Forestry in the 2008 Farm Bill

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The Food, Conservation, and Energy Act of 2008 (the 2008 farm bill) became law P.L. 110-246
when the House and Senate voted to override President Bush’s veto on June 18, 2008. The
conference agreement on the bill (H.R. 2419) had been enacted, vetoed by the President, and
overridden (P.L. 110-234), but inadvertently excluded the trade title. Both chambers repassed the
conference agreement (with the trade title) as H.R. 6124; it was again vetoed and again
overridden as P.L. 110-246.
The 2008 farm bill contained a forestry title and forestry provisions in other titles. General
forestry legislation is within the jurisdiction of the Agriculture Committees, and past farm bills
have included provisions addressing forestry, especially on private lands. Most federal forestry
programs are permanently authorized, and thus do not require reauthorization in the farm bill.
The forestry title (Title VIII) of the 2008 farm bill amended the Cooperative Forestry Assistance
Act of 1978 (P.L. 95-313; 16 U.S.C. §§ 2101-2114) in several ways. It added national priorities
for forestry assistance, required statewide forest assessments, created a new community forest and
open space conservation program (to protect forests threatened with conversion to non-forest
uses), established a new Coordinating Committee, added an Emergency Forest Restoration
Program, and authorized competitive allocation for some forestry assistance funding. The title
also directed cooperation and collaboration with Indian tribes, amended the Lacey Act to restrict
imports of illegally logged wood products, authorized changes to certain national forest timber
contracts, and provided grants to Hispanic-serving institutions. In addition, it reauthorized and
extended four existing programs.
Other titles also contained provisions affecting forestry. The conservation title (Title II) modified
most programs to include forestry activities and directed the creation of infrastructure for
environmental services markets (including carbon markets). The trade title (Title III) included a
section requiring lumber importers to report on imports and fees paid, to assure implementation
of the 2006 U.S.-Canada Softwood Lumber Agreement. The energy title (Title IX) included
woody biomass in many programs. Finally, the tax title (Title XV) included provisions to
authorize new tax-exempt forest conservation bonds, to modify income deductions for qualified
timber income, and to modernize and clarify the tax treatment of timber real estate investment
trusts (REITs).
Other forestry provisions were suggested by various interests, and might be considered in the next
farm bill. Funding is one issue, as half the mandatory spending for the Forest Land Enhancement
Program (FLEP) was cancelled and the program was not reauthorized. Protecting communities
from wildfire continues to be a priority for some, while controlling invasive species is a priority
for others. Assisting forest-dependent communities in diversifying their economies has also been
debated. Finally, some have expressed interest in trying to provide payments for ecosystem
services—forest values that have not traditionally been sold in the marketplace.

Backgr ound ..................................................................................................................................... 1
The 2008 Forestry Title...................................................................................................................2
Provisions Amending the CFAA...............................................................................................2
National Priorities...............................................................................................................2
Statewide Assessments and Strategies................................................................................3
Community Forest and Open Space Conservation Program..............................................3
Forest Resource Coordinating Committee..........................................................................3
Competitive Funding..........................................................................................................4
Emergency Reforestation....................................................................................................4
Other Provisions........................................................................................................................4
Tribal-Forest Service Cooperative Relations......................................................................4
Reauthor i zations ................................................................................................................. 4
Illegal Logging....................................................................................................................5
National Forest Modifications............................................................................................5
National Forest Timber Contract Options...........................................................................5
Hispanic-Serving Institutions..............................................................................................6
Forestry in Other Titles....................................................................................................................6
Conserva ti on ................................................................................................................... .... 6
Softwood Lumber Imports..................................................................................................6
Woody Biomass Energy......................................................................................................7
Timber Tax Provisions........................................................................................................7
Possible Forestry Issues for a Future Farm Bill..............................................................................8
Forestry Assistance Funding...............................................................................................8
Wildfire Protection..............................................................................................................9
Invasive Species..................................................................................................................9
Economic Diversity............................................................................................................9
Markets for Ecosystem Services.......................................................................................10
Appendix. House, Senate, and Enacted Forestry Provisions of the 2008 Farm Bill......................11
Author Contact Information..........................................................................................................16

ederal forestry has historically been associated with agriculture, and with agriculture
legislation. Forestry programs have been addressed in past farm bills and other agriculture
legislation. This report provides brief background on the House and Senate Agriculture F

Committees’ jurisdiction over forestry, with examples of bills addressed by the committees. It
then presents information on the forestry provisions in the 2008 farm bill, the Food,
Conservation, and Energy Act of 2008 (P.L. 110-246), organized by provisions in the forestry title ¹
and other provisions. It concludes with some forestry issues that were debated and that might be
discussed in the next farm bill. The Appendix includes a side-by-side description of the House,
Senate, and enacted provisions.

Both the House and Senate Committees on Agriculture have jurisdiction over “forestry in ²
general” and acquired national forests. Thus, the committees have been able to exert
considerable influence over federal forestry activities over the years. For example, the Forest and
Rangelands Renewable Resources Planning Act of 1974 (RPA, P.L. 93-378; 16 U.S.C. §§ 1600-
1614) and the National Forest Management Act of 1976 (NFMA; P.L. 94-588), which guide
Forest Service (USFS) planning and management, were both initially referred to the Agriculture
Committees. More recently, the Healthy Forests Restoration Act of 2003 (P.L. 108-148; 16 U.S.C.
§§ 6501-6591) was referred to and reported by the Agriculture Committees.
In addition to forestry on federal lands, the Agriculture Committees have jurisdiction over ³
forestry research and forestry assistance to states and to private landowners. Forestry research is
governed largely by the Forest and Rangeland Renewable Resources Research Act of 1978 (P.L.
95-307; 16 U.S.C. §§ 1641-1647), which revised and updated the McSweeney-McNary Act of
1928. Forestry assistance is governed largely by the Cooperative Forestry Assistance Act of 1978
(CFAA; P.L. 95-313; 16 U.S.C. §§ 2101-2111), which revised and updated the Clarke-McNary
Act of 1924. Both laws were referred to and reported by the Agriculture Committees.
Recent farm bills have also included forestry provisions, primarily addressing the forestry
assistance programs. The 1990 farm bill (the Food, Agriculture, Conservation, and Trade Act of

1990, P.L. 101-624) contained a separate forestry title that:

• created four new forestry assistance programs;
• revised two existing forestry assistance programs;
• amended two forestry assistance programs;

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^t^h^{ree p}^rⁱⁿ^ci^p^a^l^b^r^an^ch^{es o}^f^t^h^{e U}^S^DA^F^o^rest^S^e^rvi^ce.

• revised the administrative provisions for forestry assistance;
• created five special forestry research programs;
• amended three existing forestry research programs;
• authorized a private, non-profit tree planting foundation; and
• created a new USFS branch: international forestry.
The 1996 farm bill (the Federal Agriculture Improvement and Reform Act of 1996, P.L. 104-127)
included only a few forestry provisions, extending the authorization for the one expiring
assistance program and adding a new funding option within an existing program.
The 2002 farm bill (the Farm Security and Rural Investment Act of 2002, P.L. 107-171) contained
a separate forestry title. The conference could not resolve many of the differences between the
House and Senate forestry provisions, and thus the conference report contained fewer provisions
than either. (Some of the disputed provisions were enacted subsequently in the Healthy Forests
Restoration Act.)

Numerous programs were created, modified, and/or extended in the forestry title of the 2008 farm
bill (Title VIII). The various provisions can be sorted into two groups: provisions amending the
Cooperative Forestry Assistance Act (CFAA), and other provisions.
The CFAA provides various types of forestry assistance to states and private landowners.⁴ The
2008 farm bill modified several of the provisions, adding new requirements, authorizing new
programs and spending, and otherwise modifying forestry assistance programs.
One significant aspect of the 2008 farm bill was the lack of a private forest landowner assistance
program, which the Administration had proposed to terminate. The Forest Land Enhancement
Program (FLEP) was created in the 2002 farm bill. It was not reauthorized, and thus has expired.
FLEP funding ended earlier; funds were borrowed for wildfire suppression, a small portion was
repaid, and other funds cancelled. In the end, only about half of the $100 million of mandatory
spending enacted in 2002 was actually spent on the program. This marks the first time since the
CFAA was enacted in 1978 that no such forest landowner financial aid program is authorized.
The 2008 farm bill (§ 8001) established a new set of national priorities for federal assistance for
private forest conservation. It added a new subsection to § 2 of the CFAA:

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^Go^r^t^e^.

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^ou^t^b^reak^{, or dev}^e^l^opm^eⁿ^t^,^an^{d res}^t^oriⁿ^g^appropri^a^t^e^f^o^res^t^t^y^p^e^sⁱⁿ^res^pon^s^e^t^o^su^ch^t^h^reat^s^.
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^recreation^.
Thus, the 2008 farm bill requires that forestry assistance aim to conserve working forests, protect
and restore forests, and enhance public benefits from private forests.
The 2008 farm bill (§ 8002) requires each state to conduct a statewide assessment of forest
resource conditions, trends, threats, and priorities to receive federal forestry assistance funds.
Each state also must prepare a strategy for addressing the identified threats, and describe the
resources needed to address those threats. The states were to prepare the initial assessment and
strategy, with updates as needed, and to coordinate with specified agencies and groups. The
Secretary may use up to $10 million annually for FY2008-FY2012 of appropriated forestry
assistance planning funds to assist states with their assessments and strategies.
The farm bill (§ 8003) amended the CFAA to establish a Community Forest and Open Space
Conservation Program. The program provides grants to local governments, Indian tribes, or
nonprofit organizations to acquire lands threatened by conversion to non-forest uses and that
provide economic, environmental, educational, and recreational benefits and serve as models of
sustainable forest stewardship for other landowners. The grants may be up to 50% of the
acquisition cost, with the authorization for “such sums as are necessary.” This program is similar
to the Forest Legacy Program, which authorizes the federal acquisition, or grants to states for
their acquisition, of lands or easements on lands threatened by conversion to non-forest uses.
The bill (§ 8005) replaced the existing USDA Coordinating Committee with a new Forest
Resource Coordinating Committee, composed of the heads of four USDA agencies (and chaired
by the Chief of the Forest Service) and representatives of state agencies, academia, and interest
groups. The Committee is to provide coordination and direction to the USDA agencies and to
coordinate with state agencies, focused on achieving the national priorities identified above.

The 2008 farm bill (§ 8007) requires the Secretary to allocate a portion of funds available under
the CFAA on a competitive basis. The portion to be competitively allocated was “to be
determined by the Secretary,” in consultation with the Forest Resource Coordinating Committee.
The bill (§ 8008) also allows the Secretary to competitively allocate up to 5% of cooperative
assistance funding for “innovative national, regional, or local education, outreach, or technology
transfer projects” that contribute substantially to achieving the national priorities. These projects
require a 50% matching contribution.
The farm bill (§ 8203) added an Emergency Forest Restoration Program to the existing
Emergency Conservation Program under Title IV of the Agricultural Credit Act of 1978 (P.L. 95-⁵
334; 16 U.S.C. §§ 2201-2205). The original program focused on emergency protection and
rehabilitation of wind- or water-eroded agricultural lands. The expanded program provides up to
75% of the costs (up to $50,000 annually) for landowners to rehabilitate or restore forest lands
damaged by storms, fires, drought, invasive species, or insects or diseases.
Subtitle B (§§ 8101-8107) addressed authorities for cultural and heritage cooperation. One
section authorizes the use of national forest lands, with federal assistance for reburial of human
remains and cultural items. Another section authorizes temporary closures of national forest lands
historically used by Indians to assure access for traditional and cultural uses. A third section
authorizes free use of trees and forest products for traditional and cultural (but not commercial)
purposes. The final substantive section generally prohibits disclosure of information on reburials
as well as information on tribal resources, cultural items, uses, or activities.
The 2008 farm bill reauthorized and/or extended several programs through 2012:
• § 8201, the Rural Revitalization Technologies Program, under § 2371(d)(2) of the
Food, Agriculture, Conservation, and Trade Act of 1990 (the 1990 farm bill; 7
U.S.C. § 6601(d)(2));
• § 8202, the Office of International Forestry, under § 2405(d) of the Global
Climate Change Prevention Act of 1990 (Title XXIV of the 1990 farm bill; 7
U.S.C. § 6704(d)); and

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^be^eⁿ^f^unde^d^sⁱ^nc^e^FY¹⁹⁹³^.

• § 7413, the Renewable Resources Extension Act of 1978 (P.L. 95-306; 16 U.S.C. ⁶
§§ 1671-1676).
• The bill (§ 8205) also extended and modified funding for the Healthy Forest
Reserves. These reserves had been authorized through 2008 in the Healthy
Forests Restoration Act of 2003 (P.L. 108-148; 16 U.S.C. §§ 6571-6578). The
extension requires the Secretary to provide $10 million annually for the program
from the Commodity Credit Corporation for FY2008-FY2012.
The farm bill (§ 8204) amended the Lacey Act Amendments of 1981 (P.L. 97-79; 16 U.S.C. §§

3371-3378) to expand the restrictions on and penalties for importing wild plants or plant parts ⁷

(e.g., logs and lumber) removed in violation of domestic or foreign laws. It excluded crops,
cultivars, and plants and plant parts (e.g., seeds, roots, and cuttings) intended for planting in the
United States. It also expanded and clarified for plants the definition of taken or possessed
illegally, and establishes a process for legal plant imports.
The bill included provisions affecting national forest lands:
• §§ 8301 and 8303, modifying the boundary of the Green Mountain National
Forest (VT), and authorizing the sale or exchange of specific lands to the
Bromley Mountain Ski Resort, with specific directions on using any proceeds
generated by the sale or exchange;
• § 8302(a)-(e), directing the conveyance, without consideration, of certain USDA
lands in New Mexico to the Chihuahuan Desert Nature Park; and
• § 8302(f), directing the conveyance, without consideration, of certain lands in the
George Washington National Forest (VA) to the Central Advent Christian Church
of Alleghany County.
The farm bill (§ 8401) allowed purchasers of non-salvage USFS timber sale contracts awarded
between July 1, 2004, and December 31, 2006, to request a modification to their contracts. The
options available were to cancel a portion of the contract, to have the payment rate recalculated
(called a rate redetermination), or to substitute an approved Producer Price Index for the index
specified in the contract. The Secretary may agree to the contract modification if the several
specified terms and limitations are met.

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^title^(T^itle^V^II)ⁱⁿ^t^h^e^Ho^u^s^e^v^e^rsioⁿ^aⁿ^d^t^h^e^eⁿ^a^c^t^e^d^la^w^.
⁷^Se^e^C^R^S^R^e^por^{t R}^L³³⁹³²^,^I^lle^g^a^{l L}^o^g^gⁱⁿ^g:^B^a^c^k^g^r^o^un^{d a}^nd^I^s^s^u^e^s^,^b^y^P^e^rvaze^A^.^S^h^ei^kh^.

The 2008 farm bill (§ 8402) authorized a program of competitive grants for undergraduate
scholarships to recruit, retain, and train Hispanics and other under-represented groups in forestry
and related fields. The program was authorized through 2012 at “such sums as may be necessary.”

Forestry practices and woody biomass were addressed elsewhere in the 2008 farm bill, as well.
Many conservation programs include forestry practices that qualify as conservation activities for
cost-share assistance purposes. Also, many of the existing and proposed bioenergy programs
include woody biomass as a possible feedstock. Programs that include forest-related activities,
but are not focused primarily on these activities, are not included in this report; two specific
woody fuel energy programs in the 2008 farm bill are described below. The provisions addressing
softwood lumber imports from Canada and taxation of forests and forestland owners are also
discussed briefly.
The conservation title of the 2008 farm bill (Title II) modified numerous agricultural conservation
programs to include forestry practices on nonindustrial private forest lands as approved activities ⁸
for the program. Forestry practices and nonindustrial private forest lands are now accepted for
the Conservation Stewardship Program (Subtitle D), Farmland Protection and Grassland Reserve
(Subtitle E), Environmental Quality Incentives Program (Subtitle F), and other conservation
programs (Subtitle G).
In addition, § 2709 added a new § 1245 to the 1985 farm bill (the Food Security Act of 1985, P.L. ⁹
99-198) addressing environmental services markets. The section required technical guidelines to
facilitate the development of environmental services markets, with priority on carbon markets. It
specified that the guidelines establish procedures to measure benefits, protocols to report benefits,
and a registry to track benefits. It also specified that the guidelines provide for verification of the
benefits, including possibly by independent third parties. While not establishing markets for
environmental or ecosystem services (discussed below), the guidelines would likely create the
infrastructure to allow such markets to develop.
Imports of softwood lumber from Canada have been of concern to U.S. lumber producers for ¹⁰
many years. A 2006 Softwood Lumber Agreement provided a temporary respite from the
dispute, but some U.S. producers have asserted that the Canadian producers are not paying the
export fees required by the agreement. A provision (§ 3301) in the agricultural trade and aid title

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^J^ohns^on.
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¹⁰^Se^e^C^R^S^R^e^por^{t R}^L³³⁷⁵²^,^S^o^ftw^ood^L^u^m^b^e^r^I^m^por^ts^fr^om^C^aⁿ^a^d^a^:^I^s^s^u^e^s^a^nd^Ev^eⁿ^ts^{, by}^R^o^s^s^W^.^G^o^r^t^e^a^nd
^J^e^a^nne^J^.^G^rⁱ^m^m^e^tt.

of the 2008 farm bill (Title III) added a new Title VIII (Softwood Lumber) to the Tariff Act of
1930 (19 U.S.C. §§ 1202 et seq.). The provision requires softwood lumber importers to declare
imports and fees paid, allowing the federal government to verify and reconcile data on softwood
lumber imports and to assure implementation of the Agreement.
The energy title of the 2008 farm bill (Title IX) included two provisions to expand the use of ¹¹
woody biomass in energy production. Both provisions are in § 9001, which revises the energy
title of the 2002 farm bill (also Title IX). The first provision (§ 9012) created a competitive
research-and-development grant program for using woody biomass, with priorities for low-value
biomass, processes integrated with biorefineries, wood-derived transportation fuels, and improved
yield from energy plantations. Funding was authorized at $5 million annually for FY2008-
FY2012.
The other provision (§ 9013) created a new Community Wood Energy Program. This is a grant
program for state and local governments to develop a community wood energy plan and acquire
wood energy systems for public buildings. Project priorities are to be determined considering
energy efficiency and appropriate conservation and environmental criteria. The state or local
government monies are required to match the federal grant. Funding was authorized at $5 million
annually for FY2008-FY2012.
The tax and trade provisions of the 2008 farm bill (Title XV) included provisions affecting forests
and forest landowners. The first (§15316) authorized, in limited amounts, tax-exempt private
activity bonds whose proceeds are to be used to finance private forest conservation efforts. This
would allow, for example, a non-profit organization to use tax-exempt bonds to acquire private
timberlands that were threatened with conversion to non-forest uses, such as residential
developments.
Another provision (§ 15311) added a new § 1203 to the Internal Revenue Code to permit
taxpayers to elect to deduct up to 60% of any timber gains from taxable income. The remaining

40% would be taxed at ordinary-income rates.

Finally, several provisions (§§ 15312-15315) altered and clarified the tax treatment of timber real
estate investment trusts (REITs). In recent years, most wood products companies that own
timberlands have separated the timberlands from wood processing (and other) operations, with
the timberlands administered under a REIT because of more favorable tax treatment for REIT
timber income than for wood processing company timber income. The provisions in the 2008
farm bill were to clarify, update, and make minor modifications to timber REIT taxation.

¹¹^Se^e^C^R^S^R^e^por^{t R}^L³²⁷¹²^,^A^g^rⁱ^c^u^ltur^e^-^B^as^e^d^Re^ne^w^a^ble^Eⁿ^e^r^gy^Pr^oduc^tⁱ^oⁿ^,^by^R^a^nd^y^Sc^hne^pf^.

Reauthorization of the many agriculture programs is a prime reason for the periodic farm bills,
but most forestry programs are permanently authorized. This may reduce the pressure to include a
forestry title in upcoming farm bills. Nonetheless, interest groups have raised various forestry
issues other than the authorization levels for possible discussion within a future farm bill, such as
forestry assistance funding, wildfire protection, invasive species, economic diversity, and markets
for ecosystem services that have not traditionally been marketed.
Federal funding for forestry assistance programs has generally been rising, but the increase has
not been spread equally among the various programs. Since the severe 2000 fire season and the
development of the National Fire Plan, funding for cooperative fire programs (assistance to states
and volunteer fire departments) has risen substantially (more than triple pre-2000 funding), and
has remained at very high levels. Funding for Forest Legacy (acquisition of lands or easements on
lands threatened with conversion to non-forest uses) has also risen substantially, from less than $4
million in FY1998 to $50 million or more annually since FY2001 (and a request of $100 million
for FY2005). In contrast, the Administration has proposed terminating funding for the Economic
Action Program (economic assistance to rural, forest-dependent communities), and funding has
fallen from a peak of $54 million in FY2001 to less than $5 million in FY2008 (with no funds in
FY2007).
The adequacy of funding for private landowner assistance programs has been a concern for many.
These programs have provided cost-shares to qualified landowners for various forestry practices
that increase tree growth, improve wildlife habitat, protect watersheds (thus improving water
quality), and more. One of the changes enacted in the 2002 farm bill was to replace two
programs—the Forestry Incentives Program (FIP) and the Stewardship Incentives Program
(SIP)—with the Forest Land Enhancement Program (FLEP). Because funding for FIP and SIP
had been discretionary and either stagnant (FIP) or absent (SIP), FLEP was given mandatory
funding through the Commodity Credit Corporation of $100 million total through the end of
FY2007. However, some FLEP funds were borrowed to pay for firefighting and other funding
was cancelled; in total, about half of the $100 million “guaranteed” for FLEP was actually spent
on landowner assistance.
Even the existence of landowner cost-share assistance is in doubt. Forestry is included in many
conservation programs that provide financial assistance to private landowners, but FLEP was not
reauthorized in the 2008 farm bill. For the first time since 1978, no forestry-specific landowner
assistance program is authorized. Some question whether a modest forestry-specific assistance
program is needed, since a small share of the much larger conservation programs might provide
more forestry assistance funding. Nonetheless, Congress may revisit the issue of separate funding
for forest landowner assistance programs.

The threat of wildfire damages to resources and property seems to have increased in recent years.
Attention has focused on high biomass fuel levels (particularly in federal forests) and on homes in ¹²
or near at-risk forests, an area known as the wildland-urban interface (WUI). The 2002 farm bill
(§ 8003) created a new Community and Private Land Fire Assistance Program to assist
communities and private landowners in planning and other activities to protect themselves from
wildfires. The program was authorized at $35 million annually through FY2007 and “such sums
as are necessary ... thereafter.” The USFS has included such expenditures as authorized activities
in its State Fire Assistance Program. However, Congress has not appropriated funds explicitly for
this program.
Protecting private lands and structures from wildfires continues to garner congressional attention,
as the threat of wildfire persists. How to assist private landowners and communities, how to
combine this assistance with other assistance and incentive programs, and how to fund such
assistance could be debated in the farm bill context.
Invasive species—non-native plants and animals that are displacing native ones—are becoming ¹³
recognized as a substantial problem. In a speech to the Idaho Environmental Forum on January

16, 2004, then-USFS Chief Dale Bosworth identified invasive species as one of the four major ¹⁴

threats to the nation’s forests and rangelands. The USFS’s Forest Health Management Program
has evolved from a mechanism to survey and control insects and diseases, to a program to address
all forest pests, including invasive species. Several times, the Bush Administration proposed an
Emerging Pests and Pathogens Fund to address rapidly developing problems of invasive species,
but the Appropriations Committees rejected the request both years. In its deliberations over a
future farm bill, Congress could address the structure and financing of programs to prevent and
control invasive species on federal, state, and private forests.
The economies of many rural communities have evolved around the use—finding, extracting,
processing, and selling—of natural resources. In some of these areas, one resource (e.g., timber,
minerals, livestock) has traditionally dominated the local economy, but the economies of such
areas can be devastated when that resource is depleted or when its markets are depressed
(permanently or even temporarily). Many communities have sought approaches to diversifying
their economies, to mitigate the economic and social disruption that can occur when a dominant
economic sector is depressed. The National Forest-Dependent Rural Communities Economic
Diversification Act of 1990 was enacted in §§ 2372-2379 of the 1990 farm bill to authorize
forestry and economic diversification technical assistance to “economically disadvantaged” rural
communities. Under the title Economic Action Program, funding rose from $14 million in

¹²^Se^e^C^R^S^R^e^por^{t R}^S²¹⁸⁸^0,^W^ild^fⁱ^re^Prote^c^tionⁱⁿ^the^W^ild^la^nd-Ur^ban^Inte^rf^ac^e^{, by}^Ros^s^W^.^G^o^rte^.
¹³^Se^e^C^R^S^R^e^por^{t R}^L³⁰¹²³^,^In^v^a^si^{ve No}ⁿ^-^Na^tⁱ^{ve S}^p^eci^{es: B}^a^ckg^r^o^uⁿ^d^an^d^Issu^{es f}^o^{r C}^o^ng^ress^{, by}^{M. Ly}^nne^C^o^rⁿ^e^t
^al^.
¹⁴^T^h^{e o}^t^h^e^{r t}^h^{ree i}^d^en^tⁱ^fⁱ^ed^t^h^reat^s^{are f}ⁱ^{re an}^d^f^u^el^s,^uⁿ^m^an^ag^ed^rec^r^eatⁱ^oⁿ^,^and^l^o^{ss o}^f^o^p^eⁿ^sp^ace.^S^ee
^http:^//w^w^w^.f^s^.^f^e^d.us^/^p^r^o^je^c^t^s^/^f^our^-^t^hr^e^a^t^s^.

FY1996 to $54 million in FY2001, but has declined since, and President Bush has proposed
terminating the program in several budget requests. In its future farm bill deliberations, Congress
might consider ways to perpetuate economic assistance programs for traditional wood products-
dependent communities, either as a continued USFS program or as part of other USDA rural ¹⁵
assistance programs.
Forests provide a broad array of environmental services—clean air and water, wildlife habitats,
pleasant scenery, and more—for which private landowners are generally not compensated,
because these services are typically not bought and sold in a marketplace. A variety of interests
have examined the possibilities of finding ways to compensate landowners for continuing to ¹⁶
provide ecosystem services. One means would be to develop such markets, and the 2008 farm
bill included a provision (§ 2709, discussed above) that could facilitate such a development.
Alternatively, some proposals are for federal “green payments” to directly reward farmers and
other landowners who provide environmental benefits through their land management practices.
Green payments for forest and other landowners’ ecosystem services might be discussed in
Congress’s deliberations in a future farm bill.

¹⁵^Se^e^C^R^S^R^e^por^{t R}^L³¹⁸³⁷^,^Aⁿ^O^vervi^{ew o}^f^US^DA^R^u^r^a^l^Devel^o^p^men^t^P^r^o^g^r^a^m^s^{, by}^T^a^dloc^k^C^o^w^a^n.
¹⁶^A^m^e^r^ic^aⁿ^For^e^s^t^s^,^the^S^o^u^t^he^rⁿ^Envⁱ^r^onm^eⁿ^ta^{l L}^a^w^C^e^nte^r^{, a}^{nd o}^t^he^r^s^he^ld^a^w^o^r^k^s^{hop t}^o^dis^c^us^s^l^a^ndow^ne^r
^c^o^m^p^eⁿ^s^a^{tion f}^o^r^e^c^o^s^y^s^t^em^s^e^r^vⁱ^c^e^s^pr^ov^ide^dⁱⁿ^W^a^s^h^ing^t^oⁿ^{, D}^C^,^on^Ma^y^18-^20,²⁰⁰⁵^.

^{House-Passed Bill}^{Senate-Passed}^{New Law}
^{Current Law/Policy}^{(H.R. 24}¹⁹⁾^Substitut^{e Amendment}^{(P.L. 11}^0-2⁴⁶⁾
^{(H.R. 24}¹⁹⁾
^{Farm Security and R}^{ural Inv}^estm^{ent Act}^{Farm, Nutrition, and Bioenergy A}^{ct of}^{Food and Energy Secu}^{rity Act of}²⁰⁰⁷^Food^{, Conservation, and Energy}^{Act of}
^{of 20}⁰²^[7^{U.S.C. § 7901 note]}²⁰⁰⁷^[§^1]^{[§ 1]}²⁰⁰⁸^[§^1]
^AGRICULTU^{RAL TR}^ADE^A^{ND AID (TITLE III)}
^{U.S.-Canada Softw}^ood^Lumb^{er Agreement}
^{No comparable}^provision.^{No comparable}^provision.^{Sense of Senate t}^{hat the}^Presiden^{t should}^{Amended the Tariff A}^{ct of 1}⁹³⁰^t^o
^{act to ensu}^{re that}^{imports of soft}^wood^{require a}^{softwood lumber impo}^rter
^lumber^{from Canada are}^consiste^{nt with}^{declaration program to verify a}^nd
^{the U.S.-Canada Softwo}^{od Lumb}^er^{reconcile data on softwood lumber}
ⁱ^{ki/CRS-RL33917}^Agreement.^{[§ 11903]}^{imports, to assure impleme}^{ntation of}^U.S.^{-Canada Softwoo}^{d Lumber}
^g/w^Agreement.^{[§ 3301]}
^s^.or
^le^ak^{FORESTRY (TITLE VI}^II)
^{Cooperative Forestry Prog}^ra^ms
^://wiki^{The Forest Land}^En^hance^{ment Pr}^ogram^{No reaut}^{horization provision, al}^l^owing^{No reaut}^{horization provision, al}^l^owing^{No reaut}^{horization provision, al}^l^owing
^h^ttp^{provided financial aid for private f}^orest^{program to terminat}^e.^{program to terminat}^e.^{program to terminat}^e.
^{practices (mandatory}^spe^{nding of $1}⁰⁰
^mill^{ion for FY2002-}^{07). Only a}^{bout half}
^{of $10}^{0 million was spent; t}^{he re}^mainder
^{was borrowed for firefig}^{hting or}
^{cancelled by Congress.}^[16^{U.S.C. § 2103]}
^{General a}^{uthority is p}^{rovided for under}
^{the Cooperative Forestry As}^{sistance Act}
^{of 19}^{78 (CFAA, P.L. 95-31}^{3), as}
^{amended, authorizes USDA to establish a}
^{variety of cooperative program}^{s t}^o
^{protect and ma}^nage^{nonfederal f}^orest
^lands.^{[16 U.S.C. §§ 2101-2114]}
^{No comparable CFAA}^provision.^{Added new priorities: (1) conser}^ving^Simi^{lar to the House}^{bill, but with su}^btle^{Adopted House provision with m}^inor
^{working forests, (2) protecting}^forests^{differences in}^{priorities for prote}^{cting and}^changes.^{[§ 8001]}

^{from nat}^{ural threat}^{s and re}^storin^g^{restoring forests a}^{nd for e}^nha^ncing

^{House-Passed Bill}^{Senate-Passed}^{New Law}
^{Current Law/Policy}^{(H.R. 24}¹⁹⁾^Substitut^{e Amendment}^{(P.L. 11}^0-2⁴⁶⁾
^{(H.R. 24}¹⁹⁾
^{forests, and (3) en}^han^{cing p}^ublic^benefits^benefits.^{[§ 8001]}
^{from private fore}^sts.^{[§ 8001]}
^{No comparable CFAA}^provision.^{No comparable}^provision.^{Authorized new cost-sha}^{re gra}^nt^{s for local}^{Adopted Senate provision.}^{[§ 8003]}
^government^{s, tribes, and no}^n-pro^{fits to}
^{acquire lands t}^hreate^{ned by}^conv^{ersion to}
^{non-forest u}^{ses and}^{provide pu}^blic
^benefits.^{[§ 8002]}
^{No comparable CFAA}^provision.^{Added requireme}^{nts for fina}^ncial^{Added new req}^uirements^{for fina}^ncial^{Adopted House provision with m}^inor
^{assistance: state-wide forest asse}^ssment^{assistance: statewide forest plan}^t^o^identify^changes.^{[§ 8002]}
^{of conditions, trends, threats, an}^d^{critical areas; address regional ne}^{eds; and}
^{priorities and strategies to address}^{plan for ma}^{naging and mo}^{nitoring forests,}
^{threats a}^{nd describe}^resource^s.^{[§ 8002]}^{achieving national priorities.}^{[§ 8004]}
^§²¹^{09(d)(1) of the}^{CFAA defines}^“State”^{Replaced “Trust Territory of th}^e^Pacific^{Same as the Ho}^{use bill.}^{[§ 8005]}^{Adopted House provision.}^{[§ 80}^04]
^{to include “Trust Territory of t}^h^e^Pacific^{Islands” with “the}^{Federated States of}
ⁱ^{ki/CRS-RL33917}^Islands.”^{[16 U.S.C. § 2109]}^{Micronesia, the Rep}^{ublic of the}^Marshall
^g/w^{Islands, the Rep}^{ublic of Palau.”}^{[§ 8003]}
^s^.or^{Subsections of t}^{he CFAA provide}^{for a}^{Replaced USDA Commit}^{tee with new}^Exem^{pted p}^{rojects proposed b}^y^I^ndian^{Adopted House provision with m}^inor
^le^ak^{USDA Coor}^{dinating Commit}^{tee, to}^{Forest Resource Coordinating Com-}^{tribes from State Coordinating C}^ommittee^changes.^{[§ 8005}^{& 8006]}
^{coordinate among agencies, and f}^{or State}^{mittee, to coord}^{inate among age}^ncies,^{recommendations.}^{[§ 8003]}
^://wiki^{Coordinating Commit}^{tees, to co}^ordinate^{with state forester}^{s and othe}^{r int}^erested^{state agency}^rep^resen^{tatives, and others.}^{[§ 8004]}^{Modified state committee duties}
^h^ttp^parties.^{[16 U.S.C. § 2113]}^{to include recommendations con}^cerning
^{the new}^{state-wide forest assess}^{ment an}^d
^strategies.^{[§ 8005]}
^{No comparable CFAA}^provision.^{Required a Secretary-deter}^mined^portion^{No comparable}^provision.^{Adopted House provision.}^{[§ 80}^07]
^{of funds to}^{be allocated competitively}
^{among states.}^{[§ 8006]}
^{No comparable CFAA}^provision.^{Authorized up to}^{5% of f}^unding^f^{or cost-}^{No comparable}^provision.^{Adopted House provision.}^{[§ 80}^08]
^{shared competitively-allocated in}^novative
^{education, outreach, or tec}^hnology
^transfe^{r p}^rojects.^{[§ 8006]}
^{CFAA permane}^{ntly aut}^hor^{ized a}ⁿ^Eme^r-^{Authorized a new}^Emerge^{ncy Ref}^oresta-^{Established ne}^{w emerge}^{ncy lands}^cape^{Adopted House provision with}
^{gency Reforestation}^program.^[1^{6 U.S.C.}^{tion program as}^{part of t}^{he E}^mer^gency^{restoration program to re}^habilitate^{changes—definitions of disaster;}^and
^{§ 2106a]}^{It has}^{not bee}^{n f}^unded^since^Con^{servation program}^{(16 U.S.C. §§}^{croplands, grasslands, and p}^{rivate non-}^{authorization of such}^sums^{as ne}^eded.
^FY1993.²²⁰^1-2²⁰^4).^{[§ 8102]}^{industrial forests following natura}^l^{[§ 8203]}

^disasters.^{[§ 2398]}

^{House-Passed Bill}^{Senate-Passed}^{New Law}
^{Current Law/Policy}^{(H.R. 24}¹⁹⁾^Substitut^{e Amendment}^{(P.L. 11}^0-2⁴⁶⁾
^{(H.R. 24}¹⁹⁾
^{Other Forestry Provisions}
^{No comparable}^provision.^{No comparable}^provision.^{Included definitions and made tri}^{bes eligible}^{No comparable}^provision.
^{for Forest Legacy f}^unding^{[16 U.S}^.C.^§
^2103c]^{and forest ma}^nagement^a^ssistance.
^{[§§ 8101-8112]}
^{No comparable}^provision.^{No comparable}^provision.^{Authorized Cultural and He}^{ritage Co-}^{Adopted Senate provision.}^{[§§ 8}^101-
^{operation, with pur}^{poses, definitions, and}^8107]
^{prohibition on disclosing information, and}
^{provides for reb}^{urial of h}^uman^re^{mains and}
^{cultural items; for tem}^{porary a}^r^e^a^closures
^{for traditional and cultural pu}^rpo^{ses; and}
^{for free}^{use of forest}^product^{s fo}^r
^{traditional and cultural pur}^poses.^{[§§ 8121-}
^8127]
ⁱ^{ki/CRS-RL33917}^{The Healthy Forests Restoration}^{Act of}^Exte^{nded program with}^$^{10 million from}^{Moved program into Food and Security}^{Adopted House provision with}
^g/w²⁰⁰^{3 (P.L. 10}^8-14^{8) aut}^horized^{the CCC an}^{nually throug}^{h FY2}⁰¹^2.^[§^{Act of 19}^{85, a}^{uthorizes suc}^{h s}^u^m^s^as^changes—^$9.7^{5 million annually f}^or
^s^.or^{easements t}^hroug^{h FY20}⁰⁸^{to pr}^otect^8101]^necessar^{y, replaces}^99-year^ease^ment^FY2009-FY2⁰¹^{2; pe}^rmane^{nt ease}^ments
^le^ak^{private forests}^{for enda}^{ngered s}^p^ecies^{and biodiversity.}^{[16 U.S.C. § 6578]}^{option with perma}^nent^easeme^nt^{, and}^{encourages tribes}^{to participate.}^{[§ 2331]}^{instead of 99-year}^easeme^{nts; an}^d^encourageme^{nt for t}^{ribal particip}^ation.
^://wiki^{[§ 8205]}
^h^ttp^{The Renewable Resour}^{ces E}^xteⁿ^{sion Act}^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.^[§^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.
^{of 19}^{78 (P.L. 95-3}^{06) a}^uthorized^educa-^{[§ 7507]}^8201]^{[§ 7413]}
^{tional and technical aid via state exten-}
^{sion agencies and eligible universi}^{ties and}
^colleges.^{[16 U.S.C. §§ 1671-1676}^]
^{The Global Climate Change Prev}^ention^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.^[§^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.
^{Act of 19}⁹⁰^{within the}¹⁹⁹⁰^farm^bill^{[§ 8103]}^8202]^{[§ 8202]}
^{authorized the Forest Service O}^f^f^{ice of}
^Inter^{national Forestry thro}^{ugh F}^Y200^7.
^{[7 U.S.C. § 6704(d)]}
^{The 19}⁹⁰^farm^{bill, as amended,}^Exte^{nded the}^{program t}^hroug^{h F}^Y201^2.^{No comparable}^provision.^{Adopted House provision.}^{[§ 82}^01]
^{authorized Rural Revitaliza}^{tion T}^hrough^{[§ 8104]}
^{Forestry via tech}^{nology transfer,}^busines^s
^{assistance, and local training, through}
^FY2008.^[7^{U.S.C. § 6601(d)(2)]}
^{No comparable}^provision.^{Authorized competitive forestry}^grants^{No comparable}^provision.^{Adopted House provision.}^{[§ 84}^02]

^{House-Passed Bill}^{Senate-Passed}^{New Law}
^{Current Law/Policy}^{(H.R. 24}¹⁹⁾^Substitut^{e Amendment}^{(P.L. 11}^0-2⁴⁶⁾
^{(H.R. 24}¹⁹⁾
^{to Hispanic-serving institutions t}^o^recruit,
^{retain, and train “His}^{panics a}^{nd other}
^under-re^prese^{nted grou}^ps.”^{[§ 8}^201]
^{No comparable}^provision.^{No comparable}^provision.^{Amended the La}^{cey Act Ame}^nd^{ments of}^{Adopted Senate provision with}
¹⁹⁸^{1 (P.L. 97-7}^{9; 1}⁶^{§§ U.S.C}^{. 33}^71-7^{8) to}^{changes—definition of}^plant^{; excl}^usion
^expa^{nd restrictions on a}^{nd pe}^{nalties for}^{of recycled materials; clarification}^of
^{importing wild plants/parts (e.g., l}^umbe^r,^{impact on ex}^{ports; and}^{regulations to}
^{logs) removed in violat}^{ion of U.S}^.^or^furt^{her define}^plant^.^{[§ 8204]}
^{foreign laws.}^{[§ 8204]}
^{No comparable}^provision.^{No comparable}^provision.^Expa^{nded bou}^{ndary of}^Gree^{n Mo}^un^tain^{Adopted Senate provisions.}^{[§ 8301 &}
^{National Forest (VT) to a}^{llow a}^d^ditional^{§ 8303]}
^{land acquisition. Authorizes exc}^h^{ange/ sale}
^{of spe}^{cific forest lands to Bromley}
^{Mountain Ski Resort, with directions on}
^{proceeds use.}^[§^{8203 & § 8205]}
ⁱ^{ki/CRS-RL33917}
^g/w^{No comparable}^provision.^{No comparable}^provision.^{Authorized certain land conve}^yan^{ce in}^{New Me}^xico.^{[§ 11075]}^{Adopted Senate provision, amen}^{ded to}^{authorize a land conveya}^{nce in Vi}^rginia.
^s^.or^{[§ 8302]}
^le^ak
^{No co}^{mparable provision.}^{No comparable}^provision.^{For non-salvage timber sale cont}^r^acts^{Adopted Senate provision with m}^inor
^://wiki^{awarded between}^7/1/⁰⁴^{and 1}²^/^31/0^6,^purc^haser^{s may}^req^{uest tha}^{t the}^contract^changes.^{[§ 8401]}
^h^ttp^{be can}^{celled, the contract pa}^yme^{nt rate}^be
^{re-determined, or a sub}^{stitute Pr}^oducer
^{Price Index}^{be u}^{sed. USDA may agree to}
^{the contract}^{modification, if the specified}
^{terms and limitations are met.}^{[§ 8301]}
^{TAX AND TR}^{ADE PROVISI}^{ONS (TITLE XV)}
^{Timber Provisions (Part 1, Subpart B)}
^Tax-^{exempt bonds}^{for forest}^{No comparable}^provision.^{Established (in limited amounts) a}^{new ty}^pe^{Adopted Senate provision with m}^odest
^{conservation. In ge}^{neral, interest}^on^{of tax-exem}^{pt p}^{rivate activity bond for}^changes.^{[§ 15316]}

^{bonds issued}^{by state a}^{nd local}^{bonds whose}^{proceeds are}^used^{to finance}
^government^{s is tax-exe}^{mpt if}^use^{d for}^{forest conservation.}^{[§ 12211]}
^governmental^pur^{poses (IRC sect}^ion
^{103). Howeve}^{r, not all state and local}
^{bonds used to fina}^nce^{private acti}^vities
^{are tax e}^xem^{pt; private activity}^b^{onds are}

^{House-Passed Bill}^{Senate-Passed}^{New Law}
^{Current Law/Policy}^{(H.R. 24}¹⁹⁾^Substitut^{e Amendment}^{(P.L. 11}^0-2⁴⁶⁾
^{(H.R. 24}¹⁹⁾
^{subject to certain}^{restrictions a}ⁿ^d^are
^{subject to ca}^ps.^{[IRC §§ 141-142]}
^{Deduction for qualified timber ga}^{in. For}^{No comparable}^provision.^{Added new section 12}⁰³^{to the I}^nternal^{Adopted Senate provision with}
^{tax years}^begin^{ning be}^{fore 2}⁰¹^1,^{Revenue Code, which}^{permits ta}^xpaye^{rs to}^changes.^{[§ 15311]}
^{individuals’}^{long term capital gain is taxed}^{elect to deduct 60}^{% of timber}^{gain from}
^{at reduced rates}^{(generally, 15}^%;^section^{taxable income. (The remaining}⁴^{0% would}
^{1 of the ta}^{x code). Taxpayer}^{s are}^{be taxed at ordinar}^{y-income rate}^s.)^[§
^{permitted to treat t}^{he cutting}^of^timber^12212]
^{as a sale eligible for capital gains}
^treatment.^{[IRC § 631]}
^{Timber real estate invest}^{ment t}^r^ust^{No comparable}^provision.^{Included several}^{provisions affecti}^{ng timber}^{Adopted Senate provisions.}^{[§§ 1}^5312-
^{(REIT) provisions. REITs are spec}^ially-^{REITs, including clarification that timber}^15315]
^{defined “pass t}^hrough^{entities” th}^{at are}^{gain is qualified real estate income for a}
^{permitted to deduct dividends th}^ey^REIT.^{[§§ 12213-}^12217]
^{distribute from ta}^{xable income, t}^hus
ⁱ^{ki/CRS-RL33917}^{eliminating corporate-level tax fr}^om
^g/w^{distributed income.}^{[IRC §§ 856-8}^59]
^s^.or^{REITs are s}^{ubject to seve}^{ral minimum-}
^le^ak^{distribution req}^uirements^{and 7}⁵^%^of^{REIT gross income m}^{ust consist}^of
^://wiki^{certain type}^{s of real estate in}^come.
^h^ttp

^Ro^{ss W}^.^Go^r^t^e
^Sp^{ecialist i}ⁿ^Nat^u^r^a^{l Reso}^u^r^{ces P}^o^licy
^rg^ort^e^@^c^rs^.l^oc.g^ov^{, 7}^-⁷²⁶⁶