19 



competitive. There is another proposal before us which essentially 

 shifts the burden to the Secretary of the Interior to prove that the 

 concessioner is offering competitive pricing which really means un- 

 less you are going to face a whole lot of litigation that the conces- 

 sioners can charge any price they please. 



And, finally, there is in other legislation, but not in Mrs. Meyers', 

 the proposal that any future Secretary of the Interior can grant, if 

 they want to, perpetual contracts. There isn't any 20-year limita- 

 tion or 10-year limitation or 10-year preference with a 20-years-if- 

 you-have-to-get-to-it provision. 



And that sounds like the Holy Roman Empire to me rather than 

 to a free, competitive system. Not since the Princes of Tern and 

 Toxas got perpetuity from the Hapsburgs have concessioners had 

 such a good deal, and we don't think it is right. Mr. Chairman, I 

 think I have concluded your patience and my testimony. Thank 

 you, sir. 



Mr. Hansen. Thank you. I always enjoy your testimony. Mr. 

 Unger, you are represented for five minutes. 



STATEMENT OF DAVID UNGER, ASSOCIATE CIHEF, FOREST 



SERVICE 



Mr. Unger. Thank you, Mr. Chairman. We would like to com- 

 ment for the Department of Agriculture on two of these pieces of 

 legislation, H.R. 1527 and H.R. 2028. Let me begin with the ski 

 area fee bill, H.R. 1527. The Department would prefer to imple- 

 ment an acceptable ski fee system administratively, but if the com- 

 mittee decides to move forward with this legislation, we would 

 strongly recommend that it be amended. 



As has been said already, the system that we have had in place 

 since 1972 is the Graduated Rate Fee System, or GRFS as we call 

 it, based and calculated on sales with some credit for the cost of 

 capital improvements. Under GRFS, 140 ski areas paid $19 million 

 on sales of $939 million, about a two percent fee on those sales. 



We find GRFS too cumbersome and expensive to administer, and, 

 more important, in view of the 1986 ski permit law, we can't clear- 

 ly demonstrate that it meets the requirement of being based on fair 

 market value. 



So about two weeks ago on the 13th of July, we published a pro- 

 posal to replace GRFS with a system based on appraisals of the 

 land used for ski areas. We think this will better enable us to meet 

 the fair market value criterion. It reduces burdensome audits. It 

 should be simpler, cheaper, and easier to administer for us and 

 easier for the permittees as well. 



But we hasten to point out it hasn't been tested, and all parties 

 may not agree that appraisals would represent fair market value, 

 and we are looking forward to comments on this proposal which 

 will be received through the 11th of September, 



Now, a legislated system such as H.R. 1527 would have some ad- 

 vantages. It would be a straightforward formula. It would be ap- 

 plied to existing financial data and would be probably cheaper and 

 less burdensome than even the proposal that we have out for public 

 comment. But there are some problems. There would be no assur- 

 ance that fair market value with this system is indeed achieved 



