WSR 01-07-117

PROPOSED RULES

FOREST PRACTICES BOARD


[ Filed March 21, 2001, 11:54 a.m. ]

Continuance of WSR 00-20-063.

Preproposal statement of inquiry was filed as WSR 98-16-099.

Title of Rule: Amendments to forest practices rules, Title 222 WAC.

Purpose: The Forest Practices Board is conducting rule making on a comprehensive package of new and revised permanent rules because current forest practices rules are not providing adequate protection for salmon and other aquatic resources. The Forest Practices Board and the Department of Natural Resources face many new resource protection challenges, the most significant of which are the current and proposed listings of salmonids under the federal Endangered Species Act (ESA) and water quality-limited waters under the federal Clean Water Act (CWA).

At its September 22, 1998, meeting, the Forest Practices Board approved the following goals for this rule package:

1. To provide compliance with the Endangered Species Act for aquatic and riparian-dependent species;

2. To restore and maintain riparian habitat on state and private forest lands to support a harvestable supply of fish;

3. To meet the requirements of the Clean Water Act for water quality on state and private forest lands; and

4. To keep the timber industry economically viable in Washington.

This proposal is based on the forests and fish report (dated April 29, 1999). This report recommends scientifically based changes to the forest practices rules developed through negotiations with the federal agencies responsible for administering the Endangered Species Act and the Clean Water Act, the forestry industry, small landowners, tribal governments, state agencies, and counties. The legislature has strongly encouraged the board to follow the recommendations of the forest and fish report. The legislature has found that forest practices rules consistent with the forests and fish report:

(a) Will lead to:

(i) Salmon habitat that meets riparian functions vital to the long-term recovery of salmon on more than sixty thousand miles of streams in this state;

(ii) Identification of forest roads contributing to habitat degradation and corrective action to remedy those problems to protect salmon habitat;

(iii) Increased protection of steep and unstable slopes; and

(iv) The implementation of scientifically based adaptive management and monitoring processes for evaluating the impacts of forest practices on aquatic resources, and a process for amending the forest practices rules to incorporate new information as it becomes available; and

(b) Will lead to the protection of aquatic resources to the maximum extent practicable consistent with maintaining commercial forest management as an economically viable use of lands suitable for that purpose; and

(c) Will provide a regulatory climate and structure more likely to keep landowners from converting forest lands to other uses that would be less desirable for salmon recovery.

The legislature has also found that rules consistent with the forest and fish report constitute a comprehensive and coordinated program to provide substantial and sufficient contributions to salmon recovery and water quality enhancement in areas impacted by forest practices and are intended to fully satisfy the requirements of the Endangered Species Act (16 U.S.C. Sec. 1531 et seq.) with respect to incidental take of salmon and other aquatic resources and the Clean Water Act (33 U.S.C. Sec. 1251 et seq.) with respect to nonpoint source pollution attributable to forest practices.

The Forest Practices Board adopted emergency rules based on the forest and fish report that became effective March 20, 2000, and adopted amendments to these emergency rules effective July 3, 2000. These emergency rules will remain in place until new permanent forest practices rules are adopted or until June 30, 2001, whichever is sooner. RCW 76.09.055.

A draft environmental impact statement analyzing the environmental effects of current rules, the preferred alternative based on the forest and fish report, and a third alternative was published on March 20, 2000. The final EIS will be available in late April.

Revisions to the permanent rule proposal have been made based on the public review process for the draft EIS, experience from implementing the forest and fish emergency rules, further input the negotiated process designed to achieve greater consistency with the forest and fish report, and public comments and discussions at board meetings.

Other Identifying Information: For more information see the forest practices website at http://www.wa.gov/dnr/htdocs/fp/fpb/fpb.html.

Statutory Authority for Adoption: Chapter 34.05 RCW, RCW 76.09.040, [76.09.]050, [76.09.]370, 76.13.120(9).

Statute Being Implemented: Chapter 76.09 RCW, RCW 76.13.100 - [76.13.]130, 77.85.180 - [77.85.]190.

Summary: Modify forest practices rules (Title 222 WAC) to incorporate new public resource protection requirements. Categories of rules include practices and procedures, State Environmental Policy Act guidelines, policy and organization, definitions, application and notification procedures, small forest landowner forestry riparian easement program, watershed analysis, riparian open space program, road construction and maintenance, timber harvesting, reforestation, forest chemical, alternate plans, supplemental directives, consultation and enforcement, relationship to other laws and regulations.

Citation of existing rules amended by this order: Amending WAC 222-08-020 Orientation and training, 222-08-030 Reporting procedures, 222-08-035 Continuing review of forest practices rules, 222-10-010 Policies and authorities, 222-10-041 Northern spotted owls, 222-12-010 Authority, 222-12-020 Rule sections, 222-12-030 Classes of forest practices, 222-12-040 Alternate plans-policy, 222-12-045 Adaptive management program, 222-12-046 Cumulative effects, 222-12-050 Notices to comply--Stop work orders, 222-12-070 Enforcement policy, 222-12-090 Forest practices board manual, 222-16-010 General definitions, 222-16-030 Water typing system, 222-16-035 Wetland typing system, 222-16-050 Classes of forest practices, 222-16-070 Pesticide uses with the potential for a substantial impact on the environment, 222-16-080 Critical habitats (state) of threatened and endangered species, 222-16-100 Planning options for the northern spotted owl, 222-16-105 Cooperative habitat enhancement agreements, 222-20-010 Applications and notifications--Policy, 222-20-020 Application time limits, 222-20-040 Approval conditions, 222-20-050 Conversion to nonforest use, 222-20-070 Emergency forest practices, 222-20-080 Application and notification expiration, 222-20-100 Notice to parks and OAHP, 222-22-070 Prescription recommendation, 222-22-080 Approval of watershed analysis, 222-22-090 Use and review of watershed analysis, 222-22-100 Application review prior to watershed analysis, 222-24-010 Policy, 222-24-020 Road location and design, 222-24-030 Road construction, 222-24-035 Landing location and construction, 222-24-040 Water crossing structures, 222-24-050 Road maintenance and abandonment, 222-24-060 Rock quarries, gravel pits, borrow pits, and spoil disposal areas, 222-30-010 Policy--Timber harvesting, 222-30-020 Harvest unit planning and design, 222-30-025 Even-aged harvest--Size and timing, 222-30-040 Shade requirements to maintain water temperature, 222-30-050 Felling and bucking, 222-30-060 Cable yarding, 222-30-070 Ground-based logging systems, 222-30-100 Slash disposal or prescribed burning, 222-30-110 Timber harvesting on islands, 222-34-040 Site preparation and rehabilitation, 222-38-010 Policy--Forest chemicals, 222-38-020 Handling, storage, and application of pesticides, 222-38-030 Handling, storage, and application of fertilizers, 222-38-040 Handling, storage, and application of other forest chemicals, 222-46-030 Notice to comply, 222-46-040 Stop work orders, 222-46-060 Civil penalties, 222-46-070 Injunctions, civil suits, disapprovals, 222-50-010 Policy, 222-50-020 Other agency requirements, 222-50-030 Interagency agreements, 222-50-040 Safety and health, 222-50-050 Forest fire prevention and suppression, and 222-50-060 Other regulatory programs administered by the department; new sections WAC 222-10-030 SEPA policies for potentially unstable slopes and landforms, 222-10-035 Watershed analysis SEPA policies, 222-10-125 Exemption from RCW 43.21C.030 (2)(c), 222-12-0401 Alternate plans--Process, 222-12-0402 Assistance available for small forest landowners, 222-12-0403 Cooperative development of alternate plan board manual, 222-12-0404 Cooperation for effective alternate planning, 222-12-0405 Auditing and monitoring, 222-12-041 Use of approved state and federal conservation agreements for aquatic resources, 222-12-044 Cooperative opportunities, 222-16-031 Interim water typing system, 222-16-036 Wetland mapping, 222-20-015 Multiyear permits, 222-20-055 Continuing forest land obligations, 222-21-005 Policy, 222-21-010 Definitions, 222-21-020 Criteria for accepting riparian easement, 222-21-030 Document standards, 222-21-035 Description of easement, 222-21-040 Timber cruises, 222-21-045 Valuation, 222-21-050 Payment of compensation, 222-21-060 Commercially reasonable harvest, 222-21-065 Uneconomic to harvest, 222-21-070 Blowdown and salvage, 222-21-080 Eminent domain, 222-21-090 Internal Department of Natural Resources review of small forest landowner office compensation decisions, 222-22-075 Monitoring, 222-22-076 Restoration, 222-23-010 Policy and definitions, 222-23-020 Submitting and processing of applications for the Riparian Open Space Program, 222-23-025 Priorities for conveyances; use of lands conveyed, 222-23-030 Conveyance forms and procedure, 222-24-015 Construction in wetlands, 222-24-026 Temporary roads, 222-24-051 Road maintenance schedule, 222-24-052 Road maintenance, 222-30-021 Western Washington riparian management zones, 222-30-022 Eastern Washington riparian management zones, 222-30-023 Riparian management zones for exempt 20-acre parcels, 222-30-045 Salvage logging within riparian management zones, 222-46-012 Representatives on inspections and 222-46-090 Financial assurances; and repealing 222-30-030 Stream bank integrity and 222-24-025 Road design.

Reasons Supporting Proposal: Modifications to rules are needed to better protect Washington's public resources.

Name of Agency Personnel Responsible for Drafting: Terry Ruff, 1111 Washington Street S.E., Olympia, WA 98504-7012, (360) 902-1395; Implementation and Enforcement: Lloyd Handlos, 1111 Washington Street S.E., Olympia, WA 98504-7012, (360) 902-1041.

Name of Proponent: Forest Practices Board, governmental.

Rule is necessary because of federal law, these rules are intended to fully satisfy the requirements of the Federal Endangered Species Act (16 U.S.C. 1531 et seq.) with respect to the incidental take of salmon and other aquatic resources and the Federal Clean Water Act (33 U.S.C. 1251 et seq.) with respect to nonpoint sources of pollution attributable to forest practices. See RCW 76.13.180.

Explanation of Rule, its Purpose, and Anticipated Effects: The purpose of the proposed rule is to develop a biologically sound and economically practicable solution that will improve and protect riparian habitat on nonfederal forest lands in the state of Washington. See also Purpose above.

The proposed rule:

Revises the water typing rules used to identify streams that are or are not used by fish so that more adequate protection is provided for fish habitat along those streams. Provides an interim water-typing system while the fish habitat water-typing model is completed.
Provides a multi-year forest practices permit for landowners who have completed watershed analysis, approved alternate plan or who have submitted an application for a road maintenance and abandonment plan.
Adds several new definitions for each topic: Unstable slopes, roads, RMZs, pesticides, water-typing, multi-year permits.
Expands the Class IV-Special SEPA trigger for unstable slopes, gives SEPA guidance, and adds definitions related to unstable slopes.
Requires that all watershed analyses are reviewed under SEPA and includes a monitoring and restoration component.
Revises riparian management zone requirements for Eastern and Western Washington; identifies and delineates RMZ core, inner and outer zones for each side of the state; continues the January 1999 riparian requirements for exempt 20 acre parcels for landowners who own less than eighty acres of forest land.
Presents options for variable buffer widths for aerial application of pesticides and directs addition of best management practices for application of pesticides to the Forest Practices Board manual.
Directs that best management practices related to roads be added to the FPB manual; revises requirements for road location and design, relief drainage structures, water crossing structures, and road maintenance and abandonment; separates wetland delineation rules into a new section.
Expands adaptive management requirements by formally establishing the Cooperative Monitoring, Evaluation, and Research (CMER) committee and charging them with implementing adaptive management based on scientific findings; encourages cooperative opportunities for working with the board; directs establishment of resource objectives and independent scientific review process.
Establishes criteria for hardwood conversions in the RMZ inner zone.
Establishes a riparian open space program which compensates landowners for ecological protection and fisheries enhancement.
Creates a forest riparian easement program to acquire easements from small forest landowners along riparian and other areas of value to the state for protection of aquatic resources.
Develops the alternate plan process which allows departure from the specific provisions of chapters 222-22 through 222-38 WAC for any or all of the activities described in the application if the alternate plan provides protection to public resources at least equal in overall effectiveness to the act and rules.
Defines the use of approved state and federal conservation agreements for aquatic resources.
Establishes financial assurances to ensure that landowners or operators with past violations have sufficient resources to cover any penalties and mitigation measures which might be assessed.
Eliminates the automatic pass through for critical habitat.
Changes rule language to be consistent with statutory language and corrects minor editing inconsistences.
The anticipated effects for these rules include improved water quality and fish habitat, as well as better overall protection of public resources while maintaining a viable forest products industry. See the Environmental Impact Statement for more details on the impact of the proposal.

Proposal Changes the Following Existing Rules: See Explanation of Rule above.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement
Reviser's note: The following small business economic impact statement has been filed electronically and is published as is. It has not been through the normal editing and proofing process.



Small Business Economic Impact Statement

for New Proposed Forest Practices Rules

Implementing the Forests and Fish Report


Final Report


Submitted: January 22, 2001

To the Department Of Natural Resources

DNR Agreement # FY00-133


Prepared by:


John Perez-Garcia,

Jane Edelson, and

Kevin Zobrist


College of Forest Resources

University of Washington

BOX 352100

Seattle, Washington 98195-2100

perjohm@u.washington.edu

ACKNOWLEDGEMENTS



The authors wish to acknowledge the following individuals for their assistance in implementing the project: Debora Brown-Munguia, Department of Natural Resources (DNR); Cathy Carruthers, DNR; Doretta Collins, DNR, who provided GIS data bases as well as summary tables of water typing; Kim Sellers, DNR; Catherine Elliott, DNR; Charlene Rodgers, DNR, who provided project leadership; Bruce Glass, DNR, who provided project leadership; Nels Hanson, Washington Farm Forestry Association (WFFA); Maurice Williamson,WFFA, Shon Kraley, University of Washington (UW); Bruce Lippke, UW; John Ehrenreich, Washington Forest Protection Association; Bill Bafus, Department of Ecology; Will Hamilton, Independent Forest Products Association (now American Forest Resource Council); Harold Brunstad, contract logger; Jim Murphy, SMLO; Dave Sweitzer, Washington Hardwoods Commission

The study was funded by the Department of Natural Resources under an interagency agreement with the University of Washington FY00-133.


EXECUTIVE SUMMARY


The Forest Practices Board (FPB) and the Department of Ecology (DOE) are considering making changes to permanent forest practices rules. Since the proposed permanent rule changes will impose more than minor costs on forest products businesses, a Small Business Economic Impact Statement (SBEIS) is required (RCW 19.85.030). This study analyzes the effects of the new proposed rule compliance costs on small and large businesses.

The rule complying community is all forest businesses in the State of Washington. Forest businesses are businesses that own or control cutting rights on forestlands and include, but are not limited to, landowners, loggers and mill owners. Small forest businesses are those businesses with 50 or fewer employees.

Compliance cost is defined as a loss in current revenue, a loss in asset and higher operating costs. The basis for comparing costs between large and small businesses is the cost per one hundred dollars of sales. In western Washington, the cost of implementing the proposed rules falls more heavily to small businesses compared to large businesses. The compliance cost is 25.6% for small businesses and 18.5% for large businesses. These percentages represent the value of compliance cost relative to the total business value, i.e. their timber asset value. In eastern Washington, small businesses will lose 31.0% of their business value by implementing the rules compared to 22.1% for large businesses.

In western Washington the greatest cost associated with adopting the proposed rule is realized in the form of foregone sales associated with establishing Riparian Management Zones (RMZ). This cost is estimated to be 19.1% of the total business value for small businesses and 11.1% for large businesses. Road maintenance and stream crossings could add an additional cost of 6.9% and 5.5% of total business value for large and small businesses, respectively. RMZ setup costs comprise a smaller percentage of the new proposed rule compliance cost. The RMZ setup costs are 0.5% and 1.0% of total value for large and small businesses respectively.

The major component of compliance cost in eastern Washington is associated with road maintenance and stream crossings. For large businesses, this cost comprises more than three-quarters of the total compliance cost of 22.1%. For small businesses, road maintenance and stream crossings comprise nearly half of the total compliance cost of 31.0%. Small businesses also incur a substantial cost in the form of foregone sales to establish the RMZ. Twelve percent of the total business value for small businesses is compliance cost related to RMZ versus 4.2% for large businesses. RMZ setup costs are also three times as much for small businesses than large businesses.

In addition to the compliance cost, lost employment resulting from lower timber harvests suggests that there are substantial wage losses and potentially large disproportional impacts on small businesses. The losses amount to nearly $16 million in eastern Washington for the forestry and saw-milling sectors (assumed to mostly impact small businesses) and nearly $7 million for the pulp and paper sectors (assumed to mostly impact large businesses). In western Washington, the losses are over $160 million in the saw-milling and forestry sectors (again assumed to be mostly small businesses) and $123 million in the pulp and paper sectors.

A compensation program would pay an estimated $0.68 on average to western Washington small landowners for every $1.00 of lost sales resulting from the new RMZ. The total compensation package for the small businesses that were sampled for this evaluation would total $3.9 million compared to $5.7 million in lost sales associated with the RMZ. The compensation for eastern Washington is $0.50 on average for small landowners for every $1.00 of lost sales resulting from the new RMZ. The total compensation for the businesses sampled totals $233,000 compared to $467,000 in lost sales. The difference in compensation between eastern and western Washington is due to the higher proportion of compliance cost associated with road maintenance and stream crossing in eastern Washington.

In addition, the FPB and the Washington State Legislature have taken other steps to reduce the cost of the proposed new forest practices rules on small businesses. They include delaying compliance timetables for road maintenance and abandonment plans required by the new rules for small landowners. Also, small landowners who own less than 80 acres statewide (with a forest practices application on less than 20 acres) are not required to follow the new proposed forest practices rules for riparian protection. They are however, subject to the permanent riparian management zone rules and watershed analysis prescriptions in effect as of January 1, 1999. They must also allow for an additional 15% volume requirement where watershed analysis prescriptions are not in effect. These landowners will be allowed to harvest more timber than larger landowners under the new rules.

The mitigation for these small landowners is substantial. In western Washington it reduces potential foregone sales from $1.1 million to $147,000. In eastern Washington the compliance cost is reduced by $800,000 (the estimated value of lost sales) among those small landowners sampled for this study.

Small landowners with timber harvests of less the 2 million board feet receive a 16% tax credit on taxes imposed under RCW 84.33.074 for complying with the new proposed forest practices rules. The harvesters will pay a lower timber tax for timber harvested in compliance with the new proposed rules.

The Department of Natural Resources (DNR) also established a small forest landowner office to be a resource and focal point for small forest landowner concerns.

Other mitigation measures listed in the new proposed forest practices rules that are available to all landowners include: alternate plans, multi-year permits, and Habitat Conservation Plan (HCP) exemptions. Alternate plans allow a landowner to develop an alternate method of protecting public resources that might better fit their particular situation, yet still provide an equal or greater level of protection for public resources. Those landowners that have unusual constraints that make it difficult to comply with the forest practices rules have the option to propose an alternate plan. Multi-year permits allow a landowner in a watershed analysis unit to instigate multiple forest practice actions for up to 5 years as opposed to the standard 2-year permit. Landowners with an approved HCP that provides for species protection under the forest practices rules are not subject to forest practices rules.

Table of Contents

ACKNOWLEDGEMENTS . . . . . . . . . . . . 2
EXECUTIVE SUMMARY . . . . . . . . . . . . 3
Table of Contents . . . . . . . . . . . . 5
List of Figures . . . . . . . . . . . . 6
List of Tables . . . . . . . . . . . . 7
INTRODUCTION . . . . . . . . . . . . 8
STUDY OBJECTIVE . . . . . . . . . . . . 8
BACKGROUND INFORMATION AND NEW PROPOSED RULE CHANGES . . . . . . . . . . . . 9
The Forests and Fish Report . . . . . . . . . . . . 9
Proposed Rules . . . . . . . . . . . . 10
Summary of New Proposed Rules . . . . . . . . . . . . 10
REQUIREMENTS FOR AN SBEIS . . . . . . . . . . . . 16
Regulatory Fairness Act . . . . . . . . . . . . 16
Potentially Affected Industries . . . . . . . . . . . . 16
Small Businesses Versus Large Businesses . . . . . . . . . . . . 16
Compliance Cost for Businesses . . . . . . . . . . . . 16
Involvement of Concerned Stakeholders . . . . . . . . . . . . 17
METHODS OF ANALYSIS . . . . . . . . . . . . 18
DATA . . . . . . . . . . . . 19
DATA ANALYSIS . . . . . . . . . . . . 27
THE NET EFFECT OF PROPOSED NEW RULES ON FOREST BUSINESS VALUES . . . . . . . . . . . . 31
EMPLOYMENT COSTS . . . . . . . . . . . . 32
MITIGATION . . . . . . . . . . . . 36
APPENDIX: SUPPLEMENTAL DATA . . . . . . . . . . . . 38

List of Figures

Figure 1. RMZ for Type S and F waters, western Washington . . . . . . . . . . . . 12
Figure 2. RMZ for type N streams, western Washington . . . . . . . . . . . . 13
Figure 3. RMZ for Type S and F waters, eastern Washington . . . . . . . . . . . . 14
Figure 4. A sampled section with water and buffer information for a single ownership . . . . . . . . . . . . 19
Figure 5. Economically inaccessible areas are indicated as brown (dark) triangles in the lower right portion of the chart . . . . . . . . . . . . 20
Figure 6. Western Washington acre distribution by forest types . . . . . . . . . . . . 28
Figure 7. Eastern Washington acre distribution by forest types . . . . . . . . . . . . 29
Figure 8. Percentage of Buffer Area in Hardwood or Mixed Vegetation Type . . . . . . . . . . . . 30
Figure 9. Total sawmill log consumption by mill-size classes . . . . . . . . . . . . 33

List of Tables

Table 1. Per acre values based on Department of Revenue data on recent timber sales . . . . . . . . . . . . 22
Table 2. Reproduction acres sunk cost calculations . . . . . . . . . . . . 23
Table 3. Estimated volume of board feet for the timber types . . . . . . . . . . . . 24
Table 4. Number of stream crossings . . . . . . . . . . . . 24
Table 5. Number of road miles . . . . . . . . . . . . 25
Table 6. Per unit costs for stream crossings and road miles used in the analysis . . . . . . . . . . . . 25
Table 7. Stream length in 1,000 feet . . . . . . . . . . . . 25
Table 8. Setup costs per 1000 feet of stream . . . . . . . . . . . . 25
Table 9. Eastern Washington employment per million board feet . . . . . . . . . . . . 26
Table 10. Western Washington employment per million board feet . . . . . . . . . . . . 26
Table 11. Acreage distribution for Washington sample . . . . . . . . . . . . 27
Table 12: Percent of hardwood or mixed vegetation buffer acres under proposed rules by stream type . . . . . . . . . . . . 30
Table 13: The Effect of New Proposed Rules on Timber Asset Values . . . . . . . . . . . . 31
Table 14. Employment Costs . . . . . . . . . . . . 34
Table A1. Employment breakdown by sec-

tor . . . . . . . . . . . .

1
Table A2. Water type miles by old and new typing for western Washington . . . . . . . . . . . . 1
Table A3. Water type miles for eastern Washington . . . . . . . . . . . . 3

The Small Business Economic Impact Statement

for New Proposed New Forest Practices Rules


John Perez-Garcia, Jane Edelson and Kevin Zobrist.

College of Forest Resources,

University of Washington,

Seattle WA


INTRODUCTION


The Forest Practices Board (FPB) and the Department of Ecology (DOE) are considering making changes to the permanent forest practices rules. The goals for the proposed changes are:

1. to provide compliance with the Endangered Species Act for aquatic and riparian-dependent species on non-federal forest lands.,

2. to restore and maintain riparian habitat on non-federal forest lands to support harvestable supply of fish,

3. to meet the requirements of the Clean Water Act for water quality on non-federal forest lands,

4. to keep the timber industry in the State of Washington economically viable..

Since the proposed permanent rule changes will impose more than minor costs on forest products businesses, a Small Business Economic Impact Statement (SBEIS) is required (RCW 19.85.030). This study analyzes the effects of the new proposed rule compliance costs on small and large businesses.


STUDY OBJECTIVE


The objective is to determine whether the compliance cost exhibits a disproportionate impact on the state's small businesses. The legislative purpose of the Regulatory Fairness Act RCW 19.85 (RFA) is set out in RCW 19.85.011:

"The legislature finds that administrative rules adopted by state agencies can have a disproportionate impact on the state's small businesses because of the size of those businesses. This disproportionate impact reduces competition, innovation, employment, and new employment opportunities, and threatens the very existence of some small businesses. The legislature therefore enacts the Regulatory Fairness Act with the intent of reducing the disproportionate impact of state administrative rules on small business".

The specific purpose for the SBEIS is contained in RCW 19.85.040.

"(1) A small business economic impact statement must include a brief description of the reporting, record keeping, and other compliance requirements of the proposed rule, and the kinds of professional services that a small business is likely to need in order to comply with such requirements. It shall analyze the costs of compliance for businesses required to comply with the proposed rule adopted pursuant to RCW 34.05.320, including costs of equipment, supplies, labor, and increased administrative costs. It shall consider, based on input received, whether compliance with the rule will cause businesses to lose sales or revenue. To determine whether the proposed rule will have a disproportionate impact on small businesses, the impact statement must compare the costs of compliance for small businesses with the cost of compliance for the ten percent of businesses that are the largest businesses required to comply with the proposed rules using one or more of the following as a basis for comparing costs:

(a) Cost per employee;

(b) Cost per hour of labor; or

(c) Cost per one hundred dollars of sales.

(2) A small business economic impact statement must also include:

(a) A statement of the steps taken by the agency to reduce the costs of the rule on small businesses as required by RCW 19.85.030(3), or reasonable justification for not doing so, addressing the options listed in RCW 19.85.030(3).

(b) A description of how the agency will involve small businesses in the development of the rule; and

(c) A list of industries that will be required to comply with the rule. However, this subsection (2)(c) shall not be construed to preclude application of the rule to any business or industry to which it would otherwise apply."

Background information on the Forests and Fish Report is presented in the next section. Section 3 provides a description of the requirements for an SBEIS. This section is followed by the method of analysis, data and data analysis. Results are presented next, followed by employment costs and a final section, which provides mitigation measures undertaken.


BACKGROUND INFORMATION AND NEW PROPOSED RULE CHANGES

The Forests and Fish Report


In November 1997, in anticipation of the listing of several subspecies of Washington salmon as threatened or endangered, participants in Timber, Fish, and Wildlife (TFW) began negotiating a proposal for new forest practices rules. The goal of this proposal was to protect and restore riparian habitat on non-federal forestlands in compliance with the Endangered Species Act and the Clean Water Act, while maintaining the economic viability of Washington's timber industry. Participants in the TFW process included six caucuses: federal agencies, state agencies, Indian tribes, counties, environmentalists, and the timber industry. The environmentalists withdrew from the debate in September 1998, but the remaining participants agreed to a conceptual proposal for new forest practice rules to protect salmon habitat on non-federal forestlands in Washington. The process became known as the "Forest and Fish" negotiations and the stakeholders' recommendations became known as the "Forests and Fish Report," which is the foundation for the forestry module portion of the Washington State salmon recovery plan.

Proposed Rules

In the spring of 1999, legislation based on the Forests and Fish Report was passed by the Washington State Legislature and signed into law by Governor Gary Locke1. The legislation requires the FPB, which is responsible for establishing forest practices rules, to adopt a set of emergency rules that are consistent with the recommendations of the Forests and Fish Report. Following that, permanent rules are to be adopted by the board. For the permanent rules the board is not required to follow the recommendations of the Forests and Fish Report, but it is "strongly encouraged" to by the legislation.

The FPB proposed emergency rules in October 1999, and after a public hearing in November the rules were finalized and adopted by the board on January 20, 2000. The emergency rules became effective on March 20, 2000. Additions to the emergency rules were adopted May 10, 2000, and became effective July 3, 2000. These emergency rules will remain in effect until June 30, 2001, or until the permanent rules are adopted, whichever is sooner.

Summary of New Proposed Rules

The new proposed rules introduce changes to forest practices that will impose a cost to forest practice applicants. While there are many aspects of the new proposed rules that change the way applications for forest practices are approved, the major aspects of these changes are the focus of this study. They include the changes to forest practices that affect timber harvests, access to the timber through road construction and maintenance and administrative setup costs associated with the new rule changes. Other aspects such as procedures for unstable slopes, multi-year permits, adaptive management and watershed analysis are assumed to comprise a significantly smaller compliance cost and/or there is no information at the time of the study to allow any cost estimate to be determined.

The new proposed rules address:

(i) water typing rules,

(ii) riparian habitat management,

(iii) unstable slopes,

(iv) forest roads,

(v) wetlands,

(vi) watershed analysis,

(vii) adaptive management,

(viii) forest pesticides, and

(ix) cultural resources.

Of these nine topics, riparian habitat management and forest roads make up the greatest portion of the compliance cost associated with the new proposed rules. Unstable slopes may be a third major component of the compliance cost, but their analysis is difficult because there is no statewide identification of unstable slopes, which precludes any statistical analysis of their compliance cost. The following paragraphs present each topic briefly with a description of how it may impact compliance cost.

Water typing under the proposed rules classifies waters of the state into three types. Type S waters are all waters inventoried as "shorelines of the state". Type F waters are waters not classified as Type S, which contain fish habitat. Type N waters are waters not classified as Type S or F, which are either perennial streams or intermittent (seasonal). Water typing does not directly affect the compliance cost of businesses. Water typing indirectly impacts businesses through riparian habitat management and the establishment of riparian buffers.

Riparian habitat management includes separate requirements for western and eastern Washington2. Riparian Management Zones (RMZ) are identified according to state location, stream type, site class of adjacent land, management harvest options and stream size.

Western Washington RMZ requirements:

For fish-bearing streams (Type S and F waters), a three-zone buffer is required. The buffer is measured horizontally from the bankfull width or the channel migration zone (CMZ), whichever is greater, and the total width must extend out to the site potential tree height (SPTH). The SPTH is the potential height of the dominant conifer measured at 100 years, which varies by site class. The three zones are as follows (see Figure 1). 1. Core zone. A 50 feet buffer in width where no timber harvest is allowed.

2. Inner zone. A buffer zone immediately outside the core zone from 10 to 100 feet, the width of which varies with stream size, site class, and management options. Thinning is allowed in this zone only if minimum basal area requirements are met. Stand requirements vary by site class and consider the desired future condition target basal area per acre. When the conditions are not met, no harvesting is permitted in the inner zone. If harvesting is permitting due to surplus basal area consistent with the stand requirement, one of two options can be considered: thinning from below or leaving trees closest to the water. When the required stand basal area cannot be met within the sum of the areas in the inner and core zones due to the presence of a stream-adjacent parallel road in the inner or core zone, a determination must be made of the approximate basal area that would have been present in the inner and core zones if the road was not occupying space in the core or inner zone and the shortfall in the basal area component of the stand requirement. 3. Outer zone. This zone extends from the outer edge of the inner zone out to full SPTH. Harvest is permitted in this zone, but 20 riparian leave trees per acre must be left. This number may be reduced under specific circumstances described in the Forest and Fish report.

For non-fish bearing perennial streams (Type N waters), a non-contiguous 50-foot no-touch buffer is required for at least 50% of the total length of the stream (see Figure 2). The buffer must include the first 300-500 feet (depending on the length of the stream) above the confluence of a fish-bearing stream, and it must also include sensitive sites such as seeps or springs. In addition, there is a 30-foot equipment limitation zone along the entire length of the stream. Mitigation is required if forest practices disturb more than 10% of the equipment limitation zone.

For non-fish bearing seasonal streams (type N waters), there is a 30-foot equipment limitation zone. "Seasonal stream" means streams that are not perennial but are physically connected by a defined channel system to downstream waters so that water or sediment initially delivered to these waters may eventually be delivered to a type S or F Water. Harvesting may occur and mitigation is required if forest practices disturb more than 10% of the equipment limitation zone.

Current rules have RMZ up to 100 feet depending on the water type, stream width and the bed material for Water Types 1, 2, and 3. RMZ are not required for Type 4 and 5 waters.

Place illustration here.
The Core Zone is 50 feet wide. The Inner Zone, which allows forest management when certain conditions are met, is of variable length for Type S and F waters and can range from 10 to 100 feet wide. The Outer Zone has a 20 tree riparian leave tree condition and can vary from 22 to 67 feet wide.

Figure 1. RMZ for Type S and F waters, western Washington

Place illustration here.
For Type N perennial waters a non-contiguous buffer of 50 feet is required for at least 50% of the total length of the stream and must include the first 300 to 500 feet above the confluence of a fish-bearing stream. For perennial and seasonal streams there is a 30 feet equipment limitation zone.

Figure 2. RMZ for type N streams, western Washington

Eastern Washington RMZ requirements:

For fish-bearing streams (type S and F waters), a three-zone buffer is required as follows (see Figure 3):

1. Core zone. This is a 30 feet wide buffer extending from the bankfull width or CMZ whichever is larger on both sides of the stream for all timber habitat types. No timber harvest is allowed in this zone.

2. Inner zone. This is an area of limited harvest that is measured from the outer edge of the core zone and extends 45 feet for streams less than or equal to 15 feet wide and 70 feet for streams greater than 15 feet wide. Harvest is allowed in this zone when specific basal area requirements are met. These requirements vary based on the timber habitat type.

3. Outer zone. Measured from the outer edge of the inner zone, the width of this zone ranges from 0 to 55 feet, depending on the site class and the width of the stream. Harvest is permitted in this zone, but a certain number of leave trees must be left depending on the timber habitat type.

For non-fish bearing streams (type N waters), there is a 30-foot equipment limitation zone on either side of the stream. Mitigation is required if forest practices disturb more than 10% of this zone. In addition, for perennial type N water harvest is limited within 50 feet of the bankfull width of the stream. Within this zone, landowners must choose a clear-cut or partial cut strategy, each of which is subject to certain restrictions.

Current rules require RMZ up to 300 feet for even-aged harvests and 50 feet for partial cutting harvests. The number of trees per acre required depends on the soil type. RMZ are not required along Type 4 and 5 waters.

Place illustration here.
The Core Zone width is 30 feet. The Inner Zone, which allows forest management when certain conditions are met, is of variable length for Type S and F waters and can range from 45 to 70 feet wide. The Outer Zone has a width of 0 to 55 feet with a 10 to 15 tree riparian leave tree condition.

Figure 3. RMZ for Type S and F waters, eastern Washington

RMZ for Exempt 20-acre Parcels: On parcels of 20 contiguous acres or less, landowners with total parcel ownership of less than 80 forested acres are not required to leave the riparian buffers described above. These landowners are subject to the permanent riparian management zone rules and watershed analysis prescriptions in effect as of January 1, 1999, plus an additional 15% volume.

Unstable Slopes are specifically defined by slope gradient and geomorphic features. If, upon the application of the forest practices rules, unstable slopes are found, the landowner must submit a geo-technical evaluation prepared by a qualified expert of the unstable slopes. There is the potential for substantial compliance cost associated with unstable slopes, however, data to analyze the effect of unstable slopes is lacking at the time of this study.

Forest Roads and Wetlands: Changes to forest road management, design and construction have been made under the new proposed rules. Improved standards will be applied on Type N streams. Culverts must be designed or replaced to pass a 100-year flood rather than a 50-year flood. Ditch relief culverts must be spaced more closely. There is required erosion control for new roads where a potential for soil to enter a stream exists. Also road maintenance and abandonment plans will be required for all landowners. Landowners who own less than 500 hundred acres of land will have to submit a plan for their ownership with its first forest practices application. Those with more than 500 hundred acres of land must submit road plans for 20% of their lands each year for the next five years.

Under current rules road maintenance and abandonment plans are required based on watershed analysis prescriptions or Department of Natural Resources (DNR) request.

Increased protection of wetlands will be through refinements in wetland mapping as well as assessment of forested wetland functions. Landowners will be required to map all forested wetlands that are three or more acres in size.

Watershed Analysis will continue to be voluntary for landowners and mandatory for DNR.

Adaptive Management: Consideration will be made by the FPB regarding the requirements and definition of an adaptive management process.

Forest Pesticides: The new proposed rule changes apply a zero-drift and zero entry of aerially- applied forest pesticides into water policy. No data is analyzed to determine the compliance cost of forest pesticides. However, the compliance cost associated with this practice is not considered significant relative to other costs.

Cultural Resources protection under current rules will still be in place. Incidental protection provided to cultural resources in riparian habitats and wetlands will be increased in proportion to the increase in the amount of area protected under the new proposed rule changes.


REQUIREMENTS FOR AN SBEIS


Regulatory Fairness Act

The present analysis is in response to the RFA (RCW 19.85), which requires that a SBEIS be prepared for proposed rules that will impose more than minor costs on businesses in an industry. To comply with the RFA the study identifies potentially affected industries, defines small and large businesses and determines the compliance cost for these businesses. The study analyzes the compliance cost of the proposed rules and compares the cost of compliance for small businesses with the cost of compliance for large businesses.

If there is a disproportionate economic impact on small businesses in comparison with large businesses, the RFA requires that the cost imposed by the rule on small businesses be reduced where legal and feasible in meeting the objective of the statutes upon which the rule is based. If steps are not taken to reduce the costs on small businesses, the agency must provide reasonable justification for not doing so.

The DNR has identified a sample of affected businesses to determine the compliance cost of small and large businesses. The Department has also appointed a steering committee to assist in the accurate assessment of the costs of a proposed rule (RCW 19.85.030, 040).

Potentially Affected Industries

Businesses that own or control the cutting rights on forestland are the rule complying community. Aside from the landowner, the potentially affected industry includes loggers, mill owners and others holding timber cutting rights. Hence the complying community is defined broadly as those with the right to dispose of the timber. Even though forest landowners may have other aspects to their business such as agriculture, manufacturing, or other land-based businesses and may by classified as a different type of business than forest based, they comprise the potentially affected industries in this study. The study uses the term "forest business" to define this rule complying community in the study.

Small Businesses Versus Large Businesses

The RFA defines a "small business" as one with 50 or fewer employees. We apply this definition in our study using the business identification number associated with a land parcel to determine the number of employees associated with that business.

Compliance Cost for Businesses

Given the requirements to increase the riparian buffer requirements, forest businesses would incur a cost to comply with the rules when they decide to harvest their timber or sell their land assets. Such a cost results in a loss in current revenue, a loss in asset, and higher operating costs. The loss in asset reflects a loss in future timber revenue. In addition, these costs might trigger some other financial difficulties for small business owners and expose them to higher business risks. Even if the land is currently used for recreation or other non-timber uses, the business opportunities for the assets can be reduced due to the regulatory constraints.

Since forest-related assets have a long management cycle, the regulatory impacts will take place over a long period. The present value of compliance cost is used as an indicator of the regulatory impact. In other words, the regulatory impact is the difference between today's market value of a land asset with the proposed rules and today's market value without the new regulation in place.

In addition to the increased buffer requirements and their associated costs, forest businesses are also required to implement changes to forest road management, design and construction. The improved standards and the preparation of road maintenance and abandonment plans represent an additional cost for forest businesses to comply with the new proposed rule. As mentioned above, such a cost results in a loss in asset as well as higher operating costs. The present value of the cost of preparing and implementing new road standards is used as an estimate of the cost of compliance associated with changes to forest road management, design and construction under the new proposed rules.

Additional effort on the part of forest businesses is required to meet the requirements of the new proposed rules. Such efforts include, but are not limited to, hiring professionals to implement and gather the necessary information to submit a forest practice application. A successful forest practices application will require added cost to set up and implement a harvest. These additional activities will result in higher operating costs for forest businesses, which is included in the calculation of compliance cost.

Involvement of Concerned Stakeholders

The RFA requires the SBEIS to include a description of how the agency will involve small businesses in the development of the rule. While Forest and Fish negotiations were not held in a public forum, key stakeholders groups did participate in the process, which resulted in a conceptual rule proposal. Also, the FPB has received regular status reports at its public meeting, which include opportunities for public comment3.

In addition, a Steering Committee comprised of general public members from various stakeholder groups was formed to act as advisors and reviewers for the SBEIS. A presentation of work-in-progress on the SBEIS was made to the Steering Committee during April and October 2000.


METHODS OF ANALYSIS


The study uses the cost per one hundred dollars of sales to estimate the effect of the rule changes and the payments under the Salmon Recovery Act (ESBH 2091)4 on forest businesses. The foregone present value of timber sales is calculated by multiplying the acres in RMZ for each timber type by the average value for recent timber sales by each county. Data on the number of acres affected under the new proposed rule changes, the value of timber sales per acre by county and the timber type by vegetation and age are used to calculate the foregone present value of timber sales.

The effect of the rule changes is reported as a net effect. The net effect is determined by subtracting the acres in stream buffers under rules existing prior to the current emergency rules from acres proposed for RMZ under the new proposed rule changes. Economically inaccessible acres are added to the net changes associated with the new proposed rule changes to determine the effect of the new proposed rule changes.

The parcel's timber value is determined using data on the average value per acre for the last three years of timber sales from each county. The present value for pole timber is determined using a 5.8% discount rate and 30 year maturity date. The present value calculation for recently cut areas (reproduction acres) uses a 5.8% discount rate and 50-year maturity date. In the RMZ, the present value for recently cut areas represents a sunk cost of recent planting expenditures that is carried forward with the intention of harvesting mature timber at rotation age. In addition to the foregone timber sale value, we calculate a bare land value for all acres by multiplying acres by an average, regional bare land value.

For timberland owners who fall under the 20 acres exemption rule, we calculate 15% of the volume of timber under current forest practice rules and multiply it by the county average value for recent timber sales.

The effect of rule changes on forest businesses in the lumber dependent economy is measured as the change in output, price and employment. The changes are calculated using the estimated timber volume in RMZ that is no longer available for harvest. The volume is determined by multiplying the net area in RMZ by average volume per acre for each vegetation type. The calculated timber volume is converted to lost employment using an employee per thousand board foot multiplier.

The effect of compensation payments is determined using the established formula for small landowners. Since the definition of a small harvester is different for forest practices than the RFA, small landowners are identified using a potential harvest limit of two million board feet, as stipulated in the compensation program and defined by forest practices.


DATA


The study utilizes GIS and other data provided by the DNR. The DNR has collected detailed spatial information for 158 random sections within Washington State. Ninety-two sections were sampled in western Washington and 66 sections were sampled in eastern Washington. Selection criteria were that the section must include private ownership; it must contain some forestland; and it must not be entirely within a habitat conservation plan area or an urban growth area.

The GIS data for the sections include section boundaries, parcel information from the county assessor's office, timber stand/land cover information from photo interpretation, buffer zones for the proposed new rules and current rules, new water type and road information (see Figure 4).

Place illustration here.
Figure 4. A sampled section with water and buffer information for a single ownership.

The assumptions on western Washington buffers were based on slope and water type. Buffer widths were digitized in GIS to reflect the riparian habitat management requirements summarized previously under the proposed new rules section. In western Washington, for Type S and F waters, a buffer width of 170 feet on each side was established. The 170-foot buffer corresponds to the core and inner zone width, which has a maximum width of 150 feet, plus 20 feet for the outer zone. The additional 20 feet of width assumes the 20 riparian leave trees per acre would cover an additional 20 feet of buffer on average. Type N waters received a 50-foot buffer stream for perennial streams and a 30-foot buffer for seasonal streams. There is a 50% allowance for harvest from perennial buffer. Harvesting is permitted in the seasonal stream buffer with appropriate mitigation.

In eastern Washington, for Type S and F waters, a buffer width of 100 feet on each side was established. The 100-foot buffer corresponds to the core and inner zone, which has a maximum width of 100 feet. The width of the outer zone is 0 to 55 feet depending on site and stream width. In eastern Washington for Type N waters a 50-foot buffer stream was established for perennial streams and a 30-foot buffer was measured for seasonal streams.

Economically inaccessible acres were identified by visually examining each section to determine whether the proposed buffers alter accessibility to other areas in the parcel. The data on inaccessible acres was incorporated into the GIS database. To determine economic accessibility the study assumes forest businesses decide not to cross a stream under the new regulations because the area in question has a value lower than what it would cost to cross the stream. Selecting inaccessible areas was carried out by first assigning a technician the task of identifying potentially inaccessible areas using GIS software. A three-person team also evaluated the areas and determined if the areas would be classified as inaccessible. Several factors were considered when determining the accessibility of the areas. Size of the area in question was considered important. A small sliver that is cut from the rest of the parcel is more likely to be considered inaccessible than if the whole parcel is cut off because of the larger value associated with harvesting a larger land area. The number and size of additional parcels the landowner must cross to get around the stream was also considered important. Ownership patterns were also considered, since the same owner may own neighboring parcels. Finally, roads outside the sample section were consulted to determine whether areas bounded by the section boundary were inaccessible. In western Washington 219 acres were classified as inaccessible. In eastern Washington 209 acres were classified as inaccessible. Examples of inaccessible areas are pictured in Figure 5.

Place illustration here.
Figure 5. Economically inaccessible areas are indicated as brown (dark) triangles in the lower right portion of the chart.

Forest businesses with a total forestland ownership of less than eighty acres were identified from the parcel data collected from county records. Within this group, parcels that contained 20 acres or less were identified. These forest businesses, which meet both conditions, are deemed exempt from the new proposed rule changes and are also analyzed. They are subject to the permanent forest practices rules in effect as of January 1, 1999 plus increase protection equal to 15% of the total land area.

The timber stand/land cover information is classified into 11 categories based on earlier work by DNR (1997)5. Codes used for the forest-type are listed in parenthesis.

Brush/recent clear cut (eastern Washington data only) (B) 0 - 5 years
Reproduction(R) 5 - 15 years
Conifer Pole timber (CP) 15 - 30 years
Conifer Saw timber (CS) 30 - 100 years
Over Mature conifer timber (CL) 100+ years
Hardwood Pole timber (HP) 15 - 30 years
Hardwood Saw timber (HS) 30 - 60 years
Over Mature hardwood timber (HL) 60+ years
Mixed conifer/hardwood pole timber (MP) (30% - 70%)
Mixed conifer/hardwood saw timber (MS) (30% - 70%)
Mixed conifer/hardwood over mature timber (ML)) (30% - 70%)
The study uses the average value of timber sales per acre over the last three years aggregated for each county from the Department of Revenue (DOR). The average value of timber sales is calculated by using the total sales value divided by total acres, then aggregated by county to find an average county figure. This value is then matched to each parcel's county. To be able to use the DOR values we assume that the vegetation distribution for the average sale is similar to the vegetation distribution of RMZ acres and that the saw and mature timber stand types are harvestable. The advantage of using the value per acre parameter is that it permits calculating the timber asset value without introducing more complex assumptions on a species' volume distributions and their corresponding prices for each potential sale.

Table 1 illustrates the per acre values calculated for each county. We apply these values to the sum of acres in the pole timber type (CP, HP, MP), saw timber type (CS, HS, MS) and over-mature timber type (CL, HL, ML). In eastern Washington, Kittitas and Okanogan counties had less than $1000 per acre values. In western Washington, Kitsap County had the lowest per acre values followed by Jefferson and Mason counties.

Table 1. Per acre values based on Department of Revenue data on recent timber sales.

Eastside Counties Westside Counties
County Per acre valuea County Per acre valuea
CHELAN $2,451.89 CLALLAM $10,560.76
COLUMBIA $4,642.83 CLARK $11,004.14
FERRY $1,058.02 COWLITZ $12,659.27
GARFIELD $2,451.89 GRAYS HARBOR $14,592.31
KITTITAS $778.47 JEFFERSON $6,238.56
KLICKITAT $3,499.87 KING $12,742.27
LINCOLN $2,451.89 KITSAP $3,721.30
OKANOGAN $786.73 LEWIS $13,034.25
PEND OREILLE $2,451.89 MASON $8,427.62
SPOKANE $3,500.00 PACIFIC $13,420.28
STEVENS $2,187.43 PIERCE $12,585.76
SKAGIT $10,863.43
SKAMANIA $13,206.64
SNOHOMISH $13,365.47
THURSTON $12,798.15
WAHKIAKUM $13,047.26
WHATCOM $11,459.97
a per acre average calculated using Department of Revenue timber sale data from July 1997 to March 2000.

The study assumes a value of future harvests on reproduction acres where there has been a cost incurred in the establishment of a new stand. To capture the future loss in revenues associated with this sunk cost, we calculate the NPV at a 5.8% discount rate using the DOR per acre values 50 years into the future. The sunk cost is an addition to the bare land value. Table 2 presents the county sunk cost estimate used to determine replanting investments associated with the reproduction timber type acres. The calculation assumes constant real prices will continue into the future.

Table 2. Reproduction acres sunk cost calculations.

Western Washington Eastern Washington
County Per acre value County Per acre value
CLALLAM $ 630.10 CHELAN $ 146.29
CLARK $ 656.56 COLUMBIA $ 277.01
COWLITZ $ 755.31 FERRY $ 63.13
GRAYS HARBOR $ 870.64 GARFIELD $ 146.29
JEFFERSON $ 372.22 KITTITAS $ 46.45
KING $ 760.26 KLICKITAT $ 208.82
KITSAP $ 222.03 LINCOLN $ 146.29
LEWIS $ 777.68 OKANOGAN $ 46.94
MASON $ 502.83 PEND OREILLE $ 146.29
PACIFIC $ 800.72 SPOKANE $ 208.83
PIERCE $ 750.92 STEVENS $ 130.51
SKAGIT $ 648.16
SKAMANIA $ 787.97
SNOHOMISH $ 797.45
THURSTON $ 763.60
WAHKIAKUM $ 778.46
WHATCOM $ 683.75
Source: Uses DOR per acre values discounted 50 years at 5.8%

The study utilizes land values published by Mason, Bruce & Girard, Inc. (1997)6. The average land value is $452 per acre for western Washington and $44 per acre for eastern Washington. The volume of timber is taken from an earlier SBEIS on water typing (DNR 1997)7. Table 3 replicates the data for western and eastern Washington.

Table 3. Estimated volume of board feet for the timber types

Timber Type Western Washington Eastern Washington
Non-Forest 0 0
Brush n.a. 0
Reproduction 0 0
Conifer Pole 12,000 9,600
Conifer Saw 40,000 32,000
Conifer Large Saw 75,000
Hardwood Pole 5,000 4,000
Hardwood Saw 20,000 16,000
Hardwood Large Saw 35,000
Mixed pole 15,000 12,000
Mixed saw 30,000 24,000
Data on Uniform Business Identification (UBI) and employment from county records was collected by the DNR and incorporated into the GIS database. Each parcel was assigned to one of two categories depending on whether or not there were greater than 50 employees in the business.

The study uses GIS transportation information for each parcel in the sample to determine the compliance cost of road maintenance and stream crossings. The compliance cost is the present value of total road maintenance and stream crossing costs distributed evenly over a 15-year period. Table 4 presents the number of stream crossing by large and small businesses.

Table 4. Number of stream crossings

Western Washington Eastern Washington
Large Business
Type S,F 161 18
Type N perennial 117 15
Type N seasonal 342 19
Small Business
Type S,F 49 17
Type N perennial 7 0
Type N seasonal 2 3
Table 5 summarizes the road miles associated with large and small businesses in western and eastern Washington.

Table 5. Number of road miles

Western Washington Eastern Washington
Large Business Small Business Large Business Small Business
Road miles 202 44 30 15
Maintenance and repair costs assumptions are presented in Table 6. These estimates were derived from personal communications between DNR and representatives from large and small enterprises in western and eastern Washington.

Table 6. Per unit costs for stream crossings and road miles used in the analysis.

Western Washington Eastern Washington
Stream Crossing
Type S,F $40,000 $41,000
Type N perennial $5,933 $5,267
Type N seasonal $1,500 $3,200
Roads (per mile) $12,000 $12,000
Stream miles are used to calculate setup costs. RMZ setup cost estimates were derived from personal communications between DNR and representatives from large and small enterprises. The estimates were broken down by water type. Table 7 categorizes stream miles by water types between large and small businesses for western and eastern Washington. RMZ setup costs associated with 1000 feet of stream are presented in Table 8.

Table 7. Stream length in 1,000 feet.

Western Washington Eastern Washington
Large Businesses
S, F type 725.1 168.7
N type 975.4 593.9
Small Businesses
S, F type 294.6 140.6
N type 40.2 23.3

Table 8. Setup costs per 1000 feet of stream

Western and Eastern Washington
Large Business Small Business
Type S,F $470 $940
Type N $140 $280
Employment data was gathered from the US Census, County Business Patterns for Washington. Table 9 presents employment multipliers used to calculate the effects of the volume reduction on employment in the lumber dependent economy. Significant changes in the employment multipliers have occurred since 1987. We use the 1997 figure to represent the current employment condition and do not incorporate any adjustments that might occur over time.

Table 9. Eastern Washington employment per million board feet

SIC 8 SIC 24 SIC 26 SIC 241 SIC 242 SIC 243 SIC 503 SIC 511
1987 0.04 5.14 1.32 1.11 2.98 0.84 0.71 1.62
1988 0.10 5.42 0.89 1.29 3.08 0.68 0.65 0.50
1993 0.12 7.74 1.99 1.74 3.69 1.59 0.98 0.75
1994 0.21 8.51 2.23 1.89 3.67 1.83 1.20 0.84
1995 0.20 7.87 2.16 1.72 2.31 2.66 1.19 0.74
1996 0.11 6.09 1.99 1.29 1.75 2.40 1.09 0.80
1997 0.25 6.71 2.13 1.28 2.67 2.09 0.78 0.78
Averages
87-93 0.09 6.10 1.40 1.38 3.25 1.04 0.78 0.95
94-97 0.20 7.29 2.13 1.55 2.60 2.24 1.07 0.79
Source: U.S. Census Bureau 1987-1997. County Business Patterns (SIC)

Table 10. Western Washington employment per million board feet.

SIC 8 SIC 24 SIC 26 SIC 241 SIC 242 SIC 243 SIC 503 SIC 511
1987 0.42 5.13 1.89 1.56 1.57 1.33 0.84 0.47
1988 0.40 5.16 2.56 1.55 1.77 1.34 0.93 0.52
1993 0.59 8.01 4.54 2.28 2.55 2.20 1.70 1.14
1994 0.58 8.01 4.52 2.27 2.66 2.18 1.81 1.24
1995 0.57 7.44 4.38 2.04 2.49 2.02 1.98 1.13
1996 0.57 7.60 4.12 2.19 2.44 2.07 2.09 1.26
1997 0.57 7.87 4.21 2.06 2.64 2.19 1.98 1.38
Averages