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The below-cost sale issue has become a major one. Future forest plan revisions 

 must give more effort to explicitly addressing the issue, and where below-cost sales 

 are proposed to continue, provide clear reasons for doing so. 



Questions From Senator Daschle and Mr. Lyons' Responses Thereto 



Question 1. Congress has, for the past several years, set timber sale targets annu- 

 ally in appropriations, and those targets have often been specific for each Forest 

 Service region. What is the history of congressionally mandated timber targets? 

 How does Congress set timber targets? 



Answer. Congressionally mandated timber targets have been reported in the vari- 

 ous reports of the House, Senate or conference committees for several years. For 

 fiscal years 1986 through 1992 the committees set the timber volumes by Forest 

 Service region. 



The President's budget proposal includes the dollars and associated outputs for all 

 resource areas on a national basis. Members of the House and Senate committees 

 request additional information about the specific distribution of the timber targets. 

 After congressional action the total timber volume or a regional distribution of 

 volume is reported out of the various committees. 



Question 2. How have these targets compared with the goals presented in the 

 budget justifications? 



Answer. For the years 1978 through 1992, Congress has increased the timber 

 target above the President's budget level 10 times and decreased the timber volume 

 5 times. Appendix 1 shows a regional comparison of what timber volume level was 

 submitted in the President's budget and what volume level was allocated in the ap- 

 propriations bill and reports. [See page 80.] 



Question 3. How are the timber targets in the budget justifications established? 



Answer. The regions develop an array of budget and output alternatives within 

 the capabilities of their land management plans. These alternative levels are used 

 to build the agency request and other levels requested by the Department of Agri- 

 culture. One level is established through the Office of Management and Budget to 

 be presented as part of the President's budget. 



Question 4- Do the land and resource management plans provide sufficient detail 

 to be used in setting annual timber output targets? If not, how could annual goals 

 be balanced with long-term management direction? 



Answer. Yes, however the plans give an average for the decade. The annual 

 amount may be above or below that amount for any particular year. The forests in 

 their outyear budget planning propose a mix of various budget and associated 

 output (target) levels. Therefore, the Regional Foresters can select the outputs 

 within the capabilities of each forests from their proposals depending on the re- 

 gion's portion of the national budget. 



Question 5. Does the budget justification present targets for other resource out- 

 puts or conditions? 



Answer. Yes, there are targets for all resource areas with a measurable output, 

 both commodities and noncommodities. 



Question 6. When Congress specifies targets, how does the Forest Service allocate 

 the targets to the national forests? What criteria are used? 



Answer. The targets are assigned to the regions based on the capabilities the re- 

 gions proposed in their budget request. The distribution is made to ensure to the 

 extent possible that the desired output or target can be achieved. 



Question 7. How important are unit costs in the allocation scheme? 



Answer. Unit costs have not been a major factor in the assignment of most tar- 

 gets. However, with the objective of eliminating below-cost sale, unit costs by defini- 

 tion become an important factor in the target assignment. 



Question 8. Is profitability, as measured by TSPIRS, considered? 



Answer. In previous years targets were not constrained by a profitability require- 

 ment but with the President's objective of eliminating below-cost sales it will be one 

 of the considerations in target assignment. However, equally important are the 

 other objectives in the forest plans so they will also be taken into consideration. 



Question 9. Are any TSPIRS data considered? 



Answer. Yes, forests and regions are looking very closely at the data to see what 

 efficiencies are necessary to bring sales above cost. Increasing timber values will 

 give some forests the opportunity to become above cost and will be a part of the 

 consideration in the assignment of targets. 



Question 10. Has the approach used for allocation changed much in recent years? 



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