Subsidies Anonymous #4

November 9, 1995

Table of Contents

  1. Statement of Forest Principles
  2. The Outlook for Forest Reform
  3. National Forest Reform Act of 1996
  4. New Book on Public Lands

1 -- Statement of Forest Principles

Congress is seeking to resolve federal land conflicts. In an effort to find a consensus, the Thoreau Institute's board has written a "statement of forest principles." We are now seeking endorsements for these principles from representatives of major interest groups.

The statement reads as follows:

Statement of Forest Principles

We can resolve many of the controversies over federal forest management, including debates over land allocations, levels of timber and other outputs, and the preparation of individual timber sales and other projects.

Most of these controversies are traceable to a budgetary process that creates perverse incentives for managers, promotes divisiveness among users, and encourages central control of the agency by politicians instead of decentralized decisions by the managers on the ground.

To solve these problems, we support the following general principles for reforming federal forest management:

1. Federal forest managers must be allowed to charge a broad range of user fees, including fees for recreation, at fair market value.

True multiple use requires multiple incentives. User fees for multiple resources will create those incentives. Current requirements that forests provide selected resources at below-market prices reduce the incentive for managers to care for those resources.

2. Federal forests must be funded out of the net income that they earn, not out of tax dollars.

Funding out of tax dollars encourages central planning and political manipulation. Funding out of user fees encourages management responsive to the needs of forest users. Funding out of net fees encourages managers to emphasize resources whose values are greater than their costs.

3. A fixed percentage of gross receipts from federal forest users should be dedicated to public goods such as biodiversity.

A few resources, such as biodiversity, need more protection than can be provided by the incentives created by net receipts alone. Dedicating a share of all public forest user fees to a biodiversity trust fund will allow the managers of that trust fund to give public and private forest owners incentives to protect biodiversity and related resources. This will help assure protection of endangered species without coercion and with minimal economic effects.

end of statement

This statement has received endorsements from representatives of several timber companies as well as several environmental groups. If you or a group you represent would like to endorse the statement or have any comments, please email them to rot@ti.org.


2 -- The Outlook for Forest Reform

What is the likelihood that Congress would adopt national forest reforms based on these principles? At the moment, it appears that just about anything could happen. While a bill (S. 1031) has been introduced to turn the BLM lands over to the states, no similar bill has been introduced for the national forests (with the exception of H.R. 2413, which deals solely with the Tongass). No action has been taken on either of these bills.

Idaho Senator Larry Craig and his Forests and Public Lands Subcommittee of the Energy and Natural Resources Committee has taken the lead on national forests, holding a dozen oversight hearings this year. The hearings have covered such topics as planning and ecosystem management.

The last hearing was held on November 2 (with a few witnesses testifying on October 26) and asked whether the national forests should be transferred to the states. Jon Souder, co-author of a recent book on state trust lands, testified that many states have been able to manage their forests at a profit, often with better environmental results than the Forest Service.

But this doesn't mean that there was strong support for transferring the national forests to the states. Several speakers, including state foresters from Oregon and Utah, pointed out that the states have a good record because their mandate is clear, whereas the Forest Service is subject to numerous, often conflicting, legal goals.

I (Randal O'Toole) pointed out that at least 15 states lose money on their forests, and that the critical factor was not that the forests were state trusts but state trusts. Another witness, a county commissioner from Oregon, pointed at what he described as a potential drawback to transferring the forests to the states: "Oregon has a liberal initiative petition law," he said, "and Oregon voters are mostly from urban areas." In other words, if the national forests were owned by the states, those in Oregon (and probably Washington and California as well) might easily be turned into wilderness via ballot measure.

The consensus seemed to be that the problems of the national forests can be fixed without transferring them to the states. The one timber witness, Richard Smith of Hancock Timber Resources, testified mainly about the need for the Forest Service to cooperate with other landowners.

The subcommittee staff, Mark Rey, will present Craig with several alternative ways of reforming the Forest Service, probably by the end of the year. Rey, of course, is a former timber industry lobbyist, but he could easily develop some interesting alternatives.

Judging from past hearings, Craig is clearly upset with national forest management. But many of the things that upset him--a clumsy and expensive planning process, lack of leadership and direction, and escalating conflicts over forest resources--are just as upsetting to environmentalists.

The Thoreau Institute hopes that the statement of forest principles can bring together various interest groups in support of reforms that are acceptable to all sides. Win-win solutions are possible, particularly if we change the rules. That is what the statement of principles seeks to do.


3 -- National Forest Reform Act of 1996

What would a Forest Service based on the statement of principles look like? One alternative is embodied in a "National Forest Reform Act of 1996" that was drafted by the Thoreau Institute. Under this proposal, individual forests would be turned into forest trusts. Wilderness areas would become separate trusts. A third type of trust, the biodiversity trust, would receive a share of forest user fees.

The Thoreau Institute is circulating this bill for discussion purposes; it is not written in legalese and would need substantial revision before it could actually be introduced or passed by Congress. But it shows one way in which reforms could be based on the three forest principles listed above.

A Bill

To improve the efficiency and environmental quality of the Nation's renewable forest and rangeland resources management.

Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled,

Section 1. Short title.

This Act may be cited as the "National Forest Reform Act of 1996."

Section 2. Purpose.

The purpose of this Act is to ensure that the Nation's renewable forest and rangeland resources be managed by the Forest Service so as to provide for the greatest economic efficiency, environmental quality, and responsiveness to public demand for resources.

Section 3. Definitions.

For the purposes of this Act --

(a) the term "National Forest System" means national forests, national grasslands, and other lands managed by the U.S.D.A. Forest Service;

(b) the term "proclaimed national forest" means the Congressional designations of national forest or national grasslands and their boundaries;

(c) the term "National Forest Unit" means one of a number of management units of the National Forest System as determined by the Secretary of Agriculture under section 4, paragraph a of this Act;

(d) the term "National Forest Trust" means a chartered organization, with a membership and a board of trustees elected by the membership, that is authorized and obligated to manage a National Forest Unit in trust for the people of the United States;

(e) the term "Wilderness System" means the national forest wilderness areas and wild and scenic rivers within a state or region as determined by the Secretary of Agriculture under section 5, paragraph a of this Act;

(f) the term "Wilderness Trust" means a chartered organization, with a membership and a board of trustees elected by the membership, that is authorized and obligated to manage a Wilderness System in trust for the people of the United States;

Section 4. National forest trusts.

(a) Within four months of the passage of this act, the Secretary of Agriculture shall draft a division of non-wilderness lands and non-wild and scenic rivers in the National Forest System into individual National Forest Units, establishing clear boundaries for each unit. Such boundaries may be similar to or may cross the boundaries of individually proclaimed national forests. The initial National Forest Units shall each be no smaller than 1 million acres and no larger than 6 million acres. Final determination of National Forest Unit boundaries shall be made after 30 days of public comment but no later than six months after passage of this act.

(b) The Secretary shall appoint an interim supervisor for each National Forest Unit. The interim supervisor shall carry out the laws and regulations of the Forest Service until the first meeting of the Board of Trustees of the National Forest Unit.

(c) Upon establishment of the National Forest Unit boundaries, the Secretary shall create for each unit a National Forest Trust, which shall be a not-for-profit corporation chartered under the laws of the United States. Any citizen of the United States may become a member of any National Forest Trust for a nominal annual fee, initially set at $20 per year, paid to the supervisor or interim supervisor of the National Forest Unit. Each trust shall have complete jurisdiction over the lands and resources with the associated National Forest Unit, subject to the provisions of section 4, paragraphs e, f, g, and h of this Act.

(d) Within 90 days of the establishment of each National Forest Trust, the interim supervisor of each National Forest Unit shall arrange for members of each trust to elect, by a mail-in ballot, a nine-member Board of Trustees. Board members shall have three-year terms, with three members elected each year.

(e) The Board of Trustees for each National Forest Trust shall be obligated to manage the associated National Forest Unit in trust for the people of the United States. Such management shall be in accordance with accepted multiple use and sustained yield principles, and shall be aimed at producing the greatest good for the greatest number for the longest time. Such management shall also be subject to those federal laws that would apply to any private land trust or land owner.

(f) The Boards of Trustees of each National Forest Trust shall have the following powers:

(1) The power to select from among themselves a chair and other officers as deemed appropriate;

(2) The power to hire and fire the supervisor of the National Forest Unit or Wilderness System;

(3) The power to approve an annual operating plan, including the establishment of budgets, fees, activities, and projects, the allocations of land to various uses, and criteria and procedures used to sell or lease resources within the jurisdiction of the National Forest Trust;

(4) The power to set membership fees and arrange annual, mail-in elections for members of the Board.

(g) Notwithstanding the provisions of any other law, each National Forest Trust may charge fees at fair market value for any of the resources within their jurisdictions subject to the requirements of section 4, paragraph e of this Act.

(h) The Boards of Trustees shall not sell any of the lands within their jurisdictions. However, they may exchange land for land of equal value if such exchange will ease the management of lands in their jurisdiction and such exchanges meet the objectives specified in section 4, paragraph e of this Act. They may also purchase land from willing sellers within the legally proclaimed boundaries of the National Forest System lands under their jurisdiction.

(i) Board members shall receive no compensation for their time, but may elect to reimburse themselves for costs traveling to and from and participating in board meetings.

(j) Congress may revoke the charter of any National Forest Trust in the event of gross malfeasance or violation of any provision of section 4 of this Act.

(k) In the event that any National Forest Unit is unable to sustain itself with the funds provided for it under section 6 of this Act, the Board of Trustees for that unit may elect to transfer the lands under its jurisdiction to the jurisdiction of any other willing National Forest Trust.

Section 5. Wilderness trusts.

(a) Congressionally designated wilderness areas and wild and scenic rivers in the National Forest System shall be divided into separate State or Regional Wilderness Systems. State Wilderness Systems shall generally be formed in states that contain at least 2 million acres of National Forest Wilderness. Regional Wilderness Systems shall generally be formed by combining the Wilderness areas of adjacent or nearby states with fewer than 2 million acres of National Forest Wilderness.

(b) The Secretary shall appoint an interim manager for each Wilderness System. The interim manager shall carry out the laws and regulations of the Forest Service until the first meeting of the Board of Trustees of the Wilderness System.

(c) Upon establishment of the Wilderness System boundaries, there shall be created for each system a Wilderness Trust, which shall be a not-for-profit corporation chartered under the laws of the United States. Any citizen of the United States may become a member of any Wilderness Trust for a nominal annual fee, initially set at $20 per year, paid to the manager or interim manager of the Wilderness System. Each trust shall have complete jurisdiction over the lands and resources with the associated Wilderness System, subject to the provisions of section 5, paragraphs e, f, g, and h of this Act.

(d) Within 90 days of the establishment of each Wilderness Trust, the interim manager of each Wilderness System shall arrange for members of each trust to elect, by a mail-in ballot, a nine-member Board of Trustees. Board members shall have three-year terms, with three members elected each year. Initial members shall choose initial terms by lot.

(e) The Board of Trustees for each Wilderness Trust shall be obligated to manage the associated Wilderness System in trust for the people of the United States. Such management shall aim at maximizing the scientific, social, economic, and other values of the Wilderness System in accordance with provisions of the Wilderness Act of 1964 and the Wild and Scenic Rivers Act of 1968, as well as the special provisions of any other law passed in relation to lands within each Wilderness System.

(f) The Boards of Trustees of each Wilderness Trust shall have the following powers:

(1) The power to select from among themselves a chair and other officers as deemed appropriate;

(2) The power to hire and fire the supervisor of the National Forest Unit or Wilderness System;

(3) The power to approve an annual operating plan, including the establishment of budgets, fees, activities, and projects, the allocations of land to various uses, and criteria and procedures used to sell or lease resources within the jurisdiction of the National Forest or Wilderness Trust;

(4) The power to purchase land from willing sellers or to purchase conservation easements from public land agencies or willing private landowners. Such land shall be added to the Wilderness System and managed with the aims expressed in section 4, paragraph e.

(5) The power to set membership fees and arrange annual, mail-in elections for members of the Board.

(g) Notwithstanding the provisions of any other law, each Wilderness Trust may charge fees at fair market value for any of the resources within their jurisdictions subject to the requirements of section 5, paragraph e of this Act.

(h) The Boards of Trustees shall not sell any of the lands within their jurisdictions. However, they may exchange land for land of equal value if such exchange will ease the management of lands in their jurisdiction and such exchanges meet the objectives specified in section 5, paragraphs e of this Act.

(i) Board members shall receive no compensation for their time, but may elect to reimburse themselves for costs traveling to and from and participating in board meetings.

(j) Congress may revoke the charter of any Wilderness Trust in the event of gross malfeasance or violation of any provision of section 4 of this Act.

(k) In the event that any Wilderness System is unable to sustain itself with the funds provided for it under section 6 of this Act, the Board of Trustees for that unit may elect to transfer the lands under its jurisdiction to the jurisdiction of any other willing Wilderness System.

Section 6. Budget and finance.

(a) Notwithstanding the provisions of any other law, no funds may be appropriated to the National Forest Units, Wilderness Systems, or National Forest or Wilderness Trusts except as described in this section.

(b) During the first fiscal year beginning after passage of this Act, Congress may appropriate funds to each National Forest Unit and Wilderness System equal to the funds appropriated for the management of the lands within such National Forest Unit or Wilderness System during the previous fiscal year, exclusive of funds spent by the Regional, Washington, or other non-ranger district or non-national forest supervisor offices of the Forest Service.

(c) At the end of each fiscal year beginning with the first fiscal year after passage of this Act, the Secretary of Agriculture shall audit each National Forest Unit to determine the total funds expended and the total receipts collected by that unit during the fiscal year. Receipts collected by each unit shall be divided as follows:

(1) 100 percent of the net receipts shall be retained by the National Forest Trust to be spent managing and improving the lands and resources under the trust's jurisdiction;

(2) 15 percent of the gross receipts shall be paid to states in lieu of property taxes;

(3) All remaining receipts, up to a maximum of 20 percent of the gross receipts, shall be paid to the National Biodiversity Trust Fund;

(4) All remaining receipts shall be deposited into the general fund of the United States Treasury.

(d) All fees and donations collected by each Wilderness System shall be retained by the associated Wilderness Trust to be spent managing, improving, and enlarging the Wilderness System.

(e) National Forest Trusts may retain 100 percent of any donations paid to the trusts to spend on managing and improving the lands and resources under the trust's jurisdiction, provided that such donations shall not be made in exchange for any goods or services provided by the National Forest Unit in the trust's jurisdiction. Donations made in exchange for goods or services shall be considered user fees and shall be distributed as provided in section 6, paragraph c of this Act.

(f) The distributions of funds described in section 6, paragraphs c, d, and e of this Act shall not be a part of the budget of the United States and shall not require annual approval or appropriation by the United States Congress.

(g) Funds appropriated to National Forest Units and Wilderness Systems under section 6, paragraph b, and funds retained by National Forest Units or Wilderness Systems under section 6, paragraph c, d, and e of this Act that are not spent in any given fiscal year may be carried over by such National Forest Units or Wilderness Systems to be spent in any future fiscal year.

(h) Trust funds held by the Treasury in account for the Forest Service under the Act of August 11, 1916, the Knutson-Vandenberg Act of 1930, the National Forest Roads and Trails Act of 1964, and the National Forest Management Act of 1976 as of the first day of the first fiscal year after passage of this Act shall be made available to the National Forest Units that generated those funds so that they may be used for the purposes for which they were intended according to established plans approved by the Supervisors.

Section 7. Conservation easements.

(a) Supervisors are authorized to sell resource use rights in the form of conservation easements on National Forest System lands. Conservation easements may convey rights to timber harvesting, grazing, mineral development and/or other uses. Conservation easements may exist for a limited time period or in perpetuity. The price of a conservation easement should equal or exceed the price of commodity uses forgone, adjusted for the difference in costs of administering the easement instead of the commodity use; in the case of renewable resources, the price should also be adjusted for the future value of the renewed commodities.

(b) Any agency of the Federal Executive, the States, and any political or governmental subdivision thereof, any corporation, not-for-profit corporation, private entity or person may hold a conservation easement on national forest land. In a transaction involving a contract for use of forest or rangeland resources, any bids for a conservation easement on the area must be accorded equal weight with bids for traditional resource uses; the highest bid shall be accepted, taking into account the true cost of a conservation easement when adjusted according to the factors detailed in the previous paragraph.

Section 8. National biodiversity trust.

(a) The director of the Smithsonian Institute shall create a National Biodiversity Trust dedicated to protecting a repository of diverse ecosystems and habitat for threatened and endangered species of wildlife.

(b) The National Biodiversity Trust is to be governed by a Biodiversity Board of Trustees who shall administer funds in the National Biodiversity Trust Fund by purchasing conservation easements or paying landowners or land managers for providing habitat for threatened and endangered species of wildlife. The Biodiversity Board of Trustees shall consist of seven members selected by the director of the Smithsonian Institute each of whom is qualified in biology, zoology, botany, ecology, or another of the life sciences.

(c) No more than 1 percent of the National Biodiversity Trust Fund may be used for administrative purposes. No more than 20 percent of the National Biodiversity Trust Fund may be used for research and inventory purposes. The remainder of the fund must be dedicated to the protection of biodiversity, including but not limited to:

(1) The purchase of conservation easements on public or private land;

(2) Payments to public land managers or private landowners who provide habitat for threatened and endangered species of wildlife;

(3) Grants to other federal, state or local agencies, or to corporations or individuals, in support of projects aimed at protecting or improving biodiversity.

end of National Forest Reform bill

Your comments are welcome; as usual, send them to rot@ti.org.


4 -- New Book on Public Lands

Robert Nelson was an economist with the U.S.D.I Office of Policy Analysis from 1975 through 1993. Since then he has taught at the University of Maryland. Now a book of essays that he wrote on public lands during the eighteen years he worked at U.S.D.I. has been published under the title of Public Lands and Private Rights: The Failure of Scientific Management.

Nelson's thesis is that the Forest Service and other public land agencies were originally based on the idea of "scientific management"--that is, that scientifically trained foresters or other managers would know the best way to manage the land and would always make the right decisions.

It is not hard to figure out what is wrong with this idea. Someone trained in timber cutting or cattle ranching does not necessarily know how to manage wilderness or wildlife. Even if the agencies hire experts in all of the specialties, that doesn't mean Congress will let them manage all resources equally or that funding will not be biased towards one resource or another.

By the 1970s, when Nelson began writing these essays, most people had implicitly given up on scientific management. The Forest Service was trying to make decisions through planning and public involvement. But this proved no more satisfactory. Yet when major alternatives were proposed, such as privatization or transferring lands to the states, public land supporters fell back (and are still falling back) on the old scientific management rhetoric.

Some of Nelson's essays seem a bit dated because they were written several years ago. But his analyses of what is wrong with the Forest Service, BLM, and other agencies are just as valid today as it was when the essays were written. The main difference, perhaps, is that his audience is larger: Congress today seems more willing to look at the problems with public land management.

Nelson's prescriptions often seem unpalatable. For example, he recently suggested that Congress divide the national forests into lands whose values are primarily commodities, lands whose values are primarily of state and local concern, and lands whose values are truly national in scope. The commodity lands should be sold, he says, the national ones retained, and the rest transferred to the states. He figures the state-and-local-concern lands represent about 60 percent, while the remaining 40 percent would be split between the other two categories.

Those who object to this prescription need to do more than shout it down. Few can disagree with Nelson's analyses. Those who want to keep federal lands in federal ownership must find reforms that do not depend on altruistic, scientific managers or a cumbersome planning process and yet still preserve the values that we cherish in the public lands.


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