Under the O&C Act of August 28, 1937, the policy of disposing of the lands was reversed. The lands were to be retained and Congress required management according to principles of sustained yield by enacting the requirement that lands classified as timberlands
Congress further described its intentions in requiring sustained yield management of all O&C timberlands as follows:
The above-quoted report concludes that the O&C Act “establishes a vast, self-sustaining timber reservoir for the future, an asset to the Nation and the State of Oregon alike. All of which is financed by the Lands themselves.”
During the course of deliberations and hearings by Congress, AOCC expressed concerns about revenue sharing. The bill that was originally introduced required sustained yield management and provided payments of at least 50 percent of revenues to the O&C Counties, but there was no assurance that management would actually produce sufficient revenue to satisfy the Counties’ needs. In response to the concerns of AOCC, the bill was amended as requested by AOCC to provide a guaranteed minimum harvest that would assure the necessary minimum revenue. The Act as passed requires that:
The system for distributing revenues from the O&C Lands was also restructured by the O&C Act. The concept of property tax equivalency as provided by the Stanfield Act was abandoned. Instead, the Counties were assured at least 50 percent of the revenues from the O&C Lands. Once certain amounts were reimbursed to the United States, the O&C Counties were entitled to up to 75 percent of all revenues from the O&C Lands. The remaining 25 percent would meet the costs of administering and managing the land.
Immediately following enactment, the Department of the Interior appointed Walter Horning as the Chief O&C Forester, which position had all the authority and more of the position that today is called the Oregon State Director for the Bureau of Land Management. Horning held the position for many years and he spearheaded implementation of the O&C Act. He wrote contemporaneously about that implementation process, and his writings are instructive:
Later in 1939, Horning further elaborated on the Department of the Interior’s understanding of the O&C Act:
As implementation approached its 10-year anniversary, Horning wrote at length about the steps that had been taken to achieve the purposes and intent of the O&C Act:
Horning was very successful at developing the resources and implementing the O&C Act as Congress had directed. A 1976 letter from Herbert Haglund, Chief, BLM Division of Resources, to Ray Doerner, President of AOCC, listed the “allowable cuts” (in 1000s bf) for each of the early years under the O&C Act:
Revenue generation from timber sales was enhanced by increasing timber values over the period. By the end of 1952, the repayments due to the United States were satisfied, and the O&C Counties were eligible to receive 75 percent of the revenues generated. The Counties began to receive their full 75 percent share of revenues in 1953. After 1953, varying amounts to which the O&C Counties were otherwise entitled were retained by the federal government with the cooperation and support of the O&C Counties under annual Department of the Interior Appropriation Acts. After 1960, the O&C Counties received 50 percent of the revenues. The Counties voluntarily “plowed back” a third of their entitlement (25 percent of total revenues) to pay for improvements on O&C Lands and ensure the forests’ future productivity. For Counties, the plowback funds were an investment made with an eye towards future returns.
The O&C Act has been interpreted many times by the courts as making timber production the dominant use for the O&C Lands. The other uses for the lands identified in the O&C Act are secondary uses, to be achieved through sustained-yield management. The O&C Lands are unlike most other federal lands, which are managed under multiple-use mandates where all possible uses are to receive equal consideration in the planning process. The O&C Act provides for a dominant use, timber production, not unlike legislation setting aside other lands for particular purposes such as wilderness, parks, scenic areas or historic preservation.
In 1976, Congress itself recognized the unique mandates of the O&C Act when it passed the Federal Land Policy and Management Act (FLPMA). FLPMA redefined the management direction for nearly all lands in the United States under the jurisdiction of the BLM, making almost all of them subject to a multiple use mandate under which all uses receive equal consideration. The telling exception are lands managed under the O&C Act. Congress specifically preserved the dominance of timber production on the O&C lands by adopting section 701(b) of FLPMA, which says that “[n]otwithstanding any provision of this Act [FLPMA], in the event of conflict with or inconsistency between this Act and the . . .[O&C Act and Coos Bay Wagon Road Acts], insofar as they relate to management of timber resources, and the disposition of revenues from lands and resources, the latter Acts shall prevail.”
The courts have been likewise clear. In a case involving a dispute over access to timberlands made difficult because of the checkerboard pattern of private and public ownership which is characteristic of the areas which include the O&C lands, the Ninth Circuit said:
A few years later the same Court, in resolving a dispute over the allocation of revenues under the O&C Act, noted that
The 9th Circuit Court of Appeals again emphasized the dominance of timber production over secondary uses, such as recreation, in a 1987 case:
A 1990 opinion of the 9th Circuit identified the overriding purpose of the O&C Act is to provide the O&C Counties with revenues through the sale of timber:
In Headwaters, the 9th Circuit made clear that timber production and harvest was the way Congress intended to achieve the goals of a sustained revenue stream to the counties and support of local economies and industries. In responding to the plaintiffs’ argument in that case that the O&C lands should be managed for the discretionary protection of owl habitat, the court stated that:
Following passage of the O&C Act, the Secretary initially managed the O&C Lands to provide for timber harvests consistent with the statutory mandates of the O&C Act. Starting in 1959 the BLM began selling an average of more than 1.1 billion board feet of timber from the O&C Lands every year for the next 32 years. The revenues from such timber provided substantial benefits to the O&C Counties as contemplated by the O&C Act. Expressed in current value dollars, revenue sharing with Counties from the O&C Lands averaged about $134 million dollars annually, divided between the 18 O&C Counties according to a formula that takes into account the value of land and timber in each County in 1915.
The era of implementing the O&C Act according to its terms came to an end soon after the decision in the Headwaters case. The Northern Spotted Owl was listed under the Endangered Species Act in 1990, and that action ushered in the modern historic period of controversy and conflict over management of the O&C Lands.