[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
  [DRAFT BILL] H.R._, ``NATIONAL FOREST COUNTY REVENUE, SCHOOLS, AND 
JOBS ACT OF 2011''; AND H.R. 2852, ``ACTION PLAN FOR PUBLIC LANDS AND 
                        EDUCATION ACT OF 2011''
=======================================================================



                          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 TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                      Thursday, September 22, 2011

                               __________

                           Serial No. 112-63

                               __________

       Printed for the use of the Committee on Natural Resources



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                                   or
          Committee address: http://naturalresources.house.gov



                  U.S. GOVERNMENT PRINTING OFFICE
68-509                    WASHINGTON : 2012
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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman

             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann, 
    TN
Jon Runyan, NJ
Bill Johnson, OH

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                

        SUBCOMMITTEE ON NATIONAL PARKS, FORESTS AND PUBLIC LANDS

                        ROB BISHOP, UT, Chairman
             RAUL M. GRIJALVA, AZ, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Doug Lamborn, CO                     Rush D. Holt, NJ
Paul C. Broun, GA                    Martin Heinrich, NM
Mike Coffman, CO                     John P. Sarbanes, MD
Tom McClintock, CA                   Betty Sutton, OH
David Rivera, FL                     Niki Tsongas, MA
Scott R. Tipton, CO                  John Garamendi, CA
Raul R. Labrador, ID                 Edward J. Markey, MA, ex officio
Kristi L. Noem, SD 
Bill Johnson, OH
Doc Hastings, WA, ex officio

                                 ------                                

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, September 22, 2011.....................     1

Statement of Members:
    Bishop, Hon. Rob, a Representative in Congress from the State 
      of Utah....................................................     1
        Prepared statement of....................................     2
    DeFazio, Hon. Peter A., a Representative in Congress from the 
      State of Oregon, Statement submitted for the record........    45
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona...........................................     3
        Prepared statement of....................................     3
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     4
        Prepared statement of....................................     5
    Tipton, Hon. Scott R., a Representative in Congress from the 
      State of Colorado, Statement submitted for the record......    49
    Young, Hon. Don, the Representative in Congress for the State 
      of Alaska, Statement submitted for the record..............    50

Statement of Witnesses:
    Alberswerth, David, Senior Policy Advisor, The Wilderness 
      Society....................................................    28
        Prepared statement on H.R. 2852..........................    29
    Sherman, Harris, Under Secretary of Agriculture for Natural 
      Resources and Environment, U.S. Forest Service, U.S. 
      Department of Agriculture..................................     7
        Prepared statement on Draft Bill.........................     8
        Prepared statement on H.R. 2852..........................    10
    Stahl, Andy, Executive Director, Forest Service Employees for 
      Environmental Ethics.......................................    19
        Prepared statement on Draft Bill.........................    20
    Swanson, Steve, President & CEO, Swanson Group, Inc., 
      Glendale, Oregon...........................................    11
        Prepared statement on Draft Bill.........................    13
    Urquhart, Hon. Stephen H., State Senator, Utah State Senate..    25
        Prepared statement on H.R. 2852..........................    26
    Walter, Ron, Commissioner, Chelan County, Washington.........    16
        Prepared statement on Draft Bill.........................    17

Additional materials supplied:
    McMorris Rodgers, Hon. Cathy, a Representative in Congress 
      from the State of Washington, Statement submitted for the 
      record on Draft Bill.......................................    49
    U.S. Department of the Interior, Statement submitted for the 
      record on H.R. 2852........................................    46
                                     

HLEARING ON [DRAFT BILL] H.R._, TO INCREASE EMPLOYMENT AND 
EDUCATIONAL OPPORTUNITIES IN, AND IMPROVE THE ECONOMIC 
STABILITY OF, COUNTIES CONTAINING FEDERAL FOREST LANDS, WHILE 
ALSO REDUCING THE COST OF MANAGING SUCH LANDS, BY PROVIDING 
SUCH COUNTIES A DEPENDABLE SOURCE OF REVENUE FROM SUCH LANDS. 
``NATIONAL FOREST COUNTY REVENUE, SCHOOLS, AND JOBS ACT OF 
2011''; AND H.R. 2852, TO AUTHORIZE WESTERN STATES TO MAKE 
SELECTIONS OF PUBLIC LAND WITHIN THEIR BORDERS IN LIEU OF 
RECEIVING 5 PERCENT OF THE PROCEEDS OF THE SALE OF PUBLIC LAND 
LYING WITHIN SAID STATES PROVIDED BY THEIR RESPECTIVE ENABLING 
ACTS. ``ACTION PLAN FOR PUBLIC LANDS AND EDUCATION ACT OF 
2011''
                              ----------                              


                      Thursday, September 22, 2011

                     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 10:00 a.m. in 
Room 1324, Longworth House Office Building, Hon. Rob Bishop 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Bishop, McClintock, Tipton, 
Labrador, Johnson, Hastings [ex officio], Grijalva, and 
DeFazio.
    Also Present: McMorris Rodgers, Walden, and Gosar.

STATEMENT OF HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS FROM 
                       THE STATE OF UTAH

    Mr. Bishop. The Subcommittee will come to order. You heard 
the gavel bang. The Chairman notes the presence of a quorum. 
The Subcommittee on National Parks, Forests and Public Lands is 
meeting today to hear testimony on two pieces of legislation, a 
discussion draft of the National Forest County Revenue, 
Schools, and Jobs Act of 2011, and H.R. 2852, a brilliant piece 
of legislation called the Action Plan for Public Lands and 
Education Act of 2011, as well. Under Committee Rules, the 
opening statements are limited to the Chairman, the Ranking 
Member of the Subcommittee; however, I ask unanimous consent to 
include any other Member's opening statement in the hearing 
record if they are submitted to the clerk by the close of 
business today.
    Hearing no objections, that will be so ordered. I also ask 
unanimous consent that the gentlewoman from Washington, Ms. 
McMorris Rodgers, as well as our colleague from Oregon, Mr. 
Walden, be allowed to participate on the dais. Without 
objection, so ordered. To both of you, we are happy to have you 
here. If you do not want to actually sit that far down there, 
you can come closer. You will have to sit by Doc, but you can 
come closer. All right. This morning I am actually going to 
postpone my opening statement to appear in the middle of the 
panel over there when we actually talk about the APPLE bill, 
but just as a preface, we are talking about two bills that show 
the interrelationship between lands and schools. It will still 
be somewhat of a paradigm shift in that education.
    As we look at the Federal Government, which has more and 
more become an absentee landlord of the third of the government 
that it owns and spending most of its budget on wildfire 
suppression with a maintenance backlog that would make your 
head spin. Left out of this equation are schools and everything 
else. What we tried to do in the first bill, the National 
Forest County Revenue, Schools, and Jobs Act, which deals with 
SRS, Secure Rural Schools, as we know, is to give the Forest 
Service some direction and ability to actually manage a portion 
of land for the benefit of those real communities. I will note 
here for the Committee and also for those witnesses, there are 
a number of issues that need to be resolved with this proposal 
to ensure that it is going to be feasible and sustainable, so 
we are doing this very methodically. This is the way we have 
this legislative process here. I look forward to hearing the 
testimony that will address those issues that still need to be 
resolved in this particular piece of legislation. With that, I 
would like to recognize the Ranking Member, Mr. Grijalva, for 
his opening statement.
    [The prepared statement of Mr. Bishop follows:]

           Statement of The Honorable Rob Bishop, Chairman, 
        Subcommittee on National Parks, Forests and Public Lands

    This morning we will look at two pieces of legislation that 
represent a much-needed and important paradigm shift in federal lands 
policy. Public lands policy through much of our history and right up 
into the second half of the 20th century focused on developing our 
resources and utilizing public lands for the benefit of a growing and 
prosperous nation.
    Through that time, our national forests were managed for a variety 
of purposes, including secure water flows, a continuous supply of 
timber, recreation opportunities and the perpetual protection of forest 
resources. Furthermore, the federal government also recognized an 
obligation to counties when it agreed to share revenues from the 
federal lands in their backyard as well as proceeds from the sale of 
the public domain.
    Since then, we have tragically seen the federal government become 
an absentee landlord on the third of our country it currently owns. 
Instead of managing healthy and productive lands, the federal land 
management agencies now see nearly half of their budget going to 
wildfire suppression and the federal estate has a maintenance backlog 
in the billions. This lack of management has left our counties and 
schools holding the bag for the consequences of this inaction.
    The first piece of legislation we will consider today is a draft 
proposal put forth to address the expiration of the Secure Rural 
Schools program. This proposal is by no means intended to return our 
national forests to the days of being a `timber factory' as some may 
like to spin it. The draft ``National Forest County Revenue, Schools 
and Jobs Act'' is about giving the Forest Service a clear direction and 
the ability to actually manage a portion of its land for the benefit of 
rural communities while beginning to improve forest health in the 
process. For too long we have managed our national forests in a way 
that is completely devoid of the social and economic realities facing 
the counties and states that host the public's lands. There are a 
number of issues that need to be resolved with this proposal to ensure 
that it can be feasibly and sustainably implemented, but that is why we 
have this legislative process and I look forward to working to ensure 
these issues are addressed.
    The second bill is one I have introduced to address a longstanding 
issue with the federal government's abandonment of land disposal and 
fiduciary responsibility to Utah and twelve other Western States. The 
``Action Plan for Public Lands and Education Act of 2011'' would allow 
those States to select five percent of the federal land within their 
border to manage for educational purposes in lieu of the five percent 
of proceeds it was supposed to receive under the federal government's 
previous disposal policies. The APPLE Act will give these States much-
needed certainty in providing basic funding to education in response to 
a reversal of previous federal policy.
    Opponents of these two solutions have so far offered plenty of the 
usual criticism of multiple-use and upholding the sacred cow of federal 
ownership, yet conversely have offered no concrete alternatives for how 
to address the underlying problems beyond continuing to write a check 
cashed from the People's Republic Bank of China. By looking at these 
two proposals, this committee is taking an important step towards 
changing this course and reinstating a purpose of scientifically 
managing our land and resources for the greater good and not left to be 
locked away at the whim of a few who think they know best. I thank our 
witnesses for being here. I look forward to hearing their testimony and 
discussing the issue of making our public lands once again work for the 
public who live among them, taxpayers nationwide and the long-term 
health of our renewable resources.
    I now recognize the Ranking Member for his opening statement.
                                 ______
                                 

 STATEMENT OF HON. RAUL GRIJALVA, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ARIZONA

    Mr. Grijalva. Thank you, Mr. Chairman. In 2000, Congress 
passed the Secure Rural Schools Act to provide rural counties 
with a stable source of funding for schools and roads. The 
stable funding provided the certainty these communities needed 
to make important investments in transportation and education. 
Unfortunately, the 109th Congress, under Republican leadership, 
allowed the program to expire. The new Democratic majority 
reauthorized the Secure Rural Schools program in the 110th 
Congress by pursuing legislation that was both measured and 
bipartisan. I am concerned that history is about to repeat 
itself. The discussion draft that is the subject of today's 
hearing is not measured, it is not bipartisan and it represents 
a significant step back toward the old days when funding for 
local school kids was directly tied to cutting down our 
forests.
    This approach will not work, but more important, it will 
not gain enough support to pass, and thus, it will not lead to 
the continuation of the program. We stand ready to work with 
the majority on a more effective proposal. The second bill, 
H.R. 2852, would require the American people to give away 24 
million acres of public land that they own to state 
governments. The bill is apparently based on the allegation 
that Federal land ownership harms states and localities. This 
claim overlooks the wide variety of Federal programs which 
provide direct revenue to states, including payment in lieu of 
taxes, impact aid, Secure Rural Schools, and many others.
    Further, this claim ignores the significant indirect 
benefits to states from Federal lands such as travel and 
tourism dollars and the role these lands play in improving the 
quality of life and the standard of living in communities 
across the West. Our public lands are the backbone of the 
outdoor recreation economy, which generates over $730 billion 
in economic activity, 600.5 million jobs and $88 billion in 
annual state and Federal tax revenue. Funding for public 
schools is a complicated and difficult problem facing 
communities across this country. H.R. 2852 is not an 
appropriate or workable solution to these challenges. I thank 
the witnesses for joining us today, look forward to their 
thoughts and their proposals, and with that, I yield back, Mr. 
Chairman.
    [The prepared statement of Mr. Grijalva follows:]

       Statement of The Honorable Raul Grijalva, Ranking Member, 
        Subcommittee on National Parks, Forests and Public Lands

    Mr. Chairman, in 2000, Congress passed the Secure Rural Schools Act 
to provide rural counties with a stable source of funding for schools 
and roads. This stable funding provided the certainty these communities 
needed to make important investments in transportation and education.
    Unfortunately, the 109th Congress, under Republican leadership, 
allowed the program to expire.
    It took a new Democratic majority to reauthorize the Secure Rural 
Schools program in the 110th Congress by pursuing legislation that was 
measured and bipartisan.
    I am concerned that history is about to repeat itself. The 
Discussion Draft that is the subject of today's hearing is not 
measured, it is not bipartisan and it represents a significant step 
back toward the old days when funding for local school kids was 
directly tied to cutting down our forests.
    This approach will not work, but more important, it will not gain 
enough support to pass and thus it will not lead to the continuation of 
the program. We stand ready to work with the Majority on a more 
effective proposal.
    The second bill, H.R. 2852, would require the American people to 
give away 24 million acres of the public land that they own to State 
governments. The bill is apparently based on the allegation that 
federal land ownership harms states and localities.
    This claim overlooks the wide variety of federal programs which 
provide direct revenue to states--including Payment In Lieu of Taxes, 
IMPACT Aid, Secure Rural Schools and many others.
    Further, this claim ignores the significant indirect benefits to 
states from federal lands, such as travel and tourism dollars and the 
role these lands play in improving the quality of life and standard of 
living in communities across the West.
    Our public lands are the backbone of the outdoor recreation 
economy, which generates over $730 billion in economic activity, 6.5 
million jobs, and $88 billion in annual state and federal tax revenue.
    Funding for public schools is a complicated and difficult problem 
facing communities across the country. H.R. 2852 is not an appropriate 
or workable solution to these challenges.
    I thank the witnesses for joining us today and look forward to 
their thoughts on these proposals.
                                 ______
                                 
    Mr. Bishop. Otherwise you are neutral, right?
    Mr. Grijalva. I have not taken a position yet.
    Mr. Bishop. OK. We also are happy to have the Chairman of 
the full Committee, Mr. Hastings, here. By our Rules, Mr. 
Hastings, if you have an opening statement, you are recognized 
right now to give it.

 STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WASHINGTON

    Mr. Hastings. I do, and thank you very much, Mr. Chairman, 
for your courtesy, and thank you for holding this hearing on 
this draft legislation to address the expiration of the Secure 
Rural Schools program. This draft proposal is a starting point 
as we work toward a long-term solution to provide a stable 
funding stream for rural counties and rural schools. These 
forested counties have long depended on revenue from timber 
sales to help fund vital services such as education and roads. 
The Secure Rural Schools program was designed as a short-term 
solution in 2000 to continue providing funding as timber sales 
dramatically declined due to Federal over-regulation and 
harmful lawsuits, but the reality is that we cannot afford to 
forever finance this program, $500 million in annual mandatory 
spending, during the times of growing deficits and debts that 
we have in the Federal level.
    We need a new approach, one that renews the Federal 
Government's commitment to manage resources for the benefit of 
forested counties and their schools. Restoring active 
management of our national forests, as this draft proposal 
does, would provide a stable revenue stream for those counties 
and schools. It would help create new jobs, strengthen rural 
economies, promote healthier forests, it would reduce the risk 
of wildfires and decrease our reliance on foreign countries for 
timber and related products. In the State of Washington, my 
home state, the Forest Service is responsible for managing over 
nine million acres of forest land contained within seven 
national forests. According to the Washington Department of 
Natural Resources, timber harvests in Washington have declined 
by 84 percent over the past decade.
    The result has been a staggering loss of jobs and economic 
productivity in these forested communities. Washington's 
national forests each year grow an additional 4.5 billion board 
feet of timber while about a third as much, 1.3 billion, simply 
dies, yet the Forest Service only harvests about two percent of 
the amount. In contrast, the State of Washington, which manages 
a trust about a quarter of the amount of the Federal, produces 
700 percent more for local governments and universities and 
school construction as they are mandated on a state level. 
Seven hundred percent more with about a quarter of the acreage. 
As stated earlier, declining forest revenues and poor 
management directly impacts real people and costs real jobs.
    Just last month, Hampton Lumber announced the layoff of an 
additional 80 workers and cut operations in Randle, Washington, 
a small town adjacent to the Gifford Pinchot National Forest, 
and that was due to declining supply of timber from the forest. 
So, Mr. Chairman, this draft proposal seeks to stop and reverse 
this trend. It would require the Forest Service to more 
actively manage national forests, making them healthier and 
more economically viable for the local governments. This 
legislation encourages local Federal forest managers to work 
with the states, with the tribes and local governments to 
identify priority projects that would increase revenues and 
manage forests in an environmentally sensitive and proactive 
way.
    Now, I understand there are efforts underway to address the 
2.5 million acres of Bureau of Land Management, BLM, lands, 
particularly in western Oregon which are known as the O&C 
grants. I look forward to working with my colleagues in 
developing a workable solution for them on this legislation, 
and this draft legislation has a title specifically left blank 
for them to work on--something that would be applicable to BLM. 
This draft legislation puts forth a long-term solution as the 
clock ticks on the expiration of this program. It will continue 
our effort to achieve a more secure and dependable source of 
revenue for counties and the schools in these rural 
communities. With that, thank you again for the courtesy, and I 
yield back my time.
    [The prepared statement of Mr. Hastings follows:]

Statement of The Honorable Doc Hastings, Chairman, Committee on Natural 
  Resources, on H.R.__, ``National Forest County Revenue, Schools and 
                           Jobs Act of 2011''

    Thank you, Mr. Chairman, for holding this hearing on draft 
legislation to address the expiration of the Secure Rural Schools 
program. This draft proposal is a starting point as we work towards a 
long-term solution to provide a stable revenue stream for rural 
counties and schools.
    These forested counties have long depended on revenue from timber 
sales to help fund vital services such as education and roads. The 
Secure Rural Schools program was designed as a short-term solution in 
2000 to continue providing funding as timber sales dramatically 
declined due to federal overregulation and harmful lawsuits. But the 
reality is that we cannot afford to forever finance this program--$500 
million in annual mandatory spending--during these times of growing 
debts and deficits.
    We need a new approach--one that renews the federal government's 
commitment to manage resources for the benefit of forested counties and 
their schools.
    Restoring active management of our national forests, as this draft 
proposal does, would provide a stable revenue stream for counties and 
schools. It would create new jobs, strengthen rural economies, promote 
healthier forests, reduce the risk of wildfires, and decrease our 
reliance on foreign countries for timber and related products.
    In the State of Washington, the Forest Service is responsible for 
managing over 9 million acres of forest land contained within seven 
different national forests. According to the Washington Department of 
Natural Resources, timber harvests in Washington have declined by 84 
percent over the past decade. The result has been a staggering loss of 
jobs and economic productivity in rural forest communities.
    Washington's national forests each year grow an additional 4.5 
billion board feet of timber, while about a third as much--1.3 billion 
board feet--simply dies.
    Yet, the Forest Service harvests only about 2 percent of the 
amount. In contrast, the State of Washington, which manages in trust 
about a quarter of the amount of forest lands of those managed by the 
Forest Service, produces 700% more than that for local governments, 
universities and state school construction.
    As stated earlier, declining federal forest revenues and poor 
management directly impacts real people and costs real jobs. Just last 
month, Hampton Lumber announced the layoff of an additional 80 workers 
and cut operations in Randle Washington, a small town adjacent to the 
Gifford-Pinchot National Forest, due primarily to a declining supply of 
timber from the forest.
    Mr. Chairman, this draft proposal seeks to stop and reverse this 
trend. It would require the Forest Service to more actively manage 
national forests, making them healthier and more economically viable 
for local governments to use for schools and other needs. The 
legislation encourages local federal forest managers to work with 
states, tribes and local governments to identify priority projects, 
increase revenues, and manage forests in an environmentally sensible 
and proactive way.
    I understand efforts are underway to address the 2.5 million acres 
of Bureau of Land Management-owned forest lands in western Oregon known 
as the ``O&C Grant'' lands, and I look forward to working other 
colleagues on developing a workable solution as part of this 
legislation. The draft legislation has a Title II to specifically 
accommodate additional language to address other federal land 
management issues such as ``O&C.''
    The draft legislation puts forth a long-term solution, as the clock 
ticks on the expiration of the current Secure Rural Schools program. It 
will continue our effort to achieve a more secure and dependable source 
of revenue for counties and schools and provide a lifeline to these 
rural economies.
                                 ______
                                 
    Mr. Bishop. Thank you, Mr. Chairman. I appreciate that. We 
will next hear the witnesses in the order that they are there. 
We will first talk, have, the witnesses will be talking about 
the Secure Rural Schools issue. Then I am going to take the 
rest of my opening statement to introduce the APPLE and the 
last two witnesses will be talking about the APPLE bill. We 
have the witnesses, going from left to right, Mr. Harris 
Sherman, the Under Secretary of Agriculture for Natural 
Resources and Environment from the Forest Service, the 
Department of Agriculture. We appreciate you being here. Mr. 
DeFazio, I notice that two of the next three witnesses are your 
constituents. I don't know if you would like the opportunity to 
introduce them to us.
    Mr. DeFazio. Thank you, Mr. Chairman. I appreciate the fact 
that we have two witnesses here from my district. The first 
would be Steve Swanson, President & CEO of Swanson Group, 
Glendale, Oregon, a company that has an innovative and updated 
mill and is in need of timber resources. He will make that case 
to the Committee. Then second would be Andy Stahl with the 
Forest Service Employees for Environmental Ethics, and he will 
be testifying as to a potential approach on the O&C lands to 
provide revenue, a basis for our counties' conservation 
objectives and timber production. Thank you, Mr. Chairman.
    Mr. Bishop. Thank you. Between those two witnesses is Mr. 
Ron Walter who is the County Commissioner from Chelan County. 
Did I say that closely? Chelan County. Sorry. In Washington 
State. We appreciate those witnesses being here. They will all 
testify to the National Forest County Revenue, Schools, and 
Jobs Act of 2011. Next to them also will be Stephen Urquhart 
who is a state Senator from the State of Utah who was involved 
with the Council of State Governments West in the formulation 
of the APPLE concept, as well as Mr. Dave Alberswerth who is 
the Senior Policy Advisor for The Wilderness Society, and they 
will be talking about the APPLE bill. So, with that, Mr. 
Sherman, I understand you are somewhat under the weather. We 
apologize for that. If, you know, you have to leave us, we will 
understand. We would like you to start off talking about 
either, or both, bills.

STATEMENT OF HARRIS SHERMAN, UNDER SECRETARY OF AGRICULTURE FOR 
    NATURAL RESOURCES AND ENVIRONMENT, FOREST SERVICE, U.S. 
                   DEPARTMENT OF AGRICULTURE

    Mr. Sherman. Thank you, Mr. Chairman. My name is Harris 
Sherman. I am Under Secretary at USDA. I would like to offer a 
couple of points which amplify on my written testimony. At the 
outset, I want to emphasize that we recognize the challenges 
and the difficulties facing rural communities within, and 
adjacent to, the national forests. The struggles of these 
communities are real and we want to work with Congress to find 
immediate and permanent solutions. We also recognize the great 
concern that we all have over the Federal deficit which must be 
addressed both on a short-term and a long-term basis. President 
Obama has provided his recommendations to extend the Secure 
Rural Schools Act for another five years phasing down the 
program during that time while we find a more permanent 
solution. The two bills before this Committee have just come to 
our attention literally in the past few days. We need more time 
to provide analysis and comment, but as a general matter, based 
on what we now know, we are strongly opposed to each for 
reasons which I will identify. Before doing so, I want to 
emphasize that the Forest Service is working on thousands of 
projects on the national forests which provide jobs and income 
to rural communities. These projects return over $1 billion to 
the Federal treasury and some $19 billion in gross domestic 
product. The projects include recreation, oil and gas, timber, 
mining, grazing and a host of other activities. As to timber 
production, which I know is of great concern to this Committee, 
the Forest Service is working hard to turn the corner to bring 
us out of a 15 to 20 year downward slide. For the last two 
years, timber sales and production have started to increase. 
This is not by accident. The Forest Service is working hard to 
foster a collaboration among stakeholders. The Forest Service 
is promoting large landscape scale projects often involving 
hundreds of thousands of acres where there is greater output 
and greater efficiencies associated with those projects. The 
Forest Service is developing new approaches to NEPA which are 
more adaptive, more focused and result in shorter time periods 
to accomplish completion of NEPA. The Forest Service is 
utilizing more streamlined administrative processes, and the 
Forest Service is building partnerships at the local level to 
help us do the work, and in certain cases, to share in the 
cost. We are pleased to say that appeals are decreasing 
significantly in timber sales and we are starting to get more 
work done. These projects will lead to greater production and 
greater restoration of our national forests. We will be better 
able to address challenges, such as a Bark Beetle infestation, 
and to create jobs in rural communities. We will need Congress' 
help to achieve these goals through a number of new approaches 
or extensions of existing approaches, such as extension of the 
stewardship contract authority, your help in our achieving an 
integrated resource budget, and your help in providing the 
resources we need to get the job done. As to the two pending 
bills, we oppose these bills for the following reasons. First, 
rather than fostering collaboration, we believe the bills could 
easily polarize stakeholders against each other. We cannot 
afford to go backwards at this critical juncture. Second, H.R. 
2852 would transfer national assets to a limited number of 
states and counties. This is certain to be resisted on multiple 
levels. Third, both bills will weaken longstanding 
environmental protections. Fourth, both bills will result in a 
diminution of multiple uses which are likely to impact 
recreation, wildlife and other important uses on the national 
forests. Both bills appear to complicate also the Federal 
deficit problem rather than improving it. So for these reasons, 
we oppose the bills at this current time. I would be happy to 
answer any questions that you may have. Thank you, Mr. 
Chairman.
    Mr. Bishop. Thank you. Mr. Swanson? Let me, before you 
start here. Mr. Sherman has been here repeatedly. We will maybe 
invite you back once the agency has a chance to actually study 
the bills again for an update of your testimony. For the rest 
of you who are here, your written statements will appear in the 
record. What we would like now is an oral statement to 
complement that. You are limited to five minutes. In front of 
you is the time clock that you have there. When it is green, 
you are safe, when it hits yellow, you have a minute left, when 
it hits red, I really would ask you if you could summarize and 
quit before I have to throw a gavel at you. So, with that, Mr. 
Swanson, you got five minutes. You are recognized. Please. You 
need to turn on the mic and put it right up to your face.
    Mr. Swanson. How is that?
    Mr. Bishop. Is it on?
    Mr. Swanson. It says talk.
    Mr. Bishop. OK. You are ready.
    [The prepared statements of Mr. Sherman follow:]

Statement of Harris Sherman, Under Secretary for Natural Resources and 
Environment, United States Department of Agriculture, on the Discussion 
   Draft for the National Forest County, Revenue and Jobs Act of 2011

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to present the Administration's views regarding the 
Discussion Draft for the National Forest County Revenue, Schools and 
Jobs Act of 2011.
    The Discussion Draft proposes to establish a trust to provide 
counties with a dependable source of revenue to support public 
education and public roads, and to require the Secretary of 
Agriculture, as trustee, to carry out trust projects to generate 
sufficient receipts to meet an annual revenue requirement on each unit 
of the National Forest System (NFS). This annual revenue requirement 
would be calculated as a predetermined percentage, to be established by 
the legislation for all NFS units nationwide, of each unit's average 
annual gross receipts between 1980 and 2000, and create a statutory 
right for a county to sue the Secretary for breach of fiduciary duty if 
the annual revenue requirement is not met. The draft would also 
incentivize Forest Service employees to exceed a minimum sale level of 
timber, to be calculated as a nationally predetermined percentage of 
the annual average of certain volumes of timber harvested from each 
unit between 1980 and 2000. In addition, the draft would provide 
different procedures for environmental analysis and administrative 
review of trust projects that would effectively waive compliance under 
several existing laws including the National Environmental Policy Act 
(NEPA), the National Forest Management Act (NFMA), the Endangered 
Species Act (ESA), and the administrative review process under the 
Appeals Reform Act (ARA). The draft would also preclude judicial review 
for all projects undertaken under the authority of the proposed bill.
    Historically, public education and roads in eligible states 
containing NFS lands have been partially supported by federal payments, 
under the authority of the Act of May 23, 1908 (P.L. 60-136) and other 
laws, equal to 25% of receipts generated by NFS units within their 
boundaries from the proceeds of timber sales, grazing permits, 
recreation permits and fees, and other activities. After receipts fell 
from historical highs in the 1980s and early 1990s, the Secure Rural 
Schools and Community Self-Determination Act of 2000, (Secure Rural 
Schools Act, or SRS) was enacted to provide temporary funding to help 
rural communities make the transition through stark changes in our 
natural resource economy, particularly in forest-dependent communities 
of the West. The last payment under the current SRS authority, as 
amended and reauthorized in 2008, is for the current fiscal year, which 
ends on September 30.
    We understand the predicament this creates for rural communities, 
and recognize how important federal payments have been in supporting 
public schools and roads in counties all across the country, 
particularly in rural areas. That is why the President's 2012 Budget 
includes a proposal to reauthorize the Secure Rural School Act for five 
more years.
    In presenting an alternative means of addressing this predicament, 
the proposal contained in the Discussion Draft calls for substantial 
consideration and debate--not only for the importance of the topics it 
addresses, but also for the essential questions it suggests about the 
management of public land in our Nation. For that reason in particular, 
the time between our receipt of your invitation to testify about this 
draft and the date of today's hearing was not sufficient to fully 
analyze the proposal. We must therefore request to reserve the right to 
submit additional comments after a bill is introduced. In the meantime, 
however, the Administration will take this opportunity today to point 
out several serious concerns that this proposal raises.
    First, while we appreciate the need to consider ways in which 
compliance with environmental analysis may be expedited in appropriate 
circumstances, we are opposed to the environmental reporting proposed 
in this draft because it does not provide for meaningful analysis or 
public input. Even though (and partly because) the proposal would 
preclude trust projects from judicial review, these changes would 
invite more, not less, controversy over timber sales on NFS lands, and 
potentially undermine or cause a chilling effect on the positive 
collaboration that has substantially improved how the National Forests 
are managed.
    We are also concerned that the obligation to meet any predetermined 
rate of revenue generation, let alone one based on a relatively short 
time period when circumstances supported peak timber production, 
ignores the temporal and geographic variability of landscape and 
economic conditions, thereby exposing the Federal government to 
liability for circumstances beyond its control. This obligation could 
also have a potentially significant adverse impact on the federal 
deficit, depending on the percentage set for the definition of annual 
revenue requirement.
    Finally, and perhaps most troubling, this proposal creates a false 
expectation that we can return to the peak timber production levels of 
decades past. However, the market conditions that supported those 
levels simply no longer exist, regardless of who manages the land. The 
fact that receipts from Forest Service timber sales have fallen from 
almost $1.2 billion in 1990 to just under $100 million in 2009 is not 
only a result of the decreased volume of timber harvested and sold by 
the agency, but also the value of the timber, the costs of producing 
it, and the market for forest products in general. The decrease in the 
value of timber harvested on NFS lands over this period, from $113.10/
MBF (thousand board feet) to $48.60/MBF, is to a considerable degree 
the result of a broader decline in timber prices associated with the 
slumping housing market, changing import/export dynamics, increased 
transportation costs, and other market factors. Obligations to meet 
unrealistically high expectations for revenue could create difficult 
multiple-use dilemmas compelling managers to pursue commodities with 
the highest possible returns at the expense of other important 
objectives.
    Meanwhile, it is important to note that the draft's emphasis and 
unrealistic expectations regarding timber receipts overlooks the value 
of other receipts and broader revenue generation by the National 
Forests overall. NFS lands are estimated to be producing over $1 
billion in receipts to the U.S. Treasury in 2011. For the national 
economy, NFS lands directly contributed an estimated $19 billion to GDP 
in 2005, less than a quarter of which came from timber harvest; 
recreation provided the largest contribution, at 43.8%. On many 
National Forests throughout the West, revenues deriving from timber 
represent an even smaller proportion of economic activity.
    The Administration recognizes the important role of the timber 
industry in maintaining rural communities, particularly in light of the 
urgent forest restoration needs many areas face in light of the 
expanding beetle epidemic and the ongoing needs to reduce the risk of 
uncharacteristic wildfire effects--especially in the wildland-urban 
interface. That's why the Forest Service is investing considerable 
effort in ways to maximize the effectiveness of our collaborative 
management procedures: in streamlining our implementation of NEPA to 
anticipate the needs of large landscapes and watersheds; in maximizing 
the use of special authorities such as pre-decisional administrative 
review and stewardship contracting; and in exploring ways to make more 
efficient use of scarce budgets through the Integrated Resource 
Restoration budget line item. Collaborative efforts such as these must 
be fostered and broadened if local communities are to reap increasing 
benefits from their National Forests.
    While we recognize the ongoing reliance of rural counties on 
sharing receipts from NFS land, we also recognize the need to manage 
the federal budget thoughtfully and deliberately for deficit reduction, 
and would like to work with the Congress to develop a proposal that 
addresses both rural needs and deficit concerns.
    But it is just as important to recognize that the National Forests, 
in their 100 year-plus history, are valued by Americans throughout the 
Nation, not only for their wood, mineral, and grazing resources, but 
also for outdoor recreation, as a place to recharge, for wildlife 
habitat in a rapidly developing world, as a place to enjoy historic, 
scenic, and cultural treasures, and for clean water to millions of 
downstream users. These dynamic values serve the urban public as well 
as the rural, the national interest as well as interest of individual 
states. We would like to work with the Congress on a solution that 
honors all of our Nation's interests over the long term.
    This concludes my prepared statement and I would be pleased to 
answer any questions you may have.
                                 ______
                                 

Statement of Harris Sherman, Under Secretary for Natural Resources and 
Environment, United States Department of Agriculture, on H.R. 2852, The 
         Action Plan for Public Lands and Education Act of 2011

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to present the Administration's views regarding H.R. 2852, 
the Action Plan for Public Lands and Education Act of 2011. The 
Administration strongly opposes H.R. 2852.
    H.R. 2852 authorizes land grants to 13 western states for 
establishment of a permanent fund to support public education in each 
respective state. The amount of land to be granted shall equal five 
percent of the acres of federally owned land with the state, and shall 
be selected by each state from lands administered by the Bureau of Land 
Management (BLM) and the U.S. Forest Service (USFS) within their 
borders in such manner as each state's legislature may provide. Most 
National Forest System (NFS) lands would be available for selection, 
except for those specifically designated as Wilderness Areas, 
Wilderness Study Areas, National Historic Sites, National Monuments, or 
National Natural Landmarks. The selection and transfer processes would 
not be considered to be a major Federal action for the purposes of 
section 102(2)(C) of the National Environmental Policy Act of 1969. 
Mineral, oil and gas rights associated with the selected lands would 
also become property of the state, except where federal leases are 
currently in effect, in which case the rights would transfer to the 
state upon expiration of the federal lease.
    Historically, public education in eligible states containing NFS 
lands has been partially supported by federal payments, under the 
authority of the Act of 1908 and other laws, equal to 25% of receipts 
generated by NFS units within their boundaries from the proceeds of 
timber sales, grazing permits, recreation permits and fees, and other 
activities. After receipts fell from historical highs in the 1980s and 
early 1990s, the Secure Rural Schools and Community Self-Determination 
Act of 2000, (Secure Rural Schools Act, or SRS) was enacted to provide 
temporary funding to help rural communities make the transition through 
stark changes in our natural resource economy, particularly in forest-
dependent communities of the West. The current SRS authority, as 
amended and reauthorized in 2008, expires at the end of this month.
    We understand the predicament this creates for rural communities, 
and recognize how important federal payments have been in supporting 
public schools in counties all across the country, particularly in 
rural areas. That is why the President's 2012 Budget includes a 
proposal to reauthorize the Secure Rural School Act for five more 
years.
    However, as an alternative means of addressing this predicament, we 
believe that H.R. 2852 is counterproductive and contrary to public land 
management objectives. Therefore, the Administration strongly opposes 
the bill. Its proposed transfer of NFS land to States could result in 
weakened environmental protections and a diminution of the multiple-use 
mandate that currently guides the management of these lands, while the 
legislation's failure to address many key uncertainties concerning 
access, liability, and other issues invites controversy and litigation. 
We are also opposed to waiving the National Environmental Policy Act 
which provides for meaningful analysis and public input that helps 
defuse public controversy develop the positive collaboration that has 
substantially improved how the National Forests are managed. 
Additionally, given the presumption that States are likely to select 
the lands that generate the greatest amount of revenue, the loss of 
income to the Treasury would increase the federal deficit, which the 
Administration and Congress are working so hard to reduce.
    But our greatest concern about this legislation is more fundamental 
in nature. The notion that land held in trust for the Nation as a whole 
should be disposed of for the sole benefit of the residents of an 
individual state runs contrary to the principle that these lands are 
important to all Americans.
    While we recognize the immediate reliance of rural counties on 
sharing receipts from NFS land, we also recognize the need to manage 
the federal budget thoughtfully and deliberately for deficit reduction, 
and would like to work with the Congress to develop a proposal that 
addresses both rural needs and deficit concerns.
    But it is just as important to recognize that the National Forests, 
in their 100 year-plus history, are valued by Americans throughout the 
Nation, not only for their wood, mineral, and grazing resources, but 
also for outdoor recreation, as a place to recharge, for wildlife 
habitat in a rapidly developing world, as a place to enjoy historic, 
scenic, and cultural treasures, and for clean water to millions of 
downstream users. These dynamic values serve the urban public as well 
as the rural, the national interest as well as interest of individual 
states. We would like to work with the Congress on a solution that 
honors all of our Nation's interests over the long term.
    This concludes my prepared statement and I would be pleased to 
answer any questions you may have.
                                 ______
                                 

  STATEMENT OF STEVE SWANSON, PRESIDENT & CEO, SWANSON GROUP, 
                              INC.

    Mr. Swanson. OK. Thank you very much. Good morning, 
Chairman Bishop, Congressman DeFazio, and Members of the 
Subcommittee. I am Steve Swanson, President & CEO of Swanson 
Group, a family owned forest priced company that dates back to 
1951 when my father and uncle established Superior Lumber 
Company in Glendale, Oregon. I appreciate the opportunity to 
appear before you today to discuss the long overdue need for 
legislation to fix the senseless forest policies devastating 
our rural communities' funding for local governments and 
schools, as well as the health of our forests. The Swanson 
Group currently operates two sawmills and two plywood mills and 
employs about 650 people in some of the most economically 
distressed communities in rural Oregon. Like most of the 
domestic industry, we have invested heavily to upgrade all of 
our mills with state-of-the-art technology and retooled them to 
utilize the smaller diameter timber we were told would be 
coming from our Federal forest.
    The only problem is that timber has not come. Mr. Chairman, 
my hometown of Glendale, Oregon, population 800, has 
experienced the same travails as many other rural forested 
communities as the timber wars have raged over the past two 
decades. Many of the employees in my mills are folks I grew up 
with. Having to stand in front of them and tell them they no 
longer have a job is a very real and very personal thing. It 
makes it all the harder when the solutions are, at least on 
their face, so easy. An analogy I like to use is that our 
situation is akin to living in a refrigerator full of food 
while starving to death. Our communities are literally 
surrounded by some of the most productive timber land in the 
world.
    However, here in southwest Oregon, the Federal Government 
controls nearly 60 percent of the timber land through the U.S. 
Forest Service and the BLM O&C lands. Without an adequate and 
dependable supply of timber coming from these forests, our 
communities and industries will continue to suffer. This is 
what makes this Committee's work to find a comprehensive 
solution to the problem so important. County government is 
great, but it alone does not build a healthy community. My 
community does not need another handout, my community needs 
jobs, stability and predictability. By returning to 
responsible, sustainable forest management, we can have all 
those things. The discussion draft recently shared by this 
Committee would provide counties and communities a lifeline.
    By utilizing a trust concept you can ensure that local 
county governments, as originally intended, get their share in 
a predictable level of timber receipts. You can, while 
protecting these important safeguards, ensure that professional 
foresters are able to do their jobs without the threat of 
endless lawsuits. This certainty will allow communities and 
businesses like mine across the country to plan for the future 
as certainty is returned to Federal forest management. Finally, 
we can begin to address the serious forest health issues 
plaguing our national forests. In Oregon's Federal Forest and 
Clearing Bureau of Land Management, our Federal forests grow 
approximately 10 billion board feet per year.
    Of this growth, 2.75 billion board feet a year dies through 
natural causes. We currently harvest approximately 525 million 
board feet. To sum it up, under our current policy rural 
communities wither and Federal land managers in Oregon are able 
to sell and harvest approximately five percent of annual growth 
and 28 percent of annual mortality. I am certain that the 
figures are equally as stark across the country. One need not 
wonder why we watch our forests go up in smoke every year. Of 
course we are told these unnaturally severe fires are good for 
the forest. We all know better. Of course, when they burn we 
cannot harvest any of the dead burn material to provide jobs, 
produce revenue and replant new forests for future generations. 
The draft bill would help with all these issues. It is time 
that we shift the paradigm.
    The level of harvest required to accomplish this is less 
than dies in the forest each year and far less than grows each 
year. It is also far less than we harvested during the 1970s 
and 1980s. I have provided the Committee information on the 
Washington DNR timber management program in comparison to the 
U.S. Forest Service in Washington. If the Forest Service were 
to focus on truly managing just a small portion of its land 
base it could generate similar results in many areas. I have 
also provided the Committee an estimate of the harvest levels 
that would be required to meet the 20 year average of receipts 
in the legislation for Oregon and Washington. One final remark.
    I think it is important that the Committee has expressed 
the willingness to address the paralysis impacting the BLM O&C 
grant lands in western Oregon. Their unique nature, purpose, 
intended use and configuration make them very critical to my, 
and all other communities in western Oregon. Mr. DeFazio, Mr. 
Walden and Mr. Schrader have all expressed a willingness to 
devise a trust-like solution to end the management gridlock on 
the O&C lands while also doing positive things for 
conservation. I trust that the Committee will work with them to 
include such a proposal. In conclusion, the time to act is now. 
It is time that our Federal forests again start providing for 
rural America. I thank you for this opportunity and for all 
your work on the draft legislation and welcome any questions 
you may have.
    Mr. Bishop. Thank you, Mr. Swanson. Timed that perfectly. 
Commissioner Walter.
    [The prepared statement of Mr. Swanson follows:]

   Statement of Steve Swanson, President & CEO, Swanson Group, Inc., 
Glendale, Oregon, on National Forest County Revenue, Schools, and Jobs 
                              Act of 2011

    Good morning Chairman Hastings, Chairman Bishop, Congressman 
DeFazio and members of the Subcommittee. I am Steve Swanson, President 
& CEO of Swanson Group, Inc., a family owned forest products company 
that dates back to 1951 when my father and uncle established Superior 
Lumber Company in Glendale, Oregon. I appreciate the opportunity to 
appear before you today to discuss the long overdue need for 
legislation to fix the senseless federal forest policies devastating 
our rural communities, funding for local governments and schools, as 
well as the health of our forests.
    The Swanson Group currently operates two sawmills and two plywood 
mills and employs about 650 people in some of the most economically 
distressed communities in rural Oregon. Like most of the domestic 
industry we have invested heavily to upgrade all of our mills with 
state-of-the-art technology and retooled them to utilize the smaller 
diameter timber we were told would be coming from federal forests. It 
has not materialized. Our industry can compete with anyone in the 
world, if--and it is a big if--we can secure the raw materials required 
to run our operations.
    Mr. Chairman, my hometown of Glendale, Oregon (population 800) has 
experienced the same travails as many other rural, forested communities 
as the ``timber wars'' have raged over the past two decades. Our 
company experienced it first hand when on the morning of January 2, 
2001 our main office was destroyed by an arson attack by members of the 
Earth Liberation Front. As shocking as that attack was it is far less 
serious than economic and social ills primarily caused by the paralysis 
affecting the management of our federal forests.
    We have largely ignored this paralysis over the past twenty years 
and opted to dole out billions in Secure Rural School (SRS) payments in 
an effort to cover up the severity of the problem facing our rural 
forested communities. The SRS payments have helped maintain essential 
government services, but they do not make up for the lack of jobs and 
opportunity available to local residents of most rural, forested 
communities.
    Over the past twenty years of Secure Rural Schools and Spotted Owl 
Guarantee payments just about every indicator of rural economic health 
has declined in many forested states, including Oregon. The disparity 
in pay between Oregon's metropolitan and rural counties, which was once 
modest, has quadrupled. Rural Oregon's per-capita income is now only 
74% of the national average; while Portland's per-capita income is at 
or above the national average. 46% of rural Oregon students qualify for 
free or reduced lunch. Unfortunately, this is the norm in many rural 
communities across the country, particularly those where federal land 
ownership is highest.
    Here in southwest Oregon nearly 6o% of the forestland is under 
federal control, whether it be the Bureau of Land Management Oregon & 
California (O&C) Grant Lands or the US Forest Service. In my home 
county of Josephine the federal government controls nearly 74% of the 
forest. Most rural communities that are dominated by federal forest 
ownership can't simply create alternative industries they defy the 
realities of their geography. With some of the most productive 
forestland in the entire world we would be foolish to even suggest it. 
Instead we should be promoting the responsible, sustainable management 
of our federal forests.
    Mr. Chairman, I know this hearing is being held today because the 
Committee is well aware of the dire conditions our rural communities 
and forests face. There is little doubt that the health of our forests 
continues to decline due to overstocking, beetle and disease 
infestations and catastrophic wildfire. Unless action is taken to 
sustainably manage these forests I believe we will continue to see 
massive fire seasons like those experienced across the southwest this 
year. These catastrophic events threaten the old growth forests, water 
quality and wildlife habitat many advocates have spent their careers 
trying to save.
    The fundamental question before this Congress as it considers this 
legislation and the pending sunset of the SRS program is what 
responsibility do we have to the rural communities and residents that 
surround our federal forests? I for one believe they deserve far more 
than the systemic poverty, joblessness and uncertainty that have come 
with federal SRS timber payments. They deserve an opportunity to make 
an honest living and provide for their families while being stewards of 
the forests in their backyards. They deserve to see their children have 
the same opportunity to succeed as their urban and suburban 
counterparts.
    There will undoubtedly be opposition to taking action from those 
who wish to see no management of our federal lands. I hope the Congress 
will see beyond the typical rhetoric and work to pass comprehensive 
legislation. A candid look at the facts on the ground is necessary to 
understand the relatively modest levels of timber harvest needed to 
generate significant revenue for counties. I have prepared a document 
that outlines the estimated harvest levels required to generate the 
legislation's annual revenue requirement for counties in Oregon and 
Washington. The required harvest levels are below the amount of timber 
that dies on the forest each year. It is small portion of the annual 
growth of the forest and but a fraction of the current standing volume 
on these forests. Many would argue that it isn't enough to maintain 
forest health and provide robust employment opportunities in rural 
communities.
    Some will also argue that there isn't sufficient demand for 
increased timber harvests from federal lands to fund rural counties. I 
disagree. One of the greatest threats to the future of our four mills 
is the lack of an adequate and predictable log supply from federal 
forests. I can say with the utmost certainty that without a change in 
forest policy more mills will close. Only 4-years ago my company 
employed 1200. With a reliable timber supply we could begin to rehire 
and add jobs. Without it, more will be lost.
    Mills across the country are struggling with log shortages. While 
the current state of the U.S. housing market continues to affect 
domestic demand, international demand for lumber has seen significant 
growth as countries like China and India continue to develop. We are 
feeling the effect of this demand in the Pacific Northwest as exports 
of lumber and raw logs to Asia have spiked. In fact, US lumber exports 
to China tripled between 2009 and 2010. Conservative forecasts indicate 
that total Chinese wood demand is likely to grow by 10-15% a year 
through 2015, which will create an opportunity for U.S. mills if they 
can secure an adequate log supply. We should also remember that 
domestic demand will increase again as housing starts returns to a more 
typical level of 1.5 million per year. Without action I fear that we 
will lose many more mills in areas with heavy federal forest ownership, 
similar to what has occurred in the Southwest.
    I believe the draft legislation you are considering includes 
critical components to providing our rural counties and communities the 
certainty they deserve. While I know the legislative process is dynamic 
and changes are likely to be made as the legislation progresses, I hope 
you will maintain these key concepts.
    Establishment of a trust obligation. The legislation would 
establish a revenue trust obligation between the Forest Service and 
rural forested counties and schools. It appears that the trust mandate 
being considered would be more than achievable for the agency since it 
is only based on generating a portion of a broad average of annual 
historical receipts. In Chairman Hastings' state the Washington 
Department of Natural Resources (DNR) manages 2.2 million acres of 
state timber trust land under a beneficiary trust mandate. Between 
2000-2010 the DNR generated $128.6 million in timber receipts annually 
for county, state school construction, hospital and university trust 
beneficiaries. By comparison, the Forest Service generated 
approximately $13.4 million in gross receipts annually during a 
comparable period on the 9.3 million acres it manages in Washington.
    A trust obligation is essential to providing certainty to local 
communities and clear direction to the agency, which has gradually 
moved away from recognizing any obligation to the economic and social 
well-being of these rural communities. A trust obligation would also 
require the Forest Service to give greater consideration to the 
economics of the timber projects it proposes. This is not the case 
today as the agency frequently opts for costlier project designs and a 
light touch that doesn't treat the forest effectively or economically.
    Administrative efficiencies. The Forest Service is mired in endless 
red tape, process and procedural requirements in need of reform if we 
expect the agency to deliver even modest returns to local governments. 
These burdensome and often senseless requirements should be streamlined 
for county revenue trust projects. The legislation would require public 
comment, appeals and the preparation of an environmental report 
outlining the effects of revenue projects. It would limit these 
streamlined authorities to only the projects required to meet the 
revenue requirement.
    The paralysis crippling the agency cannot be solved 
administratively. For example, in the Pacific Northwest the Forest 
Service and BLM must comply with ``Survey and Manage'', a protocol that 
requires agency employees to survey (at times on their hands and knees) 
for approximately 300 different species--including fungi and lichens--
before most timber harvest activities can take place on the small 
fraction of the forest we manage today. This requirement is in addition 
to the current requirements of NEPA and ESA and makes no sense when you 
consider the vast amount of the forests dedicated to non-timber uses. 
The agencies have attempted to replace this costly and time consuming 
requirement with existing special status species programs three times 
without success.
    Informal estimates we have collected from the agencies indicate 
that they spend nearly 75% of their land management budgets meeting 
planning, regulatory and legal hurdles. The cost and time required to 
meet these hurdles is the primary limiting factor to increasing forest 
management activities since few resources remain for project layout, 
preparation and implementation costs. The Forest Service's current cost 
structure is broken and results in what some claim are ``below cost 
timber sales.'' However, state management of timber trust lands in 
states like Washington, Montana, Idaho, and Minnesota shows that 
government can generate solid returns for the public by applying 
sustained yield forest management principles for the benefit of current 
and future generations.
    Revolving management fund. The legislation allows the Forest 
Service to retain 20% of the receipts generated for future project 
planning and implementation costs. In light of the fiscal challenges 
facing our nation any legislative solution should also generate a large 
portion of the funding the agency will need to meet the trust mandate. 
This funding should also allow the agency to rebuild their forest 
management staff expertise. For comparison purposes, the Washington DNR 
receives no state general funding for the management of its timber 
trust lands and covers its management expenses by keeping 25% of the 
gross receipts generated. The revolving management fund may also reduce 
the Forest Service's reliance on Congressional appropriations.
    Transition period. The legislation also provides a transition 
period for county receipt revenue as forest management activities ramp 
up. In many areas of the country, including much of the Midwest, South 
and Pacific Northwest, I believe the transition can be fairly short. In 
portions of the Intermountain West and Southwest the transition is 
likely to take a little longer due to the loss of industry 
infrastructure. However, private sector companies will invest in new 
manufacturing infrastructure if they have certainty that a reliable raw 
material base exists. I support the need to provide county governments 
and schools certainty in the short term, but I believe it is critical 
that we finally deliver on the promise of a return to responsible 
forest management that has been unfulfilled following the last two 
reauthorizations.
    Inclusion of Bureau of Land Management O&C lands. The Committee has 
also indicated a willingness to consider a legislative trust proposal 
to resolve the gridlock affecting over 2 million acres of largely 
checkerboard O&C lands in western Oregon. These lands once provided the 
18 O&C counties over $100 million annually in shared timber receipts. 
The O&C Act of 1937, which revested these lands back into federal 
control, directed that they be managed for permanent timber production 
to benefit local communities and industries. Today, these lands grow 
1.2 billion board feet of timber each year and the BLM is currently 
struggling to harvest 200 million board feet, or just one-sixth of 
annual growth. Additional reductions in timber harvest volumes are 
likely unless Congress takes action to resolve the long-running 
controversy in a manner that benefits various constituencies.
    Congressman DeFazio, Congressman Walden and Congressman Schrader 
have all expressed and interest in developing a trust management 
proposal for the O&C lands that resolves the controversy once and for 
all while providing certainty and opportunity to our rural communities. 
I hope you will work with them to develop and pass such a proposal.
    I appreciate the opportunity to testify before the subcommittee and 
welcome any questions you may have.
                                 ______
                                 

            STATEMENT OF RON WALTER, COMMISSIONER, 
                   CHELAN COUNTY, WASHINGTON

    Mr. Walter. Thank you for giving me the opportunity to be 
here today to speak in favor of the proposal. In addition to 
being a county commissioner, I currently serve as the president 
of the National Association of Counties, Western Interstate 
Region. Chelan County is a large county with 2.2 million acres. 
Eighty percent of that is Federal forest land. Our major 
industry is tree fruit production. The timber and agricultural 
industries, including grazing on Federal lands, have been the 
core of our local heritage and culture. Unfortunately, over the 
last 20 years we have seen our timber-related jobs disappear, 
with our last mill closing several years ago. We used to have 
nine to 10 mills operating in Chelan County.
    Now there are only three to four mills operating in the 
entire east side of Washington State. Now, the sight of a 
logging truck is rare and most of the lumber moving through 
town comes from Canada, and there is virtually no grazing. 
Unfortunately, this scenario has played itself out across the 
West. The Federal Government has succeeded in effectively 
setting aside countless acres of wilderness and roadless areas 
but has neglected to properly manage the remaining holdings in 
the Forest Service system. Our forests are in a state of 
disrepair. Acres of once productive forests are now burdened by 
excessive fuel loads, are susceptible to disease and insect 
infestation and threatened by catastrophic wildfires. Since I 
took office in 2001 I have witnessed countless attempts to 
address forest management and forest health, yet actions have 
fallen short of reaching the goal of achieving healthy, 
resilient forests.
    This proposed legislation attempts to simplify bureaucratic 
process and red tape in the effort to reverse that trend. We 
need a new mindset of national forest management where healthy 
forests produce jobs and dependable, sustained revenue to the 
Federal treasury, local schools and counties. As I said, this 
legislation is a step in the right direction as it identifies a 
pathway to expedite projects on Federal land while ensuring the 
Federal Government continues its commitment to sharing revenues 
with counties and schools. Currently, the Forest Service seems 
to be in a state of analysis paralysis with too few projects 
being implemented. It is time for Congress to change the status 
quo and provide effective means for the Forest Service to 
achieve one of its primary goals of creating jobs and resilient 
forests.
    Walt Disney said the way to get started is to quit talking 
and get going. In general, the National Association of Counties 
supports the reauthorization of the Secure Rural Schools. 
Further, counties support continuation of three important goals 
or provisions under the act: active management and restoration 
of forests, revenue sharing consistent with historic Federal 
land management receipts, sharing with states, counties and 
local school districts, and collaborative processes such as the 
resource advisory committees and community fire plans that 
successfully address some of the issues. The revenue sharing 
provisions of Secure Rural Schools are vital to local 
communities and represent a strategic agreement that dates back 
to 1908.
    The revenue helps fund rural counties' ability to deliver 
basic services to our constituents. We believe that 
reauthorization and pursuing management and restoration in the 
nation's forests will generate tremendous environmental and 
social benefits and create needed jobs and revenue for rural 
economies. The legislation attempts to return the U.S. Forest 
Service to the forest management business and explicitly 
provides clear direction to the agency on how to achieve 
management targets to fulfill current financial 
responsibilities. I would encourage the Committee to consider 
removing the restrictions on the use of county funds for roads. 
Under the current authorization, schools are able to use these 
funds as general revenue. Congress should trust county 
government to develop priorities through our annual budget 
process and use these funds accordingly.
    We support expediting the environmental review process. 
There is a critical need to modernize agency processes to 
increase productivity and to expedite project analysis and 
decisionmaking. Our national forests hold vast resources that 
are currently being under utilized, whether it is biomass for 
renewable energy, value added wood products such as wood 
pellets, mineral, natural gas, oil or timber products. Counties 
across the West strongly urge congressional action that will 
return effective management to our Federal forests. Again, I 
thank you for the opportunity of being here.
    Mr. Bishop. Thank you for your testimony. Mr. Stahl?
    [The prepared statement of Mr. Walter follows:]

  Statement of The Honorable Ron Walter, Commissioner, Chelan County, 
Washington, on the National Forest and County Revenue, Schools and Jobs 
                              Act of 2011

    Thank you for giving me the opportunity to be here today to speak 
in favor of the proposal. I am Ron Walter, a County Commissioner from 
Chelan County, Washington State. I also currently serve as President of 
the National Association of Counties Western Interstate Region. Chelan 
County is a large county encompassing 2.2 million acres, 80% is managed 
by the US Forest Service. We are located on the eastern slope of the 
Cascade Mountains. Our Western border is the crest of the Cascade 
Mountains; we are bordered on east by the Columbia River. Our 
population is 70,000 with slightly less than half of our residents 
living in our largest town Wenatchee. The remaining population resides 
in 8 small cities or communities or in the unincorporated areas of the 
county.
    Our major industry is tree fruit production or Apples, Pears and 
Cherries. Each of our small towns used to have a mill and timber jobs. 
The first two summers after high school graduation, I was fortunate to 
work in local lumber mills. The timber and agriculture industry--which 
includes grazing on Federal lands--were part of our local heritage and 
culture. Unfortunately over the last twenty years we have seen our 
timber related jobs completely disappear with our last mill closing 
several years ago. With that mill closure our county lost 80 family 
wage jobs and the related economic benefit to our local economy.
    The entire Eastern side of Washington State currently has only four 
operating mills. I used to see logging trucks moving logs to the mills 
and finished lumber moving to market. Now the sight of a truck hauling 
logs is rare and most of the finished lumber products are moving 
through town on rail cars from mills in Canada. Livestock grazing is 
very limited. The most visible activity on local forest is now fire 
suppression.
    Unfortunately this scenario has played itself out across the west. 
The Federal government has succeeded in effectively setting aside 
countless acres of wilderness but has neglected to properly manage the 
remaining holdings in the National Forest System. Our forests are in a 
state of disrepair--acres of once productive forests are now burdened 
by excessive fuel loads, susceptible to disease and insect infestation, 
and threatened by catastrophic wildfire.
    Our National Forests hold vast resources that are currently 
underutilized, whether it is biomass for renewable energy or added 
value products such as pellets, timber products, minerals, oil, and 
natural gas. Counties across the West strongly request congressional 
action to return active management to our federal lands in an effort to 
fuel local economies and return revenues to the treasury.
    Since I took office in 2001, I have witnessed countless attempts to 
address forest management and forest health, yet actions have fallen 
short of reaching the goal of achieving healthy resilient forests. This 
proposed legislation attempts to simplify bureaucratic process and red 
tape in an effort to reverse that trend. Walt Disney said the way to 
get started is to quit talking and begin doing. We need a new mindset 
of National Forest Management where energy production, grazing, 
recreation, timber harvest, mineral resource utilization and 
environmental stewardship are all components of obtaining healthy 
resilient forests which produce dependable and predictable revenue to 
the federal treasury, local schools and counties and produce critically 
needed jobs in our communities.
    This proposed legislation is a step in the right direction as it 
identifies a pathway to expedite projects on federal land while 
ensuring the federal government protects its commitment to sharing 
revenues with counties and rural schools. Currently the Forest Service 
seems to be in a state of ``analysis paralysis'' with little resources 
actually reaching ground. It is time for Congress to change the status 
quo and provide effective means for the Forest Service to achieve one 
of its primary goals of ``creat[ing] jobs that will sustain 
communities.''
    I would like to take the remainder of my time to make some specific 
comments about the proposal.
    In general, the National Association of Counties supports 
reauthorization of the Secure Rural Schools and Community Self-
Determination Act (SRS). Furthermore, counties support continuation of 
three important goals or provisions under the Act: 1) active management 
and restoration of federal forests; 2) revenue sharing consistent with 
historic federal land management receipts with states, counties and 
school districts, and 3) collaborative processes such as the Resource 
Advisory Committees (Title II) and community fire planning (Title III).
    The revenue sharing provisions of SRS are vital to local 
communities and represent a strategic intergovernmental agreement that 
dates back to 1908. The revenue helps fund rural counties ability to 
deliver public services to thousands of communities throughout the 
nation. We believe that reauthorization and pursuing management and 
restoration of the nation's forests will generate tremendous 
environmental and social benefits and create needed jobs and revenue 
for rural economies.
    I applaud the Committee's commitment to continuing the Federal 
government's obligation to honor the revenue sharing agreement with 
counties established in 1908. Historically payments to counties and 
schools have been coupled with natural resource management activities. 
This legislation attempts to return the U.S. Forest Service to the 
forest management business and explicitly provides clear direction to 
the agency on how to achieve management targets to fulfill current 
fiduciary responsibilities.
    Specifically, section 102 (e) (3) directs the Forest Service to 
send Title I payments directly to rural schools and protect payments 
from being offset by state funding. This provision is important to a 
number of our rural schools districts who have had Title I funds 
diverted away by State governments.
    Incentive and consequences; section 106 (b) (2) I fully support the 
section on performance based cash rewards, however there should be 
consequences if minimum sale levels are not obtained.
    Catastrophic event; section 105 (c) The Secretary should be 
required to immediately implement this provision nationwide. Every 
Region to the USFS has a backlog of potential sales that have been 
through the NEPA revenue and are ready for bid and the demand for the 
product exists. The National Association of Counties has repeatedly 
called on Congress to give the Forest Service greater flexibility in 
their authority to address catastrophic events. Further, NACo has 
called on Congress to grant a Governor authority to declare a state of 
emergency when the severity of fire danger from fuels on identified 
federal lands within that state poses a significant threat to public 
health and safety. Many National Forests are clogged with dead and 
dying trees that pose significant risk to public health and safety. 
Conservative estimates show that perhaps 140 million acres of National 
Forest timberland in the west is in ecological condition Class 3 or 2: 
meaning it is ready to burn or soon will be.
    Use of Funds; section 107 (b) I would encourage the committee to 
consider removing the restrictions on the use of the county funds for 
roads. Under the current authorization, schools are able to use these 
funds as general revenue. Congress should trust county government to 
develop priorities through our annual budget process and use these 
funds according to local needs and priorities.
    Environmental review; Section 105 (d) Chelan county supports the 
National Association of Counties policies related to the need to revise 
and update outdated existing environmental statutes such as the 
National Environmental Policy Act (NEPA) and Administrative rules such 
as the Forest Service Planning Rule. Currently there is a critical need 
to modernize agency processes in an effort to increase productivity and 
efficiency, and to expedite project analysis decision making in a 
timely but effective manner. I support the Committee's goal to expedite 
the environmental review process and encourage Congress to move further 
toward amending and modernizing NEPA.
    In closing I would like to again thank you for the opportunity to 
share my thoughts. Counties are united in their desire to move away 
from direct annual SRS payments in exchange for sustainable economies 
based on management of our Federal lands. Elected county officials 
would prefer to share in the revenue from production in healthy forests 
that are a part of our community fabric, whether those lands are 
generating biomass or timber products, mineral, energy production, 
recreation or grazing. Effective management of our federal forests will 
create much needed, family-wage jobs in our resource dependent 
communities while providing sufficient revenue sharing to county 
governments and schools through the historic 25% revenue sharing 
agreements. However, until the Federal government returns management to 
our federal forests, we will require Congress to continue direct annual 
payments through the Secure Rural Schools program.
    Chairman Bishop, Ranking Member Grijalva--thank you for the 
opportunity to testify this morning.
                                 ______
                                 

         STATEMENT OF ANDY STAHL, EXECUTIVE DIRECTOR, 
       FOREST SERVICE EMPLOYEES FOR ENVIRONMENTAL ETHICS

    Mr. Stahl. Thank you, Chairman Bishop. I will address six 
items in my testimony. First, the essential elements of a 
trust, then timber sale volumes necessary to meet the proposed 
bill's annual revenue requirement, budgetary implications to 
the Treasury of doing so, environmental implications of the 
bill, effects on the stewardship contracting program, and 
finally, effects on private timber land owners. A trust 
requires four elements: a settler who creates the trust, a 
trust instrument that demonstrates the intent to create a 
trust, trust property, which is also called the trust corpus, 
and a trust beneficiary, that is, those who get the revenue 
from the trust. The draft bill is missing one of those 
elements. It is missing the trust property. The bill 
misunderstands the Doctrine of Trust by mistaking the earnings 
from the trust for the trust corpus. In a bona fide trust, the 
property is used to generate earnings which, net of the 
management expenses, are paid to the beneficiary. Here, in the 
bill's Section 102[a], the earnings from projects are defined 
as the property itself. By defining the trust as an annual 
revenue stream rather than as an income producing asset the 
Forest Service will be forced to sell more timber during 
periods of low demand and less timber when demand for wood is 
high. That is opposite to the behavior expected from a prudent 
trustee or a private land owner. At current prices, for each 
county to receive payments equal to the average of the past 
four years of SRS payments, trust project timber sales would 
have to increase by over 20 billion board feet from current 
levels. To maintain SRS payments at their 2011 levels, sales 
would have to increase by over 15 billion board feet. Now, 
these timber volumes differ substantially among national 
forests. A few national forests could cut less than current 
levels. Those are primarily in Region 9 in the northeast and 
the lake states. Other forests would be required to increase 
cutting by 10 to 100 fold. For instance, Region 3's forest, the 
Tonto and Coronado, the Chugach in Alaska and the Six Rivers in 
California. New Mexico's Gila National Forest, for example, 
sold three million board feet in the first three quarters of 
this fiscal year at $17 per 1,000 board feet. This low value 
would require the Gila to sell an additional 429 million board 
feet, 143 times current levels, to achieve the average SRS 
payment of $5.5 million, and that is at the 75 percent county 
share provided in the bill. Now, all of these data and 
calculations are available on the web at the Headwaters 
Economics website. In 2010, the Forest Service spent about $158 
per 1,000 board feet on its timber program for a total cost of 
$382 million. Increasing sales to the level necessary to meet 
the SRS payments would cost about $3 billion in appropriations. 
Net of the 20 percent in revenues that the bill allocates from 
trust projects to the Forest Service, that amount is about 10 
times greater than the SRS appropriations are today. The bill 
also proposes to eliminate existing legal requirements for 
timber sale advertisement and competitive bidding which will 
reduce prices further. The bill proposes to waive existing 
environmental laws which protect watersheds and stream quality. 
The bill would likely eliminate stewardship contracting because 
the timber value would no longer be available to fund fire 
reduction measures, for example. For private timber land 
owners, the bill would put a lot of Federal timber on the 
market to meet these payments levels, reducing the value of 
private timber lands and also imposing endangered species 
obligations on private land owners that the Federal Government 
would be exempt from meeting. Thank you for this opportunity to 
testify.
    [The prepared statement of Mr. Stahl follows:]

 Statement of Andy Stahl, Executive Director, Forest Service Employees 
   for Environmental Ethics, on the National Forest County Revenue, 
                     Schools, and Jobs Act of 2011

    My name is Andy Stahl. I am Executive Director of Forest Service 
Employees for Environmental Ethics, a 10,000-member coalition of civil 
servants who manage our national forests and citizens who own them. 
Thank you, Mr. Chairman, for this invitation to discuss the draft 
National Forest County Revenue, Schools, and Jobs Act of 2011.
    My testimony will address the following: 1) essential elements of a 
``trust;'' 2) timber sale volumes necessary to meet the bill's ``annual 
revenue requirement;'' 3) budgetary implications to the Treasury of 
meeting these timber sale volumes; 4) environmental implications; 5) 
effects on the stewardship contracting program; and, 6) effects on 
private timberland owners.
The County, Schools and Revenue Trust is not a True ``Trust''
    A trust requires four elements: 1) a settlor who creates the trust; 
2) a trust instrument that demonstrates the necessary intent to create 
a trust; 3) trust property, also called the trust ``corpus'' or 
``res;'' and, 4) a beneficiary. The draft bill is missing one of these 
essential elements--the trust property. The bill misunderstands the 
doctrine of trusts by mistaking a trust's earnings for the trust's 
corpus. In a bona fide trust, the trust property is used to generate 
earnings (also called the ``distribution'') which, net of the trustee's 
management expenses, are paid to the beneficiary. Here, in section 
102(a), the trust's earnings from Projects are defined as the trust 
property itself. The bill creates something more like an entitlement 
program than a fiduciary trust.
    The bill's failure to identify a trust property means that the 
Secretary has no duty to preserve and protect that property, as is the 
case in a true fiduciary trust. For example, this bill would require 
the Secretary to cut beyond sustained yield levels if necessary to meet 
the annual revenue requirement (and waives existing legal caps on 
harvest levels), an outcome not permitted under trust doctrine that 
requires the trustee to protect the corpus of the trust.
    By defining the ``trust'' as an annual revenue stream, rather than 
as an income-producing asset, the Forest Service will be forced to sell 
more timber during periods of low demand for wood and less timber when 
demand for wood is high--opposite to the behavior expected from a 
prudent trustee or private landowner. The American people--who are the 
true beneficiaries of these public lands that are held in trust for all 
of us--will see their trees sold at bargain-basement prices. The 
Secretary, as trustee, will also be required to produce the county 
beneficiaries' revenue streams regardless of how much it costs American 
taxpayers and the Treasury to do so.
Timber Sale Volume Necessary to Meet the ``Annual Revenue Requirement''
    For each county to receive payments equal to the average of the 
past four Secure Rural Schools payment years, Trust Project timber cut 
would have to increase by over 20 billion board feet. The additional 
timber cut, above current levels, necessary to simply maintain 2011 SRS 
payment amounts is 15.3 billion board feet.
    These timber volumes vary substantially among national forests. A 
few national forests could cut at less than current levels, e.g., 
Allegheny, Chippewa, Hiawatha. Other national forests would be required 
to increase cutting by ten to more than a hundred times current 
amounts, e.g., Tonto, Coronado, Chugach, and Six Rivers.
    For example, New Mexico's Gila National Forest sold 3 million board 
feet in the first three quarter of FY2011 at $17.15 per thousand board 
feet (mbf). This low timber value would require the Gila to sell an 
additional 429 million board feet, 143 times current levels, to achieve 
the 2008-2011 SRS average annual payment of $5.5 million, at the 75% 
county share provided in the bill.
    For further details regarding these data and calculations, the 
committee can contact Headwaters Economics at http://
headwaterseconomics.org/.
Budgetary Implications of Meeting the Necessary Timber Sale Volumes
    The bill obligates the Secretary, enforceable by the counties, to 
spend whatever appropriated funds are necessary on Trust Projects to 
meet the annual revenue requirement. These tax-financed costs are 
likely to exceed revenues and will likely cost more than the Secure 
Rural Schools appropriated amounts now being made to counties.
    In 2010, the Forest Service spent $158.30/mbf on its timber sale 
program, for a total cost of $382 million. See http://www.fs.fed.us/
publications/budget-2010/overview-fy-2010-budget-request.pdf (page I-
2). Increasing timber sales to the level necessary to meet average SRS 
payments during the last four years would cost nearly $3 billion in 
appropriations, net of the 20% in timber revenues the bill allocates 
from Trust Projects to the Forest Service. This amount is about 10 
times greater than the Secure Rural Schools average annual payment from 
appropriations during the past four years.
    The bill eliminates existing legal requirements for timber sale 
advertisement, competitive bidding, and open and fair competition, 
which could reduce Trust Project income, requiring a further increase 
in sales to meet the annual revenue requirement. The bill also 
eliminates legislative authority for the salvage sale fund and 
purchaser road credits, in regard to Trust Projects.
Environmental Implications
    If necessary to meet the annual revenue requirements, the bill 
authorizes Trust Projects where logging would irreversibly damage soil, 
slope, or other watershed conditions and waives reforestation 
requirements. The bill allows for Trust Projects that seriously and 
adversely damage fish habitat and eliminates riparian protections for 
streams, lakes, and other water bodies. The bill also waives legal 
restrictions on clearcut size and protections for soil, water, scenery, 
fish, wildlife and recreation where forests are logged using even-aged 
management.
Implications for Stewardship Contracting
    The Forest Service uses stewardship contracting authority granted 
by Congress to purchase services in exchange for timber value. The 
timber value is often used to pay contractors to treat woody biomass 
that may pose a fire hazard to nearby communities. The bill's annual 
revenue requirement will likely require that all available timber value 
be dedicated to the County, Schools, and Revenue Trust, leaving little, 
if any, to lessen wildland fire risk to communities.
Implications to Private Timberland Owners
    The bill allows the Secretary to undertake Trust Projects that 
would take threatened or endangered species without limit. This would 
shift the responsibility for species conservation from the public's 
national forests to owners of private timberlands, who are required to 
enter into habitat conservation agreements with the federal government 
before they can harm imperilled species.
    The substantial increased federal harvest necessary to meet the 
annual revenue requirement will depress stumpage prices, particularly 
during periods of low wood products demand. This will decrease 
financial returns to private timberland owners. The willingness of the 
federal government to subsidize from appropriations the management 
expenses of timber sales, such as road construction and maintenance, 
will put private timber owners at a further competitive disadvantage. 
Insofar as that subsidy appears unconstrained by the bill, and 
enforceable by the county beneficiaries, the anti-competitive effect 
could be particularly dramatic in areas where timberlands are of 
relatively low productivity, such as the inland mountain west.
    Thank you again for this opportunity to testify. I would be happy 
to answer any questions you may have.
                                 ______
                                 
    Mr. Bishop. Thank you. I appreciate your testimony. Before 
we go to the next witness I wish to introduce the APPLE Act. 
There are some slides up there I would look at. In a prior life 
before I came here, I spent 16 years in the Legislature all on 
the Appropriations Committee for Public Education trying to 
find money for education, and also 28 years in the classroom as 
a teacher knowing that end of it. There always seemed to be 
something, like a dam, that was stopping the flow of funds 
going to the schools. It was a difficult one to do. I think one 
thing we found out is that schools have historically been based 
upon land as a funding mechanism. It goes back to Henry VIII 
when he established the Church of England. He took the 
monasteries away from the Catholic Church.
    He gave them to aristocracy on the condition that they 
maintain the school systems that had been established by the 
church itself. 1777, Georgia became the first state to actually 
give efforts to help their schools in the counties. Ironically, 
half of the counties in Georgia rejected it because they said 
it was an insult to them thinking they could not do their own 
jobs. Connecticut actually sold 3.3 million acres of land to 
put up a full trust fund for education. Of course, the land 
they sold was in Ohio, but at least they were selling something 
of land at the time. Texas, as you will note, has very little 
public land, but when they became a state they set aside 17,000 
acres for a permanent trust fund for their education systems. 
One of the things we notice right here is the land policy makes 
it difficult for those in the West to do the same thing.
    Everything that is red on that map is owned by the Federal 
Government. You will notice the Federal Government owns one out 
of every three acres, and primarily in the West. Those of us in 
the West have the wonderful opportunity of realizing the 
Federal Government owns one out of every two acres. The BLM 
land, which is the basis of this particular bill, 93 percent of 
that is found west of Denver. If you will notice the next map, 
you will see the states in red are the states that have the 
slowest rate in their education growth. If you flip back 
between two and three--Casey, just a minute--if you would look 
at those maps, look at the Federal land, go back to the states 
having problems, go back to the Federal land, you will notice 
there is a unique correlation between the amount of Federal 
lands and the difficulty states have in funding their education 
system. Eleven of the 17 states that have the slowest growth 
rate are found in the West. Not yet. Do not get ahead of me 
here.
    That is also almost double the rate. Ninety-two percent 
growth in states east of Denver, only 56 percent growth in the 
states that are west of that. It is double in the East than it 
is in the West. Now, the question you have to have is why? What 
is the paradox? Why do we in the West have the slowest growth 
in our education funding? Why do we in the West have the 
largest class sizes? Twelve states have the largest class size. 
Nine of them are found in the West on public land states. Why, 
as you see in here, do we have the kids? The growth rate of 
public education students is triple in the West than it is the 
East, and still we have the kids, we have the overcrowded 
classrooms. We cannot fund our education system, not nearly to 
what our friends in the East are having with the lighter base. 
Now, why is that? Is it because we are not paying taxes?
    As you will notice in the next one, the West pays actually 
more taxes in state and local taxes as a percent of their 
income than those in the East do. It is also not because we are 
not putting education into our state budgets. Once again, you 
will find out western states put more of their budget toward 
education than eastern states do as a percentage. The reason 
why we are having it is this particular one. The ones that are 
yellow do not have public lands. None of them have more than 15 
percent of their land as public, and the total average for the 
East is four percent. Those of us in the West get a great total 
of 52 percent. You will notice, especially those in the red 
ones that are in the West, we have the abundant opportunity of 
having more than 52 percent of our land tied up by the Federal 
Government. It is interesting to note that when each of these 
western states was admitted to the union, in their Enabling Act 
there was language that was put in there that said that that 
was not to be the way of things.
    Each of them had phrases in there that said five percent of 
the proceeds of the sale of public lands lying within said 
state which shall be sold by the United States subsequent to 
the admission of said state into the union after deducting all 
the expenses incident of the same shall be paid to the said 
state to be used as a permanent fund, the interest of which 
only shall be expended for the support of common schools within 
said state. The only two states in the West that did not get 
that language in their Enabling Acts are Hawaii, which got 
nothing because there is not a whole lot of land there that is 
owned by the Federal Government, and California. Was not in 
their Enabling Act. Instead, Congress passed a special piece of 
legislation a year after they were a state that gave them the 
same promise that those of us in the West were given.
    The obvious thing is that promise simply was never 
fulfilled. Oklahoma got that promise. When they were made a 
state, the government gave them a $5 million bonus to bring 
them in on an equal footing with those in the West, but the 
rest of us in the West simply did not have it. The cost to us 
if the Federal Government had fulfilled what they promised in 
the Enabling Act is about a one time expenditure of $14 billion 
that would go to those western states. If you taxed the land 
that they kept at the lowest rate, the absolute lowest property 
tax rate, as if it is totally worthless land, it would be an 
extra $6 billion coming to those western states if the Federal 
Government just put those lands, or the Federal Government paid 
the tax where if those lands were on the tax rolls. Now, some 
people say we are solving that problem with PILT.
    PILT is supposed to help states with that, but as you will 
see in here, PILT has never been more than four percent of what 
could be raised if those lands were actually taxed like normal 
pieces of property. PILT money does not go to schools, that 
goes to counties, which means, as you will see in here, what is 
happening to the West, those are what the West is losing every 
year in lost property tax revenue because the Federal 
Government did not live up to the language in the Enabling Acts 
that were promised at statehood. When it comes to education, 
once again, at the lowest rate possible, that is how much each 
state would be gaining from those lands if they were allowed to 
be taxed every year. It is very simple. Education is based on 
property tax. We lose $4 billion a year in the West because 
these lands do not generate property tax for us, and PILT does 
not come close to cutting it, nor does SRS come close to 
cutting it.
    We lose $2 billion in loss of severance and royalty taxes 
the states could be getting if they actually had control of 
these lands, plus the income tax that would be given from high 
paying jobs if we could actually develop our own lands, as well 
as the school trust lands we each have that are surrounded by 
public lands and sometimes make them inaccessible and unusable 
to generate revenue as they were supposed to be generated. So 
the solution to this one is simply APPLE, which is cute for the 
Action Plan for Public Lands and Education. Senator Urquhart, 
thank your wife for coming up with that name. It is a wonderful 
name. What this does is simply say, OK, the states were 
promised five percent of the proceeds from the sale of that 
land, let the states pick five percent of their land to be used 
for a permanent fund to pay for their education. It can only go 
to the trust fund with their education.
    I should put a caveat in here. I said every western state 
was promised five percent for education. Three states, 
Colorado, Nevada and Oregon, were actually promised five 
percent for infrastructure, but you can use it for education if 
you want to in my bill. Excluded from the land they can choose 
are wilderness areas, national parks, military installations, 
Native American properties, historic sites and wildlife 
refuges, first of all because I do not want to create the 
dilemma that some people have said might exist, but more 
importantly, states do not want those lands because they do not 
generate money. Those are money losers. They are not going to 
pick those. They need lands that can actually generate 
something for their states. Nine states have already passed 
resolutions in support of this.
    I wish I could say this was my idea. It actually came from 
the Council of State Governments, West. So it was a think tank 
proffer. It was an effort of legislators sitting down, thinking 
of how to help themselves in the future as best they possibly 
can. The bottom line is here, in the West, kids are harmed and 
they are harmed by the land policy the Federal Government 
imposes on the West. It was not intended to be that way, and it 
does not have to be that way, and it ought not to be that way, 
and it is about time we realized kids should not be harmed 
simply because they live in the West with the absentee land 
owner, the Federal Government. With that, I would like to 
recognize Representative Urquhart who has been working on this 
for a long time both in the Utah Legislature, as well as in 
Council of State Governments, West. Mr. Urquhart?

  STATEMENT OF HON. STEPHEN H. URQUHART, SENATOR, UTAH STATE 
                             SENATE

    Mr. Urquhart. Chairman Bishop, Members, thank you for this 
opportunity. Chairman Bishop, that was excellent. Thank you 
very much. Most states in this nation were frontier states. In 
order to be on equal footing with other states, the frontier 
states have always pushed the United States to sell off 
Federally owned lands. We need to remember that. We are a young 
nation. That experience continues today. This is the frontier 
speaking to you, just as it has in the past. When Utah joined 
the Nation it struck an agreement with the United States. 
Utah's Enabling Act requires that the United States sell 
Federally owned lands there to go on the tax rolls and five 
percent of the sale proceeds are to go to Utah's schools. This 
is not a favor, as I heard it called today, this is not a 
giveaway, this is not a project where collaboration is the main 
goal, this is an obligation of the United States. It cannot be 
unilaterally modified.
    However, in 1976, through FLPMA, the United States did 
unilaterally change that agreement. It determined that public 
lands no longer would be sold. Utah did not agree to that 
change. Therefore, the United States is in breach of its 
agreement. That breach hurts the citizens of my state and all 
western states. As Chairman Bishop said, this affects children, 
this affects families. The West is growing. Growth requires 
serious infrastructure and education investment, but Congress' 
breach chokes off needed funding. As Congressman Bishop said, 
we tax the West as heavily as the rest of the nation, but our 
per pupil funding does not keep pace with that of nonwestern 
states. We already cram more kids in our classrooms and matters 
would only get worse as we are slated to increase enrollment 
three times faster than nonwestern states.
    The United States' breach of its obligation to dispose of 
the public lands artificially restricts our property tax base. 
It hobbles our economies. Let me give you one example. Utah 
could be a significant player in the energy sector, but the 
problem for us is most of our energy fields or oil and gas 
fields are on public lands, which is not surprising since the 
Federal Government owns two-thirds of all the land in our 
state. If we were allowed to tap this, that would mean jobs, 
prosperity, school funding and less dependence on foreign oil, 
but the Federal ownership precludes those benefits. As we 
witnessed three years ago, the changing winds of partisan 
elections and the cavalier stroke of a pen by a Federal 
overseer can halt energy production on our Federal lands.
    Of course, any energy producers are reluctant to risk 
capital knowing that a Federal overseer can, and will, harm 
jobs, communities, schoolchildren and energy production in 
order to gain political favor with environmental special 
interest groups. Utah is a state. Can anyone argue that Utah 
should not be on equal footing with other states, or that 
Congress can breach the compact it entered into with Utah? Can 
anyone argue that citizens of Utah and the other western states 
are less deserving of jobs, opportunities and education? These 
lands should be sold. They should be put on the tax rolls. 
Western states should receive their contracted proceeds. If 
Congress is unwilling to step up to those clear 
responsibilities, an accord must be struck. I greatly 
appreciate Congressman Bishop's efforts regarding APPLE.
    Utah and the other western states should be allowed to 
select five percent of the public lands for disposition. 
Recognize the United States' obligation here. Let us put lands 
that surround our cities on the tax rolls. Let us put mineral 
lands to beneficial economic use. Let us create jobs and wealth 
on these lands. Let us adequately support our schools. A member 
of a State Legislature should not have to ask the Federal 
Government's permission to use lands in his state to create 
jobs, wealth and opportunity. The system is upside down. The 
servant has lost track of its role. Congress has usurped the 
will of the people as expressed in the Constitution and the 
Enabling Acts of the western states. No member of this 
Subcommittee participated in that arrogant breach in 1976, but 
members of this Subcommittee can right that wrong. Work to pass 
the APPLE bill. Work to help the children in my state and in 
all western states. As you help our great nation honor its 
commitments millions of westerners will honor you. Thank you.
    Mr. Bishop. Thank you, Senator. Mr. Alberswerth?
    [The prepared statement of Mr. Urquhart follows:]

  Statement of The Honorable Stephen H. Urquhart, Senator, Utah State 
Senate, on H.R. 2852: Action Plan for Public Lands and Education Act of 
                                  2011

    Thank you for allowing me to appear before you. I am deeply 
honored. I, like you, love the United States of America. Please allow 
me to tell you how you can honor our great nation, by helping it honor 
an agreement it has made with my state and the other 12 western states.
    Utah, like most states, joined the United States pursuant to an 
agreement, an enabling act, entered into with the United States. Utah's 
enabling act, like that of most states, calls for future sale of 
federally-owned lands. The agreement calls for those lands to be sold--
and put on the tax rolls--and for 5% of the proceeds of those sales to 
go to Utah for the support of Utah's schools.
    Again, I reiterate, this is an obligation of the United States, not 
a favor or an idea to be revisited. It is a solemn obligation.
    The United States Supreme Court has ruled that these enabling acts 
cannot be unilaterally modified by either party--the states or the 
United States. However, in 1976, through the Federal Lands Policy and 
Management Act (FLPMA), the United States did unilaterally change that 
agreement, by determining that public lands no longer would be sold. 
Utah did not agree to that change in our agreement. Therefore, the 
United States is in breach of its agreement. I need you to know that 
the United States' unilateral breach of our agreement significantly 
hurts the citizens of my state and all western states. Please allow me 
to explain.
    Other than the 13 colonies and Texas and Tennessee, all states have 
a public lands history. Part of that history is for those frontier 
states to strive for full statehood--through disposition of those 
public lands--over the opposition of the non-public land states. The 
frontier states always hit a point of significant growth where, to stay 
on equal footing with the other states, they need the revenues from the 
sale of the public lands and, more importantly, they need those lands 
on the tax rolls.
    We see it every census. The West is growing. Growth requires 
serious infrastructure and education investment. But, Congress' breach 
of Utah's enabling act is choking off that needed funding. But, this 
doesn't just affect Utah. Federal ownership of land adversely affects 
all western states.
    Eleven of the seventeen states with the lowest real growth in per 
pupil expenditures are western states. From 1979 to 2007, real per 
pupil expenditures in western states--public land states--increased 
56%, compared to 92% in non-western states. Western states cram more 
kids in classrooms that non-western states--3.7 more students per 
classroom than in the other 37 states. And, those sad facts will only 
get worse; between 2012 and 2018, the rate of enrollment growth in 
western states is projected to increase 9%, while the rate of 
enrollment growth in non-western states is projected to increase by 
only 3.3%.
    And, please don't think that these statistics are the result of an 
unwillingness to tax our citizens. As a percentage of personal income, 
Western states are taxing every bit as hard as other states. This is 
simply the result of rapid growth, an artificially-low property tax 
base, political restraints on economic activity. In other words, it is 
the result of the United States' breach of enabling acts in the western 
states and continued federal ownership of public lands.
    Utah, for example, provides significant services to the public 
lands and public land users, such as transportation, policing, and 
search and rescue, but Utah does not receive tax support from those 
lands. While the federal government does provide some payment in lieu 
of taxes, those amounts do not approach tax revenues that would be 
generated were those lands privatized.
    Also, let's talk about productive uses on those lands. Utah could 
be a player in the nation's energy sector. That would mean jobs for 
Utah citizens, wealth for communities, significant revenues for our 
schools, and less dependence on foreign energy producers. But, those 
benefits are precluded because the federal government continues to own 
those lands. With the changing winds of partisan elections and the 
cavalier stroke of a pen, a federal overseer can stop all energy 
production on our federal lands. Why, of course, would an energy 
producer risk capital on public lands when a threat always exists that 
the federal overseer might find it expedient to harm jobs, communities, 
school children, and energy production in order to gain a little favor 
with environmental special interest groups?
    Utah is a state. Can anyone argue that Utah should not be a full 
state, on equal footing with other states? Can anyone argue that it is 
okay for Congress to breach the compact it entered into with Utah? Can 
anyone argue that the citizens of the Utah and the other western states 
are less deserving of jobs, opportunities, and education than the other 
states?
    These lands should be sold. They should be put on the tax rolls. 
Western states should receive their contracted proceeds. If Congress is 
unwilling to step up to those clear responsibilities, an accord must be 
struck. I appreciate Congressman Bishop's attempt to navigate Congress' 
clear obligation in this matter with the current realities of a 
profoundly flawed political process.
    Utah and the other western states should be allowed to select 5% of 
the public lands for disposition. Go ahead and exclude from that 
possible selection lands that would involve significant controversy--
such as designated wilderness, forest reserves, national parks. 
Recognize your obligation. Let us put lands that surround our cities on 
the tax rolls. Let us put mineral lands to beneficial economic use. Let 
us create jobs and wealth on these lands. Let us adequately support our 
schools.
    I have to point out that is offensive to me, as a member of a state 
legislature, to have to ask the federal government's permission to use 
lands in my state to create jobs, wealth, and opportunity. It is 
offensive to have to plead with the federal overseer to honor its 
obligation. That speaks to a system that is upside down. That speaks to 
a system where the servant has lost track of its role. It speaks to the 
fact that, in this situation, Congress has usurped the will of the 
people as expressed in the Constitution and the enabling acts of the 
western states.
    I don't believe that any members of this subcommittee participated 
in that arrogant breach of the enabling acts in 1976. I do believe that 
all members of this subcommittee can right that wrong. Compacts are to 
be honored. Please honor the compacts entered into between the western 
states and the United States. Work to pass the APPLE bill. As you help 
our great nation honor its commitments, millions of westerners will 
honor you.
                                 ______
                                 

                STATEMENT OF DAVE ALBERSWERTH, 
         SENIOR POLICY ADVISOR, THE WILDERNESS SOCIETY

    Mr. Alberswerth. Thank you, Mr. Chairman, and Members of 
the Subcommittee for the opportunity to provide testimony on 
behalf of The Wilderness Society regarding H.R. 2852. Before I 
discuss that bill, I just want to mention that we also have a 
keen interest in the Secure Rural Schools program as well and 
would like to submit comments on the final proposal for the 
record once you have had a chance to take a look at it. We 
oppose enactment of H.R. 2852, which essentially requires the 
Federal Government to give away five percent of the 
unappropriated public lands, defined to include national forest 
system lands, as well as BLM lands, to each western state, an 
area we think is about 30 million acres, or roughly the size of 
the State of New York or Mississippi. This is an unwarranted 
and unmerited giveaway of assets owned by all Americans to a 
select few states.
    In fact, we are somewhat surprised that such a proposal is 
being considered at all given the Federal Government's current 
budget woes. If enacted, this bill would amount to giving away 
free of charge literally tens of billions of dollars of 
American taxpayers assets without compensation to those 
taxpayers at a time of deepening concern about the impacts of 
the Federal deficit on our nation's fiscal future. We instead 
support current laws articulated in Section 102 of the Federal 
Land Policy and Management Act that the public lands be 
retained in Federal ownership unless as a result of the land 
use planning procedure provided in the Act it is determined 
that disposal of a particular parcel will serve the national 
interest. It is important to understand that when enacted, this 
landmark statute received broad bipartisan support from 
Republicans and Democrats, including Members from all points of 
the compass, including especially the western states.
    In fact, the primary sponsors and architects of the policy 
were western Members of Congress who held numerous public 
hearings over several years during the law's development. The 
law itself was based on the recommendations of the bipartisan 
Public Land Law Review Commission which was also comprised 
largely of representatives from western states. So, in the 
findings of H.R. 2852, to state that, ``the United States has 
broken its solemn compact with the western states and breached 
its fiduciary duty to the schoolchildren who are designated 
beneficiaries of the sale of Federal land under the terms of 
the respective Enabling Acts of the western states,'' is simply 
not the case and is a misreading of the history of this issue. 
In fact, by this logic one could equally argue that any Member 
of Congress from the State of Utah who sponsors this 
legislation is breaking Utah's solemn compact with the United 
States by proposing such legislation because Utah's enabling 
statute also states that, ``the people inhabiting said proposed 
state do agree and declare that they forever disclaim all right 
and title to the unappropriated public lands lying within the 
boundaries thereof'', but we won't make that argument here.
    Now, it is easy to see from any land ownership map of Utah, 
and many other western states, that state and Federal land 
ownership patterns do not necessarily provide for the optimal 
management of either state lands or Federal lands. That is why 
FLPMA provides for land exchanges. Those such exchanges between 
the Federal Government and the western states are fraught with 
difficulty. State and Federal land exchanges have occurred over 
the years to the mutual benefit of the states and the Federal 
Government, including Utah. In fact, I understand that members 
of the Utah congressional delegation are considering some land 
exchange proposals even now. In addition, there are better ways 
to enhance the revenues the western states already receive from 
Federal revenue transfer programs. For instance, the current 
Federal royalty rate for oil and gas extracted from public land 
is only 12 and a half percent, significantly below the royalty 
rates charged by many western states. Wyoming, for instance, 
charges 16 and two-thirds percent royalty on all the oil and 
gas extracted from state lands and adds a six percent severance 
tax to that for an effective rate of over 20 percent. Since the 
Federal Government splits oil and gas royalty receipts from 
operations on Federal lands 50/50 with the western states, 
increasing the Federal royalty rate to say 20 percent would be 
of obvious benefit to both American taxpayers and the 
treasuries of the western states. In conclusion, our 
recommendation is that instead of promoting a bill like H.R. 
2852, which unnecessarily perpetuates conflicts, 
misunderstandings and gridlock over the status and management 
of America's public lands and national forests, the sponsors of 
this legislation should change direction and seek out practical 
solutions to the nettlesome issues of Federal state land and 
resource ownership and stewardship. It does take time and 
patience to arrive at solutions to these complicated issues 
that serve the interest of all stakeholders, but Congress has 
done this in the past and there is no reason it cannot be done 
in the future. Thank you very much.
    [The prepared statement of Mr. Alberswerth follows:]

 Statement of David Alberswerth, Senior Policy Advisor, The Wilderness 
Society, on H.R. 2852, the ``Action Plan for Public Lands and Education 
                             Act of 2011''

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to provide testimony on behalf of The Wilderness Society 
regarding H.R. 2852, the ``Action Plan for Public Lands and Education 
Act of 2011.'' My name is David Alberswerth, and I am a Senior Policy 
Advisor to The Wilderness Society. The Wilderness Society works on 
behalf of its 500,000 members and supporters to protect wilderness and 
inspire Americans to care for our wild places and our public lands and 
forests.
    We oppose enactment of H.R. 2852, which essentially requires the 
federal government to give away 5 percent of the ``unappropriated 
public lands''--which by its quirky definition encompasses National 
Forest System lands as well as those public lands managed by the Bureau 
of Land Management--to each western state. This is an unwarranted and 
unmerited giveaway of assets owned by all Americans to a select few 
states.
    We are somewhat surprised that such a proposal is being considered 
at all, given the federal government's current budget woes. For, if 
enacted, this bill would amount to giving away free-of-charge literally 
tens of billions of dollars of American taxpayer assets without 
compensation to those taxpayers, at a time of deepening concern about 
the impacts of the federal deficit on our nation's fiscal future.
    We instead support current law as articulated in Section 102(a)(1) 
of the Federal Land Policy and Management Act (FLPMA) that, ``the 
public lands be retained in Federal ownership, unless as a result of 
the land use planning procedure provided for in this Act, it is 
determined that disposal of a particular parcel will serve the national 
interest'' (43 U.S.C. 1701(a)(1)).
    It is important to understand that this landmark statute received 
broad bi-partisan support from Republicans and Democrats, including 
Members from all points of the compass, including especially the 
western states. In fact the primary sponsors and architects of the 
policy of western public land retention in federal ownership at the 
time of enactment were western Members of Congress, who held numerous 
public hearings over several years during the law's development. The 
law itself was based on the recommendations of the bi-partisan Public 
Land Law Review Commission, which was comprised largely of 
representatives from western states. So, to state in the findings of 
H.R. 2852 that, ``The United States has broken its solemn compact with 
the Western States and breached its fiduciary duty to the school 
children who are designated beneficiaries of the sale of Federal land 
under the terms of the respective enabling Acts of the Western 
States,'' is simply not the case and a misreading of the history of the 
issue of federal public land retention.
    By this logic, one could equally argue that any Member of Congress 
from the State of Utah who sponsors this legislation is breaking Utah's 
``solemn compact'' with the United States of America by proposing such 
legislation because Utah's enabling statute states that, ``. . .the 
people inhabiting said proposed State do agree and declare that they 
forever disclaim all right and title to the unappropriated public lands 
lying within the boundaries thereof. . .''
    Now it is easy to see from any land ownership map of Utah and many 
other western states that state and federal land ownership patterns do 
not necessarily provide for the optimal management of either the state 
lands or the federal lands. That is why FLPMA also provides for federal 
land disposals and exchanges. And though such exchanges between the 
federal government and the western states can be fraught with 
difficulty, state/federal land exchanges have occurred over the years 
to the mutual benefit of the states and the federal government--
including some successful ones sponsored by members of the Utah 
Congressional delegation that have benefitted both Utah and the 
citizens of the United States. In fact, I understand that members of 
the Utah Congressional delegation are considering some land exchange 
proposals even now.
    In addition, there are other, better ways to enhance the revenues 
the western states already receive from federal revenue transfer 
programs. For instance, the current federal royalty rate for oil and 
gas extracted from public lands is only 12.5 percent, significantly 
below the royalty rates charge by many western states. For example, 
Wyoming charges a 16.66% royalty on oil and gas extracted from state 
lands, plus a 6% severance tax for an effective rate of over 20 
percent. Since the federal government splits oil and gas royalty 
receipts from operations on federal public lands 50-50 with the western 
states, increasing the federal royalty rate to, say, 20 percent would 
be of obvious benefit to both American taxpayers and the treasuries of 
the states where oil and gas production occurs on federal lands.
    In conclusion, our recommendation is that, instead of promoting a 
bill like H.R. 2852 which unnecessarily perpetuates conflicts, 
misunderstandings, and gridlock over the status and management of 
America's public lands and national forests, the sponsors of this 
legislation should change direction and seek out practical solutions to 
the nettlesome issues of federal/state land and resource ownership 
patterns. It does take time and patience to arrive at solutions to 
these complicated issues that serve the interests of all stakeholders. 
But, Congress has done this in the past--there is no reason it cannot 
be done in the future.
    Thank you.
                                 ______
                                 
    Mr. Bishop. I appreciate the witness' testimony. We will 
now turn to our phase of questions. I will turn to the Chairman 
of the full Committee, Mr. Hastings, if you have questions.
    Mr. Hastings. Yes. For Mr. Sherman. I did not see it in 
your written statement, but in your oral statement you 
suggested that you are working on some NEPA reforms to 
streamline the process. Did I hear you correctly?
    Mr. Sherman. That is correct.
    Mr. Hastings. Does that take congressional approval?
    Mr. Sherman. No. The reforms that we are looking at are 
ones that I believe----
    Mr. Hastings. Well, let me ask you, you say it does not 
take congressional approval.
    Mr. Sherman. That is correct.
    Mr. Hastings. When are you going to have them done?
    Mr. Sherman. Well, we are implementing some right now and 
we are working on others.
    Mr. Hastings. But do we have what you are working on here? 
Are you providing that to our Committee?
    Mr. Sherman. I would be happy in greater detail to provide 
an explanation of the range of modifications and improvements 
that we are making to the NEPA process. I would be happy to do 
that, Congressman.
    Mr. Hastings. How soon can you get that to the Committee?
    Mr. Sherman. We can get it to you within the next few 
weeks, if that is acceptable to you.
    Mr. Hastings. Well, the sooner, the better. OK.
    Mr. Sherman. Thank you.
    Mr. Hastings. OK. Thank you. Mr. Stahl, you said in your 
written statement, in your written testimony, that the Secure 
Rural Schools bill would require the secretary to cut beyond 
the sustained yield. In my state of Washington, and I alluded 
to this in my opening statement, they manage their timber land 
on a sustained yield principle, the same thing, I assume, that 
you are talking about. In Washington State they manage about 
2.2 million acres which generated $168 million to their 
requirements. In Washington State the Federal Government owns 
nine million acres that generates $13.4, so it is kind of just 
a reverse. How can you say, then, that this bill would make 
somebody manage beyond a sustained yield?
    Mr. Stahl. As I pointed out, it varies national forest by 
national forest.
    Mr. Hastings. I understand that. I am talking about 
Washington State, and I am talking about Federal forests in 
Washington State. I am making a direct comparison between those 
two----
    Mr. Stahl. Yes.
    Mr. Hastings.--if you have that. So how do you say that?
    Mr. Stahl. In Washington State at current timber prices----
    Mr. Hastings. No. No, no, no, no, no. Wait, wait, wait. 
That is going to vary what the prices are anytime. Prices go 
up, it is going to be the same price that is going to go down. 
I am talking about generating something like 700 percent more 
on one-fourth of the land. So how can you say that this would 
require beyond the sustained yield?
    Mr. Stahl. Sustained yield is calculated on a national 
forest by national forest basis.
    Mr. Hastings. I am asking about Washington, and I am 
comparing Washington. Tell me where I am wrong on what I am 
asking you.
    Mr. Stahl. Because you are talking about timber amounts, 
not revenue amounts.
    Mr. Hastings. No, I mentioned revenue. I mentioned revenue 
here. What I mentioned is what the Department of Natural 
Resources in Washington State generated, $168 million on 2.2. 
You are generating $13.4 on nine.
    Mr. Stahl. I am not generating it, the Forest Service----
    Mr. Hastings. Somebody is.
    Mr. Stahl. Right.
    Mr. Hastings. All right.
    Mr. Stahl. In large part it is because the Forest Service 
has a different objective in choosing which trees to cut. The 
Forest Service cuts trees for wildfire risk reduction.
    Mr. Hastings. I apologize for--we are talking about 
sustained yield, and the idea of the Secure Rural Schools bill 
is to build revenue by having commercial activity on Federal 
lands--sustained yield. We are comparing apples and apples. 
Yet, you say it is beyond. I am getting frustrated because you 
are not telling me why Washington State can do so much more on 
lands that are comparable to the Federal Government.
    Mr. Stahl. It has different lands and different objectives 
than the national forests do. That is the reason why.
    Mr. Hastings. Well, I find that hard to believe because 
there are state lands that are right next to national forest 
lands in Washington State. Those that do not yield as much are 
the same, so I--well, Mr. Chairman, obviously I get frustrated 
when I hear somebody saying this testimony when the facts, 
particularly in Washington State, suggest exactly the opposite, 
so thank you very much and I yield back.
    Mr. Bishop. Thank you. We will probably have another round 
for you as well. Mr. Grijalva?
    Mr. Grijalva. Thanks very much. Mr. Alberswerth, on the 
APPLE initiative, we have heard testimony today that speaks to 
the allegation that all the Federal land is not being used 
effectively and it is not being turned over to the states as 
per enabling legislation or whatever. One of the things, 
according to official statistics, sir, at one time in the 
history of our Federal Government, our nation owned 1.8 billion 
acres in this country. That was about 80 percent of the land 
mass. Over time, about 1.3 billion acres of that total have 
left Federal ownership. So the feds at one time owned 80 
percent, now they own 30 percent. To me, that sounds like the 
Federal Government has used Federal land, particularly in the 
West, very, very effectively in order to settle the West. Would 
you agree with that assessment on the percentages?
    Mr. Alberswerth. I think that the percentage is 
approximately correct. I believe it is a little bit less than 
30 percent now.
    Mr. Grijalva. There will be some other rounds, but could 
you describe some of the Federal programs which send, Mr. 
Sherman, revenue from public lands to states. They include 
PILT, Secure Rural Schools. There are others. If you could 
maybe at least list those.
    Mr. Sherman. Well, there are, and I will have to get back 
to you on the specifics of this, for example, I believe mineral 
royalties are shared to a certain extent with the states right 
now. This is more in the purview of the Department of the 
Interior than Department of Agriculture. There are obviously 
all kinds of programs.
    Mr. Grijalva. Well, there are direct economic payments and 
then there are indirect benefits that come from the Federal 
lands, and jobs, economic development, tourism dollars, all 
that.
    Mr. Sherman. Yes.
    Mr. Grijalva. States get a share of the revenue from oil 
and gas, and mining and grazing on Federal land. What would 
happen if the Federal Government began to charge market rate 
for these activities or began to charge a royalty on mining, 
for example, which does not exist. Is that one way to get 
direct payment and direct contributions of revenue to these 
states?
    Mr. Sherman. To charge additional royalties? Is that what 
you are suggesting?
    Mr. Grijalva. And to charge royalties where no royalties 
exist.
    Mr. Sherman. Well, it would be a way to generate additional 
revenues. I think you would have to obviously determine what 
the impact of that would be on the production levels that occur 
in those states.
    Mr. Grijalva. And I think one other. Let me follow up, Mr. 
Sherman. Much was made about the levels of timber production in 
the 1980s and 1990s compared to now. What has happened to 
timber prices over that period? We keep using that 1990s 
comparison, 1980s, 1990s, to right now. What happened to price?
    Mr. Sherman. Timber prices have changed dramatically over 
the past 20 years. I think today approximately the price for 
1,000 board feet would be somewhere about 30 percent of what 
one could have achieved 20 years ago. In certain regions of the 
country that differential is even greater. It is probably an 80 
percent difference. So there has been a precipitous drop in the 
value of timber and we are probably near an all time low.
    Mr. Grijalva. With reference to the Headwaters economic 
study that maintains that at current SRS payment levels timber 
cut levels would need to increase 259 percent to achieve the 
value of timber receipts generated between 1980 and 2000, and 
the cut levels would need to increase by 745 percent, Mr. 
Sherman, is the 259 percent increase in cuts desirable, and is 
it even possible to reach a level of a 745 percent increase?
    Mr. Sherman. Well, it would obviously be extremely 
difficult to reach those levels, and one of the reasons it 
would be difficult to reach those levels is that today the cost 
of producing timber is greater than the revenues that are 
received so there is a budgetary impact and in order for the 
Forest Service to oversee and administer these programs, we 
simply do not have the resources to accomplish that because in 
most cases across the country, not in all cases, but in most 
cases, our budgets have to supplement timber sales so that the 
work can get completed. The work is not just removing the 
timber. The work relates to a lot of other factors that go into 
any sort of timber sale or stewardship contract.
    Mr. Bishop. Thank you, Mr. Grijalva. Mr. Johnson?
    Mr. Johnson. Thank you, Mr. Chairman, for holding this 
important legislative hearing on a very important solution to 
update the Secure Rural Schools program. I represent 
southeastern Ohio which is home to the Wayne National Forest, 
and while the counties in my district may not receive the same 
level of payments that the counties in my colleague's district 
from out west do, these payments are still an important revenue 
stream for my counties. Our country is at a cross-roads when it 
comes to our debt crisis and it is clear that the new formula 
authorized for the program through the 2008 TARP bill is not 
sustainable as we in Congress look for ways to reign in the 
Federal debt. This draft legislation would help create a 
dependable stream of revenue for the counties that depend on 
the funding, while also setting a goal for annual revenue from 
timber receipts.
    Furthermore, this legislation would begin to roll back some 
of the red tape that is slowing down timber production in this 
country. As a 26 year plus veteran of the United States Air 
Force, this proposal is the type of common sense idea that 
seems to be missing from our nation's energy strategy. In the 
Air Force we would plan, set goals and then go out and meet our 
mission objectives to exceed those goals. This draft 
legislation seems to set those goals for the Forest Service to 
meet timber production goals across the nation. This 
legislation also begins to make it easier for companies to 
receive the permits necessary to begin timber production. Time 
and again this year this Committee has heard from companies 
that they were not able to get the environmental permits needed 
to go forward with job creating projects.
    This legislation would allow for an expedited review 
process to help kick start timber production. Not surprisingly, 
the Administration and the Department of the Interior have 
testified against these common sense reforms. All year we have 
heard no from Interior officials, which I have begun to refer 
to, by the way, as the department of no. We hear them say no to 
such common sense reforms like this that would speed up 
responsible development of America's natural resources. Instead 
of a department of no, this Committee and America needs a 
partner at the bargaining table to engage in serious debate to 
get a solution that satisfies all parties involved and breaks 
the status quo. So I do have a couple of questions. Mr. 
Swanson, in your testimony you spoke of the red tape and 
administrative efficiencies that you see with the Forest 
Service. Can you give us an idea of how much time and money 
your company spends on regulatory and legal hurdles?
    Mr. Swanson. The bulk of those costs are incurred by the 
agency in the preparation of the sale and things, overreaching 
regulations, like survey and manage, for example, where they 
are required to go out there and on each and every project 
search for, literally get on their hands and knees and search 
for over 300 different species, including moss and you name it, 
on a very small fraction of the landscape. Those are the kind 
of things that have increased the cost of preparation of a 
timber sale that do not exist on private land or on state 
lands, and that is the reason why the Forest Service return has 
dropped by 30 percent. When you look at what the cost of that 
log is delivered to a mill, in the 1980s, you know, when it was 
delivered to a mill it was $300 per 1,000 board feet. Today it 
is $600 per 1,000 board feet. It is the preparation that has 
caused the problem, and it is the logging systems and the lack 
of productivity once the project is completed that has caused 
the revenue to drop. You cannot have a timber sale where the 
volume removed is so small that the cost of removal becomes so 
large that there is nothing left for the land owner, in this 
case, the Federal Government.
    Mr. Johnson. All right. Well, thank you. Commissioner 
Walter, you testified about Title I payments being offset by 
state funding in the past. Can you comment on the importance of 
sending Title I payments directly to rural schools without 
being offset by state funding?
    Mr. Walter. Well, absolutely. Our local schools, the way 
the State of Washington has been handling it is they just put 
the money into the state school fund and then it goes out by 
the formula, so our local rural schools do not directly benefit 
from that revenue. All schools, just like all local 
governments, as well as the Federal and state government, are 
looking at budget cuts so our local schools are being 
penalized.
    Mr. Johnson. OK. Well, thank you very much. My time has 
expired, Mr. Chairman. I yield back.
    Mr. Bishop. Thank you. Mr. DeFazio?
    Mr. DeFazio. Chairman, we are going to have more than one 
round, right? Hopefully. OK. Because I have a lot of questions. 
Mr. Sherman, first, I do want to start out, because your agency 
often does not get thanked, I do want to thank you and your 
agency. Earlier this year I contacted the agency. We had some 
timber under the Rustler Project available on the Rogue 
Siskiyou Forest, but there was nobody to lay out the sales. It 
had already been through all the environmental approvals and 
everything else, but they just did not have people to do it and 
your agency did find some additional funds so that we can go 
ahead and let those sales. It is particularly important in 
southern Oregon, as Mr. Swanson can testify. So I want to start 
there. I am going to ask you the same question I asked Mary 
Wagner, the Associate Chief. You know, the President did 
propose, as he did promise as a candidate numerous times, that 
he would find some long-term solution to the Safe and Secure 
County Rural Schools Act. He did propose in his budget this 
year that this be funded at a level of $450 million. 
Unfortunately, it appears that the $450 million is supposed to 
come out of your budget. I asked Deputy, or Associate Chief 
Wagner where the money was going to come from and she just kind 
of said, well, we were hoping you knew. Are there ongoing 
active discussions at the Administration on how you might fund 
the continuation of this program?
    Mr. Sherman. Congressman, I think the Administration is 
certainly willing to have a dialogue with this Committee and 
Congress over what the appropriate source of funding for this 
program would be. In the President's budget it is funded on a 
discretionary basis out of four service funds, but we are 
willing to talk to you about where the best source would be. It 
potentially could be from a mandatory source or it could be 
from the Forest Service budget. I think we have to determine 
this on a bipartisan basis working with Congress.
    Mr. DeFazio. Well, I would suggest that, you know, and I 
did support the President's initiative this week on the Buffett 
rule on taxes, and when the President, you know, is forceful 
and pushes an issue that I think is good for the country and 
good for the budget and all the problem is confronted, I 
support him. In this case, I have to say I am pretty 
disappointed that we are now at this point and you are willing 
to have a dialogue. I mean, so you have no proposals or ideas. 
I mean October 1, the last payment. I just had one county 
notify the Governor of my state, Curry County, that if their 
initiative on the ballot to increase property taxes fails, and 
the last one failed by a margin of three to one, that 
essentially the county will have to dissolve. They will be 
incapable of meeting their basic state mandatory requirements. 
There will be no deputy sheriffs, there will be no jail, there 
will be no public health in a very large area, and this is 
likely to occur in other counties in my district. This is 
something that needs urgent attention.
    Mr. Sherman. Congressman, we agree with you it does need 
urgent attention. The problems you are raising are real 
problems and we are prepared to sit down as soon as possible 
with this Committee and others to talk about how we achieve 
that end goal.
    Mr. DeFazio. I am not going to ask you about the O&C lands. 
That is not your jurisdiction and I will get to that with other 
witnesses in my second round. On the Forest Service lands, I 
just went back and looked at the history, the highest level of 
harvest ever was 12.7 billion board feet. I do not think, you 
know, I do not even believe this bill would propose we go back 
to that, but let us just say that we went to levels of 12.7 
billion board feet referring to the beginning of my questions. 
As I understand it, it costs the Forest Service $111 per 1,000 
board feet, and Steve would say that a number of that is due to 
the requirements put on you, but I understand the industry, it 
costs about $80 1,000 board feet on private lands. If you got 
the $80 1,000 board feet, and just roughly figuring this out, 
it looks like it would cost you a little over $1 billion to 
produce that timber, which of course is considerably more than 
continuing county payments. Is that accurate?
    Mr. Sherman. That is accurate. I mean I do not know the 
exact details, I would have to examine the figures you are 
mentioning, but right now, again, the cost of these timber 
sales far exceed the revenues. This is in part because of the 
very low prices that you can get these days for timber.
    Mr. DeFazio. Well not, actually, that is not totally true 
in our region. I see my time has expired but I would like, and 
I will provide maybe a more specific question, but I would like 
the agency to follow up on their costs, compare their costs to 
industry costs, but give me, you know, bottom line on both what 
it would cost to produce that much timber. Just my rough 
calculation is it would cost twice as much as the current 
payments, which means maybe we ought to just find the money in 
your budget. Thank you, Mr. Chairman.
    Mr. Bishop. Thank you, Mr. DeFazio. You will get another 
shot at these guys, too. Mr. McClintock?
    Mr. McClintock. Well, Mr. Sherman, I would like to follow 
up on Congressman DeFazio's line of questioning. We have the 
same situation in my region. When you say, well, this is 
because of the decline of lumber prices. The decline of lumber 
prices is significant but we just last year had several mills 
close in my district and they were very clear on the reason for 
the closure. It was not because of the economy, it was because 
they could not get enough logs to justify keeping these mills 
open. Each one came with about 300 jobs destroyed, a spin off 
factor of about three to one. These are small communities. This 
is absolutely devastating to them. It concerns me when an 
official of the Forest Service comes before the Subcommittee 
directly responsible for this conduct and is told do not worry, 
it is just the market. Well, it is not just the market and that 
has been very clear, and anybody who has been following these 
issues, even tangentially, should know that. I find it 
disturbing that you would come here and make that kind of 
representation. Do you want to modify it?
    Mr. Sherman. Congressman, I think the market is one factor, 
but there are other factors as well and I would be happy to 
amplify with some of those other----
    Mr. McClintock. The principal factor that was cited in 
these mill closures was the dwindling supply of timber coming 
from Federal lands. Now, if you look at the District of 
Columbia, the seat of our government, with all of its 
government buildings and government parks, the sprawling Mall, 
the museums and all of the government buildings, the Federal 
Government owns about 25 percent of the land area of the 
District of Columbia. It owns 70 percent of Plumas County in my 
district. It owns most of the service area of most of the 
counties in my district. When we were managing that land in a 
sustainable manner it supported a thriving economy. We were the 
heart of the gold country. Sutter's Mill is in my district. Now 
we have gold mines that have been operating under several 
generations for 100 years closing down their operations not 
because of the falling price of gold, but rather because the 
Forest Service refuses to act on their permits.
    It is not telling them no, it is simply refusing to act on 
them. We had thriving timber harvests and now we are facing 
mill closures across the district. We had thriving grazing 
operations that are now being forced off of the Federal lands 
by continual bureaucratic harassment by your department. 
Recreation and tourism. I have Lake Tahoe in my district and 
yet you are doing wholesale road closures throughout the 
forests that are absolutely essential to tourism, not to 
mention refusing to grant permits to community events that have 
been going on for generations and that a lot of these small 
towns depend upon for their tourism. I have to ask you, if you 
are not going to relinquish these lands, what are you going to 
do to use this tremendous asset that you are sitting on to 
restore prosperity to these communities?
    Mr. Sherman. Congressman, in my opening statement, I did 
outline I think a variety of very affirmative, positive steps 
that the Forest Service is taking to increase our production of 
timber on Federal lands.
    Mr. McClintock. But you are not increasing it. It has 
declined.
    Mr. Sherman. We, in fact, are increasing it, Congressman.
    Mr. McClintock. Sir, I am sorry, but in our region it has 
actually declined.
    Mr. Sherman. Well, I will double check the figures in your 
region but in the last two years the Forest Service sales and 
production on Federal lands have increased. We have been able 
to reverse this downward trend.
    Mr. McClintock. We cannot even get fire, salvage fire 
killed timber because the litigation delays the process beyond 
the period where that timber can be salvaged.
    Mr. Sherman. Well, there are improvements on the litigation 
front as well. We are seeing a decrease in litigation, we are 
seeing a significant decrease in the amount of timber sales 
that are appealed. I believe we are making progress on a number 
of fronts.
    Mr. McClintock. Well, that is because there is a decrease 
in the timber sales.
    Mr. Sherman. No.
    Mr. McClintock. I would invite you to come to a little 
county, like Plumas County, of which you own 70 percent. You 
are the lord of the land in Plumas County. They are suffering 
20 percent unemployment and complaining bitterly about your 
department's conduct as the landlord for their county.
    Mr. Bishop. Thank you, Mr. McClintock. Mr. Labrador?
    Mr. Labrador. Thank you, Mr. Chairman. Mr. Sherman, how 
does the Administration view the SRS program at this time? Do 
you think it should be a permanent program, in your view, or 
transitional, as it was originally intended.
    Mr. Sherman. We believe the Secure Rural Schools program is 
an important program, but this is a program which was meant to 
phase out over a period of time when we could find alternative 
ways of supporting rural schools and counties. We continue to 
believe that we need to find that alternate approach. In the 
interim, though, because of the importance of this program to 
counties and schools, the President has proposed a five year 
extension of this program.
    Mr. Labrador. If you think it is transitional, or it should 
be, you call that an alternate approach, what should that 
alternate approach be?
    Mr. Sherman. Well, I think there are a variety of solutions 
here that we need to consider. There may be some other ways for 
the Federal Government to provide assistance to these local 
communities. We need to discuss how we can increase certain 
productivity on Federal lands, such as you are doing today. 
There may be other ways to discuss how we can create and assist 
rural communities with economic development activities. So 
there are a variety of ways that need to be explored. I think 
we need to do this clearly on a bipartisan basis and try to 
come up with a permanent solution.
    Mr. Labrador. So obviously you agree with us that, you 
know, we have a deficit and budget situation at this time and 
there are constraints that we are dealing with and we are 
facing at this time. So you do agree that there should be a 
revenue stream from our public lands that must be part of this 
equation.
    Mr. Sherman. Absolutely. You know, public lands are an 
important way to provide revenue to local communities. The 
public lands also, though, I should mention, have multiple 
uses. Some of these uses are economic uses and some of them are 
noneconomic uses. So we have to find a balance that works for 
all Americans.
    Mr. Labrador. Do you think that revenue streams should come 
now during whatever--you know, I do not know how long we are 
going to extend it, if we are going to extend it at all, but 
let us say we do a five year extension like you are suggesting. 
Should there be revenue ideas coming at this time so we can 
start using different pilot projects or things like that?
    Mr. Sherman. I think we have to, across the board, explore 
ways to provide revenue streams, to provide jobs, provide 
economic opportunities for rural communities. Some of these 
will relate to timber production, some will relate to hazardous 
fuel reduction, nonrenewable energy opportunities, other energy 
opportunities, recreation, tourism. There is a variety, a 
panoply of possibilities here that need to be constantly 
explored and investigated. These solutions do not work 
overnight. They take time to develop. We are going to have to 
work collectively to try to come up with an approach that works 
for rural America and the West.
    Mr. Labrador. What is your agency doing right now to help 
these communities provide revenue streams?
    Mr. Sherman. Well, one of the things that we are doing that 
I am very proud of is that we are working very hard to set up 
collaborative efforts within these communities to identify 
projects where everyone can agree going forward. We, I think, 
have been very successful in people coming together who never 
worked together before but now they are. They are exploring 
ways in which to work together on particular timber sales, or 
recreation projects, or energy projects. This is a very 
important development. I mentioned to the congressman that the 
level of appeals, the level of litigations have decreased 
recently, which I think is a reflection of that. We are working 
on larger landscape scale projects which are more efficient 
where there is greater output. We are working on partnerships 
with local partners to how they can join us to jointly explore 
the development of a project, to help us to fund projects. So 
there are many ways we can do this, and I believe the Forest 
Service is working very hard to explore these ways.
    Mr. Labrador. You know, several Idaho counties, which I 
represent the State of Idaho, have developed an alternative 
proposal to the SRS payments that they call a community forest 
trust and are asking us to approve a pilot project on this 
concept. I know they have sent a copy to the Forest Service for 
suggestions, and also to seek technical assistance in some of 
the practical details. Have you seen this proposal?
    Mr. Sherman. I have not, but I would be happy to look into 
it and get back to you.
    Mr. Labrador. So if we get that to you, you will get back 
to us and give us some ideas?
    Mr. Sherman. I would be happy to do that.
    Mr. Labrador. Thank you.
    Mr. Bishop. Thank you. Let me ask a couple of questions as 
well. Senator Urquhart first. As was indicated by my colleague 
here, at one time, 80 percent of America was owned by the 
Federal Government. My guesstimate would be to you that perhaps 
those were in the territories of the United States was owned by 
the Federal Government, not the states.
    Mr. Urquhart. Well, you start with the northwest ordinance. 
The United States owned lands in just about every state other 
than the original 13, Tennessee, Texas, and, as you say, 
Hawaii. You know, the bit that the territory to become a state 
would relinquish title and claim to the Federal lands, that 
goes back to all of our states, and so then the Federal 
Government would sell off those lands. So this is not anything 
wonderful to celebrate, that the Federal Government has honored 
its obligation in a number of states, but it decided to breach 
its obligation when it came to the western states.
    Mr. Bishop. So it is true that they had close to 80 percent 
of the territory and that was a funding mechanism for the 
Federal Government. In the 1830s we hit a high of 24 percent of 
all Federal revenue came from sale of lands in the territories. 
It is also kind of cool that in the 1840s the Federal 
Government tried to hold on to the land in Alabama once it 
became a state and the Supreme Court said since you cannot do 
that in Georgia, you cannot do it in Alabama. Once it becomes a 
state the Federal Government actually has to go back to the 
Constitution as to what lands it can actually hold. It would 
not be nice if precedent were to change that way. Senator 
Urquhart, in the State of Utah with the large growth rate that 
is coming in the school systems, what sources of revenue do you 
have for paying for those number of kids coming in, sans 
something like this?
    Mr. Urquhart. Well, I mean we have the property tax, which 
again, not much of our property is on the tax rolls, we have 
sales tax, we have income tax. You know, we tax heavily. It is 
absolutely ridiculous to me that we live in a nation that has 
spiraling debt, we desperately need jobs and we have resources 
that we cannot tap. If we could eat collaboration, if we could 
pay our bills with collaboration, I get the feeling we would be 
set, but unfortunately, we need jobs, we need resources, and 
that is what Utah needs to educate its kids.
    Mr. Bishop. Thank you. Mr. Sherman, I understand you once 
served on the Colorado Oil and Gas Commission. Colorado 
requires, or receives, oil and gas receipts and revenue sharing 
from those Federal lands in Colorado. If the Federal 
restrictions and policies drastically reduced those receipts, 
do you believe it is the taxpayers' responsibility to replace 
that funding?
    Mr. Sherman. Are you saying if restrictions----
    Mr. Bishop. If the Federal Government cut off the money 
that you naturally get, is it the responsibility of the 
taxpayers to replace that? This is a yes or no thing here.
    Mr. Sherman. Well, it is hard to, I am not quite sure I 
understand the question.
    Mr. Bishop. Well, we will continue the dialogue. We are 
doing a great job with your department on that. Mr. Walter, 
Commissioner Walter, if I could ask you how significant SRS 
flexibility would be for local government if indeed we are 
going to have changes in the scale of money that comes to you, 
maybe even the process, flexibility to put those where you need 
to put them. How important is that?
    Mr. Walter. Well, I think that is very important. To put it 
in perspective, like I mentioned, we have 80 percent of our 
land base in Federal ownership. If you take the other public 
ownership, we only have 13 percent of our land base in private 
ownership. The Federal payments make up about three percent of 
our total revenues. That is significant in a $30 million 
budget, but sometimes, you know, having those funds restricted, 
we are struggling to meet priorities. For instance, we use 
about $60,000 of Title III funds to address search and rescue. 
As of the first of July, our bill for search and rescue 
exceeded $100,000. So, you know, it just would help us, I 
think, do a better job in meeting and responding to the changes 
as we see them.
    Mr. Bishop. I appreciate that. Mr. Sherman, I will ask you 
to comment because this was another question to ask you about. 
What other means does the Federal Government have of supplying 
revenue toward states? I will just give you some statistics and 
ask for your comment on that. I have 30 seconds to get this 
done. I apologize for being so short. The bottom line is, you 
know, even with the Federal presence in the State of Utah, you 
do not add much to our economy. The last year for which I have 
figures, the Federal expenditure per capita in Utah is 77 
percent the national average, which means in Utah we got $4,338 
per capita while the national average was $5,666 per capita, 
which means we are being--the eastern states that have all 
their land and develop them actually get $1,300 a month per 
capita more than we do living in the West. Do you want to 
respond to that?
    Mr. Sherman. I would like to have an----
    Mr. Bishop. Actually, let me give you a chance to respond 
to that in the next round that I have because I am over here, 
and I apologize. I will let you think about that. You are not 
adding much to our economy. Why do you add more to the eastern 
economy than you do the western economy even though you have 
all our land? With that, Mr. Grijalva, do you have another 
round of questions?
    Mr. Grijalva. Thank you, Mr. Chairman. Mr. Sherman, the 
discussion draft would allow counties to sue in cases where 
they feel the Forest Service is not generating enough revenue. 
What are the dangers in this kind of approach, basically 
turning Secure Rural Schools into an entitlement program where 
the beneficiaries can sue the Federal Government?
    Mr. Sherman. Congressman, I am concerned about that 
provision because there may be many factors beyond the control 
of the Forest Service in terms of providing a certain level of 
receipts or revenues. Prices, markets, certain types of 
regulations, lawsuits, you could go through a whole variety of 
possibilities where the Secretary could simply not deliver the 
level of revenues that are projected. So, yes, that concerns 
us.
    Mr. Grijalva. Thank you. Mr. Stahl, your written testimony 
points out that this is not really a trust proposal because it 
contains no requirement where the asset, the asset being the 
national forest, be preserved or protected. In fact, given the 
mandatory targets, could not the proposal lead to an 
unsustainable harvest of the forest so its trust that will 
guaranty the loss of its only asset?
    Mr. Stahl. That is right. By setting up a revenue target 
that is mandatory, that has to be met, the Secretary is 
compelled to do anything on the national forests that is 
necessary to meet those targeted revenues, and at the same time 
this bill eliminates all of the environmental restrictions, 
eliminates the sustained yield law, eliminates competitive 
bidding, eliminates advertisement of timber sales. So it 
removes any legal constraints on what the Secretary might have 
to do except----
    Mr. Grijalva. To meet the target.
    Mr. Stahl.--to meet the target. That becomes the only legal 
requirement enforceable by the counties.
    Mr. Grijalva. In your written testimony you also indicate 
that there could be harmful effects from the proposal, harmful 
impacts to stewardship contracting. Can you quickly elaborate 
just a bit on that?
    Mr. Stahl. Stewardship contracting, which is used to 
minimize wildfire risk, is financed out of the value of the 
timber that is traded to the contractor for performing services 
in the woods. This bill requires that timber value to meet the 
mandatory revenue targets for the counties, thus depriving 
stewardship contracts of their funding.
    Mr. Grijalva. So you could actually harm efforts to reduce 
the risk of wildfire.
    Mr. Stahl. You would almost certainly have to do that 
because to meet these revenue targets you would have to harvest 
the more valuable trees, which tend to be the most fire-
resistant, and you would have to leave the least valuable trees 
because you cannot afford to take them out and meet the target, 
which tend to be the most fire-prone.
    Mr. Grijalva. Thank you. Mr. Alberswerth, some of the 
testimony we have heard today claims that Congress somehow 
broke a promise to the states with the passage of the Federal 
Land Policy and Management Act of 1976. Specifically, the claim 
is that the Act stopped Federal land sales. That is not true. 
In fact, isn't Section 203 of the Act entitled sales?
    Mr. Alberswerth. Yes, sir, it is.
    Mr. Grijalva. And so land sales was still allowed under 
Federal law and the same law also allows other forms of land 
disposals, such as exchanges, is that correct?
    Mr. Alberswerth. That is correct.
    Mr. Grijalva. So what the APPLE initiative seeks to do is, 
you know, we heard from the colleague, the Senator, that some 
of the lands went to the states, like Utah. We also heard about 
some selective referencing to Utah's statehood agreement, but 
so far no one has mentioned that about becoming a state, Utah 
received more than six million acres of Federal land for things 
like schools, hospitals and courthouses. So I think as we go 
forward with both legislation that one of the things that we 
really do need is a factual basis of the discussion as to what 
is really available, what is the revenue stream that is 
realistic and the issues of royalties on mining, the issues of 
increasing royalty demands of other extractions on the public 
lands as an additional source for the states to be able to use 
on their schools and as a revenue source for those counties. I 
think those have to be equally explored as much as we are 
exploring this particular discussion today. Thank you, Mr. 
Chairman. I yield back.
    Mr. Bishop. Thank you. Mr. Labrador, do you have another 
round of questions? Mr. DeFazio, you are up?
    Mr. DeFazio. Thank you, Mr. Chairman. Mr. Swanson, I would 
like to pose something to you. My major focus here is on the 
O&C lands which are statutorily and physically unique and 
management-wise, they are managed by the BLM and not by the 
Forest Service. I have been meeting with other members of the 
delegation and proposing that we move forward with a true 
trust, a fiduciary trust, for these lands. I think you are a 
little bit familiar with what we have proposed or what we have 
tentatively proposed. It is not in any way in final form. In a 
long-term solution do you think there is an opportunity to 
provide something on those lands that could bring all the 
stakeholders to the table? I mean you live there, you know the 
area. You know, what I would propose, that the industry gets a 
more predictable volume. Generally, they would be smaller 
diameter trees, which I think you are pretty well set up to 
process. The counties, as I referenced earlier, are looking at 
an economic precipice of, you know, not even being able to 
provide the most basic mandatory services under state law. They 
would get a permanent source of revenues. Then the conservation 
community would get two trusts, one a conservation trust and 
one a timber trust, and would get permanent protection of the 
most sensitive lands. Do you think there is a way we could work 
this through?
    Mr. Swanson. Well, I think there certainly is a way we can 
work it through. As always, the Devil is in the details. You 
would have to get out on the ground and decide what portions 
were going to be preserved, what portions were going to be used 
for timber production, and it is a simple mathematical 
calculation that the more you set aside, the more intensely you 
will have to work on those that are not set aside. You know, we 
certainly stand willing to work with you on that proposal or 
any variation of that proposal.
    Mr. DeFazio. Thank you. Mr. Stahl, I know that you are 
familiar with this idea. In fact, I think you proposed an 
iteration of it. Would you want to address essentially that 
same question? Also, very quickly outline major differences 
between what you have proposed, what you understand that I and 
the other members of the delegation might be proposing and the 
proposal regarding Forest Service lands here.
    Mr. Stahl. The major difference is that the Committee's 
proposed bill does not have any land in the trust. It defines 
the trust as a revenue stream, as a fund. The proposal that the 
Oregon delegation is discussing would define two trusts to be 
land. That would be what would be held in trust. The trustee's 
obligations would be to the land and the revenue stream that 
results from management of that trust would go to the counties, 
and the trust that would be protected land to provide other 
services, such as recreation, and wildlife habitat, and water 
quality and the like, those lands would be preserved. Their 
financing would come out of a portion of the timber trust 
revenue. One of the biggest differences between your proposal 
and the Committee's is your proposal does not cost the Treasury 
a nickel. The Committee's proposal threatens to cost the 
Treasury an untold amount of money to meet these revenue 
targets.
    Mr. DeFazio. OK. I mean there is, I think, a few other 
major differences. You know, the delegation has not proposed 
that we suspend all environmental laws and all due process in 
order to move forward with this. Do you think that would be 
necessary to move forward with the trust proposal, to do what 
the Committee is proposing on Forest Service land?
    Mr. Stahl. I do not see any way that the Committee's 
proposal can reach revenue targets comparable to the Secure 
Rural Schools payments without the, for lack of a better word, 
radical proposal to eliminate 30 years of environmental loss.
    Mr. DeFazio. OK. Thank you. So, Mr. Chairman, I did not get 
an opening statement and I have one for the record. I am 
continuing to work with my delegation. The O&C lands are 
totally statutorily unique and we hope to be able to present 
the Committee with a thoughtful proposal that has support of 
all the stakeholders which would include, you know, obviously 
the folks who live there, my county commissioners, the industry 
and conservation groups. We are working as quickly as we can, 
and we appreciate the potential opportunity to provide that for 
Title II. Thank you, Mr. Chairman.
    Mr. Bishop. Thank you, Mr. DeFazio. All Members have the 
ability of putting a statement in the record. I appreciate 
also. Looking forward to your comments on the O&C land issues 
in that portion of it. Mr. Stahl, let me ask you one last 
question. Your testimony questions the nature of the trust 
proposed in this legislation on the grounds that the trust is 
not based on real property. Do you believe the legislation 
should instead identify a specific amount of Forest Service 
land to be put into the trust for the counties as you were 
proposing for BLM land in western Oregon?
    Mr. Stahl. I think that is an interesting question. I would 
look forward to seeing such a proposal from the Committee if 
you wanted to put it out.
    Mr. Bishop. So you think it ought to be done?
    Mr. Stahl. My testimony focused on what you did.
    Mr. Bishop. So do you think it ought to be done?
    Mr. Stahl. I would be fascinated to see it. One thing you 
should recognize is----
    Mr. Bishop. Well, maybe we can engage in some of the 
discussions with the Forest Service that are ongoing as well.
    Mr. Stahl. I think that would be great.
    Mr. Bishop. Go ahead.
    Mr. Stahl. Well, what differentiates the O&C lands, for 
instance, from lands in your state is the incredibly higher 
productivity of O&C lands for growing timber. If you want to 
set aside timber growing lands, in most of the interior western 
states, those lands will lose money.
    Mr. Bishop. Thank you. That is why we look to the BLM as 
well for the addition to that. Mr. Alberswerth, can I ask you 
one last question? Is there not precedent for states selecting 
territory? Let me give you a specific example. The State of 
Nevada when they were able to get their school trust lands were 
given the authority to select the lands they wanted to be part 
of those state school trust lands. Is that not precedent for 
the idea of states actually being able to select lands for 
certain public purposes?
    Mr. Alberswerth. Well, I think the best way to deal with 
the situation in your state is to do----
    Mr. Bishop. No, no, no.
    Mr. Alberswerth.--land exchanges of the sort that----
    Mr. Bishop. No, no. Come on. Come back to the question I 
asked. It is a nice answer, but it is----
    Mr. Alberswerth. Is there precedent for that?
    Mr. Bishop. Is there not precedent for doing that? The 
answer is yes. You cannot give me another answer. The answer is 
yes because we have done it.
    Mr. Alberswerth. Well, you have just answered your own 
question.
    Mr. Bishop. Thank you.
    Mr. Alberswerth. I am not sure it is relevant to what we 
really need to do here.
    Mr. Bishop. It was a darn good answer, too. I appreciate 
all of you having been here for these questions. We will 
continue discussion on the SRS issue, we will continue 
discussion on APPLE because the western states deserve to be 
treated fairly, and we deserve to stop harming kids in the 
West, which is, Mr. Sherman, the one message I want you to take 
back to the Forest Service Department. Quit hurting kids. With 
that, we are adjourned.
    [Whereupon, at 11:50 a.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

      Statement of The Honorable Peter DeFazio, a Representative 
                  in Congress from the State of Oregon

    Thank you Chairman Bishop and Chairman Hastings for this 
opportunity. And thank you for organizing this hearing on such an 
important topic.
    I want to welcome the witnesses, two of which are from my district. 
Steve Swanson, President of Swanson Group, and Andy Stahl, Executive 
Director of FSEEE, know these issues as well as anyone. I know they 
will provide very useful and informative testimonies to this Committee, 
although, maybe from slightly different perspectives. Steve and Andy, 
and to the other witnesses, welcome and thanks for being here.
    Most of today's hearing will focus on Title I of Chairman Hastings' 
draft bill. Title I applies exclusively to the management of national 
forest lands and the United States Forest Service.
    However, I would like to take a moment to talk briefly about Title 
II of the draft bill, entitled ``Other Federal Forest Lands.'' For the 
last several months I have been working with Rep. Greg Walden, Rep. 
Kurt Schrader, Governor Kitzhaber, and other members of the Oregon 
Delegation on a proposal I hope to eventually include in this section. 
And I appreciate the willingness by both Chairman Bishop and Chairman 
Hastings to work with me and the Oregon Delegation on this proposal.
    The proposal I am working on is for a unique set of lands in 
Western Oregon, called the O&C Lands. They consist of 2.4 million acres 
of checkerboard forestland and are managed by the Bureau of Land 
Management. The O&C Lands are not national forests. In fact, the O&C 
Lands are managed under a special statute, called the O&C Lands Act of 
1937, which specifies that the 2.4 million acres shall be managed to 
provide for permanent timber production through long-term sustained 
yield forestry to help support local communities and local governments.
    The O&C Lands have been at the center of intense and emotional 
controversy for the last several decades. But, one thing is clear: the 
status quo of management for the O&C Lands is not working. It's not 
working for rural counties who depend on timber receipts to provide 
basic county services. It's not working for the timber industry that 
depends on the land for a steady supply of timber to support mills and 
create jobs. And, it's not working for those who want to see lasting 
protection for the remaining old growth and most sensitive areas on the 
landscape. Legal and political unknowns have created enormous 
uncertainty for everyone.
    What I envision for the O&C Lands has never been done before; and, 
frankly, it's very different from what's being proposed in Title I. 
What I am proposing is an ``outside the box'' idea for a unique, and 
extremely complex set of challenges we face in Western Oregon.
    In general terms, the idea is to divide the O&C Lands into two 
fiduciary trusts: a timber trust and conservation trust. While the O&C 
Lands would remain in public ownership, the trusts and day-to-day 
operations would be managed by boards of trustees.
    The timber trust would include approximately half the lands and be 
managed for sustainable timber production. The Timber Board of Trustees 
would be authorized to engage in a long-term lease, which would be 
competitively bid. Revenues from the lease would be used to provide O&C 
Counties with a predictable level of revenue on an annually basis for 
education, infrastructure, and law enforcement.
    The conservation trust would include all lands not designated for 
the timber trust, and provide permanent protection for old growth and 
the most sensitive areas on the landscape. The conservation trust would 
not be managed under a ``no touch'' policy. Rather, the mission would 
be to manage the land predominantly for forest health, fuel reduction, 
and to protect wildlife and critical watersheds.
    I continue to work with Rep. Walden, Rep. Schrader, the Governor, 
and the Oregon Delegation on many outstanding details. But, the 
potential benefits for key stakeholders and the federal government are 
real. Here's why the proposal deserves serious consideration by this 
Committee and the House of Representatives:
    It would save the federal government money and provide a net 
benefit to the American taxpayer. Under my proposal, the BLM would no 
longer manage the O&C Lands. This would provide a savings to the 
federal government of over $100 million over 10 years.
    Under my proposal, a portion of the revenues generated by the 
lease(s) of the timber trust would be paid to the U.S. Treasury, 
perhaps as much as $100 million.
    And, under my proposal, after a transition period the O&C Counties 
would no longer receive Secure Rural Schools payments. Whatever the 
final outcome of the SRS program, this proposal would allow O&C 
Counties to be financially self-sufficient, again saving the federal 
government hundreds of millions of dollars over the next decade.
    I look forward to presenting my proposal to the Committee in more 
definitive form, hopefully in very the near future. And, again, I want 
to thank Chairman Bishop and Chairman Hastings for expressing their 
interest in working with me and the Oregon Delegation to bring some 
finality to the challenges posed by the O&C Lands.
                                 ______
                                 

Statement for the Record by the U.S. Department of the Interior on H.R. 
    2852, ``Action Plan for Public Lands and Education Act of 2011''

    Thank you for the opportunity to provide testimony on H.R. 2852, 
the ``Action Plan for Public Lands and Education Act''. This 
legislation would make land grants to 13 western states of millions of 
acres of Federal lands (public lands managed by the Bureau of Land 
Management and National Forest System lands managed by the U.S. Forest 
Service) within each state. As a result of these land grants, billions 
of dollars of public land revenues and resources that now benefit all 
Americans would be diverted instead to just 13 western states. H.R. 
2852 would increase the federal budget deficit by depriving U.S. 
taxpayers of current revenues, and would leave to each state the 
decision to close off access, sell, or lease lands conveyed to the 
state. The bill also would jeopardize existing protections for natural, 
cultural, and historic resources located on public lands by taking the 
lands out of federal ownership. This legislation is fiscally and 
environmentally irresponsible and would irrevocably change America and 
the American West. The Administration strongly opposes H.R. 2852.
Background
    Congress has long recognized the national interest in preserving 
and conserving the public lands for present and future generations of 
Americans. In 1976, Congress declared it the policy of the United 
States that ``. . .the public lands be retained in federal ownership, 
unless as a result of land use planning. . .it is determined that 
disposal of a particular parcel will serve the national interest'' 
(Federal Land Policy and Management Act of 1976 (FLPMA); Public Law 94-
579).
    The 245 million acres of public lands managed by the BLM are 
extraordinarily diverse. They include desert mountain ranges, alpine 
tundra, forests, expanses of rangeland and red rock canyons. Consistent 
with FLPMA, the BLM manages these lands for multiple uses: recreation, 
grazing, forestry, mineral development, watershed protection, fish and 
wildlife conservation, wilderness values, air and water quality, and 
soil conservation. In addition to their tremendous resources, the 
public lands feature countless extraordinary places, including 
Arizona's San Pedro Riparian National Conservation Area; the world-
class off-highway-vehicle (OHV) area at Imperial Sand Dunes in 
California (with over 1.4 million OHV visitors per year); Utah's 
Slickrock Bike Trail; Nevada's Red Rock Canyon National Conservation 
Area; and Oregon's Yaquina Head Outstanding Natural Area--to name just 
a few.
    The public lands contain invaluable scenic, historic, and cultural 
sites as well. Archaeological, historic, and paleontological properties 
on BLM-managed lands form the most important body of cultural resources 
in the United States. These include the 11,700-year-old Mesa site in 
the Brooks Range, Alaska, which preserves some of the earliest evidence 
of human migration to the North American continent, and the prehistoric 
Anasazi complex that extends across portions of Utah, Arizona, and 
Colorado. There are also historic sites dating from more recent 
periods, including the remains of Spanish exploration in the southwest, 
portions of the original trails used by settlers moving westward, and 
significant Native American religious sites. Public lands in several 
western states contain prehistoric petroglyphs and dinosaur fossils. In 
fact, six entirely new species of dinosaur have been discovered on BLM-
managed lands in Utah.
    Including BLM-managed public lands, the Department of the Interior 
manages nearly 500 million acres of lands throughout the United States 
for the benefit of the American people. In addition, the Department 
holds in trust over 55 million acres of lands for specific Indian 
Tribes. Additional Federal lands include the approximately 193 million 
acres managed as National Forest System lands by the U.S. Department of 
Agriculture and the nearly 30 million acres managed by the Department 
of Defense. Other Federal holdings include sites conducting highly 
sensitive research work such as the Los Alamos, Lawrence Livermore and 
Idaho National Laboratories. As detailed in the Department of the 
Interior's Economic Contributions Report, dated June 21, 2011, all told 
the Federal government holds over 600 million acres of lands that 
provide innumerable benefits to the American people. In 2010 alone, 
these benefits included:
          Oil, gas, coal, hydropower, wind power, geothermal 
        power, and other mineral activities on Federal lands, both 
        onshore and offshore, that supported 1.3 million jobs and $246 
        billion in economic activity.
          Use of water, timber, forage, and other resources 
        produced from Federal lands supported about 370,000 jobs and 
        $48 billion in economic activity in 2010.
          Americans and foreign visitors made some 439 million 
        visits to Interior-managed lands. These visits supported over 
        388,000 jobs and contributed over $47 billion in economic 
        activity.
          As a subset of the foregoing totals, BLM's management 
        of Federal lands has an impact of over $122 billion on the 
        national economy and supports over 550,000 American jobs.
    The coal, oil and gas, geothermal, wind and solar energy resources 
of the public lands are used to meet our national energy needs, help 
achieve energy independence, and spur economic development throughout 
the United States. These public land resources assure all Americans, 
not only those residing in the western states, of a reliable domestic 
energy supply.
State Trust Lands
    Most of the lands administered by the BLM are what remain from the 
original 1.8 billion acres--known as public domain lands--that were 
acquired by the United States government on behalf of all Americans 
through treaty or purchase. As a condition of entry to the Union, 
western territories agreed that ``unappropriated'' public domain lands 
within their boundaries belonged to the people of the United States. In 
return for renouncing any claims, new states entering the Union 
received land grants under their enabling acts. The amount of federal 
land granted for schools depended upon the date of statehood.
    Under the Land Grant Ordinance of 1785, states entering the Union 
after that date were granted section 16 in each township to support 
public schools. In 1853, California was granted two sections (16 and 
36) in each township, establishing the standard grant for new states, 
except that Arizona, New Mexico, and Utah were granted four sections 
(2, 16, 32, and 36) for schools. Historically many western states have 
sold land given to them by the Federal government in order to generate 
revenues.
    At one time the Federal government held title to more than 80 
percent of the land in the United States. Today less than 30 percent of 
the land in the United States still remains in federal ownership, with 
the vast remainder of this land transferred to private entities and 
state institutions as a part of the settlement of the American 
frontier. Among the millions of acres that passed out of Federal 
ownership during this period were more than eighty million acres of 
``state trust lands''--lands that were granted to the newly-organized 
states.
H.R. 2852--Summary
    H.R. 2852, the ``Action Plan for Public Lands and Education Act of 
2011'' would transfer large swaths of BLM and National Forest System 
lands from federal ownership, where they currently benefit all 
Americans, to the ownership of individual Western states. Sec. 3(b) 
allows the states of Alaska, Arizona, California, Colorado, Hawaii, 
Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington, and 
Wyoming to select to receive from unappropriated public lands within 
each state the number of acres equivalent to five percent of the total 
Federal land base in the respective states, in a manner to be 
determined by each state legislature. The bill defines ``unappropriated 
public lands'' as all public lands managed by the BLM or the Forest 
Service, excluding: land that is held in trust as part of an Indian 
reservation; located within a United States military reservation; a 
unit of the National Park System; a Wildlife Refuge; a Wilderness Area 
designated by Congress; a National Historic Site; a National Monument; 
a National Natural Landmark; an Area of Critical Environmental Concern; 
or a Wilderness Study Area. H.R. 2852 would place the lands selected by 
each state in the hands of the state agency empowered to sell or lease 
such lands, the proceeds of which are to be used for public education. 
(Sec. 3(e)).
    H.R. 2852 Sec. 3(b)(2) requires the Secretary of the Interior to 
calculate the exact acreage of Federally-owned land within each state, 
defined in Sec. 3(f)(4) as all land held by the United States within 
that state, including land held in trust, military reservations, Indian 
Reservations and any other land used for Federal purposes. Over 600 
million acres in the western states are owned by the Federal 
government; five percent of that amount is nearly 30 million acres.
    Finally, the intent of the legislation is that states could and 
would select revenue-producing public lands and resources. Under Sec. 
3(d), all mineral, oil, and gas rights to the land selected by the 
Western States under this Act would become the property of the relevant 
Western State unless the Federal lessee is making royalty payments to 
the United States from production of minerals, oil, or gas. After the 
expiration of the Federal leases or the termination of production in 
paying quantities from the Federal lease, the entire mineral, oil, and 
gas estate would become the property of the relevant Western State. In 
addition, Sec. 3(c) of H.R. 2852 provides that selection and transfer 
of lands under this Act are not major Federal actions that would 
trigger application of the National Environmental Policy Act (NEPA).
Alternate Sources of Revenues for Western States
    The Administration fully appreciates the desire for additional 
revenue generation by Western states. It is essential that the American 
taxpayers--in the individual Western states and nationally--receive a 
fair return from those who extract value from the public lands. We 
strongly encourage this Committee and the Congress to consider and pass 
proposals in the President's FY2012 budget submission which would 
accomplish those aims.
    Specifically, the Administration proposes changes to the mining 
laws that would generate significant income by moving the mining of 
gold, silver, lead, zinc, copper, uranium and molybdenum on public 
lands into the existing solid mineral leasing program. Under the 
proposal, new mining of these valuable minerals on the public lands 
would result in significant royalties in the future to both the U.S. 
Treasury and the state in which they are mined. Currently, no royalties 
are generated by mining on the public lands.
    Additionally, the BLM is pursuing a rulemaking which would increase 
the onshore royalty rate for oil and gas from the current 12.5% of 
revenue (half of which goes to the individual states). This increase 
would provide added revenues to both the U.S. Treasury and, through the 
state share, to the individual state in which the development occurs.
H.R. 2852--Administration Position
    The Department strongly opposes H.R. 2852. H.R. 2852 is unfair to 
American taxpayers as it would transfer revenues and resources owned by 
all Americans to a relatively small number of states. It increases the 
federal budget deficit by depriving U.S. taxpayers of billions of 
dollars of current revenues, and gives away national assets that will 
continue to generate substantial revenues over the long-term.
    H.R. 2852 would irrevocably change the character of the American 
West by allowing individual states to sell or lease millions of acres 
of public domain lands. Nothing in H.R. 2852 would prevent these 
states, in seeking to maximize revenues for the support of schools or 
other programs, from selling off their newly-acquired public lands and 
their resources to the highest bidder, possibly removing them forever 
from multiple-use and public enjoyment, and preservation for future 
generations. The winners at such an auction could be absentee owners, 
foreign governments, or corporate owners who could lock up the land, 
restricting or allowing activities, such as hunting and fishing, `by 
invitation only.'
    If H.R. 2852 were enacted, Americans would lose not only the 
monetary benefits but also the immeasurable benefits that can come from 
lands managed for the enjoyment of and use by all Americans. These 
include big and small game hunting opportunities, wildlife viewing, and 
a broad range of recreation opportunities from backpacking and camping 
to the use of OHV's on remote trails to sand rails on the sand dunes. 
Additionally, the public could lose forever the rich historical and 
archeological diversity of the public lands, unbroken expanses of 
wildlife habitat, as well the rural West's contribution to the nation's 
culture. Our public lands should be managed for the public good and be 
held for the benefit of future generations.
Conclusion
    The Administration strongly opposes this measure that would result 
in a wholesale conveyance of invaluable national assets into state and 
likely private ownership. The Department of the Interior appreciates 
the opportunity to present this Statement for the Record on H.R. 2852.
                                 ______
                                 

Statement of The Honorable Cathy McMorris Rodgers, a Representative in 
           Congress from the State of Washington, on H.R.___

    I would like to thank the Chairman for the opportunity to share my 
thoughts on the Secure Rural Schools program and the important role 
that this bill plays in ensuring the program's future viability. For 
the last decade, the program has deviated from what I believe to be the 
best interest of our national forests, counties, and of the federal 
government. We have stopped using our forests and as a result they have 
become overgrown, diseased, and insect-ridden. Counties have become no 
different than wards of the state.
    We need to put the land back to work. We need to put our counties 
back to work. Duane Vaagen, who testified before this Committee just a 
few months ago on this very same issue, said that the federal timber 
sale program is the single most effective way of putting people who 
live in national forest communities back to work.
    It is important to mention that for many decades the United States 
Forest Service did use our forests and the revenue generated for the 
counties was there to be used for schools, roads, and infrastructure.
    However, over the last decade or so there has been a distinct shift 
in policy and management. As a result, land use and revenue declined 
precipitously forcing counties to become no different than welfare 
recipients. In Eastern Washington, the failure to harvest timber has 
caused most of the mills located within the counties to go out of 
business taking family wage jobs with them. The lack of good management 
practices over the last several years has left forests diseased and in 
poor overall health, exacerbating the likelihood of major wildfires 
including the Tri-pod fire in 2006 that burned over 250,000 acres in 
Okanogan County.
    This bill stops the viscous cycle. It puts people, land, and 
communities back to work. It promotes good forest management, and best 
of all it allows our communities to sever their unhealthy ties to the 
federal government.
    I applaud my colleagues for understanding that reform is the only 
way to set our counties free. I believe the policies reflected in this 
draft bill accomplish this goal. I look forward to hearing from our 
witnesses and making the legislation even stronger.
                                 ______
                                 

    Statement of The Honorable Scott R. Tipton, a Representative in 
  Congress from the State of Colorado, on Draft Bill, the ``National 
         Forest County Revenue, Schools, and Jobs Act of 2011''

    This draft legislation is an important first step towards providing 
a long term solution to properly fund our rural schools, while also 
addressing two other major problems in western districts. I commend the 
Chair's initiative in bringing this forward for consideration and 
comment as the temporary solution known as the Secure Rural Schools Act 
is set to expire.
    Colorado's Third Congressional District faces three distinct 
problems which are all addressed in large part by the National Forest 
County Revenue, Schools, and Jobs Act of 2011. Our mills in the 3rd 
District are facing more closures now than ever before due to a lack of 
available timber from federal lands. These mill closures result in the 
unnecessary loss of jobs and have broader community impacts as well. 
Furthermore, the Forest Service's failure to manage our forests has 
left them dangerously dense, making the risk of life threatening 
wildfire greater each year. Recent wildfires in our State and others in 
the western United States should provide warning enough that it is time 
to act. Failure to heed these warnings will only lead to a loss of 
wildlife habitat, considerable damage to the tourism industry, and most 
importantly, the endangerment of human lives. We are also all aware 
that our rural schools are vastly underfunded and that Secure Rural 
Schools was originally intended as a stop-gap measure to provide a 
minimum level of funding while a permanent solution was reached. 
Extending this costly program which provides only a minimal level of 
funding to schools and which has broken down in its implementation over 
the years due to Forest Service malfeasance is not the responsible 
course to take.
    This draft legislation appears to address all three major problems 
and does so in a way that is sustainable for generations to come. While 
I recognize that this draft is just the beginning of the process 
towards reform, I support the Chairman in bringing it forward and it is 
my hope that a final version is passed as soon as possible.
                                 ______
                                 

Statement of The Honorable Don Young, a Representative in Congress from 
 the State of Alaska, on the National Forest County Revenue, Schools, 
                          and Jobs Act (draft)

    Chairman Bishop and Ranking Member Grijalva, thank you for holding 
a hearing on this important legislation, which would address an issue 
that is critical to many communities in my State. Also, I appreciate 
the opportunity you have afforded both Members and others to provide 
feedback on this draft.
    Alaska is home to the nation's two largest national forests. They 
used to provide many well paying jobs and steady revenue to the local 
economies in their regions, but due to an unstable and an almost 
nonexistent timber supply coming from the U.S. Forest Service, coupled 
with endless litigation from environmental groups, this is no longer 
the case.
    Make no mistake; the Secure Rural Schools Program is critical to 
many of my communities. For example, this program provides 25% of the 
revenue to the Wrangell schools and 30% to Klawock. The list goes on.
    As much as I support continuation of the Rural Schools Program we 
must not treat this program as another entitlement. In this tough 
economic time, an increase in forest jobs, while also funding our 
communities is a real economic stimulus package we should all agree 
upon. These communities don't want hand outs, they want to develop 
their resources and be self-sufficient, but the bottom line is, they 
need help and the Secure Rural Schools program can provide this help.
    This is a good bill and I hope it becomes law. However, for it to 
work in Alaska, I believe a few changes should be made.
    1)  The USFS cannot be allowed to determine the harvest level for 
each unit of the Forest System.
    In Alaska, the USFS has lowered the harvest level over 90% from 
nearly 500 million board feet to less than 50 million board feet a 
year. The USFS claims the problem is a lack of markets, but that is 
simply untrue. There is plenty of demand for Alaskan timber. It is a 
failure of leadership and vision that has caused this dramatic 
decrease. I believe Congress needs to set the harvest levels by statute 
in this bill.
    At a minimum, the to-be-determined percentage of the average of 
historical receipts must be robust to provide areas like Region 10 with 
a required harvest level high enough to support an industry and our 
rural schools. Over the 21 year period covered in this legislation 
(1980-2000), the annual historical harvest was 251 mmbf annually at a 
net stumpage of roughly $15 million. Even if the to-be-determined 
percentage of the average of historical receipts was 100%, it would 
still not equal the amount that Alaska currently receives under the 
Program. The current Tongass Land Management Plan plans for 267 mmbf 
annually. However, from 2001 to 2010, the USFS sold an average of only 
38 mmbf annually. The need for hard targets is evident.
    2)  A stronger waiver of federal judicial review must be included.
    The courts have been home court for extreme environmental groups to 
obstruct and defeat clear congressional policy. These courts have tied 
up federal timber sales throughout the country. The Committee must act 
not only to prevent judicial review, but must also amend and possibly 
eliminate the environmental report section of the bill. If the Agency 
doesn't complete this review in 180 days, can the timber sale continue?
    3)  In Alaska, we have a further problem. Roadless.
    The Federal District Court overturned a settlement that found that 
the Roadless Rule does not apply to Alaska. Now, on over 92% of forests 
in Alaska, the Roadless Rule applies. Since Section 105(3)(B) excludes 
any USFS land on which vegetation removal is prohibited by federal law, 
I fear this would take roadless out of the available pool and 
effectively void this bill's impacts in Alaska.
    In closing, Mr. Chairman, I want to thank you and your staff for 
putting together a fine bill that seeks an outside-the-box solution to 
funding the Secure Schools Program and seeks to strengthen the economic 
situations in our rural communities. I look forward to working with you 
on a final bill to ensure that Alaska's students aren't left behind.
    I urge this Committee to pass this bill so we can put Americans 
back to work and save our rural schools and economies.
    Thank you again.

                                 
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