40 



yet another set of preferences. Therefore, we regrettably cannot 

 support H.R. 2028 in its present form. 



I would now like to shift my testimony to a couple of the provi- 

 sions that are of concern to us; necessary and appropriate conces- 

 sions. Under existing law in the Meyers bill, concessions are only 

 to be provided in parks that are necessary and appropriate. And 

 the Secretary has the leeway to determine when a concession is 

 necessary and appropriate in a particular park. There is no such 

 provision in H.R. 2028. 



The Meyers bill further states that concessions facilities and 

 services should be consistent with the preservation and conserva- 

 tion of park resources and values. Without such provisions, Mr. 

 Chairman, we believe we invite overcommercialization of the parks 

 to their long-term detriment. 



Preferences for large incumbents: H.R. 773 establishes a competi- 

 tive selection process for large concessions located in parks and 

 eliminates rights of preference for incumbent operators. These con- 

 cessions, Mr. Chairman, many of which are now managed by multi- 

 million dollar conglomerates, are clearly able to compete in the 

 business world, and they do so every day outside the parks. We see 

 no reason why these concessioners should not also compete for 

 these contracts on a level playing field with other interested busi- 

 nesses just like they do everywhere else in America. 



H.R. 2028 would maintain rights of preference for incumbent 

 concessioners for one contract term which, as we understand the 

 bill, could extend 10 years or perhaps even indefinitely longer. It 

 would then replace the right of preference with what is called an 

 incentive system under which incumbent concessioners would re- 

 ceive a renewal incentive of 5 to 20 percent. 



We don't see any need for this, Mr. Chairman, because if these 

 concessioners are as good as they say they are, we think they al- 

 ready are going to have a leg up in the bidding process on anybody 

 who tries to outbid them. They know the parks. They have been 

 there for a long time. 



They know the Park Service. And, frankly, they should be able 

 to craft, and probably will craft, winning bids most of the time. But 

 if you give them preference over other businessmen, you are going 

 to lock legitimate businesses out of the parks. And you will hear 

 from some of these businesses today, Mr. Chairman. 



Finally, on the issue of possessory interest, we do not think it is 

 appropriate or fiscally sound to give ever-appreciating, compen- 

 sable interests in structures that concessioners build on park land. 

 The standard practice within the industry is to amortize capital in- 

 vestments on leased lands over the life of the contract, usually 10 

 to 15 years. And we have numerous examples of that attached to 

 our statement. 



So we would recommend, Mr. Chairman, that that situation of 

 compensating concessioners for their investments be structured 

 along similar lines, letting them amortize their investments over a 

 contract of sufficient length that they can get back those invest- 

 ments and make a profit over the term of the contract. That con- 

 cludes my testimony, Mr. Chairman, and I will be happy to answer 

 any questions. 



Mr. Hansen. Thank you very much. Mr. Wilson. 



