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Proposed Rule

Procedures for Appraising Recreation Residence Lots and for Managing Recreation Residence Uses Under Cabin User Fee Fairness Act

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Information about this document as published in the Federal Register.

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AGENCY:

Forest Service, USDA.

ACTION:

Notice of proposed directives; request for comment.

SUMMARY:

In conjunction with a proposed rule published elsewhere in this part of today's Federal Register, the Forest Service is proposing changes to its directives for managing recreation residence special use permits and for determining land use fees for recreation residences as required by the Cabin User Fee Fairness Act of 2000. Guidance to forest officers in the administration of recreation residences and the determination of land use fees is issued in the Forest Service Manual (FSM) Title 2300, Recreation, Wilderness, and Related Resource Management; FSM Title 2700, Special Uses Management; Forest Service Handbook (FSH) 2709.11, Special Uses Handbook; and FSH 5409.12, Appraisal Handbook. Numerous revisions to these directives are necessary to address the changes in administering and determining fees for recreation residence lots pursuant to the act. Comments received in response to this notice will be considered in development of the final directives and final rule.

DATES:

Comments must be received in writing by August 11, 2003.

ADDRESSES:

Send written comments to Forest Service, USDA, Attn: Director of Lands, Mail Stop 1104, Washington, DC 20250-1140; by electronic mail to the World Wide Web/Internet site at http://www2.srs.fs.fed.us/​cuffa/​cuffa.html or by fax to (202) 205-1604. If comments are sent by electronic mail or by fax, the public is requested not to send duplicate written comments via regular mail. Only one response is required to address provisions contained in these proposed directives and in the proposed rule published elsewhere in this part of today's Federal Register. Please confine written comments to issues pertinent to the proposed directives and proposed rule; explain the reasons for any recommended changes; and, where possible, reference the specific section or paragraph being addressed. Those responding to the proposed rule, directives, and appraisal guidelines may want to review the provisions of the Cabin User Fee Fairness Act of 2000 before formulating their response. A copy of the act may be viewed and downloaded from the World Wide Web/Internet site previously listed. The Forest Service may not include in the administrative record for the proposed directives and the proposed rule those comments it receives after the comment period closes (see DATES) or comments delivered to an address other than those listed in this ADDRESSES section.

All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received on these proposed directives in the Office of the Director, Lands Staff, Forest Service, USDA, 4th Floor-South, Sidney R. Yates Federal Building, 1400 Independence Avenue, SW., Washington, DC, between the hours of 8:30 a.m. to 4 p.m. on business days. Those wishing to inspect comments are encouraged to call ahead to (202) 205-1248 or (202) 205-1064 to facilitate entry into the building.

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FOR FURTHER INFORMATION CONTACT:

Randy Karstaedt, Lands Staff, (202) 205-1256, Forest Service, USDA.

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SUPPLEMENTARY INFORMATION:

Table of Contents

1. Background

2. Regulatory Certifications

  • Environmental Impact
  • Regulatory Impact
  • No Taking Implications
  • Civil Justice Reform
  • Unfunded Mandates
  • Federalism and Consultation and Coordination with Indian Tribal Governments
  • Energy Effects
  • Controlling Paperwork Burdens on the Public

3. Proposed Revisions to Recreation Residence Directives

  • Forest Service Manual
  • Chapter 2340, Privately Provided Recreation Opportunities (text of proposed directive)
  • Chapter 2720, Special Uses Administration (text of proposed directive)
  • Forest Service Handbook 2709.11—Special Uses
  • Chapter 30—Fee Determination (text of proposed directive)
  • Forest Service Handbook 5409.12—Appraisal Handbook
  • Chapter 6—Appraisal Contracting (text of proposed directive)
  • Table I—Section-by-Section Comparison Between the Current and Proposed Recreation Residence Directives

1. Background

An analysis of the history and development of policy and regulations Start Printed Page 25752for the administration of recreation residences is found in the notice of proposed rulemaking to Title 36, Code of Federal Regulations, part 251, subpart B (36 CFR part 251, subpart B) published elsewhere in this part of today's Federal Register.

Most of the changes required by the Cabin User Fee Fairness Act of 2000 (CUFFA) affect current recreation residence policy contained in the Forest Service Manual (FSM) and Forest Service Handbook (FSH) directives. Accordingly, the changes to recreation residence management identified in CUFFA will be implemented through revisions to the FSM and FSH pursuant to CUFFA. Table I at the end of this notice has been prepared as an aid to understanding the directive changes being proposed. Table I displays the recreation residence policy provision, its reference to the appropriate section of CUFFA, and a section-by-section comparison of the current and the proposed policy provisions.

2. Regulatory Certifications

Environmental Impact

These proposed directives revise the administrative procedures for determining market value for recreation residences on National Forest System lands. Section 31.1b of Forest Service Handbook (FSH) 1909.15 (57 FR 43180, September 18, 1992) excludes from documentation in an environmental assessment or impact statement “rules, regulations, or policies to establish Service-wide administrative procedures, program processes, or instructions.” The agency's preliminary assessment is that these proposed directives fall within this category of actions and that no extraordinary circumstances exist which would require preparation of an environmental assessment or environmental impact statement.

Regulatory Impact

These proposed directives have been reviewed under USDA procedures and Executive Order 12866 on Regulatory Planning and Review. It has been determined that this is not a significant action. The proposed directives would not have an annual effect of $100 million or more on the economy, or adversely affect productivity, competition, jobs, the environment, public health or safety, or State or local governments. The proposed directives would not interfere with an action taken or planned by another agency, or raise new legal or policy issues. Finally, these proposed directives would not alter the budgetary impacts of entitlements, grants, or loan programs or the rights and obligations of recipients of such programs.

No Takings Implications

These proposed directives have been analyzed in accordance with the principles and criteria contained in Executive Order 12630. It has been determined that the proposed directives do not pose the risk of a taking of constitutionally protected private property.

Civil Justice Reform

These proposed directives have been reviewed under Executive Order 12988, Civil Justice Reform. The agency has not identified any State or local laws or regulations that are in conflict with these proposed directives or that would impede full implementation of the proposed directives. Nonetheless, in the event that such a conflict were to be identified, the proposed directives, if implemented, would preempt the State and local laws or regulations found to be in conflict. However, in that case, (1) no retroactive effect would be given to these proposed directives; and (2) the Department would not require the use of administrative proceedings before parties may file suit in court challenging its provisions.

Unfunded Mandates

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), which the President signed into law on March 22, 1995, the agency has assessed the effects of these proposed directives on State, local, and tribal governments and the private sector. These proposed directives would not compel the expenditure of $100 million or more by any State, local, or tribal government or anyone in the private sector. Therefore, a statement under section 202 of the act is not required.

Federalism and Consultation and Coordination With Indian Tribal Governments

The agency has considered these proposed directives under the requirements of Executive Order 13132 on federalism, and has made an assessment that the proposed directives conform with the federalism principles set out in this Executive order; would not impose any compliance costs on the States; and would not have substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, the agency has determined that no further assessment of federalism implications is necessary at this time.

Moreover, these proposed directives do not have tribal implications as defined by Executive Order 13175, Consultation and Coordination With Indian Tribal Governments, and, therefore, advance consultation with tribes is not required.

Energy Effects

These proposed directives have been reviewed under Executive Order 13211 of May 18, 2001, “Actions Concerning Regulations That Significantly Affect Energy Supply.” It has been determined that these proposed directives do not constitute a significant energy action as defined in the Executive order.

Controlling Paperwork Burdens on the Public

These proposed directives do not contain any record-keeping or reporting requirements or other information collection requirements as defined in 5 U.S.C. part 1320 that are not already required by law or not already approved for use. Any information collection requested as a result of these directives have been approved by the Office of Management and Budget under control number 0596-0082. Accordingly, the review provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and its implementing regulations at 5 CFR part 1320 do not apply.

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Dated: April 3, 2003.

Dale N. Bosworth,

Chief.

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3. Proposed Revisions to Recreation Residence Directives

Note:

The Forest Service organizes its Directive System by alphanumeric codes and subject headings. Only those sections of the Forest Service Manual and Handbook that are the subject of this notice are set out here. The intended audience for this direction is Forest Service employees charged with issuing and administering recreation residence special use authorizations.

Forest Service Manual

Chapter 2340—Privately Provided Recreation Opportunities

2340.05—Definitions

* * * * *

Caretaker Cabin. A residence occupying a lot within a recreation residence tract that is being used to provide caretaker services and security to the recreation residences within that tract.

* * * * *
Start Printed Page 25753

2347.1—Recreation Residences

(For further direction, see FSM 2721.23 and FSH 2709.11.) Recreation residences are a valid use of National Forest System lands. They provide a unique recreation experience to a large number of owners of recreation residences, their families, and guests. To the maximum extent practicable, the recreation residence program shall be managed to preserve the opportunity it provides for individual and family-oriented recreation. It is Forest Service policy to continue recreation residence use and to work in partnership with holders of these permits to maximize the recreational benefits of recreation residences.

* * * * *

2347.12—Caretaker Cabins

2347.12a—Authorization

Authorize caretaker cabin use of a recreation residence lot with an annual permit, Form FS-2700-4, under the Act of June 4, 1897. Require applicants who currently have a recreation residence term special use permit to request that the Forest Service revoke their recreation residence permit, as a condition for qualifying for a caretaker cabin authorization. A caretaker cabin may be owned by a tract association, and the authorization may be issued in the name of the head of that association.

2347.12b—Caretaker Cabin Use

The need for a caretaker cabin rarely can be justified where yearlong occupancy is already authorized in the tract. The Forest Supervisor may authorize a caretaker cabin in limited cases where it is demonstrated that caretaker services are needed for the security of a recreation residence tract and alternative security measures are not feasible or reasonably available. The annual fees for a caretaker cabin special use permit shall not be greater than the fee charged for the use of the lot as a recreation residence, as determined by the fee for a typical lot representative of the group of lots that includes the lot upon which the caretaker cabin use is authorized.

* * * * *

Chapter 2720—Special Uses Administration

* * * * *

2721.23—Recreation Residences

* * * * *

2721.23d—Fee Determination

1. Use market value as determined by appraisal in determining the base annual fees for recreation residence lots. Determine a new base fee at 10-year intervals.

Forest Service Handbook (FSH) 2709.11—Special Uses Handbook

Chapter 30—Fee Determination

* * * * *

33—Recreation Residence Lot Fees

Recreation residence lot fees shall be assessed and paid annually.

33.05—Definitions

Cabin. A privately owned structure that is authorized to occupy National Forest System land for use as a recreation residence.

Market Value. The amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal.

Natural, Native State. The condition of a lot or site, free of any improvements, at the time at which the lot or site was first authorized for recreation residence use by the Forest Service.

Recreation Residence. A privately owned, noncommercial residence, and its auxiliary buildings and improvements, located upon National Forest System lands and authorized by a recreation residence term special use permit. A recreation residence is maintained by the permit holder for personal, family, and guest use and enjoyment. A recreation residence shall not serve as a permanent residence.

Recreation residence lot. (For this definition, see 36 CFR 251.51.)

Simple Majority. More than 50 percent.

Term Permit. (For this definition, see 36 CFR 251.51 and FSM 2705.)

Tract. An established location within a National Forest containing one or more cabins authorized in accordance with the recreation residence program.

Typical Lot. A recreation residence lot in a tract that is selected for appraisal purposes as being representative of value characteristics similar to other recreation residence lots within the tract. All recreation residence lots represented by a typical lot shall be characterized as a group for appraisal purposes. A tract may have one or more groups of lots, with each group represented by a typical lot. A typical lot may be the only recreation residence lot in a group, and may be appraised to represent only itself, when it has unique value characteristics unlike any other recreation residence lot in a tract.

33.1—Base Fees and Annual Adjustments

33.11—Establishing New Base Fee

The base fee for a recreation residence special use permit shall be equal to 5 percent of the market value of the recreation residence lot as determined by appraisal. The base fee shall be recalculated at least once every 10 years.

The authorized officer shall notify the holder in writing at least one (1) year in advance of implementation that a new base fee has been determined by appraisal conducted in accordance with procedures contained in section 33.4 of this Handbook. If a second appraisal, secured by the holder (sec. 33.7) and approved by the agency, prompts the authorized officer to reconsider the new base fee amount, the revision to the base fee may be implemented at any time after the end of the one-year period following the initial notification.

The date of a billing for payment of a new base fee, or the date of a billing for the first payment of a phase-in amount (sec. 33.12) of a new base fee, shall constitute the date of implementation of the new base fee.

33.12—Phase-In of Base Fee

Require the holder to pay the full amount of a new base fee if that new base fee results in an increase of 100 percent or less from the amount of the most recent annual fee assessed the holder.

When the new base fee is greater than a 100 percent increase from the amount of the most recent annual fee assessed the holder, implement the new base fee increase in three (3) equal increments over a 3-year period. Annual adjustments (sec. 33.13) shall be included in the calculation of fees that are incrementally phased-in over the 3-year period.

The following example illustrates the manner in which a new base fee would be phased in when the new base fee results in an increase of more than 100 percent from the most recent annual fee assessed the holder:

2002 Fee amount2003 New base feeIncrease
$700$1,6001 $900
2003 Phase-in Fee: $700 (2002 fee) + $300 (1/3 of fee increase > 100%) = $1,000
2004 Phase-in Fee: $1,000 (2003 fee) + $300 (1/3 of fee increase > 100%) × 1.03* (annual IPD-GDP increase of 3%) = $1,339 Start Printed Page 25754
2005 Phase-in Fee: $1,339 (2004 fee) + $300 (1/3 of fee increase > 100%) × 1.03* (annual IPD-GDP increase of 3%) = $1,688
2006 Phase-in Fee $1,688 (2005 fee) × 1.03* (annual IPD-GDP increase of 3%) = $1,739
1 >100% increase.
*3% annual IPD-GDP adjustment is used for illustrative purposes only. The actual annual IPD-GDP rate would be used for each of the phase-in amounts in years 2004 through 2006.

33.13—Annual Adjustment of Recreation Residence Fee

Recreation residence fees shall be adjusted annually using the 2nd quarter to 2nd quarter change in the Implicit Price Deflator, Gross Domestic Product (IPD-GDP).

An annual adjustment to the base fee shall be no more than 5 percent in any single year. When the annual change to the IPD-GDP results in an annual adjustment of more than 5 percent, apply the amount of the adjustment in excess of 5 percent to the annual fee payment for the next year in which the change in the index factor is less than 5 percent.

The following two examples illustrate how annual fees are adjusted in years during which the annual change in the IPD-GDP index exceeds 5 percent:

Example 1:

Only 1 year in which the IPD-GDP adjustment exceeds 5%.

2004 Fee = $700

2005 IPD-GDP adjustment = 7%* ($700 × .07 = $49)

Maximum adjustment/year = 5% ($35)

2005 carryover adjustment = 2% ($14)

2005 Fee = $700 (2004 fee) × .05 (max. adj/yr.) = $735

2006 IPD-GDP adjustment = 3%*

Carryover adjustment from 2005 = $14

2006 Fee = $735 (2005 fee) + $14 (2005 carryover) × 1.03 = $771

Example 2:

Multiple-year IPD-GDP adjustments exceeding 5%.

2004 Fee = $700

2005 IPD-GDP adjustment = 7%* ($700 × .07 = $49)

Maximum adjustment/year = 5% ($35)

2005 carryover adjustment = 2% ($14)

2005 Fee = $700 (2004 fee) × 1.05 (max. adj/yr.) = $735

2006 IPD-GDP adjustment = 7%* ($735 × .07 = $51)

Maximum adjustment/year = 5% ($37)

2006 carryover adjustment = 2% ($14)

Total carryover (2005 & 2006) = $28

2006 Fee = $735 (2005 fee) × 1.05 (max. adj/yr.) = $772

2007 IPD-GDP adjustment = 3%* (<max.adj/yr.)

Total 2006 & 2007 carryover = $28

2007 Fee = $772 (2006 fee) + $28 (2005 & 2006 carryover) × 1.03 = $824

(*Annual IPD-GDP adjustments used are for illustrative purposes only)

33.2—Fees When Determination Is Made To Place Recreation Residence on Tenure

A recreation residence use is placed on “tenure” when the authorized officer notifies the holder of the officer's decision to discontinue the use of the lot for recreation residence purposes and to convert the use of the recreation residence lot to some alternative public purpose. When a decision is made to discontinue the recreation use, the authorized officer shall provide the holder a minimum of 10 years notice prior to the date of converting the use and occupancy to an alternative public purpose. If the holder's 20-year term special use permit expires during that 10-year period, a new annual special use permit shall be issued with an expiration date that coincides with the specified date for converting the recreation residence lot to an alternative public purpose.

When a recreation residence use had been put on tenure, the fee for the tenth year prior to the date of converting the recreation residence use to an alternative public use becomes the base fee for the remaining life of the use. The fee for each year during the last ten years of the authorization shall be one-tenth of the base fee multiplied by the number of years remaining prior to the date of conversion. For example, charge a holder with nine years remaining, 90 percent of the base fee; with eight years, 80 percent; and so forth. Do not apply annual adjustments to fees when a recreation residence has been put on tenure notice.

Use the following schedule to calculate the holder's fee during the 10-year period:

Years remaining prior to date of conversionPercent of base fee to charge
10100
990
880
770
660
550
440
330
220
110

Use one of the following fee determination procedures when a review of a decision to convert the recreation residence lot to an alternative public use shows that changed conditions warrant continuation of the recreation residence use beyond the determined date of conversion:

1. If a new 20-year term permit is issued, recover the amount of fees forgone while the previous permit was under notice that the recreation residence lot would be converted to an alternative public purpose. Collect this amount evenly over a 10-year period in addition to the annual fee due under the new permit. The obligation runs with the recreation residence lot and shall be charged to any subsequent purchaser of the recreation residence. The annual fee under the newly issued 20-year permit shall be the annually-indexed fee computed as though no limit on tenure had existed, plus the amount as specified in this paragraph until paid in full.

2. Do not recover past fees when a 20-year term permit is not issued and the occupancy of the recreation residence lot will be authorized for less than 10 years past the originally identified date of conversion. Determine the fee for a new permit in these situations by computing the fee as if notice that a new permit would not be issued had not been given, reduced by the appropriate percentage for the number of years of the extension. For example, a new permit with a 6-year tenure period results in a fee equal to 60 percent of the base fee.

3. When a 20-year term permit is not issued, and the occupancy of the subject recreation residence lot will be allowed to continue for more than 10 years, but less than 20 years, recover fees as outlined in the preceding paragraph 1, computed for the most recent 10-year period in which the term of the permit was limited.

33.3—Fee When Recreation Residence Use Is Terminated or Revoked as Result of Acts of God or Other Catastrophic Events

When the authorized officer determines that the recreation residence lot cannot be safely occupied because of an act of God or other catastrophic event, the fee obligation of the recreation residence owner shall terminate effective on the date of the occurrence of the act or event.

A prorated portion of the annual fee, reflecting the remainder of the current billing period from the date of the occurrence of the act or event, shall be refunded to the holder. In the event that the holder is authorized to occupy an in-lieu lot (sec. 41.23d), the refund amount may instead be credited to the annual fee identified in a new permit for the in-lieu lot. Start Printed Page 25755

33.4—Establishing the Market Value of Recreation Residence Lot

The market value of a recreation residence lot shall be established by appraisal (FSH 5409.12, ch. 6).

1. Appraisals shall be conducted and prepared by either a contract or staff appraiser who is licensed to practice in the State within which the recreation residence lot(s) to be appraised are located. Select private contract or Forest Service staff who have adequate training through professional appraisal organizations and who have satisfactorily completed the basic courses necessary to demonstrate competence for the appraisal assignment. Require appraisers to sign an Assignment Agreement (FSH 5409.12, sec. 6.9, ex. 07). The appraisal must evaluate the market value of the fee simple estate of the National Forest System land underlying the typical lot or lots in a natural native state. However, access, utilities, and facilities that service a typical lot and which have been determined by the authorized officer to have been paid for or provided by the Forest Service or a third party, shall be included as features of the typical lot to be appraised (sec. 33.42).

Do not appraise individual recreation residence lots within a grouping or tract. Appraise the typical lot or lots that have been selected from within a group of recreation residence lots that all have essentially the same or similar value characteristics, pursuant to the direction in section 33.41. Adjustments may be made for measurable differences among recreation residence lots within a grouping.

2. The appraiser shall conduct and prepare the appraisal in compliance with:

a. The edition of the “Uniform Standards of Professional Appraisal Practice” in effect on the date of the appraisal;

b. The edition of the “Uniform Appraisal Standards for Federal Land Acquisitions” in effect on the date of the appraisal;

c. The appraisal sections for recreation residence lots found in the FSH 5409.12, section 6.9, exhibit 06; and

d. Any other case-specific appraisal guidelines provided to the appraiser by the Forest Service.

3. The appraiser shall ensure that appraised values are based on comparable market sales of sufficient quality and quantity. The appraiser shall recognize that the typical lot will not usually be equivalent to a legally subdivided lot.

The appraiser shall not select sales of land within developed urban areas, and in most circumstances, should not select a sale of comparable land that includes land that is encumbered by a conservation easement or recreational easement held by a government or institution. Sales of land encumbered by an easement may be used in situations in which the comparable sale is a single home site and is sufficiently comparable to the recreation residence lot or lots being appraised.

The appraiser shall also consider, and adjust as appropriate, the prices of comparable sales for typical value influences, which include, but are not limited to:

a. Differences in the locations of the parcels.

b. Accessibility, including limitations on access attributable to weather, the condition of roads and trails, restrictions imposed by the agency, and so forth.

c. The presence of marketable timber.

d. Limitations on, or the absence of, services such as law enforcement, fire control, road maintenance, or snow plowing.

e. The condition and regulatory compliance of any site improvements.

f. Any other typical value influences described in standard appraisal literature.

4. When an appraisal of the market value of a recreation residence lot in a tract is scheduled to occur, the authorized officer, or the authorized representative, and the appraiser shall, with a minimum 30-day written advance notice, arrange a meeting with the affected permit holders and provide them with information concerning the pending appraisal. At the meeting, holders shall be advised of the appraisal process, the method of appraisal, and selection of typical lots. Permit holders shall be afforded the opportunity to meet the appraiser individually, or as a group, concerning the selection of a typical lot or lots.

5. The appraiser shall provide the recreation residence permit holders with a minimum 30-day advance written notice (certified mail, return receipt requested) of the date and approximate time of the recreation residence lot visit. Documentation of the notification shall be included in the addenda of the appraisal report. At the recreation residence lot meeting, permit holders shall be given the opportunity to provide the appraiser with factual or market information pertinent to the valuation of the typical lot or lots. This information must be submitted in writing and shall be accounted for in the appraisal report.

33.41—Selection and Appraisal of Typical Lot

The appraiser shall appraise only the typical lot(s) selected within a tract. Before an appraisal is initiated, the authorized officer must make every effort to obtain the concurrence of the permit holders concerning the composition of the group or groupings of lots, which are essentially the same or which have similar economic value characteristics, and the selection of a typical lot(s). A representative typical lot shall be identified as economically typical of the recreation residence lots in each group. Exercise care in identifying and selecting a typical lot that is economically competitive with all of the recreation residence lots within the group it represents. The selection process shall be documented in a permanent case file for the tract.

With the advice of the appraiser, the authorized officer shall determine the composition of the group or groupings of recreation residence lots and the selection of a typical lot(s) when concurrence with the holders cannot be achieved. The inability to obtain concurrence with the holders on selection of the group or grouping of recreation residence lots and the selection of a typical lot(s) shall be documented and included in the permanent case file for the tract.

33.42—Inventorying Utilities, Access, and Facilities

The authorized officer is responsible for identifying, documenting, and inventorying all utilities, access, and facilities that service each of the typical lots within a recreation residence tract and providing that information to the appraiser as part of the appraisal assignment.

The inventory must include the authorized officer's determination of who paid for the capital costs of those utilities, access, or facilities. In doing so, the authorized officer shall presume that the permit holder, or the holder's predecessor, paid for the capital costs of the utility, access, or facility serving the typical lot, unless the authorized officer can document that either the Forest Service or a third party paid for those capital costs.

The types of utilities, access, and facilities that should be inventoried for each typical lot include, but are not limited to:

1. Potable water systems;

2. Roads, trails, air strips, boat docks, and water routes used to access the recreation residence lot or tract;

3. Waste disposal facilities; and Start Printed Page 25756

4. Utility lines, such as, telephone lines, fiber optic cable, electrical lines, cable TV, and so forth.

33.42a—Utilities Provided by Holder

Utilities shall be considered as provided by the holder when the holder, or the holder's predecessor:

1. Directly paid for the material and installation of the utility or road, or

2. Was assessed a lump sum fee for the installation, or was assessed a temporary surcharge to the utility or service that was in addition to the base rates assessed to all of the customers in the provider's rate base.

Hook-up fees or tap fees charged by a utility provider to connect to an existing facility do not constitute a payment of the capital costs of those facilities. The capital costs of those existing facilities are commonly assumed to be neighborhood-enhancing developments, if they were paid for and attributable to the entire service base, and the costs for installing them were borne by the provider of such service or utility.

33.42b—Utilities Provided by Forest Service or Third Party

The following evidence, when documented, shall serve as the basis for determining that the capital costs to construct a facility, utility, or access were provided by the Forest Service, or a third party:

1. A third party, such as a for-profit utility company, a not-for-profit cooperative, a water or sewer district, a municipality, and so forth, installed the utility service or facility, and that the third party provided the corresponding service to the subject lot without any lump sum or surcharge to base rates assessed to the holder or the holder's predecessor.

2. The roads providing access to a typical lot were built by a State, county, or local road agency, and were paid for from the general tax base or tax revenues used by that agency for road construction, without a specific lump sum or tax rate surcharge to the holder or the holder's predecessor.

3. Forest Service appropriations were used to construct the road, trail, or facility that provides access and/or service to the recreation residence lot.

4. The access to the recreation residence lot was built by a cooperator (pursuant to road or transportation cost-share agreement), or the access was indirectly paid by the Forest Service in the form of “purchaser (road) credits” pursuant to a timber sale contract.

5. The road, trail, utility, or facility that provides access or service to the subject recreation residence lot existed prior to the time when the recreation residence lot(s) within the tract was (were) first authorized for recreation residence use by the Forest Service. Such documentation shall be prima facie evidence that the capital costs to install the road, trail, utility, or facility were not paid for by the holder or the holder's predecessor.

33.5—Appraisal Specifications

Direction pertaining to appraisal specifications is found in FSH 5409.12, section 6.53, Recreation Residence Lots, and section 6.9, exhibits 06 and 07.

33.6—Review and Acceptance of Appraisal Report

The assigned Forest Service review appraiser shall review the appraisal report to ensure that it conforms to the Uniform Standards of Professional Appraisal Practice, the Uniform Appraisal Standards for Federal Land Acquisition, and appraisal guidelines found in the FSH 5409.12, chapter 6.

If the appraisal meets the standards as described in this section and as documented in an appraisal review report prepared by the assigned Forest Service review appraiser, the authorized officer may accept the estimated market value of the typical lot or lots in the appraisal for establishing a new base fee for that recreation residence lot or lots.

33.7—Holder Notification of Accepted Appraisal Report and the Right of Second Appraisal

The authorized officer shall notify the affected holder or holders that the Forest Service has accepted the appraisal report (sec. 33.6) and has determined a new base fee based on that appraisal. Upon written request, the authorized officer shall:

1. Provide the holder with a copy of the appraisal report and supporting documentation.

2. Advise the holder that the holder has 60 days after receipt of this notification to notify the authorized officer in writing of the holder's intent to obtain a second appraisal.

3. Inform the holder that if a request for a second appraisal is submitted, the holder has one year following receipt of the notice to prepare, at the holder's expense, an agency-approved second appraisal of the typical lot on which the initial appraisal was conducted, using the same date of value as the original appraisal.

33.71—Standards for Second Appraisal

33.71a—Appraiser Qualifications

The appraiser selected by the holder or holders to conduct a second appraisal must:

1. Meet the same general State certification requirements as the original appraiser;

2. Have experience in appraising vacant, recreational use lands;

3. Have the same or similar qualifications as the appraiser who prepared the first appraisal; and

4. Be approved in advance by the assigned Forest Service review appraiser.

33.71b—Appraisal Guidelines

The second appraiser shall use the appraisal guidelines used in the initial appraisal (FSH 5409.12, sec. 6.9, ex. 06), as prescribed in a pre-work meeting that includes the holder's appraiser, the Forest Service review appraiser, and the holder or holders, or their authorized representative. Prior to starting the second appraisal, the appraiser shall sign an Assignment Agreement as provided in FSH 5409.12, section 6.9, exhibit 07. After completion of the second appraisal, and in a separate document, the appraiser shall notify the assigned Forest Service review appraiser of any material differences of fact or opinion between the initial appraisal conducted for or by the agency and the second appraisal. If the second appraiser identifies the “material differences” assignment as a conflict of interest, the appraiser may request that the “material differences” assignment be completed by another qualified appraiser approved by the Forest Service review appraiser. The second appraisal shall be submitted to the appraiser's client. The document that cites material differences of fact or opinion shall be submitted directly to the assigned Forest Service review appraiser.

33.72—Reconsideration of Recreation Residence Base Fee

Reconsideration of the recreation residence base fee shall be based solely on the results of the second appraisal. The authorized officer shall inform the holder that they must submit to the authorized officer a request for reconsideration of the base fee within 60 days of receipt of the second appraisal report.

Within 60 days of receipt of the request for reconsideration of the base fee, the authorized officer shall:

1. Review the initial appraisal and appraisal review report.

2. Review the results and commentary of the second appraisal and appraisal review report.

3. Establish a new base fee in an amount that is equal to the base fee established by the initial or the second appraisal or is within the range of Start Printed Page 25757values, if any, between the initial and second appraisals.

4. Notify the holder or holders of the amount of the new base fee.

33.8—Establishing Recreation Residence Lot Value During Transition Period of Cabin User Fee Fairness Act

The transition period, as identified in section 614 of the Cabin User Fee Fairness Act (CUFFA), is that period of time between the date of enactment of CUFFA (Oct. 12, 2000) and the date upon which a base cabin user fee for a recreation residence is established as a result of implementing the final regulations, policies, and appraisal guidelines established pursuant to CUFFA.

The authorized officer shall, upon adoption of regulations, policies, and appraisal guidelines established pursuant to CUFFA, notify all recreation residence permit holders whose recreation residence lots have been appraised since September 30, 1995, that they may request the Forest Service to take one of the following actions:

1. Conduct a new appraisal pursuant to regulations, policies, and appraisal guidelines established pursuant to CUFFA (sec. 33.82).

2. Commission a peer review of an existing appraisal of the typical lot completed since September 30, 1995 (sec. 33.83).

3. Establish a new base fee using the market value of the typical lot identified in an existing appraisal completed on or after September 30, 1995 (sec. 33.81).

A request to act on one of these options must be made by a simple majority of the holders within the group of recreation residence lots represented by the typical lot. To facilitate this process, the authorized officer shall provide each permit holder with the names and addresses of all of the other permit holders within the group of recreation residence lots that are represented by the typical lot, so that the holders within the group have the opportunity to collectively determine whether to exercise one of the options identified above.

33.81—Use of Appraisal Completed Since September 30, 1995

1. Establish a new base fee using 5 percent of the fee simple value, indexed to the current year, of a Forest Service approved appraisal of a typical lot completed since September 30, 1995, when:

a. Within two years following the adoption of regulations, policies, and appraisal guidelines established pursuant to CUFFA, a request for a new base fee is submitted in writing to the authorized officer by a majority of the holders within the group of recreation residence lots represented by a typical lot included in the appraisal (sec. 33.8, para. 3).

b. A majority of permit holders in a group of recreation residence lots fail to submit, within two years following the adoption of regulations, policies, and appraisal guidelines established pursuant to CUFFA, a request for one of the three options identified in section 33.8.

c. A peer review is requested and completed (sec. 33.8, para. 2), and the review determines that the appraisal completed since September 30, 1995, is consistent with the regulations, policies, and appraisal guidelines adopted pursuant to CUFFA.

2. Implement the new base fee at the time of the next regularly scheduled annual billing cycle, subject to the phase-in provisions established pursuant to CUFFA.

33.82—Request for New Appraisal Conducted Under Regulations, Policies, and Appraisal Guidelines Established Pursuant to CUFFA

A request for a new appraisal must be made within two years following the adoption of regulations, directives, and appraisal guidelines for recreation residences established pursuant to CUFFA. The authorized officer shall inform the holders that a request for a new appraisal must be submitted in writing to the authorized officer and must be signed by a majority of the recreation residence holders within the group of recreation residence lots represented by the typical lot to be appraised. The authorized officer shall also inform those holders requesting a new appraisal that in their request they must agree to collectively pay for one-half the cost to conduct the new appraisal. In addition, holders whose previous appraisal indicated that a base fee would increase more than $3,000 from the annual fee being assessed on October 1, 1996, shall be notified that they must include the following statement as a part of their request for a new appraisal:

We hereby agree that, if the new base fee established by the new appraisal that we are hereby requesting results in an amount that is 90 percent or more of the fee determined by the previously completed appraisal of this typical lot (specifically, that appraisal dated _____, with an estimated fee simple value of $____, and an indicated annual fee of $____), each of the permit holders within this group of recreation residence lots shall be obligated to pay to the United States the following:

1. The base fee that shall be established using the results of the new appraisal being requested, subject to the phase-in provisions of section 609 of CUFFA; and

2. The difference between (a) the annual fee that was paid during calendar years ____, ____, ____, (enter each calendar year beginning with that year when a new base fee based upon the above-referenced appraisal would have otherwise been implemented), and ending with calendar year ____ (enter the calendar year the request for a new appraisal is made), and (b) the amount that the annual fee for each of those identified calendar years would otherwise have been had a new base fee been assessed as a result of the above-referenced appraisal, pursuant to the phase-in provisions in effect and applicable during that time. This difference for those calendar years cumulatively totals $____, as itemized on the enclosed worksheet (enter the cumulative difference and attach a worksheet showing how it was calculated, itemized for each of the calendar years identified above).

We agree that the cumulative amount identified in Item #2 (above) shall be assessed as a premium fee amount, in three (3) equal annual installments, in addition to the phase-in of the new base user fee established by the results of the new appraisal.

The authorized officer shall, upon receipt of a formal request, initiate a new appraisal of the typical lot in accordance with the regulations, policies, and appraisal guidelines adopted pursuant to CUFFA. The date of value of the new appraisal shall be the same date of value as that identified in the appraisal it is intended to replace.

33.83—Request for Peer Review Conducted Under Regulations, Policies, and Appraisal Guidelines Established Pursuant to CUFFA

A request for a peer review of an existing appraisal completed since September 30, 1995, shall be made within two years following the adoption of regulations, policies, and appraisal guidelines for recreation residences pursuant to CUFFA. The request shall be submitted in writing to the authorized officer and must be signed by a majority of the recreation residence holders within the group of recreation residence lots represented by the typical lot that was appraised. The holders requesting the peer review shall, in their request, agree to collectively pay for one-half the cost to commission the Start Printed Page 25758review. In addition, holders requesting a peer review where the appraisal to be reviewed established a base fee that was more than a $3,000 annual increase to the fee being assessed the holders on October 1, 1996, shall include the following statement as a part of their request:

We hereby agree that, if the new base fee resulting from the peer review that we are hereby requesting results in an amount that is 90 percent or more of the fee determined by the previously completed appraisal of this typical lot (specifically, that appraisal dated _____, with an estimated fee simple value of $____, and an indicated annual fee of $____), then each of the permit holders within this group of recreation residence lots shall be obligated to pay to the United States the following:

1. The base fee that shall be established pursuant to this peer review, subject to the phase-in provisions of section 609 of CUFFA; and

2. The difference between (a) the annual fee that was paid during calendar years ____, ____, ____ (enter each calendar year beginning with that year when a new base fee based upon the above-referenced appraisal would have otherwise been implemented), and ending with calendar year_____ (insert the calendar year in which the request for a peer review is made), and (b) the amount that the annual fee for each of those identified calendar years would otherwise have been, had a new base fee been assessed as a result of the above-referenced appraisal, pursuant to the phase-in provisions in effect and applicable during that time. This difference for those calendar years cumulatively totals $ ____, as itemized on the enclosed worksheet (enter the cumulative difference, and include an attached worksheet showing how it was calculated, itemized for each of the calendar years identified above). We agree that the cumulative amount identified in Item #2 (above) will be assessed as a premium fee amount, in three (3) equal annual installments, in addition to the phase-in of the new base user fee established by the results of the peer review.

The authorized officer shall commission a peer review of the existing appraisal upon receipt of a written request to do so and upon submission of the appropriate documentation that shows that the request is being made by a majority of the holders affected. The manner in which the peer review is conducted shall be based upon the membership in a professional organization of the appraiser who conducted that appraisal as follows:

1. Appraisals Prepared by an Appraiser Who Is a Member of a Single Appraisal Sponsor Organization of The Appraisal Foundation. If the appraiser who prepared the appraisal that will be reviewed is a member of a single appraisal sponsor organization of The Appraisal Foundation, the authorized officer shall submit the appraisal report, appraisal review report, and peer review report instructions to that appraisal sponsor organization for assignment to a member of an established panel of accredited or designated members selected by the sponsor organization for the purpose of peer review. In consultation with the accredited or designated panel member, the sponsor organization shall provide the authorized officer an estimate of total cost for the peer review. The authorized officer shall consult with a representative of the permit holders requesting the peer review to determine if the holders wish to proceed with the review, based on the estimated cost. If a peer review is conducted, the review report shall be prepared in compliance with the review instructions provided with the existing appraisal. The peer review report shall be confined to an evaluation of whether the original appraisal report includes provisions or procedures that were implemented or conducted in a manner that is inconsistent with regulations, policies, or appraisal guidelines adopted pursuant to CUFFA and, if so, which provisions and to what effect. The peer review report is not intended to be a formal technical appraisal review report in compliance with Standards Rule 3-2 of the Uniform Standards of Professional Appraisal Practice.

2. Appraisals Prepared by an Appraiser Who Is Not a Member of a Sponsor Organization, or is a Member of Two or More Sponsor Organizations of The Appraisal Foundation. If the appraiser who prepared the appraisal that will be reviewed is not a member of a sponsor organization of The Appraisal Foundation, or is a member of two or more sponsor organizations of The Appraisal Foundation, the authorized officer shall submit the appraisal report, appraisal review report, and peer review report instructions, after consultation with the requesting permit holders, to a sponsor organization that has established a panel for peer review of recreation residence lot appraisals. If the authorized officer and a majority of the requesting permit holders cannot agree on which sponsor organization to solicit for the peer review, the authorized officer shall make the decision based upon a recommendation from the Regional Appraiser. The authorized officer shall request the selected appraisal sponsor organization to assign a member of the established panel of accredited or designated members to conduct the peer review. The authorized officer shall also request the sponsor organization to provide the authorized officer, in consultation with the accredited or designated panel member, an estimate of total cost for the peer review. The authorized officer shall consult with a representative of the requesting permit holders to determine if the holders want to proceed with the review, based on the estimated costs. If a peer review is conducted, the review report shall be prepared in compliance with the review instructions provided with the existing appraisal. The peer review report shall be confined to evaluation of whether the original appraisal report includes provisions or procedures that were implemented or conducted in a manner that is inconsistent with regulations, policies, or appraisal guidelines adopted pursuant to CUFFA and, if so, which provisions and to what effect. The peer review report is not intended to be a formal technical appraisal review report in compliance with Standard Rule 3-2 of the Uniform Standards of Professional Appraisal Practice.

a. If the peer review shows that the appraisal is consistent with the regulations, policies, and appraisal guidelines adopted pursuant to CUFFA, the authorized officer shall establish a new base fee using 5 percent of the fee simple value of the typical lot identified in the appraisal.

b. If the peer review results in a determination that the appraisal was not conducted in a manner consistent with the regulations, policies, and appraisal guidelines adopted pursuant to CUFFA, the authorized officer shall either

(1) Establish a new base fee to reflect consistency with the regulations, policies, and appraisal guidelines adopted pursuant to CUFFA, or

(2) Conduct a new appraisal in accordance with the provisions of CUFFA if requested by a majority of the affected holders.

* * * * *

FSH 5409.12—Appraisal Handbook

Chapter 6—Appraisal Contracting

6.5—Appraisals for Special Purposes

6.53—Recreation Residence Lots

The standard specifications for recreation residence lot appraisals shall be used Service-wide (sec. 6.9, ex.06). Do not modify or deviate from these Start Printed Page 25759specifications without the approval of the Washington Office, Director of Lands.

Require all appraisers conducting a second appraisal for a recreation residence lot to submit an Assignment Agreement (sec. 6.9, ex. 07).

6.9—Exhibits

Exhibit 06—Required Specifications for Appraisal of Recreation Residence Lots

Exhibit 07—Assignment Agreement for Appraisal of Recreation Residence Lots

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End Supplemental Information

BILLING CODE 3410-11-P

[FR Doc. 03-11695 Filed 5-12-03; 8:45 am]

BILLING CODE 3410-11-C