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Forestland and Rural Property Environmental Site Assessments

Keeping Property Management in Stride with Regulation

by Patrick C. Wilber

Forestland and rural property are regulated by several government agencies, making it difficult for landowners of these types of properties to comply with the multiple and complex regulations created by these agencies. Nonindustrial private forestland owners make up the majority of owners that are affected by these regulations. NIPF comprise 59 percent of all U.S. forestland, and accounted for 49 percent of the timber harvest in 1991; private industrial lands comprise 14 percent of all U.S. forestland, and accounted for 33 percent of the 1991 harvest; national forests comprise 17 percent of all U.S. forestland, and accounted for 12 percent of the 1991 harvest; other public ownerships account for 13 percent of the U.S. forestland, and for 6 percent of the 1991 harvest. (1)

As a result, ASTM Subcommittee E50.02 on Real Estate Transactions, part of Committee E50 on Environmental Assessment, has developed a standard for environmental site assessment specific to forestland and rural property to make it easier for private landowners to know what to do and when to do it. Standard E 2247, Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property, and its two appendices (which show the differences between E 2247 and the previously -established E 1527, Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process), can help the NIPF landowner make headway through the confusion of determining how to address the concerns unique to these properties.

History

But before covering these standards, let’s look at a brief history of the regulations, politics, standard practices, and developments associated with NIPF for a better understanding why such a standard was developed.

Several bodies of government in the United States regulate the day-to-day business of rural property and NIPF management. In 1980, the Comprehensive Environmental Response, Compensation and Liability Act arose out of a need to address the many tons of hazardous substances buried in the United States. Superfund addresses the funding issues brought about by CERCLA. Additionally, the Resource Conservation and Recovery Act, the Superfund Amendments and Reauthorization Act of 1986, the Toxic Substance Control Acts, the Clean Air Act, the Endangered Species Act, and the Clean Water Act are just some of the federal regulations affecting the private landowner. Various private interest groups — some pro-industry, some pro-environment — complicate the struggle to protect private property rights. Many of these groups have radical agendas.

There is a social paradox between 1) fulfilling a growing resource demand and 2) protecting the environment. The quandary the United States faces is finding a balance between the two. Proponents of either extreme, and those parties in the middle, try their best to support their respective stances with science and facts. In reality, the crux of the social debate stems from a divisive cultural gap. That gap is the cultural distance between rural life and city life in the United States. There is not a lot of evidence in suburban America showing where resources come from and who produces them. Sound and fair citizen-driven regulation is needed to protect our resources and allow us to meet the needs of everyday life.

Sociopolitical Climate

Good or bad, the management of our forests is changing dramatically, for both public and private lands. For example, the Forest Ecosystem Management Assessment Team was convened in 1993 to evaluate options for federal land use. This initiative developed mainly because of the public outcry over the protection of the spotted owl, logging practices, and the preservation of the economic base the logging industry supported by in the Pacific Northwest. All of these have severe impacts on land use and local economies.

Many companies are now taking an active role in the Sustainable Forestry Initiative. The American Forest and Paper Association launched SFI in 1994, when its members established a major industry goal: “To practice sustainable forestry to meet the needs of the present without compromising the ability of future generations to meet their own needs by practicing a land stewardship ethic which integrates the reforestation managing, growing, nurturing, and harvesting of trees for useful products with the conservation of soil, air and water quality, wildlife and fish habitat, and aesthetics.” (2) Originally, membership was in the hundreds, but some memberships have since been suspended for non-compliance to the bylaws of SFI. And some members have since resigned, refusing to bear the additional costs associated with complying with the SFI objectives. There are also more citizen-based associations such as the Forest Stewardship Council that place similar, if not greater, emphasis on sociological objectives.

Further, several states have adopted best management practices for silviculture (tending, harvesting and reproduction of forests and agriculture). Initially, these BMPs were established when industry recognized the changes that were taking place in forestry and farming due to a growing social awareness and concern for the environment. The Clean Water Act and its stipulations covering non-point source pollution (i.e., silviculture) also added to industry’s initiative to self-police. As they developed in each state and were updated, other entities such as consultants, environmental groups, private landowners, and so on got involved.

For those states that practice silviculture, many of these have mandatory BMPs, with agencies that govern compliance. BMPs help the landowner address issues such as road and construction improvements, harvest practices, reforestation, water quality, chemical applications and general environmental, endangered species and wildlife concerns. These BMPs establish minimum standards necessary for protecting and maintaining states’ water quality and certain wildlife habitats during forestry activities.

Practicing What We Preach

Setting policy to meet various requirements is generally well-intended. However, implementing these policies can be confusing, counterproductive, and costly. All of the regulations and reporting bodies present a daunting picture to the private land -owner. Several questions arise:

1) How can the private landowner limit liability when practicing timber, farm and wildlife management?
2) What does the future hold for property owners?
3) What financial impact are the above trends and regulations going to have on NIPF landowners?

The answers to these questions can be dismaying to the NIPF landowner. Remembering that roughly 60 percent of forested land in the United States is classified as NIPF, regulations for these lands have a tremendous effect on economies and the environment.

Environmental site assessments were first developed in the early 1980s to minimize risk to the owner and fiduciary institution when a property is bought, sold, or otherwise transferred. However, their costs and scope varied greatly until ASTM developed an ESA method in 1993 that brought a standard to the industry. The standard, E 1527, originally addressed the range of contaminants within the scope of CERCLA and petroleum products. It now includes such concerns as business risk. Commercial, private and industrial companies commonly use this ESA when all types of properties are transferred. Depending on the use of the property, the consulting firms performing an ESA can range from environmental, engineering, industrial hygiene, and geological firms, to numerous combinations of these and other industries. Lending institutions and other fiduciaries continue to use ESAs as a tool to reduce both their own and their client’s liability.

More than 250,000 properties are currently held by trust and estates, many of them under long-term management and ownership by financial and private institutions with trust powers. In the southeastern United States alone, there are millions of acres under NIPF management. Many of these properties are managed for silvicultural and agricultural practices, mixed with hunting, recreational, and other activities. The demand for timber and agricultural products continues to rise. These properties have their own set of unique and specific attributes and challenging assessment considerations. The two legislative acts that drive the need to have a standard method that addresses additional liabilities during property transfer are: 1) the Clean Water Act and 2) the Endangered Species Act.

Liability

As stated, these properties are unique. BMPs and endangered species recovery plans and management guidelines address regulations under these federal acts that help the current owner. But five years ago, there was no standard method in place to address any of these issues specific to due diligence during property transfer. Forestland and rural property needed to be assessed for these concerns by an independent party. So in 1998, Subcommittee E50.02 started the development of what was to become standard E 2247. This checks-and-balances approach now ensures that a potential buyer of a forested or rural property will have the tools to know the current BMP practices for streamside management zones, public lands, forest roads, stream crossings, timber harvesting, site preparation and planting, firelines, pesticide and fertilizer application, waste disposal, wet weather operations, and emergency conditions. Endangered species issues can now also be identified and evaluated. Task group members included stakeholders from industry, state and federal agencies, NIPF groups and individuals, lending institutions (timberland fund managers), and general interest — many of whom were environmental and real estate attorneys.

The Endangered Species List is undergoing changes constantly. The important things to remember are: 1) less and less public land is being used for traditional forest management practices; 2) each state has a recovery plan for the species of concern that are listed; and 3) there are individual management plans for ongoing operations. This means that the regulations and market trends chiefly affect the private landowner. Many permits are granted at the state level that exempt or limit silvicultural activities from liability associated with the “taking” of endangered plant species, as taking is defined in the Endangered Species Act.

The need to address the compliance of these practices during property transfer is critical and the tools to measure the risk associated with these issues is now in the language appended as a guide in E 2247. A second appendix provides a tool to measure risk associated with non-point source contamination. This is surface and stormwater runoff associated with silvicultural and agricultural activities that cause potential exposure to liabilities.

As a result of these concerns specific to forestland and rural property, the scope and appended guides of the standard oblige its user and the environmental professional to consider issues such as swale, water bar, streamside management zones, windrow, raking, primary zone, nesting area, pine beetle infestation, etc., and help the user of that report identify, measure, and manage these identified issues. Built into the standard is also some assessment to business risk caused by environmental conditions.

Also, forestland and rural properties typically have single chain-of-title of ownership with parceled or consolidated lands. These periods of ownership are also long, sometimes generations long. With commercial or industrial properties, chain -of -title investigations are typically on smaller, single parcels of land with multiple chains (i.e. corporations, partnerships, etc.). Costs for these chain-of-title investigations are based on the number of chains and acreage. For forestland and rural properties, chain- of-title information is typically learned through intensive interview with current and past owners/managers. As part of the new standard, little emphasis is now placed upon| the recording of the investigated chain -of- title for these properties.

Under E 1527, a topographic map review is a must and an aerial photograph review is a suggested additional source. Important vegetation, soil, habitat, and water quality information can be gained by a thorough aerial photograph review. Under E 2247, a reasonably ascertainable aerial photography review is required. E 2247 also provides a standard practice for forestland and rural acreage for those properties greater than 120 acres (not necessarily contiguous) and obliges the environmental professional and the user of the report to discuss whether or not the two appended guides on threatened and endangered species and non-point source issues will be employed as part of the deliverable. Using these appendices decreases the chance of a buyer accepting a property with existing problems associated with liabilities under these federal acts. It is important to point out that the use of these appendices is not mandatory as part of a transaction for these properties, but that the discussion to employ them is.

A Step Ahead

So, what can the forestland and rural property landowner do to keep pace with today’s “green” climate? Prudent use of E 1527 and E 2247 will better position the NIPF and rural property landowner for future markets as the Sustainable Forestry Initiative and growing environmental awareness takes a firmer hold in the wood products industry and various commercial agricultural enterprises. Yes, taking steps beyond those required by regulation adds costs to management practices. Prevention, however, costs less than corrective action. Landowners should have a qualified person measure the ecological impact of management techniques. As always, landowners should be sure to keep records of what they are doing so that they can use them later to show a history of good management.

Going to greater lengths to record a comprehensive history of management will save money in the long run. Landowners should know their objectives, minimize their liability, and practice ecologically sound timber management and agriculture. There are hundreds of avenues to take to get involved at the ground level by participating in the development of new methods, regulations, and standards. According to the U.S. Forest Service, domestic demand for wood fiber will increase by 50 percent by the year 2020. (1) Now is an exciting time to be managing this nation’s natural resources. //

References

(1) Evergreen Magazine, 1994. Forest Fact Book. The Truth About American Forests, p. 24, The Evergreen Foundation, 4025 Crater Lake Highway, Medford, OR 97504.
(2) American Forest and Paper Association, 1995. Sustainable Forestry, Principles and Implementation Guidelines. December 1995, p. 3

Sources

Bates, Terri, 1996. F&W Forestry Services, Inc., Newsletter - No. 51, Special Report, p. 3.
Florida Department of Agriculture and Consumer Services, 1993. Silviculture, Best Management Practices, pp. 91-94.

Copyright 2003, ASTM

Patrick C. Wilber is environmental manager at F&W Forestry Services, Inc., Gainesville, Fla. He is responsible for their environmental services including environmental site assessments, wetland mitigation and planning and permitting. Wilber has more than 14 years of experience in private, public, and industrial environmental management and marketing. He serves as ASTM’s task group chair for E 2247.