Wading out of the Tilla-Muck: reducing timber harvests in the Tillamook and Clatsop state forests, and protecting rural timber economies through ecosystem service programs.

• Author: Wigington, Tim G.
• Position: I. Introduction through III. The Statutory Framework: Interpreting the Meaning of GPV, p. 1275-1305

1. INTRODUCTION II. THE ORS 530 LANDS OF THE TILLAMOOK AND CLATSOP STATE FORESTS AND CONFLICT REGARDING THEIR MANAGEMENT A. The Origins of the ORS 530 Lands and the Counties' Economic Dependence on Them B. Increasing Management Controversy III. THE STATUTORY FRAMEWORK: INTERPRETING THE MEANING OF GPV A. Interpreting the GPV Mandate Under the State v. Gaines Framework B. Statutory Interpretation Implications from Tillamook I C. A Duty to Maximize Timber Revenues From Partnership Principles? IV. DECOUPLING COUNTY BUDGETS FROM ORS 530 TIMBER HARVEST REVENUES A. Economic Benefits of Decoupling. B. Ecological Benefits of Decoupling Correcting the Statutory Incentive to Maximize Timber Harvests D. Socio Political Benefits of Decoupling V. MODELING THE REVENUE GAP CREATED BY AN AGREEMENT TO MANAGE CRITICAL HABITAT IN ORS 530 LANDS FOR PERMANENT CONSERVATION A. Modeling the Revenue Gap That Results from Decoupling 1. Revenue Shortfalls in Clatsop, Tillamook and Washington Counties Resulting from Decreased Timber Harvesting 2. Impact of Decreased Timber Harvesting on Timber Jobs B. Impact of Decoupling on Statewide School Equalization Funding VI. FUNDING OPTIONS FOR DECOUPLED LANDS: UPFRONT FUNDING INFUSION AND ECOSYSTEM SERVICE MONETIZATION PROGRAMS " A. Upfront Funding Infusion B. ORS 530 Land Revenue from Non-Extractive Ecosystem Services 1. Monetizing the Watershed Values of the ORS 530 Lands 2. Monetizing the C[O.sub.2] Sequestration Value of the ORS 530 Lands a. Voluntary Carbon Offset Schemes in the United States b. Regulatory Schemes to Trade Forest Carbon 3. Monetizing the Recreation and Aesthetic Values of the ORS 530 Lands a. Collection of State Forest Fees--Siuslaw National Forest Comparative Case Study b. Salmon Surcharge on Sport Fishing Licenses c. State Highway Toll for US 26 and US 6. VII. CONCLUSION I. INTRODUCTION

   As a result of high moisture, moderate temperatures, and low fire frequency, the Tillamook and Clatsop State Forests of the Oregon Pacific Coast Range (1) support a year-long growing season that produces a rich array of animal and plant species. (2) These same conditions also lead to the growth of large trees that are valuable as timber. (3) In many places within the forests, preservation of the biologically unique forest ecosystem cannot coexist with the long-entrenched timber harvesting industry. (4) In the late 1800s and early 1900s, exploitative and often fraudulent timber harvesting (and profiteering) dominated Oregon's economic and political landscape. (5) In an effort to provide a more measured alternative to true timber primacy, the state legislature passed a series of acts in the 1930s and 1940s instructing how to manage forestland acquired by the state in a more multi-faceted way. (6) As a result of this legislation, the counties that primarily house these state forests--Clatsop, Tillamook, and Washington Counties, hereafter referred to as the "counties" (7)--have relied on harvests to support their local budgets and thus have a vested interest in keeping harvests high. (8) Because of this interest, the counties have effectively lobbied the state to favor timber-centric management of these state forest units. (9) However, management that consistently allows for high harvest levels is not ecologically sustainable, and may not comply with Oregon's legal standards. As such, a change of course that monetizes non-timber values and creates proper management incentivizes is necessary.

   This preference for timber-centric management of state forests dates back to Oregon's pioneer days, and is thus deeply ingrained in the region's conscience. Although timber harvesting in the Pacific Coast Range began in the 1830s, the industry expanded enormously around the turn of the twentieth century when market demand, railway improvements, and capital improved access to the timber supply. (10) As the industry matured, timber syndicates flourished, as did corrupt acquisition of public land. (11) Because the price for Northwest timber was high, private forestland owners were able to pay their property taxes to the counties. (12) After a few boom decades, this arrangement unraveled in the 1920s when depressed timber markets meant unpaid taxes, and the counties were forced to foreclose upon large swaths of tax-delinquent land. (13) And, as the Great Depression, aggressive harvesting practices, and almost two decades worth of large forest fires conspired to create economic and ecological mire in the forests, more timber companies found themselves in possession of cut-over, burned, low-value timberland on which they could no longer pay their property taxes. (14)

   The counties thus acquired large tracts of this private forestland during the 1930s, 1940s, and 1950s. (15) Although these lands produced little revenue in their cut-over condition, the counties still owed large tax debts to the state. (16) Concerned about the amount of foreclosed land held by the counties, (17) the Oregon legislature passed a series of laws--now codified at Oregon Revised Statutes chapter 530 (ORS 530)--that allowed the counties to deed these lands to the state and established a formula under which the counties would receive payments for timber harvested off of the acquired lands. (18) Although there is little doubt that all parties expected future revenues from timber harvests, the unique "greatest permanent value" management mandate enacted for these acquired "ORS 530 lands" (19) clearly anticipated a long-range approach that would consider multiple forest values in the management calculus.

   After enacting these laws, the state financed and conducted a massive rehabilitation effort of many of these dilapidated lands. (20) As harvestable trees grew, the counties began to earn (and continue to earn) significant revenues from timber harvests on ORS 530 lands. Although the formula has been amended over time, (21) the counties now receive approximately 57 cents from every $1 of net revenue earned by the states from the acquired ORS 530 lands. (22) Because the greatest potential source of revenue has been timber harvest, county politicians have advocated strongly for a management scheme in which timber harvesting of the ORS 530 lands predominates. And for many years, especially during and following World War II, the Oregon Board of Forestry (BOF) and the Oregon Department of Forestry (ODF)--collectively referred to as "Forestry" (23)--made policy and management decisions regarding the ORS 530 lands that allowed for timber harvest maximization. (24) Together, these circumstances set the stage for the counties' dependency on timber harvests from the ORS 530 lands, especially in the Clatsop and Tillamook State Forests. (25)

   Tensions over management of the ORS 530 lands have heightened during the last three decades as changed legal, economic, demographic, and social forces reshaped the Oregon political and economic landscape. (26) Namely, as timber supply from federal lands declined following a series of species protection lawsuits, pressure increased to log the state forests. (27) In addition, international timber became competitive and the Oregon forest products industry shrunk significantly. (28) As these fundamental shifts occurred, the drive to achieve less timber-centric management on the ORS 530 lands gained momentum. However, because the counties' cultural and economic fates are tied to this fading, one-dimensional "lord of yesterday," (29) they have sought a timber-centric management approach. At the same time, conservation, fishing, and recreational interests have called for limits to harvesting. As such, the management of ORS 530 lands is a socially and economically charged issue. (30)

   On top of these economic and socio-historical layers, the scope of the legal mandate governing ORS 530 lands is also controversial, albeit clear. According to the statute, ORS 530 lands must be managed for their "greatest permanent value" (31) (GPV). The meaning of this phrase is at the center of the debate regarding ORS 530 land management, and is best understood by summarizing the briefing conducted in a 2005 Tillamook County Circuit Court case, Tillamook County v. Oregon (Tillamook II). (32) On one side, the counties argued that the state forestry laws enacted in the 1930s and 1940s, combined with the circumstances surrounding their enactment, created an arrangement whereby the counties would deed the damaged forestlands to the state in exchange for an agreement to maximize timber harvest revenues for their benefit. (33) In response, the state countered that the counties misinterpreted the legislative intent behind GPV. (34) The state argued that the statutes did not create a duty to maximize revenues for the counties, and that other sources of law and historical circumstances, although arguably compelling, were not included in the statute or legislative history, and thus could not be relied upon as proof of the arrangement. (35) As such, the state argued that GPV required the balancing of multiple forest values, not just timber harvest revenue maximization. (36) Although the county circuit court resolved the dispute in favor of the counties in Tillamook II, (37) this Comment argues that the basis for this holding was incorrect, especially in light of State v. Gaines, (38) the state's established statutory construction framework, and the guidance provided by the Oregon Supreme Court in Tillamook County v. State Board of Forestry (Tillamook I). (39)

   In Oregon, the meaning of statutory phrases is determined by applying the Gaines framework. (40) The goal of the Gaines analysis is to identify legislative intent. (41) In identifying the legislative intent behind a statute, Oregon courts must analyze the provision's "text and context" (42) and may give weight to any legislative history offered by the parties. (43) If this process is inconclusive, courts will then rely on applicable maxims of statutory interpretation to interpret and...