Some of the amendment’s provisions would standardize procedures used by the Forest Service in permit and rate decisions; others would give the public and local governments affected by recreation areas a greater role in the planning and evaluation of such areas.
The amendment has been drafted with all viewpoints in mind, and I think it strikes a fair balance between the public’s right to a voice in deciding the use of public lands and a permittee’s need for a certain degree of certainty and security in his investment.
Several changes have been made in the bill concerning rate-setting procedures. Originally the bill called for public hearings on each rate increase request, but ski industry representatives who testified pointed out that there is too little time between the end of one ski season and the deadline for publishing the next season’s rates to allow that.
Instead, the amendment would provide for a hearing every three years during the 30-year term of a recreation permit, at which the public would be invited to comment on every aspect of the permittee’s performance—not just rates.
The amendment would require only historical financial disclosure by the permittee, rather than the full disclosure called for by the original bill. While I still believe in disclosure of any financial information used to justify rates charged by a private party to the public for the use of the public’s own land, I think the industry’s proposal that only historical data be disclosed will be sufficient.
The secion of S.2125 which tied rates to “reasonable return on equity investment” has been deleted by the amendment because of the strong case industry representatives made against it during the hearing. But the Forest Service would have to develop uniform regulations for review of proposed rate changes and prepare written statements of the basis for its rate decisions. Any increase must be reasonable and must include some provision for special rates to area residents, the elderly, students or members of organizations.
In permit issuance decisions, the amendment seeks to provide for greater involvement by local governments that will be affected by the recreation areas. During the Colorado hearings local officials pointed out that they often find it difficult to cope with the rapid growth caused by large ski areas, since they must provide needed services such as sewer and water facilities and police and fire protection for a large skiing population each winter.
Present law required the federal government to return 25 per cent of permit fees collected from ski area operators to the states for use only in constructing roads and schools. Yet local government leaders said they need additional funds which they can use for any municipal purposes.
The amendment would increase the local share to 50 per cent, remove all restrictions from use of funds, and have the payments go directly to affected local governments rather than to the state.
In addition, before the forest service could issue a permit for a ski area, the developer would have to meet all state and local government requirements and agree in advance with all three levels of government on the maximum capacity of the ski area.
The Forest Service would also have to determine that sufficient demand existed for the facilities; that they wouldn’t preempt better uses of the public land; and that the proposed location would best serve the public and wouldn’t adversely affect adjacent lands.
The permit term would be set at 30 years by the amendment; it seemed to me the industry didn’t make a strong enough case for increasing the term to 50 years as the original bill would have done. The amendment also would allow the Forest Service to approve permits for up to 2,000 acres of public lands. Larger areas would need the approval of both the House and Senate Interior Committees.
Moreover, the amendment would allow the issuance of a new permit during the seven years before the expiration of the old permit, if the Forest Service approved substantial capital investment by the permittee during that period.
This provision resulted from ski industry concern about the difficulty of making capital investments during the last few years of any permit. At that time the ski operator and the creditor are faced with a hard decision: to risk making an investment which might not be recovered if the permit isn’t reissued, or to allow the quality of facilities to deteriorate and then risk losing the permit.
The amendment would also make it clear that the Forest Service has full discretion to issue a permit to a different applicant at the end of a term, and that the permittee is qualified for a new permit only if he has fully complied with the existing permit’s terms.
As a result of testimony during the hearings on the proposed East River Unit Plan of the Gunnison National Forest, the amendment would require the Forest Service to verify any data from private parties used in the issuance, renewal or amendment of recreation permits, in the preparation of unit plans and designation of winter sports sites.
The testimony indicated that in its early recommendation against expansion of the Crested Butte ski area, the Forest Service took at face value and used ski capacity figures supplied by the Crested Butte Development Corporation, the company seeking the expansion.
Then, when the Forest Service reversed its tentative reccomendation, it also accepted without question and used new capacity figures from the corporation which showed a need for expansion. It’s clear that whenever the Forest Service is making rate or permit decisions it must get independent information, rather than rely on those with an interest in the decision for the data.
A new section added to the bill by the amendment would address the problem of possible ski monopolies on national forest lands in the West. Although large ski resorts may be competing nationally for skiers from distant states, it is clear they often have a virtual monopoly over skiing in a particular area. And although the special geographical needs of a ski resort limit the number of available sites, it seems the Forest Service may have contributed to the monopolistic tendencies by granting ski area permits for more than one resort in the same area to only one corporation.
The amendment would require that before allowing a permit holder to expand an operation or start a new one on public land in the same area, the Forest Service would have to determine with the Attorney General if such an action would diminish competition in the area or if another operator should develop the proposed area.
Finally, the amendment would require the Forest Service to make some provision for independent ski instruction on the national forest lands. The independent instructors testified that they are willing to meet all reasonable requirements—such as prohibition of group lessons, payments to the ski area permittee, testing to establish ability, and purchase of insurance. With such provisions, I believe there is a place for independent ski instructors on public slopes.
I’m sure everyone won’t applaud every provision of the amended legislation: some will think the public hearings should be more frequent, for instance, while others will think even one hearing is too many. But this bill represents an attempt to balance the competing needs, and I think it does a pretty good job of that. I am hopeful that it will be passed by the Senate this summer.
Summary of NSAA Position
At press-time, the future of Senator Haskell’s bill was hard to foretell. An NSAA task force that included Cal Conniff, Garry Mitchell (Colorado Ski Country USA) and NSAA Washington attorney George Hartzog, worked long and hard to get changes into the amendments which Haskell had introduced. The Senator went along with many of NSAA’s suggestions, but there was no accommodation by him on the independent instructor issue, and the Bill went to the full Senate with this element intact.
NSAA is firmly opposed to Haskell’s thinking on the rights of the independent ski instructor. Since the Senator showed himself to be just as firmly persuaded in favor of it, NSAA took the tack that the bill should not include the independent instructor element because the “issue is now in litigation in the courts.” NSAA argued that in another section of the bill Mineral King was excluded because there was pending litigation involved. Therefore, NSAA said, “We believe that it is only right and proper that the subcommittee should exercise similar restraint in connection with the highly controversial litigation now pending involving independent ski instruction.”
Elsewhere, NSAA argued the “hot dog vendor” example. If, because public lands are involved, the independent instructor has a right to do business in competition with the permittee, why shouldn’t a hot dog vendor have the same right to set up his stand in the permittee’s base area? Or anyone else with a product or service to sell?
At the final mark-up, Section 5, which had been strongly opposed by NSAA, was omitted from the Bill. This section, which Haskell had strongly espoused, involved his feeling that the Forest Service may encourage monopolies in the way they issue permits for ski areas. NSAA countered that any diminution of competition—should it materialize—“can be dealt with adequately through the operation of existing anti-trust laws.”
The Bill, which will probably be passed by the Senate in late July, will then go to the House, where NSAA hopes there will be public hearings that will give the ski area industry an opportunity to “clean the Bill up further” or to help it die.
Forest Service position on S.2125
The Forest Service is also greatly interested in any legislation affecting its administration of public lands. The following statement was prepared for Ski Area Management by Zane G. Smith, Jr., Director of Recreation Management.
The 187 million acre National Forest System, administered by the Forest Service, U. S. Department of Agriculture, is a major supplier of outdoor recreation opportunities to the nation. These opportunities range from those requiring little or no developed facilities, such as wilderness, to those requiring major investments in facilities, as, for example, downhill skiing. (Over two-thirds of all downhill skiing occurs on the National Forests.)
Last year the National Forest System received almost 200 million visitor days of recreation use. A substantial portion of that was made available through the supply services of private investors operating under permit on National Forests. About 1,900 concessionaires ranging from one-man packer operations to multi-million dollar ski areas have, in total, invested close to $300 million to develop the recreation resource. Without the provisions and services of these National Forest concessionaires, many recreation opportunities simply would not be available to the American public. Use permits are recognized as a proper and lawful means of developing the National Forests. Legislatively authorized, they are administered through Forest Service and Department of Agriculture procedures and regulations.
All projections for future outdoor recreation demands indicate a need to increase recreation opportunities in the coming years. We estimate an additional $200 million private investment will be needed within the next decade if the National Forests are to meet their expected share of those recreation demands.
Permits for large, developed facilities such as ski resorts are issued only after the Forest Service planning process has determined that there is a public need for such facilities, and that such development is in accordance with land management objectives. The Forest Service is proud to be one of the pioneers in developing land management plans cooperatively with other governmental jurisdictions at all levels. The present National Forest land management planning process is the product of this joint evolutionary effort. As the process first evolved, field managers were given only “framework” instructions. Contrary to concerns that Forest Service planning procedures lack uniformity, this has provided a flexibility which allowed those field managers to develop and test innovative approaches. The most workable of those approaches become part of national direction related to planning and administering concession operations.
In short, the Forest Service has existing statutory authority to issue permits for concessionaire operations on National Forests. We have procedures governing administration of those permits, and processes to insure balanced and innovative planning for developed facilities. Through the years these have worked well to ensure that public needs for recreation opportunities are met, using private capital rather than government funds to provide facilities. Protection of the public interest in providing quality public facilities has also been served.
It is important that new legislation affecting the commercial recreation concessions on National Forests recognize the need to attract adequate private capital to continue to meet increasing need. The reaching of outdoor recreation
