The Forest Service and BLM manage timber programs on federal lands in the Pacific Northwest states of Washington and Oregon. These federal timberlands are often adjacent to state timberlands and share certain characteristics, such as prevailing climate, terrain, and species of trees. The Forest Service’s Pacific Northwest Region includes 19 national forests in Washington and Oregon; BLM’s timberlands are primarily in western Oregon. State timberlands are administered by the Washington Department of Natural Resources and the Oregon Department of Forestry. Table 1 shows the acres of timberland managed by the federal and state agencies, in addition to those owned by the private sector. Although the federal agencies manage four times as much timberland acreage as the two states, for the past several years the states have sold about the same amount of timber as the federal agencies. Because of lawsuits and the resulting injunctions on federal timber sales and of increased efforts to balance multiple resource uses, the Forest Service and BLM had fewer timber sales than in the late 1980s. Beginning in the early 1990s, lawsuits and subsequent court injunctions to protect the habitat of the northern spotted owl and to preserve the remaining old-growth forests halted most timber sales on federal lands in the Pacific Northwest. To break this impasse, the President convened an interagency team tasked with developing land management alternatives for the federal lands within the current range of the northern spotted owl. According to the guiding principles of the interagency team, the alternatives developed should both attain the greatest economic and social contributions from the forests and meet the requirements of the applicable laws and regulations. While the resulting “Pacific Northwest Forest Plan” was accepted by the federal courts and the injunctions were lifted in 1994, additional challenges to the plan have since emerged. The volumes of timber sold in fiscal years 1993 through 1995 for the four agencies are shown in table 2. Federal and state timber programs differ in their legislative and regulatory guidance, in the types of timberlands managed, and in their sources of funding. Both the Forest Service and BLM generally manage their lands under laws that emphasize multiple resource uses, such as timber, fish and wildlife, and recreation. Washington’s and Oregon’s legislation emphasizes timber production in order to maximize revenues over the long term to benefit the schools and counties within the states. State lands generally have second-growth forests, whereas federal timberlands contain a mixture of second-growth and old-growth forests with portions set aside for wilderness and roadless areas. Unlike in the states’ timber programs, no clear linkage exists between the receipts of federal timber sales and the sources of funding for those sales, thus removing an important incentive to increase receipts and decrease costs. Although Washington and Oregon manage their timberlands to provide multiple resources, the states’ legislation emphasizes timber production to maximize revenues over the long-term for the schools and counties. The beneficiaries of the timber revenues are determined by the way in which the state acquired the land. “Common school lands”—those federal lands granted to the states when they achieved statehood—were intended as a source of revenue to support the states’ schools and colleges. “Forest board lands”—those generally private lands harvested in the early 1900s and later transferred to the states when the private landowners could not pay the property taxes—were intended to generate revenues for the counties within which they are located. Because the schools and counties receive up to 75 percent of all gross timber receipts from state lands, they have pressured the states to increase timber harvests and thereby increase their revenues. The Multiple-Use, Sustained Yield Act of 1960 (16 U.S.C. 528-531) requires that the national forests be managed on a multiple-use, sustained-yield basis. The Forest Service’s regulations require that these lands be managed to produce the greatest “net public benefit.” Subsequent legislation required the Forest Service to develop detailed management plans for the national forests; regulate timber harvests to ensure the protection of other resources; and allow the public to participate in the development, review, and revision of the forest plans. Although the laws, regulations, and guidelines provide a framework for the federal timber sale and management processes, many Forest Service officials believe that this framework provides little guidance on how to balance the forests’ competing uses or to ensure their sustainability. Moreover, Forest Service officials believe that the agency’s decision-making process has become increasingly difficult because of the need to consider other statutory requirements, such as the Endangered Species Act. BLM manages its lands under the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq. ), which establishes that BLM should manage its lands on a multiple use basis. However, the exception to the statutory requirements that both the Forest Service and BLM manage federal timberlands on a multiple use basis affects 2.6 million acres of Oregon and California Railroad (O&C) lands in western Oregon that BLM and the Forest Service manage. The relevant legislation—the Oregon and California Sustained Yield Act of 1937 (43 U.S.C. 1181a et seq. )—provides a more narrow focus to emphasize timber production with a sustained yield for such purposes as providing a permanent source of timber supply and contributing to the economic stability of local communities and industries. Even when the legislation clearly directs the agencies to manage these lands with an emphasis on timber, other statutory requirements—such as the Endangered Species Act —may still affect timber production. For example, although the United States Court of Appeals for the Ninth Circuit confirmed the O&C act’s dominant use as timber in 1990, the timber harvests on those lands have continued to fall since that decision. During the period from 1983 through 1990, the annual timber harvests from BLM’s O&C lands averaged more than 1.1 billion board feet per year. With the listing of the northern spotted owl and two injunctions ordered by the U.S. District Court in Oregon, the timber harvests had fallen to less than 100 million board feet in fiscal year 1995, or less than 10 percent of the harvests in the earlier period. In addition, it does not appear that the former harvest level will be achieved again since, under the Pacific Northwest Forest Plan, all of BLM’s and the Forest Service’s lands were treated as one unit and areas were set aside for specific land uses—such as timber production, ecosystem preservation, and aquatic conservation—thereby reducing the lands available for timber production. Another difference in legislative and regulatory guidance between the federal and state agencies is timber sale goals or targets. The federal agencies often have national timber sale targets that clearly express congressional expectations as to how much timber the federal agencies are expected to offer for sale in any year or period of years. Furthermore, according to both Forest Service and BLM officials, federal policy has been to offer timber on an even-flow basis to help provide a stable supply of timber. On the other hand, the states do not have annual timber sale targets. According to state officials, the absence of such annual targets allows them to offer timber sales so as to take advantage of changes in timber prices. They increase timber sales when prices rise and reduce the number of sales when prices fall so as to maximize long-term revenues. Despite the appearance of similarities—such as geographic location, species of trees, and growing conditions—several basic differences between federal and state timberlands affect the timber programs on these lands. For example, state lands, for the most part, do not contain old-growth forests because they have already been harvested. Rather, they generally have second-growth forests with existing road systems, and relatively few areas have been withdrawn from timber use. On the other hand, federal lands include both old-growth and second-growth forests, roadless and wilderness areas, and other areas set aside for other uses, such as recreation. Because most of the remaining old-growth forests in the Pacific Northwest are on federal lands and because these lands provide habitat for threatened and endangered species, the federal agencies must take additional steps to protect these remaining old-growth forest areas. The timber programs on Washington’s and Oregon’s timberlands are funded by a legislatively specified percentage of gross timber sale receipts—generally from 25 to 36 percent. Although the states are restricted to a preset percentage of total receipts, they have the same major cost categories as the federal agencies, including long-term and timber sale planning, sales preparation, contract and harvest administration, reforestation, and subsequent timber stand management activities, such as fertilization and thinning. Neither Washington nor Oregon receives any additional funding or supplemental appropriations to cover the expenses of managing the states’ timberlands. According to state officials, this funding approach encourages them to actively market timber to increase revenues and to reduce timber-related expenditures to control costs. Unlike the states, the federal agencies are not required to cover the costs of their timber sale programs with the associated receipts. To cover their timber program costs, federal agencies rely primarily on annual appropriations. Because no clear linkage exists between the receipts from timber sales and the funding associated with the programs, there is little incentive to control costs or increase revenues. In addition, the performance measures for the federal agencies are based on the volumes of timber offered for sale, not the actual amounts sold. The underlying differences in the legislative and regulatory guidance, types of timberlands, and sources of funding are reflected in the agencies’ planning processes. While the states have developed shorter planning processes that satisfy their legal requirements and get the job done quickly, the federal planning processes are more lengthy and expensive. In order to comply with other federal statutory requirements—such as the National Environmental Policy Act or the Endangered Species Act—the federal agencies spend considerably more time and resources on both long- and short-term planning. Still, their decisions are challenged more frequently than those made by the states. The states’ long- and short-term planning processes take less time than the federal processes.