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appreciated by the ski industry, it has major problems. ... foremost 

 of which is that under GRFS the assets schedule required to be kept 

 is by definition different, and far more complex, than schedules 

 used for tax purposes. Ski areas and Forest Service auditors spend 

 inordinate amounts of time and effort attempting to determine 

 percentages of assets used for ski operations or to support other 

 activities such a summer operations on private lands owned by the 

 ski area. Although it may be hard to believe, discussions with 

 auditors on GFA can center around what percentage of an individual 

 backhoe, conference table, computer terminal, camera system or 

 other asset is used to support skiing versus other aspects of a ski 

 company's operation. Significant problems also arise reevaluating 

 assets when an area is sold. 



2. The new formula will limit the assessment of fees to 

 activities which are physically located on National Forest System 

 land. As the Chairman is well aware, the Forest Service has become 

 increasingly aggressive in attempting to capture private land 

 revenues under the GRFS definition of assessable revenue. Examples 

 range from assessments or attempted assessments of buildings on 

 private land at Telluride, Steamboat, Aspen and Monarch Pass in 

 Colorado to discussions with auditors as to whether revenues from 

 pay phones and automatic teller machines in buildings on private 

 land at Snowbird, Utah should be included in the fee. 



Our problem with private land assessment is twofold. First, 

 it is a time consuming and costly debate. More importantly, we 

 believe it is completely unfair for the Forest Service to charge 

 rent against land it does not manage, or against buildings or 

 activities which are not on National Forest land. Private land 

 buildings and operations already pay income taxes to the Federal 

 government and State and local property, meals and lodging, income 

 and other taxes. We believe it is unprecedented for a government 

 agency to charge a rental fee against private land businesses under 

 the "but for" theory that such businesses would not exist without 

 the nearby Federal lands lease. While the "but for" theory may be 

 true, its application could have no limits. 



For example, should a timber company or mineral processing 

 mill on private land pay a commission to the federal government 

 because the Federal lands supply the raw material to keep the mill 

 running? Should the numerous communities and businesses which 

 spring up around National Parks pay a fee to the Park Service? 

 Should fast food restaurants outside the gates of military bases 

 pay a commission to the Department of Defense? 



The answer to these questions is obviously "no" . 



3. The new formula will eliminate disputes over so-called 

 "gratuities". Examples of what the Forest Service may consider as 

 "gratuities" (depending on the Forest, Region, or auditor involved) 

 are passes given to employees or the public, promotional programs, 

 ski instructor or ski patrol passes, and the like. Once again, 

 discussions with the auditors on this issue can involve how many 



