[Federal Register: April 3, 2006 (Volume 71, Number 63)]
[Rules and Regulations]
[Page 16622-16657]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03ap06-13]
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DEPARTMENT OF AGRICULTURE
Forest Service
36 CFR Part 251
RIN 0596-AB83
Procedures for Appraising Recreation Residence Lots and for
Managing Recreation Residence Uses Pursuant to the Cabin User Fee
Fairness Act
AGENCY: Forest Service, USDA.
ACTION: Issuance of final directives.
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SUMMARY: The Cabin User Fee Fairness Act of 2000 directs the Forest
Service to promulgate regulations and adopt policies for carrying out
provisions of the act. Accordingly, the Forest Service is adopting
final directives issued in the Forest Service Manual (FSM) Title 2300,
Recreation, Wilderness, and Related Resource Management; FSM Title
2700, Special Uses Management; Forest Service Handbook (FSH) 2709.11,
Special Uses Handbook; and FSH 5409.12, Appraisal Handbook. These final
directives, and revised special uses regulations published elsewhere in
this part of today's Federal Register, set out requirements and provide
direction to agency personnel for managing recreation residence uses
and assessing fees for those uses of National Forest System lands
pursuant to the act.
DATES: These directives are effective May 3, 2006.
ADDRESSES: The documents used in developing these directives are
available for inspection and copying at the office of the Director,
Lands Staff, Forest Service, USDA, 4th Floor South, Sidney R. Yates
Federal Building, 1400 Independence Ave., SW., Washington, DC, during
regular business hours (8:30 a.m. to 4 p.m.), Monday through Friday,
except holidays. Those wishing to inspect these documents are
encouraged to call ahead (202) 205-1248 to facilitate access to the
building.
Other documents not in the decision-making record that were
requested during the comment period on the proposed directives are
beyond the scope of this direction making process conducted pursuant to
5 U.S.C. 553(c). Those interested in obtaining these documents may
request them under the Freedom of Information Act by writing to the
USDA Forest Service, Freedom of Information Act/Privacy Act Branch,
Office of Regulatory and Management Services, 1400 Independence Ave.,
SW., Mail Stop 1143, Washington, DC 20250-1143.
FOR FURTHER INFORMATION CONTACT: Julett Denton, Lands Staff, (202) 205-
1256.
SUPPLEMENTARY INFORMATION:
Table of Contents
1. Background
2. Purely Technical, Nonsubstantive Revisions
3. Public Comments on Proposed Revisions to Recreation Residence
Directives
Forest Service Manual
Chapter 2340--Privately Provided Recreation
Opportunities
Chapter 2720--Special Uses Administration
Forest Service Handbook 2709.11--Special Uses
Chapter 30--Fee Determination
Forest Service Handbook 5409.12--Appraisal Handbook
Chapter 60--Appraisal Contracting
4. Regulatory Certifications
Environmental Impact
Regulatory Impact
No Takings Implications
Civil Justice Reform
Unfunded Mandates
Federalism and Consultation and Coordination With Indian Tribal
Governments
Energy Effects
Controlling Paperwork Burdens on the Public
5. Text of the Final Directive
6. Table I--Section-by-Section Comparison Between the Proposed and
Final Recreation Residence Directives
1. Background
A discussion of the history and development of direction and
regulations for the administration of recreation residences is found in
the final rule to Title 36, Code of Federal Regulations, part 251,
subpart B, published elsewhere in this part of today's Federal
Register.
Most of the changes required by the Cabin User Fee Fairness Act of
2000 (CUFFA) affect direction for administering recreation residences
contained in the Forest Service Manual (FSM) and Forest Service
Handbook (FSH) directives. Accordingly, the changes to recreation
residence management identified in CUFFA will be implemented through
revisions to the FSM and FSH pursuant to CUFFA. Table I at the end of
this notice has been prepared as an aid to understanding the directive
changes being adopted. Table I displays the recreation residence
directive provision, its reference to the appropriate section of CUFFA,
and a section-by-section comparison of the proposed and final
direction.
2. Purely Technical, Nonsubstantive Revisions
All references to enactment of CUFFA as having occurred on October
12, 2000 have been revised to reflect that CUFFA was actually enacted
on October 11, 2000. In addition, Forest Service Manual 2347.12,
governing caretaker cabin user fees, has been revised for clarity and
for purposes of using the terminology in the corresponding provisions
in CUFFA.
3. Public Comments and Responses To Proposed Revisions To Recreation
Residence Directives
A discussion on the general nature of comments and a response to
comments on the proposed rule are found in a final rule published
elsewhere in this part of today's Federal Register.
Forest Service Manual
Chapter 2340--Privately Provided Recreation Opportunities
2340.05--Definitions. This section included a definition of a
``caretaker cabin'' and reference that a cabin needed to be occupying a
lot within a recreation residence tract.
Comment. Many respondents commented that limiting the use of cabins
to only those situated on a lot within a recreation residence tract is
inconsistent with CUFFA.
Response. The Forest Service agrees with these comments. The final
direction includes a revised definition for a caretaker cabin. The
revised definition is more reflective of the definition of a caretaker
cabin that appears in CUFFA and does not necessarily require that the
location of a caretaker cabin be situated within a recreation residence
tract. In making this revision, however, the Forest Service is not
implying that it will consider authorizing the construction of new
cabins outside of existing recreation residence tracts for the purpose
of creating a caretaker cabin use. However, the revised definition will
provide the authorized forest officer with the option to authorize an
existing privately-owned cabin on National Forest System (NFS) land to
be used for caretaker cabin purposes in those rare circumstances where
a privately-owned cabin may already exist outside of a designated
recreation residence tract. Examples might be existing privately-owned
cabins currently authorized by the Forest Service for use as an
isolated cabin, a residence, or as part of a larger use and occupancy
of NFS land, such as in conjunction with a grazing allotment or for
mining purposes.
[[Page 16623]]
The Forest Service also discovered a technical error in this
section of the proposed direction. The coding should have been 2340.5,
not 2340.05. The final direction includes this correction.
2347.1--Recreation Residences. This section provided direction that
the Forest Service would, to the maximum extent practical, manage the
recreation residence program to preserve the opportunity for individual
and family-oriented recreation.
There were no substantive comments received on this section.
However, in the final directive, paragraph 7 has been added to address
the concerns expressed by many respondents that community- or
association-owned improvements should not be authorized to an
individual under the recreation residence term permit, but rather,
should be authorized under separate permit and authority to the
association or entity representing the recreation residence owners.
2347.12--Caretaker Cabins. This section provided direction
concerning the manner in which a caretaker cabin may be owned and
authorized, the considerations that the authorized officer should take
into account when determining whether to authorize caretaker cabin use,
and the annual fee to be charged for caretaker cabin uses.
Comment. Many respondents commented that it was unclear as to how
the proposed direction concerning caretaker cabin uses was different
from current agency direction. Respondents suggested that the Federal
Register notice should have included a discussion of those differences.
These respondents also suggested that the proposed direction requiring
that a caretaker cabin be authorized with an annual permit, Form FS-
2700-4, as opposed to a term special use permit for a recreation
residence, Form FS-2700-5a, is discriminating against caretaker cabin
uses.
Response. The Forest Service agrees that there was no discussion in
the preamble to the May 13, 2003, Federal Register notice (68 FR 25751)
of the differences between the existing and proposed policy on
caretaker cabins. However, the proposed direction included a table
(Table I) which provided a section by section comparison between the
current recreation residence direction and the proposed revision.
The proposed revision to Forest Service Manual (FSM) 2347.12a,
which included language directing the use of an annual permit (Form FS-
2700-4) to authorize a caretaker cabin, was not a proposed change from
current agency direction for authorizing caretaker cabin uses. A
caretaker cabin, by its nature can be, and often is, used as a year
round, primary residence to fulfill its purpose of maintaining the
security of a tract. As such, the authorized use is significantly
different than a recreation residence use. Likewise, if a caretaker
cabin use is authorized for a cabin situated outside of a recreation
residence tract, as will be provided with the previously referenced
revision to the definition of a caretaker cabin, then not only the use,
but the location of the cabin would be inconsistent with the agency's
direction that a recreation residence use be located within a
recreation residence tract. In addition, the primary purpose of use and
occupancy of a caretaker cabin is sufficiently different from that of a
recreation residence use, and it should be authorized with the type of
special use authorization appropriate for that special use. Therefore,
the final directive will remain unchanged with respect to the type of
special use authorization used to authorize the use of a cabin as a
caretaker cabin.
The proposed direction under Sec. 2347.12b includes the language
which was intended to be reflective of section 607(b) of CUFFA, which
directs that the fee for a caretaker cabin special use shall not exceed
the fee charged for the authorized use of a similar typical lot in the
tract. The final language in this part of the direction has been
slightly revised to accommodate those situations where a caretaker
cabin may not be located within a recreation residence tract. The
revised language in the final direction provides direction for
assessing an annual fee for a caretaker cabin that may be located
neither on a recreation residence tract, nor on a recreation residence
lot, by directing that the fee will be equal to a typical lot within
the tract for which caretaker cabin services are being provided, that
is most representative of the NFS land upon which the caretaker cabin
is located.
Chapter 2720--Special Uses Administration
There were no substantive comments received on this chapter of the
Forest Service Manual. No revisions have been made in the final
directive.
Forest Service Handbook 2709.11--Special Uses Handbook
Chapter 30--Fee Determination
33.05--Definitions. This section included new definitions for terms
used in CUFFA.
Comment. Numerous respondents suggested that the definitions of
terms in the agency's directives mirror exactly the definitions of
those terms as provided in CUFFA. Others suggested that the term
``market value'' should not be included in the final directive because
it is a term of art which appraisers understand and that including the
words ``giving due consideration to all available economic uses of the
property at the time of the appraisal'' in the definition of market
value was inconsistent with the provisions of CUFFA, is in conflict
with the provisions defining Highest and Best Use in the appraisal
specifications, and should be deleted.
Response. The Forest Service has reviewed the definition of all the
terms included in the proposed directive revisions and has compared
them to the corresponding definitions and the intent of CUFFA. A
response to each definition is as follows:
Cabin. The definition has been revised to mirror the definition for
a cabin as provided in section 604(4) of CUFFA.
Market Value. The term ``market value'' is not defined in CUFFA.
However, the Forest Service believes that a definition for market value
is necessary in agency direction. Section 605 of CUFFA directs the
Forest Service, through the Secretary of Agriculture, to ensure, to the
maximum extent practicable, that the basis and procedure for
calculating cabin user fees results in a fee that reflects ``(1) the
market value of the lot; and (2) regional and local economic
influences.'' With this statutory mandate, the Forest Service believes
that there is a need to clearly define the term ``market value,''
lacking any clear definition in CUFFA. The agency believes it would be
remiss to simply rely on an assumption that market value is a term of
art, which every appraiser understands and can articulate and apply
consistently. Several definitions of market value have been utilized in
appraisal publications and educational materials over time. The Forest
Service believes it is important for all appraisers to utilize a
current, common definition. Though other definitions may apply to
transactions performed under other legal authorities, CUFFA directs
that appraisals prepared under authority of the act be prepared in
compliance with the Uniform Standards of Professional Appraisal
Practice (USPAP) and the Uniform Appraisal Standards for Federal Land
Acquisitions (UASFLA). The two sets of appraisal standards have
conflicting definitions, so the definition in the UASFLA takes
precedence because those standards, though they are not themselves law,
are based on Federal case law, legislation, and
[[Page 16624]]
administrative rules. Providing for a definition in agency direction is
designed to maximize consistency in the interpretation and application
of the concept of market value.
Within the proposed definition of market value, use of the language
``giving due consideration to all available economic uses of the
property at the time of the appraisal'' was also evaluated in response
to the comments received. The phrase cited is an integral part of the
definition. However, this part of the definition is mitigated by the
requirement in the appraisal guidelines that the identified highest and
best use shall be the authorized use: A lot suitable for use as a
recreation residence. No other potential highest and best uses shall be
considered or discussed in the appraisal report.
Natural, Native State. The definition of this term in the proposed
direction was very similar to that used in CUFFA and was not changed in
the final direction.
Recreation Residence. This term was not defined in CUFFA. However,
CUFFA includes several references to the ``recreation residence
program,'' and CUFFA defines the term ``cabin,'' as a subset of
recreation residence (see the final direction defining the term
``cabin''). Therefore, the Forest Service believes that for consistency
in management, and clarity for the public, the term ``recreation
residence'' must be defined to distinguish it from other types of cabin
uses on NFS lands, such as historic cabins, isolated cabins, and cabins
used for mining or grazing operations. The definition, however, has
been revised in the final direction to remove the words ``auxiliary
buildings and improvements,'' so that the definition of a ``recreation
residence'' is equal to the definition of a ``cabin,'' as cabin is
defined in CUFFA and this section of the direction. However, a
recreation residence special use commonly includes the use and
occupancy of NFS lands with not just a recreation residence, but also
with ``auxiliary buildings and improvements.'' The cumulative location
and distribution of the recreation residence, or cabin, and the
associated permit holder owned auxiliary buildings and improvements on
NFS land comprises the recreation residence ``lot,'' as the term
``lot'' is defined in the final rule at 36 CFR 251.51, published in a
separate notice in this part of today's Federal Register. Auxiliary
buildings and improvements are not a part of the recreation residence
or cabin and have therefore, been deleted from the final definition of
the term ``recreation residence.''
Related Improvements. A definition of ``related improvements'' was
not included in the proposed rule or proposed directives. However, due
to the comments received on the definition of ``recreation residence
lot'' in the proposed rule, the Forest Service is adding this
definition to clarify what constitutes a related improvement in the
context of a recreation residence lot.
For the purpose of defining a recreation residence lot (36 CFR
251.51), ``related improvements'' include not only the examples of
facilities and uses owned and maintained by the holder identified at 36
CFR 251.51, but may also include holder-owned facilities or uses of
National Forest System lands operated or maintained by the holder in
conjunction with the recreation residence use. For example,
outbuildings, wood piles, retaining walls, picnic tables, driveways,
parking areas, trails, boardwalks, campfire rings, seats, benches, the
construction and maintenance of lawns, gardens, flower beds, landscaped
terraces, and the manipulation and/or maintenance of native vegetation.
Related improvements will not include native vegetation that is
manipulated and/or maintained for the primary purpose of protecting
property and mitigating safety concerns, such as the removal of hazard
trees, and the treatment/management of vegetation, approved by the
authorized officer, to reduce fuel loading and to create defensible
space for wildfire suppression purposes, nor will it include tract
association- or community-owned facilities that are authorized under a
separate authorization to the recreation residence tract association or
some other entity representing the owners of the recreation residence.
The list of items identified in the definition of ``related
improvements'' in section 33.05 is not intended to be an all-inclusive
list.
Simple Majority. Section 614(c)(2) of CUFFA requires that a new
appraisal or peer review of an existing appraisal be made by a majority
of the cabin owners in a group of cabins represented in the appraisal
process by a typical lot. To assure that Forest Service managers
consistently understand and apply this provision of CUFFA, the agency
believes that there is a need to clearly define what constitutes a
``majority'' as used in this section of CUFFA. The proposed direction
did so by providing a definition of ``simple majority.'' However, since
CUFFA and other sections of the directive use the term ``majority,''
instead of ``simple majority,'' this term has been changed to
``majority'' in section 33.05. The proposed direction provided a
definition of ``more than 50 percent,'' and that definition remains the
same in the final direction. In the case where a typical lot represents
a grouping of an even number of lots, and a request is made for a new
appraisal or peer review pursuant to section 614(c)(2) of CUFFA, the
majority of the holders within that grouping would be at least 50% of
the permit holders in that grouping, plus 1. A request for a peer
review or new appraisal by only 50 percent of the holders within a
grouping comprised of an even number of lots would not by definition,
constitute a majority.
Tract. The definition of this term in the proposed direction was
very similar to that used in CUFFA, and was not changed in the final
direction.
Typical Lot. The first sentence of the definition of this term in
the proposed direction was similar to the definition in CUFFA. The
Forest Service expanded the definition in the proposed direction to
describe to Forest Service managers how typical lots are to be used for
appraisal purposes. There have been no changes to the definition of
this term in the final directive.
33.13--Annual Adjustment of Recreation Residence Fee. This section
prescribed the manner in which annual adjustments to recreation
residence fees would be made and provided a series of examples for
implementing the provisions of the proposed direction.
Comment. At least one respondent was critical of the Forest
Service's proposal to continue to use the Implicit Price Deflator,
Gross National Product (IPD-GNP) index in making annual changes to
fees, stating that section 608(b) of CUFFA directs the agency to use
the ``Index of Agricultural Land Prices,'' published and maintained by
the Department of Agriculture. One respondent stated that since the
proposed direction has no provisions to adopt the use of the Index of
Agricultural Land Prices, it must mean that the Forest Service intends
to incur an unnecessary expense of updating this section of the
direction when the transition period (as prescribed in section 614 of
CUFFA) is over, or the Forest Service hopes to bury the Index of
Agricultural Land Prices and not use it at all.
Response. The proposed rule and proposed directives clearly
disclosed the intent to use current and future indexing factors for
making annual adjustments to recreation residence special use permit
fees in compliance with the provisions in CUFFA. Section 614 of CUFFA
describes the transition as that period of time during which the final
rule, direction revisions, and new appraisal guidelines are
promulgated,
[[Page 16625]]
adopted, and fully implemented, and a new base cabin user fee for all
holders is established. Section 614(c) of CUFFA provides holders up to
2 years after the date of adoption of the final rule, direction
revisions, and appraisal guidelines, to request a new appraisal or peer
review. Additional time beyond the date of these requests will be
needed for new appraisals and peer reviews to be conducted and a new
base cabin user fee established. So it is conceivable that for some
permit holders, the transition period described in CUFFA will continue
for several years after the date of adoption of these final rules,
direction revisions, and appraisal guidelines. During this transition
period, section 614(a)(1) and (2) of CUFFA specifically direct that
term special use permit fees for recreation residences shall be
annually adjusted using the annualized 2nd quarter to 2nd quarter
change in the IPD-GNP. The Forest Service's direction at Sec. 33.13 of
FSH 2709.11 reflects this provision of CUFFA.
In the preamble of the proposed rule (68 FR 25749), the Forest
Service disclosed that it will begin to use the Index of Agricultural
Land Prices to make annual adjustments to the base cabin user fee when
the transition period (section 614 of CUFFA) ends. A notation on Table
I, Sec. 33.13 (68 FR 25779) stated that approximately 2 years after
adopting the proposed rule and direction revisions (including the new
appraisal guidelines), the Forest Service would develop supplemental
direction to implement the provisions of section 608(a) and (b) of
CUFFA. By waiting approximately 2 years before proposing and
establishing agency direction for use of the Index of Agricultural Land
Prices for annualized changes in recreation residence permit fees, the
Forest Service will be able to then provide holders and interested
members of the public, clear and focused fee direction concerning the
use of that index.
Comment. Several comments were received which cited that in Sec.
33.13 of the proposed directive, Example 2 displayed a year in which
the annual fee increase could be in excess of 5 percent. At least one
respondent who commented on this section of the direction suggested
that it should be revised to result in situations where the annual fee
will never increase by more than 5 percent because that is what is
needed to comply with the limitation provision in section 608(d) of
CUFFA.
Response. In Example 2, the increase in the fee from Year 2006
($772) to the Year 2007 fee ($824) represented a fee increase of 6.7
percent. It appears, however, that the respondent's comment is based on
an interpretation of the limitation provisions in section 608(d) of
CUFFA, which suggests that the annual change in a cabin user fee can
never exceed 5 percent. The Forest Service does not agree with this
interpretation of section 608(d) of CUFFA. Section 608(d) directs that
the Secretary shall:
(1) Limit any annual fee adjustment to an amount that is not more
than 5 percent per year when the change in agricultural land values
exceeds 5 percent in any 1 year; and
(2) Apply the amount of any adjustment that exceeds 5 percent to
the annual fee payment for the next year in which the change in the
index factor is less than 5 percent.
The Forest Service interprets this provision to mean that in any
year in which the annual index amount exceeds 5 percent, the amount of
the adjustment in excess of 5 percent will be carried forward in its
entirety to the fee in the very next year in which the index factor is
less than 5 percent, even if that results in a one year fee increase
for that year in excess of 5 percent. Section 608(d) of CUFFA does not
direct that there be a 5 percent fee increase limitation in the year in
which the fee change in the index factor is less than 5 percent and the
carryover adjustment(s) is applied. Example 2 in section 33.13 of the
proposed direction was specifically designed with hypothetical index
factors to demonstrate this interpretation of section 608(d) of CUFFA.
Therefore, the Forest Service believes that the example is accurate,
and disagrees with the interpretation of section 608(d) represented by
the comment that agency direction should provide that an annual fee may
never increase by more than 5 percent.
There were no revisions made to this section.
33.2--Fees When Determination Is Made To Place Recreation Residence
on Tenure. This section provided direction for implementing the
provisions of section 607(c) and (d) of CUFFA, describing the manner in
which an annual fee will be assessed in the event that a decision is
made to discontinue a recreation residence use.
Comment. Several respondents provided comments about particular
provisions in the three options which call for a recovery of some of
the foregone fees, in cases where the recreation residence use is going
to be allowed to continue for at least 10 more years beyond the
originally identified date of expiration and conversion to an
alternative public purpose. The respondents noted that these provisions
are not mandated in CUFFA, questioned the legality of requiring that a
fee that includes as a ``surcharge'' a 10-year recovery of previously
foregone permit fees, and that a 10-year recovery should not run with
the lot and be made a part of the fee assessed to a subsequent owner of
the recreation residence, should a change in ownership occur over the
course of that 10-year fee recovery.
Response. Although it was not stated in the proposed direction, the
options identified are a reiteration of current direction that has been
in place since 1994. No changes from existing direction were proposed.
Providing the 10-year recovery period was designed to benefit the
owners of recreation residences, by preventing recreation residence
owners from having to pay foregone fees in a single lump sum
assessment. Rather, an economic impact to recreation residence owners
has been mitigated in agency direction with the provision that allows
owners to repay the foregone fees due the United States as an annual
fee surcharge, in equal installments over a 10-year period.
While the Forest Service understands the burdens this fee recovery
surcharge may impose on a new owner of the recreation residence, it is
the responsibility of the prospective buyer, or any successor in
interest, to be aware of the terms and conditions of the recreation
residence special use permit, including fee obligations due the United
States at the time they consider acquiring a recreation residence. The
current owner's fee obligation to the United States, including any
annual fee recovery surcharge can then be taken into account by
prospective purchasers as a consideration in negotiating a purchase
price with the seller of the recreation residence.
There were no revisions made to this section.
33.4--Establishing the Market Value of Recreation Residence Lot.
This section provided general direction about the manner in which
recreation residences are appraised and describes the basic concept of
establishing groupings of lots having essentially the same or similar
value characteristics.
Comment. Many comments were received concerning Sec. 33.4,
paragraph 1, that provided direction for fee adjustments made for
measurable differences among recreation residences lots within a
grouping. These respondents stated that this could be implied to mean
that appraisers would have the authority to make (base cabin user fee)
adjustments for measurable differences among recreation residences
[[Page 16626]]
within a grouping of lots, and to establish new groupings of lots and
to select typical lots, and that giving this authority to appraisers
violates the provisions of CUFFA. Other respondents stated that there
should not be the need to make adjustments, because if there were
measurable differences among recreation residence lots within a
grouping, then that should trigger the need to establish a new grouping
with a new typical lot. Some respondents suggested that one of the
results of implementing the provisions of CUFFA, Departmental
regulations, and agency policies may be the need to reconsider and
reconfigure lot groupings, including the establishment of additional
lot groupings and the corresponding selection of additional typical
lots. Other comments suggested that recreation residence lots should be
appraised in their native, natural state and suggested that the
appraiser should be instructed to consider lots as inaccessible in the
winter, unless snow is removed from the access road by either the
Forest Service or a third party.
Response. The Forest Service agrees that as worded, paragraph 1 in
Sec. 33.4 could be interpreted to mean that an appraiser has the
authority to make adjustments to base cabin user fees in cases where
there might be measurable differences among recreation residence lots
within a grouping of lots. Therefore, the language in paragraph 1 has
been revised to clarify that only the authorized officer may make
adjustments.
The Forest Service disagrees, however, with comments that suggested
that measurable differences among recreation residence lots within a
grouping of lots always signals the need to establish a new grouping
and a new typical lot. While that may be appropriate in some cases, it
may not always be an efficient or economically justifiable approach to
establishing a base cabin user fee, particularly in cases where only
one or two lots within a grouping of lots might have a measurable
difference that, while measurable, will result in only a minor change
to the base cabin user fee. Therefore, the Forest Service will leave
this provision as an option for the authorized officer to consider and
use in accommodating measurable differences between lots within a
grouping as an alternative to establishing a new grouping and
corresponding typical lot. However, paragraph 1 will be revised to
include the word ``values'' to clarify that this provision means that
adjustments to a base cabin user fee may be made when there are
measurable value differences among recreation residence lots within a
grouping of lots. The requirement that the authorized officer seek the
advice of the assigned Forest Service review appraiser will also be
added to paragraph 1.
The Forest Service disagrees that this sentence could also be
interpreted to mean that an appraiser has the authority to create a new
grouping of lots and select a correspondingly new typical lot. The
direction in Sec. 33.41 of the direction clearly directs that the
establishment of groupings of lots, and the selection of a typical lot
within each lot grouping, shall be made by the authorized officer with
input from permit holders.
The comments that suggested that the appraiser should be instructed
to consider the lots as inaccessible in the winter unless snow is
removed from the access road may not have understood that this property
characteristic is covered in Sec. 33.4, paragraph 3(b). The appraiser
is directed to consider, and adjust if appropriate, any limitation on
access attributable to weather and other factors. The appraiser will
consider the lot's access condition. If the property is inaccessible in
winter, the appraiser will search for sales with similar access
limitations.
The Forest Service also agrees that as part of the implementation
of CUFFA and the adoption and implementation of the Secretary's
regulations and agency policies, there may be an occasional need in
some tracts for the authorized officer to either reconsider the
groupings of lots and the identification of typical lots or make
adjustments to base cabin user fees for certain lots within a grouping
of lots. The need to do so would most likely occur in cases where the
inventory of facilities, utilities, and access servicing a tract are
not comparable to the facilities, utilities, and access servicing the
typical lot. In these cases, the authorized officer will have the
authority to, at his or her discretion, consider implementing one of
the following options:
1. Establish a new grouping of lots having clearly different
attributes of access, utilities, and facilities servicing those lots
from those which have been inventoried and are servicing the typical
lot and:
a. Identify with the holders a new typical lot to represent that
new grouping.
b. Prepare a new permanent inventory of utilities, access, and
facilities servicing that typical lot (sec. 33.42).
c. Conduct a new appraisal of that typical lot pursuant to the
provisions of CUFFA. The Forest Service and the holder(s) shall pay
equally for the cost of the new appraisal.
2. Where feasible, assign lots having clearly different attributes
with another typical lot that may have been established in the tract
and which has attributes of access, utilities, and facilities that are
comparable to those lots.
3. Make adjustments to the base cabin user fee for those lots
having utilities, access, and facilities that are so different from the
attributes of the typical lot that it creates a measurable difference
in value.
These options have been added to Sec. 33.41.
Comment. Section 33.4 of the proposed direction also directed that
an appraiser shall not select sales of land within developed urban
areas when identifying comparable sales to arrive at an appraised value
of a typical lot. Some respondents commented that the word ``urban''
should be defined because it has a specific meaning in most land use
ordinances and that (1) cabin owners are concerned that appraisers may
select comparable lots from urban and suburban-style subdivisions in
rural areas and that (2) use of comparable lots from these sources has
the potential to dramatically distort the valuation of NFS lots.
Response. The Forest Service agrees with those respondents who
expressed these concerns. Urban is defined in ``The Dictionary of Real
Estate Appraisal, Fourth Edition,'' as:
Describes a mature neighborhood with a concentration of
population typically found within city limits or a neighborhood
commonly identified with a city.
A definition for ``urban'' has been added to section 33.05.
33.42--Inventorying Utilities, Access, and Facilities. This section
directed the authorized officer to identify and inventory utilities,
access, and facilities that provide service to each typical lot within
a recreation residence tract. It also provides criteria or guidelines
for the authorized officer to use in making a determination as to who
paid for the capital costs to construct those utilities, access, and
other facilities servicing each typical lot
Comment. Many comments were received concerning this section of the
proposed direction. One of the purposes of this part of the proposed
direction was to further define the fundamental premise in CUFFA, which
directs that ``the Secretary shall presume that a cabin owner, or a
predecessor of the owner, has paid for the capital costs of a utility,
access, or facility serving the lot being appraised, unless the Forest
Service produces evidence that the agency or a third party has paid for
the
[[Page 16627]]
capital costs.'' Most who commented on Sec. Sec. 33.42, and 33.42(a)
and (b) of the proposed direction said it was inconsistent with the
provisions in CUFFA, or `` defective'' in that the direction (1)
attempts to determine by definition that certain improvements are not
paid for by cabin owners, or their predecessors, and that an approach
is not equivalent to producing evidence (as is required in CUFFA); (2)
attempts to put the burden of proof (as to who paid for utilities,
facilities, or access) upon the cabin owners, rather than on the Forest
Service; and (3) establishes standards which would allow an authorized
officer to make assumptions as to who paid for utilities, access, or
facilities without producing actual evidence of that fact. Some who
commented said that all evidence demonstrating payment of capital
investments in utilities, access, and facilities must be in writing.
Many respondents commented that this section of CUFFA requires the
Forest Service to prove payment of the capital investment in access,
utilities, and facilities by either the Forest Service or a third
party. Many comments suggested that any time a holder is paying a
standard rate for a utility service, included in that rate are the
costs of capital investments of the facilities needed to convey/provide
the service or utility. Lastly, almost all who commented on this part
of the proposed direction disagreed with that portion of Sec. 33.42(a)
which specifically cited as an example, that the assessment of a tap
fee or hook-up fee charged by a utility provider to a permit holder or
their predecessor does not constitute a payment of the capital costs of
providing those facilities to the lot.
Response. The primary purpose for the direction in section 33.42
was to provide clarity and consistency for implementing the inventory
provisions of section 606(a)(1) of CUFFA. In the proposed directive,
the Forest Service provided direction through the use of examples.
Lacking this direction, permit administrators and authorized officers
would be guided only by nondescript provisions in section 606(a)(1) of
CUFFA which lends itself to differences in interpretation. That was
clearly evident by the significant number of comments that were
generated by the Forest Service's interpretation of section 606(a)(1)
and demonstrates that there is no single, agreeable interpretation of
this section of CUFFA. Therefore, the agency will exercise its
discretion in providing further definition and guidance in its
directives to assure consistency in interpretation and application of
this part of CUFFA.
Most of the comments that were submitted concerning the examples
provided in the proposed direction in Sec. Sec. 33.42(a) and (b)
disagreed with various elements of the proposed direction concerning
evidence that constitutes payment for the capital costs of utilities,
access, and facilities which provide access or services to a recreation
residence lot. Those aspects of the comments received will be
individually addressed, as follows:
1. Responsibility for Determining Evidence of Payment of Capital
Costs. Many who commented interpreted the proposed direction in Sec.
33.42(a) as requiring cabin owners to provide evidence that either the
cabin owner or a predecessor of a cabin owner directly paid, paid a
lump sum fee, or paid a surcharge for the capital costs of an
inventoried utility, access, or facility. Many cited that it is the
intent of section 606(a)(1) of CUFFA that it is the responsibility of
the Forest Service to provide this evidence.
The Forest Service agrees. Major revisions to this section have
been made to more clearly articulate that intent. The caption for Sec.
33.42(a) has been revised to ``Types of Utilities, Access, and
Facilities to Include in Inventories,'' and includes the list of
itemized types of utilities, access, and facilities that were
identified in the proposed direction under the general caption in Sec.
33.42 as items 1 thru 4. The caption at Sec. 33.42(b) has been revised
to ``Criteria to be Considered in Determining Who Paid for Inventoried
Utilities, Access, and Facilities,'' and revises the direction
previously contained in Sec. Sec. 33.42(a) and (b) to provide greater
clarity to Forest Service employees and cabin owners concerning
criteria for determining who paid for capital improvements and to
clearly identify the burden of the Forest Service to produce evidence
that capital improvements were paid by a party other than the cabin
owner or their predecessor.
However, the Forest Service disagrees with those respondents who
commented that CUFFA directs the Forest Service to ``prove'' that
capital costs for access, utilities, and facilities were paid for by
the Forest Service or a third party. That is a standard much higher
than the clear language in CUFFA which simply requires the authorized
officer to have evidence of the payment of capital costs by either the
Forest Service or a third party.
2. Hook-up or Tap Fee. The proposed direction in Sec. 33.42(a)
stated that a hook-up fee or tap fee, which is commonly assessed by a
utility provider when initiating service to a new customer, does not
equate to payment of the capital costs of installment of the facilities
that deliver or transport the utility service to the tract or lot being
appraised. Many of the comments received disputed this statement,
asserting that a hook-up or tap fees are an expense to the cabin owner
and, therefore, are assessed by the provider to pay for the capital
costs to construct and install the improvements or facilities which
deliver the utility or service.
The Forest Service agrees that there may be cases where at least
some of the hook-up or tap fee assessment is based upon the provider's
capital costs to install the utility or facility that provides that
service. Therefore, the direction has been revised in Sec. 33.42(b) to
instruct authorized officers that if evidence is produced to indicate
that hook-up or tap fee assessments were implemented to pay for the
capital costs to construct and install the improvements or facilities
which deliver the utility or service, then that will serve as the basis
for the authorized officer to determine that the cabin owner or their
predecessor who paid a fee have paid for the capital costs of the
utility or facility providing service to the lot. In most cases,
however, the amount of the hook-up or tap fee assessed to a new
customer is established primarily to pay for the utility provider's
administrative costs incurred as part of activating a new customer,
such as the establishment of a new file and account and expenses of a
site visit to enable switches and install metering units owned and
operated by the provider. In these instances, the hook-up or tap fee
will not be considered payment by the cabin owner or their predecessor
for the capital costs of facilities. The final direction has been
revised to reflect the fact that it is the responsibility of the
authorized officer to seek evidence to make that determination.
3. Base User Fees. Many comments disputed the proposed direction
that provided that if the capital costs of a utility or facility are
paid for and attributable to the entire service base, then those
capital costs are assumed to be neighborhood enhancing developments and
the costs being borne by the provider of a service or utility, not the
cabin owner or their predecessor. These comments suggest that in
effect, all customers who are assessed a base rate and/or user fee for
services provided by a utility company or service provider, such as an
electric company, telephone company, water
[[Page 16628]]
utility district, cable TV provider, and so forth are paying for the
capital costs of utilities and facilities that provide those types of
utility or service to a recreation residence lot. The logic of these
comments would suggest that any cabin owner who is paying base rates
and user fees for a utility service is paying capital costs to
construct, operate, and maintain the facilities that provide or deliver
that utility or service, even when those base rates and user fees are
nothing more than that being assessed to every other customer in the
service area.
The Forest Service disagrees with these arguments. Applying the
logic of these comments would mean that only in the rarest of cases
would there ever be a utility or facility that is providing service to
a recreation residence lot that would be considered as having been
provided by a third party, such as a utility or service company
provider. If that had been the intent of the Congress in drafting this
provision of CUFFA, then there would have been little purpose served to
direct that the agency inventory and identify utilities provided by a
third party. Rather, the Forest Service has interpreted CUFFA to mean
that there clearly are circumstances in which utilities, access, and
facilities can be identifiable as having been provided by a third
party, and most commonly by the utility or service provider, without
the customer directly incurring the capital costs of utilities, access,
or facilities. It is the Forest Service's interpretation of section
606(a)(1) of CUFFA that if the capital costs of any utility, access, or
facility were not directly paid by the cabin owner or their
predecessor, then costs will be identified as having been paid for by a
third party. The payment of a base rate and usage fee is not equivalent
to direct payment of the capital costs of utility, access, or
facilities delivering or providing a utility or service.
4. Tax Supported Roads and Highways. Similar to the issue raised in
preceding paragraph 3, many respondents asserted that in those cases
where a tract or lot is accessed by a Federal, State, or county highway
or road, and where the cabin owner is paying a possessory interest tax
to the State or county governmental entity who operates and maintains
that road or highway, is proof that the cabin owner is paying for the
capital costs of the highway or road through that tax.
The Forest Service disagrees. The only evidence demonstrating that
the cabin owner or a predecessor of the cabin owner paid the capital
costs for a road or highway would be evidence that a public road agency
assessed a surcharge or lump sum assessment to the cabin owner or their
predecessor, or a specific road or highway accessing their recreation
residence.
Almost all who responded to this section of the proposed direction
commented that simply making statements in agency direction does not
equate to providing evidence that the capital costs of inventoried
utilities, access, and facilities were or were not provided or paid for
by the cabin owners or their predecessors, and that CUFFA requires
evidence. The Forest Service agrees with those comments, but in doing
so, the agency also wants to clarify that it is not the intent to have
statements in agency direction satisfy the evidence requirements of
CUFFA. Rather, as previously stated, the provisions in Sec. Sec.
33.42(a) and (b) of the direction were designed to provide internal
agency guidance to Forest Service special use permit administrators and
authorized officers for their use in conducting inventories and in
making a determination as to who paid for utilities, access, and
facilities providing services to a lot. Some of those provisions
describe circumstances which the agency will consider as being prima
facie evidence for use by an authorized officer in determining who paid
for the capital costs of certain access, utilities, and facilities.
The final direction has been revised to more clearly articulate
this purpose.
33.7--Holder Notification of Accepted Appraisal Report and Right of
Second Appraisal. This section directed the authorized officer to
notify the affected holders when the Forest Service has accepted an
appraisal report and has determined a new base fee based on that
appraisal report.
Comment. A respondent suggested that the authorized officer should
be required to provide the holders with written justification for his/
her decision for accepting an appraisal report.
Response. The authorized officer, as stated in section 33.6, may
accept the estimated value of the typical lot or lots in the appraisal
for establishing a new base fee for that recreation residence lot or
lots. The justification for the decision is that the assigned review
appraiser has determined that the appraisal meets the required
standards and the value estimate is supported and approved. By law, the
authorized officer is required to calculate cabin user fees that
reflect the market value of a lot, including regional and local
economic influences. Market value incorporates those economic
influences. It would be redundant for the authorized officer to say
his/her justification for the decision (determining a new base fee) is
because he/she complied with law.
There were no changes made to this section in the final directive.
33.71b--Appraisal Guidelines. This section of the proposed
direction addressed the manner in which second appraisals may be
conducted.
Comment. One appraisal organization suggested wording to clarify
the intent of this section and to demonstrate why the recommended
procedure does not present an ethical conflict in the context of the
Uniform Standards of Professional Appraisal Practice (USPAP).
Response. The Forest Service agrees. Section 33.71b has been
rewritten to more clearly articulate its purpose and explain how the
procedure is in conformance with USPAP.
33.72--Reconsideration of Recreation Residence Fee. This section
provided direction for reconsidering a recreation residence base fee
following the authorized officer's receipt of reconsideration based on
the results of a second appraisal.
Comment. Many comments were received regarding the fact that this
section of the proposed direction failed to provide guidance to the
authorized officer on how a final base fee will be established in cases
where a second appraisal might be materially different from the first
appraisal. Respondents suggested that it may not be appropriate to, as
the proposed direction stated, establish a base fee from within the
range of values established by the first and second appraisals,
particularly if one of the appraisals was poorly done. For the same
reason, many who commented were concerned that this provision in the
proposed direction might lead authorized officers to simply average the
first and second appraisals, to arrive at an average between the two in
establishing a new base fee, a practice which might also be
inappropriate if one or both of the two appraisals were poorly done.
Response. The language in this section of the proposed direction is
nearly verbatim to the language provided in section 610(d) of CUFFA
concerning the establishment of a new base fee pursuant to the results
of a first and second appraisal. The comments suggest that the Forest
Service direction restrict or qualify the manner in which the
authorized officer may exercise discretion to establish a new base fee
in an amount that is equal to the base fee established by the initial
or the second appraisal, or is within the range of values, if any,
between the initial and second appraisals. The Forest Service
disagrees. The agency believes that this
[[Page 16629]]
discretion is necessary, and yet is adequately prescriptive to assure
an acceptable degree of consistency by authorized officers in
exercising it on a case specific basis.
Regarding comments concerning the inappropriateness of the use of
appraisals that are ``poorly done,'' the Forest Service notes that any
appraisal that is presented to an authorized officer for consideration
in the establishment of a cabin user fee must, pursuant to agency
direction, first be reviewed by a Forest Service Qualified Review
Appraiser. The Qualified Review Appraiser determines whether the
appraisal has been conducted, and the appraisal report has been
prepared, in a manner consistent with Federal and agency standards, and
in the case of recreation residence lot appraisals, consistent with the
appraisal guidelines for recreation residence lots in existence at the
time that the appraisal was conducted. Only when a Forest Service
Qualified Review Appraiser conducts a review and makes a determination
that the appraisal is acceptable for agency use, is it declared
acceptable for use in determining a recreation residence fee. The same
review standards will be applied to any second appraisal. Therefore, if
the term ``poorly done'' equates to not having met established Federal
and agency standards and specifications for conducting appraisals and
writing appraisal reports, then it is likely that the appraisal would
never be approved for agency use and would, therefore, not be used by
the authorized officer as either a first appraisal or a second
appraisal in establishing a cabin user fee.
33.8--Establishing a Recreation Residence Lot Value During the
Transition Period of the Cabin User Fee Fairness Act. This section of
the proposed direction addressed the manner in which a base cabin user
fee would be established upon adoption of the final regulations,
policies, and appraisal guidelines pursuant to CUFFA. It identified
that one of three options to be used in establishing a base cabin user
fee during the transition period: (1) Conduct a new appraisal pursuant
to these final regulations, policies, and appraisal guidelines; (2)
Commission a peer review of an existing appraisal that had been
completed after September 30, 1995; or (3) Establish a new base fee
using the market value of the typical lot that has been identified in
an existing appraisal that was completed and approved after September
30, 1995.
Comment. Some who responded to this section of the proposed
direction suggested that permit holders should also be provided with a
fourth option, one that would give the holders an opportunity, after
the completion of either a new appraisal (option 1) or a peer review
(option 2), to request a second appraisal, in accordance with the
provisions for second appraisals as described in Sec. 33.7.
Response. The Forest Service disagrees with those who interpreted
CUFFA in this manner. The three options identified in section 33.8 of
the proposed direction were intended to reflect the provisions of
section 614 of CUFFA, which clearly provides that during the transition
period, these are the only three means by which a new base cabin user
fee may be established for permits for those lots which were appraised
on or after September 30, 1995, but before October 11, 2000 (the date
of enactment of CUFFA). Typical lots representing almost every
recreation residence lot in the entire National Forest System were
appraised between these two dates. The only part of section 614 of
CUFFA that provides holders with the opportunity to seek a second
appraisal is found in section 614(b)(1)(B), where it speaks to the
right of a cabin owner to a second appraisal under section 610 of
CUFFA. Section 610, however, only applies to lots which, at the time of
enactment of CUFFA, had not been appraised after September 30, 1995. As
stated above, typical lots representing almost every recreation
residence lot in all of the National Forest System had been appraised
between September 30, 1995 and the date of enactment of CUFFA (October
11, 2000). Section 610 of CUFFA, which provides for the right of a
second appraisal, is interpreted by the Forest Service to apply to
those lots which were not appraised between September 30, 1995 and
October 11, 2000, but instead may have been appraised since October 11,
2000. There are only rare instances in which this has occurred. The
provisions of section 610 of CUFFA, and as expanded upon in section
33.7 of the final policy direction concerning the right of a permit
holder to a second appraisal will, of course, also apply to any and all
appraisals of typical lots in the next regularly scheduled appraisal
cycle, which will begin as early as 2006. The right of a second
appraisal will not apply to the establishment of a new base cabin user
fee during the transition period, as that period is defined in section
614 of CUFFA and in Sec. 33.8 of the final policy direction.
The direction in Sec. 33.8 has been revised in the final directive
to make it clear that the options described in paragraphs 1 through 3,
and explained in further detail in Sec. 33.81 through 33.83, are the
only means by which a new base cabin user fee is established during the
transition period for those lots which were appraised between September
30, 1995 and October 11, 2000. Holders who request a new appraisal or
the commissioning of a peer review will not have the right to request a
second appraisal as provided for in section 33.7.
33.83--Requests for Peer Review Conducted Under Regulations. This
section of the proposed direction addressed the manner in which peer
reviews may be requested, conducted, and used.
Comment. One appraisal organization requested that the Department
provide immunity or indemnification for its role in facilitating a peer
review.
Response. The Forest Service consulted with the Office of the
General Counsel and was advised that the government has no authority to
provide either immunity or indemnification to the appraisal
organization as requested. The Forest Service and Office of the General
Counsel consulted with the appraisal organization staff and counsel to
discuss alternatives the organization could take absent government
immunity or indemnification. The appraisal organization agreed to
pursue alternative means to address concerns about potential liability
of its members.
There were no changes made to this section in the final directive.
Comment. Two appraisal organizations suggested wording to clarify
the type of review intended in section 33.83.
Response. The Forest Service agrees. Section 33.83 will be
rewritten to more clearly articulate its purpose and identify the type
of review contemplated in conformance with Uniform Standards of
Professional Appraisal Practice (USPAP).
Comment. Some who responded to this section of the proposed
direction suggested that one of the products of a peer review is to
recommend that the appraisal being reviewed is so seriously flawed that
it be discarded for use.
Response. The Forest Service disagrees with these comments.
Paragraphs ``a'' and ``b'' in section 33.83 of the proposed direction
identified actions that will be taken, or could be taken, as a result
of the findings of a peer review. They identified that when a peer
review results in a finding that the appraisal being reviewed was not
conducted in a manner consistent with the regulations, policies, and
appraisal guidelines, the authorized officer shall either establish a
new base fee that reflects consistency with CUFFA
[[Page 16630]]
regulations, policies, and appraisal guidelines, or provide the
opportunity for the holders to request a new appraisal, in accordance
with the provisions of CUFFA and these regulations, policies, and
appraisal guidelines. If a new appraisal is requested and conducted, it
would replace the existing appraisal and be used as the basis for
establishing a new base cabin user fee. The Forest Service believes
that these provisions in the proposed direction are consistent with the
provisions for conducting and utilizing a peer review identified in
section 614(c)(4) of CUFFA.
Comment. Some respondents suggested that one of the purposes or
outcomes of the peer review should be to allow peers to recommend that
the appraisal being reviewed be thrown out as just an incompetent
appraisal. The provisions at Sec. 33.83 don't provide for that, and
instead identify that the results of the peer review are only to
determine whether the appraisal was conducted in a manner consistent
with regulations, policies, or the appraisal guidelines being adopted
pursuant to CUFFA.
Response. The two situations described above are not in conflict.
If a peer review results in a determination that the appraisal was not
conducted in a manner consistent with the regulations, policies, and
appraisal guidelines pursuant to CUFFA, the authorized officer shall
either establish a new base fee to reflect consistency with the
regulations, policies, and appraisal guidelines or conduct a new
appraisal. Either of these options has the practical effect of
``throwing out'' the original appraisal because it is no longer the
basis for the fee determination.
Comment. Many comments were received concerning those provisions
which outlined the manner in which a peer review will be conducted, and
that it will be based upon the membership in a professional appraisal
organization of the appraiser who conducted the appraisal being
reviewed. The direction went on to identify criteria for identifying
the assignment of an appraiser to conduct the peer review and whether
the appraiser who conducted the appraisal being reviewed was or was not
a member of one or more appraisal sponsor organizations of The
Appraisal Foundation. Those who commented on these criteria said that
this constitutes a bias in favor of The Appraisal Foundation, and that
given the history of the role of The Appraisal Foundation in the
creation of CUFFA, there is no reason in preferring The Appraisal
Foundation over any other appraisal organization.
Response. The Appraisal Foundation has no individual appraiser
members, only sponsor organization members. Therefore, no appraisal may
be referred to TAF for peer review.
There were no revisions made to this section.
Forest Service Handbook 5409.12--Appraisal Handbook
Chapter 60--Appraisal Contracting
Section 66, Exhibit 03--Required Specifications for Appraisal of
Recreation Residence. This section containing exhibits 06 and 07 was
coded in a single digit coding scheme when published for notice and
comment. The section is now coded in a two digit coding scheme (sec.
66) to conform it to the other sections in FSH 5409.12, chapter 60,
which were revised on February 23, 2005. The exhibits for recreation
residences are now enumerated as exhibit 03 (previously exhibit 06) and
exhibit 04 (previously exhibit 07) respectively.
This section contained the technical appraisal provisions and
guidelines enumerated in section 606 of CUFFA. More than 1,500 comments
were received addressing various provisions of the proposed appraisal
specifications. Approximately 400 comments addressing specific sections
of exhibit 06 were submitted via a fill-in-the-blank standard form.
Each of those issues raised on the standard form are addressed in the
order in which the subject of those comments appears in the appraisal
specifications in exhibit 06.
General Comment on Exhibit 03
Comment. There are inconsistencies in definitions and the use of
language throughout the specifications, and they will invite problems
in the future. The language should mirror CUFFA and there should be no
repetitions.
Response. The specifications were developed to incorporate
direction found in CUFFA and mirror the language found there. However,
there are areas where either CUFFA was silent on a particular aspect of
the appraisal process or additional clarification and direction were
necessary. These specifications were developed to be as clear and
concise as possible, yet provide consistent guidance for appraisers
preparing recreation residence lot appraisals. If the purpose of agency
rule making and developing agency direction and guidelines were to
simply repeat statutory language, then it would serve no purpose at
all. Doing so would only establish unclear and ambiguous rules,
policies, and guidelines, adding confusion and frustration to the
appraisal process. Therefore, where some of the language in CUFFA may
be subject to varying interpretations or applications, the department's
rules and the agency's directives and guidelines serve to further
refine and define that language as needed to preclude inconsistency in
exercising CUFFA's direction and authority.
Section C-2.1(e) of Section 66, Exhibit 03. This section required
that upon request by the government, during the 2-year period following
the date of the appraisal report, the Contractor will update the value
as of a specified date.
Comment. Those who commented suggested that the value of the
typical lot being appraised should be as of the date of the inspection
of that typical lot and it should not change for 2 years. The comments
suggested that CUFFA does not provide for this.
Response. CUFFA is silent regarding the need for an update within a
specified period of time. Generally, the date of value will remain
constant. However, there may be a need to retain this option to
accommodate unforeseen circumstances. For example, if there is severe
timber blow down, fire, or flood, it may be necessary to reappraise the
typical lot affected by the natural disaster to recalculate the fee if
a decision is made to reauthorize the permit. If this occurs, the date
of value may change to reflect the negative impact of the natural
disaster upon the permitted lot.
There were no changes made to this section.
Section C-2.1(g) of Section 66, Exhibit 03. This section references
appropriate places to find the definitions of terms.
Comment. Those who commented on this section suggested that the
language in CUFFA should be included here, as an additional reference
for definitions.
Response. The Forest Service agrees. Section C-2.1(g) will be
modified to read, ``Unless specifically defined herein or in CUFFA
Section 604, USPAP, or UASFLA, definitions of all terms are the same as
those found in ``The Dictionary of Real Estate Appraisal'' (Appraisal
Institute), current edition. UASFLA shall take precedence in any
differences among definitions.''
Section C-2.2(b)(1) of Section 66, Exhibit 03. Item 7 in
this section contained the language ``the adoption of an uninstructed
assumption or hypothetical condition that results in other than `as is'
market value will invalidate the appraisal.''
Comment. This language is unnecessary because the appropriate
prohibitions are already part of the
[[Page 16631]]
appraisal requirements in USPAP and this statement does nothing other
than confuse the appraiser.
Response. The Forest Service disagrees. USPAP allows the appraiser
the latitude to incorporate extraordinary assumptions and/or
hypothetical conditions into the report, as long as it does not produce
a misleading result. This is a different scenario than an ``as is''
market value. Most recreation residence lots cannot be valued in an
``as is'' state because of permit holder provided improvements made to
the lot and direction provided in CUFFA.
There were no changes made to this section.
Section C-2.2(b)(2)(3)(b) of Section 66, Exhibit 03. This section
referenced a ``Neighborhood Map.''
Comment. Use of the term ``neighborhood'' should be avoided, and in
its place, the term ``tract'' should be used. Use of the term
``neighborhood'' leaves the impression that recreation residence tracts
are subdivisions, which perpetuates errors in the selection of
comparable sales. This would be inconsistent with section
606(b)(1)(B)(ii) of CUFFA, which specifically states that a ``* * *
typical lot will not usually be equivalent to a legally subdivided
lot.''
Response. The Forest Service partially agrees. The ``neighborhood
map'' is intended to depict the tract and the surrounding area in order
to provide the user of the appraisal report with perspective of the
property around the recreation residence tract, including major
geographic features, proximity to other uses, water features, access,
and general services. Use of the term ``tract'' would limit this over-
view of the area to only the tract, and would not provide a ``picture''
of the surrounding area. The term ``neighborhood'' has generally been
replaced by ``market area'' which is defined in ``The Dictionary of
Real Estate Appraisal,'' current edition, as ``the geographic or
locational delineation of the market for a specific category of real
estate, i.e., the area in which alternative, similar properties
effectively compete with the subject property in the minds of probable,
potential purchasers and users.'' References to ``neighborhood'' will
be replaced by ``market area.''
Section C-2.2(b)(2)(4)(a) of Section 66, Exhibit 03. This section
referred to timber and commercial value for mineral deposits in
appraisals.
Comment. CUFFA does not allow the Forest Service to establish a
cabin user fee based upon the value of the timber and minerals on a
recreation residence lot. The inclusion of these factors will likely
lead to confusion among appraisers. This section should reference
``timber'' as ``trees,'' and should eliminate all reference to mineral
values.
Response. The Forest Service disagrees. Timber, minerals, and other
resources are elements of value that have potential to impact the value
concluded for an appraised property. The Forest Service appraisal
guidelines confine the highest and best use analysis to use as a
recreation site. The above-referenced property characteristics can only
be reflected in the value opinion as they contribute to the property's
highest and best use; a lot suitable for use as a recreation residence
site.
There were no changes made to this section of exhibit 03.
Section C-2.2(b)(2)(4)(e) of Section 66, Exhibit 03. This section
required the appraiser to cite a ten-year record of the sales of the
appraised property.
Comment. This is directly contrary to the terms of CUFFA and will
mislead appraisers. The sale of the cabin on the typical lot is not the
same as the market value of the typical lot, and should not be used in
establishing the appraised value of a typical lot. It has no bearing on
determining the appraised value of a recreation residence lot.
Response. The cited section specifically states, ``include a ten-
year record of all sales of the appraised property * * *''. The
appraised property is the lot owned by the United States. The ``actual
cabin'' is not owned by the United States and is not the subject of the
appraisal. The appraiser is not required to cite the sale of the
``actual cabin.''
There were no changes made to this section of exhibit 03.
Section C-2.2(b)(2)(4)(f) of Section 66, Exhibit 03. This section
referred to the highest and best use of the lot.
Comment. Highest and best use should not be addressed in this part
of the appraisal specifications. A subsequent definition of ``highest
and best use'' correctly defines it as a recreation residence use, so
why have it in this part of the specifications.
Response. Section C-2.2(b)(2)(4)(f) discusses ``Zoning and Other
Land-Use Restrictions.'' It is important to provide instruction to the
appraiser indicating how these restrictions are to be considered, in
order to ensure consistency. The Analysis of Highest and Best Use
section follows immediately below the cited section and properly
restricts the appraiser's consideration of highest and best use to the
appraised property's suitability use as a recreation residence lot.
There were no changes made to this section of exhibit 03.
4. Regulatory Certifications
Environmental Impact
These directives revise the administrative procedures for
determining market value for recreation residences on National Forest
System lands. Section 31.1b of Forest Service Handbook (FSH) 1909.15
(57 FR 43180, September 18, 1992) excludes from documentation in an
environmental assessment or impact statement ``rules, regulations, or
policies to establish Service-wide administrative procedures, program
processes, or instructions.'' The agency's preliminary assessment is
that these final directives fall within this category of actions and
that no extraordinary circumstances exist which would require
preparation of an environmental assessment or environmental impact
statement.
Regulatory Impact
These final directives have been reviewed under USDA procedures and
Executive Order 12866 on Regulatory Planning and Review. OMB has
determined that this is not a significant action. The final directives
would not have an annual effect of $100 million or more on the economy,
or adversely affect productivity, competition, jobs, the environment,
public health or safety, or State or local governments. The final
directives would not interfere with an action taken or planned by
another agency, or raise new legal or direction issues. Finally, these
final directives would not alter the budgetary impacts of entitlements,
grants, or loan programs or the rights and obligations of recipients of
these programs.
No Takings Implications
These final directives have been analyzed in accordance with the
principles and criteria contained in Executive Order 12630. It has been
determined that the final directives do not pose the risk of a taking
of protected private property.
Civil Justice Reform
These final directives have been reviewed under Executive Order
12988, ``Civil Justice Reform''. After adoption of these final
directives, (a) all State and local laws and regulations that conflict
with these final directives or that would impede full implementation
will be preempted; (2) no retroactive effect would be given to these
final directives; and (3) the Department will not require the use of
administrative proceedings before parties may file suit in court
challenging their provisions.
[[Page 16632]]
Unfunded Mandates
Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2
U.S.C. 1531-1538), which the President signed into law on March 22,
1995, the agency has assessed the effects of these final directives on
State, local, and tribal governments and the private sector. These
final directives would not compel the expenditure of $100 million or
more by any State, local, or tribal government or anyone in the private
sector. Therefore, a statement under section 202 of the act is not
required.
Federalism and Consultation and Coordination With Indian Tribal
Governments
The agency has considered these final directives under the
requirements of Executive Order 13132 on federalism, and has made an
assessment that the final directives conform with the federalism
principles set out in this Executive order; would not impose any
compliance costs on the States; and would not have substantial direct
effects on the States, on the relationship between the Federal
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, the
agency has determined that no further assessment of federalism
implications is necessary at this time.
Moreover, these final directives do not have tribal implications as
defined by Executive Order 13175, ``Consultation and Coordination with
Indian Tribal Governments'', and, therefore, advance consultation with
tribes is not required.
Energy Effects
These final directives have been reviewed under Executive Order
13211 of May 18, 2001, ``Actions Concerning Regulations That
Significantly Affect Energy Supply.'' It has been determined that these
final directives do not constitute a significant energy action as
defined in the Executive order.
Controlling Paperwork Burdens on the Public
The information collection associated with the permitting and
administration of recreation residences are covered under the approved
Office of Management and Budget (OMB) control number 0596-0082.
However, as provided by Section 614 of the Cabin User Fee Fairness Act
of 2000 ((CUFFA) 16 U.S.C. 6210-13) the final directive does contain a
new one-time information collection requirement in FSH 2709.11,
Sec. Sec. 33.8 through 33.83. Accordingly, the review provisions of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and its
implementing regulations at 5 CFR part 1320 do apply. Approval of this
information collection requirement has been submitted for approval to
the OMB. The agency expects the new information collection requirement
required by CUFFA to be approved by OMB prior to implementation of the
provisions in sections 33.8-33.83.
Dated: January 4, 2006.
Dale N. Bosworth,
Chief.
5. Text of Final Directives
Note: The Forest Service organizes its Directive System by
alphanumeric codes and subject headings. Only those sections of the
Forest Service Manual and Handbook that are the subject of this
notice are set out here. The intended audience for this direction is
Forest Service employees charged with issuing and administering
recreation residence special use authorizations.
Forest Service Manual
Chapter 2340--Privately Provided Recreation Opportunities
2340.5--Definitions.
* * * * *
Caretaker Cabin. A residence that is authorized in limited cases to
provide caretaker services and security to a recreation residence
tract.
* * * * *
2347.1--Recreation Residences. (For further direction, see FSM
2721.23 and FSH 2709.11.) Recreation residences are a valid use of
National Forest System lands. They provide a unique recreation
experience to a large number of owners of recreation residences, their
families, and guests. To the maximum extent practicable, the recreation
residence program shall be managed to preserve the opportunity it
provides for individual and family-oriented recreation. It is Forest
Service direction to continue recreation residence use and to work in
partnership with holders of these permits to maximize the recreational
benefits of recreation residences.
* * * * *
7. Authorize community- or association-owned and maintained
improvements under a separate permit and authority appropriate for that
use (see FSH 2709.11, sec. 33.05, definition of ``related
improvements'' and FSM 2721.23c, para. 3.)
* * * * *
2347.12--Caretaker Cabins.
2347.12a--Permits.
1. Authorize caretaker cabin use of a recreation residence lot with
an annual permit, Form FS-2700-4, under the Organic Act (16 U.S.C.
551). Require applicants who have a recreation residence permit (Form
FS-2700-5a) to relinquish that permit as a condition of qualifying for
a caretaker cabin permit. A caretaker cabin may be owned by a tract
association, and the permit may be issued in the name of the head of
that association.
2. Coordinate applications for caretaker cabin permits with local
governmental agencies to avoid creating unreasonable demands for public
services such as snow plowing, mail delivery, garbage pickup, school
bus services, or emergency services.
3. If a recreation residence ceases to be used as a caretaker
cabin, the holder of the caretaker cabin permit may apply for and, if
qualified, be issued a recreation residence permit.
2347.12b--Caretaker Cabin Use. The need for a caretaker cabin can
rarely be justified where yearlong occupancy is already authorized in
the tract. The Forest Supervisor may authorize a caretaker cabin in
limited cases where it is demonstrated that caretaker services are
needed for the security of a recreation residence tract and alternative
security measures are not feasible or reasonably available. The base
cabin user fee for a caretaker cabin permit shall not exceed the base
cabin user fee charged for the use of the lot as a recreation
residence. That fee shall be determined as follows:
1. The base cabin user fee for a caretaker cabin located in a
recreation residence tract shall not exceed the base cabin user fee for
a similar typical lot in that tract (see FSH 2709.11, section 30.05,
for definitions of ``base cabin user fee'' and ``typical lot'').
2. When a caretaker cabin is not located in a recreation residence
tract, the base cabin user fee for the caretaker cabin shall not exceed
the base cabin user fee for a similar typical lot in the recreation
residence tract being monitored by the caretaker cabin permit holder
(see FSH 2709.11, section 30.05, for definitions of ``base cabin user
fee'' and ``typical lot'').
* * * * *
Chapter 2720--Special Uses Administration
* * * * *
2721.23--Recreation Residences.
* * * * *
2721.23d--Fee Determination.
1. Use market value as determined by appraisal in determining the
base annual fees for recreation residence lots. Determine a new base
fee at 10-year intervals.
[[Page 16633]]
Forest Service Handbook (FSH) 2709.11--Special Uses Handbook
Chapter 30--Fee Determination
* * * * *
33--Recreation Residence Lot Fees. Recreation residence lot fees
shall be assessed and paid annually.
33.05--Definitions.
Cabin. A privately built and owned recreation residence that is
authorized to use and occupy National Forest System land.
Majority. More than 50 percent.
Market Value. The amount in cash, or on terms reasonably equivalent
to cash, for which in all probability the property would have sold on
the effective date of the appraisal, after a reasonable exposure time
on the open competitive market, from a willing and reasonably
knowledgeable seller to a willing and reasonably knowledgeable buyer,
with neither acting under any compulsion to buy or sell, giving due
consideration to all available economic uses of the property at the
time of the appraisal.
Natural, Native State. The condition of a lot or site, free of any
improvements, at the time at which the lot or site was first authorized
for recreation residence use by the Forest Service.
Recreation Residence. A privately owned, noncommercial residence
located upon National Forest System lands and authorized by a
recreation residence term special use permit. A recreation residence is
maintained by the permit holder for personal, family, and guest use and
enjoyment. A recreation residence shall not serve as a permanent
residence.
Recreation residence lot. (For this definition, see 36 CFR 251.51.)
Related Improvements.
a. For the purpose of defining a recreation residence lot (36 CFR
251.51), ``related improvements'' include not only the examples of
facilities and uses owned and maintained by the holder identified at 36
CFR 251.51, but may also include, but are not limited to, the following
holder owned facilities or uses of National Forest System lands being
actively operated and maintained by the holder in conjunction with the
recreation residence use:
(1) Outbuildings;
(2) Wood piles;
(3) Retaining walls;
(4) Picnic tables;
(5) Driveways and parking areas;
(6) Trails and boardwalks;
(7) Campfire rings, seats, and benches.
(8) Lawns, gardens, flower beds, and landscaped terraces;
(9) Manipulated native vegetation, except as provided for in
paragraph b(1).
b. Related improvements do not include:
(1) Native vegetation that is manipulated for the primary purpose
of protecting property and mitigating safety concerns, such as the
removal of hazard trees, and the treatment/management of vegetation,
approved by the authorized officer, to reduce fuel loading and to
create defensible space for wildfire suppression purposes.
(2) Tract association- or community-owned improvements or uses,
such as boat docks, swimming areas, and water or sewer systems that are
under a separate authorization issued in the name of a tract
association or other entity representing the owners of the recreation
residences.
Term Permit. (For this definition, see 36 CFR 251.51 and FSM 2705.)
Tract. An established location within a National Forest containing
one or more cabins authorized in accordance with the recreation
residence program.
Typical Lot. A recreation residence lot in a tract that is selected
for appraisal purposes as being representative of value characteristics
similar to other recreation residence lots within the tract. All
recreation residence lots represented by a typical lot shall be
characterized as a group for appraisal purposes. A tract may have one
or more groups of lots, with each group represented by a typical lot. A
typical lot may be the only recreation residence lot in a group, and
may be appraised to represent only itself, when it has unique value
characteristics unlike any other recreation residence lot in a tract.
Urban. A mature neighborhood with a concentration of population
typically found within city limits or a neighborhood commonly
identified with a city (The Dictionary of Real Estate Appraisal, Fourth
Edition).
33.1--Base Fees and Annual Adjustments.
33.11--Establishing New Base Fee.
1. Base Fee. The base fee for a recreation residence special use
permit shall be equal to 5 percent of the market value of the
recreation residence lot as determined by appraisal. The base fee shall
be recalculated at least once every 10 years.
2. Notification of New Base Fee. The authorized officer shall
notify the holder in writing at least one (1) year in advance of
implementation that a new base fee has been determined by appraisal
conducted in accordance with procedures contained in section 33.4 of
this Handbook. If a second appraisal, secured by the holder (sec. 33.7)
and approved by the agency, prompts the authorized officer to
reconsider the new base fee amount, the revision to the base fee may be
implemented at any time after the end of the one-year period following
the initial notification.
3. Effective Date of New Base Fee. The date of a billing for
payment of a new base fee, or the date of a billing for the first
payment of a phase-in amount (sec. 33.12) of a new base fee, shall
constitute the date of implementation of the new base fee.
33.12--Phase-in of Base Fee. Require the holder to pay the full
amount of a new base fee if that new base fee results in an increase of
100 percent or less from the amount of the most recent annual fee
assessed the holder.
When the new base fee is greater than a 100 percent increase from
the amount of the most recent annual fee assessed the holder, implement
the new base fee increase in three (3) equal increments over a 3-year
period. Annual adjustments (sec. 33.13) shall be included in the
calculation of fees that are incrementally phased-in over the 3-year
period. Exhibit 01 illustrates the manner in which a new base fee would
be phased-in when the new base fee results in an increase of more than
100 percent from the most recent annual fee assessed the holder.
33.12--Exhibit 01.
Phase-in When New Base Fee Results in an Increase of More Than 100
Percent From the Most Recent Annual Fee Assessed the Holder
------------------------------------------------------------------------
2008 New base
2007 Fee amount fee Increase
------------------------------------------------------------------------
$700 $1,600 $900 (>100%
increase).
------------------------------------------------------------------------
2008 Phase-in Fee: $700 (2007 fee) + $300 (\1/3\ of fee increase >100%)
= $1,000.
2004 Phase-in Fee: $1,000 (2008 fee) + $300 (\1/3\ of fee increase
>100%) x 1.03* (annual IPD-GNP increase of 3%) = $1,339.
[[Page 16634]]
2010 Phase-in Fee: $1,339 (2009 fee) + $300 (\1/3\ of fee increase
>100%) x 1.03* (annual IPD-GNP increase of 3%) = $1,688.
2011 Phase-in Fee: $1,688 (2010 fee) x 1.03* (annual IPD-GNP increase of
3%) = $1,739.
------------------------------------------------------------------------
* 3% annual IPD-GNP adjustment is used for illustrative purposes only.
The actual annual IPD-GNP rate would be used for each of the phase-in
amounts in years 2009 through 2011.
33.13--Annual Adjustment of Recreation Residence Fee. Recreation
residence fees shall be adjusted annually using the 2nd quarter to 2nd
quarter change in the Implicit Price Deflator, Gross National Product
(IPD-GNP).
An annual adjustment to the base fee shall be no more than 5
percent in any single year. When the annual change to the IPD-GNP
results in an annual adjustment of more than 5 percent, apply the
amount of the adjustment in excess of 5 percent to the annual fee
payment for the next year in which the change in the index factor is
less than 5 percent. Exhibit 01 provides two examples on how annual
fees are adjusted in years during which the annual change in the IPD-
GNP index exceeds 5 percent.
33.13--Exhibit 01.
Phase-in of Fees When Increase Exceeds 5 Percent in a Single Year
EXAMPLE 1--Only 1 year in which the IPD-GNP adjustment exceeds 5%:
2007 Fee = $700
2008 IPD-GNP adjustment = 7%*
($700 x .07 = $49)
Maximum adjustment/year = 5% ($35)
2008 carryover adjustment = 2% ($14)
2008 Fee = $700 (2004 fee) x .05 (max. adj/yr.) = $735
2009 IPD-GNP adjustment = 3%*
Carryover adjustment from 2008 = $14
2009 Fee = $735 (2008 fee) + $14 (2008 carryover) x 1.03 = $771
EXAMPLE 2--Multiple-year IPD-GNP adjustments exceeding 5%.
2007 Fee = $700
2008 IPD-GNP adjustment = 7%*
($700 x .07 = $49)
Maximum adjustment/year = 5% ($35)
2008 carryover adjustment = 2% ($14)
2008 Fee = $700 (2007 fee) x 1.05 (max. adj/yr.) = $735
2009 IPD-GNP adjustment = 7%*
($735 x .07 = $51)
Maximum adjustment/year = 5% ($37)
2009 carryover adjustment = 2% ($14)
Total carryover (2008 & 2009) = $28
2009 Fee = $735 (2008 fee) x 1.05 (max. adj/yr.) = $772
2010 IPD-GNP adjustment = 3%* (< max. adj/yr.)
Total 2009 & 2010 carryover = $28
2010 Fee = $772 (2009 fee) + $28 (2008 & 2009 carryover) x 1.03 =
$824
------------------------------------------------------------------------
* Annual IPD-GNP adjustments used are for illustrative purposes only.
33.2--Fees When Determination Is Made To Place Recreation Residence
on Tenure.
A recreation residence use is placed on ``tenure'' when the
authorized officer notifies the holder of the officer's decision to
discontinue the use of the lot for recreation residence purposes and to
convert the use of the recreation residence lot to some alternative
public purpose. When a decision is made to discontinue the recreation
use, the authorized officer shall provide the holder a minimum of 10
years notice prior to the date of converting the use and occupancy to
an alternative public purpose. If the holder's 20-year term special use
permit expires during that 10-year period, a new annual special use
permit shall be issued with an expiration date that coincides with the
specified date for converting the recreation residence lot to an
alternative public purpose.
When a recreation residence use has been put on tenure, the fee for
the tenth year prior to the date of converting the recreation residence
use to an alternative public use becomes the base fee for the remaining
life of the use. The fee for each year during the last 10 years of the
authorization shall be one-tenth of the base fee multiplied by the
number of years remaining prior to the date of conversion. For example,
charge a holder with 9 years remaining, 90 percent of the base fee;
with 8 years, 80 percent; and so forth. Do not apply annual adjustments
to fees when a recreation residence has been put on tenure notice.
Exhibit 01 provides a schedule to calculate the holder's fee during the
10-year period.
33.2--Exhibit 01.
Phase-in of Fees When Determination Is Made To Place Recreation
Residence on Tenure
------------------------------------------------------------------------
Percent of
Years remaining prior to date of conversion base fee to
charge
------------------------------------------------------------------------
10...................................................... 100
[[Page 16635]]
9....................................................... 90
8....................................................... 80
7....................................................... 70
6....................................................... 60
5....................................................... 50
4....................................................... 40
3....................................................... 30
2....................................................... 20
1....................................................... 10
------------------------------------------------------------------------
Use one of the following fee determination procedures when a review
of a decision to convert the recreation residence lot to an alternative
public use shows that changed conditions warrant continuation of the
recreation residence use beyond the determined date of conversion:
1. If a new 20-year term permit is issued, recover the amount of
fees forgone while the previous permit was under notice that the
recreation residence lot would be converted to an alternative public
purpose. Collect this amount evenly over a 10-year period in addition
to the annual fee due under the new permit. The obligation runs with
the recreation residence lot and shall be charged to any subsequent
purchaser of the recreation residence. The annual fee under the newly
issued 20-year permit shall be the annually-indexed fee computed as
though no limit on tenure had existed, plus the amount as specified in
this paragraph until paid in full.
2. Do not recover past fees when a 20-year term permit is not
issued and the occupancy of the recreation residence lot will be
authorized for less than 10 years past the originally identified date
of conversion. Determine the fee for a new permit in these situations
by computing the fee as if notice that a new permit would not be issued
had not been given, reduced by the appropriate percentage for the
number of years of the extension. For example, a new permit with a 6-
year tenure period results in a fee equal to 60 percent of the base
fee.
3. When a 20-year term permit is not issued, and the occupancy of
the subject recreation residence lot will be allowed to continue for
more than 10 years, but less than 20 years, recover fees as outlined in
the preceding paragraph 1, computed for the most recent 10-year period
in which the term of the permit was limited.
33.3--Fee When Recreation Residence Use Is Terminated or Revoked as
Result of Acts of God or Other Catastrophic Events.
When the authorized officer determines that the recreation
residence lot cannot be safely occupied because of an act of God or
other catastrophic event, the fee obligation of the recreation
residence owner shall terminate effective on the date of the occurrence
of the act or event.
A prorated portion of the annual fee, reflecting the remainder of
the current billing period from the date of the occurrence of the act
or event, shall be refunded to the holder. In the event that the holder
is authorized to occupy an in-lieu lot (sec. 41.23d), the refund amount
may instead be credited to the annual fee identified in a new permit
for the in-lieu lot.
33.4--Establishing the Market Value of Recreation Residence Lot.
The market value of a recreation residence lot shall be established
by appraisal (FSH 5409.12, ch. 60).
1. Appraisals shall be conducted and prepared by a private contract
appraiser who is licensed to practice in the State within which the
recreation residence lot or lots to be appraised are located. Select
private contract appraisers who have adequate training through
professional appraisal organizations and who have satisfactorily
completed the basic courses necessary to demonstrate competence for the
appraisal assignment. Require appraisers to sign an Assignment
Agreement (FSH 5409.12, sec. 66, ex.04). The appraisal must evaluate
the market value of the fee simple estate of the National Forest System
land underlying the typical lot or lots in a natural native state.
However, access, utilities, and facilities that service a typical lot
and which have been determined by the authorized officer to have been
paid for or provided by the Forest Service or a third party, shall be
included as features of the typical lot to be appraised (sec. 33.42).
Do not appraise individual recreation residence lots within a
grouping or tract. Appraise the typical lot or lots that have been
selected from within a group of recreation residence lots that all have
essentially the same or similar value characteristics, pursuant to the
direction in section 33.41. The authorized officer may make adjustments
for measurable value differences among recreation residence lots within
a grouping based upon the advice of the assigned Forest Service review
appraiser.
2. The appraiser shall conduct and prepare the appraisal in
compliance with:
a. The edition of the Uniform Standards of Professional Appraisal
Practice (USPAP) in effect on the date of the appraisal;
b. The edition of the ``Uniform Appraisal Standards for Federal
Land Acquisitions'' in effect on the date of the appraisal;
c. The appraisal sections for recreation residence lots found in
the FSH 5409.12, section 66, exhibit 03; and
d. Any other case-specific appraisal guidelines provided to the
appraiser by the Forest Service.
3. The appraiser shall ensure that appraised values are based on
comparable market sales of sufficient quality and quantity. The
appraiser shall recognize that the typical lot will not usually be
equivalent to a legally subdivided lot.
The appraiser shall not select sales of land within developed urban
areas, and in most circumstances, should not select a sale of
comparable land that includes land that is encumbered by a conservation
easement or recreational easement held by a government or institution.
Sales of land encumbered by an easement may be used in situations in
which the comparable sale is a single home site and is sufficiently
comparable to the recreation residence lot or lots being appraised.
The appraiser shall also consider, and adjust as appropriate, the
prices of comparable sales for typical value influences, which include,
but are not limited to:
a. Differences in the locations of the parcels;
b. Accessibility, including limitations on access attributable to
weather, the condition of roads and trails, restrictions imposed by the
agency, and so forth;
c. The presence of marketable timber;
d. Limitations on, or the absence of services, such as law
enforcement, fire control, road maintenance, or snow plowing;
e. The condition and regulatory compliance of any lot improvements,
and
f. Any other typical value influences described in standard
appraisal literature.
4. When an appraisal of the market value of a recreation residence
lot in a tract is scheduled to occur, the authorized officer, or the
authorized representative, and the appraiser shall, with a minimum 30-
day written advance notice, arrange a meeting with the affected permit
holders and provide them with information concerning the pending
appraisal. At the meeting, holders shall be advised of the appraisal
process, the method of appraisal, and
[[Page 16636]]
selection of typical lots. Permit holders shall be afforded the
opportunity to meet the appraiser individually, or as a group,
concerning the selection of a typical lot or lots.
5. The appraiser shall provide the recreation residence permit
holders with a minimum 30-day advance written notice (certified mail,
return receipt requested) of the date and approximate time of the
recreation residence lot visit. Documentation of the notification shall
be included in the addenda of the appraisal report. At the recreation
residence lot meeting, permit holders shall be given the opportunity to
provide the appraiser with factual or market information pertinent to
the valuation of the typical lot or lots. This information must be
submitted in writing and shall be accounted for in the appraisal
report.
33.41--Selection and Appraisal of Typical Lot.
The appraiser shall appraise only the typical lot or lots selected
within a tract. Before an appraisal is initiated, the authorized
officer must make every effort to obtain the concurrence of the permit
holders concerning the composition of the group or groupings of lots,
which are essentially the same or which have similar economic value
characteristics, and the selection of a typical lot or lots. A
representative typical lot shall be identified as economically typical
of the recreation residence lots in each group. Exercise care in
identifying and selecting a typical lot that is economically
competitive with all of the recreation residence lots within the group
it represents. The selection process shall be documented in a permanent
case file for the tract.
With the advice of the appraiser, the authorized officer shall
determine the composition of the group or groupings of recreation
residence lots and the selection of a typical lot or lots when
concurrence with the holders cannot be achieved. The inability to
obtain concurrence with the holders on selection of the group or
grouping of recreation residence lots and the selection of a typical
lot or lots shall be documented and included in the permanent case file
for the tract.
When the inventory of facilities, utilities, and access servicing a
tract (sec. 33.42) suggest that all lots within a grouping are not
comparable to the typical lots representing that group with respect to
the facilities, utilities, and access servicing the typical lot, the
authorized officer may consider one of the following actions:
1. Establish a new grouping of lots having clearly different
attributes of access, utilities, and facilities servicing those lots
from those which have been inventoried and are servicing the typical
lot, and (a) identify with the holders a new typical lot to represent
that new grouping, (b) prepare a new permanent inventory of utilities,
access and facilities servicing that typical lot (sec. 33.42), and (c)
conduct a new appraisal of that typical lot pursuant to the provisions
of CUFFA. The Forest Service and the holder(s) shall pay equally for
the cost of the new appraisal;
2. Where feasible, assign lots having clearly different attributes
to another typical lot established in the tract which has attributes of
access, utilities, and facilities that are comparable to those lots.
3. Make adjustments to the base cabin user fee for those lots
having utilities, access, and facilities that are so different from the
attributes of the typical lot that it creates a measurable difference
in value.
33.42--Inventorying Utilities, Access, and Facilities.
The authorized officer is responsible for identifying, documenting,
and inventorying all utilities, access, and facilities that service
each of the typical lots within a recreation residence tract and
providing that information to the appraiser as part of the appraisal
assignment.
The inventory must include the authorized officer's determination
of who paid for the capital costs of those utilities, access, or
facilities. In doing so, the authorized officer shall presume that the
permit holder, or the holder's predecessor, paid for the capital costs
of the utility, access, or facility serving the typical lot, unless the
authorized officer can document that either the Forest Service or a
third party paid for those capital costs.
33.42a--Types of Utilities, Access, and Facilities To Include in
Inventories.
The types of utilities, access, and facilities that should be
inventoried for each typical lot include, but are not limited to:
1. Potable water systems;
2. Roads, trails, air strips, boat docks, and water routes used to
access the recreation residence lot or tract;
3. Waste disposal facilities; and
4. Utility lines, such as telephone lines, fiber optic cable,
electrical lines, and cable TV.
33.42b--Criteria To Be Considered in Determining Who Paid for
Capital Costs of Inventoried Utilities, Access, and Facilities.
It is the responsibility of the authorized officer to collect all
available evidence to be considered in determining whether each
inventoried utility, access, or utility was paid for by the cabin owner
(or a predecessor of the cabin owner), a third party, or the Forest
Service. In evaluating and considering the evidence, the authorized
officer shall be guided by the following criteria and principles:
1. Consider the capital costs of an inventoried utility, access, or
facility as having been paid by the cabin owner, or their predecessor,
when:
a. There is evidence of direct payment of the costs of materials
and installation by the cabin owner, or their predecessor;
b. There is evidence that the cabin owner or their predecessor was
assessed and paid a lump sum fee by the road agency, or utility or
service provider, for construction/installation of the inventoried
facility;
c. There is evidence that the cabin owner or their predecessor was
assessed and paid a temporary utility or tax surcharge, in addition to
other taxes, or the base rates and usage fees assessed to all of the
customers in the utility provider's rate base, as a means of paying the
capital costs of the inventoried utility, access, or facility;
d. There is evidence that some or all of a hook-up or tap fee
assessed to and paid by the cabin owner, or their predecessor, as a new
customer of the utility or service provider, was established to include
the recovery of capital costs to the utility or service provider for
installation of the inventoried utility or facility;
e. There is insufficient evidence to support any of the
circumstances described in the criteria identified under the following
paragraphs 2 through 4.
2. Consider the capital costs of an inventoried utility, access, or
facility as having been paid by a third party when there is evidence to
conclude:
a. An entity, such as for-profit utility company (electric company,
telephone company, cable television provider, etc.), a not-for-profit
cooperative, a water or sewer district, a municipality, and so forth,
installed a utility service or facility; that the corresponding service
to the subject lot was provided without any lump sum or surcharge to
base rates or usage fees assessed to the cabin owner or their
predecessor; and that any hook-up fees or tap fees that may have been
assessed to the cabin owner, or their predecessor, were not established
with the intent to recover the utility company or provider's capital
costs in the inventoried utility, access, or facility.
b. Roads providing access were built by a State, county or local
road agency, and were paid for from the general tax
[[Page 16637]]
base or tax revenues used by that agency for road construction, without
a specific lump sum charge or tax rate surcharge having been assessed
to the cabin owners or their predecessors.
c. An inventoried road or trail providing access was built by a
cooperator, pursuant to road or transportation cost-share agreement
with the Forest Service.
3. Consider the capital costs of an inventoried utility, access, or
facility as having been paid by the Forest Service when there is
evidence to conclude:
a. Forest Service appropriations were expended to construct the
inventoried utility, access, or facility road, trail, or facility that
provides access and/or service to the recreation residence lot.
b. An inventoried road was indirectly paid by the Forest Service in
the form of ``purchaser (road) credits'' pursuant to a timber sale
contract.
4. Consider the capital costs of an inventoried utility, access, or
facility as having been paid by either the Forest Service or a third
party when there is evidence that it existed prior to the time when the
recreation residence lot or lots within the tract was (were) first
authorized for recreation residence use by the Forest Service.
33.5--Appraisal Specifications.
Direction pertaining to appraisal specifications is found in FSH
5409.12, section 65.3, Recreation Residence Lots, and section 66,
exhibits 03 and 04.
33.6--Review and Acceptance of Appraisal Report.
The assigned Forest Service review appraiser shall review the
appraisal report to ensure that it conforms to the Uniform Standards of
Professional Appraisal Practice, the Uniform Appraisal Standards for
Federal Land Acquisition, and appraisal guidelines found in the FSH
5409.12, chapter 60.
If the appraisal report meets the standards as described in this
section, and as documented in an appraisal review report prepared by
the assigned Forest Service review appraiser, the authorized officer
may accept the estimated market value of the typical lot or lots in the
appraisal report for establishing a new base fee for that recreation
residence lot or lots.
33.7--Holder Notification of Accepted Appraisal Report and the
Right of Second Appraisal.
The authorized officer shall notify the affected holder or holders
that the Forest Service has accepted the appraisal report (sec. 33.6)
and has determined a new base fee based on that appraisal report. Upon
written request, the authorized officer shall:
1. Provide the holder with a copy of the appraisal report and
supporting documentation associated with the typical lot upon which the
holder's fee is based.
2. Advise the holder that the holder has 60 days after receipt of
this notification to notify the authorized officer in writing of the
holder's intent to obtain a second appraisal report.
3. Inform the holder that if a request for a second appraisal
report is submitted, the holder has one year following receipt of the
notice to prepare, at the holder's expense, a second appraisal report,
for Forest Service review, of the typical lot on which the initial
appraisal was conducted, using the same date of value as the original
appraisal report.
33.71--Standards for Second Appraisal.
33.71a--Appraiser Qualifications.
The appraiser selected by the holder or holders to conduct a second
appraisal must:
1. Meet the same general State certification requirements as the
original appraiser;
2. Have experience in appraising vacant, recreational use lands;
3. Have the same or similar professional qualifications as the
appraiser who prepared the first appraisal; and
4. Be approved in advance by the assigned Forest Service review
appraiser.
33.71b--Appraisal Guidelines.
1. Second Appraisal Assignment. The second appraisal report shall
use the appraisal guidelines used in the initial appraisal (FSH
5409.12, sec. 65.3, ex. 03), as prescribed in a pre-work meeting among
the holder's appraiser, the Forest Service review appraiser, and the
holder or holders, or their authorized representative. Prior to
starting the second appraisal report, the appraiser shall sign an
Assignment Agreement as provided in FSH 5409.12, section 65.3, exhibit
04. The appraiser shall submit the second appraisal report to the
client. If the holder chooses to have the second appraisal report
reviewed by the Forest Service, the holder must submit the appraisal
report to the authorized officer requesting review by the assigned
Forest Service review appraiser.
2. Reporting of Material Differences. Section 610(b)(4) of CUFFA
requires the appraiser selected to conduct the second appraisal to ``*
* * notify the Secretary of any material differences in fact or opinion
between the initial appraisal conducted by the agency and the second
appraisal.'' However, CUFFA does not require or mention any analysis,
opinion, or recommendation concerning material differences of fact or
opinion between the initial and second appraisal reports. The absence
of analysis, opinion, or recommendation differentiates this document
from an appraisal review report, or appraisal consulting report, as
defined in the Uniform Standard of Professional Appraisal Practice
(USPAP).
The assigned Forest Service review appraiser shall provide a copy
of the initial appraisal report to the approved second appraiser with a
request to notify the review appraiser of any material differences in
fact or opinion between the initial appraisal report and the second
appraisal report. After completion of the second appraisal report, and
in a separate document, the appraiser shall submit in writing to the
assigned Forest Service review appraiser his or her report of material
differences of fact or opinion between the initial appraisal conducted
for or by the agency and the second appraisal. The report shall be a
brief statement or listing of any material differences of fact or
opinion found in comparing the initial and second appraisal reports.
If the second appraiser comments in any way, such as on the
quality, including the completeness, adequacy, relevance,
appropriateness, reasonableness, of the other appraiser's work (any
part of the appraisal report or work file), the second appraiser shall
complete an appraisal review report in conformance with Standard 3 of
USPAP.
3. USPAP Compliance. The Confidentiality section of USPAP's Ethics
Rule states, in part that ``An appraiser must not disclose confidential
information or assignments results prepared for a client to anyone
other than the client and persons specifically authorized by the
client; state enforcement agencies and such third parties as may be
authorized by due process of law * * *'' However, disclosure of the
first appraisal report to the second appraiser is required by CUFFA and
in this situation is permitted by the Confidentiality section of
USPAP's Ethics Rule. Therefore, the Jurisdictional Exception Rule does
not apply to this situation because there is no conflict between this
requirement in CUFFA and USPAP.
33.72--Reconsideration of Recreation Residence Base Fee.
The authorized officer shall inform the holder that they must
submit to the authorized officer a request for reconsideration of the
base fee within 60 days of the date of the second appraisal review
report, if approved by the assigned Forest Service review appraiser.
[[Page 16638]]
Within 60 days of receipt of the request for reconsideration of the
base fee, the authorized officer shall:
1. Review the initial appraisal report and appraisal review report.
2. Review the results of the second appraisal report and appraisal
review report.
3. Review the material differences in fact or opinion report.
4. Establish a new base fee in an amount that is equal to the base
fee established by the initial or the second appraisal or is within the
range of values, if any, between the initial and second appraisals.
5. Notify the holder or holders of the amount of the new base fee.
33.8--Establishing Recreation Residence Lot Value During Transition
Period of Cabin User Fee Fairness Act.
The transition period, as identified in Sec. 614 of the Cabin User
Fee Fairness Act (CUFFA), is that period of time between the date of
enactment of CUFFA (Oct. 11, 2000) and the date upon which a base cabin
user fee for a recreation residence is established as a result of
implementing the final regulations, policies, and appraisal guidelines
established pursuant to CUFFA.
The authorized officer shall, upon adoption of regulations,
policies, and appraisal guidelines established pursuant to CUFFA,
notify all recreation residence permit holders whose recreation
residence lots have been appraised after September 30, 1995, that they
may request the Forest Service to take one of the following actions:
1. Conduct a new appraisal pursuant to regulations, policies, and
appraisal guidelines established pursuant to CUFFA (sec. 33.82).
2. Commission a peer review of an existing appraisal report of the
typical lot completed after September 30, 1995 (sec. 33.83).
3. Establish a new base fee using the market value of the typical
lot identified in an existing appraisal report completed on or after
September 30, 1995 (sec. 33.81).
A request to act on one of these options must be made by a majority
of the holders within the group of recreation residence lots
represented by the typical lot. To facilitate this process, the
authorized officer shall provide each permit holder with the names and
addresses of all of the other permit holders within the group of
recreation residence lots that are represented by the typical lot, so
that the holders within the group have the opportunity to collectively
determine whether to exercise one of the options identified above. The
options described in paragraphs 1 through 3, and explained in further
detail in section 33.81 through 33.83, shall be the only means by which
a new base cabin user fee is established during the transition period
for those lots which were appraised between September 30, 1995 and
October 11, 2000. Holders who request a new appraisal or the
commissioning of a peer review will not have the right to request a
second appraisal as provided for in section 33.7.
33.81--Use of Appraisal Completed After September 30, 1995.
1. Establish a new base fee using 5 percent of the fee simple
value, indexed to the current year, of a Forest Service approved
appraisal report of a typical lot completed after September 30, 1995,
when:
a. Within 2 years following the adoption of regulations, policies,
and appraisal guidelines established pursuant to CUFFA, a request to do
so is submitted in writing to the authorized officer by a majority of
the holders within the group of recreation residence lots represented
by a typical lot included in the appraisal (sec. 33.8, para. 3).
b. A majority of permit holders in a group of recreation residence
lots fail to submit, within 2 years following the adoption of
regulations, policies, and appraisal guidelines established pursuant to
CUFFA, a request for one of the three options identified in section
33.8.
c. A peer review is requested and completed (sec. 33.8, para. 2),
and the review determines that the appraisal completed after September
30, 1995, is consistent with the regulations, policies, and appraisal
guidelines adopted pursuant to CUFFA.
2. Implement the new base fee at the time of the next regularly
scheduled annual billing cycle, subject to the phase-in provisions
(sec. 33.12).
33.82--Request for New Appraisal Conducted Under Regulations,
Policies, and Appraisal Guidelines Established Pursuant to CUFFA.
The holders must make a request for a new appraisal within 2 years
following the adoption of regulations, directives, and appraisal
guidelines for recreation residences established pursuant to CUFFA. The
authorized officer shall inform the holders that the request for a new
appraisal must be submitted in writing to the authorized officer and
must be signed by the majority of the recreation residence holders
within the group of recreation residence lots represented by the
typical lot to be appraised. The authorized officer shall also inform
those holders requesting a new appraisal that in their request they
must agree to collectively pay for one-half of the cost to conduct the
new appraisal. In addition, holders whose previous appraisal indicated
that a base fee would increase more than $3,000 from the annual fee
being assessed on October 1, 1996, shall be notified that they must
include the statement in exhibit 01 as a part of their request for a
new appraisal. The information required in the statement will be
provided to the holder by the authorized officer.
33.82--Exhibit 01.
Statement for Holders Requesting New Appraisal When Previous
Appraisal Indicated a Base Fee Increase of More Than $3,000 from Annual
Fee Assessed on October 1, 1996.
We hereby agree that, if the new base fee established by the new
appraisal results in an amount that is 90 percent or more of the fee
determined by the previously completed appraisal of this typical lot
(specifically, that appraisal dated --------, with an estimated fee
simple value of $--------, and an indicated annual fee of $--------
), each of the permit holders within this group of recreation
residence (indicate tract name and lots) shall be obligated to pay
to the United States the following:
1. The base fee that shall be established using the results of
the new appraisal being requested, subject to the phase-in
provisions of section 609 of CUFFA; and
2. The difference between (a) the annual fee that was paid
during calendar years --------, --------, --------, (enter each
calendar year beginning with that year when a new base fee based
upon the above-referenced appraisal would have otherwise been
implemented), and ending with calendar year -------- (enter the
calendar year the request for a new appraisal is made), and (b) the
amount that the annual fee for each of those identified calendar
years would otherwise have been had a new base fee been assessed as
a result of the above-referenced appraisal, pursuant to the phase-in
provisions in effect and applicable during that time. This
difference for those calendar years cumulatively totals $--------,
as itemized on the enclosed worksheet (enter the cumulative
difference and attach a worksheet showing how it was calculated,
itemized for each of the calendar years identified above).
We agree that the cumulative amount identified in Item
2 (above) shall be assessed as a premium fee amount,
payable in full or in three (3) equal annual installments, in
addition to the phase-in of the new base user fee established by the
results of the new appraisal.
The authorized officer shall, upon receipt of a formal request,
initiate a new appraisal of the typical lot in accordance with the
regulations, policies, and appraisal guidelines adopted pursuant to
CUFFA. The date of value of the new appraisal shall be the same date of
value as that identified in the appraisal report it is intended to
replace.
[[Page 16639]]
33.83--Request for Peer Review Conducted Under Regulations,
Policies, and Appraisal Guidelines Established Pursuant to CUFFA.
A request for a peer review of an existing appraisal report
completed after September 30, 1995, shall be made within 2 years
following the adoption of regulations, policies, and appraisal
guidelines for recreation residences pursuant to CUFFA. The request
shall be submitted in writing to the authorized officer and must be
signed by a majority of the recreation residence holders within the
group of recreation residence lots represented by the typical lot that
was appraised. The holders requesting the peer review shall, in their
request, agree to collectively pay for one-half the cost to commission
the review. In addition, holders requesting a peer review where the
appraisal to be reviewed established a base fee that was more than a
$3,000 annual increase to the fee being assessed the holders on October
1, 1996, shall include the statement contained in exhibit 01 as a part
of their request. The information required in the statement will be
provided to the holder by the authorized officer.
33.83--Exhibit 01.
Statement for Holders Requesting Peer Review When Previous
Appraisal Indicated a Base Fee Increase of More Than $3,000 from Annual
Fee Assessed on October 1, 1996.
We hereby agree that, if the new base fee from the peer review
results in an amount that is 90 percent or more of the fee
determined by the previously completed appraisal of this typical lot
(specifically, that appraisal dated --------, with an estimated fee
simple value of $ --------, and an indicated annual fee of $ ------
--), then each of the permit holders within this group of recreation
residence (indicate tract name and lots) shall be obligated to pay
to the United States the following:
1. The base fee that shall be established pursuant to this peer
review, subject to the phase-in provisions of section 609 of CUFFA;
and
2. The difference between (a) the annual fee that was paid
during calendar years --------, -------- , -------- (enter each
calendar year beginning with that year when a new base fee based
upon the above-referenced appraisal would have otherwise been
implemented), and ending with calendar year -------- (insert the
calendar year in which the request for a peer review is made), and
(b) the amount that the annual fee for each of those identified
calendar years would otherwise have been, had a new base fee been
assessed as a result of the above-referenced appraisal, pursuant to
the phase-in provisions in effect and applicable during that time.
This difference for those calendar years cumulatively totals $ ----
----, as itemized on the enclosed worksheet (enter the cumulative
difference, and include an attached worksheet showing how it was
calculated, itemized for each of the calendar years identified
above). We agree that the cumulative amount identified in Item
2 (above) will be assessed as a premium fee amount, paya