Timber resources and local counties

The U.S. House Natural Resources Subcommittee recently hosted a hearing in Washington, D.C., on a draft proposal to replace the current Secure Rural Schools and Community Self-determination Act of 2000, which expires at the end of September.

The House's draft proposal, the "National Forest County Revenue, Schools and Jobs Act of 2011," proposes long-term solutions to provide rural counties with stable revenue streams and jobs and restores active forest management.

In 1908, Congress first recognized the impact federal ownership of public lands has on rural communities by setting aside 25 percent of the revenues derived from National Forest System lands as payment to affected states for use by counties. Over the decades, counties have relied on shared revenues to provide essential funding for roads and schools.

The principle source of these revenues is receipts from federal timber sales. Because of a steady decline in the federal timber program from the mid 1980s through the 1990s, state and county programs and budgets were suffering.

In 2000, Congress responded by enacting the Secure Rural Schools and Community Self-determination Act (SRS), intended as a temporary measure to offset the adverse affects of a declining federal timber program by providing an annual safety net based on historic timber revenue levels between 1986 and 1999.

Counties historically had relied on two primary federal payment programs, the Payment in Lieu of Timber sale program, or PILT, and the 25 Percent Fund.

Originally, the Secure Rural Schools legislation provided for federal and non-federal wildfire mitigation, habitat improvement, watershed restoration, road maintenance and recreational improvement activities. In order to opt-in to this program, county officials agreed to forgo the 25 Percent Fund payment and form a Resource Advisory Committee (RAC) with approval of the committee members by the secretaries of Agriculture and Interior.

In the first few years of the program, only a few Montana counties decided to opt-in and form a RAC. By 2011, there were 34 Montana counties with RACs overseeing the disbursement of approximately $24 million dollars in project funds. If these counties had opted to stay with the traditional 25 Percent Fund payment, they would have collectively lost more than $4 million in revenue in 2011 alone. Nationally, the program has provided more than $500 million annually to counties across the country impacted by declining federal timber sale receipts.

The SRS program was to be a temporary stopgap measure. Eleven years later, we have not seen enough improvement to give counties the assurances they need. Unfortunately, the reauthorization of the 2000 act comes at a time when our nation's leaders are seeking ways to cut the deficit and grow the economy, and the SRS fund is often widely viewed as a $500 million to $600 million annual endowment.

One could argue the SRS program provided jobs and financial security to counties and therefore should be reauthorized. From a timber management and forest products perspective, opportunities under Title II, which was to provide funds for projects to improve natural resource conditions on federal lands, has not really materialized to the extent that was possible or intended, which would have provided a measure of stability to the forest products industry as well.

The hearing on the draft National Forest County Revenue, Schools and Jobs Act of 2011 is a starting point to look for long-term solutions to increase employment and educational opportunities and improve economic stability of counties, while reducing the cost of managing federal forest lands. The Act proposes to:

• Create a County, Schools and Revenue Trust to provide a dependable source of revenue for rural counties that currently depend on the Secure Rural Schools program.

• Establish an annual revenue requirement (ARR) for each National Forest System unit, based on an average of gross receipts from 1980-2000. Seventy-five percent of the annual revenue requirement is shared with counties through the County Revenue and Schools Trust; the Forest Service retains 20 percent and 5 percent is directed to the U.S. Treasury.

• Provide the Forest Service with the authority to carry out County Revenue and Schools Trust projects in order to meet the required annual revenue requirement. Trust projects may include timber sales, issuance of grazing permits, and special permits involving land use, minerals, power, recreation and projects implementing community wildfire protection plans.

• Require that each federally approved trust project be subjected to a public comment period and administrative appeal, and be required to undergo an "environmental report" that identifies and mitigates potential environmental impacts.

• Authorize a transition period to continue making payments to counties and schools while the Forest Service begins the process of identifying and implementing trust projects.

• Provide for future inclusion of proposals to address other federal forest lands affected by declining timber production.

While the devil is always in the details, in today's current economic climate, the draft proposal offers an interesting platform for discussion and potential long-term reforms.

Julia Altemus represents the Montana Wood Products Association.