20 NATIONAL FOKEST MANUAL. 



State or municipal corporation as the Secretary may designate, and 

 on the conditions specified in this paragraph ; also to give, grant, bar- 

 gain, sell, and transfer with the permit (upon such demand and upon 

 said conditions) all works, equipment, structures, and property then 

 owned or held and then valuable or serviceable in the generation, 

 transmission, or distribution of electrical or other power, and which 

 are then dependent in whole or in part for their usefulness upon the 

 continuance of the permit, together with all interest in any leaseholds 

 of operating property used in connection with the works under per- 

 mit, and all contracts for the sale and delivery of electrical or other 

 power. The Secretary may require such surrender if the United 

 States shall desire to take over the permit and properties, or whenever 

 a substantial part of such property is situated elsewhere than on 

 National Forest lands he may designate as such transferee any State 

 or municipal corporation which shall desire such transfer : Provided, 

 however, That no municipal corporation shall be so designated unless 

 by condemnation it shall have acquired, or unless by proceedings in 

 a court of competent jurisdiction it shall have been determined that 

 such municipality has the right to acquire, such property situated 

 elsewhere than on National Forest lands: And provided further. 

 That no such municipal corporation shall be so designated unless it 

 also has the power to acquire -the said property and rights of the 

 permittee in accordance with the following conditions. Such sur- 

 render or transfer shall be on condition precedent that the United 

 States or such transferee shall first pay to the permittee the reason- 

 able value of all said works, equipment, structures, and other tangible 

 property, and in addition thereto a bonus of three-fourths of 1 per 

 cent of such reasonable value for each full year of the unexpired term 

 of the permit. Such reasonable value shall not include any sum for 

 any permit, franchise, or right granted by the United States, by any 

 State, or by any municipal corporation in excess of the amount (exclu- 

 sive of any tax or annual charge) actually paid to the United States 

 or to such State or municipal corporation as the compensation for the 

 granting of such permit, franchise, or right, or any sum for any other 

 intangible properties or values whatsoever, it being the intent of this 

 paragraph that all such intangible values shall be covered by the 

 bonus herein provided for. Such reasonable value shall be deter- 

 minded by mutual agreement between the parties in interest ; and, in 

 case they can not agree, by a board of arbitration of three members, 

 one of whom shall be named by the permittee and one by the trans- 

 feree; the third shall be either the Secretary or some representative 

 whom he may name. The reasonable value, for the purposes of such 

 determination, of such works, equipment, structures, and other tangi- 

 ble property shall be the cost of reproduction of such works, equip- 

 ment, structures, and other tangible property under substantially the 

 same conditions as existed at the time of the original construction and 

 at prices for labor and material which shall be the average of such 

 prices for the five years next preceding the date of valuation, less a 

 percentage of such reproduction cost equal to the per cent of physical 

 and functional depreciation of the existing works, equipment, struc- 

 tures, and other tangible property. 



(T) ^That in respect to the regulation by any competent public 

 authority of the service to be rendered by the permittee or the price 



