When the national forests were withdrawn from the public domain a century ago, they were established with the assurances that proceeds from the sustainable management of their natural resources would be shared with local governments. These proceeds partially refund the tax revenues lost by local governments and go toward funding rural schools, roads, and other services. Since 1990, controversies over federal forest management policies and reduced timber sales have decreased these payments dramatically, leaving many rural schools in difficult circumstances. A Senate subcommittee held hearings on proposed legislation that would establish a set amount to be paid to affected local governments and apply available receipts to meet these payments, with general treasury funds making up the difference. Only 75 percent of the payments would go to the traditional schools and roads program; 25 percent would be given to the counties for federal-land management projects developed locally. The bill aims to provide secure funding for rural schools while giving people a new incentive to work together at the local level. Testimony from U.S. Senators; county commissioners; and representatives of organizations advocating school, environmental, community, and timber industry interests discussed details of funding mechanisms, the balance between economic and ecological concerns, the composition and duties of local advisory committees, the risk of catastrophic wildfires, and issues related to community survival. (SV)