Since 1989 through 2012, according to the BLM, the Coos Bay Wagon Road grant lands have generated more than $73 million in revenue, most of it from timber sales. Since 2000, timber harvests alone have generated $17 million for the federal treasury and is supposed to benefit Coos and Douglas counties proportionately, but where is the money?
In recent years there has been a lot of debate about who should manage the Coos Bay Wagon Road grant lands. Currently managed by the BL M, the county’s approximately 60,000 acre share of CBWR accounts for less than 5% of the county’s total land mass but, depending upon whom you talk to, that sliver of land rich with federal timber could be the answer to all Coos County’s fiscal problems. The CBWR lands came into being through an 1869 Act of Congress in exchange for successfully constructing a military wagon road between Roseburg and Coos Bay, a road the county is responsible for maintaining to this day. A 1939 Act further distinguished the CBWR from the surrounding O&C lands by establishing both the manner of calculating payments and restricting the distribution of said payments proportionately to just Coos and Douglas counties. This explains why management of CBWR is so coveted by local entities like the Coquille Indian Tribe, 75% of any revenue is supposed to stay here.
The Act of 1939 also offers an option to decouple receipts paid to the counties from timber harvests and market demand through payments in lieu of taxes based upon the assessed “value of the land and the timber thereon.” Commissioner Bob Main, a former county assessor, estimates the annual payments using this method at approximately $10 million. Inexplicably, no commission to date has opted for this method choosing or perhaps gambling that timber harvest receipts would bring in more cash and right or wrong, up till now, they have at least had the choice. Senator Ron Wyden’s forest resources bill proposes to strip away that choice and permanently tether the county to the vagaries of the timber market.
Wyden’s bill proposes not only to deprive Coos County of 5% of its potential tax base but by tossing CBWR timber revenues into the collective pot to be divvied up between all eighteen O&C counties, the county will receive just a sixth of what it would under the 1939 Act. If the Senator fails to fully comprehend the distinction between CBWR and O&C he may be partially forgiven for precious little has been done by commissions past and present to enforce the 1939 Act. Congress has lumped CBWR receipts into the Secure Rural Schools payments distributed to all O&C counties without a peep of complaint from county commissioners.
The issues surrounding CBWR are undeniably complex and even the current commission gets confused. Wyden has been very clear he will not transfer management of federal lands, nevertheless the commissioners wrote a letter imploring the Senator to do just that and include a provision of HB 1526, Peter DeFazio’s bill giving control of CBWR to Coos County. The letter, penned by Melissa Cribbins and signed by all three commissioners, appears to conflate O&C lands with CBWR claiming the latter was “revested” to the federal government and ignores the prime distinguishing feature, that being the distribution of payments. Members of the O&C Rail Road Company engaged in and many were convicted of fraud prompting a 1916 Act that led to the revestiture of the O&C grant lands. Conversely, the Coos Bay Wagon Road Company met its contractual obligations to the federal government by building the road. Eventually, the CBWR was not revested, but instead reconveyed to the federal government.
Coos County citizens have long observed different entities fighting over whom best to manage the CBWR. The Coquille Tribe has repeated its claims to generate the most revenue but it can only do this if it is freed of the constraints of the Northwest Forest Plan and NEPA. The county wants to manage CBWR but only under the less restrictive Oregon Forest Practices Act. All three commissioners have snubbed pressure from local citizens to request Wyden enforce the existing Act of 1939 payment-in-lieu-of-taxes option, an option that would provide a predictable revenue stream decoupled from the timber industry. Cribbins went so far as to say the Senator might construe pressure to enforce the 1939 Act as “insulting.” Instead, the commission opted to wait to see what Wyden’s bill has to offer.
The bill is widely panned by the timber industry and the Association of O&C Counties as well as environmental groups. At the last commissioners’ meeting Main gave a long lament about how inadequate the bill is for Coos County. Now that the commissioners have at long last laid eyes on the bill, what are they going to do about?
There may be a silver lining, however, because in addition to highlighting the pitfalls of tethering the delivery of county services to timber receipts it may provide the final nudge to seeking alternatives. “I guess”, said Main with a shrug of his shoulders, “we are just going to have to figure this out for ourselves.” Amen to that!
No, Tony, I’m no relation to Russell Sadler. I have been asked that question many times.
Ron Sadler
In 1866, Congress established a land grant to promote completion of the O&C Railroad. This was followed in 1869 by a similar land grant to promote the construction of the Coos Bay Wagon Road. In both instances, the private companies receiving the land grants violated the terns thereof. As a result, the US Government revested about 2.9 million acres of O&C lands back into federal control in 1916, followed by the revestment of 93,000 acres of CBWR lands into federal control in 1919.
In 1937, Congress passed the O&C Lands Act which set up a program for permanent forest production on lands that included both the O&C lands and the CBWR. Title II of the Act set up the unique formula for the distribution of timber receipts from the O&C lands to the counties, but through an apparent oversight, failed to address the distribution of receipts generated on the CBWR lands.
In order to correct this oversight, the CBWR Grant Fund Act was passed in 1939. The simple solution, of course, would have been to include the CBWR receipts in the same distribution formula established for the O&C lands. For some reason, one of which may have been the Oregon delegation’s concern about the extremely low timber prices at that time, this course of action was not pursued. Rather, the 1939 Act states that the CBWR lands shall be appraised, assessed, and taxed in the same manner as comparable private forest lands. In other words, an ad valorem property tax would be paid to Coos and Douglas Counties. In order to accrue funds to pay these taxes, up to 75% of timber sale receipts in any given year would be deposited in a special fund in the US Treasury in order to be able to pay the annual ad valorem tax to the counties.
A committee containing both US Department of Interior and Coos and Douglas County representatives was set up to appraise the value of the lands involved and to determine the tax rates. The process worked smoothly until January 1, 1978 when the State of Oregon substituted a severance tax instead of an ad valorem tax on private timber lands.
A decision by the Comptroller General of the United States on June 13, 1978 found that payments to the counties involved could be made on the basis of a severance tax instead of an ad valorem tax, and that the payments in lieu of taxes were still not to exceed the 75% of timber sale receipts in any given year.
It is important to remember that the O&C and the CBWR lands were included together in the allowable cut computations over the years. As a result of this interplay, it is safe to say the CBWR land contributed funding to the counties many times over the in-lieu tax level by supporting increased allowable harvest levels on the whole. We need to remember, quick and easy fixes involving partitioning and segregating the forest land base may have serious negative effects over the long haul.
Excellent Ron. Concise yet very explanatory. Thank you. If I may inquire, are related to Russell Sadler?
Hi Ron, CBWR was reconveyed rather than revested. Yes, there were many similar shenanigans with respect to unauthorized land sales, etc… by the Coos Bay Wagon Road Company in the 1860s and ’70s but a judge ultimately decided in 1919 that the current owners could not be held responsible for those past actions.
I admit to being confused by your last paragraph.
Very informative article M, thank you. One can only hope that a lurking “economic development” minion reads it, understands it, and passes it along to the commissioners and explains it to them, or at the very least gives them a copy and asks “what does this mean?”
To answer your headline question – we voters rejected Don Gurney who understood what a timber is. It wont be who we elected, friend of the tribe Cribbins – the tribe who pays us nothing but expects us to give them our assets. Maybe if they only paid for the license plates on their autos it would help.