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On July 28, the U.S. House of Representatives passed the National Park Service Concessions Policy Reform Act of 1994. Much of the information surrounding this legislation has been confusing and misleading. The National Parks and Conservation Association has expended tremendous resources to bring about passage of this legislation, and I would like to take this opportunity to share my view with you on this matter.

First, I believe that the existing National Park Service concession management law and policies have provided for the establishment of the most outstanding concessions facilities and services of any park system in the world.However, the current law is not perfect; it is largely anti-competitive and the return to the federal government in some contracts is less than satisfactory. Great credit goes to Utah's Sen. Bob Bennett because through his efforts, the Senate-passed legislation begins to address the anti-competitive elements of the existing law. However, under this measure, more than 80 percent of concession contacts will still remain free of meaningful competition.

The financial aspects of this matter are more complex. First, there is no federal government subsidy to concessionaires. Concession facilities were built and are maintained with private capital. The lodges, restaurants and other concession facilities enjoyed by millions of visitors to parks each year would never exist without that private investment. Second, NPCA figures on the return to the federal government from concession contracts are extremely misleading. They compute return as a percentage of gross sales instead of as a percentage of profit. I agree that some concessionaires make a good profit, but 40 of the NPS concessionaires operated at a loss in 1993.

The Oregon Caves concessioner had total annual revenues of $950,000 in 1993 and paid a franchise fee of $47,500. While the concessioner only paid a franchise fee of 5 percent, his net profit before taxes was just $10,000. Unlike the NPCA, no NPS concessioner had total revenues exceeding $10 million and paid nothing directly to the federal government in 1993. There are few people in the concessions industry who command a salary as high as the $170,000 salary paid to Paul Pritchard, president of NPCA.

Further, NPCA only considers the franchise fee in their estimate of return to the federal government, instead of all fees paid by concessionaires.

There is a problem with low return to the government in some of the old concession contracts, but that is an artifact of poor negotiating by government bureaucrats, not a result of the current law.

The question occurs as to why NPCA, which has endorsed such costly legislation as the $1.2 billion San Francisco Presidio Park, the $336 million California Desert bill and the $1.4 billion Redwood Park Expansion Act, has suddenly become so concerned about impacts on the American taxpayer.

A careful reading of the House version of the concession reform bill may reveal some answers to this question. This bill not only contains substantial financial disincentives for future investment of private money for visitor facilities, it precludes them altogether if there are any "feasible" (i.e., possible) alternatives for building facilities outside of parks. In other words, if the Zion Park Lodge burned down tomorrow, it could never be rebuilt.

For these reasons, I am very concerned about the current version of concession reform legislation, and I believe that every American who enjoys parks should share in those concerns. I hope that this legislation can be amended before it reaches the president's desk to make sure that when our children and grandchildren visit these parks, they will still find quality visitor services at reasonable prices, instead of being locked out of inaccessible wilderness parks.

James V. Hansen

Member of Congress