[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
       OVERSIGHT HEARING ON FEDERAL VS. STATE MANAGEMENT OF PARKS

=======================================================================

                           OVERSIGHT HEARING

                               before the

            SUBCOMMITTEE ON NATIONAL PARKS AND PUBLIC LANDS

                                 of the

                         COMMITTEE ON RESOURCES
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                     JULY 10, 1997, WASHINGTON, DC

                               __________

                           Serial No. 105-43

                               __________

           Printed for the use of the Committee on Resources



                                


                      U.S. GOVERNMENT PRINTING OFFICE
 45-042 CC                   WASHINGTON : 1997
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                         COMMITTEE ON RESOURCES

                      DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana       GEORGE MILLER, California
JAMES V. HANSEN, Utah                EDWARD J. MARKEY, Massachusetts
JIM SAXTON, New Jersey               NICK J. RAHALL II, West Virginia
ELTON GALLEGLY, California           BRUCE F. VENTO, Minnesota
JOHN J. DUNCAN, Jr., Tennessee       DALE E. KILDEE, Michigan
JOEL HEFLEY, Colorado                PETER A. DeFAZIO, Oregon
JOHN T. DOOLITTLE, California        ENI F.H. FALEOMAVAEGA, American 
WAYNE T. GILCHREST, Maryland             Samoa
KEN CALVERT, California              NEIL ABERCROMBIE, Hawaii
RICHARD W. POMBO, California         SOLOMON P. ORTIZ, Texas
BARBARA CUBIN, Wyoming               OWEN B. PICKETT, Virginia
HELEN CHENOWETH, Idaho               FRANK PALLONE, Jr., New Jersey
LINDA SMITH, Washington              CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California     CARLOS A. ROMERO-BARCELO, Puerto 
WALTER B. JONES, Jr., North              Rico
    Carolina                         MAURICE D. HINCHEY, New York
WILLIAM M. (MAC) THORNBERRY, Texas   ROBERT A. UNDERWOOD, Guam
JOHN SHADEGG, Arizona                SAM FARR, California
JOHN E. ENSIGN, Nevada               PATRICK J. KENNEDY, Rhode Island
ROBERT F. SMITH, Oregon              ADAM SMITH, Washington
CHRIS CANNON, Utah                   WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   CHRIS JOHN, Louisiana
JOHN PETERSON, Pennsylvania          DONNA CHRISTIAN-GREEN, Virgin 
RICK HILL, Montana                       Islands
BOB SCHAFFER, Colorado               RON KIND, Wisconsin
JIM GIBBONS, Nevada                  LLOYD DOGGETT, Texas
MICHAEL D. CRAPO, Idaho

                     Lloyd A. Jones, Chief of Staff
                   Elizabeth Megginson, Chief Counsel
              Christine Kennedy, Chief Clerk/Administrator
                John Lawrence, Democratic Staff Director
                                 ------                                

            Subcommittee on National Parks and Public Lands

                    JAMES V. HANSEN, Utah, Chairman
ELTON, GALLEGLY, California          ENI F.H. FALEOMAVAEGA, American 
JOHN J. DUNCAN, Jr., Tennessee           Samoa
JOEL HEFLEY, Colorado                EDWARD J. MARKEY, Massachusetts
WAYNE T. GILCHREST, Maryland         NICK J. RAHALL II, West Virginia
RICHARD W. POMBO, California         BRUCE F. VENTO, Minnesota
HELEN CHENOWETH, Idaho               DALE E. KILDEE, Michigan
LINDA SMITH, Washington              FRANK PALLONE, Jr., New Jersey
GEORGE P. RADANOVICH, California     CARLOS A. ROMERO-BARCELO, Puerto 
WALTER B. JONES, Jr., North              Rico
    Carolina                         MAURICE D. HINCHEY, New York
JOHN B. SHADEGG, Arizona             ROBERT A. UNDERWOOD, Guam
JOHN E. ENSIGN, Nevada               PATRICK J. KENNEDY, Rhode Island
ROBERT F. SMITH, Oregon              WILLIAM D. DELAHUNT, Massachusetts
RICK HILL, Montana                   DONNA CHRISTIAN-GREEN, Virgin 
JIM GIBBONS, Nevada                      Islands
                                     RON KIND, Wisconsin
                                     LLOYD DOGGETT, Texas
                        Allen Freemyer, Counsel
                  P. Daniel Smith, Professional Staff
                    Liz Birnbaum, Democratic Counsel



                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held July 10, 1997.......................................     1

Statements of Members:
    Faleomavaega, Hon. Eni, a Delegate in Congress from the 
      Territory of American Samoa................................     3
    Hansen, Hon. James V., a Representative in Congress from the 
      State of Utah..............................................     1
        Prepared statement of....................................     2
    Hill, Hon. Rick, a Representative in Congress from the State 
      of Montana, prepared statement of..........................    15

Statements of witnesses:
    Jones, Kenneth B., Deputy Director for Park Stewardship, 
      California Department of Parks and Recreation..............     7
        Prepared statement of....................................    68
    Leal, Donald R., Senior Associate, Political Economy Research 
      Center.....................................................     4
        Prepared statement of....................................    18

Additional material supplied:
    PERC, Bozeman, Montana, ``Parks in Transition; A Look at 
      State Parks''..............................................    28
        PERC Policy Series, ``Back to the Future to Save Our 
          Parks''................................................    72



       OVERSIGHT HEARING ON FEDERAL VS. STATE MANAGEMENT OF PARKS

                              ----------                              


                        THURSDAY, JULY 10, 1997

        House of Representatives, Subcommittee on National 
            Parks and Public Lands, Committee on Resources, 
            Washington, DC.
    The Subcommittee met, pursuant to call, at 10 a.m., Room 
1324, Longworth House Office Building, Hon. James V. Hansen, 
Chairman, presiding.

STATEMENT OF HON. JAMES V. HANSEN, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF UTAH

    Mr. Hansen. Good morning. The Subcommittee on National 
Parks and Public Lands will come to order. I have scheduled 
this hearing as a continuation of this Subcommittee's 
longstanding interest in the issue of recreational fees on 
Federal lands, especially in the National Park System.
    This issue has been a major concern for the Congress for 
the past 10 years. And this subcommittee, as well as the 
Committee on Resources, have worked closely with the Budget 
Committee and the Appropriations Committee to ensure that the 
American public has the opportunity to enjoy the federally 
managed lands by paying fair and reasonable recreation fees.
    During 1996, Congress authorized a Recreational Fee 
Demonstration Program providing the Federal land management 
agencies far-reaching discretion in creating recreation fee 
programs during the next 3 years. This Fee Demonstration 
Program allows the agencies to retain 80 percent of the revenue 
collected in excess of the amount collected in 1995, with 20 
percent returning to the General Treasury.
    Currently, language contained in the fiscal year 1998 
Interior Appropriations bill would allow the agencies to retain 
80 percent of the revenue in the unit collecting the fee, and 
the remaining 20 percent to the Federal land management agency. 
This subcommittee will continue to oversight the progress of 
this Recreation Fee Demonstration Program. And today's hearing 
will add valuable insight into the future success of National 
Park Service recreation fee program.
    As in many instances, the States are in the forefront of 
implementing new and creative solutions to old problems. Today, 
we will hear detailed and interesting testimony concerning how 
States are addressing the issue of tight fiscal constraints in 
park budgets by moving from general tax support to user fees to 
operate and maintain their State parks.
    Although I do not believe that the National Park System 
should ever reach total self-sufficiency in its operation 
budget, I do believe that there are many comparisons that can 
be made from the success of the States in operating and 
maintaining their parks.
    I welcome Mr. Don Leal, Senior Associate of the Political 
Economy Research Center, Bozeman, Montana, who will present 
findings from his recently published policy paper entitled, 
``Back to the Future to Save Our Parks.'' I believe that many 
of us will be surprised to learn that 16 State park systems 
currently obtain more than one-half of their operating costs 
from recreation fees, and that many others are heading in that 
direction.
    Furthermore, I believe that this paper demonstrates that if 
fees are reasonable and the public is informed that their fees 
are utilized in the park where collected, there is broad-based 
support for recreation user fees.
    I also welcome Kenneth B. Jones, Deputy Director for Park 
Stewardship, California Department of Parks and Recreation, who 
will provide testimony on the tremendously successful 
transition the State of California park system is undertaking 
to address budgetary and management issues.
    The California park system is unique, consisting of 264 
parks covering 1.3 million acres, including 11,000 picnic 
sites, 17,500 campsites, 280 miles of coastline, and 3,000 
miles of trails. With over 70 million visitors enjoying this 
State system each year, it provides a true benchmark by which 
to measure our efforts on the Federal level.
    I will let both of our distinguished panelists make their 
presentations so that we have their ideas and concepts on the 
table, and then I will recognize members for their questions. 
But prior to that, I recognize my good friend and colleague 
from American Samoa, the Ranking Member of the subcommittee, 
Mr. Faleomavaega. The gentleman from American Samoa.
    [Statement of Mr. Hansen follows:]

 Statement of Hon. James V. Hansen, a Representative in Congress from 
                           the State of Utah

    Good Morning. The Subcommittee on National Parks and Public 
Lands will come to order.
    I have scheduled this hearing as a continuation of this 
Subcommittee's longstanding interest in the issue of 
recreational fees on Federal lands, especially in the National 
Park System. This issue has been a major concern for the 
Congress for the past 10 years, and this Subcommittee, as well 
as the Committee on Resources, have worked closely with the 
Appropriations Committee to insure that the American public has 
the opportunity to enjoy federally managed lands by paying fair 
and reasonable recreation fees.
    During 1996, Congress authorized a Recreational Fee 
Demonstration Program providing the Federal land management 
agencies far-reaching discretion in creating recreation fee 
programs during the next three years. This Fee Demonstration 
Program allows the agencies to retain 80 percent of the revenue 
collected in excess of the amount collected in 1995, with 20 
percent returning to the General Treasury. Currently, language 
contained in the fical year 1998 Interior Appropriations bill 
will allow the agencies to retain 80 percent of the revenue in 
the unit collecting the fee, and the remaining 20 percent to 
the Federal land management agency. This Subcommittee will 
continue it's oversight role to monitor the progress of this 
Recreation Fee Demonstration Program, and today's hearing will 
add valuable insight into the future success of National Park 
Service recreation fee programs.
    As in many instances, the States are in the forefront of 
implementing new and creative solutions to old problems. Today, 
we will hear detailed and interesting testimony concerning how 
States are addressing the issue of tight fiscal constraints in 
park budgets by moving from general tax support to user fees to 
operate and maintain their State parks. Although, I do not 
believe that the National Park System should ever reach total 
self-sufficiency in its operations budget, I do believe that 
there are comparisons that can be made from the success of the 
States in operating and maintaining their parks.
    I welcome Mr. Don Leal, Senior Associate of the Political 
Economy Research Center (PERC), Bozeman, Montana, who will 
present findings from his recently published policy paper 
entitled, ``Back to the Future to Save our Parks.'' I believe 
that many of us will be surprised to learn that sixteen State 
park systems currently obtain more than one-half of their 
operating costs from recreation fees, and that many others are 
heading in that direction.
    Furthermore, I believe that this paper demonstrates that if 
user fees are reasonable, and that the public is informed that 
their fees are utilized in the park where collected, there is 
broad based support for recreation user fees.
    I also welcome, Kenneth B. Jones, Deputy Director for Park 
Stewardship, California Department of Parks and Recreation, who 
will provide testimony on the tremendously successful 
transition the State of California park system is undertaking 
to address budgetary and management issues. The California park 
system is unique, consisting of 264 parks covering 1.3 million 
acres, including 11,000 picnic sites, 17,500 campsites, 280 
miles of coastline, and 3,000 miles of trails. With over 70 
million visitors enjoying this State system each year, it 
provides a true benchmark by which to measure our efforts at 
the Federal level.
    I will let both of our distinguished panelists make their 
presentations so that we have their ideas and concepts on the 
table, and then I will recognize Members for their questions, 
but prior to that, I recognize my good friend and colleague 
from American Samoa, the Ranking Member of the Subcommittee, 
Mr. Faleomavaega.

STATEMENT OF HON. ENI FALEOMAVAEGA, A DELEGATE IN CONGRESS FROM 
                THE TERRITORY OF AMERICAN SAMOA

    Mr. Faleomavaega. Thank you, Mr. Chairman. And, Mr. 
Chairman, I understand one of the focuses of today's hearing 
will be on a report issued by a private organization known as 
the Political Economy Research Center, otherwise known as PERC.
    The report entitled, ``Back to the Future to Save Our 
Parks,'' is based on the premise that, to use PERC's own words, 
popular parks can and should pay their own way. I believe this 
is a seriously flawed premise. We do not operate our national 
parks like Walt Disney charging what the market will bear.
    Our national parks have value to the Nation whether they 
are visited by one or 1 million persons. Many members support 
reasonable fees for visiting national parks with the 
understanding that the money collected will remain in the 
parks. As you know, Mr. Chairman, this was the subject of 
considerable debate in the subcommittee last Congress. The key 
to fee collection is that is it fair, reasonable, and 
equitable?
    If we were to follow PERC's recommendation, there would 
have to be a sevenfold increase in what is currently collected. 
This is not to say there is not room for improvement, and I 
will certainly approach today's hearing in that light. If there 
are ways we can ease the financial problems of our parks in a 
manner that is fair, reasonable, and equitable, then I am 
certain that we are willing to consider those options.
    And, Mr. Chairman, at this time, I would like to welcome 
our witnesses this morning, and I am looking forward to hearing 
their testimonies. Thank you, Mr. Chairman.
    Mr. Hansen. Thank you. We are grateful to our panelists for 
being here. Thanks so much for coming. We will start with you, 
Mr. Leal, and then Mr. Jones. Is that all right? And, Mr. Leal, 
as we say in our business, the floor is yours.

   STATEMENT OF DONALD R. LEAL, SENIOR ASSOCIATE, POLITICAL 
                    ECONOMY RESEARCH CENTER

    Mr. Leal. Thank you, Mr. Chairman. I am here today to 
present the case for returning our popular national parks to 
the self-supporting parks they originally were intended to be. 
It is not widely known, but the intent of our early national 
parks was that they would be self-supporting parks. 
Congressional appropriations were to be limited to the Initial 
investments in roads and visitor facilities.
    In 1916, when Congress authorized the creation of the 
National Park Service, Interior Secretary Franklin Lane 
appointed Stephen Mather, a successful businessman and 
millionaire, to run the 14 existing national parks on a self-
supporting basis.
    In Mather's first report on parks to the Secretary, he 
states, ``It has been your desire that ultimately the revenues 
of several parks might be sufficient to cover the cost of 
administration and protection, and that Congress should only be 
requested to appropriate funds for their improvement. It 
appears at least five parks have a proven earning capacity 
sufficiently large to make their operation both feasible and 
practible.'' The five parks were Yellowstone, Yosemite, Mount 
Rainier, Sequoia, and what is now called Kings Canyon-Sequoia 
National Parks.
    Importantly, at this time, park revenues were held in a 
special account accessible to the Park Service without 
congressional appropriation. Mather, the Director of the Park 
Service, considered this important for responsible management 
because, from the Park Service's perspective, there was a clear 
link between serving park visitors and having the funds 
necessary to manage the parks.
    Unfortunately, Congress took control of all financing for 
parks in 1918 by requiring that all park fees be returned to 
the Federal Treasury, and this critical link between serving 
visitors and generating funds for managing the parks was 
broken. With revenues going to the Treasury and the lion's 
share of the funding coming from tax dollars, the Park Service 
has had little economic incentive to serve park visitors.
    Moreover, park budgets have become political footballs. 
Raising money via allocations from the Treasury has been a 
matter of first denying customer service or letting park 
facilities run down in order to provide the necessary political 
impetus to free up more money for parks.
    I can give you a great illustration of the political 
problems in our financing. The Superintendent of Yellowstone 
Park last year announced the closing of two museums in a 
popular campground called Norris Campground in order to save 
$70,000, the cost in operating these facilities. And he was 
right. He would save $70,000 in operating costs.
    But the problem was those three facilities or, excuse me, 
just the campground alone generated $114,000. In other words, 
revenue from that operation alone actually surpassed the costs 
of operating the three facilities. From the Superintendent's 
perspective, he didn't see the revenue. It all went to the 
Federal Treasury. So it was rational for him to try to save 
money by closing the popular campground and the two museums.
    Contrary to the view that tax-supported parks guarantees 
long-term protection, our national parks have suffered from 
poor incentives to maintain themselves. The Park Service says 
it has a $4.5 billion backlog of construction improvements and 
a $800 million backlog of major maintenance.
    Are we to assume that our parks have fallen victim to a 
budget-conscious Congress? The evidence says no. From 1980 to 
1995, the total budget of the Park Service nearly doubled from 
almost $700 million to $1.3 billion. Spending on operation, 
which includes staffing and wage increases, grew at a healthy 
inflation-adjusted annual rate of 3.1 percent, and full-time 
staff increased from 15,836 to 17,216 employees, more than 
enough to handle visitation which grew by less than 1.5 percent 
per year. While spending on the agency itself increased, 
spending for major park repairs and renovations fell at an 
inflation-adjusted annual rate of 1.5 percent.
    The healthy increase in annual operating expenses has not 
led to better service in Yellowstone, Yosemite, and other 
popular parks. According to a recent Consumer's Report survey, 
the two most frequent complaints were crowded conditions and 
the lack of adequate visitor servcies. This sad state of 
affairs is brought about because most of the money to support 
parks is not earned from park visitors.
    States, however, are showing us that as tax support for 
their parks declined, State park agencies generated more 
revenue from users. Spurred by nearly a 41 percent decline in 
real terms in general tax support for all State parks in the 
country, user fees collected at all State parks went from $182 
million in 1980 or about 17 percent of the total State park 
spending, to $513 million in 1994 or one-third of total park 
spending.
    In contrast, the Park Service collected $94 million 
representing about 7 percent of total spending by the agency. 
Like national parks, State parks have increased fees, but they 
have also raised revenue by being innovative in creating more 
services for park visitors.
    Moreover, a number of State park systems are showing us 
that the idea of self-supporting parks, at least operationally, 
is a feasible goal when heavy reliance on tax support for park 
operations is no longer a viable option. Faced with dramatic 
declines in general tax support, 16 State park systems now 
regularly obtain more than half of their operating costs from 
user fees.
    New Hampshire State Park System funds its entire $5 million 
operating budget out of entrance and camping fees, not out of 
condos or golf courses, but from just entrance and camping 
fees. In 1991, in the midst of a growing general fund crisis, 
the legislature required the park system to rely solely on 
park-generated revenue.
    Park revenue has actually exceeded operating expenditure 
for three consecutive years prior to passage of the Act, but 
park receipts have been handed over to the State treasury. The 
1991 Act let receipts flow into a park fund that carries over 
unspent park moneys from year to year. This encourages self-
sufficiency because park officials know that they have a 
reliable source of money dedicated to parks over the long-term.
    Texas is another great example of a State that is weaning 
itself from public funding. In the early 1980's, the Texas 
State Park Sys-

tem got almost 60 percent of its operating funding from general 
State taxes. It now gets 67 percent of its operating funding 
from user fees.
    It has also devised institutional reforms to raise revenue 
and save money. The Texas park management developed the 
entrepreneurial budget system. This innovative, market based 
financing system rewards individual parks with larger operating 
budgets if they surpass their revenue or cost savings targets 
for the year.
    With financial self-sufficiency as a goal, we can expect 
better service and greater efficiencies in running our parks. 
Comparing adjacent State and national parks in Texas, 
California, and South Dakota where the attractions and the 
natural amenities are about the same and the market areas are 
about the same, State parks, relying heavily on user support 
earn more revenues per acre, spend less per acre, and offer 
more services than the nearby national parks. And I include 
those examples in my Exhibits A, B, C, and D in this.
    And now, thanks to Congress, the National Park Service is 
testing the waters of greater user support. Congress recently 
authorized a 3-year demonstration program that raises fees and 
allows greater fee retention. However, I think we need to even 
go further.
    I think Congress should establish a fixed schedule that 
gradually reduces annual appropriations for park operations 
over a 10-year period until it reaches zero like they did in 
Texas and New Hampshire. Removing the heavy dependency on 
general funds spurred Texas, New Hampshire, and other State 
park systems to respond with greater revenue. The Park Service 
has to face the same reality.
    Congress should allow park managers to institute their own 
fee-based services as long as these services are compatible 
with the protection of natural amenities. Most of the fees 
collected in these parks--95 percent at least--should remain in 
the park system. A small amount, perhaps 5 percent, could be 
used to fund the systemwise administration.
    I also recommend that parks managers should be allowed to 
keep all cost savings and apply them to the budget for 
subsequent years. And, finally, each park should have a special 
park endowment fund for capital improvements. Capital 
allocations from the Treasury have a way of going to the 
creation of new parks instead of maintaining the existing ones.
    Giving park managers a capital fund dedicated to the 
individual park and the wherewithal to finance it with road 
tolls, surpluses from the operating revenues, as well as other 
avenues will help them generate the needed capital to support 
the park.
    Of course, some parks will not attract enough visitors or 
have enough commercially valued assets to be self-supporting. 
If these parks are to remain in the public domain, they should 
be funded separately out of general funds and not be subsidized 
by the high-use parks because this would weaken the incentives 
for revenue generation. These parks could also be turned over 
to private nonprofit groups with a one-time endowment to fund 
maintenance.
    Requiring popular parks to be self-supporting, at least 
operationally, is the surest way of spurring responsible 
management and financial accountability. The idea of self-
supporting parks is what early park supporters had in mind near 
the turn of the century when we were a much poorer Nation. 
Surely, with our higher incomes today, we as users of parks can 
afford to pay these amenities and help make our parks the 
treasures they should be. Thank you very much, Mr. Chairman.
    [Statement of Mr. Leal may be found at end of hearing.]
    [PERC Policy Series may be found at end of hearing.]
    [Park report may be found at end of hearing.]
    Mr. Hansen. Thank you, Mr. Leal; appreciate your excellent 
testimony. Mr. Jones, we will turn the time to you, sir, and 
thank you for being here.

    STATEMENT OF KENNETH B. JONES, DEPUTY DIRECTOR FOR PARK 
   STEWARDSHIP, CALIFORNIA DEPARTMENT OF PARKS AND RECREATION

    Mr. Jones. You are welcome. Thank you. Good morning, Mr. 
Chair, members. On behalf of Governor Pete Wilson and the 
California State Parks Director, Donald Murphy, who has 
testified before this committee before, it is a privilege to be 
here today to talk about the many changes California State 
Parks has gone through over the past several years and the 
bright prospect for our future.
    Earlier this year, our system's creative efforts in raising 
revenue and decreasing dependence on taxpayers was praised as 
pioneering by the Wall Street Journal. We are proud of our work 
in this field, but we are especially proud that our work in 
this area has not detracted from our mission and values, but it 
has been wholly consistent with them. In fact, we have become 
better stewards of California's most cherished natural and 
cultural resources.
    Let me begin by giving you an overview of the system we 
manage today. California State Parks manages 264 parks and 
other properties covering 1.3 million acres. Each year, 70 
million visitors enjoy our 11,000 picnic sites, 17,500 
campsites, 280 miles of coastline, and 3,000 miles of trail.
    We are a system as diverse as the National Parks, with 
historic sites such as Hearst Castle and Old Town San Diego; 
magnificent deserts such as Anza-Borrego; mighty redwood parks 
such as Big Basin, Humboldt, and Prairie Creek; special 
reserves such as Point Lobos and Torrey Pines; and expansive 
recreation-oriented beaches such as Huntington and Doheny.
    To pay for all this, our operating budget for the 1996-97 
fiscal year was about $181 million, 36 percent of which came 
from the State's general fund, and another 35 percent from 
revenues, which include user fees and concession rentals. The 
remainder comes from a number of other places such as grants, 
special fuel taxes, and an off-highway vehicle trust fund that 
supports our off-highway vehicle program.
    As a percentage of our budget, tax-based support for State 
Parks has diminished over the years, from nearly 80 percent in 
the early 1980's to 36 percent this past year. As that has 
happened, we at California State Parks have become more 
creative in raising revenues.
    The recession of the early 1990's led to a wholesale 
restructuring of the Department to put the focus back in the 
field, not behind the desk. We reduced the number of park 
districts from 55 to 23, abol-

ished five regional offices, and we gave superintendents more 
authority to make important decisions such as adjusting user 
fees.
    This reorganization removed about 180 positions by 
attrition and saved the State taxpayers more than $10 million. 
Our reorganization also allowed us to become more efficient, 
and this efficiency is also demonstrated in terms of our 
excellent working relationship with the National Park Service.
    In three parts of the State--the North Coast Redwoods, the 
San Francisco Bay Area, and the Santa Monica Mountains--
California parks and National Park Service have signed an 
agreement to work together for greater cost savings, improved 
resource management, and enhanced public service. Now, we are 
working with the National Park Service to expand the same 
partnership for our parks in the Mojave Desert and Marin 
County.
    Our recession-created reforms were one step. Another step 
toward more self-sufficiency and greater accountability took 
place 2 years ago when, with the active support of Governor 
Wilson, we took on a 5-year initiative to further decrease our 
dependence on the general fund by more than $19 million. We are 
doing this in a number of ways and have already reduced this 
figure by $3.5 million.
    For example, we are exploring other alternatives such as 
the privatization of selected parks and operations. And we are 
revising our fee structure to make fees simpler and more 
reflective of the use visitors get from their parks. After 
analyzing how our annual pass holders are using their passes, 
we are considering annual passes that are park-specific, for 
example. We expect to have a modified fee structure in place by 
the end of this year.
    One of our most successful endeavors in encouraging greater 
self-sufficiency has been our Revenue Allocation Program, which 
we instituted last year. This program is designed to encourage 
our park districts to increase revenue by providing incentives 
that allow them to retain much of the new revenue.
    Each fiscal year a district is given a guaranteed minimum 
allocation, referred to as its Tier One [base] allocation. 
While this is not tied to revenue, each district is expected to 
raise an agreed-to base revenue.
    As the district's revenue rises above the base, it is 
authorized to spend up to a level defined as its Tier-Two 
allocation, and that is a specified maximum. When a district 
exceeds this maximum and enters a third tier, these revenues 
are then applied against the general fund reduction. Following 
the first year of revenue allocation, revenue at State parks 
has increased about $3 million representing a 6 percent 
increase. And our conclusion is simple, that the incentives to 
the districts work.
    Our new Division of Marketing and Revenue Generation has 
provided the field with entrepreneurial expertise, and many of 
our superintendents and other field staff have found unique 
ways to raise revenues, something they would not have been able 
to do if everything was controlled through headquarters in 
Sacramento.
    For example, our superintendent in the Salton Sea Sector 
used targeted advertising and discount coupons to increase 
visitation at a unit named Picacho State Recreation Area off 
the Colorado River near the Mexican border. In 1 month, we saw 
a 65 percent increase in visitation and a 40 percent overall 
increase for the fiscal year.
    Several other parks and districts are offering value-added 
services such as special tour programs. Our Department's 
outdoor programs are aimed at introducing people to the skills 
they need to camp and enjoy California's great outdoors. Our 
districts have used their flexibility in altering fees to 
attract more visitors.
    In the area of concessions, we have had the opportunity to 
renegotiate contracts and receive higher payments in a number 
of key park units. Concession rental revenue has increased each 
year and for the 1997-98 fiscal year is projected to be $2 
million above the previous year.
    But just as we are finding ways to be creative and 
entrepreneurial, we are getting more and more Californians 
involved in their parks. For example, we have an active 
volunteer program. In 1995, nearly 12,000 volunteers logged in 
886,000 hours for the Department, saving the taxpayers $11.5 
million. We have more than 80 cooperating associations raising 
millions to support our park programs.
    The support of our volunteers and our stakeholders is 
mirrored in the high level of regard Californians have for 
their State parks. Last summer, we commissioned a statewide 
survey that yielded results that shocked the pollsters. They 
were not used to such a positive reaction.
    Ninety-four percent of those polled said that despite the 
current shortfall of available revenues, parks must be properly 
maintained for present and future generations to enjoy. 
Seventy-five percent supported government funding for parks. 
Interestingly, when we asked our respondents what they felt 
were the most appropriate ways for State parks to raise money, 
corporate sponsorship, fee increases, and merchandising were at 
the top of the list.
    Besides this survey, we regularly track how our guests feel 
about the parks they visited. And satisfaction is ranked high 
in a number of areas such as facilities, public safety, 
interpretation, even fees. We have discovered that our visitors 
and all Californians support the direction in which we are 
headed.
    California State Parks is proof that we can make 
entrepreneurial changes and improve public service and resource 
management at the same time. We are a long way from self-
sufficiency, nor do we ever want to or expect to achieve this. 
But we know that we are taking the right steps to be 
responsible without jeopardy to the stewardship of the natural 
and cultural resources placed under our care. Thank you.
    [Statement of Mr. Jones may be found at end of hearing.]
    Mr. Hansen. Thank you very much. It was an interesting and 
informative testimony from both of our witnesses, and we 
appreciate that. The gentleman from American Samoa, Mr. 
Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman. Staff informs me 
that the annual budget of our whole National Park System--our 
operating budget at least runs for about $700 million. Can you 
hear me on this?
    Mr. Jones. Yes.
    Mr. Faleomavaega. And that annually we collect fees or at 
least the generation of that of approximately $100 million. 
There is no question that there is a problem here in meeting 
the care and the maintenance and of this sort. And I want to 
ask, Mr. Leal, if it is your organization's position that 
eventually all our national parks should be given to the States 
to operate and that the Federal Government perhaps should get 
away from the business of running parks?
    Mr. Leal. No, it is not my or my organization's position 
that the National Park System should be Federalized or turned 
over to the States. It is our position, again, that the 
national parks only learn from what the States are doing. 
Because there are 50 State parks systems and they approach the 
problem of financing somewhat differently, they do provide 
laboratories from which we can examine different policy 
approaches and see what the results are.
    That is the reason I examined the State Parks System was to 
get an idea of how well parks could be operated with revenues--
i.e., more revenues and less taxes--and what the outcomes would 
be.
    Mr. Faleomavaega. Well, if I may make an observation here 
of what your statement is, why is it that it costs less for a 
State to build a road through a park system, and when the Feds 
do it it costs 10 times more? I mean, this doesn't make sense. 
Can you share any observations on that, why the difference? 
Because the Federal Government has a higher standard of 
building a road than it is for a State or------
    Mr. Leal. That is one possibility, but I think it is more 
likely that the Federal Government has deeper pockets and it is 
not as frugal, if you will, about spending tax money. When you 
have to generate the money or earn the money on your own, there 
is a tendency to be more frugal in the building of roads or any 
of the infrastructure for the parks.
    Mr. Faleomavaega. You indicated in your testimony earlier 
about the five national parks that are very popular I guess in 
the sense that they are able to pretty much generate revenues 
to the extent that they become self-sufficient in that sense. 
What is your suggestion, that these parks should be turned over 
to the States to operate?
    Mr. Leal. No. I mean that the Park Service should price 
services more realistically and be more diligient in fee 
collection. In actuality, Yellowstone Park is very close to 
self-sufficiency. In 1997 Yellowstone Park will generate on the 
order of $8.5 million in revenues, representing 44 percent of 
the budget.
    All Yellowstone Park would have to do to be 80 percent 
self-sufficient would be to charge people with Grand Teton 
passes a $20 entrance fee. They would generate another $7 
million or $15 million total in revenue if they took that 
loophole away.
    Mr. Faleomavaega. You don't feel that grandmother and 
grandfather should deserve some kind of a special treatment 
like a senior pass to go through Yellowstone, and they should 
not be given a discount of some sort for our senior citizens?
    Mr. Leal. I don't have a problem with a discount. I have a 
problem with the size of the current discount. A $10 lifetime 
pass to a national park is a pretty big discount compared to 
the $20 regular entrance fee for Yellowstone Park.
    I think we need to reconsider the size of all discounts. 
Let's face it, in studies of national park visitors, the 
average income for an entrant in the national park is almost 
twice as high as the median income of the United States. There 
are not a lot of poor people entering the park.
    If you want to subsidize the poor so more can visit, we 
better think seriously about subsidizing their transportation 
and lodging expense because that is the lion's share of total 
expenses of visiting parks.
    Mr. Faleomavaega. So you believe that perhaps the way that 
we are doing this for our senior citizens is that there should 
be a better way of--arrangement. If you are a rich senior 
citizen------
    Mr. Leal. Yes.
    Mr. Faleomavaega. [continuing] you should pay the 40 bucks?
    Mr. Leal. I really do because when I see the elderly 
driving in an RV that cost $90,000 to enter the park, I am not 
sure that we are being realistic with our charges.
    Mr. Faleomavaega. Of course, at the same time, the elderly 
that drives an RV of $90,000, they feel that they are paying 
taxes, and they should be given a break once in a while, don't 
you think?
    Mr. Leal. I guess. But making parks tax dependent does not 
generate the necessary incentives for quality park services and 
also park upkeep.
    We have given a lot of tax money to the parks--the National 
Park System--since 1980. We have stayed ahead of inflation and 
that, but most of the money was spent on the agency itself and 
not on the parks.
    Look at the operating budget of the National Park Service--
the operating budget alone is $1.1 billion now.
    If you add up all the operating budgets of the national 
park units, it totals out to $668 million. In other words, $432 
million goes to the DC and regional offices. You know, that is 
a pretty top-heavy organization.
    Mr. Faleomavaega. Do you think the National Park Service 
bureaucracy--they are just sitting on their butts doing 
nothing?
    Mr. Leal. I think that there is a lot of room to reduce 
operating expenses of the Park Service and devoting the savings 
to park infrastucture.
    Mr. Faleomavaega. How about our friend from California, who 
seems to have the most parks than any other State? Do you agree 
with Mr. Leal's assessment?
    Mr. Jones. That is a pretty broad question. A couple of 
things that I would say I would not agree with is that there is 
no absolutes in these kind of policy decisions as to, for 
example, the level of funding. Self-sufficiency--working toward 
self-sufficiency or a target toward self-sufficiency is a 
worthwhile and noble objective. One hundred percent self-
sufficiency for an organization like National Parks is just not 
in anyone's best interests, and it is likely not doable, in my 
opinion.
    I feel very strongly that where you have these lands that 
are high public trust lands, such as considerable and 
significant natural resource values and cultural values, that 
it is not a sin to provide public funding to support those 
programs. The core values that are necessary to maintain the 
stewardship year after year after year takes precedent over 
everything. But by the same token, it is not wrong to have 
these reasonable objectives toward more and improved self-
sufficiency. I would say that is probably where California 
State Parks would disagree with one of the premises.
    The other aspect that I made a notation of is that I think 
there is a caution in comparing or picking a State and looking 
at that as being a potential direct application to Federal 
lands. The scale--for example, a 40 acre set-aside piece of 
land in the State of Oregon for campsites is not comparable to 
a Yellowstone and $9 million.
    And we have lots of examples in California that we could 
use that same comparison. So everyone's program I think needs 
to be tailored to the needs of that particular organization. 
California State Parks I think does happen to come as close as 
any to a National Park Service, and even our scale is out of 
whack when you compare it to a Federal level.
    And as far as the--I found with great interest, and I 
wasn't aware of this until I heard the testimony from PERC, 
that our movers and leaders of the Park System, Stephen Mather 
and Horace Albright and others, who thought self-sufficiency 
was very doable, I don't think possibly could have understood 
and forecasted what we might be in for in the 1990's and moving 
into the year 2000 with our national parks and millions and 
millions of visitors. It just wasn't possible to foresee. Those 
are some random thoughts I had.
    Mr. Faleomavaega. Just one more question, Mr. Chairman. We 
have talked a lot about Yellowstone, Yosemite, Mount Rainier, 
and these are the biggies. What about the little parks I feel 
that are just as important, but maybe they don't generate as 
many visitors? What would be Mr. Leal's recommendations to that 
kind of a situation?
    Mr. Leal. Again, I think that the motivation is for the 
popular parks not to suffer the rewards of generating revenue 
on their own. Therefore, I think it is important that those 
little parks that aren't tourist-attractors should be financed 
different. If you want to keep them in the public domain, then, 
by all means, use the general funds to support them, but don't 
penalize Yellowstone Park by taking money away from it and 
giving it to the little park.
    Take money out of the General Treasury and give it to the 
little park. It stands to reason they are not going to be that 
expensive to run so fund them out of tax funds.
    If you are really serious about paring down the size of the 
National Park System, which I think people ought to consider 
especially when you look at some units that really don't fit 
into the mission of the National Park Service and that--like 
Steamtown--we ought to give serious attention to turning those 
over to the private sector, to private land trusts, whatever. 
They probably would be taken care of better.
    Mr. Faleomavaega. Well, I appreciate your comments, Mr. 
Leal, but the problem that I have observed here while being 
here in the Congress is that we are always robbing Paul to give 
to--to say don't do it to us, but this is constantly how we 
seem to be juggling our Federal budget every year, you know--
take it from Paul to give it to someone else. But, at any rate, 
thank you, gentlemen. Thank you, Mr. Chairman.
    Mr. Hansen. Thank you. You know, it is always interesting--
the gentleman from American Samoa brought up some interesting 
things about seniors. We always go through that little flap. I 
was wondering about why we let seniors, especially through our 
big drive-in parks--they come in.
    I have spent a lot of time in my many years back here 
stumbling through the parks and walking into the camp areas. 
And it always bothers me when I see a guy in one of these 
$80,000 Winnebago and pulling a $30,000 Suburban--retired CEO--
comes in with his Golden Eagle free--hooks into the sewer or 
the water, electricity, and camps. He is given a limit of seven 
or 8 days. He just sits there, and he gets a freebie.
    And you see the kid in law school coming along, and he is 
in an old beatup car with two little kids, and he has got a 
little dome tent, and he pays the limit, and they kick him out 
in a short time. He has got to be back. So the equity of this 
thing always bothers me.
    And I have often tried--I remember when Ronald Reagan was 
in, in 1981 I tried to change that around. I was creamed on the 
floor. But people didn't make the distinction between our big 
drive-in parks, whether they be State or Federal, and our walk-
in parks.
    Now, it is very difficult to take a walk in a park. Like 
right here, how do you do it? You can't do it. Mr. Jones, is 
the State experiencing anything like that? I know you have got 
some beautiful, beautiful State parks. We have got 41 State 
parks in the State of Utah, and I have talked ad nauseam to the 
guys here, and everyone wrings their hands on how do you do it.
    And this trend toward a park fee, how is that acceptable? 
Is that acceptable at all to your park superintendents? How is 
that selling? I mean, your State is kind of a pilot State. You 
probably have got more than anybody else. You have got some 
gorgeous areas out there. What seems to be the trend with the 
guy on the ground who has to administer this program?
    Mr. Jones. I think generally the acceptance when the public 
understands the value they are receiving is close to 100 
percent, a reasonable price for a campsite in a beautiful park 
is absolutely accepted. And we have found that in our last 3 
years of surveys of our users where we have asked directly 
related questions to that satisfaction level.
    Where it becomes highly criticized and publicized, two 
points come to mind. It is where that value is not understood 
and the public is scrambling in their own minds to rationalize, 
``Why do I have to pay $5 to enter a beach which should be a 
God-given right to enter a beach?''
    Mr. Hansen. Well, don't they think that they are getting 
the best deal in America? I mean, I think the public should be 
made aware where is a better deal than a park? I mean, you take 
your wife and your children to dinner and to a movie on the 
weekend, like many American families do. You drop 100 bucks.
    And they walk into a park--you take Yellowstone, for 
example, in 1915 it cost $10. In 1996, it costs $10 or is it 
$15? I can't recall. It is $20 now, but up to this point, 
before we gave Mike Findley a little more latitude, it was--you 
could walk in there for almost 80 years and drive into that 
park and see the granddaddy of all parks for almost zilch.
    And people write me letters and say, ``Oh, gee. I hate the 
idea of doing it.'' A guy drives in. He has got $100,000 he is 
taking in there. Then he belly aches about a $15, now $20, fee 
to go in a park. My answer to him is, ``Tough. You are getting 
the best deal in America.'' And most people respond and say--
most of them say, ``Yes, it is a good deal.'' In fact, we get 
money sent to us all the time saying, ``I ripped you off.''
    They go down to what we call the Golden Circle in Utah 
where they can go to Zion, Bryce, Canyonlands, Arches, and Glen 
Canyon National Recreation Area, and now they can go to a place 
called the Grand Escalante-Staircase National Monument, which 
is nothing but rolling hills of sagebrush, and half the people 
that go there keep looking for the monument but don't know that 
they are in it because there is nothing there.
    But they love it, they think, because the President 
preserved something, where he really didn't. He opened it up 
for all kinds of development but didn't understand that he shot 
himself in the foot, but the environmentalists are soon finding 
that out. And they get the best deal in America. It kind of 
bothers me, the attitude of the public, not knowing that this 
is the best gift they have got since we started buying F-16's 
to defend them.
    Mr. Jones. Mr. Chairman, we wrestle with those same kinds 
of, ``How could they not be buying into this?'' And there is a 
certain segment of the population--I am speaking for California 
and not for the United States--that clearly believes because it 
is public lands that they should be used. They already paid for 
it once, they don't want to continue to pay for it, and they 
aren't willing to recognize that it costs money to maintain 
facilities, maintain roads, maintain rest rooms, all the 
behind-the-scenes stuff that it takes to keep a park going.
    Mr. Hansen. Mr. Jones, where did they pay for it once? You 
mean in their income tax?
    Mr. Jones. Well, they rationalize I think in the 
acquisition and------
    Mr. Hansen. The taxes they paid through other means. They 
feel, ``Yes, I have already paid for this, and the legislature 
should be smart enough to take care of it''?
    Mr. Jones. But I do believe that that is actually a small 
percentage of our users. I think, by and large, again, the 
users in California that can make a simple connection to the 
value that they are getting by using their parks really don't 
have any problem with them, and our survey demonstrates that.
    I think there is another segment of the population, the 
naysayers, that don't want any fees, that tend to promote scare 
tactics of commercialization and sponsorships and all those 
kinds of things as tools to not increase fees or not have any 
fees. And we are always sometimes frustrated by that because 
the banner argument sometimes stand in the way of doing 
something reasonable like a reasonable increase to an annual 
pass or something of that nature.
    But there is a balancing act, and I think one of the 
greatest challenges for both the Feds and States like 
California is finding the framework that the decisionmakers 
have to make as public policy decisions and delegations to the 
respective departments that carry these out. And in a way, that 
does take care of the little, tiny battlefield in Kentucky 
versus the Yellowstone.
    It is very difficult to set policy from the top, and that 
applies to the California legislature or anywhere else. And 
that is a real challenge for public agencies that manage these 
important lands.
    Mr. Hansen. You probably heard those bells, and back there 
are two lights on which means we have a vote on. I have 
questions for both Mr. Leal and some more for you, Mr. Jones. I 
am going to ask you--here are a series of questions. Could I 
ask you to write to Dan here and me and give us a copy of your 
answers? We would be very curious as to how you would respond 
to these. If you would give us that courtesy, we would really 
appreciate it.
    I want to recognize Mr. Hill from Montana, and then we are 
going to adjourn this because we have got a vote on, and I 
don't want to keep you here if we come back for two questions. 
The gentleman from Montana.
    Mr. Hill. Thank you, Mr. Chairman, and I apologize for 
being late. And I do have a statement. If I could have that 
entered into the record?
    Mr. Hansen. Without objection, so ordered.
    [Statement of Mr. Hill follows:]

  Statement of Hon. Rick Hill, a Representative in Congress from the 
                            State of Montana

    Thank you, Mr. Chairman, for holding this important 
oversight hearing.
    I am pleased to join my colleagues in welcoming our 
distinguished witnesses. I want to particularly thank Don Leal 
of Bozeman, Montana for traveling at great lengths to present 
his research on 27 State park systems.
    Mr. Chairman, the subject we will be discussing today is an 
important one for the long-term health of our National Park 
System and the people who want to enjoy it. For too long, our 
national parks have faced enormous and unhealthy financial 
backlogs in operations and maintenance, construction and land 
acquisition. In Yellowstone National Park, for example, visitor 
facilities are in a state of serious disrepair, compromising 
our environment and visitor enjoyment of one of our national 
treasures.
    Congress passed a Fee Demonstration program last year which 
is helping certain parks fill their financial needs. However, 
this is not the only answer, nor are unlimited amounts of 
taxpayer's dollars appropriated by Congress.
    Washington doesn't have all the answers to help funding 
disparities in our parks and that's why we are here to listen 
to experts who have devoted themselves to finding ways to 
address these problems on a State level. I look forward to 
hearing from them on this important discussion.
    Mr. Chairman, I again commend you on your leadership on 
protecting our national park system.

    Mr. Hill. I am just going to ask one question at this 
point. First I want to thank Mr. Leal for being here from 
Montana. You have a very outstanding organization that you are 
part of that is constantly thinking about natural resource 
issues and public land management and how we can be more 
efficient and more effective in how we do that. I want to 
welcome you here, and I want to thank you for being here.
    We have two outstanding, wonderful parks--Glacier Park and 
Yellowstone Park that border Montana. But one of the things 
that it seems to me and it concerns me is the gateway 
communities. One of the important things I think in helping 
enhance the experience of parks and attracting people to 
experience the parks is how gateway communities broaden the 
scope of services that can be offered to the people.
    And we have had a lot of controversy, and I guess I would 
ask both of you to respond to this. Where there is greater 
cooperation with the park managers and the businesses in those 
gateway communities, do we have more successful parks?
    Mr. Leal. I think from my observation I can use State parks 
as an example. I think in Montana one of the most successful 
State park units is the Lewis and Clark Caverns, which, by the 
way, it cost $260,000 to operate, and it generates $350,000. 
People pay $7 each, children free, to enter that system. And it 
is not far away from Three Forks, Montana. Some of the local 
restaurants and that, they do benefit from the operation of 
that well-run operation of the Lewis and Clark Cavern.
    At the national level we have not had a lot of cooperation. 
It was an interesting thing when Superintendent Mike Findley 
from Yellowstone Park urged the local businesses around the 
gateway communities, ``Don't promote Yellowstone Park because 
we don't have the money to operate it.'' That didn't go over 
too well, naturally, with the local businesses.
    When Superintendent Findley said he was going to close down 
Norris Campground and the two museums in an effort to save 
$70,000, despite the fact that the campgrounds have generated 
$114,000 is another example of conflict between local 
businesses in the gateway communities and what goes on in the 
park itself.
    I think if we do have more self-sufficient park units and 
that, you will see more cooperation with the gateway businesses 
and that. In fact, you will probably see a lot more 
cooperation.
    Mr. Hill. How about in California? Do the managers of the 
park work in a real cooperative fashion with the gateway 
communities?
    Mr. Jones. Yes. And we have several examples of that. I 
would like to give you two real briefly. First of all, to 
answer your basic question, yes, where there is greater 
cooperation, and that translates many ways, but improved 
communication, for one, we have much greater success, and the 
public gets a better shot, a better experience for that two or 
3 day, or whatever it is, venture.
    The whole Yosemite and an organization that is a pilot 
program in California acronymed YADI deals with gateway 
community and its relationship to national parks. And the only 
reason I happen to know about that is we have a forum in 
California that is an ad hoc group--that is the California 
Round Table on Recreation, Parks, and Tourism. And it wrestles 
with these very kind of issues that you are talking about.
    We have only been in existence for 1 year, but we have 
already made great strides in moving, branching much further 
out than just what we have as an expectation of one of our 
superintendents, for example. We are able to use that forum to 
combine all kinds of regional planning. The Tahoe Basin is a 
phenomenal example of the kind of thing I think you are talking 
about.
    The biggest potential tension points I feel are where you 
have those high resource-value parks, and there are carrying 
capacities and limitations during peak periods. And everybody 
wants to make hay when the sun shines, and there has got to be 
a balance there. But if you don't have communication and the 
forum in place to deal and wrestle and explain and rationalize 
and compromise, it doesn't work very effectively, and everybody 
stays angry with everyone.
    Mr. Hill. Thank you, Mr. Jones. Thank you, Mr. Leal.
    Mr. Hansen. We thank our witnesses for excellent testimony; 
appreciate you taking the time to be here. And we will look 
forward to the response to some of our additional questions. I 
see in the audience Dr. Randy Simmons from Utah State 
University, a great resource to this committee, and I was 
tempted to pull you up, Randy, and ask you a few questions, but 
we are running out of time.
    Thank you so very much for your time. We will look forward 
to using you as a resource if you don't mind because we surely 
realize that most of the questions come or good answers don't 
necessarily come from Washington, contrary to popular belief. 
And this committee now will adjourn. Thank you.
    [Whereupon, at 10:55 a.m., the Subcommittee was adjourned.]

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