[Federal Register Volume 71, Number 63 (Monday, April 3, 2006)]
[Rules and Regulations]
[Pages 16622-16657]
From the Federal Register Online via the Government Publishing 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 process or additional clarification and direction were
necessary. These specifications were developed to be as clear and
concise as possible, yet provide consistent guidance for appraisers
preparing recreation residence lot appraisals. If the purpose of agency
rule making and developing agency direction and guidelines were to
simply repeat statutory language, then it would serve no purpose at
all. Doing so would only establish unclear and ambiguous rules,
policies, and guidelines, adding confusion and frustration to the
appraisal process. Therefore, where some of the language in CUFFA may
be subject to varying interpretations or applications, the department's
rules and the agency's directives and guidelines serve to further
refine and define that language as needed to preclude inconsistency in
exercising CUFFA's direction and authority.
Section C-2.1(e) of Section 66, Exhibit 03. This section required
that upon request by the government, during the 2-year period following
the date of the appraisal report, the Contractor will update the value
as of a specified date.
Comment. Those who commented suggested that the value of the
typical lot being appraised should be as of the date of the inspection
of that typical lot and it should not change for 2 years. The comments
suggested that CUFFA does not provide for this.
Response. CUFFA is silent regarding the need for an update within a
specified period of time. Generally, the date of value will remain
constant. However, there may be a need to retain this option to
accommodate unforeseen circumstances. For example, if there is severe
timber blow down, fire, or flood, it may be necessary to reappraise the
typical lot affected by the natural disaster to recalculate the fee if
a decision is made to reauthorize the permit. If this occurs, the date
of value may change to reflect the negative impact of the natural
disaster upon the permitted lot.
There were no changes made to this section.
Section C-2.1(g) of Section 66, Exhibit 03. This section references
appropriate places to find the definitions of terms.
Comment. Those who commented on this section suggested that the
language in CUFFA should be included here, as an additional reference
for definitions.
Response. The Forest Service agrees. Section C-2.1(g) will be
modified to read, ``Unless specifically defined herein or in CUFFA
Section 604, USPAP, or UASFLA, definitions of all terms are the same as
those found in ``The Dictionary of Real Estate Appraisal'' (Appraisal
Institute), current edition. UASFLA shall take precedence in any
differences among definitions.''
Section C-2.2(b)(1) of Section 66, Exhibit 03. Item 7 in
this section contained the language ``the adoption of an uninstructed
assumption or hypothetical condition that results in other than `as is'
market value will invalidate the appraisal.''
Comment. This language is unnecessary because the appropriate
prohibitions are already part of the
[[Page 16631]]
appraisal requirements in USPAP and this statement does nothing other
than confuse the appraiser.
Response. The Forest Service disagrees. USPAP allows the appraiser
the latitude to incorporate extraordinary assumptions and/or
hypothetical conditions into the report, as long as it does not produce
a misleading result. This is a different scenario than an ``as is''
market value. Most recreation residence lots cannot be valued in an
``as is'' state because of permit holder provided improvements made to
the lot and direction provided in CUFFA.
There were no changes made to this section.
Section C-2.2(b)(2)(3)(b) of Section 66, Exhibit 03. This section
referenced a ``Neighborhood Map.''
Comment. Use of the term ``neighborhood'' should be avoided, and in
its place, the term ``tract'' should be used. Use of the term
``neighborhood'' leaves the impression that recreation residence tracts
are subdivisions, which perpetuates errors in the selection of
comparable sales. This would be inconsistent with section
606(b)(1)(B)(ii) of CUFFA, which specifically states that a ``* * *
typical lot will not usually be equivalent to a legally subdivided
lot.''
Response. The Forest Service partially agrees. The ``neighborhood
map'' is intended to depict the tract and the surrounding area in order
to provide the user of the appraisal report with perspective of the
property around the recreation residence tract, including major
geographic features, proximity to other uses, water features, access,
and general services. Use of the term ``tract'' would limit this over-
view of the area to only the tract, and would not provide a ``picture''
of the surrounding area. The term ``neighborhood'' has generally been
replaced by ``market area'' which is defined in ``The Dictionary of
Real Estate Appraisal,'' current edition, as ``the geographic or
locational delineation of the market for a specific category of real
estate, i.e., the area in which alternative, similar properties
effectively compete with the subject property in the minds of probable,
potential purchasers and users.'' References to ``neighborhood'' will
be replaced by ``market area.''
Section C-2.2(b)(2)(4)(a) of Section 66, Exhibit 03. This section
referred to timber and commercial value for mineral deposits in
appraisals.
Comment. CUFFA does not allow the Forest Service to establish a
cabin user fee based upon the value of the timber and minerals on a
recreation residence lot. The inclusion of these factors will likely
lead to confusion among appraisers. This section should reference
``timber'' as ``trees,'' and should eliminate all reference to mineral
values.
Response. The Forest Service disagrees. Timber, minerals, and other
resources are elements of value that have potential to impact the value
concluded for an appraised property. The Forest Service appraisal
guidelines confine the highest and best use analysis to use as a
recreation site. The above-referenced property characteristics can only
be reflected in the value opinion as they contribute to the property's
highest and best use; a lot suitable for use as a recreation residence
site.
There were no changes made to this section of exhibit 03.
Section C-2.2(b)(2)(4)(e) of Section 66, Exhibit 03. This section
required the appraiser to cite a ten-year record of the sales of the
appraised property.
Comment. This is directly contrary to the terms of CUFFA and will
mislead appraisers. The sale of the cabin on the typical lot is not the
same as the market value of the typical lot, and should not be used in
establishing the appraised value of a typical lot. It has no bearing on
determining the appraised value of a recreation residence lot.
Response. The cited section specifically states, ``include a ten-
year record of all sales of the appraised property * * *''. The
appraised property is the lot owned by the United States. The ``actual
cabin'' is not owned by the United States and is not the subject of the
appraisal. The appraiser is not required to cite the sale of the
``actual cabin.''
There were no changes made to this section of exhibit 03.
Section C-2.2(b)(2)(4)(f) of Section 66, Exhibit 03. This section
referred to the highest and best use of the lot.
Comment. Highest and best use should not be addressed in this part
of the appraisal specifications. A subsequent definition of ``highest
and best use'' correctly defines it as a recreation residence use, so
why have it in this part of the specifications.
Response. Section C-2.2(b)(2)(4)(f) discusses ``Zoning and Other
Land-Use Restrictions.'' It is important to provide instruction to the
appraiser indicating how these restrictions are to be considered, in
order to ensure consistency. The Analysis of Highest and Best Use
section follows immediately below the cited section and properly
restricts the appraiser's consideration of highest and best use to the
appraised property's suitability use as a recreation residence lot.
There were no changes made to this section of exhibit 03.
4. Regulatory Certifications
Environmental Impact
These directives revise the administrative procedures for
determining market value for recreation residences on National Forest
System lands. Section 31.1b of Forest Service Handbook (FSH) 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 preliminary assessment is
that these final directives fall within this category of actions and
that no extraordinary circumstances exist which would require
preparation of an environmental assessment or environmental impact
statement.
Regulatory Impact
These final directives have been reviewed under USDA procedures and
Executive Order 12866 on Regulatory Planning and Review. OMB has
determined that this is not a significant action. The final directives
would not have an annual effect of $100 million or more on the economy,
or adversely affect productivity, competition, jobs, the environment,
public health or safety, or State or local governments. The final
directives would not interfere with an action taken or planned by
another agency, or raise new legal or direction issues. Finally, these
final directives would not alter the budgetary impacts of entitlements,
grants, or loan programs or the rights and obligations of recipients of
these programs.
No Takings Implications
These final directives have been analyzed in accordance with the
principles and criteria contained in Executive Order 12630. It has been
determined that the final directives do not pose the risk of a taking
of protected private property.
Civil Justice Reform
These final directives have been reviewed under Executive Order
12988, ``Civil Justice Reform''. After adoption of these final
directives, (a) all State and local laws and regulations that conflict
with these final directives or that would impede full implementation
will be preempted; (2) no retroactive effect would be given to these
final directives; and (3) the Department will not require the use of
administrative proceedings before parties may file suit in court
challenging their provisions.
[[Page 16632]]
Unfunded Mandates
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 agency has assessed the effects of these final directives on
State, local, and tribal governments and the private sector. These
final directives would 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.
Federalism and Consultation and Coordination With Indian Tribal
Governments
The agency has considered these final directives under the
requirements of Executive Order 13132 on federalism, and has made an
assessment that the final directives conform with the federalism
principles set out in this Executive order; would not impose any
compliance costs on the States; and would not have substantial direct
effects on the States, on the relationship between the Federal
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, the
agency has determined that no further assessment of federalism
implications is necessary at this time.
Moreover, these final directives do not have tribal implications as
defined by Executive Order 13175, ``Consultation and Coordination with
Indian Tribal Governments'', and, therefore, advance consultation with
tribes is not required.
Energy Effects
These final directives have been reviewed under Executive Order
13211 of May 18, 2001, ``Actions Concerning Regulations That
Significantly Affect Energy Supply.'' It has been determined that these
final directives do not constitute a significant energy action as
defined in the Executive order.
Controlling Paperwork Burdens on the Public
The information collection associated with the permitting and
administration of recreation residences are covered under the approved
Office of Management and Budget (OMB) control number 0596-0082.
However, as provided by Section 614 of the Cabin User Fee Fairness Act
of 2000 ((CUFFA) 16 U.S.C. 6210-13) the final directive does contain a
new one-time information collection requirement in FSH 2709.11,
Sec. Sec. 33.8 through 33.83. Accordingly, the review provisions of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and its
implementing regulations at 5 CFR part 1320 do apply. Approval of this
information collection requirement has been submitted for approval to
the OMB. The agency expects the new information collection requirement
required by CUFFA to be approved by OMB prior to implementation of the
provisions in sections 33.8-33.83.
Dated: January 4, 2006.
Dale N. Bosworth,
Chief.
5. Text of Final Directives
Note: The Forest Service organizes its Directive System by
alphanumeric codes and subject headings. Only those sections of the
Forest Service Manual and Handbook that are the subject of this
notice are set out here. The intended audience for this direction is
Forest Service employees charged with issuing and administering
recreation residence special use authorizations.
Forest Service Manual
Chapter 2340--Privately Provided Recreation Opportunities
2340.5--Definitions.
* * * * *
Caretaker Cabin. A residence that is authorized in limited cases to
provide caretaker services and security to a recreation residence
tract.
* * * * *
2347.1--Recreation Residences. (For further direction, see FSM
2721.23 and FSH 2709.11.) Recreation residences are a valid use of
National Forest System lands. They provide a unique recreation
experience to a large number of owners of recreation residences, their
families, and guests. To the maximum extent practicable, the recreation
residence program shall be managed to preserve the opportunity it
provides for individual and family-oriented recreation. It is Forest
Service direction to continue recreation residence use and to work in
partnership with holders of these permits to maximize the recreational
benefits of recreation residences.
* * * * *
7. Authorize community- or association-owned and maintained
improvements under a separate permit and authority appropriate for that
use (see FSH 2709.11, sec. 33.05, definition of ``related
improvements'' and FSM 2721.23c, para. 3.)
* * * * *
2347.12--Caretaker Cabins.
2347.12a--Permits.
1. Authorize caretaker cabin use of a recreation residence lot with
an annual permit, Form FS-2700-4, under the Organic Act (16 U.S.C.
551). Require applicants who have a recreation residence permit (Form
FS-2700-5a) to relinquish that permit as a condition of qualifying for
a caretaker cabin permit. A caretaker cabin may be owned by a tract
association, and the permit may be issued in the name of the head of
that association.
2. Coordinate applications for caretaker cabin permits with local
governmental agencies to avoid creating unreasonable demands for public
services such as snow plowing, mail delivery, garbage pickup, school
bus services, or emergency services.
3. If a recreation residence ceases to be used as a caretaker
cabin, the holder of the caretaker cabin permit may apply for and, if
qualified, be issued a recreation residence permit.
2347.12b--Caretaker Cabin Use. The need for a caretaker cabin can
rarely be justified where yearlong occupancy is already authorized in
the tract. The Forest Supervisor may authorize a caretaker cabin in
limited cases where it is demonstrated that caretaker services are
needed for the security of a recreation residence tract and alternative
security measures are not feasible or reasonably available. The base
cabin user fee for a caretaker cabin permit shall not exceed the base
cabin user fee charged for the use of the lot as a recreation
residence. That fee shall be determined as follows:
1. The base cabin user fee for a caretaker cabin located in a
recreation residence tract shall not exceed the base cabin user fee for
a similar typical lot in that tract (see FSH 2709.11, section 30.05,
for definitions of ``base cabin user fee'' and ``typical lot'').
2. When a caretaker cabin is not located in a recreation residence
tract, the base cabin user fee for the caretaker cabin shall not exceed
the base cabin user fee for a similar typical lot in the recreation
residence tract being monitored by the caretaker cabin permit holder
(see FSH 2709.11, section 30.05, for definitions of ``base cabin user
fee'' and ``typical lot'').
* * * * *
Chapter 2720--Special Uses Administration
* * * * *
2721.23--Recreation Residences.
* * * * *
2721.23d--Fee Determination.
1. Use market value as determined by appraisal in determining the
base annual fees for recreation residence lots. Determine a new base
fee at 10-year intervals.
[[Page 16633]]
Forest Service Handbook (FSH) 2709.11--Special Uses Handbook
Chapter 30--Fee Determination
* * * * *
33--Recreation Residence Lot Fees. Recreation residence lot fees
shall be assessed and paid annually.
33.05--Definitions.
Cabin. A privately built and owned recreation residence that is
authorized to use and occupy National Forest System land.
Majority. More than 50 percent.
Market Value. The amount in cash, or on terms reasonably equivalent
to cash, for which in all probability the property would have sold on
the effective date of the appraisal, after a reasonable exposure time
on the open competitive market, from a willing and reasonably
knowledgeable seller to a willing and reasonably knowledgeable buyer,
with neither acting under any compulsion to buy or sell, giving due
consideration to all available economic uses of the property at the
time of the appraisal.
Natural, Native State. The condition of a lot or site, free of any
improvements, at the time at which the lot or site was first authorized
for recreation residence use by the Forest Service.
Recreation Residence. A privately owned, noncommercial residence
located upon National Forest System lands and authorized by a
recreation residence term special use permit. A recreation residence is
maintained by the permit holder for personal, family, and guest use and
enjoyment. A recreation residence shall not serve as a permanent
residence.
Recreation residence lot. (For this definition, see 36 CFR 251.51.)
Related Improvements.
a. 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, but are not limited to, the following
holder owned facilities or uses of National Forest System lands being
actively operated and maintained by the holder in conjunction with the
recreation residence use:
(1) Outbuildings;
(2) Wood piles;
(3) Retaining walls;
(4) Picnic tables;
(5) Driveways and parking areas;
(6) Trails and boardwalks;
(7) Campfire rings, seats, and benches.
(8) Lawns, gardens, flower beds, and landscaped terraces;
(9) Manipulated native vegetation, except as provided for in
paragraph b(1).
b. Related improvements do not include:
(1) Native vegetation that is manipulated 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.
(2) Tract association- or community-owned improvements or uses,
such as boat docks, swimming areas, and water or sewer systems that are
under a separate authorization issued in the name of a tract
association or other entity representing the owners of the recreation
residences.
Term Permit. (For this definition, see 36 CFR 251.51 and FSM 2705.)
Tract. An established location within a National Forest containing
one or more cabins authorized in accordance with the recreation
residence program.
Typical Lot. A recreation residence lot in a tract that is selected
for appraisal purposes as being representative of value characteristics
similar to other recreation residence lots within the tract. All
recreation residence lots represented by a typical lot shall be
characterized as a group for appraisal purposes. A tract may have one
or more groups of lots, with each group represented by a typical lot. A
typical lot may be the only recreation residence lot in a group, and
may be appraised to represent only itself, when it has unique value
characteristics unlike any other recreation residence lot in a tract.
Urban. A mature neighborhood with a concentration of population
typically found within city limits or a neighborhood commonly
identified with a city (The Dictionary of Real Estate Appraisal, Fourth
Edition).
33.1--Base Fees and Annual Adjustments.
33.11--Establishing New Base Fee.
1. Base Fee. The base fee for a recreation residence special use
permit shall be equal to 5 percent of the market value of the
recreation residence lot as determined by appraisal. The base fee shall
be recalculated at least once every 10 years.
2. Notification of New Base Fee. The authorized officer shall
notify the holder in writing at least one (1) year in advance of
implementation that a new base fee has been determined by appraisal
conducted in accordance with procedures contained in section 33.4 of
this Handbook. If a second appraisal, secured by the holder (sec. 33.7)
and approved by the agency, prompts the authorized officer to
reconsider the new base fee amount, the revision to the base fee may be
implemented at any time after the end of the one-year period following
the initial notification.
3. Effective Date of New Base Fee. The date of a billing for
payment of a new base fee, or the date of a billing for the first
payment of a phase-in amount (sec. 33.12) of a new base fee, shall
constitute the date of implementation of the new base fee.
33.12--Phase-in of Base Fee. Require the holder to pay the full
amount of a new base fee if that new base fee results in an increase of
100 percent or less from the amount of the most recent annual fee
assessed the holder.
When the new base fee is greater than a 100 percent increase from
the amount of the most recent annual fee assessed the holder, implement
the new base fee increase in three (3) equal increments over a 3-year
period. Annual adjustments (sec. 33.13) shall be included in the
calculation of fees that are incrementally phased-in over the 3-year
period. Exhibit 01 illustrates the manner in which a new base fee would
be phased-in when the new base fee results in an increase of more than
100 percent from the most recent annual fee assessed the holder.
33.12--Exhibit 01.
Phase-in When New Base Fee Results in an Increase of More Than 100
Percent From the Most Recent Annual Fee Assessed the Holder
------------------------------------------------------------------------
2008 New base
2007 Fee amount fee Increase
------------------------------------------------------------------------
$700 $1,600 $900 (>100%
increase).
------------------------------------------------------------------------
2008 Phase-in Fee: $700 (2007 fee) + $300 (\1/3\ of fee increase >100%)
= $1,000.
2004 Phase-in Fee: $1,000 (2008 fee) + $300 (\1/3\ of fee increase
>100%) x 1.03* (annual IPD-GNP increase of 3%) = $1,339.
[[Page 16634]]
2010 Phase-in Fee: $1,339 (2009 fee) + $300 (\1/3\ of fee increase
>100%) x 1.03* (annual IPD-GNP increase of 3%) = $1,688.
2011 Phase-in Fee: $1,688 (2010 fee) x 1.03* (annual IPD-GNP increase of
3%) = $1,739.
------------------------------------------------------------------------
* 3% annual IPD-GNP adjustment is used for illustrative purposes only.
The actual annual IPD-GNP rate would be used for each of the phase-in
amounts in years 2009 through 2011.
33.13--Annual Adjustment of Recreation Residence Fee. Recreation
residence fees shall be adjusted annually using the 2nd quarter to 2nd
quarter change in the Implicit Price Deflator, Gross National Product
(IPD-GNP).
An annual adjustment to the base fee shall be no more than 5
percent in any single year. When the annual change to the IPD-GNP
results in an annual adjustment of more than 5 percent, apply the
amount of the adjustment in excess of 5 percent to the annual fee
payment for the next year in which the change in the index factor is
less than 5 percent. Exhibit 01 provides two examples on how annual
fees are adjusted in years during which the annual change in the IPD-
GNP index exceeds 5 percent.
33.13--Exhibit 01.
Phase-in of Fees When Increase Exceeds 5 Percent in a Single Year
EXAMPLE 1--Only 1 year in which the IPD-GNP adjustment exceeds 5%:
2007 Fee = $700
2008 IPD-GNP adjustment = 7%*
($700 x .07 = $49)
Maximum adjustment/year = 5% ($35)
2008 carryover adjustment = 2% ($14)
2008 Fee = $700 (2004 fee) x .05 (max. adj/yr.) = $735
2009 IPD-GNP adjustment = 3%*
Carryover adjustment from 2008 = $14
2009 Fee = $735 (2008 fee) + $14 (2008 carryover) x 1.03 = $771
EXAMPLE 2--Multiple-year IPD-GNP adjustments exceeding 5%.
2007 Fee = $700
2008 IPD-GNP adjustment = 7%*
($700 x .07 = $49)
Maximum adjustment/year = 5% ($35)
2008 carryover adjustment = 2% ($14)
2008 Fee = $700 (2007 fee) x 1.05 (max. adj/yr.) = $735
2009 IPD-GNP adjustment = 7%*
($735 x .07 = $51)
Maximum adjustment/year = 5% ($37)
2009 carryover adjustment = 2% ($14)
Total carryover (2008 & 2009) = $28
2009 Fee = $735 (2008 fee) x 1.05 (max. adj/yr.) = $772
2010 IPD-GNP adjustment = 3%* (2 (above) shall be assessed as a premium fee amount,
payable in full or in three (3) equal annual installments, in
addition to the phase-in of the new base user fee established by the
results of the new appraisal.
The authorized officer shall, upon receipt of a formal request,
initiate a new appraisal of the typical lot in accordance with the
regulations, policies, and appraisal guidelines adopted pursuant to
CUFFA. The date of value of the new appraisal shall be the same date of
value as that identified in the appraisal report it is intended to
replace.
[[Page 16639]]
33.83--Request for Peer Review Conducted Under Regulations,
Policies, and Appraisal Guidelines Established Pursuant to CUFFA.
A request for a peer review of an existing appraisal report
completed after September 30, 1995, shall be made within 2 years
following the adoption of regulations, policies, and appraisal
guidelines for recreation residences pursuant to CUFFA. The request
shall be submitted in writing to the authorized officer and must be
signed by a majority of the recreation residence holders within the
group of recreation residence lots represented by the typical lot that
was appraised. The holders requesting the peer review shall, in their
request, agree to collectively pay for one-half the cost to commission
the review. In addition, holders requesting a peer review where the
appraisal to be reviewed established a base fee that was more than a
$3,000 annual increase to the fee being assessed the holders on October
1, 1996, shall include the statement contained in exhibit 01 as a part
of their request. The information required in the statement will be
provided to the holder by the authorized officer.
33.83--Exhibit 01.
Statement for Holders Requesting Peer Review When Previous
Appraisal Indicated a Base Fee Increase of More Than $3,000 from Annual
Fee Assessed on October 1, 1996.
We hereby agree that, if the new base fee from the peer review
results in an amount that is 90 percent or more of the fee
determined by the previously completed appraisal of this typical lot
(specifically, that appraisal dated --------, with an estimated fee
simple value of $ --------, and an indicated annual fee of $ ------
--), then each of the permit holders within this group of recreation
residence (indicate tract name and lots) shall be obligated to pay
to the United States the following:
1. The base fee that shall be established pursuant to this peer
review, subject to the phase-in provisions of section 609 of CUFFA;
and
2. The difference between (a) the annual fee that was paid
during calendar years --------, -------- , -------- (enter each
calendar year beginning with that year when a new base fee based
upon the above-referenced appraisal would have otherwise been
implemented), and ending with calendar year -------- (insert the
calendar year in which the request for a peer review is made), and
(b) the amount that the annual fee for each of those identified
calendar years would otherwise have been, had a new base fee been
assessed as a result of the above-referenced appraisal, pursuant to
the phase-in provisions in effect and applicable during that time.
This difference for those calendar years cumulatively totals $ ----
----, as itemized on the enclosed worksheet (enter the cumulative
difference, and include an attached worksheet showing how it was
calculated, itemized for each of the calendar years identified
above). We agree that the cumulative amount identified in Item
2 (above) will be assessed as a premium fee amount, payable
in full or in three (3) equal annual installments, in addition to
the phase-in of the new base user fee established by the results of
the peer review.
The authorized officer shall commission a peer review of the
existing appraisal report upon receipt of a written request to do so
and upon submission of the appropriate documentation that shows that
the request is being made by a majority of the holders affected. The
manner in which the peer review is conducted shall be based upon the
membership in a professional organization of the appraiser who
conducted that appraisal as follows:
1. Appraisals Prepared by an Appraiser Who Is a Member of a Single
Appraisal Sponsor Organization of the Appraisal Foundation. If the
appraiser who prepared the appraisal report that will be reviewed is a
member of a single appraisal sponsor organization of the Appraisal
Foundation, the authorized officer shall submit the appraisal report,
appraisal review report, and peer review report instructions to that
appraisal sponsor organization for assignment to a member of an
established panel of accredited or designated members selected by the
sponsor organization for the purpose of peer review. In consultation
with the accredited or designated panel member, the sponsor
organization shall provide the authorized officer an estimate of total
cost for the peer review. The authorized officer shall consult with a
representative of the permit holders requesting the peer review to
determine if the holders wish to proceed with the review, based on the
estimated cost. If a peer review is conducted, the review report shall
be prepared in compliance with the review instructions provided with
the existing appraisal report. The peer review report shall be confined
to an evaluation of whether the original appraisal report includes
provisions or procedures that were implemented or conducted in a manner
that is inconsistent with regulations, policies, or appraisal
guidelines adopted pursuant to CUFFA and, if so, which provisions and
to what effect. The peer review report is intended to be an
administrative review report in conformance with the USPAP.
2. Appraisals Prepared by an Appraiser Who Is Not a Member of a
Sponsor Organization, or Is a Member of Two or More Sponsor
Organizations of the Appraisal Foundation. If the appraiser who
prepared the appraisal report that will be reviewed is not a member of
a sponsor organization of the Appraisal Foundation, or is a member of
two or more sponsor organizations of the Appraisal Foundation, the
authorized officer shall submit the appraisal report, appraisal review
report, and peer review report instructions, after consultation with
the requesting permit holders, to a sponsor organization that has
established a panel for peer review of recreation residence lot
appraisals. If the authorized officer and a majority of the requesting
permit holders cannot agree on which sponsor organization to solicit
for the peer review, the authorized officer shall make the decision
based upon a recommendation from the Regional Appraiser. The authorized
officer shall request the selected appraisal sponsor organization to
assign a member of the established panel of accredited or designated
members to conduct the peer review. The authorized officer shall also
request the sponsor organization to provide the authorized officer, in
consultation with the accredited or designated panel member, an
estimate of total cost for the peer review. The authorized officer
shall consult with a representative of the requesting permit holders to
determine if the holders want to proceed with the review, based on the
estimated costs. If a peer review is conducted, the review report shall
be prepared in compliance with the review instructions provided with
the existing appraisal report. The peer review report shall be confined
to evaluation of whether the original appraisal report includes
provisions or procedures that were implemented or conducted in a manner
that is inconsistent with regulations, policies, or appraisal
guidelines adopted pursuant to CUFFA and, if so, which provisions and
to what effect. The peer review report is intended to be an
administrative review report in conformance with the USPAP.
a. If the peer review shows that the appraisal report is consistent
with the regulations, policies, and appraisal guidelines adopted
pursuant to CUFFA, the authorized officer shall establish a new base
fee using 5 percent of the fee simple value of the typical lot
identified in the appraisal report.
b. If the peer review results in a determination that the appraisal
report was not conducted in a manner consistent with the regulations,
policies, and appraisal guidelines adopted pursuant to CUFFA, the
authorized officer shall either:
(1) Establish a new base fee to reflect consistency with the
regulations,
[[Page 16640]]
policies, and appraisal guidelines adopted pursuant to CUFFA, or
(2) Conduct a new appraisal in accordance with the provisions of
CUFFA if requested by a majority of the affected holders.
* * * * *
FSH 5409.12--Appraisal Handbook
Chapter 60--Appraisal Contracting
65--Contract Appraisals for Special Purposes.
65.3--Recreation Residence Lots.
The standard specifications for recreation residence lot appraisals
shall be used Service-wide (sec. 66, ex. 03). Do not modify or deviate
from these specifications without the approval of the Washington
Office, Director of Lands.
Require all appraisers conducting a second appraisal for a
recreation residence lot to submit an Assignment Agreement (sec. 66,
ex. 04).
66--Exhibits.
1. Exhibit 03--Basic Specifications for the Appraisal of Recreation
Residence Lots.
2. Exhibit 04--Assignment Agreement for the Appraisal of Recreation
Residence Lots.
BILLING CODE 3410-11-P
[[Page 16641]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.000
[[Page 16642]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.001
[[Page 16643]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.002
[[Page 16644]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.003
[[Page 16645]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.004
[[Page 16646]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.005
[[Page 16647]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.006
[[Page 16648]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.007
[[Page 16649]]
[GRAPHIC] [TIFF OMITTED] TR03AP06.008
[[Page 16650]]
Note: The following table will not appear in the Forest Service
Manual or Forest Service Handbook.
Table I.--Section-by-Section Comparison Between the Proposed and Final Recreation Residence Directives
----------------------------------------------------------------------------------------------------------------
Forest Service manual
CUFFA reference or handbook directive Proposed direction Final direction
----------------------------------------------------------------------------------------------------------------
Section 604.......................... FSM 2340.5--Definitions Added definition for Revises the definition
``caretaker cabin.'' A of ``caretaker cabin''
caretaker cabin is a to more closely
residence occupying a reflect the
lot within a description in CUFFA.
recreation residence
tract that is being
used to provide
caretaker services and
security to the
recreation residences
within that tract.
Section 602 and 603.................. FSM 2347.1--Recreation Maintained existing No changes except to
Residences. language of old add direction that
directive, but added community owned
direction that the improvements are to be
Forest Service shall, authorized under
to the maximum extent separate permit and
practicable, manage authority.
the recreation
residence program to
preserve the
opportunity for
individual and family-
oriented recreation.
Sections 604 and 607(b).............. FSM 2347.12--Caretaker Changed section caption Revised to clarity and
Cabin. to ``Caretaker for purposes of using
Cabins,'' and retained the terminology in the
direction for corresponding
authorizing a provisions in CUFFA.
caretaker cabin. FSM
2347.12b provided that
a fee for a caretaker
cabin is the same as a
fee for use of the
same lot as a
recreation residence.
Section 606.......................... FSM 2721.23d--Fee Established a 10-year No changes in final
Determination. appraisal cycle. directive.
FSH 2709.11, Section Changed caption to No changes in final
33--Recreation ``Recreation Residence directive.
Residence Lot Fees. Lot Fees.''
Section 604.......................... FSH 2709.11, Section Added a section that Revises definitions for
33.05--Definitions. defines ``cabin,'' ``cabin,''
``recreation residence ``recreation
lot,'' ``market residence,'' and
value,'' ``tract,'' ``simple majority.''
``typical lot,'' Adds definition of
``recreation ``urban'' used in
residence,'' and section 33.4.
``natural, native
state.''
Sections 606 through 608............. FSH 2709.11, Section Changed the caption to No changes in final
33.1--Base Fees and ``Base Fees and Annual directive.
Annual Adjustments. Adjustments,'' and
referenced appraisal
procedures addressed
in proposed sections
33.11 through 33.13.
Sections 606(b)(4)(D) and 607(a)..... FSH 2709.11, Section This section replaced No changes in final
33.11--Establishing the now obsolete directive, except for
New Base Fee. direction concerning numbering and titling
fee credit, and of paragraphs.
instead provides that
the base fee for a
recreation residence
lot shall be 5 percent
of the market value of
the lot as determined
by appraisal. It
eliminated direction
(currently found in
sec. 33.1, para. 5)
directing that a
premium of 25 percent
of the base fee or
$100 whichever is
greater, be added to
the base fee for each
sleeping structure on
a recreation residence
(in addition to the
recreation residence).
This section also
provided that the base
fee shall be
recalculated once
every 10 years.
[[Page 16651]]
Section 609.......................... FSH 2709.11, Section This new section No changes in final
33.12--Phase-in of provided direction for directive, except to
Base Fee. implementing the phase- make the phase-in
in provision of CUFFA, example an exhibit.
and directed a phase-
in of fees whenever
the establishment of a
new base fee results
in an increase of more
than 100 percent to a
holder's most recent
annual fee. The
section included an
example to demonstrate
how the phase-in would
be applied when a base
fee results in more
than a 100 percent
increase of an annual
fee.
FSH 2709.11, Section Stated that the Forest No changes in final
33.13--Annual Service would continue directive, except to
Adjustments of to use existing make the phase-in
Recreation Residence direction for annually examples exhibits.
Fees. indexing recreation
residence rental fees,
using the 2nd quarter
to 2nd quarter change
in the IPD-GNP.
However, this section
directed the
implementation of a
maximum adjustment of
5 percent in those
years in which the
annual change in the
IPD-GNP index exceeds
5 percent, as provided
in section 608(d) of
CUFFA. Whenever the
annualized change in
the IPD-GNP exceeds 5
percent, then the
maximum annual
adjustment in the
rental fee for such
years will be 5
percent, and that part
of the adjustment in
excess of 5 percent
would be applied in
the next annual rental
fee payment when the
index change is less
than 5 percent. This
section included two
examples to
demonstrate how rental
fee increases in
excess of 5 percent
would be applied when
the annualized change
in the IPD-GNP exceeds
5 percent.
(Note: Approximately 2
years after adopting
the proposed rule and
proposed directives in
this notice, the
Forest Service will
develop direction to
annually adjust
recreation residence
rental fees using the
rolling 5-year average
of the ``Index of
Agriculture Land
Prices'' published by
the Department of
Agriculture, as
directed in section of
608(a) and (b) of
CUFFA).
[[Page 16652]]
Section 607(c) and (d)............... FSH 2709.11, Section This section clarified No changes in final
33.2--Fees When direction on fees when directive, except to
Determination is Made a decision is made to make the phase-in
To Place Recreation discontinue the chart for fees when a
Residence on Tenure. recreation residence recreation residence
use by providing is placed on tenure an
specific instructions exhibit.
for the assessment of
land use fees after a
holder has been
provided with a
minimum 10 years of
advance notice of the
agency's decision to
discontinue the
holder's recreation
residence use. The
proposed directive
included a table that
demonstrated how the
fee is reduced by 10
percent each year
during the last 10
years of the permit
term. This section
also provided a
process for
recapturing fees that
were forgone, should a
subsequent decision be
made by the agency not
to discontinue the
recreation use, but
allow it to continue.
Section 607(e)....................... FSH 2709.11, Section This section provided No changes in final
33.3--Fee When agency direction directive.
Recreation Residence concerning fee
Use Is Terminated or obligations of the
Revoked as Result of holder in the event of
Acts of God or other a catastrophe or an
Catastrophic Events. ``act of God'' that
precluded the
recreation residence
from being safely used
and occupied for
recreation residence
purposes. It directed
that in such an event,
the fee obligations of
the holder shall
terminate as of the
date of the event or
occurrence, and
provided for a refund
of a prorated portion
of the fee that has
already been paid for
the billing year in
which the catastrophic
event occurred.
Section 606.......................... FSH 2709.11, Section This section provided Changes the numeric
33.4--Establishing technical coding of the section
Market Value of considerations and the and exhibits from a
Recreation Residence procedures to be single digit scheme to
Lot. followed when a two digit scheme
appraising a (sec. 66) to conform
recreation residence with other sections in
lot. FSH 5409.12, chapter
60. The exhibits for
recreation residences
are now enumerated as
ex. 03 (previously ex.
06) and ex. 04
(previously ex. 07)
respectively.
Paragraph 1 directed Clarifies in paragraph
that appraisals be 1 that the authorized
conducted by either a offer, based on the
staff or contract advice of the assigned
appraiser who is Forest Service review
licensed to practice appraiser, is the only
in the State in which person authorized to
the recreation make adjustments to
residence(s) to be fees where there may
appraised are located. be a measurable
It directed that the difference among
selection of a staff recreation residence
or contract appraiser lots within a grouping
be based on the of lots.
individual's having
had adequate training
and demonstrated
competence to conduct
the appraisal
assignment. It also
directed that the
appraiser sign an
``Assignment
Agreement'' as
provided in FSH
5409.12, section 6.9,
exhibit 07 (see below).
[[Page 16653]]
Paragraph 2 directed There are no other
that the appraiser changes in paragraphs
evaluate the market 2 through 9 in this
value of the fee section.
simple estate of the
lot, and that the
access, utilities, and
facilities that
service the lot to be
appraised that had
been paid for by
either the Forest
Service or a third
party, be included as
features of the lot.
Paragraph 3 directed
that only previously
selected typical lots
be appraised pursuant
to section 33.41.
Paragraph 4 directed
that the authorized
officer provide the
appraiser with an
inventory of
utilities, access, and
facilities servicing
each typical lot to be
appraised as provided
in section 33.42.
Paragraph 5 included an
itemized listing of
the standards and
provisions for which
compliance is required
in conducting and
preparing the
appraisal.
Paragraphs 6 and 7
provided direction for
identifying and
selecting sales of
comparable land in
appraising the value
of a typical lot.
Paragraph 8 included a
listing of typical
value influences that
the appraiser must
consider in adjusting
the prices of
comparable sales in
the appraisal of a
typical lot.
Paragraph 9 directed
that the authorized
officer and the
appraiser initiate a
meeting with all
affected permit
holders prior to
conducting an
appraisal, specified
how to notify the
holders of such a
meeting, and what to
advise the holders at
the meeting. This
paragraph also
directed the appraiser
to give affected
holders advance of
notice of the
appraiser's field
visit to the
recreation residence
(or lots) being
appraised, and that
the holders be given
the opportunity to be
present during that
lot visit.
Section 606.......................... FSH 2709.11, Section This section proposed a No major revisions
33.41--Selection and more detailed process except to add
Appraisal of Typical than previous provisions allowing
Lot. direction for the authorized officer
identifying and to consider three
selecting typical options when lots
lots, with strong within a grouping of
emphasis on working lots are not
with the affected comparable to the
holders in the typical lot
selection of a typical representing that
lot or lots. group with respect to
Authorized officers facilities, utilities,
were directed to seek and access serving the
the concurrence of typical lot
affected permit
holders in identifying
recreation residence
groupings and in
selecting the typical
lot or lots to be
appraised.
[[Page 16654]]
Section 606(a)(1).................... FSH 2709.11, Section This section directed The caption for section
33.42--Inventorying of the authorized officer 33.42a is changed from
Utilities, Access and to identify and ``Utilities Provided
Facilities. inventory utilities, by Holder'' to ``Types
access, and facilities of Utilities, Access,
that provide service and Facilities to
to each typical lot Include in
within a recreation Inventories'' and
residence tract. It provides examples of
also provided criteria the types of utilities
or guidelines for the that should be
authorized officer to considered in the
use in making a inventory of a typical
determination as to lot. The direction
who paid for the previously found in
capital costs to section 33.42a is
construct those revised and moved to
utilities, access, and section 33.42b, para.
other facilities 1.
servicing each typical The caption for section
lot. 33.42b has been
changed from
``Utilities Provided
by the Forest Service
or Third Party'' to
``Criteria To Be
Considered in
Determining Who Paid
for Capital Cost of
Inventoried Utilities,
Access, and
Facilities.'' The
direction in section
33.42b is revised to
clarify through
examples, criteria for
determining who paid
for the capital costs
of inventoried
utilities, access and
facilities; and that
the Forest Service is
responsible for
obtaining that
evidence.
Section 606.......................... FSH 2709.11, Section This section made No changes in final
33.5--Appraisal reference to FSH directive.
Specifications. 5409.12, section 6.5;
section 6.9, exhibit
06, Specifications for
Conducting an
Appraisal for
Recreation Residences;
and section 6.9
exhibit 07, Assignment
Agreement for the
Appraisal of
Recreation Residence
Lots.
Section 606.......................... FSH 2709.11, Section This section provided No changes in final
33.6--Review and direction concerning directive.
Acceptance of the manner in which a
Appraisal Report. Forest Service Review
Appraiser shall review
an appraisal report
and approve it for the
authorized officer's
acceptance and use in
establishing a new
base fee.
Section 610(a)....................... FSH 2709.11, Section This section provided Section 33.7 was
33.7--Holder more detailed revised to clarify
Notification of direction concerning that the holder shall
Accepted Appraisal the authorized be provided a copy of
Report and Right of officer's obligation the appraisal report
Second Appraisal. to notify the affected and supporting
holder or holders of documentation
the agency's associated with the
acceptance of an typical lot upon which
appraisal report for the holder's fee is
the purpose of based.
establishing a new
base fee. It directed
that if the holder
intends to secure a
second appraisal, the
holder must formally
notify the Forest
Service of that intent
within 60 days. This
direction also
provided that if the
holder chooses to
exercise the option to
secure a second
appraisal, the holder
must provide the
authorized officer
with a second
appraisal report
within one year of the
date of the holder's
receipt of the notice
from the authorized
officer.
[[Page 16655]]
Section 610(b)....................... FSH 2709.11, Section This section proposed Section 33.71b,
33.71--Standards for more detailed Appraisal guidelines,
Second Appraisal. direction concerning has been rewritten to
the qualifications of more clearly
an appraiser selected articulate its purpose
by the holder to and explain how the
conduct a second procedures provided
appraisal, and the for in this section
standards that must be are in conformance
followed for with USPAP.
conducting a second
appraisal. The
direction proposed
that the second
appraiser also sign an
Assignment Agreement,
pursuant to FSH
5409.12, section 6.9,
exhibit 07.
Section 610(c) and (d)............... FSH 2709.11, Section This section provided This section was
33.72--Reconsideration detailed, time certain revised to clarify
of Recreation procedures, for the that the authorized
Residence Base Fee. reconsideration of a officer may only
new base fee pursuant consider the second
to a second appraisal. appraisal report if it
It directed that the is reviewed and
holder shall be approved by the
provided with no more assigned Forest
than 60 days following Service review
the authorized appraiser and to add
officer's receipt of a the requirement that
second appraisal the authorized officer
report, within which shall review the
to formally request a material differences
reconsideration of the in fact or opinion in
new base fee, based on establishing a new
the findings of the base fee.
second appraisal. It
also directed that the
authorized officer,
within 60 days
following receipt of
that request from the
holder, review the
agency's initial
appraisal and the
holder's second
appraisal, and
established a new base
fee pursuant to the
results of either
appraisal, or
somewhere within the
range of values
established by both
appraisals.
Section 614.......................... FSH 2709.11, Section This section required Clarifies that the
33.8--Establishing the authorized officer options described in
Recreation Residence to notify recreation paragraphs 1 through
Lot Value During residence permit 3, and explained in
Transition Period of holders that when the further detail in
Cabin User Fee agency adopts final section 33.81 through
Fairness Act. regulations, policies, 33.83, are the only
and appraisal means by which a new
guidelines pursuant to base cabin user fee is
CUFFA they may request established during
either: (1) A new transition period for
appraisal; (2) a peer those lots which were
review of an exiting appraised between
appraisal completed September 30, 1995 and
after September 30, October 11, 2000. Also
1995; or (3) a base clarifies that holders
fee using the value who request a new
established by an appraisal or the
appraisal completed commissioning of a
after September 30, peer review will not
1995. have the right to
request a second
appraisal as provided
for in section 33.7.
Section 614.......................... FSH 2709.11, Section This section provided No changes in final
33.81--Use of direction for directive.
Appraisal Completed situations in which an
After September 30, appraisal completed
1995. after September 30,
1995, would be used to
establish a new base
fee.
Section 614.......................... FSH 2709.11, Section This section provided No changes in final
33.82--Request for New guidance and directive, except to
Appraisal conducted procedures for make the form for
under Regulations, requesting a new holders requesting a
Policies, and appraisal conducted new appraisal when the
Appraisal Guidelines under regulations, previous appraisal
Established Pursuant policies, and indicated a base fee
to CUFFA. appraisal guidelines increase of more than
established pursuant $3,000 from annual fee
to CUFFA. assessed on October 1,
1996, and exhibit.
[[Page 16656]]
Section 614.......................... FSH 2709.11 Section This section provided No changes in final
33.83--Request for guidance and directive, except to
Peer Review Conducted procedures for make the form for
under Regulations, requesting a peer holders requesting a
Policies, and review conducted under new appraisal when a
Appraisal Guidelines regulations, policies, previous appraisal
Established Pursuant and appraisal indicated a fee
to CUFFA. guidelines established increase of more than
pursuant to CUFFA. $3,000 from annual fee
assessed on October 1,
1996, an exhibit.
Section 606.......................... FSH 5409.12, Section This section revised This section containing
6.53--Recreation appraisal contracting exhibits 06 and 07 was
Residence Lots. direction by replacing recorded to a two
use of the current digit coding scheme
terminology for (sec. 66) to conform
appraising it to the other
``Recreation Residence sections in FSH
Sites'' to 5409.12, chapter 60.
``Recreation Residence The exhibits for
Lots,'' to be recreation residences
consistent with the are now enumerated as
terminology used in ex. 03 (previously ex.
CUFFA. This section 06) and ex. 04
also directed that the (previously ex. 07)
appraisal guidelines respectively.
for recreation
residence lots,
included in FSH
5409.12, section 6.9,
exhibit 06, Required
Specifications for
Appraisal of
Recreation Residence
Lots, be used agency-
wide, and that they
can not be modified
without the approval
of the Director of
lands. The section
required that the
appraiser execute an
Assignment Agreement,
as provided in FSH
5409.12, section 6.9,
exhibit 07.
Section 606.......................... FSH 5409.12, Section This section revised As appropriate,
6.9--Exhibit 06. exhibit 06, which replaces the term
contains all the ``site'' with ``lot''
technical appraisal and makes other minor
provisions and technical and format
appraisal guidelines edits throughout the
enumerated in section exhibit.
606 of CUFFA. These Section C-2.1(g) is
technical revised to include
specifications must be CUFFA as a source for
included in an definitions for
appraisal contract for recreation residences.
an appraisal conducted The examples of related
by a contract improvements in
appraiser, and Forest Section C-2.2 is
Service staff revised to be
appraisers must adhere consistent to the
to these provisions definition of related
and procedures when improvements in FSH
conducting an 2709.11, section
appraisal of a 33.05.
recreation residence Section C-
lot. 2.2(b)(2)(3)(b) is
revised by using the
term ``market area''
instead of the word
``neighborhood.''
[[Page 16657]]
FSH 5409.12, Section Exhibit 07, Assignment No changes in final
6.9--Exhibit 07. Agreement, required directive.
both Forest Service
staff appraisers and
contract appraisers to
document their
intention to comply
with the appraisal
instructions (ex. 06),
the provisions of
CUFFA, the Uniform
Standards of
Professional Appraisal
Practice, and the
Uniform Appraisal
Standards for Federal
Land Acquisitions,
prior to conducting an
appraisal or second
appraisal of
recreation residence
lot.
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[FR Doc. 06-2889 Filed 3-28-06; 8:45 am]
BILLING CODE 3410-11-P