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has 131,000 Sequoia acres and 856,000 Sierra acres. Payments for each Forest 

 are based on the proportion of the specific Forest in each County. Their is 

 no logic to such widespread differences. 



The illogical consequences do not end with the 25% payments. There are 

 two additional "tax" payments. 



Under PILT (31 USC 6901), because the payments are greater than PILT's 

 SO. 75 acre base, these Forests got an additional SO.lO/acre. The Sequoia 

 counties got $14,173 per year and the Sierra counties got 13,090 per year. 



The California Possessory Interest Timber Tax Law is the basi^ for most 

 of the taxes paid on privjite forest land and timber. There is a small annual 

 bare land tax, with the main tax secured when timber is cut. Because this is 

 a "possessory interest" style law, the one who cuts timber must pay the tax. 

 This arrangement levies the same -tax on National Forest timber that is levied 

 on private timber. The Forest Service lowers the price of timber sold by a 

 set amount to cover the tax paid by the logger . My estimate is that the 

 recent Sequoia average cut of 64 MMBF paid around yield taxes on the order of 

 $250,000 per year, while the Sierra 129.5 MMBF cut paid around $520,000. 



The private timber tax burden appears to be about 15% of the Federal 25% 

 plus PILT timber tax burden. Over the past several years the yield timber tax 

 been lowered by an estimated 75%. The Forest Service has paid a fluctuating, 

 but generally climbing 25% payment, and its timber bears the cited double 

 taxation . 



These data suggest that CBO's estimate of the effects of tax equivalence 

 payments replacing the current Federal costs may have underestimated the 

 cost saving by adoption of Section 8 of the bill. 



The concepts in Section 7 deserve to be tested on a trial basis on both 

 Forests - applying it to the Preserve lands as well as the balance of the 

 Forest. The present system of Federal payments in-lieu of taxes is an 

 illogical, contradictory jungle. 



If enacted, provision should be included in the law for an annual report 

 to Congress by the Comptroller General outlining the results of application. 

 As matters now stand there are several payment systems applicable to the 

 National Forests, none of which has a sound underpinning. 



SUMMARY 



The Giant Sequoias deserve to be protected in a manner that minimizes 

 human disturbance of their shrinking habitat. H.R. 2153 offers a way to 



The Yield Tax schedule in was Ponderosa Pine '82 = $14.61/M, 

 •91 = $4.53; Sugar Pine "82 = $15.92/M, '91 = $4.54/N; White/Red 

 Fir '82 = $8.37, '91 = S0.76/M; Incense Cedar "82 = $9.96/M, '91 = 

 $1.92/M. Unadjusted average 1982 = S12.22/M vs. 1991 = $3.20/M 

 which is a 75% reduction in the private timber tax burden. 



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