[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
H.R. 4888,
CABIN FEE ACT OF 2010
=======================================================================
LEGISLATIVE HEARING
before the
SUBCOMMITTEE ON NATIONAL PARKS, FORESTS
AND PUBLIC LANDS
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
Thursday, April 22, 2010
__________
Serial No. 111-51
__________
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index.html
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COMMITTEE ON NATURAL RESOURCES
NICK J. RAHALL, II, West Virginia, Chairman
DOC HASTINGS, Washington, Ranking Republican Member
Dale E. Kildee, Michigan Don Young, Alaska
Eni F.H. Faleomavaega, American Elton Gallegly, California
Samoa John J. Duncan, Jr., Tennessee
Frank Pallone, Jr., New Jersey Jeff Flake, Arizona
Grace F. Napolitano, California Henry E. Brown, Jr., South
Rush D. Holt, New Jersey Carolina
Raul M. Grijalva, Arizona Cathy McMorris Rodgers, Washington
Madeleine Z. Bordallo, Guam Louie Gohmert, Texas
Jim Costa, California Rob Bishop, Utah
Dan Boren, Oklahoma Bill Shuster, Pennsylvania
Gregorio Sablan, Northern Marianas Doug Lamborn, Colorado
Martin T. Heinrich, New Mexico Adrian Smith, Nebraska
George Miller, California Robert J. Wittman, Virginia
Edward J. Markey, Massachusetts Paul C. Broun, Georgia
Peter A. DeFazio, Oregon John Fleming, Louisiana
Maurice D. Hinchey, New York Mike Coffman, Colorado
Donna M. Christensen, Virgin Jason Chaffetz, Utah
Islands Cynthia M. Lummis, Wyoming
Diana DeGette, Colorado Tom McClintock, California
Ron Kind, Wisconsin Bill Cassidy, Louisiana
Lois Capps, California
Jay Inslee, Washington
Joe Baca, California
Stephanie Herseth Sandlin, South
Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Frank Kratovil, Jr., Maryland
Pedro R. Pierluisi, Puerto Rico
Vacancy
James H. Zoia, Chief of Staff
Rick Healy, Chief Counsel
Todd Young, Republican Chief of Staff
Lisa Pittman, Republican Chief Counsel
------
SUBCOMMITTEE ON NATIONAL PARKS, FORESTS AND PUBLIC LANDS
RAUL M. GRIJALVA, Arizona, Chairman
ROB BISHOP, Utah, Ranking Republican Member
Dale E. Kildee, Michigan Don Young, Alaska
Grace F. Napolitano, California Elton Gallegly, California
Rush D. Holt, New Jersey John J. Duncan, Jr., Tennessee
Madeleine Z. Bordallo, Guam Jeff Flake, Arizona
Dan Boren, Oklahoma Henry E. Brown, Jr., South
Martin T. Heinrich, New Mexico Carolina
Peter A. DeFazio, Oregon Louie Gohmert, Texas
Maurice D. Hinchey, New York Bill Shuster, Pennsylvania
Donna M. Christensen, Virgin Robert J. Wittman, Virginia
Islands Paul C. Broun, Georgia
Diana DeGette, Colorado Mike Coffman, Colorado
Ron Kind, Wisconsin Cynthia M. Lummis, Wyoming
Lois Capps, California Tom McClintock, California
Jay Inslee, Washington Doc Hastings, Washington, ex
Stephanie Herseth Sandlin, South officio
Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Pedro R. Pierluisi, Puerto Rico
Nick J. Rahall, II, West Virginia,
ex officio
Vacancy
CONTENTS
----------
Page
Hearing held on Thursday, April 22, 2010......................... 1
Statement of Members:
Grijalva, Hon. Raul M., a Representative in Congress from the
State of Arizona........................................... 1
Prepared statement of.................................... 1
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 2
McMorris Rodgers, Hon. Cathy, a Representative in Congress
from the State of Washington, Prepared statement of........ 10
Statement of Witnesses:
Almy, Richard D., Cabin Owner, Seattle, Washington........... 38
Prepared statement of.................................... 40
Anderson, Geoffrey, President, National Forest Homeowners,
Lincoln, California........................................ 24
Prepared statement of.................................... 26
Bailey, Peter D., Director, National Forest Homeowners,
Tacoma, Washington......................................... 53
Prepared statement of.................................... 54
Barile, Maureen E., Cabin Owner, Fresno, California.......... 64
Prepared statement of.................................... 66
Holtrop, Joel, Deputy Chief, National Forest System, Forest
Service, U.S. Department of Agriculture.................... 3
Prepared statement of.................................... 4
Additional materials supplied:
List of information retained in the Committee's official
files...................................................... 23
LEGISLATIVE HEARING ON H.R. 4888, TO REVISE THE FOREST SERVICE
RECREATION RESIDENCE PROGRAM AS IT APPLIES TO UNITS OF THE NATIONAL
FOREST SYSTEM DERIVED FROM THE PUBLIC DOMAIN BY IMPLEMENTING A SIMPLE,
EQUITABLE, AND PREDICTABLE PROCEDURE FOR DETERMINING CABIN USER FEES,
AND FOR OTHER PURPOSES. (CABIN FEE ACT OF 2010)
----------
Thursday, April 22, 2010
U.S. House of Representatives
Subcommittee on National Parks, Forests and Public Lands
Committee on Natural Resources
Washington, D.C.
----------
The Subcommittee met, pursuant to call, at 10:01 a.m. in
Room 1334, Longworth House Office Building, Hon. Raul Grijalva
[Chairman of the Subcommittee] presiding.
Present: Representatives Grijalva, Kildee, Napolitano,
DeFazio, Inslee, Hastings, Lummis, and McClintock
STATEMENT OF THE HONORABLE RAUL GRIJALVA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Grijalva. Let me call the Subcommittee on National
Parks, Forests and Public Lands to order. The subject of this
hearing is H.R. 4888, introduced by the Ranking Member, Mr.
Hastings, of the Committee.
I have an opening statement that I will submit for the
record. Mr. Hastings, any comments?
[The prepared statement of Mr. Grijalva follows:]
Statement of The Honorable Raul M. Grijalva, Chairman,
Subcommittee on National Parks, Forests and Public Lands
The Subcommittee will now come to order. Thank you.
Today we will receive testimony on H.R. 4888, the Cabin Fee Act of
2010. The bill addresses a program that the Forest Service has
administered since 1915. The program was so successful that families
have passed those cabins down from generation to generation, developing
strong local partnerships with the Forest Service.
However, the Recreation Residence Program has come before Congress
repeatedly due to concerns raised by cabin owners. Just about 10 years
ago, we passed the Cabin User Fee Fairness Act, known as CUFFA, to
address the concerns of cabin owners who were upset about rising fees
and an unfair appraisal process. Now, we are hearing about similar
issues once again. It is my hope that we will be able to find a
solution that solves these problems once and for all.
As always, we very much appreciate the time and effort put forth by
our witnesses and thank them for joining us today. With that said, I'd
now like to turn to Ranking Member Bishop for any opening statement he
may have.
______
STATEMENT OF THE HONORABLE DOC HASTINGS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Mr. Hastings. Mr. Chairman, thank you very much, and thank
you for holding a hearing on this bill. It is a bill that I
know is critically important to the 14,000 Americans that own
cabins in our national forests. And unless we act on this
issue, many of those owners may be forced to abandon those
cabins that have been in their families for many years.
And I also want to thank Forest Service Chief Tidwell, with
whom I met last week, and the Deputy Chief, who is here to
testify, for their willingness for the Forest Service to work
with us to find a legislative solution to this problem.
The fee schedule spelled out in my bill was crafted to be
balanced and fair to both the cabin owners and the Treasury.
And I am more than willing to consider additional proposals, as
long as they provide a simple, predictable system that does not
result in fee increases that are beyond the reach of average
Americans. I think that should be the goal for all of us.
A number of my constituents are cabin owners, and I
appreciate the input that I have received from them, along with
cabin owners throughout the country. They worked together, and
they brought this issue to our attention.
Many of the private cabins on Forest Service land are
simple, rustic structures. Many were built in the last century
by grandparents of the current owners, and they are passed
down, of course, from generation to generation.
Although there may be a few that are large and showy, the
overwhelming majority of these cabins are modest family
retreats. And the purpose of this bill is to keep the fees
affordable for these people, who are average Americans, as I
mentioned: factory workers, retirees, teachers. But, of course,
that won't happen unless we address this problem.
The cabin owners affected by this bill currently are
charged an annual fee for the use of the land on which their
cabin sits. They don't get ownership rights to the land; they
have only a temporary and highly restrictive use permit. So
basically what they have is just the footprint for their cabin.
Because of the limited-use permit, it is not comparable to
the rights acquired when someone owns property in fee simple.
It has proven impossible under current law to establish what I
consider to be a fair process for setting the fees charged to
these cabin owners; thus, the result of this legislation that I
introduced.
There is a story in my state where the Seattle Times talked
about a family in Lake Wenatchee, which is in my district,
where their fee schedule increased over 1,000 percent, from
$1400 to $17,000. Well, that is obviously untenable, and fee
increases like that, frankly, make it impossible for the cabin
owner to even sell their property. And we simply don't want to
do that. We want to correct that in a way that, I think, is
equitable to all.
When the Forest Service established this policy nearly a
century ago, they were trying to promote outdoor recreation. We
want to continue that. Our national forests are multiple-use
areas. They ought to be. Cabins on that land is part of that.
So Mr. Chairman, once again, thank you very much for
scheduling this hearing. And I want to thank again Mr. Tidwell
for working with us, and hopefully we can find a solution so
this will be predictable in the future.
And with that, I yield back my time.
Mr. Grijalva. Thank you very much, sir. Let me ask the
Ranking Member of the Subcommittee, Mr. Bishop, if he has any
comments.
Mr. Bishop. No, thank you.
Mr. Grijalva. Thank you. Let us begin with our first
panelist, Mr. Joel Holtrop, Deputy Chief, National Forest
Service, U.S. Forest Service. Thank you, sir, and I look
forward to your comments.
STATEMENT OF JOEL HOLTROP, DEPUTY CHIEF, NATIONAL FOREST
SYSTEM, U.S. FOREST SERVICE
Mr. Holtrop. Mr. Chairman and members of the Subcommittee,
thank you for the opportunity to appear before you today to
provide the Department's view of the Cabin Fee Act of 2010.
We have provided written testimony for the record, and I
would like to focus my remarks this morning on the benefits and
the challenges of this bill.
First of all, the benefits. Clearly, reduced appraisal
costs for the Forest Service, and reduced administrative burden
for the Forest Service. And that is a significant advantage of
this bill.
There is also, as Representative Hastings mentioned, a
certainty for cabin owners is a key positive aspect of this
bill. And we recognize those, and do look forward to continuing
to work with you to come up with a solution that also addresses
some of the concerns that I will mention in a moment, as well.
And I also want to express my appreciation for the
financial burdens that some cabin owners may face as a result
of the implementation of the Cabin User Fee Fairness Act of
2000 that Congress passed.
And I want to acknowledge our appreciation to the cabin
owners, as well. They do bring lots of benefits to the National
Forest System. They bring benefits such as volunteer services.
They bring benefits such as economic benefits to local
communities. And they bring benefits of connecting people to
their natural world, and from generation to generation. Those
benefits are considerable; they are important to us as an
agency, and to us as a society; and we appreciate that very
much.
However, I also want Congress to understand that without a
fee system that approximates market value, we will continue to
see large profits from the sale of cabins, where cabin owners
are in reality selling the value of the underlying lot. And we,
the American people, own these lots, and not the cabin owners,
as has already been mentioned.
We do welcome the opportunity to work with Congress to
develop a bill that is fair to cabin owners, the taxpayer, to
users of the national forests, and can be administered without
undue burden.
I would like to just briefly mention five aspects of the
bill that we have either concerns or suggestions about.
One is we would like to create one fee system for the
entire National Forest System, not a fee system just for that
portion of the National Forest System that has been derived
from the public domain in another fee system for acquired
lands.
Second, we would like to have the consideration of perhaps
increasing the fee amounts within each of the categories that
are in the bill, as well as maybe adding to the numbers of
categories in the bill, in order to better reflect markets. If
fees, again, are below market value, cabin owners will be
selling National Forest System lands when they sell their
cabin.
We would like to consider the elimination of the transfer
fee for a couple of reasons. One, it would be administratively
difficult for us to track the sales, and could be adding to a
cumbersome administrative process.
And, third, it also assumes that there is a value in the
sale beyond the value of the cabin itself in the transfer fee.
And again, if the fees approximate market values, then we would
not have to be worrying about the transfer fee.
I also would like to recognize and understand the
administrative cost of administering this program. As
Representative Hastings said, there are over 14,000 cabin
owners, and we recognize that those cabin owners visit the
forests many times in a year, and visit the forests with
friends and family. So there are maybe as many as five million
visitors that are associated with the cabin users.
The National Forest System accommodates 175 million visits
a year, and the cost of us administering the Cabin User Program
is over 5 percent of our recreation budget. In the State of
California it is over 15 percent of our recreation budget. And
on the El Dorado National Forest alone, it is one third of our
recreation budget. The El Dorado is in California.
Fifth, I would like to recognize and understand the need
for us to study the management of a very limited number of
these recreation parcels or groups of parcels that may have
lost their national forest character over time because of their
proximity to neighboring subdivisions on private land, or for
other reasons.
And again, let me express there are certain advantages to
this bill, such as reduced appraisal costs being a primary one,
and certainty for the cabin owner another. And we do look
forward to continuing to work with the Committee on adjusting
to the concerns that I just raised, and some other technical
changes that we would like to discuss.
And I want to work with the Committee to develop a bill
that is fair to the cabin owners, that is fair to the American
people whose lands these cabins are on, and does not cause an
undue burden for either the Forest Service or for the cabin
owners.
This concludes my statement. I will be happy to answer any
questions that you may have.
[The prepared statement of Mr. Holtrop follows:]
Statement of Joel Holtrop, Deputy Chief, National Forest System,
U.S. Forest Service, U.S. Department of Agriculture
Mr. Chairman and members of the Subcommittee, thank you for the
opportunity to appear before you today to provide the Department of
Agriculture's views on H.R. 4888, the Cabin Fee Act of 2010. The
Department appreciates the over 14,000 cabin owners across the country
and the recreational experiences they enjoy on the National Forests and
Grasslands.
H.R. 4888 would revise the procedures for determining the amount an
owner of a cabin on the National Forests must pay to lease the
underlying public property. The Department appreciates the financial
burdens that some current cabin owners may face as a result of the
Cabin User Fee Fairness Act of 2000 (CUFFA). However, H.R. 4888
presents challenges that I will discuss in further detail. The
Department welcomes the opportunity to work with Congress to create a
bill that is fair to cabin owners, other users of the National Forests,
and the taxpayer, and that can be administered without undue burden on
the agency or cabin owners.
The bill would replace CUFFA on National Forest System lands
reserved from the public domain. It would create five payment tiers, or
categories and provide for an additional payment on the sale or
transfer of the cabin. It would require the agency to place cabins in
five categories utilizing appraisals that would be in place at the time
of enactment. CUFFA would remain in place for cabins on acquired
National Forest System lands.
Before describing the challenges of this bill, it is important to
consider the history of this program. In the early part of the
twentieth century, the Forest Service began introducing Americans to
the beauty and grandeur of their National Forests. One way to
accomplish this objective was to permit individuals to build cabins for
summertime occupancy within the National Forests. Cabin owners were
permitted to occupy NFS land during the summer months in exchange for a
fee. In 1915, the agency began to issue permits of up to twenty years
for occupancy of NFS land. At that time, there was relatively little
recreational use of the National Forests. Today, the National Forests
host over 175 million visitors per year. When this recreational cabin
program began, there was limited interest in building and owning a
remote cabin on NFS land. Today, similar land at ski resorts, near
lakes, and remote mountain settings are highly prized, selling for
prices beyond the means of many Americans. In the early years, fees
were nominal, but since the 1950's, the Forest Service has been
mandated to obtain fees approximating market value for the use of NFS
land. Increasing fees have led to controversy and have resulted in
enactment of multiple fee moratoriums and caps over the years. CUFFA
was the latest attempt to achieve an equitable fee for the use of
National Forest System land.
CUFFA prescribes parameters for the appraisal process and fees
under CUFFA are based on five percent of the appraised market value of
the lot under permit. The agency began the appraisal process pursuant
to CUFFA in 2007, and will be continuing that effort through 2012. As
cabin owners received notice of the new fees, some have experienced
dramatic increases because the old fees were based on appraisals
completed ten to thirty years ago. In response, Congress included
appropriations language for FY2010 which limited fee increases to no
more than 25% of the fee paid in calendar year 2009.
There are a number of examples of families who have had cabins for
generations, but are having difficulty paying the new fees. However,
there are also examples where low annual fees in the past have led to
significant financial gains when cabin owners have sold their cabins
for significantly more than the value of the structure, essentially
benefiting from a lower than market value for their use of public land.
When this occurs, cabin owners are, in effect, selling the location of
their cabin, which is owned by the American people. Some cabins have
sold at a premium price, only to be torn down by the new owner and
replaced with a new structure.
Here are our concerns with the bill as written:
Different Fee Systems
The bill applies to cabins on National Forest System lands
reserved from the public domain which is the status of NFS land
in much of the western US. However, the National Forest System
also consists of lands acquired from other ownerships. Most of
the eastern and mid-western National Forests are comprised of
acquired lands. We estimate that seven to ten-percent of the
estimated 14,000 cabins nationwide would be on a different fee
system. To simplify the process and reduce the administrative
burden, the Department requests that the same fee system apply
to all cabins on all National Forest System lands.
Fee Amount: Our analyses indicate that many of the proposed fees
are less than those which would be paid under current law and below
market value for many of the lots. As previously noted, fees below
market value can lead to windfall profits when cabins are sold, as the
sale prices will reflect the value of the locations as well as the
value of the cabins. When the buyer of a cabin knows he or she will be
paying market value for the location, prices tend to reflect only the
value of the structure being conveyed. To reduce the likelihood of
these profits, the proposed fee schedule should include additional
tiers or the fees within the tiers of the draft bill should be
increased. Projections indicate that expected receipts under CUFFA are
significantly more than that which H.R. 4888 would generate. In
addition, to reduce the administrative burden of billing or reimbursing
fees due to changes in the fee estimate, the Department requests that
appraisals be updated as scheduled and in place prior to implementation
of any new fee legislation.
Additional Transfer Fees: H.R. 4888 requires the Department to
verify the price at which these private cabins are sold and
subsequently obtain a payment based on a percentage of the sale. The
Department is concerned about the administrative challenges of
obtaining this information, which in many localities is not public
information, and collecting additional fees which creates an additional
administrative burden.
Cost of Administration: We appreciate that the bill acknowledges
the financial burden on the agency. Under CUFFA the Department
estimates that the annual cost of administering is from $500 to $700
per cabin plus approximately $1 million per year for appraisals. In
California the administration of this program accounts for over fifteen
percent of the total recreation budget. On the El Dorado National
Forest, one third of the recreation budget is spent administering this
program. While there are some 14,000 cabin owners, there are 175
million visitors to the National Forests each year. H.R. 4888 would
reduce the administrative burden by eliminating the need for
appraisals. This would increase the availability of funding in the
recreation budget for the Forest Service to provide a quality
experience and protect the environment for all who use the National
Forests.
Need to study cabin lots that may have lost their National Forest
character: Over time, occupancy of some ``summer'' cabins has evolved
into four-season use, particularly those located on the periphery of
the National Forests. While year-round use remains contrary to agency
policy, administration of these cabins can become more complex as
owners desire typical public services found in residential
subdivisions; such as electric, phone, cable, and sewer. In addition,
their proximity and similarity to neighboring private subdivisions,
suggests that some of these lots may have lost their National Forest
character. The Department would like the opportunity to study this
issue more carefully and to consider options to more effectively manage
these areas.
Technical Changes: Additionally, there are a number of additional
technical suggestions which we would like to share with the Committee.
That said we acknowledge that there are advantages to this bill
from an administrative perspective. It would reduce the agency's
appraisal costs and it would provide certainty for cabin owners in
terms of anticipated fees. Again, we welcome the opportunity to work
with the Committee to develop legislation that is fair to the taxpayer,
the cabin owner, and other users of the National Forests and
Grasslands, and can be administered without undue burden on the agency
or cabin owner
This concludes my statement and I would be happy to answer any
questions you may have.
______
Mr. Grijalva. Thank you very much, Mr. Holtrop. Let me,
back to the cost issue that you mentioned in one of the five
areas that you felt needed change or consideration.
First of all, how much does it currently cost the Forest
Service to administer the residency program? And when CUFFA is
fully administered, can you tell us approximately how much
money the Forest Service expects the program to generate?
Mr. Holtrop. Yes. The answer to the first question is, we
estimate an approximate cost of between $500 and $700 per cabin
per year for us to administer the program. And at 14,000
cabins, that is between $7 and $10 million a year.
And then, in addition to that, under the Cabin User Fee
Fairness Act, the appraisal cost is approximately, maybe $10
million every 10 years, and so maybe another million dollars a
year for that. So somewhere in the $8 to $11 million-a-year
range to administer the program.
Under CUFFA, our anticipated revenues that the program
would generate through the Treasury would be between $40 and
$45 million. That is based simply on, we have, we have already
done the appraisals on approximately 8,000 of the 14,000
residences. If the same average value amount were in place for
the remaining 6,000, that would add up to an annual income of
around $40 to $45 million.
Mr. Grijalva. And if the Forest Service is opposed to an
additional transfer fee, how do you recapture value? How would
the Agency, what would you recommend, how are we capturing
value if there is opposition to the transfer fee?
Mr. Holtrop. I think the way for us to capture value is to
establish a fair market value, establish the percentage of that
fair market value, which under CUFFA is 5 percent, which was
established, and charge a fee for the permits that approximates
market value. And that should generate the types of funds that
are appropriate.
Mr. Grijalva. Mr. Hastings pointed out the one example of
the 1,000 percent fee increase. About what percentage of the
cabin fees right now are more than $6,000 a year?
Mr. Holtrop. I do have a chart that shows. And again, this
is based on the approximately 8,000 of the cabins that have
been appraised under CUFFA to date.
Those that are, what was the question, over $6,000?
Mr. Grijalva. Yes. What percentage?
Mr. Holtrop. Those that are over $6,000 is approximately 10
percent.
Mr. Grijalva. OK, thank you. Mr. Bishop.
Mr. Bishop. Can I yield to Mr. Hastings first?
Mr. Grijalva. OK. Mr. Hastings.
Mr. Hastings. Thank you. And Chief Holtrop, thank you for
your testimony.
I just wanted to clarify. I am inferring from your
testimony that you don't necessarily, you know, oppose the fee
structure. But one of the concerns is, my words, the revenue
neutrality. In other words, you don't want it to cost any more.
If we can figure out a way, with this fee, to make it revenue-
neutral, that would be a win-win for both sides. Is that
essentially correct?
Mr. Holtrop. That is correct. But I am also interested in
having the fee structure represent a fair market value.
Mr. Hastings. I understand that. And you are going through
that process. You have what, roughly three fourths or just
about three fourths of the appraisals done?
Mr. Holtrop. Sixty percent, approximately.
Mr. Hastings. Sixty percent, roughly, OK. Just a question.
With the real estate market going down, have you seen a change
in the appraisals here, the current appraisals compared to,
say, ones that were done a year or so ago?
Mr. Holtrop. I would expect that there is some reflection
of that, over time.
Mr. Hastings. OK. Well, that is going to be the challenge,
is trying to figure that out. Because you have to have a
starting point. And once you have a starting point, I think
that everything hopefully, at least with the idea that we had
with this, the tiered system, will, in the future, level itself
out, you know, with sales and so forth. And we can work with
you on that.
Mr. Holtrop. Thank you. And I also think having a starting
point that is, that is fair and makes sense. And right now,
those cabins that have not been appraised under CUFFA, some of
those appraisals go back to the early 1980s. And so that is one
of the technical corrections that we want to work with you on,
as to how to make sure that we don't have a tier system that is
based, on some cases, on a value that is a couple of decades or
more old, and some that are based on values that are a couple
years old.
Mr. Hastings. Yes, I agree with you. But I will make a
prediction that when we go through that process and finally
come up with something, there will be some that will be upset.
Mr. Holtrop. That is probably a very safe assumption.
Mr. Hastings. Grace just said that is not going to be the
case, so I hope that is good.
And finally, I just want to ask this. The Forest Service
has no intention of shutting down this program at all; that was
never the intention.
Mr. Holtrop. That is absolutely correct.
Mr. Hastings. OK.
Mr. Holtrop. We value this program. Like I mentioned, we
value the volunteer services that the cabin owners provide for
us in the locations of the cabins, and beyond those locations.
We value the economic benefits that they bring to communities.
And we value the way that they are, that is one of the ways
that the National Forest System is helping the American public
become connected to their natural world. We value that.
There are some of the cabin lots and combinations of lots
that may have lost their national forest character, and we want
to look at whether there is some appropriate other way of
dealing with that. But that in no means is indicative of a
desire to do away with the program.
Mr. Hastings. Good. Well, I appreciate that. I just wanted
to get that on the record so we are sure. Because as I
mentioned in my opening remarks, this is nearly a century-old
program. And clearly, at least hearing from my constituency, it
is a program of those that have those cabins, and the fact that
they are passed down, many of them, from generation to
generation, it certainly demonstrates that there is some value
to that. But I just wanted to get to clarify that.
Thank you very much. I appreciate your being here.
Mr. Holtrop. Thank you.
Mr. Hastings. I yield back.
Mr. Grijalva. Thank you. Ms. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chair. And I am listening
with a great interest.
What is the number of cabins that you normally have leased
out, roughly?
Mr. Holtrop. About 14,000 on the National Forest System as
a whole.
Mrs. Napolitano. Fourteen thousand. Of those six are over
the 10 percent of that 6,000?
Mr. Holtrop. Approximately 10 percent of those 14,000 would
likely be paying an annual fee of $6,000 or more per year. That
is based on the 8,000 that we have appraised to date.
Mrs. Napolitano. A lot of these--and I am listening to Doc
Hastings--indicated that a lot of these are handed down
generation to generation. Are they grandfathered in terms of
being able to pay? Or is this a standard fee that you impose
based on location, based on area, whatever?
Mr. Holtrop. Yes, that is an excellent question. Ever since
the 1950s we have been required to be charging for the permit,
and it is based on an appraisal of the land value.
Mrs. Napolitano. OK.
Mr. Holtrop. And so we are, we appraise the land. We
contract with certified appraisers who do the appraisal process
of the land.
And what CUFFA accomplished in 2000 was updating an
appraisal process. And up until we started implementing the
appraisals under CUFFA, the fees were being based on appraisals
that were done in the 1980s, to a large extent.
And so now, with the new appraisals, in many cases, of
course, the fees are going up, and in some cases they are going
up dramatically.
Mrs. Napolitano. Then none of these are grandfathered in
terms of payment of the lease?
Mr. Holtrop. They are passed on, the permit is passed on
from family to family, generation to generation.
Mrs. Napolitano. But not the amount paid for the lease.
Mr. Holtrop. But the fee is something that we----
Mrs. Napolitano. Is standard.
Mr. Holtrop.--determine based on the current law of the
land.
Mrs. Napolitano. OK. I understand the upkeep and the
maintenance is up to the lessor. I mean, the lessee. Are any of
those being checked to ensure that they are maintained at least
to some degree of viability, in case of fire or--you
understand.
Mr. Holtrop. Yes, I do. That is a condition of the permit,
and that is part of the cost of administering the program that,
in answer to the Chairman's question, I was talking about.
We approximate between $500 and $700 per year per cabin to
administer the program. Part of that administration is visiting
the cabin, checking on the compliance with things.
Mrs. Napolitano. How often?
Mr. Holtrop. Pardon me?
Mrs. Napolitano. How often?
Mr. Holtrop. Well, it depends on, it depends. It is
location-specific. We generally have an expectation that at
least once a year a Forest Service officer will visit a cabin
to check on it. Whether that is accomplished in all cases, I am
unable to say for sure. But in many cases, I think it happens
far more often.
It is somewhat dependent upon whether the owner of the
cabin is proposing some adjustment, whether they want to add a
deck or upgrade a driveway or something like that. That
requires far more visits than somebody who is just, that is
just maintaining the status quo over time.
Mrs. Napolitano. Now, are these individual grandfathered
residents of those cabins able to sublease to others that are
not descendants?
Mr. Holtrop. No.
Mrs. Napolitano. Sublet? Rent?
Mr. Holtrop. There is some limited amount of----
Voice. Depending on the region, there is some ability to,
in the short term----
Mr. Holtrop. There is some limited short-term opportunity
to do some subleasing. But generally, that is not the purpose
of the----
Mrs. Napolitano. Do you have a percentage, approximate
percentage, of those? No?
Mr. Holtrop. I certainly don't. And I don't think we can
provide that right now, but I would be happy to look into that
and get you an answer.
Mrs. Napolitano. Right. Because if they are subleasing,
they are asking for more money than they are paying.
Mr. Holtrop. I don't have information to either deny or
agree with that. And I think it is a fairly limited----
Mrs. Napolitano. It would be nice to know, Mr. Chair.
Mr. Holtrop. I will get you the information.
Mrs. Napolitano. Thank you so very much. Then, I am just
barely--how is the revenue currently used? And what adjustments
would have to be made if this is enacted and costing the
program to generate the $20 million less?
Mr. Holtrop. If the question----
Mrs. Napolitano. The revenue.
Mr. Holtrop. It is a question of the fees from CUFFA?
Mrs. Napolitano. Right.
Mr. Holtrop. The fees from CUFFA go to the Treasury.
Mrs. Napolitano. OK. Would that cause any problems for
the--well, then you get your revenue from the Treasury.
Mr. Holtrop. Yes, we get it through Appropriations.
Mrs. Napolitano. Thank you, Mr. Chair.
Mr. Grijalva. Thank you. Mr. Bishop.
Mr. Bishop. Thank you, I appreciate it. I think the hearing
so far has--first of all, may I ask unanimous consent to have a
statement from Congresswoman McMorris Rodgers submitted to the
record?
Mr. Grijalva. Without objection. Thank you.
[The prepared statement of Mrs. McMorris Rodgers follows:]
Statement of The Honorable Cathy McMorris Rodgers,
a Representative in Congress from the State of Washington
I would like to thank the Ranking Member, Mr. Hastings, for his
work on this issue. When the U.S. Forest Service's Recreation Residence
program was established almost 100 years ago (1915), it was intended to
allow American families to enjoy our nation's treasures for years to
come. In fact, there are more than 14,000 cabin owners from all walks
of life enjoying our national forests today. Yet, many of them face the
real possibility of having to sell or abandon their cabins because of
unpredictable fee increases. H.R. 4888 will bring stability to the
appraisal process and ultimately to the calculation of annual fees for
these cabin owners.
Yet, there is a related issue that is not addressed by H.R. 4888
and that is the calculation of fees for cabin owners leasing land from
the Bureau of Reclamation. Similar to the disparity in cabin fee
increases on forest service land, many cabin owners on reclamation land
are facing steep fee increases. For example, in Eastern Washington,
cabin owners on Lake Conconully have been subjected to what seems to be
discretionary fee increases over the years, with fees rising from
approximately $700 to anywhere between $1,800 and $3,300 annually. For
many of the older fixed income folks, these increases will be
devastating.
Of particular concern is the lack of uniformity in calculating
fees. For example, the Bureau of Reclamation manages approximately 500-
600 cabins in 10-15 sites around the west. It appears that these fees
are calculated using the fair market value of adjoining property.
However, at Lake Conconully, fees have been calculated using the fair
market value of adjoining agricultural property. Moreover, in addition
to the properties specifically managed by the Bureau, the Bureau has
also entered into an unknown number of agreements that authorize
entities to manage property. These managing partners in turn rent to
cabin owners. It is my understanding that these managing partners have
the ability to enter into their own agreements with cabin owners,
including setting their own fee structures. The disparity in fee
calculation across the nation is concerning.
I would like to work with the Ranking Member to address this fee
disparity on reclamation land as H.R. 4888 moves forward.
______
Mr. Bishop. Thank you very much. I think there are two
things I have learned so far. Number one is, I am grateful my
in-laws have a cabin, even though I don't use it very much; and
I am grateful they did it on private land.
Number two, I am grateful I was not----
[Laughter.]
Mr. Bishop. I am grateful I was not here when CUFFA was
passed, so I don't have to bear that burden.
I would like to ask you for some documents. Not that you
have any I want, it is just, it is tradition. So if you can get
me a document some time, that would be kind.
Mr. Holtrop. I would be happy to oblige.
Mr. Bishop. All right. Let me ask two serious questions,
though, if I could.
You stated that the administrative cost was $500 to $700
per cabin. Does that include the appraisal cost, or is that
outside of the other appraisal cost?
Mr. Holtrop. That was just the yearly administration. It
does not include the appraisal cost.
Mr. Bishop. So the appraisal cost is approximately about
$10 million every 10 years, under CUFFA. What is it that you do
that costs $500 to $700 per year per cabin?
Mr. Holtrop. We visit the cabin on an annual basis. We have
conversations with the cabin owners about any improvements that
they want to make to the cabin, to make sure that those
improvements would continue to be consistent with the permit.
And the objectives of the permit is largely to make sure that
the, that the lots, the several lots together will continue to
have national forest character. And so we are, so it is the on-
the-ground administration of the permit.
There is the issuing of the permit. There is the issuing of
the bills for the permits. There is the response to cabin
owners if they have an objection to the permit fee, et cetera.
Mr. Bishop. Could I make the assumption that there would be
administrative cost savings if they were no longer faced with
constant appraisals, reappraisals, legal challenges? Would
there be an actual savings that would occur to the Forest
Service?
Mr. Holtrop. I do see one of the advantages of this, of the
proposed bill as reducing our costs for appraisals over time,
yes.
Mr. Bishop. And I do appreciate your willingness to work
with Congressman Hastings to move this forward and work out
some of these details. I think that is very positive, and I
appreciate that very much.
When the appraisal, as you said, it is only on the land; it
is not on the value of the cabin, per se.
Mr. Holtrop. That is correct.
Mr. Bishop. And therefore, you have to come up with a fair
market value on the land. Can I ask, because appraisal is as
much art as it is science. And it is based on what has sold in
other areas very close to it, at least if you are going into
the private sector and appraising a house.
What is the base line that you use to make the assumption
of fair market value when you are dealing with the Forest
Service, and there is no private sector competition for that
particular piece of land? How do you make the base assumption
of what is a fair market value for a piece of property within
government-owned land?
Mr. Holtrop. First of all, I am not a land appraiser
myself. But we do contract with certified land appraisers who,
the process that they go through, as I understand it, is they
look for comparable lots that have sold in the area. In some
cases that is actually quite easy to do, and there are
comparable lots. And in other places it is----
Mr. Bishop. Comparable lots within the Forest Service?
Mr. Holtrop. No. Outside of the Forest Service.
Mr. Bishop. I am sorry, I interrupted you.
Mr. Holtrop. Yes, I believe that is correct. I am looking
at our chief appraiser to make sure I said that correctly.
Voice. Whatever is the closest you can find to be
competitive.
Mr. Bishop. Are there any inside the national forests as
comps?
Voice. Well, certainly within the bounds of the national
parks, yes.
Mr. Bishop. But private land-only comps. And you feel
comfortable that is an apples-to-apples comparison? Or is there
obviously going to be some kind of dissidence between public
land versus private land?
Mr. Holtrop. Well, there are, I think I am comfortable that
it is consistent with current appraisal processes in many
settings. And I think it is, I think what CUFFA also includes
is, if there is a dissatisfaction with the appraisal amount, it
can be appealed, and we will look at an independent appraisal
other than the one, the appraiser that we contracted with.
Mr. Bishop. I understand--that is not quite what I asked,
but I do appreciate this, as my time is running out here, and I
am not going to extend it. I do appreciate your willingness to
move forward on this legislation and try and work out some of
these details.
Thank you, sir.
Mr. Grijalva. Thank you. Mr. Costa, any questions?
Mr. Costa. Yes. Thank you, Mr. Chairman, for allowing me
the privilege of sitting in with the Subcommittee and the
Ranking Member. This is an issue that, in various parts of the
West, I think has significance. And the legislation that I am a
co-sponsor with, with Doc Hastings, I think is an attempt to
try to clear up what has been problematic for the 14,000 cabin
owners in the West who--not just the West actually. There are
some other parts of the country, as well, that are on public
lands, that go back to 1915.
Cabin owners have always I think strived to get back to
their communities on the forest lands in which their cabins
are, to help preserve the national forest where their cabins
lie. And I know that in California, which is what my experience
is, the cabin owners have provided a great deal of time and
effort to volunteer activities that include volunteer fire
departments, museums, and other voluntary efforts to work with
enhancing the forest that not only they and their families and
friends use, but that the public uses. Because oftentimes there
are adjacent campgrounds that the public uses.
I would like to get in a couple of questions here in my
time, with our first witness. And we appreciate your input as
to how we can make this measure work and have the support of
the Administration.
The tier system that we have set up in the bill I think
frankly is something that we can all work on. Does the Forest
Service see the benefit of maintaining the cabin program? I
guess that is the first threshold question.
Mr. Holtrop. Absolutely, we do.
Mr. Costa. Wonderful. So do I. Are there additional changes
to the program that you would like to see occur beyond what we
have outlined in our bill and in your testimony?
Mr. Holtrop. Just some technical improvements that aren't
outlined in detail in my testimony. But the improvements, the
changes that we would like to see are included in the
testimony.
Mr. Costa. Could you, and when you provide that technical
information, also inform us on how the cabin owners can be
helpful to the Forest Service in making this program work, and
on an ongoing basis?
I think that what has happened with the original Act and
the lack of implementation in an orderly fashion has created a
whole lot of frustration, and in some cases, deep concern that
cabins that have been in families for generations are going to
be lost. These are not palatial homes; these tend to be, at
least in California, from my experience, rustic and modest, but
yet a wonderful place to go and to experience the outdoors.
Mr. Holtrop. I would be happy to continue to work on
identifying how the owners of these cabins can continue to help
serve our national forest mission. And I agree with what you
are saying.
Mr. Costa. Many of the cabin owners have indicated that as
the current fee structure moves forward, they will have to look
to sell or abandon their cabins. Do you have any anticipation
of permits that the Forest Service believes might be lost under
the current structure?
Mr. Holtrop. I don't have any specific information on this.
I do know that the National Forest Homeowners Association has
done a survey of their membership, and I would defer to their
information.
Mr. Costa. They think 5 percent to 10 percent is what I
have heard, or more. That could be a loss of $8 to $9 million
in revenue. So, and the appraisals my colleague and friend from
Utah I think centered in on. I mean, I think that is a problem,
and we hope to facilitate this.
You have indicated in conversations that I have had with
you that the appraisals are a problem. Is that not the case?
Time-consuming?
Mr. Holtrop. The appraisals, they are time-consuming. As
Mr. Bishop's questions indicated, they are controversial in
many cases. But I do believe that some establishment of fair
market value before----
Mr. Costa. No, we need to do that.
Mr. Holtrop.--the system is in place----
Mr. Costa. I don't think there is a disagreement there. If
we expanded it beyond the five tiers to a sixth and seventh
tier, do you think that would be more helpful?
Mr. Holtrop. I do.
Mr. Costa. You do, OK. What percentage I guess in how we
meet a happy medium or a comfort zone is, have you given that
some thought since our last discussion?
Mr. Holtrop. Yes, we have, both since our last discussion
and in preparation for this hearing, and in ongoing
conversations with the National Forest Homeowners Association.
Mr. Costa. And are you prepared to provide that
information?
Mr. Holtrop. Well, I think, if I am understanding the
question----
Mr. Costa. Or you did before I got here?
Mr. Holtrop.--things like additional tiers and
understanding--maybe you should repeat the question. I might
not be catching what it is you are asking.
Mr. Costa. Well, what I am trying to do is to figure out if
we go from five--my time has run out--but if we go from five
tiers to six or seven tiers, what the percentage or the
breakdown, in terms of finding that happy medium, would be.
Mr. Holtrop. Yes, yes. We have done analysis of what that
would be, how much, what the value of different tiers in order
to have something in which the cabin owners would not have to
pay significantly more than they would under CUFFA.
Mr. Costa. And make it pay-go neutral on that?
Mr. Holtrop. We are continuing to work on that. And yes, we
have some information we can share.
Mr. Costa. Mr. Chairman, thank you for allowing me the time
here. And I appreciate working with your Subcommittee, and I
think this is an opportunity to put together a bipartisan bill
that can fix this problem.
Mr. Grijalva. Thank you, sir. Mr. Inslee, any questions?
Mr. Inslee. Yes, thank you. Do you think the goal of the
tier, if we go to a tier system for its administrative
convenience, should the goal be to come as close as possible to
fair market value? Should that be the goal?
Mr. Holtrop. I think that ought to be one of the goals,
yes.
Mr. Inslee. So right now, under Mr. Hastings's proposal, it
has tier five, and it would have a fee amount of $4,000 per
year. How would that relate to fair market value the way this
is set up?
Mr. Holtrop. I think in a vast majority of cases, that
might be sufficient. However, I believe that there are some
lots in which fair market value is considerably more than
$4,000, and that is part of the rationale of providing for
additional tiers that may go up to maybe as much as $6,000.
Mr. Inslee. So it is just a matter of the more tiers we
have, the more difficult it will be, but the closer it will be
to fair market value, I guess.
Mr. Holtrop. Well, I am not, I think the closer it will be
to fair market value, and the closer we will be able to be fair
to each of the cabin owners that somebody is paying similar
amounts of money for similar right on a similar property.
Mr. Inslee. So you would suggest consideration of more
tiers to be closer, then, I take it? Closer to the fair market
value?
Mr. Holtrop. That is correct.
Mr. Inslee. OK. And when you told us that there is a per-
cabin administrative cost of $500 to $700 annually, would that
continue with this tier system? If we have a tier system, would
that expense continue?
Mr. Holtrop. Yes.
Mr. Inslee. Why?
Mr. Holtrop. Because that expense is just the annual
process of managing the program and managing the permits. So it
is visiting the sites, administering the sites to make sure
that the cabin is being maintained in a manner that is
consistent with the permit. It is the billing process. It is
the issuing of the permits when there is a change in property.
There is the paperwork that is associated, that we have to do
in the changing permits, et cetera.
Mr. Inslee. You actually make annual visits to all these
cabins?
Mr. Holtrop. That is, that is our expectation. I can't tell
you for sure that we do, but you know, many of the cabins are
in locations in which there are hundreds of them together in
one subdivision-like area. So in a short number of days you can
visit numerous cabins, and ensure that there is a lot of
consistency in a short period of time.
Again, as I was mentioning earlier, the circumstances are
different, depending on whether the cabin is just being
maintained on a regular basis and there are no changes; or if
there is fuels work that needs to be done on the property
around the cabin; if the cabin owners are looking at adding a
deck, or wanting to put a new roof on, and there are aspects of
those activities that we have to make sure that it is being
done in a fire-resistant manner and continues to be consistent
with the national forest character.
Mr. Inslee. So if you look at the total cost of this
program compared to total revenues right now, what is the net
for the Forest Service?
Mr. Holtrop. Well, the revenues for the program under
CUFFA, we don't get revenues from the program. That goes to
the----
Mr. Inslee. Well, I am talking about the Federal
government. Is there a net positive for the Federal government
on this? Considering the expenses associated with the program.
Mr. Holtrop. Yes, yes. I estimate the cost to administer
the program on an annual basis to be between $8 and $11
million. And the benefits that come from, if we were to
implement CUFFA, the benefits, the value to the Federal
government would be in the $40 to $45 million range. Based on
current amount of appraisals done.
Mr. Inslee. And with the tiers as the bill is currently
structured, could you suggest, are these tiers, you know,
basically the average fair market value? Or are they, if you
add them all up, are they lower than the current fair market
value, or higher? What is your sort of assessment of the
numbers?
Mr. Holtrop. I think at the low end of the tiers, they are
consistent with fair market value. I think at the high end,
under CUFFA we have some, as has been mentioned, there are some
properties that the value of the property is appraised
considerably higher. There was one example mentioned today
where the annual fee would be $17,000. There are a few
anomalies like that.
The number of fees that are greater than $10,000 is a very,
very small percentage of the cabins. But there are like 10
percent of the cabins that would appraise at $6,000 or more on
an annual fee basis.
Mr. Inslee. Thank you. And I love the pin you are wearing
in your lapel there; it looks pretty good this morning.
Mr. Holtrop. Thank you. Would you like one?
Mr. Inslee. Happy Earth Day.
Mr. Holtrop. Thank you.
Mr. Inslee. Happy Earth Day, and thanks for your work.
Mr. Holtrop. Thank you very much.
Mr. Inslee. You know, and I hope that we can pass a Clean
Energy Bill this year so that we have a few trees left in our
national forests, and the beetles don't kill them all. I really
hope that we get that job done. Thanks a lot.
Mr. Holtrop. Thank you.
Mr. Grijalva. Thank you, sir. Ms. Lummis, any questions?
Ms. Lummis. Yes, Mr. Chairman.
Mr. Grijalva. Thank you.
Ms. Lummis. It looks to me like the Forest Service and the
cabin owners might be using two different assumptions to reach
their conclusions about financial implications of the CUFFA
bill.
The cabin owners are assuming that there will be
abandonment if CUFFA continues unmodified. So my question is
this. What assumptions on continued cabin ownership did the
Forest Service use in its projections of receipts under CUFFA?
Mr. Holtrop. In our projections of receipts, we assumed
that all the cabins would continue to be under permit. We did
not assume any abandonment.
Ms. Lummis. OK, that is helpful. That helps explain some of
the differences.
The cabin owners have assumed a loss of 15 percent of total
cabins if CUFFA is not modified. Does the Forest Service have
procedures in place to handle cabin abandonment in the event
that the cabin owners are correct, and 15 percent of those
cabins would be left? And if so, what is the cost to deal with
abandonment, to the Forest Service?
Mr. Holtrop. We do have policies and procedures in place to
deal with abandonment. I don't know off the top of my head, and
would be happy to do some checking to be able to answer the
question about what would be our projected cost of abandonment.
There are various--if the assumption is, and again, we are
not aware of any abandonments that have occurred under CUFFA.
But we have not sought that out. I do defer to the Homeowner
Association's work with their membership to determine that.
I think there are, if a family gets into the unfortunate
circumstance where they can't afford the fee--and again, I
consider that an unfortunate circumstance, for sure. But if
that were to be the case, abandonment, of course, is not their
only option. Selling the cabin is another option. And I do
recognize that this is a difficult market to sell second homes
in, both whether those are on the national forest or elsewhere.
Ms. Lummis. Thank you. Mr. Chairman, one more question. The
appraisal process takes five to seven years, and must be redone
every 10 years, according to existing law. It seems to me that
completion of the appraisal timeline would subject some owners
to the higher fees, awaiting completion.
If that is the case, we would still need to issue
reimbursements. So my question is, how quickly after completion
of an appraisal is the owner subject to paying the new fee?
Mr. Holtrop. It is within a year, in the next year. That is
the fee that we charge, based on the appraisal. Now, but that
is subject to a couple of opportunities that CUFFA provides the
cabin owner to appeal and seek an independent appraisal. And so
that would put that in abeyance while that goes on.
Ms. Lummis. Would it be possible to simply freeze current
fees until the appraisal schedule is complete? And then assign
owners into the appropriate tiers that are outlined in the
bill?
Mr. Holtrop. That would require, that would require
legislation, in my opinion, in order for us to do that. There
are a couple of aspects of the freezing of that I would be
concerned about, just to point out.
One is it would continue the reliance on, for many of the
cabins, on appraisals that were based back in the 1980s. And at
some point in time when we have a more recent appraisal that is
more reflective of the current market value, the longer the
period of time from when the previous appraisal was to the
newest appraisal, I think it is just going to exacerbate the
change in fees over time.
And then the second aspect of a freeze at this point is
recognize that approximately 8,000 of the 14,000 lots have been
appraised under CUFFA. That means 6,000 haven't. And if there
is a freeze on the current appraisal aspect, we would have some
that, there would be, we would be freezing in place some
discrepancy between those cabin owners that have had their
appraisals already done under CUFFA, and those who have not.
Ms. Lummis. OK. Mr. Chairman, one more question in this
round. We have heard from owners in Wyoming that appraisers are
using comparable lots in out-markets that are quite dissimilar.
For example, a lot in Cody was compared to a lot near Pinedale.
And those are very dissimilar in terms of their economic
situation, one being in a very, very active oil- and gas-
producing area, and the one being in more of a tourist area.
And then in some areas, an appraiser is difficult to find.
What is the Forest Service's protocol for establishing
comparable properties and lots when undertaking an appraisal?
Mr. Holtrop. I would prefer to provide that answer in
writing, to make sure that we have all the technical aspects of
that correct. But in general, our protocol is to look for
comparable lots that are as similar as possible. As earlier
questions indicated, there are some difficulties of doing that
when you are dealing with National Forest System lands and
looking for comparable locations that are not on the national
forests.
But the summary of our protocol is we use the best data
available. And if, and sometimes that best data available leads
to a fair market value that is based on lots that clearly are
very comparable; and sometimes it is less, the best data
available may not be as good.
Ms. Lummis. Thank you, Mr. Chairman. And if we have a
subsequent round, I have some additional questions. Thank you.
Mr. Grijalva. Mr. Kildee, any comments, questions?
Mr. Kildee. Just briefly, Mr. Chairman. I believe that we
have a situation here where we can find an appropriate and
reasonable fix for this. And I look forward to working with you
and the Ranking Member to try to arrive at that fix. And I
yield back my time.
Mr. Grijalva. Thank you, sir. Mr. McClintock, questions?
Mr. McClintock. I would just like to offer the observation
that of all the complaints I have about the Forest Service, the
rapid escalation of fees vastly, vastly disproportionate to
inflation or any other rational cost of living scheme has been
number one.
I would just like to offer my strong support of this
measure, on behalf of constituents who are literally being
priced out of cabins that they have been renting for decades.
Mr. Grijalva. Thank you. Mr. DeFazio.
Mr. DeFazio. Just back to the question the gentlelady had
asked about appraisals. I am just not quite clear.
These, the cabins are, I guess if you are looking for an
equivalent in the private sector, not on public lands, it would
have to be something like a condominium. Because, you know,
they don't have right to the land, you know, they don't have a
permanent right. Well, it is not even exactly equivalent to a
condominium, because they have no permanent right to the
dwelling. They have very restrictive covenants in terms of use,
you know, rental, a whole host of things.
So when you do these, I mean, when they do that appraisal
and they look for something that is, you know, equivalent, how
are you doing that? Where are you finding them? Because there
really isn't anything equivalent.
Mr. Holtrop. Well, what CUFFA instructed us to do is base
the appraisal on the value of the land; and that 5 percent is
below what traditionally would be charged on private land. That
lower fee was to make up for the differences in the rights of
the cabin owners on their land. That is one of those areas
where we have had difficulty in reaching agreement with the
cabin owners on whether that is an appropriate approach or not.
But that is our legal interpretation of what CUFFA has required
us to do. So we don't take the reductions in the appraisal. We
do in the 5 percent fee, by taking a 5 percent fee.
Now, there is an exception to that. If we specifically
close an area because of an area closure for fire purposes or
whatever, we do reduce the appraisal of the land based on the
amount of time that the cabin owner is able to use the lot.
Mr. DeFazio. Well, would that take into account a cabin on
a high altitude off of an unplowed Forest Service road in the
wintertime, too?
Mr. Holtrop. No, no.
Mr. DeFazio. That doesn't count. So you figure they are
just going to come in on a snowmobile or something, or ski in.
Mr. Holtrop. Or snowshoes, snowmobile. Or, you know again,
as CUFFA instructed, to only charge 5 percent of the appraisal
value to account for that.
Mr. DeFazio. Can we go back also to the administrative
costs? I am really having a struggle with that. I just don't
see how it could be $500 to $700 per year per dwelling. You
know, you have specific employees detailed to this program who
spend, you know, full time doing it? How long would it take to
look at any individual property or cabin? I mean, if they are
not remote from one another, one would assume that you could do
a large number in a day. And I don't think too many of your
employees are getting paid $500 a day.
So I am bemused. I mean, is this one of those exercises
where we assume that you spend 10 percent of your time, or 5
percent of your time thinking about this program; therefore, 5
percent of your salary counts as overhead, and 5 percent of,
you know, all your staff counts as overhead? And so you work
all the way down in the organization until you actually get to
the person who does the work, who doesn't get paid all that
much, and you say oh, well, the costs of this one lease are
$500 to $700. Is that how it works?
Mr. Holtrop. No. The costs that I am talking about are the
direct costs of the administration of the program. There is
generally--I worked on a ranger district in the Mount Hood
National Forest many years ago, in which there were several
hundred recreation residences on that ranger district. We had a
GS-11 who was pretty much an assistant ranger-level position,
who was pretty much assigned to working on that program on a
year-round basis.
There is not just the site visit and the administration of
the cabins. When there are several hundred cabin owners, there
are many of those who want to do improvements to their lot. And
that requires, under the permit, that requires additional
interaction. So it can take several days of interactions on a
specific permit.
There is also the billing process, and the paperwork
associated with issuing the permits and the paperwork
associated with issuing the billings. And then if there are
concerns or questions about the billings, the visits and the
telephone calls and the response to the questions on the
billing.
Mr. DeFazio. If someone is applying to do improvements, do
they pay for a permit?
Mr. Holtrop. For the permit, the permit allows certain, the
permit with us allows them to do certain improvements. And they
pay for the permit based on the appraisal of the land.
Mr. DeFazio. Yes, no. But what I am saying is if I have,
that is my, that is the routine recurrent cost. If I want to do
another improvement that requires your approval, just like
where I live in a city, I have to apply to the city. They send
out an inspector, and I have to pay a fee that covers, more
than covers the cost of that person's salary. My city makes
money on these things, and use it for other bureaucracy.
So perhaps, you know, you could look at if that is part of
the problem, then maybe for those who aren't doing or requiring
more of your time or your staff's time, to actually have them
pay a fee, just like they would in a comparable situation in a
county or a city because they want to do an improvement.
Mr. Holtrop. We don't have the authority to do that at this
point, but that is one of the solutions. That could be
something we could do.
I believe the cabin owners, if they are going to do some
improvement, there may be in some cases some local government
fees that they have to pay to the local government for some of
that. But that is not for, that is not something that comes to
us.
Mr. DeFazio. OK, thank you. Thank you, Mr. Chairman.
Mr. Grijalva. Ms. Lummis, you had other follow-up
questions? And let me extend to the other Members, if you have
follow-up questions, this would be the time.
Ms. Lummis. Thanks, Mr. Chairman. And I do think Mr.
DeFazio is on to something, so I want to run with that line of
questioning.
County assessors tend to use, at least in my county and
most, I believe, around the country, a computer-assisted mass-
appraisal process, where they have factors plugged into a
computerized mass-reappraisal system that would look at square
footage, quality of construction, market conditions in the
area, as assisting them in appraising.
Now, in areas where a Forest Service-approved appraiser may
not be readily available, so an appraisal that a cabin owner
disputes might not get a visit from a Forest Service-approved
reappraiser that is paid for by the cabin owner for quite some
time, during which time they would be paying a higher fee,
would it make some sense to adopt some of the same principles
as a county assessor uses? To use these computer-assisted mass-
appraisal processes.
Mr. Holtrop. We would certainly be willing to work with you
to explore that option. I do want to point out that those, the
examples that you just mentioned were examples around the value
of the structure, and we are not appraising the value of the
structure.
Ms. Lummis. Oh.
Mr. Holtrop. We are appraising the value of the land.
Ms. Lummis. Oh. OK. And excuse me for misunderstanding
that.
Mr. Holtrop. That is quite all right.
Ms. Lummis. OK. What are the criteria for an appraiser to
be an approved Forest Service appraiser?
Mr. Holtrop. I don't have that information at my
fingertips, but I can certainly get that for you. But there are
certainly requirements that they need to be licensed, and that
they have to be certified by the state in which the appraisal
is occurring.
Ms. Lummis. Mr. Chairman, do they have to be an MAI
appraiser? They don't, OK.
Mr. Holtrop. No.
Ms. Lummis. Wouldn't the Cabin Fee Act just eliminate all
this confusion?
Mr. Holtrop. The Cabin Fee Act has many advantages, in
terms of providing certainty of how much the cabin owners would
be paying on an annual basis over time. It has the advantage of
reducing the uncertainty and the controversy around the
appraisal process.
But there still does need to be some process in which there
is, before the cabins are put into the various tiers, how you
establish which tiers they ought to go in, there has to be some
basis of a fair market value that has to be determined at that
point.
So, but over time, I think there would be many advantages
that would take us out of this. Because you know, 10 years from
now, under CUFFA, we would be doing this again.
Ms. Lummis. Mr. Chairman, if you are just appraising the
land, there is a certain added value, I would think, to the
exclusivity of the setting, in that, you know, you don't have
any neighbors because it is Forest Service land. Does that
factor into these values? Because it is sort of a condition
precedent. It is on Forest Service land.
So if you are, in essence, providing a higher value to the
land because it is so exclusive, and yet by its very nature it
is exclusive because it is Forest Service land, it is pretty
circular.
Mr. Holtrop. Yes. But no, we do not specifically raise the
appraisal value because it is National Forest System land. What
we look for are comparable properties that have, for instance,
if there is, if it is a cabin on National Forest System land,
and it is pretty isolated by itself without neighbors, we are
looking for comparable private sites that would be consistent
with that.
We have many of our cabin owners that the cabins are
actually in subdivision-like settings, as well. In those cases
we are looking for comparable lots on private land that are in
a comparable setting.
Ms. Lummis. OK. And Mr. Chairman, thank you for letting me
ask these questions. This has really cleared up some of my own
misconceptions, so I appreciate your testimony. Thank you.
Mr. Holtrop. Thank you.
Mr. Grijalva. Mr. Costa, you had some follow-up questions?
Mr. Costa. Yes, thank you. The conundrum that you are in,
though, in the example that was just stated, because I know a
number of areas where you have Forest Service land, but you
have some historical event that occurred in which there is
private land that is there. And so when you are, and Doc
Hastings cited a case up in his area, and in Washington we have
a similar case that I am familiar with where we have 90 acres
that is isolated private land, where there are condominiums and
some cabins. And they get fee title to the land, and they
actually own, they own something. But everything around it is
Forest Service land.
So when you are doing a comparable appraisal, it is not
really comparable in the sense that, because people have fee
title to the land, they actually built a dwelling, and they own
it. So I think that is an issue that needs to be reflected
here.
I am also pleased that Congressman DeFazio explained that
some of these are seasonal. I mean, you have maybe six months'
use of the cabin, realistically, because of the remoteness, the
snow conditions, and other factors where they are located.
Getting back to the, I guess bemused was an interesting
description of how you assess these fees. Because in some of
the instances I am familiar with, what the Forest Service has
is an administrative office in the area; they manage the whole
forest, they manage trails, they manage, they rescue lost
hikers. They focus on lakes, and they work with Fisheries and
state and other agencies to plant trout and do all sorts of,
and maintain the campgrounds. There are just a multitude of
efforts. And the cabin owners, when they are adjacent in those
areas, provide value-added in that sense.
But just as I am familiar with that because in this one
area it is seasonal, you have in the springtime a meeting with
the cabin owners. There are two or three hundred cabin owners
in one area. You guys come down; you have two or three of your
guys, you have an hour meeting. You have a notice, everybody is
on the list. These are the rules for this year. On May 30 or
June 15, everybody has to clean their pine needles from their
thing.
I mean, it is a whole, it is not like you are visiting up
in the cabin, and you are saying OK, well you know, I am
checking off this. You have the cabin owners down. And this is
a regular, annual part of the administration. So you are not
going cabin to cabin for 300 cabins. You have them on the mail
list, they get on the mail list. You have got emails. I mean,
there is an association on this track-by-track basis.
So the $500 to $700 per year administrative cost, it just,
I guess the line of questioning that Mr. DeFazio was focused on
I think more accurately reflects what is going on here, as
opposed to what this is really costing. I guess I am trying to
get a sense on how you, the way you do this systematically, to
the degree where you have clusters of cabins located in an
area. Is it not, is that not the way you deal with these
administrative issues?
Mr. Holtrop. It is, it certainly is a way that we deal with
the administrative issues. And I also want to acknowledge, I
agree with you that the value that the cabin owners bring to
the management of the National Forest System.
But there still is, there is on-site visitation that does
occur. I think our process does require our administrators of
the permit process to visit every cabin once a year. There is a
cost associated with traveling to get to the cabins, et cetera.
Mr. Costa. Does a visit include just driving by?
Mr. Holtrop. In those cases in which the cabin has been in
the current state, and has many years of being in sharp
compliance with the permit for years, I would expect one of our
permit administrators to do some prioritizing that that is a
cabin that I don't have to spend as much time on. But if next
door there is a cabin in which they are building a deck or
doing something additional, that is going to take some
additional work by the administrator.
I am told we do have a study that lays out the details of
the cost of administering the cabin program, that we can get a
copy of it to all of you.
Mr. Costa. Please submit it to the Subcommittee and to all
of us. Thank you.
Mr. Holtrop. OK, I will do that.
Mr. Grijalva. Any other Members have follow-up questions?
Mr. DeFazio?
Mr. DeFazio. Just, well, it is more an observation, though
you may want to respond. I am just looking at a list of Oregon
appraisals, and most of them were done in 2007 and 2008, which
would have been the height of land rush hysteria in my state.
And you know, I was just meeting with builders yesterday, and
they were saying well, you can get lots in central Oregon now
for 20 to 25 cents on the dollar for what they were two years
ago.
So I mean, that, you know, most counties, once they have
done a physical appraisal, they then index that to the market.
So they will say well, the market went up 5 percent last year;
we appraised you three years ago; you are going up 5 percent.
Or in this case, the market went down, you know, substantially;
we are going to bring you down.
Do you have anything like that? Or is it just, if you were
appraised at the height of the market, you are stuck with that?
Mr. Holtrop. Both CUFFA and the Cabin Fee Act that we are
considering here today have indicators, and we adjust to the
market.
Mr. DeFazio. OK. After the initial appraisal there is----
Mr. Holtrop. Adjustment.
Mr. DeFazio. So the numbers I am looking at here, you know,
which are quite high, are actually going to be adjusted
downward because of market changes.
Mr. Holtrop. The amount would be based on, the adjustment
is based on IGD/DGB? OK. It is the Department of Commerce
figures that we base the adjustments on.
Mr. DeFazio. For a subregion? For a forest? I mean, you
know, we have seen actual, very substantial, you know, second-
home decreases in prices in real estate in, say, central Oregon
and other parts of Oregon.
Mr. Holtrop. Right. The legislation, the CUFFA legislation,
as well as Cabin Fee Act, are both based on the national
figure. So the concern that you are raising----
Mr. DeFazio. I would love to know what the national figure
says about recreation land over the last 24 months. I would be
very interested. If you could provide that, that would be
great. Thank you.
Mr. Holtrop. We will respond.
Mr. DeFazio. Thank you, Mr. Chairman.
Mr. Grijalva. Any other Members have follow-up questions?
[No response.]
Mr. Grijalva. Thank you, sir. Let me invite the next panel
up.
[Recess.]
Mr. Grijalva. Let me welcome the panelists so that we can
begin. And turn to the Ranking Member, Mr. Bishop.
Mr. Bishop. Mr. Chairman, I just ask unanimous consent to
set into the record letters that we have received from cabin
owners throughout the West.
Mr. Grijalva. Thank you very much. Without objection.
[NOTE: The following individuals submitted documents for the
record, which have been retained in the Committee's official files.]
Cline, Larry A.
Congressional Record (copy), June 16, 2003
Davis, Barry, WY
Fashinell, Thomas R., Owner/Manager, Echo Chalet, Inc.
Howard, Joanne, Board President, Echo Lakes Association
Huber, Charles and Linda, AZ
Johnson, Kenneth C., Cabin Co-Owner, CA
Jossi, Dave, MN
Peterson, Charles, D., CA (Fax)
Prince, Megan, OR
Raben, Debra Dianne, WY
Realtor Summary: Effect of CUFFA permit fees on the Health of the
Recreation Residence Program (letters attached)
Shaw, Randy L., OR
Tripathi, Jay, President, Spring Creek Tract Association
______
Mr. Grijalva. Let me welcome our panel, and begin with Mr.
Anderson, President, National Forest Homeowners Association.
Welcome, sir, and I look forward to your comments.
STATEMENT OF GEOFFREY ANDERSON, PRESIDENT, NATIONAL FOREST
HOMEOWNERS, LINCOLN, CALIFORNIA
Mr. Anderson. Thank you for the opportunity. I am Geoff
Anderson. My family cabin of 50 years is in the Sierra National
Forest in California.
I am a cabin owner, and also the President of the National
Forest Homeowners, which represents recreation residence and
special-use permittees in 98 of our national forests.
Since its inception, the cabin program has met the needs of
the public for recreation opportunities. At present, there are
14,000 cabins in 25 states under this program of non-exclusive,
restricted, and permitted use. These are summer cabins, not
full-time residences.
This program continues to provide quality family-oriented
recreation opportunities, a continuing goal of the Forest
Service, generating substantial revenue per square foot and at
low impact.
Today cabins occupy a fraction of a percent of forest
lands, and generate 5.1 million recreation visitor days each
year. Cabin owners were encouraged by local forest rangers to
join the program well into the sixties. Cabin sites were made
available in primitive, often roadless and remote, areas. Many
are accessible only a few months out of the year, due to
weather.
The original cabin owners were hearty souls. The cabins
were built by hand, using primitive tools and natural
materials. Some hauled with the mule-drawn conveyances of those
days, and some by boat. We constructed our own roads, dealt
with often severe environments, and provided our own services.
Historically the cabins worked in partnership with the
Forest Service. Cabin owners became invested in the forest, and
as such, had great interest in the forest environment. They
were often the first responders to forest fires and medical
emergencies. This was the beginning of the public-private
relationship that still exists today.
Today, many of the cabin owners are descendants of the
original owners. Some are quite elderly. They include veterans,
teachers, civil servants, small business owners, and the like.
Cabin ownership may have changed over time, but the
stewardship and the close ties to the forest environment have
never changed. Cabin owners and their guests, for example,
volunteer their time to fire fuels reduction projects and
rescue services. Educational environmental programs have been
organized and funded by cabin tracts that benefit the public
and help maintain healthy forests.
There are many examples of cabin owner volunteers working
cooperatively with the Forest Service and many nonprofits,
church, and youth groups. An elderly cabin owner in Arizona
hosts docents from the local desert museum every summer. My
cabin has served as a jumping-off site for numerous scouts
seeking merit badges on back-country trails. Local businesses,
state and county governments benefit, too.
The existence of the local lodge, grocery store, and
restaurant is often dependent upon cabin owner patronage.
Resort owners in Huntington Lake, California tell us that if
the 400-plus permitted cabins disappeared, they would be out of
business.
Cabin owners support projects and services which serve
members of the public beyond just the cabin owners. We pay
property taxes, access fees, utility and insurance fees, not to
mention the purchases of staples, improvement and repair items,
all of which benefit the rural businesses and communities.
Cabin owners are valuable resources. Secretary Vilsack has
stated, and I quote, ``It is essential that we reconnect
Americans across the Nation with the natural resources and
landscapes that sustain us.''
Cabin owners, their families and friends are already
connected. They will continue to play a vital role in the
health of our rural communities and our national forests,
furthering the goals of the Forest Service and enhancing public
services and recreation experiences.
Mr. Chairman, I fear this valuable public program is being
threatened. Current cabin owners cannot afford the unreasonably
high fees, and potential purchasers are unwilling to pay them.
Such is the dilemma of a widowed cabin owner in the Angeles
National Forest, whose yearly fee will rise to over $3,600 this
appraisal cycle. A cabin owner in Wisconsin is struggling with
a $7,000 yearly fee. Both anticipate additional fee increases
will drive them from their family cabins. They face making the
choice between selling the cabin or walking away, leaving them
with the costly obligation of removing the cabin and restoring
the site to its natural state.
One might say well, someone else will pay the fee.
Declarations from real estate agents from across the country,
which you were provided today, show that cabin sales are not
down due to the general economic downturn; they are down
because potential buyers will not pay the unreasonable fees,
nor be burdened with even higher uncertain fees in the future
for the restricted use of a small cabin that they may have
access to only a few months of the year.
With such high fees, no one, not even the wealthy, will pay
these fees. The costs simply outweigh the benefits. At Lake
Wenatchee, Washington, in 2007, a cabin owner, faced with a
substantially increased fee, was not able to sell his cabin at
auction, even with a minimal opening bid.
Our members support the Cabin Fee Act, and ask you to
support this legislation. I might add that the particulars of
this bill and the difficulties with the current fee system will
now be addressed by Mr. Almy and Mr. Bailey.
Thank you.
[The prepared statement of Mr. Anderson follows:]
Statement of Geoffrey Anderson, President, National Forest Homeowners
and Cabin Coalition 2 Steering Committee Member
History and Benefits of the Recreation Residence Program
Introduction
I appreciate the opportunity to provide this testimony to the
Parks, Forests and Public Lands subcommittee on an issue of great
concern to recreation residence permittees, their friends and their
families. This testimony has been prepared in conjunction with Mr. Dick
Almy, who has provided an overview of the problem, and Mr. Pete Bailey,
who has detailed the solution. This testimony summarizes the long and
rich history of the Program and the benefits that accrue to the Forest
lands, the rural communities, the public and participants in the
Program.
I am the President of National Forest Homeowners (NFH), which is
the only national organization solely dedicated to representing all
holders of special use permits issued by the USDA Forest Service
pursuant to the Term Permit Act of 1915, 66 USC Section 4971. My wife
and I hold a special use permit for our summer cabin on the Sierra
National Forest at Huntington Lake, California.
History of the Recreation Residence Program
The Recreation Residence Program was arguably the first formal
effort made by the USDA Forest Service (FS) to provide recreation
opportunities for the public on National Forest System land, although
fishing and hunting cabins on these lands date back to the early 1870s,
well before the establishment in 1891 of the Forest Reserves.
With the passage of the Organic Administration Act of 1897, Forest
Reserves were opened to the public with their use regulated by permit.
However, these permits could be reviewed annually and terminated. Cabin
owners needed longer tenure to justify the investment in and the
construction of cabins. The Occupancy Permits Act of March 4th 1915 set
aside land for the construction of summer homes with multi-year
occupancy permits.
Summer cabins have been a part of our nation's forest recreation
program, under Forest Service policies, ever since. At present there
are approximately 14,000 cabins nationally in 25 states and Puerto Rico
under this FS program. At its peak, the Program authorized nearly
20,000 cabins. More than 5,000 permits have been removed from the
Program due to land exchanges and loss of structures from natural
disasters. Many other forest lots originally were designated for
cabins; however, current USFS policy does not allow them to be
developed.
In the early years, the Forest Service supported and actively
promoted participation in the Cabin Program to encourage public use of
our National Forests. In 1919 rangers in the Sierra National Forest
approached frequent campers in the area of recently plotted cabin sites
and solicited applications for Recreation Residence Permits for a $15
annual fee and a 99-year lease. Eileen Davis, a current 90-year-old
permit holder, in a written statement tells of these early days of the
Cabin Program (statement attached as Exhibit 3A). This was the
beginning of the public-private relationship that still exists today.
Forest Service promotional brochures date back to 1918. Interestingly,
as recently as 1962 Forest Service publications promoted the Program
and required that the cabins be ``permanent'' structures (``Information
for Prospective Summer Home Owners'', USFS Intermountain Region
brochure, 1962). Today, land set aside for this purpose is less than 3/
1000th of one percent of all National Forest System lands. Many cabins
continue to be owned, maintained, and enjoyed by the fourth and fifth
generations of the families that built them.
In the early era, families traveled substantial distances in
primitive vehicles over uncertain roads in order to build modest cabins
on roughly quarter-acre forest lots. For many of these tracts, the
means of access today continues to be primitive and may involve a final
trek on foot or by boat. Weather in some forests limits access to fewer
than four months annually. For example, Echo Lakes' tract in
California's Sierra Nevada, not atypically, has three months of access
each year. As utilities and infrastructure became available in some of
these rural areas, cabin owners banded together to provide water
systems, electricity, fire protection and road and trail maintenance.
Others still use gas lights, gas or wood stoves for heat and hand-
pumped wells to provide water.
Many of the cabins were hand built from materials found nearby and
still display period construction methods. In fact, most cabins were
built prior to 1960 and many are classified as ``historic'' under the
National Historic Preservation Act. Most are true ``cabins in the
woods'' and are not in any way equivalent to vacation homes in resort
areas (Francis True statement attached as Exhibit 3B).
Nature of Permit Rights and Restrictions
The cabins may have maintained their historic features; however,
the rights and responsibilities of cabin owners, as noted in the
regulations, (last reissued June 2, 1994, now found in the USDA Forest
Service Manual at 2721.21.33 and Handbook at 2709.22), have evolved.
Interim directives have placed further limitations on use. A few of
these limitations are identified below.
One significant limitation is that the use of the lot is not
exclusive. The general public can access and utilize the lot at will
other than the ``footprint'' of the cabin. Most cabin associations
welcome and encourage other forest visitors, sponsoring interpretive
trails and information kiosks to foster responsible shared use of tract
sites, trails and the forest resources that surround the area. Cabin
tracts can be important buffers between more intensive day uses or
campgrounds and less intensive uses such as backcountry or wilderness
areas.
Permits are limited to a maximum of 20 years. Year-round permanent
residency is not allowed and use as a rental property is on a limited
basis needing prior written approval by the local Forest Service
office, if allowed at all. If an alternative public use for the land is
determined consistent with the FS management plan, then within a 10-
year notice period, the cabin owner must remove the cabin and restore
the land to its natural state. If the cabin owner does not comply, the
Forest Service will remove the cabin and bill the cabin owner for the
expense. Only if the notice is less than 10 years is the owner entitled
to compensation.
Cabin owners are responsible for maintaining their lots, including
the removal of hazard trees both on and off the lot. Erosion control,
removal of non-native species, clearance of excess forest understory to
satisfy fire concerns--all are the cabin owner's responsibility. All
exterior repairs/alterations must have prior approval from the Forest
Service, even if required by another governmental agency. At the end of
a 20-year term, each cabin and lot is evaluated for whether it meets
the local requirements for a new permit. Sometimes the local rules on
acceptable structures--down to the color of the cabin--have changed
since the last permit was issued and burdensome new changes are
required. Typical forest or regional restrictions include limitations
on the size of the structure (1,200 square feet in Region 6), the size
of decks, second floors are not allowed, outbuildings are prohibited
entirely or limited to one or two at the most, fencing is not allowed,
landscaping is prohibited, and the color of paint on the cabin, its
doors and window frames is tightly controlled. It is not uncommon for a
permit to be issued for one year to complete the required changes.
Despite the challenges, the Forest Service and cabin owners have
had a successful long-term relationship, both contributing
significantly to a program that provides for family-oriented recreation
and generates revenue for the U.S. Treasury.
Benefits of Cabin Owner Stewardship
Today, more than ever, the cabin owners and their families and
friends work in partnership with the Forest Service, volunteering their
time and labor to help the Forest Service with projects and services
the general public enjoys. What began as a way in which to encourage
public use of the National Forests has matured into a valuable resource
of knowledgeable Americans who help in the management and stewardship
of those forests. As the Forest Service stated in the Pacific Southwest
Region's Recreation Residence Assessment (June 10, 2009 and updated
November 12, 2009): ``Recreation residences provide for unique, family-
oriented experiences that foster stewardship and volunteerism.
Ownership often spans generations, creating a valuable source of local
knowledge regarding resource issues.''
This established partnership can aid in developing the vision and
direction for our forests that Secretary of Agriculture, Mr. Tom
Vilsack, has described. He has stated in the USDA Department of
Agriculture News Release #0383.09, ``It is essential that we reconnect
Americans across the nation with the natural resources and landscapes
that sustain us.'' Cabin owners, their families and friends are already
making these connections and will continue to play a vital role in the
health of our National Forests.
In order to better understand how cabins are used and how they
benefit the forests where they are located, in 2009 National Forest
Homeowners (NFH) surveyed cabin owners across the U.S. One of the
sections of the survey addressed the stewardship activities of cabin
owners. As documented in this survey, cabin owners help in the
management of the forest areas both in and around their tracts, from
eradicating non-native species, trail maintenance, river rescue and
general clean up to aiding the day use and camping public and
participating in Fire Safe Councils. Further, they work in partnership
with the Forest Service to provide help in manning informational kiosks
for campers and day visitors, in some cases after having helped build
those kiosks. Permittees help with Saturday night presentations at
amphitheaters they helped construct for audiences made up of local
campground visitors. They build and staff local museums of the history
of the areas. Most cabin tracts are located in areas where there are
other types of recreational uses of the forest; in many instances these
cabin communities are the first responders to put out campfires left
burning, help visitors who may be injured or lost, and pick up trash.
Many cabin owners have been coming to their cabins all of their
lives. They know about the local environment from personal experience
and the Forest Service often draws on their knowledge when managing the
area. One example is the relocation of a parking lot that provides
access to a wilderness area, based on input from a cabin owner. In
addition to providing ideas for the relocation, the tract members got
together and helped replant the affected wetland, which now looks as if
cars were never there. Wesley Voth, a cabin owner in Oregon at the
Breitenbush tract in the Willamette National Forest, tells of the
impact that cabin ownership has had in terms of shaping their lives,
including their family values and careers (Voth letter attached as
Exhibit 3C). Wesley shares the lessons learned from spending time at
the cabin and how their cabin is a ``natural classroom in the forest''.
This closeness to the land resulted in his father's choice of career.
Their cabin is a place to share, care for, preserve and teach
stewardship to his children, just as he learned from his parents and
grandparents.
The devastation of recent western wildfires is well-documented. In
the Huntington Lake basin of the Sierra National Forest in California,
a fuels reduction project was established involving cabin volunteers,
the Forest Service, the California Fire Service and local merchants.
Their mission: to cut and remove dangerous trees and brush that
threatened large areas of forest. Over a two-year period, using funds
from the local rural advisory council and the Forest Service and with
labor from the other partners, substantial areas were thinned or
cleared. This provided a buffer between the recreation area and the
Kaiser Wilderness area while also protecting structures, campsites and
businesses from wildfires. As stated by Christine Oberti, President of
the Huntington Lake Association..., ``the significant economic and
cooperative benefit contributions of the Recreation Residence Program
in conjunction with other volunteer organizations is substantial. If
the program is priced out of existence, the Forest Service will lose a
great partner and many auxiliary benefits that make up for the
reduction in appropriated non-fire funds on our National Forests.''
At Echo Lakes in El Dorado National Forest near Tahoe, California,
the Echo Lakes Environment Fund (ELEF) started in 1970 with the
institution of a recycling program for trash generated by cabin owners
and the public. The ELEF has performed numerous back country cleanups.
The ELEF organizes ``walks'' led by various professionals (botanists,
geologists, nature photographers, star-gazers, etc.) that are open to
all comers. They have been very active in the education of cabin owners
and the public on how to live with bears. They also have a very active
youth education and outreach program that includes fishing derbies,
log-rolling contests, nature scavenger hunts and other activities. The
ELEF also provides small grants to students whose research includes the
Echo Lakes area. These are only a few of the examples of cabin-owner
led programs that really benefit their communities, the forests and the
public.
Economic Benefits from Cabins
The cabin owners also have a major impact beyond their stewardship
of the forest. The economic impact of the cabin tracts on the
surrounding communities was also evaluated in the NFH Economic Impact
Survey, conducted in the Spring of 2009. Expenditures in local
economies (defined as within 50 miles of the cabins) on food, staples,
improvements and repairs, recreational activities, and dining out for
the 'typical' cabin average approximately $7,000 annually. An
additional $369 per year is given in donations and our volunteer hours
contribute $303 of value to local communities. Based on these data, we
estimate that each cabin, on average, injects approximately $7,600
dollars into the local economy. At the national level, the impact of
the 14,000 cabins in the program on local economies is over $110
million annually. In many cases, these expenditures are critical to the
economic health and viability of the small, rural communities that
provide products and services to the cabin owners.
For example, the 400-plus Huntington Lake cabins support the local
volunteer fire department with money and manpower. In fact, most of the
emergency services are provided to campers in the public campgrounds
and to motorists utilizing the nearby roads and highways. The loss of
the cabins would mean the loss of these emergency responders and
facilities. Would the Forest Service fill the gap?
Significantly, the local lodge, grocery stores and restaurants
would suffer if the cabin owners weren't there to support them. At Echo
Lake, California, which is an important restocking/communication
location on the Pacific Crest Trail, the store and boat taxi/rental
service owner has stated that 50% of his revenues come from cabin
owners and he would go out of business if the cabins were not there
(statement attached as Exhibit 3D). The local historical museum,
staffed by local volunteers, owes its very existence to cabin owners.
Diminishing the cabin program threatens these and other services and
businesses in this community and in similar communities near cabin
tracts nationwide.
There is also an impact on local governments. Results from the NFH
Economic Impact Survey also show that property taxes, special use fees
and, where applicable, access fees total $2,390 annually for the
typical cabin. This extrapolates to $34.7 million in annual government
fees and taxes nationally. Direct business expenditures for utilities
and insurance cost the typical cabin owner $1,598 each year. Extended
nationally, this amounts to about $23.3 million, much of which benefits
local businesses and utility providers.
Promoting Recreational Access to the Forests
The Forest Service has affirmed the benefits of the Recreation
Residence Program in their Regulations (USDA Forest Service Manual at
2721.21.33 and Handbook at 2709.22), which identify the cabins ``as an
important component of the overall National Forest recreation
program...[that has]...the potential of supporting a large number of
recreation person-days...provid[ing] special recreation experiences
that might not otherwise be available.''
The Recreation Residence Program also provides recreation
opportunities not only to the cabin owners, but to their friends and
families. Based on data from the NFH Economic Impact Survey, there are
over five million visitor days to the national forests annually related
to the Cabin Program. In many cases, cabins provide the very young, the
elderly, and people with disabilities the opportunity for forest
recreation that might not be readily available for them otherwise. In
addition, the storied traditions developed over the long years of the
Cabin Program have fostered strong local communities that really take
ownership and responsibility for themselves and their environment,
something that we don't see very often in more urban environments.
Cindy Langley's grandmother acquired her cabin in Sequoia National
Forest in 1938 from earnings as a waitress in Los Angeles. Every spare
cent was committed to that cabin, which remains to provide a forest
environment for her children, grandchildren, great grandchildren and
their many visiting friends and relatives.
For most cabin owners, the importance of the cabin revolves around
family and the opportunities it provides to multiple generations. In
particular, the experiences afforded by the Cabin Program go a long way
towards preventing today's children from being the last in the forest.
We support the ``Kids in the Woods'' policy espoused by the Forest
Service. A typical cabin hosts kids for 141 visitor days annually; over
68% of typical cabin visits include one or more kids and it is common
for a cabin owner to bring two, three or four along on a cabin visit.
Many cabin tracts provide educational and recreational activities for
kids who visit, such as ecology walks, trail and beach cleanups,
fishing contests, nature scavenger hunts, etc. These activities are
open to all, not just visitors to cabins.
The Importance of the Cabin Fee Act of 2010
Under the current appraisal-based methodology for setting fees, the
concept of a fee for a use has become the concept of a fee for the
land; land the cabin owner uses but never owns yet pays for in its
entirety every 20 years. The availability of this valuable program to
the general public is being threatened by unreasonably high and
uncertain fees.
Current cabin owners can't afford these unreasonable fees. An
example is the 87-year old widow in Arizona's Coronado National Forest
who lives on a pension. Her cabin fees, when fully implemented, will
rise to an amount which constitutes 10% of her income for a residence
she can only inhabit a small portion of the year. She will have to
``let the cabin go.'' Consider the 86-year old WW II and Korean War
veteran who has struggled to keep his cabin on Idaho's Sawtooth
National Forest in the family. The new $8,000 plus fee will be beyond
his means. Similar is the situation of the 67-year old widow in
California's Angeles National Forest who has tenaciously held onto her
cabin to give to her son when she dies. The fee was recently raised
from $479 to over $3400. Neither she nor her son will be able to pay
such yearly fees and will have to leave the cabin that generations of
their family have enjoyed.
Worse still for the future of this program is that there will be no
one willing to purchase these cabins from those unable to pay. We are
increasingly seeing places where no buyers will place themselves in
circumstances requiring the payment of such high annual fees.
A Realtor experienced in cabin sales in Wyoming reports that no
cabin has sold since 2004 and the three cabin owners who have tried to
sell have found that ``...when the buyers find out how expensive the
fees are (or may be) they laugh and then go away.'' (Letter attached as
Exhibit 3E). Another in Idaho reports with respect to the 2008-2009
season, ``With every showing, talks and negotiations faltered when it
was disclosed to the prospective buyers that the possible new annual
fee at Valley View might range from $4,500 to $6,200.'' (Letter
attached as Exhibit 3F). A collection of letters from Realtors across
the country shows they uniformly report that the annual fees and the
process to set them have had a far greater negative effect on the
salability of cabins than the current economic downturn. In many
places, buyers have disappeared entirely, effectively reducing the
cabin value to zero. There is no nexus between the fee that is
established and the privilege/services granted, and the buyers see
that.
The Cabin Fee Act of 2010 will ensure that the Cabin Program
remains affordable, while recognizing the difference in location values
throughout the forests. Further, it will save the Forest Service and
the cabin owners the time and money an appraisal-based method costs us
both. Finally, it provides for fee certainty into the future.
Conclusion
NFH and Coalition 2, a group comprised of a wide range of cabin
owners and cabin association representatives including resource
specialists, teachers, accountants, financial managers, attorneys,
MBAs, business persons, appraisers, real estate agents, former Forest
Service employees and just plain cabin owners, have worked hard to
create a fee determination system that will allow this valuable
recreation program to continue on the National Forests. Many potential
fee setting methods were studied, ranging from fixed fee and
alternative appraisal systems to fee calculation using various indices
and short and long-term lease applications.
The fee determination system proposed in the Cabin Fee Act of 2010
was fully vetted with our NFH membership. Input from cabin owners was
sought through national and regional meetings, email, newsletters and
our website and found to be the best solution. We look to this method
of setting our special use fees as a way to preserve the Recreation
Residence Program for our children, our children's children, and for
the American public.
USDA Agriculture Secretary, Mr. Tom Vilsak, has said ``By using a
collaborative management approach with a heavy focus on restoring these
natural resources, we can make our forests more resilient to climate
change, protect water resources, and improve forest health while
creating jobs and opportunities.'' (USDA Department of Agriculture News
Release #0383.09). Cabin owners, their friends and families represent
the collaborators that Secretary Vilsack is seeking to restore and
maintain forest health for future generations.
One steadfast principle shared by the Forest Service and cabin
owners is the appreciation of our natural resources and the forest
environment. Our continued partnership aids in the management of our
Forests, furthering the goals of the Forest Service and enhancing
public services and recreation experiences where cabin communities
exist. Cabin owners will continue to play a supportive role in the
health of our small rural communities, too (Exhibit 3G).
The Cabin Fee Act of 2010 will promote continued collaboration and
provide for fair fees while assuring that average Americans and their
families, the Federal and local governments, and the American public
will continue to benefit from this unique and valuable program. Please
support this bill and help preserve these treasured and historic assets
for generations to come.
______
Exhibit 3A
Statement of Aileen Davis, Oakhurst, California
My family cabin is the old ``Dresser log cabin'' at Huntington
Lake, California in the Sierra National Forest. The cabin is in the
national register of historical places and visitors from our tract as
well as random hikers often stop by to see its historic features. I am
90 years old and my husband is 93. I have used the cabin since its
construction and we consider the log cabin our family treasure.
In the early 1900's, my family frequently camped in the Huntington
Lake vicinity, and my father, a skilled carpenter, helped those who
were just starting to build rustic cabins in the area. In the early
days it was a long trip from the San Joaquin Valley. In approximately
1919 while camping in the area my father was approached by the local
ranger who seeing there were two young children urged my father to
apply for one of the new cabin sites. We were encouraged to acquire one
for $15 a year in return for a 99 year lease and the right to build and
use a summer cabin. My father acquired the permit in 1921 and built the
cabin over a two year period. Local Lodgepole pine was selected as the
best wood and trees were felled (by permission) and hauled to the site
by mule. Because our cabin is on a steep descent, my father built a
chute down which logs were slid to a level area where the cabin was to
be constructed. They were shaped on site and placed by hand. The cabin
foundation is of Sierra granite, locally obtained, which was dragged to
the site, shaped by hand drilling and blasting, then put in place. That
cabin stands today much as it was originally constructed in 1923. It
was originally a two room cabin enlarged in 1933. It is now
approximately 900 square feet which includes a bath and bedroom. For
years, the only authorized access to the cabin was on foot down the
steep slope; my father built a 70 step stairway to facilitate access. I
can still picture my mother struggling up and down that stairway until
we were required to remove it. We now have a narrow access road which
we built and must maintain, season permitting.
The cabin is heated by a wood fireplace and a wood stove, the
latter used for cooking-a talent passed onto me by my mother. My
husband, a WW II veteran, splits and stacks wood virtually every day
for use in the cabin, and we still open and close and maintain the
cabin. Our use of the cabin is confined to the summer months due to the
weather and the condition of the access roads.
As I reflect over the almost 90 years I have been present at the
cabin, I have many memories. I remember the goat my parents brought up
to the cabin every summer when I was a child-our source of milk as
there was no refrigeration. I remember the joy of sleeping in the
outdoor porch and seeing stars even after the addition was built in
1933 and I was a young adult. I remember first my friends and me then
my two sons, playing with other children in the surrounding forest and
streams. My sons are skilled outdoorsmen having grown up in the forest.
The cabin is often the center of dinners, meetings and conferences
involving various groups and organizations. It has even been the site
of a marriage and Golden Wedding Anniversary. We have tried hard to be
good ``stewards of the forest''. I serve on the local historical
society. My husband and I (as treasurer) participated in the successful
effort to have the nearby virgin wilderness designated the federal
Kaiser Wilderness Area. We have helped maintain forest trails and clear
surrounding areas of brush and manzanita as part of fire prevention
projects.
My husband and I are pensioners and we have been given notice that
the yearly fees for the ``Dresser'' cabin will be $5000! (We never saw
the promised ``99 year lease''). Fee increases have prompted us to
transfer the cabin to our son, a Fresno County employee. However, at
their current level, particularly if the fees continue to rise as they
have, our family will be unable to afford the fees and taxes associated
with the cabin. In such a case, the future for our cabin is bleak. Who
will purchase a 90 year old cabin with a wood stove requiring constant
maintenance and usable only in the summer? If a wealthy purchaser could
even be found I fear that the purchaser would be inclined to destroy
the rustic nature of our cabin by modernizing and updating the systems
we cherish. We are hopeful that Congress will realize the special
nature of the recreation residence cabins and establish fair fees for
permits that will allow cabin owners such as me and my family to enjoy
the cabin for years to come.
Aileen Davis
______
Exhibit 3B
Statement of Francis True, Sawtooth National Forest
The True cabin in the Sawtooth National Forest is much the same now
as when my father Edwin True built the cabin in 1931. My father cleared
the lot himself and built a log cabin from logs harvested from the
forest. It took an entire day to reach the cabin by a Model A Ford.
Then as now, the cabin is a 720 square foot cabin with a sleeping loft.
Water is obtained from a surface water collection system and the septic
system is an outhouse. We have no electricity save what is produced by
a small generator for lights and heat is supplied by a wood stove.
Although we have no winter access, my wife and I, our two children
and our two grandchildren and their guests use the cabin in the winter
months. Even in the summer difficult access road conditions hamper our
access nonetheless we endeavor to enjoy the summer months in a this
rustic environment. I am 86, a retired WW II and Korean War veteran and
my wife and I live on Social Security and a pension. We have always met
our obligations to pay the yearly fee for the use permit even when the
fee reached $3000, a struggle for us.
We have been informed that our new fee will be $8850 a year when
the current moratorium expires. This is beyond our means; this fee is
so high that we cannot even split it between families. I fear that I
will have to transfer the permit and cabin but I question whether the
cabin is even marketable. The cabin is old and rustic, subject to a
high fee and I doubt anyone outside the family would take
responsibility for it considering the high fee and all the restrictions
imposed by the Forest Service.
We currently have a one year permit due to a series of inconsistent
decisions and rulings about the nature design of our outhouse and
issues raised about the presence of a flood plain. Although we are
hopeful that these issues can be resolved and a full 20 year permit
issued, who would pay to take on this responsibility?
My family agreed to serve as stewards of the forest when the permit
was acquired and we have continued to do so for almost 80 years. We are
hopeful Congress will reform the current fee system so that my family
can continue to do so.
Dated February 2010--Francis L. True
______
Exhibit 3C
Statement of Wesley Voth, Willamette National Forest
How the Program that allowed us to build a rustic retreat cabin on
Forest Service/Public land in 1952 changed the course of one
Oregon family's history, but also have CUFFA fee structures
threaten to cut its next generation off from this legacy
My name is Wesley Voth and I am the family member currently
responsible for the fees and permit compliance for the Devil's Creek
Cabin #24 in the Detroit Ranger District of the Willamette National
Forest. I was born in North Portland in January 1952, the first
grandchild of Virgil & Florence Snow who lived next door and who both
came from Oregon pioneer families. That summer they built this cabin at
Breitenbush beside Devil's Creek under what they always referred to as
a 99-year U.S. Forest Service lease. Virgil had worked for many years
as a surveyor for the U.S. Dept. of Agriculture's Bureau of Public
Roads and had watched with concern what happened to ``paradise'' as
roads and development came. The cabin was to be a legacy for me and my
eventual siblings and cousins so that we wouldn't grow up as ``city
kids.'' It turned out to have a much larger effect than that on us all.
We began spending summers at this cabin and as much other time as
possible from the very beginning. My father, Elver Voth, was collage
biology major, planning a career in medicine. Time there got him
thinking about forest issues, and the environmental mindset of my
mother and her parents began to rub off on him. His master's thesis was
a survey of the vertebrate animals of Jefferson Wilderness, an area
adjacent to our cabin and necessitating spending a lot of time there.
Our family would stay at the cabin while he backpacked through the area
and did his research. His doctoral dissertation was on the feeding
habits of an obscure little mammal that loggers call boomers. Later as
a biology professor at George Fox College he was the first in the state
to design a course entitled Ecology, and many of his college field
trips used the cabin as a base. One of my most vivid memories is of him
arguing with a Forest Service biologist in front of the cabin after the
1964 flood. The other man said the destruction was an act of nature,
and my father said yes BUT it pointed out just why logging shouldn't be
done by clear cutting steep hillsides and next to streams. The logjam
in front of our cabin was mostly trees that had been cut miles
upstream--they didn't have the length or root wads to jam up closer to
where they started out. Much to our horror, bulldozers rechanneled the
creek and parts of the Breitenbush River, removing all wood and ruining
the best fishing our family had known. While they were at it, they
channeled most of the creek away from our cabin, something we always
attributed to our family's having protested some of what was being done
in the area.
My most formative childhood experiences were at the cabin and the
area around it. So it was a logical place to go just out of college,
and I spent the winter of 1974 there alone, a virtual hermitage during
which I decided what I wanted to do with my life. The winter in the
forest was healing and enlightening. I hiked throughout the area and
came to know it from an adult perspective. By spring I emerged with a
passion to go to graduate school, begin a family of my own, and
dedicate myself to educating a new generation to care about the earth
and other peoples and cultures.
After graduate school one of my first jobs was in North Portland in
the late 70's, directing a latchkey program for black children. The
first time I took the young teenage staff to the cabin, and then
camping at Breitenbush Lake, I realized the severe disconnect between
their lives and what I had experienced, even though we were born in the
same neighborhood. None had ever been to a national forest or off of
paved roads. This was their land, public land, but certainly no one had
ever informed them, they had no sense of ownership or even welcome.
They asked things like, ``What if someone finds us here?'' I taught
them to sing, ``This land is your land, this land is my land.'' Soon it
became their passion as well as mine to take younger kids camping in
the Cascades, lying out under a night sky with all flashlights off to
gaze into the Milky Way, to quiet fears rather than tell frightening
stories. To find welcome in the embrace of nature and its many voices
and sounds. To help kids catch fish for the first time, to learn about
birds beyond robins and starlings, to watch deer drinking at the edge
of a fog enshrouded lake. To see wild trees in their natural diversity
of age and species.
I haven't the space here to recount similar stories of my siblings
and cousins, who all have their own experiences with the cabin, the
formative events of their childhoods and wanting their own children
connected to it. Or the sizeable circle of friends who have had a part
in its upkeep and legacy. Even if the future generations are city
dwellers, the cabin is the window to non-city life, as we have no
family farm roots. We are all drawn to camping, outdoor pursuits and
remain connected to the forest, enjoy eating huckleberries and wild
greens, knowhow to build and put out a fire, keep a sanitary camp,
fish, clear a rockslide or downed tree out of the road, not get los,
clean up after themselves-lessons learned from time around the cabin.
It is a natural classroom and testament to a bit of wisdom and we have
benefitted from this arrangement, and I believe the nation has as well.
There is a problem however. One of the characteristics of our
family with its Quaker and Mennonite heritage is that it lives simply.
Doesn't go in for luxuries. Doesn't spend money on vacations or travel
other than to see family. We would never have had this transforming
experience if it hadn't been for its low cost. Our cabin should be send
for what it is, a rustic retreat rather than a luxury holiday home, on
land held in public trust because of intrinsic rather than commercial
value. We have been able to cover fees to date by passing the hat among
us, but now the amount may triple. I don't understand appraising this
land as anything other than forest, and forest from which the
marketable timber has already been harvested. I don't understand paying
the full commercially appraised value over and over every twenty years,
which would amount to three times over the nearly 60 years we have used
it. I don't want to own this land-it is public, and should remain so.
We are limited in the ways in which we can use it, and none of these is
incompatible with trees growing back in the density it was before
harvest, a time I still remember well.
If the new fee structures are fully implemented our family will
have to abandon this treasure, especially as my generation retires and
the next will come to view it as a luxury/burden. This family and the
world it touches will become more citified as a result.
So thank you to those wise and foresighted enough to create and
preserve public lands and wilderness, programs to encourage their
sustainable use, the political will to preserve some of what has always
been here so that it always will be. It is a truly wonderful and unique
place, positioned as it is on one of the divides between what is left
of the great western primeval forest, and former forest lands turned
into Douglas fir farms with their rows of identical trees. Time there
does transform people, as we can attest.
So, if you have made it this far you will know this is not
primarily a complaint but a thank you. A very opinioned but heartfelt
thank you for having improved the quality of our lives so immeasurably.
And a plea to whomever will listen to value and protect these lands and
programs for the good of all, and not just for those who could afford
cabins anywhere.
So, on behalf of my grandparents, their three children and spouses,
my generation-12 grandchildren and their spouses, more than 20 great
grandchildren and their growing number of spouses and soon to be an
even more sizeable next generation, plus ion-law families and more
friends than we would have ever had without this cabin:
In humble gratitude,
Wesley Voth, 11796 Hwy. 36, Mapleton, OR 97453
______
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Grijalva. Thank you, sir. Mr. Richard Almy, cabin
owner, Seattle, welcome. I look forward to your comments.
STATEMENT OF RICHARD D. ALMY, CABIN OWNER,
SEATTLE, WASHINGTON
Mr. Almy. Thank you. Good morning. Thank you for the
opportunity to speak with you today.
My name is Dick Almy, and my family's cabin at Lake
Wenatchee on the Okanogan and Wenatchee Forests in Washington
State is the cabin to which Mr. Anderson referred to a moment
ago.
I will be talking about how the Cabin Fee Act of 2010, or
the Act, can remedy problems cabin owners face regarding how
cabin fees are determined for the Recreation Residence Program.
This program is a longstanding valid use of the national
forest, but is being threatened by the fee-setting process
under the Cabin Fee User Act of 2000, commonly referred to as
CUFFA.
The current use of fee-simple land appraisal to set value
has not worked for over 40 years. The current use of fee-simple
land--excuse me. Illustration 1C on page 9 of my written
testimony summarizes a comprehensive recreation land-lease
study, and shows that the fees under CUFFA far exceed the
national average for similar uses, whereas fees set by the Act
better reflect market rents.
The relationship between cabin owners and the government is
complex due to the interdependent equity interests, whereby the
permittee owns the cabin, whereas the government owns the land.
Both location and cabin influence market rents and sale prices.
And separating these two influences is both difficult and
subjective.
The Act, which is supported by 93 percent of cabin owners,
acknowledges the real nature of the program, with
interdependent interests, and offers a new and badly needed
approach. The Act will simplify and improve the fee-setting
process. It will encourage better relationships with the Forest
Service, and reduce administrative workload and expenses.
The Act institutes a reasonable annual user fee that
incorporates the influence of cabin location by establishing a
transfer fee upon sale. The Act provides fair compensation to
the U.S. taxpayer, while recognizing that cabin owners bring
value to the land and the location at their expense. Cabin
owners must maintain the site, remove dangerous trees and non-
native vegetation, and they often provide and pay for utility
infrastructure, including power, water systems, septic and
sewer systems.
Illustration 1D on page 9 compares the Act to the current
fee-determination process as implemented through CUFFA. Our
conclusions through this analysis include the following.
The data indicates that almost 35 percent of cabin owners
will reach their affordability break point in the current CUFFA
cycle. When these folks can't sell, we estimate roughly 15
percent, a comment mentioned earlier, of cabins, or roughly
2100, will have to be torn down or removed at the owner's
expense. U.S. Treasury revenue loss will be approximately 30
percent of total revenue, or around $12 million, while state
governments, local governments, and communities will suffer.
Cabin losses will also reduce donated labor and forced
stewardship provided by cabin owners.
The Act establishes an affordable user fee, indexed
annually, that helps maintain cabin value, and does not destroy
the ability to sell the cabin if the current owner chooses not,
or cannot, pay the fee. Instead of fees ranging from $125 to an
astonishing $76,000 annually under CUFFA, the annual user fee
will range from $500 to $4,000 per year.
A transfer fee will capture any value influence of the
cabin lot's location on the national forest, and is paid if
that value is actually realized upon sale. This fee addresses
the possibility of unwarranted profits, which is an issue you
heard from Joel Holtrop just now.
Cabin owners will have full knowledge of the indexed annual
user fee, and both the seller and buyer can factor the transfer
fee into their pricing at the time of sale.
The Act provides comparable long-term annual revenues to
the U.S. Treasury after consideration of cost savings by
elimination of appraisals and revenue lost from abandoned
cabins if CUFFA stands unchanged. Eliminating appraisal costs
will save the Forest Service nearly $1 million annually. The
complexity and expense of the appraisal process is replaced
with a cost-effective fee system, and program administration
will be simplified and adequately funded from fees retained to
cover costs.
Mr. Chairman and members of the Subcommittee, the Act is a
solution that works for all parties.
In summary, the Cabin Fee Act of 2010 ensures the long-term
viability of the Recreation Residence Program, and produces
cabin permit fees that are affordable and determined by the
cabin market; are simple, understandable, and predictable; are
revenue-neutral, maintaining current revenues, and a fair
return to the U.S. taxpayer; address complexities of
independent ownership interests; impose fees when benefits are
actually received; and maintain the ability to sell cabins.
We ask for your support of this legislation. Thank you.
[The prepared statement of Mr. Almy follows:]
Statement of Richard D. Almy, Past President, Lake Wenatchee Homeowners
Association, Former Director, National Forest Homeowners, Member, Cabin
Coalition 2
Recreation Residence Permit Fees on the National Forest
Introduction of the Problem
In the late 1960's, the Forest Service revised their rules for
establishing fees for Recreation Residence special use permits from a
flat fee to a fee based on the appraised value of the lots, multiplied
by 5%. Since that time, all three intervening appraisal cycles have
resulted in repeated problems and numerous cabin owner appeals.
Congress has been approached before to address the severe impact of a
flawed fee-setting process.
The current process for determining a fee for the right to own and
use a recreation residence on National Forest System land does not
reflect the value of what is actually received. The Cabin User Fee
Fairness Act of 2000 (CUFFA) was drafted with the intent of
establishing a fair fee by including the permit restrictions in the
appraisal valuation of the lot. The sponsor of the legislation, Senator
Larry Craig reaffirmed this in his letter to Undersecretary Mark Rey on
July 2, 2008. However, the law, as enacted, allows for a Forest Service
implementation that ignores the negative impact of the restrictions. In
short, CUFFA fails to value the actual use.
Senator Craig: ``As original sponsor of the Cabin User Fee Fairness
Act, I would like to bring to your attention some problems in its
interpretation that are having adverse impact on some special use
permit holders. Because of the Forest Service's exclusion of some
property attributes, cabin lot appraisals are being made that seem to
be much higher than the market values of such properties should be.''
``I believe the text of the law is clear, and it was definitely my
intent, to ensure the fair and consistent appraisal of cabin values in
order to set cabin use fees using relevant market factors. The lack of
an open market for these special use cabins is an obstacle for setting
an appropriate fee, but the law's text as well as basic common sense
can shed light on what market factors to consider and what the
appropriate end results should be. Unfortunately, current Forest
Service protocol evidently does not adequately consider the myriad
restrictions in force on the appraised lots, which are market factors
that would depress the valuation of these lots on the open market.''
An often heard argument, in support of the current fee
determination system under CUFFA, takes the position that, even with
very high fees, some cabin owners can profit enormously at the time of
sale. They argue that the profits are due to the location of the cabin,
rather than the structure. It is said that high annual fees compensate
the U.S. Taxpayer for those sale profits. In effect, the cabin owner
pays a higher than market annual fee to adjust for a projected future
profit. This logic assumes that a cabin can sell regardless of the fee.
However, market evidence does not support this conclusion. Cabins in
forests across the nation are currently finding no buyers because of
the high fees and the uncertainties about the fee setting process. The
loss of cabins due to unaffordable fees and the inability to sell is
real and the consequences are severe (Exhibit 1A, Realtor Summary).
The many conditions and restrictions (Exhibit 1B) imposed by the
permit and Forest Service guidelines are excluded from the appraisal
valuation process and, the Forest Service argues, are included in the
historic 5% multiplier that is applied to the fee simple appraised lot
value to set the annual fee. The appropriateness of this 5% multiplier
to fee simple valuation remains unsupported by the Forest Service and
does not adequately adjust for the limited term of the permit, a
limited bundle of rights, the lack of investment risk to the U.S.
government, nor the substantial differences between the cabin program
and other public and private markets in determining a fair market value
for this use. There is a vast difference between the bundle of rights
held by an owner of property in fee title and the handful of privileges
and significant liabilities a cabin owner confronts under the terms of
the Special Use Permit. The Comparison of Recreational Home Site
Leases, a National Forest Homeowners study completed in January 2010
(Exhibit 1C), clearly confirms this point and further demonstrates that
CUFFA-determined cabin fees far exceed ``market'' rates when compared
to similar leased (or permitted) recreation land uses. The Cabin Fee
Act of 2010 (CFA), in contrast, would establish rates that more fairly
reflect ``average market rates and revenues''.
The appraisal process that was employed before CUFFA 2000 and
appraisal results under CUFFA have resulted in unfairly high fees.
CUFFA was purportedly the answer, but resulted in the same old process.
It was not an improvement. Cabin owners are not complaining about
having to pay higher, -based fees, but do object to unfairly high fees
determined by a flawed fee-setting process under CUFFA.
The Economic Impact Survey, Final Report, National Forest
Homeowners, April 2009, demonstrates that the vast majority of cabin
owners are middle class. Survey data confirms that there are many cabin
owners with annual CUFFA fees starting at $5,000 and they go up from
there. These folks are not wealthy and very much fit the picture of
average Americans. The mischaracterization of cabin owners as wealthy,
which is sometimes heard and based on some very high profile
exceptions, diverts the conversation away from the real issue, which is
appraisal subjectivity and the extreme variation in annual fees under
CUFFA, that range from $125 to $76,000 for a recreation residence
permit holder's restricted use of public lands. Furthermore, an
individual's financial status or ``ability to pay'' should not be the
litmus test for determining a fair fee for a use, as has been often
heard. In fact, such an argument carried to its logical conclusion,
implies eventually that only the very rich would have access to these
cabins. Illustration 1A demonstrates these concerns.
The data in Illustration 1A were provided by Ted Freeman, Chief
Appraiser of the Forest Service (Feb. 2010). They are from current
CUFFA appraisals, representing approximately 44% of the nearly 14,000
recreation residences nationally. Of these completed appraisals
(6,727), more than 35% have seen fee increases of 200% or higher. Also
notable is that 19% of the new fees exceed $5,000, 8.5% exceed $7,000
and 3.7% exceed $10,000.Over 29% are at or above the national
breakpoint. These very high fees have resulted in cabin owners
requesting and paying for second appraisals. In many cases, these
second appraisals have produced results considerably different than the
original appraisal, demonstrating the inconsistencies and subjective
nature of this process.
An example of this occurred near Wilson, Wyoming on the Black
Canyon tract (Illustration 1B). The initial CUFFA appraisal resulted in
an annual fee of $27,250. The second appraisal, paid for by the cabin
owner ($4,000), resulted in a fee of $19,250. In this case, the
District Ranger decided to average the two for the final fee
determination of $23,250. Regardless of which appraisal is used, either
of these fees is clearly unaffordable and has completely depressed any
sale possibilities at Black Canyon. In this example, the consequences
of the appraisal process and the vagaries of CUFFA are devastating to
these cabin owners.
When annual fees reach the $4,000 - $6,000 range, the affordability
and desirability of the Program for many cabin owners is lost,
especially considering that many of these cabins have limited seasonal
access (some less than three months) and limited or no utilities. (Some
cabin owners must even carry their human waste home with them!) If an
owner is forced to sell, we often find that the high fee can depress
the sale price of the cabin. In some areas, these high fees have
already made cabins unmarketable. The short story is, the costs
outweigh the benefits and no buyer (however wealthy) is inclined to buy
a cabin facing such fees. The May 2007 auction at Lake Wenatchee
resulted in no bidders at an opening price of $50,000. Also, we often
hear that people of wealth did not become wealthy because of poor
financial decision making. Furthermore, as fees keep escalating and
marketability dries up, a perverse incentive is created to stop
maintaining or investing in the cabin. This incentive is not in
anyone's interest.
We believe that without change to the current fee-setting
mechanism, that at least 15% of cabins (2,100) will be lost due to the
inability to sell and inability to afford the fee. This cabin loss
would lead to a 30% loss of revenue ($12M) to the government, because
it is those cabins with ``higher than market'' fees that will be lost
(refer to illustration 1A) and this is only in the current appraisal
cycle. What will the consequences be in the next round of appraisals,
if the flawed fee-setting process is allowed to continue? Will another
15% of the cabins be lost when those owners are unable to sell? We
believe the very existence of the Recreation Residence Program is
threatened.
Though certainly well intended, CUFFA failed to achieve a
consistent and fair fee determination process. Congressional action is
necessary, particularly in these times of economic stress and strain,
to correct the problem once and for all and sustain the opportunity for
family-oriented recreation through the Recreation Residence Program. In
the absence of such action, the Recreation Residence Program will
dwindle and family legacies will be lost. The demonstrated Program
benefits for the public and Forest Service will also be lost and forest
stewardship by cabin owners eliminated. We seek Congressional support
to re-evaluate the fee-setting process and enact the Cabin Fee Act of
2010 (CFA) that comprehensively addresses these concerns with
objective, fair and appropriate solutions and avoids the consequences
of doing nothing.
Deficiencies of the Appraisal Process or ``Why CUFFA doesn't work.''
CUFFA attempts to define ``market value'' within the appraisal
process. However, the process compares the permitted cabin lots to fee
simple ownership of land, effectively ignoring the negative
restrictions imposed by the permit and its inherent risks. This
approach results in an inflated ``market price'' for such a restricted
use. The 5% factor, said by some to appropriately adjust for the
restrictions, is not sufficient. Simply changing the percentage will
not produce fair results, either. The 5% factor results in cabin owners
paying for the full fee simple value of the land every 20 years, but
never owning the land. Interestingly, we have heard field comments made
by Forest Service appraisal staff that the 5% factor is probably too
high. However, lowering it still does not solve the problem overall and
would substantially reduce program revenues.
A fee that is based on a lower percentage may be fair at the high
end but unfair at the low end. Conversely, a fee that may be fair at
the low end will result in a fee that is unjust at the high end.
Commonly, the geographic proximity of resort areas unfairly results in
high fees for modest cabin tracts. The Comparison of Recreational Land
Lease Study clearly demonstrates that the CFA produces above ``average
market revenues'' for similar leased (or permitted) recreation land use
and that CUFFA fees far exceed ``market'' rates as depicted in
Illustration 1C.
An appraisal paradigm has many deficiencies. Below is a short list
of a few of the more important deficiencies of the appraisal process.
These deficiencies add to administrative headaches for the Forest
Service and cabin owners alike.
It does not provide adequate adjustments for severe use
restrictions that are imposed by the term special use permit and
Regional and National FS guidelines.
It is a subjective process using opinions of value that
vary from one appraiser to the next. How rigorous the process varies
Forest to Forest, based on an individual's interpretation of the data
and attitude toward the Program. Upon second appraisals, District
Rangers can choose the original appraisal, the second appraisal or
something in between. We have seen examples of all these responses.
It fails to account fully for the limited season of use
in many areas. Some cabins become accessible only after July 4th and
heavy snow can fly in September. Others are adjacent to lakes with dams
and face serious drawdowns beginning in September, resulting in a less
desirable location.
It requires vast amounts of time and preparations both by
the cabin owner and the Forest Service. Commonly, 20 to 40 page
documents have been prepared by cabin owners to present to contract
appraisers, as preparation for the appraisal. Add to this that the
appraisal process itself, within a given Forest, often takes over six
months to complete. The personnel and time costs are high.
The process often requires repeat appraisals that lead to
questionable conclusions. A glaring example just occurred on the
Okanagon-Wenatchee National Forest, where implementation of the 1990's
appraisal has been completely withdrawn due to lack of supporting
documentation. We now have cabin fees around the nation being based on
appraisals from the 1970's, the 1990's and the 2000's. This is not a
system that is ``fair'' or ``works''.
The entire appraisal cycle takes five to nine years to
implement and must be repeated every ten years.
The process is expensive, costing nearly $1M annually.
The fact is that the ability to build and occupy a cabin on public
land is subject to the requirements of a Term Special Use Permit. The
cabin structure itself is the cabin owner's only property interest. The
land remains owned by the public under the management of the Forest
Service. A cabin owner does not have any sort of leasehold interest in
the underlying land. Therefore, using a land value appraisal process to
value the use of the land is a questionable process and poor
application of logic.
Congress has recognized cabins as an appropriate and authorized
recreational use since at least 1915, as one among many multiple uses
of the National Forests. Most cabin owners are middle class and have
small cabins (many are 800--1,200 sf) that are used as a family
gathering place to pass on to children and grandchildren an
appreciation for the outdoors, a connection to nature and good forest
stewardship. The Recreation Residence Program provides an opportunity
for members of the public to have cabins on the National Forest, but
excessive and inconsistent pricing of this opportunity using the
procedures under CUFFA is undermining the very purpose of the Program.
CUFFA does nothing to further the availability of the Program to the
general public or maintain long-term public interest and, we believe,
puts the Program on a path to extinction.
Over 95% of cabin owner respondents to the 2009 NFH Cabin Sales and
Appraisal Survey said that they were dissatisfied with the appraisal
process under CUFFA. Concerns about the failure of CUFFA are
nationwide. Also recognizing the problem, many Forest Service
representatives in the field have suggested we seek legislative change
to address the failure of CUFFA. Mr. James Sauser, USFS Region 6
Special Uses, has been quoted in news articles about the failures of
the appraisal process: ``The appraisals are time consuming and result
in fees that are either too high or too low.'' (The Seattle Times,
Sept. 9, 2009.) Finally, the 10-year appraisal cycle can take five
years or more to implement. In fact, due to Forest Service budget
deficiencies, the process in Region 5 is expected to take nine years to
complete according to the Recreation Residence Assessment provided by
the Pacific Southwest Region. Change is needed! We believe that
constructive change is exactly what the CFA is all about.
Goals and Principles of the Cabin Fee Act of 2010 (CFA).
The relationship between cabin owners and the government is complex
due to interdependent equity interests; the cabin owner owns the
structure and the government owns the land. When a cabin is sold, both
the land (location) and the structure influence the selling price.
Separating these two influences, or equity interests, is difficult and
subjective. There is no simple or absolute answer. The CFA, which is
widely supported by cabin owners, acknowledges the difficulties of
setting a Program with shared interests and offers a new approach!
The CFA institutes a predictable and affordable annual fee while
addressing the location factor by establishing a Transfer Fee upon
sale. The fee-setting process in the CFA acknowledges the need for fair
compensation to the U.S. taxpayer. It also recognizes that cabin owners
contribute to land and location values at their expense. In complying
with the terms of the permit, cabin owners are responsible for removing
nearby diseased or hazard trees, noxious and non-native vegetation and
nearby wildfire fuels. Utility infrastructure, provided by the cabin
owner, becomes part of the land, including water and sewage disposal
systems. Further, on many Forests, cabin owner-purchased water rights
are reverting to the land and government ownership!
The goal of the CFA is to ensure the long-term viability of the
Recreation Residence Program.
To achieve this goal, the following basic principles guided and
informed the writing of the CFA. The fee determination process for
Recreation Residences on National Forest System Lands, as embodied in
the Cabin Fee Act of 2010, must provide:
1. For the long-term viability of the Recreation Residence
Program.
2. An affordable, but ``market-determined'' fee now and in the
future for average Americans.
3. A simple, understandable and predictable fee determination
process (fee certainty).
4. A revenue neutral process, that maintains current government
revenues and guarantees a fair ``market'' rate of return to the U.S.
Taxpayer for the use of public lands.
5. A mechanism to address the complexities of shared interests in
the Program, both on an annual use basis and upon sale of a cabin. An
understanding of mutual shared interests relative to ``location'' must
be a central and guiding consideration.
6. For fees that are imposed when actual benefits are received.
This applies both for the annual use and upon sale, when the actual
market for cabins on National Forest System lands reveals the actual
market value and the financial wherewithal is available to pay the
Transfer Fee.
7. For maintaining the ability to sell cabins at a fair and
reasonable price.
If the Cabin Fee Act of 2010 (CFA) becomes law, we submit that the
following Program benefits will be greatly enhanced and encouraged.
Merits of the Cabin Fee Act of 2010
1. The documented and extensive forest stewardship work of cabin
owners will be allowed to continue and be encouraged to expand on local
Forests.
2. The opportunity for genuine partnerships with the Forest
Service will be further encouraged and enhanced through collaborative
dialogue, thereby improving the overall process of administration and
removing a material cause of conflict between the local Forest Service
and cabin owners.
3. Program administration will be simplified and adequately funded
from fees retained sufficient to cover Forest Service costs.
4. Sorely needed revenue streams to state and local governments
will continue unabated.
5. Support for local businesses and local employment will
flourish, as cabin owners continue their regular patronage of nearby
businesses, ensuring the viability of local rural communities.
6. The U.S. Taxpayer are guaranteed a fair market revenue stream
for the limited use of their public lands.
7. The significant time delays of implementation are avoided.
8. The windfall profits issue is eliminated.
Refer to Illustration 1D, Comparison of the Cabin Fee Act to the
current fee determination process as defined by CUFFA.
Comparison of CUFFA to the Cabin Fee Act
Loss of Cabins: The Sales Data and Appraisal Survey data show
almost 30% of cabin owners will reach their breakpoint of affordability
in the current CUFFA appraisal cycle. When these folks can't sell, we
estimate roughly 15% of cabins (2,100) will have to be torn down or
removed at the owner's expense. U.S. Treasury revenue loss will be
approximately 30% of the total potential fees ($12M) while local
governments and communities will suffer. Cabin losses will also reduce
donated labor and high quality forest stewardship provided by cabin
owners.
Reasonable Annual Fee: The CFA establishes a User Fee, indexed
annually from a rank order of current market data, but sets the fee at
an affordable level that helps maintain cabin value and does not
destroy the ability to sell the cabin if the current owner cannot or
chooses not to pay this new fee.
Annual Fee Range: Instead of fees ranging from $125 to the
astonishing $76,000 annually, the User Fees will range from $500 to
$4,000 per year.
Transfer Fee: A Transfer Fee will capture any value influence of
the cabin lot's location on the National Forest and is paid if that
value influence is actually realized by the sale. This fee addresses
the possibility of windfall profits, which is an issue raised by the
Forest Service.
Predictability: Cabin owners will have full knowledge of the
indexed annual User Fee, and both the seller and buyer can factor the
Transfer Fee into their pricing at the time of sale.
Administrative Process: The complexity and expense of the long,
drawn out appraisal process is replaced with a cost effective and
simple fee-setting system; and Program administration will be
simplified and adequately funded from retained fees sufficient to cover
Forest Service costs.
Program Revenues: The CFA provides comparable long-term annual
revenues to the U.S. Treasury after consideration of cost savings
related to elimination of appraisals and revenue not collected from
cabins that will be lost from the Program if CUFFA stands unchanged.
Cost Savings to Forest Service: In addition to reducing the
administrative workload, all appraisal costs are eliminated. This will
save the Forest Service nearly $1 million annually, plus the Forest
Service will retain revenue from fees sufficient to cover the cost to
administer the Program.
The Act is a solution that works for all parties.
Summary and Conclusions
The Recreation Residence Program is threatened. Thankfully,
Congress has already made the commitment to the health of the Program
by recognizing it as a valid use of the National Forests. The failures
to correct the problems with the fee determination system have only
recently been exposed under the current appraisals. Congressional
action is therefore needed.
The Cabin Fee Act of 2010 offers a new approach that will simplify
and improve the fee determination process. It will encourage local
partnerships, collaboration and dialogue with the Forest Service while
reducing the administrative burden and government expense. We are
committed to a new direction and ask for your support of the Cabin Fee
Act of 2010.'
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Realtor Summary: Effect of CUFFA Permit Fees on the
Health of the Recreation Residence Program
Cabin owners in many parts of the country are having difficulty
selling their cabins. It has been said that cabins are not selling due
only to the current downturn in the real estate market. This is an easy
answer with little need for justification because everyone knows the
market is at historic lows. However, this fails to acknowledge the
impact of unreasonably high fees on the Recreation Residence Program.
To get an understanding of this impact, we contacted real estate
professionals across the country to get their perspectives about cabin
sales on Forest Service lands under the CUFFA appraisal process. Their
letters are attached for your consideration.
These letters come from Arizona, California, Idaho, Montana,
Nevada, Oregon, Washington, Wisconsin and Wyoming. The collective
experiences clearly demonstrate that the current and anticipated high
fees are unreasonable and negatively impact the ability to sell cabins.
If current cabin owners cannot pay the fees and potential buyers are
unwilling to pay them, cabin values and program revenues will decline.
Long-term, these unreasonably high fees will threaten the very
existence of this valued and valid program for family-oriented
recreation.
Respectfully submitted,
National Forest Homeowners and Coalition 2
Letters attached from the following real estate professionals:
Everett J. Jones, Jr.; Everett J. Jones, Real Estate, Inc., Douglas, AZ
Carol Butler, Broker Owner; American River Canyon Realtors,
South Lake Tahoe, CA
Lori Akers, Realtor; Century 21 Jeffries Lydon, Chico, CA
Lynn Morton, Broker; Sierra Crest Real Estate, June Lake, CA
Patty Schwartzkopf, Realtor; Coldwell Banker Mammoth Real Estate,
Mammoth Lakes, CA
Chucker Twining, Broker Associate; Prudential California Realty, Twain
Harte, CA
Jason T. Roth, Associate Broker; Coldwell Banker Conklin & Company,
Ketchum, ID
Elinor Williamson, Realtor; Clearwater Montana Properties, Inc., Seeley
Lake, MT
Marianne Pearsall, Realtor; Coldwell Banker Select Realty, Incline
Village, NV
Linda Barron, Broker; Cascade Realty at Crescent Lake, Crescent Lake,
OR
Craig E. McKern, Appraiser, P.C.; McKern Appraisal, Eugene, OR
Barbara Bailey, Associate Broker; Puget Sound Real Estate, Tacoma, WA
Scott McKinney, Broker; McKinney Realty, Cable, Wl
David Veihman, Owner/Associate Broker; Jackson Hole Real Estate
Associates,
Jackson, WY
Ellen Linn, Associate Broker; Jackson Hole Real Estate Associates,
Jackson, WY
______
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Conditions and Restrictions Affecting
Recreation Residence Special Use Permits
Application to all permittees:
The use of the cabin lot by the permittee is not
exclusive. The only portion of the lot to which a permittee has
exclusive use is the area underlying the cabin. The general public is
free to use all land not physically occupied by the cabin.
Can only obtain a permit for the right to keep
improvements on Forest Service land for a maximum term of 20 years.
Permit termination can be made for another use during
that term, unlike a lease whose term is definite.
In the event of permit termination by the Forest Service
for some other use, although fees are ramped down, the improvements
must be entirely removed at the expense of the permit holder. This
expense is complicated by the remote nature of the cabins. As a result,
loans to finance the purchase of a cabin are nearly impossible to
obtain.
In the event that the Forest Service determines it needs
the lot for another use, termination can happen in less than 10 years,
resulting in a payment to the permittee of the ``equitable''
(determined by the Forest Service) value of improvements but avoiding
the permittees' expense to remove those improvements.
Notwithstanding the non-exclusive right to use the lot to
which the cabin is connected, the permittee is responsible for both on
and off-lot liabilities, such as the removal of hazard trees.
A cabin cannot be the permanent residence of its users.
Neither can one be rented out except for a minimum time period, and
then only after prior approval of the permit administrator.
In the event of substantial damage or destruction,
rebuilding is not assured. A new determination is made as to whether a
new cabin should exist on that site, and it may take years before a
decision is made. Further, there is an option to provide an alternative
location, but such option is limited and entirely left to the permit
administrator's philosophy about recreation residences.
The permit is never transferred. A new owner must apply
to the Forest Service after the Bill of Sale is completed for a new
permit. A cabin owner during the sale process cannot make binding
representation that the Forest Service will reauthorize the use.
If the recent changes to the permit prevail, the permit
will be considered a 'license' and not a contract. In addition, all
water rights held by the permittees are of questionable ownership.
Rules are changed without notice or permittee input.
Permit fees set by capricious and unpredictable process
that often create undue stress and render cabins unmarketable.
Permittees subject to O & M plan specifications that do
not apply in private market.
Regional and Local Forest and/or Ranger Restrictions (vary from
location to location):**
Limit on size of cabin, varies region to region (900-1500
sq. ft.).*
Limit on size of deck, porch/patio, varies region to
region.*
Cabin may have an open loft, but a full 2nd story is not
permissible.*
No guest cabin or auxiliary sleeping quarters.* One
outbuilding for storage allowed, limit on size & varies by region.*
Reconstruction or alteration of improvements requires
advanced Forest Service approval: and all construction (including
materials) must be reviewed in light of the National Historic
Preservation Act, the Endangered Species Act (flora and fauna), the
Clean Water Act, and archeological concerns. Inspection by all the
people responsible for these areas of concern often takes a great deal
of time.
Exterior colors, including roofs, must have Forest
Service approval. Location of and specification for materials
protecting wood piles mandated.
Fences/gates are not permitted. Satellite dishes are not
permitted. Yard lights by approval only on buildings, no automated
safety lights.
No new permanent outdoor fireplaces are permitted. Fire
rings of a temporary nature may be acceptable in some areas, while in
others even a charcoal barbeque on a deck is prohibited.*
Only native plantings are permissible. Minimal lawn area
allowed in some cases.
Removal of vegetation, including hazard trees only with
Forest Service permission and at cabin owner's expense.
Local rules often conflict with fire-safe mandates.
Any exterior repairs/alterations must have Forest Service
approval, whether other governmental agencies' requirements are needed
or not, i.e. county building permits.
Cabin owners assume all risk of loss to their
improvements resulting from acts of God or from a catastrophic event.
The Forest Service will conduct an analysis and determine if rebuilding
will be allowed.
*Note: Existing improvements can currently remain if outside these
guidelines. However, during replacement, maintenance and change of
ownership of the cabin, and sometimes to obtain a new permit upon
expiration of the prior permit, the Forest Service can require
compliance with Forest Service standards. Requirements under the
National Historic Preservation Act often result in limited ability to
change the cabin in any way whatsoever. **Further Note: This listing is
not all-inclusive, as local decisions can and often do impose
additional restrictions on use, maintenance and exterior impacts.
______
Exhibit 1C
Comparison of Recreational Home Site Leases
on behalf of the national forest homeowners and cabin coalition 2
We have gathered as much lease data as we could find through the
Internet, NFH homeowners, public and private lessors and lessees, and
other contacts. At times, we were able to talk to both lessee and
lessor of a property. We often asked for their best estimates of items
such as average fees. We did not try to sort through leases but added
every lease we found with adequate information. Often leads on leases
did not result in sufficient information and those leases were not
included. There are undoubtedly many more leases to be found. These
results do not cover all leases for some entities such as PacifiCorp,
Pacific Gas & Electric, State of Montana, etc. But we believe this is a
representative sample of leases throughout the United States.
At times we had to keep owners' names private to obtain their
information. We felt the gain outweighed the loss of a specific name
and location.
With the exception of CUFF A projected fees, all of the fees are
for 2009. The projected average CUFFA fee at full implementation is
based on current USFS appraisals and NFH's projection of the results of
future appraisals. Having said that, we believe the average will be
somewhat less because a significant number of homeowners will be unable
to sell their cabins or to pay the fees on their cabins.
USFS cabin owners are permit holders, not lease holders, and the
rights and privileges they enjoy are more limited and less valuable
than those accorded lessees.
Interestingly, a few public lessors were less forthcoming with
information than private lessors. We are appreciative of all the help
we received; most were generous with their time and energy.
Barry & Karen Davis
Eagles Nest Tract, Humboldt-Toiyabe NF
40 Casper Drive, Cody, WY 82414
USFS Retired. Former Shoshone National Forest Supervisor.
Rob Scanland
Thomas Canyon Tract, Humboldt-Toiyabe NF
1300 Pinion Hills Dr., Carson City, NV 89702
Private and public appraisal work including USFS.
______
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Grijalva. Mr. Peter Bailey, Board of Directors,
National Forest Homeowners, welcome.
STATEMENT OF PETER D. BAILEY, BOARD OF DIRECTORS, NATIONAL
FOREST HOMEOWNERS, TACOMA, WASHINGTON
Mr. Bailey. Thank you, Mr. Chairman and members of the
Committee. My name, as you said, is Pete Bailey, and my family
cabin is located on the Olympic National Forest in the State of
Washington.
In my testimony today I will address the permit fee
structure and program revenue resulting from the Cabin Fee Act.
The proposed Act includes an annual user fee and a transfer
fee paid when a cabin is sold or transferred. Illustration 2A
on page 8 of the written testimony explains the annual user
fee.
Five fee tiers will be established, replacing the current
CUFFA fee structure. The user fees were determined by balancing
the rights and privileges that all permit holders share,
regardless of location, while acknowledging the location does
influence the value of the permitted use.
This balance of common rights and differences for location
yields a fee structure where the highest fee is eight times the
lowest fee. This contrasts with the fees under CUFFA, where the
highest fees are more than 100 times greater than the lowest
fees.
The Cabin Fee Act requires the assignment of each permit to
one of these fee tiers. Though not perfect, the rank order of
current appraised values provides a basis for this assignment.
The lowest 10 percent of appraised lot values are assigned
to the $500 tier. The highest 5 percent are assigned to the
$4,000 tier. Following this process, user fee revenue is
projected to be about $24 million for the first year. These
fees are adjusted annually by a rolling average of the IPD/GDP
index. This broadly used Department of Commerce index provides
for a reasonable, straightforward method of increasing fees
annually, while ensuring user fees keep pace with the market.
Illustration 2B explains the transfer fee. The transfer fee
has two components. First, the $1,000 collected for all cabin
sales and transfers. If the sale price exceeds $250,000, an
additional 5 percent of the sale price exceeding 250, up to
$500,000, is applied. Plus for sale amounts exceeding $500,000,
an additional 10 percent is applied.
For this fee projection, annual cabin sales and prices per
range were determined by our survey last fall. We project
transfer fee revenue to be approximately a million dollars for
the first year. When we combine the annual user fee and the
transfer fee, we project total revenue of $25 million in the
first year. This compares favorably with Forest Service
projections of $22 million under CUFFA this year.
In my written testimony, a 10-year projection of program
revenue from the Cabin Fee Act and CUFFA is illustrated. This
comparison reflects net 10-year program revenue of $276
million, under the Cabin Fee Act, which compares favorably the
net program revenue of $267 million under CUFFA for the same
period.
We can expand on this comparison of fee structures to the
broader market of public and private cabin lease programs. A
market survey concluded this fall that included over 1100
cabins compared programs similar in nature to the Forest
Service Recreation Residence Program. We believe this survey
fairly represents the market for similar cabin programs, and
further validates the use of public forest lands for recreation
residence purposes.
While user fees range widely due to variations in permit
and lease terms and location considerations, the average user
fee was less than $1,000. This is considerably less than the
average fee of $1,700 under the Cabin Fee Act. We offer this as
further evidence that the proposed fee structure provides a
fair return to the U.S. Government, and is based upon sound
market principles.
With predictable and affordable fees under the Cabin Fee
Act, we expect all 14,000 current permits to remain active,
keeping the Forest Service program within the reach of a
typical American family.
By contrast, while CUFFA is expected to provide similar
total revenue over time, we project the high fees and
uncertainty will result in a decline in the number of permit
holders under CUFFA to less than 12,000 over the next decade.
Thus, reducing the typical American family's participation in
this program.
This same pattern of permit loss is likely to be repeated
in future appraisal cycles, further eroding the Recreation
Residence Program.
To summarize, the strength of the Cabin Fee Act is its
simplicity. The simple and straightforward fee structure
provides long-term predictability and affordability for the
cabin program, plus provides significant administrative time
and cost savings to the Forest Service. These cost savings
allow for the redeployment of Forest Service resources away
from managing appraisals, reappraisals, and permit fee appeals,
to a more productive delivery of programs and public services.
The Cabin Fee Act provides a true win-win outcome for the
cabin owner and the Forest Service, while providing market
rents for the U.S. taxpayer.
We thank you for the support of this legislation.
[The prepared statement of Mr. Bailey follows:]
Statement of Peter D. Bailey, National Forest Homeowners,
Director, Cabin Coalition 2 Steering Committee
Permit Fee and Program Revenue Overview
Introduction
The Cabin Fee Act of 2010 (CFA) includes both an annual User Fee
and a Transfer Fee that is applied when a cabin is sold or otherwise
transferred. The tiered annual User Fee pays for the rights granted by
the permit that every cabin owner receives, while addressing the costs
to administer the Program and the relative value differences due to
location. The Transfer Fee (percentage of the sale price) also
addresses the value influence of the cabin site location and attempts
to capture some location or site values that exceed the value of the
structure alone at higher sale prices. We believe the location
differences, site variability and the impact of the permit restrictions
on value are best captured when a cabin sells, when the market
determines value. This Transfer Fee also provides for payment when
funds are available from the sale of the cabin. With established User
Fee tiers and fixed Transfer Fee percentages, this approach provides
future predictability and affordability for the Cabin Program long-term
plus easy and consistent administrative procedures for both the Forest
Service and permit holders to follow.
Five annual User Fee tiers are established under the CFA, ranging
from $500 to $4,000, replacing the current fee structure under CUFFA.
The User Fee tiers were determined by balancing the user rights and
privileges of the permit, which are equally applied to all permit
holders regardless of location, with the recognition that location and
associated recreation amenities do influence the value of the permitted
use. The CFA places the vast majority of the annual User Fees in the
$1,000 to $3,000 range, which we believe represents the fair market
value of the permitted use. Fewer permits are assigned to the $500 and
$4,000 levels which recognize those User Fees where location and/or
recreational amenities may be substantially lower than, or higher than,
a typical cabin site. This balance of common rights with differences
for location yields a fee structure where the highest fee is eight
times the lowest fee. This contrasts with the current fees under CUFFA
where the highest fees are more than 100 times greater than the lowest
fees.
Converting from the CUFFA-based annual permit fees to the CFA 5-
tier User Fees requires the assignment of each permit to one of the fee
tiers. We recognize there is no perfect method of assigning the current
permits to the User Fee levels. After consideration of various
alternatives, we determined the use of quantifiable information offered
the best method for dividing the 14,000 permits into the five fee
tiers. While the current appraisal system under CUFFA is subject to
much criticism, we believe using the permit holder's most recent
appraised lot value, ranked in order from the lowest appraised value to
the highest appraised value provides a basis for assigning each permit
to a fee tier. The 10% lowest appraised lots are assigned to the $500
level, the next higher 35% are assigned to the $1,000 level, the next
higher 40% are assigned to the $2,000 level, the next higher 10% are
assigned to the $3,000 level, with the highest 5% assigned to the
$4,000 level. Because 85% of the permits are assigned to the affordable
range of $1,000 to $3,000, the imperfections of the actual appraised
values are not likely to cause major inequities with the assignment of
permits to fee tiers.
The following discussion refers to Illustration 2A.
a. The fee tier assignment is made by using the relative order of
the most recent appraised value of each permitted lot. Permitted lots
with the 10% lowest appraised values will be assigned to the $500
level, while permitted lots with the 5% highest values will be assigned
to the $4,000 level.
b. The resulting ``normal distribution'' of fee tier assignments
follows the same general distribution of values found in the current
cycle of Forest Service appraisals.
c. The vast majority of permit holders would pay a CFA User Fee of
the same or lesser amount compared to fully implemented CUFFA permit
fees, based on the current appraisal cycle. A relatively small number
of permit holders, those at the very lowest levels, would pay slightly
higher fees under CFA, than under CUFFA.
d. This mix of permits to fee tier levels generates sufficient
annual Program revenue to the U.S. Government to replace expected net
revenues under CUFFA.
e. The annual User Fees are adjusted each year by the changes in
the Implicit Price Deflator for Gross Domestic Product (IPD-GDP) index,
published by the Bureau of Economic Analysis of the Department of
Commerce.
f. Two objectives of the CFA are affordability and long-term
predictability. The fee structure established achieves both these
objectives and is annually adjusted to compensate for inflation. The
CFA provides for affordable, predictable fees going forward, unlike the
current appraisal methodology which could have dire impact every ten
years.
g. The User Fee total Program revenue is projected to be $23.8M
for the base year of 2010, assuming the legislation becomes effective
beginning this year.
The following discussion refers to Illustration 2B.
a. The projected number of cabins sold per year is 3% of the total
or approximately 420 cabins. (Sales Data and Appraisal Survey Report,
National Forest Homeowners & Cabin Coalition 2, November, 2009.)
b. The Transfer Fee projections use average sale prices from five
ranges of cabin sales.
c. The percentage of cabins sold per range and the average sale
price within each range were determined from the Sales Data and
Appraisal Survey, conducted by the NFH & Cabin Coalition 2 during the
fall of 2009.
d. A Transfer Fee of $1,000 is assessed for all cabin sales, plus
an additional amount equal to 5% of the sale price that exceeds
$250,000 up to $500,000, plus an additional amount equal to 10% of the
sale price that exceeds $500,000.
e. The $1,000 Transfer Fee is intended to cover the Forest Service
administrative costs and provide for a ``location factor'' for cabin
sales under $250,000, where the location factor in the sale price is
considered minimal. The $250,000 amount was arrived at by estimating
reproduction costs associated with typical cabins. Most Forest Service
Regions restrict the size of the cabin, usually within a range of 900
to 1,600 sq. ft. The cost of construction can range from $125 to $300
per sq. ft., depending on the quality of construction, materials used,
and the remoteness of the location. For cabins designated as historic,
reproduction costs can increase substantially. Some areas provide easy
access, others require long distance travel for supplies and labor and
still others are accessed only by water, on foot or by pack animal. The
cabin owner also bears the cost of infrastructure improvements, such as
utilities. Using an average of 1,200 sq. ft. and an average cost of
$200 per sq. ft., we arrive at a figure of $240,000 (1,200 sf. ft. x
$200), rounded up to $250,000 for site improvements.
f. For a cabin selling for more than $250,000, it's difficult to
determine how much of the sale price may be associated with location,
compared to actual and intrinsic value of the cabin property itself.
The design, artistic characteristic, materials, and historic value of
the cabin structures may be valued differently from one prospective
purchaser to another. While it's difficult to arrive at any precise
formula, we generally believe cabins sold for very high prices are more
likely to contain location value as a component of the sale price, thus
justifying higher Transfer Fees above the $250,000 level.
g. Using the Transfer Fee formula, the projected number of sales,
and average cabin sale prices, the projected total Transfer Fee revenue
is $1,013,750 for the base year 2010, which is approximately 4% of the
projected total Program revenue.
h. Over 50% of the annual Transfer Fee revenue will be generated
from the top 10-15% of cabin sale prices, supporting the premise that
values for location are more likely present where sale prices are
substantially higher than average or typical cabin sale prices.
i. When the Transfer Fee revenue is combined with the User Fee
revenue, the Total Program Revenue under the CFA is approximately
$24.8M for the base year of 2010. This amount compares favorably with
the Forest Service projection of $22M for 2010 under CUFFA. The Forest
Service Revenue Projection was provided to Senator Feinstein last
summer 2009 upon her request for the information. (Exhibit 2A)
The following discussion refers to Illustration 2C.
a. The annual IPD-GDP index of 2.4% used for the projections is
based on the average of the last 25 years.
b. The CUFFA Gross Revenue projections were provided by the Forest
Service for years 2008-2014. The projected amount for 2016 was
interpreted from the Forest Service statement ``the agency projects $40
million in annual fees upon full implementation. The last appraisals
will be reviewed in FY 2012 and will begin a 3-year phase-in in FY
2014.'' The projected revenue amounts for 2017-2019 were calculated by
applying the IPD-GDP index increase over the previous year fee amount.
c. Under CUFFA, some permit fees will increase beyond the level
the current or any prospective permit holder would be willing or able
to pay. The number of abandoned permits is projected to increase
steadily as higher fees are implemented from the current CUFFA
appraisal cycle. Upon full implementation of CUFFA, approximately 2,100
permits, or 15% of the total, are projected to be lost due to high fees
as determined from the Break Point analysis found in the Sales Data and
Appraisal Survey Report. (Exhibit 2B)
d. The CUFFA Net Revenue is determined by subtracting the revenue
lost due to abandoned permits from the gross CUFFA revenue projections.
Because abandoned permits generally occur at higher fee ranges, the
projected revenue loss is approximately twice the percentage of permits
lost. The amount of Program revenue loss under CUFFA is projected to
reach 30% by 2016, the year CUFFA reaches full implementation.
e. The annual Program revenues under the CFA increase each year by
the IPD-GDP index of 2.4%. All 14,000 permits are expected to be
retained under the CFA by keeping annual user fees within an affordable
range.
f. The total CFA Net 10-Year Program Revenue of $276M compares
favorably with the projected CUFFA Net Revenues of $267M.
g. Applying a discount rate of 3.75% (10-yr treasury rate) to the
10-year revenue streams of both programs yields a Net Present Value
(NPV) of the CFA Program Revenues that is approximately $8M greater
than the NPV of the CUFFA Program Revenues for the same period.
The following discussion refers to Illustration 2D.
a. This summary, based on the Comparison of Recreational Home
Sites Leases, National Forest Homeowners, January, 2010, provides us
with a method for comparing the Forest Service Recreation Residence
Program to other programs with a similar use. While the authors make no
representation that the study includes all such programs, we believe
their best effort survey offers a reasonable representation of the
market for recreation residence programs in the United States.
b. While no two programs are identical, a number of similarities
exist. Each program provides the permit holder with the right to
maintain a recreation residence on forest land in return for an annual
fee. The market study focused primarily on programs using public lands,
while also including several programs on private lands where terms were
similar to the public land programs. Over 11,000 cabin lots are
represented.
c. Several observations can be made when comparing to the Forest
Service Recreation Residence Program:
While all programs have use limitations, some
programs allow greater use (exclusive use of land, permanent
residency, no dwelling limitations, etc.), while others are
more restrictive. The Forest Service permitted use appears to
be among the most restrictive when compared to other programs.
Some programs use appraisal methods to set annual
fees while other programs use alternative methods to achieve
the same end. Non-appraisal based user fees are found more
often (>70% lots).
Where non-appraisal based user fees are found, most
adjust (increase) fees annually via a price index.
Where appraisals are used, most programs attempt to
use a fair market approach to value the land, then apply a rate
factor to arrive at an annual user fee:
CUFFA was the only appraisal method found with
specific instructions to exclude value adjustments for
permit restrictions and limitations placed on land use,
thus resulting in higher appraised amounts.
Rates for determining annual fees range from 2.5%
to 5.5%, placing the Forest Service CUFFA 5% rate at the
higher end of the range.
While a wide range of user fees is found due to
variations in the permit/lease terms and location
considerations, the average annual user fee is less than $1,000
for the 11,000 lots represented by this study. If we limit the
analysis to public lands only, the average annual user fee
remains less than $1,000, considerably less than average fees
under CUFFA or the CFA.
Permit Fee and Program Revenue Summary
The Cabin Fee Act of 2010 provides a permit fee structure that is
affordable and predictable for the cabin owner, while ensuring a fair
return to the U.S. Government. The total program revenue under the CFA
compares favorably to the total program revenue under CUFFA, not only
for the base year of 2010, but over a period of time as reflected in
the ten-year program revenue projection.
The annual User Fees for 2010 under the CFA range from $500 to
$4,000, with an overall average of $1,700, over 70% higher than the
national average user fee for a recreation residence lot with a similar
use, on lands held for a similar purpose. We offer this as further
evidence that the CFA fee structure provides more than fair return to
the U.S. Government and is based on sound market principles.
Under the CFA fee structure, we expect all 14,000 current permits
to remain active, keeping the Forest Service Recreation Residence
Program within reach of the typical American family. By contrast, while
the CUFFA fees are expected to provide total program revenues similar
to the CFA fees, it does so with a decline of permit holders to less
than 12,000 over the next 5-6 years based on the current appraisal
cycle, thus reducing the typical American family's participation in the
Recreation Residence Program. This same pattern of permit loss is
likely to be repeated in future appraisal cycles, eroding the
Recreation Residence Program still further over time.
We understand that the number of second appraisals and permit fee
appeals has risen considerably under the current CUFFA appraisal cycle,
increasing administrative costs to the Forest Service, while
potentially reducing services to the public. This increase in Forest
Service Administrative costs was discussed in the Recreation Residence
Assessment, Pacific Southwest Region, USDA Forest Service, June 10,
2009, Updated November 12, 2009. The elimination of on-going appraisals
will yield substantial administrative cost savings to the Forest
Service, potentially exceeding $1M annually. The proposed CFA provides
the opportunity for the Forest Service to redeploy resources resulting
from these cost savings into more productive delivery of programs and
services to the public.
The strength of the Cabin Fee Act of 2010 is its simplicity. The
simple and straight forward fee structure provides future
predictability and affordability for the Cabin Program long-term plus
easy and consistent administrative procedures for both the Forest
Service and permit holders to follow. The CFA provides a true win-win
outcome for the cabin owners and the U.S. Forest Service. We thank you
for your support of this legislation.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Forest Service Revenue Projection,
provided to Senator Feinstein by the Forest Service upon her request
(Summer 2009).
Cabin User Fees
Question: What is the total annual cost to the Forest Service for
administering the recreation residence program for each of the past
five fiscal years, including projected costs for FY 2009? How many FTE
does the program require? Please provide the basis for how the costs
were calculated, and separate out direct and indirect costs.
Answer: The Forest Service accounting system does not distinguish
the cost of performing recreation residence permit administration from
the cost of processing and administering recreational permits overall.
In FY 2009, the total for the administration of recreation special use
authorizations is estimated at $43.1 million and 338 FTEs. Of that
planned amount, approximately $6.7 million are indirect costs or about
15.5 percent. The FY 2009 estimate for administering recreation special
uses overall is based on regions' capability data. The indirect cost
estimate is based on FY 2008 actual expenditures and that same indirect
cost percentage is applied to FY 2009 planned levels.
Question: What are the real and projected costs to the Forest
Service for implementing the Cabin User Fee Fairness Act of 2000 for
the past five fiscal years, including FY 2009? How much is budgeted for
FY 2010? Please separate direct and indirect costs.
Answer: The cost of implementing the Cabin User Fee Fairness Act of
2000 (CUFFA) is reflected in the direct appraisal costs estimated at $7
million from FY 2007 through FY 2012 and an additional $1.3 million in
indirect costs. CUFFA did not result in a significant increase in
direct appraisal costs per appraisal cycle, but by requiring appraisals
every ten years as opposed to the previous policy of every twenty
years, CUFFA effectively doubled these costs. Indirectly, CUFFA
resulted in a significant amount of time and money devoted to the
writing of regulations, meeting with interested parties, and responding
to the controversy generated by its implementation. However, there is
no budget line item for CUFFA implementation, as it is part of overall
recreation permit program costs.
Question: Specifically, what are the costs of new appraisals to
implement CUFFA in Fiscal Years 2007, 2008 and 2009? What appraisal
costs are budgeted for Fiscal Year 2010? What is the expected total
cost of an entire appraisal cycle for all forests? Please explain how
the overall CUFFA implementation costs and the appraisal costs were
determined.
Answer: Costs of new appraisal are spread out from FY 2007 through
FY 2012. Our accounting system does not split out these specific costs,
but the agency has developed the following estimates based on known
direct contract costs and review appraiser costs, and then projecting
forward. An estimated additional $1.3 million over FY 2007--FY 2012 is
estimated for indirect costs.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
.epsQuestion: How much revenue did the Federal Government receive
from the fees paid for recreation residence permits in Fiscal Year
2008? Under current law and policies, how much revenue is the Federal
Government projected to receive from fees paid for recreation residence
permits in each Fiscal Years from FY 2009 to FY 2014?
Answer: In FY 2008, revenue received was $14.6 million. Assuming
there is little change in fees from second appraisals and assuming the
increase indicated from the completed appraisals is representative for
the whole, the agency projects $40 million in annual fees upon full
implementation. The last appraisals will be reviewed in FY 2012 and
will begin a 3-year phase-in in FY 2014. Breaking out the increase over
the intervening years would indicate the following estimates.
FY 2009: $20 million
FY 2010: $22 million
FY 2011: $24 million
FY 2012: $26 million
FY 2013: $32 million
FY 2014: $35 million
Exhibit 2B
NFH Sales and Appraisal Survey (Oct. 2009)
Breakpoint Analysis
The ``breakpoint'' is the financial point where cabin owners cannot
pay or will not pay the permit fee increases that result from the
current CUFFA appraisal process. We assume sales attempts will occur
and/or folks will walk away from their cabins. We believe that as fees
exceed cabin owner breakpoints, some cabins will be sold, but other
cabins will be added to the list of cabins already unsalable, due to
their high current fee and the uncertainty in the existing CUFFA
appraisal process. Permits abandoned will result in lost revenue.
In the following table the breakpoint average from the survey was
$3,190, with a range of $200 - $20,000. This is quite a range. Please
note that some cabin owners are willing and able to pay fees above the
$5,000 level, but others are unwilling or unable to pay a fee that is
less than $1,500. Challenges to cabin owners exist across the spectrum.
All non-zero responses (1263) to the breakpoint survey question are
included in the following table.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
What year will you reach your ``Breakpoint''?
The following table suggests that at least 57.7% of cabin owners
will reach the ``breakpoint'' in this appraisal cycle when fully
implemented in year 2014 or 2015. This percentage probably overstates
the reality on the ground because most people will try to ride out the
process and hang on in hopes of success in changing CUFFA, which is
already occurring in tracts appraised with high values in this cycle.
The ``Don't Know'' responses (41.1%) reflect the fact that about 40% of
all cabins have yet to receive their CUFFA appraisals and cabin owners
have no idea of the potential outcome. Uncertainty is inherent in this
process.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Reasons given for reaching their Breakpoint or Walk-away point
34.7% couldn't afford the fee.
51.4% indicated the fee exceeded the value of the rights
and privileges granted.
13.8% other
After deeper analysis of the ``other'' comments, we conclude that
approximately 40% of cabin owners can't afford the fee, while 60% are
unwilling to pay a fee they believe exceeds the value received.
Comparison of 2010 Estimated Fee to projected Breakpoint
The following table demonstrates that as fees exceed the $4,000
level, at least 53.8% of the cabin owners will reach a point where they
are unable or unwilling to pay the fee, they have reached their
``Breakpoint''. Plus, if CUFFA fees become fully implemented, these
data suggests that 35.3% of all cabin owners will reach this point.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Breakpoint Data Summary
The survey responses indicate that, without changes to
CUFFA, 35% of cabin owners will reach their breakpoint or walk-away
point in the current CUFFA appraisal cycle following full
implementation of CUFFA. The recently passed temporary moratorium on
fee increases greater than 25% may change this projection for 2010.
60% indicated the CUFFA fee exceeds the value of the
rights and privileges granted. This number supports the contention that
cabins will be very difficult to sell, because a potential buyer would
likely reach the same conclusion. This is consistent with both
anecdotal and hard evidence that cabins in some high-fee locations are
difficult or nearly impossible to sell.
These comparisons are made with data that is estimated
and projected. This must be weighed and considered in the analysis.
However, the data does clearly demonstrate that we have a serious
problem in the immediate future if we are not successful in changing
CUFFA. Even if the breakpoint response data is discounted by 50%, the
implication remains that at least a 15% loss of cabins, in this
appraisal cycle, is probable. The next section further illustrates this
point.
Projected Impact on Revenue due to Permit Loss
The following table illustrates the amount of fee revenue loss that
occurs when permits are lost. The ``% Lost Permits'' percentage is
arrived at by reducing the survey results by 20% for each level and
rounding to the nearest 10%. This adjustment yields a more conservative
result by attempting to reduce or eliminate any cabin owner bias with
the survey. The permit loss ranges from 30% for permits at the $4,000-
$5,000 level, increasing to 80% for those fees greater than $10,000.
Extending the % permits lost by the average fee per range shows the
revenue loss per level. The projected total revenue loss (38%) is
approximately twice the number of permits lost (17%), supporting the 2-
to-1 ratio of revenue loss to number of permits lost conclusion. Both
percentages are rounded down to 15% and 30% for the CUFFA program
revenue fee projections.
Conclusion
The survey ``breakpoint'' data is consistent with the
cabin owner forums and communication received from individual cabin
owners from all Forest Service regions. Most express concern they will
be forced to sell or abandon their cabins when fees reach the $3,000-
$4,000 level, which is supported by the survey results.
The Forest Service expects the current cycle of field
appraisals to be completed by 2012. Second appraisals and appeals are
likely to extend this process by another year or two. For fee increases
exceeding 100%, a three year phase in of fees suggests full
implementation of CUFFA fees is not expected until 2016. We expect
permit loss will occur as higher CUFFA fees are implemented in the same
phased-in pattern (from 2011 to 2016), reaching the full 15% permit
loss in 2016 as CUFFA is fully implemented. The attached Ten-Year Total
Revenue Projection factors this permit loss into the CUFFA net revenue
projections.
______
Mr. Grijalva. Thank you, sir. Ms. Maureen Barile, cabin
owner, Fresno, California. Welcome.
STATEMENT OF MAUREEN BARILE, CABIN OWNER,
FRESNO, CALIFORNIA
Ms. Barile. Thank you. Mr. Chairman and members of the
Subcommittee, my name is Maureen Barile. I live in Fresno,
California. I am a Recreation Residence permittee. My family
and I are here today as a representation of multi-generation
cabin-permittee families.
My cabin is located at Huntington Lake in eastern Fresno
County in the Sierra National Forest. The Sierra National
Forest has a land mass of approximately 1.4 million acres, of
which more than half is designated wilderness and protected
activity centers.
My family has a long history with the cabin program and the
Forest Service. My late husband Tom's family came to Huntington
Lake in the early 1950s. Tom, as a young boy, worked alongside
his father, a printer from the Fresno Bee, in building the
cabin. The cabin was built of salvaged lumber from an old air
base in Fresno. It was definitely a labor of love.
Tom as a young man worked for the Forest Service in tree
planting, fire, and recreation. In 1965 he was a Huntington
guard, housed in the old Forest Service guard station, now the
Billie Creek Museum. My association with the Recreation
Residence Program began in 1965, when Tom proposed.
In 1982, Tom and I were able to purchase a tiny cabin in
disrepair; and thus, our sons, Paul and David, as young teens,
now worked alongside their dad in building the cabin.
What do recreation permittees provide to the community and
the public with their volunteer work and financial support?
Cabin owners successfully led the Save Kaiser Ridge campaign,
resulting in the Congressional designation of the Kaiser
Wilderness. The historic Billie Creek Guard Station Museum
opened its doors to the public on July 28, 2001. This was a
partnership of cabin owners with the U.S. Forest Service. The
museum now has three separate restored historical structures,
which are a portrait in time of the socio-economic history of
the Huntington Lake Basin communities.
Tom and I were involved in this project from the onset. I
proudly acknowledge my grandson, Thomas, who is with us here
today, and who, at the age of eight years old, began
volunteering as a junior docent.
The museum is open to the public free of charge, and serves
summer visitors. We were pleased to have Congressman Jim Costa
visit the museum last year. The Huntington Lake Volunteer Fire
Department, a 911 first responder, services 150 square miles.
During peak times there are over 14,000 visitors to the
forest. There is no cost to the public for these services,
which are funded and manned by cabin owners. We sponsor
campfire and historic programs; we partner with the U.S. Forest
Service in National Public Land Days activities. We write
grants for forest fire prevention in partnership with the U.S.
Forest Service. We adopt trails.
We participated for seven years in the Big Creek Hydropower
relicensing. As stakeholders, we were able to obtain
outstanding conditions and funding from the utility for the
good of the public.
Tom died suddenly on the last day of his work, after 31
years as an educator for the Madeira Unified School District.
As part of the 108th Congressional Record of Monday, June 16,
2003, it is stated that Thomas E. Barile was honored in the
House of Representatives for his visionary work as an educator,
and for his volunteer work for the Fresno County Sheriff's
Department and the Sierra National Forest.
Tom volunteered his services using his experience as an
educator to teach youngsters about the forest, mountains, and
their unique attributes. His philosophy instilled in his
children was if you take something out, you must put something
back.
He took his role as a steward of the forest seriously, as I
have. Tom coordinated the Fresno County Sheriff's Department
Winter Snowmobile Search and Rescue Team, which he served as a
volunteer commander for 18 years. When asked by the Sheriff's
Department to take on this responsibility, Tom looked to our
sons, Paul and David, and fellow cabin families for this
volunteer team, donating their time, expertise, and equipment
in the saving of lives.
I have been left with the responsibility of the
Recreational Residence permit and the cabin. I am very
concerned about the future of this program. Fees have
progressed, have increasingly progressed, and I know many cabin
owners who are of modest means, who will have to leave their
cabins if this trend continues.
I, too, am of modest means, living off of my husband's
teacher's pension. My sons are both law enforcement officers,
David a deputy with Fresno County, and a Paul a deputy with
Merced County. We do not want to be driven out of the forest
because of the inability to pay escalating fees.
If I and my fellow cabin owners have to leave the forest,
it will be a great personal tragedy, as well as a loss to the
public of those many volunteer cabin families from forests
throughout the nation, who give so much of their time, efforts,
talents, and support.
Fees that drive out the modest American will create a
change in the national forest use. The Forest Service will have
created a system that is affordable only to the very wealthy.
The sense of community and partnerships will end.
My son, Paul, my grandson, Thomas, and my daughter-in-law,
Kim, are all here with me today. We thank you for the
opportunity to address the Committee. We request your support
of H.R. 4888, and thank you.
[The prepared statement of Ms. Barile follows:]
Statement of Maureen E. Barile, A California cabin owner and
a member of National Forest Homeowners.
My name is Maureen Barile. I live in Fresno, California. I am a
Recreation Residence Permittee. My family and I are here today as
representation of multi-generation cabin permittee families
(accompanying statements attached as Exhibit 4A, 4B and 4C).
My cabin is located at Huntington Lake in Eastern Fresno County in
the Sierra National Forest. The Sierra National Forest is
geographically located between Kings Canyon & Sequoia National Parks to
the south and Yosemite to the north. The Sierra National Forest has a
land mass of approximately 1.4 million acres of which 750,000 acres is
designated wilderness and protected activity centers.
The first cabins permitted at Huntington Lake were in 1916. Many
early cabins were constructed of salvaged lumber from the Big Creek
Hydro Project which began in 1911 with the 3 dams at Huntington. Most
of those cabins remain today in the original families. For the next 40
years the U.S. Forest Service continued to encourage and invite the
public to come to the forest and build a recreation residence.
My family has a long history with the cabin program and the Forest
Service. My late husband Tom's family came to Huntington Lake in the
early 1950's when the USFS announced a lottery for lots. They had
camped at Huntington and loved the Sierras so they entered the lottery.
My husband, as a young boy, worked alongside his father (a printer for
the Fresno Bee) in building the cabin. The cabin was built of salvaged
lumber from an old air base in Fresno. It was definitely a labor of
love. Materials were hauled up the mountain in a small trailer behind
the family jeep.
My husband Tom, as a young man, worked for the Forest Service in
tree planting, fire and recreation. In 1965 he was the Huntington
Guard, housed at the old Forest Service guard station (now the Billy
Creek museum). My association with the Recreation Residence Program
began in 1965 when Tom proposed.
In 1982 Tom and I were able to purchase a tiny cabin in disrepair,
and thus our sons Paul & David as young teens now worked alongside
their dad in building ``The Cabin''. They mixed the cement on site. All
materials were hauled up in the family pick up or trailer.
We like so many recreation residence families have a great love for
the mountains and are eager to share with family and friends. Cabins
are always buzzing with activity. While having fun, folks are always
learning about the forest and how to give back and be good stewards.
What do Recreation Permittees provide to the community and the
public with their volunteer work and financial support?
Recreation residence permittees led the ``Save Kaiser Ridge''
campaign. This volunteer work resulted in the Congressional Designation
of the Kaiser Wilderness.
*In 1989 we learned the Forest Service intended to demolish the
Huntington Guard Station. A group of cabin owners initiated a project
to restore the guard station for use as a museum. It was a 12 year
process. We had to appeal the original decision to demolish the
station, the USFS wanted new science, environmental studies had to be
done, historic evaluations were required, and hours of research were
needed. The buildings were restored, and in 2001 we were issued our
permit. The ``Historic'' Billy Creek Guard Station Museum opened its
doors to the public on July 28, 2001. This was and continues to be a
great example of volunteers working in partnership with the U.S. Forest
Service.
The museum now has three separate restored historical structures
which are a portrait in time of the socio-economic history of the
Huntington Lake Basin communities which encapsulate man's historic
contributions to the area along with the building of the Big Creek
Hydro-system and recreation. Tom and I were involved in this project
from the onset. I proudly acknowledge my grandson Thomas, who is with
us here today and who at the age of 8 years old began volunteering as a
junior docent. My grandsons Kristjan 14 and Matthew 9 also volunteer.
The museum is open to the public free of charge and serves summer
visitors. Most visitors are campers, day use visitors and other members
of the general public. Congressman Jim Costa came and visited the
museum last year.
*In 1999 Recreation Residence Permittees recognized the need for a
trained and well equipped volunteer fire dept. The Huntington Lake
Volunteer Fire Dept. (HLVD) in ten years has become a 911 first
responder that services 150 square miles. The volunteer firemen & women
are cabin, resort and camp permittees. During peak times there are over
14,000 visitors to the forest whom they are ready to serve. There is no
cost to the public for these services rendered. The Volunteer Fire
Department operates from community donations and grants.
*We co-sponsor campfire programs at the museum free of charge.*We
provide historic programs for the public at no charge
*We partner with the U.S. Forest Service in National Public Lands
Day activities.
*We write grants for forest fire prevention working in partnership
with the U.S. Forest Service.
*We save and preserve historic buildings, i.e. USFS Huntington
Guard Station, USFS Kaiser Diggings work center, and the Pine Logging
Camp.
*We serve as winter trail patrollers.
*We write grants in partnership with the USFS to clear trails,
construct bridges, develop snowmobile trails and ski trails.
*We Protect and preserve the history of the World War II B-24
bomber that crashed on December 6, 1943 into Huntington Lake.
*Family heirlooms are donated to the museum.
*Old photo collections are donated to the museum.
*We participated for 7 years in the Big Creek Hydro Power
Relicensing. As stakeholders we were able to obtain outstanding
conditions and funding from the utility for the good of the public.
Tom died suddenly on the last day of his work after 31 years as an
educator for the Madera Unified School District. As part of the 108th
Congressional Record of Monday, June 16, 2003 it is stated that Thomas
C. Barile was honored in the House of Representatives for his visionary
work as an educator and for his volunteer work to the Fresno County's
Sheriff's Dept. and the Sierra National Forest.
For most of Tom's adult life he volunteered his services using his
experience as an educator to teach youngsters about the forests,
mountains and their unique attributes. His philosophy, and one that he
instilled in his children, was ``if you take something out you must put
something back''. He took his role as a Steward of the Forest
seriously, as have I. Among the many volunteer projects in which Tom
participated was the coordination of the Fresno County Sheriff's Dept.
winter snowmobile Search and Rescue team which he served as a volunteer
Commander for 18 years and also served on the Mountaineering Team. When
asked by the Sheriff's Department to take on this responsibility Tom
looked to our sons, Paul & David and fellow cabin families for this
volunteer team. A highly skilled team of volunteers donating, their
time, expertise and equipment came together and assist in the saving of
many lives.
I have been left with the responsibility for the recreational
residence permit and the cabin. I am very concerned about the future of
this Program. Fees have progressively increased and I know many cabin
owners who are of modest means who will have to leave their cabins if
this trend continues. I too am of modest means living off of my
husband's teacher's pension. My sons are both law enforcement officers,
David a deputy with Fresno County and Paul a deputy with Merced County.
We do not want to be driven out of the forest because of the inability
to pay escalating fees. If I and my fellow cabin owners have to leave
the forest it will be a great personal tragedy as well as a loss to the
public of those many volunteer cabin families from forests throughout
the nation who give so much of their time, efforts, talents and
support.
Fees that drive out the modest American will create a change in
National Forest use. The U.S. Forest Service will have created a system
that is affordable only to the very wealthy. The sense of community and
partnerships will end.
My son Paul, grandson Thomas and daughter-in-law Kim are here with
me today. We thank you for the opportunity to address the committee. It
is my hope and belief that Congress will recognize the threat posed to
the Recreation Residence Program and not let unreasonable fees force us
out of our cabins. We request your support of H.R. 4888.
______
Exhibit 4A
Statement of Diane Dreher, Eau Claire, Wisconsin
Our family cabin is located in Chequamegan National Forest in
Wisconsin. Many would consider it a ``rag tag'' cabin but it is a
family treasure to my family. I am Diane Dreher and our cabin built in
1948 has been in the family since my uncle acquired it in 1996. It is a
rustic cabin, 750 square feet including one small bedroom and kitchen.
Our water comes from a primitive water system and our heat from a
propane heater and fireplace. When my uncle died my family obtained the
permit to make certain that it was maintained and the family could
continue to use it.
Our use of the cabin is confined to the summer months due to
extreme weather in the winter and limits on year round use imposed by
our permit. My children, grandchildren and I use the cabin in the
summer months. My 92 year old mother continues to regularly visit the
cabin in the summer and guests are welcome despite the small size of
the living area.
I am a divorcee, living on social security, limited investments and
income from a part time job at Barnes and Noble. I was working 20 hours
a week but I have just been reduced to 5 hours a week due to hard
economic times. We struggled to pay the yearly use fees when they were
approximately $3000 per year. They now are $7000 a year. We cannot
afford such high fees and will be forced to abandon the cabin. It is
unlikely that anyone would purchase this cabin considering the high
fees and many restrictions on its use especially when other privately
owned residences free of many government regulations are available.
It will be sad to leave this cabin. My children and grandchildren
have grown up in the summer time learning about the outdoors, the
quality of nature and all the forest has to offer, from wildflowers to
the infrequent bears that visit us. The grandchildren have learned to
swim in the local lake diving off a simple portable dock we install
each summer.
I cannot help but believe that the appraised value of our small,
rustic cabin has been influenced by many privately owned cabins and
residences in the area which are simply not in the same league. In
fact, our cabin and others in our tract serve as a buffer between
larger cabins and the dense forest and we believe that we are
responsible stewards of that forest.
It is the hope of the Dreher family and our fellow cabin owners
that Congress will act swiftly to reform the fee system and provide for
fair fees before it is too late for us.
Diane Dreher
______
Exhibit 4B
Statement of Cindy Sims Langley. Clovis, California
My name is Cindy Sims Langley. My family has owned a cabin for over
70 years at in the Sequoia National Forest at Hume Lake in California.
The cabin was built in 1926. It was known as the ``hunter's shack''
when my grandmother acquired it in 1938. My grandmother, Dorothy Seele,
was one of the first cabin owners on the recreational permit side of
the side of the lake, the other side being occupied by a public Forest
Service camp.
My grandmother was a single mother from Southern California. All
her life she made great sacrifices first to acquire the cabin then to
maintain the cabin for her family. She worked as waitress in the Los
Angeles area arranging to hire a woman and her son to stay at the cabin
and care for her daughters there all summer long while she remained in
the hot valley working. This way Grandma had peace of mind as she
worked long hours to provide for her family knowing her children were
safe at the cabin enjoying the forest.
After working a full day my grandmother would make the arduous trip
to the cabin. This was a 6 hour trip which she would drive alone, at
night, arriving around 11 PM Friday evening. She would wash her uniform
and go to bed anticipating Saturday with the girls fishing, exploring,
hiking and swimming before turning around and heading back to Los
Angeles to work.
Every spare cent grandma had she spent to protect that cabin for
her family. As children, my mother and aunt spent summers with other
cabin owners' children playing on and around Hume Lake. They also spent
their evenings at the Forest Service camp singing with the forest
rangers and roasting marshmallows and drinking hot chocolate-they were
having a grand time. When the (then) new Christian camp was built at
Hume Lake they also participated in the fun with the residents.. It was
a wonderful life. Over the years our cabin became the center of our
life away from home. We learned the mysteries and value of life in the
forest. My mother met my father frogging on Hume Lake and my uncle met
and married the head Ranger Paul Spivey's daughter Kathy Spivey. My
father spent summers splitting fence posts my grandfather had logged.
Everyone joined in to maintain our cabin in the woods.
Eventually grandchildren came along and we grew up and roamed these
mountains lakes and streams as did our cousins from all sides of the
family. We all enjoyed the cabin life and sometimes there would be 14
or more sleeping on the floor and deck just to be together. As we grew
we married and had children of our own who have also learned to swim
fish and roam the mountains around Hume Lake. The cabin is only 900
square feet with a sleeping loft. It's cozy; however we have always
found room for the expanded family to enjoy the cabin experience. We
have had over 30 years of family reunions at the cabin--that's a lot of
togetherness! My 74 year old father continues to enjoy the cabin. I am
not embarrassed to say that all three of my children were conceived at
the cabin. The cabin means so much to my own family that we moved to
Clovis, California to be several hours closer to the cabin.
My grandmother understood the importance of the cabin to her family
and for over 70 years provided a wonderful place for all of us to
gather and stay close as a family. When she died she insisted the cabin
be left in trust to her grandchildren and great grandchildren to keep
the tradition alive. Unfortunately, the threat of substantial Forest
Service permit fee increases threatens our ability to continue to keep
our cherished cabin.
We are not a wealthy family. I am disabled but receive no source of
disability pension; my husband is a plumber at the local hospital, my
oldest son a firefighter and with budget cuts his job is in jeopardy,
the middle son works for delx films, which may sound like a high paying
job but when you expect to get laid off 3 to 6 months out of each year
it is not. Our youngest son is in college-need I say more? We are your
average middle class family and this cabin means everything to us. Our
``wealth'' is found in memories and our family life at the cabin is an
integral part of that. I am hopeful that our children and grandchildren
will be able to continue to fulfill my grandmother's dream. We hear
from fellow cabin owners and the Forest Service that yearly cabin
permit fees under an appraisal system will likely rise by thousands of
dollars. This will put the fee beyond our means. We urge Congress to
change the permit fee system to assure a more affordable one for
families such as ours.
Cindy Sims Langley
______
Exhibit 4C
Statement of Jo Musser-Kraus Tucson, Arizona
My name is Jo Musser-Krauss and I am a resident of Tucson, Arizona.
I have a cabin subject to a U.S. Forest Service recreational residence
special use permit. My cabin is a ``piece of heaven'' located in Willow
Canyon in the Coronado National Forest in Arizona. I consider it so not
because it is luxurious but because of its importance to me, my family,
friends and community, as I will explain. I am submitting this
statement because I am very concerned I am going to have to give up the
cabin due to the likelihood of increased yearly fees.
I am 87 years old, a widow and a retired educator. The lot for my
cabin was originally acquired by its first owner shortly after World
War II in a lottery conducted by the government. My husband and I
purchased the cabin in 1973. The cabin is one room, approximately 360
square feet, plus a small bathroom, the only addition we have been
permitted to make. Our septic system is an outhouse with a vault, we
obtain water from rainfall or transport it in ourselves and our heat is
from a fireplace. The cabin is rustic and we access it over a 1 1/2
mile rough road which we have to maintain. Provisions are hauled in
from the city. The Forest Service limits the days each year we can use
our cabin. We use our cabin for 4 months, May through August. My
husband and I attempted to use it one winter, a difficult experience.
It is too isolated for winter use at my age, even if it were permitted.
Mine is in every sense a family cabin available to my 3 daughters,
5 grand children and 2 great grand children. It is also a community
meeting place. We have approximately 150 visitors to my cabin each
year. Church groups regularly meet there and the church youth group
helps me clear the land around the cabin to protect from wildfires. In
fact, we have had two recent wildfires fires in the vicinity which
destroyed several cabins. Mine survived in large part due to this
effort. I am a docent at the Arizona-Sonora Desert Museum in Tucson and
the docents regularly meet at my cabin over the summer months. ``Jo's''
cabin is the site of the yearly 4th of July party for my fellow cabin
owners and guests.
If I have to let my cabin go it will not only be a loss to me but
to the many friends and groups who use it as well. The cabin has a
special attachment for me. Located at 7000 feet in the Catalina
Mountains it is a sanctuary from the heat of Tucson. Much of the work
on it we do ourselves and its style is unique. For example, after we
acquired the cabin my husband and I paneled the inside with scrap wood
salvaged from wooden packing boxes. I have attached some photos of the
cabin.
I live on a pension and pay the current fee, personal and property
taxes myself. We hear that the permit fees will soon be approximately
$4000 a year which will be about 10% of my income. I will be unable to
afford such fees and will have to let the cabin go.
I am no stranger to the difficulties encountered in changing the
law and implementing such changes. In the mid 1970's I attended a
meeting in California with 2 local Board members, including then member
and now Congressman Raul Grijalva; to address school desegregation.
After that meeting we came up with a workable plan implemented in the
Tucson Unified School District which included a magnet school. I was
appointed Principal of Borton Primary Magnet School, one of the 9
schools in the desegregation plan. I know that things can be made to
work if people work hard to make them work. I hope that Congress will
make the effort to make certain that the yearly fees for our cabins are
kept reasonable and affordable.
February,20, 2010
Jo Musser-Krauss, 2910 E. Malvern St., Tucson, AZ 85716
______
Mr. Grijalva. Thank you very much.
Ms. Barile. You are very welcome.
Mr. Grijalva. Just some quick questions. Mr. Anderson,
since the implementation of CUFFA 10 years ago--and we have
heard stories about what the fee increase is potentially doing,
and the last panelist articulated that, as well--how many, what
percentage of abandonments or tearing-down of cabins have you
seen? Is there a percentage attached to it?
Mr. Anderson. There hasn't been any significant abandonment
yet, and that is because the fees under the CUFFA system were
so delayed that they have only recently been implemented within
the last two years. So we haven't quite yet seen--well, we have
seen attempts to sell, which have been unsuccessful. But we
haven't seen abandonment yet.
Many of those fees are just now becoming applicable. And I
can tell you what I have seen and heard. And that is that I get
calls, both I and the executive director get calls from
members, saying I just got my new CUFFA fee bill that just came
in last year or this year. I can't afford it, what do I do? I
can't sell it, what do I do?
And I can tell you that the level at which I started
getting those calls is not at the $6,000 fee level you heard
Mr. Holtrop refer to. People start calling in when they get
these new CUFFA appraisals now and say $3,000, $4,000, that is
my limit, I am out of here. Help me, I can't stay. What should
I do?
So it is just now starting to happen, if you will.
Mr. Grijalva. Thank you. Mr. Almy, we have heard--well,
first of all, the cabin owners, it appears from the testimony
today, have been quite involved in creating or helping shape
the legislation that we are talking about today.
For background, how involved were cabin owners in the
drafting in 2000 of the CUFFA legislation?
Mr. Almy. Thank you for that question. The short answer is
not nearly as involved. One of the things that has happened in
creating H.R. 4888 is a much more inclusive process, not just
from the perspective of doing surveys and getting feedback from
cabin owners, but more importantly, the creation of a group
called Coalition II that was a broad amalgam of national forest
homeowners in the lead, and a number of state organizations.
Mr. Grijalva. OK. Is it the potential, is it the high fees
or the potential for high fees that is--and this extreme, or is
it this extremely difficult housing market that we are all
dealing with, particularly for second homes? Which chicken and
which egg?
Mr. Almy. Mr. Chairman, I frankly think it is the former,
not the latter. Certainly the latter, of the condition of the
residential market and real estate in general, has exacerbated
the problem.
But the issues that brought us to this legislation have
been with us for 40 years. And so the concern about high fees
is one element of it. But the other element that is equally as
important is the uncertainty of the trajectory of those fees.
Mr. Grijalva. Mr. Bailey, we have heard that fees are
currently based on appraisals from the seventies to the 2000s.
And so would your organization be opposed to allowing the
Forest Service to complete the round of appraisals that are
going on right now under CUFFA, so that we have determinations
of where to place these cabins in the tiers? Or do we rely on,
in some instance, of advantage or disadvantage from a seventies
appraisal? And other instances, advantages or disadvantages for
that cabin owner on a 2000 appraisal?
Mr. Bailey. Mr. Chairman, I think that is a fair question
to ask. And we agree with the Forest Service that we need to
have a dataset upon which we make tier assignments that is
uniform and complete.
And the current appraisals, ranging from the late seventies
to the CUFFA appraisals, is what is establishing fees on the
ground today. And we agree that that is not how we want to
assign the various permits to tiers.
Mr. Grijalva. So you are all for finishing, I think Mr.
Holtrop identified 8,000 done, and a number to go to reach 14.
Are you open to the completion of that process in order to have
a base line to be able to deal with the legislation if it were
to become law?
Mr. Bailey. The completion of the current appraisal cycle
is something that we would support, but we would certainly want
to work on what kind of transitional mechanism would be in
place, you know, to help facilitate that. You know, how do we
deal with individual fees today with those permits that are yet
to face their appraisal process.
Mr. Grijalva. If I may, for our last panelist, the same
question. Finishing the appraisal process that is ongoing now,
if H.R. 4888 were to become law, finishing that appraisal
process under CUFFA so that we would have that base line. As an
owner and based on your testimony, how do you feel about that?
Mr. Bailey. Recently, within the last three weeks, I
received my new appraisal. It was my understanding that that
was going to be my new fee, what I am looking at for the future
with the tiers, I already found where I would fall within that.
Mr. Grijalva. OK, thank you very much. Mr. Bishop.
Mr. Bishop. I am going to yield to Ms. Lummis first.
Mr. Grijalva. Ms. Lummis.
Ms. Lummis. Thank you kindly, Mr. Chairman and Mr. Bishop.
First question for Mr. Bailey.
If a cabin is abandoned, is there a penalty to the owner?
Mr. Bailey. There is not a formal penalty, but there is a
penalty, in fact, that they incur the cost to remove that
cabin. And in some areas, the county imposes hazardous waste
disposal standards that really significantly increase the cost
of doing that.
And it has been estimated that some cabins would cost
between $50,000 and $60,000 to remove, you know, on top of the
rest of the circumstances.
Ms. Lummis. Thank you. And a question for Mr. Almy. It
sounded to me like the appraisal process is very complicated.
And when Mr. Bailey went through and explained this process, it
sounds so much more simple.
I guess I am getting to that age in life where simple is
better. So this bill just appeals to me tremendously, just
because of its simplicity.
Can you explain what you know about the Forest Service
policy regarding the type and location of lots an appraiser can
use as a comparable lot in the appraisal process under CUFFA?
Mr. Almy. Certainly. Let me first say that one of the
underlying principles here really is simplicity and
predictability, and I think that has been a theme that we have
heard all morning.
But also, in the interest of full disclosure, I have to
tell you that I am a licensed appraiser, and I have been
practicing in real estate for 25 years. So I think I know
whereof I speak on this issue.
The short answer is that you go where you need to go to
find comparables that are acceptable. I think Mr. Holtrop was
correct in that your first and best choice is a comparable lot
that is unimproved, has similar utility infrastructure, similar
access, that is in private land. Those are few and far between
because of the nature of this program.
As a result of that, you have to make compromises. You have
to go to other locations. You have to sometimes find properties
that are improved, and figure out how to extract the value of
the improvement. So it is very complicated. It is very
subjective. And one of the difficulties with this whole
appraisal system is that there aren't normal metrics, like
there is in income property, to figure out what the value
really should be. It is a perception, almost.
So it is a complicated process. It is a subjective process.
And it is the very reason that we conclude that the appraisal
process, as a system, is inappropriate for setting fees.
Ms. Lummis. And just one more comment, Mr. Chairman. I
thank you all for your testimony. I am pleased that this bill
provides the type of simplicity and predictability, and that
the cabin owners have helped work on it.
It sounds like CUFFA was--I am a freshman, so that is why I
am making all these assumptions. It sounds like CUFFA was well-
intentioned, and then, in its implementation, just became more
unruly and complicated and unpredictable for people than is
appropriate under the circumstances.
So I just want to applaud the author of the bill, the cabin
owners who helped work on it, and comment that I get a lot of
cabin owners' comments as well, from my home state of Wyoming,
about the massive impacts of these new fees. And that we, as
Members of Congress, have an opportunity to correct a situation
that, you know, the Forest Service is honestly attempting to
utilize, but that, in practice, has not worked very well.
So thank you all for your testimony and your hard work on
this issue. And thank you very much, Mr. Chairman, Mr. Bishop,
Mr. Hastings.
Mr. Grijalva. They are going to call us to vote in a little
while. And if at all possible, I would like to adjourn when
they call us to vote. But Mr. Costa, questions?
Mr. Costa. Yes. That works for me, Mr. Chairman. Before I
ask some of the cabin owners some questions, I want to go over
I think for the Committee's purposes, Congressman Hastings and
I had a conversation when we had a separate meeting as it
relates to how this bill is drafted and its jurisdiction.
Because there are some issues that affect the USDA and
overlapping with the Ag Committee.
And I don't think, if we are able to work this through, as
I hope we are, that we want to have a situation where we have
CUFFA in a narrow sense covering a thousand cabins or whatever,
and then have a separate program under this tier system.
So it seems to me, Mr. Chairman, that we ought to, I think
at the time Congressman Hastings indicated he was amenable
toward working out this overlap and this jurisdictional issue.
And we actually had two staff members from the Ag Committee sit
in on that earlier meeting.
So I don't know, as a colloquy or a way of, if Congressman
Hastings should care to respond, and the Chairman cares to,
too, so that we have an understanding on how we go through
this?
Mr. Hastings. Will the gentleman yield?
Mr. Costa. Yes, I will yield. As long as I have time to ask
my three questions.
Mr. Hastings. This issue, you know, really came to a head.
And as you know, there is essentially a one-year moratorium on
raising the fees. And that was done----
Mr. Costa. Right.
Mr. Hastings.--and that could be renewed. I hope that we
don't have to go through that process.
So when we drafted this bill, we drafted it, honestly,
purposely very narrowly, so that we would have jurisdiction on
that, and could have a hearing and facilitate the hearing.
Now, I recognize that there has to be a process by which we
go through. And I am certainly open to that, and I made that
observation in my opening remarks.
But as I mentioned, this was done on purpose so we could
have a hearing.
Mr. Costa. No, I understand that. And I spoke with Chairman
Peterson, and he is aware of the issue.
Mr. Hastings. Right.
Mr. Costa. And I think he is amenable to working with the
Chairman of the Subcommittee here on how we can work through
that, so that we don't have a dual system.
Mr. Hastings. Yes. The intent was not to exclude that. The
intent was to try to get this on the front burner from a policy
standpoint so that we can address it.
Mr. Costa. Very good.
Mr. Hastings. Thank the gentleman.
Mr. Costa. Let me get to my questions here quickly. Mr.
Anderson, you know that this measure that we hope will resolve
the issue of, there was a sense, I guess, that cabin owners
thought that CUFFA would solve the problem. But it didn't.
Quickly, where do you think this is different, and that it
will, in fact, resolve the issue?
Mr. Anderson. Well, it is easy to determine the fee. There
is very little controversy. Once we have reached agreement on
this and the legislation hopefully is passed, there is really
no difficulty in determining the fee.
The cost I think should be significantly less for the
Forest Service. The costs, we will no longer have costs of
appraisals. If the user fee levels or tiers are kept at a
reasonable level, it will be more affordable.
Mr. Costa. And people will understand it, and there will be
certainty. The gentleman next to you there, both Mr. Almy, who
has experience in real estate, as you have stated, Mr. Bailey.
Cabin owners have indicated that many owners would consider
abandoning their cabins at a higher-than-$4,000 fee.
What percentage of loss do you think there would be if we
had the top tier in excess of $6,000? Care to comment quickly?
Mr. Bailey. Yes, I would like to respond to that. Our
survey in the fall, Mr. Congressman, looked at the financial
break point. And on average, that number is around $4,000.
What does that mean? That means that is the point where a
cabin owner looks at their fee and says, you know, I can't
afford this, or this does not value the--this is more than what
I get in value for the use. Some are higher than that, and some
are lower certainly, and would pay more.
Mr. Costa. My time is expiring.
Mr. Bailey. I am sorry.
Mr. Costa. Could you provide that survey to the
Subcommittee?
Mr. Bailey. Absolutely. It is part of the documents we have
submitted, sir.
Mr. Costa. OK, very good. Finally, Ms. Barile, I think you
did a wonderful job of explaining historically how your family
and others in the Huntington Lake area have done such a
tremendous job in maintaining that really special place in the
High Sierra.
The CUFFA fee is only one of the fees the cabin owners pay
to their cabins, part of the cabins. There are additional fees
in localities for various services and costs of maintenance.
Have you added them up in your own individual case, quickly?
Ms. Barile. Yes. Garbage is a huge issue. Just for those
few months that we are there, our garbage service is $154. We
have to pay additional fees because of bear-proofing bins, and
every time a garbage truck driver gets out of his truck we have
to pay for those additional costs for him unlocking a bear-
proof bin.
The insurance has almost doubled within probably the last
four years, because of being in a forest and forest fire
conditions. Our insurance is extremely difficult to get in the
mountain areas. One person who recently bought a cabin in my
tract called me saying where can I get insurance, because she
could not find any insurance. She finally was able to go to a
very, very limited type of coverage for her cabin.
Another thing that I am really, really concerned about is
how the continued increasing fees are going to affect the
taxes. We are taxed on land that we do not own. When I get a
tax bill from Fresno County, they have it broken down between
my lot, and between my cabin. And on my tax bill for the
county, for instance, during CUFFA, it was $30,000, my lot was
appraised for $30,000. So then the county gave me a bill of, I
pay $1,115 in taxes. Now my appraisal has gone up to $50,000.
So I am just terrified what is going to happen when, in 2012,
what is going to happen with my tax bill.
Then, of course, you have all of your other items that you
have in having a cabin. And there are a lot of restrictions.
You have to make sure you keep everything really clear. My
major concern with this increase is the taxes. I don't know how
I am going to afford it.
Mr. Costa. And you want to keep it for your grandchildren
and for other generations.
Ms. Barile. I want to keep it for my grandchildren, for my
children.
Mr. Grijalva. Well, we need to wrap this up because we are
way over time.
Mr. Costa. Thank you, Mr. Chairman.
Mr. Grijalva. You are welcome. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman. And I apologize for
having missed your testimony, but I want to thank all of you.
And Pete, good seeing you. I want to thank all of you for your
input on this bill.
Clearly, by the testimony we heard today and questions up
here on the assessment, the challenge we are going to face as
we move forward is going to be the benchmark that we can all
agree on to set and establish those tiers. That is going to be
the challenge that we are going to face. I think we all know
that.
But I am very pleased by the tone of this hearing. I think
that we can hopefully find a solution on that. But I want to
thank you for your input, and we will continue to seek your
input as we move forward.
But that is going to be the hardest part, we know that.
Once we can get over that, then I think that this legislation
hopefully can move very quickly, and we will have some long-
term certainty. And everybody is suggesting that is where we
want to be.
So thank you again. Good seeing you, too, Pete. I yield
back.
Mr. Grijalva. Mr. McClintock.
Mr. McClintock. Thank you, Mr. Chairman. I simply wanted to
emphasize the written testimony that tells us of realtors in
Wyoming, for example, reporting that no cabins sold since 2004.
And the three cabin owners who have tried to sell found that
``when buyers find out how expensive these are or may be, that
they laugh and then go away.''
I think that speaks volumes of the unrealistic nature of
the appraisal process. That is the market telling us that those
appraisals have literally priced these properties right out of
the market.
I would also like to emphasize, you know, there are
property rights involved in the ownership of the cabins
themselves. And property rights include a certain stability and
predictability of the individual being able to hold onto that
property. That can't be done when appraisals are going vastly
above market rates.
I think that that emphasizes just how important this
legislation is. And again, I want to compliment the author on
the bill.
Mr. Grijalva. Thank you, sir. Mr. Bishop.
Mr. Bishop. Let me also thank you for coming here and
testifying. I appreciate the testimony. It is very clear, from
everything we have heard, that the status quo is broken, and
that we need to do something to fix it very radically and very
carefully.
I had a series of questions. I will just, I will forgo all
of those in the interest of time here. Except, ma'am, you said
that your grandson was the museum docent at the age of eight?
And he is here?
Ms. Barile. Yes, and in fact he is here.
Mr. Bishop. Have him stand up. Congratulations for being
precocious and intelligent at the same time.
[Laughter.]
Mr. Bishop. Ma'am, thank you. Thank you all for being here.
Ms. Barile. You are very welcome.
Mr. Grijalva. Thank you. And let me join with Mr. Bishop in
thanking all the panelists. And I think Mr. Hastings put the
challenge, the issues that need to be resolved to move this
legislation. I agree that certainty would be very important for
the owners. And we will be glad to work with Mr. Hastings on
this as we go forward, to deal about where that base line data
is going to be, and when it kicks in.
So I appreciate it, and thank you very much.
[Whereupon, at 11:50 a.m., the Subcommittee was adjourned.]