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CHAPTER 50 - SPECIAL APPRAISALS
This chapter guides the appraiser in making sound appraisal decisions in special
situations.
51 - ASPEN APPRAISALS. ............................................................................................ 2
52 - POLE APPRAISALS. .............................................................................................. 2
53 - SALVAGE SALE APPRAISALS. ............................................................................ 2
54 - ROUNDWOOD PRODUCT APPRAISALS. ............................................................. 3
54.1 - Multi-Product Sales. ......................................................................................................... 3
55 - FUELWOOD APPRAISALS. ................................................................................... 3
56 - STANDARD RATE APPRAISALS. ......................................................................... 3
57 - TIMBER PROPERTY APPRAISALS. ...................................................................... 4
58 - TIMBER SETTLEMENT APPRAISALS (36 CFR 223.1). ........................................ 4
58.1 - Timber Of Merchantable Size And Quality. .................................................................... 4
58.11 - Appraisals By Comparable Timber Sale Transactions. .............................................. 4
58.12 - Analytical Appraisals. ................................................................................................ 5
58.2 - Young-Growth Stands. ..................................................................................................... 5
58.3 - Young Tree Growth. ......................................................................................................... 6
59 - RATE REDETERMINATION APPRAISALS. .......................................................... 8
59.1 - Scheduled Rate Redetermination Appraisals. .................................................................. 8
59.2 - Sale Extension Appraisals. ............................................................................................... 8
59.3 - Emergency Rate Redetermination Appraisals. ................................................................. 8
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51 - ASPEN APPRAISALS.
Since 1963, demand for sales of aspen have been minimal. Aspen uses have primarily been for
the excelsior in cooler pads, furniture padding, and packing material; sawn lumber for furniture
framing and corner braces, pallets, house trailer framing, paneling, and sawn shakes (shingles),
with very minor amounts for sawn novelty products; and mine props and stulls.
Aspen will not be combined with coniferous species for sawtimber regardless of volume. Aspen
will be appraised using the current published base period price in the appraisal bulletin. No
adjustments will be made in calculating the advertised rate. Aspen may be combined with other
species for products other than sawtimber; fuelwood is an example.
52 - POLE APPRAISALS.
Poles are high-value products and require relatively high quality trees suitable for lumber
production. Expertise is required to recognize a tree suitable for a utility pole. In Region 3,
poles are usually harvested from going sawtimber sales by purchasers and charged for at regular
sawtimber stumpage rates.
When a purchaser removes a portion of a sawtimber sale as poles, or when the Forest Service
receives an application for a pole sale, consider the relative values involved when designating the
timber. A tree suitable for a pole will frequently produce a sawlog from the butt end and
pulpwood or post material from the top, or as a minimum, fuelwood. Determine a stumpage
value for each end product to be utilized from the entire tree to the minimum utilization
specifications stated in the sale contract.
53 - SALVAGE SALE APPRAISALS.
Salvage timber means trees which are dead or estimated to die within 3 years. Salvage sales
harvest and utilize material that would otherwise be lost. Salvage sales should be used also to
eliminate dangerous trees from recreation areas along travelways. Salvage of other trees may be
possible as qualified under FSM 2435.05.
Prompt removal of dead timber, especially that resulting from disasters such as fire, insect and
disease, and windthrow is necessary. Delays result in loss of volume and value in merchantable
trees.
A determination of volume and value loss needs to be made. Volume may need to be adjusted
from cruise results based on estimated wood loss from fire, disease, insects, and so forth. Value
may need to be adjusted using unusual costs on the R3-FS-2400-17, line 19. One to two percent
of WWPA index can be used to adjust the value of sawtimber due to special conditions (fire,
insect, disease, etc.).
Regional office approval will be needed to adjust the value by more than 2 percent of the
WWPA index.
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54 - ROUNDWOOD PRODUCT APPRAISALS.
Roundwood products consist of trees that are suitable for manufacture into pulp, paper, or
fiberboard. These products are manufactured from all sizes of trees, but trees above 9 inches
DBH must be appraised as sawtimber. Roundwood appraisals will apply to trees between 6
inches and 8.9 inches DBH.
The appraisal destination should be to the mill that processes the material to the final end product
of either paper or fiberboard. The Regional Office shall publish the roundwood base period price
in the Appraisal Bulletin. The roundwood Base Period Price shall not be adjusted for sale
conditions. Roundwood at this time will not be bidable due to there being only one pulp facility
in the Region. All roundwood appraisals will be summarized on form R3-FS-2400-17, Appraisal
Summary - Transaction Evidence.
54.1 - Multi-Product Sales.
It may be desirable to harvest roundwood during the same entry as a sawtimber sale. This
creates a problem in distinguishing between roundwood and sawlogs in scaling because the
scaler will be unable to distinguish between logs from small trees or small logs from large trees.
All multi-product sales shall be sold as pre-measurement sales.
Summarize the sawlogs and roundwood on form R3-FS-2400-17. The total estimated quantity
and value of each product would be determined separately in the contract. Bidding would be
based on total value. The roundwood (6 inches to 8.9 inches DBH) trees shall use the Regional
Base Period Price with no adjustments for sale conditions. Sale condition costs shall not include
pulp costs for haul, road maintenance and slash.
55 - FUELWOOD APPRAISALS.
Fuelwood sales can be analytically appraised. Usually, fuelwood sales will use standard rates as
their appraised rate.
56 - STANDARD RATE APPRAISALS.
A standard rate appraisal is developed to apply to several small sales where it is not practical to
develop a formal appraisal for each sale. It is specifically adaptable where many personal use
fuelwood permits are planned. Standard rate appraisals can be applied to sawtimber and large
pole sales if the sales are relatively small. Standard rate can be applied to all fuelwood and
miscellaneous nonconvertible sales. Species and products may not be sold below established
standard rates without a formal appraisal. Standard rate appraisals need to be reviewed annually
and updated if warranted by changed conditions. An analysis of small sales sold during the
previous year should be used to determine standard rates.
Document all appraisals with a statement attached to permit as follows:
"Appraisal is by reference to standard rates for (species and product).
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Such rates are considered fair market value."
57 - TIMBER PROPERTY APPRAISALS.
A timber property sale is a sale of timber that has been partially processed. For example, a sale
of decked timber from a road right-of-way or other clearing is a timber property sale. The costs
of falling, bucking, and skidding have already been incurred and these costs will not be included
in the determination of advertised stumpage. However, it will be necessary to calculate the
excess cost not incurred to determine the measure of timber property value in excess of property
for reporting purposes. Calculate the excess costs in the same manner as a conventional sale, but
do not include them in the involved cost center. The excess value is deposited into
miscellaneous receipts instead of the National Forest Fund.
58 - TIMBER SETTLEMENT APPRAISALS (36 CFR 223.1).
58.1 - Timber Of Merchantable Size And Quality.
Instructions and procedures for the disposal of timber under regulation 36 CFR 223.1 are in FSM
2464. An appraisal having aspects of a damage appraisal must be made for the timber to be cut,
damaged, killed, or destroyed in occupancy of land under permit or right-of-way clearing.
Appraisal may be in the form of comparable timber sale transactions, with appropriate
adjustments for timber property values, or by analytical appraisal plus average bid premium
experienced on comparable sales. The appraisal should reflect the stumpage value of the timber
as a part of a logical logging unit even though most special use areas will not be logical sale
units. Do not allow costs for permanent road development and other contractual work (slash,
erosion, road maintenance, and so forth) to be done by the permittee as a requirement of a license
or permit for occupancy use. Such expense is considered as "necessary expense" to the permittee
in their occupancy and use of the area and is not chargeable against the value for the timber. Do
not include felling and bucking costs in the appraised value as a part of the clearing and disposal
work required by the license or permit if the area must be cleared for the permittee's occupancy.
Usually all or part of skidding cost is an allowable expense, and all of loading cost is an
allowable expense. Calculate the difference between a normal logical logging expense and the
allowable expense. This difference is the timber property value and shall be treated according to
instructions in FSM 2490.
58.11 - Appraisals By Comparable Timber Sale Transactions.
Timber sales selected for use in establishing stumpage values in settlement sales should be
comparable. Select, if possible, active timber sales sold within the previous 2 years within the
marketing area. Adjust the current contract rates for each selected comparable sale for haul cost
differences, inappropriate contractual costs, and other timber property value to determine the
value of the settlement timber. If more than one sale is selected, average the adjusted values for
each sale to obtain the appraised value applicable to the settlement timber. Adjust species
contract rates for each sale being used for comparison as follows:
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1. For escalated sales, adjust tentative stumpage rates by stumpage rate adjustment
procedure for the period of time specified by the permit or right-of-way agreement.
2. Increase the adjusted stumpage rates in item 1 for any work not required of the
licensee or permittee, or which is required by the license or permit for the occupancy of the land.
Felling and bucking, part or all of skidding, slash disposal, and erosion control are examples of
the usual timber sale appraisal costs to be added to the stumpage rates.
3. Adjust for differences in log haul.
58.12 - Analytical Appraisals.
Make appraisals in accordance with current instructions for appraising commercial timber sales
except for the following modifications applicable to settlement sales:
1. Do not increase logging costs because of the nature of the permitted use. Treat
settlement sales as logical logging units.
2. Do not allow costs for permanent road construction (unless such roads are of
significant benefit to the Forest) or slash disposal, which should all be required in license or
permit terms. Allow for road-use charges if required of the permittee.
3. Reflect bid premiums obtained on recently sold sales of comparable timber in the
stumpage value. Use the sale as a whole average bid premium, not just the species involved with
the settlement. If there is more than one sale with a bid premium, weigh by volume for each
species to obtain weighted average. Add bid premiums to the conversion return on a weighted
by volume average for all comparable sales being used.
Note: Settlement timber is sold at its appraised rates and is not advertised. If a settlement sale is
made to a Government road contractor, it is important to know exactly what logging cost items
are required under the road contract. If the contract specifies that the contractor fell, buck, skid
and deck the merchantable timber from the road right-of-way, do not allow these costs again as a
cost against the timber. Theoretically, the contractor has already accounted for this cost.
58.2 - Young-Growth Stands.
Young-growth stands, including plantations with or without scattered overstory that are cut or
destroyed, shall be paid for under conditions stated in FSM 2464.11. Young-growth stands
stocked at least to the level given in the following table shall be valued on a damage appraisal.
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SATISFACTORY STOCKING TABLE
(Approximately 50 percent of Full Stocking)
Minimum Number of Potential Crop Trees Per Acre
Size Class
Seedlings/Saplings
Small Poles
Size
<5.0" DBH
5.0-8.9" DBH
Small Sawtimber
Sawtimber
9.0-14.9" DBH
>14.9" DBH
No./Acre
300
110
55
30
Calculation Method
Replacement value
Market or
Replacement Value
Market value
Market value
Note: 50 percent of satisfactory stocking must be desirable species: ponderosa pine, spruce, true
firs, douglas fir or aspen.
All appraisals for sales under 36 CFR 223.1 will include an appraisal for young-growth.
58.3 - Young Tree Growth.
Damages may be actual market value of the damaged timber or costs of replacement of the stand,
whichever is the sounder measure of damages suffered by the National Forest. Damages should
not include both types of value for the same size-class tree. Three methods of measuring
damages to market value, and two elements of replacement value, are described below:
1. Market Value Of The Young Growth. Three approaches are suggested to establish
values of damaged young growth. Test all approaches in any damage situation, and use the one
that appears most sound and defensible, considering all facts of the individual case.
a. Transaction Evidence. Most acceptable to the courts, but often most difficult to
obtain, is actual evidence of sale value of lands stocked with immature timber, as
compared with actual sales of bare land. The difference is the value of the immature
timber. This method is preferred.
b. Damage Due to Loss of Increment to Date. Use an analytical method to estimate
young-growth damage.
D=(M)(Y)(K)(S)(V)(A)
D=Damage
M=Mean annual increment per acre at rotation age
Y=Age of stand at time of damage
K=Percentage of stand killed
S=Percentage of stocking just prior to damage
V=Current value/unit as if stand were mature
A=Acres
In the formula above, "(M)(Y)(K)(S)" is the volume damaged per acre, "V" is the value per unit
of measure, and "A" is the number of acres damaged. This method gives the current value of
that portion of a future harvest that is in existence today. It assumes, in effect, that growth from
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now until the stand would have been of merchantable size is equal to the discount rate from that
time back to the present.
c. Damage Due to Loss of Total Potential Increment at Harvest. In this method the
procedure is similar to method (b) below except that "Yr" is the age of the stand at
rotation age, and a discount factor for the number of years (Yr minus Y) is applied. A
discount or interest factor of 3 percent is considered fair. The formula is:
D=[(M)(Yr)(K)(S)(V)(A)]/(1+p)n
D,M,K,S,V and A are the same as in method (b) above
Yr=Age at rotation
p=Interest rate
n=Number of years to rotation age (Yr minus Y)
EXAMPLE: For a 20 year old stand with mean annual increment of 410 board feet per acre per
year, 80 percent stocked before the fire, 80 percent killed, current value of stumpage-$20 per
thousand board feet, 40 acres affected, rotation age is 80 years.
Method (b):
D=(0.410 X 20.0 X 0.80 X 0.80 X $20 X 40)
D=5.248 M/acre X $20 X 40 acres
D=$104.96/acre X 40 acres
D=$4,198.40
Method (c):
D=[.410 X 80.0 X 0.80 X 0.80 X $20 X 40] / (1.03)60
D=[20.99 M/acre X $20 X 40 acres] / 5.8916
D=[$419.80 X 40 acres] / 5.8916
D=$16,792 / 5.8916
D=$2,850.15
In this example, method (c) shows a lower value than method (b). The reason is that the growth
rate of 1.25 percent [(0.410)/(80 X 410)] is lower than the 3 percent interest rate in method (c).
Mean annual increment (MAI) data from growth tables or RMYLD Computation of Yield
Tables for Even-Aged and Two-Storied Stands, Rocky Mountain Research Paper RM-199, may
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be used if the tables are defensible in court and the data are adjusted to the ground conditions.
When the stand destroyed is so young that MAI cannot be measured, calculate growth from
normal-yield tables.
2. Replacement Value of Young Growth.
a. Cost of Reestablishment
(1) If stand must be regenerated artificially, use:
[(K)(S)(A)(C)] X (1 + p)n in which C is the cost of planting or seeding per acre, p is
the interest rate, n is the age of the stand at time of damage, and K, S, and A are the
same as above. This is the replacement cost of a stand n years of age, with (K x S)%
of stocking.
(2) Include here any site preparation cost made necessary by the damaging agent, and
essential to successful artificial or natural regeneration of the young growth.
b. Cost of Timber Stand Improvement, Including Prescribed Burning. Expenses of
timber stand improvement costs (before the damage) are a proper part of damages if
they will again be necessary in the young growth reestablishment. If the loss is
partial, proportion it on the basis of number of acres or stems, and allow for
percentage of kill and percentage of original stocking.
59 - RATE REDETERMINATION APPRAISALS.
59.1 - Scheduled Rate Redetermination Appraisals.
A rate redetermination consists of a narrative report and completed form FS-2400-19a, Report of
Timber Sale Rate Redetermination.
59.2 - Sale Extension Appraisals.
Procedures for making extension appraisals are in FSM 2450.
59.3 - Emergency Rate Redetermination Appraisals.
Most timber sale contracts provide for emergency rate redeterminations upon written application
of the purchaser after at least one rate redetermination has been made. If the purchaser qualifies,
a rate redetermination shall be made. Submit a complete rate redetermination report to the
officer authorized to make the sale.