The Oregon and California Railroad Lands
(O&C Lands): In Brief
Updated May 25, 2023
Congressional Research Service
https://crsreports.congress.gov
R42951

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link to page 4 link to page 5 The Oregon and California Railroad Lands (O&C Lands): In Brief

he Oregon & California Railroad (O&C) lands consist of nearly 2.6 million acres of
federal land in 18 counties in western Oregon (see Figure 1 and Table 1). The majority of
T these lands were originally granted to the Oregon & California Railroad Company in 1866
to construct approximately 300 miles of the Oregon portion of railroad from Portland, OR, to
Sacramento, CA.1 The railroad received alternating sections of land for an average of 20 miles on
each side of the proposed railroad, resulting in a checkerboard ownership pattern with private,
state, local, and federal ownership. As part of the grant, Congress directed the Oregon &
California Railroad Company to encourage settlement and development by selling parcels no
larger than 160 acres at a maximum price of $2.50 per acre.2 However, the railroad violated the
grant, in part by selling larger tracts above the designated price and also by temporarily halting
sales to increase timber prices.3 In 1908, the United States sued the railroad company, and in 1915
the U.S. Supreme Court ruled that the railroad violated the terms of the grant.4
The disposition of these lands was eventually resolved when the Chamberlain-Ferris Act of 1916
revested all unsold tracts of land back to the federal government.5 Management concerns—such
as how to compensate the counties for the loss of property tax revenue—persisted and were
addressed with the Oregon & California Railroad Lands Act of 1937 (O&C Act).6 This act
directed that the Department of the Interior (DOI) would administer the lands “for permanent
forest production” with the purpose of providing timber, protecting watersheds, providing
recreational opportunities, and contributing to the economic stability of the local communities.
The O&C lands now consist of three types of lands: 2.1 million acres of the revested O&C lands,
managed by the Bureau of Land Management (BLM, within DOI); 492,000 acres of the revested
O&C lands, managed the U.S. Forest Service (FS, in the Department of Agriculture); and 75,000
acres of the Coos Bay Wagon Road (CBWR) lands, also managed by BLM.7 The CBWR lands
were reconveyed to federal ownership in 1919 after the failure of the Southern Oregon Company
to fulfill the terms of a grant to construct a military road.8
This report provides background information about the O&C lands, discusses federal payments
made to the O&C counties to compensate for the tax-exempt status of these federal lands, and
summarizes some of the issues before Congress related to management of the O&C lands.

1 Bureau of Land Management (BLM), O&C Sustained Yield Act: the Land, the Law, the Legacy, http://www.blm.gov/
or/files/OC_History.pdf; or Bureau of Governmental Research and Service, School of Community Service and Public
Affairs, University of Oregon, The O&C Lands (Eugene, OR: 1981), hereinafter referred to as The O&C Lands.
2 Michael C. Blumm and Jonathan Lovvorn, “The Proposed Transfer of BLM Timber Lands to the State of Oregon,”
Land and Water Law Review, vol. 32, no. 2 (1997), pp. 353-412, hereinafter referred to as Blumm & Lovvorn, 1997.
3 Michael Blumm and Tim Wigington, “The Oregon & California Railroad Grant Lands’ Sordid Past, Contentious
Present, and Uncertain Future: A Century of Conflict,” Boston College Environmental Affairs Law Review, vol. 40, no.
1 (February 2013), p. 12. Hereinafter referred to as Blumm & Wigington, 2013.
4 Oregon & California Railroad Co. v. United States, 238 U.S. 393 (1915).
5 Act of June 9, 1916, ch. 137, 39 Stat. 218.
6 Act of August 28, 1937, ch. 876 (also known as the McNary Act), 50 Stat. 874; 43 U.S.C. §§2601-2634.
7 BLM, Public Land Statistics 2021, Table 1-5. The Forest Service (FS) O&C acres consist of unselected and
unpatented odd-numbered sections that were within the indemnity limits of the railroad but also were within the
boundaries of a national forest established in the 1890s. When the O&C lands were revested back into federal
ownership, the FS claimed jurisdiction, despite opposition from the Department of the Interior. The issue was resolved
in 1954 when Congress approved a bill affirming the administrative jurisdiction of the FS but directing that the
disposition of revenue follow the formula established by the O&C Act. Act of June 24, 1954 (P.L. 83-426), 43 U.S.C.
§§2631-2634. Other laws have set aside some O&C acres to be administered by the FS while maintaining their status as
O&C lands.
8 Act of February 26, 1919, 40 Stat. 1179.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

Figure 1. The O&C Lands
Managed by the Bureau of Land Management (BLM) and U.S. Forest Service (FS)

Source: CRS, using data from BLM’s Oregon District Boundary Land Polygon Hub dataset, available from BLM’s
Geospatial Business Platform.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

Table 1. Oregon and California Railroad (O&C) and Coos Bay
Wagon Road (CBWR) Acres
By County and Administering Federal Agency
Bureau of Land Management
Forest Service
Oregon County
O&C
CBWR
O&C
Total
% of Total
Benton
52,828
0
1,720
54,548
2%
Clackamas
52,744
0
41,637
94,381
4%
Columbia
10,960
0
0
10,960
<1%
Coos
94,438
59,914
23,002
177,354
7%
Curry
36,681
0
56,735
93,416
4%
Douglas
602,455
14,633
95,641
712,729
27%
Jackson
396,434
0
46,303
442,737
17%
Josephine
269,483
0
109,426
378,909
14%
Klamath
46,199
0
20,962
67,161
3%
Lane
277,253
0
95,293
372,546
14%
Lincoln
8,773
0
0
8,773
<1%
Linn
85,748
0
520
86,268
3%
Marion
20,753
0
0
20,753
1%
Multnomah
4,208
0
0
4,208
<1%
Polk
40,491
0
1,160
41,651
2%
Til amook
40,775
0
0
40,775
2%
Washington
11,616
0
0
11,616
<1%
Yamhil
33,045
0
0
33,045
1%
TOTAL
2,084,884
74,547
492,399
2,651,830
100%
% of Total
79%
3%
19%
100%
—
Source: Department of the Interior, Bureau of Land Management, Public Land Statistics 2021, Table 1-5.
Management of the O&C Lands and Resources
The O&C lands consist mostly of Douglas fir forests, a softwood timber species commonly used
for construction purposes. As part of the O&C Act of 1937, the lands were classified as
timberlands to be managed for “permanent forest production.” Timber was to be sold, cut, and
removed in conformity with the principle of sustained yield to provide a permanent timber
supply. The statute established a 500 million board feet annual allowable sale quantity (ASQ),
which could be adjusted periodically. By 1972, the ASQ peaked at approximately 1.2 billion
board feet, aided in part by a 1960s modification that included the intermixed public domain
forestry lands in the calculation formula.9 From the 1960s to the 1980s, the average harvest level

9 BLM also manages approximately 239,000 acres of land which has never been conveyed out of federal ownership—
called public domain forestry lands—and are intermixed with the O&C lands.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

regularly exceeded 1 billion board feet per year.10 Harvest levels began to decline in the 1990s,
reaching a low of 13 million board feet in 1994.11 From 2000 through 2020, BLM has offered an
annual average of approximately 192 million board feet for harvest.12
The O&C Act also provided for protecting watersheds, regulating stream flow, contributing to the
economic stability of local communities and industries, and providing recreational opportunities.
Although some would see the inclusion of these other management goals as requiring the O&C
lands to be managed for multiple uses, others contend it requires management for timber
production over other uses—that is, timber production is the dominant use. The dominant-use
interpretation has been controversial at times. BLM has adopted the dominant-use interpretation
and the courts have affirmed it at various times.13
Management direction for the O&C lands is in BLM’s Western Oregon Management Plans.14 The
plans describe the management objectives for the lands and resources covered in the plan area,
and they allocate the potential future uses of the lands based on achieving the specified
management objectives. Additionally, the plans identify the ASQs for sustained yield timber
production across the BLM-administered O&C lands.
In 1998, Congress established a “No Net Loss” policy for lands administered by BLM in western
Oregon.15 The act requires BLM to ensure the total acres of O&C and CBWR land, and land
available for timber harvest, remain constant over a 10-year period. This means that any sale of
O&C lands must be offset by an equal acquisition (through purchase or exchange) of new land,
within 10 years.
Federal Payments to the O&C Counties
The counties containing the O&C lands had a financial stake in the O&C lands because they
received tax payments from the railroad until 1911, when the railroad stopped paying in
anticipation of the land being returned to federal ownership. When the lands were returned to

10 Deborah Scott and Susan Jane M. Brown, “The Oregon and California Lands Act: Revisiting the Concept of
‘Dominant Use’,” Journal of Environmental Law and Litigation, vol. 21 (April 2007), pp. 259-315. Hereinafter
referred to as Scott & Brown, 2007.
11 Ibid, p.279.
12 Annual data compiled from BLM, Public Land Statistics, Table 3-12, at https://www.blm.gov/about/data/public-
land-statistics. This includes all forest products offered for sale from the BLM’s western Oregon office, which includes
the O&C lands, CBWR lands, and public domain forests. Volume of forest products offered for sale in any given year
do not directly correspond to volume harvested. For updates regarding BLM timber harvesting activities, see CRS
Report R45688, Timber Harvesting on Federal Lands.
13 For a discussion of the legal interpretations of the O&C Act as a dominant-use statute, see Scott & Brown, 2007, and
Blumm & Wigington, 2013.
14 The Western Oregon Management Plans consist of two separate but coordinated resource management plans
providing direction for the management of the lands and resources on the O&C lands, CBWR lands, and other BLM-
administered lands: BLM, Southwestern Oregon Record of Decision and Resource Management Plan, August 2016,
covering BLM’s Medford, and parts of the Lakeview and Roseburg Districts; and BLM, Northwestern and Coastal
Oregon Record of Decision and Resource Management Plan, August 2016, covering BLM’s Coos Bay, Eugene,
Salem, and parts of the Roseburg Districts. The plans and associated documents are available at https://www.blm.gov/
programs/planning-and-nepa/near-you/oregon-washington/rmps-westernoregon. These plans updated the management
direction for these areas previously provided by the Northwest Forest Plan (NWFP). The NWFP is a compilation of
federal policies adopted by the Clinton Administration in the 1990s in part as a result of litigation related to the
northern spotted owl, which became listed as a federally threatened species under the Endangered Species Act. The
NWFP covered 25 million acres of federal land, including 7 BLM districts and 19 national forests managed by the FS
in California, Oregon, and Washington. The O&C lands made up 11% of the NWFP management area by acreage.
15 The Oregon Public Lands Transfer and Protection Act of 1998, P.L. 105-321, 43 U.S.C. §2607.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

federal ownership in 1916, the counties lost some of their tax base. Congress debated the federal
government’s responsibility for compensating the counties for the loss of potential tax revenue
until the 1937 O&C Act created a revenue-sharing system dependent on timber sales. The debate
was reignited in the late 1990s, when timber revenues declined. Congress then established
alternative payment programs based on historical revenue-sharing payments rather than on
current revenue generation.
Early Debates over the Payment System
The 1916 Chamberlain-Ferris Act (CFA) appropriated funds for payments to be made to the
counties for the railroad’s unpaid 1913, 1914, and 1915 taxes; these are known as tax equivalency
payments.16 The CFA required that the U.S. Treasury be reimbursed for those payments from
revenue generated by the sale of timber from the O&C lands. However, the CFA first allocated
receipts to the Treasury for reimbursement of expenses, which included compensating the O&C
Railroad Company for the lands revested to the federal government.17 Congress (and DOI)
anticipated the O&C lands would generate enough revenue from timber sales that there would be
funds available after the federal government was fully reimbursed for the acquisition cost and the
tax equivalency payments. Therefore, after reimbursing the federal government, the CFA
allocated the remaining receipts to the state for schools (25%); to the counties for schools, roads,
and port districts (25%); to the Reclamation Fund (40%); and to the Treasury (10%).18
Initial revenues from O&C timber sales were insufficient to make any payments except to the
Treasury for reimbursement of the acquisition cost to the railroad.19 By 1926, there had not been
enough revenue generated to make any payments to the state or counties, and the federal
government still had not been reimbursed for the entirety of the 1913-1916 tax equivalency
payments. Congress again authorized tax equivalency payments to the counties—for the period of
1916-1926—in the 1926 Stanfield Act.20 The Stanfield Act also changed the priority for receipts
to first pay the counties an annual tax equivalency payment going forward and as a second
priority to reimburse the federal government any remaining balance for past tax equivalency
payments. After those payments, any additional revenue was to be distributed along the same
formula established in the CFA, creating both a tax equivalency payment and a revenue-sharing
payment for the counties. However, timber sale revenue continued to be insufficient to pay the
entire calculated tax burden. By 1936, tax equivalency payments to the counties had been made
only through 1933 and the U.S. Treasury was still owed approximately $8.4 million for those
payments, before disbursal to the state and other federal government accounts under the
formula.21

16 Blumm & Wigington, 2013.
17 The CFA directed that the railroad be paid the difference between the revenue the railroad had already generated
from the grant and revenue that would have been generated from selling the remaining parcels at the designated price,
which came to approximately $4 million. The O&C Lands, p. 10.
18 The Reclamation Fund is a special account within the U.S. Treasury used to fund water projects in the western
United States. For more information, see CRS In Focus IF10042, The Reclamation Fund.
19 The O&C Lands, p. 101.
20 Act of July 13, 1926, ch. 897, 44 Stat. 915.
21 The O&C Lands, pp. 102-103.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

O&C Act of 1937 Revenue Distribution
During the debates preceding the 1937 O&C Act, Congress again considered tax equivalency
payments or revenue-sharing payments for the O&C counties.22 The Oregon congressional
delegation and the Association of O&C Counties (AOCC) supported tax equivalency payments,
whereas DOI supported a revenue-sharing payment. Congress eventually settled on a revenue-
sharing system, in part to avoid the deficits generated by the CFA and Stanfield Act tax
equivalency payments.23
As enacted, the O&C Act is based on a revenue-sharing system, albeit with a different allocation
formula from the CFA. Section 2(a) of the act allocated 50% of the revenue generated from the
O&C lands from any source directly to the counties. Section 2(b) allocated 25% to the U.S.
Treasury for accrued taxes under the Stanfield Act “until such tax indebtedness as shall have
accrued prior to March 1, 1938, is extinguished.” The section then directed that, after such
accrued taxes have been paid, 25% of the receipts “shall be paid annually [to the counties].”
Section 2(c) allocated the remaining 25% for the administration of the act.24
The final payment for historic accrued taxes on the lands was made in 1951, and in 1952 the
O&C counties received 75% of the receipts.25 However, beginning in 1953, language in annual
Interior and Related Agencies appropriations bills, which provide funding for the BLM, directed
one-third of the counties’ share (25% of total receipts) as “plow-back” money to the federal
government to be used for the management of the O&C lands, including road maintenance and
reforestation.26 In 1981, Congress began making a direct appropriation for O&C land
management activities. From 1982 until the enactment of the alternative payment programs
discussed below, 50% of the O&C receipts were paid to the counties, and 50% to the federal
government.
As required by the O&C Act, the payments are allocated based on each county’s proportion of the
1915 assessed value of the O&C lands.27 The counties may use the payment for any purpose.
CBWR Payments
A portion of the revenue generated from the CBWR lands must be paid to the two counties
containing the CBWR lands. The counties may use the payments for schools, roads, bridges, and
highways. The payments are based on tax equivalency as determined by applying the “same rates
of taxation as are applied to privately owned property of similar character in such counties.”28 The
payments are made from an account that is funded through deposits of 75% of the annual gross
receipts from the CBWR lands. Any portion remaining in the account after a 10-year period is to
be transferred to the General Fund of the Treasury.

22 The O&C Lands, pp. 16-17.
23 The O&C Lands, p. 102.
24 Similar allocations were also made for the CBWR lands, although the CBWR payments of 75% to the counties were
limited to tax equivalency, which constrained the payments when timber harvest levels and prices were high, from the
1960s through the 1980s. The CBWR lands have been included with the O&C lands for alternative payment systems.
25 The O&C Lands, pp. 103-104.
26 BLM, Budget Justification and Annual Performance Plan FY2001, pp. IX-12.
27 The O&C Lands, p. 107. The valuation figure was adjusted in 1954, 1955, and 1964 to account for the addition of the
controverted lands and various inadvertent measurement errors.
28 43 U.S.C. §§2621 et seq.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

Safety Net Payments
Congress again became interested in the federal payments to the O&C counties in the 1990s.
Timber harvests from the O&C lands (and from other federal lands) declined sharply after 1988.
Subsequently, payments to the O&C counties also declined.29 While some argue that the declining
harvest levels (and revenue generation) were due to successful litigation to protect the northern
spotted owl and other resource protection values in the Pacific Northwest, others argue that the
declining harvest levels are mostly due to other forest management, economic, and industry
factors.
Congress debated alternative compensation schemes, and enacted the Safety Net payment scheme
in the 1993 Omnibus Budget Reconciliation Act.30 This program—also called owl payments—
provided for payments to be made to the counties from FY1994 through FY2003. The payment
formula was based on previous revenue-sharing payments: for FY1994, the payment was set at
85% of the average FY1986-FY1990 revenue-sharing payments. The percentage was set to
decline by three points annually through FY2003, though the owl payments were only made
through FY2000. The owl payments were for the O&C lands, plus other BLM and national forest
system lands (managed by FS) in Oregon, California, and Washington.
Secure Rural Schools and Community Self-Determination Act
of 2000
Congress supplanted the owl payments with the broader Secure Rural Schools and Community
Self-Determination Act of 2000 (SRS).31 SRS payments are available to the counties containing
the O&C lands and national forests managed by the FS. Similar to the owl payments, SRS
payments are determined by a formula based on historic revenue-sharing payments. The SRS
formula has been amended several times and now includes adjustments for area of eligible federal
lands and county incomes.
SRS was originally intended to be a temporary program of six years, but the payments have been
reauthorized for every year—except FY2016—through FY2023. For the first few years of the
program, the O&C counties received an average SRS payment of $100.2 million annually
(FY2001-FY2010). After the payment formula was adjusted starting with the FY2011 payment,
the O&C counties received a much smaller payment ($31.1 million annually on average from
FY2011 through FY2021, excluding FY2016).32 SRS payments were not authorized in FY2016,
and the O&C counties received a revenue-sharing payment of $20.5 million for that year.
The SRS payments are set to expire after the FY2023 payment, unless Congress acts to extend,
modify, or replace SRS. If SRS payments expire, the O&C counties would automatically return to
receiving revenue-sharing payments.

29 CRS is unable to locate a comprehensive, authoritative source for historical data on O&C timber production and
county payments.
30 P.L. 103-66 §13982-13983, 107 Stat. 681.
31 P.L. 106-393, 16 U.S.C. §§7101-7153. For more information, see CRS Report R41303, The Secure Rural Schools
and Community Self-Determination Act: Background and Issues.
32 This figure only includes the SRS Title I and Title III payments that are made to the counties; the SRS Title II
payment is retained by the agency. For updates on the SRS program and BLM’s payments to the O&C counties, see
CRS Report R41303, The Secure Rural Schools and Community Self-Determination Act: Background and Issues.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

Payments in Lieu of Taxes (PILT)
The Department of the Interior’s PILT program provides compensation to local governments for certain tax-
exempt federal lands located within their jurisdiction, including the O&C and CBWR lands (31 U.S.C. §§6901-
6907). PILT payments are determined based on a multipart formula according to several factors, one of which
includes an offset for payments received by the counties for other specified federal land payment programs.
Payments made under the Secure Rural Schools and Community Self-Determination (SRS) Act are one of the
specified programs that offset in a county’s PILT formula calculation, but only for the payments made to counties
containing national forests managed by the Forest Service. SRS payments made to counties based on the O&C
lands, in contrast, are not offset in the PILT formula. For more information, see CRS Report R46260, The Payments
in Lieu of Taxes (PILT) Program: An Overview.
Issues for Congress
Legislative issues surrounding O&C management include who should manage the lands, how the
lands and resources should be managed, how to calculate and define sustained timber yield and
allowable timber sale quantity, and whether and how to address county compensation.
Legislative issues surrounding the extension of SRS and similar county payment programs
include the basis for compensation, the source of funds, interaction with other compensation
programs, and the duration of the program. In addition, any new mandatory spending in excess of
the baseline that would increase the national deficit may require budgetary offsets.
If Congress considers reverting to a receipt-sharing payment system, several concerns have been
raised. The primary concern for the O&C counties has been the decline in receipts due to the
decline in timber sales since the late 1980s. However, returning to 1989 harvest levels is not
feasible under the O&C lands’ management plan, especially given the economic realities of the
current timber market. Another concern has been the annual fluctuation in the payments, which
some argue harms the O&C counties by creating uncertainty and interfering with their fiscal
planning. Conversely, some may have general concerns about the federal government sharing
revenue or otherwise compensating local governments for the presence of federal land.
Congress has considered a variety of other legislative proposals to address the O&C lands. For
example, bills have been introduced that would have transferred ownership of the O&C lands to
private ownership or transferred management to a nonfederal entity.33 A bill from the 113th
Congress would have retained management authority within the BLM, but would have designated
management prescriptions for certain areas and required timber harvests and other specified
management activities at regular intervals.34 More recently, the 117th Congress considered
legislation that would have changed the management and planning requirements for O&C lands.35

33 For example, see H.R. 3769 in the 104th Congress and H.R. 1526 in the 113th Congress. For more information, see
Blumm and Lovvorn, 1997.
34 S. 1784 from the 113th Congress.
35 H.R. 4614 from the 117th Congress.
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The Oregon and California Railroad Lands (O&C Lands): In Brief

Author Information

Katie Hoover

Specialist in Natural Resources Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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