nues now exceed $2 billion, and fees are approaching $50 million. 

 The return to the government remains at about 2.4 percent. 



I would like now to discuss the four bills currently before the 

 subcommittee. While the bills differ, each proposes significant re- 

 form in Federal concessions policy. As I said, our work has shown 

 the need for one law to estabHsh common concessions policies so 

 that similar concessions operations are managed consistently 

 throughout Federal recreation lands. 



One policy difference among agencies is possessory interest. H.R. 

 2028 would encourage the private sector to build and maintain con- 

 cessions facilities but would not grant possessory interests for these 

 facilities. Under H.R. 773 and H.R. 721, the Park Service would 

 generally extinguish possessory interest. As existing contracts ex- 

 pired, the new contracts would depreciate the value of possessory 

 interests over an extended period of time. Once fully depreciated, 

 the structures would be owned by the government. 



Removing possessory interests as proposed in H.R. 773 and H.R. 

 721 would provide the Park Service with greater control over the 

 facilities and allow greater flexibility in managing concessioners. 

 However, acquiring these facilities could be costly. 



If the Park Service acquired a concessions facility during the 

 term of the contract, the fees it received would likely be lower be- 

 cause the concessioner would probably not give up its ownership in- 

 terest in a park facility without some form of compensation in re- 

 turn. In addition, once the Park Service owns the facilities, it will 

 be responsible for maintaining them which could increase its 

 multibillion dollar backlog of deferred maintenance. 



In our opinion, any effort to reform concessions policy should in- 

 clude greater competition in the awarding of concessions contracts. 

 Competition could improve both the return to the government and 

 the quality of visitor services. The bills promote more competition 

 but treat preferential right of renewal differently. 



H.R, 2028 proposes that no concessioner have a guaranteed pref- 

 erential right of renewal. However, a concessioner could acquire a 

 limited preference on the basis of its past performance. H.R. 773 

 and H.R, 721 guarantee a preferential right of renewal for conces- 

 sioners generating less than $500,000 annually, which constitute 

 about three-quarters of all park concessioners. 



While removing preference for the largest concessioners is a good 

 start toward creating a competitive environment, we continue to 

 believe that a preferential right should not be guaranteed for any 

 park concessioner. H.R. 2028, H.R. 773, and H.R. 721 each propose 

 expanding competition in awarding concessions contracts. This 

 competition will likely result in a better return to the government. 



These bills also propose that the fees collected from the conces- 

 sioners would be available for use by the collecting agency. Return- 

 ing fees to the local level would, if properly managed, help to bring 

 about needed improvements. However, the benefit would only be 

 realized if the funds were used to supplement and not supplant ex- 

 isting funding. 



Finally, the fee system proposed in H.R. 1527 would be simpler 

 to administer than the existing system benefiting both the Forest 

 Service and individual ski areas. However, the proposed fee system 

 has the same rates as those the ski industry proposed in 1993. As 



