To provide the counties of the Pacific Northwest a portion of the revenues lost by reduced timber harvest receipts due to timber sale volume reduction caused by new Federal land use plans, protection for northern spotted owls and other species, and protection for old growth ecosystem, and for other purposes.

Increases from 25 percent to 50 percent the amounts paid by the Secretary of Agriculture to States for their counties under Federal law with respect to national forests in Washington, Oregon, and California.

Sets forth the method by which Oregon and California land-grant funds paid by the Secretary of the Interior shall be distributed to such counties.

Provides that money received from the sale of timber from public lands shall be: (1) distributed to the county from which the timber is harvested; (2) deposited as miscellaneous receipts in the Federal treasury; and (3) deposited in a fund exclusively for reforestation, timber productivity enhancement, or other forest management activities.