somehow substantially change the listing status of various species from around the country.

As I think back on it, I was thinking about this as you asked the question of Mr. Swift, when I think back on it, I don't think one of those and that was not during the 20th anniversary of Earth Day-I don't think one of those had more than 150 votes on the floor of the House, and you need 218 votes to get anywhere around here.

So I just don't think that's a realistic thing for the people of the Northwest to think about in terms of finding a solution to this problem. It's more complex, it's going to be more difficult.

Mr. SMITH. I thank you for that, and I totally agree. I see no possibility that either the Endangered Species Act is going to be amended for this particular purpose or maybe any other in the foreseeable future. Therefore, the listing of the owl is the final act, is what I'm trying to get across, and I hear you agreeing with me that that's the guillotine, that's the final act.

It is not going to be changed by Congress, and we ought not to have false hopes that somehow there's going to be a last minute bailout as significant as the passage of some amendment to the Endangered Species Act. For the record, I want to make that point very clear to people, that that really is not an alternative. In June, if it's listed, that will be in place for many, many years to come. I thank you very much, Mr. Chairman.

Mr. VOLKMER. Thank you.

I have a couple of questions. As I understand this legislation, and I know the general outline of it, and I've been hurriedly trying to get through to look for something and can't find it, but as I understand it, this legislation is generic. It doesn't apply just to the States of California, Washington, and Oregon. Is that correct? Mr. SWIFT. Yes.

Mr. VOLKMER. As far as the prohibitions, it applies to west of the-

Mr. SWIFT. All lands west of the 100th meridian.

Mr. VOLKMER. Alaska is west of the 100th meridian. Tongass is west of the 100th meridian. Is that correct?

Mr. SWIFT. That's correct.

Mr. VOLKMER. So everything in here would apply to the Tongass? Mr. SWIFT. Would apply to the State of Alaska.

Mr. VOLKMER. To the Tongass National Forest?

Mr. SWIFT. Yes.

Mr. VOLKMER. You couldn't export any logs from Federal lands that didn't meet the requirements in this legislation?

Mr. SWIFT. Have not been able to in the past.

Mr. VOLKMER. Oh, yes, they have.

Ms. UNSOELD. Not from Federal.

Mr. AUCOIN. Not from Federal lands, Mr. Chairman.

Mr. VOLKMER. Well, yes, they have. They cut their cants, but they don't have to have the size in a cants. I'll ask Mr. Leonard about that, but it's my understanding that the cants, all you have to do is saw the sides down and off it goes to Japan.

Mr. SWIFT. You should discuss that with Mr. Leonard, because we have as well, but the annual appropriations rider that has applied in the Northwest also applied to the State of Alaska.

Mr. VOLKMER. But in the past we've been able to process it by just sawing the sides, if I remember right, for a cant and shipping the cants. Now, we'll wait for Mr. Leonard. Did you intend to apply whatever it is here as well as to the Tongass if that would mean that they can no longer ship any logs out of the Tongass as well

Mr. SwIFT. Mr. Leonard is going to be able to give you the definitive answer in that regard, but it is not my impression that we have changed things in that regard.

Mr. VOLKMER. Is there any intent to change? That's what I want to know. Do you want to prescribe the shipment of logs out of Alaska as well as out of Oregon, Washington, and California?

Mr. SWIFT. Again, I think Mr. Leonard, if you have him as a witness, can help you definitively, but it is my understanding that current regulations, sometimes not well-enforced, has limited that to 84 inches in diameter what can be called a cant and shipped. This legislation does make that permanent.

Mr. VOLKMER. We'll check that with Mr. Leonard, but▬▬
Ms. UNSOELD. Mr. Chairman.

Mr. VOLKMER. Let's put it this way. If it does not, is it your intent to change it? That's what I want to know.

Mr. SWIFT. It's our intent to keep it as it is at the present time of 84 inches in diameter.

Mr. VOLKMER. Is it your intent to keep whatever regulations affecting the Tongass the same or to change them?

Mr. SwIFT. The same.

Mr. VOLKMER. If they're different than what is applied locally in Washington and Oregon, then you want them to remain different? Mr. AUCOIN. Mr. Chairman, our definition in our proposal is the same as current law. Current law says that if the object is thicker than 84 inches, it can't be exported. That law currently applies to Alaska, it applies to the other States that we have mentioned, it applies under our piece of legislation.

Our penalties are higher than they are today, and I think what you will get is better enforcement under this than we've had in the past and better enforcement than we do have today. I think the point has been made that enforcement is somewhat weak right

now.

Ms. UNSOELD. Mr. Chairman, originally, or a few years back, a number of States, Oregon, Alaska, Idaho, and I believe California, had restrictions on the exporting of raw logs off their State lands. Only Washington did not. It was a Supreme Court case dealing with Alaska that struck that down. This is a partial attempt to get us back to where some of the States were before.

Mr. VOLKMER. Let's put it this way. If this does place a different criteria on the Tongass than is presently, would you be willing to make this language only apply to that timber in the contiguous 48 States?

Mr. SWIFT. Let me answer that, Mr. Chairman, this way. It is literally true, I believe, that we did not give a moment's consideration to effect on the Tongass. It was not our intent to affect it. Mr. VOLKMER. That's what I want to hear. You're not intending to affect the Tongass.

Mr. SWIFT. It is not our intent to affect it.

Mr. VOLKMER. That's all I wanted to hear.

Mr. SWIFT. I don't think that we can answer a hypothetical question very definitively, but if you find some conflict, we would be happy to talk further about this.

Mr. VOLKMER. Well, that's what I wanted to know. You're not intending to affect the Tongass. That's what I wanted to hear.

Mr. SWIFT. That's correct.

Mr. VOLKMER. Thank you very much.

Any further questions?

[No response.]

Mr. VOLKMER. Thank you very much for your testimony. You've been very helpful.

Our next panel will be made of Mr. George Leonard, Associate Chief, Forest Service, U.S. Department of Agriculture; Ms. Susan R. Lamson, Deputy Director of External Affairs, Bureau of Land Management, U.S. Department of Interior; and Mr. William E. Gahr, Associate Director, Food and Agriculture Issues, U.S. General Accounting Office.

All of you have submitted prepared statements. Those statements will be made a part of the record at the point in which you testify. You may either review the statement in full or summarize, however you so desire. We'll begin with Mr. Leonard.

Before we're finished, I would like to say that I'm going to have to break at noon, and we have one panel after this, I'd say that will be probably at the end of this panel. So the third panel will begin again at 1:30 p.m.

Mr. Leonard.

STATEMENT OF GEORGE M. LEONARD, ASSOCIATE CHIEF,

FOREST SERVICE, U.S. DEPARTMENT OF AGRICULTURE

Mr. LEONARD. Thank you, Mr. Chairman.

I think the previous panel amply described the importance of the timber industry to the Pacific Coast States, particularly the States of Oregon and Washington. In those States, we harvest about 15 billion board feet of timber a year on all ownerships. About 40 percent of that amount, some 5 to 6 billion board feet a year, is harvested off the national forest lands in Oregon and Washington and off the lands administered by the Bureau of Land Management, the ONC lands, in the State of Oregon.

As a result of ongoing land management planning and as the consequence of measures which have been suggested-we are not yet making the decision to implement the report, but if the measures suggested by the Interagency Scientific Committee for the conservation of the spotted owl are implemented, it's likely that the actual harvest levels that will be permitted on the Federal lands will be reduced by about 50 percent.

That suggests that about 20 percent of the supply timber that's been available to the industry in the Northwest will not be available in the future. The consequences of that are very significant, as described by the previous panel.

There have been restrictions of one sort or another on the export of Federal timber in the Pacific Northwest since the late 1960's, first by Secretarial regulation, then by an amendment which was

known as the Morrison amendment to the Foreign Assistance Act, and since 1973, through annual appropriations riders to the Department of Interior and Related Agencies Appropriations Act.

That rider has restricted Federal logs from export, with the exception of minor amounts of some specialized species for which there is no domestic market, the so-called surplus species, has generally banned substitution of Federal timber for private timber which is exported by the timber purchasers.

At the time that rider was first implemented, it was discovered that a strict ban on substitution would have disrupted some outstanding contracts where people had contracted to deliver logs to the export market based on harvesting Federal timber, and strict interpretation of the substitution ban would have disrupted those contracts.

So at the request of the chairman of the House Appropriations Committee, we grandfathered in a historic level, both the Forest Service and BLM, grandfathered in a historic level of purchases at about 500 million board feet, and at the time, I don't think it was ever anticipated that we would have continued administering that program through in an annual rider to the appropriations bill time after time with no change. So that what was originally intended as a stop-gap measure has continued over the years.

The administration has no objection to making the ban on export of Federal logs permanent, nor do they object to eliminating that historic level of direct substitution. We are concerned, however, about a total ban on indirect substitution. Almost every timber sale that's harvested in the Pacific Northwest provides a vast array of species, sizes, and grades of logs.

There has been the development of a very good log market in the Northwest which facilitates the sale and trading of logs among purchasers so that logs end up in the mill where they can be most efficiently processed. This facilitates moving the high value veneer grade logs to a veneer mill, the small logs to a small log mill, the high grade logs to a cutting mill, and the average logs to a high production stud-mill-type operation, and it really contributes to increasing the competitiveness of the mills in the Northwest.

A total ban on indirect substitution would distort and make less efficient the processing of timber. I'm not suggesting that all the timber harvested wouldn't be processed in somebody's mill, I'm just saying that a total ban on the indirect substitution would result in some market inefficiencies as you applied that, and we would be concerned about that.

We also have the situation where logs are sorted on a landing by the top loader, and he's looking at dirty logs that have been yarded up out of the mud and whatnot on a rainy day, and he makes a choice as to where that sort of logs is going, and some of those logs he'll judge them to be not suitable as saw logs, they won't meet the specifications for saw logs, and so they'll be sent to the pulp mill. But when they finally get down to the mill and the scaler measures them, occasionally, they'll find an inadvertent log where the thing just does break across, and it scales out as a saw log. At that point, it's simply uneconomical to load that one log and haul it out of the pulp mill, and all of the pulp mills, of course, or many of the pulp mills are run by firms that are in the export business. It

would be very inefficient to take that inadvertent sorted log and haul it back out and put it someplace.

So there needs to be some opportunity for both purposeful and perhaps some inadvertent indirect substitution. We think it will contribute significantly to the operations of the markets in the Pacific Northwest.

We think that making the ban permanent will facilitate better administration. We can plan on this as a permanent operation. We think the civil penalties that are prescribed by a number of the laws will also facilitate administration of the thing. Currently, we only have contractual tools to deal with the violations, and particularly with logs which might get into a third party situation.

Once the original purchaser has sold that log and we've lost our contractual relationship with him, currently, we have really no mechanism for dealing with either the reporting of what happens to that log in the subsequent transactions or any control over what might happen. So establishing a mechanism for civil penalties will facilitate administration of the program.

I think that will conclude my statement, Mr. Chairman.

[The prepared statement of Mr. Leonard appears at the conclusion of the hearing.]

Mr. VOLKMER. Thank you very much.

Ms. Lamson.

STATEMENT OF SUSAN R. LAMSON, DEPUTY DIRECTOR, EXTERNAL AFFAIRS, BUREAU OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

Ms. LAMSON. Thank you, Mr. Chairman.

I'll summarize my statement as well. I wanted to point out first off that western Oregon is the only area where export restrictions have a significant impact on BLM's Timber Sale Program. We've had regulations in effect since 1974 in accordance with language in the Appropriations Act to implement restrictions on exports of unprocessed Federal timber from Federal lands in the contiguous States west of the 100th meridian.

These regulations also prohibit a company from increasing its export of private timber within a reasonable period of increasing its purchase of Federal timber. So we would not object to legislation restricting exports of unprocessed timber originating from Federal lands and on the direct substitution of Federal unprocessed timber for private timber that is exported.

To follow on Mr. Leonard's comments with respect to indirect substitution, we are concerned that such a provision would be difficult and costly for us to administer. Implementation would require setting up a complex system to audit company records and track the flow of logs through multiple purchasers. In addition, field inspections would be required on a continuous basis to assist in enforcement.

It should be noted that the Department of Commerce does have the authority, pursuant to the short supply provisions of the Export Administration Act, to control exports, and we believe this authority is sufficient to address the processing of domestic logs in foreign locations.