[Federal Register Volume 69, Number 1 (Friday, January 2, 2004)]
[Rules and Regulations]
[Pages 29-33]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-32243]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 223

RIN 0596-AB48


Sale and Disposal of National Forest System Timber; Extension of 
Timber Sale Contracts To Facilitate Urgent Timber Removal From Other 
Lands

AGENCY: Forest Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department is adopting regulations to provide authority 
for Regional Foresters to authorize Contracting Officers to extend the 
contract performance time on certain

[[Page 30]]

National Forest System (NFS) timber sale contracts to facilitate the 
harvest of damaged timber from private or other non-National Forest 
System (non-NFS) lands. These contract extensions will allow the 
expeditious removal of timber from lands in other ownerships damaged by 
catastrophic events beyond the landowner's control. Catastrophic events 
include, but are not limited to, severe wildfire, flood, insect and 
disease infestations, drought, and windthrow. This final rule also 
provides for adjustment of future periodic payment determination dates 
as an element of these contract extensions.
    The intended effects of this final rule are to promote the wise use 
and conservation of the Nation's natural resources, to reduce the 
threat to public safety and property due to fire and hazardous dead 
trees, and to improve protection of NFS lands from fire and disease 
that could otherwise develop on the damaged lands. The Forest Service 
timber sale contract provides additional contract time on undamaged 
(green) NFS timber sales to permit the purchaser to harvest damaged 
timber outside the sale area on NFS lands. However, without adoption of 
the previously published interim rule and this final rule, the Forest 
Service would not have the regulatory authority to provide additional 
contract time on NFS timber sales to permit the purchaser to harvest 
damaged timber from private or other non-NFS lands. This provides 
purchasers of NFS timber sales, who do not have mills, loggers and mill 
owners the opportunity to delay harvest of green sales while logging 
damaged timber on other ownerships. An urgent removal extension will 
not be approved for any NFS timber sale contracts on lands that contain 
dead or dying timber subject to rapid deterioration; where delayed 
harvesting will cause resource damage; or where extensions would delay 
the completion of needed projects, or adversely impact the harvest of 
damaged NFS timber, or in any other manner adversely impact the 
management of NFS lands.

EFFECTIVE DATE: This final rule is effective February 2, 2004.

FOR FURTHER INFORMATION CONTACT: Rex Baumback, Forests and Rangelands 
Management Staff, (202) 205-0855.

SUPPLEMENTARY INFORMATION: 

Background

    In order to facilitate the expeditious removal of timber in other 
ownerships damaged by catastrophic events beyond the landowner's 
control, the Forest Service promulgated an interim rule at Sec. Sec.  
223.50 and 223.53 of Title 36 of the Code of Federal Regulations and 
requested public comment on November 21, 2002 (67 FR 70165). The 
comment period ended January 21, 2003. The interim rule provided 
authority for Regional Foresters to authorize Contracting Officers to 
extend the contract performance time on certain National Forest System 
(NFS) timber sale contracts and to delay periodic payments on the 
extended contracts. This final rule incorporates revisions to Sec.  
223.53 in response to comments received on the interim rule. Section 
223.50 of the interim rule is adopted in entirety in the final rule.
    Periodically, catastrophic events such as severe drought 
conditions, insect and disease outbreaks, wildfires, floods, and 
windthrow occur on forested lands within, or near, NFS lands. As a 
result of such catastrophic events, substantial amounts of private and 
other public timber may be severely damaged. This damaged timber must 
be harvested within a relatively short time period to avoid substantial 
losses due to deterioration in both the quantity and quality of the 
timber. The critical time period for harvesting this damaged timber and 
avoiding substantial deterioration varies with the season of the year, 
the species of timber, the damaging agent, and the location of the 
damaged timber. In most cases, substantial deterioration can be avoided 
if the damaged timber is harvested within 1 year of the catastrophic 
event. The number of wildfires, and the extent of damage to public and 
private forested land experienced in the last few years, has resulted 
in renewed requests by forest products companies and forest industry 
associations for the Forest Service to adjust its contracting 
procedures to support expeditious removal of damaged timber on non-NFS 
lands.

Regulatory and Administrative Framework

    The National Forest Management Act of 1976 (16 U.S.C. 472a(c)) 
provides that timber sale contracts with an original term of 2 years or 
more shall not be extended unless the Secretary finds that the 
purchaser has diligently performed in accordance with an approved plan 
of operations or that the substantial overriding public interest 
justifies an extension. These related requirements are set out at Sec.  
223.115.
    The Forest Service timber sale contract provides additional 
contract time on undamaged (green) NFS timber sales to permit the 
purchaser to harvest damaged timber outside the sale area on NFS lands. 
However, without adoption of the previously published interim rule (67 
FR 70165) and this final rule, the Forest Service would not have the 
authority to provide additional contract time on NFS timber sales to 
permit the purchaser to harvest damaged timber from private or other 
non-NFS lands.

Impediments to Timely Harvest

    When significant catastrophic events occur on non-NFS lands, timber 
sale purchasers often do not have the personnel, equipment, or mill 
capacity to take on new contracts because all of their resources are 
committed to NFS contracts. Thus, landowners who have suffered from 
catastrophic events may be unable to find available loggers, buyers, 
and mill capacity to remove damaged timber before it deteriorates.

Risks and Benefits Associated With Removal of Damaged Timber

    Damaged timber can provide a source of highly flammable fuel for 
future wildfires, with inherent risks to public safety and property as 
well as to resource values of any nearby NFS lands. Damaged timber can 
also provide a habitat conducive to the development of insect 
infestations and subsequent diseases that could threaten nearby 
undamaged (green) timber stands on private, NFS, or other public land.

Summary of Public Comments

    Comments were received on the interim rule from four timber sale 
purchasers, four timber industry associations, one association that 
represents State Foresters, and three State governments. All 
respondents strongly supported urgent removal extensions, and all but 
four recommended clarifications to improve the rule. A summary of the 
comments and the Department's response follows:
    General comments. Two respondents suggested that guidance be 
provided in the rule, or in Forest Service Manual and Handbook 
direction, to assure that the Forest Service implements the rule as the 
Department intends. Specifically, the respondents were concerned that: 
(1) The rule was not specific enough for purchasers to determine with 
certainty, in advance of purchasing non-NFS timber sales, the 
likelihood of getting needed extensions of Forest Service timber sales; 
(2) the Forest Service may not approve urgent removal extensions in a 
timely manner, once salvage sales on non-NFS lands are purchased; and 
(3) the Forest Service may interpret the provisions of Sec.  
223.53(d)(1)-(4) of the interim rule so broadly that few sales will be 
eligible for an urgent removal extension.
    Response. The Forest Service will address these issues in the 
Forest

[[Page 31]]

Service Handbook (FSH) 2409.15, Timber Sale Administration. The FSH 
direction will require the Regional Forester and the Contracting 
Officer to act promptly in response to urgent removal extension 
requests. The FSH direction will require that the Regional Forester 
evaluate the size and scope of an event and the impact on the loggers 
and mill capability to be able to log National Forest green sales 
without adversely impairing the harvesting of the damaged timber on 
private lands. Direction in FSH 2409.15 will also provide that 
purchasers who submit the required documentation may request a 
determination of whether their sales qualify for urgent removal 
extensions prior to purchasing non-NFS timber.
    Even though a catastrophic event has occurred and the Regional 
Forester has authorized urgent removal extensions, Sec.  223.53(d)(1) 
does not entitle a purchaser to an extension unless the harvest of the 
NFS timber within the contract term will impede the removal of damaged 
non-NFS timber. In response to respondent concerns regarding Sec.  
223.53(d)(2)-(4), the Chief has already made an overall determination 
at Sec.  223.53(a) that it is in the substantial, overriding public 
interest to grant urgent removal extensions where a need exists.
    Comments on contract extension length. Seven respondents suggested 
that limiting extensions to a maximum of 1 year and allowing only one 
urgent removal extension may not be sufficient due to unforeseen 
events, such as additional catastrophic damage, poor operating 
conditions, and appeals and protests.
    Response. The Department agrees that subsequent catastrophic events 
may justify additional urgent removal extensions. Other events, such as 
interruptions of operations due to appeals and litigation, may justify 
additional contract time under existing authorities and contract 
provisions. The Department believes that it is clear in Sec.  223.53(b) 
that the 1-year limitation applies only to the events that led to the 
Regional Forester's determination. Section 223.53(d)(3) of the rule has 
been modified to make it clear that additional urgent removal 
extensions may be granted if there are subsequent Regional Forester 
determinations related to other catastrophic events.
    Comments on required documentation. Six respondents stated that the 
requirement for purchasers to document that manufacturing facilities or 
logging equipment capacity available to a purchaser are insufficient to 
provide for both the rapid salvage of damaged non-NFS timber and 
continued harvest of undamaged (green) NFS timber under contract with 
the Forest Service (Sec.  223.53(c)(2)) is overly burdensome and 
redundant with the requirement for the Regional Forester to determine 
that there is an adequate cause for urgent removal extensions.
    Response. The Department disagrees. The Regional Forester is 
required by Sec.  223.53(b) to determine that a significant 
catastrophic event has occurred that may justify urgent removal 
extensions. Even though a catastrophic event has occurred and the 
Regional Forester has authorized urgent removal extensions, a purchaser 
is not entitled to an extension unless the harvest of the NFS timber 
within the contract term will impede the removal of damaged non-NFS 
timber. The Contracting Officer uses the purchaser's documentation to 
verify that a specific purchaser needs the urgent removal extension, 
based on the purchaser's particular operating requirements. The 
Department believes that the documentation required is within the 
purchaser's capacity to produce.
    Comments on Regional Forester determination. One respondent was 
concerned that the requirement for a Regional Forester's determination 
may cause delays and other problems, if the catastrophic event and 
timber sale needing an extension are in different Regions. The 
respondents suggested that this authority should be delegated to Forest 
Supervisors.
    Response. The authority to make determinations that adequate cause 
for urgent removal extensions exists is delegated to the Regional 
Forester to assure that there is consistency on a Regional basis. The 
FSH 2409.15 direction will require the Regional Forester to promptly 
document the need for urgent removal extensions after a significant 
catastrophic event. Contracting Officers will be directed to grant 
urgent removal extensions based on determinations made by any Regional 
Forester.
    Comments on notarized statement requirement. Six respondents 
commented that the second part of the notarized statement in Sec.  
223.53(c)(3) of the interim rule forces purchasers to surrender 
contractual rights to compensation, if the contract is suspended or 
canceled. The respondents asserted that this is unjustified, 
adversarial, and punitive, and a serious disincentive to applying for 
urgent removal extensions. One additional respondent stated that, as a 
minimum, the statement should be clarified so that the limitation on 
damages applies only to the extension period and not to other factors, 
which are not related to the extension.
    Response. The Department believes that the Government's liability 
for damages to the purchaser is limited during the extended contract 
length granted by an urgent removal extension. The overriding public 
benefits derived from the improved protection of public lands and 
public safety outweighs any potential risk to the Government for 
granting urgent removal extensions. Therefore, Sec.  223.53(c)(3) of 
the interim rule setting out the requirements for a notarized statement 
has been removed from the final rule.
    Comments on cash payment requirement. Seven respondents stated that 
requiring a cash payment, under Sec.  223.53(e)(1) of the interim rule, 
is punitive and a disincentive to requesting an urgent removal 
extension. The respondents stated that the Chief's finding of 
substantial, overriding public interest is sufficient contract 
consideration for granting the additional contract term. One additional 
respondent suggested the alternative of a flat fee to compensate the 
Government for the cost of processing the extension, thus, the 
purchaser's decision on whether to request an extension would not be 
based on the current value of funds rate.
    Response. The Department agrees that the overriding public benefits 
and the direct and indirect economic benefits from utilization of the 
damaged timber in the form of revenues received and employment created, 
and the avoided costs of wildfire suppression, reforestation, and 
watershed restoration work compensates the Government for granting the 
additional contract term. Therefore, Sec.  223.53(e)(1) of the interim 
rule setting out the requirement for a cash payment have been removed 
from the final rule.
    Comments on stumpage rate adjustment. Five respondents stated that 
freezing the floor of the tentative rates on sales subject to stumpage 
rate adjustment, as provided in Sec.  223.53(e)(1)-(3), is punitive and 
a disincentive to requesting an urgent removal extension and conflicts 
with the Chief's finding of substantial, overriding public interest. 
One additional respondent stated that freezing the floor of the 
tentative rates on sales subject to stumpage rate adjustment should 
only apply during the extension period.
    Response. The Department agrees that limiting downward adjustments 
of tentative rates conflicts with the substantial, overriding public 
interest identified by the Chief for granting urgent removal 
extensions. The cost to

[[Page 32]]

the purchaser for an urgent removal extension should be similar to the 
cost when a purchaser is granted a contract term adjustment to log NFS 
salvage timber sale contracts. Therefore, Sec.  223.53(e)(1)-(3) of the 
interim rule setting out this requirement have been removed from the 
final rule.

Finding of Substantial, Overriding Public Interest

    Having considered (1) the potential plight of private and other 
non-NFS landowners whose timber may be damaged by wildfire and other 
catastrophes in future years; (2) the Forest Service statutory and 
regulatory framework for adjusting contracts; (3) the need for 
purchasers to plan their operations and to enter into contracts for the 
timely removal of damaged timber; (4) the need to improve protection of 
NFS lands from loss due to fire and/or insect and disease outbreaks on 
nearby non-NFS lands; (5) the need to reduce the threat to public 
safety and to property from catastrophic events; (6) the direct and 
indirect economic benefits from utilization of the damaged timber in 
the form of revenues received and employment created; (7) the avoided 
costs of wildfire suppression, reforestation, and watershed restoration 
work; and (8) the promotion of wise use and conservation of the natural 
resources of the Nation by utilizing rather than wasting damaged 
timber; the Chief of the Forest Service finds there is substantial, 
overriding public interest in extending certain NFS timber sale 
contracts for the harvest of undamaged (green) timber not requiring 
expeditious removal, when such an extension will expedite the rapid 
harvest of damaged timber requiring expeditious removal from private or 
other non-NFS lands. Extensions of undamaged (green) NFS timber sale 
contracts will be approved only if the delay of harvesting will not 
cause resource damage, delay the completion of needed projects, delay 
the harvest of damaged NFS timber, or in any other manner adversely 
impact the management of NFS lands. Highest priority consideration will 
be given to requests for extensions that involve damaged non-NFS timber 
adjacent to NFS lands.

Regulatory Certifications

Regulatory Impact

    This final rule has been reviewed under USDA procedures and 
Executive Order 12866 on Regulatory Planning and Review. OMB has 
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 rule is not subject to OMB review under Executive Order 
12866.
    Moreover, this final 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 rule will not have a significant economic impact 
on a substantial number of small entities. The final rule imposes 
minimal additional requirements on all timber purchasers for the 
purpose of validating the need for such extensions and to determine 
whether or not to approve the requested extension. The information 
required is easily within the capability of small entities to produce. 
All businesses that desire an urgent removal extension must show that 
the extension is needed in order to harvest and salvage deteriorating 
non-NFS timber, while avoiding significant economic hardship or 
contract default on NFS timber.

Environmental Impact

    This final rule establishes uniform criteria to be followed when 
the Forest Service extends an NFS timber sale contract to facilitate 
the expeditious removal of damaged timber on non-NFS lands. 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'' that do not significantly affect the quality of the 
human environment. The Department's assessment is that this rule falls 
within this category of actions and that no extraordinary circumstances 
exist which requires preparation of an environmental assessment or 
environmental impact statement. The intent of this final rule is to 
provide authority to allow additional time for completion of NFS timber 
sale contracts in the event the Forest Service authorizes purchasers to 
prioritize the harvesting of damaged timber from private or other non-
NFS lands, thus avoiding unnecessary waste of valuable non-NFS 
resources due to deterioration. No change in environmental consequences 
to NFS lands would occur from implementation of this rule, only a 
temporary delay in operations.

Controlling Paperwork Burdens on the Public

    The information required of a purchaser to request an extension of 
an NFS timber sale contract to facilitate expeditious removal of timber 
from non-NFS lands constitutes an information collection requirement, 
as defined in 5 CFR part 1320, and has been assigned Office of 
Management and Budget control number 0596-0167. This collection 
requires a purchaser to provide information to establish that an 
extension of a NFS timber sale contract(s) is needed to allow the 
harvest of damaged timber, located on private or other public lands, in 
need of expeditious removal because of catastrophic events beyond the 
control of the landowner.

Unfunded Mandates Reform

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 
which the President signed into law on March 22, 1995, the Department 
has assessed the effects of this rule on State, local, and tribal 
Governments and the private sector. This final rule does not compel the 
expenditure of $100 million or more by any State, local, or tribal 
Government or anyone in the private sector. Therefore, a statement 
under section 202 of the act is not required.

Energy Effects

    This final rule has been reviewed under Executive Order 13211 of 
May 18, 2001, Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use. It has been determined that this 
rule does not constitute a significant energy action as defined in the 
Executive order. Procedural in nature, this final rule would allow for 
the extension of contract performance time on certain NFS timber sale 
contracts to facilitate the harvest of damaged timber from private or 
other non-NFS, allowing the expeditious removal of timber from lands in 
other ownerships damaged by catastrophic events beyond the landowner's 
control.

Federalism

    The agency has considered this final rule under the requirements of 
Executive Order 13132, Federalism. The agency has made an assessment 
that the rule conforms with the Federalism principles set out in this 
Executive order; would not impose any compliance costs on the States; 
and would not have substantial direct effects

[[Page 33]]

on the States, on the relationship between the national government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government.

Consultation With Indian Tribal Governments

    This final rule does not have tribal implications as defined in 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments, and, therefore, advance consultation with tribes is not 
required.

No Takings Implications

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 12630, and it has been 
determined that the rule does not pose the risk of a taking of private 
property. There are no private property rights to be affected, because 
the contract provisions that implement this rule will be used only with 
contract modifications that are made at the request of the timber sale 
purchaser.

Civil Justice Reform Act

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. After adoption of this final rule, (1) all State 
and local laws and regulations that conflict with this rule or that 
would impede full implementation of this rule will be preempted; (2) no 
retroactive effect would be given to this final rule; and (3) this 
final rule would not require the use of administrative proceedings 
before parties could file suit in court challenging its provisions.

List of Subjects in 36 CFR Part 223

    Administrative practices and procedures, Exports, Government 
contracts, Forests and forest products, National forests, Reporting and 
recordkeeping requirements.

0
Therefore, for the reasons set forth in the preamble, the interim rule 
published at 67 FR 70165, November 21, 2002, is adopted as final with 
the following changes:

PART 223--SALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER

0
1. The authority citation for Part 223 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. 620-620j, unless otherwise 
noted.

Subpart B--Timber Sale Contracts

0
2. In Sec.  223.53, revise paragraphs (b) through (e) to read as 
follows:


Sec.  223.53  Urgent removal contract extensions.

* * * * *
    (b) Regional Forester determination. If the Regional Forester 
determines that adequate cause for urgent removal extensions exists, 
Contracting Officers may extend National Forest System timber sale 
contracts, up to a maximum of 1 year, for the estimated amount of time 
required to harvest and process the damaged timber on non-National 
Forest System lands. Contracting Officers may grant urgent removal 
extensions only when the Regional Forester verifies in writing that:
    (1) A specific catastrophe occurred for which urgent removal 
extensions should be granted;
    (2) The manufacturing facilities or logging equipment capacity 
available to purchasers are insufficient to provide for both the rapid 
harvest of damaged non-National Forest System timber in need of 
expeditious removal and the continued harvest of undamaged (green) 
timber under contract with the Forest Service; and
    (3) Failure to harvest the damaged non-National Forest System 
timber promptly could result in the following:
    (i) Pose a threat to public safety,
    (ii) Create a threat of an insect or disease epidemic to National 
Forest System or other lands or resources, or
    (iii) Significant private or other public resource loss.
    (c) Purchaser request. To obtain an urgent removal extension on a 
National Forest System timber sale contract, a purchaser must make a 
written request to the Contracting Officer, which includes the 
following:
    (1) An explanation of why the harvest of undamaged (green) National 
Forest System timber within the term of the existing National Forest 
System contract(s) will prevent or otherwise impede the removal of 
damaged non-National Forest System timber in need of expeditious 
removal; and
    (2) Documentation that the manufacturing facilities or logging 
equipment capacity available to a purchaser would be insufficient to 
provide for both the rapid salvage of damaged non-National Forest 
System timber in need of expeditious removal and continued harvest of 
undamaged (green) National Forest System timber under contract with the 
Forest Service.
    (d) Contracting Officer determination. To grant an urgent removal 
extension, the timber sale Contracting Officer must verify the 
following:
    (1) That it is likely that the undamaged (green) timber from 
National Forest System land would be delivered to the same 
manufacturing facilities as are needed to process the damaged non-
National Forest System timber or the National Forest System timber sale 
contract would require the use of the same logging equipment as is 
needed to remove the damaged non-National Forest System timber from the 
area affected by the catastrophe;
    (2) That extension of the National Forest System contract will not 
be injurious to the United States and will protect, to the extent 
possible, the health of the National Forest System lands, including:
    (i) That urgent removal extension does not adversely affect other 
resource management objectives to be implemented by the National Forest 
System timber sale being extended; and
    (ii) That the National Forest System timber sale contract to be 
extended is not a sale containing damaged, dead, or dying timber 
subject to rapid deterioration.
    (3) That the purchaser has not been granted a previous urgent 
removal extension on the same National Forest System timber sale 
contract based on the current catastrophic event. Subsequent urgent 
removal extensions may be granted if there are subsequent Regional 
Forester determinations on other catastrophic events.
    (4) That the revised National Forest System timber sale contract 
term will not exceed 10 years from the date the National Forest System 
contract was awarded; and
    (5) That the purchaser is not in breach of the National Forest 
System contract, and all work items, payments, and deposits are 
current.
    (e) Execution of contract extension. An urgent removal extension of 
a National Forest System timber sale contract is executed through a 
mutual agreement contract modification pursuant to Sec.  223.112, which 
must include specific contract provisions. An agreement to modify a 
contract must identify the specific provision(s) of the contract being 
modified and must include the requirement that purchasers make cash 
payment to cover the costs of remarking timber on the sale area or 
reestablishing cutting unit boundaries if the Contracting Officer 
determines such work is necessary.
* * * * *

    Dated: December 23, 2003.
David P. Tenny,
Deputy Under Secretary, Natural Resources and Environment.
[FR Doc. 03-32243 Filed 12-31-03; 8:45 am]
BILLING CODE 3410-11-P