11 



ing on National Forest lands. An example is Pacer Corporation on the Custer Dis- 

 trict. These activities generate little revenue to the government because the 1872 

 Mining Laws do not provide for royalties from locatable minerals. Even though sev- 

 eral alternatives for plan revision would increase the number of acres withdrawn 

 from mineral entry, we anticipate little practical impact from mining activity on 

 our local economies. 



Not surprisingly, the timber sale program is a significant contributor to economic 

 activity in the region. The dollar value of timber purchased by small businesses 

 varies from year to year. In 1992, $14,000,000 worth of timber was harvested from 

 the Black Hills. With the exception of one company, Pope and Talbot, all the pur- 

 chasers are small businesses. In the timber program, there is a special program for 

 small businesses, called the "set-aside" program. Congress created a process for the 

 Forest Service and the Small Business Administration to work together to ensure 

 that small business be given the opportunity to purchase a fair share of the timber 

 sold from National Forests. A small business is defined as a business with less than 

 500 employees. The share for small business is based on the volume purchased and 

 manufactured by small business since the last "recalculation." The current small 

 business share is 54 percent, which means that small businesses are presently given 

 the opportunity to purchase 54 percent of our sales, by volume. A trigger of set-aside 

 sales occurs when the volume purchased by small business falls below 54 percent. 

 Under the preliminary alternatives being considered in the plan revision, the al- 

 lowable sale quantity would range from a low of approximately 40 million board 

 feet (MMBF) to a high of around 100 MMBF of sawtimber. By comparison, over the 

 last decade, an average of 120 MMBF of sawtimber has been harvested from the 

 forest. In spite of possible short-term price increases as operators try to protect 

 timber supplies, if the alternative chosen in the Forest Plan revision results in a 

 lower amount of timber offered, the receipts to the counties (25 percent of the total 

 timber receipts) would likely decrease over the long term as less timber is offered 

 for sale. In 1992, timber receipts to the counties in South Dakota and Wyoming 

 were about $3.4 million. 



Management of lands that are components of the National Wilderness System is 

 also a program area that will be covered in the plan revision. As Chairman Pressler 

 is aware, the Black Hills is a relatively small forest with— much interspersed pri- 

 vate ownership. The only existing wilderness is the Black Elk Wilderness which 

 covers 9,862 acres. In the plan revision process, we have identified the three addi- 

 tional areas that we believe meet the criteria for designation as set forth in the Wil- 

 derness Act of 1964. These areas cover approximately 16,500 acres and are being 

 analyzed in depth as part of the plan revision. At least one alternative will recom- 

 mend all three areas for Wilderness designation. Some will recommend no addition- 

 al Wilderness. Our preliminary findings indicate that, if all three areas were added 

 to the wilderness system, the impact on the Allowable Sale Quantity over the next 

 10-year period would be approximately a 5 percent reduction. 



Although not covered by the Forest Plan, I would also like to mention several of 

 our programs that do contribute to local economic activity. We recognize the de- 

 pendencies of some communities on the Black Hills National Forest and the possible 

 need to diversify some of those communities. A relatively new program in the 

 Forest Service, as a result of the 1990 Farm Bill, is Rural Community Assistance, 

 designed to help rural communities diversify their economies. In Fiscal Year 1992, 

 the City of Custer received a $30,000 grant which was used to help develop an old 

 railroad right-of-way into a hiking and biking trail through town. In Fiscal Year 

 1993, the City of Custer was awarded a $40,000 grant to assist in paving and devel- 

 oping their trailhead center in town. 



In addition to the grants, the Black Hills National Forest received $15,000 in 

 Fiscal Year 1992 and $10,000 in Fiscal Year 1993 to assist local communities with 

 their action plans and specific projects. Two thousand and five hundred dollars were 

 allocated to Belle Fourche to help with the architectural design of the Center of the 

 National Visitors Center; $10,000 were provided to Weston County, Wyoming, for 

 completion of their community action plan and marketing brochure; $2,800 went to 

 Sundance, WY, to help with the costs of highway information signs and completion 

 of their action plan; the remaining funds were used for travel and training for local 

 community representatives, and for administration of the program. 



Another effect public lands have on small businesses is through our purchasing 

 and contracting of goods and services. Our policy is governed by the Federal Acqui- 

 sition Regulations and is briefly stated as follows: generally, procurements less than 

 $25,000 are set-aside exclusively for small businesses; generally, construction 

 projects, trash removal and Architectural and Engineering projects over $25,000 are 

 open to all bidders, large or small. In the years 1988 to 1991, the Black Hills Nation- 



