concern is the practical effect of failing to grandfather the existing possessory interests.

The legislation as reported applies a depreciation schedule to existing possessory interests if the present contract is renewed. While nice in theory, I fear the implications in practice. Assume, for the sake of argument, an existing concessionaire who has invested in a modest facility which provides limited accommodations, meals, supplies, and fuel for visitors in a park with a limited visitor season. The possessory interest could be in the neighborhood of $5 million based on sound or market value. When the contract comes up for renewal, and let us assume that the new contract will be for twenty years with a 39 year depreciation schedule, the concessionaire is faced with a choice. If he renews, he will forfeit approximately $2.5 million over the life of the contract under this legislation. Either he makes that amount up in higher charges to the public or in radically reduced fees to the National Park Service, or he will simply leave and use the $5 million as capital for some other enterprise. I fear that the latter is the more likely scenario. Both family operations where the possessory interest represents a large portion of their estate and larger corporate operations with shareholder interests are unlikely to make a gratuitous contribution to the National Park System.

If the existing concessionaire does what is likely, who gets to pick up the tab? Under current law, it would be the new concessionaire, who would then hold the possessory interest. However, under this legislation, any new concessionaire will be faced with the prospect of paying $5 million and watching that investment dwindle to $2.5 million over the contract term. That investment will have to be recouped again either in higher charges to visitors or in lower payments to the National Park Service. A more likely result is that all parties will simply let the Federal Government buy out the existing concessionaire and then bid on a contract without any possessory interest. That accomplishes the goal of the legislation, but it does so at the expense of the overall National Park System.

The entire budget for the NPS in fiscal year 94 is just over $1 billion. Those concerned over the present level of park maintenance, or backlog in land acquisition should be concerned when 10 percent of the Park budget for the next twenty years goes to paying off possessory interests.

Proponents of this legislation have held the theory that the right of possessory interest along with the preferential right of renewal stifles competition. The preferential right of renewal is actually a right of first refusal. The existing concessioner is provided an opportunity to match a proposal submitted by another prospective concessioner.

While it appears on the surface to be non-competitive, the evidence suggests otherwise. One recent example shows that the Park Service is currently evaluating 7 bids at Bandilier National Monument for a concession operation.

The right of possessory interest and the preferential right of renewal did not deter six other firms from submitting proposals to the Service.

In addition, there will be an impact to local governments. At the point the Federal Government owns all of the possessory interest,

a tax base will be eliminated, as in the case in Yosemite where Mariposa County will lose approximately $700,000 in property taxes.

Finally, I believe there will be a budget point of order against this legislation. Section 8(b) of the bill provides for direct spending of all franchise fees collected, in lieu of those fees being deposited in the Treasury. While arguably helpful to the Parks, I fear that the funds will only be used to offset monies that would otherwise go to the Park Service accounts.

In conclusion, this version of S. 208 will do enormous harm to a system that has successfully served the park visitor for three quarters of a century. Visitors who have become accustomed to a high quality of service may someday soon ask us what happened. How surprised we'll be when people discover the decline wasn't caused by "greedy" entrepreneurs or inept bureaucrats, but by the 103rd Congress.

MALCOLM WALLOP.

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing Rules of the Senate, changes in existing law made by the bill S. 208, as ordered reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman):

THE NATIONAL PARK SERVICE CONCESSIONS POLICY ACT

(OCTOBER 9, 1965)

[AN ACT Relating to the establishment of concession policies in the areas
administered by National Park Service and for other purposes.

[Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in furtherance of the Act of August 25, 1916 (39 Stat. 535), as amended (16 U.S.C. 1), which directs the Secretary of the Interior to administer national park system areas in accordance with the fundamental purpose of conserving their scenery, wildlife, national and historic objects, and providing for their enjoyment in a manner that will leave them unimpaired for the enjoyment of future generations, the Congress hereby finds that the preservation of park values requires that such public accommodations, facilities, and services as have to be provided within those areas should be provided only under carefully controlled safeguards against unregulated and indiscriminate use, so that the heavy visitation will not unduly impair these values and so that development of such facilities can best be limited to locations where the least damage to park values will be caused. It is the policy of the Congress that such development shall be limited to those that are necessary and appropriate for public use and enjoyment of the national park area in which they are located and that are consistent to the highest practicable degree with the preservation and conservation of the areas.

[SEC. 2. Subject to the findings and policy stated in section 1 of this Act, the Secretary of the Interior shall take such action as may be appropriate to encourage and enable private persons and corporations (hereinafter referred to as "concessioners") to provide and operate facilities and services which he deems desirable for the accommodation of visitors in areas administered by the National Park Service.

[SEC. 3. (a) Without limitation of the foregoing, the Secretary may include in contracts for the providing of facilities and services such terms and conditions as, in his judgment, are required to assure the concessioner of adequate protection against loss of investment in structures, fixtures, improvements, equipment, supplies, and other tangible property provided by him for the purposes of the contract (but not against loss of anticipated profits) resulting from

discretionary acts, policies, or decisions of the Secretary occurring after the contract has become effective under which acts, policies, or decisions the concessioner's authority to conduct some or all of his authorized operations under the contract ceases or his structures, fixtures, and improvements, or any of them are required to be transferred to another party or to be abandoned, removed, or demolished. Such terms and conditions may include an obligation of the United States to compensate the concessioner for loss of investment, as aforesaid.

[(b) The Secretary shall exercise his authority in a manner consistent with a reasonable opportunity for the concessioner to realize a profit on his operation as a whole commensurate with the capital invested and the obligations assumed.

[(c) The reasonableness of a concessioner's rates and charges to the public shall, unless otherwise provided in the contract, be judged primarily by comparison with those current for facilities and services of comparable character under similar conditions, with due consideration for length of season, provision for peakloads, average percentage of occupancy, accessibility, availability and costs of labor and materials, type of patronage, and other factors deemed significant by the Secretary.

[(d) Franchise fees, however stated, shall be determined upon consideration of the probable value to the concessioner of the privileges granted by the particular contract or permit involved. Such value is the opportunity for net profit in relation to both gross receipts and capital invested. Consideration of revenue to the United States shall be subordinate to the objectives of protecting and preserving the areas and of providing adequate and appropriate services for visitors at reasonable rates. Appropriate provisions shall be made for reconsideration of franchise fees at least every five years unless the contract is for a lesser period of time.

[SEC. 4. The Secretary may authorize the operation of all accommodations, facilities, and services for visitors, or of all such accommodations, facilities, and services of generally similar character, in each area, or portion thereof, administered by the National Park Service by one responsible concessioner and may grant to such concessioner a preferential right to provide such new or additional accommodations, facilities, or services as the Secretary may consider necessary or desirable for the accommodation and convenience of the public. The Secretary may, in his discretion, grant extensions, renewals, or new contracts to present concessioners, other than the concessioner holding a preferential right, for operations substantially similar in character and extent to those authorized by their current contracts or permits.

[SEC. 5. The Secretary shall encourage continuity of operation and facilities and services by giving preference in the renewal of contracts or permits and in the negotiation of new contracts or permits to the concessioners who have performed their obligations under prior contracts or permits to the satisfaction of the Secretary. To this end, the Secretary, at any time in his discretion, may extend or renew a contract or permit, or may grant a new contract or permit to the same concessioner upon the termination or surrender before expiration of a prior contract or permit. Before doing so, however, and before granting extensions, renewals or new

contracts pursuant to the last sentence of section 4 of this Act, the Secretary shall give reasonable public notice of his intention so to do and shall consider and evaluate all proposals received as a result thereof.

[SEC. 6. A concessioner who has heretofore acquired or constructed or who hereafter acquires or constructs, pursuant to a contract and with the approval of the Secretary, any structure, fixture, or improvement upon land owned by the United States within an area administered by the National Park Service shall have a possessory interest therein, which shall consist of all incidents of ownership except legal title, and except as hereinafter provided, which title shall be vested in the United States. Such possessory interest shall not be construed to include or imply any authority, privilege, or right to operate or engage in any business or other activity, and the use or enjoyment of any structure, fixture, or improvement in which the concessioner has a possessory interest shall be wholly subject to the applicable provisions of the contract and of laws and regulations relating to the area. The said possessory interest shall not be extinguished by the expiration or other termination of the contract and may not be taken for public use without just compensation. The said possessory interest may be assigned, transferred, encumbered, or relinquished. Unless otherwise provided by agreement of the parties, just compensation shall be an amount equal to the sound value of such structure, fixture, or improvement at the time of taking by the United States determined upon the basis of reconstruction cost less depreciation evidenced by its condition and prospective serviceability in comparison with a new unit of like kind, but not to exceed fair market value. The provisions of this section shall not apply to concessioners whose current contracts do not include recognition of a possessory interest, unless in a particular case the Secretary determines that equitable considerations warrant recognition of such interest.

[SEC. 7. The provisions of section 321 of the Act of June 30, 1932 (47 Stat. 412; 40 U.S.C. 303(b)), relating to the leasing of buildings and properties of the United States, shall not apply to privileges, leases, permits, and contracts granted by the Secretary of the Interior for the use of lands and improvements thereon, in areas administered by the National Park Service, for the purpose of providing accommodations, facilities, and services for visitors thereto, pursuant to the Act of August 25, 1916 (39 Stat. 535), as amended, or the Act of August 21, 1935, chapter 593 (49 Stat. 666; 16 U.S.C. 461-467), as amended.

[SEC. 8. Subsection (h) of section 2 of the Act of August 21, 1935, the Historical Sites, Buildings, and Antiquities Act (49 Stat. 666; 16 U.S.C. 462(h)), is amended by changing the proviso therein to read as follows: "Provided, That the Secretary may grant such concessions, leases, or permits and enter into contracts relating to the same with responsible persons, firms, or corporations without advertising and without securing competitive bids."

[SEC. 9. Each concessioner shall keep such records as the Secretary may prescribe to enable the Secretary to determine that all terms of the concession contract have been and are being faithfully performed, and the Secretary and his duly authorized representatives shall, for the purpose of audit and examination, have access