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HEARING

BEFORE THE

SUBCOMMITTEE ON FORESTS

OF THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

NINETIETH CONGRESS

FIRST SESSION

H.R. 11360 and H.R,,

\O"‘

Pr'4 095or the use of the Committee on Agriculture

SEPTEMBK* , , 1967

c;s:OCC Serial V

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1907
COMMITTEE ON AGRICULTURE

W. R. POAGE, Texas, Chairman

E. C. GATHINGS, Arkansas,

Vice Chairman

JOHN L. McMILLAN, South Carolina

THOMAS G. ABERNETHY, Mississippi

WATKINS M. ABBITT, Virginia

PAUL C. JONES, Missouri

FRANK A. STUBBLEFIELD, Kentucky

GRAHAM PURCELL, Texas

MASTON O'NEAL, Georgia

THOMAS S. FOLEY, Washington

JOSEPH Y. RESNICK, New York

ELIGIO DE LA GARZA, Texas

JOSEPH P. VIGORITO, Pennsylvania

WALTER B. JONES, North Carolina

JOHN G. DOW, New York

BILL NICHOLS, Alabama

G. V. MONTGOMERY, Mississippi

FRANK J. BRASCO, New York

JOHN R. RARICK, Louisiana

PAGE BELCHER, Oklahoma,

Ranking Minority Member

CHARLES M. TEAGUE, California

CATHERINE MAY, Washington

ROBERT DOLE, Kansas

GEORGE V. HANSEN, Idaho

WILLIAM C. WAMPLER, Virginia

GEORGE A. GOODLING, Pennsylvania

CLARENCE E. MILLER, Ohio

J. HERBERT BURKE, Florida

ROBERT B. MATHIAS, California

WILEY MAYNE, Iowa

JOHN M. ZWACH, Minnesota

THOMAS S. KLEPPE, North Dakota

ROBERT PRICE, Texas

JOHN T. MYERS, Indiana

RESIDENT COMMISSIONER

SANTIAGO POLANCO-ABREU, Puerto Rico

CHRISTINE S. GALLAGHER, Clerk

HYDE H. MURRAY, Assistant Counsel

L. T. EASLEY, Staff Consultant

SUBCOMMITTEE ON FORESTS

JOHN L. McMILLAN, South Carolina, Chairman

MASTON O'NEAL, Georgia GEORGE V. HANSEN, Idaho

THOMAS S. FOLEY, Washington CHARLES M. TEAGUE, California

JOHN G. DOW, New York CATHERINE MAY, Washington

II
CONTENTS

H. R. 11370, a bill to require the Secretary of Agriculture to compensate

certain permittees where permits for summer or recreation-type residences on national forest lands are terminated and not renewed, and rage

for other purposes 1

Freeman, Hon. Orville L., Secretary of Agriculture, letter of September 26,

1967, report on H.R. 11370 1

Greeley, Arthur W., Associate Chief, Forest Service, U.S. Department of

Agriculture, statement of 3

Nelson, M. M., Deputy Chief, Forest Service, U.S. Department of Agriculture, letter of October 9, 1967 21

SUMMER HOME PERMITS IN NATIONAL FORESTS

WEDNESDAY, SEPTEMBER 27, 1967

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON FORESTS OF THE

COMMITTEE ON AGRICULTURE,

Washington, D.C.

The subcommittee met, pursuant to notice, at 10:05 a.m. in room

1302, Longworth House Office Building, Hon. John L. McMillan

(chairman of the subcommittee) presiding.

Present: Representatives McMillan, O'Neal, Hansen, Teague of

California, and Mrs. May.

Also present: Christine S. Gallagher, clerk; and Hyde H. Murray,

assistant counsel.

Mr. MCMILLAN (presiding). The subcommittee will come to order.

At this time, the committee would like to hear from Mr. Greeley or

Mr. Nelson, whichever one decides to make a statement. All of you

can come to the stand at the same time if you desire. Your statement

is on H.R. 11360 and H.R. 11370.

(H.R. 11360, by Mrs. May, and H.R. 11370, by Mr. McMillan, are

identical bills, the text of which follows:)

[H.R. 11370, 90th Cong., first sess.]

A BILL To require the Secretary of Agriculture to compensate certain permittees where permits for summer

or recreation-type residences on national forest lands are terminated and not renewed, and for other

purposes

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That whenever an area of national forest land upon

which a summer or recreation-type residence was constructed and is being maintained under a permit is needed for public use or other purposes and the permit

therefor is either terminated or not renewed or extended, the Secretary of Agriculture shall, notwithstanding any specific provision of the permit, compensate

the permittee, for the reasonable cost of moving the buildings and associated

structures to such other site as may be available, and, if no other site is available,

compensate the permittee for the value of such residence and related structures as

determined by competent appraisal: Provided, That in no event shall the compensation for the cost of moving such residence and related structures exceed the

the value thereof. In determining the compensation to be made to the permittee,

due consideration shall be given to the proportionate share of the permittee in

any community systems or facilities constructed and maintained by the permittees

in the area.

Hon. W. R. POAGE,

Chairman, Committee on Agriculture,

House of Representatives.

DEPARTMENT OF AGRICULTURE,

Washington, D.C., September 26, 1967.

DEAR MR. CHAIRMAN: As requested by your letter of July 27, 1967, here is our

report on H.R. 11370, a bill "To require the Secretary of Agriculture to compensate certain permittees where permits for summer or recreation-type residences

on national forest lands are terminated and not renewed, and for other purposes."

We recommend that this bill not be enacted.

H.R. 11370 concerns compensation to permittees whose use of National Forest

lands for summer homes or other recreation-type residences is terminated or not

1
2 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

renewed or extended because the land under permit is needed for public use or

other purposes. The bill would require the Secretary of Agriculture, notwithstanding specific permit provisions, to compensate the permittees in such cases

for the reasonable cost of moving permittee-constructed buildings to another

available site. If no other site is available, he would be required to compensate

the permittee for the value of such residence and related structures as determined

by competent appraisal.

In no event would the compensation for the cost of moving such residence and

related structures exceed the value thereof. In determining the compensation,

due consideration would be given to the permittee's proportionate share in any

community systems or facilities constructed and maintained by the permittees

in the area.

The provisions of this bill would apply only to summer home or other recreationtype residence permittees. However, enactment of legislation on this subject

would be precedent-establishing. We view the problem of the precedents which

enactment of this bill would establish as leading to many of the same problems

as those associated with H.R. 4884 and similar bills on which we reported June

13, 1967.

National Forest special-use permits are legally drawn and executed agreements

between this Department and the permitholders. All existing National Forest

permits specifically set forth what, if any, obligations the Federal Government

has for compensating the permittee for improvements built on the permit area

upon the expiration or termination of the permit. They also specify the rights and

obligations of the permittee as to the removal of the improvements upon such

expiration or termination.

There are two general types of permits insofar as duration is concerned—term

permits, and terminable permits.

Term permits are issued for a specified term of years. Under the Act of March

4, 1915 (16 U.S.C. 497), 30 years is the maximum term that can be granted.

Terminable permits are revocable at will. Such permits usually provide that

they may be terminated at the discretion of the Chief of the Forest Service.

None of the permits provides for any compensation to the permittee when the

permit is terminable at any time or where the specified term of the permit has

expired. Term permits frequently do provide for compensation if the permit is

terminated during the term.

We try to give notice far in advance when we intend not to renew permits

because permitted areas are needed for other uses. In such cases we have usually

alerted permittees 10 years or more prior to termination. In all the cases we have

been able to identify from our records here, such notification has been for 10 years

or longer.

Most permittees who acquired or placed improvements on National Forest

lands have done so under known and agreed to provisions of their permits. Since

our report on H.R. 4884, we made a survey to determine the number of summer

residence permits no longer held by the person to whom the original permit was

issued. We found that about 70 percent of the permits have been transferred to a

purchaser of the improvements. On a transfer of permit, the new holder is usually

required to sign in acceptance of the terms. Consequently, we believe it is fair to

say that most permit-holders know the provisions of the permits.

To give the present permittees entitlement to compensation, as H.R. 11370

would do, would bestow on them an asset or windfall, that was not contemplated

when they accepted their permits. To give them entitlement to payment of moving

costs and the other provisions of the bill, would create a privately owned interest

in National Forest land which is a special privilege not available to any other

users of the National Forests or to the using public. Since there is no cut-off point,

the obligation of the Government to be prepared to meet this obligation would

continue indefinitely unless terminated voluntarily by the permitholder.

Enactment of H.R. 11370 also could, very well, constitute a precedent for other

authorized users of National Forest lands. About 62,000 special-use permits issued

by the Forest Service presently authorize use of National Forest lands for a wide

variety of purposes. Most of these permits involve permittee-built and owned

improvements of some kind. Other Federal agencies also permit the use of lands

administered by them for summer homes and other purposes. In addition, there

are some 20,000 holders of permits to graze domestic livestock on the National

Forests. Many of them feel there is a strong argument favoring some level of

compensation for decreases in their use of the range for any reason other than

the desire of the permittee.
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 3

The Bureau of the Budget advises that it has no objection to the presentation

of this report from the standpoint of the Administration's program.

Sincerely yours,

ORVILLE L. FREEMAN, Secretary.

STATEMENT OF ARTHUR W. GREELEY, ASSOCIATE CHIEF; ACCOMPANIED BY M. M. NELSON, DEPUTY CHIEF, REYNOLDS

G. FLOR.A.NCE. DIRECTOR, DIVISION OF LEGISLATIVE REPORTING

AND LIAISON, AND RICHARD J. COSTLEY, DIRECTOR, DIVISION

OF RECREATION, FOREST SERVICE, U.S. DEPARTMENT OF

AGRICULTURE

Mr. GREELEY. My name is Arthur W. Greeley, and I am Associate

Chief of the Forest Service, and with me is Mr. M. M. Nelson Deputy

Chief of the Forest Service, Mr. Reynolds G. Florance, Director,

Division of Legislative Reporting and Liaison, Programs and Legislation, and Mr. Richard J. Costley, Director, Division of Recreation.

Mr. MCMILLAN. We are delighted to have you gentlemen with

us. We are proud of the Forest Service.

I\ Ir. GREELEY. We certainly appreciate the opportunity to be

here this morning.

Mr. MCMILLAN. You may proceed in any way that you desire.

Mr. GREELEY. I would just like to, informally, summarize the

substance of a report which we have just sent to the committee,

referring to H.R. 11370, which arrived, I believe, on yesterday. I

do not want to read all of it. I believe that copies are before the

subcommittee.

I would like to turn over to page 2 of this letter and highlight a few

points.

We recommend that H.R. 11370 not be enacted. And we would like

to tell you why we have reached that conclusion.

As the committee is already well familiar with the use of the national

forests and because the committee is also familiar with the type of

permits that we have and the way that they operate, we shall not go

into that.

We are conversant with the type of problems that have been presented to the subcommittee and we are conversant with the testimony

you have received in the hearings that were conducted out West and

also the earlier hearings that were held here in Washington on H.R.

4884.

We believe that this bill should not be enacted primarily because we

feel that this would give a special preferential treatment to one type of

permittee. It would confer a benefit on those who hold these permits

which we feel was not contemplated at the time the permits were issued.

We believe that this would be pretty much in the nature of an asset, or

it might be called a windfall, particularly because we feel that this

would tend to do that.

We also think that this legislation would create a privately owned

interest in national forest lands which is a special privilege not available

to other users of the national forests.

In addition, we are concerned about the precedent that would be

set by this kind of legislation. As we have told you before, just to

review the record for a moment, there are about 52,000 permits which
4 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

have been issued for various kinds of uses of the national forests or

for other purposes. Many of these permits do involve perm- itteeimprovements of some kind.

In addition, there are some 20,000 holders of permits to graze

domestic livestock on national forest lands. Many of those permittees

who hold permits and graze livestock feel that they can make a strong

argument to favor some level of compensation for them as permittees

when there is a decrease—and it is determined there is a need for the

land by the Government—in the use of the range. I think perhaps we

have commented upon that before.

I would like to stress again that this issue of whether there should be

compensation for grazing permittees, where the numbers of the livestock grazed are reduced in numbers, is a matter that has been batted

back and forth between the Forest Service and the grazing permittees.

It has been discussed informally before other congressional committees.

We have felt very strongly that if there were to be legislation or if

there were to be any official act by the Federal Government that would

constitute a recognition of the grazing privileges as involving a compensable right, that we would undertake the level of the obligation for

the Federal Government which is far in excess of that which we feel

has been at anytime thought to be appropriate or contemplated. We

see this as a point of really quite a major concern in this legislation,

and it is another reason why we thought that we must send up a

report recommending that the bill not be enacted.

Mr. Nelson may have some points that he would like to add to

this, and I would like to ask, Mr. Chairman, that he be afforded an

opportunity to say what he may have to say to you.

Mr. MCMILLAN. We will be glad to hear from you now.

Mr. NELSON. I want to mention one other thing along the precedent line, and that is that a lot of our permits are for the construction

of roads. Some of these are old permits. The roads have been used by the

timber operators in connection with the getting out of some of their

private timber where they had to cross national forest land. We have

always reserved the right to use those roads for the public. There

have been some past proposals that the Government should reimburse

or compensate these timber operators for the roads that have been

constructed in the past and for which the construction or the use

permit clearly indicated that there would not be such compensation.

Presently this type of road is usually built under a share-cost

agreement, and that problem has been solved, because we have an

agreement whereby we can determine what part of the over-all road

cost is borne by the operator and what portion is borne by the Federal

Government, based mostly upon the volume of the timber that is

to be hauled over the road system.

We do not feel that there should be anything that would be retroactive. This bill could create a precedent that might eventually cost

the Government tremendously large sums in reimbursement for some

roads built under a different contract that did not anticipate any

sharing of costs by the Government.

Mr. MCMILLAN. Thank you.

Mr. GREELEY. I think that these are all of the comments that we

have to make.

We will be glad to respond to questions, if any of the members of

the subcommittee have questions.
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 5

Ir. MCMILLAN. Are there any questions by members of the

subcommittee?

Mr. O'Neal?

Mr. O'NEAL. Mr. Greeley, is this one of the subjects that will be

discussed by the—I do not know the exact name of this Review Commission. Is it one that will be studied by this Commission?

Mr. GREELEY. The Public Land Law Review Commission?

Mr. O'NEAL. Yes.

Mr. GREELEY. We have no exact knowledge, but they have listed

this as one of the items they might consider.

Mr. O'NEAL. That is what I am asking about.

Mr. GREELEY. That is correct.

Mr. O'NEAL. It is one of the things on their agenda?

Mrs. MAY. I did not hear that.

Mr. GREELEY. The answer was that this is one of the iteir s that

the Commission has indicated it will study.

Mrs. MAY. The question of the roads, or the whole question of the

summer homes?

Mr. O'NEAL. I meant the whole subject of the permittees.

Mr. GREELEY. Let me answer as specifically as my knowledge

permits.

One of the operating procedures of the Public Land Law Commission, the way they proceed, has been to invite contractors to study

the different elements of the general subject. For instance, the subject

of compensation in lieu of taxes is one, in which they have a formal

study in the process of preparation. My understanding is that the

Public Land Law Review Commission has received testimony and has

presented opportunities to receive testimony on this very question of

compensation of summer home permittees, but my information also

is that they have not asked for a specific contract study on this matter.

Mrs. MAY. I think that it is rather important that we make that

differentiation. They have not contracted the study, as such, as I

understand it, that is presently undergoing.

Mr. GREELEY. That is my -understanding. That is the way that it

is as of now.

Mr. NELSON. I might say that I attended the hearings held by the

Commission in Spokane, Wash., just this past month, and there were

a number of people who testified on this same subject—some of the

same people who testified before the subcommittee. So the subject

has been brought before the Commission very definitely.

Mrs. MAY. What I wanted to try and establish here is this: Does

this mean that when the Commission comes up with its final conclusions from the studies that it is undertaking it will not necessarily

mean that any recommendation in this area is going to be in the

report—or is that something we do not know?

Mr. GREELEY. I think that we have to say that we do not know.

Mr. MCMILLAN. Mrs. May?

Mrs. MAY. With your permission, Mr. Chairman, and that of the

subcommittee members, since we are making a record on this bill, I

would like to make a short background statement, if I may, before I

start to posing questions.

Mr. MCMILLAN. Without objection, you may do so.

85-506-67-2
6 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

Mrs. MAY. In an attempt to put this newly introduced legislation by

the chairman of the subcommittee and myself into proper perspective—

that is, H.R. 11370 and H.R. 11360—I would just like to go back

briefly to the hearings that were held in the West by the subcommitteeMr. Nelson and Mr. Florance were both present during those hearings in the several States. We can all recall that we heard much

testimony from many persons and groups who have been leasing the

Forest Service lands for many years for their summer homes. The main

thrust of their arguments was that originally, when the public lands

were first opened to summer-home owners, the U.S. Forest Service,

through its representatives, did actually request, urge, and encourage

them to come on the land and build these cabins. We heard time

after time from these individuals that they sincerely believed that

they had been told by the Forest Service representatives in these

earlier years, going back as far as 30 or 40 years, that they could stay

on that land for years. Assurances were given that although their

permits would expire after a while, they could almost automatically

expect renewals.

So, the reason that we have the problem before us today is that on

the basis of this optimistic prognosis, many summer-home owners in

many of these Western States subsequently made far heavier invest-,

ments in their cabins and other improvements than they would have

made otherwise.

I think that, Mr. Chairman, might be a fair statement of the type

of testimony that we heard.

Now, we have come to a time when the members of this subcommittee certainly recognize that the U.S. Forest Service also has a

problem. The ever-increasing population pressure brings the need for

more public recreation sites. So the U.S. Forest Service is faced with

a situation that they, had not anticipated years ago. I assume there

will probably be few, if any, new summer-home sites allotted to private

individuals or organizations—I may just say "private individuals." I

want to exempt charitable-type operations, and organizations like

youth groups. Also, in many areas already, it has been necessary to

ask the people who have summer homes, and have had them for many

years, to move so that public recreation areas can be developed.

I think that the members of this subcommittee realize that practically all of these people who have been enjoying the use of summer

homes over the years should have gone into this with their eyes wide

open and should have known what was in the fine print of their lease.

They should have known or perhaps investigated it further, that at

anytime the Forest Service could have refused to extend their leases

beyond a certain period of time. They should have known, I think,

that this situation that we have today might arise. But time after time,

in the questioning of the witnesses, and in the thousands of the letters

that I am sure collectively we have all received, these individuals said

they just relied on what the Forest Service in earlier years had advised

them to expect.

It is true that the summer-home owners have enjoyed the use of

these cabins. But I also think it ought to be pointed out, that they

have paid fees for this land use—that fees which are the same that

they might pay for rental for private land in a similar situation.
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 7

Originally we had before this subcommittee bills to change policy on

summer leases that went much farther than the two bills we have before

us today. H.R. 4884 is a typical example. It became apparent to this

subcommittee that there would be a tremendous amount of objection,

a great deal of controversy involved, in trying to pass legislation of

this type, because the Forest Service, and I think very soundly, has

presented a good argument that it went too far. It was at this point

that the subcommittee chairman and I agreed that we might try to

have legislation written that would meet some of the objections of the

U.S. Forest Service to the original bill and to come up with something

that would attempt to partly correct what we think is an injury to

these people, the summer-home owners, and one that perhaps the

Forest Service could live with.

As a direct result of that, the two bills that the chairman, Mr.

McMillan, and I introduced, H.R. 11370 and H.R. 11360, were

drafted.

Your testimony, in objecting to the bill, Mr. Nelson and Mr. Greeley

goes to the point of the original legislation. You have brought up a,

matter that we must take into serious consideration if we are responsible members of this subcommittee, and that is the matter of precedent. You have expressed great concern that this might tend to bring

about a precedent for, I think, some 62,000 other types of permittees

on Forest Service lands. It seems to me that we might investigate and

review the possibility of writing out the congressional intent, that this

is a separate group entirely with a different problem.

For instance with reference to the matter of grazing leases, in that

respect you feel that those who have had the use of the grazing land

on Forest Service properties for many years might use this as a

precedent for themselves?

I would point out that there is a great distinction in my mind

between a man who puts his livestock to graze on Forest Service

lands for a fee, because he is earning income from that livestock, and

a summer-home permittee who does not make any income on his

property. The average summer-home permittee has made investments

in not only the structure, his cabin, but in many cases we heard testimony that over the years because he felt that he had an assurance

from the Forest Service for a long-term tenure, he went ahead and built

roads, built water and electrical systems on the property and made

other types of improvements. Particularly was this true of those who

have developed these areas as a group or as an organization. But at

practically no time have any of the people we are talking about ever

profited from having summer homes on Forest Service land.

I might ask you, Mr. Greeley or Mr. Nelson, would this be a proper

differentiation between the other permittees that you have referred

to when you expressed a concern about setting a precedent for them

and the summer-home permittee?

Mr. GREELEY. Mrs. May, if I may comment. That certainly would

be a distinction—a very clear distinction. I guess that there are probably some summer-home permittees who rented their summer homes

out. I do not know, really, how wide a problem that is.

Since the last time we appeared before the subcommittee on this

general subject, we have accumulated some information that I think

is of interest and is relevant to this subject.
SUMMER HOME PERMITS IN THE NATIONAL FORESTS

We asked our field offices to make a tabulation for us of the number

of recreational resident permits that are still held by the original

permit holders, that is, in comparison with those who have transferred somewhere along the line, and while there is considerable

variation in different parts of the country, the total for all of the

summer-home permits on national forest lands that are held by the

original permittees is about 25 percent-24-and-a-fraction percent.

That would mean, of the total, about 75 percent have turned over at

some time since the original permit was issued.

I think that of the 24-plus percent that is held by the original permit

holders, probably a very substantial proportion were in the situation,

as a permit holder, where they were either urged or responded to urging

from friends and neighbors to go to a piece of the land that did not

have any summer-home development. It was not a matter of going

someplace and buying a summer home that somebody else had

built.

Since they were original permit holders, obviously, they are the

ones who put in the improvements, and put in whatever community

development there is.

It seems to me that possibly here, too, is a distinction between

those who really, as shown by the records, were the original permittees

and those who just went to a real estate office and took a listing and

bought the summer home and it turned out to be on a national

forest land.

So, as I have listened to your general description of this matter,

Mrs. May, here this morning, it would seem to me that perhaps

there is some significance, too, in these figures. And this is possibly

something that might be useful to develop.

Mrs. MAY. I think that it is, Mr. Greeley, and it is an important

facet to be added to my statement, because it is not fair to blame

the representatives of the Forest Service who are working for the

Forest Service now for happenings long before they were there.

So that, in this entire matter, you are quite right. It has changed.

Real estate firms who sold these homes for owners, obviously, have

contributed to some misunderstanding. We have heard a great deal of

testimony on this, and there is reason to believe that real estate representatives, just trying to get the prospective purchaser to buy, created

the situation by not making it clear that there was always the question of tenure as to the summer home lease.

It is only fair to state for the record that this also became a part

of the confusion leading to encouragement of many people to make

substantial capital investments without really understanding the

uncertainty of their tenure in these Forest Service lands. You are

quite right about that. And those figures are interesting. In other

words, what you are trying to say is that, as far as you can tell from

your study of the original owners, only about 25 percent are still in

their summer-home cabins; in other words, that there has been a

turnover of the property one time or more so there could have been

a profit realized on the turnover of many of these summer homes.

Mr. GREELEY. There could have been a profit realized. There could

have been a difference in the terms between the original and subsequent ones, and, also, I think this problem tells us something about

the proportion of the permittees who undertook their permits with

some reasonable expectation that they knew or should have known

what the terms of their permits were.
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 9

To my own knowledge, the Forest Service field people have been

quite active about telling the summer-home permittees about this,

trying to get them to understand what the conditions of the permit

are. I cannot make the statement about this prior to 1940. My own

personal experience does not go to that period of time. I think there

was a great deal of variation in those years of individual Forest Service

people in the field.

Mr. HANSEN. Will you yield?

Mrs. MAY. Yes.

Mr. HANSEN. I was going to suggest at this point that you people

have been very active in Forest Service, in the Department, and

should be very much aware of the problem that we are concerned with.

I think that you are probably right.

Mrs. MAY. I went back over the testimony of those field hearings

and noticed that there was quite a pattern of the greater objection

coming from those people who had been in summer homes back before

1945. I think that your comment is probably true, that most of the

feeling of inequity comes from those who dealt with earlier representatives of the Forest Service.

Mr. GREELY. I think that must be true. A great many of those who

were the earlier ones prior to the 1940's are also the same ones who,

by the sweat of their own brow—and I think this is correct—put in

these improvements. There is some line of demarcation somewhere in

there. It is in the forties.

Mrs. MAY. In connection with this, I know of some cases that have

come before the subcommittee of a number of retired people who,

obviously, without understanding the terms of their purchases—and

we ran into this in several instances—have put practically all of their

capital savings into summer home purchases in certain areas in anticipation that they could live out their lives there, and they would

not have made that investment had they not so felt. I do not know

what percentage that constitutes. Probably not too large, but this is

a problem that we will get into with these people.

Mr. GREELEY. I do not have any idea as to their number, either.

Mrs. MAY. I do not either. We have all had letters from them.

We heard from several of them in the field hearings.

Anyhow, Mr. Chairman, I would like to ask some questions on

the bills as they stand before us now.

I should like to ask how it might be administered. But for now I

will relinquish my time.

Mr. McMILLAN. I would like for the record to show that I concur

in Mrs. May's background statement. The reason for the introduction of these two bills is the fact that Mrs. May and I thought that

we should get some type of legislation that can be agreed upon by

the U.S. Forest Service. We thought that these bills were rather mild

and would not be opposed by anyone.

I am glad to have the Department's opinion on these proposed

bills before we go into executive session.

Mr. O'NEAL. Mr. Chairman, may I ask some questions?

Mr. MCMILLAN. Yes.

Mr. O'NEAL. Mr. Greeley, I certainly agree that Mrs. May is

correct about the wealth of testimony that we had out in the West

continually stating that these people had orally had communication
10 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

with some members of the Forest Service which encouraged them to

put heavy investments into their property, with the idea that any

revocation of their permits was so remote as to be of no consequence.

Now, I do not know whether this question has already been answered

by you in this discussion with Mrs. May this morning or not, but

I just want to see what you will say about the extent of these representations that have been made orally by various members. Did you

say that this had not occurred since the forties?

Mr. GREELEY. I tried to delve into this, Mr. O'Neal.

Mr. O'NEAL. I thought that was the exact question, but I was

not sure.

Mr. GREELEY. And I agree that it was an attitude of the Forest

Service field people in the early days of this whole activity to encourage people, first of all, to take out summer home permits and to contemplate putting in quite a good deal of specific arrangements to get

groups of people to go to one area which would be opened up at about

the same time, so that there would be water and road developments.

Mr. O'NEAL. Are you through?

Mr. GREELEY. I just want to make one more point. I have no sure

way of saying, Mr. O'Neal, at what point this kind of thing turned,

but I have thought that there were probably two ways. One was this

figure of what percentage of the present permits are still held by the

original permitholders, because I think probably that most of those

people, especially if they have permits that are 30 years old or longer,

are people who did get permits at a time when they were being encouraged. I do not personally know, but I can say from personal

knowledge that it was sometime subsequent to 1945 or 1946 or 1947,

about along in there, that Forest people began to realize that there

were changing situations and that we needed to have the summer

home permitholders aware of the fact that it looked like there was

going to be more need for using the land for public purposes than

before. Within my own thinking, I would put it in the mid-forties

somewhere as being the time when we began that.

Mr. O'NEAL. Has there been a point in history where the Forest

Service adopted a policy of communicating with its own people, its

own employees, cautioning them against any oral representations that

might tend to confuse the people, and reminding them that the terms

of the written contracts could not be varied? Have you cautioned

your people in the field at anytime that they should never say anything that would represent a policy?

Mr. GREELEY. I cannot recall any instruction in those specific

terms, Mr. O'Neal. I do remember about this same time that I talked

about here, about 1946 or 1947, that we did issue an internal instruction to encourage summer home permittees to know that there were

both term permits and terminable permits, and we encountered, to

our surprise, a good many people who preferred to have a terminable

permit, rather than a term permit, because they thought that if they

accepted the term permit that they would agree that we could take

up their permit at the end of the term; whereas, they felt that as long

as it was a terminable permit, that this was left as an open question.

Mr. O'NEAL. As I understand what you are saying, it was prior to

some 20 years ago that you conceived the idea that there might have

been considerable misunderstanding, because the Forest Service
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 11

employees did encourage people, but in the last 20 years you think

this has been practically nonexistent or at a minimum?

Mr. GREELEY. Yes. I think that basically is correct, that that

summarizes it.

Mr. O'NEAL. Thank you.

Mr. MCMILLAN. Mr. Teague?

Mr. TEAGUE of California. I realize now that H.R. 4884 has been

superseded by H.R. 11370 and H.R. 11360 and is quite different in its

concept, but nevertheless H.R. 4884 still is on our hearing agenda. It

is not likely that we will take any favorable action, but if we did,

would you have any objection to an amendment making it clear that a

bill of that sort would not apply to public utilities?

Mr. GREELEY. May I consult on this?

Mr. MCMILLAN. Yes.

Mr. GREELEY. I think, Mr. Teague, we would have no objection.

Mr. TEAGUE of California. Thank you.

Mr. MCMILLAN. Mr. O'Neal?

Mr. O'Neal. I have one thing more on my mind which is not

exactly related to the things that we were just exploring.

This goes to the survey that you recently made when it was determined that about 24 percent of these permits were held by the original

permitholders.

Now, as I understand it, many of these permits were made so many

years ago that the original permittee undoubtedly is dead. Did you

consider that this 24 percent included those where the permit remained

in the same immediate family?

Mr. GREELEY. I think, Mr. O'Neal, that if a permit turned over

because of inheritance, a bequest, this is probably in the new permits.

Mr. O'NEAL. What?

Mr. GREELEY. This is counted as a newly issued permit.

Mr. O'NEAL. In the 76 percent?

Mr. GREELEY. Yes.

Mr. O'NEAL. Rather than in the 24 percent?

Mr. GREELEY. That is right.

Mr. O'NEAL. So that an inheritance is not really a sale. This

figure should be higher than the 24 percent; should it not?

As I understand you now, the 24 percent is the actual permittee

himself rather than some member of his own immediate family?

Mr. GREELEY. I think that is correct, yes, sir.

Mr. O'NEAL. So that more than 24 percent would still be in the

same family?

Mr. GREELEY. Yes, to the extent that there has been a transfer

through bequest rather than some other way; yes, you are right, the

figure would be somewhat higher.

Mr. O'NEAL. That-is all.

Mr. MCMILLAN. Unless there is some objection on the part of the

members of the subcommittee this part of the meeting will be considered as an open hearing.

Mr. Hansen?

Mr. HANSEN. I have no questions.

Mr. McMILLAN. Mrs. May?

Mrs. MAY. May I pose a series of questions now concerning the

bill, itself, that is before us?

Mr. MCMILLAN. Yes.
12 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

Mrs. MAY. I wonder if we could have informal agreement on a

series of questions that I want to put to these gentlemen from the

Forest Service? I want to get the proper facts before the subcommittee

as it considers the bill. So if the Forest Service would like more time

to answer any of them, can they put the answers in the record later,

permitting them time to get the information to supply the answer?

Thank you.

On page 2, line 5 of H.R. 11370, a provision on the determination

of reasonable costs, under this bill requires the Secretary of Agriculture to compensate the permittee for the reasonable cost of moving

their summer home when their permit is not renewed. Should this

regulation become a law, how would the Forest Service determine the

reasonable cost? What guidelines would you expect in making this

determination?

Mr. GREELEY. Mrs. May, you can see obviously that we cannot

answer that now.

Mrs. MAY. Perhaps, you would rather, answer it later.

Mr. GREELEY. I, perhaps, ought to respond to that more specifically in writing. I would hesitate to say that it would be the actual

cost, but I would think, by and large, it would tend to work out that

way.

Mrs. MAY. In other words, if the actual value of the cabin was,

say, $5,000, and the cost of moving to an alternate site was $4,995,

would the Forest Service consider that a, reasonable cost to move the

cabin?

Mr. GREELEY. We do have a good number that involve estimates

of work to be done.

Mrs. MAY. Do you use competitive bidding?

Mr. GREELEY. I think a way to get at this might be to invite

estimates from several reputable moving firms and to base an allowance

on such an estimate.

Mrs. MAY. I certainly feel that might be well.

Mr. GREELEY. I think we would have to do something like that,

rather than just accepting somebody's bill and say that this is what

it cost them to move their cabin. May we respond to that in writing?

Mrs. MAY. I would like for you to do so.

Now, on the subject of alternate sites, the bill says that a summer

home may be moved to such other site that may be available. Would

the Forest Service interpret this to mean an alternative national

forest site or a privately owned site obtained by the permit tee, or both?

I am posing this question, because it was sent to me by one of my

own constituents after reading the bill.

Mr. GREELEY. I think, Mrs. May, that we would want to consider

it this way: If we found an alternate site and the person involved

found another site on private land that they would prefer to go to,

then we would consider that our obligation had been met. I think we

would consider that we had an obligation to try to find a site. And

if the person involved found some other site that they would prefer,

we would feel that we had met our obligation and they would be able

to go to the other site.

Mrs. MAY. In other words, you would look around, for other public

land?

Mr. GREELEY. Yes.
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 13

Mrs. MAY. And if that was unavailable, and the permittee came to

you and said "I have found a suitable site," you do not feel that you

would have any obligation to move them to that site?

Mr. GREELEY. Well, no; as you say, our obligation to find a site for

them is one thing.

Mrs. MAY. What if a permitte 

Mr. GREELEY. I do not say that we would avoid an obligation to

pay them for the moving cost if they went to their own site.

Mrs. MAY. You are saying 

Mr. GREELEY. In either case.

Mrs. MAY. In my hypothetical case where you have actually made

a search and you do not find available public land sites to which to

move them, but the permittee, through his own efforts, does find a

private site that he would like for himself, then you would feel that

under the wording of this bill you could pay some of the moving cost?

Mr. GREELEY. We would pay whatever is equitable.

He might come up with a site 2 miles away, or he might come up

with one that is much farther away.

Mrs. MAY. There should be some flexibility. You could not move

into another county or into some distant place, I realize.

Mr. O'NEAL. Would you yield?

Mrs. MAY. Yes.

Mr. O'NEAL. Would you not run into frequent problems about

whether the site selected, even in the same forest, was suitable to the

permittee?

Mr. GREELEY. I think we would probably have that in practically

every instance, Mr. O'Neal. I think that would be, probably, with

everybody involved.

Mr. O'NEAL. And they would be dissatisfied with it.

Mr. GREELEY. First of all, they want to stay where they are, and,

secondly, they would want the site to be as favorably located as the

site that we obtained from them for future development for public

use. We would run into that problem. I think this would be a bone

of contention, probably, in every case.

Mrs. MAY. What you are saying is that really the net result of

this might probably be that if there were alternate sites in public 

lands that in most instances it would end up with some sort of an

agreement if he decided to move that you would pay the moving

cost?

Mr. GREELEY. This would be our thinking, as to the result, in

many cases.

Mr. O'NEAL. If you would yield?

Mrs. MAY. Yes.

Mr. O'NEAL. Digressing just briefly, just a little bit. Are you

running out of available sites? You have worlds of land. You have

millions and millions of acres.'

Mr. GREELEY. It is a matter of relative desirability of the sites,

Mr. O'Neal.

Mr. O'NEAL. You are using land for public use that you have to

take from a permittee. If you have your eyes on a site that has a

cabin on it, it would seem that you are really running out of land

for public use if you do this.

Mr. GREELEY. This varies a great deal around the country. Take

some of your part of the country, Mr. Teague. I can see real difficulty
14 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

in finding some alternate sites for that permittee to consider at all

suitable, because there are a limited number of sites in the first place.

There is great public use and the amount of public use is increasing

very rapidly. By comparison, some of the sites in Colorado, and in

the Idaho country, too, I believe, have not had the same pressure

for public use. There, we probably would be able to find sites for

permittees to move to.

Mrs. MAY. In connection with that, Mr. Greeley, as I understand

it, from previous testimony in previous hearings, you are not issuing

many summer home permits these days.

Mr. GREELEY. That is correct.

Mrs. MAY. And my next question goes to this—excuse me, Mr.

O'Neal. Had you finished?

Mr. O'NEAL. I was going to ask if there were practically none.

You are not awarding any new permits, are you?

Mr. GREELEY. We are not approving new tracts for summer

homes.

Mr. O'NEAL. Under any circumstances?

Mr. GREELEY. Under any circumstances.

Mr. O'NEAL. Instead of a few, it is none?

Mr. GREELEY. Yes.

Mrs. MAY. At our hearings before, you did report that since the

beginning of 1966, 77 summer home permits have been terminated.

That was on page 3 of the report of the June 13 hearings. Actually,

that report also said that for the past 15 years, you have terminated

240 permits over that time; and previous to that time, some 200

permits were terminated, although the actual year or years of termination is not shown in the record.

Mr. GREELEY. Yes, ma'am.

Mrs. MAY. Including recently reported cases and considering

cases consummated, there are now about 725 pernlittees with termination notices. Are those figures still valid?

Mr. GREELEY. That is about correct.

Mrs. MAY. If this bill became law, could you give us an idea of

the availability of alternate summer home sites on public lands?

This is pretty much the question that Mr. O'Neal put to you—at

least, a part of it. About what percentage of those people whose

permits will be terminated in the future could expect to be able to

move their summer homes to new national forest sites, rather than

to move to private sites?

I think if we talked to that question for the record, it would put

the whole thing in proper perspective. We have been trying to get

at that from several different ways.

Mr. GREELEY. May Mr. Florance respond to that for the record?

We have made some commitments to these people, but I really do

not know how many there are. I do not want to talk about it from the

top of my head.

Mrs. MAY. If it is all right with the subcommittee, I'd like to have

that information provided. I think that these are important questions

for the record.

How would the value of the summer home be determined?

I have received a number of letters, and I assume that my colleagues have also with regard to the bill's requirement that if no
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 15

alternate sites are available, the permittee shall be compensated for

the value of "such residence and related structures as determined by

competent appraisal."

What methods and procedures would be used?

What would you consider competent appraisal?

Mr. GREELEY. May I ask Mr. Nelson to answer that?

Mrs. MAY. Yes.

Mr. NELSON. We have very competent appraisers within the

Forest Service. We also use private fee appraisers. We have some 230

Forest Service appraisers who have gone through the institute of real

estate appraisers' schools. In considering a particular appraisal it

would depend upon the particular forest and the competence of the

particular man that we have available on the forest to make the

appraisal—whether he has had the training in all cases. And if he does

not have the training, we would hire an outside fee appraiser competent to obtain the needed information.

Mrs. MAY. Did you not do that, use outside appraisers—as I

recall—in your recent appraisal in the western region?

Mr. NELSON. In the determination of the value of the land, in

setting our fees, where it is based upon the value of the land being

occupied, we contracted for the fee appraisals in a good many of our

cases. Some others were done by our own staff appraisers; I think

that more than one-half of it has been done by outside appraisers.

Mrs. MAY. What you are saying then is that under this legislation

you would follow the same appraisal procedures you have used in

determining the value of the summer-home sites in setting the fees?

Mr. NELSON. Yes; we would.

Mrs. MAY. We ran into a great deal of disagreement about your

appraisals in the hearings, as you well know.

Mr. NELSON. Yes.

Mrs. MAY. What procedures are used if a summer-home permittee

disagrees with the evaluation arrived at through this appraisal method

of the Forest Service? What factors enter into this?

Mr. NELSON. Well, we would try to give the people personal notice

about 18 months prior to the time that we are considering the appraisal

of the land for which the permit was made. Then, after the fees are

determined, based upon the value of the land that they occupy, we

notify the permittee and give him an opportunity to discuss with the

Forest Service people the method used in arriving at the fees. We have

had some objections, as pointed out in the hearings and in other places.

We have had meetings with the national association that represents

a good many of these permittees regarding the method by which the

appraisals were made mid the establishment of the fees. We told

them that we would like to have a meeting where the matters could

all be discussed and laid on the table, so that everyone would have a

full and complete understanding. And, then, if an association or a

group of summer-home permittees still objects to the fees, we would,

in some cases, hire an additional appraiser and make a new appraisal

of the land. We would then also consider the new appraisal in the

overall determinations before a final determination of what the fees

will be, based upon the value of the land. We have tried to work with

the people concerned. '
16 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

If they still object, there is a formal appeals procedure set up in the

Department of Agriculture for an appeal of decisions in connection

with setting the fees.

Mrs. MAY. Mr. Chairman, in the interest of time, I would like to

ask Mr. Nelson if he would supply for the record what his appraisers

consider in the determination of the value process—what factors they

consider?

Mr. NELSON. We will be glad to do that and supply it.

Mrs. MAY. Going to that question on the bill that refers to a community systems or facilities, I think here again, in the interest of time,

I will put the questions into the record and you may respond to them

later on in the record.

Mr. NELSON. We will be glad to do that.

Mrs. MAY. The bill requires:

In determining the compensation to be made to the permittee, due consideration shall be given to the proportionate share of the permittee in any community

systems or facilities constructed and maintained by the permittees in the area.

What community systems or facilities would the Forest Service feel

this phrase includes?

And, too, how would the proportionate share be determined, and

how would the value of the system be arrived at?

Those are two questions including the others that I would like to

have answered for the record.

Mr. McMILLAN. Mr. Hansen?

Mr. HANSEN. I have a few very brief questions I would like to ask.

Do you plan to phase out completely the permittees over a period

of time?

Mr. GREELEY. I think the answer to that is: No, we do not, but I

think it is realistic to recognize that with some 19,000 permits issued

and with out present posture in regard to the forests, with these

19,000 which are in a kind of special state, they will continue to be a

part of the concern. But we visualize that except for these sites for

which there may develop future needs on account of public need,

there will be others that will remain.

Mr. HANSEN. You do transfer permits after the death of an

individual, do you not?

Mr. GREELEY. Yes; we do.

Mr. HANSEN. Then, the 19,000 would continue if you did not

terminate them?

Mr. GREELEY. Yes.

Mr. HANSEN. I notice that in answer to questions of Mr. O'Neal

and Mrs. May, you stated that you have terminated several hundred

in the past few years, and that you have not issued any new permits.

This is why I asked the question if you were planning to phase these

cabins out over a period of time.

Mr. GREELEY. I understand your question, and I think I have

given you the answer to that.

Mr. HANSEN. Do you anticipate any problem in this type of legislation so far as those past determinations are concerned if you start

compensating people now?

Mr. GREELEY. There is always that possibility, Mr. Hansen. I

really do not know how we can answer the question. There might

be some people who would come back to us and ask for consideration.
SUM1VIER HOME PERMITS IN THE NATIONAL FORESTS 17

Mr. HANSEN. I have one further question. This is with regard to

the transfer to or the obtaining of other sites. As I understand it, you

are not laying out any new developments and new places for issuing

permits. Would this legislation make it necessary for you to do so if

such plans materialize or are you going to continue to phase the

permittees out?

Mr. GREELEY. There will probably be some situations where we

will decide that land is available, not needed for a higher use, where

we will approve some new locations for people to move to. We have

done this with some situations, where there have been a number of

terminations, and where there were not enough existing vacant lots

in existing tracts. We will continue to do this, where suitable land is

available and not needed for a foreseeable future higher use.

Mr. HANSEN. Do you think that these 11,000--

Mr. GREELEY. And "forever" is a long time.

Mr. HANSEN. Well, in the foreseeable future.

Mr. GREELEY. I think that the honest answer to that is probably

not.

Mr. HANSEN. Thank you, Mr. Chairman. That is all.

Mr. MCMILLAN. Mrs. May?

Mrs. MAY. Mr. Greeley, during the hearings the Department has

given the legislation an unfavorable report. Do you, yourself, have any

suggestions on how the Forest Service might attempt to correct what

we feel are inequities?

Mr. GREELEY. This morning, I do not.

Mrs. MAY. Thank you. That answers that question. I had to ask it.

Finally—and I really think finally now. Another matter that came

up consistently during the field hearings we held, as you well know,

was this matter of the fee increase. Actually, that imposition of the

fee increase last year, I think, brought this whole problem, that has

been boiling under the surface, to the surface. It triggered our field

hearings, you might say. We have no legislation concerning this

particular matter before us. I do not think that there is any feeling

on the part of any member of the subcommittee that, proper and fair

fees should be required for the use of public lands. However, as you

remember, the fees were raised sharply in just 1 year. The increase

varied from 100 to 200 percent in some cases and we got a very, very

sharp reaction in Congress.

Is there anything that you could say in the way of a statement

to this subcommittee that we could transmit, in turn, to the many

hundreds of people who have written us concerning this? A policy

statement from the Forest Service on future fee increases for the

use of summer-home site?

Mr. GREELEY. May I ask Mr. Nelson to respond to that?

Mr. NELSON. Mrs. May, one of the basic difficulties causing the

sharp increases in fees in the Northwest this year was the fact that

tile Forest Service had not kept pace with the value of the land

being used for summer-home sites. The new fee schedule was based

on the first real sound appraisal that has been made of the value of

the land.

Mrs. MAY. Why was that, Mr. Nelson?

Why was there such a delay? Do you have any reason that we

could have for the record?
18 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

Mr. NELSON. I cannot say for sure. Part of it was due to the fact

that we did not have a corps of competent appraisers. During and

after the war, we got out of the land-buying business. It came to

practically a standstill during the war. It is only in the past few years

that we have gotten back into the lands business completely. Congress

authorized the funds, and we went ahead with land exchanges, with

acquisitious related to the land and water conservation programs,

where funds had been authorized for that purpose, and, consequently,

our land organization has, you might say, gotten back into gear

after having been practically dissolved during the war and the years

following the war. I think that is probably part of the reason.

We did not, ourselves, realize the true value of the land being

occupied, and having gotten back into the land business and also

having had a directive from the Bureau of the Budget regarding the

fees being set at the going market value, we took a very close and

hard look at our fees in all fields, timber appraisals, grazing fees,

and the like. It had also been due in part to the result of our efforts

in getting competent appraisals made of the land. And that is why

it has hit a little harder in some instances than it will in the future.

I think that is really what I am saying.

Mrs. MAY. That is what I wanted you to say.

Mr. NELSON. I do not think that the increasing fee problem will be

anything like it was in the Northwest, in this recent fee adjustment.

We have made a little rundown on this by regions. The California

region got on the valuation problem a little earlier, and their fees

were much more in line. So, any recent fee increases in California

have been relatively minor. There will be increases in fees in relation

to the increased value of the land; however, as a whole, over the

country, we have gone a long way. We have a few placed where there

will be some rather substantial fee increases, probably in the next

2 years, as we make determinations of the value of the land.

Mrs. MAY. Could we ask you, before those increases are announced,

to send us that information, so that we can be braced for the onslaught?

Could you inform the members of the subcommittee about that?

Mr. NELSON. We would be willing to notify any Congressman

in whose district we start to make an appraisal if it is desired, and,

of course, we are always glad to keep this committee informed in any

practical way.

Mrs. MAY. I think that might be very desirable.

Mr. NELSON. We will be very glad to do that.

Mr. GREELEY. Might I add a little to that?

Mrs. MAY. Yes.

Mr. GREELEY. Why did we let it go so long?

I think I will have to acknowledge that we were not doing our

job. That I will have to acknowledge, that we were not staying on

top of what was happening with the land values. The situation had

taken place, in that we had decided to go along without realizing

what was being done.

Mrs. MAY. I appreciate the frankness of that statement.

I also appreciate the difficulties in obtaining appraisal funds.

Now, what we need to do is to get some sort of an assurance or

warning, or both, to the summer-home owners for future years in

connection with this, and if you have any statement on that that we
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 19

can use in response to letters or statements, send it to the members

of our subcommittee. We will appreciate it if you will furnish us with

that information. That is all, Mr. Chairman.

Mr. MCMILLAN. Mr. Hansen?

Mr. HANSEN. Let me go back to something that you have said. I

think that you were a bit overly frank, because in my opinion you

people have been doing an excellent job, and you are doing a good job

now. Was it perhaps a catalyst to better doing your job, receiving that

opinion of the Bureau of the Budget that we have discussed?

Mr. GREELEY. This was a general problem. In some parts of the

country, Mr. Hansen, we have been staying on top of it, but because

of the request that came out from the Budget Bureau plus some legislation that was enacted in 1955 which did not particularly relate to

our work, we were quite slow in catching up; we realize we were not

performing all over the country as we were doing in some regions where

we were staying on top of it.

Mr. HANSEN. You moved ahead then?

Mr. GREELEY. Yes.

Mr. HANSEN. With regard to this legislation that we are discussing

today, would you like to use the Public Land Law Review Commission

as a shield?

Do you think that any of their determinations will have any vital

effect of any sort upon the Forest Service policy as far as permittees

are concerned?

Mr. GREELEY. Well, I think it is possible. I am sure that there

will be some suggestions for improvement that the Commission will

come up with that will be relevant. I really cannot forecast whether

their interest in this subject will be deep enough for them to delve into

it to the extent that they will be delving into some other subjects.

Mr. HANSEN. Knowing the recommendations will probably not be

forthcoming for several years, do you feel that there is enough of a

possibility that they will get into this field, so that we should defer

any great decisions in this area until we have those recommendations?

Mr. GREELEY. It seems to me that we will just have to go ahead

and face the problems as we encounter them.

Mr. HANSEN. So we are back to what you said first. You will not

proceed to hide behind the operation of the Public Land Law Review

Commission, and I commend you for that.

Mr. McMILLAN. Mr. O'Neal?

Mr. O'NEAL. I have one question, Mr. Chairman.

My principal concern, of course—and I think it is the real hard

nut to crack in connection with this whole problem—is the question

of compensation. I need to h*ave this question answered before I can

start thinking about it.

Do I understand correctly that in all cases up to date where you

have terminated permits, you have offered other sites to the

perm ittees ?

Mr. GREELEY. Well, if I gave that impression I gave the wrong

impression. I am sure there are some where we have not offered that.

Mr. O'NEAL. How many, or what percentage have you? Or what is

the situation?

I am trying to see what your present policy is when you do find

it necessary to terminate a permit.
20 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

Mr. GREELEY. Mr. O'Neal, in many cases and perhaps in the majority of the cases, we have not offered alternate sites.

Mr. O'NEAL. You just notify them of the termination date?

Mr. GREELEY. And in some cases—I see that my folks here do not

agree with that statement. I will have to find out more about it. Part

of it is the matter of the condition of the improvement. If it was a real

old building that had relatively small residual value and would be

difficult to move 

Mr. O'NEAL. I am not including termination on the basis of sanitation or lack of complying with your regulations. I am just talking

about where you have a need for the public land for public use.

Mr. GREELEY. Well, perhaps we can come up with some illustrations. I would like to answer you as factually as I can.

Mr. O'NEAL. Yes, sir. I just wondered whether or not you would

have sites to offer, whether they would be as good sites as the permittee had to begin with. But in every case could you offer another

site in the same park?

Mr. GREELEY. There would be cases where we cannot find sites to

offer.

Mr. O'NEAL. In the forest?

Mr. GREELEY. That is right, in the same forest. In some of the

California forests, such as in Stanislaus, this is very much the case.

Mr. O'NEAL. There is nothing available?

Mr. GREELEY. There is not. There is nothing that is available where

roads are constructed.

Mr. O'NEAL. Even if you took a bulldozer and dug it out, cleared

a site, leveled it, or whatnot?

Mr. GREELEY. As a specific example, take, as I have mentioned,

the Stanislaus National Forest. In order for there to be any more

summer homes, there would have to be construction of new highways.

It is not even as simple a matter as going in with a bulldozer. It would

be a matter of doing an extension of the highway system to open up

the country which would be suitable for this type of use. The number

of sites there are relatively scarce. Those that do have road access are

scarce.

Mr. O'NFAL. If you had to do it, it would discourage you from

canceling these permits, would it not?

Mr. GREELEY. If we have to pay it, it would discourage us, too.

Mr. O'NEAL. Yes, sir. But the question of compensation brings on

more questions of fairness to me than the question of offering additional sites even if you have to go to some expense.

Mr. GREELEY. I can follow your thinking there, yes.

Mr. O'NEAL. That is all. Thank you, Mr. Chairman.

Mr. MCMILLAN. If there are no further questions, we thank you

gentlemen for assisting this committee in trying to solve a difficult

problem this morning.

The subcommittee will go into executive session now.

Mr. GREELEY. May I express, for all of us, our appreciation for

the opportunity to be here before the subcommittee this morning.

We thank you.

Mr. McMiLLAN. Thank you again, gentlemen.

We will now proceed into executive session.

(Whereupon, at 11:30 a.m., the subcommittee retired into executive

session and the reporter was excused.) .
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 21

(The following letter was subsequently submitted to the subcommittee by the Deputy Chief of the Forest Service, M. M. Nelson:)

Hon. JOHN L. MCMILLAN,

Chairman, Subcommittee on Forests of the Committee on Agriculture,

House of Representatives.

DEAR MR. CHAIRMAN: During the recent hearings on H.R. 11370 before your

Subcommittee on Forests, we were asked to submit further response to several

questions. The questions and the answers follow:

Question. How would the Forest Service determine the reasonable cost of

moving a permittee whose permit is terminated, or not renewed? What would be

the guidelines?

Answer. The bill would limit compensation for moving costs to the value of

the residence and related structures. The first step would be, through competent

appraisal, to determine the value involved. This would be done by trained Forest

Service appraisers or outside appraisers under contract. This would establish the

ceiling. Using the prudent man approach it appears that the only way to determine moving costs would be for the permittee or the Forest Service to solicit

quotations from reputable moving concerns—probably no less than three. The

low bid would be used in determining the amount of compensation.

A complication could develop in the event the permittee elected to move to a

private lot farther away than the alternative lot on National Forest that had been

made available and at a greater moving cost. In such an event, the Forest Service

would have to limit its moving cost allowance to what it could allow to move to

the National Forest lot.

There are also costs, other than the actual hauling, that would have to be

considered. As seen now, all related costs including the actual hauling, site preparation, proportionate share of common improvements and restoration of the vacant

lot would have to be considered. This total would then be compared with the

value of the residence and related structures to determine the amount of allowable

compensation.

It is presumed in the case of a residence that could not be moved because of

the construction or terrain, and where site availability is not a question and

dismantling is in order, that compensation equal to the appraised value would

be allowed. This problem sometime occurs, and it appears that this would be the

only equitable solution that could be used.

Question. About what percentage of those people whose permits will be terminated in the future could expect to be able to move their summer homes to

new National Forest sites, rather than to move to private sites?

Answer. From the standpoint of outstanding obligations involving alternate

sites existing commitments run to about 9 percent of the number of permits

under some kind of termination notice.

The Forest Service has not had a firm policy providing that alternate sites

would always be made available. We have presumed in the past that alternate

sites, if offered, should be relatively close to the site being vacated, in the same

general environment, and as similar in character as possible. The action taken in

some instances has been simply to move conflicting uses back from a shoreline

so it could be developed for general public use. This was the case specifically at

Pinecrest in the Stanislaus National Forest in California. Within the exterior

boundary of the existing developed area, a location was found with major road

access and water connecti9n possibilities for twelve lots. These were laid out and

made available to permittees who occupied shore front lots. At Lake Alpine on

the same National Forest, eleven permits adjacent to the shoreline are under

termination notice. A second part of the development is about one-half mile

away. The topography is suitable for cabin development and does not conflict

with planned or anticipated public needs in the foreseeable future. Here, eleven

lots have been laid out and are available to the shoreline permittees being moved.

However, since such opportunities are not always present, there has not been

a firm uniform position. It has been learned that each situation must be approached on a case-by-case basis. Final decisions must be based on the total land

use picture considering the requirements of the several competing uses with the

interest of the general public overriding the private interests of recreation residence permittees.

U.S. DEPARTMENT OF AGRICULTURE,

FOREST SERVICE,

Washington, D.C., October 9, 1967.
22 SUMMER HOME PERMITS IN THE NATIONAL FORESTS

More often than not, when a summer home group was planned, all of the

area in that particular location was utilized. It is only in the exceptional case

that suitable locations are still available for additional lots. In a few cases, however, there are unoccupied lots within established groups. While these, of course,

can be used as alternate sites, they might well be some distance from the lot being

recovered. We have not developed new areas to accommodate the permittees

being removed. To answer categorically what percentage could move to other

National Forest sites is not possible at this time. In some areas, such as the

National Forests of Southern California with their tremendous public recreation

pressures, additional sites for recreation residences simply are not available. In

others, such as Lake Alpine, it might be possible to find alternate sites for any one

who might have to be asked to move. Such a spread might be possible on almost

any National Forest and would certainly be true within a single Forest Service

Region. Considering the situation nationally, and due to the unique locations of

many of the tracts where terminations are involved, it is doubtful that as many

as 50 percent of these under notice of limited tenure can expect, under the most

favorable conditions, another lot on National Forest land.

Question. How would the value of the summer home be determined? What do

your appraisers consider in the valuation process?

Answer. The value of a summer home would be determined by estimating the

fair market value of the real property owned by the permittee. The determination

of estimated fair market value would follow the principles and appraisal practices

recognized by the courts in acquisitions of real property by the Federal Government. Fair market value, as defined by the courts, is the highest price estimated

in terms of money which a property will bring if exposed for sale in the open

market, allowing a reasonable time to find a purchaser who buys with knowledge

of all the uses to which it is adapted and for which it is capable of being used as of a

given time. Frequently it is referred to as the price at which a willing seller would

sell and a willing buyer would buy, neither being under abnormal pressure.

In a situation such as this, normally two approaches to value are applicable:

the cost approach and the market data approach. The cost approach involves

determining the replacement cost of a similar structure or one having the same

utility less accrued depreciation. Local construction costs are used. Accrued

depreciation includes physical deterioration or obsolescence or both.

The market data approach involves comparative analysis of the permittee's

real property to recent sales between private parties of similar types of structures.

Recent sales transactions are collected, viewed, analyzed and compared with the

property being appraised. The appraiser considers such factors as the conditions

influencing each sale to insure proper judgment as to sale validity, the location,

the improvements, the economic trends, and other related factors which can

influence the value.

Question. What community systems would the Forest Service feel this phrase

includes? And, too, how would the proportionate share be determined, and how

would the value of the system be arrived at?

Answer. Community improvements would be considered to include such things

as roads, water systems, sewer systems, power and telephone service, fire protection, and similar items when they were constructed through community effort and

assessment and availability of the service was dependent upon payment of a

hookup or use charge made through an association or some similar organization.

Only those improvements essential to the use of a recreation residence would

qualify. Such things as a meeting house, recreation center, school, etc., would

not qualify.

In cases where only part of a participating group would be involved, the allowable proportionate share would be the actual cost to the permittee for the original

construction. Recurring costs of maintenance and operation would not be compensable. However, additional costs for enlargement, restoration, or increase in

standard, if assessed to all residence owners equally, would be considered as

compensable.

If an entire group were involved, the total original cost of a system divided by

the number of permits involved would determine the proportionate share.

Question. What can you see in the future as far as Forest Service policy on

contemplated fee increases for the use of summer homesites is concerned?

Answer. The basic Forest Service objective will be to set, and collect, fees

that represent a fair market value for the private use to which the National Forest

land is being put. This objective has already been met on a large proportion of the

sites involved. There are, however, some areas in which it cannot be positively
SUMMER HOME PERMITS IN THE NATIONAL FORESTS 23

said that such is the case. Here the fees will have to be reviewed and, if adjustments are indicated to be in order to meet the objective, they will have to be made.

These could result in either a decrease or increase in fees. Checks made in recent

years have frequently reflected rapidly increasing values, and some very significant upward fee adjustments were called for. It was several of these situations

which came to the committee's attention during the past few months.

In addition to such "catching up" adjustments as described above, if the values

of private land comparable to the National Forest private recreation residence

sites continue to escalate, the fee for the use of the National Forest will be adjusted

accordingly.

If the Forest Service is to make sure that fees to be charged for permits authorizing National Forest private recreation residences represent a lair market

value for the use to which the land is put, it will be necessary to press ahead with

the regular periodic review of fees that is provided for as a specific stipulation in

all such permits.

In some instances, such reviews will require an adjustment in fees as the result

of changes in the value of comparable private land since the last periodic review

was made. And although significant fee changes will become progressively less

frequent, there will—for some time—continue to be situations in which adjustments will be necessary because existing fees, when set, did not always represent

the true value of the land involved.

When there is a justified adjustment for either reason, it will be accomplished

with the most equitable procedure. To make these necessary adjustments as

acceptable as possible, a uniform system including these steps will be followed:

At least 18 months before a fee adjustment might occur, all permittees that

might be affected will be notified that a review is to be made. They will be

invited to offer any information they might have or develop that will help in

arriving at a fair value for private recreation use of the land involved.

At the same time, interested members of Congress will also be notified of the

pending review.

The lands involved will be carefully appraised as to their value by using

the best and most experienced appraisal skills available. This may be by

professional Forest Service land appraisers, or it may be by professional

appraisers contracted specifically for the job, or it may—and frequently

will—be by a combination of both.

When the appraisals are completed, the Forest Supervisor will make the

results available to the permittees, both in terms of the land values developed

and the fees based upon them. Simultaneously the results will be made known

to user groups and interested members of the Congress. If there is a significant

increase in the annual fee ($75 or more), the permittees will be notified that

the increase will become effective gradually over a period not to exceed 3

years. This notice will be given at least 9 months before the effective date of

the required adjustment.

Sincerely yours,

M. M. NELSON, Deputy Chief.
N