GAO Report RCED-98-58, Feb. 13, 1998 (118 pages).
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The Forest Service manages about 192 million acres--nearly nine percent of the nation's total surface area and about 30 percent of all federal lands. In fiscal year 1996, revenue generated from the sale or use of resources and lands within the National Forest System totaled about $0.9 billion. More than $2 billion in appropriations and $0.4 billion in trust funds were available to manage the system's 155 national forests. Congress has expressed interest in making the agency's operations more cost-effective and businesslike.
This report (1) identifies the lessons that can be learned from efforts by nonfederal land managers to generate revenue or become financially self-sufficient from the sale or use of natural resources on their lands and (2) discusses legal and other barriers that may prevent the Forest Service from implementing similar efforts on its lands.
" If the Congress believes that increasing revenue or decreasing costs from the sale or use of natural resources should be mission priorities for the Forest Service, it will need to work with the agency to identify legislative and other changes that are needed to clarify or modify the Congress's intent and expectations for revenue generation relative to ecological, social, and other values and concerns."
The Congress has given the Forest Service the authority to obtain fair market value for some goods or to recover costs for some services. However, the agency has not always taken advantage of this authority, as the following examples from our prior work show. -- In June 1997, we reported that the sealed bid auction method is significantly and positively related to higher bid premiums on timber sales. However, the Forest Service used oral bids at single-bidder sales rather than sealed bids, resulting in an estimated decrease in timber sales receipts of $56 million from fiscal year 1992 through fiscal year 1996.\33 -- In December 1996, we reported that, in many instances, the Forest Service has not obtained fair market fees for commercial activities on the national forests, including resort lodges, marinas, and guide services, or for special noncommercial uses, such as private recreational cabins and special group events. Fees for such activities are the second largest generator of revenue for the agency, after timber sales. The Forest Service's fee system, which sets fees for most commercial uses other than ski operations, had not been updated for nearly 30 years and generally limited fees to less than 3 percent of a permittee's gross revenue. In comparison, fees for similar commercial uses of nearby state-held lands averaged 5 to 15 percent of a permittee's total revenue.\34 -- In December 1996, we also reported that although the Forest Service had been authorized to recover the costs incurred in reviewing and processing all types of special-use permit applications since as far back as 1952, it had not done so. On the basis of information provided by the agency, we estimated that in 1994 the costs to review and process special-use permits were about $13 million. -- In April 1996, we reported that the Forest Service's fees for rights-of-way for oil and gas pipelines, power lines, and communications lines frequently did not reflect fair market value. Agency officials estimated that in many cases--particularly in high-value areas near major cities--the Forest Service may have been charging as little as 10 percent of the fair market value.\35 The Forest Service has been aware for some time of the need to improve its efforts to obtain fair market value for goods or recover costs for services. However, it has studied and restudied issues without reaching closure. For example, in 1987 and 1995, the agency developed draft regulations that, if enacted, would have allowed forest managers to recover the costs incurred in reviewing and processing special-use permit applications. However, the draft regulations were never finalized or published because, according to Forest Service headquarters officials, the staff resources assigned to develop and publish the regulations were diverted to other higher-priority tasks.\36 -------------------- \33 Forest Service: Factors Affecting Bids on Timber Sales (GAO/RCED-97-175R, June 17, 1997). \34 U.S. Forest Service: Fees for Recreation Special-Use Permits Do Not Reflect Fair Market Value (GAO/RCED-97-16, Dec. 20, 1996). \35 U.S. Forest Service: Fee System for Rights-of-Way Program Needs Revision (GAO/RCED-96-84, Apr. 22, 1996). \36 U.S. Forest Service: Fees for Recreation Special-Use Permits Do Not Reflect Fair Market Value (GAO/RCED-97-16, Dec. 20, 1996).
"Because the Forest Service has not exercised its authority to obtain fair market value for certain goods and recover costs for certain services and has not always acted to contain costs, even when requested to do so by the Congress, GAO recommends that the Secretary of Agriculture direct the Chief of the Forest Service to revise the strategic plan that the agency developed to comply with the requirements of the Results Act to include goals and performance measures for obtaining fair market value for goods, recovering costs for services, and containing expenses as the necessary first step in holding the Forest Service accountable for its performance."
Wild Wilderness foot note:
The USFS has lost hundreds of millions of dollars by literally giving away America's natural resources to extractive industries. It has lost tens of millions of dollars by undercharging commercial recreation providers and concessionaires who are permitted to operate private businesses on public lands. Let's not even think about charging working families to take a simple walk in the woods until corporations are paying full market value for what they take from the American public!