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When the National Forest System was established in 1907, Congress required that 25 percent of revenues derived from National Forests be shared with the counties where they are situated. These proceeds partially refund the tax revenues lost by local governments and help fund rural schools, roads, and other services. In recent years, reduced timber sales have decreased these payments dramatically, seriously impacting educational programs, road maintenance, and other services in the affected counties. This report from the Senate Committee on Energy and Natural Resources presents and recommends passage of S. 1608, which would establish secure payments for states and counties containing federal lands and apply available forest revenues to meet these payments, with general treasury funds making up the difference. Of the payments made, 80-85 percent would go to the traditional schools and roads program; 15-20 percent would be given to the counties for federal-land management projects developed locally. The bill aims to provide secure funding for rural schools while improving cooperative relationships among the people that use and care for federal lands and federal management agencies. This report contains the text of the legislation; its purpose, background, and history; and explanations of each legislative section. A statement by James R. Lyons, Agriculture Under Secretary for Natural Resources and Environment, explains why the Clinton Administration opposed this bill, citing the need to sever completely the link between timber sales and educational funding. (SV)

When the national forests were withdrawn from the public domain a century ago, they were established with the assurances that proceeds from the sustainable management of their natural resources would be shared with local governments. These proceeds partially refund the tax revenues lost by local governments and go toward funding rural schools, roads, and other services. Since 1990, controversies over federal forest management policies and reduced timber sales have decreased these payments dramatically, leaving many rural schools in difficult circumstances. A Senate subcommittee held hearings on proposed legislation that would establish a set amount to be paid to affected local governments and apply available receipts to meet these payments, with general treasury funds making up the difference. Only 75 percent of the payments would go to the traditional schools and roads program; 25 percent would be given to the counties for federal-land management projects developed locally. The bill aims to provide secure funding for rural schools while giving people a new incentive to work together at the local level. Testimony from U.S. Senators; county commissioners; and representatives of organizations advocating school, environmental, community, and timber industry interests discussed details of funding mechanisms, the balance between economic and ecological concerns, the composition and duties of local advisory committees, the risk of catastrophic wildfires, and issues related to community survival. (SV)

This report provides background information on Senate Bill 184, the Utah Schools and Lands Improvement Act of 1993, under which the federal government would acquire over 200,000 acres of land and mineral rights from the state of Utah in exchange for federal land, certain mineral resources, or a portion of federal mineral receipts in that state. At the time of statehood in 1896, the federal government granted Utah "sections" in every township, totaling about 7.5 million acres, to be used for the support of public schools. These lands are not contiguous. Ongoing land management problems for both the state and federal governments would be remedied by the proposed exchange. The land acquired from the state would be incorporated into two Indian reservations, as well as into various national parks and forests around Utah. The Congressional Budget Office estimated the cost of this measure; the Committee made a regulatory impact evaluation statement; and the U.S. Department of Agriculture supported enactment with some suggested amendments. The U.S. Department of the Interior supported the bill, but pointed out potential "pay as you go" costs from reduced royalties to the federal treasury. The report contains proposed amendments, as well as a section-by-section analysis of the bill. (KS)