[Senate Hearing 108-196]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-196

ALTERNATIVE TREATMENTS FOR TIMBER; LAND EXCHANGE IN ARIZONA; PAYMENT IN 
       LIEU OF TAXES PROGRAM; AND VALLES CALDERA PRESERVATION ACT

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

                                HEARING

                               before the

                SUBCOMMITTEE ON PUBLIC LANDS AND FORESTS

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   on

                                 S. 432

    TO AUTHORIZE THE SECRETARY OF THE INTERIOR AND THE SECRETARY OF 
AGRICULTURE TO CONDUCT AND SUPPORT RESEARCH INTO ALTERNATIVE TREATMENTS 
  FOR TIMBER PRODUCED FROM PUBLIC LANDS AND LANDS WITHDRAWN FROM THE 
  PUBLIC DOMAIN FOR THE NATIONAL FOREST SYSTEM, AND FOR OTHER PURPOSES

                                 S. 511

TO PROVIDE PERMANENT FUNDING FOR THE PAYMENT IN LIEU OF TAXES PROGRAM, 
                         AND FOR OTHER PURPOSES

                                 S. 849

  TO PROVIDE FOR A LAND EXCHANGE IN THE STATE OF ARIZONA BETWEEN THE 
     SECRETARY OF AGRICULTURE AND YAVAPAI RANCH LIMITED PARTNERSHIP

                                S. 1582

      TO AMEND THE VALLES CALDERA PRESERVATION ACT TO IMPROVE THE 
       PRESERVATION OF THE VALLES CALDERA, AND FOR OTHER PURPOSES

                               __________

                           SEPTEMBER 11, 2003

                       Printed for the use of the
               Committee on Energy and Natural Resources


                                 ______

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                            WASHINGTON : 2003
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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
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                Subcommittee on Public Lands and Forests

                    LARRY E. CRAIG, Idaho, Chairman
                  CONRAD BURNS, Montana, Vice Chairmaa

GORDON SMITH, Oregon                 RON WYDEN, Oregon
JON KYL, Arizona                     DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LAMAR ALEXANDER, Tennessee           TIM JOHNSON, South Dakota
LISA MURKOWSKI, Alaska               MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            EVAN BAYH, Indiana
                                     DIANNE FEINSTEIN, California

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                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................     5
Craig, Hon. Larry E., U.S. Senator from Idaho....................     1
Ellis, Jeffrey P., Ph.D., Consultant in Chemicals and Plastics 
  Technology, Plantation, FL.....................................    26
Gioia, Tony, Council Member, Camp Verde, AZ......................    11
Kearney, Chris, Deputy Assistant Secretary for Policy and 
  International Affairs, Department of the Interior..............    21
Kyl, Hon. Jon, U.S. Senator from Arizona.........................     1
McCain, Hon. John, U.S. Senator from Arizona.....................     3
Mendoza, Harry, Commissioner, McKinley County, NM................    30
Rey, Mark, Under Secretary, Natural Resources and Environment, 
  Department of Agriculture, accompanied by Tina Terrell, Forest 
  Service........................................................    14
Thomas, Hon. Craig, U.S. Senator from Wyoming....................     5
Wells, Dennis, Manager, City of Williams, AZ.....................     7

                                APPENDIX

Additional material submitted for the record.....................    35

 
ALTERNATIVE TREATMENTS FOR TIMBER; LAND EXCHANGE IN ARIZONA; PAYMENT IN 
       LIEU OF TAXES PROGRAM; AND VALLES CALDERA PRESERVATION ACT

                              ----------                              


                      THURSDAY, SEPTEMBER 11, 2003

                               U.S. Senate,
          Subcommittee on Public Lands and Forests,
         Committee on Energy and Natural Resources,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Larry Craig 
presiding.

           OPENING STATEMENT OF HON. LARRY E. CRAIG, 
                    U.S. SENATOR FROM IDAHO

    Senator Craig. Good afternoon, everyone. The Subcommittee 
on Public Lands and Forests of the Committee on Energy and 
Natural Resources will be convened.
    We've got some time-sensitivity this afternoon. The two 
Senators from Arizona--the Senator from Wyoming, are needing to 
catch aircraft, and so we're going to adjust the agenda a 
little bit. To do so, I'll withhold my opening statement until 
Senator Kyl and Senator McCain have made their opening 
statements, and then I would ask Under Secretary Mark Rey to 
come forward with Dennis Wells and Tony Gioia to discuss with 
us the primary issue that the Arizonans are focused on at this 
hearing, S. 849, which would provide a land exchange in the 
State of Arizona between the Secretary of Agriculture and the 
Yavapai Ranch Limited Partnership.
    So, with that, let me turn first to my colleague from 
Arizona, Jon Kyl, for his comments, and then we'll move on.

      STATEMENT OF HON. JON KYL, U.S. SENATOR FROM ARIZONA

    Senator Kyl. Thank you very much, Mr. Chairman. What I'm 
going to do is submit my statement for the record and simply 
give about 60 seconds of background.
    And then I'd like to yield to Senator McCain, who will have 
a statement that I'm sure expresses our views with respect to 
the Yavapai land exchange, simply to say that this is a very 
large land exchange and would be very difficult to accomplish 
administratively. That's why folks came to both Senator McCain 
and me asking for help in getting it done legislatively. There 
are about 35,000 acres of private land, a lot of it 
checkerboarded. You've got some ponderosa pines of, I think, 
over 200 or 300 years, and juniper over 500 years old. The land 
wraps around a juniper wilderness area, and, therefore, would 
be a sound thing for us to do, both from a management 
perspective of the Prescott National Forest, as well as 
environmentally sound. And, of course, the Forest Service has 
land that it would like to exchange that would help the city of 
Williams, that would help the city of Flagstaff, and then some 
additional land that has some commercially develop-able 
potential.
    So all the elements are there for a good exchange. I want 
to thank Mark Rey and the Forest Service people for being very 
cooperative and trying to work out a lot of problems. The bill 
is probably not perfect. There are a few things that still need 
to be looked at. Senator McCain, I know, wants to hold some 
meetings in Arizona with people who are affected, and then 
hopefully come back to the committee and take whatever action 
is appropriate at that time.
    When we get to the witnesses, I would like to also say a 
word or two about at least one of the witnesses from Arizona 
who is here.
    But I hope that the committee will be able to eventually 
act positively on this land exchange proposal.
    [The prepared statement of Senator Kyl follows:]

     Prepared Statement of Hon. Jon Kyl, U.S. Senator From Arizona

    Mr. Chairman, thank you for holding this hearing on S. 849, the 
Northern Arizona National Forest Land Exchange Act of 2003. This bill, 
which I introduced with Senator McCain, facilitates a large and very 
complex land exchange in Arizona. This work is the product of months of 
discussions between the Forest Service, community groups, local 
officials, and other stakeholders. It will allow communities to 
accommodate growth and improve the management of our forests; it will 
also yield many environmental benefits to the public.
    This bill will protect some of Arizona's most beautiful ponderosa 
pine forests from future development by placing approximately 35,000 
acres of private land into public use: It consolidates a 110 square 
mile area in the Prescott National Forest near the existing Juniper 
Mesa Wilderness under Forest Service ownership, to preserve the area in 
its natural state and prevent its subdivision. This land has old growth 
ponderosa pine that is at least 250 years old and juniper that is 500 
years old or older. Consolidation will preserve the area for watershed 
management, wildlife habitat, and outdoor recreation. Without 
consolidation, these tracts would be open to future development. I am 
pleased that this bill will preserve them for future generations.
    This bill significantly improves management of the Prescott 
National Forest. The existing checkerboard ownership pattern in the 
Prescott makes management and access difficult. The exchange improves 
management of the forest by consolidating this land, and allowing the 
Forest Service to effectively apply forest-restoration treatments 
designed to improve forest health and reduce hazardous fuels. In turn, 
better management will help decrease the fire risk in Arizona's 
forests. The importance of improved management and efficient 
restoration treatments cannot be overstated given last year's 
devastating Rodeo-Chediski fire.
    In addition to protecting Arizona's natural resources, this bill 
allows several Northern Arizona communities to accommodate future 
growth and economic development, and to meet other municipal needs. The 
exchange will allow the cities of Williams and Flagstaff to expand 
their airports and water-treatment facilities, and develop town parks 
and recreation areas. The town of Camp Verde will have the opportunity 
to acquire lands for view shed protection. Several youth organizations 
throughout northern Arizona will be able to acquire land for their 
camps.
    This land exchange is supported and endorsed by many 
municipalities, religious institution's, environmental groups, and 
other non-governmental organizations in Arizona. Experts from the 
Arizona Game and Fish Department have reviewed the lands to be 
exchanged and strongly support the proposal. I have received hundreds 
of letters and petitions from residents expressing support for it. This 
exchange is extremely important to the residents of Arizona.
    Mr. Chairman, this land exchange is a unique opportunity to protect 
Arizona's natural resources while accommodating the tremendous growth 
that my state is experiencing. This bill is good for the state of 
Arizona and I plan to work with my colleagues to ensure that we pass 
this important legislation.

    Senator Craig. Thank you very much, Jon.
    Senator Thomas, you are time sensitive? You're okay for a 
few moments, okay?
    Well, then let us turn to the senior Senator from Arizona, 
John McCain for his testimony.
    Senator McCain. Thank you, Mr. Chairman.
    I had an hour-long opening statement, if that----
    [Laughter.]
    Senator Craig. Well, for the sake of everyone----
    [Laughter.]
    Senator Craig [continuing]. And I'm primarily referring to 
their backsides--how about cutting that a few minutes?
    [Laughter.]
    Senator Craig. Please proceed.

          STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR 
                          FROM ARIZONA

    Senator McCain. Thank you very much, Mr. Chairman. I 
appreciate the opportunity, and I will be brief, although this 
is a very complex--as my colleague, Senator Kyl, said, this is 
a very complex and perhaps the most challenging land issue that 
I have ever been involved in, and I've been involved in 
numerous wilderness bills and other acts of legislation that 
affected my State. But this is probably the most complex; and, 
frankly, still with issues unresolved, issue that I've been 
involved in.
    And, as Senator Kyl mentioned, it's 170 square miles of 
private and Federal forest lands in Arizona. It's of 
significance, not only because of its size, but because of the 
diverse nature of the lands involved, from literally all over 
the northern part of the State, the range of environmental and 
economic interests represented, and the associated benefits for 
Arizona's citizens and the American public, including the 
cities of Flagstaff and Williams, who very badly need 
additional lands in order to account for their growth and 
expansion.
    There are serious water issues that have been raised. There 
are serious land issues that have been raised by the State, and 
land conservation issues, as well.
    Senator Kyl and I have spent far more time and effort than 
I had ever anticipated examining this complex land exchange 
procedures and the issues associated with it. My support to 
facilitate the land exchange is contingent on the knowledge 
that the transaction represents a fair and equal value exchange 
which represents the interests of Arizona citizens and 
taxpayers. And obviously, Mr. Chairman, it must conform to 
standard appraisal practice in established Federal land 
exchange procedures, secure fair market value for the Federal 
land, and allow consideration of the views of Arizona citizens 
affected by the exchange.
    According to extensive documented communication with the 
Forest Service, the bill conforms to standard land exchange 
practices and established procedures. I believe the exchange 
will yield appreciable benefits to the public through the 
consolidation of national forest land to the communities of 
Flagstaff and Williams, in terms of economic and other 
opportunities, to a number of private camps, and to the 
communities of Clarkdale and Camp Verde. In particular, the 
public will benefit from the increased protection of the 
juniper wilderness area and the streamlined management of 
consolidated forest and range lands. The communities of 
Flagstaff and Williams and the private camps have expressed 
their strong desire to acquire lands involved, for various 
beneficial purposes.
    Benefits that will accrue to the Verde Valley Communities 
are less certain, particularly concerns regarding the 
availability of adequate water supplies to sustain new 
development of the 3,000 acres included in the Verde Valley. 
This bill restricts water usage on the two Verde Valley parcels 
to 850-acre feet per year as a responsible and necessary 
measure in a water-scarce area. However, current information 
indicates that groundwater supplies may be more limited than we 
originally understood. In addition, the Arizona Department of 
Water Resources has recently indicated that there are problems 
with the State enforcement of the conservation easements 
restricting water use.
    I'm very grateful to have the involvement and background 
and knowledge of Senator Kyl on this water aspect of it. As the 
chairman is probably aware, he once was heavily involved in all 
the water issues affecting our State.
    The information to be presented today on the range of 
benefits and effects of the land exchange warrants careful 
examination. As Senator Kyl mentioned, we intend, as this 
process moves forward, to be in consultation with the people, 
especially in the Verde Valley, where the controversy 
concerning this bill.
    I look forward to reading the testimony from the Forest 
Service and the Arizona witnesses, Mr. Dennis Wells, an old 
friend, and Mr. Tony Gioia.
    So, Mr. Chairman, I thank you. As I mentioned, this is 
very, very complex. There are still some issues that need to be 
ironed out, but I do think it's appropriate to move this 
process forward with this hearing at this time.
    I thank you, Mr. Chairman.
    Senator Craig. Senator, thank you very much for that 
testimony.
    Are there any questions of any of our colleagues to Senator 
McCain or Kyl, for that matter?
    [No response.]
    Senator Craig. Well, if not, we thank you very much. We 
will stay on this issue so that we don't conflict the record, 
and we'll ask Under Secretary of Natural Resources and the 
Environment for U.S. Department of Agriculture, Mark Rey, to 
come forward. We'll also ask Dennis Wells, city manager of 
Williams, Arizona, and Tony Gioia, council member from Camp 
Verde, Arizona, to come forward and be seated at the table.
    Senator McCain. Thank you, Mr. Chairman. I want to assure 
you, on the part of Senator Kyl and myself, this land will all 
be cleared for forest fire protection in case of passage.
    Senator Craig. Yes.
    Senator McCain. We thank you, Mr. Chairman.
    Senator Craig. Thank you.
    While these folks are being seated, why don't I turn to the 
ranking member of the full committee, Senator Bingaman, of New 
Mexico, for any opening comments he would wish to make on this 
or any other issue.

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

    Senator Bingaman. Thank you very much, Mr. Chairman.
    Let me talk about two of the bills. First, thank you for 
having the hearing today. I think it's very timely. I wanted to 
speak very briefly about S. 511, which is a bill to ensure that 
the fully authorized amount of the Payment in Lieu of Taxes 
program is made available to the States each year, removing 
that program from the appropriations process, where it's been 
now forever. As you know and as all of us from the West know, 
this is an extremely important program for the States that have 
a great deal of Federal land. Our local government entities 
there, particularly counties, are very dependent upon these 
PILT payments. They represent only a partial compensation for 
the loss of the tax base that's involved when the Federal 
Government owns a substantial amount of land in the county, but 
it's a very important source of funds for the local government 
entities.
    The PILT program has never been funded at its fully 
authorized level. This bill would ensure that it is funded at 
that level. I hope very much we can move ahead on that 
legislation successfully.
    Let me just point out that our witness today on S. 511 is 
county commissioner Harry Mendoza, from McKinley County, New 
Mexico, in our State. We're very proud of the work he's done. 
He's here representing the National Association of Counties. 
He's one of two county commissioners in the country who were 
recognized by the National Association of Counties with their 
2003 Caucus Courthouse Award for the good work he's done in 
bringing about an expansion of the courthouse in McKinley 
County. I've had the good fortune to work with him on many 
issues, and can attest to his great public service. I'm very 
pleased that he is here.
    The second bill I just wanted to say a word about is S. 
1582. This simply makes some technical changes to the Valles 
Caldera National Preserve legislation that we passed a few 
years ago. Senator Domenici and I were both strongly in support 
of that, and I think we both strongly support these clarifying 
and technical amendments. Those are also on your list of bills 
to be considered today.
    I appreciate you allowing this hearing on both of those 
pieces of legislation. Thank you.
    Senator Craig. Senator Bingaman, thank you very much.
    Now let me turn to my colleague from Wyoming, Senator Craig 
Thomas. He has a time-sensitive schedule today, also.

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

    Senator Thomas. Thank you, Mr. Chairman, I appreciate it. 
Thank you for having this hearing.
    I'm specifically here to comment on the Payment in Lieu of 
Taxes program. Certainly, we've been very supportive of that. 
We helped increase the authorization when I was in the House. 
I've spearheaded efforts now to keep it up through the fiscal 
year 2004. So, obviously, the support in counties and so on for 
this money is legitimate and is very necessary.
    However, I think it's important to take a look at the costs 
and the implications of this becoming an entitlement. As we're 
going through appropriations, it points out the fact that 
entitlements are fairly easy to set. You don't have to balance 
the rest of the budget and these other kinds of things. So it 
would cost nearly $4 billion over the next 12 years, in 
addition. So I think we have to really take a look at that, 
particularly. It would require us to find some additional 
sources of funding, take it away from something else or else 
raise taxes. So we need to take a long look at it.
    The point I wanted to make, however, is that I think 
there's another aspect of it that we ought to look at. Fifty 
percent of Wyoming belongs to the Federal Government. And they 
were concerned about adding more Federal land in our State. 
Over the past 8 years, there's been 130-million-acre increase 
in the number of acres that qualify for PILT payments, 
representing a 25 percent growth in land eligible. Currently, 
614 million acres are eligible for PILT payments, and the 
Federal Government continues to acquire land. The State of 
Montana legislature, interestingly enough, passed a law to 
prohibit the sale of State lands to the Federal Government.
    So I think we need to take a look at that and put a little 
sense in it. I've had a bill, as some of you are aware, for a 
good long time that says No Net Loss of Private Lands Act, 
which would limit Federal land acquisition in States where the 
Federal Government owns more than 25 percent of the land. When 
the Government purchased a hundred acres, it would be require 
to dispose of a similar amount so that there's no net gain. 
This would not inhibit, of course, acquiring pristine or 
special areas. But I do think that as we see this PILT demand 
go up, we not only need to look at the funding, but we also 
need to look at the amount of acres that are continuing to go 
in there.
    And it works. We just did a thing in the Big Horn National 
Forest, where we provided Federal protection to a unique area 
and released planned Federal land to the private sector in 
another side. So we can do this.
    So, Mr. Chairman, I hope as we go forward with this, we not 
only take a look at the funding available for PILT, but also 
the requirements of funding, in terms of additional Federal 
land, most of which--much of which, particularly BLM land, does 
not have any particular significance, and it could well be 
traded off for some of the other kinds of things.
    So, thank you very much, sir.
    [The prepared statement of Senator Thomas follows:]

   Prepared Statement of Hon. Craig Thomas, U.S. Senator From Wyoming

    Thank you, Mr. Chairman. I appreciate you having this hearing and I 
wanted to be here to specifically discuss S. 511, which would provide 
permanent funding for the Payment in Lieu of Taxes (PILT) program.
    As you know, I am a supporter of PILT and have spear-headed efforts 
to increase PILT funding, including for Fiscal Year 2004. This program 
helps fund county governments for lost property taxes due to the 
presence of federal lands. In states like Wyoming, PILT funding is 
vital, as roughly half our land is owned by the federal government. 
However, it is important to look at the costs and implications of 
creating a new entitlement.
    Estimates indicate that creating a PILT entitlement would cost 
nearly $4 billion over a 12 year period. As a fiscally conservative 
member, I am concerned about the budget and our current spending, 
particularly with ongoing focus on defense and homeland security. 
Clearly, S. 511 will require us to find possible funding sources, which 
include increasing taxes or making cuts to other programs. Before such 
actions are taken, I strongly believe we have to look at our entire 
public lands system and address other concerns before moving forward.
    As I mentioned, since 50 percent of Wyoming is already owned by the 
government, I am generally not in favor of adding more federally-owned 
land to our state. Over past 8 years, there has been a 130 million acre 
increase in the number of acres that qualify for PILT payments, which 
represented a 25 percent growth in lands eligible for PILT payments. 
Currently, 614 million acres are eligible for the PILT program, and the 
federal government continues to acquire land. For those of us in the 
West, we know all too well that the federal government isn't always the 
best neighbor. In fact, the State of Montana recently passed a law to 
prohibit the sale of state lands to the federal government. Congress 
must instill some common sense and restraint in federal land 
acquisitions before creating an entitlement based on an ever-growing 
federal estate.
    Earlier this year, I introduced the ``No-Net-Loss of Private Lands 
Act'' which would limit additional federal land acquisitions in states 
where the federal government owns 25 percent or more of land. When the 
government purchases 100 acres or more, this bill would require the 
government to relinquish land of equal value it back into private 
ownership in the same state where the acquisition occurs. I want to 
emphasize that the bill would do nothing to limit ability to acquire 
pristine and special areas in the future. Through land exchanges, I 
have seen how well the concept of ``No Net Loss of Private Lands'' 
actually works. For example, in an area near the Big Horn National 
Forest, I worked closely with county commissioners to successfully 
provide protection for a unique area through federal acquisition, while 
releasing planned federal land relinquishments for the benefit of the 
neighboring county. Land exchanges can promote cooperation between the 
federal, state, and local levels of government.
    I hope this Committee will consider concepts included in the ``No 
Net Loss of Private Lands'' bill when discussing the PILT program, 
particularly before any action is created to provide permanent funding 
to compensate for federal government's insatiable appetite for 
additional land.
    Thank you Mr. Chairman. I look forward to hearing from our 
witnesses.

    Senator Craig. Senator, thank you very much. Obviously, 
PILT, for all us in public-land States, is a very valuable and 
important resource and form of revenue for our local counties. 
And I appreciate all of our efforts in that area.
    Now we're going to turn to our panelists. I am going to 
turn to our two citizens of Arizona first, because Secretary 
Rey will remain at the table for other issues that he's here to 
testify on. So we'll move in that direction. I think if we were 
to do this as a contest of who had traveled the furthest, 
gentlemen, you would be the winner and should ultimately be the 
first in line.
    So, with that, let me turn first to Dennis Wells, the city 
manager from Williams, Arizona, for your testimony.
    Dennis.

              STATEMENT OF DENNIS WELLS, MANAGER, 
                      CITY OF WILLIAMS, AZ

    Mr. Wells. Thank you, Mr. Chairman.
    Good afternoon, Mr. Chairman and members of the 
subcommittee. My name is Dennis Wells. I am the city manager 
for the city of Williams, which is located 30 miles west of 
Flagstaff, north-central Arizona.
    My previous public service includes 18 years as a member of 
the Coconino County Board of Supervisors, Flagstaff, nearly 5 
years with the Arizona State Land Department, first as deputy 
State land commissioner and then as land commissioner, and, 
most recently, as town manager for the city of Williams.
    I'm here today representing five cities and towns: 
Flagstaff, Camp Verde, Clarkdale, Cottonwood, and Williams, all 
of which have land parcels involved in the Yavapai Ranch land 
exchange.
    What I would like to do, and in the interest of time, is 
simply to speak from personal experience. The first hat I would 
like to put on is my hat as the city manager.
    Williams is in a water crisis. I am fortunate in that I'm 
able to follow through on some of the things my granddad 
started back in 1913, when he first came to Williams, and all 
through the years he and my father fought to assure water 
adequacy and water development for the Williams area.
    Williams has been dependent upon surface water throughout 
its history. Just recently, we began to drill deep water wells, 
some of them approaching 4,000 feet deep into our aquifer red 
limestone. My reason for stating this is that I believe, as a 
city manager, that not only Williams, but the other cities 
involved, have some immediate and very pressing needs which 
this land exchange will help to address. Williams is in a water 
crisis. We need water wells. We need some additional water 
wells to assure the water future of the Williams area. Williams 
is one of the last untouched or relatively sleeper communities, 
if you will, on the Mogollon Rim, and we know that growth is 
coming, the growth demand is there, and we need water to 
accommodate those needs, not only for the town, but for the 
country residents in the area, as well.
    Williams also has a wastewater plant we need to build. 
We're not in ADEQ standards currently. We have an airport 
expansion which this land exchange will help us to accommodate. 
And we have a new water filtration plant, which we need to 
actually double the water capacity of. So, you know, we have 
some very immediate and pressing needs; the water crisis, of 
course, being the number-one.
    City of Flagstaff, some very needy transportation needs. 
They need to expand their airport. They need additional runway 
length, and they need a second runway. Flagstaff has been 
basically saddled with an inadequate airport for a number of 
years. Any of you who have flown in and out of Flagstaff 
understand what I'm talking about. It's difficult and very 
costly to get in and out of Flagstaff by airplane. It is the 
capital of northern Arizona.
    These infrastructure choices and options for all five 
cities and towns, I believe are very important. I think there's 
an immediate need. If this exchange, for instance, were to go 
to an administrative process, I believe it would not happen. 
And certainly these immediate and pressing needs would not be 
addressed.
    Switching hats, I'd like to talk a little bit as a former 
State land commissioner. The checkerboard pattern, which I 
believe is somewhat--we used to call it ``smallpox'' at the 
Land Department, because it is really--it's a pox on the land. 
The checkerboard pattern is negative in a number of ways. And 
here we have an opportunity to consolidate a large piece of 
checkerboard land in North Arizona some 110-plus square miles 
in size. You can imagine a city planned and developed in a 
checkerboard pattern, where every other section was developed 
and then undeveloped. Can you imagine a park that was in a 
checkerboard pattern? You know, there are many, many negative 
factors involved with trying to manage a checkerboard pattern 
of land.
    This is another reason that we need to get this exchange 
going. The Yavapai Ranch, of which I've been familiar with for 
about 20 years now and visited many times, is a very unique and 
beautiful location. It does not need to be developed as a 
wildcat-style development on this checkerboard pattern, which 
will certainly have a very deleterious and negative impact on 
it into the future. So for that reason, I would say, in looking 
from the State perspective and from my experience as State land 
commissioner, we need this trade.
    Hat number three, which I would like to don, is really from 
the longest period of time in my public career, my 23 years in 
public life, and that is 18 years as a Coconino County 
supervisor working out of Flagstaff.
    You know, Congress has some enormous issues to deal with 
here. You're dealing with billions of dollars, you're dealing 
with a war on terrorism, how do you rebuild Iraq, $80-plus-
billion, enormous issues. Local government, on the other hand, 
deals with on-the-ground issues that are closest to the 
citizens and the people that are in on the countryside. And, 
you know, that's my love. Local government is my love. And I 
can tell you that the Yavapai Ranch land exchange will give 
these local communities the opportunity and the options to do 
what they need to do to supply the infrastructure they need to 
address water needs, transportation needs, schools, hospitals, 
many, many different impacts into the future. So, in my eyes, 
the Yavapai Ranch land exchange is certainly going to go down 
as a big piece of Arizona history and a very positive move by 
this congressional body.
    And, with that, Mr. Chairman, I believe I'd like to 
conclude my statements.
    Thank you.
    [The prepared statement of Mr. Wells follows:]

   Prepared Statement of Dennis Wells, Manager, City of Williams, AZ

    Good afternoon, Mr. Chairman and Members of the Subcommittee. My 
name is Dennis Wells, and I am the City Manager for the City of 
Williams, which is located on historic Route 66 in north central 
Arizona. My previous public service includes 18 years as a member of 
the Coconino County Board of Supervisors and nearly 5 years with the 
Arizona State Land Department as the Deputy Commissioner, and then 
State Land Commissioner.
    I am a third-generation native of Williams, Arizona. My great-
grandfather first traveled to Northern Arizona in the late 1800's as a 
surveyor with the Atchison Topeka and Santa Fe railway for a rail line 
along the 35th parallel. My grandfather, Frank Wells, settled in 
Williams in 1913, one year after statehood. He acquired the Williams 
Grand Canyon News; the local newspaper is still owned and managed by a 
member of the Wells family.
    I am here today as a representative of five Cities and Towns: 
Flagstaff, Camp Verde, Clarkdale, Cottonwood, and Williams; all of 
which have land parcels involved in the Yavapai Ranch land exchange 
exchange, and all of which have strongly endorsed the land exchange 
proposal. I also bring letters of support from the elected officials of 
Prescott, Prescott Valley, Chino Valley, and the Coconino County Board 
of Supervisors, all of which are interested in seeing the land exchange 
move forward due to the very significant land and watershed protections 
it will achieve by consolidating National Forest ownership on the 
Yavapai Ranch.
    Until recently, the City of Williams relied completely on surface 
water supplies to service the community. Water crises came and went, 
yet the community was always able to survive through conservation and 
very wise use of the water which was available. However, the current 
drought cycle, which some have called the worst drought in the past 
300-500 years, has severely challenged Williams and its northern 
Arizona neighbors. Surface water reservoirs in Williams are currently 
at a minimal 8% of capacity, I repeat, only 8% of capacity, and were as 
low as 4% as recently as the summer of 2002.
    The City of Flagstaff is facing similar water challenges.
    I begin my testimony with this emphasis on water to share with you 
the profound awareness of the importance of wise water management by 
the elected officials and managers of the five cities and towns 
involved in S. 849. All five of these cities and towns strongly support 
the passage and early implementation of the legislation because they 
believe that this trade will have a net-positive impact on our future 
water resources and municipal water programs.
    For the City of Williams, this land exchange will provide new land 
for important deep well drilling sites which are currently on Forest 
Service land. We need to acquire the Forest Service land because it is 
extremely complicated and time consuming to secure permits and other 
authorizations to drill and administer wells for municipal use on 
public land. And frankly, we hear from the Forest Service that they 
would prefer to get out of these types of permitting and administrative 
functions. The future of Williams and surrounding environs depends on 
the privatization of these parcels so we can expeditiously begin these 
efforts to augment our water supplies. Williams will also benefit by 
acquiring the land for our water filtration plant and a wastewater 
treatment plant expansion. Similarly, in Flagstaff, one of the parcels 
that will be conveyed to the City is the current site of their 
municipal water treatment plant.
    The Cities and Towns of Camp Verde, Cottonwood and Clarkdale 
support this land exchange because it preserves a 50,000 acre area in 
the upper Verde River watershed from future development. Rather than 
threatening the Verde Valley's scarce water resources, consolidating 
these pristine lands on the Yavapai Ranch into Forest Service ownership 
shields a possible recharge area of the upper Verde River. In addition, 
residential and commercial development on the exchange parcels in or 
near these cities and towns will be subject to new water conservation 
and land use restrictions, and local community planning standards. 
Water from current sources has already been identified for the parcels 
in this trade that would eventually be developed.
    I have stressed the benefits of this land exchange in terms of 
watershed management, water supply, and water conservation, but there 
are other conservation, economic and growth management benefits for our 
citizens and municipalities.
    This land exchange will create a block of more than 70,000 acres of 
unfragmented wildlife habitat. As the Arizona Department of Game and 
Fish has indicated, these Yavapai Ranch lands are prime big game 
habitat for populations of pronghorn antelope, elk, deer, turkey and 
mountain lion. The Yavapai Ranch lands also include the largest stand 
of privately owned Ponderosa Pine in Arizona, as well as Alligator 
Juniper trees that are more than 850 years old. Consolidation of these 
checkerboard lands will preserve thousands of acres for open space, 
recreation, hunting, and other wilderness activities. As a former State 
Land Commissioner, I can attest that preserving large blocks of 
pristine land is important to our way of life, and to our tourism based 
economies.
    Mr. Chairman, I would be remiss if I did not emphasize the 
significant economic benefits from this land exchange.
    The Cities and Towns of Flagstaff, Williams, Camp Verde, Cottonwood 
and Clarkdale also value the tax impacts and economic development 
benefits of the Northern Arizona Land Exchange Act of 2003. Through 
this exchange, lands adjacent to the Flagstaff and Williams airports 
will be passed through to these cities for future runway extensions and 
other airport improvements. Airport improvements are vital to northern 
Arizona's tourism-based economies as well as for business attraction, 
retention and expansion. Acquiring ownership of these lands will enable 
the cities to use federal matching grants for airport improvements and 
minimize general fund expenditures.
    Business park and commercial development are planned for some of 
the Flagstaff, Williams and Camp Verde parcels. The business park 
expansion at Flagstaff's Pulliam Airport will provide a new land base 
for a future high-tech employment center. In addition, this trade will 
privatize land along Interstate 17 for commercial development in Camp 
Verde. The new tax revenues from this commercial development are 
critically needed in Camp Verde, a rapidly growing bedroom community. 
The exchange parcels in Camp Verde will also accommodate an emergency 
response facility with fire, hazmat, and emergency medical services, 
essential for rapid response along rural stretches of Interstate 17. 
The Camp Verde parcel is already-impacted land along the interstate and 
highway 260, land that is located far above and away from the scenic 
and fragile lands along the Verde River bottom making it a logical 
place to accommodate future growth. And I note that the Yavapai Ranch 
partnership has committed in writing to keeping the land it acquires 
east of I-17 as open space. This view shed preservation is another 
reason the City strongly supports the exchange.
    Mr. Chairman, Flagstaff, Williams and the cities and towns of the 
Verde Valley are among the fastest growing communities in Arizona. The 
parcels included in S. 849 were carefully determined through 
negotiations between the Yavapai Ranch Partnership and each of the 
Cities, Towns, and Youth Camps involved. The parcels and land uses 
outlined in this exchange have been incorporated into community plans 
and ratified by our citizens. For example: this land exchange will 
allow Flagstaff to fulfill components of its Regional Land Use and 
Transportation Plan. Williams will have access to land to fulfill its 
comprehensive water program. Development near Clarkdale will be aligned 
with the Town's General Plan, and all real estate developments on the 
land acquired near Camp Verde and Clarkdale will be subject to new 
Water Declarations for water use restrictions, limitations, and 
conservation measures.
    In summary, Mr. Chairman, the land exchange embodied in S. 849 will 
advance and improve the quality of life for northern Arizona citizens, 
while at the same time protecting rare natural resources and 
consolidating a 110 square mile block of the type of pristine land that 
makes Arizona such a special place to live, work and vacation. I 
believe this land exchange is a ``win-win'' for all concerned.
    This concludes my testimony. Thank you for inviting me to speak 
today. I would be happy to answer any questions the Subcommittee might 
have.

    Senator Craig. Thank you very much, Dennis. We'll now turn 
to Tony Gioia, council member, Camp Verde.
    Welcome.

           STATEMENT OF TONY GIOIA, COUNCIL MEMBER, 
                         CAMP VERDE, AZ

    Mr. Gioia. Thank you. Thank you very much, Mr. Chairman and 
members of the committee. Thank you for the opportunity to 
testify on S. 849.
    I am a council member of the town of Camp Verde, and here 
today with me is David Leibforth, council member of the town of 
Clarkdale, the two parcels most impacted in the Verde Valley by 
this exchange.
    I speak as a private citizen representing thousands of 
concerned residents and many elected officials in the Verde 
Valley who have funded our trip.
    I carry thousands of signatures in opposition to the 
inclusion of the Camp Verde and Clarkdale parcels in this 
trade. The decision to legislate the trade has deprived the 
people who own the public lands of full participation. The 
proponent, Mr. Ruskin, would be given over 21,000 acres, 
including 3,020 acres of public lands in the Verde Valley for 
development. Over 47,800 acres of private lands are already 
available for our growth in the Verde Valley. We certainly do 
not lack private land. What we do lack, as others do, are the 
water rights and resources to support and sustain our growth. 
Camp Verde and Clarkdale are at only 20 percent buildout. We 
must find the water before more public lands are privatized, 
not after.
    My involvement with water issues includes co-chairman of 
Yavapai County Water Advisory Board and chairman of the Middle 
Verde River Planning Committee formed to implement Arizona 
Department of Water Resources Rural Watershed Initiative. This 
was conceived to protect and enhance watersheds. I also 
actively participate in numerous other regional local planning 
entities.
    Records of dried-up wells and declining groundwater levels 
are included in my submittal, along with the Department of the 
Interior's map of potential water-supply crises of 2025. The 
Verde Valley is identified as an area where, quote, ``existing 
supplies are not adequate to meet water demands for people, for 
farms, and for the environment.''
    The Verde Valley water supply is also threatened by 
litigation with the Salt River Project over subsurface water 
rights. Because water quantity and water quality are closely 
linked, we face such issues as arsenic concentration, e-coli 
contamination, and other threats to a safe water supply. Due to 
unacceptable arsenic levels, Camp Verde Water Company has 
closed eight of twelve wells in the town side. They now 
concentrate operations 7 miles outside of the town center. Like 
much of the arid West, our cities are having to look far afield 
just to find water to sustain present development. We would 
even consider projects to bring Colorado River water by 
pipeline from perhaps hundreds of miles away, were it feasible. 
The Verde Valley so-called ``conservation easements'' in this 
bill will actually allow, as you've heard, 850 acre feet per 
year--that is well over a quarter-billion gallons--to be drawn 
from lands which currently function as part of our watershed.
    Watershed protection has always been a major goal of the 
National Forests, since its inception in 1891. These easements 
will result in an additional water burden in our area to supply 
10,200 persons. To put it in perspective, that's more than the 
entire current population of Camp Verde.
    Of particular concern is a gaping loophole in the bill, 
which apparently exempts municipal and private water companies 
from any water-use restrictions.
    A recent U.S. Geological Survey fact sheet states that the 
present and future water situation in our valley is largely 
unknown. It poses fundamental questions concerning our 
hydrologic system relative to recharge, flow boundaries, 
sources of base flow, and the effects of current and future 
human water use.
    There is a major opposition to circumvention of the 
National Environmental Protection Policy Act. Surely the 
largest and most complex trade proposal in Arizona history 
merits impact analysis. There is substantial controversy over 
many provisions of this proposal. The granting of extensive in-
holdings, 5 square miles abutting the Juniper Mesa Wilderness, 
and the granting of water rights on the public lands, along 
with three 40-acre easements, to the proponent are obviously 
inconsistent with U.S. Forest Service land trade guidelines. 
There is an additional 6 square miles of private property that 
will be left in that checkerboard State abutting the Juniper 
Mesa Wilderness.
    The land values in the checkerboard area were established 
in 1999 at $1,925 per acre. In contrast, a .64 acre parcel 
adjacent to the Camp Verde trade parcel sold for $750,000 in 
2002. This begs the question of how equity can be reached.
    We ask that the exchange go forward only with public input 
and appropriate impact studies. In pursuance of the public 
interest above all else, we implore you to remove all Verde 
Valley lands from this proposal. Please review the materials we 
have submitted before you would act on this, and we thank you 
very much. And I welcome any questions.
    [The prepared statement of Mr. Gioia follows:]

    Prepared Statement of Tony Gioia, Council Member, Camp Verde, AZ

    Mr. Chairman and members of the committee. Thank you for providing 
us the opportunity to testify on Senate bill 849, the ``Northern AZ 
National Forest Land Exchange Act of 2003''.
    My name is Tony Gioia. I am a Councilmember of the town of Camp 
Verde, Arizona. I am here today with David Leibforth, Councilmember of 
the Town of Clarkdale. Today, I speak as a private citizen, 
representing thousands of concerned residents and many elected 
officials in the Verde Valley. They have funded our trip here to 
testify on their behalf before this body. This five minutes is one of 
the few opportunities provided to have their voices heard on this 
issue.
    Through letters and petitions, thousands of our region's citizens, 
including many public officials, have expressed strong opposition to 
the inclusion of the Clarkdale and Camp Verde parcels in this trade 
proposal. In 1998, citizens in the Verde Valley heard about a land 
exchange proposal to privatize national forest land near the towns of 
Camp Verde, Clarkdale, and Cottonwood. We learned that the exchange 
would not go through the normal agency process, but through 
legislation. The bill has been drafted by the proponent (Fred Ruskin) 
and his lobbyists. Negotiations with the Forest Service and Legislators 
followed. It amazes us that the public, who own these lands, have not 
been invited to participate in drafting the proposal. The local 
public's voice should be among the strongest.
    Among the over 21,000 acres of land Mr. Ruskin would be given in 
the trade, he would receive more than 3,000 acres of public land in the 
Camp Verde and Clarkdale area for residential and commercial 
development. Over 47,800 acres of private lands are already available 
for growth in the Verde Valley. We certainly do not lack private lands 
for potential development. What we do lack are the water rights and 
resources to support and sustain growth. Camp Verde and Clarkdale are 
at only 20% build-out! We must find the water before more public lands 
are privatized, not after! My involvement with water resource issues 
includes Co-chairman of the Yavapai County Water Advisory Board, a 
letter from which is enclosed in your packet.* Chair of the Middle 
Verde River Planning Committee, formed to implement the Arizona 
Department of Water Resources ``Rural Watershed Initiative'', conceived 
to protect and enhance watersheds. I also actively participate in 
numerous other regional and local planning entities.
---------------------------------------------------------------------------
    * All attachments have been retained in subcommittee files.
---------------------------------------------------------------------------
    Some records of dried-up wells and ground water supplies are 
included in my submittal along with the Department of the Interior's 
map of ``Potential Water Supply Crises by 2025''. The map depicts the 
Verde Valley as an area where ``existing supplies are not adequate to 
meet water demands for people, for farms and for the environment.'' The 
Verde Valley is also engaged in litigation with the Salt River Project 
over subsurface water rights. Because water quantity and water quality 
are closely linked, we face such issues as arsenic concentration, e-
coli contamination, and other threats to a safe water supply. In the 
recent past, Camp Verde Water Company has had to close 8 of it's 12 
wells due to arsenic levels. Like much of the arid West, our towns are 
having to look far afield just to find water to sustain present 
development--and we would even consider projects to bring Colorado 
River water by pipeline from perhaps hundreds of miles away were it 
feasible.
    The Verde Valley ``water restrictions'' in this bill will allow 850 
acre feet per year (well over 1/4 billion gallons). Allowing the common 
planned area development standard of four families per acre foot, with 
an average family of three, these restrictions would impose an 
additional water burden to supply 10,200 persons on the newly 
privatized public lands which presently contribute to our watershed. 
This number of people is equivalent to the entire current population of 
Camp Verde. Of particular concern is a gapping loophole in the bill 
which exempts municipal or private water companies from any water use 
restrictions.
    The U.S. Geological Survey recently released a fact sheet on the 
hydrogeology of the Verde River watershed as part of an investigation 
under the Rural Watershed Initiative. This paper, submitted to the 
record along with other materials on water, acknowledges that the 
present and future water situation in our valley is largely unknown. 
The USGS poses seven fundamental questions that must be answered 
concerning our hydrogeologic system, including questions regarding 
recharge, flow boundaries, sources of base flow, and the effects of 
human water use now and in the future.
    The Verde Valley Public Land parcels that would transfer to Mr. 
Ruskin sit on the Verde Fault, from which water is already being drawn 
by Camp Verde Water Company and the Cottonwood Waterworks. The Verde 
Fault apparently acts as a groundwater dam in some areas and as a 
pipeline in others. There is strong evidence that groundwater recharge 
is insufficient to meet existing needs in the area.
    A major basis for so much strong public opposition to this proposal 
has been the circumvention of the National Environmental Policy Act. 
This, the largest land trade proposal in Arizona's history, must 
include the environmental analysis that comes with NEPA to understand 
the potential impacts on water supplies and the other potential 
consequences to the vast area this exchange would effect.
    The aspect of NEPA that would be especially worthwhile in this case 
is the requirement that alternatives for a project be considered. 
Perhaps there are benefits to consolidating public ownership in the 
checkerboard lands of the Prescott National Forest and to the 
protection of the Juniper Mesa wilderness, but there is substantial 
controversy over many other provisions of this proposal. The granting 
of extensive inholdings (5 square miles) abutting the Juniper Mesa 
Wilderness and the granting of water rights and 40 acre easements to 
the proponent are obviously inconsistent with U.S. Forest Service land 
trade guidelines.
    Surely, there are alternatives that could benefit the public and 
the proponent. Instead, we are offered an all-or-nothing proposition 
with potentially devastating impacts to our communities.
    In conclusion, we ask, as we have for four years, that the exchange 
go forward only through the public process with appropriate impact 
studies and in pursuance of the public interest above all else. Should 
the legislation proceed, we implore you to remove from this proposal 
inclusion of all U.S. National Forest lands in the Verde Valley. I 
thank you and welcome any questions.

    Senator Craig. Mr. Gioia, thank you very much for your 
testimony.
    And before we ask questions of you, let me turn to our 
Under Secretary of Natural Resources and the Environment, Mark 
Rey.

        STATEMENT OF MARK REY, UNDER SECRETARY, NATURAL 
     RESOURCES AND ENVIRONMENT, DEPARTMENT OF AGRICULTURE, 
          ACCOMPANIED BY TINA TERRELL, FOREST SERVICE

    Mr. Rey. Thank you, Mr. Chairman. Good afternoon, Senator 
Kyl.
    Appearing with me, on my left, is Tina Terrell of the 
Forest Service, who has worked on this exchange and on the 
legislation and may assist me in responding to your questions.
    The Department supports the exchange of land between the 
Yavapai Ranch Limited Partnership and Northern Yavapai, LLC, 
and the Forest Service. We view the exchanged, looked at in its 
entirety, to be in the public interest. The benefits of the 
exchange and the legislation are outlined in my testimony, 
which I'll submit for the record.
    The exchange would consolidate the largest remaining 
checkerboard ownership in Arizona and simplify significantly 
the management of Federal lands. We do have a few concerns 
related to the partial deletion order and enforcement 
provisions associated with the conservation easements, and 
would be happy to work with the committee and the bill's 
authors to make what I think will amount to technical 
adjustments to the language in the bill, as introduced.
    With that, I would be happy to respond to any of your 
questions.
    [The prepared statement of Mr. Rey follows:]

Prepared Statement of Mark Rey, Under Secretary, Natural Resources and 
                 Environment, Department of Agriculture

    Mr. Chairman and members of the subcommittee: Thank you for the 
opportunity to present the Administration's views on S. 432--the Public 
Lands Production Research Act of 2002, S. 849--the Northern Arizona 
National Forest Land Exchange Act of 2003, and S. 1582--the Valles 
Caldera Preservation Trust Act. The Department does not oppose S. 432 
and supports the concept of the land exchange embodied within S. 849. 
The Administration would have no objection to S. 1582, if amended, to 
address concerns regarding the Federal competitive service, 
firefighting expenditures and the permanent Judgment Fund.

        S. 432--THE PUBLIC LANDS PRODUCTION RESEARCH ACT OF 2003

    S. 432 requires the Secretaries of Agriculture and the Interior to 
conduct and develop a research program into alternative wood 
preservative treatments for timber produced from public lands and lands 
withdrawn from the public domain for the National Forest System. This 
research program would include the use of silver-based biocides using 
silver produced from patented and unpatented mining claims. S. 432 
provides that the research program may be implemented through contracts 
with public or private laboratories or research institutes with 
experience in the treatment of such products. The Department does not 
oppose S. 432.
    The Forest Service has the largest forestry research organization 
in the world and is a national and international leader in forest 
conservation. Research conducted at our research stations and 
laboratories contributes to the advancement of science, and the 
conservation of many of our Nation's most valuable natural resources.
    Forest Service scientists carry out basic and applied research to 
study biological, physical, and social sciences related to very diverse 
forests and rangelands. We produce information and technology to help 
manufacturers, mills, and small business operators become more 
efficient and friendly to the environment. We produce information and 
technology that can lead to improvements in forest conditions through 
the use of wood and fiber resources which are more diverse in species 
and size classes. Increasingly, new construction utilizes wood products 
engineered to specified sizes, shapes, and properties, requiring new 
technologies and knowledge of wood and other materials. Researching the 
use of silver-based biocides will help us evaluate organic and non-
petroleum adhesives for wood products which could provide new ways of 
making larger materials from smaller timber resources.
    A few examples of silver compounds research conducted by Forest 
Service scientists include:

   Currently conducting a feasibility assessment of silver 
        compounds as a preservative for southern pine;
   Comparing six silver compounds in laboratory tests for 
        inhibition of fungal wood decay and Eastern subterranean 
        termite damage;
   Testing leach to demonstrate that silver containing 
        compounds bind to the woody substrate and can inhibit leaching 
        of boron.

    We commend the Chairman for recognizing the importance of research 
in this area. To our knowledge, the bill does not authorize any 
activity not already authorized under current law. USDA could designate 
this area of research as a high priority within existing authorities to 
address research priorities based upon resource issues across the 
Nation. The bill's legislative direction could require USDA to limit 
other high-priority programs or projects that may rely upon the same 
limited funding source.

 S. 849--THE NORTHERN ARIZONA NATIONAL FOREST LAND EXCHANGE ACT OF 2003

    The Department supports the concept of a land exchange between 
Yavapai Ranch Limited Partnership, the Northern Yavapai, L.L.C. and the 
Forest Service, which would consolidate the largest remaining 
checkerboard ownership in Arizona. We do however, have some concerns 
related to the parcel deletion order and enforcement provisions 
associated with the conservation easements and would like to work with 
the committee on some clarifications.
    S. 849 would authorize the exchange of approximately 55,000 acres 
of Federal and non-Federal land in the State of Arizona between the 
Secretary of Agriculture and Yavapai Ranch Limited Partnership. Pass-
through provisions allow for some of the Federal land acquired by 
Yavapai Ranch Limited Partnership and the Northern Yavapai L.L.C. to be 
reconveyed to the cities of Flagstaff, Williams, and Camp Verde, 
Arizona, or to summer organizational camps identified in the bill.
    This exchange can offer substantial benefits to all parties 
involved. The Forest units involved would benefit from simplified 
boundary management, reduced administrative costs, and the acquisition 
of lands adjacent to the Juniper Mesa Wilderness, which has significant 
forest, wildlife, and recreation values. Consolidating 110 square miles 
into solid Forest Service ownership is a significant gain from both 
administrative and resource standpoints.
    The Department has suggestions to improve one section in the bill. 
Section 4 in S. 849 establishes conservation easements on the Camp 
Verde and Cottonwood parcels. These parcels are located on the Prescott 
National Forest. S. 849 needs greater detail concerning: (1) how a 
memorandum of understanding with the State of Arizona will be developed 
to enforce the conservation easements; (2) when the memorandum will 
take effect and for how long; and (3) how the Federal Government will 
be removed from liability. We would be happy to work with the committee 
and the bill authors to provide additional details.
    In addition, the Department is concerned that the evaluation of the 
Federal parcels due to the conservation easements could result in the 
transfer of far more Federal land to the owners of the Yavapai Ranch 
and its related limited liability corporation than would otherwise 
occur if the market value of the Federal estate were fully and fairly 
valued, but the Federal government will hold these conservation 
easements in perpetuity.

            S. 1582--VALLES CALDERA PRESERVATION ACT OF 2003

    S. 1582, introduced by Senators Domenici and Bingaman, would make 
modifications to Public Law 106-248, the Valles Caldera Preservation 
Act. The Administration would have no objection to S. 1582, if amended, 
to address concerns regarding the Federal competitive service, 
firefighting expenditures and the permanent Judgment Fund.
    The Valles Caldera National Preserve located in central New Mexico 
is a unique landmass, with nationally important scientific, cultural, 
historic, recreational, ecological, wildlife, and fisheries values. In 
passing the Valles Caldera Preservation Act in 2000, Congress 
recognized those values and established the National Preserve as an 
experiment in public land administration that incorporates elements of 
public and private administration so as to promote long-term financial 
stability consistent with the protection of the natural resources and 
the sustained yield for timber production, and domesticated livestock 
grazing. Under the terms and conditions of the 2000 Act, Secretary of 
Agriculture Ann Veneman authorized the Valles Caldera Trust to assume 
management of the National Preserve in August 2002. The Trust, 
comprised of 9 members appointed by the President, now oversees the 
management of the Preserve.
    S. 1582 would:

   direct Federal agencies to classify rates of compensation 
        and classification of Trust employees so that these employees 
        are not precluded from consideration for Federal competitive 
        service based on their current employment;
   allow the Board of Trustees to designate any Trust employees 
        to solicit donations (under current law, only the Trustees may 
        solicit donations);
   allow the Board of Trustees to set the compensation of the 
        chair, subject to certain limitations;
   clarify that the prohibition against the disposal of real 
        property by the Trust does not include the sale or other 
        disposal of forage, forest products or marketable renewable 
        resources;
   allow the Trust, subject to the laws applicable to 
        Government corporations, to determine the character and 
        necessity for any obligations and expenditures of the Trust and 
        the manner in which expenditures and obligations shall be 
        incurred, allowed, and paid;
   authorize the Trust to utilize the permanent judgment 
        appropriation provided under section 1304 of title 31, U.S.C., 
        for a claim, judgment, or settlement against the Trust; and
   direct the Secretary to provide, to the extent generally 
        authorized at other units of the National Forest System, fire 
        suppression and rehabilitation services and wildland fire 
        severity funding for extraordinary preparedness. (The Secretary 
        of Agriculture currently may provide pre-suppression, 
        suppression and rehabilitation services at the request of the 
        Trust, subject to reimbursement.)

    The Administration has several concerns with S. 1582.
    First, it should limit the number of Trust employees that may 
accept gifts in order to minimize the potential for fraud, conflicts of 
interest, or other ethical concerns.
    Second, we have been advised that the Department of Justice opposes 
section 2(e) of the bill, regarding the eligibility of the Trust to pay 
claims, judgments, and settlements from the permanent judgment 
appropriation at 31 U.S.C. Sec. 1304 (the ``Judgment Fund''). In 
general, government corporations like the Trust should pay judgments 
and settlements out of their own funds. Because the Trust is an 
autonomous corporation with its own funds and an entity whose 
liabilities are properly charged to corporate funds, it is appropriate 
for the Trust to continue to satisfy judgments and settlements against 
it out of Trust funds.
    Third, OPM advises that Section 2 (a) of the bill would extend to 
excepted service employees of the Trust a preferential opportunity to 
apply for competitive service positions elsewhere that are not open to 
Federal employees generally, thereby creating an inequity between Trust 
employees and excepted service employees throughout Government who have 
no such opportunity.
    Fourth, complex or large fires can require the expenditure of 
extensive fire fighting and emergency stabilization and rehabilitation 
resources. However, the bill provides no limitation, by time or amount, 
to the funds that could be provided to the Trust under these proposed 
authorities. The original act provides an expectation that the Trust 
should work toward the goal of financial sustainability. We assume S. 
1582 continues that expectation with regard to fire suppression. The 
measure could be improved with the inclusion of language to establish 
limits of duration and funding for expenditures associated with 
firefighting together with appropriate levels of reimbursement.
    In addition, the intent of Sec. 4(b)(2) for the Secretary to 
provide ``rehabilitation'' needs to be clarified as to whether the 
intent is for the Secretary to provide emergency stabilization or 
rehabilitation. These are two different programs. Emergency 
stabilization funds come from the wildland fire emergency operations 
account and are meant to protect persons, property and resources 
immediately after a large and damaging wildfire. Rehabilitation 
activities are longer term and are conducted through other ongoing 
management activities funded under different program appropriations. We 
believe that the bill should focus solely upon emergency stabilization 
activities on the Preserve, subject to the same time and amount 
limitations discussed earlier related to firefighting.
    In addition, section 4(b)(2) would delete the current authority for 
the Secretary to provide the Trust presuppression activities subject to 
reimbursement. We believe it is appropriate for presuppression and 
rehabilitation activities to be provided by the Forest Service, under a 
cooperative agreement, with reimbursement by the Trust.
    This concludes my statement. I would be pleased to answer any 
questions that you may have.

    Senator Craig. Mr. Secretary, thank you very much.
    Let me turn first to my colleague from Arizona, who needs 
to leave in a few moments, to let him do the first round of 
questions, and then I'll follow.
    Senator Kyl. Thank you very much, Mr. Chairman. I was going 
to introduce my old friend, Dennis Wells. I've just recently 
gotten to know Mr. Gioia. But since they were introduced 
otherwise, I'll just ask that Mr. Wells' fellowship for State 
and local executives at Harvard not be used against him on this 
Committee.
    [Laughter.]
    Senator Craig. It will be dutifully noted.
    [Laughter.]
    Senator Kyl. Yeah. He thought it important to get a 
perspective from the other side, but----
    Senator Craig. All right.
    [Laughter.]
    Senator Kyl. He has a long history of involvement in land 
and water issues in Arizona, and I did want to make that point.
    And I, again, want to reiterate that the Forest Service has 
been very, very helpful to us. As both of the other witnesses 
have noted, and as Senator McCain said, this is huge and 
there's a lot of complexity to it and just a lot of issues. And 
as soon as you think you have them all solved, somebody else 
comes forward with another question, and you work through that.
    And I think, actually, this is not a problem with this 
exchange; it is an indication of how we can solve these 
problems. We could have never done it without the help of the 
Forest Service. They've been very candid. There were certain 
issues that they were concerned about. We worked through some 
solutions with them. And I think there are a couple of things 
that we still have to iron out, although, hopefully, as Mark 
Rey said, they will be technical in nature.
    The bill that's introduced here in the Senate is not a bill 
that is 100 percent, I think, supported by the Ruskin Family. 
It is supported by the Forest Service, with some caveats. And I 
think that is also true for other people in the region, because 
it is so complex. But I think that very fact, as I said, 
indicates a strength here, not a weakness. And in the meetings 
that Senator McCain and I hope to have with--and there have 
been many meetings so far; don't get the impression that there 
haven't been meetings--but in the meetings that we plan to 
have, we'll hope to hear additional comments, and if there are 
additional things we need to do to bring those suggestions to 
you so that the Committee won't have to do all of this work by 
itself. Hopefully we will have done that work for the 
committee.
    I don't have any specific questions of either of the two 
witnesses, but I would like, in the interest of time--I think 
they both--I know Mr. Gioia has some questions that he would 
like to have answered. What I'd like to do is submit those 
questions for the record to the people who can appropriately 
answer them. I think that'll provide the record that we need.
    And subject to that, I think I wouldn't have any additional 
comments, unless any of the other witnesses wanted to make a 
point.
    Senator Craig. Thank you.
    Let me move through some questions.
    Senator Kyl. Oh, can I just say one other thing?
    Senator Craig. Yes. Please do.
    Senator Kyl. The word ``camps'' was mentioned earlier, and 
I wanted to explain what that is. There are a variety of camps. 
There's a camp for kids, for example, that is involved in this, 
and that's what that was referring to. There's a town called 
Camp Verde. But Young Life, for example--I think some of us are 
familiar with Young Life--and they're very strongly in support 
of this, because they have a camp that's involved in the land 
exchange.
    So it's not just municipalities who will have airport 
needs, water needs, and so on met by this land exchange, or the 
benefit to the forest of being properly managed. There are some 
other interests who are strongly supportive because of the 
value to them, as well.
    Senator Craig. Thank you very much, Jon.
    Mark, how long would it take you to undertake a normal 
administrative exchange process on an exchange as complicated 
as this if it were not legislated? What would be your 
guessimate as to the time it would take to facilitate something 
of this kind by the Forest Service?
    Mr. Rey. Probably to get to a final exchange, somewhere in 
the neighborhood of 7 years. And any appeals for administrative 
decisions and litigation would follow that period.
    Senator Craig. Okay.
    Mr. Gioia, you've heard the testimony of Senator McCain, 
Under Secretary of Agriculture, and Mr. Wells. Understanding 
the concerns you've raised in your written and oral testimony, 
will the people you represent be better off if this exchange 
falls through? And I don't know what the plans of the current 
owners of the Yavapai Ranch are, but if their plans were to 
develop into subdivisions, what would be your reaction to that 
now that you have the perspective you have on the land and the 
property surrounding your interests?
    Mr. Gioia. I don't think necessarily that the constituents 
in the Verde Valley would be better served if the entire 
proposal falls through. It does have fine points to it; 
however, the desire for certain entities to acquire Forest 
Service lands, public lands, are enabled through the Town Site 
Act, so it's not a total loss for Flagstaff, Williams, the 
Prescott area. Camps could also be part of that, and those 
turned over through the agencies involved in the Town Site Act.
    For the Verde Valley, it is hard to convey to you the water 
situation. It's equally hard to convey to the public in the 
Verde Valley when they turn on the tap and water does come out. 
However, one council member, Diane Jones, wrote to the members 
of this committee and discussed how one morning, for a day and 
a half, the water didn't come out of the tap. The sand had--the 
water company that she subscribes to, sand had destroyed their 
pumps, and those pumps, of course, had to be replaced. Recharge 
time for those well areas had to be allowed. And it shows how 
fragile our water resources are.
    To stick to your question about whether this proposal can 
follow through and assist--to convolute your question a little 
bit; I apologize--but assist those other persons who might 
benefit from this, I think it is possible. And I believe that 
through, for one, the checkerboard area, the original proposal 
that Mr. Ruskin brought to me and other representatives of the 
Verde Valley originally had the line that separates the upper 
portion which would become private property, and the lower 
portion which was intended to protect the wilderness was south 
by a good number of square miles. If the majority of this trade 
took place within the checkerboard area and still leaving the 
financial equality or equity for the trade portions to include 
Flagstaff, Williams, and the camps, I think it's perfectly 
possible. And I think the problems that the Verde Valley 
certainly have--and, as I said, we are working through science 
to solve those problems--but if there is water that has been 
found recently, it's not potable.
    We have--each individual town has tried different things to 
improve their water sources. Cottonwood has gone to Cornville, 
which is a bit on the plateau and out of the Verde Valley to an 
extent, to acquire some more water, to buy land and pipe that 
water down to Cottonwood.
    We have a severe water problem. I think it would only 
exacerbate that problem.
    Senator Craig. Well, thank you very much for that 
testimony.
    Now let me turn to you, Mr. Wells.
    There's been suggestions that Congress not legislate this 
land exchange, but rather that it be processed through the 
Forest Service's administrative channels, and I think you've 
heard Mr. Gioia refer to other methods by which cities or 
communities can gain additional public lands for growth and 
expansion purposes. And I think you've just heard also from 
Secretary Rey--I understand it at a minimum of four and 
possibly as much as seven or eight, assuming that there would 
be the potential for possible appeals and litigation, which is 
always the character of that type of activity. How do the 
cities and towns you represent feel about waiting for the 
exchange to go through the normal administrative process?
    Mr. Wells. Yes. Mr. Chairman, I would first like to say 
that I believe a wait of 7 years, I believe Mr. Rey alluded to, 
would basically--first of all, I think it would kill the 
exchange. I don't believe, having looked at exchanges that have 
gone through in the past, the a number of moving parts on this 
one, the complexity and size of it, I don't believe this 
exchange would be able to be accomplished in an administrative 
fashion. I think there's simply too many moving parts.
    But to answer your question, sir, I would say that the wait 
is simply too much--it's definitely too much for us. We have 8 
percent in our water reservoirs and one producing water well. 
We need drilling sites that are currently on public land. We 
need those in private hands to where we can utilize them, get 
the permits quickly, and not have the burdensome and 
troublesome process of attempting to drill on public land.
    I would like to say, there are a number of other needs that 
we have--the waste-water plant, the water plant. And simply to 
finish answering your question, I think legislative versus 
administrative, we all need to look at the support that this 
proposal has. And I don't know that that support would 
necessarily be willing to carry through for 7, 8, 10 years. I 
just don't see--I see there's too much complexity, sir.
    Senator Craig. Well, gentlemen, thank you very much.
    Both of my colleagues, Senator McCain and Senator Kyl have 
spoken to me about the complexity of this issue and the reality 
that not everyone is satisfied or pleased about it. We'll make 
every effort, working with our Arizona colleagues, to resolve 
any disputes that are there as we work our way through this 
legislation.
    So we thank you all very much for your testimony. Any 
additional information you wish to supply the Committee that 
might be informational in helping us shape this legislation 
would also be appreciated.
    Thank you very much.
    Secretary Rey, if you will stay, we'll proceed forward.
    We have obvious consideration today of several pieces of 
legislation--the one that you've just heard spoken to, S. 849, 
Senator Bingaman spoke to S. 511, which would provide permanent 
funding for Payment in Lieu of Taxes for other purposes. We're 
considering testimony on S. 432, a bill to authorize the 
Secretary of the Interior and the Secretary of Agriculture to 
conduct and support research into alternative treatments for 
timber produced from public lands and land withdrawals from the 
public domain for the national forest and other purposes. Also 
to review, as Senator Bingaman mentioned, S. 1582, an amendment 
to the Valles Caldera Preservation Act to improve the 
preservation of the Valles Caldera.
    So, with that, we've been joined by Chris Kearney, Deputy 
Assistant Secretary for Policy Management and Budget, United 
States Department of the Interior. Chris, we'll turn to you for 
your testimony on the legislation you've come to testify on, 
and then we'll return to Secretary Rey.

PREPARED STATEMENT OF CHRIS KEARNEY, DEPUTY ASSISTANT SECRETARY 
    FOR POLICY AND INTERNATIONAL AFFAIRS, DEPARTMENT OF THE 
                            INTERIOR

    Mr. Kearney. Thank you, Mr. Chairman. And thank you for 
giving me the opportunity to testify today before S. 511, a 
bill to make the Bureau of Land Management's Payment in Lieu of 
Taxes program and the U.S. Fish and Wildlife Service Revenue 
Sharing program mandatory.
    A hearing on PILT took place last year on May 9 before this 
subcommittee, and our position on this bill remains, as it was 
then, unchanged. We strongly support the PILT and RRS programs, 
and view them as high priorities, but we are strongly opposed 
to S. 511, because it would force the Federal Government to 
either raise taxes or cut into other programs that are integral 
to the President's budget and important to the American people.
    We do believe that our 2004 budget request demonstrates our 
commitment to PILT. The administration requested $165 million 
in fiscal year 2003 and $200 million in fiscal year 2004, an 
increase of $35 million. In addition, while the total amount 
requested for all programs by the Department for 2004 represent 
a 3.3 percent increase from prior years, the request for PILT 
is more than 21 percent over last year's request for this 
important program, reflecting our continued commitment and 
obligation to the PILT program, even in the context of other 
significant budget priorities.
    I might also add that since fiscal year 2001, our budget 
requests for PILT have increased a total of 48 percent, and 
that request is only outstripped, in percentage terms, by the 
programs of the Office of the Special Trustee.
    While we recognize the importance of the PILT program, 
though, it should not be viewed in isolation from other 
departmental and Federal programs that bring, or will bring, 
benefits to the counties in the future. Examples include 
funding provided for rural fire assistance and our efforts to 
work with gateway communities.
    Let me speak just for a moment on the section of the bill 
that relates to the formula. Section 2 of the bill would amend 
the funding formula for PILT by replacing the present 
limitation of $135.07 times the population with $265.68 times 
the population and amending the table at the end of the section 
to reflect corresponding increased or decreased amounts for 
each population level.
    The administration appreciates the bill's intent to help 
compensate those counties with high public land acreage and low 
population. Given the complexity of the PILT formula and the 
intent of the program to compensate counties for the inability 
to collect property taxes on Federal lands, we must be careful 
to ensure that the compensation formula compensates those 
counties fairly and does not result in counties actually 
receiving payments that are substantially different than they 
would otherwise receive in order to achieve tax equivalency.
    Accordingly, we need to further examine this issue to 
determine the effect of increasing the population multiplier 
value over all counties, collectively. We're also concerned 
that this proposed change would increase the overall PILT 
authorization level significantly and, thereby, increase the 
cost of the bill even further. This council is in favor of a 
more systematic evaluation of how to address issues with PILT 
formula within the current authorization levels.
    We support protections for local government against the 
loss of property tax revenue when private lands are acquired by 
a Federal agency.
    Now, the administration recognizes that PILT payments are 
important to local governments and sometimes comprises a 
significant portion of their operating budget. The PILT monies 
have been used for critical functions, such as local search-
and-rescue operations, road maintenance, law enforcement, 
schools, and emergency services. These expenditures often 
support the activities of people from around the country who 
visit or recreate on Federal lands.
    The Department looks forward to continuing to work 
cooperatively with communities on these important issues.
    Mr. Chairman, this concludes my statement. I'd be happy to 
answer any questions that you might have.
    [The prepared statement of Mr. Kearney follows:]

 Statement of Chris Kearney, Deputy Assistant Secretary for Policy and 
           International Affairs, Department of the Interior

    Mr. Chairman and members of the Committee, I am pleased to have the 
opportunity to testify today on S. 511, a bill to make the Bureau of 
Land Management's (BLM) Payment in Lieu of Taxes (PILT) Program and the 
U.S. Fish and Wildlife Service's (FWS) Refuge Revenue Sharing (RRS) 
Program mandatory. A hearing on PILT took place last year on May 9, 
2002, before this Subcommittee. Our position on this bill remains 
unchanged. The Administration strongly supports the PILT and RRS 
programs and views them as high priorities, but the Administration is 
strongly opposed to S. 511 because it would force the Federal 
Government to either raise taxes or cut into other programs that are 
integral to the President's budget and important for the American 
people.

                               BACKGROUND

    The PILT Act (P.L. 94-565) was passed by Congress in 1976 to 
provide payments to local governments in counties where certain Federal 
lands are located within their boundaries. PILT is based on the concept 
that these local governments incur costs associated with maintaining 
infrastructure on Federal lands within their boundaries but are unable 
to collect taxes on these lands; thus, they need to be compensated for 
these losses in tax revenues. The payments are made to local 
governments in lieu of tax revenues and to supplement other Federal 
land receipts shared with local governments. The amounts available for 
payments to local governments require annual appropriation by Congress. 
In the past, the BLM has allocated payments according to the formula in 
the PILT Act. The formula takes into account the population within an 
affected unit of local government, the number of acres of eligible 
Federal land, and the amount of certain Federal land payments received 
by the county in the preceding year. These payments are other Federal 
revenues (such as receipts from mineral leasing, livestock grazing, and 
timber harvesting) that the Federal Government transfers to the 
counties. In recognition of the fact that this program is multi-bureau 
in nature, beginning in FY 2004, funding and management of PILT will be 
administered at the Department level.
    The President's FY 2004 budget request demonstrates our commitment 
to PILT. The Administration requested $165 million in FY 2003 for PILT, 
and $200 million in FY 2004, an increase of $35 million. Furthermore, 
while the total amount requested for all programs by the Department for 
FY 2004 represents a 3.3 percent increase from the prior year, the 
request for PILT is more than 21 percent over last year's request for 
this important program, reflecting our continued commitment and 
obligation to the PILT program even in the context of other significant 
budget priorities. While we recognize the importance of the PILT 
program, it should not be viewed in isolation from other departmental 
and Federal programs that bring or will bring benefits to counties in 
the future. Examples include funding provided for rural fire assistance 
and our efforts to work with Gateway Communities to increase tourism 
opportunities.
    This year, some counties received slightly reduced PILT payments to 
adjust for increased revenue received during the previous fiscal year 
under the Secure Rural Schools and Community Self-Determination Act. 
This Act provides payments to compensate certain counties for declining 
timber receipts. The combination of PILT payments and payments under 
the Secure Rural Schools Act, however, will result in a higher overall 
payment to affected counties.
    RRS (16 U.S.C. 715s), as amended, was enacted in 1935. It 
authorizes payments to be made to offset tax losses to counties in 
which the FWS fee and withdrawn public domain lands are located. The 
original Act provided for 25 percent of the net receipts from revenues 
from the sale or other disposition of products on refuge lands to be 
paid to counties. The Act was amended in 1964 to make it more like the 
PILT program. The new provisions distinguished between acquired lands 
that are purchased by the FWS and lands that are withdrawn from the 
public domain for administration by the FWS. For fee lands, the 
counties received 3/4 of 1 percent of the adjusted value of the land or 
25 percent of the net receipts, whichever was greater, with the value 
of the land to be reappraised every 5 years. They continued to receive 
25 percent of the net receipts collected on the withdrawn public domain 
lands in their county.
    The RRS was amended again in 1978 in order to provide payments that 
better reflected market land values to counties with land administered 
by the FWS within their boundaries. The method used to determine the 
adjusted cost of the land acquired during the depression years of the 
1930's (using agricultural land indices) resulted in continuing low 
land values compared to the land prices that existed in 1978. Also, 
other lands that were purchased during periods of inflated land values 
were found to be overvalued. The Congress decided that the payments did 
not adequately reflect current tax values of the property. It also 
recognized that national wildlife refuges are established first and 
foremost for the protection and enhancement of wildlife and that many 
produce little or no income that could be shared with the local county.
    In the 1978 amendments, Congress chose to distinguish between lands 
acquired in fee and lands withdrawn from the public domain, by 
recognizing that the financial impact on counties tends to be greater 
when lands are directly withdrawn from the tax rolls, rather than when 
the refuge unit is created out of the public domain and has never been 
subject to a property tax. The formula adopted then, and still in 
effect, allows the FWS to pay counties containing lands acquired in fee 
the greater of 75 cents per acre. 3/4 of 1 percent of the fair market 
value of the land, or 25 percent of the net receipts collected from the 
area. If receipts are insufficient to satisfy these payments, 
appropriations are authorized to make up the difference.
    Counties can use funds for any government purpose and pass through 
the funds to lesser units of local government within the county that 
experience a reduction of real property taxes as a result of the 
existence of FWS fee lands within their boundaries. Counties with FWS 
lands that are withdrawn from the public domain continue to receive 25 
percent of the receipts collected from the area and are paid under the 
provisions of the PILT Act.
    Section 2 would amend the funding formula for PILT found in 31 
U.S.C. 6903(c)(2) by replacing the present limitation of ``$135.07 
times the population'' with ``$265.68 times the population'' and 
amending the table at the end of the section to reflect corresponding 
increased or deceased amounts for each population level. The 
Administration appreciates the bill's intent to help compensate those 
counties with high public land acreage and low population. Given the 
complexity of the PILT formula and the intent of the program to 
compensate counties for the inability to collect property taxes on 
Federal lands, we must be careful to ensure that the compensation 
formula compensates counties fairly and does not result in counties 
actually receiving payments that are substantially different than they 
otherwise would receive in order to achieve tax equivalency. 
Accordingly, we need to further examine this issue to determine the 
effect of increasing the population multiplier value over all counties 
collectively. We are also concerned that this proposed change would 
increase overall PILT authorization levels significantly, thereby 
increasing the cost of the bill even further. Again, this counsel is in 
favor of a more systematic evaluation of how to address issues with the 
PILT formula within the current authorization levels.
    We continue to engage in discussions with the National Association 
of Counties concerning issues associated with the allocation formula 
and we believe those issues should be addressed before considering such 
a significant action as converting these payments to permanent 
mandatory payments, or making any changes to the formula. I would like 
to note that many of the same concerns we have previously expressed 
regarding PILT funding hold true for RRS funding as well.
    Although the Administration supports the purpose of S. 511, we must 
oppose it for the same reasons that we opposed a similar bill last year 
in the 107th Congress. We support protections for local governments 
against the loss of property tax revenue when private lands are 
acquired by a Federal agency. However, the Administration is strongly 
opposed to creating a new mandatory spending category to fund the PILT 
program because it would force the Federal government either to raise 
taxes or cut into other programs that are integral to the President's 
budget and important to the American public.

                               CONCLUSION

    The Administration recognizes that PILT and RRS payments are 
important to local governments, sometimes compromising a significant 
portion of their operating budgets. The PILT and RRS monies have been 
used for critical functions such as local search and rescue operations, 
road maintenance, law enforcement, schools, and emergency services. 
These expenditures often support the activities of people from around 
the country who visit or recreate on Federal lands. The Department 
looks forward to continuing to work cooperatively with the communities 
on these important issues.
    Mr. Chairman, this concludes my prepared statement. I would be 
pleased to answer any questions that you or the other members may have.

    Senator Craig. Thank you very much.
    Now let me turn to Mark Rey.
    Mr. Rey. I'll be offering testimony on S. 432 and S. 1582, 
and I'll be very brief and submit the entirety of my testimony 
on these two bills for the record.
    S. 432 requires the Secretaries of Agriculture and the 
Interior to conduct and develop a research program into 
alternative wood preservative treatments for timber produced 
from public lands and lands withdrawn from the public domain 
for the national forest system. The Department has no 
objections to S. 432.
    S. 1582, introduced by Senators Domenici and Bingaman, 
would make modifications to Public Law 106-248, the Valles 
Caldera Preservation Act. The administration has no objection 
to S. 1582, if amended to address concerns regarding the 
Federal Competitive Service, firefighting expenditures, and the 
use of the Permanent Judgment Fund. Our views on each of those 
three matters is included in my statement for the record.
    I'd be happy to respond to any questions that you have.
    Senator Craig. That is amazingly brief.
    [Laughter.]
    Mr. Rey. I've been practicing it.
    Senator Craig. And I was going to say, and coming from you 
that is even more amazing.
    [Laughter.]
    Senator Craig. No.
    Mr. Rey. I've found on this side of the dais, the less I 
say, the less trouble I get in.
    [Laughter.]
    Senator Craig. There does seem to be a corresponding 
relationship.
    Gentlemen, thank you all for your testimony.
    Chris, I see that you drew the short straw again. And I say 
that, because I'm told that the legislative sponsors have a new 
population payment formula table--I think you've addressed that 
some--that they plan to offer as an amendment now to this bill. 
Apparently, the table in the bill that was introduced would 
significantly increase the overall cost of the program. I've 
been told that the new table is more revenue-neutral.
    If my staff provides you with a new table, how long will it 
take you to--you and your staff--to run a program to ensure 
that the new table has some revenue-neutrality to it?
    Mr. Kearney. Senator, in all candor, I don't know precisely 
how long it would take, but I think it is something that we 
would certainly make a priority to do and respond to you just 
as quickly as we can, in ensuring accuracy and completeness.
    Senator Craig. Well, we're all sensitive to PILT, and those 
of us who come from large public-land States certainly agree 
with your testimony that in many instances, in the most rural 
of counties, it's become a substantial portion of their budget. 
And I view it as a responsible participation on the part of our 
government when we do expect services, law enforcement, and a 
variety of other things from the local counties. And yet our 
presence there pays no taxes.
    Would the administration be more comfortable with this 
legislation if we added a no-net-gain-in-Federal-lands 
provision for States that have more than 25 percent of their 
States in Federal land?
    Mr. Kearney. Senator, in all honesty, I don't believe it 
would answer--it wouldn't address our concerns about the bill. 
But I do want to take a moment to make the point that, from the 
administration's perspective, the concerns that underlie that 
question, and some points that Senator Thomas made earlier, 
reflect a concern on the part of members and your constituents 
that we understand and share in many instances. That is that 
impacts on Federal lands and local communities and people who 
come on those lands are the sort of thing that we have--we need 
to look at a number of ways to address that, and not only the 
issues of dollars, but what we do in terms of carefully 
selecting the lands we acquire, the reasons, the mechanisms, 
and all manner of tools that we may have at our disposal to 
address some of those impacts through things such as gateway 
communities, initiatives that we're looking at, and a variety 
of other tools and issues and better cooperation that we, as 
Federal managers, can undertake in our efforts and interactions 
with the counties. So we recognize the concern that's reflected 
there, and we're actively trying to address it, and we agree 
with those concerned.
    Senator Craig. Thank you.
    Mark, if this bill is passed--and I'm speaking of S. 432--
is there some work that you could have the Forest Products 
Laboratory, in Madison, Wisconsin, start to develop a silver 
biocide research program this next year?
    Mr. Rey. Yes. I think with this additional authorization, 
we could look into having the Forest Products Lab develop a 
research--a prospectus for some of the work that the bills 
calls for.
    Senator Craig. Are there any Forest Service research 
programs currently examining other substitutes for the arsenic-
based wood preservatives?
    Mr. Rey. There are. Primarily at the Forest Products Lab in 
Madison. I can provide for the record a synopsis of the ongoing 
research.
    Senator Craig. Okay.
    I know you were involved in the development of the original 
Caldera Trust Preservation Act, and I want to know if the 
administration will support legislation if we make some of the 
technical changes you have called for in this testimony.
    Mr. Rey. Yes. I think, with the changes in the areas I've 
identified, the administration would support the legislation.
    Senator Craig. Well, if you could get us the specific 
language changes and get them to our staff here, that will 
facilitate for the two New Mexican legislators.
    Mr. Rey. We will do that. We will poll our sister agencies. 
Some of the concerns are registered by both the Office of 
Personnel Management and the Department of Justice.
    Senator Craig. Okay.
    Well, gentlemen, thank you. I believe that concludes any 
questions, additional questions I have. So we thank you for 
being here.
    Mr. Kearney. Thank you, Senator.
    Mr. Rey. Thank you.
    Senator Craig. Now I'd ask Dr. Jeffrey Ellis, consultant in 
chemicals and plastics technology, from Plantation, Florida, 
and also Harry Mendoza, commissioner of McKinley County, 
Gallup, New Mexico, to please come forward.
    Dr. Ellis, we're having a discussion as to where 
Plantation, Florida, is.
    Dr. Ellis. It's right near Fort Lauderdale.
    Senator Craig. All right. Thank you very much.
    Well, Dr. Ellis, please proceed with your testimony.

 STATEMENT OF JEFFREY P. ELLIS, Ph.D., CONSULTANT IN CHEMICALS 
            AND PLASTICS TECHNOLOGY, PLANTATION, FL

    Dr. Ellis. Thank you, Mr. Chairman and members of the 
subcommittee, for inviting me to testify today.
    I'm honored to address you on S. 432, Public Lands 
Production Research Act of 2003, a measure that would direct 
the Secretaries of Agriculture and Interior to develop a 
program of research into alternative treatments using silver 
biocides for timber and timber products from public lands.
    For 25 years, I've been an independent laboratory research 
and market research consultant in chemicals and plastics 
technology. I have done work in a number of applications, 
ranging from medical devices and medical packaging to high-
performance plastic composites and, more germane, on biocide 
materials for architectural products.
    In 2000, while doing market research in silver biocides I 
became interested in silver's potential application in a wide 
range of consumer products, including lumber for residential 
and commercial use. As a result, I am currently undertaking a 
research program at Florida International University to 
evaluate silver-based biocides as preservatives for wood.
    The legislation you're considering today is extremely 
timely and offers great promise for both of America's forest 
product and mining industries. It will offer consumers of 
pressure-treated wood safe and environmentally sound products.
    As you're aware, the Environmental Protection Agency has 
reached agreement with manufacturers of wood preservative 
chemicals to phase out chromated copper arsenate as of the end 
of this year. This transition affects all consumer uses, 
including things used by children, especially play structures, 
decks, picnic tables, and other products that are used in 
homes, public parks, and public marinas.
    Beginning January 2004, the EPA will not allow CCA products 
to be sold for residential use, and retailers of preserved wood 
are going to comply with this. Because of increased resistance 
to rot and infestation, preservative-treated wood has been 
widely used for residential applications for many years. CCA 
has been used, in particular, since the 1970's, and has been 
effective and economical. But lately, there's been concerns 
about leaching, in particular of arsenic, into ground and 
water. This technology, thus, is facing today a required 
replacement, and the wood industry faces the challenge of 
finding suitable alternative preservatives.
    Silver offers that potential solution, and silver has many 
unique properties. Most important, it is a natural bacteriocide 
and algaecide and, in some cases, a proven fungicide. Silver 
biocide are also effective in small quantities offered parts 
per million by weight. And despite the relatively high price of 
silver, the overall cost advantages are recognized by 
industrial manufacturers. It's used in steel for architectural 
materials. It's also going to be used, in particular, for 
architectural materials to prevent sick-building syndrome.
    It's also--my own research indicates that, for water 
purification, silver is growing rapidly, and it's also going to 
be increasingly used, if the research proves positive, perhaps 
for needed infrastructure products such as railroad ties and 
utility poles, although those are not currently under the EPA 
ban.
    There is enough silver capacity in the United States to 
meet the needs of the woods preservation. Certainly, the 
American Wood Preservatives Association will be having tests 
that I am going to look into to make sure that the preserved 
wood will not leach and that the wood will have resistance to 
fungi, insects, and other wood-destroying organisms, and that 
the performance in the soil, air, and freshwater marine 
environments will meet the public's needs. This will be a major 
benefit for both the domestic mining and forest-products 
industries should this research program prove successful.
    The United States, of course, has a rich and robust history 
of silver mining, and there could be many benefits to consumers 
and industrial consumers for preserved wood.
    I'd like to thank you for taking the time to listen to me 
today and for inviting me to appear before you to share my 
views on this legislation. I'd be happy to answer any 
questions.
    [The prepared statement of Dr. Ellis follows:]

Prepared Statement of Jeffrey R. Ellis, Ph.D., Consultant in Chemicals 
                and Plastics Technology, Plantation, FL

    Mr. Chairman and members of the Subcommittee: I am honored to have 
been asked to address you today as you consider, S. 432, The Public 
Lands Production Research Act of 2003, a measure which would direct the 
Secretaries of Agriculture and the Interior to develop a program of 
research into alternative treatments, including the use of silver-based 
biocides, for timber and timber products from public lands.
    For the past 25 years, I have been an independent laboratory 
research and market consultant in the areas of chemicals and plastics 
technology. As a scientist, my work has covered a range of industries 
and applications, from medical devices and packaging to high 
performance plastic composites to evaluations of biocide materials in 
tile grouts and dressings.
    In 2000, while doing market research on silver-based biocides, I 
became interested in silver's potential application in a wide-range of 
consumer products, including lumber for residential and commercial use. 
As a result, presently I am undertaking a research program to evaluate 
commercial silver-based biocides for wood products at Florida 
International University (Miami, FL), where I am an adjunct professor 
of chemistry and environmental sciences.
    The legislation you are considering today is exceedingly timely and 
potentially offers great promise to America's forest product and mining 
industries. More importantly, it will offer consumers of pressure 
treated wood products a safe and environmentally sound alternative.
    Last year, the Environmental Protection Agency (EPA), manufacturers 
of treated wood, and manufacturers of wood preservative chemicals, 
negotiated an agreement to phase out the use of chromated copper 
arsenate (CCA)-based wood preservatives in pressure-treated wood by 
December 31, 2003. This transition affects virtually all residential 
uses of wood treated with CCA, including wood used in play structures, 
decks, picnic tables, landscaping timbers, residential fencing, patios 
and walkways/boardwalks.
    Beginning January 1, 2004, the EPA will not allow any CCA products 
in these residential uses. Retailers such as Home Depot and Lowe's have 
announced they would stop selling lumber treated with the CCA-based 
preservative in concert with the EPA announcement.
    Because of its increased resistance to rot and infestation, 
preservative-treated wood has been widely used for many residential 
applications, including decks, outdoor furniture, wood foundations, and 
a host of other purposes. Since the 1970's, CCA, the most commonly used 
preservative, has been effective and economical, but it has generated 
concerns over possible health risks from exposure or leaching.
    That technology is facing required replacement today, and the wood 
industry faces the challenge of finding suitable, safe, alternative 
wood-preserving agents. Silver offers the potential solution. Silver 
has many unique properties. Most important in this case, it is a 
natural bacteriocide and algaecide.
    Silver biocide activity is effective in small quantities, often in 
parts per million by weight, and despite the relatively high price of 
silver compared to other biocides, its efficiency and overall cost 
advantages are increasingly recognized by industrial manufacturers.
    Silver has been a useful biocide since ancient times. Today, silver 
is used in an ever-increaslng number of applications, including water 
purification systems in hospitals, swimming pools, and domestic 
households. For example, silver-based antibacterial toothbrushes, 
hairbrushes and other cosmetic accessories, are being marketed. Socks 
with silver-coated nylon threads that resist bacteria growth are on the 
market as are sandals that in the sole incorporate silver chemicals 
that kill bacteria that cause foot odor. Even steel companies are 
coating their stainless steel products with silver to prevent bacteria 
growth. The metal is then used in kitchen appliances and air 
conditioning equipment.
    Increasingly, we are seeing silver's bactericidal properties being 
employed in amazing new uses. For example, a washing machine that uses 
the antibiotic properties of silver instead of hot water to disinfect 
clothing is on the market. Also, silver antimicrobial compounds have 
been incorporated into the construction of hospitals. The 
antimicrobial-silver coated steels will be used mainly in the hospitals 
air handling ductwork and may be expanded to other applications such as 
stainless steel door hardware, push plates and light switch plates. In 
addition, silver-coated medical catheters can reduce urinary-tract 
infections by as much as 58 percent, according to recent studies. This 
finding is significant, because urinary-tract infections account for 
more than 40 percent of all infections suffered by hospital patients, 
according to the Centers for Disease Control in Atlanta.
    My own research indicates that for water purification, the use of 
silver is expected to rise from 5.3 to 8.1 million troy ounces between 
the years 2000-2006. Use of silver as a biocide in other products, most 
notably, in automotive textiles and skins, roofing tiles, sanitary 
coatings and consumer products such as housewares is expected to 
increase from 0.4 to 2.9 million troy ounces in the same time frame. 
Silver is also a leading candidate for the prevention of ``sick 
building'' syndrome that is generated by toxic molds.
    The use of silver to replace CCA for wood preservation is a major 
new opportunity for this environmentally benign metal. For North 
American markets (55 percent of which are in decks, fences, playground 
structures, and other consumer products), the use of silver for this 
purpose could be as much as 80 million troy ounces. European markets, 
which are likely to replace other environmentally suspect wood 
preservation chemicals such as creosote and pentachlorophenol, could 
add another 50 million troy ounces of silver offtake annually.
    The following chart, taken from World Silver Survey 2003, published 
by the Silver Institute, a Washington, D.C.-based industry association, 
outlines the silver supply and demand figures for 2001 and 2002. As you 
will see, current mine supply is insufficient to meet the many use 
demands for silver, which chiefly are targeted toward jewelry, 
industrial applications and photography. To meet these demands, silver 
is drawn down from above-ground stocks and through recycling. It is 
important to note that 70 percent of silver production comes as a 
byproduct of base metal and gold mining. Notwithstanding, the United 
States silver mining industry is prepared to meet the demands in the 
event silver is approved for use in treating wood.

                     WORLD SILVER SUPPLY AND DEMAND
          [Million ounces--totals may not add due to rounding]
------------------------------------------------------------------------

------------------------------------------------------------------------
Supply                                               2001         2002

Mine Production...............................      589.2        585.9
Net Government Sales..........................       87.2         71.3
Old Silver Scrap..............................      182.7        184.9
Producer Hedging..............................       18.9         ----
Implied Net Disinvestment.....................       ----         20.9
    Total Supply..............................      878.0        863.0
------------------------------------------------------------------------
Demand                                               2001         2002

Fabrication:
  Industrial Applications.....................      338.1        342.4
  Photography.................................      213.9        205.3
  Jewelry & Silverware........................      286.0        259.2
  Coins and Medals............................       30.5         31.3
    Total Fabrication.........................      868.5        838.2
------------------------------------------------------------------------
Net Government Purchases......................       ----         ----
Producer Hedging..............................       ----         24.8
Implied Net Disinvestment.....................        9.5         ----
    Total Demand..............................      878.0        863.0
------------------------------------------------------------------------

    In conclusion, the research contemplated in S. 432, The Public 
Lands Production Research Act of 2003, is urgently needed to assist the 
timber industry in meeting this challenge in a timely fashion. At the 
present, research is needed first to establish that silver will meet 
the performance requirements of the American Wood Preservers 
Association and to acquire the data that will be necessary to register 
the best candidate silver biocides under the Federal Insecticide, 
Fungicide, and Rodenticide Act. This research will include: 1) 
measurements of performance in air, soil and in freshwater and marine 
environments; 2) resistance to fungi, insects, and other wood 
destroying organisms; and 3) leaching and toxicology studies.
    There will be major benefits achieved for both the domestic mining 
and forest products industries should silver based biocide research 
prove successful. The United States enjoys a rich and robust history of 
silver mining. Currently, the United States is the 4th largest silver 
producing country in the world. Silver is relatively abundant in this 
country, and our domestic industry can meet the needs of the wood 
preservation industries. Both consumer and industrial customers 
(manufacturers of needed infrastructure products such as utility poles 
and railroad ties especially) for preserved wood products would benefit 
from the continued availability of needed long-term environmentally 
benign preserved wood.
    Again, I want to thank you, Mr. Chairman, and the entire 
Subcommittee for inviting me to appear before you today to share my 
views on this important legislation.

    Senator Craig. Doctor, thank you very much.
    Before I ask questions of you and your fellow panelists, 
let me turn to Harry Mendoza, commissioner of McKinley County, 
in Gallup, New Mexico.

           STATEMENT OF HARRY MENDOZA, COMMISSIONER, 
                      McKINLEY COUNTY, NM

    Mr. Mendoza. Thank you, Mr. Chairman and distinguished 
members of the subcommittee.
    My name is Harry Mendoza, and I'm a council commissioner in 
McKinley County, New Mexico. I'm here today representing the 
National Association of Counties, the New Mexico Association of 
Counties, and my community in McKinley County. I thank you for 
holding this hearing today.
    And I also wish to thank my Senator, Jeff Bingaman, for 
sponsoring S. 511, the PILT and Refuge Revenue Sharing 
Permanent Funding Act. It is landmark legislation and should be 
enacted without delay.
    Mr. Chairman, I am confident that members of the 
subcommittee are all familiar with PILT. The program was 
conceived in 1976 to offset costs incurred by counties for 
services provided to Federal employees and their families and 
to the users of public lands. These include education, solid-
waste disposal, law enforcement, search and rescue, healthcare, 
environmental compliance, firefighting, and other important 
community services.
    I'm happy to note that seven of you recently joined 50 of 
your Senate colleagues from across the political spectrum and 
across the country in signing a letter to the Interior 
appropriations, which shows your understanding of PILT to 
America's public-land counties. In that letter, you signed for 
moving PILT forward to its fully funding level. As you know, 
NACO actively promoted the effort to secure those signatures 
and will continue to seek enhanced funding in the course of the 
fiscal year 2004 appropriations process. We thank you for your 
strong support.
    However, for the record, we view incremental appropriation 
increases as a short-term stopgap measure. PILT is not just 
another spending program in the Department of the Interior's 
budget. It should not have to compete for funding with 
worthwhile conservation programs administered by the 
Department. The citizens of America's public-land counties 
deserve to see PILT funded at its full authorization, and they 
deserve it on a permanent basis.
    Mr. Chairman, the people of the United States own over 14 
percent of McKinley County. And since the passage of the PILT 
Act in 1976, when the people, by an act of Congress, 
acknowledged their fiscal obligation to the counties that 
contained Federal lands, the payment has been delinquent year 
after year. Since 1995, no Department of the Interior budget 
has ever requested more than half of PILT's authorized amount, 
and no Congress has ever appropriated more than two thirds of 
its authorized amount.
    Mr. Chairman, I used the word ``delinquent'' deliberately. 
Under New Mexico law, the county is responsible for collecting 
property taxes for itself and other taxing agencies within 
McKinley County. It means that if a private-property owner 
fails to pay the taxes due, the county treasurer must try to 
collect it on behalf of the county and other local government 
entities that depend on those revenues. If after 3 years, the 
landowner still fails to pay his delinquent taxes, the State of 
New Mexico takes over and sells it at public auction to settle 
the debt. Why? Because all property owners have to pay their 
fair share to support the basic functions of local government.
    Why should the hardworking people of McKinley County have 
to subsidize public services on Federal lands through higher 
property taxes? It's unconscionable.
    I believe that passage of S. 511 is a simple matter of 
economic justice. It is unjust that a private landowner be 
stripped of his property for failing to contribute to the 
county treasury, when one of the county's richest and more 
powerful landowners does the same with impunity year after 
year. The Federal Government should pay the amount due in full 
every year, with no questions asked.
    Mr. Chairman, though we may differ on specific resource-
management issues, counties do not want to privatize the 
Federal lands. NACO recognizes that our national forests, 
national parks, BLM lands, and national wildlife refuges do, 
indeed, belong to all Americans, and that all Americans have to 
have a stake in their conservation for the generations to come.
    The point is that with rights come responsibilities. We 
believe that fully funding PILT is one such responsibility.
    Thank you. That concludes my testimony.
    Senator Craig. Commissioner, thank you very much.
    I did my father a real disfavor once. I, as a young person, 
helped him get elected county commissioner of Washington 
County, in Idaho, which is about 35 percent federally owned. So 
when I ran for Congress the first time, his first comment or 
instruction to me was, ``Go back there and fully fund PILT. 
Your government is delinquent in its taxes.'' So I have some 
empathy for what you say and the reality of the PILT program 
and our failure over the years to meet its full authorization 
and formula reality.
    I'm also frustrated because I'm one of those who seeks no 
net loss of public lands, when many of those traditional 
resources that were revenue-generating for large public-land 
counties have either been denied or gone away. And many of our 
Federal agencies encourage tourism and recreation today, in 
part, as an alternative. But what they fail to recognize, that 
the obligations of counties as it relates to law enforcement 
and health and all of those other kinds of things for the many 
who may come to visit, the Federal Government doesn't pay for 
it. It's an obligation of the county, county government, and 
county government responsibilities. So sometimes the burden is 
even shifted more greatly to the county for its funding 
purposes.
    I understand that small and rural counties and the large 
highly populated counties have agreed to support a new 
population payment formula provided PILT is fully funded. If we 
do not include the new formula in the final bill, will NACO and 
others in the counties still be supportive of the legislation?
    Mr. Mendoza. Yes, sir, I think they will.
    Senator Craig. The studies I've seen strongly suggest local 
taxes would provide sufficiently more money to counties if 
these Federal lands were owned by private landowners. While I 
hold no illusion that the Federal lands will be turned over to 
the private landowners, did your organization or would your 
organization consider a PILT compensation plan based on tax 
equivalent rather than the current formula?
    Mr. Mendoza. I can't answer that question.
    Senator Craig. That's something we have always looked at as 
a possible consideration. Would NACO support a no-net-gain-in-
Federal-lands provision to this bill or in the form if a 
freestanding legislation if it were offered?
    Mr. Mendoza. I think that they would, yes, sir.
    Senator Craig. Finally, could you give me your best 
estimate on the number of counties that receive PILT payments 
that do not belong to NACO?
    Mr. Mendoza. In McKinley County, 100 percent of the 
counties belong to NACO.
    Senator Craig. In New Mexico.
    Mr. Mendoza. In New Mexico.
    Senator Craig. You don't have that figure----
    Mr. Mendoza. And they all receive PILT.
    Senator Craig. You don't have that figure nationwide?
    Mr. Mendoza. I have it. It's in part of the testimony. I 
think you have it there.
    Senator Craig. Al right. We'll leave it at that and search 
it out. Thank you very much.
    Dr. Ellis, are there other biocides that can substitute for 
arsenic-based wood preservatives?
    Dr. Ellis. Yes, there are, sir. Those would be currently 
based largely on copper complex with ammonia or ammonia 
derivatives.
    Senator Craig. How effective are they as it relates to the 
potential of silver?
    Dr. Ellis. Right now, I don't have enough information to 
answer that question. All I can tell you is that I have read, 
and, through telephone research, I have learned that they have 
to put quite a bit of copper and ammonia into the wood. It's 
certainly much more expensive than the old CCA. I don't have 
enough data on the use of silver at this time to find out if it 
is effective.
    Senator Craig. Is two years really a sufficient amount of 
time to prove silver biocides can perform as a wood 
preservative?
    Dr. Ellis. Like everything else, sir, it depends on how 
adequately the research program is funded. I am hoping, as I 
speak, that the silver industry will give me some more money to 
get the basic initial data done, especially looking at the big 
unknown, which is the effectiveness of silver against insects.
    Senator Craig. Your preliminary research indicates that 
silver has substantial potential?
    Dr. Ellis. Yes, it does, sir. It's being used in a number 
of consumer and industrial products as a biocide. It's 
effective in small enough amounts such that the cost of silver 
is amortized by that factor. There is ample precedent of 
silver's use against bacteria, against algae, and against 
fungi. We still have to prove, of course, that the silver 
chemicals would be effective against wood-destroying organisms 
of those types; in addition, of course, to the insects.
    Senator Craig. Well, Doctor, thank you very much.
    Commissioner Mendoza, thank you for your traveling here and 
your time, both of you.
    Thank you.
    The committee record will stay open for ten days for the 
purpose of any additional information that may need to be 
attached.
    With that, the subcommittee will stand adjourned.
    [Whereupon, at 3:40 p.m., the hearing was adjourned.]


                                APPENDIX

              Additional Material Submitted for the Record

                              ----------                              

                                          City of Prescott,
                                   Prescott, AZ, September 4, 2003.
Hon. Jon Kyl,
2200 E. Camelback Rd., Suite 120, Phoenix, AZ.
    Dear Senator Kyl: I am writing to support you and Congressman 
Renzi's efforts to complete the Forest Service land trade. This trade 
will help protect Prescott's water resources and will help the church 
and private camps around our city.
    I understand that the components of Congressman Renzi's legislation 
have some updated and favorable changes to Clarkdale and in the spirit 
of our support for their needs, I would request that if possible you 
use the wording of Renzi's legislature at your committee hearing on 
September 11.
    As always, thanks for all your help and we are looking forward to 
seeing you in Prescott soon.
            Sincerely,
                                          Rowle P. Simmons,
                                                             Mayor.
                                 ______
                                 
                                        Town of Camp Verde,
                                 Camp Verde, AZ, September 5, 2003.
Hon. John McCain,
Russell Senate Office Building, Washington, DC.
    Dear Senator McCain: You have a decision coming up on the Yavapai 
Ranch Exchange in Arizona (Senate Bill 849.) You will be receiving many 
letters of opposition to the Verde Valley portions of this trade. You 
will be led to believe that the common public is virtually unaware of 
this exchange and that there has not been local public input and review 
of this trade. You will be told that the issue of water use has not 
been adequately addressed.
    I write you today, to humbly disagree and to say this is simply not 
correct. I am the mayor of Camp Verde and have been on town council for 
4\1/2\ years. In my tenure there has been numerous meetings both 
publicly and privately with Mr. Ruskin, the Forest Service, elected 
officials, Salt River Project and the public concerning this exchange. 
Input has been given and received concerning all the issues. The trade 
boundaries, the water restrictions and the desires of the community 
have been properly addressed mutually between the parties.
    This item was a main topic of our recent council elections. The 
candidate's positions on this issue were clearly defined. The voters 
elected three council members and myself as mayor by approximately a 
70% to 30% margin. We now have both a council and a citizenry that 
supports this exchange.
    Please understand that we, the residents of Camp Verde, many of us 
who go 3, 4, and 5 generations in the Verde Valley, love this valley 
and have great appreciation for our home lands. We have not supported 
this exchange without studied review and much thought given.
    We need this exchange to go through to help us develop a sales tax 
base along Interstate I-17 and Highway 260 to sufficiently meet the 
need for services to our people. These lands will be traded someday to 
someone as they are within our town boundaries and the Forest Service 
has clearly stated that they do not have the federal budget backing 
them to maintain lands within incorporated boundaries.
    Mr. Ruskin comes from a long-time ranching family and he carries 
the straight forward honesty and integrity that one can deeply 
appreciate, especially when dealing with such an important issue.
    Senators Kyl and McCain have studied this exchange, and recognize 
that the greater good of this issue benefits the majority of people.
    I urge you to support the Yavapai Land Exchange, and log this 
letter and have it included in the record. Thank you for your 
consideration of this matter and for the service you do for our 
country.
            Sincerely,
                                           Mitch Dickinson,
                                                             Mayor.
                                 ______
                                 
                                        City of Cottonwood,
                                 Cottonwood, AZ, September 5, 2003.
Hon. Jon Kyl,
U.S. Senate, Washington, DC.
    Dear Senator Kyl: As Mayor of Cottonwood, I am writing to confirm 
my commitment to the land exchange between the Forest Service and 
Yavapai Ranch. Cottonwood has been working in support of this exchange 
for a number of years, and although there has been some opposition, as 
Mayor of Cottonwood, I stand firmly in favor of the concept.
    Cottonwood stands to benefit a great deal from this exchange. The 
economic development and tax revenue benefits of housing 
diversification and business expansion will contribute to the overall 
vibrancy of the Verde Valley. The newly privatized land will be subject 
to the water conservation measures and use restrictions of the 
Cottonwood Water Declaration, and will set a new standard for future 
development in our area. Given the current drought in Arizona and the 
concern for future water use, I believe this will have a significant 
impact on saving water resources in the Verde Valley. This exchange 
also represents a significant reduction in the number of homes that 
could potentially be built if the Yavapai Ranch lands were developed.
    In reviewing your legislation and the Renzi/Hayworth bill, I 
believe that the modifications contained in Congressmen Renzi's and 
Hayworth's legislation better serve our community needs. For that 
reason, I am asking that you amend your legislation to include the 
additional language of the House bill.
    Please know that the vast majority of out citizens support your 
efforts and authorization of this exchange. We in Cottonwood are 
working for a strong community that will allow for our youth to stay in 
our area after they finish school; for too many years they have had to 
move away to find work. This legislation will give us another tool to 
help them live and work in our community.
    Thank you again for your efforts on our behalf.
            Sincerely,
                                            Ruben Jauregui,
                                                             Mayor.
                                 ______
                                 
                                          City of Williams,
                                   Williams, AZ, September 5, 2003.
Hon. Senators John McCain and Jon Kyl,
U.S. Senate, Washington, DC.
    Dear Senators McCain and Kyl: As Mayor of the City of Williams, I 
am writing to request the quick enactment of the Northern Arizona 
National Forest Land Exchange Act of 2003. This exchange will help us 
fulfill our municipal water program and provides significant economic 
development opportunities for our community.
    The Yavapai Ranch Land Exchange offers a key component currently 
missing from the water equation in the Williams area. The exchange will 
privatize land for key drilling sites; drilling on public land for 
municipal use is very complicated and difficult due to many factors. It 
is critical to the future of Williams and surrounding environs that 
additional deep wells be drilled on what is now public land. Our 
surface water reservoirs are currently at a minimal 8% of capacity and 
were as low as 4% as recently as the summer of 2002. Williams began a 
deep water well drilling program 4 years ago; to date we have drilled 
five water wells of which only two are producing.
    It is important to note the Yavapai Ranch Land Exchange benefits 
the Williams area in more ways than one, as it does all of the 
communities with land involved in the trade. The Exchange will free up 
land for expansion of the Williams water filtration plant, a needed 
waste water plant expansion planned for 2005-06, airport improvements, 
city parks, a cemetery expansion and ownership of the original nine 
holes of the city golf course. This exchange will also facilitate the 
future operation of the Younglife Youth Camp, a new and important asset 
to northern Arizona.
    Your efforts on behalf of S. 849 will provide important quality of 
life, economic and conservation benefits for all of Northern Arizona. 
The exchange will protect rare natural resources and keep intact what 
makes Arizona such a special place. Please accept the gratitude of our 
city for your efforts to authorize this exchange.
            Sincerely,
                                                  Ken Edes,
                                                             Mayor.
                                 ______
                                 
                                        Town of Camp Verde,
                                 Camp Verde, AZ, September 8, 2003.
Hon. Senators John McCain and Jon Kyl,
U.S. Senate, Washington, DC.
    Dear Senators McCain and Kyl: On behalf of the Town of Camp Verde, 
I am writing to thank you for your efforts on behalf of S. 849 and the 
September 11 hearing before the Senate Subcommittee on Public Lands and 
Forests.
    Representatives of Camp Verde have been working with the Forest 
Service and Mr. Ruskin for five years in support of this trade. We are 
hopeful for, and in need of a positive outcome. We have had numerous 
public meetings and hearings to discuss this exchange and its benefits 
to Camp Verde. Our recent city election confirmed the broad-based 
support of our citizens for this exchange with pro-trade candidates 
receiving nearly 70% of the vote.
    As you are aware, Camp Verde is a bedroom community spread over 46 
square miles. We have embraced growth throughout our history, but much 
of our development has been low-density residential which does not 
afford us the tax base to provide the necessary infrastructure and 
services that our citizens require. In addition, our proximity to 
Interstate 17 and Highway 260 require us to provide emergency response 
services along these corridors. We desperately need the tax revenue 
from commercial development along Interstate 17 and Highway 260. This 
exchange will allow privatization of already impacted Forest Service 
lands for commercial development as well as emergency services 
including fire, hazmat and emergency medical. Camp Verde's economy 
depends on the trade--commercial development along Interstate 17 is the 
key to our future.
    After review of both S. 849 and H.R. 2709, I am writing to request 
that you incorporate the additions from the House version to your 
legislation. In doing so, the issues that Camp Verde has with S. 849 
will be resolved.
    On another note, I would like to thank you, Senator McCain, for 
your comments at the recent League of Cities and Towns conference. You 
were right on target with your remarks on forest health and I 
especially appreciated your answer to my question about this land 
exchange.
    Thank you again for your efforts on behalf of this legislation. I 
look forward to having each of you visit Camp Verde in the near future.
            Sincerely,
                                           Mitch Dickinson,
                                                             Mayor.
                                 ______
                                 
                                    League of Women Voters,
                                     Sedona, AZ, September 8, 2003.

    Members, Senate Public Lands and Forests Subcommittee: The League 
of Women Voters has been following the Yavapai Ranch issue closely for 
several years. Water concerns in the Verde Valley have been our primary 
focus since 1999. Along with many other local voices, we have pressed 
for an administrative review of this land exchange. As the largest 
exchange in Arizona history, it is even more important that we examine 
the potential impacts of this decision before the decision is reached, 
including an environmental analysis under NEPA.
    Because the administrative process has not occurred thus far, we 
have observed the following frustrations mounting in the Verde Valley: 
communities are bitterly divided within and between themselves; 
hydrologists disagree on the potential impact on groundwater in the 
Verde Valley; citizen groups organized around water issues cannot 
arrive at a consensus, and lastly, rumors and misinformation abound in 
the absence of a formal hearing process.
    Further, there has been no resolution of contradictory issues, no 
opportunity for hearing public concerns, and no opportunity for 
addressing public concerns. As a region, we have been trying to deal 
collaboratively with regional issues such as transportation, land use, 
and water for 4 or 5 years. The region is being torn apart over this 
exchange, setting us back in our regional efforts.
    If not this time, please do not make us go through this unnecessary 
anguish the next time a land exchange is proposed. The price is too 
high. At the very least, the administrative process could alleviate 
much of the frustration, and at best it could improve the conditions of 
the exchange for the public good.
    Please log this letter and include it in the record.
            Yours truly,
                                             Dorothy Hores,
                                                 LWV Program Chair.
                                 ______
                                 
                    Responsible Residents of the Red Rocks,
                                     Sedona, AZ, September 8, 2003.

    Members, Senate Public Lands and Forests Subcommittee: Our 
organization has become very concerned as we have followed the issues 
surrounding the land trade between the USFS and Yavapai Ranch, and in 
particular S. 849. We have three major concerns with the bill as 
written, two are substantive and one is procedural:
    1. Delete the 2,200 acre Camp Verde and the 800 acre Clarkdale USFS 
land from the proposed exchange. These 2 parcels are located in a part 
of the Verde Valley already suffering from groundwater overdraft. 
Groundwater is our sole source of water in the Verde Valley . 
Hydrologists have estimated that Camp Verde, Cottonwood, Verde Villages 
and Clarkdale are withdrawing water faster then the annual natural 
recharge rate, even in normal years of rain fall.
    2. Eliminate the 40 acre islands of land with water wells in the 
Big Chino area proposed to be retained as private land in the block to 
be traded to the USFS. If the USFS needs the private land to 
consolidate the checkerboard ownership adjacent to Juniper Mesa, the 
USFS should also get the water rights for that land.
    3. Abandon the legislative process for the land exchange in favor 
of the administrative process which utilizes public input and the NEPA 
process with environmental impact analysis. The 1988 Amendment to the 
Federal Land Exchange Act addresses standards for appraisals and the 
public interest. Specifically, the Amendment requires consideration of 
the needs of the state and local people, and an environmental analysis 
under NEPA.
    We are passionate about water resource management to stem the over-
commitment of our water resources and to ensure long-term 
sustainability. We urge you to act on these recommendations and we look 
forward to your response.
            Sincerely,
                                         Doris Baumgartner,
                   Chair of Responsible Residents of the Red Rocks.
                                 ______
                                 
                                     Sedona, AZ, September 8, 2003.

    To all Members, Senate Public Lands and Forest Subcommittee: I am 
an architect living and working in the Verde Valley, one of the areas 
affected by the Northern Arizona (Yavapai Ranch) Land Exchange as 
proposed in S. 849. I am opposed to this trade for a number of reasons, 
and feel strongly that at a bare minimum, the Verde Valley parcels 
should be removed from the exchange. Contrary to much of the lobbying 
propaganda paid for by the proponent of this trade, there is not local, 
consensus that this is a good thing for the region. In reality, it will 
probably have detrimental effects for the area in the long run.
    We live in an area experiencing growth pressure on many of our 
resources, the most significant of which is water. This trade will 
increase water use in the area, despite the so-called water 
restrictions or covenants attached to the trade. We are already mining 
water in the region, and are several years away from definitive studies 
that will truly show what sustainable water usage can be for our area. 
Existing private land in the Verde Valley can allow our population to 
triple, and there is no guarantee that there will be enough water for 
those who already own property. It is not fair to existing property 
owners to add 3,000 additional acres of developable land to the pool 
until we know that we can handle the needs of those already here.
    There are many other complex planning issues tied to a trade of 
this magnitude, and these need to be analyzed thoroughly as would 
happen in a NEPA process if this trade were going through 
administrative channels rather than the legislative one you have in 
front of you. There have been no public hearings on this trade in the 
area, and any at this point after the legislation has been introduced 
would be far too late and almost meaningless. There are no provisions 
for any meaningful public review of and input on the yet to be 
appraised values for this trade, to insure that the U.S. public would 
be getting a good deal if the trade were to go through. At this point, 
it appears that the whole package will be a real ``sweetheart'' deal 
for Mr. Ruskin, the proponent of the trade; he has been willing to 
spend hundreds of thousands of his own dollars lobbying to make this 
happen. He has hired a former Yavapai County supervisor as his 
lobbyist. This lobbyist also happens to be friends with some of the 
local elected officials who have become supportive of the trade, and 
who have wrongly been saying that their constituents are in agreement. 
There has been no public forum in which to even discuss the issue 
specifically.
    I believe that this trade would not have a prayer of happening if 
it were objectively analyzed in a conscientious administrative process, 
and that is why the proponents have taken it out of the area to you for 
a ``more efficient'' passage. They have claimed that trades this large 
``need'' to be legislated because of the complexity. However, that is 
exactly why they need a longer process and more scrutiny, to insure 
that they are the best deal for the American taxpayer, and do not have 
unintended negative planning effects for the regions in which they are 
consummated.
    Please reject this legislation; it smacks of special interests and 
a whitewash of propaganda claiming a broad consensus that doesn't 
really exist. My livelihood depends on sensible, well-planned growth. 
This trade will actually hurt the regions ability to plan for and guide 
growth in a good way. Send it back to us at the local level for a true 
assessment of its merits.
            Sincerely,
                                                        Max Licher.
                                 ______
                                 
                             Sedona, AZ, September 8, 2003.

    Dear Senator: I am sending this short letter to you and those on 
your Senate Public Lands and Forest Committee to help sited some light 
on a very misguided and locally detrimental issue that is about to come 
before you in hearing.
    I am very opposed to the Senate Bill 849, the Yavapai Ranch Land 
Exchange, which will definitely have major adverse impacts on our 
immediate neighborhood, the Verde Valley. As an architect and a 
professional in the fields of urban design and regional planning, I 
would hope you can understand the importance and the hard reality of 
the following issues. The two most important issues are Land and Water.
    Land: We have more undeveloped private land in both Camp Verde and 
Clarkdale than we could build out in the next 50+ years. What is our 
limiting build-out factor?
    Water: We don't have plenty of that. Clarkdale is currently at only 
20% of it's potential build-out and this past summer experienced water 
rationing of 50%. There are no other sources of water; our aquifer is 
the only one there is, and as many others will tell you in their 
letters, the wells are running dry, falling more than 200 feet in the 
last 20 years. Camp Verde has 46 square miles of land in it's coffers 
with 40% of that already in federal holdings, with less than 25% built 
out. There is no need for more federal lands being turned into private 
property than that already within city limits, already earmarked for 
development. Neither Camp Verde nor Clarkdale need more land no matter 
how convincing the rhetoric from uneducated town council members who 
believe all growth is good growth. Nothing could be further from the 
truth.
    As a Professional in the field of architecture I am not anti-
growth, I am involved with it every day, it is my livelihood. 
Coordinated regional planning in the Verde Valley is just beginning 
with controlled and planned growth being understood by all local 
planners as the key to continued economic growth and improved quality 
of life. I will not have this livelihood, and in fact will experience 
decreasing property values when there is no water to fill our drinking 
glasses. Water studies by the USGS, local Haskell springs Watershed 
Assoc., and the Verde River Water Users Assoc. are in progress but will 
not be concluded for several more years and we need to wait for those 
results before we add any more land to our developable land base.0
    I ask that the Verde Valley parcels (Camp Verde and Clarkdale) be 
removed from this proposed trade agreement between we the citizens of 
Arizona and Mr. Ruskin. They are not necessary for the ``success'' of 
this trade and in fact should be set aside as protected watershed 
preservation resources. If it is not possible to remove these parcels, 
then the entire trade should be placed into an Administrative process 
(with public comment) and removed from any Legislation. This would only 
be fair and democratic to the tens of thousands of residents that are 
affected by this legislation, 90% of whom have never heard of the 
proposed land trade. The process of land trading is not beneficial to 
the general public or to federally protected lands, and is certainly 
not going to be beneficial to the residents of the Verde Valley who 
have not been involved in this process at all, had no public comment.
    This is not the democratic process and the democratic process seems 
to be rapidly eroding in our country as of late. Your help in restoring 
our faith in such is requested. Thank you for your time.
            Sincerely,
                                                Daniel Paduchowski.
                                 ______
                                 
                                  Fain Land and Cattle Co.,
                            Prescott Valley, AZ, September 9, 2003.
Hon. Jon Kyl,
U.S. Senate, Hart Building, Washington, DC.

Re: Northern Arizona National Forest Land Exchange Act of 2003 (Bill S. 
849), also known as the Yavapai Ranch-Ruskin Land Exchange

    Dear Senator Kyl: I am the owner of 300 acres of land that will be 
impacted by this exchange. The purpose of this correspondence is to 
express our concern about S. 849, Northern Arizona National Forest Land 
Exchange Act of 2003, as currently proposed. The addition of more than 
3,000 acres of public lands to the existing deeded land base in the 
Verde Valley may result in significantly lower property values for 
deeded land.
    Further, it is my understanding that ``conservation easements'' on 
both parcels proposed to be deeded will reduce their appraised values. 
Also, lack of legal access to one of the parcels, will adversely impact 
the appraised value of that parcel. This in turn could have a negative 
influence on the value of other privately-owned properties in the Verde 
Valley. Therefore, due to the sheer size of the proposed exchange and 
its potential adverse impact on the local economy, I request that both 
of these parcels be deleted from the proposed land exchange. Nearby 
property owners already have more land available for development to 
meet the growth demographic of the Verde Valley for decades to come and 
have been paying property taxes for the privilege of that ownership. 
Please include this letter in the official record of the Senate hearing 
on this bill, which is scheduled to be held on September 11, 2003 
before the Senate Energy and Natural Resources Committee.
    Your support of this matter will be greatly appreciated.
            Yours very truly,
                          Norman W. Fain, II ``Bill Fain'',
                                                         President.
                                 ______
                                 
                                   Prescott, AZ, September 9, 2003.
Senator Larry Craig,
Chair, Senate Public Lands & Forests Subcommittee, Dirksen Senate 
        Office Building, Washington, DC.

Re: S. 849

    First, we apologize for the lateness of this appeal. But 
notification of this impending hearing arrived late, so time to respond 
is limited (which may have been the plan all along).
    Nevertheless, on September 11 the subcommittee will hear only five 
minutes (bet Mr. Ruskin had more time than that to state his case) of 
testimony from citizens of Verde Valley's River watershed where you are 
about to legislate Arizona's largest land trade ever--the Ruskin Land 
Trade, where Fred Ruskin, owner of Yavapai Ranch, intends to create a 
community of 15,000 new households. In other words, a new city which 
will draw from the already depleted Verde Valley headwaters. This new 
city will also be guaranteed annual water usage beyond the current 
output of designated wells which are not even on Mr. Ruskin's property.
    Beside the fact Mr. Ruskin has avoided federally required hearings 
and worked privately with Senators McCain, Renzi and Kyl to draft a 
special law, please consider the following: Arizona's water resources 
are limited even without the present 7 to 8 years of drought we are in. 
Thousands of Arizona residents' water is supplied by wells, and in 
recent years many of those wells have had to be drilled to even deeper 
depths because of a drop in the underground reservoir.
    Senator Craig, you, representing Idaho, should be more aware than 
many of the serious water problems in the west.
    Another point: Public input and thorough hearings were promised, 
yet this land trade smacks of a back-room good of boy land swap that 
throws public property, as well as the rights of Arizona citizens, 
away. Only to favor one individual, not the majority of the voters.
    NEPA was established to ensure due process, not to be ignored 
because it takes too much time to find the truth of the matter.
    We wish this letter to be logged and included in the record.
    Hoping you will seriously ponder these issues,

                                          Marvin and Geri E. Davis.
                                 ______
                                 
                                     Sedona, AZ, September 9, 2003.

Subcommittee on Public Lands and Forests

    Dear Senators: I oppose S. 849, the Yavapai Ranch Land Trade, soon 
to be decided upon. The plan ignores the people of the Verde Valley and 
other areas of Central Arizona, while meeting the needs and 
requirements of certain special interest groups.
    Where is the water coming from for all of this? Please research the 
official predictions concerning the ongoing drought and its imminent 
impact on us and the Glen Canyon Dam.
    I can't vote for anyone who would back S. 849. It's not in our best 
interests.
            Sincerely,
                                                  Robert Schmierer.
                                 ______
                                 
                                       Groseta Ranches LLC,
                                Cottonwood, AZ, September 10, 2003.

Senator Jon Kyl,
U.S. Senate, Hart Building, Washington, DC.

Re: Northern Arizona National Forest Land Exchange Act of 2003 (S. 
849), also known as the Yavapai Ranch-Ruskin Land Exchange

    Dear Senator Kyl: I am writing this letter regarding S. 849 on 
behalf of my family who are fourth generation Arizona ranchers in the 
Camp Verde and Cottonwood areas.
    As you are aware, almost the entire Camp Verde parcel (2,200 acres) 
is on a part of our Verde Grazing Allotment. The 820-acre parcel 
(Cottonwood/Clarkdale) adjoins our ranch in the Cottonwood area.
    In a detailed memorandum we sent to your office in early July 
outlining the nature and extent of our loss based on the current 
proposal, we indicated the USFS calculated we will lose 47 Animal Units 
of carrying capacity on our ranch. This constitutes an irreplaceable 
loss of production capacity. The memorandum also indicates we will lose 
valuable water rights, grazing rights and improvements. Moreover, the 
value of my family's fee base property will be significantly devalued. 
The IRS will include the value of these items in calculating taxable 
gain for income tax purposes and in the gross estate for estate tax 
purposes. For the federal government to now take the opposite position 
and ignore the loss of this value by failing to compensate my family 
for this ``taking'' would be grossly unfair.
    In addition, please consider that the conversion of an additional 
3,020 acres (2,200 + 820 = 3,020) of public lands into private lands 
into the existing deeded land base in the Camp Verde and Cottonwood 
areas will result in significant lower property values to existing 
landowners who have owned their land for many years.
    Also, after doing some extensive research, it is quite apparent 
that the U.S. taxpayer will be ``fleeced'' if this bill is passed in 
its present form. Having ``conservation easements'' in place (either 
before or immediately after conveyance of title) on both parcels will 
significantly reduce their appraised values. Having no legal access to 
the Cottonwood/Clarkdale parcel, also will adversely impact the 
appraised value of that parcel. With both parcels having significant 
encumbrances adversely affecting their values. It will definitely 
reduce the value of lands owned by the American people which is taken 
into account in the exchange process.
    Therefore, we respectfully request you include a provision for just 
compensation to my family and look carefully at the valuation issues 
that will work against the American people in this land exchange.
    In closing, I request that this letter be included in the official 
record of the Senate hearing on this bill, which is scheduled to be 
held on September 11, 2003 before the Senate Energy and Natural 
Resources Committee.
    Your support of this matter will be greatly appreciated.
            Sincerely,
                                                      Andy Groseta.
                                 ______
                                 
      Statement of Fred Ruskin, Yavapai Ranch Limited Partnership

    Chairman Craig and Members of the Subcommittee: My name is Fred 
Ruskin and my family owns the Yavapai Ranch in Yavapai County, Arizona. 
Ours is a family owned business, which I have personally run since my 
dad died in 1981. We don't own other investments, other businesses, a 
Keogh plan, lots of stocks--just this ranch.
    As you can see from the map attached to this statement, the Yavapai 
Ranch contains approximately 55,000 acres of our private land, 
intermingled with 55,000 acres of the Prescott National Forest in a 
``checkerboard'' ownership pattern. All the white land inside the heavy 
black line on the map is our land, whereas the green land (or grey if 
you are looking at a photocopy of the map) belongs to the Forest 
Service. Only the 6 sections you see in yellow are owned by outside 
interests. Other than these, after the exchange is completed, the 
Forest Service will own the land south and west of the orange line 
shown on the map, except for the 3 already developed parcels outlined 
in red, which we will keep, and one of which I live on.
    As I said, the Yavapai Ranch lands represent my family's only 
financial asset. It has been obvious for some time that it was not 
feasible to tie up this increasingly valuable piece of land just to run 
cattle on it. The recent severe drought in Arizona has made the cattle 
business even less attractive, while the growth of the surrounding area 
has made the ranch even more desirable for development. We now have 
land on two sides of the ranch being subdivided, and what will be the 
largest development in Northern Arizona is being discussed on the third 
side.
    We have been discussing an exchange with the Forest Service for a 
long time. I have been working on this exchange for seven years, and 
working virtually full time on it for the last four years.
    We are seeking Congress' assistance in expediting this land 
exchange because the Forest Service has indicated that it will take a 
minimum of 4 years, and perhaps as much as 7-8 years, to finish an 
exchange by administrative means. That is extremely optimistic; it has 
been taking the Forest Service that long to do a fifty-acre exchange in 
Arizona--this is a fifty-five thousand acre exchange. My family simply 
cannot continue to commit time and resources to a process that might 
not ever happen. Virtually all of the large checkerboard or 
intermingled land exchanges that have been done by the Forest Service 
in the past have been legislated by Congress . . . even for such large 
landowners as Plum Creek Timber, Burlington Northern, Big Sky Lumber, 
Weyerhaeuser, and Potlach. So for these reasons we need your help.
    Mr. Chairman, in the exchange that is before you today in S. 849, 
we will trade 35,000 acres, or almost 70% of the land we own, to the 
Forest Service. From an ecological and recreational standpoint, that 
35,000 acres is the most desirable part of the ranch because:

   It contains all the ponderosa pine forest on the ranch . . . 
        which is the largest ponderosa pine forest still remaining in 
        private ownership in Arizona;
   It has one of the last untouched valleys in our area 
        providing quality antelope range, which the Arizona Department 
        of Game and Fish strongly advocates for public ownership. This 
        pristine antelope range is becoming more significant all the 
        time given the very rapid development that is pushing antelope 
        out of the Prescott area further to the south;
   It is located immediately adjacent to the existing Juniper 
        Mesa Wilderness Area, which was established by Congress in 
        1984;
   It lies at higher elevation, and therefore provides better 
        opportunities for public recreation in the hot summer months; 
        and
   It will reduce the developable land base in the upper Verde 
        River watershed (also known as the ``Big Chino'') by roughly 
        25,000 acres, which would be a major protection of the 
        watershed for this most important, free flowing river.

    In return for the 35,000 acres we will convey to the Forest 
Service, we will receive 15,300 acres of lower elevation lands near our 
ranch headquarters and outlying buildings, plus approximately 5,900 
acres in or near the communities of Williams, Flagstaff, Cottonwood, 
Clarkdale, Camp Verde and Prescott.
    More than half of the acreage we receive in those communities will 
not be retained by us. Rather, it will be re-conveyed, either to 
municipal governments for airport, water, and sewer facilities, 
recreation, park, open space or other public uses, or to the children's 
summer camps that currently use these areas. All of these communities 
and summer camps have repeatedly stated their need for the exchange to 
be completed in the very near future . . . not in 7-8 years.
    Both we and the Forest Service concur that the reconveyances to 
municipal governments and camps are an excellent way for the Forest 
Service to acquire as much of our family's land as possible in trade 
for Forest Service land that is of lesser value to the general public 
because it is already occupied by airports, water treatment plants, 
summer camps and the like. All National Forest land has value to the 
public, but it does not all have equal value. This is for the public 
the most obviously beneficial trade imaginable. The Forest is acquiring 
pristine forest and meadows in exchange for land around cities and 
camps that is already heavily impacted by use and/or location.
    This exchange has been, and will continue to be, a cooperative 
venture with the Forest Service. Before this exchange is completed, we 
will perform: (1) formal appraisals in full compliance with the U.S. 
Department of Justice standards that were revised in 2000; (2) all 
required threatened and endangered species, cultural and historic 
resource, hazardous materials, and wetlands and floodplains analyses; 
and (3) traditional title reviews and analyses, which must be approved 
by the Forest Service. In addition, if the Forest Service determines 
that it cannot exchange to us a tract of federal land because it 
includes habitat for an endangered species, archeological sites or 
another resource protected by Federal law which cannot be mitigated, 
the lands in question will be dropped from the exchange. So, there is 
no danger that the United States will lose lands with unique resources. 
And, as I have already mentioned, we, the Forest Service, and the 
Arizona Department of Fish and Game believe that the lands the Forest 
Service will acquire have much better environmental and recreational 
values than the lands the Forest Service will give up. Finally, as 
requested by several conservation organizations, the bill contains 
language in Section 7 to insure that the land acquired by the Forest 
Service will be permanently managed to maintain its existing natural 
character and values.
    Mr. Chairman, while the Yavapai Ranch partnership supports the 
overall land exchange set forth in S. 849, we need to make it clear 
that we cannot and do not support the open-ended cost sharing formula 
set forth in subsection 6(d) of S. 849. There are two problems with 
this open-ended cost-sharing provision:

   First, the provisions would require our small, family-owned 
        business to match costs expended by the federal government; and
   Second, most of the required expenses will be incurred by 
        the Forest Service as it brings its land, not ours, to a 
        ``marketable title'' condition.

    We simply do not have the financial ability to agree to a cost 
sharing mechanism that would expose us to unknown and unquantified 
costs.
    We note that the language of H.R. 2907 which was recently 
introduced into the U.S. House includes a provision that simply 
incorporates into it the current Forest Service regulations (36 CFR 
254.7), which require each party to ``bear their own costs of the 
exchange''. These Forest Service regulations state: ``Those processes 
and their costs which are the responsibility of the United States will 
be borne by the Forest Service . . .''
    In closing, Mr. Chairman, a very broad coalition supports this 
trade. We now have the strong support of every city that is a part of 
the trade, all of the local chambers of commerce, the Arizona 
Department of Game and Fish, many hunter and sportsmen groups, and many 
influential environmental leaders in Northern Arizona.
    Mr. Chairman, thank you for scheduling this hearing on a matter 
that is of utmost importance to my family, and to the people and 
communities of Arizona. I wish that the economics of ranching were 
better than they are, that Arizona had not grown as it has, and that we 
could have afforded to maintain the status quo . . . but that is not 
the reality of the situation today. So, I believe this exchange is in 
the best interest not only of my family but also of the land and people 
of Arizona.
    More than twenty-five years ago, my father promised the Forest 
Service that he would give them an opportunity to do a land exchange 
before he developed the land on our ranch.
    This is that opportunity.
                                 ______
                                 
     Statement of Joseph C. Donaldson, Mayor, City of Flagstaff, AZ

    Chairman Craig, Ranking Member Wyden, members of the Subcommittee, 
I am honored to testify in support of S. 849, the Northern Arizona 
National Forest Land Exchange Act of 2003. I am especially appreciative 
Senator Kyl is here today and is a lead sponsor of this important 
legislation along with Senator McCain. I also strongly support 
Congressman Renzi's legislation, H.R. 2907, which is nearly identical 
to the legislation that is the subject of this hearing.
    The passage of the Northern Arizona National Forest Land Exchange 
Act of 2003 is critical to the future economic vitality of the City of 
Flagstaff. The proposed land exchange includes approximately 1,600 
acres in the area around Flagstaff Pulliam Airport. The City, with 
first right of acquisition for a portion of this acreage, will have the 
opportunity to expand the municipal airport; protect the airport from 
future encroachment; address airport safety concerns; expand the 
existing business park; and acquire land for future regional park 
development.
    This expanded business park will allow Flagstaff to supplement its 
tourist-based economy with more diversified business interests. The 
addition of new businesses will provide the means with which Flagstaff 
will attract better and higher-paying jobs to the city. Flagstaff has 
little land available for immediate business park expansion, deterring 
many companies from relocating to the area, which affects our ability 
to expand our employment base. The 775-acre parcel retained by the 
owner is also designated for business/light industrial use in the 
Regional Plan.
    The acquisition of land for future regional park development will 
not only serve local and regional recreational needs but also act as a 
buffer for residents along Lake Mary Road and the airport. One of the 
many reasons people choose Flagstaff is for the recreational 
opportunities it provides, such as hiking, biking, and skiing. The 
addition of this regional park will enhance these opportunities.
    I would be remiss if I didn't state that this legislation is not 
only critically important to the City of Flagstaff, but also the 
Northern Arizona region. It is my understanding the Forest Service 
strongly supports this legislation, as it will consolidate lands within 
the Prescott National Forest that are currently checkboarded. The 
legislation also preserves old growth ponderosa and juniper from 
encroachment or future development.
    Mr. Chairman, this bill is the result of careful consultation with 
cities, counties, the Forest Service, and affected constituents from 
northern Arizona and is the product of years of intense negotiations. 
The bill is strongly supported by the Flagstaff City Council and will 
provide economic and environmental advantages for northern Arizona. I 
urge you to strongly support S. 849 and expeditiously move this 
legislation.
    Thank you for the opportunity to testify in support of the Northern 
Arizona National Forest Land Exchange Act of 2003.
                                 ______
                                 
                                 Cornville, AZ, September 11, 2003.

Jennifer Owen,
Energy and Natural Resources Committee.

Subject: S. 849

    We're writing to oppose the passage of S. 849, a land exchange 
between the Secretary of Agriculture and Yavapai Ranch Limited 
Partnership, at least on the trade that affects the Verde Valley. Our 
number one concern is already scarce water.
    According to Paul Handverger, a hydrologist who lives in the area, 
we might as well rename the Verde River the Ruskin Dry Wash if this 
land trade goes through. We're also concerned that this bill is being 
rushed through, bypassing the administrative process with scientific 
impact studies and opportunity for public input that the Forest Service 
normally uses for such trades. It's a sweetheart deal for Mr. Ruskin, 
who gets to keep the water on the land he trades to the Forest Service.
    In addition, Camp Verde will get to buy land from him for 15 
percent above the appraised value. It may be a good deal for Flagstaff 
and Williams, but it's a lousy one for the Verde Valley--just another 
example of greed coming to the forefront and special influences. Please 
vote NO on S. 849. Thank you.
            Sincerely,
                                   Helga Freund & Jack Morgenstern.
                                 ______
                                 
                                         Town of Clarkdale,
                                 Clarkdale, AZ, September 11, 2003.
Hon. Pete V. Domenici,
Chairman, U.S. Senate Energy and Natural Resources Committee, 
        Washington, DC.

    I testify in opposition to S. 849, the proposed land exchange 
between the U.S. Forest Service and a private landowner. The bill is 
titled ``Northern Arizona National Lane Exchange Act of 2003.''
    I am an elected member of the Clarkdale, Arizona Town Council. 
Today, I speak as a private citizen representing thousands of concerned 
residents and a number of other elected officials in our region. It is 
through their financial contributions that my trip here was made 
possible.
    This proposed land exchange, as drafted, will have profound 
negative impacts on Clarkdale and other parts of the Verde Valley. 
These alone are serious enough to compel defeat of the bill, as 
drafted, but there are numerous other provisions in the bill that 
require deletion or serious revision.

                          CLARKDALLE CONCERNS

    The 820+ acres of forest lands listed for exchange in Clarkdale are 
accessible public lands available for protection of our watershed, 
environmental buffers, and to provide opportunities for education, 
recreation, and a multitude of other uses. Trading these lands for 
inaccessible lands hundreds of miles away will deprive the public--us--
of the protection, purposes and uses for which these Clarkdale lands 
were set aside as public lands originally.
    These lands are an important part of our area's watershed. Our area 
in general, and Clarkdale in particular, is critically short of water. 
The privatization and development of this public land will only make 
matters worse. We live in a desert!
    The communities in our area are already mining water--that is, 
removing it far faster than it can ever be replaced by nature. Further 
development of any open land must not outpace our ability to supply and 
sustain it.
    Our area has no surface water rights (i.e., rivers or lakes)! We 
are totally dependent on ground water. Well levels have been steadily 
dropping these past several years, and many residents have had to 
redrill their wells several times. The private water company that 
supplies much of our area has redrilled without success. There is no 
evidence that sufficient additional water resources exist. (See, 
Attachment 1, de Welles; Attachment 2, Handverger) *
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    * The attachments have been retained in subcommittee files.
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    We live in a very arid region--a desert. Studies are underway to 
determine the extent of our ground water resources. Until we have the 
scientific evidence that sufficient water exists to support such 
additional development as proposed on the Clarkdale 800 acres, we must 
limit new growth to the private land already in existence. Creating 
more private land subject to development and increasing demands on our 
already limited water resources is certainly not in the public 
interest.
    Although Arizona is among the driest areas in the U.S., Arizona 
State water laws have not kept pace with the State's growth. Towns may 
not consider water availability when making development decisions. 
State law prohibits it. The public gets very little protection from the 
State on rural water issues. It is changing, but slowly. Our federal 
lands offer some protection as water reservoirs. (See, Attachment 3, 
Handverger)
    The water restrictions in S. 849, as they relate to the Clarkdale 
parcel, are completely insufficient and toothless, because they exceed 
what are considered normal usage levels, and because there is no 
certain provision that water usage levels will be monitored or 
enforced. No date agency has the will or sufficient staff to do such 
monitoring or enforcement, even if a provision in the bill would 
require it. Further, S. 849's restrictions do not apply to private or 
municipal water companies in any case.
    Clarkdale is a small town of under 4,000 people. Residential 
development of an additional 820 acres of newly privatized land will 
burden the town's resources. It is a generally accepted fact that that 
residential property tax revenue actually results in a net loss. The 
services required to support this proposed development will strain the 
town and is not in the public interest.
    In Clarkdale's case, all of our residential property tax covers 
only the cost of our fire department. Funds for all of the rest of our 
town's expenditures must come from other sources. More residential 
development will only increase the disparity. (See, Attachment 4, Fact 
Sheet)
    We are a growing but rural area. These public lands which remain to 
us are vital and essential to preserve a character which our residents 
highly value. Loss of these accessible public lands which serve as 
watershed, viewshed and as buffers between developments and towns will 
seriously compromise our natural and human environment.
    The 820 acres defined in S. 849 are entirely within the town limits 
of Clarkdale. None of this land is in Cottonwood, a neighboring town, 
and any reference to Cottonwood should be removed from this bill.

                             AREA CONCERNS

    A11 of the above points, as they relate to water and the public's 
valuing and use of its public land, apply to the entire region of the 
Verde Valley, including Camp Verde, the site of another parcel defined 
in S. 849. Council member, Anthony Gioia, from Camp Verde has addressed 
his community's concerns before this Committee.
    Myth: There is enough water to supply development to these 3,000+ 
acres in the Verde Valley.
    Fact. The area is already critically short of water. No scientist 
or specialist on water issues has ever suggested there is sufficient 
water here. Every hydrologist, geologist, etc., who has so far studied 
this area opposes the inclusion of the Verde Valley (Clarkdale and Camp 
Verde) parcels in any trade. They verify that we are already using 
water faster than it can recharge. We are in an arid, water-poor area. 
The impact of this proposed trade on the area water resources must be 
determined before more public lands are privatized and developed. (See 
Attachment 5, Hjalmarson)
    Myth: The water restrictions in S. 849 protect the public from 
excess water use.
    Fact: The water use ``restrictions'' are unreasonably generous. 
Further, there is no way to monitor, or verify, compliance on any of 
the parcels in this proposed trade, including the wells on the public 
land at Yavapai Ranch which will be retained by the proponent, Fred 
Ruskin. Nor is there any mechanism for enforcement. There is no State 
agency willing or able to monitor compliance. No monitoring will be 
done. The public will not be protected.
    Myth: The protection of the Juniper Mesa Wilderness and the 
consolidation of the checkerboard lands is worth whatever it takes.
    Fact: While both are worthy goals, S. 849 allows the proponent, 
Fred Ruskin, to retain thousands of acres of inholdings which directly 
abut the wilderness, and when developed will seriously impact it.
    S. 849, as drafted, does not protect the Wilderness. If the purpose 
of this proposed trade is to consolidate the checkerboard lands, no 
long-term or permanent inholdings should be permitted. Inholdings of 
thousands of acres are against U.S. Forest Service policy and against 
the public interest. In addition, such inholdings are not necessary to 
reach equity in the trade.
    Myth: The Verde Valley (Clarkdale and Camp Verde) parcels are 
necessary to reach equity for this proposed trade.
    Fact: Equal value can he reached solely within the checkerboard 
lands. U.S. Forest Service parcels outside the checkerboard proposed to 
be traded and made available for purchase by a town or city for public 
use or benefit could be included if the public supports such action. 
The Verde Valley parcels are scheduled for private development. There 
is little support outside the construction and construction-related 
interests for their inclusion. These lands must be removed from the 
trade until the potential impacts of their privatization can be 
determined.
    The goals of this proposed trade can be realized without including 
the Verde Valley lands and jeopardizing the area's future.
    Myth: Privatization of these thousands of acres of public lands and 
their subsequent development will improve the area economy, provide 
jobs, and increase the tax base.
    Fact: The jobs will be temporary, of short duration, and most 
likely be done primarily by contractors outside the area.
    Residential property tax does not cover the town's cost of 
providing services to these developments.
    The commercial development planned for the Camp Verde parcel may 
provide some minimum-wage jobs, some sales tax, and some new property 
tax revenue, but at what cost to the other businesses in the town and 
to the general public interest? What effect will the addition of large 
amounts of newly privatized land have on the value of the private land 
already available for growth?
    This issue must be part of a scoping effort to study the possible 
impacts of adding more than 3,000 acres of additional private land to 
the Verde Valley area.
    Myth: The development of newly-privatized public lands will provide 
``affordable'' housing.
    Fact: Using the ``affordable housing'' claim is disingenuous 
because no such housing will ever likely materialize.
    From the outset, these lands have been earmarked by the proponent, 
Fred Ruskin, for ``higher end housing''. There is no agreement as to 
what ``affordable'' housing is. Even multiple dwellings are not 
affordable to a large segment of our population. There is little 
incentive to build affordable housing because developers' profits on 
such construction are less.
    Myth: U.S. Forest Service lands near towns have become 
``urbanized'' and so, have lost their value, and need too much 
maintenance by the understaffed Forest Service.
    Fact: The lands near development serve as essential habitat 
watershed and environmental buffers. These lands are accessible; they 
are vital for the preservation of the lifestyle and amenities that 
public lands offer.
    Since these lands are used, they do need maintenance. Citizen 
volunteers can aid in this task. Such programs work well. Clarkdale 
citizens have repeatedly offered the USFS such services, only to be 
ignored. Nevertheless, Clarkdale citizens routinely clean up ``our'' 
forest lands without Forest Service cooperation or involvement.
    These lands matter to us, and their loss would be a great one. 
Their development will put the future of our groundwater resources in 
serious jeopardy. How can their privatization for one person's 
financial gain be defended as being in the public interest? The public 
interest requires that our public lands be preserved for future 
generations. The more densely populated an area becomes, the more 
crucial our accessible public lands become.
    Myth: The opponents of S. 849 are ``tree huggers'' ``no 
growthers'', and ``short-sighted reactionaries.''
    Fact: While the opponents are interested in preserving the 
integrity of the environment, most favor the multiple-use concept on 
our accessible public lands. We do want to preserve our rural 
lifestyle, but that is not incompatible with reasonable, sustainable 
growth on the already existing private properties.
    There is enough existing private property to increase our current 
population over 500%. The challenge is to grow wisely, as we develop--
and to protect--the resources needed to support that growth. We must 
think long-term. Growth-for-greed may bring short-term gains, but what 
will be the long-term effects on our resources, and our human and 
natural environments?
    Why haven't these issues been studied: why haven't they been 
considered when drafting S. 849? The fast-tracking of this largest land 
trade in Arizona's history cannot be defended as in the public 
interest. U.S. Forest trade guidelines normally involve full impact 
studies. At present, the potential impacts are unstudied and unknown. 
We should not have to gamble on our area's future. (see Attachment 6, 
Janecek, Attachment 7, Joens; Attachment 8, Wiley; Attachment 9, 
Licher)
    Myth: The public has been involved in this trade proposal and its 
input has been considered in S. 849.
    Fact: The people--the owners of this land--have been shut out, 
ignored and generally treated as a nuisance from the outset. The U.S. 
Forest Service did not do its job in involving the public: it delayed 
any scoping process until the trade proposal was fast-tracked through 
the legislative process.
    The public was promised on-site hearings by our Congressional 
delegation and the U.S. Forest Service, but these have never taken 
place. The Forest Service, and especially the Congress, have been 
heavily lobbied by Fred Ruskin's hired spokespeople. We, the public, 
only wish we had access to the financial resources which would afford 
us such access. While a few legislators have made an effort to be 
available, we fear the decisions are in the hands of those who are not 
familiar with the details of the proposal or the areas involved.
    The NEPA process would assure us that the bill's provisions have 
been studied, along with providing possible alternatives which would 
better serve the public interest. Since these are public lands, 
shouldn't the public and those agencies created to serve and protect us 
let the process unfold based on science, reason and the public good?
    Decisions of this magnitude should be based on a variety of sources 
and a variety of information. The record of land trades between the 
federal government and private persons has been mixed, at best. The 
public has too often been seriously shortchanged, as the 2000 GAO 
Report revealed. (See ``Land Exchanges Need to Reflect Appropriate 
Value and Serve the Public Interest'', June 2000, GAO/RCED-00-73)
    According to the GAO, the guidelines in place for land exchanges 
are often ignored or circumvented. What is propelling this proposal 
forward without the safeguards to protect the public? Why does S. 849 
have no impact study requirements? If this proposed land trade can't 
stand up to the scrutiny of the NEPA process, or some equivalent impact 
analysis, how can it deserve to become law? Are the protections in the 
NEPA process to be deemed irrelevant? These procedures to protect the 
public and its resources exist for sound and just reasons. They should 
be used, especially in our State's largest proposed land trade ever. 
(See Attachment 10, Leibforth)
    The people of Arizona and the United States deserve to have their 
voices heard regarding actions affecting their property. They deserve 
to have full access to all information and to the decisionmakers. They 
deserve to have full implementation of the programs which are designed 
to protect their interests. (See Attachment 11, League of Women Voters)
    The people of Arizona and the United States do not deserve to have 
their lands traded away, for expediency or as political pawns, to 
enrich a few at the expense of the many. Such trades should not be made 
for any reasons other than those defensible under the applicable 
guidelines which are there to protect and advance the public interest.
    S. 849 does not accomplish its purported aims. It does not properly 
address the complex issues involved in this massive trade. It does not 
represent appropriate input from the owners of these public lands. In 
its current form, S. 849 is not worthy of passage into law because it 
is not in the interests of the American people.

            Respectfully submitted,
                                        David W. Leibforth,
                                          Councilor, Clarkdale, AZ.
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