Public Timber: Federal and State Programs Differ Significantly in Pacific
Northwest (Letter Report, 05/23/96, GAO/RCED-96-108).

Pursuant to a congressional request, GAO compared the timber sale
programs of the Bureau of Land Management and Forest Service with those
of Washington and Oregon, focusing on: (1) the major differences between
the programs; and (2) how these differences affect agency and state
planning processes.

GAO found that: (1) the states' timber sale programs are tailored to
generate timber production revenues for funding of schools and counties;
(2) federal legislation requires agencies to manage their lands for the
public benefit, regulate timber harvests and protect other resources,
and develop detailed management plans; (3) the states adjust the amount
of timber they sell to take advantage of market prices; (4) the agencies
sell a steady amount of timber regardless of market forces; (5) the
states' timberlands are generally available for timber production,
contain only second-growth forests, and have road systems; (6) national
forests are not exclusively available for timber production, contain
old-growth and second-growth forests, and have road networks and
exclusive wilderness areas; (7) the states' timber sales are funded by a
legislatively specified percentage of gross timber sale receipts; (8)
federal timber sale programs are funded by annual appropriations; (9)
the states' long- and short-term planning processes are relatively short
and involve generally fewer people than the federal agencies'; (10)
federal agencies must develop various alternative plans, satisfy
conflicting interests, incorporate the public's input, redevelop or
review their plans on a regular basis, and face legal obstacles; and
(11) modifying the agencies' timber sales programs to resemble the
states' programs would require significant program structural changes
and consideration of how to best balance the goals of multiple resource
uses.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-96-108
     TITLE:  Public Timber: Federal and State Programs Differ 
             Significantly in Pacific Northwest
      DATE:  05/23/96
   SUBJECT:  Forest management
             Forest conservation
             Forest products
             National forests
             Timber sales
             Renewable natural resources
             Environmental policies
             Forestry legislation
             Comparative analysis
             State programs
IDENTIFIER:  Washington
             Oregon
             Pacific Northwest Forest Plan
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on Resources, House of
Representatives

May 1996

PUBLIC TIMBER - FEDERAL AND STATE
PROGRAMS DIFFER SIGNIFICANTLY IN
PACIFIC NORTHWEST

GAO/RCED-96-108

Federal and State Timber Sales Programs Differ

(140529)


Abbreviations
=============================================================== ABBREV

  GAO -
  BLM -

Letter
=============================================================== LETTER


B-271665

May 23, 1996

The Honorable Don Young
Chairman, Committee on Resources
House of Representatives

Dear Mr.  Chairman: 

The Bureau of Land Management (BLM), within the Department of the
Interior, and the Forest Service, within the U.S.  Department of
Agriculture, manage 12.5 million acres of timberland in the states of
Washington and Oregon.\1 This acreage accounts for 37.7 percent of
the available timberland in those states.  In recent years, the
volumes of timber sold and harvested from these federal timberlands
have decreased because of the increased efforts to protect habitat
for threatened and endangered species and to achieve a better balance
of multiple resource uses. 

However, the costs of federal timber sale programs have not decreased
proportionately, and recent studies and testimony before
congressional committees have suggested that some states operate
their timber sale programs at less cost than the federal agencies. 
As part of an ongoing effort to reduce federal spending, you asked us
to compare the timber sale programs of the two federal agencies with
those of the states.  Specifically, this report identifies (1) the
major differences among the timber programs of the Forest Service's
Pacific Northwest Region, the Bureau of Land Management, and the
states of Washington and Oregon and (2) the effect of these
differences on the agencies' planning processes. 


--------------------
\1 Timberland is land that is producing or capable of producing crops
of industrial wood (i.e., more than 20 cubic feet per acre per year),
is not withdrawn from timber utilization by law or regulation, and
represents the land potentially available for harvesting timber
resources. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Although the federal and state timberlands in Washington and Oregon
are often adjacent and appear to have some similar characteristics,
such as species of trees and growing conditions, significant
differences in the legislative and regulatory guidance, types of
timberlands, and sources of funding affect the management of these
lands: 

  -- Legislative and regulatory guidance.  The primary legislative
     goal of the two states is to maximize revenues over the long
     term to benefit the schools and counties within the states.  In
     contrast, federal legislation and regulations generally require
     the federal agencies to manage timberlands for multiple resource
     uses. 

  -- Types of timberlands.  State timberlands usually contain
     second-growth forests (areas that have been harvested and
     reforested) and have existing roads.  Federal timberlands
     usually contain second-growth forests interspersed with
     old-growth forests, wilderness, and roadless areas.  Federal
     protection of old-growth forests and wildlife habitat has
     brought about reductions in federal timber sales, leading to
     conflicts among various segments of the public that favor
     certain uses over others. 

  -- Sources of funding.  The two states' timber sale programs rely
     for their funding on a designated percentage of their gross
     sales receipts, thus providing them with an incentive to control
     program costs and to increase revenues.  The federal agencies,
     on the other hand, rely on annual appropriations, and no
     connection exists between timber sale receipts and the funding
     available for sale programs. 

The underlying differences in the legislative and regulatory
guidance, types of timberlands, and sources of funding are reflected
in the federal and state agencies' processes for long- and short-term
planning.  The states obtain public consensus on the goals and
objectives to be attained on state lands on the basis of their
legislative guidance and then manage these lands according to those
goals.  The federal agencies have a much longer and more complex
planning process that involves the public at every stage of the
process for timber sales.  Because the states' timberlands are
primarily second-growth forests and are less controversial than
federal old-growth forests, the state agencies are able to prepare
timber sales in a much shorter time than the federal agencies.  In
addition, the state agencies do not provide for administrative
appeals, whereas the federal agencies do. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Forest Service and BLM manage timber programs on federal lands in
the Pacific Northwest states of Washington and Oregon.  These federal
timberlands are often adjacent to state timberlands and share certain
characteristics, such as prevailing climate, terrain, and species of
trees.  The Forest Service's Pacific Northwest Region includes 19
national forests in Washington and Oregon; BLM's timberlands are
primarily in western Oregon.  State timberlands are administered by
the Washington Department of Natural Resources and the Oregon
Department of Forestry.  Table 1 shows the acres of timberland
managed by the federal and state agencies, in addition to those owned
by the private sector. 



                                Table 1
                
                 Timberland Ownership in Washington and
                                 Oregon

                          (Acres in thousands)

                                                               Percent
                                Washingt               Total  of total
Ownership                             on    Oregon     acres     acres
------------------------------  --------  --------  --------  --------
Forest Service/BLM                 3,694     8,822    12,516      37.7
State/county                       2,255       875     3,130       9.4
Private                            8,952     8,609    17,562      52.9
======================================================================
Total timberlands                 14,901    18,306    33,208     100.0
----------------------------------------------------------------------
Source:  Forest Resources of the United States, 1992, BLM's Oregon
State Office, and the Forest Service's Pacific Northwest Region. 

Although the federal agencies manage four times as much timberland
acreage as the two states, for the past several years the states have
sold about the same amount of timber as the federal agencies. 
Because of lawsuits and the resulting injunctions on federal timber
sales and of increased efforts to balance multiple resource uses, the
Forest Service and BLM had fewer timber sales than in the late 1980s. 

Beginning in the early 1990s, lawsuits and subsequent court
injunctions to protect the habitat of the northern spotted owl and to
preserve the remaining old-growth forests halted most timber sales on
federal lands in the Pacific Northwest.  To break this impasse, the
President convened an interagency team tasked with developing land
management alternatives for the federal lands within the current
range of the northern spotted owl.  According to the guiding
principles of the interagency team, the alternatives developed should
both attain the greatest economic and social contributions from the
forests and meet the requirements of the applicable laws and
regulations.  While the resulting "Pacific Northwest Forest Plan" was
accepted by the federal courts and the injunctions were lifted in
1994, additional challenges to the plan have since emerged. 

The volumes of timber sold in fiscal years 1993 through 1995 for the
four agencies are shown in table 2. 



                                Table 2
                
                Volumes of Timber Sold in Washington and
                                 Oregon

                        (Board feet in millions)

                        Washington      Oregon
                        Department  Department
                        of Natural          of                  Forest
Fiscal year              Resources    Forestry         BLM     Service
----------------------  ----------  ----------  ----------  ----------
1993                         535.0        33.9        50.7       786.9
1994                         357.0       117.7        14.4       433.8
1995                         607.0       118.3       124.2       401.0
======================================================================
Total                      1,499.0       269.9       189.3     1,621.7
----------------------------------------------------------------------
Source:  Washington Department of Natural Resources, Oregon
Department of Forestry, BLM's Oregon State Office, and the Forest
Service's Pacific Northwest Region. 


   MAJOR DIFFERENCES BETWEEN
   FEDERAL AND STATE TIMBER
   PROGRAMS
------------------------------------------------------------ Letter :3

Federal and state timber programs differ in their legislative and
regulatory guidance, in the types of timberlands managed, and in
their sources of funding.  Both the Forest Service and BLM generally
manage their lands under laws that emphasize multiple resource uses,
such as timber, fish and wildlife, and recreation.  Washington's and
Oregon's legislation emphasizes timber production in order to
maximize revenues over the long term to benefit the schools and
counties within the states.  State lands generally have second-growth
forests, whereas federal timberlands contain a mixture of
second-growth and old-growth forests with portions set aside for
wilderness and roadless areas.  Unlike in the states' timber
programs, no clear linkage exists between the receipts of federal
timber sales and the sources of funding for those sales, thus
removing an important incentive to increase receipts and decrease
costs. 


      FEDERAL AND STATE TIMBER
      PROGRAMS OPERATE UNDER
      DIFFERENT LEGISLATIVE AND
      REGULATORY GUIDANCE
---------------------------------------------------------- Letter :3.1

Although Washington and Oregon manage their timberlands to provide
multiple resources, the states' legislation emphasizes timber
production to maximize revenues over the long-term for the schools
and counties.  The beneficiaries of the timber revenues are
determined by the way in which the state acquired the land.  "Common
school lands"--those federal lands granted to the states when they
achieved statehood--were intended as a source of revenue to support
the states' schools and colleges.  "Forest board lands"--those
generally private lands harvested in the early 1900s and later
transferred to the states when the private landowners could not pay
the property taxes--were intended to generate revenues for the
counties within which they are located.  Because the schools and
counties receive up to 75 percent of all gross timber receipts from
state lands, they have pressured the states to increase timber
harvests and thereby increase their revenues. 

The Multiple-Use, Sustained Yield Act of 1960 (16 U.S.C.  528-531)
requires that the national forests be managed on a multiple-use,
sustained-yield basis.  The Forest Service's regulations require that
these lands be managed to produce the greatest "net public benefit."
Subsequent legislation required the Forest Service to develop
detailed management plans for the national forests; regulate timber
harvests to ensure the protection of other resources; and allow the
public to participate in the development, review, and revision of the
forest plans.\2

Although the laws, regulations, and guidelines provide a framework
for the federal timber sale and management processes, many Forest
Service officials believe that this framework provides little
guidance on how to balance the forests' competing uses or to ensure
their sustainability.  Moreover, Forest Service officials believe
that the agency's decision-making process has become increasingly
difficult because of the need to consider other statutory
requirements, such as the Endangered Species Act.\3

BLM manages its lands under the Federal Land Policy and Management
Act of 1976 (43 U.S.C.  1701 et seq.), which establishes that BLM
should manage its lands on a multiple use basis.  However, the
exception to the statutory requirements that both the Forest Service
and BLM manage federal timberlands on a multiple use basis affects
2.6 million acres of Oregon and California Railroad (O&C) lands in
western Oregon that BLM and the Forest Service manage.\4 The relevant
legislation--the Oregon and California Sustained Yield Act of 1937
(43 U.S.C.  1181a et seq.)--provides a more narrow focus to emphasize
timber production with a sustained yield for such purposes as
providing a permanent source of timber supply and contributing to the
economic stability of local communities and industries. 

Even when the legislation clearly directs the agencies to manage
these lands with an emphasis on timber, other statutory
requirements--such as the Endangered Species Act --may still affect
timber production.  For example, although the United States Court of
Appeals for the Ninth Circuit confirmed the O&C act's dominant use as
timber in 1990,\5 the timber harvests on those lands have continued
to fall since that decision.  During the period from 1983 through
1990, the annual timber harvests from BLM's O&C lands averaged more
than 1.1 billion board feet per year.  With the listing of the
northern spotted owl and two injunctions ordered by the U.S. 
District Court in Oregon, the timber harvests had fallen to less than
100 million board feet in fiscal year 1995, or less than 10 percent
of the harvests in the earlier period.  In addition, it does not
appear that the former harvest level will be achieved again since,
under the Pacific Northwest Forest Plan, all of BLM's and the Forest
Service's lands were treated as one unit and areas were set aside for
specific land uses--such as timber production, ecosystem
preservation, and aquatic conservation--thereby reducing the lands
available for timber production.\6

Another difference in legislative and regulatory guidance between the
federal and state agencies is timber sale goals or targets.  The
federal agencies often have national timber sale targets that clearly
express congressional expectations as to how much timber the federal
agencies are expected to offer for sale in any year or period of
years.  Furthermore, according to both Forest Service and BLM
officials, federal policy has been to offer timber on an even-flow
basis to help provide a stable supply of timber.  On the other hand,
the states do not have annual timber sale targets.  According to
state officials, the absence of such annual targets allows them to
offer timber sales so as to take advantage of changes in timber
prices.  They increase timber sales when prices rise and reduce the
number of sales when prices fall so as to maximize long-term
revenues. 


--------------------
\2 The Forest and Rangeland Renewable Resources Planning Act of 1974
(16 U.S.C.  1600-1614), as amended by the National Forest Management
Act of 1976 (16 U.S.C.  1601 et seq.). 

\3 Forest Service:  Issues Relating to Its Decision Making Process
(GAO/T-RCED-96-66, Jan.  25, 1996). 

\4 This acreage represents almost all of BLM's timberlands in western
Oregon. 

\5 Headwaters, Inc.  v.  Bureau of Land Management Medford District,
914 F.2d 1174, 1183 (1990). 

\6 In Seattle Audubon Society v.  Lyons (W.D.  Wash.  1994), 871 F. 
Supp.  1291, 1313, a federal district court held that the Secretary
of the Interior has the management discretion to include the O&C
lands within the Pacific Northwest Forest Plan, even though the O&C
act makes timber production the dominant use on O&C lands. 
Consequently, the Secretary included the O&C lands in the plan. 


      CHARACTERISTICS OF FEDERAL
      AND STATE TIMBERLANDS ARE
      BASICALLY DIFFERENT
---------------------------------------------------------- Letter :3.2

Despite the appearance of similarities--such as geographic location,
species of trees, and growing conditions--several basic differences
between federal and state timberlands affect the timber programs on
these lands.  For example, state lands, for the most part, do not
contain old-growth forests because they have already been harvested. 
Rather, they generally have second-growth forests with existing road
systems, and relatively few areas have been withdrawn from timber
use.  On the other hand, federal lands include both old-growth and
second-growth forests, roadless and wilderness areas, and other areas
set aside for other uses, such as recreation.  Because most of the
remaining old-growth forests in the Pacific Northwest are on federal
lands and because these lands provide habitat for threatened and
endangered species, the federal agencies must take additional steps
to protect these remaining old-growth forest areas. 


      FUNDING OF FEDERAL AND STATE
      TIMBER PROGRAMS DIFFERS
---------------------------------------------------------- Letter :3.3

The timber programs on Washington's and Oregon's timberlands are
funded by a legislatively specified percentage of gross timber sale
receipts--generally from 25 to 36 percent.  Although the states are
restricted to a preset percentage of total receipts, they have the
same major cost categories as the federal agencies, including
long-term and timber sale planning, sales preparation, contract and
harvest administration, reforestation, and subsequent timber stand
management activities, such as fertilization and thinning.  Neither
Washington nor Oregon receives any additional funding or supplemental
appropriations to cover the expenses of managing the states'
timberlands.  According to state officials, this funding approach
encourages them to actively market timber to increase revenues and to
reduce timber-related expenditures to control costs. 

Unlike the states, the federal agencies are not required to cover the
costs of their timber sale programs with the associated receipts.  To
cover their timber program costs, federal agencies rely primarily on
annual appropriations.\7

Because no clear linkage exists between the receipts from timber
sales and the funding associated with the programs, there is little
incentive to control costs or increase revenues.  In addition, the
performance measures for the federal agencies are based on the
volumes of timber offered for sale, not the actual amounts sold. 


--------------------
\7 Appropriations to cover the costs of the timber sale programs are
based on such criteria as the anticipated volumes of timber to be
offered for sale or the number of acres to be reforested. 


   DIFFERENCES BETWEEN FEDERAL AND
   STATE TIMBER PROGRAMS ARE
   REFLECTED IN PLANNING PROCESS
------------------------------------------------------------ Letter :4

The underlying differences in the legislative and regulatory
guidance, types of timberlands, and sources of funding are reflected
in the agencies' planning processes.  While the states have developed
shorter planning processes that satisfy their legal requirements and
get the job done quickly, the federal planning processes are more
lengthy and expensive.  In order to comply with other federal
statutory requirements--such as the National Environmental Policy Act
or the Endangered Species Act--the federal agencies spend
considerably more time and resources on both long- and short-term
planning.  Still, their decisions are challenged more frequently than
those made by the states. 


      STATE PLANNING PROCESSES ARE
      SHORTER THAN FEDERAL ONES
---------------------------------------------------------- Letter :4.1

The states' long- and short-term planning processes take less time
than the federal processes.  Washington's and Oregon's long-term
planning processes, though emphasizing the maximum amount of
revenues, include the public's participation to agree on the overall
goals for the forests.  The states' long-term plans provide
information on how the states will manage the multiple resources on
their forest lands, yet they still emphasize timber production to
maximize revenues.  For example, Oregon obtains the public's input to
help develop the guiding principles, goals, and objectives of the
state's forests.  Once these underlying principles are incorporated
into the long-term plan, the agency manages the lands accordingly. 

Washington also seeks the public's input to its long-term planning
process, especially when the state recognizes a controversial
situation on its lands.  For example, when developing the goals for
the use of the Loomis State Forest, Washington requested the public's
input on how to balance the goals of timber production with the
protection of wildlife habitat.  More importantly, the long-term
plans for both states remain in effect until major changes occur,
such as natural disasters that destroy large areas of the forests. 

In contrast, the federal agencies, as required by the legislation and
regulations, develop various land management alternatives in their
long-term planning to address issues of public concern, such as the
protection of wildlife habitat.  According to federal officials,
developing a set of alternatives rather than one management plan is
time consuming, as the federal agencies seek to satisfy numerous
conflicting interests.  Unlike the states' long-term plans, which
remain in effect until a major change occurs, the Forest Service's
land management plans must be revised at least every 15 years, while
BLM's plan establishes regular review periods.  In addition, while
the public's input to the states' plans ends with the completion of
the long-term plans, the public's input into federal decisions
continues after the long-term plans are completed and into the
planning for individual timber sales.  This continuous involvement by
the public lengthens the planning process, as the federal agencies
attempt to respond to the public's comments on their decisions. 

Both the federal and state agencies use their long-term land
management plans as a framework for short-term planning, such as
timber sales.  The states' individual timber sales are based on the
annual timber plans derived from the states' long-term planning
documents.  Normally, in selecting the sites for potential timber
sales, the states try to avoid selecting the areas that include
wildlife habitat.  However, when the states want to offer timber
sales in such areas, they identify the prospective timber sales 2
years in advance to allow time for the necessary wildlife surveys. 
The states do not begin to prepare timber sales until these wildlife
surveys are completed.  Thereafter, the states generally can prepare
timber sales in 3 to 4 months, which enables them to be more
responsive to their customers and to schedule their sales to respond
to changes in the prices of timber. 

The federal agencies' individual timber sales are based on a timber
sale schedule--covering 5 years for BLM and 10 years for the Forest
Service--developed from the agencies' long-term land management
plans.  Preparing a BLM timber sale, which includes planning, site
preparation, and appraisal, can take 2 to 3 years; the Forest
Service's process can take 3 to 8 years.  Although BLM's process is
shorter than the Forest Service's, it still is longer than the
states' processes.  Unlike the states, the federal agencies routinely
include required wildlife surveys as part of their timber sale
process.  According to federal officials, because the agencies are to
manage for multiple resource uses, it is difficult to get a consensus
on how to best manage forest lands and individual sales to achieve a
net public benefit.  In addition, obtaining the public's comments on
timber sales and complying with numerous laws and regulations
contribute to the longer federal process. 

Federal and state timber management staffs are responsible for the
same range of activities within the timber sale process, yet the
state agencies complete the tasks with fewer people than the Forest
Service.  Although the federal agencies manage more timberlands in
the Pacific Northwest, in fiscal year 1995, the Forest Service's
Pacific Northwest Region sold less timber than the Washington
Department of Natural Resources; the Oregon Department of Forestry
and BLM sold similar amounts of timber.  Yet at the end of fiscal
year 1995, the Forest Service's Pacific Northwest Region had 2,330
timber management staff, BLM had 222, Washington had 322, and Oregon
had 219. 


      THE STATES' TIMBER SALES
      HAVE FEWER LEGAL CHALLENGES
      THAN FEDERAL SALES
---------------------------------------------------------- Letter :4.2

Regardless of the level of the public's participation in the long-
and short-term planning processes, both federal and state timber
sales can be subject to legal challenges.  In addition to lawsuits,
many of the Forest Service's timber sales are contested through its
administrative appeals process; the process is provided for in the
law.  According to one Forest Service official, appeals and
litigation can add from 4 months to 4 years to the timber sale
process. 

In an attempt to limit appeals and in order to comply with the
environmental laws, the Forest Service develops time-consuming and
expensive environmental impact statements for most timber sales. 
These environmental impact statements provide detailed information on
the proposed timber sale activities and their cumulative impacts on
the surrounding area and other resources.  BLM, however, prepares
these detailed analyses only for selected timber sales that could
have a high impact on the environment and prepares simpler and less
time-consuming environmental assessments for most timber sales.  BLM
prepares environmental impact statements for the overall management
plans and prepares supplemental environmental assessments for timber
sales to add the impacts not covered by the environmental impact
statements. 

Because neither Washington nor Oregon has an administrative appeals
process, challenges to their land management decisions or timber
sales must be brought in the courts.  However, Washington and Oregon
have two of the strongest state forest practices acts\8 in the
nation.  According to state forestry officials, compliance with these
strong forest practices acts and the ability to select the least
controversial timber stands for sale are factors contributing to the
few challenges to their timber sales. 

The extra time and effort that the federal agencies take to try to
ensure that their timber sales are acceptable to the public has not
limited legal challenges to their decisions.  Even though the federal
agencies undertake time-consuming measures to preclude legal
challenges to their decisions on timber sales, federal timber sales
are still contested more frequently than the states' timber sales. 
The number of pending legal challenges to public timber sales--both
lawsuits and administrative appeals--at the end of 1995 is shown in
table 3. 



                                Table 3
                
                  Pending Legal Challenges to Pacific
                 Northwest Timber Sales as of December
                                31, 1995

                        Washington      Oregon
                        Department  Department
                        of Natural          of                  Forest
                         Resources    Forestry         BLM     Service
----------------------  ----------  ----------  ----------  ----------
Number of legal                  1           2          20          20
 challenges
----------------------------------------------------------------------
Source:  Washington Department of Natural Resources, Oregon Board of
Forestry, BLM's Oregon State Office, Forest Service's Pacific
Northwest Region. 


--------------------
\8 These state forest practices acts regulate timber operations on
state and private timberlands and promote the production of
high-quality timber products while protecting other natural
resources, such as water quality and wildlife habitat. 


      SALVAGE TIMBER SALES IN THE
      AREA OF WENATCHEE,
      WASHINGTON, EXEMPLIFY
      DIFFERENCES IN FEDERAL AND
      STATE TIMBER SALE PROGRAMS
---------------------------------------------------------- Letter :4.3

Although the basic differences between federal and state lands and
programs make meaningful comparisons difficult, one recent example
points out the effects of the different approaches.  In the summer of
1994, wildfires destroyed approximately 185,000 acres of adjacent
federal and state timberland in the area of Wenatchee, Washington. 
Because burned timber rapidly declines in value, it was imperative
that the Washington Department of Natural Resources and the Forest
Service salvage the timber as quickly as possible.  Delays in selling
the salvage timber would reduce potential revenues for either
governmental unit.  However, while quick action by the state resulted
in the timely harvest of burned timber, federal delays in the sale of
similar timber resulted in lower sale prices. 

The Washington Department of Natural Resources acted quickly to get
the maximum amount of revenues from its salvage timber sales.  Before
the fires were contained, the agency had begun preparing the salvage
timber sales.  Within 3 months, the Department had prepared several
sales and, as a result, was ready to sell the timber as the spring
logging season began.  In April 1995, the Department of Natural
Resources offered and sold its first three salvage sales, followed by
two more sales in the next 2 months.  In total, the state sold 4.8
million board feet of salvage timber at an average price of $203 per
thousand board feet.  Because the state's timber sales were offered
at the beginning of the logging season, the purchasers were able to
harvest and remove all of the salvage timber from four of the five
sales by the end of October. 

In contrast, because of its more lengthy process for planning timber
sales, the Forest Service did not have its timber ready for sale
until late summer 1995, 1 year after the fire.  Its first offering of
more than 1 million board feet was not sold until August, 4 months
after the state began selling its salvage timber.  By that time, the
burned timber had further deteriorated.  Because of the condition of
the timber and the timber sale contract terms, the Forest Service
received from $8 to $94 per thousand board feet for the 78.3 million
board feet of salvage timber it sold.  In addition, the Forest
Service offered six timber sales for which there were no bidders
because of the condition of the timber and the contract terms.  Five
of the six were reoffered with different terms and sold. 


   CONCLUSIONS
------------------------------------------------------------ Letter :5

The federal and state timber sale programs differ significantly in
the Pacific Northwest.  While the states' legislative guidance
emphasizes timber production and maximizing revenues over the
long-term, BLM and the Forest Service must balance multiple resource
uses.  Also, the states fund their timber sale programs with a
percentage of timber sale receipts, which provides built-in
incentives to promote cost efficiency.  While the states' planning
processes are fairly straightforward, the federal agencies' processes
are more lengthy and expensive.  These differences provide some
indicators of why the states can operate their timber sale programs
at less cost than the federal agencies in the Pacific Northwest. 
Modifying these differences, however, would require changes in how
the federal programs are currently structured--a complex and
intricate task, involving stakeholders with varying views on how to
best balance the goals of multiple resource uses. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

We provided copies of a draft of this report to the Forest Service
and the Bureau of Land Management for their review and comment.  We
met with the Forest Service's Deputy Director, Timber Management, in
Washington, D.C., and designated Timber Management staff in the
Pacific Northwest Region, and with the Bureau of Land Management's
designated Timber Management staff in Washington, D.C., and the
Associate State Director of the Bureau's Oregon State Office to
discuss their comments.  We incorporated their suggested changes as
appropriate.  Overall, these officials agreed with the information
presented and indicated that the material was an accurate
presentation of the issues discussed. 

To ensure the accuracy of the information about the states' programs,
we provided the relevant portions of a draft of this report to forest
management staff in Oregon and Washington.  We met with these
officials, including Oregon's Principal Forester and the Natural
Resource Program Specialist in Washington's Department of Natural
Resources, to discuss their comments.  Overall, these officials
agreed with the information presented and indicated that the material
was an accurate presentation of the issues discussed. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

To determine the differences among the federal and state timber
programs as well as to determine the effects of these differences on
the agencies' processes, we interviewed officials of the Timber
Management staff at the Forest Service's Pacific Northwest Region and
Washington, D.C., offices; Timber Management staff at the Bureau of
Land Management's Oregon State Office; and forest management staff at
the Oregon Department of Forestry and the Washington Department of
Natural Resources.  We also reviewed documentation provided by them,
including the appropriate legislation and regulations, written
procedures, and standard timber sale contracts. 

Although you were primarily interested in the state of Washington's
timber sale program, as later agreed with your office, we expanded
the scope to include the state of Oregon.  This addition enabled us
to review two states' timber sale programs yet keep within one Forest
Service region.  In addition, by expanding the scope to include
Oregon, we included BLM's timber sale program in western Oregon,
which accounts for almost all of BLM's timber sales.  Because we
reviewed timber programs in only two states and one Forest Service
region, the results of this work cannot be projected to the Forest
Service or BLM as a whole. 

Our review was performed from June 1995 through April 1996 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :7.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 30 days after the date of this letter.  At that time, we will
send copies to the Secretaries of Agriculture and the Interior and to
officials at the Washington Department of Natural Resources and the
Oregon Department of Forestry.  We will make copies available to
other interested parties on request. 

This work was performed under the direction of James K.  Meissner,
Associate Director for Timber, who may be reached on (206) 287-4810
if you or your staff have any questions about this report.  Major
contributors to this report are listed in appendix I. 

Sincerely yours,

Victor S.  Rezendes
Director, Energy, Resources,
 and Science Issues


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix I

ENERGY, RESOURCES, AND SCIENCE
ISSUES

Carole J.  Blackwell
Araceli C.  Contreras
Linda L.  Harmon
John P.  Murphy, Jr. 

*** End of document. ***