An act entitled the "Federal Timber Contract Payment Modification Act".
PL 98-478 (H.R.2838), enacted 10/16/1984

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PUBLIC LAW 98-478—OCT. 16, 1984 
98 STAT. 2213 
Public Law 98-478 
98th Congress 
An Act 
Entitled the "Federal Timber Contract Payment Modification Act". 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, That this Act may 
be cited as the "Federal Timber Contract Payment Modification 
Act". 
SEC. 2. (a)(1) Notwithstanding any other provisions of law, in order 
to retain jobs, to preserve free competition, to utilize the potential 
productive capacity of plants, to preserve small communities de-
pendent on a single economic sector to assure an open and competi-
tive market for future sales of Government timber, and to lessen the 
impact of unemployment, the Secretary of Agriculture for national 
forest lands and the Secretary of the Interior for public lands under 
their respective jurisdictions are authorized and directed to permit a 
requesting purchaser to return to the Government a volume of the 
purchaser's timber contracts as determined under paragraph (2) 
upon payment of a buy-out charge from such purchaser in an 
amount as determined under paragraph (3). The purchaser shall be 
released from further obligation to cut, remove, and pay for timber 
under such contract upon payment, or arrangement for payment as 
provided under paragraph (3)(E), of such buy-out charge and comple-
tion of any obligation required pursuant to subsection (4)(B). The 
Government does not hereby surrender any other claim against a 
purchaser which arose under a contract prior to effectuation of this 
release and not in connection with this release from obligation to 
cut, harvest and pay for timber. 
(2)(A) To qualify for buy-out under this section, a timber sales 
contract must have been bid prior to January 1,1982, for an original 
contract period of 10 years or less, and be held as of June 1, 1984: 
Provided, That any such contract that was defaulted after Janu-
ary 1, 1981 may qualify for buy-out under this section so long as (i) 
settlement for damages has not been reached between the purchaser 
and the United States; and (ii) the purchaser's loss on all of its 
qualifying timber sales contracts, as determined in section 2(aX3)(A) 
of this Act, is in excess of 50 per centum of the net book worth of the 
purchaser. A contract is qualified for buy-out notwithstanding the 
fact that it was reformed after October 1, 1983, pursuant to Bureau 
of Land Management Instructional Memorandum 83-743 or is in-
cluded in a Forest Service multisale plan pursuant to the Presi-
dent's program of July 28,1983. 
(B) A purchaser holding more than twenty-seven million three 
hundred thousand board feet of net merchantable sawtimber as of 
January 1, 1982, in qualifying contracts as provided in (A) shall be 
entitled to buy out up to 55 per centum of such timber volume up to 
a maximum of two hundred million board feet. 
(C) A purchaser holding twenty-seven million three hundred thou-
sand or less board feet of net merchantable sawtimber as of 
January 1, 1982, in qualifying contracts as provided in (A) shall be 
Oct. 16, 1984 
[H.R. 2838] ' 
Federal Timber 
Contract 
Payment 
Modification 
Act. 
16 use 618 note. 
Forests and 
forest 
products. 
16 use 618. 
98 STAT. 2214 
PUBLIC LAW 98-478—OCT. 16, 1984 
entitled to buy out up to fifteen million board feet of such timber 
volume or one contract, whichever is greater in volume. 
(D) So long as the volume limitation of two hundred million board 
feet is not exceeded, the percentage limitation of paragraph (B) or 
the volume limitation of paragraph (C) may be exceeded by a volume 
amount not to exceed the volume of the smallest volume contract 
bought out by the purchaser if the purchaser could not otherwise 
attain his percentage or volume entitlement. 
(E) Timber returned to the Government pursuant to this subsec-
tion shall be available for resale by the Government upon payment, 
or arrangement for pajrment, of the buy-out charge and completion 
of obligations, if any, under paragraph 4(B). 
(3)(A) Sums collected by the appropriate Secretary in connection 
with the buy-out of contracts pursuant to this subsection shall be 
deposited in and paid from the Treasury in the same manner as 
moneys received from timber sales from such lands and shall be 
determined as follows: The purchaser's loss on any qualifying timber 
sales contracts shall be determined by the Forest Service or the 
Bureau of Land Management by subtracting the current delivered 
log value (as determined by such agency) from the delivered log cost 
based on the current contract return (as determined by such agency) 
of any such contracts. If such loss is— 
(i) in excess of 100 per centum of the net book worth of the 
purchaser, the buy-out cost shall be $10 per one thousand board 
feet of currently held volume bought out; 
(ii) in excess of 50 per centum up to 100 per centum of the net 
book worth of the purchaser, the buy-out cost shall be 10 per 
centum of the contract overbid but at least $10 per one thou-
sand board feet of currently held volume bought out; or 
(iii) up to 50 per centum or less of the net book worth of the 
purchaser, the buy-out cost shall be 15 per centum for the 
purchaser's first one hundred twenty-five million board feet, 20 
per centum for additional board feet above one hundred 
twenty-five million up to one hundred fifty million, 25 per 
centum for additional board feet above one hundred fifty mil-
lion up to one hundred seventy-five million, and 30 per centum 
for additional board feet above one hundred seventy-five million 
up to two hundred million, of the contract overbid but at least 
$10 per one thousand board feet of currently held volume 
bought out. 
(B) For purposes of this paragraph, the term "net book worth" 
does not include the value of any outstanding uncut Federal timber 
sales contracts. 
(C) Net book worth shall be, subject to agency verification, as 
determined by an independent certified public accountant in accord-
ance with generally accepted accounting standards for the timber 
industry. 
(D) A purchaser may elect to pay the buy-out cost imposed 
by paragraph (iii) in lieu of utilizing loss and net book worth 
determinations. 
Loans. 
(E) Where a purchaser is not able to obtain sufficient credit 
elsewhere to finance the buy-out charge at reasonable rates and 
terms, purchaser may, upon payment of 5 per centum of the buy-out 
charge, pay the remainder of the buy-out charge in equal quarterly 
payments over a period not to exceed 5 years at an interest rate 
adjusted with each payment equal to the average market yield of 
outstanding Treasury obligations with remaining years to maturity 
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PUBLIC LAW 98-478—OCT. 16, 1984 
98 STAT. 2215 
of five years payment must be secured by bond, deposited securities 
or other forms of security acceptable to the appropriate Secretary in 
an amount sufficient to cover the entire buy-out payment. 
(F) For purposes of this paragraph, the term "contract overbid" is 
the difference between the advertised contract rate and the rate the 
purchaser bid. 
(4)(A) Contracts returned pursuant to this subsection under which 
no harvest has begun shall be returned in full. 
(B) Contracts returned to the appropriate Secretary pursuant to 
this subsection under which harvest has begun, shall be returned 
conditionally and shall not be considered as part of the outstanding 
volume of timber under contract for the purposes of this Act. The 
return shall become final after the purchaser has completed stages 
of contractual obligations for the units on which the harvest has 
begun, including work on roads, to logical stopping points as deter-
mined by the Secretary after consultation with the purchaser. All 
remaining unharvested units must be returned. 
(C) The appropriate Secretary may reject return of a contract on 
which harvest has begun if he determines, in his discretion, that the 
remaining unharvested portion is substantially unrepresentative of 
the original sale as a whole in terms of species, logging methods, or 
other appropriate criteria, and that accepting the return of such 
contract would seriously disadvantage the Government. 
(5)(A) Timber from returned or defeulted contracts shall be offered 
for resale in an orderly fashion as part of, and not in addition to, the 
normal congressionally authorized timber sales program, and in a 
manner which does not disrupt regional markets or artificially 
depress domestic timber prices. Timber from returned or defaulted 
contracts shall be given preference for resale in the Forest Service 
timber sales programs. 
(B) Timber sales in Forest Service region 6 shall not exceed four 
billion three hundred million board feet of net merchantable saw-
timber in fiscal year 1984. 
(C) Beginning in fiscal year 1985 and continuing through fiscal 
year 1991 or the fiscal year in which timber contract extensions in 
region 6 granted under the President's program of July 28, 1983 (as 
constituted at the date of enactment of this Act), are completed, 
whichever is later, the Secretary of Agriculture shall set, and 
periodically adjust as necessary, the maximum annual timber sale 
volume in region 6. Such maximum sale volume shall be set so as to 
achieve a volume of region 6 net merchantable sawtimber under 
contract at the end of each fiscal year which does not exceed twelve 
billion three hundred million board feet: Provided, however, That 
such maximum annual sale volume shall not exceed five billion two 
hundred million board feet of net merchantable sawtimber. The sale 
of timber within region 6 shall be made in such a manner as not to 
result in discriminatory treatment as between different forests in 
the region. 
(6)(A) The Secretary of the Interior and the Secretary of Agricul-
ture shall publish final rules for the implementation of this subsec-
tion in the Federal Register within ninety days after the date of 
enactment of this Act. 
(B) Such final rules shall require purchasers to submit buy-out 
requests to the appropriate Secretary within ninety days after the 
publication of such rules. 
(7)(A) For purposes only of determining a purchaser's buy-out 
limitation under subsection (2) and net worth in connection with 
Regulations. 
Federal 
Register, 
publication. 
98 STAT. 2216 
PUBLIC LAW 98-478—OCT. 16, 1984 
Report. 
Effective date. 
National Forest 
System. 
Boy Scouts of 
America. 
16 u s e 539f. 
26 u s e 501. 
buy-out cost under subsection (3), concerns which are affiliates as 
defined under paragraph (B) of this subsection shall be treated as a 
single entity. 
(B) Definition of affiliates: Concerns are affiliates of each other 
when either directly or indirectly, one concern controls or has the 
power to control the other, or a third party or parties controls or has 
the power to control both. In determining whether or not affiliation 
exists, consideration shall be given to all appropriate factors, includ-
ing, but not limited to, common ownership, common management, 
and contractual relationships. 
(C) Definition of purchaser: For the purposes of this Act, a pur-
chaser is the holder of a contract to purchase timber from the 
Secretary of Agriculture or the Secretary of the Interior. 
(b)(1) Timber contracts bid prior to January 1, 1982, not bought 
out pursuant to subsection (a) and included in the President's 
program of July 28, 1983, shall not be subject to any further 
extension of time for performance except as permitted under the 
President's program of July 28, 1983, as implemented by the Secre-
tary of Agriculture and the Secretary of the Interior, providing for 
the extension of certain timber sale contracts and requiring the 
phased harvesting of such extended contracts, which program is 
hereby ratified except as modified by paragraph (2). 
(2) Notwithstanding any other provision of law, timber contracts 
extended pursuant to the President's program of July 28, 1983, as 
implemented by the Secretary of Agriculture shall not be subject to 
inclusion of additional provisions for calculating damages for 
default. 
(c) The Secretary of Agriculture and the Secretary of the Interior 
shall monitor bidding patterns on timber sale contracts and take 
action to discourage bidding at such a rate as would indicate that 
the bidder, if awarded the contract, would be unable to perform the 
obligations as required, or that the bid is otherwise for the purpose 
of speculation. Each Secretary shall include in the annual report to 
Congress 
information 
concerning 
actions 
taken 
under 
this 
paragraph. 
(d) Effective January 1,1985, in any contract for the sale of timber 
from the National Forests, the Secretary of Agriculture shall 
require a cash down-payment at the time the contract is executed 
and periodic paymente to be made over the remaining period of the 
contract. 
SEC. 3. (a) Notwithstanding any other provision of law, the Secre-
tary of Agriculture is directed to waive annually without charge all 
or a portion of payment or rental fees required under terms of a 
permit for use of certain lands of the National Forest System as 
organization camps by local units of the Boy Scouts of America or 
such other nonprofit organization when such local units of the Boy 
Scouts of America or such nonprofit organization are willing to 
perform services, as the Secretary prescribes and determines will 
yield a valuable benefit to the public and to the program of the 
Secretary of such lands. If the Secretary determines that a local unit 
of the Boy Scouts of America or such other nonprofit organization 
has not fully performed such services, such organization shall not be 
entitled in the subsequent year to waiver under the provisions of 
this section. 
(b) The term "other nonprofit organization" shall mean (1) a 
nonprofit organization holding an exemption under section 501(c) of 
the Internal Revenue Code, as amended; and (2) a nonprofit associa-
v/ 
PUBLIC LAW 98-478—OCT. 16, 1984 
98 STAT. 2217 
tion or nonprofit corporation, which is not controlled or owned by 
profitmaking corporations or business enterprises, and which is 
engaged in public or semipublic activity to further public health, 
safety, or welfare. 
SEC. 4. (a) Emergency stumpage rate redetermination shall be 
Alaska. 
made upon the written application of the purchaser of National 
1
6 use 619. 
Forest timber in Alaska, bid after January 1, 1974, and rates 
established as a result thereof shall be effective for timber scaled 
during a period between January 1, 1981, and five years from the 
effective date of this legislation. 
(b) In making the emergency rate redeterminations the Secretary 
may modify existing contract terms, including the amount of the bid 
premium, in order to provide rates which will permit the holders of 
contracts bid after January 1, 1974, to be competitive with other 
purchasers of National Forest timber. 
(c) The provisions of this section shall not apply to contracts held 
by the holders of 50-year timber sale contracts in Alaska. 
Approved October 16, 1984. 
LEGISLATIVE HISTORY—H.R. 2838: 
HOUSE REPORTS: No. 98-255, Pt. 1 (Comm. on Interior and Insular Affairs) and Pt. 2 
(Comm. on Agriculture). 
SENATE REPORT No. 98-596 (Comm. on Energy and Natural Resources). 
CONGRESSIONAL RECORD: 
Vol. 129 (1983): Nov. 16, considered and passed House. 
Vol. 130 (1984): Sept. 26, considered and passed Senate, amended. 
Oct. 1, House concurred in Senate amendments. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 20, No. 42 (1984): 
Oct. 16, Presidential statement. 
31-194 - 0 
86 - 34 : 
QL. 3 Part 2