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.

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

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.

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

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

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 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.

"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.

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.

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.

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.

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
87-93	0.47	6.10	3.00	1.80	1.96	1.63	1.16	0.71
94-97	0.57	7.73	4.30	2.14	2.56	2.12	1.97	1.25

Source: U.S. Census Bureau 1987-1997. County Business Patterns (SIC)

Total harvests for western and eastern Washington are 3.258 BBF and 0.999 BBF respectively for 1997⁸. The total harvest numbers are used to derive the wage losses for the state.

The study uses the long-term derived price elasticity of demand for sawlogs from Perez-Garcia and Kraley (2000)⁹ to analyze the medium and long-term effects of the new proposed rule changes. The elasticity estimate presented in that study ranges from -0.42 to -0.56.

Data was imported into spreadsheets for analysis and determination of the compliance cost ratios. A first step in the data analysis is to identify the two study groups for the SBEIS. Businesses with 50 or more employees were classified as large businesses. All other businesses were classified as small businesses.

In western Washington 1,327 businesses were included in the sample. Twenty-five businesses are classified as large businesses. The study uses all of the largest businesses in the sample to describe the 10% of businesses that are the largest businesses required to comply.

In eastern Washington 624 businesses were included in the sample. Fourteen businesses are classified as large businesses. As in the case of western Washington, the study uses all of the largest businesses in the sample to describe the 10% of businesses that are the largest businesses required to comply.

Table 11. Acreage distribution for Washington sample.

	Western Washington	Eastern Washington
	Acreagea	Acreagea
Large Businessesb	26,860	5,597
Small Businessesc	19,040	23,142
> 20 acres ownerships	10,895	17,108
< 20 acres ownershipsd	8,145	6,034
Grand Total	45,900	28,739

^a includes all timber type categories.

^b businesses with 50 or more employees.

^c all owners that are not classified as large businesses.

^d acres associated with owners under the 20 acre exemption rule.

Table 11 displays the acreage distribution for western and eastern Washington. This distribution is important since it is the basis for calculating the timber parcel asset value and the foregone sales associated with the RMZ. In western Washington the majority of the acreage is owned by large businesses, while in eastern Washington the majority of the acreage is owned by small businesses. A significant number of businesses own less than 20 acres of land in western and eastern Washington. In western Washington 43% of the land is owned in 20 acre or smaller parcels and in eastern Washington 16% of the land is owned in 20 acre or smaller parcels.

Figure 6 presents the percent of acres found in total forested acres, the acres affected by rule changes (proposed rules acres minus current buffer acres plus inaccessible acres), and non-impacted acres for the western Washington. The chart includes all acres in the sample except for those classified as non-forested, brush or grasslands. The percent is calculated as the acres in the timber type category divided by the total acres times 100%.

Figure 6. Western Washington acre distribution by forest types.

The vast majority of acres in the western Washington sample are in the reproduction stage (R) and coniferous pole timber (CP) categories, followed by mixed pole timber (MP) and conifer saw timber (CS). The three categories represent close to three-quarters of the acres in the sample. There is a lower percentage of acreage in reproduction, coniferous pole timber, mixed pole timber, and coniferous saw timber type in the RMZ acres than the non-impacted acres. There is also a higher percent of acres in the hardwood pole (HP), hardwood saw timber (HS) and mixed saw timber (MS) categories in RMZ buffer acres than non-impacted acres.¹⁰

The eastern Washington distribution of sampled acres by forest type is markedly different than the western Washington sample as illustrated by Figure 7. Most of the acres have an older structure with coniferous pole (CP) and saw timber (CS) representing over 80% of the acres. The riparian management acres also have a larger percentage of acres in coniferous saw timber (CS) than non-impacted acres. There is a lower percent of acres in the reproductive forest type category for the riparian management acres. Therefore, a larger percent of non-impacted acres are in the reproduction (R) forest-type categories. This situation is also true for the coniferous pole (CP) timber. For the conifer saw timber (CS), the regulated acres have a higher percent than the non-impacted acres.

Figure 7. Eastern Washington acre distribution by forest types.

The next chart (Figure 8) describes the acreage distribution of hardwood vegetation in buffers among small and large businesses for those firms that have hardwood vegetation. The chart illustrates, for example, for those firms that have 20% of the buffer area in hardwood or mixed forest type, the remaining area would contain 80% of the conifer type. The figure suggests small firms have a higher percentage of their land area in buffers in hardwood or mixed vegetation types. The average percentage for small businesses is 49% versus 35% for large businesses.

Place illustration here.

Figure 8. Percentage of Buffer Area in Hardwood or Mixed Vegetation Type

Table 12 below presents the distribution of acres under hardwood or mixed vegetation among stream types. A larger proportion of the acreage is found in buffers around fish bearing streams for small businesses. It implies that small businesses will have fewer management alternatives available to them since there are fewer options to harvest timber from fish bearing stream buffers.

Table 12: Percent of hardwood or mixed vegetation buffer acres under proposed rules by stream type

	Fish Bearing Streams	Non-fish Bearing Streams
		Perennial	Seasonal
Large Businesses	82%	7%	10%
Small Businesses	97%	2%	1%

THE NET EFFECT OF PROPOSED NEW RULES ON FOREST BUSINESS VALUES

Table 13 presents the ratios required by the RFA (rows 6 and 12) examining the conditions before and after the new proposed permanent rule.

Table 13: The Effect of New Proposed Rules on Timber Asset Values

		1		2
		Large Businesses	Ratio	Small Businesses	Ratio
	Western Washington
1	Total Parcel Asset Value	$ 95,531,561		$ 30,044,668
2	RMZ foregone sales	$ 10,603,826	11.1%	$ 5,736,794	19.1%
3	Road Maintenance and Stream Crossings	$ 6,609,668	6.9%	$ 1,667,200	5.5%
4	Setup Cost	$ 477,341	0.5%	$ 288,188	1.0%
5	Total Cost for Timber businesses (2+3+4)	$ 17,690,835	18.5%	$ 7,692,182	25.6%
6	Ratio (5 / 1)	18.5%		25.6%
	Eastern Washington
7	Total Parcel Asset Value	$ 4,778,859		$ 3,824,189
8	RMZ foregone sales	$ 199,695	4.2%	$ 467,858	12.2%
9	Road Maintenance and Stream Crossings	$ 811,612	17.0%	$ 579,968	15.2%
10	Setup Cost	$ 45,447	1.0%	$ 138,663	3.6%
11	Total Cost for Timber businesses (8+9+10)	$ 1,056,754	22.1%	$ 1,186,489	31.0%
12	Ratio (11 / 7)	22.1%		31.0%

Notes: RMZ foregone sales do not include cost associated for mitigation on seasonal Type N waters with equipment limitation zone. Fifty percent harvests occur on Type N perennial waters. RMZ foregone sales (row 2 and 8) assume forest management in inner and outer zones of Type S, and F buffers permits 50% of harvest for large businesses. BLV was taken from WF&PA estimate.

Table 13, rows 1 and 7 contain the total parcel asset value for western and eastern Washington respectively. They are determined by calculating the value of total acreage for each sampled business and then summing them to arrive at the sample total. The RMZ foregone sale values (rows 2 and 8 for western and eastern Washington, respectively) are determined by calculating the value of net acres under the new proposed rule changes for each sampled business, then summing it for the sample total. Road maintenance and stream crossings and RMZ setup costs are calculated in a similar manner. The total cost (rows 5 and 11) for western and eastern Washington is the sum of the RMZ foregone sales, road maintenance and stream crossing cost and setup cost.

In western Washington, small businesses will bear a larger impact than large businesses, 25.6% versus 18.5%. In eastern Washington, small businesses will bear a larger impact than large businesses, 31.0% versus 22.1%.

The major component of compliance cost in western Washington is the foregone sales associated with the establishment of riparian habitat buffers. The effect is disproportionately larger for small businesses (19.1%) versus large businesses (11.1%). Road maintenance and stream crossing cost add an additional 6.9% and 5.5% of the total asset value for large and small businesses respectively. The effect on large businesses is slightly larger than the impact on small businesses. RMZ setup costs add a smaller percentage to the new proposed rule compliance cost -- 0.5% and 1.0% 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, it is more than three quarters of the compliance cost. For small businesses, road maintenance and stream crossings comprise nearly half of the compliance costs. Small businesses also incur a substantial cost in the form of foregone sales associated with establishing RMZ. Twelve percent of the total parcel asset value for small businesses is compliance cost related to RMZ versus 4.2% for large businesses. RMZ setup costs are also three times as large for small businesses than large businesses.

Place illustration here.

Source: Washington Mill Survey (various years). Class D mills are less than 40,000 board feet per lumber tally capacity per 8 hour shift; Class C mills are 40,000 to 79,999 bf; Class B mills are 80,000 to 119,999 bf; Class A mills are 120,000+ bf. (No survey was conducted in 1994)

Figure 9. Total sawmill log consumption by mill-size classes

Figure 9 illustrates log consumption by the four mill-size classes defined in the Washington Mill Survey. Timber harvests declined from a peak of 3 billion board feet (BBF) in 1988 to just under 2.5 BBF in 1996. Adjustments in the larger Type A mills occurred by 1990. Since then, including the period of reduced timber supply from federal lands, log consumption by the smaller-sized mills has declined. The chart suggests that the smaller mills reduced their consumption of saw logs during reduced harvests from public and private lands from environmental restrictions in the early 1990's more so than the largest mills.

Even though the full impact from the supply restrictions was alleviated in part by the diversion of log exports to domestic mills, the survey suggests that smaller mills were not able to compete with larger mills for these logs. A log export ban was implemented in the early 1990s restricting exports of logs produced from state lands. The reduction in the volume of logs consumed by the saw-milling sector from 1988 to 1992 is 17%. The volume reduction due to the new proposed rule changes is 16% on average across the state. A 16% reduction in saw log availability is equivalent to 0.4 BBF, about the consumption of Type D, C and B mills in 1996. As the size of the export log market continues to decline_and as a consequence the buffer of timber available to divert to the domestic market -- competition among domestic mills for available logs will be greater. It is likely that the smaller mills will face stronger competition for their log supply. The effect of a tighter log market for smaller mills is likely to be delayed with a weakening in demand as is projected for the 2001 calendar year. The implication is that further closures of small mills are likely to take place.

While data readily exists for the saw-milling sector (SIC 241) from the biennial mill survey, no such data is readily available for other sectors. It is likely that they will behave similarly, with the exception of SIC 26, Pulp and Paper. Forestry (SIC 08) is largely composed of units less than 50 employees in both eastern and western Washington (see Appendix Table A1 for employment breakdown). Ninety-seven percent of the logging firms (SIC 241) are small businesses. They comprise 58% of the employment. Seventy-five percent of the western sawmills, plywood mills (SIC 242) are small businesses (less than 50 employees) employing 12% of the all SIC 242 employees for first quarter 2000. Sixty percent of the SIC 242 mills in eastern Washington are small businesses employing 11% of the workers in SIC 242.

Table 14. Employment Costs

Multiplier		1997 Employment	Reduced Employment	Lost Employment	1997 Avg. Salary	Lost Wages
Eastern Washington
SIC_8	0.25	246	225	21	$23,919	$502,299
SIC_24	6.71	6513	5969	544	$28,269	$15,378,336
SIC_26	2.13	2068	1895	173	$38,951	$6,738,523
SIC_241	1.28	1246	1142	104	$27,291	$2,838,264
SIC_242	2.67	2595	2378	217	$28,812	$6,252,204
SIC_243	2.09	2034	1864	170	$22,282	$3,787,940
SIC_503	0.78	760	696	63	$38,027	$2,395,701
SIC_511	0.78	762	698	64	$32,541	$2,082,624
Western Washington
SIC_8	0.57	1860	1491	369	$22,885	$8,444,565
SIC_24	7.87	25580	20509	5071	$30,406	$154,188,826
SIC_26	4.21	13676	10965	2711	$45,253	$122,680,883
SIC_241	2.06	6681	5356	1324	$32,250	$42,699,000
SIC_242	2.64	8588	6886	1702	$33,235	$56,565,970
SIC_243	2.19	7131	5717	1414	$27,223	$38,493,322
SIC_503	1.98	6451	5172	1279	$33,774	$43,196,946
SIC_511	1.38	4473	3586	887	$25,274	$22,418,038

Table 14 calculates lost wages associated with a reduction in harvest of 10% in eastern Washington and 20% in western Washington, by sector. Since timber has a long management cycle, the impact of lower timber harvests on employment will take place over time and depends on market conditions that are discussed below. Nevertheless, the lost employment from a reduced timber base suggests substantial wage losses and potentially large disproportionate impacts on small businesses. The losses amount to nearly $16 million in eastern Washington for the forestry and saw-milling sectors (mostly assumed to impact small businesses) and nearly $7 million for the pulp and paper sectors (mostly assumed to impact large businesses). In western Washington, the losses are over $160 million for the saw-milling and forestry sectors (again assumed to be mostly small businesses) and $123 million for the pulp and paper sectors.

Market conditions may potentially affect the impact of increased riparian habitat buffers on the timber asset values and employment losses through a price effect. In particular, potential price changes may influence the value of the timber that can be sold and hence reduce the cost of compliance for some forest businesses. The higher timber values would benefit timber owners while timber purchasers would face increased raw material costs to the extent that they cannot pass on the increase to final consumers. Given the national and international nature of both the lumber and pulp and paper markets, Washington mills do not possess the market power to influence market prices, hence their ability to pass on the added costs to consumer is limited. Nevertheless, timberland owners may see an increase in value and this potential increase needs to be evaluated.

The price response depends on the percent substitution of foregone timber harvests and existing market demand conditions. The greater this substitution, the lower the effect on price, the less likely timber prices will change. Lower demand for wood products will also lower any upward price pressure from lower timber harvests. Over time, as demand recovers, the foregone timber will likely be substituted by harvests from other areas, which is likely to lessen any growth in the price of timber from reduced supplies. As a result the potential increase in value of timber that can be sold may not be very large due to substitution possibilities and reduced demand.

The potential reduction in timber volume for western Washington is estimated at 650 million board feet. The price elasticity of timber¹¹ suggests that unless demand declines and no substitute timber is available to fill in for the shortfall, prices may increase by 40%. However, there is likely to be a decline in demand that will offset the projected timber shortage and prevent timber prices from climbing higher. That reduction in demand may be as large as a 2.5% drop in housing starts for next year, which would lower current log consumption by as much as 7.5% for 2001. This demand decline may be large enough to offset a substantial portion of the estimated 650 million board foot decline in timber supply. Harvests in the short-term from available non-impacted acres can further reduce the price effect from increased riparian buffer area. Therefore, in the short-term, prices may not rise due to these two factors that will offset and substitute for the reduced timber availability. With the recovery of lumber markets in 2002, renewed demand pressure will likely impose upward pressure on timber prices. Renewed upward price pressure over the medium and long term may occur. However, substitution from other areas where timber costs are lower may offset any substantial price increase associated with the reduced harvest in western Washington in the longer term. As a result, if a price increase results from reduced timber availability, it is likely to be short-term in nature and have a minimal impact on the cost of compliance.

The situation in eastern Washington is similar. The same decline in demand expected in the western region is also likely to reduce any immediate price increase in the timber markets. The projected reduction of 97 million board feet in timber would result in a price increase of nearly 20% if no reduction in demand or timber substitution were to occur. However, both the expected reduction in demand and the availability of non-impacted area timber in the short-term is likely to reduce any potential price increase to timber owners.

In response to RFA, the FPB and the Washington State Legislature have taken steps to reduce the cost of the proposed new forest practices rules on small businesses. The steps include the following:

1) Delaying compliance timetables - Road maintenance and abandonment plans required by the new rules have different submittal deadlines for small landowners. Small landowners are allowed to submit the road maintenance and abandonment plan concurrent with an application so the landowners would be closer in time to realizing revenue from a harvest.

2) A riparian easement program was established for small landowners who harvest less than two million board feet of timber per year. This program acquires easements from small forest landowners along riparian and other areas of value to the State for protection of aquatic resources. The participants are compensated for trees that are required to be left after harvest in the riparian area.

The compensation program would pay an estimated $0.68 on average for western Washington small landowners for every $1.00 of lost sales resulting from new RMZ. The estimate is calculated using the sampled businesses, identifying small harvesters based on available timber for harvests in the short term¹². The total compensation package for the small businesses that were sampled for the study would total $3.9 million compared to the $5.7 million in lost sales associated with the RMZ.

The compensation for eastern Washington is estimated at $0.50 on average for small landowners for every $1.00 of lost sales from the new RMZ. The total compensation for those businesses sampled amounts to $233,000 compared to the $467,000 in foregone 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.

3) 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 forest practices rules for riparian protection but 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 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, the mitigation 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).

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

5) The DNR established a small forest landowner office to be a resource and focal point for small forest landowner concerns.

6) Other mitigation measures listed in the new proposed forest practices rules that 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 equal or a greater level of protection of public resources. Those landowners that have unusual constraints that make it difficult to comply with the forest practices rules as written have an 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 A2. Water type miles by old and new typing for western Washington

Water Body and Stream Miles
Western Washington		Code 1		1 Total	Code 2		2 Total	Code 3		3 Total	Grand Total
WATER_TYPE CNTY		no	yes		no	yes		no	yes
1	CLALLAM	4.35	1.51	5.87							5.87
	CLARK	0.20		0.20							0.20
	COWLITZ	0.53	1.27	1.80							1.80
	GRAYS HARBOR	3.92	1.31	5.24							5.24
	JEFFERSON	4.02	0.24	4.25							4.25
	KING	6.58		6.58							6.58
	LEWIS	1.74	0.95	2.69							2.69
	MASON	5.13	3.05	8.18							8.18
	PACIFIC	0.28	4.51	4.79							4.79
	SKAGIT	0.73		0.73							0.73
	SKAMANIA	1.95	0.43	2.38							2.38
	SNOHOMISH	5.31		5.31							5.31
	THURSTON	2.97		2.97							2.97
	WAHKIAKUM		0.05	0.05							0.05
	WHATCOM	2.24		2.24							2.24
1 Total		39.96	13.32	53.28							53.28
2	CLALLAM	0.10	0.04	0.14							0.14
	GRAYS HARBOR	2.39	1.23	3.61							3.61
	KING	0.35		0.35							0.35
	MASON	0.43	1.39	1.82							1.82
	PACIFIC		0.86	0.86							0.86
	SNOHOMISH	1.09		1.09							1.09
	WHATCOM	0.33		0.33							0.33
2 Total		4.68	3.51	8.19							8.19
3	CLALLAM	4.23	3.07	7.30							7.30
	COWLITZ	0.08	2.25	2.32							2.32
	GRAYS HARBOR	2.93	11.92	14.85							14.85
	JEFFERSON	0.79		0.79							0.79
	KING	3.91	2.17	6.08				0.06		0.06	6.14
	KITSAP	2.20		2.20							2.20
	LEWIS	2.56	4.41	6.96							6.96
	MASON	2.58	4.88	7.46							7.46
	PACIFIC	0.05	6.78	6.84							6.84
	PIERCE	0.14	4.61	4.75							4.75
	SNOHOMISH	2.79		2.79							2.79
	THURSTON	0.19		0.19							0.19
	WHATCOM	1.06		1.06							1.06
3 Total		23.51	40.08	63.59				0.06		0.06	63.65
4	CLALLAM	1.23	1.08	2.31	0.00	0.30	0.31	0.30	0.45	0.75	3.36
	CLARK	1.25		1.25							1.25
	COWLITZ		3.82	3.82		3.41	3.41		0.69	0.69	7.92
	GRAYS HARBOR	0.59	3.27	3.87	0.00	0.28	0.28		0.10	0.10	4.25
	JEFFERSON	0.31		0.31							0.31
	KING	0.34	0.63	0.97	0.22	0.70	0.92	0.25	2.37	2.62	4.50
	KITSAP	0.31		0.31	0.66		0.66	0.13		0.13	1.10
	LEWIS	1.69	1.75	3.44		1.13	1.13		0.52	0.52	5.08
	MASON	2.91	0.43	3.33		0.51	0.51		0.86	0.86	4.70
	PACIFIC		4.66	4.66		2.71	2.71		2.05	2.05	9.42
	PIERCE	0.16	1.08	1.23							1.23
	SKAGIT	0.43		0.43							0.43
	SKAMANIA			0.00				0.04	0.65	0.69	0.69
	SNOHOMISH	1.64	0.15	1.79	0.12		0.12				1.91
	WAHKIAKUM		0.50	0.50		0.12	0.12		0.22	0.22	0.84
	WHATCOM	1.04		1.04							1.04
4 Total		11.90	17.36	29.25	1.01	9.15	10.16	0.72	7.90	8.62	48.03
5	CLALLAM	5.02	3.91	8.93	1.61	0.44	2.05	3.51	1.89	5.40	16.38
	CLARK	0.61		0.61	0.81		0.81				1.42
	COWLITZ	0.04	2.12	2.16		6.74	6.74		11.39	11.39	20.28
	GRAYS HARBOR	4.82	14.95	19.77	0.25	9.50	9.76	0.35	6.05	6.40	35.93
	JEFFERSON	1.70	0.03	1.73	0.88	0.30	1.19	0.35		0.35	3.27
	KING	0.71	1.44	2.15	1.07	1.22	2.30	2.83	8.47	11.31	15.75
	KITSAP	2.62		2.62							2.62
	LEWIS	6.55	3.65	10.20	0.17	2.34	2.52	0.29	8.05	8.34	21.05
	MASON	1.31	3.50	4.81		0.69	0.69		3.18	3.18	8.68
	PACIFIC	0.60	6.75	7.36		7.21	7.21		10.82	10.82	25.39
	PIERCE		3.06	3.06		0.86	0.86		1.15	1.15	5.07
	SKAMANIA	0.00	0.17	0.17	0.09		0.09	0.21	0.31	0.52	0.77
	SNOHOMISH	1.92		1.92	0.58		0.58				2.50
	WAHKIAKUM	0.13	1.50	1.63		1.62	1.62	0.09	2.44	2.53	5.78
5 Total		26.02	41.09	67.11	5.46	30.94	36.40	7.64	53.74	61.38	164.88
9	CLALLAM	0.16	0.21	0.37							0.37
	CLARK	3.18		3.18	0.14		0.14				3.32
	COWLITZ		0.44	0.44	0.18	2.01	2.19		6.40	6.40	9.04
	GRAYS HARBOR	1.17	2.84	4.00	0.82	2.67	3.49	0.10	3.10	3.20	10.69
	JEFFERSON	0.52		0.52	0.73		0.73	0.11		0.11	1.36
	KING	1.48	2.14	3.62	0.27	0.42	0.68	0.94	5.43	6.37	10.67
	KITSAP	0.97		0.97							0.97
	LEWIS	6.62	4.41	11.03	1.42	2.68	4.10	3.37	15.40	18.77	33.90
	MASON	9.87	4.40	14.27	0.11	0.78	0.89	0.23	4.62	4.85	20.01
	PACIFIC	0.76	5.53	6.28		7.61	7.61		24.39	24.39	38.28
	PIERCE	1.02	0.71	1.73		0.08	0.08				1.81
	SKAMANIA			0.00	0.05		0.05	1.00	0.28	1.27	1.33
	SNOHOMISH	4.07	0.04	4.12		0.25	0.25				4.37
	THURSTON	5.13		5.13	0.18		0.18	0.41		0.41	5.72
	WAHKIAKUM	0.18	1.25	1.42		2.02	2.02		4.86	4.86	8.31
	WHATCOM	1.72		1.72							1.72
9 Total		36.85	21.96	58.81	3.89	18.53	22.42	6.15	64.48	70.63	151.86
Grand Total		142.91	137.32	280.23	10.36	58.61	68.97	14.56	126.13	140.69	489.89

Notes: Yes indicates that the miles occur on large business holdings. No indicates that miles occur on small business holdings. New Code 1 indicates water type S and F. New Code 2 indicates water type N, perennial stream. New Code 3 indicates water type N, seasonal stream.

Table A3. Water type miles for eastern Washington

Water Body and Stream Miles
Eastern Washington		New Code 1		1 Total	New Code 2		2 Total	New Code 3		3 Total	Grand Total
WATER_TYPE CNTY		YES	NO		YES	NO		YES	NO
1	CHELAN		0.64	0.64							0.64
	FERRY		0.62	0.62							0.62
	KITTITAS		0.82	0.82							0.82
	OKANOGAN		5.57	5.57							5.57
	SPOKANE		3.63	3.63							3.63
	STEVENS		10.46	10.46							10.46
1 Total			21.73	21.73							21.73
2	KLICKITAT		2.53	2.53							2.53
	OKANOGAN		1.98	1.98							1.98
	SPOKANE		0.18	0.18							0.18
	STEVENS	0.04	6.03	6.07							6.07
2 Total		0.04	10.71	10.76							10.76
3	CHELAN		0.33	0.33							0.33
	FERRY	1.14	0.06	1.20							1.20
	GARFIELD		1.22	1.22							1.22
	KITTITAS	1.28	0.36	1.64							1.64
	KLICKITAT	1.40		1.40							1.40
	OKANOGAN		3.66	3.66							3.66
	PEND OREILLE		0.19	0.19							0.19
	SPOKANE		1.71	1.71							1.71
	STEVENS	1.25	2.85	4.10							4.10
3 Total		5.06	10.38	15.44							15.44
4	CHELAN	1.03	2.98	4.01							4.01
	COLUMBIA		1.03	1.03							1.03
	FERRY							0.27		0.27	0.27
	KITTITAS				0.22	0.80	1.02				1.02
	KLICKITAT	0.60	5.81	6.41		0.36	0.36				6.77
	OKANOGAN		3.69	3.69		1.22	1.22		0.21	0.21	5.11
	PEND OREILLE		4.00	4.00							4.00
	SPOKANE		2.49	2.49							2.49
	STEVENS	0.97	9.11	10.08	0.05	0.73	0.78		0.91	0.91	11.77
4 Total		2.60	29.11	31.71	0.27	3.11	3.38	0.27	1.12	1.38	36.47
5	CHELAN	0.76	2.03	2.79	2.65	1.15	3.81	7.60	9.58	17.18	23.78
	COLUMBIA	0.30	1.55	1.85		0.44	0.44				2.29
	FERRY	0.04	0.04	0.07	0.24		0.24	2.55		2.55	2.87
	GARFIELD		0.51	0.51		0.88	0.88		0.59	0.59	1.98
	KITTITAS	0.12	1.06	1.17	0.82	0.24	1.06	1.40		1.40	3.63
	KLICKITAT	0.55	7.57	8.12		0.58	0.58		0.03	0.03	8.74
	LINCOLN		0.49	0.49							0.49
	OKANOGAN		6.73	6.73		7.35	7.35		1.15	1.15	15.23
	PEND OREILLE		4.53	4.53		1.57	1.57		2.77	2.77	8.87
	SPOKANE		3.52	3.52		0.14	0.14				3.66
	STEVENS	3.57	8.31	11.88	2.08	4.69	6.77	0.94	3.65	4.59	23.23
5 Total		5.34	36.32	41.67	5.79	17.05	22.84	12.49	17.77	30.26	94.77
Grand Total		13.05	108.26	121.31	6.06	20.16	26.22	12.76	18.88	31.64	179.17

¹ The 1999 Salmon Recovery Act, 1999 Laws, 1st Special Session, Chapter 4.

² Eastern Washington is defined as the area east of the crest of the Cascade Mountains from the international border to the top of Mt. Adams, then east of the ridge line dividing the White Salmon River drainage from the Lewis River drainage and east of the ridge line dividing the Little White Salmon River drainage from the Wind River drainage to the Washington-Oregon state line.

³ November 12, 1997, February 11, 1998, April 2, 1998, May 13, 1998, and August 12, 1998, Jan 29, 1999, Feb 10, 1999, Mar 31, 1999, June 17, 1999, July 21, 1999, Aug 10-11, 1999, Sept 29, 1999, Nov 16, 1999, Jan 20, 1999, Mar22, 1999, May 10, 1999. Some meetings were broadcast statewide on TV Washington.

⁴ The 1999 Salmon Recovery Act, 1999 Laws, 1st Special Session, Chapter 4.

⁵ Department of Natural Resources. (1997). Small Business Economic Impact Statement on Water Typing Rules.

⁶ Mason, Bruce & Girard, Inc. (1997). Proposed Statutory Land Values for Purposes of Forest Land Taxation in State of Washington

⁷ Department of Natural Resources. (1997). Small Business Economic Impact Statement on Water Typing Rules.

⁸ David Larson. 1998. Washington Timber Harvest 1997. Washington State Department of Natural Resources. Resource Planning and Asset, Olympia, Wa.

⁹ Perez-Garcia and Kraley. 2000. Long-term price elasticity of demand for timber from western and eastern Washington. Unpublished manuscript. University of Washington, College of Forest Resources, Seattle Wa.

¹⁰ Non-impacted acres are acres outside the RMZ in a parcel. The sum of acres in buffers and non-impacted acres is equal to forested acres.

¹¹ Perez-Garcia and Kraley. 2000. Long-term price elasticity of demand for timber from western and eastern Washington. Unpublished manuscript. University of Washington, College of Forest Resources, Seattle Wa.

¹² Small businesses are defined differently for the compensation program than under the RFA. However, the sampled businesses labeled as small are identical under both definitions.

A copy of the statement may be obtained by writing to Patricia Anderson, Department of Natural Resources, Forest Practices Division, P.O. Box 47012, Olympia, WA 98504-7012.

Section 201, chapter 403, Laws of 1995, applies to this rule adoption. Many of the proposed rules are significant legislative rules.

Hearing Location: Doubletree Hotel, 1507 North First Street, Yakima, WA, on April 24, 2001, at 3 p.m.; and at the Doubletree Hotel, 18740 Pacific Highway South, Seattle, WA, on April 25, 2001, at 3 p.m.

Assistance for Persons with Disabilities: Contact Rules Coordinator at (360) 902-1413, by April 16, 2001, TTY (360) 902-1125.

Submit Written Comments to: Patricia Anderson, Department of Natural Resources, Forest Practices Division, fax (360) 902-1789, by April 26, 2001, 5 p.m.

Date of Intended Adoption: May 17, 2001.

March 21, 2001

Doug Sutherland

Chair

OTS-4734.1

AMENDATORY SECTION(Amending Order 263, filed 6/16/76)

WAC 222-08-020   Orientation and training.   The department shall be responsible for a continuing program of orientation and training, relating to forest practices and ((regulation)) rules thereof, pursuant to RCW 76.09.250. Such program shall include:

(1) Investigation of current developments in and practical applications of forest resources and related technology.

(2) Continuing training of department personnel in the current status of forest resources technology and related disciplines.

(3) Dissemination of information on current forest practice technology to the public, in a manner determined by the department to be effective.

[Order 263, 222-08-020, filed 6/16/76.]

(1) Survey and identify all silviculturally related nonpoint sources of pollution and related control programs in the state,

(2) Prepare an analysis of the above activities and programs, and

(3) Report and recommend to the forest practices board and to the governor additional rules ((and regulations)), procedures and/or methods necessary for the control of such sources to the extent feasible.

[Statutory Authority: RCW 76.09.040, 76.09.170 and chapter 34.05 RCW. 94-01-134, 222-08-030, filed 12/20/93, effective 1/1/94; Order 263, 222-08-030, filed 6/16/76.]

OTS-3467.5

AMENDATORY SECTION(Amending WSR 97-24-091, filed 12/3/97, effective 1/3/98)

WAC 222-08-035   Continuing review of forest practices ((regulations)) rules.   *(1) Annual evaluations. The department, after consulting with affected state agencies, Indian tribes, forest landowners, fish and wildlife, natural resources, and environmental interest groups, shall beginning July 1, 1988, report annually to the forest practices board an assessment of how ((regulations)) the rules and voluntary processes are working.

*(2) Adaptive management program. ((The department is directed to report to the board on opportunities to modify these regulations when baseline data, monitoring, evaluation or the use of interdisciplinary teams show that such adaptive management will better meet the purposes and policies of the Forest Practices Act.)) The adaptive management program will be used to determine the effectiveness of forest practices rules in aiding the state's salmon recovery effort and provide recommendations to the board on proposed changes to forest practices rules to meet timber industry viability and salmon recovery. The program provides assurances that rules and guidance not meeting aquatic resource objectives will be modified in a streamlined and timely manner. The board may also use this program to adjust other forest practice rules and guidance in order to further the purposes of chapter 76.09 RCW. The specific components of the adaptive management program are set forth in WAC 222-12-045.

(3) Resource management plans. The department is directed to develop a method for cooperative voluntary resource management planning among forest landowners, governmental agencies, affected Indian tribes, and environmental groups which would result in the development of plans which might be used as an alternative to the forest practice ((regulations)) rules in achieving the purposes and policies set forth in the act. This should be done through pilot projects, at least one of which should be located on the east side of the Cascade summit and one on the west side of the Cascade summit.

[Statutory Authority: RCW 76.09.040 and chapter 34.05 RCW. 97-24-091, 222-08-035, filed 12/3/97, effective 1/3/98. Statutory Authority: RCW 76.09.040. 87-23-036 (Order 535), 222-08-035, filed 11/16/87, effective 1/1/88.]

OTS-3454.8

AMENDATORY SECTION(Amending Order 429, Resolution No. 8-8-84, filed 8/29/84, effective 10/1/84)

WAC 222-10-010   Policies and authorities.   (1) This chapter is promulgated pursuant to the authority granted in RCW 76.09.010, 43.21C.120 and chapter 197-11 WAC.

(2) The forest practices board, according to RCW 76.09.040, possesses the authority to promulgate forest practices ((regulations)) rules establishing minimum standards for forest practices and setting forth necessary administrative provisions.

(3) The forest practices board adopts by reference the policies of SEPA as set forth in RCW 43.21C.020.

(4) A ((Class IV-Special)) forest practices ((approval)) application or notification which requires a threshold determination will be conditioned when necessary to mitigate specific adverse impacts which are identified in the environmental documents prepared under SEPA. An application ((for a Class IV-Special forest practice)) or notification will be denied when the proposal would result in significant adverse impacts identified in a final or supplemental environmental impact statement prepared under SEPA, and reasonable mitigation measures are insufficient to mitigate the identified impacts and denial is consistent with all provisions of the acts cited in subsection (1) of this section.

(5) SEPA policies and procedures ((required for administration of Class IV-Special forest practices)) shall be implemented by the department of natural resources.

[Statutory Authority: RCW 43.21C.120, 76.09.040 and 42.30.075. 84-18-021 (Order 429, Resolution No. 8-8-84), 222-10-010, filed 8/29/84, effective 10/1/84; Order 258, 222-10-010, filed 5/21/76.]

(1) In order to determine whether such forest practices are likely to have a probable significant adverse impact, and therefore require an environmental impact statement, the applicant must submit the following additional information, prepared by a qualified expert. The expert must describe the potentially unstable landforms in and around the application site, and analyze:

(a) The likelihood that the proposed forest practices will cause movement on the potentially unstable slopes or landforms, or contribute to further movement of a potentially unstable slope or landform;

(b) The likelihood of delivery of sediment or debris to any public resources, or in a manner that would threaten public safety; and

(c) Any possible mitigation for the identified hazards and risks.

(2) The department's threshold determination will include an evaluation of whether the proposed forest practices:

(a) Are likely to increase the probability of a mass movement on or near the site;

(b) Would deliver sediment or debris to a public resource or would deliver sediment or debris in a manner that would threaten public safety; and

(c) Such movement and delivery are likely to cause significant adverse impacts.

If the department determines that (a), (b) and (c) of this subsection are likely to occur, then the forest practice is likely to have a probable significant adverse impact.

(3) The department will evaluate the proposal, using appropriate expertise and in consultation with other affected agencies and Indian tribes.

(4) Specific mitigation measures or conditions must be designed to avoid accelerating rates and magnitudes of mass wasting that could deliver sediment or debris to a public resource or could deliver sediment or debris in a manner that would threaten public safety.

(5) Qualified expert for the purposes of this section means a person with a master's degree in geology or geomorphology or a related field, or a significant amount of postgraduate course or thesis work or other training in geomorphology or mass movement, and an additional 3 years of field experience in the evaluation of relevant problems in forested lands.

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OTS-4746.1

AMENDATORY SECTION(Amending WSR 96-12-038, filed 5/31/96, effective 7/1/96)

WAC 222-10-041   Northern spotted owls.   The effective date of this section is July 1, 1996. The following policies shall apply to forest practices subject to SEPA if the forest practices may cause adverse impacts to northern spotted owls.

(1) In SOSEAs or areas of SOSEAs where the goal is demographic support, suitable spotted owl habitat should be maintained either to protect the viability of the owl(s) associated with each northern spotted owl site center or to provide demographic support for that particular SOSEA as described in the SOSEA goals.

(2) In SOSEAs or areas of SOSEAs where the goal is dispersal support, either suitable spotted owl habitat should be maintained to protect the viability of the owl(s) associated with each northern spotted owl site center or dispersal habitat should be managed, over time, to provide the dispersal support for that particular SOSEA as described in the SOSEA goals. Dispersal support is provided by a landscape which includes dispersal habitat at the stand level interspersed with areas of higher quality habitat. Stands of dispersal habitat should be managed to reduce gaps between stands and to maintain a sufficient level of dispersal habitat to meet the SOSEA goals over time.

(3) In SOSEAs or areas of SOSEAs where the goal is a combination of dispersal support and demographic support, either suitable spotted owl habitat should be maintained to protect the viability of the owl(s) associated with each northern spotted owl site center or a variety of habitat conditions should be provided which in total are more than dispersal support and less than demographic support. This can be accomplished by providing:

(a) Dispersal support as described in subsection (2) of this section;

(b) Areas of suitable spotted owl habitat that contain some opportunities for nesting as well as roosting and foraging habitat; and

(c) Connectivity between areas of SOSEAs designated for demographic support or adjacent federal lands which are designated as late successional reserves, congressionally reserved areas, or administratively withdrawn areas.

(4) Within SOSEAs, the following amounts of suitable habitat are generally assumed to be necessary to maintain the viability of the owl(s) associated with each northern spotted owl site center, in the absence of more specific data or a mitigation plan, as provided for in subsections (6) and (7) of this section respectively:

(a) All suitable spotted owl habitat within 0.7 mile of each northern spotted owl site center;

(b) Including the suitable spotted owl habitat identified in (a) of this subsection:

(i) For the Hoh-Clearwater/Coastal Link SOSEA - A total of 5,863 acres of suitable spotted owl habitat within the median home range circle (2.7 mile radius).

(ii) For all other SOSEAs - A total of 2,605 acres of suitable spotted owl habitat within the median home range circle (1.8 mile radius).

The department shall first identify the highest quality suitable spotted owl habitat for this purpose. Consideration shall be given to habitat quality, proximity to the activity center and contiguity in selecting the most suitable habitat. Suitable spotted owl habitat identified outside 0.7 mile of a northern spotted owl site center may support more than one median home range circle.

Suitable spotted owl habitat harvested by a landowner shall continue to be counted as part of the total acres necessary under (b) of this subsection for other landowners within the median home range circle if the harvest is conducted pursuant to agreements or plans approved under subsection (6) of this section or WAC 222-16-080 (1)(h)(iv), (6)(a), (b), or (((e))) (f).

(5) Outside SOSEAs, during the nesting season (between March 1 and August 31), seventy acres of the highest quality suitable spotted owl habitat surrounding a northern spotted owl site center should be maintained. The seventy acres for one site center shall not be utilized for meeting suitable habitat needs of any other site center.

(6) The assumptions set forth in subsection (4) of this section are based on regional data. Applicants or others may submit information that is more current, accurate, or specific to a northern spotted owl site center, proposal, or SOSEA circumstances or goals. The department shall use such information in making its determinations under this section where the department finds, in consultation with the department of fish and wildlife, that the information is more likely to be valid for the particular circumstances than the assumptions established under subsection (4) of this section. If the department does not use the information, it shall explain its reasons in writing to the applicant.

(7) The department shall consider measures to mitigate identified adverse impacts of an applicant's proposal. Mitigation measures must contribute to the achievement of SOSEA goals or to supporting the viability of impacted northern spotted owl site centers.

[Statutory Authority: Chapters 76.09 and 34.05 RCW. 96-12-038, 222-10-041, filed 5/31/96, effective 7/1/96.]

OTS-4728.1

NEW SECTION
WAC 222-10-125   Exemption from RCW 43.21C.030 (2)(c).   Decisions pertaining to the following are not subject to any procedural requirements implementing RCW 43.21C.030 (2)(c): Approval of forest road maintenance and abandonment plans, approval of future timber harvest schedules involving east-side clear cuts, acquisitions of forest lands in the riparian open space program; and acquisitions of conservation easements pertaining to forest lands in riparian zones under the forest riparian easement program.

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OTS-3481.3

AMENDATORY SECTION(Amending Order 263, filed 6/16/76)

WAC 222-12-010   Authority.   These forest practices ((regulations)) rules are adopted pursuant to chapter 76.09 RCW, RCW 76.13.100 through 76.13.130, and RCW 77.85.180 through 77.85.190. Where necessary to accomplish the purposes and policies stated in the act, the board is authorized to promulgate forest practices ((regulations establishing minimum standards for forest practices and setting forth necessary administrative provisions,)) rules pursuant to chapter ((34.04)) 34.05 RCW and in accordance with the procedures enumerated in the act. These rules establish minimum standards for forest practices, provide procedures for the voluntary development of resource management plans, set forth necessary administrative provisions, establish procedures for the collection and administration of forest practice fees, allow for the development of watershed analyses, and establish the riparian open space program. The board also establishes which forest practices will be included within each class and is authorized to adopt rules under RCW 76.09.055, 76.09.370, and 76.13.120(9).

Promulgation of all forest practices ((regulations)) rules shall be accomplished so that compliance with such forest practices ((regulations)) rules will achieve compliance with the water quality laws.

Those ((regulations)) rules marked with an asterisk (*) pertain to water quality protection; pursuant to RCW 76.09.040 they ((will also be adopted by the department of ecology and)) can be amended only by agreement between the board and the department of ecology.

Forest practices ((regulations)) rules shall be administered and enforced by the department except as otherwise provided in the act. Such ((regulations)) rules shall be administered so as to give consideration to all purposes and policies set forth in RCW 76.09.010.

[Order 263, 222-12-010, filed 6/16/76.]

OTS-3931.2

AMENDATORY SECTION(Amending WSR 94-01-134, filed 12/20/93, effective 1/1/94)

WAC 222-12-020   ((Regulation)) Rule sections.   These ((regulations)) rules are organized as follows:

	Chapter 222-08 WAC	Practices and procedures.
	Chapter 222-10 WAC	State Environmental Policy Act Guidelines.
	Chapter 222-12 WAC	Policy and organization.
	Chapter 222-16 WAC	Definitions.
	Chapter 222-20 WAC	Application and notification procedures.
	Chapter 222-21 WAC	Small forest landowner forestry riparian easement program.
	Chapter 222-22 WAC	Watershed analysis.
	Chapter 222-23 WAC	Riparian open space program.
	Chapter 222-24 WAC	Road construction and maintenance.
	Chapter 222-30 WAC	Timber harvesting.
	Chapter 222-34 WAC	Reforestation.
	Chapter 222-38 WAC	Forest chemicals.
	Chapter 222-42 WAC	Supplemental directives.
	Chapter 222-46 WAC	Consultation and enforcement.
	Chapter 222-50 WAC	Relationship to other laws and ((regulations)) rules.

[Statutory Authority: RCW 76.09.040, 76.09.170 and chapter 34.05 RCW. 94-01-134, 222-12-020, filed 12/20/93, effective 1/1/94. Statutory Authority: RCW 76.09.040 and chapter 34.05 RCW. 93-12-001, 222-12-020, filed 5/19/93, effective 6/19/93; Order 263, 222-12-020, filed 6/16/76.]

OTS-4727.2

AMENDATORY SECTION(Amending Order 535, filed 11/16/87, effective 1/1/88)

WAC 222-12-030   Classes of forest practices.   Forest practices are divided into four classes as specified by RCW 76.09.050. In certain emergencies, as defined in RCW 76.09.060(7), the application or notification may be submitted within 48 hours after commencement of the practice.

(1) Class I forest practices require no application or notification, but do require compliance with all other forest practices ((regulations)) rules.

(2) Class II forest practices require a notification to the department, and may begin 5 calendar days (or such lesser time as the department may determine) after receipt of a notification by the department ((of the notification)).

(3) Class III forest practices ((require an application which)) must be approved or disapproved within 30 or fewer calendar days of receipt of an application by the department. The department is directed to approve or disapprove within 14 calendar days Class III applications not requiring additional field review. Multiyear applications must be approved or disapproved within 45 days of receipt of an application by the department.

(4) Class IV forest practices are divided into "Class IV - special," and "Class IV - general," and ((require an application to the department which)) must be approved or disapproved within 30 calendar days of receipt of an application by the department, except that if a detailed environmental statement is necessary, additional time for approval or disapproval as specified in RCW 76.09.050 will be required.

[Statutory Authority: RCW 76.09.040. 87-23-036 (Order 535), 222-12-030, filed 11/16/87, effective 1/1/88; Order 263, 222-12-030, filed 6/16/76.]

(4) Landowners are encouraged to communicate with the departments of ecology, fish and wildlife, affected Indian tribes, the National Marine Fisheries Service, the United States Fish and Wildlife Service and other interested parties prior to submission of an application accompanied by an alternate plan.

[Statutory Authority: RCW 76.09.040 and chapter 34.05 RCW. 97-24-091, 222-12-040, filed 12/3/97, effective 1/3/98. Statutory Authority: RCW 76.09.040, 76.09.050 and chapter 34.05 RCW. 92-15-011, 222-12-040, filed 7/2/92, effective 8/2/92. Statutory Authority: RCW 76.09.040. 87-23-036 (Order 535), 222-12-040, filed 11/16/87, effective 1/1/88; Order 263, 222-12-040, filed 6/16/76.]

(2) Plan preparation. The landowner is responsible for preparing and submitting an alternate plan. Small forest landowners may wish to seek the assistance of the small forest landowner office. See WAC 222-12-0402.

(3) Contents of alternate plans. Alternate plans must contain all of the following:

(a) A map of the area covered at a scale acceptable to the department showing the location of any affected streams and other waters, wetlands, unstable slopes, and existing roads. The map must also show the location of proposed road construction, timber harvest, and other forest practices;

(b) A description of how the alternate plan provides public resource protection to meet the approval standard, including a description of the proposed alternate management strategy, prescriptions, and where applicable, aquatic resource enhancements;

(c) A list of the forest practices rules that the alternate management plan is intended to replace;

(d) Where applicable, descriptions of monitoring and adaptive management strategies, including landowner plans for annual performance reviews;

(e) Where applicable, descriptions of an implementation schedule; and

(f) When multiple forest practices applications are submitted with the same alternate plan or when an alternate plan has been used for previous applications, justification that the sites included in the plan share sufficient common physical characteristics and elements to be considered together.

(4) Review of proposed plan. Upon receipt of a forest practices application together with an alternate plan, the department will do all of the following:

(a) Appoint an interdisciplinary team.

(b) Establish a deadline for completion of the interdisciplinary team review that is consistent with the requirements of subsection (5) of this rule; and

(c) Within 5 business days of receipt of an application with an alternate plan, provide copies of the application and alternate plan to the departments of ecology and fish and wildlife, affected Indian tribes, the National Marine Fisheries Service, the United States Fish and Wildlife Service, and other parties that have expressed an interest in alternate plans in the area of the application. If the landowner is a small forest landowner under WAC 222-21-010(11), copies should also be provided to the small forest landowners office.

(5) Interdisciplinary team.

(a) The department will determine the members invited to participate on an interdisciplinary team. Teams will include members with the qualifications necessary to evaluate the alternate plan. A representative of any affected Indian tribe, and departments of ecology and fish and wildlife will be invited to participate. Each team will include a representative of the landowner and a professional forester employed by the department and shall be led by a department employee.

(b) The interdisciplinary team will conduct a site visit and submit a recommendation to the department at least 3 days prior to the expiration of the application time limit in WAC 222-20-020. The interdisciplinary team may submit a recommendation without a site visit if a small forest landowner under WAC 222-21-010(11) submitted the alternate plan using a template contained in the Alternate Plan Board Manual and is a low impact alternate plan and the team determines a visit is not necessary to evaluate the site specific application of a template or a low impact alternate plan.

(c) The recommendation of the interdisciplinary team shall indicate whether the alternate plan meets the approval standard, or what revisions are necessary to meet the approval standard. The team is intended to work with the landowner in an attempt to reach consensus on the efficacy of the alternate plan. In the absence of consensus, the team will forward reports reflecting the majority and minority opinions, or the landowner may elect to withdraw or revise the proposal.

(6) Approval standard. An alternate plan must provide protection for public resources at least equal in overall effectiveness to the protection provided in the act and rules.

(7) Approval, conditions, or disapproval. Upon receipt of the interdisciplinary team's recommendation, the department shall determine whether to approve, disapprove, or condition the application based on the approval standard. The department shall give substantial weight to the recommendations of the interdisciplinary team in cases where a consensus recommendation is forwarded. If the department disapproves or conditions a forest practices application with an alternate plan, the department will provide a written statement to the landowner explaining why the application was conditioned or denied.

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(2) Small forest landowners interested in alternate plans are encouraged to contact the small forest landowner office for assistance in preparing an alternate plan. The office may provide technical assistance in understanding and using the Alternate Plan Board Manual, assistance in developing an individualized alternate plan for the small forest landowner and facilitation of small forest landowner interactions with the department, other state agencies, federal agencies, affected Indian tribes and the interdisciplinary team that may review the small forest landowner's alternate plan.

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The manual should include:

(1) As required by RCW 76.13.110(3), the small forest landowner office recommendations for alternate plans or alternate harvest restrictions that meet riparian functions while generally requiring less costly regulatory prescriptions;

(2) The effectiveness of strategies for meeting resource objectives and protecting public resources;

(3) Template prescriptions designed to meet resource objectives to address common situations that are repeatedly addressed in alternate plans or strategies to simplify the development of future plans or strategies, including low impact situations and site-specific physical features;

(4) Appropriate recognition or credit for improving the condition of public resources; and

(5) Criteria to assist the department in determining whether a small forest landowner alternate plan qualifies as a low impact alternate plan.

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(1) Successful alternate plans, and small forest landowner alternate management strategies and processes that can be used by other small forest landowners as examples of the plan development and approval process;

(2) Auditing and monitoring results;

(3) Maintaining a list of technical experts available to landowners in preparing such plans; and

(4) Partnerships between the department and organizations supporting forest land stewardship principles.

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(2) The small landowners office is required by RCW 76.13.110(3) to evaluate the cumulative impact of alternate plans for small forest landowners on essential riparian functions at the subbasin or watershed level. The department will provide the result of this evaluation to the board.

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(1) Title 222 WAC establishes minimum standards for all forest practices, regardless of the class of forest practice application.

(2) Forest practices which have a potential for a substantial impact on the environment are classified as Class IV-Special or Class IV-General by WAC 222-16-050 and receive an evaluation as to whether or not a detailed statement must be prepared pursuant to chapter 43.21C RCW.

(3) Certain rules are designed to focus on specific aspects of cumulative effects of forest practices. For example:

(a) WAC 222-08-035 requires continuing review of the forest practices regulations and voluntary processes and adopts the concept of adaptive management. WAC 222-12-045 also adopts adaptive management.

(b) WAC 222-12-040 through 222-12-0404 allows alternate plans that ((equal or exceed the protection of public resources as provided in the act and rule)) provide protection to public resources at least equal in overall effectiveness to the protection provided in the Forest Practices Act and rules.

(c) WAC ((222-24-050(1))) 222-24-051 allows the department to require road maintenance and abandonment plans ((for those drainages or road systems the department determines based on physical evidence to have a potential to damage public resources)).

(d) WAC 222-30-025 addresses harvest unit size and separation requirements.

(e) Chapter 222-22 WAC addresses cumulative effects on the public resources of fish, water, and capital improvements of the state or its political subdivisions.

(f) Chapter 222-46 WAC establishes the enforcement policy for forest practices.

(((4) The board is considering measures to further protect cultural resources and wildlife resources. The board shall continue consultation with the departments of ecology, fish and wildlife, natural resources, forest landowners, and federally recognized tribes on these resource issues.))

[Statutory Authority: RCW 76.09.040 and chapter 34.05 RCW. 97-24-091, 222-12-046, filed 12/3/97, effective 1/3/98. Statutory Authority: RCW 76.09.040, 76.09.050 and chapter 34.05 RCW. 92-15-011, 222-12-046, filed 7/2/92, effective 8/2/92.]

(a) A violation of the act, or these rules, or

(b) A deviation from the approved application, or

(c) A willful or negligent disregard for potential damage to a public resource.

(2) Other required action. When a forest practice has not yet been completed, the department may issue either a notice to comply to the operator and/or landowner, or a stop work order to the operator, requiring him/her to prevent potential or continuing damage to a public resource where:

(a) The need for additional actions or restrictions has become evident, and

(b) The department determines that a specific course of action is needed to prevent potential or continuing damage to public resources, and

(c) The damage would result or is resulting from the forest practices activities, whether or not the activities involve any violation, unauthorized deviation or negligence.

(3) No notice to comply shall be issued to require a person to prevent, correct, or compensate for any damage to public resources which occurs more than 1 year after the date of completion of the forest practices operations involved exclusive of reforestation, unless such forest practices were not conducted in accordance with forest practices rules: Provided, That this provision shall not relieve the forest landowner from any obligation to comply with forest practices rules ((and regulations)) pertaining to providing continuing road maintenance.

(4) No notice to comply to recover money damages shall be issued more than 2 years after the date the damage involved occurs.

(5) In emergency action, where the department requires the operator or landowner to do immediate work in the bed of the stream the department shall first seek approval from the department of fish and wildlife.

[Statutory Authority: RCW 76.09.040 and chapter 34.05 RCW. 97-24-091, 222-12-050, filed 12/3/97, effective 1/3/98; 93-12-001, 222-12-050, filed 5/19/93, effective 6/19/93; Order 263, 222-12-050, filed 6/16/76.]

[Order 263, 222-12-070, filed 6/16/76.]

OTS-3463.8

NEW SECTION
WAC 222-12-041   Use of approved state and federal conservation agreements for aquatic resources.   (1) Forest practices consistent with an agreement described in subsection (3) below are exempt from the forest practices rules in chapters 222-22 through 222-38 WAC if the following criteria are met:

(a) The forest practices rule pertains to a species included within aquatic resources and that species is covered by an agreement listed in subsection (3) below; and

(b) The primary risk(s) to public resources addressed by the forest practice rules (e.g., delivery of sediment to waters from roads, harvest activities, or mass wasting events; chemical contamination of waters; inadequate recruitment of large woody debris; delivery of thermal energy to waters) is addressed in the agreement. The agreement may address the risk using different prescriptions, approaches, or timing than the forest practice rule.

(2)(a) When the landowner submits an application or notification, the landowner must include a proposed list of specific rules replaced.

(b) The department will review and confirm whether the rules identified by the landowner meet the criteria identified in subsection (1) above.

(c) At the request of the department, the landowner will confer in good faith with the department and provide the department and other interested parties with information necessary to assist the department in implementing this section.

(3) This section applies to landowners who are operating consistent with one of the following agreements that covers a species included within aquatic resources provided that the agreement has received environmental review with an opportunity for public comment under the National Environmental Policy Act, 42 U.S.C. section 4321 et seq., the Endangered Species Act, 16 U.S.C. section 1531 et seq., or the State Environmental Policy Act, chapter 43.21C RCW;

(a) A habitat conservation plan and incidental take permit approved by the Secretary of the Interior or Commerce pursuant to 16 U.S.C. section 1539(a);

(b) An incidental take statement issued by the Secretary of the Interior or Commerce pursuant to 16 U.S.C. 1536(b);

(c) An "unlisted species agreement" approved by the U.S. Fish and Wildlife Service or National Marine Fisheries Service; or

(d) A candidate conservation agreement or other cooperative or conservation agreement entered into with a federal or state fish and wildlife agency pursuant to its statutory authority for fish and wildlife protection.

For any agreement with a formal application date after July 1, 2001, the landowner must have made a good faith effort to involve the department of fish and wildlife, the department of ecology, department of natural resources, and affected Indian tribes in the development of the related plan or management strategy.

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(6) Process: The process to initiate proposals for consideration in the adaptive management program can be made by any of the empowered participants listed in this rule, or by the general public at forest practices board meetings. All project proposals will be prioritized by the forest practices board. Once a project has been approved for study, it will be systematically implemented by the program administrator through CMER and the independent scientific peer review process. Timely recommendations, based on the results of the study, will be forwarded from the TFW policy committee, or a similar collaborative forum, by the program administrator to the board for the appropriate action. Program process structure and requirements are outlined in the board manual (section 22).

[Statutory Authority: RCW 76.09.040. 87-23-036 (Order 535), 222-12-045, filed 11/16/87, effective 1/1/88.]