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Friday, September 27, 2013

The Oregon & California Railroad Lands (O&C Lands): Issues for Congress

Katie Hoover
Analyst in Natural Resources Policy

The Oregon and California Railroad (O&C) lands consist of 2.6 million acres of timberland in western Oregon. The majority of these lands (2.5 million acres) were originally granted to the Oregon & California Railroad Company in 1866 for constructing approximately 300 miles of the Oregon portion of a railroad from Portland, OR, to Sacramento, CA. However, in 1915 the U.S. Supreme Court ruled that the railroad violated the terms of the grant. The disposition of these lands was eventually resolved with the O&C Act of 1937, which revested the lands back into federal ownership to be managed by the Department of the Interior “for permanent forest production” with the purpose to provide a supply of timber, protect watersheds, provide recreational opportunities, and contribute to the economic stability of the local communities. The O&C Act of 1937 established a revenue-sharing system with the 18 counties in Oregon that contain O&C lands. Currently at issue for Congress are payments to the counties that contain O&C land, the sequestration of the FY2012 payment, and the applicability of various land management and environmental laws.

The O&C lands are managed under the Northwest Forest Plan (NWFP). The NWFP is a series of federal policies and forest management direction adopted in the 1990s. The NWFP covers 24 million acres of public land, including 19 national forests managed by the Forest Service and 7 Bureau of Land Management (BLM) districts in California, Oregon, and Washington. The O&C lands make up 11% of the NWFP management area by acreage, and 37% of Oregon’s NWFP management area by acreage.

The revenue sharing system established under the 1937 O&C Act was to compensate for the loss of property tax revenue when the O&C lands were revested back to the federal government. When timber sales and revenues began to decline in the Pacific Northwest in the 1990s, Congress established alternative compensation systems: first the safety net payments specifically for the Pacific Northwest, then the broader Secure Rural Schools and Community Self-Determination Act of 2000 (SRS; P.L. 106-393, as amended). After several reauthorizations and extensions, SRS expired after the FY2012 payment. Congress again is considering extending SRS. Options include extending the SRS with or without modifications, reverting back to the revenue-sharing payment system, or other legislative proposals to address O&C payments.

Legislation has been introduced in the 113
th Congress to address the management of the O&C lands and federal payment programs to the O&C counties. H.R. 1526 would transfer management authority of much of the O&C lands to a governor-appointed panel and establish a trust with fiduciary responsibility to the counties, among other provisions related to the management and applicability of federal environmental laws. H.R. 1526 would also extend SRS for one year at the FY2010 payment level. S. 783 would reauthorize SRS for one year at 95% of the FY2012 payment level.

This report provides background information about the O&C lands and discusses federal payments made to the 18 counties in Oregon. This report then discusses some of the major issues before Congress related to the management of the O&C lands.

Date of Report: September 13, 2013
Number of Pages: 18
Order Number: R42951
Price: $29.95

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