Update on the Status of the Merchantable Timber Contracting Pilot Program

Counties containing federal lands have historically received a percentage of the receipts generated by the sale or use of natural resources on the federal lands. A steep decline in federal timber sales during the 1990s, however, resulted in a significant decrease in federal payments to counties that previously depended on timber receipts. The Secure Rural Schools and Community Self-Determination Act of 2000, reauthorized in 2008, was enacted, in part, to address this decline by stabilizing payments to counties that depended on revenues from timber sales on Forest Service and certain Bureau of Land Management (BLM) lands. Under the aceach county may continue to receive a portion of the revenues generated from the sale or use of resources from these lands or may choose instead to receive annual payments based in part on historical revenue payments to the county. Among other things, the act provides for the Forest Service and BLM to implement certain land management projects, known as Title II projects, using a portion of these funds. The act mandates that a certain percentage of Title II projects involving the sale of merchantable timber be carried out under a pilot program in which the agencies are to use separate contracts for harvesting timber and selling it, rather than using a single contract for both activities, as is typical for most timber sales. The percentage requirement in the act varies by fiscal year: for projects using fiscal year 2008 funds, not less than 35 percent of eligible projects must be carried out within the pilot program; for fiscal year 2009 funds, not less than 45 percent; and thereafter, not less than 50 percent. The reauthorization also mandates that we assess this contracting pilot program and report on our assessment by September 30, 2010. In response to this mandate, we (1) identified the number of projects the Forest Service and BLM have implemented under the law, including the number expected to generate merchantable timber, the number in the pilot program, and the extent to which the percentage requirements of the law have been met; and (2) collected information on the agencies' experiences in using the pilot program.