```

[Senate Hearing 109-629]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-629
 
                GAO REPORT ON WILDLAND FIRE SUPPRESSION

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

                                HEARING

                               before the

                SUBCOMMITTEE ON PUBLIC LANDS AND FORESTS

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   to

REVIEW THE GOVERNMENT ACCOUNTABILITY OFFICE REPORT ENTITLED ``WILDLAND 
  FIRE SUPPRESSION--LACK OF CLEAR GUIDANCE RAISES CONCERNS ABOUT COST 
           SHARING BETWEEN FEDERAL AND NONFEDERAL ENTITIES''

                               __________

                             JUNE 21, 2006

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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
30-471                      WASHINGTON : 2006
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800  
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD BURR, North Carolina         TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               KEN SALAZAR, Colorado
GORDON SMITH, Oregon                 ROBERT MENENDEZ, New Jersey
JIM BUNNING, Kentucky
                     Bruce M. Evans, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                Subcommittee on Public Lands and Forests

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

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

                Frank Gladics, Professional Staff Member
                    Scott Miller, Democratic Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Craig, Hon. Larry E., U.S. Senator from Idaho....................     1
Heissenbuttel, Anne, Executive Director, National Association of 
  State Foresters................................................    18
Rey, Mark, Under Secretary for Natural Resources and Environment, 
  Department of Agriculture......................................    14
Robinson, Robert A., Managing Director for Natural Resources and 
  the Environment, U.S. Government Accountability Office.........     3
Rowdabaugh, Krik, State Forester of Arizona, on behalf of the 
  National Association of State Foresters........................    20
Salazar, Hon. Ken, U.S. Senator from Colorado....................    26
Scarlett, Lynn, Deputy Secretary, Department of the Interior.....    15
Wyden, Hon. Ron, U.S. Senator from Oregon........................     2

                                APPENDIX

Responses to additional questions................................    37

                GAO REPORT ON WILDLAND FIRE SUPPRESSION

                              ----------                              

                        WEDNESDAY, JUNE 21, 2006

                               U.S. Senate,
          Subcommittee on Public Lands and Forests,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:32 p.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Larry E. 
Craig presiding.

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

    Senator Craig. Good afternoon, everyone, and welcome to the 
Public Lands and Forests Subcommittee hearing to learn more 
about fire suppression cost-sharing agreements between the 
Federal land firefighting agencies and State and local 
governments. I requested the Government Accountability Office 
to examine these fire suppression cost agreements and I am 
pleased that they are here today to testify.
    We will begin with Bob Robinson, the Managing Director of 
GAO's Natural Resource and the Environment Group, followed by 
Under Secretary for the U.S. Forest Service, Department of 
Agriculture, Mark Rey; and then Lynn Scarlett, the Deputy 
Secretary for the Department of the Interior. We will finish 
with Anne Heissenbuttel----
    Ms. Heissenbuttel. HAI-senn-BUTT-tle.
    Senator Craig. HAI-senn-BUTT-tle, got it, thank you. 
Executive director for the National Association of State 
Foresters.
    I would observe that any time people are left with an 
impression that fees are changing and that could result in how 
much they will have to pay, blood pressures rise. I think here 
is some common ground that we all agree on before the 
psychological response manifests itself in our witnesses today. 
First, there is no doubt that the cost of aviation is 
increasing and will continue to increase. To the extent that 
firefighters are forced to utilize those assets for fighting 
wildland-urban fires, the more the fires are going to cost.
    Second, there is no doubt that more people are moving out 
into the wildland-urban interface, which complicates 
firefighting and increases the cost of these fires. It also 
suggests more work is needed to help these homeowners 
understand that they have some responsibility to maintain a 
fire-safe community.
    Third, I think we can all agree that the local communities 
and States have the primary responsibility to fight structure 
fires and to provide fire protection in the private land 
portion of the wildland-urban interface. But the management 
that does or does not occur on adjacent Federal lands can 
complicate the ability of the State and local governments to 
accomplish the work needed to provide the fire protection the 
public expects.
    Finally, I think we can all agree the problem is not going 
away soon and costs will continue to increase.
    I believe that GAO's report does a very good job in helping 
us understand the issues, concerns, and positions of the 
Federal land managers as well as the concerns and frustrations 
of the State and local managers. Rather than continue to argue 
those positions, I would hope that today you will help me and 
my colleague, our ranking member understand, if there are steps 
this committee and Congress can take to reduce the cost of 
fighting these fires in the wildland-urban interface.
    Also, help me to better understand how to ensure that 
States and local governments receive similar treatment from 
fire to fire and State to State in these cost-sharing formulas.
    I will close by reminding you that this is a period of very 
tight budgets. We all know that. So please resist your urge to 
suggest more funding as an answer. Please limit your oral 
testimony to 5 minutes if you can. I have given GAO a bit more 
time so they can get out the full response to the request we 
made. Of course, the testimony can be received in additional 
forms for 10 working days of the hearing.
    Now let me turn to the ranking member of our subcommittee, 
Senator Ron Wyden of Oregon. Ron and I work closely and in a 
bipartisan way on most all of these critical public land 
natural resource issues. I am proud to have him as a partner in 
this, and I must tell Ron, when I look at the numbers today--
and I did yesterday and again today--I am astounded that we are 
already past the 3 million acre mark in this fire season, and 
it will not get better. It will simply get worse as the 
character of our Western lands begins to dry out. Fire costs 
are going up and budgets are tight.
    My colleague, Ron Wyden.

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

    Senator Wyden. Well, thank you, Mr. Chairman. As is 
invariably the case, I very much share your view on these kind 
of key points and would just make a couple of comments in 
addition.
    I think what concerns us particularly is we are seeing such 
a serious problem this summer and how this fits into a pattern. 
We have seen this year after year, and somehow it just appears 
that the administration is perpetually behind the curve on 
these firefighting issues. Senator Craig and I always try to 
work in a bipartisan way. I would like to do that with the 
administration, and here are a couple ones to start with. I 
mean, the State of Oregon, which has experienced serious 
problems, is still waiting to be paid for last summer's Blossom 
fire. So you talk about the growing problem as Senator Craig 
has just pointed out. We are still trying to get the bills paid 
from last year, and this is at a time when our State is having 
to resort, as I think a variety of others, to loan 
arrangements, working with insurance funds, that sort of thing.
    On the cost-sharing issue--and I am not going to be able to 
stay. We are all juggling a lot of issues this afternoon, Mr. 
Chairman. I am going to try and stay for a little bit. I am 
really pleased that you have scheduled this hearing on cost-
sharing because we need to work something out with the States. 
My State in particular wants some flexibility, and I think the 
chairman has made that point, that fires are different.
    But what is unfortunate is the last statement that is made 
from the joint panel of our officials, and that is: It is our 
intent to finalize this guidance before the beginning of the 
next fire season. So here we are, Chairman Craig, to his 
credit, has scheduled this hearing. We want to work on a 
bipartisan basis. We could have had some leadership from the 
Executive Branch so we would have had this in place for this 
fire season.
    Now we are talking about having a timely hearing so as to 
get at it for the next fire season. I read these comments, 
templates are being reviewed. I am not even sure what a 
``template'' is, but it is certainly mentioned a whole lot in 
Washington, D.C., so I guess that is an encouraging sign, that 
something is being developed that is called a template.
    But I know in my State what they want are some actual 
strategies for dealing with a huge problem, a problem that is 
growing, costs that are spiraling out of control. It seems to 
me we should have had this some time ago, and to hear that it 
is going to be finalized before the next fire season sort of 
reminds me of the marquee at the old movie house, where the 
marquee always says ``Coming Soon'' and then the movie never 
quite gets to you. Somebody just puts it off and puts it off 
and puts it off.
    So, Mr. Chairman, as usual I am looking forward to working 
with you. I think this is an important hearing, and I know you 
and I will work in a bipartisan way and we want to make the 
administration partners in the effort.
    Senator Craig. Ron, thank you very much.
    I think all of us, including this administration and our 
agencies, are frustrated in clear recognition of a problem at 
hand out there. One of those difficulties are those 
relationships between multiple authorities and when these 
authorities overlap how we work out the differences. That is 
why we wanted GAO to look at it. So we are extremely pleased 
that Robert Robinson is here, Managing Director, Natural 
Resources and the Environment, for GAO, and his report is 
before us.
    So Bob, if we will get you to summarize that and make your 
salient points before we move on to our other testifiers. Thank 
you.

STATEMENT OF ROBERT A. ROBINSON, MANAGING DIRECTOR FOR NATURAL 
 RESOURCES AND THE ENVIRONMENT, U.S. GOVERNMENT ACCOUNTABILITY 
                             OFFICE

    Mr. Robinson. Thank you very much, Mr. Chairman.
    Senator Craig. I think you need to push the button on the 
base.
    Mr. Robinson. Thank you.
    Senator Craig. There you go.
    Mr. Robinson. Mr. Chairman, we are grateful for this 
opportunity to discuss our recent report on wildland fire 
suppression cost-sharing and hope that today's hearing, like 
you, will be a constructive dialogue aimed at developing 
solutions to an issue of growing importance. Based on our 
report and the generally favorable reaction to it, it seems 
like there is a solid base of common ground to build on, while 
also recognizing that there is principled disagreement among 
affected parties on the specific pathways going forward.
    With that as a backdrop, let me quickly highlight several 
major observations from our report that we hope can set the 
scene for the discussions that follow. First, as you note, the 
bill for fighting wildland fires is substantial and getting 
bigger over time as accumulation of fuels, compounded by 
persistent drought, results in larger, more catastrophic fires 
and the complexities and costs associated with fighting fires 
in the expanding wildland-urban interface increasingly enter 
the mix.
    To this end, Federal costs of fighting wildland fires 
between 2000 and 2004 more than doubled from the previous 5-
year period to more than $1.3 billion annually. As the 
firefighting bill increases, the importance of and the concerns 
about arriving at a consistent and equitable approach for 
sharing costs among the affected entities grow as well.
    In this regard, however, we found that Federal and non-
Federal entities often lacked clear guidance for sharing costs, 
making planning and budgeting more difficult, and often ending 
up with cost-sharing methods being applied inconsistently, even 
for fires with similar characteristics.
    On the ground, there is uncertainty and confusion about how 
costs should be shared. Inconsistency is not just bothersome to 
the accountant's craving for financial order; it has real 
practical consequences. With inconsistency comes inequity as 
some States and localities are more successful at negotiating 
their respective firefighting bills than others. To this end, 
we are concerned about a ``race to the bottom'' as word gets 
out among those States getting a great cost-sharing deal, in 
turn leading other States to seek as good or better deal for 
themselves, with the end result being an increased and 
inequitable burden being borne by the Federal agencies.
    A number of Federal managers we spoke with already feel 
that they have a relatively weak bargaining position as it is 
and sense that their ability to negotiate fair and equitable 
cost-sharing deals will only get harder in the future.
    We are also concerned that without equitable cost-sharing 
the incentive to take often politically difficult actions aimed 
at lessening fire risks to structures in the wildland-urban 
interface, such as requiring flammable vegetation to be cleared 
around homes or requiring fire-resistant building materials, 
will be lessened as well.
    Finally, without equitable cost-sharing, there is an 
increased likelihood that firefighting resources will be used 
indiscriminately.
    As one quick sidebar on this issue, I do want to point out 
that a Federal agency outside the usual array of land 
management agencies is playing a significant role in this cost-
sharing equation. FEMA has spent about $250 million in recent 
years reimbursing States and localities for allowable 
firefighting expenses incurred during major disasters. As 
Federal-State cost-sharing arrangements are negotiated, it is 
important to keep in mind that a not insignificant portion of 
the non-Federal share is actually often being picked up out of 
the Federal budget, albeit by a different agency.
    Based on our work, the root of the inconsistency and the 
inequity we identified is the absence of a clearly defined, 
commonly accepted understanding of the basic financial 
responsibilities of all the entities involved with wildland 
firefighting, particularly those protecting the wildland-urban 
interface. Accordingly, in our report, we recommended that 
Federal land management agencies work in conjunction with--and 
I emphasize, in conjunction with--relevant State agencies to 
develop more specific guidance as to when particular cost-
sharing methods should be used and to clarify the financial 
responsibilities for fires burning across multiple 
jurisdictions.
    In responding to our report, the responsible Federal 
agencies generally supported such an effort, while of course 
recognizing the difficulty of the task and understanding that 
the devil is truly in the details. While I believe we developed 
a mutually respectful working relationship with the State 
foresters in conducting our review, and I am sure we share a 
mutual desire to achieve fair and equitable cost-sharing, they 
expressed a different take on the path forward. At the end of 
the day, we believe that a generally accepted and more clearly 
understood cost-sharing framework, worked out in advance of the 
inherent tensions of the fire season itself, has the potential 
to benefit all sides by: one, enabling better fire suppression 
planning and budgeting; two, facilitating more cost-effective 
approaches to responding to individual fires; three, 
encouraging proactive steps to mitigate fire risks to 
structures in the wildland-urban interface; and four, ensuring 
more consistent and equitable sharing of agreed-upon expenses.
    I hope today's discussions contribute to this result as we 
continue our work on fire suppression cost issues for you, Mr. 
Chairman. We of course stand ready to provide any appropriate 
assistance. Thank you very much.
    [The prepared statement of Mr. Robinson follows:]

 Prepared Statement of Robert A. Robinson, Managing Director, Natural 
      Resources and Environment, Government Accountability Office

                       WILDLAND FIRE SUPPRESSION

Better Guidance Needed to Clarify Sharing of Costs Between Federal and 
                          Nonfederal Entities

                         WHY GAO DID THIS STUDY

    Wildland firs can burn or threaten both federal and nonfederal 
lands and resources, including homes in or near wildlands, an area 
commonly called the wildland-urban interface. Agreements between 
federal and nonfederal firefighting entities provide the framework for 
working together and sharing the costs of fire suppression efforts. GAO 
was asked to (1) review how federal and nonfederal entities share the 
costs of suppressing fires that burn or threaten both of their lands 
and resources and (2) identify any concerns that these entities may 
have with the existing cost-sharing framework. This testimony is based 
on GAO's May 2006 report Wildland Fire Suppression: Lack of Clear 
Guidance Raises Concerns about Cost Sharing between Federal and 
Nonfederal Entities (GAO-06-570).

                          WHAT GAO RECOMMENDS

    In its report, GAO recommended that the Secretaries of Agriculture 
and the Interior, working with relevant state entities, provide more 
specific guidance on when to use particular cost-sharing methods and 
clarify the financial responsibilities for fires that burn or threaten 
to burn across multiple jurisdictions. The Forest Service and Interior 
generally agreed with the recommendations but the National Association 
of State Foresters disagreed, stating that the recommendations would 
not provide the flexibility needed to address the variability in local 
circumstances and state laws.

                             WHAT GAO FOUND

    Federal and nonfederal entities used a variety of methods to share 
the costs of fighting wildland fires affecting both of their lands and 
resources. Cooperative agreements between federal and nonfederal 
firefighting entities--which are developed and agreed to by the 
entities involved--provide the framework for cost sharing and typically 
list several cost-sharing methods available to the entities. The 
agreements GAO reviewed, however, often lacked clear guidance for 
federal and nonfederal officials to use in deciding which method to 
apply to a specific fire. As a result, cost-sharing methods were 
applied inconsistently within and among states, even for fires with 
similar characteristics. For example, GAO found that in one state, the 
costs for suppressing a large fire that threatened homes were shared 
solely according to the proportion of acres burned within each entity's 
area of fire protection responsibility, a method that traditionally has 
been used. Yet, costs for a similar fire within the same state were 
shared differently. For this fire, the state agreed to pay for certain 
aircraft and fire engines used to protect the wildland-urban interface, 
while the remaining costs were shared on the basis of acres burned. In 
contrast to the two methods used in this state, officials in another 
state used yet a different cost-sharing method for two similar large 
fires that threatened homes, apportioning costs each day for personnel, 
aircraft, anal equipment deployed on particular lands, such as the 
wildland-urban interface. The type of cost-sharing method ultimately 
used is important because it can have significant financial 
consequences for the entities involved, potentially amounting to 
millions of dollars.
    Both federal and nonfederal agency officials raised a number of 
concerns about the current cost-sharing framework. First, some federal 
officials were concerned that because guidance is unclear about which 
cost-sharing methods are most appropriate in particular circumstances, 
it can be difficult to reach agreement with nonfederal officials on a 
method that all parties believe distributes suppression costs 
equitably. Second, some nonfederal officials expressed concerns that 
the emergence of alternative cost-sharing methods is causing nonfederal 
entities to bear a greater share of fire suppression costs than in the 
past. In addition, both federal and nonfederal officials believed that 
the inconsistent application of these cost-sharing methods has led to 
inequities among states in the proportion of costs borne by federal and 
nonfederal entities. Finally, some federal officials also expressed 
concern that the current framework for sharing costs insulates state 
and local governments from the increasing costs of protecting the 
wildland-urban interface. Therefore, nonfederal entities may have a 
reduced incentive to take steps that could help mitigate fire risks, 
such as requiring homeowners to use fire-resistant materials and 
landscaping. On the basis of a review of previous federal reports and 
interviews with federal and nonfederal officials, GAO believes that 
these concerns may reflect a more fundamental issue--that federal and 
nonfederal entities have not clearly defined their basic financial 
responsibilities for wildland fire suppression, particularly those for 
protecting the wildland-urban interface.

    Mr. Chairman and Members of the Subcommittee:
    I am pleased to be here today to discuss how federal and nonfederal 
entities share the costs of suppressing wildland fires that burn or 
threaten both federal and nonfederal lands and resources. As you know, 
fighting wildland fires--which can burn across federal, state, and 
local jurisdictions--requires significant investments of firefighting 
personnel, aircraft, equipment, and supplies, resulting in substantial 
and increasing fire suppression expenditures. Since 2000, federal 
suppression expenditures alone have averaged more than $1 billion 
annually. Firefighting efforts are mobilized through an interagency 
incident management system, which depends on the close cooperation and 
coordination of federal, state, tribal, and local fire protection 
entities. At the federal level, five principal agencies are involved in 
firefighting efforts--the Forest Service within the Department of 
Agriculture and the Bureau of Indian Affairs, Bureau of Land 
Management, Fish and Wildlife Service, and National Park Service within 
the Department of the Interior. Federal and nonfederal firefighting 
entities share their personnel, equipment, and supplies and work 
together to fight fires, regardless of which entity has jurisdiction 
over the burning lands. Agreements between cooperating entities, 
commonly referred to as master agreements, govern these cooperative 
fire protection efforts and include general provisions for sharing 
firefighting costs.
    My testimony today summarizes the findings of our report \1\ 
released on June 13, 2006, which discusses (1) how federal and 
nonfederal entities share the costs of suppressing wildland fires that 
burn or threaten both of their lands and resources and (2) concerns 
federal and nonfederal entities have with the existing cost-sharing 
framework. To address these objectives, we reviewed applicable federal 
statutes, policies, and procedures; and federal and nonfederal studies 
related to wildland fire suppression costs. We reviewed master 
agreements between federal and nonfederal entities governing 
cooperative fire protection in 12 western states that frequently 
experience wildland fires.\2\ We also reviewed fire records and 
interviewed federal and nonfederal firefighting officials to discuss 
methods chosen to share suppression costs for eight recent fires--two 
each in Arizona, California, Colorado, and Utah--which burned or 
threatened both federal and nonfederal lands and resources.\3\
---------------------------------------------------------------------------
    \1\ GAO, Wildland Fire Suppression: Lack of Clear Guidance Raises 
Concerns about Cost Sharing between Federal and Nonfederal Entities, 
GAO-06-570 (Washington, D.C.: May 30, 2006).
    \2\ The 12 states selected were Alaska, Arizona, California, 
Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, 
and Wyoming. Although wildland fires can affect all states, we selected 
these western states because they have substantial federal lands and 
often experience wildland fires.
    \3\ The 12 master agreements reviewed, 4 states visited, and two 
wildland fires reviewed within each visited state are all 
nonprobability samples. Therefore, the results from these samples 
cannot be used to make inferences about all master agreements, states, 
or wildland fires.
---------------------------------------------------------------------------
                                SUMMARY

    Federal and nonfederal entities used a variety of methods to share 
the costs of fighting wildland fires affecting both of their lands and 
resources, but they applied these varied methods inconsistently to 
fires with similar characteristics. Master agreements between 
firefighting entities provide the framework for cost sharing and, 
typically, list several cost-sharing methods available to the entities. 
The agreements we reviewed, however, often lacked clear guidance for 
federal and nonfederal officials to use in deciding which method to 
apply to a specific fire. As a result, cost-sharing methods were 
applied inconsistently within and among states, even for fires with 
similar characteristics. For example

   In one state, the costs for suppressing a large fire that 
        threatened homes were shared solely according to the proportion 
        of acres burned within each entity's area of fire protection 
        responsibility.
   In the same state, costs for a similar fire were shared 
        differently the state paid for certain aircraft and fire 
        engines used to protect homes, while the remaining costs were 
        shared on the basis of acres burned.
   In another state, officials used yet a different cost-
        sharing method for two similar large fires that threatened 
        homes, apportioning costs each day for personnel, aircraft, and 
        equipment deployed on particular lands, such as the wildland-
        urban interface, an area where homes and other structures are 
        located in or near wildlands.

    The type of cost-sharing method ultimately used is important 
because it can have significant financial consequences for the entities 
involved, potentially amounting to millions of dollars.
    Federal and nonfederal agency officials we interviewed raised a 
number of concerns about the current cost-sharing framework.

   First, some federal officials said that because master 
        agreements and other policies do not provide clear guidance 
        about which cost-sharing methods to use, it has sometimes been 
        difficult to obtain a cost-sharing agreement that they believe 
        shares suppression costs equitably.
   Second, nonfederal officials were concerned that the 
        emergence of alternative cost-sharing methods has caused 
        nonfederal entities to bear a greater share of fire suppression 
        costs than in the past. In addition, these officials, as well 
        as some federal officials, were concerned that the federal 
        government was treating nonfederal entities in different states 
        differently, thereby creating inequities.
   Finally, some federal officials expressed concern that the 
        current framework for sharing costs insulates state and local 
        governments from the cost of protecting the wildland-urban 
        interface, thereby reducing their incentive to take steps that 
        could help mitigate fire risks and reduce suppression costs in 
        the wildland-urban interface.

    On the basis of our review of previous federal reports and 
interviews with federal and nonfederal officials, we believe these 
concerns may reflect a more fundamental issue--that federal and 
nonfederal entities have not clearly defined their financial 
responsibilities for wildland fire suppression, particularly for the 
wildland-urban interface.

                               BACKGROUND

    Although wildland fires triggered by lightning are a natural, 
inevitable, and in many cases a necessary ecological process, past 
federal fire suppression policies have led to an accumulation of fuels 
and contributed to larger and more severe wildland fires. In recent 
years, both the number of acres burned by wildland fires and the costs 
to suppress fires have been increasing. From 1995 through 1999, 
wildland fires burned an average of 4.1 million acres each year; from 
2000 through 2004, the fires burned an average of 6.1 million acres 
each year--an increase of almost 50 percent. During the same periods, 
the costs incurred by federal firefighting entities to suppress 
wildland fires more than doubled, from an average of $500 million 
annually to about $1.3 billion annually.\4\ Although efforts to fight 
these larger, more severe fires have accounted for much of the increase 
in suppression costs, the continuing development of homes and 
communities in areas at risk from wildland fires and the efforts to 
protect these structures also contribute to the increasing costs. 
Forest Service and university researchers estimate that about 44 
million homes in the lower 48 states are located in the wildland-urban 
interface. When fire threatens the wildland-urban interface, 
firefighting entities often need to use substantial resources--
including firefighters, fire engines, and aircraft to drop retardant to 
fight the fire and protect homes.
---------------------------------------------------------------------------
    \4\ These dollars have been adjusted for inflation using the gross 
domestic product price index, with fiscal year 2005 as the base year.
---------------------------------------------------------------------------
    As wildland fire suppression costs have continued to rise, 
increasing attention has focused on how suppression costs for 
multijurisdictional fires are shared. To share suppression costs for a 
specific fire, local representatives of federal and nonfederal 
firefighting entities responsible for protecting lands and resources 
affected by the fire--guided by the terms of the master agreement--
decide which costs will be shared and for what period. They document 
their decisions in a cost-sharing agreement for that fire. According to 
federal officials, cooperating entities traditionally shared 
suppression costs on the basis of the proportion of acres burned in 
each entity's protection area because the method was relatively easy to 
apply and works well when the lands affected by a wildland fire are 
similar. Officials said that the use of alternative cost-sharing 
methods has been increasing in recent years.

 UNCLEAR GUIDANCE AND INCONSISTENT APPLICATION OF COST-SHARING METHODS 
   CAN HAVE SIGNIFICANT FINANCIAL CONSEQUENCES FOR ENTITLES INVOLVED

    Federal and nonfederal entities included in our review used a 
variety of methods to share the costs of fighting fires that burned or 
threatened both federal and nonfederal lands and resources. Although 
master agreements between federal and nonfederal entities typically 
listed several cost-sharing methods, the agreements often lacked clear 
guidance for officials to follow in deciding which cost-sharing method 
to apply to a specific fire. Consequently, for eight fires we reviewed 
in four states, we found varied cost-sharing methods used and an 
inconsistent application of these methods within and among states, 
although the fires had similar characteristics. The type of cost-
sharing method chosen is important because it can have significant 
financial consequences for the federal and nonfederal entities 
involved.

Master agreements provided cost-sharing framework, but those we 
        reviewed lacked clear guidance
    Master agreements provide the framework for federal and nonfederal 
entities to work together and share the costs of fighting wildland 
fires. The master agreements we reviewed for 12 western states all 
directed federal and nonfederal entities to develop a separate 
agreement, documenting how costs were to be shared for each fire that 
burned--or, in some cases, threatened to burn--across multiple 
jurisdictions. The master agreements varied in the cost-sharing methods 
specified:

   The master agreement for 1 state (Idaho) did not identify 
        any specific cost-sharing method to use.
   The master agreements for 3 states (Alaska, Arizona, New 
        Mexico) listed the acres-burned method as the primary or only 
        method to be used. Although two of these agreements allowed the 
        use of alternative cost-sharing methods, they did not 
        explicitly state under what circumstances an alternative method 
        would be appropriate.
   The master agreements for 8 remaining states listed 
        multiple, alternative cost-sharing methods but did not provide 
        clear guidance on when each method should be used.

Cost-sharing methods were inconsistently applied for the eight fires we 
        reviewed
    Federal and nonfederal entities used varied cost-sharing methods 
for the eight fires we reviewed, although the fires had similar 
characteristics. As shown in figure 1,* the cost-sharing methods used 
sometimes varied within a state or from state to state.
---------------------------------------------------------------------------
    * Figure 1 has been retained in subcommittee files.
---------------------------------------------------------------------------
    The costs for the two fires that we reviewed in Utah were shared 
using two different methods, although both fires had similar 
characteristics.

   For the Blue Springs Fire, federal and nonfederal officials 
        agreed that aircraft and engine costs of protecting an area in 
        the wildland-urban interface during a 2-day period would be 
        assigned to the state and the remaining costs would be shared 
        on the basis of acres burned. Federal and state officials 
        explained that, because the Blue Springs Fire qualified for 
        assistance from the Federal Emergency Management Agency (FEMA), 
        state officials agreed to bear a larger portion of the total 
        fire suppression costs.\5\
---------------------------------------------------------------------------
    \5\ Under its Fire Management Assistance Grant Program, FEMA 
provides financial assistance to nonfederal entities for the 
mitigation, management, and control of any fire on public or private 
forest land or grassland that would constitute a major disaster. Under 
this program, nonfederal entities can be reimbursed for 75 percent of 
the allowable fire suppression costs. FEMA evaluates the threat posed 
by a fire or fire complex according to the following criteria (1) 
threat to lives and improved property, including threats to critical 
facilities/infrastructure, and critical watershed areas; (2) 
availability of state and local firefighting resources; (3) high fire 
danger conditions, as indicated by nationally accepted indexes such as 
the national fire danger ratings system; and (4) potential major 
economic impact.
---------------------------------------------------------------------------
   For the Sunrise Complex of fires, in contrast, state 
        officials were reluctant to share costs in the same manner. 
        Although these fires also threatened the wildland-urban 
        interface, they did not meet the eligibility requirements for 
        FEMA reimbursement of nonfederal costs. Consequently, federal 
        and nonfederal officials agreed to share costs for the Sunrise 
        Complex on the basis of acres burned.

    The costs for the two fires we reviewed in Arizona were also 
treated differently from each other.

   For the Cave Creek Complex of fires, federal and state 
        officials agreed to share suppression costs using an acres-
        burned method for the southern portion of the complex, which 
        encompassed federal, state, and city lands and required 
        substantial efforts to protect the wildland-urban interface. 
        The federal government paid the full costs for the northern 
        portion of the fire.
   For the Florida Fire, federal and nonfederal officials were 
        unable to reach an agreement on how to share costs. Officials 
        from the affected national forest proposed a cost-sharing 
        agreement, whereby the state would pay the costs of 
        firefighting personnel, equipment, and aircraft used to protect 
        the wildland-urban interface, and all other fire suppression 
        costs would be paid by the federal government. The state 
        official, however, did not agree with this proposal. He 
        believed that the Forest Service, not the state, was 
        responsible for protecting areas of the wildland-urban 
        interface threatened by the Florida Fire and that he was not 
        authorized to agree to the terms of the proposed agreement.\6\
---------------------------------------------------------------------------
    \6\ Specifically, the state official said that under Arizona law, 
the state had no responsibility to protect the private lands and 
resources in the wildland-urban interface threatened by the Florida 
Fire because the fire did not threaten state lands, and the private 
properties that the fire threatened were not covered by cooperative 
fire agreements with the state.

    Methods used to share suppression costs for fires with similar 
characteristics also varied among states. For example, costs for the 
fires we reviewed in California and Colorado were shared using methods 
different from those used for similar fires we reviewed in Arizona and 
---------------------------------------------------------------------------
Utah.

   In California, federal and nonfederal officials agreed to 
        share the costs of two fires using the cost-apportionment 
        method--that is, costs were apportioned on the basis of where 
        firefighting personnel and equipment were deployed. Officials 
        said that they had often used this method since the mid-1980s 
        because they believed that the benefit it provides in more 
        equitable cost sharing among affected firefighting entities 
        outweighs the additional time required to apportion the costs.
   In Colorado, federal and nonfederal officials agreed to 
        share suppression costs for both of the fires we reviewed in 
        that state using guidance they had developed and officially 
        adopted in 2005, called ``fire cost share principles.'' Under 
        these principles, aviation costs for fires burning in the 
        wildland-urban interface are shared equally for 72 hours, and 
        other fire suppression costs, such as firefighting personnel 
        and equipment, are shared on the basis of acres burned.

The cost-sharing method used can lead to significantly different 
        financial outcomes
    Having clear guidance as to when particular cost-sharing methods 
should be used is important because the type of method ultimately 
agreed upon for any particular fire can have significant financial 
consequences for the firefighting entities involved. To illustrate the 
effect of the method chosen, we compared the distribution of federal 
and nonfederal costs for the five fires we reviewed in which the actual 
cost-sharing method used was not acres burned with what the 
distribution would have been if the method used had been acres burned. 
We found that the distribution of costs between federal and nonfederal 
entities differed, sometimes substantially, depending on the cost-
sharing method used. The largest differences occurred in California, 
which used the cost apportionment method.

   For the Deep Fire, using the cost-apportionment method, 
        federal entities paid $6.2 million, and nonfederal entities 
        paid $2.2 million. Had the costs been shared on the basis of 
        acres burned, federal entities would have paid an additional 
        $1.7 million, and nonfederal entities would have paid that much 
        less because most of the acres burned were on federal land. 
        According to federal and state officials, the nonfederal 
        entities bore a larger share of the cost than they would have 
        under an acres-burned method because of the efforts to protect 
        nonfederal lands and resources.
   For the Pine Fire, using cost apportionment, federal 
        entities paid $5.2 million, and nonfederal entities paid $8.1 
        million. Had an acres-burned method been used, federal entities 
        would have paid about $2 million less, and nonfederal entities 
        would have paid that much more. According to a federal official 
        who worked on apportioning costs for that fire, the higher 
        costs that the federal entities paid under cost apportionment 
        were largely due to extensive firefighting efforts on federal 
        land to ensure that the fire was extinguished.

    In Colorado and Utah, the differences in federal and state 
entities' shares between the methods used and the acres-burned method 
were less pronounced, likely because the cost-sharing methods used 
still relied heavily on acres burned. In each case, federal entities' 
shares would have been more and nonfederal shares less had an acres-
burned method been used, due to the efforts to protect the wildland-
urban interface. For example, the federal share of costs for the Blue 
Springs Fire in Utah would have been about $400,000 more and the 
nonfederal share that much less if an acres-burned method had been used 
for the whole fire. In Colorado, we estimated that the federal share of 
costs for the Mason Gulch Fire would have been about $200,000 more and 
the nonfederal share that much less under an acres-burned method.

         CURRENT COST-SHARING FRAMEWORK RAISES SEVERAL CONCERNS

    Federal and nonfederal agency officials we interviewed raised a 
number of concerns about the current cost-sharing framework. First, 
some federal officials said that because master agreements and other 
policies do not provide clear guidance about which cost-sharing methods 
to use, it has sometimes been difficult to obtain a cost-sharing 
agreement that they believe shares suppression costs equitably. Second, 
nonfederal officials were concerned that the emergence of alternative 
cost sharing methods has caused nonfederal entities to bear a greater 
share of fire suppression costs than in the past. Finally, some federal 
officials expressed concern that the current framework for sharing 
costs insulates state and local governments from the cost of protecting 
the wildland-urban interface, thereby reducing their incentive to take 
steps that could help mitigate fire risks and reduce suppression costs 
in the wildland-urban interface. We believe these concerns may reflect 
a more fundamental issue--that is, that federal and nonfederal entities 
have not clearly defined their financial responsibilities for wildland 
fire suppression, particularly for the wildland-urban interface.
Lack of clear guidance can lead to difficulties in sharing costs
    Some federal officials said that the lack of clear guidance can 
make it difficult to agree to use a cost-sharing method that they 
believe equitably distributes suppression costs between federal and 
nonfederal entities, particularly for fires that threaten the wildland-
urban interface. As discussed, different cost-sharing methods were used 
for the two fires we reviewed in Utah, even though both fires required 
substantial suppression efforts to protect the wildland-urban 
interface. A federal official said that because of the state officials' 
unwillingness to use a method other than acres burned on one of the 
fires and because of the lack of clear guidance about which cost-
sharing method should be used, he agreed to use an acres-burned method 
and did not seek a cost-sharing agreement that would have assigned more 
of the costs to the nonfederal entities. Some federal officials in 
Arizona expressed similar views, saying that the lack of clear guidance 
on sharing costs can make it difficult to reach agreement with 
nonfederal officials. For example, federal and state officials in 
Arizona did not agree on whether to share costs for one fire we 
reviewed in that state.
    Officials from the Forest Service's and the Department of the 
Interior's national offices agreed that interagency policies for cost 
sharing could be clarified to indicate under what circumstances 
particular cost-sharing methods are most appropriate. They said that 
the acres-burned method, for example, is likely not the most equitable 
method to share costs in cases where fires threaten the wildland-urban 
interface. Officials noted that the National Fire and Aviation 
Executive Board--made up of the fire directors from the five federal 
land management agencies and a representative from the National 
Association of State Foresters--was developing a template for both 
master and cost-sharing agreements. As of May 2006, this template had 
not been finalized, but our review of a draft version indicated that 
the template might not provide additional clarity about when each cost-
sharing method should be used.

Nonfederal officials were concerned about increased costs and equity 
        among States
    While federal officials expressed the need for further guidance on 
how to share costs, nonfederal officials were concerned that the 
emergence of alternative cost-sharing methods was leading state and 
local entities to bear a greater share of suppression costs than in the 
past, and they questioned whether such an increase was appropriate. 
Nonfederal officials also said that wildland fire suppression costs 
already posed budgetary challenges for state and local entities and 
that using alternative cost-sharing methods more often could exacerbate 
the situation. State officials said that if a state's suppression costs 
in a given year exceed the funds budgeted, they must seek additional 
state funds, which can be difficult. Moreover, they said, in many 
states, protecting structures is primarily a local responsibility, and 
many local entities are unable to pay the costs of fighting a large 
fire that threatens the wildland-urban interface.\7\ Although 
clarifying guidance about which cost-sharing methods are most 
appropriate for particular circumstances could cause nonfederal 
entities to bear more wildland fire suppression costs, over the long 
term, such clarification would also allow each entity to better 
determine its budgetary needs and take steps to meet them.
---------------------------------------------------------------------------
    \7\ Some states have provisions whereby wildland fires exceeding 
the logistic and financial capabilities of local entities can be 
managed and paid for by the state, but officials said that state funds 
to do so are also limited.
---------------------------------------------------------------------------
    In addition to their concerns about increased costs, nonfederal as 
well as federal officials were concerned that the federal government 
was treating nonfederal entities in different states differently, 
thereby creating inequities. Federal and nonfederal officials said that 
because some states use particular cost-sharing methods more often than 
other states, the proportion of costs borne by federal and nonfederal 
entities likely varies from state to state, resulting in nonfederal 
entities' paying a higher proportion of costs in some states and a 
lower proportion in other states. Clarifying which cost-sharing methods 
should be used in particular situations could increase nonfederal 
officials' assurance that the federal government is treating them 
equitably relative to other states.

Cost-sharing framework may reduce incentives to mitigate fire risks in 
        the wildland-urban interface
    Federal officials said that the current cost-sharing framework 
insulates state and local governments from the cost of protecting the 
wildland-urban interface. As. we have previously reported, a variety of 
protective measures are available to help protect structures from 
wildland fire including (1) reducing vegetation and flammable objects 
within an area of 30 to 100 feet around a structure and (2) using fire-
resistant roofing materials and covering attic vents with mesh 
screens.\8\ However, some homeowners and homebuilders resist using 
these protective measures because they are concerned about aesthetics, 
time, or cost. As a result, federal and nonfederal officials said, it 
can be politically difficult for state and local governments to adopt--
and enforce--laws requiring such measures, and many at-risk areas have 
not done so. The states and communities we visited exhibited various 
degrees of progress in adopting laws requiring protective measures. For 
example, California requires homeowners in the wildland-urban interface 
to maintain 100 feet of defensible space and, in areas at particularly 
high risk from wildland fires, also requires new structures to be 
constructed with fire-resistant roofing materials and vents. The other 
states we visited do not have such statewide requirements, but they are 
taking a variety of steps to require or encourage protective measures. 
For example, Utah passed a law in 2004 requiring its counties to adopt 
standards for landscaping and building materials if they want to be 
eligible to receive state funds to assist with fire suppression costs. 
Other counties had efforts underway to educate homeowners about 
measures they could use to reduce their risk without requiring that 
such measures be used.
---------------------------------------------------------------------------
    \8\ GAO, Technology Assessment: Protecting Structures and Improving 
Communications during Wildland Fires, GAO-05-330 (Washington, D.C.: 
Apr. 26, 2005).
---------------------------------------------------------------------------
    Federal officials expressed concern--and some nonfederal officials 
acknowledged--that the use of cost-sharing methods that assign more 
costs to federal entities, and the availability of federal emergency 
assistance, insulate state and local governments from the cost of 
providing wildland fire protection. These federal officials pointed out 
that wildland fires threatening structures often require added 
suppression efforts. Under some cost-sharing methods, such as acres 
burned, federal entities often end up paying a large proportion of the 
costs for these efforts. Some federal and nonfederal officials also 
noted that the availability of FEMA assistance to nonfederal entities--
which can amount to 75 percent of allowable fire suppression costs for 
eligible fires--further insulates state and local governments from the 
cost of protecting the wildland-urban interface. Of the eight fires 
included in our review, nonfederal officials were seeking reimbursement 
for the allowable costs of the five fires that FEMA determined met 
eligibility requirements. Federal officials suggested that to the 
extent that state and local governments are insulated from the cost of 
protecting the wildland-urban interface, these governments may have a 
reduced incentive to adopt laws requiring homeowners and homebuilders 
to use protective measures that could help mitigate fire risks. Some 
officials said that by requiring homeowners and homebuilders to take 
such measures, more of the cost of protecting the wildland-urban 
interface would then be borne by those who chose to live there.

Officials' concerns may reflect ambiguity over financial 
        responsibilities
    On the basis of our review of previous federal reports and 
interviews with federal and nonfederal officials, we believe that the 
concerns we identified may reflect a more fundamental issue--that 
federal and nonfederal firefighting entities have not clearly defined 
their fundamental financial responsibilities for wildland fire 
suppression, particularly those for protecting the wildland-urban 
interface. Federal officials said that the continuing expansion of the 
wildland urban interface and rising fire suppression-costs for 
protecting these areas have increased the importance of resolving these 
issues. Federal wildland fire management policy states that protecting 
structures is the responsibility of state, tribal, and local entities; 
but the policy also says that, under a formal fire protection agreement 
specifying the financial responsibilities of each entity, federal 
agencies can assist nonfederal entities in protecting the exterior of 
structures threatened by wildland fire. Federal and nonfederal 
officials agreed that federal agencies can assist with such actions, 
but they did not agree on which entities are responsible for bearing 
the costs of these actions. Federal officials told us that the purpose 
of this policy is to allow federal agencies to use their personnel and 
equipment to help protect homes but not to bear the financial 
responsibility of providing that protection. Nonfederal officials, 
however, said that these actions are intended to keep a wildland fire 
from reaching structures, and financial responsibility should therefore 
be shared between both federal and nonfederal entities.
    Further, the presence of structures adjacent to federal lands can 
substantially alter fire suppression strategies and raise costs. A 
previous federal report and federal officials have questioned which 
entities are financially responsible for suppression actions taken on 
federal lands but intended primarily or exclusively to protect adjacent 
wildland-urban interface. Fire managers typically use existing roads 
and geographic features, such as rivers and ridgelines, as firebreaks 
to help contain wildland fires. If, however, homes and other structures 
are located between a fire and such natural firebreaks, firefighters 
may have to construct other firebreaks and rely more than they 
otherwise would on aircraft to drop fire retardant to protect the 
structures, thereby increasing suppression costs. Nonfederal officials 
in several states, however, questioned the appropriateness of assigning 
to nonfederal entities the costs for suppression actions taken on 
federal lands. These officials, as well as officials from the National 
Association of State Foresters, said that accumulated fuels on federal 
lands is resulting in more severe wildland fires and contributing to 
the increased cost of fire suppression. They also said that federal 
agencies are responsible for keeping wildland fires from burning off 
federal land and should, therefore, bear the costs of doing so. Federal 
officials in the states we visited recognized this responsibility, but 
some also said that with the growing awareness that wildland fires are 
inevitable in many parts of the country, policy should recognize that 
wildland fires will occur and are likely to burn across jurisdictional 
boundaries. In their view, those who own property in areas at risk of 
wildland fires share a portion of the financial responsibility for 
protecting it. Previous federal agency reports also have recognized 
this issue and have called for clarifying financial responsibility for 
such actions.

                              CONCLUSIONS

    Wildland fires are inevitable and will continue to affect both 
federal and nonfederal lands and resources. Federal, state, and local 
firefighting entities have taken great strides to develop a cooperative 
fire protection system so that these entities can effectively work 
together to respond to these fires. Efforts are now needed to address 
how to best share the costs of these cooperative fire protection 
efforts when the fires burn or threaten multiple jurisdictions, 
particularly when suppression efforts may focus more heavily on one 
entity's lands and resources. The need for clear guidance on when to 
use a particular cost-sharing method is becoming more acute as the 
wildland-urban interface continues to grow and wildland fire 
suppression costs continue to increase. Before such guidance can be 
developed, however, federal and nonfederal entities must agree on which 
entity is responsible for the costs of protecting areas where federal 
and nonfederal lands and resources are adjacent or intermingled, 
particularly in the wildland-urban interface. Without explicit 
delineation of financial responsibilities, federal and nonfederal 
entities' concerns about how these costs are shared are likely to 
continue.
    Thus, to strengthen the framework for sharing wildland fire 
suppression costs, we recommended that the Secretaries of Agriculture 
and the Interior, working in conjunction with relevant state entities, 
provide more specific guidance as to when particular cost-sharing 
methods should be used and clarify the financial responsibilities for 
suppressing fires that burn, or threaten to burn, across multiple 
jurisdictions.
    In responding to our report, the Forest Service and the Department 
of the Interior generally agreed with the findings and recommendations. 
The National Association of State Foresters did not agree, stating that 
developing national guidance would not provide the flexibility needed 
to address the variability in local circumstances and state laws. 
Although we agree that a certain amount of flexibility is needed, 
without more explicit guidance to assist local federal and nonfederal 
officials responsible for developing cost-sharing agreements for 
individual fires, the inconsistencies in how suppression costs are 
shared within and among states are likely to continue, along with 
concerns about perceived inequities.
    Mr. Chairman, this concludes my prepared statement. I would be 
pleased to answer any questions that you or other Members of the 
Subcommittee may have at this time.

    Senator Craig. Bob, thank you very much.
    Now we turn to two of our key agencies involved certainly 
in this fire issue, that of the the U.S. Forest Service, 
Department of Agriculture, and the Department of the Interior. 
I say to both of you before you start your testimony, the 
reality of what we are dealing with here is that the one 
segment of your budget that is truly out of control or 
unpredictable in many respects is this issue. That is obviously 
why we are focusing on it at the moment and why we feel it is 
so critically necessary that you do that.
    With that, let me turn to the Honorable Mark Rey, the Under 
Secretary for Natural Resources and Environment of the 
Department of Agriculture. Mark, it has been a few months since 
we have had you here. Welcome back.

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

    Mr. Rey. It seems just like yesterday.
    Senator Craig. I bet it does.
    Mr. Rey. Thank you for the opportunity to appear before you 
today to provide the administration's view concerning the 
aforementioned GAO report. As the Department of the Interior 
and the Department of Agriculture work closely together in fire 
management, we will be providing a joint statement. I will be 
providing some background. Secretary Scarlett will then be 
giving you the administration's views on the report per se.
    In our previous hearings here this year, we discussed fire 
preparedness, aviation, hazardous fuels reduction work, 
partnerships, and our efforts to contain the costs of large 
fires. Large fire events are costly and Congress has routinely 
expressed its concern about rising fire suppression costs. We 
share those concerns and are working to address suppression 
costs.
    Over the last few years we have reported regularly to 
Congress on the steps we have taken to address the hazardous 
fuel situation, which will be a principal response to reducing 
fire costs. Likewise, we have reported on the growth of the 
wildland-urban interface. Our research estimates that 9 percent 
of the land and 31 percent of the homes in the United States 
are located in the wildland-urban interface, where 
jurisdictions overlap and fire suppression is more expensive.
    The Forest Service, the Department of the Interior 
agencies, and our partners operate the largest wildland fire 
management program in the world. These agencies and partners 
pioneered the use of the incident command system in the 1970's 
in order to respond to wildland fires. Wildland firefighters 
realized that a standard organizational structure would help 
them communicate, set priorities, and be more effective in 
rapidly changing situations.
    The incident command system has proven itself to be 
adaptable and it has provided a common system to unify 
emergency responders from Federal, tribal, State, and local 
organizations to fight fire or respond to other types of 
emergency situations. Incident command teams use their 
logistical, organizational, and adaptation skills to rapidly 
deploy people and resources from many areas and to respond for 
a wide variety of tasks needed during emergencies.
    Over the past 15 to 20 years, the wildland firefighting 
agencies have developed relationships with our State 
cooperators. As time evolved, sharing of jurisdictional 
responsibilities continued to grow due to proximity of 
resources from an agency rather than each agency having to 
staff all areas of ownership. This created the need for 
enhanced cooperative agreements.
    In the mid-1980's the assistance of these cooperators on 
Federal fires grew, as well as the joint suppression of fires 
that crossed boundaries. Local units would develop individual 
cost-sharing agreements for each incident, but refer back to 
the master cooperative agreement. The basis for cost-sharing 
was typically acres burned in the end or a combination of acres 
burned and the costs associated with the first 24 hours of 
support.
    Since the mid-1990's, the complexity of responding to joint 
ownership fires as well as the growth of the wildland-urban 
interface has prompted different bases for cost-sharing. Those 
were the bases that GAO reviewed and by and large we agree with 
many of their recommendations, as Secretary Scarlett will 
shortly indicate.
    Before I conclude, I would like to submit for the record a 
recent article from the National Journal which commented that: 
``The wildland firefighting area is the one area where the 
joint Federal, State, and local government entities are most 
adept at responding to national disasters or natural hazards, 
as opposed to other areas.'' *
---------------------------------------------------------------------------
    * The article has been retained in subcommittee files.
---------------------------------------------------------------------------
    So in what we do in evaluating our cost-sharing allocations 
here, we want to make sure that the cure is not worse than the 
disease.
    Finally, I would like to respond to two of Senator Wyden's 
comments because I thought in some respects they were unfair. 
What we are in the process of doing is amending existing 
cooperative--an existing template for cooperative agreements. 
We have a template for cooperative agreements now. They can be 
made better. In order to be made better, we are going to have 
to have the involvement of our State partners and that is, as 
you might suspect, taking some time because there are 50 of 
them and they operate under 50 different sets of State laws. So 
I think that time is better spent making sure we get it right 
and improve on what we have, as opposed to doing it quickly and 
badly.
    Suffice it to say that for this fire season we will 
continue to operate and fight fires successfully, achieving a 
greater than 98 percent rate of success on initial attack, 
under the existing template for the master cost-share. Those 
will be improved for the next fire season.
    Now, about the Blossom fire specifically, it seems that the 
Blossom fire, after it was reviewed by the congressionally 
designated cost control panel, that panel believed that we 
overpaid the State of Oregon. So we have been negotiating with 
the State to see what their level of agreement is with the 
recommendations of the congressionally designated cost control 
panel. Not surprisingly, they are taking some issue with some 
of those recommendations. We will work our way through those.
    But Senator, you are in a position today to put a word in 
with the Governor. We could close this out tomorrow if the 
Governor is willing to accept the recommendations of the 
Congressional panel.
    With that, I turn the podium over to Secretary Scarlett.
    Senator Craig. Lynn, welcome.
    Mark, thank you very much. Lynn, welcome to the committee 
again, the Honorable Lynn Scarlett, Deputy Secretary, 
Department of the Interior.
    Lynn.

STATEMENT OF LYNN SCARLETT, DEPUTY SECRETARY, DEPARTMENT OF THE 
                            INTERIOR

    Ms. Scarlett. Thank you, Senator. Thank you, Mr. Chairman 
and Senator Wyden and members of this committee, for holding 
this hearing on a topic that is important to all of us.
    The GAO report we believe does accurately highlight the 
complexities of large multi-jurisdictional fires, especially 
those that occur in the wildland-urban interface. I want to 
underscore that for us safety is unequivocally our top priority 
and must drive much of our decisionmaking. Fires in areas 
populated by homes and citizens generate a larger, more 
aggressive response that includes the use of both structural 
and wildland engines, aircraft, and additional crews and 
equipment. These lands often fall under a mix of ownership and 
jurisdictions that typically involve a response from Federal, 
State, county, and local departments, which adds to the 
complexity and challenges associated with achieving equitable 
cost-sharing.
    The GAO report identifies the inconsistent application of 
cost-sharing, which has led to some inequities in the 
proportion of costs borne by Federal and non-Federal entities. 
It has also resulted in some lack of clarity on 
responsibilities and roles. The Departments agree with the GAO 
report that more guidance is needed as to when a particular 
cost-sharing method should be used in order to clarify an 
entity's financial responsibilities. We also agree that cost-
sharing should be equitable.
    Experience suggests that the current framework for sharing 
costs, including the availability of funds from FEMA to 
reimburse non-Federal entities, in certain cases may result in 
higher than necessary costs. For example, this year in the 
State of Oklahoma they requested and were receiving funding 
from FEMA due to the severity of the fire season. This funding 
was based in part on indices of the fire hazard or the 
likelihood of fire to occur. Once the indices reached a 
benchmark indicating an increased potential for fire, FEMA 
would provide the State with 75 percent cost reimbursement for 
fire resources.
    The State placed a request to the National Inter-Agency 
Fire Center for a type 2 helicopter. The most cost-efficient 
aircraft to fill this order was a helicopter on an exclusive 
use contract in Idaho. Costs for call-when-needed aircraft are 
higher than those on exclusive use contracts. Given the lower 
daily availability cost, the mobilization cost was absorbed 
over the time of deployment in Oklahoma. When the indices 
changed and FEMA no longer supported the cost of the aircraft's 
daily availability, the aircraft was released and returned to 
Idaho. Within a few days, the indices returned to the higher 
threat level and a new request for a similar aircraft was 
placed. Once again, the same aircraft was the most cost-
efficient choice and it was re-mobilized to Oklahoma. The cost 
of mobilizing the helicopter twice to Oklahoma exceeded the 
cost of simply daily availability had it just remained there.
    We appreciate GAO's balanced and thorough examination of 
the issues surrounding cost-sharing among Federal, State, and 
local entities. The Departments, as Mark has mentioned, have 
already begun crafting an inter-agency template and update of 
our current practices to assist in addressing a number of cost-
sharing issues.
    In 2005 the National Fire and Aviation Executive Board, 
made up of fire managers from Federal agencies, developed a 
template for cost-sharing agreements. This template, as Mark 
noted, is currently being reviewed. It provides a framework of 
five different kinds of cost-sharing agreements. We will 
continue to develop guidance to be used in negotiating cost-
share agreements among the Federal Government and our various 
partners. It is our intent to finalize this guidance before the 
beginning of the next fire season, and I thank you for the 
opportunity to discuss this issue.
    Happy to answer any questions.
    [The prepared joint statement of Mr. Rey and Ms. Scarlett 
follows:]

   Prepared Joint Statement of Mark Rey, Under Secretary for Natural 
Resources and Environment, Department of Agriculture and Lynn Scarlett, 
              Deputy Secretary, Department of the Interior

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to appear before you to provide the Administration's view 
concerning the May 2006 Report by the Government Accountability Office 
(GAO) entitled ``Wildland Fire Suppression: Lack of Clear Guidance 
Raises Concerns about Cost Sharing between Federal and Nonfederal 
Entities.'' As the Department of the Interior and the Department of 
Agriculture work closely together in fire management, the two 
Departments are providing a joint statement.
    In our previous appearances this year before this Subcommittee, we 
have discussed fire preparedness, fire aviation, hazardous fuels 
reduction work, partnerships, and our efforts to contain the costs of 
large fires. Large fire events are costly and Congress has routinely 
expressed its concerns about rising fire suppression costs. We share 
those concerns and are working to address suppression costs.
    Multiple factors contribute to the expense of fighting fires 
including weather, fuel type, terrain, and location with respect to the 
wildland urban interface and other highly valued landscapes as well as 
managerial decisions made before and during fire incidents. Over the 
last few years, we have reported regularly to Congress on the steps we 
have taken to address the hazardous fuels situation. Likewise, we have 
reported to you on the growth of the wildland urban interface. Forest 
Service and University research estimates that 9 percent of the land 
area and 39 percent of the homes in the United States are located in 
the wildland urban interface where jurisdictions overlap and fire 
suppression is more expensive. Programs such as FIREWISE help those who 
live in fire-prone areas learn how to protect their homes with a 
survivable, cleared space and how to build their houses with fire 
resistant materials.
    The Forest Service, the Department of the Interior agencies, and 
our partners operate the largest wildland fire management program in 
the world. These agencies and partners pioneered the use of the 
Incident Command System in the 1970s in order to respond to wildland 
fires. Wildland firefighters realized that a standard organizational 
structure would help them to communicate, set priorities, and be more 
effective in rapidly changing situations. The Incident Command System 
has proved itself to be adaptable and has provided a common system to 
unify emergency responders from Federal, Tribal, State, and local 
organizations to fight fire or respond to other types of emergency 
situations. Incident command teams use their logistical, 
organizational, and adaptation skills to rapidly deploy people and 
resources form many areas and respond to a wide variety of tasks needed 
during emergencies. For many cases, the use of unified command is the 
most efficient means to facilitate communications and actions with all 
first responders. Jurisdictional responsibilities can be effectively 
combined within a unified command structure to address wildland fires, 
particularly within the wildland urban interface. This sharing of 
jurisdictional responsibility in conjunction with the increased 
incidence of wildland fire within the wildland urban interface, has 
added to the complexity for equitably sharing the costs of suppressing 
a wildland fire.
    Over the past 15 to 20 years the Federal wildland fire agencies 
have developed relationships with state cooperators. As time evolved, 
sharing of jurisdictional responsibilities continued to grow due to the 
proximity of resources from an agency, rather than each agency having 
to staff all areas of ownership. This created the need for enhancing 
cooperative agreements. In the mid-1980s, the assistance of these 
cooperators on Federal fires grew, as well as the joint suppression of 
fires that crossed ownership boundaries. Local units developed 
individual cost sharing agreements for each incident, but referred back 
to the master cooperative agreement. The basis for cost sharing was 
typically acres burned in the end, or a combination of acres burned, 
and the first 24 hours of support. Since the mid-1990s, the complexity 
of responding to joint ownership fires, as well as the growth in the 
wildland urban interface, has prompted a different basis for cost 
sharing, but no standard has been established.
    The GAO report on cost sharing between Federal and non-Federal 
entities accurately highlights the complexities associated with large, 
multi jurisdictional fires, especially in those that occur in wildland 
urban interface areas. Given that safety is unequivocally the top 
priority, fires in areas populated by homes and citizens generate a 
larger, more aggressive response that includes the use of both 
structural and wildland engines, aircraft, and additional crews and 
equipment. Also, these lands tend to fall under a mix of ownership and 
jurisdictions that typically involve a response from Federal, State, 
county, and local departments. These factors increase the complexity 
and costs associated with incident response in wildland-urban interface 
areas.
    The GAO report identifies the inconsistent application of cost-
sharing which has led to inequities in the proportion of costs borne by 
federal and nonfederal entities. Lack of guidance in determining 
responsibilities can lead to difficulties in reaching agreement for 
appropriate levels of sharing costs. The report highlighted the need to 
define the financial responsibilities for wildland fire suppression for 
federal and nonfederal entities particularly in the wildland urban 
interface. The definition of these responsibilities needs to occur 
prior to a wildfire incident, preferably prior to fire season.
    The GAO report recommends that the Secretaries of the Interior and 
Agriculture, working with relevant state agencies, provide more 
specific guidance as to when particular cost share methods should be 
used and clarify financial responsibilities. Over the years, a number 
of cost containment reports have also noted the complexity of sharing 
costs for these multi jurisdictional fires. The Departments agree with 
the GAO report that more guidance is needed as to when a particular 
cost sharing method should be used in order to clarify an entity's 
financial responsibilities. We also agree cost sharing should be 
equitable.
    Experience suggests that the current framework for sharing costs, 
including the availability of funds from the Federal Emergency 
Management Agency (FEMA) to reimburse non-Federal entities in certain 
cases, results in additional costs to the Federal government.
    We appreciate the GAO's balanced and through examination of the 
issues surrounding cost sharing among Federal, State, and local 
entities. The Departments recognize the need to negotiate cost-sharing 
methods that will take into account the multitude of factors that occur 
in each incident. We have already begun crafting an interagency 
template to assist in addressing a number of cost sharing issues. In 
2005, the National Fire and Aviation Executive Board, made up of fire 
managers from the Federal agencies, developed a template for cost 
sharing agreements. This template is currently being reviewed. We will 
continue to develop guidance to be used in negotiating cost share 
agreements among the Federal government and our various non-Federal 
partners.
    The GAO report provides thoughtful recommendations that will help 
guide us in our efforts to ensure consistency and equity in cost 
sharing agreements among the Federal government and our various non-
Federal partners. It is our intent to finalize this guidance before the 
beginning of the next fire season.
    Thank you for the opportunity to discuss this issue. We would be 
happy to answer any questions you might have.

    Senator Craig. Lynn, thank you very much.
    Now let me introduce to the committee Anne Heissenbuttel--
good, thank you, got it right--executive director, National 
Association of State Foresters. Welcome to the committee, Anne.

 STATEMENT OF ANNE HEISSENBUTTEL, EXECUTIVE DIRECTOR, NATIONAL 
                 ASSOCIATION OF STATE FORESTERS

    Ms. Heissenbuttel. Thank you, Mr. Chairman, Senator Wyden, 
and members of the subcommittee. I wish to extend apologies 
from the State Forester of Arizona, Kirk Rowdabaugh, since he 
could not----
    Senator Craig. I checked the morning news. I know why he is 
not here.
    Ms. Heissenbuttel. Yes, he is dealing with fires.
    Senator Craig. All right. Thank you.
    Ms. Heissenbuttel. You have his written statement for the 
record. I am pleased to summarize his remarks and answer your 
questions on behalf of the National Association of State 
Foresters.
    We appreciate GAO's emphasis on equity and fairness in the 
cost-share process. However, we do have several concerns with 
GAO's conclusions in the report on wildland fire suppression 
cost-sharing. First, as the report acknowledges, the review of 
eight fires in four States over 2 years time does not provide a 
statistically valid sample on the effects of various cost-share 
methodologies. Likewise, GAO reviewed agreements in 12 Western 
States, but did not review any agreements or fires in the 
Eastern half of the country. We believe that if GAO had looked 
at fires over a number of years in a broader geographical area, 
they may have found that any short-term inequities between 
parties would balance out over time.
    We also disagree with GAO that the Secretaries of 
Agriculture and Interior and State forestry agencies need more 
specific guidance on when particular cost-sharing methods 
should be used. I am referring to the new template that we are 
hoping to have out in place very soon. A cost-share agreement 
must provide flexibility for all parties to address changing 
situations. It cannot be constructed as a contract with hard, 
inflexible specifications. Variables such as response need and 
capability, fire activity and severity, and State legislative 
authorities all preclude development of specific guidance that 
might be applied under all circumstances across the country.
    Instead, NASF believes that the national template for 
Master Cooperative Wildland Fire Management and Stafford Act 
response agreements, the new draft that is currently being 
developed by the National Fire and Aviation Executive Board, in 
which State foresters have been involved in the development, 
that it will provide appropriate guidance for cost-share 
agreements. Although that template is not definitive regarding 
which cost-share option to use under specific circumstances, it 
provides the flexibility needed by line officers to address 
variability in terrain, fuels, values at risk, and State and 
local legal authorities and protection responsibilities. 
Further efforts to find specific circumstances for use of one 
cost-share method or another or to identify the point at which 
a fire crosses an arbitrary threshold we feel would be neither 
helpful nor productive.
    The draft language in the template provides five methods to 
determine the best cost-share mix, as Secretary Scarlett just 
mentioned. It specifies that the first three options are 
typically best used on smaller, less complex incidents. The 
last two methods are better used for larger, more complex 
incidents, and we explain that in our written testimony.
    Finally, we disagree with GAO's conclusion that the 
Secretaries must clarify financial responsibilities for 
suppressing fires that burn or threaten to burn across multiple 
jurisdictions. The Federal wildland policy defines Federal fire 
protection responsibilities, including operations in the 
wildland-urban interface. We believe the Federal agencies have 
a clear obligation to keep fires originating on their lands 
from spreading off of Federal lands to other ownerships. It is 
also the responsibility of State and local governments to 
define their financial obligations through State law and local 
codes and ordinances. Therefore, we believe it is neither 
feasible nor appropriate to strictly define at the national 
level the financial responsibilities for suppressing wildfires 
that burn across jurisdictional boundaries. Instead, financial 
decisions must be determined on a State by State basis and even 
from fire to fire.
    In summary, NASF is committed to working with our Federal 
partners to provide the best wildland fire protection programs 
possible. We are committed to working to ensure that all levels 
of government pay their appropriate share of the costs. We 
believe the draft template for master coop agreements will 
appropriately fill this need by providing the guidance and the 
flexibility that is needed to assure costs are shared in the 
most equitable way. We hope and expect that the template will 
be finalized in time for use by State and Federal agencies when 
they develop their cost-share agreements in advance of next 
year's fire season and, as Mark Rey has already said, we do 
have a template in place that is being used for this year.
    Thank you, Mr. Chairman, Senator Wyden, for the opportunity 
to present our testimony. I would be happy to answer any 
questions.
    [The prepared statement of Mr. Rowdabaugh follows:]

 Prepared Statement of Kirk Rowdabaugh, State Forester of Arizona, on 
         Behalf of the National Association of State Foresters

    Mr. Chairman and Members of the Subcommittee: My name is Kirk 
Rowdabaugh and I am the State Forester of Arizona. Last year, I 
represented the National Association of State Foresters (NASF) on the 
strategic issues panel, chartered by the Wildland Fire Leadership 
Council, which recently completed an in-depth study of wildland fire 
cost containment issues. I am here today representing the National 
Association State of Foresters, a non-profit organization that 
represents the directors of the fifty state forestry agencies, eight 
U.S. territories, and the District of Columbia. State Foresters manage 
and protect state and private forests across the U.S. On their behalf, 
I am pleased to offer the following statement for the record.
    NASF has reviewed the GAO report, ``Wildland Fire Suppression: Lack 
of Clear Guidance Raises Concerns about Cost Sharing among Federal and 
Nonfederal Entities'',* and has several concerns. First, we believe 
that GAO's conclusions are not adequately supported by their data. As 
the report acknowledges, the review of eight fires in four states over 
two years does not provide a statistically valid sample. Likewise, GAO 
only reviewed agreements in 12 western states and did not review any 
agreements or any fires in the eastern half of the country. While we 
are interested in the study results, we believe that if GAO had looked 
at a series of joint jurisdiction fires over a number of years, they 
would have found that any perceived short-term inequities between 
parties would eventually balance out over time.
---------------------------------------------------------------------------
    * The report has been retained in subcommittee files.
---------------------------------------------------------------------------
    Second, we disagree with the GAO recommendation for executive 
action, which reads: ``To strengthen the framework for sharing wildland 
fire suppression costs, GAO recommends that the Secretaries of 
Agriculture and the Interior, working in conjunction with relevant 
state entities, provide more specific guidance as to when particular 
cost-sharing methods should be used and clarify the financial 
responsibilities for suppressing fires that burn or threaten to burn 
across multiple jurisdictions.'' A cost-share agreement must provide 
the necessary flexibility for all parties to adjust to a changing 
situation. It cannot be constructed as a contract with hard, inflexible 
specifications. Variables such as response need and capability, fire 
activity and severity, and state legislative authorities preclude the 
ability to develop specific guidance that can be applied under all 
circumstances across the country.
    NASF believes that the national template for Master Cooperative 
Wildland Fire Management and Stafford Act Response Agreements (the 
template) currently being developed by the National Fire and Aviation 
Executive Board (a board comprised of the national fire directors of 
the USDA Forest Service, four Bureaus within the Department of the 
Interior, and NASF) will provide appropriate guidance for cost-share 
agreements. As the GAO report notes, this draft template identifies the 
requirement for a cost-share agreement and defines the various options 
available to line officers. Although the guidance in the template is 
not definitive regarding which cost-share option to use under specific 
sets of circumstances, it provides the necessary flexibility needed by 
line officers to effectively address local variability in terms of 
terrain, fuels, and values at risk, as well as state and local legal 
authorities and protection responsibilities. We believe that further 
efforts to define the specific circumstances that would warrant the 
selection of one cost-share method over another, or identify the point 
at which a fire crosses some arbitrary threshold, will be neither 
productive nor helpful. Federal and state line officers need the 
flexibility to jointly craft cost-share agreements appropriate to the 
complexity of the incident, rather than attempt to apply rigid, 
national guidelines that may not fit their local circumstances. The 
current, draft language in the template is as follows:

          ``Fire suppression costs will be determined from the 
        information supplied in this section. There are several ways to 
        determine the best cost-share mix. A, B, and C are typically 
        used on smaller, less complex incidents; D and E on larger, 
        more complex incidents:
                  A. Each Agency pays for their own resources--fire 
                suppression efforts are primarily on jurisdictional 
                responsibility lands.
                  B. Each Agency pays for their own resources--services 
                rendered approximate the percentage of jurisdictional 
                responsibility, but not necessarily performed on those 
                lands.
                  C. Cost share by percentage of ownership or Agency 
                jurisdictional responsibility.
                  D. Cost is apportioned by geographic division. 
                Examples of geographic divisions are: Divisions A and B 
                (using a map as an attachment); privately owned 
                property with structures; or specific locations such as 
                campgrounds.
                  E. Reconciliation of daily estimates (for larger, 
                multi-day incidents). This method relies upon daily 
                agreed to cost estimates, using Incident Action Plans 
                or other means to determine multi-Agency contributions. 
                Reimbursements can be made upon estimates instead of 
                actual bill receipts.''

    Finally, we disagree with the GAO conclusion that it is the 
responsibility of the Secretaries of Agriculture and the Interior to 
``clarify financial responsibilities for suppressing fires that burn or 
threaten to burn across multiple jurisdictions.'' The Secretaries 
clearly have the responsibility to clarify federal responsibilities on 
federal lands which, in fact, they have done. The 1995 Federal Wildland 
Fire Policy, as revised in 2001, accurately defines federal fire 
protection responsibilities, including operations in the wildland-urban 
interface. We believe that federal responsibilities on federal lands 
are clear: federal agencies have an obligation to keep fires 
originating on their lands from spreading off federal lands on to other 
ownerships. On the other hand, it is the responsibility of state and 
local government to define their financial obligations through state 
law and local ordinances and codes. As states are independent entities, 
their laws, ordinances, and codes are frequently different from one 
another. Therefore, we believe that it is neither feasible nor 
appropriate to attempt to strictly define at the national level the 
financial responsibilities for suppressing wildfires that burn across 
federal/nonfederal jurisdictional boundaries. Federal agencies must 
recognize that differences in state laws require that financial 
decisions on sharing suppression costs must be determined on a state-
by-state basis. We believe the draft national template for Master 
Cooperative Agreements will help ensure that such decisions are 
equitable to all parties while retaining the need for flexibility from 
state to state and fire to fire.
    NASF is committed to working with our federal partners to provide 
the best wildland fire protection programs possible in order to protect 
U.S. citizens, their property, and our valuable natural resources. We 
are committed to working to ensure that all levels of government pay 
their appropriate share of the costs. We believe the draft template for 
Master Cooperative Agreements will appropriately fill this need by 
providing the necessary guidance and flexibility to ensure that costs 
are shared between federal and state agencies in the most equitable 
way. We expect the template will be finalized in time for use by state 
and federal agencies when they develop their cost share agreements in 
advance of the 2007 fire season.
    Thank you, Mr. Chairman and members of the Subcommittee, for the 
opportunity to present our testimony. I would be happy to answer any 
questions you may have.

    Senator Craig. Thank you all very much. Instead of breaking 
you into two panels, I want all of you at the table at the same 
time because it is obvious there is work in progress, along 
with a concern about these relationships and the indices of 
measurement as it relates to who pays what and in what way. So, 
as I direct questions at an individual, if an additional input 
by others you feel is appropriate, please involve yourselves so 
we can have an interactive discussion on this issue.
    Director Robinson, as part of the GAO study you testified 
both that acres burned formula cost-sharing against the actual 
cost method for fighting fires were examined. The data suggest 
some very large swings in which entity would benefit. 
Unfortunately, there was not a consistent pattern that showed 
which methodology would benefit the States and the Federal 
entities. So I guess my question to you is, understanding that 
you only compared the two methodologies on four fires, did your 
investigators get any sense that one methodology might 
advantage either party if consistently applied in all States on 
all fires?
    Mr. Robinson. Thank you, Mr. Chairman. Your premise is 
correct that, with eight fires in total examined in our 
methodology, we do not have generalizable results. So I will 
have to speak to the results that we saw in the five fires 
where an alternative to a pure acres-burned methodology was 
used. In three of those cases, the Federal Government turned 
out to have been better off under the alternative. In one case 
the Federal Government paid more than they would have under 
acres burned and in one case it was essentially a wash.
    So with that, I guess at the end of the day I have to say 
it depends. We do not have enough evidence to say conclusively, 
one way or the other, that one system or another would benefit 
the States or the Federal Government.
    I would point out, coming back to what I said earlier, that 
I do think that greater clarity and sort of having default 
options, agreed-upon options, have the potential to benefit 
everybody from a variety of angles, including budgetary 
certainty and potentially cost containment and cost reduction.
    Mr. Rey. Senator, I think our sense of that is that 
generally speaking allocating costs through apportionment would 
benefit the Federal Government more frequently than allocating 
costs on the basis of acres burned. But that is not to say that 
that is the best approach in every instance. In small fires, we 
will spend money doing the cost apportionment when it might be 
just as easy and ultimately cheaper to do it on the basis of 
acres burned. But in specific response to your question, our 
general feeling is that cost apportionment as a methodology 
would typically benefit us more often.
    Senator Craig. In the template that you are at work on, 
where do you think you will come in in relation to how you 
allocate costs? Or will there be a variable or flexibility as 
to how you allocate and, if so, what might trigger that?
    Ms. Scarlett. Senator, the template has five different cost 
allocation methods proposed. The reason for the five is that, 
as Mark pointed out, you are really balancing on the one hand 
ease of administration, so that you are not spending more time 
trying to get the cost allocation than you are actually 
benefiting from that effort--so on the one hand you are 
balancing that with other factors, such as equity and the 
precision with which the resources are allocated to those that 
use them.
    So what we propose in this template is flexibility, and the 
factors that would determine which one you would use would tend 
to be, if it is a smaller simpler fire you want just the easier 
method that does not require a lot of calculations. If it is 
one of our large, complex fires, there the cost allocation 
method, as Mark stated, is likely to be utilized and 
recommended more frequently.
    Mr. Rey. I would add as well, per the legislation that you 
enacted 2 years ago, you have an independent panel that 
Congress created reviewing both cost containment and cost 
allocation on any fires over $10 million. So there is going to 
be a second look at that independent of either the Federal or 
the State cooperators.
    Senator Craig. My time is about up. But Anne, how do we 
assure under this method that there is not only the appearance 
of, but the reality of, equity amongst the States as it relates 
to this kind of allocation? If there is a five-option platform 
from which to make these decisions, is the panel the arbiter or 
do we have States that are frustrated because one figures they 
got better treatment than another?
    Ms. Heissenbuttel. I think the template will help because 
currently some States are using only one or two options, other 
States may be focusing on a different set of options. This 
template will lay out those five options available for 
everyone, with the clear guidance that some methods are better 
in simpler scenarios and the cost apportionment, for example, 
is much more suited for the more complex and expensive fires.
    So I think it would even things out to the extent that 
everybody would be working with the same set of five options to 
use and the same guidance on which ones to use when. It still 
provides the flexibility that is needed to address different 
conditions within a State or from State to State.
    Senator Craig. Before I turn to my colleague Ron Wyden, let 
me recognize that our colleague from Colorado, Ken Salazar, has 
joined us. Colorado escaped largely last year. You are getting 
dry again out there. You had some tremendously difficult fires 
in what is now the forests of Colorado, which is substantially 
wildland-urban interface, along the Rocky Mountain Front, and 
the difficulties and the complexities there.
    Ken, when we turn to you, because you were not here for 
opening statements, if you have some opening statement you 
would like to incorporate with any questions, please feel free 
to do so.
    Now let me turn to Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Mr. Rey, let me start with you. I am not going to do too 
much sparring on the issue of what is a template, but I do note 
that in your testimony you say in the third to last graph ``We 
have already begun crafting an inter-agency template to assist 
in addressing a number of cost-sharing issues.'' Then when you 
say ``It is our intent to finalize this guidance before the 
beginning of the next fire season,'' one wonders why it was not 
done for this fire season.
    But let me ask my question in a different kind of way, 
rather than parsing words about when a template is supposed to 
arrive. What is unquestionable right now is that costs continue 
to soar to the stratosphere. Second, we have a critical report 
from the Government Accountability Office, a report that says 
that there are implications for both the Federal Government and 
the States, and it comes from a lack of guidance on all of 
this.
    Now, I happen to have a difference of opinion with GAO as 
well because my State wants more flexibility in terms of 
dealing with it. I think this is an area where the Federal 
Government and the States can clearly work together. My 
question to you then, Mr. Rey, is why was not more done to have 
this straightened out for this fire season? Set aside the 
templates and some of this about when it is going to come. Why 
was not more done to straighten out the various issues that are 
being discussed here for this fire season?
    Mr. Rey. Simple reason: Because this is a lower priority 
than assuring the safety of our firefighters, treating 
hazardous fuels to reduce fire intensity, maintaining and 
increasing our effectiveness of first response, and engaging in 
cost containment in large incident fires. Fixing this will not 
affect the overall cost of fires. It will merely affect who 
pays that cost.
    So we established as a higher priority relative to the cost 
side putting measures into effect, in part in response to 
previous congressional actions, to contain the cost of overall 
fires. Now it is appropriate to turn to the lower priority, 
which is cost allocation. But it is, I believe, a lower 
priority because it is not going to affect the bottom line. It 
merely is going to affect whether your Governor or we pay what 
portion of that bottom line.
    The template is a framework that will be used to govern 
each master cost agreement with each State. It is a revision of 
a template that already exists. It will be used to revise 
master cost agreements that already exist as well. Those 
revised master cost agreements will then affect the individual 
incident cost-sharing agreements that we reach as we deal with 
each incident.
    Senator Wyden. I do not disagree in the least with how 
important those other priorities are and I think none of us 
would want to have a referendum on which one of those critical 
issues is the most important after the safety in protecting the 
immediate health and wellbeing of communities. I just still do 
not understand, given how long the Federal Government and the 
State governments have gone back, have gone back and forth on 
this issue, why more could not have been done to address it.
    I gather from you folks at the GAO that this issue has been 
going on for years and years. Has it not, Mr. Robinson?
    Mr. Robinson. Yes, Senator, we have issued reports on this 
topic or some combination or permutation of this topic for at 
least 6 years. I want to use this opportunity to say that the 
conclusions and recommendations we have made are not the first 
time such conclusions have been reached. NAPA reached a similar 
conclusion. The agencies in their own independent analyses have 
reached a similar conclusion, and I think the State foresters 
have acknowledged it in a 2000 report, that this is an issue 
that needs some attention and greater clarity.
    Mr. Rey. Perhaps to put this issue in a more accurate 
context, this is an issue where there will not be a beginning 
or an end, because circumstances on the ground and in the State 
legislatures and in the Congress are going to continue to 
change. The nature of the fire ground is going to continue to 
evolve as the wildland-urban interface expands and as, on the 
positive side, we get more acres treated to reduce fuel loads.
    You all are going to continue to give us direction about 
cost containment. We appreciate that and that is going to 
change this process. And the State legislatures are going to do 
the same for our partners.
    In this particular instance, one of the things that we 
elected to do was to combine the changes we needed to make to 
this template with changes designed to implement Stafford Act 
language that is relevant to this. So that took a little bit 
more time and, in addition, as I said earlier, this is not 
something the Federal Government can do unilaterally because to 
do so or to try to do so would simply confound the ultimate 
resolution that we want to achieve, which is an agreed-upon 
methodology for allocating costs with 50 different sovereign 
States.
    Ms. Scarlett. Senator, might I add something to Mark Rey's 
comments? We applaud your interest in cost containment. 
Certainly it is a big concern for us. I think we are juggling 
five different actions at the same time, of which the cost-
sharing allocation is one. Several years ago, recognizing the 
high and growing cost of fires, we created a strategic issues 
panel, the focus of which was specifically to identify cost 
containment measures. That panel resulted in seven clusters of 
recommendations and I am pleased to say that on six of the 
seven we have made very significant progress, with the 
intention of helping to contain and/or bring down those costs.
    A second cluster or a second area that we have worked on is 
aviation strategy. A big driver is how we utilize aviation. We 
have worked jointly with the Forest Service on an aviation 
strategy.
    The third is to apply better business management as a fire 
actually unfolds and put business managers on site during--in 
particular--these large fires, and that is well under way and 
in practice.
    Fourth, we have developed more performance measures so 
folks on the ground have cost as a consideration as they make 
their deliberations and decisions.
    The fifth is this cost-sharing and allocation and, as Mark 
said, I think it has not been unintended, but rather a work in 
progress, and I think we are going to, as a result of this and 
working with the States, get a product, as Anne noted, that 
will serve us well and better in the future.
    Senator Wyden. My time is up. I just want to leave this 
with just one last thought, Mr. Rey. Again, no disagreement 
about the fact that things change on the ground. We have 
certainly wanted that with efforts to try to prevent fires and 
areas where there has been bipartisan support. It just seems to 
me that the fact that things are going to change so 
dramatically on the ground is all the more reason why we have 
got to straighten these relationships out between the Federal 
Government and the States.
    Mr. Robinson points out that this thing has been kicking 
around for over 5 years and I think it is time to straighten 
things out.
    I appreciate the extra time, Mr. Chairman. I know our 
colleague from Colorado has been waiting and I look forward, of 
course look forward to doing that, look forward to working with 
you on this, of course making sure that the county payments 
legislation is passed quickly, a matter of urgent need in 
Colorado, Oregon, and Idaho, and we will be talking to you 
about a variety of issues.
    I think I wanted to wrap up to let Senator Salazar talk, 
but I think the folks from the States wanted to make a comment.
    Ms. Heissenbuttel. Please, just to add one thing. The State 
foresters have been working with the Federal agencies on this 
new template and we have believed that it is very near 
completion and ready to go. But it was in the works before GAO 
began their study, and their study was not looking at how the 
new template would affect cost-sharing. So I think if we just 
can move forward, if we can put this new template in place as 
quickly as possible, it will help address the equity issues 
that you are concerned about.
    Senator Wyden. Thank you, Mr. Chairman.
    Senator Craig. Ron, thank you very much.
    Now let us turn to Senator Ken Salazar of the State of 
Colorado.
    Ken.

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

    Senator Salazar. Thank you, Mr. Chairman, and thank you, 
Senator Wyden.
    Let me at the outset, since I have the opportunity to 
address both Deputy Secretary Rey and Deputy Secretary 
Scarlett, just say that I believe, Mr. Chairman, that we are in 
the West looking at having a Western-type Katrina because of 
the drought conditions that we are facing. Sunday I was driving 
from the San Luis Valley in southern Colorado to Denver and I 
saw a wisp of smoke over Lavita Pass on Highway 160, that has 
now turned into a fire that has burned about 10,000 acres and 
will continue to spread. With 1.5 million acres of bark beetle 
and spruce beetle-infested forests in Colorado, along with the 
drought conditions, which are the most severe that we have seen 
in most parts of the State probably in all of the records that 
we have, with the exception of the year 2002, I think this year 
we are going to see the fires that we are already seeing in 
Colorado, in Arizona and other places probably surpass anything 
that we have ever seen in the past.
    So I am grievous, I am very, very worried about my State of 
Colorado. I know that there are other Senators that will also 
be worried about that.
    One thing that I will put again on Under Secretary Ray's 
mind is that the Forest Service needs additional resources to 
be able to deal with this bark beetle problem. We have about 
280,000 acres in Colorado that have already been approved after 
the NEPA process for treatment, but because we only have about 
82,000 of those acres approved for treatment in 2006 we are not 
going to be able to do as much for prevention as we possibly 
could.
    I appreciate very much what you have done, Mark, in terms 
of allocating I think an additional $500,000 to Colorado to 
deal with that issue and I want to acknowledge that you have 
done that. But I also know that the hill we have to climb in 
terms of dealing with this issue is a very major hill.
    [The prepared statement of Senator Salazar follows:]
   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado
    Thank you Chairman Craig and Senator Wyden. As always, I appreciate 
the opportunity to attend this Subcommittee's hearings on subjects that 
are critical to Colorado.
    I'd like to thank the committee for the opportunity to review this 
GAO report. I have a few observations on the report that I would like 
to share with the Departments of Agriculture and Interior. It is 
common-sense that the Departments, in following the recommendations of 
the GAO report, should make sure that federal land managers and local 
governments are never put in a position where they are reluctant to 
order needed resources to fight a wildfire because of a question as to 
who will pay the costs. It also goes without saying that the guidance 
that is given should not be rigid guidelines that take away the 
flexibility needed to address different wildfire scenarios and 
situations. At the same time, local entities and states want to know 
that they are being treated equitably and not taking on undue, 
increased shares of the cost.
    As we discuss the costs associated with protecting out local 
communities from wildfire, I cannot help but to think of the needs in 
Colorado when it comes to hazardous fuels. Colorado is suffering a 
prolonged drought that is adversely impacting our forests. According to 
the U.S. Drought Monitor a majority of Colorado is considered to be in 
a severe or extreme drought situation. Along with the drought, Colorado 
is also seeing an extraordinary insect infestation moving through our 
forests. It is estimated that over 7 million trees on over 1.5 million 
of acres have experienced beetle kill leaving behind even greater 
hazardous fuel conditions.
    There is a tremendous amount of hazardous fuel work to be done in 
Colorado. The Forest Service reports that 113 projects covering 280,000 
acres of hazardous fuels treatments have been approved through NEPA and 
are available for implementation pending funding. 65% of these 
treatments are located in the wildland-urban interface. Another 235,000 
acres are being analyzed for approval. Unfortunately, The Forest 
Service only expects to implement, at most, 82,000 acres of treatments 
in 2006. Colorado's forest health and hazardous fuel conditions are 
deteriorating faster than current funding is able to address.
    What ties all of this together, in my mind, are the cooperative 
efforts that are taking place in Colorado to address this situation.
    Two specific efforts, the Northern Colorado Bark Beetle Cooperative 
and the Front Range Fuels Treatment Partnership that feature 
collaboration between the Forest Service, local communities, and state 
agencies. By working together, these efforts are seeking to prioritize 
areas for treatment, lower the costs of those treatments, and to 
address the associated impacts of this beetle epidemic. The hope of 
these cooperatives is to lower future suppression costs by investing in 
forest health today.
    Mr. Rey, I was heartened to see the Forest Service send an 
additional $500,000 to Colorado this spring to address these forest 
issues. I would like to, again, ask the Forest Service for additional 
funds for hazardous fuels and forest health projects in Colorado.
    To conclude, I appreciate the opportunity to briefly comment on the 
GAO report, and I emphasize the need for us to look at the hazardous 
fuels treatment needs that are increasing faster than funding in 
Colorado due to the drought and insect infestations plaguing our state. 
Thank you.

    Senator Salazar. Let me just quickly ask a question of Mr. 
Robinson relating to the GAO report. I appreciate the work that 
is going on on the part of the Forest Service and the 
Department of the Interior and the State foresters to try to 
respond to the recommendations that you have made. In your 
findings, what you essentially find is that we need more 
guidance, more clear guidance in terms of cost-sharing here.
    When you were putting together your GAO report, did you 
consult with local and State officials? And assuming that the 
answer to that is yes, then I would ask whether you received 
any information from them that the lack of clear guidance was 
in any way putting a hindrance on them in terms of asking for 
assistance from the Federal Government when they were dealing 
with the outbreak of fire?
    Mr. Robinson. Yes, Senator Salazar, we of course worked 
very closely with all sides, as we do routinely in conducting 
our work. In this case, we worked closely with State officials 
along with Federal officials, and gave the National Association 
of State Foresters the opportunity to officially comment on the 
report, incorporated their comments, and addressed their 
comments as appropriate. So the answer is yes, we did strongly 
consider their views.
    And yes, during the course of our work relative to the 
confusion, the lack of certainty is not unique to the Federal 
agents who are negotiating the cost-sharing arrangements, but 
was shared at some level by the States as well.
    The point is, and I want to make sure this gets in relative 
to the template that we are discussing so much today, is that, 
putting yourself in the shoes of the people who are trying to 
negotiate these cost-sharing arrangements, when there is 
confusion about terminology and basic principles, it makes the 
process relatively unwieldy and difficult to conduct 
efficiently, effectively and fairly. So as we develop this 
template, which is certainly a very good starting point, we 
think it is vitally important that before it is issued in final 
form it is tested by the folks who have to administer it to 
make sure they understand it and can fairly, equitably, and 
consistently implement it on the ground.
    Senator Salazar. Thank you, Mr. Robinson.
    For Mark and Lynn, if you will respond to this question. I 
often think about these county commissioners in some of the 
very small counties in the southern part of my State where 
these fires are taking place and I wonder how much they really 
know about what cost allocations are and what kinds of--how 
they ought to approach the Federal Government whenever they are 
dealing with some of the disasters that they are dealing with.
    So my question to Mark and Lynn is, what kind of outreach 
effort do we have, not only with the State foresters, but also 
with the local officials that many times are the ones who are 
the first responders on the ground to these fires?
    Ms. Scarlett. I will begin with a response, Senator. We 
have created a Wildlife Fire Leadership Council that is inter-
agency and inter-governmental to try and discuss many of the 
operational challenges with respect to both fuels reduction and 
fire. On that council sits NACO, the National Association of 
Counties, as well as the Inter-Tribal Timber Council, as well 
as the National Association of State Foresters.
    In addition, we have built increasingly strong relations 
with the International Association of Fire Chiefs, which 
includes many of the volunteer firefighting organizations from 
small counties and/or small towns in rural areas. Part of the 
purpose of that is to have a platform for discussing things 
like communications, interoperability, a better seamlessness 
when they arrive and then we arrive and have the handover and-
or the sharing of responsibility.
    So I think we have made significant advances these last 
several years in those relationships, though of course we need 
to continue to work on it.
    Senator Salazar. Thank you, Lynn.
    Mr. Rey. I think in most, if not all, of the master 
agreements in each State there are provisions for the State 
forestry agencies to assist the counties in doing whatever cost 
allocation needs to be done subsequent to the end of a fire. 
But one of the things I would like to clarify is there is a 
difference between confusion and uncertainty and there is a 
difference between responding to and extinguishing a fire and 
the task after that of allocating the costs associated with 
that.
    There is no confusion about how the former task gets done. 
Everybody knows how to run the incident command system and what 
their responsibilities are under that, and that of course is 
our highest priority. Now, as to whether what different units 
of government face after the fire is extinguished and when we 
are put to the task of allocating costs is confusion or simply 
uncertainty because of flexibility that we have provided is not 
a black or white distinction. It is rather a spectrum, and the 
best place to be in that spectrum is to provide enough 
flexibility so that we can allocate costs wisely, but enough 
precision so that we have equity among the States.
    That is the balance we are trying to strike.
    Mr. Robinson. Senator, could I just respond to that?
    Senator Craig. Certainly.
    Mr. Robinson. One of the reasons for the optimism that you 
heard in my statement is because the level of cooperation that 
is achieved on fighting the fire is a model for the Federal and 
State interaction. Given the fact that such a level of 
cooperation can be achieved in fighting the fires, it does not 
seem unreasonable that we will be able to achieve a level of 
cooperation in devising a fair and equitable cost-sharing 
arrangement ultimately.
    Senator Salazar. I know my time has expired, Mr. Chairman, 
but I would make one comment to Interior and to USDA-Forest 
Service here. That is that I think additional outreach perhaps 
directly through the Colorado--through the county organizations 
in Colorado, it is Colorado Counties Inc.--might be something 
that would be helpful, so that it goes down from the NACO level 
down to the local State level. Because I can tell you, when you 
get those county commissioners in my State it is 64 counties, 
probably 3 or 400,000 commissioners coming together every year 
for their annual convention. I would imagine that this would be 
one of the issues that would rank at the top of their radar 
screen along with issues like PILT and other things that you 
deal with in the West all the time.
    There is no State I think in the West that is immune from 
dealing with these fire issues, and ultimately the cost 
allocation issue is something that they will have to deal with.
    I appreciate your testimony here very much today. Thank 
you.
    Senator Craig. Ken, thank you very much. I know that--what 
is your State, half green and half brown right now, or 
something like that?
    Senator Salazar. We thought in probably February that it 
would be about half green and half red, and what has happened 
is, because of the high temperatures, Denver in the early part 
of June was getting temperatures that were 100 degrees. So the 
runoff came off very, very quickly, and we are seeing an 
escalation of fires that I have only seen one other time in my 
life and that was 2002, when we had about half the State that 
seemed to be on fire.
    Senator Craig. Thank you. That is serious stuff.
    Mr. Robinson, I wonder if you could give me some example of 
the specific guidance that you believe should be included in a 
new policy?
    Mr. Robinson. Number one, I think we want to make the point 
that the folks that are best able to arrive at the specific 
arrangements are at the table to my left, and that the template 
is probably a good starting point. I do want to reemphasize 
that there is some confusion on the ground and that confusion 
needs to be dealt with. In large measure, it has to do with 
uncertainty about how to interpret phrases like ``an unusually 
complex fire'' or ``exterior protection of buildings,'' as to 
whether--on a practical level, does that mean you put your back 
up against the building and everything outside of that is 
within the Federal domain, or is just what is inside of it the 
States?
    There is a lot of uncertainty, and when costs are being 
allocated, folks do not know how to conduct their negotiations 
and the result is confusion, uncertainty, and some level of 
inequity. We believe at the end of the day there ought to be 
some default options. Under a given set of circumstances, this 
would normally be the option you would use to allocate costs, 
the system or method you would use. You could certainly build 
in flexibility. There is no doubt that there needs to be 
flexibility. Even in the face of a default option, if both 
sides agree that a different option makes more sense in a given 
circumstance, you could revert to that. But there needs to be 
some solidity under the system so that the folks that are 
actually trying to do these negotiations have some level of 
certainty and at least one foot standing on solid ground.
    The other thing I want to mention here is that these 
arrangements need to be worked out in advance of the fire, 
because during the fire or after the fire when everybody moves 
on to some other activity, it makes the negotiation process a 
lot more difficult than it would otherwise be. So those are the 
components and the basic principles we would like to see 
incorporated, while recognizing that the folks best suited to 
derive the specifics are to my left. That would be both Federal 
and State, and that is what we try to emphasize both in our 
statement and in our report.
    Senator Craig. Thank you. I appreciate that.
    Mark, it is clear to all of us that fire costs are 
increasing, as are the number of fires that burn throughout the 
wildland-urban interface. Has the Federal Government made any 
assessment of how much funding is being expended as a result of 
having to fight more fires in the wildland-urban interface zone 
and if not, could you prepare such an analysis for the 
committee?
    Mr. Rey. We do not have an analysis to date that aggregates 
all of that information. We have done some analyses on a fire 
by fire basis talking about, analyzing how our attack strategy 
would have differed but for the presence of a new subdivision. 
So we can give the committee some qualitative information that 
illustrates how that changes firefighting strategy and 
influences cost on some specific fires. But we have not 
attempted to aggregate that to come up with that as a whole.
    Senator Craig. Because both you and Lynn know as you travel 
across our, especially our forested lands in the West, lines 
are getting awfully blurred at the moment as the mega-home goes 
up on that nice little sanctuary of property that somebody from 
somewhere else bought for a large sum of money. I have spoken 
to supervisor after supervisor, especially on the forests, that 
said: We spend the bulk of our time putting out fires in 
protection of structures than we do in protection of resource. 
And that seems to be the ever-increasing spiral in a Western 
theme of lifestyle that continues to accelerate. I think we 
have to be concerned about that.
    Mr. Rey. In fact, the situation is even worse than I 
testified to, because staff indicates that they had corrected a 
number. I said that 31 percent of the homes in the United 
States are located in the wildland-urban interface. The correct 
number is 39 percent of the homes in the United States are 
located in the wildland-urban interface.
    Our firefighters tell us that over the last 20 years 
somewhere in the neighborhood of close to 8 million new homes 
have been built in the wildland-urban interface. If you take an 
average household size of three people, that means that--or 
four people, rather--we have moved the equivalent of the 
population of California into the wildland-urban interface 
during that period.
    Senator Craig. As an Idahoan, all I can say is: We know.
    But my point here is if we can take a look at these numbers 
and if they are going like this [indicating] and we are trying 
to project out for 10 years, I think it would be most helpful 
for Congress to have a heads up that in reality these budgets 
are going to continue at an ever-increasing rate in this 
particular area of concern. And no matter how we share the 
costs, you have already said it is not a matter that the costs 
are coming down; it is a matter that we are trying to figure 
out an equitable way to pay for an ever-increasing cost. I 
think we need to know that.
    Ms. Scarlett. Senator, may I add one other observation in 
this context. This growing wildland-urban interface and the 
presence of these residences really underscores also the 
imperative of FIREWISE, that is working with communities and 
getting that defensible space around those homes. If the homes 
are there, at the very least we can work with landowners and 
local communities to ensure that they are as defensible as 
possible.
    Everything that we look at with respect to FIREWISE shows 
that it can be successful in significantly reducing risk to 
those who are in that interface.
    Mr. Robinson. Mr. Chairman, if I may add one other point. 
In 2005, we did a technology assessment on this very issue. If 
you have not seen, there is a Forest Service researcher, Jack 
Cohen, who has put together this film.
    Senator Craig. I have seen it.
    Mr. Robinson. It is quite compelling. Some of the pictures 
we have in our report, as well as videoclips in the electronic 
version, are very compelling.
    Senator Craig. They are good, that is correct.
    Anne.
    Ms. Heissenbuttel. In addition to FIREWISE, I wanted to 
mention the importance of the community wildfire protection 
plan process that was introduced in the Healthy Forests 
Restoration Act, and States all across the country, whether 
they are close to Federal lands or not, are working with their 
communities to help them develop plans so that they can reduce 
their risk, reduce their losses, and accordingly that should 
help reduce some of the costs of fighting fire.
    Just as an example, I have a status report that was 
prepared by the Council of Western State Foresters on the 
community wildfire protection plans that have been developed in 
the Western States and I would be happy to submit that for the 
record.*
---------------------------------------------------------------------------
    * The report has been retained in subcommittee files.
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    Senator Craig. I appreciate that very much. I think, beyond 
the messages that we are trying to communicate here today and 
the broader picture we are attempting to understand as you deal 
with this--and I think States and local communities ought to 
become phenomenally aggressive in this area. There is no 
question that many who seek the sanctuary of the wildland-urban 
interface seek it with considerable resources. I believe it 
ought to be a matter of zoning that they are required to put in 
their own fire protection devices along with local fire 
departments and agencies. I think there is a responsibility out 
there that the Federal Government and State governments are 
assuming that is historically and should still be a private 
responsibility in many instances. And FIREWISE and all of those 
tools, if properly implemented and then monitored, should have 
an index of bringing down the cost borne by the private sector 
as oftentimes insurance drops if a fire station is stood up or 
something of that nature.
    That is all part of what I think we have got to be looking 
at, that as our population rushes to the hinterland they have 
got to recognize that they have got to carry some 
responsibility with them.
    Mark, the National Association of State Foresters contend 
in their comments to the GAO that the Federal land managers 
should bear the burden of the costs of fighting fires in the 
wildland-urban interface because your management policies 
inhibit your ability to fight fires in the most aggressive 
manner. They point to no mechanized equipment under certain 
conditions, i.e., wildernesses in this instance. I will add the 
failure to use bulldozers for fear of damaging streams and 
rivers.
    If we are going to put every fire out by 10 a.m. the next 
day and we are going to allow some fires to burn in some areas 
and we are not willing to use bulldozers in some areas, why 
should Federal land managers not be responsible for fires that 
escape the Federal lands?
    Mr. Rey. Well, we are. We accept as a primary obligation to 
keep fires that initiate on Federal lands on Federal ownerships 
and away from spreading to other ownerships. Some of the 
conditions that we place on firefighting that you have 
described are not conditions that we would impose if the fire 
has a high probability of spreading off of Federal ownership 
onto non-Federal lands.
    The probably only one that we cannot control ourselves is 
the restrictions and the location of wilderness areas, because 
those are congressional determinations. But as you probably can 
recall from some of our most recent testimony on pending 
wilderness bills, we often object to congressional proposals to 
create new wilderness where there are non-Federal lands in 
immediate proximity because of the complication that that 
presents for more aggressive opportunities for attacking fires 
if they ignite within the wilderness.
    So I do not think we have any beef with NASF's testimony 
here. We accept the obligation to keep Federal fires, fires 
that ignite on Federal lands, from spreading off of Federal 
lands onto non-Federal lands, and where we condition 
firefighting efforts for environmental values it is most 
commonly areas where we are not worried about the spread off of 
our ownership.
    Senator Craig. Thank you.
    Lynn, in the DOI's response to the draft GAO report the 
Department said: ``We have seen this issue arise several times 
already this year when States affected by the early fire season 
requested and then released Federal firefighting resources 
similarly based solely on whether or not a Federal 
reimbursement was available.''
    I want to make sure I understand this. A State forestry 
organization has a fire. They order up Federal firefighting 
assets, say hand crews. The Forest Service or the DOI send the 
crews to the fire. Then because the State does not like the 
cost-sharing agreement that is imposed they release the crews 
to travel back to their home forests or districts without 
having helped to put out the fire. Is that correct?
    Ms. Scarlett. That is not quite the characterization of 
what we wanted to highlight. What we really have seen relates 
primarily to the prepositioning of resources rather than 
circumstances where fire suppression is under way and crews are 
arriving. In my testimony I referred, for example, to the 
prepositioning of a helicopter in Oklahoma that was done and 
the State requested that prepositioning when the indices showed 
the probability of high fire, and under that level of risk they 
were eligible for FEMA funding. We sent the helicopter, the 
indices changed, went down, the risk of fire went down, sent 
the helicopter back; the indices went back up, they again 
requested.
    Clearly this is something that none of us, including the 
State itself, want to have as a normal pattern. We are looking 
at both the frequency of that and what we can do to try and 
address that and prevent that from happening. But it only 
pertains to the prepositioning, not to the actual firefighting 
and the sending of crews at an actual fire.
    Senator Craig. Has this problem existed in other examples 
or the one you have used being the only one that you are aware 
of?
    Ms. Scarlett. We have seen several simple--several similar 
examples. But as this hearing was impending we began to send 
out and see how frequent this circumstance is and we do not yet 
have the resolution of that inquiry. It is certainly more than 
a one-time event, but how frequent it is we do not yet know.
    Senator Craig. Well then, I ask of you and Mark, in your 
examination of--and certainly Anne can be a part of this in her 
organization--is that a part of a consideration, the cost of 
prepositioning, of a Federal agency's responsibility to a 
resource that does not get used or is sent away because, as you 
have said, an indices changed and then changed again? Should 
there not be an understanding that when the indicators are 
there and a prepositioning is requested that there is a cost 
involved in it, or only at the time of its utilization?
    Costs are there. That helicopter is not an inexpensive 
item. Response? Yes, Anne?
    Ms. Heissenbuttel. I could address that, at least in part. 
I also did some looking into the situation and talked to the 
State forester of Oklahoma and the State forester of Texas 
because they were the ones who had the very busy early fire 
season this year. There have been some examples where the State 
has called on a resource, called in a resource, and due to a 
change in the weather or other circumstances they found they 
did not need it.
    But as far as I know, the State has covered those costs 
when they have called for the resource to be positioned or to 
be mobilized, and the demobilization cost as well.
    In the case of the example that Lynn cited, I do not have 
separate details on that, so I cannot give you any more 
information there. But I imagine that in that case, where FEMA 
had a share or was covering a share of the costs, then that was 
incurred by the Federal Government and the State was paying the 
other part of it. We are going to continue to look into it as 
well.
    Senator Craig. Well, I thank you, and you have already 
responded by saying there is an analysis going on. When that 
analysis is complete could you make that available for the 
committee?
    Mr. Rey. Sure.
    Senator Craig. I think we are curious about that because 
State folks look brilliant when the assets are there to fight 
the fire. At the same time, when they ask for those assets to 
be brought there is a cost, and there ought to be some reality 
as to how that cost gets allocated in which they would share, 
obviously because of their doing the responsible thing, 
preparing. But in some instances--that is the good news, bad 
news about a fire. You have to prepare for it, you have to 
build up all these assets, in hopes that it will never happen. 
At the same time, that is good insurance when it does. So thank 
you.
    Anne, I get a sense in reading your testimony that you 
think the new National Fire and Aviation Executive Board's 
templates will be a good deal for the States. In your 
estimation, what could and should the States be doing to 
decrease the cost of fighting fires in the wildland-urban 
interface?
    Ms. Heissenbuttel. Well, first I would say I think it is a 
fair deal for the States and the Federal agencies to use the 
new template. So I would change your wording there, as opposed 
to saying it is a ``good deal.''
    Senator Craig. All right.
    Ms. Heissenbuttel. But again, as I mentioned earlier, to 
deal with fires in the wildland-urban interface there are a lot 
of steps that States can and are taking to reduce those risks, 
to work with communities so that they will do more on their own 
to work with homeowners. Those are the FIREWISE and the 
community wildfire protection planning process that we have 
already talked about.
    To the extent that communities reduce their risk and 
firefighters have to spend less effort in protecting 
structures, I think that will help reduce costs. But the 
overall objective of those programs, FIREWISE and the community 
wildfire protection plans, is really to help reduce the losses.
    Cost is another issue. The cost containment proposals that 
the WFLC, the Wildland Fire Leadership Council, has been 
working on I think will help in the wildland-urban interface 
and outside the interface.
    Senator Craig. I would also like to know, given the GAO's 
reporting of what the States of Colorado, California, and Utah 
are doing to encourage citizens within the wildland-urban 
interface to manage fuels in those areas, what makes it so 
difficult for other States to take similar steps?
    Ms. Heissenbuttel. Well, I do not think that it is fair to 
assume that other States are not doing that. Those are three 
examples of what States are doing all over the country, and 
just to offer a few other examples, Florida has a very active 
FIREWISE program, as does Texas. In addition, in Florida they 
have laws, State laws, in place that allow the State forestry 
agency to do prescribed burning on lands where fuels have been 
untreated.
    In the Lake States, to use another example, Minnesota has a 
very aggressive FIREWISE program. In the West, Senator Wyden is 
not here, but Oregon has been a leader in helping communities 
to develop community wildfire protection plans and also to use 
FIREWISE within the State. Those are just examples. I think all 
the States are using those programs.
    Senator Craig. Well, thank you very much. Yes, I do not 
assume that others are not, because we have examples within the 
State of Idaho, although there is not statewide uniformity as 
it relates to these kinds of activities, and they are extremely 
important and they prove very successful.
    Ms. Heissenbuttel. Another difference from one end of the 
country to the other may be the degree to which States have 
voluntary measures that they are encouraging communities to use 
and States that have zoning measures and codes in place that 
require actions to be taken. That is something that at the 
national level we cannot control.
    Mr. Rey. But one other principal actor in this area is the 
private sector. Some of the larger insurance companies are now 
refusing to write policies unless homebuilders and homeowners 
are willing to apply certain common sense measures to make 
their dwellings more fire-safe.
    Ms. Scarlett. If I could just add to that, what we are also 
beginning to see is, in areas where we have done aggressive 
fuels treatment residents are seeing their insurance bills go 
down as that risk reduction is evident.
    Senator Craig. I guess one last question. Where there is a 
treatment program that has been completed, is there a 
recognition by either of the agencies involved here as to the 
success of that? Some recognition might be, if you will, a seal 
of approval that would trigger an insurance response, that 
might cause others to look at it and be encouraged to respond 
accordingly?
    Ms. Scarlett. That is a good idea. Right now I am not aware 
that the Department of the Interior has such a recognition.
    Senator Craig. I am not either.
    Ms. Scarlett. What we do do is to document each year in our 
annual report to the Congress on our fire plan implementation 
some examples of some successful fuels treatment. But no, I am 
not aware that we have a recognition like that. I think that is 
a good idea.
    Senator Craig. As you know better than I, we cannot afford 
to continue at the rate of increase that we are moving in. 
Complications of funding in either of your agencies in these 
areas are very real. Costs to State governments and local 
governments are very real. The only way to solve this problem 
is to trigger a variety of activities, from Healthy Forests to 
a very aggressive private sector initiative, where the private 
property owner in this new environment bears the costs and the 
responsibilities and there are rewards for doing it 
appropriately. That is why my thought of recognizing, if you 
will, with a seal of approval a successful activity might draw 
increased attention in the appropriate ways.
    We will continue to work with you and monitor this. We 
thank GAO for their work in the area. It is work in progress. 
We know it, because the environments in which we are working 
are changing pretty rapidly at the moment and it cannot be 
static. It needs to be dynamic. At the same time, it needs very 
clear indices of all the parties who are involved in it to work 
from and work with.
    So we thank you all very much for your time with the 
committee today. The committee will stand adjourned.
    [Whereupon, at 3:52 p.m., the hearing was adjourned.]

                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

   Responses of Hon. Dirk Kempthorne to Questions From Senator Craig

    Question 1. Are you as comfortable with those draft agreements as 
Ms. Heissenbuttel seems to be?
    Answer. The Federal agencies and the National Association of State 
Foresters (NASF) have worked on many agreements over the years, and 
history has shown repeated success resulting from our efforts in 
coordinating and collaborating to achieve common goals.
    Question 2. When will this template be released? Please provide an 
approximate date.
    Answer. The template and associated Memorandum of Understanding 
with the National Fire and Aviation Executive Board, the entity 
responsible for guiding implementation of fire management policy, 
should be released this fall.
                                 ______
                                 
       Responses of Robin Nazzaro to Questions From Senator Craig

    Question 1. It is clear from the report that GAO and some federal 
land managers feel local communities should do more to develop 
landscape rules and zoning rules to treat fuels around houses and in 
the Wildland-Urban Interface. At the same time, local and State 
entities feel the federal government should shoulder more 
responsibility for paying for the fires because they have failed to 
treat the hazardous fuels on federal lands that contribute to the 
spread of wildland fires from federal land to non-federal land.
    Did your investigators collect any data that might help us 
understand the added expense of fighting these fires due to the 
inability of the Federal and local communities to effectively manage 
the fuels within the Wildland-urban interface and on nearby federal 
lands?
    a. If No--would GAO be able to develop a study and collect such 
data?
    Answer. We did not collect data during our review that specifically 
addresses the effect that hazardous fuel conditions may have on 
wildland fire suppression costs. However, both federal and nonfederal 
fire officials told us that they believe excessive fuels were 
contributing to more extreme fire behavior and making it more difficult 
and expensive to suppress fires. Although we have not conducted any 
preliminary design work on this issue, based on our current 
understanding, we believe it would be difficult for GAO to conduct a 
study that isolates the effect of fuel conditions on suppression costs 
because existing fire cost data are inadequate for this purpose.
    While fuel buildup is undoubtedly an important contributor to 
escalating fire suppression costs, expanding development in the 
wildland-urban interface is also playing a major role. Also, it is 
important to note that many fires start on state and private lands. In 
the end, the federal government, state and local governments, and 
private owners all share responsibility for reducing the risk and costs 
of wildland fire suppression.
    Question 2. How did GAO consider state and local government 
authorities in writing the report?
    Answer. To understand state and local government authorities for 
the four states we visited, we reviewed laws related to wildland fire 
suppression, building and vegetation codes, and land-use planning. We 
also interviewed state--and, in some cases, local--officials from these 
four states to gain a better understanding of their laws.

      Response of Robin Nazzaro to Question From Senator Bingaman

    Question 1. Mr. Rey testified that improving the cost-sharing 
template has been a relatively low priority for the Administration 
because it does not affect the total costs of fire suppression--rather, 
it only affects how the total costs are allocated. Does the GAO agree 
that more clearly defining federal and nonfederal financial 
responsibilities is likely to have no affect on the total costs of fire 
suppression? Have any of the previous studies that GAO reviewed 
addressed whether improving cost-sharing practices could play a role in 
over-all cost-containment?
    Answer. Providing more specific guidance on how federal and 
nonfederal entities should share suppression costs directly affects how 
costs are allocated, but also could have an effect on total suppression 
costs, although quantifying the effect would be difficult. For example, 
a number of federal officials we interviewed said that state and local 
officials sometimes request more resources than federal officials 
believe are needed to effectively fight a fire, particularly if the 
fire threatens the wildland-urban interface. Federal officials believed 
that state and local officials would be less likely to request unneeded 
resources if they knew that they would have to pay for them. In its 
official comments on our report, the Department of the Interior also 
made a similar observation. None of the previous reports we reviewed 
addressed the effect of cost sharing on overall suppression costs.

      Responses of Robin Nazzaro to Questions From Senator Salazar

    Question 1. Can you tell me about the participation of local and 
state governments in the formation of GAO's recommendations?
    Answer. We developed our recommendations based upon findings 
developed through discussions with a wide range of knowledgable 
officials, including officials of state and local governments and 
organizations. To understand state and local perspectives on how costs 
are shared, including any concerns that they may have, and to better 
understand differences among states and localities, we interviewed 
state and local officials at various levels of authority in the four 
states we visited. We also interviewed representatives from the 
National Association of Counties and the Western Governors' 
Association. Finally, we provided the National Association of State 
Foresters the opportunity to review a draft of our report and included 
its comments in the final report. Also, as noted in our report, we 
believe it is important that the Secretaries of Agriculture and the 
Interior work in conjunction with relevant state entities to implement 
our recommendation that they provide more specific guidance on how 
costs should be shared and to define financial responsibilities for 
fires that burn, or threaten to burn, across multiple jurisdictions.
    Question 2. In my opening statement I referred to a few principles 
that I feel are common-sense. Those were: don't place land managers in 
a position where they are reluctant to order needed resource because of 
a question of who will pay; guidance to the field needs to avoid being 
rigid guideline that take away flexibility and; fairness to local 
entities. Do these principles differ from GAO's recommendations or the 
intent of those recommendations?
    Answer. In general, we believe that our recommendations are 
consistent with your principles. The intent of our recommendations is 
that federal and nonfederal entities clarify how they share suppression 
costs, not that they change the way in which they are working together 
to fight wildland fires. We believe that providing more specific 
guidance on cost sharing and clarifying the financial responsibilities 
for suppressing fires will help reduce uncertainty about which entities 
are responsible for certain costs. We agree that a certain amount of 
flexibility is needed; however, we also believe that guidance to the 
field should give a clear indication of the cost-sharing method that 
should be used for wildland fires with different characteristics. Such 
guidance can provide flexibility, for instance, by including provisions 
to use a different cost-sharing method if all parties agree that the 
circumstances warrant it. Without clearer guidance, the concerns 
identified in our report--such as the difficulties in reaching cost-
sharing agreements that all parties believe are equitable and that the 
federal government may be treating different states differently, 
thereby creating inequities are likely to continue. Finally, we believe 
that methods used to share costs should be fair to all entities 
involved local, state, and federal.
                                 ______
                                 
    Response of Anne Heissenbuttel to Question From Senator Bingaman

    Question 1. Does the National Association of State Foresters 
believe that a non-federal entity's ability to pay should be a 
consideration in formulating a cost-sharing agreement?
    Answer. No. The unique statutory responsibilities of the respective 
federal, state, and local agencies, and the specific fire suppression 
strategies and tactics employed to control the fire should determine 
the appropriate cost-share agreement. A ``one size fits all'' national 
format for cost-share agreements won't work, precisely because there is 
a great deal of variation in the state and local legal authorities and 
responsibilities with respect to fire protection, and even greater 
variation in fire characteristics and suppression actions.

   Responses of Anne Heissenbuttel to Questions From Senator Salazar

    Question 1. In my opening statement I referred to a few principles 
that I feel are common-sense. Those were: don't place land managers in 
a position where they are reluctant to order needed resources because 
of a question of who will pay; guidance to the field needs to avoid 
being a rigid guideline that takes away flexibility; and fairness to 
local entities. In your view, do these principles differ from GAO's 
recommendations or the intent of those recommendations?
    Answer. Yes. Senator Salazar's principles are indeed common sense. 
NASF is concerned that GAO's recommendations and intent to ``provide 
more specific guidance as to when particular cost sharing methods 
should be used'' would not allow sufficient flexibility to field 
managers to make decisions in advance of a fire or to make adjustments 
to an agreement as needed during a wildland fire.
    In addition, we believe that GAO's recommendation that the 
Secretaries should ``clarify the financial responsibilities for 
suppressing fires that burn, or threaten to burn, across multiple 
jurisdictions'' could result in situations where the federal agencies 
establish a requirement that a state or local firefighting entity 
cannot meet, due to state and local laws and regulations. The latter 
scenario could force land managers to refuse to order needed resources 
because of legal constraints on what costs the manager is authorized or 
obligated to incur.
    The federal responsibility, including the financial responsibility, 
is clear: to prevent fires that are burning on federal lands from 
burning onto adjacent non-federal lands. Any attempt to redefine or 
shift these federal responsibilities, and costs, to others, now or in 
the future, would be unfair to local entities.
    Question 2. How does your association envision the application of 
guidance for cost sharing among different entities working in the 
field?
    Answer. The guidance we have drafted with the federal agencies 
would be applied much as it is today. Local agency administrators, who 
are familiar with the specific fire suppression strategies and tactics 
used to control a particular fire, and who are familiar with their 
particular responsibilities and authorities, will negotiate mutually 
agreeable cost-share agreements for each individual fire. The cost-
share guidance found in the soon to be completed National Template for 
Master Agreements will provide federal, state, and local agency 
administrators with several alternative procedures to consider when 
deciding on the most appropriate method for sharing fire suppression 
costs.
                                 ______
                                 
    [Responses to the following questions were not received at 
the time this hearing went to press:]

               Questions for Mark Rey From Senator Craig
    I am very interested in the questions of uneven application of the 
cost-sharing methodologies. It seems to be one of the few areas in the 
study where some federal officials seemed to agree with some nonfederal 
officials.

    Question 1. Has the agency reviewed past billings and final 
agreements to assess whether or not the range of variability found in 
these billings is within an acceptable range?
    The report mentions that the National Fire and Aviation Executive 
Board is developing a template for both master and cost-sharing 
agreements.
    Question 2. So you believe that it will address some, all, or any 
of the issues surfaced in this report?
    Question 3. When will this template be released? Please provide an 
approximate date.
    In the hearing you indicated that the Forest Service has, and is 
taking responsibility for fires that burn off federal lands onto 
private lands.
    Question 4. Does that include taking responsibility for paying for 
the fire fighting that must be undertaken by State and Local agencies 
as a result of the fires that escape containment on the federal lands?

              Questions for Mark Rey From Senator Salazar

    Question 1. Whenever we get the chance to talk, it seems like I am 
always asking what more can the USFS can do to help Colorado address 
the bark beetle and drought situation as it relates to forest health 
and hazardous fuels. Has the USFS identified any additional funding 
(beyond the $500,000 from earlier this year) that could be utilized by 
the local forests to conduct priority hazardous fuel treatments or 
further the work of local cooperative organizations working on this 
situation?
    Question 2. In your view, is increasing the amount of funding for 
forest health and hazardous fuel reduction projects an investment that 
could reduce the expenditure of funds for suppressing fires?

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