Log Export and Import

Restrictions of the U.S.

Pacific Northwest and British

Columbia: Past and Present

Christine L. Lane

United States

Department of

Agriculture

Forest Service

Pacific Northwest

Research Station

General Technical

Report

PNW-GTR-436

August 1998
Author CHRISTINE L. LANE is a consultant with The Walter Group, 1109 First Avenue,

Seattle, WA 98101. This report was prepared when she was a research economist

with the Pacific Northwest Research Station, Forestry Sciences Laboratory, 4043

Roosevelt Way NE, Seattle, WA 98105.
Abstract Lane, Christine L. 1998. Log export and import restrictions of the U.S. Pacific Northwest and British Columbia: past and present. Gen. Tech. Rep. PNW-GTR-436.

Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest

Research Station. 61 p.

Export constraints affecting North American west coast logs have existed intermittently since 1831. Recent developments have tended toward tighter restrictions.

National, Provincial, and State rules are described.

Keywords: Log exports, log imports, log embargoes, log trade restrictions.

Summary From being a nuisance, and an inhibitor of national growth and expansion, to providing economic security, timber has played a strategic role in the development of

both the U.S. Pacific Northwest and British Columbia. Over the years, an evolution in

thinking has changed the approach of some regulations banning log exports and, in

other ways, has further solidified existing legislation. This paper will speak to the evolution of export and import restrictions, from their inception to the present day, pertinent to the United States and British Columbia. The typical evolution has been to

become progressively more restrictive regarding the use of timber from public lands

until judicial procedures deem certain restrictions unconstitutional, which has occurred

with increasing frequency over the years. Legal remedies, however, tend to follow

these decisions and to reinstate similar laws limiting exports or imports.

The tone of the legislation has been to maintain economic stability, provide natural

resources for national needs, and more recently, to preserve the existing resource

from overharvesting or pest infestation, or both, and to officially direct the use of

public forests toward multiple use.

These regulations are constantly evolving, and at printing, new regulations are on the

drawing board for both British Columbia and Alaska. Federal legislation now bans the

export of timber (logs) from all public lands (State and Federal) in the continental

United States west of longitude 100o W. under the Forest Resources Conservation

and Shortage Relief Amendment Act of 1993, which has provisions to ban log exports

from State lands if the State refuses to enact such regulations abiding by the amendment. Alaska cannot ship any timber in log form from public lands within its

boundaries under the authority of the Organic Act of 1927. Meanwhile, British

Columbia has controlled log exports with restrictions similar to those in place in

Alaska.

Due to harvest restrictions, supply limitations, and price fluctuations, timber buyers are

beginning to import timber into North America in increasing volumes. This poses a

competitive situation, as well as a pest and disease risk that may be carried into North

America with the imported timber. To caution against such an infiltration, both the

United States and Canada are assessing and implementing new regulations to specifically ban the import of some wood products. (These regulations do not apply to timber exports between the two countries.) The United States has banned log imports

from all but Chile and New Zealand; although importing procedures for wood products

from outside the United States and Canada have been drafted and are undergoing review. Canada, meanwhile, has decided to conduct a pest-risk assessment for each

potential exporting country. So far, only former Soviet Union countries have been directed to the necessary pest-risk assessment procedures before importation into

Canada.
Specific agency actions, judicial decisions, and restrictions regarding Native American

lands are elaborated on in the text. A timeline also is provided that summarizes the

acts, rulings, agreements, and decisions that have occurred over the course of the

development of these timber regions.

Contents 1 Historical Economic Conditions in North America

3 United States—Federal Rules and Regulations

3 The Early History

3 The Last 25 Years

21 Bureau of Indian Affairs

22 Alaska

27 Pacific Northwest States

27 The States’ Regulatory Authority

28 Washington

29 Oregon

32 Alaska

33 California

35 Idaho

36 Montana

37 Export Restrictions for British Columbia

37 A Comparative History

39 Early Provincial Regulations

40 Provincial Legislation Through World War I

40 Provincial Legislation: Recent Years

41 Canadian Regulations

41 Federal Regulations, World War II to Present

42 British Columbia Agencies and Export Procedures

43 Current Procedures

45 Log Exports from Indian Lands in British Columbia

45 Import Restrictions

45 United States

47 Canada

47 Acknowledgments

48 Appendix: Timeline
Historical Economic

Conditions in North

America

During the days of exploration and colonization, log exports were a highly prized

commodity valued for their role in assuring naval power. The logs and their

derivatives were used by the “mother countries,” such as England and France, to

build large fleets to control the high seas. The first recorded shipment of masts from

the Colonies was sent from Virginia to England in 1609, and other shipments soon

flowed from what is now the United States and Canada. Because of this continuous

demand, by 1780-81, all masts on the ships in the English, French, and Spanish

navies were made of American timbers.1

But as common history goes, the Colonies rebelled against the occupation of the

mother countries, such as England, who until that time had (through the Broad Arrow

policy of 1691) reserved all trees more than 24 inches (61 cm) in diameter for the

Royal Navy. This successful liberation of the United States led the timber market to

wane as logs became more of a nuisance to the rapidly expanding population of this

well-forested country. Timber literally stood in the way of the blossoming population

that demanded agricultural sustenance, not more wood. The first colonial legislation

for logs and log rafts on waterways was introduced in 1752, based on the following:2

First, the forest had great money possibilities. Its use should be regulated,

therefore, so that the greed or carelessness for the few should not injure to

the disadvantage of the many. Second, the exhaustion of timber easily got

at and brought to mill was possible, but the total exhaustion of the forests was utterly impossible. Third, even if the forests were totally cut away,

it would be no crying matter, for they were in many respects a nuisance.

This supposedly “limitless resource” was hampering economic and agricultural growth

and development. Consequently, with the resource in such abundance and minimal

foreign buyers, the log export market stagnated until late in the 20th century.

The log export revival was primarily a west coast phenomenon. A few entrepreneurs

began to recognize the old-growth forests of the U.S. Pacific Northwest as a potential,

untapped asset. The concurrent development of operable ports and waterways in the

Northwest encouraged the emergence of an unpredictable, sputtering log export

market. British Columbia tapped this asset as a lucrative revenue builder as well.

Since the beginning of the 20th century, however, political pressures have arisen over

whether to continue to allow log exports from the United States—particularly during

lean times and recessions when the economy is weakened and jobs grow scarce.

This pattern has continued to the present day.

Those arguing against log exports have claimed that the process employs fewer

people than are required to manufacture lumber and other remanufactured wood

products, and consequently, fewer manufacturing plants are built domestically to

process the timber. Exporting of logs, purportedly, causes a nation’s economy and a

country’s general welfare to suffer. These objections have been effective in raising

1 Jenks, Cameron. 1944. The development of governmental

forest control in the United States. New York: Da Capo

Press: 14.

2 Cameron 1944: 18 (see footnote 1).

1
public concern, which has led to legislation restricting exports. Direct benefits from

such restrictions have encouraged growth in some areas of the timber industry, such

as domestic manufacturing, employment, increased revenues, and more recently,

protection of a renewable resource and the environment.

In general, during the early and mid 1900s, Federal legislation in the United States

and Canada was primarily passive regarding log exports, in an effort to avoid interfering in domestic commerce. After World War II, North America discovered that the

once-sputtering demand for timber exports had been ignited by foreign demand and

could be fueled by a plentiful supply of North American timber. The demand generated

jobs and revenues in the domestic market. Over the next 20 years, however, as foreign and domestic demand for raw timber continued to rise, supply began to wane:

old-growth timber stands were harvested faster than they could be replaced. As the

economy and timber markets faltered, Federal, State, and Provincial legislation was

introduced, or amended, to provide a prominent, uniform basis for log export

restrictions.

This paper will examine the past and present export policies that have led to current

log export prohibitions, and how these regulations are implemented by government

agencies in the United States and the Province of British Columbia. Also, newly

implemented import restrictions have been established to prevent disease and insect

infestation: this issue will be addressed too.

The evolution of restrictive log export and import rules and regulations will be discussed in chronological order, by country, with some mention of the contributing economic and social conditions that led to their enactment. The U.S. congressional decisions regarding log export regulations and the role of the Federal agencies in implementing these rules and regulations will be presented in the first part of this paper,

followed by State restrictions for Washington, Oregon, Alaska, California, Idaho, and

Montana. British Columbia’s Provincial and Federal (Crown) legislation will then be

discussed. The most recent addition to timber trade rules regarding import regulations

for the United States and Canada can be found in the last section of the text. A timeline is appended. Some of the information included in this paper is repeated from

earlier reports by Austin,3 Lindell,4 and Hines5 as well as a British Columbia log export history compiled by Shinn.6

3 Austin, John W. 1969. Log export restrictions of the Western

States and British Columbia. Res. Pap. PNW-91. Portland,

OR: U.S. Department of Agriculture, Forest Service, Pacific

Northwest Forest and Range Experiment Station. 13 p.

4 Lindell, Gary R. 1978. Log export restrictions of the Western

States and British Columbia. Gen. Tech. Rep. PNW-63.

Portland, OR: U.S. Department of Agriculture, Forest Service,

Pacific Northwest Forest and Range Experiment Station. 14 p.

5 Hines, Judith A. 1987. Log export restrictions of the Western

States and British Columbia. Gen. Tech. Rep. PNW-GTR-208.

Portland, OR: U.S. Department of Agriculture, Forest Service,

Pacific Northwest Research Station. 13 p.

6 Shinn, Craig W. 1993. British Columbia log export policy:

historical review and analysis. Res. Pap. PNW-RP-457.

Portland, OR: U.S. Department of Agriculture, Forest Service,

Pacific Northwest Research Station. 52 p.

2
Some today would believe that from 1831 to 1905, the restrictions on log exports of

timber from public lands were as restrictive as the legislation of the 1990s. The first

law referring to log exports by the U.S. Congress was issued long before 1900: the

Antitrespass Law of 1831. Denying purchasers access to timber harvested from public

lands with the intent to export the logs, the Antitrespass Law was one of the many

policies enacted during the mid 1800s that promoted agricultural development,

settlement of the west, and economic growth.

None of the regulations promoting development of the Western United States, however, contained provisions that encouraged or allowed the general public to acquire

and develop the vast acreage of what was interpreted at the time to be surplus or

“limitless” timbered lands. To foster the development of these timbered lands “unsuitable” for farming, and to promote economic welfare and national security, Congress enacted the Timber and Stone Act of 1878 (20 Stat. 89) to supersede the

Antitrespass Law. This act provided 160-acre (64-ha) lots in Washington, Oregon,

California, and Nevada for sale to the public, conditional on the purchaser’s promise

to abide by the provisions within the act, one of which forbade the removal of timber

from public lands for export. This act, intended to help individuals acquire timber

lands, was unfortunately abused by speculators and the timber industry, thereby

leading to the enactment of more restrictive laws.

The Organic Administration Act of June 4, 1897, and the Act of May 14, 1898, were

two such laws. Also known as the Sundry Civil Expenses Appropriations Act of 1897,7

the Organic Act authorized the sale of timber from National Forests for use in the

State or Territory where it was harvested, but it prohibited interstate exports. Similarly,

the Act of May 14, 1898, extended the homestead laws to Alaska, and authorized the

Secretary of the Interior to sell timber from the public lands in Alaska for use in the

Territory, but not for export.

But by 1905, because the Secretaries of the administering agencies could not authorize exports, the Organic Administration Act of 1897 was found to be too restrictive. To remedy the situation, a provision was added to the annual Appropriation Act

Key regulations Year

Antitrespass Law 1831

Timber and Stone Act 1878

Organic Administration Act 1897

Act of May 14, 1898 1898

Annual Appropriation Act Riders 1905-26

Act of April 12, 1926 1926

Act of May 11, 1926 1926

Sustained Yield Forest Management Act 1944

Small Business Set-Aside Act 1958

United States—

Federal Rules and

Regulations

The Early History

7 Organic Administration Act of June 4, 1897, Ch. 2, 30

Stat. 11, as amended; 16 U.S.C. 473-475, 477-482, 551.

3
in 19058 allowing the Secretary of Agriculture to authorize timber exports. Subsequent

appropriation act riders were approved each year until 1926: Each rider stated essentially the same thing (see footnote 8):

The Secretary of Agriculture may, in his discretion, permit timber and other

forest products cut or removed from the national forests to be exported

from the State or Territory in which said forests are respectively.

Each renewed provision essentially annulled the Organic Act of 1897 for the ensuing

year (“at first with the exception of Idaho and South Dakota, but [after] 1913, without

such exceptions”).9

By the 1920s, the legality of legislating within an appropriation act was challenged.

During the House debate for the appropriation bill for fiscal year ending June 30, 1924,

the provision was not renewed based on the question of legality; the rider was later

restored in the Senate version of the bill.

By this time, both Secretaries supported permanent export legislation. Secretary of

Agriculture Jardine wrote (see footnote 9):

This department believes that permanent legislation to replace the prohibition in the Act of June 4, 1897 is very desirable and necessary as a safeguard to the business enterprises based on the logging of national-forest

timber.

In light of these recommendations and to avoid possible legal complications, the Act

of April 12, 1926,10 was passed, relaxing but not amending the Organic Act of 1897,

which still prohibited interstate exportation.11 The act granted the Secretaries the

authority to allow log exports (see footnote 10):

Timber lawfully cut on any national forest, or on the public lands in Alaska,

may be exported from the State or Territory where grown if, in the

judgment of the Secretary of the department administering the national

forests, or the public lands in Alaska, the supply of timber for local use will

not be endangered thereby, and the respective Secretaries concerned are

hereby authorized to issue rules and regulations to carry out the purpose of

this Act [emphasis added].

Local use, the primary qualifier for future regulating decisions, was later interpreted as

“the supply of timber for local consumptive use rather than the supply of timber to

meet the needs of local mills processing timber for non-local markets as well as local

8 Agricultural Appropriation Act of March 3, 1905, 33 Stat.

861, 873.

9 Jardine, W.M. 1926. Letter from the Secretary of Agriculture,

dated January 20, to Hon. N.J. Sinnott, chairman, Committee

on the Public Lands, House of Representatives.

10 U.S. Congress. Act of April 12, 1926, Exportation of

Timber, P.L. 69-100, Ch. 117; 44 Stat. 242, as amended; 16

U.S.C. 616, 617.

11 The 1897 act was later amended by the National Forest

Management Act (NFMA) of 1976, P.L. 94-588, 90 Stat. 2949,

as amended; 16 U.S.C. 472a et. seq. to remove the ban

interstate log exports.

4
markets.”12 This interpretation remains the primary authority regarding timber sales

from National Forests in Alaska.

Even though this act gave the Secretaries permanent authority to restrict the export

of National Forest timber, the ensuing Appropriation Act of May 11, 1926,13 permitted

the exportation of forest products: “...the Secretary of Agriculture may permit timber

and other forest products to be cut and exported beyond the State in which the forests are situated.”

This open log export policy approach continued until public and industry concerns led

to change in the late 1960s.

Other legislation enacted during the 1940s and 1950s also contributed indirectly to log

export controls by requiring primary processing or domestic manufacturing. The Sustained Yield Forest Management Act of March 29, 1944,14 was enacted to provide

timber harvests on a sustained-yield basis to maintain the timber resource and industry and to provide jobs for the involved communities through formal agreements.

Stipulations within the agreements indirectly restricted log exports, for they required

between 80 and 100 percent of the timber to be manufactured within the community.

In time, one cooperative agreement among a local community, the Federal government, and the Simpson Timber Company emerged, while five Federal Sustained Yield

Agreements were created between communities and the government.

Another act, which still restricts log exports, is the Small Business Set-Aside Act of

1958.15 The purpose of the act is to enable small timber companies (less than 500

employees) in local communities to be competitive with large timber firms. Provisions

of the act permit the “set-aside” of Federal timber for small businesses unable to

acquire sufficient supplies of timber from their market areas through normal market

means. Although the act did not specifically impose export restrictions, the Forest Service mandated that only 30 percent of the timber purchased by a recognized small

business could be sold without domestic manufacture by the purchaser, whereas in

Alaska, the small businesses were required to process only 50 percent of the logs

instead of 70 percent because of the large volume of pulp logs often present in

sales. These small Alaska mills, however, tended to do most of the primary

manufacturing themselves because they received higher returns from the more

labor-intensive, value-added products.

All timber from these set-aside sales must now receive domestic processing, since

the passage in the early 1970s of Federal regulations prohibiting the export of logs

from Federally owned lands. Purchases of set-aside timber are now subject to the

same limitations as those affecting the National Forests.

12 Brief Summary of General Counsel’s Memorandum of July

10 in Reply to the Questions Submitted by Senator Morse of

Oregon relative to the Secretary’s Authority to Sell Timber

from the National Forests for Export. [Date unknown].

Washington, DC: U.S. Department of Agriculture, Office of

the General Counsel:4.

13 Appropriations Act of 1926, Ch. 286, 44 Stat. 512.

14 Sustained Yield Forest Management Act of March 29,

1944, 54 Stat. 132 (as amended); 16 U.S.C. 583-583i.

15 Small Business Set-Aside Act of July 18, 1958, 72 Stat.

384, as amended, pt. 121.

5
The Last 25 Years After World War II, timber, then seen as an overabundant, inexhaustible resource,

quickly entered the export market. The export market was serving two purposes: first,

it was looked on favorably as an outlet for excess harvested timber; and second, the

additional demand led to an increase in prices in both the domestic and foreign markets, thereby encouraging higher returns. This seemingly unlimited demand and rising

prices eventually had to peak.

In 1962, the Columbus Day Storm occurred that left about 11,190 million board feet

(mmbf; about 65 million m3

) of blowdown, or salvage timber, in western Washington

and western Oregon—much more timber than could be feasibly consumed by the

domestic market at that time. As a result, the industry and Federal government

cooperatively encouraged the export of surplus domestic timber from the ongoing

salvage operations after the storm.16

The rapid growth in foreign demand for raw logs led to rising U.S. concerns regarding

the domestic impact of the log exports, especially to Japan. Total log export volumes

had grown by 560 percent between 1962 and 1967, to 1600 mmbf (about 7.2 million

m3

), and export volumes for 1972 were forecast at 4,500 mmbf (about 20 million m3).

Concerned that an unharnessed log export policy would jeopardize a viable domestic

wood processing industry in the Pacific Northwest, wood product manufacturers urged

the Departments of Agriculture and the Interior to restrict exports. Successive

meetings

occurred between industry and U.S. and Japanese government representatives to

alleviate these concerns and find an equitable solution. As a result of these efforts,

joint determinations were issued by the Secretaries of the Interior and Agriculture.

Joint determinations by the Secretaries of Agriculture and the Interior—

Key provisions—

• Prohibited export of all but 350 mmbf (about 1.6 million m3

) of Federal timber

from western Washington and western Oregon.

• Determined Port-Orford-cedar (Chamaecyparis lawsoniana (A. Murr.) Parl.) and

Alaska-cedar (C. nootkatensis (D. Don) Spach)17 to be surplus to domestic

needs.

Issued April 16, 1968, by the Secretaries of Agriculture and the Interior, the joint

determinations specified a primary processing requirement for logs originating from

Washington and Oregon, effective April 22.18 The announced rationale behind the joint

determinations was to ensure an ample supply of timber to meet domestic demand

while improving the National Forests for future generations. Restricting the export of

16 Export restrictions did not yet exist, except for a negligible

number of Small Business Set-Aside Sales or from

cooperative agreements, so this was purely a matter of

marketing.

17 Also commonly known as Alaska yellow-cedar.

18 The authority for the Secretary of Agriculture’s action is

contained in the Organic Administration Act of June 4, 1897,

16 U.S.C. 475, 551. In the case of the Secretary of the

Interior, the Oregon and California Railroad Act amendments

of August 28, 1937, 50 Stat. 874, provided the enabling

legislation.

6
unprocessed logs harvested from Federal lands, the determinations were deemed

necessary to maintain a vital domestic wood processing industry capable of

processing the sustained yield of timber from selected areas (see footnote 4).

The determinations provided for U.S. primary processing of all but an annually predetermined 350 mmbf (about 1.6 million m3

) of Federal timber, harvested in western

Washington and western Oregon (and a few areas in the eastern portions of the two

states).19 Any cants sawn on two sides, squares that were 8 inches (20.32 cm) or

less in thickness through the sawn dimension, smaller sawn products, veneer, pulp,

or chips, were considered to have received primary processing.20 Log exports

originating on Federal lands within the Grays Harbor Federal Sustained Yield Unit and

the Shelton Cooperative Unit were not included in the 350-mmbf (1.6-million m3

)

exemption because the sustained yield agreements already mandated 95 percent

primary manufacture within the units.

A plan addressing the operating and administrative details of the determinations

accompanied the joint determinations. The plan included a definition of processed

products and procedures for declaring certain species exempt. Subsequently, the

Secretaries exempted Alaska-cedar and salvage Port-Orford-cedar (except for select

arrow-shaft material), because those species were considered surplus to domestic

needs.

The Secretary of Agriculture based his authority for issuing the joint determination on

the 1897 Organic Act.21 The Secretary of the Interior based his authority on the

Oregon and California Railroad Act.22

Below, as with subsequent acts discussed, are the actions taken by the primary

overseeing agencies, the USDA Forest Service and the USDI Bureau of Land

Management (BLM). The agency actions for Alaska differ and will be addressed later.

19 Secretary of Agriculture. 1968. A determination by the

Secretary of Agriculture concerning primary processing of

timber from National Forests of the Pacific Northwest.

Specified in the Secretary of Agriculture’s April 16, 1968,

memorandum to the Chief of the Forest Service. On file with:

Pacific Northwest Research Station, 4043 Roosevelt Way,

NE, Seattle, WA 98105.

20 Austin 1969: 1 (See footnote 3).

21 There has been much confusion over what authority many

of these actions reflect. The Secretaries considered issuing

the joint determination under the previously mentioned Act of

1926 (see footnote 10). However, they were counseled that

there was no justification in the act because local timber

supplies would not be endangered. Not until 1976, when the

National Forest Management Act (see footnote 11) was

passed, with its repeal of previous interstate-sale restrictions,

did the Organic Act become relevant.

22 Oregon and California Railroad Act of 1866, July 26, 1866

c. 242; 14 Stat. 239.

7
Agency regulations23—

Although the joint determinations were scheduled for review and renewal in June

1969, the rules were superseded by the Morse Amendment, effective January 1, 1969.

Morse Amendment to the Foreign Assistance Act of October 8, 196824—

Key provisions—

• Extended export prohibition to all States west of the 100th meridian, including

Alaska.

• Distributed 350 mmbf (1.6 million m3

) allowable export allotment among

Washington, Oregon, and California.

• Permitted the Secretaries of Agriculture and the Interior to declare certain

amounts of specific species surplus to domestic needs.

• Authorized the Secretaries to issue rules and regulations regarding substitution.

• Authorized the Secretaries to exclude sales of less than US$2,000 at their

discretion.

Forest Service

Some of the Forest Service’s earliest regulations on log export restrictions in the

lower 48 States originated as a result of

the 350-mmbf (1.6-million-m3

) export exemption allocated in the Secretaries’ joint

determinations of 1968. The Forest Service was allotted 290 mmbf (1.3 million

m3

) and distributed this export allowance

throughout the National Forests in

Washington and Oregon based on the

timber exports from those forests in the

previous year. Of eligible timber sales

over US$2,000, Washington received

199 mmbf (900,000 m3

) and Oregon’s

National Forests were allocated 91 mmbf

(410,000 m3

).

The Forest Service did stipulate that if a

restricted (or nonexempt) timber sale did

not receive any bids when offered, then

the sale could be offered again without

the primary manufacturing requirement.

Bureau of Land Management

The first regulatory actions by BLM on

log export restrictions stemmed from the

1968 joint determinations. The BLM chose

to distribute the 60 mmbf (270,000 m3

) of

exempt sales to five western Oregon districts (because most BLM land is in

Oregon) in proportion to each district’s allowable cut. The exportable timber allowance was allocated to sales >100,000

board feet (bd. ft.; 450 m3

) with strict conditions. All sales under that volume were

required to receive 95 to 100 percent of

their primary, completed manufacture not

just domestically, but within the States of

Washington, Oregon, and California.

Poles, pilings, and structural timbers were

considered exportable by both the Forest

Service and BLM; however, BLM required

written approval before the materials

could be shipped from the region.

23 Austin 1969: 6 (see footnote 3).

24 Foreign Assistance Act of [October 8] 1968, 82 Stat. 966,

pt. IV.

8
Throughout the late 1960s, Senator Wayne Morse (Oregon) and many other Congress members were advocating restrictive export legislation. Senator Morse, however, objected to the selective limitations of the joint determinations, which applied

only to Washington and Oregon, and argued that the provisions were inadequate to

achieve an equitable solution to the timber supply and job shortage. He also campaigned against the regulations, claiming that the determinations simply directed the

more lucrative foreign log export market to California coastal ports.

In response to the joint determinations, Senator Morse proposed part IV of the Foreign Assistance Act of 1968 (82 Stat. 966), which passed and amended the Act of

April 12, 1926 (see footnote 24). Authority for the regulations contained in the Morse

amendment were the same as the Act of April 12, 1926.

Known commonly as the Morse Amendment, the legislation extended the area

covered by the export ban to all Federal lands west of longitude 100o W., including

Federal lands in Alaska. While maintaining the 350-mmbf (1.6-million-m3

) export

allowance established by the joint determinations, the amendment indicated that

California was to be allocated some of the unrestricted Federal timber sales, along

with Washington and Oregon.

The amendment also authorized the Secretaries of Agriculture and the Interior to

issue rules and regulations to prevent the substitution of Federal timber for nonFederal timber in the export market and permitted them to declare certain amounts of

unprocessed timber surplus to domestic needs and thus eligible for export. These

decisions were to be based on information from public hearings and with additional

counsel to determine which, if any volumes, species, and grades might be surplus to

local needs. This differed from the joint determinations in that the Morse Amendment

contained specific provisions, and the previous legislation only described procedures

to be followed.

The Morse Amendment applied to all future contracts, extended timber sale contracts

for timber in western Washington and Oregon that had been signed before the joint

determinations had been enacted, and extended contracts signed in other States west

of the 100th meridian before the enactment of the Morse Amendment.

Agency actions resulting from the Morse Amendment—

Forest Service

Similar distribution procedures (to those

in the joint determinations) were applied

under the Morse Amendment, although

minor agency regulation changes did occur

in 1970. These changes covered the allocation of the timber export exemption

by State to include California (187 mmbf

[840,000 m3

] to Washington, 88 mmbf

[400,000 m3

] to Oregon, and 15 mmbf

[68,000 m3

] to California). A hearing was

required to determine if that timber was

actually surplus to domestic needs before

a restricted sale without bidders could be

offered again without a primary manufacturing requirement.

Bureau of Land Management

Similar restrictions (to those in the joint

determinations) continued after the enactment of the Morse Amendment. Again

allocating its 60 mmbf (270,000 m3

) to

sales in its five districts within western

Oregon, BLM allowed the exemptions

only on sales volumes >2 mmbf (9,000

m3

) unless the sale was exempted by

the Oregon State Director of the Bureau.

No predetermined actions were mandated for sales not receiving bids. This

policy remained in place until changes

were made to comply with the Department of the Interior and Related

Agencies’ Appropriations Act of 1973.

9
Scheduled to expire on December 31, 1971, the provisions established in the Morse

Amendment were renewed through the end of 1973 by Congress as an amendment

to the Housing and Urban Development Act of 1970.25

Department of the Interior and Related Agencies Appropriations Acts—

Key provisions—

• Alaska no longer included in export restrictions.

• Secretaries directed to enact regulations to define and prevent substitutions.

• All log exports from Federal lands prohibited.

During the last 2 years of the Morse Amendment, economic conditions again changed

the timber market. An unprecedented housing boom occurred in both the United

States and Japan, which caused the demand for timber to be much greater than the

supply available. By the early 1970s, correcting for the subsequent domestic shortage

of timber became a topic of great debate. Many proposals for limiting log or lumber

exports, or both, from state, Federal, and even private lands were submitted to

Congress for consideration as possible solutions.

Finally in October 1973, a rider was attached to the Department of the Interior and

Related Agencies Appropriations Act of 1973,26 which completely banned the use of

funds appropriated to Federal agencies for processing Federal timber sales where the

timber may be exported. The first Appropriations Act rider stated:

No part of any appropriation under this Act shall be available to the Secretaries of the Interior and Agriculture for use for any sale hereafter made

of unprocessed timber from Federal lands west of the 100th meridian in the

contiguous 48 States which will be exported from the United States or

which will be used as a substitute for timber from private lands which is

exported by the purchaser.

In essence, the provision banned the export of any unprocessed timber from all

Federal lands west of longitude 100o W. in the continental United States. The Appropriations Act did not apply to Alaska, so the authority for Alaska’s timber regulations reverted to the Act of 1897 (16 U.S.C. 475; see footnote 7).

In this and in similar if not identical riders attached to the ensuing Department of the

Interior and Related Agencies Appropriations Acts, the Secretaries could not authorize

log exports in cases determined to be surplus to domestic needs, as had been allowed

by the Act of April 12, 1926 (see footnote 10). The rider also directed the Secretaries

to enact regulations to define and prevent substitution, versus merely authorizing them

to do as prescribed in the Morse Amendment.

Substitution restrictions were now sought to deter Federal timber purchasers from substituting Federal timber for private timber in the profitable export market. The congressional intent regarding substitution was not to control a purchaser’s buying and selling

25 Housing and Urban Development Act of 1970, P.L. 91-609,

Title IX, 84 Stat. 1817 (1970).

26 Department of the Interior and Related Agencies

Appropriation Act of [October 4] 1974, Sect. 301.

10
options, so provisions were included to provide for companies owning land in two separate market areas. These provisions allowed a company to purchase Federal timber

for the domestic market, without being penalized for purchasing private timber bound

for the export market from different market areas. An example would be a company

purchasing Federal timber from Oregon destined for domestic processing while

purchasing private timber from Washington.

Agency actions resulting from the appropriation acts—

Forest Service

Following the introduction of the first appropriations rider in October 1973, the

Forest Service incorporated regulations to

prohibit the export of unprocessed National Forest timber effective March 13,

1974. The regulations also elaborated on

what constituted unprocessed timber, defined cants as 8-3/4 inches (22.23 cm) or

less in thickness, and determined “market

areas” as lands encompassing the area

the processing plant used for sources and

markets for the National Forest timber

under contract. Surplus species qualifications also were established.

This historical level is based on the

3-year period, 1971-73, regardless of

whether the purchaser was in existence

or not. Historical levels of purchase and

export may be zero for firms or firms that

did not buy any National Forest timber or

export any private timber during the base

period. Firms with a historic purchase and

export level of zero could not buy National Forest timber in any year in which

they exported private timber. The historical level did not include volume of surplus species and did not constrain purchase of National Forest timber if it was

exported.

Then in 1974, the Forest Service defined

direct substitution as the purchase of timber from National Forest System lands to

be used in the place of private timber

bound for the export market. Direct substitution was considered to have occurred

when the purchaser continued to export

logs from private lands while increasing

their purchase of National Forest timber,

Bureau of Land Management

After a series of reviews and reluctant

changes, BLM finally amended the relevant parts of Title 42 of the Code of

Federal Regulations (where BLM regulations are found) in July 1976 to comply

with the 1973 appropriations rider forbidding the export or substitution of

Federal timber.

The first regulation proposal was published in 1974; it defined cant size as 8

inches (versus the 8-3/4 inches maintained by the Forest Service). The disagreement with the Forest Service concerning cant size finally was resolved in

December 1975, and 8-3/4 inches (22.23

cm) was the standard cant size published

in the June 1976 regulations. BLM also

initially defined a “market area” as all

lands west of 100o longitude, until it was

changed to match the Forest Service definition in July 1976.

The BLM also adopted the Forest Service restriction on third-party substitution

for all BLM sales, not just those over

US$2,000 and was more lenient than the

Forest Service in the definition of “substitution.” The BLM considered substitution to have occurred when a purchaser

increased both their purchase of Federal

timber and their exports of private timber

relative to their historical pattern. (To

commit substitution from Forest Service

sales, one had to increase only one or

the other while continuing the other

practice.)

11
or increased exports while continuing to

purchase Federal timber within the market area. The increase in Federal timber

purchases or exports was based on a

purchaser’s “historical level,” defined as

110 percent of the average annual volume of timber purchased and exported

by the buyer during 1971, 1972, and

1973. Potential purchasers, therefore, had

to prove, before they would be allowed to

bid on Federal timber, that they were not

practicing substitution. And the only way

to gain or transfer the “historical level”

was to acquire a qualified purchaser’s

entire company.

To further clarify the regulations and

incorporate changes, in April 1981, the

Forest Service updated Title 36 in the

Code of Federal Regulations, again. The

Forest Service published revised regulations in the Federal Register regarding

the export of timber from National Forest

System lands, substitution of such timber,

clarification of the definition of tributary

area, and a definition of unprocessed

western redcedar (Thuja plicata Donn ex

D. Don).27

Three years later, in 1984, the Forest

Service addressed and defined third-party

substitution and assessed the feasibility

of prohibiting that practice. The Acting

Associate Deputy Chief of the Forest Service defined third-party substitution as

“the acquisition of National Forest timber

from a National Forest timber sale purchaser by a firm which is not eligible to

purchase the National Forest timber

directly because direct purchase would

constitute substitution under 36 CFR

223.160.”28

27 Hines 1987: 4-5 (see footnote 5).

28 U.S. Department of Agriculture, Forest Service.

1984. Letter of January 11 from Acting Associate

Deputy Chief, Forest Service, to General Accounting Office, asking the feasibility of enforcing thirdparty substitution. On file with: Pacific Northwest

Research Station, 4043 Roosevelt Way NE,

Seattle, WA 98105.

12
It was decided not to prohibit the practice,

however, for fear that is would be too

difficult to enforce and would inhibit domestic trade. “The Forest Service believes it could not enforce a ban on thirdparty substitution without additional legal

authority and staff.”

29

The BLM agreed with this finding. It was

also believed that if the practice were

banned, some companies could acquire

National Forest timber at lower prices

because of decreased demand and competition, and hence the lower prices would

result in less government revenue and

disrupt traditional log markets and business practices.30

The following, though superseded by

the regulations accompanying the

Forest Resources Conservation and

Shortage Relief Act of 1990 and

1993, is still contained in the code of

regulations: The Department of the

Interior and Related Agencies Appropriation Act, 1976 (P.L. 94-165)

prohibits the use of funds appropriated

thereunder for sale of unprocessed

timber from Federal lands west of the

100th meridian in the contiguous 48

States which will be exported from the

United States or which will be used

as a substitute for timber from private

lands which is exported by the

purchaser. The law also provides that

the export restriction shall not apply

to specific quantities of grades and

species of timber which the Secretary

of the Interior determines to be

surplus to domestic lumber and

plywood manufacturing needs.31

29 U.S. General Accounting Office. 1985. [Title

unknown]. Report published January 28. On file

with: Pacific Northwest Research Station, 4043

Roosevelt Way NE, Seattle, WA 98105.

30 U.S. Department of the Interior, Bureau of Land

Management. 1985. Potential impacts of tightening

Forest Service log export restrictions. Washington,

DC: Resources, Community, and Economic

Development Division. 34 p.

31 U.S. Code of Federal Regulations. Title 43,

Chap II, Part 5400 through Sec. 3(c) (October 1,

1992) 50.

13
Export Administration Act of 1979—

Key provision—

• Banned export of western redcedar and waney lumber from State and Federal

lands in the continental United States. Exception by license only.

The Export Administration Act of 197932 and the regulations implementing the act

established the export ban for western redcedar and waney lumber from State and

Federal lands in the lower 48 States starting late in 1982. Federal and State lands in

Alaska and Native American trust lands everywhere are not affected.

Western redcedar was banned from export because the old-growth was specifically

suited for the manufacture of shakes and shingles, among other products. But

domestic manufacturing mills were being outbid for the old-growth trees by exporters

and therefore were left scrambling for supplies.

In accordance with the act, unprocessed western redcedar timber continues to be

banned from export from the United States to any destination, including Canada,

except with a valid export license. The last of these licenses was issued on September 30, 1979. Once processed into specific manufactured products, western redcedar

is exportable.

Forest Resources Conservation and Shortage Relief Act of 199033—

Key provisions—

• Greatly restricts substitution policy and prohibits indirect substitution.

• Sourcing areas defined.

• Prohibits almost all log exports from state-owned and federally owned lands in

the continental United States.

• Department of Commerce is the overseeing body.

• Revises surplus species determinants.

The export ban on federally owned timber based on the riders to the appropriation acts

seemed to provide a sufficient domestic supply, until a recession hit in the mid to late

1980s. Occurring at a time when much of the private timber supplies of harvestable

age had been tapped and harvested, this recession severely crippled the forest industry. “About 80% of the raw logs cut on lands owned by Washington State and about

half of those harvested on Oregon State lands in 1987 were shipped overseas without

being processed.”34

32 Export Administration Act of 1979, P.L. 96-72 (1979); 15

CFR 377.7.

33 Forest Resources Conservation and Shortage Relief Act of

1990, P.L. 101-382, 104 Stat. 714, Title IV of Customs and

Trade Act of 1990, 104 Stat. 629; 16 U.S.C. 620.

34 The Seattle Times. 1988. Backers of log-export bill finagling

a committee quorum. July 11; Sect. B: 7.

14
While demand for log exports was increasing exponentially throughout the 1970s and

early 80s, environmentalists were arguing that large areas of wildlife habitat were

being harvested and exported to foreign markets, and small mills were clamoring that

they could not competitively bid for private or State timber against the larger firms and

Japanese investors. In response to these concerns, Congress began considering further curbs on log exports. Numerous bills, some similar to those drafted in the early

1970s, were introduced into the House and Senate to limit log exports.

One bill eventually did pass. Approved August 20, 1990, and effective January 1,

1991, the Forest Resources Conservation and Shortage Relief Act of 1990 (FRCSRA

1990; see footnote 33) essentially prohibited log exports from all public lands west of

longitude 100o W. in the lower 48 States, except for a conditional 25 percent of

Washington State-owned timber. With the exception of the export restriction applying

specifically to unprocessed western redcedar enacted in 1982, FRCSRA 1990 was

the first Federal attempt to impose a blanket restriction on unprocessed timber from

Federal and State lands.

Based on “evidence of a shortfall in the supply of unprocessed timber in the western

United States” (see footnote 33), the goal of FRCSRA 1990 was to promote conservation of forest resources, ensure that the forest resources in the United States were

not exhausted, and guarantee a constant and available supply to meet domestic

needs. In essence, FRCSRA permanently renewed the provision in the Department of

the Interior and Related Agencies Appropriations Acts (see footnote 26) prohibiting

exports on Federal lands, thereby eliminating the risk of legal action for legislating

within an appropriation provision. This act also further refined and restricted various

methods of substitution and prohibited the purchase of State timber with the intent to

export it in unprocessed form:35

No person who acquired unprocessed timber originating from Federal lands

west of the 100th meridian in the contiguous 48 States may export such

timber from the United States, or sell, trade, exchange, or otherwise convey such timber to any other person for the purpose of exporting such timber from the United States, unless such timber has been determined...to be

surplus to the needs of timber manufacturing facilities in the United States.

The act provided for the Secretary of Commerce to declare certain volumes, quantities, and species surplus on Federal lands, as can the Secretaries of Agriculture and

the Interior. All species determined to be surplus are to be subject to review at least

once every 3 years. The blanket prohibition also included indirect (for example, third

party) substitution, in addition to direct substitution, for the first time in the history of

the Federal regulations.

Congress also determined that no person could “purchase from any other person

unprocessed timber...if such person would be prohibited from purchasing such timber

directly from a department or agency of the United States” (see footnote 33), thus

making indirect substitution illegal.

35 FRCSRA 1990, Title IV Sect. 489 (see footnote 33).

15
Under the appropriations riders of the 1970s and 80s, direct substitution had been

allowed, depending on the supervisory agency with certain specifications in regard to

their historic level. The proportion of allowable substitution available to purchasers in

earlier years through purchasing and exporting quotas was precluded with this legislation, though a limited transition period was incorporated. Sourcing (or market) areas

are the alternatives in FRCSRA 1990 to the historical quotas.

The sourcing areas, established in predetermined geographic locations, allowed a

purchaser with multiple operations in more than one geographic region to purchase

public timber for domestic processing, while purchasing private timber for export as

long as it had been harvested in a different market or sourcing area.

By defining sourcing areas, the act allowed a purchaser with multiple operations to

purchase Federal timber and privately owned timber without committing substitution.

For example, firms with timber operations in both Oregon and in Washington can purchase Federal timber in a sourcing area of eastern Oregon for primary manufacture

while also purchasing private timber in Washington for export. This is considered feasible because it would be uneconomical to transport timber from Oregon to Washington

in order to substitute it for private timber exports.

According to the interim rules established within FRCSRA 1990, to be approved for a

sourcing area, a person (company) must not have exported unprocessed timber from

private lands within that sourcing area in the previous 24 months; they also could not

export that timber from that area once approved.

During the first year after enactment, some purchasers of public timber were able to

export their timber under a grandfathering clause of sorts applying to the Shelton

Cooperative Sustained Yield Unit, which harvests Federal and private timber.36 The

grandfather clause permitted the Simpson Timber Company, the corporate partner in

the only Federal cooperative agreement, to substitute a volume equal to 66 percent of

their historical export quota during fiscal year 1989. By 1995, the Shelton Cooperative

Unit was to have gradually reduced substitution volume from the cooperative forest

until no more Federal timber was substituted for export in unprocessed form.

The most drastic measure of FRCSRA 1990, however, was the provision prohibiting

State-owned timber from export without first undergoing primary processing. This was

the first Federal provision absolutely prohibiting the export of State-owned timber.

Washington, because it was selling more than 400 mmbf (1.8 million m3

) annually,

was the only State allowed to continue to sell some of its timber to exporting purchasers. All other States west of the 100th meridian in the continental United States

were ordered by the Secretary of Commerce to prohibit the export of unprocessed

timber originating from public lands, effective January 1, 1991.

Washington was ordered to prohibit 75 percent of its annual sales from export unless

the timber first met the primary processing requirement. Determining the species,

grade, and geographic origin of unprocessed timber, representative of its total timber

sales program, was up to the State. Yet, if the sales volumes for the State fell below

36 The act actually applies to cooperative sustained yield units

in general; however, the Shelton Unit is the only one created

before opposition from other private companies stopped

formation of additional cooperative units, because the

companies claimed inequities in bidding practices were

imposed by such agreements.

16
400 mmbf (1.8 million m3

) by 1996, the Secretary of Commerce was authorized to

prohibit exports from State-owned timber lands in Washington. If necessary, the

Secretary also would increase the amount of unprocessed timber to be prohibited to

achieve the purpose of the act. This order, effective to December 31, 1991, was to be

renewable every 2 years until 1996 by the Secretary of Commerce.

The first evaluation occurred 1 year after enactment. The resulting statement, issued

after the signing of a general order by the Secretary of Commerce, renewed the

25-percent export allowance for Washington.

Pursuant to the act, on December 29, 1991, the Secretary of Commerce signed a

General Order (1991 Order) prohibiting from January 1, 1992, to December 31, 1993,

the export from the United States to any destination, including Canada, of 75 percent

of the unprocessed timber originating from public lands located in States with annual

timber sale volumes greater than 400 mmbf (1.8 million m3

).

This order did not quell the opposition to log exporting that had been quite vocal since

before the inception of the act. Opponents included conservationists, some of the

general public, and portions of the timber processing industry. Some people were

lobbying for the restrictions to be extended to include all private lands as well as

preserving wildlife habitat, for two reasons: first, the timber industry was struggling

to operate in a poor economy, and second, a dwindling timber supply was evident.37

These pressures continued, and less than a year later, on October 23, 1992, the Secretary of Commerce reviewed the conditions under the perception that the domestic

timber supplies were becoming scarce. In accordance with section 491(c) of the

FRCSRA (see footnote 33), after considering:

...(1) actions or decisions taken, for the purposes of conserving or protecting exhaustible natural resources in the United States, which have affected

the use or availability of forest products; (2) the volume of timber from the

public lands that is under contract has increased or decreased by an

amount greater than 20 percent within the previous twelve months; and (3)

the probable effects of unprocessed timber exports on the ability of timber

mills to acquire unprocessed timber...38

the Secretary issued a general order completely banning the export of unprocessed

timber originating on all public lands, Federal and State, to be effective until the end

of December 1993.

Ninth Circuit Appeals Court decision—

Key provision—

• The Ninth Circuit Court of Appeals found unconstitutional the provisions that

prohibit the export of logs originating from State lands.

37 Pacific Rim Wood Market Report. 1989. Washington

governor on log exports. November (56): 16.

38 Franklin, Barbara H. 1992. General order increasing the

prohibition on exports of unprocessed timber from certain

private lands, October 23, 1992, signed by Barbara H.

Franklin, Secretary of Commerce.

17
Opponents of the various statutory and administrative provisions prohibiting exports of

logs harvested on Western State lands included State agencies themselves. Several

States hold large acreages of timberland, in trust for schools, universities, and other

state institutions. Revenues were affected sharply by removal of export markets. Even

the State Forester of Oregon, who oversaw fairly strict existing State log export

policies stated that:39

Implementation of these rules may reduce competition for timber sales at

auctions and could reduce the prices bid for State timber sales. Reduced

timber sale prices could result in reduced revenue flows to the State Common School Fund, to the counties and local taxing districts with Board of

Forestry timber, and to the State Department of Forestry. It is impossible

to estimate the magnitude of possible price and revenue reductions...[or] to

estimate what benefits may result to local economies by making more

timber available for domestic processing.

State agencies took umbrage with the way the act was worded. The FRCSRA 1990

stated that the “Governor of each State to which this title applies, or such other State

official as the Governor may designate, SHALL...issue regulations to carry out the

purposes of this section” [emphasis added].40 Therefore, several Washington State

counties, and the Washington State Boards of Education and Natural Resources

sought a judicial declaration holding that some of the provisions of FRCSRA 1990

were unconstitutional.

The District Court supported the Federal ban on log exports from Washington State

lands. But on May 4, 1993, the Ninth Circuit Court of Appeals in San Francisco reversed this lower court’s decision.

The unanimous decision by the Ninth Circuit Court found unconstitutional two parts of

the FRCSRA 1990 provision limiting exports from State lands. The first section identified banned exports of public timber from States in the west with export volumes less

than or equal to 400 mmbf (1.8 million m3

;section 620c(b)(1)). The other section prohibited the export of 75 percent of the logs harvested from Washington State-owned

timber lands and allowed the Secretary of Commerce to ban exports of unprocessed

timber from Washington State public lands (section 620c(b)(2)-(c)). The court ruled

that these provisions violated the Tenth Amendment to the U.S. Constitution, which

39 Beyerle, J. Michael. 1990. Statement issued in the matter

of the adoption of rules governing the export of unprocessed

logs from state lands, October 15: Reporting Statutory

Authority, Statement of Need, Principal Documents Relied

Upon, and Statements of Fiscal Impact. Michael J. Beyerle,

Deputy State Forester. Salem, OR: Oregon State Department

of Forestry: 1-2.

40 FRCSRA 1990: 17 (see footnote 33).

18
states “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”41

Essentially, the court ruled that Congress cannot require a State to enact a Federal

regulatory program.

Because the parts cited as unconstitutional were not severable, the court ruled that

the entire section banning exports from State lands was unconstitutional. However,

the entire paragraph 620c was “severable” from the rest of FRCSRA 1990 (see footnote 41); therefore, if the paragraph was removed, then the ruling would not invalidate

Federal export restrictions on Federal lands.

As a result of the Circuit Court’s decision, local policy actions were expected by State

and private agencies in response to this ruling, but few expected the Federal legislative remedy to appear so soon after the ruling. The Forest Resources Conservation

and Shortage Relief Amendment Act of 1993 (FRCSRAA 1993)42 was introduced and

signed less than 2 months after the previous act had been declared unconstitutional and was effective, retroactively, June 1, 1993.

Forest Resources Conservation and Shortage Relief Amendment Act of 1993—

Key provision—

• Gave the governors discretionary power to ban log exports. Directed Congress

to enact a ban if the governors did not.

The FRCSRAA 1993 (see footnote 42) was introduced on June 8, 1993, barely a

month after FRCSRA 1990 was ruled unconstitutional. It passed the Senate by

unanimous vote on June 17, was presented to President Clinton the next day, and

signed into law July 1, 1993.

In response to the Supreme Court ruling, Congress revised the State provision of the

act by giving the governors discretionary power, as opposed to mandatory power, to

ban log exports. Also included in the revised legislation was the right to give Congress

the power to enact a ban if the governors did not do so.

Other fundamental changes embodied in the act include a provision for a ban on the

export of all timber from State lands; neither Washington nor any other state west of

longitude 100o W. within the continental United States was allowed to export timber

from State lands. A paragraph banning direct and indirect substitution applying

specifically to State lands (405(b)(3)) also was amended.

A section IV was included in FRCSRAA 1993, which had not been in the previous

act, to account for severability of the individual provisions within the act if they were

eventually challenged and deemed unconstitutional.

41 Moore, Rhea Daniels. 1993. Ninth Circuit’s holding that

export restrictions on State public lands pursuant to the

Forest Resources Conservation and Shortage Relief Act of

1990, 16 U.S.C. Sect. 620 et. seq. is unconstitutional.

Memorandum for F. Dale Robertson, Chief of the Forest

Service, from Rhea Daniels Moore, Deputy Assistant General

Counsel, Natural Resources Division, May 10, 1993.

Washington, DC: U.S. Department of Agriculture, Office of

General Counsel.

42 Forest Resources Conservation and Shortage Relief

Amendments Act of 1993, P.L. 103-45, 107 Stat. 223; 16

U.S.C. 620.

19
Agency regulations following FRCSRA 1990 and FRCSRAA 1993—

Forest Service

Forest Service rules have changed since

the passage of FRCRSA 1990; however,

prohibiting the export of logs from all public lands as mandated in the act is not reflected in the current Code of Federal

Regulations. The act itself contains an

interim rule to be followed until agencies’

responses are in place.

The regulations require domestic manufacture of timber harvested from all Federal and State lands. These interim regulations prohibit direct substitution; specifically address and prohibit indirect substitution for the first time; limit sourcing

area applications to owners or operators

of manufacturing facilities in the sourcing

region; and maintain Alaska yellow-cedar

and Port-Orford-cedar as surplus species.

The 1990 act cited a conditional log export allowance of 25 percent for Washington State timber (or States producing

over

400 mmbf [1.8 million m3

] a year), but

that allotment was removed from the regulations by the 1993 act in conjunction

with the decision by the Department of

Commerce in October 1992. The Commerce Department is the overseeing

body for FRCSRAA 1993; the overseeing

agencies are responsible for drawing up

regulations, and the Regional Foresters

are responsible for administering the

restrictions.

The current agency regulations are included in the Interim Rules to Implement FRCSRA 1990 (effective Aug. 20,

1990),43 and FRCSRAA 1993. The regulations are being followed by both the

Forest Service and BLM.

43 Governed by Subpart F, Paragraphs 223.185 -

223.203 of FRCSRA 1990 (see footnote 33) and by

similar provisions in the amended act.

Bureau of Land Management

Not many changes in rules and regulations have occurred recently because so

much BLM land has been unavailable for

harvest for environmental and other reasons. Nonetheless, BLM currently operates under essentially the same interim

rules as the Forest Service. Major

changes to the 43 CFR Ch II (10-1-92

edition) since FRCSRAA 1993 concern

contract policy, which was changed to

implement the act. This section states

that except for such specific quantities of

grades and species of unprocessed timber determined to be surplus to domestic

lumber and plywood manufacturing

needs, each timber sale contract shall

include provisions prohibiting the export

of any unprocessed timber harvested

from the area under contract; and the

use of any timber of sawing or peeler

grades, sold pursuant to the contract, as

a substitute for timber from private lands,

which is exported or sold for export by

the purchasers, an affiliate or the purchaser, or any other parties.

20
Bureau of Indian Affairs The Bureau of Indian Affairs (BIA) oversees the 56.2 million acres (22.7 million ha) of

land that is held in trust by the United States government for Native Americans and

Alaska Natives. Because these lands are held in trust for private groups and individuals, the lands are not subject to Federal restrictions banning log exports. Of the 278

Federal Indian reservations, 140 are entirely tribally owned and thereby not subject to

Federal restrictions applying to Federal lands.

Exports from Native American lands are quite small in comparison to the total exports

from the Pacific Northwest. The reservations held in trust by the Government that are

harvesting timber in the Pacific Northwest, Idaho, Montana, and California currently

do not export logs. The largest harvesting reservation, a privately owned Native corporation in California, is currently exporting logs, however, and taking advantage of

the difference in the market values between the export and domestic markets.

Metlakatla, Alaska—In Alaska, the Metlakatla Tribe on Annette Island, which contracts out timber and labor, is on the only Native American reservation in that State.

The Metlakatla community, located near Ketchikan, is tribally owned and thus not subject to either Federal timber export restrictions or oversight by BIA. All other Alaska

Native timber lands in Alaska are held by Native corporations or individuals, as a result of the Native Claims Settlement Act;44 therefore, there is no need for any BIA

regulations regarding timber exports from Native American lands in Alaska.

Because BIA oversees sales for Native American and Alaska Native trust lands, it has

no export regulations of its own; however, each individual reservation has the right to

autonomously impose restrictions. In that light, as certain tribes have been recognized

recently and have acquired Federal land, or treaty disputes have been settled, some

tribes and reservations have imposed their own restrictions to complete the transaction without hobbling the local economy. These agreements have been between BIA

and the tribes of the Warm Springs Indian Reservation (central Oregon), the Grand

Ronde Reservation (western Oregon), and the Quinault Reservation (western Washington): the log export restrictions applied to the first two were imposed by the tribes

involved; the third was by congressional measures.

Warm Springs Reservation—The McQuinn Strip borders on the north and west

sides of the Warm Springs Indian Reservation in central Oregon. The McQuinn Strip

regulations came about as a result of a survey dispute settlement agreed upon in

1972. In the settlement, the title of the former Federal land, which formed parts of two

National Forests, was deeded to the Confederated Tribes of the Warm Springs

Reservation. Yet, to retain previous marketing patterns and avoid severe economic

changes in the area after the settlement, an agreement was drawn up specifying that

the strip be designated for domestic primary manufacture until January 1, 1992.45

Since the expiration of this agreement, logs have been exported from these lands,

taking advantage of the higher price to be gained from the export buyer.

44 Alaska Native Claims Settlement Act of December 18,

1971, P.L. 92-203, as amended; 85 Stat. 688; 43 U.S.C.

1601 et seq.

45 Hines 1987: 7 (see footnote 5).

21
Grand Ronde Reservation—The Grand Ronde Tribe was formally recognized by the

Federal government in 1986, which allowed for the formation of a reservation on land

acquired from BLM. The reservation faced opposition from local timber mills and organizations because it was taking away part of their former timber supply. The opposition

was insisting that a primary manufacture clause be incorporated into the tribe’s reservation act. While claiming this type of action was illegal, the tribe volunteered a Memorandum of Agreement stating that they would not export logs from the reservation for

a set time. Signed by the BIA, the agreement is now in full force and effect for 20

years from the date of the formation of the Grand Ronde Reservation in 1988. The

20-year timeframe will expire about when the adjacent Tillamook Forest is expected

to reach harvestable age.

This agreement and the one for the McQuinn Strip originated through settlement of

court action; the Quinault Reservation has a different story.

Quinault Reservation—The Quinault Reservation acquired additional land as a result

of a boundary dispute dating back to the treaty settlement for the northern boundary.

Conditional on a 1988 Federal court action granting 11,905 acres (4762 ha) to the

Quinault Reservation from the Olympic National Forest, timber from this land was required to undergo primary processing in the Grays Harbor area (near the reservation)

for 20 years. This agreement was accomplished by an act of Congress and not

through a judicial settlement, as the others had been.

Because of these primary processing designations, BIA adopted the Forest Service’s

definition of processed versus unprocessed timber to define primary manufactured

items: that is, lumber, chips or pulp, green veneer, piles and piling, or cants 8-3/4

inches (22.2 cm) thick or less are considered processed timber products by BIA for

Native American lands.

Alaska Key provisions—

• Organic Administration Act of 1897 is the predominant restriction. Log exports

from Federal lands in Alaska include all round logs being sold outside the

State’s boundaries.

• Federal Forest Service and BLM regulations for Alaska differ from the continental United States because of (1) a different economic situation and (2) the

omission of Alaska from Federal regulations since 1926 (except for 1969-73).

• Morse Amendment prohibited log exports from Alaska between 1969 and 1973.

• The Bureau of Indian Affairs (BIA) oversees Federal lands for tribal reservations. BIA does not limit or prohibit the export of timber from these lands.

The only Federal ban in the past 25 years on log exports that applies to National Forest lands in Alaska was the Morse Amendment, which specifically included the State

during its enactment between 1969 to 1973. As a result, the authority for agency regulations regarding log exports from Alaska for all other years has been based on the

Organic Administration Act of 1897 (16 U.S.C. 475, 551; see footnote 7), although

22
other laws and regulations such as the National Forest Management Act of 1976 (See

footnote 11) and the Multiple Use Act46 have further refined the provisions of the 1897

act. As specified in the Organic Administration Act of 1897, log exports from Federal

lands include all round log exports from the State, not just those bound for foreign

ports. So logs shipped from Anchorage to Seattle (or other lower 48 and Hawaiian

ports) were and are still considered an illegal export.

Forest Service—The Forest Service imposed the first log export regulations regarding Alaska in 1928. The purpose was to provide a foundation for the State’s

local markets: jobs, communities, and products. “The establishment of new and the

expansion of existing local wood-using plants should be fostered energetically as

Alaska is badly in need of more industries,” was written in 1928,47 justifying the Forest Service’s policy regarding Alaska. Even today, Forest Service log export policy for

Alaska recites needs to ensure the development and continued existence of adequate

wood processing facilities; to accommodate the National Forests of Alaska; to meet

the standards of the markets served; and to encourage domestic economic growth

and development within Alaska.

The first restrictions, based on the Act of April 13, 1926, prohibited spruce and

hemlock exports from the State unless the timber had received primary manufacturing. This point is elaborated on by W.B. Greeley in the memorandum of 1928

(see footnote 47):

Western hemlock [Tsuga heterophylla (Raf.) Sarg.] and Sitka spruce [Picea

sitchensis (Bong.) Carr.] are the important commercial trees of the National

Forests of Alaska. These species now furnish most of the raw material for

the local sawmill industry and they are the ones which will support the pulp and paper industry which is now developing. While there is a

large supply of spruce and hemlock, only a small percent of these species

consists of high grade material suitable for export. This better material,

however, adds value to the large quantity of less desirable material and

should be held so that the local paper and lumber industry will have a

more attractive field to work in.

46 The Act of 1897 (see footnote 7) states that “for the

purpose of preserving the living and growing timber and

promoting the younger growth on national forests, the

Secretary of Agriculture under such rules and regulations

as he shall prescribe, may cause to be designated and

appraised so much of the dead, matured, or large growth of

trees found upon such national forests as may be compatible

with the utilization of the forests thereon....” Section 2 of the

Multiple Use Act provides that “the Secretary of Agriculture is

authorized and directed to develop and administer the removable surface resources of the National Forests for multiple

use and sustained yield of the several products and services

obtained therefrom.” Citation from General Counsel Opinion

No. 126, December 31, 1964, p. 15-16, by John C. Bagwell,

General Counsel, citing 36 CFR 221.3(c) in the 1946 CFR.

47 Greeley, W.B. 1928. Memorandum dated January 6

addressed to and approved by W.M. Jardine, Secretary of

Agriculture. Copy on file with: Pacific Northwest Research

Station, 4043 Roosevelt Way NE, Seattle, WA 98105.

23
This was the first written policy that banned all spruce and hemlock exports, which

had actually been banned in practice since 1926. This policy contributed to the development of the rather ill-fated pulp and paper industry in Alaska during the 1920s. The

Greeley memo voiced forest industry and Forest Service fears that if “unlimited export

of the logs [was] permitted from the Territory...the local development of the paper industry [was] likely to be retarded materially.” Pulp and paper companies had to build

mills in Alaska to get their supplies, because the Forest Service staunchly supported

the existing log export ban. Unfortunately for the pulp and paper investors, although

lumber was valued at twice the value of raw logs, and newsprint paper at six times

(see footnote 46), transportation from these mills to Puget Sound and British Columbia soon proved uneconomical. With an unstable financial basis for these ventures,48 the pulp and paper mills closed by the time of the Great Depression in 1929.

Federal policy nevertheless has reliably encouraged economic development in

Alaska. The same memorandum to Agricultural Secretary Jardine (see footnote 46)

requesting permission to regulate the export of logs from the Alaska Territory, stated

that the reason regulation was needed “was to protect the development of the

Territory’s pioneer economy.”

Greeley’s request to prohibit the export of timber, especially spruce and hemlock from

public lands in Alaska, was granted. And although “log shipment from Alaska to the

State of Washington, British Columbia and the Orient [had] been discussed...in the

past seven or eight years” (see footnote 46), the Forest Service in Alaska was hoping

to maintain and establish more industries in this economically volatile region. If log exports were allowed, that would lead to fewer job and market opportunities in the local

market.

No other legislative activity occurred regarding Alaska log export regulations until the

1940s. In 1946, the Forest Service codified the regulations that incorporated the provisions and specific export allowances to be given for certain product considerations

(see footnote 46):

Timber cut from the National Forests in Alaska may not be exported from

Alaska in the form of logs, cordwood, bolts, or other similar products

necessitating primary manufacture elsewhere without prior consent of the

Regional Forester when the timber sale project involved is within his

authorization to sell or the Chief of the Forest Service, when a larger

timber sale project is involved. In determining whether consent will be

given to the export of such products consideration will be given, among

other things, to whether such export will (1) permit a more complete

utilization of material on areas being logged primarily for product for local

manufacture, (2) prevent loss or serious deterioration of logs unsalable

locally because of an unforeseen loss of market, (3) permit the salvage of

timber damaged by wind, insects or fire, (4) bring into use a minor species

of little importance to local industries development, (5) provide material

required to meet national emergencies or to meet urgent and unusual

needs of the Nation.

48 Rakestraw, Lawrence W. 1981. History of the United States

Forest Service in Alaska. Anchorage, AK: Alaska Historical

Commission: 108-113.

24
The foremost reason, quoted in the Greeley memorandum, for allowing export considerations was to salvage timber harvested for local mills, which had become unsalable for reasons such as a sawmill fire or sudden market depression (see footnote

47). The fifth provision was added specifically to address the timber exports allowed

to the lower 48 States during World War II.

During World War II, Federal regulations allowed for the export of Sitka spruce, which

was harvested to take advantage of its sturdiness and light weight—key factors in the

airplane industry at the time. The Forest Service oversaw the removal of logs from the

Tongass National Forest, in southeast Alaska, which were rafted to Puget Sound for

processing. Various export volumes have been reported, from almost 40 mmbf to 100

mmbf (180,000 to 450,000 m3

) of Sitka spruce between June 1942 and October 1944.

After the war, another lull occurred in regulation activity regarding Alaska, which

lasted until November 1958. Until then, Alaska had been successful in maintaining the

primary processing requirements within its territory. But to maintain the local economy, “from a timber management point of view alone, it is desirable that timber harvesting be increased to capacity as soon as possible. The export policy, as currently

applied, tends to work against this objective.”49

According to current Forest Service regulations regarding timber harvested in Alaska,

the emphasis remains on promoting the local economy by continuing the log export

prohibition to other States and to foreign buyers. Still in effect, the regulations of

October 197450 differ from the previous rules in the method of approval required for

export exception. Approval now rests solely with the Alaska Regional Forester, regardless of the size of the timber sale, whereas the large sales previously were subject to approval by the Chief of the Forest Service.

The regulations of October 1974 also require the primary manufacture for timber harvested in Alaska to meet the same specifications defined by the Forest Service for

timber from National Forests in the lower 48 States. Again, because the timber is harvested in Alaska, the Federal primary processing requirement applies to exports to

both overseas and domestic destinations outside Alaska.

Stipulations were added to the 1974 regulations to allow owners of harvested timber,

who cannot locate a buyer in their market area, to apply for an export exemption.

According to these regulations:51

Unprocessed timber from National Forest System lands in Alaska may not

be exported from the United States or shipped to other States without prior

approval of the Regional Forester. This requirement is necessary to ensure

the development and continued existence of adequate wood processing

capacity in the State for the sustained utilization of timber from the National

Forests which are geographically isolated from other processing facilities.

49 Bruce, Mason B. 1958. Office memorandum dated

November 4 from Assistant Regional Forester Bruce to the

Regional Forester, Alaska Region. On file with: Alaska

Region, USDA Forest Service, Box 21628, Juneau, AK 99802.

50 Code of Federal Regulations Title 36, Part 223.10.

51 36 CFR 223.161.

25
The regulations also stipulate that “substitution does not apply to Alaska.”52 In addition, in limited circumstances, logs from sales appraised at less than US$2,000, may

be exported as well as Alaska-cedar logs and beach logs.

The Forest Service also has made special efforts to assist Alaska in participating in

global markets. Because Alaska is far from most of its markets, the State is usually

the last to benefit from the effects of a strong global economy and the first to suffer

in a recession. To assist the Alaska economy, the Forest Service has provided wood

processing firms in Alaska with marketing alternatives. Before 1959, a limitation, allowing no more than 15 percent of sawmill production to be produced at thickness greater

than 6 inches (15 cm), had been gradually established.53 The regulations changed in

1959 to allow cants to be sawn no greater than 8 inches (20 cm) thick. Then, asked in

1974 to increase the threshold thickness to that permitted in the lower 48 States, the

Forest Service in Alaska increased the maximum allowable thickness to 8-3/4 inches

(22.2 cm) for export cants until 1986. Now, the maximum thickness for cants from

Alaska only is 12 inches (30.5 cm).

As a result of hearings in the 1960s, the Secretaries of Agriculture and the Interior

found Alaska yellow-cedar and western redcedar to be surplus and exportable. Yet in

the early 1970s, when the recession hit, smaller mills argued that western redcedar

should no longer be considered surplus to local use, and the Forest Service conceded

to their argument. Ketchikan Pulp Company, though, appealed the restriction on western redcedar exports. The same small mills requesting the action were then polled. As

a result of the survey, it was determined that none of these mills was using western

redcedar and therefore there was no local demand for that species. Consequently, in

1976, a new conditional ban on the export of western redcedar was imposed, based

solely on whether or not a domestic market exists (here defined as two or more manufacturers buying western redcedar.) Since 1976, western redcedar has been freely exportable.54 The policy allowing export of Alaska-cedar (yellow-cedar) remains in effect.

Another disadvantage for Alaska is that the available old growth is often defective, with

over 50 percent of some harvests unsuitable for sawing and therefore of limited market value. Other market accommodations were therefore made, such as including

chips in the Forest Service definition of primary manufacture in Alaska; which had

previously been banned from export. Removal of the export ban55

...would provide an expanded market opportunity for the sale of chips made

from logs not suitable for manufacture into lumber products. The present

installed milling capacity is not sufficient to utilize the volume of chips produced from the harvest of National Forest timber.

52 U.S. Department of Agriculture, Forest Service, Alaska

Region. 1987. USDA Forest Service Manual; Alaska Region

Supplement 275.

53 Bruce 1958: 2 (see footnote 49).

54 Western redcedar in Alaska is not subject to the export

restrictions of the Export Administration Act of 1979.

55 Federal Register. 1977. Vol. 42, No. 129. Wednesday,

July 6.

26
During the global recession and sagging timber prices of the early 1980s, another

accommodation was made, because land owners were having a difficult time selling

any timber, especially harvests with a high volume of salvage material. To alleviate

the problem, the Regional Forester allowed for timber sales with 50 percent of the

timber (by volume) in salvage state to be exportable because the mills were losing

money and the salvage material created a fire hazard. Permits were granted during

calendar years 1984, 1985, and 1986 to sell 12.7 mmbf (57,000 m3

), 31.6 mmbf

(140,000 m3

), and 17.6 mmbf (79,000 m3) respectively. Once the market improved,

the permit system was not renewed.56

Bureau of Land Management—BLM in Alaska has only a few small sales, and they

are only to the local Alaska market to meet domestic needs. All applications to export

timber from BLM lands are forwarded to the Secretary of the Interior for a determination. This is different from the Forest Service, where the Regional Forester for Alaska

has that authority.

Both access and timber are limited on BLM lands in Alaska; therefore, no regulations

have been written as of late 1994 pertaining to the export of logs from BLM lands in

Alaska.

As Federal regulations have become progressively more restrictive, some States in

the Pacific Northwest have begun issuing similar legislation limiting (in various degrees) the export of logs from State-owned lands. Some of the States have had fairly

strict log export rules regarding public timber since statehood, and others did not

issue any such regulations until mandated by the Federal Government with FRCSRA

1990 (see footnote 33); it essentially banned log exports from all State lands. The

history of State restrictions for Washington, Oregon, Alaska, California, Idaho, and

Montana will be discussed.

Before the States of the Pacific Northwest are addressed individually, however, the

whole subject of the legality of State-owned timber export restrictions should be discussed, because the constitutionality of these regulations has been successfully challenged twice in the past 10 years. One case challenged Alaska for regulating public

timber; the other concerned Federal regulation of State-owned timber. In both

instances, the restrictions were found unconstitutional.

The first ruling was the result of the case of South-Central Timber Development, Inc.,

a timber company in Alaska, against Wunnicke, an Alaska State official. South-Central

Timber charged foremost that an Alaska State provision, which imposed a “primary

manufacture requirement” mandating that all timber purchased from the State undergo

at least some form of partial processing within the State, violated the Commerce

Clause of the U.S. Constitution. The Ninth Circuit Court’s decision,57 rendered in

1984, struck down the Alaska State law. The court found that this law constituted a

burden on commerce, and that despite the existence of a similar Federal policy concerning logs on Federal lands, Congress had not expressly sanctioned the State

statute.

Pacific Northwest

States

The States’ Regulatory

Authority

56 U.S. Department of Agriculture, Forest Service, Alaska

Region Regional Forester. 1987. Letter dated January 23.

On file with: Alaska Regional Office, USDA Forest Service,

Box 21628, Juneau, AK 99802.

57South-Central vs. Wunnicke (467 US 82 (1984)).

27
Although this ruling applied to Alaska, the other States in the Pacific Northwest soon

questioned their own similar log export regulations. As a result, some States abandoned or ignored their existing rules, and others decided to wait for specific court or

Federal action before implementing any changes.

South-Central Timber Co. vs. Wunnicke eventually led to FRCSRA of 1990 (see footnote 33), which federally sanctioned State statutes to prohibit all or most log exports

from public lands. The 1990 act removed State-owned timber in the lower 48 States

from the export supply scene (except for 25 percent of Washington’s harvest).

Prohibiting all log exports from State-owned or -administered lands, this act was the

first Federal regulation to issue a blanket export ban on all species (unless exempted)

from public lands.

The portion regarding State-owned timber regulations led to the second key ruling

bearing on States’ authority. This part of FRCSRA 1990 was rendered unconstitutional

in 1992, again by the Ninth Circuit Court. However, the law has since been amended

(see footnote 42) and now legally provides for State statutes to limit log exports. At

this time, States that have programs prohibiting logs exports may continue them once

they are accepted by the Department of Commerce.

Washington Key regulations Year

Log Conservation and Full

Employment Act 1968

Washington Annotated Code 1990

There were no State restrictions prohibiting log exports from Washington until

FRCSRA of 1990 (see footnote 33) was enacted and mandated such regulations,

although an earlier attempt had been made in the late 1960s.

The Washington State Log Conservation and Full Employment Act, proposed in 1968

as Initiative Measure No. 32, would have required all State-owned logs to be processed within the State, or within 15 miles (24 km) of State borders, and would have

defined primary manufacture as “making all longitudinal surfaces of the log flat or converting a substantial portion into veneer or chips.” Washington’s first and only autonomous attempt at log export restrictions was defeated by the voters on November 5,

1968, by a ratio of 2 to 1.

Later, the Commissioner of Public Lands for the State of Washington defended the

State’s position on Federal and State log export regulations in testimony in 1972 before the Subcommittee on Housing and Urban Affairs of the U.S. Senate Committee

on Banking, Housing and Urban Affairs.58 He argued that intensive management practices were impractical until the log market spurred prices and demand up; that the log

58 Cole, Bert. 1972. Statement before the Subcommittee on

International Finance of the Committee on Banking, Housing

and Urban Affairs, United States Senate. Ninety-second

Congress, Second Session. June 8. Salem, OR.

28
export market stabilized some areas of employment; that the log export market promotes the United States’ role in global free trade for mutual advantage; that the log

export market played a key role in the State’s trust income; and that the log export

market was needed to stabilize the demand flows based on the historical trends in the

domestic timber market.59

The first State log export restrictions were issued by the governor in 1990,60 to be

effective in 1991, as a consequence of the Federal mandate. State regulations prohibited any person from exporting, selling, trading, or exchanging export restricted timber from the United States and also outlawed direct and indirect substitution.

In the State regulations, those persons not allowed to purchase the timber directly

from the Washington State Department of Natural Resources were granted leniency

through a “grandfather clause,” which allowed them to purchase up to one-third of the

volume of timber purchased in an export-restricted timber sale if the timber was to be

processed at a domestic facility during 1991. This volume was to be reduced to onefifth in 1992 and to 10 percent in 1993.

Of the export-restricted timber (the federally allotted 75 percent of the State’s timber

harvest), the State’s contracts required domestic processing proportionate to the timbered area, species mix, and grade.

Hardwoods, western redcedar, and species federally declared to be surplus to domestic needs are specifically exempt from Washington’s restrictions; any other exemptions are handled case by case.

Since the enactment of the FRCSRAA 1993 (see footnote 42), Washington is the only

State to have rules and requirements in place and approved by the Department of

Commerce for regulating their own timber. These regulations are the same as those

issued in the WAC 240-15 (see footnote 60), except that the portion regarding the

25-percent export allowance has been removed. Before this amendment, Washington

had been the primary exporter of logs from State lands.

Oregon Key regulations Year

Oregon’s First Ban 1961

Emergency Act 1963

Ballot Measure 1982

Executive Order No. 90-22 1990

59 State of Oregon, Legislative Research Branch. 1974.

Regulation of Log Exports in Oregon, California, Alaska,

Washington, British Columbia, and Alberta. Salem, OR: 304.

60 State of Washington. 1990. Washington Annotated Code

(WAC) 240-15 (November 21).

29
In contrast to Washington, Oregon first limited log exports from State-, county- and

city-owned lands in 1961 by an emergency act.61 This act prohibited log exports to

foreign ports but did not place restrictions on interstate trade. It required that all public

timber harvested from public lands in Oregon be “primarily processed within the

United States.” Primary processing was defined as that stage of manufacture “next

beyond the log form of said timber.”62 Violators would be found guilty of a

misdemeanor.

In May 1963, the law was amended to allow the State Department of Forestry to

grant a foreign export permit if no feasible economic market for the harvested logs

was available in the United States. This provision was in place until it was repealed

in 1981.63 The Foreign Processing Advisory Committee (three people involved in the

timber industry) was provided for in this amended law.64 Until it was disbanded in

1977, the committee acted to advise the State Forester to honor permit applications in

cases where65

...upon application of the person in control of the use or disposition of such

timber if the Department [of forestry] finds that such timber [was] currently

in log form and that there is no reasonable market therefore within those

areas of the United States to which it could be economically transported for

primary processing.

Timber was required to be in log form before the application could be filed, so that

prospective bidders could not bid on unharvested timber contracts with the guarantee

of hedging profits from export potential. The revised act of 1963 also amended the

primary processing provision to exempt Port-Orford-cedar from the restrictions.

Of the nine applications requested before 1966, three were granted, and of the 12 export permits applied for under this act, 4 were approved. The fourth and final permit

issued was not awarded until 1980, a year before the 1963 provision allowing log export permits was repealed. All permits were granted for scaled and rafted logs that did

not have a local buyer. The strong domestic timber market is evident here, in that only

three other permits were applied for between 1966 and 1980 for State-owned timber,

even though Federal timber was removed from the export market during this time.

61 State of Oregon. 1961. Oregon Laws of 1961, Chap. 700,

p. 1433-4 [House Bill 1663]. Approved by the Governor May

31, 1961. Salem, OR.

62 State of Oregon. 1961. Oregon Forest Laws and

Administrative Rules. Salem, OR: 17-18.

63 State of Oregon, 65th Oregon State Legislative Assembly.

1989. Enrolled Senate Joint Resolution 8. Salem, OR: 1.

64 Section 6 of the Oregon law of 1963 specified that the

State Forester (or his/her deputy or assistant), plus two others

appointed by the Governor, would comprise the committee.

Of the latter two, one was to be engaged primarily in logging

within Oregon and the other within the Oregon lumber industry.

65 State of Oregon. 1973. Oregon Forest Laws and

Administrative Rules, Forestry and Forest Products. 526.815,

Standards for Permits for Foreign Processing.

30
The State’s export restrictions remained in place for almost 20 years before being

challenged in 1982 by a court case, which later proved to have characteristics similar

to South-Central Timber vs. Wunnicke. Although the Ninth Circuit Court presided over

this case, as well as the South-Central Timber case, it did not support the constitutionality argument put forward in 1982 after considering the evidence. Two years later,

though, in light of the court’s stance on the constitutionality of Alaska’s restrictions,

Oregon’s local district attorneys, who administer the regulations, were encouraged not

to enforce the law:66

The Attorney General has previously concluded that Oregon’s unprocessed

log export ban...is probably unconstitutional....The Supreme Court’s decision does not change our conclusion that the Oregon statutes are probably unconstitutional and that no enforcement action should be undertaken under these statutes....

Although Oregon’s restrictions remained on the books until the end of the decade,

they were neither enforced nor stated in timber sale contracts. As a result, by 1987,

nearly 40 percent of all State timber had been purchased by log exporting firms.67

In June 1989, regardless of the Ninth Circuit Court’s decision on the unconstitutionality of restricting State-owned public timber, Oregon voters approved a ballot

measure (legislative referendum) by a ratio of nine to one in favor of a log export ban

from State-owned lands. The amendment stated that neither the State Land Board,

which oversees income from common school fund lands, nor the State Forester could

authorize the sale or export of timber from public lands in Oregon unless the timber

had been processed in Oregon. This constitutional amendment was conditional on

enabling legislation by Congress, which did not happen. A short time later, FRCSRA

1990 (see footnote 33) mandated that the regulations again be modified.

Oregon’s governor68 directed the State Forester to adopt temporary rules governing

substitution no later than November 1, 1990, and permanent rules implementing

FRCSRA 1990 no later than December 20, 1990. Regulations69 issued in response to

the Executive Order stated that a person is eligible to bid on timber from Stateowned lands if the person certifies that they will neither directly or indirectly export

unprocessed wood products originating from State or private lands in Oregon (private

lands are included to clearly prevent substitution) nor convey unprocessed State timber to any other person not eligible to purchase State timber. Others could apply to

purchase State timber after June 1991 if they had not exported timber from private

lands during the previous 2 years. A provision was included for exceptions.

66 Hines 1987: 10 (see footnote 5). Citing Frohnmeyer, D.

1982. Official Communication from the Attorney General,

State of Oregon, to H. Mike Miller, State Forester, State of

Oregon, December 14, 1982.

67 State of Oregon, Oregon Legislative Assembly. 1989.

Enrolled Senate Joint Resolution 8. 1989 Regular Session.

Salem, OR: 1.

68 Governor of Oregon. 1990. Executive Order 90-22,

March 12.

69 Oregon State Board of Forestry. 1990. Oregon

Administrative Rules, Chap. 629, Div. 31.

31
The restrictions specifically limited indirect substitution for the first time, by stating that

no person could sell timber from State-owned lands to someone not eligible to purchase timber directly from the State. By limiting the substitution to public and private

lands in Oregon, that State has allowed a person to legally bid for public timber in

Oregon while purchasing private export logs in Washington.70

Alaska Key regulations Year

Alaska Native Claims Settlement Act 1971

South-Central Timber vs. Wunnicke 1984

Admitted to the Union in 1959, Alaska does not have a long history of log export restrictions; but it has a tumultuous one, given the Alaska Native Claims Settlement Act

(ANCSA; see footnote 44), and the Ninth Circuit Court of Appeals, which overturned

the State statute banning log exports.

Passed by Congress in 1971, ANCSA provided for the transfer of 40 million acres of

Federal lands in Alaska to Indians, Eskimos, and Aleuts, to settle aboriginal land

claims of the Native peoples. Those lands became private holdings, not under supervision of the Bureau of Indian Affairs. Native timber harvests are not subject to primary

processing requirements.

In southeast Alaska, Alaska Natives received a half-million acres of largely

unharvested public timber lands as private owners, mostly in 1979-80, and mostly

drawn from National Forests. Log exporting, controversial in Alaska as elsewhere,

began at once from these lands. Most Native timber is exported as round logs, and

most of Alaska’s log exports are from Native-owned private lands.71

Log export policy for State-owned timberlands has consistently supported domestic

processing. The issue may be negligible, however. Harvests from State land holdings

in Alaska accounted for less than 3 percent of the total 1995 Alaska harvest.

In May 1974, an earlier policy requiring exported logs to be roughly squared was

tightened:72

Cants may be manufactured from all species for export and shall be

considered to have received primary manufacture when sawed up to a

maximum thickness of 12 inches [30.5 cm] and may be of any width.

Timbers cut thicker than 12 inches must be squared on four sides along

their entire length with allowances for one-third of each dimension

(thickness and width) allowed in wane.

Any cants cut larger than 12 inches required squaring along the entire length with a

1/3 wane allowance for each dimension. This statement recited the State policy that

“round logs may not be exported as a marketable commodity.”

70 The Oregonian. 1990. State adopts private log export

restrictions. December 22: Sect. D: 5.

71 Knapp, Gunnar. 1992. Native timber harvests in southeast

Alaska. Gen. Tech. Rep. PNW-GTR-284. Portland, OR: U.S.

Department of Agriculture, Forest Service, Pacific Northwest

Research Station. 48 p.

72 Alaska Administrative Code 76.130, cited in State of

Oregon 1974 (see footnote 59).

32
The timber regulations issued in 1974 also contained provisions for the export of

chips. Previously, chips had to have originated from mill residues and logging and

have no market value before they could be considered for export. These new regulations allowed chips made from surplus roundwood to receive primary manufacture and

be freely exported from interior Alaska if that was their place of origin (precluding use

of interior Alaska’s ocean ports as trans-shipment points for chips from other parts of

Alaska). This allowed harvested timber, which otherwise would have had a negligible

value when sawn into lumber, to be manufactured into a more marketable commodity.

Chips from southeast Alaska (east of longitude 141o W.) required approval by the

State Commissioner of Natural Resources before they would be allowed for export.

On July 2, 1982, the domestic processing principle was reinforced73 with a mandate

that the “director will, in his discretion, require that primary manufacture of timber removed under this chapter be accomplished within the State to the extent consistent

with the law.” It further specified that for the

...purposes of this section, the director will consider timber which has been

manufactured into a product for use without further processing as having

been primarily manufactured only if the director determines that there is a

market for the product.

In October 1982, Alaska’s primary manufacture definition was redefined as:74

...the breakdown process in which logs are reduced in size by a headsaw,

gangsaw, or edger to the extent that the residual cants, slabs or planks do

not exceed a nominal eight and three-quarter inches in thickness.

Alaska’s local-manufacture policy was soon contested as a restraint of trade that

only the Federal Government could impose. In 1984, the South-Central Timber vs.

Wunnicke case was decided. The decision returned by the Ninth Circuit Court of

Appeals ruled that the State could no longer limit log exports, because such a restriction violated the Commerce Clause of the U.S. Constitution. The court’s ruling,

therefore, invalidated the primary manufacture regulation option of the Alaska Administrative Code, which stated that the Director of the Department of Natural Resources may require that primary manufacture of logs, cordwood, bolts, or other

similar products be accomplished within Alaska.75

The memorandum issued by the State as a result of the decision declared that the

State would not restrict primary manufacture. Alaska currently has no restrictions on

log exports from State-owned lands.

California Key regulations Year

California Public Resources Code,

Section 4650.1 1973

Proposition 130 1990

AB790 1993

73 Alaska Administrative Code 71.230.

74 Alaska Administrative Code 71.910.

75 Alaska Administrative Code Sect. 71.230 and 71.910.

These sections were created in 1982 to replace Sect.

76.131, which had been the relevant authorization since 1974.

33
California’s first log export restrictions appeared in 1973.76 These restrictions, enforced

by the California Department of Forestry and Fire Protection, prohibited the sale of

State-owned or managed timber to a primary manufacturer outside of the United

States, and prohibited the purchase of timber which was intended to be used as a

direct or indirect substitute for timber from private lands owned or under control of the

purchaser within 200 miles (322 km) of the sale boundary, (in other words, the market

area). These regulations specified that (see footnote 76):

...timber from State forests shall not be sold to any primary manufacturer or

to any person for resale to primary manufacturer who makes use of such

timber at any plant not located within the United States unless it is sawn

on four sides to dimensions not greater than 4 inches by 12 inches [10 by

30.5 cm].

A comment released by the California State Forester’s Office noted that having “only

four commercial State forests totaling about 69,000 acres [27 600 ha] with an annual

cut of 35 million board feet [160 000 m3

],” truly minimized the impact of the public resources code (see footnote 59). Violators were then prohibited from purchasing State

forest timber for 5 years. This rule was in effect until 1984.

After the Ninth Circuit Court of Appeals made its decision declaring Alaska’s statue

restricting log exports from State lands unconstitutional in 1984, California’s attorney

general decided that the current law in California would continue to be enforced until

it was overturned or removed by the legislature. The attorney general concluded that

a State agency does not have the power to declare a statute unenforceable (or unconstitutional), regardless of a circuit court decision.77

The Department of Forestry therefore will have to wait for the California court or a

Federal court to specifically invalidate that portion of PRC 4650.1 (see footnote 76)

before they stop enforcing it. Hence, the ban imposed in 1974 is still on the books

today, restricting log exports originating from State lands in California.

Other legislation has been proposed in California to further restrict log exports. An unsuccessful initiative, Proposition 130, was introduced in California after the Federal

public lands restrictions went into place in 1990. It was intended to go beyond the

limitations suggested by FRCSRA 1990 (see footnote 33) by extending the export restrictions to limit exports from private lands as well as prohibit the State from buying

timber or timber products from anyone selling timber for foreign export (the assumption

here is that timber implies logs). Also known as the Forest and Wildlife Protection and

Bond Act of 1990, this unsuccessful ballot measure would have permitted owners to

use the clearcutting method for no more than 12.5 percent of their harvest until 1996,

provided that they did not, among other things, sell logs directly or indirectly for foreign export.

76 California Public Resources Code, Sect. 4650.1 (1973).

77 Cobb, Ted. 1984. Letter dated June 21 from Cobb, Staff

Counsel, to Clifford E. Fago, State Forester. Copy on file with:

Pacific Northwest Research Station, 4043 Roosevelt Way NE,

Seattle, WA 98105

34
In 1993, California’s legislature revised the State’s export restrictions for timber from

State-owned lands.78 The 1973 substitution language was dropped, but its intent

was retained by prohibiting timber sales from State forests to firms that had sold unprocessed timber from private lands to foreign purchasers within the previous year or

within a year after the end of the firm’s timber-sale contract with the State.

Unprocessed timber is defined in current law as it is in FRCSRAA 1993 (see footnote 42). The existing maximum size for exported sawn wood—4 by 12 inches (10 by

30.5 cm)—was retained. However, export of clear cants less than 12 inches thick was

permitted, as was shipment abroad of waney cants of lower grades, less than 8-3/4

inches (22.2 cm) thick. Western redcedar was excepted from these cant rules.

Exports of other wood products were expressly permitted. These included poles,

piling, chips, veneer, plywood, shakes and shingles, aspen (Populus spp.) pulpwood

bolts, and logs destined for chip-making.

The 1993 law also established penalties. Violators are prohibited from purchasing

State forest timber for 5 years and may have their operating license suspended for up

to 1 year.

Idaho Key regulations Year

Idaho Code 1958

Timber Supply Stabilization Act 1989

Since Idaho’s inception as a State in 1890, logs from public lands have had to receive

primary manufacture within the State,79 (except for a 3-year reprieve; see below).

According to Idaho Code:80

State Board of Land Commissioners are hereby required when contracting

for the sale of timber on lands owned by the State to prescribe that the

timber cut from said lands under said contract shall be manufactured into

lumber for timber products within the State of Idaho.

The only existing export exception was for logs from State-owned lands destined for

use in wood pulp manufacturing. Unpeeled cedar poles, rough, green lumber, and

cants were considered manufactured; however, cants had to meet certain requirements. Cants were eligible for sale and export from the State if the cants were to be

sold to a manufacturer owned by a company other than the current owner of the

cants.

These rigid regulations established in the Idaho Code did cause some difficulty; one

example was the handling of damaged insect-killed timber in southeastern Idaho.

Southeastern Idaho is an area of low mill capacity, and the mills located there could

not handle the volume of salvage timber; but when mills located outside the State

requested timber, they were denied access to it because of the regulations (see footnote 79). The Idaho Code was enforced until the mid-1980s.

78 California Statutes 1993, c. 964 (A.B. 790, Sec. 1).

79 Jones, Donald D. 1978. Letter dated June 7 from Jones,

Administrator, Division of Forest Resources, Department of

Lands, to John E. Woodring, Staff Counsel, Washington

State Senate, Olympia, WA.

80 Idaho Code Sect. 58-403, (1958).

35
A 3-year break in the limitation occurred in 1986 as a result of the decision rendered

in the South-Central Timber case (see footnote 57). Idaho’s attorney general deemed

the contractual export restriction unconstitutional and directed the Idaho State Board

of Land Commissioners and the Idaho State Department of Lands to cease enforcement and remove such language from the timber contracts.81 This did not last long.

In 1989, before the enactment of the FRCSRA of 1990 (see footnote 33), the State

of Idaho reestablished its regulations on interstate commerce with the Timber Supply

Stabilization Act of 1989.82 First introduced in March 1988 by Governor Cecil Andrus,

the act added Chapter 10 to Title 58 of the Idaho Code to promote the wood processing industry in Idaho, to increase private and public revenues, and

...to act as a market participant in the timber market in a way that helps

enhance the long-term maximum value of State forests by ensuring that an

adequate proportion of the total sales of timber sold by the State of Idaho

is sold to qualified purchasers within Idaho.

Under the Timber Supply Stabilization Act, 95 percent of the sales from State forests

are offered to qualified bidders. The remaining 5 percent are offered to all bidders.

The code contains some exceptions to deal with market conditions. Timber sales

offered to qualified bidders, but not purchased, are then open to all bidders, inside

and outside the State, or if a dislocation of the timber supply occurs and it could be

deemed surplus to the needs of the qualified bidders, then it again is open to all.

Regardless of the purchaser, the Timber Supply Stabilization Act prohibits the export

of unprocessed timber originating on State lands to destinations outside the United

States.

The Idaho State Board of Land Commissioners is responsible for maintaining a list of

eligible bidders and for the rules and regulations necessary for enactment. All purchasers between 1980 and 1989 were automatically placed on the bid list; all others

are required to apply. Any bidders removed from the list are ineligible to participate in

bidding for timber sales to qualified bidders for 5 years (see footnote 82).

Pulp logs are exempt from the restriction, and cants are considered manufactured unless they have been debarked solely to be exported outside the State to receive further processing.

Montana Key regulation Year

HR 724 1990

Until 1990, there were no restrictions in place in Montana regarding log exports, primarily because of the historically negligible amount of timber harvested and exported

from the State. The first regulations were not approved until October 1990, in HR

724.83 HR 724, written in response to FRCSRA 1990 (see footnote 33), elaborates on

81 Hines, 1987: 10 (see footnote 5).

82 Timber Supply Stabilization Act of 1989, Idaho Code Sect.

58-1001 et. seq. (1989).

83 Forest Resources Conservation and Shortage Relief Act of

1990, 1991, MT. HB 724, 1991, MT. ALS 372 (1990, 1991).

36
the Montana Department of State Lands proposal issued specifically to define and

prohibit substitution of State timber for private logs heading for export. It is an act

prohibiting the use of unprocessed timber from State lands as a substitute for

unprocessed timber exported from the United States.

HR 724 amended Rule 26.6.41184 as an agreement not to export logs from State

lands. The definitions were adopted from FRCSRA 1990. The rule states that any

person purchasing timber from the State of Montana must sign a nonexport agreement to certify that they are not exporting logs from their lands or from State lands.

This agreement states that:85

...unprocessed timber, as defined in the [Forest Resources Conservation

and Shortage Relief] Act, originating from lands owned by the State of

Montana shall not be exported from the United States, or be sold, traded,

exchanged, or otherwise given to any person unless that person agrees

not to export such unprocessed timber from the United States and agrees

to require such prohibition in any subsequent resale.

Substitution occurs when a person purchasing timber from the State of Montana has

exported unprocessed timber from private lands in the State anytime in the year prior

to the purchase date. Surplus species are those deemed so by the Secretary of

Commerce.

No regulations have been adopted to incorporate HR 724 to date. There is no

enforcement mechanism available either, because of negligible export activity.

Export Restrictions

for British Columbia

The first commercial record of log exports from British Columbia, which occurred late

in the 1800s, was a shipment destined for Puget Sound.86 This, however, was one

of a negligible number of log exports from British Columbia since the Province was

recognized in 1869—a result of progressively restrictive log export restrictions at the

Provincial and Federal levels. Log export limitations and restrictions in British

Columbia were first enacted within 20 years of its becoming a Province within the

Canadian confederacy. Since before the start of the 20th century, log export restrictions, taxation, fees and penalties have merely played variations on the theme of export bans without a drastically progressive change in the overall score throughout time.

A Comparative History Legislative foundation Year

Canadian Constitution Act 1867

Land ownership and legislative

designations Various

84 Agreement Not to Export State Logs. Mont. Admin R.

26.6.411 (1990).

85 Mont. Admin R. 26.6.411, Sect (2)(a)(ii) (1990).

86 Shinn, 1993: 4 (see footnote 6).

37
The Canadian Federal government enacted the Canadian Constitution Act, also called

the British North America Act, in 1867. This act created Canada and assigned the

Provinces management of natural resources. As a result, when British Columbia

formally became a member of the Canadian Confederacy 4 years later, the Province

retained her control of the natural resources located within, while the Federal Government remained responsible for overseeing international trade. Consequently, British

Columbia has led the way in regulating log exports almost since its inception into the

confederation. The Federal Government has adopted regulations mimicking the Province’s to obtain the same objectives, but this did not happen until World War II.

The overall purpose of the Provincial and Federal policies has been to maintain and

enhance Provincial development, provide jobs, ensure that all aspects of the timber

industry remain solvent during the ups and downs of the economy, and ensure that

essentially all timber cut within the Province is subject to the same export controls.

Although these restrictions seem highly protectionary, leniency has existed during

times of recession, essentially because harvest levels tend to be greater than the

volume in demand. During these times, log exports have been permitted, or at least

factored into legislation to maintain employment levels so that forest products would

remain a viable industry. But those cases have been rare historically.

Since 1901, British Columbia has directly prohibited exports, even though the Province

employed taxes and fees as early as 1888 on logs bound directly to the export market

to deter potential exporters.

Whether the Province or the Dominion exercises export control depends on the lands

being administered. There are four relevant categories:

Designation Definition Control

Nonroyalty lands Granted before 1887 Federal only

Pre-1906 land Include the majority Federal

grants or of private lands

Crown grants

Post-1906 land Granted after 1906 Provincial

grants; also

Crown grants

Non-Provincial Indian reserves, Federal

lands National Defense

Lands, and Federal

reserves

Historically, the log export restrictions of British Columbia have been monitored more

closely and have been more prohibitive than those of the United States, and the primary reason rests on the scale of land ownership in the Province vs. the U.S. Pacific

Northwest. One primary factor leading to the significant differences in scope of the

restrictions is the percentage of lands covered by the restrictions. In 1991, forest resource ownership in British Columbia was 95 percent Provincial, 1 percent Federal,

and 4 percent private.

38
A difference in export policy between the Pacific Northwest and British Columbia is

that the Provincial government of British Columbia generally implemented the restrictions first, which the Federal Government eventually adopted for the country (although

sometimes up to 35 years later). The process tends to have been the opposite in the

United States, with Federal laws setting the standard and States subsequently

instigating, or eventually adopting by decree, similar restrictions.

This section will first discuss British Columbia log export restriction and then highlight

the later Federal legislation. Much of the history of Canadian Federal and Provincial

legislation is based on material provided from Shinn (see footnote 6).

Key provisions Year

British Columbia Land Act 1891

British Columbia Land Act Amendment Act 1901

British Columbia Land Act Amendment Act 1903

Timber Manufacture Act 1906

Timber Manufacture Act 1909

British Columbia Forest Act 1912

British Columbia has continually refined and redesigned its logs export restrictions

since its first years as a member of the Canadian Dominion. The evolution of export

policies has been based on ensuring manufacture within the Province and maintaining a healthy Provincial forest industry.

Beginning in 1888, just a year after joining the Canadian Dominion, British Columbia

enacted its first regulatory venture: levying a tax on all logs exported from the Province. A more direct method of export control, however, quickly followed.

The British Columbia Land Act Amendment of 1891 restricted the export of logs cut

from Crown lands to within-Province use. Then the British Columbia Land Act Amendment Act of 1901 amended the 1891 act by adding the possibility of allowing specific

exception to export logs. Yet while recognizing the possibility of exporting logs in the

Land Act of 1901, the next Land Act, the Land Act of 1903, extended the export restrictions to include nonroyalty lands. This Land Act imposed a conditional refundable

tax on timber from nonroyalty lands to be refunded if the timber was for local use or

manufacture. (This tax eventually was declared unconstitutional in 1926.)

Rapid industry growth soon led to more legislation as Canadians hurried to meet the

surge in U.S. demand for timber for construction after the San Francisco fires. To regulate the booming industry, the Timber Manufacture Act of 1906, also known as the

Forest Act, extended the export ban of the 1891 Land Amendment Act to include

lands granted by the Crown after March 12, 1906, so that lands subject to the Provincial export restrictions would include areas granted in the future. The act of 1906,

however, did not renew the exemption clause permitting log exports provided for in

the Land Act Amendment Act of 1901. No restriction on export applied to logs from

Federal land at this point (see footnote 86), although to this day, nonroyalty lands are

accountable only for export taxes and fees. According to Shinn (see footnote 6), this

act is treated in policy discussions as the initial restrictive policy measure regarding

log exports.

Early Provincial

Regulations

39
The production growth in 1906 dramatically reversed itself over the next 3 years. This,

coupled with other deteriorating market conditions, led to a poor forest economy, and

demand fell precipitously. Consequently, as a corrective means to maintain some industry activity within the Province, the Timber Manufacture Act of 1909 was enacted to

renew the provisions of 1906 and add the export exemption possibility that had existed

in the British Columbia Land Act Amendment Act of 1891.

By 1912, the Provincial government realized the need for an organization to oversee

the timber resources of the Province; therefore the Forest Act of 1912 established the

British Columbia forestry branch, which also consolidated the Land Act Amendment

Act of 1903 and the Timber Manufacture Amendment Act of 1909. The 1912 act enabled the Provincial government to restrict timber cut on Crown lands granted after

1906 to use within the Province, unless the timber was specifically exempted by the

Lieutenant-Governor in Council. The legislation has remained virtually unchanged

since 1909.

Key provisions Year

Timber and Royalty Act 1914

British Columbia Forest Act Amendment Act 1916

Order in Council 1918

With the onset of World War I, British Columbia passed the Timber and Royalty Act of

1914, allowing the Lieutenant-Governor to issue an exemption from all log export restrictions to gain more revenues for the Provincial government. This release of timber

was to have been done in conjunction with a royalty tax imposed on exports in another

effort to make money for the Government (see footnote 6). In 1916, the Forest Act

Amendment Act renewed this blanket exemption option.

Under the authority of these laws, by 1918 the Lieutenant-Governor had ordered the

species exemptions be reimposed except for grade 3 cedar.87 These laws also provided for the formation of the Log Export Advisory Committee (LEAC), whose purpose

was to advise the Lieutenant-Governor on export exemptions.

These Provincial regulations remained in place until the mid-1970s and were models

for future Federal legislation, which was introduced in 1947, some of which superseded the Provincial legislation.

Key provisions Year

British Columbia Forest Act 1974

British Columbia Forest Act 1978

General Order 1984

Order in Council No. 1252 1987

Order in Council 1988

British Columbia historically has had various levies, fees, and taxes; however, throughout the 1970s and 1980s, extensive increases in the fees in lieu of export were incurred for log exports.

Provincial Legislation

Through World War I

Provincial Legislation:

Recent Years

87 Yellow-cedar or Alaska-cedar. Whether western redcedar

was included is not clear.

40
The first tax on logs permitted for export was passed in 1888. By the 1950s, the

rate was C$0.50 per cunit (100 cubic feet; 2.8 m3

), and by 1973, it was increased

to C$2.00 per cunit. By the following May, the taxes on log exports became C$2 per

cunit for log-grade pulpwood, C$5 per cunit for cottonwood, C$40 per cunit for

cypress (yellow-cedar), and C$10 per cunit for all other species.

The 1970s also brought the first major changes in the Provincial legislation since

World War I. Section 92 of the British Columbia Forest Act of 1978, read that:88

All timber cut on Crown lands, or on lands granted after the twelfth day of

March, 1906, or on lands held under pre-emption record, shall be used in

the Province or be manufactured in the Province into boards, deal, joists,

laths, shingles, or other sawn lumber, or into chemical wood-pulp or paper,

except as hereinafter provided; and all logging and manufacturing camps

or premises used or occupied for any purpose of or in connection with the

cutting or manufacture of such timber shall be located in the Province.

Sections 95-97 of the act also granted the Lieutenant-Governor in Council the right

to authorize exports of piles, poles, railway ties, crib-timber, woodchips, mechanical

woodpulp and any other “unmanufactured timber...upon such terms and conditions

as he sees fit” if within-Province manufacturing problems due to topographical reasons occurred. With the looming recession, however, legislating log export restrictions

became more frequent.

The Forest Act of 1979 elaborated on export exception qualifications to the withinProvince manufacture rule. The act identified log export exceptions for timber surplus

to domestic need with no economically feasible use within the Province, or that would

otherwise be wasted from decay or lack of reforestation of an old, unmarketable stand.

Then in 1986, timber stands in the Mid Coast, North Coast, and Queen Charlotte Timber Supply Areas of British Columbia were determined to be uneconomical because

of age, disease, remoteness, and associated transportation costs to harvest and process the timber within the Province. Therefore, an Order in Council was issued providing for a blanket exemption from within-Province manufacture for these areas.

Canadian

Regulations

Federal legislation regarding log exports did not exist until World War II. Provincial

land granted before 1906 and Federal land were regulated only by the Province; logs

were, hence, freely exportable until that time. Crown regulations issued during World

War II, however, applied to all British Columbia log exports.

Key provisions Year

War Measures Act (2 acts) 1940

National Emergency Transition Power

Act (NETPA) 1945

Export and Import Permits Act 1947

Export and Imports Permit Act 1970

Export and Import Act 1974

Federal Regulations,

World War II to Present

88 Statutes of British Columbia 1978, c 23, s 135, 136, 137.

41
The first Federal act passed was the War Measures Act, in July 1940, to prohibit the

export of unmanufactured Douglas-fir (Pseudotsuga menziesii (Mirb.) Franco). By

December 1940, another War Measures Act expanded the species concerned to

include all true firs (Abies spp.) and prohibited the export of all unmanufactured

wood products unless specifically exempted.

By 1945, the restrictions were written into the National Emergency Transition Power

Act (NETPA) and then again into the Export and Import Permits Act of 1947. The

Export and Import Act remains the statutory basis for Federal log export restrictions

today.

Since the enactment of the Canadian Constitution Act in 1867, which granted the

Provinces rights over natural resources and the Crown control of international trade,

the Province had been in control of exports of forest products. When the Canadian

government enacted the Export and Imports Permit Act of 1970,89 the Federal Government was granted authority over all exports, including those from private lands. The

Federal Government returned export control over Provincial lands to the Provinces,

while it retained control over all remaining lands (except for Indian reserve lands and

Crown-granted lands before 1906). Timber from these private lands, Indian reserves,

Federal lands, and lands granted by the Crown before 1906, which had been free to

export logs, were now under Federal restrictions. A Federal export permit is now required for all logs leaving Canada, and the Federal authorities accept Provincial decisions on timber under its jurisdiction.

The Export and Import Act of 1974 changed the focus from one of promoting national

security, which had been carried along since the Export Import Act of 1947, to promoting domestic manufacturing via export restrictions.

British Columbia

Agencies and Export

Procedures

The Ministry of Forests of British Columbia is in charge of defining the regulations

associated with the laws of the Province. The Federal Ministry of Foreign Affairs

and International Trade regulates exports for the entire country. Initially the Log Export Advisory Committee (LEAC) and, later, the Timber Export Advisory Committee

(TEAC) played an advisory role in the issuance of export permits to those who qualify.

The LEAC was formed in 1918 and included a mix of loggers, exporters, manufacturers and members of the British Columbia Forest Service. It reviewed permit applications and advised the Minister of Forests and the Lieutenant-Governor on whether

an export permit should be granted. Criteria for these exemptions have been modified

over time on species, surplus, renewability, sustainability, and market area.

In 1918, physical surplus of harvested logs was all that was needed to establish the

need for a permit. The criteria then evolved so that an applicant needed to prove that

the harvested timber was actually surplus to their market area by showing evidence of

refusal by three mills to purchase harvested timber. Thirty years later, LEAC changed

the requirement to three refusals from mills actually using the type of log the permit

89 Export and Imports Permit Act, R.S.C. 1970, C. E-17, as

amended.

42
request was for and that the logs must have been available to domestic buyers for at

least 60 days. This physical surplus determinant, availability, was lowered to 30 days

in 1969, and then to 2 weeks of advertising in appropriate papers without receiving a

purchase offer in 1975.90 This remains true today. Federal policy also changed in

1975 to mirror the LEAC change regarding 2-week advertising.

The Federal Government took a seat on LEAC in 1968. Then in 1969, the Canadian

Ministry of Industry, Trade, and Commerce changed the permitting process so that

the Federal legislation and the Province’s would be more similar. The permitting

application and approval process is still overseen by the Province, although all exports require a Federal export permit as well. In general practice, if the Provincial

Lieutenant-Governor issues a log export permit, then the Federal Department of

Industry, Trade, and Commerce also issues one.91 Timber intended for export from

lands granted by the Crown before 1906 (i.e., not subject to Provincial restrictions)

are granted Federal permits on the recommendation of LEAC. In 1975, the Canadian

Government harmonized their restrictions with the Province’s and has since kept up

with Provincial changes.

To examine exemptions and blanket applications, as of 1975, LEAC met to advise on

permit applications for surplus timber from Provincial lands granted after 1906 and

from lands restricted by Federal policy. Then the Provincial Lieutenant-Governor in

Council and the Federal Minister of Industry, Trade, and Commerce made the final

decision as to whether the timber was actually surplus to Provincial needs or was to

receive primary processing.

In 1984, the Minister of Forests refined his interpretation of the British Columbia Forest Act of 1979, which based exemption on surplus, economics, and use. This revision provided for exemptions of standing green timber to be issued for a percentage of hemlock-balsam (hemlock and true firs) stands, if it could be demonstrated that

harvesting would be uneconomical unless the logs were predestined to received a

premium price on the export market. To be approved for the exemption, the logs had

to come from remote and uneconomically harvestable areas and had to be harvested

as part of other operations.

The LEAC was disbanded in 1986 and its advisory functions given to TEAC. The

initial purpose of TEAC was to recommend permits to export standing green timber

based on economic need. Membership in TEAC includes individuals in the log trade

community and operates as an advisory committee to this day.

Current Procedures Timber from lands granted by the Crown prior to March 12, 1906 (except when the

timber has been included in a tree farm license), is considered exportable under part

12 of the Forest Act of 1979 and thereby not subject to Provincial export controls.

According to the act, the timber is not subject to the restrictions and exemption process. Federal authorities, however, require that a Provincial export permit is obtained.

90 Shinn 1993: 8 (see footnote 6).

91 Austin 1969: 13 (see footnote 3); also Shinn 1993 (see

footnote 6).

43
Exemption regulation92 is based on the 1979 Forest Act:

The Lieutenant-Governor may exempt from use or manufacture within the

Province, a species of timber or a volume of timber for a period or successive periods of time, whether standing or felled. Exemptions of harvested volumes over 15000 cubic meters [3.3 million bd. ft.] or exemption

prior to harvest requires approval by the Lieutenant-Governor in Council

through an Order in Council.

The Lieutenant-Governor in Council may exempt harvested or standing timber. The

Minister can exempt only harvested timber on applications less than 15 000 cubic

meters (3.3 million bd. ft.) in volume. According to the act, the Minister of Forests

may exempt volumes of harvested timber for export as long as they do not exceed

15 000 cubic meters (cum; 3.3 million bd. ft.). To establish whether harvested timber

is surplus to local needs and may be exported, the location from where the timber

originated must be known. This is because timber from the coast is subject to

inclusion in the Vancouver Regional Bi-Weekly Export List, and timber from the interior

must go through a prescribed form of surplus testing. If after this timber has been

advertised and receives no offers, or has been qualified as surplus timber, the

application is submitted to TEAC for review and recommendations.

Substitution regulations exist in British Columbia, as well, although they are not as

restrictive as those in the United States. According to current TEAC policy, TEAC will

not93

...consider offers for logs being advertised...by any company or individual

who has exported logs directly or indirectly from the Province for the previous three months...nor will they recommend any applications for export

from a company or individual who has submitted a valid offer for logs being

advertised on the Bi-Weekly list for a three month period.

All standing timber applications, where the Ministry has concluded that for coastal

timber unusual circumstances warrant such an exemption, are reviewed by TEAC.

General (or blanket) standing timber exemptions usually specify volume, species and

timber quality eligible for export, and in most cases, they encompass one or more geographic areas of the Province.94 Long-term standing timber exemptions also exist.

They too are granted by the Lieutenant-Governor through an Order in Council. A 1990

Order in Council, exempting standing timber for Mid Coast, North Coast, and Queen

Charlotte Island market loggers, has expired without renewal.

Fees in lieu of manufacture still exist and must be paid by all who export timber from

Provincial lands. For coniferous saw logs meeting the surplus criteria, a fee of 100

percent of the export premium (the difference between the export price and the

domestic price) must be paid. For pulp logs, the fee is 40 percent. If the export exemption is based on economic criteria or on usage criteria, the fee is then 15 percent.

A minimum of C$1 per cum must be paid.

92 British Columbia Ministry of Forests. 1992. Province of

British Columbia Procedures for Export of Timber. 20700-02,

Export Procedures Document. October 14: 2.

93 British Columbia Ministry of Forests. 1992: 7 (see footnote 92).

94 British Columbia Ministry of Forests. 1992: 8 (see footnote 92).

44
All Provincial fees must be paid by those who have been approved for an export permit by the Province. The Federal Government approves the export exemption (as it

usually does), and charges a C$15 Federal export permit fee. The Federal fee must

also be paid for timber exported from lands that are not subject to the Provincial rules.

Log Exports From Indian

Lands in British

Columbia

Indian bands95 in British Columbia have been given the rights to use the resources

on federally owned land within British Columbia and the rest of the Dominion. Indian

timber regulations were promulgated under the Indian Act. Essentially the timber is

owned by the Federal Government and is shared for use and benefit of the Indians.

Rights to use the timber are owned by the band as a whole, where each member has

equal rights to the timber. The proceeds from any sale, for export or otherwise, therefore go to a trust account for the band, not to a particular individual.

The lands are under the jurisdiction of the Canadian Department of Indian and Northern Affairs and are not restricted by the rules and regulations of the British Columbia

Forest Service. Therefore, the band does not have to get approval for a Provincial

permit before applying for a Federal permit. If the band wants to export goods, they

must do so through the Canadian Department of Foreign Affairs in Ottawa. An additional approval is required from the Department of Indian and Northern Affairs after

the band has proven that there is no local use for such timber.

Import Restrictions Key developments—

• Early Animal Plant and Health Inspection Service

(APHIS) Import Restrictions

• APHIS Log Import Restrictions Specific to New Zealand and Chile

• Generalized Rules for Log and Lumber Imports

• Moratorium on Imports under APHIS Rules

Since its European occupancy, North America has seen the accidental importation

of more than 300 insects and diseases affecting trees and shrubs. Other insects and

diseases have affected farm crops and livestock. To prevent further incursions, the

Animal and Plant Health Inspection Service (APHIS) was established in the U.S. Department of Agriculture.

Early APHIS regulation prohibiting log imports into the United States stemmed from

detailed pest risk assessments, which found that dangerous plant pests could be

introduced to domestic stands with the importation of logs containing such threats.

Log imports into the United States from countries other than Canada were in limited

quantities, though, because of the vast resources available here, and there were

diseconomies of scale for anyone who undertook such a venture. The APHIS import

regulations therefore called for inspection only at port of arrival, followed by treatment

or reexport if certain plant pests were found.

As the available timber supply in the Western United States and Canada has declined, demand has shifted to nontraditional sources. Wood manufacturers are beginning to use the foreign sources to offset expected harvest reductions, and to provide

raw materials for their facilities at prices competitive with or better than domestic

United States

95 Indian bands correspond to U.S. Native American tribes.

45
prices. The sources, particularly New Zealand and Chile, have developed a commercial interest and expertise in forest management and are entering the log export market with increasingly large volumes of timber at competitive prices.

As domestic mills turned to new markets for viable substitutes for the declining Northwest timber supply, APHIS recognized the need to protect the domestic forest stands

from pests that may be imported with the timber from nontraditional regions. The primary source of timber had become (and remains) New Zealand, so a pest risk assessment for radiata pine (Pinus radiata) and Douglas-fir from New Zealand was conducted by the USDA Forest Service. It was found that fumigation and heat treatment

would be required to, respectively, kill the insects and destroy the fungi found in the

logs before they were imported. As a result, APHIS amended its foreign quarantine

regulations to specify an exception for log imports from New Zealand in the form of an

interim rule.

Guidelines were set by APHIS for care and handling of the logs until they received

processing at a facility in the United States. Before being eligible for import into the

United States, the timber had to be sawn from live, healthy trees that were free from

decay, which had been debarked to help identify deep boring wood pest infestations

and to remove other pests housed in the bark of the trees. The regulations also

required that the timber be fumigated with methyl bromide within 45 days of felling.

At the time of import, the importer must have held an import permit or a certificate

issued by the New Zealand Plant Protection Service saying that the logs had been

treated as required before importation, with documentation stating the type, quantity,

and origin of the logs and verifying that the required phytosanitation treatment was

done.

An import inspector might then visually inspect the logs and even require additional

treatment if the logs did not meet the necessary requirements. After inspection, the

logs were required to go directly to the facility where they were to be sawn and be

heat treated immediately.

With imports from Chile increasing, and involving the same species as from New

Zealand, APHIS extended and modified the New Zealand procedures to embrace

both source nations.96 The broadened rules also added elements of leniency. For

example, certificates could now be signed by an authorized government employee,

not specifically a plant inspection person, as had been required earlier. In addition, it

allowed wood products to be transported in the same hold or sealed container with

any wood articles. APHIS did stipulate that at least 7 days advance notice had to be

given before the arrival into the port.

In 1995 APHIS expanded to all source countries their import rules for unmanufactured

wood articles.97 The broadened rules addressed heat treatment, fumigation, irradiation, and other means of pest control. Softwood logs from sources other than Canada,

96 U.S. Department of Agriculture, Animal and Plant Health

Inspection Service. 1993. Importation of Monterey pine logs

from Chile and Monterey pine and Douglas-fir logs from New

Zealand. Federal Register 58, No. 215 (November 9, 1993):

59348-59353.

97 U.S. Department of Agriculture, Animal and Plant Health

Inspection Service. 1995. Importation of logs, lumber, and

other unmanufactured wood articles. Federal Register 60, No.

101 (May 25, 1995): 27665-27682.

46
Mexico’s U.S. border States, Chile, and New Zealand must be debarked and heat

treated (versus debarked and fumigated in the cases of Chile and New Zealand).

Tropical hardwood logs must be either debarked or fumigated. Temperate hardwoods

must be either fumigated or debarked and then heat treated. Log and lumber imports

from eastern Russia (and other places north of the Tropic of Cancer and east of longitude 60o E.) must be debarked and heat treated.

In March 1997, after about 500 import permits had been issued, a U.S. District Court

in San Francisco placed an injunction on issuance of new permits. The decision applied to temperate hardwood and softwood logs and lumber, including kiln-dried sawn

items. New permits for tropical woods were not impeded by the decision, and neither

were existing permits for other woods, although revisions in the latter are not allowed.

The basis for the decision was environmental concerns. APHIS began a revision of

their environmental documentation, to be completed for a court hearing in May 1998.

Canada Because of recent supply restrictions, the issuance of multiple use regulations, and

price fluctuations, Canadian mills and timber buyers have been looking offshore to

supply themselves with needed timber. This interest in imported timber supplies led

the Food Production and Inspection Branch of the Federal Animal and Plant Health

Directorate, Plant Protection Division, to issue a directive barring the import of timber

unless it is tropical (grows only in tropical climates not found in North America) or it is

being imported from a country for which a pest risk assessment has been done, similar to those done by the United States (APHIS) for Chile and New Zealand. To date,

only the former USSR has been evaluated and pest risk requirements established to

ban the importation of pest and disease that could decimate North American timber

stands. Therefore, as of May 1994, only timber from the continental United States,

tropical timber (the accepted, specified species), or timber from the former USSR

countries can be imported into Canada. Unmanufactured wood products are defined

as logs, lumber, wood packing material, wood chips, bark, wood mulch, and shingles

that have undergone only primary processing, consisting of the removal of limbs,

debarking, rough sawing, rough shaping, and spraying with fungicide or insecticide.98

The directive, based on the Plant Protection Act, S.C. 1990, c.22 and the Plant Quarantine Regulations C.R.C., c.1273, require that all imported lumber must be kiln dried

(and certified to have met certain degrees of heat treatment) and wrapped soon after

kiln drying in such a way as to prevent reinfestation. No permit to import is required.

Items not kiln dried are not allowed into Canada. Exemptions include timber products

from tropical trees that are completely free of bark (except logs), other processed and

manufactured wood products (also 100 percent free of bark), or by a case-by-case

exemption for educational, scientific, or industrial purposes. To obtain an exemption

such as the last one, prospective importers must contact the Associate Director of the

Import Section, Plant Protection Division.

Acknowledgments This report would not have been possible without the assistance and support of

Donald Flora and Richard Haynes. To these individuals and many others who have

answered innumerable questions and reviewed various copies, thank you.

98 Bradnock, W.T. 1994. Memorandum [of May 16] to the

Trade: Import of Logs, Lumber and Other Unmanufactured

Wood Products from Areas Other Than the Continental

Unites States and the Former USSR. Copy on file with:

Pacific Northwest Research Station, 4043 Roosevelt Way

NE, Seattle, WA 98105.

47
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Document continues on next page.
Lane, Christine L. 1998. Log export and import restrictions of the U.S. Pacific Northwest and British Columbia: past and present. Gen. Tech. Rep. PNW-GTR-436.

Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest

Research Station. 61 p.

Export constraints affecting North American west coast logs have existed intermittently since 1831. Recent developments have tended toward tighter restrictions.

National, Provincial, and State rules are described.

Keywords: Log exports, log imports, log embargoes, log trade restrictions.

The Forest Service of the U.S. Department of

Agriculture is dedicated to the principle of multiple

use management of the Nation’s forest resources

for sustained yields of wood, water, forage, wildlife,

and recreation. Through forestry research, cooperation with the States and private forest owners, and

management of the National Forests and National

Grasslands, it strives—as directed by Congress—to

provide increasingly greater service to a growing Nation.

The United States Department of Agriculture (USDA)

prohibits discrimination in its programs on the basis

of race, color, national origin, sex, religion, age, disability,

political beliefs, and marital or familial status. (Not all

prohibited bases apply to all programs.) Persons with

disabilities who require alternative means of communication of program information (Braille, large print, audiotape,

etc.) should contact the USDA’s TARGET Center at

(202) 720-2600 (voice and TDD).

To file a complaint, write the Secretary of Agriculture,

U.S. Department of Agriculture, Washington, DC 20250,

or call (800) 245-6340 (voice), or (202) 720-1127 (TDD).

USDA is an equal employment opportunity employer.

Pacific Northwest Research Station

333 S.W. First Avenue

P.O. Box 3890

Portland, Oregon 97208-3890
U.S. Department of Agriculture

Pacific Northwest Research Station

333 S.W. First Avenue

P.O. Box 3890

Portland, OR 97208

Official Business

Penalty for Private Use, $300

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