This report gives an overview of Forest Roads construction and Financing. It discusses the current road system, statistics over the years

Gorte, Ross W.

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Roads are also needed for access across the national forests to inholdings and intermingled1nonfederal lands, but such roads are generally not built and funded by the federal government.Congressional Research Service  ̃The Library of CongressCRS Report for CongressReceived through the CRS Web97-706 ENRJuly 16, 1997Forest Roads:Construction and FinancingRoss W. GorteEconomist and Specialist in Natural Resources PolicyEnvironment and Natural Resources Policy DivisionSummaryForest roads provide access for using national forests, but are often opposed toprevent environmental damages, protect roadless areas, and avoid the cost of buildingand maintaining them.  New road construction has declined by 75% in the past decade,and road reconstruction has declined by half.  However, the principal purpose of mostroads is still for access to timber, and many feel that granting credits to timber purchasersfor construction is a subsidy; proponents argue that the current system is efficient andeffective.  The Administration has proposed eliminating the credit system.BackgroundForest road construction and financing have involved contentious legislative debatesfor many years.  Roads are used for access to the national forests, especially for timberharvesting, but also for fire control, recreation, and other uses.   Road construction is also1opposed by some, for three major reasons.  First, both during and after their construction,roads can and often have caused significant environmental damages, particularly to waterquality and wildlife habitat.  Second, roads necessarily eliminate roadless areas that somepeople want to retain as pristine wilderness areas.  And finally, roads are expensive to buildand to maintain.The debate has traditionally focused on the construction of new roads within thenational forests — new roads are far more likely to be opposed.   However, sometimesuses require that existing roads be improved, rebuilt, or moved, an activity known asreconstruction.  Reconstruction is less likely to be opposed, because rebuilding roads ismuch less expensive (per mile) and might improve the environment (e.g., by reducingstream sedimentation) without entering roadless areas.CRS-2See:  K. Norman Johnson, et al., Forest Health and Timber Harvest on National Forests2in the Blue Mountains of Oregon: A Report to Governor Kitzhaber.  June 15, 1995.  U.S. Dept. of Agriculture, Forest Service.  Report of the Forest Service, Fiscal Year 1995.3Washington, DC: June 1996.  P. 129.U.S. Dept. of Agriculture, Forest Service.  FY 1998 Budget Explanatory Notes for the4Committee on Appropriations.  Washington, DC: n.d.  P. 159.Construction and reconstruction under the Purchaser Elect Program (PEP) are typically5reported with the PCP, and are combined in table 1; PEP operations are described under roadsystem financing in this report.Recent debates have differed.  As part of the forest health issue, inadequate roadmaintenance has been identified as a significant cause of watershed deterioration.   More2recently, road financing, particularly granting credits to timber purchasers for requiredroad construction, has been attacked as “corporate welfare,” and the Administrationproposed terminating the use of this financing tool in its FY1998 budget request.The Current Road SystemThere are 377,810 miles of roads within the National Forest System, includingarterial, collector, and local roads.   Arterial roads (about 7% of the total) are typically3two-lane paved roads serving large land areas, and typically connect with publichighways.   Collector roads (about 19% of the total) are usually single-lane gravel roads4connected to arterial roads or public highways.  Local roads (about 74% of the total)typically connect use sites (e.g., campgrounds, trailheads, and logging sites) with collectorroads, arterial roads, or public highways; except for those serving recreation sites, mostare built for high-clearance vehicles (e.g., pickups and trucks).  To protect the publicand/or the environment and to reduce maintenance costs, local roads may be closed totraffic or obliterated after the principal use is completed.  In addition, timber purchasersmay build temporary roads to meet their needs for harvesting and removing the timber.The mileage of new roads built in the national forests has declined over the pastdecade, proportional to the decline in timber sales.  More than 2,000 miles of new roadswere built annually in the late 1980s, but fewer than 500 miles have been built annually inthe past 2 fiscal years.  (See table 1.)  Reconstruction has also declined, but only to abouthalf of the late 1980s level.  (Prior to FY1986, the Forest Service did not distinguish newroads from reconstruction in its reporting on the road construction program.)Timber harvesting is the primary purpose for most new roads and reconstruction.Since the Forest Service began identifying road construction purposes in FY1990, timberhas been the primary purpose for 97% of new roads and 87% of road reconstruction.  Themajority of road construction and reconstruction is by timber purchasers under thePurchaser Credit Program (PCP).   (The Forest Service is authorized to require timber5purchasers to build the roads specified in the timber sale contracts and are generallycompensated for their work; the details of this program are described under road systemfinancing, below.)  Timber purchasers have accounted for 93% of new roads and 81% ofreconstruction.  (See table 1.)  The other timber access roads and the recreation andgeneral purpose roads are constructed via road construction contracts under the ForestRoad Program (FRP).CRS-3Act of Oct. 13, 1964; P.L. 88-657; 16 U.S.C. 532-538.6Table 1.  New Roads Built and Roads Reconstructed in the National Forest System (in miles)Year New PCP sum timber other Reconst. PCP sum timber otherTotal New FRP- FRP- FRP- Total Recon FRP- FRP- FRP-1986 2,485 2,033 452 3,932 3,132 8001987 2,593 1,973 620 5,283 3,509 1,7741988 2,310 2,037 273 4,772 3,693 1,0791989 1,823 1,650 173 3,721 3,029 6921990 1,966 1,830 136 97 39 4,554 3,833 721 293 4281991 1,311 1,219 92 49 43 3,708 2,895 813 302 5111992 1,178 1,080 89 40 58 3,259 2,506 753 171 5821993 816 772 44 16 28 2,625 2,255 370 108 2621994 520 500 20 4 16 1,933 1,749 184 5 1801995 468 439 29 9 20 2,416 1,762 654 217 4371996 435 418 17 1 16 2,901 2,314 487 219 268Source: U.S. Dept. of Agriculture, Forest Service.  Budget Explanatory Notes for Committee onAppropriations.  Washington, DC: annual series.Road maintenance allows continued use of roads over time.  Some maintenanceresults from traffic use, but some (e.g., clearing culverts and roadside brush, removingfallen rock, and repairing signs and bridges) results simply from the passage of time.  Only38% of the national forest road system (144,973 miles) was maintained at levels consistentwith current uses in FY1996; this is a decline from 47% of the system fully maintained inFY1990.  As of FY1994, 20% of the system (75,348 miles) was closed to use, of which40% (29,888 miles) was fully maintained.  The remaining roads (both open and closed) aremaintained at less than necessary to provide for current uses.  Although this suggests amaintenance backlog, no backlog has been identified in either the annual Report of theForest Service or the agency budget requests.Road System FinancingThe principal authorities for financing forest road construction and maintenance wereenacted in the 1964 National Forest Roads and Trails Act.   The two primary financing6mechanisms for construction activities, from §4 of the Act, are annual appropriations andrequirements on timber purchasers with amortization in contracts.  (For financingpurposes, new road construction and road reconstruction are essentially indistinguishable,and will be combined as “construction activities” in this section.)  These two mechanismscan also be used for road maintenance, although requiring deposits to a special accountby timber purchasers for their share of road maintenance is authorized in §6 of the Act,and is widely used.CRS-4Act of Oct. 22, 1976; P.L. 94-588.  Actually, NFMA was primarily an amendment to the7Forest and Rangeland Renewable Resources Planning Act of 1974 (RPA; Act of Aug. 10, 1974;P.L. 93-378; 16 U.S.C. 1600-1614); RPA required the plans, while NFMA provided substantialguidance on how to do the planning.In contrast, access roads across the national forests are planned and designed by the person8(continued...)Annual Construction Appropriations.  The Forest Service receives annualappropriations for road construction.  This funding is used in two ways: for constructionactivities through direct contracts, and administering such contracts (FRP program); andfor administering timber purchaser construction activities (PCP program).  Total annualappropriations for road construction have declined significantly — by nearly 50% — overthe past decade, as shown in table 2, but the decline in appropriations has been less thanthe decline in the mileage of new roads and reconstruction, shown in table 1.Table 2.  Financing for Road Construction and Maintenancein the National Forest System (in millions of dollars)Year Constr. FRP FRP PCP PCP Constr. Maint. Coop.Total Total Total TotalApprop. Contracts Admin. Admin. Credits Financing Approp Deposit1986 179.5 44.0 40.3 95.2 (97.7) 227.2 61.9 46.41987 223.6 95.3 38.6 89.6 (102.6) 326.2 63.1 57.31988 181.4 59.6 44.6 77.1 (108.1) 289.5 83.7 58.31989 163.4 42.3 53.9 67.2 (84.0) 247.4 80.7 57.21990 159.8 48.8 53.4 57.5 (123.3) 283.0 96.4 42.81991 173.1 51.8 59.3 61.9 (123.5) 296.6 91.3 58.01992 169.0 55.3 58.6 55.1 (117.8) 286.8 85.9 56.31993 140.6 33.4 61.9 45.4 (119.2) 259.8 82.2 57.61994 97.3 15.7 55.2 26.4 (73.2) 170.5 79.2 46.41995 98.2 30.1 33.3 34.9 (51.1) 149.2 83.8 39.71996 94.9 26.4 33.9 24.6 (47.5) 142.4 81.0 42.8Source: U.S. Dept. of Agriculture, Forest Service.  Budget Explanatory Notes for Committee onAppropriations.  Washington, DC: annual series.The mix of funding — for construction contracts, and for administering both FRP andPCP construction — has fluctuated widely over the past decade, although the generaltrend has been downward.  The substantial expenses for administering purchaser (PCP)construction — nearly $15,000 per mile (for construction new roads plus reconstruction)— occur because the Forest Service plans, designs, and surveys the construction, and theninspects the purchasers’ work to ensure that the standards have been met.  Road planningis typically done during the integrated land and resource management planning requiredfor the national forests by the National Forest Management Act of 1976 (NFMA).7Detailed planning, designing, and surveying then occur as part of the planning andpreparation of specific activities, such as a timber sale contract.8CRS-5(...continued)8or organization proposing the road.  The Forest Service has the authority to approve or deny theproposal, or to suggest modifications (including changes for cooperative locations and funding formutual benefit); however, the only agency cost for such roads is the expense to review the permit.The credits cannot be used when the cash payments for the timber would be below the cash9minimum (the “base rates”) for the timber.  (Unusable credits are called ineffective.)  This situationis complicated by another Forest Service program, known as stumpage rate adjustment, underwhich the agency adjusts timber prices in existing contracts based on changes in lumber prices.If lumber prices fall, some credits may become ineffective on relatively low-priced sales (includingcredits which have already been used, thus requiring additional cash payments); on the other hand,if lumber prices rise, previously ineffective credits might become effective.This was done in §10 of RPA (P.L. 93-378) by reference to the Act of July 12, 1974 (the10Congressional Budget and Impoundment Control Act of 1974; P.L. 93-344).Act of Dec. 23, 1981 (Dept. of the Interior Appropriations, FY1982); P.L. 97-100; 95 Stat.111391.Under the Act of May 23, 1908, the Forest Service is required to return 25% of revenues12to the states for use on roads and schools in the counties where the national forests are located.This payment was intended to substitute for property taxes for the tax-exempt national forests.NFMA expanded the definition of receipts to include purchaser road credits and deposits to theKnutson-Vandenberg (K-V) Fund; deposits to the Salvage Sale Fund were added later.  Because(continued...)Purchaser Credit Program (PCP).  The Forest Service is authorized by §4 of the1964 Act to acquire, construct, and maintain forest roads “(2) by requirements onpurchasers of national forest timber and other products, including provisions for theamortization of road costs in contracts ...”.  (The extent to which this authority is used forroad maintenance, if at all, is not reported by the Forest Service.)  To implement thisauthorization, the Forest Service grants credits to timber purchasers equal to the estimatedcost of building the specified roads.  The purchasers can then generally use the credits topay for the timber being harvested, although some credits may be unusable (ineffective).9The use and treatment of purchaser credits has varied over time.  Until 1974, therewas no congressional restriction on the agency for granting road credits.  Then, Congressrequired annual appropriations for the credits, by defining them as requiring “budgetauthority.”   This requirement was altered in the FY1982 Interior Appropriations Act by10deleting the reference to “budget authority” and replacing it with a direction to establishlimits on the amount of credits which can be obligated in annual appropriations acts.   The11authorized level for FY1982 was $242.5 million; in recent years, the authorized level hasonly been $50 million annually.  As shown in table 2, purchaser road credits actually used(excluding ineffective credits) have declined by about half over the past decade.One significant aspect of the purchaser credit program is that the credits used are nowcounted as revenues, for the purpose of 25% revenue-sharing.  Using the credits does notresult in cash revenues, however; rather, it is an exchange of timber assets for theconstruction of road assets.  The counties argued that Forest Service decisions to givetimber to purchasers for road construction was reducing timber sale revenues, without thecounties’ being a party to those decisions; Congress agreed, and in 1976 (§16 of NFMA)directed that purchaser road credits be counted as timber sale revenues.  Thus, revenue-sharing is actually more than 25% of cash revenues.12CRS-6(...continued)12revenue-sharing payments are based on non-cash “revenues” (road credits) and on unavailable cashrevenues (K-V and Salvage Fund deposits), the payments often exceed the available cash on somenational forests (effectively requiring transfers from other forests with sufficient cash revenues).See: U.S. General Accounting Office.  Forest Service: Distribution of Timber Sales ReceiptsFiscal Years 1992-94.  GAO/RCED-95-237FS.  Washington, DC: Sept. 1995. Under various other authorities, dating back to 1913, cooperative deposits can be used for13a variety of purposes, including timber scaling, fire protection on non-national forest lands, andother purposes.  However, road maintenance deposits by timber purchasers are the principal sourceand use of cooperative deposits.Purchaser Elect Program (PEP).  This program was created in 1976 (§14(i) ofNFMA) to allow small business (except in Alaska) to elect to have the Forest Service buildthe roads specified in the timber sale contracts.  In such cases, the purchasers’ payment forthe timber includes cash payments equal to the credits; these funds are deposited in aspecial account which the Forest Service can use (without further appropriation) forcontracting the road construction.  The program has typically accounted for about 10%of purchaser credits, and the accomplishments are usually reported with purchaser creditwork; in table 2, PEP funding is included in PCP funding.Annual Maintenance Appropriations.  The Forest Service receives annualappropriations for road maintenance.  This funding has been stable for the past severalyears, but is more than 15% below the peak appropriations of $96.4 million in FY1990.Because cooperative deposits have declined by a greater percentage, annual appropriationshave become relatively more important, accounting for nearly 2/3 of road maintenancefinancing in the past 3 years.  In addition, the proportion of the road system that is fullymaintained has been declining.  Although the road system grew 4% between FY1990 andFY1995, the fully-maintained mileage declined by 16%, from 47% of the system inFY1990 to only 38% of the system in FY1995.Cooperative Deposits.  Under §6 of the 1964 National Forest Roads and Trails Act,the Forest Service is authorized to require purchasers to make deposits to a specialaccount that is used for road maintenance after the timber sale is completed.   As shown13in table 2, the use of cooperative deposits over the past 3 years is substantially below theaverage use in the late 1980s and early 1990s; this is probably related to the decline intimber sales, although the timber sale decline began earlier.  Unless timber sales increase,it seems likely that cooperative deposits by purchasers for road maintenance will eitherstabilize or continue to decline.Road Closure and Obliteration.  In addition to road construction and maintenance,the Forest Service closes some roads to vehicular traffic (seasonally, temporarily, or evenpermanently), usually for environmental or resource protection (e.g., to protect wildlifehabitat).  The Forest Service also obliterates some roads after the relevant use has beencompleted.  Obliteration not only returns the area to resource production (e.g., timbergrowth), it also eliminates the need for further maintenance.  Obliterating roads isexpensive, however, apparently costing about as much (per mile) as road reconstruction;data on the extent and cost of road obliteration are not reported.

Forest Roads: Construction and Financing

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Forest Roads: Construction and Financing

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