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GRFS, this formula suffers from the same inadequacy as GRFS in 

 that there is no assurance that "fair market value" is being 

 collected. In effect, this approach may provide an unwarranted 

 subsidy to the ski area permittees, or result in overcharges on a 

 case-by- case basis. Additionally, by replacing an 

 administratively determined process with a legislated one, the 

 Forest Service loses the flexibility to modify the fee system to 

 meet changing conditions. 



The formula in H.R. 1527 is based on a determination of adjusted 

 gross revenue (AGR) for each permitted ski area. AGR includes the 

 value of gross revenues for ancillary facilities located on NFS 

 lands. As these revenues constitute not more than 10 percent of 

 the AGR, we recommend they not be used in the fee calculation. 

 This would significantly reduce the paperwork burden of both the 

 ski area and the Government . To compensate for the loss of 

 revenue, thereby avoiding PAYGO problems, the brackets in section 

 4(b) (3) could be adjusted. 



In addition to changing the formula, we would recommend the 

 following other changes to H.R. 1527: 



First, we question the need for a transitional step in 

 implementation of the new system. It would collect about the same 

 level of fees -as -GRFS and, because these fees constitute only 

 about 2 percent of the applicable sales for the ski areas, changes 



