Regulations: 36 CFR 223

Pt. 223

36 CFR Ch. II (7–1–06 Edition)

for the grazing fee, and a bid deposit of
10 percent of the total amount of the
bid.
(e) Qualifications and Deposit Refunds.
Upon opening applicants bids, the authorized officer shall determine whether each bidder meets the qualifications
to hold a permit as set forth in Subpart
A of this part; and shall refund the deposit to any applicant who is not qualified or who does not offer the high bid.
(f) Permit Issuance. The authorized officer shall issue the grazing permit to
the qualified high bidder, except as
provided in paragraphs (f)(1) and (2) of
this section. The successful bidder receives the privilege of obtaining or renewing a grazing permit and is billed
for the occupancy offered and forage
sold.
(1) Priority for Reissuance. On allotments where a current permit is expiring and competition has been held on a
new grazing permit, the current grazing permittee shall have priority for
retaining the permit. Accordingly, an
applicant who holds the permit on the
allotment under bid, who has a satisfactory record of performance under
that permit, and who is not the higher
bidder for the future grazing privileges
in the specified allotment shall be offered the opportunity to match the
high bid and thereby retain the permit.
Should there be more than one existing
permittee in the allotment under bid,
each shall be offered the option of
meeting the high bid; if only one current permittee opts to meet the high
bid, the remaining allowable grazing
use, if any, shall be awarded to the initial high bidder.
(2) Identical Bids. In cases of identical
bids, the selection of the successful applicant shall be made through a drawing.
(g) Computation of Successful Bidder’s
Annual Fee—(1) Annual Fee Basis. The
highest bid received shall establish the
base grazing value in the initial year of
the grazing permit for each allotment
offered. The annual grazing fee shall
equal the base grazing value, adjusted
by the current period’s hay price index
for the relevant subregion as described
in § 222.53(c)(1), and (c)(3), less the value
of any agency required range improvements. This hay price index shall be
based on 3-year average hay prices and

annually reflect the percent change in
the cost of alternative livestock feed.
(2) Grazing Fee Credits for Range Improvements. Any requirements for permittee construction or development of
range improvements shall be identified
through an agreement and incorporated into the grazing permit, with
credits for such improvements to be allowed toward the annual grazing fee.
Fee credits shall be allowed only for
range improvements which the Forest
Service requires an individual permittee to construct or develop on a
specific allotment to meet the management direction and prescriptions in the
relevant forest land and resource management plan and allotment management plan. These improvements must
involve costs which the permittee
would not ordinarily incur under the
grazing permit, must be of tangible
public benefit, and must enhance management of vegetation for resource protection, soil productivity, riparian, watershed, and wetland values, wildlife
and fishery habitat, or outdoor recreation values. Maintenance of range improvements specified in allotment
management planning documents or
the grazing permit, and other costs incurred by the permittee in the ordinary
course of permitted livestock grazing,
do not qualify for grazing fee credits.
(h) No Bids Received. If qualified
sealed bids are not received, the authorized officer reserves the right to
conduct an oral auction using the minimum bid price established under paragraph (b) of this section or to establish
grazing fees through noncompetitive
grazing fee procedures specified in
§ 222.53 of this subpart.
[55 FR 2651, Jan. 26, 1990]

PART 223—SALE AND DISPOSAL OF
NATIONAL FOREST SYSTEM TIMBER
Subpart A—General Provisions
Sec.
223.1 Authority to sell timber.
223.2 Disposal of timber for administrative
use.
223.3 Sale of seized material.
223.4 Exchange of trees or portions of trees.
223.5 Scope of free use granted to individuals.
223.6 Cutting and removal of timber in freeuse areas.

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Forest Service, USDA

Pt. 223
223.65 Appraisal of timber for land exchange; right-of-way, or other authorized
use.
223.66 [Reserved]

223.7 Permission for free use of timber outside free-use areas.
223.8 Delegations of authority to approve
free use by individuals.
223.9 Free use to owners of certain mining
claims.
223.10 Free use to Alaskan settlers, miners,
residents, and prospectors.
223.11 Free use to other Federal agencies.
223.12 Permission to cut, damage, or destroy trees without advertisement.
223.13 Compliance.
223.14 Where timber may be cut.

ADVERTISEMENT AND BIDS
223.80 When advertisement is required.
223.81 Shorter advertising periods in emergencies.
223.82 Contents of advertisement.
223.83 Contents of prospectus.
223.84 Small business bid form provisions on
sales with specified road construction.
223.85 Noncompetitive sale of timber.
223.86 Bid restriction on resale of noncompleted contract.
223.87 Requirements of bidders concerning
exports.
223.88 Bidding methods.
223.89 Relation to other bidders.

Subpart B—Timber Sale Contracts
CONTRACT CONDITIONS AND PROVISIONS
223.30 Consistency with plans, environmental standards, and other management requirements.
223.31 Duration of contracts.
223.32 Timber sale operating plan.
223.33 Redetermination of stumpage rates
and deposits.
223.34 Advance payment.
223.35 Performance bond.
223.36 Volume determination.
223.37 Revegetation of temporary roads.
223.38 Standards for road design and construction.
223.39 [Reserved]
223.40 Cancellation for environmental protection or inconsistency with plans.
223.41 Payment when purchaser elects government road construction.
223.42 Transfer of effective purchaser credits.
223.43 Limitation on amounts of transferred
purchaser credit.
223.44 Collection rights on contracts involved in transfer of purchaser credit.
223.45 Definitions applicable to transfer of
purchaser credit.
223.46 Adjustment of contract termination
date.
223.47 Date of completion of permanent road
construction.
223.48 Restrictions on export and substitution of unprocessed timber.
223.49 Downpayment.
223.50 Periodic payments.
223.51 Bid monitoring.
223.52 Market-related contract term additions.
223.53 Urgent removal contract extensions.

AWARD OF CONTRACTS
223.100 Award to highest bidder.
223.101 Determination of purchaser responsibility.
223.102 Procedures when sale is not awarded
to highest bidder.
223.103 Award of small business set-aside
sales.
CONTRACT ADMINISTRATION
223.110 Delegation to regional forester.
223.111 Administration of contracts in designated disaster areas.
223.112 Modification of contracts.
223.113 Modification of contracts to prevent
environmental damage or to conform to
forest plans.
223.114 Acquisition by third party.
223.115 Contract extensions.
223.116 Cancellation.
223.117 Administration of cooperative or
Federal sustained yield units.
223.118 Appeal process for small business
timber sale set-aside program share recomputation decisions.

Subpart C—Suspension and Debarment of
Timber Purchasers
223.130 Scope.
223.131 Applicability.
223.132 Policy.
223.133 Definitions.
223.134 List of debarred and suspended purchasers.
223.135 Effect of listing.
223.136 Debarment.
223.137 Causes for debarment.
223.138 Procedures for debarment.
223.139 Period of debarment.
223.140 Scope of debarment.
223.141 Suspension.
223.142 Causes for suspension.
223.143 Procedures for suspension.
223.144 Period of suspension.

APPRAISAL AND PRICING
223.60 Determining fair market value.
223.61 Establishing
minimum
stumpage
rates.
223.62 Timber purchaser road construction
credit.
223.63 Advertised rates.
223.64 Appraisal on a lump-sum value or
rate per unit of measure basis.

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§ 223.1
223.145

36 CFR Ch. II (7–1–06 Edition)
Scope of suspension.

the Multiple-Use Sustained-Yield Act
of 1960, as amended (74 Stat. 215; 16
U.S.C. 528–531), and the Forest and
Rangeland Renewable Resources Planning Act of 1974, as amended (88 Stat.
476; as amended, 16 U.S.C. 1600–1614),
and the Program thereunder.

Subpart D—Timber Export and Substitution
Restrictions
223.159 Scope and applicability.
223.160 Definitions.
223.161 [Reserved]
223.162 Limitations on timber
from all other states.
223.163 [Reserved]
223.164 Penalty for falsification.

harvested

§ 223.2 Disposal of timber for administrative use.
Trees, portions of trees, or other forest products in any amount on National Forest System lands may be disposed of for administrative use, by sale
or without charge, as may be most advantageous to the United States, subject to the maximum cut fixed in accordance with established policies for
management of the National Forests.
Such administrative use shall be limited to the following conditions and
purposes:
(a) For construction, maintenance or
repair of roads, bridges, trails, telephone lines, fences, recreation areas or
other improvements of value for the
protection or the administration of
Federal lands.
(b) For fuel in Federal camps, buildings and recreation areas.
(c) For research and demonstration
projects.
(d) For use in disaster relief work
conducted by public agencies.
(e) For disposal when removal is desirable to protect or enhance multipleuse values in a particular area.

Subpart E [Reserved]
Subpart F—The Forest Resources Conservation and Shortage Relief Act of 1990
Program
223.185 Scope and applicability.
223.186 Definitions.
223.187 Determination of unprocessed timber.
223.188 Prohibitions against exporting unprocessed Federal timber.
223.189 Prohibitions against substitution.
223.190 Sourcing area application procedures.
223.191 Sourcing area disapproval and review procedures.
223.192 Procedures for a non-manufacturer.
223.193 Procedures for reporting acquisition
and disposition of unprocessed Federal
timber.
223.194 Procedures for reporting the acquisition and disposition of unprocessed private timber.
223.195 Procedures
for
identifying
and
marking unprocessed timber.
223.196 Civil penalties for violation.
223.197 Civil penalty assessment procedures.
223.198 Administrative remedies.
223.199 Procedures for cooperating with
other agencies.
223.200 Determinations of surplus species.
223.201 Limitations on unprocessed timber
harvested in Alaska.
223.202 Information requirements.
223.203 Indirect substitution exception for
National Forest System timber from
within Washington State.

§ 223.3 Sale of seized material.
Seized material (trees, portions of
trees or other forest products cut in
trespass from National Forest System
lands) may be sold to the highest bidder under specific authorization from
the Regional Forester. If advertisement is impractical, sales of material
with an appraised value of less than
$10,000 will be made on informal bids.

AUTHORITY: 90 Stat. 2958, 16 U.S.C. 472a; 98
Stat. 2213, 16 U.S.C. 618, 104 Stat. 714–726, 16
U.S.C. 620–620j, unless otherwise noted.
SOURCE: 42 FR 28252, June 2, 1977, unless
otherwise noted. Redesignated at 49 FR 2760–
2761, Jan. 23, 1984.

§ 223.4 Exchange of trees or portions
of trees.
Trees or portions of trees may be exchanged for land under laws authorizing the exchange of National Forest
timber. Cutting of exchange timber
must comply with the purposes cited in
§ 223.1.

Subpart A—General Provisions
§ 223.1 Authority to sell timber.
Trees, portions of trees, and other
forest products on National Forest System lands may be sold for the purpose
of achieving the policies set forth in

(42 Stat. 465, 16 U.S.C 485; 43 Stat. 1215, 16
U.S.C. 516)

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Forest Service, USDA

§ 223.9
cases of emergency, but the person taking such material shall promptly notify the district ranger. Small quantities of material needed by transients
while in the forest may also be taken
without permit; subject to such rules
as may be prescribed pursuant to
§ 261.70. In all other cases permits will
be required for green material.

§ 223.5 Scope of free use granted to individuals.
(a) Free use may be granted to individuals for firewood for personal use,
except that such use may be limited to
bona fide settlers, miners, residents
and prospectors living within or immediately adjacent to the National Forest
when the available supply is insufficient to meet the total demand. Free
use may be granted to such bona fide
settlers, miners, residents and prospectors for minerals, for fencing, building, mining, prospecting and domestic
purposes.

§ 223.8 Delegations of authority to approve free use by individuals.
(a) Forest officers whom the supervisor may designate are authorized to
grant free use of timber to individuals
up to $200 in value in any one fiscal
year. Supervisors may grant permits
for material not exceeding $5,000 in
value. Regional Foresters may approve
permits for larger amounts, and in
times of emergency may delegate authority to supervisors for not over
$10,000 in value. Prior review by the
Chief of the Forest Service will be
given if the amount involved exceeds
$10,000 in value.
(b) Regional Foresters may authorize
supervisors to permit the removal of
specific classes of material without
scaling or measurement.

(Sec. 1, 30 Stat. 35, as amended; 16 U.S.C. 477,
551)

(b) Free use will be granted individuals primarily to aid in the protection
and silvicultural improvement of the
forests. Except in unusual cases, the
material will be restricted to dead, insect-infested, or diseased timber, logging debris, and thinnings. Other material may be granted in unusual cases
where its refusal would cause unwarranted hardship. Where limited supply
or other conditions justify such action,
the free use of green material may be
refused.

[42 FR 28252, June 2, 1977. Redesignated at 49
FR 2760–2761, Jan. 23, 1984, as amended at 71
FR 525, Jan. 4, 2006]

§ 223.6 Cutting and removal of timber
in free-use areas.

§ 223.9 Free use to owners of certain
mining claims.

Supervisors may designate portions
or all of a National Forest as free-use
areas where such action is compatible
with land management plans and shall
give public notice of their action.
Within such free-use areas, any dead
timber or any green timber previously
marked or designated by forest officers
may be cut and removed for personal
use for domestic purposes. Cutting and
removal of timber in free-use areas
shall be in accordance with such rules
as may be prescribed by the district
ranger to prevent fires, minimize damage to uncut trees and other resources,
and to avoid confusion among users.

Free use will be granted to an owner
of a mining claim located subsequent
to July 23, 1955, or of a mining claim
which is otherwise subject to Section 4
of the Act of July 23, 1955 (69 Stat. 367),
if at any time said claim owner requires more timber for his mining operations, in connection with that claim,
than is available on that claim because
of Forest Service timber disposal
therefrom subsequent to location of
that claim. He will be granted, free of
charge, timber from the nearest National Forest land which is ready for
harvesting under the applicable management plan, substantially equivalent
in kind and quantity to that estimated
by the Forest Service to have been cut
under Forest Service authorization
from the claim subsequent to its location, Forest officers may be delegated
authority to grant amounts of timber

[42 FR 28252, June 2, 1977, as amended at 44
FR 73029, Dec. 17, 1979. Redesignated at 49 FR
2760, Jan. 23, 1984]

§ 223.7 Permission for free use of timber outside free-use areas.
Similar material may be cut outside
of a free-use area without permit in

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§ 223.10

36 CFR Ch. II (7–1–06 Edition)

not in excess of those which these officers are authorized to sell in commercial sales.

§ 223.12 Permission to cut, damage, or
destroy trees without advertisement.
Permission may be granted to cut,
damage, or destroy trees, portions of
trees, or other forest products on National Forest System lands without advertisement when necessary for the occupancy of a right-of-way or other authorized use of National Forest System
land. Payment for timber of merchantable size and quality will be required at
its appraised value, but at not less
than applicable minimum prices established by Regional Foresters, and payment will be required for young growth
timber below merchantable size at its
damage appraisal value. Payment will
not be required:
(a) For timber necessarily killed or
cut in connection with land uses which
are of substantial benefit to the National Forests;
(b) For timber necessarily killed or
cut and used by the permittee which
would have been granted free under
other applicable regulations; or
(c) For timber which will be cut by
the permittee which the Forest Service
retains for sale in log or other product
form.

(Sec. 4, 69 Stat. 368, 16 U.S.C. 612)

§ 223.10 Free use to Alaskan settlers,
miners, residents, and prospectors.
Bona fide settlers, miners, residents,
and prospectors for minerals in Alaska
may take free of charge green or dried
timber from the National Forests in
Alaska for personal use but not for
sale. Permits will be required for green
saw timber. Other material may be
taken without permit. The amount of
material granted to any one person in
1 year shall not exceed 10,000 board feet
of saw timber and 25 cords of wood, or
an equivalent volume in other forms.
Persons obtaining materials shall, on
demand, forward to the supervisor a
statement of the quantity taken and
the location from which it was removed.
(Sec. 1, 30 Stat. 35, 16 U.S.C. 477)

§ 223.11 Free
agencies.

use

to

other

Federal

(a) National Forest timber will be
granted free of charge to other
branches of the Federal Government
when authorized by law. Permits may
be approved by forest officers for
amounts not greater than they are otherwise authorized to sell.
(b) Permits for timber issued hereunder shall be in accordance with the
conditions prescribed in § 223.30. The
permittee may be required to report to
the supervisor the amount of timber,
by species, actually cut or may be required to furnish scalers for work
under the direction of the forest officers in charge or, if authorized, to provide funds for the employment by the
Forest Service of scalers to scale or
measure the timber cut. The permittee
may be required to dispose of the slash
as cutting proceeds, or to employee
people to work under the direction of a
forest officer in disposing of the slash,
or, if authorized, to provide funds for
the employment of people for slash disposal under the direction of a forest officer.

(Sec. 1, 30 Stat. 35, as amended, 16 U.S.C. 551)

§ 223.13 Compliance.
Forest officers authorizing free use
shall ensure that such use is in compliance with applicable land management
plans and is conducted in a manner
which protects National Forest System
resource values.
(92 Stat. 1301, Pub. L. 95–465)

§ 223.14 Where timber may be cut.
(a) The cutting of trees, portions of
trees or other forest products may be
authorized on any National Forest System lands, except for:
(1) Timber reserved by a grantor of
land, during the life of such reservation.
(2) Timber reserved from cutting
under other regulations.
(3) Timber on unpatented mining
claims located prior to July 23, 1955,
unless the claimant has executed a
waiver pursuant to section 6 of the Act
of July 23, 1955 (69 Stat. 367), or unless
pursuant to a proceeding under Section

(38 Stat. 1100, as amended; 16 U.S.C. 492)

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§ 223.32

5 of that Act, the claimant has failed
to file a verified statement or has
failed to establish the validity and effectiveness of his asserted rights.
(4) Timber on lands identified in land
management plans as not suited for
timber production, except that salvage
sales or sales necessitated to protect
other multiple-use values may be
made.
(b) The cutting of timber on mining
claims shall be conducted in such manner as not to endanger or materially
interfere with prospecting, mining or
processing operations.
(c) Timber on an unpatented claim to
which the United States does not otherwise have disposal rights may be disposed of with the written consent of
the claimant, or, in emergencies without the consent of the claimant.
(d) Timber on an unpatented claim
may be cut by the claimant only for
the actual development of the claim or
for uses consistent with the purposes
for which the claim was entered. Any
severance or removal of timber, other
than severance or removal to provide
clearance, shall be in accordance with
plan of operations required by Part 252
of this chapter, and with sound principles of forest management.
(e) With prior approval by the Regional Forester, timber on lands under
option by the United States or on offered lands included in an approved
land exchange agreement may be sold.
Before the sale is made, a cooperative
agreement must be made with the
owner of the land authorizing the Forest Service to conduct the sale and providing for return of stumpage receipts
to the owner if title to the land is not
accepted by the United States.
(f) With prior approval by the Regional Forester, cutting of exchange
timber described in § 223.4 may be authorized in advance of the acceptance
of title to the non-Federal land offered
in exchange.

Subpart B—Timber Sale Contracts
CONTRACT CONDITIONS AND PROVISIONS
§ 223.30 Consistency with plans, environmental standards, and other
management requirements.
The approving officer will insure that
each timber sale contract, permit or
other authorized form of National Forest timber disposal is consistent with
applicable land and resource management plans and environmental quality
standards and includes, as appropriate,
requirements for:
(a) Fire protection and suppression;
(b) Protection of residual timber;
(c) Regeneration of timber as may be
made necessary by harvesting operations;
(d) Minimizing increases in soil erosion;
(e) Providing favorable conditions of
water flow and quality;
(f) Utilization of the timber resource
to provide for the optimum practical
use of the wood material as may be obtained with available technology, considering opportunities to promote more
efficient wood utilization, regional
conditions and species characteristics;
(g) Reduction of the likelihood of loss
to destructive agencies; and
(h) Minimizing adverse effects on, or
providing protection for and enhancing
other National Forest resources, uses
and improvements.
§ 223.31

Duration of contracts.

Sale contracts shall not exceed 10
years in duration, unless there is a
finding by the Chief, Forest Service,
that better utilization of the various
forest resources (consistent with the
provisions of the Multiple-Use Sustained-Yield Act of 1960) will result.
§ 223.32

Timber sale operating plan.

Sale contracts with a term of 2 years
or more shall provide for the filing of
an operating plan as soon as practicable after execution of the contract,
such plan shall be a part of the contract. The plan of operation shall be
general in nature, outlining the expected timing and order of sale development, including such major operations as road construction, felling and

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§ 223.33

36 CFR Ch. II (7–1–06 Edition)

removal of timber, distribution of timber, and contractual requirements for
erosion prevention and slash disposal.
The plan of operation and revisions
thereto shall be subject to concurrence
by the Forest Service.

(b) National Forest timber sold on
board foot scale shall be scaled by the
Scribner Decimal C Log Rule, or if the
advertisement and contract or permit
so state, by the International 1⁄4-inch
log rule or by the International 1⁄4-inch
Decimal log rule. National Forest timber may also be sold by the cubic volume rule or by cords, each as used by
the Forest Service.

§ 223.33 Redetermination of stumpage
rates and deposits.
Sale contracts exceeding 7 years in
duration, and those of shorter duration
to the extent found desirable by the approving officer, will provide for the redetermination of rates for stumpage
and for required deposits at intervals of
not more than 5 years, exclusive of any
period allowed for the construction of
improvements.
§ 223.34

§ 223.37 Revegetation of temporary
roads.
Timber sale contracts, permits and
other documents authorizing the cutting or removal of timber or forest
products shall require the purchaser to
treat temporary roads constructed or
used thereunder so as to permit the reestablishment by artificial or natural
means, or vegetative cover on the roadway and areas where the vegetative
cover was disturbed by the construction or use of the road, as necessary to
minimize erosion from the disturbed
area. Such treatment shall be designed
to reestablish vegetative cover as soon
as practicable, but at least within 10
years after the termination of the contract.

Advance payment.

Sale contracts shall provide that
timber and forest products be paid for
in advance of cutting, unless the contract authorizes the purchaser to furnish a payment guarantee satisfactory
to the Forest Service. Advance payments found to be in excess of amounts
due the United States shall be refunded
to the current holder of the contract or
to successors in interest. (90 Stat. 2959;
16 U.S.C. 472a.)

§ 223.38 Standards for road design and
construction.
Road construction authorized under
timber sale contracts, permits and
other documents authorizing the cutting or removal of timber or forest
products shall be designed to standards
appropriate for the intended uses, considering safety, cost of transportation,
and impacts on land and resources. If
the sale contract provides for road design standards in excess of those needed for the harvest and removal of timber from that sale, including measures
to protect adjacent resource values,
provision shall be made in the contract
for compensating the purchaser for the
additional costs, unless the purchaser
elects Government construction under
section 14(i) of the National Forest
Management Act of 1976.

[43 FR 38008, Aug. 25, 1978. Redesignated at 49
FR 2761, Jan. 23, 1984]

§ 223.35

Performance bond.

Timber sale contracts may require
the purchaser to furnish a performance
bond for satisfactory compliance with
its terms.
§ 223.36

Volume determination.

(a) Timber sale contracts may provide for volume determination by scaling, measuring, weighing, or counting
the logs or other products, or by measuring the trees before cutting. If the
contract or permit provides for the determination of volume by tree measurement and the timber has been paid
for, the marking or otherwise designating of the tree authorizes cutting
and removal. Otherwise no timber cut
under any contract shall be removed
from the place designated until it has
been scaled, measured or counted as
provided in the timber sale contract,
unless such removal is specifically authorized in the contract.

§ 223.39

[Reserved]

§ 223.40 Cancellation
for
environmental protection or inconsistency
with plans.
Timber sale contracts, permits, and
other such instruments, authorizing

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Forest Service, USDA

§ 223.44

the harvesting of trees or other forest
products, with terms of longer than 2
years, shall provide for cancellation in
order to prevent serious environmental
damage or when they are significantly
inconsistent with land management
plans adopted or revised in accordance
with section 6 of the Forest and Rangeland Renewable Resources Planning
Act of 1974, as amended. Such provision
shall provide for reasonable compensation to the purchaser for unrecovered
costs incurred under the contract and
for the difference between the current
contract value and the average value of
comparable National Forest timber
sold during the preceding 6-month period.

§ 223.43 Limitation on amounts
transferred purchaser credit.

(a) The amount of purchaser credit
which may be transferred into a given
sale shall be limited to the difference
between remaining current contract
value and the total of:
(1) Remaining base rate value needs,
(2) Salvage sale fund needs plus sale
area improvement needs in excess of
base rate value needs, and
(3) Total purchaser credit limit on
the given sale.
(b) This calculation shall be made as
of the date of sale award for sales made
on or after January 1, 1978. For sales
made prior to January 1, 1978, the calculation shall be made as of December
31, 1977, except that if the amount actually transferred in as of December 31,
1977, exceeds the calculated limit, the
actual transfers as of that date shall be
the established limit. Purchaser credit
earned on a sale and subsequently
transferred out may be replaced without regard to the transfer in limit. Sale
area improvement needs shall be based
on the original sale area betterment
plan or revisions thereto approved
prior to July 1, 1976. Salvage sale fund
needs shall be based on the original salvage sale fund plan.

§ 223.41 Payment
when
purchaser
elects government road construction.
Each contract having a provision for
construction of specified roads with
total estimated construction costs of
$50,000 or more shall include a provision to ensure that if the purchaser
elects government road construction,
the purchaser shall pay, in addition to
the price paid for the timber or other
forest products, an amount equal to
the estimated cost of the roads.
[71 FR 11510, Mar. 8, 2006]

§ 223.42 Transfer of
chaser credits.

(Pub. L. 94–154, 89 Stat. 823 (16 U.S.C. 535)

effective

pur-

[42 FR 63777, Dec. 20, 1977. Redesignated at 49
FR 2761, Jan. 23, 1984]

The Forest Service may permit
transfer of unused effective purchaser
credit earned after December 16, 1975,
from one timber sale account to another timber sale account of the same
purchaser within the same National
Forest, provided the sale contracts provide procedures for the use of purchaser credit. Approval for transfer
shall not be granted for amounts needed to satisfy unfulfilled payment obligations or claims for damages due the
United States. Purchaser credit transferred under this paragraph is subject
to such additional restrictions as may
be necessary for its orderly use.

§ 223.44 Collection rights on contracts
involved in transfer of purchase
credit.
To assure protection of the United
States in connection with the implementation of this regulation, contract
provisions shall not prevent the Forest
Service from carrying out collection
rights, authorized by the Federal
Claims Collection Act of 1966 (80 Stat.
309), between contracts involved in the
transfer of purchaser credit. Such
claims against the contract receiving
the transferred purchaser credit shall
be limited to the amount transferred.

(Pub. L. 94–154, 89 Stat. 823 (16 U.S.C. 535)

(Pub. L. 94–154, 89 Stat. 823 (16 U.S.C. 535)

[42 FR 63777, Dec. 20, 1977. Redesignated at 49
FR 2761, Jan. 23, 1984]

[42 FR 63777, Dec. 20, 1977. Redesignated at 49
FR 2761, Jan. 23, 1984]

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§ 223.45

36 CFR Ch. II (7–1–06 Edition)
under guidelines provided by the Chief,
Forest Service, including but not limited to (1) default of contractors or (2)
design changes, physical changes, or
catastrophic damages which necessitate modification of specified road
construction work.
(e) If Forest Service failure to perform results in delay in road completion, the termination date shall be adjusted in accordance with the contract
term adjustment provisions of the timber sale contract. If there is substantial delay in performance by the Forest
Service, the contract shall provide that
rates of payment may be redetermined,
at the request of the purchaser, in accordance with guidelines established
by the Chief, Forest Service.
(f) If the purchaser retains responsibility for road construction, the date of
completion for permanent roads may
be modified to conform to the approved
plan of operation.

§ 223.45 Definitions
applicable
to
transfer of purchaser credit.
As used in §§ 223.42 and 223.43, the
term Purchaser includes any single individual, corporation, company, firm,
partnership, joint venture, or other
business entity or the successor in interest of any of the foregoing business
entities having timber sale contracts
on the same National Forest. The term
National Forest shall be considered as a
unit of the National Forest System, regardless of how it was established,
which maintains a separate identity
with respect to the distribution of receipts earned thereon to the States and
counties. The term Effective Purchaser
Credit means unused purchaser credit
which does not exceed current contract
value minus base rate value. The term
base rate value is the sum of the products of base rates and estimated remaining unscaled (unreported on tree
measurement contracts) volumes by
species of timber included in a timber
sale contract.

§ 223.48 Restrictions on export and
substitution of unprocessed timber.
(a) Contracts for the sale of unprocessed timber from National Forest System lands located west of the 100th meridian in the contiguous 48 States and
Alaska, awarded before August 20, 1990,
shall include provisions implementing
the Secretary’s timber export and substitution regulations at subpart D of
this part in effect prior to that data.
Such contracts shall also require purchasers to:
(1) Submit annually, until all unprocessed timber is accounted for, a certified report on the disposition of any
unprocessed timber harvested from the
sale including a description of unprocessed timber which is sold, exchanged
or otherwise disposed of to another person and a description of the relationship with the other person;
(2) Submit annually, until all unprocessed timber from the sale is accounted
for, a certified report on the sale of any
unprocessed timber from private lands
in the tributary area which is exported
or sold for export; and
(3) Maintain records of all such transactions involving unprocessed timber
and to make such records available for
inspection and verification by the Forest Service for up to three (3) years
after the sale is terminated.

(Pub. L. 94–154, 89 Stat. 823 (16 U.S.C. 535)
[42 FR 63777, Dec. 20, 1977. Redesignated at 49
FR 2761, Jan. 23, 1984]

§ 223.46 Adjustment of contract termination date.
Timber sale contracts may provide
for adjustment of the termination date
to provide additional time to compensate for delays in road construction
and timber removal due to those causes
beyond the purchaser’s control, which
may include but are not limited to acts
of God, acts of the public enemy, acts
of the Government, labor disputes,
fires, insurrections or floods.
§ 223.47 Date of completion of permanent road construction.
(a) The date of completion of permanent road construction obligations as
set forth in the Notice of Sale shall be
incorporated into the timber sale contract.
(b) This date is applicable to construction by both the Forest Service
and the timber purchaser.
(c) The date is not applicable to roads
not needed by the purchaser for timber
removal.
(d) The date for completion may be
revised, if additional time is needed,

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Forest Service, USDA

§ 223.49
tive purchaser credit at the time a timber sale contract is executed.
(c) The minimum downpayment shall
be equivalent to 10 percent of the total
advertised value of each sale, plus 20
percent of the bid premium, except in
those geographic areas where the Chief
of the Forest Service determines that
it is necessary to increase the amount
of the downpayment in order to deter
speculation. To determine the amount
of the downpayment due on a sale
where the timber is measured in units
other than board feet, the Forest Service shall convert the measure to board
feet, using appropriate conversion factors with any necessary adjustment.
(d) On scaled sales, a purchaser cannot apply the amount deposited as a
downpayment to cover other obligations due on that sale until stumpage
value representing 25 percent of the
total bid value of the sale has been
charged and paid for. On tree measurement sales, a purchaser cannot apply
the amount deposited as a downpayment to cover other obligations due on
that sale until stumpage value representing 25 percent of the total bid
value of the sale is shown on the timber sale statement of account to have
been cut, removed, and paid for. For
lump sum sales, the downpayment
amount may be applied to payment for
release of the single payment unit.
(e) A purchaser or any affiliate of
that purchaser, awarded a Forest Service timber sale contract must meet the
additional downpayment requirements
of paragraph (g) of this section under
the following circumstances:
(1) The purchaser or its affiliate after
September 29, 1988 has failed to perform in accordance with the terms of a
Forest Service or Bureau of Land Management timber sale contract which results in notification by a Contracting
Officer that a contract has expired
uncompleted or is terminated for
cause; and
(2) The estimated value of the
unscaled timber on scaled sales, or the
estimated value of the timber outstanding on tree measurement sales,
included in those terminated or expired
contracts exceeds $100,000, and
(3) Unpaid damages claimed by the
Government remain outstanding prior
to award of the new sale at issue and

(b) Contracts for the sale of unprocessed timber from National Forest System lands located west of the 100th meridian in the contiguous 48 States,
awarded on or after August 20, 1990,
shall include provisions implementing
the requirements of the Forest Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620 et seq.).
(c) The reporting and recordkeeping
procedures in this section constitute
information collection requirements as
defined in 5 CFR part 1320. These requirements have been approved by the
Office of Management and Budget and
assigned clearance number 0596–0021.
[56 FR 65842, Dec. 19, 1991]

§ 223.49 Downpayment.
(a) For the purposes of this section,
the terms listed in this paragraph shall
have the following meaning:
(1) Total bid value is the sum of the
products obtained by multiplying the
rate the purchaser bid for each species
by the estimated volume listed in the
contract.
(2) Ineffective purchaser credit is that
portion of the credit earned, pursuant
to a specific Forest Service timber sale
contract for construction of specified
roads, or for other purposes in such
contract, that exceeds the current contract value, minus base rate value as
defined in that contract and, thus, is
an amount that cannot be applied toward stumpage charges.
(3) Bid premium is the amount in excess of the advertised value that a purchaser bids for timber offered.
(4) Lump sum timber sales are
premeasured sales where the entire
value of the sale is paid in one payment
at time of release for cutting.
(5) Affiliate. Concerns or individuals
are affiliates if directly or indirectly,
either one controls or has the power to
control the other, or a third party controls or has the power to control both.
In determining whether or not affiliation exists, the Forest Service shall
consider all appropriate factors, including, but not limited to, common
ownership, common management, and
contractual relationships.
(b) Timber sale contracts shall include provisions that require purchasers to make a downpayment in
cash or by application of earned effec-

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§ 223.50

36 CFR Ch. II (7–1–06 Edition)

corrective action has not been taken to
avoid future deficient performance.
(f) A subsequent final determination
by the Contracting Officer or by a
court of competent jurisdiction that a
contract was improperly classified
under the criteria in paragraph (e) of
this section will result in the refund or
credit of any unobligated portion of the
amount of downpayment exceeding
that required by paragraphs (c) and (d)
and the limitations of paragraph (h) on
application of downpayment shall no
longer apply.
(g) Notwithstanding the provisions of
paragraphs (c) and (d) of this section, a
purchaser meeting the criteria of paragraph (e) of this section must make a
minimum downpayment equal to 20
percent of the total advertised value of
that sale, plus 40 percent of the total
bid premium. This higher downpayment requirement applies throughout
the National Forest System, except in
those areas where the Chief of the Forest Service determines, before advertisement of the sale, that another
downpayment rate is necessary to
achieve the management objectives of
the National Forest System.
(1) In calculating bid premiums for
the downpayment requirement, the
Forest Service shall not include the
portion of the bid premium that offsets
ineffective purchaser credit.
(2) To determine the amount of the
downpayment due on a sale where the
timber is measured in units other than
board feet, the Forest Service shall
convert the measure to board feet,
using appropriate conversion factors
with any necessary adjustments.
(h) A purchaser subject to the additional downpayment requirements of
paragraph (g) of this section cannot
apply the amount deposited as a downpayment to other uses until:
(1) On scaled sales, the estimated
value of the unscaled timber is equal to
or less than the amount of the downpayment; or
(2) On tree measurement sales, the estimated value remaining to be cut and
removed as shown on the timber sale
statement of account is equal to or less
than the amount of the downpayment.
(i) For the purpose of releasing funds
deposited as downpayment by a purchaser subject to paragraph (f) of this

section, the Forest Service shall compute the estimated value of timber as
follows:
(1) On scaled sales, the estimated
value of the unscaled timber is the sum
of the products obtained by multiplying the current contract rate for
each species by the difference between
the advertised volume and the volume
that has been scaled of that species.
(2) On tree measurement sales, the estimated value of the timber outstanding
(that not shown on the timber sale
statement of account as cut and removed) is the sum of the products obtained by multiplying the current contract rate for each species by the difference between the advertised volume
and the volume that has been shown on
the timber sale statement to have been
cut and removed of the species. The
current contract rate for each species
is that specified in each Forest Service
timber sale contract.
(j) In order to deter speculation, the
Chief of the Forest Service may increase the period for retention of the
downpayment for future contracts subject to such criteria as the Chief may
adopt after giving the public notice and
opportunity to comment.
[50 FR 41500, Oct. 11, 1985, as amended at 53
FR 33131, Aug. 30, 1988; 56 FR 36103, July 31,
1991]

§ 223.50 Periodic payments.
(a) For the purposes of this section,
the following terms have the meaning
given:
(1) Total contract value is the product
of the estimated volume of the sale
multiplied by the rates bid by the purchaser. Total contract value excludes
required deposits and is determined at
bid date.
(2) Current contract value is the sum
of the products of the current contract
rates and, in a scaled sale, estimated
remaining unscaled volume or, in a
tree measurement sale, the estimated
remaining quantities by species of included timber meeting utilization
standards.
(3) Normal operating season is the period so specified in a timber sale contract.
(4)
Periodic
payment(s)
is/are
amount(s) specified in a timber sale
contract that a purchaser must pay by

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Forest Service, USDA

§ 223.51

the periodic payment determination
date(s) unless reduced by amounts paid
as stumpage for volume removed.
(5) A periodic payment determination
date is a date specified in a timber sale
contract upon which the Forest Service
will compare the payments made by
the timber sale purchaser for timber
charges (stumpage), exclusive of required deposits, with the periodic payment amount required as of that date
in the contract.
(b) Except for lump sum sales, each
timber sale contract of more than one
full normal operating season shall provide for periodic payments. The number of periodic payments required will
be dependent upon the number of normal operating seasons within the contract, but shall not exceed two such
payments during the course of the contract. Periodic payments must be made
by the periodic payment determination
date, except that the amount of the
periodic payment shall be reduced to
the extent that timber has been removed and paid for by the periodic payment determination date. Should the
payment fall due on a date other than
normal billing dates, the contract shall
provide that the payment date will be
extended to coincide with the next timber sale statement of account billing
date.
(1) At a minimum, each such contract shall require an initial periodic
payment at the midpoint between the
specified road completion date and the
termination date. If there is no road
construction requirement, payment
shall be due at the midpoint between
award date and the termination date.
(2) Contracts exceeding 2 full operating seasons shall require an additional periodic payment to be due no
later than the midpoint of the last normal operating season or 12 months
from the initial periodic payment
whichever date is first.
(c) Each timber sale contract shall
require the initial periodic payment to
equal 35 percent of the total contract
value or 50 percent of the bid premium,
whichever is greater. The amount of
this periodic payment will be reduced
if the payment would result in the purchaser’s credit balance for timber
charges exceeding the current contract
value.

(d) Where an additional periodic payment is required by the timber sale
contract, this payment will equal 75
percent of the total contract value.
The amount of this periodic payment
will be reduced if the payment would
result in the purchaser’s credit balance
for timber charges exceeding the current contract value.
(e) Dates for determining future periodic payments shall be adjusted as follows:
(1) When contract term adjustments
are granted under § 223.46,
(2) When market-related contract
term additions are granted under
§ 223.52,
(3) When urgent removal extensions
are granted under § 223.53, or
(4) When extensions in the substantial overriding public interest are
granted under § 223.115(b). Periodic payment determination dates shall not be
adjusted when a contract term extension is granted under the general authority of § 223.115(a).
(f) In accordance with 36 CFR
223.52(a), no contract executed before
July 31, 1991, shall be modified to allow
for market-related contract term additions unless the purchaser makes a
written request to the Contracting Officer by December 1, 1991, for a simultaneous modification implementing the
periodic payment requirements of this
section. The midpoint payment clause
in contracts executed before July 31,
1991, is not the ‘‘periodic payment requirement’’ mandated by 36 CFR
223.52(a).
[56 FR 36104, July 31, 1991, as amended at 56
FR 55822, Oct. 30, 1991; 67 FR 70169, Nov. 21,
2002]

§ 223.51

Bid monitoring.

Each Regional Forester shall monitor bidding patterns on timber sales to
determine if speculative bidding is occurring or if Purchasers are bidding in
such a way that they would be unable
to perform their obligations under the
timber sale contract. A Regional Forester shall propose to the Chief changes
in service wide timber sale procedures,
as they appear necessary, to discourage
speculative bidding.
[50 FR 41500, Oct. 11, 1985]

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§ 223.52

36 CFR Ch. II (7–1–06 Edition)
determine that a drastic reduction in
wood prices has occurred when, for any
2 or more consecutive qualifying quarters, the applicable adjusted price
index is less than 88.5 percent of the average of such index for the 4 highest of
the 8 calendar quarters immediately
prior to the qualifying quarter. A
qualifying quarter is a quarter, following the contract award date, where
the applicable adjusted index is more
than 11.5 percent below the average of
such index for the 4 highest of the previous 8 calendar quarters. For PPI
index code 3211135, the Chief of the Forest Service shall determine that a drastic reduction in wood prices has occurred when, for any 2 or more consecutive qualifying quarters, the adjusted price index is less than 85 percent of the average of such index for
the 4 highest of the 8 calendar quarters
immediately prior to the qualifying
quarter. A qualifying quarter is a quarter, following the contract award date,
where the adjusted index is more than
15 percent below the average of such
index for the 4 highest of the previous
eight calendar quarters. Qualifying
quarter determinations will be made
using the Producer Price Indices for
the months of March, June, September,
and December.
(3) A determination, made pursuant
to paragraph (b)(2) of this section, that
a drastic reduction in wood product
prices has occurred, shall constitute a
finding that the substantial overriding
public interest justifies the contract
term addition.
(c) Granting market-related contract
term additions. When the Chief of the
Forest Service determines, pursuant to
this section, that a drastic reduction in
wood product prices has occurred, the
Forest Service is to notify affected
timber sale purchasers. For any contract which has been awarded and has
not been terminated, the Forest Service, upon a purchaser’s written request,
will add 1 year to the contract’s terms,
except as provided in paragraphs (c)(1)
through (4) of this section. This 1-year
addition includes time outside of the
normal operating season.
(1) Additional contract time may not
be granted for those portions of the
contract which have a required completion date or for those portions of the

§ 223.52 Market-related contract term
additions.
(a) Contract provision. (1) Except as
provided in paragraph (a)(3) of this section, each timber sale contract exceeding 1 year in length shall contain a provision for the addition of time to the
contract term, under the following conditions:
(i) The Chief of the Forest Service
has determined that adverse wood
products market conditions have resulted in a drastic reduction in wood
product prices applicable to the sale;
and
(ii) The purchaser makes a written
request for additional time to perform
the contract.
(2) The contract term addition provision of the contract must specify the
index to be applied to each sale. The
Forest Supervisor shall determine, and
select from paragraph (b) of this section, the index to be used for each sale
based on the species and product characteristics, by volume, being harvested
on the sale. The index specified shall
represent more than one-half of the advertised volume.
(3) A market-related contract term
addition provision shall not be included
in contracts where the sale has a primary objective of harvesting timber
subject to rapid deterioration.
(b) Determination of drastic wood product price reductions. (1) The Forest Service shall monitor and use Producer
Price Indices, as prepared by the Department of Labor, Bureau of Labor
Statistics (BLS), adjusted to a constant dollar base, to determine if market-related contract term additions are
warranted.
(i) The Forest Service shall monitor
and use only the following indices:
BLS producer price index

Index
series

Hardwood Lumber .................
Softwood Lumber ..................
Wood Chips ...........................

Commodity ....
Commodity ....
Industry ..........

Index code
0812
0811
3211135

(ii) Preliminary index values will be
revised when final index values become
available, however, determination of a
qualifying quarter will not be revised
when final index values become available.
(2) For PPI index codes 0811 and 0812,
the Chief of the Forest Service shall

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Forest Service, USDA

§ 223.53
amount of time required to harvest and
process the damaged timber on non-National Forest System lands. Contracting Officers may grant urgent removal extensions only when the Regional Forester verifies in writing that:
(1) A specific catastrophe occurred
for which urgent removal extensions
should be granted;
(2) The manufacturing facilities or
logging equipment capacity available
to purchasers are insufficient to provide for both the rapid harvest of damaged non-National Forest System timber in need of expeditious removal and
the continued harvest of undamaged
(green) timber under contract with the
Forest Service; and
(3) Failure to harvest the damaged
non-National Forest System timber
promptly could result in the following:
(i) Pose a threat to public safety,
(ii) Create a threat of an insect or
disease epidemic to National Forest
System or other lands or resources, or
(iii) Significant private or other public resource loss.
(c) Purchaser request. To obtain an urgent removal extension on a National
Forest System timber sale contract, a
purchaser must make a written request
to the Contracting Officer, which includes the following:
(1) An explanation of why the harvest
of undamaged (green) National Forest
System timber within the term of the
existing National Forest System contract(s) will prevent or otherwise impede the removal of damaged non-National Forest System timber in need of
expeditious removal; and
(2) Documentation that the manufacturing facilities or logging equipment
capacity available to a purchaser
would be insufficient to provide for
both the rapid salvage of damaged nonNational Forest System timber in need
of expeditious removal and continued
harvest of undamaged (green) National
Forest System timber under contract
with the Forest Service.
(d) Contracting Officer determination.
To grant an urgent removal extension,
the timber sale Contracting Officer
must verify the following:

contract where the Forest Service determines that the timber is in need of
urgent removal or that timber deterioration or resource damage will result
from delay.
(2) For each additional consecutive
quarter, in which a contract qualifies
for a market-related contract term addition, the Forest Service will, upon
the purchaser’s written request, add an
additional 3 months during the normal
operating season to the contract.
(3) No more than twice the original
contract length or 3 years, whichever is
less, shall be added to a contract’s
term by market-related contract term
addition.
(4) In no event shall a revised contract term exceed 10 years as a result
of market-related contract term additions.
(d) Recalculation of periodic payments.
Where a contract is lengthened as a result of market conditions, any subsequent periodic payment dates shall be
delayed 1 month for each month added
to the contract’s term.
[63 FR 24114, May 1, 1998, as amended at 70
FR 37269, June 29, 2005; 71 FR 3411, Jan. 23,
2006]

§ 223.53 Urgent removal contract extensions.
(a) Finding. There is substantial,
overriding public interest in extending
National Forest System timber sale
contracts for undamaged (green) timber not requiring expeditious removal
in order to facilitate the rapid harvest
of catastrophically damaged timber requiring expeditious removal on private
or other non-National Forest System
lands. Such an extension may be granted when a specific catastrophic event
beyond the control of the landowner
occurs on non-National Forest System
lands that poses a threat to general
forest health, public safety, and property. Catastrophic events include, but
are not limited to, severe wildfire,
wind, floods, insects and disease infestation, and drought.
(b) Regional Forester determination. If
the Regional Forester determines that
adequate cause for urgent removal extensions exists, Contracting Officers
may extend National Forest System
timber sale contracts, up to a maximum of 1 year, for the estimated

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§ 223.60

36 CFR Ch. II (7–1–06 Edition)

(1) That it is likely that the
undamaged (green) timber from National Forest System land would be delivered to the same manufacturing facilities as are needed to process the
damaged non-National Forest System
timber or the National Forest System
timber sale contract would require the
use of the same logging equipment as is
needed to remove the damaged non-National Forest System timber from the
area affected by the catastrophe;
(2) That extension of the National
Forest System contract will not be injurious to the United States and will
protect, to the extent possible, the
health of the National Forest System
lands, including:
(i) That urgent removal extension
does not adversely affect other resource management objectives to be
implemented by the National Forest
System timber sale being extended;
and
(ii) That the National Forest System
timber sale contract to be extended is
not a sale containing damaged, dead, or
dying timber subject to rapid deterioration.
(3) That the purchaser has not been
granted a previous urgent removal extension on the same National Forest
System timber sale contract based on
the current catastrophic event. Subsequent urgent removal extensions may
be granted if there are subsequent Regional Forester determinations on
other catastrophic events.
(4) That the revised National Forest
System timber sale contract term will
not exceed 10 years from the date the
National Forest System contract was
awarded; and
(5) That the purchaser is not in
breach of the National Forest System
contract, and all work items, payments, and deposits are current.
(e) Execution of contract extension. An
urgent removal extension of a National
Forest System timber sale contract is
executed through a mutual agreement
contract modification pursuant to
§ 223.112, which must include specific
contract provisions. An agreement to
modify a contract must identify the
specific provision(s) of the contract
being modified and must include the
requirement that purchasers make
cash payment to cover the costs of re-

marking timber on the sale area or reestablishing cutting unit boundaries if
the Contracting Officer determines
such work is necessary.
(f) Information collection. The information required of a purchaser to request an extension of an National Forest System timber sale contract, as
outlined in paragraph (c) of this section, to facilitate expeditious removal
of timber from non-National Forest
System lands constitutes an information collection requirement as defined
in 5 CFR Part 1320 and has been assigned Office of Management and Budget control number 0596–0167.
[67 FR 70169, Nov. 21, 2002, as amended at 69
FR 33, Jan. 2, 2004]

APPRAISAL AND PRICING
§ 223.60 Determining
fair
market
value.
The objective of Forest Service timber appraisals is to determine fair market value. Fair market value is estimated by such methods as are authorized by the Chief, Forest Service,
through issuance of agency directives
(36 CFR 200.4). Valid methods to determine fair market value include, but are
not limited to, transaction evidence
appraisals, analytical appraisals, comparison appraisals, and independent estimates based on average investments.
Pertinent factors affecting market
value also considered include, but are
not limited to, prices paid and valuations established for comparable timber, selling value of products produced,
estimated operating costs, operating
difficulties, and quality of timber. Considerations and valuations may recognize and adjust for factors which are
not normal market influences.
[61 FR 5685, Feb. 14, 1996]

§ 223.61 Establishing minimum stumpage rates.
The Chief, Forest Service, shall establish minimum stumpage rates, i.e.,
‘‘base rates,’’ for species and products
on individual National Forests, or
groups of National Forests. Timber
shall be sold for appraised value or
minimum stumpage rates, whichever is
higher. No timber may be sold or cut
under timber sale contracts for less
than minimum stumpage rates except

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Forest Service, USDA

§ 223.65

to provide for the removal of insect-infested, diseased, dead or distressed timber or in accordance with contract provisions specifically providing for catastrophically-affected timber and incidental amounts of material not meeting utilization standards of the timber
sale contract. For any timber sale offering where deposits are to be required
for reforestation under the Act of June
9, 1930, as amended (46 Stat. 527; 16
U.S.C. 576–576b) which exceed the value
of the established minimum stumpage
rates, the minimum rates may be increased by the approving officer as necessary to the amount of such required
reforestation deposits and a minimum
deposit to the Treasury. Minimum
rates in timber sale contracts will not
be set higher than established minimum rates for purposes other than assuring adequate funds for reforestation.

tion cost used to develop appraised
value means the total estimated cost of
constructing all permanent roads specified in the timber sale contract, estimated as if construction is to be accomplished by the timber purchaser.
The advertised rates shall be not less
than minimum stumpage rates, except
that sales of insect-infested, diseased,
dead, or distressed timber may be sold
at less than minimum rates when harvest of such timber is necessary to protect or improve the forest or prevent
waste of usable wood fiber.
[71 FR 11510, Mar. 8, 2006]

§ 223.64 Appraisal on a lump-sum
value or rate per unit of measure
basis.
Timber may be appraised and sold at
a lump-sum value or at a rate per unit
of measure which rate may be adjusted
during the period of the contract and
as therein specified in accordance with
formulas or other equivalent specifications for the following reasons:
(a) Variations in lumber or other
product value indices between the price
index base specified in the contract and
the price index actually experienced
during the cutting of the timber;
(b) Variance between advertised rates
and rates redetermined by appraisal at
dates specified in the contract;
(c) Variance between redetermined
rates and rates appropriate for changes
in costs or selling values subsequent to
the rate redetermination which reduce
conversion value to less than such redetermined rates; and
(d) Substantial loss of value due to
physical deterioration of green timber
or other physical damage to the sale
area or access to the timber.

§ 223.62 Timber purchaser road construction credit.
Appraisal may also establish stumpage value as if unconstructed roads or
other developments needed by the purchaser for removal of the timber were
in place. When timber is appraised and
sold on such basis, purchaser credit for
road construction, not to exceed the estimated construction cost of such
roads or other developments specified
in the timber sale contract, shall, when
such construction is accomplished by
purchaser, be deducted from stumpage
payments made by or due from purchaser under the timber sale contract
for other than minimum stumpage
rates and required deposits for slash
disposal and road maintenance. As used
in this section estimated construction
costs means the total cost of constructing all permanent roads specified
in the timber sale contract, estimated
as if construction is to be accomplished
by an independent contractor who is
not the timber purchaser. In determining the purchaser credit amount
applicable against timber payments,
the estimated construction cost may
be reduced for the effect of differences
in applicable wage rates.

§ 223.65 Appraisal of timber for land
exchange; right-of-way, or other authorized use.
The value of timber in land exchange
or the value of timber required to be
cut for occupancy of a right-of-way or
other authorized use of National Forest
System land for which payment will be
made is to be determined by the appraisal methods in § 223.60 of this part.

§ 223.63 Advertised rates.
Timber shall be advertised for sale at
its appraised value. The road construc-

[61 FR 48625, Sept. 16, 1996]

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§ 223.66
§ 223.66

36 CFR Ch. II (7–1–06 Edition)
$50,000 or more, the advertisement
shall also include:
(1) The total estimated construction
cost of the permanent roads.
(2) A statement extending to small
business concerns qualified for preferential bidding on timber sales, under
the Small Business Act, as amended,
and the regulations issued thereunder,
the option to elect, when submitting a
bid, to have all permanent roads constructed by the Forest Service.
(3) Notice that the prospectus referred to in paragraph (a)(5) of this section contains additional information
concerning the options to have all permanent roads constructed by the Forest Service.
(c) When timber or other forest products are offered for preferential bidding
in accordance with the Small Business
Act, as amended, the advertisement
shall state that the offering is set-aside
for competitive bidding by small business concerns.

[Reserved]

ADVERTISEMENT AND BIDS
§ 223.80 When advertisement is required.
Except as otherwise provided in this
part each sale in which the appraised
value of the timber or other forest
products exceeds $10,000 will be made
only after advertisement for a period of
30 days or, if in the opinion of the officer authorizing the sale, the quantity,
value or other conditions justify, a
longer period; and any sale of smaller
appraised value will be advertised or
informal bids solicited from potential
purchasers if, in the judgment of the
officer authorizing the sale, such action is deemed advisable.
§ 223.81 Shorter advertising periods in
emergencies.
In
emergency
situations
where
prompt removal of timber included in a
sale is essential to avoid deterioration
or to minimize the likelihood of the
spread of insects, the approving officer
may authorize shortening the formal
advertising period to not less than 7
days. In other emergency situations, or
for timber sold under 36 CFR 223.2 the
Regional Forester or Chief may authorize shortening the formal advertising
period to not less than 7 days.

[50 FR 32696, Aug. 14, 1985, as amended at 71
FR 523, Jan. 4, 2006; 71 FR 11510, Mar. 8, 2006]

§ 223.83 Contents of prospectus.
(a) A timber sale prospectus shall
specify, as a minimum:
(1) The minimum acceptable stumpage or other unit prices and the
amount or rate of any additional required deposits.
(2) The amount of bid guarantee
which must accompany each bid.
(3) The amount of cash deposit or
down payment to be made promptly by
the successful bidder.
(4) The location and area of the sale,
including harvest acreage.
(5) The estimated volumes, quality,
size or age class of timber.
(6) A description of special logging
requirements for the sale.
(7) The status of marking at time of
advertisement.
(8) The method of bidding which will
be used.
(9) The contract form to be used.
(10) The estimated deposits for reforestation and stand improvement work.
(11) The contract termination date
and normal operating period.
(12) The date and amount of periodic
payments which are to be made.
(13) The discount of payment rates
for early harvest, if appropriate.

[44 FR 73029, Dec. 17, 1979. Redesignated at 49
FR 2761, Jan. 23, 1984]

§ 223.82 Contents of advertisement.
(a) A timber sale advertisement shall
include the following information:
(1) The location and estimated quantities of timber or other forest products offered for sale.
(2) The time and place at which
sealed bids will be opened in public or
at which sealed bids will be opened in
public followed by an oral auction.
(3) A provision asserting the agency’s
right to reject any and all bids.
(4) The place where complete information on the offering may be obtained.
(5) Notice that a prospectus is available to the public and to interested potential bidders.
(b) For each timber sale which includes specified road construction with
total estimated construction costs of

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Forest Service, USDA

§ 223.85

(14) The amount of performance bond
required.
(15) The road standards for specified
roads to be constructed.
(16) The estimated road construction
cost and the estimated public works
construction cost.
(17) For deficit sales:
(i) An estimate of the difference between fair market value and advertised
value, that is, the amount by which the
advertised value exceeds the appraised
value.
(ii) The amount of Forest Service
funds or materials to be used to offset
the deficit.
(18) Status of financial assistance
available to small business purchasers.
(19) Notification of preferential
award to small business firms and certification requirements for set-aside
sales.
(20) Notification of log export and
substitution restrictions.
(21) Notification of Equal Employment Opportunity compliance review
requirements.
(22) General or special information
concerning the sale which are deemed
appropriate to furnish sufficient information to prospective purchasers to
warrant further investigation.
(b) For each advertisement which extends to small concerns the option to
have all permanent roads constructed
by the Forest Service, the prospectus
shall also include:
(1) The road standards applicable to
construction of permanent roads or a
reference to the source of such information.
(2) The date of final completion for
all permanent roads.
(3) A statement explaining how the
Forest Service intends to perform road
construction by force account or contract, if the high bidder elects Forest
Service construction.
(4) The maximum period for which
timber sale contract award will be delayed while the Forest Service seeks a
satisfactory construction bid. The period stated shall not exceed 120 days
unless the Regional Forester approves
a longer period.

§ 223.84 Small business bid form provisions on sales with specified road
construction.
For each sale described in § 223.82(b),
the bid form must include provision for
a small business concern:
(a) To elect road construction by the
Forest Service and where such election
is made;
(b) To certify as to small business
status, and
(c) To indicate knowledge—
(1) Of the road construction completion date,
(2) That the Forest Service expects to
contract for road construction with a
third party,
(3) That the timber sale contract will
not be awarded unless a satisfactory
road construction bid is received or, if
the Forest Service fails to receive such
a bid within a maximum period stated
in the advertisement, the bidder agrees
to perform road construction,
(4) That the Forest Service may extend the maximum award delay time
by the amount of time needed to confirm the bidder’s size status or by any
time in excess of 40 days from timber
sale bid opening needed to begin solicitation of construction bids, and
(5) That if the Forest Service extends
the maximum award delay period because solicitation of the road contract
is delayed, the bidder may withdraw
his bid without penalty.
[42 FR 28252, June 2, 1977. Redesignated at 49
FR 2761, Jan. 23, 1984. Redesignated and
amended at 50 FR 32696, Aug. 14, 1985]

§ 223.85 Noncompetitive sale of timber.
(a) Forest officers may sell, within
their authorization, without further
advertisement, at not less than appraised value, any timber previously
advertised for competitive bids but not
sold because of lack of bids and any
timber on uncut areas included in a
contract which has been terminated by
abandonment, cancellation, contract
period expiration, or otherwise if such
timber would have been cut under the
contract. This authority shall not be
utilized if there is evidence of competitive interest in the product.
(b) Extraordinary conditions, as provided for in 16 U.S.C. 472a(d), are defined to include the potential harm to
natural resources, including fish and

[50 FR 32696, Aug. 14, 1985, as amended at 71
FR 523, Jan. 4, 2006; 71 FR 11510, Mar. 8, 2006]

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§ 223.86

36 CFR Ch. II (7–1–06 Edition)

wildlife, and related circumstances
arising as a result of the award or release of timber sale contracts pursuant
to section 2001(k) of Public Law 104–19
(109 Stat. 246). Notwithstanding the
provisions of paragraph (a) of this section or any other regulation in this
part, for timber sale contracts that
have been or will be awarded or released pursuant to section 2001(k) of
Public Law 104–19 (109 Stat. 246), the
Secretary of Agriculture may allow
forest officers to, without advertisement, modify those timber sale contracts by substituting timber from outside the sale area specified in the contract for timber within the timber sale
contract area.
(c) Extraordinary conditions, as provided for in 16 U.S.C. 472a(d), includes
those conditions under which contracts
for the sale or exchange of timber or
other forest products must be suspended, modified, or terminated under
the terms of such contracts to prevent
environmental degradation or resource
damage, or as the result of administrative appeals, litigation, court orders, or
catastrophic events. Notwithstanding
the provisions of paragraph (a) of this
section or any other regulation in this
part, when such extraordinary conditions exist on sales not addressed in
paragraph (b) of this section, the Secretary of Agriculture may allow forest
officers to, without advertisement,
modify those contracts by substituting
timber or other forest products from
outside the contract area specified in
the contract for timber or forest products within the area specified in the
contract. When such extraordinary
conditions exist, the Forest Service
and the purchaser shall make good
faith efforts to identify replacement
timber or forest products of similar
volume, quality, value, access, and topography. When replacement timber or
forest products agreeable to both parties is identified, the contract will be
modified to reflect the changes associated with the substitution, including a
rate redetermination. Concurrently,
both parties will sign an agreement
waiving any future claims for damages
associated with the deleted timber or
forest products, except those specifically provided for under the contract
up to the time of the modification. If

the Forest Service and the purchaser
cannot reach agreement on satisfactory replacement timber or forest products, or the proper value of such material, either party may opt to end the
search. Replacement timber or forest
products must come from the same national forest as the original contract,
and must meet agency requirements
for compliance with applicable laws
and regulations. Replacement timber
or forest products must also come from
an area included in an approved National Environmental Policy Act decision in which the appeals process has
been exhausted. The value of replacement timber or forest products may
not exceed the value of the material it
is replacing by more than 10% or
$10,000, whichever is less as determined
by standard Forest Service appraisal
methods.
[61 FR 14621, Apr. 3, 1996, as amended at 71
FR 34826, June 16, 2006]

§ 223.86 Bid restriction on resale of
noncompleted contract.
(a) Except as otherwise provided in
this section, no bid will be considered
in the resale of timber remaining from
any uncompleted timber sale contract
from any person, or from an affiliate of
such person, who failed to complete the
original contract:
(1) Because of termination for purchaser’s branch or; or
(2) Through failure to cut designated
timber on portions of the sale area by
the termination date, unless acceptance of such bid is determined to be in
the public interest.
(b) The no bid restriction in the preceding paragraph:
(1) Shall only apply when 50 percent
or more of the timber included in the
resale is timber remaining from the
uncompleted contract and the resale is
advertised within 3 years of the date
the uncompleted contract terminated;
(2) When imposed because of failure
to cut designated timber on portions of
the sale area by the termination date,
shall not apply to resales of timber for
which the original contract was awarded prior to April 30, 1972, unless the
contract is extended thereafter; and
(3) Shall not apply to:
(i) Resales of timber within a sustained yield unit unless competition

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Forest Service, USDA

§ 223.89

may be invited under the policy statement for the unit,
(ii) Resales of timber on contract
which would ordinarily have been
awarded prior to April 30, 1972, if award
was delayed through no fault of the
purchaser, and
(iii) Resales of timber on contracts
not extended because of environmental
considerations.
(c) Where a third-party agreement
has been approved in accordance with
§ 223.114; the original purchaser shall
not be affected by this section unless
such purchaser is an affiliate of the
third party.
(d) As used in this section, person includes any individual, corporation,
company, association, firm, partnership, society, joint stock company, or
other business entity or the successor
in interest of any of the foregoing business entities. A person is an affiliate
when either directly or indirectly:
(1) A person controls or has the power
to control the other, or
(2) A third person or persons control
or has the power to control both.

(1) Insure open and fair competition,
(2) Insure that the Federal Government receives not less than fair market
value for the public resource,
(3) Consider the economic stability of
communities whose economies are dependent upon National Forest timber,
and
(4) Be consistent with the objectives
of the National Forest Management
Act of 1976, as amended, and other Federal Statutes.
(b) As a prerequisite to participation
in an oral auction, bidders shall submit
a written sealed bid at least equal to
the minimum acceptable bid prices
specified in the prospectus. No price
subsequently bid at oral auction shall
be accepted if it is less than the written sealed bid.
(c) The Chief, Forest Service, shall
specify the use of sealed bids or a mix
of bidding methods in areas where he
has reasonable belief that collusive
bidding may be occurring or where he
determines that less than normal competitive bidding is occurring.
(d) Sealed bids shall be used for sales
within Federal Sustained Yield Units,
except where the policy statement for
the Unit restricts purchasers of timber
within the Unit from buying National
Forest timber outside the Unit and the
Chief determines that oral bidding will
protect individual communities within
the Unit.
(e) The Chief, Forest Service, may
authorize departures from the requirements of paragraphs (c) and (d) of this
section when he determines that departures are necessary to protect the public interest.
(f) The Chief, Forest Service, may authorize the testing and evaluation of
alternative bidding methods for National Forest timber.

[42 FR 28252, June 2, 1977. Redesignated at 49
FR 2761, Jan. 23, 1984 and 50 FR 32696, Aug. 14,
1985]

§ 223.87 Requirements of bidders concerning exports.
In order to have a bid considered responsive for a sale of timber from National Forest System lands, each bidder must certify that the bidder is eligible to purchase timber from National
Forest System lands consistent with
the Forest Resources Conservation and
Shortage Relief Act of 1990 (16 U.S.C.
620, et seq.) and its implementing regulations at 36 CFR part 223, and that the
bidder’s timber purchase and export activities are in compliance with the
timber export and substitution provisions of the Forest Resources Conservation and Shortage Relief Act of
1990 (16 U.S.C. 620, et seq.) and its implementing regulations at 36 CFR part 223.

[43 FR 21882, May 22, 1978. Redesignated at 49
FR 2761, Jan. 23, 1984. Further redesignated
and amended at 50 FR 32696, Aug. 14, 1985]

§ 223.89

[60 FR 46920, Sept. 8, 1995]

§ 223.88

Relation to other bidders.

Any bidder or applicant for a sale
may be required to furnish a statement
of his relation to other bidders or operators, including, if desired by the supervisor or Regional Forester, a certified statement of stockholders or
members of the firm, and the holders of

Bidding methods.

(a) Competitive sales of National
Forest timber shall be offered through
either sealed or oral auction bidding.
The method chosen for each sale will:

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§ 223.100

36 CFR Ch. II (7–1–06 Edition)

bonds, notes or other evidences of indebtedness, so far as known, so that
the statement will show the extent of
the interest of each in the bidder or applicant.

clearly indicating that the prospective
purchaser is responsible, the Contracting Officer shall conclude that the
prospective purchaser does not qualify
as a responsible purchaser.
(b) To determine a purchaser to be
responsible, a Contracting Officer must
find that:
(1) The purchaser has adequate financial resources to perform the contract
or the ability to obtain them;
(2) The purchaser is able to perform
the contract within the contract term
taking into consideration all existing
commercial and governmental business
commitments;
(3) The purchaser has a satisfactory
performance record on timber sale contracts. A prospective purchaser that is
or recently has been seriously deficient
in contract performance shall be presumed not to be responsible, unless the
Contracting Officer determines that
the circumstances were beyond the
purchaser’s control and were not created through improper actions by the
purchaser or affiliate, or that the purchaser has taken appropriate corrective action. Past failure to apply sufficient tenacity and perseverance to perform acceptably under a contract is
strong evidence that a purchaser is not
a responsible contractor. The Contracting Officer shall consider the
number of contracts involved and extent of deficiency of each in making
this evaluation;
(4) The purchaser has a satisfactory
record of integrity and business ethics;
(5) The purchaser has or is able to obtain equipment and supplies suitable
for logging the timber and for meeting
the resource protection provisions of
the contract;
(6) The purchaser is otherwise qualified and eligible to receive an award
under applicable laws and regulations.
(c) If the prospective purchaser is a
small business concern and the Contracting Officer determines that the
purchaser does not qualify as a responsible purchaser on an otherwise acceptable bid, the Contracting Officer shall
refer the matter to the Small Business
Administration which will decide
whether or not to issue a Certificate of
Competency.

[44 FR 73029, Dec. 17, 1979. Redesignated at 49
FR 2761, Jan. 23, 1984 and 50 FR 32696, Aug. 14,
1985]

AWARD OF CONTRACTS
§ 223.100 Award to highest bidder.
The sale of advertised timber shall be
awarded to the responsible bidder submitting the highest bid that conforms
to the conditions of the sale as stated
in the prospectus unless:
(a) Determination is made to reject
all bids.
(b) Two or more bidders, all of whom
meet the requirements, submit equal
bids which are the highest bids, in
which case award may be by the drawing of lots. Equal bids from parties
having direct or indirect common control or association in logging, processing or marketing may be consolidated to the extent deemed necessary
by the awarding officer in order to give
to any others who have bid the same
amount an equitable opportunity in
the drawing of lots.
(c) The highest bidder is notoriously
or habitually careless with fire.
(d) Monopoly, injurious to the public
welfare, would result from the control
of large amounts of public or of public
and private timber.
(e) The high bidder has elected Forest
Service road construction in response
to an advertisement extending such an
option, the Forest Service cannot perform the construction and in response
to solicitation has not received a satisfactory bid for such construction within the period stated in the prospectus
and the high timber sale bidder is unwilling to perform the construction.
[44 FR 73029, Dec. 17, 1979. Redesignated at 49
FR 2761, Jan. 23, 1984, and amended at 50 FR
32696, Aug. 14, 1985; 53 FR 33132, Aug. 30, 1988]

§ 223.101 Determination of purchaser
responsibility.
(a) A Contracting Officer shall not
award a timber sale contract unless
that officer makes an affirmative determination of purchaser responsibility. In the absence of information

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Forest Service, USDA

§ 223.111

(d) Affiliated concerns, as defined in
§ 223.49(a)(5) of this subpart are normally considered separate entities in
determining whether the concern that
is to perform the contract meets the
applicable standards for responsibility.
However, the Contracting Officer shall
consider an affiliate’s past performance
and integrity when they may adversely
affect the prospective purchaser’s responsibility.

CONTRACT ADMINISTRATION
§ 223.110 Delegation to regional forester.
The Chief, Forest Service, after approval of conditions of sale, may authorize Regional Foresters formally to
execute timber sale contracts and related papers in sales exceeding the volume which the Regional Forester has
been authorized to sell.
§ 223.111 Administration of contracts
in designated disaster areas.
This section is to implement the provisions of section 242 (a), (b), and (c) of
the Disaster Relief Act of 1970 (84 Stat.
1956) which relate to contracts for the
sale of National Forest timber in connection with areas damaged by major
disaster as designated by the President
pursuant to the Act.
(a) Where an existing contract for the
sale of National Forest timber does not
provide relief from major physical
change not due to purchaser’s negligence prior to approval of construction of any section of specified road or
other specified development facility
and, as a result of a major disaster in
a designated area a major physical
change results in additional construction work by the purchaser in connection with such a road or facility, the
United States shall bear such increased
construction cost if, as determined by
the Chief, Forest Service, the estimated cost is—
(1) More than $1,000 for sales under 1
million board feet, or
(2) More than $1 per thousand board
feet for sales of 1 to 3 million board
feet, or
(3) More than $3,000 for sales over 3
million board feet.
(b) Where the Chief, Forest Service,
determines that damages are so great
that restoration, reconstruction, or
construction is not practical under the
cost-sharing arrangement in paragraph
(a) of this section, he may allow cancellation of the contract notwithstanding provisions therein or in
§ 223.116.
(c) The Chief, Forest Service, is authorized to reduce to 7 days the minimum time to advertise the sale of National Forest timber whenever he determines that—

[53 FR 33132, Aug. 30, 1988]

§ 223.102 Procedures when sale is not
awarded to highest bidder.
If the highest bid is not accepted and
the sale is still deemed desirable, all
bids may be rejected and the timber readvertised; or, if the highest bidder
cannot meet the requirements under
which the timber was advertised or the
withholding of award to him is based
on one or more of paragraphs (c), (d),
and (e) of § 223.100, award at the highest
price bid may be offered to the next
highest qualified bidder or to the other
qualified bidders in order of their bids
until the award is accepted by one or
refused by all of the qualified bidders.
(92 Stat. 1301, Pub. L. 95–465)
[44 FR 73029, Dec. 17, 1979. Redesignated at 49
FR 2761, Jan. 23, 1984, and 53 FR 33132, Aug.
30, 1988]

§ 223.103 Award of small business setaside sales.
If timber is advertised as set aside for
competitive bidding by small business
concerns, award will be made to the
highest bidder who qualifies as a small
business concern and who has not been
determined by the Small Business Administration to be ineligible for preferential award of set-aside sales. If
there are no qualified small business
bidders any readvertisement shall be
without restriction on the size of bidders.
(92 Stat. 1301, Pub. L. 95–465)
[44 FR 73029, Dec. 17, 1979. Redesignated at 49
FR 2761, Jan. 23, 1984, and 53 FR 33132, Aug.
30, 1988]

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§ 223.112

36 CFR Ch. II (7–1–06 Edition)

(1) The sale of such timber will assist
in the construction of any area of a
State damaged by a major disaster,
(2) The sale of such timber will assist
in sustaining the economy of such
area, or
(3) The sale of such timber is necessary to salvage the value of timber
damaged in such major disaster or to
protect undamaged timber.
(d) Any request for relief under paragraph (a) or (b) of this section shall be
made in writing to the Forest Supervisor having administrative responsibility for the land involved.
(Sec. 242 (a), (b), and (c), 84 Stat. 1756, 42
U.S.C. 4461)

§ 223.112 Modification of contracts.
(a) Timber sale contracts may be
modified only when the modification
will apply to unexecuted portions of
the contract and will not be injurious
to the United States. Modifications
may be made by the officer approving
the sale, by his successor, or by his superior, except as provided in § 223.110.
(b) Timber sale contracts awarded
after October 1, 1995, that have been
suspended for more than 90 days, during the normal operating season, at no
fault of the purchaser, because of administrative appeals or litigation, that
did not include contract provisions for
rate redeterminations may be modified
at the request of the timber sale purchaser to include a rate redetermination for the remaining unharvested volume to reflect significant decreases in
market value during the period of
delay. Rates in effect at the time of the
suspension will be redetermined in accordance with the standard Forest
Service methods in effect 45 days prior
to the rate redetermination.
[42 FR 28252, June 2, 1977. Redesignated at 49
FR 2760–2761, Jan. 23, 1984, as amended at 69
FR 18814, Apr. 9, 2004]

§ 223.113 Modification of contracts to
prevent environmental damage or
to conform to forest plans.
Timber sale contract, permits, and
other such instruments may be modified to prevent environmental damage
or to make them consistent with
amendments or revisions of land and
resource management plans adopted
subsequent to award or issuance of a

timber sale contract, permit, or other
such instrument. Compensation to the
purchaser, if any, for modifications to
a contract shall be made in accordance
with provisions set forth in the timber
sale contract. When determining compensation under a contract, timber
payment rates shall be redetermined in
accordance with appraisal methods in
§ 223.60 of this subpart.
[61 FR 64816, Dec. 9, 1996]

§ 223.114

Acquisition by third party.

No agreement permitting a third
party to acquire the rights of a purchaser under a timber sale contract
may be recognized and approved by the
Forest Service except in writing,
signed by the officer approving the
sale, his successor, or superior officer.
Such approval shall not relieve the
purchaser of his responsibilities or liabilities under the timber sale contract
and may be given only if—
(a) The third party is acceptable to
the Forest Service as a purchaser of
timber under the conditions and requirements then in effect for similar
timber sales and assumes in writing all
of the obligations to the Forest Service
under the terms of the timber sale contract as to the uncompleted portion
thereof, or
(b) The rights are acquired in trust as
security and subject to such conditions
as may be necessary for the protection
of the public interests.
§ 223.115

Contract extensions.

The term of any contract or permit
shall not be extended unless the approving officer finds:
(a) That the purchaser has diligently
performed in accordance with contract
provisions and an approved plan of operation; or
(b) That the substantial overriding
public interest justifies the extension.
§ 223.116

Cancellation.

(a) Timber sale contracts and permits
may be canceled:
(1) For serious or continued violation
of their terms.
(2) Upon application, or with the consent of the purchaser, when such action
is of advantage to the United States or
not prejudicial to its interests.

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(3) Upon application of the purchaser
if the value of the timber remaining to
be cut is diminished materially because of catastrophic damage caused
by forces beyond the control of the purchaser resulting in (i) physical change
in the sale area or access to it, or (ii)
damage to timber remaining to be cut.
(4) For conviction of violation of
criminal statutes or, following final
agency or judicial determination, of
violation of civil standards, orders, permits, or others regulations for the protection of environmental quality issued
by a Federal agency, State agency, or
political subdivision thereof, in the
conduct of operations thereunder, on
National Forest System land, unless
compliance with such laws or regulations would preclude performance of
other contractual requirements.
(5) Upon determination by the Chief,
Forest Service, that operations thereunder would result in serious environmental degradation or resource damage and with reasonable compensation
to the purchaser for unrecovered costs
incurred under the contract and the
difference between the current contract value and the average value of
comparable National Forest timber
sold during the preceding 6-month period.
(b) Cancellation will be by the Chief,
Forest Service. Authority to cancel
contracts
under
paragraph
(a)(1)
through (4) of this section may be delegated to Regional Foresters for sales
within their authorization. All contract cancellations under paragraph
(a)(5) of this section shall be by the
Chief, Forest Service, whose decision
shall be the final agency decision.
[42 FR 28252, June 2, 1977, as amended at 48
FR 23819, May 27, 1983. Redesignated at 49 FR
2761, Jan. 23, 1984]

§ 223.117 Administration of cooperative or Federal sustained yield
units.
With respect to sustained yield units
established pursuant to the provisions
of the Act of March 29, 1944 (58 Stat.
132; 16 U.S.C. 583–583l), the Chief, Forest
Service, with authority to delegate to
other officers and employees of the
Forest Service:
(a) Shall provide that National Forest timber in any sustained yield unit

shall be available in sufficient amounts
to meet the needs of bona fide farmers,
settlers, miners, residents and prospectors for minerals for personal and
domestic use as provided by law and by
regulation.
(b) May offer for sale to cooperators,
without competition but at not less
than appraised value, timber on National Forest lands within an approved
cooperative sustained yield unit; or, if
the approved sustained yield unit consists entirely of federally owned or administered forest land and if necessary
for the maintenance of a stable community or communities, may offer National Forest timber for sale to responsible operators within such community
or communities, at not less than appraised value but without competition
or with competition restricted to responsible operators who will manufacture the timber to at least a stated degree within the community or communities to be maintained. Each such sale
which involves more than $500 in
stumpage value may be made only
after notice has been given in advance
by such means as may be deemed effective in informing the public of the proposed action, including in any event,
publication, once weekly for four consecutive weeks and with additional insertions if needed, in one or more newspapers of general circulation in the vicinity of the place where the timber is
located, of a notice of the proposed sale
stating at least:
(1) The location, estimated quantity
and appraised value of the timber to be
cut;
(2) The name and address of the proposed purchaser or those of the operators among whom bidding is to be restricted;
(3) The time and place of a public advisory hearing on the proposed sale, to
be held not earlier than 30 days after
the first publication of said notice, if
requested by the State or county where
the timber is located or by any other
person deemed to have a reasonable interest in the proposed sale or in its
terms; and
(4) The title and address of the officer
of the Forest Service to whom any request for such hearing should be made.
Such requests need be considered only
if received at the place designated in

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36 CFR Ch. II (7–1–06 Edition)

the notice not later than 15 days after
the first publication of such notice. If a
public advisory hearing is to be held,
notice of it shall be published in the
same newspaper or newspapers as the
original notice, stating the place where
it will be held and the time, which
shall not be earlier than 10 days after
the first publication of the said notice
of hearing, and shall appear once each
week, but not for more than four successive weeks in any event, until the
date set for the hearing. Any such
hearing shall be conducted by the Chief
or by any officer designated by him as
his representative, except that if the
amount of the proposed sale is not in
excess of that which the Regional Forester has been authorized to sell without prior approval of the Chief the
hearing may be held by the Regional
Forester concerned or by his representative and decision may be by the Regional Forester. At any such hearing,
opportunity shall be given to those
having a reasonable interest to make
oral statements or to file written
statements discussing the advantages
and disadvantages of the proposed sale;
and the officer holding the hearing
may, in his discretion, permit the filing of such statements within a reasonable period after the close of the hearing to become part of the record for
consideration before a decision is
made.
(c) Shall keep available for public inspection,
(1) During the life of any sustained
yield unit, the minutes or other record
of the hearing held on the establishment thereof, and the determination of
action taken following the hearing including any modification of the proposals as submitted at the hearing; and
(2) During the life of any cooperative
agreement for coordinated management the similar record of the hearings
and actions determined upon; and
(3) During the life of any sustained
yield unit the similar record of any
public hearing which may be held on a
sale made without competition or with
restricted competition and the action
determined upon. Such records of any
case may be kept in any office of the
Forest Service designated by the Chief
as being suitable and convenient of access for probably interested persons.

(d) Shall make provision, in any contract for the purchase of timber without competition or with restricted
competition, if that contract is of more
than 7 years’ duration and in his discretion in any case of shorter duration,
for the redetermination of rates for
stumpage and for required deposits to
be paid by the purchasers, such redetermination to be effective at intervals
or dates stated in the contract; but the
sum of such redetermined rates for
stumpage and sale area betterment
shall not be less than the base rates in
the published notice of the proposed
sale.
(e) May modify and revise existing
cooperative agreements entered into
under said act after taking appropriate
action.
§ 223.118 Appeal process for small
business timber sale set-aside program share recomputation decisions.
(a) Decisions subject to appeal. The
rules of this section govern appeal of
recomputation decisions related to
structural, special, or market changes
or the scheduled 5-year recomputations
of the small business share of National
Forest System timber sales. Certain
decisions related to recomputation of
shares, such as structural change and
carryover volume, may require two decisions, one to determine that a recomputation is needed and the other to
recompute the shares. Decisions made
both at the earlier stage as well as the
later stage are appealable.
(b) Manner of giving notice—(1)
Predecisional notice and comment. The
Responsible Official shall provide
qualifying timber sale purchasers, as
defined in paragraph (c)(1) of this section, 30 days for predecisional review
and comment on any draft decision to
reallocate shares, including the data
used in making the proposed recomputation decision.
(2) Notice of decision. Upon close of
the 30-day predecisional review period,
the Responsible Official shall consider
any comments received. Within 15 days
of the end of the comment period, the
Responsible Official shall make a decision on the small business shares and
shall give prompt written notice to all
parties on the national forest timber

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sale bidders list for the affected area.
The notice of decision must identify
the name of the Appeal Deciding Officer, the address, the date by which an
appeal must be filed, and a source for
obtaining the appeal procedures information.
(c) Who may appeal or file written comments as an interested party. (1) Only
timber sale purchasers, or their representatives, who are affected by recomputations of the small business
share of timber sales as described in
paragraph (a) of this section and who
have submitted predecisional comments pursuant to paragraph (b)(1) of
this section, may appeal recomputation decisions under this section or
may file written comments as an interested party.
(2) Interested parties are defined as
the Small Business Administration and
those timber sale purchasers, or their
representatives, who are affected by recomputations of the small business
share of timber sales as described in
paragraph (a) of this section and who
have individually, or through an association to which they belong, submitted predecisional comments pursuant to paragraph (b)(1) of this section.
(i) A timber sale purchaser may submit comments on an appeal as an interested party if an association to
which the purchaser belongs filed
predecisional comment but later decides not to appeal or not to file comments as an interested party.
(ii) A timber sale purchaser, who is a
member of an association that appeals
a decision, may not file a separate appeal unless that purchaser filed separate predecisional comment under
paragraph (b)(1).
(3) Interested parties who submit
written comments on an appeal filed by
another party may not continue an appeal if the appellant withdraws the appeal.
(d) Level of appeal. Only one level of
review is available for appeal of decisions pertaining to recomputations
under the Small Business Timber Sale
Set-aside Program. The Appeal Deciding Officer is the official one level
above the level of the Responsible Official who made the recomputation of
shares decision. The Responsible Official is normally the Forest Supervisor;

thus, the Appeal Deciding Officer is
normally the Regional Forester. However, when the Regional Forester
makes recomputation decisions, the
Appeal Deciding Officer is the Chief or
such officer at the National headquarters level as the Chief may designate.
(e) Filing procedures. In order to file
an appeal under this section, an appellant must file a notice of appeal, as
specified in the notice of decision, with
the Appeal Deciding Officer within 20
days of the date on the notice of the
decision. This date must be specified in
the notice of decision given pursuant
to paragraph (b)(2) of this section.
Written comments filed by an interested party in response to an appeal
must be filed within 15 days after the
close of the appeal filing period.
(f) Content of notice of appeal. (1) It is
the responsibility of the appellant to
provide sufficient narrative evidence
and argument to show why a recomputation decision by the Responsible Official should be reversed or changed.
(2) An appellant must include the following information in a notice of appeal:
(i) The appellant’s name, mailing address, and daytime telephone number;
(ii) The title or type of recomputation decision involved, the date of the
decision, and the name of the Responsible Official;
(iii) A brief description and date of
the decision being appealed:
(iv) A statement of how the appellant
is adversely affected by the decision
being appealed;
(v) A statement of the facts in dispute regarding the issue(s) raised by
the appeal;
(vi) If relevant, any specific references to any law, regulation, or policy that the appellant believes to have
been violated and the basis for such an
allegation;
(vii) A statement as to whether and
how the appellant has tried to resolve
with the Responsible Official the
issue(s) being appealed, including evidence of submission of written comments at the predecisional stage as
provided by paragraph (a) of this section, the date of any discussion, and
the outcome of that meeting or contact; and

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36 CFR Ch. II (7–1–06 Edition)

(viii) A statement of the relief the
appellant seeks.
(g) Time periods and timeliness. (1) All
time periods applicable to this section
will begin on the first day following a
decision or action related to the appeal.
(2) Time periods applicable to this
section are computed using calendar
days. Saturdays, Sundays, or Federal
holidays are included in computing the
time allowed for filing an appeal; however, when the filing period would expire on a Saturday, Sunday, or Federal
holiday, the filing time is automatically extended to the end of the next
Federal working day.
(3) It is the responsibility of those filing an appeal to file the notice of appeal by the end of the filing period. In
the event of questions, legible postmarks on a mailed appeal or the time
and date imprint on a facsimile appeal
will be considered evidence of timely
filing. Where postmarks or facsimile
imprints are illegible, the Appeal Deciding Officer shall rule on the timeliness of the notice of appeal.
(4) The time period for filing a notice
of appeal is not extendable.
(h) Dismissal without decision. The Appeal Deciding Officer shall dismiss an
appeal and close the record without a
decision in any of the following circumstances:
(1) The appellant is not on the timber
sale bidders list for the area affected by
the recomputation decision;
(2) The appellant’s notice of appeal is
not filed within the required time period;
(3) The appellant’s notice of appeal
does not contain responses required by
paragraphs (f)(2)(i) through (f)(2)(viii)
of this section; or
(4) The appellant did not submit written comments on the proposed decision
of the new recomputed shares as described in paragraph (c) of this section.
(i) Appeal record. The appeal record
consists of the written decision being
appealed, any predecisional comments
received, any written comments submitted by interested parties, any other
supporting data used to make the decision, the notice of appeal, and, if prepared, a responsive statement by the
Responsible Official which addresses
the issues raised in the notice of ap-

peal. The Responsible Official must forward the record to the Appeal Deciding
Officer within 7 days of the date the
notice of appeal is received. A copy of
the appeal record must be sent to the
appellant at the same time.
(j) Appeal decision—(1) Responsive
statement for appeal decision. The Appeal Deciding Officer may request the
Responsible Official to prepare a responsive statement. However, if the information in the files clearly demonstrates the rationale for the Responsible Official’s decision, then a responsive statement addressing the points of
the appeal is not necessary.
(2) Appeal issue clarification. For clarification of issues raised in the appeal,
the Appeal Deciding Officer may request additional information from either the Responsible Official, the appellant, or an interested party who has
submitted comments on the appeal. At
the discretion of the Appeal Deciding
Officer, an appellant or interested
party may be invited to discuss data
relevant to the appeal. Information
provided to clarify issues or facts in
the appeal must be based upon information previously documented in the
file or appeal. Any information provided as a result of the Appeal Deciding
Officer’s request for more information
must be made available to all parties,
that is, to the Responsible Official, the
appellant, and interested parties who
have submitted comments on the appeal. All parties will have 5 days after
the Appeal Deciding Officer receives
the additional information to review
and comment on the information, and
the appeal decision period will be extended 5 additional days.
(3) Issuance of final decision. The Appeal Deciding Officer shall review the
decision and appeal record and issue a
written appeal decision to the parties
within 30 days of the close of the appeal period except that this period
must be extended to 35 days when additional information is requested by the
Appeal Deciding Officer. The Appeal
Officer may affirm or reverse the Responsible Official’s decision, in whole
or in part. There is no extension of the
time period for rendering an appeal decision.
(k) Implementation of decisions during
pendency of appeal. Recomputation of

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shares arising from a scheduled 5-year
recomputation are effective on April 1
following the end of the 5-year period
being considered. If an appeal that may
affect the shares for the next 5-year period is not resolved by the April 1 date,
the share decision announced by the
Responsible Official must be implemented. If an appeal decision results in
a change in the shares, the revised
total share of the Small Business Timber Sale Set-aside Program must be accomplished during the remaining portion of the 5-year period.
(l) Timber sale set-aside policy changes.
Timber purchasers shall receive an opportunity, in accordance with all applicable laws and regulations, to review
and comment on significant changes in
the Small Business Timber Sale Setaside Program or policy prior to adoption and implementation.
(m) Information collection requirements. The provisions of paragraph (f)
of this section specify the information
that appellants must provide when appealing decisions pertaining to recomputation of shares. As such, these
rules contain information requirements as defined in 5 CFR Part 1320.
These information requirements have
been approved by the Office of Management and Budget and assigned control
number 0596–0141.
[64 FR 411, Jan. 5, 1999]

Subpart C—Suspension and
Debarment of Timber Purchasers
SOURCE: 52 FR 43329, Nov. 12, 1987, unless
otherwise noted.

§ 223.130 Scope.
(a) This subpart prescribes policies
and procedures governing the debarment and suspension of purchasers of
National Forest System timber. This
subpart further prescribes policies and
procedures governing those persons
who violate the Forest Resources Conservation and Shortage Relief Act of
1990 (16 U.S.C. 620, et seq.).
(b) It provides for the listing of
debarred and suspended purchasers.
(c) It sets forth the causes and procedures for debarment and suspension
and for determining the scope, duration, and treatment to be accorded to

purchasers listed as debarred or suspended.
[52 FR 43329, Nov. 12, 1987, as amended at 60
FR 46921, Sept. 8, 1995]

§ 223.131

Applicability.

These regulations apply to purchasers of National Forest System timber as well as to those persons who violate the Forest Resources Conservation
and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.). These regulations do
not apply to Forest Service procurement contracts which are governed by
regulations at 41 CFR 4–1.6.
[60 FR 46921, Sept. 8, 1995]

§ 223.132

Policy.

(a) The Forest Service shall solicit
and consider timber sale bids from and
award contracts only to responsible
business concerns and individuals. Debarment and suspension by the Forest
Service are discretionary actions that,
taken in accordance with these regulations, are appropriate means to effectuate this policy.
(b) Debarment and suspension shall
be imposed only for the causes and in
accordance with the procedures set
forth in this subpart. The serious nature of debarment and suspension requires that these actions be imposed
only in the public interest, for the Government’s protection, and not for the
purpose of punishment.
(c) Debarment and suspension actions
taken under this subpart shall be based
on the administrative record, including
any submissions and argument made
by the purchaser or named affiliate in
accordance with this subpart, and shall
be limited in scope and duration to
that necessary to protect the Government’s interest.
§ 223.133

Definitions.

As used in this subpart, the following
terms shall have the meanings set
forth below:
Adequate evidence means information
sufficient to support the reasonable belief that a particular act or omission
has occurred.
Affiliates are business concerns or
persons, whose relationship entails the
following:

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36 CFR Ch. II (7–1–06 Edition)

(a) Either party directly or indirectly
controls or has the power to control
the other; or
(b) A third party directly or indirectly controls or has the power to control both. In determining whether affiliation exists, the Forest Service
shall consider all appropriate factors,
including, but not limited to, common
ownership, common management, common facilities, and contractual relationships. Further guidelines to be
used in determining affiliation are
found in the Small Business Administration regulation in 13 CFR 121.401.
Civil judgment means a judgment or
finding of a civil offense by any court
of competent jurisdiction.
Control means the power to exercise,
directly or indirectly, a controlling influence over the management, policies,
or activities of an individual or business concern, whether through ownership of voting securities, through one
or more intermediary individuals or
business concerns, or otherwise.
Conviction means a judgment or conviction of a criminal offense by any
court of competent jurisdiction, whether entered upon a verdict or a plea, and
includes a conviction entered upon a
plea of nolo contendere.
Debarment means action taken by a
debarring
official
under
§§ 223.136
through 223.140 to exclude a purchaser
from Forest Service timber sale contracts for a reasonable, specified period
of time. A purchaser so excluded is
‘‘debarred.’’ Debarment pursuant to
the Forest Resources Conservation and
Shortage Relief Act of 1990 (16 U.S.C.
620, et seq. means action taken by a debarring official under §§ 223.136–223.140
to exclude persons from entering into
any contract for the purchase of unprocessed timber originating from Federal lands and from taking delivery of
unprocessed Federal timber purchased
by another party for the period of debarment.
Debarring official means the Chief of
the Forest Service or the Deputy Chief,
National Forest System, or the Associate Deputy Chief, Resources Divisions, National Forest System.
Federal lands means, for the purposes
of the Forest Resources Conservation
and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.), lands that are owned

by the United States, but does not include any lands the title to which is:
(a) Held in trust by the United States
for the benefit of any Indian tribe or
individual,
(b) Held by any Indian tribe or individual subject to a restriction by the
United States against alienation, or
(c) Held by any Native Corporation as
defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C.
1602).
Indictment means indictment for a
criminal offense. An information or
other filing by competent authority
charging a criminal offense shall be
given the same effect as an indictment.
Legal proceedings means any civil judicial proceeding to which the Government is a party or any criminal proceeding. The term includes appeals
from such proceedings.
Notice means a written communication served in person or sent by certified mail, return receipt requested, or
its equivalent, to the last known address of a party, its identified counsel,
or agent for service of process. In the
case of an organization, such notice
may be sent to any partner, principal
officer, director, owner or co-owner, or
joint venturer.
Person means any individual, partnership, corporation, association, or
other legal entity, and includes any
subsidiary, subcontractor, parent company, and business affiliates.
Preponderance of the evidence means
proof by information that, compared
with that opposing it, leads to the conclusion that the fact at issue is more
probably true than not.
Purchaser means any person, who:
(a) Submits bids for, is awarded, or
reasonably may be expected to submit
bids for or be awarded, a Forest Service
timber sale contract;
(b) Conducts business with the Forest
Service as an agent or representative
of another timber sale purchaser; or
(c) For the purposes of the Forest Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.)
(Act), any person who violates the Act
or any regulation or contract issued
under the Act, or any person who may
reasonably be expected to enter into a
contract to purchase or receive delivery of unprocessed Federal timber in

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violation of the Act or its implementing regulations.
Suspending official means the Chief of
the Forest Service or the Deputy Chief,
National Forest System or the Associate Deputy Chief, Resources Divisions, National Forest System.
Suspension means action taken by a
suspending official under §§ 223.141
through 223.145 to immediately exclude
a purchaser from bidding on or purchasing National Forest System timber
for a temporary period of time pending
completion of an investigation and
such legal or debarment proceedings as
may ensue; a purchaser so excluded is
suspended.
[52 FR 43329, Nov. 12, 1987, as amended at 60
FR 46921, Sept. 8, 1995]

§ 223.134 List of debarred and suspended purchasers.
(a) The Deputy Chief, National Forest System, shall compile and maintain a current list of National Forest
System timber purchasers and affiliates who are debarred, suspended, or
proposed for debarment. This list shall
be distributed to all Regional Foresters
and Forest Supervisors, the General
Services Administration, the General
Accounting Office, the Bureau of Land
Management and other Federal agencies requesting said list.
(b) The Forest Service list shall contain the following information:
(1) The purchaser’s name and address,
and the name and address of any affiliate of the purchaser included pursuant
to §§ 223.140(a) or § 223.145.
(2) The cause(s) for the action (see
§§ 223.137 and 223.142).
(3) Any limitations to or deviations
from the normal effect of debarment or
suspension.
(4) The effective date of the action
and, in the case of debarment, the expiration date.
(5) The name and telephone number
of the point of contact in the Forest
Service regarding the action.
§ 223.135 Effect of listing.
(a) Except as otherwise provided in
paragraph (b) of this section, purchasers debarred or suspended in accordance with this subpart shall be excluded from bidding on or award of
Forest Service timber sale contracts.

The Forest Service shall not knowingly
solicit or consider bids from, award
contracts to, approve a third party
agreement with, or renew or otherwise
extend, except pursuant to the terms of
a contract term adjustment, an existing timber sale contract with these
purchasers, unless the Chief of the Forest Service or authorized representative determines, in writing, that there
is a compelling reason for such action.
(b) In addition to the provisions of
paragraph (a) of this section, persons
debarred pursuant to § 223.137(g) shall
be prohibited from entering into any
contract to purchase unprocessed timber from Federal lands and shall also
be precluded from taking delivery of
Federal timber purchased by another
person for the period of debarment.
[60 FR 46921, Sept. 8, 1995]

§ 223.136

Debarment.

(a) General. In accordance with the
procedures in § 223.138, the debarring official may in the public interest, debar
a purchaser for any of the causes listed
in § 223.137. However, the existence of a
cause for debarment does not necessarily require that the purchaser be
debarred. In making any debarment decision, the debarring official shall consider the seriousness of the purchaser’s
acts or omissions and any mitigating
factors.
(b) Effect of proposed debarment. (1)
Upon issuance of a notice of proposed
debarment by the debarring official
and until the final debarment decision
is rendered, the Forest Service shall
not solicit or consider bids from, award
contracts to, approve a third party
agreement with, renew or otherwise extend, except pursuant to the terms of a
contract term adjustment, any contract with that purchaser. The Chief of
the Forest Service or authorized representative may waive this exclusion
upon a written determination identifying compelling reasons to continue
doing business with that purchaser
pending completion of debarment proceedings.
(2) In addition to paragraph (b)(1) of
this section, issuance of a notice of
proposed debarment under § 223.137(g)

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shall preclude such person from entering into any contract to purchase unprocessed timber originating from Federal lands, and from taking delivery of
unprocessed Federal timber from any
other party who purchased such timber.
[52 FR 43329, Nov. 12, 1987, as amended at 60
FR 46921, Sept. 8, 1995]

§ 223.137 Causes for debarment.
The debarring official may debar a
purchaser for any of the following
causes:
(a) Conviction of or civil judgment
for:
(1) Theft, forgery, bribery, embezzlement, falsification or destruction of
records, making false statements, or
receiving stolen property;
(2) Fraud, a criminal offense, or violation of Federal or State antitrust
laws, any of which occurred in connection with obtaining, attempting to obtain, or performing a public contract or
subcontract.
(3) Any other offense indicating a
lack of business integrity or honesty
that seriously and directly affects the
present responsibility of the purchaser.
(b) A purchaser’s debarment from the
purchase of timber by another Federal
agency which sells timber.
(c) Cutting and/or removal of more
than incidental volumes of timber not
designated for the purchaser’s cutting
from a national forest.
(d) Substantial violation of the terms
of one or more Forest Service timber
sale contracts so serious as to justify
debarment, such as:
(1) Willful failure to perform in accordance with contract; or
(2) A history of failure to perform
contract terms; or of unsatisfactory
performance of contract terms.
(e) Among actions the Forest Service
regards as so serious as to justify debarment under paragraph (d) of this
section are willful violation or repeated failure to perform National Forest System timber sale contract provisions relating to the following:
(1) Fire suppression, fire prevention,
and the disposal of slash;
(2) Protection of soil, water, wildlife,
range, cultural, and timber resources
and protection of improvements when
such failure causes significant environ-

mental, resource, or improvements
damage;
(3) Removal of designated timber
when such failure causes substantial
product deterioration or conditions favorable to insect epidemics;
(4) Observance of restrictions on exportation of timber;
(5) Observance of restrictions on the
disposal of timber from small business
set-aside sales;
(6) Providing access to the Forest
Service upon its request to purchaser’s
books and accounts;
(7) Payment of monies due under
terms of a Forest Service timber sale
contract, including payment of damages relating to failure to cut designated timber by the contract termination date;
(8) Performance of contract by the
contract termination date.
(f) Any other cause so serious or compelling that if affects the present responsibility of a purchaser of Government timber.
(g) Violation of the Forest Resources
Conservation and Shortage Relief Act
of 1990 (16 U.S.C. 620, et seq.) (Act) or
any regulation or contract issued
under the Act.
[52 FR 43329, Nov. 12, 1987, as amended at 60
FR 46921, Sept. 8, 1995]

§ 223.138

Procedures for debarment.

(a) Investigation and referral. Information which may be sufficient cause for
debarment of a timber sale purchaser
and affiliates shall be reported to the
Forest Service Debarring Official. Generally, such information should be referred through the Forest Supervisor
and the Regional Forester. The referral
shall be accompanied by a complete
statement of the facts supported by appropriate exhibits and a recommendation for action. Where the statement of
facts indicates a possible criminal offense, except possible antitrust violations, the debarring official shall notify the Office of Inspector General,
USDA. Where the statement of facts
indicates a possible antitrust violation,
the debarring official shall notify the
Antitrust Division, Department of Justice.

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§ 223.138

(b) Decisionmaking process—(1) Notice
of proposal to debar. The debarring official shall initiate debarment by advising the purchaser and any specifically
named affiliate, by certified mail, return receipt requested. The notice document shall include the following information:
(i) That debarment is being considered.
(ii) The reasons for the proposed debarment in terms sufficient to put the
recipient on notice of the conduct or
transaction(s) upon which it is based.
(iii) The cause(s) relied upon under
§ 223.137 for proposing debarment.
(iv) The specific procedures governing debarment decisionmaking in
§ 223.138 (b)(1) through (b)(8).
(v) The effect of the issuance of the
notice of proposed debarment pending a
final
debarment
decision
(see
§ 223.136(b)).
(vi) The potential effect of a debarment.
(2) Submission in opposition. Within 30
calendar days after receipt of the notice of proposed debarment, the respondent my submit, in person, in writing, or through a representative, information and argument in opposition to
and/or in mitigation of the proposed debarment, including any additional specific information that raises a genuine
dispute over the material facts.
(3) Informal hearing. Pursuant to
paragraph (b)(2) of this section, a respondent may request an informal
hearing with the debarring official. The
informal hearing shall be held within
20 calendar days from the date the request is received. The debarring official
may postpone the date of the hearing if
the respondent requests a postponement in writing. At the hearing, the respondent, appearing personally or
through an attorney or other authorized representative, may informally
present and explain evidence that
causes for debarment do not exist, evidence of any mitigating factors, and
arguments concerning the imposition,
scope, duration or effects of proposed
debarment or debarment. A transcript
of the informal hearing shall not be required.
(4) Additional proceedings as to disputed material facts. In actions not
based upon a conviction or civil judg-

ment, if the debarring official finds
that and gives notice that the submission in opposition raises a genuine dispute over facts material to the proposed debarment, respondent(s) may
request a fact-finding conference on
those disputed material facts. Such a
conference shall be held within 20 calendar days from the date the request is
received unless mutually agreed otherwise. The fact-finding conference shall
conform with the following requirements:
(i) At least 10 days before the factfinding conference, the debarring official shall send the respondent a copy of
all documents in the administrative
record as of the date of transmittal and
not objected to by the Department of
Justice.
(ii) At the conference, the respondent
shall have the opportunity to appear
with counsel, submit documentary evidence, present witnesses, and confront
any person the Forest Service presents.
(iii) A transcribed record of any additional proceedings shall be made available at cost to the respondent upon request, unless the respondent and the
Forest Service, by mutual agreement,
waive the requirement for a transcript.
(5) Debarring official’s decision—(i) No
additional proceedings necessary. In actions based upon a conviction or civil
judgement or in which there is no genuine dispute over material facts, the
debarring official shall make a decision
on the basis of all the information in
the administrative record, including
any submission made by the purchaser
or any specifically named affiliate. The
decision shall be made within 30 working days after receipt of any information and argument submitted, unless
the debarring official extends this period for good cause.
(ii) Additional proceedings necessary.
(A) In actions in which additional proceedings are necessary to determine
disputed material facts, the debarring
official shall promptly prepare written
findings of fact. The debarring official
shall base the decision on the facts as
found, together with any information
and argument submitted by the purchaser or any specifically named affiliate and any other information in the
administrative record.

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§ 223.139

36 CFR Ch. II (7–1–06 Edition)

(B) The debarring official may refer
matters involving disputed material
facts to another official for findings of
fact. The debarring official may reject
any such findings, in whole or in part,
only after specifically determining
them to be arbitrary and capricious or
clearly erroneous.
(C) The debarring official’s decision
shall be made after the conclusion of
the proceedings with respect to disputed facts.
(6) Standard of evidence. In any action
in which the proposed debarment is not
based upon a conviction or civil judgment, the cause for debarment must be
established by a preponderance of the
evidence. In any action in which the
proposed debarment is based upon a
conviction or civil judgment, the
standard shall be deemed to have been
met.
(7) Notice of debarring official’s decision. (i) The purchaser and any affiliates involved shall be given prompt notice of the debarring official’s decision
by certified mail, return receipt requested. If the debarring official decides to impose debarment, the notice
shall:
(A) Refer to the notice of proposed
debarment:
(B) Specify the reasons for debarment;
(C) State the period of debarment,
including effective dates (see § 223.139);
(D) Specify any limitations on the
terms of the debarment; and
(E) State that any decision to debar
is appealable to the Agriculture Board
of Contract Appeals pursuant to paragraph (b)(8) of this section.
(ii) The debarring official shall also
promptly notify Regional Foresters
and Forest Supervisors of the decision.
(8) Review of debarring official’s decision. The purchaser and any affiliates
involved may appeal a Forest Service
debarring official’s decision to debar
within 30 days from receipt of the decision. To appeal, a purchaser and any
affiliates involved must furnish a written notice to the U.S. Department of
Agriculture Board of Contract Appeals,
Washington, DC 20250, and a copy of the
appeal to the debarring official from
whose decision the appeal is taken. The
rules and procedures of the U.S. Department of Agriculture Board of Con-

tract Appeals set forth in 7 CFR part
24, govern debarment appeals.
§ 223.139 Period of debarment.
(a) Debarment shall be for a period
commensurate with the seriousness of
the cause(s):
(1) The debarring official shall consider any suspension period or period
since issuance of the notice of proposed
debarment in determining the debarment period.
(2) Generally, a debarment for those
causes listed at § 223.137 (a)–(f) of this
subpart should not exceed three (3)
years, except as otherwise provided by
law.
(3) A debarment for the causes listed
at § 223.137(g) shall not exceed five (5)
years.
(b) The debarring official may extend
the debarment for those causes listed
at § 223.137 (a)–(f) of this subpart for an
additional period if that official determines that an extension is necessary to
protect the Government’s interest.
However:
(1) A debarment may not be extended
solely on the basis of the facts and circumstances upon which the initial debarment action was based;
(2) If debarment for an additional period is necessary, the debarring official
shall initiate and follow the procedures
in § 223.138 to extend the debarment.
(c) The debarring official may consider terminating the debarment or reducing the period or extent of debarment, upon the purchaser’s request,
supported by documentation, for reasons such as:
(1) Newly discovered material evidence;
(2) Reversal of the conviction or judgment upon which the debarment was
based;
(3) Bona fide change in ownership or
management;
(4) Elimination of other causes for
which the debarment was imposed; or
(5) Other reasons the debarring official deems appropriate.
(d) The debarring official shall make
final disposition of a reconsideration
request under paragraph (c) of this section in writing within 30 working days
of receipt of the reconsideration request and supporting documentation,
unless the debarring official extends

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Forest Service, USDA

§ 223.142

this period for good cause. The notice
of the decision shall set forth the reasons for granting or denying the request.

such knowledge, approval or acquiescence.

[52 FR 43329, Nov. 12, 1987, as amended at 60
FR 46921, Sept. 8, 1995]

(a) The suspending official may, in
the public interest, suspend a purchaser on the basis of adequate evidence for any of the causes in § 223.142,
using the procedures in § 223.143. However, the existence of a cause for suspension does not necessarily require
that the purchaser be suspended. In
making any suspension decision, the
suspending official shall consider the
seriousness of the purchaser’s acts or
omissions and any mitigating factors.
(b) Suspension is a serious action to
be imposed, pending the completion of
investigation or legal proceedings,
when it has been determined that immediate action is necessary to protect
the Government’s interest. In assessing
the adequacy of the evidence, consideration shall be given to how much information is available, how credible it is
given the circumstances, whether or
not important allegations are corroborated and what inferences can reasonably be drawn as a result. This assessment shall include an examination of
basic documents such as contracts,
bids, awards, inspection reports, and
correspondence, as appropriate.

§ 223.140

Scope of debarment.

(a) Scope in general. (1) Debarment of
a purchaser constitutes debarment of
all divisions or other organizational
elements of the purchaser, unless the
debarment decision is limited by its
terms to specific divisions, organizational elements, or classes of sales.
(2) The debarring official may extend
a debarment decision to include any affiliates of the purchaser, if they are—
(i) Specifically named and
(ii) Given written notice of the proposed debarment and provided an opportunity to respond (see § 223.138(b)).
(b) Imputing conduct. For purposes of
determining the scope of debarment,
conduct may be imputed as follows:
(1) The fraudulent, criminal, or other
seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated
with a purchaser may be imputed to a
purchaser when the conduct occurred
in connection with the individual’s performance of duties for or on behalf of
the purchaser, or with the purchaser’s
knowledge, approval, or acquiescence.
The purchaser’s acceptance of the benefits derived from the conduct shall be
evidence of such knowledge, approval,
or acquiescence.
(2) The fraudulent, criminal, or other
seriously improper conduct of a purchaser may be imputed to any officer,
director, shareholder, partner, employee, or other individual associated
with the purchaser who participated in,
knew of, or has reason to know of the
purchaser’s conduct.
(3) The fraudulent, criminal, or other
seriously improper conduct of one purchaser participating in a joint venture
or similar arrangement may be imputed to other participating purchasers
if the conduct occurred for or on behalf
of the joint venture or similar arrangement or with the knowledge, approval,
or acquiescence of those purchasers.
Acceptance of the benefits derived
from the conduct shall be evidence of

§ 223.141

§ 223.142

Suspension.

Causes for suspension.

(a) The suspending official may suspend a purchaser suspected, upon adequate evidence, of the following:
(1) Commission of:
(i) Theft, forgery, bribery, embezzlement, falsification or destruction of
records, making false statements, or
receiving stolen property;
(ii) Fraud, a criminal offense, or violation of Federal or State antitrust
laws, any of which occurred in connection with obtaining, attempting to obtain; or performing a public contract or
subcontract; or
(iii) Any other offense indicating a
lack of business integrity or business
honesty that seriously and directly affects the present responsibility of a
purchase of Government timber.
(2) Indictment for any of the causes
listed in paragraph (a) of this section
constitutes adequate evidence for suspension.

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§ 223.143

36 CFR Ch. II (7–1–06 Edition)

(3) A purchaser’s suspension from the
purchaser of timber by another Federal
agency which sells timber.
(b) The suspending official may, upon
adequate evidence, also suspend a purchaser for any other cause so serious or
compelling that it affects the present
responsibility or a purchaser of Government timber.
§ 223.143

Procedures for suspension.

(a) Investigation and referral. Information which may be sufficient cause for
suspension under § 223.142 shall be reported to the Forest Service Suspending Official. Generally, such information should be referred through the
Forest Supervisor and the Regional
Forester. The referral shall be accompanied by a complete statement of the
facts supported by appropriate exhibits
and a recommendation for action.
Where the statement of facts indicates
a possible criminal offense, except possible antitrust violations, the suspending official shall notify the Office
of Inspector General, USDA. Where the
statement of facts indicates a possible
antitrust violation, the suspending official shall notify the Antitrust Division, Department of Justice.
(b) Decisionmaking process—(1) Notice
of suspension. When a purchaser and
any specifically named affiliates are
suspended, the suspending official shall
so advise the purchaser and any specifically named affiliate immediately by
certified mail, return receipt requested. Such notice shall specify:
(i) That they have been suspended as
of the date of the notice;
(ii) That the suspension is based on
an indictment or other adequate evidence that the purchaser has committed irregularities,
(A) Of a serious nature in business
dealings with the Government, or
(B) Seriously reflecting on the propriety of further Government dealings
with the recipient;
(iii) Any such irregularities shall be
described in terms sufficient to place
the recipient on notice without disclosing the Government’s evidence;
(iv) That the suspension is for a temporary period of time pending the completion of an investigation and such
legal proceedings as may ensue;

(v) The cause(s) relied upon under
§ 223.142 for imposing suspension;
(vi) The effect of the suspension (see
§ 223.135);
(vii) The specific procedures governing suspension decisionmaking in
§ 223.143 (b)(1) through (b)(6).
(2) Submission in opposition. Within 30
calendar days after receipt of the notice of suspension, the purchaser or
any specifically named affiliate may
submit, in person, in writing, or
through a representative, information
and argument in opposition to the suspension, including any additional specific information that raises a genuine
dispute over material facts.
(3) Informal hearing. Pursuant to
paragraph (b)(2) of this section, respondent may request an informal
hearing with the suspending official.
The informal hearing shall be held
within 20 calendar days from the date
the request is received. The suspending
official may postpone the date of the
hearing if the respondent requests a
postponement in writing. At the hearing, the respondent, appearing personally or through an attorney or other
authorized representative, may informally present and explain evidence
that causes for suspension do not exist,
evidence of any mitigating factors, and
arguments concerning the imposition,
scope, duration or effects of suspension. A transcript of the informal hearing shall not be required.
(4) Additional proceedings as to disputed material facts. (i) If the suspending official finds that there exists
a genuine dispute over facts material
to the suspension, respondent(s) shall
be afforded an opportunity to appear
with counsel, submit documentary evidence, present witnesses, and confront
any person the Forest Service presents,
unless—
(A) The action is based on an indictment; or
(B) A determination is made, on the
basis of Department of Justice advice,
that the substantial interests of the
Government in pending or contemplated legal proceedings based on
the same facts as the suspension would
be prejudiced.
(ii) If appropriate, the respondent
may request a fact-finding conference

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§ 223.145

on disputed material facts. Such a conference shall be held within 20 calendar
days from the date the request is received unless mutually agreed otherwise. The fact-finding conference shall
conform with the following requirements:
(A) At least 10 days before the factfinding conference, the suspending official shall send the respondent a copy of
all documents in the administrative
record as of the date of transmittal and
not objected to by the Department of
Justice.
(B) At the conference, the respondent
shall have the opportunity to appear
with counsel, submit documentary evidence, present witnesses, and confront
any person the Forest Service presents.
(iii) A transcribed record of any additional proceedings shall be prepared
and made available at cost to the respondent upon request, unless the respondent and the Forest Service, by
mutual agreement, waive the requirement for a transcript.
(5) Suspending official’s decision. The
suspending official may modify or terminate the suspension or leave it in
force for the same reasons as for terminating or reducing the period or extent
of debarment (see § 223.139(c)). The decision shall be made in accordance with
the following provisions:
(i) No additional proceedings necessary.
In actions based on an indictment, in
which the respondent’s submission does
not raise a genuine dispute over material facts; or in which additional proceedings to determine disputed material facts have been denied on the basis
of Department of Justice advice, the
suspending official’s decision shall be
based on all the information in the administrative record, including any submissions and argument made by the respondent. The decision shall be made
within 30 working days after receipt of
any information and argument submitted by the respondent, unless the
suspending official extends this period
for good cause.
(ii) Additional proceedings necessary.
(A) In actions in which additional proceedings are necessary as to disputed
material facts, written findings of fact
shall be promptly prepared. The suspending official shall base the decision
on the facts as found, together with

any information and argument submitted by the respondent and any
other information in the administrative record.
(B) The suspending official may refer
matters involving disputed material
facts to another official for findings of
fact. The suspending official may reject any such findings, in whole or in
part, only after specifically determining them to be arbitrary and capricious or clearly erroneous.
(C) The suspending official’s decision
shall be made only after the conclusion
of any proceedings with respect to disputed facts.
(6) Notice of suspending official’s decision. The purchaser and any affiliates
involved shall be given prompt written
notice of the suspending officer’s decision to continue or not continue the
suspension by certified mail, return receipt requested.
§ 223.144

Period of suspension.

(a) Suspension shall be for a temporary period pending the completion
of investigation and any ensuing legal
proceedings unless sooner terminated
by the suspending official or as provided in paragraph (b) of this section.
(b) If legal proceedings are not initiated within 12 months after the date of
the suspension notice, the suspension
shall be terminated unless an Assistant
Attorney General requests its extension, in which case it may be extended
for an additional 6 months. In no event
may a suspension extend beyond 18
months, unless legal proceedings have
been initiated within that period.
(c) The suspending official shall notify the Department of Justice of the
proposed termination of any suspension, at least 30 days before the 12month period expires, to give the Department an opportunity to request an
extension.
§ 223.145

Scope of suspension.

The scope of suspension shall be the
same as that for debarment (see
§ 223.140), except that the procedures in
§ 223.143 shall be used in imposing suspension.

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§ 223.159

36 CFR Ch. II (7–1–06 Edition)

Subpart D—Timber Export and
Substitution Restrictions
§ 223.159

Scope and applicability.

The rules of this subpart apply to all
timber sale contracts awarded before
August 20, 1990, the date of enactment
of the Forest Resources Conservation
and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.). The rules at § 223.162
shall remain in effect for all contracts
awarded on or after August 20, 1990,
until September 8, 1995. Contracts
awarded on or after August 20, 1990 are
subject to the rules of subpart F of this
part, unless otherwise noted. Contracts
awarded on or after September 8, 1995
are governed in full by subpart F.
[60 FR 46922, Sept. 8, 1995]

§ 223.160

Definitions.

The following definitions apply to
the provisions of this section:
(a) Export means either direct or indirect export to a foreign country and occurs on the date that a person enters
into a contract or other binding transaction for the export of unprocessed
timber or, if that date cannot be established, when unprocessed timber is
found in an export yard or pond, bundled or otherwise prepared for shipment, or aboard an ocean-going vessel.
An export yard or pond is an area where
sorting and/or bundling of logs for shipment outside the United States is accomplished.
Unprocessed
timber,
whether from National Forest System
or private lands, is exported directly
when exported by the National Forest
timber purchaser. Timber is exported
indirectly when export occurs as a result of a sale to another person or as a
consequence of any subsequent transaction.
(b) Historic level means the average
annual volume of unprocessed timber
purchased or exported in calendar
years 1971, 1972, and 1973.
(c) Private lands mean lands held or
owned by a private person. Nonprivate
lands include, but are not limited to,
lands held or owned by the United
States, a State or political subdivision
thereof, or any other public agency, or
lands held in trust by the United
States for Indians.

(d) Substitution means the purchase of
unprocessed timber from National Forest System lands to be used as replacement for unprocessed timber from private lands which is exported by the
purchaser. Substitution occurs when
(1) a person increases purchases of National Forest timber in any Calendar
year more than 10 percent above their
historic level and in the same calendar
year exports unprocessed timber from
private land in the tributary area; or
(2) a person increases exports of unprocessed timber from private land in
any tributary area more than 10 percent above their historic level in any
calendar year while they have National
Forest timber under contract.
(e) Tributary area means the geographic area from which unprocessed
timber is delivered to a specific processing facility or complex. A tributary
area is expanded when timber outside
an established tributary area is hauled
to the processing facility or complex.
(f) Unprocessed timber, except western
red cedar in the contiguous 48 States,
means trees or portions of trees having
a net scale content not less than 331⁄3
percent of the gross volume, or the
minimum piece specification set forth
in the timber sale contract, in material
meeting the peeler and sawmill log
grade requirements published in the
January 1, 1980—Official Log Scaling
and Grading Rules used by Log Scaling
and Grading Bureaus on the West
Coast; cants to be subsequently remanufactured exceeding 83⁄4 inches in
thickness; cants of any thickness reassembled into logs; and split or round
bolts, except for aspen, or other
roundwood not processed to standards
and specifications suitable for endproduct use. Unprocessed timber shall
not mean pulp (utility) grade logs and
Douglas-fir special cull logs or timber
processed into the following:
(1) Lumber and construction timbers,
regardless of size, sawn on four sides;
(2) Chips, pulp, and pulp products;
(3) Green veneer and plywood;
(4) Poles, posts, or piling cut or treated for use as such;
(5) Cants cut for remanufacture, 83⁄4
inches in thickness or less;
(6) Aspen bolts, not exceeding 4 feet
in length.

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Forest Service, USDA

§ 223.164

(g) Unprocessed western red cedar timber in the contiguous 48 States means
trees or portions of trees of that species which have not been processed
into—
(1) Lumber of American Lumber
Standards Grades of Number 3 dimension or better, or Pacific Lumber Inspection Bureau Export R-List Grades
of Number 3 Common or better;
(2) Chips, pulp, and pulp products;
(3) Veneer and plywood;
(4) Poles, posts, or piling cut or treated with preservatives for use as such
and not intended to be further processed; or
(5) Shakes and shingles; provided
that lumber from private lands manufactured to the standards established
in the lumber grading rules of the
American Lumber Standards Association or the Pacific Lumber Inspection
Bureau and manufactured lumber authorized to be exported under license
by the Department of Commerce shall
be considered processed.
(h) Person means an individual, partnership, corporation, association, or
other legal entity and includes any
subsidiary, subcontractor, parent company, or other affiliate. Business entities are considered affiliates for the entire calendar year when one controls or
has the power to control the other or
when both are controlled directly or indirectly by a third person during any
part of the calendar year.
(i) Purchase occurs when a person is
awarded a contract to cut National
Forest timber or through the approval
of a third party agreement by the Forest Service.
(j) Purchaser means a person that has
purchased a National Forest timber
sale.
(Sec. 14, Pub. L. 95–588, 90 Stat. 2958, as
amended (16 U.S.C. 472a); sec. 301, Pub. L. 96–
126, 93 Stat. 979; sec. 1, 30 Stat. 35, as amended (16 U.S.C. 55.1); sec. 301, 90 Stat. 1063, Pub.
L. 94–373; sec. 1, 30 Stat. 35, as amended (16
U.S.C. 551))

§ 223.161

[Reserved]

§ 223.162 Limitations on timber harvested from all other states.
Unprocessed timber from National
Forest System lands west of the 100th
Meridian in the contiguous 48 States
may not:
(a) Be exported from the United
States;
(b) Be used in substitution for unprocessed timber from private lands
which is exported by the purchaser; or
(c) Be sold, traded, exchanged, or otherwise given to any person who does
not agree to manufacture it to meet
the processing requirements of this
section and/or require such a processing agreement in any subsequent resale or other transaction. This limitation on export or substitution does not
apply to species of timber previously
found to be surplus to domestic needs
or to any additional species, grades, or
quantities of timber which may be
found by the Secretary to be surplus to
domestic needs.
(Sec. 14, Pub. L. 95–588, 90 Stat. 2958, as
amended (16 U.S.C. 472a); sec. 301, Pub. L. 96–
126, 93 Stat. 979; sec. 1, 30 Stat. 35, as amended (16 U.S.C. 55.1); sec. 301, 90 Stat. 1063, Pub.
L. 94–373; sec. 1, 30 Stat. 35, as amended (16
U.S.C. 551))
[45 FR 80528, Dec. 5, 1980, as amended at 46
FR 2611, Jan. 12, 1981; 47 FR 746, Jan. 7, 1982.
Redesignated at 49 FR 2761, Jan. 23, 1984]

§ 223.163

[Reserved]

§ 223.164

Penalty for falsification.

For false certification of documents
relating to export or substitution and/
or other violations of export and substitution requirements by the purchaser of timber from National Forest
System lands, the Forest Service may
cancel the subject contract, debar the

[45 FR 80528, Dec. 5, 1980, as amended at 46
FR 2611, Jan. 12, 1981; 46 FR 22581, Apr. 20,
1981; 47 FR 746, Jan. 7, 1982. Redesignated at
49 FR 2761, Jan. 23, 1984]

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§ 223.185

36 CFR Ch. II (7–1–06 Edition)

involved person or persons from bidding on National Forest timber, or initiate other action as may be provided
by law or regulation.
(Sec. 14, Pub. L. 94–588, 90 Stat. 2958, as
amended (16 U.S.C. 472a); Sec. 301, Pub. L. 96–
126, 93 Stat. 979; Sec. 1, 30 Stat. 35, as amended (16 U.S.C. 55.1); Sec. 301, 90 Stat. 1063, Pub.
L. 94–373; Sec. 1, 30 Stat. 35, as amended (16
U.S.C. 551); (44 U.S.C. 3506))
[45 FR 80528, Dec. 5, 1980. Redesignated at 49
FR 2761, Jan. 23, 1984, and amended at 51 FR
40316, Nov. 6, 1986]

Subpart E [Reserved]
Subpart F—The Forest Resources
Conservation and Shortage
Relief Act of 1990 Program
SOURCE: 60 FR 46922, Sept. 8, 1995, unless
otherwise noted.

§ 223.185

Scope and applicability.

This subpart implements provisions
of the Forest Resources Conservation
and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.) that became effective
upon enactment or as otherwise specified in the Act. As of September 8, 1995,
this subpart applies to unprocessed
timber originating from private lands
west of the 100th meridian in the contiguous 48 States that requires domestic processing. Except as provided later
in this paragraph, this subpart applies
to all unprocessed timber originating
from National Forest System lands
west of the 100th meridian in the contiguous 48 States acquired from timber
sale contracts awarded on or after August 20, 1990. The rules regarding substitution at § 223.162 of subpart D apply
to unprocessed timber acquired from
timber sale contracts awarded between
August 20, 1990, and September 8, 1995,
as provided in § 490(a)(2)(A) of the Act.
The rules regarding reporting the acquisition and disposition of unprocessed Federal timber at § 223.193 of this
subpart apply to all transfers of unprocessed Federal timber originating
from National Forest System lands
west of the 100th meridian in the contiguous 48 States regardless of timber
sale contract award date.

§ 223.186 Definitions.
The following definitions apply to
the provisions of this subpart:
Acquire means to come into possession of, whether directly or indirectly,
through a sale, trade, exchange, or
other transaction. The term ‘‘acquisition’’ means the act of acquiring. The
terms ‘‘acquire’’ and ‘‘purchase’’ are
synonymous and are used interchangeably.
Act means the Forest Resources Conservation and Shortage Relief Act of
1990 (Pub. L. No. 101–382, 104 Stat. 714–
726; 16 U.S.C. 620–620j).
Area of operations refers to the geographic area within which logs from
any origin have neither been exported
nor transported to an area where export occurs. The area of operations will
be determined for individual Forest
Service Administrative Units or groups
of Administrative Units by the Regional Foresters of Regions 1, 2, 3, and
4 on an as-needed basis, and used as
part of the criteria for evaluating requests to waive the identifying and
marking requirements for unprocessed
Federal logs.
Cants or Flitches are synonymous,
and mean trees or portions of trees,
sawn on one or more sides, intended for
remanufacture into other products
elsewhere.
Civil penalties:
Willful disregard means a person knew
or showed reckless disregard for the
matter of whether the person’s conduct
is prohibited by the Forest Resources
Conservation and Shortage Relief Act
of 1990, 16 U.S.C. 620, et seq. with regard
to the prohibition against exporting
unprocessed Federal timber (including
causing unprocessed timber to be exported).
Willfully means a person knew or
showed reckless disregard for the matter of whether the person’s conduct is
prohibited by the Forest Resources
Conservation and Shortage Relief Act
of 1990, 16 U.S.C. et seq., or regulations
issued under the Act, even though such
violation may not have caused the export of unprocessed Federal timber in
violation of the Act.
Disregard means to ignore, overlook,
or fail to observe any provision of the
Act or a regulation issued under this
Act, even though such violation may

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§ 223.186

not have caused the export of unprocessed Federal timber in violation of the
Act.
Should have known means committing an act that a reasonable person in
the timber industry would have known
violates a provision of the Act or regulations issued under the Act, even
though the violation may not have
caused the export of unprocessed Federal timber in violation of the Act.
Each violation refers to any violation
under the Act or its implementing regulations with regard to a single act,
which includes but is not limited to a
single marking (or lack thereof) on a
single log, the export of a single log, or
a single entry on a document.
Export means transporting, or causing to be transported, either directly or
through another party, unprocessed
timber to a foreign country. Export occurs:
(1) On the date that a person enters
into an agreement to sell, trade, exchange or otherwise convey such timber to a person for delivery to a foreign
country;
(2) When unprocessed timber is
placed in an export facility in preparation (sorting, bundling, container loading etc.) for shipment outside the
United States; or,
(3) When unprocessed timber is
placed on board an ocean-going vessel,
rail car, or other conveyance destined
for a foreign country.
Federal lands means lands that are
owned by the United States west of the
100th meridian in the contiguous 48
States, but do not include any land the
title to which is;
(1) Held in trust by the United States
for the benefit of any Indian tribe or
individual;
(2) Held by any Indian tribe or individual subject to a restriction by the
United States against alienation; or
(3) Held by any Native Corporation as
defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C.
1602).
Finished products means products
from trees, portions of trees or other
roundwood
products
processed
to
standards and specifications intended
for end product use.

Fiscal year means the Federal fiscal
year beginning October 1, and ending
the following September 30.
Gross value means the total value a
person received from the transfer of
unprocessed Federal timber involved in
a violation, before production, delivery, agent fees, overhead, or other
costs are removed.
Hammer brand refers to an identifying
mark or brand composed of numbers,
letters, characters, or a combination of
numbers, letters, or characters permanently attached to a hammer, or other
similar striking tool. The hammer
brand must make a legible imprint of
the brand in the end of a log when
struck.
Highway yellow paint refers to an oil
base or equivalent yellow paint of lasting quality comparable to the yellow
paint used to mark highways.
Log refers to an unprocessed portion
of a tree that is transported to a manufacturing facility or other location for
processing, transferring to another person, or exporting. ‘‘Logs’’ is synonymous with ‘‘timber’’.
Manufacturing facility means a permanently located processing plant used
to convert unprocessed timber into
products.
Non-manufacturer means a person
who does not own or operate a manufacturing facility.
Person means any individual, partnership, corporation, association, or
other legal entity and includes any
subsidiary, subcontractor, parent company, and business affiliates. Persons
are affiliates of each other when either
directly or indirectly, one person controls or has the power to control the
other or a third party or parties control or have the power to control both.
In determining whether or not affiliation exists, consideration shall be
given to all appropriate factors, including but not limited to common ownership, common management, common
facilities, and contractual relationships.
Private lands means lands, located
west of the 100th meridian in the contiguous 48 States held or owned by a
person. Such term does not include
Federal lands or public lands, or any
land the title to which is;

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36 CFR Ch. II (7–1–06 Edition)

(1) Held in trust by the United States
for the benefit of any Indian tribe or
individual;
(2) Held by any Indian tribe or individual subject to a restriction by the
United States against alienation; or
(3) Held by any Native Corporation as
defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C.
1602).
Processed means timber processed
into products listed in § 223.187 of these
regulations.
Purchase has the same meaning as acquire. The terms are used interchangeably.
Same geographic and economic area
means the land within the boundaries
of an approved sourcing area.
Sourcing area means the geographic
area approved by the Secretary which
includes a person’s timber manufacturing facility and the private and Federal lands from which the person acquires or intends to acquire unprocessed timber to supply such manufacturing facility; a sourcing area must be
geographically and economically separate from any area from which that
person harvests for export any unprocessed timber originating from private
lands.
Substitution occurs when:
(1) A person acquires, directly or indirectly, unprocessed timber from Federal lands west of the 100th meridian in
the contiguous 48 States and engages
in exporting or selling for export, unprocessed timber originating from private lands within the same geographic
and economic area; or
(2) A person acquires, directly or indirectly, unprocessed timber from Federal lands west of the 100th meridian in
the contiguous 48 States and, during
the preceding 24-month period, exported unprocessed timber originating
from private lands; or
(3) A person exports or sells for export, unprocessed timber originating
from private lands within the same geographic and economic area in the
same calendar year that the person has
unprocessed timber originating from
Federal lands in the person’s possession or under contract; or
(4) A person purchases, directly or indirectly, unprocessed timber originating from Federal lands if such per-

son sells or otherwise transfers unprocessed timber that originates from private lands west of the 100th meridian
in the contiguous 48 States and that requires domestic processing, to a third
party if that third party or successive
parties export that unprocessed private
timber. A third party or successive parties who acquire such unprocessed timber that originates from private lands
west of the 100th meridian in the contiguous 48 States and that requires domestic processing may not export such
timber.
Transaction means an arrangement
involving the transfer of unprocessed
timber.
Transaction statement is a signed copy
of one of the transaction reporting
forms in 36 CFR 223.193 and 223.194.
Transfer means to pass title, sell,
trade, exchange, or otherwise convey
unprocessed timber to another person.
Unprocessed timber means trees or
portions of trees or other roundwood
not processed to standards and specifications suitable for end product use
and intended for remanufacture. Unprocessed timber does not include products intended for remanufacture that
meet the criteria listed in § 223.187(a)
(2) or (3). For the purposes of reporting
and identifying under §§ 223.193, 223.194
and 223.195, unprocessed timber also
means timber products listed in
§ 223.187 of these regulations, and other
timber products including house logs
that are part of a structure kit, that
are indistinguishable from other unprocessed timber.
§ 223.187 Determinations of unprocessed timber.
(a) All species except western red cedar.
Unprocessed timber, as defined in
§ 223.186 of this Subpart, does not include timber processed into any one of
the following:
(1) Lumber or construction timbers,
except western red cedar, meeting current American Lumber Standards
Grades or Pacific Lumber Inspection
Bureau Export R or N list grades, sawn
on 4 sides, not intended for remanufacture. To determine whether such lumber or construction timbers meet this
grade and intended use standard, the
shipper of record must have in its possession for each shipment or order, and

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§ 223.187

available for inspection upon the request of the Forest Service:
(i) A legible copy of a lumber inspection certificate certified by a lumber
inspection/grading organization generally recognized by the industry as
setting a selling standard; and,
(ii) A statement by the manufacturer
certifying under the penalties provided
in section 492 of the Act (16 U.S.C. 620d)
and the False Statements Act (18
U.S.C. 1001) that the products in the
shipment or order are intended to be
used as shipped, are manufactured into
products, or processed into pulp, and
are not to be manufactured into other
products. The certification statements
shall be made in accordance with paragraph (b) of this section. The certification statements in paragraph (b) of
this section are not required if the
lumber or construction timbers described in paragraph (a)(1) of this section or the pulpwood bolts described in
paragraph (a)(8) of this section otherwise may be exported without regard
to an intent to remanufacture or process into pulp. For instance, because the
timber originates from private land
from which timber may be exported.
(2) Lumber, construction timbers, or
cants for remanufacture, except western red cedar, meeting current American Lumber Standards Grades or Pacific Lumber Inspection Bureau Export
R or N list clear grades, sawn on 4
sides, not to exceed 12 inches (30.5 cm)
thick. To determine whether such lumber, timbers, or cants meet this grading standard, the shipper of record
must have in its possession for each
shipment or order and available for inspection, upon the request of the Forest Service, a legible copy of a lumber
inspection certificate certified by a
lumber inspection/grading organization
generally recognized by the industry as
setting a selling standard.
(3) Lumber, construction timbers, or
cants for remanufacture, except western red cedar, that do not meet the
grades referred to in paragraph (a)(2) of
this section and are sawn on 4 sides,
with wane less than 1⁄4 of any face, not
exceeding 83⁄4 inches (22.2 cm) thick.
(4) Chips, pulp, or pulp products.
(5) Veneer or plywood.
(6) Poles, posts, or piling cut or treated with preservatives for use as such.

(7) Shakes or shingles.
(8) Aspen or other pulpwood bolts,
not exceeding 100 inches in length, exported for processing into pulp. Shippers of record of such pulpwood bolts
must have in their possession, and
available for inspection upon request of
the Forest Service, in accordance with
paragraph (b) of this section, a manufacturer’s certificate that such bolts
are intended for processing into pulp.
(9) Pulp logs or cull logs processed at
domestic pulp mills, domestic chip
plants, or other domestic operations
for the purpose of conversion of logs
into chips.
(b) Export product certifications. (1)
Manufacturers of lumber or construction timbers described in paragraph
(a)(1) of this section and pulpwood
bolts described in paragraph (a)(8) of
this section, shall certify to the following statements:
(2) Lumber or construction timbers; ‘‘I
certify that the products in the shipment identified by my shipping order
number llll dated llll, are
manufactured in accordance with the
attached
order
from
(buyer)
of
(address), numbered llll and dated
llll, are intended to be used as
shipped and are not to be remanufactured into other products. I make this
certification with full knowledge and
understanding of the export and substitution restrictions of the Forest Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620 et seq.)
(Act) and its implementing regulations. I fully understand that exporting
unprocessed timber originating from
Federal lands or unprocessed timber
from private lands which is required to
be processed domestically is a violation of this Act, its implementing regulations, and the False Statements Act
(18 U.S.C. 1001), and may subject me to
the penalties and remedies provided for
such violations.’’
(3) Pulpwood bolts. ‘‘I certify that the
pulpwood bolts in the shipment identified by my shipping order number
llll dated llll, are manufactured in accordance with the attached
order from (buyer) of (address), numbered llll and dated llll, are
intended to be processed into pulp and
are not to be remanufactured into

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36 CFR Ch. II (7–1–06 Edition)

other products. I make this certification with full knowledge and understanding of the export and substitution
restrictions of the Forest Resources
Conservation and Shortage Relief Act
of 1990 (16 U.S.C. 620, et seq.) (Act) and
its implementing regulations. I fully
understand that exporting unprocessed
timber originating from Federal lands
or unprocessed timber from private
lands which is required to be processed
domestically is a violation of this Act,
its implementing regulations, and the
False Statements Act (18 U.S.C. 1001),
and may subject me to the penalties
and remedies provided for such violations.’’
(4) Signatory procedures. Certificates
shall be on company letterhead, and
signed by the person manufacturing
the shipment. In the case of a corporation, the certificates must be signed by
a person authorized, in writing, by the
Chief Executive Officer pursuant to 36
CFR 223.187(b)(4), to sign the certificates in 36 CFR 223.187(b) on behalf of
the corporation.
(5) Chief Executive Officer Authorization. The authorization by the Chief
Executive Officer shall be on company
letterhead, shall be notarized, and shall
read as follows:
‘‘I authorize llll to sign the certificates in 36 CFR 223.187(b) on behalf of (name
of corporation). I make this authorization
with full knowledge and understanding of
the export and substitution restrictions of
the Forest Resources Conservation and
Shortage Relief Act of 1990 (16 U.S.C. 620 et
seq.) (Act) and its implementing regulations.
I fully understand that exporting unprocessed timber originating from Federal lands
or unprocessed timber originating from private lands which is required to be processed
domestically is a violation of this Act, its
implementing regulations, and the False
Statements Act (18 U.S.C. 1001), and may
subject me to the penalties and remedies
provided for such violation.’’

(6) Exporters of other timber products originating from Federal lands not
specifically listed in § 223.187 which
may develop export markets in the future may also require similar certification statements. Such statements
will be provided by the Forest Service.
(c) Western red cedar. Unprocessed
western red cedar timber does not include manufactured lumber authorized
for export under license by the Depart-

ment of Commerce, and lumber from
private lands processed to standards established in the lumber grading rules
of the American Lumber Standards Association or the Pacific Lumber Inspection Bureau, or timber processed into
any of the following products:
(1) Lumber of American Lumber
Standards Grades of Number 3 dimension or better, or Pacific Lumber Inspection Bureau Export R-List Grades
of Number 3 common or better, with a
maximum cross section of 2,000 square
centimeters (310 square inches) for any
individual piece of processed western
red cedar, regardless of grade. To determine whether such lumber meets these
established standards, grades and size
restrictions, the shipper of record must
have in its possession for each shipment, and available for inspection upon
the request of the Forest Service, a legible copy of a lumber inspection certificate certified by a lumber inspection/
grading organization generally recognized by the industry as setting a selling standard. Export restrictions governing western red cedar timber harvested from Federal, State or other
public lands are found in 7(i) of the Export Administration Act of 1979 as
amended (50 U.S.C. appendix 2406(i)),
and implementing regulations at 15
CFR 777.7.
(2) Chips, pulp, and pulp products;
(3) Veneer and plywood;
(4) Poles, posts, pilings cut or treated
with preservatives for use as such and
not intended to be further processed;
and
(5) Shakes and shingles.
(d) Finished Products. Shippers of
record of products manufactured from
unprocessed western red cedar originating from Federal lands, acquired by
the manufacturer under the exemption
from the prohibition against indirect
substitution at § 223.189(e)(1), must
have in their possession for each shipment a certificate from the manufacturer that such products are finished
products as defined in § 223.186 of this
subpart. The certification statement
shall read as follows:
(1) ‘‘I certify that the products in the
shipment identified by my shipping
order number lll, dated lll, are
manufactured in accordance with the
attached order from ll (buyer) ll of

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§ 223.189

lll (address) lll, numbered ll
and dated lll, are intended for end
product use. I understand that only
western red cedar products that are finished products are exempt from the prohibition against indirect substitution
in the Forest Resources Conservation
and Shortage Relief Act of 1990 (16
U.S.C. 620b(b)(1)) and its implementing
regulations. I make this certification
with full knowledge and understanding
of the export and substitution restrictions of the Forest Resources Conservation and Shortage Relief Act of
1990 (16 U.S.C. 620, et seq.) (Act) and its
implementing regulations. I fully acknowledge and understand that to acquire western red cedar under the indirect substitution exemption in 16
U.S.C. 620b(b)(1) for purposes other
than domestic processing into finished
products will be a violation of this Act,
its implementing regulations, and the
False Statements Act (18 U.S.C. 1001)
and may subject me to the penalties
and remedies provided for such violation.’’
(2) Signatory procedures. Certificates
shall be on company letterhead, and
signed by the person manufacturing
the shipment. In the case of a corporation, the certificate must be signed by
a person authorized, in writing, by the
Chief Executive Officer, pursuant to 36
CFR 223.187(d)(3), to sign the certificate
in 36 CFR 223.187(d)(1) on behalf of the
corporation.
(3) Chief Executive Officer Authorization. The authorization by the Chief
Executive Officer shall be on company
letterhead, shall be notarized, and shall
read as follows:
‘‘I authorize llll to sign the certificate
in 36 CFR 223.187(d)(1) on behalf of (name of
corporation). I make this authorization with
full knowledge and understanding of the export and substitution restrictions of the Forest Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.) (Act)
and its implementing regulations. I fully understand that exporting unprocessed timber
originating from Federal lands or unprocessed timber originating from private lands
which is required to be processed domestically is a violation of this Act, its implementing regulations, and the False Statements Act (18 U.S.C. 1001), and may subject
me to the penalties and remedies provided
for such violation.’’

§ 223.188 Prohibitions against exporting unprocessed Federal timber.
No person who acquires unprocessed
timber originating from Federal lands
west of the 100th meridian in the contiguous 48 States may export such timber from the United States, or sell,
trade, exchange, or otherwise convey
such timber to any other person for the
purpose of exporting such timber from
the United States. This prohibition
does not apply to specific quantities of
grades and species of such unprocessed
Federal timber that the Secretary of
Agriculture determines to be surplus to
domestic manufacturing needs.
§ 223.189 Prohibitions against substitution.
(a) Direct substitution prohibition. Except as otherwise provided by this section:
(1) No person may purchase directly
from any department or agency of the
United States unprocessed timber originating from Federal lands west of the
100th meridian in the contiguous 48
States if:
(i) Such person acquires unprocessed
timber originating from Federal lands
west of the 100th meridian in the contiguous 48 States and engages in exporting or selling for export, unprocessed timber originating from private
lands within the same geographic and
economic area; or
(ii) Such person has, during the preceding 24-month period, exported unprocessed timber originating from private lands.
(2) No person may export or sell for
export, unprocessed timber originating
from private lands within the same geographic and economic area in the
same calendar year that the person has
unprocessed timber originating from
Federal lands in the person’s possession or under contract.
(3) No person may purchase unprocessed timber originating from Federal
lands if such person sells or otherwise
transfers unprocessed timber that
originates from private lands west of
the 100th meridian in the contiguous 48
States and that requires domestic processing, to a third party if that third
party or successive parties export that
unprocessed private timber. A third
party or successive parties who acquire

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36 CFR Ch. II (7–1–06 Edition)

such unprocessed timber that originates from private lands west of the
100th meridian in the contiguous 48
States and that requires domestic processing may not export such timber.
(4) The prohibitions in paragraphs (a)
(1)–(3) of this section shall not apply to
specific quantities of grades and species of unprocessed timber which the
Secretary of Agriculture has determined to be surplus to domestic manufacturing needs.
(b) Exemptions. (1) Pursuant to section 490(c) of the Act (16 U.S.C. 620b),
all persons who applied for a sourcing
area by December 20, 1990, in accordance with § 223.190 of this subpart, were
exempt from the prohibitions against
substitution,
in
accordance
with
§ 223.189(a)(1) of this subpart, until such
time that the approving official approved or disapproved the application.
(2) Pursuant to Section 490(a) of the
Act (16 U.S.C. 620b), an exemption to
the prohibition in § 223.189(a)(1)(B) of
this subpart is provided to:
(i) A person with a historic export
quota who submitted a certification in
accordance with § 223.189 (c) and (d) of
this subpart; and
(ii) A non-manufacturer who submitted a certification in accordance
with § 223.192 of this subpart.
(3) Pursuant to § 490(c) of the Act (16
U.S.C. 620b), the prohibitions against
direct substitution in § 223.189(a) (1) and
(2) of this subpart do not apply to a
person who acquires unprocessed timber originating from Federal lands
within an approved sourcing area, does
not export unprocessed timber originating from private lands within the
approved sourcing area while the approval is in effect, and, if applicable,
received a waiver of the prohibition
against exporting unprocessed timber
originating from private lands within
the sourcing area during the preceding
24 months, in accordance with § 223.189
(f) and (g) of this subpart.
(c) Historic export quota exemption.
The prohibition against the purchase of
Federal timber for a person who has exported unprocessed timber originating
from private lands, within the preceding 24-month period, shall not apply
to a person with a historic export
quota approved by the Secretary and
who has been exporting unprocessed

private timber in accordance with the
log export and substitution regulations
of the Secretary of Agriculture at 36
CFR part 223, subpart D, in effect before August 20, 1990, if:
(1) That person certified in writing to
the Regional Forester of the Region administering the historic export quota,
on or before November 20, 1990, that the
person would cease exporting unprocessed timber originating from private
lands on or before February 20, 1991,
and
(2) The exporting ceased in accordance with such certification.
(d) Application for historic export quota
exemption. To obtain an exemption
from the prohibition against export
within the preceding 24-month period
for purchasing Federal timber based on
an approved historic export quota described in paragraph (c) of this section,
a person must have applied in writing
to the applicable Regional Forester on
or before November 20, 1990. The certificate must have been notarized. The
application was required to be on company letterhead and must have included:
(1) An agreement to retain records of
all transactions involving acquisition
and disposition of unprocessed timber
from both private and Federal lands
within the area(s) involved in the certification, for a period of three (3)
years beginning November 20, 1990, and
to make such records available for inspection upon the request of the Regional Forester, or other official to
whom such authority has been delegated.
(2) A signed certification which reads
as follows:
‘‘I have purchased, under an historic export quota approved by the Secretary of Agriculture, unprocessed timber originating
from Federal lands located west of the 100th
meridian in the contiguous 48 States during
the preceding 24 months in direct substitution for exported unprocessed timber originating from private lands. I desire to purchase directly from a Department or agency
of the United States, unprocessed timber
originating from Federal lands located in
such area of the United States. I make this
certification for the exemption from the prohibition against export within the preceding
24-month period for purchasing Federal timber required by the Forest Resources Conservation and Shortage Relief Act of 1990,
(Pub. L. No. 101–382, August 20, 1990, 16 U.S.C.

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Forest Service, USDA

§ 223.189

620, et seq.) (Act). I hereby certify that I will
cease all exporting of such unprocessed private timber from lands west of the 100th meridian in the 48 contiguous States of the
United States by February 20, 1991. I make
this certification with full knowledge and
understanding of the requirements of this
Act and do fully understand that failure to
cease such exporting as certified will be a
violation of this Act (16 U.S.C. 620d) and the
False Statements Act (18 U.S.C. 1001), and
may subject me to the penalties and remedies provided from such violation.’’

(3) The certification must have been
signed by the person making such certification or, in the case of a corporation, by its Chief Executive Officer.
(e) Indirect substitution prohibition. No
person may purchase from any other
person unprocessed timber originating
from Federal lands west of the 100th
meridian in the contiguous 48 States if
such person would be prohibited by
paragraph (a) of this section from purchasing such timber directly from a
Department or agency of the United
States, pursuant to § 490(b) of the Forest Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et
seq.). The prohibition in this paragraph
does not apply to the following:
(1) To the acquisition of western red
cedar, which is domestically processed
into finished products.
(2) To a person who acquires unprocessed timber originating from Federal
lands within an approved sourcing
area, does not export unprocessed timber originating from private lands
within the approved sourcing area
while the approval is in effect, and, if
applicable, receives a waiver of the prohibition against exporting unprocessed
timber originating from private lands
within the sourcing area during the
preceding 24 months in accordance
with § 223.189 (f) and (g) of this subpart.
(3) To the limited amount of unprocessed National Forest System timber
within Washington State that is exempt from the prohibition against indirect substitution, pursuant to § 223.203.
(f) Waiver within a sourcing area. The
prohibitions in § 223.189(a) (1) and (2)
against direct and indirect acquisition
of unprocessed timber originating from
Federal lands do not apply if:
(1) A person acquires such timber
from within an approved sourcing area

located west of the 100th meridian in
the 48 contiguous States;
(2) Has not exported unprocessed timber originating from private lands located within the approved sourcing
area during the preceding 24 months;
(3) Does not export such private timber from within the approved sourcing
area during the period the sourcing
area is in effect; and
(4) Does not export such private timber during any calendar year in the
same geographic and economic area
that unprocessed timber originating
from Federal lands west of the 100th
meridian in the contiguous 48 States is
under contract or in possession, if the
sourcing area is no longer in effect,
pursuant to the definition of substitution in 36 CFR 223.186.
(5) The appropriate Regional Forester
could waive, in writing, the prohibition
against export within the preceding 24month period for any person who certified in writing, on or before November 20, 1990, that on or before February
20, 1991, that person would cease exporting unprocessed timber originating
from private lands within the approved
sourcing area for a period of not less
than three (3) years. Signatories of this
certificate who received an approved
sourcing area, like all holders of
sourcing areas, are subject to the prohibition against exporting unprocessed
timber originating from private lands
within the sourcing area boundaries,
pursuant to this paragraph.
(g) Application for waiver within a
sourcing area. To obtain a waiver of the
prohibition against export within the
preceding 24-month period for purchasing Federal timber described in
paragraph (f) of this section, a person
must have submitted a request for
waiver, in writing, to the Regional Forester of the region in which the manufacturing facility being sourced is located, which must have been received
by the Regional Forester on or before
November 20, 1990, and which must
have been signed by the person making
such request or, in the case of a corporation, by its Chief Executive Officer. The request for waiver must be notarized and, in the case of a corporation, with its corporate seal affixed.

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§ 223.190

36 CFR Ch. II (7–1–06 Edition)

The request shall be on company letterhead with its corporate seal affixed
and must include:
(1) An agreement to retain records of
all transactions involving acquisition
and disposition of unprocessed timber
from both private and Federal lands
within the area(s) involved in the waiver request, for a period of three (3)
years beginning November 20, 1990, and
to make such records available for inspection upon the request of the Regional Forester, or other official to
whom such authority has been delegated.
(2) A signed certification statement
which reads as follows:
‘‘I have engaged in exporting of unprocessed timber originating from private land
located within the sourcing area for which I
am applying. I desire to purchase directly
from a department or agency of the United
States unprocessed timber originating from
Federal lands located within the desired
sourcing area. I hereby request waiver of the
prohibition against export within the preceding 24-month period for purchasing Federal timber required by the forest Resources
Conservation and Shortage Relief Act of 1990
(Pub. L. No. 101–382, August 20, 1990, 16 U.S.C.
620, et seq.) (Act). I hereby certify that I will
cease all exporting of such unprocessed private timber from within the desired sourcing
area by February 20, 1991, and will not resume such exporting for a period of not less
than three (3) years. I make this certification with full knowledge and understanding of the requirements of this Act and
do fully understand that failure to cease
such exporting as certified will be a violation of Section 492 of this Act (16 U.S.C. 620d)
and the False Statements Act (18 U.S.C.
1001), and may subject me to the penalties
and remedies provided for such violation.’’

§ 223.190 Sourcing area application
procedures.
(a) Subject to the restrictions described in § 223.189 of this subpart and,
except as provided in paragraph (b) of
this section, a person who owns or operates a manufacturing facility and
who exports unprocessed timber originating from private lands may apply
for a sourcing area in accordance with
the procedures of this section. However, an owner/operator of a manufacturing facility who exports unprocessed
timber originating from Federal lands
may not possess or acquire unprocessed
timber originating from Federal lands
unless the acquisition is within an ap-

proved sourcing area. A person who intends to acquire or become affiliated
with a manufacturing facility that
processes Federal timber and who is an
exporter may apply for a sourcing area.
Written proof of the intent to acquire
or affiliate must be included in the
sourcing area application, signed by
the applicant and the person or, in the
case of a corporation, the Chief Executive Officer, whose company the applicant intends to acquire or affiliate
with. This certification must be on letterhead and must be notarized. A
sourcing area application that the Secretary determines would be approved
will be granted tentative approval
pending final notification by the applicant of acquisition of or affiliation
with the manufacturing facility. The
tentative approval of the sourcing area
will lapse unless the acquisition or affiliation occurs within 30 days of the
tentative approval of the sourcing
area. A sourcing area is not valid until
final approval of the sourcing area. The
direct substitution prohibition did not
apply to a person who applied for a
sourcing area on or before December 20,
1990. A request for modification of an
existing sourcing area shall trigger a
review pursuant to the procedures and
restrictions in § 223.191(e).
(b) As provided in the Act, a person
who has requested an exemption or
waiver of the prohibition against export within the preceding 24-month period, pursuant to § 223.189 of this subpart, must have applied for the desired
sourcing area on or before December 20,
1990.
(c) Applications. Sourcing area applications shall include:
(1) A map of sufficient scale and detail to clearly show:
(i) The applicant’s desired sourcing
area boundary. This boundary will include both the private and Federal
lands from which the applicant intends
to acquire unprocessed timber for
sourcing its manufacturing facilities;
(ii) The location of the timber manufacturing facilities owned or operated
by the applicant within the proposed
sourcing area where the person intends
to process timber originating from
Federal land;
(iii) The location of private lands
within and outside the desired sourcing

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Forest Service, USDA

§ 223.190

area where the person has, within the
24 months immediately preceding the
date of the application, acquired unprocessed timber originating from private land which was exported, sold,
traded, exchanged, or otherwise conveyed to another person for the purpose of exporting such timber;
(2) A list of other persons with timber manufacturing facilities located
within the same general vicinity as the
applicant’s facilities;
(3) Any other information the applicant may believe is appropriate to support approval of the requested sourcing
area; and
(4) A statement signed by the person
certifying under the penalties provided
in Section 492 of this Act (16 U.S.C.
620d) and the False Statements Act (18
U.S.C. 1001) that the information provided in support of the application is
true, complete, and accurate to the
best of the applicant’s knowledge. The
statement shall read as follows:
‘‘I certify under penalties of 16 U.S.C. 620d
and 18 U.S.C. 1001, that the information provided in support of this application, is true,
complete, and accurate to the best of my
knowledge concerning my timber purchasing
and export patterns. I certify that the information provided concerning my timber purchasing and export patterns fully and accurately reflects, to the best of my knowledge,
the boundaries of the sourcing area for which
I am applying. I make this certification with
full knowledge and understanding of the export and substitution restrictions of the Forest Resources Conservation and Shortage Relief Act of 1990 (16 U.S.C. 620, et seq.) (Act)
and its implementing regulations. I certify
that I have not exported unprocessed timber
originating from private lands within the
boundaries of the sourcing area that is the
subject of this application in the previous 24
months. I fully understand that, if this application is approved, exporting unprocessed
private timber originating from within the
approved sourcing area will be a violation of
this Act (16 U.S.C. 620, et seq.) its implementing regulations, and the False Statements Act (18 U.S.C. 1001), and may subject
me to the penalties and remedies provided
for such violation.’’

(d) Confidential information. Applications are not considered confidential.
However, if a person does submit confidential information as part of an application, the information should be
marked confidential. Information so
marked will be afforded the rights and

protection provided under the Freedom
of Information Act.
(e) Where to submit the application. A
sourcing area applicant shall send the
application to the Office of Administrative Law Judges and shall, simultaneously, send a copy of the sourcing
area application to the Forest Service
Regional Forester of the region in
which the manufacturing facility being
sourced is located. Where the sourcing
area application will cover purchases
from more than one agency, application is to be made to the agency from
which the applicant expects to purchase the preponderance of its Federal
timber. The sourcing area applicant
must also send a complete copy of the
application to each agency concerned.
The lead agency shall make the decision in consultation with, and upon cosignature of, the other agencies concerned.
(f) Signatory procedures. Sourcing area
applications must be signed by the person making the request, or in the case
of a corporation, by its Chief Executive
Officer, and must be notarized. The application shall be on company letterhead.
(g) The sourcing area application and
review process will be conducted pursuant to the Rules of Practice Governing
the Adjudication of Sourcing Area Applications and Formal Review of
Sourcing Areas Pursuant to the Forest
Resources Conservation and Shortage
Relief Act of 1990 (16 U.S.C. 620, et seq.),
found at 7 CFR part 1, subpart M.
(h) A final decision on a sourcing
area application or a formal sourcing
area review will be issued within four
(4) months of the receipt of the application or initiation of the review.
(i) The following criteria must be
met for sourcing area approval:
(1) The Administrative Law Judge,
or, on appeal, the Judicial Officer must
find that the proposed sourcing area is
geographically and economically separate from any area that the applicant
harvests or expects to harvest for export any unprocessed timber originating from private lands. In making
such a finding, the Administrative Law
Judge, or, on appeal, the Judicial Officer shall consider the timber purchasing patterns of the applicant on
private and Federal lands equally with

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§ 223.191

36 CFR Ch. II (7–1–06 Edition)

those of other persons in the same
local vicinity and the relative similarity of such purchasing patterns.
(2) The ‘‘same local vicinity’’ will
normally be manufacturing facilities
located within 30 miles of the community where the applicant’s manufacturing facility is located, but may include more distant communities if
manufacturing facilities in those communities depend on the same source of
timber and have similar purchasing
patterns.
(3) The relative similarity of purchasing patterns of other mills shall be
determined by considering the location
and similarity of unprocessed timber
being acquired by those facilities.
(4) Lines defining the geographic area
shall be based on major natural and
cultural features, including, but not
limited to, prominent ridge systems,
main roads or highways, rivers, political subdivisions, and not characterized
by random lines.
(j) Comments. Persons may submit
comments on sourcing area applications pursuant to the Rules of Practice
Governing
the
Adjudication
of
Sourcing Area Applications and Formal Review of Sourcing Areas Pursuant to the Forest Resources Conservation and Shortage Relief Act of 1990 (16
U.S.C. 620, et seq.), found at 7 CFR part
1, subpart M. Persons submitting a
comment must certify at the end of the
comment, but before the signature, to
the following: ‘‘I certify that the information provided by me is true and accurate, to the best of my knowledge,
and I understand that failure to provide true and accurate information
could be violation of the False Statements Act (18 U.S.C. 1001).’’
(k) Transporting or causing to be
transported unprocessed private timber
from outside of a sourcing area into a
sourcing area by the holder of the
sourcing area is prohibited as a violation of the sourcing area boundary.
Such violation will cause a review of
the sourcing area, and could subject
the sourcing area holder to the penalties and remedies for violations of
the Forest Resources Conservation and
Shortage Relief Act of 1990, 16 U.S.C.
620, et seq., and its implementing regulations.

(l) A person with an approved
sourcing area may relinquish the
sourcing area at any time provided the
person certifies to the following:
‘‘I am relinquishing the approved sourcing
area, described in the Secretary’s determination in FSAA llll on llll, 19ll. I
understand that I may not export unprocessed timber originating from private lands
west of the 100th meridian in the contiguous
48 States during the fiscal year in which I
have unprocessed timber originating from
Federal lands west of the 100th meridian in
the contiguous 48 States in my possession or
under contract, pursuant to the prohibition
against substitution in the Forest Resources
Conservation and Shortage Relief Act of 1990
(16 U.S.C. 620, et seq.) (‘‘Act’’) and its implementing regulations. I also understand that
I may not purchase unprocessed timber originating from Federal lands west of the 100th
meridian in the contiguous 48 States within
24 months of having exported unprocessed
timber originating from private lands west
of the 100th meridian in the contiguous 48
States, pursuant to the prohibitions against
substitution in the Act and its implementing
regulations. I make this certification with
full knowledge and understanding of the Act
and its implementing regulations and do
fully understand that exporting unprocessed
timber originating from private lands west
of the 100th meridian in the contiguous 48
States during a fiscal year in which I have
unprocessed timber originating from Federal
lands west of the 100th meridian in the contiguous 48 States in possession or under contract, or purchasing unprocessed timber
originating from Federal lands west of the
100th meridian in the contiguous 48 States
within 24 months of having exported unprocessed timber originating from private lands
west of the 100th meridian in the contiguous
48 States is a violation of the substitution
provisions of the Act and the False Statements Act (18 U.S.C. 1001), and may subject
me to the penalties and remedies provided
for such violation.’’

The certificate must be signed by the
person making such certification or, in
the case of a corporation, by its Chief
Executive Officer; must be on company
letterhead; and must be notarized.
(m) A sourcing area is in effect until
it is relinquished by the sourcing area
holder, or is disapproved upon review of
the sourcing area.
§ 223.191 Sourcing area disapproval
and review procedures.
(a) Notwithstanding any other provision of law, an applicant whose

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§ 223.191

sourcing area application was submitted by December 20, 1990, and was
disapproved could either phase out of
purchasing Federal timber or phase out
of exporting unprocessed timber originating from private lands within the
sourcing area that would have been approved, as follows:
(1) Phase-out of Federal timber purchasing. The applicant could purchase,
in the 9-month period after receiving
the application disapproval, unprocessed timber originating from Federal
lands in the disapproved sourcing area,
in an amount not to exceed 75 percent
of the annual average of such person’s
purchases of unprocessed Federal timber in such area during the 5 full fiscal
years immediately prior to the date of
submission of the application. In the 6month period immediately following
the 9-month period, such person could
purchase not more than 25 percent of
such annual average, after which time
the prohibitions against direct substitution, set forth in § 223.189 of this subpart, shall apply; or
(2) Phase-out of private timber exporting. The applicant could continue to
purchase unprocessed timber originating from Federal lands within the
disapproved sourcing area without
being subject to the phase-out of Federal timber purchasing procedures described in paragraph (a) of this section,
if the following requirements were
met:
(i) The applicant certified to the Regional Forester or the approving official to whom such authority has been
delegated, within 90 days after receiving the disapproval decision, as follows:
(A) An applicant that has exported
unprocessed timber originating from
private lands from the geographic area
that would have been approved provided a signed certification that reads
as follows:
‘‘I have engaged in the exporting of unprocessed private timber originating from
private lands located within the geographic
area the approving official would have approved as a sourcing area for my manufacturing facility. I desire to continue purchasing unprocessed Federal timber from
within such area. I hereby certify that I will
cease all exporting of unprocessed timber
from private lands located within the area
that would have been approved by [the applicant shall insert date 15 months from date of

receipt of the disapproval decision]. I agree
to retain records of all transactions involving acquisition and disposition of unprocessed timber from both private and Federal
lands within the area involved in the certification, for a period of three (3) years beginning on the date of receipt of the disapproval
notification, and to make such records available for inspection upon the request of the
Regional Forester, or other official to whom
such authority has been delegated. I make
this certification with full knowledge and
understanding of the requirements of the
Forest Resources Conservation and Shortage
Relief Act of 1990 (16 U.S.C. 620, et seq.) (Act)
and do fully understand that failure to cease
such exporting as certified will be a violation of the Act and may subject me to the
penalties and remedies for such violation.
Further, I fully understand that such violation may subject me to the penalty of perjury pursuant to the False Statements Act
(18 U.S.C. 1001). I certify that the information in this certificate is true, complete, and
accurate to the best of my knowledge and belief.’’;

or,
(B) An applicant who has not exported unprocessed timber originating
from private lands from the geographic
area that the Secretary would have approved provided a signed certification
that reads as follows:
‘‘I have not exported timber originating
from private lands within both the sourcing
area that the Secretary would have approved
and the disapproved sourcing area in the
past 24 months, pursuant to the Forest Resources Conservation and Shortage Relief
Act of 1990 (16 U.S.C. 620, et seq.), and I am
accepting the area that the Secretary would
have approved as my sourcing area. I certify
that the information in this certificate is
true, complete, and accurate to the best of
my knowledge and belief.’’

(ii) Each certification statement set
forth in paragraph (a)(2)(i) of this section must have been signed by the person making such certification or, in
the case of a corporation, by its Chief
Executive Officer; must have been on
company letterhead; must have been
notarized; and must have had a corporate seal attached.
(iii) The person signing such certification
set
forth
in
paragraph
(a)(2)(i)(A) of this section must have
provided to the Regional Forester the
annual volume of timber exported by

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§ 223.191

36 CFR Ch. II (7–1–06 Edition)

that person during the five (5) full fiscal years immediately preceding submission of the application, originating
from private lands in the geographic
area for which the application would
have been approved.
(iv) When the applicant submitted
the certificate, the area the Secretary
would have approved, as shown on the
sourcing area map provided by the Secretary, became an approved sourcing
area. If the certificate was not submitted, the sourcing area that would
have been approved did not become an
approved sourcing area.
(3) The phase-out of Federal timber
purchasing and the phase-out of private timber exporting procedures provided by paragraphs (a)(1) and (a)(2) of
this section do not apply to persons
submitting sourcing area applications
after December 20, 1990, or to persons
requesting
review
of
disapproved
sourcing areas.
(b) Limits on purchases and exports. (1)
During the 15-month period following
disapproval of a sourcing area, a person
who elects to phase-out of private timber exporting as described in paragraph
(a)(2) of this section, may not:
(i) Purchase more than 125 percent of
the person’s annual average purchases
of unprocessed timber originating from
Federal lands within the person’s disapproved sourcing area during the five
(5) full fiscal years immediately prior
to submission of the application; and,
(ii) Export unprocessed timber originating from private lands in the geographic area determined by the approving official for which the application
would have been approved, in amounts
that exceed 125 percent of the annual
average of that person’s exports of unprocessed timber from such private
land during the five (5) full years immediately prior to submission of the
application.
(2) At the conclusion of the 15-month
export phase-out period, the prohibition against exporting private timber
originating from within the area shall
be in full force and effect as long as the
sourcing area remains approved, pursuant to this subpart F of this part 223.
(c) Presentation of map to applicant
whose sourcing area is disapproved. The
area determined by the deciding official that would have been approved

shall be drawn on a map and presented
to the applicant by the deciding official with the notice of disapproval of
the application.
(d) Effect of prior certification to cease
exporting. An applicant’s previous certification to cease exporting beginning
February 20, 1991, for a period of three
(3) years from within the disapproved
sourcing area pursuant to paragraphs
(f) and (g) in § 223.189 of this subpart
shall remain in full force and effect for
persons with approved and disapproved
sourcing areas.
(e) Review process and frequency. (1)
Approved sourcing areas shall be reviewed not less often than every five (5)
years. A tentative date for a review
shall be included in the Administrative
Law Judge’s, or, on appeal, the Judicial Officer’s determination or stated
in writing by the Regional Forester following the determination. At least 60
days prior to the tentative review date,
the Regional Forester or other such reviewing official shall notify the person
holding the sourcing area of the pending review, publish notice of such review in newspapers of general circulation within the sourcing area, and invite comments, to be received no later
than 30 days from the date of the notice, from all interested persons, including the person holding the sourcing
area. For 10 working days following the
comment period, any person submitting a written comment and the person
with the sourcing area may review the
comments. If there is disagreement
among the persons who submitted written comments regarding the proper
sourcing area, the reviewing official
shall convene an informal meeting convenient to the persons that all interested persons may attend. If an agreement cannot be reached among the persons, formal administrative adjudication shall occur. The Administrative
Law Judge, or, on appeal, the Judicial
Officer shall, on the record and after
opportunity for a hearing, approve or
disapprove the sourcing area being reviewed, pursuant to the Rules of Practice Governing the Adjudication of
Sourcing Area Applications and Formal Review of Sourcing Areas Pursuant to the Forest Resources Conservation and Shortage Relief Act of 1990 (16

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§ 223.193

U.S.C. 620, et seq.), found at 7 CFR part
1, subpart M.
(2) Disapproved sourcing areas shall
be reviewed using the process described
in paragraph (e)(1) of this section upon
resubmission of an application, provided the applicant has accepted the
area the Secretary would have approved as a sourcing area pursuant to
paragraph (a)(2) of this section.
(3) The Department reserves the
right to schedule a review, at the request of the Forest Service or the person holding the sourcing area, at any
time prior to the scheduled tentative
review date, with 60 days notice.
(4) Sourcing areas being reviewed
shall continue in full force and effect
pending the final review determination.
(f) Reporting and record keeping procedures. The reporting and record keeping procedures in this section constitute information collection requirements as defined in 5 CFR part 1320.
These requirements have been approved by the Office of Management
and Budget and assigned clearance
number 0596–0115.
§ 223.192 Procedures for a non-manufacturer.
(a) Persons who do not own or operate a manufacturing facility (non-manufacturer) are not eligible to apply for
or be granted a sourcing area.
(b) The prohibition against the purchase of Federal timber for a person
who has exported unprocessed timber
originating from private lands within
the preceding 24-month period shall not
apply, if the person certified in writing
to the Regional Forester of the region(s) in which the person purchases
National Forest System timber by November 20, 1990, that the person would
cease exporting unprocessed timber
originating from private lands by February 20, 1991, for a period of three (3)
years, and the exporting did cease in
accordance with such certification.
(c) To obtain an exemption from the
prohibition against export within the
preceding 24-month period for purchasing Federal timber described in
§ 223.189 (a) and (b) of this subpart, a
person must have applied in writing to
the applicable Regional Forester on or
before November 20, 1990. The applica-

tion was required to be on company
letterhead and, in the case of a corporation, with its corporate seal affixed, and must have included:
(1) An agreement to retain records of
all transactions involving acquisition
and disposition of unprocessed timber
from both private and Federal lands
within the area(s) involved in the certification, for a period of three (3)
years beginning November 20, 1990, and
to make such records available for inspection upon the request of the Regional Forester, or other official to
whom such authority has been delegated.
(2) A signed certification which reads
as follows:
‘‘I have engaged in the exporting of unprocessed timber originating from private
lands located west of the 100th meridian in
the contiguous 48 States during the preceding 24 months. I desire to purchase directly from a department or agency of the
United States, unprocessed timber originating from Federal lands located in such
area of the United States. I make this certification for the exemption from the prohibition against export within the preceding
24-month period for purchasing Federal timber required by the Forest Resources Conservation and Shortage Relief Act of 1990
(Pub. L. No. 101–382, August 20, 1990, 16 U.S.C.
620, et seq.) (Act). I hereby certify that I will
cease all exporting of such unprocessed private timber from west of the 100th meridian
in the contiguous 48 States of the United
States by February 20, 1991. I make this certification with full knowledge and understanding of the requirements of this Act and
do fully understand that failure to cease
such exporting as certified will be a violation of this Act (16 U.S.C. 620d) and the False
Statements Act (18 U.S.C. 1001), and may
subject me to the penalties and remedies
provided for such violation.’’

(3) The certification must have been
signed by the person making such certification or, in the case of a corporation, by its Chief Executive Officer.
The certificate must have been notarized.
§ 223.193 Procedures for reporting acquisition and disposition of unprocessed Federal timber.
(a) Annual report. Each person who
directly or indirectly acquires or possesses unprocessed timber originating
from National Forest System lands located west of the 100th meridian in the

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36 CFR Ch. II (7–1–06 Edition)

48 contiguous States shall submit an
annual report on a form provided by
the Forest Service on the acquisition
and disposition of such timber. Such
report shall be on a calendar year basis
and shall be sent to the Regional Forester, or other official to whom such
authority is delegated, who administers the National Forest System
lands from which the majority of timber originated, not later than March 1
of each year, beginning March 1, 1997.
The form shall include:
(1) A summary for the calendar year
listing, by company, from whom the
timber was acquired; the date of acquisition; the origin of National Forest
System timber acquired; the sale
name; the contract number(s); brand
registration number(s) of brands registered by a state or agency or a pictorial representation of sale brand(s) if
brands not registered by a state or
agency; to whom the timber was sold,
transferred or otherwise conveyed to
another person; and the date of disposal;
(2) An accounting by origin, in net
board feet Scribner or cubic feet, of the
volume of National Forest System timber acquired, the volume domestically
processed by the purchaser or affiliates, and the volume sold or transferred for domestic processing;
(3) The volume by species of National
Forest System surplus species timber
acquired and exported or sold for export;
(4) The volume (MBF Net Scribner or
cubic) of the unprocessed timber originating from private lands west of the
100th meridian in the contiguous 48
States that was exported, and
(5) A certificate stating that:
(i) The certifier has read and understands the form;
(ii) The certifier is eligible to acquire
unprocessed timber originating from
Federal lands in accordance with the
Act;
(iii) The information supplied is a
true, accurate, current, and complete
statement of the receipt and disposition of unprocessed timber originating
from National Forest System lands to
the best of the certifier’s knowledge;
(iv) The certifier agrees to retain a
copy of the form and records of all
transactions
involving
unprocessed

Federal timber and to make such
records available for inspection upon
request of an authorized official of the
United States for three (3) years from
the date of disposal by manufacture or
transfer; and
(v) The certifier acknowledges that
failure to report completely and accurately the receipt and disposition of
timber will subject the certifier to the
penalties and remedies in the Act and
the penalties in the False Statements
Act (18 U.S.C. 1001).
(6) The information provided is presumed to be not confidential, unless
specifically marked confidential, in
which case confidentiality will be evaluated under applicable laws.
(b) Transfer of unprocessed National
Forest System timber. Each person who
transfers to another person unprocessed timber originating from National
Forest System lands shall undertake
the following:
(1) Before completing such transfer,
provide to such other person a written
notice of origin, species, estimated volume or actual volume if the transfer is
based on log scale volume, from whom
acquired, sale name, contract number,
and log brand of unprocessed National
Forest System timber being transferred on a form provided by the Forest
Service;
(2) Before completing such transfer,
certify that the information supplied is
a true, accurate, current, and complete
statement to the best of his or her
knowledge. As part of the certification,
the certifier shall:
(i) Agree to send a signed copy of the
form required in paragraph (b)(1) of
this section within 10 calendar days of
such transfer, which shall include all
notices, acknowledgments, and agreements, required by this section, to the
appropriate Regional Forester who administers the National Forest System
lands from which this timber originates, or other official to whom such
authority is delegated, and to retain a
copy for the certifier’s records;
(ii) Acknowledge that the transfer of
unprocessed Federal timber to a person
for export or to a person who may not
purchase timber directly from the Federal government is a violation of the
Act;

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(iii) Agree to obtain full completed
notice of origin form from the transferee;
(iv) Agree to retain records of all
transactions
involving
unprocessed
Federal timber for a period of three (3)
years from the date of transfer and to
make all records involving log transactions available to an appropriate
Federal official upon request. Records
include all forms and certificates required by these regulations;
(v) Acknowledge that failure to report completely and accurately the receipt and disposition and/or transfer of
unprocessed National Forest System
timber will subject the certifier to the
penalties and remedies in the Act (16
U.S.C. 620, et seq.) and the penalties in
the False Statements Act (18 U.S.C.
1001); and
(vi) Certify that he or she has read
and understands the form.
(3) Before completing such transfer,
obtain from the person acquiring such
timber on the same form provided by
the Forest Service.
(i) An agreement to retain for a period of three (3) years from date of
transfer the records of all sales, exchanges, or other disposition of such
timber, and make such records available for inspection upon the request of
an authorized official of the United
States;
(ii) An agreement to allow Federal
officials access to log storage and processing facilities for the purpose of monitoring compliance with the Act and
implementing regulations;
(iii) An agreement to maintain and/or
replace all brands and paint identifying
the Federal origin of each piece of unprocessed Federal timber as described
in § 223.195;
(iv) An agreement to submit, by
March 1, the annual report required in
§ 223.193(a);
(v) An agreement to submit a completed notice of origin form for the
Federal timber received and to receive
an agreement to comply with the Act
and regulations in such form if the person transfers any or all of the timber
listed in the document;
(vi) An acknowledgment of the prohibition against acquiring unprocessed
Federal timber from a person who is
prohibited by the Act from purchasing

the timber directly from the United
States;
(vii) An acknowledgment of the prohibitions against exporting unprocessed Federal timber and against acquiring such timber in substitution for
unprocessed private timber west of the
100th meridian in the contiguous 48
States;
(viii) A declaration of its business
size and manufacturing classification,
as defined under the Small Business
Administration Regulations at 13 CFR
part 121; and
(ix) A certificate stating that the certifier has read and understands the
form; is eligible to acquire unprocessed
timber originating from Federal lands
in accordance with the Act; has been
notified that some or all of the unprocessed timber included in this transfer
is subject to export and substitution
restrictions; supplied information is a
true, accurate, current, and complete
statement of the receipt and disposition of the unprocessed timber originating from National Forest System
lands to the best of the certifier’s
knowledge; and acknowledges that failure to report completely and accurately the transfer of unprocessed Federal timber will subject the certifier to
the penalties and remedies in the Act
(16 U.S.C. 620, et seq.) and the penalties
in the False Statements Act (18 U.S.C.
1001). The information provided is presumed to be not confidential, unless
specifically marked confidential, in
which case confidentiality will be evaluated under applicable laws.
(4) Except as otherwise provided by
law, a person who transfers unprocessed Federal timber to another person
and meets all notice, certification, acknowledgment, reporting and record
keeping requirements contained in this
section shall be relieved from further
liability for such timber pursuant to
the Act.
§ 223.194 Procedures for reporting the
acquisition and disposition of unprocessed private timber.
(a) Notice of domestic processing requirement. Each person who acquires
unprocessed timber originating from
Federal lands located west of the 100th
meridian in the 48 contiguous States,

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§ 223.194

36 CFR Ch. II (7–1–06 Edition)

and who also possesses or acquires unprocessed timber from private lands located west of the 100th meridian in the
48 contiguous States that requires domestic processing, including unprocessed timber originating within an approved sourcing area, and in turn sells,
trades or otherwise conveys such unprocessed private timber to another
person, must include a statement notifying the person acquiring the unprocessed private timber that such private
timber must be domestically processed.
Unprocessed timber originating from
private lands located outside of a
sourcing area may be transferred by
the holder of the sourcing area, or by
persons acquiring such unprocessed
timber who are eligible to export such
timber, without including such a statement.
(b) The notification statement, pursuant to paragraph (a) of this section,
shall accompany each transaction involving unprocessed private timber
that requires domestic processing. The
statement shall be on a form provided
by the Forest Service or a legible copy
of such form.
(1) On such form, described in paragraph (b) of this section, the person
transferring the timber shall:
(i) Give notice to the person receiving the unprocessed private timber
that exporting that timber would violate the Act and its implementing regulations;
(ii) Give notice to the person receiving the unprocessed private timber
that the timber has been identified for
domestic manufacturing by a spot of
highway yellow paint on each log end
that must be retained on the timber;
(iii) Agree to send a signed copy of
the transaction statement to the Regional Forester within 10 calendar days
of the transaction;
(iv) Agree to retain records of all
transactions involving the acquisition
and disposition of unprocessed timber
for a period of three (3) years from the
date of disposal by manufacturing or
transfer and to make such records
available for inspection upon the request of an authorized official of the
United States;
(v) Acknowledge that failure to completely and accurately report and identify unprocessed timber is a violation

of the Act, and regulations issued
under the Act, and the False Statements Act (18 U.S.C. 1001); and
(vi) Certify that the form has been
read and understood.
(2) On such form, described in paragraph (b), the person acquiring the timber shall:
(i) Acknowledge receipt of the notice
of requirement to domestically process
timber originating from private land;
(ii) Certify that a statement pursuant to paragraph (b)(1) will be included
in any subsequent transaction documents;
(iii) Agree to maintain yellow paint
markings on each log end until the
timber is domestically processed or
transferred;
(iv) Agree to retain records of all
transactions involving the acquisition
and disposition of unprocessed timber
for a period of three (3) years from the
date of disposal by manufacturing or
transfer and to make such records
available for inspection upon the request of an authorized official of the
United States;
(v) Agree to send a signed copy of the
transaction statement to the Regional
Forester within 10 calendar days of the
transaction;
(vi) Agree to allow authorized officials access to log storage and processing facilities for the purpose of monitoring compliance with the Act and its
implementing regulations;
(vii) Acknowledge that failure to
comply with the domestic manufacturing requirements for unprocessed
timber or failure to notify subsequent
persons of this requirement may subject the certifier to the civil penalties
and administrative remedies provided
in the Act and regulations issued under
the Act;
(viii) Acknowledge that failure to
completely and accurately report and
identify unprocessed timber is a violation of the Act, and regulations issued
under the Act, and the False Statements Act (18 U.S.C. 1001); and
(ix) Certify that the form has been
read and understood.
(c) Except as otherwise provided by
law, a person who transfers unprocessed private timber to another person
and meets all notice, certification, acknowledgement, distribution, reporting

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§ 223.195

and record keeping requirements contained in this section shall be relieved
from further liability for such timber
with regard to the export and substitution restrictions pursuant to the Act.
§ 223.195 Procedures for identifying
and marking unprocessed timber.
(a) Highway yellow paint. The use of
highway yellow paint on unprocessed
logs west of the 100th meridian in the
contiguous 48 States shall be reserved
for identifying logs requiring domestic
manufacturing.
(b) Preserving identification. All identifying marks placed on an unprocessed
log to identify the National Forest
System origin of that log and/or to
identify the log as requiring domestic
processing shall be retained on the log
until the log is domestically processed.
If the identifying marks are lost, removed, or become unreadable, they
shall be replaced. If the log is cut into
two or more segments, each segment
shall be identified in the same manner
as the original log.
(1) A generic log hammer brand,
known as a ‘‘catch brand’’, used to
identify ownership, may be used to replace lost, removed, unreadable or otherwise missing brands where such use
is authorized by the Regional Forester
and approved by the Contracting Officer. Use of such a catch brand on a log
or log segment will signify Federal origin.
(2) The requirement to preserve identification of log pieces shall not apply
to logs cut into two or more segments
as a part of the mill in-feed process immediately before processing. Log segments that are returned to or placed in
storage must be marked on both ends
with yellow paint.
(c) National Forest System logs. Except
as otherwise provided in this subsection, all unprocessed logs originating from National Forest System
timber sales west of the 100th meridian
in the contiguous 48 States shall, before being removed from the timber
sale area, be marked on each end as follows:
(1) Painted on each end with a spot of
highway yellow paint not less than
three square inches in size; and,
(2) Branded on each end with a hammer brand approved for use by the For-

est Supervisor of the National Forest
from which the logs originate. The
brand pattern may not be used to mark
logs from any other source for a period
of 24 months after all logs have been
removed from the sale area and until
such brand pattern is released in writing by the Forest Supervisor.
(d) Private logs. All unprocessed logs
originating from private lands west of
the 100th meridian in the contiguous 48
States that require domestic manufacturing pursuant to § 223.194 of this subpart, shall be painted on each end with
a spot of highway yellow paint not less
than three (3) square inches in size before removal from the harvest area. If
private logs are acquired by a person
who may not export such logs, the logs
must be marked by the person acquiring the logs at the time of the acquisition.
(e) Waiver of painting requirements.
The log painting requirements pursuant to paragraphs (c)(1) and (d) of this
section may be waived if the Chief of
the Forest Service determines that alternate methods for identifying logs required to be domestically processed are
equal to or better than the procedures
required herein.
(f) Waiver of branding requirements.
Regional Foresters may waive the
branding requirements pursuant to
paragraph (c)(2) of this section as follows:
(1) Regions 1, 2, 3, and 4. On an individual timber sale basis, all or a portion of the branding requirements pursuant to paragraph (c)(2) of this section
may be waived, if:
(i) Unprocessed logs from any origin
are not known to have been exported
by any person from the person’s area of
operations within the previous 5; years.
(ii) The person certifies as follows:
‘‘I hereby request waiver of the requirements to brand each end of individual logs
originating from the llll timber sale,
Forest Service contract number llll pursuant to 36 CFR 223.195. I certify that I have
not exported or sold for export unprocessed
timber from private lands within my area of
operations in five years. I certify that I understand, that if granted, the waiver applies
only to unprocessed logs being processed
within my area of operations. I certify that
any unprocessed logs to which this waiver
applies that are transferred, or sold for
transfer, outside my area of operations will

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§ 223.196

36 CFR Ch. II (7–1–06 Edition)

be branded on both ends in full compliance
with 36 CFR 223.195. I make this certification
with full knowledge and understanding of
the requirement of the Forest Resources
Conservation and Shortage Relief Act of 1990
(16 U.S.C. 620, et seq.) (Act) and its implementing regulations at 36 CFR part 223. I
fully understand that failure to abide by the
terms of the waiver will be a violation of this
Act (16 U.S.C. 620, et seq.) and the False
Statements Act (18 U.S.C. 1001) and may subject me to the penalties and remedies provided for such violation.’’;

and,
(iii) The person otherwise complies
with the regulations relating to transfers of logs between persons.
(iv) If the Regional Forester determines that unprocessed logs from my
origin are being exported, or are known
to have been exported within the previous 5 years, by any person from the
person’s area of operations, the Regional Forester shall revoke the waiver.
(2) Regions 5 and 6. On an individual
timber sale basis, the branding requirement pursuant to paragraph (c)(2) of
this section may be waived for logs ten
(10) inches or less in diameter inside
bark on the large end may be waived if:
(i) One end of each log is branded;
(ii) The person certifies as follows:
‘‘I hereby request waiver of the requirement to brand each end of individual logs ten
(10) inches or less in diameter inside bark on
the large end, originating from the llll
timber sale, U.S. contract number llll
pursuant to 36 CFR 223.195. I certify that I
understand, if granted, that the waiver applies only to unprocessed logs being processed at llll, and further certify that any
and all unprocessed logs to which waiver
would apply that are transferred, or sold for
transfer, will be branded on both ends in full
compliance 36 CFR 223.195. I make this certification with full knowledge and understanding of the requirements of the Forest
Resources Conservation and Shortage Relief
Act of 1990 (Pub. L. No. 101–382, August 20,
1990; 16 U.S.C. 620, et seq.) (Act) and its implementing regulations at 36 CFR Part 223. I
fully understand that failure to abide by the
terms of the waiver will be a violation of this
Act (16 U.S.C. 620, et seq.) and the False
Statements Act (18 U.S.C. 1001) and may subject me to the penalties and remedies provided for such violation.’’;

and,

(iii) The purchaser otherwise complies with the regulations relating to
transfers of logs between persons.
(iv) If the Regional Forester determines that logs ten (10) inches or less
in diameter inside bark on the large
end are being exported in the Region,
the Regional Forester shall revoke the
waiver.
(3) The Chief of the Forest Service
may authorize the testing of alternative methods of branding for consideration in future amendment of these
regulations. Such alternative methods
and logs marked under those methods
shall be closely monitored.
§ 223.196

Civil penalties for violation

(a) Exporting Federal timber. If the
Secretary of Agriculture finds, on the
record and after providing an opportunity for a hearing, that a person,
with willful disregard for the prohibition in the Act exporting unprocessed
Federal timber, exported or caused to
be exported unprocessed timber originating from Federal lands in violation
of the Act, the Secretary may assess
against such person a civil penalty of
not more than $500,000 for each violation, or 3 times the gross value of the
unprocessed timber involved in the violation, whichever amount is greater.
(b) Other violations. If the Secretary
of Agriculture finds, on the record and
after providing an opportunity for a
hearing, that a person has violated any
provision of the Act, or any regulation
issued under the Act relating to National Forest System lands, even
though that the violation may not
have caused the export of unprocessed
Federal timber in violation of such
Act, the Secretary may:
(1) Assess against such person a civil
penalty of not more than $500,000, if the
Secretary determines that the person
committed such violation willfully;
(2) Assess against such person a civil
penalty of not more than $75,000 for
each violation, if the Secretary determines that the person committed such
violation in disregard of such provision
or regulation; or
(3) Assess against such person a civil
penalty of not more than $50,000 for
each violation, if the Secretary determines that the person should have

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§ 223.202

known that the action constituted a
violation.
(c) Penalties not exclusive and judicial
review. A penalty assessed under paragraph (a) or (b) of this section shall not
be exclusive of any other penalty provided by law, and shall be subject to review in an appropriate United States
district court.
§ 223.197 Civil penalty assessment procedures.
Adjudicatory procedures for hearing
alleged violations of this Act and its
implementing regulations and assessing penalties shall be conducted under
the rules of practice governing formal
adjudicatory proceedings instituted by
the Secretary. Such procedures are
found at 7 CFR 1.130, et seq.
§ 223.198

Administrative remedies.

In addition to possible debarment action provided under subpart C of this
part, the Chief of the Forest Service, or
other official to whom such authority
is delegated, may cancel any timber
sale contract entered into with a person found to have violated the Act or
regulations issued under the Act. Such
a finding shall constitute a serious violation of contract terms pursuant to
§ 223.116(a)(1) of this part.
§ 223.199 Procedures for cooperating
with other agencies.
The Regional Foresters may enter
into agreements to cooperate with the
Department of the Interior, the Department of Defense, and other Federal, State and local agencies for monitoring, surveillance and enforcing the
Act.
§ 223.200 Determinations
species.

of

surplus

(a) Determinations that specific
quantities of grades and species are
surplus to domestic manufacturing
needs and withdrawals of such determinations shall be made in accordance
with title 5, United States Code, section 553.
(b) Review of a determination shall
be made at least once in every 3-year
period. Notice of such review shall be
published in the FEDERAL REGISTER.
The public shall have no less than 30

days to submit comments on the review.
(c) Alaska yellow cedar and Port
Orford cedar, which the Secretary of
Agriculture found to be surplus to domestic processing needs pursuant to 36
CFR 223.163, the rules in effect before
August 20, 1990, shall continue in that
status until new determinations are
published.
§ 223.201 Limitations on unprocessed
timber harvested in Alaska.
Unprocessed timber from National
Forest System lands in Alaska may
not be exported from the United States
or shipped to other States without
prior approval of the Regional Forester. This requirement is necessary to
ensure the development and continued
existence of adequate wood processing
capacity in Alaska for the sustained
utilization of timber from the National
Forests which are geographically isolated from other processing facilities.
In determining whether consent will be
given for the export of timber, consideration will be given to, among other
things, whether such export will:
(a) Permit more complete utilization
on areas being logged primarily for
local manufacture,
(b) Prevent loss or serious deterioration of logs unsalable locally because
of an unforeseen loss of market,
(c) Permit the salvage of timber damaged by wind, insects, fire or other catastrophe,
(d) Bring into use a minor species of
little importance to local industrial development, or
(e) Provide material required to meet
urgent and unusual needs of the Nation. (16 U.S.C. 472a; 16 U.S.C. 551; 16
U.S.C. 616)
§ 223.202 Information requirements.
(a) The procedures in § § 223.189 and
223.192, and some of the procedures in
§ 223.190 were approved by the Office of
Management and Budget (OMB) and assigned Control Number 0596–0114 upon
issuance of the interim rule. Control
Number 0596–0114 has been reapproved
by OMB for use through May 31, 1997.
OMB approved the information collection requirements in § § 223.191 and
223.203 for use through August 31, 1995,
and assigned them Control Number

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36 CFR Ch. II (7–1–06 Edition)

0596–0115. OMB approved the information collection requirements in § § 223.48
and 223.87 for use through March 31,
1997 and assigned them Control Number
0596–0021; the information collection requirements in § § 223.48 and 223.87 have
been revised. OMB Control Numbers
0596–0114, 0596–0115, and 0596–0021 have
been consolidated under OMB Control
Number 0596–0114.
(b) The application and reporting
procedures in § § 223.187, 223.193, 223.194,
223.195, and some of the procedures in
§ 223.190 of this final rule contain new
record keeping and reporting requirements as defined in 5 CFR part 1320
and, therefore, impose additional paperwork burdens on the affected public.
The Office of Management and Budget
(OMB) has approved these requirements, and assigned them Control
Number 0596–0114.
§ 223.203 Indirect substitution exception for National Forest System timber from within Washington State.
(a) Exception limits. A limited amount
of unprocessed National Forest System
timber originating from within Washington State could have been acquired
by a person otherwise covered by the
prohibition against indirect substitution, pursuant to § 490(b) of the Act
and § 223.189(e) of this subpart.
(1) The amount of such unprocessed
timber was limited to whichever is
less:
(i) The higher of the applicant’s actual purchase receipts for unprocessed
timber originating from National Forest System lands within Washington
State or the Department’s records, during fiscal years 1988, 1989, and 1990, divided by 3; or
(ii) 15 million board feet.
(2) Such limit shall not exceed such
person’s proportionate share of 50 million board feet.
(b) Application, review and approval
process. To obtain a share of the 50 million board feet exempted from the prohibition against indirect substitution
in section 490(b) of the Act, a person
must have submitted an application.
Applications were required to include
at least the following:
(1) The amount of volume exception
being requested, in thousand board feet
(MBF);

(2) A signed certification that reads
as follows:
‘‘I certify that, except for an approved
share of unprocessed Federal timber, in accordance with 36 CFR 223.203, the prohibition
contained in section 490(b) of the Act (16
U.S.C. 620b) applies to me. I have exported
unprocessed timber originating from private
lands from west of the 100th meridian in the
48 contiguous States and have acquired unprocessed timber from National Forest System lands located within Washington State
in 1988, 1989 and/or 1990. I certify that the information provided in support of this application is a true, accurate, current and complete statement, to the best of my knowledge
and belief. I agree to retain records of all
transactions involving the acquisition and
disposition of unprocessed timber from Federal lands within the area involved in this
application for a period of 3 years beginning
on the date the application is approved, and
to make such records available for inspection upon the request of the Regional Forester or other official to whom such authority has been delegated. I make this certification with full knowledge and understanding of the requirements of the Act and
do fully understand that if this application is
approved, the amount of exception granted
under this approval may not be exceeded in
any one fiscal year, and do fully understand
that if such exception is exceeded I will be in
violation of the Act (16 U.S.C. 620, et seq.),
and I may be subject to the penalties and
remedies provided for such violation. Further, I do fully understand that such violation may subject me to the penalty of perjury pursuant to the False Statements Act
(18 U.S.C. 1001).’’;

and
(3) The application listed under this
section must have been signed by the
person making such application or, in
the case of a corporation, by its Chief
Executive Officer. The application
must have been on the company’s letterhead and must have been notarized.
(4) The application made under this
section must have been mailed to the
Regional Forester in Portland, Oregon,
no later than January 8, 1992. Applicants were notified of the approving official’s decision by letter. If approved,
the amount of the exception becomes
effective upon publication in the FEDERAL REGISTER.
(5) Prospective applicants could review Department records upon request

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Pt. 228

prior to the deadline for submitting applications. An applicant could voluntarily
submit
information
documenting the amount of purchases of
unprocessed timber originating from
National Forest System lands within
Washington State. The Department
then determined which amount is higher, verified by either the Department’s
records or the applicant’s records. The
Department then determined the applicant’s portion of the 50 million board
feet by determining the lesser of the
amount verified by the records or 15
million board feet. Applicants could
submit the information documenting
the amount of purchases in the following manner:
(i) Actual receipts for purchasing unprocessed timber from National Forest
System
lands
within
Washington
State; or
(ii) A statement by a certified public
accountant of:
(A) A summary by fiscal year for
1988, 1989 and 1990 of the applicant’s acquisitions of timber originating from
National Forest System lands in the
State of Washington, listing total volume for each of the three fiscal years;
and
(B) The average volume for the three
fiscal years. The volumes to be reported were the harvest volumes, except in the case of open sales. Advertised volumes had to be reported for
open sales.
(C) The certified public accountant
must have certified to the following:
‘‘I certify that under the penalties and
remedies provided in § 492 of the Act (16
U.S.C. 620d) and the penalty of perjury provided in the False Statements Act (18 U.S.C.
1001) that the information provided in support of this application is, to the best of my
knowledge and belief, a true, accurate, current, and complete statement of [applicant’s
company’s name] National Forest System
timber acquisitions originating from within
the State of Washington for fiscal years 1988,
1989 and/or 1990.’’

(D) The certified public accountant’s
statement and certification must have
been on the accountant’s company letterhead, must have been notarized, and
must have accompanied the applicant’s
application.
(c) Selling and trading rights. The purchase limit right obtained under this
rule may be sold, traded, or otherwise

exchanged with any other person subject to the following conditions:
(1) Such rights may not be sold, traded, or otherwise exchanged to persons
already in possession of such rights:
(2) Any person selling, trading, or exchanging any or all of the rights obtained under this rule shall advise the
Regional Forester of the amount being
traded and the name(s) of the person(s)
acquiring such rights within 15 days of
the transaction; and
(3) No person may have or acquire
more than 15 million board feet in one
fiscal year.
(d) Information collection. The application procedures in this section constitute information collection requirements as defined in 5 CFR part 1320.
These requirements have been approved by the Office of Management
and Budget and assigned clearance
number 0596–0114.
(e) Persons with approved shares. The
application period for shares of the indirect substitution exception for acquiring unprocessed timber originating
from National Forest Systems lands
within the State of Washington closed
on January 8, 1992. Persons with approved shares are responsible for monitoring and controlling their acquisitions of National Forest System timber
originating from within the State of
Washington to assure approved share
amounts are not exceeded in any Federal fiscal year. Unused portions of annual shares may not be ‘‘banked’’ for
use in future fiscal years. The acquisition of such National Forest System
timber must be reported to the Forest
Service in accordance with § 223.193 of
this subpart. The following shares are
approved as of September 8, 1995:
(1) Cavenham Forest Industries,
Portland, OR, 1,048,000 board feet.
(2)
Weyerhauser,
Tacoma,
WA,
15,000,000 board feet.

PART 228—MINERALS
Subpart A—Locatable Minerals
Sec.
228.1 Purpose.
228.2 Scope.
228.3 Definitions.
228.4 Plan of operations—notice of intent—
requirements.
228.5 Plan of operations—approval.

137

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