[Federal Register Volume 69, Number 69 (Friday, April 9, 2004)]
[Rules and Regulations]
[Pages 18813-18814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8033]


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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 223

RIN 0596-AC16


Sale and Disposal of National Forest System Timber; Timber Sale 
Contracts, Modification of Contracts

AGENCY: Forest Service, USDA.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Forest Service is adopting an interim final rule at part 
223, subpart B, of Title 36, Code of Federal Regulations, Sec.  
223.112. This interim final rule authorizes timber sale contracting 
officers to modify contracts to provide a redetermination of stumpage 
rates and deposits to reflect significant timber market declines. This 
rule applies to existing timber sale contracts awarded after October 1, 
1995, that have been suspended for more than 90 days, during the normal 
operating season because of administrative appeals or litigation, 
through no fault of the timber purchaser. Comments received on this 
interim final rule will be considered in adoption of a final rule.

DATES: This interim final rule is effective April 9, 2004. Comments 
must be received in writing by June 8, 2004.

ADDRESSES: Send written comments to the Director of Forest and 
Rangeland Management, via the U.S. Postal Service to MAIL STOP 1105, 
Forest Service, USDA, 1400 Independence Avenue, SW., Washington, DC 
20250-0003; via e-mail to wo timber sale contract rate 
[email protected]; or via facsimile to 202-205-1045. Comments 
also may be submitted via the World Wide Web/Internet Web site at: 
http://www.regulations.gov. All comments, including names and addresses 
when provided, are placed in the record and are available for public 
inspection and copying. The public may inspect comments received on 
this interim final rule in the office of the Director of Forest and 
Rangeland Management, Third Floor, Northwest Wing, Yates Building, 201 
14th Street, SW., Washington, DC. Visitors are encouraged to call ahead 
to (202) 205-0893 to facilitate entry into the building.

FOR FURTHER INFORMATION CONTACT: Richard Fitzgerald, Forest and 
Rangeland Management, (202) 205-1753.

SUPPLEMENTARY INFORMATION:

Background

    The suspension of a timber sale purchaser's operations because 
administrative appeals or litigation, through no fault of the timber 
purchaser often can result in economic hardship to the purchaser, if 
after a period of time, the timber market decreases substantially. Not 
only may the purchaser face economic loss, but the government can be 
faced with potential claims or additonal litigation relating to the 
delays. When timber markets rise, during the suspension, this problem 
does not occur.
    The regulations at 36 CFR part 223.33 currently provide for a 
stumpage rate redetermination on sales of 7 years duration on a 
predetermined schedule. These regulations also provide for stumpage 
rate redeterminations when a purchaser has diligently performed a 
contract and seeks an extension (36 CFR 223.115) if, at the time of the 
scheduled contract termination, at least 75 percent of the contract 
volume has been removed, and all specified road construction completed. 
However, the current regulations do not give authority to the 
contracting officer to provide for a stumpage rate redetermination to 
reflect changed market conditions when, at no fault of the purchaser, 
an existing timber sale contract was suspended because of 
administrative appeals or litigation. A rate redetermination would 
provide relief for purchasers in this situation.
    Before 1990, very few timber sales were suspended because of 
administrative appeals or litigation. Now, with much less timber volume 
under contract, purchasers have limited opportunities to adjust 
operations to other sales, and thus minimize the economic impact. More 
recently, the suspension of sales has led to increased contract claims 
and litigation for damages resulting from the delays caused by the 
suspension. In the Consolidated Appropriations Act, 2004 (Pub. L. 108-
199), Congress provided economic relief to certain timber contracts in 
Alaska that were sold after 1995, because of changed timber market 
conditions.
    A notice with request for comment on proposed revisions to timber 
sale contract Forms FS-2400-6, for scaled sale procedures, and FS-2400-
6T, for tree measurement sale procedures, was published in the Federal 
Register on December 19, 2003 (68 FR 70758). That notice included a 
proposed contract provision which would provide relief for future 
timber sale purchasers by allowing modification of stumpage rates in 
contracts suspended for more than 90 days, due to administrative 
appeals or environmental litigation. The Forest Service currently is 
considering comments received from the public and anticipates issuing 
the final revised contracts in the near future.

Good Cause Statement

    This interim final rule amends the current regulation at 36 CFR 
223.112 to authorize redetermination of existing contract stumpage 
rates to provide economic relief to timber sale purchasers for 
remaining unharvested volume in timber sales awarded after October 1, 
1995. This rule will authorize

[[Page 18814]]

redetermination of stumpage rates to reflect significant declines in 
timber market conditions during the suspension of timber sales for more 
than 90 days because of administrative appeals or litigation, through 
no fault of the timber purchaser.
    This rule may enable purchasers obtaining stumpage rate 
redeterminations to continue existing contracts after the suspension 
has been lifted. If purchasers continue to lose money on sales, many 
purchasers may go out of business. In the past, timber sale contracts 
have not provided for a stumpage rate redetermination to reflect the 
economic impact on the purchaser because of contract suspensions. 
Authorizing rate redeterminations in limited circumstances results in 
claims and damages that could exceed the cost of providing this relief. 
There are a significant number of timber sale purchasers whose 
contracts have been suspended for more than 90 days due to no fault of 
their own, because of litigation or administrative appeals. These 
purchasers will have the ability to immediately request rate 
redetermination to insure the economic viability of the sale.

Conclusion

    By adoption of this interim final rule, the Chief authorizes 
contracting officers to modify timber sale contracts, at the timber 
sale purchaser's request, to include a rate redetermination when an 
existing timber sale has been suspended for more than 90 days, due to 
administrative appeals or litigation, through no fault of the timber 
purchaser, to reflect significant timber market declines.

Regulatory Certifications

Regulatory Impact

    This interim final rule has been reviewed under USDA procedures and 
Executive Order 12866 on Regulatory Planning and Review. OMB has 
determined that this is not a significant rule. This rule will not have 
an annual effect of $100 million or more on the economy nor adversely 
affect productivity, competition, jobs, the environment, public health 
or safety, nor State or local governments. This rule will not interfere 
with an action taken or planned by another agency nor raise new legal 
or policy issues. 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 interim final rule is not subject to OMB review under Executive 
Order 12866.
    Moreover, this interim final rule has been considered in light of 
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), and it has been 
determined that this rule will not have a significant economic impact 
on a substantial number of small entities. The interim final rule 
imposes no additional requirements on timber purchasers for the purpose 
of contract modifications.

Environmental Impact

    This interim final rule establishes the opportunity to provide 
relief from adverse economic impacts that occur at no fault of a timber 
sale purchaser. 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'' * * * that do not significantly 
affect the quality of the human environment. The agency's preliminary 
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. The intent of this interim final rule is to authorize 
stumpage rate redeterminations for existing sales suspended, at no 
fault of the purchaser, more than 90 days, during the normal operating 
season, as a result of administrative appeals or litigation, through no 
fault of the timber purchaser to reflect significant timber market 
declines. No change in resources on National Forest System (NFS) land 
would occur from implementation of this rule except to defer operations 
on an NFS timber sale. A final determination will be made upon adoption 
of a final rule.

Controlling Paperwork Burdens on the Public

    This interim final rule does not contain any recordkeeping or 
information requirement, as defined in 5 CFR Part 1320, Controlling 
Paperwork Burdens on the Public. In accordance with those rules and the 
Paperwork Reduction Act of 1995, as amended (44 U.S.C. 3501, et seq), 
the Forest Service has not requested emergency approval from the Office 
of Management and Budget for this interim final rule.

Unfunded Mandates Reform

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 
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 interim final rule does not 
compel the expenditure of $100 million or more by any State, local, or 
tribal government, or anyone in the private sector. Therefore, a 
statement under section 202 of the Act is not required.

List of Subjects in 36 CFR Part 223

    Administrative practices and procedures, Exports, Government 
contracts, Forests and forest products, National forests, Reporting and 
recordkeeping requirements.


0
Therefore, for the reasons set forth in the preamble, Title 36 of the 
Code of Federal Regulations, part 223, subpart B, 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. In Sec.  223.112, designate the first paragraph as (a) and add 
paragraph (b) as follows:


Sec.  223.112  Modification of Contracts.

    (a) * * *
    (b) Timber sale contracts awarded after October 1, 1995, that have 
been suspended for more than 90 days, during the normal operating 
season, at no fault of the purchaser, because of administrative appeals 
or litigation, that did not include contract provisions for rate 
redeterminations may be modified at the request of the timber sale 
purchaser to include a rate redetermination for the remaining 
unharvested volume to reflect significant decreases in market value 
during the period of delay. Rates in effect at the time of the 
suspension will be redetermined in accordance with the standard Forest 
Service methods in effect 45 days prior to the rate redetermination.

    Dated: April 2, 2004.
David P. Tenny,
Deputy Under Secretary, Natural Resources and Environment.
[FR Doc. 04-8033 Filed 4-8-04; 8:45 am]
BILLING CODE 3410-11-P