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[Senate Hearing 109-5]
[From the U.S. Government Publishing Office]

                                                          S. Hrg. 109-5

 THE SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF 2000

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

                                HEARING

                               before the

                SUBCOMMITTEE ON PUBLIC LANDS AND FORESTS

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   TO

  REVIEW THE IMPLEMENTATION OF TITLES I THROUGH III OF PUBLIC LAW 106-
 393, THE SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF 
                                  2000

                               __________

                            FEBRUARY 8, 2005

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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
20-304                      WASHINGTON : 2005
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD BURR, North Carolina,        TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               JON S. CORZINE, New Jersey
GORDON SMITH, Oregon                 KEN SALAZAR, Colorado
JIM BUNNING, Kentucky

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                Subcommittee on Public Lands and Forests

                    LARRY E. CRAIG, Idaho, Chairman
                CONRAD R. BURNS, Montana, Vice Chairman

CRAIG THOMAS, Wyoming                RON WYDEN, Oregon
JAMES M. TALENT, Missouri            DANIEL K. AKAKA, Hawaii
GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
LAMAR ALEXANDER, Tennessee           TIM JOHNSON, South Dakota
LISA MURKOWSKI, Alaska               MARY L. LANDRIEU, Louisiana
GEORGE ALLEN, Virginia               DIANNE FEINSTEIN, California
                                     MARIA CANTWELL, Washington

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                Frank Gladics, Professional Staff Member
                    Scott Miller, Democratic Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     5
Cantwell, Hon. Maria, U.S. Senator From Washington...............    21
Craig, Hon. Larry E., U.S. Senator From Idaho....................     1
Creal, Dr. Timothy, Superintendent, Custer School District, 
  Custer, SD.....................................................    25
French, James B., Trinity County Superintendent of Schools, 
  Weaverville, CA................................................    22
Griffith, Reta, Commissioner, Pocahontas County, WV..............    34
Johnson, Hon. Tim, U.S. Senator From South Dakota................     4
Krulitz, Sherry, Commissioner, Shoshone County, ID on Behalf of 
  the National Association of Counties and the Idaho Association 
  of Counties....................................................    36
Lillebo, Tim, Conservation Policy Advocate, Oregon Natural 
  Resources Council, Bend, OR....................................    29
Rey, Mark, Under Secretary, Natural Resources and Environment, 
  Department of Agriculture......................................     6
Salazar, Hon. Ken, U.S. Senator From Colorado....................    22
Shepard, Ed, Assistant Director, Renewable Resources and 
  Planning, Bureau of Land Management, Department of the Interior    10
Wehrheim, Ed, Chairman, Catron County Commission, Catron County, 
  NM.............................................................    46
Wyden, Hon. Ron, U.S. Senator From Oregon........................     2

 
 THE SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF 2000

                              ----------                              

                       TUESDAY, FEBRUARY 8, 2005

                               U.S. Senate,
          Subcommittee on Public Lands and Forests,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Larry E. 
Craig presiding.

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

    Senator Craig. Good morning, everyone. Welcome to the 
Subcommittee on Public Lands and Forests. Of course, I want to 
welcome my colleague and ranking member, Senator Wyden of 
Oregon. Senator Johnson, welcome to the committee this morning.
    I think both Senator Wyden and I view this as a very 
important oversight hearing.
    I would also like to recognize and welcome Commissioner 
Sherry Krulitz of Shoshone County, Idaho, who will be providing 
testimony this morning, along with other county officials on 
the issue of the Secure Rural Schools and Community Self-
Determination Act and the value that that law has been to the 
rural counties of many of our States.
    Because of the enactment of this law, Senator Wyden and I 
have built a reputation of working in a bipartisan manner on 
important issues before this committee. I at this point 
certainly want to thank him and his staff for their dedication 
to this issue, as we embark on the reauthorization of a law 
that has stabilized payments to rural forested counties and, 
more importantly, has brought communities together to 
accomplish projects on the ground that improve watersheds and 
enhance habitat.
    It should be remembered that the National Forest System was 
founded in 1905 from the forest reserves, which were 
established between 1891 and 1905 by Presidential proclamation. 
In many cases, 65 to 90 percent of the land in a county was 
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.
    In 1908, in response to a mounting opposition to the 
reserves in the West, Congress passed a bill which enacted a 
revenue sharing mechanism to offset for forested counties the 
effects of removing these lands from economic development. 
People in our forested counties referred to this as the 
``compact with the people of rural counties,'' which was part 
of the foundation for establishing the National Forest System.
    And from 1908 until 1993, this revenue sharing mechanism 
worked extremely well. However, from 1986 to the present, we 
have reduced our sustained active multiple-use management of 
the national forests and the revenues have declined 
precipitously. Most counties have seen a decline of 85 percent 
in actual revenues generated on our national forests and 
therefore an 85 percent reduction in the 25 percent payments to 
counties, which are used to help fund schools and county road 
departments.
    In 2000, Congress passed the Secure Rural Schools and 
Community Self-Determination Act to address the needs of the 
forested counties of America and to focus on creating a new 
cooperative partnership between citizens in forest counties and 
our Federal land management agencies to develop forest health 
improvement projects on public lands and simultaneously to 
stimulate job development and community economic stability.
    This act is a remarkable success story for rural forested 
counties. These funds have restored and sustained essential 
infrastructures, such as county schools and county roads 
through title I.
    In Idaho, resource advisory committees are partnering with 
the Forest Service and other organizations to fight the spread 
of weeds in the Nez Perce National Forest, make road 
improvements in the Hells Canyon National Recreation Area, and 
repair culverts and improve fish habitat on the Caribou-Targhee 
National Forest.
    These groups are reducing management gridlock and building 
collaborative public land decisionmaking capacity in counties 
across America. The resource advisory committees are a real and 
working compact between the Federal land management agencies 
and rural communities that include all interest groups. They 
represent a true coupling of community with land managers that 
is good not only for the land but good for the communities.
    This law, in my opinion, should be extended so that we can 
continue to benefit the forested counties, their schools, and 
continue to contribute to improving the national forest health. 
Just this last week, Senator Wyden and I introduced the 
reauthorization language.
    With that, let me turn to my colleague from Oregon, Senator 
Ron Wyden.
    Ron.

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. Well, thank you very much, Mr. Chairman. I 
think it is very appropriate for our subcommittee to be 
starting with an oversight hearing on this issue, and I want to 
thank you again for all the cooperation and effort to meet me 
certainly halfway on these kinds of key issues.
    It was not very long ago, I think the chairman knows, I had 
a significant amount of people in the environmental community 
picketing outside my office for my efforts on this. And suffice 
it to say, the chairman had a lot of people coming to him 
saying why was he not using the law to push this as a vehicle 
to drive up the cut of timber around the country.
    We said this was too important. This bill is essentially 
the lifeblood for thousands of rural communities across this 
country that are hurting. This is not some kind of ideological 
trophy for them. This is a question of whether they get the 
economic and education help to survive. A lot of these 
communities are just barely hanging in there, and if the 
Federal Government simply gives them short shrift in an area 
where Federal policy has dominated their life on a day-to-day 
basis, I am of the view, and I know Chairman Craig shares this 
view, that a lot of these communities simply will not survive. 
So this is a law that works.
    I think it would be fair to say that if this law was a 
credit card commercial it read something like this. Making 
additional investments and creating new jobs: Thousands of 
projects. Stabilization of payments to counties for roads and 
schools: Millions of dollars. Improving the lives of families 
living in forest-dependent communities nationwide: Priceless. 
Now, suffice it to say, there is more Federal----
    Senator Craig. That was rather original.
    Senator Wyden. There you are.
    [Laughter.]
    Senator Wyden. After the Super Bowl, we all have these 
commercials on our mind.
    [Laughter.]
    Senator Wyden. But suffice it to say that it is our view 
that the county payments law has produced nothing less than a 
revolution in resource-dependent communities. It is helping 
Americans in more than 40 States and more than 700 counties 
nationwide, including 32 counties in my home State of Oregon.
    This is an oversight hearing today, and we are not going to 
get into the details of the budget, per agreement of the 
chairman and me. But suffice it to say--and I want to use this 
forum as an opportunity to make the case that Chairman Craig 
and I did: We are going to need the administration's strong 
support in order to have this legislation properly funded.
    This is a different climate, colleagues, than when we 
brought together a bipartisan coalition before. When Senator 
Craig and I began our work on this issue, there was a budget 
surplus. Now there is a very significant budget deficit. There 
is going to be an effort certainly to say every program is 
going to have to tighten its belt. Absolutely. We are prepared 
to make the case that this program is a cost effective one, but 
we ought to make it clear that there is something different in 
terms of belt-tightening than strangling these rural 
communities. That is what we seek to get across in the course 
of the debates.
    Mr. Chairman, I know that we are going to have a strong 
bipartisan coalition behind this once again, and I look forward 
to working with you. I see Senator Johnson is here and he was 
supportive. The ranking minority member was very helpful as we 
worked through some of the legislation as it related to 
resource advisory committees.
    We are going to hear later today from Tim Lillebo, who is 
representing the Oregon Natural Resources Council, talking 
about the resource advisory committees. Suffice it to say, 
through those RAC's, we have people talking to each other about 
natural resources policy, who not only would not talk to each 
other in the past, they would not even show up in the same room 
together. I think that is an indication of what it takes to try 
to build consensus.
    And I look forward to working with you to get the bill 
reauthorized.
    Senator Craig. Ron, thank you very much.
    Now let me turn to our colleague from South Dakota for any 
opening comments he would like to make.
    Senator Johnson.

          STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR 
                       FROM SOUTH DAKOTA

    Senator Johnson. Thank you, Mr. Chairman, for calling 
today's hearing on the implementation of the Secure Rural 
Schools and Community Self-Determination Act of 2000. I am 
pleased to be here this morning to lend my support to the 
efforts of my colleagues, you, Mr. Chairman, and Senator Wyden. 
Senator Bingaman has made very positive contributions to 
reauthorize this important law. I have cosponsored this 
legislation and look forward to working with you to see to it 
that we pass a reauthorization before the current law expires 
next year.
    The Secure Rural Schools and Community Self-Determination 
Act has been a key tool in ensuring a partnership between the 
Federal Government and the many schools and communities that 
are home to significant tracts of national forests. Under this 
partnership, our local communities share in timber sales 
revenue that is generated on Federal property. Among others, 
this revenue sharing helps to finance projects that enhance our 
natural resources, maintain roads and infrastructure, and 
reimburse localities for search and rescue and other projects 
related to the presence of the Federal land.
    Under the Secure Rural Schools and Community Self-
Determination Act, communities in my home State of South Dakota 
received nearly $3.8 million in forest payments last year. 
Under this law, local communities were also granted a voice in 
management of Federal land located in their community by 
establishing resource advisory committees. These committees are 
comprised of a diverse group of local interested parties that 
enable communities to collaborate on how best to manage the 
public land in their own back yard.
    I am also very pleased to be here this morning to introduce 
a constituent of mine, Dr. Tim Creal. Dr. Creal is the 
superintendent of the Custer, South Dakota school District. 
Somewhere in Dr. Creal's busy duties as superintendent, he 
finds time to serve on the Federal Forest Counties Payments 
Committee. The committee was charged with making 
recommendations to Congress for finding a long-term solution to 
making payments to States and counties and to evaluate payments 
made under the current law, neither of which are easy tasks 
given the diversity of individuals and the localities involved. 
Dr. Creal was appointed to the committee in 2001, shortly after 
Congress authorized its formation. And I believe he has been 
very diligent in his duties and has done an outstanding job of 
representing South Dakota's interests on the committee.
    So, Dr. Creal, I am very happy to have you here before the 
subcommittee today. I look forward to your testimony on the 
second panel. I also look forward working with you and other 
witnesses as we move forward with reauthorization of this 
legislation.
    I regret that my schedule has me attending two other 
committee meetings simultaneous to this one, as well as three 
different groups of South Dakotans who are waiting to talk with 
me about their agenda on other matters. And so I will not be 
able to spend the entire morning here with the committee, but 
my staff is here. I look forward to reading the contributions 
of our panel members.
    Again, Mr. Chairman, thank you for calling this very timely 
hearing.
    Senator Craig. Tim, thank you very much.
    We have been joined by the ranking member of the full 
committee, Senator Bingaman, who I either call ranking member 
or chairman. I have served with him on this committee for a 
good number of years in both of those capacities. Senator, 
thank you for joining us this morning.

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

    Senator Bingaman. Thank you very much, Mr. Chairman, and 
congratulations to you and Senator Wyden for your good work on 
this legislation. I am in a similar circumstance to Senator 
Johnson. I am not able to be here for the full hearing, but I 
did want to mention one issue that I hope the witnesses can 
address related to these RAC projects.
    Under the law, as it currently exists, there is a provision 
that says that the Forest Service will include detailed 
monitoring plans that track and identify the positive and 
negative impacts of the project implementation and provides for 
validation. There have been a couple of studies, one out of 
Boise State University and another out of the Watershed 
Research and Training Center, essentially saying that these 
monitoring plans are not being developed and used as the 
legislation called for. I hope that can be addressed by the 
witnesses.
    Thank you very much for having the hearing. Again, 
congratulations for your leadership on this legislation.
    Senator Craig. Jeff, thank you very much.
    Now we will turn to our first panel. Our first panel is 
made up of Mark Rey, Under Secretary of Resources and the 
Environment, Department of Agriculture; and Ed Shepard, 
Assistant Director, Renewable Resources and Planning, Bureau of 
Land Management, Department of the Interior.
    Certainly Mark knows and I think that both Ron and I share 
the belief that the work we did in behalf of this legislation 
and now law was a precursor to Healthy Forests and a 
relationship here on the Hill that allowed us to move another 
piece of legislation that we think is very, very significant in 
the lexicon of tools that you have to work with in managing our 
public lands and especially our forests.
    So, with that, gentlemen, welcome before the committee. 
Mark, if you would please proceed.

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

    Mr. Rey. Thank you, Mr. Chairman and members of the 
subcommittee, for giving me the opportunity to share the 
experience of the Department of Agriculture implementing titles 
I through III of the Secure Rural Schools and Community Self-
Determination Act.
    On October 30, 2000, that legislation was signed into law, 
in part to offset the effect of decreased revenues available to 
States from declining timber harvests on Federal lands. This 
act authorized an alternative to a receipts-based payment.
    Generally the act embraced three objectives: first, to 
establish a stable payment for schools and roads that 
supplements other available funds; second, to make additional 
investments in public and adjacent private lands; and third, to 
improve the cooperative relationships among the people who use 
and care for Federal lands and the agencies who manage them. I 
think it is fair to say that the implementation of the act to 
date has achieved each of those three objectives.
    Title I of the legislation determines a stable full payment 
amount for eligible States to benefit public education and 
transportation. Of the 717 counties in 41 States that were 
eligible for their share of the State's amount under the act, 
550, or 77 percent, initially decided to accept that payment in 
fiscal year 2001. In fiscal year 2003, the counties were given 
another opportunity to receive their share of a State's full 
payment amount. 65 additional counties chose to take that 
payment, bringing the total to 615 counties, or 86 percent of 
the eligible counties.
    Counties receiving their share of a State's full payment 
amount are found in 39 of the 41 States that are eligible for 
funding. The majority of these counties are located in the 
Western or Southern portions of the country, while those that 
have remained under the 25 percent fund are primarily in the 
Great Lakes area.
    Payments from national forests authorized by the act have 
totaled $1.2 billion and average over $301 million each year 
since the act was implemented.
    Funding derived from the Treasury has provided 
participating counties not only more stable funding but also 
significantly higher payments than would have been the case 
under the 25 percent fund. For example, if payments were based 
on 25 percent of receipts in fiscal year 2004, the total 
payment to all States would have been $71.4 million, based upon 
total national forest receipts that contribute to payments 
under the act of $285.5 million. By comparison, the full 
payment amount for all States for fiscal year 2005 is $395.7 
million.
    Title I requires counties to receive a share of the State's 
full payment amount of $100,000 or more to set aside 15 to 20 
percent of the payment for projects under titles II or III, or 
both. Under title II, funds may be used for a variety of 
projects on or near Federal lands.
    Title II also directs the establishment of 15-person 
resource advisory committees, comprised of a balanced 
representation of stakeholder groups, to recommend projects on 
National Forest System lands and BLM lands affected using State 
allocated title II funds.
    To date, the Forest Service has established 56 resource 
advisory committees under the act. The committees operate at 
the community level and are found in 13 of the eligible States. 
The committees have recommended and the Forest Service has 
approved over 1,800 resource projects on or near Federal lands, 
with an investment value of over $100 million.
    Interviews with committee members, county officials, and 
Forest Service officials conducted under a study by Boise State 
University suggest that cooperative relationships between the 
national forests and their surrounding communities are 
improving. All groups interviewed noted increased cooperation 
among the various groups that use, care for, and manage Federal 
lands.
    Title III authorizes counties to use funds allocated under 
title I for title III projects for certain specific purposes: 
search, rescue, and emergency services on Federal lands; 
community service work camps; conservation and recreation 
easements; forestry related after-school activities; and fire 
prevention and planning. Unlike title II funds, which are used 
for carry out projects proposed by resource advisory 
committees, counties decide how to use title III funds. Many 
counties have used these funds to establish Fire Safe councils 
and for other community fire planning activities, particularly 
in the aftermath of the passage of the Healthy Forests 
Restoration Act.
    When we examine what is working best with Public Law 106-
393, I would have to go back to comments made by resource 
advisory committee members who said that the law encourages 
relationship building, discourse on public policy issues, and a 
dialog among groups through the interaction found in the 
resource advisory committees. Additionally, approximately $88 
million in title II projects and $94 million in title III 
projects have been used on National Forest System lands during 
the act's first 3 years. These projects have had a significant 
impact on improving natural resource conditions on national 
forest and grasslands.
    Mr. Chairman, that concludes my statement. I would be happy 
to answer any questions you have at the appropriate time.
    [The prepared statement of Mr. Rey follows:]

Prepared Statement of Mark Rey, Under Secretary, Natural Resources and 
                 Environment, Department of Agriculture

    Mr. Chairman and Members of the Subcommittee, thank you for giving 
me the opportunity to present the views of the U.S. Department of 
Agriculture regarding the implementation of Titles I through III of 
P.L. 106-393, the Secure Rural Schools and Community Self-Determination 
Act of 2000.
    Since enactment of the law known as the 25 Percent Fund Act (16 
U.S.C. sec. 500) in 1908, the Forest Service has distributed 25% of the 
gross receipts derived from the sale or use of commodities on each 
national forest to the state in which each national forest is located.
    Beginning in the late 1980s, timber sale receipts, the primary 
funding source for the 25 Percent Fund Act, began a precipitous 
decline, which continued and then stabilized at a much lower level in 
the 1990's. The decline in receipts impacted rural communities in the 
West, particularly communities in Washington, Oregon, northern 
California, and Idaho. For example, FY 1998 national forest revenues 
were $557 million, only 36% of the FY 1989 peak revenues of $1.531 
billion. In FY2004, national forest revenues were $281.1 million. 
Payments to many states under the Twenty-five Percent Fund Act declined 
by an average of 70 percent from 1986 through 1998.
    On October 30, 2000, P.L. 106-393 was signed into law in part to 
offset the effect of decreased revenues available to states from 
declining timber harvests on Federal lands. This Act authorized an 
alternative to a receipts based payment.
    The Act embraced three objectives: 1) to establish a stable payment 
for schools and roads that supplements other available funds; 2) to 
make additional investments in public and adjacent private lands; and 
3) to improve the cooperative relationships among the people who use 
and care for federal lands, and the agencies who manage them.
    This statute provided annual payments to states for fiscal years 
2001-2006. An eligible county had the option of electing to receive its 
share of the states 25-percent payment or its share of the average of 
the state's three highest 25-percent payments from fiscal years 1986 
through 1999.

  TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL 
                                 LANDS

    Title I of P.L. 106-393 determines a stable full payment amount for 
eligible states to benefit public education and transportation. Of the 
717 counties in 41 states that were eligible for their share of the 
state's amount under the Act, 550 or 77% initially decided to accept 
that payment in FY 2001. In FY 2003 the counties were given another 
opportunity to receive their share of a state's full payment amount, 65 
additional counties chose to take that payment, bringing the total to 
615 counties, or 86% of the eligible counties.
    Counties receiving their share of a state's full payment amount are 
found in 39 of the 41 states that are eligible for funding. The 
majority of these counties are located in the western and southern 
portions of the country, while those that have remained under the 25 
Percent Fund Act are primarily in the Great Lakes area. Timber sale 
receipts for states in the Great Lakes area have resulted in 25 Percent 
Fund payments that tend to be higher than the full payment amounts for 
these states. Thus, it makes more economic sense for the counties in 
these states to continue receiving the 25 Percent payments.
    Payments from National Forests authorized by P.L. 106-393 have 
totaled $1.2 billion and average over $301 million each year since the 
Act was implemented. Payments have varied by region of the country. For 
example, the FY 2004 payments distribution included approximately, $37 
million to southern states, $14 million to the northeast and Midwest 
states, $273 million to Oregon, Washington and California and $71 
million to the other western states.
    Funding derived from the Treasury has provided participating 
counties not only more stable funding but also significantly higher 
payments than would have been the case under the 25 Percent Fund. For 
example, if payments were based on 25 percent of receipts in FY 2004, 
the total payment to all states would be $71.4 million based on total 
National Forest receipts that contribute to payments under P.L. 106-393 
of $285.5 million. In comparison, the full payment amount for all 
states for FY 2005 is $395.7 million.

              TITLE II--SPECIAL PROJECTS ON FEDERAL LANDS

    Title I requires counties that receive a share of the state's full 
payment amount of $100,000 or more to set aside 15 to 20 percent of the 
payment for projects under Titles II or III, or both. Under title II, 
funds may be used for a variety of projects on, or near, federal lands.
    Title II also directs the establishment of 15-person resource 
advisory committees (RAC's) comprised of a balanced representation of 
stakeholder groups, to recommend projects on National Forests System 
lands and O&C lands using state allocated Title II funds. Under the 
law, RAC's may submit proposals to combine Title II funds with other 
funds to complete projects. The role of a RAC is to solicit, review, 
and recommend resource improvement projects to the designated federal 
official. The RAC structure included in P.L. 106-393 was the first 
attempt to create direct community involvement in recommending on-the-
ground projects on the National Forests on a system-wide basis.
    To date we have established 56 RAC's under the Act. RAC's operate 
at the community level and are found in 13 of the eligible states. 
RAC's have recommended, and the Forest Service has approved, over 1800 
resource projects on, or near, Federal lands, an investment of over 
$100 million.
    RAC's have recommended a variety of projects including those in 
Lane County, Oregon where Title II funds, along with Title III funds, 
are supporting the Lane County Forest Work Camp for at-risk youth. The 
camp teaches important life skills while providing a skilled workforce 
for forest restoration projects in the area. In Montana, the Ravalli 
County RAC, Bitterroot NF, landowners in the Sweeney Creek Cooperative 
Weed Management Area, Ravalli County, and the State of Montana are 
working together to eradicate dalmation toadflax and other invasive 
weeds on state, private and public lands near Sweeney Creek. The 
project will treat 5 miles of stream corridor to protect the long-term 
ecosystem health of the Bitterroot valley. In southwest Idaho the local 
community and the Forest Service are working together to improve forest 
health by reducing hazardous fuels around a church camp near Warm Lake, 
Idaho. The Rainey Creek Community Restoration project, also in Idaho, 
is exploring ways to reconnect Rainey Creek to the main stem of the 
South Fork Snake River. This project on private land will greatly 
enhance fish habitat and improve watershed condition and is a good 
example of the leveraging effect of Title II funds. The Title II 
investment in this project is $10,000 with $360,000 provided by other 
sources.
    BLM RAC's in Oregon are also putting Title II funds to good use. In 
2004 the Eugene District RAC recommended 12 projects in Douglas, Linn, 
and Lane counties that treated invasive weeds, provided forest jobs for 
at-risk youth, improved fish habitat, and restored watersheds.
    Interviews with RAC members, county officials, and Forest Service 
officials conducted under a study by Boise State University, suggest 
that cooperative relationships between the National Forests and their 
surrounding communities are improving. All groups interviewed noted 
increased cooperation among the various groups that use, care for, and 
manage Federal lands. A Forest Supervisor noted the importance of 
relationship building with RAC's. He stated, ``RAC's were a formal 
opportunity to get together. The whole process is about building 
relationships. Before, we would only meet with the county when there 
was a problem. Now, the meetings are about positive things.''
    Some evidence suggests that relationship building may be stronger 
in small or medium sized RAC's as compared to large sized RAC's because 
greater effort must go in to securing additional funds to finance 
desirable projects. Comments indicate that RAC's are effective, in 
part, because they are focused on evaluating and funding projects for 
the good of the community as a whole.

                       TITLE III--COUNTY PROJECTS

    Title III authorizes counties to use funds allocated under Title I 
for Title III projects for certain specific purposes: search, rescue, 
and emergency services on federal lands; community service work camps; 
conservation and recreation easements; forestry related after-school 
activities, and fire prevention and planning. Unlike Title II funds 
which are used to carry out projects proposed by RAC's, counties decide 
how to use Title III funds. Many counties have used these funds to 
establish Fire Safe councils and for other community fire planning 
activities. Other counties are investing in community programs. The 
Boise State study asked county officials who had elected only Title III 
funding, why their particular county decided to allocate funds for 
Title III instead of Title II. Those interviewed said in some way or 
another that the needs of their community were better met through the 
avenues presented by Title III funding. Counties have used Title III 
funds primarily for fire suppression and prevention, emergency 
services, or a combination of the two (though funding amounts for 
emergency services were usually higher). Some counties with limited 
funds allocated for Title II discussed the amount of time and work 
involved in forming a RAC.
    When we examine what is working the best with P.L. 106-393, I would 
have to go back to comments made by RAC members who said that the law 
encourages relationship building, discourse on public policy issues, 
and a dialogue between groups through the interaction found in RAC's. 
Additionally, approximately $88 million in Title II projects and $94 
million in Title III projects have been used on National Forest System 
lands during the Act's first three years. These projects have had a 
significant impact on improving natural resource conditions on National 
Forests and Grasslands. County officials that have placed funds into 
Title II must feel that the funds are being spent effectively because 
they continue to allocate additional funding increments into RAC's, 
thus increasing the investment to Federal lands.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you may have for me at this time.

    Senator Craig. Mark, thank you very much.
    Now, Ed, if you would proceed please.

         STATEMENT OF ED SHEPARD, ASSISTANT DIRECTOR, 
 RENEWABLE RESOURCES AND PLANNING, BUREAU OF LAND MANAGEMENT, 
                   DEPARTMENT OF THE INTERIOR

    Mr. Shepard. Thank you, Mr. Chairman and members of the 
subcommittee for the opportunity to participate in today's 
hearing on the Secure Rural Schools and Community Self-
Determination Act of 2000. I am the Assistant Director for 
Renewable Resources and Planning at the Bureau of Land 
Management, and for much of my professional career, I have 
worked extensively on O&C issues and the management of forest 
resources. Prior to my current position, I was BLM's Oregon 
Deputy State Director for Resources and previously had been 
District Manager in BLM's Coos Bay District. I am also the BLM 
Director's representative on the Forest Counties Payment 
Committee, a congressional advisory committee.
    Although BLM lands are comprised mostly of rangeland, the 
agency manages over 55 million acres of forests and woodlands, 
some 2.5 million acres of which are located in the 18 western 
Oregon counties covered by the O&C Act of 1937. Of the public 
lands managed by the BLM, the Secure Rural Schools and 
Community Self-Determination Act applies exclusively to the 18 
O&C counties in western Oregon.
    Congress set the stage for the long and close association 
between the BLM and the O&C counties when, in the O&C Act, it 
directed the Department of the Interior to manage the O&C lands 
for the purpose of providing a permanent source of timber 
supply, protecting watersheds, regulating stream flow, and 
contributing to the economic stability of local communities and 
industries, and providing recreational facilities. The O&C 
counties receive approximately 50 percent of the receipts from 
timber harvested from public lands in those 18 counties.
    Until the late 1980's, intensive harvest of timber from the 
public lands in the O&C counties annually yielded over 1 
billion board feet on a sustained yield basis and brought in 
receipts of over $200 million. As provided in the O&C Act, 50 
percent of that amount was returned to the counties to fund 
local government services such as roads, schools, law 
enforcement, and public safety. For example, in fiscal year 
1989, total payments to the O&C counties, based upon the volume 
of timber harvested off the public lands in the counties, 
amounted to nearly $111 million.
    Litigation in the late 1980's and early 1990's regarding 
the northern spotted owl and other issues resulted in steep 
reductions in timber harvest in the Pacific Northwest and 
correspondingly steep reductions in income to counties that 
depended on revenues from timber harvest on public lands to 
fund essential local government services. In the years between 
1989 and 1993, income to O&C counties from timber harvest 
dropped by nearly 37 percent, to approximately $79 million.
    To stabilize the income flow to the timber-dependent 
counties, Congress enacted the safety net payments through the 
Omnibus Reconciliation Act in 1993.
    In 2000, Congress repealed the safety net payments and 
enacted the Secure Rural Schools and Community Self-
Determination Act to set a stable level of payments to the 
counties. The Act provide the O&C counties with the option of 
receiving a full payment amount equal to the average of the 
three highest timbers years, 1986 through 1999. In the interest 
of time, I will not go through all of the process, title I 
through title III. Mark has covered that. But I will add that 
all 18 counties in western Oregon participate in this, and to 
date they have received under title I and title III over $412 
million, and BLM has retained over $33 million to be used in 
conjunction with other funds and for the resource advisory 
committees for title II restoration projects. As you know, this 
Act expires on September 30, 2006.
    This Act sets in place a structure for cooperative working 
relationships among the people who use and care about public 
lands and the Federal agencies responsible for managing these 
lands. Through the RAC's, community members from varying 
interests and various backgrounds work together to approve 
projects for the restoration of public lands or for projects on 
private lands that enhance the restoration of public lands.
    In December 2001, the Secretary of the Interior authorized 
the establishment of committees for the five BLM administrative 
districts in western Oregon. The term for these committee 
members has expired, and we are currently in the process of 
renewing or refilling these positions.
    The BLM's western Oregon committees have recommended 
approval of projects such as one in Clackamas County in BLM's 
Salem District involving an aggressive approach to prevent and 
clean up illegal dumping through a partnership among two timber 
companies, the Oregon Department of Forestry, and Clackamas 
County. In addition to the funds authorized by title II of the 
Act, each of these parties has contributed either matching 
funds, direct donations, or in-kind labor. The initial goal was 
to reduce the incidence of illegal dumping through public 
education of environmental impacts, proper disposal, and the 
consequences that can result from such illegal, indiscriminate 
acts. These partners also worked collaboratively to clean up 
and properly dispose of illegally dumped waste materials and to 
enforce violation of local and State illegal dumping laws.
    In Douglas County, within the Roseburg District, the 
Northwest Youth Corps has completed a variety of projects, 
including forest stand improvement, noxious weed eradication, 
habitat improvement, trail maintenance, recreation-site 
maintenance, and fence construction. The Northwest Youth Corps 
established an educational curriculum called Something 
Educational Every Day, or SEED, which introduces Northwest 
Youth Corps members to a wide variety of topics related to 
resource management and wildlife conservation. Recent 
educational sessions have centered on fire ecology, forest and 
stream ecology, native species protection, and timber 
harvesting methods.
    Fish passage is another significant issue in western 
Oregon. Again, another project from the Roseburg District, 
working with the RAC's, they have identified this as one of 
their major problems in the area and have provided title II 
funding every year since 2002. To date, they have completed 16 
projects and opened up 50 miles of stream for salmon habitat. 
In this process, they also have kept open access roads, 
assuring access for recreation, timber harvest, fire 
suppression, and other activities.
    As of last fall, the committees have reviewed over 700 
title II projects, approved 465, at a funding level of $33 
million.
    The success of the resource advisory committee process in 
developing community-based solutions is encouraging the O&C 
counties to consider using funds available under this act to 
help local communities develop protection plans in the event of 
catastrophic wildfire. The Healthy Forests Restoration Act 
encourages communities to work with Federal agencies to develop 
community wildfire protection plans. It is our understanding 
that several O&C counties have used title III funds to begin 
the fuels assessment and data collection for the community 
wildfire protection plans and have recommended title II funding 
for on-the-ground projects to implement these plans. This is an 
innovative way of tying the authorities of the HFRA and the 
Secure Rural Schools Act together.
    The authorities of this Act have benefited BLM through the 
on-the-ground accomplishments, including wildfire hazard 
reduction, but it has also served as a catalyst to bring the 
folks together from really diverse backgrounds and opinions 
with a shared vision for the management of public lands, and in 
that way, it has been an outstanding success.
    Thank you again for the opportunity to discuss this Act, 
and I will be glad to answer any questions.
    [The prepared statement of Mr. Shepard follows:]

    Prepared Statement of Ed Shepard, Assistant Director, Renewable 
 Resources and Planning, Bureau of Land Management, Department of the 
                                Interior

    Thank you for the opportunity to participate in today's hearing on 
the Secure Rural Schools and Community Self-Determination Act (Act) of 
2000 (P.L.106-393). My name is Ed Shepard and I am the Assistant 
Director for Renewable Resources and Planning at the Bureau of Land 
Management (BLM). For much of my professional career, I have worked 
extensively on O&C issues and the management of forest resources. Prior 
to my current position, I was BLM's Oregon Deputy State Director for 
Resources and previously had been District Manager in the BLM's Coos 
Bay (Oregon) District. I am the BLM Director's representative on the 
Forest Counties Payment Committee, a Congressional Advisory Committee.
    Although rangelands comprise much of the land administered by the 
Bureau of Land Management (BLM), the agency also manages 55 million 
acres of forests and woodlands on the public lands, some 2.5 million of 
which are located in the 18 western Oregon counties covered by the 
``O&C Act'' (Revested Oregon and California Railroad and Reconveyed 
Coos Bay Wagon Road Grant Lands Act of 1937.)
    Of the public lands managed by the BLM, the Secure Rural Schools 
Act applies exclusively to the 18 O&C counties in western Oregon.

                               BACKGROUND

    Congress set the stage for the long and close association between 
the BLM and the O&C counties when, in the O&C Act, it directed the 
Department of the Interior to manage the O&C lands for ``the purpose of 
providing a permanent source of timber supply, protecting watersheds, 
regulating stream flow, and contributing to the economic stability of 
local communities and industries, and providing recreational 
facilities.'' The O&C counties receive approximately 50 percent of the 
receipts from timber harvested from public lands in the counties.
    By the late 1980's, intensive harvest of timber from the public 
lands in the O&C counties annually yielded over one billion board feet 
and brought in receipts of over $200 million. As provided in the O&C 
Act, approximately 50 percent of that amount was returned to the 
counties to fund local government services such as roads, schools, law 
enforcement, and public safety. For example, in Fiscal Year 1989, at 
the height of timber production from O&C lands, total payments to the 
O&C counties, based on the volume of timber harvested off the public 
lands in the counties, amounted to $110,891,232.
    Litigation in the 1980's and early 1990's regarding the northern 
spotted owl resulted in steep reductions in timber harvests in the 
Pacific Northwest, and correspondingly steep reductions in income to 
counties that depended on revenues from timber harvests on public lands 
to fund essential local government services. In the years between 1989 
and 1993, income to O&C counties from timber harvests dropped by nearly 
30 percent, to approximately $79 million.
    Congress enacted ``safety net payments'' to stabilize income flow 
to timber-dependent counties during this tumultuous period, through the 
Omnibus Budget Reconciliation Act of 1993 (P.L.103-66).
    In 2000, Congress repealed the ``safety net payments'' and enacted 
the Secure Rural Schools Act to set a stable level of payments to 
counties. The Act provided the O&C counties with the option of 
receiving a full payment amount equal to the average of their three 
highest timber receipt years from 1986 through 1999. In addition, under 
the Act the counties elect the percentage of the payment (80-85 
percent) to be distributed directly to the counties (Title I), and the 
remaining percentage (15-20 percent) to be allocated between Title II 
projects (administered by the BLM), Title III projects (administered by 
the counties), or returned to the Treasury.
    Under Title II of the Act, funds are used to support cooperative 
projects, under the guidance of Resource Advisory Committees 
(Committees), to restore healthy conditions on public lands or on 
private lands for the benefit of public land resources. Such projects 
include wildfire hazard reduction, stream and watershed restoration, 
forest road maintenance, and road decommissioning or obliteration, 
control of noxious weeds, and improvement of fish and wildlife habitat. 
Under Title III of the Act, counties may funds for emergency services, 
community service work camps, purchase of easements for recreation or 
conservation, forest related after-school programs, and fire prevention 
activities. The total paid to date directly to the 18 O&C counties 
under the Act (Titles I and III) is $412,069,610. In addition, to date 
the BLM has retained $33,391,672 million to be used in conjunction with 
Resource Advisory Committees for Title II restoration projects on 
public lands or for projects on private lands that enhance public 
lands. The Act expires on September 30, 2006.

          RESOURCE ADVISORY COMMITTEES AND COOPERATIVE EFFORTS

    The Act set in place a structure for cooperative working 
relationships among the people who use and care about public lands and 
the federal agencies responsible for managing these lands. Through 
Resource Advisory Committees (Committee), community members including 
counties, State and local governments, watershed councils, individuals, 
private and non-profit entities, and landowners work closely with 
federal agencies to develop and approve projects for the restoration of 
public lands, or for projects on private lands that enhance the 
restoration of public lands.
    Under the authority of the Act, on December 4, 2001, the Secretary 
of the Interior authorized the establishment of Committees for the five 
BLM administrative districts in western Oregon (Coos Bay, Eugene, 
Medford, Roseburg, and Salem) which cover the 18 O&C counties. Each of 
the five Committees has 15 members and six alternates representing the 
many counties and varied stakeholder groups in the O&C counties. Terms 
for Committee members appointed in December 2001 have just expired, and 
we are currently in the process of renewing or refilling those 
positions.
    The BLM's western Oregon Committees have recommended approval of 
projects for road and trail maintenance, soil productivity improvement, 
fuels reduction, watershed restoration, fish habitat improvements, and 
noxious weed eradication. Through these Title II projects, the O&C 
counties are making an investment in activities to improve the health 
of the O&C lands. In some cases, for example, noxious weed eradication 
in Douglas County, intensive early intervention to avert further spread 
of the noxious weed would not have been possible without the Title II 
funding.
    Examples of collaborative projects approved by the western Oregon 
Committees include the following.

   A project in Clackamas County (BLM's Salem District) 
        involves an aggressive approach to prevent and clean up illegal 
        dumping through a partnership among the Longview Fibre Timber 
        Company, the Oregon Department of Forestry, Clackamas County, 
        and Port Blakely Timber Company. In addition to the funds 
        authorized by Title II of the Act, each party either 
        contributed matching funds, direct donations, or in-kind labor. 
        The initial goal of the project was to reduce the incidence of 
        illegal dumping by 50 percent through public education of 
        environmental impacts, proper disposal, and the consequences 
        that can result from such illegal indiscriminate acts. These 
        partners also worked collaboratively to clean up and properly 
        dispose of illegally dumped waste materials, and to enforce 
        violations of local state and federal illegal dumping laws.
   In Douglas County, a project involving the Northwest Youth 
        Corps (coordinated with Roseburg BLM District personnel) has 
        completed a variety of projects, including forest stand 
        improvement, noxious weed eradication, habitat improvement, 
        trail maintenance, recreation site maintenance, and fence 
        construction. The Northwest Youth Corps established an 
        education curriculum called ``Something Educational Every Day'' 
        (SEED), which introduces Northwest Youth Corps members to a 
        wide variety of topics related to natural resource management 
        and wildlife conservation. Recent educational sessions have 
        centered on fire ecology, forest and stream ecology, native 
        species protection, nature observations, and timber harvesting 
        methods.
   Working across land ownership boundaries, a project to 
        eradicate the ``Portuguese Bloom'' noxious weed in Douglas 
        County (BLM's Roseburg District) was approved three years in a 
        row for Title II funding. This noxious weed was discovered in 
        Douglas County in 1999, and the BLM's partners in the project--
        various private landowners, the Oregon Department of 
        Agriculture, the Douglas Soil and Water Conservation District--
        intend to eradicate it while it is still fairly localized (at 
        7,000 acres). Control efforts became much more comprehensive 
        with the availability of Title II funds. Intensive early 
        activities to inventory the area and develop a comprehensive 
        treatment plan would not have been possible without the Title 
        II funding.
   Fish passage is a significant issue on public lands and 
        surrounding private lands in the BLM's Roseburg District 
        (Douglas County). The Committee has identified this problem as 
        one of its priorities, and approved Title II funding for fish 
        passage restoration each year since FY 2002. Sixteen culvert 
        replacement projects already have been completed, improving not 
        only fish habitat (these projects will open access to over 50 
        miles of streams for both juvenile and adult fish) but also 
        road quality, assuring that roads needed for recreation, timber 
        harvest, fire suppression, and other activities will be 
        reliable.

    As of November 15, 2004, the BLM's western Oregon Resource Advisory 
Committees have reviewed approximately 707 proposed Title II projects. 
Of these, the Committees recommended approval of 465 Title II projects 
at an estimated funding level of $33 million; to date, 61 projects have 
been completed.
    In addition, the success of the Committee process in developing 
community-based solutions is encouraging the O&C counties to consider 
using funds available under the Act to help local communities develop 
protection plans in the event of catastrophic wildfire. For example, 
the Healthy Forests Restoration Act (P.L.108-148) encourages 
communities to work with federal agencies to develop Community Wildfire 
Prevention Plans (CWPP). It is our understanding that several O&C 
counties have used Title III funds to begin the fuels assessments and/
or data collection (GIS) for the Community Wildfire Protection Plans, 
and have recommended Title II funding for on-the-ground projects to 
implement the CWPPs.
    The authorities of the Secure Rural Schools Act have enabled the 
BLM to accomplish on-the-ground improvements in land and resource 
conditions, including wildfire hazard reduction. The Resource Advisory 
Committee process has served as a catalyst to bring together diverse 
groups and individuals with the shared goal of improving the condition 
of our public lands. In projects selected through collaborative 
decision-making, the BLM has worked in partnership with corporations, 
state and local governments, and stakeholders to improve the condition 
of the O&C lands and support the development of community-based 
strategies to protect these communities from catastrophic wildfire.
    Thank you again for the opportunity to discuss the BLM's 
implementation of the Secure Rural Schools Act. I will be glad to 
answer any question you may have.

    Senator Craig. Well, Ed, thank you very much for that very 
comprehensive analysis of where this law has taken us.
    Mark, you were here at the beginning. I guess that is one 
way of saying it. While you served with this committee here in 
the Senate, you were one of the primary authors to the 
legislation. You and Sarah Bittleman worked with myself and Ron 
to make this legislation work and ultimately to become law.
    So my first and obvious question is, now that the shoe is 
on the other foot, so to speak, can you give us your assessment 
of how the Secure Rural Schools and Community Self-
Determination Act is being implemented? Is it working from the 
standpoint of your initial analysis when we crafted it?
    Mr. Rey. As I indicated in my statement, I believe the Act 
is meeting the three purposes set forth in the purpose section 
and is doing an effective job of achieving each of the three. 
And that is fortunate because, as you indicated, I am hardly in 
a position to complain about the drafting.
    [Laughter.]
    Senator Craig. And that you should not.
    Give us some of your insight as to resource advisory 
committees and their working. Are these committees working up 
to your expectation, or are there steps that we should take to 
improve their performance?
    Mr. Rey. I think they are working generally quite well 
where they are in existence. I think the challenge, as we 
continue to move in implementation, is to try to look at those 
counties which have significant payment opportunities that have 
not yet developed resource advisory committees or called for 
the development of resource advisory committees. Clearly where 
the amount of money is relatively small, there would be some 
question as to whether it is worth the arduous effort to 
charter a committee, but by our count, there are still about 31 
counties which have a significant amount of payment that could 
be devoted to work overseen by resource advisory committees, 
and those are our targets of opportunity to expand the use of 
the resource advisory committees and the helpful dialog that 
occurs over the management of the Federal lands when those 
committees are chartered and begin to operate.
    I noted with interest a copy of a letter that I received 
last week that was actually addressed to Senator Wyden, and I 
was just cc'd on it. It was co-signed by Anna Morrison, a 
county commissioner from Lane County, and Andy Stahl----
    Senator Wyden. Ideological bedfellows.
    [Laughter.]
    Mr. Rey. I think it is a fair bet that prior to their 
appointment and activity on this resource advisory committee, 
it would have been difficult to get them to co-sign a 
communique that the sun rises in the east and sets in the west. 
Andy would have wondered what was behind that, and Anna would 
have refused to sign it if Andy had. So that is one indication 
of progress I think.
    Senator Craig. Mark, I have been told that not one of the 
projects recommended and funded by the resource advisory 
committees has been appealed or litigated. Is that true?
    Mr. Rey. To our knowledge, that is correct.
    Senator Craig. If these resource advisory committees have 
established such an enviable track record, I am wondering if we 
should not expand the number and reach of these advisory 
committees by earmarking a certain percentage of each forest 
budget to be utilized by the committees to enhance the good 
work they seem to be doing. Any thoughts on a concept like 
that?
    Mr. Rey. That is a concept not dissimilar to some of the 
early drafts of this legislation that we were discussing in 
1999, but I think I would like to defer our recommendations for 
changes to the legislation until we come to testify on the 
bills that you introduced last week.
    Senator Craig. Fair enough.
    Ed, again, thank you for being here this morning and 
testifying. I understand you were BLM's representative to the 
County School Long-term Committee which held numerous public 
hearings on this legislation. So you were there also at that 
phase in 2000 of drafting and working on it and looking at it.
    Understanding that the Federal agencies had little to do 
with the implementation of title I and II, can you spend some 
time helping us understand whether or not title II is working 
for the BLM?
    Mr. Shepard. Well, title II is working very well for the 
BLM in three ways. First, we are planning and are 
accomplishing, through the work with the RAC's, over $33 
million worth of restoration projects on the ground. I say over 
$33 million. $33 million came from title II, but we have been 
able to leverage from other sources from watershed councils, 
from timber companies, from the counties themselves other 
dollars to accomplish a lot of this work. So in that way, it 
has obviously been very successful.
    Second, the recommendations of the projects that come 
through the RAC's have really lead to buy-in by the community. 
This is, in my opinion, the reason that we have not seen the 
protests and litigation that we see in a lot of the other 
projects that we try to push forward.
    And third, I think the relationships that have been built 
as a result of these RAC's have really been invaluable, not 
only to accomplish title II projects, but also the 
relationships help as we try to move forward other things that 
the BLM is trying to do.
    Senator Craig. Given the public meetings that the County 
Schools Long-term Committee held, are there other insights that 
you might add or that you hold as it relates to this law?
    Mr. Shepard. I think one of the things that impressed me 
most, Senator, as I was going around the country with the 
committee and listening to the folks that were affected by the 
downturn in timber harvesting off of the Forest Service and BLM 
lands was how timely the passage of this Act was. Many of these 
communities were right on the edge of losing critical 
infrastructure, and I think the act coming along with title I 
helped them move through that difficult time and keep that 
infrastructure going.
    Again, a complaint that we heard in a lot of the hearings 
is that the agencies had lost contact with the communities out 
there and with the counties. I think a lot of that was because 
of the loss of the money and the controversies over the 
downturn of the timber. This bill, and particularly where the 
RAC's are present, I think has moved people back together with 
the agencies. Forest Service and BLM relationships have really 
improved. And I can speak from personal experience with my time 
in Oregon where the relationships during the late 1980's and 
much of the 1990's were very stressed, and now I think the 
counties and the agencies are working very well together again.
    Senator Craig. Well, Ed, thank you. I have got one last 
question before I turn to Ron.
    We have also just been joined by Senator Gordon Smith. 
Gordon, welcome. We are glad you are here. We know this law 
plays an important role in your State and Ron's State.
    Ed, I asked the question of Mark. Should we expand the 
number and reach of these advisory committees by earmarking a 
certain percentage of each forest budget to be utilized by 
these committees to enhance the good work they seem to be 
doing?
    Mr. Rey. I would prefer if you ask Ed about the BLM budget, 
if you do not mind.
    [Laughter.]
    Senator Craig. Well, I understand that.
    Mr. Shepard. There has been no doubt that the RAC's have 
been very successful and BLM has a lot of experience with RAC's 
for a number of years. But I would prefer to bring that back 
and discuss it with the Department and Director Clarke and 
respond to that at the reauthorization hearing.
    Senator Craig. A very skillful dodge. Thank you much, Ed.
    Let me turn to my colleague, Ron Wyden. Ron.
    Senator Wyden. Thank you, Mr. Chairman. Our witnesses have 
been very helpful.
    Again, because we are not going to go into the budget, I am 
just going to make my own statement with respect to where we 
are. If we do not get full funding for the county payments law, 
our region faces what literally could be a triple whammy. 
Yesterday, the budget called for a massive rate hike on 
Bonneville customers, a $2.5 billion rate hike, a rate hike 
that would be economic poison for our region, one that is 
opposed by myself, Chairman Craig. Senator Smith deserves great 
credit for essentially announcing on the front pages of our 
paper. He opposed it with everything he has got, and I thank 
him for his excellent statement.
    But the combination of the massive rate hike for 
Bonneville, not getting full funding for forest health--you 
know, we were pledged in the bipartisan forest health bill $760 
million. We are talking about several hundred million less, at 
least $200 million less. And then the question of the county 
payments. If we do not get this money, our region is staring 
right at a triple whammy that would be devastating to our 
economy.
    By agreement with Chairman Craig, this is going to be an 
oversight hearing and not a budget hearing, but I just want to 
use this opportunity to make it clear how important it is that 
we have the administration's support on this particular 
initiative because of the importance to the region and what we 
are faced with in terms of our economy.
    What I would like to do for a couple of minutes--in fact, 
let me start with one point that you made, Mr. Rey, on the 
question of the 31 counties that have not been moving quickly. 
Why do you think that is? I think that given the fact those are 
big counties and counties where you would say, look, this 
sounds like a pretty attractive thing, what are you picking up 
in terms of why they might be reluctant? Because I think that 
is something that we would like to factor into this bipartisan 
reauthorization.
    Mr. Rey. I think that it involves a couple of things. 
First, in some of those counties, the county commissioners 
looked at the prospect of sharing the decisionmaking authority 
for the use of money under title II and compared it to the 
unilateral authority to spend the money they want on title III 
projects, and decided they preferred the latter.
    Second, I think a lot of the counties decided to wait and 
see how well the resource advisory committees were working 
before they invested the time and energy into going through the 
process of getting a resource advisory committee chartered.
    And third, I suspect that, as I looked through the list of 
those counties affected, there were in some cases counties that 
I knew had fairly pressing needs for funding some of the 
activities that are allowed through title III funding.
    So I think those would be the three primary reasons that we 
saw some counties, who arguably should have been attracted to 
title II, slow to form resource advisory committees. What I 
hope we can persuade them of in the future is that if you look 
at the experience of the counties who formed resource advisory 
committees, the opportunity to engage in a more civil and 
constructive discourse on how the Federal land should be 
managed generally inures benefits that go beyond just the money 
that is invested.
    Senator Wyden. I think you are right. I particularly sense 
that there are a lot of people in the wait-and-see department. 
Let us try to get the word out now that this is in fact 
working. I think that we will get some of those 31 counties on 
board.
    Give me a sense, in terms of 1,800 projects authorized, 
about some of the numbers. What is your sense about how many 
now or will produce merchantable timber?
    Mr. Rey. I can get you more specific numbers for the 
record. We do maintain a data base on the projects. I would say 
a relative handful are producing merchantable timber. By law 50 
percent of the projects have to deal with road or trail 
improvement or watershed improvement. Our figures indicate that 
roughly 56 percent of the projects do that. In those projects, 
you are obviously going to have at most an incidental or 
occasional amount of commercial timber. I will get you the 
exact numbers, but my sense, having reviewed the data base 
once, is that that is a relatively small number of projects.
    Senator Wyden. And how many do you think are serving to 
improve forest health and fire preparedness?
    Mr. Rey. I think a fairly significant number. Probably 25 
to 30 percent of them probably have forest health or fire 
hazard reduction goals attached to them.
    Senator Wyden. The only other question I had for you, I 
think what the chairman and I are interested in--the 
cooperation that we have seen as a result has now made this 
essentially the only significant area of foreign policy--of 
forest policy that has not turned----
    Senator Craig. That was not a bad slip.
    [Laughter.]
    Senator Craig. There was some foreign policy involved here.
    Senator Wyden. You got it.
    This seems to be the only significant area of forest policy 
that is not a litigation derby. I think that what we are 
interested in is not as part of this legislation--when you said 
you were not calling for any amendments to this bill, we 
appreciate that because it will be a challenge to get this 
reauthorized. What we have been interested in is whether we 
could use this RAC model in other areas of forest policy simply 
because it does stand out as essentially the only area in 
natural resources that has been significant, with a significant 
amount of dollars, that is not a lawyer's full employment 
program. So why do you not give me your thoughts on that, 
whether we can take this RAC model and use it in other areas, 
not just this one as it relates to forest policy to try to help 
find the common ground.
    Mr. Rey. I think generally whenever we can find ways to 
involve people at the community level, we are getting better 
results. That is clearly the case with these resource advisory 
committees. It also appears to be the case with the community-
based fire plans that are being developed now under the 
auspices of the Healthy Forests Restoration Act. But as we move 
forward to discuss the bills that were introduced last week, we 
will also give some thought to where we can productively expand 
the role of resource advisory committees beyond the four 
corners of this legislation.
    Senator Wyden. I am going to be interested in talking with 
both of you. Ed, I will not jump you on this at this point. But 
I am interested particularly in asking you two about areas 
where we could use the RAC model and the model as it relates to 
bringing people together as it relates to water issues. Ed, you 
all get a fair ways into this issue, but I think all over the 
West, the water issues are going to be very, very contentious 
in the days ahead, the whole issue of competing uses and the 
fact that we westerners want the water for all of them, be it 
the economic needs, the environmental needs, the agricultural 
needs. We have got to find some model to get people again work 
together. So we are going to continue to explore with both of 
you this question of how we can use the RAC model in other 
areas.
    We will keep the record open I think, Mr. Chairman, so that 
Mr. Rey can give us the numbers in terms of projects. In fact, 
why do we not see if we get a count on merchantable timber 
projects under the law, environmental projects under the law, 
and forest health and fire preparedness projects under the law, 
and we will hold the record open for that.
    Senator Craig. Thank you much.
    Now let me turn to our other Senator, our colleague from 
Oregon, Senator Gordon Smith.
    Senator Smith. Thank you very much, Mr. Chairman, and 
double thanks to you and Senator Wyden for crafting this 
extension. I cannot even find the words to tell you how 
critical I think it is to our region of this country. It is a 
fact that over the past 15 years, there has been a dramatic 
decline in the sale of Federal timber, resulting in significant 
corresponding decline in payments to counties. There is a myth 
out there that somehow President Bush has turned on the chain 
saw as soon as he came into office, but the truth is that 
between 1984 and 2004, harvest on the Umpqua National Forest 
has fallen 99 percent. The total harvest across Oregon's 
national forests is at a 93 percent decline. I understand that 
the numbers for the BLM lands in western Oregon are slightly 
better.
    But the simple fact is this, that without this safety net 
being extended, Oregon will be an economic dust bowl, and we 
cannot take that. When the forest resource went away, everyone 
pinned their hopes on the silicon forest, but we have seen that 
forest can go from boom to bubble to bust in fairly short 
order. Until we figure out what the policy is on the Federal 
forests as a resource for funding schools, this is a very vital 
link to the economics of the Pacific Northwest.
    So, Mark, I think one of the questions I have for you is, 
is there room to more closely marry title II projects with the 
Healthy Forests initiative?
    Mr. Rey. I think there is, and I think as people get more 
experience both with the use of stewardship contracting and 
with the procedures in the Healthy Forests Restoration Act, you 
are going to see more title II money devoted to those kinds of 
projects. There are some stewardship contract projects that are 
being funded at present under title II, and I think the rate of 
that is going to increase this year and next.
    Senator Smith. Mr. Shepard, do you have any comment about 
that?
    Mr. Shepard. I would agree with Under Secretary Rey that 
you will see, I think, an increase in the use of title II and 
title III funds with the HFRA authorities. You are seeing that 
now in many areas in development of the community wildfire 
protection plans. I think you will see a lot more of that, and 
I think a lot of opportunities, particularly in southwest 
Oregon, where we do have the higher fire risk.
    Senator Smith. Thank you, Mr. Chairman. I want to note the 
presence of an Oregonian, Tim Lillebo, of the Oregon Natural 
Resources Council. I want to welcome him here. He is on our 
second panel.
    Senator Craig. Thank you very much. Both Mark and Ed, thank 
you for joining us today. We will look forward to working with 
you.
    Mr. Rey. Mr. Chairman, Senator Bingaman asked a question 
and if I might, I am prepared to respond for the record so that 
the hearing record has that.
    Senator Craig. Surely, please proceed.
    Mr. Rey. The question of whether project monitoring is 
being done appropriately under the statute depends on what kind 
of projects you are talking about. There is no requirement for 
monitoring of title III projects, so roughly half of the 
projects that are being undertaken do not, to our knowledge, 
have monitoring programs attached to them.
    Under title II, all of the resource advisory committees 
have the same charter, which outlines how they will operate and 
maintain consistency and specifies that each project that is 
approved has to have a monitoring plan attached to it.
    Our discussions with the individual national forests that 
have projects indicate that implementation monitoring is being 
done on each project; that is, the project is being monitored 
to assess that it is accomplishing what it is designed to 
accomplish. We are also doing some similar monitoring on 
adjacent private lands projects as well.
    Ecological effectiveness monitoring typically takes place 
on a larger scale at a watershed scale, and it will involve all 
of the projects and does involve all of the projects within a 
specified area. So the monitoring that is done at that level 
for title II projects is going to be combined with information 
from any project of a comparable nature that is occurring in 
that watershed. Title II projects vary greatly in size, 
complexity, and purpose, so that kind of monitoring will vary 
accordingly, and some projects, such as conservation education, 
producing publications, noxious weed inventories, all of which 
are eligible for funding under title II, likely would not have 
an active monitoring component to them because that would be 
considered and rejected as unnecessary by the resource advisory 
committee.
    So that I hope is responsive to the question he asked about 
monitoring.
    Senator Craig. I appreciate that. Thank you.
    Senator Wyden. Mr. Chairman, Senator Cantwell is a strong 
supporter of reauthorizing the law. She has a statement for the 
record.
    Senator Craig. Without objection, her testimony will become 
part of the record.
    [The prepared statement of Senator Cantwell follows:]

Prepared Statement of Hon. Maria Cantwell, U.S. Senator From Washington

    Thank you, Chairman Craig.
    Thank you for holding this hearing, and thank you for continuing to 
support and champion the Secure Rural Schools and Self-Determination 
Act. I appreciate this oversight hearing and look forward to working 
with you and Senators Wyden and Feinstein to reauthorize this law.
    As you know, this vital program continues a nearly one hundred year 
old policy of providing fair and equitable compensation to the citizens 
of forest counties for their coexistence with federal lands. Simply 
put, without the support provided by laws like the Secure Rural Schools 
and Self-Determination Act, many rural communities in Washington would 
struggle to meet their basic needs such as adequate roads and good 
schools.
    Skamania County in Southwest Washington is a good example. Almost 
eighty percent of Skamania is in the Gifford Pinchot National Forest, 
making it non-taxable by the county. Other large portions of land are 
owned by the state or timber companies, leaving only two percent of the 
county eligible to be taxed at full valuation. However, by leveraging 
funds from the County Payments program, places like Skamania are able 
to still provide critical public services like education, emergency 
response, and road maintenance.
    And funds provided by this program not only meet the basic needs of 
rural communities, they also support a diverse array of important 
programs. Like athletic and music classes which help students in rural 
school districts compete with students in urban schools for college 
acceptance.
    In addition, title two of this law has increased local community 
involvement and empowered local citizens through the Resource Advisory 
Committees. These committees have helped cultivate a sense of 
ownership, promoting involvement in important projects such as 
improving wildlife habitat and water quality and reducing the threat of 
forest fires through fuels reduction efforts.
    Mr. Chairman, I appreciate this oversight hearing because I believe 
it gives us an opportunity to consider whether we can improve this 
program even further. I would like to consider ways we can allow 
counties more flexibility in how they use these funds, whether these 
payments should be independent of state education funding allocations, 
and how this program interacts with other compensation programs like 
the federal program that makes payment in lieu of taxes (PILT) for 
lands in federal ownership.
    For these reasons, Mr. Chairman, I look forward to working with you 
as we review the merits of this legislation and look forward to a swift 
reauthorization. While the bill does not expire until 2006, without 
this vital safety-net rural counties in Washington will lose more than 
$40 million dollars in irreplaceable funding for a variety of critical 
programs. The time is now for a comprehensive review of the law and its 
implementation, so we can move forward promptly.
    Thank you.

    Senator Craig. Again, gentlemen, thank you very much for 
being with us this morning. We will look forward to working 
with you as we move through reauthorization of this 
legislation.
    Now let us turn to our second panel. These folks are out 
there where this law is implemented and on the ground. Of 
course, their testimony will be extremely valuable. We will 
welcome to the panel Jim French, superintendent, Trinity 
County, Weaverville, California. Tim Lillebo has already been 
introduced by our colleagues, Conservation Policy Advocate, 
Oregon Natural Resource Council in Bend. I had mentioned 
Sherry. How are you, Sherry? Sherry Krulitz, District 2 
commissioner, Shoshone County in Wallace, Idaho. Dr. Tim Creal, 
superintendent, Custer School District, Custer, South Dakota. 
And Reta Griffith, commissioner, Pocahontas County, Marlinton, 
West Virginia.
    Well, we do appreciate all of you being with us this 
morning, and as I said in my recognition of this panel, you are 
all out where this law gets implemented on the ground and can 
see the effects of it. Some of you participate on the RAC. So 
we value your testimony.
    We will turn to you first, Jim, and let you proceed. Jim 
French.
    Before we do that, let me recognize our colleague from 
Colorado. Senator Salazar, do you have any opening comment you 
would like to make on this oversight hearing?

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

    Senator Salazar. Mr. Chairman, I am not a member of the 
subcommittee, but a member of the full committee, and thank you 
for the opportunity to participate.
    I have been long concerned about the inequality sometimes 
that occurs between rural schools and other schools that have a 
lot more property tax wealth. And in Colorado, we have huge 
issues and legal cases that I have been involved in for the 
last 20 years. So your leadership and that of Senator Wyden, in 
terms of moving this agenda forward, is something that I 
applaud and I look forward to working with you on the 
reauthorization.
    Senator Craig. Thank you much. We appreciate that.
    Jim, we will turn to you.

STATEMENT OF JAMES B. FRENCH, TRINITY COUNTY SUPERINTENDENT OF 
                    SCHOOLS, WEAVERVILLE, CA

    Mr. French. Thank you for the opportunity to address the 
committee on Public Law 106-393 and the uses of title I and 
title II funding resources. My name is Jim French and I am 
Trinity County superintendent of schools and chairman of the 
Trinity County Resource Advisory Council. I also serve on the 
board of the National Forest Counties and Schools Coalition 
which contributed significantly to the current law.
    Trinity County is a large, rural, mountainous county in 
northern California, of which 76 percent is national forest. We 
are the second largest recipient of forest reserve dollars in 
California, once being a large timber producer on national 
forest land. Trinity County receives a total of $7,730,027, of 
which $6,570,000 is title I, annually split between roads and 
schools. $927,603 is in our title II this year and last, and 
$231,900 in title III funding.
    Regarding title I funding for schools, forest reserve 
funding has been an integral part of Trinity County school 
funding for over 40 years, and it is essential to our continued 
success. These funds provide for instructional aides in our 
multi-graded classrooms, implementing the Federal No Child Left 
Behind requirements. In my county schools office, the funds are 
used to provide school nurses, counselors, arts and music 
programs. Forest reserve funds additionally fund under-funded 
special education programs. A wide array of student programs 
without dedicated program funding are funded under forest 
reserve: our annual spelling bee, the academic decathlon, the 
young author's faire, our gifted education programs, our young 
artist's workshop, to name a few.
    In an era of declining student population, 24.4 percent 
since 1996, and declining school revenue, without forest 
reserve funding, our schools would have to eliminate the 
majority of our instructional aides and programs that I spoke 
of above. Additionally, the four largest school districts in my 
county schools office would file qualified or negative budgets 
with the State, citing the inability to meet our financial 
obligations. Our declining student population is due in great 
part to the changing forest practices and associated local 
economy loss which, in turn, necessitates greater need for 
forest reserve funding. I believe that our situation is a 
common one in rural resource-dependent America.
    Regarding resource advisory committees, authorized under 
the law, as I said, I am chairman of our Trinity County RAC. 
Our county is the second largest contributor to both title II 
and title III programs in California, and we dedicate the 
largest amount to title II by percentage in actual dollars in 
California. To date, we have expended $3,356,086 on 63 title II 
projects within our county. 94.4 percent of it has been spent 
on a fuel reductions program and watershed restoration.
    Below are features of, what I considered, our successful 
RAC, which may serve new or future RAC's.
    No. 1, our RAC established clear, agreed-upon strategies. 
Early on we decided to focus on fuel reduction projects that 
help to protect rural communities at risk and watershed 
projects that restored rivers or reduced sediments in our 
streams and rivers. 10 percent of our title II funds are 
distributed to other allowable projects such as trail 
maintenance and work with our Native American community.
    Early on, we identified ground rules for participation that 
defined the parameters of disagreement within our RAC. In our 
RAC the rule is: conduct yourself so that you could be invited 
to dinner by any member after the meeting.
    [Laughter.]
    Mr. French. So oftentimes I would have to say, you are not 
going to get invited to dinner. Well, not that often.
    But really, the RAC process is really about building 
relationships and then finding common ground, literally, for 
projects.
    Our RAC identified many partners to collaborate on a 
program of work as well as funding. We dovetail all our fuels 
projects with identified communities at risk, as identified by 
our county fire safe council plan. The majority of our 
watershed projects have State Fish and Game or Five County 
Salmonid matching dollars as part of our project.
    We complete as much of our work as possible by grants and 
agreements as opposed to force account by the Forest Service 
which provides for additional local work opportunity and 
economic growth.
    We ask our county commissioners to identify our title II 
funding allocation early so our RAC has ample time to plan and 
implement projects.
    We also schedule enough time in our RAC calendar to allow 
the process to work. It is really all about process. Early on, 
we met once a month but now do most of our work in subcommittee 
format, and the full RAC meets up to four times a year to vote 
on projects.
    The ongoing productive relationships between county 
commissioners, the Forest Service, and schools are critical to 
RAC success. RAC's should update county commissioners on 
projects at least quarterly with the Forest Service in 
attendance. Originally our RAC had two county commissioners on 
it, which I think certainly helped with our early success.
    Attached for your review are just a few of the many photos 
taken on our RAC monitoring field trips.* They are 
representative of our many projects. I would say we have 
probably had the opportunity to monitor by walking the ground 
25 percent of our projects.
---------------------------------------------------------------------------
    * The photos have been retained in subcommittee files.
---------------------------------------------------------------------------
    The first roads photo is from our China Gulch sediment 
reduction project. I think you can see by the picture 
graphically what a serious problem we had with China Gulch, and 
down below you can see that it was corrected.
    Also included as photo 2 is an article on our Big Red Truck 
RAC project which is credited with saving homes during the 
4,000-acre Simms fire. And I proud to say that starting last 
year, we have been able to generate some saleable timber with 
our fuels reduction projects, reducing the overall cost of 
projects as shown in photos 3, 4, and 5. I view the generation 
of RAC-approved forest products as an essential feature of 
future RAC fuels projects.
    The sixth photo shows our youth crew marking saw logs from 
our 33-mile Mad River Ridge fuel break, our largest RAC 
project. It has been important to us and many RAC's across 
America to have our future stewards of the land involved in 
projects.
    The RAC process has shown great promise for quality 
collaboration in our county and I hope across the Nation. I 
think the RAC's members views of how to manage our forests have 
grown. Preventing catastrophic wildfire and restoring 
watersheds are essential to the future of our forests and RAC's 
stand poised to do that work. I suggest that we also stand 
poised to implement HFRA and we are looking forward to doing 
that.
    In my county, it is critical that Public Law 106-393 be 
reauthorized to provide continuing benefit to our children, our 
forests, and our communities, maintaining the compact that the 
Federal Government made with rural counties many years ago.
    Thank you for your time and thoughtful consideration. I am 
happy to answer any questions.
    Senator Craig. Jim, thank you very much.
    Now we will work our way right up the table.
    Dr. Creal.

        STATEMENT OF DR. TIMOTHY CREAL, SUPERINTENDENT, 
  CUSTER SCHOOL DISTRICT, CUSTER, SD, ON BEHALF OF THE FOREST 
                  COUNTIES PAYMENTS COMMITTEE

    Dr. Creal. Thank you very much, Mr. Chairman and members of 
the subcommittee. Thank you for the opportunity to appear 
before you today and discuss the critical issues of payments to 
States and counties associated with national forests and Oregon 
and California grant lands.
    My name is Tim Creal and I am here today representing the 
Forest Counties Payments Committee. I am also superintendent of 
Schools in the Custer School District in Custer, South Dakota, 
located in the Black Hills.
    The Payments Committee was created by Congress to provide 
recommendations for a long-term solution for making payments to 
States and counties. The committee is also charged with 
evaluating payments made under the Secure Rural Schools and 
Community Self-Determination Act of 2000 and to make other 
evaluations related to impacts to communities. A report 
containing these findings and recommendations of our committee 
was submitted to the six congressional committees of 
jurisdiction in February 2003.
    During the 18 months of preparing a report to Congress, the 
Payments Committee conducted 10 listening sessions around the 
country and we heard from school officials, Federal agency 
employees, local elected officials, and citizens. We also met 
with the Members of Congress and their staff, as well as 
officials from the administration. The Forest Counties Payments 
Committee undertook a research project that provides the most 
current information on topics such as tax value of Federal 
lands, the costs and benefits of public lands to communities, 
and how States allocate the Federal payments between schools 
and roads.
    The Secure Rural Schools Act, also known as the Craig-Wyden 
bill, is an effort to have the Federal Government live up to 
the commitments made to communities many years ago and to hold 
counties and local governments harmless for changes that the 
Government makes in its program levels. The current law, which 
expires in 2006 is being implemented by State and local 
governments, the Forest Service, Bureau of Land Management, and 
private citizens through their participation in resource 
advisory committees under title II.
    Mr. Chairman, in 2004, approximately $507 million were made 
available through this legislation. The majority of this money, 
$426 million, will be used for education and roads through 
title I. The remaining $80 million was set aside by counties 
for certain county projects and projects on public lands. 
Without the payments guaranteed under the Secure Rural Schools 
Act, that amount would have been approximately $82 million.
    After 4 years of experience with this legislation, it is 
clear these payments have allowed schools to continue to be 
viable in many communities. Without guaranteed payments, many 
rural schools would have lost their ability to provide the same 
quality education available in many urban schools. School 
officials told us they would have dropped athletic programs, 
music programs, honors programs, the very curricula that allow 
rural students to compete with their urban counterparts for 
acceptance into college. Counties and local governments have 
also been able to provide better maintenance on local roads and 
bridges to meet critical health and safety needs, protect water 
quality and provide access to public lands. Our findings and 
recommendations regarding funding for education and roads can 
be found in the report.
    One of the great experiments of the Craig-Wyden bill is 
found in title II. The belief that local citizens can come 
together and assist in the management of the national forests 
and O&C lands was not shared by everyone when this law was 
passed. Land management disagreements of the past 15 years 
caused people to draw lines in the sand and work out their 
differences through appeals and lawsuits. It is remarkable how 
quickly some people have put aside that baggage and jointly 
agreed on projects to improve water quality, fuels reduction, 
and wildlife habitat.
    There are currently 59 active resource advisory committees 
and an additional 29 that have been chartered. In 2004, 
approximately $41.8 million were set aside by counties to 
accomplish projects on the national forests and O&C lands.
    We find a strong correlation between the amount of money a 
county receives and whether or not they decide to allocate any 
to title II and form a resource advisory committee. Given this, 
we recommend creating other financial incentives where payments 
are not significant enough to create advisory committees. We 
also believe the role of the resource advisory committees could 
be expanded beyond their current authorities. And we are also 
finding that many resource advisory committees accomplish 
public land projects by partnering with other financial 
resources and volunteers.
    In 2004, approximately $38.6 million were set aside by 
counties to accomplish projects under the six categories in 
title III authorized by the current law. Our committee made 
several recommendations about title III. We commissioned a 
study that sampled 100 counties around the country to identify 
costs and benefits of Federal lands to communities. Title III 
allows counties and local governments to offset some of the 
costs associated with search and rescue operations and fire and 
prevention created by the presence of public lands. We also see 
the need to have some type of accountability and reporting 
procedures in place to ensure moneys are spent as Congress 
intended.
    In closing, we are aware of the cost of reauthorizing these 
payments. Part of the cost should be borne by receipts 
collected from the public lands. But they are not enough, nor 
are they stable. We evaluated the current tax value of public 
lands and compared that to payments from the Secure Rural 
Schools Act and Payments in Lieu of Taxes law. When considered 
in the aggregate, the tax value of those lands is greater than 
the combined payments from the two payment programs. While 
Congress did not intend for these payment programs to 
necessarily compensate for loss tax revenue, it is a legitimate 
measure against the amount that is being paid by the Federal 
Government.
    The Forest Counties Payments Committee will continue to be 
available to this subcommittee and provide any assistance as 
new payment legislation is developed.
    Mr. Chairman, this concludes my comments. However, I would 
be happy to answer any questions you or other committee members 
may have. Thank you.
    [The prepared statement of Dr. Creal follows:]

               Prepared Statement of Dr. Timothy Creal, 
                   Forest Counties Payments Committee

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to appear before you today and discuss the critical issue 
of payments to states and counties associated with National Forests and 
Oregon and California Grant Lands. I am Timothy Creal and I am here 
today representing the Forest Counties Payments Committee. I am also 
the Superintendent of Schools for the Custer School District in South 
Dakota. The Payments Committee was created by Congress to provide 
recommendations for a long-term solution for making payments to states 
and counties. The Committee is also charged with evaluating payments 
made under the current Secure Rural Schools and Community Self-
determination Act, and to make other evaluations related to impacts to 
communities. A Report containing the findings and recommendations of 
our Committee was submitted to the six congressional committees of 
jurisdiction in February of 2003. I would ask that Report be made a 
part of my statement today. During the 18 months of preparing the 
Report to Congress, the Payments Committee conducted 10 listening 
sessions in different locations around the country where we heard from 
school officials, federal agency employees, local elected officials, 
and citizens. We also met with members of Congress and their staff, as 
well as officials from the Administration. The Forest Counties Payments 
Committee undertook a research project that provides the most current 
information on topics such as the tax value of federal lands, the costs 
and benefits of public lands to communities, and how states allocate 
the federal payments between schools and roads. Readers will also see a 
discussion of the history of National Forests and Oregon and California 
Grant Lands, appropriate in this hundredth year anniversary of the 
Forest Service, and an evaluation of resource advisory committees 
authorized under Title II of the current law. The Payments Committee 
would also like to thank the Energy and Natural Resources Committee for 
supporting the recent Bill to extend our term. Our members felt it was 
important to remain together as Congress begins the task of developing 
new payment legislation that is of such importance to more than 730 
counties and other local governments across this country.
    Almost 100 years ago, Congress recognized that the presence of 
public lands could create certain impacts on communities. The inability 
to collect property taxes and the scarcity of private lands for future 
development were among several concerns identified. Establishment of 
the 1908 Payment Act for National Forests, and the 1937 O&C Act for 
Oregon and California Grant Lands were efforts to mitigate these 
impacts. These payment programs, along with healthy economies generated 
by active management of these federal lands, helped ensure adequate 
funds for schools and roads. However, this changed as timber harvests 
on public lands rapidly declined. The Secure Rural Schools and 
Community Self-determination Act of 2000, also known as the Craig/Wyden 
Bill, is an effort to have the federal government live up to 
commitments made to communities many years ago, and to hold counties 
and local governments harmless for changes the government makes in its 
program levels. The current law, which expires in 2006, is being 
implemented by state and local governments, the Forest Service, Bureau 
of Land Management, and private citizens through their participation in 
resource advisory committees under Title II.

                                TITLE I

    Mr. Chairman, in 2004, approximately $507 million were made 
available through this legislation. The majority of this money, $426 
million, will be used for education and roads. The remaining $80 
million was set aside by counties for certain county projects, and 
projects on public lands. Without the payments guaranteed under the 
Secure Rural Schools and Community Self-determination Act, that amount 
would have been approximately $82 million. That includes payments from 
National Forests as well as the O&C Lands. After four years of 
experience with this Legislation, it is clear these payments have 
allowed schools to continue to be viable in many communities. 
Information provided by the National Education Association, the 
National Forest Counties and Schools Coalition, and the American 
Association of School Administrators indicates that without the 
guaranteed payments many rural schools would have lost their ability to 
provide the same quality education available in many urban schools. 
School officials told us they would have dropped athletic programs, 
music programs, and honors programs; the very curricula that allow 
rural students to compete with their urban counterparts for acceptance 
into college. Others expressed concerns about the way some states 
allocate Title I funds to local school districts. This generally occurs 
where states have put in place equalization formulas for education 
funding.
    Counties and local governments have also been able to provide 
better maintenance on local roads and bridges to meet critical health 
and safety needs, protect water quality, and provide access to public 
lands. Our findings and recommendations regarding funding for education 
and roads can be found in the Report. The Payments Committee is 
currently gathering additional information about education and road 
expenditures in cooperation with several organizations, and will 
continue to provide that to the committees of jurisdiction as it 
becomes available.

                                TITLE II

    One of the great experiments of the Craig/Wyden Bill is found in 
Title II. The belief that local citizens can come together and assist 
in the management of the National Forests and O&C Lands was not shared 
by everyone when this law passed. Land management disagreements of the 
past 15 years caused people to draw lines in the sand and work out 
their differences through appeals and lawsuits. It is remarkable how 
quickly some people have put aside that ``baggage'' and jointly agreed 
on projects to improve water quality, fuels reduction, and wildlife 
habitat. There are currently 59 active resource advisory committees, 
and an additional 29 that have been chartered. In 2004, approximately 
$41.8 million were set aside by counties to accomplish projects on the 
National Forests and O&C Lands. Most are in the West, but some do exist 
in the Southeast. We find a strong correlation between the amount of 
money a county receives, and whether or not they decide to allocate any 
to Title II and form a resource advisory committee. Given this, we 
recommend creating other financial incentives where payments are not 
significant enough to create advisory committees. We also believe the 
role of resource advisory committees could be expanded beyond their 
current authorities.
    We find that many resource advisory committees accomplish public 
land projects by partnering with other financial resources and 
volunteers. This serves to increase the effectiveness of the Title II 
monies identified by counties. It is also important to find ways to 
better determine economic benefits in terms of jobs created.
    The success of resource advisory committees will be determined over 
time. A study recently completed by Boise State University, and an on-
going study by Forest Community Research, will provide valuable 
information about the effectiveness of these advisory committees, and 
any changes that need to be made to improve their operation. The 
Payments Committee intends to document the results of some of these 
projects in a video presentation in the near future, and will make that 
available to this subcommittee.

                               TITLE III

    In 2004, approximately $38.6 million were set aside by counties to 
accomplish projects under the six categories authorized by the current 
law. There was not a great deal of information available about Title 
III when the Committee filed its Report in 2003, and several efforts 
are underway to gather more detailed information about how counties are 
using these funds. Our Committee made several recommendations about 
Title III. First, we believe it is important to continue this Title in 
future legislation. We commissioned a study that sampled 100 counties 
around the country to identify costs and benefits of federal lands to 
communities. Title III allows counties and local governments to offset 
some of the costs associated with search and rescue operations and fire 
prevention created by the presence of the public lands. The Payments 
Committee and federal agencies received many calls from counties asking 
for assistance to interpret whether certain projects qualified under 
Title III. Because of these uncertainties, we see a need to have some 
type of accountability and reporting procedures in place to ensure 
monies are spent as Congress intended.

                        ADDITIONAL OBSERVATIONS

    In closing, we are aware of the cost of reauthorizing these 
payments. Part of the cost should be born by receipts collected from 
the public lands. But they are not enough, nor are they stable. As a 
comparison, we evaluated the current tax value of public lands and 
compared that to the payments from the Secure Rural Schools Act and the 
Payments in Lieu of Taxes Law. When considered in the aggregate, the 
tax value of those lands, if they were in private ownership, is greater 
than the combined payments from the two payment programs. While 
Congress did not intend for these payment programs to necessarily 
compensate for loss tax revenue, it is a legitimate measure against the 
amount that is being paid by the federal government.
    The Forest Counties Payments Committee will continue to be 
available to this subcommittee and provide any assistance as new 
payment legislation is developed.
    Mr. Chairman, this concludes my comments. However, I would be happy 
to answer any questions you, or other members of the subcommittee may 
have.

    Senator Craig. Tim, thank you very much.
    Now, let us go to Tim Lillebo, Oregon Natural Resources 
Council.

STATEMENT OF TIM LILLEBO, CONSERVATION POLICY ADVOCATE, OREGON 
              NATURAL RESOURCES COUNCIL, BEND, OR

    Mr. Lillebo. Good morning, Senators. Hello, Gordon, Ron, 
Mr. Craig.
    I noticed outside there were piles of snow kind of along 
some of the side streets and around the trees. We are kind of 
in the middle of a serious drought in Oregon right now. In 
fact, I live in Bend, Oregon. It is known as a ski town, and 
right now there is more snow in Washington, D.C. than there is 
in Bend. So we need your help as Senators to send some of that 
D.C. snow our way. We are kind of desperate right now.
    I would like to thank you again for the opportunity to 
speak. I am going to call this the county payments legislation 
in my testimony. Tim Lillebo, Conservation Policy Advocate. I 
have worked for 29 years in Oregon trying to protect forests, 
deserts, rivers, clean drinking water.
    We have 6,000 members in the Oregon Natural Resources 
Council, and they all care about protecting wildlands, 
wildlife, wild rivers of our State and also protecting things 
for our children. Many of our members have children in Oregon's 
public schools, and like most of the people of our State, they 
want our schools to have the resources they need to thrive, but 
what we do not want, what Oregonians and ONRC do not want, is 
to be forced to make a choice between protecting forests, 
mountains, rivers of our State to fund our children's 
education.
    And that is why the Oregon Natural Resources Council 
supports reauthorization of the county payments legislation, 
including the original pilot project section. We support that. 
We would like to see it fully funded because it really is a 
lifeline to a lot of the counties in Oregon.
    I would like to take the opportunity to thank all of you 
for passing the original legislation. It has just made a huge 
difference in the Oregon education and how the counties have 
been able to rely on stable funding, for once, to provide for 
schools and roads and other necessities in the county.
    I am a member of two RAC's in Oregon. One is in the very 
populous central Oregon area, Bend area. Another one is in the 
Blue Mountains region which is not very populous but pretty 
darned nice country.
    Overall, the RAC's I have been involved in and participated 
in have worked very well and have produced some very good 
restoration projects. To my knowledge, as you said earlier, 
none of those projects have been appealed. So it has been very 
successful.
    We did have some contentious times in the early meetings. 
Some of the county folks wanted the title II funds to all go to 
road grading and road maintenance and things like that, and the 
conservation groups said, well, wait a minute, we would like to 
have those funds to restore rivers and streams and salmon and 
steelhead and forested watersheds for clean drinking water. 
Anyway, the RAC structure and the legislation guidance allowed 
us to forge a compromise where all of the interests were 
listened to and everybody came to understand the values of the 
other groups.
    Often the title II funds are the only source of dollars for 
many worthwhile ecosystem projects. Our RAC's have approved 
numerous projects. I am going to give you a long list here, but 
I think it is critical to note that there is a diversity of 
projects and a diversity of restoration projects and issues and 
a diversity of benefits from those projects.
    We have approved numerous projects including watershed 
restoration enhancement, fish passage for our very important 
salmon resources in the Northwest, aspen restoration, road 
decommissioning, prescribed burning, small tree fuels reduction 
in the wildland/urban interface next to communities. We have 
had youth work programs. We have had noncommercial and 
commercial thinning projects approved. We have also had some 
road maintenance, of course, for some of the counties.
    These forest and watershed projects can help provide homes 
for bald eagles and other wildlife. They also provide great 
options for recreation opportunities, and it provides a real 
important aspect for a lot of these rural areas because it 
provides jobs in the woods to help these local communities.
    The county payment remains critical--and I think the others 
here will speak to that--for counties to having fully funded 
schools, conservation programs, and road budgets.
    While my personal experience with resource advisory 
committees has been very positive, not everyone in the 
conservation community has had that. I have spoken to several 
different groups and several other people on RAC's and there is 
a strong concern in some of those RAC's that they have a 
balanced representation on these committees. They felt that 
actually the committee was not really of a conservation 
orientation. So I think there needs to be some oversight to 
ensure the balanced representation on the RAC's, who the actual 
members on the RAC's are. So there have been some problems 
there.
    Under the interest area group structure, each group has the 
autonomy and the power to influence projects. In fact, a group 
has kind of a veto power. They can say if we really do not like 
a project, you can stop it. But that also means that all the 
groups have to listen to each other. They cannot ignore the 
other ones. You have to communicate and come to some kinds of 
agreements over contentious issues. It is a give and take, and 
we usually have made pretty reasonable compromises. So I think 
the way it works--and others have said this--it does foster 
cooperation because we all know that nobody will get rolled, 
but we also know that so far nobody has needed to filibuster 
either.
    I would like to offer a quick personal story about 
cooperation. In years past, an Oregon timber industry person 
and myself had a fairly choppy relationship over conservation 
issues. We butted heads many times on logging projects and 
efforts to restore the land. We would often up arguing in a 
public forum. And on one kind of sad occasion, we just darned 
near came to fisticuffs. I mean, it was pretty serious. But now 
we are both on the same RAC and we actually have a fairly 
cordial relationship. We get along. We have agreed on projects. 
So I think the process is pretty important that way. I am 
pretty sure that there are other stories like this from Oregon. 
So because of the RAC, we no longer want to fight, this timber 
industry executive and I, and I think the world is a safer 
place for it as well.
    [Laughter.]
    Mr. Lillebo. Anyway, there is one issue that is kind of 
contentious. We noticed that in the proposal of the 
legislation, that there would be some changes. It was 
originally our understanding that there would not be any 
significant, substantive changes to this when it was 
reauthorized. But it appears that an important pilot project 
requirement in a section has been deleted and potentially 
replaced with a discretionary clause. This is a very 
substantial change in our view, and we are opposed to the 
deletion of that pilot project section. We would like to see 
the bill reauthorized with the original language.
    The pilot project section, for those who do not know, 
required that 50 percent of the merchantable material projects, 
namely timber sales, should have separate contracts for the 
logging and then to sell the logs. So in effect, it would 
separate the logs from the logger. This is an important model 
that conservationists and other groups have wanted to see 
implemented for years and years. So we think it would be a good 
thing to do for public land forest management.
    The Government Accounting Office--and I think, Ron, you 
already referred to this--said in 2003 that out of 1,300 title 
II projects, there were only 13 that actually ended up creating 
merchantable materials like timber sales and so forth. So only 
six of those, 50 percent, would have been implemented under 
this pilot project program to separate the logs from the 
logger. But none of those six projects has been implemented to 
date that I know of. Maybe there are some others that have 
happened since that time.
    So to me, there is no need to delete the pilot project 
section as it has not even been implemented yet. So nothing is 
broken, nothing really needs to be fixed in our view. The pilot 
project is important and deserves to be tested under the same 
rules as the original legislation.
    I will close out here by a couple of things that I guess we 
feel are not substantive changes. One issue is that in the 
RAC's the alternates cannot vote, but I think it would be very 
important. Sometimes for family reasons or other important 
reasons members cannot attend, and I think it would be valuable 
to the functioning of the RAC's if we could allow those 
alternates to actually vote during committees.
    We would also like to recommend that RAC members be able to 
serve more than two terms on any individual RAC. Right now I 
think FACA says you cannot. So we think it would help out. The 
ones I am on, there has been some natural turnover, but the 
majority of the members have stayed, and that makes for more 
continuity and more trust and more consistency in the 
decisionmaking.
    Again, I would like to thank you for allowing me the 
opportunity to speak about this important legislation. Again, 
ONRC and myself, we endorse the reauthorization of the county 
payments. We would like to see the pilot project stay in 
because it does provide many benefits to wildlife, to 
recreation, watershed, and ecosystem restoration, benefits to 
the public and as well as the critical support to public 
schools and roads. So thanks again. Appreciate your time.
    [The prepared statement of Mr. Lillebo follows:]

Prepared Statement of Tim Lillebo, Conservation Policy Advocate, Oregon 
                  Natural Resources Council, Bend, OR

    Good morning Senators,
    I thank you for this opportunity to speak before you. My name is 
Tim Lillebo and I'm the Conservation Policy Advocate for the Oregon 
Natural Resources Council (ONRC) in Bend Oregon. I have worked for 
conservation of Oregon's forests, deserts, rivers, and clean drinking 
water for 29 years.
    Over 6,000 Oregonians are members of ONRC because they care about 
protecting the wild lands, wild life, and wild rivers of our state as 
an enduring legacy for our children and grandchildren. Many of our 
members also have children in Oregon's public schools, and like most 
people in our state, they want our schools to have the resources they 
need to thrive.
    But what Oregonians don't want is to be forced to make a choice 
between protecting the forests, mountains, and rivers of our state and 
funding our children's education. That is why the Oregon Natural 
Resources Council supports the reauthorization with full funding of the 
County Payments Legislation that does not rely on natural resource 
extraction to support schools and roads.
    ONRC would like to take this opportunity to thank Senator Wyden, 
Smith, Craig and other members of the Energy and Natural Resources 
Committee for passing the original County Payments Legislation in 2000.
    I am a member of two County Payments Legislation Resource Advisory 
Committees (RAC's). One in the very populous Bend and Central Oregon 
area for the Deschutes-Ochoco RAC and the much larger and more rural 
eastern Oregon area of the Blue Mountains RAC. Each area the RAC's 
represent is unique, and each RAC is unique, but the goals and workings 
of the two are very similar.
    Overall, the RAC's I have been involved in have worked very well, 
and have produced some good restoration projects. In addition to the 
vital funding that the County Payments Legislation provides for 
schools, it is important to note that it also sustains important forest 
and stream restoration projects.
    In the early RAC meetings that I participated in there were 
sometimes conflicts between conservationists and local County 
Governments. The Counties wanted to use the vast majority of Title II 
restoration funds for programs like road grading and maintenance. 
Conservationists wanted road maintenance to be mainly Title I funds, 
and to use the Title II funds to restore rivers and streams for salmon 
and steelhead, or to restore forested watersheds for clean drinking 
water.
    The RAC structure and legislation guidance allowed us to forge a 
compromise where all the interests were listened too and we all came to 
understand the values and needs of each group.
    Title II funds are often the only source of dollars for many 
worthwhile ecosystem restoration projects that would otherwise go 
unfunded. Our RAC's have approved numerous projects such as watershed 
restoration and enhancement, aspen restoration, road decommissioning, 
prescribed burning, small tree fuels reduction, non-commercial and 
commercial thinning, ``at risk youth'' work programs, and of course 
some road maintenance. These forest and watershed restoration projects 
can help provide homes for Bald Eagles and other wildlife as well as 
recreation opportunities for ONRC members and the public. The projects 
also provide important ``jobs in the woods'' to help local community 
economies.
    The County Payments Legislation remains critical to many rural 
Counties across the country. Due to the small population tax base of 
most rural cities and towns, the County Payments Legislation funds play 
an enormous role in having fully-funded schools, conservation programs, 
and road budgets.
    For example, Grant County in Eastern Oregon has only 7000 residents 
in an area the size of the state of Connecticut. Agriculture land 
property tax deferrals and forestland tax deferrals mean that public 
funds for things like schools are very limited. Because of this the 
County Payments Legislation has been a lifeline to Grant County, which 
now relies the County Payments Legislation for a significant portion of 
its annual budget for schools and roads. Without these funds some of 
our rural kids could lose important educational opportunities.
    While my personal experience with Resource Advisory Committees has 
been very positive, not everyone in the conservation community has had 
the same experience. In preparing my testimony for you I spoke with 
several other RAC members from around Oregon. Most agree that the RAC's 
are working, but conservationists have sometimes struggled to ensure 
the membership of these committees represent all the interests of a 
community.
    The ``interest area'' group structure of the RAC's was intended to 
avoid this sort of conflict, and it is vital that it be maintained. 
This not only ensures that all voices within a community can be heard, 
it also allows local interests to have a much stronger voice the 
decision making process.
    Under the ``interest area'' group structure, each group has the 
autonomy and power to influence projects. Indeed, if a majority of a 
group feels strongly against a specific project, that project can be 
blocked. Also, this means that the other groups cannot ignore one 
group's interests. It forces the different interests of each group to 
communicate and come to terms over contentious issues. There must be 
``give and take'' and a reasonable compromise must be made. The way it 
works fosters cooperation, because we all know that nobody will get 
``rolled'' and nobody has needed to ``filibuster''.
    I would like to offer a personal story about cooperation. In years 
past, an Oregon timber industry executive and I had a fairly ``choppy'' 
relationship over conservation issues. We butted heads many times on 
logging projects or efforts to restore the land. We'd often end up 
arguing in public forums, and on one sad occasion almost came to 
fisticuffs over our disagreements. But now we serve on a RAC together, 
and through our work on the committee we have developed a fairly 
cordial and productive relationship. We've been able to cooperate on 
the RAC to actually get the work done. I am sure there are stories like 
this from committees throughout Oregon.
    Another issue that arose in the RAC's is the need for the RAC 
member Alternates to be given the right to vote on projects. Many RAC 
members are very busy and sometimes over committed. Most are people who 
care deeply about natural resource issues and contribute greatly to the 
RAC, but sometimes family or other concerns do not allow attendance at 
every meeting. It would be beneficial for RAC function to allow the 
Alternates to vote at meetings. Alternate voting privileges should also 
encourage these folks to be more involved in the process, rather than 
just sitting with no real say in decisions.
    We would also like to recommend that RAC members be able to serve 
more than two terms on any individual RAC. Current U.S. Forest Service 
FACA regulations appear to limit members to two terms only. Members 
should be able to serve longer because of the value of continuity and 
consistency of the groups. The experience of current members and the 
trust and working relationships are important to maintain to help 
facilitate group functions. So far, the RAC's I serve on have had some 
natural turnover, but the majority of members have stayed and that 
makes for more continuity and consistency in the decision making 
process.
    As a final note, the two RAC's I work with usually meet 2-3 times a 
year and this seems to be adequate face-to-face time. We also 
communicate via e-mail and phone to do our ``homework'' concerning 
individual project proposals and then the in person meetings go more 
smoothly
    Again, I'd like to thank you Senators for allowing me the 
opportunity to speak to you about this important legislation. I 
personally and the ONRC, endorse reauthorization of the County Payments 
Legislation and the many benefits it can provide to wildlife habitat, 
watershed and ecosystem restoration and the public, as well as support 
to public schools and roads.
                                 ______
                                 
  Supplemental Testimony of Tim Lillebo before the Senate Energy and 
            Natural Resources Committee on February 8, 2005

    We previously understood that the County Payments Legislation was 
to be reauthorized with no real substantive changes. It appears that 
the important Pilot Project Requirement of section 204e has been 
deleted and replaced with a discretionary clause. This is a very 
substantial change and we are opposed to deletion of the Pilot Project 
Section. We would like to see the Bill reauthorized with the original 
language.
    The pilot Project Section required that 50% of merchantable 
material projects, namely timber sales, should have separate contracts 
for the logging and for the selling of the logs. This would separate 
the logs from the loggers, so to speak. This is an important model for 
public land forest management that should be implemer1tted and tested.
    The Government Accounting Office reported in 2003 that of the 1300 
hundred Title II Projects approved only 13 of those create merchantable 
material, and only 6 of those were expected under the Pilot Project and 
none of those 6 had been implemented at that time.
    There is no need to delete the Pilot Project section, as it has not 
even been implemented yet. Nothing is broken and nothing nods to be 
fixed. The Pilot Project is important and deserves to be tested under 
the same rules as the original legislation.

    Senator Craig. Tim, thank you very much. When we get to 
that phase of holding a hearing on reauthorization, we will 
want to make sure that we get your testimony on those specific 
areas in place for consideration.
    Mr. Lillebo. All right. Thank you.
    Senator Craig. The two-term consideration has already been 
taken care of in the draft.
    Mr. Lillebo. Okay, thank you. Appreciate that.
    Senator Craig. Reta, let us turn to you. Reta Griffith, 
Pocahontas County, West Virginia, County Commissioner. I think, 
Reta, you are sitting here thinking this is a Western piece of 
legislation. It is not, as you know.
    Ms. Griffith. I am the token easterner today?
    Senator Craig. No. You are more than that. But it is 
important because it is national in scope where there are 
forests and forest-dependent communities. Thanks for being 
here.

STATEMENT OF RETA GRIFFITH, COMMISSIONER, POCAHONTAS COUNTY, WV

    Ms. Griffith. Well, good morning and thank you for allowing 
me to be here. My name is Reta Griffith and I am a member of 
the Pocahontas County Commission in West Virginia, not too far 
away. We have a little bit of your snow. It is one of the 
largest counties in West Virginia with over 940 square miles, 
yet it has a very small population. We have just over 9,000 
residents in the last census. Over 53 percent of my county is 
in the Monongahela National Forest, so I do have things in 
common with Western States and Western counties.
    I am testifying today as the vice chair of the Federal Land 
Payments Subcommittee of the National Association of Counties. 
It is also my privilege to represent the County Commissioners' 
Association of West Virginia where members are elected county 
commissioners from all 55 of our counties in West Virginia.
    I would like to thank the subcommittee for scheduling this 
hearing on the implementation of the Secure Rural Schools and 
Community Self-Determination Act of 2000.
    Today I would just like to give you a snapshot of the way 
that title I and title III are being used to serve youth and 
more in my rural county in the Eastern United States.
    Unlike many of my other colleagues with NACo here today, 
county officials in West Virginia do not have the 
responsibility to maintain roads and bridges. So I do not have 
to bear that cross. Our State Department of Transportation does 
that job and they do that job very well.
    As a county commission, we did, however, recognize the 
value of choosing to participate in the Secure Rural Schools 
and Community Self-Determination Act for the benefit that would 
accrue to young people in my county. According to our local 
school superintendent, the $485,000 that my local school system 
receives under title I is equivalent to about 5 percent of 
their annual operating budget, and that is clearly a 
significant contribution to their overall.
    It is even more important when you consider the topography. 
My county is mountainous and like many of the other counties 
covered by this legislation, that adds to the cost of educating 
our students. For example, another county in West Virginia, 
Pleasants County, is a school system that has about the same 
number of students, but they have a much smaller geographical 
area to cover. Well, in Pleasants County, they only need 15 
school bus drivers, while in my county we have to have 24. 
Those nine additional drivers cost our school district nearly 
$350,000, not to mention the cost of purchasing and maintaining 
those additional buses. So this money helps to pay for those 
additional transportation costs so that we do not have to cut 
into our educational budget.
    Our superintendent also noted for me that despite the small 
population and the limited financial resources that we have, 
Pocahontas County schools have maintained an excellent record 
in student achievement, and in fact, in the 2002-03 school 
year, we were one of only 11 in counties in West Virginia that 
met all of the No Child Left Behind guidelines. So like many 
other counties in rural America, we know how to make our 
dollars count.
    The Pocahontas County Commission that I serve on voted 
unanimously to invest the remaining 15 percent of the 
stabilization funds in title III specifically to a project 
called Pocahontas Woods. Pocahontas Woods is a nonprofit 
corporation that was chartered to promote the creative and 
ecologically sound use and enjoyment and understanding of our 
forest resources in Pocahontas County and other surrounding 
areas. Pocahontas Woods is currently running an educational 
program that provides training for students and adults who are 
seeking to enhance their skills in the woodworking field as a 
means of helping to create a high-end woodworking industry in 
Pocahontas County or in our surrounding communities. We are 
hoping that this will provide an economic benefit then to the 
county as well with the value-added products.
    Pocahontas Woods is conducting woodworking classes with 
both students and adults and they do this on an ongoing basis. 
They have a temporary facility at our Pocahontas County High 
School. The classes are conducted immediately at the close of 
the school day, as well as in the evening, to ensure that 
everyone interested has an opportunity to attend. To date, we 
have had over 120 students who have attended one or more of 
these classes.
    We have also developed a formal apprenticeship program for 
prospective woodworkers. This is done during the summer school 
recess. This program places students with master woodworkers 
and gives them an in-depth orientation of the requirements of 
owning and operating a successful business. They conducted a 
pilot program of this apprenticeship program this past summer, 
and they are going to implement the full program this coming 
year in 2005.
    Pocahontas Woods is working on plans for a permanent 
educational facility that could be used more frequently and 
possibly as a business incubator for local woodworkers. It is 
also working to expand the scope of its activities to include 
other forest-related, out-of-school education programs, which 
may include lumber grading for the layman and short courses in 
forestry and wildlife biology.
    We have received valuable assistance from Oregon counties, 
also our local Forest Service. This has been to make sure that 
we are spending funds in compliance with the Federal law. The 
board of Pocahontas Woods, this private corporation, has 
members from the local school board, a county commissioner, the 
timber industry, and other residents in the community. It also 
includes a non-voting representative from the Forest Service. 
This group is working with Rockingham College in North Carolina 
to set up a program which would allow students coming out of 
our program to go into their 4-year degree and to continue 
their work in forestry related fields. We have provided for 
public comment on each year's allocation of funds and we have 
been collecting reports from our grantee on how those funds 
have been spent or are budgeted to be spent. We have very 
wonderful, open communication with the Pocahontas Woods group, 
and they consult with the county commission regularly to make 
sure that we are aware of what their program is working on and 
how the funds are being used.
    We are grateful for the resources which have been made 
available to us under title I and title III. We hope that you 
find that we have been very good stewards of the money and that 
we are achieving the purposes that you set out for us in the 
Secure Rural Schools and Community Self-Determination Act. 
Thank you.
    Senator Craig. Reta, thank you. It is exciting to hear 
about those new ideas. We here in Washington think we are all 
wise and all smart, and when we find out that it gets to the 
ground out there and every community or every locale is 
creative, looks at it from their perspective, what fits them, 
it makes a lot of sense. That is valuable testimony for us and 
we appreciate that.
    Now let me introduce Sherry Krulitz. Sherry and I share an 
interesting commonness. She is the county commissioner in 
Shoshone County in Idaho and both she and I have presided over 
or observed the absolute demise of a county over the last 2 
decades, her county, a county that was once a major employer 
both in the mining industry and the timber industry, extremely 
high paying jobs. The mining industry collapsed, the timber 
industry followed. And it is a county that has struggled to get 
back on its feet. It is doing so and doing so in an admirable 
way. But I must tell the committee--Sherry certainly knows--
that the last 2 decades in Shoshone County have been tough ones 
for the citizens of that county and certainly for the 
commissioners and the governance of that county.
    So, Sherry, we appreciate you being with us today and 
sharing with us your experiences and testimony. So please 
proceed. Thank you for being here.

STATEMENT OF SHERRY KRULITZ, COMMISSIONER, SHOSHONE COUNTY, ID, 
ON BEHALF OF THE NATIONAL ASSOCIATION OF COUNTIES AND THE IDAHO 
                    ASSOCIATION OF COUNTIES

    Ms. Krulitz. Thank you. Good morning, Mr. Chairman, Senator 
Wyden, and Senator Salazar. I am Sherry Krulitz, a Shoshone 
County commissioner from Shoshone County, Idaho. I am also 
testifying as the chair of Public Lands of the National 
Association of Counties. NACo is the only national association 
representing some 3,066 counties. It is also my privilege to 
represent the Idaho Association of Counties. We are made up of 
44 counties, and we represent all of those different counties. 
Each year IAC works with NACo to promote policies that help 
better serve our citizens.
    I thank the subcommittee for scheduling this hearing on the 
implementation of Public Law 106-393. We have for years called 
it in Idaho, the Craig-Wyden, and I imagine in Oregon it is the 
Wyden-Craig.
    As active management of the national forests declined in 
the late 1980's and through the 1990's, counties found that 
their 25 percent share of the forest receipts was an ever-
smaller piece of an ever-shrinking pie. In desperation, forest 
counties and school officials asked Congress to give us a 
safety net. We thank you, Mr. Chairman, and you, Senator Wyden, 
for crafting the solution in response to our request. In the 
years since the passage of Public Law 106-393, actual receipts 
have continued to fall, and as the recent Iron Honey sale 
decision by the Ninth Circuit illustrates, process gridlock and 
management by litigation continue to block active forest 
management. Without the Craig-Wyden safety net, we would be in 
big trouble.
    Today I will focus my remarks on how title I has worked for 
us and give some examples of how title II and III projects are 
being implemented.
    Shoshone County is located in Idaho's northern panhandle. 
We have 1.6 million acres, 75 percent of which are federally 
managed. Only 22 percent of the land in my county is in private 
hands. As commissioners, we have to pay for services to our 
13,000 residents and those who come to visit our beautiful part 
of the county. We do this with a severely restricted tax base, 
as Senator Craig mentioned earlier. For example, Shoshone 
County maintains about 400 miles of county roads. Many of these 
miles provide access to the national forests. Road maintenance 
costs are, for the most part, predictable but the revenue 
stream to pay for them has not been. In the years prior to the 
enactment of Public Law 106-393, the only thing predictable 
about our 25 percent payment was that it would be less than the 
year before.
    Title I of the legislation was designed to correct that, to 
stabilize payments to counties, to provide funding for schools 
and roads, and to supplement other available funds. And that is 
just what it has done. Shoshone County, like 85 percent of the 
eligible counties nationwide, has opted for the stable, 
guaranteed payment. With that payment, we have been able to 
begin to address our road maintenance backlog and to purchase 
much-needed equipment.
    Counties that chose to take the full payment under title I 
must dedicate 15 to 20 percent of the total to projects to be 
carried out under title II and title III. While it has taken 
some time, more and more counties every year are investing in 
title II projects or in a combination of title II and title 
III.
    In Shoshone County, we invested in title II from the outset 
and are very happy with the work that our local resource 
advisory committee is doing. In fact, from my perspective, the 
RAC has done more to bring all different players to the table 
than anything I have seen in my 17 years as a county 
commissioner. We have the Forest Service, labor, timber, county 
officials, school officials, recreation, and tribal 
representatives all working together to make things happen.
    I have brought with me a graph that shows the percentages 
of where the RAC dollars in the Idaho panhandle have been spent 
for the years 2002 through 2005. I would ask that this graph 
also be included in my testimony.*
---------------------------------------------------------------------------
    * The graph has been retained in subcommittee files.
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    Senator Craig. It will be. Thank you.
    Ms. Krulitz. In our county, as Senator Craig knows, we also 
have an organization called the Pulaski Project. It is named in 
honor of the hero of the Big Blowup of 1910, Forest Ranger Ed 
Pulaski. It aims to educate the public about wildfires, fire 
fighting and fire protection; educate the public about forest 
management theories and practices; recognize wildland fire 
fighters; and develop an educational experience and a 
recreational opportunity.
    To date, the project has been able to use money from title 
III, other U.S. Forest Service funds made available by 
congressional appropriation, and a small grant from the Idaho 
Community Foundation to develop the Pulaski mine and trail head 
for educational, historical, and recreational purposes. The 
project also reaches out to public school students in the 
communities of Shoshone County and the surrounding area.
    Mr. Chairman, the National Association of Counties and the 
Idaho Association of Counties believe that Public Law 106-393, 
the Craig-Wyden, is being implemented across the country and 
across Idaho in accordance with your original intent. County 
road and school budgets are undoubtedly more secure and, 
perhaps more importantly, Americans in rural forest communities 
are reconnecting to the national forest lands and have a new 
growing sense of hope and self-determination.
    Thank you.
    Senator Craig. Sherry, thank you very much for that 
testimony.
    Again, let me thank you all for joining us. Jim, we 
appreciate your testimony. I think Trinity County under your 
leadership--and I say that because you were instrumental in 
bringing one of the first resource advisory committees on 
stream with you insistence and urging. I want to thank you for 
that effort.
    I am wondering if you can give me a few examples of the 
title II projects that you are most proud of and a few examples 
of the ones that were most difficult to get approved by the 
RAC, and finally, a few that the RAC did not approve and why. 
In your estimation, why did they not reach consensus.
    Mr. French. Thank you, Senator.
    Well, I would say our fuels projects because they are based 
on a strategy that is tied to our Trinity County Fire Safe 
Council. I am extremely proud of that because it identifies a 
strategy.
    I would also say those two where I show you the timber I am 
probably proud of because I did want to demonstrate that a 
group of people with disparate views could get together and 
agree upon appropriate harvest. So I guess I am pretty proud of 
those.
    The one down at the bottom of the page of the list I gave 
you called Natural Bridge I am particularly proud of. Natural 
Bridge is a beautiful geologic bridge structure, but it was 
also the 1850 site of slaughter of American Indians, women and 
children. It has been a place where folks have partied. It has 
been a place where rock climbers have driven pitons into the 
rock, and it has really just been kind of set aside. It has 
become an area that we are working on. We are trying to turn it 
into a more sacred site. We have got the climbing community to 
agree to stop driving pitons in the rock. We will be putting up 
appropriate signage so young people, if they want to go off and 
raise cane in the woods, can do it somewhere else. The Norelma 
consider the place their church. So working with our Indian 
community has been pretty gratifying through the RAC process.
    The most contentious by far is when you have a group that 
has industry as well as environmental groups to agree to 
decommission a road. I would say those were probably the most 
contentious. But we finally came to agreement because they were 
in areas where it was critical. The south fork of the Trinity 
River has lots of decomposed granite, and we were able to 
inventory some roads that were not of any value to anyone. But 
I would say just the notion of decommissioning was tough for 
some of our RAC members.
    One that was not funded, Pikes Garden, which was another 
sacred Indian site that happened to be on private ground that 
was adjacent to Federal ground. I was very hopeful that we were 
able to, for another tribe in our county, a federally 
unrecognized tribe--I was very hopeful to have that restoration 
project funded, and because of the private ownership actually 
by a large timber producer, we were not able to get that 
through the RAC. So I suppose that would be the example of the 
one that got away that I was certainly hoping personally that 
we would be able to fund.
    Thank you, sir.
    Senator Craig. Thank you.
    Dr. Creal, I know that you were recruited to serve on the 
County Schools Long-term Committee and you may have been the 
only nongovernmental member that was not involved in getting 
the bill passed in 2000. That probably gives you a perspective 
that others might not have as it relates to how you see this 
piece of legislation functioning.
    Having read your testimony and checked the date, I noted 
that none of the six counties in the Black Hills National 
Forest have opted to accept title II funding. Can you give us 
insight as to why and any suggestions you might have to help 
those counties opt for some of the title II funding?
    Dr. Creal. Well, my own county, Custer County--I just 
received a call 7, 8, maybe 10 days ago that they are now 
pursuing the RAC. They are developing a resource advisory 
committee. I have been in conversation with them over the past 
year and a half about that, just requesting that they make an 
informed decision about whether to develop a RAC or not. So 
they will be looking into that.
    I have attended some of the RAC meetings in Crook County 
which is on the Wyoming side. I have attended some of those 
resource advisory committee meetings just to get a feel for how 
they work.
    Our committee recommended that additional incentives, 
possible funding we felt would help encourage some to develop 
those resource advisory committees. We know that money is a 
powerful reason to make some decisions. That was one of our 
recommendations.
    Senator Craig. For sake of time, I will come back to both 
you, Tim and Reta, but let me get to Sherry. Again, thank you 
so much for being with us this morning.
    Understanding I think the importance of the payments to the 
counties received in this legislation, do you have any thoughts 
as to how this legislation might be utilized to encourage the 
development of additional economic activities to help support 
the uniqueness of these rural counties?
    Ms. Krulitz. Mr. Chairman and Senators, in my county, I 
mentioned earlier, we have 400 miles of county road. Prior to 
this legislation, we did well to be able to plow snow and fill 
the potholes. With this legislation, we have now put a 2-inch 
overlay over about 25 miles, and we have chip-coated probably 
50 miles with this legislation. Our roads, our infrastructure 
were in place.
    We have a rails to trails that is a 72-mile trail from 
Mullan to Harrison, the Trail of the Hiawatha, which, Senator, 
you helped so much with the funding of that. We have got 
recreation in place. We have two beautiful ski hills. So we are 
turning more to recreation, but the recreation jobs do not pay 
what mining and timber paid. They do not put your kids through 
school. They will give your kids jobs to help put themselves 
through school, if they are fortunate enough. But we are 
maintaining.
    It is more difficult for us to find the new industry. I-90 
goes through our county, so that is a big plus for us. I think 
just having everything in place, we have got everything, the 
power that was left when Bunker Hill closed. You mentioned what 
happened in the early 1980's. We are ready for new industry. It 
is just finding people. If it is timber-related--I mentioned 
the Iron Honey. We are having a problem. We thought it was a 
great stewardship contract, but the Ninth Circuit disagreed in 
their opinion, again final last week.
    Senator Craig. Thank you very much. Let me turn to my 
colleague, Senator Wyden.
    Senator Wyden. All of you have been excellent. We thank you 
for your support. Of course, as you heard me say earlier, we 
are going to need it now more than ever because of the budget 
picture that is so much different now than it was back in the 
days when we got this authorized the first time and there was a 
surplus.
    The only question that I had is we have primarily been 
talking, particularly with the resource advisory councils, 
about the better cooperation we are seeing with the 
environmental community and the industry and the whole cross 
section of stakeholders.
    What we have not really covered is whether the resource 
advisory committees and the communications going on have 
changed some of the attitudes toward the natural resources 
agencies, particularly the Forest Service and the BLM in the 
area. What we are hoping, of course, is that some of the 
cooperation through the RAC's will start rippling over to the 
agencies as well. I am curious whether any of you would want to 
take a crack at whether the RAC's have also had some beneficial 
aspects in terms of generating more cooperation with the 
agencies.
    Mr. French. Sir, I would have to say yes. It is one thing 
being on an advisory council. It is another thing being on an 
advisory council with a checkbook. I think we have meaningful 
participation, and I think that the Forest Service needs us to 
help them with their work. It is one of the vehicles for 
getting work done. On one of our ranger districts, RAC projects 
are the only fuels reductions projects in that district. So it 
is a critical relationship, marriage, a date, whatever you want 
to call it.
    Senator Wyden. Does anybody else want to take a crack at 
that?
    Ms. Krulitz. Senator, I would like to mention also. We 
budget $1 million a year. Of that, my county only has 13,000 
people, but $600,000 of that $1 million comes from my county. 
Maybe we are small in numbers, but when you bring $600,000 to 
the table and you are spending it in region 1, you do get 
attention.
    It is also putting kids to work. Every one of our five 
northern counties has a RAC crew made up of college kids who 
are out there doing trail restoration.
    It is bringing light to people that did not realize what is 
out there and available through I guess an agency or a RAC, 
whatever we want to call it, a contingent group, that you would 
not have had the players at the table. They are focusing on 
good things, and I think a lot of them are leaving their 
baggage at the door when they come into those meetings to focus 
on some good things. And they are doing that in the Idaho 
panhandle.
    Senator Wyden. Dr. Creal, do you want to take a crack at 
that? I did not want to cut you off there.
    Dr. Creal. Yes, Senator. I just want to mention that the 
committee held a listening session in Portland, Oregon, and 
both the Federal representatives and the county people and any 
other citizens there all expressed that they felt that things 
were going well with the RAC process, and collaboration and a 
better understanding between all the groups was evident.
    Senator Wyden. Tim, anything else?
    Mr. Lillebo. I was just thinking on a couple of our RAC's, 
the Forest Service does listen very carefully and it seems like 
they may have left some of their baggage too behind, as well as 
the people that are on the committee itself coming and leaving 
some of their baggage behind. And we have been able to come up 
with some projects and even modify some proposed projects. So I 
think they are listening.
    I was very interested in the idea of maybe taking a portion 
of certain national forest budgets. That might even have them 
listen more and the public even get more involved if you have a 
little bit more to work with.
    Senator Craig. You did catch the essence of that question.
    Mr. Lillebo. I think I got most of it.
    [Laughter.]
    Senator Wyden. The only other thing I want to do is just 
say thank you for hanging in there with us. Especially Chairman 
Craig has heard this. It was not a lot of fun at the beginning 
when I had all those picketers and ads and Ron Wyden, you know, 
is decimating the public forests because he was working with 
Chairman Craig and the like. You all hung in with us. You 
bucked us up and made it clear that we were going to try to 
take a balanced approach and, heaven forbid, try something that 
had not been done and that was give people some incentives for 
working together. Literally, as I said to the last panel--maybe 
some of you were here--this seems to be just about the only 
area of forest policy that has not become a litigation derby. 
And to think that you can tell us several years into the 
implementation of the act that there has not been an appeal 
anywhere in the United States is really a tribute to the kind 
of good work that you are doing.
    I am going to have to duck out. I just want to say, Mr. 
Chairman, how pleased I am that Senator Salazar is here. I 
think he is going to be a real voice for the kind of natural 
resources policies that we are talking about, which is to try 
to bring people together rather than figure out ways to drive 
them into opposite camps. So I look forward to working very 
closely with him and glad he is here.
    Mr. Lillebo. Senators, may I say one more thing? I just 
really did want to again thank all of you. It has made a huge 
difference in Oregon as far as how the natural resources, the 
fish, the wildlife have been treated. It also made a huge 
difference to school kids. So I really wanted to thank you for 
that. And in the bipartisan spirit, please send us some snow.
    [Laughter.]
    Senator Craig. Ron, thank you.
    Let me turn to Senator Salazar. Ken.
    Senator Salazar. Senator Craig and Senator Wyden and 
members of our witness table, this is, I think, a great program 
because it is good for our kids and education, it is good for 
our natural resources and our environment, and also very good 
for our economy. So I applaud all of you who have worked on 
this law and applaud the leadership of the chairman and the 
leadership of Senator Wyden as well.
    I have just a general question. It is grounded in my 
background. I come from a county that is the poorest county in 
the United States of America today in the very southern part of 
Colorado. Much of our land in Conejos County is actually in 
either Forest Service or BLM hands. Part of what we have 
struggled with over many years in Colorado is the disparity 
that exists between those school districts that are in counties 
where you have high property tax rolls and in those counties 
that do not. You see that, I am sure, across the entire United 
States of America. We have schools in my State of Colorado that 
have great swimming pools and great gymnasiums and pay their 
teachers a lot more than the counties that come from places 
where we have a very low property tax base. So it has been a 
matter of litigation over the last several decades and a matter 
of some settlements as well that have occurred over the last 
several years to try to deal with that disparity.
    I guess my question to you, Mr. French and Dr. Creal, would 
be this. Do you have ideas in terms of how we might be able to 
address that disparity between the high wealth school districts 
and counties and the low wealth school districts? And also, 
specifically, how do we do a better job in terms of paying our 
teachers in some of these rural counties like my native county 
in Colorado?
    Mr. French. Well, I would say the forest reserve does that 
in part, but being in an area where there is declining 
enrollment, if you have had 24 kids in a classroom and you lose 
4, you still have to provide a quality program for the 20. So 
when people tell me, oh, fewer kids, well, then you should get 
fewer dollars, well, it does not work that way. I do not get to 
lay off 10 or 15 percent of a teacher.
    I hope the Federal Government, with their heavy involvement 
in education in the last 10 years--I might sound critical, but 
when I went to school, I was taught that the States had the 
responsibility for education, and the Federal Government 
certainly has weighed in heavily. So I just think they are 
going to have to fund more. They continue to give us mandates 
with minimal funding. If they are going to step up to the table 
as they have, I just think they have to fund more. I could go 
on and talk about title I, what is happening in my county. I am 
losing title I dollars at a time when the requirements are 
ratcheted up 100 or 200 percent.
    But I am very concerned about being able to provide quality 
salaries to teachers where there is declining enrollment 
because that teacher that had 24, there is more expected of her 
today than 2 days ago, but we only have the dollars from 16 or 
17 kids to be able to provide the salary.
    Senator Salazar. Just a comment on that. I know many school 
teachers in Conejos County, but I know that we cannot afford to 
pay them a very high wage there. When you look at what is taken 
out of their paychecks at the end of every month for health 
care, many of them do not have enough money, frankly, to have a 
living wage, even in circumstances where you have both members 
of the same family who are teachers. So, we have some huge 
educational challenges all across America, but I think 
specifically in our rural communities, and a lot of it has to 
do with teachers.
    Dr. Creal. I would certainly echo most of what Mr. French 
had to say. I would like to add a couple things. One is that I 
know around the country there are a lot of adequacy lawsuits in 
the States about the lack of adequate funding for education 
provided by the State. Many of those have been successful. Some 
are still in litigation. Some States are just starting that 
process.
    But as a school district who just lost 50 kids from last 
year to this year out of a 1,000-student population, that is 
significant, about a $200,000 to $240,000 drop in funding. The 
proposal coming from South Dakota's Governor will not come 
anywhere close to covering that. We are faced with many of the 
same issues, and our teacher salaries, though on average on the 
very face of it look adequate, are not. We are constantly faced 
with young people unable to move into our community because of 
the price of housing. They cannot make an affordable wage 
working for the school system to live in the community. So more 
are driving in from outside areas.
    Senator Salazar. Dr. Creal, your district lost 50 students. 
What is happening as you have this exodus of young people from 
your school district? What is luring them away or what is not 
there to keep them there?
    Dr. Creal. The two biggest factors we found are the parents 
moving out of the community, either out of State or the other 
side of the State. It had nothing to do with our education. Or 
children going from one parent to another parent in a divorce 
situation where they were already divorced or separated or 
whatever. Those are the two biggest issues. We are not losing 
students because of our educational system. Everyone says we 
have a quality education system in Custer.
    Senator Salazar. Thank you.
    Senator Craig. Ken, thank you very much for those 
questions.
    Tim, let me come back to you. I must tell you that I am 
amazed and very pleased at your testimony. You described I 
think the exact dynamic that Senator Wyden and I had hoped for, 
in part, in crafting this legislation, communities coming 
together to work with Federal land managers, to undertake 
projects that could gain public support, and to begin to heal 
wounds that had been, for decades, constantly made raw in 
especially our public land resource counties.
    I am pleased that you serve not on one but two RAC's. That 
is a brave undertaking.
    Mr. Lillebo. It is a challenge.
    Senator Craig. And you could survive to come back here and 
testify.
    Understanding your concern that all parts of the community 
be included in the RAC process, I am wondering if you might 
have a suggestion for dealing with some of the RAC positions 
that do not fit local situations, like a wild horse or a burro 
person in Michigan or Mississippi. Is there some streamlining 
or broadening of the RAC member description that would aid in 
the implementation of the law more effectively?
    Mr. Lillebo. It is interesting you bring up the wild horse 
and burro representative. That is on the conservation or 
environmental group that is one of the three. In Coos Bay, for 
example, they had a county commissioner that went on the 
environmental of conservation committee that was for the wild 
horse and burro position, which is interesting because there 
really are not any wild horses or burros. There are some 
domestic burros, but not any wild ones within 200-150 miles of 
Coos Bay. So you are right there.
    I guess what I would like to suggest is that if you have--
at least for the interests that I have been working with, the 
conservation orientation, you would have a various number of 
groups that can at least look at the makeup of a RAC and make 
sure that they felt comfortable that their representatives were 
there. It would be the same for a timber industry or mining or 
school districts or county elected officials, that they would 
have some kind of a little process to review that so maybe you 
would not end up with three paid environmentalists on the 
industry or business committee. So I do not think that has 
happened yet. But anyway, I am just saying that is how you 
could avoid it because we have felt that it has happened that 
maybe we did not get the conservation community represented on 
that conservation committee. So maybe a process there.
    I really think it is important to maintain the committees 
as they are and the structure, as I said, since if three of the 
five members do not want something to go through, you can 
actually block it. But what it means is all the committees 
have, so you do not get rolled, and we have not had to have 
people stop and filibuster or try to stop the whole thing. So I 
think it is important to keep that structure, but then maybe a 
review system of some kind.
    Do you have any ideas on that?
    Senator Craig. What you are suggesting is what we are 
looking at. We do not want to, in any way, destroy the balance 
that has worked and is working well, but we also are trying to 
say, under certain circumstances, how does it fit the 
communities of interest better in those locales so that, in 
fact, you get the representation you think you need without 
disturbing the balance.
    Mr. Lillebo. Right, because the balance I say in the Coos 
Bay example--some of the conservation folks were saying, well, 
wait a minute. Now we have two county commissioners on our 
conservation committee, plus they have the whole other group of 
elected officials. So somehow to review that.
    Senator Craig. Okay.
    Reta, as I had mentioned with your testimony, I think your 
county utilized title III funds in a way that I do not think 
any of us could have envisioned when we worked to pass this 
legislation in 2000. I have to congratulate your county for its 
innovative approaches. I think that is the kind of creativity 
you hope can be spawned by this kind of resource and this kind 
of local decisionmaking or participation as it relates to 
improving.
    In implementing the Secure Rural Schools and Community 
Self-Determination Act, was there information or a process that 
could be improved upon from your observation?
    Ms. Griffith. It was actually very interesting. We had a 
wonderful relationship with our Forest Service representative 
to begin with. In fact, that is how this entire program was 
brought to the county's attention. We had a forest ranger for 
the forest there in Marlinton. She was extremely active in our 
community and actually had participated in our local economic 
development authority as a non-voting member, more as an 
advisor. But she found this opportunity. She saw that we had 
this project kind of shelved for the last 20 years, going this 
is a really great idea, how can we do a value-added timber 
product that encourages local crafts or crafting, making their 
own furniture. We have excellent hardwood resources, but we are 
sending it all out overseas or out of State, wholesale 
products. We are not really adding any value to it. We are just 
letting it go. She saw this opportunity.
    Our county receives less than $100,000, which is why we do 
not participate in a RAC because we did not really see the need 
to put that committee together. I wanted to get that in there.
    Senator Craig. I was going to say----
    Ms. Griffith. Right. That is why.
    Senator Craig. Now, my next question is going to be, what 
does it take for your county to get into a RAC. More money?
    Ms. Griffith. Well, it would take significantly more money 
because we have less than $100,000 in our 15 percent. It is 
about $97,000. We put all of that into that one project, and we 
saw the opportunity to help start the after-school forestry 
section of title III which enabled us to teach those classes 
and then to use this program of teaching those classes and the 
education component, working with our school system and working 
with the local timber industry to find out what are some skills 
we can teach that help you but also that help encourage--we 
have had decreased numbers of sales too, not near as bad as the 
West has had, but they are continually going down in the amount 
of sales that we can do both on public land and on private 
land. So we needed to figure out a way to add some value and to 
retain some of those jobs, encourage entrepreneurs to kind of 
branch out on their own.
    We are hoping 1 day that Pocahontas Woods can help provide 
a cooperative to help those local crafters be in business for 
themselves, market their products. Again, like Ms. Krulitz' 
county, as we have shifted from the timber industry, we have 
gone into recreation, and that has been very wonderful. We see 
that as a potential market for a value-added product.
    Senator Craig. Well, I thank you all very much for your 
time here, but more importantly, I thank you for making this 
law successful. That is what allows us to come back with your 
testimony and the strength of your testimony as we move for 
reauthorization of this legislation. I would encourage all of 
you and your groups or your organizations and associations to 
stay actively involved. As Senator Wyden mentioned in his 
comments, this is going to be a fairly high hurdle to get 
across. In a time of substantial deficit and in a time when all 
of us sense the need to belt-tighten, there are choices to be 
made. Those choices, in part, will be made on the success of 
the stories told to all of us and to the administration. And I 
think we have a good one here that addresses a variety of 
issues from county resources and infrastructure, as so many of 
you have successfully pointed out, to the collaborative process 
that we are growing into and, I hope, growing up in again as it 
relates to our public land resources and their management that 
bring us to productive ends instead of, if you will, warring 
ends and wasted resource in the process of both human time and 
dollars and a lot of other things.
    So I believe that is story that is being told today and you 
are helping us do it. Stay active and stay involved. As we work 
through this, we will need your help to succeed in getting this 
reauthorized and funded as we move forward. I think it is, 
again, a success story that will catch the attention of all of 
the interested parties and help us get it reauthorized and get 
it funded.
    So, again, thank you for your time and your commitment to 
it. We appreciate it.
    The committee will stand adjourned.

    [The following statement was received for the record.]

     Statement of Ed Wehrheim, Chairman, Catron County Commission, 
                           Catron County, NM

                              INTRODUCTION

    The Catron County Commission thanks you for the opportunity to 
present supplemental testimony on review of P.L. 106-393, Secure Rural 
Schools and Community Self-Determination Act of 2000. We also 
appreciate the leadership of the Subcommittee in this critical 
transition toward a more effective management of our national forests, 
especially given the looming threat of catastrophic wildfires in our 
forests.
    Catron County, located in western New Mexico, is rural with large 
tracts of open lands and a few small communities. Cattle ranching 
continues to be the largest private economic sector, and the only base 
industry in the county. However, recent population changes have moved 
Catron County from a fully rural, commodity production orientation 
(ranching and timber harvest) toward a more service-based economy 
supporting an influx of retirees to subdivisions, attracted by low 
property taxes. According to Census data, Catron County's population 
increased by almost 12% from 1990 to 1999; most of the increase 
occurring in the last 5 years. The current estimated population for the 
county is 3,415 (U.S. Census, 2003).
    The large amount of government land (3.3 million acres, or 
approximately 75% of the 7000 square mile county) limits the property 
tax base and community expansion, affects potential economic 
development and affects land use patterns. Closure of the County's only 
commercial sawmill in the early 1990's adversely affected community and 
county economics. Conflicts surrounding the management of public lands 
have increased over the past decade as other interests, largely from 
outside the county, have influenced the management of these lands. 
Since a high percentage of income for residents of Catron County has 
been from the timber industry, the reduction of income derived from 
wood products from public forests in the past 15 years has taken a 
severe toll on the County's economy.

     CATRON COUNTY COMMISSION'S USE OF THE SECURE RURAL SCHOOLS ACT

    Catron County has elected to receive funding from the Secure Rural 
Schools Act every year since 2000. For the first three years, a 
percentage of the payment was set aside for Title II projects only. The 
fourth year a percentage was set aside and divided between Title II and 
Title III. In 2005, 100% was set aside for Title III, primarily for 
planning, as it became clear that for an on-the-ground project to be 
successful in an area as large as Catron County, more coordination and 
planning than the Resource Advisory Committee (RAC) could provide would 
be necessary.

Title I
    Approximately $300,000 annually is generated in Catron County from 
Secure Rural Schools Act funding. Title I funding has been used to 
support our local schools and for maintaining the county road system of 
approximately 950 miles of roads. This includes over 350 miles of roads 
accepted by Catron County from the USFS in April 2002 that the USFS had 
anticipated having to close because they could no longer maintain them.

Title II
    Establishing a RAC and getting it running was a slow process with a 
number of obstacles. Member selection was difficult and members did not 
always see eye to eye on what should be funded. Additionally, the 
County and the Gila National Forest Supervisor did not agree on how the 
RAC process should be implemented. Nevertheless, eventually the group 
established guidelines to rate the various proposals, using the 
following factors: Jobs created, impact on local school population, on-
the-ground impact, funding availability from another source, and would 
the project produce positive results.
    Title II funds were used for a small forest health project; a river 
vegetative planting project; a rangeland improvement project; well 
development at a county owned sawmill which has been retrofitted to 
handle small diameter wood products and development of a forest wood 
product yard; removal and reduction of hazardous fuels from rights of 
way at a number of subdivisions; and creation of an emergency escape 
zone for a subdivision.

Title III
    The Catron County Commission elected Title III for the first time 
in 2003. Under Category Five, the County government formulated and 
implemented the Catron County Commission Forest and Rangeland Health 
Program for the purposes of utilizing an integrated planning approach 
for both forest and rangeland health, and for stabilizing and fostering 
the County's economic base.
    The County Commission recognized that wildfire protection is only a 
symptom of the health of the forest (watershed and water quality, 
wildlife/endangered species, timber stands and grass rangelands and 
related economic prosperity). Hence, the County used Title III funds to 
develop the County Commission Forest and Rangeland Health Program to 
include inter-university technical and planning support from New Mexico 
State University Range Improvement Task Force, Northern Arizona 
University Forestry School and Western New Mexico University, with WNMU 
coordinating the overall program under Title III. The program also 
included the funding of a Catron County Wildfire Protection Coordinator 
to coordinate wildfire protection planning and implementation for 
Catron County, and established Catron County Community Wildfire 
Protection Planning per the Healthy Forestry Restoration Act that has 
resulted in a collaborative intergovernmental planning approach to 
wildfire protection.
    The Catron County Commission also developed and was awarded a 
Collaborative Forest Restoration Program grant, a collaborative Forest 
Service/County restoration initiative that effectively removed small 
diameter materials from the Sheep Basin restoration project, supplying 
wood products to the Catron County Citizen's Group Reserve Mill, 
generating 10-15 jobs for 3 years and bringing in $360,000 to the 
County. This project is a model approach to multi-party monitoring that 
includes environmental communities as well as the participating 
universities, and local communities.
    In addition, the Catron County Commission Forest and Rangeland 
Health Program assisted the County's Range & Livestock Committee in 
developing a Land Stewardship Contract with the Glenwood Ranger 
District, with the goals of increasing forage production for grazing 
allottees, identifying job potential and incubating fuel wood 
enterprises. This project has identified over 3,000 acres for treatment 
and is in the process of clearance procedures for treating 300 acres.
    The Catron County Commission Forest and Rangeland Health Program 
was instrumental in improving rangeland and livestock stability in the 
Roberts Park range and grazing proposal as a Cooperating Agency in the 
NEPA process. This Forest Service, County, university collaborative 
effort has resulted in increasing grazing carrying capacity, while at 
the same time increasing wildlife and watershed health.
    Also, the County used Title III planning to develop a Forest Health 
Demonstration Project for the San Francisco Watershed, involving 14 
agencies and non-government collaborative partners with Northern 
Arizona University Forestry School facilitating under lead of the San 
Francisco Soil & Water Conservation District. At this time the project 
is conducting inventory data analysis.
    Title III funding also helped develop the Reserve High School 
Biomass Plant grant which was awarded to the Reserve High School to 
develop a feasibility study for a woody biomass heating system which 
could include county buildings in the future.
    Finally, Title III helped the Catron County Commission document and 
provide testimony to the U.S. House Subcommittee on Forest Health on 
recommendations for improving forest and rangeland health through 
intergovernmental coordination.

                            LESSONS LEARNED

    Due to the nature of the Act, as well as the changing conditions of 
our forests, the Catron County Commission has considered the 
implementation of the Act as a process of ``learning by doing''. 
Resource Managers have coined the term Adaptive Management to 
accomplish the same principle.

Title II Lessons Learned: Issues and Recommendations for Local RAC 
        Members and Voting:
    Local RAC Members: Some of the earliest lessons learned, with 
respect to Title II implementation, involved how the RAC itself would 
function. As Catron County's RAC is the only one in the state of New 
Mexico, we had no other RAC to compare ourselves to. Interpretation of 
the implementation and the functioning of the RAC was solely determined 
by the Gila National Forest Supervisor, who took firm control over 
choosing RAC members, and who chose to run the RAC meetings while 
retaining full veto power over RAC decisions. Unfortunately, this 
resulted in a number of non-local RAC appointees forced on the County 
RAC in spite of available qualified local residents, and over the 
objections of the Catron County Commission. This was important for two 
reasons: a) the way the voting system was set up, three members in any 
RAC subgroup could effectively have veto power over the fifteen member 
RAC and over any RAC decision, therefore rendering the notion of 
cooperation and collaboration meaningless; and b) local residents have 
to live with the social, political and physical consequences of 
implementation of projects, thus encouraging a commitment to the on-
the-ground work.
    The Catron County Commission recommends that the Congress require 
the Forest Service to comply with Congressional intent in ensuring that 
local RAC members are considered and appointed, first, and that the 
Forest Service is encouraged to work with local governments as full 
partners in the RAC member selection process. Also, the County 
recommends that the Senate provide oversight and monitor local RAC's 
and projects and encourage local constituency access and input to this 
oversight for the Senate Committee, thus forestalling outside pressures 
to ignore the Act's requirement to appoint locally qualified RAC 
members.
    RAC Voting: The County recommends revision of the RAC voting 
structure that currently prescribes that just three RAC members in any 
one subgroup, can halt projects on-the-ground. It also undermines and 
discourages the majority, the remaining thirteen RAC members, limiting 
or thwarting the majority preferences. The County recommends guidelines 
for voting and other RAC functioning. Our American political 
accountability is based on majority vote, not the current RAC voting 
structure that undermines this democratic process. We strongly 
encourage your attention on this contrived RAC voting structure.
    County-RAC Supporting Role by the Forest Service: Catron County 
Commission also recommends that Congress clarify and instruct the 
related federal land agencies (USFS and BLM) that they are to support 
the RAC and support the County government/RAC capacity building and 
collaboration. In Catron County, it appeared that the Forest Service 
did not understand the Congressional intent of the Act: To ensure that 
the County government is involved as full partners with the RAC, and to 
ensure that the Forest Service understands that it is to support the 
RAC and County government in a collaborative planning process--not get 
in between collaboration between the RAC and the County government. A 
good model for the Forest service is the working relationship between 
local conservation districts and the Natural Resource Conservation 
Service, which provides decision support for all the conservation 
districts in the U.S.

Title III Lessons Learned: Issues and Recommendations: Inter-Title 
        Coordination, Senate Guidance:
    Coordination between Title II and III: Other lessons learned 
involved the realization that some mechanism for coordination and 
accountability between Title II and Title III projects is necessary. 
Our experience raises the following questions: What good is having 
planning if the RAC isn't interested in working with that planning? 
What good are projects on-the-ground if they do not share objectives 
and goals? Catron County looks at Title II as more for doing the work, 
directly boosting the economy while achieving forest restoration, while 
Title III is for planning, about the future. They can and should work 
together. With emphasis on on-the-ground projects we discovered that we 
have no place to put the hazardous fuels and other biomass removed from 
the woods. In order to deal with the mass of wood products coming from 
the forest, we need retooling and reeducating for small diameter 
forestry, we need new marketing strategies, we need coordination of 
supply to fulfill a demand we have not yet developed.
    We discovered this through the Catron County RAC experience, which 
led to the County Commission shifting to Title III planning. While a 
RAC might well be able to perform the coordination and accountability 
required, our experience has been that volunteers--especially as in 
Catron County, where RAC members might have to drive for several hours 
to get to RAC meetings--cannot be expected to sacrifice the amount of 
time for the necessary planning, because that planning and coordination 
calls for full time input to work with county government, federal 
agencies and private entities, and to not only to coordinate and 
oversee today's projects, but to plan for tomorrow's.
    Title III Category Five Planning: We understand that some counties 
in the West have used Title III funds, as Catron County has, for fuels 
assessments and/or data collection (GIS) for Community Wildfire 
Protection Plans (CWPPs). This use of Title III funding is the ideal 
mechanism for coordinating and overseeing Title II funded on-the-ground 
projects, especially with respect to implementation of CWPPs. We 
recommend that Title III guidelines support the continued use of Title 
III for this purpose. We also encourage that the guidelines encourage 
adaptive planning and management natural resource planning, including 
the flexibility and latitude for County government.
    Congressional Clarification and Guidance for Title III Category 
Six: This leads to the final point, which is that while guidance for 
implementation of Title II was available, implementation of Title III 
was more general. When Catron County began to set aside funding for 
Title III projects, there was no way to know if we were doing what the 
act intended since the parameters for Title III, Category Six was fully 
unknown. Catron County used the ``Red Test'', developed by O&C 
counties, as a brain trust for this act. However that test was 
developed as an untested prescription and it was developed before we 
got involved in learning by doing. In addition, the Red Test was not 
developed for the specific circumstances and needs of the southwestern 
pine forests. Thus, not only did we have to spend resources on 
interpretation of that aspect of the Act, but we also found that there 
was no way we could know how effective our use of Title III funding 
would be with nothing suitable for us to measure against.
    Our recommendation is that Title III guidelines for Category Six be 
more fully developed to emphasize flexibility at the local level, and 
to include guidelines for local monitoring of the effectiveness of 
Title III projects, emphasizing the interrelationship of Title III 
planning and Title II projects.

                               CONCLUSION

    Category Five of Title III was written as a general statement of 
use for local planning. This has allowed for an unparalleled 
flexibility in local planning and we specifically encourage this 
continued application and use of funds for planning. Category Five of 
Title III in essence sums up the vision and the objectives of the 
Secure Rural Schools Act: To not expect that throwing money at problems 
will bring about viable solutions, to trust that those who are most 
affected by solutions have the knowledge to find the best solutions, 
and, in investing in public lands, to improve cooperation between 
government land management agencies, local government and the public 
through meaningful collaborative efforts that are developed and 
implemented locally.
    The Catron County Commission has committed to revising its 
Comprehensive Land Plan, focusing on more effective resource management 
and management planning. Through Title III funding, the County has 
initiated this planning process by establishing planning committees for 
range/livestock, forest/timber, water/watershed, tourism/recreation and 
related business spin-offs. In a month, the County will facilitate a 
workshop with these standing committees to develop the scope of work 
for revising and developing the Catron County Plan, for healthy forests 
and rangelands and for economic stability and growth. The revised 
comprehensive County plan will update the county resource-dependent 
economics and future direction, incorporate the Community Wildfire 
Protection Plan, create watershed and water chapters, and address other 
related resource and environmental priorities. The support of the 
Secure Rural Schools Act for this process is key.
    We need to change the way we deal with public lands issues and 
forest health. The Secure Rural Schools Act provides the impetus for 
making these changes. Managing public land with an aim to restoring and 
maintaining healthy forests and rangelands must be the priority 
mission, with full consideration for local needs and an emphasis on 
local solutions through ground-up, true collaborative effort. That 
collaborative effort must engage all human resources--from local to 
Congressional--in order to expedite the restoration and maintenance of 
forest, woodlands, grasslands and watershed health.
    Here in Catron County we are demonstrating that a solution for 
forest and rangeland health is achievable. We have the vision and the 
drive to succeed, to forge into new frontiers. We are, on the local 
level, implementing the very changes we are recommending to the Senate 
Committee. We are asking the Senate Subcommittee on Public Lands and 
Forests to come with us by providing the leadership in continuing to 
improve the implementation of the Act.
    It is the Catron County Commission's sincere hope that Congress 
sees fit to renew the Secure Rural Schools Act. We thank you for this 
opportunity to provide you with our experiences with this Program.

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