. Issue a record of decision or a

decision notice and finding of no significant impact only if the use

was not specifically approved in the appropriate decision document. If

the use has changed and such change has not been analyzed sufficiently

as part of a completed EA or EIS, complete the appropriate

environmental analysis (FSH 1909.15). If the EA or EIS indicating the

use is consistent with the Forest Plan was completed more than 5 years

prior to permit expiration, additional environmental documentation is

necessary (FSH 1909.15, sec. 18.03). Initiate action to issue a new

term permit within 2 years prior to permit expiration.

2. Use May Not Be Consistent With Forest Plan. When the lands

currently authorized for recreation residence use are allocated to

alternative public uses through amendment or revision of the Forest

Plan, and continued recreation residence use may be inconsistent with

standards and guidelines which apply to the appropriate management

area, the Forest Supervisor shall conduct a project analysis of the

alternative public use(s) (FSH 1909.15). This project analysis shall

consider continuation of existing recreation residence use through

appropriate modification of the term permit provisions or amendment of

the Forest plan to accommodate the use, or discontinuation of the use

(See FSM 2347.1 for recreation residence use continuance). Decisions

reached by the project analysis must comply with NEPA requirements and

are subject to appeal under Department of Agriculture appeal

regulations at 36 CFR part 215 and 36 CFR part 251, subpart C.

a. If the project analysis results in a decision to amend the

Forest plan so that the recreation residence use may continue, modify

the provisions of the current term permits as appropriate. New term

permits can be issued following current permit expiration. Additional

environmental documentation may be necessary (FSH 1909.15).

b. If the project analysis results in a decision to convert a lot

to an alternative public use at some point in the future, grant the

holder at least 10 years continued use from the date of the decision,

unless the continued use conflicts with law and regulation, and

identify the specific alternative public use(s) for which the land is

being recovered. As provided by FSM 2347.1, the authorized officer may

allow continued use of the lot until such time as conversion of the new

use is ready to begin by issuing a new permit for the remaining period

and amending the Forest plan if needed.

c. Review the project analysis decision two years prior to permit

expiration to determine if there have been any changes in resource

conditions that require another look at the decision. If the decision

was made less than 5 years prior to permit expiration and the review

shows that conditions have not changed, implement the project analysis-

based decision. Affirmation of such decision is not appealable (36 CFR

251.83). If the decision was made more than 5 years from permit

expiration and/or review indicates that resource conditions have

changed, update the analysis to determine the proper action. Decisions

arising from this new analysis are appealable.

2721.23f--In-Lieu Lots. When new permits will not be issued

following expiration of the present permit, make a reasonable effort to

provide an in-lieu lot, if available, at locations not needed in the

foreseeable future (generally, the period covered by the Forest plan)

for alternative public uses in accordance with FSM 2347.1, paragraph 6

and FSH 2709.11, section 41.23d.

2721.23g--Land Exchange. Proposals to convey recreation residence

tracts into private ownership by land exchange may be considered at any

time. Such proposals must be processed in accordance with the

instructions in FSM 5430 applicable to all land exchanges.

2721.23h--Cooperation and Issue Resolution. Authorized officers

shall strive to reduce conflict between holders and the Forest Service

arising from permit administration. As necessary, specify a Forest

Officer to work with the holders, their representatives, and other

interested parties on specific issues.

1. Provide opportunity for holders and their representatives to

participate in issue resolution. Where practicable, except where an

imminent hazard or risk to health and safety or resources requires

immediate action prior to issuing written decisions related to permit

administration, consult and meet in person, or by telephone, with

holders and their representatives to discuss any issues or concerns

related to the permit and to reach a common understanding and

agreement.

2. During Forest plan amendment or revision and project analysis,

seek full involvement of holders and their representatives in public

involvement opportunities and activities. Encourage and solicit their

input and comments. Meet with holders and their representatives to

discuss any issues or concerns arising in the planning and analysis

processes and explore opportunities to resolve those issues prior to

issuing a decision.

3. If a decision is appealed, utilize the opportunities provided in

the appeal rules (36 CFR part 215, part 217 and part 251, subpart C) to

discuss the appeal with the appellant(s) and intervenor(s) (and/or

their representatives) together or separately to explore opportunities

to resolve the issue by means other than review and decision on the

appeal.

2721. 23i--Noncompliance. Give written notice and provide a

reasonable opportunity for holder to correct special use permit

violations before terminating the use for noncompliance with the permit

conditions (36 CFR 251.60(e)). Revocation for noncompliance shall be

only for a breach of a permit provision(s) that continues after notice

and a reasonable opportunity for correction has been given (FSM 2347.1,

para. 5).

2721.23j--Lot Restoration. On expiration of a permit which will not

be reissued or revocation or termination prior to expiration (FSM

2721.23a(10), 2721.23a(16)), except for revocation in the public

interest, require the holder to restore the property to a condition

acceptable to the Forest Supervisor (36 CFR 251.60(j)). The holder may

relinquish the improvements to the Forest Service upon approval of the

Forest Supervisor. Terms and conditions for lot restoration are given

in the term permit issued for recreation residences.

Forest Service Handbook 2709.11--Special Uses

Chapter 40--Special Uses Administration

41.23--Recreation Residence Use.

41.23a--Permit Continuance. When a Forest plan is amended or

revised and recreation residence use remains consistent with management

direction given in the Forest plan, issue a new permit to the same

holder in accordance with the following:

1. Since recreation residences have been in place for many years,

and experience in administering this use has shown that continuing the

use does not cause significant environmental impacts, issuance of a new

permit can be made without further environmental documentation (FSM

2721.23e), except when the following situations are present:

a. If the use has been analyzed sufficiently as part of an EA or

EIS completed within 5 years of permit expiration, but not specifically

addressed in a decision document, confirm the consistency of the use

with the management direction in the Forest plan by issuing a record of

decision or a decision notice and finding of no significant impact.

b. If the use has not been analyzed sufficiently as part of an EA

or EIS completed within 5 years of permit expiration, complete the

appropriate environmental analysis and documentation (FSH 1909.15).

c. If an EA or EIS indicating the use is consistent with the Forest

plan was completed more than 5 years prior to permit expiration,

additional environmental documentation may be necessary (FSH 1909.15).

d. If there are changes in the use and the changed use has been

analyzed sufficiently as part of an EA or EIS completed within 5 years

of permit expiration and approved in the appropriate decision document

no further action is required. If the changed use has not been analyzed

sufficiently as part of a completed EA or EIS and approved in the

appropriate decision document, environmental documentation may be

necessary. Such documentation may be accomplished by categorical

exclusion (FSH 1909.15).

2. Initiate the analysis and action to issue a new permit 2 years

prior to expiration of the current term permit and notify the holder of

the outcome of the action.

3. Ensure the current use is in full compliance with the terms of

the permit before issuing the new term permit.

4. Review and update the term permit provisions to ensure that the

new permit contains those clauses necessary to comply with all current

regulations of the Secretary of Agriculture and all present Federal,

State, or county laws, regulations, or ordinances which are applicable

to the area covered by the permit.

41.23b--Project Analysis. When a Forest plan is amended or revised

and consistency of the existing recreation residence use with new

Forest plan management direction is uncertain, conduct a site specific

project analysis to verify the new direction. Recognize that an

inconsistency indicated by the Forest plan is not tantamount to

recreation residence removal. Recreation residence use may continue by

appropriate modification of the term permit provisions to recognize

specific occupancy conditions, or by amendment of the Forest plan to

accommodate the use (FSM 2721.23e.1.b).

1. Public Involvement. During the project analysis process,

encourage and solicit information, comments, and involvement from

holders and other interested parties. Follow Forest Service public

involvement procedures, including those associated with NEPA (FSM 1620,

FSH 1900.12, and FSH 1909.15). Facilitate holder involvement by timing

review periods as closely as possible to the recreation residence use

season.

2. Analysis Documentation. The project analysis record and

appropriate NEPA compliance document must contain objective, detailed

information regarding existing recreation residence use and other

applicable resource conditions. The documentation must include a full

range of alternatives that includes consideration for retention of some

or all of the existing recreation residence use.

3. Analysis Factors and Considerations.

a. Lot use. Examine the relationship of the existing recreation

residence use with the proposed alternative public use of the lot,

including compatibility and conflict. Describe any current or

anticipated conflicts between recreation residence use and the proposed

use. Examine and describe the feasibility of other sites to meet the

proposed use or how the proposed use could be provided for by modifying

recreation residence use or by modifying the proposed use.

Develop a range of alternatives that:

(1) If possible, examine and describe ways to meet the proposed use

without significant conflict with existing recreation residence uses

and how potential conflicts can or cannot be mitigated.

(2) Examine the feasibility of common, shared, or multiple use that

includes recreation residences. Also examine the feasibility of

adjusting lot and tract sizes, configurations and boundaries, or

relocation of lot improvements to better accommodate such use.

(3) Examine the feasibility of alternative sites for recreation

residence use and for the proposed use.

(4) Compare the benefits and disadvantages of the proposed use with

the benefits and disadvantages of continued recreation residence use,

including economic considerations, such as the cost of removing the

use.

(5) Examine the feasibility of using land exchanges to accommodate

recreation residence and/or the proposed use.

B. Other Resource Impacts. Show how recreation residence occupancy

is compatible or in conflict with other National Forest System

resources. Consider the applicability of section 106 of the National

Historic Preservation Act and other Federal and State laws which may

have an effect on these resources.

c. Environmental Impacts. Discuss the environmental impacts of

continued recreation residence use, together with the impacts of any

improvements necessary for their continued use, compared with the

impacts of the proposed use. Examine the environmental, economic, and

social impacts of recreation residence use, the proposed use, and

alternative public uses, particularly any necessary construction.

4. Decision Issuance and Documentation.

a. If the project analysis results in a finding that continued

recreation residence use will not conflict with the proposed

alternative public use, issue a decision to amend the Forest plan, and

modify existing permits as appropriate. Issue new term permits for the

applicable lots following permit expiration. The decision document

shall summarize the conclusions regarding recreation residence use and

provide a basis for the issuance of new permits.

b. If the project analysis results in a finding that (1) the

recreation residence use is in some degree inconsistent with the Forest

plan but that continued use does not conflict with the proposed

alternative public use, or (2) that the proposed use can accommodate

some or all of the recreation residence use, issue a decision to amend

the Forest plan and modify existing permits as appropriate. Issue new

term permits for the applicable lots following permit expiration. The

decision document shall summarize the conclusions regarding continued

recreation residence use and delineate, as appropriate, which permits

will not be continued and which will receive new term permits.

c. If the project analysis results in a finding that recreation

residence use remains inconsistent with the Forest plan and is not

compatible with the proposed use, issue a decision that the recreation

residences lots are to be removed and the lots converted to the

proposed use.

d. In addition to other requirements specified in FSH 1909.15, the

decision document shall include the following:

(1) The estimated time of conversion.

(2) The reasons the recreation residence use is or is not

compatible with the proposed use.

(3) The reasons why the proposed use was chosen over others.

(4) A summary of alternatives to the conversion, including the

possibility of combining or sharing use with recreation residence use;

adjusting lots or locations of improvements to better accommodate

common or shared uses; and alternatives suggested by affected holders

and other interested members of the public.

(5) The reasons any conflict between the recreation residences and

the proposed use cannot be resolved.

(6) Cost effectiveness of the proposed use.

5. Decision Notification.

a. Notify holders and any interested parties of the decision and

provide copies of the project analysis, NEPA documentation, any Forest

plan amendment, and decision document as soon as possible after the

decision along with notice of appeal rights under 36 CFR part 217 or

part 251, subpart C.

b. When lots will be converted to the proposed use and new permits

will not be issued upon expiration of the present permits, provide with

the decision notification:

(1) Ten years or more notice that the lots will be converted to the

proposed use (FSM 2721.23a). Normally, use the same conversion date for

all affected holders in a particular group or tract.

(2) Notice that the holder should refrain from making costly

repairs, improvements, or expenditures except those that are necessary

to protect holder and public health or safety.

(3) Notice of whether in-lieu lots will or will not be made

available, although the location of those in-lieu lots may not be known

until permit expiration approaches.

(4) Notice that fees will be adjusted in accordance with FSH

2709.11, section 33.2.

6. Project Analysis Decision Review. Two years prior to permit

expiration (usually the 18th permit year), Forest Supervisors shall

review project analysis decisions affecting those permits that are more

than five years old to determine if there have been any changes in

resource conditions that require reconsideration of the decision.

For all reviews, the following apply:

a. Reviews shall be objective, comprehensive, and in writing. New

information, changed resource conditions, and new or changed land

allocations made through the forest planning process shall be reviewed

to determine if a new project analysis and/or additional NEPA

compliance is needed.

b. When initiating the review, notify affected holders and

interested publics in writing and provide opportunity for involvement

in accordance with Forest Service public involvement procedures.

c. If review indicates that conditions have not changed, implement

the decision.

d. If review indicates that conditions have changed, initiate a new

project analysis, including NEPA compliance, to determine future use of

the lot(s).

e. Notify affected holders and interested publics in writing of

review findings, including notice that the result of the review is not

appealable (36 CFR 251.83).

41.23c--Permit Decision Process. Exhibit 01 depicts the procedure

to be followed in determining whether the recreation residence

authorization should be continued.

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41.23d--In-Lieu Lots. Pursuant to FSM 2347.1, paragraph 6, in-lieu

lots may be offered to holders who have received notice that their

permits are being revoked for reasons other than noncompliance or that

a new permit will not be issued following expiration of their existing

permits because the lot is needed for an alternative public use.

Identify and offer in-lieu lots in accordance with FSM 2347.1,

paragraph 6 and FSM 2721.23f and follow these procedures:

1. When available, offer in-lieu lots to holders at the time that

notice is given that the lot will be converted to an alternative public

use and a new permit will not be issued. If lots do not become

available until later, offer them then.

2. Give first priority to identifying and offering in-lieu lots in

the same tract or an expansion of that tract, where feasible.

3. Arrange a joint inspection of the in-lieu lot with the holder.

Allow the holders 90 days from the date of the joint inspection of the

in-lieu lot or 90 days from the final disposition of any appeals of the

decision to convert the lot to an alternative public use, whichever is

later, to accept or reject the offer. The 90-day period shall occur

while access to the lot is possible.

4. When holders accept such offers, issue a new permit and reserve

the offered lots. Do not charge a fee until the holder begins

construction of improvements on the lot. A partial waiver of fees for

the in-lieu lot may be appropriate until the improvements are actually

occupied. The lot reservation will expire upon holder's failure to

begin construction on the in-lieu lot on a mutually-agreed upon

schedule.

5. Allow holders accepting offers to continue use of their current

lots until the expiration date. Inform the holders that they should be

prepared to move to the in-lieu lot during the 24 months prior to

permit expiration, provided the supplemental review of the decision to

convert the present lot to an alternative public use has been

completed.

6. The opportunity to develop an in-lieu lot, if accepted by the

previous owner, shall be extended to the new owner, if eligible, when

there is a change in ownership of authorized improvements.

7. Do not offer in-lieu lots for revocation actions stemming from

noncompliance with special use permit terms.

Forest Service Handbook 2709.11--Special Uses

Chapter 50--Terms and Conditions

54--Special Use Authorizations

54.1--Term Special Use Permit for Recreation Residences. Use Form

FS-2700-5a with all required clauses as set forth in exhibit 01.

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Note: Permit clauses revised as a result of the reformulation of

the recreation residence policy as described in this notice are

printed in italics.

Terms and Conditions

I. Authority And Use And Term Authorized

A. This permit is issued under the authority of the Act of March 4,

1915, as amended (16 U.S.C. 497), and title 36, Code of Federal

Regulations, sections 251.50-251.64. Implementing Forest Service

policies are found in the Forest Service Directives System (FSM 1920,

1950, 2340, 2720; FSH 2709.11, chap. 10-50). Copies of the applicable

regulations and policies will be made available to the holder at no

charge upon request made to the office of the Forest Supervisor.

B. The authorized officer under this permit is the Forest

Supervisor, or a delegated subordinate officer.

C. This permit authorizes only personal recreation use of a

noncommercial nature by the holder, members of the holder's immediate

family, and guests. Use of the permitted improvements as a principal

place of residence is prohibited and shall be grounds for revocation of

this permit.

D. Unless specifically provided as an added provision to this

permit, this authorization is for site occupancy and does not provide

for the furnishing of structures, road maintenance, water, fire

protection, or any other such service by a Government agency, utility

association, or individual.

E. Termination at End of Term: This authorization will terminate on

*____________. (insert date)

II. Operation and Maintenance

A. The authorized officer, after consulting with the holder, will

prepare an operation and maintenance plan which shall be deemed a part

of this permit. The plan will be reviewed annually and updated as

deemed necessary by the authorized officer and will cover requirements

for at least the following subjects:

1. Maintenance of vegetation, tree planting, and removal of

dangerous trees and other unsafe conditions.

2. Maintenance of the facilities.

3. Size, placement and descriptions of signs.

4. Removal of garbage or trash.

5. Fire protection.

6. Identification of the person responsible for implementing the

provisions of the plan, if other than the holder, and a list of names,

addresses, and phone numbers of persons to contact in the event of an

emergency.

Note: Forest Supervisors may include other provisions relating

to fencing, road maintenance, boat docks, piers, boat launching

ramp, water system, sewage system, incidental rental, and the Tract

Association. Regional Foresters may add specific provisions that

Forest Supervisors should include in the plan.

III. Improvements

A. Nothing in this permit shall be construed to imply permission to

build or maintain any improvement not specifically named on the face of

this permit or approved in writing by the authorized officer in the

operation and maintenance plan. Improvements requiring specific

approval shall include, but are not limited to: Signs, fences, name

plates, mailboxes, newspaper boxes, boathouses, docks, pipelines,

antennas, and storage sheds.

B. All plans for development, layout, construction, reconstruction

or alteration of improvements on the lot, as well as revisions of such

plans, must be prepared by a licensed engineer, architect, and/or

landscape architect (in those states in which such licensing is

required) or other qualified individual acceptable to the authorized

officer. Such plans must be approved by the authorized officer before

the commencement of any work.

IV. Responsibilities of Holder

A. The holder, in exercising the privileges granted by this permit,

shall comply with all present and future regulations of the Secretary

of Agriculture and all present and future federal, state, county, and

municipal laws, ordinances, or regulations which are applicable to the

area or operations covered by this permit. However, the Forest Service

assumes no responsibility for enforcing laws, regulations, ordinances

and the like which are under the jurisdiction of other government

bodies.

B. The holder shall exercise diligence in preventing damage to the

land and property of the United States. The holder shall abide by all

restrictions on fires which may be in effect within the forest at any

time and take all reasonable precautions to prevent and suppress forest

fires. No material shall be disposed of by burning in open fires during

a closed fire season established by law or regulation without written

permission from the authorized officer.

C. The holder shall protect the scenic and esthetic values of the

National Forest System lands as far as possible consistent with the

authorized use, during construction, operation, and maintenance of the

improvements.

D. No soil, trees, or other vegetation may be removed from the

National Forest System lands without prior permission from the

authorized officer. Permission shall be granted specifically, or in the

context of the operations and maintenance plan for the permit.

E. The holder shall maintain the improvements and premises to

standards of repair, orderliness, neatness, sanitation, and safety

acceptable to the authorized officer. The holder shall fully repair and

bear the expense for all damage, other than ordinary wear and tear, to

National Forest lands, roads and trails caused by the holder's

activities.

F. The holder assumes all risk of loss to the improvements

resulting from acts of God or catastrophic events, including but not

limited to, avalanches, rising waters, high winds, falling limbs or

trees and other hazardous natural events. In the event the improvements

authorized by this permit are destroyed or substantially damaged by

acts of God or catastrophic events, the authorized officer will conduct

an analysis to determine whether the improvements can be safely

occupied in the future and whether rebuilding should be allowed. The

analysis will be provided to the holder within 6 months of the event.

G. The holder has the responsibility of inspecting the site,

authorized rights-of-way, and adjoining areas for dangerous trees,

hanging limbs, and other evidence of hazardous conditions which could

affect the improvements and or pose a risk of injury to individuals.

After securing permission from the authorized officer, the holder shall

remove such hazards.

H. In case of change of permanent address or change in ownership of

the recreation residence, the holder shall immediately notify the

authorized officer.

V. Liabilities

A. This permit is subject to all valid existing rights and claims

outstanding in third parties. The United States is not liable to the

holder for the exercise of any such right or claim.

B. The holder shall hold harmless the United States from any

liability from damage to life or property arising from the holder's

occupancy or use of National Forest lands under this permit.

C. The holder shall be liable for any damage suffered by the United

States resulting from or related to use of this permit, including

damages to National Forest resources and costs of fire suppression.

Without limiting available civil and criminal remedies which may be

available to the United States, all timber cut, destroy

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