Forest Service Cost Reduction and Fiscal Accountability Act of 1998

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Forest Service 
Cost Reduction and Fiscal Accountability Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. All Resources Reporting System.
Sec. 5. Limitations on costs charged to off-budget funds.
Sec. 6. Disclosure of indirect expenditures and general administration 
                            costs in annual budget requests.
Sec. 7. Cost reduction strategic plan.
Sec. 8. Audit requirements.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Over the last several years, indirect expenditures and 
        other overhead costs within the Forest Service have increased 
        substantially, both in total dollar amounts and as a percentage 
        of total expenditures. Rising indirect expenditures and other 
        overhead costs have hindered the ability of the Forest Service 
        to carry out its core mission of managing the National Forest 
        System.
            (2) According to the Comptroller General, indirect 
        expenditures associated with Forest Service management of five 
        off-budget funds established by law to provide funds for site 
        restoration, reforestation, habitat improvement, brush disposal 
        and other critical management activities has increased by 80 
        percent and now exceeds 27 percent of the total annual 
        expenditures from these off-budget funds. Considerable debate 
        continues regarding whether such expenditures exceed spending 
        authority provided by Congress.
            (3) Forest Service data show that annual general 
        administration costs associated with the Federal timber sale 
        program increased by 46 percent between 1992 and 1996 and now 
        comprise 31 percent of the total costs of the program. Such 
        data show that annual general administration costs exceed the 
        total annual costs of all of the following combined:
                    (A) Environmental analysis.
                    (B) Appeals and litigation.
                    (C) Road design, construction, and maintenance.
                    (D) Brush disposal.
                    (E) Reforestation and other site improvements.
                    (F) Transportation planning.
                    (G) Silvicultural examinations.
            (4) The Forest Service does not presently have an adequate 
        financial accounting system in place to identify and manage the 
        indirect and total expenditures associated with the programs it 
        administers. The lack of such a system, and accompanying 
        safeguards to prevent inappropriate use of appropriated funds 
        and off-budget funds, may be contributing substantially to 
declines in the goods and services the Forest Service is able to 
provide to the American public and other users of the National Forest 
System.
            (5) The Forest Service is in need of a comprehensive 
        strategy for identifying and reducing, where appropriate, 
        indirect and total expenditures associated with management of 
        the National Forest System. Such a strategy must include clear, 
        tangible objectives and performance measures that will make it 
        possible to measure agency performance and identify results.
            (6) Any comprehensive strategy ultimately adopted by the 
        Forest Service to better manage indirect and total expenditures 
        associated with management of the National Forest System must 
        be designed so as to maintain or increase the goods and 
        services provided to the American public and other users of the 
        National Forest System as a result of its implementation.

SEC. 3. DEFINITIONS.

    For purposes of this Act:
            (1) Budget request.--The term ``budget request'' means the 
        Forest Service budget justification documents submitted to the 
        Committee on Appropriations of the House of Representatives and 
        the Senate in support of the President's budget for a fiscal 
        year submitted to Congress pursuant to section 1105 of title 
        31, United States Code.
            (2) General administration.--The term ``general 
        administration'' means amounts appropriated for general line 
        management, administrative support, and common services, as 
        identified in the Forest Service budget request.
            (3) Indirect expenditures.--The term ``indirect 
        expenditures'' means indirect support activities, as defined in 
        the Forest Service Handbook and other expenditures, including 
        salary, travel, training and vehicle use, that cannot, in a 
        feasible manner, be specifically identified with a single 
        project, including the following:
                    (A) Expenditures related to line officers, 
                including district rangers, forest supervisors, 
                regional foresters, and Washington Office positions, 
                and their support staff.
                    (B) Program support expenditures to coordinate, 
                manage, and execute programs, business activities, 
                community involvement, and other similar activities.
                    (C) Nonpersonnel expenditures associated with 
                providing space and working environments for employees, 
                including rentals, utilities, communications, radio, 
                office and computer equipment, mail and postage, and 
                office supplies and forms.
            (4) Off-budget fund.--The term ``off-budget fund'' means a 
        trust fund or permanent appropriation administered by the 
        Forest Service, including the following:
                    (A) The brush disposal fund established under the 
                twenty-first paragraph under the heading ``FOREST 
                SERVICE'' in the Act of August 11, 1916 (39 Stat. 462; 
                16 U.S.C. 490).
                    (B) The cooperative work-other fund established 
                under the penultimate paragraph under the heading 
                ``FOREST SERVICE'' in the Act of June 30, 1914 (38 
                Stat. 430; 16 U.S.C. 498).
                    (C) Knutson-Vandenberg fund established under 
                section 3 of the Act of June 9, 1930 (commonly known as 
                the Knutson-Vandenberg Act; 16 U.S.C. 576b).
                    (D) The reforestation trust fund established under 
                section 303(d) of Public Law 96-451 (16 U.S.C. 1606a).
                    (E) The salvage sale fund established under section 
                14(h) of the National Forest Management Act of 1976 (16 
                U.S.C. 472a(h)).
                    (F) The roads and trails fund established under the 
                fourteenth paragraph under the heading ``FOREST 
                SERVICE'' of the Act of March 4, 1913 (37 Stat. 843; 16 
                U.S.C. 501).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture, acting through the Chief of the Forest Service.

SEC. 4. ALL RESOURCES REPORTING SYSTEM.

    (a) Accounting System Required.--
            (1) Schedule for implementation.--Not later than 180 days 
        after the date of the enactment of this Act, the Secretary 
        shall prepare a schedule for implementation of an accounting 
        system (to be known as the ``All Resources Reporting System'') 
        to account for the costs and revenues associated with the 
        programs administered by the Forest Service. The Secretary 
        shall include the schedule in the strategic plan required under 
        section 7.
            (2) Implementation.--The All Resources Reporting System 
        shall be fully implemented for all of the programs identified 
        under subsection (b) beginning no later than the first day of 
        the second full fiscal year following the date of the enactment 
        of this Act.
    (b) Required Programs.--The All Resources Reporting System shall 
include, at a minimum, the following program areas:
            (1) Land management planning, inventorying, and monitoring.
            (2) Recreation use.
            (3) Rangeland management.
            (4) Commercial timber management.
            (5) Forestland vegetation management.
            (6) Soil, water, and air management.
            (7) Minerals and geology management.
            (8) Wildlife and fisheries habitat management.
            (9) Land ownership management.
            (10) Infrastructure management.
            (11) Law enforcement operations.
            (12) State and private forestry.
            (13) Forest and rangeland research.
    (c) Cost Allocations.--The All Resources Reporting System shall 
allocate certain costs as follows:
            (1) The costs of the commercial timber management program 
        shall consist of the costs identified with the timber commodity 
        component of the Federal timber sale program, as contained in 
        the Forest Management Program Annual Report.
            (2) The costs of the forest land vegetation and wildlife 
        and fisheries habitat management program shall include the 
        costs of the forest stewardship and personal use components of 
        the Federal timber sale program, as contained in the Forest 
        Management Program Annual Report. Such costs shall be divided, 
        as appropriate, between the two programs.
    (d) Identification of Indirect Expenditures and General 
Administration Costs.--The All Resources Reporting System shall clearly 
identify the indirect expenditures and general administration costs 
charged or allocated annually to each program.
    (e) Administrative Units.--The All Resources Reporting System shall 
include a separate report for each administrative unit of the National 
Forest System, for State and private forestry, and for research.
    (f) Compliance with Generally Accepted Accounting Principles.--The 
Forest Service shall ensure that the All Resources Reporting System 
complies with generally accepted accounting principles.

SEC. 5. LIMITATIONS ON COSTS CHARGED TO OFF-BUDGET FUNDS.

    (a) Annual Percentage Limitation.--Not later than 90 days after the 
date of the enactment of this Act, the Secretary shall cap total annual 
indirect expenditures from each of the off-budget funds at 20 percent 
of the total expenditures from each fund.
    (b) Elimination of Indirect Expenditures.--Not later than 180 days 
after the date of the enactment of this Act, the Secretary shall 
prepare a schedule for eliminating indirect expenditures from each off-
budget fund by the end of the second full fiscal year following the 
date of the enactment of this Act. To ensure elimination of such 
indirect expenditures by the end of such second full fiscal year, the 
schedule shall reduce indirect expenditures to at least 10 percent of 
total annual expenditures from each off-budget fund beginning on the 
first day of the second full fiscal year. The Secretary shall include 
the schedule in the strategic plan required under section 7.

SEC. 6. DISCLOSURE OF INDIRECT EXPENDITURES AND GENERAL ADMINISTRATION 
              COSTS IN ANNUAL BUDGET REQUESTS.

    The Secretary shall plainly disclose for each budget line item, 
expanded budget line item, or program identified in each annual budget 
request the following information:
            (1) The total amount of indirect expenditures and general 
        administration costs that will be charged or allocated to the 
        line item, expanded line item, or program during the applicable 
        fiscal year, expressed both in total dollars and as a 
        percentage of the total line item, expanded line item, or 
        program.
            (2) The total amount of indirect expenditures and general 
        administration costs charged or allocated to the line item, 
        expanded line item, or program for each of the preceding three 
        fiscal years, expressed both in total dollars and a percentage 
        of the total line item, expanded line item, or program.

SEC. 7. COST REDUCTION STRATEGIC PLAN.

    (a) Strategic Plan Required.--Not later than 180 days after the 
date of the enactment of this Act, the Secretary shall prepare and 
submit to Congress a five-year strategic plan to identify and reduce, 
where appropriate, indirect expenditures and other costs associated 
with the programs identified in section 4(b) while simultaneously 
increasing the goods and services provided by such programs through the 
National Forest System.
    (b) Elements of Strategic Plan.--The strategic plan shall include, 
at a minimum, the following elements:
            (1) A description and schedule for full implementation of 
        the All Resources Reporting System.
            (2) A schedule for eliminating indirect expenditures from 
        off-budget funds pursuant to section 5.
            (3) A method for identifying annually the direct and 
        indirect expenditures (expressed both in total dollars and as a 
        percentage of total program expenditures) charged or allocated 
        to each program by the Washington, regional, forest, and ranger 
        district offices.
            (4) A framework, including specific instructions to line 
        officers and other decision makers, for establishing and 
        achieving a five-year goal for reducing, as appropriate, the 
        indirect expenditures and total expenditures charged to each 
        program by the Washington, regional, forest, and ranger 
        district offices while maintaining or increasing the goods and 
        services provided by such programs through the National Forest 
        System.
            (5) A plan to improve the cost-effectiveness of program and 
        project planning and implementation through increased private-
        sector contracting.
            (6) Annual, output-based incentives for line officers and 
        other decision-makers to meet the schedules and achieve the 
        objectives established under this subsection.
    (c) Consultation.--The Secretary shall prepare the strategic plan 
in consultation with the Comptroller General and the Inspector General 
of the Department of Agriculture.
    (d) Results of Implementation.--The Secretary shall include an 
annual review of the results of the implementation of the strategic 
plan as an addendum to the annual budget request. The annual review may 
also be included in the annual performance plan prepared pursuant to 
the provisions of the Government Performance and Results Act of 1993 
(Public Law 103-62; 107 Stat. 285). The addendum shall include a 
description of the following:
            (1) Modifications in the implementation of the strategic 
        plan that occurred during the course of the fiscal year and the 
        impact of the modifications.
            (2) Changes to the definition of or method of accounting 
        for direct and indirect expenditures and general administration 
        costs that occurred during the previous fiscal year.
            (3) Private contracting demonstration projects commenced 
        under subsection (e) and the results of any such projects that 
        are completed.
    (e) Demonstration of Private-Sector Contracting.--For purposes of 
the implementation of the element of the strategic plan described in 
subsection (b)(5), and notwithstanding any other provision of law, the 
Secretary may conduct demonstration projects to test the cost-
effectiveness of using private contracting for planning, programming, 
project implementation, and other activities of the Forest Service that 
do not constitute decision-making.

SEC. 8. AUDIT REQUIREMENTS.

    (a) Annual Evaluations Required.--The Comptroller General shall 
submit to Congress an annual evaluation assessing the effectiveness of 
the implementation of the strategic plan required under section 7. The 
evaluation for a year shall be submitted as soon as practicable after 
the submission of the Forest Service budget request for the next year.
    (b) Five-Year Audit Required.--At the conclusion of the fifth full 
fiscal year following the date of the enactment of this Act, the 
Comptroller General shall conduct a comprehensive audit of the 
implementation of the strategic plan required under section 7. Such 
audit shall include an analysis of the following:
            (1) The trends in indirect and total expenditures charged 
        to each program by the Washington, regional, forest, and ranger 
        district offices.
            (2) A description of the effectiveness of the 
        implementation of the strategic plan, or any modifications 
        thereto, on the management of indirect expenditures and total 
        expenditures charged to each program by the Washington, 
        regional, forest, and ranger district offices.
            (3) Recommendations to further improve the management of 
        indirect and total expenditures charged to each program by the 
        Washington, regional, forest, and ranger district offices.

Summary: Forest Service Cost Reduction and Fiscal Accountability Act of 1998 - Directs the Secretary of Agriculture, acting through the Chief of the Forest Service, to prepare an implementation schedule for a Forest System accounting system to be known as the All Resources Accounting System which shall include: (1) specified program areas, (2) cost allocations, (3) identification of indirect expenditures and general administration costs. And (4) separate reports for Forest System units, State and private forestry, and research. Directs the Secretary to: (1) limit and eliminate within a certain period indirect expenditures from Forest Service trust funds or permanent appropriations. (2) disclose indirect expenditures and general administration costs in annual budget requests. And (3) prepare a five-year Forest System cost reduction strategic plan.