[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]





  H.R. 2389, COUNTY SCHOOLS REVITALIZATION ACT OF 1999 AND H.R. 1185, 
              TIMBER-DEPENDENT COUNTIES STABILIZATION ACT

=======================================================================

                                HEARING

                               before the

               SUBCOMMITTEE ON FORESTS AND FOREST HEALTH

                                 of the

                         COMMITTEE ON RESOURCES
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                     JULY 13, 1999, WASHINGTON, DC

                               __________

                           Serial No. 106-45

                               __________

           Printed for the use of the Committee on Resources




 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
           Committee address: http://www.house.gov/resources

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
59-858           WASHINGTON : 1999




                         COMMITTEE ON RESOURCES

                      DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana       GEORGE MILLER, California
JAMES V. HANSEN, Utah                NICK J. RAHALL II, West Virginia
JIM SAXTON, New Jersey               BRUCE F. VENTO, Minnesota
ELTON GALLEGLY, California           DALE E. KILDEE, Michigan
JOHN J. DUNCAN, Jr., Tennessee       PETER A. DeFAZIO, Oregon
JOEL HEFLEY, Colorado                ENI F.H. FALEOMAVAEGA, American 
JOHN T. DOOLITTLE, California            Samoa
WAYNE T. GILCHREST, Maryland         NEIL ABERCROMBIE, Hawaii
KEN CALVERT, California              SOLOMON P. ORTIZ, Texas
RICHARD W. POMBO, California         OWEN B. PICKETT, Virginia
BARBARA CUBIN, Wyoming               FRANK PALLONE, Jr., New Jersey
HELEN CHENOWETH-HAGE, Idaho          CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California     CARLOS A. ROMERO-BARCELO, Puerto 
WALTER B. JONES, Jr., North              Rico
    Carolina                         ROBERT A. UNDERWOOD, Guam
WILLIAM M. (MAC) THORNBERRY, Texas   PATRICK J. KENNEDY, Rhode Island
CHRIS CANNON, Utah                   ADAM SMITH, Washington
KEVIN BRADY, Texas                   WILLIAM D. DELAHUNT, Massachusetts
JOHN PETERSON, Pennsylvania          CHRIS JOHN, Louisiana
RICK HILL, Montana                   DONNA CHRISTIAN-CHRISTENSEN, 
BOB SCHAFFER, Colorado                   Virgin Islands
JIM GIBBONS, Nevada                  RON KIND, Wisconsin
MARK E. SOUDER, Indiana              JAY INSLEE, Washington
GREG WALDEN, Oregon                  GRACE F. NAPOLITANO, California
DON SHERWOOD, Pennsylvania           TOM UDALL, New Mexico
ROBIN HAYES, North Carolina          MARK UDALL, Colorado
MIKE SIMPSON, Idaho                  JOSEPH CROWLEY, New York
THOMAS G. TANCREDO, Colorado         RUSH D. HOLT, New Jersey

                     Lloyd A. Jones, Chief of Staff
                   Elizabeth Megginson, Chief Counsel
              Christine Kennedy, Chief Clerk/Administrator
                John Lawrence, Democratic Staff Director
                                 ------                                

               Subcommittee on Forests and Forest Health

                 HELEN CHENOWETH-HAGE, Idaho, Chairman
JOHN J. DUNCAN, Jr., Tennessee       ADAM SMITH, Washington
JOHN T. DOOLITTLE, California        DALE E. KILDEE, Michigan
WAYNE T. GILCHREST, Maryland         OWEN B. PICKETT, Virginia
JOHN PETERSON, Pennsylvania          RON KIND, Wisconsin
RICK HILL, Montana                   GRACE F. NAPOLITANO, California
BOB SCHAFFER, Colorado               TOM UDALL, New Mexico
DON SHERWOOD, Pennsylvania           MARK UDALL, Colorado
ROBIN HAYES, North Carolina          JOSEPH CROWLEY, New York
                     Doug Crandall, Staff Director
                 Anne Heissenbuttel, Legislative Staff
                  Jeff Petrich, Minority Chief Counsel




                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held July 13, 1999.......................................     1

Statements of Members:
    Boyd, Hon. Allen, a Representative in Congress from the State 
      of Florida.................................................    29
        Prepared statement of....................................    31
    Hill, Hon. Rick, a Representative in Congress from the State 
      of Montana.................................................    28
        Prepared statement of....................................    28

Statements of witnesses:
    Dennison, William N., Supervisor, District 3, Plumas County, 
      California.................................................   113
        Prepared statement of....................................   125
    Dombeck, Mike, Chief of the U.S. Forest Service..............    49
        Prepared statement of....................................    52
    Douglas, Robert E., Tehema County Superintendent of Schools, 
      Red Bluff, California......................................    55
        Prepared statement of....................................    56
    Green, Bobby, Chairman, Lane County Board of Commissioners, 
      Eugene, Oregon.............................................   103
        Prepared statement of....................................   108
    Spain, Glen, Pacific Coast Federation of Fisherman's 
      Associations...............................................    69
        Prepared statement of....................................    71

Additional material supplied:
    Text of H.R. 1185............................................     2
    Text of H.R. 2389............................................     9

 
  HEARING ON H.R. 2389, COUNTY SCHOOLS REVITALIZATION ACT OF 1999 AND 
         H.R. 1185, TIMBER-DEPENDENT COUNTIES STABILIZATION ACT

                              ----------                              


                         TUESDAY, JULY 13, 1999

              House of Representatives,    
                       Subcommittee on Forests,    
                                 and Forest Health,
                                    Committee on Resources,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2 p.m. in Room 
1334, Longworth House Office Building, Hon. Rick Hill 
presiding.
    Mr. Hill. [presiding] The Subcommittee on Forest and Forest 
Health will come to order. The Subcommittee is meeting today to 
hear testimony on H.R. 1185, the Timber-Dependent Counties 
Stabilization Act, and H.R. 2389, the County Schools 
Revitalization Act of 1999.
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    Mr. Hill. Under rule 4G of the Committee rules, any oral 
opening statements at the hearing are limited to the chairman 
or Ranking Minority Member which will allow us to hear from the 
witnesses sooner and allow Members to keep their schedules. 
Therefore, if any other Members have statements, they can be 
included in the hearing record under unanimous consent.

STATEMENT OF HON. RICK HILL, A REPRESENTATIVE IN CONGRESS FROM 
                      THE STATE OF MONTANA

    Since 1908, counties and school systems adjacent to the 
national forests have received 25 percent of the gross receipts 
from the management of these lands. These payments were 
established to compensate communities for the lack of taxes 
that would have otherwise been generated had the lands been in 
private ownership.
    A similar program compensates counties by 50 percent of the 
gross receipts from the BLM managed O&C lands. The bulk of the 
funds for these two programs came from the sale of Federal 
timber. As the volume of timber sales began to fall on national 
forest and BLM lands in the late 1980s, so did the amount of 
these payments, leaving many rural communities in severe 
economic straits. What is at stake now is the education and 
welfare of our children.
    One approach, offered by Representative DeFazio, H.R. 1185, 
and comparable to the administration proposal would lead to the 
decoupling of payments from receipts. The other approach, H.R. 
2389, maintains a linkage between payments and economic 
activities, recognizing the importance of jobs to local 
communities.
    This second approach was developed by a remarkable 
grassroots coalition of over 500 organizations in 32 States, 
called the National Forest Counties and Schools Coalition. 
Based on a set of principles established by this group, our 
colleagues, Mr. Allen Boyd of Florida, and Nathan Deal of 
Georgia, developed legislation that would create a safety net 
of payments to counties in the short term and at the same time 
create a committee to develop long-term solutions.
    [The prepared statement of Mr. Hill follows:]

  Statement of Hon. Rick Hill, a Representative in Congress from the 
                            State of Montana

    Today's hearing will examine two different legislative 
approaches to resolving the issue of payments to county 
schools.
    Since 1908, counties and school systems adjacent to 
national forests have received 25 percent of the gross receipts 
from the management of these lands. These payments were 
established to compensate communities for the lack of taxes 
that would have otherwise been generated had the lands been in 
private ownership. A similar program compensates counties by 50 
percent of the gross receipts from BLM managed O&C lands. The 
bulk of the funds for these two programs came from the sale of 
Federal timber. As the volume of timber sales began to fall on 
national forest and BLM lands in the late 1980's, so did the 
amount of these payments, leaving many rural communities in 
severe economic straits. What's at stake now is the education 
and welfare of our children.
    One approach, offered by Rep. DeFazio, H.R. 1185, and 
comparable to the Administration proposal would lead to the 
``decoupling'' of payments from receipts. The other approach, 
H.R. 2389, maintains a linkage between payments and economic 
activities, recognizing the importance of jobs to local 
communities. This second approach was developed by a remarkable 
grassroots coalition of over 500 organizations in 32 states, 
called The National Forest Counties and Schools Coalition. 
Based on a set of principles established by this group, our 
colleagues, Mr. Allen Boyd of Florida and Nathan Deal of 
Georgia, developed legislation that would create a safety net 
of payments to counties in the short-term and at the same time 
create a committee to develop long-term solutions.
    To present his bipartisan bill I would like to first 
introduce Allen Boyd for his testimony on H.R. 2389. I would 
also like to thank both he and Mr. Deal for all their hard work 
with the National Forest Counties and Schools Coalition in 
formulating this consensus legislation.

    Mr. Hill. To present his bipartisan bill, I would like to 
first introduce Allen Boyd for his testimony on H.R. 2389. I 
would also like to thank both he and Mr. Deal for all their 
hard work with the National Forest Counties and Schools 
Coalition in formulating this consensus legislation.
    Mr. Hill. The Chairman would now recognize the Ranking 
Minority Member for any statement he might have.
    Mr. Smith. I will save my comments for questions to 
witnesses.
    Mr. Hill. We will introduce Mr. Allen Boyd from Florida. 
You are recognized.

STATEMENT OF HON. ALLEN BOYD, A REPRESENTATIVE IN CONGRESS FROM 
                      THE STATE OF FLORIDA

    Mr. Boyd. Thank you very much, Mr. Chairman and Congressman 
Smith, Ranking Member. First of all I want to thank you, Mr. 
Chairman, and the other members of the Subcommittee for 
allowing me the privilege of testifying before you about H.R. 
2389, the County Schools Funding Revitalization Act of 1999.
    You have a written statement before you, and I want to 
briefly summarize that in a short oral statement and then will 
be glad to take your questions. The issue of forest revenue 
payments by the Federal Government to local affected 
communities is very important to a large portion of the Second 
Congressional District of Florida. The Second Congressional 
District is a very rural district which encompasses 19 counties 
and two national forests, the Apalachicola and the Osceola in 
the Florida panhandle. In fact, I have been working on this 
issue since the time I served in the Florida state legislature. 
I hope that this hearing will serve as a springboard for 
Congress to finally address and solve these issues that 
adversely effect so many communities across this Nation.
    As you stated, Mr. Chairman, in 1908 the Federal Government 
entered into a compact with rural forest communities in which 
the government was the dominant landowner. Under this compact, 
counties received 25 percent of the revenues generated from 
Federal forest lands to compensate them for a diminished tax 
base. By law, these revenues financed public schools and local 
road infrastructure. However, in recent years, the principal 
source of these revenues, Federal timber sales, has been 
sharply curtailed due to changes in Federal forest management 
policy, and those revenues, shared with States and counties 
have declined significantly.
    If you would look at Exhibit 1 which is before you here, 
perhaps the most significant thing about these changes in 
policy is not the decline in harvest but rather the fact that 
in 1998, the net annual growth of timber in the Apalachicola 
National Forest was about 800 percent greater than the volume 
harvested. And the sawtimber growth is approximately 50 times 
greater than the volume harvested. I will say again, the annual 
growth in the Apalachicola National Forest total volume is 8 
times that which was harvested and the sawtimber was 50 times 
that which was harvested.
    As we know, payments to many counties have dropped to less 
than 10 percent of their historic levels under this compact, 
and this impact on rural communities and schools has been 
staggering.
    If you look at the next exhibit, Exhibit 2, the returns to 
the four counties of the Apalachicola National Forest dropped 
89 percent. This decline in sheer revenues has severely 
impacted or crippled educational funding, the quality of 
education provided, and the services offered in those affected 
counties.
    Since my time is limited, I will not detail all of the 
various painful cuts incurred by our counties and schools, but 
I hope that you will read the written testimony which is more 
specific in this area.
    I do want to outline two very specific areas that have 
happened in Liberty County, Florida, which is the county that 
contains more of the Apalachicola National Forest than any 
other.
    First, let us talk about a county obligation and that is 
the county emergency response organization. Liberty County in 
Florida is the only county that does not have an advanced life 
support system for its county emergency response organization. 
That is a basic when you talk about rural counties where 
hospitals in many cases are a hundred miles away. We don't have 
an advanced life support system in that county for its 
citizens.
    The second area and probably the most far reaching and 
devastating impact is the adverse effect on the future of our 
children. When I was in the legislature in the late eighties, 
we established in the State of Florida a prekindergarten 
program which we considered as a very critical part of dealing 
with some of the problems that we had in our schools. That has 
been an enormous success in the State of Florida.
    That program actually was a mandatory program in Florida. 
In the last couple of years as we have done what we call 
accountability decentralization of our educational system, we 
have allowed the local governments to make decisions about 
those kinds of programs. In Liberty County, which was the first 
county in the State to enroll all of its eligible pre-K 
students, the school system in the last 3 years has totally 
eliminated that program. It is really sad. An education system 
crippled by such severe funding cuts cannot train the young 
people in the skills needed to join tomorrow's society as 
contributing, productive, and tax-paying citizens.
    It is very clear to me that the compact of 1908 is broken 
and needs to be fixed immediately. That is why I, along with my 
colleague, Nathan Deal, have introduced the County Schools 
Funding Revitalization Act of 1999. This legislation is based 
on principles that were part of a compromise agreement reached 
by the National Forest Counties and Schools Coalition. It was 
not developed by a Washington knows best top-down approach, but 
rather through a bottom-up approach that has finally reached a 
consensus. This coalition includes over 500 groups from 
approximately 32 States, including school superintendents, 
county commissioners, educators, the National Education 
Association, and the U.S. Chamber of Commerce.
    This bill contains two provisions. First, it would restore 
stability to the 25 percent payment of the compact by ensuring 
a predictable payment level to the Federal forest communities 
for an interim 5-year period. This payment program would be 
based on the average of the three highest payments received by 
a State in fiscal years from 1985 until the time this bill is 
enacted. This is obviously a necessary step to arrest the 
current destructive downward spiral.
    Secondly, the bill requires the Federal Government to 
collaborate with the local communities and school 
representatives as part of the Forest Counties Payment 
Committee to develop a permanent solution that will fix the 
1908 compact for the long term.
    In closing, Mr. Chairman, the Federal Government must 
fulfill the promise made to these communities in 1908. Together 
we can fix the compact and restore long-term stability to our 
rural schools and government and the families that depend on 
them.
    Mr. Chairman, I thank you for the opportunity to come 
before you and am prepared to answer any questions you might 
have.
    [The prepared statement of Mr. Boyd follows:]

  Statement of Hon. Allen Boyd, a Representative in Congress from the 
                            State of Florida

    Madam Chairman, first of all, I want to thank you and the 
other members of this Subcommittee for allowing me the 
privilege of testifying before you about H.R. 2389, the County 
Schools Funding Revitalization Act of 1999. The issue of forest 
revenue payments by the Federal Government to local affected 
communities is very important to a large portion of my 
Congressional district, which is a very rural district that 
encompasses 19 counties in the Florida panhandle. In fact, I 
have been working on this issue since the time I was serving in 
the Florida State Legislature. I hope this hearing is the 
springboard to having Congress finally address and solve this 
issue that affects communities in so many adverse ways.
    The Second Congressional District, which I have the honor 
of representing in the House, is located in the panhandle of 
the state, running from Panama City in the west to the middle 
of the Osceola National Forest in the east. It has the entire 
Apalachicola National Forest within its borders and also 
encompasses part of the Osceola National Forest. The district 
has over 760,000 acres of national forestland.

Background

    In 1908, the Federal Government recognized that counties 
with Federal lands were at an economic disadvantage since the 
Federal Government was the dominant landowner in many of these 
communities and therefore these counties were powerless to tax 
these lands. Recognizing this, Congress entered into a compact 
with rural forest communities in which 25 percent of the 
revenues from National Forests would be paid to the states for 
impacted counties in compensation for their diminished local 
property tax base. By law, these revenues finance rural public 
schools and local road infrastructure. As one can imagine, 
these counties relied heavily on this revenue for education and 
infrastructure.
    However, in recent years, the principal source of these 
revenues, Federal timber sales, has been sharply curtailed due 
to changes in Federal forest management policy, and those 
revenues shared with states and counties have declined 
precipitously. Payments to many counties have dropped to less 
than 10 percent of their historic levels under this compact. 
This impact on rural communities and schools has been 
staggering. The decline in shared revenues has severely 
impacted or crippled educational funding, and the quality of 
education provided, in the affected counties. Many schools have 
been forced to lay off teachers, bus drivers, nurses, and other 
employees; postpone badly needed building repairs and other 
capital expenditures; eliminate lunch programs; and curtail 
extracurricular activities.
    Rural communities have also suffered from severe economic 
downturns causing high unemployment, domestic violence, 
substance abuse, and family dislocation. They are finding it 
difficult to recruit new business and to meet the demands of 
health and social issues associated with the displacement and 
unemployment. Finally, local county budgets have also been 
badly strained that communities have been forced to cut funding 
for social programs and local infrastructure to offset lost 25 
percent payment revenues.
    In 1993, the Congress enacted a law which provided an 
alternative annual safety net payment system for 72 counties in 
the northwest region of the country, where Federal timber sales 
had been restricted or prohibited to protect the northern 
spotted owl. This authority for the 1993 safety net program 
will expire in 2003. No comparable protection has been provided 
for the other 730 counties across the national which receive 
forest payments. An equitable system of payments for all forest 
counties nationwide is needed to protect the ability of these 
counties to provide quality schools and roads and to allow the 
Federal Government to uphold its part of the compact.

A Case Study

    As members, we have all heard about, and many of us 
actually have, counties that have been adversely impacted by 
this compact being broken. I have several in my district, but 
will focus on Liberty County as a example of how the lost 
revenue has affected a large portion of this nation and its 
citizens. This case study shows the various effects that the 
loss of timber revenue from the Apalachicola National Forest 
has had on the children and citizens of Liberty County.
    Liberty County is a rural county with a population of about 
7,000 including 1,300 schoolchildren. That is the smallest 
county population of schoolchildren in the entire state of 
Florida. It has a total land area of 525,000 acres, 97 percent 
of which is forested, with half of that owned by the U.S. 
Forest Service within the Apalachicola. Until recently, the 
forest was the mainstay of a strong local forest product-based 
economy, and through sharing 25 percent of the revenue from 
timber sales, provided substantial support for the local 
schools and government.
    In 1989, the Forest Service began to manage its land in a 
different way, mostly to protect the habitat for the endangered 
red-cockaded woodpecker. It is interesting to note that Liberty 
County has the only recovered population of this bird in the 
world. Perhaps the most significant thing about these changes 
is not the decline in harvest, but rather the fact that in 1998 
the net annual growth of timber on the Apalachicola National 
Forest was about 800 percent greater than the volume harvested. 
The sawtimber growth is approximately 50 times greater than the 
volume harvested.
    The effects of timber harvest reduction on forest revenues 
to the 4 counties and school districts within the Apalachicola 
is that the 25 percent payments have declined in value from a 
1987-93, 5 year average (in 1998 dollars) of $1,905,000 to 
$220,000 in 1998; a loss of 89 percent. Due to this reduction, 
the Liberty County School District was forced to take several 
painful steps. These steps included reducing school staffing by 
11 positions out of a total of 151; increasing the average 
class size from 23 to 28 students; discontinuing the enrichment 
programs in health, computer education, and humanities; 
discontinuing vocational programs in industrial arts, small 
engine repair, and electronics (80 percent of the graduates do 
not attend college); curtailing the school media center; 
eliminating certified art and music teachers from the 
elementary school staffs; reducing the Pre-K program, formerly 
the only program in the state to serve all four-year olds; and 
terminating a new program in technology acquisition, which 
would have placed the county on par with other Florida school 
districts.
    The impacts on county government have also been very 
significant. The County road crew was reduced from 23 to 18 
positions. This staff reduction, plus equipment obsolescence 
and the inability to purchase needed supplies and materials, 
has resulted in the deterioration of the rural road system. In 
1994, the County was forced to float a $1,780,000 bond issue in 
order to meet current road needs. It is unclear how the county 
will meet its future road responsibilities in the absence of a 
substantial increase in the 25 percent payments from timber 
sale receipts. County employees suffered a 10 percent salary 
cut, which was partially restored following the imposition of a 
1 percent local option sales tax and 7 cents per gallon gas 
tax. Finally, the Sheriff's Office and Emergency Medical 
Service have been forced to curtail hours and reduce services. 
As a result of this action, Liberty County remains the only 
county in Florida without an advanced life support system as 
part of the county emergency response organization.
    However, the most far-reaching and devastating impact of 
these declining revenues is the adverse effect on the future of 
our children. An education system crippled by such funding cuts 
cannot train our young people in the skills needed to join 
tomorrow's society as contributing, functioning citizens.

H.R. 2389

    It is clear to me that the compact of 1908 is broken and 
needs to be fixed immediately. That is why I have introduced 
the County Schools Funding Revitalization Act of 1999 with my 
colleague Representative Nathan Deal. This legislation is based 
on principles that were part of a compromise agreement reached 
by the National Forest Counties & Schools Coalition. This bill 
is significant because it was developed not by a ``Washington 
knows best,'' top-down approach, but rather through ``a home-
grown,'' bottom-up approach that has finally reached a 
consensus. This unique coalition includes over 500 groups from 
approximately 32 states including school superintendents 
(including Hal Summers, School Superintendent of Liberty 
County, Florida Schools), county commissioners (including the 
Columbia County, Florida Board of County Commissioners), 
educators, several labor groups, the National Education 
Association and the U.S. Chamber of Commerce.
    H.R. 2389 contains two main provisions. First, it would 
restore stability to the 25 percent payment compact by ensuring 
a predictable payment level to Federal forest communities for 
an interim 5-year period. This temporary five-year payment 
program would be based on the average of the three highest 
payments received by a state in fiscal years from 1985 until 
this bill is enacted. This is obviously a necessary step to 
arrest the current destructive downward spiral. Secondly, the 
bill requires the Federal Government to collaborate with local 
community and school representatives as part of the Forest 
Counties Payment Committee to develop a permanent solution that 
will fix the 1908 compact for the long term.
    There are other options that have been proposed to address 
this problem, from decoupling forest receipt payments from 
forest management activities to legislating or mandating timber 
harvest. My view is that the welfare of schools and county 
governments cannot be artificially disconnected from the 
economic stability and social vitality of rural counties. I do 
not feel that either one of those options is a starter in this 
Congress. However, I truly believe that the consensus 
compromise that H.R. 2389 represents is the one possibility 
that could be passed.
    We, the Federal Government, must fulfill the promise made 
to these communities in 1908. In the part of the country where 
I come from, a man's word is his bond. Together, we can fix the 
compact and restore long-term stability to our rural schools 
and governments and the families that depend on them.
    Again, thank you for allowing me the opportunity to discuss 
the issue of forest timber revenue payments and the solution 
that Representative Deal and I have developed. I stand ready to 
try and answer any questions that my colleagues might have.
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    Mr. Hill. I thank you, Mr. Boyd, for your testimony.
    Before we proceed, I would like to ask for unanimous 
consent for Mr. DeFazio to be able to join us at the dais. 
Without objection, so ordered.
    I want to remind members that Committee rule 3C imposes a 
5-minute limit on questions, and the Chair will recognize 
members for any questions they may have to ask witnesses.
    Mr. Sherwood, you are recognized.
    Mr. DeFazio. Mr. Chairman, is that necessary? I appreciate 
the unanimous consent, but is that necessary for a member of 
the full Committee. I thought members of the full Committee 
could sit on any Subcommittee.
    Mr. Hill. That is what we were told by staff.
    Mr. DeFazio. Thank you, Mr. Chairman.
    Mr. Sherwood. Thank you.
    Mr. Boyd, I am very interested in your first chart that 
showed the cut on the Apalachicola National Forest and the 
growth. I realize that you reemphasize those figures for us, 
but what is your understanding why we find ourselves in that 
position where growth is 800 times harvest; if I understood you 
right?
    Mr. Boyd. Well, that is a very good question, an 
appropriate question. I think you need to understand a little 
bit about the history of the Apalachicola National Forest. The 
forest was purchased by the Federal Government probably back in 
the 1930s. It was actually cut over when the Federal Government 
purchased it, and the United States Forest Service and the 
government has done a great job in reestablishing the forest. I 
know Mr. Dombeck is here and can give us more of the specific 
dates.
    But what has happened over the last few years is there is 
the red-cockaded woodpecker population in the Apalachicola 
National Forest, and I might say that we have the only 
recovered population of RCW in the world and probably the 
largest population in one spot of RCW anywhere in the world.
    The point that I would make is that this RCW population has 
actually thrived over the years with the cutting practices that 
we were using back in the eighties; but somehow or another the 
Forest Service policy changed in the early 1990s and our 
cutting has gone to almost zero. As a result, our county and 
schools don't get any revenue off of it. I hope that answers 
your question.
    Mr. Sherwood. Where did you get your timber volume figures?
    Mr. Boyd. They came from the Southeast Forest Experiment 
Station Resource Bulletin.
    Mr. Sherwood. When did the policy change? It looks like it 
maybe is 1991 or 1992?
    Mr. Boyd. You can see the graph shows after 1989, you 
started a downward decline that hit rock bottom in 1995. You 
actually see--the sawtimber volume is indicated by the dark 
portion of each bar. The pulptimber, that is the total cutting 
on each--the total cutting for the forest.
    Mr. Sherwood. What is the rotation, pulpwood, you need 
about 35 years?
    Mr. Boyd. We need much less. We can cut out pulpwood in 
those areas of Florida, if you cut on a 25 to 30 year rotation, 
you actually get a good amount of saw timber. We understand 
that we have some other objectives in the national forest.
    Mr. Sherwood. We are so used to talking about western 
forests in this Committee where it is dry, and timber does not 
grow that fast.
    Mr. Boyd. That is not the case here.
    Mr. Sherwood. That is what I wanted to establish. I will 
reserve the rest of my questions until after the chief talks to 
us.
    Mr. Hill. I thank the gentleman, and the Chair recognizes 
Mr. Smith.
    Mr. Smith. One question on the decoupling issue. Can you 
explain where you are coming from on that? Obviously the one 
side of the argument is since timber harvest has been so 
unpredictable in recent years that tying a significant portion 
of the local community's budget to that is a questionable 
policy, even though the original policy of making sure that 
they were compensated for the fact that this land was put in 
Federal hands is sound and is necessary. Wouldn't it make sense 
to find some more secure and stable amount of funding to make 
up for that instead of having it tied in to the timber sales, 
which as I understand it, you built some things along the lines 
of stability but doesn't go to full decoupling.
    Mr. Boyd. I think that is correct. The reason that the 
coalition did not come up with a recommendation to go to 
decoupling is that the administration has made that 
recommendation for 2 or 3 years in a row and I don't know that 
a bill has ever been introduced, certainly I don't believe one 
has ever had a hearing and moved. Mr. DeFazio can speak greater 
to that than I can because I think he has a piece of 
legislation which basically does that.
    But our goal here was to stabilize the situation for the 5-
year term, put in place this advisory committee which would be 
made up of seven people as a cross-section of the interested 
parties here and have them make a recommendation back to 
Congress as to how we fix this long term.
    Mr. Smith. Thank you.
    Mr. Hill. The Chair would recognize Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman.
    In clarification, the administration has proposed this as I 
understand it twice now. This is the second budget cycle in 
which they have proposed it.
    My bill, just to correct the record, both the staff memo 
and the gentleman's perception, gives a one-time option 5 years 
out which is after the next regularly scheduled forest planning 
process at which point I think we would have a good handle on 
what future harvests might or might not yield and whether 
counties and schools would be better linking themselves to 
revenue sharing or to guaranteed payment.
    But my question goes to the issue of where the money comes 
from under the gentleman's bill. It appears to me that the 
money if it is not adequate in--is going to come out of the 
Forest Service appropriations, is that where some of the money 
might come from?
    Mr. Boyd. Congressman DeFazio, what the bill--this bill 
anticipates is that is a decision that would be made by the 
Forest Service. There was a 1908 compact made between the 
Federal Government and the local communities, and the Forest 
Service had the responsibility for implementing that compact.
    The Forest Service has changed its management policy in the 
last 6 to 7 years in such a way that the compact has been 
rendered essentially useless and so we felt like the Forest 
Service should make the decision about those issues, about 
where the funding comes from since it was their policy changes 
that got us there. Of course we stand ready to work with the 
Forest Service in any way that we can to make it happen.
    Mr. DeFazio. Just to disagree slightly with the gentleman, 
we make policy, not the Forest Service. The Forest Service 
implements policy. That is a little bit of my frustration with 
the approach, which is to say if the agency cannot deliver on 
higher harvests, which are precluded by law as established by 
Congress, then it will have to come out of their budget, 
further crippling an agency which doesn't have enough money to 
perform its mission, whether the mission is to provide benefits 
to the counties or recreational benefits or other multiple-use 
benefits. I don't believe the Forest Service has enough money.
    So I am concerned that it would appear that we are going to 
penalize the agency which is implementing the policies which we 
have established, and this has been my argument with the 
counties coalition. If we want to have a debate on forest 
policy, the Chairman could start that debate tomorrow on 
legislation to change the underlying laws and policies that are 
under the jurisdiction of this Committee that goes to the level 
of harvest and mandate high levels of harvest. But instead we 
are having this sort of back door way of penalizing the agency 
which really can't do--doesn't have the flexibility.
    In my case, in my region the changes came about because of 
litigation after the Forest Service had drug its feet for 
years, and they were totally wiped out in the courts. The 
timber harvest went to zero, and subsequently changes were made 
that restored some harvest. But I guess the point is maybe it 
should come out of Congress's budget.
    Mr. Boyd. I certainly don't want you to inaccurately 
characterize what the legislation does because I think it 
speaks clearly for itself.
    You have been here certainly longer than I have and 
probably understand these issues a great deal better than I do 
because you have been involved with them. I don't know of any 
specific legislation that has come out of this Congress which 
has mandated, since 1990, reduced cutting. But I am sure as a 
result of certain policies that came out, the Forest Service 
took it upon themselves to change their management policy and I 
certainly understand that part.
    That is why we have set up what we think is a reasonable 5-
year temporary fix and put together the advisory committee to 
help us develop a long-term solution. The alternative is to 
bury our heads in the sand and go along like we have. And in 
the meantime, we continue to have these funding problems in our 
schools and with our local governments down there.
    I want you to know, Mr. DeFazio, I stand ready to work with 
anybody. I have been hollering and screaming about this issue 
for several years, even before I got into Congress. I don't 
know exactly how to answer your question except to say that it 
is the Forest Service management policy that has changed over 
the last few years that has reduced the revenues to our local 
governments.
    Mr. DeFazio. To whom does the committee make the 
recommendation for changes in policy?
    Mr. Boyd. To the U.S. Congress.
    Mr. DeFazio. That goes back to the point that I made. The 
changes in forest policy management do go to a whole host of 
Federal environmental laws and court precedents that have been 
set. And if this Congress wants to mandate higher harvest 
levels, we can do that, which means that there are underlying 
policies that were created by laws by the Congress that have 
driven the management by the Forest Service.
    I mean, yes, there is a little bit of wiggle room, but 
under the last administration that wanted to harvest a lot more 
timber in the Pacific northwest than the law apparently allows, 
the courts just enjoined them. I think you might find in your 
forest if they try to ignore the red-cockaded woodpecker or 
other mutiple-use concerns and endangered species concerns, 
whatever your concerns are in your forest, you might end up 
under an injunction that wipes out that whole little bar that 
you have left there. I am not sure that we are--I agree on your 
basic premise. And the hurt and pain, I have seen it. The 
amount of timber that you harvested at the maximum was the 
amount of timber harvested in the smallest ranger districts in 
my region, and so I understand the pain. I am sympathetic, but 
I want to keep my eye on the ball and that is the money.
    Mr. Boyd. If I might because when Mr. DeFazio asked the 
last question, he asked it in such a way maybe I didn't answer 
it correctly. You said who the advisory committee makes the 
recommendations to about the policy changes. We are not--we 
don't ask the advisory committee to make recommendations about 
policy changes. We ask them to make recommendations about how 
to solve this problem. I want to make that very clear. I can 
see if you thought that the advisory committee was going to be 
advising the Forest Service about how to do its cutting, that 
is not what we asked them to do. We are asking them to make 
recommendations to the U.S. Congress about how to solve this 
problem so that the Federal Government can keep its compact 
with the local communities that it established in 1908.
    Mr. Hill. I thank the gentleman. Carrying on with that same 
topic, we can't pass a decoupling bill or targeted timber 
harvest bill in this Congress. This is an effort to compromise 
those two positions and come up with something that we can move 
forward with.
    Mr. Boyd. You said it better than I could, Mr. Chairman.
    Mr. Hill. Thank you very much.
    The issue here is bigger than just the funding of schools 
and counties. One of our goals here is stable economies and 
stable communities. Isn't that one of the objectives of this 
bill?
    Mr. Boyd. That is correct. I didn't talk about that because 
there are several impacts on local communities. One is on your 
school system and another is on your local county government 
and both of those have to do with tax issues. The third impact 
is on the economy and many of these communities rely heavily on 
the forest or timber industry as the backbone of their economy, 
which has been ripped away from them. We are not sure that we 
will solve all of those questions over the years, but at least 
we ought to make an effort as to how we can help solve this 
funding problem with the school systems and local governments.
    Mr. Hill. And this is consensus legislation. It is 
bipartisan and a broad spectrum of different groups that are 
supporting it; isn't that correct?
    Mr. Boyd. That is correct. You have people all of the way 
from the National Educational Association to the U.S. Chamber 
of Commerce and labor groups. I think that is about as much 
consensus as you can get.
    Mr. Hill. Are you aware of any coalition that is supporting 
Mr. DeFazio's bill or the administration's proposal with regard 
to decoupling?
    Mr. Boyd. I am not. That does not mean that there is not 
somebody out there supporting it, it just means that I am not 
aware of it.
    Mr. Hill. Let's go back to the issue of decoupling. I 
happen to agree with your feelings about decoupling. I have a 
couple of examples, more than a few examples, where there are 
decoupled payments from the Federal Government. The most common 
is Indian reservations where we have impact aid and other 
payments. The point is that they don't have sustained 
economies. They don't have stable economies. Would you just 
address this issue of decoupling; why decoupling is a mistake 
in your view?
    Mr. Boyd. Well, I believe there is always a chance, 
particularly in some of the things that we have seen happen in 
the U.S. Congress in the last few years, that if the issue 
becomes decoupled, then it becomes an easy appropriation to 
just let go away eventually. So that is one of the reasons.
    The other reason is because even though the administration 
has proposed it now for two budget cycles, it has not caught on 
with anybody. We were looking for something that might be able 
to give us a short-term fix again and establish a committee 
that will make some long-term recommendations on solutions.
    Mr. Hill. One last question. If there is one important 
point that you want this Subcommittee to keep in mind, what is 
it do you think that the Subcommittee should remember from this 
hearing?
    Mr. Boyd. I think that in Liberty County, Apalachicola 
National Forest, in the mid-eighties, this school system got 
almost $2 million out of this program which was a very 
important, significant part of its funding for children. And 
that was in exchange for the Federal Government owning land and 
diminishing the tax base which would be the normal revenue base 
for the schooling.
    Now that has gone to 10 percent of that number, and our 
class sizes have increased from 23 up to 28. We have had to lay 
off teachers and bus drivers. We have obsolete equipment. We 
have done away with our pre-K program. Those are significant 
issues. It is affecting the education of our children in that 
community.
    Mr. Hill. I thank you very much, and I thank you for your 
excellent testimony. If there are no other questions, you are 
excused.
    Mr. Boyd. Thank you, Mr. Chairman, and Members.
    Mr. Hill. I would like to introduce our next panel, Mr. 
Mike Dombeck, Chief of the U.S. Forest Service; Mr. Bob 
Douglas, Tehema County Superintendent of Schools, Red Bluff, 
California; Mr. Glen Spain, Pacific Coast Federation of 
Fisherman's Associations; Mr. Bobby Green, Chairman, Lane 
County Board of Commissioners, Eugene, Oregon; and Mr. William 
N. Dennison, Plumas County Supervisor, District 3, Chester, 
California.
    The Chairman will recognize Mr. Dombeck.

  STATEMENT OF MIKE DOMBECK, CHIEF OF THE U.S. FOREST SERVICE

    Mr. Dombeck. Thank you, Mr. Chairman. It is always an honor 
to appear before this Committee, and today our topic is to 
testify on the Timber-Dependent Counties Stabilization Act of 
1999 and the County Schools Funding Revitalization Act of 1999 
and to discuss the Department's proposal on this same topic, 
and I would like to introduce Associate Deputy Chief Sandra Key 
who is here with me as a technical expert and knows all of the 
numbers.
    I will talk about the Department's proposal first. As you 
are aware, the proposal which we have submitted for a second 
year really focuses on a number of things. Number one, to 
provide stability and predictability to counties. I think I am 
struck when I heard just the statements of Congressman Boyd and 
the questions of how much--how many common goals we have in 
this effort. Predictability and stability are those, and the 
fact is that social services and schools, roads are very 
important. And I am one that grew up on a national forest and 
attended one of those schools in one of those districts, so I 
am somewhat familiar with it.
    Our second objective is to provide reasonable payments to 
compensate counties for national forest lands that are not 
available for the local tax base.
    A third objective is mandatory permanent payments not 
subject to annual appropriation, not subject to the 
unpredictability that county commissioners and others deal 
with; and perhaps the last issue that there is some concern 
over, and that is the connection between controversial timber 
sales to critically important local services and how we can 
avoid some of the instability from litigation injunctions and 
things like that that are really out of the control of the 
Congress and the Forest Service.
    Let's talk about the stability issue first. I have a graph 
that really points out the trends.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T9858.037
    
    Mr. Dombeck. As we move to the right, what we see is a 36 
percent reduction from 1989 to the present. And if the safety 
net had not been put into place for the O&C counties and the 
west side counties in Oregon, the slope of that curve would be 
even significantly further down from where it is right there. 
As you see, our projections of where payments to counties, 
where we would predict that they would go based on the 
information that we have are also listed there and then the 
squares across the top indicate some sort of stability that our 
proposal provides, and we think that is a real important 
objective.
    Secondly, I just want to reaffirm the commitment of the 
Forest Service to providing some level of payment to the 
counties understanding that in many cases there are large 
portions of the tax base that are not available because of the 
national forest lands that are there. The children of the 
Forest Service employees go to these same schools, use the same 
roads as other residents in those communities. The concern 
about the unpredictability of the appropriations process, to 
fund to the authorized levels, I know are concerns here; and 
that is why we feel some sort of mandatory payment is 
important. We have a permanent mandatory appropriation now on 
the 25 percent fund, so really what we are looking at there is 
no change to make this a permanent fund because it is already a 
permanent fund. It is already mandatory.
    Lastly, the distinction between a social services, a moral 
imperative for our children's education, do we really want to 
tie that to controversial issues like timber sales where we 
know the controversies are looming, and how can we move away 
from that. It is my belief that tightening the connection will 
further inflame the controversy rather than make it easier.
    The fact is should education issues be driving national 
resource decisions? Wouldn't they be better dealt with as 
education issues and as funding issues rather than mixing the 
two in an already fairly complex situation because the fact is 
that resource management has been controversial since the days 
of Gifford Pinchot and will continue to be controversial 
because of the simple fact that as our country grows, there is 
not enough for everyone to have all of what they want. And so 
we have to share, and the real debate is about balance as much 
as anything else.
    With regard to the County Schools Funding Revitalization 
Act, I think there is a lot of agreement there. However, we 
strongly oppose that piece of legislation for a couple of 
reasons. Number one, it doesn't provide long-term stability 
beyond 5 years.
    Secondly, the funding provisions for the payments could 
create significant impacts on Forest Service programs like 
recreation, fish and wildlife programs because of the 
provisions there, and it doesn't separate payments from 
controversial issues like timber sales. And we are also 
concerned about the establishment of another committee since we 
already have congressional concerns over the complexity of 
legislation and issues that really play into Forest Service 
policies.
    With regard to Mr. DeFazio's bill, we see a lot of 
commonality there and think that through some amendments we 
could really move forward with that. The issue of stability is 
important. The issue that I am somewhat concerned about and I 
am happy to enter into a dialogue on, we know what the problems 
are today so why would we wait 5 years to put a decision off. 
At any rate, I think it is important that these issues are 
being discussed here today, and I am happy to answer any 
questions you have after the panel has made its statements.
    Mr. Hill. Thank you Chief Dombeck for your testimony.
    [The prepared statement of Mr. Dombeck follows:]

    Statement of Mike Dombeck, Chief, Forest Service, United States 
                       Department of Agriculture

    Thank you for your invitation to testify on H.R. 1185, 
``Timber-Dependent Counties Stabilization Act of 1999,'' and 
H.R. 2389, ``County Schools Funding Revitalization Act of 
1999.'' I appreciate the opportunity to join you today to 
continue the dialogue that the Administration began last year 
on the need to provide a stable, permanent level of payments, 
commonly known as the twenty-five percent fund, and to separate 
the payments from National Forests receipts. With me this 
afternoon is Sandra Key, Associate Deputy Chief, Programs and 
Legislation from the Forest Service.
    As you are aware the Department of Agriculture has also 
submitted to Congress proposed legislative language that would 
make payments to states permanent and at an increased level 
over what is forecasted with the twenty-five percent fund 
payments.

Department's proposal, ``The Stabilization Act of 1999.''

    The Department's proposal will:

        (1) provide a stable, predictable payment that counties can 
        depend on to help fund education and maintenance of roads,
        (2) provide increased payments above the payments projected 
        under current law to compensate states for National Forest 
        lands that are not available to the local tax base,
        (3) provide a mandatory, permanent payment not subject to the 
        annual appropriation process, and
        (4) sever the connection between timber sales and critically 
        important local services.
    First, we need to provide a stable, predictable payment that 
counties can depend on to help fund education and road maintenance. 
Under 16 U.S.C. 500, (commonly known as the twenty-five percent fund), 
twenty-five percent of most Forest Service receipts are paid to the 
states for distribution to the counties in which National Forest lands 
are located for financing public roads and schools. Historically, the 
primary source of National Forest receipts has been from the sale of 
timber on National Forests. Over the past 10 years, timber harvest from 
National Forests has declined 70 percent in response to new scientific 
information, changing social values, and our evolving understanding of 
how to manage sustainable ecosystems. During that same period, payments 
to states made under 16 U.S.C. 500 have been reduced 36 percent; from 
$361 million in 1989 to $228 million in 1998.
    Under the Department's proposal, states will receive the higher of 
the 1998 fiscal year payment or a new special payment amount. The 
special payment amount will be 76 percent of the average of the 3 
highest payments made to the state during the 10 year period from 
fiscal years (FY) 1986 through 1995 of both twenty-five percent fund 
payments and payments under section 13982 of the Omnibus Budget 
Reconciliation Act of 1991 The special payment amount will not exceed 
the 1998 FY payment by more than 25 percent. The special payment amount 
will pay the states approximately $269 million annually, representing 
an additional $27 million above the existing baseline in FY 2000, $72 
million in FY 2004, and $259 million more over the next five years.
    The special payment is modeled on the formula used in what was 
referred to as the ``owl county safety-net'' adopted by Congress in 
1990 as a provision of the Interior and Related Agencies Appropriations 
Act. The provision was adopted at the request of certain counties in 
western Washington, Oregon, and northern California affected by 
decisions relating to the Northern Spotted Owl. It was renewed annually 
until 1993 when Congress authorized a 10 year, gradually declining, 
payment stabilization formula which will expire in 2003. We chose 76 
percent of the historic baseline because that was the level of the owl 
county safety-net payment guarantee when the Administration first 
proposed to stabilize payments over a year and a half ago.
    Second, we want to provide a reasonable payment, based on all 
benefits of National Forest lands, to compensate states for these lands 
that are not available to the local tax base. Historically, states 
received payments based on revenues generated from commodity 
extraction, primarily timber. For a variety of reasons, including new 
scientific information about the sustainability of our resources, 
commodity extraction from our National Forests has been reduced. 
National Forests continue to provide a myriad of benefits to local 
communities--jobs, income generation, recreation and tourism, timber 
and mining, hunting and fishing and so on. Payments made through the 
payments in lieu of taxes program are often not appropriated to their 
fully authorized levels, creating difficulties for counties with a 
limited tax base due the presence of public lands. Our proposal ensures 
that states continue to benefit from both the intrinsic and economic 
value of public lands by guaranteeing a payment to make planning and 
budgeting predictable for counties. Thus, we propose that states 
receive a permanent, stable annual payment based upon a percentage of 
historic payment averages.
    Third, the payment needs to be excluded from the annual 
appropriation process. We cannot rely on either revenues or the annual 
appropriation process to produce a consistent, reliable level of 
funding. The Department's proposal will provide a mandatory, permanent 
payment to states from the general fund of the Treasury.
    Fourth, we must make distinct and separate the social and moral 
imperative of cildren's education from the manner that public forests 
are managed. Both activities, children's education and forest 
management, are essential but continuing to link the two activities 
together could continue to reduce funding for children's basic 
education needs.
    There has been resistance to this proposal. In part, the resistance 
may stem from a belief that timber harvest levels will rise 
dramatically again in the future. This belief is mistaken: (1) timber 
harvest has steadily declined over the past decade, and (2) in FY 1999 
and FY 2000, the Administration and both Houses of Congress each 
proposed as part of the appropriations process timber offer levels that 
were below 4 billion board feet, including salvage opportunities. It is 
highly unlikely that timber harvest levels will return to the 11 
billion board feet volume of the early 1990s.
    Continuing the connection--or tightening it as one of the two 
congressional proposals before us today would do--will only serve to 
ensure that payments to states will continue to be tied to 
controversial forest management issues.
    Separating payments to states from the receipts generated from the 
sale of commodities and user fees will allow for a stable, reliable 
increased level of funding for the states and counties.

H.R. 1185, ``Timber-Dependent Counties Stabilization Act of 1999''

    The Administration supports the objectives of H.R. 1185, but will 
seek amendments to more closely align this bill with the Department's 
proposal. For FY 2000 through FY 20004, this legislation will provide 
stable payments to states based on an amount equal to 76 percent of the 
average of the 3 highest twenty-five percent payments made to the state 
during the 10 year period from fiscal years 1986 through 1995 (special 
payment amount).
    In addition, the bill would provide that after FY 2004 each state 
will make a one time permanent, binding choice of receiving either the 
twenty-five percent payment or the special payment amount. This will 
give states the option to have a permanent, stable payment, not based 
on revenue generation, or to continue with the decreasing, 
unpredictable twenty-five percent fund payments. While this is 
definitely a step in the right direction, it simply puts off decisions 
which can and should be made today. The Department prefers to ensure 
that all states receive a permanent stable payment as is provided in 
the Department's proposal.
    This legislation also provides for the special payment amount to be 
adjusted to reflect changes in the consumer price index for urban uses. 
The Department's proposal does not reflect changes in the consumer 
price index, but we are willing to work with the Subcommittee to 
discuss the additional funding that this will require.

H.R. 2389, ``County Schools Funding Revitalization Act of 1999''

    Again the Department agrees with one of the objectives of H.R. 
2389, that is to stabilize payments, but strongly oppose this bill for 
the following reasons: (1) it does not provide a stable payment past 5 
years nor does it provide for a mandatory payment to states from the 
general fund of the Treasury, (2) the funding provisions for FY 2000-
2005 payments could create significant impacts on Forest Service 
programs and (3) it does not separate payments to states from the 
contentious, controversial debate over natural resource management of 
the National Forests, but only fuels this debate by establishing an 
advisory committee to address issues concerning management of our 
National Forests.
    First, H.R. 2389 would only temporarily stabilize payments to 
states for a five year period beginning in FY 2000. Under this bill, 
the short-term payments for fiscal years 2000 through 2005 would be the 
twenty-five percent fund payment for the fiscal year or the full 
payment amount, whichever is greater. The full payment amount would be 
equal to the average of the three highest twenty-five percent fund 
payments or the owl county safety-net payment during FY 1986 through FY 
1999. This formula would yield a payment that is over $170 million more 
than the $269 million that is available for the Department's proposal. 
Since current payment levels equal $227 million for FY 2000, falling 
harvests would need to double in order to fund the higher payments to 
state levels, or the Forest Service will have to significantly reduce 
non-revenue producing programs. In addition, after 5 years this issue 
will have to be addressed again. Assuming this issue will not be easier 
to resolve, then payments to states will return to the twenty-five 
percent fund payments resulting in a significant reduction in funding 
for education and roads.
    Second, under the Department's proposal, payments to states will be 
made automatically from the general fund of the Treasury and will not 
be subject to the annual appropriation process. In contrast, H.R. 2389 
will fund the difference between the twenty-five percent fund payment 
amount and the full payment amount from revenues received from 
activities on National Forest lands and funds appropriated for the 
Forest Service. Forest Service appropriations that fund programs 
generating revenues for the twenty-five percent fund, and funds from 
trust funds or other special accounts established by statute for 
specified uses will not be eligible to fund this difference. Under this 
provision, in FY 2000 the Appropriations Committees will have to either 
increase Forest Service funding or divert over $170 million from Forest 
Service programs such as fire suppression, watershed improvement, 
wilderness, wildlife and fisheries that do not generate revenue. This 
is neither tenable nor appropriate.
    Third, H.R. 2389 will fail to separate payments to states from the 
debate over the management of National Forest lands. In fact, the bill 
would only fuel this debate by continuing to make the payment amount 
dependent on decisions relating to natural resources management. Most 
significantly, the bill would establish an advisory committee charged 
with developing recommendations for a long term method for generating 
payments at or above the full payments amount. The advisory committee 
will be required to ``seek to maximize the amount of . . . revenues 
collected from Federal lands'' and to ``ensure that this method is in 
accord with a definition of sustainable forest management in which 
ecological, economic and social factors are accorded equal 
consideration in the management of the Federal lands.''
    The concept of maximizing revenues collected from National Forests 
is a fundamental change in Forest Service policy and direction. There 
is nothing in the Organic Act or National Forest Management Act (NFMA) 
that requires optimization of revenues. For the last 30 years, Congress 
has declined emphasizing economic return over natural resource 
management needs. To do so now is a major reversal to long-standing, 
carefully hammered out policy. NFMA certainly recognizes the important 
contributions of economic products from the National Forests, but it 
also recognizes that such production should be within the ecologically 
sustainable limits that also preserves our children's economic future.
    We strongly believe that payments to states for the purposes of 
funding schools and roads should not be thrust into the middle of the 
debate over the appropriate management of our natural resources.

Closing

    Since 1908, the twenty-five percent fund has worked well to provide 
funding for local schools and roads. But as demands on our National 
Forests have increased and timber harvest has declined we need to 
provide a stable, permanent mechanism for making payments to states.
    Madam Chairman, the Department supports the objectives of H.R. 
1185, but we prefer a complete separation between the payments to 
states and revenue generation from National Forests. The Department 
strongly opposes H.R. 2389 because it neither provides a permanent 
stable payment to states nor separates payments to states from the 
controversial debate over management of our National Forests. We 
recommend that you consider our proposal to provide a permanent, 
predictable payment that states can depend on to help fund schools and 
roads. We would be pleased to work with the Subcommittee to pursue 
options that might meet our respective goals.
    This concludes my statement; I would be happy to answer any 
questions you and the Members of the Subcommittee might have.

    Mr. Hill. Mr. Douglas, you are recognized.

STATEMENT OF ROBERT E. DOUGLAS, TEHEMA COUNTY SUPERINTENDENT OF 
                 SCHOOLS, RED BLUFF, CALIFORNIA

    Mr. Douglas. Thank you for the opportunity to testify in 
support of H.R. 2389. The bill is based upon the National 
Forest Counties and Schools Coalition principles, as you 
mentioned. Our coalition is a rapidly growing collaborative of 
500 organizations from now 35 States. Our office administers 
the coalition, and I serve as the chief administrative officer.
    Mr. Chairman, I would like to enter into the record a list 
of the organizations which support the coalition.
    Mr. Hill. Without objection.
    Mr. Douglas. Our organization has grown very rapidly since 
founded in March 1999, primarily because the citizens of the 
800 forest counties in America, all of whom are represented in 
one way or another by the organizations in our coalition are 
having a common experience. As a group these counties are 
enduring economic instability as a result of the deep decline 
in resource-based activities on Federal forest lands, they are 
experiencing devastating social disruption and decimated public 
school and county services.
    Nationally, U.S. Forest receipts have declined 
precipitously since 1989. In 70 forest counties which are 
protected by the Northwest Forest Plan, the declines have been 
in the 21 to 24 percent range to date. However, in the 730 
forest counties not protected in the Northwest Plan, the 
declines in receipts have ranged from 75 to 90 percent as 
Congressman Boyd noted.
    Public schools and county governments have, out of 
necessity, slashed programs and services. Five to ten years of 
steeply declining receipts have literally eviscerated the 
breadth and quality of school and county services in most of 
these counties.
    In an urban or suburban setting, the vast majority of 
property is private or industrial, and it is possible to offset 
these losses in revenues through a variety of taxes or 
assessments.
    In forest counties where 50 to 96 percent of the land is 
nontaxable Federal forest land, this possibility simply does 
not exist. This fact was recognized by the Congress and the 
founders of our Federal Forest System almost a hundred years 
ago when huge blocks of land were set aside to form our 
national forest reserves.
    When we removed those lands from private ownership, revenue 
production and local tax generation, the counties of America 
protested the impact on public service support. Gifford 
Pinchot, Congress, and the President agreed that 25 percent of 
the annual revenue from management of those lands would be 
given to schools and counties as mitigation for the effects of 
land removal.
    This was a compact with the people of rural counties. These 
funds have been for almost a hundred years a mainstay of 
support for forest counties and schools. We honored that 
compact until the late 1980s when by agency policy, 
administration regulation and injunction, the active management 
of our forest system was severely restricted. The historic 
compact with the people of forest counties has been broken and 
disregarded for almost a decade.
    For these reasons, we propose H.R. 2389 which is a two-
phased resolution to revitalize county and school support. It 
proposes a short-term safety net for forest counties designed 
to protect public schools and county services over the next 5 
years. Given the economic and social deterioration in these 
counties, it is absolutely essential that we revitalize and 
stabilize their infrastructures.
    Second, in order to address the larger and more significant 
systemic problem, which includes not just school and county 
government support but also the economic and social health of 
our communities and the health and sustained multiple use of 
our Federal forest lands, we are proposing the creation of a 
national committee appointed by Congress to develop recommended 
legislation and/or policy revisions, a focused national 
conversation over the next 5 years devoted to defining a long-
term solution to our Federal forest management practices. And 
the resultant effects upon long-term sustainable health, 
community and social stability, and the vitality and 
effectiveness of school and county infrastructures is 
critically needed in our country. In the meantime, the current 
laws regarding the payments to States should remain untouched.
    Our bill provides such a mechanism. This is a systemic 
problem, and it must be solved with a systemic solution. We 
believe that the Forest Service and the Bureau of Land 
Management must continue to have incentives to actively manage 
Federal forests for the production of materials for our Nation 
to generate resources for the Treasury and payments to counties 
and schools and also be diligent about the active healthy 
management of our national forests.
    We strongly believe that payments to counties and schools 
unconnected from corollary improvement in economic self-
determination and improved social conditions will not work. 
Neither will payments to counties work, which are unconnected 
to incentives to actively manage, on a sustained basis, the 
dominant economic asset in forest counties, the forest land 
itself.
    All of these factors are connected parts of an ecological 
and social system and any long-term solution must achieve a 
balance between these factors. Forest Counties and Schools 
Coalition urges your support of H.R. 2389. It meets the 
immediate and critical needs of forest counties and schools 
while providing a blueprint for the construction of a long-term 
solution to our current forest management gridlock and its 
attendant consequences.
    Thank you very much, Mr. Chairman.
    Mr. Hill. I thank you, Mr. Douglas.
    [The prepared statement of Mr. Douglas follows:]

    Statement of Bob Douglas, National Forest Counties and Schools 
                               Coalition

    Thank you for the opportunity to provide testimony in 
support of H.R. 2389. This bill is based upon and reflects the 
principles upon which the National Forest Counties and Schools 
Coalition is based (see Appendix A). The National Forest 
Counties and Schools Coalition is a rapidly growing 
collaborative of over 500 organizations from 32 states. My 
office currently administers the Coalition and I serve as the 
Chief Administrative Officer.
    Mr. Chairman, I would like to enter into the record, a list 
of those organizations which support the National Forest 
Counties and Schools Coalition Principles and this legislation. 
Our organization has grown very rapidly since it was founded in 
March 1999. This is primarily due to the fact that the citizens 
in our eight hundred (800) forest counties in America, all of 
whom are represented by organizations in our Coalition, are 
having a common experience. As forest related communities, they 
are all enduring economic instability as a result of the 
precipitous decline in resource based activities on Federal 
forest lands, devastating social disruption, and decimated 
public school and county services.
    Nationally, U.S. Forest Reserve receipts have declined by 
65 percent since 1989, (See Appendix B). In the seventy (70) 
forest counties which are protected by the Northwest Forest 
Plan, the declines have been approximately 21 percent to date. 
However, in our 730 forest counties not protected in the 
Northwest Plan, the declines in receipts have ranged from 75-90 
percent (See Appendix C).
    Public schools and county governments have, out of 
necessity, slashed programs and services. Five to ten years of 
steeply declining receipts have literally eviscerated the 
breadth and quality of school and county services in most of 
these counties.
    In an urban or suburban setting, wherein, the vast majority 
of property is private or industrial, it is possible to raise 
offsetting revenues through a variety of local taxes and/or 
assessments. In forest counties where 50-96 percent of the land 
is non-taxable Federal forest land, this possibility simply 
does not exist. Given the exceptionally small non-Federal land 
base, it is impossible to locally offset the loss of Forest 
Reserve or O & C BLM receipts.
    This fact was recognized by the Congress and the Founders 
of our Federal forest system. Almost one hundred years ago when 
our National Forest system was formed, huge blocks of land were 
set aside to be Federal Forest Reserves. These lands were 
removed from the possibility of private ownership, revenue 
production, and local tax generation for county government and 
schools. Not surprising, there was a hue and cry from forest 
counties nationwide about the local economic impact. Gifford 
Pinchot, Congress, and the President agreed that 25 percent of 
the annual revenue from the management of these Federal forest 
lands would be given to schools and counties as mitigation for 
the effects of this land removal.
    This was a ``Compact With The People of Our Rural Forest 
Counties.'' These funds have been, for almost 100 years, a 
mainstay of support for rural schools and counties. The Compact 
was honored and protected until the late 1980's, when by 
Federal agency policy, administrative regulation, and 
injunction, the active management of our National Forest System 
was severely restricted. During the last decade, this historic 
Compact with the People of our forest counties has been broken 
and disregarded.
    For these reasons, H.R. 2389 proposes a two-phase solution 
to revitalize county and school support. First, it proposes a 
short-term safety-net for our forest counties designed to 
protect public schools and county services over the next five 
years. Given the economic and social deterioration in these 
counties, it is absolutely essential that we revitalize and 
stabilize their infrastructures. Second, in order to address 
the larger and more significant systemic problem, which 
includes, not just school and county government support, but 
also the economic and social health of our communities, and the 
health and sustained multiple use of our Federal forest lands, 
we are proposing the creation of a National Committee appointed 
by Congress to develop recommended legislation and/or policy 
revisions. These recommendations will emphasize increasing 
receipt generation, minimizing adverse budget impacts, 
promoting economic benefits to schools and counties, while 
simultaneously ensuring healthy, long-term sustained use of our 
National Forest lands.
    We strongly believe that these recommendations can and 
should be formulated during the first three years of the 
safety-net and then submitted to the Administration and 
Congress for their consideration. It is further our belief that 
these recommendations should be enacted into law within two 
years of their receipt by Congress.
    A focused national conversation devoted to defining a long-
term solution to our Federal forest management practices and 
their resultant effects upon long-term sustainable forest 
health, community economic and social stability, and the 
vitality and effectiveness of school and county infrastructures 
is critically needed in our country. This bill provides such a 
mechanism. This is a systemic problem and it must be solved 
with a systemic solution. The current laws regarding payments 
to states should remain untouched. Specifically, the Coalition 
is adamantly opposed to decoupling or disconnecting county and 
school payments from actual gross forest receipts. We believe 
that the U.S. Forest Service and the Bureau of Land Management 
must continue to have incentives to manage the National Forests 
for the production of materials for the nation, to generate 
resources for the Treasury and payments to counties and schools 
and be diligent about the active healthy management of our 
National Forests. It is possible to have sustained-yield 
multiple-use forests which produce materials for our Nation, 
revenue to support local community infrastructures, provide the 
economic and social vertebrae for local communities, and 
simultaneously provide wildland fire protection, pure 
watersheds to sustain our urban and suburban population 
centers, and maintain ecologically healthy forests. These are 
mutually compatible and not mutually exclusive goals. There are 
those in our society today that are spending millions of 
dollars on advertising, public relations, and legal fees to 
convince us that this is an ``either/or situation'' when in 
reality, we know that these goals are compatible. Consequently, 
we strongly believe that payments to counties and schools, 
unconnected from the corollary improvement in economic self-
determination and improved social conditions will not work. 
Likewise, neither will payments to counties work, which are 
unconnected to incentives to actively manage on a sustained 
basis, the dominant economic asset in forest counties--the 
forest land itself. All of these factors are connected parts of 
an ecological, economic and social system, and any long-term 
solution must achieve a balance between these factors.
    We believe that this can and must be done for the benefit 
of our rural counties and schools and the long-term health of 
our Federal forests. The Forest Counties and Schools Coalition 
urges your support of H.R. 2389. It meets the immediate needs 
of forest counties and schools while providing a blueprint for 
the construction of a long-term solution to our current forest 
management gridlock and its attendant consequences.
    Thank you.
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    Mr. Hill. The Chair recognizes Mr. Spain for your 
testimony.

     STATEMENT OF GLEN SPAIN, PACIFIC COAST FEDERATION OF 
                    FISHERMAN'S ASSOCIATIONS

    Mr. Spain. Thank you, Mr. Chairman. Let me explain a little 
bit of our interest here. We are the largest organization of 
commercial fishermen in the West Coast and many of our people 
have been salmon fishermen. Salmon is the number two forest-
dependent industry in the West Coast. Salmon, just 10 years 
ago, provided over 62,000 jobs and $1.25 billion to our 
economy. Much of that is in jeopardy because of past forest 
practices that have devastated watersheds and put over 25 
different major runs of salmon on the endangered species list, 
with more to come.
    The reality is that a lot of past practices in the forest 
on public lands were simply unsustainable. They could not 
continue without doing major damage to industries such as ours, 
to municipal water supplies which are heavily dependent on 
those forest watersheds, and to a variety of other economic 
sectors. That is one of the reasons that a lot of the harvest 
has been cut back, and I think those are sound public policies 
toward sustainability in the future. It is not just salmon. 
Sport fishing is a $108 billion industry, is in every State in 
this country, and in many of those States those fisheries are 
dependent on public lands.
    The real issue and the real cause of the crunch is not even 
reduction in harvest because we have seen, as a result of 
globalization, harvest go up whereas the timber job base and 
the timber industry goes down because of automation. The real 
issue is globalization. If you look at the difference between 
1908 and 1999, today we live in an interlocked global timber 
economy. At this point in time, this is causing enormous 
competitive pressure on the timber industry, a reduction in the 
timber job base, and particularly important for this schools 25 
percent payment structure is that it causes enormous 
fluctuations in the price of timber.
    Take the stumpage price. Some of the facts and figures, if 
you look at the real numbers, you find that in the 1980s there 
was a huge collapse of stumpage prices, almost six-fold losses 
for county payments. Payments are 25 percent of the price that 
timber fetches. If the price collapses because of global 
markets, this is because of problems in the Japanese economy 
that were basically linked to our timber markets because of 
global interests. You find, for instance, in 1985 to 1993, in 
Oregon, the State I live in, just in an 8-year period of time, 
the stumpage price went from $100 per thousand board feet to 
$623. That is a 623 percent change in 8 years.
    If you look at Federal timber sales, the situation is even 
worse. Between 1993 in eastern Oregon and 1997, there was 
roughly a seven-fold change in timber stumpage prices. You 
cannot build a county budget on that kind of instability, 
frankly. We do not live in the same world as we did 100 years 
ago where these prices were relatively stable and within the 
control of local and national forces.
    At this point it makes no sense to continue to hold county 
budgets hostage to international timber markets in Singapore, 
Japan, and the Philippines. One of the reasons we have seen 
current stumpage prices collapse is because of economic 
instability in Asia. Again, these collapses were due to global 
market forces, not timber harvest policy, more than anything 
else.
    Now, looking at the various bills in front of you, they all 
have good elements, and they all have missing pieces. What we 
would propose as a bill that would do the job would be one 
along the administration's policy for fixed payments in 
perpetuity outside of the appropriations process, and as Mr. 
Dombeck pointed out, that is what we already have. I think Mr. 
DeFazio's bill does that, too.
    Perhaps Mr. Boyd's bill does that, but only for 5 years. 
Payments should also be indexed for inflation. The DeFazio bill 
and Mr. Boyd's bill do that. The administration's does not. I 
don't think that they can do it without congressional approval. 
It should also be management neutral. The current system works 
fine.
    I don't think, frankly, that taxpayers in this country will 
put up with special management deals being cut in back rooms 
without all public taxpayers being able to participate in the 
process.
    So whatever we need, we need something that is management 
neutral and basically not special interest driven. There should 
be a choice made. In most every instance, the administration's 
deal is a good one. I provided in my testimony, in the back of 
my testimony, a chart showing how that impacts Oregon. That 
will make a $21 million plus difference to Oregon just in the 
current proposal.
    Now we do not take a position on the precise formula. 
Seventy-six percent, a hundred percent, you know, what average? 
That is negotiable. I have talked to people in the 
administration and a lot of people on the Hill, and that is all 
negotiable. Numbers can be supplied by the Forest Service upon 
request in terms of comparisons to past practices.
    In summary, I think you really need a bill, and it needs to 
come out of this Congress this session, that breaks the link 
between county budgets and Singapore and Philippines timber 
markets which are out of our control, subject to massive 
fluctuations without notice, outside of anything that we have 
any control of, and which causes the instability that a lot of 
these counties are suffering from.
    A stable payment program is on the table in every proposal. 
There is no argument with that. What we are arguing over is the 
details. I would submit my testimony for the record, and I 
would be happy to answer any questions.
    [The prepared statement of Mr. Spain follows:]
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    Mr. Hill. Mr. Spain, thank you very much for your 
testimony. We do have a vote on the final passage of the 
military construction. And so what I would do is recess, 
propose a recess for about 15 minutes, let's say until 10 
after, and then we will pick up the testimony of the last two 
witnesses if that is agreeable with everyone.
    Thank you very much. We stand in recess for 15 minutes.
    [Recess.]
    Mr. Hill. We will reconvene the hearing. Thank you all for 
your patience.
    Our next panelist is Mr. Bobby Green, chairman of the Lane 
County Board of Commissioners. Mr. Green.

   STATEMENT OF BOBBY GREEN, CHAIRMAN, LANE COUNTY BOARD OF 
                 COMMISSIONERS, EUGENE, OREGON

    Mr. Green. Thank you very much for the opportunity to speak 
before this Committee. I really appreciate the opportunity. I 
would like to tell you about Lane County and much of this will 
sound very familiar to you and others. But I think it will be 
helpful in your process and ultimately hope it would lead to 
some sort of a decision at some point in time.
    Lane County is one of the most unique counties in the 
United States. It is about the size of Connecticut with more 
than a third of a million people. Our land stretches from 
mountain ski slopes to ocean sea shores. Most Lane County 
citizens live in Oregon's second largest urban center, the 
Eugene-Springfield metro area.
    We are a microcosm of the U.S. counties reliant on Federal 
forest policies. Forest land comprises 88 percent of Lane 
County. The United States Government, the U.S. Department of 
Agriculture, Forest Service, and the U.S. Department of 
Interior, Bureau of Land Management, owns more than half of the 
county, 54.2 percent to be precise. Lane County, Oregon is home 
to one of the largest combined Federal and O&C forest 
properties in the United States today. Because the county is 
more than half federally owned or managed, a unique partnership 
with the Federal Government was created almost a hundred years 
ago.
    Since 1908, Oregon schools and local governments have had a 
good partnership with the U.S. Forest Service. Timber resources 
from the Federal lands are used to provide raw materials for 
developing industry and economic growth. Funds from selling 
these materials provide education for our citizens. The funds 
pay for the transportation system to get the raw materials to 
the market. They provide resources to the Federal agencies 
administering the lands. They assist the Federal Treasury. The 
partnership has worked extremely well in Lane County.
    While we continue to diversify our economic base, the 
timber industry still provides 6,900 jobs in our county. Lane 
County's owl guarantee portion alone has provided an additional 
$22 million to help educate Oregon's children. In addition, it 
funded $66 million to maintain and modernize 1,500 miles of 
roads and bridges in Lane County's transportation system. These 
roads are heavily used by the timber industry and Federal 
agencies as timber moves to the mills and the marketplace.
    National forest timber revenue is used to finance the 
planning, design and construction of new county roads and 
bridges. All of these services are at risk of severe reduction 
or complete elimination on June 30, 2004, if no changes are 
made to the current system. That is when Lane County expects to 
lose close to $12 million a year. The history of the Oregon & 
California railroad lands, O&C, is long, unique, and quite 
colorful. Lane County's O&C lands comprise about 2.4 million 
acres of forest land managed by the BLM.
    Before 1903, these lands were in private ownership and 
available as resources for local government taxation. Because 
the O&C railroad failed to comply with Federal law and after 
much litigation, including a case that went all of the way to 
the United States Supreme Court, these lands were revested in 
the Federal Government. In 1938, the Federal Government granted 
50 percent of the revenues from the O&C land to counties.
    With the partnership, counties could use the funds to 
provide vital public health and public safety services to its 
citizens, despite the fact that more than half of the county is 
exempt from taxation. In 1952, the O&C Association formed a 
partnership with the BLM, both parties agreed that one-third of 
the counties' share of timber revenues be reinvested in 
managing the lands to improve future harvests.
    For years it worked extremely well, turning Oregon and 
California railroad lands into some of the country's most 
productive forest land. Unfortunately, just as counties were 
about to get a return on their investment, Federal forest 
policy changed. As a result, counties did not get the return. 
Over time through this plowback, O&C counties voluntarily 
returned more than $2 billion in timber revenues to the BLM. 
Lane County's share of this lost investment is more than $314 
million.
    About 25 percent of Lane County's general fund is financed 
by O&C timber revenue. It is used to pay for critical public 
safety and health services. In fact, 75 percent of the 
discretionary funds provide services such as immunization, 
communicable disease control, county jail and rural police 
patrols. It is a dilemma. We are one of many counties who have 
partnered with the Federal Government for nearly 100 years in 
sharing the Federal timber receipts. Lane County is different 
from other counties because the Federal Government owns 54 
percent of us, all of this forest land.
    This means only 46 percent of the property in our county is 
taxable. What is more, because of our unique partnership, we 
did not increase property taxes as did some Oregon counties. As 
a result, our tax rate alone cannot totally support our public 
safety and health services. In plain English, our budget relies 
on the current owl safety net.
    If guaranteed timber payments are not stabilized, the 
county cannot recoup its loss. Even if the citizens want to 
make up the difference, they can't. Why? Because in 1997, a 
State imposed property tax limitation prohibits any county from 
permanently increasing property tax.
    We relied in good faith on our partnership with the Federal 
Government. Now we are afraid this reliance will cripple our 
critical public safety, health services, and transportation if 
Congress does not stabilize the payments. The bottom line, if 
our Federal Government decides to take a big chunk of Oregon's 
Federal forest land out of timber production, counties should 
be compensated. Also, if the harvestable timber sales quantity 
is cut or eliminated to satisfy the administration's or 
Congress' competing policy objectives we should be compensated 
as well.
    We are certainly aware of the tight Federal budget. 
However, almost 100 years ago we made a deal with the Federal 
Government and we have upheld our end of the deal by providing 
health services, public safety, and roads. Now we call on 
Congress to ensure that the Federal Government upholds its part 
of the bargain. We urge you to seriously consider and adopt a 
viable stabilization plan.
    I would like to call your attention to the fact that the 
Lane County Board of Commissioners has carefully considered how 
best to solve the problem of counties relying on Federal forest 
funds. And on June 2, 1999 the board voted unanimously on a 
resolution backing the Federal action to stabilize the 
payments. And Mr. Chairman, for the record, I would like to 
submit this resolution which was unanimously endorsed by the 
Lane County Board of Commissioners if I may at this time.
    [The information follows:]
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    Mr. Green. Given that, the resolution goes on to speak to 
four points.
    Continue payments in perpetuity, number one.
    Number two, provide for inflationary increases.
    Three, revert to the actual harvest receipt formula if 
payments ever drop below the original funding formula. If 
receipts ever go above the original formula, Congress should 
review the appropriations.
    Four, allow counties to participate in the land management 
decisions. Given the immediacy of the issues we cannot endure a 
prolonged debate over best forest management practices.
    We believe the best and most practical approach is to 
stabilize our partnership with the Federal Government and in 
order to permanently provide for the maintenance of critical 
services for our citizens.
    Thank you, Mr. Chairman, for the opportunity to testify, 
and I stand ready to answer any questions which come forward.
    Mr. Hill. I thank you, Mr. Green.
    [The prepared statement of Mr. Green follows:]

 Statement of Bobby Green, Chairman, Lane County Board of Commissioners

    Lane County is one of the most unique counties in the 
United States. It is about the size of Connecticut with more 
than a third of a million people. Our land stretches from 
mountain ski slopes to ocean seashores. Most Lane County 
citizens live in Oregon's second largest urban center, the 
Eugene-Springfield metro area. We're a microcosm of all U.S. 
counties reliant on Federal forest policies. Forest land 
comprises 88 percent of Lane County. The United States 
government--the U.S. Department of Agriculture, Forest Service, 
and the U.S. Department of the Interior, Bureau of Land 
Management--owns more than half of the county, 54.2 percent to 
be precise.
    Lane County, Oregon is home to one of the largest combined 
Federal and O&C forest properties in the United States today. 
Because the county is more than half (54.2 percent) federally 
owned or managed, a unique partnership with the Federal 
Government was created almost 100 years ago.
    Since 1908, Oregon schools and local governments have had a 
good partnership with the U.S. Forest Service. Timber resources 
from Federal lands are used to provide raw materials for 
developing industry and economic growth. Funds from selling 
these materials provide education for our citizens. The funds 
pay for the transportation system to get the raw materials to 
the market. They provide resources to the Federal agencies 
administering the lands. They assist the Federal Treasury.
    The partnership has worked extremely well in Lane County. 
While we continue to diversify our economic base, the timber 
industry still provides 6,900 jobs in our county.
    Lane County's ``Owl Guarantee'' portion alone has provided 
an additional $22 million to help educate Oregon's children. In 
addition, it funded $66 million to maintain and modernize 1,500 
miles of roads and bridges in Lane County's transportation 
system. These roads are heavily used by the timber industry and 
Federal agencies as timber moves to the mills and the 
marketplace.
    National forest timber revenue is used to finance the 
planning, design and construction of new county roads and 
bridges. All of these services are at risk of severe reduction 
or complete elimination on June 30, 2004. If no changes are 
made to the current system, that's when Lane County expects to 
lose close to $12 million a year.
    The history of the Oregon & California Railroad lands (O&C) 
is long, unique and quite colorful. Lane County's O&C lands 
comprise about 2.4 million acres of forest land managed by the 
Bureau of Land Management (BLM). Before 1903, these lands were 
in private ownership and available as resources for local 
government taxation. Because the O&C Railroad failed to comply 
with Federal law, and after much litigation, including a case 
that went all the way to the United States Supreme Court, these 
lands were ``revested'' in the Federal Government.
    In 1916, Congress directed a portion of the resources to 
the counties. However, little funding actually made it to local 
governments. Future Federal acts continued to provide that a 
portion of the proceeds be given to counties.
    In 1938, the Federal Government granted 50 percent of the 
revenues from O&C lands to counties. With the partnership, 
counties could use the funds to provide vital public health and 
public safety services to its citizens, despite the fact that 
more than half the county is exempt from taxation.
    In 1952, the O&C Association formed a partnership with the 
Bureau of Land Management (BLM). Both parties agreed that one-
third of the counties' share of timber revenues be reinvested 
in managing the lands to improve future harvests. For years it 
worked extremely well, turning Oregon & California Railroad 
lands into some of the country's most productive forest lands. 
Unfortunately, just as counties were about to get a return on 
their investment, Federal forest policy changed. As a result, 
counties did not get the return. Over time, through this 
plowback, O&C counties voluntarily returned more than $2 
billion in timber revenues to the BLM. Lane County's share of 
this lost investment is more than $314 million.
    About 25 percent of Lane County's general fund is financed 
by O&C timber revenue. It is used to pay for critical public 
safety and health services. In fact, 75 percent of the 
discretionary funds provide services such as immunizations, 
communicable disease control, county jail and rural police 
patrols.
    It's a dilemma. We are one of many Oregon counties who have 
partnered with the Federal Government for nearly 100 years in 
sharing Federal timber receipts.
    Lane County is different from other counties because the 
Federal Government owns 54 percent of us--all of it forest 
land. This means only 46 percent of the property in our county 
is taxable. What's more, because of our unique partnership, we 
did not increase property taxes as did some Oregon counties. As 
a result, our tax rate alone cannot totally support our public 
safety and health services. In plain English, our budget relies 
on Federal timber money.
    If guaranteed timber payments aren't stabilized, the county 
cannot recoup its loss. Even if citizens want to make up the 
difference, they can't. Why? Because in 1997, Oregon voters 
adopted Ballot Measure 50, a property tax limitation measure 
that prohibits permanent increases in the property tax rate.
    We've relied in good faith on our partnership with the 
Federal Government. Now we're afraid this reliance will cripple 
our critical public safety, health services and transportation 
if Congress does not stabilize the payments.
    THE BOTTOM LINE--If our Federal Government decides to take 
a big chunk of Oregon's Federal forest land out of timber 
production, counties should be compensated. Also, if the 
harvestable timber sales quantity is cut or eliminated to 
satisfy the Administration's and Congress' competing policy 
objectives, we should be compensated as well.
    We are certainly aware of the tight Federal budget. 
However, almost 100 years ago, we made a deal with the Federal 
Government and we've upheld our end of the deal by providing 
health services, public safety and roads. Now we call on 
Congress to insure that the Federal Government upholds its part 
of the bargain. We urge you to seriously consider and adopt a 
viable stabilization plan.
    I'd like to call your attention to the fact that the Lane 
County Board of Commissioners has carefully considered how best 
to solve the problem of counties reliant on Federal forest 
funds, and on June 2, 1999, the Board voted unanimously on a 
resolution backing Federal action to stabilize payments and 
asking to:

        (1) Continue payments in perpetuity.
        (2) Provide for inflationary increases.
        (3) Revert to the actual harvest receipt formula if payments 
        ever drop below the ``original'' funding formula. If receipts 
        ever go above the original formula, Congress should review 
        appropriations.
        (4) Allow counties to participate in land management decisions.
    Given the immediacy of the issue, we cannot endure a 
prolonged debate over best forest management practices. We 
believe the best and most practical approach is to stabilize 
our partnership with the Federal Government in order to 
permanently provide for the maintenance of critical services 
for our citizens.
    Thank you for this opportunity to testify, I will be happy 
to answer any questions.
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    Mr.  Hill. The final panelist is Mr. William Dennison from 
Plumas County, Supervisor, District 3, Chester, California.

   STATEMENT OF WILLIAM N. DENNISON, SUPERVISOR, DISTRICT 3, 
                   PLUMAS COUNTY, CALIFORNIA

    Mr. Dennison. Thank you very much, Chairman Hill, 
Subcommittee members and full Committee members.
    I am Bill Dennison, Plumas County, District 3, Supervisor. 
I am speaking on behalf of Plumas County Board of Supervisors, 
the National Association of Counties, Regional Council of Rural 
Counties, which is in California, and the California State 
Association of Counties. The National Association of Counties 
has a membership of 1,857 counties. There are 800 counties that 
are forested in the United States that receive this revenue 
from the Federal timber sale receipts program. You are 
addressing a very important issue to all of us, and we thank 
you for that.
    Congressman Boyd did a great favor by documenting a lot of 
the reasons for the importance of that Act of 1908 so I will 
not belabor that except to point out the fact that in 1908 the 
General Accounting Office report contains a statement which is 
very important to us today; and they said, and I quote, since 
the early 1900s, the Congress has enacted more than 20 laws 
directing that a State or county be compensated for a Federal 
presence in the state. It was a promise that was made in 1908. 
It has been reaffirmed 19 other times, and it is a promise that 
must be sustained as you have heard from other members today.
    You are aware that the timber sale receipts have been 
decreasing, but I want to tell you about Plumas County because 
it is very close to us there where the Federal lands constitute 
73 percent of the land base, and our revenue has been reduced 
from almost $9 million per year to $1 million per year. The $4 
million lost for each of the school and the road systems have 
been very severe, and I can provide you with more data. And I 
have done that in my written statement.
    In summary, our roads are deteriorating, and our school 
children's education is being impacted. It is for those reasons 
that we entered into a broad coalition, the greatest I have 
ever seen. I wish we had those years ago, things would have 
been different, I believe. We didn't have them. We have them 
now. It is a grassroots movement that is potent that should be 
listened to. But entering into those understandings, we came up 
with principles that have been noted; but I want to just 
briefly go over those again.
    This corrective legislation must cover all of the national 
forest counties nationwide. Secondly, the payments are to be 
guaranteed based on 100 percent of the 3 highest years during 
the period of 1986 to the date of the passage of the bill. That 
is not a small decision that was made. We found in our 
compromise in our discussions if we did not do that, some of 
the Eastern counties would be losers; and so we brought them 
into the fold and thought that was a good way to go. The 
administration proposal to restrict the base to 76 percent of 
the period between 1985 and 1996 would penalize some of these 
States.
    The either or language has been included to allow for 
payments to ensure that you can get as good or better payment 
in case your receipts are higher. That is a reasonable thing. 
The CPI indexing has been noted before, but most important, and 
we have talked about this already, is the decoupling. And we 
believe there should be no change in the Act of 1908. There 
should be no decoupling of the payments from the production of 
our national forests as proposed by the administration. The 
last principle relates to the fact that we wish this 
legislation to be short term, a short-term financial safety net 
with a means to pursue a long-term resolution toward securing 
the delinquent revenues. That is covered under section 7 of the 
bill.
    We agree that land use management should not be for the 
sole removal of trees, but good management will, in fact, 
remove some trees during the process. That is why we supported 
the passage of the house when you acted on the Herger-
Feinstein-Quincy Library bill, that great vote of 428 to 1 
before.
    We supported you on that. That is why we now view that bill 
as a means to a long-term solution to the issue before us 
today.
    I have a copy and a longer written statement, Mr. Chairman, 
and a copy of an 8-page article in the July 1999, Smithsonian 
magazine, A Town Buries the Axe. I would like to include those 
in the record.
    Mr. Hill. Without objection.
    All of the panelist's written testimony will be part of the 
record.
    [The information follows:]
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    Mr. Dennison. I hope you have seen the Smithsonian report 
on the Quincy Library Group. It highlights the balanced 
management approach which you all embraced through that QLG 
bill as a means to protect against catastrophic wild fires. We 
are waiting for the final environmental impact statement 
completion by Forest Service so we can work together to begin 
that adaptive management process and have it utilized 
eventually not just in our area.
    We think that it is applicable to many places throughout 
the Nation, but this is going to take a couple of years and in 
the meantime, our counties need help. I suggest we should not 
be here talking about what the level of the cuts should be. 
That is another issue. We should be talking about how can we 
get the job done. Certainly there are some controversial 
issues, and I agree with Chief Dombeck on that. However, I 
think some of the things that were happening with the 
grassroots coalition, we can work some of these things out so 
they are not so controversial in the future. And there can be 
increases in timber harvest with sound environmental practices 
as well. We must strive for that goal.
    In closing, I would call to your attention again that 
Smithsonian report. A past Plumas County supervisor, Bill 
Coates, my predecessor, was quoted in the article as saying the 
following. Mr. Coates said, ``America needs its rural America. 
You can't live in Ohio and visit Plumas County unless there are 
hospitals there, unless there is law enforcement, unless there 
are roads to drive on. You have to have local infrastructure so 
if they get hurt, we can treat them. If they get lost we can 
find them. To keep that fabric together,'' Mr. Coates said, 
``the people of the town have to unite to work together to put 
aside their differences for the good of the town and for the 
good of everyone.''
    Chairman Hill and Committee members, that is the reason 
that I am happy to be with you today. We are not asking for 
handouts or entitlements. We are not asking that you determine 
the forest management level here today. We are asking for the 
opportunity to unite and develop a means by which the forest 
management funding system will serve the purpose for which it 
was intended. If rural communities are to be in a position to 
continue to serve the Nation, there must be more consideration 
of the resources for which they are willing and able to 
provide, and at the same time there is a need to fulfill the 
promises of our Federal Government to pay its fair share for 
maintaining our county schools and our roads.
    To that end, we thank you for the support of H.R. 2389.
    [The prepared statement of Mr. Dennison follows:]

   Statement of William N. Dennison, Supervisor, District 3, Plumas 
                           County, California

    CHAIRMAN CHENOWETH AND MEMBERS OF THE COMMITTEE:
    I am Bill Dennison, Plumas County Supervisor; District 3, 
in California. We are situated in Northern California, north of 
Sacramento and west of Reno Nevada. Today, I am speaking on 
behalf of the Plumas County Board of Supervisors and the 
National Association of Counties (NACo). I chair the NACo 
Public Lands Steering Committee, which shares a great concern 
in our issue today, since 800 counties throughout our nation 
receive revenue from the Federal timber sale receipts program. 
We are part of the Forest County Schools Coalition which 
currently has endorsements from over 500 groups in 32 States 
and is growing daily. You are addressing a very important 
issue.
    Thank you for scheduling these legislative hearings and for 
the opportunity to convey support for H.R. 2389 and the reasons 
why such a bill is necessary.
    A United States General Accounting Office report to past 
Congressman Vic DeFazio contains a statement which summarizes 
an important part of the issue before us today: ``Since the 
early 1900's the Congress has enacted more than 20 laws 
directing that a state or county be compensated for a Federal 
presence in the state.'' Congress recognized that the formation 
of the National Forests were large-scale withdrawals, with 
acreages being as high as 50 to 90 percent of some counties 
gross acreage's. Local government was concerned there would not 
be adequate tax base to provide appropriate public services. 
The substantial opposition to this action on the part of the 
Federal Government was mitigated by the Act of 1908 and as 
noted by GAO has been reaffirmed 19 more times over the years. 
It was a promise to the people that must be sustained. This 
compensation has been provided in varying percentages, but for 
the most part 25 percent of the gross receipts from commercial 
national forest activities have been distributed to counties 
through state government for the use of schools and roads. (16 
U.S.C. 500). Over 95 percent of those funds have been from 
timber sale receipts.
    Recent changes in national forest land management 
philosophy and practices have caused large portions of the 
National Forests to be considered off-limits for commercial 
activities. Some of these changes have been initiated by law, 
some by agency policy change and some may be temporary, as 
agencies search for scientific truths to answer the intricacies 
of the Endangered Species Act and other conflicting laws which 
have been passed by Congress over the years. The end-result has 
been an average loss of about 75 percent of county revenue from 
Federal timber sale receipts.
    In my County of Plumas, Federal lands constitute 73 percent 
of the land base and our revenue has been reduced from almost 
$9 million to about $1 million during the last 8 years. Plumas 
County has only a population of 22,000, with a local budget of 
$44 million. We are experiencing the impact of the $4 million 
dollars lost per year to each of the school and road 
departments.
    It requires $4.1 million to properly operate the public 
works department. Our Plumas County Director of Public Works 
has recently reported that this year revenues are estimated to 
be $1.8 million from gas tax and $0.5 million from the 25 
percent timber sale receipts. The remainder of the budget must 
come from our diminishing reserve, which will be depleted in 2 
years. The director reported that he began the reduction in 
asphalt paving 3 years ago and chip sealing of the roads 2 
years ago, in order to maintain a reasonable reserve. That fact 
is recognized in the obvious road deterioration throughout our 
county, but the degradation will accelerate if we can not 
return to a regular road maintenance program.
    Next year, if there is not a replacement of the lost timber 
sale receipts revenues, we have been told that there may be a 
reduction in snow removal services. We receive snow depths of 2 
to 3 feet in a given storm with total depths up to 10 feet in 
northern Plumas County. The loss of snow removal potential 
presents a severe deterrent for our emergency services, which 
include health, fire and law enforcement. These are often life-
threatening situations, not a luxury forgone.
    The next budget considerations which the Board of 
Supervisors will be forced to face will be personnel reductions 
in two years, or less.
    Our Plumas County Unified School District Superintendent, 
Dennis Williams made visits to the Hill with the Quincy Library 
Group the past two years in recognition of the financial crises 
he has been facing. Mr. Williams reported to me last week that 
school budget cuts, as a result of decreased forest receipt 
revenues has resulted in the following impacts:

         Class size has increased in grades 4-12 to a 30:1 
        student:teacher ratio.
         All funding was eliminated for all extra-curricular 
        activities but some has been restored over the past two years 
        as a result of a temporary Necessary Small School funding 
        provision from the State.
         Custodial and maintenance staffs have been reduced.
         School site supply budgets have been reduced.
         High school counselors were eliminated.
         Administrative staff was reduced.
         Transportation was reduced by eliminating several bus 
        stops.
    I have attached a chart and a graph which depicts the forest 
receipts history of reductions to the Plumas County School District.
    It is for these reasons that a nation-wide coalition was formed to 
pursue legislation that is based on the following principles:

         The corrective legislation must cover all National 
        Forest Counties nationwide, including the Oregon and California 
        (O&C) Counties. This is important because the impact of Federal 
        land policy changes are being felt from the Atlantic to the 
        Pacific.
         Payments are to be guaranteed based on 100 percent of 
        the three highest years during the period 1986 to the date of 
        passage of a Bill. This is an important factor, because some of 
        the eastern forests have increased their sale program over the 
        past couple of years. The Administration's proposal to restrict 
        the base to 76 percent of the period between 1985 and 1996, 
        would penalize these eastern states. The imposition of a cap on 
        the total increase to a county, as proposed by the 
        Administration is also unfair and unacceptable.
         ``Either/or'' language must be included to allow for 
        payments based on actual receipts if the amount is greater than 
        the short-term guaranteed payment level. (See Section 5, 
        subsection (b)(2).)
         CPI indexing should be included. (See Section 4, 
        subsection (b).)
         Most important, there must be no changes to the Act of 
        1908. The proposal for changes by the Administration during the 
        past year has been coined a ``decoupling'' from production of 
        our national forests. This constitutes an entitlement which the 
        coalition is unwilling to accept. There are several good 
        reasons for this position:

                  First, we believe that the national forests are in 
                terrible condition and must be managed. We face 
                catastrophic wildfires that can best be minimized 
                through strategic removal of trees. Reinvestment in our 
                watersheds, not lock-up of our resources is the right 
                thing to do.
                  Secondly, the management of these lands provide 
                products and jobs for our nation that far exceed the 25 
                percent timber sale revenue. It is important that in 
                the long-term the Act of 1908 and those 19 
                Congressional passed Bills that followed are upheld to 
                assure that the revenues and production are not 
                separated.
                  Third, our nation should not initiate more 
                entitlements, when there are means to pay for programs 
                through our existing resources.
         The last principle relates to the fact that we are 
        only requesting a short-term ``safety net'' and the means to 
        pursue a long-term solution to securing the delinquent 
        revenues. We believe that the latter is set forth in Section 7. 
        DEVELOPMENT OF LONG-TERM METHODS TO MEET STATUTORY PUBLIC 
        SERVICES. Under item (c) (2) you will note that we wish to 
        increase the revenues, but only where ``. . . ecological, 
        economic and social factors are accorded equal consideration in 
        the management of Federal lands.'' The Committee shall 
        terminate three years after the date of the enactment of this 
        Bill. That and the provision that payments to eligible States 
        and eligible counties are to be replaced by a long-term 
        solution within two years after the date of submission of the 
        report required by Section (7)(c)(1), is indication of our 
        commitment to a quick solution.
    We agree that land use management should not be for the 
sole purpose of removing timber. That is why we supported the 
passage of the Herger-Feinstein Quincy Library Group Act. It is 
why we now view that bill as the means to a long-term solution 
to the issue before us today.
    You will recall that QLG bill passed the House of 
Representatives by a vote of 428 to 1. It then passed the 
Senate and is now being reviewed by Forest Service under their 
Draft Environmental Impact Statement. Currently, the DEIS and 
the QLG bill is under attack by Sierra Club. Not because it is 
a bad bill, but because the Club has adopted a platform to stop 
the harvest of all trees on National Forest lands. In fact the 
Herger-Feinstein QLG Act is a very balanced approach to forest 
management.
    With the chair's permission, I would like to submit a copy 
of an eight page article in the July 1999 Smithsonian--A Town 
Buries The Axe. It emphasizes the balanced management approach 
which you all embraced and the need to protect against 
catastrophic fires through cooperative land management. Author 
Edwin Kiester Jr. spent considerable time touring the Plumas, 
Lassen and portion of the Tahoe National Forests to develop an 
understanding of why management of our natural resources are 
necessary and how the Quincy Library Group (QLG) turned 
controversy into consensus. The Quincy Library Group learned 
the lesson of ``fuel ladders'' and the need to thin the 
overstocked forest stands. The author notes that the Cottonwood 
fire which broke out in July of 1994, ``. . . represented a 
major shift in QLG strategy.'' ``The fire broke out in the 
undergrowth and quickly jumped to the crowns of the pines, 
swept from treetop to treetop and soon became an inferno.'' The 
fire burned 47,000 acres, almost consumed the town of Loyalton 
and cost the state and Federal Governments $12 million before 
it was contained. The QLG decided that the chance of this 
catastrophe could have been reduced by thinning of the forests.
    I enter this article into the record because it displays 
the fact that the QLG Bill is the potential long-term solution 
to the problems which I have reviewed above. It is a solution 
that has been approved by Congress and now awaits the 
implementation of the adaptive management process that can be 
fine-tuned and used in many other areas of our nation.
    The Smithsonian article quoted Bill Coates, a past Plumas 
County Supervisor and one of the originators of the QLG as a 
closing to Kiester's article: ``America needs its Rural 
America. You can't live in Ohio and visit Plumas unless there's 
a hospital there, unless there's law enforcement, unless there 
are roads to drive on. You have to have local infrastructure, 
so that if they get hurt we can treat them, it they get lost we 
can find them. To keep that fabric together, the people of the 
town have to unite, to work together, to put aside their 
differences for the good of the town and the good of 
everyone.''
    Chairman Chenoweth and honorable Committee members, that is 
the essence of the reason why I am before you today. We are not 
asking for hand-outs, or entitlements. We are asking for the 
opportunity to unite, work together, put aside our differences 
and develop a solution. If rural communities are to continue to 
serve our nation, there must be more consideration of the 
resources which they are willing and able to provide and there 
is a need to fulfill the promises of our Federal Government to 
pay it's fair share for maintaining our county schools and 
roads.
    To that end, we will thank you for support of H.R. 2389.
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    Mr. Hill. Thank you. The Chair will now recognize Members 
on each side alternating when they appeared before the 
Committee. Mr. Sherwood, you are recognized.
    Mr. Sherwood. Thank you, Mr. Chairman. Mr. Spain, what 
would you think if we had a program where we were going to 
absolutely stop all salmon fishing for the foreseeable future?
    Mr. Spain. That is, in fact, the case in the Coho Fishery 
right now and in the case of the majority of the salmon 
fisheries on the West Coast.
    Mr. Sherwood. So we are never going to fish for salmon 
again?
    Mr. Spain. Right now they are closed for conservation 
reasons, and that is because otherwise they are not sustainable 
in the long run. Also we have to deal with the habitat issues 
in the forests which are driving some of the declines.
    Mr. Sherwood. If we just decided that we would abandon that 
resource for all time, that would be a great waste. Just like 
it would be a great waste to have zero cut on our national 
forests. We need to manage the system, and I think it is 
incumbent upon us here--I mean, we are going down the road and 
getting tacks in our tires and we are trying to determine 
whether to use red or blue patches.
    We have to decide how to get the tacks off the road. I 
think we have lost our will to manage. I think it is partially 
the Congress's fault; but we have great national resources and 
there are people saying don't destroy our communities. We can 
subsidize them or help them prosper. I think there are some 
very important issues here. You are looking at it from your 
point, you want us to not silt up the rivers and destroy your 
salmon, and you are dead right. We should not do that. We 
should not rape our forests and silt our streams, but we can't 
become hostage to the zero cut crazies. We need the will to 
manage the system. It is entrusted to us.
    Now, Mr. Dombeck, could you help me. Let's go back to the 
southern forest, the Apalachicola. Were those figures that were 
given to us anywhere near or reasonably correct?
    Mr. Dombeck. Well, I haven't seen the source, but I presume 
so, yes. Let's----
    Mr. Sherwood. Do you know why then, I mean in that forest, 
that's not a--that is--that is a very different situation than 
the West Coast. Why do you think that we are not harvesting 
timber there?
    Mr. Dombeck. Well, we are harvesting timber there, but the 
balance is significantly different than it was 10 or 15 years 
ago, and the issues driving some of the southern forests, of 
course, are the red-cockaded woodpecker. In fact, there was 
significant progress, I think, made there if we take a look at 
the fact of what happened in the Pacific Northwest, where we 
basically had the timber programs completely enjoined, 
virtually zero; what was worked out in the southeast was 
compacts with the industry, with the various agencies involved, 
and there are, you know, the Fish and Wildlife Service, the 
Forest Service, to arrive at that particular harvest level 
without injunctions from the court system.
    So in one sense, that is a success, although there is still 
debate over the harvest levels, and I presume that will 
continue.
    Mr. Sherwood. So you have cut the harvest levels because 
you are afraid of court action, because of the red-cockaded 
woodpecker?
    Mr. Dombeck. I----
    Mr. Sherwood. There has been no court action to my 
knowledge.
    Mr. Dombeck. I would say what we did is, we worked with the 
regulatory agencies and the community of interest to arrive at 
a management program prior to--before they hit the courts, yes. 
I think it is in the best interest of all of us to work 
together in that manner because one of the things we know that 
the amount of money that we spend in the court system really 
doesn't benefit the land, and the more that we can focus the 
energy in areas of agreement, the better our chances of success 
and, I think, building trust are.
    Mr. Sherwood. But--I certainly agree with that statement. 
But I think--I don't think we have looked at the waste in the 
system, the waste in the salmon industry, because we did things 
wrong in the past, and the waste in the timber industry now 
because we are letting them become overmature and rot and fall 
down and letting the communities that derive their income from 
that part of the country wither and die. And then we have 
proposals where we will support them with tax money. They don't 
want to be supported with tax money. They want an industry; 
they want their community to thrive. And I think we are a 
little bit on the wrong track.
    And I think because of specific instances, we have--we have 
lost our will to fight a little bit. And I look at the 
Allegheny National Forest in Pennsylvania, and now I have seen 
today that the Apalachicola might be a good example. What--how 
does this Forest Service make the decision in the Apalachicola, 
for instance, whether or not to have sales? I mean, what 
specific criteria?
    Mr. Dombeck. There is a forest planning process, a land 
allocation process, and then as projects are implemented, 
throughout the process there is public input; and the 
environmental work, the appropriate NEPA work that is required 
to arrive at a record of decision. And then as with all--with 
virtually all programs there is an appeals process where 
citizens want to have the right to question decisions that are 
made by public servants, by government officials; and in many 
cases, question they do.
    In fact, with regard to your point about the will to fight, 
the Forest Service spends about $5 million a year in appeals 
and about $5 million a year in litigation just in the 
management costs and gathering the data. That is not even the 
legal costs that might, you know, transcend the Department of 
Justice or Office of General Counsel. So there is plenty of 
give and take at the public meeting level and all throughout 
the system.
    Mr. Sherwood. But am I to take it that it is cheaper to let 
the forest rot than it is to fight the legal battles?
    Mr. Dombeck. You know, I think what is at the heart of the 
timber debate--and this has been going on for a long time; it 
transcends administrations, it transcends Congresses and chiefs 
and directors of BLM and all the agencies involved, and that is 
that if we start looking at the desired future condition, what 
do we want the forest to look like? What do we want the stand 
densities to be, the make-up? I have yet to find anybody that 
is in favor of soil erosion, that is in favor of siltation of 
streams. We want healthy forests and we want to be able to reap 
the benefits of those forests for local communities.
    I believe we will stay in this debate and our successors 
will be in this debate unless we move beyond the intense 
competition that we have and focus on what it is that we want 
on the land. You know, we have got the best science in the 
world in the United States; we ought to be applying that. And 
we have got tremendous opportunities, I think, in the benefits 
that we derive from all of our public lands.
    Mr. Sherwood. Maybe some of that science should be put to 
work to see if harvest hurts the red-cockaded woodpecker.
    Mr. Dombeck. In fact, I have to tell you one of the places 
I have been where I see both industry and the Sierra Club 
standing together is also in Florida where they are both 
supporting small clear-cuts for scrub jay habitat. They are 
doing prescribed fire, industries reaping the benefits of wood 
fiber there. But the fact is they are focused on common goals 
that embody what they want the land to be like and what they 
expect from it.
    I think that as long as we look at a watershed and focus on 
board-feet, the debate will remain here. If we focus on the 
desired future condition, the benefits that we get from the 
land will flow in a sustainable way.
    Mr. Sherwood. Thank you.
    Mr. Hill. The gentleman's time has expired.
    I would just remind all members that we are under the 5-
minute rule, and I recognize Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. We will do a second 
round if we each so wish. Great.
    Mr. Hill. Certainly.
    Mr. DeFazio. Chief Dombeck, a couple questions. I mean, 
what is there under current law that would require the 
President to submit or propose guaranties or extensions to 
counties? Is there anything that requires the President to put 
that in his budget?
    Mr. Dombeck. The two or three things that led to that, not 
that I am aware of with regard to----
    Mr. DeFazio. No. I mean, is there anything--I mean, he 
proposed a guarantee, extending a permanent guarantee to all 
counties. That is correct.
    Mr. Dombeck. If you take a look at the slope on that curve 
and then you assume that if we didn't have the safety net, in 
western Oregon that slope would be significantly lower than it 
is, or higher in the negative sense.
    Mr. DeFazio. What I am trying to get at is that the 
proposal by the President--which some people object to because 
of the decoupling, but in any case it was a proposal to provide 
revenues to counties and it is something that the President 
does not have to submit as part of his budget. There is nothing 
that requires him to submit it as part of his budget.
    Mr. Dombeck. That is correct. I think the common goal that 
we share, that we discussed here, is stability, is 
predictability, is providing a source of funding so that the 
superintendent of the schools, the county commissioners and 
others in charge of social services that communities need have 
some predictability in providing these services.
    And I, for one, as well as in the view of the Secretary in 
the administration, we are very solidly behind the commitment 
that the Federal Government ought to be paying its way for 
these lands that belong to all the people of the United States 
even though the times change and the values and the public uses 
of these lands change over time.
    Mr. DeFazio. You used the words ``strongly opposed'' to the 
county schools coalition legislation. What--I know that the 
administration has an arcane process and sometimes the 
President does and doesn't do what he says he is going to do in 
terms of vetoing things; I remember the salvage rider. But 
absent that, what would you recommend since you can only really 
answer for yourself to the Secretary and or the President? 
Should that bill be passed as currently introduced?
    Mr. Dombeck. I would--my personal recommendation to the 
Secretary would be to veto it for a couple of reasons. Number 
one is that we have a complexity of planning process mechanisms 
now, and many Members of Congress are concerned about the 
confusion that is already there. This adds another layer of 
confusion.
    The other part that I am concerned about is the fact that 
tightening the link of any single use to important social 
services would only exacerbate the debate, because it will 
further polarize the issues. Because if we take a look at the 
benefits of national forests today compared to 1908: In 1908 we 
were focused on restoration of the Appalachian Mountains of the 
northeast; the Allegheny National Forest was nothing in 1908 
like it is today; the Chequamegon National Forest where I grew 
up in northern Wisconsin again was in tough shape compared to 
what it is today. The values were different.
    In fact, today if we look at the values, the contributions 
to the gross domestic product of the national forests, we find 
that about 75 percent of that comes from recreation to people, 
hunting, fishing, hiking, biking, outfitters and guides, the 
whole array of uses out there that are increasing at a 
significant rate that were not there at the turn of the 
century. And so what we see is, we see, you know, the wildlife 
values at about 9 percent, the mineral values contribute about 
7 percent, and the timber values contribute about 3.7 percent. 
So in one sense, why don't we look at the broader array of 
values?
    Mr. DeFazio. Chief, who sets forest policy? Do you set 
forest policy?
    Mr. Dombeck. Well, my job is to implement the legislation 
passed by Congress and signed by the President.
    Mr. DeFazio. Do you feel that you have, you know, done 
something to change forest policy in terms of the current 
levels of harvest; or have court precedents and other, you 
know, litigation things led to you know a change in forest 
planning?
    Mr. Dombeck. I would say the key changes have really been a 
result of the combination of legislation that we have to 
implement and developing case law.
    Mr. DeFazio. Okay. Which goes back to the point I made with 
Mr. Boyd, which was that I think the responsibility rests here 
to have the debate over forest policy.
    Mr. Douglas, I read your resume, which is impressive, but 
of the 25 years in schools where were you in 1983, where were 
you working then?
    Mr. Douglas. I was working for the Plumas Unified School 
District.
    Mr. DeFazio. So you were in northern California. What 
happened to timber revenues in 1983 in Plumas County?
    Mr. Douglas. They were, as I recall, declining.
    Mr. DeFazio. Pretty dramatically, as I recall.
    Mr. Douglas. Yeah, there was a national recession.
    Mr. DeFazio. And I am about to run out of time, so I will 
use my second round of questions, but I mean, let me then 
conclude with the point that I was a county commissioner, 
elected in 1982 in Lane County and took office in 1983. And 
Lane County at that point had laid off one-third of its work 
force and the remaining two-thirds were working four days a 
week, and not because of Federal dictates in forest policy, but 
because of being linked to forest revenues which were in the 
tank at that point in time, from the most productive forest in 
the United States, which was the Willamette--so, you know, I 
am--and my time is up and I will be good here, Mr. Chairman. I 
will just end with that statement. I will get a second round. 
Thank you, Mr. Chairman.
    Mr. Hill. Thank the gentleman very much.
    The Chair recognizes Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman.
    Mr. Douglas, I got here late and you may have mentioned 
this, but what percentage of your home county is owned by the 
Federal Government?
    Mr. Douglas. About 52 percent.
    Mr. Duncan. I just spent part of last week driving through 
northern California, and it seemed like I would drive from a 
national forest into a national park into a State park. How 
much of your county is owned by the State or local governments? 
Do you know that?
    Mr. Douglas. Off the top of my head, I don't know that. I 
do know the Federal Government owns about 52 percent of it.
    Mr. Duncan. And as you are--this is--we are hearing 
entirely from witnesses from the West. Is this--but there are 
eastern counties involved in this problem as well. I know 
this--are you--is your group made up of counties in the east as 
well or----
    Mr. Douglas. We have county representatives and school 
district representatives and business and industry 
representatives from 35 States now, including almost all of the 
States of the West, half the States in the Southwest, States in 
the north central part, Wisconsin area. Certainly in the East 
where there are national forests we do have members, and we 
have members in the South.
    Almost every region of the United States where we have 
national forests are now represented in our coalition, 
Congressman.
    Mr. Duncan. Mr. Dennison, how much of your county is in 
Federal ownership?
    Mr. Dennison. Ours is 73 percent.
    Mr. Duncan. Do you happen to know how much is in State or 
county government ownership?
    Mr. Dennison. It is a small percentage, but the 73 percent 
certainly has a great impact on us.
    Mr. Duncan. You know, nationwide, we have about--almost a 
third of the land in Federal ownership, and then another 20 
percent in State, local and quasi-governmental ownership. So we 
have a little over half the land all over the Nation, and it 
has been growing by leaps and bounds over the last 30 or 40 
years. And I think at some point we need to recognize that 
private property has been one of the real basic elements of our 
prosperity.
    In fact, probably your counties would be much better off if 
we could get some of that land into private ownership. I don't 
guess that is possible, but you really would boom if you could.
    In fact, I was real interested, I read last week or week 
before last a column in the Washington Times by former Governor 
Dupont of Delaware, who said that--in his column, he said 
people don't realize, because we are all clustering together 
because everybody wants to be near the malls and the movie 
theaters and the restaurants that only 5 percent of the land in 
this country is developed and three-fourths of the population 
lives on 3.5 percent of the land. And I mean, we all look at 
these maps of the United States on one little page in a book, 
and we think this country is much smaller than it really is. I 
can tell you that driving through northern California for a 
couple days last week I am not worried about the redwoods. I 
think I saw millions of them.
    Mr. Dennison. May I respond, Congressman? We have a 
considerable amount of private timberland in the north State, 
as well. They have very strident, stringent force practice 
rules. But I can assure you that the practices there, even 
though they are meeting good environmental standards, are 
harvesting much more timber than our Forest Service. The 
policies are what are bothering us right now as much as the 
legislation, self-imposed policies waiting for something to 
happen.
    Mr. Duncan. Well, you know, the staff had told us a few 
months ago that--I think it was in 1980 or so that sometime in 
the 1980s we passed what was then seen as an environmental law 
to reduce the cutting in the national forest to 80 percent of 
the new growth or maybe it was 85 percent of the new growth. 
And today we are cutting, they tell me, less than one-seventh 
of the new growth in the national forest each year.
    And, you know, it just seems, if we are going to have 
healthy forests, we have got to cut a few trees; and if we are 
going to have houses and magazines and books and a lot of other 
things that make up a good quality of life, we have got to cut 
a few trees. Yet they are, as Mr. Sherwood said, referred to as 
``these crazies'' who don't want anybody to cut anything.
    But I still say that this country would be far better off 
if we had less land in public ownership and more land in 
private ownership, so that your counties such as you represent 
would be much stronger economically.
    Thank you, Mr. Chairman.
    Mr. Hill. I thank the gentleman.
    Chief Dombeck, you made a comment, I think, with regard to 
the situation in Florida, I think with the woodpecker, that 
there were common goals, industry groups and other groups and 
as a consequence of that that they were getting on the same 
page.
    The coalition proposes to accomplish the following things: 
one, to have stable economies; two, to have a stable source of 
revenues for their counties and schools and to have sustainable 
forests and sustainable communities.
    Is there anything about those goals that you disagree with?
    Mr. Dombeck. No.
    Mr. Hill. I think you have to be impressed that this is a 
pretty broad coalition of people, diverse group of people, 
broad interests. Really, I am incredibly impressed with it. Do 
you think that these communities should have--who are affected 
by this policy should have some input into helping design the 
solution?
    Mr. Dombeck. Definitely.
    Mr. Hill. I presume, then, that the administration proposal 
is one that you recommended to the administration?
    Mr. Dombeck. It was the result of a fair amount of 
dialogue.
    Mr. Hill. You helped develop that?
    Mr. Dombeck. Yes.
    Mr. Hill. Which of the coalition members and counties that 
are part of this coalition did you consult in the development 
of that policy?
    Mr. Dombeck. Let me ask Sandra Key, who was involved 
firsthand in much of that.
    Ms. Key. To answer your question, I was involved in the 
development of the proposal, and we went forward with it last 
year, not seeking a sponsor and working very closely with the 
NACO county associations, telling them what we were doing, 
telling them this is what we wanted, recognizing that they were 
going to be a big part of what this Congress chose to do about 
payments to States.
    This year we came back, modified our proposal in some ways 
that we felt were more acceptable then, recognizing it still 
was not everything that they wanted. And at every step along 
the way, we have provided and communicated with them and tried 
to be as open and direct with the counties as we could be. And 
you could perhaps ask them how they feel about that.
    Mr. Hill. Well, I think maybe we will.
    Mr. Dennison, do you have any response to that? Were you 
consulted?
    Mr. Dennison. I agree with Mrs. Key that they have told us 
what they are doing, and we have disagreed with what they are 
doing. And I think that is a fair statement.
    Mr. Hill. You weren't asked for your advice.
    Mr. Dennison. We gave it any way. And I think their view 
was to seek our advice. But the big stumbling block, Mr. 
Chairman, is the fact that theirs hinges on decoupling, hinges 
on a way of changing business as usual. We are trying to 
develop a coalition that will tell us how it can be done 
better. That is why we think what you did already sets that 
balance for us that we can work from the bottom up. And we saw 
the administration's proposal as definitely a top down.
    Mr. Hill. In your view, Mr. Dennison, is there anything in 
the administration's proposal--it obviously stabilizes funding 
for local government schools, but does it do anything to build 
more stable economies in your communities?
    Mr. Dennison. No, not at all, because you can't separate 
the system. There is a system that is out there working. And as 
I quoted from Mr. Coates, you can't have one without the other; 
you need the roads to get there. And again, we believe that--we 
believe the administration, the Forest Service and Mr. DeFazio 
have the same goals, but we just disagree on the way to get 
there.
    Mr. Hill. There is no long-term solution?
    Mr. Dennison. The long-term solution has to be there. We 
already went through the northern owl proposal that went on and 
on and on.
    What I said a moment ago, just waiting for something to 
happen, we can't wait for it to happen. Five years is plenty 
long term to wait for it to happen. We can work within that 
system with the Forest Service and with others to get that 
developed on the ground. And again, I want to emphasize that 
the Quincy Library Group Adaptive Management Pilot Program is a 
start. We would like to utilize that.
    Mr. Hill. Going on, Mr. Dombeck, do you know whether or not 
the administration requested full funding of the PILT program 
in its budget this year?
    Mr. Dombeck. I really--I don't know the answer to that. 
That would come from--I believe from the Secretary of Interior, 
but it is something we can sure check on.
    Mr. Hill. Would it surprise you if I told you they didn't?
    Mr. Dombeck. No, not at all.
    Mr. Hill. One of the questions I have is, obviously you 
object to the county coalition bill, and I think one of your 
objections is that the offset of funds comes from within your 
budget, your agency budget. I would understand why you would be 
concerned with that.
    Where would the offset come for your proposal, for the 
administration's proposal? Where would the funding come from 
for the payments to the counties?
    Mr. Dombeck. The pay-go difference is about $27 million a 
year. We would----
    Mr. Hill. Are you proposing that it be offset from your 
budget?
    Mr. Dombeck. From general revenues and----
    Mr. Hill. From Social Security surplus?
    One of the concerns I have is the impact of the forest 
management on poverty levels, and particularly in Montana. I 
just want to make reference to some statistics because they are 
startling, Mr. Secretary.
    The unemployment levels and poverty levels in some of the 
counties in Montana, for example, Lincoln, Montana, which is, 
as you know, Lincoln County, a timber-dependent community, 13.1 
percent unemployment; Mineral County, 10.8; Sanders, 10.6; 
Granite, 9.0; Flathead, 7.9; Ravalli, 7.1.
    But even more startling are the poverty levels that are in 
these counties: Sanders County, 20.6 percent; Mineral County, 
20; Powell County, 19.6; Granite County, 19.4; Lincoln County, 
18.3; Missoula County, 16.3; Ravalli County 16.0; Flathead 
County, 14.4. The President, I think, just toured some areas 
where we have high unemployment, substantial poverty.
    Do those statistics trouble you, that level of poverty in 
those timber dependent communities?
    Mr. Dombeck. Yes, they do. In fact, the county I grew up is 
in--is--although in a different part of the country, the Upper 
Midwest is very similar in makeup to many of the counties in 
your State.
    Mr. Hill. What is the administration's proposal to diminish 
the poverty in those counties?
    Mr. Dombeck. I did not come here prepared to talk about all 
of the social programs that are out there, but what I would say 
in response to that is, the key thing that we need to do is 
settle down the debate. Because the fact is that much of where 
we are today is a result of public questioning, policies, court 
injunctions, and those kinds of things that we deal with as, 
you know, we administer the laws and work through what we are 
required to do with regard to the evolution of case law.
    Mr. Hill. In your exchange with Mr. DeFazio you made 
reference to the fact that Congress sets the policy and you 
implement the policy. You have been forest chief two years now?
    Mr. Dombeck. Yes.
    Mr. Hill. During those 2 years has the Forest Service met 
its ASQ's?
    Mr. Dombeck. From the forest plans?
    Mr. Hill. No, from Congress, the numbers that the Congress 
recommended.
    Mr. Dombeck. I believe reasonably close to what has been 
put up. But the fact is that all of the timber sales that we 
put up are not sold. Right now we have got about 5.8 billion 
board-feet under contract, and an operator typically has a 3-
year period where they take a look at the broader economic 
conditions to make a determination as to whether or not they 
would harvest.
    Mr. Hill. If I told you you were substantially lower than 
what the ASQ's were, would that surprise you?
    Mr. Dombeck. No. I guess I would say to differentiate that 
from the amount offered versus what is actually sold.
    Mr. Hill. One last point. We had a hearing a couple weeks 
ago with regard to the fire catastrophe issue in the forest. I 
believe the Forest Service asked the administration for $100 
million in the budget for dealing with the catastrophic fire 
issue and the administration proposed $65 million. Do those 
numbers seem correct to you?
    Mr. Dombeck. I would assume they are reasonably close.
    Mr. Hill. And GAO has suggested that you need $740 million 
a year. Are you familiar with that?
    Mr. Dombeck. I like that number.
    Mr. Hill. Would you--would it be your conclusion that $65 
million is under funding the amount necessary to deal with the 
catastrophic fire?
    Mr. Dombeck. Yes. In fact, as we deal with the funding 
issues, you know, there is--there isn't a single forest 
supervisor or program manager that will tell me that they have 
enough money for their program. And the thing, of course, that 
we struggle with is balance, just as I know Congress struggles 
within the budget caps as you look at, the various demands and 
how you balance allocation of the resources you have.
    Mr. Hill. My point simply is, this is a way to help timber-
dependent communities if we fully funded plus also deal with 
the fire risk.
    One last question for you, Chief, and that is this: I think 
you can tell from this hearing, and I think you know full well 
that a pure decoupling bill isn't going to pass the Congress. I 
think you are probably aware of the fact that we are not going 
to pass a bill to increase timber harvest as well. Recognizing 
the fact that we have got to get together, and this coalition 
is a sincere effort to try to address that from the bottom up, 
are you willing to give your commitment to this Committee that 
you will work with us to try to find a compromise and some 
middle ground on this issue?
    Mr. Dombeck. We will. In fact, as I look at the goals--I 
have listened to the other witnesses here. And, Congressman 
Boyd, I think you know we have got--really have got much more 
in common than we have--than we have differences.
    Mr. Hill. We will then go to another round of questioning.
    I guess Mr. Schaffer, you are recognized.
    Mr. Schaffer. Thank you, Mr. Chairman. I also have 
questions for Mr. Dombeck.
    In your testimony--I am sorry I was not here to hear it, 
but I was able to review it--you said that ``Over the past 10 
years timber harvest in the National Forest declined 70 percent 
in response to new scientific information, changing social 
values and our evolving understanding of how to manage 
sustainable ecosystems.''
    First, what new scientific information are you referring 
to?
    Mr. Dombeck. Well, I think one of the things we do have in 
the United States is the best science and technology in the 
world as we take a look at the various concerns. But if we take 
a look at issues, as Mr. Spain talked about, with regard to 
salmon fisheries, with sedimentation, with items like that, I 
think we are, you know, we are moving away from the era of 
large clear-cuts to more selective management.
    I was down in Arizona not long ago on the Apache-Sitgreaves 
National Forest where they are talking about concepts of 
forests to deal with fire risk, and in that situation, they are 
harvesting virtually everything below 16 inches to reduce the 
fuel. They are marketing wood down to about 5 inches, utilizing 
other--the remainder for fire wood and other uses like that, 
and very selectively harvesting some of the larger trees as we 
try to move toward a more healthy condition with the 
appropriate stand densities and items like that.
    So the breadth--my point is the breadth of the science that 
we have out there is expanding significantly and continues to 
expand. For example, in the State of Idaho where, you know, we 
now have Western white pine disease resistant strains 
developing, so we are working on reforesting parts of the 
northern Rockies with white pine.
    We have got--white bark pine is another species that is 
important to grizzlies.
    We have the long leaf pine in the Southeast that we are 
reforesting much of that, but only about 3 percent of the 
original long leaf remain.
    I think if we take a look at the Allegheny with the quality 
of cherry that we have on Allegheny today is some of the best 
quality hardwood in the world. You know, we didn't have that 50 
years ago.
    Another important area of research that we shouldn't forget 
about when we talk about local communities is to do as much 
value-added work in those local communities as we possibly can, 
and that is--a lot of work has been done to increase the 
efficiency of use of wood that is out there through the 
particle board technologies, the resin technologies, the work 
that is done by our own forest products----
    Mr. Schaffer. So you are persuaded that all of this 
scientific information, the things that you mentioned, is what 
has resulted in this 70 percent reduction?
    Mr. Dombeck. No, not at all. That is part of it. Much of it 
is----
    Mr. Schaffer. The General Accounting Office study said that 
their 40 million acres of forestland are at high risk of 
catastrophic wild fire. What role did that kind of scientific 
information play in your opinion?
    Mr. Dombeck. Well, we are very, very concerned about the 
fact that there is 40 million acres at risk. And we need to 
make investments to reduce the fuel loadings to apply whatever 
science is appropriate for whatever watershed to deal with that 
issue. And I think there is lots of agreement in this room that 
we need to get on with that and make those investments.
    Mr. Schaffer. Would it be possible for you to elaborate on 
that further, in writing perhaps, as to what kind--as far as 
that particular statement that was made in your opening 
comments about the scientific information that has helped 
result in a 70 percent reduction in timber harvest in the 
United States, which ultimately led to the financial problem 
that we are trying to deal with today.
    Mr. Dombeck. I would also like to highlight that a large 
part of that was also a result of litigation.
    Mr. Schaffer. You also mentioned social values. What kind 
of social values led to the 70 percent reduction in timber 
harvest?
    Mr. Dombeck. The tremendous increasing recreation use that 
we see on national forests. The increasing concern of water and 
watershed values. We have got 3,400 municipal watersheds within 
the national forest that provide drinking water to about 60 
million people. All of those values, cultural values, 
archeological values, a wide variety. And I would also be happy 
to elaborate on that in writing in more detail because that is 
a topic that we could talk about here until dark and beyond.
    Mr. Schaffer. Does the Forest Service use sound scientific 
practices or opinions, as defined by social pressures or social 
type issues?
    Mr. Dombeck. One of the things that came out of the debate 
in the Pacific Northwest and the owl issue that I know Mr. 
DeFazio is well aware of, as well as the people at the table 
here, is watershed analysis procedures that take a look at the 
overall function of watersheds, watershed management, ways to 
reduce sedimentation, increase function of riparian areas, 
again, the contribution that roads make and the condition of 
roads, the need to maintain roads to a particular standard to 
reduce or prevent sedimentation, road crossings. Again, it is a 
very complex issue with lots of pieces involved.
    Mr. Schaffer. I have one more question. I am trying to beat 
that yellow light there. That is with respect to the 
Department's proposal on the Stabilization Act of 1999, the 
second point that you mentioned in your testimony, is to 
provide increased payments above the payments projected under 
the current law to compensate States for national forest lands 
that are not available to the local tax base.
    Is that increase in payments, is that--is there a figure 
laid out for that over the long term? Because with the 
projected decline in fund payments of a 25 percent fund, you 
are proposing to do better than the declining number there. Or 
is there a stabilized expenditure that you have in mind that 
would actually increase something on the order of--I don't 
know, even keeping pace with inflation, I suppose.
    Mr. Dombeck. The proposal is to stabilize it at $270 
million. Which is about----
    Mr. Schaffer. That is the light blue line.
    Mr. Dombeck. Which is about $27 million more than 1998, 
nationally.
    Mr. Schaffer. Thank you, Mr. Chairman.
    Mr. Hill. I thank the gentleman.
    Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. I was pleased to hear 
the Chairman engage the Chief in some dialogue about potential 
for working together and compromise, because I believe we--you 
know, the utmost importance that we get a guarantee, whether it 
is 5-year, 10-year or permanent, at least an extension out of 
this Congress, preferably more than 5 years.
    And going to the issue of 5 years, Mr. Douglas, I am 
curious why the coalition chose this 5-year figure for the 
guarantee. And I go to your testimony and you say, ``We 
strongly believe these recommendations can and should be 
formulated in the first 3 years of the safety net.'' okay. That 
is, you know, not unreasonable, that a group of people could 
get together and come up with some recommendations, which of 
course are not binding.
    But then it says, ``It is further our belief that these 
recommendations should be enacted into law within 2 years of 
their receipt by Congress.''
    Have you been watching this body lately? I mean, no 
offense, we should----
    Mr. Douglas. My expectations irrespective of the past 
performance.
    Mr. DeFazio. Really, a point to that is the 5 years as a 
potential problem. I think it may be partially the perspective 
of counties that don't have guarantees now who are going to be 
ahead during the 5 years and counties that do have guarantees 
now who are looking at a cliff. That is part of the difference 
I think of perspective. From my counties, we are looking at the 
cliff and we have been the most public timber dependent 
historically in the past.
    The other thing I raise a question about is why you would 
take the money--I know the chairman went to the issue here, we 
funded the guarantee by finding a tax break that was used by 
log exporters and rescinding that tax break, the current 
guarantee. And as I understand that has now gone back into 
place.
    So I think there are some interesting places we could look 
for revenue offsets to meet the chairman's concern that it 
doesn't come out of Social Security, which I share. But to take 
it out of Forest Service budget--and I will ask you a question 
in a second, but let me give you my perspective--I don't think 
Forest Service has enough money today to do what we are asking 
them to do.
    You know, the surveys that the Chief referred to not only 
go to streams, down to class three, but they also go to 
wildlife that only shows up or is detectable at certain times 
of the year in terms of mating. And that--I really find that, 
in part, the frustration the chairman and others had about the 
implementation of the Clinton forest plan has gone to the fact 
that they haven't been able to complete all these surveys.
    I really don't think we should look at cutting their budget 
to fund guarantees to counties. I would hope this would be an 
area where we might seek some compromise if we could find 
another revenue source. Is that possible, do you think?
    Mr. Douglas. I think we have several possibilities here. 
First of all--we believe that the bill, first of all, doesn't 
say that the Forest Service has to cut their budget. The bill 
says the revenues can come out of appropriations and can come 
out of revenues. Now, if one assumes that revenues are a fixed 
pie and we can't do anything about that, then that leads us to 
severe encroachment, in some people's minds, on the Forest 
Service's budget. With respect to that, you have a $3.4 billion 
agency; and our costs for doing this above the current owl 
payments are about $200 million or so.
    We don't see this as a sizable encroachment upon this 
agency's ability to manage, especially when you take into 
account the fact that they have at their disposal a renewable 
resource that needs considerable work. And some of that is fuel 
reduction, a substantial fuel reduction all across the United 
States.
    The last time I testified before this Committee, I held up 
the map that is behind me--and I know you are familiar with it, 
so I won't do it again--that has--in addition to this 40 
million acres that we have talked about being catastrophic fire 
danger, we are proposing that that number of acres the Forest 
Service itself has will be suffering greatly from trees dying, 
the total amount being 58 million acres. We believe if we just 
do the appropriate forest health management and fuel reduction 
work in the near term that that does not have to be the kind of 
encroachment on the Forest Service's budget that would happen 
if we do nothing.
    So I think we do have some compromise points, Congressman, 
that we can certainly work on.
    Mr. DeFazio. Thank you, Mr. Douglas, on that point. I guess 
now I am running out of time, but I just want to make a point 
here I made to my counties, I made to NACO. I was a county 
commissioner; I served on the NACO National Resources Committee 
when I was a county commissioner. Judge Dale White from Oregon, 
from the other side of the aisle, was a tremendous chairman of 
that committee and, you know, has recently retired after many 
years of service.
    But I have to tell you we did not drive Federal forest 
policy. All the resolutions and all the things we adopted, you 
know, had this much impact on Federal forest policy. The 
counties, the schools together are not going to drive Federal 
forest policy. I think it is a divisible question. We can and 
will have the debate ongoing over Federal forest policy in this 
Committee and maybe on the floor of the House for years to 
come. But I just want to urge everybody, you know, for the sake 
of the counties and the services and the schools and the kids 
to keep their eye on the money and be flexible in how we go 
forward and get a bill adopted this year. Because I think if we 
go into the presidential election year, we are not going to get 
a bill. And then we are that much closer for my county, the 
precipice, and two more years into lack of resources in your 
county.
    So thank you, Mr. Chairman.
    Mr. Hill. I thank the gentleman.
    Mr. Sherwood.
    Mr. Sherwood. Thank you. This weekend I was reading 
``Breaking New Ground,'' Gifford Pinchot's book, and we seem to 
talk here as if the science of good forestry management is 
something new. He went to Europe to learn it in the last 
century, and then came back and set up the original BL forestry 
school in Milford, Pennsylvania. And he talks with great zeal 
in there about the perfectly managed European forests and how 
they had communities that depended on them and created this 
sustainable resource.
    So, this, while we are--somebody said, We wish it was as 
easy as rocket science. It is a moving target. It is more 
difficult. It is not exactly new. And we have all these timber 
companies in the country that manage forests and make money at 
it. And the United States owns these huge reserves. And I think 
that is what the people from the forest counties are here 
telling us, that if we, through national policy, would direct 
the Forest Service to run those like a business, there would be 
money to go around.
    Now, we have more problems than that, right, Mr. Dombeck?
    Mr. Dombeck. I have got all I can handle right now, but, 
yes, there is lots of debate over the issue.
    Mr. Sherwood. Would you say--what would be your comment, 
what has the endangered--what has been the result on the health 
of our national forests on the endangered species laws?
    Mr. Dombeck. Of course, it has added much to our work load 
with regard to the surveys, the compliances that are required 
and all of those kinds of things that we do with regard to unit 
costs for operation, as have legislation like the Historic 
Preservation Act and other kinds of things. But I would just 
reaffirm that the larger objective of this is to maintain the 
integrity of the watersheds of the habitats and the forest 
health. And I have stated my opposition many times to zero cut.
    The fact is, we do need to do work out there. But I want to 
also point out, in many cases, much of the 40 million acres at 
risk that we talk about, the values are not there to carry the 
cost to management because the overstory has been removed some 
time ago, and we have--through total fire suppression, we have 
got, you know, high fuel build-ups and we result in the whole 
debate of low cost timber sales which, you know, in my view we 
should--we ought to focus on what we want on the land rather 
than--because if the values aren't there, that doesn't mean 
that we should let the forest health conditions continue to 
persist.
    Mr. Sherwood. I certainly agree with that. But it would 
seem like the money that is realized from selling very valuable 
stands could be used to used to do timber stand improvement 
work in ones where you need to reduce the fuel load.
    A comment that you made and I am looking at my--we are 
talking about water quality? And do you agree that well-managed 
forests and water quality go hand and hand?
    Mr. Dombeck. Exactly. In fact, the cleanest water in the 
United States is coming off of our forests.
    Mr. Sherwood. Sure. And you know the big water companies in 
the East have huge timber holdings because that is how it 
works. But you were talking about--did you say in Arizona where 
you are cutting everything 16 inches and under?
    Mr. Dombeck. That is, project pilots that are being tried. 
There are a lot of different things that are being tried around 
the country. I think one thing as we continue the dialogue here 
in Washington, I always feel the more we can get out in the 
woods and the forests and look at things, the more we will 
arrive at an agreement as to what management should be. Because 
it really focuses individuals on the land and what we want on 
the land versus, you know, an economic debate or a debate about 
education in the sense of how we fund education which is part 
of what we are talking about here.
    Mr. Sherwood. I understand you are thinking about 
decoupling it. But our opposition to decoupling it is, then it 
takes away the pressure to manage the resource. And it also 
takes away the incentive to keep these gentlemen's communities 
viable and working. And we just send them a check and forget 
about them. Well, that is not what they want and that won't 
work well in the long run. And I don't know how we get to the 
issue where we can get your foresters back to doing what they 
do best, managing forests. And I think that is the dialogue we 
have got to have.
    Mr. Dombeck. I would like to just do, while we are sort of 
philosophizing, is make a couple of points.
    If we take a look at the public domain lands over the 
history of the United States where we started out with 1.8 
billion acres outside of the 13 colonies--and that includes 
Alaska, the Gadsden Purchase and so on--and this land was used 
for a variety of things over time; you know, for example, if 
you would have been a lieutenant general in the War of 1812 and 
you retired from service you wouldn't have got a monthly check, 
you would have received 1,100 acres of land. If you were a 
private, you would have gotten 160 acres of land. So the land, 
in essence, was the wealth of the Nation. We didn't have to 
have an income tax. We went through the homestead era and then 
again the establishment of the national parks, some of the 
watershed problems that led to the establishment of the 
national forests that led to the Taylor Grazing Act.
    The values of what the public cherishes, national forests 
and public lands today, you know, are well beyond what they 
were, say, at the turn of the century. And again my point is if 
the contribution of national forest to the gross domestic 
product is something in the neighborhood of $123 billion a 
year, that comes from a variety of areas--you know, recreation, 
hunting and fishing opportunities, value added in local 
communities, hotels, vacations.
    We have got 3,000, you know, mining operations on national 
forests. We have got, you know, as I said, 5.8 billion board-
feet of timber under contract today. Wouldn't it seem that we 
should look more broadly as we look into the 21st century 
rather than stay tied to the controversy that we are subjected 
to as--I can give you another example.
    In my first 3 months in this job we have about $26 million 
worth of timber sale enjoined in Texas. Well, imagine, there 
sits the school system in five counties, I believe it was, with 
$5 million they are not going to get. And it is not my 
decision. It is not the decision of Congress, or the 
administration's decision. It is the judicial process and the 
litigation and the controversy associated with these issues 
that holds these social services subject to this uncertainty.
    And how do we get beyond that? Do we get beyond it by tying 
ourselves more to the controversy? Or do we look for more 
common ground in the broader values? I think, in fact, this is 
a very good dialogue for us to be having here as we work our 
way through what the best opportunities for solutions are.
    Mr. Sherwood. Just one.
    Mr. Hill. One last question.
    Mr. Sherwood. But it seems obvious to me if the people who 
live in those areas had faith, that that would work for them, 
they would just say, send us a check. But I think they have 
more faith in free enterprise and old-time values, so to speak, 
and they want us to keep the pressure on the system. And my 
short experience around here would say that we need to keep the 
pressure on the system.
    Mr. Hill. I thank the gentleman for the comment.
    Just following on, Chief Dombeck, we do need to get beyond 
the controversy. But Congress created this maze of conflicting 
instructions and values and Congress can straighten that out. I 
mean, Congress can move this from the judiciary by clarifying 
what its intention is.
    Now, the problem is that Congress isn't necessarily of a 
single mind in how it might want to get that done. But let's 
talk about that for a minute, because there is a model out 
here, the Quincy project.
    Now, originally the Forest Service didn't support Quincy 
legislation, and then later did support it. I think it passed 
by an overwhelming margin. One of the things that the 
coalition's bill intends to do is to try to bring that model to 
the long-term solution of how we manage the resource. Why do 
you object to that?
    Mr. Dombeck. I guess I am not sure what specific parts, you 
know, of the model you are talking to. We are working 
diligently to implement the Quincy Library Legislation through 
the process. And, you know, as I understand it, our employees 
in California are making good progress at that.
    Mr. Hill. I am talking about taking the concepts that are 
imbedded in Quincy, getting a broad spectrum of people, this 
broad coalition of 500 groups, counties and interests together 
to help recommend to the Congress and to you a long-term 
solution to the controversy associated with the management of 
the forest. What is wrong with that?
    Mr. Dombeck. I don't think there is anything wrong with 
that. In fact, I think that is what we are doing right here in 
this process. And as I see it, the goals that we have 
identified here, there is a lot more agreement than there are 
differences.
    Mr. Hill. So you don't object to that element of the 
coalition's bill that would create an advisory group to study 
this issue and make recommendations to you and to the Congress 
in terms of how we can address this conflict in values with 
regard to the forest management?
    Mr. Dombeck. My understanding--and I will ask Sandra for 
some help here, is that advisory group also makes, in a sense, 
resource management decisions.
    Mr. Hill. It makes recommendations. It doesn't make any 
decisions in the bill.
    Mr. Dombeck. Okay, makes recommendations. And given the 
complexity of issues and laws that we have to deal with today, 
is one more layer going to make it easier for us? Is there 
anything on the detail?
    Mr. Hill. So the question, now, I am asking you, do you 
object to that or do you support that? It is one or the other. 
Do you support that provision of the bill or do you object to 
that provision of the bill?
    Mr. Dombeck. I object to it as I understand it to be now. 
But I am certainly willing to take a second look to talk 
about--look and see where the middle ground is from the stand 
point of how we implement it.
    Mr. Hill. Mr. DeFazio's comments were, we can compromise on 
this if we just give up the long-term solution. These 
communities want to have forest management in a way that 
sustains the forest, sustains the health of the forest, and 
sustains their economies. Your recommendation doesn't do that 
nor does Mr. DeFazio's bill. It continues the controversial 
conflict-based process we have today. We are trying to find a 
way out of that.
    We are saying that the Quincy model is a model that we 
could draw upon to help the Forest Service get through this. 
The question is, do you support the idea of using that model 
for a broader discussion than just the issues that were 
addressed in the Quincy project?
    Mr. Dombeck. I certainly support looking at it. As I see 
the things that are happening around the country, there are--I 
think for us to look at the array of models that are out there 
and to pick the best from each, I think is a very wise thing to 
do.
    Mr. Hill. So you could support then an advisory group that 
would operate under that kind of a scenario to make 
recommendations to you and to the Congress for a long-term 
solution; is that what you are saying?
    Mr. Dombeck. Certainly in concept. But again, as I see it--
--
    Mr. Hill. You know, we will talk about that, just a 
concept. We are trying to get to common agreement here. If we 
could get that far, it would be great.
    Mr. Douglas, you brought together a diverse group of 
people. It is an impressive group. How did you get that done?
    Mr. Douglas. We essentially sponsored a couple of national 
conferences, our school coalition in California, the 39 
counties, because we had this basic hypothesis that there were 
a lot of people like us across the Nation who were struggling 
with this issue, both county and school people. The hypothesis 
proved to be very true. And in fact, as people have gotten to 
know about our coalition, they have flocked to become a part of 
it.
    When I appeared before you a little over a month ago, we 
had 386 members. We have over 500 now. We are not having to 
convince people from forest counties--both school people, 
county supervisors, people from chambers of commerce, people 
from business, people from labor--we are not having to convince 
people to do this. This is, very frankly, Mr. Chairman, the 
easiest sell that I have ever had.
    Mr. Hill. This issue goes beyond just payments, it goes 
beyond just schools?
    Mr. Douglas. Yes, it does.
    Mr. Hill. Do you want to elaborate on that?
    Mr. Douglas. I did in my written testimony, and I touched 
on it in my oral testimony. The coalition strongly believes 
that both the short-term solution, the infrastructure piece, 
needs to be taken care of immediately because of the serious 
needs and the fact that we have gone a decade in these 
communities with the deterioration happening that has. There is 
substantial and serious needs.
    There is also a high level of eroded trust in forest 
counties, both in county governments and the citizens of forest 
counties relative to the faith that people in Washington and 
the Federal agencies will truly do something about this. The 
idea of accepting the decoupling proposal and separating forest 
management issues from the support of schools and county 
government is not something that people in our coalition have a 
high level of trust in. One of the reasons that we set up the 
proposal the way that we did was to rebuild that trust. And I 
would emphasize what Bill Dennison has indicated here, one of 
the ways of doing that is through local management 
collaboratives such as the Quincy Library Group.
    We also believe that having a focused, over the next 3 to 5 
years, discussion looking at the best science, looking at what 
we have learned in terms of working together to find the middle 
ground that is scientifically based and good management; we 
believe in strong forest health is the way to do this. And we 
think that both of those have to be part of the solution.
    As I mentioned before, this is a systemic problem that we 
are a complex social and ecological system in our forest 
counties. You cannot tease that apart and try to solve one 
piece of it without taking on the entire system. It is a 
systems issue from our point of view. You can do that in logic, 
in sound bites, and on paper; but in reality, you can't solve a 
piece of the system. You have to do it in a wholistic systems 
kind of way, and that is the reason that we have proposed what 
we have.
    We don't propose to have the solution to the long-term. 
There are those saying that the forest coalition is advocating 
to returning to the highest levels of cuts of the late 
eighties. You will not see that in any of the material we put 
out. We believe in having healthy, sustainable, national 
forests. We live there, and we want them there. And we believe 
that can be done. We believe also revenue can be generated from 
those forests and that we can have stable communities, healthy 
national forests, and we can have healthy and vital families 
living in those communities that we as educators have to work 
with to provide services to. Those are inextricably entwined.
    Mr. Hill. That is why you oppose decoupling?
    Mr. Douglas. That is correct.
    Mr. Hill. Mr. Dennison, do you care to comment on that?
    Mr. Dennison. I would agree with everything that Mr. 
Douglas said. We want to move forward and work with the 
administration, we can do the job that will be economically and 
environmentally sound, and we all can win.
    Mr. Hill. This is not about going back to the 1980 timber-
harvest levels or clear-cutting forests.
    Mr. Dennison. Not at all. The chief talked we will never 
get back to the 11 billion board-feet again. We may not, but we 
should do much better if we just take care of what is happening 
out there. We are at 3.4 billion board-feet or so now. There is 
no reason to expect that we should not be able to double that 
and do it within a sound environmental context.
    Mr. Hill. I guess one last question. Chief Dombeck, on your 
25 percent fund-payment trend projecting forward to the years 
2000 through 2004, you suggest a 25 percent reduction in 
harvest. Should I read into this that we are going to see a 
further 25 percent reduction in harvest on the Forest Service 
lands over the next 4 years? Is that what your plan is?
    Mr. Dombeck. That is our projection based on the issues 
that we have to deal with. The issues like, for example, the 
potential listing of the Canada lynx, other kinds of things 
that we see, other fisheries that are at risk, other things 
like that.
    Mr. Hill. Do you find that acceptable that we are going to 
see a further 25 percent reduction in timber harvest? Is that 
compatible with what you think that we ought to be 
accomplishing?
    Mr. Dombeck. Again to rely on the inventory and analysis, 
the forest risk mapping that we have done, I think provides us 
more and better information to do that. But we really need to 
let watershed by watershed, timber stand by timber stand tell 
us what the harvest levels should be.
    Mr. Hill. I am not disagreeing with that. Do you believe 
that that level is a satisfactory--is this created by external 
causes or is this a consequence of the internal policy, the 
decisions of the administration and implementation of policy?
    Mr. Dombeck. Let me ask Sandra to elaborate on this since 
she was involved in putting this together.
    Ms. Key. It is interesting that you ask this because this 
is one of the things that several have said, why these trends 
and where are they coming from?
    Yes, we think there are many things going on in terms of 
these large ecological issues that we are dealing with. But the 
estimates are a combination of our experts, if you will, 
looking at market trends, what species are selling, what the 
prices are that they will get, and what our budgets are going 
to be with as much accuracy as we can predict them and what 
that will do to our timber program.
    Mr. Hill. Do you think this is good?
    Ms. Key. Do I think it is good or Chief Dombeck?
    Mr. Hill. Chief Dombeck, are you satisfied that these are 
satisfactory levels?
    Mr. Dombeck. Not necessarily.
    Mr. Hill. It is kind of a fudge?
    Mr. Dombeck. For me to say a yes or no, what I have got to 
do is rely on the science and the experts as we blend the needs 
of local communities with the best information that we have.
    Mr. Hill. Obviously the Forest Service sets timber sales 
which are interrupted by court decisions. My question is are 
these declining harvests a consequence of external factors or 
internal decisions on the part of the Forest Service?
    Mr. Dombeck. Based upon Sandra's comments, likely a 
combination of both.
    Mr. Hill. Okay. Mr. Schaffer, I think you wanted a second 
round of questions.
    Mr. Schaffer. Thank you, Mr. Chairman. I had some other 
things that I wanted to ask, but you really put your finger on 
some interesting topics. I just want to continue on with that. 
This is a frustrating conversation frankly because I understand 
the Endangered Species Act and management practices. They come 
up in--I am sorry, I missed your name.
    Ms. Key. Sandra Key.
    Mr. Schaffer. As Ms. Key indicated, the marketability of 
certain species and what the market bears. But the answer to 
that question that the Chairman just asked, is this 
satisfactory and is it moving in the right direction, I can't 
accept the head of the Forest Service saying gee, that is just 
kind of the way that it is.
    You know, this is a time when we really need some 
passionate leadership out of the Forest Service in helping to 
direct the direction of our country and send the message up the 
chain and to the administration as to which direction we ought 
to go.
    I would really hope, my goodness, you have one of the 
greatest national assets that our country possesses in terms of 
a resource and a resource base. You have probably some of the 
most enthusiastic energy that you have among local elected 
officials. And it seems like everything is there to make for an 
economically viable operation that maintains and sustains the 
health of our national forests but at the same time increases 
the ability for us to see real progress on clean water and at 
the same time increases the revenue necessary to, as a result 
of that relationship and the energy at the local level, to find 
more cash for schools.
    I am curious, the other committee meeting I am missing 
right now is the other committee I serve on, which is the 
Education Committee where we scratch our heads every day 
wondering how we are going to get more dollars to classrooms. 
And the great debates between the executive branch and the 
legislative branch about how to get more dollars to classrooms, 
hiring a hundred thousand new teachers, where does the Forest 
Service come in these discussions? Do you get calls from the 
White House that say how can you help us squeeze more dollars 
out of your particular agency to help in this problem?
    Mr. Dombeck. With the education issue?
    Mr. Schaffer. Yes.
    Mr. Dombeck. I don't get calls from the White House asking 
about that, but we have had hearings on the Youth Conservation 
Corps programs and other things like that which contribute to 
understanding of that. And, of course, our employees do a lot 
with regard to presentations at local school districts and a 
variety of programs like that.
    The one thing that I do want to comment on with regard to 
the question of the graph and then the timber harvest, part of 
the problem is that we are just focused on one resource. If we 
take a look at the recreation trends and the other use trends 
on the national forests, they are all up. As I said to begin 
with, I think where we are as a society, is we are taking a 
look at a different balance and there is debate involved in how 
we achieve that different balance.
    Timber harvest is a very, very important part of that. But 
I find it fascinating that as we take a look at 1.7 million 
vehicles on Forest Service roads associated with tourism and 
recreation, I ask myself, why is it that we are just talking 
about timber? Timber is important, but how is it that we 
capture the other values that are out there as society looks at 
them.
    Mr. Schaffer. Have there been any proposals from the Forest 
Service on how they can achieve their goals and do so in a way 
that helps maintain a traditional level of funding that we have 
built into school budgets and county budgets for years?
    Mr. Dombeck. I think if we look at the variety of things 
that are on the--proposed through the appropriations process 
where we look at soil and water programs, recreation programs, 
at maintaining the infrastructure at national forests, we are 
making significant investments in forest health issues, and we 
are looking at a variety of pilot projects. There is an awful 
lot of work that needs to be done in your State with regard to 
forest health. We are looking at investments in wood 
technologies to provide markets for lower value woods to 
secondary markets. The value added, a variety of things.
    Mr. Schaffer. I think we are moving off the subject here a 
little bit, and that is you have greater amounts of recreation 
in national forests and other activities which represent some 
level of value that is taking place. Has tapping into that 
economic enterprise or portion of the national forest revenue 
for the benefit of school districts and forest counties been a 
part of your proposal? Has there been some effort on behalf of 
the Forest Service to include using that economic engine to 
help?
    Mr. Dombeck. I think what we do by proposing a stable 
level, a mandatory level that--that spreads the source.
    Mr. Schaffer. But those funds are not derived exclusively 
from the management of forests. It comes from seniors and kids 
through the general fund budget. That is the problem here. This 
decoupling effort is not a good idea.
    I think what we are hearing from local governments is that 
maintaining this close relationship between active management 
and sound management for economic and environmental objectives, 
utilizing the expertise of those who live in these areas, is a 
better formula. It is one that helps bridge this span between 
Washington, DC and Oregon or California or Colorado.
    What I see is these folks to your left trying to maintain 
that relationship, and I see you trying to suggest, let's 
separate the economic benefits from the economic activity and 
fund it through the general fund budget. I think they are 
right.
    Mr. Dombeck. And I appreciate your judgment on that.
    Mr. Schaffer. I wish you would appreciate their judgment, 
too.
    Mr. Dombeck. We do, and the reason we are here is to 
continue the dialogue.
    I do want to respond to another one of your points and that 
is what are we doing with the 40 million acres. The fact is we 
are on a trend to have that taken care of by 2015, and by the 
year 2003 we hope to be treating 3 million acres a year as we 
begin to work down that backlog. So there is a--significant 
progress has been made. We have a lot more to do. There is a 
plan and an approach. We bring that to Congress each year for 
you to fund.
    Mr. Hill. The gentleman's time has expired. I think this 
has been a very interesting hearing.
    First of all, Chief Dombeck, I don't think anybody here 
disagrees with the fact that we understand that there is a 
different balance. We want an ecological and economic balance 
as well. I think if you have read any of this testimony, 
everybody here agrees with that, and nobody here believes that 
the only purpose of the forest is for timber harvest. I don't 
think that anybody has made that claim or that case.
    We care deeply about the forest, every bit as much as 
anybody in the Forest Service does. We also value the tourism 
and the recreational opportunities, both in terms of those 
personal experiences as well as the economic aspects of those. 
That is why we have talked to you about road closures and our 
conflict about a top-down transportation policy of the 
administration. And there are other values, motorized vehicle 
use and berry picking and hunting and all of the things that we 
have been here to advocate for.
    So I don't think that anybody here in this hearing room 
disagrees with you about that. I think that managing the 
catastrophic fire risk is one way to help strengthen the 
economies of those communities. But I will tell you what the 
GAO testified to a couple of weeks ago is that you don't even 
have a team in place or a leader to develop a strategy for 
dealing with this risk.
    Thirty-nine million acres are at risk. You won't even begin 
to address that risk by the year 2025 unless you ask for 
substantially more funds than you are asking for now. You are 
treating more acres, but you are treating the acres that really 
don't count. The at-risk acres are being neglected by the 
Forest Service, and that is supported by the internal 
documentation of the Forest Service.
    The one thing that I think has come out of this hearing, we 
need to find a safety net for these counties. We need to find a 
revenue source, and we have to agree to a term.
    Decoupling is not going to happen, Chief Dombeck. It is not 
going to pass this Congress so we have to set that aside and 
figure out how to deal with this issue. We need a long-term 
solution to diminish these external factors that are driving 
your decision-making process, and we need a collaborative 
policy and effort to help try to improve how we deal with this 
issue and you do.
    I hope that you can come away from this hearing having 
heard that and we can work together to draft legislation to 
help these counties and these communities.
    With that, the hearing is adjourned.
    [Whereupon, at 4:50 p.m., the Subcommittee was adjourned.]

                                    
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