whether consumers will pay $10 per hour for court time or $20; a wrong judgment can lead to a business failure. The market for public recreation providers is constrained; all boaters must register their craft to be legal, regardless of the value they feel they are deriving.

Defining a User Fee

One of the most difficult issues associated with the recreation program funding issue is semantics: What is a user fee?

• Is a park entrance fee a user fee?

Is a registration fee a user fee?

Is a hunting license a user fee?

Is an excise tax on recreation equipment a user fee?

The answer is that yes, these are in concept user fees but no, under existing law and regulations, they are not user fees. The Land and Water Conservation Fund Act of 1964 expressly differentiated between entrance fees and user fees, for example.

The American Recreation Coalition has reviewed current definitions of user fees and finds them to be unsuitable, for they fail to discriminate between user fees and specialized taxes; by definition, user fees should be a "closed loop" charge by which receipts are returned to benefit those paying the charge. ARC adopted the following position regarding user fees on March 19, 1981:

... can

"Recreational users [of public land and waters]
be expected to contribute to management costs through user
charges, registration fees, fuel taxes and other direct and
indirect means. Because many activities on public lands gen-
erate revenues in these ways today, existing payments to gov-
ernments by recreationists and those providing recreation
opportunities must be fully considered before additional taxes,
fees or licenses are implemented. No government which manages
public land can legitimately abrogate its resource stewardship
responsibilities by denying public recreational opportunities
in the name of fiscal constraints. Government agencies with
land management responsibilities should either utilize

9

mechanisms to derive revenues from recreational users to pro-
vide recreational opportunities or allow the private sector to
assume this responsibility."

Currently, millions and millions of dollars are already being paid
In an initial report pre-

by recreationists to the federal government.

pared for Senator James McClure in March of 1981, the Congressional Research Service identified annual recreation-related receipts of $146 million; this study failed to include substantial additional payments by other non-highway recreational activities (snowmobiling, off-road motorcycling and four-wheel drive activity) in federal fuel taxes and sharply increased fees implemented in 1982 for use of federal campgrounds and other sites. All of this income needs to be reflected in policy decisions on user fees and in the federal appropriation process. To do so, many of the existing definitions of and restrictions upon user fees need to be revised.

One key issue which requires Congressional decision is a threshold for programs designed to recover recreational costs. For many recreational activities, the cost of government support is extremely low per visitor day provided. For these programs, most cost-recovery programs would be economically unfeasible. Many of these activities are described as "dispersed recreation." At some point, however, the cost of recreation services does become a "special service" warranting a user charge. Defining that point, and the consequent decision to subsidize through general revenue allocation all lesser program costs, seems to be a legitimate Congressional role. One approach would be to assign federal agencies the responsibility for collecting a certain percentage (not more than 100 percent) of program costs from those recreational users receiving services greater than each agencies' average cost per recreation visitor day.

Implementing the User-Pay Alternative

Although user charges are now applied to many recreationists enjoying the public lands and incremental efforts to expand such charges are now in evidence, a clear-cut national policy decision in this area is needed to provide consistency across federal agencies. Such a national policy might embody the following principles:

Federal recreation program costs need to be assessed accurately
and reported to the Congress and the public. Today, no one
knows the true costs of operating a federal campground, for
example. Only when these costs are known can the costs of
specialized services be recovered and alternatives
private sector operation and reduced levels of services
evaluated.

-

including be

Cost recovery strategies must be flexible. For some activities,
entrance fees may be most efficient and equitable. For others,
a recreation permit such as the duck stamp
may be most
effective. In other cases, excise taxes may be the optimal
approach. In all cases, the affected interests must be consult-
ed, for voluntary compliance with cost recovery strategy will be
essential. Moreover, cost recovery strategies must be designed
to reach users of federal lands and waters, not the public at
large.

A new Recreation Trust Fund should be created, designed to meet
the maintenance and operating costs of federal recreation sites.
All revenues collected in the form of fees, special permits,
taxes and more levied against recreational users of the public
lands should be placed into this fund. Subsidies of federal
recreation upon which charges are not levied would be added to
this fund, perhaps on a matching basis and perhaps from a
revenue source such as OCS royalties.

Companion Measures

In addition to increased emphasis upon recreational user charges, the federal government can take several steps to assure continued high levels of recreation quality on the federal lands. First, it can expand its reliance upon the private sector as the direct provider on public lands under leases and permits. Current constraints on the length of such agreements and limits on what recreation services may be operated

11

by the private sector

campgrounds in national parks and national forneed to be carefully examined

ests have traditionally been off-limits

and revised.

Second, increased use of cooperative agreements with states, local units of government and non-profit organizations such as American Youth Hostels, Inc. can reduce the net cost of federal recreation programs. Boating facilities, snowmobile and nordic ski trails, motorcycle parks and other programs which depend upon public lands and waters can be operated by non-federal structures which currently collect fees, licenses or taxes, obviating the need for new federal revenues.

Summary

Recreation in America is an integral part of our nation's lifestyle. It is a healthy, healthful force in America's economy. Yet it faces the need for change, primarily because active, outdoor fun is heavily reliant upon our nation's public lands and structures and services upon those lands.

The most effective way to deal with budgetary duress at the federal, state and local levels is a combination of increased reliance upon recreational user charges, of expanded reliance upon the private sector and of further use of cooperative agreements with other government bodies. To facilitate this transition, a new federal recreation policy is needed, defining allowable user charge strategies and providing for specific levels of general revenue subsidies to federal recreation programs.

Senator WALLOP. Derrick, thank you very much.

We agree with that and are somewhat distracted by the three committee structure reference that has already taken place. Mr. Howell.

STATEMENT OF CHARLES A. HOWELL III, COMMISSIONER,
DEPARTMENT OF CONSERVATION, NASHVILLE, TN

Mr. HOWELL. Thank you, Mr. Chairman. I bring you greetings from Governor Lamar Alexander. I am Charles Howell. By his appointment I serve as Commissioner of Conservation in Tennessee where we operate our State parks and State forest. We don't have anything like the acreage that the Federal system has, but we have a half million acres of forest and parklands, about 160,000 acres in parks, 107 operating units, 52 of which are parks that would be operated by a pretty good staff, 7 resorts, 20 million visitors, $22 million of budget; $13 million of that is collected in fees and charges for services we render, and $9 million in local and State appropriations.

First, I think, Mr. Chairman, we ought to determine what is an appropriate subsidy for leisure opportunity. Currently local governments recoup approximately 25 percent of operational expenses from user fees and State agencies recover an average of 28 percent. Operational expenses in these cases do not include major maintenance items or the amortization of debt service, however.

User fees are derived from such things as charges for overnight accommodations, golf course and entrance fees and charges for consumable goods. Through the nature of its traditionally large land base, public sector leisure services are unlikely to ever be cost-effective until you include all the economic benefits derived. An excellent discussion of this matter can be found in the recent publication, "The Contribution of Outdoor Recreation to State Economic Development" by Suellen Keiner, published by the Council of State Agencies, and I have a copy here for your staff if you'd like to have

a copy.

Recreational opportunity is often perceived much like educational opportunity. We expect a base to be supported through taxes. Privileges beyond that base, such as an overnight stay in a lodge or the use of a golf course, should be borne by the user at a rate competitive with the private sector entrepreneur or the independent sector providers. And I'm very sorry that independent sector providers are not here today to talk about their method of operation and this whole subject.

Studies in Tennessee show that our people are willing to pay increased fees when that money goes back into the park system. At the local level a subsidy of 75 percent seems acceptable.

Additionally, for greater cost effectiveness, we must provide incentives for our parks to economize. Reduction of the park budget $1 dollar for every dollar collected or saved is not an incentive, Mr. Chairman. I personally believe that a 25 percent operating cost retrieval goal can be met if some of the money collected is added to, and not deducted from the park system budget.