Administration; Cooperative Funding

DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 211

RIN 0596-AB63

Administration; Cooperative Funding

AGENCY: Forest Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department is amending current regulations to establish

minimum requirements applicable to written agreements between the

Forest Service and cooperators, such as individuals, States and local

governments, and other non-Federal entities. This rulemaking implements

amendments to the Act of June 30, 1914, which expand the basis for

accepting contributions for cooperative work, allow reimbursable

payments by cooperators, and adequately protect the Government's

interest. The intended effect is to fully implement the new statutory

provisions to facilitate cooperative ventures.

EFFECTIVE DATE: This rule is effective December 8, 1999.

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FOR FURTHER INFORMATION CONTACT: Debbie Pressman, Wildlife, Fish and

Rare Plants Staff, 202-205-1205.

SUPPLEMENTARY INFORMATION:

Background

On May 18, 1998, the Forest Service published a proposed rule (63

FR 27245) that would implement recent amendments to the Act of June 30,

1914 (16 U.S.C. 498). This Act authorizes the Secretary of Agriculture

to receive and subsequently use money as contributions toward

cooperative work in forest investigations or for the protection and

improvement of the national forests. The proposed rule would implement

amendments to the Act of June 30, 1914, ( 16 U.S.C. 498) by: (1)

Providing for the use of contributions for cooperative work on the

entire National Forest System; (2) Adding ``management'' to the list of

activities for which contributions for cooperative work may be

accepted; and (3) Providing specific authority to accomplish

cooperative work using Forest Service funds prior to reimbursement by

the cooperator pursuant to a written agreement.

Response to Comments Received

Public comment on the proposed rule was invited. The comment period

closed on July, 17, 1998. Seven respondents provided comments on the

proposed rule: 4 national conservation organizations, 1 State fish and

wildlife agency, 1 utility company, and 1 Member of Congress. All

respondents expressed support of the agency's effort to enhance

cooperative partnerships on National Forest System lands by removing

administrative barriers requiring cooperators to contribute funds in

advance of any work to be accomplished.

A summary of specific comments by broad subject and the

Department's response to these comments follows.

Comment: Interpretation of Allowable Management Activities. One

respondent suggested adding the word ``evaluation'' to the list of

management activities proposed at Sec. 211.6(a), Purpose and scope,

that can be cooperatively funded.

Response: The word ``management'' is a broad term that would

include ``such work as planning, analysis, related studies and

evaluations, as well as resource activities.'' The examples provided in

the rule are added for clarity and are not intended to be inclusive of

all potential ``management'' activities. Therefore, this suggestion has

not been adopted in the final rule.

Comment: Use of Cooperator Contributions for Administrative

Support. At Sec. 211.6(a), Purpose and scope, the proposed rule

described National Forest management activities which may be

cooperatively funded as including such work as planning, analysis, and

related studies, as well as resource activities. One respondent raised

the issue of whether this language is inconsistent with the intent of

the law. This respondent also expressed concern that cooperator funds

could be used for administration, planning, and research, instead of

field work and that the proposed rule lacked safeguards limiting the

amount that the Forest Service can use from contributed funds for non-

field work.

Response: The Department interprets the management of National

Forest System lands to include field resource work, administrative

studies, project planning, and all related tasks necessary to carry out

the mission of the Forest Service. The development of cooperative

projects and associated cooperative agreements requires the full

disclosure of all costs associated with the project. Negotiations and

joint discussions between the Forest Service and cooperators afford

cooperators the opportunity to fund as much or as little of the project

cost as they deem appropriate. Cooperators must agree on how their

funds will be expended. Given that cooperative project costs are fully

disclosed and mutually agreed upon, the Department is of the opinion

that the proposed rule was consistent with the Act of June 30, 1914, as

amended, and that additional language prohibiting non-field work is not

necessary in the final rule.

Comment: Reimbursements to the Forest Service. One respondent

suggested that a cooperator be permitted to provide the required

reimbursement payments within the first 60 days of the fiscal year

immediately following the fiscal year in which the expenditure of

Forest Service funds was completed, if such expenditures by the Forest

Service occur within the last 60 days of a fiscal year.

Response: The Department agrees with this suggestion but does not

believe that a change in rule text is necessary. Forest Service Manual

Sec. 6533.3 already instructs employees on how to handle such

situations. Moreover, Forest Service bills for collection specify the

time period in which payment is due.

Comment: In-Kind Contributions. One respondent recommended that in-

kind contributions, such as goods and services, contributed by

cooperators in conjunction with cooperative agreements, not be subject

to the bonding provisions required in Sec. 211.6(b), Reimbursements and

bonding, of the proposed rule.

Response: In-kind contributions are not affected by this rule. The

Act of June 30, 1914, as amended, addresses only those situations in

which monies are received by the Forest Service as contributions toward

cooperative work. If a cooperator is making in-kind contributions

rather than financial contributions, the bonding provisions specified

in Sec. 211.6(c), Bonding, of the final rule would not be applicable.

Comment: Application of Bonding Threshold. One respondent expressed

support for protecting the government's interest by requiring bonds for

project costs exceeding $25,000, but expressed concern that the

provision should apply to the cost of individual projects, rather than

to total cooperative funds provided by partners on an annual basis.

Response: Paragraph Sec. 211.6(b), Reimbursements and bonding, of

the proposed rule would require a payment bond for agreements of

$25,000 or more to guarantee the cooperator's reimbursement, thereby

ensuring that the public interests are protected. This requirement

applies to individual cooperative agreements, rather than to individual

cooperative projects. The distinction is that a particular cooperative

agreement may encompass more than one cooperative project. The text of

Sec. 211.6(c), Bonding, of the final rule has been revised to clarify

this distinction.

Comment: Payment Assurances and Creditworthiness. One respondent

suggested that, on a case-by-case basis, assurances of payment, other

than the payment bonds required in Sec. 211.6(b), Reimbursements and

bonding, of the proposed rule should be acceptable, and further, that

the payment bond requirement should be waived where the cooperator has

a significant history of successfully completing payments in accordance

with other agreements or provides some other reliable assurance that

payment will be provided.

Response: The Department has carefully considered this comment but

remains convinced that the bonding requirement (Sec. 211.6(b),

Reimbursement and bonding, of the proposed rule) is necessary to

protect the interests of the public and should not be waived or

otherwise modified on a case-by-case basis. As specified in the

proposed rule, the bonding requirement would be consistently applied

throughout the agency whenever a non-Government cooperator agrees to

contribute $25,000 or more to the Forest Service on a reimbursable

basis. By providing a consistent mechanism for handling the bonding

requirement, all cooperators are

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assured of equitable treatment across administrative units, thus

eliminating the potential for conflicting ``creditworthy

determinations'' for cooperative agreements at similar funding levels.

Accordingly, the Department has decided to retain the payment assurance

requirements set out in Sec. 211.6(b) of the proposed rule in a

separate paragraph Sec. 211.6(c), Bonding, of the final rule as the

more appropriate mechanism for protecting government interests as

required by the statute.

Comment: Effect of Rule on Existing Memorandums of Understanding.

One respondent asked if cooperators operating under existing

Memorandums of Understanding (MOUs) would be required to enter into new

MOUs to clarify the fiscal relationship between the cooperator and the

Forest Service.

Response: Memorandums of Understanding (MOUs) are viewed as

agreements documenting cooperation in those circumstances where nothing

of value transfers between parties or documenting a common

understanding of the nature of a relationship between parties.

Therefore, MOUs are not affected by this rule.

However, a written cooperative agreement, completed in accordance

with specific cooperative authority, must be executed prior to: (1) The

agency's receipt of contributions for cooperative work; or (2) The

expenditure of agency funds on a reimbursable basis. While the final

rule does not require revision of existing cooperative agreements, any

party to existing cooperative agreements may request changes in payment

terms or any other aspect of the agreement at any time.

Additional Modification

In the course of considering the comments on the proposed rule, the

agency became aware of the need to clarify the meaning of ``non-

Government cooperator.'' This has been addressed by adding a new

sentence to paragraph Sec. 211.6(c) in the final rule.

Conclusion

Having considered the comments received, the Department is adopting

a final rule implementing the recent statutory amendments to the Act of

June 30, 1914, which expand the basis for accepting contributions for

cooperative work between the Forest Service and cooperators. The final

rule provides for the planning and completion of projects using Forest

Service funds with reimbursement from cooperators. The Government's

interests are protected by securing reimbursement payments from non-

Government cooperators with payment bonds when payments due under a

cooperative agreement are $25,000 or more.

Regulatory Impact

This final rule has been reviewed under USDA procedures and

Executive Order 12866 on Regulatory 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 rule is not subject to OMB review under Executive Order

12866.

Moreover, this final rule 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 the Act.

Unfunded Mandates Reform

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2

U.S.C. 1531-1538), the Department has assessed the effects of this

final rule on State, local, and tribal governments and the private

sector. This final rule does not compel any expenditure of funds by any

State, local, or tribal governments or anyone in the private sector.

Therefore, a statement under section 202 of the Act is not required.

Environmental Impact

This final rule affects the administrative requirements for

reimbursement payments to the agency by cooperators. 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 rulemaking, the Department 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.

No Takings Implications

This final rule has been analyzed in accordance with the principles

and criteria contained in Executive Order 12630, and it has been

determined that the final rule does not pose the risk of a taking of

constitutionally-protected private property since it sets forth

administrative requirements regarding the deposit of cooperator funds

for forest investigations or the protection, management, and

improvement of the National Forest System.

Civil Justice Reform Act

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. Upon adoption of this final rule, (1) All State

and local laws and regulations that are in conflict with this final

rule or which would impede its full implementation would be preempted;

(2) No retroactive effect would be given to this final rule; and (3) It

would not require administrative proceedings before parties may file

suite in court challenging its provisions.

Controlling Paperwork Burdens on the Public

This final rule does not contain any record keeping or reporting

requirements or other information collection requirements as defined in

5 CFR 1320 and, therefore, imposes no paperwork burden on the public.

Accordingly, the review provisions of the Paperwork Reduction Act of

1995 (44 U.S.C. 3501 et seq.) and implementing regulations at 5 CFR

1320 do not apply.

List of Subjects in 36 CFR Part 211

Administrative practice and procedure, Intergovernmental relations

(Federal/State cooperation), and National forests.

Therefore, for the reasons set forth in the preamble, Part 211 of

Title 36 of the Code of Federal Regulations is amended as follows:

PART 211--ADMINISTRATION

1. The authority citation for part 211 is revised to read as

follows:

Authority: 16 U.S.C. 472, 498, 551.

Subpart A--Cooperation

2. Revise the heading for subpart A to read as set out above.

3. Add a new Sec. 211.6 to read as follows:

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Sec. 211.6 Cooperation in forest investigations or the protection,

management, and improvement of the National Forest System.

(a) Purpose and scope. Forest Service officers, when engaged in

cooperative activities otherwise authorized, may receive monies from

cooperators only for cooperative work in forest investigations or for

the protection, management, and improvement of the National Forest

System and only in accordance with written cooperative agreements.

Management of the National Forest System may include such work as

planning, analysis, and related studies, as well as resource

activities.

(b) Reimbursements. Agency expenditures for work undertaken in

accordance with this section may be made from Forest Service

appropriations available for such work, with subsequent reimbursement

from the cooperator, in accordance with established written agreements.

Forest Service officers shall issue written bills for collection for

cooperator reimbursement payments within the same fiscal year as Forest

Service expenditures.

(c) Bonding. Each written agreement involving a non-Government

cooperator's total contribution of $25,000 or more to the Forest

Service on a reimbursable basis, must include a provision requiring a

payment bond to guarantee the cooperator's reimbursement payment.

Acceptable security for a payment bond includes Department of the

Treasury approved corporate sureties, Federal Government obligations,

and irrevocable letters of credit. For the purposes of this section, a

non-Government cooperator is an entity that is not a member, division,

or affiliate of a Federal, State, or local government.

(d) Avoiding conflict of interest. Forest Service officers shall

avoid acceptance of contributions from cooperators when such

contributions would reflect unfavorably upon the ability of the Forest

Service to carry out its responsibilities and duties. Forest Service

officers shall be guided by the provisions of 18 U.S.C. parts 201-209,

5 CFR part 2635, and applicable Department of Agriculture regulations,

in determining if a conflict of interest or potential conflict of

interest exists in a proposed cooperative effort. Forest Service ethics

officials or the designated Department of Agriculture ethics official

should be consulted on conflict of interest issues.

Dated: October 26, 1999.

Anne Kennedy,

Deputy Under Secretary, Natural Resources and Environment.

[FR Doc. 99-29083 Filed 11-5-99; 8:45 am]

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