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[Senate Hearing 110-11]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 110-11
 
                     COSTS OF WILDFIRE SUPPRESSION

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   on

 THE STATUS OF THE FEDERAL LAND MANAGEMENT AGENCIES EFFORTS TO CONTAIN 
  THE COSTS OF THEIR WILDFIRE SUPPRESSION ACTIVITIES AND TO CONSIDER 
  RECENT INDEPENDENT REVIEWS OF AND RECOMMENDATIONS FOR THOSE EFFORTS

                               __________

                            JANUARY 30, 2007

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                 ______

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota        LARRY E. CRAIG, Idaho
RON WYDEN, Oregon                    CRAIG THOMAS, Wyoming
TIM JOHNSON, South Dakota            LISA MURKOWSKI, Alaska
MARY L. LANDRIEU, Louisiana          RICHARD BURR, North Carolina
MARIA CANTWELL, Washington           JIM DeMINT, South Carolina
KEN SALAZAR, Colorado                BOB CORKER, Tennessee
ROBERT MENENDEZ, New Jersey          JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas         GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
JON TESTER, Montana                  MEL MARTINEZ, Florida
                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
            Frank J. Macchiarola, Republican Staff Director
             Judith K. Pensabene, Republican Chief Counsel
                         Scott Miller, Counsel
          Frank Gladics, Republican Professional Staff Member

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     1
Caswell, James, Co-Chair, Strategic Issues Panel on Fire 
  Suppression Costs..............................................    54
Craig, Hon. Larry E., U.S. Senator from Idaho....................    39
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     2
Fong, Phyllis K., Inspector General, Department of Agriculture...    23
Hatfield, Nina Rose, Deputy Assistant Secretary, Business 
  Management and Wildlife Fire, Department of the Interior.......     3
McDowell, Bruce, Ph.D., Fellow, National Academy of Public 
  Administration.................................................    42
Nazzaro, Robin M., Director, Natural Resources and Environemnt, 
  Government Accountability Office...............................    14
Rey, Mark, Under Secretary for Natural Resources and Environment, 
  Department of Agriculture......................................     5
Rowdabaugh, Kirk, State Forester, Arizona, on behalf of the 
  Western Governors' Association.................................    46
Salazar, Hon. Ken, U.S. Senator from Colorado....................    34
Tester, Hon. John, U.S. Senator from Montana.....................    32

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    63

                              Appendix II

Additional material submitted for the record.....................    67

                     COSTS OF WILDFIRE SUPPRESSION

                              ----------                              

                       TUESDAY, JANUARY 30, 2007

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. Why do we not go ahead and start the hearing. 
Thank you all for coming.
    This hearing is focused on the issue of the escalating 
costs of wildfire management. Escalating wildfire management 
costs have been a concern for decades. Despite a great deal of 
discussion in this committee and elsewhere, I think it is fair 
to say that we have not made great progress in containing 
costs. In fact, wildfire spending is growing at an alarming 
rate. The Federal land management agencies' fire management 
costs have tripled since 1999. They spent a record $2 billion 
last year on wildfire suppression alone.
    Short and long-term climate change promises to only make 
the problem worse, and possibly substantially worse.
    As you can see from these pie charts that are over here, 
wildfire management costs are taking up a larger and larger 
part of the Forest Service budget. All the other programs, from 
recreation to research and from grazing to grant programs, 
suffer as a result of this increasing portion of the budget 
that is having to go for wildfire suppression costs. Last year 
about half of the Forest Service's discretionary budget was for 
wildfire preparedness and suppression.
    Senator Domenici. Which one is that?
    The Chairman. That is the last one here on the right. Yes, 
2006.
    Senator Domenici. Is the green what you are talking about?
    The Chairman. No, I am talking about the--green is what is 
left, discretionary appropriations. The suppression 
expenditures are red and the preparedness expenditures are the 
yellow.
    So the main point that the graphs try to make is that 
particularly the cost of suppression of wildfires has been 
growing very dramatically in recent years. The record-setting 
expenditures last year and the failure of Congress to pass the 
Interior appropriation bill leave us facing a very dire 
wildfire suppression funding shortfall. If the Forest Service 
is to go into the next fire season at the financial 
preparedness level that we have come to expect in recent years, 
the Congress needs to find about $900 million in supplemental 
appropriations.
    Without significant changes in policy and practice, the 
current budgetary crisis will be commonplace. The rate at which 
wildfire suppression costs are escalating and the wildfire 
management policies that permit those costs to escalate clearly 
are not sustainable, either financially, administratively, or 
ecologically.
    Their persistence can be explained only by failure at the 
political and the bureaucratic level to deal with these issues. 
We need a collaborative bipartisan approach to overcome the 
inertia that seems to exist. To successfully contain these 
costs, Congress and the agencies and State and local government 
and individuals all need to take more responsibility.
    We have two panels comprised of many of the best thinkers 
that we have on this subject. They have put enormous effort 
into identifying many of the key problems and coming up with 
thoughtful recommendations to address them, and we want to 
welcome all those who are going to testify.
    Let me now turn to Senator Domenici for any opening 
statement he would like to make, and then Nina Rose Hatfield is 
going to be the first witness on the first panel. If any 
members want to submit an opening statement, of course we will 
make that part of the record. But let me defer to you, Senator 
Domenici.

       STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Domenici. Thank you very much, Senator Bingaman.
    It is good that we have this hearing in spite of the fact 
that we are crammed full of things to do. We have a very big 
part to play in this responsibility, that is to find a better 
way to take care of the firefighting and the costs, which seem 
to go up and down, and with that we are getting some very, very 
bad results in terms of what we have left in dollars and what 
we are doing with our other operating budgets. There is no 
question about it.
    First, I want to thank you, Senator, for scheduling the 
hearing. It seems like sometimes scheduling the hearing and 
coming over for an hour and a half has more to do with pushing 
things along than we used to think. This hearing has to have an 
impact. We have to do something because of what we are going to 
find out here.
    I believe the situation must be addressed. We are moving in 
the direction where nearly half of the discretionary funding of 
this Forest Service budget is now expended on firefighting and 
fire preparedness. This cannot be sustained. It is not the 
same, but it is much like looking at the Social Security budget 
and saying it is just right there in front of you, it cannot go 
on. Pretty soon there will not be any money for the major 
purpose for which you exist, and that is going to happen to 
this Department. The Department is not going to have money for 
all the other things and somebody is going to turn around and 
say, where is it? While the forests have burned, we are 
spending the money there.
    There are a number of issues related to firefighting that 
are out of control of the Federal agencies and we know that. 
The weather is one. But unless somebody has some proof that it 
is completely different than it has been heretofore, weather is 
something that we face and we have in front of us all the time.
    The explosive growth of homes within the wildland-urban 
interface, and that is clearly one that is affecting us in a 
major way, Senator Bingaman, the building of homes in this 
area. I do not know what we can do about it, but nobody is 
doing much about it. It is just growing like wildfire. You got 
it.
    The failure of local and State governments to address the 
challenges of increased development in these areas is another 
thing we must be aware of. There are some issues that can and 
should be addressed by the Federal Government. I stand ready to 
work with all involved to find ways to reduce these costs.
    Senator Bingaman, clearly this is one where we want to work 
together if we can find a way. I am speaking about a law we 
passed in the 107th Congress requiring the Office of the 
Inspector General of Agriculture to investigate wildfire deaths 
which sometimes results in subsequent criminal charges. What I 
am talking about here is that at the same time we have to be 
careful about unintended consequences. One of them has to do 
with what happens when an inspector general of Agriculture 
investigates a wildfire death, and sometimes that results in 
criminal charges.
    This atmosphere could result in premature retirement of a 
lot of firefighters. If this happens our margins of safety will 
be reduced and quite likely it will increase the danger to the 
remaining firefighters. As a result, the costs of firefighting 
could go up as well.
    I look forward to working with you, Senator Bingaman, and 
others to find ways to reduce the costs of Federal wildland 
firefighting. I hope that we will find ways to do that. I am 
not sure which of the many suggestions are best, but we got to 
do something.
    Thank you, Senator, and thank you, witnesses. You are a 
very good panel to take time to be with us today.
    The Chairman. Okay, thank you very much.
    Let us briefly introduce this first panel and then call on 
Nina Rose Hatfield. She is the Deputy Assistant Secretary for 
Business Management and Wildland Fire in the Department of the 
Interior.
    Also on our panel is: the Honorable Mark Rey, Under 
Secretary for Natural Resources and the Environment in the 
Department of Agriculture; Robin Nazzaro, who is the Director 
of Natural Resources and Environment for the Government 
Accountability Office; and finally the Honorable Phyllis K. 
Fong, who is the Inspector General, Department of Agriculture.
    We appreciate all of you being here, and we will start with 
Nina.

 STATEMENT OF NINA ROSE HATFIELD, DEPUTY ASSISTANT SECRETARY, 
   BUSINESS MANAGEMENT AND WILDLAND FIRE, DEPARTMENT OF THE 
                            INTERIOR

    Ms. Hatfield. Thank you very much, Mr. Chairman, members of 
the committee. We welcome this opportunity to appear before you 
and provide the administration's view concerning wildland fire 
suppression cost containment. As the Department of the Interior 
and the Department of Agriculture work closely together in fire 
management, we are providing you a joint statement.
    We recognize that large fire events are costly and both 
Congress and the administration have repeatedly expressed their 
concerns about rising fire suppression costs. Our Departments 
share these concerns and are committed to reducing costs. Over 
the last several years, various studies and assessments 
dedicated to fire suppression costs have been conducted and we 
offer some testimony today to describe what we see as being the 
current situation, the progress that we have already made, and 
we believe we have made progress, and the measures that we are 
taking to tackle this important issue.
    When one reviews the 2006 season that we dealt with, what 
we found was that the 2006 fire season went directly after the 
2005 fire season. We did not have the typical slowdown that we 
have during a winter season. So all of this contributed to an 
unprecedented quantity of acres being burned, with 14 fires 
topping 100,000 acres in size, 5 on national forests, 7 in 
Bureau of Land Management districts, and 2 in State 
jurisdictions.
    So in 2006 the acres that were burned were 131 percent 
greater than the acres burned in 2000, almost a million acres 
larger than in 2005 and 65 percent greater than the 10-year 
average. So it is true that last year the Forest Service and 
DOI spent $1.9 billion on all fire suppression. These wildland 
fires were across all jurisdictions, totaling over 96,000 
incidents that resulted in the burning of 9.9 million acres.
    But we're pleased to note that, even in the face of what 
was the largest fire season on record, we continued to achieve 
nearly 98 percent success rate of attacking fires on the 
initial attack, and that is a rate that is comparable to how we 
have been able to fight fires in less severe years. Of these 
fires, approximately 26 percent of them exceeded the average 
cost as determined by a stratified cost index for the large 
Forest Service fires.
    Now, in an effort to decrease the severity of fire, the 
Departments have reduced hazardous fuels for nearly 20 million 
acres, 16 million acres through hazardous fuel reduction 
programs over the last several years since 2001 and about 4 
million acres of landscape restoration accomplished through 
other management activities that we are involved in. So while 
we have a very focused effort to remove the accumulation of 
hazardous fuel on our Federal lands, we believe that that is 
having a positive effect on the land and is lowering the risk 
of property damage.
    At the same time that we have been doing that, we certainly 
have been paying attention to cost controls and finding ways in 
which we can operate more efficiently. Based on a historical 
analysis of cost per fire an acre, the Forest Service large 
suppression costs over the past 3 years are essentially flat or 
below the 10-year average, and while the 2006 numbers are above 
the average based on a stratified cost index, we are encouraged 
that overall progress is shown in terms of the way that we have 
been providing and applying cost saving measures.
    So while the costs of many of our firefighting resources 
like aviation and other equipment have continued to increase 
faster than the rate of inflation, what we see is really an 
increase in productivity and cost control that has been 
associated with our suppression activities.
    Now, as you have mentioned, as we try to contain the cost 
of firefighting we recognize that there are multiple factors 
that contribute to the expense of fighting fires. These factors 
include the weather, fuel type, terrain, location with respect 
to the wildland-urban interface and other highly valued 
landscapes, as well as the managerial decisions that are made 
before and during fire incidents. In combination, these trends 
present a continuing challenge for our efforts to decrease the 
number of fires and the cost of incidents.
    We do know that over 8 million new homes were added to the 
WUI in the 1990's, representing about 60 percent of the new 
homes constructed in the United States, and this is triple the 
rate of growth and the rate of construction outside of the WUI, 
which obviously presents for us a challenge of addressing 
wildland fire costs in land areas such as locations as the WUI 
where the fire suppression is inherently more expensive for us.
    Another challenge has just been addressing the accumulation 
of biomass in our forests and that is the reason that we have 
worked so aggressively to reduce the amount of hazardous fuels 
on Federal lands and restore the health of our public forests 
and range lands. In 2006 more than half of the total acres that 
we treated were inside the WUI and we continue to maintain this 
as an emphasis, with the goal to treat approximately 2 million 
acres in the WUI throughout our hazardous fuel reduction 
program in this coming fiscal year.
    The reports from GAO and the USDA OIG certainly focused on 
managing fire suppression in the WUI and cost sharing for those 
activities between the Federal and non-Federal entities. I 
think that these reports certainly indicate the kinds of 
complexities that we have as we fight large, 
multijurisdictional fires, especially those located in the WUI.
    So over the past 20 years we have certainly developed a 
strong relationship, we think, with the States and our local 
cooperators. Over time the need to maximize efficiency and 
effectiveness has required a sharing of resources among all of 
us to fight these multijurisdictional fires. We recognize the 
need to review existing master cooperative agreements with our 
State partners and ensure consistency with the 2001 update to 
the Federal Wildland Fire Management Policy.
    Toward this end, we are working with the States on an 
inter-agency master cooperative agreement template that will 
improve our cost-sharing methods and provide greater 
consistency across the country.
    The Chairman. Could you summarize the rest of your 
statement, if you could?
    Ms. Hatfield. I was just going to say, and now Secretary 
Rey will address some of the specifics about what we have been 
doing.
    The Chairman. Terrific.
    Secretary Rey, we are glad to hear from you and glad to 
have you before the committee.

 STATEMENT OF MARK REY, UNDER SECRETARY FOR NATURAL RESOURCES 
           AND ENVIRONMENT, DEPARTMENT OF AGRICULTURE

    Mr. Rey. Thank you.
    The balance of our joint statement reviews some of the 
recent cost containment assessments, as well as summarizes the 
agency's response to the recommendations by the various 
parties. I will summarize those quickly and then announce some 
additional cost containment initiatives that we are putting in 
place today.
    The National Academy of Public Administration produced six 
reports on wildfire cost containment between 2001 and 2004. Our 
Departments have taken seven actions to address their 
recommendations, including the formation of an inter-agency 
coordinating body, the Wildland Fire Leadership Council. 
Another of their recommendations resulted in a 10-year strategy 
and implementation plan released in 2002 which was developed 
collaboratively by our Departments and the Western Governors' 
Association. That plan was updated last December and I want to 
thank the Western Governors in particular for their cooperation 
in updating and improving that plan as we have learned from the 
experience since its first implementation 4 years previously.
    Among the things that the Wildland Fire Leadership Council 
did was to provide an August 2004 report entitled ``Large Fire 
Suppression Costs and Strategies for Containment.'' The 
Departments are taking an aggressive approach to responding to 
the recommendations, including 11 separate actions, among them, 
as are summarized in our testimony, the creation of a 
comptroller position within the Forest Service to focus on cost 
containment and large fire strategic and tactical decisions, 
the appointment of an independent review panel, coordinated by 
the Brookings Institution, to conduct cost assessments on fires 
with suppression expenses exceeding $10 million.
    The Government Accountability Office has issued two reports 
of note: one in May 2006 involving wildland fire suppression 
and the need for additional guidance on cost sharing between 
Federal and non-Federal entities. To respond to this 
recommendation, the Departments are working with States through 
the Wildland Fire Leadership Council on a master cooperative 
agreement template to be used nationwide and a consistent 
approach for determining when a particular cost share method is 
most appropriate.
    A second GAO report in January 2005 entitled ``Wildland 
Fire Management: Important Progress Has Been Made, but 
Challenges Remain,'' resulted in a GAO recommendation for USDA 
and DOI to develop a cohesive fuel strategy that identifies the 
options and funding needed to address wildland fire problems. 
The Departments issued a cohesive fuel strategy late this past 
year to set forth priorities for fuel reduction projects to 
guide investments in reducing the risk of catastrophic wildland 
fire.
    Finally, as part of USDA's ongoing effort to contain 
wildland fire suppression costs and increase program 
accountability, the Forest Service requested that the USDA 
Office of Inspector General evaluate agency controls over these 
costs. The OIG report, which you will hear about shortly from 
the Inspector General, outlines 18 recommendations. The Forest 
Service has concurred with all of the findings and 
recommendations and stated that the recommendations will assist 
the agency as it continues to improve management efficiencies.
    In the wake of these challenges and the critical need to 
improve cost effectiveness, a group of Forest Service line 
officers and regional fire directors met in November 2006 and 
developed a set of significant wildfire cost containment 
measures working off of both the Inspector General's report and 
earlier reports. The most important actions involved in these 
recommendations include the following five:
    First, the adoption of appropriate management response as a 
tactical strategy. The appropriate management response was 
first articulated in the 2001 update of the Federal wildland 
fire management policy. This approach provides risk-informed 
fire protection by introducing the concept of managing wildland 
fire in relationship to the risks that the incident poses. If a 
wildland fire has potential benefits to natural resources and 
poses a relatively low risk to impact other valued assets, the 
fire would receive a lower intensity suppression effort. The 
Forest Service has developed a draft guidebook that presents a 
strategy to implement this approach.
    Second, the Forest Service Chief will designate an 
individual with access to a support team to provide oversight 
on fires of national significance and assist local units to 
collaborate with DOI on DOI lands.
    Third, national resources such as smoke jumpers, hot shot 
crews, and helicopters will be treated as national assets and 
moved to areas and incidents based on predicted services and on 
planning levels. This will create a more centralized and 
flexible management of these response resources and more 
efficient use of them in the conduct of a fire season.
    Fourth, aviation resources will be managed more effectively 
to reduce their high cost. A full-time national helicopter 
coordinator will be selected to provide oversight for the 
assignment and positioning of helicopters. Helicopter 
management will be centralized. It is a national resource. And 
the Forest Service will attempt to shift more to exclusive use 
versus more expensive ``call when needed'' contracts for 
helicopters.
    Fifth and finally, efforts will be made to maintain our 
initial success--initial attack success, while reducing the 
dependence on severity funding. The Forest Service will require 
lower thresholds for the approval of severity funding to be 
elevated for approval by the Chief. National shared resources 
will be prepositioned whenever possible in geographic areas 
where fire risk is the greatest during the fire season.
    So those will be five new cost containment initiatives that 
will begin during the 2007 fire season.
    In conclusion, much progress has been made and much, much 
more remains to be made. As Ms. Hatfield indicated, over the 
last 3 years the cost of suppression per acre and the cost per 
large fire has been flat, that is lower, given the increases 
caused by inflation. But given the fact that we are in an 
extended drought cycle and given the fact that upwards of two-
thirds of the houses built in the United States annually are 
being built in the wildland-urban interface, the real question 
is whether we can slow the rate of increase, not see these 
costs decreasing overall for the foreseeable future until we 
get a greater amount of fuels treatment done on the ground.
    That itself is being done. As Ms. Hatfield indicated, over 
the past 4 years we have treated upwards of over 20 million 
acres. By the end of this year we will be closer to 25 million 
acres, an area the geographic size of the State of Ohio. But 
there are still many more acres that need to be treated before 
we get to the point where because of those treatments we would 
see a significant decrease in the cost of fire suppression.
    With that, we would be happy to defer the balance of the 
statement.
    [The joint prepared statement of Ms. Hatfield and Mr. Rey 
follows:]

   Prepared Joint Statement of Mark Rey, Under Secretary for Natural 
  Resources and Environment, Department of Agriculture and Nina Rose 
Hatfield, Deputy Assistant Secretary, Business Management and Wildland 
                    Fire, Department of the Interior

                              INTRODUCTION

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to appear before you to provide the Administration's view 
concerning wildland fire suppression cost containment. As the 
Department of the Interior (DOI) and the U.S. Department of Agriculture 
(USDA) work closely together in fire management, the two Departments 
are providing a joint statement.
    Large fire events are costly, and both Congress and the 
Administration have repeatedly expressed their concerns about rising 
fire suppression costs. Our Departments share these concerns and are 
committed to reducing these costs. Over the last several years, various 
studies and assessments dedicated to fire suppression costs have been 
conducted by the National Academy of Public Administration, the 
Wildland Fire Leadership Council, the Government Accountability Office 
(GAO), and most recently, by the USDA Office of Inspector General (OIG) 
in its ``Audit Report--Forest Service Large Fire Suppression Costs.'' 
We welcome these assessments, and offer this testimony today to 
describe the current situation, the progress already made, and the 
measures we are taking to tackle this important issue.

                          THE 2006 FIRE SEASON

    The end of the 2005 fire season led directly into the 2006 fire 
season without the slowdown that typically occurs during the winter 
season. From November 2005 through April 2006. extremely low humidity, 
persistent drought conditions, and winds contributed to the ignition of 
fires through Texas and Oklahoma as well as Colorado, Missouri and New 
Mexico. This contributed to an unprecedented quantity of acreage 
burned, with 14 fires topping 100,000 acres in size, five located on 
National Forests, seven in Bureau of Land Management Districts, and two 
in State jurisdictions. In 2006, the acres burned were 131 percent 
greater than the acres burned in 2000, almost 1 million acres greater 
than 2005; and 65 percent greater than the ten-year average.
    Last year, the U.S. Forest Service spent over $1.5 billion on all 
fire suppression and nearly $400 million on 20 of the largest fires, 
while DOI spent approximately $424 million on all fire suppression. In 
the 2006 calendar year, the wildland fires across all jurisdictions 
totaled over 96,000 incidents, burning almost 9.9 million acres. Of 
those 9.9 million acres burned, approximately 5 million acres were on 
Federal lands and approximately 4.9 million acres were on non-Federal 
lands. We are pleased, that even in the face of the largest fire season 
on record, we achieved nearly 98% initial attack success, a rate 
comparable to less severe years. Of those fires not contained by 
initial attack, approximately 26 percent exceeded the average cost as 
determined by a stratified cost index for large Forest Service fires. 
Although the 2006 fire season had one of the highest number of fire 
starts in a single day (548), an extraordinary number of lightning 
caused fires (over 16,000), and one of the highest number of large 
fires at one time in nearly every region of the country, it also 
resulted in significantly fewer dwellings and other structures 
destroyed--750 homes lost in 2006 (240 homes during the March fires in 
Texas and Oklahoma) compared to 835 home lost in 2002 and over 4500 
homes lost in 2003.
    Since 2001, the Departments have reduced hazardous fuels on nearly 
20 million acres, 16 million acres through hazardous fuels reduction 
programs and approximately 4 million acres of landscape restoration 
accomplished through other land management activities.
    Our focused effort to remove accumulation of hazardous fuels on our 
Federal lands is having a positive effect on the land and is lowering 
the risk of property damage. In addition, the Departments have paid 
attention to cost controls and are finding ways to operate more 
efficiently. Based on a historical analysis of cost per fire and acre 
(FY 1995-2004), Forest Service large fire suppression costs over the 
past 3 years are essentially flat or below the 10-year average and, 
while the 2006 numbers are above the average based on the stratified 
cost index, we are encouraged by the progress of our efforts to apply 
cost-saving measures. With the cost of many firefighting resources such 
as aviation and other equipment increasing faster than the rate of 
inflation, this represents an increase in productivity and cost control 
associated with suppression operations. We face challenges ahead to 
control total suppression costs, but we are fully committed to the 
implementation of additional management efficiencies and improved 
performance accountability. We fully expect to see our future cost/
productivity trends for individual large fires continue to improve.

               WEATHER, WILDLAND URBAN INTERFACE AND WOOD

    Multiple factors contribute to the expense of fighting fires. These 
factors include weather, fuel type, terrain, location with respect to 
the wildland urban interface (WUI) and other highly valued landscapes, 
and managerial decisions made before and during fire incidents. In 
addition, changing temperatures and prolonged drought across many 
portions of the West, an expansion of the WUI and an increase in the 
number of people living in the WUI, and continued accumulation of wood 
fiber, or biomass, on our public forests requiring treatment are 
converging to increase the risk of catastrophic loss from wildland 
fires. In combination, these trends present continuing challenges in 
our efforts to decrease the number and cost of fire incidents.
    Over the last few years, we have reported regularly to Congress on 
these challenges. The 2005 Quadrennial Fire and Fuels Review by DOI and 
USDA examined the growth of the WUI, the area where structures and 
other human developments meet or intermingle with undeveloped wildland. 
The review found that 8.4 million new homes were added to the WUI in 
the 1990s, representing 60 percent of the new homes constructed in the 
United States. The rate of growth is triple the rate of construction 
outside of the WUI. The review illustrates the challenge of addressing 
wildland fire costs in land areas, such as locations in the WUI where 
fire suppression is inherently more expensive.
    Another challenge is addressing the accumulation of flammable 
biomass in our forests, a major cause of fire risk. The Departments 
have worked aggressively to reduce the amount of hazardous fuels on 
Federal lands and restore the health of our public forests and 
rangelands, utilizing the authorities provided under the President's 
Healthy Forests Initiative and the Healthy Forests Restoration Act to 
expedite action. In 2006, more than half of the total acres were 
treated inside the WUI. We will maintain this emphasis with a goal to 
treat approximately 2 million acres in the WUI through the hazardous 
fuels reduction program in 2007.
    Reports from GAO and USDA OIG focus on managing fire suppression in 
the WUI and on cost sharing for those activities between Federal and 
non-Federal entities. These reports accurately highlight the 
complexities associated with large, multi jurisdictional fires, 
especially those that threaten the WUI. Protecting human life and 
safety is our top priority; hence, fires in or adjacent to areas 
populated by homes and citizens generate a larger, more aggressive 
response that includes the use of structural and wildland engines, 
aircraft, and additional crews and equipment. Also, these lands tend to 
fall under a mix of ownership and jurisdictions that typically involve 
a response from Federal, State, county, and local entities. These 
factors add up to increased complexity and costs associated with 
incident response in the WUI.
    Over the past 20 years, the Agencies have developed strong 
relationships with State and local cooperators in wildland fire 
suppression. The assistance by cooperators on Federal fires has grown, 
as well as cooperative efforts to suppress fires that cross ownership 
boundaries. Over time, the need to maximize efficiency and 
effectiveness has required the sharing of resources to fight these 
multi jurisdictional fires across the landscape. The sharing of 
responsibilities, resources, and costs is often determined through 
cooperative agreements among the affected entities. Local units develop 
individual cost-sharing agreements for each large fire under the 
umbrella of a master cooperative agreement, with the State. We 
recognize the need to review existing master cooperative agreements 
with our State partners and ensure consistency with the 2001 update to 
the Federal Wildland Fire Management Policy. Toward this end, the 
Departments are working with the States on an interagency master 
cooperative agreement template to improve cost-share methods and 
provide greater consistency across the country.
    Costs are typically shared based on the number of acres burned in 
each jurisdiction, or a combination of acres burned and the first 24 
hours of support. Today, the complexity of responding to fires that 
cross jurisdictions, as well as the growth of those located in the WUI, 
has prompted interest in developing a different basis for cost sharing. 
Both the GAO and OIG reports state that more guidance on cost-share 
methods is needed so each entity's financial responsibility is clear. 
The Departments also recognize the need for clarity and consistency of 
cost sharing methods that will better account for the multitude of 
factors that affect each incident. We look forward to continuing to 
work with the States and other interested and affected entities in this 
effort.

                  RECENT COST CONTAINMENT ASSESSMENTS

The National Academy of Public Administration
    The National Academy of Public Administration (NAPA) produced six 
reports on wildfire cost containment between 2001 and 2004. The issues 
covered in these reports include: (1) improving the management 
practices concerning wildfires by the National Park Service; (2) 
enhancing capacity to implement Federal interagency policy; (3) 
strategies for containing costs; (4) improving equipment and services 
acquisition; (5) utilizing local firefighting forces; (6) and enhancing 
hazard mitigation capacity. Our Departments have taken the following 
actions to address the recommendations in these reports:

   The National Park Service improved its risk assessment and 
        coordination practices.
   An interagency coordinating body, the Wildland Fire 
        Leadership Council (WFLC), was formed and a strong 
        intergovernmental partnership has resulted. The Wildland Fire 
        Leadership Council's report on cost containment is discussed 
        later in this statement.
   A 10-year Strategy and Implementation Plan, released in 
        2002, was developed collaboratively by the DOI, USDA, the 
        Western Governors Association as well as southern Governors, 
        counties and tribes. An updated Implementation Plan was 
        released in December 2006.
   Incident business advisors have been trained and assigned to 
        help implement cost containment measures.
   Procurement analysts have been assigned to systematically 
        assess alternative sources of supply for firefighting equipment 
        and services, as recommended in the report.
   The Agencies have aggressively promoted the creation and 
        training of Type-3 Incident Management Teams, with the support 
        of the National Association of State Foresters and the 
        International Association of Fire Chiefs.
   The Agencies aggressively promoted and provided financial 
        assistance toward creating fire-resistant communities and 
        defensible spaces through collaboration with communities and 
        local entities. The Agencies have worked with States to expand 
        community protection through Community Wildfire Protection 
        Plans, authorized under the Healthy Forests Restoration Act, 
        and the FIREWISE program.
   The Agencies have established fire suppression cost levels 
        that require additional oversight at the regional or national 
        level for review, identifying and approving a strategy in the 
        Wildland Fire Situation Analysis.
Wildland Fire Leadership Council
    In August 2004, the WFLC Strategic Issues Panel issued a report 
entitled, ``Large Fire Suppression Costs: Strategies for Cost 
Management.'' The report, developed by senior level managers and 
administrators from Federal, State and local governments, examined 12 
reports that spanned five years and included more than 300 
recommendations. The report identified factors that will affect 
wildfire costs for the coming decades, including forest fuels, 
demographic trends, and climatic conditions, and provided 
recommendations aimed at slowing the rate of such costs.
    The Departments are taking an aggressive approach to the WFLC 
report, emphasizing land management decisions that affect fuel loading 
and resource protection, increasing the skills and numbers of local 
firefighters, advancing integrated data management, and developing 
metrics and accountability measures to evaluate managerial cost 
effectiveness. Seven multi-agency, multi-disciplinary Cost Action Teams 
(CATs) were formed by the WFLC and have completed their work. The 
following provides examples of the Departments' efforts to date:

   The Agencies are strengthening and improving the 
        availability of local resources through coordinated Federal and 
        State financial support. Federal and State partners are 
        assessing existing fire service funding programs to: (1) 
        determine how existing funding can be more effectively 
        leveraged; (2) improve coordination between the programs; (3) 
        improve program information flow to customers; and (4) provide 
        grant preparation assistance and other technical services to 
        rural fire departments.
   The Agencies have issued guidance to incorporate 
        consideration of wildfire suppression costs and fuel management 
        efforts in land and resource management planning.
   The Agencies will continue to implement initiatives that 
        assist in large-scale planning such as: (1) the WFLC-sponsored 
        burn severity mapping project; (2) LANDFIRE; (3) Fire Program 
        Analysis; (4) FIREWISE; (5) Community Wildfire Protection 
        Planning; and (6) Wildland Fire Decision Support Modeling.
   The Departments are working to integrate numerous data 
        collection/analysis systems in order to reduce the cost of data 
        collection, ensure data quality, and eliminate redundancy. The 
        Fire Occurrence Reporting Study, which analyzed existing 
        information collected in Federal and State fire-reporting 
        systems, is scheduled for final delivery in February 2007. 
        Under the National Wildland Fire Enterprise Architecture 
        project, we are integrating resource mobilization analysis and 
        support systems to serve as the vehicle for a cohesive business 
        transformation process.
   The Departments have adopted a Stratified Cost Index 
        performance measure that uses cost data from around the nation 
        to set a benchmark of average cost for a fire incident that 
        incorporates sensitivity to location and conditions. The Forest 
        Service is implementing this performance measure this year. DOI 
        is still compiling the necessary background data and research, 
        and the measure will be implemented as soon as this is 
        completed.
   The Forest Service has created a Comptroller position to 
        focus on cost containment and large fire strategic and tactical 
        decisions.
   As required by Congress, the Secretary of Agriculture has 
        appointed an independent review panel, coordinated by the 
        Brookings Institution, to conduct cost assessments on fires 
        with suppression expenditures exceeding $10 million.
   Cost Review Teams review fires in which costs exceed $5 
        million in order to evaluate strategic, tactical and overall 
        business management decisions on the incident.
   Scientific studies by the Southern and Rocky Mountain 
        Research Stations and the Scripps Research Institute were 
        conducted to determine the predictability of emergency 
        suppression expenditures.
   The Agencies conduct ``After Action'' Reviews each Fall that 
        assess the effectiveness of allocation of Forest Service and 
        DOI fire suppression resources during high levels of fire 
        activity at National Multi-Agency Coordinating Group/Geographic 
        Area Multi-Coordinating Group postseason meetings.
   Standards were developed for Local Response Organizations 
        (Type 3 Incident Management Teams) to enhance a community's 
        ability to independently manage fires.
The Government Accountability Office
            Wildland Fire Suppression: Lack of Clear Guidance Raises 
                    Concerns about Cost Sharing between Federal and 
                    Nonfederal Entities
    In May 2006, the Government Accountability Office (GAO) issued a 
report entitled, ``Wildland Fire Suppression: Lack of Clear Guidance 
Raises Concerns about Cost Sharing between Federal and Nonfederal 
Entities.'' The report found that there was a lack of clear guidance in 
determining appropriate cost-share methods between Federal and non-
federal entities. The report's primary recommendation is that USDA and 
DOI work with relevant State entities to provide more specific guidance 
on when to use particular cost-sharing methods and clarify the 
financial responsibilities for fires that burn or threaten to burn 
across multiple jurisdictions. To respond to this recommendation, the 
Departments are working with the States on a master cooperative 
agreement template to use nationwide and a consistent approach for 
determining when a particular cost-share method is most appropriate.
            Wildland Fire Management: Important Progress Has Been Made, 
                    but Challenges Remain to Completing a Cohesive 
                    Strategy
    In January 2005, the GAO issued a report entitled, ``Wildland Fire 
Management: Important Progress Has Been Made, but Challenges Remain to 
Completing a Cohesive Strategy'' (GAO-05-147). The report recommended 
that USDA and DOI provide Congress with a plan outlining critical steps 
and time frames for completing a cohesive strategy that identifies the 
options and funding needed to address wildland fire problems. In 
response, USDA and DOI have collaborated with our partners on the 
following:

   Cohesive Fuels Strategy: The Departments issued a Cohesive 
        Fuels Strategy to set forth priorities for fuels reduction 
        projects to guide investments in reducing risks of catastrophic 
        wildland fires and enhance strategically placed `defensible 
        space' in areas at risk.
   LANDFIRE: LANDFIRE is a geospatial tool for identifying 
        areas across the nation at increased risk of fire due to 
        accumulation of fuels. The use of LANDFIRE data will improve 
        collaboration among Federal, State and local interests with 
        regard to fire and other natural resource management efforts. 
        Currently, the LANDFIRE project has completed mapping the 
        Western portion of the contiguous U.S.; the Eastern portion of 
        the contiguous U.S. is scheduled to be completed by 2008. 
        Alaska and Hawaii will be completed by 2009.
   Fire Program Analysis (FPA): The Fire Program Analysis (FPA) 
        System is a tool to provide managers with a common interagency 
        approach to fire management planning and budgeting. FPA will 
        enable managers to better evaluate the effectiveness of 
        alternative fire management strategies in order to meet land 
        management goals and objectives. FPA will reflect fire 
        objectives and performance measures for the full scope of fire 
        management activities. The prototype is scheduled to be 
        delivered in the summer of 2007 with system delivery expected 
        in 2008.
The USDA Office of the Inspector General
    As part of USDA's ongoing effort to contain wildfire suppression 
costs and increase the program's accountability, Forest Service senior 
management requested that the USDA Office of the Inspector General, 
Western Region (OIG) evaluate agency controls over these costs. In 
November 2006, the OIG released their ``Audit Report--Forest Service 
Large Fire Suppression Costs.'' The OIG found that the Forest Service 
could strengthen the cost-effectiveness of its fire fighting without 
sacrificing safety by: (1) improving equitable cost-share of wildfire 
suppression costs with nonfederal entities; (2) increasing wildland 
fire use to reduce forest vegetation and underbrush that may fuel 
future fires; and (3) establishing controls to assess performance of 
line officers and incident commanders in controlling costs.
    OIG outlines 18 recommendations in its Audit Report. On November 
16, 2006, the Forest Service provided an official response, to the 
report. The Forest Service concurred with all of the findings and 
recommendations and stated that the recommendations will assist the 
agency as it continues to improve its management efficiencies to save 
taxpayers' dollars while providing safe and effective suppression of 
wildfires. The Forest Service response includes a specific commitment 
and an estimated completion date for each of the recommendations in the 
report. The Audit report and Forest Service response is attached to 
this testimony.

    MANAGEMENT EFFICIENCY PROPOSALS FOR LARGE FIRE COST CONTAINMENT

    Large fire costs have been a persistent challenge for the 
Departments and threaten to compromise the achievement of other key 
areas of our missions. Multiple internal and external reviews have been 
conducted, including those mentioned above, and have generated over 300 
recommendations to curb increasing suppression costs.
    In the wake of these challenges and the critical need to constantly 
improve cost-effectiveness, a group of Forest Service Line Officers, 
regional Fire Directors and Regional Foresters met in November, 2006 
and developed a set of significant wildfire cost-containment measures 
to further enhance our ability to efficiently manage suppression costs. 
This effort resulted in a list of management efficiencies which focus 
on leadership, operations, aviation and general management practices. 
The Forest Service is moving forward to implement the list of 
management efficiencies; DOI is reviewing them with the intent to 
address them on an interagency basis, as appropriate. We anticipate 
that some of these measures will be implemented in 2007, while others 
will be implemented over the long-term. The most significant actions 
include:

1. Appropriate Management Response
    The Appropriate Management Response (AMR) was articulated in the 
2001 update of the Federal Wildland Fire Management Policy. This 
approach provides risk informed fire protection by introducing the 
concept of managing wildland fire in relationship to the risk that the 
incident poses. If a wildland fire has potential benefits to natural 
resources and poses a relatively low risk to impact other valued 
assets, the fire would receive a lower intensity suppression effort. 
Conversely, if a fire incident is determined to pose high risk to 
property or community high suppression efforts would be applied. The 
approach utilizes risk management and tools such as probability data 
and analyses to inform rigorous and systematic ways to reach decisions 
that allocate resources on the basis of risk posed by the wildfire and 
the strategy used by managers to address it. The Forest Service has 
developed a draft guidebook that presents a coherent strategy to 
implement this approach. DOI is reviewing this guidebook and will work 
with Forest Service on interagency implementation.

2. Forest Service Chief's Principal Representative
    The Forest Service Chief will designate an individual with access 
to a support team to provide oversight on fires of national 
significance and assistance to local units and will collaborate with 
the DOI on DOI lands. The individual will be highly experienced in 
wildfire management, and the team will have knowledge and capability 
with decision-support tools. These changes will immediately provide for 
experienced decision-making that should reduce costs on large fires.

3. National Shared Resources
    National resources such as smoke jumpers, hot shot crews and 
helicopters will be treated as national assets and moved to areas and 
incidents based on Predictive Services and on Planning Levels. This 
will create a more centralized and flexible management of these 
response resources. Funding and decision-making from the national level 
will ensure consistency across regions, flexibility in the assignment 
of resources and eliminate concentration of resources in a geographic 
area that costs time and money.

4. Aviation Resource Cost Management
    Aviation resources will be managed more effectively to reduce their 
high cost. A full-time National helicopter coordinator will be selected 
to provide oversight for the assignment and positioning of helicopters. 
Helicopter management will be centralized as a national resource. The 
Forest Service will attempt to shift more to ``exclusive use'' versus 
``call when needed'' contracts for helicopters. This will increase 
preparedness costs initially, but is expected to greatly reduce large 
fire suppression cost with potential saving of tens of millions of 
dollars per year. We will pursue longer term aviation contracts for all 
aviation resources with increased performance-based contracting. DOI 
also is pursuing strategies to reduce its costs.

5. Initial Attack and Severity Funding
    Efforts will be made to maintain our initial attack success while 
reducing the dependence on severity funding. The Forest Service will 
require lower thresholds for the approval of severity funding to be 
elevated for approval by the Chief. National Shared Resources will be 
pre-positioned whenever possible in geographic areas where fire risk is 
the greatest during the fire season. The Forest Service and DOI 
agencies will continue to submit a coordinated severity request so as 
to not duplicate effort or expense.
    The Departments take the issue of large fire cost containment very 
seriously and are actively moving forward to implement these important 
changes. A comprehensive list of management efficiencies has been 
developed to guide action over the short, intermediate and long-term 
and to produce results. The Forest Service and DOI are working together 
in collaboration and our staff is committed to action. The Forest 
Service Chief has conducted an all-day meeting and shared his intent to 
execute action with Regional Foresters, and, this week, Incident and 
Area Commanders of the Incident Management Team have met to discuss the 
implementation of the measures.

                               CONCLUSION

    We appreciate the recommendations provided in these recent cost-
containment assessments. We expect that the management improvements 
implemented and underway will enable managers to be better prepared for 
wildfires; help managers to make better decisions during firefighting 
operations, and provide managers with the tools necessary to analyze, 
understand and manage fire suppression costs. While the factors of 
drought, fuels build-up in our forests and increasing development in 
fire prone areas have the potential to keep the number of incidents and 
total cost of wildfire suppression high of some time to come, we are 
positive about our direction to address wildland fire suppression costs 
and are committed to action. We believe that the measures discussed 
today promise to expand efficiency and reduce suppression costs. We 
look forward to continued collaboration with our Federal, State, local, 
Tribal, and other non-Federal partners to address our shared goal of 
effectively managing wildfire suppression costs.
    Thank you for the opportunity to discuss these issues. We would be 
happy to answer any questions that you might have.

    The Chairman. Thank you very much.
    Next is Robin Nazzaro, who is the Director of Natural 
Resources and Environment for the Government Accountability 
Office. Thank you for being here.
    Senator Domenici. Mr. Chairman.
    The Chairman. Yes, Senator Domenici?
    Senator Domenici. I am sorry to bother. But I wanted to 
ask, Secretary, could you get back to the live mike for just a 
moment? You tell us about all these kind of problems that we 
have about the growing number of houses that are in the way, so 
as to speak, that were not there. And then you end up saying we 
are doing a pretty good job.
    But are we really doing something significant to change 
this growth that is obviously going to cause fires that we did 
not plan on, that are going to be hard to put out, and they are 
going to ravish the public use domain just because they are 
tender, they burn and they are big burners. Can you address 
that for us? What are we going to do about it?
    Mr. Rey. As to the growth of houses in the wildland-urban 
interface, that has not been a Federal responsibility.
    Senator Domenici. But I am asking. You are a professional. 
Who is doing what about it?
    Mr. Rey. I think that there has been very little done in 
restricting the construction in fire-dependent ecosystems. We 
are today in that regard where we were in flood plain 
development 15 or 20 years ago. That is something that State 
and local governments are going to need to do. If we were to 
work with them more intensively on anything, that would bring 
us the best financial benefit, I think, in reducing 
firefighting costs.
    But the ideal today in the fastest growing region of the 
country, which is the Intermountain West, is to have a nice 
house out in the woods. That is why people are moving to 
Colorado, to Arizona, to all of the fastest growing States in 
the country. And all of that growth is occurring, or much of 
it, most of it, is occurring in the wildland-urban interface. 
We can reduce fire risk by cooperative programs like Fire Wise, 
but every new subdivision presents a new challenge and 
inherently more expensive fire suppression costs if we are 
going to defend that subdivision.
    The Chairman. All right.
    Senator Domenici. Thank you, Mr. Chairman.
    The Chairman. Ms. Nazzaro.

STATEMENT OF ROBIN M. NAZZARO, DIRECTOR, NATURAL RESOURCES AND 
         ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Nazzaro. Thank you, Mr. Chairman and members of the 
committee.
    The Chairman. Let me just urge, folks, if you can give us 
the summary of your comments, we will include the full 
statement in the record. That will be best. Thanks.
    Ms. Nazzaro. Good. I am happy to be here today to discuss 
the key actions we believe Federal wildland fire management 
agencies need to complete to help contain the rising costs of 
preparing for and responding to fires. I will skip all the 
background section because I think you certainly understand the 
magnitude of the problems here. I will go right to the findings 
from our recent reports plus the preliminary findings from work 
under way for this committee, which together summarize the key 
wildland fire management weaknesses and critical actions that 
we believe the agencies need to complete if they are to 
effectively contain the rising costs of responding to wildland 
fires.
    Specifically, we believe the agencies need to: First, 
develop a cohesive strategy that identifies the options and 
associated funding to reduce fuels and address wildland fire 
problems. In 1999, to address the problem of excess fuels and 
their potential to increase the severity of wildland fires and 
the cost of suppression efforts, we recommended that such a 
cohesive strategy be developed. In 2005 and 2006, because the 
agencies had not yet developed such a strategy, we reiterated 
the need for a cohesive strategy and broadened our 
recommendations' focus to better address the interrelated 
nature of fuel reduction efforts and wildland fire response.
    As an interim step, we also recommended that the agencies 
develop a tactical plan outlining the steps and time frames 
needed for completing a cohesive strategy. Such a strategy and 
plan would be helpful to the Congress and to the agencies in 
making informed decisions about effective and affordable long-
term approaches to addressing the Nation's wildland fire 
problem. Although the agencies concurred with our 
recommendations, neither a cohesive strategy nor a tactical 
plan has been developed.
    Second, the agencies need to clarify their guidance for 
sharing wildland fire suppression costs with non-Federal 
entities. In 2006, to help address the rising costs of 
responding to fires that threaten both Federal and non-Federal 
lands and resources, we recommended that the Federal agencies, 
working with relevant State agencies, clarify the financial 
responsibility for these fires and provide more specific 
guidance as to when particular cost-sharing methods should be 
used. The method used to share the costs of suppressing a 
wildland fire among responsible entities can have significant 
financial consequences for the entities involved, potentially 
amounting to millions of dollars. The need for clarity about 
how to share the rising costs of wildland fire protection is 
becoming more acute as increasing numbers of homes are built in 
areas at risk from wildland fires. Federal agencies are 
updating their guidance on possible methods for sharing costs 
between Federal and non-Federal entities and on the 
circumstances when each method typically would be used. It is 
unclear, however, how the agencies will ensure that such 
guidance is followed.
    Third, the agencies need to establish clear goals, 
strategies, and performance measures to help contain wildland 
fire costs. Although the agencies have taken certain steps to 
help contain wildland fire costs, the effectiveness of these 
steps may be limited because agencies have not established 
clear cost containment goals for the wildland fire program, 
including how containing costs should be considered in relation 
to other wildland fire program goals such as protecting lives, 
resources, and property; strategies to achieve these goals; or 
effective performance measures to track their progress.
    Each of these efforts plays an important role in addressing 
the issue of containing wildland fire costs, but none of them 
alone can solve the problem. The Federal Government is 
expending substantial effort and billions of dollars in 
attempting to address the problem. The agencies, however, 
despite promising to do so, still cannot articulate how the 
steps being taken fit together to form a comprehensive and 
cohesive strategy to contain costs or to address the many 
wildland fire management problems we and others have reported 
over the past 7 years.
    For cost containment efforts to be effective, the agencies 
need to integrate cost containment goals with the other goals 
of the wildland fire program, recognizing the trade-offs that 
will be needed to meet desired goals within the context of 
fiscal constraints. Further, because the agencies' efforts to 
reduce fuels and prepare for and suppress wildland fires are 
interrelated, a cohesive strategy is fundamental if the 
agencies are to contain costs.
    Mr. Chairman, that concludes my prepared statement. I would 
be pleased to answer any questions you or other members of the 
committee may have.
    [The prepared statement of Ms. Nazzaro follows:]

Prepared Statement of Robin M. Nazzaro, Director, Natural Resources and 
             Environment, Government Accountability Office

                         WHY GAO DID THIS STUDY

    Over the past two decades, the number of acres burned by wildland 
fires has increased, often threatening human lives, property, and 
ecosystems. The cost of responding to wildland fires has also grown, 
especially as more homes are built in or near. wildlands, an area 
called the wildland-urban interface. Past management practices, 
including a concerted federal policy in the 20th century of suppressing 
fires to protect communities and ecosystems, unintentionally resulted 
in steady accumulation of dense vegetation that can fuel large, 
intense, and often costly wildland fires.
    GAO was asked to identify actions that federal wildland fire 
agencies need to take to help contain federal wildland fire 
expenditures. GAO has identified these actions in three of its reports 
addressing fuel reduction and cost-sharing efforts and as part of an 
ongoing review of federal agencies' efforts to con wildland fire 
preparedness and suppression costs for this committee. Specifically, 
GAO focused on examining agencies' efforts to (1) reduce accumulated 
fuels and address wildland fire problems, (2) share with nonfederal 
entities the costs of responding to multijurisdictional fires, and (3) 
contain the costs of preparing for and responding to wildland fires.

                        Wildland Fire Management
 Lack of a Cohesive Strategy Hinders Agencies' Cost-Containment Efforts

                             WHAT GAO FOUND

    Over the past 7 years, GAO has recommended a number of actions 
federal wildland fire agencies should take to improve their management 
of wildland fire activities, actions that could also help contain the 
rising federal expenditures for responding to wildland fires. These 
agencies--the Forest Service within the Department of Agriculture and 
land management agencies within the Department of the Interior--
concurred with GAO's recommendations but have not completed, or in some 
cases have not yet begun, needed actions. GAO's ongoing review of 
federal agencies' efforts to contain wildland fire preparedness and 
suppression costs has also identified other actions that may be needed. 
Specifically, the agencies need to:

   Develop a cohesive strategy that identifies the options and 
        associated funding to reduce fuels and address wildland fire 
        problems. In 1999, to address the problem of excess fuels and 
        their potential to increase the severity of wildland fires and 
        the cost of suppression efforts, GAO recommended that a 
        cohesive strategy be developed that identified the available 
        long-term options and associated funding for reducing these 
        fuels. In 2005 and 2006, because the agencies had not yet 
        developed one, GAO reiterated the need for such a strategy but 
        broadened its focus to better address the interrelated nature 
        of fuel reduction efforts and wildland fire response. GAO also 
        recommended that, as an interim step, the agencies develop a 
        tactical plan outlining the steps and time frames needed for 
        completing a cohesive strategy. As of January 2007, the 
        agencies had not developed either a cohesive strategy or a 
        tactical plan.
   Clarify their guidance for sharing wildland fire suppression 
        costs with nonfederal entities. In 2006, to address the rising 
        costs of responding to fires that threaten both federal and 
        nonfederal lands and resources, GAO recommended that the 
        federal agencies provide more specific guidance as to when 
        particular cost-sharing methods should be used. The cost-
        sharing method used can have significant financial consequences 
        for the entities involved--potentially amounting to millions of 
        dollars. As of January 2007, the agencies were updating their 
        guidance on possible cost-sharing methods and when each 
        typically would be used, but it is unclear how the agencies 
        will ensure that the guidance is followed.
   Establish clear goals, strategies, and performance measures 
        to help contain wildland fire costs. Preliminary findings from 
        GAO's ongoing work indicate that the effectiveness of agencies' 
        efforts to contain costs may be limited because the agencies 
        have not clearly defined their cost-containment goals, 
        developed a strategy for achieving those goals, or developed 
        related performance measures. For these efforts to be 
        effective, the agencies need to integrate cost-containment 
        goals with the other goals of the wildland fire program--such 
        as protecting life and property--and to recognize that trade-
        offs will be needed to meet desired goals within the context of 
        fiscal constraints.

    Mr. Chairman and Members of the Committee:
    I am pleased to be here today to discuss the key actions that we 
believe federal wildland fire management agencies--the Forest Service 
within the Department of Agriculture and four agencies within the 
Department of the Interior--need to complete to help contain the rising 
costs of preparing for and responding to wildland fires. Increasing 
wildland fire threats to communities and ecosystems, combined with 
rising costs of addressing those threats--trends that we and others 
have reported on for many years--have not abated. On average, the 
acreage burned annually by wildland fires from 2000 to 2005 was 70 
percent greater than the acreage burned annually during the 1990s. 
Appropriations for wildland fire management activities tripled from 
about $1 billion in fiscal year 1999 to nearly $3 billion in fiscal 
year 2005. Although the agencies are still refining their data, 2006 
was an especially severe year, with almost 10 million acres burned and 
what are likely to be the highest federal fire suppression expenditures 
ever. A number of factors have contributed to more-severe fires and 
corresponding increases in expenditures for wildland fire management 
activities. These factors include an accumulation of fuels due to past 
fire suppression policies; severe weather and drought in some areas of 
the country; and growing numbers of homes built in or near wildlands, 
an area often called the wildland-urban interface. In light of the 
federal deficit and the long-term fiscal challenges facing the nation, 
attention has increasingly focused on ways to contain these growing 
expenditures and to ensure that the agencies' wildland fire activities 
are appropriate and carried out in a cost-effective and efficient 
manner.
    My testimony today includes findings from three of our recent 
reports, plus preliminary findings from work under way, which together 
summarize key wildland fire management weaknesses we have identified 
over the last 7 years, as well as critical actions the agencies need to 
complete if they are to effectively contain the rising costs of 
responding to wildland fires. Specifically, my testimony focuses on 
three issues: the agencies' efforts to (1) reduce fuels and address 
wildland fire problems,\1\ (2) share with nonfederal entities the costs 
of responding to fires that burn or threaten to burn multiple 
jurisdictions,\2\ and (3) contain federal expenditures of preparing for 
and responding to wildland fires. To evaluate these issues, we reviewed 
selected reports that we have issued since 2000, as well as those by 
other federal agencies or outside organizations, that assessed federal 
wildland fire management. We reviewed pertinent agency plans, policies, 
procedures, reports, and financial documents, and we interviewed 
federal and nonfederal officials to identify steps federal agencies 
have taken to address these areas and the challenges remaining. We 
performed our work in accordance with generally accepted government 
auditing standards from May 2006 through January 2007.
---------------------------------------------------------------------------
    \1\ GAO, Wildland Fire Management: Update on Federal Agency Efforts 
to Develop a Cohesive Strategy to Address Wildland Fire Threats, GAO-
06-671R (Washington, D.C.: May 1, 2006); Wildland Fire Management: 
Important Progress Has Been Made, but Challenges Remain to Completing a 
Cohesive Strategy, GAO-05-147 (Washington, D.C.: Jan. 14, 2005).
    \2\ GAO, Wildland Fire Suppression: Lack of Clear Guidance Raises 
Concerns about Cost Sharing between Federal and Nonfederal Entities, 
GAO-06-570 (Washington, D.C.: May 30, 2006).
---------------------------------------------------------------------------
                                SUMMARY

    In summary, federal wildland fire management agencies need to take 
a number of actions to strengthen their overall management of the 
wildland fire program, actions that could lead to more effective and 
efficient use of scarce resources and help the agencies to better 
contain costs. While we have made a number of recommendations over the 
last 7 years to improve wildland fire management--and agencies have 
largely concurred with these recommendations--the agencies have made 
limited progress in implementing the needed changes. Further, our 
preliminary work on federal agencies' efforts to contain wildland fire 
preparedness and suppression costs has also identified other actions 
that may be needed. Specifically, we believe that the agencies need to:

   Develop a cohesive strategy that identifies the options and 
        associated funding to reduce fuels and address wildland fire 
        problems. In 1999, to address the problem of excess fuels and 
        their potential to increase the severity of wildland fires and 
        cost of suppression efforts, we recommended that a cohesive 
        strategy be developed that identified the available long-term 
        options and associated funding for reducing fuels. By 2005, the 
        agencies had yet to develop such a strategy, and we reiterated 
        the need for a cohesive strategy and broadened our 
        recommendation's focus to better address the interrelated 
        nature of fuel reduction efforts and wildland fire response. We 
        also recommended that the agencies develop a tactical plan 
        outlining the steps and time frames needed for completing a 
        cohesive strategy. Such a strategy and plan would be helpful to 
        the Congress and the agencies in making informed decisions 
        about effective and affordable long-term approaches to 
        addressing the nation's wildland fire problems. Although the 
        agencies concurred with our recommendations, as of January 
        2007, neither a cohesive strategy nor a tactical plan had been 
        developed.
   Clarify their guidance for sharing wildland fire suppression 
        costs with nonfederal entities. In 2006, to help address the 
        rising costs of responding to fires that threaten both federal 
        and nonfederal lands and resources, we recommended that the 
        federal agencies, working with relevant state entities, clarify 
        the financial responsibility for these fires and provide more 
        specific guidance as to when particular cost-sharing methods 
        should be used. The method used to share the costs of 
        suppressing a wildland fire among responsible entities can have 
        significant financial consequences for the entities involved--
        potentially amounting to millions of dollars. The need for 
        clarity about how to share the rising costs of wildland fire 
        protection is becoming more acute as increasing numbers of 
        homes are built in areas at risk from wildland fires. As of 
        January 2007, the agencies were updating guidance on possible 
        methods for sharing costs between federal and nonfederal 
        entities and the circumstances when each method typically would 
        be used. It is unclear, however, how the agencies will ensure 
        that such guidance is followed.
   Establish clear goals, strategies, and performance measures 
        to help contain wildland fire costs. Preliminary findings from 
        our work under way for this committee indicate that, although 
        the agencies have taken certain steps to help contain wildland 
        fire costs, the effectiveness of these steps may be limited 
        because agencies have not established clear cost-containment 
        goals, strategies to achieve those goals, or effective 
        performance measures to track their progress.

    Each of these efforts plays an important role in addressing the 
issue of containing wildland fire costs, but none of them alone can 
solve the problem. For cost-containment efforts to be effective, the 
agencies need to integrate cost-containment goals with the other goals 
of the wildland fire program--such as protecting life, resources, and 
property--and to recognize that trade-offs will be needed to meet 
desired goals within the context of fiscal constraints. Further, 
because the agencies' efforts to reduce fuels and to prepare for and 
suppress wildland fires are interrelated, the cohesive strategy we 
previously recommended for responding to wildland fires is fundamental 
if agencies are to contain costs.

                               BACKGROUND

    Wildland fires ignited by lightning are both natural and inevitable 
and play an important ecological role on the nation's landscape. In 
addition to maintaining habitat diversity, releasing soil nutrients, 
and causing the seeds of fire-dependent species to germinate, fire 
periodically removes undergrowth, small trees, and vegetation that can 
otherwise build up and intensify subsequent fires. However, various 
human land use and management practices, including decades of 
suppressing wildland fires, have altered the normal frequency of fires 
in many forest and rangeland ecosystems, leading to 
uncharacteristically dense vegetation and atypical fire patterns in 
some places. At the same time, more homes and communities are being 
built in areas where fires can occur, increasing risks to human life, 
property, and infrastructure. Experts estimate that between 1990 and 
2000, 60 percent of all new housing units in the United States were 
built in the wildland-urban interface, and by 2000, about 38 percent of 
housing units overall were located in the wildland-urban interface.\3\ 
Recent media reports indicate that this trend of growth in the 
wildland-urban interface continues. Finally, agency analyses indicate 
that climate change and related drought may also be responsible for 
significant increases in the occurrence of, and costs of responding to, 
wildland fire.
---------------------------------------------------------------------------
    \3\ The wildland-urban interface is defined as the area where 
structures and other human developments meet or intermingle with 
undeveloped wildland.
---------------------------------------------------------------------------
    Increases in the size and severity of wildland fires, and in the 
cost of fighting them, have led federal agencies to fundamentally 
reexamine their approach to wildland fire management. For decades, 
federal agencies aggressively suppressed wildland fires and were 
generally successful in decreasing the number of acres burned. In some 
areas of the country, however, rather than eliminating severe wildland 
fires, decades of suppression disrupted ecological cycles and began to 
change the structure and makeup of forests and rangelands, increasing 
the land's susceptibility to fire. Increasingly, the agencies have 
recognized the key role that fire plays in many ecosystems and the 
utility of fire itself as a tool in managing forests and watersheds. 
The agencies worked together to develop the Federal Wildland Fire 
Management Policy in 1995, which for the first time formally recognized 
the essential role that fire plays in maintaining natural systems. This 
policy was subsequently reaffirmed and updated in 2001. In addition to 
noting the negative effects of past wildland fire suppression, the 
policy also recognized that continued development in the wildland-urban 
interface has placed more values at risk from wildland fire while 
increasing the complexity and cost of wildland fire suppression 
operations.
    To help address these trends, the policy directed agencies to 
consider management objectives and the values at risk when determining 
how or whether to suppress a wildland fire. Under this approach, termed 
``appropriate management response,'' the agencies may fight fires that 
threaten communities or other highly valued areas more aggressively 
than they fight fires in remote areas or in areas where natural fuel 
reduction would be beneficial. In some cases, the agencies may simply 
monitor the fire, or take only limited suppression actions, to ensure 
that it continues to pose little threat to valued resources. Under 
current interagency policy, local federal units must develop land 
management and fire management plans that document approved fire 
management strategies for each acre of burnable land and other 
important information about how the land will be managed, including 
local values at risk, needed local fuel reduction, and rehabilitation 
actions. Once a fire starts, land management and fire management 
specialists are to identify and implement the appropriate management 
response, in accordance with the unit's approved land and fire 
management plans.
    Responding to wildland fires--which can bum across federal and 
nonfederal jurisdictions--often requires coordination and collaboration 
among federal, tribal, state, and local firefighting entities to 
effectively protect lives, homes, and resources. Five federal 
agencies--the Forest Service within the Department of Agriculture and 
the Bureau of Indian Affairs, Bureau of Land Management, Fish and 
Wildlife Service, and National Park Service within the Department of 
the Interior--fight wildland fires. These federal agencies work 
together with nonfederal firefighting entities to share personnel, 
equipment, and supplies and to fight fires, regardless of which 
entities have jurisdiction over the burning lands. Agreements developed 
and agreed to by cooperating entities, commonly referred to as master 
agreements, govern cooperative fire protection efforts and include 
general provisions for sharing firefighting costs among responsible 
entities.

  AGENCIES NEED A COHESIVE STRATEGY TO ADDRESS WILDLAND FIRE PROBLEMS

    Agencies need a cohesive strategy that identifies the available 
long-term options and associated funding for reducing excess vegetation 
and responding to wildland fires if the agencies and the Congress are 
to make informed decisions about an effective and affordable long-term 
approach for addressing problems that have been decades in the making. 
We first recommended that the agencies develop such a strategy for 
addressing fuels in 1999. After we evaluated a number of related 
wildland fire management issues, we reiterated our recommendation in 
2005 and 2006 but also recognized that a comprehensive solution needs 
to address not only reducing fuels but also an overall response to 
wildland fire. To develop an effective overall strategy, agencies need 
to complete several key tasks, which address weaknesses we previously 
identified.
    Our 2005 report summarized several weaknesses in the federal 
government's management of fuel reduction and related wildland fire 
programs and identified a number of actions to address these 
weaknesses.\4\ Specifically, these weaknesses included the following: 
the agencies lacked basic data, such as the extent and location of 
lands needing fuel reduction; the agencies needed to identify and 
prioritize fuel reduction projects; many federal land management units 
did not have fire management plans that met agency requirements 
designed to restore fire's natural role in ecosystems consistent with 
human health and safety; and the agencies were unable to assess the 
extent to which they were reducing wildland fire risks, to establish 
meaningful fuel reduction performance measures, or to determine the 
cost-effectiveness of these efforts because they lacked needed data. We 
also identified a number of tasks the agencies needed to complete to 
develop a cohesive strategy. These tasks included finishing data 
systems that are needed to identify the extent, severity, and location 
of wildland fire threats in our national forests and rangelands; 
updating local fire management plans to better specify the actions 
needed to effectively address these threats; and assessing the cost-
effectiveness and affordability of options for reducing fuels and 
responding to wildland fire problems.
---------------------------------------------------------------------------
    \4\ GAO-05-147.
---------------------------------------------------------------------------
    The agencies have made some progress on the three primary tasks we 
identified as important to developing a wildland fire management 
strategy, although concerns have been raised about when or whether the 
agencies will successfully complete them. More specifically,

   LANDFIRE, a geospatial data and modeling system, is being 
        designed to assist the agencies in identifying the extent, 
        severity, and location of wildland fire threats to the nation's 
        communities and ecosystems. LANDFIRE data are nearly complete 
        for most of the western United States, with data for the 
        remainder of the country scheduled to be completed in 2009. The 
        agencies will need to ensure, however, that LANDFIRE data are 
        kept current in order to reflect landscape-altering events, 
        such as large fires and hurricanes, and they do not yet have a 
        plan to do so.
   In 2006, we reported that 95 percent of the agencies' 
        individual land management units had completed fire management 
        plans in accordance with agency requirements promulgated in 
        2001. However, the agencies do not require regular plan updates 
        to ensure that new data (from LANDFIRE, for example) are 
        incorporated into the plans. Moreover, in the wake of two court 
        decisions--each holding that the Forest Service was required to 
        prepare an environmental assessment or environmental impact 
        statement under the National Environmental Policy Act (NEPA) 
        \5\ to accompany the relevant fire management plan--the Forest 
        Service decided to withdraw the two plans instead of completing 
        them. It is unclear whether the agency would withdraw other 
        fire management plans successfully challenged under NEPA; nor 
        is it clear whether or to what extent such agency decisions 
        could undermine the interagency policy directing that every 
        burnable acre have a fire management plan. Without such plans, 
        however, current agency policy does not allow use of the entire 
        range of wildland fire response strategies, including less 
        aggressive, and potentially less costly, strategies.
---------------------------------------------------------------------------
    \5\ For major federal actions that significantly affect the quality 
of the human environment, the National Environmental Policy Act 
requires all federal agencies to analyze the environmental impact of 
the proposed action. 42 U.S.C. Sec. 4332(2)(C).
---------------------------------------------------------------------------
   The Fire Program Analysis (FPA) system is a computer-based 
        model designed to assist the agencies in cost-effectively 
        allocating the resources necessary to address wildland fires. 
        FPA is being designed in two phases. Phase I was intended to 
        provide information for use in allocating resources for the 
        initial responses to fires and in developing estimates for 
        agencies' fiscal year 2008 budgets. Phase II was to be focused 
        on additional activities, including fuel reduction and large-
        fire suppression. A ``midcourse review'' of FPA, completed in 
        2006, however, has resulted in recent endorsement by the 
        Wildland Fire Leadership Council \6\ of what may be significant 
        design modifications to FPA--ones that may not fulfill key 
        project goals of (1) optimizing how resources are allocated, 
        (2) linking fuel reduction to future preparedness and 
        suppression costs, (3) ensuring comparability among different 
        agencies' analyses and resulting decisions, and (4) enabling 
        aggregation of local costs to identify national options and 
        related budgets. Agencies plan to have a prototype of phase II, 
        reflecting this design modification, completed by June 2007. 
        According to a program official, the prototype will enable 
        project managers to assess and report to the leadership council 
        on the planned scope, schedule, and cost of FPA, including 
        whether or not they will meet the scheduled completion date of 
        June 2008. Further, gaps in the data collected for FPA may also 
        reduce its usefulness in allocating resources.
---------------------------------------------------------------------------
    \6\ The Wildland Fire Leadership Council was established in April 
2002 to support the implementation and coordination of federal wildland 
fire management activities. The council includes membership from 
Agriculture and Interior, as well as the agencies with wildland fire 
management responsibilities.

    Although the agencies had made progress on these three primary 
tasks at the time of our 2006 update, they had not developed either a 
cohesive strategy identifying options for reducing fuels or a joint 
tactical plan outlining the critical steps, together with related time 
frames, the agencies would take to complete a cohesive strategy, as we 
recommended in our 2005 report. In February 2006, the agencies issued 
an interagency document titled Protecting People and Natural Resources: 
A Cohesive Fuels Treatment Strategy, but we found that the document did 
not identify long-term options or associated funding for reducing fuels 
and responding to wildland fires. During our update, officials from the 
Office of Management and Budget stated that it would not allow the 
agencies to publish long-term funding estimates until the agencies had 
sufficiently reliable data on which to base the estimates. The agencies 
commented that having such data would not be possible until LANDFIRE 
and FPA were more fully operational. We continue to believe that until 
a cohesive strategy can be developed, it is essential that the agencies 
create a tactical plan for developing this strategy, so the Congress 
understands the steps and time frames involved in completing the 
strategy.

BETTER GUIDANCE NEEDED TO CLARIFY SHARING OF SUPPRESSION COSTS BETWEEN 
                    FEDERAL AND NONFEDERAL ENTITIES

    Federal agencies need to take steps to improve the framework for 
sharing wildland fire suppression costs between federal and nonfederal 
entities. Effective sharing of suppression costs among responsible 
entities can play a role in helping to contain federal expenditures, 
especially with the growing number of homes in areas at risk from 
wildland fire that may require protection. We recommended in our 2006 
report that federal agencies work with relevant state entities to 
clarify the financial responsibilities for suppressing fires that burn, 
or threaten to burn, across multiple jurisdictions and provide more 
specific guidance as to when particular cost-sharing methods should be 
used.\7\ As of January 2007, the agencies were updating guidance on 
options for sharing costs and under what circumstances each would 
typically be used, but it is unclear how the agencies will ensure that 
such guidance is followed.
---------------------------------------------------------------------------
    \7\ GAO-06-570.
---------------------------------------------------------------------------
    We found that federal and nonfederal entities used a variety of 
methods to share the costs of fighting wildland fires affecting both 
federal and nonfederal lands and resources. Agreements between federal 
and nonfederal entities--known as master agreements--provide the 
framework for those entities to share suppression costs for wildland 
fires that burn or threaten both federal and nonfederal lands and 
resources. These agreements typically list several available cost-
sharing methods. The agreements we reviewed, however, often lacked 
clear guidance for officials to use in deciding which method to apply 
for a specific fire. Clear guidance is important because local 
representatives of federal and nonfederal firefighting entities 
responsible for protecting lands and resources affected by the fire use 
this guidance in deciding which costs will be shared and for what 
period. We found, however, that cost-sharing methods were applied 
inconsistently within and among states, even for fires with similar 
characteristics. For example, in one state we reviewed, the costs for 
suppressing a large fire that threatened homes were shared solely 
according to the proportion of acres burned within each entity's area 
of fire protection responsibility, a method that has traditionally been 
used. Yet costs for a similar fire within the same state were shared 
differently. For this fire, the state agreed to pay for certain 
aircraft and fire engines used to protect the wildland-urban interface, 
while the remaining costs were shared on the basis of acres burned. In 
contrast to the two methods applied in this state, officials in another 
state used yet a different cost-sharing method for two similar large 
fires that threatened homes, apportioning costs each day for personnel, 
aircraft, and equipment deployed on particular lands, such as the 
wildland-urban interface. The type of cost-sharing method ultimately 
used can have significant financial consequences for the entities 
involved, potentially amounting to millions of dollars. Moreover, as we 
reported, federal officials expressed concern that the existing cost-
sharing framework insulated state and local governments from the cost 
of providing wildland fire protection in the wildland-urban interface, 
thus reducing the incentive for state and local governments to adopt 
laws--such as building codes that require fire-resistant materials in 
areas at high risk of wildland fires--that in the long run could help 
reduce the cost of suppressing wildland fires.
    We recommended in our 2006 report that the federal agencies work 
with relevant state entities to clarify the financial responsibility 
for fires that burn, or threaten to burn, across multiple jurisdictions 
and develop more specific guidance as to when particular cost-sharing 
methods should be used. The federal agencies generally agreed with our 
findings and recommendations and agreed to improve the guidance on 
sharing suppression costs. As of January 2007, the agencies were 
updating guidance that can be used when developing master agreements 
between cooperating federal and nonfederal entities, as well as 
agreements on how to share costs for a specific fire. Agency officials 
said that this guidance provides additional information about potential 
methods for sharing costs and about the circumstances under which each 
cost-sharing method would typically be used. It is unclear, however, 
how the agencies will ensure that the guidance is followed. Further, 
because master agreements are updated only every 5 years, it may take a 
number of years before the new guidance is fully incorporated into 
master agreements between cooperating entities.

LACK OF CLEAR GOALS AND COHESIVE STRATEGY HINDERS AGENCIES' EFFORTS TO 
                      CONTAIN WILDLAND FIRE COSTS

    Preliminary findings from our ongoing work for the committee show 
that, despite dozens of federal and nonfederal studies issued since 
2000 that consistently identified similar areas needing improvement to 
help contain wildland fire costs, the agencies have made little 
progress in addressing these areas. Areas identified as needing 
improvement to help contain costs--in addition to reducing fuels and 
cost sharing discussed previously--include acquiring and using 
firefighting personnel and equipment, selecting appropriate strategies 
for responding to wildland fires, and effectively managing cost-
containment efforts. Although the agencies have begun taking steps to 
address some of the areas previous studies have identified as needing 
improvement, much work remains to be done. For example:

   Acquiring and using personnel and equipment. The agencies 
        have taken steps to improve their ability to track and deploy 
        personnel and equipment, but they have made little progress in 
        completing the more fundamental step of determining the 
        quantity and type of firefighting assets needed based on an 
        analysis of values at risk and appropriate suppression 
        strategies. Further, although the Forest Service has identified 
        a series of improvements it plans to make in the acquisition 
        process, it has so far made little progress.
   Selecting appropriate suppression strategies. The agencies 
        have also begun to improve analytic tools that assist land and 
        fire managers identify the appropriate suppression strategy for 
        a given fire, but shortcomings remain. Federal policies 
        encourage the use of less intensive suppression strategies when 
        possible, strategies that may also be less costly. Land and 
        fire managers, however, may be reluctant to employ anything 
        less than full suppression because of concerns that a fire will 
        escape control. Currently, much of the information managers use 
        to estimate potential fire size, risks, and costs are based on 
        their individual experiences, which can vary widely. 
        Researchers are developing a new suite of tools that will 
        analyze fuel conditions and predicted weather conditions to 
        model expected fire growth and behavior and provide better 
        information for managers making fire response decisions, but as 
        of January 2007, these new tools were still being developed and 
        tested.
   Managing cost-containment efforts. The steps the agencies 
        have taken to date to contain wildland fire costs lack several 
        key elements fundamental to sound program management, such as 
        clearly defining cost-containment goals, developing a strategy 
        for achieving those goals, and measuring progress toward 
        achieving them. First, the agencies have not clearly 
        articulated the goals of their cost-containment efforts. For 
        cost-containment efforts to be effective, the agencies need to 
        integrate cost-containment goals with the other goals of the 
        wildland fire program--such as protecting life, property, and 
        resources. For example, the agencies have established the goal 
        of suppressing wildland fires at minimum cost, considering 
        firefighter and public safety and values being protected, but 
        they have not defined criteria by which these often-competing 
        objectives are to be weighed. Second, although the agencies are 
        undertaking a variety of steps designed to help contain 
        wildland fire costs, the agencies have not developed, and 
        agency officials to this point have been unable to articulate, 
        a clear plan for how these efforts fit together or the extent 
        to which they will assist in containing costs. Finally, the 
        agencies are developing a statistical model of fire suppression 
        costs that they plan to use to identify when the cost for an 
        individual fire may have been excessive. The model compares a 
        fire's cost to the costs of suppressing previous fires with 
        similar characteristics. However, such comparisons with 
        previous fires' costs may not fully consider the potential for 
        managers to select less aggressive--and potentially less 
        costly--suppression strategies. In addition, the model is still 
        under development and may take a number of years to fully 
        refine. Without clear program goals and objectives, and 
        corresponding performance measures to evaluate progress, the 
        agencies lack the tools to be able to determine the 
        effectiveness of their cost-containment efforts.

                              CONCLUSIONS

    The federal government is expending substantial effort and billions 
of dollars in attempting to address our nation's wildland fire 
problems. Yet despite promises to do so, the agencies still cannot 
articulate how the steps they are taking fit together to form a 
comprehensive and cohesive strategy to contain costs or to address the 
many wildland fire management problems we and others have reported over 
the last 7 years. Given the interrelated nature of wildland fire 
issues, they cannot be addressed in isolation but must be viewed from 
and addressed within a broader perspective. Agencies need to understand 
how each issue affects the others and determine the trade-offs required 
to effectively meet program goals while containing program costs. 
Therefore, if the agencies and the Congress are to make informed 
decisions about an effective and affordable long-term approach to 
responding to these issues, agencies need to first develop clearly 
defined program goals and objectives and a strategy to achieve them, 
including identifying associated funding. Because it will likely be at 
least 2009 before the agencies develop a strategy for fuel reduction 
efforts that would meet standards required by the Office of Management 
and Budget, we continue to believe that in the interim, it is essential 
that the agencies create a tactical plan for developing this strategy, 
so that the Congress understands the steps and time frames involved 
with its completion. In doing so, the agencies need to make very clear 
how the final design of FPA will meet the key program goals enumerated 
here, how and when the agencies will complete all fire management 
plans, and what schedule they envision for periodically updating 
LANDFIRE data. At the same time, to help address the rising cost of 
protecting the growing number of homes built in the wildland urban 
interface--a cost that may be disproportionately borne by the federal 
government--federal agencies also need to work with relevant state 
entities to ensure that appropriate methods are used for sharing the 
costs of suppressing fires that burn, or threaten to burn, across 
multiple jurisdictions.
    Mr. Chairman, this concludes my prepared statement. I would be 
pleased to answer any questions that you or other Members of the 
Committee may have at this time.

    The Chairman. Thank you very much.
    Our final witness on this panel is the Honorable Phyllis 
Fong, who is the Inspector General for the Department of 
Agriculture. Please go right ahead.

STATEMENT OF PHYLLIS K. FONG, INSPECTOR GENERAL, DEPARTMENT OF 
                          AGRICULTURE

    Ms. Fong. Thank you, Mr. Chairman and ranking member 
Domenici and members of the committee. We really very much 
appreciate your inviting us here today to testify about our 
work.
    I want to just briefly summarize for you the situation as 
we see it. Basically, there are, as the witnesses have 
mentioned, a number of factors contributing to rising costs in 
fire suppression, and failure to deal with any one of these 
factors will not break the cycle of rising costs. On the one 
hand, we have increased fuel buildup in the forests due to 
drought, due to weather, due to insects, what have you, and due 
to failure to take advantage of the wildland fire programs. On 
the other hand, we have a situation in the WUI, as other 
witnesses have testified to, where we have increased 
development and communities who are not engaging in fire wise 
practices. So as a result, what we have is a situation where 
fire costs are increasing every year and creating great trouble 
for all of us.
    Now, our sense of this is that there is a Federal policy 
that says that we need to address both of these factors. We 
need to address both sides of the equation. The Federal 
Wildland Fire Management Policy provides a framework for this. 
It recognizes that we have to allow fire to play its natural 
role in the forest to reduce the accumulation of hazardous 
fuel. It also recognizes that after giving due protection to 
human life and safety, which is the top priority, Federal 
agencies have to give equal consideration to protection of 
property and protection of natural resources.
    Finally, the policy states that State and local governments 
are primarily responsible for protecting structures in the WUI.
    What we have found in our audit work is that in fact these 
policies are not being carried out. We need to restore some 
balance to this. What is actually happening is that because of 
the increase growth in the WUI, fire suppression costs are 
being directed more and more to this factor, to the detriment 
of reducing fuels in the national forest.
    So we issued a number of reports which have a range of 
recommendations that go to these issues. The other witnesses 
summarized them very effectively. What we really want to 
iterate here is that the key point is that Federal fire 
suppression costs will not go down, they will continue to rise, 
unless something is done to regulate development in the WUI. We 
have to somehow incentivize State and local governments to 
regulate development in the WUI so that suppression costs for 
large fires can fall, thereby allowing a more balanced approach 
to reducing fuels in the forest and creating a more balanced 
approach to healthy forests. That is our primary--the gist of 
our audit work in this area.
    My prepared statement goes into the details of our 
recommendations and I will submit that for the record. Thank 
you for inviting us and I will be happy to address any 
questions.
    [The prepared statement of Ms. Fong follows:]

       Prepared Statement of Phyllis K. Fong, Inspector General, 
                       Department of Agriculture

    Good morning, Chairman Bingaman, Ranking Member Domenici, and 
Members of the Committee. Thank you for inviting me to testify before 
you today to discuss our recent audits pertaining to the U.S. Forest 
Service's (FS) Healthy Forest Initiative (HFI) and Large Fire 
Suppression Costs. The Office of Inspector General (OIG) devotes 
extensive audit and investigative resources to evaluate and improve the 
Department of Agriculture's (USDA) management of its public assets and 
resources, including FS and its National Forest System (NFS) lands. We 
are committed to conducting reviews of FS programs and activities to 
assist agency officials and Members of this Committee in their 
respective administrative and legislative oversight responsibilities.
    USDA, through FS, is responsible for the management of our Nation's 
national forests and grasslands. FS oversees these lands through 155 
national forests and 20 grasslands. Wildfires on FS lands are becoming 
larger and more expensive to extinguish. From fiscal year (FY) 2000 to 
2006, FS suppression costs averaged $900 million annually and exceeded 
$1 billion in 4 of those 7 years. In some years, FS has had to borrow 
funds from other programs to pay for its wildfire suppression 
activities, and this has adversely affected FS' ability to accomplish 
work in other areas.
    We recently completed two audits that evaluated FS efforts to 
reduce the threat of wildfires. Our first audit evaluated FS 
implementation of the HFI. One of the primary goals of this initiative 
is to reduce the threat of wildfire by removing hazardous fuels from 
areas in national forests that constitute the greatest threats of 
catastrophic fire. Our second audit evaluated the controls FS had in 
place to contain wildfire suppression costs.
    In both audits, FS agreed to take action on all our 
recommendations. Summarized below are the results of each audit.

          I. IMPLEMENTATION OF THE HEALTHY FORESTS INITIATIVE

    FS manages more than 192 million acres in the NFS. The agency has 
estimated that 73 million acres of this land and 59 million acres of 
privately owned forest land are at high risk of ecologically 
destructive wildland fire. One of the most extensive and serious 
problems related to the health of national forests is the over-
accumulation of dead vegetation that can fuel fires. The increase in 
the amount of hazardous fuels is the result of several major factors. 
First, extended drought conditions have significantly increased the 
amount of unhealthy or dead forests and vegetation. Second, widespread 
disease and insect infestations have killed or affected the health of 
large areas of national and private forestland. Third, past fire 
suppression practices of the Federal, State, and local governments, 
companies, and individuals have prevented the natural use of wildland 
fire (wildland Fire Use--WFU) to reduce accumulated forest vegetation. 
It has been estimated by some FS managers that hazardous fuels are 
accumulating three times as fast as they can be treated. The 
accumulation of hazardous fuels has contributed to an increasing number 
of large, intense, and catastrophically destructive wildfires. Reducing 
the buildup of hazardous fuels is crucial to reducing the extent, 
severity, and costs of wildfires.
    We focused our audit work on the agency's hazardous fuels reduction 
program because more than half of FS' funding under the HFI is 
allocated for this purpose. For FY 2005 and 2006, the FS budget for 
hazardous fuels reduction was approximately $262 million and $281 
million, respectively. Specifically, our audit evaluated FS management 
controls related to (1) determining if projects were cost beneficial, 
(2) identifying and prioritizing projects, (3) allocating funds among 
projects, and (4) reporting accomplishments. The following are the 
major issues identified in our audit.
Assessment of Risk
    At the time of our audit, we found that FS lacked a consistent 
analytical process for assessing the level of risk that communities 
faced from wildland fire and determining if a hazardous fuels project 
would be cost beneficial. FS had not developed specific national 
guidance for weighing the risks against the benefits of fuels treatment 
and restoration projects.
    In order to allocate resources most effectively, it is important 
for FS to be able to identify which communities and what NFS resources 
are at risk. FS needs to be able to determine the level of risk for 
significant and destructive wildland fires throughout the NFS and what 
the potential benefit or payback would be from conducting a specific 
fuels reduction project. While we agreed with FS that a traditional 
cost benefit analysis would be impractical, we concluded that FS could 
develop a set of criteria to compare the relative degrees of exposure 
and risk to wildland fire that each community faces. The assessment 
should include a measure of the benefits and/or consequences of 
selecting one project over another for treatment. Currently, FS' nine 
regions each have different ways of identifying priorities. At the time 
of our audit, FS could not adequately compare hazardous fuels reduction 
projects among regions. This affects the ability to identify, on a 
national basis, those projects that should be funded and completed 
first. While some areas or communities may be at high risk from 
wildfires, it may not be effective for FS to spend large sums of money 
on hazardous fuels reduction projects if the communities have not 
enacted and enforced rigorous building and zoning regulations, 
otherwise known as ``Firewise'' regulations. A community's lack of 
``Firewise'' regulations could significantly reduce the effectiveness 
of any effort by FS to reduce hazardous fuels around the community. FS 
officials believe that the new LANDFIRE system being developed will 
provide more accurate nationwide data so that they can better define 
and identify areas where fuels treatment would be most cost beneficial.
Prioritizing and Funding Projects
    FS also did not have the ability to ensure that the highest 
priority fuels reduction projects were funded first. Because projects 
were not prioritized under uniform, national criteria, there was no 
systematic way to allocate funds to the most critical projects. Funds 
were allocated based upon a region's historical funding levels and 
targets for number of acres to be treated that are set by the FS 
Headquarters office in Washington, D.C. There were no controls in place 
to prevent funds from being allocated to projects in order to achieve 
targets of acres treated instead of reducing the most risk. This could 
lead to less important projects being funded.
    We recommended that FS develop and implement specific national 
guidance for assessing the risks wildland fires present to residents 
and communities and determining the comparative value and benefit of 
fuels treatment/restoration projects. We also recommended that FS 
establish controls to ensure that the process and methodology to 
identify and prioritize the most effective fuels reduction projects can 
be utilized at all levels to ensure funds are distributed according to 
the priority of the projects. This process should have uniformity (and 
comparability) from the local level (districts) through to the 
Headquarters office and across geographic boundaries (i.e. among 
regions).
Performance Measures and Reporting Standards
    We found that FS performance measures and reporting standards did 
not provide adequate information to evaluate the effectiveness of a 
fuel treatment practice. They did not communicate to either FS managers 
or other stakeholders whether the treatment of an acre of forest had 
resulted in changing its condition class \1\ or if the project reduced 
the risk from catastrophic wildland fire. The agency's focus has been 
on achieving firm annual targets (output) that are measured in the 
number of acres treated. However, these acres are not homogenous, 
meaning that some acres of hazardous fuels create much more risk to 
communities and resources than others. Reporting the number of acres 
treated did not communicate the amount of risk that has been reduced. 
Focusing only on acres treated does not communicate key information on 
the effectiveness of the treatment practice. In addition, hazardous 
fuels accomplishment reports did not provide detailed information to 
evaluate the overall progress of the program; details such as the 
location of treatments, changes in condition class, and initial or 
maintenance treatments are not reported.
---------------------------------------------------------------------------
    \1\ The fire-regime condition class is an expression of the 
departure of the current condition from the historical fire regime 
resulting in alterations to the ecosystem. A condition class is 
measured as a 1, 2, or 3, with 3 being the most significant departure 
from the historical fire regime. Activities that cause the departure 
include fire exclusion, timber harvesting, grazing, growth of exotic 
plant species, insects, and disease.
---------------------------------------------------------------------------
    We recommended that FS develop and implement a more meaningful and 
outcome-oriented performance measure for reporting metrics, such as 
acres with ``risk reduced'' or ``area protected.'' Also, FS should 
direct that implementing effective integrated treatments are more 
important than solely meeting acreage targets. We also recommended that 
FS improve accomplishment reporting by including more detailed 
information, such as breaking down accomplishments by region, noting 
changes in condition class, and differentiating between initial and 
maintenance treatments and multiple treatments on the same acres.
    FS agreed with our audit findings and recommendations and has 
committed to take action on them.

                    II. LARGE FIRE SUPPRESSION COSTS

    As part of the agency's ongoing effort to contain wildfire 
suppression costs and increase the Wildland Fire Management Program's 
accountability, FS senior management requested that OIG evaluate FS' 
controls over its wildfire suppression costs. FS wanted OIG to take an 
objective and unbiased look at FS' current large fire management 
practices. Our primary objective was to evaluate the controls FS had in 
place to contain wild fire suppression costs. Specifically, we sought 
to (1) determine whether FS ensured non-Federal entities paid an 
equitable share of wildfire suppression costs, (2) evaluate whether 
wildland fire use (i.e. the management of naturally ignited wildland 
fires to accomplish specific management objectives like fuels 
reduction) was optimized, and (3) assess the cost effectiveness of FS 
wildfire suppression activities.
Suppression Costs Driven by Efforts to Protect Private Property
    The Federal Wildland Fire Management Policy of 1995 and its 2001 
update direct Federal fire management agencies, including FS, to safely 
suppress wildfires on Federal lands at minimum cost considering the 
relative values of property and natural resources at risk.\2\ The 
Federal Wildland Fire Management Policy also makes State and local 
governments responsible for protecting structures within the Wildland 
Urban Interface (WUI) \3\ from fire.
---------------------------------------------------------------------------
    \2\ The Federal Wildland Fire Management Policy, chartered in 1994 
by the Secretaries of the Interior and Agriculture, provides the 
foundation for Federal interagency fire management activities.
    \3\ The WUI is the area where structures and other human 
development meet or intermingle with undeveloped wildland. Wildland 
urban interface is any area containing human developments, such as a 
rural subdivision, that may be threatened by wildland fires.
---------------------------------------------------------------------------
    We found that the majority of FS' large fire suppression costs are 
directly linked to protecting private property in the WUI. The number 
of private homes being built in the WUI is increasing each year. The 
Federal Government has little or no control over this property 
development that has a major impact on FS fire suppression costs. Much 
of this development is basically unregulated from a fire protection 
standpoint. Many communities have few or no regulations mandating the 
use of fire resistant building materials or establishing/maintaining 
fire safe areas around structures. FS suppression costs are likely to 
continue to rise because current public expectations and uncertainties 
among Federal, State, and local fire management agencies about fire 
protection roles and responsibilities compel FS to suppress fires when 
private property is at risk, even when fires pose little threat to NFS 
lands. Giving natural resource protection an equal priority to private 
property protection in the WUI (or conducting any sort of cost/benefit 
analysis) is considered by FS managers to be politically infeasible.
    Although the Federal Wildland Fire Management Policy makes State 
and local governments primarily responsible for protecting structures 
in the WUI, FS managers have not renegotiated their agreements with 
State and local governments to apportion responsibilities and costs as 
required. State and local governments control building and zoning in 
the WUI. However, protection areas have not been redefined to reflect 
State and local governments' responsibilities accompanying this growth. 
FS managers continue to make it a priority to protect private property 
over natural resources. Consequently, FS WUI protection expenditures 
have increased rather than decreased. In FY 2003 and 2004, about 87 
percent of the large wildfires we reviewed identified protecting 
private property as a major strategy objective for the suppression 
effort.\4\ Some FS managers estimate that between 50 to 95 percent of 
large wildfire costs borne by the agency are directly related to 
protecting private property in the WUI. Based on these estimates, FS 
spent as much as $1 billion during those 2 years protecting private 
properties in the WUI.\5\
---------------------------------------------------------------------------
    \4\ Based on an analysis of 37 wildfires occurring in 2003 and 2004 
with suppression costs exceeding $5 million each.
    \5\ This calculation is based on our characterization of ``large 
wildfires'' as those exceeding $1 million as recorded in FS' financial 
information system.
---------------------------------------------------------------------------
    To ensure that the burden of protecting property in the WUI is 
shared equitably among the Federal, State, and local entities involved, 
we recommended that FS seek clarification from Congress as to the 
responsibilities of both FS and its non-Federal partners to protect 
private properties threatened by wildfires. FS should renegotiate 
wildfire protection agreements as appropriate. The Federal Government 
should also find ways to encourage State and local governments to enact 
and vigorously enforce ``Firewise'' building and zoning codes.
Use of Wildland Fire Should Be Expanded To Control Costs of Future 
        Fires
    Wildland fire use (WFU) \6\ lets naturally occurring fires burn 
accumulated hazardous fuels that increase the likelihood of large 
expensive wildfires. Naturally occurring forest fires can also be 
beneficial for forest and plant health by returning the forests back to 
their natural state. To control the risk of costly, catastrophic 
wildfires, the Federal Wildland Fire Management Policy specifies that 
FS give WFU and fire suppression equal consideration. However, existing 
FS firefighting policies and the lack of qualified WFU personnel 
restrict FS managers from doing so.
---------------------------------------------------------------------------
    \6\ WFU is the management of naturally ignited wildland fires to 
accomplish specific resource management objectives such as fuels 
reduction in pre-defined geographic areas outlined in fire management 
plans.
---------------------------------------------------------------------------
    Under current FS fire policies, FS can manage a fire for either WFU 
or suppression. Once a fire has been fought for suppression, it may not 
again be managed for WFU. Concerns that a natural fire could 
potentially escape FS control if not suppressed and the protection 
expectations of private landowners in nearby communities result in most 
NFS fires being treated initially as suppression. Many potentially 
beneficial fires may be suppressed because of the restriction on 
switching firefighting management objectives. Of the almost 80,000 
natural ignitions that occurred on FS land from 1998 through 2005, 
approximately 1,500--only 2 percent--were allowed to burn as WFU. In 
addition, FS managers have access to far fewer teams for WFU (7) than 
teams for suppression (55). FS estimates it needs to have 300 fire use 
managers to be able to select WFU as a strategy for all eligible 
fires.\7\ At the time of our audit, the agency had only 83 fire use 
managers.
---------------------------------------------------------------------------
    \7\ Eligible fires are those that meet the specific WFU criteria 
established by each national forest.
---------------------------------------------------------------------------
    The restrictive policies and lack of qualified personnel contribute 
to the overwhelming predisposition for FS to suppress fires rather than 
let them burn as WFU. Consequently, FS may have missed opportunities to 
reduce the hazardous fuels that contribute to large, expensive fires 
and may have unnecessarily spent millions of dollars suppressing 
wildland fires.
    To address the need to optimize wildland fire use, we recommended 
that FS modify current policies to allow (1) concurrent management of 
wildland fires for both WFU and suppression, (2) transition between WFU 
and suppression, and (3) management of wildfire suppressions to 
accomplish fuel reductions. We also recommended that FS prioritize 
funding to accomplish the staffing and training changes needed to 
implement an expanded WFU program.
FS Cost-Containment Controls Need To Be Strengthened
    FS has developed internal controls to strengthen financial 
accountability for line officers and incident commanders. However, we 
found that the cost-effectiveness of managers' and incident commanders' 
decisions and oversight were neither tracked during the fire nor 
evaluated afterwards. In addition, the agency's performance measures 
and reporting mechanisms did not adequately allow FS management to 
assess the effectiveness of its wildfire suppression cost-containment 
efforts, because the information FS summarized at the end of each fire 
season lacked essential data (such as the kinds of critical 
infrastructure or natural resources lost or saved) that policymakers 
need to evaluate FS suppression activities in relation to the monies 
spent.
    We also determined that FS national and regional wildfire cost-
containment reviews have limited effectiveness in identifying and 
correcting suppression cost inefficiencies because they (1) did not 
sufficiently address large cost factors such as the selection of 
suppression alternatives and the effectiveness of tactics, (2) did not 
help to improve performance because identified problems were not 
communicated to affected parties and corrected, and (3) did not occur 
with sufficient frequency.
    We recommended that FS (1) develop a reporting mechanism to gather 
and summarize more meaningful wildfire suppression information, (2) 
increase the accountability of line officers and incident commanders by 
incorporating into their evaluations an assessment of strategic and 
tactical cost-effectiveness, and (3) formalize newly developed wildfire 
cost assessment review procedures in FS directives and provide training 
to FS staff that perform the reviews.
    In summary, we concluded that FS' escalating cost to fight fires is 
largely due to its efforts to protect private property in the WUI 
bordering FS lands. Homeowner reliance on the Federal Government and 
the lack of ``Firewise'' building and zoning regulations results in an 
enormous financial burden on FS as it suppresses wildland fires. 
Efforts to reduce these costs need to include more equitably sharing 
the burden with State and local governments who have the authority to 
regulate growth in the WUI. In order to help reduce future costs, FS 
needs to revise policies that limit or restrict WFU. FS also needs to 
improve the accountability of its line officers and incident commanders 
and improve the effectiveness of its large fire reviews.
    FS has agreed with our findings and recommendations and has already 
begun discussions regarding appropriate incentives to encourage States 
to enter into equitable protection agreements. The agency has advised 
OIG that it will expand these discussions to include its Federal 
wildland fire management partners and the Office of Management and 
Budget. Any agreed upon incentives will be included in national 
directives so that they will be considered as each region renegotiates 
agreements with States. FS has already taken steps to accomplish the 
needed staffing and training recommended so that more people can be 
qualified and available for critical positions to manage WFU events on 
incident command teams.
    I want to express my sincere thanks to FS officials and employees 
for the assistance and considerable cooperation they extended to OIG 
during these two audits. FS faces many difficult programmatic issues 
and natural resource challenges as it strives to provide good 
stewardship of America's national forests. OIG's management and staff 
greatly appreciate the admirable but frequently uncredited work that FS 
employees perform on a daily basis to preserve and enhance our precious 
national forests.
    This concludes my testimony. Thank you again for inviting me to 
testify before the Committee. I would be pleased to address any 
questions you may have.

    The Chairman. Thank you very much.
    Why do we not do 5-minute rounds here because we do have a 
panel that we want to bring on if we can.
    Let me ask a couple of questions first, maybe directed to 
Secretary Rey or Ms. Hatfield, either one. One of the issues 
that came up before--I think we spoke about this a year or so 
ago, Secretary Rey--is the problem of the way we are doing 
budgeting for this wildfire suppression activity. At that time 
we were doing it on the basis of a 10-year average. The recent 
years would indicate, I think you said in your statement, that 
we are in an extended drought cycle today. Obviously the costs 
have been substantially greater than we have expected each year 
based on our prediction.
    I guess Mr. Caswell will be testifying on the second panel 
about recommending that agencies use predictive-based budgeting 
instead of this 10-year average. What progress is being made to 
adopt that recommendation or is there a reason why that does 
not make sense?
    Ms. Hatfield. Well, Mr. Chairman, we looked at the 
specifics of that recommendation and we had some concerns about 
the particulars about how they had recommended it in the 
context of putting us in a situation of taking appropriated 
dollars and moving them essentially into the fire account when 
they were appropriated for other reasons. But what we have done 
is look at a couple of tools that we could use to help us in 
terms of better discerning how we could best use the dollars 
that we have available.
    One of those is looking at a stratified cost index which 
the Forest Service has modeled and DOI now is looking at our 
data about how we can put that in there, and we think that will 
give us a better understanding of fires that do not fall--or 
fall high or low in that range, so we can look at those and 
look at specifics about how that we might manage costs better 
there.
    We also have----
    The Chairman. Let me just interrupt because I think maybe 
we are talking past each other. My concern is that the number 
of fires, the number of acres burning each year from wildfire, 
is growing. The cost of dealing with that is growing, and we 
are using a method for budgeting that does not take that into 
account.
    I am just wondering why we do not use a method of budgeting 
that does take that into account and recognize that this is, as 
Secretary Rey says, an extended drought cycle, and the 10-year 
average is not what we are going to wind up with this next fire 
season or the fire season after that, just as it has not been 
adequate this last fire season or the fire season before that.
    Ms. Hatfield. Well, we are using a rolling average, so that 
it does take into account where we have had larger fire 
expenditures. But if you also look at the averages, in every 
year, for example, in the past 5 years it has not been as high 
as it was, for example, last year. So the rolling average does 
give us a way of looking at potential expenditures that may be 
necessary for us in terms of any 1 year.
    Obviously, we budget for what we think is the capacity we 
are going to need to be successful in putting out fires, and we 
have been successful on initial attack using the budget and the 
methodology that we are now using, although we are continuing 
to look at it.
    The Chairman. But you do have these enormous shortfalls 
each year.
    Ms. Hatfield. In some years.
    The Chairman. So you are not budgeting enough money to 
fight fires or else, I mean, I am missing something in this 
equation.
    Mr. Rey. I think if I could add, we have not overspent in 
each of the last 10 years.
    Ms. Hatfield. Exactly.
    Mr. Rey. We have had a couple of years where we did not 
expend all of the suppression dollars. But I think----
    The Chairman. The last 3 years are the ones I am concerned 
about.
    Mr. Rey. I do not think we did in 2004. I think we ended up 
with money left over.
    But I think maybe more to your point, the rolling 10-year 
average now includes a significant number of high-cost years. 
So using a broader climatological predictive model may not give 
us a much different result.
    Also, just as a matter of record, the Appropriations 
Committee report language, at least for the present, indicates 
that we should use a rolling 10-year average. We do have some 
congressional direction that we are trying to respond to.
    But I think basically we are now at the point where a 
predictive model is not going to give us a much different 
budgetary result, and as long as we stay in this drought cycle 
we will eventually have a rolling average that includes 10 bad 
years.
    Ms. Hatfield. And as a result of looking at some of the 
strategic panel's recommendation, that one specifically, we did 
look at some other models to see if we could come up with a 
model that would be a better predictor. And while there may be 
some marginal improvements in terms of our prediction, not a 
lot better than the rolling 10-year average.
    The Chairman. All right. My time is up.
    Senator Domenici.
    Senator Domenici. Senator, I am hoping that after this 
hearing you will permit me to join with you in an effort to put 
together some suggestions and see if they would agree with 
them. Something has to be done. Your questions are right on 
point and they seem to be saying they are doing it. But they 
are not. I mean, it does not come out on point. It comes out 
short every year.
    Let me ask a peripheral question. Foresters and others who 
are getting involved now are finding themselves potentially 
liable in lawsuits, criminal and otherwise. It is causing a 
serious ripple. We had recently 3 years after an event one of 
the foresters was held liable, not only in a civil suit, but 
held liable by a grand jury. He has not been tried yet, but the 
grand jury did indict him.
    What is going on and what do we do about protecting these 
people so that they do not start quitting on us based upon the 
fear that they are going to get stuck with the criminal 
liability that is not present in the private sector?
    Mr. Rey. The problem that we are experiencing has three 
parts. As a consequence of exposing Federal firefighting 
supervisors to criminal liability, we are now seeing some who 
are indicating that because that is only a portion of their 
job--the type 3 incident commanders, for instance--they are 
declining to keep their training current because they do not 
see the point of exposing themselves and their families to 
criminal liability.
    The second problem that we are experiencing is that our 
after-accident investigations, which are investigations that 
are designed to find causal factors and learn from them, are 
now being impeded because many of our firefighters do not want 
to speak freely. In the last fatality, a few of them sought 
legal representation and, not surprisingly, their attorneys 
told them not to say anything to the accident investigators.
    The third problem we have is what will occur when a joint 
command incident results in a fatality and the incident 
commander is not a Federal employee, but a State employee. 
There is a disparity and an inequity between how the criminal 
statutes are applied where Federal employee fatalities are 
concerned and where State and local employee fatalities are 
involved. The expansive definition of what constitutes criminal 
negligence does not carry in the case of a death of a State or 
a local employee, only a Federal employee. That is under the 
U.S. Code as it exists today.
    So in a case like the Esperanza fire last fall, where the 
California Department of Forestry was in charge of the incident 
and Federal employees suffered fatalities, should that 
thereafter result in indictment or investigation and indictment 
for criminal negligence we are going to find our inter-agency 
and inter-governmental firefighting effort impinged because a 
lot of State and local employees or supervisors are not going 
to want to get involved in a joint command fire because it 
exposes them to a liability that they are not presently exposed 
to if they are fighting fires completely within their 
jurisdiction.
    Those are the problems.
    Senator Domenici. You told us the problems. What do we do 
about it, if anything?
    Mr. Rey. The solutions I think are threefold. The first is 
to amend Pub. L. 104-208 to allow fire supervisors who do not 
qualify for liability insurance to qualify. That would assist. 
We could then recommend to our Federal firefighting supervisors 
to purchase and be reimbursed for liability insurance. That 
only you can do.
    A second is something----
    Senator Domenici. Do you support that?
    Mr. Rey. The administration would support that.
    Senator Domenici. Okay.
    Mr. Rey. The second is something that we can do and that is 
to modify our investigative protocols to more closely resemble 
those that are used by the military and NASA, to provide a 
measure of privilege to people who provide testimony in 
accident investigations that we conduct, so that that 
information will not thereafter be used by someone else in a 
criminal proceeding.
    The third would be to look at----
    Senator Domenici. Who would carry that one out?
    Mr. Rey. We can do that and are doing it.
    Senator Domenici. You are?
    Mr. Rey. A third would be to look at Pub. L. 107-203, which 
was enacted from this committee to authorize an independent 
investigation in the case of Federal fatalities by our Office 
of Inspector General, and to clarify that that investigation is 
separate and for a separate purpose than the Forest Service 
accident inquiry. As I understand it, once our Inspector 
General conducts an investigation that suggests criminal 
activity, they have a nondiscretionary obligation to refer that 
to the appropriate U.S. Attorney for subsequent action. In this 
case the criminal act is criminal negligence involving the 
death of a Federal official, as the Code presently defines 
that.
    Senator Domenici. Thank you, Mr. Chairman. Thank you very 
much.
    The Chairman. Yes, thank you very much.
    Senator Salazar.
    Senator Salazar. Mr. Chairman, Senator Tester has to go 
preside on the floor, so he has one question. I will defer to 
him, and then I think Senator Wyden preceded me here.
    The Chairman. Oh, is that right? Okay, we will do it in 
that order then.
    Senator Tester.

          STATEMENT OF HON. JOHN TESTER, U.S. SENATOR 
                          FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman.
    I have heard several folks since I have gotten here talk 
about the reasons for the increased costs. Drought being one, 
building in the urban interface would be another. Since Ms. 
Nazzaro has not spoken yet--and the other folks can nod and if 
you want to add to it you can--what do you see as the major 
reason for the increase in costs for fighting fires?
    Ms. Nazzaro. Well, certainly one reason is the accumulation 
of vegetation that is going to fuel these fires; another is the 
fact that increased building in the wildland-urban interface is 
causing the Federal Government to do firefighting activities in 
State and local jurisdictions as well. So that certainly is 
probably the bottom line.
    Senator Tester. A couple follow-ups if I might. Has the 
Healthy Forests Initiative done anything to remove some of the 
energy load that is in the forests?
    Ms. Nazzaro. Well, based on Forest Service data we estimate 
that the number of acres needing treatment are growing three 
times greater than the acres treated.
    Senator Tester. Okay. Finally, is there any recommendations 
that have been given or could be given to local entities as far 
as the building in these interface areas? Because it is my 
understanding that if there was not houses there it could burn 
much more freely, and cost far less money to fight. So are 
there any recommendations for local governments, because it is 
probably a local government issue more than anything? And what 
would they be, and what department would give them?
    Ms. Nazzaro. I would defer probably to the agencies since 
they have more experience fighting fires.
    Senator Tester. That would be fine.
    Ms. Hatfield. Well, I think, as Mr. Rey referred to 
earlier, one of the issues that we continue to work with local 
governments is to create fire wise communities, where to the 
extent that there is wildland-urban interface that the citizens 
are creating a protective space around their home, that they 
are using building materials that are less flammable.
    The other thing that we as a Federal agency have been doing 
in partnership with the State and local governments and the 
tribes is to try to place our hazardous fuel reduction projects 
concentrating those in the areas that is the wildland-urban 
interface, so if there is a fire it will tend to burn over 
instead of destroying.
    Senator Tester. How much of a priority is being put on 
exactly that?
    Ms. Hatfield. About half of our funding that is being spent 
for hazardous fuel reduction is being spent in the urban-
wildland interface area. That is a very high priority. We have 
been working with the communities to develop community wildfire 
protection plans. We have been using those as a way of 
prioritizing projects.
    Senator Tester. With those kind of dollars being spent, are 
you seeing any appreciable success?
    Ms. Hatfield. Well, one example was the Esperanza fire last 
year, where there had been some fuels reduction in that area 
and actually the fire went around a community area. So we have 
multiple examples of that.
    Mr. Rey. One other area of profitable inquiry might be with 
regard to insurers. The insurance industry is beginning to 
respond to this situation, albeit fairly slowly. The reason it 
is slowly is because they do not suffer large numbers of losses 
in any one incident, like they do in a major hurricane. So it 
has not moved as quickly through the insurance industry as some 
of the restrictions on flood plain development did previously. 
But to the extent that there is an opportunity to incentivize 
insurers to in turn incentivize homeowners to build with less 
flammable materials or to build in less flammable areas, that 
may be a profitable way to slow the growth of the wildland-
urban interface.
    Ms. Nazzaro. I would also encourage the agencies to 
continue with three projects that we have reported on in the 
past. First, LANDFIRE, which is a key data and modeling system. 
We are concerned that obsolete data is not being updated. The 
Fire Program Analysis, FPA, was going to be a budget allocation 
tool. We do not see that any longer as being such a tool. We 
are concerned that with recent design modifications, the 
agencies are not going to be able to identify the most cost 
effective alternatives.
    Last, is the need for fire management plans. These plans 
are developed at the local unit level and what we are seeing 
now is that the Forest Service is changing its position on the 
need for these, and the implications of that certainly is 
murky.
    Mr. Rey. We are not changing our position on the need for 
community-based wildfire protection plans. That has been one of 
the key developments resulting from the Healthy Forests 
Restoration Act and has driven a lot of our fuels treatment 
priorities since that was enacted. On the other two points, we 
are still working on LANDFIRE and we are still working on the 
Fire Plan Analysis.
    Another area where we disagree is on the cohesive fuels 
strategy. We have issued, effective April 2006, a cohesive fuel 
strategy and as I understand it GAO is not satisfied with that 
strategy because it does not provide multi-year funding 
assessments for fuels treatment priorities. We respectfully 
disagree with the utility of those kinds of multi-year funding 
estimates because conditions on the ground are going to change 
priorities as years play out. So that is one area, and there 
are many in this fire arena, where sometimes the analysis does 
not necessarily result in answering questions that in a 
relative sense are as valuable as other questions that you need 
answered.
    Senator Tester. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Let me ask, Senator Craig, did you want to go right now or 
should I take one of the others?
    Senator Craig. Go ahead. Thank you.
    The Chairman. Which of you would like to ask your 
questions? Senator Salazar, you were here a little before 
Senator Wyden, I am informed.

          STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR 
                         FROM COLORADO

    Senator Salazar. Thank you very much, Chairman Bingaman. 
Thank you for paying attention to the order in which we come 
into the hearings, more so than I apparently did.
    Let me just first say I very much appreciate you holding 
this hearing at this point in time before we go into the fire 
season, because I think it allows us to put the spotlight on 
what inevitably is a problem year after year in our States in 
the West. So I very much appreciate you holding the hearing.
    Second, I have a statement for the record, Mr. Chairman, 
that I will just submit for the record.
    [The prepared statement of Senator Salazar follows:]

  Prepared Statement of Hon. Ken. Salazar, U.S. Senator From Colorado

    Thank you Chairman Bingaman and Senator Domenici for holding this 
important hearing.
    I represent the great State of Colorado with approximately 14.5 
million acres of National Forests. As I travel around the state I 
continually hear about the myriad of challenges our public lands face. 
In Colorado alone we face the challenges of managing both developed and 
undeveloped recreation, protecting our communities and watersheds from 
fire, as well as mitigating the dangerous buildup of hazardous fuels 
and a widespread bark beetle infestation.
    The bottom line is that it takes proper funding to address these 
issues and the growing cost of fire suppression is forcing these 
priorities to compete for smaller pieces of the budget pie.
    As we discuss the costs associated with protecting our local 
communities from wildfire, I must comment on the needs in Colorado when 
it comes to hazardous fuels treatment.
    Colorado is suffering a prolonged drought that is adversely 
impacting our forests. Along with the drought, Colorado is also seeing 
an extraordinary insect infestation moving through our forests.
    It is estimated that in 2006 around 5 million lodgepole pines on 
645,000 acres were killed by mountain pine beetles. The widespread 
extent of this drought and infestation has many communities in Colorado 
worried, and I am worried too.
    I am worried because there is a tremendous amount of hazardous fuel 
work to be done in Colorado. The Forest Service reports that 113 
projects covering 280,000 acres of hazardous fuels treatments in 
Colorado have been approved through NEPA and are available for 
implementation pending funding. In fact, 65% of these treatments are 
located in the wildland-urban interface, and another 235,000 acres are 
being analyzed for approval.
    Unfortunately, the Forest Service reports that it implemented just 
73,662 acres of treatments in Fiscal Year 2006 due to funding 
limitations. I don't want to make the mistake of assessing progress 
based solely on acres treated, but it is clear to me that Colorado's 
hazardous fuel conditions are deteriorating faster than current funding 
is able to address.
    I would like to call attention to the cooperative efforts taking 
place in Colorado to address this situation. In particular, there are 
two specific efforts, the Colorado Bark Beetle Cooperative and the 
Front Range Fuels Treatment Partnership feature collaboration between 
the Forest Service, local communities, and state agencies.
    By working together, these efforts are seeking to prioritize areas 
for treatment, lower the costs of those treatments and to address the 
associated impacts of this beetle epidemic. The hope of these 
cooperatives is to lower future suppression costs by investing in 
forest health today. I whole heartedly support their work and I was 
encouraged to see the Forest Service commit an additional $1,000,000 to 
the region to support this effort.
    In 2006, the Forest Service spent approximately $2 billion fighting 
fires. When compared to the $5 billion the Forest Service received in 
2006 appropriations, it becomes evident that the rising cost of 
fighting fires is an important issue that must be addressed.
    As I stated in a hearing on this issue last year: it is common-
sense that as we address fire fighting costs, federal land managers and 
local governments should never be in a position where they are 
reluctant to order needed resources to fight a wildfire because of 
costs. So, there must be some balance as to how we approach this issue 
and I am anxious to hear from our witnesses this morning.
    Thank you again.

    The Chairman. We will include that.
    Senator Salazar. Third, let me ask a couple of questions. 
Undersecretary Rey, you have heard me speak about what I have 
said is the Katrina of the West with respect to the millions 
upon millions of acres that have been infested by beetles in my 
State of Colorado as well as other States across the West. What 
I want you to do is speak to me about the budgetary sufficiency 
of meeting the hazardous fuels treatment that has already been 
approved in the States in general, but particularly in 
Colorado.
    In my State I believe we have 113 projects that have 
already been approved for hazardous fuel treatment. That is 
280,000 acres. Yet, of that we have only a very small amount 
where we have the money to go ahead and do 73,000 acres. So 
essentially less than one third of the acreage that has already 
gone through the entire NEPA process and has been approved 
through that process is undergoing any kind of fuels treatment.
    What is the plan of the Department--and Nina, if you also 
would respond to that. What is the plan in terms of getting to 
a point where we catch up? And I have another question, so I 
would appreciate if you would give me a short answer.
    Mr. Rey. The short answer is, based on the discussions that 
we had previously, we had planned to allocate some additional 
resources during the fiscal year 2007 cycle to Colorado 
specifically. Some of that has been done. Some of it has been 
held in abeyance until we see where the continuing resolution 
ends up.
    We also will likely allocate some additional resources to 
Colorado in the 2008 budget, although we will be able to speak 
more about that next Monday when the budget is rolled out.
    In general terms, one of the things that the continuing 
resolution, the year-long continuing resolution, may do is set 
us back on fuels treatment work. Our 2007 request was higher 
than the 2006 enacted level. So if the continuing resolution 
keeps us at 2006 levels this will be one area where we will, 
unfortunately, take a slight step backwards.
    Senator Salazar. So the essence of it, is that we do have a 
significant underfunding, if you will, to deal with the fuel 
hazards treatment that has already been approved?
    Mr. Rey. We have a backlog of projects that are ready to go 
in Colorado. There are a few other places where we have that as 
well. But we are going to try to catch up as much as we can.
    Senator Salazar. Thank you for that response, and also 
thank you for your assistance as we try to deal with this 
epidemic in Colorado and other States across the country.
    Second, let me ask just a very quick question--I have to 
choose my questions here--on biomass. A big deal, the renewable 
energy, and we are talking about it all over the West. In every 
one of the committees that I sit on, biomass is a big deal.
    Can you give me a very short answer on what the initiative 
is, either Nina or Mark, within your agency to try to deal with 
the biomass opportunity within our forests and our BLM lands?
    Ms. Hatfield. Well, we are continuing to increase the 
number of projects that we are doing. As an example, WFLC went 
to Warm Springs in Oregon to visit with the Warm Springs Tribes 
that have----
    Senator Salazar. Let me ask you this question. So I have a 
bunch of communities that are interested in biomass projects in 
my State. They want help to figure out how they can move 
forward. Where do they go to get help, what is that help, and 
can you respond in about 30 seconds?
    Ms. Hatfield. Yes. We have a group that works with wildland 
fire in the Department and we would be glad to provide some 
information and some help. So just have them contact us.
    Mr. Rey. We also have grants programs for small scale 
biomass conversion activities or projects through our Rural 
Development Agency and through the Forest Service. So the best 
thing would be for those communities to contact us directly.
    Senator Salazar. Mark, would that be through you or through 
whom?
    Mr. Rey. For the Forest Service part of it, it would be 
through me. For the rural development part of it, it would be 
through Undersecretary Tom Doehr.
    Senator Salazar. I appreciate the quick response.
    One final question. It seems to me that in the responses 
and testimony we have heard a lot about the WUI and the 
building up of the WUI. Senator Wyden said, stay out of the 
WUI. So I told him, why do we not do a Wyden WUI bill? So, 
Under Secretary Rey, you were saying something about the flood, 
about the flood control and flood plains have really been 
managed much better than they were 20 years ago. How about the 
prospects of doing something prospectively? What could the 
Federal Government do in terms of encouraging not building out 
in this urban-wildland interface or to do it in the kinds of 
conditions that are not going to make the problem, if you look 
at the problem in a prospective way. Again, because my time is 
up could you do it in a few seconds.
    Mr. Rey. I think the answer is it is probably most 
effective to work through the insurance industry and provide 
incentives to how they write policies governing where people 
buy, because very little of this development is Federally 
funded, in fact virtually none of it is. So the nexus for some 
sort of Federal control is not very good.
    Senator Salazar. It is not Federally funded, but the 
consequence ends up being funded then by the government in 
terms of fighting fire.
    Mr. Rey. Right.
    Senator Salazar. Thank you very much, and thank you, Mr. 
Chairman.
    The Chairman. Thank you.
    I am informed that Senator Wyden needs to leave and Senator 
Craig is willing to let him go ahead. So please go ahead.
    Senator Wyden. Thank you very much.
    Senator Craig. I am building chits with my new chairman.
    The Chairman. Yes. Well, you are really building chits with 
Senator Wyden.
    Senator Wyden. Thank you both and thanks to all my 
colleagues.
    Secretary Rey, let me begin with you. I found it very 
troubling to see the gap between what the independent experts 
are saying needs to be done in terms of fighting fires and what 
the Bush administration is actually doing. But I will tell you 
what I find even more troubling is what we are starting to pick 
up. Chairman Bingaman's very able staff has come up with an 
internal document that comes from the Forest Service, so we are 
talking about your own people, and these are the professional 
fire folks and they are blowing the whistle on all the 
inefficiency in the way you all run the program.
    I just want to read you a couple of comments from some of 
their internal documents. One that came in response to 
questions posed by the OMB says, and I quote here: ``There are 
no effective incentives in place.'' This is a professional fire 
person who works for the Forest Service. At another point he 
goes on to say: ``I have not observed improved accountability 
at the forest supervisor level.''
    So my question is, when we have got your own people saying 
this kind of thing and the press is bringing out all kinds of 
examples of costs being out of control--and I am looking at an 
article about last year in fighting fires there was a catering 
company used that furnishes I guess luncheons to the Hollywood 
stars. Why can we not take some practical steps, for example 
like using contractors locally?
    My understanding is sometimes people will voluntarily help 
out. We are paying--according to this article--last year the 
Government paid $10.25 a gallon for ice tea. Now, staff has 
been told that people are saying, well, get ice tea out to 
these courageous firefighters, for free.
    So can we bring common sense to this that will pick up on 
the suggestions of your own people, your own internal people, 
and some of the things like using local folks to deliver ice 
tea and local contractors, rather than catering outfits that 
are set up to serve the stars?
    Mr. Rey. Well, let us start with the last one because I 
think that is an exaggeration, if not a misrepresentation.
    Senator Wyden. I am just reading from the article.
    Mr. Rey. Well, do you believe everything you read in the 
newspapers?
    Senator Wyden. So they are wrong?
    Mr. Rey. They offered you, offered their readers, a very 
skewed appraisal of what is happening. We use commercial 
caterers that are in business doing catering. They cater at 
movie sets, too, and at movie sets they feed, yes, the people 
who are starring in the movies, as well as all the other 
workers on the set. That is what they do. They are commercial 
caterers. We pay them a commercial rate for their service.
    Now, are we going to replace a system of commercial 
contract caterers with local volunteers? I do not think so.
    Senator Wyden. How about what your own Forest Service 
people are saying? I mean, I read you from an internal Forest 
Service document.
    Mr. Rey. I think that is a good thing. I think it means 
that our people are pursuing cost containment options. I am 
familiar with that document and we have put him, the person who 
wrote it, on some of the cost containment teams. Cost 
containment in the cause of fire suppression is a process that 
continues with every incident.
    It is wonderful that you are holding this hearing in 
January before the fire season begins, because cost containment 
is not nearly as popular once the fire season is in progress.
    Senator Wyden. Tell me, if you would, what was done after 
this Forest Service employee said ``There are no effective 
incentives in place''? He made that comment. What was done 
after he said that?
    Mr. Rey. We added him to some of the cost containment teams 
to use the value of his expertise to see if he could create 
some of these incentives.
    Senator Wyden. So he was added to the teams. Were any 
changes made?
    Mr. Rey. Some of the changes incorporated, or described, 
rather, in our testimony.
    Senator Wyden. What was done with respect to his comment 
that there needs to be improved accountability at the forest 
supervisor level?
    Mr. Rey. That is included as well in some of the 
recommendations that we have adopted.
    Senator Wyden. So you have basically done all the things 
that this internal document says? They talk about how there is 
not a fully integrated system for working within the wildland 
fire agencies. It says ``This is not new information.'' That 
was done?
    Mr. Rey. Yes.
    Senator Wyden. Okay. I guess we will get a very different 
picture from your independent reviewers the next time, folks, 
because Secretary Rey says everything has been taken care of. I 
will tell you, Mr. Secretary, we have heard again and again----
    Mr. Rey. I do not think I said everything has been taken 
care of.
    Senator Wyden. You said we are going to have the changes. 
What the Forest Service person blew the whistle on you said the 
agency had moved to change. So we will watch that----
    Mr. Rey. That is not quite the same, though. What I said is 
he made a number of recommendations which we are adopting. Now, 
some of those recommendations we may succeed in adopting, we 
may not. But I did not say, nor would I say, that everything is 
taken care of. Cost containment is an ongoing process. It will 
continue to be an ongoing process. We will through learning, 
create new opportunities for cost containment that we do not 
fully appreciate today. Through some of the information that we 
are acquiring through LANDFIRE, through other mechanisms that 
are under way, we will find new ways to control costs.
    Senator Wyden. Mr. Chairman, my time is up. I will just say 
that again and again we have been told that there are going to 
be changes so that independent experts come in and give us a 
different picture, and it does not happen. It is kind of like 
the marquee at the old movie house says ``Coming Soon,'' and it 
does not get there. I hope that we will not see----
    Mr. Rey. I respectfully disagree and I cannot let that 
stand unrebutted. If you look at the national witness panel 
that you will have in the next, the witnesses that you will 
have in the next panel, you will see that they have been 
commending us for adopting some of their recommendations.
    Senator Wyden. The independent reviewers have told us 
otherwise, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Craig.

        STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Before Senator Wyden leaves, I am finding 
this an interesting dialogue and I say that because I have just 
come from a climate change hearing in Environment and Public 
Works. Mr. Chairman, the thing that is frustrating me today, 
last year was the worst fire season on record ever in our 
country's history. 30 percent of the CO2 put in the 
atmosphere was from large biomass burning. 30 percent of 
climate change gases were in part, a large part of unhealthy 
forests. That is a reality.
    I will never forget the time when we had a very severe fire 
complex in Payette National Forest and President Clinton flew 
out to see it, and I rode with him on a helicopter to the fire. 
We flew over it. On the way back we were visiting because there 
were these big green squares out in the middle of this forest 
and it was burned all the way around it. He said: Why did it 
not burn? I said: Well, those are private lands; they are 
managed. They are thinned, they are cleaned and they are logged 
appropriately.
    I said: And it is also true, Mr. President--this was the 
tail end of his term--you have reduced logging on our national 
forests by nearly 90 percent.
    Whether you disagree or agree with that, also the irony. 
That is, until the Forest Service because of our public policy 
started saying, well, we are not going to put out fires any 
more. That used to be an absolute and if you have an absolute 
you can get results, much more so than an arbitrary and 
capricious manner in which that fire burns and this fire does 
not, let us see if this one goes where we think it is going to 
go, if it does not get too big we will leave it alone, and then 
it blows up on you under the conditions of today and you have 
to build a city to fight a fire.
    Tremendous inefficiencies out there. As we reduced logging 
on our public lands by 85, 90 percent, we did something else 
that none of us want to remember. We took away the men and 
women that were out there on a daily basis. I grew up in an 
environment, when a fire started the logger out in the woods 
and the D8 Cat that was out there building roads stopped, went 
over and put the fire out, and came back and started logging 
again. Those people do not exist any more per se, and they were 
a very inexpensive source of firefighting that I doubt the 
Forest Service ever calculated. In some instances they paid 
them.
    So we have totally changed the character of firefighting by 
our own public actions at a time when our forests get 
progressively less healthy. Last year we reaped the whirlwind, 
and now we are debating climate change, but nobody wants to put 
into it the 30 percent contributive factor of CO2 
into the atmosphere by biomass burning.
    All I can say is the hypocrisy of what we are doing is a 
fascination in itself. So now we are sitting here condemning 
these large communities--have you been out on a fire recently, 
Ron, or Mr. Chairman? If it is a big one, it is a fascination. 
There are tents, there are 18-wheelers, there is the health 
tent, there is the food tent, there is the administrative tent. 
It is a city within itself, and frankly for our rural 
communities it is a great chunk of economy.
    A fire has the negative of burning things down, but it has 
the positive of goods and services being bought by the Federal 
Government in huge quantities. I do not know about ice tea 
being $10 a gallon, but at the same time--I mean, those are the 
realities of where we were and where we are today, and I am 
every bit as frustrated as all of you, because my guess is in 
the near future it is not going to get any better. It could 
even get worse if we do not get at the business of creating a 
healthier environment for our forests.
    My question to you then, Mark, is if the agency had 
invested $1.5 billion last year in hazardous fuels reduction 
work in the wildland-urban interface--what do we call that now?
    The Chairman. WUI.
    Senator Craig. WUI, how many acres could it have 
accomplished and would that have significantly reduced the cost 
of fighting fire in that year or future years?
    Mr. Rey. Well, we spent over half of that amount between 
our two Departments last year and treated about 4 billion 
acres. So I guess you could probably postulate that--with that 
amount we could probably treat somewhere between 6 and 8 
million acres in the wildland-urban interface.
    I do not know whether that would have reduced the incidence 
of fire, but it has reduced the loss of property as a 
consequence of those treatments. So for instance, last year, 
even though we had the worst fire season on record, we lost 
only about 750 homes, whereas in 2003 we lost something like 
3,000 homes, which is a lot less.
    Senator Craig. Your supervisors tell me they are 
frustrated; they spend more time saving dwellings than they do 
resource in many of these fires.
    Mr. Rey. That is pretty much a given now if the fire 
ignites in or near the wildland-urban interface.
    Senator Craig. Nina, are firefighting agencies from the 
Department of the Interior going to adopt some of these 
recommendations that obviously Mark and the committee have been 
talking about, and if so what are they?
    Ms. Hatfield. Well, we are doing them jointly. We have 
adopted the--we have been working collectively with the Forest 
Service and other partners, for example, to provide more 
resources to rural fire departments so that we can have local 
resources available on initial attack, which hopefully will 
mean that we do not have to devote a lot of Federal resources 
to bringing people in at a higher cost to do a larger fire.
    We have been working collectively together on all of these 
things and are moving forward to take these efforts jointly.
    Senator Craig. In looking out into the future with those 
kinds of recommendations and therefore those kinds of changing, 
how much cost savings headway do you think you can expect as, 
let us say, as a percentage?
    Ms. Hatfield. I think that really what we are trying to do 
is to look at cost containment. Again, if you look--I am sure 
your panel members in your next panel--our strategic issues 
panel told us that it is not--we have inflation in doing the 
business of fighting fire. It costs more for aviation 
resources, other resources. But what we are trying to do is 
control some of the cost drivers, and reductions of the fuels, 
having more initial attack capability at a local level, in 
terms of trying to get better data to our firefighters through 
LANDFIRE, other tools like that. So we are trying to contain 
costs and I think if we can manage to keep it relatively flat 
we will have done a good job.
    Senator Craig. You will. If you can keep them relatively 
flat, that will be a great accomplish.
    Ms. Hatfield. The real driver here are the number of acres 
that are burning.
    Senator Craig. Yes.
    Mr. Rey. Mr. Chairman, in our statement we summarized five 
recently adopted management efficiencies. What I would like to 
submit to the record is a document that lists a total of seven 
that are under way, as well as estimated cost savings 
associated with that. So if hopefully your staff gets the 
opportunity to read this, it will dispel the proposition that 
we are not doing anything.
    The Chairman. We appreciate that.
    Senator Craig. Mr. Chairman, you have been very generous 
with your time.
    Just a housekeeping matter for you, Mark. I have been a 
strong advocate of fuels for schools, biomass heating for our 
schools. We have got several stood up in Idaho today. Most of 
these schools are within or adjacent to national forests. Now 
we are being told by the forests they cannot supply the 
biomass. It is the ultimate Catch-22 in bureaucracy and 
paperwork, and so they are having to lean on private instead of 
public.
    We did it all to clean the forests and now we cannot supply 
the material because we just cannot get through the 
bureaucracy. Would you look into it?
    Mr. Rey. Sure. If you can give me the specific forests and 
schools, I would be happy to look into it.
    Senator Craig. Council, Idaho, Payette National Forest, 
Council District. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much and thank this panel of 
witnesses. I think it has been useful.
    Why do we not bring the second panel forward and hear their 
testimony.
    [Pause.]
    The Chairman. On this second panel the witnesses are: Dr. 
Bruce McDowell, who is a fellow with the National Academy of 
Public Administration here in Washington; James Caswell, who is 
co-chair of the Strategic Issues Panel on Fire Suppression 
dealing with the costs of the Wildland Fire Leadership Council, 
and from Boise, Idaho; and our third witness on this panel is 
Kirk Rowdabaugh, who is the State Forester from Arizona. He is 
speaking on behalf of the Western Governors Association.
    Thank you all for being here and why do we not start with 
you, Mr. McDowell. If you could summarize your comments and 
give us the main points that would be much appreciated.

STATEMENT OF BRUCE McDOWELL, Ph.D., FELLOW, NATIONAL ACADEMY OF 
                     PUBLIC ADMINISTRATION

    Dr. McDowell. Thank you very much, Mr. Chairman and members 
of the committee.
    It is a real pleasure to be here. I have testified in the 
House a couple times and I have been in touch with your staff 
and the staff in the House. As you have already been told, we 
did about 3\1/2\ years of study on wildfire that we finished up 
in 2004. So each time I testify I have to do a little cram 
course on what is going on.
    I read the materials sent out ahead of time. I have 
submitted some prepared testimony, which I will not read. Let 
me just quickly summarize what is in that testimony. There are 
two basic things that does. It summarizes the recommendations 
we made in our six reports over the period of 2000 to 2004 and 
the response to those recommendations, which has generally been 
pretty positive, as you already heard from the administration 
testimony. We are pretty pleased with what they have done on 
that.
    It stresses the cost containment potentials of eight best 
buys. I must say, looking back, a lot of those best buys are 
already off the shelf. Not that they have been totally 
implemented, but the agencies are working on them. So I think 
they are moving in the right direction in most respects.
    There are three categories of best buys that we have urged. 
One is getting a bigger bang for the buck on suppression, and 
most of the testimony and most of the agency attention, the 
attention by the OIG, is on that subject. I might just say that 
I would not expect great savings in that category. These are 
marginal savings. Once the fire begins you are kind of locked 
in by an awful lot of precondition and you have got to follow 
through on it or you have a disaster on your hands.
    The second is break the cycle of suppression costs driving 
out the hazard mitigation efforts. I think that is the most 
problematic of the areas and I will address that in a minute.
    The third area is to expand the pot for mitigation. 
Mitigation costs are huge and when you begin to think about 
putting those into the Federal budget you begin to immediately 
realize that that is not going to work. So the key is to get 
some partnerships going, to get everybody involved, to get 
those WUI communities doing things in their own interest, not 
relying completely on the Federal Government or the States to 
step in.
    I think that is one of the places where I see the greatest 
improvement since I last looked at this whole area. The 
creation of these community wildfire protection plans has 
really increased since the last time I looked. There are some 
650 of them in existence now. When we began our studies there 
were not more than one or two or three. We had to seek out by 
asking everybody all across the country, are there any things 
like this, and fortunately there were a couple that 
demonstrated that it could be done.
    Now we have 650, another 600 or so in preparation. I think 
you should not underestimate the potential for these to be 
effective, because what they do is they get all of these 
parties together in their own interests in communities. We 
recommended about 350 regional approaches to this so that would 
be reasonable to fund those. So the ones that are in effect 
must be somewhat smaller than we had envisioned. Nevertheless, 
they are going in the right direction.
    If you do not have a fire protection plan like this, you do 
not have anything going for you other than suppression, and 
that is a dead end. The only place you are going to get cost 
containment over the long time is hazard mitigation. What 
concerns me most about what I see today is the charts that you 
showed at the very opening, the extent to which suppression is 
eating up the budgets of the agencies. This is a dead end. I 
think it is penny-pound--it is not the right way to go.
    So what can we do? Let me just point to two things that I 
think you should pay real attention to on this breaking the 
cycle business. One is, under no circumstances let the 
suppression money run into and drive out the production of 
these community fire protection plans. I think that would be a 
disaster. It would go completely the wrong way.
    The other thing I think is something that has already been 
mentioned here: Look for opportunities to commercialize the 
hazard mitigation efforts. You are not going to pay for all of 
that out of the Federal budget. You need to pay for it somehow 
and these biomass and other kinds of new small forest 
industries I think are the way to go. Prescribed burning. 
Almost all of the hazard mitigation efforts are pure 100 
percent governmental costs. They are very expensive that way.
    If you can take the biomass and the small diameter lumber, 
even some large lumbering which might be done to establish 
fire-dampening patterns within broad expanses of national 
forests and other Federal lands, so some larger lumber perhaps, 
and work that out on a planned basis so that you have a 
sustained, predictable yield of these materials that can be 
used, that is the only way you are going to get industry to 
come in.
    If industry comes into an industry where there is no 
reasonable expectation that you are going to have a constant 
supply of materials, why should they go into business like 
that? So you simply cannot afford to overlook these 
opportunities to reduce hazards.
    [The prepared statement of Dr. McDowell follows:]
   Prepared Statement of Bruce D. McDowell, Ph.D., Fellow, National 
                    Academy of Public Administration
    Mr. Chairman and members of the subcommittee, my name is Bruce 
McDowell. I am a Fellow of the National Academy of Public 
Administration, and for three and a half years it was my pleasure to 
direct the Academy's studies of wildland fire issues for the Department 
of the Interior and the USDA Forest Service. As you know, the Academy 
is an independent, non-partisan organization chartered by the Congress 
to give trusted advice to the federal government and others.
    The views I am presenting today represent those of the expert 
Academy Panel convened for the purpose of guiding our work on six 
wildfire reports issued between August 2000 and January 2004 and not 
necessarily those of the Academy as a whole. We enjoyed working with 
Congressional and agency staff throughout that period, and appreciate 
the opportunity to appear before your Committee today to highlight the 
key findings and recommendations from our work. Although we have had a 
limited opportunity to formally assess progress in implementing the 
National Fire Plan since January 2004, we believe that the overall 
thrust of the Panel's reports remains relevant today.

            GENERAL THRUST OF THE ACADEMY'S WILDFIRE REPORTS

    Our first report--on the Cerro Grande Fire (August 2000)--found a 
need to significantly improve risk assessments and coordination 
practices in the wildfire program of the National Park Service, and 
those improvements have been made to improve the safety of prescribed 
burning.
    Our second report--Managing Wildland Fire: Enhancing Capacity to 
Implement the Federal Interagency Policy (December 2001)--called for a 
number of improvements for coordinating the various federal wildfire 
programs. Chief among the Panel's recommendations was the establishment 
of an interagency coordination body, and the Wildland Fire Leadership 
Council (WFLC) was established shortly thereafter. We believe that was 
a major step forward. That report also recommended a non-federal 
advisory committee to work closely with the interagency council to 
establish a strong intergovernmental partnership, and the 10-Year 
Strategy Group that works through the Western Governors' Association 
resulted. Another recommendation of our second report was to regularly 
assess the large fires each year to identify lessons for improving 
practices in subsequent years. Those assessments now seem to be firmly 
established.
    Our third report--Wildfire Suppression: Strategies for Containing 
Costs (September 2002)--made 19 recommendations mostly designed to help 
reduce costs while fighting fires. The one most directly implemented is 
a requirement to have an Incident Business Advisor (IBA) representing 
the Agency administrator on costly fires. This advocate for cost-
consciousness is independent of the Incident Management Team and had 
been used before on some fires. But they had not been used on a 
consistent basis because there were not enough qualified individuals to 
go around at the time we studied six of the largest wildfires that 
burned during 2001. Subsequently, more IBAs have been trained and 
assigned, and it may be time to assess their effectivenessif such an 
assessment has not already been made. I note that the USDA Inspector 
General has recently addressed the cost containment effectiveness of 
Forest Service line offices and incident commanders, and has 
recommended further improvements.
    Our fourth report--Containing Wildland Fire Costs: Improving 
Equipment and Services Acquisition (September 2003)--emphasized the 
need for better analysis of alternative sources of supply for 
firefighting equipment and services. Based on experience in other 
federal agencies, we estimated that systematic use of such analysis 
would be likely to save at least ten percent of the annual spending on 
these items--or about $80 million per year. We understand that several 
new procurement analysts have been assigned to further this goal.
    Our fifth report--Containing Wildland Fire Costs: Utilizing Local 
Firefighting Forces (December 2003)--recommended training and 
qualifying more local firefighters to work on large wildfires, 
establishing locally dedicated Type-3 Incident Management Teams in 
wildfire-prone areas, and facilitating access to the federal grants 
designed to enhance the capabilities of local firefighters that are 
available from multiple sources. Local firefighters are usually the 
least costly to useif they are properly trained and equipped. Too often 
they are automatically dismissed from the fire scene as soon as a 
national Incident Management Team arrives (and replaced with higher 
cost resources), because there is no way to know whether they are 
qualified. If the local firefighters are led by a qualified local Type-
3 team from the beginning of the fire (at which they usually arrive 
first because they are closest), there is a much better chance that 
they will keep the fire small and less costly. If the fire grows large 
enough to need a more highly qualified team, the transition is likely 
to be smoother and quicker. And the local Type-3 team will be able to 
take back command of the fire earlier as it comes under control. All of 
these practices will reduce the cost of the fire. We understand that 
the federal agencies are now aggressively promoting creation of many 
more Type-3 teams, with full support by the National Association of 
State Foresters and the International Association of Fire Chiefs.
    Our sixth and probably most important report--Containing Wildland 
Fire Costs: Enhancing Hazard Mitigation Capacity (January 2004)--
recommended significantly enhancing statewide and community-wide 
Wildfire Mitigation Partnerships. The more our Panel looked at the 
potential to save money while suppressing wildfires that were already 
burning, the more it became convinced that is the wrong place to look 
for major savings. Our Panel recognized that wildfire hazard reduction 
(1) is a huge undertaking, and (2) requires spending money now to 
reduce suppression costs later. We are well aware that neither of these 
realities makes this initiative easy to sell to federal appropriators 
who are working under increasingly tight caps on what they can spend 
each year. However, our Panel saw no alternative to the conclusion that 
hazard mitigation provides the only real answer to controlling 
suppression costs.

   Once a fire begins, its course is largely predetermined by 
        drought, weather, and ignitions--plus the fuel that is in its 
        path.
   If development or other high value assets--such as 
        watersheds, power lines, pipelines, communications relay sites, 
        or an ecological system that would be badly damaged by a severe 
        fire--are in the fire's path, the pressure is to use whatever 
        means are available to put it out, regardless of the cost.
   The factors that can be controlled to reduce suppression 
        costs are mostly available to work on before the fire ignites. 
        They include creating fire-resistant communities and defensible 
        spaces, strategic fuel break systems that dampen fire 
        progression patterns and make fires more manageable, and 
        reduced fuel loadings in wild areas where a policy favoring 
        wildland fire use where when lightning strikes could play their 
        natural role without harm.

    Taking action on these controllable factors at a scale that matches 
the current need will require collaboration among all the responsible 
and affected parties--both public and private. The current federal 
policy of dealing with this daunting challenge at a ``landscape scale'' 
is correct. However, few collaborative mechanisms for this purpose 
existed at this scale when we prepared our study. Ruidoso, NM and 
Central Oregon provided examples where such work had begun. So, our 
Panel recommended creating and supporting such mechanisms in all 
wildfire-prone areas. It is one of eight ``best buys'' that our Panel 
recommended for consideration.
    I was pleased to note in reviewing the December 2006 10-Year 
Comprehensive Strategy Implementation Plan that major progress has been 
made in establishing these community-based collaborations and producing 
over 600 Community Wildfire Protection Plans. This is a major advance 
that deserves your attention and encouragement, because these plans are 
designed to:

   reduce risks to firefighters, communities, and the 
        environment
   improve the cost-effectiveness of firefighting
   achieve more ecologically natural and safer wildland fire 
        regimes

    Even in the tightest budget year, support for this 
intergovernmental collaboration should be provided, because it can 
leverage funding from many sources. This becomes increasingly important 
the tighter the federal budget becomes. Collaboratives likes this could 
provide an excellent opportunity for federal wildfire agencies, for 
example, to negotiate equitable suppression cost-sharing agreements 
based on local hazard mitigation actions such as those recommended by 
Firewise.
    Altogether, a substantial amount of progress has been made on 
implementing the National Fire Plan since 2000. But, of course, much 
more remains to be done.
    I have attached an outline of the eight best buys * emerging from 
our latest three reports, and would be happy to answer questions about 
any or all of them. For now, I will highlight just one.
---------------------------------------------------------------------------
    * The outline has been retained in committee files.
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    Something needs to be done to break the too-frequent cycle of 
borrowing from hazard mitigation funds (and other land management 
programs) to fund suppression activities that run over-budget. This 
practice has been very disruptive, unpredictable, and 
counterproductive. FEMA disasters are not funded this way, and neither 
should wildfire disasters.
    As I was preparing this testimony, I found that recent 
Congressional actions have given suppression funding such a high 
priority that it now consumes over 40 percent of the entire Forest 
Service budget. This puts enormous pressure on non-suppression 
programs--and tends to drive out essential hazard mitigation 
activities, among others. In the long-run this is counterproductive.
    I would like to close by drawing your attention to a very important 
pilot project in Central Oregon. The Central Oregon Intergovernmental 
Council (COIC)--an example of the kind of collaborative organization 
our Panel has recommended--is developing bioenergy options for turning 
the thinning of forests into a new economically productive ``forest 
industry.'' COIC has federal demonstration funds to explore the 
potentials for new uses of forest biomass. The project is co-sponsored 
by the USDA Forest Service, the Oregon departments of Energy and 
Economic & Community Development, and the Business Alliance for 
Sustainable Energy. If some coordination money like this can leverage 
economic development from what is otherwise only a fire-safety 
necessity, and a 100 percent governmental expense it will create 
another best buy. Innovations like this are well worth watching and 
encouraging.
    Shifting the costs of wildfire hazard mitigation into the private 
sector as a profit-making opportunity would be a perfect solution to 
what is now perceived to be an unaffordable public obligation. The 
federal role would include technology research (which is being 
pursued), technical assistance, and perhaps some market aggregation to 
help reduce the risks to early adopter companies willing to venture 
into this new activity.
    Mr. Chairman, this concludes my remarks. I would be delighted to 
answer questions.

    The Chairman. Thank you very much.
    Why don't we hear from Mr. Rowdabaugh next. We will just go 
across the table. Thank you.

   STATEMENT OF KIRK ROWDABAUGH, STATE FORESTER, ARIZONA, ON 
          BEHALF OF THE WESTERN GOVERNORS' ASSOCIATION

    Mr. Rowdabaugh. Thank you, Mr. Chairman, members of the 
committee. This testimony is presented on behalf of the Western 
Governors' Association with the support and concurrence of the 
National Association of State Foresters, the National 
Association of Counties, and the International Association of 
Fire Chiefs.
    Recently the Inspector General's Office released an audit 
of the Forest Service and the costs incurred controlling large 
fires. We believe the audit contains some useful 
recommendations that are consistent with WGA policy and we 
believe they should be implemented as quickly as possible. The 
Forest Service should take greater advantage of wildland fires 
to reduce the hazardous fuel on Federal lands and it should 
establish controls to assess the performance of its line 
officers and its incident commanders in controlling large fire 
costs.
    The Congress should encourage action by all Federal land 
management agencies on these recommendations. However, in 
response to the audit report the Forest Service expressed a 
need to determine if congressional intent exists in current law 
regarding its responsibilities for protection of the wildland-
urban interface. The Forest Service stated that if it cannot 
determine its existing authorities and responsibilities that it 
intends to seek clarification from Congress regarding the 
Federal responsibilities in the wildland-urban interface and 
other private properties that are threatened by wildfires.
    We are disturbed by this apparent uncertainty of Federal 
authorities and responsibilities for managing wildfires. Should 
the Forest Service seek clarification from Congress regarding 
its responsibilities for fires burning on the national forests, 
Western Governors and others want to ensure that Congress 
solicits State and local governments on this important matter.
    In many Western States the primary reason rural communities 
are at risk from wildfires is the unhealthy condition of 
neighboring Federal forests, and Western Governors urge the 
Congress to provide prompt and unambiguous direction to the 
Federal agencies regarding their responsibilities for the 
management of the national forests, including the need to 
control wildfires.
    In 2004 a Strategic Issues Panel on Fire Suppression Costs 
was formed by the Wildland Fire Leadership Council and was co-
chaired by WGA. Many of the foremost Federal and non-Federal 
experts on wildland fire management produced a report entitled 
``Large Fire Suppression Costs, Strategies for Cost 
Management.'' The panel recommended seven primary actions to 
contain Federal fire suppression costs.
    Unfortunately, the Inspector General's report fails to make 
these recommendations a priority for the Forest Service and 
instead infers that cost-shifting to States and local 
governments and others is a solution to controlling suppression 
costs. It is clearly not a solution. We again urge Congress to 
take whatever steps are necessary to assist the Federal 
agencies in making the panel's recommendations a reality.
    The Western Governors also recently agreed to an updated 
implementation plan for the 10-year comprehensive strategy 
entitled ``A Collaborative Approach for Reducing Wildfire Risk 
to Communities and the Environment.'' Since 2001 the 10-year 
strategy has formed the basis for improving forest health and 
protecting at-risk communities. The four goals of the 10-year 
strategy and the new implementation plan are: to improve the 
prevention and suppression of wildfires; reduce hazardous 
fuels; restore fire-adapted ecosystems; and promote community 
assistance.
    The new implementation plan establishes a number of items 
to enhance public safety and reduce costs by engaging local 
governments and private landowners in the wildland-urban 
interface, and we believe a relatively small investment of 
Federal resources to support State foresters, county 
commissioners, and rural fire departments with the 
implementation of the 10-year strategy will return huge savings 
in the future, and that by fully implementing the strategy we 
can take proactive measures to improve the health of our 
forests, prevent catastrophic fires, and protect rural 
communities and their economies.
    The Congress and the administration should recognize the 
consensus that has been constructed in developing the 10-year 
strategy and the new implementation plan. Stakeholders in all 
levels of government are in agreement and we believe the 
Congress and the administration should take advantage of this 
widely supported strategy. We ask the Congress to reaffirm the 
importance of this collaborative, proactive, and forward-
thinking strategy and instruct the administration to fully 
implement it.
    Unfortunately, the administration's budget proposals have 
repeatedly fallen short of implementing this strategy, 
especially its forest restoration and community assistance 
goals. The Congress has and needs to continue to maintain these 
program budgets as well as carefully consider ways to increase 
the resources provided to local, State, tribal, and Federal 
land management agencies.
    We believe there are substantial steps the Forest Service 
and the Department of the Interior can take to control 
suppression costs and we will continue to work with the 
Congress, our Federal partners, and especially the new Chief of 
the Forest Service to protect our rural communities, to improve 
the health of our forests, and to control suppression costs.
    Mr. Chairman, again I thank you and look forward to 
responding to any questions.
    [The prepared statement of Mr. Rowdabaugh follows:]

 Prepared Statement of Kirk Rowdabaugh, State Forester of Arizona, on 
Behalf of The Western Governors' Association; The National Association 
   of Counties; The National Association of State Foresters; and The 
                International Association of Fire Chiefs

    Thank you Chairman Bingaman for the opportunity to appear and 
present testimony at today's hearing on wildfire cost issues. This 
testimony is presented on behalf of the Western Governors' Association. 
WGA is an independent, non-partisan organization of Governors from 19 
Western states and three U.S.-Flag Islands in the Pacific. WGA is very 
pleased to present this testimony on behalf of the National Association 
of Counties, the National Association of State Foresters and the 
International Association of Fire Chiefs.
    Governor Mike Rounds of South Dakota is currently WGA's Chairman 
and Governor Janet Napolitano of Arizona is WGA's Lead Governor for 
Forest Health. WGA has long-standing policy that it has pursued with 
the Administration, the Congress and other partners to prevent fire 
suppression costs from overwhelming proactive forest health and cost-
control efforts.\1\
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    \1\ WGA Policy Resolution 06-9, Improving Forest and Rangeland 
Health in the West. ``The active management and restoration treatments 
called for in the 10-Year Strategy will require substantial investment 
by all levels of government and private citizens if the agreed-to goals 
are to be achieved. The Administration should request and the Congress 
should provide funding to fully implement the 10-Year Strategy while 
ensuring that proactive fuels reduction funds are not sacrificed in 
years of high suppression costs. By using proactive approaches to 
reduce hazardous fuel, to restore ecosystems and to increase the 
capacity of our communities to assist, this nation can eventually 
reduce loss of life and property from wildfire catastrophes while 
lowering the tremendous suppression costs that are incurred. In 
addition, complete funding for the Forest Service's S&PF budget is a 
vital part of allowing State Foresters to work across landscape 
boundaries to maximize forest health treatments efforts. Finally, 
Western Governors fully support implementation of the recommendations 
of the WGA-Chaired Strategic Panel for Fire Suppression Costs and 
believe they can eventually lead to additional control over wildfire 
suppression costs.'' See http://www.westgov.org/wga/policy/06/
ForestHealth.pdf
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            usda's inspector general's cost recommendations
    I will discuss proactive forest health and cost control efforts 
more fully below but want to begin my testimony by addressing the 
United States Department of Agriculture Inspector General's Audit that 
was released in November 2006.\2\ The audit provides a critical 
examination of the costs to the Forest Service for suppressing large 
wildfires.
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    \2\ http://www.usda.gov/oig/webdocs/08601-44-SF.pdf
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    The audit contains certain useful and overdue recommendations that 
are consistent with WGA policy and which we urge the federal agencies 
to implement. The Forest Service and the Department of the Interior 
should make wildland fire use a large part of their arsenal of tools to 
reduce hazardous fuels. If appropriately managed, wildland fire use can 
safely improve forest health at low-cost while preventing future 
hazardous fuel driven wildfires that greatly increase costs. 
Furthermore, the federal agencies should establish controls to assess 
the performance of line officers and incident commanders in controlling 
costs. The Congress should encourage action by the federal agencies on 
these recommendations.
    However, there are certain items in the audit that are of great 
concern to Western Governors, county commissioners, state foresters and 
fire chiefs and we want to make the Congress aware of these concerns. 
The Inspector General recommends that the Forest Service seek 
clarification from Congress on

          1) the responsibilities of both the Forest Service and States 
        in protecting wildland urban interface (WUI) developments and 
        other private properties threatened by wildfires, and
          2) the need to renegotiate WUI protection responsibilities in 
        master protection agreements to ensure the fire fighting costs 
        for WUI protection are equitably and appropriately allocated 
        between federal and non-federal entities.

    The Forest Service has indicated it will attempt to determine if 
Congressional intent already exists in current laws regarding WUI 
protection responsibilities. If it does not, the Forest Service has 
previously stated its intention to seek clarification from the Congress 
regarding protection responsibilities in the WUI and on other private 
properties that are threatened by wildfires.
    We are disturbed by the apparent uncertainty of federal authorities 
for their responsibility in managing wildfires on the national forests. 
We fail to understand federal confusion on this point as the Forest 
Service Manual clearly directs the agency to protect valuable natural 
resources, recreational facilities and WUI infrastructure of the 
National Forests. Indeed, the federal responsibility to prevent fires 
that burned on federal lands from burning adjacent non-federal lands is 
clear.
    Should the Forest Service seek clarification from Congress of its 
responsibility for wildfires burning on the national forests, we 
encourage Congress to solicit state and local government and other 
perspectives on this important matter. If necessary, Congress should 
conduct a fully informed and complete assessment of the cost issues 
that relate to wildland fires that: (1) originate and burn solely on 
federal land, and, (2) those that originate on federal land and then 
escape from federal lands onto neighboring state and private lands.
    We strongly believe that state and local governments should not be 
expected to share the costs of suppressing wildfires that burn entirely 
on federal lands. However, if a federal agency takes aggressive 
suppression action on a wildfire that originates on federal land and 
later spreads onto non-federal land, a cost-share agreement with state 
or local governments is appropriate.
    We also urge the Congress to provide prompt and unambiguous 
direction to the federal agencies regarding their responsibilities for 
the management of the national forests, including the need to control 
wildland fires before they are allowed to imperil the lives or 
properties on neighboring private lands, or valuable natural resources 
on neighboring state lands. The demands of the upcoming fire season 
require that both state and federal responsibilities are exceedingly 
clear to ensure our rural communities receive the protection they 
deserve from fires burning on federal lands.

          THE STRATEGIC ISSUES PANEL ON FIRE SUPPRESSION COSTS

    The Department of Agriculture Inspector General's report makes 
clear its belief that increased suppression expenses in recent years 
are linked to growth of the WUI and the increased fire protection 
responsibilities that come with that growth. Effective fire suppression 
actions are certainly made more complex and difficult when wildland 
fires threaten private developments. Fires in the WUI can cost more 
than average fires.
    The Inspector General, however, appears to have failed to evaluate 
or consider some of the most current research and recommendations on 
the causes of fire suppression cost increases, and more importantly, 
the means to address them. In 2004, on behalf of WGA, I co-chaired the 
Strategic Issues Panel on Fire Suppression Costs that was formed by the 
Wildland Fire Leadership Council (WFLC). WFLC is a co-chaired by the 
Department of Agriculture and the Department of the Interior. Many of 
the foremost federal and nonfederal experts on the topic produced a 
report entitled ``Large Fire Suppression Costs--Strategies for Cost 
Management'' which was endorsed by Western Governors and the WFLC. 
Western Governors provided testimony on this cost control review to the 
Public Lands and Forests Subcommittee of this Committee in 2005.\3\
---------------------------------------------------------------------------
    \3\ See Testimony of James Caswell, Office of Species Conservation, 
State of Idaho and Kirk Rowdabaugh, State Forester of Arizona (Co-
Chairmen, Strategic Issues Panel on Fire Suppression Costs) on behalf 
of the Western Governors' Association before the Subcommittee on Public 
Lands and Forests of the United States Senate Committee on Energy and 
Natural Resources, April 26, 2005. http://www.westgov.org/wga/testim/
costpaneltest4-26-05.pdf
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    The Strategic Issues Panel found that fire suppression expenditures 
are overwhelmingly centered on larger fires, whether in the WUI or not. 
Rigorous statistical analysis of Forest Service data showed that from 
1980 through 2002 small fires (less than 300 acres) managed by the 
Forest Service were 98.6 % of all the fires but represented only 6.2% 
of all suppression expenditures. Larger fires (greater than 300 acres) 
represented only 1.4% of the fires but a whopping 93.8% of all 
suppression expenditures.
    Total suppression expenditures are strongly correlated (R2=0.76) 
with total acreage burned, i.e., large total expenditures are 
associated with large acres burned. In fact, two of the most expensive 
fires to control in the history of the Forest Service, the 175,000-acre 
Tripod Fire (2006) and the 500,000-acre Biscuit Fire (2003) both burned 
in very remote locations. The $82 million and $150 million, 
respectively, it cost to control these fires was insignificantly 
related to WUI protection.\4\
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    \4\ ``Large Fire Suppression Costs, Strategies for Cost 
Management,'' A Report to the Wildland Fire Leadership Council from the 
Strategic Issues Panel on Fire Suppression Costs at 9 (August 26, 
2004). http://www.fireplan.gov/reports/2004/costmanagement.pdf
---------------------------------------------------------------------------
    The Strategic Issues Panel recommended seven primary actions to 
contain federal fire suppression costs. The first recommended action, 
to increase the level of accountability for large fire costs and their 
impacts by allocating suppression funds on a regional or equivalent 
basis was intended to provide incentives to federal agency 
administrators for controlling costs. It was this single recommendation 
that the Panel believed would provide the greatest cost savings to the 
federal government because wildfire costs are driven by management 
decisions on the ground.
    It is our understanding that the federal agencies have not sought 
to implement this recommendation because they believe Congressional 
authority is required. We believe very strongly that cost controls can 
be achieved, in part, by full implementation of all the recommendations 
of the Strategic Issues Panel.
    The Inspector General's audit fails to make these recommendations a 
priority for the Forest Service and instead infers that cost shifting 
to states, local governments and others is a solution to spiraling 
suppression costs. Cost shifting is not a solution but rather a 
misguided effort to pass the buck on costs when the agencies themselves 
have not taken all the practical steps necessary to control them. We 
again urge the Congress to take whatever steps are necessary to ensure 
the federal agencies make the Panel's recommendations a reality.

          THE 10-YEAR COMPREHENSIVE STRATEGY AND COST CONTROL

    The Western Governors' Association recently agreed to an updated 
Implementation Plan to the 10-Year Comprehensive Strategy ``A 
Collaborative Approach for Reducing Wildland Fire Risks to Communities 
and the Environment.'' \5\ The Strategy was requested by the Congress 
in 2000. Since then, the Strategy and its Implementation Plan have 
formed the basis for forest health efforts across the nation and 
significant progress has been made on the ground in using locally 
driven collaboration and in undertaking landscape level planning and 
treatments. The Congress adopted the collaborative approach developed 
in the Strategy in its Healthy Forests Restoration Act of 2003.
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    \5\ http://www.westgov.org/wga/publicat/TYIP.pdf
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    The need to develop a revised implementation plan was anticipated 
in the text of the first plan. Moreover, the actions items agreed to in 
the first plan that the Governors signed with the Secretaries of the 
Interior and Agriculture in May 2002 have, for the most part, been 
completed. At the urging of WGA's Forest Health Advisory Committee, 
which conducted a review of the original plan in 2004, the Governors 
updated the plan with the federal agencies, counties, state foresters, 
fire chiefs and stakeholders. The goals of the plan remain the same as 
in the 10-Year Strategy. A collaborative approach needs to be used to:

   Improve Prevention and Suppression of Wildfires
   Reduce Hazardous Fuels
   Restore Fire-Adapted Ecosystems
   Promote Community Assistance

    The new Implementation Plan puts additional emphasis in the 
following areas:

   information sharing and monitoring of accomplishments and 
        forest conditions to improve transparency;
   a long-term commitment to maintaining the essential 
        resources for the plan;
   a landscape-level vision for restoration of fire adapted 
        ecosystems;
   the importance of using fire as a management tool; and
   continuing improvements in collaboration.

    The new Implementation Plan was endorsed and sent to the Congress 
by WGA, the Secretaries of the Interior and Agriculture, the National 
Association of Counties and the National Association of State Foresters 
in December 2006.\6\ What continues to be highly notable about the 10-
Year Strategy is the contribution of expertise and endorsements from 
WGA's 60-person Forest Health Advisory Committee. These individuals are 
listed in Appendix C of the plan and they are some of the preeminent 
national experts on fire fighting, forest health treatments before and 
after fires and on how small communities need to play a role in this 
effort. They range from fire chiefs to timber industry professionals, 
from environmentalists to university professors.
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    \6\ http://www.westgov.org/wga/press/tyip12-6-06.htm.
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    When fully implemented, the 10-Year Strategy and the new 
Implementation Plan will use proactive measures to improve the health 
of our forests to prevent catastrophic wildfires. These efforts require 
cross-boundary work, full involvement of states and stakeholders, and, 
most importantly, a long-term commitment of time, resources and 
manpower. It is large fires that at great speed eat up the resources 
appropriated for suppression. So full implementation, with adequate 
funding, of all four goals of the 10-year Strategy is a wise and 
economical cost-containment strategy. It is substantially cheaper to 
thin forests and protect communities in advance than to put out fires 
and repair the damage from them after the fact.
    Some specifics from the new Implementation Plan under each of its 
goals demonstrate the path forward that will help the nation get ahead 
of the tremendous escalation in fire suppression costs.
Goal 1--Improve Fire Prevention and Suppression
    Performance under this goal will be measured by the federal 
agencies based on the percent of wildfires controlled during initial 
attack and the number of unwanted human-caused wildfires. Using a 
stratified cost index, the agencies will also examine what percent of 
fires not contained in initial attack exceed the index. The key action 
item under this goal is full implementation of the cost control 
recommendations of the Strategic Issues Panel discussed above.
Goal 2--Reduce Hazardous Fuels
    Proactive management of the hazardous fuels in our forests is key 
to reducing the severity and number of uncontrolled and costly 
wildfires. Fuel treatments can be most economically and effectively 
carried out if a collaborative approach to plan and implement large-
scale treatments across the landscape (federal, state, tribal, and 
private land ownerships) is utilized. By using collaboration, those 
acres most in need of treatment because of their condition or location 
will be accurately identified. Community Wildfire Protection Plans 
(CWPPs) as called for by Congress in the Healthy Forests Restoration 
Act are the instrument for expressing the collaborative public will. 
The performance measures and tasks in Goal 2 of the new Implementation 
Plan push federal and state land managers toward treatment of the acres 
most in need of treatment as identified in CWPPs. The new plan will 
also provide necessary information on the effectiveness and cost of 
fuel treatments.
    Performance under Goal 2 of the new plan will be measured as 
follows:

   Number and percent of WUI acres treated that are identified 
        in CWPPs and the number and percent of non-WUI acres treated 
        that are identified through collaboration consistent with the 
        Implementation Plan.
   Number of acres treated per million dollars gross investment 
        in WUI and non-WUI areas.
   Percent of collaboratively identified high priority acres 
        treated where fire management objectives are achieved as 
        identified in applicable management plans or strategies.

    The action items under Goal 2 of the plan are designed to educate 
land managers, the public and the Congress on the value and 
effectiveness of fuel treatments. There are a number of questions in 
this regard that collaborative teams will answer. Some examples 
include: What information from federal land management databases such 
as LANDFIRE can be made public so we all can understand if a fuel 
treatment made a significant difference or if it was conducted over 
multiple land ownerships? Can we develop measures that help us 
determine the degree and longevity of fire hazard reduction achieved by 
fuel treatments? How do we determine when a fuels treatment meets the 
objectives of its plan and what data sources are available to inform 
the determination? Once these and other efforts are completed, we 
should all understand how to make the hazardous fuel treatments tool 
more precise, more effective and more valuable. Most importantly, 
collaboratively targeting this tool at the strategic acres most in need 
of attention will positively impact the nation's suppression expenses.
Goal 3--Restoration and Post-Fire Recovery of Fire-Adapted Ecosystems
    The most significant objective of this goal is that it will lead to 
an increase in wildland fire use; an extremely economical method of 
undertaking hazardous fuels treatments and reducing suppression costs 
if appropriate planning and monitoring are undertaken. For example, the 
federal agencies will now be measuring and reporting how many acres 
each year are being identified using the collaborative model and 
treated using wildland fire use or other fuel treatment methods. Action 
items include:

   Analyze and recommend improvements to polices, incentive 
        structures and personnel capacity issues that are barriers to 
        wildland fire use, mechanical treatments and prescribed fire.
   Develop and implement a substantial public education 
        campaign that emphasizes fire's role in ecosystems and the 
        benefits of fire management to ecosystems and public health and 
        safety. This initiative will complement Smokey the Bear's 
        message of fire safety.
   Add information to a revision of the Community Wildfire 
        Protection Plan Handbook \7\ so that communities can consider 
        restoration and wildland fire use when developing CWPPs.
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    \7\ http://www.safnetorg/policyandpressicwpp.cfm
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   During amendments, revisions or updates of federal land and 
        resource management plans and fire management plans, ensure 
        those plans consider and incorporate wildland fire use 
        objectives consistent with the 10-Year Strategy and other 
        federal policies.

    These action items will set the stage for an increase in wildland 
fire use. If planned for and carefully monitored, wildland fire use is 
a safe and effective means of reducing hazardous fuels and reducing 
fire suppression costs.
Goal 4--Promote Community Assistance
    A significant part of controlling fire suppression costs is 
promoting and reinforcing individual landowner responsibility for 
wildfire protection as well as improving local fire department capacity 
and training. The new Implementation Plan sets up a number of measures 
and action items to enhance safety by engaging WUI communities. For 
example, the new plan will measure the following:

   Number and percent of communities-at-risk covered by a CWPP 
        that are reducing their risk from wildland fire. A community is 
        at reduced risk if it has satisfied at least one of the 
        following requirements:

                  1. Recognized as a FIREWISE community or equivalent, 
                or
                  2. Enacted a mitigation/fire prevention ordinance, or
                  3. High priority hazardous fuels identified in a CWPP 
                or equivalent are reduced or appropriate fuel levels on 
                such lands are maintained in accordance with a plan.

   Percentage of at risk communities who report increased local 
        suppression capacity as evidenced by:

                  1. The increasing number of trained and/or certified 
                fire fighters and crews, or
                  2. Upgraded or new fire suppression equipment 
                obtained, or
                  3. Formation of a new fire department or expansion of 
                an existing department involved in wildland fire 
                fighting.

    Two action items in Goal 4 are intended specifically to aid WUI 
communities in planning and protecting themselves in advance of fire. 
One calls for developing a publicly accessible database of local zoning 
ordinances and state planning efforts that have successfully reduced 
land owner risks associated with wildland fire. This information would, 
among other things, be used to develop model CWPPs and wildfire 
ordinances. The other action item would provide improved technical 
assistance for at-risk communities to develop or update their CWPPs. 
Should resources be obtained, the National Association of Counties, the 
National Association of State Foresters and the International 
Association of Fire Chiefs would be well positioned to provide expert 
leadership for these respective initiatives.
Overall 10-Year Strategy Goal--Collaboration
    The specific measures and action items in the new Implementation 
Plan for the 10-Year Strategy will contribute substantially to wildfire 
cost control. Yet, it is the collaborative nature of the entire 
Strategy that is essential to success on the ground and in the budget. 
The Strategy brings together all the essential partners to help the 
nation proactively get ahead of the wildfire threat and reduce the 
costs of suppression we face each season. All levels of government from 
local fire fighters, to county commissioners to Governors to 
Secretaries are engaged. The breadth of support for the Strategy and 
the new Implementation Plan from non-governmental stakeholders is 
extremely broad and diverse. All of these parties have a role to play 
in implementing the plan and ensuring its objectives are met.
    The Congress and the Administration need to recognize the consensus 
that has been constructed, the cost control aid these measures and 
action items can provide, and move with all deliberate speed to fund 
and fully implement the recommendations. Western Governors ask the 
Congress to reaffirm the importance of this collaborative, proactive 
and forward thinking 10-Year Strategy that Congress called for in 2000.
    The Congress should direct the federal agencies to make 
implementation of the new plan among its highest priorities. Due 
diligence to comprehensively and collaboratively accomplish all four 
goals of the Strategy should be required. Restoration and Community 
Assistance are no less valuable in contributing to forest health and 
cost control then are Reducing Hazardous Fuels and Improving Prevention 
and Suppression. These are interrelated objectives and should be 
treated as equal priority items if the Congress and the Administration 
are of a mind set that they desire to seriously address fire 
suppression cost control at this time.

       RE-CAP OF WGA, NACO, NASF AND IAFC VIEWS ON CONGRESSIONAL 
                          COST-CONTROL ACTIONS

    USDA Inspector General Audit Report--

          1) Encourage federal agency action that increases their 
        ability to safely use wildland fire for hazardous fuel 
        reduction and restoration purposes.
          2) Encourage federal agencies to establish controls to assess 
        the performance of line officers and incident commanders in 
        controlling costs.
          3) Solicit state and local government and other views should 
        the Forest Service seek clarification of its wildfire 
        suppression responsibilities.
          4) If necessary, conduct a fully informed and complete 
        assessment of cost issues related to wildland fire on public 
        lands.
          5) Promptly provide unambiguous direction to federal agencies 
        regarding their responsibility to manage public lands and 
        prevent wildfires that originate therein from imperiling the 
        safety, land and property of other landowners.

    Strategic Issues Panel on Fire Suppression Costs--

          1) Take whatever steps are necessary to provide authority and 
        assist the federal agencies to ensure they fully implement the 
        cost control recommendations of the Panel.

    10-Year Comprehensive Strategy--

          1) Reaffirm the importance of this collaborative, proactive 
        and cost-controlling Strategy that Congress initiated in 2000.
          2) Direct the federal agencies to make the new Implementation 
        Plan of the 10-Year Strategy one of their highest priorities.
          3) Direct the federal agencies to make collaboration and each 
        of the other four goals of the Strategy--Improve Prevention and 
        Suppression, Reduce Hazardous Fuels, Restore Fire-Adapted 
        Ecosystems and Promote Community Assistance--of equal priority 
        for accomplishment.

    Western Governors appreciate this Committee's consideration of our 
views on this vitally important topic. We will continue to work with 
you and the federal agencies to improve the health of our forests and 
control fire suppression costs.

          THE FOREST SERVICE BUDGET AND LEADERSHIP TRANSITION

    Preliminary information indicates the 2007 wildfire season will be 
a challenging one for the federal agencies responsible for wildfire 
protection. This challenge will present itself not only in terms of 
fire intensity, but also in terms of cost. Predictions already point to 
a suppression cost crunch mid-season.
    This is not a new phenomena or trend. Continuing droughts, climate 
change and overly dense stands of trees and wildfire fuels point to 
continued suppression cost increases. At the same time, the Forest 
Service is trying to address other critical national issues such as 
invasive species, energy development and recreation pressures on our 
National Forests. In the face of these immense challenges, the Forest 
Service has faced an essentially flat budget since 2001.
    As we have detailed in this testimony, we believe there are 
substantial steps the Forest Service and Department of the Interior can 
take to control suppression costs. At the same time, the Congress needs 
to carefully consider and find a way to increase the budget resources 
dedicated to fire and forest management activities provided to the 
federal wildland fire agencies given the growing responsibilities that 
the Congress and the nation entrust to them.
    Before closing, we would also like to take a moment to acknowledge 
the leadership change at the Forest Service. Chief Dale Bosworth will 
be officially retiring from the USFS in just a few days after forty-
plus years of service to the agency and the country. We thank him for 
his service and his six years as Chief during a period that has proven 
to be quite momentous for the agency. Chief Bosworth has been a strong 
partner with us in establishing the 10-Year Strategy, implementing 
stewardship contracts and developing Community Wildfire Protection 
Plans, among other initiatives.
    We are also pleased with the selection of the new Chief, Gail 
Kimbell, the first woman to lead the Forest Service. Ms. Kimbell's 
track record shows an understanding of collaboration and community 
involvement. We believe these will serve the agency well as it re-
commits itself to the 10-Year Strategy and a strong partnership with 
state and local government.
    Mr. Chairman, thank you again for this opportunity to present the 
views of the Western Governors, county commissioners, state foresters, 
and fire chiefs.

    The Chairman. Thank you very much.
    Our cleanup hitter today is James Caswell and, since he is 
from Idaho, Senator Craig would like to make a few comments by 
way of introduction of this witness.
    Senator Craig. Well, thank you very much, Mr. Chairman.
    Certainly Jim is well qualified in the role that he is 
playing here as co-chair of the Strategic Issues Panel on Fire 
Suppression. I first met Jim and worked with him when he was 
supervisor of the Clearwater, I think, before he went to the 
dark side of State government. I think then-Governor Kempthorne 
asked him to come down and create, what is it, Office of 
Species Management or something in that category.
    But anyway, certainly Jim has got the kind of experience in 
fire management and looking at the broad perspective versus the 
individual incident situation that I think gives him the 
expertise to be a valuable witness. We are pleased to have you 
with us today, Jim. Thank you.

STATEMENT OF JAMES CASWELL, CO-CHAIR, STRATEGIC ISSUES PANEL ON 
                     FIRE SUPPRESSION COSTS

    Mr. Caswell. Thank you, Mr. Chairman and members of the 
committee, and thank you for the opportunity to appear and 
present testimony on the findings of the Strategic Issues Panel 
on Fire Suppression Costs. The full text of my testimony has 
been provided to the committee for the record.
    The panel's work was chartered by WFLC in early 2004 and we 
completed our report in August 2004. I appear before the 
committee today in my role as co-chair of that panel. I 
testified before the Public Lands and Forests Subcommittee of 
the committee on the same topic in April 2005.
    The barriers and obstacles to cost containment remain as 
pertinent today as they were 3 years ago, and likewise the 
panel's findings and recommendations are also still pertinent, 
maybe even more so given last year's statistics. The panel 
concluded that the most--that most of what is knowable about 
fire costs, particularly large fire costs and their management, 
is really already known. We came to that conclusion because we 
reviewed some 12 reports over the last decade. We interviewed a 
multitude of witnesses from all kinds of various interests and 
we analyzed more than 300 past recommendations that have been 
made on how to control costs, and they spanned the gauntlet 
from tactical, operational, to strategic.
    At the end of the day, we decided to be very strategic and 
go on the side of the vital few recommendation as opposed to 
the trivial many. So we developed seven recommendations. I just 
want to summarize those very quickly for the committee. The 
first recommendation and, by the way, the one that we really 
feel is the most important--and I might add that all of these 
recommendations in our view need to be implemented together. 
Now, you can implement them separately, but at the end of the 
day we felt if you are going to stem the rise--and we are never 
going to turn it around--but if you can stem the rise of the 
increasing costs, that these seven recommendations, if 
implemented holistically, would have the best opportunity to 
really do that.
    The first one was to increase the level of accountability 
and interest for large fire costs and their impacts by 
allocating suppression funds in a different way. We suggested 
regionally or in some type of--on some type of equivalent 
basis, when you look at all five of the wildland fire Federal 
agencies.
    No. 2, is to set policy and direction on agency land and 
resource management planning and to incorporate cost management 
on large wildfires.
    No. 3, dealt with plan, budget, and manage resources 
effectively for large fire suppression such that initial 
response and extended attack are not compromised. This is a 
drawdown issue.
    No. 4, was to ensure that the initial responses are always 
aggressive and driven by the principle of utilizing the closest 
appropriate resources, including local and Federal--local and 
tribal resources, I am sorry.
    The fifth was to incorporate fuels management and future 
fire management cost considerations when planning all resource 
management projects on both public and private lands.
    Sixth was to commit to improving the fire cost data 
infrastructure. Data is one of the areas that is boring, but it 
is terribly important, and right now it is difficult to add up 
the numbers. In fact, you cannot do it across the Department, 
between the two Federal Departments.
    Seven was to develop and use a benefit-cost means--measure 
as the core measure of suppression, as opposed to this cost per 
acre.
    The panel's recommendations, with caveats and amendment, 
were adopted by WFLC in December 2004. Since that time the 
agencies have and continue to make progress in implementation 
kind of across the board. In fact, you heard Secretary Rey 
allude to some of those today. However, recommendation one, 
leadership commitment and accountability, has not moved forward 
in full and the panel believes this recommendation has the 
greatest opportunity for suppression cost savings.
    Some progress has clearly been made and I urge the 
committee to seek a status report from the agency on all 
recommendations, and in particular recommendation A.
    Thank you, Mr. Chairman. I will stand for questions.
    [The prepared statement of Mr. Caswell follows:]

 Prepared Statement of James Caswell, Co-Chair, Strategic Issues Panel 
on Fire Suppression Costs and Director, Office of Species Conservation, 
                             State of Idaho

    Thank you Chairman Bingaman and other distinguished members of this 
Committee for the opportunity to appear and present testimony for 
today's hearing on wildfire suppression costs. My name is Jim Caswell, 
I served with the U.S. Forest Service for 28 years and I am currently 
the Director of the Governor of Idaho's Office of Species Conservation. 
In addition to my duties for the State of Idaho, in 2004, I was asked 
by then-Governor Kempthorne to represent the Western Governors' 
Association as a co-chair of the Strategic Issues Panel on Fire 
Suppression Costs. The Wildland Fire Leadership Council or WFLC, led by 
the Departments of the Interior and Agriculture, chartered the Panel in 
early 2004 to ``explore specific strategic issues associated with large 
fire costs, including the relationship of fire to vegetation management 
and land and resource management plans.'' \1\
---------------------------------------------------------------------------
    \1\ Large Fire Suppression Costs: Strategies for Cost Management, A 
Report to the Wildland Fire Leadership Council From the Strategic 
Issues Panel on Fire Suppression Costs (August 2004).
---------------------------------------------------------------------------
    I appear before the Committee today in my role as Co-Chair of the 
Panel. In April 2005, I testified before the Public Lands and Forests 
Subcommittee of this Committee on the same topic. I am pleased to 
reiterate that testimony today and provide some perspective on cost 
control developments since that time. However, on the issue of to what 
extent the federal agencies have implemented the Panel's 2004 
recommendations, this Committee should seek full information from the 
federal agencies on the exact extent of their actions since that time.

          THE STRATEGIC ISSUES PANEL ON FIRE SUPPRESSION COSTS

    The need for focusing on the costs of large fire is clear. Fire 
suppression expenditures are overwhelmingly centered on larger fires. 
``From 1980 through 2002 small fires (less than 300 acres) managed by 
the Forest Service totaled 98.6 % of the fires reported but represented 
only 6.2% of the total suppression expenditures. Larger fires (greater 
than 300 acres) represented 1.4% of the fires reported and a whopping 
93.8% of the suppression expenditures.'' \2\ Those basic percentages 
remain the same today.
---------------------------------------------------------------------------
    \2\ Id. at 6.
---------------------------------------------------------------------------
    ``Unwillingness to take greater risks [in operational fire 
suppression decision-making] , unwillingness to recognize that 
suppression techniques are sometimes futile, the `free' nature of 
wildland fire suppression funding, and public and political 
expectations are all potential contributors to the underlying causes 
for the high cost of large fires.'' \3\
---------------------------------------------------------------------------
    \3\ Id.
---------------------------------------------------------------------------
    The WFLC charter for the Panel explicitly identified five areas for 
examination:

          1. Barriers and obstacles to cost containment;
          2. Strategies for cost containment success;
          3. Impediments to equitable sharing of suppression and cost 
        apportionment among jurisdictions;
          4. Criteria to measure cost containment success; and,
          5. Relationships of fire management plans and resource 
        management plans to suppression costs.

    Fourteen individuals representing a broad spectrum of fire fighting 
interests, including the federal government, worked collaboratively 
over a four-month period and met multiple times face-to-face to develop 
the Panel's final report. The Panel

   examined the last five years' reports related to suppression 
        costs;
   interviewed a wide variety of people and groups, including 
        researchers, special interests, fire managers, and other 
        government officials; and
   analyzed more than 300 past recommendations

to better understand the issues and to develop strategic actions that 
met the intent of the Panel's charter. The Panel's report was presented 
to the WFLC in July 2004.
    While there have been many reports on this topic in the past that 
have led to efficiencies in managing the costs of large fires, those 
efforts have, at best, provided marginal cost reductions. The Panel's 
report, unlike these earlier efforts, seeks to substantively address 
the underlying causes of large fire suppression costs. It is this 
important distinction that WGA believes makes the Panel's report 
extremely valuable. Recognizing this, Western Governors commended the 
report to the Secretaries of the Interior and Agriculture soon after 
its completion.\4\
---------------------------------------------------------------------------
    \4\ Western Governors' Association letter of November 8, 2004 to 
Secretary of the Interior Gale Norton and Secretary of Agriculture Ann 
M. Veneman. http://www.westgov.org/wga/initiatives/fire/cost-ltr11-8-
04.pdf
---------------------------------------------------------------------------
    The strategic and interdependent recommendations set forth in the 
Panel's report are as follows:

          A. Increase the level of accountability and interest for 
        large fire costs and their impacts by allocating suppression 
        funds on a regional or equivalent basis.
          B. Set policy and direction on agency land/resource 
        management planning to incorporate cost management on large 
        wildfires.
          C. Plan, budget, and manage resources effectively for large 
        fire suppression, such that resources for effective initial 
        response and extended attack are not compromised.
          D. Ensure initial responses are always aggressive and driven 
        by the principle of utilizing the closest appropriate 
        resources, including those of local and tribal governments.
          E. Incorporate fuels management and future fire management 
        cost considerations when planning all resource management 
        projects for public and private lands.
          F. Commit to improving the fire cost data infrastructure as a 
        prerequisite step toward improving accountability and 
        strengthening fire management performance.
          G. Develop and use a benefit cost measure as the core measure 
        of suppression cost effectiveness.

    The following are the recommendations as taken from the Panel's 
report including the necessary components of each recommendation as 
well as the goals each recommendation seeks to achieve.
A. Leadership, Commitment and Accountability
    Increase the level of accountability for and interest in large fire 
costs and their impacts by allocating suppression funds on a regional 
or equivalent basis and by providing direct incentives that will help 
change suppression management behavior. Create a dedicated group of 
agency administrators representing local and regional levels, and at 
least one member of the Panel, to develop operational rules and 
oversight procedures. Components of this recommendation include:

   Allocate suppression funds to regions or logical 
        geographical divisions.
   Use predictive-based budgeting, as opposed to the current 
        system of 10-year moving averages, as the basis for allocation. 
        The 10-year average will not provide sufficient funds to 
        implement this recommendation.
   Establish special relief provisions for ``mega'' or 
        ``extreme'' large wildfires, i.e., establish reasoned estimates 
        for reasonably anticipated levels of funding.
   Create and manage a national suppression reserve from 
        allocated suppression funds. Eliminate ``severity funding,'' as 
        it is known today.
   Provide incentives for staying within allocated amounts by 
        allowing up to 51% of ``savings'' to be used for other fire-
        related projects. Set provisions for the remaining 49% of 
        savings to be returned to the national suppression reserve.
   Require each region or logical geographic division to 
        contribute a co-payment to the wildland fire suppression 
        expenditure before granting access to the national suppression 
        reserve.
   Improve adjacent agency partnerships to co-manage the funds. 
        Combine allocations where practical and feasible.
   Increase regional tracking and reporting of suppression 
        expenditures. Establish a Headquarters' comptroller, who 
        reports directly to the agency administrator (not the fire 
        organization), explicitly for suppression cost allocations, 
        monitoring, and suppression reserve management.

    Generally, cost considerations take a back seat to firefighter and 
public safety and environmental concerns. While this hierarchy of 
concern is appropriate, cost considerations are never brought to the 
forefront. Costs and cost effectiveness have rarely been regarded as a 
priority for the federal wildland fire suppression organizations. As a 
result, most agency administrators have operated under the current 
system with a sense of having essentially a blank check. The lack of 
accountability for costs creates the climate that leads to increasing 
costs of wildland fire suppression. The goal of this recommendation, 
therefore, is to create the accountability that is missing and the 
incentives for land managers to consider costs.
    The Panel strongly believed that Recommendation A will provide the 
greatest amount of cost savings, if fully implemented.
B. Resource/Land Management Planning (R/LMPs) and their Relationships 
        to Fire Management Planning (FMPs)
    Set policy and direction on agency land/resource management 
planning to incorporate cost management on large wildfires. Components 
of this recommendation include:

   Display the anticipated wildland fire suppression costs in 
        R/LMPs for each alternative proposed, including the no-action 
        alternative.
   Establish the expectations in R/LMPs and FMPs for costs of 
        implementing the plans by recognizing the probability of large 
        fire occurrence and specifying acceptable losses, given the 
        land management direction established.
   Where state, local, and tribal governments have established 
        effective cost management guidance, consider it in the agency 
        planning process.

    Without the consideration of cost in the planning process, costs 
are simply a result of the incident and nothing else should be expected 
since nothing else was planned. The goal is the establishment of a 
``line of sight'' from land management planning through FMP preparation 
and on into the Wildland Fire Situation Analyses that incorporates cost 
management as a priority. R/LMPs must recognize the wildland fire 
behavior conditions its decisions create.
C. Sustaining Initial and Extended Attack Capability
    Plan, budget and manage resources effectively for large fire 
suppression such that resources for effective initial response and 
extended attack are not compromised. Components of this recommendation 
include:

   Develop standard procedures to determine minimum resource 
        levels that need to be maintained for effective initial and 
        extended attack in each geographic area using predictive 
        services capabilities based on Energy Release Component, or 
        other applicable fire danger index.
   For those resources not needed to meet the requirements 
        noted above, develop and establish protocols for national 
        control and positioning of those resources.

    Creating a sustained program means emphasizing both a strong 
initial attack and extended attack capability. It must also provide for 
increasing state and local capability for efficient support of federal 
programs. This entails optimizing funds provided to field units by 
ensuring support costs are appropriate for services received. With 
maximum financial flexibility to pre-position resources, it is possible 
to increase initial attack success with the benefit of containing or 
possibly lowering costs.\5\ It is also critical to sustain initial and 
extended attack resource capability at the local level by ensuring 
consistent budgeting for preparedness resources. This element would 
involve a cohesive, long-term budget strategy that includes 
preparedness, emergency suppression, fuels management, and state and 
local fire assistance in order to implement an effective, cost-
efficient fire management program.
---------------------------------------------------------------------------
    \5\ Title II of the National Drought Preparedness Act of 2005 (S. 
802) seeks to address an inherent flaw in wildfire suppression funding 
administered by the Federal Emergency Management Agency (FEMA) 
regarding pre-positioning. Currently, FEMA has authority to reimburse 
states for pre-positioning equipment to combat wildfires. This 
reimbursement is available only for a two-week period following a FEMA 
declaration. However, this current authority actually acts as a 
disincentive to states to provide pre-positioned resources. When states 
proactively and effectively extinguish a fire before it becomes an 
emergency, they do not qualify for reimbursement. In such a case, FEMA 
does not make an emergency declaration because there is no emergency. 
Conversely, when state efforts fail at initial containment and a large 
fire ensues, they are reimbursed by FEMA. Title II of the National 
Drought Preparedness Act contains language that would ameliorate this 
disincentive by amending existing FEMA authority under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5131 
et seq.).
---------------------------------------------------------------------------
D. Initial Attack and Extended Attack Response
    Ensure initial responses are always aggressive and driven by the 
principle of utilizing the closest appropriate resources, including 
those of local and tribal governments. Components of this 
recommendation include:

   Use all available local resources in wildfire suppression 
        strategy to create an integrated and coordinated response to 
        wildland fire.
   Form local Type 3 Incident Management Teams to manage 
        initial and extended attack operations locally rather than rely 
        on mobilization of Type 1 and Type 2 teams. Develop agreements 
        with local, state and federal agencies that establish local 
        Type 3 teams.
   Focus meaningful federal and state agencies' financial 
        support and provide appropriate technical assistance to 
        strengthen local resources and assure their availability on a 
        wildfire incident.

    Enhanced firefighting preparedness and increased interagency 
coordination at the local level will improve the cost effectiveness of 
federal and local wildland firefighting efforts. An effective local 
department that is prepared to act immediately or in cooperation with 
other agencies to suppress wildfires can attack and contain wildfires 
on adjacent state and federal land, often before state and federal 
forces arrive. They can also provide much-needed assistance to large 
state and federal wildfires, reducing national mobilization costs for 
federal agencies and lowering overall suppression expenditures.
    Increasing the skills and availability of locally based Type 3 
teams will lead to effective extended attack. When successful, the need 
for mobilization of higher cost Type 1 or 2 teams is negated. 
Additionally, the development of Type 3 teams that use local 
firefighters and support (regardless of agency) extensively will reduce 
costs in a variety of ways: the teams could take command, coordinate an 
effective extended attack, order necessary resources, and provide for 
safety through increased supervision, command and control. Most 
importantly, these teams will have knowledge of the local conditions 
and landscapes that will help them make good informed decisions. Within 
the first few hours of a fire-start, they can be very effective in 
controlling the fire quickly by establishing a competent management 
organization.\6\
---------------------------------------------------------------------------
    \6\ See, The Changing Role and Needs of Local, Rural, and Volunteer 
Fire Departments in the Wildland-Urban Interface: Recommended Actions 
for Implementing the 10-Year Comprehensive Strategy, An Assessment and 
Report to Congress (June 2003). http://www.stateforesters.org/pubs/
Final%20Rural%20Fire%20Report.pdf
---------------------------------------------------------------------------
E. Landscape Fuels Management for Public, Tribal and Private Lands
    Incorporate fuels management and future fire management cost 
considerations when planning all resource management projects for 
public and private lands. Components of this recommendation include:
    For Public and Tribal Lands

   Develop interagency protocols that identify and report acres 
        of hazardous fuels reduction from wildland fire.
   Require analysis of burned-over areas and adopt active 
        management strategies to ensure that excessive fuels do not 
        accumulate again.
   After large wildfires, re-evaluate the impacts and 
        feasibility of adopting strategies that use the recently burned 
        areas as boundaries for less costly wildland fire use. 
        Incorporate the opportunity presented by the wildfire into the 
        unit fuels strategy.

    For Private Lands

   Engage communities and property owners in creating 
        defensible space around structures, and appropriate land use, 
        zoning and construction methods/standards for structures 
        situated in fire hazard areas.
   Strive to make R/LMPs and FMPs into national, comprehensive 
        interagency and intergovernmental wildland vegetation defensive 
        management plans.

    I want to put particular emphasis on the fact that the Panel also 
found that a paradigm shift in thinking about hazardous fuels reduction 
effectiveness is required and can be started by ceasing to use acres 
treated as a ``results'' measurement for program accomplishments.
    Despite some recent increases in funding for fuel treatments, it is 
apparent that current fuels reduction strategies are not able to 
address the full magnitude and scope of the fuels problem. 
Collectively, the integration of wildland fire risk mitigation measures 
into all resource management activities, a shift in suppression tactics 
and greater emphasis on post-fire fuel characteristics may reduce the 
overall costs of suppression, while ensuring the protection of high 
values-at-risk.
    Solutions must address how to create a politically viable, 
collaborative effort to manage the landscape and mitigate fire risks 
within and around the wildland/urban interface.
F. Fire Cost Management Data Needs
    Commit to improving the fire cost data infrastructure as a 
prerequisite step toward improving accountability and strengthening 
fire management performance. Necessary components of this 
recommendation include:

   Wildland fire management agencies should begin developing a 
        more complete fire database and management information system.
   Forest Service Research and Development, in partnership with 
        the fire agencies, should develop and maintain this database 
        and develop a regular series of peer-reviewed reports and 
        analyses that track cost patterns and influences over time.
   Establish an effective national fire-related information 
        technology/information management framework under the guidance 
        of the WFLC.
   Develop an integrated database for all federal, state, and 
        local agencies involved in the collection of wildland fire data 
        that allows for sharing information across agencies and 
        provides for a consolidation report on wildland fire response.

    The absence of information inhibits the ability to improve program 
management and contain costs. Not knowing fully what wildfires cost--
and why--cripples credibility and accountability at all levels 
throughout the organization and with external stakeholders. Before cost 
management can become an integral part of the fire culture, similar to 
safety and stewardship, data and meaningful information on costs and 
cost management performance will have to be made readily available.
    Data problems are not confined to suppression expenditures. Data on 
actual fuels treatment expenditures and treatment characteristics are 
also absent. Information maintained in the National Fire Plan 
Operations and Reporting System (NFPORS) contains planned--not actual--
costs, and data are collected to report progress rather than evaluate 
and analyze actual results. Without better data on actual costs and 
their drivers, the agencies cannot assess their firefighting 
effectiveness or the efficiency with which they are managing costs.
G. Cost Management Metrics
    Develop and use a benefit cost measure as the core measure of 
suppression cost effectiveness. Necessary components of this 
recommendation include:

   Measure should be supported by a comprehensive analysis of 
        wildland fire suppression expenditures and losses averted.
   Analysis should be supported with a comprehensive knowledge 
        base of fire management costs, suppression cost drivers, and 
        values-at-risk.
   Losses averted and suppression costs should be estimated and 
        compared on every fire greater than 300 acres, using defensible 
        methodology for estimation of values-at-risk and scientific 
        fire behavior predictions for estimating the extent of fire 
        involvement in the absence of control.
   Benefit/cost ratios should be tracked over time and across 
        regions and forests to assess trends.

    Performance measures need to encourage managers to balance costs 
and protection objectives and to inform the public and government 
officials with a more complete picture for public debate. Without 
reliable and clear performance measures and cost information, land and 
fire managers may be compelled to select suppression alternatives to 
reduce potential negative impacts regardless of the cost.
    Needed is a measure that helps evaluate the benefits and costs of 
suppression alternatives. Cost management involves not only minimizing 
the cost of suppression inputs and assuring their productive 
deployment, but also making sure that the total value of the cost and 
losses averted is in line with the direct and indirect costs of 
protecting those values. To bring the costs and benefits of an activity 
into an acceptable balance, managers of the activity can either 
increase the benefits or decrease the costs.

         NEXT STEPS: IMPLEMENTATION OF THE RECOMMENDATIONS AND 
                         CONGRESSIONAL ACTIONS

    The WFLC discussed implementation of the Panel's recommendations at 
their December 2004 meeting. An overall review of the recommendations 
by WFLC staff concluded that most of the report would be feasible to 
implement, if agency leadership is committed to making implementation 
of the Panel's recommendations a priority. However, resources at the 
agencies are stretched thin. Staff noted at the time that most of the 
people who should be assigned to implementation are also involved in 
other high priority interagency assignments.
    WFLC went forward, and with some caveats and amendments, adopted 
the bulk of the recommendations of the Panel, and I commended them for 
doing so.\7\ However, on Recommendation A: ``Leadership, Commitment and 
Accountability,'' where the Panel believes there is the greatest 
opportunity for suppression cost saving, WFLC was not able to move 
forward in full. In part, WFLC had concerns that certain components of 
the recommendations would require Congressional action to implement. 
The following were noted:
---------------------------------------------------------------------------
    \7\ See Wildland Fire Leadership Council, Summary Decisions and 
Action Items, Emmitsburg, Maryland, December 2004 at http://
www.fireplan.gov/leadership/120704.html

   To create a national suppression reserve and thereby 
        eliminate severity funds, Congressional approval might be 
        required to allow reprogramming from suppression to 
        preparedness and to create the national-level fund.
   Congressional approval was also noted as necessary to allow 
        a co-payment from a federal land manager to the wildland fire 
        suppression expenditure before granting access to the national 
        suppression reserve. Appropriations law prohibits augmentation 
        of one account with funds appropriated for a different purpose.
   To provide incentives to regional managers to stay within 
        allocated suppression costs by allowing them to use part of any 
        savings on other fire-related projects, Congressional approval 
        was also noted as necessary, given the prohibition against 
        moving appropriated funds from one budget line-item to another 
        (e.g., from suppression to forest restoration) without prior 
        approval.\8\
---------------------------------------------------------------------------
    \8\ I want to especially note that the federal agencies have 
resisted this important and very valuable notion of ``incentives'' 
since the Panel made its recommendations. I understand that some of the 
components of Recommendation A were evaluated by the federal agencies. 
Providing incentives was not included in these efforts. Providing 
incentives for staying within allocated amounts by allowing up to 51% 
of ``savings'' to be used for other fire-related projects is something 
the Panel and I feel would have a significant impact on fire management 
behavior.

    As I did in the April 2005 testimony, I urge appropriate 
Congressional leadership to sit down with the Administration and 
determine how the impediments to full implementation of Recommendation 
A may be overcome. If Congress and the Administration want to make a 
serious and concerted effort to contain large-fire costs, I urge you to 
strongly consider making the legal changes necessary for suppression 
cost savings to become a reality. Moreover, given the interrelated 
nature of all the recommendations, I again urge the Congress to closely 
track and review progress made by the Administration in implementing 
each of the Panel's recommendations.
    The Panel itself reconvened twice in the first half of 2006 to 
review agency progress on implementing our recommendations. Other 
panels I am familiar with are usually not inclined to reconvene of 
their own volition after completing their charge. The Panel on Fire 
Suppression Costs is and I believe it speaks to the commitment of all 
the Panel members that our work would help address this problem if the 
agencies were committed to implementing all of the recommendations we 
developed.
    Some progress has clearly been made and I urge this Committee to 
seek a status report from the agencies in that regard. Unfortunately, 
it was clear to me at the Panel's most recent meetings that the 
agencies had not yet sought Congressional assistance in fully 
implementing Recommendation A ``Leadership, Commitment and 
Accountability,'' where, I reiterate, the Panel believed there was the 
greatest opportunity for suppression cost savings.

                               CONCLUSION

    Wildland fire suppression expenditures have been increasing over 
the past two decades and have exceeded the $1 billion mark in three of 
the last six years. The states' share of spending on suppression has 
increased commensurately. These increasing costs for wildland fire 
suppression threaten to topple all the efforts of the National Fire 
Plan, 10-Year Strategy, Healthy Forests Initiative and Healthy Forests 
Restoration Act. Pervasive droughts, over-stocked forests, and an 
expanding population base will only exacerbate the societal, economic 
and natural impacts and costs of wildfire suppression.
    High suppression costs drain funding for other proactive forest 
health management efforts called for by the forest health policies and 
programs mentioned above. Austere federal budget estimates make it more 
important than ever to pursue strategic containment of suppression 
costs. With forests, as with people, preventive medicine is the most 
cost efficient approach. For example, a Colorado State University study 
put direct and indirect loses to people and the environment from 
Colorado's 2003 Hayman Fire at $230 million, or alternatively nearly $ 
1,700/acre. In contrast, fuel reduction costs range from $200-$1,500/
acre, depending on proximity to homes in the wildland-urban 
interface.\9\
---------------------------------------------------------------------------
    \9\ See, Journal of Forestry, September 2004, vol. 102, no. 6, pp. 
42-49.
---------------------------------------------------------------------------
    By using the proactive approaches called for in the 10-Year 
Strategy and its new Implementation Plan to reduce hazardous fuel, 
restore ecosystems and increase the capacity of our communities to 
assist,\10\ this nation can eventually reduce loss of life and property 
from wildfire catastrophes while lowering the tremendous suppression 
costs that are incurred.
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    \10\ See, http://www.westgov.org/wga/publicat/TYIP.pdf
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    Real savings in the suppression budget will not happen overnight. 
Only with strong and sustained leadership from the Congress and the 
Secretaries of Agriculture and the Interior can significant reductions 
in the costs of suppression of large fires be achieved. The Panel 
believes those savings are achievable if the recommendations put 
forward are fully implemented. As the Panel states, true suppression 
expenditure savings will only be achieved by focusing on strategic cost 
considerations as set forth in their recommendations, not on tactical 
cost considerations, such as the apportionment of suppression costs 
between all involved governmental jurisdictions. The recommendations 
may require certain legal changes and they most definitely require a 
change in the status quo of the agencies fire-fighting operations and 
mind set. The Panel believes the time for these changes has come. We 
hope the Congress and the Administration agree.

    The Chairman. Thank you very much.
    I will have some questions, but I will have to submit them 
in writing. I am not able to stay for a longer period. Let me 
just ask Senator Craig if he wanted to ask questions now or if 
he wants to submit his in writing as well.
    Senator Craig. I think my time is going to have to be 
treated like yours, Mr. Chairman. I will submit a couple of 
questions in writing.
    Gentlemen, thank you very much.
    The Chairman. Well, I thank these three witnesses very 
much. I think this has been a useful hearing and we have a lot 
of good recommendations to try to respond to and follow up on. 
So thank you very much and that will conclude our hearing.
    [Whereupon, at 11:38 a.m., the hearing was adjourned.]

                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    [Responses to the following questions were not received at 
the time this hearing went to press:]

            Questions for Phyllis Fong From Senator Bingaman

    Question 1. Your cost-containment report recommends that the 
agencies seek clarification of their WUI-protection responsibilities 
from Congress. But your report seems to suggest that the Federal policy 
is in fact clearit just hasn't been followed. Can you clarify whether 
the Federal Wildland Fire Policy is unclear with regard to who has 
primary responsibility to protect structures in the WUI?
    Question 2. Your cost-containment report recommends, among other 
things, that State and local governments shoulder a greater share of 
costs of suppressing fires, even when they burn entirely on Federal 
lands. Can you explain why non-Federal entities should bear costs for 
fire suppression activities on Federal land?
    Question 3. You recommended that the Committee find ways to 
encourage State and local governments to establish and enforce 
``Firewise'' protections to reduce wildfire damages and costs. Please 
comment on any steps OIG feels the Committee and Federal Government 
might consider.
    Question 4. The Western Governors' Association testimony states 
that your report failed to evaluate or consider certain reports that 
presented conclusions on fire suppression costs contrary to those of 
the OIG. Please comment on this statement; if the studies referenced in 
the WGA testimony were not considered by OIG, please provide a brief 
response to the key findings therein about why fire suppression costs 
are increasing.
                                 ______
                                 
           Questions for Robin Nazarro From Senator Bingaman

    Question 1. A number of GAO and other reports have pointed to the 
Fire Program Analysis system as an important tool for cost-containment. 
It is my understanding that the agencies are reevaluating their plans 
to complete FPA, and that has caused many observers significant 
concern. Your testimony indicates that the agencies may no longer be 
planning to complete all of FPA's key goals. Can you explain what those 
goals are and why they are important?
    Question 2. You stated that the agencies have made little progress 
in determining the quantity and type of firefighting resources they 
need. In your opinion, why is this important and what steps could the 
agencies take to improve their ability to make this determination?
    Question 3. In your statement, you reiterated your previous 
recommendation that the agencies develop a cohesive strategy to reduce 
fuels and respond to wildland fires. You further said that completing 
such a strategy is an essential step if the agencies are to contain 
costs. How would completing a cohesive strategy help the agencies 
contain costs?
    Question 4. In your statement, you said that the agencies were 
updating their cost-sharing guidance, but that it is unclear how 
agencies will ensure that guidance is followed. What are your concerns?
                                 ______
                                 
              Questions for Mark Rey From Senator Bingaman

    Question 1. Do you agree with GAO's preliminary observation that 
the effectiveness of the actions you have taken to control wildland 
fire costs may be limited because you have not defined your goals and 
strategies for achieving them? If so, what are your plans for taking 
these steps?
    Question 2. You agreed with GAO's recommendations that a cohesive 
strategy was needed for reducing fuels and responding to wildland 
fires, but you stated that you could not develop such a strategy until 
you first developed better data. It is my understanding that the Fire 
Program Analysis tool (FPA) is a key effort in obtaining this data and 
was intended to allow the agencies to ``optimize,'' or identify the 
most cost-effective mix of firefighting personnel and equipment that 
best utilize any given budget allocation. GAO testified that the 
agencies recently completed a ``midcourse review'' of FPA that resulted 
in the Wildland Fire Leadership Council endorsing design modifications 
to FPA.
          a. Under this modified version of FPA, will the agencies be 
        able to determine the optimum mix of firefighting resources for 
        a given budget level, or will it instead identify alternatives 
        that may not include the best solution?
          b. What effect will this midcourse review have on time frames 
        and funding needed to complete FPA?
    Question 3. Do you believe that significant improvements in local 
capacity and utilization for initial attack are necessary to achieve 
maximum cost-effectiveness in wildfire management operations?
    Question 4. What steps has the Federal government taken to 
encourage ``firewise'' practices? Do you believe that the Federal 
government should take additional steps to encourage ``firewise'' 
practices? If so, what?
    Question 5. Dr. Jack Cohen and others have concluded that a home's 
risk of burning in a wildfire can be most effectively and efficiently 
reduced by controlling the characteristics of the home itself and the 
landscape within a couple of hundred feet of the home. Does the 
Administration agree with Dr. Cohen's conclusions?
    Question 6. The Inspector General's Office recently recommended 
that the Forest Service, in conjunction with other Federal wildland 
fire management agencies, modify the current policies to allow wildland 
fire managers to move between suppression and Wildland Fire Use tactics 
as conditions change on an incident (see p. 18 of the Audit Report). 
The agency responded that it would modify its AMR policies to allow 
managers to employ multiple strategies concurrently and to move between 
various tactics as conditions change by April 30, 2007. It is unclear 
from the agency's response, however, whether the modifications the 
agency intends to make will include the specific change recommended by 
the Inspector General's Office. Can you clarify whether the agency 
agrees with the Inspector General's recommendation that the current 
policies should be modified to allow wildland fire managers to move 
between suppression and Wildland Fire Use tactics as conditions change 
on an incident? If so, does the agency intend to complete that 
modification by April 30, 2007?
    Question 7. Secretary Rey: virtually all of the reports we are 
discussing here today state that shortcomings in the Forest Service's 
data collection and management is a significant barrier to implementing 
cost-containment strategies. These assessments are consistent with 
dozens of reports on other matters that also point to the Forest 
Service's performance and financial management as one of the most 
serious problems facing the agency. What are you doing to address this 
problem?
    Question 8. Please provide a detailed status report on the 
implementation of each of the key recommendations in the Large Fire 
Suppression Costs Report to WFLC.
                                 ______
                                 
         Questions for Nina Rose Hatfield From Senator Bingaman

    Question 1. Many of the reports discussed at the hearing emphasize 
the importance of developing and utilizing local resources for initial 
attack as a cost-containment strategy. Do you agree that local capacity 
and utilization is an important element of a comprehensive cost-
containment strategy?
    Question 2. Your testimony indicated that two-thirds of development 
is occurring in the wildland-urban interface. How do you define the 
wildland-urban interface for purposes of that statistic? Is there a 
single definition of the wildland-urban interface that the agencies use 
for all of their programs?
    Question 3. Can you describe what positive incentives are in place 
to encourage wildland fire managers to contain wildfire costs?
    Question 4. LANDFIRE is partially implemented and is scheduled for 
completion in 2009. Given the frequency with which landscape-altering 
events have been occurring, such as wildland fires and hurricanes, what 
plans do you have for keeping the LANDFIRE data current and how much do 
you anticipate that will cost?
    Question 5. The Large Fire Suppression Costs report that Mr. 
Caswell testified about states that the agencies need to ``set policy 
and direction'' on agency land and resource management plans and 
``display the anticipated wildland fire suppression costs . . . for 
each alternative proposed, including the no-action alternative.'' Do 
you agree with that recommendation? Please explain why you agree or 
disagree, and explain whether and how the Department's agencies are 
implementing the recommendation.

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

  Statement of Casey Judd, Business Manager, on Behalf of the Federal 
                   Wildland Fire Service Association

                              INTRODUCTION

    The Federal Wildland Fire Service Association (FWFSA) is a nation-
wide employee association whose membership is primarily comprised of 
federal wildland firefighters employed by all five land-management 
agencies. Our diverse membership includes firefighters occupying all 
positions within each Agency's fire program from entry-level 
firefighters to Fire Management Officers (FMOs). This diverse 
membership provides the Association with experience and expertise 
within the wildland firefighting community unparalled in the country. 
It is because of this experience & expertise that the FWFSA believes it 
imperative for Congress to hear the voice of our Nation's federal 
wildland firefighters as it relates to the ever-increasing costs of 
wildfire suppression.

            CAUSATION OF SKYROCKETING FIRE SUPPRESSION COSTS

    With the utmost respect for those providing oral testimony before 
the Committee on January 30, 2007, the federal wildland firefighters in 
the field; those risking their lives, cutting the lines, ordering 
resources, commanding the incidents and protecting our Nation's natural 
resources as well as its citizens' lives & property believe the root 
causes of ever-increasing suppression costs have far more to do with 
Agency fire program policy than elements presented to the Committee by 
others such as weather, WUI, fuels, the number of fire starts etc.
    While the FWFSA agrees that the aforementioned elements are just 
that, elements that affect such costs, their role is over-stated by the 
Agencies with respect to the common sense causes of increasing costs. 
The elements and solutions thereto offered by the Agency and others are 
complex. Their recommendations, having been suggested year after year 
are also complex and would necessitate an extraordinary level of 
commitment, communication and cooperation with a multitude of local, 
state & federal agencies. The fact that such elements and their 
solutions are offered year after year bears this opinion out. Such 
solutions/recommendations, if plausible, would take years to exhibit 
any effect on lowering costs. Rather, firefighters believe there are a 
number of far less complex solutions to the costs of wildfire 
suppression. The simple solutions offered in this testimony to the 
increasing fire suppression costs not only benefit our firefighters but 
our Nation's taxpayers and could lead to annual savings of tens, if not 
hundreds of millions of dollars in wildfire suppression costs.

                            CAUSES & EFFECTS

    Although we expect the Agencies and other bureaucratic ``experts'' 
to suggest our observations and solutions are too simplistic, we 
believe Congress is looking to find solutions that can be achieved 
promptly providing both short & long-term corrections to the wildfire 
suppression cost problem.
    The causes & solutions offered by the firefighters doing the work; 
those that are in the field and who thus have a significantly better 
vantage point in identifying costs than those in Washington, are in 
fact simple, yet provide prompt, long-lasting relief to the problem(s) 
being addressed. However, the ideas presented in this testimony cannot 
work without the express intent & expectation of Congress for the 
Agencies to commit to a more cost-effective and cost-efficient way of 
doing business.

               AGENCY POLICIES INCREASE COSTS NEEDLESSLY

    Our testimony focuses on the policies of the Forest Service as it 
is the largest employer of federal wildland firefighters in the 
country. The following points illustrate some of the policies/actions 
of the Agency that adversely impact the cost of fire suppression and in 
fact, the overall management of the fire program.

   Historically, the Forest Service leadership fails to seek 
        sufficient funding from the Administration & Congress to fund 
        all of its projects leading to budget transfers.
   Maintaining archaic pay & personnel policies creating severe 
        recruitment & retention problems
   Over-reliance on non-federal resources
   Diversion of fire preparedness funds to pay for non-fire 
        projects
   Those making fire policy have little, if any, fire 
        experience
   Failure to staff at 100% Most Efficient Level (MEL)
   Regional Offices taking the responsibility of hiring 
        firefighters away from Forest Fire Management Officers causing 
        significant & needless delays in recruitment & promotions.
Budget Transfers
    For years, Congress has chided the Chief of the Forest Service for 
borrowing from non-fire projects to pay for fire and now, borrowing 
from fire to pay for non-fire projects. The Agency has consistently 
accepted budget proposals from the Administration and suggested to 
Congress that it (the Agency) can accomplish its goals with such funds.
    The fact of the matter is the Agency leadership has simply failed 
to submit realistic funding requests to meet all of its needs. Most 
importantly however, the FWFSA firmly believes that the funding levels 
currently appropriated & provided by Congress to the Agency for fire 
suppression & preparedness are adequate and would not need to be 
supplemented if fiscal management was a priority.
Archaic Pay & Personnel Policies
    The land management agencies, in concert with The Office of 
Personnel Management (OPM) continue to encumber our Nation's federal 
wildland firefighters with archaic pay & personnel policies. A number 
of reports from a variety of sources illustrate the severe retention & 
recruitment problems resulting from antiquated pay and benefit 
policies. Recruitment & Retention (R&R) problems have led to the 
weakening of our Nation's federal wildland firefighting force 
infrastructure and has resulted in the over-reliance by the land-
management agencies on significantly higher-priced non-federal 
firefighting resources.
Diversion of Fire Preparedness Funds
    Perhaps the most egregious action on the part of the Forest Service 
as it relates to the increasing costs of suppression has been the 
systematic diversion of fire preparedness funds to non-fire projects. 
Over the last several years, amounts in excessive of several hundred 
million dollars have been siphoned off by the Forest Service 
Headquarters (WO), Regional Offices, Forest Supervisors, District 
Rangers and other ``line officers'' from funds appropriated by Congress 
for fire preparedness. Whether such funds have been used to help 
finance the creation of the ``white elephant'' centralized human 
resources center in New Mexico, or gone to pay administrative costs, 
cost pools etc., the fact of the matter is, preparedness funds that we 
believe Congress has intended to be used for fire preparedness are not 
getting to those responsible for ensuring preparedness resources are in 
place...our forest fire management officers.
    Funds from the fire preparedness budget are designed to provide for 
the resources necessary to be properly prepared for any given fire 
season. Such resources include temporary firefighters which often 
amount to approximately 46% of fire season staffing; dozers, 
dispatchers etc.
    When Congress approved the National Fire Plan (NFP) several years 
ago, part of its spirit & intent was to focus on preparedness so as to 
reduce suppression costs. It is sound reasoning. Having sufficient fire 
preparedness resources in place during the fire season naturally 
promotes the ability of firefighters to keep fires small and 
subsequently, less costly. Having proper preparedness resources in 
place also reduces the risks to the health & safety of our firefighters 
and those they protect. Those attending the hearings on January 30 
viewed ``pie charts'' clearly showing that suppression expenditures far 
exceeded preparedness expenditures. This is simply upside down.
    Mr. Mark Rey, USDA Undersecretary for Natural Resources and the 
Environment has testified to Congress that ``while preparedness 
allocations have been reduced, suppression funding is up.'' This is a 
direct contradiction to the intent of the National Fire Plan and is 
tantamount to spending considerable sums to search for the proverbial 
horse after it has left the barn, rather than spending less to ensure 
the barn door was closed and locked in the first place.
    In fact, the Agency continues to tout its ``98% initial attack 
rate'' in its congressional testimony. Despite this testimony, no data 
can be found to support their claim. Quite candidly, a 98% IA rate is 
likely unattainable if proper preparedness resources are not in place. 
The best our firefighters can conclude from the data available is that 
the IA rate is closer to 88% or lower.
    The result of the diversion of fire preparedness funding was felt 
all over the West during the '06 season and had an enormous impact on 
the Agency's expenditure of $1.5 billion on suppression this past 
season.
    On many forests, engine companies were available for response only 
5 out of 7 days and with 3 instead of 5 personnel because preparedness 
resources were not funded and thus unavailable. In fact, early in the 
season, some engines were completely unmanned and several Hotshot crews 
were unavailable due to staffing. Fuels funding was also diverted 
resulting in less fuel reduction capability. As the season progressed, 
small fires that would have been kept small had preparedness resources 
been available needlessly grew in size, intensity and obviously cost.
    Another victim of the diversion of funds is the failure of the 
Agency to staff at 100% of the Most Efficient Level (MEL) developed as 
a result of the National Fire Plan. Given the inherent cost-
effectiveness of our federal wildland firefighters, it makes no fiscal 
sense not to be properly prepared by staffing at the Most Efficient 
Level. The failure of the Agency to fund preparedness resources because 
of the diversion of such funds has forests now staffing at ``a 
percentage of MEL.'' Obviously, anything less than 100% is not the most 
efficient level of staffing and thus provides less preparedness 
protection and increases the risk to the health & safety of 
firefighters and others.
    Often throughout the season, orders for federal resources went 
unfilled. In fact, traditional ``unable to fill'' lists received from 
various Geographic Coordination Centers (GACCs) which usually are 
several lines long, were now several pages long. Individual forests, 
recognizing the fact that federal resources were not available as they 
should have been, remained in their home forest knowing that if they 
left to help out in other areas, there would be no resources to cover 
their forest.
    Two options existed. Either wait out the arrival of federal 
resources from considerable distances away, (again allowing the fire to 
grow in size, intensity & cost) or implement what has come to be a far 
too familiar practice of calling in non-fire resources (municipal & 
State fire agencies along with contractors) which obviously 
significantly increased the cost of any given fire.
    It is our opinion that if preparedness funds had not been diverted 
and such funds had gotten to the FMOs who needed them as we believe 
Congress intended, then the number of acres burned as well as 
suppression costs would have been significantly reduced as fires would 
have been kept small and federal resources would have been available so 
as not to have to ``over'' rely on significantly higher-priced non-
federal resources.
Policy Makers With Little to no Fire Experience
    Congress should be keenly aware that those in the hierarchy of the 
Agency such as Undersecretary Rey, the Forest Service Chief, Regional 
Foresters, District Rangers and Forest Supervisors, and who have the 
power of developing and implementing fire program policies that affect 
our firefighters are woefully inexperienced in fire and possess few 
fire qualifications which would allow them to develop and implement 
fire program policies with firefighting and firefighters in mind. We 
firmly believe that Congress needs to look at the make up of those in 
the bureaucracy making such policy and seek to ensure those in policy-
making positions have sufficient fire background.
Recommendations & Solutions
    The recommendations & solutions the federal wildland firefighting 
community offers will help correct the out-of-control suppression costs 
of wildfires by amending Agency policy, strengthening our Nation's 
wildland firefighting infrastructure and ultimately saving our Nation's 
taxpayers considerable sums each year. They are simple, fundamental 
solutions to complex problems requiring a change in mind-set by the 
Agencies with regards to how they manage their fire programs.

            1. Ensure Fire Preparedness funds get to the field and are 
                    not diverted or used for any other purpose
    Common sense dictates that providing our Nation's inherently less 
costly federal wildland firefighters with the resources necessary to be 
proactive rather than reactive will provide them the best opportunity 
to keep fires small, more manageable and less costly. Given that 
Congress adopted the National Fire Plan that comes to the same 
conclusions should provide Congress with the incentive to ensure that 
such preparedness funding be spent on preparedness resources, not vague 
and nebulous peripheral sources that preclude our firefighters from 
being properly prepared.
            2. Ensure the Agency's budget request outlines all 
                    financial needs to fund all of its various projects
    To avoid future pitfalls of fund transfers, the Chief of the Forest 
Service should be compelled to provide the Administration and Congress 
with the full cost of funding all projects required by Congress. Should 
such funds not be authorized and appropriated by Congress, it should be 
Congress itself who decides which programs are ``underfunded.''
            3. Replace archaic pay & personnel policies with ``21st 
                    Century'' policies that will significantly reduce 
                    if not entirely eliminate recruitment & retention 
                    problems & ultimately save taxpayers significant 
                    sums
    A number of legislative proposals have been introduced recently in 
Congress to help strengthen the ever-weakening infrastructure of our 
Nation's federal wildland fire fighting forces. These federal 
firefighters are inherently less expensive than their municipal & state 
counterparts as well as most contract firefighting resources.
    Each year, significant taxpayer dollars are spent hiring & training 
federal wildland firefighters only to see them leave for better pay & 
benefits. If retention replaced recruitment as a priority, millions 
could be saved in training & hundreds of thousands of dollars in staff 
hours for recruitment & hiring. Additionally, making such employment 
attractive in the first place would allow recruitment to take care of 
itself.
    As an example, if the Forest Service continues to hire & train 496 
apprentices in Region 5 @ $14,000 per student just to retain 198 
employees, the Forest Service would continue to lose $4,200,000 each 
year. We believe it more cost efficient and effective to invest those 
sums in salary and other retention tools rather than to continue to 
train 3-4 people to permanently fill one vacancy.
    Such tools include but are not limited to:

   Provide portal to portal compensation for firefighters while 
        on emergency incidents exceeding 24 hours (refer to H.R. 408, 
        The Federal Wildland Firefighter Emergency Response 
        Compensation Act from the 109th Congress), the cost of which 
        would likely be less than $10 million annually . . . less if 
        preparedness resources are fully funded.
   Proper wildland firefighter classification (refer to H.R. 
        5697, The Federal Wildland Firefighter Classification Act, also 
        from the 109th Congress and passed by the House of 
        Representatives.
   Provide for hazard duty pay for prescribed wildfire burns.
   Provide eligibility to the Federal Employee Group Life 
        Insurance (FEGLI) for our Nation's temporary wildland 
        firefighters.
   Provide basic health coverage to Temporary wildland 
        firefighters.
   Permit time served as a temporary firefighter to be 
        creditable towards retirement.
   Return the hiring process of firefighters back to the 
        Forests.

    Although these recommendations may sound expensive, they are far 
less costly than maintaining the ineffective and inefficient ``status 
quo'' and actually represent a fraction of the average annual fire 
suppression budget. Adopting these recommendations strengthens the 
infrastructure of our land-management agency fire forces and thereby 
reduces the need to continue to be reliant on higher-priced non-federal 
resources. Such recommendations will stem the tide of losses and ensure 
the investment our taxpayers make in hiring and training these 
firefighters is not wasted.
    These recommendations can be paid for with existing fire program 
funding at current levels without compromising the program itself. It 
simply will literally take an act of Congress to get the land-
management agencies to change the way they do business in.

                               CONCLUSION

    We understand that our opinions and recommendations are a departure 
from what Congress normally hears from the bureaucracy. It should be 
clear to Congress however that our federal wildland firefighters have a 
vested interest in proper management, fiscal and otherwise, of the fire 
programs of our land management agencies. Clearly, we believe our 
Nation's federal wildland firefighters to be the true experts in this 
field and ask Congress for its consideration.

                         COMMENTS ON PL 107-203

    We were pleased and honored to have Senator Domenici raise the 
issue of firefighter liability as it relates to PL 107-203. With 
current criminal prosecution of a fire crew boss continuing in 
Washington State and genuine concerns among federal wildland and other 
firefighters in taking such assignments or retaining certain 
qualifications, it is imperative that the law be revisited to better 
understand Congress' intent in passing the legislation and to clearly 
define the parameters of any USDA OIG investigation and ultimately, to 
remove this cloud of potential criminal liability that has become an 
unfair advantage to our federal wildland firefighters.
    Additionally, if the Federal Government insists on carrying such a 
law on the books that places an unfair burden and disadvantage upon 
federal wildland firefighters as compared to other federal, state & 
local firefighters, it, the federal Government, should pay for the 
entire cost of Personal Liability Insurance (PLI).
    Furthermore, we believe the use of laws passed subsequently to 9/11 
with respect to charges & prosecution of those responsible for the 
death of ``federal officials'' is, in the context of their use by the 
U.S. Attorney in Spokane Washington against a fire crew boss, to be a 
gross abuse of the intent and application of such law(s). In the 
interest of judicial fairness, we believe it should be incumbent upon 
the U.S. Attorney General to instruct U.S. Attorney James McDevitt that 
the application of this law in the matter being played out in 
Washington State is at the very least, a stretch within the meaning and 
intent of the law and more likely an abuse of the use of said law.
    The seriousness of this issue and its national repercussions 
deserve a separate and distinct hearing on this matter. It should also 
be noted that while we are pleased by the concerns raised by Mr. Rey 
and the recommendations he suggested the Administration would support 
on the issue, the FWFSA offered those same concerns and recommendations 
to the Agency over 2\1/2\ years ago which, at the time, fell on deaf 
ears. The Agency's new position on this issue is clearly in response to 
the overwhelming voice of its firefighters on this issue.
    On behalf of our Nation's federal wildland firefighters, thank you 
for the opportunity to submit this statement for the record. We would 
be happy to assist the Committee and the agencies with any efforts to 
rectify the current problems facing our firefighters and the fire 
programs of the land management agencies.
                                 ______
                                 
Statement of Gerald ``Jerry'' Winkle, Chairman, Valley County Board of 
                County Commissioners, Valley County, ID

    Dear Senate Committee on Energy and Natural Resources:
    The Valley County Board of County Commissioner's (Board) submits 
for consideration the following statement regarding wildfires on 
National Forest Lands, efforts to contain the initial costs of wildfire 
suppression activities and the costs that go beyond the initial 
suppression, and the impacts of wildfire use fires (WFU).
    As you consider the costs of wildfire suppression, please, analyze 
the negative economic impacts to forest counties, and the negative 
influence of other federal actions and their cumulative effects on 
local governments. Forest counties deserve a system that works for 
them, not against them: a system that protects and improves their 
health, safety, environment, and well-being and improves the 
performance of the economy without imposing unacceptable or 
unreasonable costs on forest county taxpayers.
    The Board recognizes that there are direct and indirect costs 
associated with wildfire. The Board also recognizes that historic use 
of fire to maintain forests was acceptable. We are now out of our 
historic range of variability. The forestland have unhealthy buildup of 
fuels in the national forests and the County must look to the 
cumulative effects of wild fire use, prescribed burns, and excessive 
slash burning on the overall environment. This buildup of biomass in 
the County's national forests has several consequences, including an 
increased risk of catastrophic wildfires, diminished wildlife habitat, 
decreased water production from forested watersheds, degraded water 
quality, and certainly hampers biodiversity.
    By making modest changes in federal forestry practices the 
forestlands can be used much more efficiently to remove carbon dioxide 
from the atmosphere. This not only cleans the atmosphere but also 
increases organic matter in the soil where it is beneficial. The Board 
recognizes that the problems and effects of air pollution cross-
political boundaries and they are frequently inter and intra 
jurisdictional in nature. The Board encourages coordination and 
cooperation between the federal, states, regional, tribal, local units 
of government, public and private organizations, and concerned 
individuals.
    It is the responsibility of the Board to protect the public 
welfare, to protect scenic, aesthetic, historic, and cultural values, 
and to prevent air pollution problems that interfere with the enjoyment 
of life, health, property, or natural attractions within Valley County.
    It is the intention of the Board to prevent any areas of Valley 
County from reaching air contaminant levels that are not protective of 
human health and the environment, even if the cause is smoke from 
wildfires. The Board realizes that given the gross imbalance in private 
ownership and federally administered lands within Valley County that 
some federal policies and events have a higher contribution level to 
air pollution and may affect other environmental media.

                                RATIONAL

    The 2006 fierce wildfires will lead to even fiercer political 
battles over who is responsible for the fires, and rightfully so. Is it 
the hazardous fuel? Is it the drought? Is it a National policy that 
does not support quick response? Or is it the National Wild Fire Use 
Policy?
    The answer turns out to be ``all of the above;'' It is not our 
local Forest Service and it certainly isn't the brave men and women who 
stand on the fire line. The hazardous fuel crisis is not a myth; 
drought and fuel, is the chief culprit behind big fires in Idaho and 
elsewhere in the West.
    It is estimated that over 900,000 acres burned in Idaho this fire 
season, contributing on a national level, to this year's record setting 
wildfires of nearly 9 million acres. In some cases, quick response 
would have helped minimize the size, the negative ecological and 
economic effects of the wildland fires.
    Fire is a natural and vital component of most forest ecosystems. 
Wildland fires become a problem when they burn hotter than normally 
occurring wildland fires and/or on areas larger than normal. These 
hotter and bigger fires are now more prevalent following a century of 
human activities that have changed the ecological character of forest 
ecosystems around the country. These large-scale, high-intensity fires 
can have negative effects on forest ecosystems and local communities.
    The State of Idaho and Valley County are committed to helping 
communities deal with catastrophic wildland fires through education 
programs and funding that supports forest health restoration and post 
fire recovery for communities. Wildland fires cause several problems, 
including: soil erosion, landslides, water pollution, decreased (and 
sometimes dangerous) air quality, threats to human safety and 
structures, and loss of resources or access to resources, such as 
timber for logging and trails and waterways for recreation.
    The number of firefighters killed each year more than doubled from 
about 8 per year in the 1950s to nearly 17 per year in the 1990s. Where 
fatalities increased was in aircraft and vehicle accidents growing from 
1 to 6 per year and heart attacks growing from one-half to 5 per year. 
An aging workforce and greater use of aircraft and vehicles, and the 
lack of clean air, are responsible for increased firefighter deaths. 
This year in Valley County four (4) young souls were lost in a WFU 
helicopter crash.

                         AIR AND WATER QUALITY

    September 8, 2006 The Idaho Statesman's headlines read `` Air 
quality was 2nd worst in U.S. Thursday''.

        ``DEQ says Boise's dubious distinction is temporary. Expert 
        says healthy adults face little long-term risk. Another day of 
        stagnant weather and raging wildfires Thursday kept the 
        Treasure Valley gripped in dingy pollutant-laden air, forcing 
        the Department of Environmental Quality to issue its second 
        consecutive red alert--its third in less than one month. Boise 
        was second only to Sacramento, Calif., for having the worst air 
        quality in the country''.

    The culprit, forest fires. The EPA has warned that it's important 
to limit your exposure to smoke--especially if you may be susceptible. 
Wildfire is one of the most destructive natural forces known to 
mankind.
    Ecological problems continue once fires have stopped burning. Soil 
that was held in place by trees and other vegetation is likely to wash 
away into waterways during rainstorms or with next year's runoff. This 
surge of soil and ash into waterways can harm fish and other aquatic 
species of plants and animals as well as drinking water supplies.
    Scientists are also studying the link between forest fires and 
mercury in fish as part of a U.S. Forest Service fisheries research 
team tasks. The mercury locked up in the forest can build up for years 
in trees and plants and then suddenly be flushed into nearby waterways 
when it's released by forest fires that turn the vegetation to ash.
    Scientists with the Forest Service and other agencies are trying 
now to determine how much mercury is released by those fires. They're 
also finding interesting relationships between mercury on the land and 
mercury in the fish.
    While the data is preliminary, scientists already have made some 
observations from their two summers in the field. As expected, they 
found that mercury in fish is related to mercury levels in nearby 
soils. They also found that the more organic matter is in the soil, the 
more mercury it holds. Scientists also have used soil samples to prove 
that the mercury in the forest is coming from the sky, not from the 
bedrock below.
    Past experience has shown us that a quick response can help 
minimize the negative ecological and economic effects of wildland 
fires, including loss of jobs, soil erosion and water pollution. 
Techniques such as soil stabilization and replanting can dramatically 
reduce soil erosion and water pollution, and also can provide jobs lost 
during the fires.
    A coalition of the Forest Service, University of Minnesota and the 
U.S. Geological Survey are studing fish from 10 Superior National 
Forest lakes before and after fires. While the data is preliminary, 
scientists already have made some observations from their two summers 
in the field. As expected, they found that mercury in fish is related 
to mercury levels in nearby soils. They also found that the more 
organic matter is in the soil, the more mercury it holds. Scientists 
also have used soil samples to prove that the mercury in the forest is 
coming from the sky, not from the bedrock below.
    Trent Wickman, air resources specialist for the Superior National 
Forest has stated that there's no doubt this is airborne deposition. 
It's not coming from the rock. Scientists also have found a surprising 
relationship between lake size and mercury. The smaller the lake, the 
higher the mercury level in the fish. They are not exactly sure why but 
it's a pretty dramatic correlation so far.
    At the very least, the experiments could change the way scientists 
think about mercury pollution. Hans Friedli, an atmospheric research 
center chemist has estimated that as much as 800 tons of mercury may 
enter the atmosphere annually from burning vegetation worldwide--
ranging from wildfires to farmers clearing underbrush.
    When atmospheric mercury falls to the ground in liquid form, it is 
absorbed by leaves and needles, where it stays, at least until fires 
send it wafting into the air again. Adding thousands of fires worldwide 
to the mix of mercury sources potentially complicates scientific models 
for tracking the pollutant. Peter Hobbs, a professor of atmospheric 
science at the University of Washington noted hat if you've got 
multiple sources from fires, you've obviously got a lot more 
complicated situation.
    Burning vegetation and trees contribute to the release of carbon 
dioxide into the atmosphere directly through emissions of gases and 
aerosols from the fires and indirectly through the impact that fire 
activity has on the forest ecosystem and its ability to store carbon. 
Simply put, fires contribute to greenhouse gas emissions and there are 
impacts from fires, when they destroy trees, which soak up carbon 
dioxide. Federal Land Managers should be involved in long-term timber 
production and horticulture and utilizing incentives that are being 
introduced globally through the implementation of carbon credit 
commerce.

                             INVASIVE WEEDS

    Burned areas can contain high nutrient levels, exposed ground 
surfaces and reduced shade. These favor weed colonization and 
exponential weed growth, which can prevent reestablishment of desired 
vegetation and displace already established native plants. If permitted 
to reach large infestation levels, the resulting weed population will 
be very difficult and expensive to manage. Weeds are destroying the 
very habitat that many endangered species rely on. Preventing weeds 
from spreading through seed dispersal is the most effective and least 
costly method of weed management. Monies are needed to help fund forest 
counties weed program. Surveying burned areas to eradicate new weeds is 
essential after wildfires to prevent weed establishment. Monitoring 
should occur at least three times (spring, summer, fall) and 
concentrate where weed infestations often begin: along fire lines, 
roadways, railways and waterways. This is all expensive and the Forest 
Service must carry the burden of the cost of weed eradication that is 
expanded because of wildfire whether it's a suppression fires or WFU 
fires. Currently, there is no federal funding for restoration and weed 
eradication for WFU fires. Somehow, WFU is defined as a beneficial use 
and does not take into consideration either short-tern or long-term 
negative affect of WFU.
    The weed problem has grabbed the attention of elk and deer hunting 
organizations, ranchers who graze their livestock on public land, 
foresters, equestrian groups, homeowners, scientists (there are even 
scientists who specialize in weed research), as well as the highest 
levels of the land management agencies entrusted with the care of 
public lands.

                          FEDERAL COMMITMENTS

    It is impossible for local governments to cover the cost of 
wildfire suppression, especially in forest counties with gross 
imbalance in private ownership and federally administered lands.
    Generally, state or local governments may not tax federally 
administered lands unless they are authorized to do so by Congress. 
Since local governments are often financed by property or sales taxes, 
this inability to tax the property values or products derived from the 
federally administered lands may affect local tax bases significantly. 
Instead of authorizing taxation, historically, Congress has chosen to 
create various payment programs designed to make up for lost tax 
revenue. For forest counties the most wide-ranging payment program is 
called ``Payments in Lieu of Taxes'' or PILT, which has not been fully 
funded in decades.
    Recently, federal land managers are faced with an ever-present 
funding shortage; and forest counties across the nation are faced with 
higher property taxes if the Secure Rural Schools and Community Self 
Determination Act, Public Law 106-393, is not re-authorized and 
appropriated. The National Forest System was formed in 1905 from the 
Forest Reserves, which were established between 1891 and in 1905 by 
presidential proclamation. Many counties found 65 to 90 percent of the 
lands were sequestered into the new forest reserves, leaving little 
land for economic development and diminishing the potential tax base to 
support essential community infrastructure such as roads and schools. 
If Public Law 106-393 is reauthorized as requested this will almost 
certainly be the last time and we need a long-term solution. This 
demonstrates a much larger problem, which is funding and the impact of 
National Forest System Lands on local communities and local government.

                               ECONOMICS

    Simply put, the county's tax base, or more specifically the lack 
thereof, is inadequate to support the services required for such an 
expansive county. I think it's important to note, the county's citizens 
and taxpayers are supporting those who recreate in the area by 
maintaining roads, law enforcement, search and rescue, medical aid and 
other services, infrastructure and facilities.
    If the state and local governments are being considered as 
financial partners in fire suppression then we need to speak to the 
real need. Valley County is overwhelmingly made up of public land, 
while carefully constructing language regarding fire suppression in the 
wildland urban interface there could be language that would provide 
significant new wilderness protection for the most sensitive areas and 
a new management regime that provides for economic growth for non-
special designated National Forest System Lands, while settling a 
decades old debate on management of the public land. Like Valley County 
there is a grossly disproportionate public ownership, which causes a 
severe strain on resources.
    Forest counties need a long-term solution that would stabilize the 
federally committed payments, which help support roads and schools, and 
to provide projects that enhance forest ecosystem health and provide 
employment opportunities, and to improve cooperative relationships 
among those who use and care about the lands that the agencies manage.
    A long-term solution like this might prove to be appropriate for 
the Twenty-five Percent Fund pursuant to 16 U.S.C. Section 500 and 
stabilize payments to Idaho's forest counties, which help support roads 
and schools. This is a discussion that must take place prior to the 
discussion on wildfire suppression and who is going pay.
    The Board can appreciate the Government Accountability Office (GAO) 
examination of the issues surrounding cost sharing among Federal, 
State, and local entities. The Board recognizes the need to negotiate 
cost-sharing methods that will take into account the multitude of 
factors that occur in each incident. Last year the Board worked closely 
with all jurisdictions during an unparalleled fire season. Valley 
County declared a disaster because of wildfires, which strained county 
and state budgets. This would be the same for most forest counties and 
they need help funding the wildfire induced, additional local law 
enforcement patrols, and sentries to man road closures, evacuations, 
and road & bridge maintenance and restoration.
    The Board understands that the Secretaries have already begun 
crafting an interagency template to assist in addressing a number of 
cost sharing issues. As the departments continue to develop guidance to 
be used in negotiating cost share agreements among the Federal 
government and their various non-Federal partners. Any such template 
should not be construed to interfere with treaties and any other 
obligations to the Tribes financial and nonfinancial commitments to 
county governments (i.e. PILT and 25% Fund), and this language should 
clearly be part of any template.
    In conclusion, Wildfire is one of the most destructive natural 
forces known to mankind. There is no way that a local government can 
sustain the negative effects of wildfire on our NOW recreation-oriented 
communities. Air quality is destroyed; there is physical danger and 
services are limited.
    To mitigate the cumulative effects of wildfire Congress should 
firmly encourage timely action to repair damaged forests and to reduce 
recovery costs. In line with that encouragement the Board also believes 
that now is the time to consider the effective control of forest fires, 
and the policy of WFU in the fight against global warming.
    Congress should appropriate full funding for existing commitments 
(PILT, & 25% Funds, either by reauthorization of Public Law 106-393, 
such as Senate Bill 380 or through traditional methods) to forest 
counties and fund forest county sheriff patrols, sentries to man road 
closures, evacuations, road & bridge maintenance and restoration, along 
with weed monitoring and eradication, which resulted from WFU fires and 
suppression fires. More atmospheric studies need to be funded such a 
global warming influence from worldwide wildfires and burning, some 
statistics and projects on carbon and mercury affects on the human 
environment, and air and water quality in general. Then we can discuss 
the cost of wildfire suppression.
    The Committee's kind consideration of the Board's concerns will be 
greatly appreciated.
                                 ______
                                 
           National Association of Forest Service Retirees,
                                     January 25, 2007, Lincoln, CA.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Dirkson Office Building, Washington, DC.
Re: Hearing on Costs of Wildfire Suppression, January 30, 2007

    Dear Mr. Chairman: The National Association of Forest Service 
Retirees is an organization of people who devoted their careers to 
protecting and caring for the Nation's forest resources, particularly 
the resources of the National Forest System. We continue our interest 
and support for the statutory missions of the Forest Service. This 
letter is to let you know of our concern about the impact that the 
present system of funding wildfire suppression is having on other 
Forest Service programs.
    Background on the funding of wildfire suppression on the National 
Forests is set forth in the enclosed issue paper entitled, Funding 
Midland Firefighting. As noted in this issue paper, the budget for 
wildland fire suppression increased from 25 percent of the agency's 
budget in FY2000 to 44 percent of the budget in FY2006. As the ten-year 
average of fire suppression costs continue to rise the proportion of 
the Forest Service budget devoted to fire suppression will continue to 
increase. This shift of the available Forest Service budget to fire 
suppression is coming at the expense of other Forest Service programs, 
not only for management of the National Forest System, but also for 
Research and State and Private Forestry as well. The costs of 
suppressing major fires must be taken out of the Forest Service budget 
if other programs essential to the protection and care of our Nation's 
forest resources are to remain viable. Perhaps, funding for 
catastrophic wildfires should be through disaster funds such as those 
administered by FEMA.
    Please include the issue paper in the hearing record. We ask that 
your committee take action to revise the method of funding wildland 
fire suppression on the National Forests so that responsible management 
of the natural resources of these precious lands can be maintained. We 
would be pleased to answer any questions or to provide any further 
information the committee may desire.
            Sincerely:
                                            George Leonard,
                                         Chair, Board of Directors.
[Enclosure.]

                    Funding Wildland Firefighting *

    Throughout the fire season in recent years, the evening TV news 
regularly features stories of wildland fires. The stories tell of 
threatened homes and communities, evacuations, and feature pictures of 
homes and blackened forests that have been destroyed. It is not 
surprising then to learn that wildland firefighting costs are rising. 
What people do not recognize is that these rising costs are eroding 
other Forest Service programs--such as maintenance and operation of 
public campgrounds, keeping hiking and ski trails open, improving 
habitat for fish and wildlife, completing high priority community 
forest health projects, completing high priority research, and 
providing urgently needed assistance to States. It is vital that the 
Administration and the Congress address the issue of fire funding to 
avoid jeopardizing these essential Forest Service activities.
---------------------------------------------------------------------------
    * Note: The source of data included in this paper is the U.S. 
Forest Service.
---------------------------------------------------------------------------
                              SOME HISTORY

    For most of the post WWII period, the Congress authorized the 
Forest Service to borrow from any available funds to cover the cost of 
fighting wildfires. The money borrowed would be reimbursed through 
supplemental appropriations. The Forest Service had substantial funds 
deposited by timber purchasers to cover the cost of reforestation, 
timber stand improvement, and slash disposal on cutover areas. These 
funds were large enough to permit the borrowing for fire suppression 
without disrupting on-going activities. When the timber sale program 
was significantly reduced in the 1990's, the deposited funds became 
inadequate to cover rising costs of fire fighting. The agency was 
forced to borrow program funds from current year's appropriations 
resulting in serious disruption of on-going activities.
    In order to minimize the disruption of current programs and the 
need for supplemental appropriations, the Congress began adding funds 
for fire suppression to the Forest Service budget. The amount budgeted 
for suppression each year is equal to the rolling 10-year average cost 
of fire suppression. (See chart below.)

                            F.S. SUPPRESSION
------------------------------------------------------------------------
                                                   Obligations   10-yr.
                      Year                            $000        avg.
------------------------------------------------------------------------
1997............................................     180,183     301,475
1998............................................     245,964     327,036
1999............................................     411,546     369,206
2000............................................   1,097,862     478,993
2001............................................     689,550     526,184
2002............................................   1,267,429     607,787
2003............................................   1,023,000     680,493
2004............................................     726,000     649,956
2005............................................     660,987     683,878
2006 \1\........................................   1,300,000     768,595
2007............................................  ............   836,874
2008............................................  ............   907,157
------------------------------------------------------------------------
\1\ FY2006 obligations are estimate.

                              THE PROBLEM!

    This budget decision has had serious consequences for the Forest 
Service budget. In FY 2000 total funds appropriated for fire amounted 
to 25 percent of the agency budget. In FY 2006 total funding for fire 
has increased to 41 percent of the budget. It is projected to take 44 
percent of the budget in 2008. An overall budget increase in 2001, 
following the high cost of fire suppression in 2000, did minimize the 
impact of rising fire costs on other programs. Since then however 
constrained budget levels have resulted in an erosion of agency 
programs as the 10-year average cost of fire suppression has continued 
to rise.
    From FY2001 (the first year of the National Fire Plan) to 2006, 
funding for non-fire Forest Service programs has declined by nine 
percent, when adjusted for inflation. As noted in the table above, the 
projected 10-year average fire suppression costs are raising more than 
$50 million per year. The costs will increase even faster as the easy 
fire seasons of the late 90's are dropped and the recent high cost 
years are added to the calculation of the 10-year average. Assuming 
continued constraints on discretionary domestic spending, the current 
method of funding fire fighting costs will cannibalize all other Forest 
Service programs essential to the well-being of our Nation's forests.

                 FIRE FIGHTING COSTS MUST BE OFF-BUDGET

    It is essential that the Administration and the Congress take the 
costs of fire suppression out of the Forest Service's constrained 
budget for Research, State and Private Forestry, and the stewardship of 
our National Forests and Grasslands.
                                 ______
                                 
             Statement of Michael E. Dubrasich, Lebanon, OR

                                SUMMARY

    My name is Michael E. Dubrasich. I reside in Lebanon, Oregon. I am 
a professional consulting forester with 26 years experience in private 
practice, and am knowledgeable about and have professional expertise in 
fire cost accounting.
    Last fire season was the worst in over fifty years. Nearly 
10,000,000 acres burned in wildfires with suppression costs approaching 
$1.85 billion. The 2006 fire season was the third record-setter in six 
years. Seven of the worst ten fire seasons since the 1950's have 
occurred in the last 11 years.
    In light of our growing crisis of mega forest fires, it is 
appropriate for the U.S. Senate to examine the associated costs. Your 
efforts to uncover root causes and effective solutions are consistent 
with your responsibilities, and are deeply appreciated by this citizen. 
As an American forester, I wish to aid you in you efforts to save our 
American forests from catastrophic incineration and to reduce 
burgeoning Federal fire suppression expenditures.
    Therefore it is incumbent on me to point out to you that the USDA 
OIG Audit Report: Forest Service Large Fire Suppression Costs (Report 
No. 08601-44-SF) is seriously flawed and fiducially incompetent. The 
methodology and conclusions of the Audit are inconsistent with the 
accepted standards and fundamentals of fire cost accounting. As a 
result, the recommendations in the Audit are horrifically bad, and 
implementation will increase (catastrophically) fire acreage and fire 
suppression costs.
    The Audit fails in three important ways:

          1) The Audit fails to consider total costs per fire, and 
        instead focuses analysis on fire suppression costs per acre.
          2) The Audit fails to consider economic cost-plus-loss.
          3) The Audit fails to consider the economic utility of fire 
        suppression.

    The errors and omissions of the Audit extend to its 
recommendations, which are tremendously counter-productive. If applied, 
the recommendations in the Audit will increase fire acreage and costs 
exponentially, and could initiate a region-wide firestorm that will be 
an unprecedented national disaster.
    Proper analysis of fire suppression costs, using the standards and 
fundamentals developed over many decades of econometric study and 
practice world-wide, would lead to much different conclusions and 
recommendations. Qualified and fiducially competent analysis would lead 
to rational recommendations that could save billions of dollars, 
millions of acres, thousands of homes, and dozens of lives every year.
    Therefore it is necessary that you revisit this issue. You can save 
America from expanding fire seasons, exploding suppression costs, and 
the horrors of forest holocausts, but only if you examine the issue 
with the appropriate analytical tools. To continue on the present 
course, based on the improper Audit, will result in major national 
disasters that are otherwise completely preventable.
                      the three flaws in the audit
    The three fundamental fire cost accounting flaws in the Audit are 
technical, and require further explanation.
    Total costs per fire--The Audit focuses analysis on fire 
suppression costs per acre, not total costs per fire. This is illogical 
and incompetent in the accounting sense.. Total costs, not costs per 
acre, are the problem. A small fire may be expensive to suppress per 
acre, and megafire suppression costs may be much less per acre, but 
overall megafires cost magnitudes more money from taxpayers and the 
Federal Treasury.
    For example, the Warm Fire of 2006 (North Kaibab District, Kaibab 
National Forest), could have been suppressed when it was one acre in 
size at a cost of approximately $5,000. If that had happened, 
suppression costs would have been $5,000 per acre. Instead, the Warm 
Fire was allowed to burn as a Wildland Fire Use fire (WFU). It 
eventually reached nearly 60,000 acres in size and cost over $7 million 
to suppress. This works out to a little over $100 per acre.
    According to the defective logic of the Audit, the $7 million 
dollar price tag was preferable to the $5,000 price tag because of much 
reduced costs per acre. Yet the preferred option proved to cost an 
additional $6,995,000 total!
    You don't need to be a CPA to see the irrationality in the Audit's 
approach.
    Cost-plus-loss--Almost since the founding of the U.S. Forest 
Service in 1905, analysts have evaluated fire costs as suppression 
expenses plus the capital value of the resources destroyed. The cost of 
firefighting plus the lost value of whatever burned down is known as 
cost-plus-loss and is the standard parameter of forest fire cost 
accounting.

          During the last two decades, the U.S. Forest Service and 
        other federal fire management agencies have focused on planning 
        approaches that combined variants of the 90-year-old paradigm 
        of cost-plus-loss minimization on simple deterministic models 
        of initial attack on wildland fires (Donovan et al. 1999, 
        Lungren 1999).--From Fried, Gilless, and Spero. 2006. Analyzing 
        initial attack on wildland fires using stochastic simulation. 
        International Journal of Wildland Fire, 2006, 15, 137-146.

    Federal fire suppression expenses were nearly $2 billion in 2006, 
but I estimate losses at 48 billion board feet of merchantable timber 
with an economic value of $24 billion. Therefore total federal forest 
fire cost-plus-loss was approximately $26 billion in 2006 alone. 
(Sidenote: For comparative purposes, the entire 2006 timber harvest in 
Oregon, the largest timber-producing state, was 4 billion board feet, 
or one-twelfth of the timber destroyed by fire nationally in the same 
year.)
    That valuation does not account for the loss of habitat, wildlife, 
watershed, and esthetic values. In many locations the U.S. Congress has 
deemed that those non-commodity values exceed the timber values. 
Therefore the 2006 losses in non-commodities exceeded $24 billion, 
because those forests that were catastrophically incinerated also 
suffered huge degradation of habitat, wildlife populations, water 
quality and quantity, and attractiveness for recreation.
    Nor does that valuation include the losses incurred on private 
property in the form of tree farms, ranches, rural homes, and other 
rural private property destroyed by federal fires emanating from 
federal lands.
    Nor does that valuation include the lives of 20 forest firefighters 
lost in the line of duty last year.
    Thus the $26 billion cost-plus-loss figure underestimates the true 
losses, which were priceless and irreplaceable.
    Using the Warm Fire example, approximately 17,300 acres experienced 
the loss, on average, of $2,400 per acre in timber value. That 
represents a total loss of $41.5 million. Added to the $7 million in 
fire suppression expenses, the total cost-plus-loss of the Warm Fire 
was close to $50 million. That does not include the irreplaceable loss 
of a heritage old-growth ponderosa pine forest and the habitat it 
provided to rare and protected species such as the Kaibab squirrel.
    The Audit totally ignores cost-plus-loss and thus fails to provide 
the critical information that Congress and federal forest agencies need 
to evaluate true fire costs.
    Utility--For the last fifty years, or more, fire cost analysis has 
focused on calculations of the economic utility of fire suppression.

          Particularly significant are the contributions of: Bratten 
        (1970) on the use of nonlinear mathematical programming utility 
        maximization models under constrained resource availability; . 
        . . (Ibid).

    We fight fire to prevent fire from destroying valuable resources. 
The prevention of destruction is what is useful about firefighting. In 
every fire there is some potential destruction that could happen, so we 
seek to prevent it by controlling and extinguishing the fire.
    The potential destruction can be accounted for as probable cost-
plus-loss should firefighting fail to stop the fire. That is, should 
the fire not be contained within a given perimeter, how much bigger 
could it get and how much additional firefighting expenses and resource 
destruction would likely occur?
    The mathematical calculation of probable cost-plus-loss (if 
suppression had failed) minus the actual cost-plus-loss (assuming 
suppression was successful) represents the economic utility of 
firefighting.
    In short, the dollar usefulness of firefighting is the value of 
what was saved (plus probable expenses) minus the total sum value of 
what was lost plus actual expenses. The result of that computation is 
called the economic utility of firefighting. The general goal of 
firefighting expenditures is to maximize the utility.
    No rational discussion of fire suppression costs can happen without 
reference to the economic utility of firefighting. Maximizing utility 
is the only rational reason we spend any money on firefighting at all.
    Using the Warm Fire example, the fire could have been extinguished 
at one acre for a cost-plus-loss of $5,000 + $2,400 = $7,400. Instead 
the agency chose to let it burn for an eventual cost-plus-loss of $48.5 
million. The difference between these two figures is $48,492,600. In 
other words, the decision to Let It Burn had a negative utility of 
$48,492,600!
    The Audit completely ignores utility. It is a very dangerous 
omission. The logic of the Audit is fiducially incompetent and wrong, 
and following it will lead to steadily increasing catastrophic forest 
fire acreage and exponentially greater cost-plus-losses in the future.

           THE HORRENDOUSLY BAD RECOMMENDATIONS IN THE AUDIT

    The Audit methodology and logic is flawed. So too are the 
recommendations, which will increase, not decrease, fire acreage and 
fire costs.
    1. The Audit calls for sanctions and penalties against fire 
managers who ``overspend'' on a cost per acre basis. The Audit goes so 
far as to call for a national investigation of a USFS Forest Supervisor 
who, the Audit alleges, ran up costs of a fire to $3,000 per acre. Yet 
there is no analysis of the value of the resources, homes, communities, 
and lives saved by the actions of that Forest Supervisor.

          In another case, a regional cost-containment review was 
        conducted on a wildfire with total suppression costs of about 
        $9 million. The fire's wildland fire situation analysis (WFSA) 
        estimated suppression costs of $200 per acre. According to the 
        regional review, the fire brought a significant amount of 
        political pressure on the forest supervisor and the incident 
        commander to suppress the fire as quickly as possible due to 
        the presence of State timber, giant sequoias, and the perceived 
        threat to a number of small communities. In response to this 
        pressure, the regional forester issued a letter emphasizing the 
        need to throw ``everything but the kitchen sink'' at the fire. 
        Accordingly, the fire was fought with much more intense tactics 
        that involved larger and more aggressive use of suppression 
        resources. As a result, FS spent about $3,000 per acre to 
        contain it, or about 15 times the per acre cost estimated in 
        the WFSA.
          The regional team reviewed the IMT's decisions and concluded 
        that the high costs ``were justified.'' The team did not, 
        however, explain how or why the costs were justified, or 
        address the effectiveness of the team's tactics. Further, since 
        the regional forester's involvement in this incident impacted 
        the team's objectivity, a national review should have been 
        conducted. However, we found no evidence that it was.--From 
        USDA/OIG-A108601-44-SF, page 31.

    The positive economic utility of the Forest Supervisor's decision-
making was in the billions of dollars. The authors of the Audit wish to 
see him investigated and sanctioned for that, and to send that message 
to all fire managers in the future. Fire managers are being told that 
their efforts to reduce total fire cost, cost-plus-lost, and potential 
cost-plus-loss will not be tolerated and punishments will ensue. 
Instead, fire managers are to let fires grow as large as possible to 
minimize costs per acre of fire suppression.
    That policy will lead directly to larger fires, increased total 
fire suppression expenses, and increased resource losses. That is the 
opposite of what Congress and the Nation desire. At the root of that 
irrational policy are the fiducially incompetent methods of the Audit.
    2. The Audit calls for an increase in Wildland Fire Use fires 
(WFU's), yet WFU's have large negative utility. A WFU is a wildfire 
started by lightning, in an accidental spot, on an accidental day, 
usually in the middle of fire season. In every single case, the choice 
made to let a WFU burn has resulted in inflated fire suppression costs 
and extensive resource losses.
    The Audit claims that WFU's have resource benefits, but they do 
not. WFU's do not reduce the fire hazard; they actualize it, which 
often results in more dead fuels than were on the site before the fire. 
WFU's do not select which trees to kill, but kill old-growth and young-
growth trees indiscriminately. Beetle-caused mortality often follows 
WFU's, killing the few trees that survive the fires. Wildlife habitat 
for forest dwelling animals is often destroyed or severely damaged 
beyond recovery by WFU's.
    WFU is a new name for an old practice formerly called prescribed 
natural fire. It was a prescribed natural fire that burned over a 
million acres in Yellowstone, our flagship national park, in 1988. Let 
It Burn policies led to the Biscuit Fire of 2003 and the Tripod Fire of 
2006, among many others. Both were de facto WFU's that blew up. Both 
megafires destroyed vast tracts of forests containing T&E species 
populations and habitat.
    The Warm Fire of 2006 started out as a declared WFU, and resulted 
in $48.5 million in cost-plus-loss. The attendant loss of a heritage 
forest that had stood for millennia is incalculable. That our American 
forests are heritage cultural artifacts is well understood.

          [Of the sampled trees] . . . about 16 percent of all 
        ponderosa pine had died within a year after the fires, many 
        from secondary effects--possibly bark beetle attacks. Another 
        18 percent are dying and will probably be dead within a year or 
        two. Thus we estimate that at least 34 percent of the mature 
        ponderosa pine trees will be dead within a few years of the 
        2003 fires.
          About 42 percent of all scarred trees were dead and dying as 
        a result of the 2003 fires compared to 31 percent of the 
        unscarred trees. The fire commonly burned into old scars 
        inflicting heat damage to the cambium or consuming wood needed 
        for structural support, causing the tree to eventually fall. We 
        estimate that about half of living trees with historic bark-
        peeling scars will die within two years of the 2003 fires.
          . . . [The] bark-peeling scars [were] made when Native 
        Americans harvested the cambium for food. In the South Fork 
        valley, bark-peeling scars on living trees date back as far as 
        1665, and any accelerated mortality of these trees would 
        represent an unprecedented loss of living artifacts of a former 
        culture. [emphasis added]--From Keane, Arno, and Dickinson, 
        ``The complexity of managing fire-dependent ecosystems in 
        wilderness: relic ponderosa pine in the Bob Marshall 
        Wilderness,'' Ecological Restoration, Vol. 24, No. 2, 2006.

    Congress has never authorized WFU's, nor investigated them. The 
time for that is long overdue. The WFU Program should be suspended 
immediately and investigated by Congress to eliminate huge and 
unnecessary fire suppression costs and resource losses next summer!
    3. The Audit calls for a three-fold increase in WFU teams 
(modules). These are 7-person teams that hike out into forests in front 
of WFU's and attempt to predict fire behavior. However, the Audit makes 
no mention of the fact that a WFU team was involved in a burn-over 
event last summer where fire shelters were deployed.
    Shelter deployment is a last gasp life-saving technique used when 
all others have failed. Fire shelters do not guarantee safety, and 
often fail to save the lives of the firefighters within them. Shelter 
deployments are of critical concern to the firefighting community. Yet 
Congress may be unaware of the Little Venus Fire incident:

          Tuesday, the leader of the Unaweep Fire Use Module, Lathan 
        Johnson, made a presentation to fire managers and forest 
        administrators at the Middle Fork ICP. The presentation 
        detailed the fire shelter deployment they were involved in July 
        17 on the Little Venus Fire, Shoshone National Forest. While 
        hiking into their assignment, they were overrun by fire causing 
        the emergency deployment. They were in their protective 
        shelters over an hour until the fire passed. ``It's not easy 
        talking about this incident, but I'm hoping firefighters will 
        gain something from our experience and maybe it will help 
        others if they ever find themselves in a similar situation. 
        This is a stark reminder to all of us about the dangers we face 
        in our jobs and the importance of working together to make it 
        through difficult situations.'' (From InciWeb, National 
        Interagency Fire Center, July 24, 2006.)

          You may rest assured that if those WFU team members had died 
        in their fire shelters, that would have been the end of the WFU 
        Program right then and there.

    Now that Congress, via this testimony, has been informed of this 
incident, and you realize that the information regarding this incident 
has previously been withheld from you by the USDA and the USFS, 
Congress must undertake a full investigation of the Little Venus Fire 
WFU team fire shelter deployment. Congress and the public have a right 
to know what happened, and we must learn from the incident.
    The expansion of the WFU program called for by the Audit will 
result in firefighter fatalities some day. When that happens, those 
responsible may find themselves on trial for premeditated manslaughter. 
As you should know, this is not idle speculation. Last year Federal 
prosecutors filed manslaughter and other criminal charges against a 
former fire commander, Ellreese Daniels, the fire boss in the 2001 
Thirtymile Fire in north-central Washington that claimed the lives of 
four firefighters.
    4. The Audit recommends that the Federal Government reduce 
expenditures by forcing state agencies to bear the cost of fighting 
fires that originate on Federal property and spread to private 
property. Their excuse includes reference to the imaginary ``wildland-
urban interface'' or WUI:

          Federal agencies do not have the power to regulate WUI 
        development. Zoning and planning authority rests with State and 
        local government. Unregulated WUI development increases FS 
        wildfire suppression costs. Under the terms of current 
        protection agreements, FS and Federal taxpayers bear the 
        wildfire cost implications of development decisions made by 
        local governments about where and how structures will be built 
        in the WUI.
          The inequity of this situation is further exacerbated by the 
        fact that only a small portion of the WUI is in FS or Federal 
        ownership. (From USDA/0IG-A/08601-44-SF, page 8.)

    The diminution of rights in private property is not an equity or 
fairness owed to the Federal government by private landowners or the 
states! That statement is absurd and exactly backwards. The fires that 
start on unkempt Federal land and spread to private property are 
irresponsible spillovers perpetrated upon American citizens by their 
own government!
    The Audit seeks to blame the victims of horrendously bad Federal 
land management policies, and to harm rural residents by withholding 
firefighting funds to fight escaped fires from Federal lands. This is 
more than inequity; it is tantamount to a wholesale attack waged by the 
government upon the citizenry. No one in America, Federal Government 
included, has the right to burn down their neighbor's property, 
regardless of who owns it.
    In many western counties the Federal Government owns two-thirds or 
more of the land base. In those counties no private property is safe 
from Federal holocausts, regardless of arbitrary mapping by government 
regulators of undefined zones. Zoning is not the problem; catastrophic 
holocausts raging down on rural homes and communities from Federal land 
are.
    Please don't blame the victims. Instead, protect us from misguided 
and hazardous Federal policies and the wildfires those policies 
encourage.
    Last summer the Black Crater Fire (Sisters District, Deschutes 
National Forest) caused home evacuations 12 miles away from the 
ignition point and six miles from the U.S. Forest Service boundary. The 
USFS delayed in suppression efforts on Federal land because the fire 
was near a Wilderness Area. Then the fire blew up. Forty percent of the 
acreage that eventually burned was on private land miles away from the 
ignition point.
    During the Black Crater Fire, Leslie Weldon, Supervisor of the DNF, 
made a stunning public statement to the effect that if lightning 
ignites a fire again this coming summer, she will declare the fire a 
WFU and Let It Burn. When and if she does, the WFU will likely explode 
and require tens of millions of dollars to suppress. A Type I WIT 
(Incident Management Team) will have to be called to the Deschutes NF 
for the third time in five years!
    That level of irresponsibility coupled with in-your-face threats 
made by public servants is simply not tolerable to Oregon citizens, or 
to the citizens of any state, and Congress needs to correct this 
situation, preferably before next summer!
    5. Flirting with WFU's may lead to a regional firestorm destructive 
beyond any disaster in U.S. History. If dozens of WFU's are burning 
uncontrolled across the West during an upcoming fire season, and 
concurrently a large windstorm arises, the wind-driven embers from 
those WFU's could set the entire western United States on fire in a 
matter of hours.
    Such an event occurred in 1910 when 3 million acres burned in 36 
hours. The Great Fires of 1910 burned mainly in sparsely populated 
Idaho and Montana but still destroyed six towns and killed 78 
firefighters in a matter of hours.
    Windstorms are damaging enough to forests. When they carry fire 
they can devastate whole regions: forests, towns and all.
    The Audit recommends larger fires and more WFU's that burn for 
extended periods. That policy is an invitation to regional holocaust.
    Unless Federal fire policies are altered now, next summer could be 
the most disastrous in American history.

                              CONCLUSIONS

    The methods and conclusions of the Audit Report: Forest Service 
Large Fire Suppression Costs do not follow standard and accepted fire 
cost accounting fundamentals. As a result, the Audit recommendations 
are misguided and incredibly destructive and dangerous.
    Congress needs to reexamine fire suppression issues using qualified 
experts in the fields of forest fire economics, forest fire 
suppression, and forest management.
    A reexamination using proper methods applied by qualified experts 
will yield much improved recommendations, which if implemented could 
cut forest fire cost-plus-losses in half. That is, the economic utility 
of proper analysis could be $12 billion per year or more, not to 
mention the protection of habitat, homes, and humanity.
    The issues I raise in this testimony have magnitude and urgency. I 
beg you to give them their due consideration.
    Thank you for your service to America.
            Sincerely,
                                            Mike Dubrasich,
                                                       SOS Forests.
    P.S. I can and wish to help you to save America $12 billion, 
millions of acres of forest, thousands of homes, and dozens of lives, 
every year, now and into the future, plus avert a potential regional 
holocaust.
    Please contact me for more information. [email protected]
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