U.S. GOVERNMENT PRINTING OFFICE

68–240 CC WASHINGTON : 2001

S. HRG. 106–785

THE U.S. FOREST SERVICE:

TAKING A CHAIN SAW TO SMALL BUSINESS

HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

OCTOBER 4, 2000

(

Printed for the Committee on Small Business

For sale by the Superintendent of Documents, Congressional Office

U.S. Government Printing Office, Washington, DC 20402

(II)

COMMITTEE ON SMALL BUSINESS

ONE HUNDRED SIXTH CONGRESS

CHRISTOPHER S. BOND, Missouri, Chairman

CONRAD BURNS, Montana

ROBERT F. BENNETT, Utah

OLYMPIA J. SNOWE, Maine

MICHAEL ENZI, Wyoming

PETER G. FITZGERALD, Illinois

MIKE CRAPO, Idaho

GEORGE V. VOINOVICH, Ohio

SPENCER ABRAHAM, Michigan

VACANCY

JOHN F. KERRY, Massachusetts

CARL LEVIN, Michigan

TOM HARKIN, Iowa

JOSEPH I. LIEBERMAN, Connecticut

PAUL D. WELLSTONE, Minnesota

MAX CLELAND, Georgia

MARY LANDRIEU, Louisiana

JOHN EDWARDS, North Carolina

EMILIA DISANTO, Staff Director

PAUL COOKSEY, Chief Counsel

PATRICIA R. FORBES, Democratic Staff Director and Chief Counsel

(III)

CONTENTS

OPENING STATEMENTS

Page

Enzi, The Honorable Michael B., a United States Senator from Wyoming ........ 1

Crapo, The Honorable Michael D., a United States Senator from Idaho ........... 9

Burns, The Honorable Conrad, a United States Senator from Montana ............ 20

WITNESS TESTIMONY

Thomas, The Honorable Craig, a United States Senator from Wyoming ........... 24

Craig, The Honorable Larry, a United States Senator from Idaho ..................... 26

Hurst, Jim, President, Owens & Hurst Lumber, Co., Inc., Eureka, Montana ... 28

Bousman, Joel E., Cattle Rancher, Boulder, Wyoming, and Regional Vice

President, Wyoming Stockgrowers Association, Casper, Wyoming ................. 36

Tinsley, Del, Owner/Publisher, Wyoming Livestock Roundup, Casper, Wyoming, and Member, Advisory Board, University of Wyoming College of

Agriculture, Laramie, Wyoming .......................................................................... 48

Bukowsky, Al, Owner/Operator, Solitude River Trips, Salmon, Idaho ............... 159

Van Tassell, Larry W., Professor and Head, Department of Agricultural Economics and Rural Sociology, University of Idaho, Moscow, Idaho ................... 182

McKillop, William, Professor Emeritus, College of Natural Resources, University of California-Berkeley, Berkeley, California ............................................... 190

Furnish, James R., Deputy Chief, National Forest System, Forest Service,

U.S. Department of Agriculture, Washington, D.C. .......................................... 201

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Bousman, Joel E.

Testimony .......................................................................................................... 36

Prepared statement .......................................................................................... 38

Bukowsky, Al

Testimony .......................................................................................................... 159

Prepared statement .......................................................................................... 165

Burns, The Honorable Conrad

Opening statement ........................................................................................... 20

Prepared statement .......................................................................................... 22

Craig, The Honorable Larry

Testimony .......................................................................................................... 26

Crapo, The Honorable Michael D.

Opening statement ........................................................................................... 9

Prepared statement and attachment .............................................................. 11

Post-hearing questions posed to Mr. Furnish ................................................ 212

Enzi, The Honorable Michael B.

Opening statement ........................................................................................... 1

Prepared statement .......................................................................................... 4

Post-hearing questions posed to Mr. Dombeck .............................................. 210

Furnish, James R.

Testimony .......................................................................................................... 201

Prepared statement .......................................................................................... 203

Hurst, Jim

Testimony .......................................................................................................... 8

Subsequent submission for the record ............................................................ 35

McKillop, William

Testimony .......................................................................................................... 190

Prepared statement .......................................................................................... 197

Page

IV

Thomas, The Honorable Craig

Testimony .......................................................................................................... 24

Tinsley, Del

Testimony .......................................................................................................... 48

Prepared statement and attachment .............................................................. 54

Van Tassell, Larry W.

Testimony .......................................................................................................... 182

Prepared statement .......................................................................................... 185

COMMENTS FOR THE RECORD

Cook, Adena, Public Lands Director, Blue Ribbon Coalition Inc., Idaho Falls,

Idaho, letter .......................................................................................................... 216

Eaton, The Honorable Craig D., Mayor, Town of Eureka, Montana, letter ........ 220

Finch, Wayne, Rexford, Montana, letter ................................................................ 222

Johnson, Shirley May, Fortine, Montana, letter ................................................... 224

Kvenild, J.R., Broker, Western Land Service, Casper, Wyoming, letter ............. 229

Marvel, The Honorable Bill F., Mayor, Town of Rexford, Montana, letter ......... 230

Panek, Jerry, Owner, Predator 4WD, LLC, Colorado Springs, Colorado, statement ...................................................................................................................... 231

Radish, Danny, Eureka, Montana, letter ............................................................... 236

Thoman, Mary E., Thoman Ranch—Southwestern Wyoming Ranchers,

Kemmerer, Wyoming, statement ........................................................................ 237

Safari Club International, Herndon, Virginia, statement .................................... 238

Taylor, David T., and Roger H. Coupal, Cooperative Extension Service, College of Agriculture, Department of Agricultural and Applied Economics,

University of Wyoming, Laramie, Wyoming, statement and attachment ....... 242

West, Rosetta, Eureka, Montana, letter ................................................................ 250

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THE U.S. FOREST SERVICE:

TAKING A CHAIN SAW TO SMALL BUSINESS

WEDNESDAY, OCTOBER 4, 2000

UNITED STATES SENATE, COMMITTEE ON SMALL BUSINESS, Washington, D.C.

The Committee met, pursuant to notice, at 9:35 a.m., in room

SR–428A, Russell Senate Office Building, the Honorable Michael

Enzi presiding.

Present: Senators Burns, Enzi, and Crapo.

OPENING STATEMENT OF THE HONORABLE MICHAEL B. ENZI,

A UNITED STATES SENATOR FROM WYOMING

Senator ENZI. I will call to order this meeting of the United

States Senate Committee on Small Business. The topic today is the

U.S. Forest Service: Taking a Chain Saw to Small Business. I

would like to thank Chairman Bond and his staff for their tremendous help in making this hearing possible. Through his Committee’s leadership we hopefully will be able to shed new light on the

workings of the U.S. Forest Service and will be able to begin the

necessary steps to increase the agency’s accountability to American

small businesses.

I am looking forward to hearing what the participants will have

to say today. I feel they have important stories that for far too long

have been pushed aside in the rush by many national organizations

to dominate public policy on Federal Public Lands.

As a former small business owner myself, I can personally attest

to the huge impact the Forest Service can have on the economies

of Wyoming and on other western communities—on our homes, our

schools, the communities that are built in and around the forest.

Our income often depends on being able to access these lands in

order to harvest trees, minerals, natural gas, and other important

resources. We use the forests to heat our homes, to graze our sheep

and cattle, and for visitors.

At the same time, one of our Nation’s best resources for restoring

forest health, the private small business sector, has been effectively

shut out and denied access to their own public lands. Over the last

decade Federal timber harvests nationwide have decreased by 75

percent.

Now I hear the statistics about how much money comes in from

recreation and how much less the money is that comes in from timber. We used to do both of those. We used to get the revenue from

both of those, but there has been a 75-percent decrease in one of

them. Because most of the larger, more successful forest products

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companies rely on their own private source of timber, the decrease

in timber sales has directly impacted small, family-owned and operated companies. And while this important source of timber has

consistently dwindled, the demand for wood in the United States

has continued to increase.

The near elimination of Federal timber harvest in the West has

created a void in the market that has been filled by two main

sources: timber harvested on private lands in the Southeast United

States and lumber imported from Canada and other foreign countries. We are probably eliminating some important animals in

other countries.

As a result of this trend, private landowners in the Southeast are

now overharvesting in order to meet the current demand for wood

products, and imports from Canada now exceed 35 percent of our

domestic lumber supply. Once again it is the small logging, hauling

and sawing companies that have not been able to involve themselves in these new market sources.

The same effect can be felt in other industries as the Forest

Service continues to substitute paperwork for land management.

Ranchers who lose vital grazing leases find themselves with no remaining recourse but to subdivide and sell their third-generation

ranches to developers so that urban sprawl has taken the place of

elk and antelope.

Other witnesses will discuss the impact on recreation and how

the Forest Service is shutting down outfitters and guides. We will

even hear how this agency has impacted the publishing industry by

forcing the price of paper to jump dramatically in just the past

year.

Could all of these threats have been avoided? No. There are always risks in any business, but while most businesses have control

over at least some of the elements of their success or failure, those

small businesses that are forced to work with the U.S. Forest Service too often have found themselves on the outside of any planning

process that could affect their future.

One prime example that I believe demonstrates the Forest Service’s serious neglect of small business involvement can be found in

the way the agency has painfully avoided complying with the Regulatory Flexibility Act, or RFA, in the development of its Proposed

National Forest System Land and Resources Management Plan,

the Forest Transportation System Administration, and in Roadless

Area Conservation regulations.

Over the past several years the General Accounting Office and

the Forest Service have worked to assess the Forest Service’s inefficiencies and lack of accountability as it manages our National Forests. Together, these agencies have identified a weak decisionmaking process and failure by the Forest Service to develop the

strategic long-term goals.

One would think that an agency, struggling like the Forest Service is to develop an adequate planning process and to increase its

accountability and performance, would embrace a statute like the

Regulatory Flexibility Act. The RFA clearly lays out an analytical

process for determining how to best achieve public policy objectives

without unduly burdening small businesses.

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The Forest Service, however, has gone out of its way and has

performed all sorts of regulatory gymnastics to keep small businesses out of its decisionmaking process. I believe the Forest Service has attempted to twist the law and to abdicate its responsibilities under RFA by dividing or bifurcating its rulemaking process

so that its rules fall within two allowable exceptions to completing

a Regulatory Flexibility Analysis.

It was not the intention of Congress to allow Federal agencies to

use bureaucratic rulemaking equivocation to circumvent its duties

to small business. When Congress established the RFA, it did so

with the goal that small businesses have a voice in the rulemaking

process so that those who could least afford the layer upon layer

of regulatory burdens could help find a less onerous method of accomplishing the agency’s goals.

I will not place all of the blame for this situation on this agency,

but must state that if the agency is operating within its legal

bounds to twist the process so that it can ignore its small business

constituents, then I believe Congress should step forward to amend

the RFA to close any loophole that may exist. It was not our intention for the Forest Service to be unaccountable and we must ensure

that this situation is corrected.

I would argue, however, that the U.S. Forest Service is accountable and that the agency is failing in its statutory duties under the

RFA to consult with small businesses in the development of its

rules and regulations, and that the Forest Service has failed to further comply with the statute by failing to develop less onerous alternatives that do not sacrifice economic stability. You may be assured I will investigate this issue further.

In closing, I must state that I do not believe a healthy forest and

a healthy economy are mutually exclusive. In fact, I would go so

far as to say that healthy forests and healthy economies are interdependent and that without a strong local economy, the U.S. Forest

Service will find itself unable to meet the demands that will be

placed on the agency in the next century.

[The prepared statement of Senator Enzi follows:]

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Senator ENZI. I defer to Senator Crapo.

OPENING STATEMENT OF THE HONORABLE MICHAEL D.

CRAPO, A UNITED STATES SENATOR FROM IDAHO

Senator CRAPO. Thank you very much, Chairman Enzi, and I

have a full statement which I will submit for the record and I will

try to make my remarks brief.

I thank the Small Business Committee and Chairman Bond for

allowing this important issue to be addressed before this Committee. It may be unusual for many people to see the Small Business Committee examining forest policies but as you will see today,

there is a very direct impact and a critical issue that is now very

evident.

We know that, in the past, the Forest Service policies have had

a negative impact on small businesses throughout the Nation. It is

my hope that, through efforts such as this hearing and others, the

Forest Service can be made accountable for fulfilling its mission

while allowing interested stakeholders to effectively participate in

the policymaking process.

In Idaho we have more than 20-million acres of National Forest

land, which is 10 percent of the National Forest System. Everytime

that the Forest Service issues and carries out a proposal, businesses in Idaho will be affected. There is no way around that.

But what we can strive for is a process whereby the Forest Service actively engages those people who are affected by its land

management policies in order to foster active environmental stewardship of our public lands and resources without harming the

economy.

Today that type of cooperation between the Forest Service and

the small businesses is absent. As stated in the Small Business Administration’s Office of Advocacy statement on July 17, 2000, to the

Forest Service which, Mr. Chairman, I would like to submit for the

record:

The public has an interest in knowing the potential economic impact of a particular proposed regulation. . . . Providing the public with a complete economic

analysis that fully discloses the potential impact of the action and considers less

burdensome alternatives not only complies with the requirements of the RFA, it also

complies with the basic tenets of sound public policy that balance conflicting interests.

The Federal Regulatory Flexibility Act, the RFA, of 1980 which

was later strengthened by the passage of the Small Business Regulatory Enforcement Fairness Act of 1996, directs government agencies to conduct a series of analyses describing the impact of a

proposed rule if it will have a significant economic impact on a substantial number of small entities.

As a result, agencies must determine whether a rule is expected

to have a significant economic impact on small businesses. It is apparent that the Forest Service has repeatedly acted in a manner

that contradicts the law of the land. It has failed to adequately and

accurately account for the direct or indirect financial or other effects that a proposed action would have on small businesses.

For example, on May 10, 2000, the Forest Service published a

proposed rule on Roadless Area Conservation. Unbelievably, the

Forest Service has argued that this proposed rulemaking would not

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have a significant economic impact on a substantial number of

small businesses and therefore that it is not required to comply

with the requirements of the Small Business Regulatory Enforcement Fairness Act.

Again citing the Office of Advocacy’s letter to the Forest Service, ‘‘case law and the facts support a finding that the impact of the

proposal is indeed direct, not indirect,’’ as the Forest Service argued. Therefore, the RFA necessitates total compliance by the Forest Service.

In this example, the Forest Service’s Initial Regulatory Flexibility Analysis did not adequately address the issue of economic impact. A full, detailed economic analysis of the impact of the Forest

Service’s policies should be completed prior to the finalizing of any

such proposals.

This roadless proposal reaches far and wide, but other policies

pursued by the Forest Service challenge the resolve of small businesses on a daily basis. Among many others, the recreation, timber,

logging, ranching and mining industries have been imposed upon

with the onerous burden of defending themselves against these

rules.

From national policies such as the roadless rule, draft transportation plan, strategic plan, and the cost recovery rule, to regional

and local plans, the Forest Service is showing a disregard for the

impact of its policies on small businesses. The Federal Government

has an obligation to ensure that its policies will not have an unwarranted effect on individuals. The Forest Service is not meeting

that obligation.

Although the Forest Service may contend that many of its policies are a result of other environmental laws like the Endangered

Species Act or the Clean Water Act, I disagree. Closing access may

be the easiest way to comply with outside factors, but it is not the

right way to do it. It may take more effort but the Forest Service

should and can work together with interested parties to address

both environmental and economic concerns.

I want to thank the witnesses for your participation in this hearing and look forward to your testimony. Your input based on your

personal experiences will be particularly helpful as we further investigate this issue.

I also want to thank Senator Craig and Senator Thomas for their

participation in this hearing. As chairman of Senate Subcommittees, which have jurisdiction over these issues, I look forward to

their insight on these issues. Thank you, Mr. Chairman.

[The prepared statement and attachment of Senator Crapo follow:]

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Senator ENZI. Senator Burns.

OPENING STATEMENT OF THE HONORABLE CONRAD BURNS,

A UNITED STATES SENATOR FROM MONTANA

Senator BURNS. Thank you very much, Mr. Chairman. I want to

thank Senator Thomas and Senator Craig for coming this morning.

We sit together on the Energy and Natural Resource Committee

and of course our dialog with the Forest Service is ongoing about

every time we have a Committee hearing.

Just to give you an idea on how the relationship between Congress and the Forest Service and also the local people that live in

communities in and around our National Forests has deteriorated,

yesterday in Interior Appropriations we eliminated the funds for

the second time for the assistant secretary of agriculture that is in

charge of the Forest Service, and for good reason. It is just an indication of the erosion in the communications between the Forest

Service that is here in this town and the foresters on the ground

in our different communities.

I believe it is vitally important that we focus specifically on how

these policies that are set by the Forest Service are hurting our

businesses in and around our forests.

Whenever there is a change proposed for the use of public land,

we always have to do an EIS, an environmental impact statement.

Well, we can turn environmental into economic and that is going

to have to be done, too, in order to give an overall view of the effects these decisions have on this country.

People are being put out of work and today we are going to see

real people with real faces that have real concerns about their businesses and the people who work in those businesses.

We are small businesses in Montana. Ninety-nine percent of our

businesses in Montana are 100 employees or less. So we know what

it is like. New rules have reduced the amount of timber harvested

from our public lands by over 90 percent in the last 10 years. New

rules have blocked new roads from being built. New rules have reduced grazing allotments on public lands. The current rules have

punished our outfitters and guides and left them with virtually no

economic stability.

I want to give you an example and it is sitting right here. This

is from a tree that lies 50 feet off the road. It is dead. It died of

pine bark beetle and there are thousands and thousands of board

feet available within a rope’s throw of a road that can be harvested

to keep our mills alive and lumber flowing for our consumers.

There have been no plans, none at all, no effort made by the Forest Service in order to deal with this situation. And this log, this

piece, comes from just a few miles from where American Timber

shut down their mill this last year. It went out of business early

this year and now we have another mill that is not very far away

from it that is cutting back on their employees.

This is letting a natural resource just go to waste. Not only do

we not have access to the resource but also our infrastructure and

the base of employees has also eroded and pretty soon those folks

will be gone.

So I will submit my full statement, Mr. Chairman. I am glad

that Jim Hurst is here today from up in Eureka country. I promVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00024 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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ised him one thing, that we would have him out of here so he

would be home to watch his son play football on Friday night, and

we are going to do that.

I thank you for having this hearing and my congratulations to

Senator Bond for facilitating it.

[The prepared statement of Senator Burns follows:]

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Senator CRAPO. So this hearing is going to go till Friday afternoon?

Senator BURNS. Yes, we are going to be here until we get it all

ironed out. Did you bring a lunch?

Senator ENZI. I want to thank everybody who is participating

today. I particularly want to thank this first panel, our distinguished colleagues from the committee of jurisdiction. We are handling a very small part of the issue, the small business issue. Of

course, in each of your States small businesses actually, by Federal

definition, would probably be about 98 percent of the businesses, so

it is not that small a part of the economy. We have a lot of discussions in this Committee here about what small business is and 500

employees seems pretty big to us in Wyoming.

It is my pleasure to welcome the Senior Senator from Wyoming,

Senator Thomas, and the Senior Senator from Idaho, Senator

Craig. Senator Thomas, would you like to begin?

STATEMENT OF THE HONORABLE CRAIG THOMAS, A UNITED

STATES SENATOR FROM WYOMING

Senator THOMAS. All right, Mr. Chairman. Thank you.

First of all, I want to thank you for having this hearing. I appreciate it very much. All of us are concerned, of course, about these

issues and the impacts that Forest Service policy has on small

business and indeed on all we do in our States.

Both Senator Enzi and Senator Craig and I were in Billings,

Montana, with Senator Burns recently and heard these kinds of

things very directly as they related to the fire damages, and so on,

so I think it is great to do this.

Obviously all of us are concerned about this issue. The preservation of the resource is, of course, very high on all of our agendas.

I grew up right outside the Shoshone National Forest in Cody, Wyoming, and I am very glad the forest is there and I want to work

to protect it the best that I can. Certainly the first purpose is to

do that but the second is to allow the owners of that forest to participate in it, to enjoy it, to have access to it, and I think that is

really what we are talking about here.

This administration has moved steadily toward cutting off access.

Whether it is the EPA, whether it is the White House Council on

Environmental Quality, whether it is the Department of the Interior, whether in this case it is the Department of Agriculture, I

think clearly there has been an overt movement to reduce access

to these lands.

All of us here this morning, of course, understand the importance

of public land access. In our State 50 percent of the State belongs

to the Federal Government. It is higher than that in some of your

States. So it has a great deal of impact on all of us and what we

do and on our economy, of course.

We recognize that these lands are in different Federal ownership

categories. I happen to be chairman of the National Parks Subcommittee. Park lands are operated differently. We have wilderness areas that are operated differently. But the point I want to

make is that many national forest lands are multiple use lands and

that is what they were designed to be and indeed can be if they,

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I think, if they are managed properly. I am talking about hunting,

hiking, visiting.

You know, it was interesting when the roadless proposal came

up, the kinds of people that you heard from. You would think first

of all it might be those who had direct economic interest, and so

on. Not so. For example, we had veterans associations concerned

about how people with handicaps were going to be able to visit

their forests and those kinds of things. So I think the impact is

very broad and it is very important to consider how best to manage

these resources.

I think the policies from the Forest Service certainly need some

review. We have sought to do that. Since 1998 the agency has proposed a number of management regulatory changes. Just to name

a few, the National Forest System Road Management and Transportation System Policy—that is all one title. Forest planning regulations, roadless area reviews, Strategic Plan for Government Performance and Results Act, final interim rule on roadless areas, fuel

reduction policy, draft environmental impact statement for Interior

Columbia Basin, ecosystem management project, cost recovery for

special use applications, unified Federal policy for insuring a watershed approach to Federal lands, to name a few. And I think one

of the difficulties is that these have not always been related to one

another and worked in a cooperative kind of way but have sort of

been thrown out there.

I was particularly, I guess, impressed and negatively impressed

with the roadless proposal. This policy came from Washington in

kind of an announcement to apply to all lands. At the same time,

each of the forests has their own forest study, which they do periodically for their own forest plan, which would have been the logical way to take a look at roadless areas but, instead, that was declared from here. We went to the meetings. I went to some of the

meetings that people were interested in. There were really no detail available to the people who came to a so-called hearing and

they had no chance to really react.

So these are the kinds of things that I think ought to be changed.

I believe these policies have been largely implemented and run by

the assistant secretary over in the Department of Agriculture—not

by the professional foresters—and that is too bad. Small businesses

are involved, of course, in recreation, in tourism, in guiding and

hunting and ranching and forestry, mineral exploration, all these

kinds of things, which are very important to our economy.

So Mr. Chairman, I do think all of us need to take a look at how

we can better implement Forest Service policies, how we can take

some of the regulatory burden off small business, how we can provide more access to these public lands for the various kinds of uses

and, at the same time, protect the resources.

I appreciate what you are doing and thank you for the opportunity to be here.

Senator ENZI. Thank you.

Senator Craig.

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STATEMENT OF THE HONORABLE LARRY CRAIG, A UNITED

STATES SENATOR FROM IDAHO

Senator CRAIG. Chairman Enzi, thank you very much. Let me

also thank Senator Crapo and Senator Burns.

I also want to commend Chairman Bond for allowing the Small

Business Committee to hold these hearings on the role of the U.S.

Forest Service in dealing with small business. I am especially

pleased to be joined here at the table this morning with Senator

Craig Thomas, who has played an active role with me, as has Senator Burns, on a variety of committees that have jurisdiction over

the U.S. Forest Service.

Since 1995, I have chaired the Subcommittee on Forest and Public Land Management of the Committee on Energy and Natural Resources, Mr. Chairman. That Subcommittee has primary jurisdiction over the programs and operations of the U.S. Forest Service.

During the 104th Congress and in the current Congress, I also

chair the Subcommittee on Forestry, Conservation, and Rural Revitalization of the Committee on Agriculture, Nutrition, and Forestry. So I have had the opportunity, as chairman of those two

Subcommittees, to look at the broad jurisdiction and also the narrow focus that we have given to the U.S. Forest Service.

During those chairmanships I and many of you have joined with

me, have held over 100 oversight hearings on the programs and polices of the U.S. Forest Service. As it relates to the interests of this

Committee and the subject of this hearing, our oversight record

suggests two fundamental conclusions.

First, the U.S. Forest Service is likely the single most important

agency affecting small businesses in the rural areas of my State

and all of your States and most of the western States of the United

States. The Forest Service’s programs and policies essentially determine the success or failure of logging, road maintenance and

other land management service contractors. The Forest Service basically controls the marketplace for recreation outfitters, hunting

and fishing guides, visitor concessionaires and resort owners dependent upon the use of the national forests. The economic health

of small service establishments in public lands dependent communities is inextricably tied to the national forests and the surrounding area.

In short, while other Federal agencies like the Small Business

Administration have programs to help these businesses, the Forest

Service determines the future of these businesses.

My second conclusion is that there is not an agency in the Federal Government that is less sensitive to the needs of small business. The Forest Service operates in a milieu of constant conflict

among powerful, national interest groups over resource management direction and priorities. Small business entities are poorly organized, diverse in their views, and generally are ignored in the ongoing debate.

Worse, the Forest Service has moved actively to minimize and,

in some cases, even eliminate the limited opportunities and considerations that other Federal agencies routinely afford small business

interests to access and influence their programs.

For example, the agency has taken the position that its land and

resource management plans are not agency rules subject to the reVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00030 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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quirements of the Small Business Regulatory Enforcement Fairness Act. The Forest Service persists with this unlawful and exclusionary position notwithstanding clear case law to the contrary.

Clearly, the agency is of the view that it is up to small business

to petition the court to force the Forest Service to meet its obligations under the law.

Further, to say that the Small Business Impact and Regulatory

Flexibility Act analyses accompanying Forest Service rulemakings

are cursory would be to award the agency an unintended compliment. These analyses are typically nonexistent. I have not reviewed a single Forest Service rule over the past 5 years which

contained an analysis of this sort which could withstand judicial

scrutiny. But here again, the agency is depending on the limited

means of small business to seek judicial intervention to correct a

constant pattern of lawlessness.

Any reasonable effort to complete these analyses would easily

highlight problems created for small business. For example, in the

case of recreational outfitters, the Forest Service has regulations

which severely constrain the ability of these small businesses to operate in a reasonable business environment. Many visitors to the

public lands would not be able to enjoy them without the assistance

of outfitters and guides. The outfitters who provide important guide

services to visitors to our National Forests are required to have a

permit and to pay a share of their revenues to the Federal Government. But these small businesses are not offered permits on a reasonable, long-term basis. Rather, they must expend the time and

energy to secure their permit on an annual basis, subject to revocation at any time. You can imagine the impact such regulations

have on outfitters and guides when they try to get a loan to buy

new equipment or to sell their small businesses.

Perhaps most troubling have been the reports that, through programs like the Recreation Fee Demonstration Program, the Forest

Service has attempted to supplant small businesses with government enterprises. The Recreation Fee Demonstration Program is a

pilot effort which allows the Forest Service to charge recreation

user fees for some sites and retain those fees for agency purposes.

We have received a number of complaints from concessionaires that

the Forest Service is using this authority to drive their businesses

away from the most popular Forest Service recreational sites so

that they can be managed for the agency’s financial gain instead

of the concessionaire or the local business person. As a result of

these complaints, we have so far refused to make this fee collection

authority permanent, pending further oversight.

Lastly, unlike other Federal agencies—for instance, the Environmental Protection Agency—that manage large programs that impact small businesses, the Forest Service has neither appointed a

small business liaison within the agency, nor assigned this responsibility to any office within the agency. Indeed, I believe your hearing will uncover evidence that there is very little sensitivity to, or

understanding of, the needs of small businesses anywhere in the

U.S. Forest Service.

As one outcome of the hearing, I would like to work with this

Committee to assure that we are successful in creating an independent Office of Small Business Advocacy within the Forest ServVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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ice itself. That office should be given the opportunity and the responsibility to approve both Small Business Impact and Regulatory

Flexibility Act analyses before any final regulation leaves that

agency.

Again, Mr. Chairman, those are my views based on the experience we have had in examining this agency upside down and inside

out for the last good number of years. So I hope that once again

your effort and this Committee’s efforts will expose what some of

us have known and what we hope the country can understand— an agency now that pays little attention to the responsibility it has

had and has within the law to the small communities that surround it.

It is tragic to me that somehow in the mix of what has happened

over the last decade the word commercial value is of disdain on the

lips of the U.S. Forest Service. But it is today and as a result of

that the biases that I think are reflected in the actions they have

taken are clearly anti-business, anti-small business, and therefore

anti-West and anti-rural America. Thank you very much, Mr.

Chairman.

Senator ENZI. Thank you very much. I thank each of you for your

testimony this morning. I particularly thank you for the leadership

that you demonstrate on this issue every day. I want to again

thank you for taking time out of your busy day to testify and also

your agreement to take the results from this hearing and use them

for your work on this issue. Thank you very much.

Now while the second panel is taking their place at the table I

will do a brief introduction, but I have to mention that the three

of us that are here today are in our home States almost every

weekend traveling a different part of the State, talking to people

that are actually dealing with the problems. This is a delightful

panel because these are the people that we talk to when we are in

our respective home States. They give us some good, common-sense

ideas for things we can do; which we bring back here. The usual

reaction is ‘‘That is too simple; it will not work.’’ But we manage

to complicate them. We have some people here that will give some

of those on-the-ground opinions.

We have Jim Hurst, who is the president of Owens & Hurst

Lumber Company of Eureka, Montana. We have Joel Bousman,

who is a cattle rancher from Boulder, Wyoming, and the regional

vice president of the Wyoming Stockgrowers Association. We have

Del Tinsley, who is the owner and publisher of the Wyoming Livestock Roundup in Casper, Wyoming. Mr. Tinsley is also a member

of the Advisory Board for the University of Wyoming College of Agriculture in Laramie, Wyoming. And we have Al Bukowsky, who is

the owner/operator of Solitude River Trips in Salmon, Idaho.

Mr. Hurst.

STATEMENT OF JIM HURST, PRESIDENT, OWENS & HURST

LUMBER CO., INC., EUREKA, MONTANA

Mr. HURST. Senators, thank you for inviting me. My name is Jim

Hurst. I own and operate a small mill in Eureka, Montana, where

I have been a life-long resident.

To get directly to the point, the impact of current and proposed

U.S. Forest Service policies and regulations are and will continue

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to be devastating to small timber-related companies and the rural

communities where they are located unless changes are made soon.

Please note that I speak not only for my company but for my employees and a significant number of the residents of Eureka and

Lincoln County, Montana. We offer a dire picture of what the Forest Service is doing to small businesses and families in our community.

Last Thursday I was forced to lay off approximately 60 percent

of my workforce. A copy of my lay-off notice stands before you.

[The notice follows:]

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Mr. HURST. The names not on this list represent 60 jobs in a

small community where my firm was the largest employer. Forest

Service policies in conjunction with the likes of NEPA, the Endangered Species Act, road obliteration mandates, etc., are primarily

responsible. As these anti-harvest measures intensified, coupled

with an onslaught of appeals by the environmental industry, our

forest, the Kootenai, has sold only 25 percent of historic levels. In

short, Federal dictates are literally sucking the blood out of rural,

timber-dependent communities in Montana.

We are a small independent mill. Our adversaries are big government, big environmental organizations and big business, which

present us with a bit of a challenge to merely stay in business. As

I mentioned, harvest volumes from the forest have greatly decreased.

My instincts tell me that the system works like this. The big environmental groups influence big government to promote a zero or

reduced harvest. Big timber companies that have their own private

forests do not intervene because closing the National Forests to

timber removal increases the value of their own holdings. The result is the extermination of the small firms who have deep roots

in their communities.

An example of this is the closure of the American Timber Company. I attended its auction 2 weeks ago. That notice is here before

you.

[The notice follows:]

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Mr. HURST. When that family-owned small business closed after

54 years, 145 people lost their jobs. The auction sold what was left

for 2 cents on the dollar. Another independent company gone forever and for no good reason, as we have clean air, clean water,

abundant wildlife and literally millions of acres of dead, down and

disease-infected timber that needs treatment—a resource that

could be processed into lumber for our Nation instead of providing

citizens with the annual Montana firestorm event.

Driving us out of business only enhances the opportunities for

big business to buy what U.S. Forest Service timber is offered at

bargain basement prices because of a lack of competition and would

provide big government an opportunity to ride in on a white horse

and offer to relocate us or retrain us. Problem is, many of us do

not want to leave. Many will stay and live in poverty rather than

leave their homes. I realize this may be a simplistic view but I believe it hits the mark.

I have a Native American friend who, when referring to the Federal Government’s treatment of rural Westerners, said, ‘‘You are

the new Indians. First they take away your land and your way of

life. Then they say, ‘Trust us.’ ’’ The fact is we do not trust our national government anymore and it is quite evident our government

does not trust us.

As far as we are concerned, the Federal Government has turned

its back on rural resource-dependent communities. It ignores the

locals who live, work, recreate in, care for and understand our

forests. Instead, the ‘‘Wizards of Washington’’ know what is best for

us. They allow massive build-ups of fuel in our forests, yet removing this fuel is currently not an option. Local, on-the-ground decisionmaking would not allow this to happen.

Are Forest Service policies negatively affecting small business in

rural communities? You be the judge. The Montana Hunger Coalition fact sheet states 14 percent of Lincoln County residents are

living in poverty; 28 percent are poor and at risk for hunger. And

that was before my lay-off.

Statewide, since 1994, Montana has led all 50 States in the rate

of increase in poverty. While poverty has been on the increase, the

rate of unemployment has been low. This is ludicrous in a State

with an abundance of natural resources and with a population willing to work.

The report states that while Montanans are working harder than

ever, they nevertheless lead the Nation in the rate of increase in

poverty mainly because of a deterioration in wages in agriculture

and the extractive industries and an increase in low-wage sector

jobs.

I have brought with me letters from the mayors of Rexford and

Eureka, Montana, further describing the negative impact of Forest

Service policies on their towns. I hope you will include these letters

in the record of this hearing.

In Eureka, Montana, the U.S. Forest Service has an opportunity

to prove its worth. It can care for the land and serve the people

by immediately selling the estimated 150-million board feet of timber that have been burned within 15 miles of our town. Harvest

the trees while they have value and in the process, grind the limbs

and tops into the ground to stabilize the soil and also stabilize our

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way of life for another 3 to 4 years. A momentary stay of execution

until we can determine if sound science, reasonable decisions and

common sense will once again be the trademark of the U.S. Forest

Service. If no stay is forthcoming, I would personally prefer lethal

injection.

If nothing else, I would hope the Forest Service and the Federal

Government would look at small business with the realization that

some of their oversights and the intended and unintended consequences of their actions are destroying us one by one. If nothing

is done to advance our cause, it should be noted that some day this

country will desperately need us, but we will not be here. Thank

you.

Senator ENZI. Thank you very much.

[A subsequent submission for the record from Mr. Hurst follows:]

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Mr. ENZI. Mr. Bousman.

STATEMENT OF JOEL E. BOUSMAN, CATTLE RANCHER, BOULDER, WYOMING, AND REGIONAL VICE PRESIDENT, WYOMING

STOCKGROWERS ASSOCIATION, CASPER, WYOMING

Mr. BOUSMAN. Mr. Chairman, Members of this Committee, my

name is Joel Bousman and I am a cattle rancher and regional vice

president of the Wyoming Stockgrowers Association. My wife,

Susan, and I, along with our son, Jim, and his wife and daughter,

and our son, Cotton, operate a cattle ranch in western Wyoming.

My sons are the fifth generation of our family in the ranching business in Sublette County. Our cattle ranch is an independently

owned and operated small family business.

After college I returned home to Boulder, Wyoming, and I bought

1,600 acres and the Federal grazing permits from my father. My

wife and I did the work and we started to build both our family

and our family ranch. In the summers we packed up the kids, the

tent and the lunch cooler and we all headed to work in the hayfields for the day. To make ends meet, we worked the ranch together as a family.

My children recognize that our family ranch is a real business

opportunity with high-stake risks. The Federal Government could

put us out of business with nothing more than the stroke of a pen.

Grazing on Forest Service land is critical to my operation. If you

will refer to the map up here, please, that is a map of Sublette

County in western Wyoming. (See Page 40.) Jackson Hole is just

to the northwest. Sublette County is about the size of the State of

Connecticut. Both shades of the green on the map are Forest Service land. Yellow is administered by the Bureau of Land Management, blue, the State of Wyoming, and the small amount of white

you see in the river corridors is the private land in Sublette County.

Sublette County is only 20-percent private property. Livestock

are on the private land during the winter and the spring until the

new grass begins to grow. The ranchers, with BLM permits, pasture their cattle on the BLM land through June. Meanwhile, on all

the privately-owned land, the irrigated hay land, the crops are

being grown for the hay that is to be needed to get through the

next winter.

When the Forest Service range is ready for grazing in July, livestock are then herded into the higher mountain pastures until

early fall. Two hundred and thirty-eight head of our 350 mother

cows graze a common Forest Service allotment from July 1 till September 15.

If our ranch loses our forest permit we would have the option to

downsize our ranch or try to find other grazing land. If we

downsize our small business, we would not be economically feasible

and my sons would be unable to join me in my business. Purchasing private pasture in this case is not a realistic option because

if you can see on the map, there is so little private land available

in the county where I live.

Another option would be for me to sell out to the highest bidder,

likely a subdivision developer. Our land is at the foot of the Rocky

Mountains and some of my neighbors have already chosen this opVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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tion. I could sell and try to move elsewhere to ranch or just retire.

I would have to give up my home in Boulder and the family business I have created, and I would sacrifice my hope and my dream

to pass my family ranch on to my children.

The threat to my grazing permit is not due to negative range

conditions. I use scientific range monitoring. These lands are in

good condition. Rather, the threat is from Federal regulations. The

Forest Service often ignores the mandates from Congress to manage for balanced multiple use. Some of the nongrazing regulations

that are harmful to our business include the endangered species

regulations, the roadless initiative and Forest Service road policy

and the Forest Service planning process itself.

For example, 3 years ago on our ranch’s grazing allotment the

Wyoming Game and Fish and the Forest Service tried to restrict

grazing. Their plan was to reduce livestock grazing while placing

Colorado cutthroat trout in an intermittent stream. We were forced

to spend a great deal of time and effort with scientific experts and

fish biologists. Since the stream was intermittent, it had no water

in it part of the year. The scientific experts finally convinced the

fish biologists that fish cannot live without water. Can you imagine

that?

The time, energy and expense required to stay informed and respond to so many regulations and proposals hurts my ability to improve my operation. In the last year I estimate I have spent 15

working days and $1,700 responding to regulations.

What difference does it make if increased regulations force me

out of business? Critics of Federal lands livestock grazing fail to

mention how important private lands are for wildlife. Like livestock, the majority of wildlife survive the winter on private lands.

Ranchers provide winter forage, water and shelter for wildlife. Almost 100 percent of Wyoming moose make their winter home on

private land. When a ranch is forced out of business there is a public cost, a public loss.

For discussion purposes, let us look at a conservation easement

that mandates no development. In Sublette County, a conservation

easement attached to a ranch will reduce the market value by 40

to 50 percent. The open space and the wildlife habitat—in other

words, the public value—would then be contained in the remaining

50 to 60 percent of the value of the ranch.

Six years ago my son Cotton, then 14 years old, came here to

Washington, D.C., to participate in a town meeting with President

Clinton. Cotton talked about the importance of Federal grazing

lands and the increasing costs imposed by government regulations

and specifically the nonfee costs.

Now, 6 years later, I am here testifying before this Committee

about the impact of Forest Service regulations that still are threatening to take away both his dream and my hopes. Members of this

Committee, I can assure you this situation has not improved in the

last 6 years. Thank you.

[The prepared statement of Mr. Bousman follows:]

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Senator ENZI. Thank you.

Our next person to testify is Mr. Tinsley.

STATEMENT OF DEL TINSLEY, OWNER/PUBLISHER, WYOMING

LIVESTOCK ROUNDUP, CASPER, WYOMING, AND MEMBER,

ADVISORY BOARD, UNIVERSITY OF WYOMING COLLEGE OF

AGRICULTURE, LARAMIE, WYOMING

Mr. TINSLEY. Good morning. I want to thank this Committee for

the opportunity to testify and represent the great State of Wyoming. I am a Wyoming small businessman. Wyoming is where I

raised my three children and where I have been self-employed for

the past 25 years. I am a publisher of the Wyoming Livestock

Roundup located in Casper. Our subscription base is 85 percent of

the people engaged in agriculture in Wyoming.

The message I need to communicate to this Committee today is

simple: The State of Wyoming is under attack by the Federal Government. This heavy-handed, regulations-laden government is distorting our wildlife habitat, our open spaces, threatening our culture and forcing our second-, third-, and fourth-generation ranchers

out of business.

Virtually all of Wyoming is small business, including ranches.

This is why it is so important to tell our story to this Committee.

The Federal Government owns more than 50 percent of the State

of Wyoming, as you can see on the map.

[The map follows:]

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Mr. TINSLEY. Notice the different colors. The colors indicate the

land ownership, including the Federal Government, State and private individually-owned land. The purple represents the National

Parks, Yellowstone and Teton, and so forth. The green represents

the National Forest. As you can see, we have five National Forests,

I believe, in the State of Wyoming. The yellow represents the BLM,

and the blue represents the State of Wyoming-owned land, like our

school sections and we have a land trust in Wyoming. Orange represents the Wind River Indian Reservation, and the white represents deeded private property. If you look at the map closely you

can see that the western part of the State, in my estimation, is

more than 85 percent federally-owned.

Well, let me explain the ownership of Wyoming and why it became the way it is. Back in the late 1800s and early 1900s during

the Homestead Act, virtually everything on this map that is designated white and yellow was available for homesteading. Homesteaders could claim up to 640 acres. It started at 120 and moved

up to 360 and now it is 640 acres because it is getting more arid

the further west we go in our development of this great country.

They had to live on the 640 acres for 1 year. One of the conditions was they had to have a wooden floor in their cabin to what

they call ‘‘prove-up’’ or to get legal title to the property. But as arid

as it is and with water as precious as gold, homesteaders chose to

prove-up on lands with live water. If you can imagine bringing your

family out West and as arid as Wyoming is, if you look at the

drainages in Wyoming you can see that our deeded land is virtually

our river bottoms and our creek flows and that sort of thing.

In later years ranchers started accumulating these homesteads

and assembling ranches. During that same period the Forest Service started issuing grazing permits on the forest, making these

units balanced. They summered on the forest; they wintered on

their deeded land.

Today these second-, third-, and fourth-generation ranchers and

families are being forced to reduce the number of livestock they can

graze on the forests. That, coupled with the high cost of operation,

is forcing these stewards of the land out of business. This, in turn,

is leaving the deeded base ranch on the river bottoms vulnerable—

which is very, very good wildlife habitat—vulnerable to subdivisions. As I mentioned earlier, these are prime wildlife habitat

lands. These base operations are also very attractive to the developers because of the beautiful scenery, abundance of wildlife along

the creek bottoms, and access to the National Forest.

As a result of these developments, critical habitat is being lost

and destroyed forever. The destruction is the exact opposite of what

the Forest Service say they are accomplishing by putting ranchers

out of business.

The poster to my left depicts what used to be a ranch.

[The poster follows:]

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Mr. TINSLEY. The Lathrop Ranch featured about 10,000 acres of

open space and critical wildlife habitat. This is the deeded land on

this ranch. You can see the mountains in the background. That is

where the cattle used to summer. This is critical wildlife habitat

that once served as home to wintering cattle, elk, deer, antelope

and other wildlife. It is now a subdivision. The people living in the

subdivision are now complaining that the displaced wildlife is eating their shrubbery and there are problems. My wife and I go out

and walk early in the mornings and we see deer on people’s lawns

chewing up their vegetation. Well, this was their winter home. The

people displaced the wildlife.

The people of Wyoming lose a way of life, a culture, when this

is done. But everyone in our Nation loses the magnificent scenery

and wildlife habitat that are provided by those ranching families

that we are losing.

Keeping the Federal land ownership in mind and coupling it with

the fact that Wyoming’s population is only 480,000, we soon realize

that any change in the use dictated by the Forest Service guidelines dramatically impacts every man, woman, and child in Wyoming. In all 23 counties in Wyoming, there are people living there

that have forest permits, including Gosham County, which is in

eastern Wyoming on the Nebraska line. There are seven forest

permit-holders there. The people of our State depend upon production agriculture and the use of renewable resources—grazing, timber, minerals, wildlife, and open spaces. Forest Service policies that

destroy the habitat and the landscapes by replacing ranchers with

developments cripple both Wyoming and America.

It was interesting yesterday morning when I picked up our local

statewide paper that the Wyoming News Service did a survey and

they asked people in Wyoming, ‘‘What would you ask at the debate

tonight?’’ Overwhelmingly the people from Wyoming said we would

ask, ‘‘Why is our Federal Government shutting down our forests?’’ Its affect is overwhelming. And I am not talking about people in

agriculture; I am talking about people on the main streets of Wyoming.

I would like to see this Senate set up a revenue impact study.

Instead of an environmental impact study, let us study the revenue

and what it is going to cost us to implement all of these regulations

and the impact it is going to have on rural Wyoming.

I want to talk just a minute about Yellowstone Park, if you will,

please. Four years ago we went on a pack trip and we went

through the southern part of Yellowstone Park. We went in the

South Gate and made the loop opposite of the way the highway

goes through. We rode through the burned areas with 1-million

acres of the 3-million acres in Yellowstone National Park that were

burned. Today the Canadian thistle, which is a noxious weed, has

grown so thick in that country that you cannot ride a horse

through it. This is what is happening. They will not spray it; they

will not take care of it; but yet they let it burn and it has just done

tremendous damage to our economy. It is a very serious situation.

I want to conclude by thanking you for this opportunity to testify. I will be real happy to answer any questions that you may

have. I would like to submit some other material with my testimony if I could, please.

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Senator ENZI. We will accept anything for the record that you

want to add to your testimony. We appreciate the additional information and we will make sure that Members of the Committee

have it, too.

[The prepared statement and attachment of Mr. Tinsley follow:]

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Senator ENZI. Mr. Bukowsky.

STATEMENT OF AL BUKOWSKY, OWNER/OPERATOR, SOLITUDE

RIVER TRIPS, SALMON, IDAHO

Mr. BUKOWSKY. Mr. Chairman, I appreciate this opportunity to

testify before the Committee. The management of Federal forest

lands and forest uses is undoubtedly the single most significant

factor in the economies of the rural communities in which my family and our employees live, so we are particularly grateful that congressional attention is being focussed on our relationship with the

Forest Service.

My name is Al Bukowsky. Along with my wife Jeana, we own

and operate Solitude River Trips, a small outfitting and guiding

business that has operated since the mid-1970s on the Middle Fork

of the Salmon River in the Frank Church River of No Return Wilderness. I personally guide on all of our river trips, so you are listening not only to a businessman but a person who is directly in

the field every river trip day.

Mostly we have a good working relationship with the Forest

Service. At other times they seem to ignore our input, as the following examples will illustrate. Outfitters met regularly with the

Forest Service for several years leading up to the release of the

draft environmental impact statement for the Frank Church River

of No Return Wilderness in 1998. We were regularly assured that

the resource was in better shape than when the Wilderness was

designated in 1980. With minor tweaking in management, the Middle Fork could be expected to remain in great shape for the foreseeable future. We should expect only minor changes in management

through the DEIS.

In January 1998 the DEIS hit the streets and what a bombshell.

The preferred alternative called for a 50-percent cut in river use,

guided and nonguided. The preferred alternative recommended

that a large portion of summer use be shifted to winter use, telling

us that the Forest Service personnel obviously had no understanding of our business operations, let alone Idaho’s weather. As

you can see by the chart, they wanted to shift the peak use in the

summer to the shoulder seasons, which in the Frank Church, the

river is froze over and under several feet of snow.

[The graph follows:]

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Senator ENZI. Figures.

Mr. BUKOWSKY. Private and commercial users in the Frank

screamed loudly. The Forest Service backed down, acknowledging

publicly that they had spent $1 million on a DEIS that was seriously flawed. Forest Service staffers with a purist bent toward wilderness river use had misinterpreted their own sociological data in

writing the DEIS. Outfitters had no alternative but to raise over

$50,000 and spend countless hours of our time and many sleepless

nights in order to deal with the inaccuracies in this dishonest document.

To their credit, the Forest supervisors, especially George Matejko

and Dave Alexander, became actively involved and worked closely

with all users in a supplemental EIS process. The record of decision will be out sometime next year. Only then will we know if the

Forest Service has really been up front and honest in their dealings

with us.

Outfitters on the Middle Fork tend to pinpoint the last decade

as a turning point when the long history of good relations with the

Forest Service began to disintegrate into a rockier road. For example, on April 9, 1997, we had an emergency meeting with the

Middle Fork river managers. They told us that sensitive Native

American sites along the Middle Fork were showing signs of abuse

and would be closed to camping if our care for these sites did not

improve in the coming season.

These are prime camping sites for us, clustered closely together

along a specific stretch of the Middle Fork. Closure would mean

long days on the river without hope of a campsite for our guests,

which naturally could lead to a serious safety issue.

On June 12, 1997, barely 2 months later, outfitters showed up

on the Middle Fork to launch their first trips of the float season.

They were met at the launch site with paperwork from the same

district ranger who had been at the April meeting, ordering that

all 10 of the campsites were now closed to camping, as you can see

by the letter signed by the district ranger.

Outfitters immediately insisted upon a joint field trip. After

much work and public involvement during the height of our operating season, the Forest Service finally agreed to a mitigation plan

and reopened most of these campsites.

The kicker in this story is that the campsite closure order given

outfitters as they launched their first trips in June had been signed

by the district ranger on April 1, 1997, 8 days before our emergency meeting with the outfitters he called together on April 9.

What possible motive could the agency have had in hiding a decision already made 2 months earlier? Why in the meantime were we

led through the charade of thinking outfitters and other boaters

would be part of the decisionmaking process?

[Form R4-2300-4 follows:]

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Mr. BUKOWSKY. There are also examples, however, of success in

turning things around, in this instance in the Sawtooth National

Recreation Area in central Idaho. Just 3 years ago the Upper Main

Salmon River resource managers and outfitters were on extremely

divergent roads relative to common sense management of that section of the river. To protect spawning Chinook salmon, the river

was abruptly closed to float boaters each August, often with less

than 12 hours notice. Lawsuits were filed. Communications between the outfitters and the Forest Service became nonexistent.

Thanks to the constructive attitudes of two new rangers on the

SNRA staff, outfitters and the Forest Service are once again working hand in hand. Communication and understanding there could

not be better.

Communication and collaboration is the key. Unfortunately, abrupt management style has become typical behavior for many within the agency. Because the special use permit conveys a privilege,

not a right to operate, outfitters have little or no defense against

sudden changes in the rules. A permit is not a contract and the

sudden loss of privileges previously agreed upon between the agency and an outfitter is not compensable nor necessarily negotiable.

Senator Craig recently reported legislation from the Senate Committee on Energy and Natural Resources that goes a long way toward providing a stable regulatory climate for the outfitting industry. S. 1969 seeks to create a statute from existing Forest Service

outfitter and guide regulations that have worked well until recently. This legislation would put a stop to the agency’s manipulation of outfitter rules into a moving target.

Overall, the Forest Service is desperate for money and staff and

the new cost recovery program for commercial outfitters is one of

several new sources of agency revenue that threatens outfitters.

Cost recovery, as proposed earlier this year, promises additional financial burdens that may break the back of outfitters and other

small business operations on forest lands.

In Idaho, cost recovery has already been proposed on the Upper

Main Salmon River where outfitters and private boaters need a

new take-out site in the effort to protect summer Chinook on their

traditional spawning grounds. The Forest Service told us that all

costs for NEPA analysis related to this new take-out would be

charged exclusively to the four small float businesses that operate

the Upper Salmon, despite the fact that many nonguided floaters

enjoy the same stretch of river and would share the facility. Total

cost for this NEPA work is estimated at $132,000, a $33,000 hit on

each of these four outfitters and no hit on private boaters, which

perfectly illustrates outfitter concerns about implementation of national cost recovery rules proposed earlier this year.

The real kicker in the national cost recovery rule is the requirement that all fees be paid up front even prior to the resolution of

a dispute or the permit will not be processed and you are out of

business.

In conclusion, I would like to emphasize to the Committee that

outfitters fear they are seeing encouragement within the Forest

Service of prejudice against commercial operations on forest land.

Over 32 percent of the land in this country is owned by the Government. In recognition of this, agencies like the Forest Service must

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adhere to policies that sustain private sector businesses offering

quality services to forest visitors, taxpaying businesses that are

critical to the economies of local and regional communities.

When Congress returns home at the end of this session, I hope

that your Committee Members will repeat the theme of today’s

hearings in a series of town meetings throughout the State this

winter. I know you will have participation from various outfitters

and guide organizations. It was not so long ago that outfitters and

guides were proud of their partnership with the Forest Service. We

continue to be proud of the job we do together to protect the land

and serve the public. Locally, it depends upon open communication

and mutual respect.

Mr. Chairman, it is my hope that your hearing today will be an

important step toward putting the outfitters and other user groups,

the Forest Service and the communities they serve back on this

positive collaborative path. Thank you.

[The prepared statement of Mr. Bukowsky follows:]

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Senator ENZI. Thank you. This testimony has been outstanding

and very helpful.

Senator Burns has some appropriations meetings, which is a key thing. We are in the process of spending $1.8 trillion and he needs

to go do some specific work on that, so we will defer to him for

questions first.

Senator BURNS. Thank you, Mr. Chairman. I will be very, very

short. I want to ask a couple of questions.

By the way, I want Mr. Bousman to know that during the fires

in western Montana I was down in the Big Hole, and you are familiar with Wisdom and through that country, and I was talking to

the ranchers down there. We had a visit from the Rainbow family

on the Forest Service land out there this year and there are about

20,000 of them, they figure, but they just flock everywhere.

We got to go up and look at a couple of pastures, a couple of

meadows that they just trashed. These people, 20,000 of them, had

no permit to be there, none. They just flock in there and they destroy. You ought to see these meadows. I mean they are terrible.

And when you compare them to a year ago, pictures taken, it was

something.

I asked the forest supervisor about that and why we have to

jump through all the hoops for permits and then these people can

come in and trash an area, leaving big rocks in the road so that

you cannot get in and out, and they said they cannot get those people off of there. So there is a double standard here and we want

to do away with that double standard if we possibly can.

Mr. Hurst, we know that the Forest Service also has to adhere

to some laws of the land—clean water, clear air, NEPA—all of

these laws that have been passed by this Congress. If there was

one—if you could put your finger on one thing that would facilitate

and bring some collaboration and communication between the Forest Service and your company and the management of those resources, what would it be? What would you advise us to change

now that would facilitate both protecting the forest and making

sure that we have a forest there for our children and our grandchildren?

Mr. HURST. It would probably be the Endangered Species Act.

And I realize that is probably too much to bite off but what we

need is more local control, more input and some trust in the folks

at the local level that are making the decisions.

Now we have purchased fire killed timber 500 miles north in the

province of Alberta. I think it is the first time that government

wood was ever exported to the United States from Alberta. The

reason we did that is because we could not wood our mill from U.S.

Forest Service timber because of the decline in timber sales from

that agency.

What I found is that the people in Alberta are closer to that resource. In other words, the province has control of the timber. As

a result, they have a healthy economy. They harvest the timber, in

this case burnt timber, in a timely fashion so that they can take

the revenue from that harvested timber and reinvest it back into

the ground in the form of reseeding or restoration.

In the United States we do not do that. We do everything we can

to keep resource workers unemployed, it appears, and we are not

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making the local decisions that we should, and that is why I talked

about trust. And people, as you all know, out West we are not

going to trash our own backyards, especially the folks that live

there and have lived there. That is ridiculous.

So I would guess something has to be done with the Endangered

Species Act. We have got to speed up this appeals process and we

have to have more trust in locals. That is not one thing; it’s three

things; I realize that. But if we can get more control back to the

local land managers to make the decisions, that would greatly help

our industry and our communities.

Senator BURNS. I want to ask the grazers, also. Mr. Bousman,

what would you ask us to change to facilitate maybe cooperation

between the agency and the grazers and to make sure that we can

manage that resource?

Mr. BOUSMAN. Well, Senator, I think one of the concerns that

has the most impact on our type of operation is the fact that too

often decisions are made that do not have the scientific justification

to make them. In that kind of a case I think if there was one thing

that this Congress could do that would help the people on the land

more than anything else, it would be to put the burden of proof on

the Government. Before they could make a decision they should

know that that decision is in the best interest of the resource and

the best interest of the environment. Instead of doing that, they are

making these decisions based on what is politically correct, not

what is best for the land.

Senator BURNS. Anyone else want to comment on that question?

Mr. TINSLEY. Yes, I would, Senator Burns. If you talk to a lot of

these retired forest people that are on the ground in Wyoming, they

say the best years of the National Forests in this country were

when it was managed from the bottom up rather than from the top

down. That was when we had the best use and the healthiest forest.

Senator BURNS. If we expanded the SBREFA to include the Forest Service, would that help? That is the accountability, you know.

It makes them accountable on all the decisions they make.

Mr. HURST. I think they should be. I mean they are directly affecting the lives of a broad spectrum of Westerners. They should

be held accountable.

Senator BURNS. Thank you, Mr. Chairman. Thank you for letting

me move up in the questioning.

I want to thank our witnesses for coming this morning because

they bring a lot of expertise to the table and we need that in this

town. I call this town 17-square miles of logic-free environment, so

you bring a little common sense here, so your voice may sound a

little strange.

Senator ENZI. I again want to thank all of you for——

Senator BURNS. And you can have my log.

Senator ENZI. Thank you. We will need that.

Mr. Tinsley, you mentioned having hearings in our State and we

do that through town meetings and all sorts of different ways.

What has been so important for your effort today is that you are

bringing a local perspective to the national level. When we talk to

the folks in Wyoming, they understand the changes that are being

made, but the folks back here have a little different atmosphere to

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live in. They have already eliminated most of the Federal land that

they can wander around on and places that they can get away from

the traffic and everything. So we have a lot of trouble educating

Easterners on what it is like in the West. Your pictures and your

maps and your letters have been extremely helpful today.

Mr. Bukowsky, you are performing part of this tremendous effort

because you are taking the people from back here and you are actually letting them see the area that they worked so hard to set

aside, to make sure that it would be in a pristine State, and you

are as interested in keeping it in that pristine State so we will be

interested in coming to see it. It is kind of an oddity that we have

the people out here thinking that the people out there would be interested in ruining their jobs.

Mr. Hurst, we have the sawmills in Wyoming that have gone out

of business. They are small businesses compared to the national

standard, of course. They are very big businesses in the communities they are in and they just literally devastate the community

when they go out of business.

We are talking about healthy forests now, and that is an acceptable phrase throughout the United States. Everybody wants

healthy forests. When I was with Senator Burns in Montana we

did this hearing and one lady stated that she and her husband own

a logging company in Montana and she is the accountant and runs

the skidder, sometimes the chipper. That is how small business is.

You have to do all of the jobs that are there. She is a little upset

that they keep talking about in healthy forests having to grub out

this underbrush that is not commercially usable and the dead tinder that there is in the forests.

So she brought us that little log to show us what some of this

undergrowth is, and it is commercially loggable. It would make a

lot of boards for a lot of homes. And if you turn it into boards, it

preserves the carbon dioxide that it has been capturing for probably 50 years permanently. If it falls over in the woods and disintegrates, that carbon dioxide goes back up in the atmosphere again

and that is what we are blaming global warming for. So we understand the plight and appreciate the perspective that you have

brought of how devastating that is.

One of the reasons we are kind of hurrying here is that the Minority has objected to holding hearings over 2 hours. It is a constant protest that they have had for the last couple of weeks. So

it is going to limit our hearing today. We are going to have to try

to shove everything within 2 hours. We will keep the record open

for 2 weeks. Other Members of the Committee may send you some

additional questions so that we can get your responses in the printed record.

Mr. Tinsley, I have to specifically ask you a question because I

know you have a unique perspective on the impact of forest policies

because you deal with paper products when you are putting out

your newspaper. Can you tell us a little bit about some of the effects of Forest Service policies on paper production?

Mr. TINSLEY. Thank you, Senator. That is a good question and

it is a good point that I would like to make.

I think that the newspaper pulp industry in Canada learned a

good lesson from OPEC this summer. They shut down the producVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00181 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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tion of newsprint for about 3 weeks, shut it not completely down

but they slowed it down about 20 percent, raised their prices by 20

percent and found out just how dang much control they have over

the newspaper print industry in America. They liked what they

saw, just like OPEC liked what they saw when they shut the oil

flow down.

Consequently, we had to go out and buy inferior paper from Mexico. I am not saying that to run down Mexico, but it just is not the

quality of paper that we can get out of Canada and what is made

here in America. It was pretty devastating and it was scary. I

mean they could put us out of business in a heartbeat.

Senator ENZI. So if we are not looking at multiple use we could

be looking at—if we are happy with our gas prices now, we will

really be happy with our newsprint prices, huh?

Mr. TINSLEY. Yes.

Senator ENZI. Thank you.

Mr. Bousman, you mentioned that your son, Cotton, came back

to Washington and had the chance to ask the President a question.

I am interested in what the response was to that question on grazing fees and also what your son thinks are his possibilities for

being able to maintain the way of life, the open space and the future as he has envisioned it.

Mr. BOUSMAN. Senator, as far as the question, my son was fortunate enough to get to ask the President if he understood the interrelationship between the nonfee costs associated with grazing on

public lands. The President indicated that he did not understand

that. I cannot say as anything has changed except not just within

the Forest Service but within all the Federal agencies that people

in rural areas in our country have to deal with—the Fish and Wildlife Service regulations, BLM regulations, Forest Service regulations—they have all increased since that time.

I would have to say, in fairness to the President, the grazing fee

formula itself is still the same as it was 6 years ago. Other than

that, everything has gotten worse.

Not only my son, Cotton, but my other son, I am fortunate that

both my boys would love to continue in the ranching business. I do

not know how to explain it. It is something they have in their

blood. People in our business can understand that. But the sum

total of all these regulations—Forest Service is one example and

probably the most glaring example but the Department of the Interior regulations, Fish and Wildlife regulations, Endangered Species, the roadless initiative have the impact of severely affecting

our ability to continue. And, as I pointed out, the situation we are

in, especially in western Wyoming, our options are limited. If I was

to guess the way it appears that we are headed in the last years

in the regulation from Washington, it is very discouraging, to say

the least.

Senator ENZI. Thank you.

One final and what I think will be a quick question. Mr. Hurst,

you stated that some day this country will need you but you will

not be there. What did you mean by that?

Mr. HURST. Well, let us take the fires, this past summer, for example. Who were the movers and shakers on those fires? The

loggers that had the equipment and the know-how to make the fire

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lines. That is one way. When we are gone, our loggers go with us.

So when it comes to fighting the fires the next time, you know, it

is not going to be as easy to put them out, and it was not easy this

year at all.

We are a small business and when you take a small business out

of a community, for instance ours, who is going to go to that 4H

livestock auction? We are having a hell of a poor year financially

but we bought five beef and three pigs. Who is going to give the

high school scholarships? The Sierra Club? The Wilderness Society?

We have not seen one yet.

Those are the kinds of things that will disappear when we do.

It should also be noted that we will not turn the switch off because

our corporate headquarters are in Stamford, Connecticut, or Seattle, Washington, with no direct contact to the communities. I

have to look the people on Main Street in the eye, as these folks

do, and we are going to take it that extra step to try to stay in

business. That is why I am here. I can guarantee you there are one

hell of a lot of things I would rather do than be in Washington,

D.C. right now, but I owe it to my community, and I owe it to my

employees to be here, so that if I have to turn that key off, I can

at least look myself in the mirror and say, ‘‘Goddang it, you gave

it a try, Jim.’’ Those are the things that you are going to miss.

And I can guarantee you when the Coloradans and the Californians come out to Montana because it is quaint and they kind of

like to rub elbows with those ranchers and loggers, all they are

going to find is ex-Californians and Coloradans. So big deal.

Senator ENZI. Once again if you like the price of gasoline, you

are going to love the price of lumber.

Senator Crapo.

Senator CRAPO. You might find some Canadian thistle, too.

It is very notable to me that on the panel we have before us we

have different industries represented. We have timber, grazing,

outfitters and guides, and each industry is telling the same story.

Mr. Hurst, I am not going to ask you a question but I just want

to give you a little story of my own about the timber industry. We

have a small community in Idaho in Lemhi County called Salmon,

Idaho. There are about 10,000 people who live in the entire county

and the county is probably the size of one of the northeastern

States. About 70, 80, maybe even 90-percent plus of that county is

federally- or state-owned.

They had a little timber mill about 6 years ago in this county.

I think it employed about 40 people. I went there as a Congressman and toured the mill. They were being threatened with not

being able to get timber to cut. I asked them, as I toured the mill,

how many board feet of timber they needed to be able to cut in this

forest which they live right in the middle of and they gave me a

number. I do not remember the number right now but they gave

me a number that would keep these 40 people employed.

Then that same day I went to the Forest Service and met with

them and they talked to me about the forest management policies

and their projections and they told me that in this forest, because

of the climate and everything else, it took about 200 years for a

tree to mature to where it could be harvested and they wanted to

actually go to a 220-year cycle to harvest the trees to have a marVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00183 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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gin of error. I thought wow, 220 years, there is probably not much

timber that can be harvested out of this forest.

But I asked them. I said, OK, if you accept your approach, how

much timber would be able to be harvested in this forest if you

kept the forest viable and healthy and only harvested on a 220-

year basis? They gave me a number that was 10 times what the

little mill in the community needed. That little lumber mill is

closed because they could not get enough to keep it open, when

even on a very conservative estimate, they could have had 10 times

in their local forest what they needed to harvest.

That is the kind of thing I think we are talking about. I want

to ask each of you, and I do not know that you all need to answer

this question, but I would like to ask if any of you disagree with

this statement. I have held a lot of hearings on this type of issue

in Idaho in one way or another, whether they be town meetings or

hearings or whatever, about the issue of whether we can have a

viable, healthy natural resource-based economy and still protect

the environment and have a strong, healthy, sustainable environment.

And for people who do not live in these areas, the first question

they are often faced with or that those who oppose access to the

forests often raise is well, you are going to have to destroy the environment to allow these small businesses to thrive.

Well, the people who live in Idaho want to have our forests be

healthy and they want them there for their children and their

grandchildren to recreate in and to enjoy for the quality of life and

to have an economy, jobs, and the families that depend on those

jobs. And I think that is doable.

I would ask if any of you would like to make a quick comment

because I have a couple of other questions about whether you think

there is an inherent inability to maintain strong, viable forests and

still have healthy small businesses in those forests.

Mr. BOUSMAN. Senator Crapo, I would like to comment along

those lines that I do not believe there is any one of us sitting here

at this table that do not realize that it is in our own best interest,

as natural resource users, to make decisions which are in the longterm best interest of the environment and the natural resource.

If we did not realize that, we would be ultimately putting ourselves out of business.

Senator CRAPO. What would you be doing to your son’s future if

you destroy the very environment you live in?

Mr. BOUSMAN. That is right. I would be destroying the future of

the ability to pass these businesses down to the next generation.

Senator CRAPO. The yellow light just came on so I am going to

ask each of the rest of you to just indicate whether you agree with

that proposition.

Mr. TINSLEY. Yes.

Mr. BUKOWSKY. Yes.

Mr. HURST. Wholeheartedly.

Senator CRAPO. Let me, in the last minute or so that I have, go

to another issue that is very important to me. As we talk about different problems here, it seems to me that NEPA compliance, which

you are all very familiar with, I think probably painfully familiar

with, needs reform in the Federal system. The reason I say that

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is because each of you in one way or another has talked about the

need for true collaborative decisionmaking as we approach these

policy decisions. Mr. Bukowsky, you had actually mentioned that

when it has worked, it has worked pretty well for you in your industry, and when it breaks down is when you really run into these

problems.

The question I have is, I think that true collaboration is more

than just having an opportunity to comment and then often coming

to us and asking to extend the comment period because you do not

have time to comment, and more than just the opportunity to go

to public hearings. Hearings and opportunities to comment are a

form of public participation but to me, it is not collaboration.

I think that we need true collaboration, meaning that the NEPA

process should involve the local community, the small businesses

in the community, and other interests—the environmental community, those who are concerned about all different aspects of the

problem sitting down at a table and working through the best way

to find common ground and achieve the multiple objectives that we

have for forest management.

Would any of you care to comment on that quickly?

Mr. TINSLEY. Yes, I would, Senator. Talking about the comments,

I would like to make a comment about the comments. We do not

get any opportunity to comment on how the forest and how the

public land is used in eastern America. We would not comment.

But the thing that bothers me the most is the fact that a comment

coming from Atlanta, Georgia, on how we use our forest in Wyoming has just as much weight placed on it as does a comment coming from Joel Bousman, whose life is going to be ruined by the decision on how to use the forest.

Senator CRAPO. Good point.

Mr. TINSLEY. That really bothers me.

Senator CRAPO. Mr. Bukowsky, did you want to say anything?

Mr. BUKOWSKY. The problem with NEPA is they hold all these

town hall meetings and get all your input, and you think it will

come out as part of that decision. But there is nothing in NEPA

that says that once they have these town hall meetings and they

take all this input that they have to use that input. What I have

found out lots of times is that you spend years at all these meetings giving them input and then they end up not even using any

of it, and the people that are giving the input have far more experience in the field than anyone in the Government.

Senator CRAPO. Thank you. I would love to go on with this with

each of you but my time has expired and we are under a deadline

here. We need to get the next panel up here so that we do not have

to shut down before they have their chance. Thank you very much.

Senator ENZI. I would again reiterate that the record will be

open for another 2 weeks, so if you have additional material that

you think would be helpful to us, we would appreciate that. And

if Members of the Committee have additional questions, they will

be sending those.

If our next panel would take their places? We have some expertise now coming from Mr. Larry W. Van Tassell, professor and

head, Department of Agricultural Economics and Rural Sociology

from the University of Idaho in Moscow, Idaho and we have WilVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00185 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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liam McKillop, professor emeritus, the College of Natural Resources from the University of California-Berkeley in Berkeley,

California. We appreciate your being here today.

Mr. Van Tassell.

STATEMENT OF LARRY W. VAN TASSELL, PROFESSOR AND

HEAD, DEPARTMENT OF AGRICULTURAL ECONOMICS AND

RURAL SOCIOLOGY, UNIVERSITY OF IDAHO, MOSCOW,

IDAHO

Mr. VAN TASSELL. Thank you, Senator Enzi. I would like to

thank you for being able to visit with you today. As has been said,

I am a professor and department head at the University of Idaho

and only 11 months removed from the University of Wyoming.

My intent today is to discuss with you how decisions made by the

Forest Service impact Federal land ranchers. The decisions I will

focus on deal with the number of animals that are allowed to graze

or the amount of time they are allowed to spend on a Forest Service allotment.

In the 1990s I was part of a study to examine the profitability

of a ‘‘representative’’ ranching operation after it adjusted to a reduction in Federal AUMs. An AUM can be thought of as one cow

grazing on the forest for 1 month. A mathematical model of a representative 300-cow ranch was developed using input from ranchers who run cattle on the Big Horn National Forest in Wyoming.

The model was allowed to adjust cattle numbers and to convert

hayland to pasture as Federal AUMs were reduced.

The results of the study are presented in this table. As total Forest Service AUMs were reduced 25, 50 and 100 percent, numbers

of cows were reduced from 300 head to 267, 221 and 164, respectively. These reductions translated into a decline in average annual

net cash income of over $11,000, $15,000 and $52,000, respectively.

The ending ranch equity dropped from the original 88 to 80 percent, 78 percent and 33 percent, respectively, under the 25-, 50-

and 100-percent ranch reduction scenarios.

The probability of receiving a negative cash flow increased from

4 percent under the no reduction scenario to 13, 18 and 100 percent as AUMs were progressively reduced. A 36-percent reduction

in required labor resulted when all permits were removed.

[The table follows:]

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Mr. VAN TASSELL. Not only does a reduction in Forest Service

AUMs reduce the income of individual ranchers but the rural communities are also impacted. Dr. Robert Fletcher took the results

from our study and examined the impact the reduction in total

AUMs of grazing allotted to cattle on the Big Horn National Forest

would have on the surrounding four-county area. He found that a

25-percent reduction in grazing would reduce yearly economic activity in the four-county area by $1.68 million per year, of which

$441,000 would be personal income for local residents. The communities would lose over 31 full-time equivalent jobs.

Similar results have been found by other researchers. For example, Dr. Neil Rimbey found that, in Idaho, the yearly loss in rancher net income from a proposed reduction of 6,000 AUMs on the

Sawtooth National Forest was over $90,000 per year.

Another impact on ranchers from a reduction in Federal grazing

is the loss of value in the permit they have purchased. When the

U.S. Forest Service permanently cuts grazing rights, ranchers lose

the equity they have in those permits. Over the 1985 to 1992 study

period, average permit values were generally in the $40 to $60 per

AUM range for northern States, such as Wyoming and Idaho,

where seasonal grazing is common and $90 or above per AUM for

Arizona and New Mexico, where year-long grazing is common.

A rancher that runs 300 head of cows on the Forest Service for

3 months of the year stands to lose approximately $18,000 in equity if he or she receives a 50-percent reduction in the AUMs they

are allowed to graze.

The last thing I would like to mention is the trade-off between

wildlife and livestock. I have heard many times that livestock need

to be removed from the Forest Service lands to increase wildlife. In

most areas, wildlife do not winter on the Forest Service lands but

on private lands. When livestock are removed from the Federal

lands, every AUM on private land becomes that much more essential to the survival of the ranch.

This additional pressure does not make for a generous landowner

when it comes to allowing wildlife to winter on private property. A

recent study I did of Wyoming ranchers found that the average operation lost over $4,000 per year from wildlife depredation. Landowner tolerance, not habitat, is probably the limiting factor that

imposes population bounds on big game.

I believe that it is in the best interest of society for the Forest

Service and ranching community to work together to keep livestock

on public lands. In many areas of the West I feel this is happening.

More damage will be done to public lands if ranchers are forced to

sell to real estate developers than was ever imaginable with livestock. Thank you.

[The prepared statement of Mr. Van Tassell follows:]

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Senator ENZI. Thank you very much.

Mr. McKillop.

STATEMENT OF WILLIAM MCKILLOP, PROFESSOR EMERITUS,

COLLEGE OF NATURAL RESOURCES, UNIVERSITY OF CALIFORNIA-BERKELEY, BERKELEY, CALIFORNIA

Mr. MCKILLOP. Good morning, Mr. Chairman and Members of

the Committee. My name is William McKillop. I am professor

emeritus of forest economics at the University of California-Berkeley. My degrees are in economics, statistics, and forest science. I

have authored over 100 research publications and conference papers in the area of forestry and natural resource economics.

My statement today is based on my own experience and research,

and on data provided to me by a range of organizations, such as

the Small Business Timber Council, the Independent Forest Products Association, California Forestry Association, and Intermountain Forest Association and Northwest Forestry Association.

My Exhibit 1 shows the very severe decline that has taken place

in U.S. Forest Service sawtimber sales in the past decade. In 1988

the total volume sold was 8.4 billion board feet. In 1998 it was only

1.9 billion board feet. That is a 6.5 billion board feet decline, a 77-

percent decline in sawtimber sales from the National Forests.

In 1988, small business purchased 5.3 billion. That is 63 percent

of the total. And in 1998 they were able to purchase only 1.7 billion

board feet.

[The chart follows:]

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Mr. MCKILLOP. These severe declines have had absolutely traumatic effects on the forest industry, on small timber companies, on

working people and communities in the West. In the five-State region of Washington, Oregon, California, Idaho and Montana, there

were 494 sawmills in 1989; now there are only 265 sawmills. There

were 86 plywood plants; now there are only 48. There were 72 veneer plants in operation in 1989 and now there are only 31 veneer

plants in operation.

The severity of this impact is totally unprecedented. Exhibit 2

shows that the burden of sawmill closures has been disproportionately borne by small businesses. The red, the dark color, represents

the proportion of small businesses that have closed. You see that

62 percent of the sawmills that closed were small businesses in Oregon; in California, 55 percent of them; in Washington, 70 percent

of them; in Idaho, 71 percent; and in Montana, 75 percent of the

sawmill closures were small businesses.

For the five-State region, the total number of mills that have

closed has been 250 and of those, 64 percent were small businesses.

And that is sawmills.

[The chart follows:]

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Mr. MCKILLOP. Plywood plant closures—60 percent out of 30 closures in Oregon were small business; 88 percent in Washington

were small businesses. In the case of veneer plants, 60 percent in

Oregon were small businesses; 80 percent in Washington were

small businesses. So there has been very much a disproportionate

impact on small businesses of this huge decline in the Forest Service timber sales.

Associated with these sawmill closures have been very, very

large job losses. The job losses that have resulted from the closure

of small wood processing plants were 57 percent of the total in

Washington, 44 percent of the jobs lost in Oregon, 40 percent of the

jobs lost in California, 35 percent of them lost in Idaho, and 59 percent of them lost in Montana. Overall there were something like

27,600 jobs lost in wood processing plants in the last decade and

of those, 46 percent were resulting from the closure of small businesses.

[The chart follows:]

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Mr. MCKILLOP. These jobs relate only to job losses due to the closure of wood processing plants. On top of that we have very substantial losses in the logging sector. Typically logging firms are

small companies and this 6.5 billion board feet decrease, the 77-

percent decrease in Forest Service saw timber output has had a

devastating effect on the logging industry, as well as on the wood

processing sector that I just mentioned.

Lastly, we should note that small business losses due to this Forest Service policy are not just in the timber industry. Typically, the

timber industry is a basic sector of any economy, regional or statewide or national economy. It supports jobs in the rest of the economy and the jobs that they support are very much jobs in the small

business sector.

So not only do we have the losses in wood processing and logging

companies but we also have losses in the rest of the economy due

to the Forest Service’s severe decline in saw timber output. Thank

you, Mr. Chairman. Those are my formal remarks.

[The prepared statement of Mr. McKillop follows:]

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Senator ENZI. I want to thank both of you for being here today.

I am the only accountant in the U.S. Senate, so I have to tell you,

I really love the numbers you were using. That is a very critical

part of the hearing, too, to have some statistics from some very

credible witnesses who are experts in this area that can show some

of the devastation. I think both of you have done an excellent job.

Mr. Van Tassell, I particularly appreciate your comments about

the wildlife wintering on the private lands and that is uncompensated use. It helps to maintain wildlife in the West, which is something people really expect to see when they come out to the West.

We may not be very long from the time that they will make special

tours to see a cow.

Ranchers have to obtain operating loans each year. Could you go

into a little bit of how the uncertainty regarding the Federal grazing regulations, particularly the allotment restrictions, might impact those loans? Has the Forest Service, in your opinion, made efforts to reduce that uncertainty or has it taken operating loans into

any consideration in its decisionmaking? Could you comment on

that?

Mr. VAN TASSELL. I do not know that they have taken operating

loans into consideration at all but it impacts ranchers like it would

any other business. When they go to a banker, if the assets they

are using to produce their product are uncertain, the banker is not

very willing to give them a loan on that.

The other problem is that historically the grazing permit has

held value for the rancher and the rancher has used that for collateral in obtaining loans. With the uncertainty surrounding whether

a rancher is going to have those permits to graze, the bankers have

been reluctant to use those for collateral. So many ranchers have

lost that asset which they had previously used to get a loan; so the

uncertainty does impact ranchers.

Senator ENZI. Mr. McKillop, I appreciate again your emphasis on

small businesses and how they are inordinately affected. Mr. Hurst

mentioned earlier that the small businesses are the ones that buy

the ad in the high school yearbook and purchase the 4H animals

and they do not have corporate offices in another part of the country, so they have to face those people on Main Street and they are

neighbors, they are actually neighbors that are devastated by the

changes in business.

Could you give us some of those indications of the magnitude of

the impact just in the timber industry?

Mr. MCKILLOP. Yes. I gave you the job losses of 27,600 from

wood processing jobs lost. In addition, there must be at least about

10,000 logging jobs lost. So there we have something like 37,500

jobs lost in logging and sawmilling, plywood plants, veneer plants.

Now every job—because the timber industry is part of the basic

economy, every timber job supports one other job in the rest of the

economy—in retail, wholesale, and service sectors. So you can just

about double that number of jobs to get the total job losses. So you

have about 37,500 jobs lost in the timber industry but that leads

to a loss of another 37,500 jobs in the rest of the economy, therefore, you are talking about 75,000 jobs lost because of this Forest

Service policy that has led to the decline in timber harvests.

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Senator ENZI. Another thing that, of course, we apply in Wyoming is also the total population impact because each of those jobs

represents three other people that are in the family, too. So now

we are up around 300,000 people that are being affected by the

timber. And, of course, all of those are not in Wyoming but our

total population in Wyoming is 480,000 so a small change in forest

policy makes a big change in the lives of our people.

Mr. MCKILLOP. It is very destructive to family structures. It

leads to break-ups of families or moving them. It is extremely hard

on those communities.

Senator ENZI. Again I point to the log over here. One of the comments that was made was that timbering has gotten this bad name

in the United States but again they are interested in forest health.

It is the future of jobs there, too. And it was pointed out that one

of the big differences between a clear-cut, which is never a clearcut anymore but a clear-cut done by a timbering company and one

done by Mother Nature is that the timbering company respects 200

feet from a stream.

So thank you both for your testimony.

Senator Crapo.

Senator CRAPO. Thank you, Mr. Chairman. I also will be brief because we do want to get our last panel on here in the 8 minutes

we have left. So I would just state, Mr. McKillop, I assume that

you would agree with the SBA Office of Advocacy’s comments to

the Forest Service that their proposed rulemaking, particularly on

the roadless rule, for example, does have a significant impact on

small businesses.

Mr. MCKILLOP. Absolutely. I read the written testimony from the

Forest Service, and I think it is totally incorrect to say that these

actions will not have an effect on small businesses.

Senator CRAPO. Thank you very much.

I would just ask a question quickly here, and that is, you indicated that there could possibly be more damage to the public lands

if we do not properly manage the grazing activities because that

would force other uses of these lands, such as development and the

like, and I think that was very well stated in your testimony.

Could you also comment on what I see as the flip side of that?

Does grazing necessarily conflict with our ability to manage these

public lands in a way that will maintain them as strong, healthy

forests in the future indefinitely?

Mr. VAN TASSELL. I am not an ecologist but I work with several

ecologists and from what I have seen and heard and been around,

they are very compatible. The grazing can be used as the management tool. In fact, I know for the sheep industry, some sheep producers are paid to graze some Canadian forests to help the ecology.

Senator CRAPO. Well, thank you. Again we could go into much

more and I would like to but we just have a few minutes left and

I would like to see our next panel get up here. Thank you very

much.

Senator ENZI. Thank you. I do appreciate the expertise represented here.

The next person, our final panel, is Deputy Chief of the Forest

Service, Jim Furnish. We appreciate you being here today. I understand that you are missing a major leadership conference in ConVerDate 11-MAY-2000 14:27 Jun 11, 2001 Jkt 010199 PO 00000 Frm 00204 Fmt 6633 Sfmt 6602 E:\HEARINGS\68240 pfrm09 PsN: 68240
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necticut. I understand that is where Mr. Dombeck is at the moment.

We had the people from out of town come first because they have

to travel and they need to deliver their entire testimony. Mr. Harkin and the Democrats have objected to anybody having a hearing

of over 2 hours today and it severely limits our capabilities.

We, of course, had hoped that Chief Dombeck could join us and

are terribly disappointed that he did not. We will be submitting

some questions for him to answer; at this point I will let you begin

your testimony.

STATEMENT OF JAMES R. FURNISH, DEPUTY CHIEF, NATIONAL FOREST SYSTEM, FOREST SERVICE, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

Mr. FURNISH. Mr. Chairman and Members of the Committee,

thank you for the opportunity to be here. Knowing you have limited time, I am going to keep my remarks very brief to provide you

ample opportunity to ask questions if you would care to.

We have three basic parts of our organization that try to address

the needs of small business. One is our State and Private Forestry

Organization, which is really our outreach effort to communities

and the business community in America. We also have a research

community through facilities like our Forest Products Lab in Madison, Wisconsin, that for many decades has sought to work in innovative ways with private business to develop the necessary tools

and technology to enable small business to thrive. Then, really, the

last is the National Forests, most of which are in the Western

United States, where we feel we are inextricably linked, as has

been amply testified to earlier, with small businesses and small

communities throughout rural America.

With respect to some of the regulations the Forest Service currently has in operation, it is true that we have made the determination that neither the planning regulation nor the roads policy,

we feel, has a significant effect on a substantial number of small

businesses. However, the roadless policy that is now undergoing

final preparation, we did complete an Initial Regulatory Flexibility

Analysis and we are proceeding with the assistance of the Small

Business Administration Office of Advocacy to address their concerns. We are in preparation of a Final Regulatory Flexibility Analysis to comply with the legal requirements.

I think in summary, I would just say that National Forest lands

are experiencing an ever-increasing demand for a variety of uses

from a growing and increasingly diverse population. There is a continuous demand for commodity production, along with an increasing demand for recreation, water, wildlife, fish, and other tangible

and intangible goods and services.

We realize that there are diverse and many needs and requests

to use National Forest System lands. We try to work with small

businesses at the local level, as well as with the Small Business

Administration to evaluate, resolve, and address the impacts of

competing uses on these small businesses.

Some local communities may experience local hardships, as has

been testified to earlier. We plan to focus our efforts in these few

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communities to help develop community-led efforts to mitigate impacts and help them diversify their economies.

We believe that today the opportunities for job creation in new

stewardship industries are immense. Maintaining our existing

roads, facilities and recreation infrastructure, reducing fire risk,

and restoring watersheds could lead to thousands of high-paying

private sector jobs that emphasize ecosystem restoration and forest

stewardship.

This concludes my verbal testimony. My written testimony has

been submitted. I would be happy to address any of your questions.

[The prepared statement of Mr. Furnish follows:]

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Senator ENZI. Your entire testimony will be a part of the record.

I am going to keep a very close eye on the clock because I am

notified that if we do not shut down the hearing by the 11:30 time

that the whole hearing is null and void, and we certainly do not

want that to happen because we have had some excellent testimony.

I have to say that I want to have more information about why

we are nationalizing the National Forests instead of keeping the

practices at the local level where there was a local forester who

knew what was going on. We have gone to a one-size-fits-all policy

in the Forest Service. I can tell you the forests out here do not look

anything like the forests in Wyoming, and you cannot manage a

forest in Wyoming the way you manage a forest here. Out there we

need as much water as we can get. Out here they are trying to

drain it off.

I really want to know more about why you are trying to avoid

small business input. I was particularly interested in your comment that you are going to comply with the legal requirements.

Our interest is not in your complying with the legal requirements.

Our interest is in your finding out what small businesses need and

trying to interact with them and work with them. When we talk

about complying with the regulations, it sounds like you are going

to meet whatever you can, staying within any loopholes that we

might have built into the law, and that is what we are talking

about—passing some additional laws to plug up those loopholes.

I see the yellow light is on and I do not want this hearing to be

null and void so we will be providing you with additional questions

and you can provide additional comments.

With that, I will adjourn the hearing and leave the record open.

[Whereupon, at 11:29 a.m., the Committee was adjourned.]

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