[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]
BILLING CODE 3410-11-M