[Federal Register Volume 61, Number 31 (Wednesday, February 14, 1996)]
[Rules and Regulations]
[Pages 5684-5685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3301]
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DEPARTMENT OF AGRICULTURE
Forest Service
36 CFR Part 223
RIN 0596-AA26
Sale and Disposal of National Forest System Timber; Appraisal
Procedures for Determining Fair Market Value
AGENCY: Forest Service, USDA.
ACTION: Final rule; technical amendment.
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SUMMARY: This technical amendment clarifies the appraisal procedures
for determining fair market value when appraising timber on National
Forest System lands for timber sale contracts. Currently, Forest
Service regulations at 36 CFR 223.60 indicate an analytical or residual
value appraisal procedure as the primary method for determining the
fair market value of timber sold on national forests. This technical
amendment removes the residual value appraisal procedure as the primary
method for determining fair market value. The intended effect of this
change is to clarify that the Chief of the Forest Service has the
flexibility to select appropriate appraisal methods for determining
fair market value of timber to be sold.
EFFECTIVE DATE: March 15, 1996.
FOR FURTHER INFORMATION CONTACT:
Rex Baumback, Timber Management Staff, (202) 205-0855.
SUPPLEMENTARY INFORMATION:
Background
The National Forest Management Act (16 U.S.C. 472a(a)) directs that
all timber sold from the national forests be sold at not less than its
appraised, or fair market, value. Under the current rule at 36 CFR
223.60, the basic procedure for determining fair market value is the
analytical or residual value appraisal method. However, the regulation
also
[[Page 5685]]
authorizes the use of other valid appraisal methods, as approved by the
Chief, including the transaction evidence method. The analytical or
residual value appraisal method determines fair market value by
subtracting all manufacturing and harvesting costs and an allowance for
profit and risk from the value received for the end products produced.
The transaction evidence appraisal method determines fair market value
based on the prices received for comparable sales of standing timber.
An Office of Inspector General audit (08627-3-SF, January 1986)
recommended implementation of transaction evidence appraisals in the
West. The audit found that implementing transaction evidence appraisals
would bring bid values closer to advertised values, increase stumpage
receipts, and reduce personnel costs. In response to this audit and
pursuant to the existing rule, the Chief has approved the transaction
evidence method for use in all Forest Service regions, except for
Alaska (Region 10).
The current regulation was developed when the residual value
appraisal method was the primary appraisal method used by all Forest
Service regions. This rule does not prohibit or suspend use of the
residual value appraisal method; it merely removes this method as the
preferred method for determining fair market value for all timber sale
contracts. Because of the narrow scope of this amendment, the Chief's
authorization of the use of the transaction evidence appraisal method,
and the growing use of that method of appraisal on timber sale
contracts, the agency finds that this amendment is a technical
amendment for which notice and comment pursuant to the Administrative
Procedures Act (5 U.S.C. 553) is not necessary. National Forest System
purchasers are aware of the agency's intention to use the transaction
evidence appraisal method as the preferred method. Moreover, purchasers
are familiar with other appraisal methods.
Regulatory Impact
This technical rule 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
any effect 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 rule is
not subject to OMB review under Executive Order 12866.
Moreover, this rule 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 this act.
Environmental Impact
This action falls within a category of actions excluded from
documentation in an Environmental Impact Statement and an Environmental
Assessment. 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.'' The agency's assessment is 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.
Controlling Paperwork Burdens on the Public
This rule does not require any recordkeeping or reporting
requirements or other information collection requirements as defined in
5 CFR 1320 not already approved for use and, therefore, impose no
additional paperwork burden on the public. Accordingly, the review
provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3507) and
implementing regulations at 5 CFR part 1320 do not apply.
List of Subjects in 36 CFR Part 223
Exports, Government contracts, National forests, Reporting
requirements, Timber sales.
Therefore, for the reasons set forth in the preamble, part 223 of
title 36 of the Code of Federal Regulations is hereby amended as
follows:
PART 223--SALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER
1. The authority citation continues to read as follows:
Authority: 90 Stat. 2958, 16 U.S.C. 472a; 98 Stat. 2213, 16
U.S.C. 618; 104 Stat. 714-726, 16 U.S.C. 620-620h, unless otherwise
noted.
Section 223.60 is revised as follows:
Sec. 223.60 Determining fair market value.
The objective of Forest Service timber appraisals is to determine
fair market value. Fair market value is estimated by such methods as
are authorized by the Chief, Forest Service, through issuance of agency
directives (36 CFR 200.4). Valid methods to determine fair market value
include, but are not limited to, transaction evidence appraisals,
analytical appraisals, comparison appraisals, and independent estimates
based on average investments. Pertinent factors affecting market value
also considered include, but are not limited to, prices paid and
valuations established for comparable timber, selling value of products
produced, estimated operating costs, operating difficulties, and
quality of timber. Considerations and valuations may recognize and
adjust for factors which are not normal market influences.
Mark A. Reimers,
Acting Chief.
[FR Doc. 96-3301 Filed 2-13-96; 8:45 am]
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