    Livestock Grazing: Federal Expenditures and Receipts Vary,
    Depending on the Agency and the Purpose of the Fee Charged
    (30-SEP-05, GAO-05-869).

    Ranchers pay a fee to graze their livestock on federal land.
    Grazing occurs primarily on federal land located in the western
    states managed by 10 federal agencies. Generally, the fee is
    based on animal unit months (AUM)--the amount of forage that a
    cow and her calf can eat in 1 month. For most federal land, the
    fee per AUM is established by a formula. Advocates argue that
    grazing uses federal land productively and that the grazing fee
    is fair. Opponents argue that grazing damages public resources
    and that grazing fees are too low. GAO was asked to determine the
    (1) extent of, and purposes for, grazing in fiscal year 2004 on
    lands 10 federal agencies manage; (2) amount federal agencies
    spent in fiscal year 2004 to manage grazing; (3) total grazing
    receipts the 10 agencies collected in fiscal year 2004 and
    amounts disbursed; and (4) fees charged in 2004 by the 10
    agencies, western states, and ranchers, and reasons for any
    differences. In commenting on a draft of this report, the
    Department of the Interior and the Forest Service neither agreed
    nor disagreed with the findings. The Forest Service stated that
    the report accurately described the purpose of the grazing fee.
    The Army and Air Force and the Department of Energy provided
    technical comments, which we incorporated as appropriate. The
    departments of Commerce and of Justice responded that they did
    not have comments.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-05-869
        ACCNO:   A38957
      TITLE:     Livestock Grazing: Federal Expenditures and Receipts
    Vary, Depending on the Agency and the Purpose of the Fee Charged
         DATE:   09/30/2005
      SUBJECT:   Cost analysis
    	     Federal property management
    	     Financial analysis
    	     Grazing rights
    	     Land management
    	     Land use law
    	     Public lands
    	     User fees

    ******************************************************************
    ** This file contains an ASCII representation of the text of a  **
    ** GAO Product.                                                 **
    **                                                              **
    ** No attempt has been made to display graphic images, although **
    ** figure captions are reproduced.  Tables are included, but    **
    ** may not resemble those in the printed version.               **
    **                                                              **
    ** Please see the PDF (Portable Document Format) file, when     **
    ** available, for a complete electronic file of the printed     **
    ** document's contents.                                         **
    **                                                              **
    ******************************************************************
    GAO-05-869

                     United States Government Accountability Office

                         GAO Report to Congressional Requesters

    September 2005

    LIVESTOCK GRAZING

    Federal Expenditures and Receipts Vary, Depending on the Agency and the Purpose
                                   of the Fee Charged

                                           a

    GAO-05-869

    [IMG]

    September 2005

    LIVESTOCK GRAZING

    Federal Expenditures and Receipts Vary, Depending on the Agency and the Purpose
    of the Fee Charged

      What GAO Found

    The 10 federal agencies managed more than 22.6 million AUMs on about 235
    million acres of federal lands for grazing and land management in fiscal
    year 2004. Of this total, the Department of the Interior's Bureau of Land
    Management (BLM) and the U.S. Department of Agriculture's Forest Service
    managed more than 98 percent of the lands used for grazing. The agencies
    manage their grazing programs under different authorities and for
    different purposes. For BLM lands and western Forest Service lands,
    grazing is a major program; the eight other agencies generally use grazing
    as a tool to achieve their primary land management goals.

    In fiscal year 2004, federal agencies spent a total of at least $144
    million. The 10 federal agencies spent at least $135.9 million, with the
    Forest Service and BLM accounting for the majority. Other federal agencies
    have grazingrelated activities, such as pest control, and spent at least
    $8.4 million in fiscal year 2004.

    The 10 federal agencies' grazing fees generated about $21 million in
    fiscal year 2004-less than one-sixth of the expenditures to manage
    grazing. Of that amount, the agencies distributed about $5.7 million to
    states and counties in which grazing occurred, returned about $3.8 million
    to the Treasury, and deposited at least $11.7 million in separate Treasury
    accounts to help pay for agency programs, among other things. The amounts
    each agency distributed varied, depending on the agencies' differing
    authorities.

    Fees charged in 2004 by the 10 federal agencies, as well as state land
    agencies and private ranchers, vary widely. The grazing fee BLM and the
    Forest Service charge, which was $1.43 per AUM in 2004, is established by
    formula and is generally much lower than the fees charged by the other
    federal agencies, states, and private ranchers. The other agencies,
    states, and ranchers generally established fees to obtain the market value
    of the forage. The formula used to calculate the BLM and Forest Service
    grazing fee incorporates ranchers' ability to pay; therefore the current
    purpose of the fee is not primarily to recover the agencies' expenditures
    or to capture the fair market value of forage. As a result, BLM's and the
    Forest Service's grazing receipts fell short of their expenditures on
    grazing in fiscal year 2004 by almost $115 million. The BLM and Forest
    Service fee also decreased by 40 percent from 1980 to 2004, while grazing
    fees charged by private ranchers increased by 78 percent for the same
    period. If the purpose of the fee were to recover expenditures, BLM and
    the Forest Service would have had to charge $7.64 and $12.26 per AUM,
    respectively; alternately, if the purpose were to gain a fair market
    value, the agencies' fees would vary depending on the market. Differences
    in resources and legal requirements can cause fees to vary; however, the
    approaches used by other agencies could close the gap in expenditures and
    receipts or more closely align BLM and Forest Service fees with market
    prices. The purpose of the grazing fee is, ultimately, for the Congress to
    determine.

                     United States Government Accountability Office

    Contents

      Letter

    Results in Brief
    Background
    Grazing Occurs on About 235 Million Acres of Federal Lands for a

    Variety of Purposes

    Federal Agencies Spent at Least $144 Million on Grazing Activities,
    Although Some Agencies Do Not Track Expenditures for Grazing on Federal
    Lands

    Federal Agencies Collected About $21 Million in Grazing Receipts in Fiscal
    Year 2004-Less Than One-Sixth of the Expenditures Needed to Manage Grazing

    Grazing Fees Charged by Federal Agencies, Western States, and Private
    Ranchers Varied Widely, Depending on the Purpose of the Fee and the
    Approach Taken to Set It

    Concluding Observations Agency Comments

    1 5 8

    14

    20

    30

    37 50 51

    Appendixes

    Appendix I:

    Appendix II:

    Appendix III:

    Appendix IV:

                                           Appendix V: Appendix VI: Appendix VII:

    Objectives, Scope, and Methodology

    Additional Factors in Evaluating Federal Grazing Expenditures and Revenues

    Implications of Grazing for Local Economic Development Implications of
    Grazing on Quality of Rural Communities and Rancher's Life Implications of
    Grazing for Rangeland Ecosystems and Management

    Detailed Grazing Data for Bureau of Land Management and the Forest Service

    Acres and AUMs of Grazing Permits and Leases by Size

    Grazing Fee for Lands Managed by BLM and the Forest Service

    Current Fee for BLM's and the Forest Service's Western States History of
    Western Grazing Fees

    Examples of Other Federal Agency Grazing Fees Western State Grazing Fees
    and Formulas Comment from Department of the Interior

    GAO Comments

                                           55

                                         61 61

    62

    64

    67 67 75

    79 79 84

    88

    93

    102 104

                                        Contents

    Appendix VIII: Comments from the Forest Service 105 Appendix IX: GAO
    Contact and Staff Acknowledgments 106

    Related Products 107

    Grazing Reports 107 User Fee Reports 109

    Tables	Table 1: Table 2: Table 3:

    Table 4:

    Table 5: Table 6: Table 7:

    Table 8: Table 9:

    Extent of Grazing in Fiscal Year 2004 on BLM and Forest
    Service Lands, Acres and AUMs
    Extent of Grazing in Fiscal Year 2004 on Other Agencies'
    Lands, Acres and AUMs
    Expenditures by BLM and the Forest Service for Direct,
    Indirect, and Range Improvement Grazing Activities,
    Fiscal Year 2004
    Estimated Expenditures by the National Park Service, U.S.
    Fish and Wildlife Service, Reclamation, DOE, and DOD on
    Grazing Activities, Fiscal Year 2004
    Expenditures for Grazing-Related Activities by Other
    Agencies on Federal Lands, Fiscal Year 2004
    BLM and Forest Service Grazing Receipts, Fiscal Year
    2004
    National Park Service, U.S. Fish and Wildlife Service,
    Reclamation, DOE, and DOD Services Grazing Receipts,
    Fiscal Year 2004
    Fees Charged by Federal Agencies, State Land Agencies,
    and Private Ranchers, 2004
    Fees Charged by Private Ranchers and State Land
    Agencies in 2004

                                         15 17

    21

    25 27 31

    34

    39

    45

    68

    72 76

    77

    77

    78

    78

    Table 10: BLM Data on Acres and AUMs, by Field Office for Fiscal Year 2004

    Table 11: Forest Service Data on Acres and AUMs, by Forest and Grassland,
    Grazing Year 2004

    Table 12: Number of BLM Permits by Size, Fiscal Year 2004

    Table 13: Number of Forest Service Cattle Permits by Size, Grazing Year
    2004

    Table 14: Number of Forest Service Sheep Permits by Size, Grazing Year
    2004

    Table 15: Number of Cattle and Calf Operations and Percent of Inventory,
    United States, 2004

    Table 16: Number of Beef Cow Operations and Percent of Inventory, United
    States, 2004

    Contents

    Table 17: PRIA Formula Data for 1979 through 2004 and Fee Results

    for 1980 through 2005 83 Table 18: Information on State Lands Used for
    Grazing, Revenues,

    and Fee-Setting Approach in 17 Western States, Fiscal Year

    2004 94

                                      Location of Federal Lands, by Agency
    Figures Figure 1: Figure 2:   Grazing Fee BLM and the Forest Service     9
                                                Charged, 1980 to
                                                      2005                     48
                         Figure 3:   Unconstrained Formula Results and PRIA
                                                   Grazing Fee
                                   Compared with Fees Charged on Private Lands 81
                         Figure 4:  Value of PRIA Grazing Formula Components,
                                                      1979
                                                  through 2004                 82

    Abbreviations

    AUM Animal unit month
    BCPI Beef Cattle Price Index
    BLM Bureau of Land Management
    DOD Department of Defense
    DOE Department of Energy
    FLPMA Federal Land Policy and Management Act
    FVI Forage Value Index
    GAO Government Accountability Office
    IOAA Independent Offices Appropriation Act
    NMFS National Marine Fisheries Service
    OMB Office of Management and Budget
    PPI Prices Paid Index
    PRIA Public Rangelands Improvement Act
    USDA Department of Agriculture
    USGS U.S. Geological Survey

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    A

    United States Government Accountability Office Washington, D.C. 20548

    September 30, 2005

    Congressional Requesters:

    Since the early 1900s, the federal government has required ranchers to pay
    a fee for grazing their livestock on millions of acres of federal land
    located primarily in western states. On many federal lands, if these
    ranchers comply with permit or lease conditions, they may be able to renew
    their permits or leases indefinitely, effectively adding forage, and hence
    value, to their operations.1 Over the years, this arrangement has spurred
    controversy across a range of issues. Advocates of grazing on federal
    lands contend that grazing is a productive use of these lands and supports
    local economic development. Advocates also believe that the fee charged is
    fair, allows ranchers to stay in business, and provides stability to small
    rural communities. Opponents argue that grazing damages public resources,
    such as wildlife habitat, threatened and endangered species, and water
    quality. Opponents also argue that federal expenditures for grazing are
    too high and that fees charged for grazing are far too low, thereby
    contributing to increased grazing and deterioration of range conditions.

    Ten federal agencies have programs to allow private ranchers to graze
    livestock on portions of the lands they manage: the Department of the
    Interior's (Interior) Bureau of Land Management (BLM), National Park
    Service, U.S. Fish and Wildlife Service, and Bureau of Reclamation
    (Reclamation); the U.S. Department of Agriculture's (USDA) Forest Service;
    the Department of Energy (DOE); and the Department of Defense's

    1Agencies use different arrangements to allow grazing on their lands. The
    Bureau of Land Management (BLM) both permits and leases land for grazing,
    depending on the legal designation of the land being grazed. Similarly,
    the Bureau of Reclamation also issues permits and leases for grazing on
    project lands. The Forest Service, National Park Service, and Fish and
    Wildlife Service permit grazing on their lands. The Department of Defense
    services lease their lands for grazing. BLM manages grazing permits on
    lands withdrawn from the public domain for use by the Department of
    Energy.

    (DOD) Army, Army Corps of Engineers (Corps), Air Force, and Navy.2 In
    general, agencies manage their grazing programs by establishing permit or
    lease conditions, monitoring livestock numbers and resource conditions,
    planning and overseeing projects to improve rangeland, and working with
    ranchers and local communities. While federal lands in the eastern states
    are also used for grazing, grazing occurs primarily on the agencies' lands
    located in 17 western states.3 Other federal agencies, such as USDA's
    Wildlife Services and the Department of Justice (Justice), do not have
    grazing programs but do conduct activities that support these programs.
    For example, Justice provides legal services to federal agencies,
    including litigation of federal grazing lawsuits.

    Grazing fees are set in several ways. The fee charged for grazing on BLM
    and Forest Service lands is set using a formula first called for under the
    Public Rangelands Improvement Act (PRIA) of 1978. The formula, which
    expired in 1985 but was continued in 1986 by Executive Order 12548,4
    results in a price per animal unit month (AUM)-that is, the amount of
    forage (vegetation such as grass and shrubs) that a cow and her calf eat
    in a month (or one bull, one steer, one horse, or five sheep).5 Fees can
    be specifically set by legislation, or agencies are authorized, under
    certain circumstances, to charge user fees under the Independent Offices
    Appropriation Act (IOAA). Office of Management and Budget (OMB)

    2While the Army Corps of Engineers is an agency within the Army, we
    consider it as a separate agency for the purposes of this report. The
    Bureau of Indian Affairs helps Native Americans to manage grazing on
    tribal lands. While private ranchers can lease these lands for grazing at
    a fee, the lands are tribal lands and therefore are not included in this
    discussion of grazing on federal lands.

    3Generally, there are 17 states, including the Great Plains states,
    considered to be western: Arizona, California, Colorado, Idaho, Kansas,
    Montana, Nebraska, New Mexico, Nevada, North Dakota, Oklahoma, Oregon,
    South Dakota, Texas, Utah, Washington, and Wyoming. However, depending on
    the situation, western states can be grouped and counted differently. BLM
    primarily manages grazing in 11 western states, including Arizona,
    California, Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Utah,
    Washington, and Wyoming. The Forest Service manages grazing for its
    forests in 16 western states, excluding Texas, under the range management
    subchapter of the Federal Lands Policy and Management Act of 1976 and the
    Public Rangelands Improvement Act of 1978, and grazing on national
    grasslands.

    4Exec. Order No. 12548 (Feb. 14, 1986).

    5While BLM uses the term AUM as a unit for purposes of charging fees, the
    Forest Service uses the term head month. The two units are calculated the
    same way. We will use the term AUM in this report to refer to both AUM and
    head month. Of the other agencies, some charge by AUM while others charge
    a flat fee or by acre.

    Circular A-25, which further interprets IOAA, states that user fees can be
    established to recover the full cost of managing a program or to seek a
    fair market value-that is, the price set through competitive bids or
    market prices. When fees are set through competitive bidding, they achieve
    a fair market value-that is, the price that a willing and knowledgeable
    buyer pays and a willing and knowledgeable seller accepts. Competitive
    bidding usually includes the use of either sealed bids or public auction,
    advertising the permit or lease, and awarding it to the highest bidder. In
    lieu of competition, fees can be set to achieve market value based on an
    estimate or appraisal of comparable properties.

    Changes in the livestock industry, as well as continued disagreement
    between advocates and opponents of grazing have, over the last 2 decades,
    resulted in several efforts to reform federal grazing fees for BLM and
    Forest Service lands. In 1986 and 1992, the two agencies studied
    alternative approaches to value grazing on federal rangelands and the fee
    charged. In 1994, the Administration considered administrative changes to
    the fee and range management regulations. In the late 1990s, the Senate
    passed legislation to reform the fee to reflect beef production from
    federal lands, but Congress ultimately did not enact this legislation. In
    2003, attention turned to buyouts of federal grazing permits and leases in
    addition to grazing fees. Because of changes in the livestock
    industry-increasing conflict with other users of federal land, fluctuating
    prices of beef, and difficulty finding new owners for ranches-some
    ranchers have expressed support for the idea of a buyout. Others remain
    opposed.

    In this context, you asked us to determine for 2004 the (1) extent of
    grazing on, and program purposes for, lands managed by the 10 federal
    agencies in the fiscal year; (2) amount spent in the fiscal year by these
    agencies, and other federal agencies that have grazing-related activities,
    to manage livestock grazing on public lands; (3) total receipts collected
    during the fiscal year for grazing privileges by the 10 federal agencies
    with grazing programs, and the amounts disbursed to counties, states, or
    the federal government; and (4) fees charged by the 10 federal agencies,
    western states, and private ranchers, and the reasons for any differences
    among the

    fees.6 In considering agencies' expenditures and receipts, it is important
    to note that we conducted a budgetary evaluation; that is, we examined the
    effects of grazing programs on the U.S. Treasury and the federal budget
    and did not analyze economic costs and benefits, which would involve a
    broad set of trade-offs-some of which cannot be quantified-made by
    individuals, the public, and the federal government. (See app. II for a
    discussion of such factors.)

    To respond to these questions, we obtained agencies' data on acres and
    AUMs for their grazing programs,7 as well as expenditures, receipts,
    disbursements, and fees.8 If an agency had a central data information
    system, we obtained the data from this system and determined, through
    interviews, system tests, and file reviews, as appropriate, the
    reliability of the data and whether the agencies have sufficient internal
    controls over the fund information in the systems. If an agency did not
    centrally track the needed data, we developed a data collection instrument
    for the agency's field unit managers to complete. We relied on data
    reported by the agencies. To assess whether the various types of data were
    sufficiently reliable for use in this report, as well as to check key
    internal controls over grazing receipts, we visited several agencies'
    field offices to review their grazing programs, data systems, and a
    selection of grazing files to verify the billing information; and we
    interviewed officials about key steps in the processes for issuing grazing
    permits and leases and billing for and collecting fees. We reviewed all
    the files at agencies with smaller grazing programs (those with up to 25
    permits or leases at an office) and selected 10 percent of files at the
    two agencies that had large grazing programs (250

    6Data on acres and AUMs are provided for fiscal years, except for the
    Forest Service, which reported these data by grazing year. The grazing
    year extends from March through February. Data on expenditures and
    receipts are reported by fiscal year, while fee data are reported
    differently depending on the agency. Specifically, BLM and Forest Service
    fees are reported by grazing year, the other federal agencies' fees are
    reported by fiscal year, state fees are reported primarily by fiscal year,
    and private fees and some state fees are reported by calendar year.

    7While the majority of grazing is described according to AUMs and many
    agencies can calculate the amount of AUMs in their permits and leases,
    some of the agencies' field offices do not use AUMs as a convention to
    measure grazing. These offices use other measures to determine the amount
    of grazing that is occurring, for example, the amount of forage that
    remains. About five national parks, one Air Force base, and two Corps
    districts did not provide information on AUMs.

    8The discussion does not include Alaska, which is treated differently in
    grazing law. See 43 U.S.C. S: 316.

    and 500 allotment files per office). While we gathered and reviewed
    expenditure data from the agencies, we did not validate the data or the
    accounting systems that produced them. To understand the differences among
    fees and approaches to setting fees, we interviewed a range of experts
    from Colorado State University, New Mexico State University, Oregon State
    University, and the University of Montana, as well as the Society for
    Range Management. See appendix I for a detailed discussion of our
    methodology. We conducted our review between August 2004 and July 2005 in
    accordance with generally accepted government auditing standards.

    Results in Brief	The 10 federal agencies managed more than 22.6 million
    AUMs on about 235 million acres of federal lands for private grazing and
    land management in fiscal year 2004. Of this total, BLM and the Forest
    Service managed almost 21.9 million AUMs on almost 231 million acres, or
    more than 98 percent of the federal lands used for grazing. The remaining
    8 agencies managed almost 794,000 AUMs on more than 4 million acres. While
    the agencies' grazing programs are similar in that they offer private
    ranchers access to federal lands and forage for their livestock, the
    agencies manage their grazing programs under different authorities and for
    different purposes. For BLM lands and western Forest Service lands,
    grazing is considered a principal or major program, while other agencies
    generally use grazing as a management tool to achieve their land
    management goals. For example, the U.S. Fish and Wildlife Service uses
    grazing to reduce some grasses and thereby allow other grasses to flourish
    that are favorable to particular types of birds. Similarly, some of the
    DOD services use livestock to "cut" their grass.

    In fiscal year 2004, federal agencies, both those that have grazing
    programs and those that have activities to support grazing, spent a total
    of at least $144.3 million. The 10 federal agencies with grazing programs
    spent at least $135.9 million, of which BLM and the Forest Service spent
    the majority- about $132.5 million. The 8 remaining agencies spent at
    least $3.4 million, but not all of them could estimate their expenditures
    because they do not conduct grazing as a major activity and therefore do
    not track expenditures specifically for grazing. The 10 agencies spent
    funds on activities that directly supported grazing, such as managing
    permits and leases, managing grazing allotments, assessing the resource
    conditions of these allotments, and implementing projects to improve the
    allotments, such as building fences and developing water projects. They
    also spent funds on activities that indirectly supported grazing, such as
    management, budget, personnel,

    and other activities. In addition to these 10 agencies' expenditures,
    other federal agencies that do not have grazing programs spent at least
    $8.4 million to support grazing on public lands; some do not know the
    amount they spent because they do not distinguish between work done on
    public and private lands. For example, USDA's Wildlife Services removes
    predatory or nuisance wildlife that threaten livestock on both public and
    private lands; the agency estimated that it spent more than $5 million in
    fiscal year 2004 on its activities on public lands. In the same year,
    Justice, which provides legal services to federal agencies including
    services for litigation related to grazing on public land, estimated that
    it spent about $159,000 on grazing lawsuits. Other agencies, such as the
    Environmental Protection Agency and USDA's Natural Resources Conservation
    Service, conduct water quality projects and range improvement work that
    are related to grazing, but the agencies cannot separate expenditures for
    public lands from those on private lands.

    The grazing permits and leases the 10 federal agencies manage generated a
    total of about $21 million from fees charged in fiscal year 2004-or less
    than one-sixth of the expenditures to manage grazing. From that amount,
    the agencies distributed almost $5.7 million to states and counties in
    which grazing occurred, deposited almost $3.8 million in the Treasury as
    miscellaneous receipts, and deposited at least $11.7 million in separate
    Treasury accounts for the agencies' use. The amounts distributed by each
    agency vary, depending on the agencies' differing authorities. For
    example, of the $11.7 million deposited in the separate Treasury accounts,
    BLM and the Forest Service deposited $8.8 million into their range
    improvement funds. The majority of grazing receipts-more than $17.5
    million-came from BLM and Forest Service permits and leases, while more
    than $3.7 million was generated from the remaining agencies. In addition
    to cash receipts, the DOD services also received almost $1.4 million in
    services, such as maintaining fences, that offset grazing fees charged to
    their lessees.

    Fees charged in 2004 by the 10 federal agencies, as well as state land
    agencies and private ranchers, vary widely, depending on the purpose for
    which the fees were established and the approach used to set the fees. The
    fee BLM and the Forest Service charge for grazing-which was $2.36 per AUM
    for BLM and $2.41 per AUM for the Forest Service in 1980, when the fee
    based on the formula enacted by PRIA was first charged, and $1.43 per AUM
    in 2004-is established by formula to account for livestock industry prices
    and to support ranchers and the western livestock industry. It is
    therefore generally lower than the fees charged by the other federal
    agencies, states, and private ranchers. The other agencies generally

    establish their fees based on the market value of the forage, and as a
    result charged fees ranging from $0.29 to more than $112 per AUM in fiscal
    year 2004, depending on the location, range condition, and accompanying
    in-kind services. The state land agencies in 17 western states charged
    fees that ranged from $1.35 to $80 per AUM in fiscal year 2004, while the
    average fee private ranchers charged ranged from $8 per AUM in Arizona and
    Oklahoma to $23 per AUM in Nebraska. The complex formula used to calculate
    the BLM and Forest Service fee for grazing on their lands incorporates
    factors that consider ranchers' ability to pay; the purpose of the fee is
    therefore not primarily to recover the agencies' expenditures or to
    capture the fair market value of forage. These factors that adjust the fee
    resulted in a difference of almost $115 million between grazing receipts
    and agencies' expenditures on grazing activities in fiscal year 2004. BLM
    and the Forest Service would have had to charge $7.64 per AUM and $12.26
    per AUM, respectively, to recover these expenditures in 2004. These
    adjustment factors also resulted in the fee decreasing by 40 percent from
    1980 to 2004 for grazing on BLM and Forest Service lands, while fees
    charged by private ranchers increased 78 percent over the same period.
    Although differences in the quality of resources, the level of services
    provided, and legal requirements complicate the comparison of private and
    federal lands, and competitive methods may be administratively expensive,
    the approaches other federal agencies, states, and private ranchers use
    could provide alternative approaches for setting fees. These approaches
    could close the gap in expenditures and receipts or more closely align BLM
    and Forest Service fees with market prices; however, the purpose of the
    grazing fee and any policy trade-offs are, ultimately, for the Congress to
    determine.

    In responding to a draft of this report, Interior and the Forest Service
    provided written comments. The agencies neither agreed nor disagreed with
    the findings. Interior stated that the report recognized that differences
    in resource conditions and legal requirements can cause grazing fees to
    vary. The Forest Service stated that the report accurately described the
    purpose of the grazing fee charged by BLM and the Forest Service. DOD and
    DOE provided technical comments, which we incorporated as appropriate. The
    departments of Commerce and of Justice responded that they did not have
    comments. Interior's and the Forest Service's comments are included in
    appendixes VII and VIII, respectively.

    Background	The federal government manages more than 680 million acres of
    land in the United States, including lands in national forests,
    grasslands, parks, refuges, reservoirs, and military bases and
    installations. Of the total federal lands, BLM and the Forest Service
    manage almost 450 million acres for multiple uses, including timber
    harvest, recreation, grazing, minerals, water supply and quality, and
    wildlife habitat. BLM's 12 state offices manage more than 260 million
    acres in 12 western states, including 82 million acres in Alaska, while
    the Forest Service's 123 administrative offices manage more than 190
    million acres across the nation.9 As shown in figure 1, the majority of
    federal lands are located in the western half of the country.

    9While the Forest Service has 155 proclaimed national forests and 20
    grasslands, it has combined them into 123 administrative offices for
    management purposes.

    o 	DOE manages almost 2.4 million acres of land making it the fourth
    largest federal land owner after Interior, USDA, and DOD. It operates 30
    major facilities on land holdings in 34 states. The buffer zones
    surrounding many of these facilities consist of forests and rangelands.

    o 	DOD has numerous Army, Air Force, and Navy installations on 29 million
    acres of land in many states, while the Corps, like Reclamation, manages
    12.7 million acres of land associated with water projects in many states.

    Livestock Grazing in the United States

    Most rangelands-primarily grasslands and shrublands-used to raise
    livestock in the United States are privately owned, and as a result, only
    a portion of livestock is raised on federal land.10 In 2004, the livestock
    industry had almost 95 million cattle and 989,460 cattle and calf
    operations, which include cattle raised for beef as well as milk.11
    Regionally, the eastern states had almost 590,000 cattle and calf
    operations, of which almost 440,500 were beef cow operations; the states
    in the Great Plains (Nebraska, Kansas, Oklahoma, North and South Dakota,
    and Texas) had 292,300 cattle and calf operations with 253,000 beef cow
    operations; and the 11 western states had more than 106,000 cattle and
    calf operations with about 80,400 beef cow operations. In contrast, the
    number of livestock operations with BLM and Forest Service grazing permits
    and leases for cattle, sheep, and other livestock totaled more than
    23,000. Livestock operations in the West differ from those in the eastern
    United States. In the West, livestock operations involve larger areas of
    land, and ranchers depend on a mix of private and federal lands to graze
    cattle seasonally-in the summer and fall they use federal lands to graze
    their livestock while they grow hay crops for the winter on their private
    lands. In some parts of the West, primarily the Southwest, grazing occurs
    year-round on federal lands. In the East, sufficient rain allows grazing
    to occur on smaller pastures, in some places, year-round.

    10Rangelands are lands on which the indigenous vegetation is predominantly
    grasses, grass-like plants, forbs (herbs), or shrubs and is managed as a
    natural ecosystem. Rangelands include natural grasslands, savannas, many
    deserts, tundras, alpine communities, marshes, and meadows. They differ
    from pastureland in that they are not periodically planted or treated
    through tilling, fertilization, mowing, weed control, or irrigation. Not
    all rangelands are used for grazing purposes.

    11In the same year, the industry had about 6 million sheep and 67,160
    sheep operations, which raise sheep for both meat and wool.

    Grazing on Federal Lands	The country's rangelands have been used to graze
    domestic livestock since the United States was settled, and the federal
    government has managed grazing on federal lands for more than 100 years.
    During western expansion, settlement typically occurred along streams and
    rivers, where the soil is richer, vegetation denser, and water more
    available. Lands that remained for the federal government to manage after
    western expansion were lands that settlers did not want or could not
    easily settle; the lands are often drier, less productive, and located at
    higher elevations or farther from water. As the West was settled
    throughout the late 1800s, conflict among different users of the
    rangelands increased, as did degradation of these lands. As a result, in
    1897, the federal government began managing livestock grazing in the
    nation's forest reserves; in 1906, the Forest Service started charging a
    fee for grazing on these reserves.

    The Forest Service managed grazing under its general authorities until
    1950, when Congress enacted the Granger-Thye Act, authorizing the
    Secretary of Agriculture to issue grazing permits on national forest lands
    and other lands under the department's administration. In addition to
    national forest lands on which grazing is allowed in the 16 western
    states, the Forest Service manages national grasslands in the western
    states and forest lands in the eastern states for grazing. The federal
    government started purchasing privately owned land in 1911 as necessary
    for regulating the flow of navigable streams, creating national forests in
    the East. The national grasslands, which are primarily located in
    Colorado, Kansas, New Mexico, and North and South Dakota, were purchased
    by the federal government under a land utilization program started in the
    1930s. Originally, the program purchased submarginal lands to provide
    emergency relief to farmers whose lands were failing. It evolved into a
    program designed to transfer land to its most suitable use, culminating in
    the Bankhead-Jones Farm Tenant Act of 1937. In 1954, the Secretary of
    Agriculture transferred the responsibility for program administration to
    the Forest Service and in 1960 designated almost 3.8 million acres of
    lands in the program as national grasslands.

    To stop continued degradation caused by overgrazing of the remaining
    public lands, among other purposes, the Congress passed the Taylor Grazing
    Act in 1934. Under the act, the predecessor to BLM-the Grazing Service-was
    created, and control over grazing on public lands was established. The
    Taylor Grazing Act authorized the establishment of grazing districts from
    public lands that were considered to be chiefly valuable for grazing and
    raising forage crops and the leasing of other public lands that were
    located outside grazing districts. The act also provided for

    the issuance of permits and leases for these lands and set forth
    requirements for the distribution of funds received from grazing.
    Additional laws affecting grazing on both BLM and western Forest Service
    lands were enacted in the 1970s. The Federal Land Policy and Management
    Act of 1976 (FLPMA) limited the length of permits and leases to 10 years
    and allowed shorter terms, authorized terms and conditions to be placed on
    a permit or lease, and allowed seasonal limits on grazing. In 1978, PRIA
    required BLM and the Forest Service to inventory and manage their lands in
    western states.

    To provide access to grazing, both BLM and the Forest Service divide their
    rangelands into allotments, which can vary in size from a few acres to
    hundreds of thousands of acres of land. Because of the land ownership
    patterns that occurred when the lands were settled, the allotments can be
    adjacent to private lands, or they can be intermingled with private lands.
    Under its authorities, BLM permits grazing in allotments within its
    grazing districts and leases lands outside grazing districts. The Forest
    Service, which does not have grazing districts, uses permits to authorize
    grazing in its allotments. To be eligible for a permit or lease on one of
    BLM's allotments, ranchers, among other things, are required to own or
    control land or water, called a base property.12 Under Forest Service
    guidance, permits are issued to purchasers of permitted livestock or base
    property.

    The other federal agencies that manage grazing do not have the same
    grazing authorities, processes, or fees as BLM and the Forest Service.
    Each agency manages its grazing for different purposes and under different
    authorities. For example, the U.S. Fish and Wildlife Service permits
    grazing on a year-to-year basis, depending on a refuge's land management
    goals, while the National Park Service permits grazing for a longer period
    but can choose to not renew a permit if certain conditions change,
    including damage to park resources, limitations to interpretive
    experiences, or impairment of park facilities.

    12A base property is property that is capable of serving as a base of
    operation for livestock use of public lands within a grazing district or
    contiguous land, or, when no applicant owns or controls contiguous land,
    noncontiguous land that is capable of being used in conjunction with a
    livestock operation that would use public lands outside a grazing
    district. A water base is water that is suitable for consumption by
    livestock and is available and accessible to the authorized livestock when
    the public lands are used for livestock grazing.

    User Fees for Grazing on Federal Lands

    Federal grazing fees are considered as user fees. Without statutory
    authority to charge a fee and retain the proceeds, a federal agency may
    not charge a fee to defray the cost of services or resources it provides.
    Congress has provided some agencies with specific authority to charge a
    user fee and retain and use the proceeds. If an agency does not have
    specific authority, the IOAA provides general authority for an agency to
    impose a fee if certain conditions are met. However, even if the user fee
    applies, an agency may not retain the proceeds from a user fee without
    specific authority to that effect, but must credit the collections to the
    general fund of the Treasury as miscellaneous receipts. OMB Circular A-25
    provides guidance to agencies regarding their imposition of user fees
    under the IOAA and other statutes. Under the circular, federal agencies
    that do not have specific authority to impose a fee are to charge user
    fees pursuant to the IOAA when an individual or a group receives
    benefits-such as those that provide business stability or respond to an
    individual or a group's request-that are greater than those that the
    general public enjoys. Increasingly since the 1980s, to relieve pressure
    on taxpayers for increasing general appropriations for the federal
    government, user fees have been levied to help pay for federal services
    and resources that benefit specific groups of users. User fees differ from
    broad-based taxes in that they attempt to recover some amount of the
    government expenditures made for a specific program. For example, Congress
    enacted laws to increase the use of recreation fees for access to federal
    parks, forests, and BLM lands in the 1990s.

    While agencies are generally to deposit funds they receive in the general
    fund of the Treasury under the Miscellaneous Receipts Act, some federal
    agencies have specific legislative authority to distribute funds to states
    and counties or to deposit funds into special accounts in the Treasury for
    the agency's or program's use. Generally, funds that are deposited into
    the Treasury as miscellaneous receipts are deposited in the general fund
    where they are then available to be appropriated as Congress may see fit.
    Funds that are deposited into special accounts in the Treasury are
    dedicated for specific purposes. The special accounts may be permanently
    appropriated or further congressional action may be needed to make the
    funds available. Some agencies are also authorized to retain funds for
    credit to their appropriations.

    Grazing Occurs on About 235 Million Acres of Federal Lands for a Variety
    of Purposes

    In fiscal year 2004, BLM, the Forest Service, the National Park Service,
    U.S. Fish and Wildlife Service, Reclamation, DOE, the Army, the Corps, Air
    Force, and Navy allowed more than 22.6 million AUMs of grazing on about
    235 million acres of the lands they manage.13 BLM and the Forest Service
    managed most of this grazing activity, allowing almost 21.9 million AUMs
    on almost 231 million acres, or more than 98 percent of the grazed lands.
    The remaining eight agencies allowed almost 794,000 AUMs of grazing on
    more than 4 million acres. While the agencies' grazing programs are
    similar in that they offer private ranchers access to federal lands and
    vegetation for their livestock, agencies manage their grazing programs
    under different authorities and for different purposes.

    BLM and the Forest Service Managed About 230.6 Million Acres for About
    21.9 Million AUMs of Private Livestock Grazing in Fiscal Year 2004 to
    Foster Economic Development

    As table 1 shows, in fiscal year 2004, BLM and the Forest Service approved
    a total of almost 21.9 million AUMs for grazing on more than 230.6 million
    acres-BLM approved almost 12.7 million AUMs on more than 137.7 million
    acres, and the Forest Service approved almost 9.2 million AUMs on more
    than 92.9 million acres. Ranchers were billed for and used fewer AUMs-a
    total of almost 13.7 million AUMs-primarily because of the continuing
    drought in the western and southwestern states, according to agency
    officials. While BLM maintains a list of historical AUMs-or grazing
    privileges that have been reduced from historical amounts and are not
    available to be used-these numbers do not affect the totals.

    13The Forest Service data on the extent of grazing is for the grazing year
    March 2004 to February 2005; the remaining agencies provided grazing data
    for fiscal year 2004.

    Table 1: Extent of Grazing in Fiscal Year 2004 on BLM and Forest Service
    Lands, Acres and AUMs

                         Agency Acres AUMs approved AUMs billed

    BLM state officesa

               Arizona             7,955,000          660,000             354,000
             California            5,672,000          421,000             196,000
              Colorado             6,593,000          655,000             311,000
                Idaho              10,756,000        1,352,000            899,000
               Montana             7,839,000         1,366,000          1,178,000
             New Mexico            11,533,000        1,869,000          1,134,000
               Nevada              39,331,000        2,129,000          1,075,000
          Oregon/Washington        12,786,000        1,058,000            740,000
                Utah               19,321,000        1,229,000            553,000
               Wyoming             15,917,000        1,951,000          1,193,000
              Subtotal            137,702,000c       12,691,000         7,634,000

                                    Forest Serviceb

               Eastern               75,000           35,000               34,000
            Intermountain          24,107,000        2,979,000          2,164,000
               Northern             8,268,000        1,095,000            539,000
          Pacific Northwest        11,408,000         550,000             398,000

          Pacific Southwest       12,353,000         486,000              374,000
           Rocky Mountain         17,129,000        1,927,000           1,564,000
              Southern              675,000           40,000               19,000
            Southwestern          18,908,000        2,052,000             959,000
              Subtotal            92,924,000        9,165,000           6,051,000
                Total             230,626,000       21,856,000         13,685,000

    Source: BLM and Forest Service (data); GAO (analysis).

    Note: Numbers may not total due to rounding.

    aBLM has 12 state offices, 2 of which-the Eastern Office and the Alaska
    Office-are not included here. BLM manages grazing under PRIA in the 11
    states listed, which are managed by the 10 state offices.

    bThe Forest Service is organized by regions, not states.

    cBLM authorizes grazing on approximately 160 million acres of land, but
    all the land may not be used for grazing in any given year. The number in
    the table represents BLM's best estimate of the lands on which grazing was
    billed.

    As table 1 shows, BLM's and the Forest Service's responsibilities for
    managing grazing varied considerably by state office or Forest Service
    region. The BLM Nevada state office had the most grazing in fiscal year
    2004, in terms of both acres and approved AUMs, while Montana had the

    most grazing in terms of billed AUMs; the California state office had the
    least grazing, in terms of both acres and approved AUMs. For the Forest
    Service, the Intermountain Region, which includes Utah, Nevada, and
    portions of Idaho and Wyoming, had the most grazing, while the Eastern and
    Southern regions had the smallest amounts of grazing. Appendix III
    contains the detailed extent of grazing for each BLM field office within
    each state office and Forest Service administrative office.

    Grazing is allowed on BLM and Forest Service lands for the purpose of
    fostering economic development for private ranchers and ranching
    communities by providing ranchers access to additional forage.
    Particularly in the western states, where the agencies manage anywhere
    from 30 to almost 85 percent of the land, access to federal forage
    increases the total forage available to ranchers, enabling them to
    increase the number of livestock they can support and sell. Under FLPMA,
    the Taylor Grazing Act, and the Granger-Thye Act, BLM's and the Forest
    Service's permits and leases are set for not more than 10 years and can be
    renewed without competition at the end of that period, which gives the
    permittee or lessee a priority position against others for receiving a
    permit or lease-a position called "preference." While ranchers have
    preference, they do not obtain title to federal lands through their
    grazing permits and leases, nor do they have exclusive access to the
    federal lands, which are managed for multiple purposes or uses.

    The Remaining Eight Federal Agencies Managed About 794,000 AUMs of Grazing
    on More Than 4 Million Acres in Fiscal Year 2004 to Help Them Achieve Land
    Management Objectives

    In fiscal year 2004, the National Park Service, Reclamation, U.S. Fish and
    Wildlife Service, DOE, and DOD services managed about 794,000 AUMs of
    grazing on more than 4 million acres of land. Table 2 shows the extent of
    grazing.

    Table 2: Extent of Grazing in Fiscal Year 2004 on Other Agencies' Lands,
    Acres and AUMs

    Number of parks, refuges, Agency projects, and installations Acresa AUMs
    approved AUMs billed Interior DOD

            National Park Service          31 parks 1,580,000b   71,000    63,000
                 Reclamation            36 projects  737,000c    91,000    77,000
    U.S. Fish and Wildlife Service    94 refuges  740,000b   199,000   199,000
                  Subtotal                      161  3,054,000  361,000   339,000
                     DOE                     1 site   291,000    13,000     6,000

         Air Force         12 installations    277,000      102,000        89,000
            Army           20 installations    201,000      126,000       122,000
           Corps                64 projects    169,000      162,000       161,000
            Navy            8 installations    16,000       30,000         28,000
          Subtotal                      104    663,000      420,000       399,000
           Total                        266   4,008,000     794,000       744,000

    Source: Agencies (data); GAO (analysis).

    Note: Numbers may not total due to rounding.

    aThe rate of AUMs per acre can vary, depending on the productivity of the
    land and does not necessarily show overuse or underuse of land.

    bThis total does not include about 2.7 million acres of National Park
    Service land in Alaska that has about 17,000 AUMs approved for grazing or
    almost 795,000 acres of U.S. Fish and Wildlife Service land in Alaska that
    has about 12,000 AUMs approved for grazing. These lands are approved for
    grazing of reindeer, and no fees are charged.

    cThis total includes almost 499,000 acres of Reclamation land with about
    47,000 AUMs approved and 41,000 billed AUMs that are managed by other
    agencies. Of the 499,000 acres, BLM managed almost 172,000 acres and the
    U.S. Fish and Wildlife Service managed almost 66,000 acres.

    As table 2 shows, the extent of grazing on the eight agencies' lands
    varied considerably in fiscal year 2004, with the National Park Service
    managing grazing on about 1,580,000 acres, while the Navy managed almost
    16,000 acres. In terms of approved AUMs, the U.S. Fish and Wildlife
    Service managed the most-more than 199,000 AUMs-while DOE allowed about
    13,000 AUMs.

    The eight agencies presented in table 2 manage or allow grazing for
    different purposes, as the following discussion details:

    National Park Service. The agency is authorized to allow grazing within
    any national park, monument, or reservation as long as such use is not
    detrimental to the primary purpose for creating the park, monument, or

    reservation. Agency regulations prohibit grazing except as (1)
    specifically authorized by statute, (2) required under a reservation of
    use rights arising from the acquisition of a tract of land, (3) required
    in order to maintain a historic scene, or (4) conducted as an integral
    part of a recreational activity. For example, in Virginia and North
    Carolina, the agency allows grazing at Blue Ridge National Parkway-about
    5,000 AUMs of cattle on more than 2,000 acres-to maintain a historic
    scene. In contrast, at the Appomattox Court House National Historical
    Park, the agency allowed grazing on almost 200 acres to maintain a
    desirable grass level. Grazing is managed as a special park use, requiring
    a permit, lease, concession, contract, or commercial use authorization.
    Each park superintendent approves or disapproves requests for special park
    uses, such as grazing, and can impose conditions to protect park resources
    and values and visitors and the visitors' experience. In fiscal year 2004,
    the National Park Service reported that grazing was permitted to occur at
    31 of its parks, with Glen Canyon National Recreation Area, in Utah and
    Arizona, accounting for the most acres-almost 666,000-and Point Reyes
    National Seashore, in California, accounting for the most AUMs-about
    18,500 AUMs on about 24,000 acres.

    U.S. Fish and Wildlife Service. The National Wildlife Refuge System
    Administration Act of 1966 authorizes various uses of U.S. Fish and
    Wildlife Service lands, including grazing, as long as the agency
    determines that such use is compatible with the major purposes for which
    the refuge was established. The agency uses grazing as a tool to manage
    habitat. For example, in the Anahuac, McFaddin, and Texas Point National
    Wildlife Refuges, along the Texas Gulf Coast, the agency allowed livestock
    grazing from October to April, the cool season of the year, to encourage
    different types of marsh grasses, generate annuals, and increase
    vegetative diversity, thereby opening up additional habitat for foraging
    waterfowl. In fiscal year 2004, the U.S. Fish and Wildlife Service
    reported that livestock grazing occurred on 94 of its refuges and wetland
    management districts, ranging from 25 AUMs on 60 acres at Detroit Lakes
    Wetland Management District in Minnesota to about 21,500 AUMs on 450,000
    acres at the Charles M. Russell National Wildlife Refuge in Montana.

    Reclamation. Reclamation allows its lands to be used for incidental
    purposes, such as recreation and grazing, as long as such uses do not
    interfere with the operation of the dams or irrigation works associated
    with these projects. In general, Reclamation allows grazing on its project
    lands when asked to do so by users, such as ranchers who have had
    historical access to the lands or wildlife managers wanting to improve
    habitat. For

    example, the Albuquerque Area Office allows grazing on more than 19,000
    acres in the Brantley and Avalon Reservoirs project area, thereby allowing
    ranchers access to lands that they historically grazed. In fiscal year
    2004, Reclamation reported that it permitted and leased lands for grazing
    at 36 of its facilities in 16 area offices, with the agency managing some
    of the permits and leases and other agencies, such as BLM, the U.S. Fish
    and Wildlife Service, or local and state agencies managing additional
    permits and leases under joint management agreements. For example, in
    central Washington state, BLM manages grazing on more than 8,000 acres of
    Reclamation land that is adjacent to BLM land in the Columbia Basin
    Project. In the same area, the Washington Department of Fish and Wildlife
    manages grazing on almost 18,000 acres of Reclamation land to improve
    vegetation and thereby enhance bird habitat. In total, in fiscal year
    2004, Reclamation issued permits and leases for about 91,000 AUMs of
    grazing on almost 737,000 acres-almost 44,000 AUMs and about 238,000 acres
    under Reclamation's management and about 47,000 AUMs and about 499,000
    acres managed by agreement with other agencies.

    DOE. The department allows grazing on only one site, the Idaho National
    Laboratory. Under the Taylor Grazing Act, the Secretary of the Interior is
    authorized, by order and with the approval of the relevant department, to
    establish grazing districts of certain public domain lands that are not in
    national forests, parks, or monuments. In Idaho, Interior, with the
    agreement of DOE, issued such an order, and livestock grazing continues on
    approximately 50 percent of the Idaho National Laboratory site. BLM
    manages the land as part of its grazing program but is to follow the
    security and land access requirements set by DOE.

    DOD. Under 10 U.S.C. S: 2667, the Secretaries of the Army, Air Force, and
    Navy are authorized to lease property under their control that is not
    excess property, if it will promote national defense or be in the public
    interest. The military services use this authority to lease rangelands on
    military installations and bases for grazing, among other uses. For
    example, the Air Force leases to nearby ranchers land that forms a buffer
    around the Melrose Air Force Range at Cannon Air Force Base in New Mexico.
    The buffer consists of rangelands surrounding target areas used in
    training exercises and protects more developed areas from stray (unarmed)
    bombs. According to Air Force staff, leasing the land to ranchers does not
    hinder training exercises, but it does provide access to grazing for
    neighboring landowners and to maintain rangeland, by keeping grass low, to
    control fire. Similarly, Fort Hood in Texas allows grazing on lands used
    for armored vehicle training maneuvers. The Army determined that grazing
    cattle could

    be compatible with training exercises, although uncertainty remains about
    the intensity of grazing that can be allowed, given the need to let
    vegetation recover from training exercises, and hence, reduce soil erosion
    into nearby streams and reservoirs. Like the Army, Air Force, and Navy,
    the Corps manages grazing on its lands under 10 U.S.C. S: 2667. In fiscal
    year 2004, the DOD military services leased about 494,000 acres for
    grazing, and the Corps leased about 169,000 acres.

    Federal Agencies Spent at Least $144 Millionon Grazing Activities,
    Although Some Agencies Do Not Track Expenditures for Grazing on Federal
    Lands

    Federal agencies spent at least $144.3 million in direct and indirect
    expenditures to support grazing activities on federal lands in fiscal year
    2004. The 10 federal agencies spent at least $135.9 million, of which the
    Forest Service and BLM spent the majority of funds, about $132.5 million.
    The 8 remaining agencies spent at least $3.4 million on their grazing
    programs, but not all of the agencies could estimate their expenditures
    because they do not conduct grazing as a major activity and therefore do
    not specifically track grazing expenditures. The 10 agencies spent funds
    on activities that directly supported grazing, such as managing permits
    and leases, monitoring resource conditions on grazing allotments, assuring
    permit and lease compliance, and implementing range improvements such as
    developing water sources and constructing fences. The agencies also spent
    funds on activities that indirectly supported grazing, such as management,
    budget, and personnel. In addition to these 10 agencies' expenditures,
    other federal agencies that do not have grazing programs spent at least
    $8.4 million to support grazing on public lands. While some of these
    agencies could identify their expenditures related to grazing on public
    lands, not all agencies could do so because they do not distinguish
    between work done on public and private lands. These agencies spent funds
    on activities related to grazing, such as grazing litigation, threatened
    and endangered species consultations for grazing plans, and the removal of
    predatory or nuisance wildlife from grazing lands. Because some agencies
    do not track their grazing expenditures on public lands specifically, the
    expenditures presented are a conservative estimate of federal grazing
    expenditures; expenditures would most likely be higher if these agencies
    could provide estimates.

    BLM and the Forest Service Spent About $132.5 Million on Direct, Indirect,
    and Range Improvement Activities for Grazing Programs in Fiscal Year 2004

    BLM and the Forest Service spent about $132.5 million to manage their
    grazing programs in fiscal year 2004-BLM spent more than $58.3 million,
    and the Forest Service spent almost $74.2 million. As shown in table 3,
    the agencies spent these funds on both direct, indirect, and range
    improvement activities. BLM has implemented a cost-management system that
    identifies direct and indirect expenditures and used it to identify its
    direct and indirect expenditures in fiscal year 2004. Unlike BLM, the
    Forest Service does not have a cost-management system, but rather reports
    expenditures for items in its budget, called budget line items.14 The
    agency uses its Foundation Financial Information System to centrally track
    and formally report expenditures. For fiscal year 2004, the Forest Service
    used expenditure reports for grazing and related line items, in addition
    to its WorkPlan system that shows its intended work plans for the fiscal
    year, to identify the amount of expenditures.15

    Table 3: Expenditures by BLM and the Forest Service for Direct, Indirect,
    and Range Improvement Grazing Activities, Fiscal Year 2004

                                  Dollars in millions

    Number of BLM field offices and Forest Service administrative Agency
    offices allowing grazing Expenditures

                                          BLM

                                      Direct $27.9

    Indirect

    Range improvement funds (both direct and indirect)

                           Subtotal 107 $58.3 Forest Servicea

    14According to a Forest Service financial management official, the agency
    has not implemented a cost-accounting system because it has been focused
    on improving the agency's financial statements, which we previously
    identified as having material control weaknesses.

    15The Forest Service implemented a new work planning system, called
    WorkPlan, in fiscal year 2004. The system allows forests and districts to
    develop detailed plans, including personnel resources, vehicles, and other
    resources, needed for conducting work on individual projects. The plans
    are used to allocate budgets and are to be updated during the year to keep
    the plans current.

    (Continued From Previous Page)

    Dollars in millions Range improvement funds (both direct and indirect)

                             Number of BLM field offices and
                                  Forest Service administrative
                    Agency             offices allowing grazing      Expenditures
                    Direct                                                   58.0
                  Indirect                                                   13.3

                                   Subtotal 99 $74.2

                                    Total 206 $132.5

    Source: BLM and Forest Service (data); GAO (analysis).

    aThe Forest Service estimated direct expenditures from the Forest Service
    grazing line item, its watershed and vegetation line item, and its General
    Management and other cost pools. Because the watershed and vegetation line
    item can be spent for other programs in addition to the grazing program,
    the Forest Service allocated a portion (11 percent) of these expenditures
    using WorkPlan, a tool used to estimate and plan fiscal year workloads by
    program. To estimate the expenditures from its General Management and
    other cost pools, the agency attributed a portion of the grazing line item
    equal to the amount of funds allocated to the pools and attributed a share
    of the watershed and vegetation line item equal to the allocated portion
    (11 percent) of funds in the pools.

    In fiscal year 2004, the agencies generally included the same activities
    in reporting their expenditures. Both BLM and the Forest Service included
    managing grazing permits and leases, monitoring resource conditions on
    grazing allotments, conducting environmental assessments for allotments,
    and managing grazing fees as direct expenditures. Both agencies included
    expenditures that specifically related to grazing management, rather than
    broader range management expenditures, because grazing activities are
    distinct from more general rangeland management activities. According to
    agency officials, many range management activities need to be conducted
    whether or not grazing occurs. For example, monitoring rangeland
    conditions through vegetation surveys supports work that the agencies
    conduct to manage noxious weeds. While some noxious weeds may occur on
    federal lands as a result of livestock grazing, some can be transported by
    other means. Although both agencies spent funds on land management
    planning to support their specific grazing plans and activities, neither
    agency included land management planning expenditures. According to BLM
    and Forest Service officials, land management planning and environmental
    impact statements are important enough to be a separate direct expenditure
    from grazing and would continue to occur if the agencies no longer
    permitted or leased grazing activities on their lands. Furthermore,
    according to agency officials, land management planning encompasses all
    activities-including livestock grazing-conducted by BLM, at the field
    office level on public lands, or by the Forest Service, at the national
    forest level for all national forest system lands. Even if grazing

    activities were not conducted, other range management activities, such as
    oil and gas leasing and off-road vehicle use, would still need to be
    planned and studied.

    For indirect grazing activities in fiscal year 2004, BLM spent almost
    $18.7 million, and the Forest Service spent an estimated $13.3 million.
    Indirect activities are those that cannot be specifically attributed to
    grazing because they also benefit other resource programs. These include
    activities such as administrative activities, infrastructure, or technical
    support.16 One method of allocating indirect expenditures is to pool the
    activities and allocate the related expenditures across all the programs
    that use the activities. BLM allocated its indirect expenditures using its
    cost-management system. The system allocated expenditures for such
    activities as management, state office expenditures, and BLM office
    expenditures in fiscal year 2004. Because the Forest Service does not have
    a cost-accounting system, it allocates its budget according to potential
    indirect expenditures. The Forest Service has six cost pools, into which
    it allocates a percent of each of its budget line items for the fiscal
    year to be used to cover indirect expenditures during the year.17

    BLM and the Forest Service also spent $14.6 million on range improvement
    activities in fiscal year 2004. These funds are revenues from grazing fees
    charged in 2003 and deposited as receipts in the agencies' range
    improvement accounts. The agencies use the funds to pay for direct and
    indirect activities related to range improvement projects that include
    constructing fences, developing water sources such as tanks or
    impoundments, and seeding to improve vegetation and forage amounts. The
    expenditure of funds on these assets represents an investment in

    16OMB defines those costs that can be considered indirect. We applied
    these definitions to the expenditures supplied by the agencies. OMB,
    Managerial Cost Accounting Concepts and Standards for the Federal
    Government: Statement of Federal Financial Accounting Standards Number 4
    (Washington, D.C.: July 31, 1995).

    17The six cost pools are General Management, Public Communications,
    Ongoing Business Services, Common Services, Office of Worker's
    Compensation, and Unemployment Compensation Insurance. The General
    Management pool and some of the activities in the Common Services pool are
    considered direct or support rather than indirect costs. These are
    included in the estimate of direct expenditures.

    infrastructure assets that are the property of the United States.18 Under
    federal financial management standards, both BLM and the Forest Service
    are working to identify the value of these assets, which is currently
    unknown.

    The Remaining Eight Federal Agencies Spent at Least $3.4 Million on
    Grazing Programs in Fiscal Year 2004, but They Do Not Track All
    Expenditures

    In fiscal year 2004, the National Park Service, U.S. Fish and Wildlife
    Service, Reclamation, DOE, and the DOD services spent at least $3.4
    million on their grazing programs, as shown in table 4. Because it
    arranges with BLM to manage its grazing program, DOE incurs only
    incidental expenditures related to grazing. Because the agencies use
    grazing as a tool to support other management goals, they do not
    specifically track grazing, and hence do not track direct or indirect
    grazing expenditures. For this reason, the expenditures are the best
    estimates of individuals who manage the grazing programs.

    18In proposed regulations, BLM would allow cooperators (ranchers and
    others), subject to valid existing rights, to share title with the United
    States to permanent structural range improvements, such as fences, wells,
    and pipelines, where authorization is granted after February 6, 2004, in
    proportion to their contributions to the development and construction
    costs.

    Table 4: Estimated Expenditures by the National Park Service, U.S. Fish
    and Wildlife Service, Reclamation, DOE, and DOD on Grazing Activities,
    Fiscal Year 2004

    Agency

                 Number of parks, refuges, projects, and installations

    Estimated expendituresa Interior DOD

                           National Park Service         31 parks        $410,000
                                     Reclamation   36 projects             91,000
                  U.S. Fish and Wildlife Service    94 refuges         1,099,000b
                                        Subtotal              161      $1,600,000
                                             DOE           1 site           1,500

                       Air Force            12 installations              377,000
                            Army            20 installations              717,000
                           Corps                 64 projects              672,000
                            Navy             8 installations               39,000
                        Subtotal                         104           $1,805,000
                           Total                         266           $3,406,000

    Source: Agencies (data); GAO (analysis).

    Note: Numbers may not total due to rounding.

    aNot all offices provided an estimate.

    bThis total does not include $9,000 of expenses at Yukon Delta National
    Wildlife Refuge in Alaska for operations approved for nonfederal use for
    grazing of reindeer; no fees are charged.

    The field managers for these eight agencies identified the following
    activities associated with grazing on federal lands: fence installation
    and repair, cattle troughs, cattle guard installation, fertilizer,
    personnel, security, monitoring and inspections, control of invasive
    species and noxious weeds, and managing grazing leases. Generally, the
    estimates are low because they do not include all expenditures-including
    indirect expenditures-and several offices did not provide estimates.

    Other Agencies Have Grazing-Related Activities and Expenditures of at
    Least $8.4 Million, but Some Do Not Know Their Expenditures for Grazing on
    Federal Lands

    In addition to the 10 federal agencies' expenditures, other federal
    agencies estimated that they spent $8.4 million on activities that are
    related to grazing on federal lands. Agencies that have grazing-related
    activities include the following:

    o 	several USDA agencies that provide research, insurance, resource
    management, and other agricultural services to farmers and ranchers on
    both federal and private lands;

    o 	Justice, the Interior's Office of the Solicitor, and USDA's Office of
    General Counsel, which perform legal services for BLM and the Forest
    Service;

    o 	the National Oceanic and Atmospheric Administration's National Marine
    Fisheries Service (NMFS) and the U.S. Fish and Wildlife Service, which
    consult with agencies on threatened and endangered species;

    o 	the U.S. Geological Survey (USGS), which provides research on resource
    conditions on rangelands; and

    o 	the Environmental Protection Agency, which provides grants to improve
    watersheds that may include areas with resources degraded by grazing.

    The agencies estimated, when possible, the share of their fiscal year 2004
    expenditures for grazing-related activities on federal lands, as shown in
    table 5.

    Table 5: Expenditures for Grazing-Related Activities by Other Agencies on
    Federal Lands, Fiscal Year 2004

                              Agency Activity Expenditures

    Agricultural services USDA

    Animal and Plant Health   Wildlife Services conducts control    $5,183,000
                                   projects (hunting and trapping)
         Inspection Service      for nuisance species and predators.
                                        Plant Protection and
                                Quarantine conducts insect control on
                                     western lands in particular
                                    and has a Mormon cricket and
                                  grasshopper program that targets
                               treatments in infested areas to prevent
                                             outbreaks.

           Cooperative State     Conducts education and extension  Not availablea
               Research,         services to help public agencies
    Education, and Extension   like BLM and the Forest Service
                                   and private landowners manage
                Service               their range resources.
                                  Provides operating, ownership,   Not availablea
          Farm Service Agency     and emergency loans to farmers
                                    and ranchers. Also provides
                                 disaster assistance to livestock
                                     producers through various
                                             programs.

    National Agricultural Statistics Conducts surveys of different farm
    sectors, prices, and products, $105,500 b Service including ranching,
    livestock, and cattle. Conducts specific surveys

    to produce data needed to calculate federal grazing fee.

         Natural Resources      Works with private landowners to   Not availablea
                               conserve soil, water, vegetation,
        Conservation Service      and other resources. Manages
                                 programs to conserve wetlands,
                                  land (easements), and water.
                              Provides insurance products that may Not availablea
    Risk Management Agency      apply to federal lands and
                              tools for making resource decisions.
                                    Developing a Web tool to
                                   assist mangers in applying
                                prescribed burns to rangelands.

    Subtotal agricultural services $5,183,000 b Legal services Subtotal legal
                            services $846,000 Consultations

        USDA Office of General   Provides legal advice and support for   $194,000
                                         the Forest Service in
               Counsel          managing its grazing lands and permits.
    Interior's Office of the  Provides legal advice and support for  $493,000d
              Solicitorc                 agencies that manage
                                           grazing programs.
               Justice              Provides legal services such as
                                   litigating grazing-related cases.     $159,000

    U.S. Fish and Wildlife   Conducts consultations to determine if   $549,000
              Serviced                     grazing programs
                                 jeopardize terrestrial or freshwater
                                      threatened and endangered
                               species, or adversely modify or destroy
                                          critical habitat.
               NMFSd            Conducts consultations to determine if
                                           grazing programs              $132,000
                               jeopardize ocean-dwelling and anadromous
                                            threatened and
                              endangered species, or adversely modify or
                                      destroy critical habitat.
    Subtotal consultations                                            $681,000

    (Continued From Previous Page)

                              Agency Activity Expenditures

    Research Other

                USGSe            Conducts research on the effects      $1,350,000
                                 of grazing on plant communities,
                                including invasive species; runoff
                                  and erosion; select species or
                                  species groups; and ecosystem
                                health, including riparian areas.
        Agricultural Research       Conducts research on plant     Not availablea
               Service          resources, forage, livestock, and
                                  grazing management, as well as
                                  natural resource problems such
                                       as invasive species.
    Forest Service Research    Conducts integrated studies of
                                  grazing on public lands, which         $368,000
                                  involves effects of livestock
                                      grazing on resources.
          Subtotal research                                            $1,718,000

    Environmental Protection   Provides grant money to states   Not availablea
                                  under section 319 of the Clean
                Agency          Water Act to improve watersheds by
                                     reducing nonpoint source
                                  pollution, including increased
                                  runoff and sedimentation from
                                        livestock grazing.
         Total all activities                                         $8,428,000b

    Source: Agencies (data); GAO (analysis).

    Note: Numbers may not total due to rounding.

    aThese agencies could not distinguish their expenditures on private and
    public lands.

    bThe National Agricultural Statistics Service estimated its expenditures
    to be $105,500, the full amount of which was reimbursed by BLM and the
    Forest Service because the data produced are used to set grazing fees.
    Therefore, these expenditures are not included in the total.

    cThe Solicitor's expenditures include funds reimbursed by BLM for legal
    services provided to the agency. According to BLM staff, because the
    attorney provides services to BLM in general, the appropriate share of
    expenditures that should be applied to grazing is difficult to estimate.
    As a result, some of the Solicitor's funds may also be counted under BLM's
    expenditures.

    dThe U.S. Fish and Wildlife Service noted that fiscal year 2004 was the
    first year that it implemented its cost-accounting system to capture these
    costs, and it has not yet determined the level of accuracy that the system
    will provide for distinguishing expenditures for various activities. While
    NMFS did not use a cost-accounting system to determine its expenditures,
    it estimated its expenditures using time estimates for specific employees
    that worked on grazing consultations in 2004. NMFS reported these data for
    the calendar year, not the fiscal year.

    eUSGS estimated its fiscal year 2004 expenditures based on its 2005 budget
    figures; according to an official, funding has been stable.

    Agricultural services. As the table shows, in fiscal year 2004, the
    largest amount of identified expenditures for grazing-related activities
    went to agricultural services provided by USDA. The Animal and Plant
    Health Inspection Service spent most of these funds to control nuisance
    species and insects, such as Mormon crickets and grasshoppers, that affect
    forage on federal lands. Not all the agencies identified as having
    programs that might be used by ranchers with federal permits and leases
    could separate out the funds they spent on public lands. For example, the
    Natural Resources Conservation Service helps ranchers manage their soil,
    water, and vegetation to prevent the resources from becoming degraded;
    however,

    because the agency focuses on ranchers, it cannot distinguish the work
    that it performs on private land from work on federal lands.

    Legal services. Justice attorneys represent the United States in cases
    that go to court or settlement, while Interior's Office of the Solicitor
    and USDA's Office of General Counsel provide legal advice to the agencies.
    In addition to these expenditures, BLM and Forest Service staff provide
    support work for litigation in the form of copying and preparing
    administrative files and documents, but these expenditures are not tracked
    separately from the agencies' other work. Legal services would include any
    payment of attorney fees; however, none were paid in fiscal year 2004.
    Attorney fees are usually paid by agencies, but in some cases would be
    paid from the Department of Treasury's Judgment Fund.

    Consultations. The federal agencies with grazing programs must consult, in
    some cases, with the U.S. Fish and Wildlife Service and NMFS to determine
    if their grazing programs pose any problem for threatened and endangered
    species. The U.S. Fish and Wildlife Service consults with the agencies on
    the potential effects to terrestrial animals and freshwater species, while
    NMFS consults with the agencies on the potential effects to anadromous
    fish-that is, fish that live in both fresh and saltwater.

    Research. USGS has four centers that conduct research on the effects of
    grazing on plant communities, including invasive plants; runoff and
    erosion, and other hydrologic and soil conditions; select species or
    species groups, including sage grouse, amphibians, grassland birds, and
    bats; and ecosystem health, including riparian areas. The agency works
    with federal land management agencies on these and related issues to
    inform management actions and plans and to design and implement rangeland
    monitoring and inventories. The Forest Service's Rocky Mountain and
    Pacific Northwest research stations conduct integrated studies of the
    effects of livestock grazing on lands and resources and assist national
    forests and grasslands by providing them this information. Finally, USDA's
    Agricultural Research Service has more than 100 laboratories in almost
    every state. The agency conducts research on ecosystems and sustainable
    management, plant resources, forage management, livestock management, and
    management of pests and weeds. Because the agency's work benefits both the
    livestock industry and public lands, the Agricultural Research Service
    cannot estimate its expenditures related to grazing on federally managed
    lands.

    Environmental Protection Agency. The agency provides grants to states to
    improve watersheds and water quality that has been impaired by nonpoint
    sources of pollution, such as agricultural runoff. States use the funds to
    develop projects to remove or decrease sources of pollution. For example,
    New Mexico received funds to improve the Chama River and its tributaries,
    and the Santa Fe National Forest participated by conducting different
    vegetation and livestock management activities, such as fencing riparian
    areas, developing alternative water sources in areas away from the river,
    and ensuring the rotation of livestock into different pastures away from
    the river. However, because many grazing areas include both federal and
    nonfederal lands and because states are not required to track what type of
    land is involved in a project, Environmental Protection Agency officials
    stated that they cannot identify the funds that are spent on federal lands
    that have been grazed.

    Federal Agencies Collected About $21 Million in Grazing Receipts in Fiscal
    Year 2004-Less Than One-Sixth of the Expenditures Needed to Manage Grazing

    The 10 federal agencies collected a total of about $21 million from fees
    charged for their grazing permits and leases in fiscal year 2004-less than
    one-sixth of the expenditures needed to manage grazing; the largest amount
    of funds, $17.5 million, was collected by BLM and the Forest Service. From
    the total amount, the agencies distributed almost $5.7 million to states
    and counties, deposited almost $3.8 million in the Treasury as
    miscellaneous receipts, and deposited at least $11.7 million to separate
    Treasury accounts to be further appropriated or used by the agencies for
    their various programs. In addition, the DOD services received payment
    in-kind valued at almost $1.4 million to offset grazing fees, and
    Reclamation and the U.S. Fish and Wildlife Service also received in-kind
    services. Reclamation received services valued at about $1,100, and the
    U.S. Fish and Wildlife Service received services of unknown value. The
    distribution of funds depends on the agencies' different authorities.

    BLM and the Forest Service Collected About $17.5 Million in Grazing
    Receipts in Fiscal Year 2004, Distributed About $4.8 Million to States and
    Counties, and Deposited About $3.7 Million to the General Fund of the
    Treasury and Almost $8.8 Million to Range Improvement Funds

    BLM and the Forest Service collected about $17.5 million, or 83 percent,
    of all grazing receipts federal agencies collected in fiscal year 2004. As
    shown in table 6, depending on the authorities under which the receipts
    were raised, the funds were distributed to the states, deposited into the
    general fund of the Treasury, and deposited into special accounts in the
    Treasury for further appropriation and agency use, including use for range
    improvement.

           Table 6: BLM and Forest Service Grazing Receipts, Fiscal Year 2004

                                  Dollars in millions

                                Disposition of receipts

    Receipts deposited

    Receipts deposited in Treasury range

    Receipts distributed to states and counties

            in the general fund, Agency Receipts Treasury improvement funds

                               BLM $11.8 $2.2 $3.7 $5.9a

    Forest Service 5.7 2.6 Unknown

                               Total $17.5 $4.8 $3.7 $8.8

    Source: Agencies (data); GAO (analysis).

    aIn fiscal year 2004, BLM also deposited $1.2 million in certain mineral
    receipts as funds for range improvements. The total funds deposited were
    therefore $7.1 million.

    Under FLPMA, 50 percent or $10 million, whichever is greater, of fees
    collected in a year for grazing on BLM lands managed under the Taylor
    Grazing Act and the Act of August 28, 1937, and on Forest Service land in
    the 16 western states, are to be credited to a special fund receipt
    account in the Treasury for range rehabilitation, protection, and
    improvements, called the range improvement fund. Half of this account is
    authorized to be appropriated for use in the district, region, or national
    forest from which it was generated, and the remaining half is to be used
    for range rehabilitation, protection, and improvement as the Secretary
    directs. According to agency officials, the agencies distribute 50 percent
    of the actual grazing receipts from their individual grazing accounts to
    their respective range

    improvement funds. As table 6 shows, in fiscal year 2004, BLM distributed
    about $5.9 million to its range improvement fund, and the Forest Service
    distributed about $2.9 million to its range improvement fund, for a total
    of about $8.8 million. BLM distributes grazing fees from four accounts,
    according to where the funds were collected-within or outside a grazing
    district or from grasslands. It also deposits certain mineral receipts
    into its range improvement fund; in fiscal year 2004, it deposited $1.2
    million in mineral receipts. The Forest Service deposits receipts and
    distributes funds from its National Forest Fund that also contains
    receipts for other activities on forest lands such as timber harvest.

    In addition to the receipts distributed to range improvement-under the
    Taylor Grazing Act, the Act of August 28, 1937, and the Bankhead-Jones
    Farm Tenant Act-BLM also distributes receipts from the four accounts to
    states and the Treasury, according to whether the fees were collected
    within or outside a grazing district or from grasslands.19 For lands
    within grazing districts-those lands on which grazing is permitted-BLM
    distributes 12.5 percent of receipts to the states in which the grazing
    districts are situated and deposits the remaining receipts in the Treasury
    as miscellaneous receipts. For lands outside of grazing districts-those
    lands that are leased-BLM distributes 50 percent of the receipts to the
    states and does not return any funds to the Treasury as miscellaneous
    receipts. For grasslands, BLM distributes 50 percent of receipts to the
    range improvement fund, 25 percent to states, and 25 percent to the
    Treasury as miscellaneous receipts. The states are to distribute the funds
    to the counties in which the lands are permitted or leased for school or
    road purposes. In 2004, the agency distributed more than $2.2 million to
    the states and counties and deposited more than $3.7 million in the
    Treasury.

    Under the Act of May 23, 1983, the Forest Service distributes 25 percent
    of all of its receipts-timber, recreation, grazing, and others-to states
    for schools and roads. Alternatively, the states can receive funds under
    the Secure Rural Schools and Community Self-Determination Act of 2000.
    This act sought to stabilize payments to states in which shared revenues
    from the federal lands, such as from timber, were dwindling. The act
    allows some counties and states to choose a payment equal to the average
    of the three highest payments for Forest Service receipts during a
    particular eligibility period. As a result, the Forest Service makes a mix
    of payments,

    19BLM also distributes funds from certain lands in Oregon and California
    under the Act of August 28, 1937, 50 Stat. 875.

    depending on what each county has chosen. In 2004, the Forest Service
    estimated that it distributed more than $2.6 million in grazing receipts
    to the states and counties; because the Forest Service deposits many types
    of receipts into the Treasury, it was unable to estimate the amount of
    grazing funds deposited in the Treasury as miscellaneous receipts.

    National Park Service, U.S. Fish and Wildlife Service, Reclamation, DOE,
    and DOD Services Collected More Than $3.7 Million in Grazing Receipts in
    Fiscal Year 2004 and Distributed About $855,000 to States and Counties,
    Deposited About $65,000 in the General Fund of the Treasury, and Deposited
    at Least $2.9 Million in Separate Treasury Accounts

    Grazing receipts collected by the National Park Service, U.S. Fish and
    Wildlife Service, Reclamation, and the DOD services totaled more than $3.7
    million in fiscal year 2004, with the U.S. Fish and Wildlife Service
    generating the largest amount, more than $1.0 million. In addition, the
    agency received services in-kind of an unknown value. Under the
    interagency agreement between DOE and BLM, BLM retains grazing fees
    collected at DOE's Idaho National Laboratory. The DOD services-which
    combined received a total of more than $2.0 million from fees-also
    received almost $1.4 million in payments in-kind that offset grazing fees.
    The agencies have different authorities for distributing the receipts
    collected from use of their lands. Table 7 shows the results of the
    distribution in fiscal year 2004. Of the $3.7 million in total receipts,
    more than $855,000 was distributed-by three of the eight agencies-to the
    states or counties in which the receipts were collected in fiscal year
    2004. Two agencies deposited about $65,200 in the general fund of the
    Treasury as miscellaneous receipts, and each of the agencies deposited
    varying portions of the receipts for their programs.20

    20The amounts distributed and deposited are greater than the amounts
    collected because the DOD military services have reimbursable programs in
    which they can collect and keep funds and use them to reimburse or fund
    their grazing and agricultural programs. The amounts spent do not have to
    equal the amount collected in any given year.

    Table 7: National Park Service, U.S. Fish and Wildlife Service,
    Reclamation, DOE, and DOD Services Grazing Receipts, Fiscal Year 2004

                                Disposition of receipts

    Receipts deposited in special Treasury

                                    Agency Receipts

                                      Receipts distributed to states and counties

                                 Receipts deposited in

    the general fund, Treasury

    accounts for agency programs Interior DODe Total without offsets
    $3,708,000 $855,000 $65,200 $2,952,000

            National Park Service        $196,000     $800    $2,500     $192,000
                 Reclamation             478,000a       0        0       478,000b
        U.S. Fish and Wildlife Service   1,029,000  541,000c     0       488,000c
                   Subtotal             $1,702,000  $542,000  $2,500   $1,158,000
                     DOE                          d

                Air Force             $663,000        0         0        $773,000
        Payment in-kind (offsets)    (300,000)
                  Army                706,000         0         0         941,000
        Payment in-kind (offsets)    (211,000)
                  Corps               487,000      313,000    62,700       42,000
        Payment in-kind (offsets)    (301,000)
                  Navy                150,000         0         0          39,000
        Payment in-kind (offsets)    (562,000)
                Subtotal             $2,006,000    $313,000  $62,700   $1,794,000
            Subtotal offsets        ($1,375,000)

    Total offsets ($1,375,000)

    Total with offsets $5,083,000 $855,000 $65,200 $2,952,000

    Source: Agencies (data); GAO (analysis).

    Note: Numbers may not total due to rounding.

    aOf the total, about $476,600 was collected as cash receipts, and about
    $1,100 was provided as services in-kind to offset fees. Of the $476,600,
    Reclamation collected more than $303,300, and the agencies that manage
    grazing permits and leases on Reclamation lands collected and distributed
    almost $173,300 to Reclamation. In addition to the $173,300 that they
    distributed to Reclamation, the agencies that manage grazing permits and
    leases for Reclamation collected and retained almost $108,500, for a total
    of almost $282,000.

    bOf the $476,600 collected by Reclamation in cash receipts, about $188,000
    was deposited into the Reclamation Fund, and about $279,200 was retained
    by Reclamation to repay projects; agency officials could not explain where
    about $9,400 was credited.

    cThe U.S. Fish and Wildlife Service disburses all receipts for activities
    such as grazing, forest products, oil and gas, sand and gravel, and others
    from its National Wildlife Refuge Fund. Because the agency cannot separate
    out the disbursed funds by type, such as grazing, we used the percent that
    grazing funds made up of total funds to show the distribution. Grazing
    funds were 16 percent of the total funds.

    dDOE has an agreement with BLM to manage its grazing and therefore the
    grazing receipts gathered are included in BLM's totals.

    eThe military services' programs are reimbursable in that the services
    collect funds and then use those funds to reimburse or pay for program
    expenditures.

    National Park Service. The National Park Service has the authority to
    recover its costs of providing services associated with its special-use
    expenditures. These reimbursements are to be credited to the current
    appropriation. Under National Park Service guidance, each national park
    retains funds to reimburse its expenditures for managing grazing and is
    responsible for calculating the amount of funding that it can recover.21
    In fiscal year 2004, the parks retained about 98 percent of their grazing
    receipts and distributed about 1 percent to the Treasury. Two parks-Blue
    Ridge National Parkway and Point Reyes National Seashore-gathered 75
    percent, or about $146,000, of the total receipts. In addition to the
    amounts retained by the parks, the City of Rocks National Reserve in Idaho
    distributed about $800 to the state in fiscal year 2004 under a
    cost-sharing arrangement.

    U.S. Fish and Wildlife Service. Under the Refuge Revenue Sharing Act of
    1935, as amended, the U.S. Fish and Wildlife Service deposits grazing
    receipts-as well as receipts it gathers for other uses of its lands-into a
    separate Treasury account called the National Wildlife Refuge Fund. The
    funds deposited remain available until expended, without further
    appropriation, and the Secretary may pay necessary expenditures incurred
    by the U.S. Fish and Wildlife Service from the account. The act also
    requires the agency to make payments to counties to offset tax losses for
    the purchase of fee title lands,22 based on a formula contained in the law
    that entitles counties to the greater of three amounts: (1) $0.75
    multiplied by the total acres of fee title land in the county; (2)
    three-quarters of 1 percent of the fair market value of the fee title land
    in that county; or (3) 25 percent of the net receipts collected by the
    agency at that unit. The Secretary is also required to pay 25 percent of
    the net receipts collected on lands reserved from the public domain. In
    practice, the agency retains a portion of all receipts from its lands to
    pay for various administrative and

    21In a recent GAO report, we found inconsistencies in the cost recovery
    methods used by parks for some of their special use permits, the same type
    of permit used for grazing activities. GAO, National Park Service:
    Revenues Could Increase by Charging Allowed Fees for Some Special Use
    Permits, GAO-05-410 (Washington, D.C.: May 6, 2005).

    22We use fee title land to refer to land that was acquired by the United
    States and is managed by the U.S. Fish and Wildlife Service.

    refuge expenditures and provides the remainder to the counties. In fiscal
    year 2004, the agency collected more than $6 million in receipts for all
    permitted uses on its lands; and about 16 percent of the receipts were
    grazing receipts. After the agency retained $3.1 million for its use, it
    had about $3.5 million to pay to the counties. Because grazing receipts
    collected in fiscal year 2004 represented about 16 percent of total
    receipts, we estimate that the U.S. Fish and Wildlife Service retained
    about $488,000 for its refuge system administration and distributed about
    $541,000 to counties.

    Reclamation. Reclamation credits revenues generated from grazing leases in
    a number of different ways. For example, under specific project
    authorizations, Reclamation retains receipts to repay projects or deposits
    funds to be appropriated for future projects. Under Reclamation's
    agreements with the agencies that manage leases on its land, grazing fees
    will be deposited into a Treasury account. When authorized by Reclamation,
    the fees may remain with the managing agency to serve as reimbursement. In
    fiscal year 2004, of the total amount collected for grazing on Reclamation
    land, about $303,300 came from grazing leases that Reclamation manages and
    about $173,300 came from leases managed by other agencies; the agency also
    received about $1,100 in services in-kind to offset fees. Reclamation
    deposited about $188,000 in the Reclamation Fund in the Treasury and
    retained about $279,200 to repay projects (agency officials could not
    explain into which of these accounts the remaining $9,400 was deposited).
    The other agencies that manage grazing leases on Reclamation land kept
    about $108,500 in grazing receipts.

    DOD. The Army, Air Force, and Navy do not return grazing receipts to the
    states or the Treasury, while the Corps is required to deposit all of its
    receipts-for recreation, grazing, or other leases of lands surrounding its
    water projects-in the Treasury; the Secretary of the Treasury is then
    required to return 75 percent of these receipts to the states in which the
    lands are located. The Army, Corps, Air Force, and Navy are authorized to
    retain and spend funds to cover the administrative expenses of their
    grazing programs and to cover the financing of multiple land use

    management programs at any of their installations.23 The Corps district
    offices began retaining and managing 10 percent of their receipts for
    administrative expenses in fiscal year 2004; agencywide, these receipts
    totaled almost $42,000. Under their leasing authorities, the Army, Corps,
    Air Force, and Navy collected more than $3.7 million in receipts and
    received payments in-kind valued at about $1.4 million to offset fees. The
    DOD services offset fees by allowing the lessees to work on the grazing
    lands to pay for a portion or all of the lease. For example, some of the
    grazing programs at DOD installations, projects, and bases allow the
    lessees to maintain fences or mow the lands, in addition to grazing, to
    reduce vegetation. The value of such services-and therefore the offset
    value-is either estimated by the staff in charge of grazing programs based
    on prior expenditures, prices from the Natural Resources Conservation
    Service, or bids submitted by the ranchers.

    Grazing Fees Charged by Federal Agencies, Western States, and Private
    Ranchers Varied Widely, Depending on the Purpose of the Fee and the
    Approach Taken to Set It

    Fees charged in 2004 by the 10 federal agencies, as well as state land
    agencies and private ranchers, varied widely, depending on the purpose for
    which the fees were established and the approach to setting the fee.24 On
    BLM and Forest Service lands in the 11 western states, the grazing fee was
    $1.43 per AUM, while the fees on other federal lands varied from $0.29 to
    over $112 per AUM. In part, the BLM and Forest Service fee, which was
    initially set by legislation and was extended by executive order, enables
    ranchers to stay in production by keeping fees low to account for
    conditions in the livestock market. Most other federal agencies generally
    charge a fee based on competitive methods or set to obtain a market price
    for the forage on their lands, and some of them also seek to recover
    expenditures for their grazing programs. Similarly, state land offices in
    the 17 western states and private ranchers seek market value for grazing
    on their lands; the state agencies charged from $1.35 to $80 per AUM,
    while

    23The agencies hold the funds in their suspense accounts until the funds
    can be either credited or obligated to the services' respective grazing
    programs. A recent GAO report discussed accounting weaknesses related to
    the accounts. GAO, DOD Problem Disbursements: Long-standing Accounting
    Weaknesses Result in Inaccurate Records and Substantial Write-offs,
    GAO-05-521 (Washington, D.C.: June 2, 2005). To improve accountability, in
    July 2005, the DOD Deputy Chief Financial Officer directed that specific
    suspense subaccounts be used to capture receipts from grazing leases.

    24Grazing fees for BLM and the Forest Service are for the grazing year
    (March to February). All other federal agencies reported fees for the
    fiscal year. States predominantly reported fees for the fiscal year,
    although some reported fees for the calendar year. Private ranchers' fees
    are reported for the calendar year.

    the average price private ranchers charged ranged from $8 per AUM in
    Arizona and Oklahoma to $23 per AUM in Nebraska. If the BLM and the Forest
    Service were to charge a fee for the purpose of recovering their
    expenditures, they could have charged up to $7.64 per AUM and $12.26 per
    AUM, respectively, in 2004. If they were to charge a market-based fee, the
    fee could vary but would likely not equal private or state fees. The
    prices charged by other federal agencies, states, and private ranchers may
    vary because of factors, such as range productivity, services provided by
    the landowner, and access to land.

    BLM and Forest Service Grazing Fee in Western States Is Lower Than Fees
    Charged by Other Agencies, States, and Ranchers Because It Was Established
    to Support the Western Livestock Industry

    The grazing fee BLM and the Forest Service charge in western states is
    based on a formula that was originally established by PRIA to, among other
    things, prevent economic disruption and harm to the western livestock
    industry; the formula expired after 7 years but was extended indefinitely
    by Executive Order 12548.25 Federal grazing fees are set using a formula
    to achieve multiple conflicting objectives, including achieving fair
    market value; recovering federal expenditures for the program; and
    treating different parties such as ranchers, the public, and other users
    of public lands equitably. As a result, the fee produced by the formula is
    generally lower than the fees charged by the other agencies, states, and
    private ranchers. Table 8 shows the fees charged by each agency, state,
    and private ranchers, as well as the approach to setting the fee-either a
    formula or a market-based approach. None of the federal or state agencies
    use an approach that strictly recovers their agencies' administrative or
    management expenditures.

    25The Taylor Grazing Act directs the Secretaries of Agriculture and the
    Interior to charge "reasonable fees." 43 U.S.C. S: 315(b). A federal
    district court has determined that FLPMA did not alter this objective. See
    Natural Resources Defense Council v. Hodel, No. S-86-0548, slip op. at 3-4
    (E.D. Cal. Oct. 13, 1987). The preamble to FLPMA states that it is the
    policy of the United States to receive fair market value for the use of
    public lands. However, FLPMA specially instructs the Secretaries of
    Agriculture and the Interior to determine a fee that is "equitable to the
    United States and to the holders of grazing permits and leases," which
    takes into consideration the costs of production along with other factors
    that may relate to the reasonableness of the fee. 43 U.S.C. S: 1751(a).
    The IOAA similarly provides that fairness, public policy interests, and
    other interests and relevant factors are to be considered in establishing
    a fee.

    Table 8: Fees Charged by Federal Agencies, State Land Agencies, and
    Private Ranchers, 2004

    Average fee charged Range of fees charged per AUM (or Agency per AUM (or
    equivalent)a equivalent)a Approach to setting fee

                                Interior USDA DOD States

                BLM                         b $1.43    Executive order-formula
    National Park Service  $1.35 to $7.00   4.30 Fixed prices and market value
                               1.50 to 25.00
                                 per acre
            Reclamation        1.27 to 56.46  10.93 Market value and fixed prices
    U.S. Fish and Wildlife  0.29 to 34.44  11.24   Market value and negotiated
              Service                                                      prices

    Forest Service-16 western states            b 1.43 Executive order-formula
    Forest Service-grasslands                   b 1.52 Formula
    Forest Service-eastern states    2.47 to 5.04    b      Formula and market
                                                                            value
    DOE                                         b 1.43 BLM fee-formula

    Air Force                  1.35 to 26.67c        15.49        Market value
    Army                      0.99 to 66.09 c        19.10        Market value
    Corps                     0.82 to 112.50c         6.22        Market value
    Navy                      10.42 to 97.49c        32.60        Market value

         Arizona                    b         2.23  Market-based appraisal with
                                                               annual
                                                             adjustment
        California      1.35 to 12.50            b Market based on average rates
         Colorado        6.65 to 8.91            b      Market-based formula
          Idaho                     b         5.15 Formula similar to federal fee
          Kansas                    d            d               d
         Montana        5.48 to 80.00            b    Market with minimum bid
         Nebraska      16.00 to 28.00            b    Market with minimum bid
        New Mexico  0.71 to 10.15 per            b    Market with minimum bid
                                 acre
          Nevada                    d            d               d
    North Dakota 1.73 to 19.69 per            b    Market with minimum bid
                                 acre
         Oklahoma       7.00 to 16.00            b    Market with minimum bid
          Oregon                    b         4.32  Formula based on production
                                                              factors
    South Dakota 3.00 to 56.00 per            b    Market with minimum bid
                                 acre
          Texas         4.16 to 12.50            b     Market-based appraisal
           Utah                     b 1.43 or 2.35 Formula similar to federal fee
                                    b 5.41 or 7.76        Market-based formula or
        Washington                                                  formula based
                                                       on production factors

    (Continued From Previous Page)

                                             Average fee
                                             charged
                               Range of fees        per AUM (or
                                     charged
    Agency                    per AUM (or       equivalent)a       Approach to
                                equivalent)a                          setting fee
    Wyoming                             b               4.13 Market-based
                                                                formula
    Private
    ranchers-17
    statese                 8.00 to 23.00              13.40 Market value

    Sources: GAO's analysis of data provided by 10 federal agencies, 17 state
    agencies, and USDA's National Agricultural Statistics Service.

    Note: The 11 western states used to calculate the BLM and Forest Service
    fee are Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico,
    Oregon, Utah, Washington, and Wyoming. The 9 western and Great Plains
    states used to calculate the Forest Service grassland fee are Colorado,
    Kansas, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas,
    and Wyoming.

    aFor permits and leases that are competitively bid, a total amount is
    often bid. In such cases, we divided that total by the amount of AUMs in
    the permit or lease to determine an equivalent fee per AUM.

    bData are not applicable or available.

    cThe ranges reported for the Army, Corps, Air Force, and Navy have been
    converted by dividing the total receipts plus offsets by the number of
    AUMs reported. The ranges are based on average lease prices for the
    installations, bases, and projects.

    dKansas and Nevada do not manage grazing on state trust lands and
    therefore did not provide fee information.

    eThe private rancher fees in the 17 states are calculated using AUM and
    per head data, adjusted. The formula is (AUM + per head)/2.

    As shown in table 8, the fee BLM and the Forest Service charged for the
    western states in 2004 was $1.43 per AUM. The fee, which is set for each
    upcoming grazing year (March to February), is produced by a formula that
    consists of a $1.23 base value, multiplied by the sum of three indexes
    that are calculated each year by USDA's National Agricultural Statistics
    Service.26 These indexes are based on data collected in the agency's
    livestock, prices, and cattle surveys. In effect, the fee is adjusted to
    reflect ranchers' ability to pay. The $1.23 base value represents the
    difference between the costs of conducting ranching business on private
    and public lands,27 as computed in a 1966 study of 10,000 ranching
    individuals in the western states. The three indexes are the following:

    26The exact formula is: Fee = $1.23 x (FVI +BCPI - PPI)/100. The data used
    to calculate the fee are from the year prior to the year when the fee is
    charged. For example, the 2004 fee is based on data from 2003.

    27The base was calculated with the premise that the cost of conducting
    livestock grazing on private and public lands should be equal. Under this
    premise, the $1.23 base was calculated by totaling the costs of conducting
    livestock grazing on private lands, including grazing fees, and
    subtracting the total cost of conducting business on public lands,
    excluding grazing fees.

    o 	Forage Value Index (FVI). This index is based on the weighted average
    estimate of the annual rental charge for cattle on private rangelands in
    11 western states.

    o 	Beef Cattle Price Index (BCPI). This index is based on the weighted
    average selling price for beef cattle in the 11 western states.

    o 	Prices Paid Index (PPI). This index includes select adjusted components
    from USDA's Index of Prices Paid by Farmers for Goods and Services. The
    components include items such as fuel, tractors and machinery, interest,
    and farm wage rates.

    Under both PRIA and the executive order, increases and decreases in the
    fee are limited to 25 percent per year, and under the executive order, the
    fee cannot drop below $1.35 per AUM.

    The Forest Service's fees for grazing on national grasslands and eastern
    forests differ from the fee charged in its forests in the 16 western
    states. The fee charged for grasslands uses a formula similar to the
    western grazing fee, but with a different base value that recognizes the
    different costs for managing national forests versus national grasslands.
    The fee charged for grazing in the eastern forests is based on a formula
    with a noncompetitively established base value adjusted by the current
    period's hay price index, less the value of any range improvements
    required by the agency. The 2004 fee for grasslands was $1.52 per AUM, and
    the fee for eastern forests ranged from $2.47 per AUM in Florida to $5.04
    per AUM in the northeastern states for noncompetitive permits. In
    addition, the Forest Service puts some permits up for competitive bidding
    in the eastern states.

    Appendix IV discusses the BLM and Forest Service fee and formula first
    established under PRIA in more detail, the history of the federal grazing
    fee, and the results of studies conducted over the years to recommend
    alternative approaches to charging fees.

    U.S. Fish and Wildlife In contrast to the fee charged by BLM and the
    Forest Service for grazing on Service, Reclamation, and western lands, the
    National Park Service, U.S. Fish and Wildlife Service, DOD Services
    Generally Set Reclamation, and DOD services are required or directed to
    set fees that

    reflect, or come close to, market value. The agencies do not have oneFees
    at, or Close to, Market uniform approach to setting a grazing fee: some of
    the agencies, such as the Value Air Force and National Park Service,
    charge per acre; and others, such as

    the Corps, receive a total bid price for a pasture. To achieve a fair
    market

    value, in some instances, the agencies use a competitive bidding process
    that involves notifying the public of the opportunity to permit or lease a
    grazing pasture, the acceptance of sealed bids, and the selection of the
    highest bid. In other instances, the agencies conduct a market appraisal
    of a grazing property, or use an average prevailing rate for the local
    area, and set a fee based on those values. Consequently, as the following
    discussion shows, the prices that the agencies charge vary widely, from as
    low as $0.29 per AUM to more than $112.50 per AUM.28

    National Park Service. The fees charged for grazing in fiscal year 2004
    ranged from $1.35 to $7 per AUM and $1.50 to $25 per acre. National Park
    Service guidance directs parks to charge fair market value for special
    uses such as grazing, unless otherwise directed by law. The fees charged
    in fiscal year 2004, which were set by individual parks or park units,
    included some fees set at market prices and others that were negotiated or
    fixed. The lowest fee per AUM, $1.35, was charged by several parks,
    including Black Canyon of the Gunnison National Park in Colorado and
    Capitol Reef National Park in Utah. The highest fee per AUM, $7, was
    charged by Point Reyes National Seashore, in northern California. That
    park used an independent appraisal of its lands to establish the grazing
    fees. The lowest per acre fee in fiscal year 2004, $1.50 per acre, was
    negotiated at the Buffalo National River in Arkansas. The highest per acre
    fee, $25, was charged at several parks, including Minuteman Missile
    National Historic Site in South Dakota, which set its fee based on average
    local rates, and Eisenhower National Historic Site and Gettysburg National
    Military Park in Pennsylvania, which fixed their grazing fees, also based
    on average local rates. Similarly, Blue Ridge National Parkway, in
    Virginia and North Carolina, which accounted for just over 50 percent of
    total Park Service livestock grazing permits in fiscal year 2004, charged
    a rate of $10 per acre for each of its 212 permits. The fee was
    established using values in a 2002 survey that the park's staff conducted
    of other National Park Service field offices that administer agricultural
    programs, as well as market-rate information for grazing in the vicinity
    of the parkway that the park staff gathered from county extension and
    other agricultural offices.

    U.S. Fish and Wildlife Service. The grazing fees charged in fiscal year
    2004 were, for the most part, established using market-value prices,
    including prices set by USDA's National Agricultural Statistics Service.
    Prices ranged

    28For fees that are competitive, a total amount is bid. In such cases, we
    divided that total by the amount of AUMs in the permit or lease to
    determine an equivalent fee per AUM.

    from $0.29 per AUM to $34.44 per AUM; both fees were based on competitive
    bids for grazing permits at the Sand Lake Wetland Management District in
    South Dakota, where access to small sites and forage conditions can vary
    greatly. Under U.S. Fish and Wildlife Service regulations, refuges are to
    charge a fee for the grant of privileges or products taken from refuges
    that is commensurate with fees charged for similar privately granted
    privileges or products, or with local market prices. To establish the fees
    charged in fiscal year 2004, most refuges-particularly those in western
    states-issued permits at the market rate, including the USDA rate. For
    example, the fee charged at the refuge with the largest amount of grazing,
    the Charles M. Russell National Wildlife Refuge in Montana, averaged
    $14.76 per AUM. A few refuges did not use a market value fee but instead
    negotiated the grazing fee with the permittee. For example, managers at
    the Hutton Lake National Wildlife Refuge in Wyoming negotiated a fee of
    $8.80 per AUM, based on the USDA rate, less services for fencing and
    irrigation.

    Reclamation. In fiscal year 2004, the fees charged ranged from $1.27 per
    AUM to $56.46 per AUM. Reclamation guidance directs the agency to enter
    into permits and leases using competitive means when there is likely to be
    demand from more than one party, but permits and leases may be negotiated
    when it is in the best interest of the United States or if no competition
    is present. In fiscal year 2004, while the majority of Reclamation's area
    offices set grazing fees using competitive approaches, or other approaches
    that establish a market price, some of the offices used fixed fees or
    negotiated with local ranchers to agree on a fee. For example, the Wyoming
    Area Office, which manages several projects in and around the state of
    Wyoming, used competitive bidding that opened with a minimum bid. The area
    office staff set the minimum bid using the average private lease rates in
    the state, as provided by USDA. One area office also used a discounted
    lease method, in which the office used an average private lease rate for
    the area and discounted it for factors such as multiple uses of the
    lands.29 When area offices charged fixed fees, they generally set

    29Reclamation area offices used different market-based approaches to set
    fees, including appraisals, a competitive method with a minimum bid, a
    limited method, and a discounted method. To establish market prices in
    instances in which competition is limited to ranchers that have access to
    the parcels involved, Reclamation area offices use a "limited" market
    approach to set fees, in which a permit or lease is competitively bid
    among the limited number of ranchers who have direct access to the grazing
    allotment. In those cases in which only one rancher has access to
    Reclamation land, the area offices may offer the permit or lease to the
    rancher at the minimum fee.

    them at historic levels. For example, the Lahontan Basin Area Office,
    which manages Reclamation activities in the Lahontan Basin Area in
    northern Nevada and eastern California, manages 56 grazing permits and
    leases that were inherited from local irrigation districts and charged the
    same fee in fiscal year 2004 as the irrigation offices charged in the
    past.

    DOE. In its agreement with DOE to manage on Idaho National Laboratory
    land, BLM charges its current fee for grazing on DOE lands.

    DOD. In fiscal year 2004, the Army, Corps, Air Force, and Navy, offered
    the majority of their leases as competitive bids. The bids ranged from an
    average of $0.82 to $112.50 per AUM. Under the laws and regulations for
    grazing on lands managed by the services, their lands may be leased for up
    to 5 years and payment for a lease is generally to be fair market value,
    although the payment can be made through services in-kind. The DOD
    services may accept less than fair market value under certain
    circumstances when it is determined that a public interest will be served.
    For example, Army officials recently negotiated a new 5-year lease for
    grazing at Fort Hood (in Texas) with a group of cattlemen that included
    some previous landowners. The Army determined that, although it had no
    legal obligation to continue leasing only to this group, its relationship
    with the neighboring ranchers helped to sustain its mission, meet its
    environmental stewardship responsibilities, and maintain its good
    relations with the community. In April 2005, the Army negotiated a grazing
    price that was 40 percent lower than the appraised value, pending a new
    appraisal that explicitly considered the unique military circumstances of
    grazing on the installation. The new appraisal, completed in August 2005,
    valued the lease at a price per animal unit that is 30 percent less than
    the fair market value assessed for other, similar grazing parcels to
    account for such unique military circumstances.

    See appendix V for details of federal grazing fees charged by these
    agencies.

    Private Ranchers and State Fees charged by private ranchers and state land
    agencies are higher than Land Agencies Generally Set the BLM and Forest
    Service fees because, generally, ranchers and state Fees at Market Values
    to agencies seek to generate grazing revenues by charging a price that

    represents market value for that land and/or the services provided.
    TheGenerate Revenues average fee private ranchers charged in 2004 in the
    11 western states was

    $13.30 per AUM and $13.80 per head of livestock,30 which represents market
    value, or the price that ranchers are willing to pay and receive for
    privately owned grazing lands in western states. This fee is determined
    annually through USDA surveys of private ranchers in 17 western states and
    is the average price ranchers (producers) reported as being paid in their
    area for privately owned nonirrigated grazing land. The National
    Agricultural Statistics Service calculates the average for each state, as
    well as for the 9 Great Plains states and different combinations of
    western states-11 western states, 16 western states, and 17 western
    states.31 As shown in table 9, the average private grazing fee for the
    states ranged from $8.00 per AUM in Arizona and Oklahoma to $23.00 per AUM
    in Nebraska.

    Table 9: Fees Charged by Private Ranchers and State Land Agencies in 2004

                        State land agency Average private fee Average private fee
          State           (per AUM unless          (per AUM)a         (per head)a
                                   noted)
         Arizona                    $2.23               $8.00               $9.00
        California          1.35 to 12.50               14.50               15.50
         Colorado            6.65 to 8.91               13.50               14.00
          Idaho                      5.15               12.20               12.60
          Kansas                        b               13.00               13.50
         Montana            5.48 to 80.00               15.90               16.20
         Nebraska          16.00 to 28.00               23.00               25.20
          Nevada                        b               10.60               12.00
        New Mexico      0.71 to 10.15 per                9.70               11.00
                                     acre
    North Dakota     1.73 to 19.69 per               13.00               13.50
                                     acre
         Oklahoma           7.00 to 16.00                8.00
          Oregon                     4.32               13.00               12.50
    South Dakota     3.00 to 56.00 per               17.60               19.20
                                     acre
          Texas             4.16 to 12.50               10.00

    30The National Agricultural Statistics Service gathers data and calculates
    fees per AUM and head. The price per head is used in the calculation of
    the federal grazing fee and is equivalent to the AUMs used by BLM and the
    head months used by the Forest Service. The 2004 data was used to set fees
    for 2005. Fees charged in 2003 were $12.80 per AUM and $13.40 per head.

    31Generally, there are 17 states considered to be western. BLM primarily
    manages grazing in 11 western states, and the Forest Service manages
    grazing for its forests in 16 western states, excluding Texas.

    (Continued From Previous Page)

                        State land agency Average private fee Average private fee
          State    (per AUM unless noted)          (per AUM)a         (per head)a
          Utah               1.43 or 2.35               11.80               13.10
    Washington            5.41 or 7.76               10.80               10.80
         Wyoming                     4.13               13.90               14.30

    Source: State agencies and National Agricultural Statistics Service
    (data); GAO (analysis).

    Note: The 11 western states used to calculate the BLM and Forest Service
    fee are Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico,
    Oregon, Utah, Washington, and Wyoming. The 9 Great Plains states used to
    calculate the Forest Service grassland fee are Colorado, Kansas, Nebraska,
    New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming.

    aThe National Agricultural Statistics Service gathers data on fees per AUM
    and per head. The per head fee is used in the PRIA fee and, because of the
    way that BLM and the Forest Service measure AUMs for billing purposes,
    corresponds to the fee per AUM charged by BLM and the Forest Service.

    bKansas and Nevada do not have grazing on state trust lands and therefore
    did not provide fee information.

    In fiscal year 2004, state land agencies in 15 western states charged
    grazing fees that ranged from $1.35 per AUM in California to $80 per AUM
    in Montana and $0.71 per acre in New Mexico to $56 per acre in South
    Dakota; 2 states did not charge fees because they do not have grazing on
    state trust lands. As table 9 shows, most states charged more than one
    fee: while 4 states charged a single fee for all of their state lands, 2
    states charged two fees and 9 states charged a range of fees, depending on
    market rates or based on counties or areas with variable vegetation. The
    agencies manage state trust lands to help pay for schools; the lands were
    set aside for this purpose when each state was created. Like the federal
    government, the western state agencies lease their lands for grazing,
    among other uses. According to Interior officials, unlike the federal
    government, the western state agencies have a fiduciary responsibility to
    obtain revenues from grazing fees on state trust lands to support schools
    and education systems.

    Of the 15 state agencies charging fees, 6 agencies used competitive
    methods to determine the fair market value of their lands in fiscal year
    2004; 6 used appraised prices or formulas to estimate the fair market
    value of their lands; and 3 used only formulas that do not start with a
    market price. Generally, the formulas adjusted the value of private
    grazing lands for different factors, such as the lack of fencing or water
    on state lands, or the price of beef. For example, Wyoming based its
    grazing fee on the average of private lease rates, as estimated by the
    Wyoming Agricultural Statistics Service, for the previous 5 years. The
    rate was then adjusted to account for changing resource conditions, market
    demand, and industry viability, and reduced by 20 percent to reflect
    contributions made by the lessee. (See app. VI for a discussion of the
    state fees.)

    The Purpose of the BLM and the Forest Service Fee in Western States Is Not
    to Recover Expenditures or to Charge Market Value; Different Purposes
    Would Result in Different Fees

    As we noted in our 1991 report on the BLM and Forest Service grazing fee,
    fees can vary depending on the purposes for which they are charged.32 The
    BLM and Forest Service fee is set in accordance with the policy of
    preventing economic disruption and harm to the western livestock industry.
    The primary purpose of the BLM and Forest Service fee is not to recover
    the agencies' administrative expenses. Consequently, in fiscal year 2004,
    the agencies spent $132.5 million to manage their grazing programs and
    collected $17.5 million in receipts, leaving a gap of about $115 million.
    If the purpose of the fee were to recover expenditures and if each agency
    were to charge a fee that recovered its expenditures, BLM would have had
    to charge up to $7.64 per AUM, and the Forest Service would have had to
    charge up to $12.26 per AUM in 2004, according to our analysis of the
    agencies' estimated expenditures and the number of AUMs billed (7.6
    million AUMs for BLM and 6.1 million AUMs for the Forest Service). While
    many argue that fees for grazing on federal lands should recover the
    agencies' expenditures, some grazing advocates argue that agencies'
    expenses are high and reflect inefficiencies and that the fee should not
    encourage the agencies' inefficient practices.

    The primary purpose of the BLM and Forest Service fee formula is also not
    to achieve fair market value prices. Instead, the fee was designed to
    reflect fees charged by private ranchers by including the forage value
    index, while also adjusting the value to reflect the net costs of
    conducting ranching business. It reflects net costs by including the beef
    cattle price and producer prices indexes (a measure of the change in
    income and production expenses). While initially, the base price used in
    the formula represented what Congress and economists considered fair
    market value, the adjustments included in the formula have resulted in a
    fee that has not tracked private fees.33 Consequently, while the fee
    charged by BLM and the Forest Service fluctuated up and down, it decreased
    overall by about 40 percent from $2.36 per AUM in 1980 for BLM and $2.41
    per AUM for Forest Service to $1.43 per AUM for both agencies in 2004.
    Private ranching fees

    32GAO, Rangeland Management: Current Formula Keeps Grazing Fees Low,
    GAO/RCED-91-185BR (Washington, D.C.: June 11, 1991).

    33The definition of fair market value in relation to the fee is the $1.23
    base value established in the 1966 Western Livestock Survey "added to the
    nonfee cost of operating on public grazing land so that the total cost of
    grazing on public land equals the total cost (nonfee plus private lease
    rate) of operating on comparable privately leased grazing land."
    Departments of the Interior and Agriculture, Study of Fees for Grazing
    Livestock on Federal Lands (Washington, D.C.: October 21, 1977), 4-3.

    increased by 78 percent over the same period, from $7.53 per AUM to $13.40
    per AUM.34 The federal fee increased to $1.79 per AUM in 2005. (See fig.
    2.)

    Figure 2: Grazing Fee BLM and the Forest Service Charged, 1980 to 2005

    Dollars 198019811982

    198319841985198619871988198919901991199219931994199519961997199819992000200120022003
                                          2005

                                          2004

    Year

        Source: National Agricultural Statistics Service (data); GAO (analysis).

    Notes: The fee formula is Fee = $1.23 x (FVI + BCPI - PPI)/100.

    In 1980, BLM and the Forest Service charged $2.36 per AUM and $2.41 per
    AUM, respectively, or on average, $2.38 per AUM. Prior to 1981, the
    agencies charged different fees for grazing-in 1979, they charged $1.89
    per AUM and $1.93 per AUM, respectively. In 1980, the agencies used the
    PRIA formula to calculate their fees, but the formula produced a fee of
    $2.77, and PRIA limited the annual increase in the fee to 25 percent. The
    different fees charged in 1980 were a result of the agencies applying the
    25 percent increase to their 1979 fees.

    If the primary purpose of the formula were to produce a fee equal to
    market value, the fee would likely not be the same as that charged on
    private or state lands for two key reasons. First, because BLM and Forest
    Service permits and leases are not bid competitively, the fees associated
    with those permits and leases are not set in the market. In lieu of a
    market for BLM

    34The fee figures are presented in nominal dollars.

    and Forest Service grazing, the agencies could estimate the value of their
    lands based on comparable properties. However, it is generally recognized
    that private lands, which are leased at market prices, are not often
    comparable to public lands because the private lands have better forage
    and sources of water. The quality of forage and availability of water on
    state lands are considered more comparable to that on federal lands
    because the federal government granted some of its lands to various states
    when they entered the Union.35 In addition to differences in the quality
    of soil, forage, and water resources, private grazing fees differ from
    fees for public lands because private landowners often provide services
    that are not provided on BLM and Forest Service lands. For example,
    private landowners may provide daily livestock care-watering, fencing,
    feeding, and veterinary care-as well as maintaining fences, corrals, and
    water tanks. In addition, lessees of private land can themselves lease the
    land to other users, such as hunters, and generate revenue. Moreover,
    public access to private lands is limited, whereas access to federal land
    is generally not limited. State agencies also limit access to their lands,
    a factor that makes their lands less comparable to BLM and Forest Service
    lands for purposes of setting fees.

    Second, market values are difficult to use for BLM and Forest Service
    permits and leases because the prices ranchers have paid for their private
    ranches often include the capitalized value of any associated federal
    grazing permits and leases-called "permit value"-and advocates state that
    ranchers have paid full market value for the grazing permits and leases,
    albeit not in the form of a payment to the government.36 Although Interior
    and USDA do not recognize grazing permits and leases issued by BLM and the
    Forest Service as a legal property right, the real estate market realizes
    the value of holding these permits and leases. As a result, it is
    generally recognized that while the federal government does not receive a

    35Originally, with the Land Ordinance, the number 16 lot of every township
    was reserved for that township. In 1848, the act establishing Oregon gave
    states in the Northwest territory sections 16 and 36 in each township. In
    1894, Utah, followed in 1910 by Arizona and New Mexico, entered the nation
    with two additional sections reserved in each township, sections 2 and 32.

    36Some believe that the existence of permit value indicates that the fee
    does not capture the full value of federal forage. However, recent
    research has shown that the value of permits may be capturing other values
    than the income earning potential of land. That is, despite the fact that
    ranchers assert that they are paying equal or higher total grazing costs
    on public versus private lands, they have been willing to pay an
    additional premium to buy permits to graze on public lands, indicating
    nonprofit motives such as quality of life, as reasons for ranch ownership.

    market price for its permits and leases, ranchers have paid a market price
    for their federal permits or leases-by paying (1) grazing fees; (2) nonfee
    grazing costs, including the costs of operating on federal lands, such as
    protecting threatened and endangered species (i.e., limiting grazing area
    or time); and (3) the capitalized permit value. Should the BLM and Forest
    Service charge a grazing fee that reflects market values, the ranchers'
    investments could be reduced accordingly, which complicates the use of the
    market value of the permits and leases.

    Because of these difficulties in estimating and using market value, some
    grazing experts have suggested establishing a competitive bidding process
    for federal permits and leases, as has been done for the McGregor Range,
    an Air Force bombing range. BLM manages grazing on this range using
    competitive bidding to set prices. In 2004, BLM received fees ranging from
    $5.00 to $14.50 per AUM for several leases that it offered at auction.
    (See app. V for more details.) Experts acknowledge, however, that
    significant changes to the current grazing system would be needed to allow
    competition, with uncertain results. In particular, range experts and
    agency officials point out a potential increase in administrative
    activities and expenditures for items such as changing operators, start-up
    time, and law enforcement that could occur with greater BLM and Forest
    Service involvement in competitive bidding. In addition, some change in
    the preference system on BLM and Forest Service lands might need to occur
    to allow competitive bidding. However, some states have implemented a form
    of competitive bidding while retaining preference. For example, New Mexico
    allows ranchers with preference to meet the best offer that results from
    competing the lease. Finally, range experts and agency officials point out
    that the effect of competitive bidding on grazing receipts collected
    could, in fact, reduce receipts because some allotments could be less
    competitive than others, given their location and quality of resources.
    Others stated that increased competition could reduce the economic
    opportunities for some smaller permittees and lessees.

    Concluding	It is difficult to identify the full cost of grazing on federal
    lands. Many federal agencies have their own grazing programs, but other
    agencies

    Observations	support grazing in carrying out their responsibilities.
    Nevertheless, an analysis of federal expenditures and receipts provided by
    the agencies demonstrates that BLM and the Forest Service are spending
    much more on grazing than they are generating in receipts. Moreover, the
    existence of permit value indicates that while ranchers may have paid full
    value for grazing privileges, the agencies have not captured these
    payments in their

    grazing fee. These shortfalls reflect legislative and executive branch
    policies to support local economies and ranching communities by keeping
    grazing fees low. BLM and the Forest Service are charging a fee that
    supports this purpose.

    The current fee for livestock grazing has not been changed significantly
    since it was first established a quarter century ago, largely because of
    controversy over the purpose of the fee and the role of grazing in
    contributing to ranching economies and communities and in degrading
    rangeland ecosystems. Although a budgetary analysis such as the one we
    conducted does not consider economic, environmental, or societal costs and
    benefits, it does demonstrate the need to periodically reexamine programs
    to assess their relevance and relative priority for a changing society,
    including how much of the program's financing should be paid for by those
    who benefit most directly. Taking a hard look at existing programs and
    carefully considering their goals and their financing is a challenging
    task. However, faced with a growing and unsustainable fiscal imbalance,
    the government cannot accept all of its existing programs, policies, and
    activities as "givens." Now, as in the 1990s, tightened federal budgets
    and a persistent federal deficit create the need to examine federal
    programs that spend more funds than they generate in receipts and to
    determine whether the purposes of these programs warrant increasing user
    fees.

    Although other federal agencies' grazing programs are much smaller than
    BLM's and the Forest Service's, they demonstrate the application of
    competitive and market-based approaches to charging user fees for grazing
    programs and recovering some program expenditures. Depending on the
    approach taken to set and implement a grazing fee for lands managed by BLM
    and the Forest Service, the federal government could close the gap that
    exists between those programs' grazing expenditures and receipts. But any
    change in the current fee may necessitate that Congress reconsider the
    purpose of the fee and policy trade-offs of different fees. In addition,
    an evaluation of the difficulties of implementing the chosen fee would
    need to be conducted in order to understand the consequences for the
    agencies' programs and expenditures and to deal fairly with such issues as
    preference and permit value.

    Agency Comments	We provided USDA, Commerce, DOD, DOE, Interior, and
    Justice with a draft of this report for review and comment. Interior and
    the Forest Service provided written comments (see apps. VII and VIII). DOD
    did not provide official written comments, but the Air Force and Army
    provided technical

    comments, which we incorporated as appropriate. DOE also did not provide
    official written comments but provided technical comments, which we
    incorporated as appropriate. Commerce and Justice did not have comments on
    the draft report.

    In its comments, Interior did not agree nor disagree with the findings in
    the report. In general, the department stated that the report accurately
    recognizes that differences in resource conditions and legal requirements
    can cause variations in livestock grazing fees and pointed out the
    difficulty in capturing the costs of grazing programs. However, Interior
    stated that the report did not sufficiently discuss significant indirect
    benefits from grazing to other BLM programs that are difficult to
    quantify. We do not agree with this point. We believe that the report
    presents the facts about BLM's grazing program as described in many
    different documents BLM provided to us and as discussed in multiple
    meetings. Interior also provided several specific comments clarifying the
    text of the report. These comments and our response can be found in
    appendix VII. In addition to its comments on BLM's grazing program, the
    department enclosed technical comments on the U.S. Fish and Wildlife
    Service and Reclamation programs, which we incorporated as appropriate.

    The Forest Service provided coordinated comments for USDA. The Forest
    Service neither agreed nor disagreed with the findings in the report. The
    agency stated that the report accurately recognizes that the Forest
    Service fee is set in accordance with an executive order that maintains
    the fee formula established in FLPMA, as amended by PRIA. Further, it
    stated that the report accurately recognizes that the fee is not related
    to the cost of Forest Service administration of the grazing program. In
    addition to these comments, the Farm Services Agency and the National
    Agricultural Statistics Service within USDA provided technical comments,
    which we included as appropriate.

    As agreed with your offices, unless you publicly announce the contents of
    this report earlier, we plan no further distribution of this report until
    30 days from the date of this letter. At that time, we will send copies of
    this report to interested congressional committees; the Secretaries of
    Agriculture, Commerce, Defense, Energy, and the Interior; the Attorney
    General of the United States; the Administrator of the Environmental
    Protection Agency; the Director of the Office of Management and Budget;

    the directors of the 17 state land agencies; and other interested parties.
    We will also make copies available to others upon request. In addition,
    the report will be available at no charge on the GAO Web site at
    http://www.gao.gov.

    If you or your staff have any questions, please contact me at (202)
    512-3841 or nazzaror@gao.gov. Contact points for our Offices of Public
    Affairs and Congressional Relations may be found on the last page of this
    report. GAO staff who made major contributions to this report are listed
    in appendix IX.

    Robin M. Nazzaro Director, Natural Resources and Environment

    List of Requesters

    The Honorable Nick Rahall Ranking Minority Member Committee on Resources
    House of Representatives

    The Honorable Earl Blumenauer House of Representatives

    The Honorable Raul Grijalva House of Representatives

    The Honorable Rush Holt House of Representatives

    The Honorable Jim McDermott House of Representatives

    The Honorable Christopher Shays House of Representatives

    Appendix I

                           Objectives, Scope, and Methodology

    We provided information on the (1) extent of livestock grazing on, and
    program purposes for, land managed by 10 federal agencies; (2) amount
    spent in fiscal year 2004 by these agencies and other federal agencies
    that have grazing-related activities, to manage livestock grazing on
    public lands; (3) total receipts collected for grazing privileges by the
    10 federal agencies with grazing programs and the amounts disbursed to
    counties, states, or the federal government; and (4) grazing fees charged
    by the 10 federal agencies, western states, and private ranchers, and the
    reasons for any differences among the fees.

    We performed the majority of our work at the 10 federal agencies that have
    programs to allow private ranchers to graze livestock on portions of the
    land they manage. These agencies were the Department of the Interior's
    (Interior) Bureau of Land Management (BLM), National Park Service, U.S.
    Fish and Wildlife Service, and Bureau of Reclamation (Reclamation); the
    U.S. Department of Agriculture's (USDA) Forest Service; the Department of
    Defense's (DOD) Army, Army Corps of Engineers (Corps), Air Force and Navy;
    and the Department of Energy (DOE). We also performed work at other
    federal agencies that have grazing-related activities. These agencies are
    Interior's U.S. Geological Survey (USGS) and Solicitor's Office; USDA's
    Agricultural Research Service; Animal and Plant Health Inspection Service,
    Cooperative State Research, Education and Extension Service, Farm Service
    Agency, National Agricultural Statistics Service, Risk Management Agency,
    Natural Resources Conservation Service, and Office of General Counsel; the
    Environmental Protection Agency; the Department of Commerce's National
    Marine Fisheries Service; and the Department of Justice.

    To determine the purposes of livestock grazing programs managed by the 10
    federal agencies, we reviewed authorizing legislation and agency policies
    and regulations, and we interviewed agency headquarters and field office
    officials. Through our review of legislation, policies, and regulations,
    we determined that we would not include Alaska in our analysis because it
    is treated differently under grazing law. We identified field offices to
    visit with the goal of visiting as many agencies as possible in an
    efficient manner. We visited at least one field office for every agency
    except for the Corps, Navy, and DOE. We visited BLM field offices in
    Medford, Oregon, and Las Cruces, New Mexico; a Forest Service office in
    Santa Fe, New Mexico; the National Park Service's Dinosaur National
    Monument in Colorado and Utah; U.S. Fish and Wildlife Service's Klamath
    Basin Wildlife Refuge Complex in northern California and southern Oregon;
    Reclamation's Albuquerque Area Office in New Mexico; Cannon Air Force

    Appendix I
    Objectives, Scope, and Methodology

    Base in Clovis, New Mexico; and Fort Hood Army Installation in Killeen,
    Texas.

    To determine the extent of grazing on land managed by the agencies, we
    obtained agency data for 2004 on acres and animal unit months (AUM). BLM
    maintains a centralized Rangeland Administration System that formally
    tracks and reports acres and AUMs on its lands as well as on other
    agencies' lands (e.g., DOE's Idaho National Laboratory and various
    Reclamation locations) where it manages grazing activity on behalf of
    these agencies. The Forest Service uses an information system, called
    INFRA, to centrally track and formally report acres, head months, and
    AUMs. To determine if the AUM and acreage data produced by BLM's Rangeland
    Administration System and Forest Service's INFRA system were sufficiently
    reliable for use in this report, we interviewed system managers about the
    processes used to manage the data in the systems and conducted a
    "walk-through" of the system with these managers. In addition, we tested
    the completeness and accuracy of a selection of AUM and acreage data using
    fiscal year 2004 system reports at the BLM field and Forest Service
    offices. We asked field office officials to provide us their 2004 report
    that specifically showed, by permit or lease, the number of AUMs
    authorized and billed and the fee charged. We reviewed all the files at
    agencies with smaller grazing programs-those with up to 25 permits or
    leases at an office-and selected 10 percent of files at the two agencies
    that had large grazing programs-250 and 500 allotment files per office. We
    then verified that the data in the systems were the same as data in the
    files by tracing the data through actual permit and lease documents,
    bills, and receipts showing that payment had been submitted. We
    determined-based on these reviews and, if necessary, follow-up interviews
    with local managers- that the data reported were reliable for purposes of
    this report.

    Unlike BLM and the Forest Service, the National Park Service, U.S. Fish
    and Wildlife Service, Reclamation, and DOD do not have similar management
    information systems that formally track and centrally report acres and AUM
    data on specific livestock grazing activities. For these agencies, we
    collaborated with agency headquarters and field office officials to design
    and test a data collection instrument tailored for each agency, which we
    sent to field offices. To design and test the data collection instruments,
    we visited several agencies' field offices and followed the same process
    we used at BLM and the Forest Service to sample files, review relevant
    documents, track AUM data, and interview local officials to verify the
    completeness and accuracy of data that they could submit to us. We
    performed this work at the Dinosaur National Monument, Klamath

    Appendix I
    Objectives, Scope, and Methodology

    Basin Wildlife Refuge Complex, Reclamation's Albuquerque Area Office,
    Cannon Air Force Base, and Fort Hood Army Installation. To help ensure the
    reliability of the data we received from the agencies, we reviewed the
    data to determine whether they were complete and accurate. When we found
    data that were missing or appeared to be inaccurate, we called appropriate
    agency officials to discuss, and if necessary, correct the data. Based on
    these reviews and appropriate follow-up interviews, we determined that the
    data reported were sufficiently reliable for purposes of this report.

    To determine the expenditures the 10 federal agencies incurred in fiscal
    year 2004 to manage specific livestock grazing on federal lands they
    manage, total receipts collected for grazing privileges by these agencies,
    and the amounts disbursed to counties, states, or the federal government,
    we obtained agency expenditure, receipt, and disbursement data for fiscal
    year 2004. BLM maintains an Activity Based Costing System that centrally
    tracks and formally reports expenditures on livestock grazing activities,
    the receipts that grazing generates, and amounts disbursed. BLM officials
    used this system to identify the amount of direct and indirect
    expenditures the agency incurred for livestock grazing activities. The
    Forest Service does not have a cost-accounting system, but rather reports
    expenditures for items in its budget, called budget line items. The agency
    used expenditure reports for these line items, in addition to its WorkPlan
    system (which shows the forests' intended work plans at the beginning of a
    fiscal year) to estimate the amount of expenditures on grazing activities
    in fiscal year 2004. The Forest Service direct expenditures include
    expenditures from the Forest Service grazing line item, expenditures from
    its watershed and vegetation line item, and estimated expenditures from
    its General Management and other cost pools. Because the watershed and
    vegetation line item can be spent for all programs and not just the
    grazing program, the Forest Service allocated a portion of these
    expenditures-11 percent- using WorkPlan, which is a tool for planning and
    budgeting program work at the forest level. The Forest Service uses six
    cost pools to allocate indirect activities and expenditures: General
    Management, Public Communications, Ongoing Business Services, Common
    Services, Office of Worker's Compensation, and Unemployment Compensation
    Insurance. The General Management pool and some of the activities in the
    Common Services pool are considered direct or support costs, rather than
    indirect costs. These are included as direct expenditures. To estimate
    expenditures from its General Management and other cost pools, the agency
    attributed a share of the expenditures related to the amount of grazing
    and related watershed and vegetation funds that were put into the fund for
    the fiscal

    Appendix I
    Objectives, Scope, and Methodology

    year. We did not validate the data provided by the agencies' or test their
    financial management and accounting systems. We did contact USDA's and
    Interior's Office of Inspector General and representatives of KPMG, a
    private contractor that annually audits the agencies' financial
    statements, to determine if there was any reason we could not use
    expenditure data in this report. There were none. In addition, we reviewed
    the agencies' internal controls over grazing receipts through our testing
    of the agencies' grazing files and AUM data.

    Unlike BLM and the Forest Service, the National Park Service, U.S. Fish
    and Wildlife Service, Reclamation, and DOD services do not all formally
    track and centrally report specific livestock grazing expenditures,
    receipts, and disbursements. Using the same data collection instrument
    described above to obtain acres and AUM data from these agencies' field
    units, we also requested their estimates of expenditures and receipts. In
    addition, we asked headquarters officials to query their financial
    management and accounting systems in an effort to extract specific receipt
    and disbursement data related to livestock grazing activities. When
    necessary, we conducted follow-up interviews with agency headquarters and
    field office officials to ensure that the data were reliable enough for
    use in this report. We did not validate these financial management and
    accounting systems.

    To identify livestock grazing expenditures that other federal agencies may
    incur to support livestock grazing, we first developed a list of agencies
    and activities that are conducted that are related to grazing on public
    lands. To develop this list, we reviewed reports about livestock grazing
    on public lands, interviewed BLM and Forest Service officials, and
    interviewed experts at the Society for Range Management,1 as well as the
    author of a recent study on the costs of the federal grazing program.2 We
    then contacted the agencies to confirm that the activities they conduct
    are related to grazing and are conducted on public lands; if the agencies
    conducted activities that support grazing on public lands, we then
    requested estimated expenditures for fiscal year 2004. To that end, we

    1The Society for Range Management is an association of range management
    specialists that represents nearly 4,000 members. Its mission is to
    promote and enhance the stewardship of rangeland ecosystems and renewable
    range resources, with an aim to meet human needs through scientific
    research and policy.

    2Karyn Moskowitz and Chuck Romaniello, Assessing the Full Cost of the
    Federal Grazing Program (Tucson, Arizona: October 2002).

    Appendix I
    Objectives, Scope, and Methodology

    contacted officials at USGS; USDA's Agricultural Research Service, Animal
    and Plant Health Inspection Service, Cooperative State Research,
    Education, and Extension Service, Farm Service Agency, National
    Agricultural Statistics Service, Natural Resources Conservation Service,
    and Risk Management Agency; and the Environmental Protection Agency. We
    asked these officials to estimate, if possible, the expenditures they
    incur in support of livestock grazing activities. To determine agency
    expenditures on consultations for threatened and endangered species, we
    requested the data from the two agencies involved, the U.S. Fish and
    Wildlife Service and the National Marine Fisheries Service. To determine
    agency expenditures for litigation related to livestock grazing we
    contacted the Department of Justice, Interior's Office of the Solicitor,
    and USDA's Office of General Counsel. Their representatives estimated the
    cost of their time devoted to livestock grazing cases in fiscal year 2004
    and identified that no payments were made for attorney fees in the same
    period. The National Park Service, U.S. Fish and Wildlife Service,
    Reclamation, and DOD services reported that they were not involved in any
    litigation related to livestock grazing in fiscal year 2004.

    To determine the fees charged in 2004 by the 10 federal agencies, western
    states, and private ranchers and the reasons for any differences among the
    fees, we relied on several different sources. For the fees charged by BLM
    and the Forest Service, we contacted BLM and Forest Service officials, who
    provided us with 2004 fee and an explanation of the formula used to
    calculate the fee. We also discussed the formula and its components with
    the staff of the National Agricultural Statistics Service. We also
    reviewed historical studies of the formula and fees resulting from the
    formula. We gathered National Park Service, U.S. Fish and Wildlife
    Service, Reclamation, and DOD service fees using the data collection
    instrument described above and also gathered information on the methods
    used to establish the fees. For agencies that provided fee data as a
    per-acre price, we converted the fees to a per-AUM price by totaling the
    receipts and any offsets to receipts and dividing the total by the number
    of AUMs approved for use on that land. We reviewed agencies' discussion of
    their user fees in their Chief Financial Officers' Annual Reports, but we
    did not review the agencies' compliance with the Independent Offices
    Appropriation Act or OMB Circular A-25, which lay out conditions under
    which user fees can be charged.

    To determine the fees that the 17 western states charged ranchers in 2004
    to graze on their state lands, and the basis for their fees, we conducted
    telephone interviews of program officials in the 17 states using a

    Appendix I
    Objectives, Scope, and Methodology

    semistructured interview format. To determine the fees private ranchers
    charged in 2004 to graze on their private lands, we used the results
    reported by USDA's National Agricultural Statistics Service, which
    conducts a survey of, among other things, fees charged by private ranchers
    for livestock grazing on their private lands in the 17 western states. The
    agency's staff calculates average fees for each state and the average fees
    charged in different groups of Great Plains and western states: 9 Great
    Plains states, 11 western states, 16 western states, and 17 western
    states. We also interviewed the National Agricultural Statistics Service
    officials about the agency's survey methodology for gathering data on
    private grazing leases and the calculation of the BLM and Forest Service
    fee components.

    To identify additional factors that should be considered in evaluating
    federal grazing expenditures and fees, we conducted an extensive search of
    studies that go beyond a limited federal budgetary analysis of livestock
    grazing activities and attempted to identify social, environmental, and
    other economic costs and benefits that both advocates and opponents of
    grazing use to make their respective arguments. We also interviewed
    experts at New Mexico State University, Oregon State University, Colorado
    State University, and University of Montana who have conducted relevant
    research to obtain their views of these various livestock grazing issues,
    as well as issues related to fees.

    We conducted our work between August 2004 and July 2005 in accordance with
    generally accepted government auditing standards.

    Appendix II

    Additional Factors in Evaluating Federal Grazing Expenditures and Revenues

    To place the budgetary evaluation presented in this report in a larger
    context, this appendix briefly discusses conflicting views on key effects
    of federal lands grazing: local economic development, rural community and
    quality of life values, and rangeland ecosystems and management. The
    purpose of the appendix is to present the conflicting views on
    grazingrelated issues and as such we did not verify the accuracy of the
    positions and statements presented by advocates and opponents of grazing.
    A comprehensive analysis of the effects should quantify and capture not
    only the budgetary expenditures and receipts discussed in this report but
    also the impact on regional and local economic development and the
    economic costs and benefits-which are often unquantified-to society.
    However, a comprehensive evaluation is not yet possible because, despite
    years of extensive research and evaluation, the exact nature of many of
    these effects is still unknown, unresolved, or unquantifiable. For
    example, opponents of grazing believe that grazing diminishes ecosystem
    values by reducing biodiversity and disrupting wildlife habitats, the lost
    value of which is borne by the nation and future generations and which the
    federal budget and agencies' budgets cannot entirely capture.1 On the
    other hand, advocates of grazing believe that the government and the
    public benefit from livestock grazing because it reduces the federal
    government's cost for land management and contributes to preserving open
    space, both values that the federal budget does not capture.

    Implications of Grazing for Local Economic Development

    According to grazing advocates, ranching on federal land is critical to
    local economies, particularly in the western states, and many small towns
    across the West that depend on local ranchers' business would not survive
    without federal grazing. In these localities, many ranchers who rely on
    public lands could be driven out of ranching because, without access to
    public lands, their ranches would not be economically viable. In addition,
    studies have shown that grazing is beneficial to rural economies because
    it provides them with a more diverse economic base in conjunction with
    other compatible land uses, such as recreational activities.2 Advocates
    also note

    1To the extent that an agency's budget allocates funds for monitoring,
    planning, and protecting the resources, these costs are reflected in their
    budgets. However, when the level of funds and activities are not
    sufficient to restore the resources, the damages remain a cost to the
    society.

    2David T. Taylor, James G. Thompson, and Tim Darden, "Rural Communities
    and the Changing Rangeland Users," in Current Issues in Rangeland
    Resources Economics (Salt Lake City, Utah: Utah Agricultural Experiment
    Station and Utah State University, 2004).

                                      Appendix II
                        Additional Factors in Evaluating Federal
                           Grazing Expenditures and Revenues

    that while some economic studies indicate that grazing on federal land is
    of minimal economic importance, these studies only consider grazing's
    dependence on public forage on an average annual basis and not on a
    seasonal basis. They point out that ranchers rely on forage from federal
    lands during certain parts of the year, particularly during the summer and
    fall grazing season, and that ranchers' dependence on federal lands
    becomes quite important when only the grazing season is taken into
    account.

    In contrast, opponents point to studies showing that, for many of the
    western states, federal lands provide only a small percentage of the total
    forage needed to support ranchers' herds and do not contribute
    significantly to local economic production and income. For example, one
    study that examined the reliance of ranchers on federal land in 11 western
    states showed that only $1 of every $2,500 of income (0.04 percent) earned
    in those states is directly associated with grazing on federal lands.3
    This minimal contribution also holds steady in more grazing-dependent
    counties, according to this study. Out of 102 such counties analyzed, only
    11 were found to have more than 1 percent of total income associated with
    grazing on public lands.

    Implications of Grazing on Quality of Rural Communities and Rancher's Life

    The budgetary evaluation of grazing on public lands does not reflect the
    contribution of grazing to the quality of life in rural communities as
    well as the contribution to individual ranchers' quality of life.
    Advocates point to the value of preserving the tradition and culture of
    rural ranching communities as an important contribution of grazing. These
    advocates believe that because federal land grazing at current rates
    provides the support ranchers need to stay in business, grazing prevents a
    growing trend toward urbanization and sprawl in rural areas. The
    development of ranch lands reduces the availability of open space for
    scenic pleasure and recreational opportunities, reduces wildlife habitat,
    and increases the infrastructure and tax burden on nearby communities.
    Further, federal managers point out that their support of ranchers and
    rural communities maintains a buffer around federal lands-for example,
    military lands- preventing development along these boundaries.

    3Thomas M. Power, "Taking Stock of Public Lands Grazing: An Economic
    Analysis," in Welfare Ranching: The Subsidized Destruction of the American
    West (Washington, D.C.: Island Press, 2002).

    Appendix II
    Additional Factors in Evaluating Federal
    Grazing Expenditures and Revenues

    Similarly, grazing advocates point out the importance of grazing to the
    quality of life for individual ranchers, which is another factor not
    captured by a budgetary analysis. Studies have documented the importance
    of quality of life (consumptive value) in ranchers' decisions to purchase
    or remain in business despite economic pressures. These studies have
    compared the future earning potential of the land from ranching with the
    market values for ranches in many rural communities and found that
    ranchers have been willing to accept rates of return on their investment
    that are below market value, which indicates that the desire to own a
    ranch is not motivated entirely by profit, but also by the less tangible
    benefit on the quality of life that the rural lifestyle offers.4

    While the contribution of ranching to the quality of life and well being
    of a segment of society is widely recognized, grazing opponents question
    the role of the government in protecting ranchers' social or economic way
    of life at a cost to all taxpayers. In the opponents' view, preserving the
    heritage of "western cowboys" by allowing them the use of public lands is
    a subsidy to the livestock industry. The opponents question the use of
    continuing subsidies, rather than a functioning free market, and question
    the choice of subsidizing one lifestyle or chosen profession over another-
    for example, teachers.

    Opponents also disagree with the argument that grazing subsidies are
    essential to preserving open spaces and stopping development. They point
    out that many factors, such as an individual rancher's wealth and
    commitment to ranching as a way of life, will ultimately influence the
    decision to continue ranching. Population growth and demand for housing
    will widen the disparity in land values between grazing and development
    and put some ranchers-especially those facing financial pressures-in a
    position to sell. However, opponents note that the replacement of cows
    with condominiums is not a foregone result of changes in grazing policy.
    Subdividing and developing ranch land is primarily driven by market
    conditions-demand-for the land, and market conditions for subdividing the
    ranch lands is far from uniform across the West. For example, it would not
    be economically feasible to develop lands in some remote areas of the
    West. However, acknowledging the reality of development of the ranch

    4Studies have also shown that despite equal or higher total grazing costs
    on public versus private lands ranchers have been willing to pay an
    additional premium to buy permits to graze on public lands that supports
    the quality of life and nonprofit motives for ranch ownership.

                                      Appendix II
                        Additional Factors in Evaluating Federal
                           Grazing Expenditures and Revenues

    lands in some geographic areas, opponents believe that subsidized grazing
    on public lands is neither an efficient nor an effective means of
    preserving open spaces. They recommend other tools, such as zoning
    regulations or land purchases through conservation trusts, to more
    effectively protect the land from urban sprawl and development.

    Implications of Grazing for Rangeland Ecosystems and Management

    According to grazing advocates, ranchers are the principal managers of
    federal land, and if they cease operation, federal agencies would have to
    pay others to manage these lands, thereby raising budgetary costs to the
    government. By grazing the land, ranchers help to maintain rangeland
    ecosystems-particularly those east of the Rocky Mountains-that developed
    historically and naturally with herbivory by wild animals such as buffalo,
    antelope, deer, and elk. According to advocates, grazing also helps to
    manage weeds, including invasive plant species, and control fires by
    preventing excessive biomass buildup or by reducing the intensity of fires
    that do start-expenses that would otherwise shift to federal agencies. For
    example, advocates maintain that sheep grazing reduces the need to use
    herbicides on the range because the sheep eat noxious plants that other
    animals avoid.5 Advocates also contend that ranchers provide a valuable
    service to federal agencies by reporting problems on public lands, such as
    fires and illegal activities, and assisting in search-and-rescue
    operations.

    Furthermore, grazing advocates assert that modern rangeland management
    facilitates the maintenance and health of the land because ranchers
    understand the science behind ranching and make decisions that preserve
    and improve the health of the rangeland, including wildlife habitat.6 In
    general, they point to the increased number of wildlife and game animals
    in recent years on the lands with ranch and water developments. For
    example, one study has shown that biodiversity for vegetation and animals
    is higher on rangelands managed for grazing than on small ranches.7 They

    5See for example "Sheep and the Environment: The Facts on Sheep Ecology,"
    prepared by American Sheep Industry Association, 2005.

    6See for example, "Cattle and Beef Handbook: Environment," National
    Cattlemen's Beef Association; www.beef.org/ncbenviroment.aspx.

    7The study is based on a random survey of land outside urban areas and
    represents the rural land-use gradient, including preserves, ranches, and
    low-density development. Jeremy D. Maestas, Richard L. Knight, and Wendell
    C. Gilgert, "Biodiversity Across a Rural Land-Use Gradient," Conservation
    Biology, Vol. 17, No. 5 (October 2003).

    Appendix II
    Additional Factors in Evaluating Federal
    Grazing Expenditures and Revenues

    say that water improvements made by ranchers are the reason behind
    enhanced wildlife habitat and numbers and contribute to lower maintenance
    costs by the agencies.8

    To the contrary, grazing opponents argue that grazing has contributed to,
    and increased the amount of, the federal government's land management
    costs. For example, they note, by eliminating grass and low-lying
    vegetation in ponderosa pine forests, grazing has contributed to increased
    density of conifer trees and shrubs and made these forests more prone to
    large, intense fires that are costly to fight. Grazing opponents also note
    that grazing contributes to the spread of invasive species, thereby
    increasing agencies' costs for managing their rangelands. For example,
    opponents state that livestock transport seeds; weaken and remove native
    plants, such as grasses; disturb the soil; and help invasive species to
    take hold and grow.

    Grazing opponents also note that grazing in general and overgrazing in
    particular, have harmed plants and wildlife on federal lands by exposing
    soils to erosion, disrupting normal wildlife behavior, and reducing
    biodiversity. For example, an environmental group states that grazing has
    contributed to the listing of 22 percent of federal threatened and
    endangered species.9 Furthermore, livestock can be detrimental to native
    wildlife because they can transmit diseases, compete for food, disrupt
    normal behavior patterns, or damage habitat.10 For example, because some
    invasive plants can better tolerate intensive grazing than most native
    plants, they can prosper and drive out other native plants. The U.S. Fish
    and Wildlife Service has argued that grazing can cause habitat degradation
    and disrupt normal behavior patterns of wildlife such as breeding,
    feeding,

    8Interview with Sam Albrecht, Executive Vice President, Society for Range
    Management, et al., Lakewood, Colorado, September 2004.

    9See for example www.sierraclub.org/grazing, based on the work by D.S.
    Wilcove, D. Rothstein, J. Dubow, A. Phillips, E. Losos, "Quantifying
    Threats to Imperiled Species in the United States," BioScience, Vol. 48,
    No. 8 (August 1998).

    10In general, an economically efficient mix of uses requires adjusting the
    size and mixture of livestock and wildlife relative to the values these
    different animals provide. In one article comparing value of forage on
    public lands for wildlife and livestock uses, the authors concluded that
    the marginal value of forage for deer and elk is competitive with the
    forage value for cattle ranching in Challis, Idaho area. John Loomis,
    Dennis Donnelly, and Cindy Sorg-Swanson, "Comparing the Economic Value of
    Forage on Public Lands for Wildlife and Livestock," Journal of Range
    Management, Vol. 42, No. 2 (March 1989).

    Appendix II
    Additional Factors in Evaluating Federal
    Grazing Expenditures and Revenues

    or sheltering.11 For example, livestock management practices, such as
    fencing rangelands, can create obstacles for many native wildlife species,
    limiting their movement in search of food and shelter. Similarly,
    livestock protection has played a large role in eliminating native
    predators, which are often killed by private ranchers or federal agencies
    to protect the livestock. Finally, the opponents note that livestock
    grazing is also a threat to water quality when, for example, the livestock
    trample stream banks, causing them to erode and increase sedimentation or
    spread infectious water-borne diseases to water supplies.12

    11See, e.g., Arizona Cattle Growers Assn. v. Fish and Wildlife Service,
    273 F. 3d 1229 (2001) (The court found that the record did not support the
    FWS claims in this particular case.) But see, e.g., Palila v. Hawaii Dept
    of Land and Natural Resources, 852 F.2d 1106, (9th. Cir. 1988) (sheep
    grazing constituted a "taking" of palila birds under the Endangered
    Species Act, since although sheep do not destroy full-grown mamane trees,
    they do destroy mamane seedlings, which will grow to full-grown trees, on
    which the palila feeds and nests).

    12Lynn Jacobs, Waste of the West: Public Lands Ranching (Tucson, Arizona:
    1991).

    Appendix III

    Detailed Grazing Data for Bureau of Land Management and the Forest Service

    This appendix provides detailed information on grazing permits and leases
    on lands managed by BLM and the Forest Service. The first section of this
    appendix provides information on acres available for grazing on lands the
    agencies manage, the AUMs approved for grazing, and the AUMs billed in
    fiscal year 2004 for BLM and grazing year 2004 for the Forest Service. The
    second section categorizes BLM and Forest Service permits and leases by
    size.

    Acres and AUMs of Grazing

    This section provides a snapshot of the grazing that occurred on BLM and
    Forest Service lands in 2004. The acres of BLM and Forest Service land
    available for grazing each year can change, depending on the results of
    environmental assessments conducted on grazing allotments; and the amount
    of grazing that is allowed each year can change, depending on annual
    assessments of forage and range conditions. Both agencies measure the
    number of acres of their lands available for grazing by allotment each
    year, but the two agencies use different terms to measure the amount of
    grazing. BLM calls this amount "active" or "authorized," and the Forest
    Service calls this amount "permitted." Similarly, BLM refers to the amount
    of grazing that it bills for annually-which can vary from the amount it
    authorizes because of range or climate conditions-as "billed," and the
    Forest Service refers to this amount of grazing as "authorized." We use
    the term "AUMs Approved" to refer to the amounts of grazing authorized by
    BLM and permitted by the Forest Service and "AUMs Billed" to refer to the
    amount of grazing for which BLM billed ranchers and the amount of grazing
    authorized each year on Forest Service lands. Table 10 shows the acres,
    AUMs approved, and AUMs grazed for BLM's field offices in fiscal year
    2004.

    Appendix III Detailed Grazing Data for Bureau of Land Management and the Forest
                                        Service

    Table 10: BLM Data on Acres and AUMs, by Field Office for Fiscal Year 2004 State
                            Acres AUMs approved AUMs billed

    Arizona California

           Arizona Strip               2,250,219     179,463               76,785
              Kingman                  1,959,713     141,983               78,091
           Phoenix North               1,958,357     117,487               73,945
              Safford                  1,114,283     133,786               86,636
               Tucson                    481,936      57,272               35,754
                Yuma                     190,348      29,924                2,751
              Subtotal                 7,954,856     659,915              353,962

                      Alturas                      361,107   52,517        26,943
                      Arcata                        27,904    3,389         2,137
                    Bakersfield                    243,757   95,407        23,981
                      Barstow                      612,013    9,154         5,873
                      Bishop                       307,036   36,466         9,416
                    Eagle Lake                     971,096   51,937        28,968
                     El Centro                      30,949    2,047         1,033
                      Folsom                        36,073    5,184         3,995
                     Hollister                     108,893   27,958        12,410
                      Needles                      631,222   18,451         3,695
            Palm Springs - South Coast              74,887    3,790         1,652
                      Redding                       27,716    5,902         5,811
                    Ridgecrest                     829,818   15,680        12,682
                     Surprise                    1,399,562   92,335        56,975
                       Ukiah                        10,290     788
                     Subtotal                    5,672,323   421,005      196,221
                     Colorado
         Canyon Ancients National Monument         139,120    9,241         2,963
                     Columbine                      23,559    2,598         1,956
                      Dolores                      335,872   23,052         9,832
                 Glenwood Springs                  446,724   45,806        27,933
                  Grand Junction                   982,731   112,829       28,564
                     Gunnison                      349,141   36,262        14,198
                     Kremmling                     276,603   35,317        24,762
                      La Jara                      139,890   13,386         2,836
                   Little Snake                  1,231,411   144,685       70,339

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

                             (Continued From Previous Page)

              State                   Acres    AUMs approved          AUMs billed
          Pagosa Springs              2,841                 457               276
           Royal Gorge              392,456              33,674            15,547
             Saguache               174,665              17,149             6,266
           Uncompahgre              668,685              52,349            19,049
           White River            1,428,982             128,145            86,548
             Subtotal             6,592,680             654,950           311,069

    Idaho

               Bruneau                  1,392,635     128,355              94,329
                Burley                    826,791     140,823              88,984
               Challis                    660,597     52,357               28,568
              Cottonwood                   88,852      6,210                5,237
             Four Rivers                1,063,834     144,925              95,414
              Jarbridge                 1,480,906     190,256             140,764
                Owyhee                  1,197,199     123,071              95,608
              Pocatello                   532,269     85,774               66,790
                Salmon                    427,273     65,605               44,035
               Shoshone                 1,491,667     208,121             108,784
          Upper Snake River             1,593,666     206,686             130,030
               Subtotal                10,755,689    1,352,183            898,543
               Montana
               Billings                   312,738     55,044               45,023
                Butte                     228,267     23,809               17,313
                Dillon                    793,268     109,913              63,888
               Glasgow                    990,870     144,782             135,472
                Havre                     564,309     90,819               69,894
              Lewistown                   791,289     125,777             119,232
                Malta                   1,040,872     176,069             155,459
              Miles City                2,712,286     550,211             490,444
               Missoula                    80,703      5,273                5,190
             North Dakota                  51,537      9,216                9,610
             South Dakota                 272,392     75,154               66,658
               Subtotal                 7,838,531    1,366,067          1,178,183
              New Mexico
               Carlsbad                 1,891,062     380,988             229,359
              Farmington                1,171,014     121,231              75,075
              Las Cruces                4,299,298     632,369             355,623
              Rio Puerco                  864,392     132,469              76,336

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

                             (Continued From Previous Page)

            State                   Acres    AUMs approved            AUMs billed
           Roswell              1,487,960              328,005            204,781
           Socorro              1,476,144              229,544            172,444
             Taos                 343,225               44,776             20,760
           Subtotal            11,533,095      1,869,382                1,134,378

    Nevada Oregon

          Battle Mountain             6,174,963     260,745               168,679
            Carson City               3,340,103     171,291                69,430
                Elko                  6,751,609     708,016               383,798
                Ely                  10,412,518     523,504               177,090
             Las Vegas                  166,391               0a            2,311
              Tonopah                 4,621,982     130,435                57,207
             Winnemucca               7,863,246     335,494               216,972
              Subtotal               39,330,812    2,129,485            1,075,487

                         Andrews                     1,635,153   96,337    71,972
                         Ashland                        115,388   9,002     7,233
                          Baker                         372,139  50,117    40,137
                          Border                         88,125  12,161     9,906
                       Butte Falls                       76,186   5,100     2,547
                      Central Oregon                    425,877  64,348    20,793
                         Coos Bay                           541    49          14
                        Deschutes                       543,228  56,417    26,630
                          Jordan                     2,507,713   186,221  154,751
                      Klamath Falls                     172,184  13,401    10,252
                         Lakeview                    2,865,315   164,536  111,535
                         Malheur                     2,070,694   226,719  158,352
                         Roseburg                        11,879    743          0
                       Three Rivers                  1,743,822   153,086  105,797
                        Wenatchee                       158,093  19,810    20,211
                         Subtotal                   12,786,337  1,058,047 740,130
                           Utah
                        Cedar City                   1,853,636   148,428   66,747
                         Fillmore                    4,160,071   262,063  138,351
    Grand Staircase-Escalante National Monument   1,301,225   75,544    17,009
                          Kanab                         234,400  18,416     5,946
                           Moab                      1,559,695   89,426    28,837
                        Monticello                   1,991,216   78,649    35,707

    Appendix III Detailed Grazing Data for Bureau of Land Management and the Forest
                                        Service

                             (Continued From Previous Page)

             State                   Acres    AUMs approved           AUMs billed
             Price               1,921,523              100,267            35,568
           Richfield             2,126,747              103,553            45,484
           Salt Lake             2,215,951              175,066           116,318
          St. George               470,103               28,428            10,853
            Vernal               1,486,240              149,493            52,602
           Subtotal             19,320,807      1,229,333                 553,422

    Wyoming

              Buffalo                   734,825     104,536                99,081
              Casper                  1,268,671     183,046               163,232
               Cody                     653,735      78,981                30,229
             Kemmerer                 1,449,185     152,469               111,661
              Lander                  2,243,482     275,961               162,731
             Newcastle                  284,741      48,854                47,733
             Pinedale                   934,802     106,574                63,265
              Rawlins                 3,044,835     457,546               267,651
           Rock Springs               3,553,435     306,755               137,876

    Worland 1,748,793 236,064 109,591

    Subtotal 15,916,504 1,950,786 1,193,050

    Total 137,701,634 12,691,153 7,634,445

    Source: BLM (data); GAO (analysis).

    aPermits can be issued for ephemeral rangeland, which refers to areas of
    the Hot Desert region that do not consistently produce enough forage to
    sustain a livestock operation, but from time to time, produce sufficient
    forage to accommodate livestock grazing. Such permits do not have AUMs
    designated, but grazing is approved and billed.

    Table 11 shows the acres of grazing available, approved AUMs, and billed
    AUMs in grazing year 2004 for Forest Service administrative offices and
    grasslands.1 The data on acres include acres in active and vacant
    allotments but not allotments that have been closed that are not available
    for grazing. The data on AUMs include data that the Forest Service calls
    "head months." Unlike BLM, the Forest Service uses two methods to tally
    the amount of grazing that occurs-AUMs and head months. The agency uses
    the term AUM to refer to the amount of forage grazed by livestock, while
    it uses the term head months to refer to the number of livestock (head)
    that are grazed and that are subject to billing. We used the Forest
    Service head month data

    1The Forest Service has 123 administrative offices, which manage 155
    proclaimed national forests and 20 national grasslands. National
    grasslands are listed under the administrative units with which they are
    associated.

    Appendix III Detailed Grazing Data for Bureau of Land Management and the Forest
                                        Service

    because they are equivalent to the BLM's data on AUMs, but we used the
    term AUM to simplify the comparison with BLM and other agencies' grazing
    data.

    Table 11: Forest Service Data on Acres and AUMs, by Forest and Grassland,
    Grazing Year 2004

          Regions Acresa AUMs approvedb AUMs billedb Region 1, Northern Region

            Beaverhead-Deerlodge National Forest      2,446,004  200,149  169,055
                 Bitterroot National Forest            227,390    4,546     3,017
              Idaho Panhandle National Forest          78,453     5,208     5,208
                 Clearwater National Forest            179,257    9,339     6,167
                   Custer National Forest              687,942   164,343  150,927
        Dakota Prairie National Grasslands (includes
                     Cedar River, Grand
    River, Little Missouri, and Sheyenne National  1,250,080  517,929   56,927
                        Grasslands)
                  Flathead National Forest             126,006    2,145     1,872
                  Gallatin National Forest             598,711   30,646    23,434
                   Helena National Forest              505,681   38,228    29,199
                  Kootenai National Forest             362,669    5,946     5,490
              Lewis and Clark National Forest          844,064   75,990    56,502
                    Lolo National Forest               296,898    5,251     3,266
                 Nez Perce National Forest             665,191   35,753    27,845
                          Subtotal                    8,268,346 1,095,473 538,909
              Region 2, Rocky Mountain Region
                  Bighorn National Forest              963,772   123,734   94,722
                Black Hills National Forest           1,211,319  87,449    85,925
          Grand Mesa Uncompaghre Gunnison National    2,780,322  276,365  224,602
                           Forest
             Medicine Bow-Routt National Forest       1,797,144  298,774  263,066
              Thunder Basin National Grassland         722,494   138,360  136,250
    Nebraska National Forest (includes Fort Pierre
                          National
                         Grassland)                    200,793   68,759    65,646
         Oglala and Buffalo Gap National Grasslands    829,380   230,051  184,625
                 Rio Grande National Forest           1,560,430  86,516    69,530
             Arapaho-Roosevelt National Forest         514,286   11,555     7,713
                 Pawnee National Grassland             198,041   82,445    28,025
              Pike-San Isabel National Forest         1,125,780  27,148    15,740
         Cimarron and Comanche National Grasslands     528,096   116,758   92,781
                  San Juan National Forest            2,012,944  141,230   97,290

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

                             (Continued From Previous Page)

                  Regions                  Acresa  AUMs approvedb    AUMs billedb
         Shoshone National Forest       1,227,788           51,836         35,691
        White River National Forest     1,456,895          186,136        162,582
                 Subtotal              17,129,484        1,927,116      1,564,188

                             Region 3, Southwestern Region

            Apache-Sitgreaves National Forest      1,877,307   209,723     95,165
                 Carson National Forest            1,657,436   113,326     80,901
    Cibola National Forest (includes McClellan
                     Creek National
                       Grassland)                  1,500,254   111,514     70,445
          Black Kettle, Kiowa, and Rita Blanca        256,297  215,376     84,573
                   National Grasslands
                Coconino National Forest           1,707,982   168,932    115,549
                Coronado National Forest           1,334,461   286,472    145,191
                  Gila National Forest             2,966,004   269,696    146,634
                 Kaibab National Forest            1,440,927   89,886      47,632
                 Lincoln National Forest              917,050  103,918     49,622
                Prescott National Forest           1,215,178   128,531     26,219
                Santa Fe National Forest           1,405,045   74,958      56,322
                  Tonto National Forest            2,629,757   279,697     40,804
                        Subtotal                   18,907,698 2,052,029   959,057
             Region 4, Intermountain Region
                 Ashley National Forest            1,055,123   104,884     61,174
                  Boise National Forest            1,449,325   92,149      97,243
              Bridger-Teton National Forest        2,254,437   372,658    191,925
                  Dixie National Forest            1,732,152   119,042     91,217
                Fishlake National Forest           1,421,228   125,088    102,126
               Manti-LaSal National Forest         1,311,426   252,396    190,391
                 Payette National Forest           1,009,796   167,577     97,117
             Salmon-Challis National Forest        2,488,187   134,697     96,116
                Sawtooth National Forest           1,710,407   294,025    198,056
             Caribou-Targhee National Forest       2,329,740   481,826    423,713
                Curlew National Grassland              47,790  21,501      20,153
            Humboldt-Toiyabe National Forest       5,775,113   460,301    297,485
                  Uinta National Forest               648,861  202,044    167,569
              Wasatch-Cache National Forest           873,177  150,696    129,417
                        Subtotal                   24,106,762 2,978,884 2,163,702
           Region 5, Pacific Southwest Region
                 Angeles National Forest               30,250  14,917           0
                Cleveland National Forest             113,775   4,606       2,135

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

                             (Continued From Previous Page)

                     Regions                   Acresa AUMs approvedb AUMs billedb
            Eldorado National Forest          407,562          7,403        7,403
              Inyo National Forest            866,587         63,711       51,611
        Klamath National Forest (includes     708,640         19,372       17,521
        Butte Valley National Grassland)
             Lassen National Forest           902,983         31,781       19,423
           Los Padres National Forest       1,065,067         47,315       32,335
            Mendocino National Forest         640,417          5,989        3,821
              Modoc National Forest         3,832,197        126,206       97,737
           Six Rivers National Forest         255,445          5,916        4,417
             Plumas National Forest           645,888         27,883       19,774
         San Bernardino National Forest       171,996          3,419        1,300
             Sequoia National Forest          889,519         58,584       45,504
         Shasta Trinity National Forest       130,059          9,659        2,637
             Sierra National Forest           532,571            N/A          N/A
           Stanislaus National Forest         633,764         26,703       42,969
              Tahoe National Forest           495,063         32,617       25,344
        Lake Tahoe Basin Management Unit       31,550            303
                    Subtotal               12,353,333        486,384      374,089
    Region 6, Pacific Northwest Region
            Deschutes National Forest         602,687          9,507        4,772
             Fremont National Forest        1,407,837         49,484       43,348
         Gifford Pinchot National Forest      177,297            N/A          N/A
             Malheur National Forest        1,627,719        118,539       92,810
             Mt Hood National Forest          284,884          1,818        3,527
             Ochoco National Forest           787,644         44,856       37,861
        Crooked River National Grassland      112,357         16,930            7
            Olympic National Forestc                0              0            0
           Rogue River National Forest        554,485         11,249        7,655
            Siskiyou National Forest          157,422            462          379
            Siuslaw National Forestc                0              0            0
            Umatilla National Forest          967,985         56,854       39,170
             Umpqua National Forest           121,147            N/A          N/A
         Wallowa Whitman National Forest    1,645,814        135,598      105,774
    Okanogan-Wenatchee National Forests  1,675,338         87,957       51,473
           Willamette National Forest              45            N/A          N/A
             Winema National Forest           466,026         17,173       10,804
            Colville National Forest          819,646            N/A          N/A
                    Subtotal               11,408,333        550,427      397,580

    Appendix III Detailed Grazing Data for Bureau of Land Management and the Forest
                                        Service

                             (Continued From Previous Page)

     Regions Acresa AUMs approvedb AUMs billedb Region 8, Southern Region Region 9,
                                     Eastern Region

                  NFS in Alabama National Forest             1,763   452
               Chattahoochee-Oconee National Forest          1,507  3,690
                   National Forests in Florida              44,866   600
                    Kisatchie National Forest               73,238  6,238
                 National Forests in Mississippi             2,724   577
         George Washington and Jefferson National Forests    8,400  9,579   7,405
                     Ouachita National Forest               453,195 7,326   4,225
                 Ozark-St Francis National Forest           49,732  7,092   3,192
                National Forests in North Carolina            291    N/A      N/A
    National Forests in Texas (includes Caddo/Lyndon B.
                             Johnson
                       National Grasslands)                 39,342  4,404   3,449
                             Subtotal                       675,058 39,958 19,275

                          Chippewa National Forest 125 N/A N/A

                      Huron Manistee National Forest 1,584 N/A N/A

                    Mark Twain National Forest 42,777 15,341 13,630

                  Wayne National Forest                   148    606
           Midewin National Tallgrass Prairie          19,165   4,910       7,658
        Green Mountain and Finger Lakes National        5,438   8,942       7,042
                         Forests
               Monogahela National Forest               6,203   4,917       5,267
                        Subtotal                       75,440  34,716      33,811
                          Total                    92,924,454 9,164,987 6,050,611

    Source: Forest Service (data); GAO (analysis).

    Notes: The Forest Service has no Region 7.

    N/A = Not available.

    aAcres values include vacant and active acres for the Forest Service.

    bAlthough we use the term AUMs to simplify the comparison with BLM data,
    we used the Forest Service's head month data for this table because they
    are equivalent to BLM's AUM data.

    cAccording to agency officials, the Forest Service permitted grazing in
    Olympic and Siuslaw National Forests in the past, but grazing is no longer
    permitted in these forests.

    Permits and Leases by 	Because the number of AUMs per permit or lease can
    vary greatly, the number of AUMs controlled by permittees or lessees also
    varies greatly.

    Size	Tables 12 through 16 show the number of BLM and Forest Service
    permits and leases, and AUMs, by permit size. When considering the data,
    it must be noted that multiple permits or leases may be contained on a
    single allotment, just as one permit or lease may span multiple
    allotments. It must

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

    also be noted that several operators may share one permit or lease, just
    as one operator may possess multiple permits or leases; therefore, the
    number of permits and leases does not necessarily correlate to the total
    number of operators. Table 12 shows the size of BLM permits and leases,
    using approved AUMs in fiscal year 2004. The data do not include permits
    and leases with less than 2 AUMs.2

    Table 12: Number of BLM Permits by Size, Fiscal Year 2004

             Size of permit or lease, Number of permits and
                                AUMsa                 leases  Total approved AUMs
                              2 to 10                  1,266                8,613
                            11 to 100                  6,073              267,368
                           101 to 500                  5,551            1,367,336
                         501 to 1,000                  1,910            1,354,380
                       1,001 to 5,000                  2,556            5,374,337
                      5,001 to 10,000                    285            1,929,577
                          Over 10,000                    143            2,364,322
                                Total                 17,784           12,665,933

    Source: BLM.

    aWe start with 2 AUMs because we recreated a table from a previous GAO
    report. In that report, officials were concerned about the accuracy of
    data for permits with 2 AUMs or less and considered all permits and leases
    with more than 2 AUMs.

    The Forest Service provided data on permit size for cattle and sheep in
    regions 1 through 6, those regions with lands in western states. Table 13
    shows the data for cattle, which do not include horses or other livestock
    and do not include permits with fewer than 2 AUMs of grazing for cattle.

    2The agencies recreated tables that we produced in two previous GAO
    reports: GAO, Rangeland Management: Profile of the Bureau of Land
    Management's Grazing Allotments and Permits, GAO/RCED-92-213FS
    (Washington, D.C.: June 10, 1992) and GAO, Rangeland Management: Profile
    of the Forest Service's Grazing Allotments and Permittees,

    GAO/RCED-93-141FS (Washington, D.C.: Apr. 28, 1993).

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

    Table 13: Number of Forest Service Cattle Permits by Size, Grazing Year
    2004

               Size of permits, AUMsa    Number of permits    Total approved AUMs
                              2 to 10                   26                    170
                            11 to 100                  757                 43,071
                           101 to 500                2,199                592,251
                         501 to 1,000                1,090                773,293
                       1,001 to 5,000                1,170              2,337,730
                      5,001 to 10,000                   89                604,806
                          Over 10,000                   34              1,049,515
                                Total                5,365              5,400,836

    Source: Forest Service.

    aThe permit size groups start with 2 AUMs because we recreated a table
    from a previous GAO report, and, in the past, officials were concerned
    about the accuracy of data for permits with 2 AUMs or less.

    Forest Service sheep permits are shown in table 14. For the purposes of
    conversion, five sheep equal 1 AUM. In addition to the sheep, an
    insignificant number of horses are included in the data because, in some
    cases, permittees may keep a horse for herding the sheep.

    Table 14: Number of Forest Service Sheep Permits by Size, Grazing Year
    2004

               Size of permits, AUMsa    Number of Permits    Total approved AUMs
                           50 to 500b                   17                  4,680
                         501 to 1,500                   46                 46,876
                       1,501 to 5,000                  125                406,865
                      5,001 to 15,000                  109                969,131
                     15,001 to 25,000                   25                471,869

    over 25,000 13 461,751

    Total 335 2,361,172

    Source: Forest Service.

    aThe permit size groups start with 2 AUMs because we recreated a table
    from a previous GAO report. In that report, officials were concerned about
    the accuracy of data for permits with 2 AUMs or less.

    bThis does not include permits with less than 50 AUMs.

    For comparison purposes, the size of cattle and calf operations in the
    United States is shown in table 15.

    Appendix III Detailed Grazing Data for Bureau of Land Management and the
    Forest Service

    Table 15: Number of Cattle and Calf Operations and Percent of Inventory,
    United States, 2004

             Number of head of cattle
                           and calves Number of operations   Percent of inventory
                              1 to 49               618,750                  11.3
                             50 to 99               163,750                  11.6
                           100 to 499               178,530                  35.4
                           500 to 999                18,445                  12.7
                       1,000 to 1,999                 6,300
                       2,000 to 4,999                 2,700
                       5,000 to 9,999                   580
                     10,000 to 19,999                   225
                          20,000 plus                   180
                                Total               989,460                 100.0

    Source: National Agricultural Statistics Service (data); GAO (analysis).

    The size of beef cow operations is shown in table 16.

    Table 16: Number of Beef Cow Operations and Percent of Inventory, United
    States, 2004

              Number of head of beef
                                cows  Number of operations   Percent of inventory
                             1 to 49                601,650                  28.1
                            50 to 99                 95,650                  19.1
                          100 to 499                 72,020                  38.3

                  500 to 999                  4,030                        7.8
                1,000 to 1,999                 950                         3.4
                2,000 to 4,999                 280                         2.1
                  5,000 plus                             50                1.2
                    Total                    774,630                     100.0

    Source: National Agricultural Statistics Service (data); GAO (analysis).

    Appendix IV

    Grazing Fee for Lands Managed by BLM and the Forest Service

    Rangelands in the United States have been used for livestock grazing since
    the expansion and settlement of the western frontier. Ranchers have grazed
    livestock on lands managed by the Forest Service and its predecessor since
    the late 1890s and on lands managed by BLM and its predecessor since 1934.
    Historically, BLM and Forest Service fees were established to achieve
    different objectives-either to recover administrative expenses or to
    reflect livestock prices, respectively-but the agencies began using the
    same approach to setting fees in 1969. Over the years, the agencies, as
    well as outside entities, have conducted numerous studies attempting to
    establish a grazing fee that meets the objectives of multiple parties. The
    current fee for BLM and the Forest Service's 16 western states is based on
    a formula that estimates ranchers' ability to pay, and was established in
    1978 based on studies conducted in the 1960s and 1970s.1 This appendix
    discusses the current fee, historical fees, and key grazing studies and
    their findings.

    Current Fee for BLM's and the Forest Service's Western States

    In 2004, the grazing fee for lands managed by BLM and the Forest Service's
    16 western states was $1.43 per AUM-or the amount of forage needed to
    sustain a cow and her calf for 30 days.2 This fee is set annually
    according to a formula established in the Public Rangelands Improvement
    Act of 1978 (PRIA) and extended indefinitely by Executive Order 12548. The
    formula is:

    Fee = $1.23 x (FVI +BCPI - PPI)/100

    where $1.23 = the base value, or the difference between the costs of
    conducting ranching business on private lands, including any grazing fees
    charged, and public lands, not including grazing fees. The costs were
    computed in a 1966 study that included 10,000 ranching businesses in the
    western states.

    FVI = Forage Value Index, or the weighted average estimate of the annual
    rental charge per head per month for pasturing cattle on private
    rangelands in 11 western states (Arizona, California, Colorado, Idaho,
    Montana, New

    1The 16 western states include Arizona, California, Colorado, Idaho,
    Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma,
    Oregon, South Dakota, Utah, Washington, and Wyoming.

    2While BLM uses the term AUM as a unit for purposes of charging fees, the
    Forest Service uses the term head month. The two units are calculated the
    same way. We use the term AUM in this report to refer to both AUM and head
    month.

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    Mexico, Nevada, Oregon, Utah, Washington, and Wyoming) divided by $3.65
    per head month (the private grazing land lease rate for the base period of
    1964-68) and multiplied by 100.

    BCPI = Beef Cattle Price Index, or the weighted average annual selling
    price for beef cattle (excluding calves) in the 11 western states divided
    by $22.04 per hundredweight (the beef cattle price per hundred pounds for
    the base period of 1964-68) and multiplied by 100.

    PPI = Prices Paid Index, for selected components from USDA's National
    Agricultural Statistics Service's Index of Prices Paid by Farmers for
    Goods and Services, adjusted by different weights (in parentheses) to
    reflect livestock production costs in the western states [fuels and energy
    (14.5), farm and motor supplies (12.0), autos and trucks (4.5), tractors
    and selfpropelled machinery (4.5), other machinery (12.0), building and
    fencing materials (14.5), interest (6.0), farm wage rates (14.0), and farm
    services (cash rent) (18.0)].

    PRIA limited the annual increase or decrease in the resulting fee to 25
    percent. It also established the fee formula for a 7-year trial period and
    required that the effects of the fee be evaluated at the end of that
    period. Although the fee formula under PRIA expired in 1986, the use of
    the fee formula was extended indefinitely by Executive Order 12548. The
    executive order requires the Secretaries of the Interior and Agriculture
    to establish fees according to the PRIA formula, including the 25 percent
    limit on increases or decreases in the fee. In addition, the order
    established that the fee should not be lower than $1.35 per AUM.

    As shown in figure 3, the formula results have been limited by the PRIA
    and executive order constraints, but neither the formula results nor the
    PRIA fee has mirrored fees charged for grazing on private lands.

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    Figure 3: Unconstrained Formula Results and PRIA Grazing Fee Compared with
    Fees Charged on Private Lands

    Dollars 15

    12

    9

    6

    3

    0

    Year

    Private fees

    Formula results

    PRIA fee Source: National Agricultural Statistics Service (data); GAO
    (analysis).

    Note: In 1980, BLM and the Forest Service charged $2.36 per AUM and $2.41
    per AUM, respectively, or on average, $2.38 per AUM. Prior to 1981, the
    agencies charged different fees for grazing-in 1979, they charged $1.89
    per AUM and $1.93 per AUM, respectively. In 1980, the agencies used the
    PRIA formula to calculate their fees, but the formula produced a fee of
    $2.77, and PRIA limited the annual increase in the fee to 25 percent. The
    different fees charged in 1980 were a result of the agencies applying the
    25 percent increase to their 1979 fees.

    According to different economic studies and our evaluation of the PRIA fee
    structure in 1991, the fee is kept low by including the BCPI and PPI,
    which are factors that take into account ranchers' "ability to pay."3
    Figure 4 shows the value of each PRIA component from 1979 through 2004.

    3GAO, Rangeland Management: Current Formula Keeps Grazing Fees Low,
    GAO/RCED91-185BR (Washington, D.C.: June 11, 1991).

    1979198019811982

    198319841985198619871988198919901991199219931994199519961997199819992000200120022003
                                          2005

                                          2004

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    Figure 4: Value of PRIA Grazing Formula Components, 1979 through 2004
    Index value 800

    600

    400

    200

    0

    Year

    FVI

    PPI

    BCPI Source: National Agricultural Statistics Service (data); GAO
    (analysis).

    Table 17 shows the data used in the previous two figures for easier
    reading of the numbers.

    1979198019811982

    1983198419851986198719881989199019911992199319941995199619971998199920002001200220032004

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    Table 17: PRIA Formula Data for 1979 through 2004 and Fee Results for 1980
    through 2005

              Data  Private lands                            Fee Formula PRIA fee
              year     grazing fee  FVI   BCPI    PPI  year results (constrained)
              1979            7.53  206   294     275                  a1980 2.77
              1980            7.88  216   291     319              1981 2.31 2.31
              1981            8.83  242   268     359              1982 1.89 1.86
              1982            8.36  229   262     378              1983 1.39 1.39
              1983            8.85  242   256     387              1984 1.37 1.37
              1984            8.86  243   262     395              1985 1.35 1.35
              1985            9.17  251   243     397              1986 0.93 1.35
              1986             8.5  233   235     388              1987 0.98 1.35
              1987            8.54  234   272     381              1988 1.54 1.54
              1988            8.75  240   297     386              1989 1.86 1.86
              1989            8.87  243   306     402              1990 1.81 1.81
              1990            9.22  253   326     419              1991 1.97 1.97
              1991            9.66  265   327     436              1992 1.92 1.92
              1992           10.03  275   316     440              1993 1.86 1.86
              1993            10.2  279   333     451              1994 1.98 1.98
              1994            10.3  282   304     455              1995 1.61 1.61

    1995 11 301 277 473 1996 1.29 1.35 1996 10.7 293 252 499 1997 0.57 1.35
    1997 11.3 310 281 512 1998 0.97 1.35 1998 11.8 323 272 514 1999 1 1.35
    1999 11.9 326 281 516 2000 1.12 1.35 2000 12 329 313 554 2001 1.08 1.35
    2001 12.6 345 330 559 2002 1.43 1.43 2002 13 356 303 559 2003 1.23 1.35
    2003 13.4 367 342 593 2004 1.43 1.43 2004 13.8 378 402 618 2005 1.99 1.79

    Source: National Agricultural Statistics Service.

    aIn 1980, BLM and the Forest Service charged $2.36 per AUM and $2.41 per
    AUM, respectively, or on average, $2.38 per AUM. Prior to 1981, the
    agencies charged different fees for grazing-in 1979, they charged $1.89
    per AUM and $1.93 per AUM, respectively. In 1980, the PRIA formula
    produced a fee of $2.77, but PRIA limited the annual increase in the fee
    to 25 percent. The different fees charged in 1980 were a result of the
    agencies applying the 25 percent increase to their 1979 fees.

                                      Appendix IV
                        Grazing Fee for Lands Managed by BLM and
                                   the Forest Service

    History of Western Grazing Fees

    Grazing fees have been charged for lands managed by the Forest Service
    since 1906-9 years after grazing was authorized on forest reserves-and for
    lands now managed by BLM since 1936, 2 years after the enactment of the
    Taylor Grazing Act. Before 1906, livestock could graze on federally
    managed lands for free, and livestock operators objected to being charged.
    Originally, the fee charged by the Forest Service and BLM was $0.05 per
    AUM for cattle, but the fee increased by 1968 to $0.56 per AUM for Forest
    Service permits and $0.33 per AUM for BLM leases and permits.

    Until 1969, the approach used by the Forest Service and BLM for
    establishing grazing fees differed. The original Forest Service fee was
    based on the rental value of local, private grazing tracts, while the
    original BLM fee was based on the agency's administrative expenses.
    Beginning in the 1920s and continuing through 1968, the Forest Service
    based its fee on beef and lamb prices, as determined through studies it
    conducted. BLM (and its predecessor) also conducted studies of its fee
    approach. In 1946, the year that BLM was created, one of these studies
    supported the use of administrative expenses as a basis for the fee.
    However, in 1951, BLM began increasing its fees, and in 1958, it shifted
    its approach to one that was similar to the Forest Service approach-that
    is, based on livestock prices. Throughout the 1960s, BLM charged fees that
    factored in livestock prices. For example, the 1958 fee increased from
    $0.19 per AUM to $0.22 per AUM in 1959 and 1960, and it decreased to $0.19
    per AUM in 1961 and 1962, reflecting decreasing livestock prices.

    Since 1969, the Forest Service and BLM have used a uniform approach to
    establish a grazing fee. After a 1960 study conducted for the Bureau of
    the Budget-the predecessor of the OMB-by an interdepartmental grazing
    committee, the Bureau set a new fee schedule for the agencies to achieve
    fair market value for federal grazing permits and leases. An extensive
    survey in 1966 of the western livestock industry, called the Western
    Livestock Grazing Survey and Analysis, and a 1968 review of that survey
    data determined that a fair market value for federal grazing permits and
    leases would be $1.23 per AUM. The $1.23 per AUM value equalizes the costs
    of conducting business between private ranch lands and federal lands. It
    is based on the premise that the costs of conducting grazing activities on
    federal lands should be competitive and comparable to the costs on private
    land. Because the new fee, if imposed all at once, would have increased
    Forest Service fees by $0.72 per AUM and BLM fees by $0.90 per AUM, a
    10-year phase period was scheduled.

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    Before the new fee could be implemented, drought and continued debate
    caused several delays in the phase-in schedule, and in 1976, the Congress
    passed the Federal Land Policy and Management Act (FLPMA), which required
    the Secretaries of Agriculture and of the Interior to conduct a study to
    establish a fee that was equitable both to the United States and to
    holders of grazing permits and leases. The 1977 study, Study of Fees for
    Grazing Livestock on Federal Lands, written by a task force of Forest
    Service and BLM officials,4 evaluated several different formulas for
    setting a grazing fee. The goal was to establish a fee that achieved
    multiple objectives, including getting fair market value for the forage
    while also reflecting the value of grazing to the rancher. The fee was
    also to contain regular adjustments to account for changes in fair market
    value over time.

    On the basis of the 1977 study, Congress enacted PRIA with the task
    force's recommended formula for a 7 year trial basis. The agencies studied
    the effectiveness of the formula after 7 years, as required in PRIA, and
    academic economists sought to establish better ways to set a fee, but the
    use of the formula was extended indefinitely by executive order and has
    remain unchanged. Two studies by the agencies, one in 1986 and its update
    in 1992, evaluated the components of the PRIA formula and its results.5
    The reports identified technical issues with the formula, including the
    fact that the BCPI does not include prices for calves-which are produced
    on western lands-and does include fat cattle (cattle fattened on grain for
    slaughter), which are not produced on western lands. The reports also
    noted that the PPI does not include a cost of living component; components
    of farm origin (feed, feeder livestock, seed, and fertilizer); or taxes;
    all of which increases the weight of factors that are affected by
    inflation, such as fuel costs. Finally, the reports identified the need to
    update the base value ($1.23 per AUM) to reflect current market values
    rather than 1960s data.

    Critics of the reports stated that the agencies did not evaluate the
    effectiveness of the PRIA formula; disagreed with the agencies' appraisal
    of private lands and fees; and identified incorrect statistical indexing,
    such as

    4Departments of the Interior and Agriculture, Study of Fees for Grazing
    Livestock on Federal Lands (Washington, D.C.: October 21, 1977).

    5Departments of the Interior and Agriculture, Grazing Fee Review and
    Evaluation (Washington, D.C.: February, 1986) and Departments of the
    Interior and Agriculture, Grazing Fee Review and Evaluation Update of the
    1986 Final Report (Washington, D.C.: April 30, 1992).

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    using inflation factors instead of a livestock-relevant factor. They also
    stated that the agencies failed to recognize the different costs of
    operating on federal and private land. According to the critics, one of
    these costs is the value of permits and leases, which is included in the
    value of privately owned ranches. The livestock industry believes that
    this value should be included in the calculation of the $1.23 base value
    (subtracted out as a cost of doing business).

    In 1993, in response to a perceived need to increase fees to capture the
    economic value of forage, another Forest Service and BLM study examined
    the potential for an incentive-based grazing fee. The report identified
    the "grazing fee dilemma" as one in which the federal government is not
    receiving full market value for its forage, but as one in which ranchers
    are paying full market value by paying (1) the fee; (2) nonfee grazing
    costs (including costs for operating on federal lands, i.e., complying
    with federal requirements like those for endangered species habitat); and
    (3) investments in grazing permits and leases.6 According to this study,
    the only way to determine the fair market value of federal grazing permits
    and leases was through competitive bidding, which would have its own set
    of administrative expenses. In lieu of competitive bidding, according to
    this study, all methods of estimating fair market value resulted in fees
    somewhere between $3 and $5, and the base value of the formula should be
    negotiated at some price in that range. The report also stated that
    including BCPI and PPI in the grazing formula did not improve the ability
    of the PRIA formula to track market prices, as anticipated in 1977, and
    that FVI would adequately update the grazing fee. This study and report
    were used to inform efforts to reform grazing regulations in 1994.

    In the late 1980s, agricultural economists examined livestock prices and
    ranch revenue-the gross income from ranching-to assess the rate of return
    on investments in cattle and sheep ranches. The economists found that
    rates of return are relatively low compared with other investments, but
    that land value has increased and kept ranchers financially solvent.
    Furthermore, the net return in the ranching industry-the value of
    production minus costs-is often negative. This information was used to
    support federal legislation to change grazing fees in 1997. The
    legislation proposed to change the fee to equal the 12-year average of the
    total gross

    6Department of Agricultural Economics and Agricultural Business, The Value
    of Public Land Forage and the Implications for Grazing Fee Policy,
    Bulletin 767 (Las Cruces, New Mexico: New Mexico State University, 1992).

    Appendix IV
    Grazing Fee for Lands Managed by BLM and
    the Forest Service

    value of production for beef, multiplied by the 12-year average of the
    Treasury 6-month bill "new issue" rate, divided by 12.7 The proposal was
    not enacted.

    7H.R. 2493, Forage Improvement Act of 1997 (introduced Sept. 18, 1997).

    Appendix V

    Examples of Other Federal Agency Grazing Fees

    This appendix illustrates the different grazing fees used by federal
    agencies other than BLM and the Forest Service. It describes the specific
    fees charged at two Air Force bases-one managed by the Air Force and the
    other managed by BLM-an Army base, a national monument, a national refuge,
    and a Reclamation project.

    Melrose Air Force Range, Cannon Air Force Base, New Mexico

    Melrose Air Force Range, located in eastern New Mexico, is a more than
    66,000 acre site used by the Air Force to train pilots. It consists of an
    8,800 acre target area and 57,000 acres of land surrounding the target
    area that acts as a buffer. The land is divided into 13 grazing areas,
    each of which has fencing and a water supply provided by a system of
    pipelines and water tanks. The target area lands were acquired from local
    ranchers in the 1950s, and the remaining area was acquired in the 1980s.
    Because the lands were acquired from local ranchers, the Air Force granted
    a special waiver in March 2002 to allow noncompetitive leasing to the
    former owners. Air Force policy allows waivers of competition under
    certain conditions, including offers of first lease of land to former
    owners.

    In fiscal year 2002, when many of the range's leases were renewed, the fee
    charged for grazing was $1.60 per acre of land (about $5.30 per AUM). The
    waiver of competition contained a condition that the lease fee was to be
    based on a market rate determined by real property specialists. To
    establish a market-based grazing fee, the Air Force real estate staff
    developed comparable lease information for other grazing land in the
    vicinity and set an equivalent price. One source used for pricing
    information was a local agricultural land appraiser and the other was a
    Web site identified by the local BLM office that contained lease rates for
    the state. The prices remain the same for the 5-year term of the lease,
    when they will be reestablished. In mid-2003 and all of 2004, Cannon Air
    Force Base halted grazing on Melrose Range because of drought conditions
    that affected much of New Mexico and the southwestern United States. The
    ranchers received credits for the months that their cattle did not graze.

    McGregor Range, New McGregor Range in southern Otero County, New Mexico,
    is a 694,981 acre

    Mexico	area that contains a bombing range used by the Air Force to train
    pilots, who practice bombing targets within the range. The land within
    McGregor Range has mixed ownership and management, including 608,385 acres
    (87 percent) of public land managed by BLM but withdrawn from public use,
    71,083 acres (about 10 percent) owned in fee title by the Army, and 17,864
    acres (3 percent) managed by the Forest Service.

                Appendix V Examples of Other Federal Agency Grazing Fees

    In 1999, the Congress enacted the Military Lands Withdrawal Act, renewing
    the withdrawal of public lands comprising the McGregor Range for military
    use but requiring BLM to plan and manage use of the lands in accordance
    with the principles of multiple use and sustained yield required by FLPMA.
    While accommodating the military's continued use of the range, BLM manages
    other activities on the range, including livestock grazing, habitat
    management, fire prevention and control, and recreation, such as hunting.
    BLM's Las Cruces Field Office in New Mexico administers livestock grazing
    on 271,000 acres of land. The area is divided into 14 grazing units
    available for grazing contract, primarily for cattle.

    In contrast to the fee charged on other BLM and Forest Service lands, BLM
    manages livestock grazing permits on McGregor Range using competitive
    bidding to establish its grazing fee. BLM sets a minimum bid and then
    holds an annual public auction, where all bidders meet and openly submit
    their offers. As a result, in September 2004, BLM received winning bids
    ranging from $5.00 to $14.50 per AUM to graze cattle on designated grazing
    units for the 9-month grazing season ending in June 2005. BLM expects the
    McGregor Range grazing program to be self-sustaining through competitive
    bidding for grazing units. BLM staff for McGregor Range consist of one
    rangeland management specialist, one range technician, and one maintenance
    worker. Revenues from the grazing leases allow BLM employees to monitor
    the number of cattle on the range and manage roads, fences, corrals, and
    water pipelines. The livestock owners manage and provide care for the
    cattle, including salt, minerals, and veterinary services. According to
    BLM officials, additional services provided on the range by BLM result in
    a higher minimum bid, and BLM is able to attract higher bids compared to
    other livestock grazing areas.

    Fort Hood Army Installation, Texas

    Fort Hood, located in central Texas, is a 217,000-acre Army installation,
    the majority of which is used for military training activities, including
    tank and other armored vehicle training exercises. The Army allows a
    certain level of grazing on about 197,000 acres of the installation,
    having determined that grazing would not interfere with the installation's
    primary training mission. The majority of the installation's lands were
    acquired from private landowners. Some of the original landowners formed a
    group, called the Central Texas Cattlemen's Association, which has
    continued leasing the land since 1954. In 2005, upon lease renewal, the
    Assistant Secretary of the Army (Installations and Environment) determined
    to offer the group a noncompetitive lease, provided that the installation
    obtain a fair market value for the lease. The Corps-the Army's leasing
    agent-had

                Appendix V Examples of Other Federal Agency Grazing Fees

    recommended that the lease be competitively bid, but it also acknowledged
    that a transition to competitive leasing may be needed. The Army
    determined that while it had no legal obligation to continue leasing to
    the group, the relationship with the neighboring ranchers contributed to
    the Army's ability to sustain its mission, discharge its environmental
    stewardship responsibilities, and maintain its standing in the community.

    In 2005, the Army renegotiated a lease with the Central Texas Cattlemen's
    Association, charging a price of $4.67 per AUM ($56 per animal unit, per
    year), plus the installation's administrative and management expenses. The
    Army agreed to adjust the number of animal units based on a new forage
    assessment and an evaluation of training intensity and the consequent
    effects on forage. The Army also agreed to conduct a new appraisal that
    considers factors that are unique to managing grazing on a military
    installation, such as lack of fencing, presence of endangered species, and
    restricted access to the installation. Although a land appraisal was
    conducted in 2004 and determined the price of the new lease to be $7.83
    per AUM, Army officials agreed with the Association to discount this value
    by 40 percent for April 1, 2005, through August 31, 2005, because the
    appraisal did not explicitly consider the military unique circumstances
    that, according to Army officials, lead to higher grazing costs on Army
    lands. The 40-percent figure was based on a figure used in a 1996
    appraisal, although the U.S. Army Audit Agency questioned the adjustment
    in a 2001 audit report.1 The Army received a new appraisal on August 12,
    2005, that has a price of $5.66 per AUM ($68 per animal unit, per year)
    when adjusted for military unique circumstances. It will use this new
    amount as the basis of the fee for the remainder of the 5-year lease
    period. In addition to these agreements, the Cattlemen's Association
    agreed to pay $102,000 for estimated administrative expenditures owed in
    the new lease and agreed to reimburse actual expenditures when the Army
    presents evidence of actual expenditures at the end of the lease year.
    Army staff estimated their 2005 expenditures to be $285,000.

    Dinosaur National Dinosaur National Monument, located in northwestern
    Colorado and Monument, Colorado and northeastern Utah, was created to
    protect a large deposit of dinosaur Utah fossils and later expanded to
    protect the river corridors of the Green and

    Yampa rivers. The monument, which occupies 210,000 acres of desert

    1U.S. Army Audit Agency, The Army Installation Conservation
    Program-Outleasing: III Corps and Fort Hood, Fort Hood, Texas, AA 02-099
    (Alexandria, Virginia: Dec. 19, 2001).

                Appendix V Examples of Other Federal Agency Grazing Fees

    habitat, permits grazing on monument lands to ranchers that have
    historically held grazing rights. Several ranchers with grazing rights own
    land within the boundaries of the monument, called inholdings, while
    several other ranchers with grazing rights own land adjacent to the
    monument. In fiscal year 2004, monument staff authorized 1,794 AUMs on
    67,120 acres using seven special use permits.

    In 2004, the monument charged $1.43 per AUM-the price for grazing on BLM
    lands. National Park Service regulations specific to the monument direct
    that the grazing fees at the monument shall be the same as those approved
    for the BLM.2 The National Park Service is statutorily authorized to
    recover the costs of administering special use permits; however, a
    monument official said that they have never charged such a fee because of
    the more specific regulations that determine the monument's fee.

    Klamath Basin National Wildlife Refuge Complex, California and Oregon

    The U.S. Fish and Wildlife Service's Klamath Basin National Wildlife
    Refuge Complex is part of the wetland and lake system of the Klamath Basin
    of northern California and southern Oregon and provides habitat for
    numerous birds along the Pacific flyway during spring and fall migrations.
    In 1905, Reclamation began to convert wetlands in the basin into
    agricultural lands. The refuge complex is comprised of six refuges that
    were established between 1908 and 1978 to conserve wetlands as a preserve
    and breeding ground for birds and animals. The refuge is also managed to
    allow appropriate agricultural uses of land. Klamath Basin refuge managers
    authorize grazing on 17,046 acres of the basin to allow adjacent ranchers
    access to forage on refuge lands and to reduce certain grasses, thereby
    improving the habitat of the birds that use the refuges.

    In fiscal year 2004, the refuge charged different fixed amounts ranging
    from $5.00 to $6.55 per AUM for grazing on three federal refuges in the
    Klamath Basin complex-Clear Lake, Lower Klamath, and Upper Klamath. U.S.
    Fish and Wildlife Service regulations require that fees charged for the
    grant of privileges and for the sale of all products taken from refuge
    areas, including forage, be equivalent to the fees charged by private
    owners in the vicinity of the refuge. Refuge officials said that the fees
    were negotiated in the 1980s and have remained unchanged. However, they
    stated that the fees are appropriate because the refuges receive benefits
    from grazing for wildlife

    2See 36 C.F.R. 7.63(b)(5).

                Appendix V Examples of Other Federal Agency Grazing Fees

    habitat and forage and permittees must meet specific limitations on their
    use of refuge lands. For example, in one case involving the Clear Lake
    National Wildlife Refuge, when water levels decrease significantly and
    expose Native American archaeological sites, one rancher incurs
    significant expenditures (e.g., temporary fencing, temporary water
    sources, and a herder) to keep cattle away.

    Fresno Reservoir and Reclamation's Milk River Project, Montana

    Fresno Reservoir, located in north-central Montana, is part of
    Reclamation's Milk River Project, which provides irrigation water to about
    121,000 acres of land. Reclamation acquired excess land surrounding Fresno
    Reservoir when it built the Fresno Dam; the reservoir was originally
    planned to be higher and would have flooded more land. As a result,
    Reclamation allows grazing on the strip of land surrounding the reservoir.
    The area office conducts grazing on over 24,000 acres of land near Fresno
    Reservoir, and allows grazing on over 27,000 acres of land managed by two
    irrigation districts on Reclamation land within the greater Milk River
    Project. Revenue from the grazing receipts goes into either the
    Reclamation Fund or is credited to divisions within the Milk River
    Project.

    In fiscal year 2004, the Montana Area Office charged between $8.25 and
    $25.10 per AUM for numerous grazing permits and leases within the Milk
    River Project. To establish these fees, the area office used three types
    of market-based methods, including competitive, limited competitive, and
    negotiated. For all permits and leases, the area office set a minimum bid
    based on the market value for permits and leases in the area, and then
    discounted the rate for factors such as lack of fencing on Reclamation
    lands. The area office then offered the majority of project permits and
    leases for competitive bid using a sealed bid process. For parcels with
    limited access, the area office limited competition to the adjacent
    landowners, giving them equal opportunity to bid on the permits and
    leases. Much of the land within the Milk River Project is surrounded by
    private land, and therefore the Reclamation land has limited public
    access. For a few permits and leases, the area office used what it called
    a negotiated method to establish the grazing fee. In these cases, in which
    only one rancher has access to a site, the area office offered each permit
    or lease to the rancher at the minimum bid, allowing the rancher to accept
    or reject the bid.

    Appendix VI

                        Western State Grazing Fees and Formulas

    As this appendix discusses, the 17 western states vary considerably in the
    fees charged for state lands and the methods used to set those fees. These
    states' land offices manage more than 46 million acres of trust lands, of
    which more than 37 million acres were grazed in fiscal year 2004,1
    bringing in grazing revenues of more than $40.7 million.

    Upon statehood, most western states, as well as several other states
    throughout the nation, received lands from the federal government to be
    held in trust to generate revenue for public education. The Land Ordinance
    of 1785 initiated a program to reserve certain lands within each western
    township to support public schools in that township. In 1848, the federal
    government doubled the lands granted to western states, and it did so
    again by 1910, with the accession of Utah, Arizona, and New Mexico to
    statehood.2

    According to many state officials that we interviewed, many state trust
    lands are comparable in range condition, productivity, and land value to
    federal lands. For example, in some states, such as Wyoming and Oklahoma,
    state lands are intermingled with or adjacent to federal lands; thus the
    native characteristics of the lands are similar. In some cases, however,
    federal and state lands are not comparable. For example, in Oregon much of
    the federal land is forested, while much of the state land is rangeland.

    Generally, the states charge a fee per AUM. In fiscal year 2004, the
    western states charged grazing fees ranging from a low of $1.35 per AUM
    for some lands in California to $80 per AUM in parts of Montana. As shown
    in table 18, the majority of the western states use a market or
    market-based approach to set grazing fees. Specifically, six states
    (Montana, Nebraska, New Mexico, North Dakota, Oklahoma, and South Dakota)
    offer their leases to the highest bidder through a competitive process,
    and six states

    1The western states predominantly maintain grazing data by fiscal year.
    However, several states (Colorado, Idaho, North Dakota, Oklahoma, Oregon,
    South Dakota, and Washington) maintain some grazing data by fiscal year
    and some by calendar year.

    2Originally, with the Land Ordinance, the number 16 lots of every township
    were reserved for that township. In 1848, the act establishing Oregon gave
    states in the Northwest territory sections 16 and 36 in each township. In
    1894, Utah, followed in 1910 by Arizona and New Mexico, entered the nation
    with two additional sections reserved in each township, sections 2 and 32.
    In addition to lands granted for schools, states could set aside
    additional trust lands to generate revenue for broader purposes, such as
    supporting universities, hospitals, and other public buildings.

                  Appendix VI Western State Grazing Fees and Formulas

    (Arizona, California, Colorado, Texas, Washington, and Wyoming) use
    market-based approaches that rely on regional market rates, land
    appraisals, or formulas that adjust the market price for grazing by
    factors that account for differences between state and private lands and
    livestock market conditions. Three states (Idaho, Oregon, and Utah) use
    formulas that do not start with a market price for private lands, but
    instead use either a base fee, adjusted for livestock market and other
    factors, or a fixed percentage of livestock production value. Two states,
    Nevada and Kansas, allow some grazing on lands managed by other state
    agencies, but they do not allow grazing on state trust lands and are
    therefore not included in this appendix.

    Table 18: Information on State Lands Used for Grazing, Revenues, and
    Fee-Setting Approach in 17 Western States, Fiscal Year 2004a

                                                                      Grazing fee
                                   State lands State lands Total revenue (per AUM
                       managed allocated for Total revenue from related to unless

    State (acres) grazing (acres) state lands grazing noted) Approach to
    setting fee

         Arizona    9,300,000 8,300,000 $145,600,000 $2,200,000 $2.23
                                                     Market-based appraisal with
                                                                annual adjustment
        California                                     8,000 1.35 to 12.50 Market
                     470,000   13,000      6,200,000      based on average rates;
                                                             fee varies by county
         Colorado                                    4,730,000 6.65 to 8.91
                    3,000,000 2,400,000   36,450,000 Market-based formula; fee
                                                           varies by region
          Idaho     2,400,000 1,900,000   65,560,000 1,630,000 5.15 Formula
                                                     similar to federal fee
         Kansasb            b         b            b b b No grazing on state land
                                                                           office
                                                                lands
                                                          5,500,000 5.48 to 80.00
         Montana                                          Market with minimum bid
                    5,100,000 4,250,000   75,700,000                       ($5.48
                                                               per AUM)
         Nebraska                                     10,000,000 16.00 to 28.00
                    1,450,000 1,200,000   20,000,000   Market with minimum bid
                                                           (minimum fee varies by
                                                                          region)
         Nevadac                      0            c c c No grazing on state land
                        3,000                                              office
                                                                lands
                                                          7,630,000 0.71 to 10.15
        New Mexico                                        Market with minimum bid
                    9,000,000 8,700,000  278,700,000                       ($4.22
                                                         (per acre) per AUM)
    North Dakota                                  Unknownd 1.73 to 19.69
                     710,000   690,000     4,600,000 Market with minimum bid
                                                          (per acre) (minimum fee
                                                                 varies by tract)
         Oklahoma                                    Unknownd 7.00 to 16.00
                     745,000   500,000     9,800,000 Market with minimum bid
                                                           (minimum fee varies by
                                                                          region)
                                                       300,000 4.32 Formula based
          Oregon    1,570,000  640,000       620,000                on production
                                                               factors

                  Appendix VI Western State Grazing Fees and Formulas

                             (Continued From Previous Page)

                                                                      Grazing fee
                                   State lands State lands Total revenue (per AUM
                       managed allocated for Total revenue from related to unless

    State (acres) grazing (acres) state lands grazing noted) Approach to
    setting fee

                                                          2,250,000 3.00 to 56.00
    South Dakota    770,000    750,000      3,000,000  Market with minimum bid
                                                                           ($9.00
                                                           (per acre) per AUM)
          Texas        750,000    550,000    365,000,000 1,200,000 4.16 to 12.50
                                                         Market-based appraisals
                                                             440,000 1.43 or 2.35
           Utah                                           Formula that is similar
                    3,500,000  3,000,000      52,500,000               to federal
                                                               fee formula
                                                             650,000 5.41 or 7.76
                                                         Market-based formula for
        Washington  3,000,000     850,000    210,000,000                   leases
                                                           or based on production
                                                                          factors
                                                               for permits
         Wyoming    3,600,000  3,500,000      92,900,000      4,180,000 4.13
                                                           Market-based formula
          Total                                            $40,700,000 $1.35 to
                    45,400,000 37,200,000 $1,366,600,000          80.00

    Source: State agencies (data); GAO (analysis).

    Note: Numbers may not total due to rounding.

    aThe western states predominantly maintain grazing data by fiscal year.
    However, several states (Colorado, Idaho, North Dakota, Oklahoma, Oregon,
    South Dakota, and Washington) maintain some grazing data by fiscal year
    and some by calendar year.

    bKansas does not manage any grazing on state trust lands.

    cThe Nevada Division of State Lands within the Nevada Department of
    Conservation and Natural Resources does not manage any grazing on its
    lands. While other state offices in Nevada do manage grazing on state
    lands, we did not collect these data.

    dNorth Dakota and Oklahoma do not know total grazing revenue because they
    do not separate grazing revenue from crop revenue.

    The states provided details about their approaches to setting grazing
    fees, as well as information on their lands and revenues collected.

    Arizona: In Arizona, the annual rental rate for grazing land is required
    to be the true value rental rate determined by the Arizona State Land
    Commissioner based on the recommendations of the grazing land valuation
    commission. In fiscal year 2004, the Arizona State Land Department charged
    $2.23 per AUM for grazing on lands that it manages. In 1996 the department
    appraised the true value of forage on trust land using the market and
    income approaches. According to Arizona officials, yearly adjustment to
    the appraised value is made based upon a factor that is the ratio between
    the 5 year new and old average prices of beef, as compiled by USDA's
    National Agricultural Statistics Service. Upon renewal, if multiple
    applications are filed for a lease, the current lessee can match competing
    bids. The department manages more than 9.3 million acres of land, of which
    more than 8.3 million acres were allocated for grazing in fiscal year
    2004. Total grazing receipts in fiscal year 2004 were about $2.2 million.

    Appendix VI Western State Grazing Fees and Formulas

    California: Upon receiving an application to lease lands, the California
    State Lands Commission is to appraise the lands and fix the annual rent;
    the total amount of the rental should not be in excess of the fair market
    value of the lands. In fiscal year 2004, the commission charged a range of
    fees, from $1.35 to $12.50 per AUM, for grazing on the lands that it
    manages. The commission establishes the grazing fees by calculating an
    average rate based on the rates charged by county agriculture
    commissioners or assessors and agricultural extension offices. If the
    total grazing fee for a lease is less than $500, as is often the case, a
    minimum rental fee of $500 per year is applied. The commission manages
    about 470,000 acres of surface land, of which almost 13,000 acres were
    allocated for grazing in fiscal year 2004. Total grazing receipts in
    fiscal year 2004 were about $8,000.

    Colorado: The Colorado State Board of Land Commissioners is to include
    lease rates that will promote sound stewardship and land management
    practices, long-term agricultural productivity, and community stability.
    In 2004, the state board charged between $6.65 and $8.91 per AUM for
    grazing on lands that it manages, depending on the region. The state board
    sets grazing fees on the basis of a 2004 statewide survey of private lease
    rates. The grazing fee is calculated for each region based on the average
    rate identified by the survey, then reduced by 35 percent to account for
    differences, such as fencing or water, between private and state lands.
    Each year since 2001, the state board has determined whether the fee
    should be adjusted up or down by 3 percent, depending on the Beef Price
    Index. The state board manages about 3 million acres of state land, of
    which about 2.4 million acres were allocated for grazing in 2004. Total
    grazing receipts in fiscal year 2004 were about $4.7 million.

    Idaho: The Idaho State Board of Land Commissioners may lease any portion
    of the state land at a rental amount fixed and determined by the board. In
    2004, the Idaho Department of Lands charged $5.15 per AUM for grazing on
    the lands that it manages. The board sets the grazing fee using a formula
    based on livestock market factors. The formula establishes the forage
    value for a given year based on four factors: the (1) forage value index
    for 11 western states; (2) beef cattle price index for 11 western states;
    (3) prices paid index for 11 western states; and (4) Idaho forage value
    index. The formula is then applied to a base value of $1.70, which was
    established in 1993 by the board. If the department receives more than one
    application for a lease, then it auctions the lease. The department
    manages about 2.4 million acres of land, of which about 1.9 million were
    allocated

    Appendix VI Western State Grazing Fees and Formulas

    for grazing in fiscal year 2004. Total grazing receipts in fiscal year
    2004 were about $1.6 million.

    Montana: The Trust Land Management Division of the Montana Department of
    Natural Resources and Conservation must lease tracts to the highest bidder
    unless the Board of Land Commissioners determines that the bid is not in
    the state's best interest, and the board may not accept a bid that is
    below full market value. The division used competitive bidding to collect
    between $5.48 and $80.00 per AUM for grazing on the lands that it manages
    in fiscal year 2004. If no bids are received, then the division issues the
    lease or permit at the minimum rate, which was $5.48 per AUM in fiscal
    year 2004, set by a fee formula. The formula establishes the minimum fee
    by multiplying the average price per pound for beef cattle in Montana by a
    multiplier of 7.54. The division manages about 5.1 million acres of land,
    of which more than 4.2 million acres were allocated for grazing in fiscal
    year 2004. Total grazing receipts in fiscal year 2004 were about $5.5
    million.

    Nebraska: In Nebraska, all school land is subject to lease at fair market
    rental as determined by the Board of Educational Lands and Funds. In
    fiscal year 2004, the board used competitive bidding to collect between
    $16 and $28 per AUM for grazing on the lands that it manages. The board
    sets minimum grazing fees by geographic area. It uses a formula that
    multiplies the available AUMs by private sector rates, and then adjusts
    the resulting per-acre rents downward to reflect fence and water
    improvements, which the lessees must provide. The board uses three data
    sources to determine private sector rates: (1) verified private sector
    rental contracts collected by its employees, (2) a questionnaire that the
    board sends to professional farm and ranch managers who have mandatory
    fiduciary responsibility to the landowners they represent, and (3) an
    annual study conducted by the University of Nebraska. The board gives the
    private contracts the most weight when determining the grazing fee. If
    more than one qualified bidder is interested in the lease, it is sold to
    the party bidding the highest cash bonus at auction. The board manages
    more than 1.4 million acres, of which about 1.2 million acres were
    allocated for grazing in fiscal year 2004. Total grazing receipts in
    fiscal year 2004 were about $10 million.

    New Mexico: In New Mexico, the Commissioner of Public Lands is to make
    rules and regulations for the control, management, disposition, lease, and
    sale of state lands. In fiscal year 2004, the New Mexico State Land Office
    charged a minimum of $4.22 per AUM for grazing on lands that it manages,
    and collected between $0.71 and $10.15 per acre, based on competitive
    bidding. Absent a competitive bid, the state land office sets an annual

    Appendix VI Western State Grazing Fees and Formulas

    grazing fee using a formula that multiplies a base value of $0.0474 by the
    carrying capacity of the land, the acreage, and the Economic Variable
    Index. This index is the ratio of the value of a state land office
    adjustment factor for that year to the value of that same adjustment
    factor calculated for the base year, 1987. The state land office manages
    about 9 million acres, of which about 8.7 million acres were allocated for
    grazing in fiscal year 2004. Total grazing receipts in fiscal year 2004
    were about $7.6 million.

    North Dakota: In North Dakota, the Board of University and School Lands is
    required to set the minimum rental for uncultivated and cultivated lands,
    which it sets for the purpose of public auction using a procedure called
    "the fair market value method," which it promulgated in 1989. In fiscal
    year 2004, the North Dakota State Land Department collected between $1.73
    and $19.69 per acre, based on competitive bidding at public auction, on
    grazing lands that it manages. The department accepts bids over a minimum
    fee that is set for each tract based on a county-by-county survey
    completed annually by USDA's National Agricultural Statistics Service. The
    department manages about 710,000 acres, of which about 690,000 acres were
    allocated for grazing in fiscal year 2004. The department does not know
    the total revenue related to grazing collected in fiscal year 2004 because
    they do not separate grazing and cropland revenues.

    Oklahoma: In Oklahoma, rentals are required to be determined by public
    auction. In 2004, the Oklahoma Commissioners of the Land Office used
    competitive bidding to collect between $7 and $16 per AUM for grazing on
    lands that it manages. The land office sets a minimum grazing fee based on
    appraisals, and the grazing leases are then auctioned and awarded to the
    highest bidder. The land office manages about 745,000 acres, of which
    about 500,000 were allocated for grazing in 2004. The land office does not
    know the total revenue related to grazing collected in fiscal year 2004
    because it does not separate grazing and cropland revenues.

    Oregon: The Oregon Department of State Lands may lease common school
    grazing lands subject to terms and conditions it sets or are otherwise
    legislated. In 2004, the department charged $4.32 per AUM for grazing on
    lands that it manages, using a formula that considers livestock production
    factors. The formula multiplies the (1) animal gain per month, fixed at 30
    pounds; (2) marketable calf crop, fixed at 80 percent; (3) the state share
    of the calf crop, fixed at 20 percent; and (4) average statewide calf
    sales price for the preceding year, from USDA's Oregon agricultural price
    data. This annual rental is determined by multiplying the AUM rental rate
    by the average annual base rate forage capacity in AUMs of each leasehold
    and

    Appendix VI Western State Grazing Fees and Formulas

    should be at least $100. The department is currently reconsidering
    Oregon's grazing fee formula and is comparing the formula with the grazing
    fee formulas in surrounding states. The department manages almost 1.6
    million acres, of which about 640,000 acres were allocated for grazing in
    2004. Total grazing receipts in fiscal year 2004 were about $300,000.

    South Dakota: In South Dakota, the Commissioner of School and Public Lands
    is to establish the minimum annual rental rate per acre, which is the rate
    at which bidding starts. In 2004, the South Dakota Office of School and
    Public Lands used competitive bidding to collect between $3 and $56 per
    acre on lands that it manages. The commissioner of the office sets a
    minimum grazing fee, $9 per AUM in 2004, using a formula that multiplies
    the nonweighted 5-year average price per pound of all calves sold in South
    Dakota by 425 pounds, the average calf weight. The number is then divided
    by 12 months and multiplied by a percentage set by the commissioner, 25
    percent in 2004. Once the minimum fee per AUM is established, the office
    divides the fee by the land's annual carrying capacity in order to
    establish a minimum per acre opening bid. The office manages about 770,000
    acres, of which about 750,000 acres were allocated for grazing in 2004.
    Total grazing receipts in fiscal year 2004 were about $2.25 million.

    Texas: The Texas General Land Office is to award leases to the highest
    responsible bidder. In fiscal year 2004, the land office charged between
    $4.16 and $12.50 per AUM for grazing on lands that it manages. For the
    most part, grazing fees are based on fair market value within the region.
    Staff members within the land office conduct on-site evaluations of state
    lands to assess the value of the lands and forage as a basis for the
    grazing fee, taking into consideration productivity, range condition,
    improvements, and location, among other factors. For those state lands
    without public access, the grazing fees may be negotiated based on the
    appraised rate with the adjacent landowner. The land office manages almost
    750,000 acres, of which almost 550,000 acres were allocated for grazing in
    fiscal year 2004. Total grazing receipts in fiscal year 2004 were about
    $1.2 million.

    Utah: The Director of the Utah School and Institutional Trust Lands
    Administration is required to base the grazing fee on the fair market
    value of the permit. In fiscal year 2004, the Utah School and
    Institutional Trust Lands Board of Trustees used a formula to charge $1.43
    or $2.35 per AUM for grazing on lands that it manages. The board initially
    used the federal fee as the base rate for the state fee, but it now
    establishes the state fee by adjusting the previous year's fee up or down,
    based on the 7-year trend of local prices for cattle, sheep, wool, and
    hay. The fees on state trust lands

    Appendix VI Western State Grazing Fees and Formulas

    are typically about 60 to 90 cents more than the federal grazing fee:
    $2.25 in fiscal year 2004 plus a fee of 10 cents for weed and insect
    control. When a permit is up for renewal, ranchers or other interested
    parties, in addition to the current lessee, can submit bonus bids on the
    permit, but the current lessee has the right to match the bonus bid. On
    lands gained through land exchanges with the federal government, the
    federal grazing fee applies: $1.43 per AUM in fiscal year 2004. The Utah
    School and Institutional Trust Lands Administration is proposing that the
    Utah fees be increased over the next 3 to 5 years using a two-fee
    structure that will increase the fee to $3.80 per AUM on trust lands that
    are intermingled with BLM lands and to $7 per AUM on other trust lands.
    The board manages about 3.5 million acres of land, of which about 3
    million acres were allocated for grazing in fiscal year 2004. Total
    grazing receipts in fiscal year 2004 were about $440,000.

    Washington: The Washington State Department of Natural Resources has
    responsibility for issuing rules for the grazing of livestock and is to
    charge such fees as it deems adequate and advisable. In 2004, the
    Washington State Department of Natural Resources charged $5.41 per AUM3
    for range permits and $7.76 per AUM for grazing leases on lands that it
    manages. Range permits provide only the right to forage over a large area
    of land for a limited period of time each year, whereas grazing leases
    provide full leasehold rights, including control of the land. The fee for
    the range permits is set by a formula that considers several factors,
    including average livestock weight gain and livestock prices. The fee for
    the grazing leases is based on a 5-year rolling average of private fees,
    adjusted downward to account for higher operating costs on state lands,
    since the state provides no fences or other on-site services. The
    department manages about 3 million acres of trust lands, of which almost
    850,000 acres were allocated for grazing in 2004. Total grazing receipts
    from range permits and grazing leases in fiscal year 2004 were almost
    $650,000.

    Wyoming: In Wyoming, the rental of any lease awarded is to be based on an
    economic analysis and must reflect at least the fair market value for the
    same or similar use of the land based upon a formula adopted by the Board
    of Land Commissioners. In fiscal year 2004, the Wyoming Office of State
    Lands and Investments charged $4.13 per AUM for grazing on lands that it
    manages. The grazing fee is established by a formula that multiplies the
    average private land lease rate per AUM for the 5 years preceding the

    3This was the fee per AUM for cattle; for sheep, the grazing fee for range
    permits was $1.27 per AUM in 2004.

    Appendix VI Western State Grazing Fees and Formulas

    current year, as estimated by the Wyoming Agricultural Statistics Service,
    by the 5-year weighted average parity ratio for beef cattle, as
    established by the National Agricultural Statistics Service, to adjust for
    changing resource conditions, market demand, and industry viability. The
    rate is then discounted by 20 percent to reflect lessee contributions. If
    the office receives an application for a lease at a higher amount, then
    the present lessee has the right to match the bid. The office manages
    about 3.6 million acres, of which about 3.5 million acres are used for
    grazing, including hay land. Total grazing receipts in fiscal year 2004
    were almost $4.2 million.

                                      Appendix VII

                        Comment from Department of the Interior

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix. (Page references in the letter may differ.)

    See comment 1.

    See comment 2.

    Appendix VII
    Comment from Department of the Interior

                                     See comment 3.

                                     See comment 4.

                                     See comment 5.

                                      Appendix VII
                        Comment from Department of the Interior

    The following are GAO's comments on the Department of the Interior's
    letter dated September 6, 2005.

    GAO Comments 1.

    2.

    3.

    4.

    5.

    We disagree. The information in the report accurately and sufficiently
    reflects the information provided by BLM in many different documents and
    during multiple meetings with rangeland management officials regarding the
    benefits from the grazing program to local economies and ranchers.
    However, the information provided by BLM in these many meetings and
    documents did not refer to any indirect benefits that accrue to other BLM
    programs from the grazing program. While Interior's letter states that
    such significant indirect benefits exist, it does not provide any detail
    on the nature of these benefits; and therefore, we have not made any
    modifications to the report.

    We changed the text to add the definition of a water base.

    We met with attorneys and staff from BLM and Interior's Office of the
    Solicitor on August 4, 2005, and have removed the footnote to which
    Interior refers in its comments.

    In this section, we are not discussing the purpose of the fee and the
    grazing fee formula. Rather, we are observing that the fee formula
    includes factors that incorporate ranchers' ability to pay (BCPI and PPI).
    We agree that other factors, such as access to public lands, enable
    ranchers to stay in production and therefore clarified the language,
    accordingly.

    We disagree that a comparison of alternative fee structures is useless. It
    is useful to explicitly and periodically examine the implications of
    different policy choices as they relate to grazing fees and to consider
    alternative fee options. Our discussion of the McGregor Range is in the
    context of a broader discussion of competitive bidding and fees on BLM and
    Forest Service lands. That discussion clearly and carefully recognizes the
    impediments to establishing such a system. In particular, we recognize
    that such a system would only be established if the purpose of the program
    and fee were different from those which currently exist. BLM provided text
    to clarify the mixed ownership of McGregor Range, which we included in
    appendix V.

                                     Appendix VIII

                            Comments from the Forest Service

    Appendix IX

                         GAO Contact and Staff Acknowledgments

    Key Contact Robin Nazzaro, (202) 512-3841

    Staff 	In addition to the contact named above, Andrea Brown, Susan Iott,
    Mehrzad Nadji, Tony Padilla, Lesley Rinner, Carol Herrnstadt Shulman,

    Acknowledgments	Pam Tumler, and Amy Webbink made significant contributions
    to this report. In addition, Denise Fantone, Barry Hill, Miguel Lujan,
    Anne Rhodes-Kline, and Jack Warner made important contributions to the
    methodologies used in this report.

    Related Products

    Grazing Reports	Large Grazing Permits. GAO/RCED-93-190R (Suppl.).
    Washington, D.C.: July 16, 1993.

    Large Grazing Permits. GAO/RCED-93-190R. Washington, D.C.: June 25, 1993.

    Rangeland Management: Profile of the Forest Service's Grazing Allotments
    and Permittees. GAO/RCED-93-141FS. Washington, D.C.: April 28, 1993.

    Rangeland Management: BLM's Range Improvement Project Data Base Is
    Incomplete and Inaccurate. GAO/RCED-93-92. Washington, D.C.: April 5,
    1993.

    Rangeland Management: Profile of the Bureau of Land Management's Grazing
    Allotments and Permits. GAO/RCED-92-213FS. Washington, D.C.: June 10,
    1992.

    Rangeland Management: Results of Recent Work Addressing the Performance of
    Land Management Agencies. GAO/T-RCED-92-60. Washington, D.C.: May 12,
    1992.

    Rangeland Management: Assessment of Nevada Consulting Firm's Critique of
    Three GAO Reports. GAO/RCED-92-178R. Washington, D.C.: May 4, 1992.

    Grazing Fees: BLM's Allocation of Revenues to Montana Appears Accurate.
    GAO/RCED-92-95. Washington, D.C.: March 11, 1992.

    Rangeland Management: Interior's Monitoring Has Fallen Short of Agency
    Requirements. GAO/RCED-92-51. Washington, D.C.: February 24, 1992.

    Rangeland Management: BLM's Hot Desert Grazing Program Merits
    Reconsideration. GAO/RCED-92-12. Washington, D.C.: November 26, 1991.

    Rangeland Management: Comparison of Rangeland Condition Reports.
    GAO/RCED-91-191. Washington, D.C.: July 18, 1991.

    Rangeland Management: Current Formula Keeps Grazing Fees Low.
    GAO/RCED-91-185BR. Washington, D.C.: June 11, 1991.

    Related Products

    Rangeland Management: Forest Service Not Performing Needed Monitoring of
    Grazing Allotments. GAO/RCED-91-148. Washington, D.C.: May 16, 1991.

    Rangeland Management: BLM Efforts to Prevent Unauthorized Livestock
    Grazing Need Strengthening. GAO/RCED-91-17. Washington, D.C.: December 7,
    1990.

    Rangeland Management: Improvements Needed in Federal Wild Horse Program.
    GAO/RCED-90-110. Washington, D.C.: August 20, 1990.

    Management of the Public Lands by the Bureau of Land Management and the
    U.S. Forest Service. GAO/T-RCED-90-24. Washington, D.C.: February 6, 1990.

    Change in Approach Needed to Improve the Bureau of Land Management's
    Oversight of Public Lands. GAO/T-RCED-89-23. Washington, D.C.: April 11,
    1989.

    Management of Public Rangelands by the Bureau of Land Management.
    GAO/T-RCED-88-58. Washington, D.C.: August 2, 1988.

    Public Rangelands: Some Riparian Areas Restored but Widespread Improvement
    Will Be Slow. GAO/RCED-88-105. Washington, D.C.: June 30, 1988.

    Rangeland Management: More Emphasis Needed on Declining and Overstocked
    Grazing Allotments. GAO/RCED-88-80. Washington, D.C.: June 10, 1988.

    Rangeland Management: Profiles of Federal Grazing Program Permittees.
    GAO/RCED-86-203FS. Washington, D.C.: August 12, 1986.

    Rangeland Management: Grazing Lease Arrangements of Bureau of Land
    Management Permittees. GAO/RCED-86-168BR. Washington, D.C.: May 30, 1986.

    Public Rangeland Improvement-A Slow, Costly Process in Need of Alternate
    Funding. GAO/RCED-83-23. Washington, D.C.: October 14, 1982.

                                    Related Products

    User Fee Reports	User Fees: DOD Fees for Providing Information Not Current
    and Consistent. GAO-02-34. Washington, D.C.: October 12, 2001.

    Federal User Fees: Some Agencies Do Not Comply with Review Requirements.
    GAO/GGD-98-161. Washington, D.C.: June 30, 1998.

    Federal User Fees: Budgetary Treatment, Status, and Emerging Management
    Issues. GAO/AIMD-98-11. Washington, D.C.: December 19, 1997.

    GAO's Mission	The Government Accountability Office, the audit, evaluation
    and investigative arm of Congress, exists to support Congress in meeting
    its constitutional responsibilities and to help improve the performance
    and accountability of the federal government for the American people. GAO
    examines the use of public funds; evaluates federal programs and policies;
    and provides analyses, recommendations, and other assistance to help
    Congress make informed oversight, policy, and funding decisions. GAO's
    commitment to good government is reflected in its core values of
    accountability, integrity, and reliability.

    Obtaining Copies of The fastest and easiest way to obtain copies of GAO
    documents at no cost

    is through GAO's Web site (www.gao.gov). Each weekday, GAO postsGAO
    Reports and newly released reports, testimony, and correspondence on its
    Web site. To Testimony have GAO e-mail you a list of newly posted products
    every afternoon, go to

    www.gao.gov and select "Subscribe to Updates."

    Order by Mail or Phone	The first copy of each printed report is free.
    Additional copies are $2 each. A check or money order should be made out
    to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
    Orders for 100 or more copies mailed to a single address are discounted 25
    percent. Orders should be sent to:

    U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
    D.C. 20548

    To order by Phone:	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
    512-6061

    To Report Fraud, Contact:
    Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm

    E-mail: fraudnet@gao.govFederal Programs Automated answering system: (800)
    424-5454 or (202) 512-7470

    Congressional	Gloria Jarmon, Managing Director, JarmonG@gao.gov (202)
    512-4400 U.S. Government Accountability Office, 441 G Street NW, Room 7125

    Relations Washington, D.C. 20548

    Public Affairs	Paul Anderson, Managing Director, AndersonP1@gao.gov (202)
    512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
    Washington, D.C. 20548
    *** End of document. ***