Procedures for Appraising Recreation Residence Lots and for Managing Recreation Residence Uses Pursuant to the Cabin User Fee Fairness Act, 16622-16657 [06-2889]

Agencies

• DEPARTMENT OF AGRICULTURE
• Forest Service

[Federal Register Volume 71, Number 63 (Monday, April 3, 2006)]
[Rules and Regulations]
[Pages 16622-16657]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2889]


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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 251

RIN 0596-AB83


Procedures for Appraising Recreation Residence Lots and for 
Managing Recreation Residence Uses Pursuant to the Cabin User Fee 
Fairness Act

AGENCY: Forest Service, USDA.

ACTION: Issuance of final directives.

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SUMMARY: The Cabin User Fee Fairness Act of 2000 directs the Forest 
Service to promulgate regulations and adopt policies for carrying out 
provisions of the act. Accordingly, the Forest Service is adopting 
final directives issued in the Forest Service Manual (FSM) Title 2300, 
Recreation, Wilderness, and Related Resource Management; FSM Title 
2700, Special Uses Management; Forest Service Handbook (FSH) 2709.11, 
Special Uses Handbook; and FSH 5409.12, Appraisal Handbook. These final 
directives, and revised special uses regulations published elsewhere in 
this part of today's Federal Register, set out requirements and provide 
direction to agency personnel for managing recreation residence uses 
and assessing fees for those uses of National Forest System lands 
pursuant to the act.

DATES: These directives are effective May 3, 2006.

ADDRESSES: The documents used in developing these directives are 
available for inspection and copying at the office of the Director, 
Lands Staff, Forest Service, USDA, 4th Floor South, Sidney R. Yates 
Federal Building, 1400 Independence Ave., SW., Washington, DC, during 
regular business hours (8:30 a.m. to 4 p.m.), Monday through Friday, 
except holidays. Those wishing to inspect these documents are 
encouraged to call ahead (202) 205-1248 to facilitate access to the 
building.
    Other documents not in the decision-making record that were 
requested during the comment period on the proposed directives are 
beyond the scope of this direction making process conducted pursuant to 
5 U.S.C. 553(c). Those interested in obtaining these documents may 
request them under the Freedom of Information Act by writing to the 
USDA Forest Service, Freedom of Information Act/Privacy Act Branch, 
Office of Regulatory and Management Services, 1400 Independence Ave., 
SW., Mail Stop 1143, Washington, DC 20250-1143.

FOR FURTHER INFORMATION CONTACT: Julett Denton, Lands Staff, (202) 205-
1256.

SUPPLEMENTARY INFORMATION:

Table of Contents

1. Background
2. Purely Technical, Nonsubstantive Revisions
3. Public Comments on Proposed Revisions to Recreation Residence 
Directives
    Forest Service Manual
     Chapter 2340--Privately Provided Recreation 
Opportunities
     Chapter 2720--Special Uses Administration
    Forest Service Handbook 2709.11--Special Uses
     Chapter 30--Fee Determination
    Forest Service Handbook 5409.12--Appraisal Handbook
     Chapter 60--Appraisal Contracting
4. Regulatory Certifications
    Environmental Impact
    Regulatory Impact
    No Takings Implications
    Civil Justice Reform
    Unfunded Mandates
    Federalism and Consultation and Coordination With Indian Tribal 
Governments
    Energy Effects
    Controlling Paperwork Burdens on the Public
5. Text of the Final Directive
6. Table I--Section-by-Section Comparison Between the Proposed and 
Final Recreation Residence Directives

1. Background

    A discussion of the history and development of direction and 
regulations for the administration of recreation residences is found in 
the final rule to Title 36, Code of Federal Regulations, part 251, 
subpart B, published elsewhere in this part of today's Federal 
Register.
    Most of the changes required by the Cabin User Fee Fairness Act of 
2000 (CUFFA) affect direction for administering recreation residences 
contained in the Forest Service Manual (FSM) and Forest Service 
Handbook (FSH) directives. Accordingly, the changes to recreation 
residence management identified in CUFFA will be implemented through 
revisions to the FSM and FSH pursuant to CUFFA. Table I at the end of 
this notice has been prepared as an aid to understanding the directive 
changes being adopted. Table I displays the recreation residence 
directive provision, its reference to the appropriate section of CUFFA, 
and a section-by-section comparison of the proposed and final 
direction.

2. Purely Technical, Nonsubstantive Revisions

    All references to enactment of CUFFA as having occurred on October 
12, 2000 have been revised to reflect that CUFFA was actually enacted 
on October 11, 2000. In addition, Forest Service Manual 2347.12, 
governing caretaker cabin user fees, has been revised for clarity and 
for purposes of using the terminology in the corresponding provisions 
in CUFFA.

3. Public Comments and Responses To Proposed Revisions To Recreation 
Residence Directives

    A discussion on the general nature of comments and a response to 
comments on the proposed rule are found in a final rule published 
elsewhere in this part of today's Federal Register.

Forest Service Manual

Chapter 2340--Privately Provided Recreation Opportunities
    2340.05--Definitions. This section included a definition of a 
``caretaker cabin'' and reference that a cabin needed to be occupying a 
lot within a recreation residence tract.
    Comment. Many respondents commented that limiting the use of cabins 
to only those situated on a lot within a recreation residence tract is 
inconsistent with CUFFA.
    Response. The Forest Service agrees with these comments. The final 
direction includes a revised definition for a caretaker cabin. The 
revised definition is more reflective of the definition of a caretaker 
cabin that appears in CUFFA and does not necessarily require that the 
location of a caretaker cabin be situated within a recreation residence 
tract. In making this revision, however, the Forest Service is not 
implying that it will consider authorizing the construction of new 
cabins outside of existing recreation residence tracts for the purpose 
of creating a caretaker cabin use. However, the revised definition will 
provide the authorized forest officer with the option to authorize an 
existing privately-owned cabin on National Forest System (NFS) land to 
be used for caretaker cabin purposes in those rare circumstances where 
a privately-owned cabin may already exist outside of a designated 
recreation residence tract. Examples might be existing privately-owned 
cabins currently authorized by the Forest Service for use as an 
isolated cabin, a residence, or as part of a larger use and occupancy 
of NFS land, such as in conjunction with a grazing allotment or for 
mining purposes.

[[Page 16623]]

    The Forest Service also discovered a technical error in this 
section of the proposed direction. The coding should have been 2340.5, 
not 2340.05. The final direction includes this correction.
    2347.1--Recreation Residences. This section provided direction that 
the Forest Service would, to the maximum extent practical, manage the 
recreation residence program to preserve the opportunity for individual 
and family-oriented recreation.
    There were no substantive comments received on this section. 
However, in the final directive, paragraph 7 has been added to address 
the concerns expressed by many respondents that community- or 
association-owned improvements should not be authorized to an 
individual under the recreation residence term permit, but rather, 
should be authorized under separate permit and authority to the 
association or entity representing the recreation residence owners.
    2347.12--Caretaker Cabins. This section provided direction 
concerning the manner in which a caretaker cabin may be owned and 
authorized, the considerations that the authorized officer should take 
into account when determining whether to authorize caretaker cabin use, 
and the annual fee to be charged for caretaker cabin uses.
    Comment. Many respondents commented that it was unclear as to how 
the proposed direction concerning caretaker cabin uses was different 
from current agency direction. Respondents suggested that the Federal 
Register notice should have included a discussion of those differences. 
These respondents also suggested that the proposed direction requiring 
that a caretaker cabin be authorized with an annual permit, Form FS-
2700-4, as opposed to a term special use permit for a recreation 
residence, Form FS-2700-5a, is discriminating against caretaker cabin 
uses.
    Response. The Forest Service agrees that there was no discussion in 
the preamble to the May 13, 2003, Federal Register notice (68 FR 25751) 
of the differences between the existing and proposed policy on 
caretaker cabins. However, the proposed direction included a table 
(Table I) which provided a section by section comparison between the 
current recreation residence direction and the proposed revision.
    The proposed revision to Forest Service Manual (FSM) 2347.12a, 
which included language directing the use of an annual permit (Form FS-
2700-4) to authorize a caretaker cabin, was not a proposed change from 
current agency direction for authorizing caretaker cabin uses. A 
caretaker cabin, by its nature can be, and often is, used as a year 
round, primary residence to fulfill its purpose of maintaining the 
security of a tract. As such, the authorized use is significantly 
different than a recreation residence use. Likewise, if a caretaker 
cabin use is authorized for a cabin situated outside of a recreation 
residence tract, as will be provided with the previously referenced 
revision to the definition of a caretaker cabin, then not only the use, 
but the location of the cabin would be inconsistent with the agency's 
direction that a recreation residence use be located within a 
recreation residence tract. In addition, the primary purpose of use and 
occupancy of a caretaker cabin is sufficiently different from that of a 
recreation residence use, and it should be authorized with the type of 
special use authorization appropriate for that special use. Therefore, 
the final directive will remain unchanged with respect to the type of 
special use authorization used to authorize the use of a cabin as a 
caretaker cabin.
    The proposed direction under Sec.  2347.12b includes the language 
which was intended to be reflective of section 607(b) of CUFFA, which 
directs that the fee for a caretaker cabin special use shall not exceed 
the fee charged for the authorized use of a similar typical lot in the 
tract. The final language in this part of the direction has been 
slightly revised to accommodate those situations where a caretaker 
cabin may not be located within a recreation residence tract. The 
revised language in the final direction provides direction for 
assessing an annual fee for a caretaker cabin that may be located 
neither on a recreation residence tract, nor on a recreation residence 
lot, by directing that the fee will be equal to a typical lot within 
the tract for which caretaker cabin services are being provided, that 
is most representative of the NFS land upon which the caretaker cabin 
is located.
Chapter 2720--Special Uses Administration
    There were no substantive comments received on this chapter of the 
Forest Service Manual. No revisions have been made in the final 
directive.

Forest Service Handbook 2709.11--Special Uses Handbook

Chapter 30--Fee Determination
    33.05--Definitions. This section included new definitions for terms 
used in CUFFA.
    Comment. Numerous respondents suggested that the definitions of 
terms in the agency's directives mirror exactly the definitions of 
those terms as provided in CUFFA. Others suggested that the term 
``market value'' should not be included in the final directive because 
it is a term of art which appraisers understand and that including the 
words ``giving due consideration to all available economic uses of the 
property at the time of the appraisal'' in the definition of market 
value was inconsistent with the provisions of CUFFA, is in conflict 
with the provisions defining Highest and Best Use in the appraisal 
specifications, and should be deleted.
    Response. The Forest Service has reviewed the definition of all the 
terms included in the proposed directive revisions and has compared 
them to the corresponding definitions and the intent of CUFFA. A 
response to each definition is as follows:
    Cabin. The definition has been revised to mirror the definition for 
a cabin as provided in section 604(4) of CUFFA.
    Market Value. The term ``market value'' is not defined in CUFFA. 
However, the Forest Service believes that a definition for market value 
is necessary in agency direction. Section 605 of CUFFA directs the 
Forest Service, through the Secretary of Agriculture, to ensure, to the 
maximum extent practicable, that the basis and procedure for 
calculating cabin user fees results in a fee that reflects ``(1) the 
market value of the lot; and (2) regional and local economic 
influences.'' With this statutory mandate, the Forest Service believes 
that there is a need to clearly define the term ``market value,'' 
lacking any clear definition in CUFFA. The agency believes it would be 
remiss to simply rely on an assumption that market value is a term of 
art, which every appraiser understands and can articulate and apply 
consistently. Several definitions of market value have been utilized in 
appraisal publications and educational materials over time. The Forest 
Service believes it is important for all appraisers to utilize a 
current, common definition. Though other definitions may apply to 
transactions performed under other legal authorities, CUFFA directs 
that appraisals prepared under authority of the act be prepared in 
compliance with the Uniform Standards of Professional Appraisal 
Practice (USPAP) and the Uniform Appraisal Standards for Federal Land 
Acquisitions (UASFLA). The two sets of appraisal standards have 
conflicting definitions, so the definition in the UASFLA takes 
precedence because those standards, though they are not themselves law, 
are based on Federal case law, legislation, and

[[Page 16624]]

administrative rules. Providing for a definition in agency direction is 
designed to maximize consistency in the interpretation and application 
of the concept of market value.
    Within the proposed definition of market value, use of the language 
``giving due consideration to all available economic uses of the 
property at the time of the appraisal'' was also evaluated in response 
to the comments received. The phrase cited is an integral part of the 
definition. However, this part of the definition is mitigated by the 
requirement in the appraisal guidelines that the identified highest and 
best use shall be the authorized use: A lot suitable for use as a 
recreation residence. No other potential highest and best uses shall be 
considered or discussed in the appraisal report.
    Natural, Native State. The definition of this term in the proposed 
direction was very similar to that used in CUFFA and was not changed in 
the final direction.
    Recreation Residence. This term was not defined in CUFFA. However, 
CUFFA includes several references to the ``recreation residence 
program,'' and CUFFA defines the term ``cabin,'' as a subset of 
recreation residence (see the final direction defining the term 
``cabin''). Therefore, the Forest Service believes that for consistency 
in management, and clarity for the public, the term ``recreation 
residence'' must be defined to distinguish it from other types of cabin 
uses on NFS lands, such as historic cabins, isolated cabins, and cabins 
used for mining or grazing operations. The definition, however, has 
been revised in the final direction to remove the words ``auxiliary 
buildings and improvements,'' so that the definition of a ``recreation 
residence'' is equal to the definition of a ``cabin,'' as cabin is 
defined in CUFFA and this section of the direction. However, a 
recreation residence special use commonly includes the use and 
occupancy of NFS lands with not just a recreation residence, but also 
with ``auxiliary buildings and improvements.'' The cumulative location 
and distribution of the recreation residence, or cabin, and the 
associated permit holder owned auxiliary buildings and improvements on 
NFS land comprises the recreation residence ``lot,'' as the term 
``lot'' is defined in the final rule at 36 CFR 251.51, published in a 
separate notice in this part of today's Federal Register. Auxiliary 
buildings and improvements are not a part of the recreation residence 
or cabin and have therefore, been deleted from the final definition of 
the term ``recreation residence.''
    Related Improvements. A definition of ``related improvements'' was 
not included in the proposed rule or proposed directives. However, due 
to the comments received on the definition of ``recreation residence 
lot'' in the proposed rule, the Forest Service is adding this 
definition to clarify what constitutes a related improvement in the 
context of a recreation residence lot.
    For the purpose of defining a recreation residence lot (36 CFR 
251.51), ``related improvements'' include not only the examples of 
facilities and uses owned and maintained by the holder identified at 36 
CFR 251.51, but may also include holder-owned facilities or uses of 
National Forest System lands operated or maintained by the holder in 
conjunction with the recreation residence use. For example, 
outbuildings, wood piles, retaining walls, picnic tables, driveways, 
parking areas, trails, boardwalks, campfire rings, seats, benches, the 
construction and maintenance of lawns, gardens, flower beds, landscaped 
terraces, and the manipulation and/or maintenance of native vegetation. 
Related improvements will not include native vegetation that is 
manipulated and/or maintained for the primary purpose of protecting 
property and mitigating safety concerns, such as the removal of hazard 
trees, and the treatment/management of vegetation, approved by the 
authorized officer, to reduce fuel loading and to create defensible 
space for wildfire suppression purposes, nor will it include tract 
association- or community-owned facilities that are authorized under a 
separate authorization to the recreation residence tract association or 
some other entity representing the owners of the recreation residence. 
The list of items identified in the definition of ``related 
improvements'' in section 33.05 is not intended to be an all-inclusive 
list.
    Simple Majority. Section 614(c)(2) of CUFFA requires that a new 
appraisal or peer review of an existing appraisal be made by a majority 
of the cabin owners in a group of cabins represented in the appraisal 
process by a typical lot. To assure that Forest Service managers 
consistently understand and apply this provision of CUFFA, the agency 
believes that there is a need to clearly define what constitutes a 
``majority'' as used in this section of CUFFA. The proposed direction 
did so by providing a definition of ``simple majority.'' However, since 
CUFFA and other sections of the directive use the term ``majority,'' 
instead of ``simple majority,'' this term has been changed to 
``majority'' in section 33.05. The proposed direction provided a 
definition of ``more than 50 percent,'' and that definition remains the 
same in the final direction. In the case where a typical lot represents 
a grouping of an even number of lots, and a request is made for a new 
appraisal or peer review pursuant to section 614(c)(2) of CUFFA, the 
majority of the holders within that grouping would be at least 50% of 
the permit holders in that grouping, plus 1. A request for a peer 
review or new appraisal by only 50 percent of the holders within a 
grouping comprised of an even number of lots would not by definition, 
constitute a majority.
    Tract. The definition of this term in the proposed direction was 
very similar to that used in CUFFA, and was not changed in the final 
direction.
    Typical Lot. The first sentence of the definition of this term in 
the proposed direction was similar to the definition in CUFFA. The 
Forest Service expanded the definition in the proposed direction to 
describe to Forest Service managers how typical lots are to be used for 
appraisal purposes. There have been no changes to the definition of 
this term in the final directive.
    33.13--Annual Adjustment of Recreation Residence Fee. This section 
prescribed the manner in which annual adjustments to recreation 
residence fees would be made and provided a series of examples for 
implementing the provisions of the proposed direction.
    Comment. At least one respondent was critical of the Forest 
Service's proposal to continue to use the Implicit Price Deflator, 
Gross National Product (IPD-GNP) index in making annual changes to 
fees, stating that section 608(b) of CUFFA directs the agency to use 
the ``Index of Agricultural Land Prices,'' published and maintained by 
the Department of Agriculture. One respondent stated that since the 
proposed direction has no provisions to adopt the use of the Index of 
Agricultural Land Prices, it must mean that the Forest Service intends 
to incur an unnecessary expense of updating this section of the 
direction when the transition period (as prescribed in section 614 of 
CUFFA) is over, or the Forest Service hopes to bury the Index of 
Agricultural Land Prices and not use it at all.
    Response. The proposed rule and proposed directives clearly 
disclosed the intent to use current and future indexing factors for 
making annual adjustments to recreation residence special use permit 
fees in compliance with the provisions in CUFFA. Section 614 of CUFFA 
describes the transition as that period of time during which the final 
rule, direction revisions, and new appraisal guidelines are 
promulgated,

[[Page 16625]]

adopted, and fully implemented, and a new base cabin user fee for all 
holders is established. Section 614(c) of CUFFA provides holders up to 
2 years after the date of adoption of the final rule, direction 
revisions, and appraisal guidelines, to request a new appraisal or peer 
review. Additional time beyond the date of these requests will be 
needed for new appraisals and peer reviews to be conducted and a new 
base cabin user fee established. So it is conceivable that for some 
permit holders, the transition period described in CUFFA will continue 
for several years after the date of adoption of these final rules, 
direction revisions, and appraisal guidelines. During this transition 
period, section 614(a)(1) and (2) of CUFFA specifically direct that 
term special use permit fees for recreation residences shall be 
annually adjusted using the annualized 2nd quarter to 2nd quarter 
change in the IPD-GNP. The Forest Service's direction at Sec.  33.13 of 
FSH 2709.11 reflects this provision of CUFFA.
    In the preamble of the proposed rule (68 FR 25749), the Forest 
Service disclosed that it will begin to use the Index of Agricultural 
Land Prices to make annual adjustments to the base cabin user fee when 
the transition period (section 614 of CUFFA) ends. A notation on Table 
I, Sec.  33.13 (68 FR 25779) stated that approximately 2 years after 
adopting the proposed rule and direction revisions (including the new 
appraisal guidelines), the Forest Service would develop supplemental 
direction to implement the provisions of section 608(a) and (b) of 
CUFFA. By waiting approximately 2 years before proposing and 
establishing agency direction for use of the Index of Agricultural Land 
Prices for annualized changes in recreation residence permit fees, the 
Forest Service will be able to then provide holders and interested 
members of the public, clear and focused fee direction concerning the 
use of that index.
    Comment. Several comments were received which cited that in Sec.  
33.13 of the proposed directive, Example 2 displayed a year in which 
the annual fee increase could be in excess of 5 percent. At least one 
respondent who commented on this section of the direction suggested 
that it should be revised to result in situations where the annual fee 
will never increase by more than 5 percent because that is what is 
needed to comply with the limitation provision in section 608(d) of 
CUFFA.
    Response. In Example 2, the increase in the fee from Year 2006 
($772) to the Year 2007 fee ($824) represented a fee increase of 6.7 
percent. It appears, however, that the respondent's comment is based on 
an interpretation of the limitation provisions in section 608(d) of 
CUFFA, which suggests that the annual change in a cabin user fee can 
never exceed 5 percent. The Forest Service does not agree with this 
interpretation of section 608(d) of CUFFA. Section 608(d) directs that 
the Secretary shall:
    (1) Limit any annual fee adjustment to an amount that is not more 
than 5 percent per year when the change in agricultural land values 
exceeds 5 percent in any 1 year; and
    (2) Apply the amount of any adjustment that exceeds 5 percent to 
the annual fee payment for the next year in which the change in the 
index factor is less than 5 percent.
    The Forest Service interprets this provision to mean that in any 
year in which the annual index amount exceeds 5 percent, the amount of 
the adjustment in excess of 5 percent will be carried forward in its 
entirety to the fee in the very next year in which the index factor is 
less than 5 percent, even if that results in a one year fee increase 
for that year in excess of 5 percent. Section 608(d) of CUFFA does not 
direct that there be a 5 percent fee increase limitation in the year in 
which the fee change in the index factor is less than 5 percent and the 
carryover adjustment(s) is applied. Example 2 in section 33.13 of the 
proposed direction was specifically designed with hypothetical index 
factors to demonstrate this interpretation of section 608(d) of CUFFA. 
Therefore, the Forest Service believes that the example is accurate, 
and disagrees with the interpretation of section 608(d) represented by 
the comment that agency direction should provide that an annual fee may 
never increase by more than 5 percent.
    There were no revisions made to this section.
    33.2--Fees When Determination Is Made To Place Recreation Residence 
on Tenure. This section provided direction for implementing the 
provisions of section 607(c) and (d) of CUFFA, describing the manner in 
which an annual fee will be assessed in the event that a decision is 
made to discontinue a recreation residence use.
    Comment. Several respondents provided comments about particular 
provisions in the three options which call for a recovery of some of 
the foregone fees, in cases where the recreation residence use is going 
to be allowed to continue for at least 10 more years beyond the 
originally identified date of expiration and conversion to an 
alternative public purpose. The respondents noted that these provisions 
are not mandated in CUFFA, questioned the legality of requiring that a 
fee that includes as a ``surcharge'' a 10-year recovery of previously 
foregone permit fees, and that a 10-year recovery should not run with 
the lot and be made a part of the fee assessed to a subsequent owner of 
the recreation residence, should a change in ownership occur over the 
course of that 10-year fee recovery.
    Response. Although it was not stated in the proposed direction, the 
options identified are a reiteration of current direction that has been 
in place since 1994. No changes from existing direction were proposed. 
Providing the 10-year recovery period was designed to benefit the 
owners of recreation residences, by preventing recreation residence 
owners from having to pay foregone fees in a single lump sum 
assessment. Rather, an economic impact to recreation residence owners 
has been mitigated in agency direction with the provision that allows 
owners to repay the foregone fees due the United States as an annual 
fee surcharge, in equal installments over a 10-year period.
    While the Forest Service understands the burdens this fee recovery 
surcharge may impose on a new owner of the recreation residence, it is 
the responsibility of the prospective buyer, or any successor in 
interest, to be aware of the terms and conditions of the recreation 
residence special use permit, including fee obligations due the United 
States at the time they consider acquiring a recreation residence. The 
current owner's fee obligation to the United States, including any 
annual fee recovery surcharge can then be taken into account by 
prospective purchasers as a consideration in negotiating a purchase 
price with the seller of the recreation residence.
    There were no revisions made to this section.
    33.4--Establishing the Market Value of Recreation Residence Lot. 
This section provided general direction about the manner in which 
recreation residences are appraised and describes the basic concept of 
establishing groupings of lots having essentially the same or similar 
value characteristics.
    Comment. Many comments were received concerning Sec.  33.4, 
paragraph 1, that provided direction for fee adjustments made for 
measurable differences among recreation residences lots within a 
grouping. These respondents stated that this could be implied to mean 
that appraisers would have the authority to make (base cabin user fee) 
adjustments for measurable differences among recreation residences

[[Page 16626]]

within a grouping of lots, and to establish new groupings of lots and 
to select typical lots, and that giving this authority to appraisers 
violates the provisions of CUFFA. Other respondents stated that there 
should not be the need to make adjustments, because if there were 
measurable differences among recreation residence lots within a 
grouping, then that should trigger the need to establish a new grouping 
with a new typical lot. Some respondents suggested that one of the 
results of implementing the provisions of CUFFA, Departmental 
regulations, and agency policies may be the need to reconsider and 
reconfigure lot groupings, including the establishment of additional 
lot groupings and the corresponding selection of additional typical 
lots. Other comments suggested that recreation residence lots should be 
appraised in their native, natural state and suggested that the 
appraiser should be instructed to consider lots as inaccessible in the 
winter, unless snow is removed from the access road by either the 
Forest Service or a third party.
    Response. The Forest Service agrees that as worded, paragraph 1 in 
Sec.  33.4 could be interpreted to mean that an appraiser has the 
authority to make adjustments to base cabin user fees in cases where 
there might be measurable differences among recreation residence lots 
within a grouping of lots. Therefore, the language in paragraph 1 has 
been revised to clarify that only the authorized officer may make 
adjustments.
    The Forest Service disagrees, however, with comments that suggested 
that measurable differences among recreation residence lots within a 
grouping of lots always signals the need to establish a new grouping 
and a new typical lot. While that may be appropriate in some cases, it 
may not always be an efficient or economically justifiable approach to 
establishing a base cabin user fee, particularly in cases where only 
one or two lots within a grouping of lots might have a measurable 
difference that, while measurable, will result in only a minor change 
to the base cabin user fee. Therefore, the Forest Service will leave 
this provision as an option for the authorized officer to consider and 
use in accommodating measurable differences between lots within a 
grouping as an alternative to establishing a new grouping and 
corresponding typical lot. However, paragraph 1 will be revised to 
include the word ``values'' to clarify that this provision means that 
adjustments to a base cabin user fee may be made when there are 
measurable value differences among recreation residence lots within a 
grouping of lots. The requirement that the authorized officer seek the 
advice of the assigned Forest Service review appraiser will also be 
added to paragraph 1.
    The Forest Service disagrees that this sentence could also be 
interpreted to mean that an appraiser has the authority to create a new 
grouping of lots and select a correspondingly new typical lot. The 
direction in Sec.  33.41 of the direction clearly directs that the 
establishment of groupings of lots, and the selection of a typical lot 
within each lot grouping, shall be made by the authorized officer with 
input from permit holders.
    The comments that suggested that the appraiser should be instructed 
to consider the lots as inaccessible in the winter unless snow is 
removed from the access road may not have understood that this property 
characteristic is covered in Sec.  33.4, paragraph 3(b). The appraiser 
is directed to consider, and adjust if appropriate, any limitation on 
access attributable to weather and other factors. The appraiser will 
consider the lot's access condition. If the property is inaccessible in 
winter, the appraiser will search for sales with similar access 
limitations.
    The Forest Service also agrees that as part of the implementation 
of CUFFA and the adoption and implementation of the Secretary's 
regulations and agency policies, there may be an occasional need in 
some tracts for the authorized officer to either reconsider the 
groupings of lots and the identification of typical lots or make 
adjustments to base cabin user fees for certain lots within a grouping 
of lots. The need to do so would most likely occur in cases where the 
inventory of facilities, utilities, and access servicing a tract are 
not comparable to the facilities, utilities, and access servicing the 
typical lot. In these cases, the authorized officer will have the 
authority to, at his or her discretion, consider implementing one of 
the following options:
    1. Establish a new grouping of lots having clearly different 
attributes of access, utilities, and facilities servicing those lots 
from those which have been inventoried and are servicing the typical 
lot and:
    a. Identify with the holders a new typical lot to represent that 
new grouping.
    b. Prepare a new permanent inventory of utilities, access, and 
facilities servicing that typical lot (sec. 33.42).
    c. Conduct a new appraisal of that typical lot pursuant to the 
provisions of CUFFA. The Forest Service and the holder(s) shall pay 
equally for the cost of the new appraisal.
    2. Where feasible, assign lots having clearly different attributes 
with another typical lot that may have been established in the tract 
and which has attributes of access, utilities, and facilities that are 
comparable to those lots.
    3. Make adjustments to the base cabin user fee for those lots 
having utilities, access, and facilities that are so different from the 
attributes of the typical lot that it creates a measurable difference 
in value.
    These options have been added to Sec.  33.41.
    Comment. Section 33.4 of the proposed direction also directed that 
an appraiser shall not select sales of land within developed urban 
areas when identifying comparable sales to arrive at an appraised value 
of a typical lot. Some respondents commented that the word ``urban'' 
should be defined because it has a specific meaning in most land use 
ordinances and that (1) cabin owners are concerned that appraisers may 
select comparable lots from urban and suburban-style subdivisions in 
rural areas and that (2) use of comparable lots from these sources has 
the potential to dramatically distort the valuation of NFS lots.
    Response. The Forest Service agrees with those respondents who 
expressed these concerns. Urban is defined in ``The Dictionary of Real 
Estate Appraisal, Fourth Edition,'' as:

    Describes a mature neighborhood with a concentration of 
population typically found within city limits or a neighborhood 
commonly identified with a city.

    A definition for ``urban'' has been added to section 33.05.
    33.42--Inventorying Utilities, Access, and Facilities. This section 
directed the authorized officer to identify and inventory utilities, 
access, and facilities that provide service to each typical lot within 
a recreation residence tract. It also provides criteria or guidelines 
for the authorized officer to use in making a determination as to who 
paid for the capital costs to construct those utilities, access, and 
other facilities servicing each typical lot
    Comment. Many comments were received concerning this section of the 
proposed direction. One of the purposes of this part of the proposed 
direction was to further define the fundamental premise in CUFFA, which 
directs that ``the Secretary shall presume that a cabin owner, or a 
predecessor of the owner, has paid for the capital costs of a utility, 
access, or facility serving the lot being appraised, unless the Forest 
Service produces evidence that the agency or a third party has paid for 
the

[[Page 16627]]

capital costs.'' Most who commented on Sec. Sec.  33.42, and 33.42(a) 
and (b) of the proposed direction said it was inconsistent with the 
provisions in CUFFA, or `` defective'' in that the direction (1) 
attempts to determine by definition that certain improvements are not 
paid for by cabin owners, or their predecessors, and that an approach 
is not equivalent to producing evidence (as is required in CUFFA); (2) 
attempts to put the burden of proof (as to who paid for utilities, 
facilities, or access) upon the cabin owners, rather than on the Forest 
Service; and (3) establishes standards which would allow an authorized 
officer to make assumptions as to who paid for utilities, access, or 
facilities without producing actual evidence of that fact. Some who 
commented said that all evidence demonstrating payment of capital 
investments in utilities, access, and facilities must be in writing. 
Many respondents commented that this section of CUFFA requires the 
Forest Service to prove payment of the capital investment in access, 
utilities, and facilities by either the Forest Service or a third 
party. Many comments suggested that any time a holder is paying a 
standard rate for a utility service, included in that rate are the 
costs of capital investments of the facilities needed to convey/provide 
the service or utility. Lastly, almost all who commented on this part 
of the proposed direction disagreed with that portion of Sec.  33.42(a) 
which specifically cited as an example, that the assessment of a tap 
fee or hook-up fee charged by a utility provider to a permit holder or 
their predecessor does not constitute a payment of the capital costs of 
providing those facilities to the lot.
    Response. The primary purpose for the direction in section 33.42 
was to provide clarity and consistency for implementing the inventory 
provisions of section 606(a)(1) of CUFFA. In the proposed directive, 
the Forest Service provided direction through the use of examples. 
Lacking this direction, permit administrators and authorized officers 
would be guided only by nondescript provisions in section 606(a)(1) of 
CUFFA which lends itself to differences in interpretation. That was 
clearly evident by the significant number of comments that were 
generated by the Forest Service's interpretation of section 606(a)(1) 
and demonstrates that there is no single, agreeable interpretation of 
this section of CUFFA. Therefore, the agency will exercise its 
discretion in providing further definition and guidance in its 
directives to assure consistency in interpretation and application of 
this part of CUFFA.
    Most of the comments that were submitted concerning the examples 
provided in the proposed direction in Sec. Sec.  33.42(a) and (b) 
disagreed with various elements of the proposed direction concerning 
evidence that constitutes payment for the capital costs of utilities, 
access, and facilities which provide access or services to a recreation 
residence lot. Those aspects of the comments received will be 
individually addressed, as follows:
    1. Responsibility for Determining Evidence of Payment of Capital 
Costs. Many who commented interpreted the proposed direction in Sec.  
33.42(a) as requiring cabin owners to provide evidence that either the 
cabin owner or a predecessor of a cabin owner directly paid, paid a 
lump sum fee, or paid a surcharge for the capital costs of an 
inventoried utility, access, or facility. Many cited that it is the 
intent of section 606(a)(1) of CUFFA that it is the responsibility of 
the Forest Service to provide this evidence.
    The Forest Service agrees. Major revisions to this section have 
been made to more clearly articulate that intent. The caption for Sec.  
33.42(a) has been revised to ``Types of Utilities, Access, and 
Facilities to Include in Inventories,'' and includes the list of 
itemized types of utilities, access, and facilities that were 
identified in the proposed direction under the general caption in Sec.  
33.42 as items 1 thru 4. The caption at Sec.  33.42(b) has been revised 
to ``Criteria to be Considered in Determining Who Paid for Inventoried 
Utilities, Access, and Facilities,'' and revises the direction 
previously contained in Sec. Sec.  33.42(a) and (b) to provide greater 
clarity to Forest Service employees and cabin owners concerning 
criteria for determining who paid for capital improvements and to 
clearly identify the burden of the Forest Service to produce evidence 
that capital improvements were paid by a party other than the cabin 
owner or their predecessor.
    However, the Forest Service disagrees with those respondents who 
commented that CUFFA directs the Forest Service to ``prove'' that 
capital costs for access, utilities, and facilities were paid for by 
the Forest Service or a third party. That is a standard much higher 
than the clear language in CUFFA which simply requires the authorized 
officer to have evidence of the payment of capital costs by either the 
Forest Service or a third party.
    2. Hook-up or Tap Fee. The proposed direction in Sec.  33.42(a) 
stated that a hook-up fee or tap fee, which is commonly assessed by a 
utility provider when initiating service to a new customer, does not 
equate to payment of the capital costs of installment of the facilities 
that deliver or transport the utility service to the tract or lot being 
appraised. Many of the comments received disputed this statement, 
asserting that a hook-up or tap fees are an expense to the cabin owner 
and, therefore, are assessed by the provider to pay for the capital 
costs to construct and install the improvements or facilities which 
deliver the utility or service.
    The Forest Service agrees that there may be cases where at least 
some of the hook-up or tap fee assessment is based upon the provider's 
capital costs to install the utility or facility that provides that 
service. Therefore, the direction has been revised in Sec.  33.42(b) to 
instruct authorized officers that if evidence is produced to indicate 
that hook-up or tap fee assessments were implemented to pay for the 
capital costs to construct and install the improvements or facilities 
which deliver the utility or service, then that will serve as the basis 
for the authorized officer to determine that the cabin owner or their 
predecessor who paid a fee have paid for the capital costs of the 
utility or facility providing service to the lot. In most cases, 
however, the amount of the hook-up or tap fee assessed to a new 
customer is established primarily to pay for the utility provider's 
administrative costs incurred as part of activating a new customer, 
such as the establishment of a new file and account and expenses of a 
site visit to enable switches and install metering units owned and 
operated by the provider. In these instances, the hook-up or tap fee 
will not be considered payment by the cabin owner or their predecessor 
for the capital costs of facilities. The final direction has been 
revised to reflect the fact that it is the responsibility of the 
authorized officer to seek evidence to make that determination.
    3. Base User Fees. Many comments disputed the proposed direction 
that provided that if the capital costs of a utility or facility are 
paid for and attributable to the entire service base, then those 
capital costs are assumed to be neighborhood enhancing developments and 
the costs being borne by the provider of a service or utility, not the 
cabin owner or their predecessor. These comments suggest that in 
effect, all customers who are assessed a base rate and/or user fee for 
services provided by a utility company or service provider, such as an 
electric company, telephone company, water

[[Page 16628]]

utility district, cable TV provider, and so forth are paying for the 
capital costs of utilities and facilities that provide those types of 
utility or service to a recreation residence lot. The logic of these 
comments would suggest that any cabin owner who is paying base rates 
and user fees for a utility service is paying capital costs to 
construct, operate, and maintain the facilities that provide or deliver 
that utility or service, even when those base rates and user fees are 
nothing more than that being assessed to every other customer in the 
service area.
    The Forest Service disagrees with these arguments. Applying the 
logic of these comments would mean that only in the rarest of cases 
would there ever be a utility or facility that is providing service to 
a recreation residence lot that would be considered as having been 
provided by a third party, such as a utility or service company 
provider. If that had been the intent of the Congress in drafting this 
provision of CUFFA, then there would have been little purpose served to 
direct that the agency inventory and identify utilities provided by a 
third party. Rather, the Forest Service has interpreted CUFFA to mean 
that there clearly are circumstances in which utilities, access, and 
facilities can be identifiable as having been provided by a third 
party, and most commonly by the utility or service provider, without 
the customer directly incurring the capital costs of utilities, access, 
or facilities. It is the Forest Service's interpretation of section 
606(a)(1) of CUFFA that if the capital costs of any utility, access, or 
facility were not directly paid by the cabin owner or their 
predecessor, then costs will be identified as having been paid for by a 
third party. The payment of a base rate and usage fee is not equivalent 
to direct payment of the capital costs of utility, access, or 
facilities delivering or providing a utility or service.
    4. Tax Supported Roads and Highways. Similar to the issue raised in 
preceding paragraph 3, many respondents asserted that in those cases 
where a tract or lot is accessed by a Federal, State, or county highway 
or road, and where the cabin owner is paying a possessory interest tax 
to the State or county governmental entity who operates and maintains 
that road or highway, is proof that the cabin owner is paying for the 
capital costs of the highway or road through that tax.
    The Forest Service disagrees. The only evidence demonstrating that 
the cabin owner or a predecessor of the cabin owner paid the capital 
costs for a road or highway would be evidence that a public road agency 
assessed a surcharge or lump sum assessment to the cabin owner or their 
predecessor, or a specific road or highway accessing their recreation 
residence.
    Almost all who responded to this section of the proposed direction 
commented that simply making statements in agency direction does not 
equate to providing evidence that the capital costs of inventoried 
utilities, access, and facilities were or were not provided or paid for 
by the cabin owners or their predecessors, and that CUFFA requires 
evidence. The Forest Service agrees with those comments, but in doing 
so, the agency also wants to clarify that it is not the intent to have 
statements in agency direction satisfy the evidence requirements of 
CUFFA. Rather, as previously stated, the provisions in Sec. Sec.  
33.42(a) and (b) of the direction were designed to provide internal 
agency guidance to Forest Service special use permit administrators and 
authorized officers for their use in conducting inventories and in 
making a determination as to who paid for utilities, access, and 
facilities providing services to a lot. Some of those provisions 
describe circumstances which the agency will consider as being prima 
facie evidence for use by an authorized officer in determining who paid 
for the capital costs of certain access, utilities, and facilities.
    The final direction has been revised to more clearly articulate 
this purpose.
    33.7--Holder Notification of Accepted Appraisal Report and Right of 
Second Appraisal. This section directed the authorized officer to 
notify the affected holders when the Forest Service has accepted an 
appraisal report and has determined a new base fee based on that 
appraisal report.
    Comment. A respondent suggested that the authorized officer should 
be required to provide the holders with written justification for his/
her decision for accepting an appraisal report.
    Response. The authorized officer, as stated in section 33.6, may 
accept the estimated value of the typical lot or lots in the appraisal 
for establishing a new base fee for that recreation residence lot or 
lots. The justification for the decision is that the assigned review 
appraiser has determined that the appraisal meets the required 
standards and the value estimate is supported and approved. By law, the 
authorized officer is required to calculate cabin user fees that 
reflect the market value of a lot, including regional and local 
economic influences. Market value incorporates those economic 
influences. It would be redundant for the authorized officer to say 
his/her justification for the decision (determining a new base fee) is 
because he/she complied with law.
    There were no changes made to this section in the final directive.
    33.71b--Appraisal Guidelines. This section of the proposed 
direction addressed the manner in which second appraisals may be 
conducted.
    Comment. One appraisal organization suggested wording to clarify 
the intent of this section and to demonstrate why the recommended 
procedure does not present an ethical conflict in the context of the 
Uniform Standards of Professional Appraisal Practice (USPAP).
    Response. The Forest Service agrees. Section 33.71b has been 
rewritten to more clearly articulate its purpose and explain how the 
procedure is in conformance with USPAP.
    33.72--Reconsideration of Recreation Residence Fee. This section 
provided direction for reconsidering a recreation residence base fee 
following the authorized officer's receipt of reconsideration based on 
the results of a second appraisal.
    Comment. Many comments were received regarding the fact that this 
section of the proposed direction failed to provide guidance to the 
authorized officer on how a final base fee will be established in cases 
where a second appraisal might be materially different from the first 
appraisal. Respondents suggested that it may not be appropriate to, as 
the proposed direction stated, establish a base fee from within the 
range of values established by the first and second appraisals, 
particularly if one of the appraisals was poorly done. For the same 
reason, many who commented were concerned that this provision in the 
proposed direction might lead authorized officers to simply average the 
first and second appraisals, to arrive at an average between the two in 
establishing a new base fee, a practice which might also be 
inappropriate if one or both of the two appraisals were poorly done.
    Response. The language in this section of the proposed direction is 
nearly verbatim to the language provided in section 610(d) of CUFFA 
concerning the establishment of a new base fee pursuant to the results 
of a first and second appraisal. The comments suggest that the Forest 
Service direction restrict or qualify the manner in which the 
authorized officer may exercise discretion to establish a new base fee 
in an amount that is equal to the base fee established by the initial 
or the second appraisal, or is within the range of values, if any, 
between the initial and second appraisals. The Forest Service 
disagrees. The agency believes that this

[[Page 16629]]

discretion is necessary, and yet is adequately prescriptive to assure 
an acceptable degree of consistency by authorized officers in 
exercising it on a case specific basis.
    Regarding comments concerning the inappropriateness of the use of 
appraisals that are ``poorly done,'' the Forest Service notes that any 
appraisal that is presented to an authorized officer for consideration 
in the establishment of a cabin user fee must, pursuant to agency 
direction, first be reviewed by a Forest Service Qualified Review 
Appraiser. The Qualified Review Appraiser determines whether the 
appraisal has been conducted, and the appraisal report has been 
prepared, in a manner consistent with Federal and agency standards, and 
in the case of recreation residence lot appraisals, consistent with the 
appraisal guidelines for recreation residence lots in existence at the 
time that the appraisal was conducted. Only when a Forest Service 
Qualified Review Appraiser conducts a review and makes a determination 
that the appraisal is acceptable for agency use, is it declared 
acceptable for use in determining a recreation residence fee. The same 
review standards will be applied to any second appraisal. Therefore, if 
the term ``poorly done'' equates to not having met established Federal 
and agency standards and specifications for conducting appraisals and 
writing appraisal reports, then it is likely that the appraisal would 
never be approved for agency use and would, therefore, not be used by 
the authorized officer as either a first appraisal or a second 
appraisal in establishing a cabin user fee.
    33.8--Establishing a Recreation Residence Lot Value During the 
Transition Period of the Cabin User Fee Fairness Act. This section of 
the proposed direction addressed the manner in which a base cabin user 
fee would be established upon adoption of the final regulations, 
policies, and appraisal guidelines pursuant to CUFFA. It identified 
that one of three options to be used in establishing a base cabin user 
fee during the transition period: (1) Conduct a new appraisal pursuant 
to these final regulations, policies, and appraisal guidelines; (2) 
Commission a peer review of an existing appraisal that had been 
completed after September 30, 1995; or (3) Establish a new base fee 
using the market value of the typical lot that has been identified in 
an existing appraisal that was completed and approved after September 
30, 1995.
    Comment. Some who responded to this section of the proposed 
direction suggested that permit holders should also be provided with a 
fourth option, one that would give the holders an opportunity, after 
the completion of either a new appraisal (option 1) or a peer review 
(option 2), to request a second appraisal, in accordance with the 
provisions for second appraisals as described in Sec.  33.7.
    Response. The Forest Service disagrees with those who interpreted 
CUFFA in this manner. The three options identified in section 33.8 of 
the proposed direction were intended to reflect the provisions of 
section 614 of CUFFA, which clearly provides that during the transition 
period, these are the only three means by which a new base cabin user 
fee may be established for permits for those lots which were appraised 
on or after September 30, 1995, but before October 11, 2000 (the date 
of enactment of CUFFA). Typical lots representing almost every 
recreation residence lot in the entire National Forest System were 
appraised between these two dates. The only part of section 614 of 
CUFFA that provides holders with the opportunity to seek a second 
appraisal is found in section 614(b)(1)(B), where it speaks to the 
right of a cabin owner to a second appraisal under section 610 of 
CUFFA. Section 610, however, only applies to lots which, at the time of 
enactment of CUFFA, had not been appraised after September 30, 1995. As 
stated above, typical lots representing almost every recreation 
residence lot in all of the National Forest System had been appraised 
between September 30, 1995 and the date of enactment of CUFFA (October 
11, 2000). Section 610 of CUFFA, which provides for the right of a 
second appraisal, is interpreted by the Forest Service to apply to 
those lots which were not appraised between September 30, 1995 and 
October 11, 2000, but instead may have been appraised since October 11, 
2000. There are only rare instances in which this has occurred. The 
provisions of section 610 of CUFFA, and as expanded upon in section 
33.7 of the final policy direction concerning the right of a permit 
holder to a second appraisal will, of course, also apply to any and all 
appraisals of typical lots in the next regularly scheduled appraisal 
cycle, which will begin as early as 2006. The right of a second 
appraisal will not apply to the establishment of a new base cabin user 
fee during the transition period, as that period is defined in section 
614 of CUFFA and in Sec.  33.8 of the final policy direction.
    The direction in Sec.  33.8 has been revised in the final directive 
to make it clear that the options described in paragraphs 1 through 3, 
and explained in further detail in Sec.  33.81 through 33.83, are the 
only means by which a new base cabin user fee is established during the 
transition period for those lots which were appraised between September 
30, 1995 and October 11, 2000. Holders who request a new appraisal or 
the commissioning of a peer review will not have the right to request a 
second appraisal as provided for in section 33.7.
    33.83--Requests for Peer Review Conducted Under Regulations. This 
section of the proposed direction addressed the manner in which peer 
reviews may be requested, conducted, and used.
    Comment. One appraisal organization requested that the Department 
provide immunity or indemnification for its role in facilitating a peer 
review.
    Response. The Forest Service consulted with the Office of the 
General Counsel and was advised that the government has no authority to 
provide either immunity or indemnification to the appraisal 
organization as requested. The Forest Service and Office of the General 
Counsel consulted with the appraisal organization staff and counsel to 
discuss alternatives the organization could take absent government 
immunity or indemnification. The appraisal organization agreed to 
pursue alternative means to address concerns about potential liability 
of its members.
    There were no changes made to this section in the final directive.
    Comment. Two appraisal organizations suggested wording to clarify 
the type of review intended in section 33.83.
    Response. The Forest Service agrees. Section 33.83 will be 
rewritten to more clearly articulate its purpose and identify the type 
of review contemplated in conformance with Uniform Standards of 
Professional Appraisal Practice (USPAP).
    Comment. Some who responded to this section of the proposed 
direction suggested that one of the products of a peer review is to 
recommend that the appraisal being reviewed is so seriously flawed that 
it be discarded for use.
    Response. The Forest Service disagrees with these comments. 
Paragraphs ``a'' and ``b'' in section 33.83 of the proposed direction 
identified actions that will be taken, or could be taken, as a result 
of the findings of a peer review. They identified that when a peer 
review results in a finding that the appraisal being reviewed was not 
conducted in a manner consistent with the regulations, policies, and 
appraisal guidelines, the authorized officer shall either establish a 
new base fee that reflects consistency with CUFFA

[[Page 16630]]

regulations, policies, and appraisal guidelines, or provide the 
opportunity for the holders to request a new appraisal, in accordance 
with the provisions of CUFFA and these regulations, policies, and 
appraisal guidelines. If a new appraisal is requested and conducted, it 
would replace the existing appraisal and be used as the basis for 
establishing a new base cabin user fee. The Forest Service believes 
that these provisions in the proposed direction are consistent with the 
provisions for conducting and utilizing a peer review identified in 
section 614(c)(4) of CUFFA.
    Comment. Some respondents suggested that one of the purposes or 
outcomes of the peer review should be to allow peers to recommend that 
the appraisal being reviewed be thrown out as just an incompetent 
appraisal. The provisions at Sec.  33.83 don't provide for that, and 
instead identify that the results of the peer review are only to 
determine whether the appraisal was conducted in a manner consistent 
with regulations, policies, or the appraisal guidelines being adopted 
pursuant to CUFFA.
    Response. The two situations described above are not in conflict. 
If a peer review results in a determination that the appraisal was not 
conducted in a manner consistent with the regulations, policies, and 
appraisal guidelines pursuant to CUFFA, the authorized officer shall 
either establish a new base fee to reflect consistency with the 
regulations, policies, and appraisal guidelines or conduct a new 
appraisal. Either of these options has the practical effect of 
``throwing out'' the original appraisal because it is no longer the 
basis for the fee determination.
    Comment. Many comments were received concerning those provisions 
which outlined the manner in which a peer review will be conducted, and 
that it will be based upon the membership in a professional appraisal 
organization of the appraiser who conducted the appraisal being 
reviewed. The direction went on to identify criteria for identifying 
the assignment of an appraiser to conduct the peer review and whether 
the appraiser who conducted the appraisal being reviewed was or was not 
a member of one or more appraisal sponsor organizations of The 
Appraisal Foundation. Those who commented on these criteria said that 
this constitutes a bias in favor of The Appraisal Foundation, and that 
given the history of the role of The Appraisal Foundation in the 
creation of CUFFA, there is no reason in preferring The Appraisal 
Foundation over any other appraisal organization.
    Response. The Appraisal Foundation has no individual appraiser 
members, only sponsor organization members. Therefore, no appraisal may 
be referred to TAF for peer review.
    There were no revisions made to this section.

Forest Service Handbook 5409.12--Appraisal Handbook

Chapter 60--Appraisal Contracting
    Section 66, Exhibit 03--Required Specifications for Appraisal of 
Recreation Residence. This section containing exhibits 06 and 07 was 
coded in a single digit coding scheme when published for notice and 
comment. The section is now coded in a two digit coding scheme (sec. 
66) to conform it to the other sections in FSH 5409.12, chapter 60, 
which were revised on February 23, 2005. The exhibits for recreation 
residences are now enumerated as exhibit 03 (previously exhibit 06) and 
exhibit 04 (previously exhibit 07) respectively.
    This section contained the technical appraisal provisions and 
guidelines enumerated in section 606 of CUFFA. More than 1,500 comments 
were received addressing various provisions of the proposed appraisal 
specifications. Approximately 400 comments addressing specific sections 
of exhibit 06 were submitted via a fill-in-the-blank standard form. 
Each of those issues raised on the standard form are addressed in the 
order in which the subject of those comments appears in the appraisal 
specifications in exhibit 06.

General Comment on Exhibit 03

    Comment. There are inconsistencies in definitions and the use of 
language throughout the specifications, and they will invite problems 
in the future. The language should mirror CUFFA and there should be no 
repetitions.
    Response. The specifications were developed to incorporate 
direction found in CUFFA and mirror the language found there. However, 
there are areas where either CUFFA was silent on a particular aspect of 
the appraisal