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Act of 1944 recognized the recreational potential of these waters 

 and authorized the Secretary of the Army to construct, operate, 

 and maintain public park and recreation facilities either by itself 

 or through State and local governments or private entities. 



The Corps provides land through leases. The cost of developing 

 facilities and services are borne by the lessee. These facilities do 

 not belong to the United States Government, and title is retained 

 by the lessee who operates and maintains the premises. The lessee 

 assumes the normal business risks as well as those associated with 

 water level fluctuations from project operations. These risks are 

 unique to a water resource project. 



The bill repeals or supersedes the Federal Land Management 

 Agency's current authorizations for commercial concessions and re- 

 places them with one Federal authority. We are concerned that lan- 

 guage in the bill could be interpreted as eliminating significant 

 Corps authorities. This would leave us with limited authority to 

 construct, operate, and maintain recreation facilities and no au- 

 thority to allow State and local governments to provide parks and 

 to perform management activities. The current cost-sharing policy 

 for flood control and other purposes would be eliminated, and the 

 Corps's authority to acquire and develop land for recreation pur- 

 poses would be drastically reduced. 



Assuming that H.R. 2028 is intended to supersede only conces- 

 sion authority, we believe that the various and differing missions 

 of the affected agencies make it undesirable to require application 

 of one authority. Our major concerns with the bill are the imple- 

 mentation of fee calculation, use of an agreement rather than a 

 lease, forum for disputes, and the renewal process. 



Since the bill states that concession programs will be fully con- 

 sistent with each agency's missions and laws, we see no need for 

 a single set of regulations. Each agency could incorporate a new 

 policy into a regulation tailored to its specific mission. In our view, 

 the attempt to standardize all concessions under one regulation 

 would take away the discretion to resolve conflicts with missions. 



The bill assumes that the competitive process for determining 

 the fee charged will alone ensure a fair return to the Federal Gov- 

 ernment and reasonable economic viability for the concessioner. 

 Our experience has indicated otherwise. 



From 1945 to 1958, our rental rates were competitive. Many bids 

 were based on best year projections and were overly optimistic. 

 When flood, drought, or other unforeseen events occurred, lessees 

 could not meet their payments. Ultimately, special legislation was 

 required to allow modifications in rent to prevent disruption of the 

 service. 



We developed a system based on a combination of investment 

 and gross receipts called the graduated rental system. We have re- 

 cently changed that approach and now base rents solely on a sched- 

 ule percentage of gross receipts. 



H.R. 2028 also provides authority for concession service agree- 

 ments and concession licenses. The Secretary of the Army is cur- 

 rently authorized to issue leases for commercial concessions. Al- 

 though on the surface this does not appear to be anything more 

 than semantics, there is a real difference in the area of land law. 



