What are O&C Lands and what do they mean to Benton County and Oregon?

People who make their living in the forests of Oregon give me a strange look when I ask this.  I decided to look into it myself and found out what that ‘look’ meant; the issue is not an easy one to explain.  It all began back when Oregon was barely a state and the Government needed a fast and cost-effective way to open up the state to settlement.   The Oregon and California Railroad Act of 1866 was their solution.  The law authorized the state of Oregon to act on behalf of the Government to issue land grants as compensation to private companies for the construction of a rail line from the California border to Portland.  Several companies began construction but eventually the Oregon and California Railroad Company (OCRC) acquired much of the forest land known today as the O&C Lands.  A resulting ‘checkerboard’ landscape  resulted from the allocation of land by alternating sections (section = 1 sq. mi. = 640 acres) along the railway.  An 1869 amendment required the railroad companies to sell land to ‘actual settlers’ for $2.50/ac in no more than 160-acre allotments.  Over a period of years, OCRC developed a scheme to circumvent that requirement and sell larger chunks of land for much higher values.  After a series of inquiries, Congress passed the Chamberlain-Ferris Act in 1916 which revested the unsold lands back to the Federal Government and put them under the jurisdiction of the General Land Office, which later became the BLM.

The O&C Railroad paid property taxes to the Counties but Government didn’t.  The Chamberlain-Ferris Act contained provisions for the revested lands to be re-sold into private ownership, allowing local governments to recover their tax base.  But for various reasons, land sales were very slow and county revenue expectations were not met.  Congress provided short-term relief with legislation in 1926, but this failed as well.

In 1869, Congress had also authorized a similar land grant to build a military wagon road through the Coast Range.  In 1919, Congress revested the Coos Bay Wagon Roads (CBWR) for similar reasons as the O&C Lands, and they are now considered together with the O&C Lands, all of which exist in Oregon.
 

In 1937, the eighteen O&C Counties, all of which are also in Oregon, led an effort to address their perennial revenue crisis.  The O&C Act of 1937 resulted, and includes several key components, including a mandate to provide a sustained level of timber harvest, protecting watersheds, community stability, and compensation to Counties for lost property tax revenue.  More specifically, the O&C Act dictated: “..the timberlands shall be managed…for permanent forest production, and the timber thereon shall be sold, cut, and removed in conformity with the principal of sustained yield for the purpose of providing a permanent source of timber supply, protecting watersheds, regulating stream flow, and contributing to the economic stability of local communities and industries, and providing recreational facilities…”

The O&C included a payment system to the Counties based on gross revenue from timber harvested from the overall O&C Lands.  Initially the Counties’ share of timber receipts was 75%.  Since the 1950s, the Counties have elected to ‘plowback’ 25% of revenues into the management of the O&C Lands, making the ‘commodity payments’ share to O&C Counties 50% of gross timber revenue.  In contrast, county governments receive 25% of timber receipts from the US Forest Service.  The O&C shared receipts are unrestricted and can be used by Counties for any purpose, while shared receipts from National Forests can only be used for schools and roads.

After the O&C land grants were issued, the National Forest System (NFS) was overlaid on top of the O&C Lands.  After years of argument over management authority between agencies, the Cordon-Ellsworth Act of 1954 provided that the O&C Lands within the boundaries of the NFS would be managed as O&C Lands by the Forest Service with receipts from any timber harvested also paying 50% to O&C Counties.

Then, in 1976, Congress passed the Federal Land Policy and Management Act (FLPMA).  Basically, FLPMA established detailed rules for the management of Public Lands in 16 of the western states including Alaska.  The FLPMA rules applied to both the Forest Service and BLM even though they were each created with different mandates.  The FLPMA did include Section 701(b) which states that when direction contradicts, the O&C Act will prevail, which quickly fueled a lot of controversy and dispute.

FLPMA was intended to manage Public Lands to provide and maintain important habitat for fish, wildlife and plants as well as water quality and quantity.  The O&C Lands Act mandates that the O&C Lands be managed with the same goals in mind, but to also provide a perpetual, sustained harvest of O&C lands for the benefit of the O&C Counties.

In 1985 the Northern Spotted Owl controversy reared its ugly head.  Presidential candidate Bill Clinton promised, if elected, he would settle the issue.  The Northwest Forest Plan was the result, but lawsuits and injunctions against harvesting were flying everywhere.  The popular environmental theory at the time was that threatened or endangered species could only be protected by setting aside and preserving large tracts of timber habitat.  But even the courts agreed that the O&C Lands Act precluded doing that.  To this day, the entire controversy swirls around how best to balance environmental concerns against the public enjoyment of the forests and the need for a sustained, perpetual harvest of the timber.

Meanwhile, the O&C Counties were suffering.  As timber sales from O&C Lands began to fall, so did the revenue to the Counties.  This time the Government came up with something called the Payment In Lieu of Taxes (PILT) law, passed in 1976.  In 1995 it was amended to include the O&C Lands. 

PILT payments are based on a complicated formula that includes population and federally owned acres, and are adjusted up or down depending on other federal payments based on revenue.  Another scheme tried was a 10-year safety net program which, starting in 1994, was based on the average payment between 1986 and 1989.  The calculated payments plus the timber proceeds kept O&C Counties revenue at or near historic averages even though timber volume had decreased by 75%.  The safety net program was replaced by Secure Rural Schools (SRS) payments in 2000.

In 2007, the total O&C Payment across the 18 O&C Counties was $115 million.  If the Payment had been based solely on timber harvest sales, the total would have been $15.4 million.

Where does Benton County stand in all of this?  O&C Counties receive payments as a percentage of O&C Land within their counties.  The four counties with the largest O&C Payments are Douglas (25%), Jackson (15.7%), Lane (15.3%), and Josephine (12.1%).  Benton County is eighth at 2.8%.  Of the total Payments made in 2007, Benton County received $3.3 million.

On December 4^th of this year, the Gazette-Times reported that Benton County “got a bit of good news”.  The projected timber payment for 2013-14 is expected to be $897,700.  That’s a long way from $3.3 million just a few years ago.

At the same time, all the O&C Counties are suffering because the O&C Payments are just 5%, or 1/20th of what they were in the 1980s.  Twenty times $897,700 is $17,954,000.

Overall, O&C timber sales are down 95%, or 1/20th of what they were in the 1980s.  Twenty times $897,700 is $17,954,000.  Now consider the effects on those four counties mentioned above.

That’s what the O&C Lands mean to Benton County and 17 other counties in Oregon.  Currently, Suzanne Bonamichi, Greg Walden, Earl Blumenauer, Peter DeFazio and Kurt Schrader, our ‘incumbents’ in Washington, are introducing even more legislation to ‘tinker’ with a situation that should never have happened in the first place.  The O&C Lands were Oregon lands until the Chamberlain-Ferris Act ‘revested’ them back to the Federal Government.  According to the Constitution of the United States, those lands, along with all Federal lands that were not buildings or military bases, should have been turned over to Oregon when Oregon became a state.

Our legislators in Washington should be working on legislation to force the release of what should have been rightfully Oregon’s since Statehood. 

 

By Kenneth McCracken