[Federal Register Volume 71, Number 63 (Monday, April 3, 2006)]
[Rules and Regulations]
[Pages 16622-16657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2889]


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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 251

RIN 0596-AB83


Procedures for Appraising Recreation Residence Lots and for 
Managing Recreation Residence Uses Pursuant to the Cabin User Fee 
Fairness Act

AGENCY: Forest Service, USDA.

ACTION: Issuance of final directives.

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SUMMARY: The Cabin User Fee Fairness Act of 2000 directs the Forest 
Service to promulgate regulations and adopt policies for carrying out 
provisions of the act. Accordingly, the Forest Service is adopting 
final directives issued in the Forest Service Manual (FSM) Title 2300, 
Recreation, Wilderness, and Related Resource Management; FSM Title 
2700, Special Uses Management; Forest Service Handbook (FSH) 2709.11, 
Special Uses Handbook; and FSH 5409.12, Appraisal Handbook. These final 
directives, and revised special uses regulations published elsewhere in 
this part of today's Federal Register, set out requirements and provide 
direction to agency personnel for managing recreation residence uses 
and assessing fees for those uses of National Forest System lands 
pursuant to the act.

DATES: These directives are effective May 3, 2006.

ADDRESSES: The documents used in developing these directives are 
available for inspection and copying at the office of the Director, 
Lands Staff, Forest Service, USDA, 4th Floor South, Sidney R. Yates 
Federal Building, 1400 Independence Ave., SW., Washington, DC, during 
regular business hours (8:30 a.m. to 4 p.m.), Monday through Friday, 
except holidays. Those wishing to inspect these documents are 
encouraged to call ahead (202) 205-1248 to facilitate access to the 
building.
    Other documents not in the decision-making record that were 
requested during the comment period on the proposed directives are 
beyond the scope of this direction making process conducted pursuant to 
5 U.S.C. 553(c). Those interested in obtaining these documents may 
request them under the Freedom of Information Act by writing to the 
USDA Forest Service, Freedom of Information Act/Privacy Act Branch, 
Office of Regulatory and Management Services, 1400 Independence Ave., 
SW., Mail Stop 1143, Washington, DC 20250-1143.

FOR FURTHER INFORMATION CONTACT: Julett Denton, Lands Staff, (202) 205-
1256.

SUPPLEMENTARY INFORMATION:

Table of Contents

1. Background
2. Purely Technical, Nonsubstantive Revisions
3. Public Comments on Proposed Revisions to Recreation Residence 
Directives
    Forest Service Manual
     Chapter 2340--Privately Provided Recreation 
Opportunities
     Chapter 2720--Special Uses Administration
    Forest Service Handbook 2709.11--Special Uses
     Chapter 30--Fee Determination
    Forest Service Handbook 5409.12--Appraisal Handbook
     Chapter 60--Appraisal Contracting
4. Regulatory Certifications
    Environmental Impact
    Regulatory Impact
    No Takings Implications
    Civil Justice Reform
    Unfunded Mandates
    Federalism and Consultation and Coordination With Indian Tribal 
Governments
    Energy Effects
    Controlling Paperwork Burdens on the Public
5. Text of the Final Directive
6. Table I--Section-by-Section Comparison Between the Proposed and 
Final Recreation Residence Directives

1. Background

    A discussion of the history and development of direction and 
regulations for the administration of recreation residences is found in 
the final rule to Title 36, Code of Federal Regulations, part 251, 
subpart B, published elsewhere in this part of today's Federal 
Register.
    Most of the changes required by the Cabin User Fee Fairness Act of 
2000 (CUFFA) affect direction for administering recreation residences 
contained in the Forest Service Manual (FSM) and Forest Service 
Handbook (FSH) directives. Accordingly, the changes to recreation 
residence management identified in CUFFA will be implemented through 
revisions to the FSM and FSH pursuant to CUFFA. Table I at the end of 
this notice has been prepared as an aid to understanding the directive 
changes being adopted. Table I displays the recreation residence 
directive provision, its reference to the appropriate section of CUFFA, 
and a section-by-section comparison of the proposed and final 
direction.

2. Purely Technical, Nonsubstantive Revisions

    All references to enactment of CUFFA as having occurred on October 
12, 2000 have been revised to reflect that CUFFA was actually enacted 
on October 11, 2000. In addition, Forest Service Manual 2347.12, 
governing caretaker cabin user fees, has been revised for clarity and 
for purposes of using the terminology in the corresponding provisions 
in CUFFA.

3. Public Comments and Responses To Proposed Revisions To Recreation 
Residence Directives

    A discussion on the general nature of comments and a response to 
comments on the proposed rule are found in a final rule published 
elsewhere in this part of today's Federal Register.

Forest Service Manual

Chapter 2340--Privately Provided Recreation Opportunities
    2340.05--Definitions. This section included a definition of a 
``caretaker cabin'' and reference that a cabin needed to be occupying a 
lot within a recreation residence tract.
    Comment. Many respondents commented that limiting the use of cabins 
to only those situated on a lot within a recreation residence tract is 
inconsistent with CUFFA.
    Response. The Forest Service agrees with these comments. The final 
direction includes a revised definition for a caretaker cabin. The 
revised definition is more reflective of the definition of a caretaker 
cabin that appears in CUFFA and does not necessarily require that the 
location of a caretaker cabin be situated within a recreation residence 
tract. In making this revision, however, the Forest Service is not 
implying that it will consider authorizing the construction of new 
cabins outside of existing recreation residence tracts for the purpose 
of creating a caretaker cabin use. However, the revised definition will 
provide the authorized forest officer with the option to authorize an 
existing privately-owned cabin on National Forest System (NFS) land to 
be used for caretaker cabin purposes in those rare circumstances where 
a privately-owned cabin may already exist outside of a designated 
recreation residence tract. Examples might be existing privately-owned 
cabins currently authorized by the Forest Service for use as an 
isolated cabin, a residence, or as part of a larger use and occupancy 
of NFS land, such as in conjunction with a grazing allotment or for 
mining purposes.

[[Page 16623]]

    The Forest Service also discovered a technical error in this 
section of the proposed direction. The coding should have been 2340.5, 
not 2340.05. The final direction includes this correction.
    2347.1--Recreation Residences. This section provided direction that 
the Forest Service would, to the maximum extent practical, manage the 
recreation residence program to preserve the opportunity for individual 
and family-oriented recreation.
    There were no substantive comments received on this section. 
However, in the final directive, paragraph 7 has been added to address 
the concerns expressed by many respondents that community- or 
association-owned improvements should not be authorized to an 
individual under the recreation residence term permit, but rather, 
should be authorized under separate permit and authority to the 
association or entity representing the recreation residence owners.
    2347.12--Caretaker Cabins. This section provided direction 
concerning the manner in which a caretaker cabin may be owned and 
authorized, the considerations that the authorized officer should take 
into account when determining whether to authorize caretaker cabin use, 
and the annual fee to be charged for caretaker cabin uses.
    Comment. Many respondents commented that it was unclear as to how 
the proposed direction concerning caretaker cabin uses was different 
from current agency direction. Respondents suggested that the Federal 
Register notice should have included a discussion of those differences. 
These respondents also suggested that the proposed direction requiring 
that a caretaker cabin be authorized with an annual permit, Form FS-
2700-4, as opposed to a term special use permit for a recreation 
residence, Form FS-2700-5a, is discriminating against caretaker cabin 
uses.
    Response. The Forest Service agrees that there was no discussion in 
the preamble to the May 13, 2003, Federal Register notice (68 FR 25751) 
of the differences between the existing and proposed policy on 
caretaker cabins. However, the proposed direction included a table 
(Table I) which provided a section by section comparison between the 
current recreation residence direction and the proposed revision.
    The proposed revision to Forest Service Manual (FSM) 2347.12a, 
which included language directing the use of an annual permit (Form FS-
2700-4) to authorize a caretaker cabin, was not a proposed change from 
current agency direction for authorizing caretaker cabin uses. A 
caretaker cabin, by its nature can be, and often is, used as a year 
round, primary residence to fulfill its purpose of maintaining the 
security of a tract. As such, the authorized use is significantly 
different than a recreation residence use. Likewise, if a caretaker 
cabin use is authorized for a cabin situated outside of a recreation 
residence tract, as will be provided with the previously referenced 
revision to the definition of a caretaker cabin, then not only the use, 
but the location of the cabin would be inconsistent with the agency's 
direction that a recreation residence use be located within a 
recreation residence tract. In addition, the primary purpose of use and 
occupancy of a caretaker cabin is sufficiently different from that of a 
recreation residence use, and it should be authorized with the type of 
special use authorization appropriate for that special use. Therefore, 
the final directive will remain unchanged with respect to the type of 
special use authorization used to authorize the use of a cabin as a 
caretaker cabin.
    The proposed direction under Sec.  2347.12b includes the language 
which was intended to be reflective of section 607(b) of CUFFA, which 
directs that the fee for a caretaker cabin special use shall not exceed 
the fee charged for the authorized use of a similar typical lot in the 
tract. The final language in this part of the direction has been 
slightly revised to accommodate those situations where a caretaker 
cabin may not be located within a recreation residence tract. The 
revised language in the final direction provides direction for 
assessing an annual fee for a caretaker cabin that may be located 
neither on a recreation residence tract, nor on a recreation residence 
lot, by directing that the fee will be equal to a typical lot within 
the tract for which caretaker cabin services are being provided, that 
is most representative of the NFS land upon which the caretaker cabin 
is located.
Chapter 2720--Special Uses Administration
    There were no substantive comments received on this chapter of the 
Forest Service Manual. No revisions have been made in the final 
directive.

Forest Service Handbook 2709.11--Special Uses Handbook

Chapter 30--Fee Determination
    33.05--Definitions. This section included new definitions for terms 
used in CUFFA.
    Comment. Numerous respondents suggested that the definitions of 
terms in the agency's directives mirror exactly the definitions of 
those terms as provided in CUFFA. Others suggested that the term 
``market value'' should not be included in the final directive because 
it is a term of art which appraisers understand and that including the 
words ``giving due consideration to all available economic uses of the 
property at the time of the appraisal'' in the definition of market 
value was inconsistent with the provisions of CUFFA, is in conflict 
with the provisions defining Highest and Best Use in the appraisal 
specifications, and should be deleted.
    Response. The Forest Service has reviewed the definition of all the 
terms included in the proposed directive revisions and has compared 
them to the corresponding definitions and the intent of CUFFA. A 
response to each definition is as follows:
    Cabin. The definition has been revised to mirror the definition for 
a cabin as provided in section 604(4) of CUFFA.
    Market Value. The term ``market value'' is not defined in CUFFA. 
However, the Forest Service believes that a definition for market value 
is necessary in agency direction. Section 605 of CUFFA directs the 
Forest Service, through the Secretary of Agriculture, to ensure, to the 
maximum extent practicable, that the basis and procedure for 
calculating cabin user fees results in a fee that reflects ``(1) the 
market value of the lot; and (2) regional and local economic 
influences.'' With this statutory mandate, the Forest Service believes 
that there is a need to clearly define the term ``market value,'' 
lacking any clear definition in CUFFA. The agency believes it would be 
remiss to simply rely on an assumption that market value is a term of 
art, which every appraiser understands and can articulate and apply 
consistently. Several definitions of market value have been utilized in 
appraisal publications and educational materials over time. The Forest 
Service believes it is important for all appraisers to utilize a 
current, common definition. Though other definitions may apply to 
transactions performed under other legal authorities, CUFFA directs 
that appraisals prepared under authority of the act be prepared in 
compliance with the Uniform Standards of Professional Appraisal 
Practice (USPAP) and the Uniform Appraisal Standards for Federal Land 
Acquisitions (UASFLA). The two sets of appraisal standards have 
conflicting definitions, so the definition in the UASFLA takes 
precedence because those standards, though they are not themselves law, 
are based on Federal case law, legislation, and

[[Page 16624]]

administrative rules. Providing for a definition in agency direction is 
designed to maximize consistency in the interpretation and application 
of the concept of market value.
    Within the proposed definition of market value, use of the language 
``giving due consideration to all available economic uses of the 
property at the time of the appraisal'' was also evaluated in response 
to the comments received. The phrase cited is an integral part of the 
definition. However, this part of the definition is mitigated by the 
requirement in the appraisal guidelines that the identified highest and 
best use shall be the authorized use: A lot suitable for use as a 
recreation residence. No other potential highest and best uses shall be 
considered or discussed in the appraisal report.
    Natural, Native State. The definition of this term in the proposed 
direction was very similar to that used in CUFFA and was not changed in 
the final direction.
    Recreation Residence. This term was not defined in CUFFA. However, 
CUFFA includes several references to the ``recreation residence 
program,'' and CUFFA defines the term ``cabin,'' as a subset of 
recreation residence (see the final direction defining the term 
``cabin''). Therefore, the Forest Service believes that for consistency 
in management, and clarity for the public, the term ``recreation 
residence'' must be defined to distinguish it from other types of cabin 
uses on NFS lands, such as historic cabins, isolated cabins, and cabins 
used for mining or grazing operations. The definition, however, has 
been revised in the final direction to remove the words ``auxiliary 
buildings and improvements,'' so that the definition of a ``recreation 
residence'' is equal to the definition of a ``cabin,'' as cabin is 
defined in CUFFA and this section of the direction. However, a 
recreation residence special use commonly includes the use and 
occupancy of NFS lands with not just a recreation residence, but also 
with ``auxiliary buildings and improvements.'' The cumulative location 
and distribution of the recreation residence, or cabin, and the 
associated permit holder owned auxiliary buildings and improvements on 
NFS land comprises the recreation residence ``lot,'' as the term 
``lot'' is defined in the final rule at 36 CFR 251.51, published in a 
separate notice in this part of today's Federal Register. Auxiliary 
buildings and improvements are not a part of the recreation residence 
or cabin and have therefore, been deleted from the final definition of 
the term ``recreation residence.''
    Related Improvements. A definition of ``related improvements'' was 
not included in the proposed rule or proposed directives. However, due 
to the comments received on the definition of ``recreation residence 
lot'' in the proposed rule, the Forest Service is adding this 
definition to clarify what constitutes a related improvement in the 
context of a recreation residence lot.
    For the purpose of defining a recreation residence lot (36 CFR 
251.51), ``related improvements'' include not only the examples of 
facilities and uses owned and maintained by the holder identified at 36 
CFR 251.51, but may also include holder-owned facilities or uses of 
National Forest System lands operated or maintained by the holder in 
conjunction with the recreation residence use. For example, 
outbuildings, wood piles, retaining walls, picnic tables, driveways, 
parking areas, trails, boardwalks, campfire rings, seats, benches, the 
construction and maintenance of lawns, gardens, flower beds, landscaped 
terraces, and the manipulation and/or maintenance of native vegetation. 
Related improvements will not include native vegetation that is 
manipulated and/or maintained for the primary purpose of protecting 
property and mitigating safety concerns, such as the removal of hazard 
trees, and the treatment/management of vegetation, approved by the 
authorized officer, to reduce fuel loading and to create defensible 
space for wildfire suppression purposes, nor will it include tract 
association- or community-owned facilities that are authorized under a 
separate authorization to the recreation residence tract association or 
some other entity representing the owners of the recreation residence. 
The list of items identified in the definition of ``related 
improvements'' in section 33.05 is not intended to be an all-inclusive 
list.
    Simple Majority. Section 614(c)(2) of CUFFA requires that a new 
appraisal or peer review of an existing appraisal be made by a majority 
of the cabin owners in a group of cabins represented in the appraisal 
process by a typical lot. To assure that Forest Service managers 
consistently understand and apply this provision of CUFFA, the agency 
believes that there is a need to clearly define what constitutes a 
``majority'' as used in this section of CUFFA. The proposed direction 
did so by providing a definition of ``simple majority.'' However, since 
CUFFA and other sections of the directive use the term ``majority,'' 
instead of ``simple majority,'' this term has been changed to 
``majority'' in section 33.05. The proposed direction provided a 
definition of ``more than 50 percent,'' and that definition remains the 
same in the final direction. In the case where a typical lot represents 
a grouping of an even number of lots, and a request is made for a new 
appraisal or peer review pursuant to section 614(c)(2) of CUFFA, the 
majority of the holders within that grouping would be at least 50% of 
the permit holders in that grouping, plus 1. A request for a peer 
review or new appraisal by only 50 percent of the holders within a 
grouping comprised of an even number of lots would not by definition, 
constitute a majority.
    Tract. The definition of this term in the proposed direction was 
very similar to that used in CUFFA, and was not changed in the final 
direction.
    Typical Lot. The first sentence of the definition of this term in 
the proposed direction was similar to the definition in CUFFA. The 
Forest Service expanded the definition in the proposed direction to 
describe to Forest Service managers how typical lots are to be used for 
appraisal purposes. There have been no changes to the definition of 
this term in the final directive.
    33.13--Annual Adjustment of Recreation Residence Fee. This section 
prescribed the manner in which annual adjustments to recreation 
residence fees would be made and provided a series of examples for 
implementing the provisions of the proposed direction.
    Comment. At least one respondent was critical of the Forest 
Service's proposal to continue to use the Implicit Price Deflator, 
Gross National Product (IPD-GNP) index in making annual changes to 
fees, stating that section 608(b) of CUFFA directs the agency to use 
the ``Index of Agricultural Land Prices,'' published and maintained by 
the Department of Agriculture. One respondent stated that since the 
proposed direction has no provisions to adopt the use of the Index of 
Agricultural Land Prices, it must mean that the Forest Service intends 
to incur an unnecessary expense of updating this section of the 
direction when the transition period (as prescribed in section 614 of 
CUFFA) is over, or the Forest Service hopes to bury the Index of 
Agricultural Land Prices and not use it at all.
    Response. The proposed rule and proposed directives clearly 
disclosed the intent to use current and future indexing factors for 
making annual adjustments to recreation residence special use permit 
fees in compliance with the provisions in CUFFA. Section 614 of CUFFA 
describes the transition as that period of time during which the final 
rule, direction revisions, and new appraisal guidelines are 
promulgated,

[[Page 16625]]

adopted, and fully implemented, and a new base cabin user fee for all 
holders is established. Section 614(c) of CUFFA provides holders up to 
2 years after the date of adoption of the final rule, direction 
revisions, and appraisal guidelines, to request a new appraisal or peer 
review. Additional time beyond the date of these requests will be 
needed for new appraisals and peer reviews to be conducted and a new 
base cabin user fee established. So it is conceivable that for some 
permit holders, the transition period described in CUFFA will continue 
for several years after the date of adoption of these final rules, 
direction revisions, and appraisal guidelines. During this transition 
period, section 614(a)(1) and (2) of CUFFA specifically direct that 
term special use permit fees for recreation residences shall be 
annually adjusted using the annualized 2nd quarter to 2nd quarter 
change in the IPD-GNP. The Forest Service's direction at Sec.  33.13 of 
FSH 2709.11 reflects this provision of CUFFA.
    In the preamble of the proposed rule (68 FR 25749), the Forest 
Service disclosed that it will begin to use the Index of Agricultural 
Land Prices to make annual adjustments to the base cabin user fee when 
the transition period (section 614 of CUFFA) ends. A notation on Table 
I, Sec.  33.13 (68 FR 25779) stated that approximately 2 years after 
adopting the proposed rule and direction revisions (including the new 
appraisal guidelines), the Forest Service would develop supplemental 
direction to implement the provisions of section 608(a) and (b) of 
CUFFA. By waiting approximately 2 years before proposing and 
establishing agency direction for use of the Index of Agricultural Land 
Prices for annualized changes in recreation residence permit fees, the 
Forest Service will be able to then provide holders and interested 
members of the public, clear and focused fee direction concerning the 
use of that index.
    Comment. Several comments were received which cited that in Sec.  
33.13 of the proposed directive, Example 2 displayed a year in which 
the annual fee increase could be in excess of 5 percent. At least one 
respondent who commented on this section of the direction suggested 
that it should be revised to result in situations where the annual fee 
will never increase by more than 5 percent because that is what is 
needed to comply with the limitation provision in section 608(d) of 
CUFFA.
    Response. In Example 2, the increase in the fee from Year 2006 
($772) to the Year 2007 fee ($824) represented a fee increase of 6.7 
percent. It appears, however, that the respondent's comment is based on 
an interpretation of the limitation provisions in section 608(d) of 
CUFFA, which suggests that the annual change in a cabin user fee can 
never exceed 5 percent. The Forest Service does not agree with this 
interpretation of section 608(d) of CUFFA. Section 608(d) directs that 
the Secretary shall:
    (1) Limit any annual fee adjustment to an amount that is not more 
than 5 percent per year when the change in agricultural land values 
exceeds 5 percent in any 1 year; and
    (2) Apply the amount of any adjustment that exceeds 5 percent to 
the annual fee payment for the next year in which the change in the 
index factor is less than 5 percent.
    The Forest Service interprets this provision to mean that in any 
year in which the annual index amount exceeds 5 percent, the amount of 
the adjustment in excess of 5 percent will be carried forward in its 
entirety to the fee in the very next year in which the index factor is 
less than 5 percent, even if that results in a one year fee increase 
for that year in excess of 5 percent. Section 608(d) of CUFFA does not 
direct that there be a 5 percent fee increase limitation in the year in 
which the fee change in the index factor is less than 5 percent and the 
carryover adjustment(s) is applied. Example 2 in section 33.13 of the 
proposed direction was specifically designed with hypothetical index 
factors to demonstrate this interpretation of section 608(d) of CUFFA. 
Therefore, the Forest Service believes that the example is accurate, 
and disagrees with the interpretation of section 608(d) represented by 
the comment that agency direction should provide that an annual fee may 
never increase by more than 5 percent.
    There were no revisions made to this section.
    33.2--Fees When Determination Is Made To Place Recreation Residence 
on Tenure. This section provided direction for implementing the 
provisions of section 607(c) and (d) of CUFFA, describing the manner in 
which an annual fee will be assessed in the event that a decision is 
made to discontinue a recreation residence use.
    Comment. Several respondents provided comments about particular 
provisions in the three options which call for a recovery of some of 
the foregone fees, in cases where the recreation residence use is going 
to be allowed to continue for at least 10 more years beyond the 
originally identified date of expiration and conversion to an 
alternative public purpose. The respondents noted that these provisions 
are not mandated in CUFFA, questioned the legality of requiring that a 
fee that includes as a ``surcharge'' a 10-year recovery of previously 
foregone permit fees, and that a 10-year recovery should not run with 
the lot and be made a part of the fee assessed to a subsequent owner of 
the recreation residence, should a change in ownership occur over the 
course of that 10-year fee recovery.
    Response. Although it was not stated in the proposed direction, the 
options identified are a reiteration of current direction that has been 
in place since 1994. No changes from existing direction were proposed. 
Providing the 10-year recovery period was designed to benefit the 
owners of recreation residences, by preventing recreation residence 
owners from having to pay foregone fees in a single lump sum 
assessment. Rather, an economic impact to recreation residence owners 
has been mitigated in agency direction with the provision that allows 
owners to repay the foregone fees due the United States as an annual 
fee surcharge, in equal installments over a 10-year period.
    While the Forest Service understands the burdens this fee recovery 
surcharge may impose on a new owner of the recreation residence, it is 
the responsibility of the prospective buyer, or any successor in 
interest, to be aware of the terms and conditions of the recreation 
residence special use permit, including fee obligations due the United 
States at the time they consider acquiring a recreation residence. The 
current owner's fee obligation to the United States, including any 
annual fee recovery surcharge can then be taken into account by 
prospective purchasers as a consideration in negotiating a purchase 
price with the seller of the recreation residence.
    There were no revisions made to this section.
    33.4--Establishing the Market Value of Recreation Residence Lot. 
This section provided general direction about the manner in which 
recreation residences are appraised and describes the basic concept of 
establishing groupings of lots having essentially the same or similar 
value characteristics.
    Comment. Many comments were received concerning Sec.  33.4, 
paragraph 1, that provided direction for fee adjustments made for 
measurable differences among recreation residences lots within a 
grouping. These respondents stated that this could be implied to mean 
that appraisers would have the authority to make (base cabin user fee) 
adjustments for measurable differences among recreation residences

[[Page 16626]]

within a grouping of lots, and to establish new groupings of lots and 
to select typical lots, and that giving this authority to appraisers 
violates the provisions of CUFFA. Other respondents stated that there 
should not be the need to make adjustments, because if there were 
measurable differences among recreation residence lots within a 
grouping, then that should trigger the need to establish a new grouping 
with a new typical lot. Some respondents suggested that one of the 
results of implementing the provisions of CUFFA, Departmental 
regulations, and agency policies may be the need to reconsider and 
reconfigure lot groupings, including the establishment of additional 
lot groupings and the corresponding selection of additional typical 
lots. Other comments suggested that recreation residence lots should be 
appraised in their native, natural state and suggested that the 
appraiser should be instructed to consider lots as inaccessible in the 
winter, unless snow is removed from the access road by either the 
Forest Service or a third party.
    Response. The Forest Service agrees that as worded, paragraph 1 in 
Sec.  33.4 could be interpreted to mean that an appraiser has the 
authority to make adjustments to base cabin user fees in cases where 
there might be measurable differences among recreation residence lots 
within a grouping of lots. Therefore, the language in paragraph 1 has 
been revised to clarify that only the authorized officer may make 
adjustments.
    The Forest Service disagrees, however, with comments that suggested 
that measurable differences among recreation residence lots within a 
grouping of lots always signals the need to establish a new grouping 
and a new typical lot. While that may be appropriate in some cases, it 
may not always be an efficient or economically justifiable approach to 
establishing a base cabin user fee, particularly in cases where only 
one or two lots within a grouping of lots might have a measurable 
difference that, while measurable, will result in only a minor change 
to the base cabin user fee. Therefore, the Forest Service will leave 
this provision as an option for the authorized officer to consider and 
use in accommodating measurable differences between lots within a 
grouping as an alternative to establishing a new grouping and 
corresponding typical lot. However, paragraph 1 will be revised to 
include the word ``values'' to clarify that this provision means that 
adjustments to a base cabin user fee may be made when there are 
measurable value differences among recreation residence lots within a 
grouping of lots. The requirement that the authorized officer seek the 
advice of the assigned Forest Service review appraiser will also be 
added to paragraph 1.
    The Forest Service disagrees that this sentence could also be 
interpreted to mean that an appraiser has the authority to create a new 
grouping of lots and select a correspondingly new typical lot. The 
direction in Sec.  33.41 of the direction clearly directs that the 
establishment of groupings of lots, and the selection of a typical lot 
within each lot grouping, shall be made by the authorized officer with 
input from permit holders.
    The comments that suggested that the appraiser should be instructed 
to consider the lots as inaccessible in the winter unless snow is 
removed from the access road may not have understood that this property 
characteristic is covered in Sec.  33.4, paragraph 3(b). The appraiser 
is directed to consider, and adjust if appropriate, any limitation on 
access attributable to weather and other factors. The appraiser will 
consider the lot's access condition. If the property is inaccessible in 
winter, the appraiser will search for sales with similar access 
limitations.
    The Forest Service also agrees that as part of the implementation 
of CUFFA and the adoption and implementation of the Secretary's 
regulations and agency policies, there may be an occasional need in 
some tracts for the authorized officer to either reconsider the 
groupings of lots and the identification of typical lots or make 
adjustments to base cabin user fees for certain lots within a grouping 
of lots. The need to do so would most likely occur in cases where the 
inventory of facilities, utilities, and access servicing a tract are 
not comparable to the facilities, utilities, and access servicing the 
typical lot. In these cases, the authorized officer will have the 
authority to, at his or her discretion, consider implementing one of 
the following options:
    1. Establish a new grouping of lots having clearly different 
attributes of access, utilities, and facilities servicing those lots 
from those which have been inventoried and are servicing the typical 
lot and:
    a. Identify with the holders a new typical lot to represent that 
new grouping.
    b. Prepare a new permanent inventory of utilities, access, and 
facilities servicing that typical lot (sec. 33.42).
    c. Conduct a new appraisal of that typical lot pursuant to the 
provisions of CUFFA. The Forest Service and the holder(s) shall pay 
equally for the cost of the new appraisal.
    2. Where feasible, assign lots having clearly different attributes 
with another typical lot that may have been established in the tract 
and which has attributes of access, utilities, and facilities that are 
comparable to those lots.
    3. Make adjustments to the base cabin user fee for those lots 
having utilities, access, and facilities that are so different from the 
attributes of the typical lot that it creates a measurable difference 
in value.
    These options have been added to Sec.  33.41.
    Comment. Section 33.4 of the proposed direction also directed that 
an appraiser shall not select sales of land within developed urban 
areas when identifying comparable sales to arrive at an appraised value 
of a typical lot. Some respondents commented that the word ``urban'' 
should be defined because it has a specific meaning in most land use 
ordinances and that (1) cabin owners are concerned that appraisers may 
select comparable lots from urban and suburban-style subdivisions in 
rural areas and that (2) use of comparable lots from these sources has 
the potential to dramatically distort the valuation of NFS lots.
    Response. The Forest Service agrees with those respondents who 
expressed these concerns. Urban is defined in ``The Dictionary of Real 
Estate Appraisal, Fourth Edition,'' as:

    Describes a mature neighborhood with a concentration of 
population typically found within city limits or a neighborhood 
commonly identified with a city.

    A definition for ``urban'' has been added to section 33.05.
    33.42--Inventorying Utilities, Access, and Facilities. This section 
directed the authorized officer to identify and inventory utilities, 
access, and facilities that provide service to each typical lot within 
a recreation residence tract. It also provides criteria or guidelines 
for the authorized officer to use in making a determination as to who 
paid for the capital costs to construct those utilities, access, and 
other facilities servicing each typical lot
    Comment. Many comments were received concerning this section of the 
proposed direction. One of the purposes of this part of the proposed 
direction was to further define the fundamental premise in CUFFA, which 
directs that ``the Secretary shall presume that a cabin owner, or a 
predecessor of the owner, has paid for the capital costs of a utility, 
access, or facility serving the lot being appraised, unless the Forest 
Service produces evidence that the agency or a third party has paid for 
the

[[Page 16627]]

capital costs.'' Most who commented on Sec. Sec.  33.42, and 33.42(a) 
and (b) of the proposed direction said it was inconsistent with the 
provisions in CUFFA, or `` defective'' in that the direction (1) 
attempts to determine by definition that certain improvements are not 
paid for by cabin owners, or their predecessors, and that an approach 
is not equivalent to producing evidence (as is required in CUFFA); (2) 
attempts to put the burden of proof (as to who paid for utilities, 
facilities, or access) upon the cabin owners, rather than on the Forest 
Service; and (3) establishes standards which would allow an authorized 
officer to make assumptions as to who paid for utilities, access, or 
facilities without producing actual evidence of that fact. Some who 
commented said that all evidence demonstrating payment of capital 
investments in utilities, access, and facilities must be in writing. 
Many respondents commented that this section of CUFFA requires the 
Forest Service to prove payment of the capital investment in access, 
utilities, and facilities by either the Forest Service or a third 
party. Many comments suggested that any time a holder is paying a 
standard rate for a utility service, included in that rate are the 
costs of capital investments of the facilities needed to convey/provide 
the service or utility. Lastly, almost all who commented on this part 
of the proposed direction disagreed with that portion of Sec.  33.42(a) 
which specifically cited as an example, that the assessment of a tap 
fee or hook-up fee charged by a utility provider to a permit holder or 
their predecessor does not constitute a payment of the capital costs of 
providing those facilities to the lot.
    Response. The primary purpose for the direction in section 33.42 
was to provide clarity and consistency for implementing the inventory 
provisions of section 606(a)(1) of CUFFA. In the proposed directive, 
the Forest Service provided direction through the use of examples. 
Lacking this direction, permit administrators and authorized officers 
would be guided only by nondescript provisions in section 606(a)(1) of 
CUFFA which lends itself to differences in interpretation. That was 
clearly evident by the significant number of comments that were 
generated by the Forest Service's interpretation of section 606(a)(1) 
and demonstrates that there is no single, agreeable interpretation of 
this section of CUFFA. Therefore, the agency will exercise its 
discretion in providing further definition and guidance in its 
directives to assure consistency in interpretation and application of 
this part of CUFFA.
    Most of the comments that were submitted concerning the examples 
provided in the proposed direction in Sec. Sec.  33.42(a) and (b) 
disagreed with various elements of the proposed direction concerning 
evidence that constitutes payment for the capital costs of utilities, 
access, and facilities which provide access or services to a recreation 
residence lot. Those aspects of the comments received will be 
individually addressed, as follows:
    1. Responsibility for Determining Evidence of Payment of Capital 
Costs. Many who commented interpreted the proposed direction in Sec.  
33.42(a) as requiring cabin owners to provide evidence that either the 
cabin owner or a predecessor of a cabin owner directly paid, paid a 
lump sum fee, or paid a surcharge for the capital costs of an 
inventoried utility, access, or facility. Many cited that it is the 
intent of section 606(a)(1) of CUFFA that it is the responsibility of 
the Forest Service to provide this evidence.
    The Forest Service agrees. Major revisions to this section have 
been made to more clearly articulate that intent. The caption for Sec.  
33.42(a) has been revised to ``Types of Utilities, Access, and 
Facilities to Include in Inventories,'' and includes the list of 
itemized types of utilities, access, and facilities that were 
identified in the proposed direction under the general caption in Sec.  
33.42 as items 1 thru 4. The caption at Sec.  33.42(b) has been revised 
to ``Criteria to be Considered in Determining Who Paid for Inventoried 
Utilities, Access, and Facilities,'' and revises the direction 
previously contained in Sec. Sec.  33.42(a) and (b) to provide greater 
clarity to Forest Service employees and cabin owners concerning 
criteria for determining who paid for capital improvements and to 
clearly identify the burden of the Forest Service to produce evidence 
that capital improvements were paid by a party other than the cabin 
owner or their predecessor.
    However, the Forest Service disagrees with those respondents who 
commented that CUFFA directs the Forest Service to ``prove'' that 
capital costs for access, utilities, and facilities were paid for by 
the Forest Service or a third party. That is a standard much higher 
than the clear language in CUFFA which simply requires the authorized 
officer to have evidence of the payment of capital costs by either the 
Forest Service or a third party.
    2. Hook-up or Tap Fee. The proposed direction in Sec.  33.42(a) 
stated that a hook-up fee or tap fee, which is commonly assessed by a 
utility provider when initiating service to a new customer, does not 
equate to payment of the capital costs of installment of the facilities 
that deliver or transport the utility service to the tract or lot being 
appraised. Many of the comments received disputed this statement, 
asserting that a hook-up or tap fees are an expense to the cabin owner 
and, therefore, are assessed by the provider to pay for the capital 
costs to construct and install the improvements or facilities which 
deliver the utility or service.
    The Forest Service agrees that there may be cases where at least 
some of the hook-up or tap fee assessment is based upon the provider's 
capital costs to install the utility or facility that provides that 
service. Therefore, the direction has been revised in Sec.  33.42(b) to 
instruct authorized officers that if evidence is produced to indicate 
that hook-up or tap fee assessments were implemented to pay for the 
capital costs to construct and install the improvements or facilities 
which deliver the utility or service, then that will serve as the basis 
for the authorized officer to determine that the cabin owner or their 
predecessor who paid a fee have paid for the capital costs of the 
utility or facility providing service to the lot. In most cases, 
however, the amount of the hook-up or tap fee assessed to a new 
customer is established primarily to pay for the utility provider's 
administrative costs incurred as part of activating a new customer, 
such as the establishment of a new file and account and expenses of a 
site visit to enable switches and install metering units owned and 
operated by the provider. In these instances, the hook-up or tap fee 
will not be considered payment by the cabin owner or their predecessor 
for the capital costs of facilities. The final direction has been 
revised to reflect the fact that it is the responsibility of the 
authorized officer to seek evidence to make that determination.
    3. Base User Fees. Many comments disputed the proposed direction 
that provided that if the capital costs of a utility or facility are 
paid for and attributable to the entire service base, then those 
capital costs are assumed to be neighborhood enhancing developments and 
the costs being borne by the provider of a service or utility, not the 
cabin owner or their predecessor. These comments suggest that in 
effect, all customers who are assessed a base rate and/or user fee for 
services provided by a utility company or service provider, such as an 
electric company, telephone company, water

[[Page 16628]]

utility district, cable TV provider, and so forth are paying for the 
capital costs of utilities and facilities that provide those types of 
utility or service to a recreation residence lot. The logic of these 
comments would suggest that any cabin owner who is paying base rates 
and user fees for a utility service is paying capital costs to 
construct, operate, and maintain the facilities that provide or deliver 
that utility or service, even when those base rates and user fees are 
nothing more than that being assessed to every other customer in the 
service area.
    The Forest Service disagrees with these arguments. Applying the 
logic of these comments would mean that only in the rarest of cases 
would there ever be a utility or facility that is providing service to 
a recreation residence lot that would be considered as having been 
provided by a third party, such as a utility or service company 
provider. If that had been the intent of the Congress in drafting this 
provision of CUFFA, then there would have been little purpose served to 
direct that the agency inventory and identify utilities provided by a 
third party. Rather, the Forest Service has interpreted CUFFA to mean 
that there clearly are circumstances in which utilities, access, and 
facilities can be identifiable as having been provided by a third 
party, and most commonly by the utility or service provider, without 
the customer directly incurring the capital costs of utilities, access, 
or facilities. It is the Forest Service's interpretation of section 
606(a)(1) of CUFFA that if the capital costs of any utility, access, or 
facility were not directly paid by the cabin owner or their 
predecessor, then costs will be identified as having been paid for by a 
third party. The payment of a base rate and usage fee is not equivalent 
to direct payment of the capital costs of utility, access, or 
facilities delivering or providing a utility or service.
    4. Tax Supported Roads and Highways. Similar to the issue raised in 
preceding paragraph 3, many respondents asserted that in those cases 
where a tract or lot is accessed by a Federal, State, or county highway 
or road, and where the cabin owner is paying a possessory interest tax 
to the State or county governmental entity who operates and maintains 
that road or highway, is proof that the cabin owner is paying for the 
capital costs of the highway or road through that tax.
    The Forest Service disagrees. The only evidence demonstrating that 
the cabin owner or a predecessor of the cabin owner paid the capital 
costs for a road or highway would be evidence that a public road agency 
assessed a surcharge or lump sum assessment to the cabin owner or their 
predecessor, or a specific road or highway accessing their recreation 
residence.
    Almost all who responded to this section of the proposed direction 
commented that simply making statements in agency direction does not 
equate to providing evidence that the capital costs of inventoried 
utilities, access, and facilities were or were not provided or paid for 
by the cabin owners or their predecessors, and that CUFFA requires 
evidence. The Forest Service agrees with those comments, but in doing 
so, the agency also wants to clarify that it is not the intent to have 
statements in agency direction satisfy the evidence requirements of 
CUFFA. Rather, as previously stated, the provisions in Sec. Sec.  
33.42(a) and (b) of the direction were designed to provide internal 
agency guidance to Forest Service special use permit administrators and 
authorized officers for their use in conducting inventories and in 
making a determination as to who paid for utilities, access, and 
facilities providing services to a lot. Some of those provisions 
describe circumstances which the agency will consider as being prima 
facie evidence for use by an authorized officer in determining who paid 
for the capital costs of certain access, utilities, and facilities.
    The final direction has been revised to more clearly articulate 
this purpose.
    33.7--Holder Notification of Accepted Appraisal Report and Right of 
Second Appraisal. This section directed the authorized officer to 
notify the affected holders when the Forest Service has accepted an 
appraisal report and has determined a new base fee based on that 
appraisal report.
    Comment. A respondent suggested that the authorized officer should 
be required to provide the holders with written justification for his/
her decision for accepting an appraisal report.
    Response. The authorized officer, as stated in section 33.6, may 
accept the estimated value of the typical lot or lots in the appraisal 
for establishing a new base fee for that recreation residence lot or 
lots. The justification for the decision is that the assigned review 
appraiser has determined that the appraisal meets the required 
standards and the value estimate is supported and approved. By law, the 
authorized officer is required to calculate cabin user fees that 
reflect the market value of a lot, including regional and local 
economic influences. Market value incorporates those economic 
influences. It would be redundant for the authorized officer to say 
his/her justification for the decision (determining a new base fee) is 
because he/she complied with law.
    There were no changes made to this section in the final directive.
    33.71b--Appraisal Guidelines. This section of the proposed 
direction addressed the manner in which second appraisals may be 
conducted.
    Comment. One appraisal organization suggested wording to clarify 
the intent of this section and to demonstrate why the recommended 
procedure does not present an ethical conflict in the context of the 
Uniform Standards of Professional Appraisal Practice (USPAP).
    Response. The Forest Service agrees. Section 33.71b has been 
rewritten to more clearly articulate its purpose and explain how the 
procedure is in conformance with USPAP.
    33.72--Reconsideration of Recreation Residence Fee. This section 
provided direction for reconsidering a recreation residence base fee 
following the authorized officer's receipt of reconsideration based on 
the results of a second appraisal.
    Comment. Many comments were received regarding the fact that this 
section of the proposed direction failed to provide guidance to the 
authorized officer on how a final base fee will be established in cases 
where a second appraisal might be materially different from the first 
appraisal. Respondents suggested that it may not be appropriate to, as 
the proposed direction stated, establish a base fee from within the 
range of values established by the first and second appraisals, 
particularly if one of the appraisals was poorly done. For the same 
reason, many who commented were concerned that this provision in the 
proposed direction might lead authorized officers to simply average the 
first and second appraisals, to arrive at an average between the two in 
establishing a new base fee, a practice which might also be 
inappropriate if one or both of the two appraisals were poorly done.
    Response. The language in this section of the proposed direction is 
nearly verbatim to the language provided in section 610(d) of CUFFA 
concerning the establishment of a new base fee pursuant to the results 
of a first and second appraisal. The comments suggest that the Forest 
Service direction restrict or qualify the manner in which the 
authorized officer may exercise discretion to establish a new base fee 
in an amount that is equal to the base fee established by the initial 
or the second appraisal, or is within the range of values, if any, 
between the initial and second appraisals. The Forest Service 
disagrees. The agency believes that this

[[Page 16629]]

discretion is necessary, and yet is adequately prescriptive to assure 
an acceptable degree of consistency by authorized officers in 
exercising it on a case specific basis.
    Regarding comments concerning the inappropriateness of the use of 
appraisals that are ``poorly done,'' the Forest Service notes that any 
appraisal that is presented to an authorized officer for consideration 
in the establishment of a cabin user fee must, pursuant to agency 
direction, first be reviewed by a Forest Service Qualified Review 
Appraiser. The Qualified Review Appraiser determines whether the 
appraisal has been conducted, and the appraisal report has been 
prepared, in a manner consistent with Federal and agency standards, and 
in the case of recreation residence lot appraisals, consistent with the 
appraisal guidelines for recreation residence lots in existence at the 
time that the appraisal was conducted. Only when a Forest Service 
Qualified Review Appraiser conducts a review and makes a determination 
that the appraisal is acceptable for agency use, is it declared 
acceptable for use in determining a recreation residence fee. The same 
review standards will be applied to any second appraisal. Therefore, if 
the term ``poorly done'' equates to not having met established Federal 
and agency standards and specifications for conducting appraisals and 
writing appraisal reports, then it is likely that the appraisal would 
never be approved for agency use and would, therefore, not be used by 
the authorized officer as either a first appraisal or a second 
appraisal in establishing a cabin user fee.
    33.8--Establishing a Recreation Residence Lot Value During the 
Transition Period of the Cabin User Fee Fairness Act. This section of 
the proposed direction addressed the manner in which a base cabin user 
fee would be established upon adoption of the final regulations, 
policies, and appraisal guidelines pursuant to CUFFA. It identified 
that one of three options to be used in establishing a base cabin user 
fee during the transition period: (1) Conduct a new appraisal pursuant 
to these final regulations, policies, and appraisal guidelines; (2) 
Commission a peer review of an existing appraisal that had been 
completed after September 30, 1995; or (3) Establish a new base fee 
using the market value of the typical lot that has been identified in 
an existing appraisal that was completed and approved after September 
30, 1995.
    Comment. Some who responded to this section of the proposed 
direction suggested that permit holders should also be provided with a 
fourth option, one that would give the holders an opportunity, after 
the completion of either a new appraisal (option 1) or a peer review 
(option 2), to request a second appraisal, in accordance with the 
provisions for second appraisals as described in Sec.  33.7.
    Response. The Forest Service disagrees with those who interpreted 
CUFFA in this manner. The three options identified in section 33.8 of 
the proposed direction were intended to reflect the provisions of 
section 614 of CUFFA, which clearly provides that during the transition 
period, these are the only three means by which a new base cabin user 
fee may be established for permits for those lots which were appraised 
on or after September 30, 1995, but before October 11, 2000 (the date 
of enactment of CUFFA). Typical lots representing almost every 
recreation residence lot in the entire National Forest System were 
appraised between these two dates. The only part of section 614 of 
CUFFA that provides holders with the opportunity to seek a second 
appraisal is found in section 614(b)(1)(B), where it speaks to the 
right of a cabin owner to a second appraisal under section 610 of 
CUFFA. Section 610, however, only applies to lots which, at the time of 
enactment of CUFFA, had not been appraised after September 30, 1995. As 
stated above, typical lots representing almost every recreation 
residence lot in all of the National Forest System had been appraised 
between September 30, 1995 and the date of enactment of CUFFA (October 
11, 2000). Section 610 of CUFFA, which provides for the right of a 
second appraisal, is interpreted by the Forest Service to apply to 
those lots which were not appraised between September 30, 1995 and 
October 11, 2000, but instead may have been appraised since October 11, 
2000. There are only rare instances in which this has occurred. The 
provisions of section 610 of CUFFA, and as expanded upon in section 
33.7 of the final policy direction concerning the right of a permit 
holder to a second appraisal will, of course, also apply to any and all 
appraisals of typical lots in the next regularly scheduled appraisal 
cycle, which will begin as early as 2006. The right of a second 
appraisal will not apply to the establishment of a new base cabin user 
fee during the transition period, as that period is defined in section 
614 of CUFFA and in Sec.  33.8 of the final policy direction.
    The direction in Sec.  33.8 has been revised in the final directive 
to make it clear that the options described in paragraphs 1 through 3, 
and explained in further detail in Sec.  33.81 through 33.83, are the 
only means by which a new base cabin user fee is established during the 
transition period for those lots which were appraised between September 
30, 1995 and October 11, 2000. Holders who request a new appraisal or 
the commissioning of a peer review will not have the right to request a 
second appraisal as provided for in section 33.7.
    33.83--Requests for Peer Review Conducted Under Regulations. This 
section of the proposed direction addressed the manner in which peer 
reviews may be requested, conducted, and used.
    Comment. One appraisal organization requested that the Department 
provide immunity or indemnification for its role in facilitating a peer 
review.
    Response. The Forest Service consulted with the Office of the 
General Counsel and was advised that the government has no authority to 
provide either immunity or indemnification to the appraisal 
organization as requested. The Forest Service and Office of the General 
Counsel consulted with the appraisal organization staff and counsel to 
discuss alternatives the organization could take absent government 
immunity or indemnification. The appraisal organization agreed to 
pursue alternative means to address concerns about potential liability 
of its members.
    There were no changes made to this section in the final directive.
    Comment. Two appraisal organizations suggested wording to clarify 
the type of review intended in section 33.83.
    Response. The Forest Service agrees. Section 33.83 will be 
rewritten to more clearly articulate its purpose and identify the type 
of review contemplated in conformance with Uniform Standards of 
Professional Appraisal Practice (USPAP).
    Comment. Some who responded to this section of the proposed 
direction suggested that one of the products of a peer review is to 
recommend that the appraisal being reviewed is so seriously flawed that 
it be discarded for use.
    Response. The Forest Service disagrees with these comments. 
Paragraphs ``a'' and ``b'' in section 33.83 of the proposed direction 
identified actions that will be taken, or could be taken, as a result 
of the findings of a peer review. They identified that when a peer 
review results in a finding that the appraisal being reviewed was not 
conducted in a manner consistent with the regulations, policies, and 
appraisal guidelines, the authorized officer shall either establish a 
new base fee that reflects consistency with CUFFA

[[Page 16630]]

regulations, policies, and appraisal guidelines, or provide the 
opportunity for the holders to request a new appraisal, in accordance 
with the provisions of CUFFA and these regulations, policies, and 
appraisal guidelines. If a new appraisal is requested and conducted, it 
would replace the existing appraisal and be used as the basis for 
establishing a new base cabin user fee. The Forest Service believes 
that these provisions in the proposed direction are consistent with the 
provisions for conducting and utilizing a peer review identified in 
section 614(c)(4) of CUFFA.
    Comment. Some respondents suggested that one of the purposes or 
outcomes of the peer review should be to allow peers to recommend that 
the appraisal being reviewed be thrown out as just an incompetent 
appraisal. The provisions at Sec.  33.83 don't provide for that, and 
instead identify that the results of the peer review are only to 
determine whether the appraisal was conducted in a manner consistent 
with regulations, policies, or the appraisal guidelines being adopted 
pursuant to CUFFA.
    Response. The two situations described above are not in conflict. 
If a peer review results in a determination that the appraisal was not 
conducted in a manner consistent with the regulations, policies, and 
appraisal guidelines pursuant to CUFFA, the authorized officer shall 
either establish a new base fee to reflect consistency with the 
regulations, policies, and appraisal guidelines or conduct a new 
appraisal. Either of these options has the practical effect of 
``throwing out'' the original appraisal because it is no longer the 
basis for the fee determination.
    Comment. Many comments were received concerning those provisions 
which outlined the manner in which a peer review will be conducted, and 
that it will be based upon the membership in a professional appraisal 
organization of the appraiser who conducted the appraisal being 
reviewed. The direction went on to identify criteria for identifying 
the assignment of an appraiser to conduct the peer review and whether 
the appraiser who conducted the appraisal being reviewed was or was not 
a member of one or more appraisal sponsor organizations of The 
Appraisal Foundation. Those who commented on these criteria said that 
this constitutes a bias in favor of The Appraisal Foundation, and that 
given the history of the role of The Appraisal Foundation in the 
creation of CUFFA, there is no reason in preferring The Appraisal 
Foundation over any other appraisal organization.
    Response. The Appraisal Foundation has no individual appraiser 
members, only sponsor organization members. Therefore, no appraisal may 
be referred to TAF for peer review.
    There were no revisions made to this section.

Forest Service Handbook 5409.12--Appraisal Handbook

Chapter 60--Appraisal Contracting
    Section 66, Exhibit 03--Required Specifications for Appraisal of 
Recreation Residence. This section containing exhibits 06 and 07 was 
coded in a single digit coding scheme when published for notice and 
comment. The section is now coded in a two digit coding scheme (sec. 
66) to conform it to the other sections in FSH 5409.12, chapter 60, 
which were revised on February 23, 2005. The exhibits for recreation 
residences are now enumerated as exhibit 03 (previously exhibit 06) and 
exhibit 04 (previously exhibit 07) respectively.
    This section contained the technical appraisal provisions and 
guidelines enumerated in section 606 of CUFFA. More than 1,500 comments 
were received addressing various provisions of the proposed appraisal 
specifications. Approximately 400 comments addressing specific sections 
of exhibit 06 were submitted via a fill-in-the-blank standard form. 
Each of those issues raised on the standard form are addressed in the 
order in which the subject of those comments appears in the appraisal 
specifications in exhibit 06.

General Comment on Exhibit 03

    Comment. There are inconsistencies in definitions and the use of 
language throughout the specifications, and they will invite problems 
in the future. The language should mirror CUFFA and there should be no 
repetitions.
    Response. The specifications were developed to incorporate 
direction found in CUFFA and mirror the language found there. However, 
there are areas where either CUFFA was silent on a particular aspect of 
the appraisal process or additional clarification and direction were 
necessary. These specifications were developed to be as clear and 
concise as possible, yet provide consistent guidance for appraisers 
preparing recreation residence lot appraisals. If the purpose of agency 
rule making and developing agency direction and guidelines were to 
simply repeat statutory language, then it would serve no purpose at 
all. Doing so would only establish unclear and ambiguous rules, 
policies, and guidelines, adding confusion and frustration to the 
appraisal process. Therefore, where some of the language in CUFFA may 
be subject to varying interpretations or applications, the department's 
rules and the agency's directives and guidelines serve to further 
refine and define that language as needed to preclude inconsistency in 
exercising CUFFA's direction and authority.
    Section C-2.1(e) of Section 66, Exhibit 03. This section required 
that upon request by the government, during the 2-year period following 
the date of the appraisal report, the Contractor will update the value 
as of a specified date.
    Comment. Those who commented suggested that the value of the 
typical lot being appraised should be as of the date of the inspection 
of that typical lot and it should not change for 2 years. The comments 
suggested that CUFFA does not provide for this.
    Response. CUFFA is silent regarding the need for an update within a 
specified period of time. Generally, the date of value will remain 
constant. However, there may be a need to retain this option to 
accommodate unforeseen circumstances. For example, if there is severe 
timber blow down, fire, or flood, it may be necessary to reappraise the 
typical lot affected by the natural disaster to recalculate the fee if 
a decision is made to reauthorize the permit. If this occurs, the date 
of value may change to reflect the negative impact of the natural 
disaster upon the permitted lot.
    There were no changes made to this section.
    Section C-2.1(g) of Section 66, Exhibit 03. This section references 
appropriate places to find the definitions of terms.
    Comment. Those who commented on this section suggested that the 
language in CUFFA should be included here, as an additional reference 
for definitions.
    Response. The Forest Service agrees. Section C-2.1(g) will be 
modified to read, ``Unless specifically defined herein or in CUFFA 
Section 604, USPAP, or UASFLA, definitions of all terms are the same as 
those found in ``The Dictionary of Real Estate Appraisal'' (Appraisal 
Institute), current edition. UASFLA shall take precedence in any 
differences among definitions.''
    Section C-2.2(b)(1) of Section 66, Exhibit 03. Item 7 in 
this section contained the language ``the adoption of an uninstructed 
assumption or hypothetical condition that results in other than `as is' 
market value will invalidate the appraisal.''
    Comment. This language is unnecessary because the appropriate 
prohibitions are already part of the

[[Page 16631]]

appraisal requirements in USPAP and this statement does nothing other 
than confuse the appraiser.
    Response. The Forest Service disagrees. USPAP allows the appraiser 
the latitude to incorporate extraordinary assumptions and/or 
hypothetical conditions into the report, as long as it does not produce 
a misleading result. This is a different scenario than an ``as is'' 
market value. Most recreation residence lots cannot be valued in an 
``as is'' state because of permit holder provided improvements made to 
the lot and direction provided in CUFFA.
    There were no changes made to this section.
    Section C-2.2(b)(2)(3)(b) of Section 66, Exhibit 03. This section 
referenced a ``Neighborhood Map.''
    Comment. Use of the term ``neighborhood'' should be avoided, and in 
its place, the term ``tract'' should be used. Use of the term 
``neighborhood'' leaves the impression that recreation residence tracts 
are subdivisions, which perpetuates errors in the selection of 
comparable sales. This would be inconsistent with section 
606(b)(1)(B)(ii) of CUFFA, which specifically states that a ``* * * 
typical lot will not usually be equivalent to a legally subdivided 
lot.''
    Response. The Forest Service partially agrees. The ``neighborhood 
map'' is intended to depict the tract and the surrounding area in order 
to provide the user of the appraisal report with perspective of the 
property around the recreation residence tract, including major 
geographic features, proximity to other uses, water features, access, 
and general services. Use of the term ``tract'' would limit this over-
view of the area to only the tract, and would not provide a ``picture'' 
of the surrounding area. The term ``neighborhood'' has generally been 
replaced by ``market area'' which is defined in ``The Dictionary of 
Real Estate Appraisal,'' current edition, as ``the geographic or 
locational delineation of the market for a specific category of real 
estate, i.e., the area in which alternative, similar properties 
effectively compete with the subject property in the minds of probable, 
potential purchasers and users.'' References to ``neighborhood'' will 
be replaced by ``market area.''
    Section C-2.2(b)(2)(4)(a) of Section 66, Exhibit 03. This section 
referred to timber and commercial value for mineral deposits in 
appraisals.
    Comment. CUFFA does not allow the Forest Service to establish a 
cabin user fee based upon the value of the timber and minerals on a 
recreation residence lot. The inclusion of these factors will likely 
lead to confusion among appraisers. This section should reference 
``timber'' as ``trees,'' and should eliminate all reference to mineral 
values.
    Response. The Forest Service disagrees. Timber, minerals, and other 
resources are elements of value that have potential to impact the value 
concluded for an appraised property. The Forest Service appraisal 
guidelines confine the highest and best use analysis to use as a 
recreation site. The above-referenced property characteristics can only 
be reflected in the value opinion as they contribute to the property's 
highest and best use; a lot suitable for use as a recreation residence 
site.
    There were no changes made to this section of exhibit 03.
    Section C-2.2(b)(2)(4)(e) of Section 66, Exhibit 03. This section 
required the appraiser to cite a ten-year record of the sales of the 
appraised property.
    Comment. This is directly contrary to the terms of CUFFA and will 
mislead appraisers. The sale of the cabin on the typical lot is not the 
same as the market value of the typical lot, and should not be used in 
establishing the appraised value of a typical lot. It has no bearing on 
determining the appraised value of a recreation residence lot.
    Response. The cited section specifically states, ``include a ten-
year record of all sales of the appraised property * * *''. The 
appraised property is the lot owned by the United States. The ``actual 
cabin'' is not owned by the United States and is not the subject of the 
appraisal. The appraiser is not required to cite the sale of the 
``actual cabin.''
    There were no changes made to this section of exhibit 03.
    Section C-2.2(b)(2)(4)(f) of Section 66, Exhibit 03. This section 
referred to the highest and best use of the lot.
    Comment. Highest and best use should not be addressed in this part 
of the appraisal specifications. A subsequent definition of ``highest 
and best use'' correctly defines it as a recreation residence use, so 
why have it in this part of the specifications.
    Response. Section C-2.2(b)(2)(4)(f) discusses ``Zoning and Other 
Land-Use Restrictions.'' It is important to provide instruction to the 
appraiser indicating how these restrictions are to be considered, in 
order to ensure consistency. The Analysis of Highest and Best Use 
section follows immediately below the cited section and properly 
restricts the appraiser's consideration of highest and best use to the 
appraised property's suitability use as a recreation residence lot.
    There were no changes made to this section of exhibit 03.

4. Regulatory Certifications

Environmental Impact

    These directives revise the administrative procedures for 
determining market value for recreation residences on National Forest 
System lands. Section 31.1b of Forest Service Handbook (FSH) 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 preliminary assessment is 
that these final directives fall within this category of actions and 
that no extraordinary circumstances exist which would require 
preparation of an environmental assessment or environmental impact 
statement.

Regulatory Impact

    These final directives have been reviewed under USDA procedures and 
Executive Order 12866 on Regulatory Planning and Review. OMB has 
determined that this is not a significant action. The final directives 
would not have an annual effect of $100 million or more on the economy, 
or adversely affect productivity, competition, jobs, the environment, 
public health or safety, or State or local governments. The final 
directives would not interfere with an action taken or planned by 
another agency, or raise new legal or direction issues. Finally, these 
final directives would not alter the budgetary impacts of entitlements, 
grants, or loan programs or the rights and obligations of recipients of 
these programs.

No Takings Implications

    These final directives have been analyzed in accordance with the 
principles and criteria contained in Executive Order 12630. It has been 
determined that the final directives do not pose the risk of a taking 
of protected private property.

Civil Justice Reform

    These final directives have been reviewed under Executive Order 
12988, ``Civil Justice Reform''. After adoption of these final 
directives, (a) all State and local laws and regulations that conflict 
with these final directives or that would impede full implementation 
will be preempted; (2) no retroactive effect would be given to these 
final directives; and (3) the Department will not require the use of 
administrative proceedings before parties may file suit in court 
challenging their provisions.

[[Page 16632]]

Unfunded Mandates

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), which the President signed into law on March 22, 
1995, the agency has assessed the effects of these final directives on 
State, local, and tribal governments and the private sector. These 
final directives would 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.

Federalism and Consultation and Coordination With Indian Tribal 
Governments

    The agency has considered these final directives under the 
requirements of Executive Order 13132 on federalism, and has made an 
assessment that the final directives conform 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 on the States, on the relationship between the Federal 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, the 
agency has determined that no further assessment of federalism 
implications is necessary at this time.
    Moreover, these final directives do not have tribal implications as 
defined by Executive Order 13175, ``Consultation and Coordination with 
Indian Tribal Governments'', and, therefore, advance consultation with 
tribes is not required.

Energy Effects

    These final directives have been reviewed under Executive Order 
13211 of May 18, 2001, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply.'' It has been determined that these 
final directives do not constitute a significant energy action as 
defined in the Executive order.

Controlling Paperwork Burdens on the Public

    The information collection associated with the permitting and 
administration of recreation residences are covered under the approved 
Office of Management and Budget (OMB) control number 0596-0082. 
However, as provided by Section 614 of the Cabin User Fee Fairness Act 
of 2000 ((CUFFA) 16 U.S.C. 6210-13) the final directive does contain a 
new one-time information collection requirement in FSH 2709.11, 
Sec. Sec.  33.8 through 33.83. Accordingly, the review provisions of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and its 
implementing regulations at 5 CFR part 1320 do apply. Approval of this 
information collection requirement has been submitted for approval to 
the OMB. The agency expects the new information collection requirement 
required by CUFFA to be approved by OMB prior to implementation of the 
provisions in sections 33.8-33.83.

    Dated: January 4, 2006.
Dale N. Bosworth,
Chief.

5. Text of Final Directives

    Note: The Forest Service organizes its Directive System by 
alphanumeric 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 for this direction is 
Forest Service employees charged with issuing and administering 
recreation residence special use authorizations.

Forest Service Manual

Chapter 2340--Privately Provided Recreation Opportunities
    2340.5--Definitions.
* * * * *
    Caretaker Cabin. A residence that is authorized in limited cases to 
provide caretaker services and security to a recreation residence 
tract.
* * * * *
    2347.1--Recreation Residences. (For further direction, see FSM 
2721.23 and FSH 2709.11.) Recreation residences are a valid use of 
National Forest System lands. They provide a unique recreation 
experience to a large number of owners of recreation residences, their 
families, and guests. To the maximum extent practicable, the recreation 
residence program shall be managed to preserve the opportunity it 
provides for individual and family-oriented recreation. It is Forest 
Service direction to continue recreation residence use and to work in 
partnership with holders of these permits to maximize the recreational 
benefits of recreation residences.
* * * * *
    7. Authorize community- or association-owned and maintained 
improvements under a separate permit and authority appropriate for that 
use (see FSH 2709.11, sec. 33.05, definition of ``related 
improvements'' and FSM 2721.23c, para. 3.)
* * * * *
    2347.12--Caretaker Cabins.
    2347.12a--Permits.
    1. Authorize caretaker cabin use of a recreation residence lot with 
an annual permit, Form FS-2700-4, under the Organic Act (16 U.S.C. 
551). Require applicants who have a recreation residence permit (Form 
FS-2700-5a) to relinquish that permit as a condition of qualifying for 
a caretaker cabin permit. A caretaker cabin may be owned by a tract 
association, and the permit may be issued in the name of the head of 
that association.
    2. Coordinate applications for caretaker cabin permits with local 
governmental agencies to avoid creating unreasonable demands for public 
services such as snow plowing, mail delivery, garbage pickup, school 
bus services, or emergency services.
    3. If a recreation residence ceases to be used as a caretaker 
cabin, the holder of the caretaker cabin permit may apply for and, if 
qualified, be issued a recreation residence permit.
    2347.12b--Caretaker Cabin Use. The need for a caretaker cabin can 
rarely be justified where yearlong occupancy is already authorized in 
the tract. The Forest Supervisor may authorize a caretaker cabin 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 base 
cabin user fee for a caretaker cabin permit shall not exceed the base 
cabin user fee charged for the use of the lot as a recreation 
residence. That fee shall be determined as follows:
    1. The base cabin user fee for a caretaker cabin located in a 
recreation residence tract shall not exceed the base cabin user fee for 
a similar typical lot in that tract (see FSH 2709.11, section 30.05, 
for definitions of ``base cabin user fee'' and ``typical lot'').
    2. When a caretaker cabin is not located in a recreation residence 
tract, the base cabin user fee for the caretaker cabin shall not exceed 
the base cabin user fee for a similar typical lot in the recreation 
residence tract being monitored by the caretaker cabin permit holder 
(see FSH 2709.11, section 30.05, for definitions of ``base cabin user 
fee'' and ``typical lot'').
* * * * *
Chapter 2720--Special Uses Administration
* * * * *
    2721.23--Recreation Residences.
* * * * *
    2721.23d--Fee Determination.
    1. Use market value as determined by appraisal in determining the 
base annual fees for recreation residence lots. Determine a new base 
fee at 10-year intervals.

[[Page 16633]]

Forest Service Handbook (FSH) 2709.11--Special Uses Handbook

Chapter 30--Fee Determination
* * * * *
    33--Recreation Residence Lot Fees. Recreation residence lot fees 
shall be assessed and paid annually.
    33.05--Definitions.
    Cabin. A privately built and owned recreation residence that is 
authorized to use and occupy National Forest System land.
    Majority. More than 50 percent.
    Market Value. The amount in cash, or on terms reasonably equivalent 
to cash, for which in all probability the property would have sold on 
the effective date of the appraisal, after a reasonable exposure time 
on the open competitive market, from a willing and reasonably 
knowledgeable seller to a willing and reasonably knowledgeable buyer, 
with neither acting under any compulsion to buy or sell, giving due 
consideration to all available economic uses of the property at the 
time of the appraisal.
    Natural, Native State. The condition of a lot or site, free of any 
improvements, at the time at which the lot or site was first authorized 
for recreation residence use by the Forest Service.
    Recreation Residence. A privately owned, noncommercial residence 
located upon National Forest System lands and authorized by a 
recreation residence term special use permit. A recreation residence is 
maintained by the permit holder for personal, family, and guest use and 
enjoyment. A recreation residence shall not serve as a permanent 
residence.
    Recreation residence lot. (For this definition, see 36 CFR 251.51.)
    Related Improvements.
    a. For the purpose of defining a recreation residence lot (36 CFR 
251.51), ``related improvements'' include not only the examples of 
facilities and uses owned and maintained by the holder identified at 36 
CFR 251.51, but may also include, but are not limited to, the following 
holder owned facilities or uses of National Forest System lands being 
actively operated and maintained by the holder in conjunction with the 
recreation residence use:

    (1) Outbuildings;
    (2) Wood piles;
    (3) Retaining walls;
    (4) Picnic tables;
    (5) Driveways and parking areas;
    (6) Trails and boardwalks;
    (7) Campfire rings, seats, and benches.
    (8) Lawns, gardens, flower beds, and landscaped terraces;
    (9) Manipulated native vegetation, except as provided for in 
paragraph b(1).

    b. Related improvements do not include:
    (1) Native vegetation that is manipulated for the primary purpose 
of protecting property and mitigating safety concerns, such as the 
removal of hazard trees, and the treatment/management of vegetation, 
approved by the authorized officer, to reduce fuel loading and to 
create defensible space for wildfire suppression purposes.
    (2) Tract association- or community-owned improvements or uses, 
such as boat docks, swimming areas, and water or sewer systems that are 
under a separate authorization issued in the name of a tract 
association or other entity representing the owners of the recreation 
residences.
    Term Permit. (For this definition, see 36 CFR 251.51 and FSM 2705.)
    Tract. An established location within a National Forest containing 
one or more cabins authorized in accordance with the recreation 
residence program.
    Typical Lot. A recreation residence lot in a tract that is selected 
for appraisal purposes as being representative of value characteristics 
similar to other recreation residence lots within the tract. All 
recreation residence lots represented by a typical lot shall be 
characterized as a group for appraisal purposes. A tract may have one 
or more groups of lots, with each group represented by a typical lot. A 
typical lot may be the only recreation residence lot in a group, and 
may be appraised to represent only itself, when it has unique value 
characteristics unlike any other recreation residence lot in a tract.
    Urban. A mature neighborhood with a concentration of population 
typically found within city limits or a neighborhood commonly 
identified with a city (The Dictionary of Real Estate Appraisal, Fourth 
Edition).
    33.1--Base Fees and Annual Adjustments.
    33.11--Establishing New Base Fee.
    1. Base Fee. The base fee for a recreation residence special use 
permit shall be equal to 5 percent of the market value of the 
recreation residence lot as determined by appraisal. The base fee shall 
be recalculated at least once every 10 years.
    2. Notification of New Base Fee. The authorized officer shall 
notify the holder in writing at least one (1) year in advance of 
implementation that a new base fee has been determined by appraisal 
conducted in accordance with procedures contained in section 33.4 of 
this Handbook. If a second appraisal, secured by the holder (sec. 33.7) 
and approved by the agency, prompts the authorized officer to 
reconsider the new base fee amount, the revision to the base fee may be 
implemented at any time after the end of the one-year period following 
the initial notification.
    3. Effective Date of New Base Fee. The date of a billing for 
payment of a new base fee, or the date of a billing for the first 
payment of a phase-in amount (sec. 33.12) of a new base fee, shall 
constitute the date of implementation of the new base fee.
    33.12--Phase-in of Base Fee. Require the holder to pay the full 
amount of a new base fee if that new base fee results in an increase of 
100 percent or less from the amount of the most recent annual fee 
assessed the holder.
    When the new base fee is greater than a 100 percent increase from 
the amount of the most recent annual fee assessed the holder, implement 
the new base fee increase in three (3) equal increments over a 3-year 
period. Annual adjustments (sec. 33.13) shall be included in the 
calculation of fees that are incrementally phased-in over the 3-year 
period. Exhibit 01 illustrates the manner in which a new base fee would 
be phased-in when the new base fee results in an increase of more than 
100 percent from the most recent annual fee assessed the holder.
    33.12--Exhibit 01.

   Phase-in When New Base Fee Results in an Increase of More Than 100
       Percent From the Most Recent Annual Fee Assessed the Holder
------------------------------------------------------------------------
                                     2008 New base
          2007 Fee amount                 fee             Increase
------------------------------------------------------------------------
$700                                        $1,600  $900 (>100%
                                                     increase).
------------------------------------------------------------------------


2008 Phase-in Fee: $700 (2007 fee) + $300 (\1/3\ of fee increase >100%)
 = $1,000.
 
2004 Phase-in Fee: $1,000 (2008 fee) + $300 (\1/3\ of fee increase
 >100%) x 1.03* (annual IPD-GNP increase of 3%) = $1,339.
 

[[Page 16634]]

 
2010 Phase-in Fee: $1,339 (2009 fee) + $300 (\1/3\ of fee increase
 >100%) x 1.03* (annual IPD-GNP increase of 3%) = $1,688.
 
2011 Phase-in Fee: $1,688 (2010 fee) x 1.03* (annual IPD-GNP increase of
 3%) = $1,739.
------------------------------------------------------------------------
* 3% annual IPD-GNP adjustment is used for illustrative purposes only.
  The actual annual IPD-GNP rate would be used for each of the phase-in
  amounts in years 2009 through 2011.

    33.13--Annual Adjustment of Recreation Residence Fee. Recreation 
residence fees shall be adjusted annually using the 2nd quarter to 2nd 
quarter change in the Implicit Price Deflator, Gross National Product 
(IPD-GNP).
    An annual adjustment to the base fee shall be no more than 5 
percent in any single year. When the annual change to the IPD-GNP 
results in an annual adjustment of more than 5 percent, apply the 
amount of the adjustment in excess of 5 percent to the annual fee 
payment for the next year in which the change in the index factor is 
less than 5 percent. Exhibit 01 provides two examples on how annual 
fees are adjusted in years during which the annual change in the IPD-
GNP index exceeds 5 percent.
    33.13--Exhibit 01.

    Phase-in of Fees When Increase Exceeds 5 Percent in a Single Year
EXAMPLE 1--Only 1 year in which the IPD-GNP adjustment exceeds 5%:
 
    2007 Fee = $700
 
        2008 IPD-GNP adjustment = 7%*
        ($700 x .07 = $49)
        Maximum adjustment/year = 5% ($35)
        2008 carryover adjustment = 2% ($14)
 
    2008 Fee = $700 (2004 fee) x .05 (max. adj/yr.) = $735
 
        2009 IPD-GNP adjustment = 3%*
        Carryover adjustment from 2008 = $14
 
    2009 Fee = $735 (2008 fee) + $14 (2008 carryover) x 1.03 = $771
 
EXAMPLE 2--Multiple-year IPD-GNP adjustments exceeding 5%.
 
    2007 Fee = $700
 
        2008 IPD-GNP adjustment = 7%*
        ($700 x .07 = $49)
        Maximum adjustment/year = 5% ($35)
        2008 carryover adjustment = 2% ($14)
 
    2008 Fee = $700 (2007 fee) x 1.05 (max. adj/yr.) = $735
 
        2009 IPD-GNP adjustment = 7%*
        ($735 x .07 = $51)
        Maximum adjustment/year = 5% ($37)
        2009 carryover adjustment = 2% ($14)
            Total carryover (2008 & 2009) = $28
 
    2009 Fee = $735 (2008 fee) x 1.05 (max. adj/yr.) = $772
 
        2010 IPD-GNP adjustment = 3%* (2 (above) shall be assessed as a premium fee amount, 
payable in full or in three (3) equal annual installments, in 
addition to the phase-in of the new base user fee established by the 
results of the new appraisal.

    The authorized officer shall, upon receipt of a formal request, 
initiate a new appraisal of the typical lot in accordance with the 
regulations, policies, and appraisal guidelines adopted pursuant to 
CUFFA. The date of value of the new appraisal shall be the same date of 
value as that identified in the appraisal report it is intended to 
replace.

[[Page 16639]]

    33.83--Request for Peer Review Conducted Under Regulations, 
Policies, and Appraisal Guidelines Established Pursuant to CUFFA.
    A request for a peer review of an existing appraisal report 
completed after September 30, 1995, shall be made within 2 years 
following the adoption of regulations, policies, and appraisal 
guidelines for recreation residences pursuant to CUFFA. The request 
shall be submitted in writing to the authorized officer and must be 
signed by a majority of the recreation residence holders within the 
group of recreation residence lots represented by the typical lot that 
was appraised. The holders requesting the peer review shall, in their 
request, agree to collectively pay for one-half the cost to commission 
the review. In addition, holders requesting a peer review where the 
appraisal to be reviewed established a base fee that was more than a 
$3,000 annual increase to the fee being assessed the holders on October 
1, 1996, shall include the statement contained in exhibit 01 as a part 
of their request. The information required in the statement will be 
provided to the holder by the authorized officer.
    33.83--Exhibit 01.
    Statement for Holders Requesting Peer Review When Previous 
Appraisal Indicated a Base Fee Increase of More Than $3,000 from Annual 
Fee Assessed on October 1, 1996. 

    We hereby agree that, if the new base fee from the peer review 
results in an amount that is 90 percent or more of the fee 
determined by the previously completed appraisal of this typical lot 
(specifically, that appraisal dated --------, with an estimated fee 
simple value of $ --------, and an indicated annual fee of $ ------
--), then each of the permit holders within this group of recreation 
residence (indicate tract name and lots) shall be obligated to pay 
to the United States the following:
    1. The base fee that shall be established pursuant to this peer 
review, subject to the phase-in provisions of section 609 of CUFFA; 
and
    2. The difference between (a) the annual fee that was paid 
during calendar years --------, -------- , -------- (enter each 
calendar year beginning with that year when a new base fee based 
upon the above-referenced appraisal would have otherwise been 
implemented), and ending with calendar year -------- (insert the 
calendar year in which the request for a peer review is made), and 
(b) the amount that the annual fee for each of those identified 
calendar years would otherwise have been, had a new base fee been 
assessed as a result of the above-referenced appraisal, pursuant to 
the phase-in provisions in effect and applicable during that time. 
This difference for those calendar years cumulatively totals $ ----
----, as itemized on the enclosed worksheet (enter the cumulative 
difference, and include an attached worksheet showing how it was 
calculated, itemized for each of the calendar years identified 
above). We agree that the cumulative amount identified in Item 
2 (above) will be assessed as a premium fee amount, payable 
in full or in three (3) equal annual installments, in addition to 
the phase-in of the new base user fee established by the results of 
the peer review.

    The authorized officer shall commission a peer review of the 
existing appraisal report upon receipt of a written request to do so 
and upon submission of the appropriate documentation that shows that 
the request is being made by a majority of the holders affected. The 
manner in which the peer review is conducted shall be based upon the 
membership in a professional organization of the appraiser who 
conducted that appraisal as follows:
    1. Appraisals Prepared by an Appraiser Who Is a Member of a Single 
Appraisal Sponsor Organization of the Appraisal Foundation. If the 
appraiser who prepared the appraisal report that will be reviewed is a 
member of a single appraisal sponsor organization of the Appraisal 
Foundation, the authorized officer shall submit the appraisal report, 
appraisal review report, and peer review report instructions to that 
appraisal sponsor organization for assignment to a member of an 
established panel of accredited or designated members selected by the 
sponsor organization for the purpose of peer review. In consultation 
with the accredited or designated panel member, the sponsor 
organization shall provide the authorized officer an estimate of total 
cost for the peer review. The authorized officer shall consult with a 
representative of the permit holders requesting the peer review to 
determine if the holders wish to proceed with the review, based on the 
estimated cost. If a peer review is conducted, the review report shall 
be prepared in compliance with the review instructions provided with 
the existing appraisal report. The peer review report shall be confined 
to an evaluation of whether the original appraisal report includes 
provisions or procedures that were implemented or conducted in a manner 
that is inconsistent with regulations, policies, or appraisal 
guidelines adopted pursuant to CUFFA and, if so, which provisions and 
to what effect. The peer review report is intended to be an 
administrative review report in conformance with the USPAP.
    2. Appraisals Prepared by an Appraiser Who Is Not a Member of a 
Sponsor Organization, or Is a Member of Two or More Sponsor 
Organizations of the Appraisal Foundation. If the appraiser who 
prepared the appraisal report that will be reviewed is not a member of 
a sponsor organization of the Appraisal Foundation, or is a member of 
two or more sponsor organizations of the Appraisal Foundation, the 
authorized officer shall submit the appraisal report, appraisal review 
report, and peer review report instructions, after consultation with 
the requesting permit holders, to a sponsor organization that has 
established a panel for peer review of recreation residence lot 
appraisals. If the authorized officer and a majority of the requesting 
permit holders cannot agree on which sponsor organization to solicit 
for the peer review, the authorized officer shall make the decision 
based upon a recommendation from the Regional Appraiser. The authorized 
officer shall request the selected appraisal sponsor organization to 
assign a member of the established panel of accredited or designated 
members to conduct the peer review. The authorized officer shall also 
request the sponsor organization to provide the authorized officer, in 
consultation with the accredited or designated panel member, an 
estimate of total cost for the peer review. The authorized officer 
shall consult with a representative of the requesting permit holders to 
determine if the holders want to proceed with the review, based on the 
estimated costs. If a peer review is conducted, the review report shall 
be prepared in compliance with the review instructions provided with 
the existing appraisal report. The peer review report shall be confined 
to evaluation of whether the original appraisal report includes 
provisions or procedures that were implemented or conducted in a manner 
that is inconsistent with regulations, policies, or appraisal 
guidelines adopted pursuant to CUFFA and, if so, which provisions and 
to what effect. The peer review report is intended to be an 
administrative review report in conformance with the USPAP.
    a. If the peer review shows that the appraisal report is consistent 
with the regulations, policies, and appraisal guidelines adopted 
pursuant to CUFFA, the authorized officer shall establish a new base 
fee using 5 percent of the fee simple value of the typical lot 
identified in the appraisal report.
    b. If the peer review results in a determination that the appraisal 
report was not conducted in a manner consistent with the regulations, 
policies, and appraisal guidelines adopted pursuant to CUFFA, the 
authorized officer shall either:
    (1) Establish a new base fee to reflect consistency with the 
regulations,

[[Page 16640]]

policies, and appraisal guidelines adopted pursuant to CUFFA, or
    (2) Conduct a new appraisal in accordance with the provisions of 
CUFFA if requested by a majority of the affected holders.
* * * * *

FSH 5409.12--Appraisal Handbook

Chapter 60--Appraisal Contracting
    65--Contract Appraisals for Special Purposes.
    65.3--Recreation Residence Lots.
    The standard specifications for recreation residence lot appraisals 
shall be used Service-wide (sec. 66, ex. 03). Do not modify or deviate 
from these specifications without the approval of the Washington 
Office, Director of Lands.
    Require all appraisers conducting a second appraisal for a 
recreation residence lot to submit an Assignment Agreement (sec. 66, 
ex. 04).
    66--Exhibits.
    1. Exhibit 03--Basic Specifications for the Appraisal of Recreation 
Residence Lots.
    2. Exhibit 04--Assignment Agreement for the Appraisal of Recreation 
Residence Lots.

BILLING CODE 3410-11-P

[[Page 16641]]

[GRAPHIC] [TIFF OMITTED] TR03AP06.000


[[Page 16642]]


[GRAPHIC] [TIFF OMITTED] TR03AP06.001


[[Page 16643]]


[GRAPHIC] [TIFF OMITTED] TR03AP06.002


[[Page 16644]]


[GRAPHIC] [TIFF OMITTED] TR03AP06.003


[[Page 16645]]


[GRAPHIC] [TIFF OMITTED] TR03AP06.004


[[Page 16646]]


[GRAPHIC] [TIFF OMITTED] TR03AP06.005


[[Page 16647]]


[GRAPHIC] [TIFF OMITTED] TR03AP06.006


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[[Page 16649]]


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[[Page 16650]]


    Note: The following table will not appear in the Forest Service 
Manual or Forest Service Handbook.


     Table I.--Section-by-Section Comparison Between the Proposed and Final Recreation Residence Directives
----------------------------------------------------------------------------------------------------------------
                                        Forest Service manual
           CUFFA reference              or  handbook directive     Proposed direction        Final direction
----------------------------------------------------------------------------------------------------------------
Section 604..........................  FSM 2340.5--Definitions  Added definition for     Revises the definition
                                                                 ``caretaker cabin.'' A   of ``caretaker cabin''
                                                                 caretaker cabin is a     to more closely
                                                                 residence occupying a    reflect the
                                                                 lot within a             description in CUFFA.
                                                                 recreation residence
                                                                 tract that is being
                                                                 used to provide
                                                                 caretaker services and
                                                                 security to the
                                                                 recreation residences
                                                                 within that tract.
Section 602 and 603..................  FSM 2347.1--Recreation   Maintained existing      No changes except to
                                        Residences.              language of old          add direction that
                                                                 directive, but added     community owned
                                                                 direction that the       improvements are to be
                                                                 Forest Service shall,    authorized under
                                                                 to the maximum extent    separate permit and
                                                                 practicable, manage      authority.
                                                                 the recreation
                                                                 residence program to
                                                                 preserve the
                                                                 opportunity for
                                                                 individual and family-
                                                                 oriented recreation.
Sections 604 and 607(b)..............  FSM 2347.12--Caretaker   Changed section caption  Revised to clarity and
                                        Cabin.                   to ``Caretaker           for purposes of using
                                                                 Cabins,'' and retained   the terminology in the
                                                                 direction for            corresponding
                                                                 authorizing a            provisions in CUFFA.
                                                                 caretaker cabin. FSM
                                                                 2347.12b provided that
                                                                 a fee for a caretaker
                                                                 cabin is the same as a
                                                                 fee for use of the
                                                                 same lot as a
                                                                 recreation residence.
Section 606..........................  FSM 2721.23d--Fee        Established a 10-year    No changes in final
                                        Determination.           appraisal cycle.         directive.
                                       FSH 2709.11, Section     Changed caption to       No changes in final
                                        33--Recreation           ``Recreation Residence   directive.
                                        Residence Lot Fees.      Lot Fees.''
Section 604..........................  FSH 2709.11, Section     Added a section that     Revises definitions for
                                        33.05--Definitions.      defines ``cabin,''       ``cabin,''
                                                                 ``recreation residence   ``recreation
                                                                 lot,'' ``market          residence,'' and
                                                                 value,'' ``tract,''      ``simple majority.''
                                                                 ``typical lot,''         Adds definition of
                                                                 ``recreation             ``urban'' used in
                                                                 residence,'' and         section 33.4.
                                                                 ``natural, native
                                                                 state.''
Sections 606 through 608.............  FSH 2709.11, Section     Changed the caption to   No changes in final
                                        33.1--Base Fees and      ``Base Fees and Annual   directive.
                                        Annual Adjustments.      Adjustments,'' and
                                                                 referenced appraisal
                                                                 procedures addressed
                                                                 in proposed sections
                                                                 33.11 through 33.13.
Sections 606(b)(4)(D) and 607(a).....  FSH 2709.11, Section     This section replaced    No changes in final
                                        33.11--Establishing      the now obsolete         directive, except for
                                        New Base Fee.            direction concerning     numbering and titling
                                                                 fee credit, and          of paragraphs.
                                                                 instead provides that
                                                                 the base fee for a
                                                                 recreation residence
                                                                 lot shall be 5 percent
                                                                 of the market value of
                                                                 the lot as determined
                                                                 by appraisal. It
                                                                 eliminated direction
                                                                 (currently found in
                                                                 sec. 33.1, para. 5)
                                                                 directing that a
                                                                 premium of 25 percent
                                                                 of the base fee or
                                                                 $100 whichever is
                                                                 greater, be added to
                                                                 the base fee for each
                                                                 sleeping structure on
                                                                 a recreation residence
                                                                 (in addition to the
                                                                 recreation residence).
                                                                 This section also
                                                                 provided that the base
                                                                 fee shall be
                                                                 recalculated once
                                                                 every 10 years.

[[Page 16651]]

 
Section 609..........................  FSH 2709.11, Section     This new section         No changes in final
                                        33.12--Phase-in of       provided direction for   directive, except to
                                        Base Fee.                implementing the phase-  make the phase-in
                                                                 in provision of CUFFA,   example an exhibit.
                                                                 and directed a phase-
                                                                 in of fees whenever
                                                                 the establishment of a
                                                                 new base fee results
                                                                 in an increase of more
                                                                 than 100 percent to a
                                                                 holder's most recent
                                                                 annual fee. The
                                                                 section included an
                                                                 example to demonstrate
                                                                 how the phase-in would
                                                                 be applied when a base
                                                                 fee results in more
                                                                 than a 100 percent
                                                                 increase of an annual
                                                                 fee.
                                       FSH 2709.11, Section     Stated that the Forest   No changes in final
                                        33.13--Annual            Service would continue   directive, except to
                                        Adjustments of           to use existing          make the phase-in
                                        Recreation Residence     direction for annually   examples exhibits.
                                        Fees.                    indexing recreation
                                                                 residence rental fees,
                                                                 using the 2nd quarter
                                                                 to 2nd quarter change
                                                                 in the IPD-GNP.
                                                                 However, this section
                                                                 directed the
                                                                 implementation of a
                                                                 maximum adjustment of
                                                                 5 percent in those
                                                                 years in which the
                                                                 annual change in the
                                                                 IPD-GNP index exceeds
                                                                 5 percent, as provided
                                                                 in section 608(d) of
                                                                 CUFFA. Whenever the
                                                                 annualized change in
                                                                 the IPD-GNP exceeds 5
                                                                 percent, then the
                                                                 maximum annual
                                                                 adjustment in the
                                                                 rental fee for such
                                                                 years will be 5
                                                                 percent, and that part
                                                                 of the adjustment in
                                                                 excess of 5 percent
                                                                 would be applied in
                                                                 the next annual rental
                                                                 fee payment when the
                                                                 index change is less
                                                                 than 5 percent. This
                                                                 section included two
                                                                 examples to
                                                                 demonstrate how rental
                                                                 fee increases in
                                                                 excess of 5 percent
                                                                 would be applied when
                                                                 the annualized change
                                                                 in the IPD-GNP exceeds
                                                                 5 percent.
                                                                (Note: Approximately 2
                                                                 years after adopting
                                                                 the proposed rule and
                                                                 proposed directives in
                                                                 this notice, the
                                                                 Forest Service will
                                                                 develop direction to
                                                                 annually adjust
                                                                 recreation residence
                                                                 rental fees using the
                                                                 rolling 5-year average
                                                                 of the ``Index of
                                                                 Agriculture Land
                                                                 Prices'' published by
                                                                 the Department of
                                                                 Agriculture, as
                                                                 directed in section of
                                                                 608(a) and (b) of
                                                                 CUFFA).

[[Page 16652]]

 
Section 607(c) and (d)...............  FSH 2709.11, Section     This section clarified   No changes in final
                                        33.2--Fees When          direction on fees when   directive, except to
                                        Determination is Made    a decision is made to    make the phase-in
                                        To Place Recreation      discontinue the          chart for fees when a
                                        Residence on Tenure.     recreation residence     recreation residence
                                                                 use by providing         is placed on tenure an
                                                                 specific instructions    exhibit.
                                                                 for the assessment of
                                                                 land use fees after a
                                                                 holder has been
                                                                 provided with a
                                                                 minimum 10 years of
                                                                 advance notice of the
                                                                 agency's decision to
                                                                 discontinue the
                                                                 holder's recreation
                                                                 residence use. The
                                                                 proposed directive
                                                                 included a table that
                                                                 demonstrated how the
                                                                 fee is reduced by 10
                                                                 percent each year
                                                                 during the last 10
                                                                 years of the permit
                                                                 term. This section
                                                                 also provided a
                                                                 process for
                                                                 recapturing fees that
                                                                 were forgone, should a
                                                                 subsequent decision be
                                                                 made by the agency not
                                                                 to discontinue the
                                                                 recreation use, but
                                                                 allow it to continue.
Section 607(e).......................  FSH 2709.11, Section     This section provided    No changes in final
                                        33.3--Fee When           agency direction         directive.
                                        Recreation Residence     concerning fee
                                        Use Is Terminated or     obligations of the
                                        Revoked as Result of     holder in the event of
                                        Acts of God or other     a catastrophe or an
                                        Catastrophic Events.     ``act of God'' that
                                                                 precluded the
                                                                 recreation residence
                                                                 from being safely used
                                                                 and occupied for
                                                                 recreation residence
                                                                 purposes. It directed
                                                                 that in such an event,
                                                                 the fee obligations of
                                                                 the holder shall
                                                                 terminate as of the
                                                                 date of the event or
                                                                 occurrence, and
                                                                 provided for a refund
                                                                 of a prorated portion
                                                                 of the fee that has
                                                                 already been paid for
                                                                 the billing year in
                                                                 which the catastrophic
                                                                 event occurred.
Section 606..........................  FSH 2709.11, Section     This section provided    Changes the numeric
                                        33.4--Establishing       technical                coding of the section
                                        Market Value of          considerations and the   and exhibits from a
                                        Recreation Residence     procedures to be         single digit scheme to
                                        Lot.                     followed when            a two digit scheme
                                                                 appraising a             (sec. 66) to conform
                                                                 recreation residence     with other sections in
                                                                 lot.                     FSH 5409.12, chapter
                                                                                          60. The exhibits for
                                                                                          recreation residences
                                                                                          are now enumerated as
                                                                                          ex. 03 (previously ex.
                                                                                          06) and ex. 04
                                                                                          (previously ex. 07)
                                                                                          respectively.
                                                                Paragraph 1 directed     Clarifies in paragraph
                                                                 that appraisals be       1 that the authorized
                                                                 conducted by either a    offer, based on the
                                                                 staff or contract        advice of the assigned
                                                                 appraiser who is         Forest Service review
                                                                 licensed to practice     appraiser, is the only
                                                                 in the State in which    person authorized to
                                                                 the recreation           make adjustments to
                                                                 residence(s) to be       fees where there may
                                                                 appraised are located.   be a measurable
                                                                 It directed that the     difference among
                                                                 selection of a staff     recreation residence
                                                                 or contract appraiser    lots within a grouping
                                                                 be based on the          of lots.
                                                                 individual's having
                                                                 had adequate training
                                                                 and demonstrated
                                                                 competence to conduct
                                                                 the appraisal
                                                                 assignment. It also
                                                                 directed that the
                                                                 appraiser sign an
                                                                 ``Assignment
                                                                 Agreement'' as
                                                                 provided in FSH
                                                                 5409.12, section 6.9,
                                                                 exhibit 07 (see below).

[[Page 16653]]

 
                                                                Paragraph 2 directed     There are no other
                                                                 that the appraiser       changes in paragraphs
                                                                 evaluate the market      2 through 9 in this
                                                                 value of the fee         section.
                                                                 simple estate of the
                                                                 lot, and that the
                                                                 access, utilities, and
                                                                 facilities that
                                                                 service the lot to be
                                                                 appraised that had
                                                                 been paid for by
                                                                 either the Forest
                                                                 Service or a third
                                                                 party, be included as
                                                                 features of the lot.
                                                                Paragraph 3 directed
                                                                 that only previously
                                                                 selected typical lots
                                                                 be appraised pursuant
                                                                 to section 33.41.
                                                                Paragraph 4 directed
                                                                 that the authorized
                                                                 officer provide the
                                                                 appraiser with an
                                                                 inventory of
                                                                 utilities, access, and
                                                                 facilities servicing
                                                                 each typical lot to be
                                                                 appraised as provided
                                                                 in section 33.42.
                                                                Paragraph 5 included an
                                                                 itemized listing of
                                                                 the standards and
                                                                 provisions for which
                                                                 compliance is required
                                                                 in conducting and
                                                                 preparing the
                                                                 appraisal.
                                                                Paragraphs 6 and 7
                                                                 provided direction for
                                                                 identifying and
                                                                 selecting sales of
                                                                 comparable land in
                                                                 appraising the value
                                                                 of a typical lot.
                                                                Paragraph 8 included a
                                                                 listing of typical
                                                                 value influences that
                                                                 the appraiser must
                                                                 consider in adjusting
                                                                 the prices of
                                                                 comparable sales in
                                                                 the appraisal of a
                                                                 typical lot.
                                                                Paragraph 9 directed
                                                                 that the authorized
                                                                 officer and the
                                                                 appraiser initiate a
                                                                 meeting with all
                                                                 affected permit
                                                                 holders prior to
                                                                 conducting an
                                                                 appraisal, specified
                                                                 how to notify the
                                                                 holders of such a
                                                                 meeting, and what to
                                                                 advise the holders at
                                                                 the meeting. This
                                                                 paragraph also
                                                                 directed the appraiser
                                                                 to give affected
                                                                 holders advance of
                                                                 notice of the
                                                                 appraiser's field
                                                                 visit to the
                                                                 recreation residence
                                                                 (or lots) being
                                                                 appraised, and that
                                                                 the holders be given
                                                                 the opportunity to be
                                                                 present during that
                                                                 lot visit.
Section 606..........................  FSH 2709.11, Section     This section proposed a  No major revisions
                                        33.41--Selection and     more detailed process    except to add
                                        Appraisal of Typical     than previous            provisions allowing
                                        Lot.                     direction for            the authorized officer
                                                                 identifying and          to consider three
                                                                 selecting typical        options when lots
                                                                 lots, with strong        within a grouping of
                                                                 emphasis on working      lots are not
                                                                 with the affected        comparable to the
                                                                 holders in the           typical lot
                                                                 selection of a typical   representing that
                                                                 lot or lots.             group with respect to
                                                                 Authorized officers      facilities, utilities,
                                                                 were directed to seek    and access serving the
                                                                 the concurrence of       typical lot
                                                                 affected permit
                                                                 holders in identifying
                                                                 recreation residence
                                                                 groupings and in
                                                                 selecting the typical
                                                                 lot or lots to be
                                                                 appraised.

[[Page 16654]]

 
Section 606(a)(1)....................  FSH 2709.11, Section     This section directed    The caption for section
                                        33.42--Inventorying of   the authorized officer   33.42a is changed from
                                        Utilities, Access and    to identify and          ``Utilities Provided
                                        Facilities.              inventory utilities,     by Holder'' to ``Types
                                                                 access, and facilities   of Utilities, Access,
                                                                 that provide service     and Facilities to
                                                                 to each typical lot      Include in
                                                                 within a recreation      Inventories'' and
                                                                 residence tract. It      provides examples of
                                                                 also provided criteria   the types of utilities
                                                                 or guidelines for the    that should be
                                                                 authorized officer to    considered in the
                                                                 use in making a          inventory of a typical
                                                                 determination as to      lot. The direction
                                                                 who paid for the         previously found in
                                                                 capital costs to         section 33.42a is
                                                                 construct those          revised and moved to
                                                                 utilities, access, and   section 33.42b, para.
                                                                 other facilities         1.
                                                                 servicing each typical  The caption for section
                                                                 lot.                     33.42b has been
                                                                                          changed from
                                                                                          ``Utilities Provided
                                                                                          by the Forest Service
                                                                                          or Third Party'' to
                                                                                          ``Criteria To Be
                                                                                          Considered in
                                                                                          Determining Who Paid
                                                                                          for Capital Cost of
                                                                                          Inventoried Utilities,
                                                                                          Access, and
                                                                                          Facilities.'' The
                                                                                          direction in section
                                                                                          33.42b is revised to
                                                                                          clarify through
                                                                                          examples, criteria for
                                                                                          determining who paid
                                                                                          for the capital costs
                                                                                          of inventoried
                                                                                          utilities, access and
                                                                                          facilities; and that
                                                                                          the Forest Service is
                                                                                          responsible for
                                                                                          obtaining that
                                                                                          evidence.
Section 606..........................  FSH 2709.11, Section     This section made        No changes in final
                                        33.5--Appraisal          reference to FSH         directive.
                                        Specifications.          5409.12, section 6.5;
                                                                 section 6.9, exhibit
                                                                 06, Specifications for
                                                                 Conducting an
                                                                 Appraisal for
                                                                 Recreation Residences;
                                                                 and section 6.9
                                                                 exhibit 07, Assignment
                                                                 Agreement for the
                                                                 Appraisal of
                                                                 Recreation Residence
                                                                 Lots.
Section 606..........................  FSH 2709.11, Section     This section provided    No changes in final
                                        33.6--Review and         direction concerning     directive.
                                        Acceptance of            the manner in which a
                                        Appraisal Report.        Forest Service Review
                                                                 Appraiser shall review
                                                                 an appraisal report
                                                                 and approve it for the
                                                                 authorized officer's
                                                                 acceptance and use in
                                                                 establishing a new
                                                                 base fee.
Section 610(a).......................  FSH 2709.11, Section     This section provided    Section 33.7 was
                                        33.7--Holder             more detailed            revised to clarify
                                        Notification of          direction concerning     that the holder shall
                                        Accepted Appraisal       the authorized           be provided a copy of
                                        Report and Right of      officer's obligation     the appraisal report
                                        Second Appraisal.        to notify the affected   and supporting
                                                                 holder or holders of     documentation
                                                                 the agency's             associated with the
                                                                 acceptance of an         typical lot upon which
                                                                 appraisal report for     the holder's fee is
                                                                 the purpose of           based.
                                                                 establishing a new
                                                                 base fee. It directed
                                                                 that if the holder
                                                                 intends to secure a
                                                                 second appraisal, the
                                                                 holder must formally
                                                                 notify the Forest
                                                                 Service of that intent
                                                                 within 60 days. This
                                                                 direction also
                                                                 provided that if the
                                                                 holder chooses to
                                                                 exercise the option to
                                                                 secure a second
                                                                 appraisal, the holder
                                                                 must provide the
                                                                 authorized officer
                                                                 with a second
                                                                 appraisal report
                                                                 within one year of the
                                                                 date of the holder's
                                                                 receipt of the notice
                                                                 from the authorized
                                                                 officer.

[[Page 16655]]

 
Section 610(b).......................  FSH 2709.11, Section     This section proposed    Section 33.71b,
                                        33.71--Standards for     more detailed            Appraisal guidelines,
                                        Second Appraisal.        direction concerning     has been rewritten to
                                                                 the qualifications of    more clearly
                                                                 an appraiser selected    articulate its purpose
                                                                 by the holder to         and explain how the
                                                                 conduct a second         procedures provided
                                                                 appraisal, and the       for in this section
                                                                 standards that must be   are in conformance
                                                                 followed for             with USPAP.
                                                                 conducting a second
                                                                 appraisal. The
                                                                 direction proposed
                                                                 that the second
                                                                 appraiser also sign an
                                                                 Assignment Agreement,
                                                                 pursuant to FSH
                                                                 5409.12, section 6.9,
                                                                 exhibit 07.
Section 610(c) and (d)...............  FSH 2709.11, Section     This section provided    This section was
                                        33.72--Reconsideration   detailed, time certain   revised to clarify
                                        of Recreation            procedures, for the      that the authorized
                                        Residence Base Fee.      reconsideration of a     officer may only
                                                                 new base fee pursuant    consider the second
                                                                 to a second appraisal.   appraisal report if it
                                                                 It directed that the     is reviewed and
                                                                 holder shall be          approved by the
                                                                 provided with no more    assigned Forest
                                                                 than 60 days following   Service review
                                                                 the authorized           appraiser and to add
                                                                 officer's receipt of a   the requirement that
                                                                 second appraisal         the authorized officer
                                                                 report, within which     shall review the
                                                                 to formally request a    material differences
                                                                 reconsideration of the   in fact or opinion in
                                                                 new base fee, based on   establishing a new
                                                                 the findings of the      base fee.
                                                                 second appraisal. It
                                                                 also directed that the
                                                                 authorized officer,
                                                                 within 60 days
                                                                 following receipt of
                                                                 that request from the
                                                                 holder, review the
                                                                 agency's initial
                                                                 appraisal and the
                                                                 holder's second
                                                                 appraisal, and
                                                                 established a new base
                                                                 fee pursuant to the
                                                                 results of either
                                                                 appraisal, or
                                                                 somewhere within the
                                                                 range of values
                                                                 established by both
                                                                 appraisals.
Section 614..........................  FSH 2709.11, Section     This section required    Clarifies that the
                                        33.8--Establishing       the authorized officer   options described in
                                        Recreation Residence     to notify recreation     paragraphs 1 through
                                        Lot Value During         residence permit         3, and explained in
                                        Transition Period of     holders that when the    further detail in
                                        Cabin User Fee           agency adopts final      section 33.81 through
                                        Fairness Act.            regulations, policies,   33.83, are the only
                                                                 and appraisal            means by which a new
                                                                 guidelines pursuant to   base cabin user fee is
                                                                 CUFFA they may request   established during
                                                                 either: (1) A new        transition period for
                                                                 appraisal; (2) a peer    those lots which were
                                                                 review of an exiting     appraised between
                                                                 appraisal completed      September 30, 1995 and
                                                                 after September 30,      October 11, 2000. Also
                                                                 1995; or (3) a base      clarifies that holders
                                                                 fee using the value      who request a new
                                                                 established by an        appraisal or the
                                                                 appraisal completed      commissioning of a
                                                                 after September 30,      peer review will not
                                                                 1995.                    have the right to
                                                                                          request a second
                                                                                          appraisal as provided
                                                                                          for in section 33.7.
Section 614..........................  FSH 2709.11, Section     This section provided    No changes in final
                                        33.81--Use of            direction for            directive.
                                        Appraisal Completed      situations in which an
                                        After September 30,      appraisal completed
                                        1995.                    after September 30,
                                                                 1995, would be used to
                                                                 establish a new base
                                                                 fee.
Section 614..........................  FSH 2709.11, Section     This section provided    No changes in final
                                        33.82--Request for New   guidance and             directive, except to
                                        Appraisal conducted      procedures for           make the form for
                                        under Regulations,       requesting a new         holders requesting a
                                        Policies, and            appraisal conducted      new appraisal when the
                                        Appraisal Guidelines     under regulations,       previous appraisal
                                        Established Pursuant     policies, and            indicated a base fee
                                        to CUFFA.                appraisal guidelines     increase of more than
                                                                 established pursuant     $3,000 from annual fee
                                                                 to CUFFA.                assessed on October 1,
                                                                                          1996, and exhibit.

[[Page 16656]]

 
Section 614..........................  FSH 2709.11 Section      This section provided    No changes in final
                                        33.83--Request for       guidance and             directive, except to
                                        Peer Review Conducted    procedures for           make the form for
                                        under Regulations,       requesting a peer        holders requesting a
                                        Policies, and            review conducted under   new appraisal when a
                                        Appraisal Guidelines     regulations, policies,   previous appraisal
                                        Established Pursuant     and appraisal            indicated a fee
                                        to CUFFA.                guidelines established   increase of more than
                                                                 pursuant to CUFFA.       $3,000 from annual fee
                                                                                          assessed on October 1,
                                                                                          1996, an exhibit.
Section 606..........................  FSH 5409.12, Section     This section revised     This section containing
                                        6.53--Recreation         appraisal contracting    exhibits 06 and 07 was
                                        Residence Lots.          direction by replacing   recorded to a two
                                                                 use of the current       digit coding scheme
                                                                 terminology for          (sec. 66) to conform
                                                                 appraising               it to the other
                                                                 ``Recreation Residence   sections in FSH
                                                                 Sites'' to               5409.12, chapter 60.
                                                                 ``Recreation Residence   The exhibits for
                                                                 Lots,'' to be            recreation residences
                                                                 consistent with the      are now enumerated as
                                                                 terminology used in      ex. 03 (previously ex.
                                                                 CUFFA. This section      06) and ex. 04
                                                                 also directed that the   (previously ex. 07)
                                                                 appraisal guidelines     respectively.
                                                                 for recreation
                                                                 residence lots,
                                                                 included in FSH
                                                                 5409.12, section 6.9,
                                                                 exhibit 06, Required
                                                                 Specifications for
                                                                 Appraisal of
                                                                 Recreation Residence
                                                                 Lots, be used agency-
                                                                 wide, and that they
                                                                 can not be modified
                                                                 without the approval
                                                                 of the Director of
                                                                 lands. The section
                                                                 required that the
                                                                 appraiser execute an
                                                                 Assignment Agreement,
                                                                 as provided in FSH
                                                                 5409.12, section 6.9,
                                                                 exhibit 07.
Section 606..........................  FSH 5409.12, Section     This section revised     As appropriate,
                                        6.9--Exhibit 06.         exhibit 06, which        replaces the term
                                                                 contains all the         ``site'' with ``lot''
                                                                 technical appraisal      and makes other minor
                                                                 provisions and           technical and format
                                                                 appraisal guidelines     edits throughout the
                                                                 enumerated in section    exhibit.
                                                                 606 of CUFFA. These     Section C-2.1(g) is
                                                                 technical                revised to include
                                                                 specifications must be   CUFFA as a source for
                                                                 included in an           definitions for
                                                                 appraisal contract for   recreation residences.
                                                                 an appraisal conducted  The examples of related
                                                                 by a contract            improvements in
                                                                 appraiser, and Forest    Section C-2.2 is
                                                                 Service staff            revised to be
                                                                 appraisers must adhere   consistent to the
                                                                 to these provisions      definition of related
                                                                 and procedures when      improvements in FSH
                                                                 conducting an            2709.11, section
                                                                 appraisal of a           33.05.
                                                                 recreation residence    Section C-
                                                                 lot.                     2.2(b)(2)(3)(b) is
                                                                                          revised by using the
                                                                                          term ``market area''
                                                                                          instead of the word
                                                                                          ``neighborhood.''

[[Page 16657]]

 
                                       FSH 5409.12, Section     Exhibit 07, Assignment   No changes in final
                                        6.9--Exhibit 07.         Agreement, required      directive.
                                                                 both Forest Service
                                                                 staff appraisers and
                                                                 contract appraisers to
                                                                 document their
                                                                 intention to comply
                                                                 with the appraisal
                                                                 instructions (ex. 06),
                                                                 the provisions of
                                                                 CUFFA, the Uniform
                                                                 Standards of
                                                                 Professional Appraisal
                                                                 Practice, and the
                                                                 Uniform Appraisal
                                                                 Standards for Federal
                                                                 Land Acquisitions,
                                                                 prior to conducting an
                                                                 appraisal or second
                                                                 appraisal of
                                                                 recreation residence
                                                                 lot.
----------------------------------------------------------------------------------------------------------------

[FR Doc. 06-2889 Filed 3-28-06; 8:45 am]
BILLING CODE 3410-11-P