[Federal Register Volume 59, Number 105 (Thursday, June 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13323]


[[Page Unknown]]

[Federal Register: June 2, 1994]


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Part IV





Department of Agriculture





_______________________________________________________________________



Forest Service



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Recreation Residence Authorizations; Notice
DEPARTMENT OF AGRICULTURE

Forest Service
RIN 0596-AB06

 
Recreation Residence Authorizations

AGENCY: Forest Service, USDA.

ACTION: Notice, adoption of final policy.

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SUMMARY: The Forest Service is adopting revised policies and procedures 
for administering special use permits that authorize privately owned 
recreation residences on National Forest System lands. This action is 
in response to an administrative appeal decision by the Assistant 
Secretary of Agriculture for Natural Resources and Environment that 
found that certain portions of the policy adopted on August 16, 1988, 
exceeded agency authority. The decision directed that those portions of 
the policy be stayed from implementation pending reformulation and 
publication of a revised policy in the Federal Register. In addition to 
adopting new provisions affected by the appeal decision, this final 
policy also conforms administrative provisions to revisions in the 
Secretary of Agriculture's Administrative Appeal regulations governing 
authorizations for occupancy and use of National Forest System lands, 
adopted after the original recreation residence policy. This final 
policy also clarifies the policy for determination of annual rental 
fees. The intended effect of this action is to administer recreation 
residence authorizations consistent with statutory authority.

EFFECTIVE DATE: This policy is effective June 17, 1994.

FOR FURTHER INFORMATION CONTACT:
Questions about this policy should be addressed to J. Kenneth Myers, 
Lands Staff, Forest Service, USDA, P.O. Box 96090, Washington, DC 
20090-6090, (202) 205-1248.

SUPPLEMENTARY INFORMATION: On August 16, 1988, the Forest Service 
adopted a final policy and procedures for administering special use 
permits that authorize privately-owned recreation residences on 
national Forest System lands (53 FR 30924). The policy established a 
new procedure for calculating annual fees, gave direction on tenure and 
renewability of the permits, and described procedures to be followed 
when the recreation residence lot was needed for a higher public 
purpose
    This policy was appealed to the Secretary of Agriculture on 
September 15, 1988. The appellants alleged that the process by which 
this policy was developed was flawed because the policy exceeded 
statutory limitations on recreation residence use of the National 
Forests, and that the appellants and the public were adversely affected 
by the policy
    In a decision dated February 15, 1989, the Assistant Secretary of 
Agriculture for Natural Resources and Environment remanded the policy 
to the Forest Service for restudy and reformulation and stayed the 
implementation of certain provisions of the 1988 policy as follows: (1) 
Those nonrenewal provisions relating to or requiring a showing of 
higher public purpose where the lands occupied were deemed needed for 
other than recreation residences; (2) those provisions requiring 
automatic permit renewal 10 years prior to expiration unless nonrenewal 
had been established; (3) those provisions requiring the offering of 
``in-lieu'' lots to permittees who had received notice of nonrenewal or 
termination; and (4) those provisions weighted against consideration of 
commercial uses for lots when nonrenewal of the recreation use was 
contemplated. Further, the decision expressed concern about other 
provisions of the policy, such as fee determination procedures. In 
addition, the Assistant Secretary required that the remaining features 
of the final policy be designated as interim policy pending its 
reformulation following all applicable process requirements.-
    The policy adopted August 16, 1988, was issued as direction to 
Forest Service personnel through amendments and interim directives to 
Forest Service Manual (FSM) chapters 2340 and 2720 and Forest Service 
Handbook (FSH) 2709.11--Special Uses Handbook. On June 1, 1989, at 54 
FR 23499, the Forest Service gave notice that the direction in FSM 2340 
and 2720 was to be revised, that the remaining portions of the policy 
were designated as interim policy in compliance with the Assistant 
Secretary's decision, and removed those provisions stayed by the 
Assistant Secretary.
    On September 20, 1989, in response to the Assistant Secretary's 
decision, the Forest Service gave notice that it was seeking comments 
on an Advance Notice of Proposed Policy (54 FR 38700). A 60-day comment 
period was provided which was extended an additional 60 days, expiring 
on January 19, 1990. In this notice, the agency offered alternative 
approaches to those portions of the policy stayed by the Assistant 
Secretary's decision and asked for public advice and comment on those 
provisions and on the options that the agency identified to replace the 
current policy provisions.
    The public comment received on the September 20, 1989, notice was 
considered in the development of a proposed reformulated policy 
published on October 10, 1991 (56 FR 51260). A 90-day comment period 
was provided for this notice which was extended an additional 60 days 
to March 9, 1992. This proposed policy also provided appropriate 
clarifying and explanatory material for those parts of the 1988 policy 
shown as areas of concern in the Assistant Secretary's decision.

Analysis and Response to Public Comments

    The Forest Service received 7,793 comments on the October 10, 1991, 
notice of proposed policy. The analysis of the public comments was 
accomplished using standard Forest Service procedures designed to 
ensure an objective and systematic analysis. Information was tabulated 
electronically. The number and percentage of responses by category of 
respondents (as identified by the respondent) is as follows:

------------------------------------------------------------------------
                Respondent type                    Number     Percentage
------------------------------------------------------------------------
Permittee.....................................        4,656           60
Friend or Family of Permittee.................          996           12
Permittee Association.........................           47            1
Other Organization............................            3        (\1\)
Interested Party, Not a Permittee.............        2,084           26
Forest Service Personnel......................            7        (\1\)
                                               -------------------------
      Total...................................        7,793          100
------------------------------------------------------------------------
\1\Less than 1 percent.                                                 

    Comments were received from 45 States, Puerto Rico and the District 
of Columbia. Over 50 percent of the responses came from California 
which contains about 40 percent of all recreation residences. There 
were 312 comments received after the closing date of the notice and not 
considered in the analysis of comments.
    Respondents comments were sorted according to the proposed policy 
provisions identified in the comment. They were further identified as: 
(1) Agreeing with the provision, (2) agreeing with the provision but 
with a contingency (comment), (3) disagreeing with the provision, and 
(4) disagreeing with the provision but with a contingency.
    Of the 7,793 responses received, 6,264 (80 percent) were in the 
form of questionnaires developed and distributed by 2 national 
permittee associations. The questionnaires presented several general 
statements describing a premise or belief of what the content of the 
revised policy should be to which the respondent could either agree or 
disagree. For example, question 1 of the National Forest Homeowners 
questionnaire stated ``I strongly support the policy provision that 
says recreation residences are a valid and important recreation use, 
and that it is Forest Service policy to continue them. Please leave 
this provision unchanged.'' The fourth question of the National 
Inholders Association questionnaire stated ``Removal of recreation 
residences will cause emotional pain and disruption for forest 
permittees and their families. It will cause waste of resources. For 
that reason, the proposed policy of allowing removal of existing 
recreation residences where there is no higher use (FSM 2721.23e) is 
arbitrary and wasteful.'' The questionnaire responses were analyzed and 
the general views of the respondents considered during preparation of 
this final revised policy. These views were helpful in identifying 
issues of concern to permittees.
    Narrative comments were attached to 704 questionnaires. In 
addition, 1,529 letters containing comments on specific provisions of 
the proposed policy were received. The total of 2,233 narrative 
responses, several of which provided very detailed analysis and 
recommendations on policy provisions, provided the most useful 
information in preparing the final revised policy and form the basis 
for the following comment analysis.
    In addition to providing the questionnaire response forms to their 
members, the permittee associations provided narrative responses to the 
proposed policy. These were generally detailed analysis of the policy 
with the associations' recommendations for revision and improvement.
    A summary of the general comments received and the agency's 
response to them is presented first, followed by a summary of the 
specific comments received and the agency's response. Specific comments 
are organized in the same format as found in the supplementary 
information to the proposed policy notice, that is, the same 7 topic 
headings representing the major issues addressed in the proposed policy 
are used. The comment analysis concludes with a discussion of the 
matters of concern in the Assistant Secretary's decision and the 
agency's response.

General Comments

    Over half of the 2,233 respondents provided general comments on 
recreation residence use which were not directed at specific provisions 
of the policy. Many respondents affirmed their desire to keep their 
cabins, at the same location, at reasonable cost, and without 
continuous fear of nonrenewal of their permits. These respondents felt 
the agency, through the proposed policy, was abandoning support for the 
recreation residence program, was biased against permit holders, and 
was seeking to remove this use from National Forest System lands. Some 
respondents, however, felt the agency was biased in favor of permit 
holders.
    Many respondents offered eloquent testimony to the significance of 
the cabin to their family, citing emotional ties to the site that span 
several generations. Others emphasized the importance of the recreation 
residence use to the National Forest, describing how the cabins are 
used by a large segment of the public for recreation, generate income 
to the Treasury, and contribute to the stewardship of the National 
Forests.
    One permittee association advocated expansion of existing 
recreation residence tracts and establishment of new tracts. This view 
was based on the belief that the agency was in violation of the Civil 
Rights Act of 1964 by failing to make recreation residence lots 
available to persons of minority races, or of diverse religious, 
political, and sexual beliefs. On the other hand, several respondents, 
favored no expansion to phasing out of all recreation residence tracts.
    Many respondents objected to the appeal of the August 10, 1988, 
policy and 270 suggested that the policy be restored in its entirety. 
Often, these respondents stated that the proposed policy was biased and 
discriminatory against cabin owners and was overly responsive to the 
views of those who opposed recreation residence use. A smaller number 
felt the proposed policy was an improvement over the 1988 policy, but 
that there were several flaws in the 1988 policy not addressed in the 
proposal, particularly that the bias in favor of permit holders, as 
identified in the appeal decision, had not been corrected. Eleven 
respondents offering general comments generally agreed with the 
proposed policy, that it responded to the appeal decision, was 
constructive and a step in the right direction.
    The Forest Service recognizes that there is a divergency of opinion 
on recreation residence use on the National Forests. It is sympathetic 
to those who have enjoyed the privilege of the use for many years and 
who want to continue the privilege. Further, the contributions these 
holders make to the management and protection of the National Forests 
is acknowledged.
    The agency also recognizes that increasing demands are being placed 
on the National Forests to meet a wider array of public uses. 
Significant new public laws have been enacted since the act authorizing 
privately owned recreation residences on the National Forests was 
enacted in 1915. These laws, particularly the National Environmental 
Policy Act and the National Forest Management Act of 1976, directly 
impact the way the agency manages public and private uses of the 
National Forests. Equally significant, public perceptions of how the 
National Forests should be managed have changed in the 75 years the 
recreation residence program has been in existence.
    The agency, by policy adopted over 25 years ago, stopped the 
establishment of new recreation residence tracts. Subsequently, it 
stopped issuing new permits for vacant lots in already established 
tracts. This has fixed the number of recreation residences in existence 
to a current 15,600. This action was taken in response to an increasing 
public demand for recreation use on the National Forests in the 1960's. 
The rationale supporting that policy decision still applies. The 
agency, while recognizing the views of those respondents who seek to 
create new recreation residence opportunities, believes that such 
action would not be in the public interest. It does not propose to 
create tracts nor offer new permits for recreation residence use. 
Recreation residences are bought and sold in the private real estate 
market, and, as such, are available to all individuals under the laws 
of the States and local governments in which they are located.
    The Forest Service, in responding to the administrative appeal 
decision, seeks a permit review and issuance process that does not show 
bias in favor of the recreation residence use, nor an intent by policy 
to remove the permitted use.
    Readers are reminded that whether recreation residence use should 
continue to be permitted on National Forest System lands is not the 
issue addressed in this final policy. The Assistant Secretary's appeal 
decision did not challenge the appropriateness or continuation of the 
use. Rather, it focussed on legal flaws identified in the 1988 policy 
and in the process by which that policy was adopted. This final policy 
responds solely to the specific provisions in the appeal decision. The 
agency has not revised, redirected, or otherwise changed the national 
guidance stated in the 1988 policy and which was not debated in the 
appeal decision.
    Several respondents offered editing suggestions on the proposed 
policy. For example, the words ``lot'' and ``site'' were used 
interchangeably in describing the holder's permitted area. The agency 
agrees that use of a single term improves clarity and has used the word 
``lot'' throughout the final policy. Also, the words ``permittee'' and 
``holder'' were both used to identify the party holding the permit for 
the recreation residence lot. Holder is the correct term and is used 
throughout the final policy.
    The use of terms ``termination'' and ``revocation'' in this policy, 
when describing the action leading to cessation of the privileges 
granted by the permit, have caused confusion among holders and agency 
field personnel alike. A recent amendment to the Manual (FSM 2705) 
clarified these terms and made their use consistent with regulations at 
36 CFR 251. This action requires a conforming revision to the 
recreation residence policy. In most cases, the term ``revocation'' 
replaces the term ``termination.'' To aid readers in understanding use 
of these terms in the final policy, they are defined as follows:

    Revocation: The cessation of a special use authorization by 
action of the authorized officer prior to the end of the specified 
period of occupancy or use due to the holder's noncompliance with 
the terms of the authorization, failure to exercise the privileges 
granted, or for reasons that are in the interest of the general 
public. Revocations are appealable by the holder.
    Termination: The cessation of a special use authorization by 
operation of law or the occurrence of a fixed or agreed-upon 
condition, event or time without the necessity for any decision or 
action by the authorized officer.

    Several other editing suggestions are incorporated into the final 
policy.
    Finally, many respondents offered comments on provisions of the 
policy that were not addressed in the Assistant Secretary's appeal 
decision. For example, several respondents objected to the provision in 
the permit which requires holders to ``inspect the lot and adjoining 
areas for dangerous trees, hanging limbs, and other evidence of 
hazardous conditions which could affect the improvements and or pose a 
risk of injury to individuals.'' (Permit provision IV.G) This provision 
was in the permit adopted as part of the August 10, 1988, policy. As 
such, it was not considered in this revision of that policy. The agency 
appreciates receiving these comments. They are an indication of holder 
concerns and will be considered as the policy is updated and kept 
current.

Specific Comments and Response

    The October 10, 1991, Federal Register notice requested public 
comments on a proposed revision to the recreation residence policy. The 
material in that notice was arranged in 7 discussion topics that 
grouped the revisions into elements or segments of the four agency 
directives that bear on recreation residences. These 7 discussion 
topics are also used in this notice. However, the entire recreation 
residence policy is presented in this notice so that readers can see 
the revisions in the context of the complete direction.
    Many of the respondents offering specific comments also asked that 
key provisions and phrases from one part of the policy be added to 
provisions elsewhere in the policy to lend emphasis or clarity to the 
provision. The Forest Service advises that the redundancy occurring as 
a result of this would be inconsistent with agency directive system 
policy. Readers are also advised that Forest Service direction for 
administering recreation residence permits, or any other type of 
special use authorization, does not stand alone in the agency's 
administrative manual or handbooks. The direction in this notice is 
dependent on overall direction affecting the entire special use program 
which appears in Federal Regulations at 36 CFR part 251, subpart B, and 
titles 2300 and 2700 of the Manual. In addition, other direction 
affecting the management of the National Forest System bears upon the 
recreation residence policy. In particular, direction dealing with 
planning for all land and resource management activity and related 
direction dealing with environmental analysis and compliance with the 
National Environmental Policy (NEPA), found at FSM 1920, and FSM 1950 
and FSH 1909.15, respectively, greatly influences the direction 
contained in this notice. The agency has added cross-references where 
appropriate when a specific policy provision is guided by broader 
policy direction.
    1. Validity of the Recreation Residence Use. The proposed direction 
at FSM 2347.1 set forth the basic policy on recreation residence use 
and continuance. The beginning paragraph of that section established 
that recreation residences were a valid use of National Forest System 
land and an important component of the overall National Forest 
recreation program. A clear statement of policy followed stating that 
the use could continue to occupy the Federal lands. The purpose of this 
revision was to place the recreation residence use on an equal footing 
with other uses when decisions involving allocation of the land were 
being made.
    Comments. There were 738 comments received on this proposed policy. 
Most supported the policy statement and suggested it be strengthened. 
For example, several respondents suggested the following language: 
``Therefore, when considering nonrenewal of recreation residence 
permits for an alternative use be sure that the value of the 
alternative public use is equal to, or exceeds the value of the 
existing recreation use.'' Other respondents opposed the provision, 
stating that it overstated the importance of the use and that such 
words as ``important'' implied that other uses were not important. It 
was suggested that the word ``equally'' be placed before the words 
``valid'' and ``important'' to provide better balance to the policy 
statement.
    Response. The Forest Service believes that recreation residences 
are a valid and important use of the National Forests. Equally, it 
believes that existing uses should be allowed to continue. The agency 
recognizes that there may be rare instances when a use is not 
consistent with a National Forest's Land and Resource Management Plan 
(Forest plan), and the recreation residence use must give way to an 
alternative public use. However, the overall policy stated in this 
section is appropriate to ensure that any decision to not allow a new 
permit for an established use to be issued must be fair and equitable 
and supported by careful analysis and documentation. The Forest Service 
is satisfied that the policy statement in FSM 2347.1 adequately 
establishes the appropriateness of the recreation residence use without 
the need for further clarification and will adopt the language as 
proposed.
    2. Conformity to the 1915 Term Permit Act. This topic is confined 
to one provision of the proposed policy. Proposed paragraph 2 of FSM 
2347.03 stated: ``Ensure that recreation residence use does not 
preclude the general public from full enjoyment of the natural, scenic, 
recreational, and other aspects of the National Forests as stipulated 
in the Act of March 4, 1915 (FSM 2701).'' This provision was placed in 
the proposed policy to emphasize this requirement of the 1915 Act and 
uses words from the Act. This provision was worded similarly in the 
1988 policy but placed in a different location. The provision was moved 
into the policy section in the 1991 proposal to give greater emphasis 
to the direction and thereby respond to the appeal decision's direction 
to make the policy neutral.
    Comment. There were 996 comments addressed to this provision of the 
proposed policy. The word ``ensure'' was the focus of nearly all of the 
comments. Respondents felt that use of this word, conveying certainty 
of action, changed the intent of the 1915 Act language and would lead 
Forest officers, upon determining any impact on ``full enjoyment,'' to 
conclude that the permitted use should not continue. (It should be 
noted that ``ensure'' was used in the provision in the 1988 policy.) 
Some respondents pointed out that it would be impossible for a Forest 
officer to ensure compliance with the Act. Other respondents stated 
that the provision in the 1915 Act was not intended to discourage 
continuation of the use. They pointed out that the Act does not 
establish priority of use (recreation residence versus other public 
uses), thus an equality, not an hierarchy, of use is implied.
    Response. The Forest Service agrees that the word ``ensure'' is 
inappropriate in this provision and that equality in the consideration 
of uses is required. Further, the agency finds that the location of a 
provision in FSM 2347.03 dealing only with recreation residences is not 
correct. The subject of Manual section 2347 is ``Non-commercial 
Recreation Use,'' a broad category encompassing privately built and 
owned structures of which recreation residences are but one. Also 
included in this category of use are private clubs and lodges, 
houseboats, boat docks and wharves, and shelters. All of these non-
commercial uses come under the guidance of the 1915 Act. The agency 
believes the guidance is appropriate but must be revised to reflect the 
broader scope of the FSM section. Therefore, the provision is retained 
but renumbered as paragraph 3 to reflect a more logical sequence of 
direction. The provision has been rewritten to remove ``ensure'' and to 
substitute ``non-commercial recreation sites'' for ``recreation 
residences.'' The reference to the 1915 Act is also removed to avoid 
redundancy, as this Act is cited in the list of authorities under which 
term special use authorizations can be granted (FSM 2701).
    3. Determination of Permit Renewal and Nonrenewal. The provisions 
of the proposed policy dealing with continuation of the recreation 
residence use, conversion to alternative public uses, and the analysis 
and decision-making process involved in these actions brought forth the 
largest number and most detailed comments. There were over 1,900 
comments directed to these policy provisions, many of which were very 
detailed, and offered lengthy revisions to the proposed policy. This is 
to be expected as these provisions are at the core of the appeal 
decision and are central to the holders' concern that they will be able 
to continue the use. For ease of analysis, the discussion is separated 
into the four parts of the proposed policy that cover this topic.
    a. Recreation Residence Continuance. The applicable direction is 
found at FSM 2347.03 and 2721.23e. The broad direction on continuation 
of the recreation residence use (paragraph 3, FSM 2347.03 of the 
proposed policy) stated: ``Continue to authorize those existing 
facilities now occupying National Forest land under special use 
authorization that (a) are consistent with management direction given 
in the Forest Land and Resource Management Plan, (b) are at locations 
where the need for an alternative public purpose has not been 
established, (c) do not constitute a material, uncorrectable offsite 
hazard to National Forest resources, and (d) do not endanger the health 
or safety of the holder or the public.'' The proposed policy's guidance 
on the decision to reissue the permit is found at FSM 2721.23e, 
paragraph 1 as follows: ``The Land and Resource Management Plan (Forest 
plan) provides direction for continuance of the recreation residence 
use (FSM 1920). As Forest plans are revised, recreation residence use 
shall be explicitly addressed in the plan through delineation of 
management areas and associated management area prescriptions (FSM 
1920).''
    Comment. There were 136 comments received on these two provisions 
of the proposed policy. The use of the Forest plan as the means of 
determining recreation residence continuance is the most significant 
departure the proposed policy makes from the 1988 policy. Most of the 
respondents were suspicious of this change, stating their concern about 
inconsistent or arbitrary local treatment of the residences, inability 
to participate in the decision-making process involving Forest plans, 
and the failure to use environmental analysis standards when amending 
or revising Forest plans.
    Respondents felt that the decision process on continuance was 
flawed because continuance was determined by whether the use was 
consistent with the Forest plan. They advocated a return to the process 
described in the 1988 policy which stated the decision to continue the 
use was to be made by a separate, free-standing analysis that did not 
depend on the language of the Forest plan. In the proposed policy, the 
consistency determination in the context of recreation residences would 
be made on the basis of a comparison to the land and resource 
allocations made in the Forest plan. If land allocated to the 
recreation residence use was consistent, the use could continue. If not 
consistent, the use would be analyzed to determine if it could be made 
consistent or must be removed in favor of the proposed action, or 
alternative public use.
    Other respondents described the policy provision allowing 
continuance of those existing facilities which ``. . . are at locations 
where the need for an alternative public purpose has not been 
established'' as a ``Pandora's box,'' since there are always 
alternative purposes. They were concerned that the direction provided 
no guidelines or criteria for use in weighing alternative uses of 
National Forest land and thus would allow decisions which were 
arbitrary and capricious. The respondents asked for a definition of 
alternative public purpose.
    Others opposed these provisions because they believed use of the 
phrase ``continue to'' biased the decision to offer a new permit.
    Finally, respondents felt that the determination of whether the use 
should continue based on a policy promulgated by the agency's 
Washington Office could result in arbitrary action by individuals 
removed from the issue as it should be addressed. They suggested 
instead that each location should be viewed on its own and not be part 
of a nationwide policy. Conversely, some respondents felt the proposed 
policy left too much up to the whims of local forest officials where 
decisions could be made arbitrarily and capriciously without regard to 
national policy.
    Response. The proposed policy significantly changed the 1988 
policy's direction in the way recreation residence continuance 
decisions would be made. Making the Forest plan the foundation for the 
decision to continue the use is a major departure from the ``analysis 
of continuance'' process set forth in 1988 policy. Most permit holders 
are not familiar with the forest planning process that produces the 
individual National Forest Land and Resource Management plan. In fact, 
many indicated they were unaware that a plan encompassing all 
activities on the National Forest existed. Those that were aware of the 
planning process often did not make the link between their permitted 
use and the broad guidance set forth in the plan.
    The agency recognizes the significance of this departure from 
previous policy. However, it must be guided by statutory authority and 
its own implementing direction. The National Forest Management Act of 
1976 requires the agency to use an integrated, interdisciplinary forest 
planning process to make the land and resource allocation decisions for 
each National Forest. Further, section 6 of the 1976 Act requires that 
all permits, contracts, and other instruments for the use and occupancy 
of National Forest System lands shall be consistent with the Forest 
plan. Thus, recreation residence use and continuance must be brought 
into compliance with that direction.
    Respondents' concerns that use of the Forest plan to guide permit 
continuance decisions or determining alternative public purposes 
reflects the lack of understanding of the planning process. The 
planning policy sets forth clear direction to involve all affected 
parties and the public when amending or revising a Forest plan. These 
requirements are emphasized in the proposed recreation residence policy 
which requires notification and involvement of holders and their 
representatives (FSM 2721.23h, paragraph 2). The agency believes that 
requirements that holders be involved in all actions affecting the 
recreation residence use are adequately covered in the policy and will 
not lead to inconsistent or arbitrary treatment of the use during 
Forest planning.
    Environmental analysis is the cornerstone upon which decisions by 
local agency officials rest. Agency policy on environmental analysis at 
FSM 1950 and FSH 1909.15 is clear and detailed. Actions which affect 
the Forest plan, including those which implement the plan must be 
supported by environmental documentation. Respondents concerns that the 
recreation residence use will be adversely affected through a process 
that they are not informed of or involved in must consider this policy 
in its entirety and recognize that long-established agency policy would 
not permit this to happen.
    Use of the term ``alternative public purpose'' in the proposed 
policy reflects the agency's recognition that the Assistant Secretary's 
appeal decision required decisions on continuance to be made in a 
neutral manner. The holders' desire for continued use cannot be 
considered superior to other public uses but must be judged in the 
context of the overall use of the land. The word ``alternative'' is 
intended to convey the concept of equality of use instead of 
superiority of one use over another. The agency recognizes that the 
recreation residence use must be considered equally when considering 
allocation of land and resources through the Forest planning process. 
On the other hand, it does not, indeed, it cannot, place the use at a 
higher level than other uses in the Forest planning process. It is the 
Forest planning process which defines and limits alternative public 
uses through allocation of land and resources. Alternative public uses 
can only be those which the Forest plan defines. Thus, the phrase is 
considered the most accurate way to portray the actions involved in 
recreation residence continuance and will be retained in the final 
policy.
    The agency rejects respondents' concerns that the term ``continue 
to'' in FSM 2347.03, paragraph 1, lends bias toward renewal of the 
permit. The term is fully consistent with policy stating that the use 
is a valid use of National Forest land. Further, it is limited by the 
language which follows in the provision.
    The agency also rejects respondents' objections to policy 
promulgated at the national level which cannot adequately address local 
conditions affecting the use, and, conversely, that such decisions 
should not be made by local officials. The proposed policy balances 
national policy on recreation residence use with a planning and 
decision-making process made at the individual National Forest level. 
This decentralized process is considered the most appropriate way to 
manage these Federal lands.
    Therefore, the agency will adopt the language of the proposed 
policy at FSM 2347.03, paragraph 3 (renumbered as paragraph 2 in the 
final policy), and FSM 2721.23e, paragraph 1, pertaining to continuance 
of the use unless the use is at a location where an alternative public 
purpose has been established through the Forest planning process. 
Paragraph 1, FSM 2721.23e, has been edited for clarity and consistency 
with the forest planning process.
    b. Use Consistent With Forest Plan. The proposed policy at FSM 
2721.23e, paragraph 2, provided guidance when making decisions on 
continuance of the use. It stated: ``Decisions to issue new recreation 
residence term permits following expiration of the current term permit 
require a determination of consistency with the current Forest plan. 
Make this determination by evaluating the extent to which continued 
recreation residence use adheres to the standards and guidelines 
contained in the management prescription for the appropriate management 
area. Address continuation of recreation residence use on a tract or 
group of tracts basis, not on individual sites.'' Subparagraph a then 
sets forth direction when recreation residence use was consistent with 
the current Forest plan. When the use was consistent with the plan, the 
use would continue, a new permit issued, and the decision to issue 
categorically excluded from environmental documentation, unless 
``extraordinary circumstances'' were present that would merit analysis 
of environmental effects. The procedural direction in FSH 41.23a 
provided detailed instructions on issuing new permits when the use was 
consistent with the Forest plan.

    Note: The 1991 proposed policy advised that the agency was 
currently revising its policies and procedures for complying with 
NEPA and that the adoption of final NEPA policy could affect the 
direction contained in the proposed policy relating to environmental 
analysis and documentation. The final NEPA policy was adopted on 
September 18, 1992 (57 FR 43180), and does affect this proposed 
policy.

    Changes in the recreation residence policy made necessary by the 
final NEPA policy are noted in the following discussion.
    Comment. There were 771 comments directed to this provision that 
gives guidance where recreation residence use is consistent with the 
Forest plan. While respondents favored the expedited process in issuing 
a new permit, nearly all stated some degree of opposition to the 
direction. Comments focused on the requirements for environmental 
analysis as the basis for a decision to continue the use, particularly 
the requirements relating to ``extraordinary circumstances.'' 
Respondents felt that recreation residences, having been in place for 
many years, do not cause significant environmental effects and the 
decision to issue a new permit should be categorically excluded from 
environmental documentation. Respondents also suggested that requiring 
environmental analysis was unnecessary, redundant, and costly. They 
suggested that the requirement be severely limited and each decision to 
prepare environmental documentation be reviewed by superior officials 
before being implemented.
    Respondents expressed concern that extraordinary circumstances, 
described in the notice as including the presence of threatened or 
endangered species or their critical habitat, flood plains, wetlands, 
archaeological sites, or historic properties or areas, were present in 
nearly every recreation residence tract, and thus would always trigger 
further environmental analysis even though the recreation residence has 
existed within such circumstances and without causing adverse impacts. 
Respondents pointed out that the fact the use was consistent with the 
Forest plan would be rendered meaningless because all uses would be 
subjected to an environmental analysis or environmental impact 
statement before a new permit could be issued. They felt that this 
requirement was too open-ended and discretionary and would allow 
generalities, such as open space, visual corridors, or general forest 
areas to be defined as extraordinary circumstances. They recommended 
that the presence of an assumed extraordinary circumstance should not 
in itself preclude continuation of the use, or create a presumption of 
inconsistency with the Forest plan, until analysis proves the 
circumstance to be truly extraordinary and continued recreation 
residence use a threat to the environment. One respondent suggested 
that extraordinary circumstances be limited to those which are new and 
did not exist in the period shortly before the time when a decision on 
continuance is to be made, and that the presence of endangered species, 
for example, in the area of recreation residences should not 
automatically trigger the preparation of an environmental analysis or 
impact statement.
    The direction in FSH 2709.11, section 41.23a, providing procedural 
direction on continuing the use and issuing a new permit, brought forth 
comments cautioning against ``useless and unnecessary EA or EIS 
studies.'' These respondents suggested that extraordinary circumstances 
should not automatically require preparation of environmental analyses. 
Other respondents suggested that the entire section 41.23a be removed 
since the guidance prejudges, skews and appears to bias the process.
    Response. The Forest Service agrees the proposed policy and 
procedures applicable when recreation residence use is consistent with 
the Forest plan is unnecessarily complex. It also agrees that 
situations under which extraordinary circumstances would apply to 
permit continuation are too broad and need refinement. When use is 
consistent, the policy should provide an expedited process resulting in 
a new permit. The Forest plan is the means by which environmentally 
sensitive areas are identified and managed. The presence of 
extraordinary circumstances should not force additional environmental 
documentation unless it is clearly established that a material adverse 
environmental effect could result by continuing the use.
    Accordingly, the agency has substantially revised the proposed 
policy at FSM 2721.23e, paragraph 2, and FSH 2709.11, section 41.23a. 
This revision recognizes the public comments and the final revised NEPA 
policy and procedures adopted by the agency in 1992. The NEPA policy 
substantially clarified previous policy for excluding actions from 
environmental documentation. Further, the agency has chosen to minimize 
its direction on environmental documentation in the final policy and 
guidance and instead refers to the NEPA policy found in FSH 1909.15.
    Briefly, recreation residence uses that are consistent with the 
Forest plan will, upon expiration of the current term permit, be issued 
a new term permit. The environmental documentation supporting the 
Forest plan will, in most cases, be sufficient for documenting the 
decision to continue the recreation residence use.
    When issuing new permits, a record of decision or decision notice 
and finding of no significant impact would be prepared only if the 
recreation residence use was not specifically approved in the Forest 
plan decision document. Issuance of a new permit is an implementation 
action of a Forest plan decision approving recreation residence use. 
The NEPA compliance requirement is fulfilled by the Forest plan 
environmental impact statement. Recreation residence use which has 
changed since being found consistent with the Forest plan would require 
further NEPA analysis and documentation. In most cases this analysis 
would cause the action to fall within a category of actions excluded 
from NEPA documentation.
    An exception to the above may occur if the environmental 
documentation supporting the decision to continue the recreation 
residence use is more than 5 years old at the time of permit 
expiration. This requirement is set forth in the agency's Environmental 
Policy and Procedures Handbook (FSH 1909.15, sec. 18.03) and is based 
on the Council on Environmental Quality's ``Forty Questions'' document.
    The action necessary to issue the new term permit would commence 
two years before permit expiration and the holder notified of the 
action. New permits that continue the use would contain updated clauses 
that reflect current Department of Agriculture regulations and other 
Federal, State, or county laws applicable to the area covered by the 
permit.
    Therefore, the agency is adopting final policy as described above. 
This is set forth at FSM 2721.23e, paragraph 1.
    c. Use Not Consistent With the Forest Plan--Project Analysis. The 
proposed policy at FSM 2721,23e, paragraph 2b, provided direction on 
action to be taken when the recreation residence use was not consistent 
with the Forest plan. Procedural guidance at FSH 41.23b described the 
procedure to follow in conducting a project analysis. The recreation 
residence use would be inconsistent when the lands currently authorized 
for recreation residence use are allocated to other public uses by the 
Forest plan. Continued recreation residence use would thus be 
inconsistent with new management prescriptions, standards and 
guidelines. This could occur when a Forest plan defines a management 
area of the National Forest for developed recreation use and an 
amendment to the plan changes this to threatened or endangered species 
habitat. The recreation residence use would then apparently be 
inconsistent with the new management area designation. In this case, a 
``project analysis'' would be prepared to determine whether the use 
could be accommodated along with the alternative public use, or must be 
removed upon permit expiration.
    The project analysis would identify a range of public uses 
consistent with the Forest plan direction, including consideration of 
continuing the recreation residence use, that would be compatible with 
the management area designation. If this analysis indicates the 
recreation residence use could continue, a decision would be made to 
issue a new permit upon expiration of the current permit. Since 
continuation of the use had been determined to be inconsistent with the 
Forest plan, the plan would have to be amended to accommodate the 
changed determination. If the analysis indicates that the use cannot 
continue, the holder would be notified that a new permit will not be 
issued upon expiration of the current permit. In this event, the holder 
would receive at least 10 years of continued occupancy from the date of 
notification and may be offered an alternative location, or in-lieu 
lot, for the use.
    Comment: There were 998 comments received on this provision of the 
proposed policy. Many respondents were concerned that use of the Forest 
plan to determine whether the recreation residence use should continue 
was inappropriate because the plan could never focus on the specific 
and different issues that a proper analysis of the use demands. Others 
felt that in reality the decision on recreation residences would be 
made in the plan and that the project analysis would only serve to 
verify that decision. They felt that the phrase in the provision 
``implement the new direction'' implied that a decision had already 
been made. They recommended this provision be eliminated since it 
assumes an inconsistency prior to a finding. Instead, they recommended 
that new management direction be ``reviewed'' to emphasize that the 
project analysis was not a sham.
    Nearly all of the respondents commenting on this provision of the 
proposed policy stated that the proper sequence of planning should have 
the project analysis prepared before the Forest plan is amended or 
revised and be the basis for the amendment or revision. This concern is 
the basis for respondents' recommendation that a determination of 
inconsistency be made only on the basis of a self-contained, site 
specific project analysis that follows all environmental analysis 
requirements. Respondents also expressed misgivings that the process 
called for in the provision conveyed a bias against the use.
    These concerns can be summarized by the comment of one respondent: 
``The 1988 policy required a specific environmental analysis for any 
decisions pertaining to `inconsistency' with the Forest plan. In the 
draft policy inconsistency is now decided within the Forest plan 
WITHOUT ANY EFFECTIVE RULES. This is just not reasonable and is 
unfair.''
    Several respondents expressed concern that recreation residence 
permit holders would not be involved in the actions leading to adoption 
of Forest plan amendments, or that their participation would not be 
sought until the basic decisions on land use had been made. They asked 
that permit holders be a part of the entire process.
    Comments on the procedural guidance in FSH 41.23b for completing 
project analyses focused on the addition of or emphasis on the factors 
and considerations to be included in the analysis. Several suggested 
recognition of environmental, economic and social costs of removing the 
recreation residences. Others recommended that cost/benefit analysis of 
removal be included in the analysis. Several respondents suggested that 
the standards and guidelines for the project analysis were 
substantially weaker in the proposed policy than those in the 1988 
policy and recommended that the earlier language be restored so that 
there was consistency between all National Forests. Many suggestions 
were received that could be used to edit and clarify the proposed 
guidance in FSH 41.23b.
    Response: The respondents to this section of the proposed policy 
did so under a distinct disadvantage. The proposed policy describing 
Forest planning, NEPA analysis, and public involvement processes 
affecting the recreation residence use was based on more complete, 
overall guidance set forth elsewhere in the Manual and Handbooks. The 
proposed direction for this specific use, therefore, was supplemental 
to that overall guidance. Respondents were not aware of or did not have 
access to this overall guidance. They sought to resolve their concerns 
or objections by recommending more complete descriptions of the 
processes or clarification of procedures relating to recreation 
residence continuance. Thus, many of the comments summarized above 
could be responded to by simply stating that the concern is thoroughly 
treated elsewhere in FSM or FSH.
    The agency is sympathetic to the respondents' dilemma. However, it 
disputes the contention that actions affecting recreation residences 
during forest planning occur without any effective rules to guide them. 
The rules (direction) are clear and thorough. The agency's dilemma is 
that its directives policy prohibits repetition and redundancy in 
manual and handbook material for the sake of emphasis or clarity. 
Direction guiding the forest planning process is found in FSM 1920.
    To resolve this dilemma, the agency has placed references at 
appropriate places in the final policy so that local agency officials 
and holders are aware of overall direction that influences the specific 
direction on recreation residence use. And, the agency believes that 
respondents' concerns about forest planning, consistency 
determinations, and applicability of NEPA, will be resolved as holders 
become more knowledgeable about the forest planning and environmental 
analysis processes. Most respondents acknowledged that the recreation 
residence use should be recognized in the Forest plan. Likewise, 
holders should recognize that it is in their interest to be involved in 
the forest planning process, not only to protect their interests in 
their recreation residences, but to demonstrate that they are part of 
the National Forest community and interested in its overall management. 
The Forest Service believes this final policy will encourage holder 
participation in the forest planning process.
    Agency policy on forest planning and NEPA evaluation does not allow 
a decision to remove recreation residences to be made by the Forest 
plan. The process for implementing a Forest plan, explained in FSH 
1902.12, requires that any use that appears to be inconsistent with new 
management direction must be analyzed and evaluated before any decision 
is made to discontinue that use. In section 2721.23e, paragraph 1b, of 
the final policy, the agency has clarified this point by revising the 
heading to read ``Use Apparently Not Consistent With the Forest Plan.'' 
This revision is intended to reinforce the point that an inconsistency 
determination does not result in removal of the use, only that such 
action is possible. A decision on removal of the use cannot be made 
until a project analysis is completed.
    Project analysis should not precede forest planning. The overall 
direction contained in a Forest plan is the foundation upon which all 
land and resource activities of the National Forest are based. The 
Forest plan promotes more integrated consideration of all land and 
resource management activities. The direction in the proposed policy 
providing for project analysis following implementation of the Forest 
plan and identification of apparent inconsistency remains unchanged in 
the final policy.
    Respondents' concerns that permit holders would not be involved in 
Forest planning is unfounded. Overall direction in FSM 1950, FSH 
1909.15, and 36 CFR Part 216 requires local Forest Service officials to 
seek the views of the public, including holders of authorizations to 
use National Forest land. Further, the direction in the proposed policy 
at FSM 2721.23h and FSH 2709.11, section 41.23b, paragraph 1 would 
require local officials to involve permit holders in activities 
involving Forest plan amendments and revisions, implementation of 
plans, and project analyses. The agency believes this direction is 
adequate to ensure holders' awareness of any action affecting their 
use. Thus, the proposed policy in this regard remains unchanged in the 
final policy.
    The guidance in section 41.23b has been selectively revised to 
recognize the suggestions of several respondents. The first sentence of 
the section has been rewritten to reflect that Forest plan amendment or 
revision does not necessarily make the recreation residence use 
inconsistent with new management direction. Rather, it reflects that 
continued use under the new management direction is uncertain and a 
site specific project analysis is required to verify the inconsistency. 
Paragraph 2 of this section of the proposed policy, titled ``Analysis 
Documentation'' and describing the content of the project analysis 
report and NEPA documentation, is revised in the final policy to 
require information on applicable resource conditions to be included in 
the report. Paragraph 3a(4), requiring a comparison of benefits and 
disadvantages of the proposed alternative public use and the recreation 
residence use, has been revised in the final policy to include 
consideration of the cost of removing the recreation residence.
    Paragraph 4 of FSH 41.23b of the proposed policy, describing the 
project analysis decision and documentation, has been extensively 
revised to clarify the process by which a decision is reached. Three 
possible decisions are outlined: (1) If the project analysis results in 
a decision to amend the Forest plan such that continued use will not be 
inconsistent with the proposed alternative use, a new term permit would 
be issued upon permit expiration; (2) if the project analysis results 
in a decision to amend the Forest plan such that the recreation 
residence use is in some degree inconsistent with the proposed 
alternative use but does not conflict with it, or the proposed 
alternative use can accommodate some or all of the recreation residence 
use, appropriate modifications would be made to the current permit and 
new term permits for the applicable lots would be issued; or (3) if the 
project analysis results in a decision that the recreation residence 
use remains inconsistent with the Forest plan and cannot be 
accommodated with the proposed alternative use, a decision would be 
made that the recreation residences are to be removed. This revision 
adds a third possibility to the project analysis decision where the use 
is in apparent conflict but can be accommodated with the proposed use.
    Paragraph 5 of FSH 41.23b, titled ``Decision Notification,'' 
presents the requirements to be followed in notifying holders and other 
interested parties of the project analysis decision. Two items are 
added to those listed in the proposed policy: (1) Notification of 
whether in-lieu lots will or will not be made available, and (2) 
notification that annual fees will be adjusted during the final 10 
years of use. The remainder of the paragraph has been edited for 
clarity.
    d. Project Analysis Decision Review. The proposed policy at 
2721.23e, paragraph 2c required the authorized officer to review a 
project analysis decision two years prior to permit expiration, if that 
decision was more than five years old. Handbook guidance at 41.23b, 
paragraph 6, described the procedure by which the project decision 
would be reviewed. The review would determine if changes in resource 
conditions required reconsideration of the decision. Holders and 
interested publics would be notified of the review. If the review 
indicated no change in resource conditions, the original decision would 
be implemented. If conditions had changed, a new project analysis would 
be made to determine use of the lot. A project analysis decision review 
would not be appealable.
    Comment. Few respondents commented on this provision although a 
similar provision at FSM 2721.23a, paragraph 11, raised a concern among 
several respondents that the holder would not have an opportunity to be 
heard in this review.
    Response. The project analysis decision review is intended to 
ensure that the actions which resulted in the decision remain 
applicable when the permit is about to expire since 8 to 10 years would 
have elapsed since the decision was made. This could prevent removal of 
a recreation residence when there is no longer a need for the 
alternative public use. The agency intends that the review be 
undertaken with the full knowledge and participation of the holder. It 
emphasizes that the direction in 2721.23e makes it clear that holder 
involvement in the review is required. The proposed policy is 
considered to be fully adequate and is adopted as final policy.
     e. Permit Decision Process (Diagram). The proposed policy, in 
Exhibit 01, section 41.23c, presented in diagrammatic form the process 
described in section 41.23a and b by which a decision is reached to 
continue the recreation residence use or convert the use to an 
alternative public use.
    Comment: Eight respondents identified problems with the chart. They 
pointed out that the process shown when a project analysis decision 
allows the recreation residence use to continue (even though it had 
been found to be inconsistent with the Forest plan), does not agree 
with the text describing that process. The respondents suggested that 
when the use is allowed to continue it should not be subject to further 
review and analysis. Instead, the use should be considered as 
consistent with the Forest plan and the decision process should move 
directly to issuance of a new permit. In terms of the diagram, the 
arrow from this box should move left to the line showing consistency 
with the Forest plan instead of downward to the box showing decision 
review.
    Response: The Forest Service agrees with these respondents and has 
revised the diagram accordingly. Readers should recognize, however, 
that revisions in the direction and procedural guidance for continuance 
and removal of the use, discussed earlier in this notice, have also 
required revisions to the chart. The diagram appears in the final 
policy as section 41.23c.
    4. Permit Issuance and Term. The proposed policy at FSM 2347.1, 
paragraph 3, and at FSM 2721.23a, paragraph 9, stated that permits for 
recreation residence use would be issued for a maximum of 20 years. 
Paragraph 10 of FSM 2721.23a provided direction for permit issuance 
following a decision to convert the lot to an alternative public use. 
In this event, the current term permit would be allowed to expire and a 
new term permit issued for up to 10 years to satisfy any additional 
time because of the 10-year notification requirement.
    Comment: There were 224 responses to these permit issuance and term 
provisions. Most respondents supported the 20-year term for recreation 
residence use, and the 10-year notification in case of conversion to an 
alternative public use. A few respondents preferred 30-year permits. 
Others objected to the 10-year notification with continued occupancy 
provision and the granting of additional time beyond the originally 
authorized term to satisfy notification requirements, stating that the 
holder accepted the original term and provisions, and should not 
receive these favorable considerations.
    Response: The Term Permit Act of March 4, 1915, authorizes terms up 
to 30 years. The Forest Service's long-standing policy has been to 
issue permits for 20-year terms, and if the use is to be terminated, 
the additional 10 years granted will keep the total length of the 
permit within the statutory limit. Also, specifying a maximum term of 
20 years provides local agency officials flexibility in establishing 
length of terms to accommodate local needs. For example, if the 
official wished to have all permits on an administrative unit expire in 
the same year for efficiency in administration, a term of 18 years may 
be needed to match terms of permits issued earlier. The agency does not 
agree to elimination of the 10-year notification requirement or the 
provision providing additional occupancy when the use is to be removed. 
The investment in the recreation residence and the length most have 
been in existence make the agency's policy on notification and tenure 
fair and equitable. Readers are reminded that the agency does not pay a 
permittee for the value of the improvements when a permit expires under 
its own terms and must be removed. The agency is satisfied that a 20-
year term for recreation residence term permits is appropriate and will 
adopt this provision in the final policy. However, to clarify that 
shorter terms may be dictated because of permit expiration and 
conversion of the lot to another public purpose, the provision is 
modified to reflect this exception to the 20-year term. This direction 
ensures compliance with the Assistant Secretary's appeal decision 
concerning indefinite tenure. This revised policy is also consistent 
with the final policy provisions requiring that decisions on 
continuance or removal of the use be based on the direction in the 
individual National Forest plan.
    5. Annual Fees in Event of Nonrenewal. The proposed policy at FSH 
2709.11, section 33.2, responded to the appeal decision's direction to 
reconsider the 1988 policy's direction for determining fees when a 
holder is placed on notice that a new permit will not be issued; that 
is, when the permit is placed on tenure. Three provisions in this 
section were examined in the proposed policy. The opening paragraph of 
this section stated that fees would be reduced 10 percent yearly during 
the 10-year notification period. This maintained the provision in the 
1988 policy. The second provision (numbered paragraph 1) provided that 
in the event the decision to remove the recreation residence was 
reversed and the holder was given a new 20-year term permit, the Forest 
Service would recover all fees foregone while the permit was under 
notice it would not be renewed. This changed the provision in the 1988 
policy which provided that 50 percent of the fees would be recovered. 
The third provision (numbered paragraph 2) provided that in the event 
of a reversed decision and a new permit was issued with a term of less 
than 10 years, fees foregone would not be recovered, but the fee would 
be reduced by 10 percent for each year the permit was under tenure 
notice (for example, fees for a 6-year tenure would be 60 percent of 
the full fee). This maintained the policy set forth in the 1988 policy 
provision.
    Comment: There were 84 comments on these provisions of the proposed 
policy. Most respondents asked that the 50 percent fee recovery 
provision of the 1988 policy be reinstituted. They stated that the 
market value of the use is reduced when permits are placed on tenure, 
and, as the agency is required by law to charge fees based on fair 
market value, the 50 percent recovery is more than fair because the 
recovery amount should be zero. Others pointed out that the Forest 
Service's explanation that no precedent could be found in the private 
market providing for 50 percent recovery and therefore requiring full 
repayment of foregone fees was true because the private market would 
not recover foregone fees. On the other hand, several respondents asked 
why a holder should be entitled to reduced fees since it is not common 
practice in the private real estate market for a lessor to reduce 
rental fees when not renewing a lease, especially when the improvements 
must be removed by the lessee. One respondent asked whether fees for 
permits under tenure were subject to the same annual index adjustment 
as permits not under tenure.
    Response: The agency decision in the 1988 policy to reduce fees 
when permits are placed on tenure was based on its understanding of 
common practice in the private real estate market. Reexamination of 
this question in view of the appeal decision does not provide 
information to contradict this earlier decision. The agency is not 
persuaded by respondents' statements contradicting its understanding of 
the private market. Therefore, the provision to reduce fees 10 percent 
for each year the permit is under tenure will be maintained in the 
final policy. (Section 33.2)
    The agency based its decision to recover all fees foregone when a 
new 20-year permit is given for a use formerly under tenure because it 
could not confirm this was a common practice in the private real estate 
market. It also received legal advice that it had no authority to 
forgive fees foregone in this instance. Upon reexamination of this 
issue for preparation of this final policy, it again was not able to 
confirm that not recovering fees foregone is standard practice in the 
private market. Thus, the agency will keep this provision in the final 
policy. (Section 33.2, paragraph 1)
    The agency is also maintaining the provision from the proposed 
policy that when holders with permits on tenure are given new permits 
with terms of 10 years or less past fees foregone are not recovered and 
fees for the new term are reduced 10 percent a year. Holders who 
receive an additional period of use but do not get a full 20-year term 
permit do not have the full value of the use and thus should not pay a 
full fee. This provision is adopted consistent with the provision to 
reduce fees when permits are placed on tenure. The second sentence of 
this provision has been edited to clarify its intent. (Section 33.2, 
paragraph 2)
    Readers should note that the third paragraph in this section, 
describing action to be taken when holders with permits on tenure are 
given new permits with terms of 10 to 20 years, was not revised in the 
proposed policy and remains identical to the language in the 1988 
policy. In this case, fees are to be recovered in full.
    6. Offering of In-Lieu Lots. The appeal decision faulted language 
in the 1988 policy that made the offering of in-lieu lots mandatory to 
holders who have received notification that a new permit would not be 
issued or whose permits have been terminated. (FSM 2347.1,6; FSM 
2721,23a,13; FSM 2721.23f; FSH 41.23c.)
    As explained in the 1991 notice of proposed policy, the intent of 
the 1988 policy was to make the offering of in-lieu lots discretionary. 
It was use of the word ``shall'' in one sentence of the policy that 
conveyed the impression that offering of in-lieu lots was mandatory. In 
addition, however, the appeal decision expressed concern that making 
in-lieu lots available to holders receiving notice that their use was 
to be terminated or that they would not receive a new permit limited 
agency management discretion in determining use of National Forest 
land. Therefore, each of the four provisions in the 1988 policy dealing 
with the offering of in-lieu lots was examined. As a result, the 4 
provisions dealing with in-lieu lots were revised in the proposed 
policy.
    The overall policy on offering in-lieu lots to holders who had been 
notified that a new permit would not be issued or whose permit was 
being terminated prior to expiration (except when the termination is 
for noncompliance) was stated at FSM 2347.1, paragraph 6, of the 
proposed policy. This provision directed agency officials to determine 
the availability of in-lieu lots for eligible holders. It described 
sites available for in-lieu lot purposes as those in nonconflicting 
locations in established recreation residence tracts within the 
National Forest containing the recreation residences to be removed or 
in established tracts in adjacent National Forests. Lots appropriate 
for in-lieu purposes were undeveloped lots within or adjoining 
established recreation tracts not needed for other public purposes and 
lots formerly occupied and now vacant. This provision also directed 
that new recreation residence tracts could not be established for in-
lieu lot purposes. This reversed the 1988 policy which stated new 
recreation residence tracts could be established for this purpose.
    Direction in FSM 2721.23a of the proposed policy, provided that in-
lieu lots could be offered when a recreation residence was destroyed or 
substantially damaged by flood, avalanche, or massive earth movement 
and the holder was not allowed to rebuild. The 1988 policy stated that 
every reasonable effort should be made to offer in-lieu lots in this 
event.
    The proposed policy in FSM 2721.23f, presented direction in cases 
of nonrenewal of permits and conversion of lots to alternative public 
purpose. It stated the lots may be offered if available and not needed 
for alternative public purposes. The 1988 policy provided that every 
reasonable effort should be made to offer the lots.
    The guidance in FSH 41.23c of the proposed policy, gave detailed 
procedures on the offering of in-lieu lots. The offer would be made 
when notice was given that a new permit would not be issued. If a lot 
became available within 12 months of the notification it could be 
offered then. Priority was to be given to lots in the same recreation 
residence tract or an expansion of that tract. Holders would be allowed 
90 days to accept the offer of an in-lieu lot and upon acceptance the 
lot would be reserved for that holder and a new permit issued. A fee 
would not be charged until construction of the improvements began. The 
lot reservation would expire if the holder failed to occupy the in-lieu 
lot on agreed upon schedule. Holders accepting offers could continue to 
use the current lot until the permit expired, but they should be 
prepared to move to the new lot 24 months prior to permit expiration. 
If accepted by the previous owner, the offer of an in-lieu lot would be 
extended to a new owner.
    The proposed Handbook guidance differed in several respects from 
the 1988 policy. The proposed guidance limited availability of lots to 
those becoming available to 12 months. Tracts could not be established 
specifically for in-lieu lot purposes. Holders were to be given a new 
permit when the offer of an in-lieu lot was accepted, a new 
requirement. Fees were to be charged when construction began rather 
than when improvement of the lot began, a clarification. Holders were 
to be prepared to move within 24 months of permit expiration rather 
than when the current use was removed, also a clarification.
    Comment. There were 359 responses to the in-lieu lot provisions of 
the proposed policy. Several respondents felt that the Assistant 
Secretary's appeal decision required only that the 1988 policy be 
changed to assure that the offering of in-lieu lots was not mandatory. 
Respondents overwhelmingly objected to the changes made by the proposed 
policy from the 1988 policy. Summarized, the respondents felt that the 
number of sites available for in-lieu lots available should be as large 
as possible and should include authority to establish new tracts for 
this purpose. The general belief was that a weak in-lieu lot program, 
when coupled with a policy of no new tracts for this purpose, would, 
through attrition, eventually lead to removal of all or most recreation 
residences. A much smaller number of respondents maintained that the 
offering of in-lieu lots should be discretionary and that no new tracts 
should be established for this purpose.
    Respondents also objected to the removal of the phrase ``every 
reasonable effort'' when directing local officials to provide in-lieu 
lots to terminated or nonrenewal permits. They felt that this subtle 
change in wording reversed long-standing Forest Service policy to offer 
in-lieu lots in nonconflicting locations. They recommended that the 
proposed policy be strengthened or the language of the 1988 policy be 
restored.
    Another group of respondents felt that the proposed policy ignored 
the Assistant Secretary's appeal decision. They felt that any lots 
available for in-lieu lots should be made available instead to the 
general public for recreation residences. Their view was that the 
holder whose permit expires and is notified that a new permit will not 
be issued acquires no more rights to available lots than any other 
member of the public and should not receive any preferential treatment. 
Generally, this group of respondents felt the entire policy of offering 
of in-lieu lots should be deleted but if retained should be limited 
strictly to lots available within existing recreation residence tracts.
    Responses to the proposed policy provision on in-lieu lot 
availability following destruction of the improvements by catastrophic 
event (FSM 2721.23a, paragraph 13) reflected a similar division of 
views as was found in the overall policy. Some felt allowing a holder 
to rebuild the improvements or to receive an in-lieu lot extends the 
use indefinitely and is contrary to the appeal decision. Others felt 
the proposed policy was not clear with regard to when rebuilding the 
improvements would be ``consistent'' with Forest plan. Several 
suggestions were made to clarify this provision. Many respondents 
commented on the inclusion of fire in the list of catastrophic events 
to which this provision applies. This had been suggested in the 
September 1989 Advance Notice of Proposed Policy. Respondents 
overwhelmingly opposed the listing of fire in this provision. They felt 
the risk of loss of the recreation residence from fire is inherent in a 
forest setting and thus should not be cause for permit termination.
    Respondents commenting on the proposed Handbook direction at FSH 
41.23c pointed out what they believed was more restrictive language 
than in the 1988 policy. Specifically, they cited the 12 month limit on 
offering an in-lieu lot, the 90-day limit on holders acceptance of the 
lot offer, and the requirement that occupancy of the in-lieu lot begins 
when construction begins.
    Response. The Forest Service does not agree that the reformulation 
of the in-lieu lot provisions of the 1988 recreation residence policy 
should be limited to the question of whether the offer is mandatory or 
discretionary. The appeal decision questioned the policy on offering of 
in-lieu lots and directed that all provisions of the policy dealing 
with this issue be stayed from implementation and reconsidered. The 
agency, in its September 1991 proposed policy, modified it to respond 
to the appeal decision's concern that the use was being perpetuated 
when in-lieu lots were offered.
    Under policy stated at FSM 2347.1, the agency affirms that 
recreation residences are a valid use of National Forest System lands 
and an important component of the overall National Forest recreation 
program. It also acknowledges that there may be circumstances, albeit 
very limited, where this use is not consistent with the overall 
management direction for the land and the recreation residence use must 
be converted to an alternative public use. When these circumstances 
occur, however, the agency believes that holders of these uses should 
not be subjected to the loss of the use if reasonable options are 
available to accommodate the use elsewhere. Thus, it is maintaining its 
long-established in-lieu lot provisions in the final policy.
    The agency does recognize that certain provisions in the proposed 
policy limited the scope of the 1988 policy and has reconsidered 
several provisions. In FSM 2347.1, paragraph 6, the first sentence is 
revised to read ``Although provision of an in-lieu lot is not required, 
make a reasonable effort to provide a lot to holders whose lots will be 
converted to an alternative public use and have received notification 
that new permits for those lots will not be issued, or who have 
received termination notices (except termination for noncompliance) 
(FSM 2721.23e).''
    The agency is maintaining the provision in the proposed policy that 
prohibited establishment of new tracts for in-lieu lot purposes. 
However, the agency points out that it is possible under the revised 
second sentence of this provision to expand a recreation residence 
tract in order to relocate the use to accommodate a change in land use. 
Such could happen when a river is designated as a Wild and Scenic River 
and recreation residences located a few feet from the riverbank are 
moved several hundred feet back from the river to accommodate public 
use along the riverbank. The third sentence of this provision is 
clarified to identify locations suitable for in-lieu lots to include 
undeveloped lands, and formerly developed and withdrawn recreation 
residence lots in or adjacent to established recreation residence 
tracts.
    The proposed policy at FSM 2721.23a, paragraph 13, describing 
action to be taken when a recreation residence is destroyed or 
substantially damaged by catastrophic event, is revised to clarify when 
improvements could be rebuilt or the permit terminated and in-lieu lot 
available.
    The proposed policy at FSM 2721.23f affirmed the overall in-lieu 
lot policy stated at FSM 2347.1, paragraph 6, in connection with the 
policy on continuation of recreation residence use. The language in 
this provision has been revised to be consistent with the overall 
policy.
    The language at FSH 2709.11, section 41.23c of the proposed policy 
provides the procedural guidance for implementing the overall policy on 
offering in-lieu lots. Paragraph one of this section limited the 
availability of lots for in-lieu lot purposes to 12 months following 
notification of the holder that a new permit would not be offered. The 
agency finds that this limitation is inconsistent with the policy 
requiring a 10-year notification to the holder. Lots which come 
available during that 10-year period should be available as in-lieu 
lots if not otherwise needed for other public purposes. Thus, the 
agency has restored the language of the 1988 policy as follows: ``If 
lots do not become available until later, offer them then.'' Paragraph 
3 allowed the holder 90 days from the date of a joint inspection to 
accept the offer of an in-lieu lot. This has been clarified to require 
both actions--arranging a joint inspection and providing 90 days to 
decide. The paragraph is also clarified to require the 90 day period to 
occur while access to the lot is possible. Paragraph 4 required that a 
new permit be issued when a holder accepts the offer of an in-lieu lot. 
The agency recognizes that his means the holder will have two permits 
for recreation residence use for a limited period of time. However, 
this provision has been kept in the final policy to be consistent with 
overall special use regulations which require all users of National 
Forest land to have a permit.
    The agency recognizes that a holder may pay annual fees on both 
permits if the current use is kept while the use on the in-lieu lot is 
being constructed. Thus, it has inserted guidance that a partial fee 
waiver under existing agency policy may be appropriate on the in-lieu 
lot.
    Readers are also advised that for consistency in terminology, the 
word ``lot'' replaces the word ``site'' throughout the policy when 
referring to in-lieu locations.
    7. Termination During Term of Permit. Three provisions of the 
proposed policy discussed actions to be taken when a recreation 
residence permit had to be terminated before its term expired. The 
overall policy at FSM 2347.1 listed four reasons for terminating a 
permit: (1) When it is in the public interest; (2) when there is an 
uncorrected breach of a permit provision; (3) when the site has been 
rendered unsafe by catastrophic events; and (4) when there is other 
cause as provided in 36 CFR 251.60. In adding this language, the 
proposed policy removed a provision of the 1988 policy that required 
termination actions to follow the same procedures established for 
permit continuation or nonrenewal. Termination actions would follow 
procedures for the four listed events, rather than for those procedures 
for continuance or nonrenewal as the 1988 policy provided.
    Direction at FSM 2721.23a, paragraph 16, of the proposed policy 
reflected revisions to the overall policy, stating termination could 
occur only in accordance with applicable regulations and the terms and 
conditions of the permit. It also required the authorized officer 
(Forest Supervisor) to submit a proposed termination for review by the 
next higher official (Regional Forester). This review would only 
examine the adequacy of the analysis and documentation. If deficient, 
the proposed action would be returned to the authorized officer for 
correction and reconsideration. This provision also proposed use of the 
term ``monies'' in place of ``appropriations'' as used in the 1988 
policy to describe the requirement that the Government must pay for the 
holders improvements if terminating a permit before expiration of its 
term, except when termination is the result of breach of the permit's 
provisions.
    The proposed policy at FSM 2721.23i gave direction only for 
termination actions resulting from noncompliance of the terms and 
provisions of the permit. It required written notice to the holder and 
a reasonable period to correct the violation. The action could be taken 
only if noncompliance continues after the holder receives notice and 
the period allowed for correction. This provision was nearly identical 
to the 1988 policy.
    Comment. There were 5 responses to these provisions of the proposed 
policy. Respondents felt the phrase ``in the public interest'' was 
vague and apparently confused the phrase with direction elsewhere in 
the proposed policy dealing with permit expiration and alternative 
public use. They felt that termination should occur only when covered 
by the Forest plan and other alternatives to removal of the use 
considered. Most of the respondents agreed that termination during the 
permit term should occur only when funds are available to purchase the 
improvements. They agreed that the word ``monies'' is preferable to the 
word ``appropriations.'' One respondent, however, felt that payment for 
the holder's improvements should be based on the cost of the 
improvements less depreciation.
    Commenting on the direction in FSM 2721.23a, paragraph 16, one 
respondent suggested that ``applicable regulations'' should be 
specified. Most of the respondents agreed that proposed termination 
actions by the Forest Supervisor should be reviewed by the Regional 
Forester but suggested that the standards for analysis and 
documentation for the proposed termination should be made clear.
    Response. Readers are reminded that the agency, in seeking 
consistency in policy terminology, has substituted the word revocation 
for the word termination when describing actions that end a permit 
before the end of the term specified in the permit. Further, the word 
termination is used to describe the cessation of a permit as a result 
of a fixed or agreed-upon event, which would include reaching the end 
of the term specified in the permit. With this in mind, readers are 
advised that revocation of the permit during its term and termination 
of the permit are two separate and distinct actions, each unrelated to 
the other. Revocation of the permit occurs when one of the four actions 
listed in FSM 2347.1, paragraph 5, is triggered. Revocation of the 
permit when in the public interest is not an action resulting from 
direction in the Forest plan. Rather, it results from an urgent and 
pressing need to reclaim the land for another public use before the 
action can be considered through the Forest planning process and the 
procedure for considering alternative public uses can be implemented. 
For example, the construction or relocation of a public highway may 
require removal of the recreation residence because the only feasible 
right-of-way is on land occupied by this use. Authority to revoke a 
permitted use before the permit term is completed is found at 36 CFR 
251.60. This citation is added to this provision in the final policy. 
It is the need to reclaim the land before completion of the permit term 
that requires the Government to pay for the improvements that must be 
removed.
    The Forest Service recognizes that an action to revoke a permit 
before completion of the term must be done under a procedure that 
ensures fairness and equity to the holder. It has revised paragraph 5 
in the final policy to clarify that revocation would occur only when 
there is an urgent need to use the lot and the forest planning process 
cannot be used.
    The agency also recognizes the concern of respondents that 
revocation actions be reviewed by a higher agency official. However, it 
must point out that to maintain the integrity of its current appeal 
regulations it cannot permit the higher level official to review a 
decision before it is made. When a Forest Supervisor's decision is 
appealed, the Regional Forester is the reviewing officer. The language 
in the proposed policy on review of revocation actions will be 
maintained in the final policy.
    The agency believes that use of the word ``monies'' is appropriate 
and will retain the term in the final policy. The agency does not agree 
that payment for the improvements be based on the holders cost less 
depreciation and will retain the method set forth in the term permit.
    Readers are advised that the procedure for revoking a permit when 
in the public interest and when the holder is found to be in 
noncompliance with the permit terms is set forth in part VIII of the 
term permit.

Revised Special Use Permit for Recreation Residences

    The Assistant Secretary's appeal decision voided certain clauses of 
the term special use permit used to authorize recreation residences on 
National Forest System lands and adopted with the 1988 policy. Holders 
who had been offered and accepted these permits in 1988 were notified 
by letter that the clauses were voided and temporarily removed from the 
permit and would be replaced upon adoption by the agency of a final 
reformulated policy. The voided permit provisions were: Part VI.C.2, 
part IX.B, C, D, and E, and part X.B. The October 10, 1991, notice 
displayed the term permit in its entirety with the affected clauses 
reformulated to be consistent with the revisions to the proposed 
policy.
    There were 346 comments received on the proposed permit. Nearly all 
of the responses were directed to permit clauses not affected by the 
appeal decision. The Federal Register notice explained that only policy 
provisions, and permit clauses, affected by the appeal decision were 
subject to review and reformulation. Hence, only those comments 
directed to permit clauses affected by the adoption of the final policy 
were considered in this analysis. These were considered with the 
comments made to the corresponding parts of the policy and procedural 
guidance.
    Permit clauses are derived from basic statutes, regulations, and 
policy. Thus, in reformulating the policy for administering recreation 
residences, the agency must also revise the permit that is derived from 
this policy. Changes made to the policy require corresponding changes 
to the permit. This has been done in the adoption of this final policy. 
The reformulated permit is printed in its entirety at the conclusion of 
this notice (Exhibit 1 to FSH 2709.11, section 54.1). Permit clauses 
revised as a result of the reformulation of the recreation residence 
policy as described in this notice are printed in italic. Readers are 
advised that holders of permits containing voided clauses will be sent 
new clauses or new permits upon adoption of this final policy. New 
permits will contain the revised clauses but are identical in all other 
respects to the permit accepted in 1988.

Revision of Dispute Resolution Provisions

    The October 10, 1991, Federal Register notice provided information 
on the agency's policy to resolve disputes concerning recreation 
residence permit administration (located at FSM 2721.23f in the 1988 
policy). It pointed out that revision of the Department of Agriculture 
administrative appeal regulations made on January 23, 1989 (54 FR 3342) 
created a conflict with the dispute resolution provisions adopted in 
the 1988 policy. Revision of these provisions, although not addressed 
in the appeal decision, was necessary.
    The proposed policy at FSM 2721.23h provided direction to reduce 
conflict between holders and the agency by providing holders with the 
opportunity to participate in an issue resolution process. Proposed 
paragraph 1 of this policy required agency officials to consult with 
holders and their representatives, where practicable, before issuing 
written decisions on permit administration in order to reach a common 
understanding and agreement. Proposed paragraph 2 encouraged holder 
involvement in the public involvement process for Forest planning, 
project analysis, and the permit issuance analysis process (FSM 
2721.23e). This paragraph also encouraged agency officials to meet with 
holders and their representatives to discuss and resolve issues prior 
to issuing a decision. Proposed paragraph 3 provided guidance on 
resolving actions that have been appealed, directing that the 
opportunities provided in the appeal regulations (36 CFR parts 217 and 
251) be utilized by the authorized officer to resolve the appeal issues 
by means other than review and decision on the appeal.
    The Forest Service has carefully considered the direction in the 
proposed policy in its preparation of this final policy and determined 
that it adequately conveys its intent to resolve disputes with holders 
on recreation residence permit administration. Therefore, it is 
adopting without change the direction in the proposed policy (FSM 
2721.23h).
    Readers are advised that further revisions to the appeal 
regulations occurred on April 13, 1993 (58 FR 19369). That revision 
encourages participation in the agency's public involvement processes 
by expanding opportunities for pre-decisional involvement of the public 
in Forest Service decisionmaking. A new part 215 was added to the 
regulations that would give the public opportunity to comment, prior to 
issuance of a final decision, on proposed actions that implement 
National Forest land and resource management plans. Parts 217 and 251, 
subpart C, of the regulations continue in effect. This final recreation 
residence policy at FSM 2721.23h was examined in light of the new 
appeal regulation and found to be consistent.

Clarification of Other Provisions of the Policy

    In the February 15, 1989, appeal decision, the Assistant Secretary 
directed the Forest Service to clarify procedures by which annual fees 
are determined for recreation residence use. Specifically, the agency 
was required to explain its rationale in adopting 3 components of the 
fee system: (1) Use of the period 1978-1982 as the base period for 
determining current fees, (2) Use of an index, the Implicit Price 
Deflator-Gross National Product (IDP-GNP), to adjust fees annually to 
current fair market value, and (3) Use of a factor of 5 percent applied 
to the appraised value to determine the annual fee.
    The Supplementary Information section of the October 10, 1991, 
Federal Register notice containing the proposed policy provided 
information on these three components of the fee policy. Readers were 
advised that the information was to be considered as supplemental, or 
background, information to the direction and procedural guidance 
appearing in the policy at FSM 2721.23d-Fee Determination and FSH 
2709.11, chapter 30, section 33, Recreation Residence Fees. The 
information in the notice emphasized that the agency is required to 
obtain fair market value for the use of the Federal lands. Fair market 
value is determined by appraisal or other sound business management 
practice, such as market analysis or competitive bid. Annual fees for 
recreation residences are determined by appraisal. A factor of 5 
percent is applied to the appraised value to determine the annual fee.
    There were 55 responses to this information, which generally 
supported the information presented. There was some disagreement with 
the use of 5 percent of appraised value to determine the annual fee, 
the respondents stating that the factor should be higher. Two 
respondents felt the Consumer Price Index (CPI) should be used instead 
of the IPD-GNP. Others felt the adjustment, as a national index factor, 
failed to recognize depressed local real estate market conditions. As a 
result, fees were escalating upward that should have been steady or 
declining.
    The Forest Service believes that the information presented in the 
notice accurately described the rationale used to develop the fee 
determination procedure in the 1988 policy, and that the information 
reflects current agency direction and policy. Therefore, the agency is 
adopting the explanation presented in the notice as its response to the 
appeal decision's direction to present the rationale for adopting the 
period 1978-1982 as the annual fee base period, the use of the IPD-GNP 
as the annual fee adjustment factor, and the use of 5 percent applied 
to appraised values to determine annual fees.
    Having considered the comments received in response to the October 
10, 1991, notice of proposed policy and having reconsidered the 1988 
recreation residence policy for consistency with applicable law and 
regulation, the Forest Service is adopting a revised recreation 
residence policy that it believes is fully responsive to the Assistant 
Secretary's appeal decision and to the concerns of holders and other 
interested parties. The full text of the recreation residence policy 
and procedural guidance containing the revisions described in this 
notice as it would appear in the Forest Service Directive System is set 
out at the end of this notice.
    Readers are advised that the current interim recreation residence 
policy will no longer be in effect upon adoption of this revised 
policy.

Controlling Paperwork Burdens on the Public

    This policy will not result in additional paperwork not already 
required by law or not already approved for use. Therefore, the review 
provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3507) and 
implementing regulations at 5 CFR 1320 do not apply.

Regulatory Impact

    This final policy has been reviewed under USDA procedures and 
Executive Order 12866 on Regulatory Planning and Review. It has been 
determined that this is not a significant rule. This rule will not have 
an annual effect of $100 million or more on the economy nor adversely 
affect productivity, competition, jobs, the environment, public health 
or safety, nor State or local governments. This rule will not interfere 
with an action taken or planned by another agency nor raise new legal 
or policy issues. Finally, this action will not alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients of such programs. Accordingly, 
this final policy is not subject to OMB review under Executive Order 
12866.
    Moreover, this final policy has been considered in light of the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.), and it has been 
determined that this action will not have a significant economic impact 
on a substantial number of small entities as defined by that Act. 
Entities affected by this policy are private individuals holding 
authorizations to use National Forest System lands for the purpose of 
constructing and maintaining a recreation residence. The requirements 
imposed by this final policy are the minimum necessary to protect the 
public interest, are not administratively burdensome or costly to meet, 
and are well within the capability of small entities to perform.

Environmental Impact

    Section 31.1b of Forest Service Handbook 1909.15 (57 FR 43180; 
September 18, 1992) excludes from documentation in an environmental 
assessment or impact statement ``rules, regulations, or policies to 
establish Service-wide administrative procedures, program processes or 
instructions.'' Based on consideration of the comments received and the 
nature and scope of this final policy, the agency has determined that 
this rule falls within this category of actions and that no 
extraordinary circumstances exist which would require preparation of an 
environmental assessment or environmental impact statement.

    Dated: April 4, 1994.
Jack Ward Thomas,
Chief.

Reformulated Recreation Residence Policy and Procedures

    Note: The Forest Service organizes its directive system by 
alpha-numeric codes and subject headings. Only those sections of the 
Forest Service Manual and Handbook that are the subject of this 
notice are set out here. The intended audience of this direction is 
Forest Service employees charged with issuing and administering 
recreation residence use authorizations.

Forest Service Manual

Chapter 2340--Privately Provided Recreation Opportunities

    2347--Non-Commercial Recreation Use. Section 2347-2347.12b set 
forth direction for special use authorization of privately built and 
owned structures on National Forest land. These structures are 
maintained for the use and enjoyment of holders and their guests. As 
recreation facilities, they are vacation sites and may not be used on a 
permanent basis (FSM 2721.23).
2347.03--Policy
    1. Management non-commercial recreation use sites in accordance 
with basic recreation policy in FSM 2303 as valid and important 
components of the overall National Forest recreation program.
    2. Continue to authorize those existing facilities now occupying 
National Forest land under special use authorization that (a) are 
consistent with management direction given in the Forest Land and 
Resource Management Plan (FSM 2721.23e), (b) are at locations where the 
need for an alternative public purpose has not been established, (c) do 
not constitute a material, uncorrectable offsite hazard to National 
Forest resources, and (d) do not endanger the health or safety of the 
holder or the public.
    3. Manage non-commercial recreation use sites in such a way that 
the general public is not precluded from full enjoyment of the natural, 
scenic, recreational, and other aspects of the National Forests (FSM 
2701).
    4. Deny applications for construction of new facilities except 
where they would replace similar existing facilities.
    5. Deny any proposal for commercial activity at permitted, non-
commercial recreation use sites.
    6. Require non-commercial recreation use holders to maintain their 
sites to protect the natural forest environment. Do not allow 
construction or placement of non-authorized facilities on these sites.
2347.1--Recreation Residences. (FSM 2721.23 and FSH 2709.11.)
    Recreation residences are a valid use of National Forest System 
lands. They are an important component of the overall National Forest 
recreation program and have the potential of supporting a large number 
of recreation person-days. They may provide special recreation 
experiences that might not otherwise be available. It is Forest Service 
policy to continue recreation residence use and to work in partnership 
with holders of these permits to maximize the recreational benefits of 
these residences.
    1. Administer recreation residence special use permits to ensure 
proper use of the lot for family and guest recreational purposes (FSM 
2347.11).
    2. Do not approve any new authorizations for full-time residences, 
except in special situations to provide caretaker or other similar 
services where there is a strongly demonstrated need (FSM 2347.12). Do 
not approve in-lieu lots for full-time residential use.
    3. Issue recreation residence term permits for a maximum of 20 
years in accordance with procedures in FSM 2721.23e and FSH 2709.11, 
sec. 41.23.
    4. Give holders at least 10 years written advance notice if a new 
permit will not be issued following expiration of the existing permit 
term (FSM 2721.23a).
    5. Revoke a recreation residence permit before expiration of the 
term of the permit when (a) it is in the public interest, particularly 
when the final decision authority does not rest with the Forest 
Service, (b) there is an uncorrected breach of a permit provision(s) 
(FSM 2721.23i), (c) the site has been rendered unsafe by catastrophic 
events such as flood, avalanche, or massive earth movement, or (d) when 
there is other cause as provided in 37 CFR 251.60. Revocation in the 
public interest should not be undertaken unless monies are available to 
pay for the holder's improvements and there is an urgent need to use 
the lot before the action can be considered through the Forest planning 
process resulting in a decision to convert to an alternative public 
use. When revoking a permit for any cause, give as much advance notice 
as possible (FSM 2721.23i).
    6. Although provision of an in-lieu lot is not required, make a 
reasonable effort to provide a lot to holders whose lots will be 
converted to an alternative public use and who have received 
notification that new permits for those lots will not be issued or who 
have received revocation notices (except revocation for noncompliance) 
(FSM 2721.23e). For this purpose, in-lieu lots must be in 
nonconflicting locations in or adjacent to established tracts within 
the National Forest containing the residences, or in or adjacent to 
established tracts on adjacent National Forests. Appropriate lots for 
consideration are undeveloped, formerly developed, and withdrawn lots 
in or adjacent to established recreation residence tracts and which are 
not needed in the foreseeable future for other public uses. Lots that 
are vacant because of noncompliance or other factors also may be 
considered as in-lieu lots. In-lieu lots should be comparable to the 
lots being converted to an alternative public use when possible, but 
authorized officials should advise holders that the Agency cannot 
guarantee that the available in-lieu lots will be entirely comparable. 
Do not establish new recreation residence tracts for in-lieu lot 
purposes. Offer in-lieu lots in accordance with the procedures in FSH 
2709.11, sec. 41.23c.
    2347.11--Preventing Unauthorized Residential Use. Prevent 
unauthorized full-time residential use by enforcing the terms of the 
special use permit. Continue to administer those recreation residences 
presently authorized as a principal place of residence in accordance 
with provisions of the special use permit. Upon transfer or sale of 
improvements, discontinue the residential use and authorize only 
recreation residence use.
2347.12--Caretaker Residences.
    2347.12a--Authority. Authorize caretaker use of a recreation 
residence with an annual permit, Form 2700-4, under the Act of June 4, 
1897. (Require applicants who currently have term permits to exchange 
them as a condition of obtaining the caretaker authorization.)
    2347.12b--Caretaker Residence Use. The need for a caretaker 
residence rarely can be justified where yearlong occupancy is already 
authorized in the tract. The Forest Supervisor may authorize a 
caretaker residence in limited cases where it is demonstrated that 
caretaker services are needed for the security of a recreation 
residence tract and alternative security measures are not feasible or 
reasonably available. The fees for caretaker residences shall be 25 
percent more than those charged for recreation residence use of a 
similar lot in the tract. A tract association may own caretaker 
residences.
    1. Authorize no more than one caretaker residence per recreation 
residence tract unless factors such as size and layout of the tract 
call for more than one. The affected tract association, or if there is 
no association, at least 60 percent of the affected holders, must 
document approval of request for a caretaker residence. Require the 
applicants for caretaker use to document the caretaker services they 
will provide.
    2. Do not authorize construction of a new residence for caretaker 
services. Issue the annual permit only for an existing residence. The 
permit must contain a provision that automatically terminates 
authorization for yearlong use in case of change in ownership.
    3. Coordinate applications for caretaker residence permits with 
local governmental agencies to avoid creating unreasonable demands or 
burdens for such services as snow plowing, mail delivery, garbage 
pickup, school bus, or emergency services.
    4. If a lot ceases to be used as a caretaker residence, issue a new 
term permit for recreation residence use to the holder, if qualified, 
or to the purchaser of the improvements.

Forest Service Manual

Chapter 2720--Special Uses Administration

    2721.23--Recreation Residence. the term ``recreation residence'' 
includes only those residences that occupy planned, approved tracts or 
those groups established for recreation residence use. See FSM 2347 for 
basic policy on recreation residence use.
    2721.23a--Administration. The following direction relates 
specifically to issuance and administration of special use permits for 
recreation residences. For recreation residence permits in Alaska, 
follow the additional requirements in section 1303(d) of the Alaska 
National Interest Lands Conservation Act. Administer recreation 
residence permits in accordance with the direction in sections 
2721.23a-2721.23i and within the broad policy governing recreation 
residences and permitted uses set forth in FSM 2347.1 and 36 CFR 
251.50.
    1. Issue special use permits for recreation residence use in the 
name of one individual or to a husband and wife. Upon issuance of a new 
permit that continues the use or amendment, revise authorizations that 
are not issued to an individual or to a husband and wife, so that the 
responsible person is identified.
    2. Issue no more than one recreation residence special use permit 
to a single family (husband, wife, and dependent children).
    3. Do not issue special use permits for recreation residence use to 
entities such as commercial enterprises, nonprofit organizations, 
business associations, corporations, partnerships, or other similar 
enterprises, except that a tract association may own a caretaker 
residence.
    4. To the extent possible, issue all recreation residence permits 
in a tract, or in logical groups of tracts, with the same expiration 
date.
    5. To help defray costs and provide additional recreation 
opportunities, a holder may obtain permission for incidental rental for 
specific periods. Ensure that rental use is solely for recreation 
purposes and does not change the character of the area or use to a 
commercial nature. Rental arrangements must be in writing and approved 
in advance by the authorized officer. The holder must remain 
responsible for compliance with the special use authorization.
    6. Allow no more than one dwelling per lot to be built. In those 
cases where more than one dwelling (residence/sleeping cabin) currently 
occupies a single lot, allow the use to continue in accordance with the 
authorization. However, correct such deficiencies, if built without 
prior approval, upon transfer of ownership outside of the family 
(husband, wife and dependent children).
    7. When a recreation residence is included in the settlement of an 
estate, issue a new special use permit for the remainder of the 
original permit term, updated to reflect policy and procedural changes, 
to the properly determined heir, if eligible. Prior to estate 
settlement, issue an annual renewable permit to the executor or 
administrator to identify responsibility for the use pending final 
settlement of the estate. When a recreation residence is sold, issue a 
new term permit to the buyer for the remainder of the original permit 
term, updated to reflect policy and procedural changes, if eligible.
    8. Specify in the permit that the recreation residence must be 
occupied at least 15 days annually, the minimum acceptable period of 
occupancy.
    9. Issue recreation residence term permits for a maximum of 20 
years, except when the need for a shorter term has been determined by a 
project analysis in accordance with FSM 2721.23e and FSH 2709.11, 
chapter 40.
    10. When a decision is made to convert the lot to an alternative 
use (2721.23e), take the following actions:
    a. Notify the holder of the reasons and provide a copy of the 
decision documentation.
    b. Allow at least 10 years of continued occupancy after 
notification.
    c. Allow the current term permit to expire under its own terms and 
if the holder is entitled to additional time to satisfy the 10-year 
notification period, issue a new term permit for the remaining period. 
Clearly specify any limited tenure by including the following statement 
in the permit:
    ``This permit will expire on (insert date) and a new permit will 
not be issued.''
    d. Issue term or annual permits for additional periods as needed to 
allow continuation of occupancy until conversion to the alternate 
public use is ready to begin.
    11. Before the Forest Supervisor issues a decision to convert a lot 
to an alternative public use, submit the proposed decision, supporting 
documentation and summary of public comments, to the Regional Forester 
for review for adequacy of the documentation and analysis. If analysis 
and documentation are inadequate to support the proposed decision or 
there is some other deficiency in the proposed decision, the Regional 
Forester shall instruct the Forest Supervisor to remedy the 
deficiencies and reconsider the proposed decision prior to making the 
final decision.
    12. As with any resource allocation made in a Forest plan, the 
Forest Supervisor may reconsider a decision to continue or convert 
recreation residence lots to an alternative public use at any time new 
or changed conditions merit such reconsideration.
    13. In the event a recreation residence is destroyed or 
substantially damaged by a catastrophic event such as a flood, 
avalanche, or massive earth movement, conduct and document an 
environmental analysis to determine whether improvements on the lot can 
be safely occupied in the future under Federal and State law before 
issuing a permit to rebuild or terminating the permit. Normally, an 
analysis should be completed within 6 months of such an event.
    Allow rebuilding if the lot can be occupied safely and the use 
remains consistent with the Forest Land and Resource Management Plan. 
If the need for an alternative public use at the same location has been 
established prior to the catastrophic event, do not allow rebuilding if 
the improvements are more than 50 percent destroyed. If rebuilding is 
not authorized, in-lieu lots may be offered as provided by FSM 2347.1, 
paragraph 6 and FSH 2709.11, section 41.23c.
    14. At the time permits are issued, advise holders that the terms 
of the permit require that they notify the Forest Service if they 
intend to sell their improvements and that they must provide a copy of 
the permit to a prospective purchaser before finalizing a sale. 
Whenever possible, the authorized officer should advise a prospective 
purchaser of the terms and conditions of the permit before a sale is 
final.
    15. Do not stay a fee increase pending completion of an appeal of 
the fee under the administrative appeal regulations. Make any 
adjustments resulting from the administrative review through credit, 
refund, or supplemental billing.
    16. During the term of a permit, terminate or revoke the use only 
in accordance with regulations at 36 CFR 251.60 and the terms and 
conditions of the permit (FSM 2347.1, para. 5). Except for revocation 
for noncompliance of terms of the permit, the Forest Supervisor shall 
submit proposed revocations, with supporting documentation and a 
summary of the public comments, to the Regional Forester for review 
prior to the Forest Supervisor's issuance of a decision. If analysis 
and documentation are inadequate to support the proposed decision or 
there is some other deficiency in the proposed decision, the Regional 
Forester shall instruct the Forest Supervisor to remedy the 
deficiencies and reconsider the proposed revocation prior to making the 
final decision.
    2721.23b--Applications. Insofar as practicable, notify a new or 
prospective owner of the requirement to make application for the 
authorization to use existing improvements in accordance with 36 CFR 
251.54.
2721.23c--Permit Preparation.
    1. Use the Term Special Use Permit for Recreation Residence (Form 
FS 2700-5a, FSH 2709.11, ch. 50), to authorize recreation residences, 
except as specified in paragraph 2 of this section.
    2. Use the Special Use Permit (Form FS-2700-4) when:
    a. Conversion of the lot to a alternative public use is authorized, 
the conversion will be delayed, and a minimum term of continued use 
cannot be predicted.
    b. Continuance of the recreation residence use is conditioned on 
the owner complying with specific Forest Service requirements before a 
term permit is issued.
    c. The improvements are managed by a third party pending settlement 
of an estate, bankruptcy proceedings, or other legal action.
    d. Yearlong occupancy is authorized by the Forest Supervisor, at 
which time the improvement ceases to be a recreation residence.
    3. In either permit, identify all authorized improvements 
associated with recreation residence use. Do not authorize use of more 
than the statutory maximum of 5 acres under a term permit. Authorize 
community or association-owned improvements, such as water systems, by 
a separate special use permit (Form FS-2700-4).
2721.23d--Fee Determination. (FSH 2709.11, ch. 30.).
    1. Use fair market value as determined by appraisal in determining 
the base annual rental fees for recreation residence lots. Redetermine 
the base fee at 20-year intervals.
    2. Adjust the fee annually by the annual (second quarter to second 
quarter) change in the Implicit Price Deflator-Gross National Product 
(IPD-GNP).
    3. Use professional appraisal standards in appraising recreation 
residence lots for fee determination purposes (FSH 2709.11.)
    4. Where practicable, contract with private fee appraisers to 
perform the appraisal.
    5. Require appraisers to coordinate the assignment closely with 
affected holders by seeking advice, cooperation, and information from 
the holders and local holder associations.
    6. Retain only qualified appraisers. To the extent practicable, use 
those appraisers most knowledgeable of market conditions within the 
local area.
    7. Before accepting any appraisal, conduct a full review of the 
appraisal to ensure the instructions have been followed and the 
assigned values are supported properly.

Forest Service Handbook 2709.11--Special Uses

Chapter 30--Fee Determination

33--Recreation Residence Fees
33.1--Base Fees and Indexing. Follow these procedures in determining 
the base (beginning) fee and subsequent fees under a 20-year cycle.
    1. As the initial base, use the fees established in one of the 
years between 1978 and 1982. The first year of the fee cycle is the 
first year of the established fee (disregarding any phase-in that may 
have been provided). Adjust the full base fee forward by applying the 
appropriate cumulative Implicit Price Deflator-Gross National Product 
(IPD-GNP) adjustment factor shown in exhibit 01. New fees for 1989, 
established in this manner, will be phased-in over a 4-year period 
(1989-1992) at the rate of one-fourth of the increase each year, except 
that fees will not be phased-in for those permits that limit fee 
adjustments to 5-year intervals.
    In those cases where there may not be a fee established for the 
1978-1982 period, Regional Foresters are authorized, subject to 
concurrence of the Chief, to utilize a different starting date and to 
adjust the length of the fee cycle so that all permits will have a new 
base fee determined during the 1998-2002 period.
    2. For 1990 through the last year of the fee cycle, adjust the fees 
on an annual basis by calculating the percentage change of the IPD-GNP 
index (as reported by the Bureau of Economic Analysis, Department of 
Commerce, in July of each year) from the second quarter of the previous 
year to the second quarter of the current year and applying this 
percentage adjustment factor to the current year's fees.
    For term permits that restrict adjustments to 5-year intervals, 
apply the IPD index adjustments cumulatively at 5-year intervals. At 
the end of the current 20-year term, or earlier if agreed to by the 
holder, revise permits to provide for annual indexing.
    3. Limit the annual fee adjustment for 1990 and thereafter to 10 
percent per year when the change in the IPD-GNP index exceeds 10 
percent in any one year. The index amount in excess of 10 percent will 
be carried over and applied to the fee for the next succeeding year in 
which the index factor is less than 10 percent.
    4. If a new permit is to be issued (FSM 2721.23a), re-appraise the 
lot toward the end of the 20-year cycle. Beginning in the twenty-first 
year (the first year of the next fee cycle; 1998 in the case of 1978 
fees), put into effect the base fee for the next 20-year cycle by 
applying 5 percent to the newly determined appraised market value of 
the lot for recreation residence purposes.
    5. In those few cases where one or more additional sleeping 
structures (guest cabins, and so forth) have been added to a single 
lot, add to the current adjusted base fee an additional charge equal to 
25 percent of the fee established for a single residence use of the lot 
or $100, whichever is greater, per structure.

                                                Exhibit 01, Sec. 33.1--IPD-GNP Adjustment Factor by Year                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                   Cum. 
                Base fee year                   1979     1980     1981     1982     1983     1984     1985     1986     1987     1988     1989     adj. 
--------------------------------------------------------------------------------------------------------------------------------------------------------
1978........................................    1.101    1.092    1.095    1.067    1.050    1.032    1.038    1.033    1.026    1.028    1.029    1.771
1979........................................  .......    1.092    1.095    1.067    1.050    1.032    1.038    1.033    1.026    1.028    1.029    1.609
1980........................................  .......  .......    1.095    1.067    1.050    1.032    1.038    1.033    1.026    1.028    1.029    1.473
1981........................................  .......  .......  .......    1.067    1.050    1.032    1.038    1.033    1.026    1.028    1.029    1.346
1982........................................  .......  .......  .......  .......    1.050    1.032    1.038    1.033    1.026    1.028    1.029    1.261
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Note: Cum. Adj.=Cumulative Adjustment.)                                                                                                                

    The above factors for fee years 1979-1986 were taken from Table 5, 
Price Indexes and the Gross National Product Implicit Price Deflator, 
as published in the Survey of Current Business by the Department of 
Commerce, Bureau of Economic Analysis, February 1986. These factors 
represent an annual rate, based on the percent change from the first 
quarter to the second quarter of the indicated year. The 1987 factor of 
1.026 is the percentage change in the IPD-GNP index from the second 
quarter of 1985 to the second quarter of 1986 as reported in the July 
1986 issue of ``United States Department of Commerce News,'' a 
publication by the Bureau of Economic Analysis. The IPD-GNP index for 
the second quarter of 1985 is 111.1. The 1988 and 1989 factors, were 
determined following the same procedures, using the appropriate year's 
publication. The factors for 1979-1989 in Exhibit 01 are shown only to 
illustrate how the cumulative adjustment factor used to establish the 
1989 fee is determined. The factor was determined by chain multiplying 
the factor for the years within the base fee year period (for 1982 this 
would be 1.050  x  1.032  x  1.038  x  1.033  x  1.026  x  1.028  x  
1.029 = 1.261.) See exhibit 02 for examples of applications.

Exhibit 02, Sec. 33.1--Examples of Use of IPD-GNP Table

    The following two examples illustrate use of the IPD-GNP adjustment 
factors in exhibit 01 in determining the 1989 fee:
    (1) Example 1. A fee of $412 that became established in 1982 (first 
year in the fee cycle) would be adjusted to $520 in 1989 ($412  x  
1.261). This would be the fee amount owed by a holder who does not 
accept the new term permit and would remain constant until the end of 
the five year adjustment period. If a new term permit is accepted, the 
fee would be phased-in, and the holder would be charged $439 for 1989, 
instead of the full amount.
    (2) Example 2. A 1980 base year fee of $315 would be adjusted to 
$464 ($315  x  1.473) with the actual 1989 charge limited to $352 for a 
new term permit. A holder who keeps the old permit would pay the full 
fee of $464 in 1989.
    Under both examples, factors for the years 1990 and thereafter will 
be determined in the same manner as the 1989 factor. Using the 1989 
factor as an example, the index for the second quarter of 1987 as 
reported in the July 1987 Bureau publication is 117.2; the index for 
February 1988 in the July 1988 Bureau publication is 120.6. The 
percentage change in the index to be used to determine 1989 fees is 
120.6 minus 117.2 divided by 117.2. Thus, 1989 fees will be 2.9 percent 
higher than 1988 for those permits that are indexed.
    Using the above two examples, calculation of the 1990 fees for 
those accepting new term permits would be as follows: (A 1990 IPD-GNP 
adjustment factor of 1.028 is assumed.)
    (1) Example 1. The full 1989 fee of $520 times the IPD-GNP index 
factor for 1990 of 1.028 equals $535, the full fee for 1990. The 
increase in the fee is $15. The amount of the 1989 fee increase to be 
phased-in in 1990 is $54 ($520-$412 = $108/2 = $54). Thus, the 1990 fee 
to be charged is the base 1982 fee of $412 + $54 + $15 = $484.
    (2) Example 2. The full 1990 fee equals $477, a fee increase of 
$13. The amount of the 1989 fee increase to be phased-in in 1990 is $75 
($464-$315 = $149/2 = $75). Thus, the 1990 fee to be charged is the 
base 1980 fee of $315 + $75 + $13 = $403.
    33.11--Fee Credits. In billing holders for fees, reduce the fee by 
the amount of any unused or remaining credits due holders under 
provisions of the Appropriations Acts for fiscal years 1983 through 
1986.
    33.2--Fees on Nonrenewal. When permits are placed on tenure (that 
is, a new special use permit will not be issued following expiration), 
the annual fee for the tenth year prior to the expiration date of the 
current permit becomes the base fee. The fee for each year during the 
last ten years is one-tenth of the base fee multiplied by the number of 
years then remaining on the permit. For example, charge a holder with 
nine years remaining 90 percent of the base fee; with eight years, 80 
percent; and so forth.
    Use the following schedule to calculate the holder's fee during the 
10-year period:

------------------------------------------------------------------------
                                                            Percent of  
            Years remaining on current permit               base fee to 
                                                              charge    
------------------------------------------------------------------------
10......................................................             100
9.......................................................              90
8.......................................................              80
7.......................................................              70
6.......................................................              60
5.......................................................              50
4.......................................................              40
3.......................................................              30
2.......................................................              20
1.......................................................              10
------------------------------------------------------------------------

    When a review of the decision to convert the lot to an alternative 
public use shows that changed conditions warrant continuation of the 
recreation residence, use the following fee determination procedures:
    1. If a new 20-year term permit is issued, the Forest Service shall 
recover the amount of fees foregone while the previous permit was under 
notice that the lot would be converted to an alternative public use. 
Collect this amount evenly over a 10-year period in addition to the 
annual fee due under the new permit. The obligation runs with the lot 
and shall be charged to a subsequent purchaser.
    The annual fee under the newly issued 20-year permit shall be the 
annual index adjusted fee computed as though no limit on tenure 
existed, plus the amount specified above until paid in full.
    2. If a 20-year term permit is not issued, and the occupancy of the 
subject lot is to be allowed to continue for less than 10 years (that 
is, authorized by a new permit for a specified term), do not recover 
past fees. Determine the fee for a new permit of less than 10 years by 
computing the fee as if notice that a new permit would not be issued 
had not been given, reduced by the appropriate percentage for the 
number of years of the extension (that is, a 6-year tenure period 
results in a fee equal to 60 percent of the base fee).
    3. If a 20-year term permit is not issued, and the occupancy of the 
subject lot is to be allowed to continue for more than 10 years 
(authorized by a new permit for a term of less than 20 years), the 
Forest Service shall recover fees as outlined in preceding paragraph 1, 
computed for the most recent 10-year period in which the term of the 
permit was limited.
    33.3--Appraisals. Use the following process to determine the fair 
market value of recreation residence lots.
    1. Use appraisals made by professional appraisers for determining 
the market value of the fee simple estate of the National Forest land 
underlying the lot subject to a special use permit, but without 
consideration as to how the authorization would or could affect the fee 
title of the lot (FSH 5409.12, ch. 6 for the standard contract to be 
used to establish fair market value of recreation residence lots).
    2. In consultation with affected holders, select and appraise 
typical lots (rather than all individual lots) within groups that have 
essentially the same or similar value characteristics. Within such 
groupings, adjust for measurable differences between the lots. (Once 
properly established, typical site classifications should rarely 
change.)
    3. Ensure appraised values are based on comparable market sales of 
sufficient quality and quantity that will result in the least amount of 
dollar adjustment to make them reflective of the subject lots' 
characteristics. Such characteristics include:
    a. Physical differences between subject lot and the comparable 
sales.
    b. Legal constraints imposed upon the market by governmental 
agencies.
    c. Economic considerations evident in the local market.
    d. Locational considerations of subject lot in relation to the 
market (sales) comparable.
    e. Functional usability and utility of the lot.
    f. Amenities occurring to the lot as compared with selected sales 
comparables.
    g. Availability of improvements (such as roads, water systems, and 
power lines) provided by nonholder entities, including the United 
States. Do not adjust for improvements furnished by holders.
    h. Other market forces and factors identified as having a 
quantifiable effect upon value.
33.31--Appraisers.
    1. Select fee appraisers who hold a current certification of 
competence from a nationally recognized professional appraisal 
organization. In the case of Forest Service appraisers, use those 
individuals who have received adequate training through professional 
appraisal organizations and who have satisfactorily completed the basic 
courses necessary to demonstrate competence.
    2. Require appraisers to sign a standard agreement that states:
    a. The approved appraisal format to be used.
    b. The approved standard forms to be used.
    c. A full, complete, and accurate definition of the appraisal 
problem.
    d. The standards of professional competence, ethics, and practice 
to which the appraiser shall adhere.
    e. Those requirements of the appraisal assignment that may be 
imposed under (1) statutes, (2) Federal regulations, (3) Forest Service 
policies and procedures, and (4) situations unique to the given 
appraisal assignment.
    3. Require appraisers to notify affected holders by mail and offer 
to meet with them to discuss the assignment, answer questions specific 
to the assignment, and seek advice, information, and cooperation from 
the holders and their local organizations. The appraiser must notify 
holders of such a meeting at least 30 days in advance of the meeting. 
Send notices to the address used for bills for collection. Use the 
notice to give the holders advance information on the appraisal 
assignment. At such meetings, require that the appraiser have available 
copies of the appraisal instructions, directions, and requirements for 
review by the holders. An appraisal cannot be made prior to the meeting 
with the holders.
33.32--Establishing Recreation Residence Lot Value.
    1. Upon receipt of the appraisal report, conduct a review of the 
appraisal in conformance with the standards of the National Association 
of Review Appraisers.
    2. Following review and acceptance of the appraisal, notify 
affected holders of Forest Service acceptance of the report. In the 
notification, inform holders that they and other interested parties 
have 45 days in which to review the appraisal. Upon request, provide 
copies of the report(s) and supporting documentation pursuant to the 
Freedom of Information Act.
    3. Upon request, provide an opportunity for affected holders to 
obtain, at their expense, an appraisal report from an appraiser holding 
at least the same or similar qualifications as the one selected by the 
Forest Service.
    a. The Forest Service shall provide holders with a copy of the 
standards used by the appraiser selected by the Forest Service and 
holders shall provide the standards to the holder-employed appraiser. 
The holder must require the observance of these standards, including a 
signed certification that ensures an understanding of the appraisal 
instructions and standards. Reject any appraisals that do not meet 
these standards.
    b. Subject the holder-furnished appraisal to the same review 
requirements as the appraisal obtained by the Forest Service.
    4. Give full and complete consideration to both appraisals. If the 
two appraisals disagree in value by more than 10 percent, ask the two 
appraisers to try and reconcile or reduce their differences. If the 
appraisers cannot agree, the Forest Supervisor will utilize either or 
both appraisals to determine the fee, unless a third appraisal is 
requested and accepted by the Supervisor.
    5. When requested, seek a third appraisal.
    a. The cost shall be shared equally by the holder and the Forest 
Service.
    b. This appraisal must meet the same standards of the first and 
second appraisals. The Forest Supervisor has discretion to accept or 
reject the third appraisal.

Forest Service Manual

Chapter 2720--Special Uses Administration

    2721.23e--Recreation Residence Continuance. See FSM 2347.1 for the 
general policy on recreation residence use. Follow the direction in 
this section and the procedures in section 41.23, FSH 2709.11 in 
determining whether recreation residence term permits may be issued for 
a new term at current sites. Exhibit 01, section 41.23c, FSH 2709.11, 
depicts the permit continuance process.
    The Land and Resource Management Plan (Forest plan) provides 
direction for continuance of the recreation residence use (FSM 1920). 
As Forest plans are revised, availability for recreation residence use 
shall be explicitly addressed in the plan through delineation of 
management areas and associated management area prescriptions (FSM 
1920).
    Decisions to issue new recreation residence term permits following 
expiration of the current term permit require a determination of 
consistency with the current Forest plan. Make this determination by 
evaluating the extent to which continued recreation residence use 
adheres to the standards and guidelines which apply to the appropriate 
management area. Address continuation of recreation residence use on a 
tract or group of tracts basis, not on individual lots.
    1. Use Is Consistent With Forest Plan. When recreation residence 
use is consistent with the Forest plan, it shall continue. If the use 
has been analyzed sufficiently as part of a EA or EIS completed within 
the 5 years prior to permit expiration, issue a new term permit upon 
expiration of the current term permit. Issue a record of decision or a 
decision notice and finding of no significant impact only if the use 
was not specifically approved in the appropriate decision document. If 
the use has changed and such change has not been analyzed sufficiently 
as part of a completed EA or EIS, complete the appropriate 
environmental analysis (FSH 1909.15). If the EA or EIS indicating the 
use is consistent with the Forest Plan was completed more than 5 years 
prior to permit expiration, additional environmental documentation is 
necessary (FSH 1909.15, sec. 18.03). Initiate action to issue a new 
term permit within 2 years prior to permit expiration.
    2. Use May Not Be Consistent With Forest Plan. When the lands 
currently authorized for recreation residence use are allocated to 
alternative public uses through amendment or revision of the Forest 
Plan, and continued recreation residence use may be inconsistent with 
standards and guidelines which apply to the appropriate management 
area, the Forest Supervisor shall conduct a project analysis of the 
alternative public use(s) (FSH 1909.15). This project analysis shall 
consider continuation of existing recreation residence use through 
appropriate modification of the term permit provisions or amendment of 
the Forest plan to accommodate the use, or discontinuation of the use 
(See FSM 2347.1 for recreation residence use continuance). Decisions 
reached by the project analysis must comply with NEPA requirements and 
are subject to appeal under Department of Agriculture appeal 
regulations at 36 CFR part 215 and 36 CFR part 251, subpart C.
    a. If the project analysis results in a decision to amend the 
Forest plan so that the recreation residence use may continue, modify 
the provisions of the current term permits as appropriate. New term 
permits can be issued following current permit expiration. Additional 
environmental documentation may be necessary (FSH 1909.15).
    b. If the project analysis results in a decision to convert a lot 
to an alternative public use at some point in the future, grant the 
holder at least 10 years continued use from the date of the decision, 
unless the continued use conflicts with law and regulation, and 
identify the specific alternative public use(s) for which the land is 
being recovered. As provided by FSM 2347.1, the authorized officer may 
allow continued use of the lot until such time as conversion of the new 
use is ready to begin by issuing a new permit for the remaining period 
and amending the Forest plan if needed.
    c. Review the project analysis decision two years prior to permit 
expiration to determine if there have been any changes in resource 
conditions that require another look at the decision. If the decision 
was made less than 5 years prior to permit expiration and the review 
shows that conditions have not changed, implement the project analysis-
based decision. Affirmation of such decision is not appealable (36 CFR 
251.83). If the decision was made more than 5 years from permit 
expiration and/or review indicates that resource conditions have 
changed, update the analysis to determine the proper action. Decisions 
arising from this new analysis are appealable.
    2721.23f--In-Lieu Lots. When new permits will not be issued 
following expiration of the present permit, make a reasonable effort to 
provide an in-lieu lot, if available, at locations not needed in the 
foreseeable future (generally, the period covered by the Forest plan) 
for alternative public uses in accordance with FSM 2347.1, paragraph 6 
and FSH 2709.11, section 41.23d.
    2721.23g--Land Exchange. Proposals to convey recreation residence 
tracts into private ownership by land exchange may be considered at any 
time. Such proposals must be processed in accordance with the 
instructions in FSM 5430 applicable to all land exchanges.
    2721.23h--Cooperation and Issue Resolution. Authorized officers 
shall strive to reduce conflict between holders and the Forest Service 
arising from permit administration. As necessary, specify a Forest 
Officer to work with the holders, their representatives, and other 
interested parties on specific issues.
    1. Provide opportunity for holders and their representatives to 
participate in issue resolution. Where practicable, except where an 
imminent hazard or risk to health and safety or resources requires 
immediate action prior to issuing written decisions related to permit 
administration, consult and meet in person, or by telephone, with 
holders and their representatives to discuss any issues or concerns 
related to the permit and to reach a common understanding and 
agreement.
    2. During Forest plan amendment or revision and project analysis, 
seek full involvement of holders and their representatives in public 
involvement opportunities and activities. Encourage and solicit their 
input and comments. Meet with holders and their representatives to 
discuss any issues or concerns arising in the planning and analysis 
processes and explore opportunities to resolve those issues prior to 
issuing a decision.
    3. If a decision is appealed, utilize the opportunities provided in 
the appeal rules (36 CFR part 215, part 217 and part 251, subpart C) to 
discuss the appeal with the appellant(s) and intervenor(s) (and/or 
their representatives) together or separately to explore opportunities 
to resolve the issue by means other than review and decision on the 
appeal.
    2721. 23i--Noncompliance. Give written notice and provide a 
reasonable opportunity for holder to correct special use permit 
violations before terminating the use for noncompliance with the permit 
conditions (36 CFR 251.60(e)). Revocation for noncompliance shall be 
only for a breach of a permit provision(s) that continues after notice 
and a reasonable opportunity for correction has been given (FSM 2347.1, 
para. 5).
    2721.23j--Lot Restoration. On expiration of a permit which will not 
be reissued or revocation or termination prior to expiration (FSM 
2721.23a(10), 2721.23a(16)), except for revocation in the public 
interest, require the holder to restore the property to a condition 
acceptable to the Forest Supervisor (36 CFR 251.60(j)). The holder may 
relinquish the improvements to the Forest Service upon approval of the 
Forest Supervisor. Terms and conditions for lot restoration are given 
in the term permit issued for recreation residences.

Forest Service Handbook 2709.11--Special Uses

Chapter 40--Special Uses Administration

41.23--Recreation Residence Use.
    41.23a--Permit Continuance. When a Forest plan is amended or 
revised and recreation residence use remains consistent with management 
direction given in the Forest plan, issue a new permit to the same 
holder in accordance with the following:
    1. Since recreation residences have been in place for many years, 
and experience in administering this use has shown that continuing the 
use does not cause significant environmental impacts, issuance of a new 
permit can be made without further environmental documentation (FSM 
2721.23e), except when the following situations are present:
    a. If the use has been analyzed sufficiently as part of an EA or 
EIS completed within 5 years of permit expiration, but not specifically 
addressed in a decision document, confirm the consistency of the use 
with the management direction in the Forest plan by issuing a record of 
decision or a decision notice and finding of no significant impact.
    b. If the use has not been analyzed sufficiently as part of an EA 
or EIS completed within 5 years of permit expiration, complete the 
appropriate environmental analysis and documentation (FSH 1909.15).
    c. If an EA or EIS indicating the use is consistent with the Forest 
plan was completed more than 5 years prior to permit expiration, 
additional environmental documentation may be necessary (FSH 1909.15).
    d. If there are changes in the use and the changed use has been 
analyzed sufficiently as part of an EA or EIS completed within 5 years 
of permit expiration and approved in the appropriate decision document 
no further action is required. If the changed use has not been analyzed 
sufficiently as part of a completed EA or EIS and approved in the 
appropriate decision document, environmental documentation may be 
necessary. Such documentation may be accomplished by categorical 
exclusion (FSH 1909.15).
    2. Initiate the analysis and action to issue a new permit 2 years 
prior to expiration of the current term permit and notify the holder of 
the outcome of the action.
    3. Ensure the current use is in full compliance with the terms of 
the permit before issuing the new term permit.
    4. Review and update the term permit provisions to ensure that the 
new permit contains those clauses necessary to comply with all current 
regulations of the Secretary of Agriculture and all present Federal, 
State, or county laws, regulations, or ordinances which are applicable 
to the area covered by the permit.
    41.23b--Project Analysis. When a Forest plan is amended or revised 
and consistency of the existing recreation residence use with new 
Forest plan management direction is uncertain, conduct a site specific 
project analysis to verify the new direction. Recognize that an 
inconsistency indicated by the Forest plan is not tantamount to 
recreation residence removal. Recreation residence use may continue by 
appropriate modification of the term permit provisions to recognize 
specific occupancy conditions, or by amendment of the Forest plan to 
accommodate the use (FSM 2721.23e.1.b).
    1. Public Involvement. During the project analysis process, 
encourage and solicit information, comments, and involvement from 
holders and other interested parties. Follow Forest Service public 
involvement procedures, including those associated with NEPA (FSM 1620, 
FSH 1900.12, and FSH 1909.15). Facilitate holder involvement by timing 
review periods as closely as possible to the recreation residence use 
season.
    2. Analysis Documentation. The project analysis record and 
appropriate NEPA compliance document must contain objective, detailed 
information regarding existing recreation residence use and other 
applicable resource conditions. The documentation must include a full 
range of alternatives that includes consideration for retention of some 
or all of the existing recreation residence use.
    3. Analysis Factors and Considerations.
    a. Lot use. Examine the relationship of the existing recreation 
residence use with the proposed alternative public use of the lot, 
including compatibility and conflict. Describe any current or 
anticipated conflicts between recreation residence use and the proposed 
use. Examine and describe the feasibility of other sites to meet the 
proposed use or how the proposed use could be provided for by modifying 
recreation residence use or by modifying the proposed use.
    Develop a range of alternatives that:
    (1) If possible, examine and describe ways to meet the proposed use 
without significant conflict with existing recreation residence uses 
and how potential conflicts can or cannot be mitigated.
    (2) Examine the feasibility of common, shared, or multiple use that 
includes recreation residences. Also examine the feasibility of 
adjusting lot and tract sizes, configurations and boundaries, or 
relocation of lot improvements to better accommodate such use.
    (3) Examine the feasibility of alternative sites for recreation 
residence use and for the proposed use.
    (4) Compare the benefits and disadvantages of the proposed use with 
the benefits and disadvantages of continued recreation residence use, 
including economic considerations, such as the cost of removing the 
use.
    (5) Examine the feasibility of using land exchanges to accommodate 
recreation residence and/or the proposed use.
    B. Other Resource Impacts. Show how recreation residence occupancy 
is compatible or in conflict with other National Forest System 
resources. Consider the applicability of section 106 of the National 
Historic Preservation Act and other Federal and State laws which may 
have an effect on these resources.
    c. Environmental Impacts. Discuss the environmental impacts of 
continued recreation residence use, together with the impacts of any 
improvements necessary for their continued use, compared with the 
impacts of the proposed use. Examine the environmental, economic, and 
social impacts of recreation residence use, the proposed use, and 
alternative public uses, particularly any necessary construction.
    4. Decision Issuance and Documentation.
    a. If the project analysis results in a finding that continued 
recreation residence use will not conflict with the proposed 
alternative public use, issue a decision to amend the Forest plan, and 
modify existing permits as appropriate. Issue new term permits for the 
applicable lots following permit expiration. The decision document 
shall summarize the conclusions regarding recreation residence use and 
provide a basis for the issuance of new permits.
    b. If the project analysis results in a finding that (1) the 
recreation residence use is in some degree inconsistent with the Forest 
plan but that continued use does not conflict with the proposed 
alternative public use, or (2) that the proposed use can accommodate 
some or all of the recreation residence use, issue a decision to amend 
the Forest plan and modify existing permits as appropriate. Issue new 
term permits for the applicable lots following permit expiration. The 
decision document shall summarize the conclusions regarding continued 
recreation residence use and delineate, as appropriate, which permits 
will not be continued and which will receive new term permits.
    c. If the project analysis results in a finding that recreation 
residence use remains inconsistent with the Forest plan and is not 
compatible with the proposed use, issue a decision that the recreation 
residences lots are to be removed and the lots converted to the 
proposed use.
    d. In addition to other requirements specified in FSH 1909.15, the 
decision document shall include the following:
    (1) The estimated time of conversion.
    (2) The reasons the recreation residence use is or is not 
compatible with the proposed use.
    (3) The reasons why the proposed use was chosen over others.
    (4) A summary of alternatives to the conversion, including the 
possibility of combining or sharing use with recreation residence use; 
adjusting lots or locations of improvements to better accommodate 
common or shared uses; and alternatives suggested by affected holders 
and other interested members of the public.
    (5) The reasons any conflict between the recreation residences and 
the proposed use cannot be resolved.
    (6) Cost effectiveness of the proposed use.
    5. Decision Notification.
    a. Notify holders and any interested parties of the decision and 
provide copies of the project analysis, NEPA documentation, any Forest 
plan amendment, and decision document as soon as possible after the 
decision along with notice of appeal rights under 36 CFR part 217 or 
part 251, subpart C.
    b. When lots will be converted to the proposed use and new permits 
will not be issued upon expiration of the present permits, provide with 
the decision notification:
    (1) Ten years or more notice that the lots will be converted to the 
proposed use (FSM 2721.23a). Normally, use the same conversion date for 
all affected holders in a particular group or tract.
    (2) Notice that the holder should refrain from making costly 
repairs, improvements, or expenditures except those that are necessary 
to protect holder and public health or safety.
    (3) Notice of whether in-lieu lots will or will not be made 
available, although the location of those in-lieu lots may not be known 
until permit expiration approaches.
    (4) Notice that fees will be adjusted in accordance with FSH 
2709.11, section 33.2.
    6. Project Analysis Decision Review. Two years prior to permit 
expiration (usually the 18th permit year), Forest Supervisors shall 
review project analysis decisions affecting those permits that are more 
than five years old to determine if there have been any changes in 
resource conditions that require reconsideration of the decision.
    For all reviews, the following apply:
    a. Reviews shall be objective, comprehensive, and in writing. New 
information, changed resource conditions, and new or changed land 
allocations made through the forest planning process shall be reviewed 
to determine if a new project analysis and/or additional NEPA 
compliance is needed.
    b. When initiating the review, notify affected holders and 
interested publics in writing and provide opportunity for involvement 
in accordance with Forest Service public involvement procedures.
    c. If review indicates that conditions have not changed, implement 
the decision.
    d. If review indicates that conditions have changed, initiate a new 
project analysis, including NEPA compliance, to determine future use of 
the lot(s).
    e. Notify affected holders and interested publics in writing of 
review findings, including notice that the result of the review is not 
appealable (36 CFR 251.83).
    41.23c--Permit Decision Process. Exhibit 01 depicts the procedure 
to be followed in determining whether the recreation residence 
authorization should be continued.
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    41.23d--In-Lieu Lots. Pursuant to FSM 2347.1, paragraph 6, in-lieu 
lots may be offered to holders who have received notice that their 
permits are being revoked for reasons other than noncompliance or that 
a new permit will not be issued following expiration of their existing 
permits because the lot is needed for an alternative public use. 
Identify and offer in-lieu lots in accordance with FSM 2347.1, 
paragraph 6 and FSM 2721.23f and follow these procedures:
    1. When available, offer in-lieu lots to holders at the time that 
notice is given that the lot will be converted to an alternative public 
use and a new permit will not be issued. If lots do not become 
available until later, offer them then.
    2. Give first priority to identifying and offering in-lieu lots in 
the same tract or an expansion of that tract, where feasible.
    3. Arrange a joint inspection of the in-lieu lot with the holder. 
Allow the holders 90 days from the date of the joint inspection of the 
in-lieu lot or 90 days from the final disposition of any appeals of the 
decision to convert the lot to an alternative public use, whichever is 
later, to accept or reject the offer. The 90-day period shall occur 
while access to the lot is possible.
    4. When holders accept such offers, issue a new permit and reserve 
the offered lots. Do not charge a fee until the holder begins 
construction of improvements on the lot. A partial waiver of fees for 
the in-lieu lot may be appropriate until the improvements are actually 
occupied. The lot reservation will expire upon holder's failure to 
begin construction on the in-lieu lot on a mutually-agreed upon 
schedule.
    5. Allow holders accepting offers to continue use of their current 
lots until the expiration date. Inform the holders that they should be 
prepared to move to the in-lieu lot during the 24 months prior to 
permit expiration, provided the supplemental review of the decision to 
convert the present lot to an alternative public use has been 
completed.
    6. The opportunity to develop an in-lieu lot, if accepted by the 
previous owner, shall be extended to the new owner, if eligible, when 
there is a change in ownership of authorized improvements.
    7. Do not offer in-lieu lots for revocation actions stemming from 
noncompliance with special use permit terms.

Forest Service Handbook 2709.11--Special Uses

Chapter 50--Terms and Conditions

54--Special Use Authorizations
    54.1--Term Special Use Permit for Recreation Residences. Use Form 
FS-2700-5a with all required clauses as set forth in exhibit 01.
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    Note: Permit clauses revised as a result of the reformulation of 
the recreation residence policy as described in this notice are 
printed in italics.

Terms and Conditions

I. Authority And Use And Term Authorized

    A. This permit is issued under the authority of the Act of March 4, 
1915, as amended (16 U.S.C. 497), and title 36, Code of Federal 
Regulations, sections 251.50-251.64. Implementing Forest Service 
policies are found in the Forest Service Directives System (FSM 1920, 
1950, 2340, 2720; FSH 2709.11, chap. 10-50). Copies of the applicable 
regulations and policies will be made available to the holder at no 
charge upon request made to the office of the Forest Supervisor.
    B. The authorized officer under this permit is the Forest 
Supervisor, or a delegated subordinate officer.
    C. This permit authorizes only personal recreation use of a 
noncommercial nature by the holder, members of the holder's immediate 
family, and guests. Use of the permitted improvements as a principal 
place of residence is prohibited and shall be grounds for revocation of 
this permit.
    D. Unless specifically provided as an added provision to this 
permit, this authorization is for site occupancy and does not provide 
for the furnishing of structures, road maintenance, water, fire 
protection, or any other such service by a Government agency, utility 
association, or individual.
    E. Termination at End of Term: This authorization will terminate on 
*____________. (insert date)

II. Operation and Maintenance

    A. The authorized officer, after consulting with the holder, will 
prepare an operation and maintenance plan which shall be deemed a part 
of this permit. The plan will be reviewed annually and updated as 
deemed necessary by the authorized officer and will cover requirements 
for at least the following subjects:
    1. Maintenance of vegetation, tree planting, and removal of 
dangerous trees and other unsafe conditions.
    2. Maintenance of the facilities.
    3. Size, placement and descriptions of signs.
    4. Removal of garbage or trash.
    5. Fire protection.
    6. Identification of the person responsible for implementing the 
provisions of the plan, if other than the holder, and a list of names, 
addresses, and phone numbers of persons to contact in the event of an 
emergency.

    Note: Forest Supervisors may include other provisions relating 
to fencing, road maintenance, boat docks, piers, boat launching 
ramp, water system, sewage system, incidental rental, and the Tract 
Association. Regional Foresters may add specific provisions that 
Forest Supervisors should include in the plan.

III. Improvements

    A. Nothing in this permit shall be construed to imply permission to 
build or maintain any improvement not specifically named on the face of 
this permit or approved in writing by the authorized officer in the 
operation and maintenance plan. Improvements requiring specific 
approval shall include, but are not limited to: Signs, fences, name 
plates, mailboxes, newspaper boxes, boathouses, docks, pipelines, 
antennas, and storage sheds.
    B. All plans for development, layout, construction, reconstruction 
or alteration of improvements on the lot, as well as revisions of such 
plans, must be prepared by a licensed engineer, architect, and/or 
landscape architect (in those states in which such licensing is 
required) or other qualified individual acceptable to the authorized 
officer. Such plans must be approved by the authorized officer before 
the commencement of any work.

IV. Responsibilities of Holder

    A. The holder, in exercising the privileges granted by this permit, 
shall comply with all present and future regulations of the Secretary 
of Agriculture and all present and future federal, state, county, and 
municipal laws, ordinances, or regulations which are applicable to the 
area or operations covered by this permit. However, the Forest Service 
assumes no responsibility for enforcing laws, regulations, ordinances 
and the like which are under the jurisdiction of other government 
bodies.
    B. The holder shall exercise diligence in preventing damage to the 
land and property of the United States. The holder shall abide by all 
restrictions on fires which may be in effect within the forest at any 
time and take all reasonable precautions to prevent and suppress forest 
fires. No material shall be disposed of by burning in open fires during 
a closed fire season established by law or regulation without written 
permission from the authorized officer.
    C. The holder shall protect the scenic and esthetic values of the 
National Forest System lands as far as possible consistent with the 
authorized use, during construction, operation, and maintenance of the 
improvements.
    D. No soil, trees, or other vegetation may be removed from the 
National Forest System lands without prior permission from the 
authorized officer. Permission shall be granted specifically, or in the 
context of the operations and maintenance plan for the permit.
    E. The holder shall maintain the improvements and premises to 
standards of repair, orderliness, neatness, sanitation, and safety 
acceptable to the authorized officer. The holder shall fully repair and 
bear the expense for all damage, other than ordinary wear and tear, to 
National Forest lands, roads and trails caused by the holder's 
activities.
    F. The holder assumes all risk of loss to the improvements 
resulting from acts of God or catastrophic events, including but not 
limited to, avalanches, rising waters, high winds, falling limbs or 
trees and other hazardous natural events. In the event the improvements 
authorized by this permit are destroyed or substantially damaged by 
acts of God or catastrophic events, the authorized officer will conduct 
an analysis to determine whether the improvements can be safely 
occupied in the future and whether rebuilding should be allowed. The 
analysis will be provided to the holder within 6 months of the event.
    G. The holder has the responsibility of inspecting the site, 
authorized rights-of-way, and adjoining areas for dangerous trees, 
hanging limbs, and other evidence of hazardous conditions which could 
affect the improvements and or pose a risk of injury to individuals. 
After securing permission from the authorized officer, the holder shall 
remove such hazards.
    H. In case of change of permanent address or change in ownership of 
the recreation residence, the holder shall immediately notify the 
authorized officer.

V. Liabilities

    A. This permit is subject to all valid existing rights and claims 
outstanding in third parties. The United States is not liable to the 
holder for the exercise of any such right or claim.
    B. The holder shall hold harmless the United States from any 
liability from damage to life or property arising from the holder's 
occupancy or use of National Forest lands under this permit.
    C. The holder shall be liable for any damage suffered by the United 
States resulting from or related to use of this permit, including 
damages to National Forest resources and costs of fire suppression. 
Without limiting available civil and criminal remedies which may be 
available to the United States, all timber cut, destroyed, or injured 
without authorization shall be paid for at stumpage rates which apply 
to the unauthorized cutting of timber in the State wherein the timber 
is located.

VI. Fees

    A. Fee Requirement: This special use authorization shall require 
payment in advance of an annual rental fee.
    B. Appraisals:
    1. Appraisals to ascertain the fair market value of the lot will be 
conducted by the Forest Service at least every 20 years. The next 
appraisal will be implemented in *________ (insert year).
    2. Appraisals will be conducted and reviewed in a manner consistent 
with the Uniform Standards of Professional Appraisal Practice, from 
which the appraisal standards have been developed, giving accurate and 
careful consideration to all market forces and factors which tend to 
influence the value of the lot.
    3. If dissatisfied with an appraisal utilized by the Forest Service 
in ascertaining the permit fee, the holder may employ another qualified 
appraiser at the holder's expense. The authorized officer will give 
full and complete consideration to both appraisals provided the 
holder's appraisal meets Forest Service standards. If the two 
appraisals disagree in value by more than 10 percent, the two 
appraisers will be asked to try and reconcile or reduce their 
differences. If the appraisers cannot agree, the Authorized Officer 
will utilize either or both appraisals to determine the fee. When 
requested by the holder, a third appraisal may be obtained with the 
cost shared equally by the holder and the Forest Service. This third 
appraisal must meet the same standards of the first and second 
appraisals and may or may not be accepted by the authorized officer.
    C. Fee Determination:
    1. The annual rental fee shall be determined by appraisal and other 
sound business management principles. (36 CFR 251.57(a)). The fee shall 
be 5 percent of the appraised fair market fee simple value of the lot 
for recreation residence use.
    Fees will be predicated on an appraisal of the lot as a base value, 
and that value will be adjusted in following years by utilizing the 
percent of change in the Implicit Price Deflator-Gross National Product 
(IPD-GNP) index as of the previous June 30. A fee from a prior year 
will be adjusted upward or downward, as the case may be, by the 
percentage change in the IPD-GNP, except that the maximum annual fee 
adjustment shall be 10 percent when the IPD-GNP index exceeds 10 
percent in any one year with the amount in excess of 10 percent carried 
forward to the next succeeding year where the IPD-GNP index is less 
than 10 percent. The base rate from which the fee is adjusted will be 
changed with each new appraisal of the lot, at least every 20 years.
    2. If the holder has received notification that a new permit will 
not be issued following expiration of this permit, the annual fee in 
the tenth year will be taken as the base, and the fee each year during 
the last 10-year period will be one-tenth of the base multiplied by the 
number of years then remaining on the permit. If a new term permit 
should later be issued, the holder shall pay the United States the 
total amount of fees forgone, for the most recent 10-year period in 
which the holder has been advised that a new permit will not be issued. 
This amount may be paid in equal annual installments over a 10-year 
period in addition to those fees for existing permits. Such amounts 
owing will run with the property and will be charged to any subsequent 
purchaser of the improvements.
    D. Initial Fee: The initial fee may be based on an approved Forest 
Service appraisal existing at the time of this permit, with the present 
day value calculated by applying the IPD-GNP index to the intervening 
years.
    E. Payment Schedule: Based on the criteria stated herein, the 
initial payment is set at $*__________ per year and the fee is due and 
payable annually on *__________ (insert date). Payments will be 
credited on the date received by the designated collection officer or 
deposit location. If the due date(s) for any of the above payments or 
fee calculation statements fall on a nonworkday, the charges shall not 
apply until the close of business of the next workday. Any payments not 
received within 30 days of the due date shall be delinquent.
    F. Interest and Penalties:
    1. A fee owed the United States which is delinquent will be 
assessed interest based on the most current rate prescribed by the 
United States Department of Treasury Financial Manual (TFM-6-8020). 
Interest shall accrue on the delinquent fee from the date the fee 
payment was due and shall remain fixed during the duration of the 
indebtedness.
    2. In addition to interest, certain processing, handling, and 
administrative costs will be assessed on delinquent accounts and added 
to the amounts due.
    3. A penalty of 6 percent per year shall be assessed on any 
indebtedness owing for more than 90 days. This penalty charge will not 
be calculated until the 91st day of delinquency, but shall accrue from 
the date that the debt became delinquent.
    4. When a delinquent account is partially paid or made in 
installments, amounts received shall be applied first to outstanding 
penalty and administrative cost charges, second to accrued interest, 
and third to outstanding principal.
    G. Nonpayment Constitutes Breach: Failure of the holder to make the 
annual payment, penalty, interest, or any other charges when due shall 
be grounds for termination of this authorization. However, no permit 
will be terminated for nonpayment of any monies owed the United States 
unless payment of such monies is more than 90 days in arrears.
    H. Applicable Law: Delinquent fees and other charges shall be 
subject to all the rights and remedies afforded the United States 
pursuant to federal law and implementing regulations. (31 U.S.C. 3711 
et seq.)

VII. Transfer, Sale, and Rental

    A. Nontransferability: Except as provided in this section, this 
permit is not transferable.
    B. Transferability Upon Death of the Holder:
    1. If the holder of this permit is a married couple and one spouse 
dies, this permit will continue in force, without amendment or 
revision, in the name of the surviving spouse.
    2. If the holder of this permit is an individual who dies during 
the term of this permit and there is no surviving spouse, an annual 
renewable permit will be issued, upon request, to the executor or 
administrator of the holder's estate. Upon settlement of the estate, a 
new permit incorporating current Forest Service policies and procedures 
will be issued for the remainder of the deceased holder's term to the 
properly designated heir(s) as shown by an order of a court, bill of 
sale, or other evidence to be the owner of the improvements.
    C. Divestiture of Ownership: If the holder through voluntary sale, 
transfer, enforcement of contract, foreclosure, or other legal 
proceeding shall cease to be the owner of the physical improvements, 
this permit shall be terminated. If the person to whom title to said 
improvements is transferred is deemed by the authorizing officer to be 
qualified as a holder, then such person to whom title has been 
transferred will be granted a new permit. Such new permit will be for 
the remainder of the term of the original holder.
    D. Notice to Prospective Purchasers: When considering a voluntary 
sale of the recreation residence, the holder shall provide a copy of 
this special use permit to the prospective purchaser before finalizing 
the sale. The holder cannot make binding representations to the 
purchasers as to whether the Forest Service will reauthorize the 
occupancy.
    E. Rental: The holder may rent or sublet the use of improvements 
covered under this permit only with the express written permission of 
the authorized officer. In the event of an authorized rental or sublet, 
the holder shall continue to be responsible for compliance with all 
conditions of this permit by persons to whom such premises may be 
sublet.

VIII. Revocation

    A. Revocation for Cause: This permit may be revoked for cause by 
the authorized officer upon breach of any of the terms and conditions 
of this permit or applicable law. Prior to such revocation for cause, 
the holder shall be given notice and provided a reasonable time--not to 
exceed ninety (90) days--within which to correct the breach.
    B. Revocation in the Public Interest During the Permit Term:
    1. This permit may be revoked during its term at the discretion of 
the authorized officer for reasons in the public interest. (36 CFR 
251.60(b.) In the event of such revocation in the public interest, the 
holder shall be given one hundred and eighty (180) days' prior written 
notice to vacate the premises, provided that the authorized officer may 
prescribe a date for a shorter period in which to vacate (``prescribed 
vacancy date'') if the public interest objective reasonably requires 
the lot in a shorter period of time.
    2. The Forest Service and the holder agree that in the event of a 
revocation in the public interest, the holder shall be paid damages. 
Revocation in the public interest and payment of damages is subject to 
the availability of funds or appropriations.
    a. Damages in the event of a public interest revocation shall be 
the lesser amount of either (1) the cost of relocation of the approved 
improvements to another lot which may be authorized for residential 
occupancy (but not including the costs of damages incidental to the 
relocation which are caused by the negligence of the holder or a third 
party), or (2) the replacement costs of the approved improvements as of 
the date of revocation. Replacement cost shall be determined by the 
Forest Service utilizing standard appraisal procedures giving full 
consideration to the improvement's condition, remaining economic life 
and location, and shall be the estimated cost to construct, at current 
prices, a building with utility equivalent to the building being 
appraised using modern materials and current standards, design and 
layout as of the date of revocation. If revocation in the public 
interest occurs after the holder has received notification that a new 
permit will not be issued following expiration of the current permit, 
then the amount of damages shall be adjusted as of the date of 
revocation by multiplying the replacement cost by a fraction which has 
as the numerator the number of full months remaining to the term of the 
permit prior to revocation (measured from the date of the notice of 
revocation) and as the denominator, the total number of months in the 
original term of the permit.
    b. The amount of the damages determined in accordance with 
paragraph a. above shall be fixed by mutual agreement between the 
authorized officer and the holder and shall be accepted by the holder 
in full satisfaction of all claims against the United States under this 
clause: Provided, That if mutual agreement is not reached, the 
authorized officer shall determine the amount and if the holder is 
dissatisfied with the amount to be paid may appeal the determination in 
accordance with the Appeal Regulations (36 CFR 251.80) and the amount 
as determined on appeal shall be final and conclusive on the parties 
hereto: Provided further. That upon the payment to the holder of the 
amount fixed by the authorized officer, the right of the Forest Service 
to remove or require the removal of the improvements shall not be 
stayed pending final decision on appeal.

IX. Issuance of a New Permit

    A. Decisions to issue a new permit or convert the permitted area to 
an alternative public use upon termination of this permit require a 
determination of consistency with the Forest Land and Resource 
Management Plan (Forest plan).
    1. Where continued use is consistent with the Forest plan, the 
authorized officer shall issue a new permit, in accordance with 
applicable requirements for environmental documentation.
    2. If, as a result of an amendment or revision of the Forest plan, 
the permitted area is within an area allocated to an alternative public 
use, the authorized officer shall conduct a site specific project 
analysis to determine the range and intensity of the alternative public 
use.
    a. If the project analysis results in a finding that the use of the 
lot for a recreation residence may continue, the holder shall be 
notified in writing, this permit shall be modified as necessary, and a 
new term permit shall be issued following expiration of the current 
permit.
    b. If the project analysis results in a decision that the lot shall 
be converted to an alternative public use, the holder shall be notified 
in writing and given at least 10 years continued occupancy. The holder 
shall be given a copy of the project analysis, environmental 
documentation, and decision document.
    c. A decision resulting from a project analysis shall be reviewed 
two years prior to permit expiration, when that decision and supporting 
environmental documentation is more than 5 years old. If this review 
indicates that the conditions resulting in the decision are unchanged, 
then the decision may be implemented. If this review indicates that 
conditions have changed, a new project analysis shall be made to 
determine the proper action.
    B. In issuing a new permit, the authorized officer shall include 
terms, conditions, and special stipulations that reflect new 
requirements imposed by current Federal and State land use plans, laws, 
regulations, or other management decisions. (36 CFR 251.64)
    C. If the 10-year continued occupancy given a holder who receives 
notification that a new permit will not be issued would extend beyond 
the expiration date of the current permit, a new term permit shall be 
issued for the remaining portion of the 10-year period.

X. Rights and Responsibilities Upon Revocation or Notification That a 
New Permit Will Not Be Issued Following Termination of This Permit

    A. Removal of Improvements Upon Revocation or Notification That A 
New Permit Will Not Be Issued Following Termination Of This Permit: At 
the end of the term of occupancy authorized by this permit, or upon 
abandonment, or revocation for cause, Act of God, catastrophic event, 
or in the public interest, the holder shall remove within a reasonable 
time all structures and improvements except those owned by the United 
States, and shall return the lot to a condition approved by the 
authorized officer unless otherwise agreed to in writing or in this 
permit. If the holder fails to remove all such structures or 
improvements within a reasonable period--not to exceed one hundred and 
eighty (180) days from the date the authorization of occupancy is 
ended--the improvements shall become the property of the United States, 
but in such event, the holder remains obligated and liable for the cost 
of their removal and the restoration of the lot.
    B. In case of revocation or notification that a new permit will not 
be issued following termination of this permit, except if revocation is 
for cause, the authorized officer may offer an in-lieu lot to the 
permit holder for building or relocation of improvements. Such lots 
will be nonconflicting locations within the National Forest containing 
the residence being terminated or under notification that a new permit 
will not be issued or at nonconflicting locations in adjacent National 
Forests. Any in-lieu lot offered the holder must be accepted within 90 
days of the offer or within 90 days of the final disposition of an 
appeal on the revocation or notification that a new permit will not be 
issued under the Secretary of Agriculture's administrative appeal 
regulations, whichever is later, or this opportunity will terminate.

XI. Miscellaneous Provisions

    A. This permit replaces a special use permit issued to: 
*____________________ (Holder Name) on *__________ (Date), 19* ____.
    B. The Forest Service reserves the right to enter upon the property 
to inspect for compliance with the terms of this permit. Reports on 
inspection for compliance will be furnished to the holder.
    C. Issuance of this permit shall not be construed as an admission 
by the Government as to the title to any improvements. The Government 
disclaims any liability for the issuance of any permit in the event of 
disputed title.
    D. If there is a conflict between the foregoing standard printed 
clauses and any special clauses added to the permit, the standard 
printed clauses shall control.

    Note: Additional provisions may be added by the authorized 
officer to reflect local conditions.

    Public reporting burden for this collection of information, if 
requested, is estimated to average 1 hour per response for annual 
financial information; average 1 hour per response to prepare or update 
operation and/or maintenance plan; average 1 hour per response for 
inspection reports; and an average of 1 hour for each request that may 
include such things as reports, logs, facility and user information, 
sublease information, and other similar miscellaneous information 
requests. This includes the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. Send comments 
regarding this burden estimate or any other aspect of this collection 
of information, including suggestions for reducing this burden, to 
Department of Agriculture, Clearance Officer, OIRM, room 404-W, 
Washington, DC 20250; and to the Office of Management and Budget, 
Paperwork Reduction Project (OMB #0596-0082), Washington, DC 20503.

[FR Doc. 94-13323 Filed 6-1-94; 8:45 am]
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