Thank you, Mr. Chairman. I am pleased to be able to participate in this hearing on how roads are financed on the National Forests. The forest roads issue has received much attention over the last few years, and the 105^th Congress has been no exception.

In 1997, there have been calls to eliminate one of the ways in which roads on the National Forests are financed - a program called purchaser road credits. Some have alleged that the program is a subsidy to companies that purchase Forest Service timber, while others claim that it is an outdated system and no longer necessary due to a smaller timber sale program.

There is no question that this is a complex issue - one that I am certain took wading through a sea of data to complete the analysis we will hear today. I am delighted to have THE definitive study on the financing of roads, and more specifically, the purchaser road credit program.

I have had an opportunity to review the report being presented today. Some of the major findings of this report are:

1. The purchaser credit program does NOT contain a subsidy for timber purchasers;
2. The network of roads that allows us to access our National Forests for camping, fishing, hunting, fire suppression, wildlife management, and forest management was financed and built by timber purchasers;
3. States such as Oregon and Idaho use similar methods of financing forest roads;
4. The VAST majority of road work done in the National Forests through the purchaser credit program has been road RECONSTRUCTION, not new road construction. That means roads have been improved for environmental, as well as public safety reasons.

The fact that purchaser credits are not a subsidy also means that this program is budget neutral and has no deficit impact. But the elimination of this program would have a serious effect on states and counties. Without purchaser credits, states would suffer the loss of about $11 million per year nationwide.

For those of you who would like to follow along, I am reading from Table 8 of the analysis. In 1996, the total value of purchaser credits was about $44.5 million dollars. As you all know, states are compensated by the federal government, because local governments cannot collect property taxes on federally-owned land. This compensation is in the form of "25 percent payments." By law, it is used to finance public schools and county roads.

This $44.5 million represents just over $11 million that states would not collect if the purchaser credit program were eliminated. Spread across the country this $11 million may not seem significant, but in rural counties that have already seen dramatic reductions in county budgets, the $150,000 or $200,000 this might mean to their budget could be the difference between retaining and eliminating a critical public school program. It is ironic that, with all of the discussion of "corporate welfare," the big losers under a proposal to eliminate purchaser road credits would be our rural school children. States and counties that cannot provide for themselves will create an added burden to the federal government.

As we consider the financing of roads, it is important to understand the full scope of this issue and all of its impacts, rather than arriving at hasty conclusions.

I thank the witnesses for being here today, and I look forward to having a rigorous discussion about the financing of roads today and in the future. Thank you.