jurisdiction: US

text: b'U.S. Department of the Interior\nOffice of Inspector General\n\n\n\n\n AUDIT REPORT\n\n\n SALVAGE TIMBER PROGRAM,\n BUREAU OF LAND MANAGEMENT\n\n REPORT NO. 98-I-399\n APRIL 1998\n\x0c C-I-N-BLM-00 l-97 _\n\n\n United States Department of the Interior\n OFFICE OF INSPECTOR GENERAL\n Washington, D.C. 20240\n\n\n\n\n AUDIT REPORT\n\n\nMemorandum Am 2 1998\n\nTo: Director, Bureau of Land Management\n\nFrom: Robert J. Williams\n Acting Inspector General\xe2\x80\x99\n\nSubject: Audit Report on the Salvage Timber Program, Bureau of Land Management\n (No. 98-I-399 >\n\n\n INTRODUCTION\n\nThis report presents the results of our audit of the Bureau of Land Management\xe2\x80\x99s Salvage\nTimber Program. The objective of the audit was to determine whether the Bureau\n(1) conducted sales of blown-down diseased, or fire-damaged timber in an expedient manner;\n(2) adequately pursued instances of timber thefl; and (3) used the Forest Ecosystem Health\nand Recovery Fund as the Congress intended.\n\nBACKGROUND\n\nThe Bureau of Land Management is responsible for managing, protecting, and improving\n270 million acres of public land, including about 45 million acres of forest land in 11 western\nstates and Alaska. The Bureau administers an additional 2.4 million acres of forest land in\nwestern Oregon, which include public domain lands, the revested Oregon and California\nRailroad grant lands, and the reconveyed Coos Bay Wagon Road grant lands.\n\nThe term \xe2\x80\x9csalvage timber sale\xe2\x80\x9d is defined by the Bureau as a timber sale designed to remove\ndiseased or insect-infested trees; dead, damaged, or downed trees; or trees affected by fire or\nimminently susceptible to disease or insect attack. Such sales may also include removal of\nassociated trees for purposes of ecosystem rehabilitation. According to Bureau officials, it\nis important that salvage timber is offered for sale as soon as practicable to prevent additional\ndamage to adjacent green timber and also to prevent further deterioration of the damaged\ntimber. Additionally, drought conditions in the western states over the past several years have\nsignificantly increased the occurrences and effects of forest wildfires and the subsequent death\nof trees. The drought conditions have also contributed to the increased occurrences and\n\x0cseverity of insect outbreaks and resultant bug-killed timber, creating the need for more\nsalvage timber sales. As a result, damaged timber was placed as the highest priority in the\nBureau\xe2\x80\x99s annual timber sales plans. However, the Bureau said that resources were not\nadequate to expeditiously market these sales and that therefore a large backlog of salvage\ntimber projects was created.\n\nIn order to minimize the loss of merchantable volume\xe2\x80\x99 and to improve forest conditions, the\nCongress established the Forest Ecosystem Health and Recovery Fund on October 5, 1992.\nThe Fiscal Year 1993 Department of the Interior and Related Agency Appropriation Act\n(Public Law 102-38 1) created this special fund in the U.S. Treasury, which was \xe2\x80\x9cto be derived\nhereafter from the Federal share of moneys received from the disposal of salvage timber\nprepared for sale from the lands under the jurisdiction of the Bureau of Land Management,\nDepartment of the Interior.\xe2\x80\x9d This Act places requirements on the way the Bureau may spend\nthese mnds and also states that the formulas for the distribution of timber sales receipts\nspecified by law are not changed. Specifically, Public Law 102-38 1 states in part:\n\n The money in this fund shall be immediately available to the Bureau of Land\n Management without further appropriation, for the purposes of planning and\n preparing salvage timber for disposal, the administration of salvage timber\n sales, and subsequent site preparation and reforestation. Nothing in this\n provision shall alter the formulas currently in existence by law for the\n distribution of receipts for the applicable lands and timber resources.\n\nIn regard to existing laws, the formulas for distribution of timber sales receipts (including\nsalvage timber) from Oregon and California Railroad grant lands were established by Title II\nof the Oregon and California Grant Lands Act of 1937. Under the Act, timber sales proceeds\nwere to be divided as follows: 50 percent to the Federal Government and 50 percent to the\n18 western Oregon counties that contain Oregon and California Railroad grant lands.2 The\nproceeds from timber sales on Coos Bay Wagon Road lands were to be divided as follows:\n25 percent to the Federal Government and 75 percent to Coos and Douglas Counties. The\nFederal share of timber receipts from public domain lands is 96 percent, with the remaining\n4 percent going to the state where the salvage sale occurred.\n\nIn response to environmental concerns, including old growth forest issues and the presence\nof the Northern Spotted Owl, restrictions on harvesting timber significantly decreased sales\non Government lands in western Oregon. As a result, the 18 counties\xe2\x80\x99 shares of proceeds\nfrom timber sales on the Oregon and California Railroad grant lands and on the Coos Bay\nWagon Road lands were substantially decreased. In order to stabilize the counties\xe2\x80\x99 revenues,\nappropriation language for fiscal years 1991, 1992, and 1993 included a provision for\n\n\n\n\xe2\x80\x98Salvage timber of commercially acceptable quality.\n\n3-h e fll\n o owing Oregon counties (there are no Cal&omia counties in the Oregon and California grant lands) receive\n50 percent ofthe timber receipts, minimum payments, or special payments: Benton, Clackamas, Columbia, Coos,\nCurry, Douglas, Jackson, Josephine, Klamath, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook,\nWashington, and Yamhill.\n\n 2\n\x0cminimum payments to the Oregon and California counties, which would ensure that a\ncounty\xe2\x80\x99s payments would be equal to the annual average of the 5-year period between 1986\nand 1990 (the payment could not exceed total receipts collected). In fiscal year 1993, the\nCongress passed the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66)\nwhich established special county payments for fiscal years 1994 through 2003 based on an\nannually decreasing percentage of the 5-year average of 1986 through 1990. For example,\nspecial payments to the Oregon and California counties started at $78.6 million in fiscal year\n1994 and are gradually reduced to $53.6 million in fiscal year 2003. These \xe2\x80\x9cspecial\npayments\xe2\x80\x9d temporarily replaced the counties\xe2\x80\x99 share of actual timber receipts for the Oregon\nand California Railroad grant lands and the Coos Bay Wagon Road lands. For fiscal years\n1999 through 2003, the amount to be paid to the counties is the greater of the special\npayment amount established in Public Law 103-66 or the counties\xe2\x80\x99 50 percent share of\ntimber sales proceeds.\n\nSCOPE OF AUDIT\n\nTo accomplish our objective, our audit of the Salvage Timber Program included a review of\ndata relative to the initiation and final disposition of timber theft cases and a review of salvage\ntimber projects, including allocation of sales receipts and project expenditures to the Forest\nEcosystem Health and Recovery Fund.\n\nOur audit was conducted in accordance with the \xe2\x80\x9cGovernment Auditing Standards,\xe2\x80\x9d issued\nby the Comptroller General of the United States. Accordingly, we included such tests of\nrecords and other auditing procedures that were considered necessary under the\ncircumstances. We requested information from 24 Bureau offices (Appendix 1) and discussed\nForest Ecosystem Health and Recovery Fund projects, expenditures, receipts, and/or policy\nand procedures with personnel from these offices. Each field office contacted had used the\nFund to conduct salvage timber projects and had eliminated its respective backlog of salvage\nprojects. We also reviewed law enforcement records and obtained other information from\nthe Bureau\xe2\x80\x99s Law Enforcement Office in Boise, Idaho, and from Special Agents in the\nCalifornia and Utah State Offices.\n\nAs a part of our audit, we evaluated the system of internal controls related to salvage timber\nsales and the Forest Ecosystem Health and Recovery Fund to the extent we considered\nnecessary.\n\nWe also reviewed the Department\xe2\x80\x99s Accountability Report for fiscal year 1996, which\nincludes information required by the Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982, and\nthe Bureau\xe2\x80\x99s annual assurance statement to determine whether any reported weaknesses were\nwithin the objective and scope of our review. Neither the Accountability Report nor the\nBureau\xe2\x80\x99s assurance statement addressed the Bureau\xe2\x80\x99s Salvage Timber Program.\n\n\n\n\n 3\n\x0cPRIOR AUDIT COVERAGE\n\nNeither the Office of Inspector General nor the General Accounting Office has issued any\naudit reports during the past 5 years on the Bureau\xe2\x80\x99s Salvage Timber Program or on the\nForest Ecosystem Health and Recovery Fund.\n\n RESULTS OF AUDIT\n\nWe found that the Bureau of Land Management conducted salvage timber sales in a timely\nmanner and used the Forest Ecosystem Health and Recovery Fund to eliminate the backlog\nof salvage timber projects. Furthermore, our review disclosed that timber thefts did not\nappear to be a significant problem on lands administered by the Bureau. However, the\nBureau may have been inappropriately depositing both the counties\xe2\x80\x99 and Federal shares of\nsalvage timber sales proceeds into the Fund rather than just the Federal share specified by the\nCongress in Public Law 102-38 1. The counties\xe2\x80\x99 share of proceeds for Oregon and California\nGrants Lands was established at 50 percent of the sales receipts by the Oregon and California\nGrant Lands Act of 1937. Bureau financial officials said that they believed that Public\nLaw 103-66, which provides for temporary special payments to the Oregon and California\nRailroad grant lands counties except if the counties\xe2\x80\x99 50 percent share is greater than the\nspecial payment, eliminated the counties\xe2\x80\x99 shares of receipts and thereby authorized the Bureau\nto keep 100 percent of the proceeds from salvage timber sales. Since the U.S. Treasury has\nbeen making special payments to the counties in lieu of the counties\xe2\x80\x99 50 percent share of\nactual receipts, we believe that the counties\xe2\x80\x99 shares should be deposited into the U.S.\nTreasury General Fund account to partially offset those special payments. As of August 3 1,\n 1997, the Bureau had deposited $5.2 million of the counties\xe2\x80\x99 shares of salvage timber sales\nreceipts from fiscal years 1994 through 1997 into the Forest Ecosystem Health and Recovery\nFund. Based on our review, the Bureau requested a Solicitor\xe2\x80\x99s opinion on this matter on\nMay 28, 1997, in which it stated that its interpretation \xe2\x80\x9cof legislation [Public Law 103-661 is\nthat the . . . salvage timber receipts are entirely the Federal Government\xe2\x80\x99s share during the\nspecial payment years.\xe2\x80\x9d\n\nThe Forest Ecosystem Health and Recovery Fund has provided Bureau field offices with the\nadditional funding necessary to expedite salvage timber sales and reduce the backlogged\nvolume of salvage timber. Sales of salvage timber have increased from 10.4 million board feet\nin 1993 to nearly 39 million board feet in 1997. During the 5 years since the implementation\nof the Fund, the Bureau has sold over 141 million board feet of salvage timber and collected\nreceipts of about $23.5 million. We contacted 17 Bureau field offices, and none of those\nfield offices reported a backlog of salvage timber.\n\nOur audit also disclosed that the number of timber thefts that occurred during fiscal years\n1994 through 1996 was minimal. Data provided by the National Law Enforcement Office\nshowed that an average of 12 timber theft cases were opened per state per year. The average\nloss per timber theft case was less than $1,400, based on the law enforcement officers\xe2\x80\x99\nestimates of the value of the timber or other forest products removed. During this period,\ntimber sales fluctuated between about $75 million and $100 million per year, and the loss\n\n\n 4\n\x0cfrom timber theft was estimated at about $100,000 per year.3 Furthermore, according to the\nBureau\xe2\x80\x99s Uniform Crime Reporting System, about 50 percent of the timber theft cases\nreported were cleared by arrest or other means. While law enforcement officials did not\nprovide statistics on the dollar value of cases cleared, they stated that they had had greater\nsuccess working and obtaining prosecutions on the larger dollar cases. They also stated that\nmany of the smaller cases involved theft of firewood or unauthorized tree cutting while roads\nwere being constructed and that it was often difficult to obtain prosecution on these cases.\nConsequently, after reviewing all of the information provided by the Bureau, we concluded\nthat timber thefts did not appear to be a significant problem on Bureau-managed lands.\n\nThe Bureau\xe2\x80\x99s accounting records showed that during fiscal years 1994 and 1995 (through\nJune 1995) the Oregon and California counties\xe2\x80\x99 shares of salvage timber receipts were\ndeposited into the U.S. Treasury General Fund. However, on June 16, 1995, Bureau officials\ndecided that the counties\xe2\x80\x99 share could be deposited into the Bureau\xe2\x80\x99s Forest Ecosystem\nHealth and Recovery Fund rather than the U.S. Treasury General Fund.\n\nWe reviewed correspondence which indicated that during 1995 and 1996, Bureau officials\ndiscussed this matter with the Department\xe2\x80\x99s Budget Office, which requested a Solicitor\xe2\x80\x99s\nopinion as to whether the Bureau could transfer 100 percent of salvage timber receipts into\nthe Fund. The Solicitor did not provide a written opinion. However, correspondence dated\nApril 20, 1995, between the Department\xe2\x80\x99s Budget Office and the Bureau stated:\n\n The Solicitor\xe2\x80\x99s office thought that such an interpretation was reasonable, but\n suggested that BLM/DOI [Bureau of Land Management/Department of the\n Interior] consult with OMB [Office of Management and Budget] and the\n relevant Congressional committees before beginning to handle the receipts in\n that way.\n\nCorrespondence from the Department\xe2\x80\x99s Budget Office also stated that the Bureau had not\nconsulted with either the Office of Management and Budget or the relevant Congressional\ncommittees. Nevertheless, on June 16, 1995, the Bureau\xe2\x80\x99s Chief, Division of Finance,\nauthorized the transfer of 100 percent of salvage timber receipts to the Fund for fiscal years\n1994 through 2003 _ The memorandum authorizing the transfers indicated that the Solicitor\nhad provided verbal assurance that the Bureau\xe2\x80\x99s interpretation of the law was reasonable.\n\nThe Congress initially appropriated $1 million for the Forest Ecosystem Health and Recovery\nFund. For fiscal years 1993 to 1997 (through July 3 1, 1997), salvage timber sales receipts\nof $23.5 million had been deposited into the Fund. The Oregon and California and Coos Bay\nWagon Road counties\xe2\x80\x99 shares of receipts deposited into the Fund totaled about $5.2 million\nfor fiscal years 1993 to 1997 (through August 3 1, 1997). Because the Bureau deposited all\nsalvage timber sales receipts into the Fund, the U.S. Treasury did not receive any revenue\nfrom the sale of salvage timber, but it pays the counties a share of those receipts (Public Law\n\n\n\n%otal estimated timber thefts for calendar years 1994,1995, and 1996 minus the cases cleared by arrest or other\nmeans.\n\n 5\n\x0c 103-66) through an appropriation based on the average sales receipts from fiscal years 1986\nthrough 1990.\n\nPublic Law 102-38 1 authorized the Bureau to transfer only the Federal share of salvage\ntimber receipts to the Forest Ecosystem Health and Recovery Fund (which was 50 percent\nof the sales receipts Tom Oregon and California lands and 25 percent from Coos Bay Wagon\nRoad lands). \xe2\x80\x98Without specific authorization to deposit 100 percent of the salvage timber\nreceipts into the Fund, we believe that the $5.2 million counties\xe2\x80\x99 share, which is 50 percent\nof the salvage timber sales proceeds from Oregon and California Railroad grant lands (about\n$5,150,000) and 75 percent of the salvage timber sales proceeds from Coos Bay Wagon Road\nlands (about $SO,OOO),should be deposited into the General Fund of the U.S. Treasury.\n\nDuring our exit conference, we recommended that the Bureau of Land Management obtain\na formal written opinion from the Solicitor\xe2\x80\x99s Offke as to whether the Bureau can retain\n 100 percent ofthe salvage timber sales receipts. The Bureau agreed, and on May 28, 1997,\nthe Director of the Bureau requested a Solicitor\xe2\x80\x99s opinion on the issue of whether and/or\nhow much of the counties\xe2\x80\x99 share of salvage timber receipts should be deposited into the\nForest Ecosystem Health and Recovery Fund.\n\nConclusion\n\nOn January 29, 1998, the Deputy Associate Solicitor, Division of Law, Office of the Solicitor,\nresponded to the Bureau\xe2\x80\x99s request for an opinion (see Appendix 2) on the Bureau\xe2\x80\x99s retention\nof 100 percent of the salvage timber receipts, The Solicitor\xe2\x80\x99s opinion stated:\n\n Although there is clearly ambiguity about how \xe2\x80\x9cFederal share\xe2\x80\x9d should be\n interpreted, we believe the structure for payment of the \xe2\x80\x9cspecial payment\n amount\xe2\x80\x9d in OBRA 93 [the 1993 Omnibus Budget Reconciliation Act] creates\n a sound basis for concluding that the BLM\xe2\x80\x99s [bureau of Land Management\xe2\x80\x99s]\n practice is correct.\n\n We conclude that through FY [fiscal year] 2003, in any year when the\n payments to the counties are made from a General Fund appropriation under\n OBRA 93 [ 1993 Omnibus Budget Reconciliation Act), all salvage timber fee\n receipts will be retained by the Federal government and deposited to the\n FEHRF [Forest Ecosystem Health and Recovery Fund]. Between FY 1999\n and 2003, if the payments are made from timber fee receipts under the pre-\n OBRA 93 formula, only the portion of such receipts retained by the Federal\n government should be deposited to the FEHRF.\n\nBased on this opinion, we are not making any recommendations on this matter,\n\n\n\n\n 6\n\x0cOther Matters\n\nDuring our survey, we noted inconsistencies in the way the Bureau\xe2\x80\x99s forestry program\nmanagers interpreted guidance relative to Forest Ecosystem Health and Recovery Fund\nexpenditures and deposits. Although these instances were not systemic, we believe that they\nshould be corrected.\n\n Forest Ecosystem Health and Recovery Fund Expenditures. Regarding\nexpenditures of the Forest Ecosystem Health and Recovery Fund (Subactivity 5900), the\nBureau\xe2\x80\x99s fiscal year 1996 Fund Coding Handbook states:\n\n [The Forest Ecosystem Health and Recovery Fund] includes all costs\n associated with the salvage of dead and dying timber on forest and woodland\n ecosystems on Public Domain Lands and on Oregon and California Railroad\n grant lands and Coos Bay Wagon Road lands in western Oregon. [It] includes\n maintenance and enhancement of the forest and woodlands ecosystems\n effected by fire, disease, insects etc. It includes only activities related to the\n sale of salvage timber and the subsequent site preparation, reforestation and\n maintenance of these sites. No urogram oversight or administrative costs\n should be coded to this account [Emphasis added.]\n\nWe believe that some expenditures which were charged to the Fund should have been charged\nto the Bureau\xe2\x80\x99s appropriated tinds budgeted for the forestry program as follows:\n\n - In 1996, the Oregon, Idaho, and California State Of-Iices charged $191,405,\n$78,645, and $78, respectively, to the Fund for allocation of state office overhead, while the\nAlaska, Arizona, Montana, New Mexico, and Wyoming State Offices did not charge the Fund\nfor overhead. In our opinion, charging overhead costs to the Fund directly conflicts with the\nHandbook instructions that state, \xe2\x80\x9cNo program oversight or administrative costs should be\ncoded to this account.\xe2\x80\x9d\n\n - The Arizona Strip District Office is spending an estimated $3.5 million of Fund\nmoney on a research project to restore a ponderosa pine ecosystem to pre-European\nsettlement conditions. The project is being designed by a university and basically involves the\nfollowing: removing young trees, leaving the old growth trees, burning the underbrush, and\nseeding grasses. In our opinion, the use of the Fund for this project is not consistent with\nprovisions of the Fund Coding Handbook because the area has not been affected by fire,\ndisease, or insects. In addition, this project does not appear to meet the definition of salvage\ntimber provided in Bureau Instruction Memorandum No. 95-132. Specifically, the\nmemorandum states:\n\n The term \xe2\x80\x9csalvage timber sale\xe2\x80\x9d is defined as a timber sale designed to remove\n diseased or insect-infested trees; dead, damaged or downed trees; or trees\n affected by fire or imminently susceptible to disease or insect attack. Such\n sales may also include removal of associated trees for purposes of ecosystem\n rehabilitation.\n\n 7\n\x0cSince this project does not appear to meet Bureau requirements, we believe that it should be\nsubject to the Bureau\xe2\x80\x99s budget process and funded with appropriated forestry funds.\n\n Forest Ecosystem Health and Recovery Fund Deposits. Our review of deposits\nmade to the Fund (Subactivity 5900) during fiscal years 1995, 1996, and 1997 disclosed that\nthe Craig, Colorado, and the Worland and Rawlins, Wyoming, field offices posted firewood\nand fencepost sales receipts to the Fund. During the Bureau\xe2\x80\x99s 1996 Alternative Management\nControl Review of the Fund, officials of the Prineville District Office stated that they would\nlike the authority to deposit firewood permit receipts into the Fund. We believe that the\nBureau should establish a policy as to whether the estimated $200,000 per year in firewood\nand fencepost receipts from the public domain lands should be retained by the Bureau in the\nForest Ecosystem Health and Recovery Fund or deposited into the U.S. Treasury General\nFund.\n\nDuring the summer of 1996, an interagency review team concluded that considerable variation\nexisted in the types of timber sales identified by field offices as meeting the definition of\nsalvage timber sales, ranging from sales of mostly dead trees to sales of mostly live trees.\nThe team, in its final report, stated that the broad definition of salvage timber was a significant\nfactor contributing to this situation. On October 8, 1996, the interagency team issued a\nreport which recommended that the Bureau and the U.S. Forest Service develop a common\ndefinition of salvage timber which is within the limits of their underlying legislative authorities.\nA March 4,1997, followup action plan developed by the interagency team recommended a\nlegislative proposal to address this issue. This proposal had not been submitted to the\nCongress as of September 1, 1997. We believe that the Bureau of Land Management should\nreview these matters to ensure that the Forest Ecosystem Health and Recovery Fund is\nadministered effectively and efficiently.\n\nAlthough the report did not contain any recommendations, the Director, Bureau of Land\nManagement, in a March 3 1, 1998, response to the preliminary final report (Appendix 3)\nstated that because of our report, \xe2\x80\x9cSeveral items were brought to BLM\xe2\x80\x99s [Bureau of Land\nManagement\xe2\x80\x99s] attention which will strengthen the integrity of the program.\xe2\x80\x9d\n\nThe legislation, as amended, creating the Office of Inspector General requires semiannual\nreporting to the Congress on all audit reports issued, actions taken to implement audit\nrecommendations, and identification of each significant recommendation on which corrective\naction has not been taken.\n\nWe appreciate the assistance of Bureau personnel in the conduct of our audit.\n\n\n\n\n 8\n\x0c c\n\n\n\n\n APPENDIX 1\n\n OFFICES CONTACTED OR VISITED\n\n OFFICES CONTACTED OR VISITED LOCATION\n\nNational Oflices\n Bureau of Land\n Management Budget OfIke Washington D.C.\n Bureau of Land\n Management Finance Office Washington D.C.\n Forest Ecosystem Health\n and Recovery Fund Program Coordinator Boise, Idaho\n Forestry Program Office Washington, D.C.\n National Business Center* Lakewood, Colorado\n National Law Enforcement Office Boise, Idaho\n Office of the Solicitor Washington, D.C.\nArizona\n Arizona State Office Phoenix, Arizona\n Arizona Strip District* St. George, Utah\nCalifornia\n Eagle Lake Resource Area Office Susanville, California\n Folsom Resource Area Folsom, California\nColorado\n Kremmling Resource Area Kremmling, Colorado\n Royal Gorge Resource Area Office Canon City, Colorado\nIdaho\n Idaho State Office Boise, Idaho - .\n Upper Columbia/Salmon Cleat-water Districts Coeur d\xe2\x80\x99Alene, Idaho\nMontana\n Butte District Office Butte, Montana\nOregon\n Oregon State Office Portland, Oregon\n Coos Bay District Offke North Bend, Oregon\n Eugene District Office Eugene, Oregon\n Klamath Falls Resource Area Klamath Falls, Oregon\n Medford District Office Medford, Oregon\n Roseburg District Office Roseburg, Oregon\nWyoming\n Worland District Office Worland, Wyoming\n Rawlins District office Rawlins, Wyoming\n\n\n\n\n* Offices visited.\n\n\n\n\n 9\n\x0c APPENDIX 2 *\n Page 1 of 6\n\n United States Department of the Interior\n OF\'F\'XCEOFTH.ESOLJCITOR\n Wrshington,D.C204(0\n\n\n\n\nMemorandum\n\nTo: Director, Bureau of Land Management\n\nFrom : Deputy Associate Solicitor - Division of General Law\n\nSubject: Federal Share of Salvage Timber Receipts\n\nIn a memorandum of May\xe2\x80\x9828, 1997 regarding the handling of salvage\ntimber receipts from timber sales in Western Oregon from Oregon\nand California (O&C) and Coos Bay Wagon Road (CBWR) grant lands,\nthe Bureau of Land Management (BLM) requested an opinion on\nwhether BIN has been correct in depositing all salvage timber\nreceipts from O&C and CBWR lands to the Forest Ecosystem Health\nand Recovery Fund (FEHRF). BLM has interpreted the statutory\nlanguage establishing the FEHRF and the Omnibus Budget\nReconciliation Act of 1993 as permitting this treatment of\nsalvage timber receipts. The Office of Inspector General, in its\nauditing of BLM\'s salvage timber program, has questioned this\ninterpretation. We find that BLM\'s interpretation of these laws\nis reasonable and therefore conclude BLM\'s treatment of these\nfunds has been correct.\n\n\n\nPrior to fiscal year 1994, in accordance with statutes enacted in\n1937 and 1939,\'(1937 and 1939 statutes), 18 counties in Western\nOregon (collectively, the counties) received as the result of\ntimber sales on O&C and CBWR grant lands in the counties a share\nof timber harvest stumpage fee receipts through a permanent\nindefinite appropriation of these fee receipts. These fee\nreceipts included stumpage fees from both so-called "green" or\n\n\n\n\n 1 Title II of the Act of August 28, 1937, 50 Stat. 875,\nchapter 876; 43 U.S.C. 1181f, and the Act of May 24, 1939, 53\nStat. 753, chapter 144; 43 U.S.C. 1181f-1 et seq.\n\n 1\n\n\n\n\n 10\n\x0c APPENDIX !?\n Page 2 of 6\n\n\n\n\n healthy timber, and "salvage" timber; i.e., timber that has been\n darnaged by fire, insects, or disease.\n\nUnder the 1937 and 1939 statutes, 50 percent of timber receipts\n from O&C grant lands were paid to O&C counties, and 75 percent of\ntimber receipts from CBWF? grant lands were paid to CBWR counties.\nThe remaining receipts were deposited in the General Fund of the\nUnited States Treasury (Treasury). In both fiscal years 1992 and\n1993) Congress appropriated additional funds in the annual\nDepartment of the Interior (DOI) appropriation acts to supplement\nthe counties\' share of timber receipts because receipts from\ntimber harvest stumpage fees in those years were lower than\nhistorical levels. The lower level of receipts had reduced the\npayments to the counties to a level below that which Congress\nthought was adequate.\n\n t of Fnrest Ecwvqtmth & RPCOV~ Fa\n\nIn the fiscal year 1993 DO1 appropriation acta, Congress\nestablished the FEHRF as a new permanent indefinite appropriation\nto BLM, using receipts from salvage timber sales. The\nappropriations language is as follows:\n\n "[There is] . . . established in the Treasury of the United\n States a special fund to be derived hereafter from the\n -al sha of moneys received from the disposal of\n salvage timber prepared for sale from the lands under the\n jurisdiction of the Bureau of Land Management, Department of\n the Interior. The money in this fund shall be immediately\n available to the Bureau of Land Management without further\n appropriation, for the purposes of planning and preparing\n salvage timber for disposal, the administration of salvage\n timber sales, and subsequent site preparation and\n reforestation."\n\nThis permanent indefinite appropriation supplements BLM\'s annual\nappropriations by several million dollars. At the time of the\npassage of the 1993 DO1 appropriation act and its establishment\nof FEHRF, the split of timber receipts between the counties and\n\n\n 2\n FY 1993 Interior Appropriation Act, Public Law 102-381,\n106 Stat. 1374, 1376 (October 5, 1992).\n\n -2 -\n\n\n\n\n 11\n\x0c c\n\n\n APPENDIX 2\n Page 3 of 6\n\n\n Federal government was governed by the 1937 and 1939 statutes,\n which, as indicated above, provided for a SO/SO or 75/\'25 split of\n all receipts between the counties and the Federal gov,c:=gent.\n\n\n\n Almost a year after the creation of the F\'EXRF, Congress, in the\n 1993 Omnibus Budget Reconciliation Act3 (OBRA 931, changed for\n fiscal years 1994 through 2003 the arrangement for making the\n payments to the counties. This new law changed both the method\n of determining the payment amounts and the source of funds for\n making the payments.\n\n Under OBRA 93, the payment to the counties is called the "special\n payment amount", and the formula for determining the amount is as\n follows: the "special payment amount" equals the average level\n of receipts from fiscal.years 1986 through 1990 multiplied by a\n declining percentage, beginning with 85 percent for fiscal year\n.1994) and declining by 3 percent per year through fiscal year\n 2003. From fiscal year 1999 through fiscal year 2003, the\n payments will be in accordance with the law in effect before OBRA\n 93, or the "special payment amount" whichever is greater.\n Therefore, the payments to the counties, through fiscal year\n 1998, and potentially in fiscal years 1999-2003, are no longer\n related to current levels of timber receipts, and the payments\n are made through an appropriation from the General Fund of the\n Treasury, not from timber receipts.\'\n\n\n 3\n Omnibus Budget Reconciliation Act of 1993, Public\nLaw 103-66, 107 Stat. 682 (August 10, 1993).\n 4\n The original OBRA 93 language was deficient in that it\ndid not identify a source of funds, one of the requirements of an\nappropriation. In an opinion dated October 5, 1994, Solicitor\nLeshy stated that OBRA 93 had not repealed the authority to make\npayments to the counties from timber receipts, but had attempted\nto provide an alternative source from which the payments could be\nmade. Therefore, because of the deficiency in OBRA 93, the\npayment for fiscal year 1994 was made from timber receipts based\non the old formula. Later, Congress amended OBRA 93 to remedy\n (continued...)\n\n -3 -\n\n\n\n\n 12\n\x0c APPENDIXi\n Page 4 of 6\n\n\n\n Beginning in fiscal year 1995, payments to the counties have been\n made with appropriations from the Generai Fund, and BLM has\n deposited all "green", that is, non-saivage, timber fee receipts\n to the General Fund. All salvage timber fee receipts, except for\n a small amount from public domain lands, which were not affected\n by OBm 93, have been deposited to the FBHRF\'.\n\n\n\nWhether BLM\'s practice has been correct depends upon whether the\n "Federal share" is now 100 percent of salvage timber fee\nreceipts. Therefore, you asked if the definition of "Federal\nshare" of salvage timber fee receipts refers to the percentage\nsplit that existed at the time the FBBRF was established, or\nwhether the enactment of OBRA 93 changed the meaning of the term.\nPut another way, the question is whether the Congress, in\ncreating the FEZRF (using the term "Federal share") and in\nenacting OBRA 93, intended to appropriate to the BLM 50 or 25\npercent of salvage timber receipts, or whether Congress intended\nto appropriate whatever amount of receipts was not paid by the\nFederal government to the counties6.\n\n\n \xe2\x80\x98(. . .continued)\nthe deficiency in the appropriations language by specificaliy\nproviding that the special payment would come from the General\nFund of the Treasury. .-Public Law 103-443, 108 Stat. 4631..\n 5 BLM has been depositing 100 percent of salvage timber\nreceipts to the FBHRF based on informal advice from the\nSolicitor\'s Office. Memorandum dated June 16, 1995, to Team\nLeader, Budget and Finance Team, WO-880, signed by Michael Kirby.\n 6 The legislative history of the FY 1993 appropriations act\nis not very illuminating on the question. The Senate report\nstates, "The from timber salvage receipts are to be\ndeposited in the \'Forest ecosystems health and recovery account\'\n. . .n , S. Rep. No. 102-345 at 12 (1993) (emphasis added),\nindicating that fi salvage timber receipts retained by the\nFederal government should be deposited to the FISHRF. At the time\nthe report was written, however, there was no choice in the\n (continued...)\n\n -4 -\n\n\n\n\n 13\n\x0c APPENDIX\xe2\x80\x982\n Page 5 of 6\n\n\n\n\n Although there is clearly ambiguity about how \'*Federal share"\n should be interpreted, we believe the structure for payment of\n the "special payment amount" in OBBA 93 creates a sound basis for\n concluding that BLM\'s practice is correct. When Congress\n established in OBRA 93 that the counties would receive their\n "special payment amount" from the General Fund of the Treasury\nrather than the timber receipts themselves, Congress intended\nthat for the years covered by OBRA 93, the salvage timber\nreceipts were not to be deposited for the benefit of the\ncounties. Thus, under our interpretation, the counties have no\n"share" of the salvage timber receipts for the years covered by\nOBBA 93, with the result that all the receipts are the "Federal\nshare". To conclude that the "Federal share" is not comprised of\nall the salvage timber receipts would place the receipts that had\nformerly been paid to the counties in a "limbo" status, and would\nnegate the philosophy underlying the enactment of OBRA 93.\n\nWe do not believe that references in 43 O.S.C. 5 118lf(c) and\n1181f-4 (portions of the statutes creating the mechanism for\npaying the counties percentages of timber fee receipts) to\nmaximum percentages of receipts available for appropriation for\nthe administration of the O&C and CEWEt programs are in any way\ndispositive of the question at issue. When Congress used the\nterm "Federal share" in the FY 1993 DO1 appropriations act rather\nthan referring to 43 U.S.C. \xc2\xa7I 1181f and 1181f-1 or particular\npercentages of salvage timber fee receipts it was appropriating,\nit eliminated the upper limit of what the "Federal share" could\nbe. Thus, when it enacted OBRA 93, Congress established the\nspecial payment amount for a fixed period of years and, as\ndiscussed above, increased the amounts of the "Federal share" to\n100 percent.\n\n\n\n\n et... continued)\nhandling of those receipts. The pre-OBFLA 93 statutory\ndistribution was required then, and depositing all salvage timber\nreceipts to the FENRF was clearly not authorized. A fair reading\nof this language is that it was addressing the Federal share of\ntimber receipts, which was at that time only a partial share of\nthe receipts.\n\n\n - 5 -\n\n\n\n\n 14\n\x0cI : APPENDIX 2\n Page 6 of 6\n\n\n\n\n We believe this interpretation of "Federal share" to be\n reasonable under all the circumstances preeented here. w\n 467 U.S. 837\n\n\n\n\n Based on the above analysis, we conclude that through F\'Y 2003, in\n any year when the payments to the counties are made from a\n General md appropriation under OBRA 93, all salvage timber fee\n receipts will be retained by the Federal government and deposited\n to the FEHRF. Between FY 1999 and FY 2003, if the payments are\n made from timber fee receipts under the pre-OBRA 93 formula, only\n the portion of such receipts retained by the Federal government\n should be deposited to the FEHRF.\'\n\n Questions on this opinion should be directed to Robert H. Mall on\n 208-5216.\n\n\n\n /&J$i$5-szm\n Timothy S. Elliott\n\n\n\n\n 7\n OBRA 93 is silent about the period after FY 2003, with\n the result that the law applicable prior to OBRA 93 will be in\n effect. Nevertheless, the manner of handling the salvage timber\n receipts would remain the same, that is, the portion of salvage\n receipts retained by the Federal government would be deposited to\n the FEHRF.\n\n - 6 -\n\n\n\n\n 15\n\x0c APPENDIX-3\n\n\n United States Department of the Interior\n BUREAU OF LAND MANAGEMENT\n Washington, DC.20240\n\n In Reply Refer To:\n March 30, 1998 5000 (230)\n\n\n\n\n Memorandum\n\nTo: Acting Assistant Inspector General for Audits G-j++\n T&b I-\nThrougdafqA ssistant Secretary, Land and Minerals Management MAR 31 I998\n\nFrom: Director, Bureau of Land Management\n\nSubject: Response to Preliminary Final Advisory Report, Salvage Timber Program,\n Bureau of Land Management, March 1998 (C-IN-BLM-001-97)\n\nFollowing an in-depth review of the Bureau of Land Management\xe2\x80\x99s (BLM) salvage timber\nprogram, the report found no recommendations were necessary. The report found the Bureau\n(1) conducted sales of salvage timber in an expedient manner; (2) adequately controlled the\ntheft of timber from lands administered by this agency; and (3) used the Forest Ecosystem\nHealth and Recovery Fund as Congress intended. This satisfied the objectives of the review.\nThe report concurred with the findings of our Solicitor\xe2\x80\x99s opinion regarding the deposit of\nreceipts from the sale of salvage timber from the Oregon and California counties in western\nOregon.\n\nI appreciate the cooperative and informative nature of this review. Several items were\nbrought to the BLM\xe2\x80\x99s attention which will strengthen the integrity of the program. The BLM\npersonnel were encouraged to cooperate in every way and the report acknowledged their\nassistance. Although a response is not required, I take this opportunity to thank you and your\nemployees for bringing this to a successful conclusion.\n\n\n\n\n 16\n\x0c ILLEGAL OR WASTEFUL ACTMTIES\n SHOULD BE REPORTED TO\n THE OFFICE OF INSPECTOR GENE= BY:\n\n\nSending written documents to: calling:\n\n\n\n Within the Continental United States\n\nU.S. Department of the Interior Our 24-hour\nOffice of Inspector General Telephone HOTLINE\n1849 C Street, N.W. l-800-424-508 1 or\nMail Stop 5341 (202) 208-5300\nWashington, D.C. 20240\n\n\n TDD for hearing impaired\n (202) 208-2420 or\n l-800-354-0996\n\n\n Outside the Continental United States\n\n\n Caribbean RePion\n\nU.S. Department of the Interior (703) 235-9221\nOffice of Inspector General\nEastern Division - Investigations\n1550 Wilson Boulevard\nSuite 410\nArlington, Virginia 22209\n\n\n North Pacific Reeion\n\nU.S. Department of the Interior (700) 550-7428 or\nOffice of Inspector General CoMhd g-01 1-671-472-7279\nNorth Pacific Region\n238 Archbishop F.C. FIores Street\nSuite 807, PDN Building\nAgana, Guam 96910\n\x0cToll Free Numbers:\n l-800-424-5081\n TDD l-800-354-0996 E\n 5\n 5\nFI\xe2\x80\x99S/Commercial Numbers:\n (202) 208-5300\n TDD (202) 208-2420\n\n\n\n1849 C Street, N.W.\nMail Stop 5341\n\x0c'


type: caselaw

jurisdiction: EU

text:
 24.11.2007
 LT
 Europos Sąjungos oficialusis leidinys
 C 283/11
 2007 m. rugpjūčio 22 d.Corte d'appello di Milano (Italija) pateiktas prašymas priimti prejudicinį sprendimą byloje Marco Gambazzi prieš DaimlerChrysler Canada Inc., CIBC Mellon Trust Company
 (Byla C-394/07)
 (2007/C 283/19)
 Proceso kalba: italų
 Prašymą priimti prejudicinį sprendimą pateikęs teismas
 Corte d'appello di Milano
 Šalys pagrindinėje byloje
 Apeliantas: Marco Gambazzi
 Atsakovės: DaimlerChrysler Canada Inc., CIBC Mellon Trust Company
 Prejudiciniai klausimai
 1.
 Ar remdamasis Briuselio konvencijos 27 straipsnio 1 dalyje įtvirtinta viešosios tvarkos išlyga valstybės, kurioje prašoma pripažinti ar vykdyti sprendimą, teismas gali atsižvelgti į aplinkybę, jog valstybės, kurioje buvo priimtas prašomas pripažinti ar vykdyti sprendimas, teismas esant nurodytoms aplinkybėms nutartimi dėl pašalinimo iš proceso (debarment) atėmė iš procese dalyvavusios pralaimėjusios šalies bet kokios gynybos galimybę;
 2.
 arba ar minėtos nuostatos aiškinimas kartu su iš Konvencijos dėl teismų sprendimų abipusio pripažinimo ir vykdymo Bendrijoje 26 ir paskesnių straipsnių išplaukiančiais principais trukdo nacionaliniam teismui laikyti viešosios tvarkos pažeidimu 27 straipsnio 1 dalies prasme civilinio proceso vykdymą, kuriame šaliai teismo nutartimi dėl pašalinimo iš proceso, priimta dėl to, jog nebuvo vykdomi jo nurodymai, buvo neleista pasinaudoti teise į gynybą?