History of Grazing Fees

When the grazing fee was first instituted on the forest reserves it was often referred to as a property tax. Permits quantified a certain number of AUMs, (animal-unit-months or the amount of feed required for one cow for one month,) as descriptive of a grazer's pre-existing rights of use. The grazing "tax" was based on the value of that level of use in AUMs as property. The term "tax" was used almost universally in newspaper reports in the west from 1905 for a decade or more. (The notion of grazing taxes is discussed at length in McCarthy Hour of Trial: The Conservation Conflict in Colorado and the West, 1891-1907 pp. 161-164.)

"Special use permits" for grazing had originally been issued in recognition of rancher's pre-existing possessory property interest. A "permit," as generically understood, presumes that the activity may be prohibited all together under such as the legitimate "police powers" of government. The "permit" normally prescribes the conditions of use to avoid or minimize harm to public peace, health or safety. As such, it is considered a conditional "privilege." Insofar as the "permit" prescribed rules and regulations for use of the range, it was characteristic of a conditional permit. Insofar as the right to obtain a "permit" was based on an underlying pre-existing possessory right of use, under equity, it was exclusive of "all the world," but the "sovereign."

In 1916, to counter assertion of ranchers that they "owned" their grazing permits, the Forest Service began to refer to grazing permits as only a "privilege" obtained from the Secretary of Agriculture. (See Annual Grazing Report, 1916, Rio Grande National Forest, Sec. 63, Region 2, Dr. 35, RG 95, National Archives.) As a further attempt to discourage recognition of rancher's claims of pre-existing rights, the Forest Service established a permit waiver system, whereby the permit reverted back to the Forest Service upon sale or transfer of the ranch. Although this divested any acquired property rights in the actual permit, it could not remove transferable pre-existing property rights and priority rights of tenure.

The Forest Service then reissued the permit to the new owner as a privilege granted by the federal government, asserting the power to renegotiate the current value of the underlying right by reduction of AUMs or other terms.

Stockmen continued to buy, sell, trade, inherit and mortgage "public" range rights as part and parcel of the ranch unit. Banks and lending institutions continued to view range rights as real property and collateralized those range rights for loan purposes. Private investment in range improvements by the ranchers in fencing, water facilities, livestock handling facilities, roads etc. increased the rancher's private property rights claims.

In Scufflebarger v. Commissioner of Internal Revenue (24 TC 980-1955) the court upheld the Internal Revenue Service's consideration of grazing rights as part of a stockman's estate for tax purposes. The IRS taxes the value of grazing rights on federal lands as part of the rancher's real property. For tax, ranch sale and collateral definition for bank financing purposes, the value of the grazing rights are capitalized into the value of the ranch unit. Typical grant bargains and sale deeds sell "certain real and personal property, water rights and privileges, grazing leases, rights and privileges..."

A letter from Attorney Richard P Chamberlain, Internal Revenue Service, to R.B. Tippeconnic, Forest Supervisor, Coronado National Forest, Tucson, Ariz., dated Aug 25, 1988, IRS correspondence code no. 1235-4208PX, now located in the files of the Coronado National Forest states:

"We are aware of the Forest Service policy that National Forest Service grazing permits have no value. However, the Federal tax statutes require us to value the assets of a decedent or donor based on their 'fair market value.' Even though you do not place value on leases, the ranchers do whenever they buy or sell a ranch. Every ranch with substantial leases sells on an animal unit basis considering the grazing leases, and every reputable fee appraiser places a value on them despite your regulations.

"For the Internal Revenue Service to value the leases does place government agencies in an inconsistent position. But the greatest inconsistency is for the taxpayers to rely upon your regulations to claim the grazing rights have no value for tax purposes, and then to universally place a value on them when they sell or mortgage their ranches.

"It would appear that the market place is the best indication of whether or not there is a market value for the leases. As long as the market place says there is a value, a fair evaluation of a ranch cannot be made without considering the price a willing buyer would pay for the grazing leases."

"The Organic Act" of 1897 (30 Stat. 34-36; codified U.S.C. vol. 16, sec. 551), amendment to the Sundry Civil Appropriations Act, stated that the purpose of the forest reserves was for "watershed protection and timber production." Lands primarily valuable for mineral ores and agriculture were to be excluded from forest reserves. The Act states:

"...but it is not the purpose or intent of these provisions of the Act Providing for Such Reservations to authorize the inclusion therein, of lands more valuable for the mineral contained therein and for agricultural purposes, than for Forest Reserve purposes..."

Settlers were allowed to cut firewood, fencing and building material, and mining and prospecting were specifically authorized within their boundaries, but grazing was not mentioned.

Statutes at Large, vol. 30, p. 36; U.S.C. vol. 16, sec. 478 provided that nothing in the act would "prohibit any person from entering upon such national forests for all proper and lawful purpose, including that of prospecting, locating and developing the mineral resource thereof.... such persons must comply with the rules and regulations covering such national forests." The section also provided that the Secretary of the Interior to "make such rules and regulations...as will insure the objects of such reservations, namely, to regulate their occupancy and use and to preserve the forests thereon from destruction."

Less than one month after passage, the General Land Office promulgated regulations that allowed grazing in reserves.

In 1896, restrictive Forest Rules regarding sheep grazing were challenged in United States v. Tygh Valley Co., 76 F. 693. The Forest Rules were upheld on the basis that closely herded sheep were damaging the resources; (see also Dastervignes v. United States, 122 F. 30; 1903; and Dent v. United States, 76 P. 455, reversing 71 P. 920; 1904.) According to Colorado Judge Ethelbert Ward, The Legal Aspect of the Grazing Problem, these were essentially civil cases by injunction to prevent damage to property "and would apply as well to the individual as to the United States. They are founded on the law of the land, and do not depend on rules and regulations." (Forest Service Law Office Correspondence RG 49, Drawer 16, National Archives.)

The grazing system devised by the Bureau of Forestry in 1902 issued the first grazing permits for sheep. A circular issued by the department of Interior on January 8, stated livestock on the forest reserve would receive preference in the following order: 1) Stock of residents within the reserve; 2) Stock of persons who own permanent stock ranches within the reserve, but who reside outside of the reserve; 3) Stock of persons living in the immediate vicinity of the reserve, called neighboring stock and 4) stock of outsiders who have some equitable claim.."

"In 1891, the "Creative Act," "Forest Reserve Act" or General Land Law Revision Act (26 Stat. 1103) was passed. The original Act contained no provision whatsoever for forest reserves. It repealed several Acts, including the Timber Culture Act of 1873 and all pre-emption laws. [The Timber Culture Act granted a homesteader a patent to 160 acres of land in the Great Plains if he agreed to plant 1/4 of land in trees. This was later changed to eliminate tree planting provision.]

Section 24, the one that authorized the President to set aside forest reserves, was added as a last minute rider to "An act to repeal timber culture laws, and for other purposes" by a House-Senate conference committee. The rider was never referred back to its originating committees, (House and Senate Public Lands Committees,) which is, technically, an illegal procedure.

Sec. 24: "That the President of the United States may, from time to time, set apart and reserve, in any State or Territory having public land bearing forests, in any part of the public lands wholly or in part covered with timber or undergrowth, whether of commercial value or not, as public reservations; and the President shall, by public proclamation, declare the establishment of such reservations and the limits thereof."

The authorizing clause gave the President the power to proclaim, but lacked any provision for appropriating funds or for the management of any forest reserves. In practice, this meant the reserves were absolutely closed to use.

In 1894, the Department of Agriculture prohibited the "driving, feeding, grazing, pasturing or herding of cattle, sheep and livestock" as its first administrative policy on the forest reserves. (Frederick Coville, "Forest Growth and Sheep Grazing in the Cascade Mountains of Oregon, U.S. Department of Agriculture, Division of Forestry Bulletin no. 15, p.10.)

The "legal effect" of reservation was later determined to be a withdrawal of the land from the "public domain," rendering use a mere privilege in contravention of any claim to public common grazing right or established local "possessory rights."

Later challenges in 1911 questioned the Forest Service's right to impose grazing permits and fees on the use of range in the public domain on the basis of the "implied license" affirmed in Buford v. Houtz . The Court ruled in Light v. U.S. (220 U.S. 523, 55 L. Ed. 570. 32 Sup. Ct. Rep. 485) and U.S. v. Grimaud (220 U.S. 506, 31 S. Ct. 480, 55 L.Ed. 563) that the Forest Reserves had been withdrawn from the public domain and that the "implied license" of Buford v. Houtz had been "curtailed and qualified" by Congress, to the extent that the privilege of grazing should not be exercised in contravention of the rules and regulations of the permit system. (Grimaud was a transient shepherd, utilizing the land as open "grazing commons" in public domain. At the time of the Grimaud case there were extensive valid permits to graze in the Sierra Forest Reserve with which his use would have conflicted. Under Forest Service "Use Book" rules for granting grazing permits, transient herders, such as Grimaud, who could make no claim to local property ownership, were given Class C, or last priority is granting of permits.)

Before expiration of his term, President Benjamin Harrison had reserved almost 13.5 million acres of Western Land.

According to Elwood Mead in Irrigation Institutions, pp.28-29 (1903):

"There was no law by which men could legally secure control of the land they occupied. All the land laws dealt with farming land. There was no provision for leasing or settling the grazing land in tracts large enough to be of any service. Hence the range stockmen simply took possession of the country. Each man chose a location which suited him, fixed in a rough way the boundaries of his domain, and helped create a public settlement which made it unpleasant, if not dangerous, for a late comer to attempt to share with him the territory he had so marked out. In this way range rights came to have the force of law."

A land use pattern that consequentially developed in much of the West was to settle on the 160 acres allowed through the disposal acts and use unappropriated public domain to graze cattle (e.g. "base" and "rangeland"). To anchor control of the land, cattlemen claimed appropriative rights to the use of water sources, maintained by beneficial use through stockwatering, thus preventing competing grazing use of land within stock walking distance. (See separate section on California Water Law.)

H. M. Taylor, head of the Bureau of Animal Husbandry, in an 1886 report entitled Importance of the Range Cattle Industry, pg. 316, stated:

"It will be seen that the ownership of the watering places gives tenure to contiguous range. The fact is recognized by the Western Cattlemen, and the question as to the number of cattle individual owners are permitted to hold, under regulations of the various local associations, it is determined by the question of water frontage."

This developed into the ranch's "customary range," recognized through mutual stockmen's associations. According to William D. Rowley in U.S. Forest Service Grazing and Rangelands: A History, p.19 (1985):

"These grazers who had arrived earlier attempted to establish prescriptive rights to the range by their customary occupancy and acceptance of those rights among themselves, their stock organizations, and roundup committees. Some western writers have compared these range rules to the customs of the mining districts in their attempt to regulate and distribute access to ore in rich stream beds or quartz lodes. As with mining-district rules, western legislatures sometimes reinforced the regulations of stock organizations by authorizing inspections of cattle shipments for legitimate brands and passing water laws that gave rights to the first users. It was in the area of water rights that early arrivals established their most effective power. Whoever controlled the water sources often controlled great areas of land."

In The Day of the Cattleman, p.185 (1929,)author Ernest Staples writes:

"The presence of others along a stream, too long to permit individual control, meant that exclusion of outsiders must come through some sort of an understanding among those already on the ground. Cooperation among neighbors in the conduct of their business resulted in the growth of a certain amount of range privilege and good will. Participation in the roundup, in the use of common corrals, in the group protection against Indians, thieves and predatory animals and, in some cases, in the group drive of the beef turnoff to the railroad could be permitted or denied to the newcomer. To deny such privileges, often appeared to be the only way of preventing overcrowding of a range already taxed to its full carrying capacity. The success of such a method would, of course, depend upon the size of the outfit so denied and upon the amount of cooperation among older stock growers."

Article I of the Constitution of the State of California still recognizes as among inalienable rights, the rights of "acquiring, possessing and protecting property."

State law determines the rules of "property." "Western" State (west of the Mississippi) common law and natural equity provided that an individual could establish a right of possession to otherwise unappropriated resources under "color of title" good against rival individual claimants through first discovery, location or occupancy and continued use - or "first in time, first in right." This right of possession was given recognition by the State Courts as a property right in regard to disputes of individual use-rights in the land and resources of the public domain.

As stated by Justice Brewer in Union Pac. Pac. R. Co. v. Harris, 215 U.S. 386 (1910):

"...While the power of Congress over lands which an individual is seeking to acquire under either the pre-emption or the homestead law remains until the payment of the full purchase price required by the former law or the full occupation prescribed by the latter, yet, under the general land laws of the United States, one who, having made an entry, is in actual occupation under the preemption or homestead law, cannot be dispossessed of his priority at the instance of any individual. Hastings & D. R. Co. v. Whitney, 132 U.S. 357, 363, 364 S., 33 L. ed. 363, 366, 367, 10 Sup. Ct. Rep. 112. In other words, one who has taken land under the pre-emption or homestead law acquires an equity of which he cannot be deprived by any individual under the like laws."

In other cases, the court ruled that although the possessory right of an occupant of public land, (such as in a grazing parcel,) is a valuable property right that he can legally transfer and convey to his vendee, or which may be the subject or consideration of a contract, (Neal v. Kayser, 100 P. 439, 12 Ariz. 118,); the purchaser acquires no rights as against the United States, (Gozales v. French, Ariz. 17 S.Ct. 102, 164 U.S. 338, 41 L.Ed. 458.)

Under English common law, open and notorious possession and use could create "prescriptive" property rights adverse to the ownership claims of another individual, but were ineffectual against superior ownership asserted by the sovereign/king, the federal government assumed a legal position of "true owner" as regarded State-ceded lands east of the Mississippi.

In the matter of "sovereign lands" underlying tidal and navigable streams, however, it was held under the "Equal Footing Doctrine" that the "federal government" (Congress) maintained these lands in trust, while in a territorial state, to be ceded to the newly created States. "Public lands" in these new eastern States, however, were retained by the "federal Congress" in mutual ownership after statehood for disposal by virtue of specific cession of title from the original 13 States.

Title was ceded to the nation through treaties by Spain, England and France for areas west of the Mississippi, but not to the "federal" government (Congress.) There remains considerable dispute in the West over the Constitutional capacity of the federal government to retain these lands as "federally owned" properties within the boundaries of a Western State without specific pre-statehood "reservation" for the legitimate purposes of discharging international and domestic treaty obligations, or for forts, arsenals, etc. Westerners question why these "unappropriated lands" were never passed to the sovereign people of the States for their disposal - to be held in trust as "commons" or as "wastelands" subject to appropriation. Absent a federal deed of cession as in the east, did the agency of the federal government not shift from that as trustee for the existing States to that of trustee for the sovereign people of the new States? Did the "federal" government violate its fiduciary responsibility as trustee for the future people of new States under the "Equal Footing Doctrine," by essentially appropriating these "public lands" to itself by permanently withdrawing them from disposal and asserting sole control of their use?

Throughout U.S. history of frontier settlement, the question as to whether the federal government, in the manner of the English monarchs as if sovereign, is entitled to claimed immunity from prescription has remained a gray area of the law. The priority of individual possession and use as a basis for the disposal of public land and resources has been recognized in many Acts of Congress, such as pre-emption, homestead and mining/water acts.

Under the Color of Title Act, the Secretary of the Interior may be required to issue a patent if certain conditions have been met, (43 U.S.C.A. Section 1068-1068b,) such as that a tract of public land has been held in good faith and in peaceful adverse possession under claim of color of title for more than a specified period; (Beaver v. U.S., C.A.Cal., 350 F.2d 4, certiorari denied 86 S.C. 1067, 383 U.S. 932,15 L.Ed.2d. 854; U.S. v. Wharton, C.A.Or., 514 F.2d 406; Day v. Hickel, C.A.Alaska, 481 F.2d 473.)

The question arises after Statehood, as to whether the "rights" of the United States extend beyond the necessity of discharging responsibilities under treaties and in regard to the extinguishment of "Original Indian Title."

Grazing Fees

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