5420 (MT9230) P
EMAIL TRANSMISSION – 02/23/2009
Instruction Memorandum No. MT-2009-031
To: Field Managers
From: Deputy State Director, Division of Resources
Subject: Update of Montana/Dakotas Minimum Price List for Forest and Rangeland Vegetative Products
Program Area: Forestry, Rangeland, and Fuels
Purpose: This Instruction Memorandum supersedes Instruction Memorandum (IM) No. MT-2007-052 issued on April 20, 2007.
Policy/Action: The current policy for the sale of vegetative resources is found at 43 CFR §5420.0-6. This policy states that all timber or other vegetative resources to be sold shall be appraised and in no case shall be sold at less than the appraised value. Measurement shall be by tree cruise, log scale, weight, or such other form of measurement as may be determined to be in the public interest.
The local forest/vegetative products appraiser may establish an appraised value by using 10 percent of the local market selling price for low valued products such as but not limited to firewood, posts, poles, nuts, berries, cones, transplants, boughs. For higher valued products, such as sawtimber, an analytical, transaction evidence, or comparable sales appraisal must be used. The appraisal method based on comparable sales data is the preferred method. All product appraisals must be documented in the official case file for the project.
The values for products established in the Minimum Price List may be used for sales of incidental or personal-use forest products where no local market data is readily available. Where the appraised value for the products is below the Minimum Price List, the minimum price must be used to sell the product. However, if the appraisal process included consideration for other resource values, such as forest health, wildlife habitat, recreation, watershed protection, etc. which lead to the low product price determination, then the actual appraised price may be used. Use of this lower-than-minimum-price and how it was arrived at must also be documented in the official case file for the project.
Forest and vegetative product sales, including biomass, where the total value of the sale is $2,499 or less, may be made using the Vegetative or Mineral Material Negotiated Cash Sale Contract - Form 5450-5. This form may not be used for any stewardship contracting authority projects. This is a cash
sale contract and must be paid in full prior to issuance of the contract. Installments, payments, or bonding are not permitted with this form.
Due to the downward trend in the economy, the minimum amount for each transaction using the 5450-5 contract has been lowered to $10.00. The contract may be issued for a term not exceeding 1 year from the date of issuance. Extensions to the 5450-5 contract will be the exception, not the rule, and if granted will be done in accordance with 43 CFR 5473.
The Authorized Officer may determine when it is appropriate to collect road maintenance fees on sales of forest or vegetative products, including biomass, when using Form 5450-5. When collected, the minimum road maintenance fee will be 10 percent of the total value of the product(s) being sold. This figure will be rounded to the nearest whole dollar. For example: If you sell 50 line posts valued at $25.00, then you would add $3.00 for road maintenance (10 percent of $25.00 = $2.50, rounded to nearest whole dollar = $3.00). The total contract price would be for $28.00 ($25.00 for the product plus $3.00 for road maintenance). Fees collected for road maintenance will be deposited to the L91200000 account.
Timeframe: This instruction memorandum is effective upon issuance.
Budget Impact: Effect on the budget is minimal.
Background: This instruction memorandum reiterates the current policy on establishing fair market values on vegetative products that are available for sale to the public. It also establishes a minimum price for which those products may be sold.
Manual/Handbook Sections Affected: Related Manual sections may be found in 5001-1 under Fair Market Value and in Handbook H-5400-1 under Advertised and Other Than Advertised Sale, and in H-5470 under Extension of Time sections.
Coordination: Update of the minimum price list was coordinated with the Missoula, Butte, Dillon, Lewistown, Billings, Miles City, and South Dakota Field Offices. It was also coordinated with the Forest Service Regional Office in Missoula.
Contact: Questions pertaining to the sale of vegetative products should be directed to Bill Hensley at (406) 896-5042.
Signed by: Authenticated by:
Theresa M. Hanley Melissa R. Dykes
Deputy State Director, Division of Resources Staff Assistant (MT9230)