[Federal Register Volume 77, Number 207 (Thursday, October 25, 2012)]
[Notices]
[Pages 65169-65170]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26245]


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DEPARTMENT OF AGRICULTURE

Forest Service


Extension of Certain Timber Sale Contracts; Finding of 
Substantial Overriding Public Interest

AGENCY: Forest Service, USDA.

ACTION: Notice of contract extensions.

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SUMMARY: The Chief of the Forest Service has determined there is a 
Substantial Overriding Public Interest (SOPI) in extending for up to 1 
year certain National Forest System FS-2400-6/6T and FS-2400-13/13T 
contracts that terminate on or before December 31, 2013 and meet one or 
more of the following conditions; (1) Require removal of biomass 
material, (2) require removal of balsam fir, (3) have been appraised to 
a processing facility that has permanently closed, or (4) have been 
appraised to a processing facility that has not operated for at least 6 
months prior to requesting an extension under this authority.
    The intended effects of the SOPI finding and contract extensions 
are to minimize contract defaults, mill closures, and company 
bankruptcies while the Forest Service assesses markets to determine if 
other relief measures are needed. The Government benefits if defaulted 
timber sale contracts, mill closures, and bankruptcies can be avoided 
by granting extensions. Having numerous, economically viable, timber 
sale purchasers increases competition for National Forest System timber 
sales, results in higher prices paid for such timber, and allows the 
Forest Service to provide a continuous supply of timber to the public 
in accordance with Forest Service authorizing legislation. See Act of 
June 4, 1897 (Ch. 2, 30 Stat. 11 as amended, 16 U.S.C. 475) (Organic 
Administration Act).

DATES: The determination was made on October 25, 2012, by the Chief of 
the Forest Service.

FOR FURTHER INFORMATION CONTACT: Lathrop Smith, Forest Management 
Staff, 970-295-5961 or Richard Fitzgerald, Forest Management Staff 202-
205-1753; 1400 Independence Ave. SW., Mailstop 1103, Washington, DC 
20250-1103. Individuals who use telecommunication devices for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday 
through Friday.

SUPPLEMENTARY INFORMATION: The Forest Service sells timber and forest 
products from National Forest System lands to individuals and companies 
pursuant to the National Forest Management Act of 1976, 16 U.S.C. 472a 
(NFMA). Each sale is formalized by execution of a contract between the 
purchaser and the Forest Service. The contract sets forth the explicit 
terms of the sale including such matters as the estimated volume of 
timber to be removed, the period for removal, price to be paid to the 
Government, road construction and logging requirements, and 
environmental protection measures to be taken. The average contract 
period is approximately 2 to 3 years, although some contracts may have 
terms of 5 or more years.
    The National Forest Management Act of 1976 (16 U.S.C. 472a(c) 
provides that the Secretary of Agriculture shall not extend any timber 
sale contract period with an original term of 2 years or more unless, 
he finds that the purchaser has diligently performed in accordance with 
an approved plan of operations, or that the ``Substantial Overriding 
Public Interest'' justifies the extension.
    The Forest Service timber sale contracts specify the estimated 
volume and utilization standards for material that is required to be 
cut and removed. Specifying what material to remove or leave is 
dependent upon a variety of factors including the resource management 
objectives stated in the project decision documents, available markets 
for the material to be treated and economic factors associated with 
different treatment options. Each sale has its own set of resource and 
economic factors affecting what material will be cut and removed. In 
recent years, there has been an increased emphasis on including biomass 
material in timber sale contracts as a method of reducing fire danger 
by removing hazardous fuels. On June 1, 2012, there were 98 National 
Forest System timber sales under contract in California that included 
the required removal of biomass material. Twenty-nine of these sales 
had the biomass appraised to facilities that are either not currently 
accepting material or are closed indefinitely, and an additional 15 
sales had the biomass appraised to facilities that have been 
permanently closed. Twenty-one of these sales have contract termination 
dates of 12/31/2013 or sooner.
    In response to concerns raised by 30 purchasers, on July 9, 2012, 
Congressmen Tom McClintock and Walter Herger wrote the Chief, U.S. 
Forest Service urging him to consider using administrative authorities 
under 36 CFR part 223 to extend contract terms, modify contract terms, 
or cancel contracts where there is mutual agreement to do so, provided 
that the taxpayers are unaffected by the revisions. They noted that if 
the problems with existing contracts are ignored, there will be a 
substantial number of defaults leaving the Forest Service with 
partially completed projects that will be difficult, and costly to 
complete in the future. While the focus of their letter addressed 
marketing problems purchasers were experiencing where biomass 
facilities had closed, they were also concerned about impacts to 
purchasers where sawmills had closed.
    In August 2012, the Verso paper mill in Sartell, Minnesota, and the 
Georgia-Pacific hardboard plant in Duluth, Minnesota, both shut down 
permanently, putting more than 400 people out of work. The plant 
closings were among the latest blows to an industry that has been on 
the ropes since the last recession began. In all, six mills or about a 
third of the industry have closed over the past 5 years according to an 
August 31, 2012, Minnesota Public Radio article. Particularly hard hit 
by the Minnesota mill closures is an almost complete loss of markets 
for balsam fir.
    Accordingly, and in recognition that the problems in California and 
Minnesota may apply to contracts in other parts of the country, the 
Chief, U.S. Forest Service has determined that there is a SOPI for 
extending up to 1 year certain National Forest System FS-2400-6/6T and 
FS-2400-13/13T contracts. This will allow any purchaser with a 
qualifying National Forest System FS-2400-6/6T timber sale or FS-2400-
13/13T stewardship contract to defer operations while the Forest 
Service evaluates market conditions to determine if additional market 
related relief measures are needed. To be eligible, a contract must 
terminate on or before December 31, 2013, and meet at least one of the 
following conditions; (1) Require removal of biomass material, (2) 
require removal of balsam fir, (3) have been appraised to a processing 
facility that has permanently closed, or (4) have been appraised to a 
processing facility that has not operated for at least 6 months prior 
to requesting an extension under this authority. This finding does not 
apply to (1) Salvage sale contracts that were sold with the objective 
of

[[Page 65170]]

harvesting deteriorating timber, (2) contracts the Forest Service 
determines are in urgent need of harvesting due to deteriorating timber 
conditions that developed following award of the contract, (3) 
contracts that are in urgent need of harvesting to accomplish fuel 
reduction objectives in wildland urban interface areas, (4) contracts 
with an original term of less than 2 years, (5) contracts that are in 
breach, or (6) contracts when the purchaser's processing facility has 
not operated during the preceding 6 months for reasons qualifying for a 
contract term addition. For contracts extended pursuant to this 
finding, periodic payment dates that have not been reached shall be 
adjusted 1 day for each additional day of contract time granted. Total 
contract length shall not exceed 10 years including this extension. To 
receive an extension and periodic payment deferral, purchasers must 
make a written request to the appropriate Contracting Officer prior to 
November 30, 2013. Purchasers must also agree to release the Forest 
Service from all claims and liability if a contract is suspended, 
modified, or terminated after a contract is extended pursuant to this 
SOPI.
    To receive an extension and periodic payment deferral, purchasers 
must make a written request to the appropriate Contracting Officer 
prior to November 30, 2013. Purchasers must also agree to release the 
Forest Service from all claims and liability if a contract is 
suspended, modified, or terminated after a contract is extended 
pursuant to this SOPI.

    Dated: October 16, 2012.
Thomas L. Tidwell,
Chief, Forest Service.
[FR Doc. 2012-26245 Filed 10-24-12; 8:45 am]
BILLING CODE 3410-11-P