[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                   NATIONAL FOREST MANAGEMENT AND ITS 
                     IMPACTS ON RURAL ECONOMIES AND 
                              COMMUNITIES 

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON CONSERVATION, ENERGY,
                              AND FORESTRY

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 13, 2013

                               __________

                            Serial No. 113-2


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

80-079 PDF                       WASHINGTON : 2013 


                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              DAVID SCOTT, Georgia
MIKE ROGERS, Alabama                 JIM COSTA, California
K. MICHAEL CONAWAY, Texas            TIMOTHY J. WALZ, Minnesota
GLENN THOMPSON, Pennsylvania         KURT SCHRADER, Oregon
BOB GIBBS, Ohio                      MARCIA L. FUDGE, Ohio
AUSTIN SCOTT, Georgia                JAMES P. McGOVERN, Massachusetts
SCOTT R. TIPTON, Colorado            SUZAN K. DelBENE, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  GLORIA NEGRETE McLEOD, California
MARTHA ROBY, Alabama                 FILEMON VELA, Texas
SCOTT DesJARLAIS, Tennessee          MICHELLE LUJAN GRISHAM, New Mexico
CHRISTOPHER P. GIBSON, New York      ANN M. KUSTER, New Hampshire
VICKY HARTZLER, Missouri             RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            PETE P. GALLEGO, Texas
KRISTI L. NOEM, South Dakota         WILLIAM L. ENYART, Illinois
DAN BENISHEK, Michigan               JUAN VARGAS, California
JEFF DENHAM, California              CHERI BUSTOS, Illinois
STEPHEN LEE FINCHER, Tennessee       SEAN PATRICK MALONEY, New York
DOUG LaMALFA, California             JOE COURTNEY, Connecticut
RICHARD HUDSON, North Carolina       JOHN GARAMENDI, California
RODNEY DAVIS, Illinois
CHRIS COLLINS, New York
TED S. YOHO, Florida

                                 ______

                      Nicole Scott, Staff Director

                     Kevin J. Kramp, Chief Counsel

                 Tamara Hinton, Communications Director

                Robert L. Larew, Minority Staff Director

                                 ______

           Subcommittee on Conservation, Energy, and Forestry

                 GLENN THOMPSON, Pennsylvania, Chairman

MIKE ROGERS, Alabama                 TIMOTHY J. WALZ, Minnesota, 
BOB GIBBS, Ohio                      Ranking Minority Member
SCOTT R. TIPTON, Colorado            GLORIA NEGRETE McLEOD, California
ERIC A. ``RICK'' CRAWFORD, Arkansas  ANN M. KUSTER, New Hampshire
MARTHA ROBY, Alabama                 RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            MIKE McINTYRE, North Carolina
KRISTI L. NOEM, South Dakota         KURT SCHRADER, Oregon
DAN BENISHEK, Michigan               SUZAN K. DelBENE, Washington

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................     6
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     1
    Prepared statement...........................................     3
Walz, Hon. Timothy J., a Representative in Congress from 
  Minnesota, opening statement...................................     4
    Prepared statement...........................................     5

                               Witnesses

Tidwell, Thomas, Chief, U.S. Forest Service, U.S. Department of 
  Agriculture, Washington, D.C...................................     6
    Prepared statement...........................................     8
    Submitted questions..........................................    82
McKetta, Ph.D., C.F., Charles W., Natural Resources Economist, 
  Forest Econ Inc., Moscow, ID; on behalf of Society of American 
  Foresters......................................................    31
    Prepared statement...........................................    33
Sample, Ph.D., V. Alaric, President, Pinchot Institute for 
  Conservation, Washington, D.C..................................    37
    Prepared statement...........................................    39
Kane, Kenneth C., President, Generations Forestry, Inc., Kane, 
  PA; on behalf of Association of Consulting Foresters of America    43
    Prepared statement...........................................    44
Schuessler, James, Executive Director, Forest County Economic 
  Development Partnership, Crandon, WI...........................    55
    Prepared statement...........................................    57

                           Submitted Material

Rigdon, Phil, President, Intertribal Timber Council, submitted 
  letter.........................................................    79


   NATIONAL FOREST MANAGEMENT AND ITS IMPACTS ON RURAL ECONOMIES AND


                              COMMUNITIES

                              ----------                              


                       WEDNESDAY, MARCH 13, 2013

                  House of Representatives,
        Subcommittee on Conservation, Energy, and Forestry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:02 a.m., in Room 
1300 of the Longworth House Office Building, Hon. Glenn 
Thompson [Chairman of the Subcommittee] presiding.
    Members present: Representatives Thompson, Goodlatte, 
Rogers, Tipton, Crawford, Ribble, Noem, Walz, Negrete McLeod, 
Kuster, Nolan, and DelBene.
    Staff present: Brent Blevins, Debbie Smith, Lauren 
Sturgeon, Patricia Straughn, Suzanne Watson, Tamara Hinton, 
Anne Simmons, Keith Jones, Lisa Shelton, Liz Friedlander, John 
Konya, Merrick Munday, and Caleb Crosswhite.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    The Chairman. Good morning, everyone. This hearing of the 
Subcommittee on Conservation, Energy, and Forestry to discuss 
the National Forest management and its impacts on rural 
economies and communities, will come to order.
    Let me begin by welcoming everyone to the first hearing of 
the Conservation, Energy, and Forestry Subcommittee of the 
113th Congress. I particularly want to extend a warm welcome to 
our new Ranking Member, Mr. Walz. We are all honored to be able 
to serve with him and for his leadership to this Committee as 
well as the new Members of our Subcommittee. This Subcommittee 
has broad jurisdiction over a large number of issues and areas 
at the U.S. Department of Agriculture including forestry, an 
important topic for many of us here today.
    Forestry plays an important role in the rural economy. The 
forest product industry employs almost 900,000 people across 
the country not including jobs directly supporting the 
industry, and in 2012, the forest products industry had an 
economic impact approaching $190 billion.
    Our National Forests are capable of providing and 
sustaining these economic benefits but they need proper 
management in order to do so, which is the topic of today's 
hearing, the management of our National Forest System and what 
impacts this management has on neighboring communities.
    The Forest Service manages more than 193 million acres of 
land across 41 states. Within those 41 states, there are over 
700 counties containing National Forest land. These communities 
rely on us to be good stewards of these Federal lands. The 
people who live in those communities depend on well-managed 
National Forests to foster jobs and economic opportunity. These 
jobs can come from diverse sources such as timber, energy 
production or recreation. If these jobs disappear, so too do 
jobs that support those industries. If these disappear, then 
school systems and infrastructure in these communities are 
certainly threatened.
    Thus, effective management and Forest Service decisions 
have significant consequences on our constituents who live in 
and around our National Forests. When Congress created the 
National Forest System more than 100 years ago, it was designed 
so that the surrounding communities would benefit from the 
multiple uses. A share of the revenue from each forest's 
activities has to be returned to the community in exchange for 
the fact that these lands were taken off the local tax rolls. 
Additionally, these forests would provide jobs to communities 
by harvesting timber, collecting natural resources or providing 
recreational opportunities.
    However, as timber outputs have declined over the last 25 
years, we have seen the impacts on these communities. 
Unemployment is higher in these communities, and we have 
witnessed some of the most intense fire seasons in the last 50 
years recently. I continue to be very troubled by the 
significant reduction in timber harvesting in the National 
Forests. Harvesting is a critical piece of management, and the 
Forest Service cannot effectively manage our forests without 
it.
    To his credit, Secretary Vilsack recognized these concerns, 
and last February he stated his goal for the Forest Service to 
harvest 3 billion board feet annually by 2014. The Forest 
Service harvested more than 2.6 billion board feet last year, 
its highest total since 2000.
    Now, I applaud these efforts and I hope that the agency 
will go further to see harvesting levels closer to the 
recommended sustainable cuts in each forest. However, I hope 
the agency does not make a shortsighted decision to reduce 
treatments to National Forest land in an attempt to meet the 
obligations of the sequester. Though it is a decision that may 
save a bit of money in the short term, it will only further 
impair the National Forest System that is already dangerously 
mismanaged, resulting in fewer jobs, more fire-prone forests, 
and communities struggling to make ends meet. Sequestration is 
an unfortunate approach to achieve deficit reduction but we 
must face reality: the Federal Government must shrink. We must 
utilize resources more efficiently and effectively.
    With any hope, these austerity measures will held remind us 
of just how critical forest management for both Federal 
spending and economic growth, and through better forest 
management we will spend less money fighting wildfires. Through 
increased timber harvests, we will see more revenues to the 
U.S. Treasury and our local communities, and I look forward to 
hearing today from Chief Tidwell as to how the Service will be 
managing this process. Today we are going to hear testimony 
about other ways the Forest Service can help promote rural 
economic health including energy production or by providing 
recreational opportunities in our forests.
    I want to welcome our panel of witnesses and thank them for 
sharing their perspectives today. I would also like to 
especially say thank you to Mr. Ken Kane, a constituent of mine 
who will be testifying later this morning. I look forward to a 
productive discussion on how we can be certain the Forest 
Service is doing everything within reason to produce a stronger 
rural America.
    I welcome Chief Tidwell back before the Subcommittee. He 
has been a great partner to work with as we share this common 
commitment towards healthy forests. We have enjoyed a good 
working relationship in the past, and I look forward to working 
with you to ensure that we have healthy and prosperous rural 
communities across America.
    [The prepared statement of Mr. Thompson follows:]

Prepared Statement of Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
    Good morning. I want to welcome everyone to the first hearing of 
the Conservation, Energy, and Forestry Subcommittee this Congress.
    I particularly want to extend a warm welcome to our new Ranking 
Member, Mr. Walz, as well as the new Members of our Subcommittee.
    This Subcommittee has broad jurisdiction over a large number of 
issue areas at USDA, including forestry--an important topic for many of 
us here today.
    Forestry plays an important role in the rural economy.
    The forest products industry employs almost 900,000 people across 
the country, not including jobs directly supporting the industry, and 
in 2012, the forest products industry had an economic impact 
approaching $190 billion.
    Our National Forests are capable of providing and sustaining these 
economic benefits, but they need proper management in order to do so, 
which is the topic of today's hearing: the management of our National 
Forest System and what impacts this management has on neighboring 
communities.
    The Forest Service manages more than 193 million acres of land 
across 41 states. Within those 41 states, there are over 700 counties 
containing National Forest land.
    These communities rely on us to be good stewards of these Federal 
lands.
    The people who live in those communities depend on well managed 
National Forests to foster jobs and economic opportunity.
    These jobs can come from diverse sources such as timber, energy 
production, or recreation.
    If these jobs disappear, so too do jobs that support those 
industries. If these disappear, then school systems and infrastructure 
in these communities are threatened.
    Thus, effective management and Forest Service decisions have 
significant consequences on our constituents who live in and around our 
National Forests.
    When Congress created the National Forest System more than a 
hundred years ago, it was designed so that the surrounding communities 
would benefit from the multiple uses.
    A share of the revenue from each forest's activities was to be 
returned to the communities in exchange for the fact that these lands 
were being taken off local tax rolls.
    Additionally, these forests would provide jobs to communities by 
harvesting timber, collecting natural resources, or providing 
recreational opportunities.
    However, as timber outputs have declined over the last 25 years, we 
have seen the impacts for these communities.
    Unemployment is higher in these communities and we have witnessed 
some of the most intense fire seasons in the last 50 years recently.
    I continue to be very troubled by the significant reduction in 
timber harvesting in National Forests.
    Harvesting is a critical piece of management--and the Forest 
Service cannot effectively manage our forests without it.
    To his credit, Secretary Vilsack recognized these concerns. Last 
February, he stated his goal for the Forest Service to harvest 3 
billion board feet annually by 2014.
    The Forest Service harvested more than 2.6 billion board feet last 
year, its highest total since 2000.
    I applaud these efforts and hope that the agency will go farther to 
see harvesting levels closer to the recommended sustainable cuts in 
each forest.
    However, I hope the agency does not make a short sighted decision 
to reduce treatments to National Forest land in an attempt to meet the 
obligation of the sequester.
    Though it's a decision that may save a bit of money in the short 
term, it will only further impair a National Forest System that's 
already dangerously mismanaged, resulting in fewer jobs, more fire-
prone forests, and communities struggling to make ends meet.
    Sequestration is an unfortunate approach to achieve deficit 
reduction, but we must face reality: the Federal Government must 
shrink. We must utilize resources more efficiently and effectively.
    With any hope, these austerity measures will help remind us of just 
how critical forest management is for both Federal spending and 
economic growth.
    Through better forest management, we'll spend less money fighting 
wildfires. Through increased timber harvests, we'll see more revenue to 
the U.S. Treasury and our local communities. I look forward to hearing 
today from Chief Tidwell as to how the Service will be managing this 
process.
    Today, we will hear testimony about other ways the Forest Service 
can help promote rural economic health, including energy production or 
by providing recreational opportunities in our forests.
    I want to welcome our panel of witnesses and thank them for sharing 
their perspectives today. I'd also like to especially say thank you to 
Mr. Ken Kane, a constituent of mine, who will be testifying later this 
morning.
    I look forward to a productive discussion on how we can be certain 
the Forest Service is doing everything within reason to produce a 
stronger rural America.
    It is good to see Forest Service Chief Tidwell and I welcome Chief 
Tidwell back before the Subcommittee.
    We have enjoyed a good working relationship in the past and I look 
forward to working with you to ensure we have healthy and prosperous 
rural communities across America.

    The Chairman. And now I yield to the Ranking Member, Mr. 
Walz, for an opening statement.

OPENING STATEMENT OF HON. TIMOTHY J. WALZ, A REPRESENTATIVE IN 
                    CONGRESS FROM MINNESOTA

    Mr. Walz. Well, thank you, Mr. Chairman, and 
congratulations on assuming the chairmanship. It has been 
obvious since you came to Congress, you have been a champion of 
rural issues, rural America, and done it in a positive, 
visionary way. I am very grateful and proud to be serving with 
you.
    I would also like to acknowledge one of my constituents who 
is here. Kevin Paap from Blue Earth County, Minnesota, is here. 
He is President of the Minnesota Farm Bureau. He often says he 
has a farm there where he raises corn, soybeans and boys, and I 
think that kind of sums up what we are about; trying to make 
the land productive, gain the wealth for the country and do it 
in a way that is managed for future generations, so Kevin, I 
appreciate that.
    Chief Tidwell, thank you for your service to this country. 
Thank you for being here and sharing your expertise on how we 
can correctly manage our forest resources. I of course 
represent Minnesota's 1st District. That is the deep south of 
Minnesota down by Iowa. We as a state have vast timber 
resources, 16.3 million acres of forestland, 3 million of that 
is National Forest, 3.9 million is state forestland. Our 
Department of Natural Resources does a wonderful job. They are 
a front-runner in many of the management techniques that are 
being developed in forest fire suppression, so we are grateful 
for that.
    The thing I find most interesting is that the forest and 
timber industry, provides about $9 billion in economic impact 
to the state. I also represent the Mayo Clinic. That $9 billion 
represents about twice what the Mayo Clinic does, and they 
employ 40,000 people. I think that puts it into perspective, 
forest and timber is a huge industry.
    The interesting part is, it is not an all or nothing. Our 
recreational activities contribute an additional $11.6 billion. 
So you can have your cake and eat it too if we do it right in 
terms of managing these resources, using them correctly and 
still being able to have the multi-use that we want to try and 
get.
    My focus, much like the Chairman's, is to ensure that 
Federal funding for state and private forestry is well spent 
and that our National Forests are managed in a way that meets 
that multiple-use mission. I would like today, to hear from 
some of you--Chief Tidwell, you may be the person to help me 
more with this--and get a clearer picture of what sequester is 
going to mean. I have been told that sequester is Latin for 
idiotic governance, and it may be true. My fear is that when 
you do indiscriminate, across-the-board cuts that if instead we 
could use smart money, we could save money in the long run. I 
want to hear how the Forest Service is making plans for that.
    So again, to all of our witnesses, thank you. I had a 
chance to read your testimony. I appreciate that there is a lot 
of expertise in this room today, so I want to hear where you 
are coming from, making sure we get this right, and certainly a 
renewable resource like our timber resources is one that this 
nation can put to good use both now and in future generations.
    Mr. Chairman, I again congratulate you and yield back my 
time.
    [The prepared statement of Mr. Walz follows:]

    Prepared Statement of Hon. Timothy J. Walz, a Representative in 
                        Congress from Minnesota
    Thank you, Mr. Chairman
    Chief Tidwell and other distinguished witnesses, thank you for 
being here today to share your knowledge and expertise with the 
Subcommittee.
    I want to first of all offer my complete cooperation in listening 
and learning from your testimony today, and hope that you will feel 
free to contact me at any time to discuss any issue of concern to you.
    My interests are those of MN in general and Minnesota's First 
District in particular.
    MN is home to nearly 16.3 million acres of forestland total; 3 
million acres of National Forest land and 3.9 million acres of state 
forestland.
    Our DNR is a national forerunner in developing techniques to 
control and suppress forest fires.
    We have a robust forest products industry with annual value 
northwards of $9 billion that coexists with an even more robust 
economically significant outdoors tradition with $11.6 billion yearly 
in consumer spending alone.
    My focus is to ensure that Federal funding for state and private 
forestry is well-spent and that our National Forests are managed in a 
way that meets the multiple-use mission of the Forest Service.
    I also understand that we all must adjust in this new world of 
sequestration, and would like to get a clearer picture of exactly how 
cuts to the Forest Service funding will impair program delivery on the 
ground.
    With that, I look forward to hearing your testimony and thank you 
again for your willingness to participate today.
    I yield back, Mr. Chairman.

    The Chairman. I thank the gentleman.
    The chair would request that other Members submit their 
opening statements for the record so the witnesses may begin 
their testimony and to ensure that there is ample time for 
questions.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    Good morning. Thank you, Chairman Thompson, and Ranking Member Walz 
for holding today's hearing, the first Conservation, Energy, and 
Forestry Subcommittee hearing this Congress.
    As we all know, the Committee will again try to write a new farm 
bill this year. The budget situation remains our biggest challenge. We 
need to make sure that all programs overseen by the Agriculture 
Committee are operating as efficiently as possible, free of waste and 
abuse. Today's hearing will be helpful in giving us a better 
understanding of how forestry programs currently operate; maybe we'll 
find some improvements that can be made in the next farm bill.
    Before the Committee begins farm bill consideration, it bears 
repeating that while there are significant challenges ahead of us, the 
more we can work together, the more smoothly the process will go.
    Again, I thank the Chairman for holding today's hearing and look 
forward to hearing from our witnesses.

    The Chairman. At this time I would like to welcome our 
first panel to the table, and our first panel is our Chief of 
our U.S. Forest Service, Mr. Tom Tidwell of the United States 
Department of Agriculture. Chief Tidwell, please begin when you 
are ready.

        STATEMENT OF THOMAS TIDWELL, CHIEF, U.S. FOREST
            SERVICE, U.S. DEPARTMENT OF AGRICULTURE,
                        WASHINGTON, D.C.

    Mr. Tidwell. Mr. Chairman, Members of the Subcommittee, 
thank you again for the opportunity to present the views of the 
U.S. Department of Agriculture regarding National Forest 
management and the benefits of public and private lands on 
rural economies and our communities.
    In my written testimony, I try to share many of the 
benefits of the National Forests, and in my remarks today, I am 
going to briefly highlight a few of those key points.
    The benefits of the National Forests and Grasslands without 
question are significant to this country and especially to 
rural America. For instance, in 2011, the various activities on 
the National Forests and Grasslands contributed over $36 
billion to America's gross domestic product and supported 
nearly 450,000 jobs. Now, recreation related activities, which 
support 166 million visits to the National Forests, support a 
little over 200,000 jobs and about $13.5 billion to the GDP. 
Forest products from the National Forests, they support another 
42,000 jobs, another $3 billion to the GDP. Grazing, over 
19,000 jobs. Minerals and energy production, about 56,000 jobs 
and $8 billion to the GDP. We administer 160,000 mining claims 
and 2,600 mineral sale contracts. Returns to the Treasury on 
these lease rentals, royalties and bonus bids, ranges from $650 
to $850 million a year.
    Now, especially in rural America, these benefits and 
associated activities are just essential to sustaining our 
communities. But in addition to the commercial activities, 20 
percent of Americans rely on the drinking water that originates 
off the National Forests. Our forests in this country offset a 
significant amount of the carbon emissions in this country, and 
on the National Forests we estimate offsetting over four 
percent of those emissions. On the recreation use, it goes 
beyond just those numbers. I can't stress enough that I think 
many of you can relate to how many people enjoy going out and 
recreating on their National Forests and Grasslands. It is 
where America plays. It is where they hunt, they fish. It is 
where their ride their horses, their motor bikes, their ATVs.
    In addition to these benefits, we also administer 74,000 
use authorizations that help benefit the public and local 
communities such as 15,000 miles of transmission lines, 6,000 
miles of energy pipelines, 1,600 mountaintop communications 
sites, and sir, I could go on and on about these benefits.
    But the other thing I wanted to point out is that through 
our state and private programs, we also help support private 
forest owners. In fact, we have a program with our Forest 
Stewardship program where we are helping private landowners 
with 20 million acres of private forested lands to provide them 
the technical assistance that they need to be able to manage 
their private forestlands and to keep those private lands 
forested.
    Now, all these benefits that I have been talking about, 
there is a threat to these benefits and it is something we have 
been very clear about over the last couple of years, about the 
number of acres that we feel need to have some form of 
restoration. We estimate between 62 and 85 million acres of our 
National Forests are in need of some form of restoration. When 
you think about the more than 60 percent of this country that 
is in a moderate to severe drought, and that over the last 10 
years we have had 45 million acres out West that have been 
affected by bark beetle--and we estimate there is another 80 
million acres of trees that are projected to be at risk from 
severe mortality due to insects and disease--you add to that 
the threat of rapid escalation of the severe-fire behavior that 
we have seen over the last 10 years, and you understand that 
our National Forests, and the benefits that they provide, 
really are threatened right now. That is why we have moved to 
increase the rate of restoration on these forests, and I 
appreciate you acknowledging Secretary Vilsack's support for us 
to be able to increase the amount of restoration work we are 
doing on these lands by 20 percent between last year and 2014. 
That includes the outputs, not only the streams that are 
restored, the miles of roads that are improved, it also 
increases timber output by 20 percent. It is just essential 
that we are able to maintain the resiliency and resistance of 
these National Forests so they can deal with the stresses--the 
stresses of drought, the stresses of insect and disease, and 
the natural disturbances that we are seeing significant 
increases year in and year out, whether it is wind storms, ice 
storms, whether it is flooding, whether it is fire. It is 
essential that we do what we can to help these forests to be as 
resilient as they can so they can continue to provide the 
benefits that we all rely on.
    I want to thank you for your time this morning and I look 
forward to your questions.
    [The prepared statement of Mr. Tidwell follows:]

Prepared Statement of Thomas Tidwell, Chief, U.S. Forest Service, U.S. 
              Department of Agriculture, Washington, D.C.
    Mr. Chairman, and Members of the Subcommittee, thank you for the 
opportunity to present the views of the U.S. Department of Agriculture 
regarding National Forest management and its benefits for public and 
private lands on rural economies and communities.
    The National Forests and Grasslands were established to protect the 
land, secure favorable conditions of water flows, and provide a 
sustainable supply of goods and services. National Forest System (NFS) 
lands are managed using a multiple-use approach with the goal of 
sustaining healthy terrestrial and aquatic ecosystems while addressing 
the need for resources, commodities, and services for the American 
people. Rural and urban communities depend on the forests for a variety 
of resources, commodities, and services, but for the rural communities 
in particular, National Forest management can impact local economic and 
social conditions. With our many partners, the Forest Service is 
working to maintain the functions and processes characteristic of 
healthy, resilient forests and watersheds, and through delivery of our 
programs, maintain and enrich the social and economic environment of 
our local communities.
Vegetation Management
    Our forests are important to all of us, and people understand that 
forests provide a broad range of values and benefits, including 
biodiversity, recreation, clean air and water, forest products, erosion 
control, soil renewal and more. Forests, which cover \1/3\ of the 
country's landmass, store and filter more than \1/2\ of the nation's 
water supply and absorb 20 percent of the country's carbon emissions. 
Our mission of sustaining the health, resilience and productivity of 
our nation's forests is critically important to maintaining these 
values and benefits. Restoring the health and resilience of our forests 
generates important amenity values. A study by Cassandra Mosely and Max 
Nielson Pincus has shown that every million dollars spent on activities 
like stream restoration, hazardous fuels reduction, forestry or road 
decommissioning generates from 12 to 28 jobs. Through implementation of 
the Collaborative Forest Landscape Restoration Program--which relies 
heavily on stewardship contracting--the proponents of projects on NFS 
lands created or maintained 1,550 jobs through 2011.
    The Forest Service is leading the USDA Wood to Energy Initiative, a 
partnership between five agencies, including Rural Development and the 
Farm Service Agency. This interagency effort is focused on creating 
value for woody biomass by creating energy, for heating buildings, 
manufacturing and producing electricity. The initiative is focused on 
economically viable uses of wood. For example, wood chips and pellets 
are about \1/2\ the cost of fuel oil and propane for heating. The U.S. 
uses about 25 billion gallons of fuel oil and propane at a cost of 
about $75 billion, most of it consumed in rural America. It is 
important to keep in mind that wood energy is just one more part of an 
integrated wood products industry that produces structural material, 
furniture, pulp and paper. Our goal is to use all the parts of the 
trees for the highest value we can so that landowners can effectively 
manage their land whether it is public or private.
    Unfortunately, it is estimated that there are between 62 and 85 
million (high and very high fire risk) acres of National Forest System 
(NFS) lands in need of restoration. More than 60 percent of the 
contiguous United States is in a moderate or more severe stage of 
drought--with 20 percent of those areas experiencing exceptional 
drought conditions. In addition, insects and disease have weakened the 
resilience of America's forests. Nationally, approximately 80 million 
acres of trees are projected to be at risk of severe mortality due to 
insect and disease. Over the past 10 years in the west, approximately 
45 million acres across all land ownerships have been affected by 20 
different species of bark beetles.
    It is widely recognized that management of our forest resources has 
not kept pace with the ever increasing need for restoration. 
Organizations such as the National Forest Foundation, American Forest 
Foundation, The Nature Conservancy, the National Association of State 
Foresters, the Wilderness Society, U.S. Endowment for Forests and 
Communities, the Intertribal Timber Council, and the Western Governors 
Association have embraced an agenda to actively restore resilient 
landscapes and provide for community vitality. The Forest Service is 
striving to increase the number of acres that are restored by a variety 
of treatments annually. This increase would allow the Forest Service to 
increase the number of acres and watersheds restored across the system, 
while supporting existing infrastructure and jobs.
    The Forest Service recognizes the need for a strong forest industry 
to help accomplish forest restoration work; the best opportunity for 
reducing the cost of these restoration treatments is through timber 
harvest and stewardship contracting.
    The benefits of maintaining a robust forest industry flows not only 
to local communities but also to the Forest Service itself as the 
agency relies on local forest contractors and mills to provide the 
workforce to undertake a variety of restoration activities. The 
industry's workforce is larger than either the automotive or chemical 
industries, currently employing nearly 900,000 workers. And the good 
news is that there have been recent upturns in the housing market and 
lumber prices, resulting in higher demand and prices for sawtimber. The 
capacity exists within current infrastructure to meet this increased 
demand for lumber through adding extra shifts, reopening mills, and 
efficiency gains. The higher demand and prices for timber will enable 
the Forest Service (FS) to complete more restoration treatments, 
especially under a stewardship contract.
    Stewardship contracting is a critical tool that allows the Forest 
Service to more efficiently complete restoration activities. 
Permanently reauthorizing stewardship contracting and expanding the use 
of this tool is crucial to our ability to collaboratively restore 
landscapes at a reduced cost to the government by offsetting the value 
of the services received with the value of forest products removed. In 
Fiscal Year 2012, 25 percent of all timber volume sold was under a 
stewardship contract. Stewardship contracting authorities, such as 
goods for services, funded watershed and wildlife habitat improvement 
projects, invasive species removal, road decommissioning, and hazardous 
fuels reduction activities.
    The Forest Service continues to be a leading agency in the Federal 
Government to preferentially select domestically harvested wood 
products in building construction projects while increasing its 
commitment to green building standards. All Forest Service building 
projects incorporate green building principals such as energy 
efficient, locally produced wood products, recycling and reuse of 
building materials. New building construction and major renovation 
projects for administration facilities or research laboratories over 
10,000 gross square feet must be registered and certified using either 
the United States Green Building Council LEED rating system, or other 
accredited third-party certification systems.
    The Forest Service and USDA, as well as the forest products 
industry and resource management organizations, support a science-based 
approach of outlining the benefits of using wood and wood-based 
products in green building in the U.S. The inherent benefits of using 
wood go beyond economic gains. Conservation components such as 
increased forest productivity, cleaner air and water, and enhanced 
wildlife habitat will be realized as we actively manage our nation's 
forests. The process of harvest, transport, manufacturing and use of 
wood in structures creates less gas emissions than other building 
products such as concrete or steel. (``Life-cycle inventory and 
assessment research at the Forest Products Laboratory: Wood products 
used in building construction, U.S.D.A. Forest Service'').
    The Forest Service provides a significant amount of value to the 
rural economies through its active management of rangelands. 95 million 
acres are within grazing allotments on National Forest lands, 
Grasslands or the Midewin Tallgrass Prairie, in 30 different states. 
Ten million private acres are within grazing allotments which are 
cooperatively managed, providing open space and un-fragmented wildlife 
habitat, connecting state, private, and Federal lands.
    To accomplish effective vegetation management, the Forest Service 
is fostering an efficient National Environmental Planning Act (NEPA) 
process by focusing on improving agency policy, learning, and 
technology. These NEPA process improvements will increase decision-
making efficiencies, resulting in on-the-ground restoration work 
getting done more quickly and across a larger landscape. In addition to 
the Forest Planning rule, the agency has initiated a NEPA learning 
networks project to learn from and share the lessons of successful 
implementation of efficient NEPA analyses. The goal of this effort is 
to ensure that the Agency's NEPA compliance is as efficient, cost-
effective, and up-to-date as possible. Specifically we are looking at 
expanding the use of focused Environmental Assessments (EAs), iterative 
Environmental Impact Statement documentation (EISs), expanding 
categories of actions that may be excluded from documentation in an EA 
or an EIS, and applying an adaptive management framework to NEPA. 
Regarding technology, the Forest Service's investments in Electronic 
Management of NEPA (eMNEPA) provide considerable cost and time savings, 
contributing to an efficient NEPA process by reducing the 
administrative workload.
    Our landscape-scale NEPA projects will also increase efficiencies. 
For example, our Mountain Pine Beetle Response Project on the Black 
Hills National Forest is implementing a landscape-scale adaptive 
approach for treating current and future pine beetle outbreaks. We are 
also implementing the Four Forest Restoration Initiative project in the 
Southwest for landscape-scale forest restoration projects. All of these 
efforts are aimed at becoming more proactive and efficient in 
protecting the nation's natural resources, while providing jobs to the 
American people.
Water
    Water is a vitally important natural resource flowing from 
America's forests, which provides great economic benefit to many rural 
and urban communities. It is estimated that forests provide clean 
drinking water to more than 180 million people from coast to coast. 
Watersheds on National Forests and Grasslands are the source of 20 
percent of the nation's drinking water supply and over 50 percent of 
the water supply in the West. Many major urban centers, like Denver, 
Portland, Atlanta, and Los Angeles, depend on National Forests for 
their water.
    Water on the National Forests is an important recreational resource 
and rural areas near forest land often depend on tourist spending to 
help support their local economies. Water-based outdoor recreation is a 
major attractant since more people in the U.S. fish, 30 million, than 
play golf, 24.2 million, or play tennis, 10.2 million (The Economic 
Benefits of Protecting Healthy Watersheds, EPA 841-N-112-004). National 
Forests and grasslands contain more than 200,000 miles of fish-bearing 
streams--streams that support nationally renowned recreational 
fisheries and local jobs.
    Forest Service research helps maintain clean water important to 
communities by providing watershed management tools and educational 
programs. An example is the Stream Systems Technology Center which 
improves knowledge of stream systems and watershed hydrology by 
developing operational tools and technology, providing training and 
technical support, and identifying needs to secure favorable conditions 
of water flows.
Recreation
    Recreation on the National Forests is extremely important for many 
communities. Over the past few years, the National Forests and 
Grasslands have hosted an average of nearly 166 million visits per 
year. Visitors engage in activities such as camping, picnicking, 
skiing, snowboarding, hunting, fishing, hiking, off highway vehicle and 
snowmobile use, viewing scenery and wildlife, scenic driving and 
visiting cultural sites and visitor centers. In connection with their 
visits, recreation visitors directly spend about $11 billion in 
communities near National Forests. With multiplier effects, this 
amounts to $13.5 billion and accounts for 47% of the Forest Service 
contribution to the national Gross Domestic Product (GDP) (National 
Visitor Use Monitoring, 2011).
    The direct visitor spending, combined with the ripple effects in 
the nearby economies, sustains more than 200,000 full and part-time 
jobs (National Visitor Use Monitoring, 2011). The vast majority of 
these jobs are in gateway communities. These towns' distinguishing 
feature is proximity to public lands; the vitality of their social and 
economic structure often depend on the management decisions being made 
on and for these public lands.
    Partnering with private sector businesses to develop and maintain 
ski areas on NFS lands has proven to be a particularly significant 
economic engine for gateway communities. Currently, 122 alpine ski 
areas are located on NFS lands, which together comprise over 60% of the 
downhill skiing capacity in the United States. The direct spending on 
downhill skiing and snowboarding by visitors to National Forests 
amounts to about $3.5 billion annually. With ripple effect, this 
translates to nearly a $5 billion contribution to GDP and represents 
approximately 4,000 full and part-time jobs. Moreover, many of these 
locations are expanding their summer activity offerings, further 
enhancing their importance to gateway communities. (National Visitor 
Use Monitoring, 2011).
    The number and diversity of our recreation opportunities and the 
quality of our recreation settings are the primary reasons visitors 
keep coming. Stable and robust visitation numbers provide desirable 
opportunities for a wide array of businesses. High quality natural 
resource settings are among the benefits that people seek when deciding 
where to live or retire. Gateway communities benefit from both.
    The operation and maintenance of many of our recreation sites and 
reservation system is dependent on user fees, such as campground fees. 
The agency collects about $65 million annually in user fees through the 
Forest Land Recreation Enhancement Act (FLREA), which sunsets December 
8, 2014. Ninety five percent of FLREA funds go back to where they are 
collected for the maintenance and operation of recreation facilities. 
The Forest Service is working with the Department of the Interior to 
reauthorize FLREA. A loss of this funding would create a burden that 
could not be made up with appropriated or other partnered funding and 
would have a direct impact on rural economies due to closures of 
recreation sites and loss of jobs.
Special Uses
    The Forest Service manages approximately 74,000 special use 
authorizations. Special use authorizations allow for the use of NFS 
lands for numerous purposes to benefit the public such as energy 
transmission and communications infrastructure, renewable energy-
related uses, public service facilities such as ski areas, resorts and 
marinas, as well as services such as outfitting and guiding. There are 
180 types of special uses.
    The special uses program provides significant public benefits. Over 
6,600 miles of energy-related pipeline and some 15,000 miles of 
transmission line rights-of-way cross NFS lands. In addition 
approximately 1,600 communication sites are located on NFS lands. 
Federal Energy Regulatory Commission (FERC) licensed dams provide 
enough power for some 15 million homes. Private businesses and 
nonprofit entities provide approximately \1/2\ of the recreation 
opportunities on NFS lands, including 122 ski areas, 259 resorts, 77 
marinas, 311 organizational camps, 230 concession campground 
operations, nearly 5,000 outfitting and guiding operations, and nearly 
1,000 recreation events each year. The agency also leases some 14,000 
forest cabin lots.
    Forest Service special uses generate approximately $100 million in 
land use fees annually Special uses provide many benefits to the 
American public and are one of the many ways that NFS lands provide 
resources and services in areas such as energy, communications, and 
recreation. Special uses provide business opportunities for large and 
small companies, thereby supporting the national and local economies. 
Because ten percent of the continental U.S. is National Forest System 
land, the agency necessarily plays a critical role in energy 
development, energy transmission and communications.
    In addition, the public benefits greatly from this program by 
receiving recreation and other services which could not be provided by 
the Forest Service.
Minerals, Oil and Gas
    Over 5 million acres of NFS lands are currently leased for oil, 
gas, coal, and phosphate mining operations. Our energy and minerals 
programs contribute to sustainable domestic energy production and 
support many jobs and socioeconomic benefits to the American people, 
while protecting healthy ecosystems.
    At any given time, the Forest Service administers operations on 
approximately 160,000 mining claims and manages approximately 2,600 
mineral material sale contracts. The value of energy and minerals 
production from these operations on NFS lands typically exceeds $6.5 
billion per year, as calculated by the Forest Service and the 
Department of the Interior's Office of Natural Resources Revenue.
    Mineral receipts are derived from annual lease rentals, royalties 
on production, bonus bids for competitive leases, and mineral material 
sales. Of the total revenues received, between 25 and 50 percent--
depending on whether production is from acquired lands or lands 
reserved from the public domain--are returned to the state or county of 
production. Federal royalties from oil and gas leases on NFS lands were 
$136 million in calendar year 2009. Returns to the Treasury each year 
from lease rentals, royalties on production, bonus bids, and mineral 
material sales on NFS lands typically range from $650 million to $850 
million. The Forest Service is analyzing additional lands across the 
country which could be made available for leasing.
Wildland Fire
    Within the United States, many states have recently experienced 
their largest and/or most destructive fires in history. Similar 
situations are happening on the global stage as well.
    Two primary factors are contributing to additional acreage being 
burned by wildfires: climate and vegetation. We can only expect 
climate-related drivers to increase. We are experiencing increases in 
the frequency of warm days and decreases in cold days. Heat waves are 
increasing in length, frequency, and/or intensity over most land areas. 
Researchers have shown a 78 day increase in the western fire season 
since 1970. Rising spring and summer temperatures across the west 
appear to be correlated to the increase in size and number of 
wildfires. Time of snowmelt also may be a factor. Scientists predict 
the western states will get hotter and drier by the end of the century. 
Fire seasons will grow longer and fires will increase. More and bigger 
fires will become the norm as climate continues to change. Key 
considerations to consider:

   In the absence of treatment, fuels continue to accumulate, 
        setting the stage for future fires to be more extreme. In many 
        areas fuels are at higher levels than historic norms.

   Where we are able to treat fuels and vegetation, we are able 
        to reduce fire impacts. The Forest Service monitors when 
        wildfires burn into treated fuels and the monitoring showed 
        that, of almost 1,200 cases studied, 94% of the fuel treatments 
        were effective in changing fire behavior and/or helping with 
        suppression.

   The pace of our fuel management activities has not kept pace 
        with the trends that drive fuel accumulation. Even with the 
        increase in wildfire many areas are still accumulating more 
        fuel than is being burned. Natural vegetation succession, 
        drought, land use patterns, insect outbreaks, invasive species, 
        and fire suppression--all contribute to accumulating fuel 
        loads.

   New construction of homes in the wildland urban interface 
        (WUI) greatly compound the fire management problem. About \1/
        10\ of land area occupied by housing and about \1/3\ of all 
        housing units in the conterminous United States are located in 
        the wildland urban interface.

   Severe fire may bring landscape conversions which can lead 
        to reduced habitat for endangered and threatened species such 
        as spotted owls, sage grouse, and cold water fish species. 
        These type conversions will also have impacts on water yield 
        and quality.

   The increased presence of wildfire is already having costly 
        and serious impacts on public health with increased levels of 
        smoke. As the fire seasons grow longer and fires increase, 
        there will be increased impacts to local and state economies.

   Regional action plans are being developed with Federal, 
        state and local cooperators to meet the goals of the National 
        Cohesive Wildland Fire Management Strategy (Restoring and 
        Maintaining Resilient Landscapes, Creating Fire-Adapted 
        Communities and Responding to Wildfires)
State and Private Forestry Programs
    The Forest Service works with a variety of partners to help private 
forest landowners conserve and manage their forest resources so the 
lands can contribute to local, rural economic growth and provide 
ecosystem services on which we all depend. Many rural economies rely on 
the proximity of forests and forestry sector jobs, and most of the 
nation's forest land, about \2/3\, is in private ownership. Through our 
National Woodland Owner Survey and other related studies, we attempt to 
better understand private and family forest owners--about 11 million of 
them--so we can continue to deliver appropriate tools and the types of 
technical assistance most needed.
    The Forest Stewardship, Forest Legacy, Community Forest, Urban and 
Community Forestry, Conservation Education, Forest Health Protection, 
and Cooperative Fire Protection Program first work to keep our state 
and private forests as forests in the face of increasing development 
pressures and other threats. These programs then work to protect these 
forests from harm while enhancing the benefits they provide.
    The Forest Stewardship Program is delivered directly to landowners 
through state forest agency partners, and a vast network of forestry 
technical assistance providers, forestry consultants, state forestry 
agencies, and nonprofit partners. Sustaining forest health on private 
ownerships through this program is thus vitally important, not only for 
the environment but also for the economic and social well-being of 
surrounding communities. Program funding is frequently leveraged 
locally to train professional consulting forester pools that landowners 
can then access. Assistance is provided primarily in the form of 
comprehensive long-term Forest Stewardship Management Plans. Currently, 
about 20 million acres of private forestland are being sustainably 
managed under these plans nationally. According to a study by the 
National Alliance of Forest Owners (NAFO, 2009), the contribution of 
these managed acres to employment is significant: ``On average, each 
1,000 acres of privately-owned forest is responsible for the creation 
of eight jobs.''
    The program is also increasingly serving as a ``gateway'' through 
which landowners can gain access to a variety of assistance, programs, 
and incentives including USDA cost-share, state tax abatement, forest 
certification, and emerging ecosystem service and renewable energy 
markets.
    Our newly adopted Landscape Stewardship Approach is attempting to 
provide further access to emerging markets by creating economies of 
scale for smaller landowners. Landscape-scale plans also facilitate 
cross-program and interagency coordination, make more efficient use of 
limited resources, tie individual ownership objectives to landscape-
scale resource management objectives, and help landowners understand 
how their actions contribute to broader landscape management efforts 
and their local economies.
    The Forest Health Protection Program (FHP) is helping states, 
landowners, communities and tribes combat insect pest, disease and 
invasive plant infestations that, if left unchecked, can have severe 
local and regional economic impacts. Restoration of bark beetle 
infested landscapes across rural western communities is one of the 
priorities of the Forest Service Western Bark Beetle Strategy. FHP also 
produces the National Insect & Disease Risk Map, which provides vital 
information on future risk to forests across all lands. In addition, 
on-going Aerial Detection Surveys are conducted to assess general and 
annual forest health conditions. Both of these information sources are 
essential to help Federal, state, and local land managers make better 
management decisions in the face of landscape change, potentially 
resulting in significant rural forest industry and related economic 
benefits.
Forest Research and Development
    Forest Research and Development (R&D) serves the nation and 
communities with a variety of research efforts to better understand 
forests and their economic impacts. Forest Service R&D continues to 
adapt and reposition its programs as needed to address the needs of a 
rapidly changing society. The social, economic, and environmental 
forces driving the change have the potential to fundamentally change 
existing relationships among people, cultures, communities, political 
institutions, and the natural environment. Forest Service R&D is 
responding to these issues through six priority research Areas: (1) 
Forest Disturbance, (2) Biomass and Bioenergy, (3) Urban and Natural 
Resources Stewardship, (4) Nanotechnology, (5) Water Management and 
Restoration, and (6) Localized Needs Research. These priority research 
areas demonstrate Forest Service R&D's commitment to remaining an 
interactive, vibrant, and visionary partner in addressing today's 
critical natural resources problems with science and technology. This 
science and leadership service is a highly important investment for a 
world struggling with environmental change.
    Forest Inventory and Analysis (FIA) information provides the forest 
resource information needed to assess current and future opportunities 
and risks to maintaining healthy forests and vibrant rural communities. 
FIA data and information are updated annually for all 50 states. The 
information is used by states, forest landowners, forest planners and 
forest investment firms to plan silvicultural treatments. Investment 
decisions for development and location of wood based manufacturing 
facilities also access FIA information. We have also learned from 
assessments based on FIA information that urbanization is resulting in 
forest losses and that reduced demand for domestic forest products is 
impacting rural communities.
    Additionally, we continue to set priorities for fuels treatments 
around communities linked to restoration goals resulting in avoided 
costs to water, decreased insurance costs to owners, and decreased loss 
of infrastructure. Forest Service fire scientists, analysts, and 
technology transfer specialists put science in the hands of managers, 
decision makers, policy makers, homeowners and communities in the form 
of user-friendly software and data, real-time support of trained 
analysts on active wildfires, and educational material for 
schoolchildren. Smoke modeling tools have been developed to integrate 
meteorological data, cutting edge smoke science, and fire behavior 
predictions to help fire managers schedule essential prescribed burns 
to minimize these health impacts. The Wildland Fire Decision Support 
System assists fire managers and analysts in making strategic and 
tactical decisions for fire incidents by providing easier sharing of 
analyses.
    I-Tree, a peer-reviewed software suite, provides urban forestry 
analysis and benefits assessment tools to help communities strengthen 
their urban forest management and advocacy efforts by quantifying the 
structure of community trees and the environmental services that trees 
provide.
    The Forest Service is expanding the use of wood and a sustainable 
and environment friendly material by developing new materials and 
technologies at the Forest Products Laboratory. These new materials 
range from Nano sized particles that can be used in developing light 
weight and strong car bodies or a green substitute for petroleum based 
plastics and films to new construction materials and techniques for 
multiple story buildings. These new technologies use low value wood 
from restoration treatments to provide sustainable alternatives to non-
renewable materials and create jobs in rural area. Forest Service 
studies show that using wood products for building materials, instead 
of fossil-fuel intensive alternatives, results in a smaller carbon 
footprint.
    The Forest Service also provides science-based information for 
community planning in recreation planning, including the social and 
quality of life benefits of recreation on communities and society, and 
the impacts of economic cycles on tourism-dependent communities and the 
effects of changing land use and ownership patterns, amenity migration, 
and labor markets on recreation businesses and management.
    In summary, the Forest Service continues to work toward 
accomplishing restoration objectives, providing information, research, 
and quality recreational experiences, all linked to healthy rural 
communities. I want to thank the Committee for its interest, 
leadership, and commitment to our National Forests and their 
surrounding communities. I would be pleased to answer any questions you 
may have.

    The Chairman. Thank you, Chief. Let me take the liberty of 
taking the first 5 minutes of questions.
    Chief, within your testimony, you noted, and specifically 
to wildfires, that climate change and vegetation were two 
issues, and I can see that it has been dryer, it has been 
hotter, and obviously if vegetation quite frankly is not 
managed, the undergrowth provides a tinderbox. Given the fact 
that we have known for some time we have had this trend of 
warmer summers, it seems to me the only real remediation to 
that is to be more aggressive with harvesting. Some of it is 
stewardship contracting, also green timber sales. I actually 
prefer that because that has to tie back into the local 
communities with dollars. So we need to use both tools. What 
have been the obstacles to using those tools to provide more 
wildfire prevention?
    Mr. Tidwell. Well, Mr. Chairman, you are correct. We 
recognize we need to be doing more, and one of the ways to 
reduce the threat, especially to our communities and to improve 
the effectiveness of our suppression activities is to get in 
there and reduce the amount of biomass, reduce the number of 
trees on these landscapes. That is one of the reasons why we 
have increased our rate of restoration, increased our rate of 
harvest, and especially with a focus on the areas around the 
communities and our wildland-urban interface. Each year over 
the last few years we have continued to increase the number of 
acres that were treated. There is strong evidence to show that 
when we do that, we definitely change the fire behavior and our 
firefighters are more successful. So we are moving forward with 
that.
    The challenge that we have is the amount of acres that need 
to be treated, and in the last few years, of the markets for a 
lot of the saw timber that needs to be removed and the smaller 
diameters, there is very little value in a lot of this timber 
that needs to be removed. And so that is one of the things that 
has slowed down the efforts, especially with stewardship 
contracting. There haven't been as many receipts available. I 
am pleased to know that the prices especially for saw timber 
have been improving over the last year, so that is going to 
help us.
    The other thing that is really making a difference is these 
collaborative efforts across the country where people have come 
together and recognized the type of work that needs to be done 
on these forests so that there is more and more support for us 
to be able to move forward and to treat the areas that we need 
to treat. The thing that we have really changed over the last 
couple of years is to recognize we need to treat larger areas. 
The 500 acres, the 1,000 acres, that is not enough, and that is 
why we put our efforts in the last couple years into doing 
analysis on tens of thousands to hundreds of thousands of acres 
at a time so that we can treat the amount of country we need 
to, to really make a difference.
    The Chairman. It seems like those collaborations are a way 
to leverage other monies obviously with different areas of 
government, so I congratulate you for including that as part of 
the strategy.
    You talked about the market, and the market is somewhat of 
an issue obviously, and I am a huge fan of our Forest Research 
Labs. These are scientists that are really doing tremendous 
work. I have had an opportunity to visit some of the 
laboratories and I know that the Forest Service is involved in 
looking at nanotechnology, and they are battling invasive 
species, they are looking at all different types of things. How 
well does the forest research look at developing other 
innovations? I have a bill that Mr. Schrader and I introduced 
last week, the Forest Products Fairness Act, and that is more 
of a marketing to make sure that our forest products are able 
to benefit from that BioPreferred label. That is about 
marketing and expanding, but obviously innovation, creating, 
looking for new markets for our forest products. How much is 
the Forest Service involved with that?
    Mr. Tidwell. Well, Mr. Chairman, first I want to thank you 
for your support for finding ways to use more forest products, 
and whether it is in the BioPreferred markets or whatever, and 
I know that we are moving forward with trying to provide some 
additional flexibility, so I appreciate your support around the 
BioPreferred market opportunity.
    Our Forest Products Labs, they spend a lot of their time 
really looking at how we can not only improve the marketability 
of wood but actually to create new markets. The first one is 
our Green Building Initiative where we are trying to find ways 
to be able to create more buildings out of wood. For instance, 
they developed a product called cross-laminated timber, which 
is able to take a combination of the high-quality wood plus the 
lower-quality wood and put it together in a way that passes all 
the tests so that it is stronger than just a timber cut from a 
tree. This will allow us to be able to pursue wood buildings 
that go beyond four stories so that commercial buildings will 
be able to go five to six stories, which is common in Europe 
and where they are moving to in Canada. So that is one of the 
things that we are moving forward with.
    We do a lot of research in bioenergy to be able to find 
ways to make it more economically viable for us to use the 
small-diameter residual material that has no market like it for 
saw timber but it too needs to be removed, and so if we can 
defray the costs by converting that into usable, renewable 
energy, it is another way that will make it more economically 
feasible for us to get this work done. It also makes it easier 
for the mills to be able to have a co-gen plant, that they can 
use the energy for their operations. USDA, with the Forest 
Service and Rural Development, have had a very successful 
program the last year to use a combination of loans and grants 
and expertise to be able to create more of a demand for 
bioenergy.
    The other thing we are working on is with biofuels, and we 
have a ways to go yet, but our scientists are now to the point 
that they can produce a gallon of fuel for about $6 to $7 a 
gallon. We know we need to get it down to about $4 a gallon 
before it will actually become economically viable, but it is 
one of the things that we are continuing to work on as just 
another way to help create more markets so that we can manage 
our National Forests.
    You mentioned nanotechnology, and of everything I have 
talked about, it probably has the highest potential, but we are 
still a ways away with that technology, but I wish I would have 
brought an example today. I could show you a sheet that looks 
like plastic to me that is made out of cellulose, made out of 
wood cellulose, and I will tell you, it is stronger and more 
durable than any piece of plastic that is sitting here on the 
desk right now. But that is the potential that we have in these 
other markets. That along with being able to maintain our wood 
products industry, to maintain the saw timber, the sawmills in 
this country, that is what it is going to take for us to be 
able to have the infrastructure to be able to do the work that 
needs to be done on our forests.
    The Chairman. Thank you, Chief.
    At this time I will yield to the Ranking Member.
    Mr. Walz. Thank you, Mr. Chairman. Thank you, Chief 
Tidwell.
    Again, I am really pleased to hear you talking about this 
commitment on moving towards biofuels. In southern Minnesota we 
have a pretty advanced biofuels industry and most of us who 
have watched this understand that this is an ongoing process. 
We are still in the infancy, but again, it is about providing a 
broader portfolio of energy uses, and there are folks that want 
to collaborate, and I am glad to see that that is moving 
forward.
    Just a couple of questions here. In a February letter to 
the appropriators, Secretary Vilsack anticipated the effects of 
sequestration to the Forest Service fire management to be $134 
million and the National Forest System to be $78 million. If 
you could verify those amounts and provide some details on how 
you are going to implement those cuts and what the impact will 
be on those programs?
    Mr. Tidwell. Well, those numbers are correct, and I will 
talk first about the five percent reduction to our fire 
funding. That is both in our preparedness funds and also in our 
suppression funds. So it will result in a few, we are 
estimating maybe up to 500 less firefighters, 50 to 70 less 
fire engines this year. To put that in perspective, just the 
Forest Service alone, we usually provide around 10,480 
firefighters, so that would drop the number to just a little 
bit to 10,000.
    So we will start the year with a few less resources. 
However, we have the ability to move our resources around the 
country to be able to preposition the crews and fire engines 
where they are needed, ideally right before that part of the 
country starts their fire season. So we will be able to 
mitigate some of the impacts by just moving more of the 
resources around.
    Mr. Walz. Do you save much money by moving firefighters 
that were there from another part to put them there?
    Mr. Tidwell. No, sir, it increases the cost so the 
suppression costs will go up because when we move prepositioned 
resources, they are then charged to a suppression code, fire 
code, and so the suppression codes will go up so that we can 
preposition these resources, but we will respond and we are 
going to do whatever we need to to be able to respond to 
wildfires without any question.
    Mr. Walz. Okay. I appreciate that. A question. We all talk 
about it is hotter, dryer, looking at some of these things. I 
am of the belief that that is probably the new normal. Should 
there be a new way of thinking about management based on that 
new normal, not based on historical past trends? Is that 
something that is being talked about and done?
    Mr. Tidwell. Well, sir, you are correct. It is the new 
normal, and I would like to talk about it. Our fire seasons, 
they are warmer, they are dryer and they are longer, in fact, 
often 60 to 70 days longer today than just what they were 10, 
15 years ago. And so that is what we are up against. That 
stresses the need for us to be able to do hazardous-fuels 
reduction so that when a fire does threaten a community, that 
the flames drop out of the trees, get on the ground so the 
firefighters can be successful. It also makes it safer for our 
firefighters because we will not put our firefighters at 
unnecessary risk. So it is essential that we move forward and 
not just on the public lands, but this is an issue for all 
lands and it needs to be done in conjunction with the work done 
on private lands.
    When I first started my career as a firefighter, it was 
seldom that we ever had to be worried about a fire threatening 
a building or a subdivision. Today it is seldom that we ever 
have a fire that we don't also have to factor in keeping that 
fire away from the community.
    Mr. Walz. And that is a combination of changes but also 
encroachment near these lands and buffers. Would you agree?
    Mr. Tidwell. Yes. People like to live next to these lands. 
I understand that, and we can do that in a way but they need to 
be able to treat the fuels on their private land in conjunction 
with us treating the fuels on the National Forests.
    Mr. Walz. My final point, and I guess this is more to think 
about. I would kind of like to hear what you think. You are 
going to hear testimony after you, Chief Tidwell, from folks 
who are seeing a way of life disappear, who are seeing it more 
difficult to continue, and we are looking for ways to make sure 
that people have the opportunities to live in these areas and 
to do that. What are the factors do you think in addition to 
what the Forest Service is doing that are leading to those 
changes, in your opinion?
    Mr. Tidwell. Well, it is probably a combination of things, 
but there is just no question that the economic benefits that 
come from the activities off the National Forests and 
Grasslands and how they can help sustain the local economies, 
and as you mentioned in your remarks, from recreation, it is 
across the board in this country. It is very important economic 
activity. And then the other part of it is to manage these 
lands. I mean, there are studies out there now that show for 
every million dollars that we invest in restoration activities, 
it creates another 12 to 20+ jobs. So we have those things 
going for us.
    The other thing that we have that has changed in just the 
last, I am going to say the last 5 years where I spent the 
majority of my career dealing with controversy and conflict 
about how the National Forests should be managed, and I can 
tell you today that is being replaced with just constructive 
dialogue about how and why, not should you or should you not. 
Because of that, I tell you, we are building support across 
this country where people are coming together. They want to 
work together. We are seeing it from communities that are 
willing to put their own money to help restore these lands 
because they recognize that if they can improve the conditions 
of that watershed, it is going to save the city more money, 
because when a flood occurs, there is going to be less impact. 
Folks are seeing that there is a connection to maintaining 
these lands with direct economic benefits. So those are the 
things that I think we can really start to turn this around. We 
just need to stay the course.
    Mr. Walz. Well, I am grateful for that, and our public land 
legacy is the envy of the world, so I appreciate the work you 
are doing, and I yield back.
    The Chairman. I thank the gentleman. I now recognize the 
gentleman from Alabama, Mr. Rogers, for 5 minutes.
    Mr. Rogers. Thank you, Mr. Chairman. I hate to waste time 
in this hearing on a parochial issue, but apparently I have to 
since your staff has not been able to handle this for me.
    I have a church in my district called the Union Baptist 
Church. It has had a permit for a cemetery since 1954. It is 
less than \1/2\ an acre of land. And as late as 2009, your 
Department confirmed their permit was still active. They have 
been mowing it, burying people there for years. They sold the 
plots. Not all of them have been filled yet, which is a good 
thing, but there are people that own them. They were recently 
notified in 2012 that their permit had been revoked. We 
contacted your office to try to clear this up, and we are not 
getting anywhere. My question to you is, are you going to be 
able to take care of the Union Baptist Church cemetery for 
them?
    Mr. Tidwell. Congressman, I will personally look into that. 
This is a common situation throughout this country where we 
have cemeteries that are on National Forest System lands and we 
do have several different authorities that sometimes will help 
resolve this, so I will personally look into this and see if we 
can't use one of our existing authorities to be able to address 
this, and I will get back to you.
    Mr. Rogers. Well, I appreciate it. I understand my staff 
has been in contact with your staff, and I understand that you 
may not be able to do a waiver but we could do a land swap. The 
aggravating part to me is, this is less than \1/2\ an acre of 
land they have had for 70 years almost, had a permit on, and it 
is costing your staff more time than the land is worth to fuss 
over this. Just handle it. Let them swap land or whatever. And 
it is also ridiculous to come up to these folks 70 years later 
after they have already sold the plots and say well, you can't 
bury anybody there when you have had permission to do it for 
all this time. So I would appreciate that and I look forward to 
hearing back from you.
    My second question is a little broader. It deals with 
sequestration. I have a huge National Forest in my district. I 
am very interested in what, if any, guidance you have been 
given by the Administration as to how you are supposed to 
handle the cuts in sequestration.
    Mr. Tidwell. Well, the five percent is across the board, 
each of our appropriations, and so within each appropriation, 
we are looking at how we can best minimize the impacts on 
operations. So I have asked each of my regional foresters and 
research station directors to provide me with their thoughts 
about how they are going to reduce their planned expenditures 
this year by five percent and then look at how we can work 
together to minimize those impacts. So we are in that process 
right now, but there will be impacts. The five percent for the 
National Forests that we look at with our trust funds, it is 
close to $300 million. And when I think about what I could do 
with an extra $300 million and if I take it right down to your 
forest what I could do if I could send an extra $3 or $4 
million to that forest and how much more work they could get 
done, it is significant. So we are going to do everything we 
can to minimize but there will be reductions.
    The thing I worry the most about is with our staffing, that 
over the last 15 years our fire staff has increased 
significantly because of the fire seasons we have. At the same 
time, the rest of the workforce has reduced significantly, 
almost 30 percent from where we were in the mid 1990s. That is 
our foresters, our biologists, our engineers. It is the people 
who do our business, financial work, and so there is less 
capacity there. And so that is the thing we are really focused 
on is trying not to lose any more of that expertise because as 
we are trying to move forward to look at new ways to do our 
work, to be more efficient, whether it is improving the 
efficiencies of how we do our NEPA or how we are just doing our 
sale preparation for timber sales, it is essential that we 
maintain that expertise. Those are the people that I need. I 
need their thinking, their knowledge, their expertise.
    Mr. Rogers. Well, I agree with that. My concern is, there 
has been some press reports that the Administration has given 
guidance to maximize the pain in the sequestration to 
demonstrate to the public these cuts are unreasonable. So I am 
glad to hear that you intend to minimize the effect of these 
cuts.
    Mr. Tidwell. Yes, Secretary Vilsack has been very clear 
that he wants these cuts of course to be fair across the board 
but he expects us to do everything we can to minimize the 
impacts.
    Mr. Rogers. That is all I have. Thank you, Mr. Chairman.
    The Chairman. Will the gentleman yield? Thank you for 
yielding.
    Is there any consideration--I mean, there are certainly 
areas that sequestration, with the rate flexibility, why would 
we make cuts in areas that are revenue generators? And I go 
right back to timber sales and all that is necessary to make 
those happen. Those are bringing revenue in to the Treasury. 
That is great for the Treasury. It puts on somewhat of a 
projection hopefully maybe some day balance this budget and pay 
down this debt, but it is also good for the local communities. 
And I guess this is more of a statement than a question. I 
would just hope that as you look within whatever latitude you 
have. I mean, I used to manage rural hospitals. I never had a 
year where I didn't have to cut maybe five percent. You know, 
it was just the way it was, given the economics of rural health 
care. But it just makes no sense in those areas that generate 
revenue to make significant cuts there.
    At this time we will recognize the gentlelady from New 
Hampshire, Ms. Kuster.
    Ms. Kuster. Thank you very much, Chairman Thompson and 
Ranking Member Walz for the hearing today. I am excited to join 
this Subcommittee and bring a New Hampshire perspective for the 
first time in 70 years, and I look forward to working with my 
colleagues on both sides of the aisle here to advance 
commonsense solutions to create economic opportunity and 
support our rural communities.
    I also want to thank you, Chief Tidwell, for joining us 
today to discuss the work that you are doing in the Forest 
Service. I am honored to represent a district that includes the 
majority of the White Mountain National Forest, which is truly 
a national treasure. Having grown up skiing and hiking in the 
White Mountains, I can attest to the recreational 
opportunities, and certainly for us, tourism is our number one 
industry and we appreciate the role that you play.
    There is also tremendous opportunity in terms of the timber 
industry, and I am very excited to have recently visited the 
biomass plant in Berlin, New Hampshire, which is bringing back 
the forest services, and Secretary Vilsack was scheduled for a 
visit to New Hampshire today. I have just learned that that 
might have been canceled. But it is an interesting company, 
Pleasant View, where they have installed a biomass wood-fired 
boiler system to heat commercial greenhouses. So I would love 
to hear more from you about this wood-to-energy program that 
you are spearheading and opportunities for economic development 
in rural areas.
    Mr. Tidwell. Well, Congresswoman, thank you. You just 
provided an excellent example of the potential to be able to 
help folks to be able to move forward, and sometimes it is to 
be able to get loan guarantees or a grant to help defray some 
of the initial costs. And then the other key part of it is to 
make sure that the wood is available so that if after they make 
the investment, we have to be--before we even work with anyone, 
we make sure that there is the wood available, whether it is 
the pellets or the chips, to be able to continue that. The more 
that we can do this in various places, especially in the rural 
parts of this country, it really will help offset the costs of 
doing the work on the National Forests because it creates an 
additional market, and often that is the difference to make a 
timber sale viable or not if they can also make use of some of 
this low-value material, plus the benefit of renewable energy.
    So with USDA, basically our Green Energy Initiative, that 
is what is bringing Rural Development, Rural Utilities along 
with the Forest Service, and the NRCS together where we are 
really making a difference, and I tell you, I am so excited 
about this because what we have been doing on our own in the 
past just wasn't getting much done. With the Secretary's 
direction on this, we are really changing the amount of 
investment, and the example that you are seeing now is that we 
are getting many of those in place. So thank you for your 
support and your recognition of the potential there.
    Ms. Kuster. Well, we look forward to many more of these 
programs in New Hampshire.
    I just had one other question, and this also relates to the 
sequester that has come up a couple of times and access to 
recreational activities. As you know, this is the time of year 
that families are planning their recreational activities over 
the summer, camping and hiking and using the new ATV trails 
that we have, and again, I share my colleague's concern about 
senseless across-the-board cuts. Could you comment on the 
impact to the public about the closure of recreational 
facilities this summer, and are any steps being taken to 
alleviate those closures?
    Mr. Tidwell. Well, we estimate that we may need to close 
around 670 recreation sites, and once again, we manage over 
19,000 across the country and so what we are looking at are the 
areas that are low-use areas and whether it is a trailhead or 
maybe it is a boat ramp or maybe it is a small campground, but 
once again to really minimize the impact. So around 670 is what 
we estimate, and once again, as we move forward with this, we 
are going to try to find opportunities with more volunteer 
efforts or maybe working with the local community, that they 
would then take on maybe the maintenance to keep the place 
cleaned up, that sort of thing. So those are the things that we 
will continue to go forward with. But once again, there is 
going to be some impact but we will do everything we can to 
minimize it.
    Ms. Kuster. Thank you very much.
    The Chairman. I thank the gentlelady and I now recognize 
the gentleman from Colorado, Mr. Tipton, for 5 minutes.
    Mr. Tipton. Thank you, Mr. Chairman, and I appreciate you 
holding this hearing, and Chief Tidwell, always a pleasure to 
be able to see you and I appreciate you taking the time to be 
able to come to our Subcommittee today.
    In your testimony, you noted that between 62 and 85 million 
acres of National Forest land are classified as high fire risk, 
and in Colorado, the Forest Service does partner with the state 
through the use of the Good Neighbor policy and authority to 
allow greater state input and discretion in hazardous-fuel 
treatment projects. Do you favor these types of frameworks that 
foster partnerships between the Forest Service and the state 
and local communities?
    Mr. Tidwell. Yes, I do. Colorado is a great example of 
where we have been able to use the Good Neighbor authority and 
for the state and the Forest Service to work together, and then 
you all have a long list of communities that have stepped up in 
your state that are also working with us in conjunction so that 
we can get more of this work done, create more jobs primarily 
to be able to improve these watersheds, so there is less of an 
impact from the next fire season.
    Mr. Tipton. You know, I noted during some of your comments 
to the Chairman's question in regards to be able to create some 
economic opportunity and concurrently to be able to increase 
the health of the forest that you had noted some of the carbon 
emissions that are offset by our National Forests. Has there 
ever been a study in terms of the carbon output when we do have 
a forest fire?
    Mr. Tidwell. Yes, there is. Our research scientists have 
done analysis on those events too. I mean, it is part of the 
cycle. But there is no question that if we can reduce the size 
of these catastrophic fires, we will in the short term reduce 
the amount of carbon emissions. It is one of the things, if we 
can change the fire behavior by thinning out these forests, we 
are still going to have fires but they are going to burn at a 
much lower intensity, thus release less carbon into the 
atmosphere.
    Mr. Tipton. I know in our areas, that is going to be 
critically important for the air quality issues in terms of 
some other industry as well, the impacts that we had from the 
fires in Colorado this past year. I think we are pretty 
dramatic when we are talking about being able to get in, create 
some of these treatments. Are you a little concerned in terms 
of some of the management programs with road closures going on 
that it is going to actually impact that opportunity to be able 
to get in and treat some of the forests?
    Mr. Tidwell. Well, before we make a decision on closing a 
road, it has to be a road that is not needed, so if there is a 
reason for us to be able to get in there to access, to be able 
to treat areas, especially around our communities, that is one 
of the factors that is factored into that decision. We do have 
more roads in the National Forests than we need or can afford 
to maintain, and they are impacting the water quality to the 
point where there are some places they restrict our ability to 
be able to manage some of the timber stands because of the 
amount of erosion that is coming from a road system that is no 
longer needed. So by making good decisions to close 
decommissioned roads that are no longer needed, it actually 
increases our ability to do more work but we need to factor 
that in. If we need access to be able to get that work done, we 
need to get in there and get that work done before we make a 
change in the access.
    Mr. Tipton. And hopefully to be able to build in some 
flexibility into those rules as well to be able to address 
that, and you did note a number of the methods that are in 
process now to be able to create some of the economic 
opportunity. Are there specific changes to current rules on 
stewardship contracting that you believe would be beneficial?
    Mr. Tidwell. Well, I will tell you, the first thing I 
believe is to get it reauthorized. I mean, it has been an 
important tool for us. We are doing about 25 percent of our 
work through stewardship contracts. We will always use our 
timber sale contracts but it is a tool where there is strong 
support across the board for that. It creates more jobs. So the 
first thing would be to get it reauthorized so that our folks 
know that we are going to be able to continue to have this 
authority.
    Mr. Tipton. In your testimony I think that you explained 
very clearly the degree to which active forest management is 
actually necessary to be able to create healthy forests. In our 
district where we have one program going on in Pagosa Springs, 
we saw that the groundwater actually went up 15 percent after 
the forests were treated. The health of the trees returned 
within 2 weeks to be able to get in. But, it is very important, 
Colorado, with the public forest lands where they are 
interspersed with the state and the private lands as well, to 
be able to bring together a comprehensive approach to be able 
to deal with this patchwork that we are dealing with. We have 
introduced, as I know that you are aware, the Healthy Forest 
Management and Wildfire Act, which is going to be very 
important as we approach this coming forest firefighting season 
to be able to address and to be able to empower those states, 
those local communities to be able to play an active role 
because it is not only the urban interface with wildlands but 
it is also when we start to get into those deeper areas of the 
forest, how that impacts our water quality and ability to be 
able to address it. I hope that we are going to be able to 
count on your support to be able to push that forward. Thank 
you for being here. I yield back, Mr. Chairman.
    The Chairman. I thank the gentleman for yielding back and 
now recognize the gentlelady from Washington State, Ms. 
DelBene.
    Ms. DelBene. Thank you, Mr. Chairman, and thank you, Chief, 
for being here today and for all the work that you are doing.
    I come from northwest Washington, and the Mt. Baker-
Snoqualmie National Forest is located in my district, and about 
five million people come annually to just that particular area, 
and it is comprised of about 2,500 miles of roads. In the 
prairie rural, there is no one stop, it is people driving all 
over. We talked a little bit about roads before but when you 
look at the impact of roads and recreation together and how you 
factor that in and what you think the impacts on recreation 
might be, even if things are open, just physical availability 
to drive and get there in regions such as ours.
    Mr. Tidwell. Well, Congresswoman, it is essential that we 
provide access to these lands so that we can all enjoy them, if 
you are just out for a hike or for hunting or just for driving. 
So when we go through the process with the public to determine 
the set of roads that we need to be able to manage the National 
Forests and the set of roads and trails that they want to see 
on the land. We work together with the public to make that 
determination. There is no question that we do have some roads 
that either need to have major work done on them or be 
decommissioned because of where they sit in the watershed that 
they are impacting our water quality, so we can do that. 
Sometimes that means we have to realign that road. But we do 
have more roads on the National Forests than are needed, 
without any question, and they are affecting the water quality 
and so over the years we continue to make decisions about which 
roads we need to keep open and which roads need to be 
decommissioned, and also the maintenance standard. We are 
finding in the past we used to maintain a lot of our roads to a 
much higher standard than really what the public needed. I 
mean, today most people have a vehicle that has a little higher 
clearance, so we are finding that they are okay driving on a 
rougher road, as long as it is left open. We just have to make 
sure that there is good drainage on that road so it is not 
impacting the streams, the fisheries that are in that country. 
So those are the things that we look at to be able to find this 
balance between having a road system that we can maintain, that 
we can minimize the impacts to water quality and at the same 
time provide the recreation access, the management access that 
we need on our National Forests.
    Ms. DelBene. So do you think that given the sequester and 
lack of funds that you will still be able to make the right 
tradeoff because you have more roads than you need to and not 
impact roads that you wish you were going to be able to keep 
open?
    Mr. Tidwell. And once again, the five percent cut across 
the board is also going to have an effect on the planning that 
we do, and addressing the road maintenance, there is definitely 
going to be less, and it is something that we are going to have 
to factor that in. So there will be less roads that will 
probably be closed this year because of that, and I am 
concerned about the water impacts that can occur, so we are 
going to have to do our best to make the decisions to 
prioritize this money where it really will buy us the biggest 
benefit, and I have a lot of confidence in our forest staffs, 
that they can do the very best to make the right decisions.
    Ms. DelBene. Thank you. A slightly different question. 
There have been multiple definitions of biomass and also 
multiple definitions of sustainable and what that means. How do 
you view those, and are you working to help us clarify and come 
up with a common definition for terms like sustainability?
    Mr. Tidwell. Well, there are several definitions out there 
for biomass, especially when it comes to renewable energy. The 
2008 Farm Bill had a good definition that will work. I think it 
is important as you go through your deliberations to think 
about the benefits of being able to use wood off our National 
Forests for renewable energy; it will never be the driving 
reason why we are ever doing anything on the landscape. It is 
not to produce energy. But being able to make use of that 
renewable material for energy, it makes more sense than to pay 
somebody to pile it up out there in woods and then burn it, 
because that is our option. So it one of the things I would 
encourage you to be careful in your deliberations about is that 
we need to think about what it takes to maintain healthy 
forests. The benefit: healthy forest equals clean water, 
healthy forest, equals clean air. Healthy forests provide the 
habitat for our species, provides for viability. So we need to 
be able to have the tools to be able to do that, and if we can 
offset the costs of managing these forests through renewable 
energy, it is a good thing to do. We need to do it the right 
way, but I can tell you from my view, that will never, ever be 
a driving purpose of why we are doing any activity on the 
National Forests is to produce energy from biomass, but it is a 
byproduct that can really help us to be able to do the 
management that these lands need.
    Ms. DelBene. Thank you, and thank you, Mr. Chairman.
    The Chairman. I thank the gentlelady and now would 
recognize the gentleman from Arkansas, Mr. Crawford, for 5 
minutes.
    Mr. Crawford. Thank you, Mr. Chairman.
    Chief Tidwell, I appreciate you being here today. I 
represent the 1st District of Arkansas, and the State of 
Arkansas has a strong forest product industry. I am sure you 
know that. But we are always looking for ways to strengthen the 
industry and create new market opportunities and job creation 
and so on, and I am equally concerned that we have well-managed 
and healthy forests, both national and private forests. Several 
of my constituents have expressed some concerns about LEED 
standard, the system that sets standards for building 
construction, and obviously one of the primarily wood markets. 
My question is, they believe that this disadvantages wood. Does 
the U.S. Forest Service use the LEED system for the buildings 
that they have?
    Mr. Tidwell. We use the LEED system and then a couple other 
systems to be able to measure the sustainability of our 
buildings, and I agree with you, the LEED standard does not 
fully factor in the benefits of wood and so it is one of the 
things we are also looking at other standards to be able to 
show that the buildings that we are building not only meet the 
LEED certification but other certifications where we can stress 
the benefits of wood. We think that is a better way to go 
forward. The challenge we have is, the LEED standard is by far 
the best known around the world, and it is valuable to have 
that certification on a building but it doesn't fully factor in 
the benefits of wood, and so that is why we try to use other 
certifications so that we capture that benefit, the lifecycle 
of having wood in our buildings.
    Mr. Crawford. Given the importance of wood in the 
marketplace for construction, do you think that there ought to 
be some revisiting of that standard to try and accommodate wood 
products in a more competitive way?
    Mr. Tidwell. We would like, yes, to have that certification 
revisit the use of wood and to fully factor in the lifecycle of 
wood products in buildings. For instance, the carbon that is 
sequestered in the lumber that is in a building should be part 
of what is considered to help promote the use of wood. I think 
that green building material is wood.
    Mr. Crawford. Thank you. I am going to switch gears on you 
a little bit. My district in Arkansas is home to Blanchard 
Springs Caverns, the St. Francis Unit of the Ozark-St. Francis 
National Forest. I am sure you are familiar with both of those. 
And they are huge tourist attractions. I know that St. Francis 
Unit is working with the Arkansas Parks and Tourism on the 
completion of a visitors center. Mississippi River State Park, 
I know that you have supported that and appreciate that. All 
that has a huge impact on our local economy, and that said, 
with the sequester possibly resulting in closure of 670 
recreational sites, can you elaborate on what your plan is or 
what the guidelines would be for determining whether a 
recreation site might be closed?
    Mr. Tidwell. The direction we will be giving is to once 
again minimize the impact to the public, so we will be looking 
at those lightly used recreation sites, whether it is a picnic 
site, whether it is a small campground or maybe a boat ramp 
that just doesn't have a lot of use, and there may be another 
facility a few miles down the road. Also, once again, we will 
work with our local communities to see if there may be an 
opportunity for a volunteer group or maybe for a county or the 
city that would want to take on managing and maintaining that 
facility so that it can stay open. So those are the things we 
are going to look at, but there is just no question that there 
is going to be some impact but we will do everything to 
minimize, and I want to keep that in perspective. We have over 
19,000 recreation sites on our National Forests and so we are 
talking around 670 spread across 42 different states.
    Mr. Crawford. Okay. And has there been any kind of analysis 
done to measure the potential impact on those communities? Do 
you have anything in writing that you might be able to provide 
the Committee?
    Mr. Tidwell. I can just share with you, we estimate that it 
will result in probably a loss of about 1.6 million visits. I 
mean, that is the capacity, the use that occurs on these lower-
developed sites. As we move forward with that, and before we 
actually make the decision to close a site, we are going to be 
working with our communities and we will keep Members of 
Congress informed so you are aware of that, but that is the 
only information I have at this time.
    Mr. Crawford. Thank you, Chief. I appreciate your being 
here. I am out of time, so I will yield back.
    The Chairman. I thank the gentleman for yielding back and 
now will recognize Mr. Nolan, from Minnesota. You are going to 
pass? Okay. We will recognize the gentlelady from South Dakota, 
Mrs. Noem.
    Mrs. Noem. Thank you, Mr. Chairman, and Chief Tidwell, it 
is good to see you today. Thank you for coming. I have a couple 
of questions I want to visit with you about, but one of them is 
regarding grazing permits.
    As you know, one of the responsibilities of the Forest 
Service is to maintain and manage our National Grasslands as 
well, and you do that in cooperation with many of our producers 
who are having trouble with grazing permits because they are 
trying to get out there and maintain existing structures. It 
may be to water their cattle, fences that currently exist, and 
apparently with this Administration there has been a change. If 
they are going to disturb any kind of soil, they are facing 
some challenges in actually doing that work to make sure that 
that maintenance can happen. I am wondering if you will help me 
with this. This is a situation that didn't exist previously. It 
is really challenging for them to go out and graze their 
cattle, get water to them when the Forest Service is blocking 
any kind of maintenance to those structures.
    Mr. Tidwell. Congresswoman, I will need to meet with you 
and to get a little more information on this. You know, grazing 
is part of multiple use and our record is very strong that we 
are doing everything we can to be able to maintain that, and we 
want the ranchers to maintain their improvements. I mean, the 
more water developments that we have, the more options we have, 
less impact, and so I will need to follow up with you and get a 
little more information so I can address that issue for you.
    Mrs. Noem. Yes, let us do that. I know specifically when it 
comes to disturbing the soil, so if it is putting a fence in, 
repairing a fence, fixing a water system where they may need to 
put a new pipe in the ground, that is where they running into 
the problem. So I appreciate your effort to help me on that.
    The second thing I wanted to talk about is the mountain 
pine beetle response project that we have in the Black Hills, 
which I feel is very needed and necessary, and I want to thank 
you for your support. Secretary Vilsack recently came out and 
said due to sequestration, there was going to be a reduction in 
board feet harvested, 420 million board-feet reduction in 
timber outputs, and I was wondering, were you consulted on that 
number when it was put forward on what the reduction would be?
    Mr. Tidwell. That number is produced with a five percent 
reduction and it costs us about $65 a thousand board feet to 
put up a sale, and so you just factor that across and it comes 
up to be that level of reduction.
    The other thing I need to stress is that 50 percent of our 
budget that we get each year is committed to dealing with 
ongoing timber sale contracts or with personal use for folks 
that want to be able to have access to firewood and some fixed 
costs. So you have 50 percent of the budget that is available 
for preparing the next year's work or getting the contracts out 
late this year. So five percent of that 50 is really a ten 
percent reduction, and so those are the things that are 
factored into that number.
    The other thing I want to stress is that our goal of 
getting to 3 billion board feet with a 20 percent increase by 
2014, that is a stretch goal. We are budgeted for 2.4 billion 
but we made the commitment through some of the efficiencies 
that you have been so supportive of; I believe we can get to 
that 3 billion.
    Mrs. Noem. Can you use carryover funds?
    Mr. Tidwell. I will tell you, I am going to use every 
flexibility I have to be able to continue to move forward, but 
it does result in five percent less funds, and I can use the 
Black Hills Forest as a good example. Five percent of our 
forest products is about $17 million. You know the difference 
if we can send an extra $2 million to the Black Hills what we 
can get done with that. So that is the challenge that we have 
is to be able to work with this, to minimize the impacts and 
still be able to go forward and get the work done. I just want 
to be on record to thank you for your support for the work that 
is going on in the Black Hills, and especially from the State 
of South Dakota. To me, that is a model of really what we want 
to get done.
    Ms. Noem. Is that something you think could go nationwide?
    Mr. Tidwell. That is what we are moving forward with, the 
idea that they can do it on the Black Hills, to have one EIS to 
cover 248,000 acres so that we can get in there and do the work 
we need to, to maintain the forest health, we ought to be able 
to do that everywhere. But, it takes somebody to lead out, it 
takes support from people like yourself to be able to encourage 
our folks to be able to take that risk, and we are really 
excited now to be able to move forward with that decision.
    Ms. Noem. Thank you. One more thing I want to touch on 
while I have 20 seconds left, I want to thank you for your 
investigation into the collapse of our sheep industry that we 
have seen in South Dakota and the prices, so I appreciate you 
pursuing that for us. I know in Idaho, a recent court decision 
maintained and ordered forest management decisions to protect 
some of the big horn sheep habitat, and that is impacting their 
domestic sheep industry as well. Now, is that something that is 
going to stay isolated to Idaho? We are not going to look at 
that kind of a decision being spread nationwide and impacting 
our sheep industries across the country, will we?
    Mr. Tidwell. Well, we look at every situation separately. 
We have also in the State of Wyoming had a different outcome, 
working with the State of Wyoming to address the same problem. 
I think there are different solutions to this problem of being 
able to find a way so that domestic sheep grazing can continue 
along with maintaining our big horn sheep. There are a lot of 
folks who like the big horn sheep, whether to hunt or just go 
out and look at them, but we have to find a way to be able to 
do both, and from what we have been able to work out in the 
State of Wyoming is maybe a better approach than where we ended 
up in Idaho, but we still want to move forward in Idaho to be 
able to do everything we can to maintain our sheep industry.
    Mrs. Noem. Thank you.
    The Chairman. I thank the gentlelady. Now it is my honor to 
recognize a gentleman who was a former Member of this 
Subcommittee, and my first 2 years in the chair, he had my back 
at my side. Now he has still got my back with his picture 
behind me. The gentleman from Virginia, Mr. Goodlatte is not 
currently a Member of the Subcommittee but has joined us today, 
and I have consulted with the Ranking Member and we are pleased 
to welcome him to join in the questioning of witnesses today. 
Mr. Goodlatte.
    Mr. Goodlatte. Well, thank you, Mr. Chairman, and it is an 
honor to be back on this Subcommittee. In fact, when I served 
as Chairman of the Subcommittee that then had jurisdiction over 
forestry, we did not have near as much interest and 
representation from people all over the country in forestry 
issues. In fact, the Chairman of the full Committee told me 
that he had a town in his district in west Texas that was 
called No Trees, Texas, and so he gave me a lot of latitude on 
forestry issues, so I really appreciate your extending that to 
me.
    And Chief, we are delighted to have you with us here today 
and we thank you for your efforts with our National Forests. I 
have a lot of forestland in my district. In fact, probably \2/
3\ of my district is covered in forests and about \1/2\ of that 
land or 1.3, 1.4 million acres of National Forest land is in 
the George Washington and Jefferson National Forests, so in 
some respects it is like lot a western district in southwest 
Virginia. The George Washington National Forest has been 
leading an effort to do an update of their plan, and this has 
already been a multi-year process. What can you tell us about 
the effects of sequestration on further delays in that plan?
    Mr. Tidwell. Well, Congressman, we are going to do what we 
can to minimize those impacts and especially with the forest 
plans that we have started to be able to complete those. I look 
at that five percent reduction. It will affect new starts. But 
I feel it is essential we move forward and finish these plans 
that we have started. The public has spent a lot of time 
working with us and it is essential we get those completed as 
quickly as we can. So it will probably reduce the start of some 
new plans on the forests but we will maintain our efforts that 
we have ongoing.
    Mr. Goodlatte. So we should expect a plan some time in the 
near future on the GW?
    Mr. Tidwell. Yes.
    Mr. Goodlatte. The last release of the draft George 
Washington National Forest Plan caused concern among many since 
the plan had a ban on horizontal drilling. I think that is 
questionable whether there are any recoverable resources in the 
George Washington National Forest but there is a lot of concern 
about the precedent that this would set for other forest plans 
in other parts of the country. There are lots of National 
Forests that have extraction of natural gas and oil as a part 
of multiple-use purpose of our forests, and I am very concerned 
about the precedent that might be set there. And horizontal 
drilling is actually a very environmentally sound way to 
extract resources because it involves drilling fewer wells and 
then using lateral drilling efforts to extract from a broad 
geographic area with minimal impact on the surface, and there 
are environmental issues with regard to that but they are 
addressed well in many places, and I just want to get some 
assurance from you that the Forest Service will look for other 
ways to ensure the environmental soundness of these efforts 
than simply a blanket ban on horizontal drilling in one of our 
forests.
    Mr. Tidwell. Now, what you see in the draft plan reflects 
what the forest has heard from the communities, and it is 
driven by a concern, sometimes of the unknown about horizontal 
drilling along with the fracking that is now becoming a--we are 
seeing more and more of that. But you are right, we have been 
doing this type of oil and gas operations in this country for 
decades, and we know the industry knows how to do it correctly.
    I think there is some opportunity to provide some 
reassurances to the public along the lines of the rule that the 
BLM is proposing that would require for the proponents or the 
oil and gas companies to disclose what chemicals they are using 
to ensure that flow-back off of these wells is contained either 
into a pond or some type of a container so it doesn't pollute 
surface waters, to ensure that the well casings are designed 
correctly and implemented correctly. I think some of those 
reassurances, those are the sort of things I think will help 
our communities understand that this type of operation can be 
done in a way that is environmentally sound. I think that is 
the thing that we want to continue to work on to really address 
what is the concern when we hear folks say, ``Well, we don't 
want you to allow any horizontal drilling.'' We need to really 
think about, ``Okay, what is the real concern and then is there 
a way that we can address that concern so that they feel 
better.''
    Mr. Goodlatte. Well, thank you. I am glad to hear that. I 
agree with that, that there are legitimate environmental 
concerns and you need to have a good regulatory process--
disclosure of the chemicals used in the process are certainly 
good--but a blanket ban on a technology that is good and 
actually used correctly is environmentally very sound is a 
mistake. I would hope that the future plans would reflect 
something that would be compatible with all the different 
forest plans and the need to have this multiple use in our 
forests where it is appropriate, and as I say, so far it hasn't 
been done in the George Washington National Forest. I don't 
think we should set a precedent here that would create a 
difficult situation across the country.
    Mr. Chairman, thank you very much for allowing me to 
participate today.
    The Chairman. My pleasure. Thank you.
    Chief, I just want to follow up on Mr. Goodlatte's line of 
questioning and then bridge that to one final question. 
Obviously we know what the sound science is in terms of oil and 
gas production, horizontal drilling, hydro fracking. Certainly, 
if you run into those folks who are just not confident because 
they don't know, this is new to them, invite them to the 
Allegheny National Forest. You know, it was an oil and gas--it 
was not just timber rich, and we have some of the best timber. 
We are real, real proud of the timber that is there. That is 
why we need good management. We don't want to lose that 
hardwood cherry to something else. It is one of the most, I 
understand--despite its size, it is one of the most profitable 
for us for the Forest Service and the country.
    Mr. Tidwell. Yes, it is.
    The Chairman. But it was an oil and gas field as well, 
those that exist concurrently as well as other multiple uses, 
and so I want to help make your job easier. So you get these 
doubters. If they want to come visit the Allegheny National 
Forest, I will be glad to join them in the forest. Any time I 
can get the time to spend in the ANF is a good day for me, so I 
just extend that as a resource for you, because it is not a 
matter of possibly can be done. Let us not talk about in terms 
of speculation because we have been doing for decades in the 
Allegheny National Forest, you can't find a more beautiful 
place to--I am a little biased obviously--to visit and to spend 
time.
    I know that one of the biggest problems we have, and this 
is my opinion, I am not expecting you to go on the record with 
this and weigh in on it. I do have a follow-up question I am 
looking for an answer from. You know, the biggest problems we 
have, the biggest threats that we have to healthy forests and 
therefore healthy rural economies, rural communities are the 
lawsuits by environmental groups. They have had--environmental 
groups unfortunately have had a completely contradictory 
outcome on our National Forests. With all the actions and the 
lawsuits that they file, they have actually created unhealthy 
forests, because I know that that has really stood in the way 
of a lot of the management practices the Forest Service knows 
that are based on sound science to keep our forests healthy and 
therefore our rural economies.
    As a part of that, the Federal Government in a broader 
sense has contributed to that. We have allowed the Equal Access 
to Justice Act to be abused. You know, that was originally 
designed to help those who have a stake in the game, those 
folks who are property owners where the Federal Government was 
impinging upon their rights, their property. You know, 
obviously the Federal Government has the resources of every 
pocket of every taxpayer in this country, rather a lot of 
pockets, maybe not so deep but a lot of them. And that is why 
the Equal Access to Justice Act was created. It has been 
hijacked, I believe, by groups who now use it to fund very 
specific purposes and missions, and they are not key 
stakeholders. They don't have direct interest in terms of 
ownership of property. Do we know how much the Forest Service 
has paid from agency budgets in attorney fees? And not just our 
agency, not just the Forest Service. I know the Justice 
Department gets involved with this. They have a lot of lawyers 
over there. But do we have any idea of how much has been paid 
in attorney's fees through the Equal Access to Justice Act in 
the last 5 years to environmental groups dealing with grazing 
decisions or, quite frankly, forest decisions? I know we were 
into a battle that there was--after three appeals by the Forest 
Service and others--I hope they finally given up on in terms of 
infringing on the subsurface property owners' rights up in the 
Allegheny National Forest.
    Mr. Tidwell. Mr. Chairman, I can tell you what the Forest 
Service has paid out in EAJA fees, and it averages about $1.2 
million a year. We can actually provide you the last 5 years. I 
don't have the information from the Department of Justice but 
we can provide that, but that is on average. It has been about 
$1.2 million.
    For me the solution is our collaborative efforts because I 
see time after time where people, because of their concerns, 
they would turn to litigation. Those same people today are 
sitting at the table working with industry, working with the 
county commissioners to find ways for us to be able to move 
forward. I will tell you, that is what we are going to continue 
to focus on, and the more that we can do that and reduce some 
of these conflicts, the better off all of us are.
    The Chairman. Well, I guess one of the indicators to 
monitor that is to see if that $1.2 million decreases at all. I 
hope it does.
    Chief, thank you so much for your testimony today and for 
being with us, and thanks for your leadership with the U.S. 
Forest Service. It is greatly appreciated.
    Mr. Tidwell. Thank you.
    The Chairman. And now I will ask that the four panelists on 
the second panel to please make your way up to the table, and 
we will prepare for our second panel.
    Just brief introductions. I want to welcome our second 
panel of witnesses to the table. We are going to be joined by 
Dr. Charles McKetta, Natural Resources Economist, Forest Econ 
Inc., out of Moscow, Idaho, on behalf of the Society of 
American Foresters; Dr. V. Alaric Sample, President, the 
Pinchot Institute for Conservation based here in Washington, 
D.C.; Mr. Kenneth Kane, a constituent of mine who is President 
of the Generation Forestry Incorporated of Kane, Pennsylvania, 
on behalf of the Association of Consulting Foresters of 
America; and Mr. Jim Schuessler, Executive Director for the 
Forest County Economic Development Partnership in Crandon, 
Wisconsin. It looks like we are all seated. Gentlemen, you had 
a chance to watch--there are the lights there, the green, the 
yellow, the red. So each of you will have 5 minutes for your 
testimony. All Members have a copy of your written testimony, 
just so that you are aware.
    Dr. McKetta, please begin when you are ready.

STATEMENT OF CHARLES W. McKETTA, Ph.D., C.F., NATURAL RESOURCES 
 ECONOMIST, FOREST ECON INC., MOSCOW, ID; ON BEHALF OF SOCIETY 
                     OF AMERICAN FORESTERS

    Dr. McKetta. Good morning, Mr. Chairman and Members of the 
Subcommittee. My name is Charlie McKetta. I am a Professor 
Emeritus from University of Idaho and a consulting Natural 
Resources Economist. Today I represent the Society of American 
Foresters with 1,200 forestry professionals who are members. 
They all believe in sound management and stewardship of the 
nation's public and private forests, and so we would all like 
to see the Federal forests restored to health and contributing 
efficiently to serve natural and local interests.
    Our question is, how can National Forests use known 
economic linkages between them and natural resource communities 
to mutual advantage? I am kind of a gearhead, so what I will do 
is, I will share some of my findings that will help identify 
complementary economic opportunities from forest restoration. I 
gave similar testimony last March to the United Nations because 
they are trying to use forestry for economic development as 
well.
    The first point is that the National Forests have some 
economic power, and the resolution of region and local, when 
the Forest Service acts, it changes the markets for resources 
and it changes the market for the labor and the community 
services, even though it does so unintentionally. The trade 
linkages in these societies means that these ripples get 
distributed across economies. We have the technology to be able 
to identify and predict where the ripples will lay.
    I have studied the market and community effects of forest 
policy changes since the early 1970s. We have specialized 
techniques that allow us to do this, and with few exceptions 
what we have found since the 1990s is forest policy changes 
from the National Forests generally have negative economic 
effects. However, four impact analyses that we have completed 
all set in Oregon most recently are starting to demonstrate 
positive opportunities. I looked at the Bureau of Land 
Management western Oregon plan, and we found that when they 
were going to increase timber supplies 200 million board feet a 
year that their 75 percent fund returns to the ONC trust 
counties would be significant. They would accrue in patterns 
that we could predict, and they could almost offset their 
expected sunset losses of the Secure Rural Schools Act funds 
but that varied a lot by county. The most interesting finding 
was in Portland, Oregon, which thought it was not a timber 
community until we showed that it was the trade center for 34 
timbered counties in four states. People don't know their 
linkages to forests.
    Our 2012 Oregon report, we found out why the timber 
industry had contracted and how much it had contracted. There 
is still a major sector, about $12.9 billion a year, and they 
are recovering. Some counties have as much as 30 percent of 
their economic base tied directly to timber. The National 
Forest is a big player acreage-wise, about 60 percent, but a 
small power production-wise, only about 12 percent of the 
harvests across Oregon. There are bottlenecks to recovery in 
mill capacity, labor and public timber supplies.
    The more interesting one is our analysis of forest 
restoration in northeast Oregon. We found that there is about 
1.4 percent of the eastern Oregon land being updated and 
restored, and the gains do go across in those regions but they 
vary a lot by region but they also by what is done. They ranged 
from 15 jobs for million dollars spent to 132 jobs per million 
dollars spent between a watershed project or a stewardship 
project, and we found that the National Forests are dependent 
on private labor machinery and markets to succeed. There are 
avoided costs of about $1.40 in fire losses for every $1 of 
recreation--excuse me--of restoration spent, and there is 
avoided costs in unemployment of about $16,000 per job 
formulated. But to scale up, you need expanded acceptability, 
expanded activity, more efficient National Forest projects and 
get rid of the bottlenecks in private infrastructure and the 
markets for biomass.
    I am available for questions or clarifications on these 
points, so on behalf of the Society of American Foresters, 
thank you for this opportunity.
    [The prepared statement of Dr. McKetta follows:]

    Prepared Statement of Charles W. McKetta, Ph.D., C.F., Natural 
Resources Economist, Forest Econ Inc., Moscow, ID; on Behalf of Society 
                                   of
                           American Foresters
    Good morning, Mr. Chairman and Members of the Subcommittee. My name 
is Charles W. McKetta. I am Professor Emeritus from the University of 
Idaho and a consulting Natural Resources Economist. I am here today to 
testify on behalf of the Society of American Foresters (SAF).
    The Society of American Foresters (SAF), with more than 12,000 
forestry professionals across the country in all segments of the 
profession, believes in sound management and stewardship of the 
nation's public and private forests. The Society of American Foresters 
(SAF) and the USDA Forest Service (USFS) share goals. We'd all like to 
see Federal forests restored to health and operating efficiently to 
serve national and local interests.

    I am here to address a narrow set of questions: 

    1. ``What are the economic linkages between natural resource-
        oriented communities and nearby National Forests?''

    2. ``How can National Forests recognize those linkages to the 
        mutual advantages of the agency and resource economies?''

    The first is a technical question that I answer for specific 
projects on a regular basis. The second is inferential. From the 
numerous analyses that we have done, I've generated a set of personal 
insights that might be helpful to your Committee.
    What do I bring to the discussion? The Society of American 
Foresters knows that I have worked on market and community effects of 
Federal forest policy changes since the 1970s. I did this while forest 
research station economist at University of Idaho and since 2002 as a 
natural resource economics consultant in cooperation with two regional 
economists, Dr. M. Henry Robison,\1\ and Dr. Daniel Green.\2\ They 
invented the spatially disaggregated input-output modeling process that 
we use to estimate policy effects at multiple economic resolutions. We 
have generally found, with few exceptions, that since the Endangered 
Species Act (ESA),\3\ National Forest policy change effects on western 
natural resource community economies have been negative. However, one 
project in 2007, and two of our 2012 impact analyses, all set in 
Oregon, demonstrate that future interactions could be more positive in 
three ways.
---------------------------------------------------------------------------
    \1\ Dr. M. Henry Robision is founder of Economic Modeling 
Specialists Inc. (EMSI). Moscow, Idaho.
    \2\ Dr. Daniel Green is principal of Economic Modeling Systems 
(EMS). Moscow, Idaho.
    \3\ Endangered Species Act of 1973 (7 U.S.C.  136, 16 U.S.C.  
1531).

    1. Unilateral resource supply augmentation: The Western Oregon 
        Bureau of Land Management (BLM) districts are charged with a 
        community economic development objective. Their W. Oregon plan 
        Draft Environmental Impact Statement (DEIS) \4\ would have 
        increased resource flows from BLM trust lands to improve 75% 
        fund returns to 18 O&C \5\ trust counties. Our work found that 
        the pre-NW Forest Plan \6\ forest industry had contracted 
        significantly, but that total job and income and county revenue 
        gains could still accrue in new patterns to many of the O&C 
        counties.
---------------------------------------------------------------------------
    \4\ Forest Econ Inc. 2007. Western Oregon Plan Revision (WOPR). 
Background analyses for Chapter 4: The affected environment. 
Subcontract to Mason, Bruce & Girard for Bureau of Land Management.
    \5\ O&C Lands Act of 1937 (P.L. 75-405) Oregon & California 
Railroad revested lands to be managed by BLM with returns to O&C 
counties.
    \6\ NWFP 1994 Northwest Forest Plan Overview. Regional Ecosystem 
Office. www.reo.gov. The NWFP reduced National Forest timber harvests 
90% and to a lesser extent reduced other public harvests.

    2. Integrated resource supply augmentation: We quantified Oregon's 
        forest sector economic linkages last year.\7\ We found that 
        national economic recovery is stimulating Oregon's forest-based 
        industries, fueling recovery of the state's economy. This 
        increases demands for Federal timber (and for other forest 
        ecosystem services). We were able to show where bottlenecks to 
        recovery exist (in existing mill capacities, lack of skilled 
        labor, and public timber supply) and how relaxing such 
        constraints could increase secondary economic benefits.
---------------------------------------------------------------------------
    \7\ Forest Econ Inc. June 2012. The 2012 Oregon Forest Report: An 
economic assessment of Oregon's forest and wood products sector. 
Subcontract to Mason, Bruce & Girard for Oregon Forest Resource 
Institute.

    3. Individual restoration project selection to enhance economic 
        development: Our analysis of E. Oregon National Forest 
        restoration projects for Oregon Department of Energy \8\ 
        quantified how three specific types of National Forest 
        restoration projects differentially stimulated local jobs, 
        incomes, and tax flows. We also showed differential gains per 
        unit of public expenditure and a lack of private manufacturing 
        capacity for using the increased availability of 
        undifferentiated Federal forest biomass.
---------------------------------------------------------------------------
    \8\ Forest Econ Inc. November 2012. National Forest Health 
Restoration: An economic assessment of forest restoration on Oregon's 
eastside National Forests. Subcontract to Mason, Bruce & Girard for 
Oregon Department of Energy.

    Start by replacing dated resource community constructs: Much as 
concepts of forest health and ecosystem management displaced commodity 
production in Federal forestry, rural community economic health has 
replaced the old concept of forest-dependent community stability. 
Almost by definition, rural resource communities are small, 
specialized, and resource dependent. The model is that a few service 
sectors import commodities to service one or two dominant export 
sectors. These are open economies so multiplier effects may occur 
elsewhere up regional trade hierarchies. Community specialization makes 
their economic vitality subject to any external economic pressures that 
affect their dominant sectors. This happens to agriculture, grazing, 
mining, timber, or recreation-specialized communities. They are also 
sensitive to local pressures that affect the resources that they need 
in production.
    There is a useful analytical corollary that is often ignored in 
forest policy formulation. It is popular to categorize rural resource 
communities as being dependent on National Forests for the resource 
base they utilize. Conversely, to make forest restoration work, 
National Forests are also dependent on the labor, services, capital and 
infrastructure that can be found in these communities. This is what 
ecologists call symbiosis. In an economic symbiosis, mutual well-being 
is equally important to both organisms. National Forest policies that 
ignore resource community economic health could be self-defeating. 
Policies focused on complementary moves are more likely to achieve 
mutual goals.
    Scale and resolution matter: As in ecology, economic effects vary 
by the resolution scale. An organization's share of an economy dictates 
the extent of its influence. In perfect competition any one actor is 
too small to affect outcomes. At a national economy scale, the National 
Forest System is small. Failures of intentional forest community 
stabilization efforts as far back as 1944 \9\ demonstrated that 
intentional National Forest actions are insufficient to buffer them 
from boom-bust national economic cycles.
---------------------------------------------------------------------------
    \9\ Sustained Yield Unit Act of March 29, 1944 (58 Stat. 132; 16 U. 
S. C. 583-5831).
---------------------------------------------------------------------------
    At higher geographic resolutions, e.g., multi-county regions, 
coordinated National Forests' economic powers become influential. When 
the USFS acts, it changes markets for resources, labor, and community 
services. By affecting related sectors such as recreation, timber or 
water, trade linkages to other regional sectors mean whole regional 
economies can be affected. Those economic ripples are predictable. 
Whether such influences would be positive or negative depends on the 
nature of the policy change. Regional economic responses to the NW 
Forest Plan demonstrated that single agency policy changes can 
radically change the vitality of linked sectors and undermine the 
economic health of the communities that house them. Negative effects 
have declined. Now we are finding that positive responses to changed 
forest policy are becoming plausible.
    National Forests as local monopolists: At the scale of individual 
community economies, a National Forest is usually economically dominant 
with many market powers. There is also a parallel social dominance 
caused by higher salaries, better education, and job security that is a 
peripheral complicating factor. We focus on just their exercise of 
economic power and typically find it to be both ``unintentional'' and 
``inept.'' As such, National Forests' economic influences on open rural 
economies can be erratic and counter-productive.
    I say ``unintentional'' because the power to reengineer nearby 
economies has rarely been a conscious objective of National Forest 
decision-makers. Impacts analyses are made as required for NEPA \10\ 
changes, but typically these have small influence on selections of 
preferred alternatives. The 1993 Interior Columbia Basin Ecosystem 
Management Project (ICBEMP) \11\ was a singular coordinated exception 
that affected 24% of the National Forest System land base. ICBEMP 
analysts rationalized that National Forest ecosystem management changes 
could replace lost private timber jobs and incomes with preferred 
amenity recreation and retirement-based equivalents. The Association of 
Oregon Counties asked us for more realistic estimates, alarmed because 
the Wallowa-Whitman N.F. was quickly reducing timber harvests. Our 
projections of NE Oregon mill closures \12\ accurately predicted the 
order and magnitude of job and income losses. We found few new non-
commodity opportunities. Two decades later, few replacement jobs 
materialized, the collateral damage to commodity economies was 
compensated only to the extent of previous 25% fund payments,\13\ while 
both local economic vitality and forest ecosystem health declined.
---------------------------------------------------------------------------
    \10\ National Environmental Policy Act of 1969 (Pub. L. 91-190, 42 
U.S.C. 4321-4347).
    \11\ USDA Forest Service. 1993. Interior Columbia Basin Ecosystem 
Management Project. www.icbemp.gov.
    \12\ McKetta and Associates. 1993. NE Oregon responses to Wallowa-
Whitman timber harvest reductions. Chapter 3: Distribution of economic 
effects. For county commissioners of NE Oregon.
    \13\ Secure Rural Schools and Community Self-Determination Act of 
2000 (16 U.S.C. 500, P.L. 106-393).
---------------------------------------------------------------------------
    I say ``inept'' for two other reasons:

    1. USFS non pecuniary decision criteria, such as achieving 
        ecosystem function, do not maximize its own profitability, but 
        redistribute potential gains (and losses) to others. Other 
        actors game against generally predictable USFS market 
        distortions. I used my own 1994 predictions of tripled timber 
        prices in NC Idaho \14\ to profit from buying my own private 
        forest. My neighbor paid for a new tracked excavator when a 
        widespread National Forest road removal project sucked up all 
        the private earth-moving equipment within a 300 mile radius. 
        For 2 years few private forest roads were built in the 
        vicinity.
---------------------------------------------------------------------------
    \14\ McKetta and Associates. 1996. Market effects of National 
Forest timber harvest reductions and projected NC Idaho mill closures 
and market effects. Report to the Idaho Governor's office.

    2. Often unintended (and potentially self-defeating) feedback loops 
        with nearby private labor and capital resources can impede the 
        agency's own internal objectives. Our two studies for the SW 
        Idaho Forest Ecosystem Management DEIS \15\ showed how three 
        coordinated National Forest \16\ timber program changes would 
        close seven of eight mills without creating compensating non-
        timber jobs. Six years later, when the same National Forests 
        wanted to increase ecosystem restoration harvests, private wood 
        collection and processing infrastructure had disappeared. We 
        calculated the present value of risky, dispersed, and low-
        quality Federal raw material flows and predicted little new 
        private investment in wood processing capacity. The one attempt 
        to build a new mill with Federal stimulus funds failed.\17\ The 
        point is that, at local scales, National Forest decisions could 
        have incorporated the predictable reaction patterns of 
        associated private decisions. Such a process might have 
        stabilized the balance of public projects and supporting 
        private infrastructure to mutually improve long-run outcomes.
---------------------------------------------------------------------------
    \15\  Forest Econ Inc. August 2000. Predicted wood products 
responses to Forest Service planning alternatives in SW and west-
central Idaho. Subcontract to Economic Modeling Specialists Inc. for 
the SW Idaho Forest Ecosystem DEIS.
    \16\ Boise, Payette, and Sawtooth National Forests.
    \17\ Emerald Forest Products sawmill, Emmett, Idaho.

    Private monopolies are illegal\18\ because of their power to extort 
wealth and erode economic efficiency. Government monopolies are used in 
special cases, but are regulated to harness and direct that power to 
achieve social objectives. In the unusual case of the National Forests, 
that economic power is generally overlooked. The Forest Service used to 
characterize its monopoly power as of the ``benevolent type,'' \19\ but 
have since avoided the terminology. However, ``With great power comes 
great responsibility.'' \20\ Forest restoration projects could be 
designed to complement local economic development, but the process 
would require explicitly integrating social preference and value 
criteria into National Forest planning decisions. As analysts, we have 
to measure the extent that National Forest actions affect economic 
linkages to make accurate policy response estimates. We try to avoid 
the moralities of how that power is ultimately exercised.
---------------------------------------------------------------------------
    \18\ Sherman Anti-trust Act (July 2, 1890, ch. 647, 26 Stat. 209, 
15 U.S.C. Sec. Sec. 1-7).
    \19\ Lyle Watts, 1947. Statement of the U.S. Forest Service Chief 
on the 1944 Sustained Yield Unit Act of 1944.
    \20\ Voltaire, Jean, 1832. ``)vres de Voltaire, Volume 48''. 
Lefevre, (also Uncle Ben to Spiderman 2002).
---------------------------------------------------------------------------
    Focus on the economic linkages: Policy impact analyses are simpler 
for competitive functional economies. For National Forest-dominated 
open economies, we have to adapt our effects estimation process to 
reflect the dominance. We typically look at six factors that determine 
the potential influence of any particular economically dominant 
National Forest.

    1. The direction of the Federal policy shift and the signs of its 
        various linkages: This can be complicated and counterintuitive. 
        For example Federal log export 
        restrictions,\21\-\22\ had positive effects for 
        domestic log users, but negative effects of similar magnitudes 
        on shippers and private timber growers.
---------------------------------------------------------------------------
    \21\ January 1, 1969 amendment to the Foreign Assistance Act of 
1968 (82 Stat. 966).
    \22\ Dr. Charles McKetta. 1996. Economics of log export 
restrictions. U of Idaho white paper for the Idaho Governor's Office. 
Forest Econ Inc. Subcontractor to Economic Modeling Specialists Inc.

    2. The economic dominance of the agency and the size of its 
        changes: This varies by the type of change and the public 
        market share. We've found small Federal harvest changes that 
        caused a large price and local job effects, and large 
        recreation changes that dispersed small job effects over a 
---------------------------------------------------------------------------
        large spatial matrix of access routes.

    3. The availability of local private infrastructure, its technical 
        flexibility, and its financial resilience: Local private 
        sectors have to accommodate Federal policy changes. The only 
        part of a typical random length sawmill that effectively uses 
        undifferentiated ecosystem management biomass is boiler. Woody 
        biomass hauling requires both transportation capital and a 
        viable end user. Even logging and restoration equipment may be 
        specialized. Large fire expenditures are good examples of 
        insufficient local services. Fire has become big business in 
        the West, but little of that spending is retained locally 
        either for control or rehabilitation spending. We examined one 
        fire salvage project\23\ where local contractors had long gone 
        bankrupt, so all the contractors and their equipment came from 
        300 miles away at higher cost. As transients they left an 
        extremely limited local economic footprint.
---------------------------------------------------------------------------
    \23\ Forest Econ Inc. 2006. School fire proposed salvage sales 
economic analysis. For USDA Forest Service Umatilla National Forest.

    4. The sensitivity of the community economic structure in four 
---------------------------------------------------------------------------
        dimensions:

      a. Dispersed rural communities are low on regional transactional 
            hierarchies, i.e., they are naturally specialized as 
            resource-linked sectors (e.g., resorts, mill towns, 
            transportation services). They have to react to changes in 
            both directions--national economic and local forest policy 
            changes. This pushes the limits of resilience.

      b. Decisions in nearby National Forests can dominate large 
            sectors of small undiversified adjacent economies. Actions 
            of the Forest Service can effectively control private 
            decisions that are forest linked.

      c. Local effects leakages can be high and distributed spatially 
            along trade hierarchies. By looking at linkages across the 
            functional regional economy of N. Idaho, we found one case 
            of direct job losses from a hinterland mill closure that 
            were smaller than secondary job losses in the regional 
            trade center 60 miles away. However, the smaller absolute 
            losses were a huge percentage of a small population, 
            compared to a larger absolute job loss in a more diverse 
            economy 15 times larger.

      d. Socioeconomic demographics are important. We often find 
            working middle class compression, while entitlements 
            households and retirees have expanded. Labor and equipment 
            trade linkages often jump adjacent communities.

    5. The nature of policy change: Rural subfunctional economies can 
        adapt, but success depends on predictability, being within the 
        limits of societal resilience, certainty of the response 
        environment, and sufficient time to mitigate adjustment costs. 
        Adjustment is a concern whether the effects are negative or 
        positive. A rule of thumb is that a standard deviation change 
        in a short period is likely to generate socioeconomic crisis. 
        Spreading even large certain changes over longer time spans 
        stimulates economic evolution within a set of survival 
        parameters.

    6. Linkages mutate: One of our toughest messages to local community 
        leaders is that National Forest policy reversals do not return 
        economies to historical patterns. The corollary is that 
        intentional social reengineering can cause new and sometimes 
        unexpected economic responses.

    Ecosystem management and resource community health are 
complementary: A prime purpose of ecosystem management is to improve 
forest health and ecosystem function. Why? Because healthy forests 
produce lots more human benefits such as carbon sequestration, water 
quality, wildlife habitat, wood products, reduced risks of fire and 
disease, recreation opportunities, and aesthetics. Notice that these 
objectives can be simultaneously produced. With the exception of 
wilderness and some ESA species habitat protection, there are very few 
mutually exclusive benefits. In private forests, such complementarity 
means increased profitability, although public forests have non 
pecuniary objectives, complementarity increases net social benefits.
    Economic linkages to surrounding communities are also typically 
complementary. Except for a few exclusive destination resorts, we have 
found that rural timber sectors and recreation sectors typically 
complement each other, enabling communities to have some diversity and 
larger service sectors. This construct recognizes a more complex 
potential for resource-based communities.
    National Forests are aware of these linkages: Both NEPA and NFMA 
\24\ require economic impact analyses. To that end, the Forest Service 
underwrote the IMPLAN \25\ model development, and their specialists use 
this well-regarded tool. Most forest plans have plausible economic 
effects estimates for every alternative. We have often been hired by 
affected parties and counties to check or augment these estimates. Up 
to now a crucial disclaimer to our clients has been that that job and 
income effects arguments rarely sway National Forest choices between 
alternatives. We are recently seeing a change in that relevance. Our 
privately funded N. Idaho caribou policy effects study \26\ was used by 
U.S. Fish and Wildlife Service to justify reducing designated habitat 
acreage on the Panhandle National Forest.
---------------------------------------------------------------------------
    \24\ National Forest Management Act of 1976 (P.L. 94-588).
    \25\ IMPLAN is a widely used economic impact estimation input-
output model currently marketed by Minnesota IMPLAN Group. http://
implan.com.
    \26\ Forest Econ Inc. June 2012. Economic effects of woodland 
caribou habitat designation in N. Idaho. Report to the Idaho State 
Snowmobile Assn.
---------------------------------------------------------------------------
    A take-away message: The National Forest System already has the 
technology and the professional capability to combine both forest 
restoration needs and surrounding economy improvements into project and 
forest planning decision processes. Decision criteria could include 
facets of economic development as complementary (or win-win) joint 
outcomes do exist. However, for this to succeed, and to expand the idea 
nationally, cooperative private activity and investment has to be made 
politically acceptable, profitable, and less risky. In the end, each 
National Forest would need the political will, authority, and budget to 
recognize local public expectations and allocate public resources as 
credible long-run product flow guarantees.
    National Forests need an effective public interface to integrate 
their operations with local communities: In our experience, National 
Forest public information offices and public meetings function more as 
barriers to access than providers of useful data and insight. Recent 
National Forest experiments with collaborative working groups may 
mitigate this problem. For example, the Four Forest Restoration 
Initiative (4FRI) \27\ organizes many stakeholders around an explicit 
goal of restoring forest ecosystems. Increased 4FRI wood supplies are 
also expected to attract private investment and 300 new processing 
jobs. In our Oregon studies, we had positive experiences with similar 
collaborative working groups. Their overhead costs appear high, but we 
have not yet explicitly studied their cost-effectiveness.
---------------------------------------------------------------------------
    \27\ Four Forest Restoration Initiative includes coordinated 
ecosystem restoration and industrial development efforts involving the 
Apache-Sitgreaves, Coconino, Kaibab, and Tonto National Forests. 
www.fs.usda.gov/4fri.
---------------------------------------------------------------------------
    I am available for questions or clarifications of these points. On 
behalf of the Society of American Foresters, I thank you for this 
opportunity.

    The Chairman. Dr. McKetta, thank you. I apologize for the 
pronunciation of your name. There is only one thing we come 
into this world with and leave with, and that is our name, and 
I hate screwing them up. Thank you for your testimony.
    Dr. Sample, go ahead and proceed whenever you are ready.

   STATEMENT OF V. ALARIC SAMPLE, Ph.D., PRESIDENT, PINCHOT 
          INSTITUTE FOR CONSERVATION, WASHINGTON, D.C.

    Dr. Sample. Thank you, Mr. Chairman. Most of my testimony 
will be submitted for the record so I just want to sort of cut 
to the chase here.
    We have talked a little bit about stewardship contracting 
this morning, and one of the things that I would suggest to you 
and the other Members of this Committee is, the enactment of 
permanent authority. Reauthorization of existing authority for 
stewardship contracting is probably the single-most effective 
thing that Congress can do to strengthen this relationship 
between National Forest management and the communities that 
depend on those forests and provide a lot of support for those 
forests.
    The relationship between communities and the National 
Forests is very much like the symbiotic relationship that we 
see in nature. We have two entities that depend on one another 
to the extent that if one fails, the other is not going to 
survive very long, and up until the early 1990s when the timber 
sale program was significantly reduced on the National Forests, 
there were a lot of activities--watershed protection 
activities, road maintenance, which goes along with that, 
wildlife habitat improvement. There was a large range of things 
including hazardous-fuel treatment, which we referred to a 
number of times here today, and all of these were accomplished 
through requirements that were in the government's contracts 
that they issued to the timber sale operators. With a decline 
in those timber sales, a lot of those things didn't get done, 
and the first thing that really sort of hit the wall was road 
maintenance, and what happened was, a lot of these roads began 
to erode and contribute sediment and debris into streams, in 
many cases the very streams where the Forest Service was under 
court order to protect habitat for endangered fish species.
    Stewardship contracting was something that was developed to 
really address that, and it began with a small number of pilot 
projects. Eventually Congress authorized 83 different pilot 
projects. All of those were monitored very closely with multi-
party monitoring teams at the community level. In 2003, based 
in part on the success of those early pilot projects and the 
reports that were developed and submitted annually to Congress 
on what was happening with those convinced Congress to go ahead 
and authorize that across the National Forest System and also 
extend that authority to the Bureau of Land Management. That 
was 2003, and that authority expires September 30 of this year.
    I won't repeat a lot of what the Chief covered in his 
testimony but this has been an extremely effective way for the 
Forest Service to work with the kind of small businesses that 
really characterize most of this capacity that we have for 
doing forest management that exists in rural communities. You 
know, the multiyear aspect of this gives them an opportunity, 
and frankly their bankers an opportunity to have the confidence 
to invest in equipment that tends to be very expensive, but 
also to invest in employment and in training of those employees 
and to develop and maintain the kind of capacity at the local 
level that the Forest Service itself needs in order to do these 
sustainable forest management activities.
    We have talked a lot about timber but there is a lot more 
that goes on in these stewardship contracts. In fact, timber 
is--actually merchantable timber is a very small part of that. 
We have had allusions here this morning to the effects of 
climate change, this warming and drying trend in the interior 
West but also actually even heavier precipitation, more of that 
coming in the form of severe storm events in the northeastern 
region of the United States, so it is not just about drought, 
it is about the role of these forests in flooding mitigation, 
stormwater management, protecting water quality and water 
supply.
    I will stop there and yield the rest of my time to my 
fellow witnesses.
    [The prepared statement of Dr. Sample follows:]

   Prepared Statement of V. Alaric Sample, Ph.D., President, Pinchot 
              Institute for Conservation, Washington, D.C.
    Good morning, Mr. Chairman, and Members of the Subcommittee. My 
name is Al Sample. I am a forester and President of the Pinchot 
Institute, a nonpartisan conservation think-tank based here in 
Washington. This year we celebrate the 50th anniversary of the Pinchot 
Institute's dedication by President John F. Kennedy at Grey Towers 
National Historic Site, the former home of Gifford Pinchot-first chief 
of the U.S. Forest Service and twice Governor of Pennsylvania. The 
Pinchot Institute is a non-lobbying scientific and educational 
organization, so my statement here today is on my own behalf as an 
expert witness, and is not intended to reflect any policies or 
positions of the Pinchot Institute.
    The relationship between communities and forests has parallels with 
the symbiotic relationships that we see in Nature--two entities that 
depend upon one another to the extent that when one fails the other 
cannot long survive. Sustainable forest management cannot take place 
where there is no local capacity, usually in the form of small 
businesses, to actually carry out the work of forest management--from 
reforestation, to ecosystem restoration, to maintenance of 
transportation systems for protection of water quality and aquatic 
habitat. Likewise, these community-based enterprises cannot survive for 
long when there is not a reasonably reliable stream of project work to 
sustain local capacity and expertise. When actions are needed to 
protect the ecological integrity and resilience of forests, resource 
managers have no one to whom they can turn to actually perform the 
work.
    Resource managers on National Forests all across the country faced 
this situation in the early 1990s, in connection with the reduction in 
timber sales to expand protection for endangered species habitat. 
Stewardship activities for watershed protection, wildlife habitat 
improvement, and hazardous fuels treatments that had once been 
accomplished by incorporating them into the government's requirements 
in timber sale contracts were no longer being accomplished. Resources 
and environmental quality began to degrade. One particular problem was 
that forest roads that no longer received regular attention began to 
deteriorate, allowing sediment and debris to get into streams, damaging 
aquatic resources including spawning habitat for a number of threatened 
or endangered fish species.
    Starting with a single pilot project on the Flathead National 
Forest in Montana, the Pinchot Institute worked with the U.S. Forest 
Service and local community groups to test the concept of a 
``stewardship end-results contract''--a multi-year contract that could 
encompass a wide variety of land management and stewardship activities. 
The long-term nature of the stewardship contract gave local 
businesses--and their bankers--the confidence to continue to invest in 
costly equipment, as well as in local employment and training. To the 
Forest Service it gave assurance that key resource management 
activities would be accomplished to high standards of performance, 
accountability, and efficiency, and within a specific agreed upon 
timeframe.
    Congress subsequently authorized the Forest Service to conduct 
additional stewardship contracting pilot projects, 83 in all, the 
results of which were watched closely by local, multi-stakeholder 
monitoring groups, in a process facilitated by the Pinchot Institute. 
Each year the monitoring results were compiled nationwide, and 
summarized in an evaluation report delivered to Congress, as required 
by the temporary legislative authority. Based in part on the successes 
described in these annual reports, Congress acted in 2003 to expand the 
legislative authorization for stewardship contracting to all National 
Forests across the country, and extend the authority to Interior's 
Bureau of Land Management as well.
    This legislative authority is set to expire this year, and I come 
before this Subcommittee to ask for your support and leadership in 
renewing this authorization. In a 2011 letter to Members of the Senate 
Interior Appropriations Subcommittee, six former chiefs of the U.S. 
Forest Service noted that ``stewardship contracting authority has 
provided public land managers with an important tool in achieving 
forest management objectives, and increasing and diversifying job 
opportunities in rural communities.'' They further stated that:

        ``Treatments authorized under these contracts promote healthy 
        forests, reduce wildfire hazards, increase watershed 
        resilience, and increase business and job opportunities. 
        Stewardship contracting encourages collaboration and long-term 
        commitments among agencies, contractors, local communities, and 
        other interested stakeholders. Organizations across the 
        `political spectrum' collectively agree that stewardship 
        contracting authority extension is needed at this time to 
        support public land management agency activities. Between the 
        FY 1999 and FY 2010 Fiscal Years, the Forest Service has 
        awarded approximately 854 contracts, resulting in thousands of 
        acres of better managed forests and the establishment of jobs, 
        expanded forest products markets, and improved watershed 
        resiliency. Successful collaborative efforts across the nation 
        have relied on this authority as a cornerstone of agreements 
        for future planned activities in major watersheds.''

    Mr. Chairman, and Members of this Subcommittee, these assertions 
are backed up by the detailed results from more than 10 years of multi-
party monitoring, evaluation, and reporting on stewardship contracts 
across the country. I would submit to you here today that the enactment 
of permanent legislative authority to extend the use of stewardship 
contracting on the National Forests and BLM lands is the single most 
important and effective step that Congress can take to support the 
positive, constructive, and mutually supportive long-term relationship 
that exists between these Federal public lands and the local 
communities that play a critical role in their sustainable management.
    Appended to my statement is additional statistical information 
pertaining to the accomplishments under stewardship contracts, and the 
positive effects on income and employment in rural communities. Also in 
the appendices is information based on the results from studies by the 
Pinchot Institute on biomass energy development as it relates to the 
sustainability of forests, including the National Forests.
    Mr. Chairman, I thank you for the opportunity to appear today 
before this Subcommittee. I would like to submit the balance of my 
statement for the record, and I would be pleased to address any 
questions you or the other Members may have.
                               Appendix 1
September 19, 2011




Hon. Jack Reed,                      Hon. Lisa Murkowski,
United States Senate,                United States Senate,
Washington, D.C.;                    Washington, D.C.



    Dear Chairman Reed and Ranking Member Murkowski,

    As the Appropriations Subcommittee on Interior, Environment, and 
Related Agencies considers the Fiscal Year (FY) 2012 budget for the 
United States Forest Service (USFS) and the Department of the Interior, 
we as retired USFS Chiefs request your support for extension of the 
Stewardship Contracting authority as part of FY 2012 appropriations 
process. First enacted as a pilot program in the FY 1999 Interior, 
Environment, and Related Agencies Appropriations Bill, and then 
reauthorized for another 10 years within the 2003 Omnibus Public Lands 
bill, Stewardship Contracting authority has provided public land 
managers with an important tool in achieving forest management 
objectives, and increasing and diversifying job opportunities in rural 
communities.
    Although initial use was limited, now more than a decade after this 
authority was provided, stewardship contracting is rapidly becoming the 
contracting ``tool of choice'' throughout the USFS. Treatments 
authorized under these contracts promote healthy forests, reduce 
wildfire hazards, increase watershed resilience, and increase business 
and job opportunities. Stewardship Contracting encourages collaboration 
and long-term commitments among agencies, contractors, local 
communities, and other interested stakeholders. Organizations across 
the ``political spectrum'' collectively agree that Stewardship 
Contracting authority extension is needed at this time to support 
public land management agency activities.
    Between the FY 1999 and FY 2010 Fiscal Years, the Forest Service 
has awarded approximately 854 contracts, resulting in thousands of 
acres of better managed forests and the establishment of jobs, expanded 
forest products markets, and improved watershed resiliency. Successful 
collaborative efforts across the nation have relied on this authority 
as a cornerstone of agreements for future planned activities in major 
watersheds.
    We urge the Subcommittee to extend Stewardship Contracting 
authority through inclusion in the FY 2012 appropriations process. It 
has provided many successes to Federal agencies and rural communities 
alike. Extending this authority will continue to build on successes 
already achieved while expanding positive impacts to our National 
Forests and other public lands.
    Thank you for consideration of this request.
            Sincerely,





R. Max Peterson          F. Dale Robertson        Jack Ward Thomas
Chief, Forest Service    Chief, Forest Service    Chief, Forest Service
1979-1987                1987-1993                1993-1996

Michael P. Dombeck       Dale N. Bosworth         Abigail R. Kimball
Chief, Forest Service    Chief, Forest Service    Chief, Forest Service
1997-2001                2001-2007                2007-2009


                               Appendix 2
Restoration Needs in the National Forest System
    According to data provided by the Forest Service, 43% of the 
National Forest System (82 million acres) is in need of restoration. 
Over the past 10 years, 18 million acres of National Forests have seen 
widespread tree mortality associated with bark beetle damage. Before 
the 2012 fire season began, the Forest Service cited 65 million acres 
of National Forests as being at very high risk of severe wildfire. In 
2012 alone, over 9.2 million acres of the country burned in wildfire 
according to the National Oceanic and Atmospheric Administration, 
mostly on Federal public lands.
The Role of Stewardship Contracting Authorities
    Stewardship End-Results Contracting concepts have been around in 
one form or another for approximately 20 years. In 1998, Congress 
authorized a pilot program for the Forest Service to develop a small 
number of Stewardship End-Result Contracts and Agreements to:

    1. More effectively involve communities in the stewardship of 
        nearby public lands, and

    2. Develop a tool in addition to the timber sale program that could 
        more effectively address the complexity of forest ecosystem 
        restoration.

    The pilot effort concluded early with Congress passing 
legislation\1\ in 2003 that removed the cap on the number of projects, 
extended Stewardship Contracting authorities to the Bureau of Land 
Management, and offered a 10 year authorization to the agencies to use 
stewardship authorities through September 30, 2013 to: ``perform 
services to achieve land management goals for the National Forests and 
the public lands that meet local and rural community needs.''
---------------------------------------------------------------------------
    \1\ Interior Appropriation Act of 2003 Sec. 323 of P.L. 108-7 (16 
U.S.C. 2104. Note, as revised February 28, 2003 to reflect Sec. 323 of 
H.J. Res. 2 as enrolled) the Consolidated Appropriations Resolution, 
2003, amended P.L. 105-277, Sec. 347.
---------------------------------------------------------------------------
Stewardship Contracting in the Context of National Forest Restoration
    The Pinchot Institute has annually monitored 25% of active 
Stewardship Contracting projects nationwide since 2005. Conclusions 
from this monitoring include:

   Ten of the 500 active Forest Service stewardship contracts 
        are 10 year landscape scale projects, including the Four Forest 
        Restoration Initiative, White Mountain Stewardship Contract, 
        and Front Range Stewardship Contract discussed below. 
        Landscape-level and multi-year contracts are realizing 
        efficiencies and have enabled some contractors to make 
        investments toward accomplishing ambitious programs of 
        restoration work.

   From 2010 to 2012, non-Federal partners provided funding in 
        40-48% of stewardship contracts or agreements.

   Significant multi-year investments of private funds are 
        being leveraged in Forest Service Collaborative Forest 
        Landscape Restoration Program (CFLRP) projects, and stewardship 
        contracts and agreements are critical to the success of these 
        landscape-scale restoration projects.

   Stewardship contracting and CFLRP is resulting in private 
        investments being made that are focused on processing the 
        byproducts of restoration treatments, benefiting rural 
        economies and reducing the cost of restoration work.

    Front Range Stewardship Contract. In Colorado, insect and disease 
        has devastated more than 1.7 million acres of forest on the 
        Front Range over the last 15 years, with some areas seeing tree 
        mortality as high as 80%. The Front Range Long-Term Stewardship 
        Contract covers a 1.5 million acre landscape reaching south of 
        Colorado Springs to the Wyoming border. The local business 
        holding the contract, West Range Reclamation, suggests that 
        they have ``built our business around stewardship 
        contracting.'' In doing so, West Range Reclamation has treated 
        approximately 5,000 acres in 2012, creating at least 52 jobs. 
        After receiving a USDA Forest Products Laboratory Grant they 
        also began manufacturing new value-added products, tapping into 
        19 markets including mulch, wood chips, post and poles, 
        shavings for animal bedding, kitty litter, and wood pellets, 
        adding significant value to the raw material removed and 
        reducing treatment costs below $300/acre in some places.

    White Mountain Stewardship Contract. According to contract holder 
        Future Forest LLC., the White Mountain Stewardship Contract has 
        reduced restoration costs by 36% and created 226 direct jobs 
        and 96 indirect jobs through a host of small scale businesses. 
        Economic reports for the project state $30 million in 
        government expenditures and $40 million in economic return. 
        Future Forest LLC. is a partnership between WB Contracting and 
        pellet manufacturer Forest Energy Corp, harnessing the 
        ingenuity of the private sector to link restoration work on the 
        public lands with new thermal energy markets, supporting 
        biomass utilization.
Need for Market Development for Expanded Biomass Utilization
    Public and private investments in local biomass utilization 
capacity are important to reducing the per-acre cost of restoration 
treatments. Federal investments through USDA and DOE loan guarantee 
programs, and grant programs like the Forest Biomass Utilization grants 
and Community Wood Energy Program authorized in the 2008 Farm Bill 
contribute to improved stability in rural economies.
    For example, the Medicine Bow-Routt National Forest recently 
entered into a 1,000 acre, 10 year stewardship contract with Confluence 
Energy, a pellet manufacturer in Kremmling, Colorado, which will supply 
a new 11.5 megawatt power plant backed with a USDA loan guarantee. In 
Arizona, the Four Forest Restoration Initiative is underway with the 
Forest Service entering into their largest 10 year stewardship contract 
to date designed to restore 300,000 acres. Pioneer Forest Products 
based in Montana received the award, with plans to create 900 jobs and 
build an advanced biofuels plant in Winslow, Arizona.
    Given long-term electricity market projections, due in large part 
to low natural gas futures, the prospects for biomass fueled electric 
power remains dim in most places. However, densified products 
(compressed wood logs, bricks, and pellets) and direct conversion of 
biomass to thermal energy for space heating and industrial process heat 
remain promising. Roughly \1/3\ of U.S. energy consumption is thermal 
energy for heating and cooling spaces and for industrial processes. 
Using biomass as a fuel source has tremendous potential to offset 
costly consumption of petroleum-based heating fuels in rural 
communities while supporting forest restoration objectives.
    For instance, in Oregon, the Oregon Department of Energy and USDA 
Forest Service have recently made investments to expand thermal energy 
markets in communities adjacent to National Forests in Eastern Oregon. 
Investing in these locations makes sense because these communities are 
adjacent to National Forests in need of restoration and are currently 
without access to natural gas, making woody biomass systems very 
competitive to fossil fuel alternatives, i.e., propane and heating oil. 
Since 2008, at least ten small-scale biomass thermal installations have 
been installed in Eastern Oregon, ranging from a hospital to a small 
industrial complex.
    On-farm uses of wood fuel are promising as well. Food production 
and packaging uses significant amounts of process heat, and in many 
places biomass is well suited to supply this energy. For example, 
consider that the average poultry house consumes about 6,000 gallons of 
propane per year at a cost of $2.04/gallon or $12,240 per year. If the 
poultry house is heated with wood chips costing $60/ton, the poultry 
house needs 40 tons of wood chips annually, costing $2,400, saving the 
poultry grower $9,840 annually per poultry house. The payback period 
for converting heating systems to biomass from heating oil and propane 
is usually short, as has been the case in Vermont where school projects 
predictably break even in 8-12 years. As an added benefit, the grower 
would see improved flock health and productivity due to reduced in-
house air moisture associated with propane heat.

    The Chairman. All right. Thank you, Dr. Sample.
    Now it is my pleasure to once again introduce a constituent 
of mine, a consulting forester and a friend from the 
Pennsylvania 5th District, from Kane, Pennsylvania, Kenneth 
Kane, who--I have always been an admirer of Ken's involvement 
in the community, not just knowing the forest industry but 30 
years as a school board member and involved in every good cause 
that there is in that part of our Pennsylvania. So Ken, I am 
pleased to recognize you for your testimony for 5 minutes, and 
welcome to Washington.

            STATEMENT OF KENNETH C. KANE, PRESIDENT,
 GENERATIONS FORESTRY INC., KANE, PA; ON BEHALF OF ASSOCIATION 
               OF CONSULTING FORESTERS OF AMERICA

    Mr. Kane. Thank you, Mr. Chairman. It is a pleasure to be 
here. Members of the Committee, I am here today on behalf of 
the Association of Consulting Foresters of America. Thank you 
for the opportunity to appear before you today to offer the 
consulting foresters' perspective on the National Forest 
management and its impact on rural economies and communities.
    The Association of Consulting Foresters offers services to 
private landowners, forest management consulting services. We 
manage in 45 states about 75 million acres. Essentially, the 
Association of Consulting Foresters are the boots-on-the-ground 
foresters for the private landowner. Our services are wide and 
varied. It is a pleasure to offer a national perspective from 
our association because we have members across the landscape.
    The primary issues that we would like to address is, there 
is pressure from local taxing entities on school districts, 
counties and townships that are adjacent to National Forests. 
There is a significant and growing problem caused by insects, 
disease and fire coming from delayed management on the National 
Forests, and response to salvage operations from natural 
disasters such as wildfires and storms is slow and the 
resulting change in forest composition reduces wildlife 
habitat.
    From a local perspective, I am going to share with you the 
problems faced by a small community such as Kane on the 
Allegheny Plateau. What the Allegheny Plateau is, is 16 million 
acres of timber primarily forest type that is a unique forest 
type, comprised mostly of cherry, ash, tulip poplar, 16 million 
acres on the entire globe. That is a pretty unique ecosystem. 
The small community of Kane was developed to develop those 
resources, and you can see when they were developed in the 
early part of the 20th century, the harvesting was quite 
intense, and it was harvested by local barons such as the 
Central Pennsylvania Lumber Company and Collins Pine, and they 
used railroads to access the timber, and the harvesting, as you 
can tell, was pretty intense. And those railroads today provide 
recreational access, hiking trails, off-road vehicle trails and 
different things, so there is quite an opportunity there.
    The Weeks Act provided the Allegheny National Forest to be 
established in 1923, and what you are seeing before you is what 
the condition of the National Forest was in the area called 
Little Arno in 1927. The next slide is 1928. That is the first 
harvest on the ANF. The next 70 years through the series of 
slides will show you the growth and development of that forest, 
how different silvicultural treatments and just by leaving the 
forest to grow over a period of years will create a very mature 
and healthy forest system.
    You will notice that in the slides from 1988 to 2008 the 
change in the forest hasn't been as significant as the previous 
60 years. That is because the forest is approaching maturity, 
and that maturity causes a risk for blow-down, and the 
productivity of the forest when it should be higher has 
dropped, and from 1985 to 1994 the forest produced about 60 
million feet of timber a year. We don't want to talk about 
extraction. We would like to talk about acres treated, but we 
have the volumes to talk about, so we have to stay with that 
subject.
    But since then it has tipped over, and when it should be 
developed and managed for local communities to support our 
schools and townships, it has tipped over, and the delayed 
response has reduced the amount of revenue from that forest to 
create a habitat, as you see in the next two slides, similar to 
what it looked like when it was established. So management on 
this forest and the value of this forest at one time provided 
essentially more money than the entire Region 9 needed to 
operate its entire budget came from the Allegheny.
    So we have an opportunity as I hear concerns of sequester, 
if we put the money to the Allegheny to truly do what could be 
done there, we could stimulate the Federal budget to help 
offset some of the Forest Service challenge to the future, 
because by supporting the forest and sound management, which is 
good science, it also supports the local communities. The one 
thing I would ask as we talk about stewardship is if we could 
consider putting some of that stewardship money back into those 
local communities, put it back into the 25 percent fund, 
because then we would stimulate local communities. I haven't 
even addressed the diverse resources of oil and gas in our 
region, which is also the bridge that we have to the future of 
America's energy independence.
    But I thank you for the privilege to be here, and on behalf 
of the Association of Consulting Foresters and my new company, 
it is a privilege. I welcome any questions.
    [The prepared statement of Mr. Kane follows:]

Prepared Statement of Kenneth C. Kane, President, Generations Forestry, 
  Inc., Kane, PA; on Behalf of Association of Consulting Foresters of 
                                America
    Good morning, Mr. Chairman and Members of the Committee, on behalf 
of all members of the Association of Consulting Foresters (ACF), thank 
you for the opportunity to appear before you today and offer a 
consulting forester's perspective on National Forest management and its 
impacts on rural economies and communities.
    ACF is the national association for consulting foresters whose 
primary work is consulting to the public. Our members manage more than 
seventy-five million acres of private forestland in 45 states.
    I have been an Association of Consulting Foresters member in good 
standing since 1989, and have been a practicing forest resource manager 
since 1983. I am President of Generations Forestry, Inc., located in 
Kane, Pennsylvania.
    From a national perspective, many of our clients and other 
landowners have significant problems when they own forests adjacent to 
National Forests.

   There is pressure from local taxing entities, School 
        Districts and County Governments to make up for their lost 
        share from National Forest timber sale proceeds,

   There is a significant and growing problem caused by insects 
        and diseases coming from non-managed National Forests,

   The response to salvage operations from natural disasters 
        such as wildfire and storms is slow; and

   There are resulting changes in forest composition and 
        reduced wildlife habitat.

    From a local perspective, I am going to present to you the problems 
faced by my local community. Kane, Pennsylvania is a small, rural 
community located in Northwestern Pennsylvania, on the Allegheny 
Plateau, at the eastern edge of the Allegheny National Forest. The Town 
of Kane and surrounding area was settled to develop the diverse natural 
resources of the region. The vast timber resource was harvested 
utilizing the access provided by railroads in the early twentieth 
century.
    The abundant amount of timber harvesting on the Allegheny Plateau 
by the Central Pennsylvania Lumber Company, the Collins Pine Company 
and other timber barons of the era created an environment for the 
natural reproduction of a unique Allegheny hardwood forest. The 
Allegheny hardwood forest type consists of black cherry, white ash and 
tulip poplar, with sugar maple, red maple and some oak. This unique 
forest type only exists on 16 million acres in the world.
    During September 1923 the United States established the 500,000 
acre Allegheny National Forest under policies established by the Weeks 
Act of 1911. The Weeks Act authorized the Secretary of Agriculture to 
purchase ``forested, cut-over or denuded lands'' for the purposes of 
watershed protection and timber production.
    In the seventy years following the establishment of the Allegheny 
National Forest, many activities took place to promote the goals of the 
Weeks Act. The forestry activities were successful to the point that 
the Allegheny National Forest watershed supplies water to most of the 
communities downstream and consistently produced over 60 million board 
feet of timber from 1983-1995.
    Since 1995 the timber harvest on the Allegheny National Forest has 
declined to a low of less than 15 million board feet from 2000-2005. 
The harvest level over the past 2 years has increased to 30 million 
board feet.
    The Collins Pine Company retained their land on the Allegheny 
Plateau. Collins Pine obtained International Forest Stewardship Council 
(FSC) certification in 1995. The FSC third party certification assures 
sustainability of the resource environmentally, socially and 
economically through a series of international standards. Collins Pine 
currently owns 120,000 acres and sustainably harvests the same volume 
as the Allegheny National Forest on less than a quarter of the acreage.
    The long-term impact of the lower harvest on the Allegheny National 
Forest has created a significant biological and economic impact on the 
region. The biological impact is a conversion of the unique Allegheny 
hardwood forest type to a more common Northern hardwood timber type 
that consists of tree species such as American beech, hard maple and 
hemlocks, which contain less diversity of flora and fauna and are more 
susceptible to invasive insect and disease attack. This conversion 
typically occurs through major blowdown from wind events.
    The economic impact of the lower harvest has led to a decline in 
the local hardwood lumber industry. Since 1995 the hardwood industry in 
the Allegheny National Forest region has declined over fifty percent. 
In the Kane area alone nine sawmills have closed, costing over 100 
jobs.
    The reduced harvest has affected local townships and schools 
through the loss of revenue of the 25% Fund, under which 25% of the 
revenue from National Forest timber sales is returned to the state. The 
revenue to the local townships and school districts has declined 75%. 
This decline includes revenue provided through the Rural and Secure 
Schools Act. As a School Director of the Kane area school district for 
nearly thirty years, I have watched the Forest Service revenue decline 
from over 6% of our total budget to less than 1% this year. With 
increased mandates on public education, this impacts the quality of 
education for our children. The Kane area school district was forced to 
establish a National Forest allocation fund with money raised from 
increased taxes on an already stressed rural economy to mitigate the 
extreme impacts this has to our schools.
    The challenge for the future is to prevent the continued biological 
conversion and the economic decline in the Allegheny National Forest 
region.
    The wind event/blowdown experienced on the Allegheny National 
Forest is also experienced in National Forests throughout the South. In 
the West, the threat to under managed National Forests is catastrophic 
fire.
    In order to maintain a healthy relationship between rural 
communities and National Forests, the National Forests should be 
managed using sustainable methods. This will assure the long term 
health of the National Forest, rural communities, the forest products 
industry and the adjacent private lands.
    We appreciate the Subcommittee's attention to this important issue. 
This concludes my remarks and I would be happy to answer any questions 
you may have.
                               attachment

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


1927

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1928

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1938

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1948

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1958

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1968

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1978

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1988

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

1998

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

2008

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Mature Black Cherry Blowdown

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Typical Blowdown Event

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Forest Structure Change of Blowdown

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Susceptible Mature Northern Hardwood Forest

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Chairman. Thank you, Mr. Kane.
    Now I yield to the gentleman from Wisconsin for the purpose 
of an introduction.
    Mr. Ribble. Thank you, Mr. Chairman. It is a real privilege 
for me today to introduce a fellow Wisconsinite. Jim Schuessler 
serves as the Executive Director of the Forest County Economic 
Development Partnership, a public-private partnership in 
northern Wisconsin that works to improve the standard of living 
and quality of life for the citizens of Forest County. Jim 
holds a Bachelor of Science degree from the University of 
Wisconsin-Platteville. After receiving his degree, he spent 2 
decades in television and ultimately served as Executive Vice 
President of the Broadcast Group. After selling the group in 
2002, Jim purchased a tourism-based business in northern 
Wisconsin. He successfully operated that business until he 
joined his current organization in 2011 to give back to his 
community. With all due respect, Mr. Schuessler, you have been 
giving back to your community for much longer than that, and I 
appreciate that.
    Mr. Schuessler. Thank you.
    Mr. Ribble. Jim and his organization have done important 
work for the people of northeastern Wisconsin. I am looking 
forward to hearing his remarks and the perspective he will 
provide. Jim, thanks for being with us today.
    Mr. Schuessler. Thank you, Congressman Ribble.
    The Chairman. Mr. Schuessler, we look forward to your 
testimony here. Thank you.

   STATEMENT OF JAMES SCHUESSLER, EXECUTIVE DIRECTOR, FOREST 
      COUNTY ECONOMIC DEVELOPMENT PARTNERSHIP, CRANDON, WI

    Mr. Schuessler. Chairman Thompson, thank you. Distinguished 
Members of the Subcommittee, my name is Jim Schuessler and I 
serve as Executive Director for Forest County Economic 
Development Partnership. The stakeholders of FCEDP include the 
City of Crandon, the Forest County Board of Supervisors, the 
Forest County Potawatomi Community and Foundation, the Forest 
County Chamber of Commerce and Tourism Commission, the Sokaogon 
Chippewa Community, and the Wabeno Chamber of Commerce. Our 
mission is to foster an increased and diversified tax base and 
improve standard of living and quality of life for all the 
people of Forest County.
    I know I am not the first person to appear in this place 
and tell you all is not well in our National Forests. However, 
let me relate from an economic perspective 120 year view in 
about 5 minutes, the good, the bad and the opportunity.
    After the cutover and failure of forests, then farms, 
Forest County had a few choices. Number one, they could do 
nothing. Number two, they could work with the Wisconsin 
Conservation Commission reforester. Number three, Federal 
forest. In November of 1927, the board voted 17 to 2 against 
Federal forest. They received a lot of outside pressure, and 
the board relented and opened the matter to a countywide 
referendum. On March 14, 1928, Mr. L.A. Kneipp of the United 
States Forest Service appeared in Crandon for a presentation to 
the electorate. He promised a lot--jobs, low-cost material and 
revenue sharing, a lot of other things too. Just days later, 
the electorate voted by nearly a 3 to 1 margin and bet the farm 
on the United States of America.
    In the decades that followed, the United States Forest 
Service delivered on all their premises. These people are 
heroes. Citizens and industry thrived. Connors Leona Mill 
became the number one producer of hardwood in the world. In the 
1980s, the Chequamegon-Nicolet National Forest alone output 150 
million board feet per year.
    Then the bad: the lawsuits, the underfunding. Raw material 
production declined sharply. As a result, a once thriving 
economic cluster began to crumble. Tribal communities and towns 
are getting creamed. An economic disaster has occurred in the 
National Forest. Today, over 4,000 direct jobs in forest 
products have been lost in the Chequamegon region alone. 
Outmigration has cost the lost of future generations. All of 
this is outlined in my exhibits.
    The Leona School District located in a Norman Rockwell-type 
town is on the brink of collapse, which will fuel a domino 
effect over the entire region. Declining demand for forest 
products? Hardly. Local industries could add additional shifts 
if the raw material were available. As a matter of fact, 
American imports of Canadian wood pulp and pulpwood have 
increased 50 percent over the past 10 years. Exhibits H, I, and 
J display the significantly high unemployment rate in the 
counties of the Chequamegon vis-a-vis the rest of the state.
    Landscape-level sustainable forestry must be restored 
within the National Forest. In the Chequamegon alone, it is 
conceivable $100 million could be added to the United States 
Treasury over the next forest plan. In addition, another $30 
million to local governments. Imagine the impact to our 
economy.
    Movement toward the allowable sale quantity will result in 
over 4,000 jobs in the region of the Chequamegon. The harvest 
levels would still be well below those of the 1980s. Four 
thousand jobs is an auto plant, folks. I know Dr. Benishek is 
chairing another subcommittee this morning, but somebody please 
pass along to him that within the Ottawa, there is an 
environmentally friendly auto plant ready to be unveiled there 
as well.
    Some of our National Forests are disaster areas. This is 
not a slam to the current Chief. It is a crisis that has been 
decades in the making. However, the United States Forest 
Service desperately needs a crisis manager to support his 
efforts. This crisis has clobbered the local economy and will 
kill schools, and without a Hurricane Sandy type sense of 
urgency and focus, it is going to happen. And while Secure 
Rural Schools is appreciated as we emerge from this crisis, we 
don't need social welfare. The jobs are there, the demand is 
there. A hundred million to the Treasury. Somebody please 
tell--Congressman Ribble, when you get back to the Budget 
Committee, please let them know we have $100 million for them, 
another $30 million to local government, thousands of jobs.
    Remember the old question, if a tree falls in the woods, 
does anybody hear it. We can really update that today. If 
thousands of jobs are needlessly lost in the National Forest, 
is anybody willing to listen and do something about it?
    I look forward to your questions, and please know that 
FCEDP is ready to partner and assist in repairing the 
ecological and economic disaster by developing jobs and 
restoring a beautiful, well-managed National Forest. Thank you.
    [The prepared statement of Mr. Schuessler follows:]

  Prepared Statement of James Schuessler, Executive Director, Forest 
          County Economic Development Partnership, Crandon, WI
    Chairman Thompson and distinguished Members of the Subcommittee on 
Conservation, Energy, and Forestry, my name is James Schuessler. I 
serve as Executive Director for the Forest County Economic Development 
Partnership (FCEDP) in Forest County, Wisconsin. The stakeholders of 
FCECP include the City of Crandon, Forest County Government, Forest 
County Potawatomi Community and Foundation, The Forest County Chamber 
of Commerce, Tourism Commission, The Sokaogon-Chippewa Community, 
Wabeno Chamber of Commerce and four business sector representative 
including Laona Machine, Laona State Bank, Wolf River Valley Seeds and 
Northern Lakes Service, Inc., and Link CPA Service LLC. FCEDP is a 
public private partnership and also includes the invited resources of 
the Wabeno, Crandon and Laona School Districts, Forest County UW 
Extension and Land Conservation, the Laona District of USFS, USDA 
Blackwell Job Corp., the Town of Armstrong Creek, Nicolet Technical 
College and the Crandon Public Library.
    The mission of FCEDP is ``To foster an economic environment that 
promotes an increased and diversified tax base, an improved standard of 
living and quality of life for all the people of Forest County.'' As a 
native of Northern Wisconsin I certainly embrace the beauty of our 
land, cultural diversity, and traditions that have helped establish a 
thriving economic cluster built around masterfully managed timberlands.
    I know that I am not the first to appear in this place and let you 
know that all is not well in our National Forests. What I will do that 
is different from other testimony is share a story from a public, 
private partnership point of view about the economic impact of the 
Chequamegon-Nicolet National Forest on our local economy. And, I will 
offer what the immediate economic future portends, if unchecked, and 
finally suggest some solutions.
    Our local story begins after what is locally called the forest 
cutover at the turn of the 20th Century. The idea locally for economic 
prosperity was forests and then farms. This formula failed however due 
to poor soils and harsh climate for agriculture production and the 
farms failed leaving the land largely barren.
    By the mid-1920 the discussion turned to reforestation of the 
hundreds of thousands of acres in Forest County. The Wisconsin 
Conservation Commission offered to work with the counties on re-
establishing forests on the cutover lands. Private companies owned by 
the Connor and Goodman families acquired substantial tracts, in our 
area, beginning the development of sustainable forest practices and 
pioneering the practice of selective harvesting of northern hardwoods. 
I must note that these family driven forests remained intact and 
managed under selective harvesting, provided millions of board feet of 
timber to support our economy, up until the late 1990's, when they too 
began to be parceled and fragmented.
    Back in 1927, the United States Forest Service offered to take 
northern Wisconsin lands as part of a Federal Forest. After 
consideration, the Forest County Board voted on November 15, 1927, by a 
vote of 17-2, to keep the lands and work with the State Conservation 
Commission.\1\
---------------------------------------------------------------------------
    \1\ Forest County Board Minutes, November 15, 1927.
---------------------------------------------------------------------------
    Immediately, voices were raised outside the county criticizing the 
decision. An editorial in the Rhinelander Daily News condemned the 
Forest County Government and demanded that they immediately ``get the 
cutover lands back into their best use--forestry.'' \2\ Another from 
the Antigo Journal urged the Forest County Board to reverse their 
decision in part by saying ``Langlade County will join in when they are 
asked, but they have not been contacted by the Forest Service.'' \3\ By 
the way, Langlade County never was asked, and today their county owned 
lands provide nearly $2 million annually to their county budget.
---------------------------------------------------------------------------
    \2\ Rhinelander Daily News, Editorial, November 27, 1927.
    \3\ Antigo Journal, Editorial, November 24, 1927.
---------------------------------------------------------------------------
    Due to this outside pressure, the Forest County Board reviewed 
their previous decision and after debate voted to turn the matter to 
the electorate of the county in a referendum.
    On March 14, 1928, Mr. L A Kneipp, employee of the United States 
Forest Service, appeared in a packed Circuit Court Room in Crandon to 
present his case as to why the lands should be turned over for the 
Federal Forest Program. According to local printed news accounts, Mr. 
Kneipp outlined the case for why the voters should choose the Federal 
Forest. He stated that at present timber was being harvested four to 
six times faster than it could grow. He stated that the primary purpose 
of Federal Forests was to restore forests, put forestry on a business 
basis, to carry on research in timber production, and to produce 
timber. He went on to state that the United States promised the 
following: \4\
---------------------------------------------------------------------------
    \4\ Forest County Republican ``Federal Forest Hearing Held at 
Crandon Last Week,'' published Thursday, March 22, 1928. (Exhibit A)

---------------------------------------------------------------------------
    1. Restoration

    2. Plant trees where needed

    3. Prevent fires

    4. Practice selective cutting

    5. Cover every acre with forest

    6. Conserve and develop wildlife

    7. Get the forest on a sustained-yield basis

    8. Maintain stable wood-using industries

    9. A supply of good lumber at a cheap price

    10. 25 percent of the gross receipts to be used by the counties for 
        schools and roads

    Just days later the voters of Forest County voted, by nearly a 3 to 
1 margin, to turn the lands over to the United States for Federal 
Forest purposes. Within the next 10 years, 396,500 Forest County acres 
were turned over to the United States Government--54.3% of the county's 
total land base.
    To put it mildly, the citizens of Forest County ``bet the farm'' on 
the promises made by Mr. Kneipp, as well as a future tied to the forest 
product industry.
    For decades, the United States Forest Service set out and delivered 
upon every promise that they made back in March of 1928. The Civil 
Conservation Corps rolled through northern Wisconsin forests helping 
reforest and establish the infrastructure, some of which is still 
producing timber today. This program operated successfully for decades, 
developing tremendous resources, jobs, and valuable commodities for a 
growing nation. The research done on the Argonne Experimental Forest, 
located in Forest County, provided the basis for sustainable northern 
hardwoods forest management practices still in use today among 
industrial and other managed hardwood forests.
    It is no accident that, through the success of the National Forest 
program, a family owned sawmill, utilizing the forests of Forest County 
became the largest hardwood sawmill in the world by the 1940's.
    All told, a thriving economic cluster built around masterfully 
managed timberlands was developed in places in and around National 
Forests not limited to but including CNNF, Superior (MN) and Ottawa 
(MI). At its peak, the Chequamegon-Nicolet National Forest (CNNF) 
produced 159 million board feet of timber in a single year.
    The forest management practices in place within the CNNF from its 
formation until the 1980's followed sustainable forestry practices and 
mirrored forest policy as inspired by the March 1903 speech of Theodore 
Roosevelt. Prosperity began to decline in the 1980's due largely to the 
unintended consequences of uninformed groups that slowed down forest 
management with lawsuits, all of which they eventually lost but many of 
which have caused a dramatic devaluation of the standing timber. 
According to employees of the USFS, funding for the timber sale program 
began to decline, causing annual declines in the rate of forest 
treatments within the National Forest. (Exhibit B) These unintended 
consequences also caused a strain on industrial forest lands that have 
been overharvested to make up for the dramatic decline of National 
Forest timber stand management.
    Currently, USFS timber sales have gone ``no bid'' as a result of 
the declining quality of standing timber, sales that are too large for 
small businesses, improper estimates, and onerous rules.
    With the sharp decline in level of forest stand improvements in the 
CNNF, over 4,000 direct jobs have been lost in and around the eleven 
counties of the CNNF. (Exhibit C) Sawmills and processing plants have 
closed. Others operate sporadically and a tremendous outmigration of 
families has occurred in the past 20 years.
    The Laona School District, ground zero for this tragedy, is on the 
brink of collapse. (Exhibit D) Laona's soul was ``sold to the USFS'' in 
1928, and only 17% of its entire land mass is taxable. When the CNNF 
was operating at appropriate management levels, this mill town built 
around Nicolet Hardwoods, Inc. and WD Flooring, LLC was running 
multiple shifts and provided major employment to the region. Today, a 
140 year legacy, including four generations of selective harvesting 
with eight rotational selective harvests of family-owned company 
timberlands appears to be at an end due to lack of raw material. 
Monday, I drove through their lumber yard--which should at this point 
of the season have been completely inaccessible due to the 2.5 million 
board feet of raw material normally stockpiled by spring ``break-up''--
instead, there was only another 2 weeks of work. (Exhibit E) The plant 
will likely close due to lack of hardwood saw-log and it appears that 
employees will be laid off and out of work.
    Today, the Laona School district has the 5th highest mill rate in 
the state. Two years ago, the proud residents actually voted for a 3 
year funding referendum to keep the school operating for 3 more years. 
Taxes on a home in Laona is roughly double that of Wabeno, located 
about 10 miles south. Laona can be considered one of our nations Norman 
Rockwell towns, and because of its dependence on the National Forests 
it is at ground zero for economic impact due to the decline of forest 
stand improvements on National Forests.
    In 2014, if voters in Laona reject a new referendum, the school 
will likely close. That will trigger a ``domino effect.'' Wabeno will 
likely be on the hook for the debt of their neighbor's school as they 
will be asked to take on the students of the neighboring district and 
this will drive Wabeno's mill rate through the ceiling.
    Wabeno's low mill rate is largely fueled by waterfront homes in the 
southern part of the district, south of the Forest county line, in 
Oconto County. Oconto County voters will likely realign and move to a 
neighboring White Lake or Suring School District. Wabeno's financial 
structure will see the same issues faced by Laona and their financial 
structure implodes. And who suffers? In the end it is the children and 
families of the rural American Norman Rockwell Communities.
    As an economic development practitioner I can tell you that there 
is no recipe to solve this problem--lose your school, lose your town. 
The grocery store and other small family owned business close. Health 
care options diminish. Usually, the town is left with a c-store on the 
highway, and remaining residents have to travel 10 miles for a dozen 
fresh eggs, fresh fruits and vegetables, and, considering where people 
like me hail from--a hunk of great Wisconsin cheese.
    Shrinking demand for fiber? Hardly. All this is happening at a time 
when imports of Canadian wood pulp and pulp wood have increased 50% 
over the past 10 years. (Exhibit F)
    At the time Forest County accepted the offer of Federal Forests, 
other counties such as neighboring Marinette County declined their 
offer. As a result, in the northern half of Wisconsin we have many 
counties, void of National Forest, with very successful forest 
management programs.
    Like the USFS, these counties manage their lands for multiple uses 
and abide by all regulatory guidelines. All Wisconsin counties that 
manage their forests have fully-certified forests, standing up to very 
stringent standards and practices. As a result, their timber is 
generally more valuable.
    Attached, is a comparison of Wisconsin's top eleven forest-managed 
counties that do not have National Forest versus the performance of the 
eleven county CNNF managed by the USFS; in essence, Wisconsin's own 
National Forest versus the USFS' CNNF (Exhibit G)
    I am aware that the declining level of forest stand improvements on 
the National Forest are not limited to the Forest County or the CNNF, 
but the local story is where I concentrated my attention for this 
discussion. A similar impact has been felt across the eleven counties 
of the CNNF. From 1990, when management was much more prevalent, to 
2010, after the dramatic decline, unemployment grew disproportionately 
in the eleven CNNF counties (Exhibit H) versus the top eleven counties 
with managed forests that did not turn land over for Federal Forests. 
(Exhibit I) In 2010, Wisconsin's overall unemployment rate stood at 
8.5% quite close to the 8.8% of the eleven county managed-forest 
counties in the north. The eleven counties of the CNNF were 16% higher 
than the county managed-forest counties and 20% higher than the state 
as a whole. (Exhibit J)
    Even more startling is the loss of the future that the eleven 
counties of the CNNF face. A comparison of 1990 Census to 2010 reveals 
that these eleven counties have suffered double-digit declines with the 
demographics of children (0-17), and the people aged 18-44, largely the 
families who have children. (Exhibit K) Over this same period of time 
the other 61 counties in Wisconsin grew in these two key demographics. 
When the jobs decline, people tend to go elsewhere.
    So where is the opportunity? It is in our National Forests. An 
additional 60 million board feet in the CNNF alone would provide over 
3,000 direct jobs, and according to North Central Wisconsin Work Force 
Development, over 4,000 jobs total. This would still have the CNNF 
below the Allowable Sale Quantity (ASQ) outlined in the current Forest 
Plan, and 20 million board feet below the annual delivery achieved in 
the 1980's and early 1990's. Over 4,000 jobs--that is an 
environmentally friendly automobile plant, folks. Representative 
Benishek--I have good news for you. By my calculations, you have 
another auto plant within the Ottawa National Forest adjacent to the 
Chequamegon-Nicolet to our north waiting to be unveiled as well. 
(Exhibit L)
    But please remember, the value National Forest timber has already 
declined dramatically due to decline of forest stand improvements and 
regenerative treatments. Here is a photo, taken last Thursday, of what 
was thought to be saw-log in the Ottawa that is until it was harvested. 
(Exhibit M) The timber has over-matured, and is now worth about 90% 
less than had it been harvested when it should have been about 20 years 
ago, according to trained foresters. This contractor will lose money on 
this contract. He has stated that his firm will no longer bid on USFS 
projects.
    This is another reason why USFS sales go ``no bid'', when it 
rarely, if ever, occurs on county or private timber sales.
    The upside is tremendous. Setting aside the auto plant in the 
Ottawa for a moment, and just focusing on the one in the CNNF, the 
benefit is remarkable. (Exhibit N)
    In just one National Forest alone, the economic impact is 
startling. (Exhibit O) How do we get this done? For one thing, we are 
Americans, and armed with a, sort of Conservation Correction Corps of 
USFS foresters, tribal forest professionals, and state and county 
foresters we should quickly determine priorities, salvage, and begin 
producing forest treatments on projects that are ``on the shelf'' with 
completed National Environmental Protection Agency (NEPA) completed 
forest stands.
    Where will the product go? For one thing, processors (those not 
already gone) that have been choked by skyrocketing raw material costs 
will get some relief from reduced commodity prices. It is very likely 
that we can keep a few more domestic paper mills, for example, from 
closing if they know that the raw material prices they have been paying 
will likely ease.
    Just last month, Wausau Papers announced that they would be closing 
their mill in Bemidji, Minnesota. One of the chief reasons cited for 
the closure was increased production in Asia. Certainly manipulated 
foreign currency and questionable foreign labor practices cause 
problems for American industry. But considering the state of management 
within the National Forests here in America, should we not get our own 
house in order--for the sake of American jobs and American industry?
    A wonderfully executed government program that produced a 
tremendous economic cluster is being pulled under. The value of an 
asset owned by the taxpayer is losing value and the skilled personnel 
are available to fix this--now.
    While I'm certain that the current Chief's years as a forester 
serve him well in normal times, these are not normal times. Let me 
introduce you to a few retired USFS employees that would help correct 
the picture. The crisis created by lack of sustainable forest 
management is crippling rural communities that believed the promises of 
L.A. Kneipp and the United States Government he represented. Let us 
keep true to the ideals that inspired the development of our National 
Forests; people such as Gifford Pinchot and Theodore Roosevelt. 
Roosevelt's charge to the Society of American Foresters is included in 
this presentation. (Exhibit P)
    Although this disaster has been at least 2 decades in the making, 
it is in fact a Federal disaster. Call it Katrina or Sandy. At the 
local level we are told that Congress is to blame and there is need for 
more Federal money for timber sales. The most educated forester on 
Earth is not necessarily a gifted crisis manager. I suggest that we 
bring in a crisis manager that can get this fixed. As the successful 
manager Lee Iacocca said--lead, follow or get out of the way. This is 
not meant as political and is geared more toward personality, but I 
wonder what Governor Christie of New Jersey or Governor Nixon of 
Missouri would say to someone that said they needed more money when at 
the same time maintaining they are not in business to make money?
    ``Secure Rural Schools'' financial assistance is appreciated to 
keep our schools alive in the near term. But, we don't need social 
welfare. The real fix is to recreate the local jobs and a revived 
forest economy through effective forest management. Your action can 
return the rural forest economy to sustainable and successful levels, 
similar to the 1970's and 1980's.
    Once again, thank you for allowing me to provide testimony and 
comments as you consider National Forest Management and its Impacts on 
Rural Economies and Communities. Laona, Forest County, northern 
Wisconsin, and America can't wait.
    To summarize, from a local economic development perspective and 
from a national perspective, the formula for revitalizing the National 
Forest Economies are. (A.) Declare the National Forests a Disaster 
Area. (B.) Hire a crisis manager in each of the districts across the 
Forests in the United States. (C.) Inventory lost production over the 
past 20 years and salvage harvest and implement forest health 
treatments on the backlog of NEPA approved forest land. (D.) Demand 
USFS implementation of the current ASQ on all National Forests above 
and beyond the salvage harvests and forest health treatments.
    Ultimately this is no small matter at all. I am amazed and puzzled 
that such a meaningful, profound and simple solution has surpassed the 
great minds of the decision makers in the Department of the Interior 
and the Department of Agriculture and our great bureaucracy. And 
instead a small but dedicated group from an American apple pie and 
lemonade town stands before you to a call for action. The 
sustainability of tribal communities is on the line. With all due 
respect ladies and gentlemen, enough is enough. We are tired of the 
excuses. We are tired, angry, suffering and the regional economy has 
been needlessly fractured.
    So, simply put; implementation of this strategy across all National 
Forests will pull local, regional and the national economies out of the 
mire of the Wall Street and housing crush. And, the most amazing thing 
of all! Every dollar invested in this strategy will return $3 to the 
United States Treasury!
    I look forward to your questions and the Forest County Economic 
Development Partnership is ready to partner and assist you to make the 
National Forests a thriving and vital national economic resource engine 
once again. When you review my written testimony, consider that I am 
speaking on what I know about the impact of one United States Forest 
economy. And, on behalf of other forests, consider the impact of 
honoring the commitment to salvaging the backlog of timber, providing 
forest health treatments and fulfilling ASQ on all the National 
Forests. May God bless this great country.
                               Exhibit A

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit B
Chequamegon-Nicolet National Forest Sold Volume FY86-FY12, by Fiscal 
        Year
        
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit C
The decline of over 80,000,000 BF per year has resulted in significant 
        job loss in and around the eleven counties of the CNNF over the 
        past 2 decades

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit D
The decline in harvest, and fewer jobs is having an impact on local 
        school enrollment and funding

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit E

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit F
While timber harvesting declines on the National Forest, we send more 
        dollars to Canada . . .
  
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit G

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit H
While imports increase, unemployment levels have skyrocketed in the 11 
        CNNF counties

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit I
Unemployment remained much lower in the top 11 counties that manage 
        county timber without CNNF acreage

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit J
The unemployment rate within the 11 counties of CNNF exceeded that of 
        the state overall and the top 11 counties managing timberlands 
        without National Forest

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit K
Our future has been harmed by job loss and outmigration within CNNF 
        counties

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                               Exhibit L
Ottawa National Forest Harvest Volume FY87-FY11, by Fiscal Year

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit M

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit N
What is the annual opportunity in the CNNF?

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit O
What is the opportunity in the Northwoods?

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit P
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Chairman. Thank you, Mr. Schuessler. I am going to 
recognize the gentleman from Wisconsin, Mr. Ribble, for 5 
minutes of questioning.
    Mr. Ribble. Thank you, Mr. Chairman. I appreciate your 
flexibility this morning with what is turning out to be a very 
hectic day for this Budget Committee Member as well as a Member 
of the Agriculture Committee.
    Mr. Schuessler, thank you again for coming. I want to thank 
all the panel for spending some time. I do have a couple of 
questions for both you and Mr. Kane this morning. I just to 
want to read a quote from your written testimony: ``It is no 
accident that through the success of the National Forest 
program, a family-owned sawmill utilizing the forest of Forest 
County became the largest hardwood sawmill in the world by the 
1940s.''
    Mr. Schuessler. That is correct.
    Mr. Ribble. What has happened to that sawmill?
    Mr. Schuessler. Well, it is a travesty, and there are still 
people working there today, but if you take a look at Exhibit 
E, I took a couple shots on Monday morning, and I apologize for 
the darkness of it and the snow. We had snow Sunday night.
    Mr. Ribble. It is Wisconsin.
    Mr. Schuessler. And it is Wisconsin in March. We had snow, 
and then of course, the time change kind of hit me there, so it 
was a little bit early in the morning. But this is--the Connor 
Mill has a 400 acre lot in the Town of Leona, right in the 
center. You know, originally it was the company town. They 
should have, by the time of breakup, about 2.5 million board 
feet. Now, I am not a forester. Some of you guys that come from 
that area can probably tell me, but I am told that is about 2, 
maybe 3 weeks of work. Two and a half million board feet can't 
be found anywhere. The product just isn't there. People are 
going to be out of work. The layoffs have already started.
    Mr. Ribble. The trees are there, aren't they?
    Mr. Schuessler. Absolutely. They are tipping over.
    Mr. Ribble. In your testimony, you also noted that the 
decline in timber harvesting in Wisconsin has resulted in 
roughly 4,000 job losses in the 11 National Forest counties. I 
am interested in hearing about how you arrived at that figure. 
Additionally, you noted that at its peak, Wisconsin National 
Forests produced 159 million board feet of timber in a single 
year. Do you believe we can ever accomplish that again?
    Mr. Schuessler. I will take them in order. First of all, I 
am blessed by being surrounded by skilled foresters and 
silviculturists in my region. It is not my background. There 
are a few people, a couple people, Dick Crowsey, who is a very 
seasoned veteran and a retired United States Forest Service, 
and a second person who was a retired United States Forest 
Service person got together and really put together using 
today's technology how many board feet equals a job, and they 
came to the conclusion looking at the technology that exists 
today and the things that we use out in the woods that about 
20,000 board feet equals a job. So taking from that the fact 
that we are down over 80 million board feet in the Chequamegon-
Nicolet National Forest, we have lost over 4,000 direct jobs.
    Could you repeat the second question?
    Mr. Ribble. Yes. The second question was regarding the 159 
million board feet that was being harvested. I wanted to know 
if you think we can ever get back to that.
    Mr. Schuessler. I can't imagine, and I can tell you that 
Forest Service employees can't imagine it. I was up in the 
Washburn about a week ago meeting with the Regional Forester up 
there, a very dedicated employee who is doing some great things 
on stewardship that we would like to bring back to the east 
side of the Chequamegon. I related to her, and her experience, 
as I understand it, goes back to the 1980s, and when I related 
to her the kind of harvesting levels that existed back then, 
she couldn't even fathom it. So it has really become--it has 
really moved outside the DNA. Allowable Sale Quantity, ASQ, is 
something that is not looked at. It is just sort of this number 
that is out there, and so it is going to require a remarkable 
change in thinking to take folks back to those times.
    Mr. Ribble. Certainly the demand is there, though, and I 
can tell you, as someone who has spent my entire life in 
construction, it troubles me greatly that I see so much 
imported timber from Canada while we have foresters not working 
in Wisconsin.
    Mr. Schuessler. And skyrocketing prices.
    Mr. Ribble. This is a problem. And Mr. Kane, thank you for 
coming. I really enjoyed the photos of Pennsylvania. What a 
beautiful place that you live, almost as beautiful as northern 
Wisconsin. That is good to see.
    In your testimony, ``There is a significant and growing 
problems caused by insects and diseases coming from non-managed 
National Forests.'' I am curious about the words, non-managed 
National Forests: What do you mean by that?
    Mr. Kane. Part of the National Forest System is wild areas, 
scenic areas and natural areas. Just outside the community of 
Kane is the Tionesta Scenic Area. It is a 500 acre area of old 
growth consisting primarily of beech. The beech is decadent 
because of the beech scale nectria complex, which is a whole 
other story that I won't go into, but in 1991, it was 
identified that a native insect, the elm span worm, population 
was just growing out of proportion because of that beech 
ecosystem created the perfect habitat for elm span worm 
development. We pointed out to the Forest Service because it 
was a natural area, they couldn't do anything about it. In 
1992, it spread outside. It is kind of a ripple of a stone in a 
smooth pond. It went outside that area, and the Forest Service 
still was unable to do anything about it. In 1993, it was 
larger and encompassed essentially the entire Allegheny 
Plateau. We had to pull ten different organizations, consulting 
forests to compete with each other daily. Five sawmills to 
compete with each other daily formed a consortium. We sprayed 
over 100,000 acres in 1994 at a cost of over a million dollars 
for something that could have been stopped in 1992 for ten 
percent of that investment.
    Mr. Ribble. Mr. Chairman----
    Mr. Kane. That is the prime example.
    Mr. Ribble.--could you yield another 30 seconds?
    The Chairman. Without objection.
    Mr. Ribble. Thank you. I just want to follow up on that, 
because the American people, if they were listening to this, 
would be surprised by this. We have the Forest Service to 
manage them. Are there regulations that are preventing them 
from taking care of this or is it something outside stopping 
them? Because it defies belief that they wouldn't want to stop 
it.
    Mr. Kane. Ironically, there are regulations. They can't 
operate in the natural area. There are regulations that 
prevented them from getting the bulls eye, but when it had 
spread out, it was a natural insect with minimal experience 
because it always collapsed, but because we provided the right 
habitat at the right time, a natural insect became quite the 
crisis. The ironic part, in 1994 the Forest Service also had a 
spray program for the elm span.
    Mr. Ribble. Thank you very much for your testimony today. 
Thank you to the panel. With that, Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman, and I recognize Mr. 
Walz, the Ranking Member, for 5 minutes.
    Mr. Walz. Thank you, Mr. Chairman. Thank you all for your 
testimony. It is very insightful and very helpful.
    Dr. McKetta, I was especially interested in your work of 
this linkage issue to regional communities and trying to 
understand that, listening to what you say and what Mr. 
Schuessler says, you had a quote, Dr. McKetta, ``economic power 
of the national Forest Service is unintentional and inept in 
some of the ways, and it was a monolithic entity.'' My 
question, I guess, to the both of you is, Dr. McKetta, first, 
do you anticipate with changes to the Forest Service as you 
heard that we would return to the historical patterns and those 
economics? Because in many of these communities, they are very 
undiversified, if what I am hearing is correct, if the Forest 
Service policies have decimated communities based on that, how 
do we--is there a guarantee that if we change those rules that 
we will go back to historical patterns?
    Dr. McKetta. In fact, one of the hardest messages that I 
have to give my clients is that the historical pattern is 
something that we will never return to. Particularly if you 
look in the western states, we have seen concentrations of 
industry, a movement of labor away from the forests so that 
what happens when the forest does need labor, it often has to 
jump those communities. It has to jump for equipment and 
infrastructure as well. The Forest Service has always had a 
capability of measuring the impact of their actions. Although 
they do not recognize their monopoly powers in these small 
areas, they have modeling that does show the impacts. However, 
we very rarely see that as a primary criterion in the forest 
planning process. It is only recently that we have started to 
see in the forest restoration activity, and my experience is 
limited to the Northwest where we are starting to see 
intentional connections of stewardship projects to particular 
groups within the impact areas to mutually benefit from those 
kinds of investments. In order to expand that, the Forest 
Service could expand its activities a little bit but not to its 
historical levels because it is now constrained by things that 
didn't exist in 1980.
    Mr. Walz. That data would be valuable to someone like Mr. 
Schuessler, because I don't know if I am interpreting right. Is 
it your contention, Mr. Schuessler, that the policies that you 
described as a catastrophe that is happening with the Forest 
Service, if they were doing things differently in your mind, 
you would see a resurgence approaching historical economic 
growth?
    Mr. Schuessler. Absolutely. A great part of that economic 
cluster that feeds that industry still exists. It just 
deteriorates as years go by. So a lot of those people have gone 
to the city, they have gone elsewhere, but really, their home 
is back where they come from, and a lot of them would return if 
the jobs were there.
    Mr. Walz. Today if you had the magic wand, what three 
things would you do?
    Mr. Schuessler. I think the first thing I would do is hire 
a crisis manager to come in and do an assessment of the 
harvesting that could immediately take place. Remember, 
harvesting is ultimately a regenerative treatment. We can't get 
the undergrowth if we don't get that old stuff out of the way.
    Mr. Walz. And you don't believe they are doing that?
    Mr. Schuessler. It doesn't exist. I was in the Ottawa last 
Thursday, again, not a forester, not a silviculturist, but what 
I saw there, and I have it in one of my exhibits here, I took a 
shot of row of logs that had been cut out of there. It is 
supposed to be saw log. It is a junkyard. It is all overly 
mature. I am told 20 years ago this would have been wonderful 
saw log, and the problem is, some of these things, the pulping 
mills, they are over 30 inches. They should have been kept as a 
legacy tree because the pulping mills won't even take them. It 
is literally junk out there.
    Mr. Walz. What is your belief of why that doesn't happen? 
Why hasn't it happened?
    Mr. Schuessler. Well, for one thing, we are not sustainably 
managing those forests fast enough. I think Dr. Benishek would 
be livid if he saw what I saw last Thursday because it is in 
his own backyard.
    Mr. Walz. Do you think they are ignoring it or they don't 
have the right data or they are choosing to make a decision 
that is detrimental to the local community? What is your 
assessment of why, with their expert opinion, they are not 
doing that?
    Mr. Schuessler. The Forest Service tells us that they are 
under-funded for putting those regenerative treatments out 
there, and certainly the lawsuits had a lot to do with it. 
People had--these unintended consequences of these lawsuits 
ended up slowing down these timber sales and the treatments 
couldn't take place.
    Mr. Walz. My final question. Dr. McKetta, you talked about 
needing political will. What do you mean by that, the political 
will?
    Dr. McKetta. When I look at the potential versus the actual 
restoration job, right now the example we have is from eastern 
Oregon, about 1.4 percent of the forest is being treated. There 
is difficulty matching the output of the Forest Service to the 
people who would utilize it and finding the labor. If this was 
expanded and you had some kind of a contracting structure which 
would allow a simultaneous expansion of the private 
infrastructure because nobody is going to invest in something 
that is uncertain. You need a symbiotic relationship, as Dr. 
Sample pointed out, in the planning process to look at the 
Forest Service objectives and intents and the private sector 
reactions to that so that they can be coordinated to joint 
benefit.
    Mr. Walz. Mr. Schuessler, is this what your crisis manager 
would do? Is that what you envision them doing?
    Mr. Schuessler. Absolutely.
    Mr. Walz. Okay. Well, I thank you all for your testimony, 
and I am grateful for you bringing your expertise to us.
    Mr. Schuessler. Thank you.
    The Chairman. All right. I thank the Ranking Member, and I 
will proceed with my 5 minutes of questions.
    Mr. Kane, within your written testimony, one of the things 
that really jumped out at me is when you said Collins Pine, 
which owns 120,000 acres, in the same basic geographic area 
where the Allegheny National Forest is located, that Collins 
Pine sustainably harvests the same amount as the Allegheny 
National Forest on \1/4\ of the acreage, and I was wondering if 
you could explain that a little bit. How is that possible?
    Mr. Kane. It is really interesting. I was actually went to 
Collins Pine to get permission to use that testimony before 
using it, and a little background of Collins Pine. Teddy 
Collins was one of the original timber barons of the Allegheny 
region, and he didn't sell his land to the National Forest. It 
is a great story, but they called him Ten Percent Teddy, and 
when the National Forest bought that land, they were paying 50 
an acre, and Teddy Collins wanted 55, and he by God wasn't 
going to sell it. So his land, a lot of his land is contained 
within the boundaries of the Allegheny, and in 1995 Collins 
Pine Company obtained FSC certification. Those that aren't 
familiar with it, it is an international certification to 
assure that lands are managed sustainably both economically, 
socially and environmentally, and their allowable cut and they 
are currently harvesting on that land equal to what the 
Allegheny National Forest is producing with a forestry staff of 
nine people and it is because their forest--T.D. Collins didn't 
overharvest his forest and the family is really unique. It is 
interesting if you research them. They are great people, and 
they are very much committed to sustainability, and they are 
currently harvesting that because it is a mature resource, and 
they are trying to balance their age classes. If you look at 
the Allegheny National Forest in their 1985 plan, they had a 
desired future forest condition. The 2005 plan is further away 
from that desired future forest condition than what the 1985 
plan was, and with the reduced harvest, every year they fall 
farther and farther behind. That is why I use the slides, 
hopefully that the picture would speak 1,000 words showing that 
my last slide looked very similar to what the structure of the 
forest was in 1927 because it is in need of management.
    If we could fund the Allegheny adequately, use the 
stewardship program because it appears that the unfounded 
lawsuits against the Allegheny for their silvicultural 
activities, they are completely unfounded. They have not been 
significantly successful at all in their challenges to the 
Allegheny. In fact, the Allegheny has prevailed in essentially 
every lawsuit against the environmental challenge, and if they 
could just use the money that is available and reinvest that 
money into the Federal system, it could be extremely 
sustainable and support the local economies through the 25 
percent fund. It doesn't seem, from a boots-on-the-ground 
forester, that complicated because we have to do it on private 
ground every day, but that is the story of Collins Pine. Their 
forest is mature and they are capitalizing on it today to 
regenerate it in the future. There are other detailed 
challenges there but the big, broad-brush approach, it is 
working for them. It is sustainable, and they are being 
monitored.
    The Chairman. Very good. Thank you.
    Dr. Sample, outside of the general reauthorization, are 
there ways that we can improve upon stewardship contracting 
activities on Forest Service and BLM lands?
    Dr. Sample. I think there are, and not just on the western 
lands that have been sort of a primary focus here but because 
they are long-term contracts and because they span across a lot 
of different kinds of activities from road maintenance to 
streamside zone restoration. There are a lot of things that 
small businesses that are typical in these rural communities 
can do and they can plan their activities over the 5 year, 10 
year life of that contract so that they can continue to invest 
in capacity. Reauthorizing the Act that passed in 2003 would be 
the way to do that because it spanned across the National 
Forest System also included BLM lands, so I think that would be 
what I would recommend, yes.
    The Chairman. Thank you.
    Mr. Schuessler, if Forest County had a chance to vote again 
on its countywide referendum to turn over its forests to the 
Federal Government, do you think they would do that again?
    Mr. Schuessler. I don't believe that they would. I think it 
would be a dramatically different outcome.
    The Chairman. You pointed out in your testimony that there 
were major issues such as declining quality of standing timber 
costs, onerous rules. Can you discuss some of the rules that 
are detrimental to the industry and how each may affect 
different regions?
    Mr. Schuessler. Well, if I understand you correctly, how is 
the management of the National Forest impacting the other 
regions, one thing I can outline for you, I did a chart, and it 
is one of my exhibits there, is we had counties like your 
gentleman that wouldn't sell to the Federal forest back in the 
1920s. They made the wiser choice in the long run, and the 
reason is, as the chart reveals--and that is why I really 
believe that there is $100 million within the Chequamegon alone 
to be had just to the Federal Treasury by managing at the 
sustainable levels that those counties are currently doing. So 
you take the 11 counties, the 11 top counties that don't have 
National Forests and you put them head to head with the 
Chequamegon-Nicolet, there are actually fewer acres in those 
top 11 counties but it is about a 3 to 1 margin in return as 
far as revenue coming out of those counties, and no one is 
clear-cutting their forests unless it is a poplar stand or 
aspen stand where that is the kind of regenerative treatment 
that you do. This is sustainable management taking place.
    And I guess the other thing I would add to that is, a 
couple of the counties, for example, wood counties, they really 
don't have the benefit of the northern hardwoods that we have 
within the Chequamegon-Nicolet. If I had the three counties 
that have a little bit of National Forest like Langlade and 
Oconto to it, Oneida, it changes the number dramatically. It is 
probably well in advance of $100 million using those because of 
those species that exist within northern Wisconsin.
    The Chairman. Thank you.
    Dr. McKetta, based on your studies, do you believe that the 
Forest Service does an adequate job of accounting for its 
economic impact on a community by its management decisions, and 
if not, what do they need to consider?
    Dr. McKetta. We use a different technique so that we get 
different answers than they do, but they developed a very 
useful system called IMPLAN that does the accounting. It is the 
incorporation of that accounting into the planning process that 
seems to where the breakdown is.
    The Chairman. With IMPLAN, your testimony indicated that 
that economic model is utilized in NEPA and NFMA planning 
processes. You know, from your analysis, how are the IMPLAN 
outputs used in decision making?
    Dr. McKetta. If we look at what these generate, all of 
these modeling processes give us a physical perturbation or a 
biological perturbation and then we can tell you jobs and 
income, and our system will tell you where the jobs and income. 
IMPLAN does a mix but it doesn't tell you directly how to 
increase that or decrease that. That is up to the planning 
process itself.
    One of the things that I have had to tell my clients 
regularly is that jobs and income do not seem to sway the 
resource allocation decision itself. There has been, in my 
experience in the last year, two instances where it appears to 
have changed, where the job and income effect seems to 
influence the preferred alternative.
    The Chairman. Well, thank you, and thank you to all four of 
you on the second panel for your experience and your testimony, 
coming today to help us, prepare us to make better decisions.
    I now yield to the Ranking Member to make any closing 
remarks he has.
    Mr. Walz. Again, thank you, Mr. Chairman. Congratulations 
on assuming this. You are the right person for this job, and I 
am grateful. It is a good first hearing.
    Thank you to all four of you. It is good stuff to think 
about. You are a great resource for us. Please use our office 
now as things come forward to make sure we are being contacted.
    I would just highlight and give a thank you. I don't know 
if the four of you noticed, but Chief Tidwell came and listened 
to all of your testimony and stayed through this whole hearing. 
I can tell you from being around here, that is an unusual and a 
very appreciated gesture and it shows his concern. I think it 
bodes well for the future on this. I am optimistic, as I said. 
Again, this is a legacy that is the envy of the world. We get 
things right. We can get it right again, and I am seeing it in 
my state that it doesn't have to be an either/or. You can 
manage these forests, you can have economic gain off those. We 
can look to the future on biomass and value-added products, at 
the same time keeping that legacy of outdoor usage. So thank 
you all for being part of it. I yield back.
    The Chairman. I thank the Ranking Member, and once again, I 
thank all the panelists. You know, the Chief put an emphasis on 
the importance of collaboration, working together, and we have 
a lot of expertise here just in this room, so I know the 
Subcommittee is committed to continuing to look at forestry 
issues, and we all share the same goals. So thank you so much 
to everyone.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplemental written responses from 
witnesses to any question posed by a Member.
    This hearing of the Subcommittee on Conservation, Energy, 
and Forestry is adjourned.
    [Whereupon, at 12:06 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter of Phil Rigdon, President, Intertribal Timber Council




Hon. Glenn Thompson,                 Hon. Timothy J. Walz,
Chairman,                            Ranking Minority Member,
Subcommittee on Conservation,        Subcommittee on Conservation,
 Energy, and Forestry,                Energy, and Forestry,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.



    Dear Chairman Thompson and Ranking Member Walz:

    The Intertribal Timber Council (ITC) hereby submits this statement 
for the Subcommittee's hearing record of the Subcommittee's Hearing on 
``National Forest Management and its Impacts on Rural Economies and 
Communities,'' held Wednesday, March 13, 2013.
    The ITC is a thirty-seven year old national association of Indian 
tribes and Alaska Native organizations holding more than 90% of the 18 
million acres of tribal forestland held in Federal trust, as well as 
over four hundred thousand forest acres in Alaska. The ITC's purpose is 
to advance the understanding and management of Native American forests 
and natural resources. Along with other forestland owners, tribes and 
Alaska Natives share a collective stake in the health, utilization and 
sustainability of our nation's forests.
    Our forests are an integral part of our homelands. We have cared 
for them over countless generations, relying upon them for cultural, 
spiritual, and physical sustenance, as well as providing a source for 
governmental revenue and jobs for the local community. A number of 
tribes have sawmill operations, which can be the last such facilities 
across wide areas. The Federal Government also has fiduciary 
obligations to protect and perpetuate the health and productivity of 
tribal forest resources. Beyond the borders of our reservations, 
federally reserved tribal rights and interests often apply to 
neighboring public lands.
    The inability of the Forest Service to manage National Forests has 
severely impacted the economies and well being of forest-dependent 
tribal communities. We have long expressed concern over administrative 
paralysis that grips the Forest Service and prevents it from providing 
the care required to maintain the health and productivity of the 
forests. The inability to actively manage National Forests has created 
conditions that severely threaten lands and resources held in trust for 
Indians by the United States. Potential for catastrophic loss of life 
and property resulting from disease, insect infestation, invasive 
species, climate change and wildfire are great and growing. The 
inability of the FS to harvest forest products has contributed to the 
loss of management, harvesting, transportation and processing 
infrastructure essential to our ability to generate income and 
employment to care for our lands and communities. Ecological functions 
are deteriorating, diminishing tribal opportunities to benefit from 
tourism or development of enterprises that utilize non-traditional 
forest products or produce renewable energy. Our ability to practice 
our cultures, religions, and traditions, to protect water, fish, 
wildlife, and plants so we may continue to exercise reserved rights and 
to continue our lifeways by fishing, hunting, trapping, and gathering 
foods and medicines is being adversely affected. Tribes share many of 
the forest issues, concerns, and responsibilities that apply to other 
forestland owners. The inability of Federal agencies to manage the 
forests entrusted to their care poses potentially devastating 
consequences for tribes, states, and other neighboring forestland 
owners, and is prompting the tribes, like the states, to pursue 
alternatives to address this growing problem.
    On this occasion of the Subcommittee's hearing on the management of 
National Forests and its impact on local economies, the ITC seeks to 
provide the Subcommittee with a brief overview and update of tribal 
perspectives on similar issues. These comments seek to introduce the 
Subcommittee to ITC activities that are now still in process and are 
pending final reports:

    (1) A review of impediments to implementation of the Tribal Forest 
        Protection Act, which seeks to facilitate tribes performing 
        forest health projects on neighboring Federal public forests;

    (2) The ITC Anchor Forest pilot project, which seeks transboundary 
        cooperative forest management to preserve forest health, 
        productivity and infrastructure; and

    (3) Imminent completion of the third statutorily mandated report of 
        an Indian Forest Management Assessment Team (IFMAT-III). IFMAT-
        III is an independent comprehensive decadal review of the 
        status of Indian trust forests and forestry, and is the only 
        such review of Federal forests.
(1) The Tribal Forest Protection Act
    The Tribal Forest Protection Act (TFPA, P.L. 108-278) was enacted 
after a series of devastating wildfires came off of Federal public 
forestland onto Indian reservation land, burning thousands of acres of 
tribal forests, destroying homes, disrupting vital ecological 
functions, and trapping and killing reservation residents. Tribal lands 
have close to three thousand miles of common boundary with National 
Forests. The TFPA seeks to facilitate tribal efforts to carry out fuels 
and forest health treatments on Forest Service and Bureau of Land 
Management lands that pose threats to tribal trust lands or reserved 
rights. Tribes propose the projects, and while their acceptance is at 
the discretion of the local US Forest Service or BLM, the TFPA intends 
that the two agencies give the proposals special consideration. 
Implementation, however, has been a disappointment. Only six TFPA 
projects have been successfully implemented on Forest Service lands 
since the TFPA was adopted in 2004. The consideration of proposals has 
been extremely slow, often taking years, frustrating both the tribes 
and the Forest Service, which, with its extensive common border with 
tribal land, has received most of tribal TFPA proposals.
    To identify impediments to the Act's success, the ITC, working in 
collaboration with the Forest Service and Bureau of Indian Affairs, has 
been conducting an investigation into the TFPA's implementation. The 
final report is expected out in the next few weeks, and while not yet 
final, it appears that points of difficulty include a lack of training 
on the TFPA and Federal-Indian relationships, inadequate agency funding 
for tribally proposed projects, frequent staffing turnover, and the 
cost and legal hurdles posed by Federal administrative processes. It is 
hoped the TFPA report and its findings and recommendations can provide 
information helpful to improving the TFPA's effectiveness. Stewardship 
Contracting is one of the tools available for TFPA projects, and the 
TFPA provides limited authorities similar to the ``Good Neighbor'' 
authorities for Colorado and Utah and under consideration for expansion 
to other western states.
(2) The ITC Anchor Forest Proposal
    The ITC is undertaking a pilot project to explore the concept of 
Anchor Forests as a means to try to maintain healthy working forests on 
the landscape. Economic benefits from harvest of wood products are 
essential to address forest health problems on Federal lands, sustain 
stewardship practices on private, tribal, and state forests, defray 
costs of management, and provide environmental services. Anchor Forests 
are intended to provide a foundation to foster collaboration and 
cooperation across ownership boundaries and among diverse interests. 
For regional planning and development, Anchor Forests support the 
capacity to mount and focus financial resources for investments in 
infrastructure and ecological functions by identifying regional needs, 
opportunities, and priorities.
    Anchor forests are large, contiguous areas of land with four major 
characteristics:

    1. A reasonable expectation for sustainable wood commodity 
        production as a major management objective; and

    2. Production levels sufficient to support economically viable 
        manufacturing, processing, and work force infrastructure within 
        accessible transportation; and

    3. Long-term management plans, supported by inventory systems, 
        professional staff, and geographic information systems; and

    4. Institutional and operational capacity for implementation.

    The first two characteristics center on the relationship between 
commercial activities and the ability to care for forests. Anchor 
Forests are intended to be capable of sustaining production levels of 
forest products at a scale necessary to maintain at least a minimal 
level of competition (200 MMBF) within viable transportation distance 
(60 mile radius) of processing facilities. Because of long-term 
commitments to stewardship on relatively large blocks of land, Indian 
forests are prime candidates to be recognized Anchor Forests. 
Participation in an Anchor Forest is voluntary.
    The ITC initiated a pilot study to evaluate Anchor Forest prospects 
with the assistance of the US Forest Service. This ITC/USFS Anchor 
Forest Pilot Project in Washington State is expected to be completed in 
late 2014, but we will be continually gathering additional information 
on the Anchor Forest proposal while the Pilot Project is underway. The 
on-going goal is to establish working Anchor Forests and evaluate both 
their creation and operation. Anchor Forests are also being examined by 
a group of independent forestry experts in the third decadal assessment 
of the status of Indian forests and forestry, IFMAT-III.
(3) IFMAT-III
    Section 3111 of the National Indian Forest Resources Management Act 
(P.L. 101-630, 1990) requires that every 10 years the Secretary of the 
Interior provide for an assessment of Indian trust timber resources and 
its management, to be conducted by a team of independent experts. Each 
report of an Indian Forest Management Assessment Team (IFMAT Report) is 
to include examinations, with findings and recommendations, of eight 
statutorily identified tasks, and is be delivered to the Senate 
Committee on Indian Affairs, the House Committee on Natural Resources, 
Indian tribes and the Administration. The Interior Department has 
contracted with the ITC for the assembly of the assessment teams and 
delivery of the reports. The first IFMAT Report was completed and 
delivered in November 1993, the second in November 2003. Congress held 
oversight hearings on both reports. The third assessment has been 
underway for more than a year and is expected to be completed this June 
2013.
    The IFMAT report is the only regularly scheduled independent review 
required for any Federal timber land, and as such is unique and 
valuable, particularly as the reports accrue over time. In addition to 
its value to the tribes and the Federal trust management of Indian 
forests, the report's discussion, findings and recommendations include 
required comparisons to Federal public forests that could cast an 
informative light on Federal public forest management.
    As Congress considers Federal public forest policy, arrangements 
that might be struck regarding the management or disposition of Forest 
Service lands with states, other governments, or private parties, 
including such proposals as ``good neighbor'' management authority, 
leases of Federal public lands, Federal forest land ``trusts'', or any 
form of Federal land title transfer, must fully recognize and respect 
tribal interests and implications for tribal economies. Fiduciary 
obligations to protect the health and productivity of lands and 
resources held in trust for Indians by the United States must be 
honored, as must duties to prevent adverse impacts on Tribal treaty 
rights and other reserved rights and interests on Federal public land.
    The ITC's testimony submitted last Congress to the House Natural 
Resources Subcommittee on National Parks, Forests and Public Lands for 
its July 20, 2012 hearing on H.R. 6089, the Healthy Forest Management 
Act of 2012, remains relevant today:

        ``The Intertribal Timber Council (ITC) is concerned over the 
        potential for H.R. 6089 to adversely impact tribal rights and 
        interests. While ITC shares concerns regarding the need to 
        undertake active management of lands under the jurisdiction of 
        the U.S. Forest Service and Bureau of Land Management, state 
        assumption of significant Federal administrative and 
        programmatic functions must be constrained to ensure that 
        management fully complies with requirements of Federal 
        statutes, regulations, judicial decrees, and fiduciary 
        responsibilities towards Indian tribes. Our concerns are multi-
        faceted, including the need to preserve the opportunity for 
        tribes to initiate projects to protect trust properties under 
        the Tribal Forest Protection Act (TFPA, P.L. 108-278, 25 U.S.C. 
        3115a), protection of cultural and archeological sites, respect 
        for the exercise of religious freedoms and the conduct of 
        ceremonies, and protection and preservation of tribal treaty 
        and other reserved rights.''
Conclusion
    The ITC urges the Subcommittee, perhaps in conjunction with the 
Natural Resources Subcommittee on Public Lands and Environmental 
Regulation or Indian and Alaska Native Affairs, to hold further 
hearings on the comprehensive status of our nation's forests, concerns 
regarding their economic and ecological viability, and potential 
initiatives that are needed to sustain their health and productivity.
    Such a hearing could take testimony from tribes, states, Federal 
tribal and public forest land managers, academic experts, NGOs, and 
private parties on numerous similar or overlapping interests:

   All the parties' concerns about the declining health of 
        Federal public forests;

   The Tribal Forest Protection Act, current Good Neighbor 
        Authority, Stewardship Contracting, and other management 
        alternatives;

   The Anchor Forest Pilot Project, its similarities to, and 
        differences with, the Collaborative Forest Landscape 
        Restoration Program, and other Federal, state and private 
        collaborative forest management efforts,

   Various land disposition ideas, wherein the idea of Federal 
        forest trusts for states could be compared and contrasted to 
        experience with the Federal trust for tribal forests, and

   The IFMAT-III report, with its detailed examination of the 
        status and management of tribal forests held in Federal trust 
        and its comparisons with Federal public and private forests, 
        and other contemporary reports and evaluations on Federal 
        forest management.

    The ITC is actively engaged in a variety of activities generally 
parallel to those being explored by Federal agencies, states, NGOs, and 
other parties. We appreciate the opportunity to inform the Subcommittee 
of the ITC's undertakings, and hope our efforts will be of interest and 
assistance to the Subcommittee as it considers current Federal public 
forestland issues.
            Sincerely,

            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Phil Rigdon,
President.
                                 ______
                                 
                          Submitted Questions
Response from Thomas Tidwell, Chief, U.S. Forest Service, U.S. 
        Department of Agriculture
Questions Submitted By Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. In 2011, you indicated the Forest Service restored 3.7 
million acres with various treatments across the National Forest 
System. Can you provide the Subcommittee with 2012 numbers?
    Answer. Just over 5 million acres were restored on NFS lands, 
including watershed, fish and wildlife habitat restoration, range 
habitat restoration; noxious weed treatment, reforestation, timber 
harvest, and hazardous fuels reduction.

    Question 2. Chief Tidwell, can you offer us a detailed breakdown of 
the cost to do a timber sale? Can you explain the cost breakdown and if 
you believe there are any ways to reduce this cost?
    Answer. Typically, timber sale costs at the field level average 
$100 per thousand board foot. This cost includes all costs associated 
with NEPA (environmental analysis and consultation with other 
Agencies); timber sale preparation work, including unit delineation, 
marking and cruising; sale appraisal, package preparation, and sell; 
and sale administration.
    This cost, adjusted for inflation, has decreased by 28% since 1998 
as we continue to explore ways to reduce these costs. In an effort to 
further reduce these costs, the FS' Forest Management Service Center 
formed a taskforce to review processes, regulations and policy and 
develop a set of recommendations to reduce sale preparation costs and 
improve efficiencies.

    Question 3. Given ample opportunity, can you explain why USDA did 
not inform the Committees of Jurisdiction that the Secure Rural Schools 
program is subject to the sequester and that states would have to 
return money that had been previously disbursed?
    Answer. The Office of Management and Budget notified Congress of 
the estimates of sequestrable and exempt budgetary resources as 
required by the Sequestration Transparency Act of 2012 on September 14, 
2012. The sequestrable budget authority for the Secure Rural Schools, 
Payments to States accounts are included in the Forest Service 
Permanent Appropriations, Mandatory funds.
    When it became clear that the sequester would apply, we notified 
Governors and Congressional Committees of that fact and the steps 
needed to implement the sequester.
Questions Submitted By Hon. Kurt Schrader, a Representative in Congress 
        from Oregon
    Question 1. The Forest Service uses U.S. Green Building Council 
(USGBC) LEED standards in the construction of many new buildings and 
major renovations of existing buildings. Unfortunately, the LEED 
system, the more widely used green building rating system, 
discriminates against wood. As the lead agency in the Federal 
Government with expertise in wood products and an understanding of the 
connection between robust markets and healthy forests has the Forest 
Service provided comments to the USGBC recommending they change their 
LEED standard to provide due credit to wood as a recognized green 
building material?
    Answer. Yes. In a March 31, 2011 letter to Forest Service Leaders, 
Chief Tidwell affirmed the Forest Service's commitment to encouraging 
sustainable building construction and emphasized that it is the goal of 
the Forest Service to increase our ability to support the use of 
sustainably grown, domestically produced wood products, including wood 
from the National Forests.
    In May 2011, the Forest Service officially changed its policy to 
include Green Globes and other third-party green building certification 
systems in addition to LEED. Green Globes permits certified products 
from Forest Stewardship Council (FSC), Sustainable Forestry Initiative 
(SFI), American Tree Farm System (ATFS) and Canadian Standards 
Association (CSA) to be counted towards green building certification. 
The Forest Service's Southern Research Station currently plans to 
attain Green Globes certification of a new office and training center 
planned for Research Triangle Park, NC.
    In December 2011, the Forest Products Laboratory published Science 
Supporting the Economic and Environmental Benefits of Using Wood and 
Wood Products in Green Building Construction. This report summarizes 
the scientific findings that support the environmental and economic 
benefits of using wood and wood products in green building 
construction. It addresses a general lack of recognition that wood is a 
renewable resource, helps mitigate climate change, promotes healthy 
forests and is a green construction material. The report also:

   Provides solutions to advance wood as a green building 
        material, including:

     Scientific advancement in the area of life cycle 
            analysis

     Development of new technologies for improved and 
            extended wood use

   Outlines benefits in helping achieve USDA objectives, 
        including:

     Creating domestic jobs

     Bolstering the competitive position and long-term 
            economic stability of the wood industry

     Reducing U.S. dependence on foreign oil

   Offers recommendations on how to accomplish:

     Research and development--life cycle analysis

     Technology transfer--carbon and green building 
            benefits of typical wood structures

    Forest Service continues to preferentially select wood in building 
construction projects while maintaining its commitment to green 
building standards. The Agency has incorporated a significant amount of 
LEED-certified wood past construction. New agency buildings currently 
being planned will consider pursuing green building rating under GBI 
Green Globes or other American National Standards Institute (ANSI)-
accredited third party certification systems.
    Examples of prominent wood-use in Forest Service buildings 
completed after 2011 include:

   Camino Real Ranger Station, Carson National Forest, Penasco, 
        NM

      An 8,500 square feet building that prominently features locally 
        milled wood products in the architectural design. Besides 
        reusing wood salvaged from demolition, the building 
        incorporated wood in framing, sheathing, doors and windows, 
        interior and exterior trim. Other wood products incorporated in 
        the building include i-joists, glulam, SIPS, lumber trusses, 
        locally milled columns, beams, ceilings and fixtures.

   Wood Products Insect Laboratory, Starkville, MS

      A $1.1 million 4,729 square feet project incorporating FSC-
        certified framing lumber, casework, wall and ceiling panels as 
        well as 8\1/4\" R-33 SIPS panel with FSC-certified plywood skin 
        in the roof system. It is estimated that approximately 25% of 
        the building was constructed using wood products.

   Corvallis Forest Science Laboratory and Siuslaw National 
        Forest HQ Office, Corvallis, OR

      A $4.1 million 9,700 square feet project with wood exterior, wood 
        interior paneling, glulam and wood fixtures.

   Angeles National Forest Supervisor Office, Arcadia, CA

      A 24,500 square feet 2 story wood frame building with wood 
        exterior and wood trusses in its roof system.

    All Forest Service building projects also incorporate green 
building principles such as energy efficient, locally produced wood 
products, recycling and reuse of building materials. As noted above, 
the Research Triangle Park Forestry Science & Assessment Center, a $1.6 
million 8,000 square feet facility planned for FY14 is being designed 
to achieve Green Globes Certification (2 Globes) and feature extensive 
use of wood instead of masonry. Approximately 45% of the building is 
expected to be constructed of wood or wood products. The building 
design process will also evaluate if cross laminated timbers (CLT) are 
a viable option for constructing this facility.

    Question 2. As you are aware, the 9th Circuit Court's decision 
against the State of Oregon and Tillamook County with respect to forest 
roads, if allowed to stand, would require Federal, state, tribal and 
private landowners to secure point source permits under the Clean Water 
Act for forest roads. Could you share your views on the impact on the 
U.S. Forest Service--National Forest System--both from a cost and 
forest health perspective, if this decision is allowed to stand?
    Answer. On March 20, 2013, the U.S. Supreme Court reversed the 
Ninth Circuit Court's decision in Northwest Environmental Defense 
Center v. Brown, 640 F.3d 1063 (9th Cir. 2011) (Decker v. Northwest 
Environmental Defense Center (NEDC), No. 11-338, 568 U. S. (2013)). The 
Court held that the Clean Water Act and its implementing regulations do 
not require National Pollution Discharge Elimination System (NPDES) 
permits for stormwater discharges from logging roads into navigable 
waters of the United States. In addition, on December 7, 2012, the 
Environmental Protection Agency revised its Phase I stormwater 
regulations to clarify that stormwater discharges from logging roads do 
not constitute stormwater discharges associated with industrial 
activity and that an NPDES permit is not required for these stormwater 
discharges. With these two actions, stormwater discharges from logging 
roads would not require NPDES permits.
Questions Submitted By Hon. Gloria Negrete McLeod, a Representative in 
        Congress from California
    Question 1. I understand from my California Agricultural 
Commissioners the U.S. Forest Service in every activity that is subject 
to the National Environmental Policy Act (NEPA) process is very costly 
and redundant. Can you tell me what the percentage is of NEPA analysis 
and other environmental documentation costs compared to the actual on-
the-ground activities that improve forest health for California and the 
nation?
    Answer. We do not track NEPA analysis and other environmental 
documentation costs compared to actual on-the-ground activities. 
Generally, based on a 2007 study, the agency spends approximately 
$365,000,000 a year on NEPA and related environmental analysis.
    To accomplish more effective vegetation management, the Forest 
Service is fostering a more efficient National Environmental Planning 
Act (NEPA) process by focusing on improving agency policy, learning, 
and technology. These NEPA process improvements will increase decision-
making efficiencies and public engagement, resulting in on-the-ground 
restoration work getting done more quickly and across a larger 
landscape. In addition to the Forest Planning rule, the agency has 
initiated a NEPA learning networks project to learn from and share the 
lessons of successful implementation of efficient NEPA analyses. The 
goal of this effort is to maintain decision making transparency for the 
public and ensure that the Agency's NEPA compliance is as efficient, 
cost-effective, and up-to-date as possible. Specifically we are looking 
at expanding the use of focused Environmental Assessments (EAs), 
iterative Environmental Impact Statement documentation (EISs), 
expanding categories of actions that may be excluded from documentation 
in an Environmental Assessment (EA) or an Environmental Impact 
Statement (EIS), and applying an adaptive management framework to NEPA.
    Our landscape-scale NEPA projects will also increase efficiencies. 
For example, our Mountain Pine Beetle Response Project on the Black 
Hills National Forest is implementing a landscape-scale adaptive 
approach for treating current and future pine beetle outbreaks. We are 
also implementing the Four Forest Restoration Initiative (4FRI) project 
in the Southwest, as well as other landscape-scale forest restoration 
projects such as the 5-Mile Bell project in Oregon. The Draft EIS for 
the first 4FRI area covers about one million acres. All of our efforts 
are aimed at becoming more proactive and efficient in protecting the 
nation's natural resources, while providing jobs to the American 
people.

    Question 2. Can you tell me if this same NEPA process is used by 
other resource agencies (Bureau of Land Management (BLM), National Park 
Service, U.S. Fish & Wildlife, Army Corp of Engineers)? Are each of 
these agencies completing their own NEPA, separately? In the current 
year, Congress and the President provided the Department $14 million of 
funds for the Watershed Rehabilitation Program that would be used to 
protect lives and property, while also creating jobs and repairing the 
nation's infrastructure. We understand that OMB has blocked the 
distribution of the funding to NRCS.
    Answer. Generally, the same NEPA process is used by other resource 
agencies, with some variations. Each agency complies with NEPA 
separately; however in cases where there are joint decisions to be 
made, they cooperate to conduct one environmental analysis. In regards 
to the Watershed Rehabilitation Program, your inquiry was forwarded to 
Natural Resource Conservation Service for a response.

    Question 3. I understand that in Lake County, Oregon the U.S. 
Forest Service has joined with BLM to streamline the NEPA process for 
multiple Federal agencies to conduct multiple activities. I 
congratulate you for such endeavors. Can you tell me about other 
activities in California and throughout the nation that the U.S. Forest 
Service is engaged with that continue to streamline the NEPA processes?
    Answer. The Forest Service is continuously improving the NEPA 
process. Current efforts include technology applications to speed 
public comment analysis, project file management, publishing 
environmental documents to the internet, and managing mailing lists. We 
have focused our NEPA training on key skills for managing the process, 
including team management and decision making. We are also improving 
our documentation in environmental assessments and environmental impact 
statements (EIS). Recently, an EIS was prepared on the Black Hills 
National Forest to make a decision on treating bark beetles on over 
250,000 acres (3 to 6 times larger than typical EISs on the Black Hills 
NF).

                                  
