[Senate Hearing 108-7]
[From the U.S. Government Publishing Office]


                                                          S. Hrg. 108-7
 
                   PROPOSED FISCAL YEAR 2004 BUDGET 
                     REQUEST FOR THE FOREST SERVICE
=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

  TO RECEIVE TESTIMONY REGARDING THE ADMINISTRATION'S PROPOSED FOREST 
                    SERVICE FISCAL YEAR 2004 BUDGET

                               __________

                           FEBRUARY 13, 2003


                       Printed for the use of the

               Committee on Energy and Natural Resources








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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

                       Alex Flint, Staff Director
                     James P. Beirne, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                Frank Gladics, Professional Staff Member
                David Brooks, Democratic Senior Counsel




                            C O N T E N T S

                              ----------                              



                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     2
Bosworth, Dale N., Chief, USDA Forest Service, accompanied by 
  Hank Kashdan, Director of Program and Budget Analysis..........    11
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     1
Johnson, Hon. Tim, U.S. Senator from South Dakota................     4
Rey, Mark, Under Secretary, Natural Resources and the 
  Environment, Department of Agriculture.........................     5
Smith, Hon. Gordon, U.S. Senator from Oregon.....................    19
Thomas, Hon. Craig, U.S. Senator from Wyoming....................     3
Wyden, Hon. Ron, U.S. Senator from Oregon........................    20

                                APPENDIX

Responses to additional questions................................    39


                   PROPOSED FISCAL YEAR 2004 BUDGET 
                     REQUEST FOR THE FOREST SERVICE

                              ----------                              


                      THURSDAY, FEBRUARY 13, 2003

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:37 a.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Pete V. 
Domenici, chairman, presiding.

          OPENING STATEMENT OF HON. PETE V. DOMENICI, 
                  U.S. SENATOR FROM NEW MEXICO

    The Chairman. Good morning, everyone. Well, we are almost 
on time, Senator Bingaman. That is pretty good for these days.
    Good morning, everyone. It is a pleasure to welcome Under 
Secretary Mark Rey and the Chief of the Forest Service, Dale 
Bosworth, to appear before the committee in general to discuss 
the 2004 budget request for the Forest Service.
    We have had a chance to look at it, most staff have and 
most Senators, but obviously it is difficult for us to answer 
our own questions as we read it. We are going to have to ask 
some questions about why you did certain things. We hope you 
will be as frank as you can.
    I can tell you at the outset I am totally aware of what 
went on in putting a budget together. These are difficult 
times. You were charged with tradeoffs and certainly in that 
process I do not challenge your exercise of discretion in terms 
of the exercise of prioritization, but I do believe that the 
budget before us raises some very difficult questions for us 
because it is pretty obvious that some of the areas that are 
not adequately funded are going to require funding before the 
year is out. We are sort of growing weary of not funding these 
very much needed areas, either expecting to fund them later or 
to get the money by trading off during the year with other 
accounts being used.
    I myself would like very much this year, Senator Bingaman, 
to have this committee inform the Budget Committee what it is 
we think is inadequate and why, and I would like to present the 
case to them in the Budget Committee that if they want to be 
confronted with emergencies where we have to break their 
budget, then leave it as is. If they want to be realistic, they 
ought to add some things that are going to be needed that we 
are probably going to agree on here in the committee on a 
bipartisan basis.
    First of all, I understand that the $604 million that you 
propose for fire suppression is equal to the 10-year average. I 
am now speaking of the 10-year average as adjusted for 
inflation in the area that you have provided the $604 million 
that I am referring to. I am troubled by the proposal because 
to zero out funding in the rehabilitation and restoration line 
item, while I understand that these programs have always been 
job one and will be handled out of other line items, I worry 
about the consequences of other programs if we suffer a 
serious, bad fire season again this year. I am sure that we 
will get a number of questions on this issue. As soon as 
Senator Bingaman has made his opening remarks, I would hope 
that you would address that serious problem that we already 
see, and it is kind of a glaring problem.
    I note also that there are a number of proposed reductions 
that I think are probably the result of what I just explained, 
tight budgets. But I know that you will help us understand how 
you made the choices. While some of us like to see important 
private land acquired and placed into Federal management, I 
think it is pretty obvious that when budgets are this tight, it 
comes to many of us how are we going to manage more land when 
we cannot manage what we have now got. I am not suggesting 
something as dramatic as getting rid of land, but it does seem 
to me that we do have a situation that cries out for some kind 
of solution other than business as usual on the acquisition 
side with little or no significant increases available to 
maintain what we have got.
    The deferred maintenance and infrastructure improvements 
account. Let us talk about it. I note that we have this 
maintenance backlog, and that is a clear symptom of the need to 
focus on managing our current Federal estate.
    And finally I note that you recommend funds for economic 
action programs and Pacific Northwest assistance programs. I 
hope you will describe what other Department of Agriculture 
programs can back-fill for these needs. Obviously, being from 
New Mexico, a little-known fact is it is a region that actually 
saw a more precipitous drop in timber sales in the mid-1990's 
than Oregon and Washington did. I often wondered just how long 
these programs could be continued.
    I will first turn to our ranking member, Senator Bingaman, 
and indicate that it has been a pleasure working with you so 
far. I hope that continues throughout the year.
    Senator Bingaman.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much. Thank you for having 
the hearing.
    Let me just mention a couple of items that are of concern. 
As a general matter, I understand the budget that we are being 
presented with is essentially a flat budget. That is probably 
about what one would expect given the fiscal situation that we 
are in. At the same time, the need, particularly related to the 
wildfire problem that we have in the West, calls for something 
other than that in my view. That concerns me.
    As I understand what is being proposed, there is about $416 
million proposed for activities to help reduce hazardous fuels 
in anticipation of fires. This is just a very slight increase 
over what was appropriated in 2002. If we do have another bad 
fire season--all indications are that we are going to have 
another bad fire season--I do not think that maintaining level 
funding for wildfire management is going to be adequate.
    This past year there was over $1 billion that had to be 
transferred from other accounts in order to help cover fire 
fighting costs. I think the omnibus appropriation bill we are 
going to be considering today and tomorrow contains money to 
try to reimburse those accounts. I do not know that they are 
totally reimbursed. In fact, I believe they will remain at 
least a couple of hundred million dollars short of the amounts 
that were originally appropriated for them.
    The chairman mentioned the proposal to zero out funding for 
rehabilitation and restoration of burned areas. That concerns 
me as well, and I would be anxious to know the position of the 
Forest Service on that.
    It appears that we are also moving away from giving 
priority to wildland-urban interface areas in the allocation of 
the funds. At least that is the impression I get. I would like 
to hear further about how the agency sets its priorities at 
this point. The Forest Service is proposing to treat about 
170,000 fewer acres in this wildland-urban interface than is 
currently targeted, as I understand it.
    I do think it is unfortunate that we have seen such a 
proposed cut in Federal land acquisition, about a 70 percent 
cut from what was appropriated last year. That particularly 
affects landowners who are, in many cases, surrounded by 
national forests and have been waiting a long time in an effort 
to sell their lands.
    I do want to also ask a question, after we hear testimony 
regarding the concern that some have expressed about a shift 
toward favoring more commercial timber harvesting and see if 
that is something that is an explicit policy or if that is not 
in fact what is happening. I would like to know what the Forest 
Service position is on that.
    I very much appreciate your scheduling the hearing, and I 
look forward to the testimony.
    The Chairman. Thank you very much.
    I was going to proceed right to the witnesses, but since 
there are only two Senators, it would not take too much time if 
you would like to make a few comments.
    Senator Thomas. Thank you very much.
    The Chairman. I will be pleased to yield to you and then, 
Senator Johnson, we will give you an equal amount of time.

         STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR 
                          FROM WYOMING

    Senator Thomas. I appreciate it and I will be brief.
    Welcome, gentlemen. Delighted to have you here.
    I just wanted to comment on some general areas, and perhaps 
as you go through your specifics, you might see how some of 
those dollars relate to some of the issues. Fire suppression, 
obviously, is one of the ones that is most important to us.
    I think for those of us particularly who live where we have 
50 percent Federal lands in our State, access to these lands is 
important to us, whether it be roadless, whether it be 
wilderness. Wilderness studies seem to go on perpetually on 
some of those things.
    Of course, management overall, but management plans, some 
of which go on for years beyond the 10 years that is supposed 
to be the case I understand.
    Local cooperation and jointly working with local people and 
local governments. I am going to put in a bill that has to do 
with the cooperating agency and see if we cannot make that work 
a little bit better than we have in the past.
    At some point we are going to be talking about fee 
demonstration projects in parks, and whether or not that is 
useful or works in the forests is interesting to me as well.
    So those are the main things, and then management of 
course, regional level and so on is very important. So these 
are just things that, as I look at the budget, I will be 
looking to see what we can do hopefully to strengthen those.
    Thank you. I look forward to your comments.
    The Chairman. Thank you very much, Senator.
    Senator Johnson, do you have a few observations?

          STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR 
                       FROM SOUTH DAKOTA

    Senator Johnson. Just very briefly. I will submit a full 
opening statement.
    Just let me, first, welcome Under Secretary Rey and Forest 
Service Chief Bosworth to the committee and express my 
appreciation for the personal attention that you gave to our 
circumstances in the Black Hills National Forest since last 
summer while we had two particularly large fires underway in 
that very unique forest with the huge amount of human interface 
that we have in the national forest there in South Dakota.
    I appreciate what you are attempting to do. I have some 
differences of opinion about the budgetary aspects of what you 
are being asked to work with and I appreciate that those are 
not numbers that you chose necessarily. They were numbers that 
you were being asked to work with.
    But government is a matter of setting priorities. That is 
what we do, and this is a rich country. We can do a lot of 
things. We cannot do everything, but we can do a lot of things. 
But I simply have to express some concern as we embark on the 
2004 budget process here. The budget resolution--hopefully we 
will have one this year and more timely appropriations than we 
had in 2003.
    But I have to share some concern about recommendations that 
we can apparently afford over $100 million in tax cuts this 
year, but we are being told that we should have a flat line 
budget in funding hazardous fuel reduction and zero out funding 
for rehabilitation of burned lands and require our Forest 
Service to continue to borrow from accounts falling behind, I 
am afraid, with the costs of the fire rehabilitation. And this 
worries me a great deal. We have, I am told, a 2003 shortfall 
of nearly $600 million from last year's fire season, and this 
is going to continue to cause us, I think, some serious 
problems.
    I look forward to some questions specifically on the Black 
Hills Forest at the appropriate time, but welcome to this 
committee.
    [The prepared statement of Senator Johnson follows:]
         Prepared Statement of Hon. Tim Johnson, U.S. Senator 
                           From South Dakota
    Thank you, Chairman Domenici and Ranking Member Bingaman, for 
scheduling this important hearing to receive testimony and review the 
Administration's Fiscal Year 2004 Forest Service budget. I appreciate 
Under-Secretary Mark Rey and Forest Service Chief Dale Bosworth setting 
aside time in their schedules to appear before this committee, and I 
look forward to probing the details and policy implications of the 
budget blueprint.
    The funding priorities in the Administration's budget raise three 
key questions toward protecting and enhancing America's National Forest 
and Grassland system.
    Through a series of administrative actions, the Forest Service and 
other federal land agencies have sought to expedite fuel reduction 
projects, hasten the administrative appeals process, and propose new 
rules for land resource management plans. Additional legislative 
proposals seek statutory changes that limit the public involvement in 
the management of public lands. Understanding how these interconnected 
policies improve and enhance our forests and rangelands, while 
protecting our communities is a key challenge for our witnesses.
    The 2002 fire season burned millions of acres resulting in fire 
suppression costs in excess of $1.4 billion. The devastating 2002 fire 
season spurred action for the current basket of proposed land 
management policies. However, the President's budget blueprint holds 
the line on funding crucial hazardous fuel reduction projects and 
zeroed-out funding for the rehabilitation and restoration of burned 
lands. I am concerned that the proposed budget fails to provide 
adequate resources for the types of on-the-ground activities these new 
rules and procedures require.
    Finally, to some members on the committee, the Forest Service 
always appears to be playing catch-up, borrowing from non-wildland fire 
accounts to cover the recurring, yet somehow unanticipated costs of 
fire. These interagency transfers result in delaying important capital 
improvements and disrupting the daily functions of the National Forest 
System. With a Fiscal Year 2003 shortfall of $600 million from last 
year's fire season, I am deeply concerned how this shortfall will be 
absorbed within the Forest Service budget.
    Mr. Chairman, thank you for holding this hearing and I look forward 
to hearing from the witnesses.

    The Chairman. Thank you very much.
    Let us proceed. We will make your entire statement part of 
the record now as to both of you. Would you proceed to 
summarize them so that we will have some time left over. Thank 
you very much to both of you. Please proceed.
    Secretary Rey, you go first.

        STATEMENT OF MARK REY, UNDER SECRETARY, NATURAL 
    RESOURCES AND THE ENVIRONMENT, DEPARTMENT OF AGRICULTURE

    Mr. Rey. Thank you, Mr. Chairman, Senator Bingaman, and 
members of the committee. I am pleased to join you today to 
discuss the President's fiscal year 2004 budget for the Forest 
Service, along with Dale Bosworth, Chief of the Forest Service.
    In my testimony, specifically I want to discuss the Healthy 
Forests Initiative and the President's Management Agenda. I 
will summarize and submit my entire statement for the record.
    However, before starting on those two subjects, I would 
like to first congratulate you, Mr. Chairman, on assuming the 
leadership of the Energy and Natural Resources Committee. I 
look forward to working with you and have appreciated your 
support for Forest Service programs and those of Senator 
Bingaman over the last several years.
    In fiscal year 2000, in particular, we were very 
appreciative of both of your advocacy for what was, at the 
time, referred to as the ``happy forest'' initiative, through 
which you proposed significant funding increases for Hazardous 
Fuel Reduction. It was out of that emphasis on Congress' part, 
with your leadership, that the National Fire Plan emerged. As 
the Departments of Agriculture and the Interior developed plans 
to restore the health of the Nation's forests and rangelands, 
the Forest Service's Cohesive Strategy was developed. These 
efforts, in turn, later evolved into what is now referred to as 
the 10-year Comprehensive Strategy and Implementation Plan that 
was developed along with the Western Governors and other State 
and local cooperators.
    In the late 1990's, in response to the concern over the 
risk of catastrophic fire, the Forest Service developed the 
first fire risk maps depicting condition classes of forests 
based upon fuel loads. What you will see on the map to your 
left there is the fire risk map depicting the different 
condition classes. Condition class 2 is in yellow. Condition 
class 3, which is the stands with the heaviest fuel loads, the 
most susceptible to catastrophic fire, are in red.
    The catastrophic fire seasons of fiscal year 2000 and 2002, 
the serious forest health problems highlighted in these risk 
maps, and the initiatives to address forest health represent a 
cornerstone in what is now known as the President's Healthy 
Forests Initiative. And I want to thank you for your role in 
supporting key elements of the President's emphasis, and 
perhaps during the discussion later today we will be able to 
discuss the elements of the Healthy Forests Initiative in more 
detail.
    To give you a perspective on what we see coming in this 
current year and in this coming fire year, the map on your 
right shows those areas where we predict above-normal or below-
normal risk of wildfire based on long-term weather and climate 
predictions, as well as current readings of fuel moisture. The 
area in red is where we predict a higher-than-average risk of 
wildfire during the coming season.
    There is some good news and some bad news on that map. The 
good news is that the Southwest--since as I am talking to two 
Senators from New Mexico--is predicted to be little wetter this 
year than it has been in years past. What that suggests is that 
there is a chance that the fire season will get a later start 
and that we will not be as involved as we were last year in the 
April and May fires in Arizona and New Mexico. The bad news, of 
course, is that there is still an extended area in the northern 
Rockies and in the northern plains where we anticipate a 
higher-than-average fire risk for the coming year.
    In addition to the emphasis on healthy forests, the fiscal 
year 2004 program for the Forest Service provides a strong 
emphasis on healthy government through the President's 
Management Agenda. We will be working closely with the 
administration and the Congress to assure that the President's 
objectives of efficiency, performance, and accountability are 
reflected in Forest Service operations.
    I would like to congratulate the Forest Service for its 
significant accomplishment in obtaining for the first time this 
year an unqualified audit opinion on the fiscal year 2002 
financial statements. This clean opinion for the Forest Service 
and for the entire Department of Agriculture is important, 
although I must note that this clean opinion is the minimum 
America's taxpayers should expect in the management of Federal 
funds. The Forest Service is committed to working hard to 
maintain this clean financial status, and we have an action 
plan for further improvements in accounting and reconciliation 
functions, as well as significantly streamlining the 
organization and improving the integration of budget and 
performance information.
    With that, Mr. Chairman, I would leave the entirety of my 
statement for the record and then just touch on some of the 
areas that you raised with regard to suppression funding, fuels 
treatment, rehabilitation funding, and deferred maintenance.
    Our suppression budget is funded, as it has been in past 
years, based on an average figure for wildfire costs. 
Obviously, we have exceeded that average in four of the last 
six fire seasons, and as long as we remain in a prolonged 
drought situation, there is no reason to believe we will not 
exceed it this coming year.
    That brings us, I think, to an interest in working with you 
to see if there is a better way, with this committee and the 
Budget Committee, to set up a system for funding fire fighting 
costs that does not involve us in an annual exercise of 
borrowing from other accounts in order to pay for fire fighting 
efforts.
    The Chairman. What is the dollar figure that represents 
that average? Excuse me. What is the dollar number?
    Mr. Rey. $604 million. That would be the 10-year average.
    The Chairman. Yes. That is what you are asking for.
    Mr. Rey. Right. That is right.
    The Chairman. Just to set a couple of years on record, what 
will last year's cost?
    Mr. Rey. $1.4 billion. Last year was the single most 
expensive year on record in terms of dollars spent, the second 
most significant year in terms of acreage burned. 2000 was the 
record year in terms of acres burned and the second most 
expensive fire season to date.
    The Chairman. So it does not do a lot of good for you to 
use these percentages like we suppressed all but eight-tenths 
of a percent because it is the seven- or eight-tenths of a 
percent that has cost you this $1.4 billion. Right?
    Mr. Rey. That is correct, and we, I think, have a graphic 
to show you during the Chief's testimony to that end.
    The Chairman. Why do you think we can get by with an 
average when things seem no different than last year? Have 
there been any big changes out there in the environment that 
might mitigate this?
    Mr. Rey. We are initiating a number of efforts for cost 
control, particularly on large fires. But heretofore, what we 
have done historically is try to budget a prudent amount based 
upon average statistics and then use the borrowing authority to 
supplement that. That is becoming increasingly problematic and 
perhaps that is a good reason for the Congress and the 
administration to look at some alternatives as we go forward.
    With regard to fuels treatment, both of you correctly noted 
a modest increase in fuels treatment. That increase will be 
supplemented with an additional $27 million of 2002 money that 
was borrowed for fire fighting that I think the conferees on 
the omnibus bill voted to restore yesterday. So that $27 
million will be added on top for fuels treatment work during 
this year and into fiscal year 2004.
    Also, we believe that as we get some of the administrative 
reforms associated with the Healthy Forests Initiative on line, 
we will be reducing significantly the unit cost for doing fuels 
treatment work and fuels treatment dollars will be stretched 
further as a consequence.
    You also noted that we have zeroed out the rehabilitation 
account and wondered how we would be funding rehabilitation 
work. Typically, as the Chief will explain in his testimony, we 
draw from a number of accounts to do rehabilitation work. In 
fact, the emergency rehabilitation work immediately following a 
fire has already been done because we use suppression dollars 
or fire fighting dollars for that purpose. Additionally, we 
will have $24 million in 2002 money that will be restored to 
the rehabilitation account that will augment further 
rehabilitation work in 2003 and 2004.
    With regard to the deferred maintenance question in the 
capital improvement account being zero, the budget this year 
includes a legislative recommendation to provide us the 
authority to convey at fair market value excess assets and 
facilities that are no longer of use to the Forest Service and 
to use that money to put into a capital improvement account.
    If I can digress for just a minute to show you pictorially 
what we are talking about, I am going to ask the Forest Service 
to put up a map and then some pictures.
    In the Angeles National Forest, we are faced with a 
situation where the communities have grown out into the forest 
and, as a consequence, we have isolated tracts and facilities 
that are no longer of any use to the Forest Service and no 
longer make sense for the Forest Service to own. We will point 
to a couple of those as we show you pictures of them. I think 
you have these pictures before you.
    The first picture is the Sierra Madre House owned by the 
Forest Service in the middle of one of the Los Angeles suburbs. 
That came into the Forest Service's hands some number of years 
ago. It is still part of the Government's asset base but is in 
no real sense part of the national forest nor of any particular 
use to the Forest Service. We do rent it at probably something 
less than fair market value. The second picture shows you the 
sort of neighborhood that that house is in.
    The third picture is what we call the Irwindale property, 
an isolated tract with no trees involved, also owned by the 
Forest Service in the Los Angeles Basin. It is a 9-acre site 
with sand and gravel quarry operations that we are currently 
holding for no particular purpose.
    The combined value of these tracts is about $5 million. 
That is their current market value. With the kind of authority 
outlined in our proposal, should you see fit to give us that 
authority, we would attempt to convey these kinds of isolated 
and excess properties and facilities at fair market value and 
then use that for capital improvements, in particular, the 
capital improvement for the picture of the ranger district 
office that you are looking at which is a collection of mobile 
homes grafted together. So that is one way we think that, 
without an increase in our budget authority, we can deal with 
our deferred maintenance problem. Hence, the proposal before 
you.
    With that, I would be happy to respond to any of your 
questions and turn the microphone over to Chief Bosworth.
    [The prepared statement of Mr. Rey follows:]
Prepared Statement of Mark Rey, Under Secretary, Natural Resources and 
                 Environment, Department of Agriculture
    Mr. Chairman, Senator Bingaman, and members of the Committee, thank 
you for the opportunity to discuss the President's Fiscal Year 2004 
Budget for the Forest Service. I am pleased to join Dale Bosworth, 
Chief of the Forest Service, at this hearing today.
                                overview
    In my testimony, I want to discuss the President's plans for the 
Forest Service with particular attention to the Healthy Forests 
Initiative and the President's Management Agenda. However, before 
addressing these two subjects, I would first like to congratulate you, 
Mr. Chairman, on assuming leadership of the Energy and Natural 
Resources Committee. I look forward to working with you and have very 
much appreciated the support you have given to important natural 
resource management issues faced by the Forest Service and bureaus of 
the Department of the Interior. A brief look back over the last several 
years clearly shows how your personal involvement and that of Senator 
Bingaman has provided a focus on managing natural resources today. This 
is especially true in the area of protecting the nation's communities 
and natural resources from the threat of catastrophic wildfire, a key 
focus of the President's Healthy Forests Initiative.
    In fiscal year 2000, the nation was ``awakened'' by the 
catastrophic fire that struck the Cerro Grande area of New Mexico. I 
use the term ``awakened,'' because factors that made this fire so 
serious had been the subject of expert prognostications for several 
years. As the serious wildfires continued into Montana and Idaho later 
in the 2000 fire season, we were very appreciative of your advocacy for 
what was, at the time, referred to as the ``happy forest'' initiative, 
through which you proposed significant funding increases for hazardous 
fuels reduction. It was out of this emphasis that the National Fire 
Plan emerged. As the Departments of Agriculture and the Interior 
developed plans to restore the health of the nation's forests and 
rangelands, the Forest Service Cohesive Strategy was developed. These 
efforts later evolved into what is now referred to as the 10-Year 
Comprehensive Strategy and Implementation Plan where federal, state, 
and local partnerships form a foundation that will lead to improved 
protection of natural resources and communities.
    Prior to fiscal year 2000, attention was beginning to focus on the 
vulnerability natural resources faced from catastrophic wildfire due to 
the buildup of hazardous fuels. In the late 1990's the Forest Service 
produced risk maps that highlighted what Senator Craig referred to as a 
big ``red blob'' in Northern Idaho that represented such a fuels 
buildup and serious threat to forest health. Congress responded by 
authorizing some focused experiments to restore the health and 
productivity of our forests and rangelands by authorizing the Quincy 
Library Group activities in northern California and stewardship end 
results contracting demonstration authority.
    The catastrophic fire seasons of fiscal years 2000 and 2002, the 
serious forest health problems highlighted by the risk maps, and the 
initiatives to address forest health, represent a cornerstone of what 
is now the President's Healthy Forests Initiative. I again want to 
thank you for your role in supporting and developing key aspects of the 
President's emphasis.
                       healthy forests initiative
    This past August the President announced the Healthy Forests 
Initiative in order to reduce the risks of catastrophic wildfires to 
communities and the environment. With the release of the President's 
fiscal year 2004 budget proposal, a combination of administrative, 
legislative, and funding emphases is proposed to address this need. The 
Healthy Forests Initiative builds on the fundamentals of multiple use 
management principles that have guided the Forest Service since its 
formation. These principles embody a balance of conservation and wise 
stewardship of natural resources that are valid today in accomplishing 
the objectives of the Healthy Forests Initiative.
    In the near future, the Secretaries of Agriculture and the Interior 
will re-propose legislation that supports the Healthy Forests 
Initiative. These legislative proposals and detailed attention to 
reducing the burden of unnecessary regulatory and administrative 
processes that affect management natural resource management, will over 
time, lead to federal, state and local forests and rangelands that are 
healthy and productive for the nation.
    The Healthy Forests Initiative will implement core components of 
the National Fire Plan's 10-Year Comprehensive Strategy. Fundamental to 
this effort is the outstanding cooperation that exists between the 
Forest Service, Department of the Interior, state governments, 
counties, and communities in the collaborative targeting of hazardous 
fuels projects to assure the highest priority areas with the greatest 
concentration of fuels are treated. This cooperative effort will not 
only help protect communities, it can also serve as a model for 
reducing the morass of appeals and litigation that too often has 
prevented the efficient and cost-effective execution of projects on-
the-ground. As will be discussed in detail by Chief Bosworth, the 
President's fiscal year 2004 budget supports the Healthy Forests 
Initiative.
                     president's management agenda
    In addition to emphasis on healthy forests, the fiscal year 2004 
program for the Forest Service provides strong emphasis on healthy 
government through the President's Management Agenda. I will work 
closely with the Administration and Congress to assure that the 
President's objectives of efficiency, performance, and accountability 
are reflected in Forest Service operations.
    I would like to congratulate the Forest Service for its significant 
accomplishment in obtaining, for the first time, an unqualified audit 
opinion on the fiscal year 2002 financial statements. This ``clean'' 
opinion for the Forest Service and the entire Department of Agriculture 
is important, although I must also note that this clean opinion is the 
minimum America's taxpayers should expect in the management of federal 
funds. The Forest Service will have to work hard to maintain this clean 
financial status. It will have to further improve its accounting and 
reconciliation functions, as well as significantly streamline its 
organization, improve its integration of budget and performance, and 
improve the public's access to information through improved technology. 
These needs directly respond to the President's Management Agenda.
    The Forest Service is making important progress in this area. As 
discussed in the Agency's Budget, it is improving its management of 
human resources by moving forward on competitive sourcing initiatives, 
realigning functions of the headquarters office, and consolidating 
financial management operations. The agency is implementing important 
e-government reforms, including the new National Fire Plan data base in 
cooperation with the Department of the Interior. A new work planning 
process that will tie to budget formulation and agency accounting 
systems will be operational in fiscal year 2004. A process for 
performance monitoring, reporting, and integration with financial 
information, called the Performance Accountability System will be 
implemented in 2004. Additionally, improved integration that will tie 
budget and performance outputs to the goals of the Forest Service 
Strategic Plan will be readily displayed in the President's fiscal year 
2005 budget, which is now being developed at the field level.
    In addition to the broad goals of the President's Management 
Agenda, the agency will improve its accountability in Wildland Fire 
Management. The Forest Service along with the Department of the 
Interior is the most skilled wildland firefighting organization in the 
world. However, recent criticism of how the agencies spend funds to 
suppress wildfire is of great concern to Chief Bosworth and me. In 
response to criticisms that occurred during this past fire season, 
Chief Bosworth promptly dispatched an accountability team to review 
specific expenses and policies that may have contributed to unnecessary 
expenditures. As a result of this and other efforts, new procedures 
have been established that will focus on ``least cost suppression'' 
alternatives in suppressing wildfire and eliminating unnecessary 
expenses; establish clearer financial management accountability of 
incident commanders and line officers; and provide for improved 
internal and external controls and incentives.
    Additionally, the Forest Service will fully implement performance 
measures in cooperation with the Department of the Interior that 
reflect the level of risk reduced by treatments as part of the 
interagency effort to increase accountability of Federal wildand fire 
management efforts.
    In implementing these efficiency measures, it is important to 
emphasize that firefighter safety and the protection of communities 
will not be compromised. As we focus on an efficient wildland 
firefighting organization, we must not lose sight of the fact that fire 
suppression often is an expensive operation where major costs will be 
most substantially reduced by accomplishing the goals of the 
President's Healthy Forests Initiative.
                               conclusion
    Mr. Chairman, in closing let me emphasize how important the 
President's Budget and legislative agenda for the Forest Service is. 
The management of America's natural resources on federal, state, and 
local lands has been adversely affected by polarized views on either 
the use or conservation of natural resources. For many years we have 
been able to find only very limited middle ground. Rural economies have 
been adversely affected by the significant reduction in the production 
of products and services from these lands. Communities have been 
damaged and many more are threatened by the prospect of catastrophic 
wildfire. The President's Healthy Forests Initiative, the National Fire 
Plan, and legislative initiatives to improve the ability to cooperate 
with communities, reduce or eliminate unnecessary procedural process, 
and expand contracting authority are important areas of focus for the 
Forest Service. With your help the Forest Service can accomplish a 
robust performance-based program for the nation's forests and 
rangelands, and do so in full collaboration with state governments, 
communities and Congress.
    I look forward to working with you in implementing the agency's 
fiscal year 2004 program and would be happy to answer any questions.

    The Chairman. Before you proceed, let me just ask, 
Secretary Rey, on that last issue, can you tell me what your 
current estimate of that kind of property that you just 
described as being your recommendation? What is the estimate of 
how much of that there is in dollars? How many dollars' worth 
of property is that?
    Mr. Rey. I will get you a complete list. It is broken down 
forest by forest, but I think we are talking somewhere in the 
nature of $80 million to $100 million worth of excess 
facilities and assets. Obviously, where we have national 
forests that are in rapid growth areas like the L.A. Basin, but 
the Phoenix Basin as well, there are going to be a lot of those 
sorts of facilities. They will be the most valuable as well, 
most likely, because of real estate value in the area.
    But I want to emphasize we are not talking about parcels of 
the national forests. We are talking about isolated tracts 
which have little or no value that over the years came into the 
Forest Service's ownership. In many cases they are facilities 
rather than parcels of land that we are no longer using.
    The Chairman. Thank you.
    Go ahead, Senator.
    Senator Thomas. Just to clarify a little, you are not 
talking then about 40 acres off in a forest somewhere that you 
might dispose of.
    Mr. Rey. No. These areas are all identified during the 
normal forest planning process and are listed in each forest 
plan as assets that are excess to the needs of the Forest 
Service and that do not have any environmental sensitivities 
associated with them.
    Senator Thomas. You do, from time to time, trade isolated 
tracts, I suppose, to make property more put together.
    Mr. Rey. We do have authority to do that, yes.
    The Chairman: Please proceed, Mr. Bosworth.

  STATEMENT OF DALE N. BOSWORTH, CHIEF, USDA FOREST SERVICE, 
  ACCOMPANIED BY HANK KASHDAN, DIRECTOR OF PROGRAM AND BUDGET 
                            ANALYSIS

    Mr. Bosworth. Well, Mr. Chairman and Senator Bingaman and 
members of the committee, I do appreciate the chance to be here 
and the opportunity to talk about the President's budget for 
fiscal year 2004 for the Forest Service.
    I also would like to point out that I have Hank Kashdan 
here with me. He is the Director of Program and Budget Analysis 
for the Forest Service.
    And I would like to also affirm what Under Secretary Rey 
said about how much we appreciate the support that you and 
Senator Bingaman have given us for the National Fire Plan and 
for the health of the forests and the rangelands. It goes a 
long ways to have that kind of assistance and understanding of 
the difficult choices that we are making and problems we have 
to deal with. So thanks again.
    I want to talk about healthy forests and about the National 
Fire Plan and our agency's priorities. I will be fairly brief, 
but I want to follow up a little bit on the financial 
management that Mark Rey mentioned.
    We have to be good stewards of the land, but we have also 
got to be good stewards of taxpayers' funds. And I am proud of 
the fact that the Forest Service was able to achieve an 
unqualified audit opinion for the first time in our agency's 
history. And I would also like to thank the tremendous amount 
of work the Forest Service employees put forth in order for us 
to achieve that because we went from a disclaimer to a clean 
opinion in 1 year, and that was just unprecedented.
    We are going to be looking at what kind of changes we need 
to make so that we can sustain that unqualified audit opinion 
into the future. It will require a number of changes because 
that is just our first step. We have got a lot more work to do 
in order to be financially healthy.
    A little bit of an overview of the 2004 President's 
program: The realities of a flat budget for us make us sort 
through an awful lot of different choices. The end result, 
though, from my perspective, is that some of the legislative 
and some of the regulatory initiatives that we have have to 
help stretch these funds further. And that is the important 
thing. If we are able to accomplish the goals of the 
President's Healthy Forests Initiative, if we are able to 
accomplish some of the other objectives that we have, I do 
believe that we will be able to take these scarce dollars and 
be able to get more work done on the ground where it really 
makes a difference. Of course, that is what we are all after.
    These initiatives and these key funding emphases are 
directly tied to the Healthy Forests Initiative. I have done a 
lot of traveling in the 2 years that I have been in this job, 
and I have been to the places like the Colorado front and I 
have been to New Mexico. I have been to the Blue Mountains in 
Oregon. I have been to the Black Hills. I have been to the 
Santa Fe area and northern Arizona. And I have seen some of the 
fires and I have also talked to people that live near those 
areas. And I have also been to the Green Knoll fire, I should 
say, in Wyoming. We have just got some huge problems in these 
areas and it is not isolated to one or two areas. It is across 
the board. And it is not just the West. We have a lot of 
problems in the South and the East as well.
    The underpinning of the Healthy Forests Initiative is to 
reduce the threat of catastrophic wildfire. Hazardous fuels 
will be reduced based upon our 10-year Comprehensive Strategy. 
We will be working collaboratively with communities based on 
criteria for project selection that emphasize the highest 
priority areas for treatment. The only way this will work is if 
we work together with the communities and with other 
landowners, other agencies. So the whole purpose of both the 
Healthy Forests Initiative, as well as the Comprehensive 
Strategy, is a collaborative approach.
    There are also some other areas in our budget. Forest 
Stewardship, for example, in the State and private forestry 
area: We are proposing an increase there for a competitive 
cost-share grant process to support increased small-diameter 
utilization and fuels reduction on non-Federal lands so that we 
can work together between Federal- and non-Federal landowners.
    A significant increase in fire suppression that I hope will 
help avoid the chaos of transfers of dollars and preserve 
hazardous fuel funds.
    There is an increase in research targeted at Sudden Oak 
Death and other invasive species, and an additional increase 
for fire-related research.
    There is an increase in range management that will help 
improve the health of our rangelands and help us get on top of 
our objectives in having decisions made for allotment 
management plans.
    An increase for Forest Legacy to help enable the 
acquisition of conservation easements of some of these 
important tracts.
    And there is an array of legislative proposals that will: 
streamline the appeals process; provide permanent authority for 
stewardship; streamline the execution of highest priority 
hazardous fuels reduction projects; expand partnership 
authorities; and make existing watershed enhancement authority, 
known as the Wyden Amendment, permanent.
    Also important is a proposal to make the Recreation Fee 
Demonstration Program permanent. I believe that the large 
majority of people around national forests support that 
program.
    I would like to just explain a couple of things that came 
up in your remarks. We have a chart that I would like to have 
put up that displays the costs of wildfires. The chart is 
there.
    The point here is: on the left it shows the total number of 
fires. The blue is 98.2 percent of the fires. The area in pink, 
there, is about 1.8 percent of the fires. Now, the point is 
that that 1.8 percent of the fires end up--if you go to the 
right there--in terms of suppression costs, costing 86 percent 
of our suppression costs. That is huge. So 1.8 percent of the 
fires cost 86 percent of the suppression costs and 95.2 percent 
of the acres burned.
    Now, of course, if you could take that small pink slice and 
eliminate it, then you would eliminate a huge percentage. We 
will never be able to eliminate that but our objective is to 
keep these fires small.
    I should add that the blue area is what we refer to as 
small fires and that pink slice is what we refer to as large 
fires, fires that are over 300 acres in size.
    The other thing that I would also mention is it came up 
about our rehabilitation and restoration dollars being zeroed 
out. I think we proposed in the past about $3.6 million in 
rehabilitation and restoration funding and we are proposing to 
zero that out. Frankly, the reason for that is that we have 
huge costs. If you look at the fires of 2000 and the fires of 
2001 and the fires of 2002, from a restoration standpoint, it 
is a drop in the bucket. The $3.6 million is really a drop in 
the bucket.
    What we really need to do is look at other funds that we 
have which fit very well into restoration and rehabilitation, 
reprioritize those, and focus those dollars toward these areas 
that are burned. We can use wildlife habitat dollars. There are 
soils dollars that we have. There are lots of other kinds of 
restoration dollars that we have in our budget every year, 
reforestation dollars and timber stand improvement. Those 
dollars can be focused onto those areas where we have the 
highest priority in terms of restoration in these burned-over 
areas. That is what we are about in the Forest Service: 
restoring, maintaining, and taking care of these lands.
    The Chairman. Why do you not do that?
    Mr. Bosworth. That is what we will be doing. My expectation 
is that the regional foresters will be taking those dollars and 
legitimately focusing those onto those areas where we have the 
needs, particularly in those areas where we have had large 
fires.
    So that is pretty much what I wanted to say in my opening 
remarks. I do believe it is an honor to be Chief of the Forest 
Service during these exciting times. I thank you for your help 
in solving some of these problems. I am looking forward to 
working with you and sorting through this fiscal year 2004 
program. So I would be happy to answer any questions.
    [The prepared statement of Mr. Bosworth follows:]
   Prepared Statement of Dale N. Bosworth, Chief, USDA Forest Service
    Mr. Chairman, Senator Bingaman, and members of the Committee, thank 
you for the opportunity to discuss the President's Fiscal Year 2004 
Budget for the Forest Service. I am accompanied by Mark Rey, Under 
Secretary for Natural Resources and Environment at the U.S. Department 
of Agriculture, and Hank Kashdan, Director of Program and Budget 
Analysis for the Forest Service. It is a great privilege to be here 
today. I want to affirm what Under Secretary Rey said about how much we 
appreciate your support, and that of Senator Bingaman, for the National 
Fire Plan and the health of our forests and rangelands.
                                overview
    Teddy Roosevelt's rich legacy includes the Forest Service, and he 
once observed that people should make few promises and then keep them. 
Our agency, which will celebrate its 99th anniversary during the 2004 
budget year, has made more than a few promises. I am often asked about 
my vision for the Forest Service. The Forest Service must be viewed as 
the world's leader in natural resource management by living up to 
commitments, efficiently using and accounting for the taxpayer funds 
that are entrusted to us, and treating people with respect. My vision 
as we approach the centennial is to heed TR's advice. We are an agency 
that keeps its promises.
    The fiscal year 2004 President's budget request for the Forest 
Service is $4.8 billion, $121 million greater than the FY 2003 
President's Budget. The FY 2004 Budget provides funding to reduce the 
risk of wildland fire to communities and the environment by 
implementing the President's Healthy Forests Initiative. In addition, 
it provides funds to enhance the ability of the Forest Service to meet 
multiple demands. The major departure from fiscal year 2003 is an 
increase of $184 million for wildland fire suppression and additional 
increases in funds for forest and rangeland research, forest 
stewardship, forest legacy, range management, and hazardous fuels 
reduction.
    This past August the President announced the Healthy Forests 
Initiative in order to help reduce the risks of catastrophic wildfires 
to communities and the environment. The fiscal year 2004 budget 
proposal contains a combination of legislative and funding priorities 
the President feels are necessary to address this need, as signaled in 
his State of the Union message. The Healthy Forests Initiative builds 
on the fundamentals of multiple use management principles that have 
guided the Forest Service since its formation. These principles embody 
a balance of conservation and balanced approach to the use of natural 
resources that are valid today in working with local communities, 
States, Tribes, and other Federal agencies.
                             accountability
    In my testimony today, I want to discuss in detail how the 
President's fiscal year 2004 budget and accompanying legislative 
initiatives will improve the health of our forests and rangelands, but 
first let me focus on the agency's effort to improve its financial 
accountability.
    When I began my career, the Forest Service was viewed as a model 
federal agency, accomplishing our mission for the American people. I am 
pleased to share with you today a stride that takes us closer to the 
reputation of a generation ago. Through the extraordinary efforts of 
our employees across the nation, we and our USDA counterparts have 
achieved an unqualified audit opinion for 2002. This is an important 
step in a continuing effort to fulfill promises previous Chiefs and I 
have made to get the Forest Service financial house in order. To 
progress from no opinion to a clean opinion in just one year is 
unprecedented. This unqualified audit opinion sets the basis for our 
next steps, which include additional financial reforms to efficiently 
consolidate financial management personnel; improve the effectiveness 
of the financial management system as part of the funds control and 
budget execution process; and improve the quality of account 
reconciliation. It will take as much work to keep that clean financial 
opinion as it did to earn it. But, this important accomplishment of a 
clean audit opinion demonstrates the progress we are making in keeping 
our word.
                          process predicament
    When I met with you a year ago, gridlock and analysis paralysis 
directly affected our ability to deliver on many promises: to protect 
communities from catastrophic wildfire, to provide a sustainable flow 
of forest and grassland products, and to sustain the landscapes used 
and enjoyed by the American people. These problems still exist, but the 
Forest Service has taken the initiative to deal with this process 
predicament within its authority by proposing regulations and policies. 
I believe we are on the road to success. We proposed a revised planning 
rule to provide a more readily understood planning process--one that 
the agency can implement within anticipated budgets. We proposed new 
processes to simplify documentation under NEPA for management 
activities that do not significantly affect the environment--small, 
routine projects that are supported by local communities, such as 
salvaging dead and dying trees or removing insect infested or diseased 
trees. We propose to work with you and the American people to keep our 
promise that these measures are about sustainable land stewardship.
                     president's management agenda
    The Forest Service has developed and is implementing a 
comprehensive strategy to achieve the objectives of the President's 
Management Agenda. Today, I'll highlight a few of the significant 
efforts we're making to improve Forest Service management and 
performance. In the competitive sourcing arena, we will conduct public/
private competitions during fiscal year 2004, identifying the most 
efficient, effective way to accomplish work for the American people, as 
identified in the Agency's Efficiency Plan which has been submitted to 
the Administration. Our e-government energies will move beyond web 
information delivery into four important areas: incident planning and 
management, recreation services and information, electronic planning 
record, and the federal and non-federal assistance process. We are 
instituting critical oversight controls to keep wildfire suppression 
costs as low as possible while protecting communities and resources and 
improve our methods of reporting wildland fire suppression expenses. 
Several streamlining efforts are underway to reduce indirect costs and 
better examine the role and structure of various Forest Service 
organizational levels.
    An element of the President's Management Agenda concerning budget 
and performance initiative, the Program Assessment Rating Tool (PART) 
analysis provides a standardized set of performance management criteria 
that provides a consistent evaluation process to identify areas of 
performance and budget integration they should improve. In FY 2004, the 
Wildland Fire Management and Capital Improvement and Maintenance 
programs of the Forest Service were selected to participate in the 
first round of assessments using the PART. The PART analyses for these 
programs indicated that funds need to be better targeted within the 
Wildland Fire Management program while the annual performance measures 
of Capital Improvement and Maintenance program inadequately linked to 
ongoing management initiatives aimed at addressing the maintenance 
backlog.
                          rangeland management
    The President's budget provides a $7.3 million increase that 
supports a significant Forest Service promise--to make progress on 
completing environmental analysis on national forest rangelands. This 
emphasis will provide for a 30 percent increase in grazing allotments 
operating under completed environmental analysis. It will also enhance 
our capability to manage livestock and support communities where 
rangelands are an integral part of the economy and way of life.
                        forest service research
    Productive forests and rangelands provide wood and forage, clean 
water, wildlife habitat, recreation, and many other values. Key to 
sustained and enhanced productivity is developing and deploying 
integrated resource management systems based on the best science 
available. A $9.4 million increase in forest and rangeland research is 
a valuable addition to our program. Some of the increase will support 
research and development tools essential to prevent, detect, control, 
and monitor invasive species and restore impacted ecosystems. Other 
emphasis includes a pine bark beetle program that looks at new 
management strategies, better utilization of bark beetle trees, and 
developing additional treatment options for managers and landowners. 
Programs to identify new biological control agents and treatment 
methodology and to develop integrated pest management technology for 
land managers will also be accelerated. The President's Budget 
recognizes the need for research to support the full range of 
challenges faced by land and resource managers because challenges don't 
stop at National Forest System boundaries. Addressing the issues 
associated with America's forests and grasslands--including hazardous 
fuels, protection of communities from catastrophic wildfire, invasive 
species, and pathogens--doesn't depend upon who owns the ground. 
Keeping this promise goes beyond the basic and applied science 
functions of research. We also need to bridge the gap between research 
findings and results on the ground. The request reflects the importance 
of technology transfer, internally in the Forest Service and externally 
through our university and State and Private Forestry program partners.
                       state and private forestry
    Through close cooperation with State Foresters and other partners, 
our State and Private Forestry Program provides assistance to 
landowners and resource managers to help sustain the Nation's forests 
and protect communities and the environment from wildland fire. The 
President's budget contains an increase of over $38 million for these 
programs. While most of the forest health management, cooperative fire 
protection, and cooperative forestry programs continue at fiscal year 
2003 levels, forest stewardship and the forest legacy program reflect 
an increase. A $16 million increase for forest stewardship supports the 
objectives of the National Fire Plan, the Healthy Forest Initiative, 
and the Forestry Title of the 2002 Farm Bill. The increase will 
strengthen our partnerships through a competitive cost-share program, 
leveraging the effectiveness of federal funds to reduce hazardous 
fuels, improve invasive species management, and enhance forest 
production from state and private lands. This increase will support 
increased private landowners' investment in the management of small 
diameter and underutilized forest products. In the forest legacy 
program, the President's budget proposes a $21 million increase to 
conserve environmentally important private forests through partnerships 
with States and willing landowners. The budget will support 
partnerships with up to ten additional States that have not previously 
participated in the program. We expect total conservation of more than 
200,000 acres, benefiting wildlife habitat, water quality, and 
recreation.
    the next 100 years for america's national forests and grasslands
    Some people and organizations still argue that timber harvest 
levels represent the greatest threat to the National Forests. However 
loudly voiced or strongly held these views may be, they are not 
accurate for the reality of management of the National Forests in the 
next 100 years. This year's budget request supports a program to offer 
two billion board feet including salvage sales.
    The request addresses two key long-term challenges to America's 
National Forests and Grasslands: the build up of hazardous fuels and 
the spread of invasive species that seriously impair ecosystems. In 
August of last year, the President announced the Healthy Forests 
Initiative (HFI). Its objectives include streamlining the decision-
making process and continuing our long-term commitment of working with 
communities to achieve a meaningful level of public involvement.
    We are committed to our continued partnership with those that use 
and enjoy America's National Forests as well as those that value them 
as part of our nation, no matter where they live. Although we have made 
progress, we must do more. Last year, the Secretaries of Agriculture 
and the Interior proposed new legislation to authorize permanent 
stewardship contracting authority, expedited review, hazardous fuels 
reduction projects, and address a burdensome administrative appeal 
process. President Bush reaffirmed his commitment to Healthy Forests 
during the State of the Union Address. We are committed to working with 
you as you consider the proposals of the Secretaries.
Hazardous Fuels
    The presence of large amounts of hazardous fuels poses a tremendous 
threat to people and to public and private natural resources. The 
Budget increases emphasis on protecting communities and property from 
the effects of these combustible fuels--catastrophic wildfire. The 
budget supports the 10-year Comprehensive Strategy and Implementation 
Plan, developed in close collaboration with governors, communities, and 
the Department of the Interior. Through performance goals contained in 
the implementation plan, we will implement hazardous fuels reduction 
projects, improve fire suppression planning, expand forest product 
utilization, protect lands from fire related spreads of invasive 
species, and undertake key fire research.
    The budget contains an increase of nearly $184 million for fire 
suppression. Wildland fire suppression costs are increasing and are 
having significant impact upon a wide number of Forest Service 
programs. The cost increases are due a number of reasons, including 
costs associated with national mobilization, wildland fire suppression 
in areas of high hazardous fuel loads, large aircraft and helicopter 
operations, and the increasing complexity of suppression in the 
wildland-urban interface. To address these increasing costs, the Budget 
proposes that the Forest Service and the Department of Interior (DOI): 
review the cost-effectiveness of large fire aviation resources; 
establish a review team to evaluate and develop cost containment 
strategies; and revise procedures to improve reporting of fire 
suppression spending. Together with other actions, this should enable 
the Forest Service to significantly improve our ability to fight 
wildfires without the major impacts to other programs we experienced 
during last year's fire fund transfers. Last year we kept our promise 
by aggressively fighting wildfire--long after funds appropriated 
specifically for fire suppression were gone and catching more than 99 
percent of fires the way they all start, small. The request includes a 
renewed emphasis on up-to-date fire management plans and wildland fire 
use fires.
    Accomplishing performance objectives under the National Fire Plan 
is also consistent with the President's Management Agenda. Reducing 
hazardous fuels, protecting against fire-related invasive species, and 
targeting adequate resources to suppress wildfire promotes improved 
health of Federal, State, Tribal, and local lands as well as enhancing 
the economies of natural resource based communities. I again urge all 
of us--cooperators and skeptics--to keep a focus on what we leave on 
the land, not what we take from it. Effective, integrated hazardous 
fuels reduction can leave us with clean, healthy water, improved 
wildlife habitat, and more satisfying recreation experiences.
Invasives
    Invasive species, especially weeds, pose a tremendous threat to 
forests and grasslands. Whether kudzu or leafy spurge or knapweed or 
oriental bittersweet vine, these unwanted invasives take hold and out-
compete native species, changing the look and structure of entire 
ecosystems. Our response to these threats needs to embrace an 
integrated approach. In the coming year we will improve integration of 
efforts among the National Forest System, Research, and State and 
Private Forestry, and other USDA agencies.
                         legislative proposals
    The FY 2004 Budget contains several legislative proposals that 
significantly advance common sense forest health efforts that prevent 
the damage caused by catastrophic wildfires and move past ``process 
gridlock'' to improve agency land management efficiency. Four 
proposals, in particular, promote the President's Healthy Forests 
Initiative by reducing hazardous fuels; permanently authorizing 
stewardship end results contracting; repealing the Appeals Reform Act; 
and revising standards of judicial review in decisions that relate to 
activities necessary to restore fire-adapted forest and rangeland 
ecosystems.
Hazardous Fuels
    As mentioned earlier, the Secretaries of Agriculture and the 
Interior proposed legislation that authorizes emergency fuels reduction 
projects in priority areas of federal forests outside wilderness areas. 
This will allow timely treatment of forests at risk of catastrophic 
fire and those that pose the greatest risk to people, communities, and 
the environment. Our top priorities will include the wildland-urban 
interface, municipal watersheds, areas affected by disease, insect 
activity, windthrow, and areas subject to catastrophic reburn. We would 
select projects through collaborative processes, consistent with the 
10-Year Comprehensive Strategy and Implementation Plan.
    Fundamental to better implementation of core components of the 
National Fire Plan's 10-Year Comprehensive Strategy is the outstanding 
cooperation that exists between the Forest Service, Department of the 
Interior, State governments, counties, and communities in the 
collaborative targeting of hazardous fuels projects to assure the 
highest priority areas with the greatest concentration of fuels are 
treated.
Stewardship End Results Contracting
    The complex patchwork of authorities and agreements associated with 
national forest management often has provided significant disincentives 
for private entities to engage in forest health restoration work. The 
fiscal year 1999 Interior and Related Agencies Appropriations Act, as 
amended, authorizes the Forest Service to enter into 84 stewardship end 
result pilot projects. The stewardship contracting authority allows the 
Forest Service to offset the cost of forest health work performed by 
the private contractor against the value of the forest products removed 
by the contractor. This goods-for-services approach to management has 
worked effectively in pilot projects. The concept embodies a promising 
tool to accomplish management goals without expanding current 
appropriations. Current authority will expire on September 30, 2004. I 
hope Congress will expand and make permanent this tool as proposed by 
the Secretaries of Agriculture and the Interior.
Repeal the Appeals Reform Act
    The Forest Service is subject to procedural requirements that are 
not required of any other Federal agency. To address this issue, the 
Secretaries of Agriculture and the Interior will propose legislation to 
repeal Section 322 of the Department of the Interior and Related 
Agencies Appropriations Act of 1993 (commonly known as the ``Appeals 
Reform Act,'') that imposed these requirements that I believe limit our 
ability to work collaboratively with the public.
Standards of Judicial Review
    To ensure that courts consider the public interest in avoiding 
irreparable harm to ecosystems and that the public interest in avoiding 
the short-term effects of such action is outweighed by the public 
interest in avoiding long-term harm to such ecosystems, the Secretaries 
of Agriculture and the Interior will propose legislation to establish 
revised rules for courts in decisions that relate to activities 
necessary to restore fire-adapted forest and rangeland ecosystems.
    The President's Budget also includes legislative proposals to:

   Expand or clarify existing partnership authorities;
   Permanently authorize the Recreation Fee Demonstration 
        program;
   Allow for the transfer of Forest Legacy titles to willing 
        State governments;
   Promote watershed restoration and enhancement agreements;
   Authorize a Facilities Acquisition and Enhancement Fund;
   Restore eligibility for State and Private Forestry Programs 
        of the three Pacific island entities in ``Compacts of Free 
        Association"; and
   Eliminate requirements of the Forest and Rangeland Renewable 
        Resources Planning Act of 1974 that duplicate the Government 
        Performance and Results Act of 1993.
                               conclusion
    We are fulfilling key promises in re-establishing sound management 
throughout the Forest Service. I want the Forest Service to be an 
organization people trust and once again point to as an example of good 
government. Earning this trust means becoming good stewards of not only 
public land and natural resources, but of public dollars, of public 
trust. We know the work is not complete--there are still many 
opportunities like large fire cost management, integrating information 
systems, and making organizational changes in administrative support 
operations-but we're making good progress.
    Traditional functional and program boundaries do not serve us 
well--they get in the way of our ability to keep our word. I am 
committed to putting more effort into integrating our programs and 
becoming better partners with people interested in leveraging our work. 
The President's Healthy Forest Initiative exemplifies an integrated 
approach to problems that affect not just national forests or national 
grasslands, but America's forests and America's rangelands. It is an 
opportunity for our private land neighbors, for research, for partner 
agencies, for everyone concerned about America's forests and 
grasslands.
    Let me reiterate the deep honor I feel in being Chief of the Forest 
Service in this challenging time and the equally deep sense of 
obligation I feel to keep our promises to the American people. I enlist 
your continued support and look forward to working with you toward that 
end.
    I will be happy to answer any questions.

    The Chairman. Thank you very much.
    Senator Smith, would you like to make a few early 
observations? The other Senators had a chance to do that, and 
then, Senator Wyden, we will let you comment for a minute. 
Senator Smith?
    Senator Smith. Mr. Chairman, I had a longer statement. I 
will include it in the record, if I may.
    [The prepared statement of Senator Smith follows:]
   Prepared Statement of Hon. Gordon Smith, U.S. Senator From Oregon
    Mr. Chairman, I appreciate your leadership in convening this 
hearing to examine the Administration's fiscal year 2004 budget request 
for the Forest Service. I also want to thank Undersecretary Rey and 
Chief Bosworth for being here today, and for their concerted effort to 
make forest management policy meet the immediate and long-term needs of 
the land, the environment and our communities.
    Let me begin by drawing your attention to the Rough and Ready mill 
in Cave Junction, Oregon. This mill is one of the largest family-wage 
employers in the Illinois Valley, an area which was on the verge of 
evacuation during the Biscuit Fire last summer. It is also the last 
mill in Josephine County. In December, the owners of Rough and Ready 
announced that because of a shortage of logs, they would be closing 
their doors and laying off their employees. In less than a month their 
doors will close, and with a bitter taste of irony. Three miles from 
the Rough and Ready mill, lies the site of the Biscuit Fire, where over 
1 billion board feet of salvageable timber lies outside of wilderness 
areas and other set-asides. The Forest Service tells us that the 
environmental impact statements for rehabilitation and salvage of the 
Biscuit Fire will not be prepared until later this year, and appeals 
and litigation will likely push projects into 2004. This is totally 
unacceptable.
    Over the past decade, over one hundred and sixty mills have been 
closed in Oregon and over 30,000 jobs were lost. Let me tell you now 
that I cannot allow this mill and its workers to be drawn into that 
statistic, and into the failed forest policies that this Administration 
has vowed to correct.
    Tomorrow, mill workers and community members are going to be 
holding a protest in front of the Forest Service office in Cave 
Junction. They will be calling on all of us, executive and legislative 
branches, to act.
    I believe that the Forest Service is doing all that it can, within 
existing law and statute, to rehabilitate the Biscuit Fire and deliver 
volume wherever possible and appropriate. The Administration's 
legislative proposals and administrative actions reflect this at the 
national level, and I thank you for your hard work. I would, however, 
ask that you clarify how your funding priorities are consistent with 
your stated management priorities in the Pacific Northwest. Last year, 
the Forest Service proposed to reduce Region 6's funding by 12%. In 
light of the catastrophic wildfires Oregon experienced, and the 
Administration's goal to fully implement the Northwest Forest Plan, I 
trust that Region 6's funding will be enhanced in Fiscal Year 2004, not 
further reduced. I am also wary of your proposal to zero out the 
Pacific Northwest Assistance Program, which is designed to aid 
communities affected by reductions in harvest due to the economic 
impact of the Clinton Northwest Forest Plan. While it may be 
appropriate to phase out this program once a sustainable and 
predictable level of volume is delivered under the Northwest Forest 
Plan, it is clearly premature at this time.
    On another note, let me mention that I strongly support the 
President's Healthy Forests Initiative and the proposals contained in 
the FY04 budget request. It is a well-balanced approach and it deserves 
quick passage by this Congress before the West is again enshrouded in 
smoke. But the Healthy Forests Initiative will neither be constructive 
nor fiscally feasible if we continue losing the infrastructure needed 
to process thinned and salvaged trees. This needs to be realized 
immediately and I ask that you commit today to dedicating the needed 
resources to keep the folks in Cave Junction employed in the short term 
so that they can contribute in the long-term to balanced forest 
management.
    Mr. Chairman, thank you again for holding today's hearing and for 
your firm commitment to addressing forest health issues during the 
108th Congress.

    Senator Smith. I have some questions as well if this is the 
appropriate time to ask them.
    The Chairman. We will get to you on the questions.
    Senator Wyden, did you have some opening remarks?

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. I will be very brief, Mr. Chairman.
    First, I want to say how much I appreciate your making this 
a priority issue. As you know, each summer, the West faces the 
prospect of burning up, and we simply cannot afford to turn 
these rural communities into sacrifice zones. There is a 
tremendous backlog of work that needs to be done to promote 
forest health.
    Mr. Chairman and colleagues, I thought we came very close 
last session in terms of working out a bipartisan effort. 
Senator Smith was involved, as were Senator Domenici and 
Senator Feinstein. In my view, Mark Rey was extremely 
cooperative in terms of working with us, and we have to 
continue in this manner.
    I would just make one substantive point and then wait for 
questions, Mr. Chairman. I think that what the Chief is talking 
about in terms of an collaborative approach on hazardous fuels 
is very important. But suffice it to say we are getting a lot 
of flack at home that this is not being accompanied by 
sufficient environmental standards. I think if we are going to 
find the common ground--and we got very, very close last 
session in my view--we have to couple that collaborative 
approach with some concrete environmental standards. I will ask 
some questions about that later.
    Mr. Chairman, again I thank you very much for making this a 
priority. We have to get this done early in this session. This 
is simply a matter of life and death for westerners.
    The Chairman. Senator, I want to just make this observation 
to tell you the kind of problem I think we have as an 
authorizing committee. I was telling Senator Bingaman on the 
omnibus bill, I do not think we know as of now the extent to 
which this committee's authorizing jurisdiction was infringed 
upon in an appropriation bill. I do not use that word with any 
anger or recrimination, but it does seem that we have to decide 
whether we are authorized some of these controversial areas of 
not. If we are not and if we cannot, then obviously somebody 
will do them for us.
    On the other hand, everybody is so busy that if you talk 
about a forest bill that would address these issues, the kind 
you are speaking of, the kind that was addressed in the omnibus 
bill by Senator Burns with reference to stewardship and 
partnerships, when you talk about fitting them in an agenda up 
here, it becomes almost imponderable how you are going to get 
it done.
    But I told Senator Craig I would like very much to put 
together a forest bill this year. Obviously, every time that is 
done, the issue of logging, no logging, some logging comes up, 
and it is important that that be looked at. But there are so 
many other issues where we ought to be helping them do a better 
job. They have expressed a couple of them here today.
    We will start with money, seeing whether we can entice the 
Budget Committee to give us more money for the kinds of things 
they have been unable to fund. After that, I would hope that 
parallel to the energy bill, we could start putting together 
the fruits of some hearings on the forest problems in the 
country. There are a myriad of them without question.
    I have maybe 10 or 15 that I am going to hold and submit at 
the end, but I would like to open with just a discussion with 
you.
    It seems to me the Secretary mentioned the activities that 
occurred on the floor. It was also in an appropriation bill, 
and a very large bill was introduced--I was the prime sponsor 
of it--called ``happy forests.'' It was for an amendment. It 
was something like $650 million or $700 million for taking care 
of our forests which were then at the peak of fire destruction 
and all the other things. We split that between Ag and 
Interior, and as I recall, we attached some very important 
amendments to that. We had to work very hard with the Clinton 
administration to get them in.
    That bill, amendment, provided for an inventory by the 
Departments of the properties that were to be determined as 
dangerous or perilous because they were close to the forests 
and could be part of what you have alluded to today, the urban 
interface, which is apt to bring very serious and costly fires. 
We had some problems with that, but ultimately, it was agreed 
that that be done.
    Is it fair to say that the areas have been identified that 
are urban areas of danger because of their proximity? Has that 
been done, Mr. Bosworth?
    Mr. Bosworth. About last, maybe June or July, I believe, we 
completed the first effort, working with the State foresters 
and others, to identify communities at risk. There are some 
problems with the list. As you would expect, in some cases you 
can end up with every community in some States being at risk, 
and then in other States it is approached a little bit 
differently.
    We have an agreement with the State foresters. The National 
Association of Counties, the Department of the Interior, and 
the Forest Service to work in a collaborative way now to 
establish criteria for communities--and a little more 
structured criteria--that would be applied State by State in an 
interagency way to identify where the priorities would be for 
doing fuels treatment across the landscape around these 
communities. So it is a good landscape approach. It is 
collaborative and it has taken sort of the next step from 
identifying these communities.
    The Chairman. Well, it would seem to me that either that is 
meaningful or it is not. When you get these lists, it seems 
like it naturally lends itself to some prioritization. There 
must be some that are highly at risk, some that are not quite 
that much, but we have to get on with solving some of them.
    Mr. Bosworth. The way that this would work is that we would 
identify those that are high, those that are moderate, and 
those that are low so that we can have a better way of using 
these criteria, have a better way of being consistent across 
the country in how we are applying this so that we can get our 
focus on those highest priority, most important areas.
    The Chairman. Well, I just want to ask about one and give 
you an observation regarding what I think you could help us 
with. Santa Fe is one, and obviously the watershed in Santa Fe 
must be in a high-risk area because if that burns, the water 
supply for this city goes. It is not a question of did I dream 
this up as something we need. It is right there. They have a 
lake. The lake yields the water supply, and the forest is right 
there. That has been a very slow process of fixing that. I want 
to ask you where we are on that and what is going to be done.
    But in a general way, it would seem to me to be important 
to us that you tell us for the record which of these risk areas 
that you would like to rehabilitate have been delayed. If they 
have been delayed for undue lengths of time, I would like you 
to tell us which ones are unduly delayed and why. If they are 
delayed because of lawsuits, because of environmental 
contentions that the plans are not right, just give us a number 
of them and the delays and tell us why that is occurring. We 
continue to hear stories of why it is delayed. I think it would 
be good to get an official list, if you could do that, of those 
that have been delayed with your reasoning as to why, lack of 
money, cannot get it done because of this, that, or the other. 
Maybe roadless areas has been a problem in some. Whichever it 
is, would you tell us that at your leisure for the record?
    Mr. Bosworth. First, I will respond to your question about 
the Santa Fe watershed and then I will try to respond to those 
specific areas.
    We are working in the Santa Fe watershed now. We issued a 
contract in September 2002 for $400,000 to treat about 700 more 
acres. One of the difficulties in the Santa Fe watershed is 
that it is so critical that we want to make sure that we do not 
get more fuel down without treating it than what we can treat 
in 1 year. In other words, as we are doing the mechanical 
thinning or the thinning with chainsaws to get the small trees 
down, we need to either burn those or move them out so that we 
do not have an over-accumulation which would increase the 
hazard rather than decrease it. So they are working at that at 
about a 700-acre-a-year rate because they believe that that is 
about the amount that they can be sure that they can clean up. 
We would like to be able to move along at a faster rate, but it 
is pretty important to make sure that they stay up with that.
    It took a long time to work our way through negotiations to 
try to avoid appeals and litigation. We, in the end, did not 
avoid the appeals and we worked our way through that process.
    Another problem with the Santa Fe watershed is that it is 
expensive. It is about $1,150 an acre. Our average for fuels 
treatment nationwide is about $120 an acre. So you can see that 
it is about 10 times more. Now, it is in a wildland-urban 
interface, a municipal watershed which adds cost to it. It is 
very costly and there are a lot of reasons for that. Part of it 
is the difficulty. Part of it is that you negotiate away. If 
you negotiate enough, you add costs for mitigation to where it 
gets very expensive.
    Now, regarding the areas around the country that we view as 
high-priority areas, I cannot sit here at this moment and list 
those out and say how they have been delayed, but we will pull 
together some information and get it to you.
    I can say that the purpose of the Healthy Forests 
Initiative--and some of the things we have been doing 
administratively and through regulatory proposals--is to try to 
help simplify those processes so we can shorten the period of 
time that it takes to make a decision and get more of the 
dollars on the ground doing fuels treatment work and do that in 
a collaborative way, work closely with the communities up front 
and get the job done. We have to be able to do it that way and 
we have to speed it up if we are going to be able to make a 
difference.
    Now, the fiscal year 2003 projects that we plan on doing 
will be identified in May, and then we will also be very happy 
to share that with the committee as well when we get those 
identified.
    Mr. Rey. We can also share sort of a running tally of how 
project appeals and litigation is going during the course of a 
year. I think it is fair to say that we are seeing some 
increases in appellate and litigation activity as we are moving 
into areas that heretofore we have not done treatments in. 
Whether they are in the wildland-urban interface or not does 
not seem to be a factor in whether we are seeing appeals or 
lawsuits being filed.
    The Chairman. Senator Bingaman.
    Senator Bingaman. My impression is, at least in this last 
year, that part of the delay that you experienced in getting 
this thinning accomplished in some of these wildland-urban 
interfaces--in fact, right in the Santa Fe watershed--some of 
that delay was because of the need to borrow funds to do fire 
fighting. I remember, Chief Bosworth, we spoke about this. You 
arranged to shift some funding over so that the work could go 
forward and an effort could be made there in Santa Fe. Shortly 
after that, my impression was that everything had to go on hold 
because the money then had to be shifted out of that account 
and used to fight fires. So it was all delayed. I think they 
are supposed to get started tomorrow or something instead of 
last September.
    Am I right that part of the problem is this constant need 
that you have had each year to shift funds in and out of these 
accounts to fight the fires?
    Mr. Bosworth. It is correct that in fiscal year 2002, when 
we had all those fires, we continually transferred dollars from 
other accounts to fight fires. The way we prioritize it, one of 
the last places we wanted to take dollars was from fuels 
treatment funds. In the end, we transferred about $20 million 
out of fuels treatment into fire suppression. So out of the 
total, that was not a huge amount, but it did delay some 
projects that we would have gotten going otherwise.
    Senator Bingaman. I am not clear, and maybe you said this 
in your discussion with Senator Domenici and I just did not 
understand it. What is your plan to fix this problem so that 
you do not have this drill every year where you are taking 
money out of these other accounts in order to fight fires? The 
budget proposal you have given us now, if we enact it, ensures 
that you are going to have to do that again.
    Mr. Rey. If we have a difficult fire year.
    I think in last year's budget proposal, we proposed a 
government-wide emergency account for contingencies like this.
    Senator Bingaman. Is that what you are suggesting to us 
now? Are you suggesting anything to us?
    Mr. Rey. I think what we are suggesting now is we would 
like to sit down with you all and with the Budget Committee to 
see if something like that can work so that we do not have a 
continued rotation of accounts.
    Senator Bingaman. Yes, I think that would be a priority 
because I think clearly it must be frustrating to you to have 
to interrupt other activities that you believe are important 
like thinning activities in these wildland-urban interface 
areas because you have had to take money to do something else 
which was not adequately funded.
    Let me ask about the roadless rule. That has been upheld at 
the appellate court level. Is the Forest Service proceeding to 
implement that, or is there an effort underway to modify that? 
Or what is happening with the roadless rule?
    Mr. Rey. The roadless rule is still the subject of a 
considerable amount of litigation in numerous judicial 
districts. We, in fact, earlier this week, argued a case in 
Wyoming where we can expect a decision shortly.
    In the Ninth Circuit, the rule was enjoined. Upon appeal to 
the Ninth Circuit, the circuit court reversed the district 
court opinion. The plaintiff in that case, which is the State 
of Idaho, has filed a motion asking the Ninth Circuit for en 
banc review, which means all the judges in the circuit review 
the three-judge panel's decision. I guess everyone is waiting 
to see whether that will be granted.
    Senator Bingaman. What is the position that the 
administration is taking in that litigation?
    Mr. Rey. In that litigation, we defended at the district 
court level and did not participate at the circuit court level, 
in the interest of moving on to develop a different roadless 
rule which we are still working on and hope to propose within 
the next couple of months.
    In the interim, we have refrained from entering roadless 
areas except and unless an entry has been approved by the 
Chief, and I do not believe you have approved any to date.
    Senator Bingaman. So you anticipate in the next couple of 
months we will get a proposal or there will be a new, modified 
roadless rule that you will issue.
    Mr. Rey. That is what we are working on right now. I am 
guessing that the litigation will continue simultaneously with 
that.
    Senator Bingaman. Let me ask about the stewardship 
contract? I do not know if I am running over my time. I do not 
guess we are using the timer today.
    The Chairman. Just kind of guessing.
    Senator Bingaman. Okay.
    The Chairman. You are getting close.
    Senator Bingaman. Okay, let me ask one more question. Then 
I will desist.
    On forest stewardship contracts, Senator Domenici referred 
to the fact that there is substantial language in this latest 
appropriation package, which we are hopefully going to get to 
see before we vote on it, that relates to stewardship 
contracting. My understanding is that that was a demonstration 
program we put into place in 1998, and the idea was we would 
see how it worked.
    Now the new language, as I am led to believe, makes it a 
10-year program and eliminates the emphasis which was 
previously there on non-commercial contracting, non-commercial 
timber activity.
    I would ask your advice to this committee on what should we 
be doing now. It does not make a lot of sense to be continuing 
to kid ourselves that we are having a demonstration program 
once we have legislated that it is for 10 years. The 
administration supports this presumably or it would not be in 
that bill.
    Mr. Rey. That is correct. The demonstration program has, in 
our mind, served its purpose. There have been two reviews of 
the demonstration pilot projects to date: one, an internal 
review by the Forest Service, another by an outside party, the 
Pinchot Institute, which is a not-for-profit environmental 
think tank. In both cases I think what we found was that there 
is much to be gained by broadening the stewardship authority, 
making it a permanent authority, and broadening it so that the 
Interior agencies have the same opportunity to use it as a 
management tool. That is why we recommended making the 
authority permanent, or at least longer term, last fall when we 
sent up a legislative proposal as part of the President's 
Healthy Forests Initiative.
    We still look at this primarily as a way of using new 
contract tools to do work that would not be done on a 
commercial basis because most of the material that has to be 
thinned out of these forests is not of commercial value. So I 
do not see us changing the emphasis from where it is now in the 
pilot projects.
    I think that the challenge for us, should you all pass this 
legislation, is going to be to reach out and involve as many 
people as possible in moving this project forward from a pilot 
project to one that we hope will allow us to do fuels 
treatments at a more landscape level.
    Senator Bingaman. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Thomas, you are next.
    Senator Thomas. I know that situations are all different, 
but sometimes it seems a little bit of a paradox to be talking 
about thinning and fire suppression and at the same time 
reducing commercial reductions. How do you react to that?
    Mr. Rey. Well, I guess the distinction that I make is that 
the purpose of the President's initiative goes to the question 
of what kind of forest we want to have, not what we take out of 
it. And the kind of forest we want to have, by virtue of what 
we are trying to accomplish under this initiative, is one that 
is fire resistant and ecologically sustainable where we can 
restore fire to a natural role in the ecosystem. If there is 
commercial material that is removed from the forest, incidental 
to that purpose, then we ought to use it, and I think we have 
been fairly forthright about saying that.
    Separately, we also believe that there is a role at some 
level, within proper environmental constraints, for the 
national forests to contribute wood products to the Nation's 
needs. Those two are not always going to square up in the same 
place at the same time.
    Senator Thomas. No, I understand. But it does seem like in 
many cases thinning of commercial-size timber is a movement 
toward fire suppression and the more you can get that done, as 
an income feature and being done in the private sector, it 
seems to me that makes a lot of sense.
    Mr. Rey. We can reduce the cost to the taxpayer of doing 
the forest health work that needs to be done. But the primary 
objective has to be----
    Senator Thomas. I understand what the objective is, but 
there are several ways to get to an objective sometimes.
    Mr. Rey. Right, exactly.
    Senator Thomas. You indicate that you are going to make 
some changes in the forest regulations which will shorten the 
process and save $300 million. Generally, what are you seeking 
to do in that planning process to make it more efficient?
    Mr. Rey. What we have proposed so far are some changes to 
the way we comply with the National Environmental Policy Act 
and the Endangered Species Act. With regard to the National 
Environmental Policy Act, we and the Department of the Interior 
are proposing two ``categorical exclusions'' to cover certain 
kinds of fuel treatment and post-fire restoration work. Those 
were out for public comment and review. The public comment 
period on those closed at the end of January, January 31. And 
our cursory review of the record so far showed substantial 
support for what we had in mind.
    In addition to that change, we have undertaken 15 case 
studies for environmental assessments to see if we can do 
environmental assessments for those projects that require 
additional environmental analysis on a more timely basis.
    The underlying philosophy here, if I can just digress for a 
minute, is that under NEPA, you have three levels of 
environmental analysis. For routine projects that you do time 
and time again--where you know what the environmental 
consequences could be with general certainty--you can use a 
``categorical exclusion.'' It is an instrument under NEPA that 
is allowed.
    For projects that are a little more complicated, or that 
you are uncertain as to the environmental consequences, you 
have to do some additional analysis: an ``environmental 
assessment.''
    An environmental assessment is supposed to be a relatively 
straightforward and brief analysis that is supposed to lead to 
one of two conclusions: Either A, that there is no significant 
environmental impact, in which case you move on and do the 
project; or B, there is a question or there is potentially some 
significant environmental impact, in which case you do an 
``environmental impact statement.''
    Our problem is that over time, over the 30 years we have 
been working with NEPA, our environmental assessments have been 
getting bigger and longer and more complex because, in part, 
some of our people have been trying to do environmental 
assessments as if they were environmental impact statements or, 
in some cases, even to avoid environmental impact statements. 
And that is not what you are supposed to do with an 
environmental assessment.
    So the point of these 15 models, these case studies in the 
field, is to see if we can get back to doing simple, 
straightforward, 20- or 30-page environmental assessments 
instead of 200- and 300-page environmental assessments. 
Hopefully, most of those will lead to a finding of no 
significant environmental impact. For the ones that do, then we 
will do an EIS, which is what the statute originally 
envisioned. But for the vast majority of cases, we should be 
able to proceed with a project under a much simpler 
environmental assessment. We think that can probably cut our 
analysis costs from $100,000 a project to maybe closer to 
$20,000 or $25,000 a project. So those are the NEPA changes.
    We are also looking at some changes under the Endangered 
Species Act as well.
    Senator Thomas. That is great. All of us, of course, want 
to make sure that the environment is protected. I remember when 
Chief Thomas was here when I first came to the Senate. We 
talked a little bit about making sure that we were not managing 
because of the threat of lawsuits, that we were managing under 
the law and doing the best job and not because some group was 
going to sue us if they did not do it their way. So good.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    I think Senator Smith was here.
    Senator Smith.
    Senator Smith. Thank you, Mr. Chairman.
    Gentlemen, thank you for coming to this committee.
    I had an opening statement that talked about some of the 
continuing distress of people in rural communities in the State 
of Oregon. There is a particular mill there, Rough and Ready 
Lumber. It is the last mill left in Josephine County. Over the 
last decade, 160 mills in Oregon have closed and over 30,000 
Oregonians have been laid off of work.
    The irony is that this Rough and Ready mill is just a few 
miles away from the Biscuit Fire, and they have announced their 
closure in April because they literally have no timber. I am 
wondering if you can tell me if anything can be done to 
expedite salvage at the Biscuit Fire that can help keep 30 
Oregonians in work.
    Mr. Bosworth. I would be happy to discuss that. After the 
Biscuit Fire, obviously there have been a lot of national 
forest timber that has been killed. Also, there is damage to 
watersheds, to wildlife habitat. We believe that the cost of 
the Biscuit Fire for fiscal year 2003--we need to redirect some 
of the work into the Biscuit Fire area from a restoration 
standpoint.
    Now, they are also looking at how much of the timber volume 
can be salvaged. It would be a part of that effort to 
rehabilitate.
    We are doing the analysis, the assessment, currently to 
figure out what should be done on the national forest portion 
of that. Some of the things that we are proposing through 
administrative changes, through the Healthy Forests 
Initiative--well, some are not even part of the Healthy Forests 
Initiative--such as salvage of small areas, using the 
categorical exclusion, 250 acres--I think is what our proposal 
is. When those are finalized, those will help with this kind of 
project where we will be able to do the analysis quicker and we 
will be able to get the work on the ground done quicker. That 
would be one example.
    The region has redirected some of their dollars to the 
forest in the Biscuit Fire area so that they can do the 
assessment and get it done as quickly as we can.
    I have to say, though, that part of the frustration that I 
have, and that many Forest Service people have, is that we do 
not have the processes in place yet--and the systems--working 
to get these projects going at the rate we would like to. We 
are still putting an awful lot of money, time, and effort into 
doing paperwork.
    I am a supporter of doing analysis, the appropriate level 
of analysis, to make sure that we do the right things. I 
strongly support the need to work with the community to make 
sure that they understand and are a part of the decisions on 
what needs to be done there. That is how the region is trying 
to approach the Biscuit fire.
    Mr. Rey. I think the short of it, Senator, is that there is 
a considerable volume of material that likely will come off as 
salvage as part of the recovery effort and the restoration 
effort there. Whether it can be made available quickly enough 
to change the situation with Rough and Ready Lumber Company is 
one question; a second question is how much appellate and legal 
action there will be once we have proposals on the street for 
people to look at since that is not an uncontroversial portion 
of the world down there.
    Senator Smith. I understand that.
    Mr. Chairman, I would like to introduce into the record a 
letter from the Rough and Ready Lumber Company to President 
Bush expressing their pain and their difficulty and their 
desire to continue employing their people and staying in their 
industry. If I can include that in the record, I would 
appreciate it.
    The Chairman. It will be admitted.
    [The letter of Rough and Ready Lumber Company follows:]

                                   Rough& Ready Lumber Co.,
                               Cave Junction, OR, January 29, 2003.
    Dear President Bush: Our family, the Krausses of Southern Oregon, 
is a member of your most committed supporters here in Oregon. Like so 
many Americans, your Presidency brought us hope that our country could 
be steered onto a track of prosperity and security. Your actions and 
leadership has not disappointed us. Specifically, we would like to 
thank you for your commitment to improving the health of our forests 
and rural communities. To hear you mention the Healthy Forests 
Initiative as a top priority in the State of the Union was appreciated 
and shows that you personally understand this environmental travesty 
Unfortunately however, we have yet to see any changes from the previous 
policies of the Clinton Administration.
    Since 1922, our family has owned and operated a sawmill in Cave 
Junction, which is along Oregon's famous Illinois River. For several 
weeks last summer, we lived in fear that our community and sawmill 
would be lost to an out-of-control wildfire (the Biscuit Fire), which 
ultimately burned half a million acres of wilderness, roadless area, 
critical spotted owl habitat and key-watersheds for salmon. This fire 
ultimately came within four miles of our sawmill.
    In August, you came to Southern Oregon and unveiled your plans to 
address this crisis situation. Your comments showed a clear 
understanding of the plight faced by our western forests and rural 
communities, as well as the importance of protecting wildlife habitat 
and watersheds. Your visit and your initiative gave us renewed 
confidence in our future.
    Unfortunately, last month our hope turned to despair when, due to a 
shortage of logs, we were forced to announce the permanent closure of 
our mill in April. This decision was not easy. It puts 160 families in 
the unemployment line. It will have a devastating effect on the 
community of Cave Junction.
    It is particularly distressing, and ironic, that within just a few 
miles of our sawmill stands enough fire-killed timber to supply our 
operation for several years. But those unacceptable policies and 
procedures that you propose to change continue to stand in the way of 
common sense and our ability to operate our family-owned business. We 
are being told that, despite your personal beliefs and position, 
persons in your Administration are standing in the way of change. We 
find this disheartening and have just about given up.
    We have been good stewards of the land and responsible leaders in 
our community. We do not want to close our sawmill and lay off our 
employees. We want to be part of your plan to protect our forests, 
wildlife, watersheds and rural communities. But without a timely 
commitment by persons in your Administration to fix the Northwest 
Forest Plan, and to salvage and restore these ecosystems devastated by 
wildfire, we will be closing our doors permanently.
    We sincerely appreciate the sacrifices you have personally made by 
accepting the Presidency of our great country. We wish you the very 
best.
            Sincerely,
                                   Lewis N. Krauss
                                   John P. Krauss
                                   Jennifer Krauss Phillippi

    Senator Smith. For fiscal year 2003, the Forest Service 
reduced region 6's funding by 12 percent, and can you describe 
how this year's request meets the needs of the State of Oregon 
where more acres burned than in any other State and where I 
believe you are trying to fulfill the Northwest Forest Plan?
    Mr. Rey. What you might be looking at there is a temporary 
phenomenon. In the work that we have got to do to get the 
Northwest Forest Plan back on line and working again, we have 
probably have got a year's worth of regulatory work that has to 
be completed before we are going to see on-the-ground results. 
So if we are going to see results in that regard, it is going 
to be more in fiscal year 2005 than it is 2004.
    Mr. Bosworth. Yes. I do not have anything to add.
    Senator Smith. Pardon me, Chief?
    Mr. Bosworth. I say that pretty much covers what I would 
have said.
    Senator Smith. Okay.
    I just have one other question. The National Research 
Council recently reported an alarming decrease in the capacity 
for advancing the science of forestry. Is this a situation the 
Forest Service and its university partners can address 
together? Specifically are there some things you can do with 
places like Oregon State that have very excellent forestry 
programs to accomplish the research that needs to be done? Is 
there more or less of an outreach to places like Oregon State?
    Mr. Bosworth. The more we can outreach to places like 
Oregon State, the better off we are. Oregon State actually is a 
very good partner with us in a number of research efforts. They 
also do a lot in terms of evaluating some of the programs that 
they place in the Forest Service, and provide advice and 
counsel from a scientific basis.
    More and more, because of the way our research dollars have 
gone the last 10 to 15 years, we are trying to find ways of 
leveraging the dollars with universities and colleges to get 
more of the research at least partnered up with places like 
Oregon State.
    Senator Smith. I think that is smart, Chief, because my 
understanding is that the Forest Service is looking at 
significant numbers of retirements in the Forest Service that 
historically done this kind of work. And I was just saying that 
I think the way you are going in reaching out to universities 
is an excellent replacement for the jobs that we are losing in 
the Forest Service to retirement. So the more of that you can 
do, I think the better off we will be.
    Thank you.
    Senator Wyden. Thank you, Senator Bingaman.
    Chief, I want to stay with this Biscuit Fire issue because 
I am still really in the dark with respect to what is going to 
happen substantively on this issue. Senator Smith is absolutely 
right about the importance of it to our area. Congressman 
DeFazio, Senator Smith, and I wrote you recently to talk about 
the resources. And you have mentioned probably three times this 
morning how you are going to redirect money to deal with these 
horrendous fires, and the Biscuit Fire is the biggest fire that 
we had in the country last year.
    I would like to know exactly from where this money is going 
to be redirected because, A, I am concerned that it may come 
from other critical projects from our region, and that would 
concern me, and B, I am not sure we are going to get the money 
at all under this kind of redirection. I would like you to tell 
me, so we can walk out of here today and we can tell our 
constituents.
    The letter was sent early in February by Senator Smith, 
myself, and Congressman DeFazio. We have tremendous bipartisan 
concern in our region about where these dollars are going to 
come from. Douglas County, the Cow Creek Tribe, and others are 
trying to restore thousands of these acres. Given the fact you 
said money is going to be redirected, exactly where is it going 
to be directed from?
    Mr. Bosworth. Well, first, I do not want to imply that 
dollars that will be redirected--the places they are coming 
from are not important places to be spending dollars. There are 
other good projects that are proposed that we are working on. 
We will move the money from those projects to these areas.
    Senator Wyden. What would those projects be?
    Mr. Bosworth. Well, I cannot give you a specific dollar for 
dollar. But let me give you an example. Okay? It is not an 
Oregon example.
    But the Apache-Sitgreaves National Forest in Arizona had a 
very large fire, the Rodeo Chedeski Fire, that was partially on 
their forest, partially on Indian reservation land, and it was 
almost the size of the Biscuit Fire. They were pretty similar 
in size. The Apache-Sitgreaves National Forest will be 
redirecting 50 percent of their funds to work on restoration 
work on their forest. Now, they had plans to do certain 
projects across the forest. They are going to take those 
dollars and reprioritize them, 50 percent of those, to do the 
high-priority things as a result of the Rodeo Chedeski Fire.
    Then the region--and that region would be in Albuquerque, 
New Mexico--the regional office, then, will be looking across 
the board at the funds that they are distributing for the 
fiscal year, redirect some funds to those places that burned, 
and get funds to those high-priority areas.
    The same thing is going to be happening in the Pacific 
Northwest where--between the regional office, the regional 
forester, and the forest supervisor--they need to look at where 
the dollars were going to be spent and get those moved over.
    I am not holding any dollars in Washington as sort of a 
slush fund. We are getting all those dollars out to the 
regions. In some cases the regional foresters then also work 
together to see whether or not there are some higher priorities 
because of these emergency situations.
    So our purpose is to try to get to the highest priority 
places and there are tradeoffs. I do not want to sound like I 
am denying that. There are tradeoffs when we do that. But it is 
important to get those dollars out there as quickly as we can 
to try to do the most important restoration work that needs to 
be done as quickly as we can.
    Mr. Rey. I think one of the reasons we are not as precise 
as we would like to be is that we have not done 2003 
allocations yet, for obvious reasons. That is something we 
ought to come back and talk to you about when we are at the 
point of doing our 2003 allocations. We would be able to show 
you then precisely what projects are going to be deferred in 
the interest of doing rehabilitation work on the Biscuit Fire 
or, in the case of New Mexico, some of the New Mexico fires.
    Senator Wyden. Well, gentlemen, just put me down as a big 
skeptic of this whole redirection concept. I am not doubting 
your sincerity and your desire to figure out a way to make 
these tradeoffs, but I think that the chairman, Senator Smith, 
and all of my colleagues are coming back to the same point. We 
are not going to get these key projects done by osmosis. It is 
going to come through actual resources. Chief, I think the 
example you gave is well and good, and I appreciate it.
    The Biscuit Fire is the biggest fire that we had, and I am 
still walking out of this room unclear about how the funds 
under this so-called redirection are going to get the work 
done. And still I am very concerned, as Senator Smith has 
correctly noted, that these dollars are going to come from 
other valuable projects in our region, when overall we are 
coming up short.
    I see the light is on and I want to give you a chance to 
respond. Then if I might, Mr. Chairman, just touch very briefly 
on one other matter.
    Mr. Bosworth. I just want to point out if you take the 
fires from the year 2000, the fires from the year 2001, and our 
estimation from the fires of 2002, and then look at the total 
rehabilitation and restoration inventory that we have, it is 
somewhere in the vicinity of $445 million. The only choices we 
have are to look at other places and how we can adjust those 
priorities to try to get that rehabilitation and restoration 
work done.
    Senator Wyden. With all due respect, Chief, there is 
another attractive choice and that is changing the policy that 
you all have made to zero out fire rehabilitation and 
restoration. I think you will see some bipartisan interest in 
that.
    The only other question I have for you, Chief, is there is 
great bipartisan concern in our part of the country, amongst 
the rural commissioners and others, about the administration's 
zeroing out the economic action programs. These have really 
helped a lot of small communities. They get really tiny grants, 
by governmental standards--a few thousand dollars--and they 
have been able to use the segments particularly to develop new 
wood-related, value-added industries.
    How is the administration going to take up the slack after 
the abolition of those economic action programs?
    Mr. Bosworth. Well, first, I would like to say that zeroing 
those programs out is not intended to be a judgment on the 
value of those programs. This administration's policy has been 
not to fund earmarks on a recurring basis. Economic action 
programs have historically been pretty heavily earmarked.
    There are a number of other programs that we have that will 
also help with economic action, though. One example would be 
the watershed restoration authority under what we refer to as 
the ``Wyden language'' that allows us to spend dollars on 
private land if it is going to help national forest land and 
the watershed. That can also engage the community and help 
toward economic action.
    There are hazardous fuel funds that can be spent on private 
lands that can also enhance some of the economic action. We 
have got contracting and cooperative agreement authority for 
hazardous fuels that is flexible for executing local preference 
contracts that would allow us to give preference to local 
people for contracts.
    Also, some of the programs that came out of ``Jobs in the 
Woods'' from the Northwest Forest Plan are now embodied in 
other programs and other opportunities that we have that help. 
So there are ways that we can, I think, use the myriad programs 
that we have to try to achieve some help to replace some of 
those economic action programs. And I am sure some of them will 
be earmarked by Congress and we will implement those.
    Mr. Rey. Another opportunity is the rural development title 
of the farm bill, which Congress passed last June, which has a 
significant amount of mandatory funds for programs somewhat 
similar to economic action programs. And my counterpart, the 
Under Secretary for Rural Development, Tom Dorr, is moving 
aggressively to implement the farm bill's rural development 
title. We have talked about some of the kinds of projects that 
they would like to fund under that authority. That might be a 
different subject for a different hearing on a different day. I 
think, probably, Tom would be happy to come up and talk with 
you all about it. This is a program that is under the Ag 
Committee's jurisdiction but, nevertheless, does a lot of rural 
development work.
    Senator Wyden. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Let me see if I can summarize on my end and see if Senator 
Bingaman has any additional questions.
    First, we have a situation, Mr. Rey, that Senator Cantwell 
had requested regarding the investigative report on the Thirty 
Mile Fire. As we understand it, you are going to release the 
information to the ranking member and myself so that Senator 
Cantwell can review it. It still is a rather private document, 
but you are going to get it to us soon. Is that correct?
    Mr. Rey. It is more than a document. It is a record of 
about 4,000 pages or so. And we have talked with your committee 
counsel on both the majority and minority side to arrange for 
those documents to be provided to the committee for the 
committee's use.
    There are materials in the record that we would be 
transmitting that are sensitive under both the Freedom of 
Information Act and under the Privacy Act. There is pending 
litigation against the Government on both bases at the present 
time.
    The Chairman. Well, I was assuming that the Senator would 
be here, but in her absence, we thought it best to go ahead and 
lay this forth in the record. She will be advised of this 
dialogue and that it will be forthcoming. The committee staff 
will arrange it in the proper manner as described by you and 
understood by our staff.
    Having said that, let me go back to an issue that I was 
specific on, and maybe I would ask it in a more general way 
now. When some of us go home and we see a forest that had a 
burn 2 years ago, or 2\1/2\ years ago, 1 year ago, and we drive 
by it and perhaps people in the area talk with us about it up 
the road at a meeting, I am always hearing versions of why 
nothing is being done with reference to that burned piece of 
forest. Some have been delayed a long time. Some are very 
natural and time is not excessive.
    I am interested in seeing what this committee can do to 
help the situations out there and not just let them languish 
with us not knowing the facts. I am interested if you could 
submit to us some representative proposals that you have out 
there for cleanup that have been delayed by outside 
intervention with your idea and notions as to why that has 
happened.
    Now, I am not asking that you do that now, but I think on 
some of them, we ought to finally decide whether we should try 
to help out with some legislation or whether this is just the 
way it is going to be. So if there can be examples of what is 
causing delays that you all think are not necessary, that you 
would do a better job for the forest and for everyone concerned 
if you could proceed more expeditiously, if you could give us 
examples, that would be very helpful.
    And at the same time, if you would submit examples to us of 
delays in the urban interface situations where you are 
proposing refurbishing and cleaning up and are being delayed by 
outside intervention, examples of that and why would also be 
helpful.
    I understand there is a difference of opinion between some 
citizens of this country and their groups and feelings of their 
groups they belong to as what should or should not be done, but 
I think some time or another, we ought to find out what we 
think is right and see if there is something we should or 
should not be doing. So, could you do that for us?
    Mr. Bosworth. Yes, Mr. Chairman, we would be happy to do 
that. I know I do not have to convince you, but I would like to 
just put a picture up on the easel there for a minute. I find 
it difficult to believe that anybody that sees the forest after 
a burn, and sees how this looks, could disagree with trying to 
do treatments in some of these areas that would help.
    What this is, this is an area where the Hayman Fire last 
year burned. The area right in the middle that is green, that 
is the Polhemus prescribed burn that occurred in October of 
2001. You can see that the fire was burning from the right side 
of the picture toward the left. It hit that Polhemus treated 
area, which is about 8,000 acres, and essentially split the 
Hayman Fire so that it went around both sides of that 8,000-
acre tract. The only thing that is left out there today in this 
municipal watershed in this portion is the green part that we 
had treated. If that had been more than 8,000 acres, if it had 
been 20,000 acres that we had treated, that could have been 
enough possibly to stop the fire cold.
    In the end, this is what will take care of our huge fire 
costs. This is the kind of thing that will take care of the 
problems that people are facing. So I would be happy to get you 
the information if that will help to see what kind of changes 
we might make together so that we can get this kind of work 
done on the ground and change the way these fires will burn in 
the future.
    Mr. Rey. Based on the timing of that work, it was done with 
``happy forests'' money because it was a fiscal year 2001 
project.
    The Chairman. Let me talk a minute about grazing permits. 
Every year, we are confronted with having to put a rider on an 
appropriations bill with reference to grazing permits that the 
NEPA documentation has not been completed for the renewal in a 
timely manner. We keep getting assurance that we will not have 
to do that and we keep getting attacked by those that say we 
should not do that because we are escaping environmental 
review. The way I understand it, we have to continue to do it. 
To do otherwise gives people an opportunity to attack grazing 
permittees who, through no fault of their own, just have not 
been given the permit.
    So could you tell us where are we with reference to that 
program? Are we making headway? How many more years before we 
are able to say we are caught up?
    Mr. Bosworth. Our original plan and expectation was a 15-
year program that started in 1995 that would have gotten us 
caught up in 2010. We are behind in terms of the number of 
allotment management plans that we have, completed 
environmental studies on and decisions in--about 50 percent 
behind.
    The 2004 budget proposes a $7.3 million increase which 
would give a 33-percent increase in terms of the number of 
decisions that we would get made. So we are proposing some 
increases. We do need to get on top of those. It is something 
that has to be done, and that is why we proposed the increase 
in the 2004 budget.
    The Chairman. Has anybody thought of submitting to us 
justification for not having to go through with this ordeal on 
permits, or are we just going to admit for the future that we 
are going to have a NEPA requirement for grazing permits? Is 
that where we are?
    Mr. Bosworth. Well, without some significant policy 
changes, that is where we would be. I would be more than happy 
to sit down and work with you on some options that would either 
streamline it or change it.
    The Chairman. I think there are plenty of people in the 
Senate who would think this to be absurd. Yet, it has evolved 
not in this administration, but it evolved from one Department. 
Then the other started doing it. Now both BLM and the Forest 
Service are doing it which does not seem to me to have very 
much merit. It just delays things and spends a lot of money.
    Mr. Bosworth. The most important thing from my perspective 
is that we work carefully to make sure that the grazing program 
that we have is of benefit to the land and to economy, and that 
we take the right kind of approach that does not create damage. 
We can do that, I think, with a whole lot less analysis and 
paperwork than what we are doing right now.
    The Chairman. I have a last question that I am going to 
submit. I just want to call it to your attention as one that is 
important in my submissions. It has to do with the Apache-
Sitgreaves and the GMUG National Forests. I will just submit 
it, and if you would not mind giving that your special 
attention. There are some questions about the funding and the 
like. Would you do that please?
    Mr. Rey. I would be happy to respond.
    The Chairman. I have no further questions.
    Oh, Senator Cantwell is here. Senator, I was about to 
recess, and you were not yet here. In your absence we 
established in the record on your behalf that they are going to 
submit the documentation that you had sought with reference to 
the Thirty Mile Fire. The record now says they are going to get 
it to us, the full document, with the understanding that it is 
not to be made totally public but is for your private use for 
your perusal. Senator Bingaman and I will submit the request, 
and they already telling us the response will be to submit it.
    Senator Cantwell. Thank you, Mr. Chairman. Could I follow 
up with a question?
    The Chairman. Yes.
    Senator Cantwell. Thank you. I know the committee's time is 
important here and so I apologize. I was hearing from some 
local constituents on this very issue and budget in my office 
just now.
    Mr. Rey, I wonder if you could be more specific on when 
exactly we would get a copy of that redacted information?
    Mr. Rey. The record is being copied in Portland now. It is 
about 4,000 pages. It would be unredacted because that is what 
you are asking for. The total record is somewhere around 4,000 
pages. So as soon as we can make the copies, execute the 
exchange of correspondence, you should have it. It should only 
be a matter of several days I would hope.
    The actions were finally completed on February 6, last 
Thursday. So our deliberative process is completed. The 11 
employees against whom actions were taken still have some 
rights of appeal, but at least insofar as the agency's actions, 
they are now final.
    Senator Cantwell. Well, we will appreciate getting that in 
11 days. I just want to make clear for the record this 
committee has sought this information since last summer. At a 
previous hearing, it was promised to us in August. The 
committee, under the auspices of the chairman and ranking 
member, sent a written letter that was never responded to 
asking for the information.
    I understand that there are sensitivities as they relate to 
the disciplinary action taken against individuals, but critical 
to this entire process is to also understand what changes have 
been made by the Forest Service and that a certain group of 
employees have not just been made scapegoats for what might be 
a larger systemic problem within the Forest Service.
    I very much appreciate the chairman asking that question 
and the fact that we now have a new commitment to have that 
information before us for our private use. It is something to 
which I would like the chairman and the ranking member to 
continue to pay attention because I believe it is a larger 
problem than just that experienced at the Thirty Mile Fire.
    Mr. Chairman, if I could just ask another question here 
about the budget and the Northwest Forest Plan because--again, 
pardon my absence and for not hearing your whole testimony in 
person--but our State has probably done the most aggressive of 
any work on habitat conservation plans, with various timber 
interests working together in the Pacific Northwest. So we are 
not very interested in seeing that plan opened up. Is that your 
intention to try to reopen the Pacific Northwest Forest Plan?
    Mr. Rey. Not to reopen it--to see if we can make the plan 
work under its original terms by modifying some of the 
procedural aspects of the plan. To the extent we do any of 
that, though, it will be through a notice and comments on 
rulemaking process, so everybody will get a fair chance to 
evaluate whether what we are proposing is not within the four 
corners of the forest plan or whether it is. Our intention is 
to stay within the four corners of the forest plan but try to 
get it back to the point where it was 4 or 5 years ago when it 
was producing not only the environmental protections that were 
promised, but the output commitments that were promised as 
well.
    Senator Cantwell. Well, I think that we have had a lot of 
private sector or forest owners go to great lengths to come to 
the table and implement plans that we think are very positive 
for the Northwest. There is a lot of anxiety and concern about 
the President's timber plan as it relates to harvesting, which 
might threaten clean water and salmon preservation in the 
Northwest. So we will be watching very diligently and believe 
that the plan should move ahead as is.
    So thank you, Mr. Chairman.
    The Chairman. Senator Bingaman.
    Senator Bingaman. Let me ask about Community Forest 
Restoration very briefly. We passed the Community Forest 
Restoration Act back in 2000 and that established a forest 
health demonstration program in New Mexico that you folks have 
committed about $5 million a year to since that time. Do you 
intend to continue with that funding level in the next fiscal 
year?
    Mr. Rey. Yes. It is our anticipation to continue to fund it 
at current levels.
    Senator Bingaman. Let me ask about the local hiring 
preference that we wrote into the law. There is a provision in 
the law essentially saying that local contractors are to be 
given some preference in performing forest health related 
activities.
    It came to my attention that the work there at the Santa Fe 
watershed is not by a local contractor. I am not criticizing 
your choice there because I know nothing about the particular 
contractor that was chosen, but I was curious as to whether you 
are in fact taking steps to actually be sure that local 
contractors know about these opportunities and get every 
opportunity to take advantage of this local preference.
    Mr. Rey. The program manager for the collaborative forest 
restoration project is doing a significant amount of outreach 
to make sure that, to the extent possible, we are using local 
contractors for the projects.
    On the Santa Fe watershed, it is my understanding that once 
we negotiated through the appeals process to the specific kinds 
of treatments that were going to be allowed, we needed some 
specialized equipment that local contractors did not possess.
    Mr. Bosworth. Yes. I believe there was only one bid that 
was submitted on the Santa Fe watershed, is my understanding.
    Senator Bingaman. I do think it is important to try to be 
sure that local contractors know about these opportunities and 
bid wherever possible. Obviously I do not know the specifics of 
this case.
    Mr. Bosworth. And we will continue to do what we can do to 
try to emphasize that local aspect.
    Senator Bingaman. One other thing I would mention. Senator 
Domenici and I both worked very hard to get this legislation 
that is going to the President presumably in the next couple of 
days related to the Sandia Mountain settlement, and that gives 
you a substantial additional responsibility to manage that new 
relationship. Is that something that you feel ready and willing 
to do?
    Mr. Rey. You send us laws. We are always ready and willing 
to implement them, Senator.
    The Chairman. They relish it, Senator. They have been 
waiting anxiously for it.
    Senator Bingaman. Well, we are glad they are going to get 
it finally.
    The Chairman. We are glad we gave it to them----
    Senator Bingaman. Right, and not us.
    The Chairman [continuing]. Instead of in our offices.
    [Laughter.]
    Senator Bingaman. I agree.
    The Chairman. Anything further?
    Senator Bingaman. No.
    The Chairman. Thank you, Senator.
    We stand adjourned.
    [Whereupon, at 12:13 p.m., the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

    [Note: Responses to the following questions were not 
received at the time the hearing went to press].

                    Questions From Senator Cantwell
                   pacific northwest salmon recovery
    The President's FY 2004 request for NOAA-Fisheries includes $90 
million to recover coastal salmon runs and the Interior Department has 
proposed an $8 million increase in the U.S. Fish and Wildlife Service 
hatchery program, which will fund hatchery improvements in the Pacific 
Northwest. Other federal agencies have also requested funds for salmon 
recovery in FY 2004. The Forest Service is the single largest land 
manager in Washington State, yet it appears that the FY 2004 budget 
contains no new funding dedicated for salmon recovery.
    Question 1. In addition to funding for base operations for National 
Forests in the Northwest, does the Forest Service's FY 2004 budget 
include any funding specifically intended for Pacific salmon recovery?
                 assistance to small private landowners
    I appreciate the Forest Service's commitment to working with 
private landowners and the proposed increase in the Forest Legacy 
Program. This voluntary program gives landowners the option to sell 
their lands or interests in their lands for conservation purposes.
    However, many landowners wish to keep private lands in private 
ownership and be good stewards of their lands. That is why Congress 
last year established the Forest Land Enhancement Program (FLEP) in the 
2002 Farm Bill. FLEP is a voluntary program administered through the 
states that is designed to provide non-industrial private landowners 
the tools they need to manage private lands.
    Question 2. The Farm Bill authorized this program at $20 million 
annually, starting in FY 2003. However, on January 7, 2003, the Office 
of Management and Budget proposed a 40% reduction in funding for FLEP 
in FY 2003 to $8 million. Can you provide information as to the 
rationale for this cut?
                     pacific northwest forest plan
    Question 3. The 1994 Pacific Northwest Forest Plan has provided 
important benefits to the Pacific Northwest by providing a level of 
certainty and stability that did not exist immediately prior to the 
adoption of the plan. Mr. Rey has indicated that the Forest Service 
plans to propose a rulemaking ``within the four corners of the plan'' 
to provide additional timber harvest within the next year. Please 
provide information regarding the scope and timing of the proposed 
rule.
                             roadless rule
    Question 4. Mr. Rey, you indicated that the U.S. Forest Service is 
currently developing a draft roadless area rule. Please provide 
additional information about the scope and timing of your proposed 
rulemaking.
           healthy forest initiative--categorical exclusions
    In 1998, half of the Forest Service's timber harvest was 
categorized by the agency as furthering stewardship purposes. The 
principal stewardship goal of these sales was to reduce hazardous 
fuels.
    Question 5. The Healthy Forest Initiative would allow for 
stewardship sales to proceed via categorical exclusions. Therefore, 
under the Healthy Forest Initiative, these sales would proceed without 
any environmental analysis or public involvement under NEPA. Further, 
these sales would be exempt from citizen appeal. Thus, under the Forest 
Service's proposal, approximately half of the Forest Service's timber 
program would be exempt from NEPA and administrative appeal. Is this 
the case?
                    cascade conservation partnership
    Question 6. For the last several years, the Forest Service has 
included funds in its budget requests to acquire lands in conjunction 
with the Cascade Conservation Partnership. This partnership is an 
innovative program involving a private landowner, local conservation 
organizations and private donors. The FY 2004, however, included no 
funds for this worthy project. In addition to a general reduction in 
National Forest land acquisition, are there any specific reasons why 
the FY 2004 budget did not include funds for this program?
              funding for fire fighter safety and training
    I understand that money for firefighter safety and training is 
contained in the Forest Service's wildfire preparedness account. And 
while I'm pleased that the President's request includes more money for 
this function than last year, you will also recall that during this 
Committee's hearing on the Fiscal Year 2003 budget, I asked you whether 
the Forest Service tracks on a region by region basis how much it 
spends for safety and training purposes. You said that you would get us 
that information ``for the record,'' and that ``I think related to the 
findings of the Thirtymile incident, we will be increasing some of our 
safety and training programs.'' However, it later came to light that 
the Forest Service didn't actually track these figures. At a May 7 
hearing on wildland fire preparedness, Mr. Joel Holtrup, the Forest 
Service's Deputy Chief for State and Private Forestry, told me that 
``we do not track specifically yet how much we invest in safety per se. 
We are able to get that figure, but we do not have a database that does 
that specifically. We are developing one that will do that . . . . but 
we can get back to you on that question.''
    Question 7. To date, I don't believe we have officially heard back 
on those numbers, and it's not clear from reading this budget that you 
have put the database Mr. Holtrup alluded to in place. Do you now keep 
track of those numbers? If so, how much will you spend this year on 
training-related activities, and how do you think this compares to 
previous years? If not, how can you commit to me that the Forest 
Service is taking the effort to refornl its firefighter safety programs 
seriously when the budget for fire preparedness is actually being cut?
                            osha partnership
    Question 8. At various hearings this Committee held last year, we 
explored with the Forest Service the notion of entering into a 
partnership with OSHA to help ensure that improved safety policies and 
procedures were actually being implemented. At one point--a May 7, 2002 
hearing on wildland fire preparedness--Mr. Jerry Williams, the Forest 
Service director of fire and aviation management, assured me that an 
OSHA partnership was an option the agency was pursuing. Mr. Williams 
said that ``we are anxious to do anything we can to improve firefighter 
safety, including partnerships with OSHA.'' And that ``we are working 
with the region, the region is working with the local region of OSHA, 
and I believe that they are pursuing this'' partnership. Can you tell 
me whether the Forest Service has in fact entered into such a 
partnership. And if not, why?
                                 ______
                                 
                    Questions From Senator Domenici
                          grazing and drought
    Last year the drought forced some forests in New Mexico to pull the 
cattle and sheep off the grazing allotments, on very short notice, 
early in the year. We need an update on what the Forest Service plans 
to do if the drought continues.
    Question 1. Last year, due to drought, you shut down grazing very 
early, and on very short notice, forcing grazing permit holders off the 
National Forests in New Mexico. I assume we agree that the drought is 
still with us. What are you planning to do about this, this year?
    Question 2. What have you done to keep the permit holders up to 
date on your plans, so they have some time to plan alternatives if you 
have to close the allotments again this year?
    Question 3. I also know that you understand there is a tremendous 
backlog of grazing permit applications that must have NEPA 
documentation completed before they can be renewed. Will you give me 
your assurance that you will not close any permits during the time it 
takes to clear up the backlog of these permits?
                                 ______
                                 
                      Questions From Senator Wyden
                       hazardous fuels reduction
    Question 1. Chief Bosworth, in your submitted testimony you 
discussed the ``gridlock and analysis paralysis'' that you feel hinders 
your management objectives. But how do you expect to enhance 
collaboration and trust when you propose sweeping changes in the 
expansion of Categorical Exclusions for hazardous fuels reduction 
projects? You set no parameters on their scope: they can be inside or 
outside the Wildland Urban Interface, take large and green trees--even 
old growth--and there are no requirements for thinning from below. How 
do you defend yourself to the environmental critics without 
environmental standards?
                            fire suppression
    Question 2. Given the National Interagency Fire Center's 
predictions regarding the severity of this summer's wildfire season, 
what steps are being taken NOW to reduce and mitigate the effects upon 
our most vulnerable communities in the Wildland Urban Interface?
    Question 3. The Forest Service wants to spend over $1.5 billion 
managing wildfire in this budget. But according to a report produced 
last year by the Forest Service, firefighting crews were buying $10 
pens, L.L. Bean tents, carpet for campsites, and getting paid overtime 
to go sightseeing. What are you doing to assure that such abuses of the 
taxpayers trust do not happen again?
    Question 4. If you are going to salvage log in southern Oregon, it 
needs to occur only in those areas already designated as appropriate 
for timber harvesting--not in Wilderness, Late Successional Reserves, 
Riparian Reserves or other ecologically sensitive management areas. Can 
you provide the citizens of Oregon assurances that you will adhere to 
these limitations on salvage logging in southern Oregon?
    Question 5. The Biscuit Fire last summer devastated almost 500,000 
acres in southern Oregon, destroyed four homes, and required evacuation 
of 17,000 residents. Yet, the Medford airtanker base used by the Forest 
Service for aerial firefighting in the area remains slated for 
permanent closure. Many in the Rogue and Illinois valleys remain deeply 
concerned about the constant and serious threat of catastrophic fires 
in Southwestern Oregon. Don't you think it would be reckless and 
shortsighted to close this base?
                       aerial fire fighter safety
    Question 6. During the 2002 fire season, we saw three crashes of 
contracted aircraft (two airtankers and one helicopter) which resulted 
in five fatalities. We need to be committed to doing what is necessary 
to avoid the senseless death of these men and women protecting our 
homes and our natural resources. An Interagency Blue Ribbon panel 
determined that aircraft age, insufficient maintenance, and 
insufficient oversight by federal agencies contributed to these 
avoidable tragedies. What is the Forest Service doing to remedy the 
problem?
    Question 7. The Blue Ribbon panel on aerial firefighting safety 
raised serious concerns regarding the safety of the contracted fleet of 
airtankers as well as of the lead planes. In response, you permanently 
grounded the oldest airtankers, and temporarily grounded the 
remaining33 airtankers, pending analysis by Sandia labs. Recent 
analyses by independent labs has determined that the lead plane fleet 
is nearing its lifetime operating hours--and has possibly only two 
seasons of service left. Will your agency have the necessary aviation 
resources available for this year's fire season? Is there anything this 
committee can do to help the Forest Service assure these planes and 
tankers are ready for their duties in what promises to be another 
summer of intense fires?
    Question 8. The aging airtanker fleet needs to be replaced. In your 
agency's response to the Blue Ribbon panel's findings, you are 
examining various options, including federal purchase of newer C-130-
Echos with removable tanks, retaining current contractors and requiring 
greater oversight, purchasing new, purpose-built planes, or turning the 
whole aerial firefighting mission over to National Guard and Airforce 
Reserve units. While I certainly agree we need to assure the wise use 
of our federal funds, we need to make sure that safety is not 
sacrificed in the name of least-cost efficiency. Where do you stand in 
this long range planning?
                        economic action program
    Question 9. Rural communities in Oregon have been able to use the 
EAP to build their capacity to find long-term solutions to 
environmental and economic problems. It has also enabled communities to 
be good partners with the Forest Service. A couple of years ago, this 
Committee's subcommittee on Forests and Public Lands Management, heard 
testimony regarding this program's success. Oregon's Economic 
Development Department testified then about how EAP had helped timber 
dependent communities in my state attract new businesses and develop 
new wood related industries. The money was small--often in grants of 
just a few thousand dollars. But this was often enough to leverage 
additional funds and provide some enterprising community member the 
opportunity to start a new business. In the absence of the EAP, how 
does the Administration and the Forest Service plan to help rural 
communities adjacent to National Forest lands?
    Question 10. Recently, the Ecosystem Workforce Program at the 
University of Oregon released a report on the business and employment 
impacts of the National Fire Plan in 2001. The report found a small 
increase in the value of contracts awarded to local contractors. This 
is a very positive trend. However, we have heard that the use of larger 
contracts is increasing--making it difficult for smaller and local 
businesses to compete. In light of this disturbing trend, how will the 
Forest Service ensure we are getting the best value for the important 
restoration and hazardous fuel reduction work that needs to be done? Or 
is the National Fire Plan simply a full employment program for 
corporate interests?
    Question 11. What do you think the impact will be from focusing all 
of the funding on suppression and not making investments in 
rehabilitation and restoration? Isn't this short-sighted? What will be 
the impact on the ecological landscape as well as on our communities? 
Dirty water? Non-native invasive species? Landslides?
    Question 12. In terms of the Forest Service's stewardship 
contracting pilot program, there has been significant progress through 
the multi-party monitoring teams. It has been an important part of 
building trust. How does the Forest Service budget reflect its 
commitment to multi-party monitoring and collaboration? How will the 
budget reward people in the field for collaboration?
                              other issues
    Question 13. Staffing on Oregon's 13 National Forests have seen 
dramatic cuts since 1990: over 40% on average. Some Forests, like the 
Siskiyou--site of last summer's 500,000 Biscuit Fire--have suffered 
force reductions of over 60%. Yet, your Agency proposes more active and 
aggressive management of these Forests in the name of restoring forest 
health and reducing the risk of catastrophic wildland fire. At the same 
time, under the Department of Agriculture's ``Field Leadership 
Decisions Initiative,'' the Forest Service states a goal of competitive 
sourcing 11,000 positions by the end of FY 2005. What are you doing to 
assure that such sourcing is not compromising management goals and 
putting Oregon communities and our national treasures at risk?
                                 ______
                                 
                     Question From Senator Bingaman
    Question. Secretary Rey, last year I wrote to you regarding forest 
restoration work on the Lincoln National Forest in New Mexico. As you 
know, Otero County has been involved in putting together a local 
collaborative group to work with the local forest officials on forest 
health and restoration activities. You were very helpful in helping to 
provide initial funding for this work, as well as related work on 
forests in Arizona and Colorado. Last month, the Senate adopted Senator 
Domenici's amendment to allow hazardous fuels reduction funds to be 
used for this county partnership restoration program. With the fire 
season approaching, can you tell us if you intend to make sufficient 
funds available this year to maintain these collaborative efforts?
                                 ______
                                 
                      Questions From Senator Smith
    Question 1. The 2002 Biscuit Fire in Oregon resulted in a 
significant amount of wildlife habitat being burned but there was 
little impact to the marbled murrelet. According to a Forest Service 
wildlife biologist quoted in a news article, the primary habitat for 
the murrelet is in the fog zone. Yet, tens of thousands of acres inland 
have been designated as critical habitat and were affected by the 
Biscuit Fire. Will the designation of marbled murrelet habitat be 
reviewed?
    Question 2. U.S. Forest Service Fire and Aviation managers and the 
recent Blue Ribbon panel findings suggest Type 1 heavy-lift helicopters 
could replace some of the fixed-wing airtankers that have been grounded 
due to safety concerns. Has the Forest Service examined the possibility 
of using Type I helicopters; has any action been taken to secure the 
use of these helicopters during the upcoming fire season?

                                    

      
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