Sale and Disposal of National Forest System Timber; Timber Sale Contracts; Purchaser Elects Government Road Construction, 522-523 [06-35]

Agencies

• DEPARTMENT OF AGRICULTURE
• Forest Service

[Federal Register Volume 71, Number 2 (Wednesday, January 4, 2006)]
[Rules and Regulations]
[Pages 522-523]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-35]



[[Page 521]]

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Part IV





Department of Agriculture





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Forest Service



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36 CFR Part 223



Sale and Disposal of National Forest System Timber; Timber Sale 
Contracts; Purchaser Elects Government Road Construction; Free Use to 
Individuals; Delegation of Authority; Final Rule and Interim Final Rule

Federal Register / Vol. 71, No. 2 / Wednesday, January 4, 2006 / 
Rules and Regulations

[[Page 522]]


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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 223

RIN 0596-AC40


Sale and Disposal of National Forest System Timber; Timber Sale 
Contracts; Purchaser Elects Government Road Construction

AGENCY: Forest Service, USDA.

ACTION: Direct Final rule.

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SUMMARY: This direct final rule raises the total specified road 
construction cost threshold for a small business concern road election 
from $20,000 to $50,000. Congress raised the limit to $50,000 via the 
Supplemental Appropriations Act for Fiscal Year 1999 (Pub. L. 105-277; 
Sec. 329(c)). The Supplemental Appropriations Act also eliminated the 
restriction, which precluded small business concerns in the State of 
Alaska from exercising the road election option. The Forest Service 
implemented this change upon passage of the law, and corrected agency 
handbook direction, but the CFR references to these minimum values were 
not changed. This direct final rule corrects this policy oversight. 
Obsolete references to purchaser credit are also being eliminated.

DATES: This direct final rule is effective March 6, 2006.

FOR FURTHER INFORMATION CONTACT: Lathrop Smith, Forest Management 
Staff, at (202) 205-0858, or Richard Fitzgerald, Forest Management 
Staff, (202) 205-1753.

SUPPLEMENTARY INFORMATION:

Background

    One of the components a timber sale may include is the construction 
of new specified roads in order to access areas where timber will be 
removed. Road construction can be a significant cost to a small 
business timber purchaser. The National Forest Management Act of 1976 
(Pub. L. 94-588) section 14(i) allowed small business concerns to elect 
to have the Forest Service construct specified roads for a timber sale. 
The agency promulgated regulations in 36 CFR part 223. 36 CFR 223.84 
allows for small business concerns to elect to have the Forest Service 
contract for the construction of new specified roads. 36 CFR 223.41 
requires that if a small business concern does elect to have the Forest 
Service contract for the road construction, the small business must 
reimburse the government for the estimated costs of construction 
through higher stumpage payments. 36 CFR 223.82 requires that the 
Forest Service include notice of this option in the contents of 
advertisements and bid forms for timber sales. A small business concern 
can only elect to have the Forest Service build the roads if the 
specified road construction was valued at $20,000 or more. 36 CFR 
223.41 and 36 CFR 223.82 both included this $20,000 value. On October 
21, 1998, the Supplemental Appropriations Act for Fiscal year 1999 
(Pub. L. 105-277) became law. Section 329(c) included an increase in 
the value of the specified road construction to $50,000 or more before 
a small business concern could elect to have the Forest Service 
contract for construction of specified roads. It also eliminated an 
earlier restriction that precluded small business concerns in the State 
of Alaska from the specified road election. This final rule updates 36 
CFR 223.41 and 36 CFR 223.82 to include the higher value established by 
Congress, and eliminates references to the State of Alaska and 
purchaser credit.
    The Supplemental Appropriations Act for Fiscal year 1999 (Pub. L. 
105-277) also directed the Forest Service to eliminate purchaser credit 
procedures by April 1, 1999. The use of purchaser credit for appraised 
value determination and the use of purchaser credit in timber sale 
contracts were discontinued as of April 1, 1999. This was accomplished 
by making changes in Forest Service manual and handbook procedures and 
eliminating purchaser credit references on all timber sale contracts 
after that date. Purchaser credit on sales existing at that time 
remained which means there are still active sales that have purchaser 
credit. References that are being eliminated do not affect those sales 
or the use of existing purchaser credit.

Regulatory Certifications

Regulatory Impact

    This rule has been reviewed under USDA procedures and Executive 
Order 12866 on Regulatory Planning and Review. The Office of Management 
and Budget (OMB) has determined that this rule is not a significant 
regulatory action and is not subject to OMB review. This rule will not 
have an annual effect of $100 million or more on the economy. 
Implementation of procedures to change how roads are constructed or 
financed was accomplished on April 1, 1999. Revision of the regulations 
to be consistent with this change will not affect the economy, a sector 
of the economy, productivity, competition, jobs, or State or local 
governments. This rule will not interfere with an action taken or 
planned by another agency, but may raise new legal or policy issues; 
however, these legal and policy issues are not likely to be 
significant. Financial relationships between the Government and timber 
sale purchasers will not be changed by this rule and benefits from 
timber sales harvests to State and local governments will not change. 
Little or no effect on the national economy will result from this rule. 
This action consists of technical, administrative changes to 
regulations affecting how permanent timber sale roads are constructed 
and financed. Finally, this action will not alter the budgetary impact 
of entitlements, grants, user fees, or loan programs or the rights and 
obligations of recipients of such programs. Accordingly, this rule is 
not subject to OMB review under Executive Order 12866.

Regulatory Flexibility Act

    This rule has been considered in light of the Regulatory 
Flexibility Act (5 U.S.C. 601, et seq.), and it is hereby certified 
that this action will not have a significant economic impact on a 
substantial number of small entities as defined by that act. Current 
procedures, implemented April 1, 1999, require that both small and 
large businesses finance permanent road construction prior to the 
harvest of timber. They recover these expenditures as the timber is 
harvested by paying less for the timber. The rule makes only technical 
changes to be consistent with the prohibitions in the act. To the 
extent that the rule imposes additional financial requirements on small 
entities, these requirements are minimal when compared to the total 
financing that is necessary to successfully complete a timber sale. The 
requirements are within the capability of nearly all small entities to 
meet.

Unfunded Mandates Reform

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), which the President signed into law on March 22, 
1995, the Department has assessed the effects of this rule on State, 
local, and tribal governments and the private sector. This rule does 
not compel the expenditure of $100 million or more by any State, local, 
or tribal governments or anyone in the private sector. Therefore, a 
statement under section 202 of the act is not required.

Environmental Impact

    This rule deals with how timber sale contract roads are financed 
and, as such, has no direct effect on the amount, location, or manner 
of timber sale road

[[Page 523]]

construction. Section 31.1b of Forest Service Handbook 1909.15 (57 FR 
43180; September 18, 1992) excludes from documentation in an 
environmental assessment or impact statement ``rules, regulations, or 
policies to establish Service-wide administrative procedures, program 
processes, or instructions.'' The agency's assessment is that this rule 
falls within this category of actions and that no extraordinary 
circumstances exist which would require preparation of an environmental 
assessment or environmental impact statement.

No Takings Implications

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12630. It has been determined 
that the rule does not pose the risk of a taking of private property. 
There are no private property rights to be affected, because no changes 
in contract provisions are necessary to implement this rule and, in any 
case, new contract provisions would be used only prospectively in new 
contracts.

Civil Justice Reform Act

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. If this rule were adopted, (1) all State and local laws 
and regulations that are in conflict with this rule or which would 
impede its full implementation would be preempted; (2) no retroactive 
effect may be given to this rule; and (3) it does not require 
administrative proceedings before parties may file suit in court 
challenging its provisions.

Controlling Paperwork Burdens on the Public

    This rule does not contain any recordkeeping or reporting 
requirements or other information collection requirements as defined in 
5 CFR part 1320 and, therefore, imposes no paperwork burden on the 
public. Accordingly, the review provisions of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501, et seq.) and implementing regulations at 5 
CFR part 1320 do not apply.

List of Subjects in 36 CFR Part 223

    Administrative practice and procedure, Exports, Forests and forest 
products, Government contracts, National forests, Public lands, 
Reporting and recordkeeping.

0
For the reasons set forth in the preamble, Part 223 of Title 36 of the 
Code of Federal Regulations is amended as follows:

PART 223--SALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER

0
1. The Authority citation for Part 223 continues to read as follows:

    Authority: 90 Stat. 2958, 16 U.S.C. 472a; 98 Stat. 2213; 16 
U.S.C. 618, 104 Stat. 714-726, 16 U.S.C. 620-620j, unless otherwise 
noted.

Subpart B--Timber Sale Contracts

0
2. Revise Sec.  223.41 to read as follows:


Sec.  223.41  Payment when purchaser elects government road 
construction.

    Each contract having a provision for construction of specified 
roads with total estimated construction costs of $50,000 or more will 
include a provision to ensure that if the purchaser elects Government 
road construction, the purchaser shall pay, in addition to the price 
paid for the timber or other forest products, an amount equal to the 
estimated cost of the roads.

0
3. Amend Sec.  223.63 to read as follows:


Sec.  223.63  Advertised rates.

    Timber shall be advertised for sale at its appraised value. The 
road construction cost used to develop appraised value means the total 
estimated cost of constructing all permanent roads specified in the 
timber sale contract, estimated as if construction is to be 
accomplished by the timber purchaser. The advertised rates shall be not 
less than minimum stumpage rates, except that sales of insect-infested, 
diseased, dead, or distressed timber may be sold at less than minimum 
rates when harvest of such timber is necessary to protect or improve 
the forest or prevent waste of usable wood fiber.

0
4. Revise Sec.  223.82(b) introductory text to read as follows:


Sec.  223.82  Contents of advertisement.

* * * * *
    (b) For each timber sale which includes specified road construction 
with a total estimated value of $50,000 or more, the advertisement 
shall also include:
* * * * *

0
5. Amend Sec.  223.83 by revising paragraphs (a)(16) and (a)(17) to 
read as follows:


Sec.  223.83  Contents of prospectus.

    (a) * * *
    (16) The estimated road construction cost for each sale described 
in Sec.  223.82(b) and the estimated public works construction cost.
    (17) For deficit sales:
    (i) An estimate of the difference between fair market value and 
advertised value, that is, the amount by which the advertised value 
exceeds the appraised value.
    (ii) The amount of Forest Service funds or materials to be used to 
offset the deficit.
* * * * *

0
6. Amend Sec.  223.84 by revising the section heading to read as 
follows:


Sec.  223.84  Small business bid form provisions on sales with 
specified road construction.

* * * * *

    Dated: December 28, 2005.
Mark Rey,
Under Secretary, Natural Resources and Environment.
[FR Doc. 06-35 Filed 1-3-06; 8:45 am]
BILLING CODE 3410-11-P