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A very important byproduct of the growth of these businesses 

 which operate in rural areas surrounded by Federal lands is the 

 economic benefit and development that accompanied that growth. 

 These investments in the quality services and the economic bene- 

 fits that evolved with these businesses would not have been made 

 possible under the fee bidding proposals in H.R. 2028. 



We don't believe money would be lended to these businesses 

 under these terms, nor would concessioners be willing to reinvest 

 their profits under these terms or work 12 hours a day to build a 

 business without some realization that their performance would be 

 rewarded. 



May we suggest some elements to include in any concessions re- 

 form? The first element would be permit renewal as an incentive 

 and reward for good service and resource protection. It also encour- 

 ages the reinvestment of profit. 



We think competition for customers is also important. In every 

 instance, there is competition in the outfitting businesses. Three or 

 more companies or frequently as many as 20 companies provide the 

 same or similar services in an area. Transferability of the permit 

 to a qualified buyer with a sale of the business is also important 

 to allow return of equity. The final version of H.R. 2028 should in- 

 corporate some of these incentives in order to retain investment 

 and quality service. 



With that, I would like to touch on a couple of specific areas of 

 agreement and some additional areas where we disagree. We agree 

 with some others that I think you will hear that substantial capital 

 investments as defined in the bill is inappropriate and should not 

 be used as a criteria for the 10-year permits. We believe 10-year 

 permits should be the minimum term for a concession service 

 agreement, and longer terms should be available to concessioners 

 with substantial investments. 



We support the language that allows the market to establish 

 rates for services where competition exists. We do believe the re- 

 newal incentive contained in section 7 is inadequate, and the final 

 round fee bidding is the only criteria stipulated to be considered 

 from among the highly qualified applicants. We believe past per- 

 formance and a record of protection of the resource should out- 

 weigh any fee bid. 



The concession evaluation language in section 8 needs further 

 consideration, and we recommend a three-tiered system. We sup- 

 port a system that allows the agencies to retain the fees collected 

 as provided for in H.R. 2028. We also support the concept of dis- 

 pute resolution outlined in the bill. 



And, finally, let me say that the transition language contained in 

 the final section of the bill will call into question the loans and fi- 

 nancial obligations assumed by many concessioners under the cur- 

 rent system. I believe it could easily be corrected by recognizing in- 

 centives mentioned earlier and retaining performance-based re- 

 newal. Thank you, Mr. Chairman. We look forward to working with 

 you further. 



Mr. Hansen. Thank you, Mr. Brown. Mr. Nielsen. 



