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[Senate Hearing 107-756]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 107-756
 
                           STEEN MOUNTAIN ACT
=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON PUBLIC LANDS AND FORESTS

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

 TO EXPLORE THE RELATIONSHIP BETWEEN HOW PUBLIC LANDS ARE MANAGED AND 
   THE IMPACT ON RURAL ECONOMIES, REVIEW THE ENVIRONMENTAL HEALTH OF 
                      NATIONAL FORESTS, EVALUATE 
  ECONOMIC ASSISTANCE TO NATURAL RESOURCE-DEPENDENT COMMUNITIES, AND 
  ASSESS THE IMPLEMENTATION OF THE STEEN MOUNTAIN ACT (PUBLIC LAW 106-
                                  399)

                               __________

                              MAY 29, 2002

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

                          U.S. GOVERNMENT PRINTING OFFICE
82-711                             WASHINGTON : 2002
_____________________________________________________________________________
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii              FRANK H. MURKOWSKI, Alaska
BYRON L. DORGAN, North Dakota        PETE V. DOMENICI, New Mexico
BOB GRAHAM, Florida                  DON NICKLES, Oklahoma
RON WYDEN, Oregon                    LARRY E. CRAIG, Idaho
TIM JOHNSON, South Dakota            BEN NIGHTHORSE CAMPBELL, Colorado
MARY L. LANDRIEU, Louisiana          CRAIG THOMAS, Wyoming
EVAN BAYH, Indiana                   RICHARD C. SHELBY, Alabama
DIANNE FEINSTEIN, California         CONRAD BURNS, Montana
CHARLES E. SCHUMER, New York         JON KYL, Arizona
MARIA CANTWELL, Washington           CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware           GORDON SMITH, Oregon

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               Brian P. Malnak, Republican Staff Director
               James P. Beirne, Republican Chief Counsel
                                 ------                                

                Subcommittee on Public Lands and Forests

                      RON WYDEN, Oregon, Chairman
DANIEL K. AKAKA, Hawaii              LARRY E. CRAIG, Idaho
BYRON L. DORGAN, North Dakota        CONRAD BURNS, Montana
TIM JOHNSON, South Dakota            PETE V. DOMENICI, New Mexico
MARY L. LANDRIEU, Louisiana          DON NICKLES, Oklahoma
EVAN BAYH, Indiana                   GORDON SMITH, Oregon
DIANNE FEINSTEIN, California         CRAIG THOMAS, Wyoming
CHARLES E. SCHUMER, New York         JON KYL, Arizona
MARIA CANTWELL, Washington           RICHARD C. SHELBY, Alabama

  Jeff Bingaman and Frank H. Murkowski are Ex Officio Members of the 
                              Subcommittee

                         Kira Finkler, Counsel
                Frank Gladics, Professional Staff Member
                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Brown, Richard T., Senior Resource Specialist, Defenders of 
  Wildlife, Lake Oswego, OR......................................    41
Brumm, Tom, Intergovernmental Relations Manager, Oregon Economic 
  and Community Development Department, Salem, OR................    63
Collins, Sally, Associate Chief, Forest Service, Department of 
  Agriculture; accompanied by Jeff Blackwood, Forest Supervisor, 
  Umatilla National Forest; Leslie Welden, Forest Supervisor, 
  Deschutes National Forest; and Nancy Graybeal, Deputy Regional 
  Forester, Region 6.............................................    22
Ferrioli, Ted, State Senator, Salem, OR..........................    28
Grasty, Steve, County Judge from Harney County, OR...............     4
Graybeal, Nancy, Deputy Regional Forester, Region 6..............    28
Howard, John, County Commissioner, Union County, OR..............    59
Jeffrey, Mark L., Superintendent, Paisley School District Number 
  11, Paisley, OR................................................    67
Marlett, Bill, Executive Director, Oregon Natural Desert 
  Association, Bend, OR..........................................    10
Morgan, John, Resource Manager, Ochoco Lumber Company, 
  Prineville, OR.................................................    33
Otley, Fred, Rancher, Diamond, OR................................    12
Tovey, Bill, Confederate Tribes of the Umatilla Indian 
  Reservation, Pendleton, OR.....................................    66
Wassinger, Chuck, Associate State Director, Bureau of Land 
  Management, Portland, OR, accompanied by Tom Dyer, District 
  Manager, Burns District, Hines, OR.............................     6
Wyden, Hon. Ron, U.S. Senator from Oregon........................     1

                           STEEN MOUNTAIN ACT

                              ----------                              

                        WEDNESDAY, MAY 29, 2002

                               U.S. Senate,
          Subcommittee on Public Lands and Forests,
                 Committee on Energy and Natural Resources,
                                                       Redmond, OR.
    The subcommittee met, pursuant to notice, at 11:03 a.m. at 
the Deschutes County Fairgrounds, 3800 SW Airport Way, Redmond, 
Oregon, Hon. Ron Wyden presiding.

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

    Senator Wyden. The Subcommittee on Public Lands and Forests 
of the U.S. Senate will come to order.
    As chairman of this subcommittee I'm particularly pleased 
to be home and to be able to chair this hearing. There were 
really two areas I wanted to focus on as chairman of this 
important subcommittee. The first is to get as much natural 
resources policy making out of Washington, D.C., and back into 
communities like the one that's hosting this hearing.
    I think it's critically important that the Federal 
Government get away from the one-size-fits-all approach to 
natural resources and encourages more home grown locally driven 
approaches that bring all of the parties, environmental people, 
industry people, finance, local leaders, together to solutions. 
And I'm particularly pleased that by working in a bipartisan 
way we've been able to have some successes in that regard.
    As many who are attending this hearing know, for example, 
the County Payments Legislation, which was authored by Senator 
Craig and I, is going to bring about $1.5 billion to Oregon 
over the next 6 years. And more importantly, it's going to 
encourage an unprecedented wave of corporation through the 
money that is set aside for projects.
    In addition, that work highlights the fact that everything 
important in the natural resources area must be bipartisan. 
It's just not going to happen unless it is.
    Senator Smith has met me more than halfway in this effort, 
as has Congressman Walden. And both of them will have 
statements for our record. Very helpful and constructive 
statements for the record as well.
    And I also want to thank Chairman Bingaman. Ms. Finkler is 
here from the full committee and joins us as counsel. And also 
on Senator Craig's staff, Frank Lennox is here as well. Martin 
Dorn, I believe, is with us as well from Senator Smith's 
office, and Shelley Brown from Chairman Bingaman's as well. 
This highlights in my view how critically important it is that 
this work be done in a bipartisan way. And consistently Senator 
Smith and Senator Craig and Congressman Walden have been 
extremely cooperative in working with me in passing important 
questions.
    The reasons these issues are so important is more than half 
the land in this part of our State is owned by the Federal 
Government. Land management decisions naturally have enormous 
impact on the economic health of local communities and right 
now a big part of rural Oregon is hurting.
    Unemployment rates for a number of our counties hover in 
and around 15 percent, and it's clear that if rural Oregon is 
to thrive and to come back, Federal agencies that have so much 
impact on the local landscape must be better partners to people 
in the region. So that's what we are here today to discuss.
    I come in saying that you cannot sit in Washington, D.C. 
and just remold local communities three thousand miles away. 
These changes have got to come the other way. They've got to be 
home grown with Federal policy being used as a tool to promote 
areas of critical concerns for local communities.
    I mentioned the legislation that Senator Craig and I 
championed. To give you an idea how difficult a task this is, 
the County Payments Legislation was the first bill on forestry 
to come to the floor of the U.S. Senate in 15 years. It took 15 
years to cut through the polarization and gridlock that 
surrounds so many of these issues, and I'm proud of that bill 
and I'm especially proud that the legislation gave the local 
communities a key voice with respect to Federal land 
management.
    Today we're going to have three panels of witnesses that 
are going to address important issues, and we'll be focused on 
the implementation of the Steens Mountain Protection Act, the 
management of national forests in this area, and the region's 
current economic crisis.
    Our first panel is going to update the subcommittee on the 
ongoing implementation of the Steens Mountain Cooperative 
Management and Protection Act of 2000, and particularly I want 
to express my appreciation to Senator Smith and Congressman 
Walden for the many, many hours they put in to making this 
legislation become law. And what began as a classic Western 
land problem, the question of traditional use versus the 
conservation of it, became instead a law that indicates that 
true answers for public land management requires a good measure 
of both.
    The Steens Mountain presented mixed interests richer than 
many seen in most land conservation efforts. There was 
extensive private ownership, economic use, scenic splendor and 
ecological diversity. In addressing these broad interests, 
local stakeholders and a delegation took in effect a unique 
approach to management.
    The Steens Mountain Act did not only create the Nation's 
first wilderness to exclude cattle grazing, it codifies the 
stakeholders' most important points of agreement and that is 
improving ecosystems and preserving open space are vitally 
important to all Oregonians.
    In coming to the table people who thought very often they 
couldn't possibly find common ground were able to achieve many, 
if not all, of their goals, and that's why it is important that 
the subcommittee get an update on how that legislation is 
progressing.
    The second panel is going to address the Forest Service 
efforts to manage the national forests in this community. If 
there is any area of natural resource policy where the public 
interest is not being served, it seems to me this is it. I will 
tell you as part of my effort to serve Oregon, I hold open 
community meetings in each county each year, and when I go to 
those meetings I find two points of virtual unanimity.
    First, I'm told that inland forests are in an ecological 
crisis. And second, that the Forest Service is just not doing 
what needs to be done to repair the damage. Our landscape is 
dotted with both successes and failures in land that is managed 
by the Service. This pattern of dots is precisely the problem.
    Today much of forest management is a hit-or-miss 
proposition. The basic principle of collaboration, ecological 
recovery and commercial utilization are applied in a patchwork 
fashion that means its success is rare.
    About 350 miles from this hearing room stands a perfect 
example of a missed opportunity in forest management. To 
accommodate the changing face of forest management, the Joseph 
Timber Mill retooled its operation to handle smaller diameter 
logs. Environmentalists and many other local leaders applauded 
the Joseph mill move. Forest management policy that pursued the 
ecological health of the community's forests should have 
provided plenty of material for the mill, but unfortunately 
they recently shut their doors because the Forest Service 
couldn't come up with a policy to get those raw materials 
moving.
    Everyone in the Joseph area, the timber mill, the 
environmentalists, the community, was and is ready for the 
future of forest management, but it sure does not look like the 
Forest Service is ready as of today. Yet south of this hearing 
room real progress is being made in ecosystem recovery in the 
Fremont National Forest. In the Lakeview Sustained Yield Unit a 
diverse group of stakeholders has managed to find common ground 
on a host of ecosystem recovery projects, some of which are 
already yielding substantial benefits.
    This unprecedented cooperation between the Forest Service, 
the environmental community, the timber industry, local 
businesses and elected officials could be a model for Oregon 
and our country on how to collaborate on managing the forests. 
But the Fremont success is going to remain an isolated one if 
its lesson cannot be applied across the spectrum of forest 
management.
    One other example of a current project in the balance 
between success and failure, a few miles from here in the 
Metolius Basin, environmentalists, the timber industry, leaders 
and others are working together on a major forest restoration 
project.
    At one time the Metolius consisted largely of massive pine 
trees on a carpet of grass. Today, thickets of small trees 
choke the landscape. A forest fire there would likely destroy 
large and small trees alike and threaten Camp Sherman. Now is 
the time to put the basin on the path to ecological health and 
provide logs for local mills.
    The question is can the Forest Service move appropriately 
and promptly to help the Metolius Project achieve its full 
potential or is it going to go the other way and we will lose 
terrific opportunities like the one that happened at the Joseph 
mill?
    Finally, on our last panel we're going to look at another 
obstacle for a number of our local communities, and that deals 
with economics. Today only two Oregon counties rank above the 
economic average for the Northwest. Twenty-six rank near the 
bottom of the nearly hundred counties in a four-State region.
    As America's urban areas experience a boom, much of rural 
America is moving in exactly the opposite direction. Mill 
closures took major employers out. Agricultural markets 
faltered. Farm income dropped to half the level of the previous 
decade. Local communities took repeated cuts, repeated right 
hooks, and in some cases social problems were inevitable after 
the economic upheaval.
    Public land management compounded local economic problems 
with respect to forests and farms. While the Federal Government 
owns more than half the land in the region, infrastructure 
development like fiberoptic corridors, new roads, water and 
sewer lines can take on a huge new dimension that so many urban 
parts of the country just don't face.
    We're here today determined that this region's particular 
challenges not stop economic progress. So we are anxious to get 
the views of the witnesses on today on how to use tools that 
are so important to promoting economic development in rural 
communities.
    The goal at the end of the day is to have some fresh new 
ideas for moving forward on the Steens, on national forest 
management, and to insure that there is more economic vitality 
in rural Oregon. We've asked that all of our witnesses give 
their statements within 5 minutes. We will make prepared 
remarks a part of the official record.
    And why don't we go now to our panelists beginning with 
Steve Grasty, the county judge of Harney County. And Mr. Grasty 
has been very helpful to this subcommittee over the years 
working on a whole host of issues. And, Judge, we welcome you 
and please proceed.

 STATEMENT OF STEVE GRASTY, COUNTY JUDGE FROM HARNEY COUNTY, OR

    Mr. Grasty. Thanks and thanks for the opportunity, Senator, 
to present at this hearing. It's almost frightening to me to 
think that it's 19 months since this law was signed by the 
President of these United States. And I guess I just want to 
take a couple minutes and talk about what I see as strengths 
and weaknesses. As a strength I think what I see as most 
important to this date is the working relationship which has 
obviously grown out of the SMAC, the Steens Mountain Advisory 
Council.
    While I've been able to attend little of those council 
meetings, and by the way, Senator, that's thanks to you and 
your County Payments Legislation and the RAC that I can serve 
on for the Northwest forest, but I have worked hard to keep up 
with the issues that face the council and how they've been 
addressing them.
    I commend the people on that council for their commitment 
of time and effort and the way that they've looked at the big 
picture in providing their insight to the planning efforts of 
the Burns District. They have been a good sounding board, and I 
think they've attempted to apply both the law and a level of 
fairness, if you would. And I think that's been important.
    Without a doubt it's the SMAC that has brought the most 
strength to the process so far. In the beginning I got a 
perception, which I haven't entirely lost, but there was an 
effort, if you would, to forget some of the promises and the 
compromises that were made in getting the legislation in place. 
But also I believe that one of the strengths has been the 
stepping up to the plate of individuals to remind others of 
those commitments.
    In particular I refer to Bill Marlett and the running camp 
and wilderness issue. And, Bill, I want to thank you for 
remembering that and staying at the table on that issue. It's 
meant a lot and I also think that that's helped build at least 
a small step closer to having the community and the 
environmental groups be able to work together and work 
cooperatively.
    As to weaknesses I can't hardly get past saying this. That 
I believe that taking 10 months of the last 19 to get the SMAC 
appointed is just short of ridiculous, and obviously put us 
about 10 months behind the schedule where maybe we ought to be. 
I believe that the legislation moved so quickly that we left 
some interested parties out. Notably the snowmobile users and 
some of the landowners that didn't fully understand the 
implementation or the implications to their operations by the 
legislation.
    From here I hope we'll be able to work through issues that 
have been identified by the work accomplished to this date. The 
running camp needs to be protected. We need to look for a way 
to allow some use by the snowmobilers. We need to preserve 
access to inholdings.
    I will say that I strongly disagree with any new 
legislation dealing with the Steens or land swaps on or near 
the mountain. We have enough challenges already identified, so 
I would suggest that we work together to resolve those issues 
prior to moving on to something that could create new 
challenges.
    Let's make sure we understand where we are and what we're 
doing well with that. It's important that we continue to build 
those relationships we've started which have just started to 
grow. And if I might, I need to digress for just a second and 
mention the forest issues. You've already gone over them enough 
that you understand the issues, but it sure appears in the last 
couple of decades that we've managed our forests to burn and I 
hope we can get back to managing them for multiple use.
    Senator Wyden. Steve, thank you very much. It's very well 
said and gets us off on just the right note.
    I had a number of congressional staffers come in and I just 
want to recognize them. For Congressman Walden, Bryan McDonald, 
Justin Rain and John Snyder here. With Senator Smith, Susan 
Fitch is joining Martin Dorn. Let me express my appreciation to 
all of them.
    Back in Washington, D.C., there are congressional 
delegations that hardly ever even speak to each other, let 
alone work together, and Senator Smith and Congressman Walden 
have just been extraordinarily constructive in trying to come 
up with bipartisan solutions to these critical issues.
    I think that's why their staffs are here again today to 
reaffirm how important it is that we come together on these 
issues. And I just want the folks here to know of all of their 
efforts.
    Let us go next to Chuck Wassinger, the Oregon Associate 
Director of the Bureau of Land Management.

STATEMENT OF CHUCK WASSINGER, ASSOCIATE STATE DIRECTOR, BUREAU 
  OF LAND MANAGEMENT, PORTLAND, OR, ACCOMPANIED BY TOM DYER, 
          DISTRICT MANAGER, BURNS DISTRICT, HINES, OR

    Mr. Wassinger. Yes. Good morning and thank you, Senator. 
Before I start I'd like to introduce Tom Dyer, who is our 
district manager in the Burns District and he is here to answer 
any specific questions you may have. He's also been primarily 
responsible for the implementation of the Steens Mountain 
Cooperative Management and Protection Act.
    First of all, I want to thank you for the opportunity to 
testify regarding the Bureau the Land Management's experience 
in implementing the Steens Mountain Cooperative Management and 
Protection Act of 2000. We appreciate the continuing interest 
you and the entire Oregon congressional delegation have shown 
in the implementation of the Steens Act.
    Many in this room have lived here for decades and 
generations and it is your wise stewardship and example that we 
look to in our management of the public lands that are the 
Steens.
    Secretary Norton talks about the ``4Cs''--consultation, 
cooperation and communication all in the service of 
conservation. The Steens Act is an excellent example of the 
Secretary's guiding principles put into action. The wide array 
of natural characteristics, community needs and desires and 
competing interests provide for many complex challenges and 
rewarding opportunities.
    The twelve-member Steens Mountain Advisory Council was 
appointed by the Secretary of the Interior on August 14, 2001, 
pursuant to the Steens Act. The Steens Mountain Advisory 
Council has met four times since their first meeting in October 
of last year. Four additional meetings are scheduled for the 
remainder of 2002.
    Issues including recreation, access, education, grazing, 
wilderness and fire-fighting in the Steens have been addressed 
by the Steens Mountain Advisory Council this year. The Steens 
Act requires that we develop a comprehensive management plan 
within 4 years of the passage of the Steens Act to set long-
term management direction for the area. The BLM is working in 
close collaboration with the Steens Mountain Advisory Council, 
the Southeast Oregon Resource Advisory Council, other Federal 
and State agencies, local governments, the tribes and with the 
public to identify future management direction for the entire 
planning area.
    A Draft Management Plan and Environmental Impact Statement 
are expected to be available for a 90-day public review period 
in the spring of 2003. The proposed plan and Final EIS are then 
anticipated to be completed by the winter of 2003/2004.
    Title VI of the Steens Act mandates five land acquisition/
exchanges. Those exchanges have been a major focus of BLM's 
efforts over the last year, and the final exchange was 
completed in early April 2002. In addition, two Land and Water 
Conservation Fund purchases involving inholdings within the 
wilderness have been completed since the passage of the Steens 
Act.
    As you well know, $25 million for additional land 
acquisitions and conservation easements is authorized through 
the Land and Water Conservation Fund by the Steens Act. As the 
BLM receives appropriations for such acquisitions, we will work 
closely with the Steens Mountain Advisory Council and local 
landowners to maximize the use of such money.
    Access to wilderness inholdings and private inholdings are 
governed by section 112(e) of the Steens Act and by the 
Wilderness Act of 1964. Both require reasonable and adequate 
access while minimizing impact on designated wilderness. We 
want you to know that the BLM is committed to addressing this 
issue.
    The Steens Act requires that grazing within the wilderness 
shall be administered in accordance with the Wilderness Act and 
the guidelines established by Congress in 1990. BLM fully 
intends to comply with this direction, and in preparing the 
Environmental Analysis to analyze the potential use of 
motorized vehicles and equipment and practical alternatives 
that may exist for this purpose.
    For as long as people have settled in southeast Oregon they 
have used the Steens Mountain area for recreation purposes. 
Those uses are both individual and commercial. For many of the 
commercial activities BLM is required to issue special 
recreation permits. The BLM Burns District Staff are preparing 
Environmental Analyses to analyze the impacts of current 
permitted recreational activities on public lands within the 
Steens Mountain Area and in particular the Steens Mountain 
Wilderness Area.
    These EAs will identify impacts to resources and uses, 
while providing for streamlined administrative processes for 
permitting to be more responsive to our commercial and 
recreation service partners.
    We are deeply aware of the importance of recreational 
issues to our local public. We will continue to work closely 
with the Steens Mountain Advisory Council and all users, 
whether recreational or commercial, to find ways to best 
address their needs in the context of the Steens Act and other 
applicable laws and regulations.
    In conclusion, as we continue to move forward on planning 
and implementation of the Steens Act, I give you my assurance 
that the BLM will continue to involve all interested parties 
who live in, recreate on, derive their livelihood from and love 
Steens Mountain. We have learned much from those who call 
Steens home and we continue to look to them for advice and 
guidance. Thank you.
    [The prepared statement of Mr. Wassinger follows:]
Prepared Statement of Chuck Wassinger, Associate State Director, Bureau 
                    of Land Management, Portland, OR
    Thank you for the opportunity to testify regarding the Bureau of 
Land Management's (BLM) experience in implementing the Steens Mountain 
Cooperative Management and Protection Act of 2000, Public Law 106-399. 
We appreciate the continuing interest you and the entire Oregon 
Congressional delegation have shown in the implementation of the Steens 
Act.
    Steens Mountain offers exceptional natural and geologic diversity. 
The mountain provides visitors and residents with spectacular views of 
deep, glacial gorges, stunning colorful alpine wildflower meadows, high 
desert plant communities and the opportunity to see pronghorn antelope, 
elk, mule deer, wild horses, bighorn sheep, and raptors. The 52-mile 
Steens Mountain Backcountry Byway offers access to four campgrounds on 
the mountain and affords remarkable views of Kiger Gorge, the east rim, 
and wild horse overlooks.
    None of this is news to the many people here today who love the 
Steens. Many of you have lived here for decades and generations and it 
is your wise stewardship and example that we look to in our management 
of the public lands within the Steens.
    Secretary Norton talks about the ``4Cs''--consultation, 
cooperation, and communication all in the service of conservation. The 
Steens Act is a stunning example of her guiding principles put into 
action. Passage of the Act was a culmination of a cooperative effort at 
the local level. This was not a top-down Washington-driven proposal. 
Rather, it was the result of the hard work of the Oregon Congressional 
Delegation, Governor Kitzhaber, local land owners, users of the land, 
and local conservation organizations, to provide for long-term 
protection of the cultural, economic, ecological, and social health of 
this area.
    The wide array of natural characteristics, community needs and 
desires, and competing interests, provides for many complex challenges 
and rewarding opportunities. I'd like to address some of the steps we 
have taken toward implementation, as well as some of the challenges 
that lie ahead of us.
                    steens mountain advisory council
    The 12-member Steens Mountain Advisory Council was appointed by the 
Secretary of the Interior on August 14, 2001--pursuant to the Steens 
Act. Under the provisions of Subtitle D of the Steens Act, the Advisory 
Council is charged with advising the Secretary in the management of the 
Steens Area and in promoting cooperative management. In addition, the 
Secretary is charged with consulting with the advisory committee on the 
preparation and implementation of the management plan for the area. The 
Steens Mountain Advisory Council has met four times since their first 
meeting in October of last year. Four additional meetings are scheduled 
for the remainder of 2002. Issues including recreation, access, 
education, grazing, wilderness, and firefighting in the Steens have 
been addressed by the Council this year.
                    steens mountain planning efforts
    The Steens Act requires that we develop a comprehensive management 
plan within four years of the passage of the Act to set long-term 
management direction for the area. In accordance with that planning 
process, in late February and early March of this year, the BLM held a 
series of meetings to enlist citizen help in identifying planning 
issues. The planning area consists of approximately 1.7 million acres 
of Federal land including the Steens Mountain Cooperative Management 
and Protection Area. We are working in close collaboration with the 
Steens Mountain Advisory Council, the Southeast Oregon Resource 
Advisory Council, other Federal and State agencies, local governments, 
Tribes, and with the public, to identify future management direction 
for the entire planning area.
    The information that we have gathered at the four scoping meetings, 
and through written comments, has been used to pinpoint issues and 
develop planning criteria and alternatives for the management of the 
area. The public comment period ended on April 15. After the comment 
period ended, we assessed comments, finalized planning criteria and 
worked on fine tuning draft alternatives. A document entitled ``Summary 
of the Analysis of the Management Situation'' was published this 
earlier spring to allow further public review of management 
opportunities. A draft management plan and Environmental Impact 
Statement (EIS) are expected to be available for a 90-day public review 
period in the Spring of 2003. The proposed plan and final EIS are then 
anticipated by Winter 2003/2004.
                       exchanges and acquisitions
    Title VI of the Steens Act mandates five land acquisition/
exchanges. The Act authorized, and Congress subsequently appropriated, 
over $5 million to complete these acquisitions. Those exchanges have 
been a major focus of BLM's efforts over the last year and the final 
exchange was completed in early April. In addition, two Land and Water 
Conservation Fund purchases, involving inholdings within the 
wilderness, have been completed since passage of the Act.
    Twenty-five million dollars for additional land acquisitions and 
conservation easements is authorized through the Land and Water 
Conservation Fund by the Steens Act. As we receive appropriations for 
such acquisitions we will work cooperatively with the Steens Mountain 
Advisory Council, and local landowners to maximize the use of such 
monies. We recognize that acquisitions and conservation easements are 
an important part of successfully implementing the Steens Act, and to 
that end we will continue to work with you, Governor Kitzhaber, the 
entire Congressional delegation, and all interested stakeholders and 
publics.
                                 access
    Access to wilderness inholdings and private inholdings is governed 
by Section 112(e) of the Steens Act and by the Wilderness Act of 1964. 
Both require reasonable and adequate access while minimizing impacts on 
designated wilderness. We are committed to addressing this issue. Both 
the Steens Act and the Wilderness Act provide some flexibility for 
allowing access to private inholdings. Both recognize the importance of 
providing the access and protecting wilderness values. We are presently 
investigating access options, and through an open dialogue with the 
public will provide for an analysis, disclosure of impacts, and 
discussion of the various options. Two access options currently under 
consideration are either a cooperative management agreement, or the 
more traditional permitting process.
    The BLM intends to provide reasonable access to inholders in a 
manner that protects wilderness characteristics. The BLM Burns District 
is presently preparing the required Environmental Assessment (EA) to 
address inholding access needs in the Steens Wilderness in conformance 
with the Steens Act, the Wilderness Act, and BLM's Wilderness 
Management Regulations.
                      livestock grazing permittees
    The Steens Act requires that grazing within wilderness shall be 
administered in accordance with the Wilderness Act and the guidelines 
established by Congress in 1990. Those guidelines provide direction and 
examples of appropriate use of motorized vehicles and motorized 
equipment where practical alternatives do not exist. They also require 
that any occasional use of motorized equipment be authorized within the 
grazing permits for the area involved. The BLM intends to fully comply 
with this direction, and is preparing an EA to analyze the potential 
use of motorized vehicles and equipment, and practical alternatives 
that may exist for this purpose.
                            recreational use
    For as long as people have settled in southeast Oregon, they have 
used the Steens Mountain area for recreational purposes. Those uses are 
both individual and commercial. For many of the commercial activities 
the BLM is required to issue special recreation permits. The BLM Burns 
District staff have prepared EAs to analyze the impacts of current 
permitted recreational activities on public land within the Steens 
Mountain Area and, in particular, the Steens Mountain Wilderness Area. 
These EAs will identify impacts to resources and uses, while providing 
for streamlined administrative processes for permitting to be more 
responsive to our commercial recreation service partners. The National 
Environmental Policy Act process will analyze all options, current 
policy and the comments from the public and partners. BLM will work 
with the Steens Mountain Advisory Council before a final decision is 
made.
    The BLM Burns District is also working with off-highway vehicle 
users to help them better understand their responsibilities under the 
Steens Act. Section 112(b)(1) of the Act clearly prohibits the off-road 
use of motorized or mechanized vehicles on Federal lands, limiting 
their use to designated roads and trails as determined in the 
forthcoming management plan.
    We are deeply aware of the importance of recreation issues to our 
local publics. We will continue to work closely with the Steens 
Mountain Advisory Council and all users, whether recreational or 
commercial, to find ways to best address their needs in the context of 
the Steens Act and other applicable laws and regulations.
                               conclusion
    As we continue to move forward on planning and implementation of 
the Steens Act, I give you my personal assurance that we will continue 
to involve all the interested parties who live in, recreate on, derive 
their livelihood from and love Steens Mountain. We have learned much 
from those who call the Steens home and we will continue to look to 
them for advice and guidance.

    Senator Wyden. Thank you. Let's just move right down the 
row to you, Mr. Marlett.

 STATEMENT OF BILL MARLETT, EXECUTIVE DIRECTOR, OREGON NATURAL 
                  DESERT ASSOCIATION, BEND, OR

    Mr. Marlett. Thank you, Senator Wyden. Welcome to Central 
Oregon and thanks for the opportunity to speak on 
implementation of the Steens Mountain Cooperative Management 
and Protection Act.
    The path chosen for Steens was a novel course of action, 
one that attempts to balance competing interests, accommodate 
diverse stakeholders and provide for direct citizen involvement 
with the goal to ``conserve, protect and manage the long-term 
ecological integrity of Steens Mountain for future and present 
generations.''
    While the overarching goal of the Act is clear, the path in 
reaching our goal will be anything but smooth.
    Today, I want to focus on three issues I believe are 
impeding the progress towards achieving that goal.
    The first is that Oregon's delegation should not try to fix 
every problem, perceived or otherwise, that manifests as we go 
through this arduous planning process. By way of example, when 
we agreed to the Nation's first ``cow-free'' wilderness area on 
Steens Mountain, we did not fully appreciate nor did the bill 
acknowledge the fact, that it would take several years to 
achieve cow-free status in the newly-formed wilderness area. 
And while we could have raised a political fuss, we didn't. We 
decided, in the spirit of cooperation, we would let the process 
run its course.
    My point in raising this is to illustrate that whether the 
issue is access to private lands or ongoing livestock 
management, people need to exercise patience. Senator Wyden, I 
know that you and the rest of the delegation did not intend 
that the Steens Act would solve all the problems on Steens 
Mountain, which is why you established the Steens Mountain 
Advisory Committee (SMAC), to assist BLM in preparing a 
detailed management plan that addresses myriad issues.
    The second issue relates directly to the SMAC. Congress 
gave very explicit direction to BLM to prepare a management 
plan with the help of the SMAC. The problem I see is the 
committee is spending too much of its precious time on issues 
secondary to completing the plan. I believe with the short time 
left, the SMAC must focus its limited energy in completing the 
plan, and only when necessary, and as time permits, delve into 
the interim issues BLM is having to contend with daily.
    The third issue, and in my opinion the biggest 
disappointment of the Steens Act, is the complete absence of 
promised funding for land acquisition, easements and juniper 
management. Just within the Steens Mountain Wilderness, there 
are nearly 5,000 acres of private inholdings that pose a threat 
to BLM's ability to manage the land as wilderness. Some of 
these landowners have expressed a willingness to sell their 
lands to BLM, but there is no money. I, along with the Steens-
Alvord Coalition, firmly agree with Governor Kitzhaber, that 
potential development of private lands is a primary threat to 
the undeveloped integrity of the Steens Mountain landscape that 
people value so highly.
    All stakeholders who were party to drafting the Steens 
legislation agreed that acquiring land and easements from 
willing sellers would be part of the long-term strategy to 
achieve the goal of the Steens Act. Oregon's delegation agreed 
and Congress authorized $25 million for land acquisition and $5 
million for juniper management. To date no funds have been 
appropriated for these purposes. To my dismay, some 
stakeholders are purposely blocking appropriations. Senator 
Wyden, the integrity of the Steens process hinges on honoring 
past commitments to future funding; in short, a deal is a deal.
    It is my strong conviction that this funding commitment was 
as much a part of the consensus agreement we made 2 years ago 
as the land exchanges, making ranch operations whole and 
designating wilderness. For myself, this promise of future 
funding was the critical carrot that convinced many of us to 
support national legislation over a monument proclamation, 
which as you know, carries no commitment of Federal dollars.
    This is not to suggest there is no active role for Oregon's 
delegation outside the appropriations process. The Steens Act 
did not designate approximately 100,000 acres of Wilderness 
Study Area lands within the management boundary as wilderness. 
For political reasons, these wilderness designations were left 
on the table for another day, and it is our understanding that 
Congress will revisit this issue when appropriate.
    Second, Congress may wish to legislate additional land 
exchanges, as currently being proposed for George Stroemple and 
others, to consolidate public and private lands, secure new 
wilderness, or eliminate inholdings. ONDA supports the current 
batch of land exchanges. As you know, during the course of the 
original discussions on the Steens Act, several important land 
exchanges, including the Scharff and Hammond exchanges, were 
dropped for lack of time to reach consensus. To the extent such 
land exchanges meet the objectives of the Act, in particular 
where Congress is creating new wilderness, some, but not all in 
the conservation community will support Congressional action on 
this front to expedite the process. Of course, we must be 
vigilant to balance any legislated exchange absent NEPA to 
ensure that the public's interest is protected.
    Which is not to say that we didn't make mistakes two years 
ago. The fact that we are now proposing boundary adjustments as 
part of new legislation for Steens suggests otherwise.
    But Congress should not prematurely involve itself in 
management issues, in particular policy matters related to the 
Wilderness Act that have not been fully debated and discussed. 
The BLM has rules and regulations along with the public 
involvement in the process that should be given a chance to 
work.
    In short, Senator Wyden, Congress should not attempt to fix 
problems with implementation of the Steens Act that may be more 
perception than reality. Congressional fixes may be necessary, 
but should be actions of the last resort. Legislative tinkering 
at this juncture sends a message that the Steens model is 
flawed. I believe it would be unwise for us to send that 
message. In short, let the SMAC and BLM carry out their 
representative duties.
    If the Oregon delegation wants the Steens model to be 
successful, I suggest we limit legislative action to discreet 
matters that have consensus, ask BLM if they have the staff and 
resources to thoroughly develop a solid management plan, and 
give the SMAC the support they need to assist BLM in developing 
that plan.
    In conclusion, we should stay the course, not meddle in BLM 
and permitting protocol, let the SMAC focus on getting a plan 
on the streets, and appropriate the critical dollars we were 
promised 18 months ago for juniper management and land and 
easement acquisition.
    Senator Wyden, thank you again for your time and interest 
on this important issue. And while we don't see eye to eye, I 
would like to compliment BLM District Manager Tom Dyer, Area 
Manager, Miles Brown, along with Burns District BLM staff, who 
I think are doing a great job on a difficult task. Thanks.
    Senator Wyden. Let's welcome now Fred Otley, who ranches 
near Diamond. And we're really pleased to have you here with 
us, Fred. You and the other ranchers have been so helpful, not 
just on this but on a variety of issues. As you know, the old 
3rd Congressional District that I represented for 15 years in 
the House, there's really not a lot of cattle ranches or 
national forests there in northeast Portland, but you all made 
a very, very significant effort to reach out to me and help on 
these ranching issues and I'm very appreciative of that. Please 
proceed with your testimony.

         STATEMENT OF FRED OTLEY, RANCHER, DIAMOND, OR

    Mr. Otley. Thank you very much, Senator, and thank you for 
your help in the past, complaint trips and whatnot that helped 
get to the center core of certain issues.
    The Steens Mountain Cooperative Management and Protection 
Act is indeed a precedent setting act in a number of ways. It 
creates a new type of special designation. One that emphasizes 
and even promotes current and historical uses.
    The first purposes of the Act was to maintain the cultural, 
economic, ecological and social health of the Steens Mountain 
Area. I think that's fundamental to your whole hearing today, 
and I think it's fundamental to why the legislation was created 
in the first place.
    For instance, the purposes to promote viable and 
sustainable grazing, recreational operations on public and 
private land; to conserve, protect and manage for healthy 
watersheds and the long-term ecological integrity of the Steens 
Mountain, these are balanced purposes. They are not one-sided. 
They recognize the need for long-term sustainability in terms 
of both the economy and the biology and ecological needs of the 
area.
    Other purposes emphasize cooperative management, in 
addition to the title Cooperative Management and Protection Act 
and all the five objectives of the cooperative management area. 
How many designations can you come up with that have 
cooperative management in the title and in eight of the 
purposes setting up the designations?
    The cooperative management protection area is indeed 
inclusive also of other special designations that are within 
the cooperative management protection area. Wilderness, four or 
five wild and scenic rivers, the wild lands juniper management 
area, and a number of ACC research natural areas and a whole 
host of special designations. And it is indeed going to be a 
challenge to pin all these together, because they are under the 
umbrella of the purposes and the objectives I've stated.
    The critical elements, I think, that needs to be kept in 
front of us is promoting uses that are sustainable, puts people 
in the process, both in terms of the landowners that are there 
and the public that's such a strong part of the mountain. And I 
think there's a couple litmus tests that are vital to look at. 
One is indeed the Steens Mountain Running Camp that has 
operated for 27 years. And most people don't even know it 
exists there.
    A hundred fifty runners run throughout what is now the 
wilderness area a few times a week, and they have specific 
routes for safety and other considerations, and nobody even 
knows they exist. Most people are still asleep in their camp 
when 150 runners go by and they don't even know they were 
there. It's a very, very special part of the mountain.
    There's seven other recreational permits, commercial. And I 
don't think in terms of non-commercial and commercial, because 
both non-commercial and commercial are part of the mountain. 
Public use is part of the mountain. But there are eight total 
commercial recreational permits on the mountain, and they were 
basically without being specifically grandfathered in, they 
were fundamental to the sustainable recreation and grazing 
businesses, as were the grazing permits that exist up there 
that remain.
    So I think BLM erred in terms, and I don't know why their 
starting point was where it was. It had to be at a higher 
level, the State office or Washington, D.C., to my way of 
thinking. Because they started by taking the assumption that 
because we created a wilderness, that we had to put these 
historical uses under great scrutiny on an interim basis. That 
is inconsistent with the Act.
    The assumption should have been that the starting point is 
what is there, what is existing that isn't specifically altered 
by the Steens Mountain Act. Let me give you one example. I'm 
sure my 5 minutes is about up. But the direct effect of the 
running camp that they immediately--well, all the recreational 
permits, they were up in the air whether they would have a 
permit the first year it was established. And thanks to Tom 
Dyer and Miles Brown some of this has been resolved, but it's 
why we're sort of at an impasse on certain issues.
    They assumed that those permits had to be changed and they 
were under scrutiny. They never received their permit until 
after they were slated to start their activities. The running 
camp runners, the first two bus loads, were there before Harlan 
Moriarty got his permit. Now Harlan Moriarty, 80 percent of his 
purpose is environmental education and appreciation for Steens 
Mountain and the way he operates his camp. He just loves that 
camp.
    All the recreational permit holders received that delayed 
permit, and I worry about it again this year. They are a part 
of the new wilderness management from my standpoint. They all 
operate to a certain degree inside the wilderness boundary and 
they should be used cooperatively to help educate the public 
and to help find a better way of managing public use when there 
is a conflict. When there is activities that might impair some 
resources. But that ought to be the trigger when there's damage 
occurring or obviously uses that will suggest damage if the 
activity continues in that manner. That's called monitoring and 
that's central to the Steens Mountain. In existing situations 
that's what we do, we try to monitor and avoid problems, not 
monitor, you know, after the fact. So, again, I appreciate 
everybody's effort up to this point. I am afraid that there 
might be legislative fixes necessary because of the starting 
point way over here.
    We have certain outside groups that are trying to challenge 
these fundamental things that should be just ingrained as part 
of the implementation of the Steens Mountain Act, and that's 
where I think we've sort of got off the track here. And there 
are things as far as access to inholdings that I think for full 
use and enjoyment should be reestablished, because the 
interpretation of reasonable means you get a permit. I don't 
think a permit to go to your property inside the boundary, I 
don't that's consistent with what we were talking about.
    There is room in terms of cooperative management agreements 
and other components of the Act that existing uses of 
management can continue. And we don't need to assume things are 
wrong. We need to monitor and make sure that they don't go 
wrong. Thank you.
    Senator Wyden. Fred, thanks very much and I particularly 
appreciate your mentioning the running camp, the Steens 
Mountain Running Camp. Senator Smith and I in fact have been so 
concerned about this particular point, because it really goes 
right to the heart of the philosophy of whether we're going to 
continue so much of what already goes on in the Steens that 
works. And the congressional delegation wanted to make sure 
that those historic operations were preserved, so Senator Smith 
and I actually put into the Congressional Record a fairly 
lengthy exchange called a colloquy, which is kind of Washington 
lingo of a description, that lays out that the congressional 
intent was exactly as you have described it, to ensure that 
these running operations, which by the way are on private land, 
are not harmed by a group of people who are from out of State.
    I can tell you our delegation is not being flooded by 
people from the State of Oregon saying that, you know, we have 
got to change the running camp or western civilization is going 
down the tubes.
    Mr. Otley. Your letter early on really helped get that 
issue back on track, because there was a number of conditions 
and requirements coming forth at one point that, well, we're 
still nervous that they're going to be able to operate in the 
long term.
    Senator Wyden. I got the drift and as chairman of this 
subcommittee with jurisdiction over public lands and forestry, 
we're going to carry out what the law intended, which is to 
protect that running camp and ensure that those opportunities 
for young runners are still there.
    Let's start with you, Mr. Wassinger. Why did it take so 
long to get the advisory committee appointment? I gather it 
took pretty much a year, and what was the reason it took so 
long to get that going?
    Mr. Wassinger. The nomination process and the review 
process were quite complex. The first Advisory Council of its 
type, while it's similar to a Resource Advisory Committee, it 
was the first specific committee of its type, and I think it 
just took a while to get that process in place.
    Senator Wyden. Well, I asked mostly because I think what 
has concerned people is that this has been so important we 
would just like it to reflect the sense of urgency that the 
people of Oregon and all of the stakeholders feel, and if it 
takes a year just to get everybody appointed, you can 
understand why there is a fair amount of concern.
    Let me ask you, if I could, representing BLM fire 
management, we've been told that BLM current procedures require 
BLM to obtain permission from the State office in Portland 
before they can authorize fire fighting measures in Steens 
Mountain Wilderness. If that's correct, tell me why that's the 
case and sort of how you deal in emergency situations?
    Mr. Wassinger. Senator, I'm not familiar with that 
requirement. I don't know the answer to that, but I can get you 
an answer to that.
    Mr. Dyer. Usually any type of a fire situation in the 
wilderness requires some checks and balances. We do have the 
authority to make the determination on how we go in there and 
suppress the fire, but it will be made using not only the 
district personnel there, but also other folks that have a lot 
of experience working with fire suppression in wilderness.
    Senator Wyden. So what happens if there's an emergency? 
What if there is an emergency on a weekend morning or a 
holiday, is it not possible for local people to move in those 
kinds of situations?
    Mr. Dyer. Yes.
    Senator Wyden. They can?
    Mr. Wassinger. There are procedures and we do have 24-hour-
a-day coverage in our fire fighting programs. So there is 
provision for in emergency situations to not only allow the 
district to act, but to allow that interchange to happen at any 
time.
    Senator Wyden. Good. That's important and I think it's 
important to make that clear. With respect to livestock grazing 
in the Steens, as you all know a key part of our ability to 
reach an agreement on the expanded Steens program was because 
of our decision to adopt the long-standing guidelines on 
grazing in the wilderness.
    Those guidelines established very straightforward 
principles that wilderness status not affect grazing, usual 
methods of access, including the use of motorized equipment 
should be allowed where necessary and reasonable. So it was our 
understanding as a delegation that very little would change on 
this key issue with respect to grazing management as a 
consequence of the wilderness designation. Is that the 
understanding of this group of witnesses?
    Mr. Wassinger. I can speak to that, Senator. Motorized use 
within the wilderness area was specifically addressed in this 
legislation, that motorized use under the guidelines prescribed 
by Congress was acceptable. Those guidelines require that we 
determine whether or not the motorized use is appropriate and 
reasonable for the uses that are being proposed. That's what 
we're in the process of analyzing right now. Not if they have 
the right to these uses, but how these uses might be applied.
    Senator Wyden. What does that mean to people out in the 
real world?
    Mr. Wassinger. Well, it means that there may be a more 
appropriate way to deal with maintenance of the facilities that 
would be more appropriate for the wilderness itself and at the 
same time still get the job done.
    Senator Wyden. What would that be?
    Mr. Wassinger. It just could be a different kind of 
motorized use or a different type of use. It may not require 
motorized use. There could be other options and that's what the 
burn district is assessing right now. Not if they have the 
right to those issues, but how those uses are applied.
    Senator Wyden. I'd like everybody on the panel to weigh in 
on this point, not just the question of motorized use, but the 
overall question of the intent of Congress.
    Mr. Grasty. Well, I have to admit I'm kind of lost on what 
to add to this. The comments that Mr. Wassinger was making, I 
guess my concern around those is they require a change in 
management style, if you would, of the landowners or grazers up 
there, if you would, even to the point that I'm hearing I know 
we were talking about having to hand pack rocks in, but not 
being able to pick up rocks that are in the neighborhood 
because they're in the wilderness. Or having to move rocks from 
outside the wilderness into the wilderness if they were going 
to build a rock chair, and those kinds of things. And that 
level of change in operation creates quite a bit of concern to 
me.
    Senator Wyden. Mr. Wassinger, do you want to make sure 
people don't walk out of here thinking that's what the BLM is 
going to do?
    Mr. Wassinger. Why don't I let Tom Dyer speak to the kinds 
of things that are being considered in the Environmental 
Analysis right now, or Miles Brown. They are both involved.
    Mr. Dyer. We're going through the Environmental Analysis 
right now. What Chuck mentioned as far as the access and the 
work on it, that's not the question. The question is how? We 
are talking about reasonable and practical. That's what's in 
the legislation. It's also in the Wilderness Act of 1964. And 
we really need to identify what that means, as far as the idea 
of other methods that maybe the number of trips that they have 
normally gone in on have been a very few. Does it necessarily 
need to be a four-wheel drive rig versus a four-wheeler or an 
ATV?
    So right now we are working with the stakeholders in this 
process to try to make a determination in the analysis to help 
us make the best decision we possibly can, Miles, do you have 
anything you want to add?
    Miles Brown is the BLM field manager for the natural 
resource area and the manager right over the Steens area, and 
staff is working directly with the landowners and their range 
permits.
    Senator Wyden. To the extent that you can give people some 
concrete impressions about how you're going about this, I think 
that would be helpful, because obviously there's a lot of 
concern. Steve's reflecting it. I think it would be helpful.
    Mr. Dyer. The main thing is yes, they have access. Yes, 
they can work on their projects right now. What we're analyzing 
is the how. How many? Are there other opportunities to help? 
What might be the best way to address that? What has the least 
impact on the Steens Act, the new direction?
    Mr. Brown. I think part of the issue is getting to the 
bottom line, and that is Appendix A referenced by the Steens 
Act talks about placing those uses within wilderness, the 
mechanized motorized uses within the wilderness, in the grazing 
permit. And when we place something in the grazing permit, it's 
a discretionary action and that requires a decision that 
subsequently requires use of the National Environmental Policy 
Act--which is an Environmental Assessment.
    The bottom line is if we don't do that we'll likely be 
challenged. If we don't do that we'll likely lose, and if the 
BLM loses, the grazing permittees lose. So the primary reason 
why we're going through the process is to protect those uses.
    Senator Wyden. Okay. I want to hear from Mr. Marlett and 
Mr. Otley on that point, grazing.
    Mr. Marlett. During the course of the negotiations on the 
bill, you know, when you're sitting around a kitchen table 
chatting about whether grazing will be permitted or not, the 
general understanding was that grazing would continue in the 
wilderness area. That was a fundamental understanding between 
all the stakeholders.
    We believed that grazing would continue consistent with the 
guidelines that Congress had so carefully crafted in the years 
past dealing with ongoing grazing management in designated 
wilderness. To the extent that it would be grandfathered 
exactly as it was in the past, I don't think that point ever 
came up clearly or the question was never asked, you know, Can 
we do exactly what we did in the past in the same manner and 
degree? That notion was never on the table.
    It was assumed that grazing would continue and under the 
cooperative nature of the bill that the permittees would 
cooperate with BLM in adjusting where necessary their 
operations to be consistent with the Wilderness Act, 
recognizing that that use would continue.
    Senator Wyden. Fred, anything to add?
    Mr. Otley. Yes. The issue did come up, though, concerning 
motorized uses in terms of maintenance of facilities and other 
management activities, like placing salt and those types of 
things. Because we don't like to go out there and spend 20 days 
to do one day's job for a number of reasons. One, we don't have 
the time. Two, it costs money.
    And if you place restrictions on the ability to get up 
there with a motorized vehicle, we no longer can sustain our 
operations as they have been in the past and we cannot properly 
maintain certain facilities, like water reservoirs, small water 
catchments, that are absolutely necessary to properly manage 
the watershed and properly manage our grazing.
    So the interim challenges, and I understand Miles's 
comments on having to go through NEPA, but basically the 
existing management activities should be continued and a 
process set up so that we would determine, you know, if there 
was uses that may have alternatives that nobody's considered.
    For instance, a four-wheel drive pickup on a muddy road 
compared to a four-wheeler. If the pickup was necessary, you 
could still get out of the muddy period. That's called 
cooperation, and that's called ongoing cooperation that we've 
had with the Agency in the past. I mean we private landowners 
close certain roads when they get to the point of where using 
them will cause problems with the road. That only makes sense 
because it costs money to fix up those roads. It's very 
expensive and that requires additional mechanized equipment.
    So right now people assume they can go up there and do the 
day-by-day, which isn't very often. It's salt earlier in the 
year. Most of the motorized activities are prior to the public 
use ever going up in those areas. So the best way would have 
been to not--The Agency clearly in the guidelines may allow 
those uses to continue, and to put them up for scrutiny under 
NEPA. It should have been said that these activities will 
continue and major changes in those activities, i.e., repair of 
roads, maintenance of roads so we can get into the wilderness 
area, should have been the issue under scrutiny of NEPA, not 
whether we are going to go up there on horseback or not.
    Senator Wyden. I think the reason that this is important is 
you take the piece of legislation which says that current 
operations are going to continue. They're going to be 
respected. That the current guidelines are going to be 
respected. And then you get into all these questions of how the 
Act is being implemented and I think there is a concern, you 
know, by some that, Well, somebody may hijack this in terms of 
implementation, taking it a different direction than Congress 
intended.
    And let me wrap up this line of questioning just by asking 
the BLM folks, on this implementation on the grazing issue, 
what is your plan to reach out to all of the stakeholders so 
that people really feel as you get into the nuts and bolts of 
implementation on the key issue, that everybody is being 
listened to and you don't have a situation where somebody can 
just kind of run off and take the Act in a different direction 
than Congress intended?
    Mr. Wassinger. I'll speak to it generally and I'll let Tom 
speak to it on a more specific basis. But on all of the 
implementation issues, Senator, of this complex Act, our intent 
is to involve everyone who has a stake in the issues that are 
being addressed. We're working directly with those grazing 
permittees.
    On the other issues, on the special recreation permits, on 
the access to inholders, our guidance to the Burns District is 
exactly the same. We want you to consult and cooperate and 
involve and engage and participate practically with both the 
Steens Mountain Advisory Committee and all of those individuals 
that are affected directly or indirectly in these issues.
    Senator Wyden. Well, let's move on, but I just want it 
understood that I want you to keep our subcommittee fully 
abreast of the issues relating to implementation generally, but 
particularly on this point which is generating so much concern. 
I'll leave it at that, but we want you to keep us abreast.
    To move on, Mr. Marlett, on the land use issues and the 
land use plan, obviously here again there is a question to 
really make the kind of progress people need, we've got to get 
all the stakeholders together on, I assume if it comes to it, 
Senator Smith and Congressman Walden and I can go lock the SMAC 
in a room with the BLM and just have everybody sit there until 
it gets done. And obviously that's not exactly the ideal way in 
which you go forward with legislation, but what are your 
thoughts in terms of getting everybody together, the 
stakeholders, on the land use plan issue to get this done.
    Mr. Marlett. I think that with respect to the plan itself, 
the SMAC just needs to refocus its energy away from the kind of 
day-to-day decisions that BLM is making with respect to grazing 
management in the interim and special recreation permits, and 
focus exclusively on the plan itself and developing the 
necessary alternatives that are required under NEPA, so that 
the plan gets out in a timely fashion and has enough thought 
and consideration that goes into it such that, you know, we've 
got something at the end of this process, you know, that has 
meaning and will give people something to think about.
    I think it's just a simple question of and this is the SMAC 
itself has wrestled with this issue where do they put their 
time and energy? And I think that they're realizing now that in 
spite of the fact they've had four meetings, that it is a time 
intensive process and these, I won't call them minor issues, 
but they are interim issues for lack of a better word, are just 
sucking up their time and energy, and they only have so much to 
give, so they just need to refocus.
    Senator Wyden. Steve, it seems to me you make an important 
point about getting into new challenges and, you know, new 
issues before you clear the decks in terms of the old ones, and 
obviously just in terms of any new ones. There is a lot of 
homework somebody has to do before they can do many of those 
land exchanges, you know, and others that clearly have to be 
given an opportunity to get into those first. But we can come 
close to wrapping this up maybe with another question or two in 
this area. But highlight for us what you think the major 
outstanding issues are now. What are the most important things 
that have to occur?
    Mr. Grasty. Well, I guess specifically the inholding 
issues, access for the inholds. Personally I like the 
cooperative agreements rather than permitting. I think they're 
somewhat longer lasting. As Mr. Wassinger said earlier, they 
also don't come with a fee attached to them.
    I think on the specific one, that's probably the easiest 
one to get and most important to the guys that live on the 
mountain, the people that live in Harney County. Broadly I'm 
worried that the committee, as Bill said, is focused where it 
needs to go, but doesn't lose sight of all these little issues 
have got to be talked about. If you go around them, we're going 
to end up with what we may have done in the legislation of 
moving so quickly that there isn't enough thought put into it 
to end up with a good plan.
    Senator Wyden. I think that's a good one to quit on. I want 
to give each of you a chance to have a last word and offer 
anything before we wrap up. But I think Steve's point is 
important. A number of these issues probably can be considered 
small in terms of if you just look at them in a discreet sort 
of way, just one. But cumulatively they go right to the heart 
of our ability to hold this coalition, you know, together. And 
that's what's critical, you know, here.
    I had lunch last Thursday with Senator Smith and 
Congressman Walden, and we all talked at length about how 
important it is to keep this coalition together. We have a 
piece of legislation that by any calculation was unique with 
protection for existing uses on the grazing side. The first 
cow-free wilderness area. Something that environmental groups 
had sought for quite some time.
    And so the stakes are really important here, and I can see 
the good will of this table, but it's going to be important 
that all sides really make a Herculean effort to reach out and 
to make sure that as implementation goes forward, everybody 
feels they have had a chance to work through all these 
questions to keep this coalition together.
    And let me give you all a chance to have a last word and 
then we'll excuse you. Let's start at the other end. Fred, you 
can start and go right down the line. Anything you'd like to 
add further before we wrap up?
    Mr. Otley. Yes. Just tell everybody that a lot of the 
things that have been going on in implementation of the Act has 
been done smoothly, but the ones--I'll disagree with Bill a 
little bit here--are the test on whether it's going to work on 
an interim basis when you get these major upheavals that 
threaten the businesses that depend on the mountain. The 
businesses and the people who come there for family outings.
    I mean a person that comes from New York to visit their 
twenty acres, and there's lots of inholdings on the mountain, 
and they find out that they're arrested by a law enforcement 
officer for visiting their land. That doesn't make any sense. 
The other issue, well, like one of the ones that's worked 
really good is the juniper activities. The juniper fire 
management activities that Bill and I together have come to 
greater agreement on than we have in the past, are progressing 
and the mountain isn't at a standstill. So a lot of things are 
working.
    The one that I wanted to get to also did have to do with 
economics. Economic incentives are a big part of the 
legislation. Four things in addition to land acquisition, which 
everybody automatically said that one, there's three other uses 
of the Land and Water Conservation money. And that is 
conservation easements, nondevelopment easements to protect 
against the major resort developments that we all think are 
inconsistent and not really appropriate on the mountain 
necessarily, or at least we'd like to have them guided into the 
right spot if we're going to have that type of development, but 
also cooperative agreements are authorized through incentives 
to manage like for the ecological integrity of the mountain: 
juniper projects, prescribed fire where everybody gets together 
and shares their expertise and efforts and resources.
    And relative to those moneys Bill mentioned funding, and 
the earlier agreement was that half needed to be put forward in 
terms of nondevelopment easements, conservation easements, 
cooperative agreements relative to the other half being 
available for certain key land purchases inside the wilderness 
that are high profile or high priority. And I do believe that a 
certain level of funding is needed right now to implement it.
    It is hard when some of these things like access to 
inholdings starts blowing up or whether the running camp or 
other recreational permits are going to operate. Those things 
shake everybody up and it shakes the local support at the 
community level, and I think that's critical to success.
    Senator Wyden. Bill, the last word.
    Mr. Marlett. Well, I've got three things that I saw as 
impediments, and that shouldn't, I guess, mask the fact that 
there has been significant progress made. You know, we got the 
implementation of EA done last year. Much of the same 
discussion going on now was happening last year over that.
    We thought perhaps we were going to have to go through some 
congressional fix to let that pass forward. You know, the land 
exchanges are done. So there has been a lot of progress and I 
think it's prudent for us to keep in mind the big picture, and 
as I pointed out earlier, it's not going to be easy. People are 
going to get upset, but we just need to work through it and 
kind of keep our eyes glued to the final outcome.
    Mr. Wassinger. I think I'd like to close on the plan 
itself, the planning process, which is critical to the long-
term implementation and success of this Act. That planning 
process, we completed the scoping in April, however I want to 
make it very clear to you, Senator, that we want to 
continuously involve the public, all publics, in that process 
throughout the plan development and finalization, including 
very importantly the Steens Mountain Advisory Committee.
    We are pushing that process as fast as we feel we can push 
it and still be inclusive of all of the concerns and issues 
that people need to bring forward and feel comfortable with 
whatever that plan ends up looking like.
    Senator Wyden. Steve.
    Mr. Grasty. I'll make two quick points. One is just sitting 
at this table shows the issue around the different meanings one 
word has for people. And the word historic may be a classic 
here. The community of the snowmobilers think that their use 
was historic. The ranchers see the way they manage their 
grazing allotments as historic. The environmental community 
sees it as something else.
    It's important that we do what we can to get a good 
understanding around those individual words that slow us up, 
and I suspect the bureaucracy within the BLM will change it to 
yet something else.
    And then the final point I'd make is that it's important in 
this implementation for your help to help us with an issue that 
is tied certainly to this, and that's to have a sister Federal 
agency make a run on water rights that takes about 120 percent 
of the water that ever came off the mountain at one time, would 
take it all, complicates this issue and ruins the level of 
trust locally, and that's the refuge system. And, boy, if 
they'd back off a little bit, I think we could keep the level 
of trust up a little bit higher in getting this plan in place.
    Senator Wyden. Very good. We'll adjourn you and thank you 
for your help. The next panel is Sally Collins, Associate 
Chief, Forest Service, accompanied by Leslie Welden, Forest 
Supervisor for the Deschutes Forest; Nancy Graybeal, Deputy 
Regional Forester, Region 6; Jeff Blackwood, Forest Supervisor, 
Umatilla Forest; Rick Brown, senior resource manager, Defenders 
of Wildlife; John Morgan, resource manager of Ochoco Lumber; 
and the Honorable Ted Ferrioli, State Senator for central and 
eastern Oregon.
    We're going to have to have quiet in the hall so the panel 
can begin. Let us begin with you, Ms. Collins. Welcome and 
thank you for your patience.
    I note you have a fine assemblage with you from the various 
Forest Service offices, and as a former supervisor from Bend 
you know the area well and just please proceed with your 
testimony. If you've prepared remarks for the record they will 
be included and if you can highlight your major concerns in 5 
minutes or so that would be great.

 STATEMENT OF SALLY COLLINS, ASSOCIATE CHIEF, FOREST SERVICE, 
   DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY JEFF BLACKWOOD, 
  FOREST SUPERVISOR, UMATILLA NATIONAL FOREST; LESLIE WELDEN, 
    FOREST SUPERVISOR, DESCHUTES NATIONAL FOREST; AND NANCY 
          GRAYBEAL, DEPUTY REGIONAL FORESTER, REGION 6

    Ms. Collins. Good morning, everybody. It's a pleasure to be 
here today as always in Central Oregon. Lots of family, friends 
and----
    Senator Wyden. Folks, we have an awful lot of discussion 
there in the back and it's not going to be possible to hear the 
witnesses.
    Ms. Collins. Actually, let me ask them because I was in the 
back row. Can you all hear me? Okay. It's not cutting out? 
Raise your hand if it's cutting out. It kind of hard to hear.
    As the Senator said, we have some folks behind me that can 
answer some specific questions about Oregon and people that 
I've worked with, Leslie and Jeff Blackwood and Nancy Graybeal, 
for many years, and I admire and respect and they'll be here to 
answer any questions that come up specific to Oregon that I 
can't answer.
    So we look forward to assessing these issues about 
environmental health on the east side of Oregon together. I've 
summarized my testimony, so let me just make a few points. In 
the 13 years that I lived in Oregon, on the east side of 
Oregon, our communities experienced unprecedented change. The 
population doubled in central Oregon. Our economy shifted. New 
problems and opportunities emerged.
    Collectively, taxing, growth issues, youth at risk, 
education, expansion, transportation crises and changes in our 
natural resource economic base. For communities further to the 
east, the traumas and the economic shift have even been more 
traumatic. All of these communities, I mean I can't think of 
one, have rallied to adapt, to diversify and to work to 
maintain the kind of quality of life that makes people want to 
live and work here.
    And while the story is different in every community, it is 
true that all communities on the east side of Oregon have 
experienced great change. We have strong communities here in 
Oregon and we are willing to work for the changes, but it isn't 
easy and it hasn't been easy, and we want and need to figure 
out ways to help. So what I'd like to talk about today is to 
summarize briefly the forest health situation as we see it in 
eastern Oregon and then move on to what I believe are some 
areas of substantial agreement around which I think many of the 
interests can come together on.
    And I really do believe this and I believed for many years 
when I lived here in central Oregon that the forest health 
situation and forest ecosystem health concerns provides one of 
the best opportunities to bring people together and to really 
collectively problem solve, to move beyond polarized positions 
and beyond political rhetoric and really get some work done.
    I think the opportunities are there and we have a community 
interested and focused on delivering on that. As most of you 
know, the catastrophic fires of the last several years have 
highlighted this problem that's been developing for decades. 
The growing susceptibility of many Western forests to insect, 
disease and catastrophic fire. And I don't need to say to all 
of you that this problem is very much related to a century of 
fire suppression, and it's going to take a lot to solve this 
problem and we are not going to be able to do it overnight.
    We are looking at, even under an active restoration 
approach, using the most optimistic assumptions, these forests 
with large widely spaced Ponderosa pine and Doug firs could at 
best be increased to about two-thirds of their historic 
abundance over the next century, just because it takes that 
long to grow trees and create that kind of structure.
    The most significant issue facing national forest 
management in eastern Oregon over the next two decades is going 
to be the problem of fuel build-up and declining forest health 
and their subsequent ecosystem effects on diversity and 
sustainability. Senator Wyden, it's really appropriate that you 
came to Oregon to have this kind of hearing because of a couple 
of things. We have a long history of problem solving in a 
collaborative way here.
    I think about a decade ago, 15 years ago when we started 
working on Newbury Monument, we started working on the Metolius 
while we were working on this project that involved 17,000 
acres. Now we started working on that a decade ago and started 
building a base of support and understanding for many, many 
years. Applegate Partnership, the Eastside Citizens' Panel has 
been very effective. We've been working together on many issues 
and, again, I think this is a great place to be talking about 
what we can do together.
    Some of the examples, and some of the others I'm not going 
to touch too much on, are the Blue Mountain Demonstration 
Project. Again, it got kind of off to a rough start. Seemed 
like not enough was happening fast enough, but we're now seeing 
some great progress there. And I think there's a brochure in 
the back of the room that talks about some of the 
accomplishments.
    The Lakeview Sustainability Initiative, great work. And 
just many other examples. The use of the Wyden Amendment pretty 
extensively as well as the County Payments Legislation has 
resulted in about $13 or $14 million coming back to seven 
different counties for their RACs for lots of good restoration 
work. Those RACs are going to be and they have been so far very 
successful.
    Now, many of you have been reading about and hearing our 
chief, Dale Bosworth, talk about his frustration over analysis 
paralysis. How long it takes us to get through a process of 
project planning as well as planning for forest plans. We are 
looking at a number of ways to tackle that problem and we've 
got sessions ongoing at the national level with U.S. Fish and 
Wildlife Service and the Council of Environmental Quality, and 
our agency partners as it relates to the National Fire Plan, as 
well as--well, let's just basically say all of our work, and we 
believe we've got an environment now where we're going to have 
some productive discussions and we're encouraged by that.
    We are also doing a lot internally, and I think this Region 
6 in Oregon and Washington has done quite a lot to try to make 
the National Fire Plan in particular much more effective 
through its expedited ESA consultation processes as well as 
some expedited eco process. So people are working on that and I 
think coming up with some really good ideas.
    So again we are looking at ways that we can cut through a 
lot of the analysis that we have been having to--what's really 
happened on that front is that over the years, we've 
accumulated a lot of process. We've had the National 
Environmental Policy Act for about 30 years now, and we are 
really looking at how a series of court case decisions over the 
last couple of decades have required much more than is actually 
necessary to accomplish the work on the ground. So we're 
working with them to see where we might be able to make some 
modifications.
    And as I said, I want to conclude but I think this issue of 
forest health offers a lot of opportunities to come together. 
I'll be interested to see what you all think about what I think 
our areas of consensus are, but let me just name a few because 
I think we do have broad agreement on some concepts. Let's talk 
about these.
    First, the forests are out of balance and need to be 
treated through a variety of tools to bring them back to a 
condition that's sustainable and resilient. Second, that we 
agree that ecosystem health is a key goal of providing for 
sustainable ecosystem dynamics. Third, that fuels reduction is 
critical to the health and safety of the communities and the 
safety of fire fighters fighting those fires, and that without 
fuels reduction activities our fires will burn hotter, they 
will cost more and will do more ecological damage than they 
would if the forests were in balance.
    We agree, I think, that fuels reduction activities that can 
help us begin as wild fires, and we've seen example after 
example right here in central Oregon of that. We also agree 
that accountability is essential. It's been one of the 
hallmarks of what Dale Bosworth is talking about. We need to be 
able to deliver on our commitments, do what we say we're going 
to do and be fiscally accountable in every way. And we also 
know and agree that monitoring is essential to know that the 
work that we're accomplishing is getting done and having the 
effects that we want it to have.
    We also agree that sound research is essential to guide our 
efforts in all of that. We agree that the commercial value of 
products can and should be captured and utilized to help 
sustain communities, rural communities, and to help sustain 
mill capacity. I think we agree that alternative products made 
of small diameter material offer potential for economic 
diversification in the wood products industry, and we are doing 
quite a lot on that front, and I'll be happy to talk about that 
some more.
    We also agree, I think, that biomass can play an important 
role in the thinning of forests and supporting an alternative 
renewable resource. And finally, I think that we agree that we 
need to get some creative ideas out there on the table like 
stewardship contracting, which offer new ways for people to 
come together on the land and talk about what needs to happen 
in their watersheds. Many of the concepts included in 
stewardship contracting we have consensus on.
    I think we are challenged by and we have some areas of 
disagreement that we need to spend some time talking about and 
those are how fast do we go and how much do we treat where and 
first? I think we're also challenged by how certain we can be 
of a continuous supply of whatever that product is that we are 
trying to provide, whether it's small diameter material or 
biomass or any other alternative use that we might find for 
this material.
    And finally I think we're challenged by how we work 
together. Are we going to find a way to work together so that 
we're not polarized, but that we find ways and maybe it 
hundreds of ways that we can collaborate that requires all 
sides to come together and talk, that we build solid working 
relationships together so that we can begin making action a 
reality.
    Senator Wyden, I really want to say thank you for having 
this hearing and inviting me and holding it in Oregon and in 
eastern Oregon and highlighting the issues that we have here. 
And if it's okay with you, would it be all right for me to just 
ask if anyone behind me has any comments to make?
    Senator Wyden. Sure.
    [The prepared statement of Ms. Collins follows:]
 Prepared Statement of Sally Collins, Associate Chief, Forest Service, 
                       Department of Agriculture
    Mr. Chairman, thank you for the opportunity to be back here in 
Redmond today to discuss forest health issues of eastside Cascades 
ecosystems. I am Sally Collins, Associate Chief, USDA Forest Service. I 
have with me today, Deputy Regional Forester, Nancy Graybeal and 
Deschutes National Forests Supervisor, Leslie Weldon.
    I will talk about three perspectives today:

          1. The current forest health situation.
          2. The important connection of local communities to resource 
        solutions.
          3. Complex legal and policy concerns associated with forest 
        health project planning and implementation. Forest Health in 
        Eastern Oregon.
                    forest health in eastern oregon
    A number of studies have been made which demonstrate the profound 
ecological changes that have occurred in Western forest landscapes. 
These studies record dramatic increases in the understory density and 
decreases or complete elimination of both the aspen component and the 
herbaceous understory in conifer stands. In addition, grasslands have 
become woodlands and open woodlands have become dense forests. Events 
of the last several years have spotlighted the results of these changes 
that have been building for decades--the growing susceptibility of many 
Western forest areas to insects, disease, and catastrophic wildfire. 
Ironically, the cause of these problems is a century of reduced 
presence of fire in these ecosystems. And, it will take time to address 
these issues. Under an active restoration approach, using the most 
optimistic assumptions, forests with large, widely spaced ponderosa 
pines and Douglas-firs could at best be increased to about two-thirds 
of their historical abundance over the next century.
    The twin problems of fuel build ups and declining forest health, 
and their effect on ecosystem diversity and sustainability, are likely 
to be the single most significant environmental challenge facing 
National Forest managers in Eastern Oregon over the next two decades. 
The challenge will be great physically and biologically because such 
problems are extensive on federal forest lands.
    It will also require the Forest Service and the forest conservation 
community to come to grips with the issue of whether and how humans 
should intervene in natural forest ecosystems. Land management agencies 
are faced with the challenge of restoring forests to healthy 
conditions, and assuring species conservation while producing a 
sustainable flow of resources.
    Studies over the last decade, such as the Interior Columbia Basin 
Science Assessment, characterize much of eastern Oregon as an area of 
low ecological health. These studies looked at factors such as current 
conditions of hydrologic functions, wildlife and fisheries habitats and 
vegetation. Natural disturbances occurring in landscapes that are not 
functioning within historic parameters can be more intense and larger 
in scale than occurred in the past. Such ecologic factors, coupled with 
low economic and social resiliency of rural communities, set the stage 
for ongoing partnership efforts currently underway.
                 collaboration in forest health efforts
    How do we propose to proceed with this apparently massive 
undertaking? The federal government cannot do it alone. There are 
several important collaborative efforts between the responsible federal 
agencies with each other and with the people and communities of eastern 
Oregon that address forest health problems east of the Cascades. Let me 
highlight some examples:

   Blue Mountain Demonstration Area (BMDA)--A series of 
        projects on both private and public lands that include 26 
        projects on private lands. Grants of over $800,000 are already 
        allocated through the Watershed Restoration and Enhancement 
        Agreement Authority. Expected outcomes from these projects 
        include 800 acres of thinning and forest fuels reduction, 3535 
        acres of noxious weed treatment, 163 acres of wetlands 
        restoration, four miles of stream restoration and five miles of 
        road restoration. BMDA accomplishments in 2001 include 61 
        million board feet (MMBF) offered in timber sales on national 
        forest lands, 132 miles of stream restoration, 18,250 acres of 
        noxious weed eradication and over 6,000 acres of fuels 
        reduction. An Eastside Forest Citizen Advisory Panel worked 
        with the agency to establish performance standards to measure 
        efficiency and increase accountability. The current cooperative 
        relationship between the panel and the Federal agencies has 
        helped overcome early serious barriers. We support the 
        continuance and expansion of this partnership.
   The Chewaucan Project in Lake County, treats both private 
        and public lands, improving stream channel flows, eradicating 
        encroaching juniper, enhancing aspen stands, and reducing fuel 
        loads with thinning and prescribed fire. This project is 
        another example of working across land ownership boundaries 
        through authorities established under the Wyden amendment.
   The Lakeview Federal Sustained Yield Unit--The community of 
        Lakeview, Oregon and the Fremont National Forest reworked a 
        policy established under the Sustained Yield Forest Management 
        Act of 1944 to promote economic stability of forest 
        communities. The current policy provides small diameter timber 
        from national forest lands to sawmills in the community of 
        Lakeview. The overriding management emphasis within the unit 
        lands is ecosystem restoration and maintenance.
   La Pine, Oregon residents have received grants awarded 
        through the National Fire Plan. Seven families pruned and 
        thinned trees around their homes and installed metal and 
        composition roofs. Later, when the 146-acre La Pine wildfire 
        broke out, firefighters were able to use these seven properties 
        as an anchor to stop the fire from spreading.
   The Secure Rural Schools and Community Self Determination 
        Act of 2000 (PL 106-393) has brought $13,696,607 Title II 
        dollars to seven Resource advisory Committees (RACS) in Oregon. 
        A recent Regional Office award of a Title II RAC project was to 
        the Lake County Resources Initiative for $132,490 to conduct 
        monitoring of these ongoing treatments.
   The Collaborative Approach for Reducing Wildland Fire Risks 
        to Communities and the Environment: The Ten Year Strategy-
        Implementation Plan signed just last week in Boise, Idaho will 
        ultimately result in many projects to reduce fuels and improve 
        forest health throughout Oregon. Governor Kitzhaber and his 
        office were highly visible in leading the coordination between 
        the Western states and federal agencies.
                       legal and policy concerns
    Many factors contribute to agency challenges to efficient 
management to improve forest health in eastern Oregon. Certainly 
project planning and the application of environmental laws and 
regulations and policies are critical. Other complications involve 
increasing analysis requirements brought about by case law and in some 
instances new agency policies; new and sometimes conflicting science; 
and new species listings under ESA that ultimately require a higher 
level of analysis to assure species conservation. As analysis 
requirements have grown, the agency is suffering from a drain of NEPA 
analysis skills. To address these concerns, the agency is currently 
exploring or taking a number of actions. For example:

   Reducing, simplifying, and in some instances eliminating 
        analysis requirements where this can occur without reducing the 
        quality of decisions or the adequacy of public disclosure;
   Contracting for skills or analyses where this can 
        effectively meet agency needs;
   Better focusing NEPA analyses on individual or connected 
        Federal actions rather than attempting to combine NEPA analyses 
        for numerous independent actions;
   Emphasizing the importance of quality control to reduce the 
        number of instances where NEPA analyses are found to be 
        inadequate through administrative appeals or litigation.

    A task group has been working on ways to speed up the consultation 
process required by ESA. Starting with the National Fire Plan process, 
which identified project design criteria, the task group adapted it for 
the BMDA. Once completed, this process will allow agreement on the ``no 
effect and not likely to adversely effect'' calls. This is likely to 
expedite consultation on up to 40% of Forest Service projects in the 
area. With increased listings of T&E species in the 1990's there is an 
increased consultation workload. Staffing demands must be addressed in 
eastern Oregon offices of the U.S. Fish and Wildlife and the National 
Marine Fisheries Service. The Fiscal Year 2003 President's Budget 
includes $15 million to reimburse Federal agencies responsible for 
expedited ESA consultations.
    Stewardship Contracting authority is currently being tested under 
the ``Stewardship Pilot'' program that allows for restoration 
treatments on acres that would otherwise not have been treated. 
Application of this authority is limited in number but, BMDA partners 
are interested in using a pilot approach to help achieve forest 
restoration goals. Long-term partner commitments, such as those of 
Wallowa Resources, Grande Ronde Model Watershed, and others have worked 
long and hard to make BMDA successful.
    A major area of disagreement has been over how much commercial 
timber is available for harvesting and processing on federal lands 
within the BMDA. To answer this question, a joint study with Oregon 
State University, Oregon Department of Forestry and the Forest Service 
has been evaluating the type and amount of vegetation. Preliminary 
findings indicate that less than 20% of overstocked stands would be 
able to support a commercial timber sale.
    There is general consensus from more than 90 years of fire research 
that a fire burns hotter and spreads faster when there is more fuel 
available to feed it. The Cohesive Strategy prescribes an integrated 
strategy of thinning and prescribed burning to reduce hazardous fuels. 
The USDI-USDA Joint Fire Science Program is supporting the National 
Fire Plan through a long-term study to assess how ecological processes 
may be changed, if ``surrogates'' such as cuttings and mechanical fuel 
treatments are used instead of, or in combination, with fire. More 
landscape-scale, adaptive management research is needed. It is 
expensive and takes time to produce conclusive results. However, it is 
imperative that these research projects go forward without long delays 
from appeals and litigation. The purpose of research is to find 
answers; not to object to or delay decisions because we don't have all 
the answers.
    Finally, maintaining appropriate funding for hazardous fuels 
reduction activities (e.g. thinning and prescribing fire) is critical 
to reduce the risks associated with wildfires. This includes both 
National Forest System fire funds and Cooperative Fire funds in the 
State and Private Forestry budget as well as Research and Development 
funds. Without focused and ongoing fuel reduction efforts, progress 
will be limited on landscape scale processes that affect fire behavior.
                                summary
    It is clear that restoring eastside forest health requires a 
significant investment of time and resources. Communities and the 
Forest Service share the common goals of sustainable forests and 
grasslands. The Forest Service remains committed to working together 
with people, integrating our thinking with action to realize these 
potential opportunities.
    This concludes my testimony. I will be pleased to answer any 
questions you or the subcommittee may have.

STATEMENT OF NANCY GRAYBEAL, DEPUTY REGIONAL FORESTER, REGION 6

    Ms. Graybeal. I guess I can say good afternoon now. I'm 
Nancy Graybeal. I'm Deputy Regional Forester for the Forest 
Service here in the northwest region. And again, I'm really 
grateful to be here accompanying Sally to discuss these really 
important issues to the local areas as well as the region. And 
I just want to commit to you all that we understand very 
clearly and I've worked really hard and no action is not an 
option, not for our communities, not for our forest. The gap is 
growing and the cost to communities and forests and watersheds 
really is too great. And we are here and committed to hear your 
ideas and suggestions on how we who manage the public land can 
be much more important players and offer you the services, 
forests, watersheds and communities that we really wish to 
have. And we're open and eager to answer any questions and 
discuss these issues. Thank you.
    Senator Wyden. Okay. Very good. Mr. Ferrioli, we'll proceed 
with you.

           STATEMENT OF TED FERRIOLI, STATE SENATOR, 
                           SALEM, OR

    Mr. Ferrioli. Thank you, Mr. Chairman. Senator Wyden, thank 
you. I'll echo the comments of the rest of the panelists for 
having this hearing. Thank you for sponsoring and carrying 
legislation to help stabilize communities. I feel that the 
Oregon Legislature has failed you in not making sure that the 
benefits of that legislation were distributed to schools as it 
was intended, but I really appreciate your ongoing efforts in 
that direction.
    And finally, your advocacy of local input and more local 
control for communities and Federal resource management is 
something that we very deeply appreciate. It's my pleasure in 
District 30 to represent Baker, Gilliam, Grant, Harney, 
Jefferson, Malheur, Sherman, Wasco, Wheeler and parts of 
Clackamas, Deschutes and Marion Counties. District 30 is about 
30,000 square miles. It has the same population as your Senate 
District, just more distance between households.
    I'm the joint chair of the Legislative Committee on Natural 
Resources and chair of the Senate Revenue Committee. And I only 
mention those two things, Senator, because in Oregon natural 
resources and revenue are connected. I am very disturbed and 
actually very fearful of the prospects of having to go back to 
Salem early in June for a legislative special session facing a 
potentially $1 billion shortfall in revenue in Oregon's budget. 
Much of that in the past has been derived from rural 
communities that produce value-added wood products and 
agricultural products.
    The globalization of our markets, competition from Canadian 
producers and elsewhere has changed the face of the market. But 
also what's been added to that and what exacerbates that 
problem is the fact that Region 6 has the best planning and 
analysis process in the world and the worst outputs, the 
poorest forest health and the most devastated local 
communities. So I would submit to you that we've traded is 
procedure and process and productive discussions for outputs. 
And the outputs that used to support our schools and our roads 
and keep our communities healthy, and the entries in the forest 
that used to keep our forest free of a lot of fuels and 
debilitating wood build-ups is what is lacking.
    Judge Grasty on his panel mentioned that the Forest Service 
seemed to manage the forests so they could burn. I was 
wondering if he hadn't heard some of the rank and file Forest 
Service's motto, which is burn to earn. We spend millions and 
tens of millions of dollars in forest fire suppression and 
forest fire fighting. We can't seem to get our act together to 
actually enter the forest to do the fuel reduction that we need 
to do to restore forest health.
    I brought testimony, which will be entered into the record, 
I'm sure. I just wanted to bring up one example, the Crawford 
Vegetative Environmental Assessment. Thirty-three thousand 
acres that everybody agrees needs to have fuel load reductions 
and ladder fuel removal and management of stand density and 
decommissioning of unneeded roads and improved watersheds. This 
project will treat 20,000 acres that's been deemed as having a 
very high fire hazard potential, about 13,000 acres that has a 
very high potential for crown fires, the most devastating and 
most rapidly moving type of fire.
    We all acknowledge that this kind of fire can create 
terrible impacts on soil erosion and wildlife, and it's the 
very kind of thing that most folks agree needs to happen in our 
national forests to improve forest health. In fact most people 
agreed with that when this project was first proposed in 1993 
as the Flat Project. They also agreed in 1994 when it was 
carried forward as a project into the next fiscal year and 
every year thereafter until in 1999 the project was repackaged 
as part of the Blue Mountain Demonstration Project, and only 
nearly a decade after the conception of this project comes out 
as a project under the Blue Mountain Demonstration Project 
banner.
    The bottom line, Senator, is that this project has been 
reworked a dozen times, delayed a decade and now comes as a new 
repackage, and it's called essentially improving or increasing 
shelf life through repackaging. This is exactly the example 
that you heard with the discussions over the Steens Mountain, 
where the Agency's given the order to continue a management 
direction in your legislation on the Steens, assumes to have 
additional authority and then makes an issue and requires an 
eco process. And basically instead of an outcome, which is a 
continued management direction for grazing, you get a process 
that threatens to involve hundreds of people and takes several 
years and on the face of it it appears to be insoluble.
    It is in fact as the chief of the Forest Service called it 
analysis paralysis. That paralysis has in fact been so 
frustrating and created such fear and anger in my community 
that I am speaking to you as a resident of the only U.N. free 
zone in the State of Oregon. Some people may think that that 
makes Grant County residents look somewhat ridiculous, but I 
will tell you that vote is a referendum on the inability of the 
National Forest System to manage for sustainability. Not only 
sustainability of wildlife and watersheds in its own forests, 
but sustainability of the communities that are nested on the 
landscape of the forest.
    I have some specific recommendations and I hope the 
committee will be able to carry those forward. First of all, 
there is over 65 million board feet of carryover in the Malheur 
National Forest that's been cut in this analysis paralysis, and 
that 65 million board feet is in a variety of stages of 
completion in terms of project delivery. They have had 
environmental impact statements or environmental assessments 
completed. There is some work left to be done and the Agency 
simply lacks the personnel or the will to put this project 
forward.
    We absolutely have to do, as the Senator suggests, 
reinstill accountability and judge the success of this Agency 
by its accomplishments, not by its willingness to participate 
in meaningful discussions. Accomplishments and accountability 
are lacking.
    Then, furthermore, the Agency has lost some capacity within 
itself. The spiral, the death spiral of national forest 
management is illustrated in the graph that I included in my 
testimony, and it shows that from 1999 to fiscal year 2002, the 
outputs of the Malheur National Forest have dropped to near 
zero, even though the Congress has funded this forest for a 
significant output of goods and services.
    So I would say that the capacity or the competence is 
lacking in this Agency. And where either capacity or competence 
is lacking, this Agency ought to be required to contract 
outside the Agency with the private sector using stewardship 
contracts, as Ms. Collins mentioned, or just outright 
contracting for NEPA processes that would bring some of these 
carryover projects to fruition and bring them forward out of 
the Agency.
    Finally, I guess, Senator, the fact of the matter is that 
the local community, Grant County, voted on again what I'll 
call a referendum on lack of management, lack of accountability 
and lack of faith in this Agency to do its mission. I sincerely 
hope that you will take the time to read the editorial that 
appeared in The Sunday Oregonian and actually look at the whole 
commentary section, which relates to the fact that the east 
side of the State of Oregon has the highest level of poverty, 
the highest level of hunger, the highest level of unemployment, 
and the highest level of bureaucracy of any area of the State. 
And I would submit that those two things are connected.
    We simply have to make the decision whether we agree with 
some of the environmental community that believe eastern Oregon 
is the site of all our future ghost towns, or whether we 
believe that we ought to take active management and implement 
the actions that we have heard described as necessary and 
desirable. And that's our challenge here, Mr. Chairman, is 
whether or not this Agency has the will and the capacity to 
actually implement with accountability the outputs that these 
communities depend on.
    Our schools are currently in Grant County running on a 4-
day week as we do not have a 5-day school week in the State of 
Oregon as far as Grant County is concerned. We are now looking 
at shortening the school year. We are looking at other 
districts in the State of Oregon having to go to a 4-day week 
because we simply do not have the revenues and the resources 
that we would have if we actively managed Oregon's natural 
resource base.
    It's approaching criminal, Senator, and I'm terrified that 
the outcome may be far more expensive than communities in 
Oregon should ever have to endure. So I'm hopeful that your 
hearing acts as a catalyst. That we create here a public record 
that will spur your colleagues in the Senate and in Congress to 
action. We simply cannot afford to dither any more while our 
forests burn and our schools close. Thank you.
    [The prepared statement of Mr. Ferrioli follows:]
      Prepared Statement of Ted Ferrioli, State Senator, Salem, OR
    Honorable Senator Wyden and members of the Committee, thank you for 
the opportunity to appear before this committee and for your personal 
commitment to the issues of forest health and community stability. Your 
willingness to explore these issues, particularly in this venue, offer 
hope and encouragement to citizens whose communities are suffering from 
the Nation's highest rates of unemployment, and whose forestlands, 
watersheds, and wildlife habitats, reflecting years of neglect and 
mismanagement, are among the Nation's least resilient.
    Other witnesses may recap the history of fire exclusion on the East 
Side and the current, deteriorated condition of forest health on our 
national forests. These conditions are documented in the Interior 
Columbia Basin Ecosystem Management Project Environmental Impact 
Statement and in the Cooperative Mortality Report produced in 
cooperation between USDA Forest Service and Oregon Department of 
Forestry.
    My objective today is to help clarify the connection between 
deteriorating forest health, deteriorating community stability, and the 
cost of inaction by the USDA Forest Service to the taxpayer, to the 
ecosystem and to local citizens.
        crawford vegetative management environmental assessment
    This project would treat approximately 33,000 acres on the Blue 
Mountain Ranger District, Malheur National Forest, with prescriptions 
designed to reduce fuel load, remove ladder fuel promote lower stand 
density, decommission unneeded roads, improved watershed function and 
move treated stands toward desired future old-growth conditions.
    More than 20,000 acres in the project area have been assessed as 
having a high fire hazard level, including 13,411 acres exhibiting high 
potential for crown fire. According to the EA, ``Forest fires under 
current conditions are more likely to burn hotter, follow the available 
fuel ladder fuels into tree crowns and spread over larger areas. This 
type of fire behavior can cause undesirable impacts to soils, 
vegetation and wildlife habitat. Such fires leave barren, sterile soils 
that take considerably longer to revegetate, leaving the ground more 
vulnerable to erosion.'' (Pg. 10 Purpose and Need, Crawford Vegetative 
Management Environmental Assessment, USDA Forest Service, November 
2001).
    In addition, the project is designed to produce 15.2 miles of road 
closures, 24.5 miles of road decommissioning, hardwood protection at 22 
sites, prescribed burning on 9,498 acres and approximately 7.5 MMBF of 
timber which could be captured by the local community for conversion 
into primary and value-added forest products.
    This project defines precisely what is needed to improve forest 
health on the project area, and features components that will provide 
local employment opportunities and economic values.
    Amazingly, these actions were first proposed and funded in 1993 as 
the Flat Project Environmental Assessment, and every year thereafter, 
as the project was carried forward on the books and in the work plan 
from 1994 to the present.
    Each year, as the project was carried over, it was included in the 
budget proposal and used to justify funding for the Malheur National 
Forest. The timber volume represented by the project was included in 
the annual plan of operations for almost a decade. During each 
successive year, funds were allocated and expended on the project.
    Finally, in 1999, this EA was renamed and became part of the Blue 
Mountain Demonstration Project and is only now, nearly a decade after 
conception, ready to move forward. Similarly, the SE Galena Project, 
involving treatment of 56,800 acres proposed for completion in 2001. 
This project was designed to improve riparian conditions, update travel 
management plans, reduce fuel loads and ladder fuels, correct 
overstocking, eliminate noxious weeds and restore wildlife habitat.
    This project has been scheduled for completion, then delayed, five 
separate times, for a total delay of fifteen months so far, with 
potential for much more significant delay now that the project is being 
broken up and reworked.
    In all, more than 65 million board feet of volume on the Malheur 
National Forest, and tens of thousands of acres scheduled for needed 
management services have been deferred, delayed, cancelled, put on 
indefinite hold or are otherwise unavailable for projects scheduled by 
the agency and funded by Congress over the past decade.
    Loss of revenue to the federal treasury and loss of income to the 
local employment base is obvious. Far less obvious, but just as real, 
is the damage to forest ecosystems where restoration plans have been 
delayed or cancelled. Maddeningly, these projects continue to be 
carried forward, reworked (but rarely offered for sale) and used to 
justify continuation of federal investment of human and financial 
resources.
    No one benefits from this exercise. As I see it, environmentalists 
are being cheated out of restoration programs advocated and funded by 
Congress, local citizens have been cheated out of economic and social 
benefits advocated and funded by Congress, and taxpayers are being 
cheated out of the return on investment of their tax dollars in 
national forest management.
    Even forest service workers lose as funding cuts resulting from 
lack of accomplishment, low return on investment and failure to 
complete scheduled projects drive a cycle of layoffs, consolidations 
and office closures increasing unemployment in rural areas.
    Over the past decade (1992-2002), Malheur National Forest has 
accomplished less than half of the program of work authorized and 
funded by Congress. Less than half of the forest health treatments were 
accomplished, as illustrated by the attached statistical analysis and 
graph.
    To reach a solution, we must break the cycle of gridlock, return 
accountability, and demand that forest health become the driver of all 
our management activities. Immediate action is needed to protect 
fragile and fire-susceptible areas from catastrophic wildfire that has 
become common in the West.
    We must also act immediately to increase economic and social 
opportunity in timber-dependent communities, or risk the loss of the 
well-trained workforce and mill capacity necessary to meet ecosystem 
management objectives now and in the future.
                            recommendations
   All Eastside national forests have ``carry-over'' projects 
        in their work plans in various stages of completion. On the 
        Malheur NF, nearly 65 MMBF fit this description. Bringing 
        forward all available Eastside ``carry-over'' projects would 
        help deliver forest health benefits previously advocated and 
        funded by Congress and help alleviate timber shortages, 
        stabilizing local timber-dependent economies.
   Accomplishment and accountability must be reinstituted 
        within management agencies. Failure to act has brought forest 
        health and community economic issues to a crisis.
   Where capacity or competence is lacking, agencies should be 
        required to contract with the private sector, using Request for 
        Proposals based on existing funding authorizations to complete 
        pending projects.
   Private sector contracting of NEPA work could help move 
        ``carry-over'' projects quickly and efficiently, improving the 
        record of accomplishment and accountability and helping to 
        restore confidence in agencies.
                             attachments *
    A statistical analysis of STARS Report 37-2 and 38-2 details Region 
6 Eastside Forest Timber Sale Program and Accomplishment for fiscal 
years 1993 through 2002 reveals that accomplishment for Malheur 
National Forest averages only 48% for the past decade.
---------------------------------------------------------------------------
    * The attachments have been retained in subcommittee files.
---------------------------------------------------------------------------
    The graph, titled Malheur National Forest Timber Sale Program, also 
based on STARS Report 37-2 and 38-2, demonstrates trends evident from 
fiscal year 1996 through fiscal year 2002.
    Editorial, Grant County's Fury, The Sunday Oregonian May 26,2002

    Senator Wyden. Well, thank you very much, Senator. You make 
a number of extremely important points. We are going to retain 
those articles in the subcommittee files. I think they make 
such an important point. And I will just tell you, as you know 
my home is Portland and I love Portland. It's a wonderful home 
town. But I am not a U.S. Senator from the city of Portland. 
And as far as I'm concerned we are not back economically until 
Grant County comes back.
    With you I've seen the hurt in these open, you know, 
community meetings, and these are people who work hard, play by 
the rules and the government is letting them down. It's just 
that simple. And I'll have some questions for the government 
folks here in a moment.
    I want to thank you for voicing that important issue and 
for the cooperation you've shown me and our office in working 
with you. You can believe we will be back with the County 
Payments Bill to get every single dime of that money, every 
dime where it was intended, which is to the rural communities, 
and we'll have some discussions about that.
    John Morgan, welcome. I've worked with you often and know 
the frustration you all have felt at Ochoco and look forward to 
your statement.

   STATEMENT OF JOHN MORGAN, RESOURCE MANAGER, OCHOCO LUMBER 
                    COMPANY, PRINEVILLE, OR

    Mr. Morgan. Thank you, Senator Wyden, and thank you for 
coming to central Oregon to discuss the issues on energy and 
natural resources and also on economics, and they all tie 
together very well. I am resource manager for Ochoco Lumber. 
And I spent my first 6 years in the U.S. Forest Service, and 
the last 29 years with Ochoco, so I have quite a forestry 
background and have seen a lot of changes in this length of 
time.
    My testimony today is also on behalf of the American Forest 
Resource Council and its nearly 80 forest landowners and forest 
product companies throughout the twelve States that it 
represents on the west side of the Great Lakes. Our forest 
products industry has sales of over $195 billion annually and 
employs about 1.6 million people, so it does have a major 
impact on the economics in our Nation.
    Ochoco Lumber Company, the members of AFRC, the forest 
products industry at large are committed to sustainable 
forestry in all forest lands whether it be public or private. 
Specific to Ochoco Lumber Company, and I think you're aware of 
that, we were in business for 63 years and closed the doors 
last July.
    It all started in Prineville in 1938 with the first mill 
started there. We've made quite a contribution and investments 
throughout the years. In 1978, because of the change in the 
species and the size of timber, we retooled to do that. Again 
in 1988 we invested over $15 million to build a small log mill 
because that was the type of wood that was being commercially 
thinned from the forest.
    However, because of the lack of timber being sold and some 
of it being sold that wasn't economical for our operations, 
again we had to close the doors. I know that you're familiar 
with the Prineville area. At one time it had five sawmills and 
a chip mill. None exist today. Redmond here where we sit today 
had a big plywood plant that closed. Bend had a large 
manufacturing facility with both large capability and small 
capability closed. And recently in the last 3 or 4 weeks, 
Korpine, which actually used a lot of products from the 
sawmills closed its doors. So the impact has been great to the 
workforce, but also the tools are being lost for the U.S. 
Forest Service and BLM to manage the forests, along with the 
private lands, that is a major ownership also in this area.
    We still have our sawmills in Prineville. We're sitting 
there kind of in a moth ball state. We would like to reopen 
them, but again it's lack of resource availability that we have 
them closed today, and until that changes they'll stay closed. 
And I don't again know how long we can sit on a piece of land 
67 acres without going forward to do something with it shortly.
    Forest health is a major concern of ours, and I would like 
to address with that four major issues today. Number one is 
active forest management, including timber harvest must be a 
part of the solution. And, you know, with that we need to be 
able to manage--the forest managers need to be able to manage 
all ages and all size classes. It's hard to manage just a 
certain bracket of forest. I think we have to start with 
seedlings to old growth, and we have to be able to manage the 
entire landscape.
    As I mentioned before, timber harvesting is a tool and that 
tool is being taken away from both the BLM and the Forest 
Service to manage. And also with that the private lands. If 
there's any manufacturing facilities left it impacts us also.
    The second issue, there's enormous risks to private 
landowners. So much of the private lands, and we own 68,000 
acres, which isn't a great amount to manage but it's a lot to 
us, and many of these lands are at high risk because of the 
inactive management on Forest Service grounds and BLM grounds, 
because we're adjacent to or intermingled with Federal lands. 
And with fuel loading the way it is and through forest health 
issues, catastrophic fires are real and they do take private 
ground with it as it comes through in its path.
    The third issue is hurdles to the implementation of the 
national strategy on forest health. And as an investment we're 
concerned with the processes. The NEPA process, Sally talked a 
little bit earlier, has been driven more by bureaucracy than 
the ultimate objectives in the decisions that's best for the 
resources on the ground. And it is indeed a lot of good 
management possibilities.
    Lawsuits and appeals are prevalent and many of them are 
frivolous, and because of this it's purely a delay tactic and 
oftentimes it slows a project. And I think a good example of 
this is catastrophic fires and being able to harvest that 
timber immediately, and through the appeals and delays that is 
not happening and a lot of times the value is lost.
    Other land management policies such as PACFISH and INFISH 
and Eastside Screens, they were interim policies but they're 
still with us today, 8, 9, 10 years later, and they have a 
major impact. And also with that is the Endangered Species Act 
and the consultation and the time that it takes to work through 
the processes, and again delay is what is harming us.
    And the fourth issue I'd like to bring out is utilizing 
fuel reduction material to help produce electrical energy, and 
I think that this has potential. Millions of acres throughout 
the national forests and even private lands are overstocked and 
fire suppression is hard to suppress because of the 
overstocking. There should be some opportunities made available 
for the use of biomass. And I think that sometimes it can't 
stand on its own, so there might have to be some tax incentives 
or some grants made available in some communities that lack the 
infrastructure to be able to handle it on their own.
    And, Mr. Senator, various serious problems are facing our 
Nation's forests and we've heard a lot about that and we'll 
probably hear some more, but it affects 72 million acres on the 
national level and places at risk millions of private acres 
also. Thousands of rural communities are also affected by the 
management or no management that takes place in the decisions 
from that.
    We don't need to authorize additional studies or pilot 
projects. Our forests, wildlife and communities can't afford 
any more delay. We have the science. We have the 
professionalism and the trained managers that are in the work 
place or the workforce that are available today to go out and 
handle the task that is in front of us.
    What we need is leadership and we need leadership to act. 
And our expectation is that both the administration and 
Congress will provide that leadership to address the hurdles, 
provide the funding and to meet the challenges of improving 
forest health.
    Again, we along with AFRC and others thank you for being 
here today and to act on the issues that have been brought 
forward.
    [The prepared statement of Mr. Morgan follows:]
         Prepared Statement of John Morgan, Resource Manager, 
                 Ochoco Lumber Company, Prineville, OR
                           executive summary
   Our Nation is experiencing record breaking fire seasons that 
        are leaving in their wake millions of acres of blackened 
        forests and wildlife habitat, hundreds of destroyed structures 
        and the loss of human life.
   Report after report have documented the problem--we have 72 
        million acres of national forest, and millions of acres of 
        private land, and tens of thousands of rural communities that 
        are at risk to catastrophic wildfire. Many of the same reports 
        have prescribed the solution--active management, including 
        timber harvesting.
   There are numerous impediments that prevent the treatment of 
        our forest health crisis. We need to address a never-ending 
        environmental analysis process, overlapping agency 
        jurisdictions, conflicting management policies and inadequate 
        funding.
   The opportunity exists to utilize much of the excess forest 
        fuels to manufacture wood products, produce paper goods and 
        generate electricity that are so important to our nation's 
        economy.
   What is needed is leadership--leadership from the 
        Administration and Congress to aggressively address the problem 
        with the goal of protecting our forests, wildlife and 
        communities.
                               testimony
    Good afternoon, Mr. Chairman. My name is John Morgan and I am the 
Resource Manager for Ochoco Lumber in Prineville, Oregon. My testimony 
today is also on behalf of the American Forest Resource Council and its 
nearly 80 forest landowners and wood product manufacturers located in 
twelve states west of the Great Lakes. Our proud forest products 
industry has sales of over $195 billion annually and employs 1.6 
million people, making a significant contribution to our nation's 
economy. Ochoco Lumber Company, the members of AFRC, and the forest 
products industry at-large are committed to sustainable forestry for 
all forestlands, public and private.
    To start, I would like to tell the subcommittee a little about 
Ochoco Lumber. We started in 1923 and built our first sawmill in 
Prineville, Oregon in 1938. Originally, our log supply came exclusively 
from private lands because we had acquired the cutting rights to 
approximately 80,000 acres. The forests of central and eastern Oregon 
have been managed under a mixed aged scenario and harvest was done on a 
selective tree basis. The criteria for cutting the private land 
included removal of the dead, diseased and high-risk trees.
    Shortly before the end of World War II, the Forest Service began 
offering timber sales on the surrounding national forests. Since these 
forests were comprised of about 70 percent ponderosa pine, all of the 
sawmills in the Prineville area including Ochoco Lumber Company gained 
a reputation for producing quality ponderosa pine boards. In the late 
1970's we experienced the Wilderness debate and the RARE I and II 
assessments. During this period, timber sale projects that were planned 
for unroaded areas were put on hold. As a consequence, management was 
limited to those areas previously treated. Management objectives for 
these areas included improving forest health and reducing fuel loads. 
Prescriptions typically were removing larger dead and dying trees and 
thinning overcrowded stands.
    In response to these changing conditions, we installed new sawmill 
equipment in 1978 to better utilize the small logs being harvested from 
the national forests. These multi-million dollar improvements made it 
possible to continue to process large logs, but also efficiently handle 
the higher percentage of small logs. During this time, we developed new 
markets for products coming from the small logs while continuing to 
supply customers who were using the clear lumber for furniture, 
mouldings, and other engineered wood products coming from the large 
logs.
    As the next few years passed, it became increasingly obvious that 
the direction the Forest Service was heading was to do more thinning in 
the smaller diameter classes, so in 1988 we invested $15 million to 
build a small log sawmill to compliment the original sawmill. To remain 
competitive, we needed to adjust our sawmilling operations to more 
efficiently manufacture the increased percentage of small logs from the 
surrounding national forests. Our forecast at the time told us that a 
long-term balance had been struck. The Forest Service had decades of 
thinnings to do in conjunction with selectively harvesting large high-
risk trees.
    Also during this period we acquired more private timberland as an 
insurance policy. Currently, Ochoco Lumber Company has over 60,000 
acres of private timberland, and although our sawmills are starved for 
the raw materials growing on them, we have remained good stewards of 
the land, only harvesting what is sustainable from those lands. Our 
private timberlands only produce about 20 percent of our needs, and we 
will not deplete and degrade our lands short term to supply our 
sawmills.
    But on May 25, 2001, we made a difficult announcement that we were 
closing our Prineville operations. Prior to that, Ochoco Lumber Company 
was employing 180 people with a payroll of nearly $5 million, contract 
loggers and truckers were paid an additional $8 to 10 million and the 
U.S. Treasury was receiving annual payments totaling about $15 million 
for timber sales, which resulted in significant payment to the local 
counties. Finally, Ochoco Lumber has proven itself to be a very civic-
minded member of the community always willing to lend a hand or help 
support a good cause.
    The reality is that our mill is closed, while our forests and 
communities are threatened with catastrophic wildfires. The reality is 
that substantial efforts must be made to address the underlying cause 
of the problems facing our wildlands and the associated urban 
interface. If these efforts bear fruit, there may be an opportunity for 
our Prineville sawmill to begin operating again.
    The rest of my testimony will focus on four issues associated with 
existing forest health strategies, such as the National Fire Plan and 
suggestions for addressing them. The issues are: active forest 
management, including timber harvesting, must be an integral part of 
fuel reduction efforts; there are enormous risks to private forest 
landowners; there are hurdles that must be overcome to implement the a 
national program addressing forest health; and there is an opportunity 
to utilize fuels reduction material in the production of electrical 
energy.
    My emphasis here is on sound management practices that help promote 
the long-term sustainability of our nation's public and private 
forestlands. It is imperative that efforts be focused on protecting 
forests, wildlife and communities. In order to accomplish these 
important objectives, timber harvesting must be a tool available to, 
and used by, the Forest Service.
 issue #1: active forest management, including timber harvesting, must 
                       be a part of the solution
    Over the last decade, numerous efforts have identified the problem 
we are discussing here today. The disastrous effects of wildfires are 
mounting with each successive year. Already this year, nearly 3,000 
fires have destroyed over a million acres. Last year over 81,000 fires 
burned 3.5 million acres, killing 15 firefighters. In 2000, one of the 
worst wildfire seasons on record, almost 123,000 fires scorched 8.4 
million acres, killing 16 firefighters. There has been a long legacy of 
clear warnings and little action following the smoke of the last 
catastrophic wildfires.
    There is no escape from the conclusion--our forests are in trouble. 
Numerous reports have indicated that the most important tool that can 
help reduce the threats to our forests--timber harvesting. We are 
talking about common sense thinning to reduce the overly dense forest 
conditions that lead to catastrophic wildfires and destroy important 
ecosystems.
    The practice of thinning to reduce the potential for stand 
replacing crown fires works. Every day, our foresters see more and more 
examples of the efficiency of thinning to reduce the effects of 
catastrophic wildfires and substantially aid in the success of 
firefighting operations. For example, the Newberry II Fire on the 
Deschutes National Forest, the Hash Rock Fire on the Ochoco National 
Forest and many others are recent examples of the role thinning of 
forests plays in fire control successes. Harvesting of trees played a 
major role in containing and reducing the effects of each of these 
wildfires.
    The condition of the forests determines the risk of catastrophic 
wildfire and ignoring overcrowded forests along with the large 
component of dead and dying trees is clearly a prescription for 
disaster. As described above, millions of acres of national forests are 
at risk for catastrophic fires. As the GAO reports, ``timber harvesting 
may make useful contributions to reducing accumulated fuels in many 
circumstances.'' \1\ Further, a Forest Service research report states, 
``well-thinned, relatively open areas scattered across the landscape, 
interspersed with denser, less intensively managed areas, would provide 
a wide array of wildlife habitat, and would be a forest less prone to 
large-scale catastrophic wildfire.'' \2\ Failure to treat these un-
natural fuel levels dooms forest ecosystems and watersheds to 
catastrophic wildfires that are so devastating that it will take 
centuries for them to recover.
---------------------------------------------------------------------------
    \1\ Ann Bartuska, Letter to John Talberth, November 6, 2000.
    \2\ Dahms and Geils, 1997.
---------------------------------------------------------------------------
    In some cases, depending on local conditions, hazardous fuel 
reduction through prescribed burning or other means may be more 
effective than timber harvesting. However, in most areas of the West, 
the most effective and cost-efficient method to reduce fuels includes 
timber harvesting, and this tool should remain available to the Forest 
Service for reducing hazardous fuels. Furthermore, when timber 
harvesting is used as part of the solution, the opportunity to utilize 
this excess vegetation to manufacture wood and paper products or even 
generate electricity means that a portion, if not all, of the public's 
cost can be captured. This would allow for treating more acres within 
the budget limitations, providing economic opportunities for rural 
forest communities, while utilizing material that would otherwise 
simply go up in smoke. Ochoco Lumber and AFRC respectfully suggests 
that language should be included in all national plans and in relevant 
related documents specifically stating that timber harvesting is a tool 
available to the Forest Service and Department of the Interior to 
maintain and improve forest health.
    issue #2: there are enormous risks to private forest landowners
    Ochoco manages over 60,000 acres of some of the most fire prone 
forests in the Oregon. All of our management plans have one thing in 
common--how can we protect our forests from catastrophic wildfire 
losses. Our experiences and observations over the last 20 plus years 
have led to one inescapable conclusion--we must thin our forests to 
significantly reduce the fuel accumulations. We rely on existing 
authorities of the Oregon Forest Practices Act, the underlying science 
of fire management, our experiences, and the professional judgment of 
our foresters when we develop site specific harvesting plans to protect 
our forests. We are confident that our efforts in thinning and fuel 
reductions are effective in reducing the threats and, most importantly, 
they are developed in an economically efficient manner.
    We recognize that we cannot ``fireproof' our forests. But we can 
reduce the effects of wildfires by reducing the amount of fuel loading 
within our forests. Our principles are simple--open the canopy of the 
forest by thinning and reduce the potential for the most devastating of 
fires, crown fires. On areas nears roads and ridges where we logically 
fight fire, our fuel reduction efforts remove the largest amount of 
vegetation and trees. This allows fire fighting forces a chance to 
control the fire, improve the effectiveness of air attack and fire 
retardant applications and control ``backfires'' when they are 
necessary for wildfire control.As we move beyond these obvious defense 
zones, we thin our forests and leave more trees to achieve a balanced 
goal of reducing the potential for crown fires while maintaining 
adequate growth rates on our thinned stands.
    We can only do so much on our own lands. The greatest threat comes 
from the fact that our ownership, like so many other private forest 
landowners, is interspersed with federal lands which are in need of 
fuels reduction. Private forest products companies, like ours, as well 
as non-industrial forest landowners have aggressively tried to reduce 
the risks for catastrophic wildfires on their own holdings for many 
years, largely through the use of thinning. However, these efforts 
cannot be effective without the cooperation of our federal neighbors, 
since wildfires do not recognize property boundaries.
    According to the Forest Service, most of the 72 million acres of 
National Forest System lands at risk of uncharacteristic wildfire are 
not in the wildland-urban interface.\3\ However, because of limited 
resources, hazardous fuel reduction in many of these areas will be 
deferred for years. Accumulation of fine ground fuels and encroachment 
of shrubs and other vegetation beneath dominant canopies will continue. 
As a result, the likelihood of severe fire behavior in these areas will 
escalate. The forest industry is very worried about this situation, 
since these areas are precisely where our property is adjacent or 
intermingled.
---------------------------------------------------------------------------
    \3\ Lyle Laverty, USDA Forest Service National Fire Plan 
Coordinator, Statement before the House Subcommittee on Forests and 
Forest Health, March 8, 2001.
---------------------------------------------------------------------------
    The number of acres of public land that require hazardous fuel 
reductions far exceeds the number of acres treated by the federal land 
management agencies. The Forest Service's hazardous fuel reduction 
efforts have not kept pace with the steady increase in over-
accumulation of vegetation, outbreaks of insect infestations and 
disease, and accumulation of fine fuels even though these efforts have 
steadily increased over the past decade. The Forest Service estimates 
that of the land it manages which is at risk of catastrophic wildfires, 
given the current pace of treatment, it will take more than 30 years to 
treat the existing areas.
    Reversal of fuel conditions cannot occur overnight. Clearly, 
however, there is an urgent need to prevent fuel conditions from 
advancing at their current pace. It is not enough to provide funding 
for additional fire fighters and equipment. Ochoco Lumber and AFRC 
request increased appropriations in the next several, fiscal years, for 
hazardous fuel reduction efforts in areas at high risk of catastrophic 
wildfires. Additionally, we respectively request that the appropriation 
language recognize and emphasize funding collaborative partnerships 
with owners of inholdings, state foresters, and other entities who have 
established strong programs to reduce the threats of catastrophic 
wildfires and are pursuing long-term fuels treatment strategies.
    issue #3: hurdles to the implementation of a national strategy 
                            on forest health
    The fuels reduction efforts are no different than other land 
management projects considered by the Forest Service--they must first 
go through a lengthy and sometimes cumbersome environmental analysis 
process as required by the National Environmental Policy Act (NEPA). 
Given the complexity of the ecosystems involved, there is no argument 
that a professional, scientific-based analysis must take place to 
assure that the proposed fuels treatment project will meet the needed 
objectives and not adversely affect the environment.
    But what we have seen over the decades is a NEPA process that is 
driven more by bureaucracy than the ultimate objectives and decisions 
on the ground. As a result, the project planning process takes years, 
tends to be very redundant, with little or no innovative thinking. The 
NEPA process has become an impediment to professionally planned and 
executed land management projects and the entire NEPA process, as well 
as individual agency regulations and policies, must be reexamined.
    In today's reality, very few land management projects, especially 
if they involve the cutting of trees, are implemented without first 
going through an administrative appeals process or litigation. Appeals 
and lawsuits take an enormous amount of time and effort, and often 
delay the implementation of a project for years. In most cases, a 
successful challenge can be traced to simple procedural mistakes and 
not the merits of the final decision. Often agency managers report that 
the NEPA process discourages innovation and professional decision-
making because it focuses on procedures and not the substance of 
decisions.
    Again, examples of this recently have been on the Hash Rock and 
Timber Basin Salvage Sales that were burned sales. Though both 
environmental analyses addressed the substance, they were remanded for 
procedural problems.
    Given the critical forest health situation facing millions of acres 
of our western forests, special rules or exemptions must be authorized 
so that the land management agencies can quickly treat these 
overstocked and fire prone forests. The environmental consequences of 
not treating these areas in a timely fashion, resulting in the 
destruction of thousands of acres due to an uncontrolled wildfire, must 
be part of the environmental assessment and decision-making process.
    The NEPA process is complicated by the jurisdiction of the 
President's Council on Environmental Quality (CEQ) over the underlying 
NEPA procedures of agencies. CEQ must examine its rules and the 
agencies must examine their procedures and policies to ensure they are 
part of the solution to the wildfire crisis, and do not remain a 
significant part of the problem. Regardless of whether the CEQ and the 
agencies revise the regulations or policies, there needs to be better 
utilization of categorical exclusions, emergency stay or appeal 
exemptions, and expedited procedures. There must be recognition of the 
fact that a ``no action'' alternative does indeed have serious and 
significant effects. Without these changes, more money will be spent in 
planning and assessing a project than will be realized by the land 
management activity on the ground.
    In many areas in the west, due to the number of endangered species 
listings, Endangered Species Act (ESA) Section 7 consultation on land 
management projects, including fuels reduction activities, has become a 
real bottleneck. Since the existing Section 7 regulations were put in 
place in 1986, the National Marine Fisheries Service (NMFS) and U.S. 
Fish & Wildlife Service (FWS) have been asked to conduct nearly 300,000 
consultations, with a dramatic increase in the numbers in the last 
several years. The first cause of this bottleneck has been a shortage 
of personnel to perform the consultations. A special appropriation this 
year to supplement the agencies' budgets for National Fire Plan support 
should help, but it is like buying more fire trucks, it treats the 
symptoms and not the cause.
    One real fix is to address the Section 7 consultation problem, 
which is shifting more of the assessment responsibility to the land 
management agencies. A review of the Section 7 consultations finds that 
less than 1 percent resulted in a jeopardy opinion by either NMFS or 
FWS.Given this extremely low risk, changing the threshold at which the 
land management agencies are required to enter into formal consultation 
from a ``may affect'' to a ``likely to affect'' threshold would seem 
like a logical proposal. This would free up personnel in both the land 
management and regulatory agencies for review of activities with the 
much higher risks to listed species and would also allow them to get 
out of the office and focus on efforts to protect and enhance the 
species at risk.
    Existing regional land management plans and policies can also be 
impediments to the implementation of the National Fire Plan. They lack 
flexibility for project planning to address actual on-the-ground 
circumstances. Allocating areas to ``no treatment'' with the objectives 
of providing habitat for listed species ignores the reality that the 
listed species are at great risk of losing critical habitat to a 
catastrophic wildfire.
    Specific here to Eastern Oregon are the PACFISH, INFISH and 
Eastside Screen interim land management policies also directly affect 
the ability to the land management agencies to treat excessive fuel 
buildups and suppress wildfires. These interim policies limit the size, 
number and location of trees that can be cut without allowing site-
specific professional determinations based on the specific ecosystem 
conditions. It also appears that guidelines of the PACFISH and INFISH 
management policies severely restrict firefighting personnel from 
dropping fire retardant within 300 feet of (and dipping water from) 
streams that are inhabited by listed fish species. These short sighted 
guidelines have resulted in wildfires growing larger than necessary, 
and in some cases totally destroying the fish habitat they were 
intended to protect.
    The ultimate solution to addressing the hurdles affecting the 
implementation of a national strategy is for the Administration to 
designate a senior official to coordinate its implementation. We feel 
that CEQ is the best place for this leader to be located. As I have 
described, CEQ has the responsibility for overseeing NEPA and could be 
empowered to facilitate coordination between departments and agencies. 
Without this kind of leadership, agencies will continue to operate 
under their own visions and directives. Clearly CEQ could address the 
problems with NEPA and facilitate the use of categorical exclusions, 
emergency stay or appeal exemptions, and expedited procedures. The 
Council could also provide the leadership and coordination for dealing 
with challenges to fuels reduction projects. They could also facilitate 
a more workable Section 7 consultation process and coordinate 
consistent and timely products from NMFS and FWS. Finally, CEQ could 
coordinate changes to regional land management plans and policies that 
would result in professional, science-based decisions at the project 
level that address the conditions present on the ground. Ochoco Lumber 
and AFRC believe that the failure to have this kind of leadership will 
result in more acres burned by catastrophic wildfires, destroying not 
only productive forests, but also wildlife and fisheries habitat, and 
rural communities.
  issue #4: utilizing fuels reduction material to produce electrical 
                                 energy
    For years now, forest product manufacturers and others have been 
generating electricity from wood waste, or biomass. While the 
operations have been small, limited in their geographic distribution 
and most cases for internal use, the technology is clearly available 
and proven. Several of these facilities are operated by our competitors 
here in Eastern Oregon and my company has investigated adding this 
capability to our operations.
    Given the fact that millions of acres are in dire need of treatment 
to reduce unnatural accumulations of small trees and that much of this 
is too small to be utilized in the manufacturing of lumber products, 
there is a perfect opportunity to utilize this material to generate 
electricity. Currently, over two-thirds of the biomass-fueled electric 
power is generated from forest-related activities, which includes: 
slash, brush & tops associated with timber harvesting activities; bark, 
chips and sawdust from forest products manufacturing processes; and 
small diameter material derived from thinning overly-dense forests 
identified as being at great risk to wildfire. Some have commented that 
there could be a biomass power plant associated with each ranger 
district on our western national forests.
    Promoting biomass electric power generation is not only fiscally 
sound, but also environmentally and socially beneficial. In 1999, the 
Department of Energy published an independent research report entitled 
``The Value of the Benefits of U.S. Biomass Power,'' which compared the 
impacts of biomass energy production with the most probable alternative 
fate of the residuals described above. The report also looked at the 
values of non-energy benefits resulting from biomass power production 
such as: air pollutants; greenhouse gas emissions; landfill use, forest 
and watershed improvement, rural employment and economic development; 
and energy diversification and security.
    In a market economy, one would assume that with the great potential 
and benefits described above, that there would be an abundance of 
biomass power facilities on line or under construction. Unfortunately, 
this is not the case. This is primarily due to the fact that benefits 
of biomass as a clean, renewable energy source are extremely hard (if 
not impossible) to quantify in market terms. It is very difficult to 
assign market values to forest fuel reduction when the benefits are 
clean air, watersheds, wildlife habitat and other environmental 
benefits. Finally, much of the potential fuel supply is located on 
lands that are under public ownership and therefore, tend to operate 
outside the marketplace. For these reasons, we believe an appropriate 
role for the federal government is to make commitments and support an 
opportunity with such great net public benefits.
    There are two categories of impediments to an expansion in biomass 
energy production that need to be addressed. First, there must be a 
commitment to a long-term supply of biomass (at least 10 years), 
through innovative government contracting and congressional 
appropriations, so that investments into facilities are worth the risk. 
Second, there needs to be some sort of upfront tax incentives or grants 
to construct and operate these facilities in locations close to the 
biomass supply and in rural communities lacking the needed 
infrastructure.
    An opportunity to marry a national energy policy with the national 
forest health strategy is not only good energy, forestry and fiscal 
policy, but also good environmental policy. It will take at least a 
decade to get new fossil fuel, hydroelectric and nuclear energy on 
line, so we need a bridge to close that gap. If not, history has shown 
us that mother nature will consume these excess forest fuels, leaving 
in her wake destroyed homes, wildlife habitat and forest ecosystems 
that will require millions of dollars and decades to repair. Ochoco 
Lumber and AFRC feel that the opportunity is clear--produce clean 
affordable and renewable electricity from the nation's forests, while 
supporting economic diversification of rural communities.
                               conclusion
    Mr. Chairman, a very serious problem facing our nation's forests 
has been identified and needs our immediate attention. It affects 72 
million acres of our federal forests and places at risk millions of 
private acres and tens of thousands of rural communities. We don't need 
to authorize another study or pilot project--our forests, wildlife and 
communities can't afford any more delay. We have the science, the 
professionally trained resource managers and a workforce ready for the 
task. What we need is leadership--leadership to act. Our expectation is 
that both the Administration and Congress will provide that leadership, 
in a bipartisan fashion, to address the hurdles, provide the funding 
and meet the challenges of improving forest health, enhancing wildlife 
habitat, protecting rural communities and utilizing this excess forest 
fuel to manufacture wood products, produce paper goods and generate 
electricity that are so important to our nation's economy. This 
concludes my prepared remarks, I would be glad to answer any questions 
you or the subcommittee may have for me regarding this important issue.

    Senator Wyden. John, very good. Very helpful. Rick Brown, 
welcome.

  STATEMENT OF RICHARD T. BROWN, SENIOR RESOURCE SPECIALIST, 
             DEFENDERS OF WILDLIFE, LAKE OSWEGO, OR

    Mr. Brown. Good afternoon, Mr. Chairman. Thank you for the 
opportunity to discuss the topics at hand and also I think I'll 
thank you for getting me over to the east side today.
    I think I'd like to start by trying to make one thing very 
clear. It's a little frustrating that I need to do that, but 
that is that I unequivocally support forest thinning as an 
element of ecosystem restoration, and I understand that much of 
the material that would be removed in those thinnings has 
economic value, and I support capturing that economic value for 
the benefit of the American public and for the benefit of the 
communities here on the east side.
    I think I can tell you, to the extent that I talked to them 
all, I agree with Sally Collins' suggested points. But I think 
we need to be clear, too, about how we consider that activity 
of thinning and the context that we put it in. And I'm afraid, 
frankly, that the term forest health is not adequate. It's a 
term that historically has been used to speak only about trees, 
and we need to talk about ecosystems and watersheds in their 
entirety from soils to treetops.
    We need to talk about a whole host of activities, not only 
prescribed firing and things, but dealing with culverts and 
roads and livestock management and noxious weeds and other 
activities. And as Steve Grasty suggested in the previous 
panel, we need to be careful about terminology. There's a lot 
of seemingly simple words like fire or thin for forests that 
seem friendly, but can mean many, many things, and we need to 
be careful about the context in which we're using those words.
    And in particular, I think we need to be very careful about 
distinguishing the Wildland-Urban Interface and the wild lands. 
The concerns and condition and the treatments that may occur in 
both those areas are oftentimes very different. I won't bore 
you with the entirety of my checkered past, but I will say that 
it was almost exactly 10 years ago and before this very 
subcommittee that I know that I can document that I was 
speaking in support of thinning and in support of a strategic 
approach to forest restoration that I think you were alluding 
to in your opening comments.
    And over those 10 years I've also had substantial 
opportunity to go out on the ground to look at recently burned 
areas, and in part I've sort of overcome my indoctrination by 
Smokey Bear and come to clearly understand that even a severe 
fire can be not such a bad thing and maybe even a good thing 
under certain circumstances. But I've also seen a lot of 
uncharacteristically severe fire in dry forests that did not 
experience that fire prehistorically. And I've seen a lot of 
old growth pine lost in those fires that I think unnecessarily 
died because we did not treat those lands either with thinning 
or prescribed fire prior to wild fire.
    So I share many of the frustrations that have been 
expressed by others on the panel that more of these activities 
have not been taking place, but I also think it's important 
that we not let that frustration blind us to what's happening. 
We have a clear articulation policy and an actual cohesive 
strategy, and the National Fire Plan now has a 10-year strategy 
and implementation plan that the administration has developed 
in concert with the Western Governors Association involving a 
broad array of interested publics.
    There has also been an effort going on over the last year 
and a broad variety of environmentalists and community forest 
practitioners have developed a set of principles and guidelines 
that they agree on for restoration projects. There's a lot of 
overlapping and commonality among all of us.
    More locally, I think the Blue Mountain Demonstration Area 
has not been perfect, but I think it's also gotten a bum rap to 
be honest, in large part due to, I think, unrealistic 
expectations. There are, I think, now at this point some 70 
stewardship pilots underway around the West testing a variety 
of authorities. There's a monitoring program associated with 
that, but I think that's going to allow us to learn a good deal 
over the next year or two.
    There are the new County Payment Resource Advisory 
Committees that are not only getting money around for projects, 
but getting people at the table talking to one another and 
finding agreement that they never thought they had. And then 
there are a host around the West, but especially here in 
Oregon, I think, of what you might think of as unsanctioned or 
informal efforts, such as the Lakeview Sustainability 
Initiative that's been alluded to and of which I'm a member. 
That gives me great hope not only that things are happening but 
even more will happen in the future.
    What we have here, I think, is a lot of experimentation, 
and I think not only is it making things happen but it's going 
to shed some light on how to proceed down the line. And I think 
it would be unwise to prejudge the results of those 
experiments.
    There is one point I would like to make that I have 
learned, I think, over my years of working on these issues 
that, I think, is key and that is that it's unreasonable to 
expect that restoration projects will pay their own way. If you 
expect them to do that, and especially if you couple that with 
goods for services and retention of receipts, I am certain that 
that will lead to inappropriate projects in the wrong areas and 
it's guaranteed to deepen the mistrust on the part of the 
environmental community that's so much the source of our 
inability to move forward at this point.
    There are two key things that I think Congress can do to 
help the situation. First of those is continued oversight, such 
as this hearing today. My experience is that good ideas, such 
as those generated in Lakeview, can be well received by the 
Forest Service and things can move forward. But if indeed it's 
the case that good ideas are being resisted within the 
agencies, then I think we need to highlight that and we need to 
try to understand why and we need to try to understand how to 
overcome that, and oversight is a key way of doing that.
    The most important thing, however, I think, that Congress 
can do is in the realm of appropriations. In my experience the 
problem is not a lack of will, it's a lack of capacity within 
the Agency. We have cut and cut and we've cut beyond the bone, 
I think, frankly at this point. But maybe even more important 
than the amount of funding is how that funding comes down.
    At this point the Forest Service is trying to accomplish 
restoration using timber sale funds, because that's what 
Congress provides. And what that leads you to is circumstances 
that the timber industry looks and says, these are timber 
sales. Where's the volume? The environmental community looks 
and says, Aha, I knew it. This restoration stuff was all just a 
ploy to keep on pushing timber.
    Until the funding, the budgetary message, the Agency gets 
from Congress is consistent with the restoration message that 
is given verbally, I don't think we're really going to move 
ahead with what the Agency needs for funding for restoration. 
Thanks again.
    [The prepared statement of Mr. Brown follows:]
  Prepared Statement of Richard T. Brown, Senior Resource Specialist, 
                 Defenders of Wildlife, Lake Oswego, OR
    Mr. Chairman and members of the committee, I am Richard Brown, 
Senior Resource Specialist in Defenders of Wildlife's West Coast Office 
in Lake Oswego, Oregon. I am pleased to have this opportunity to 
discuss the important topics of forest health and ecosystem restoration 
in eastern Oregon. I have previously addressed some aspects of these 
issues in a paper titled ``Thinning, Fire and Forest Restoration: A 
science-based approach for National Forests in the interior 
Northwest,'' published by Defenders of Wildlife. I will not elaborate 
on the themes from the report here, but encourage you or others who may 
be interested to read the report itself. I have received much positive 
feedback on the report, from sources ranging from agency personnel to 
timber industry representatives, community forestry practitioners and 
environmentalists, leading me to hope that the report identifies some 
important common ground, at least as it pertains to the science that I 
hope will provide the foundation for action.
    Any discussion of these topics should probably be prefaced by a 
clarification of terms, since many of the relevant words have multiple 
formal and informal meanings. ``Forest health'' can be a convenient 
short-hand for a more inclusive concept such as forest ecosystem 
integrity, but has a history of being used too narrowly, to refer 
simply to the status of trees while ignoring other essential elements 
of ecosystem integrity such as soils, water, fish and wildlife, and the 
ecological roles of fire and other disturbance. Similarly, when 
discussing fire, one must be careful to keep in mind what kind or 
severity of fire, burning in what kind of forest (or other vegetation), 
in what condition and in what landscape context, and whether the 
severity is characteristic of historic fire regimes for that vegetation 
or not. Finally, one must take care to clearly distinguish between the 
needs for fuel treatment in the Wildland-Urban Interface (WUI) a 
relatively narrow zone including dwellings and their immediate 
surroundings and wildland settings, where concerns about fire and the 
need to integrate fire-related treatments into a more comprehensive 
approach to ecosystem restoration are apt to be very different.
    It is also important to be clear about expectations. For instance, 
even if implementation of the National Fire Plan and other efforts at 
ecological restoration are highly successful, we should not expect 
acres burned (the most common, if often misleading, measure of wildland 
fire) to decline. In fact, considering the necessity of expanding 
prescribed fire programs, total acres burned should increase. What will 
change is the nature of the fires that occur and the severity of their 
effects on ecological values. Similarly, it is unreasonable to expect 
restoration of wildland ecosystems to have much effect on the incidence 
and severity of residential fires in the WUI, as these fires are almost 
exclusively a function of structures and their immediate surroundings. 
And, as a final example, one should not expect post-fire salvage to 
contribute to ecological restoration. In fact, the purely economic 
impetus behind salvage virtually ensures that it will contribute to 
ecosystem degradation, a result I have seen play out all too 
frequently.
    It has been almost thirty years since I first visited the Blue 
Mountains with a forest ecologist who could help me understand the 
natural dynamics of the forests there and how they had been changed by 
logging, grazing and fire exclusion. It has been ten years since I 
first testified before this Senate subcommittee in support of 
understory thinning as one element of ecosystem restoration and in 
support of a strategic approach to deciding how and where to apply 
limited resources to thinning and other restorative techniques. In the 
intervening years I have on many occasions visited the sites of 
wildfires, often seeing the unsurprising results of fires (even severe 
fires) burning in much the way they did historically in higher 
elevation forests. But I have also seen the results of fires burning 
with uncharacteristic severity in dry forests, killing old growth 
ponderosa pine that may have survived twenty low-severity fires prior 
to the changes fire exclusion and other practices have brought about. I 
continue to believe that carefully conducted understory thinning in 
many of these dry forests could reduce the frequency of such losses, 
and I also believe these thinnings can provide--as a by-product--trees 
that can be processed in local communities. I share much of the 
frustration expressed by others that more of this thinning has not 
occurred, and I understand that we need to find ways to sustain the 
community and industrial infrastructure that will be necessary to 
accomplish much-needed restoration.
    Nonetheless, I find there is much that causes me to be encouraged 
and hopeful that more ecologically appropriate thinning, as well as 
other practices of ecological restoration, will be taking place, with 
multiple benefits for both ecosystems and communities in eastern Oregon 
and throughout the West. None of the initiatives I will mention below 
is sufficient, and none is without flaws, but collectively they give me 
substantial hope that we can frame a strategy for ecosystem 
restoration, find broad agreement for the role of thinning in that 
strategy, and continue and expand on-the-ground efforts that will both 
improve the sustainability and resilience of forest ecosystems and 
provide meaningful work and valuable by-products for communities in 
this region. At the risk of sounding chauvinistic, it seems to me that, 
in many key respects, Oregon is leading the way and setting an example 
for the rest of the West.
    The Forest Service's Cohesive Strategy, which underscores the 
importance of clearly distinguishing among forests (and other types of 
vegetation) based on their historic fire regimes and current condition, 
is about to become more truly cohesive with the involvement of agencies 
in the Department of Interior. The odds that the Cohesive Strategy and 
the National Fire Plan will be effectively and appropriately applied 
have increased with the joint development of a 10-year strategy and 
implementation plan by the Western Governors' Association and the 
Administration. Also at a national level, a broad group of conservation 
advocates and community forestry practitioners have agreed upon a set 
of principles and guidelines for forest restoration that will provide 
them with a common basis for evaluating proposed projects.
    Regionally, I see very encouraging cooperation among federal and 
state agencies to develop strategies and priorities for implementation 
of the fire plan, including refinements such as design criteria and 
streamlining that should speed consultation under the Endangered 
Species Act while maintaining the integrity of that process. 
Cooperation and coordination among agencies and private landowners 
continues to be facilitated by your amendment encouraging cross-
ownership cooperation and allowing use of federal funds for restoration 
on private lands when the results will also benefit public resources.
    Close at hand, the Blue Mountains Demonstration Area, while much 
maligned in some quarters, actually has many accomplishments to be 
proud of, both in terms of on-the-ground projects and improved 
relationships among agencies and levels of government. The relatively 
newly established Resource Advisory Committees (RACs) working to 
recommend allocation of funds under Title II of the Secure Rural 
Schools and Community Self Determination Act are providing 
opportunities for people of varying interests to sit down together, 
perhaps for the first time, discuss issues around forest restoration, 
and, sometimes quite unexpectedly, find areas of agreement. Stewardship 
Pilots are having mixed success, I believe, in accomplishing this same 
goal, but at least there is a formal monitoring process for these 
pilots that may eventually provide some useful insights as to what 
fosters improved approaches to restoration and what does not.
    And, around Oregon and throughout the West, a variety of 
cooperative efforts are underway, some officially sanctioned under one 
program or another, many not. I have had the good fortune for nearly 
four years now to participate as a member of the Lakeview 
Sustainability Initiative, which has brought together what some would 
consider an unlikely group of people who have worked through some 
difficult issues, moved forward with a common vision and purpose, and 
are beginning to see some tangible on-the-ground results. Most 
recently, the Winema-Fremont RAC has approved funding for a community-
based monitoring program that will not only ensure that this often 
neglected element of management will occur, but will also train and 
employ high school students from the local communities.
    All of these efforts, especially those formally incorporating 
monitoring or other forms of accountability, can be viewed as 
experiments of a sort, experiments that are still very much in process. 
There is sufficient activity and foment that it will be difficult to 
properly document and learn from the lessons these experiments will 
provide over the next year or two. In the meantime, I think Congress 
has little need to instigate additional formal exercises such as more 
Stewardship Pilots. It would also be premature to make permanent the 
authorities being examined in the pilots.
    While I have no wish to prejudge the outcomes of these experiments, 
there are some lessons I believe I have already learned from my years 
in the field, as well as participation on Governor Kitzhaber's Eastside 
Forest Advisory Panel, the Lakeview Sustainability Initiative, two 
Resource Advisory Committees and a regional monitoring team for the 
Stewardship Pilots. Chief among these is that we should not expect 
restoration projects, including thinning projects, to pay their own 
way. I have no doubts that such projects can produce by-products that 
have commercial value and can help off-set costs. Nonetheless, it is 
also clear that we have for decades extracted the wealth of these 
forests while forcing forest ecosystems to bear many of the costs. To 
expect those ecosystems to now pay for their own rehabilitation would 
be both unrealistic and misguided. As a nation we benefited from that 
unsustainable extraction, and we have a national responsibility to 
provide the investment necessary to restore these lands to a condition 
where they can again provide the values we expect of them.
    Although I understand the enthusiasm with which many Forest Service 
employees view the Stewardship Pilots' provisions for goods for 
services and retention of receipts, it is an enthusiasm I am afraid I 
do not share. It is inevitable that these authorities will lead to 
projects that are located not where restoration is most needed, but 
where there is the greatest prospect for valuable products. They also 
likely to encourage projects designed to remove trees not because their 
removal is ecologically appropriate, but because they can help pay for 
the project. Permanent adoption of these authorities would be 
guaranteed to perpetuate the distrust that is the fundamental 
impediment to moving on with much-needed restoration efforts.
    I see two things that Congress can do to help foster the current 
experimentation that is allowing Oregon to set an example for the West. 
One of these is continued exercise of Congress's oversight authority. 
The greatest promise of collaborative efforts is that local knowledge 
and the creativity that can come from bringing varied interests to the 
table will lead to better proposals about how to proceed. A major fear 
of those participating in these collaborative efforts is that they will 
come up with good ideas that won't be seriously considered by the 
federal land management agencies. Reluctance on the part of the 
agencies may be quite appropriate if the collaborative efforts don't 
comply with the law, but resistance may also be based on bureaucratic 
opposition to new ways of doing business or a misplaced and exaggerated 
sense of expertise on the part of agency staff. A continuing 
conversation among Congress, the agencies and other interested parties 
can help bring these inappropriate impediments to light and explore 
ways to overcome them.
    The single most important thing Congress can do to help make 
restoration projects happen is to provide the Forest Service a budget 
that corresponds to the need. While I am referring in part to the need 
to improve overall funding for an agency that has already been cut to 
the bone and beyond, I am mostly suggesting that the funding provided 
needs to be explicitly targeted for restoration, and, to the extent 
possible, be part of a long-term commitment. Agencies will attend to 
your words, but what they hear most clearly and convincingly are the 
messages carried in their budget. While some of the National Fire Plan 
funding can be used for ecological restoration, and while some funding 
is provided for watershed restoration, the majority of the funding 
currently being used to try to accomplish restoration is in the timber 
budget, which comes with timber targets. Even in the best of 
circumstances, the result is hybrid projects that are part restoration, 
part timber sale. Such projects help perpetuate the suspicion held by 
many in the environmental community that restoration thinning is just a 
ruse to allow more industrial-scale logging. Even if they might be 
persuaded that understory thinning can be an appropriate element of 
restoration, groups and individuals opposed to the timber sale portion 
of projects must appeal the entire project, delaying or halting 
restoration along with the timber sale.
    While many of the disputes over these projects may appear to be 
arguments about the subtleties of ecological responses to various 
restoration treatments or the merits of different equipment to apply 
these treatments, the real issue is lack of trust--most importantly, 
lack of trust from environmentalists that restoration really is the 
agenda. I think many, perhaps most, Forest Service staff in this region 
are ready to move on with an agenda of ecological restoration. What 
they need now is a budgetary message that can make that a reality.
    Again, thank you for the opportunity to testify today. I will be 
happy to try to answer any questions you may have.

    Senator Wyden. Thank you, Mr. Brown. We are going to take 
some time with this panel, because this is an area that I 
really want to make a sequel to the County Payments. We broke 
new ground last session. I think we are going to need to do it 
again in the forest health area, and I'm going to spend some 
time now walking through some of these issues with you. And let 
me start with you, if I could, Ms. Collins, and let me just 
paint a picture in terms of what people tell me at these open 
community meetings in central and eastern Oregon.
    What they tell me in central and eastern Oregon is that 
there are millions and millions of board feet on the ground in 
these forests in central and eastern Oregon where the EA's been 
done. The Environmental Analysis has been completed. And they 
just say, Ron, what in the world is it going to take to get 
these projects unstuck and to get them actually out and the 
wood to these mills and these communities, such as the ones 
that Senator Ferrioli represents where there is so much hurt?
    What's your answer to that? What is it going to take? And 
this is work that has been done. The Environmental Assessment 
is completed. Maybe Mr. Ferrioli has the exact number. I know 
there's millions and millions of board feet just on the Malheur 
alone that is not getting unstuck. What is it going to take?
    Ms. Collins. Well, I think there's some general issues 
around this analysis paralysis that really relates to this 
question, and it really, I think, comes down to a couple of 
things. We have had so many----
    Senator Wyden. Just stop there for a second. This is not an 
analysis paralysis question. This is work that's been done. The 
EA is done.
    Ms. Collins. I understand that. And what I was getting at 
that with that point is that when we have projects that get 
litigated, and many of our timber sales and salvage sales do 
get litigated and appealed and then challenged further, the 
test in terms of winning that particular lawsuit are pretty 
high. And what that requires and what that does, as time goes 
by, for example, in this case that Mr. Ferrioli talked about, 
as time goes by we get new requirements added to that that 
requires retooling and retooling.
    All I'm saying is that in general what happens is that we 
have to add more to make sure it can absolutely sustain itself 
if it goes into court. Now, I think we have a lot of projects 
that are done that we are getting ready to move forward with. 
And in fact I was just talking with Leslie this morning about 
it. We've got a number of projects in central Oregon that I 
don't know of any that we're sitting on that we're not going 
forward with and the EA is completed. Maybe you have an 
example.
    We have a number of large scale plans, I think, all the way 
from Sisters down to Crescent that will result in quite a lot 
of wood. I think 50 to 60 million board feet.
    Senator Wyden. When is it going to get unstuck? A lot of 
this is always like the marque at the old movie house where the 
movie house, you know, outside says, you know, coming soon and, 
you know, it talks about this wonderful picture and it never 
quite gets there. So tell us, if you would, if you're able to 
come to central and eastern Oregon today and say all of these 
projects where the EA's done are getting unstuck, tell us when 
and where and how much.
    Ms. Graybeal. I would say that it depends on where you're 
talking about. I don't think they're struck. I don't think 
they're stuck. I think they're going through a process here in 
central Oregon that it takes roughly 1 to 3 years to get a 
project completed, and when the EA is completed it will be--it 
will go through and have a decision and then after the 
decision, we'll actually within 30 days have a timber sale if 
it's a timber sale project.
    But why don't I let Leslie answer? Do you want to do that?
    Senator Wyden. Great. I want to hear about the ones that 
are prepared.
    Ms. Welden. I would like to know what those are too, 
because I have to tell you, Senator, that I'm not aware of any 
that are simply sitting there with no litigation, with a 
decision, the computations are completed that are sitting there 
and not being offered. So I mean I'm simply unaware of those. 
We may have some projects prepared, maybe a few road projects 
or fire projects that are unfunded that might be sitting there, 
but I'm unaware of that situation. So we just need some more 
information.
    Senator Wyden. Mr. Ferrioli, which of the projects do you 
want to get out?
    Mr. Ferrioli. Senator, in the Malheur National Forest there 
are programs and projects at various stages of completion, 
where the Agency works on a project for a while, changes 
priorities, goes to another project, works on that one for a 
while, encounters a difficulty, gets a new directive, adds 
another memo, and that's the process I think Ms. Collins was 
alluding to.
    So 65 million board feet is over the past decade. They're 
in a variety of stages of completion in a variety of different 
projects. Many of them are in stages where very little 
additional activity could bring the project to the point where 
it could be sold. We've documented those. We've submitted that 
documentation to the Malheur and the region. We'd be happy to 
do it again to identify those projects by name.
    Ms. Collins. Would it be helpful to give you some 
information about the projects here in central Oregon?
    Senator Wyden. Yes, let's hear about what's coming to 
central and eastern Oregon some time soon.
    Ms. Welden. Thank you. Coming soon I would say in central 
Oregon we have a number of projects that we've worked on over 
the last 2 years that I would say that just over the last 3 to 
4 months have what we would call made it through most of our 
process, including the Charlie Brown Project, McCash up at 
Sisters.
    Senator Wyden. How much wood would be available in the 
first one?
    Ms. Welden. I can give you a total for each and then for 
all three together. For all three together we're looking at for 
commercial harvest about 54 million board feet. So we're in the 
process now of developing timber sale contracts, doing pre-sale 
layout work, to get those offered--advertised, offered and 
awarded.
    On top of that there's quite a bit of pre-commercial 
thinning to the tune of 14,000 acres across all of those 
projects, which is getting into that work that is understory 
thinning, some of that smaller diameter material. When you talk 
about projects that we have probably trouble implementing, they 
do follow more in the range of those pre-commercial thinnings 
that we do have a longer period of time to wait for funding. So 
I would say if there is a backlog of projects, it's in that 
realm where we are waiting for funding to get to that.
    The National Fire Plan is helping and to a degree our 
ability to submit projects to the RACs is also helping. But 
that's an area where if we have some backlog it would be with 
pre-commercial thinning.
    Senator Wyden. Well, that's another area that has been 
baffling to me. I've heard it said we could get more out if we 
had more funding. But my understanding is that the region has 
volunteered basically to give up some of its funding and that 
it's going to other areas. This region, Region 6, is slated to 
lose 2 to 3 percent of its overall funding over the next 5 
years.
    So I guess I just don't want to see the Forest Service put 
these rural communities into debtors' prison. In effect it just 
looks like for many of these projects we're not getting the 
projects unstuck, and that's what I'm told again and again in 
one iteration or another. It's not getting unstuck. The wood is 
not getting out.
    Ms. Collins, your associate just told me if we had more 
funding we could get it out, but there's been an agreement for 
this region to give up funding presumably because people don't 
think we're cutting enough. So make sense out of this.
    Ms. Collins. What Nancy was talking about and what Leslie 
was talking about earlier, we notoriously have been underfunded 
for pre-commercial thinning. That's that thinning where you 
don't have a product coming out, but you are actually doing 
some of the forest health treatment that needs to be done to 
produce the stand density that we've all been talking about 
here.
    It's watershed restoration work that's not necessarily 
directly tied with the National Fire Plan and Fuels Reduction 
work. That's the work that we need funding for. Now, again the 
timber sale, salvage sale program, is one of those programs 
that we've got a lot of--each region gets an--we get an 
allocation per region, and we basically are falling back on 
this premise of accountability, where we are putting the money 
where we get results, which is the right thing to do. It's good 
government. And we are trying to get results everywhere.
    As you said earlier I think we're finding that the results 
are scattered. They are different. Some places seem to be able 
to magically get work done and others are struggling. And some 
of it depends on the forests we're dealing with and the 
community dynamics.
    Senator Wyden. Well, your associate just said, We could get 
more work done if we had more funding. And I just cited what 
appears to be an agreement among the regional foresters for 
this region to give up funding to other parts of the country. 
Is that right?
    Ms. Collins. Every regional forester could say that, that 
they could get more work done if they had more funding.
    Senator Wyden. Is this region giving up money to go for 
this work? I'd just like a yes or no answer to that.
    Ms. Collins. I think they are, and I think that was the 
agreement that all the regional foresters collectively agreed 
the money would again be distributed along--actually it's a 
part of a pattern that was started probably a decade ago as the 
timber volume from Region 6 in Oregon and Washington started to 
go down, the money started to shift to other regions. And so 
this is part of kind of a long-term plan. It's just how we're 
actually implementing it. And I think it's coming from the 
frustration of not getting on with it.
    Senator Wyden. It just seems as if the Forest Service is 
putting the rural communities into a death spiral and then 
saying it's their fault. I mean just think about it. Debtors' 
prison, people aren't being put into jail any longer just 
because they're poor, and if effect what we have got here are 
policies that are very similar. What happens is we've got 
projects that are ``stuck'' for various reasons. Money would 
help to unstick them. That is what your associate has just 
said. But yet the region is loosing out on that money that 
would free up those projects because the cut is going down.
    By way of what you have described, I think this area is 
just being put by the Forest Service on a sort of relentless 
kind of death spiral that I want you to know I'm going to do 
everything in my power to block. I have been impressed by a 
number of the approaches that you have taken, but for the life 
of me I can't understand the analysis here today. There are 
projects that need to get out now and we have got a variety of 
descriptions being used to describe at what stage of the 
process they are, but what these communities tell me is they 
are ready to go. And we were told about a number of them today 
that more could be done if there was money for it. But yet 
somehow we're giving up the money because the cut is going 
down, and once you give up the money the cut is just going to 
go down, and down, and down until you've turned these 
communities into sacrifice zones. I'm not going to be part of 
it.
    I'm going to move on unless you want to add anything 
further, but I hope that you will change your mind on this 
question of taking money out of this region at such a key time 
when Mr. Ferrioli's constituents and others obviously would 
benefit from having that money to complete these projects. Do 
you want to look at that again?
    Ms. Collins. I will take a look at that again. I want you 
to know that we are committed to this region and we are 
committed to putting money where we can get results. And like I 
said in my opening statement, I have seen in eastern Oregon 
people coming together to get results, and when we start seeing 
results the money will come. It's going to be tried again.
    Mr. Ferrioli. Mr. Chairman.
    Senator Wyden. Yes.
    Mr. Ferrioli. The budgeting process in the Forest Service 
does not include a process for the partial completion of 
projects. Each of the projects that we referred to on the 
Malheur was previously fully funded. It was accumulated along 
with other projects to create an annual operating plan which 
was submitted to the region, which was then forwarded to the 
national office and approved at that level and then forwarded 
to the Congress.
    Projects typically are not submitted for partial funding. 
So that the projects that we're referring to on the Malheur 
over the past decade that were carried forward as unoperated 
volume or unfinished projects have been repeatedly fully funded 
year after year and carried forward in the funding requests for 
the Agency.
    And when we use the term lack of accountability, I think we 
do a violence to our argument because people don't understand 
what we mean. When we say accountability, what we mean is when 
you're funded for a project that you described in your work 
plan and Congress appropriates the project and the dates of the 
gateways of completion and you don't get through those 
gateways, that is a lack of accountability.
    Senator Wyden. Ms. Collins, I don't think anybody can say 
it any more clearly. What's your response to that? These are 
projects that Mr. Ferrioli is saying his constituents got them 
through the process not just once, but again and again and 
again. How do you get them unstuck?
    Ms. Collins. I know. We need to get it unstuck. And part of 
our concern is taking a look at that, what is it in terms of a 
larger dynamic that gets things stuck and how can we work 
through that? And that's why I said at the beginning we're 
working with a lot of these process requirements are getting it 
stuck and trying to see how we can make some changes there.
    Let me also just say one other thing about this region's 
funding, because I want to make sure it's real clear. We do 
have every region making the same case about funding and 
outputs and the ability to take action with appropriate 
funding. And I also don't want to leave you thinking this isn't 
a region that produces, because they do good work here. And we 
have some really good examples of that here, so let me just 
make sure that this is really not about people not performing; 
it's about people operating in a system that is somewhat 
dysfunctional, and we're trying to fix that.
    Senator Wyden. Well, you aren't going to fix it by taking 
money out of this region. And if you believe that good work has 
been done here, and I know you're sincere in your views, then 
certainly that doesn't make the case for sending the money 
somewhere else because people aren't any good in Region 6. 
You've got to get this money back here.
    When will you report back to me on whether this money is 
going to be returned to this region? This was something that 
was done, I gather, internally and I want those dollars back so 
we can get projects out, and particularly the projects along 
the lines that Mr. Ferrioli was talking about where again and 
again they have been approved.
    Ms. Collins. What I will do is commit to you that we will 
get together with you. We will get the information on what's 
happening with that money and----
    Senator Wyden. Isn't the region slated to lose 2 to 3 
percent of its funding on these key projects over the next 5 
years?
    Ms. Collins. I really do not know that.
    Senator Wyden. Do your associates know the answer? That's 
correct, isn't it?
    Ms. Graybeal. That's correct.
    Senator Wyden. What I want to know, Ms. Collins, now that 
your associates have said that's right, when we're going to 
hear we're going to get that money back?
    Ms. Collins. What I will commit to you is I will tell you 
what exactly is going on and what decisions were made and why. 
And again I'm not--I need to talk through this at a much larger 
level, because we have every regional forester, as I've said, 
making that exact same case. And we did come together in terms 
of national priorities and looked at this.
    Senator Wyden. Who were the people in this region who said 
they were willing to give up their money for work that would 
unstick these projects? What are their names?
    Ms. Collins. One of the things that really--I will say I'm 
proud of the fact that we have regional foresters that came 
together looking at a very national perspective and said, What 
is it that we need to do nationally? And they came to a 
consensus about that. And it wasn't an easy decision for 
anybody because there were losers and there were winners all 
over the country. And there were people frustrated and people 
feeling like it's about time. This is a well-funded region. It 
has been a well-funded region for many, many years. 
Comparability between regions is if you go to a place like 
Colorado, you'd find a very different situation in terms of 
funding.
    Senator Wyden. Do your associates know the people from the 
region who said it was okay to give up the money? Any of your 
people in the back?
    Ms. Collins. It wasn't a person. It was a collection of 
people, and that was the point I was making.
    Senator Wyden. I'm going to wrap this part of this 
discussion up by way of asking you how does the Forest Service 
reach their national priorities to cut this money from a region 
like this? We've got the highest unemployment rate in the 
country. We've got projects that you have said work and what 
more do we have to do to get a fair shake in terms of the 
dollars? Highest unemployment, projects that work, projects 
that Mr. Ferrioli has said repeatedly have been approved. What 
else is there left for us to do to get our fair share?
    Ms. Collins. Well, I think one of the things that continues 
to make a difference is to have hearings like this, to talk 
about the issues, to talk about what is going on to make people 
aware of what's going on here.
    Like I said before, I think people are making this case 
everywhere, but you are and we have great examples in Oregon. 
As I said at the beginning, this is a place where the 
beginnings of a lot of creative ideas start here, and so I 
think it just makes people aware of what's going on.
    I also think that we live in a national world with national 
priorities, and we have got to keep all of those, we have got 
people all over the country making the same or a different set 
of cases.
    Senator Wyden. Let me ask you a technical question. Did 
NEPA law and regulations allow forest agencies to use 
categorical exclusions as a way to expedite the NEPA process? 
The service lost its categorical exclusion authority for timber 
sales because it lacked information for why it set the levels 
for categorical exclusions. You know, 250,000 board feet and 
that sort of thing.
    Now, the Forest Service still has not corrected that lack 
of information. What is the time line for the Service to 
complete this work so that once again you can use these, you 
know, exclusions again to help the people in this part of the 
country?
    Ms. Collins. Yes, categorical exclusions are really an 
important tool and they were taken away through a lawsuit a 
couple years ago. We have been in the process of gathering that 
information and we do have that information gathered. We should 
have a draft Federal Register notice out this summer on a 
couple of those categorical exclusions, getting them back. And 
the ones that are really important to us here are the ones for 
small sales of material and prescribed burning and some of 
those that relate to forest health treatments. Two that are 
coming out this summer are related to the sale of product, 
vegetation of the national forest.
    Senator Wyden. Let me ask another couple of process 
questions that might speed things up for folks in central and 
eastern Oregon. I think it would be fair to say that probably 
every few months we get pretty frantic phone calls, our 
delegation does, that some particular project, XYZ project, is 
going to be stalled for 6 months or so unless your NMFS or Fish 
and Wildlife Service can complete endangered species 
consultation responsibilities.
    Now, as you know Congress has considered allowing 
authorized agency biologists--Forest Service, BLM, a variety of 
agencies--to perform this function. What do you think having 
this kind of authority would do for you in terms of expediting 
the process for these projects that we're talking about?
    Ms. Collins. Somebody presented that just in the last 
couple of days, so I haven't really done a lot of thinking 
about it. What we do know is that the kind of biologists--the 
qualifications of the average biologist who does consultations 
for the National Marine Fishery Service basically has the same 
credentials as the biologists that are doing our biological 
work. So there's no reason in terms of skills that we could not 
do that work, and I believe they would have the knowledge or 
understanding or ability to do it.
    And so the question is, I think, it's one of those things 
that we're going to have to talk about and spend some time 
exploring. As it stands it would take some legal authority. 
We're not right now a regulatory agency. We're given some 
regulatory authorities. But the side that we have to look at is 
what does that bring to us in terms of we might be able to 
expedite projects, but I also know that National Marine Fishery 
Service has a lot of lawsuits. We may be inheriting all of 
those along with all the benefits of an expedited process.
    I think we just need to talk about it and look at it. I 
certainly think we have got the qualifications. We have got our 
folks out there talking with each other, and I think 99 percent 
of the time there's unanimity and agreement on what we need to 
do. And there are places where we actually have paid to have a 
National Fishery biologist to do our consultation. They work 
for National Marine Fishery Service but we work closely with 
them.
    Senator Wyden. Rick, what's the take on this from the 
environmental community? It would seem to me that working 
something out here among all the stakeholders would just make 
sense, and I'd be interested in your position.
    Mr. Brown. I guess I wouldn't rule out the possibilities, 
but I guess as part of that checkered past that I alluded to, I 
spent 6 years as a biologist with the Forest Service. And I 
think it's really important that, particularly in the 
endangered species setting where the stakes are so high 
biologically, it's really important to have that independent 
examination of what's being proposed without sort of the 
within-agency context and the pressures that go with that.
    As I said, I don't want to rule out any possibilities, but 
I think there will be a lot of reluctance on the part of the 
environmental community.
    Senator Wyden. There's a couple of other questions, Ms. 
Collins, for you. On this question of streamlining and 
paralysis analysis issue, this is an area that is indisputable. 
There is all kinds of just sort of excessive, you know, 
gobbledegook in those rules. My colleague, Senator Craig, made 
a number of very good suggestions over the years to get at some 
of these rules and requirements. And I know you all are looking 
at a number of them and we're anxious to have your views on it. 
But isn't it correct to say that the only way you're going to 
cut through some of the regulatory surplus, the stuff that's on 
there really for no logical reason, isn't it correct to say the 
only way you're going to do that in a timely fashion is through 
legislation?
    I mean you can go off and spend probably 5 years talking 
about this and having discussions that are useful, and it 
certainly sounds useful from what I've heard, but isn't it 
correct that the only way you're going to make significant 
changes in streamlining the process in a timely fashion is 
through Federal legislation that does it?
    Ms. Collins. I think you're right. I think that we have the 
ability and the authority to work with regulations, Council of 
Environmental Quality, which we're doing, U.S. Fish and 
Wildlife Service, which we're doing, and we will do that and we 
will continue to do that and we will continue to try to make 
the changes that we can make internally with our own 
regulations, which we're looking right now, but it does take a 
tremendous amount of time.
    John and I were talking before the hearing that I've only 
been back in Washington 2 years, but things move slowly there. 
I thought they moved slowly in terms of project management out 
here. They work really slowly back there. And so I do think 
that there's a potential to expedite the process if there's 
some congressional help.
    Senator Wyden. The Forest Service is looking at a variety 
of ways to work with resource dependent communities to find new 
commercial uses for various opportunities: small trees that 
need to be removed to decrease catastrophic fire risk. And my 
question to you is if Congress accepts the administration's 
fiscal year 2003 budget request to zero out the Forest 
Service's economic action programs, how would that affect your 
ability to assist communities in creating these economic uses 
of various kinds of products on the forest floor?
    Ms. Collins. Well, I think in some places it will have an 
impact for sure.
    Senator Wyden. A negative impact?
    Ms. Collins. A negative impact. We've seen a lot of 
positive impacts with those dollars being distributed in 
Oregon, but we also still have quite a lot of authorities for 
economic development in our State and private authorities. We 
still have the Wyden Amendment. The National Fire Plan has a 
number of dollars that are going to continue to be available 
for biomass, for additional alternative forest products, small 
diameter material. So while we've traded some programs, we've 
gotten others with the National Fire Plan funding.
    Senator Wyden. Well, you just did something really gutsy, 
because, as you know, the administration is proposing to zero 
out those programs, and you've said, and what I think I've 
heard from every single official in rural Oregon, that's going 
to have a negative impact. And (A) I commend you for your 
candor, and (B) we will work with you to try to make existing 
dollars stretch, number one. Number two, I can tell you Senator 
Craig, Senator Murkowski, myself and Senator Bingaman have 
already weighed in we're going to do everything we can to keep 
those dollars, because I think it would be a tragic mistake to 
take away the Forest Service funds for economic action programs 
when there is so much to do. I don't think you can defend that 
in front of Senator Ferrioli's constituents.
    Let me turn now to some of our other panel members. I'm 
sure Sally will be happy to have a break. John, if you would, 
describe what has happened at your mill and why the predicament 
that the community now faces in your view has reached this 
point and what we ought to do.
    I mean it seems to me you, and nobody wants to be the 
poster child, you know, for this, but it seems to me that you 
provide a very real world example of what all sides ought to be 
somersaulting to void. It just seems so needless and so 
unnecessary, and I think it would be helpful if you could sort 
of lay out what you think got us to this point and then what 
you think is necessary to extricate us starting on a path that 
makes sense for the environment and for economic needs.
    Mr. Morgan. Well, number one, I think we're victims of 
circumstance. I don't think it's lack of management skills or 
anything that's caused where we are today with the shut down of 
facilities and with the amount of dollars that we have invested 
in retooling, because we thought that the Forest Service was 
heading towards smaller material and we retooled and invested, 
like I said, a lot into that.
    The problem is a lack of resource availability. The funding 
is there but a lot of times it has to be--they're redoing over 
and over because of appeals and lawsuits and having to go back. 
In industry when we get a certain amount of dollars we go out 
and we put that into good work and we accomplish something. 
It's like a farmer plowing his field. You make a circle, you 
look back and you feel that you accomplished something.
    With the Forest Service, they look back and I don't see 
that they feel that they've accomplished anything. And a good 
example of this is a 34 cent stamp and the process that halts 
it. A good example, I think, is just 2 years ago when the Ash 
Rock Timber Sale burned 18,500 acres, 15,000 of that was in the 
wilderness and was not going to be touched at all. There was 
only 3,500 acres that was outside that was in management to 
where it could be logged and harvested. Of that 3,500 acres, 
only 500 acres was targeted for cutting. The 34 cent stamp 
comes, goes through the court system, and it was held up not on 
content, more of a procedural deal, because it didn't identify 
aspects in the report. All of the things the Forest Service did 
in the EA was there, but because they didn't mention a certain 
report that was mentioned by the regional forester, the project 
got halted.
    We can take a look at the BLM sale in the John Day area. 
Timber Basin same way. There is one right now, the R and R 
salvage in the Deschutes is the same way.
    It's a lot of money and time and effort has been put into 
these projects, but they're being halted and then you have to 
redo them, and all of a sudden they give up on them. 
Particularly fire sales. They throw it out and they go forward 
and all that money is wasted.
    Senator Wyden. So you've got people particularly on each 
side of your flank, two people that can do something about 
this: an environmental leader and a leader from the Forest 
Service. What do you want to tell him that everybody ought to 
work on together to avoid this?
    Mr. Morgan. Well, I think I know for our company and I 
think the industry as a whole, you're always going to find 
extremes on either side, and we need to find the middle ground 
to go forward. And with the Forest Service I feel their 
frustrations a lot of times, because I know some of the 
questions that you asked Sally about the funding and all the 
things that goes forth there, that the money is being spent and 
work is being done over.
    From the environmental community we understand that 
everybody has their thoughts and their ideas on how things are 
running, but again we need to find a middle ground and go 
forward and not have to be halted. And there is a certain group 
that's on the outside that'll come back after something's been 
done collaboratively supported by a general group and it's 
stopped. And I think that's the processes that we've got to do 
is we've got to get back to reason and common sense and let the 
professionals be able to manage.
    It's like us as foresters, we don't go and tell a doctor 
how to operate on a brain surgery. And a lot of times I think 
that that's it, the professional people are not being able to 
manage scientifically. It's more public sentiment.
    Senator Wyden. Rick, you've heard John talk about what 
happened with the mill and all the devastation that he's seen 
visited on the community. You've heard Senator Ferrioli talk as 
well. What is your sense about how the environmental community 
can help make some common ground here and come up with projects 
that make sense?
    And by the way, when I was talking to you about unsticking 
the huge number of board feet in terms of the projects, I want 
to make it clear, that projects consist of a lot more than just 
board feet. There's a tremendous amount of restoration work 
that can be done that is enormously important in terms of 
environmental value. So that is why I have become so passionate 
about getting these projects done, is that they make sense from 
the environmental standpoint and they make sense from an 
economic standpoint. Rick, what are your thoughts in terms of 
how you respond to the frustrations that John and Ted have 
described?
    Mr. Brown. Well, on a very simple level I share them. As I 
alluded to earlier, I've been writing, testifying, talking for 
years, better than a decade at this point, trying to get these 
same sorts of things moving on the ground. I've spent 3 years 
on the Governor's Eastside Forest Advisory Panel. I've spent 4 
years in Lakeview trying to promote this. I've put substantial 
time and effort into producing a report for Defenders of 
Wildlife, Getting Fire and Forest Restoration, a Science-based 
Approach for National Forests in the Interior Northwest.
    Trying to find that common ground of a science, we spent a 
lot of time, I think, pretending that the issues are either 
scientific or technical or that they're part of NEPA process or 
something else. What they're really about is trust: lack of 
trust. And particularly a lack of trust from many in the 
environmental community.
    I think that there are some in that community who you will 
never bring in the fold of agreement. They are steadfastly 
opposed to commercial logging and logging on the national 
forest lands.
    I think there is also a substantial number in the 
environmental community that are currently opposed to many of 
these activities because of their history with the Agency and 
with the funding that the Agency is getting and how things have 
been driven in the past. Until we can get a clear message of 
what restoration is and that that is what is going on and that 
the timber is a by-product of ecologically justified 
restoration, we are not going to get past that distrust.
    The Forest Service is easy to pick on and it's many things. 
It's a bureaucracy. It's a collection of individuals that have 
the strength and opinions that we all do, but it's also an 
instrument of public policy. And I think a large part of the 
problem right now is that the public policy is not clear. There 
are divided messages. There's the one that you clearly state 
today about restoration and a lot of things need to be 
happening on the ground. The budget that comes down doesn't 
correspond.
    Senator Wyden. I don't want to go into the budget with Ms. 
Collins anymore.
    Mr. Brown. Until we get that message out, we're not going 
to overcome that distrust, and overcoming that distrust is 
manifest. That's what I spend a lot of my time trying to do. I 
think I've made some progress, but not enough obviously.
    Senator Wyden. Let me just ask one other question in terms 
of projects. As I approach it seems to be low hanging fruit 
from the standpoint of the environment and the timber industry, 
and yet it hasn't worked out that way, and that's the biomass 
and energy production question. Now, Mr. Morgan's been 
interested in this for quite some time in developing long-term 
biomass contracts in which the Agency would assure an energy 
producer a 10- or 15-year steady supply of a certain amount of 
wood fibers. Here would be a chance for a real live 
partnership. You know, mills, Forest Service and the 
environmental people. And yet we can't seem to get there. Can't 
seem to get it done.
    Why don't we just lock you two in a room with the Forest 
Service and say we're going to keep you there until we get a 
major biomass initiative done that will address clean energy, 
family wage jobs for Ted Ferrioli's constituents and something 
the Forest Service can back stop? Why shouldn't I just go tell 
Senator Smith and Congressman Walden, Let's clear our calendars 
for a couple days and we'll all just sit there until we walk 
out of there with a major biomass initiative?
    Mr. Brown. It's not clear to me, Senator, that that 
proposal that has been brought forward in this state anyway, 
that have been brought forward to the point where they have 
been actively and effectively opposed by the environmental 
community. What I run into is simply lack of inventory data. 
Knowing what's out there in terms of potential for reducing 
that material. But I agree in the abstract, it's a potentially 
very viable use. To the extent that I have heard concern from 
the environmental community, it's about establishing yet 
another industrial capacity out there that then 10 years down 
the line somebody turns around and says, The capacity's here; 
the forest is obliged to meet its demands.
    I think if we can find a way to get past that hurdle, but I 
think it's largely a scaling problem. Maybe a technology 
problem. But I think there's some real possibilities.
    Mr. Morgan. Senator, a lot of it is of course based on 
economics, and the intent there, I mean, if you could have the 
facilities operating, just the small material itself won't 
stand on its own. It can't pay its way. There has to be a 
fallout of some kind of a merchantable product that goes with 
it. But there's so many other benefits that goes with it. I 
mean fire suppression, of course, is key. Besides the benefit 
of reducing the stock, you're adding growth on other trees to 
bug proof them and also be able to grow bigger trees quicker.
    But I think the real key to it is the economics, and it 
won't stand on its own currently, and it's a trust level. I 
mean it's just like us putting in $15 million for a small log 
mill and 13 years later we're out of business because we don't 
have a supply. I think there's always that fear going also. And 
so that's why there needs to be a long-term supply availability 
and a commitment level and accountability level to make sure 
that that's there.
    And there is so many benefits positive that would come 
forward with that, but again the initial part of it is it won't 
stand on its own with just dealing with a small product and the 
power to pay for it because of investment.
    Senator Wyden. Ms. Collins, I'd welcome your views on this.
    Mr. Blackwood. I'd just like to comment on that because we 
really agree there's a lot of material out there that could be 
utilized along those lines, and the question of how much has 
pestered us for years. And through the Blue Mountain 
Demonstration Area, we teamed up with the Oregon Department of 
Forestry to actually find out how much is out there and where 
it is. And especially these densely stocked stands. And what we 
found was in a report that is soon to be released here, that 
only about 20 percent of those densely stocked stands will pay 
their own way out of the woods. So Mr. Morgan is right on. The 
economics aren't there.
    We're exploring some other things through the Fire Plan and 
other methods to see if there are ways to rent processes to 
help augment that transportation cost, but I think there are 
some options out there, and there certainly are some 
opportunities.
    Senator Wyden. My understanding of this situation is that 
the Forest Service does not have the legal authority today to 
enter into long-term contracts on something like this, but if 
we could get the Forest Service, our mill operators and 
environmentalists together on a significant biomass initiative, 
that would certainly lay the ground work for me to try to get 
the legal authority for the Agency to do that. I'd like to 
pursue that. I'd like us to have the Forest Service get with 
Mr. Morgan and others in the industry and, Rick, you would be 
involved and anybody else you'd like to bring in. Could we 
pursue that as a joint effort between the Forest Service, the 
timber industry and the environmental community in terms of a 
biomass initiative?
    Ms. Welden. I think that would be great, if I can just 
speak for Sally here. In central Oregon we have an effort 
underway that's resulted from one of our Fire Plan grants that 
is specifically looking at how we build markets and really 
examining what the need is, and around central Oregon there's 
quite a bit of need associated with our Wildland-Urban 
Interface and our wild lands.
    We've got a market analysis that's going on through a grant 
that was provided to Central Oregon Intergovernmental Council 
asking that question: How can you figure out how to make this 
kind of market work? And as John has said and Jeff has echoed, 
a lot of it has to do with our ability to guarantee some profit 
as it relates to getting those materials out of the woods.
    And I think further analysis will be needed to make sure 
that we've got the ability to have some infrastructure to 
support those kinds of studies. So we're right here, I think, 
to take on that kind of opportunity.
    Senator Wyden. Let's do this, then, let us have the Forest 
Service, and Mr. Morgan and the industry, Rick and the 
environmentalists begin to work with Mr. Blair, who all of you 
know in our central Oregon office, to see if we can get the 
outlines of a significant biomass initiative together. One that 
would have support from the major stakeholders. I'll tell 
Senator Smith and Congressman Walden about that, and of course 
their folks are here. And if we can come up with a significant 
biomass initiative here, we might be able to break the gridlock 
on something that looks like a very promising opportunity.
    This is something that could make a real difference to 
people in rural Oregon. If it's sound from the environmental 
standpoint, if it's sound from the energy standpoint, then it 
looks to me like a no brainer in terms of going out there and 
hustling and trying to put it together.
    So we will have all of you designate one of your people. 
David Blair is this young gentleman sitting behind me. He's 
single so he has all kinds of free time, evenings and weekends, 
and just work him to the bone to get this biomass initiative.
    All right. Let me wrap up with one last thought. This is by 
any calculus a really blue ribbon panel. I look at a 
legislative leader who speaks with great expertise for his 
constituents. Rick is an environmentalist. John is on the front 
lines in terms of industry issues for years and years. And Ms. 
Collins is someone who a lot of people think will be the head 
of the Forest Service one day.
    By any calculus this is a blue ribbon panel. And I want to 
wrap up by way of saying that we're going to try very hard to 
pass a significant Forest Health bill in this session of 
Congress, even though there's not a lot of time left. And it's 
built around the proposition that I don't think you can do the 
important work without legislation. And to your credit, Ms. 
Collins, you basically said as much in terms of one of the key 
elements is some way to get out of this unnecessary set of 
regulatory hoops that seem to accomplish nothing except add 
time and expense to the process. But to do it we're going to 
have to find some common ground among people like yourself.
    We did it on the County Payments. Nobody thought that that 
was possible. Nobody thought that you could bring together 
people like Larry Craig and I and pass a bill where there was 
tremendous pressure from all sides to drive this to extreme 
positions. We will have even more of that on the forest health 
issue.
    So I want to wrap up by way of saying thank you and these 
are important issues to people in these rural communities who 
feel strongly about them. People all over the State of Oregon 
feel very strongly about them, because we've said in this State 
that we want to protect our treasures and be sensitive to the 
need for people to have good paying jobs, and that's a lot 
easier to say than to actually do day in and day out. But I've 
got enough confidence that there's talent in this panel to help 
us and help us in a meaningful way.
    We urge you to give us your suggestions as to what ought to 
go into a forest health initiative and invite you to do it with 
us, and we'll do it on a bipartisan basis. And Senator Craig 
and I have talked already about a number of times. Your ideas 
and suggestions are very welcome and I thank you for taking the 
extra time this afternoon. I guess we began in the morning and 
people must think they ought to start ordering dinner. But 
you've been very helpful, very constructive, and I thank all of 
you for your participation.
    Let us go now to our third panel: John Howard, commissioner 
from Union County; Bill Tovey, Confederate Tribes of the 
Umatilla Indian Reservation; Tom Brumm of the Oregon Economic 
and Community Development Department and Mark Jeffrey, 
superintendent of Paisley School District Number 11.
    Folks, we've been going at it now for about 3 hours, and I 
want to let these good souls have a chance to get at least part 
of their day for their business. Let's go first to John Howard, 
and we're going to make everybody's prepared remarks part of 
the record in their entirety. And I know there's almost a 
biological compulsion to read the statements, but if you can 
just sort of summarize your key concerns.
    We're very pleased to begin with somebody who's been a 
great help to this subcommittee in the past. John Howard is an 
outstanding county commissioner and, John, please proceed.

        STATEMENT OF JOHN HOWARD, COUNTY COMMISSIONER, 
                        UNION COUNTY, OR

    Mr. Howard. Thank you, Senator Wyden, and, you know, again 
from our county we'd like to express our appreciation to you 
for all the work you've done for us and working with Senator 
Smith and Congressman Walden, and particularly in the County 
Payments Legislation. It's been put to good use.
    But I do have my written statement and then I'll just leave 
that for the record and just summarize my comments. I think 
what I'd like to do, Senator, is talk a little bit about 
resource management issues and fold it into the need of looking 
at economics.
    But in the early nineties the issue of forest management 
and when I look at it it actually occurred in the early 
nineties when the salmon, steelhead, bull trout were listed in 
the Endangered Species Act. That started a watershed fall of 
putting in interim strategies called PACFISH and INFISH, and 
then Eastside Screens came into play with concerns over the old 
growth management. And from the early nineties, that pretty 
much tightened the net up on the pipeline as far as timber that 
was in the works.
    And there was an attempt to try to resolve these interim 
strategies around 1994 with the Interior Columbia Basin 
Management Strategy was established. We thought we were there 
in 1996. We had a first draft plan. The counties were really at 
the table at that time. However that draft plan got put on hold 
and it was pretty much politics was downhill from there on. And 
the whole process pretty much collapsed from that point on.
    And then from that period on there's been a lot of mill 
closures, and I just can't count how many mills have closed. 
There have been three in our county, two in Wallowa County, one 
in Baker County, several in Harney County, and I can just go on 
throughout eastern Oregon. The heart of the problem that I see 
is the need to replace the interim strategy, PACFISH and 
INFISH. Those are very restrictive strategies and we still 
don't have anything resolved in the long-term. And we need to 
figure out how we're going to address these outstanding issues 
and that's how we're going to get back to the process of 
managing our public lands.
    There have been some bright moments in eastern Oregon. It 
was mentioned earlier by the panel, the Blue Mountain 
Demonstration Project. It did stumble early on. It's gotten 
back on track to a certain degree and we are seeing some 
projects coming out. But we need to use that demonstration to 
get to the heart of the problem on the process, on how the 
projects are developed and the time and length it's taken.
    Some of the things that we have done in our county, we have 
taken initiative in creating a Community Forest Restoration 
Board. In fact, Senator, we talked about this last year.
    Senator Wyden. Right.
    Mr. Howard. And I told you I'm interested in it and I've 
been working with the district ranger on this and our goal is 
to kind of turn out projects within a year's turn-around time 
to the NEPA process. And we are getting close to being there. 
We've got one that's taken 13 months. We have one more it's on 
track for about 12 months and another one about the same 
schedule.
    But we do have a pilot authority stewardship contract. We 
are looking at what we call an integrated resource contract. It 
uses a timber sale contract as the basis and refines the 
contract methods from other steward-like service contracts. It 
creates a new method. And we feel this is probably a trend 
that's going to be seen and developing.
    We think it gives more flexibility to the ranger for 
management and it gives more long-term contracting ability for 
local contractors. I would like to also add that the other 
areas of concern that I've seen over the years is we're dealing 
with three cabinet levels on resource management. We're dealing 
with the Department of Ag with the Forest Service, Department 
of the Interior with Fish and Wildlife Service, and then with 
the Department of Commerce with National Marine Fishery. It's 
somewhat of an uncoordinated effort in resource management and 
it just takes so long getting projects through the consultation 
process. And I'd like to give you a little history.
    Last year we had a county bridge that we were going to be 
replacing on Pelican Creek, and it dried up around August or 
September or so. And we were toward the end of the window of 
opportunity to do this construction work for the bridge 
replacement, and our public works director called me and our 
watershed program called me and said, Time's running out. We 
have until Tuesday to do the work. And this is Thursday.
    And I called the consultation office in La Grande and said, 
Randy, now would be a good time to get that permit. And it was 
in the afternoon and finally we got the go ahead to do the 
work. But it was a not likely effect call. It was a no brainer. 
No water in the stream. The creek was dry. We were taking a 
culvert out and putting an eco block bridge construction in 
place. But, you know, it took me to call to get the project out 
and get the work done on it.
    I'd like to talk about Region 6 a little bit. And Region 6 
Headquarters Forest Service is looking at a new appointee for a 
person there. I would like to see this person be very 
aggressive in going after funds, defending the region during 
when budget cuts are being sought. We need someone there that 
can stand up and defend the rest of the rank and file within 
Region 6 office.
    I would also add, Senator, we need a Region 6 supervisor 
that will take their share of stewardship contract authority. I 
think the last go-around I think we got three, four, something 
of that nature, stewardship contracts out of 23 or 26, whatever 
it was. When I was back in D.C. in March I had a chance to 
visit with Dale Bosworth, the forestry chief, about when he was 
in Region 6 how come he got so many stewardship authorities? 
And, you know, basically I went and got his take on it. But 
when I came back to take a look at it again, it was not in the 
interest of the region to look at these stewardship 
authorities. So I guess I would ask you, Senotor, to help us 
get a Region 6 supervisor that's going to be a strong advocate 
for the region, and also somebody that's going to be looking 
out for rural assistance programs as well.
    We utilize those programs to the max. In fact we used our 
county funds to match Forest Service projects on their public 
land and then we used rural systems projects to work for our 
benefit as well. It's been working both ways. I would also say 
that we are working on the biomass end of it too. We have a 
company called Sustainable Northwest or Sustainable Energy, I 
believe it is, is making an investment into the biomass 
operation in our county, so we're working on it too.
    One of the things that I would like to talk more about is 
the economic assistance program. We've been working the last 3 
years in eastern Oregon communities and I want to say Idaho, 
Montana and Washington and the interior Columbia Basin on an 
economic investment strategy. And we have done studies on this 
doing some analysis on it, looking at social impacts. And we 
made an effort to try to get it in the budget last year. We 
thought it was going to be there, but it was taken out, and not 
only was that taken out, but other rural assistance economic 
programs were cut as well.
    And when you have communities in eastern Oregon that have 
double-digit unemployment rates for the last 4 or 5 years or 
beyond, and we have not seen the economic surge in the nineties 
on the east side as the west side, you know, that's kind of 
heart breaking for us to do to take those setbacks. And I guess 
what I'm asking you, Senator, is we need your help to secure 
funding for these rural assistance programs as well as fixing 
the problems on forest management. And that concludes my 
comments.
    [The prepared statement of Mr. Howard follows:]
        Prepared Statement of John Howard, County Commissioner, 
                            Union County, OR
    Thank you for the opportunity to testify at this field hearing 
today. I would like to take this opportunity to answer some questions 
regarding public land impacts on rural communities.

1. Explore the relationship between how lands are managed and the 
impacts on rural economy.

    How our national public lands are managed has a direct economic and 
social impact to communities. In the early 90's when bull trout, 
steelhead and salmon were listed as a threatened species under the 
Endangered Species Act, it lead to review of existing management plans 
and as a result temporary management strategies were set in place which 
included PACFISH and INFISH. Additionally, Eastside Screens were set in 
place to address assumptions that forest plans did not give direction 
for management of old growth forests. Eastside Screens have directed 
public land mangers to only remove trees that are 21 inches and smaller 
constraining their ability to meet resource objectives. The PACFISH and 
INFISH strategies have created 300 feet buffer zones on each side of 
streams. There are also buffer zones of 150 feet on each side of 
intermittent streams.
    These temporary strategies were only to be in place for 18 months 
and that was back in the early 90's. There was an attempt in the mid 
90's to develop a long-term plan for the eastside forest and rangeland 
called the Interior Columbia Basin Eastside Ecosystem Program that 
would replace the restrictive temporary strategies. However, the 
planning process became polarized by Washington politics and collapsed. 
We are also witness to the time and energy it has taken for public land 
managers to produce projects through the NEPA planning process and the 
consultation process with regulatory agencies. These federal decisions 
have had a profound effect on the economies in rural communities in 
Eastern Oregon. We have consistently seen double-digit unemployment in 
the majority of rural counties from the closure of so many sawmills. To 
date these communities have had limited success in improving their 
economies and with limited federal help.

2. Review the environmental health of the National Forest.

    With the limited ability of the public land managers to manage the 
forest and those organizations that have been successful in their 
attempts to stall the process, we are a long way from having eastside 
forests sustainable for the long haul. In fact, with the public land 
managers having been tied up with policy constraints and the lack of 
past leadership ability to resolving the issues surrounding public land 
management direction, the eastside forests have continued to become 
over stocked with small diameter trees. The Blue Mountain Forest 
historically was comprised of 60 percent pine and 40 percent grand fir 
and Douglas-fir species. Today we have just the opposite of 60 per cent 
fir species and 40 percent pine. The gridlock of management from the 
early 90's to date has accelerated the forest condition to be prone to 
beetle bait and has become more susceptible to major wildfires. Many 
streams in Eastern Oregon also lack the woody debris and stream 
structures for improving habitat conditions for aquatic species. There 
has also been an encroachment of fir stands in riparian habitat that 
has pushed out cottonwood and brush along stream sides. Cottonwood and 
brush provide excellent habitat conditions for streams. There is much 
work that needs to be done to improve our riparian habitat conditions 
for our forest and rangeland streams. The current PACFISH and INFISH 
interim strategies are standing in the way of improved stream habitat 
conditions.
    The Blue Mountain Demonstration Area has given rural communities 
some encouragement working with state, private and local public 
officials to improve the management conditions. We have seen success 
with the Blue Mountain Demonstration Area, but more needs to be 
accomplished such as replacing the temporary restrictive strategies 
with a long-term plan and improving the length of time it takes to 
produce projects. The consultation process also needs improvement to 
assist land managers. The process spends too much time worrying about 
short-term impacts and not considering the long-term improvement 
benefits for species habitat conditions.
    I want to stress that the restoration needs on public lands 
surpasses the ability to complete work because of interim strategies 
and the NEPA and consultation processes. Thus, even though on the La 
Grande Ranger District they are exploring innovative techniques and 
processes they are unable to get ahead of the restoration curve.
    Our Union County Community Forest Restoration Board that was 
created last spring has been working hard with our local U.S. Forest 
Service district ranger to improve the planning process and to give 
guidance for restoration projects. We also have been supportive of 
testing new contract methods for improving forest function conditions 
such as an integrated resource contract. We also will be monitoring the 
new contracting method. We believe that we need to explore new 
contracting methods to meet the needs of restoring our forest 
sustainable levels.

3. Review the economic assistance to natural resource dependent 
communities.

    Federal policies from the past ten years and the laws that govern 
public land management have hard hit resource dependent communities' 
economies. During the last ten years we have seen these rural economies 
tumble to double-digit unemployment as mill after mill closed. Many of 
these mills have been auctioned off and sent to other Countries. 
Eastern Oregon rural communities did not have the economic surge that 
was seen in the 90's in other Oregon communities. State, Tribal and 
local officials have been working together to form an Interior Columbia 
Basin Economic Adjustment Strategy for the past three years. We had 
hoped that the President had budgeted the funding of the initiative. We 
not only lost our struggle to secure funding for the strategy in the 
Presidents budget to rebuild our rural economies cause by federal 
policies, but we were also surprised to see major cuts proposed in 
other existing rural assistance programs. The communities in Eastern 
Oregon need federal economic assistance to rebuild our struggling 
communities from there past federal decisions. Our federal government 
also needs to resolve the long-standing forest management constraints.
    Thank you for allowing me the opportunity to comment on these 
issues of critical importance to Eastern Oregon communities.

    Senator Wyden. Very good, very good. Mr. Brumm, welcome. No 
one has done more on these issues than you.

 STATEMENT OF TOM BRUMM, INTERGOVERNMENTAL RELATIONS MANAGER, 
OREGON ECONOMIC AND COMMUNITY DEVELOPMENT DEPARTMENT, SALEM, OR

    Mr. Brumm. Thank you, Senator. Good afternoon. I appreciate 
being here. John took a little bit of my thunder but not enough 
that I won't go into it. I would like to discuss with the 
committee a project called the Inland Northwest Economic 
Adjustment Strategy. It's a project of Oregon, Washington, 
Idaho and Montana, that we've been working on for 2 years. This 
region consists of 97 counties and 14 tribes in eastern Oregon, 
eastern Washington, Idaho, and western Montana.
    I don't need to go into all the Federal resource management 
policies and court decisions that have got us to the point of 
where we're seeking Federal assistance to redress some of 
these. I think you heard a lot of real life examples from 
Senator Ferrioli. But I would like to point out why I think the 
Federal Government has a particular responsibility to this 97-
county region that we have identified.
    There is a greater concentration of Federal land ownership 
in the inland northwest, 54 percent versus 23 percent 
nationally. And just, for example, we know that 52 percent of 
Oregon is owned by the Federal Government. Nearly two-thirds of 
Idaho is owned by the Federal Government. Our economic analysis 
that Commissioner Howard referred to shows that 97 of the 99 
counties in this region are economically distressed with 53 
counties or 55 percent low or very low economic vitality.
    Possibly the 2000 census might change that, but I doubt it 
will change it much, and I think in many areas it's getting 
worse. Such as the 17.5 percent unemployment in Wallowa County, 
for example.
    There's been a continued decline in per capita income with 
this region falling further behind the rest of the Northwest 
and the Nation and widening the urban-rural economic divide in 
all four States.
    This region is also more dependent upon forest products 
than the west side of Oregon and Washington or the Nation. More 
mills have closed in this region than remain open. While 110 
have closed, 109 remain open and these aren't counting mills 
that have closed in the last year. We've heard about one, 
Ochoco, so there are others.
    Our analysis also shows that lack of Federal timber 
supplies is a significant factor in the closure of eight of ten 
of these mills. In addition to wood products, this region has 
seen serious declines in many agricultural sectors, mining and 
the downsizing of Federal energy facilities in Washington and 
Idaho.
    From 1993 to 1998, the Federal Government spent 
approximately $1.2 billion addressing very similar problems in 
western Oregon, western Washington and northern California. 
Even though the problems of this region are the same or 
possibly more severe because you have more remote, more 
resource dependent communities, no Federal funds have been 
targeted to relieve the economic distress in this region, and 
the needs of this region exceed existing allocations for 
Federal economic assistance programs.
    What we are looking for is a coordinated effort on the part 
of the Federal Government working with State, local and tribal 
governments to address economic conditions in the region.
    As I've said, we've been working on this for a couple of 
years. We've done a number of things and I'll just mention them 
very quickly to show that this isn't, you know, sort of 
something that we just happened upon. We've really tried to 
make a case as to why things are different.
    We secured two Economic Development Administration Grants 
thanks to Ann Burg, who's sitting in the back of the room 
there, to help us do these studies. We have a steering 
committee that's representative of State and local governments 
and tribal governments in all four States. We hired some 
consultants to review 164 community and tribal economic 
development plans to try to get some idea of what people 
thought needed to be done.
    We held 14 forums in four States attended by over 800 
people to tell us what kind of assistance communities needed 
most. This project has been endorsed by all four governors, the 
Affiliated Tribes of Northwest Indians and most city and county 
associations in the four States.
    We've continually met with representatives in the Bush 
administration and had a continuing discussion with members of 
the Congressional delegations from the four States.
    However, despite all that we failed in an attempt, as 
Commissioner Howard said, to get included in the President's 
proposed fiscal 2003 budget. I think we might have succeeded 
had not 9-11 happened, but nevertheless it doesn't change the 
need. We're going to review whether we should try for 2004, but 
we do need help from Congress. We would like to secure some 
funding in this appropriation cycle.
    Our forums identified needs in the areas of business and 
workforce development, funding to support value added and 
sustainable natural resources, infrastructure investments, 
tourism promotion and community capacity and building.
    I think the Federal Government can and should help this 
region. I just noticed that in the farm bill something called 
the Great Plains Basin Initiative or whatever secured $180 
million over 6 years to address economic problems in five 
Midwest States, none of which have hardly any Federal land 
whatsoever. So I do think that this--I think we can make a case 
as to why the Federal Government needs to be involved. We just 
need your help in getting there. Thank you.
    [The prepared statement of Mr. Brumm follows:]
 Prepared Statement of Tom Brumm, Intergovernmental Relations Manager, 
    Oregon Economic and Community Development Department, Salem, OR
    Good Afternoon. Thank you for the opportunity to testify at this 
field hearing. I would like to discuss with you a project that we call 
the Inland Northwest Economic Adjustment Strategy. City, County, Tribal 
and State governments in Oregon, Washington, Idaho, and Montana have 
been working for over two years to help distressed resource-dependent 
communities in the Inland Northwest, a region consisting of 97 counties 
and 14 tribes in Eastern Oregon, Eastern Washington, Idaho, and Western 
Montana. Over the past decade a collection of federal resource 
management policies, federal court decisions, and other factors, have 
had intended and unintended consequences for this regional economy. 
Therefore, we are asking the federal government to help mitigate the 
effects of its decisions on local economies and communities. The 
federal government can do this by working with the States, Tribes and 
local communities to invest in their continued social and economic 
vitality.
    In attempting to answer your questions on the relationship between 
how public lands are managed and the impact on rural economies and an 
evaluation of economic assistance to natural resource dependent 
communities, I would like to give the committee some examples of needs 
and conditions in this 97 county region and why the federal government 
has a special responsibility to the region:

   There is a greater concentration of federal land ownership 
        in the Inland Northwest, 54.6% compared to 23.5% nationally, 
        nearly two-thirds of Idaho is owned by the federal government.
   Our economic analysis shows that 97 of the 99 counties in 
        the region are economically distressed with 53 Counties or 55% 
        with low or very low economic vitality.
   There has been a continued decline in per capita income with 
        this region falling further behind the rest of the Northwest 
        and the nation and widening the urban-rural economic divide in 
        all four states.
   This region is more dependent on forest products than the 
        Westside or the nation.
   More mills have closed in the region, 110, than remain open, 
        109, and these figures have worsened since our analysis.
   Lack of federal timber supply is a significant factor in 8 
        of 10 of these mill closures
   In addition to wood products, this region has seen serious 
        declines in many agricultural sectors, mining, and the 
        downsizing of federal energy facilities.

    From 1993 to 1998, the federal government spent approximately $1.2 
billion addressing very similar problems in Western Oregon, Western 
Washington, and Northern California. However, despite the growth of 
similar and possibly worse problems in the Inland Northwest region, no 
federal funds have been targeted to relieve the economic distress in 
the region and the needs of the region exceed existing allocations for 
federal economic assistance programs. What is needed is a coordinated 
effort on the part of federal, state local, and tribal governments to 
address the economic conditions of the region.
    We have done the following to build understanding and support for 
the Inland Northwest Economic Adjustment Strategy:

   Secured two Economic Development Administration grants to 
        help document the conditions and needs of the region.
   Created a Steering Committee, which has met quarterly, 
        consisting of four state representatives and representatives of 
        Tribal, City and County governments in all four states.
   Reviewed 164 community and tribal economic development 
        plans.
   Held 14 forums in the four states, attended by over 800 
        people, to both document the need for federal assistance and 
        tell us what kind of assistance the communities needed most.
   Received endorsements from the four Governors, the 
        Affiliated Tribes of Northwest Indians and most City and County 
        Associations in the four states.
   Met with Administration representatives to seek federal 
        funds in the President's FY 2003 proposed budget
   A continuing discussion of the proposal with Members and 
        staff from all seventeen Congressional offices in the 4-state, 
        97 County region.

    We failed in our attempt to get funds allocated to the Inland 
Northwest in the President's FY '03 proposed budget. We are evaluating 
whether we should try again for the FY '04 budget. We would like help 
from Congress and our 17 member collective delegation in securing some 
funding for FY '03. Our forums identified needs in the areas of 
business and workforce development, funding to support value added and 
sustainable natural resources, infrastructure investments, tourism 
promotion and community capacity building. The federal government can 
and should help this region in these areas. I hope this committee 
hearing is a beginning in that direction.
    Thank you again for the opportunity to testify before this 
committee.

    Senator Wyden. Very good. Thank you. We have a delegation 
that teamed up and brought $1.5 billion plus to the region in 
terms of the County Payments Bill. So we're holding our own and 
you did draft very good work. I'm going to have to keep you all 
to the 5-minute rule just so we can close up the building at 
some point.
    Mr. Tovey, you've been very cooperative, you and the Tribe 
working with us.

  STATEMENT OF BILL TOVEY, CONFEDERATE TRIBES OF THE UMATILLA 
               INDIAN RESERVATION, PENDLETON, OR

    Mr. Tovey. Thank you, Mr. Senator, and good afternoon. My 
name is Bill Tovey. I'm the economic development director for 
the Umatilla Tribes of Northwest Oregon. I've been working with 
John and Tom for these last 3 years on this economic 
development initiative.
    On behalf of the great tribes of the Pacific Northwest, the 
Umatilla Tribe is one of those 14 tribes that is working with 
the four States within that region. The Affiliated Tribes of 
Northwest Indians have approved a resolution supporting this 
effort. However, there is one issue, there's a condition. The 
Tribes are really interested in supporting it, but they don't 
want restrictions lifted on timber cutting, those types of 
things. It's sometimes amazing that the Tribe is involved in 
timber cutting, grazing, agriculture, mining operations. And we 
are affected by Federal policies.
    One example is the Warm Springs Tribe which revenues 
dropped from $26 million annually to $4 million. Similar to the 
effects of county governments and timber receipts they receive 
from the Forest Service. One major issue is over the last 15 
years over half of the mills within this four-State region have 
closed. That's over 110 mills. Even within our county, Umatilla 
County, we've had two, both in Hepner and Pilot Rock that have 
drastically reduced, been drastically downsized or closed.
    Some of the key elements of the initiative is the Federal, 
State and tribal local teamwork. The support of the four 
Governors, the support of Affiliated Tribes of Northwest 
Indians, which encompasses 14 tribes. It's a group of 54 tribes 
in a four-State region.
    I think we've done a pretty good approach which will follow 
the Westside Adjustment Strategy. What that requires is 
significant financial support both from staffing as well as 
money. I believe the States and the tribes must be key and 
equal participants in that. I think there's still within 
project development within a regional coordinated body we need 
to develop that.
    Currently through economic development administration we've 
got an application in to them to fund a position that would 
help out local communities, tribes and county governments.
    Valuation and feedback. I think benchmarking is very 
important. The tribes are working hard to develop their own 
benchmarks. A lot of benchmarks that have been created are 
Federal or through the Bureau of Indian Affairs. Tribes are 
wanting to develop their own benchmarks and to have access to 
those similar to the census that's been done 2 years ago. 
Finally the information is coming out. We want that now so we 
can move forward from there. Information on employment, income, 
education, landownership are very important.
    A few things that the tribes and States can do to implement 
this strategy is to create a regional hub, provide assistance 
with economic development administration on their planning 
grants that will help projects come to fruition rather than 
decide we want to do a project to develop time lines and 
financing options, work with different agencies that we need 
to.
    Pretty much--I know my 5 minutes is getting pretty close, 
but I think our goal has been to obtain Federal fiscal year 
2003 moneys. I think the time is now. I hope we can move 
forward to make that happen. This concludes my testimony, Mr. 
Chairman, and thank you.
    Senator Wyden. Very good, Mr. Tovey, and thank you for all 
the work you do for the tribes. Mr. Jeffrey, welcome.

 STATEMENT OF MARK L. JEFFREY, SUPERINTENDENT, PAISLEY SCHOOL 
                DISTRICT NUMBER 11, PAISLEY, OR

    Mr. Jeffrey. I think I can stay within my 5 minutes if 
you'll allow me to read my comments as opposed to rambling on?
    Senator Wyden. Whatever works.
    Mr. Jeffrey. Thank you very much. My name is Mark Jeffrey. 
I am the superintendent/principal of Paisley School District 
Number 11. Our district serves the communities of Summer Lake 
and Paisley, Oregon. We have a combined population of about 350 
people. We are an isolated, rural community located about 3 
hours southeast of Bend, Oregon, and approximately 50 miles to 
the next nearest school district either north or south. We have 
an average enrollment of 100 students in kindergarten through 
twelfth grade. We run an international dormitory housing 18 
foreign exchange students and four American students. This 
arrangement allows us to support our enrollment and provides an 
opportunity for our students and community to gain exposure to 
a wider world view. We have a nationally ranked FFA program, a 
zero percent drop-out rate, and have been rated as an 
``Exceptional School'' by the State of Oregon for the last 2 
years.
    I wanted to speak today on the importance of our local 
Federal agency to our local school district and our 
communities. The Forest Service office in Paisley is vital to 
the health and survival of our community. The economic 
structure of our community is dependent on three major 
employers. The best analogy for this is to picture a three-
legged stool. These legs are the Forest Service, the school 
district and the ZX Ranch, which is a division of Simplot 
Corporation. Instability in any one of these legs will have a 
negative impact on the whole. Each leg is inseparably connected 
and necessary to the continued existence of the communities of 
Paisley and Summer Lake. While there will always be locally 
owned and operated ranches in the area, the quality of life 
would be diminished with the loss of any one of these three.
    The Forest Service brings much to the communities that make 
up our school district. They have partnered with other groups 
and individuals in numerous community service projects, most 
recently the purchase and installation of new playground 
equipment at the school. They bring people into our community 
with a range of skills, broader contacts, new and different 
perspectives and access to programs that would not be available 
without them. All of this expands the community capacity, 
enriching and improving the general quality of life.
    The essential and interconnected relationship between the 
Forest Service and our two communities is not unique. I'm 
certain that there are a multitude of other small towns and 
small school districts that share this vital relationship. Many 
of our predominantly rural counties share the benefits of these 
relationships. In Lake County, where our school district is 
located, Federal agencies are an essential part of the economic 
health of the cities of Lakeview, served by Lake County School 
District, and Silver Lake, served by the North Lake School 
District.
    The quality of life in any community is tied to its 
economic health. Federal agencies by their presence and their 
function play a key role in determining the quality of this 
economic health. Decisions on staffing, local hiring, timber 
cutting, access to public lands and a myriad of other decisions 
both big and small have a significant impact an our quality of 
life. We are fortunate that our local Forest Service office is 
staffed by personnel who understand their role and importance 
in the life of our communities. Our local ranger, Bill Aney, is 
an excellent example of this. His support of our school and our 
community and his active involvement serves as an example of 
how Federal agencies and our communities can work together.
    The obvious and vital connection Federal agencies have to 
the communities in which they are located make it essential to 
consider the economic needs and health of those communities in 
the decision making process at both the local and national 
level. It would be very easy for a single decision made without 
such consideration to have a significant enough impact to 
damage a school district or kill a small community. I would 
encourage your thoughtful consideration in any and all future 
decisions.
    The relatively stable nature of Federal funding, at least 
as compared to State funding, is now more important for our 
community than ever. Our district is in serious peril due to 
State funding shortfalls and negative financial adjustments 
related to long-term inadequate funding and the current 
condition of our State economy. With the recent failure of a 
legislative plan to cover some of the shortfall, Paisley School 
District faces the very real possibility of closure. We are 
left waiting the outcome of a special session and the 
importance of which for us could be life or death. The 
instability of the district leg increases the importance of a 
consistent Federal agency presence in our communities. The 
assurance that community needs will be considered in decisions 
relating to that agency are essential to assist in providing 
some form of stability in these uncertain times.
    I want to thank you for the opportunity to come. I feel I'm 
a bit of an anomaly in that I don't speak for a large group, 
but I do speak for a hundred wonderful children and about 350 
excellent citizens. Thank you very much.
    Senator Wyden. I'll just tell you on my watch, Mr. Jeffrey, 
you're only a small town but a big voice.
    Mr. Jeffrey. Thank you very much.
    Senator Wyden. Most of the towns in Oregon have under 5,000 
people. It's really striking. That's where our State is. So 
your voice is particularly important. I'm glad you're here.
    Mr. Jeffrey. I appreciate that.
    Senator Wyden. Just a few questions. John, first for you. 
As you can tell from the previous panel, I intend to stay very 
close in attempting to look at the activities in Region 6 with 
respect to forestry, because I think we've got to have some 
changes there so we can address these concerns we're hearing 
about in terms of economics and restoration work and the 
various issues that came up earlier.
    If you could wave your wand and just divine, you know, the 
changes you would want in Region 6 to be responsive to what 
folks are talking about in Union County, what would they be?
    Mr. Howard. I think it would be on the budget. I think I 
have a concern about the up years of 2 to the next 5 years in 
the budget for the Forest Service. In our Community Forestry 
Board, we're really ramping up some major projects, and about 
the time we get ramped up, I have a big fear we're going to 
have a downturn on the funding and we're going to be going down 
rather than continuing on the path of working together on these 
projects that we've been working together on. So I think that's 
a big one.
    The other one is having an advocate for stewardship for our 
forests. I really think that's the key for restoration work. 
Where, you know, you can get a contractor for 3 years, you can 
hire out the employment and do restoration work throughout the 
year. That's not seasonal employment; that's year-round 
employment. And I think that's where we need to be at.
    Senator Wyden. Tom, in terms of getting the money, Federal 
funds, Northwest Economic Assistance Funds, what would be your 
priorities if you get the dollars?
    Mr. Brumm. Well, I think the first priority and what was 
identified in the forums we had is that most of the communities 
in the four States are very small and they need more help in 
building capacity to really determine what they do want. That 
money could either go through the Economic Development 
Administration or through the States themselves.
    There's a huge need for infrastructure. That is very 
expensive and I don't know whether you could pull that off in 
one appropriation cycle. But I did note that the farm bill 
provided some new authorities for the U.S.D.A. rule, and there 
might be some way to focus some of those funds to our part of 
the country.
    The other areas are probably more general. Business 
development, working with the Forest Service and the BLM to 
help do community forestry type projects. There's certainly 
some good examples in this region, such as the project at the 
Blue Mountain Demo, the projects that Wallowa Resources is 
involved with. Those could and should be expanded throughout 
the region, but I don't think the Forest Service probably has 
enough funds to do those or BLM, and also frequently they don't 
also have the right leadership to focus on that community 
forestry.
    Also to just kind of jump in on John's answer on Region 6, 
I think one of the things you want in a regional forester is 
someone who's really committed to working with communities. 
That has not always been true of the regional forester. I think 
our current one is better than the two previous foresters in 
working with communities, but I think that's a very, very high 
priority because if they're not committed to working with 
communities, it really makes it difficult for these communities 
like Paisley to partner with the Forest Service.
    Senator Wyden. Mr. Tovey, in terms of the tribes' efforts 
to work with the Western States as we have tried to distribute 
the money, the Umatilla Tribe, I think, is recognized as one 
that has consistently good relations with all the surrounding 
governmental bodies. Are there additional ways for the tribes 
to participate with the Western States to ensure that the 
tribes get a fair shake in terms of distribution and that we 
practice good government and have some sound criteria for 
dealing with that.
    Mr. Tovey. Yes. I think the main one is working with the 
four States and being involved with them in the technical 
assistance and how the funding is distributed out to the local 
governments and to tribes. I believe continued support of 
Economic Development Administration and a lot of--the past 
administration was pushing a lot of that toward more glitzy 
urban type funding rather than the rural communities, and just 
deal with the regional base type funding.
    I think another area with the Affiliated Tribes, their 
Economic Development Corporation, currently they do a lot of 
technical assistance with tribes in energy development, towards 
telecommunications, and I think those are very important in 
rural communities both for tribal and non-tribal is getting 
hooked into the telecommunications and energy as well as bio, 
which we have been working on as well.
    Senator Wyden. Yes. Mr. Jeffrey, on the secure rural 
schools and money, first, so that people understand the math on 
this, Oregon is going to get $260 million or thereabouts each 
year over the next six. What's in question is the $30 million 
or thereabouts that's supposed to go to rural schools and 
because of our school fund it goes into kind of a pot. And I'm 
curious whether you're having any discussions, the school 
districts among themselves, the rural school districts, about 
how this might be dealt with come January with the new Governor 
and new legislature? And I want to make sure that money goes 
where it's intended to go.
    Mr. Jeffrey. Well, we wish it would have too. The impact of 
your dollars on our district would have been much greater. We 
estimated that even in our little district we would have 
received about $86,000, which in times like these would have 
been--could be life saving. As it was the way it was 
redistributed through the equalization formula, we received 
about $23 per ABMW or per weighted student numbers. A 
significant loss to our district.
    So the districts who have never cut a tree or seen their 
forest receipts restrained are receiving the benefit of that 
money. It's a great frustration. As far as what to do, I don't 
think that at least as far as I'm involved there's been much 
discussion on a solution. One of the common things we hear is 
that that was a battle that was fought and lost. I'd like to 
see it fought again and come out to our benefit.
    I think one of the things that was most frustrating is that 
those districts who argued against it going to where it was 
intended was one of equity, and yet what they failed to discuss 
was that they had access to donations through patrons that 
aren't equalized: Intel, Hewlett Packard, the city of Portland, 
places like that. There was a Portland elementary, I think, 
that just this year received $600,000 in donations.
    Schools like Paisley have no patrons that we can rely on to 
that extent. We have started a fund-raising effort in our 
community looking at attempting to raise $100,000 just to keep 
our building, our school, open. To date we've raised about 
$20,000, but that's being done through our contacts, through 
our alumni and our community members, who again have seen their 
income earning ability decreased over these years. So anything 
you can do on our behalf.
    The Wyden money is spoken of fondly in our districts, at 
least in its attempt, not necessarily the outcome, because it 
would have made a great deal of difference. If our State 
legislature doesn't act on our behalf, at least on behalf of 
small districts, I estimate in the next 3 years we will see 
significant district closures in schools with under 300 
students, because they're no longer economically viable and 
most of them are located in communities that are suffering due 
to significant downturns. And it'll be a very different 
landscape if it continues.
    Senator Wyden. I want people to know that 90 percent of 
this money is going where it was intended to go, which is to 
rural communities. And what is at issue is the education side, 
which has been so critical. The metropolitan area is huge of 
course to yours and others. You go back and tell that fellow 
who said the battle was fought and you lost, he hasn't bumped 
up against me.
    Mr. Jeffrey. Thank you. I appreciate that.
    Senator Wyden. I'm going to stay at this until we get that 
money where it was intended to go. I take a back seat to nobody 
in terms of fighting for education in metropolitan areas. I did 
that as a House member and I'm doing that in conjunction with 
Senator Smith now serving Oregon in the Senate. This money was 
intended to go to the rural communities period. That's what the 
legislation is about. It says supplement, not serve as 
substitution for existing funds. It's to supplement them.
    So anybody who thinks this battle is over and operating 
under that premise ought to be ready for the next round.
    Mr. Jeffrey. Thank you very much.
    Senator Wyden. Well, I thank you all. We've been at it, I 
guess, close to 4 hours at this point. This has been a very, 
very good three important subjects on Steens, on forest health 
and economic issues. To all of you who have been so patient in 
the audience, we'll hold the record open for additional 
submissions for 1 week so that those who would like to add 
their views and were unable to participate today will have a 
chance to add their views to the subcommittee, the Energy and 
Natural Resources Committee. And with that the subcommittee is 
adjourned.
    [Whereupon, at 2:38 p.m., the hearing was adjourned.]

                                    

      
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