[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                        H.R. 1461 and H.R. 1491
=======================================================================

                          LEGISLATIVE HEARING

                               before the

      SUBCOMMITTEE ON NATIONAL PARKS, RECREATION, AND PUBLIC LANDS

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              June 7, 2001
                               __________

                           Serial No. 107-34
                               __________

           Printed for the use of the Committee on Resources








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                         COMMITTEE ON RESOURCES

                    JAMES V. HANSEN, Utah, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,                       George Miller, California
  Vice Chairman                          Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana         Dale E. Kildee, Michigan
Jim Saxton, New Jersey                   Peter A. DeFazio, Oregon
Elton Gallegly, California               Eni F.H. Faleomavaega, American Samoa
John J. Duncan, Jr., Tennessee           Neil Abercrombie, Hawaii
Joel Hefley, Colorado                    Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland             Frank Pallone, Jr., New Jersey
Ken Calvert, California                  Calvin M. Dooley, California
Scott McInnis, Colorado                  Robert A. Underwood, Guam
Richard W. Pombo, California             Adam Smith, Washington
Barbara Cubin, Wyoming                   Donna M. Christensen, Virgin Islands
George Radanovich, California            Ron Kind, Wisconsin
Walter B. Jones, Jr., North Carolina     Jay Inslee, Washington
Mac Thornberry, Texas                    Grace F. Napolitano, California
Chris Cannon, Utah                       Tom Udall, New Mexico
John E. Peterson, Pennsylvania           Mark Udall, Colorado
Bob Schaffer, Colorado                   Rush D. Holt, New Jersey
Jim Gibbons, Nevada                      James P. McGovern, Massachusetts
Mark E. Souder, Indiana                  Anibal Acevedo-Vila, Puerto Rico
Greg Walden, Oregon                      Hilda L. Solis, California
Michael K. Simpson, Idaho                Brad Carson, Oklahoma
Thomas G. Tancredo, Colorado             Betty McCollum, Minnesota
J.D. Hayworth, Arizona                   
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana

                   Allen D. Freemyer, Chief of Staff
                      Lisa Pittman, Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
                  Jeff Petrich, Democrat Chief Counsel
                                 ------                                

      SUBCOMMITTEE ON NATIONAL PARKS, RECREATION, AND PUBLIC LANDS

                    JOEL HEFLEY, Colorado, Chairman
      DONNA M. CHRISTENSEN, Virgin Islands Ranking Democrat Member

Elton Gallegly, California              Dale E. Kildee, Michigan
John J. Duncan, Jr., Tennessee          Eni F.H. Faleomavaega, American Samoa
Wayne T. Gilchrest, Maryland            Frank Pallone, Jr., New Jersey
George Radanovich, California           Tom Udall, New Mexico
Walter B. Jones, Jr., North Carolina,   Mark Udall, Colorado
  Vice Chairman                         Rush D. Holt, New Jersey
Mac Thornberry, Texas                   James P. McGovern, Massachusetts
Chris Cannon, Utah                      Anibal Acevedo-Vila, Puerto Rico
Bob Schaffer, Colorado                  Hilda L. Solis, California
Jim Gibbons, Nevada                     Betty McCollum, Minnesota
Mark E. Souder, Indiana
Michael K. Simpson, Idaho
Thomas G. Tancredo, Colorado














                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on Thursday, June 7, 2001...........................     1

Statement of Members:
    Bennett, Hon. Robert F., a U.S. Senator from the State of 
      Utah, Prepared statement on H.R. 1491......................     5
    Cannon, Hon. Chris, a Representative in Congress from the 
      State of Utah, Prepared statement on H.R. 1491.............     6
    Christensen, Hon. Donna M., a Delegate in Congress from the 
      Virgin Islands.............................................     4
    Hansen, Hon. James V., a Representative in Congress from the 
      State of Utah..............................................     3
        Prepared statement on H.R. 1491..........................     4
    Hefley, Hon. Joel, a Representative in Congress from the 
      State of Colorado..........................................     1
        Prepared statement on H.R. 1461 and H.R. 1491............     2
    Matheson, Hon. Jim, a Representative in Congress from the 
      State of Utah..............................................     7
        Prepared statement on H.R. 1491..........................     9
    McGovern, Hon. James P., a Representative in Congress from 
      the State of Massachusetts, Prepared statement on H.R. 1461     6

Statement of Witnesses:
    Machen, J. Bernard, President, University of Utah, Salt Lake 
      City, Utah.................................................    24
        Prepared statement on H.R. 1491..........................    25
    Mastromarco, Dan R., Executive Director, Travel Council for 
      Fair Competition, Alexandria, Virginia.....................    37
        Prepared statement on H.R. 1461..........................    39
    Ring, Richard G., Associate Director, Park Operations and 
      Education, National Park Service, Washington, D.C..........    11
        Prepared statement on H.R. 1461..........................    12
        Prepared statement on H.R. 1491..........................    13
    Simon, Dave, Director of Outdoor Activities, Sierra Club, San 
      Francisco, California......................................    33
        Prepared statement on H.R. 1461..........................    34

Additional materials supplied:
    Coughlin, Cris, President, Glacier Wilderness Guides, Inc., 
      Statement submitted for the record.........................    56
    Jackson, Stefan J., Public Policy Manager (Acting), National 
      Outdoor Leadership School, Lander, Wyoming, Statement 
      submitted for the record...................................    57
    Jenkins, David, Director of Conservation and Public Policy, 
      American Canoe Association, Statement submitted for the 
      record.....................................................    59






 LEGISLATIVE HEARING ON H.R. 1461, TO AMEND THE NATIONAL PARKS OMNIBUS 
     MANAGEMENT ACT OF 1998 TO REMOVE THE EXEMPTION FOR NONPROFIT 
     ORGANIZATIONS FROM THE GENERAL REQUIREMENT TO OBTAIN COMMERCIAL USE 
     AUTHORIZATIONS; AND H.R. 1491, TO ASSIST IN THE PRESERVATION OF 
     ARCHAEOLOGICAL, PALEONTOLOGICAL, ZOOLOGICAL, GEOLOGICAL, AND BOTANICAL 
     ARTIFACTS THROUGH CONSTRUCTION OF A NEW FACILITY FOR THE UNIVERSITY OF 
     UTAH MUSEUM OF NATURAL HISTORY, SALT LAKE CITY, UTAH.

                              ----------                              


                         Thursday, June 7, 2001

                     U.S. House of Representatives

      Subcommittee on National Parks, Recreation, and Public Lands

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 1334, Longworth House Office Building, Hon. Joel Hefley 
[Chairman of the Subcommittee] presiding.

  STATEMENT OF THE HONORABLE JOEL HEFLEY, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. Hefley. The Committee will come to order. Welcome to 
the hearing today this morning. The Subcommittee on Parks, 
Recreation, and Public Lands will hear testimony on two bills, 
H.R. 1461 and H.R. 1491.
    H.R. 1461, which I introduced, would amend the National 
Parks Omnibus Management Act of 1998 to remove the exemption 
for certain nonprofit organizations from the general 
requirement to obtain commercial use authorizations. Under the 
current law, tax-exempt organizations that offer tour and 
travel services to the general public are exempt from the 
requirement to obtain commercial use authorization from the 
Park Service to lead tour groups for rafting, hiking, and other 
commercial recreational activities. We are aware that the 
minority has expressed some concerns over certain provisions in 
the bill, but we are hopeful that we can work together to 
resolve any differences. It is not my intent to remove the 
exemption from a legitimate nonprofit organization such as the 
Boy Scouts or Scouts, and I will make sure that I address their 
concerns.
    Mr. Hefley. H.R. 1491 was introduced by Congressman Jim 
Matheson of Utah. This bill would direct the Secretary of 
Interior to make a grant to the University of Utah in Salt Lake 
City, Utah to pay the Federal share of the costs of 
construction for a new natural history museum, including the 
design, planning, furnishing, and equipping of the new 
building. The museum holds more than 1 million objects and 
specimens recovered from Federal, State, and private lands in 
Utah and surrounding states. The museum is known for its 
extensively archaeological and paleontological collections.
    Mr. Hefley. At this time I would like to ask unanimous 
consent that Congressman Matheson be permitted to sit on the 
dais following his statement. Without objection, so ordered.
    I would like to thank all the witnesses who will testify on 
these bills today. And I think first of all what I will do is 
turn to Chairman Hansen and let's see if he has an opening 
statement.
    [The prepared statement of Mr. Hefley follows:]

   Statement of The Honorable Joel Hefley, Chairman, Subcommittee on 
              National Parks, Recreation, and Public Lands

    Good morning and welcome to the hearing today. This morning, the 
Subcommittee on National Parks, Recreation and Public Lands will hear 
testimony on two bills--H.R. 1461 and H.R. 1491.
    H.R. 1461, which I introduced, would amend the National Parks 
Omnibus Management Act of 1998 to remove the exemption for certain 
nonprofit organizations from the general requirement to obtain 
commercial use authorizations. Under the current law, tax-exempt 
organizations that offer tour and travel services to the general public 
are exempt from the requirement to obtain commercial use authorization 
from the Park Service to lead tour groups for rafting, hiking and other 
commercial recreational activities. We are aware that the minority has 
expressed some concerns over certain provisions in the bill but we are 
hopeful that we can work together to resolve any differences. It is not 
my intent to remove the exemption for legitimate non-profit 
organizations such as the Boy Scouts or the Girl Scouts, and I will 
make sure that I address their concerns.
    H.R. 1491 was introduced by Congressman Jim Matheson of Utah. This 
bill would direct the Secretary of Interior to make a grant to the 
University of Utah in Salt Lake City, Utah, to pay the Federal share of 
the costs of construction for a new natural history museum, including 
the design, planning, furnishing, and equipping of the new building. 
The museum holds more than one million objects and specimens recovered 
from Federal, state and private lands in Utah and surrounding states. 
The museum is known for its extensive archaeological and 
paleontological collections.
    At this time, I would like to ask unanimous consent that 
Congressman Matheson be permitted to sit on the dais following his 
statement. Without objection, so ordered.
    I would also ask the Ranking Member, Ms. Christian, if it would be 
alright with her if Chairman Hansen made his opening statement first. 
Without objection, so ordered.
    I would like to thank all of our witnesses for being here today to 
testify on these bills and now turn to Chairman Hansen.
                                 ______
                                 

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

    Mr. Hansen. Well, thank you, Mr. Chairman. I appreciate the 
opportunity for being in the Committee today and I do have an 
opening statement that I would like to read. I want to welcome 
President Bernie Machen, president of my alma mater, University 
of Utah, to this Subcommittee. I am pleased to welcome Mr. 
Matheson, my colleague from the Second Congressional District 
and commend him for recognizing the need for this legislation.
    Many reasons to come to Utah are the parks, forests, public 
lands, the abundant outdoor recreational and cultural 
opportunities, and our history is well worth the trip for 
anyone who has not been to the ``beehive State.'' However, 
there is one thing that the State of Utah is sorely lacking in, 
a museum which showcases our incredible natural history.
    I congratulate Representative Matheson and Senator Bennett 
for recognizing the need to assist the community in relocating 
the museum from its current and unsatisfactory location to its 
new building. With 69 percent of the State managed by Federal 
agencies, many of the artifacts recovered from Federal lands 
are currently archived and protected in the Museum of Natural 
History. In the past, a Federal agency such as the Bureau of 
Reclamation or Forest Service recovered artifacts on public 
lands. They would be sent to the collections at the University 
of Utah which is the Federal repository.
    Archeological sites such as those found in Glen Canyon were 
the previous homes for many of the items found in this 
collection. In fact, the museum is now currently home to more 
than 1 million artifacts, almost 75 percent of which were found 
on Federal lands. The University of Utah has done a commendable 
job preserving these priceless natural treasures, but they can 
only do so much with the outdated facilities at their disposal. 
The George Thomas Building was a fine library in its day. I 
spent hundreds of hours in that place, but it is really an 
unsuitable home for the collection we are talking about.
    Given the facts of such an extensive collection that comes 
from the Federal lands, it only makes sense that the Federal 
Government should assume some responsibility for providing for 
these artifacts in an appropriate home. Such Federal 
involvement is not unheard of. Many museums receive Federal 
funds, including the New York Public Library, the Chicago 
Museum of Science and Industry, and the list goes on and on.
    Although I might point out to my colleagues this 
legislation authorizes $15 million, which is only 25 percent of 
the cost of the new facility, with the 3-to-1 match the Federal 
Government is as much a beneficiary as the State and community.
    Mr. Matheson represents the interests of the constituency 
well by introducing this legislation to ensure that this unique 
collection is protected and well preserved. He has made it a 
priority to be sure their final home is a place worthy of their 
true value. I feel he is to be commended for that and that is 
why I want to join him in this effort. I hope all members of 
this Subcommittee will do the same thing. I thank you for 
allowing us to have this hearing today and I appreciate the 
opportunity for giving this opening statement.
    Mr. Hefley. Thank you, Mr. Hansen.
    [The prepared statement of Chairman Hansen follows:]

  Statement of The Honorable James V. Hansen, Chairman, Committee on 
                        Resources, on H.R. 1491

    Thank you, Chairman Hefley, for holding this hearing today. I want 
to welcome President Bernie Machen, President of my alma mater, the 
University of Utah to the Subcommittee. I am pleased to welcome Mr. 
Matheson, my colleague from the Second Congressional District and 
commend him for recognizing the need for this legislation.
    There are many reasons to come to Utah. Our parks, forests and 
public lands, the abundant outdoor recreational and cultural 
opportunities and our history is well worth the trip for anyone who is 
not from the Beehive state. However, there is one thing that the State 
of Utah is sorely lacking--a destination museum which showcases our 
incredible natural history. I congratulate Congressman Matheson and 
Senator Bennett for recognizing the need to assist the community in 
relocating the museum from its current and unsatisfactory location to a 
new building.
    With 69 percent of the State managed by Federal agencies, many of 
the artifacts recovered from Federal lands are currently archived and 
protected at the Museum of Natural History. In the past, as Federal 
agencies such as the Bureau of Reclamation, BLM, or Forest Service, 
recovered artifacts on public lands, they would be sent to the 
collections at the University of Utah, which is a Federal repository. 
Archaeological sites such as those found in Glen Canyon were the 
previous homes for many of the items in this collection. In fact, the 
Museum now currently home to more than one million artifacts, almost 75 
percent of which were found on Federal lands.
    The University of Utah has done a commendable job at preserving 
these priceless natural treasures, but they can only do so much with 
the outdated facilities which they have at their disposal. The George 
Thomas Building was a fine library in its day, but it is really an 
unsuitable home for the collection we are talking about.
    Given the fact that such an extensive collection has come from the 
Federal lands, it only makes sense that the Federal Government should 
assume some responsibility for providing these artifacts an appropriate 
home. Such Federal involvement is not unheard of; many museums receive 
Federal funds, including New York Public Library, the Chicago Museum of 
Science and Industry, and so on. Although I might point out to my 
colleagues that this legislation authorizes $15 million which is only 
25 percent of the cost for the new facility. With a 3-to-1 match, the 
Federal Government is as much a beneficiary as the state and the 
community.
    Mr. Matheson, represents the interest of his constituents well by 
introducing legislation to assure that this unique collection is 
protected and well preserved. He has made it a priority to assure that 
their final home will be a place worthy of their true value. I feel he 
is to be commended for that, and it is why I want to join him in that 
effort, and hope that all the members of the Subcommittee will do the 
same.
    Thank you Chairman Hefley for holding this hearing.
                                 ______
                                 
    Mr. Hefley. Mrs. Christensen, I think you were awed by the 
honor we have of having Mr. Hansen join our Committee here too, 
so I went ahead to him first and now I will turn to you.

STATEMENT OF THE HONORABLE DONNA M. CHRISTENSEN, A DELEGATE IN 
                CONGRESS FROM THE VIRGIN ISLANDS

    Mrs. Christensen. Thank you very much. It is nice to have 
our Chairman here with us today. I would like to make a 
statement on the two measures before us this morning. The first 
measure, H.R. 1461, would repeal the omnibus act of 1998 that 
exempts nonprofit groups from the requirement to obtain a 
commercial use authorization from the National Park Service 
unless taxable income is derived from the park use. This 
exemption was added to the legislation by the Resources 
Committee in 1998 and was supported at that time by the 
Majority and Minority alike.
    Since then, no one has contacted the Minority to express a 
concern with this exemption and the administration's testimony 
today does not recognize the exemption as being a problem for 
either the resources of our park or their management. Many not-
for-profit organizations such as the Boy Scouts, church camps, 
and outdoor clubs such as the Sierra Club take their members on 
outings to national parks, providing their own guide services 
and charging fees to cover their costs. This alone does not 
make them commercial operations, and there is language in the 
exemption to deal with any use that generates taxable income.
    Further, these not-for-profit organizations are not 
permitted unregulated use of our national parks. While they are 
exempt from obtaining a commercial use authorization, they are 
still required to obtain any other necessary National Park 
Service permits and comply with any regulations that the NPS 
may have to protect park resources.
    Mr. Chairman, nonprofit organization like the Scouts and 
others are different than for-profit entities and should be 
treated as such. We have seen no evidence thus far indicating 
any need for the change proposed by H.R. 1461.
    The second measure, H.R. 1491, directs the Secretary of the 
Interior to make a grant to the University of Utah to pay what 
the bill refers to as the Federal share of the cost to 
construct an expansion of the university's Museum of Natural 
History. The bill requires the museum to submit a formal grant 
proposal to the Secretary and limits the Federal share to 25 
percent of the total cost of the project.
    Finally, H.R. 1491 authorizes $15 million for the purposes 
of this legislation. Mr. Chairman, pass-through grants like 
this have been a matter of ongoing concern within our 
Committee. The legislation would require the Secretary to award 
these funds to the University outside of any existing grant 
programs designed to fund museums, allowing this project to 
avoid a competitive grant process.
    We look forward to learning more about the need for both of 
these pieces of legislation from the witnesses before us today. 
And I would also like to welcome my other colleague. Thank you.
    [The prepared statement of Senator Bennett follows:]

 Statement of The Honorable Robert F. Bennett, a U.S. Senator from the 
                      State of Utah, on H.R. 1491

    I thank Representative Hefley and the Subcommittee on National 
Parks, Recreation, and Public Lands for holding today's hearing on the 
Utah Public Lands Artifact Preservation Act. I appreciate the House of 
Representatives moving forward with this important legislation. The 
Senate will begin its work on this legislation shortly. Additionally, I 
welcome the support of Representatives Cannon, Hansen, and Matheson on 
this bill which will help Utah protect and preserve its natural history 
and cultural heritage.
    S.139 and its House companion, H.R. 1491, are rather simple pieces 
of legislation that will go a long way to preserve and protect almost 
one million artifacts, which showcase the natural and cultural 
significance of Utah's public lands. When this bill becomes law, the 
Secretary of the Interior will be directed to make available to the 
University of Utah Museum of Natural History a grant in the amount of 
$15 million for the construction and other associated costs of a new 
facility that will allow for the proper curation of the scientifically 
significant Federal collection. It should be noted that the Federal 
share of this project will not exceed 25% of the total project costs. 
The success of the new museum relies on the support of private 
individuals and interested foundations. One of the most fulfilling 
aspects of this project has been the impressive and generous financial 
support from Utah's citizens and foundations. Since I announced my 
intentions to introduce and pass this legislation last fall, the museum 
has already received a $10 million gift from the Emma Eccles Jones 
foundation. Furthermore, it is my understanding that another $10 
million from a different foundation is very close to being given to the 
museum, pending progress in the Congress.
    As you may know, Utah is almost two-thirds Federally managed. 
Almost every agency within the Department of the Interior has a land 
interest in Utah. I strongly believe that this museum will not only 
benefit the people of the Intermountain region and scientific 
researchers, but will also benefit the public land management agencies. 
This museum will help its visitors understand the significance of 
Utah's public lands. Utah's public lands are not only mountains, 
basins, mesas, and canyons, they were once roamed by dinosaurs and home 
to thriving ancient cultures. It is my hope that a visit to the new 
museum will enhance the public's future visits to our National Parks, 
BLM lands, and BuRec dams and lakes.
    Again, I appreciate the efforts of Representative Hefley, the 
members of Utah's delegation, and the Committee on Resources on this 
legislation. I look forward to working with them so that we may pass 
this legislation this year.
                                 ______
                                 
    [The prepared statement of Mr. Cannon follows:]

 Statement of The Honorable Chris Cannon, a Representative in Congress 
                         from the State of Utah

    Thank you Mr. Chairman for holding this hearing today. I also thank 
Congressman Matheson for introducing the Utah Public Lands Artifact 
Preservation Act of 2001. This legislation will enable the Museum of 
Natural History at the University of Utah to construct a new facility.
    As any of you have visited Utah know, the variety and abundance of 
natural resources is stunning. From Dinosaur National Monument with its 
dinosaur quarry to Grand Gulch with its high concentration of 
archaeological sites, Utah is a historian's paradise. Aside from 
dinosaur relics, we also boast an incredible variety of plant and 
animal life.
    With such a high proportion of Federal ownership of our land, it is 
crucial that we preserve the artifacts that are recovered. This 
legislation allows the Federal Government to leverage state and private 
money to protect Federally owned artifacts. Preservation efforts will 
ensure that future generations of Utahns will enjoy the rich ancient 
history Utah has to offer. I look forward to hearing the testimony of 
the witnesses.
                                 ______
                                 
    [The prepared statement of Mr. McGovern follows:]

   Statement of The Honorable James P. McGovern, a Representative in 
                Congress from the State of Massachusetts

    I would like to thank the distinguished Chairman, Mr. Hefley for 
holding today's hearing on amendments to the National Parks Omnibus 
Management Act of 1998.
    I would also like to thank the distinguished panelists for being 
here today. I look forward to hearing your testimony.
    There are a number of reasons that I am opposed to H.R. 1461. I 
believe an attempt to amend the Act in this manner is unfair for both 
nonprofit groups and for profit organizations, alike. If this amendment 
passes, small groups will be forced to compete with larger more 
profitable institutions for Commercial Use Authorizations permits 
(CUAs). If every organization is forced to file for a CUA permit, the 
cost of trips, clean-ups, scientific and leisure expeditions will 
increase. This amendment sends a signal to nonprofit organizations that 
we do not trust them and that we do not appreciate their work in our 
national parks. I believe that these nonprofit organizations deserve a 
lot of appreciation and respect for their dedication to our 
environment. I will oppose any legislation that forces them to cut 
their programs.
    If this amendment passes, the additional cost of a CUA permit will 
hinder activity in the national parks. There are many organizations 
that partake in events in the National Parks. If they are required to 
obtain a CUA permit, these organizations might not organize as many 
events as they usually do because of the increased cost.
    We should realize that many of the events sponsored by nonprofits 
are not just leisurely strolls through the woods. They provide a great 
service for the United States by giving many people the opportunity to 
see the beauty and splendor of our National Parks. A majority of the 
events that nonprofits organize in the National Parks are for the 
purpose of promoting awareness. Nonprofits usually have to supplement 
the cost of these trips from other sources. Many organizations also run 
service trips in the National Parks. Service trips help build and 
repair trails, plant new trees, and maintain the parks. Without the 
assistance of these organizations, our National Parks would fall into 
disrepair. If organizations are required to spend additional funds to 
obtain a permit and hire a guide, they will not be able to provide as 
many trips as they currently do. The entire country will suffer if we 
make it more difficult for these organizations to provide our National 
Parks with the support that they need and deserve.
    Lastly, I would like to stress that the Administration is against 
this legislation. It will prevent smaller organizations from being able 
to compete against other larger organizations. The additional revenue 
from the fees that the nonprofit organization will have to pay in order 
to file to receive a CUA is overshadowed by the additional 
administrative cost that would be required to read the applications and 
issue the permits. If this amendment passes, the National Parks will 
actually lose money because the Park Service will be forced to pick up 
where organizations left off.
    Thank you, Mr. Chairman, and I request that my statement be 
included in the record of this hearing.
                                 ______
                                 
    Mr. Hefley. Okay. Our first panel will start with 
Congressman Matheson. I hope you appreciate, Congressman, the 
rapidity with which we are getting to your bill and I hope that 
it in no way reflects the fact that the gentleman sitting to my 
right is Chairman of the Committee. It is simply that my right 
arm has been twisted so hard by him, as it has on so many other 
occasions, that we welcome you today with your wonderful piece 
of legislation. So would you go ahead and take the time to read 
it?

 STATEMENT OF THE HONORABLE JIM MATHESON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. Matheson. Thank you very much. I will leave comments 
about your right arm so you can discuss that with Mr. Hansen.
    But, Chairman Hefley and Ranking Member Mrs. Christensen, I 
just want to thank you for having this hearing today. It is 
important. It is not only important to the people of Utah, it 
is also important to our shared national heritage. And I want 
to give special thanks to Chairman Hansen and Congressman 
Cannon and to their staffs for their steadfast support on this 
project. Today's hearing is really a culmination of our 
collective efforts as a delegation from Utah.
    In 1824, a philanthropist named James Smithson bequeathed 
his fortune to the Government of the United states in order to 
found an institution to, and I quote, increase the diffusion of 
knowledge among men.
    In 1846, the United States established the Smithsonian 
Institution and established the wise and remarkable precedent 
of the value of public investment into institutions of science, 
research, and heritage.
    President Machen and I have come here today as part of this 
precedent. Mr. Chairman, in Utah we have an institution that 
houses 1 billion years of the history of life on our planet. It 
is an institution that hold three-quarters of a million 
artifacts, detailing tens of thousands of years of Native 
American life throughout the Rocky Mountain and Great Basin 
areas of our Nation. It contains over 30,000 specimens of 
mammals, one of the 30 largest collections in the Western 
Hemisphere and its 18,000 specimen reptile collection contains 
one of the largest turtle assemblages in the world.
    It is an institution that houses one of the world's great 
paleontology collections. Its 12,000 specimen vertebrate fossil 
collection is dominated by 150-million-year-old dinosaurs from 
the Jurassic period, as well as Ice Age mammals such as giant 
bears, mammoths and mastodons.
    What I have just described is just a fraction of the 
resources provided by the University of Utah's Natural History 
Museum. It is a source for archaeological, anthropological, and 
paleontology treasures unsurpassed in the western United 
States.
    However, these resources are under threat. First, they are 
housed in a converted library built in the 1930's. It is a 
building constructed for the close, claustrophobic stacking of 
books, not for the storage of national treasures. Most of the 
ceilings throughout the building are 7 feet 2 inches high, 
which, as you can imagine, makes dinosaur storage somewhat of a 
problem. Climate control and water systems are woefully 
antiquated. The humidity and temperature in the display and 
storage areas has wide swings. This inconsistency puts 
tremendous strain on the increasingly fragile collections.
    A few weeks ago I took a tour of the museum, and halfway 
through the tour we encountered a chunk of ceiling that had 
falling during a water leak that had occurred within the last 
couple of days. As with many Depression era buildings, there 
are numerous structural deficiencies that put the collections 
as risk and inhibit access to the public. Fire protection 
systems are inadequate, an outdated HVAC system, no possibility 
for expansion, and no freight elevator loading dock.
    All of these are compounded by the fact that the collection 
now sits 400 yards away from the second most active fault in 
the Continental United States in a building with beams built to 
hold books rather than mastodons.
    It is plausible to think that our kids' Pokemon cards might 
be at less risk for damage than some of the pieces of this 
collection.
    The University, along with private donors and the State 
government, have embarked on an ambitious project to build a 
new museum that would be a centerpiece for cultural and 
scientific education in the intermountain West. They have 
selected a site for the new building that would be located at 
the University's Research Park and will be adjacent to the city 
zoo, a living history heritage park, and the State arboretum. 
The University has just completed its preprogram study of the 
site as well as determining the project costs. This project 
will be a partnership in every sense of the word. State and 
private donors have promised to match every Federal dollar with 
three of their own. The University's donors and alumni network 
view this as a priority project for Utah and are actively 
engaged in its development.
    The University has already contributed the 14 acres for the 
development. The State has guaranteed the operating funds for 
the facility at $800,000 annually. To date, close to $12 
million has been raised from private donors and this includes 
$10 million from the Emma Eccles Jones Foundation.
    Unlike many museums throughout the country, about 75 
percent of the museum's holdings are owned outright by the 
Federal Government, with more than 90 percent of some 
collections coming from Federal lands. That means that these 
artifacts, fossils, and specimens belong to the people of the 
United States. These exhibits and collections are part of our 
collective national heritage. I hope with your help we can save 
these treasures for future generations of Americans. And I 
appreciate your time.
    Mr. Hefley. Thank you, Congressman.
    [The prepared statement of Mr. Matheson follows:]

 Statement of The Honorable Jim Matheson, A Representative in Congress 
                         from the State of Utah

    Chairman Hefley, Ranking Member Christensen, I want to thank you 
for having this hearing today. It is important, not only to the people 
of Utah, but also to our shared national heritage.
    I want to give special thanks to Chairman Hansen and Congressman 
Cannon and their staffs for their steadfast support of this project, 
and today's hearing is a culmination of our collective efforts as a 
delegation.
    In 1824, a philanthropist named James Smithson bequeathed his 
fortune to the government of the United States in order to found an 
Institution to, and I quote, ``increase the diffusion of knowledge 
among men.
    In 1846 the United States established the Smithsonian Institution, 
and established the wise and remarkable precedent of the value of 
public investment into institutions of science, research, and heritage.
    President Machen and I have come here today as part of this 
precedent.
    Mr. Chairman, in Utah we have an institution that houses one 
billion years of the history of life on our planet. It is an 
institution that holds three-quarters of a million artifacts detailing 
tens of thousands of years of Native American life throughout the Rocky 
Mountain and Great Basin areas of our nation.
    It contains over 30,000 specimens of mammals, one of the thirty 
largest collections in the western hemisphere, and its 18,000 specimen 
reptile collection contains one of the largest turtle assemblages in 
the world.
    It is an institution that houses one of the world's great 
paleontology collections. It's 12,000 specimen vertebrate fossil 
collection is dominated by 150 million year old dinosaurs from the 
Jurassic period, as well as Ice Age mammals such as giant bears, 
mammoths and mastodons.
    What I have just described is just a fraction of the resources 
provided by the University of Utah's Natural History museum. It is a 
source of archaeological, anthropological, and paleontology treasures 
unsurpassed in the Western United States.
    However, these resources are under threat. First, they are housed 
in a converted library built during the 1930s. It is a building 
constructed for the close, claustrophobic stacking of books not for the 
storage of national treasures.
    Most of the ceilings throughout the building are seven feet two 
inches high. Which, as you can imagine, makes dinosaur storage somewhat 
of a problem.
    Climate control and water systems are woefully antiquated. The 
humidity and temperature in the display and storage areas has wide 
swings. This inconsistency puts tremendous strain on the increasingly 
fragile collections.
    A few weeks ago, I took a tour of the museum. Halfway through the 
tour a chunk of ceiling fell and crashed at my feet. Never have I been 
so serendipitously hit in the head by a chunk of plaster.
    As with many Depression Era buildings there are numerous structural 
deficiencies that put the collections at risk and inhibit access to the 
public. Fire protection systems are inadequate and antiquated, an 
outdated HVAC system, no possibility for expansion, and no freight 
elevator or loading dock.
    All of these are compounded by the fact that the collection now 
sits 400 yards away from the second most active fault in the 
continental United States in a building with beams built to hold books 
rather than mastodons.
    It's plausible to think that our kid's Pokemon cards might be at 
less risk for damage than some of the pieces in this collection.
    The University along with private donors and the state government 
have embarked on an ambitious project to build a new museum that would 
be a centerpiece for cultural and scientific education in the 
Intermountain West.
    They have selected a site for the new building that will be located 
in the University's Research Park, and will be adjacent to the City's 
zoo, a living history heritage park, and the state arboretum. The 
University has just completed its pre-program study of the site, as 
well as determining the project costs.
    This project will be a partnership in every sense of the word. 
State and private donors have promised to match every Federal dollar 
with three of their own. The University's donors and alumni network 
view this as a priority project for Utah, and are actively engaged in 
its development.
    The University has already contributed the 14 acres for the 
development. The State has guaranteed the operating funds for the 
facility at $800,000 annually. To date close to $12 million has been 
raised from private donors, this includes $10 million from the Emma 
Eccles Jones foundation.
    Unlike many museums throughout the country, about seventy-five 
percent of the museum's holdings are owned outright by the Federal 
government. With more than ninety percent of some collections coming 
from Federal lands.
    That means that these artifacts, fossils, and specimens belong to 
the people of the United States. These exhibits and collections are 
part of our collective national heritage. I hope with your help, we can 
save these treasures for future generations of Americans.
    Thank you for your time.
                                 ______
                                 
    Mr. Hefley. Mrs. Christensen.
    Mrs. Christensen. I don't have any questions at this time.
    Mr. Hefley. Mr. Hansen.
    Mr. Hansen. I have no questions. I commend my colleague 
from Utah for his standpoint on this matter.
    Mr. Simpson. Just one question. Did I hear you correctly 
that--what was it--70 percent of the artifacts are actually 
owned by the Federal Government?
    Mr. Matheson. Seventy-five percent.
    Mr. Simpson. Thank you.
    Mr. Hefley. You made a good case for the quality of the 
collection and for the need for a new facility.
    You know, I used to go with the Fish and Wildlife Service 
every year fishing out on the eastern plains of Colorado and we 
caught lots of fish, and I have accused them of having divers 
down there put it on my hook.
    How could you have a more opportune thing happen than the 
roof fall in just as you are viewing it? I want to talk to the 
president of the University about that.
    I guess the question I would have is I think the case needs 
to be made that this is a Federal responsibility, that the 
Federal Government should do this. I know that we have, as 
Chairman Hansen has said, we have given money to museums, $80 
million for Steamtown--Mr. Hansen, you and I have talked about 
that a lot; $6.4 million for the New York botanical garden; 16 
million for the Hispanic Cultural Center in New Mexico; 13 
million for the American Museum of Natural History; and 10 
million for Fort Pack Dam Interpretive Center in Montana; 3.8 
million for the Center for Historically Black Heritage at Texas 
A&M 3 million for a museum at Brown University.
    So it is not without precedent. But this, as I understand 
it, would come out of the Park System's hide. And with all the 
other needs we have in the Park System, convince us that this 
is an expenditure of money that we need to be make being.
    Mr. Matheson. Sure. First of all, there is nothing in the 
legislation that specifically says it would come from the 
National Park Service alone. This is looking at it as a 
Department of Interior appropriations at the discretion of the 
Secretary of Interior, so we want to make sure that it is 
understood. We have a lot of Federal land in Utah we have BLM 
lands, we have national forestland, we have national parkland 
in Utah. These artifacts come from all of these locations.
    I do want to correct--at least my understanding would be is 
this is not necessarily a target of just the National Park 
Service funding as a source of funds for this museum 
construction. As I said in my testimony, 75 percent of the 
artifacts in this museum are Federal artifacts. Many of these 
artifacts come from Federal lands, and I think that in and of 
itself is a compelling case there ought to be some Federal 
involvement.
    Mind you, as I said, this is a 3-to-1 match. We are looking 
at $3 coming in from elsewhere to match $1 that comes from the 
Federal Government.
    Mr. Hefley. Okay. I don't think I have any further 
questions. Thank you very much for being here and please join 
us if you would like.
    Mr. Matheson. Thank you.
    Mr. Hefley. Our second panel will be Mr. Richard Ring, 
Associate Director of Park Operations and Education for the 
National Park Service. He will be speaking on both bills.
    Mr. Ring, we will give you the time, and we ordinarily do 5 
minutes of testimony, and in this case you will be speaking on 
both bills, so if you need to take more time than that, feel 
free to do that.

    STATEMENT OF RICHARD G. RING, ASSOCIATE DIRECTOR, PARK 
        OPERATIONS AND EDUCATION, NATIONAL PARK SERVICE

    Mr. Ring. Thank you, Mr. Chairman, I will try to keep it 
down to 5 minutes. And again, thank you for the opportunity to 
testify this morning. I am here to present the Department of 
Interior's views first on H.R. 1461, a bill to amend the 
National Park Omnibus Management Act to remove the exemption 
for nonprofit organizations from the general requirement to 
obtain commercial use authorizations.
    The Department does not support H.R. 1461 because of the 
financial burden that it would potentially place on many 
nonprofit organizations including educational groups, outdoor 
clubs, and other nonprofits. Section 14 of the Omnibus 
Management Act of 1998 permits the National Park Service to 
authorize commercial use authorizations for these for a variety 
of smaller operations, and these operations are intended to be 
used only for services that lack minimal impacts on park 
resources and values and are consistent with the purposes for 
which the park were established.These operations are limited to 
those grossing $25,000 or less annually and the law does exempt 
nonprofits from the requirement of obtaining commercial use 
authorizations unless taxable income is derived from their 
operations.
    H.R. 1461 would remove the provision in the law, and 
organizations such as outdoor clubs, scout groups, educational 
groups, and other nonprofits would be required to obtain the 
authorization and pay for it. And it is subject to the payment 
of the same fees and/or requirements as other commercial 
operators. Such a change in the law would result in financial 
burdens being placed on some smaller nonprofits, potentially 
discouraging or precluding them from being able to conduct 
their activities in national parks. The financial benefit from 
additional fee receipts that we would like to receive from 
these folks would be both minimal and would be offset by the 
additional administrative costs that would be necessary to 
evaluate the commercial value of nonprofit operations that do 
not generate taxable income.
    The Department would be glad to work with the Committee to 
ensure that this issue is addressed in an appropriate and fair 
manner. And I would be happy to answer any questions on this 
bill.
    [The prepared statement of Mr. Ring follows:]

 Statement of Richard G. Ring, Associate Director, Park Operations and 
 Education, National Park Service, U.S. Department of the Interior, on 
                               H.R. 1461

    Mr. Chairman, thank you for the opportunity to present the 
Department of the Interior's views on H.R. 1461, a bill to amend the 
National Parks Omnibus Management Act of 1998 to remove the exemption 
for nonprofit organizations from the general requirement to obtain 
commercial use authorizations.
    The Department does not support H.R. 1461 because of the financial 
burden it would potentially place on many nonprofit organizations, 
including educational groups, outdoor clubs, and other nonprofits.
    Section 418 of the National Parks Omnibus Management Act of 1998 
permits the National Park Service to authorize individuals, 
corporations, or other entities to provide visitor services in units of 
the National Park System through a commercial use authorization. Such 
authorizations are not concessions contracts, and are intended to be 
used only for services that will have minimal impact on park resources 
and values and are consistent with the purposes for which the park was 
established.
    Furthermore, the law limits this type of authorization to 
commercial operations grossing $25,000 or less annually from services 
originating and provided solely within a park, or operations whose use 
of the park is incidental and whose services originate and terminate 
outside of the park. In addition, the law specifically recognizes 
commercial use authorizations for uses such as organized children's 
camps, outdoor clubs, and other nonprofit institutions. However, the 
law exempts nonprofits from the requirement of obtaining a commercial 
use authorization unless taxable income is derived from their 
operations in the park.
    H.R. 1461 would remove the provision in the law that exempts 
nonprofits from having to obtain a commercial use authorization. The 
effect of this would be to require all nonprofit organizations, even 
those that do not derive taxable income from their operations in a 
park, to obtain a commercial use authorization. Potentially, 
organizations such as outdoor clubs, scout troops, educational groups, 
and other nonprofits could be required to obtain an authorization, 
subject to payment of the same fees and other requirements as 
commercial operators. While the Department strongly supports the 
concept of requiring commercial operators, including nonprofits that 
derive taxable income from their park operations, to pay a fee in order 
to obtain an authorization, we do not believe that this requirement 
should apply to all nonprofits. Such a change in the law would result 
in a financial burden being placed on some smaller nonprofits, 
potentially discouraging or precluding them from being able to conduct 
their activities in national parks.
    For the National Park Service, the financial benefit from 
additional fee receipts would likely be both minimal and offset by the 
added administrative requirements to evaluate the commercial value of 
nonprofit operations that do not generate taxable income. However, the 
Department would be glad to work with the committee to ensure that this 
issue is addressed in an appropriate and fair manner.
    This concludes my testimony. I would be glad to answer any 
questions that you or members of the subcommittee might have.
                                 ______
                                 
    Mr. Ring. And I am pleased to go to the second bill, Mr. 
Chairman.
    Mr. Hefley. Go ahead with your testimony on the other one, 
and then we will do both.
    Mr. Ring. Okay. I would like to also testify on H.R. 1491, 
a bill to assist in the preservation of archaeological, 
paleontological, zoological, geological, and botanical 
artifacts through the construction of a new facility for the 
University of Utah Museum.
    The Department opposes H.R. 1491. We appreciate the 
interest the museum has in providing the highest level of care 
to the objects in its collection. We believe the limited use of 
National Park Service appropriations to fund the design, 
construction, and operation of projects of non-National Park 
Service projects of this type is inappropriate.
    In the last Congress alone, the legislation was passed and 
signed into law that authorized over $80 million in grants to 
be passed through the National Park Service budget for nonpark 
system projects. Each time this is done it reduces the ability 
of a limited amount of discretionary funds to address the needs 
of the national parks. We believe that funds are more 
appropriately directed at this time to reducing the long list 
of necessary but deferred construction projects, as well as 
those meeting curatorial needs, that have been identified in 
our national parks.
    Again, the Department is willing to work with all the 
involved agencies and the museum to thoroughly assess all 
possible alternatives for providing the highest level of care 
to the objects currently housed at the museum, including, if 
necessary, the transferring of the collection to Federal 
repositories that are managed directly by the Federal agencies. 
And again, that summarizes my testimony and I will be happy to 
answer any questions on either bill.
    Mr. Hefley. Thank you.
    [The prepared statement of Mr. Ring follows:]

 Statement of Richard G. Ring, Associate Director, Park Operations and 
 Education, National Park Service, U.S. Department of the Interior, on 
                               H.R. 1491

    Mr. Chairman, thank you for the opportunity to present the views of 
the Department of the Interior on H.R. 1491, a bill to assist in the 
preservation of archaeological, paleontological, zoological, 
geological, and botanical artifacts through construction of a new 
facility for the University of Utah Museum of Natural History, Salt 
Lake City, Utah.
    The Department opposes the enactment of H.R. 1491. Our opposition 
does not detract from the significance and importance of the museum as 
a place of learning and as a keeper of important collections that 
showcase many features of America's past. We encourage the University 
and the State of Utah to continue to seek funding and other solutions 
for the preservation and protection of the collections, including 
working with existing programs managed by all of the Federal agencies 
with collections stored at the museum.
    We appreciate the interest the museum has in providing the highest 
level of care to the objects in its collection. However, we believe the 
use of limited National Park Service appropriations to fund the design, 
construction, and operation of projects of non-National Park Service 
projects of this type is inappropriate.
    In the last Congress alone, legislation was passed and signed into 
law that authorized over $80 million in grants to be passed through the 
National Park Service budget for non-Park System projects. Each time 
this is done, it reduces the availability of a limited amount of 
discretionary funds to address the needs of our national parks and 
other important national priorities.
    The Department is committed to supporting the President's 
Initiative to eliminate the deferred maintenance backlog in our 
national parks. We believe funds are more appropriately directed at 
this time to reducing the long list of necessary but deferred 
construction projects, as well as those meeting curatorial needs, that 
have been identified in our national parks.
    H.R. 1491 authorizes the Secretary of the Interior, subject to the 
availability of appropriations, to award a grant to the museum to pay 
for a Federal share of the cost of construction of a new facility. The 
bill states that more than 75 percent of the museum's collection have 
come from Federal lands and have been collected for a number of years. 
Items in the collection have come from land managed not only by the 
Bureau of Land Management, the Bureau of Reclamation, the National Park 
Service, the United States Fish and Wildlife Service, the U.S. Forest 
Service, but also the Department of Defense and the Bureau of Indian 
Affairs--agencies not mentioned in the legislation. The Federal share 
of the cost for this project is not to exceed 25 percent. A total of 
$15 million is authorized to be appropriated as a grant to the 
University of Utah. Federal funds are to be used for the design, 
planning, furnishing and equipping of the museum.
    The University of Utah is in Salt Lake City and the Museum of 
Natural History has been designated by the state legislature as the 
State museum of natural history. Current exhibit and storage facilities 
are inadequate and place the collection in danger. We realize that 
museum facilities throughout the country, including the University of 
Utah Museum of Natural History, are in need of improved conditions to 
allow them to adequately protect and preserve the objects in their 
care.
    Due to the financial implications of the bill on national parks and 
park programs, we must oppose H.R. 1491. However, the Department is 
willing to work with all of the involved agencies and the museum to 
thoroughly assess all possible alternatives for providing the highest 
level of care to the objects currently housed at the museum, including, 
if necessary, the transferring of collections to Federal repositories.
    This completes my statement. I will be pleased to answer any 
questions you or other members of the Subcommittee may have.
                                 ______
                                 
    Mr. Hefley. Mrs. Christensen.
    Mrs. Christensen. Thank you, Mr. Chairman. Good morning Mr. 
Ring. I have a few questions. There will be two on 1461, one on 
1491.
    Does the exemption language of section 418 seek or create 
any problems with you for protecting park resources or 
providing for visitors' safety. This is with regard to the 
nonprofit.
    Mr. Ring. Does the exemption in the proposed bill?
    Mrs. Christensen. Is it problematic for you, has it 
provided problems for the Park Service who manage the 
resources, because of the exemption for the nonprofit groups?
    Mr. Ring. No, it has not.
    Mrs. Christensen. It has not. Also do you have any way--
would you characterize the nonprofit groups that have outings 
in our national parks commercial operations?
    Mr. Ring. For the most part they are not; but again, the 
current law makes a very clear distinction that it is not just 
nonprofit status but it is nonprofit status where the activity 
is not generating taxable income.
    Mrs. Christensen. And there is a provision if there is any 
taxable income.
    Mr. Ring. Then they would have to get a commercial use 
authorization and pay all the fees that would normally apply.
    Mrs. Christensen. And the other bill, until I heard the 
testimony this morning I wasn't really aware that 75 percent of 
the artifacts were Federal, as Congressman Matheson has said. 
Do you consider those as belonging to the Federal Government?
    Mr. Ring. I think that is a matter that bears a lot of 
examination. Many of the artifacts may have been collected 
before the designation or the establishment of a national park 
unit, and there may be some relationship to the Smithsonian if 
they were public lands. I think that bears a very detailed 
examination as to the ownership of them.
    Mrs. Christensen. Thank you. I don't have any other 
questions, Mr. Chairman.
    Mr. Hefley. Thank you. Mr. Hansen.
    Mr. Hansen. Thank you, Mr. Chairman.
    Mr. Ring, you stated in the opposition that the 
administration has to 1491 that you do not believe they should 
fund construction or operation of a non-national park project. 
Do you believe that the Department of Interior has the 
responsibility, financial responsibility, to assist States, 
organizations, universities, whoever, that have taken it upon 
themselves to preserve natural resources such as artifacts, 
fossils, things that have national significance?
    Mr. Ring. We are most willing to work with State and local 
governments on those kinds of issues, and we are very 
interested in sitting down and examining what are the options, 
what choices are there to best accomplish that.
    Mr. Hansen. You say State and local governments. Do we 
expand that to mean State-owned institutions.
    Mr. Ring. Certainly, sir.
    Mr. Hansen. So you do accept the fact that possibly the 
Federal Government should have a hand in those things, is that 
right?
    Mr. Ring. I believe we work with all of these kinds of 
institutions, both directly and with technical assistance, and 
work with them on a range of these kinds of problems.
    Mr. Hansen. And do you accept the fact that the Federal 
Government has done this for other institutions?
    Mr. Ring. Well, yes, sir. I mentioned, that particularly in 
the last year alone, about $80 million of past grants were 
authorized through the Park Service budget for these kinds of 
activities. The concern that we have is facing such an enormous 
backlog within the national park system that these grants are 
being passed through the National Park Service budget and it is 
very difficult with scarce allocations to pursue a wide range 
of very important priorities. So I think that is more the 
issue.
    I also think, sir, that the scope of this concern needs to 
be understood. There are approximately 583 nonFederal museums 
that house some portion of collections that are either owned by 
or collected from Federal land. Of these, about 142 are 
associated with National Park Service collections.
    Mr. Hansen. Do you accept the fact that the majority of 
these artifacts or things that are found basically come off of 
Federal grounds; therefore, there is somewhat of a correlation 
or a responsibility of the Federal Government, if they have an 
interest in that, and I think in my 20 some years they have 
always declared they have an interest in it, the Federal 
Government does have a responsibility to be part and particle 
of this, as you have stated is done all over America basically?
    Mr. Ring. Yes, sir, I do. When a problem arises that we 
welcome the opportunity to sit down with the institution and 
discuss what happens and the best way to solve the problem.
    Mr. Hansen. Have you been out there, by any chance, and 
looked at the present repository of these things?
    Mr. Ring. No, sir, I have not seen--.
    Mr. Hansen. The dilapidated Thomas Library.
    Mr. Ring. No, sir, I have not seen this particular site, 
but I have visited a number of other repositories that the 
National Park Service manages directly and seen equally 
deplorable conditions. We have a very large problem with the 
collections.
    Mr. Hansen. I don't argue the facts at all that the Park 
Service has an infrastructure problem. When I chaired this 
Committee, I went through that same frustration with the 
literally billions of dollars of backlog. That is one of the 
reasons we did the demonstration project and others to bring 
those things to light. I notice in your testimony that you 
stated that the University really ought to look at other 
existing programs that are put out by the Federal Government 
for additional monies. How much did you have in mind?
    Mr. Ring. Sir, I don't have a specific program to mention 
to you today, but I would be happy to provide to you that 
information.
    Mr. Hansen. I would be happy if you would do that so we can 
see what other avenues we can explore.
    [The information referred to follows:]

    Question: In reference to the NPS testimony that the museum should 
``continue to seek funding and other solutions for the preservation and 
protection of the collections, including working with existing programs 
managed by all of the federal agencies with collections stored at the 
museum,'' Mr. Hansen asked the specifics about which programs the 
museum should look to.

    Answer: The following list provides information on potential 
funding sources for the Utah Museum of Natural History (UMNH) to use in 
caring for Federal collections. The UMNH has been successful in 
obtaining funds from most of the Federal granting agencies. We note 
that in 1935 Federal WPA funds financed the construction of the 
building that currently houses the Museum.
National Endowment for the Humanities
    LChallenge Grants-Challenge grants help institutions and 
organizations secure long-term support for, and improvements in, their 
humanities programs and resources. In special circumstances challenge 
grants can also help with limited direct costs, such as the purchase of 
capital equipment, construction and renovation, and even debt 
retirement. Because of the matching requirements, these NEH awards also 
strengthen the humanities by encouraging non-Federal sources of 
support.

    LPreservation Assistance Grants-Preservation Assistance Grants can 
help museums enhance their capacity to preserve their humanities 
collections. Applicants may request support for general preservation 
assessments or consultations with preservation professionals to develop 
a specific plan for addressing an identified problem. Awards will also 
be made to purchase basic preservation supplies, equipment, and storage 
furniture.
Institute for Museum and Library Services
    LGeneral Operating Support-The IMLS General Operating Support 
program encourages the best in museum service. Museums use these funds 
to strengthen collections care and raise funds from other sources. The 
two-year award provides unrestricted funds for ongoing institutional 
activities.

    LConservation Project Support-Grants are available for five broad 
types of conservation activities, including collections treatment and 
environmental improvements.
National Science Foundation
    LThe Biological Research Collections (BRC) program provides support 
for collection improvement, for collection computerization, for 
research to develop better techniques of curation and collection 
management, and for collections community based development 
undertakings. Physical improvements typically involve rehousing a 
collection, replacing inadequate resources, providing new resources for 
continued growth, or incorporating one or more collections donated by 
another institution or individual. Allowable costs generally include 
the purchase and installation of new storage systems, the purchase of 
curatorial materials, as well as new curatorial and technical 
assistance specifically designed to effect the proposed improvements 
for the duration of the proposed project.
National Park Service
    LNative American Graves Protection and Repatriation Act (NAGPRA) 
Grants-NAGPRA grants are awarded on a competitive basis to Indian 
tribes, Native Hawaiian organizations, and museums that need financial 
assistance to carry out duties associated with NAGPRA compliance. 
Although Congress does not make the distinction between funds intended 
for distribution to the two groups of eligible applicants--Indian 
tribes and Native Hawaiian organizations, and museums--the NAGPRA. 
Grants office administers these grants separately. The number of 
proposals submitted, as well as the total amount of requested funds, by 
each group of applicants determines the distribution of the 
Congressionally appropriated grant funds.

    LSave America's Treasures-Grants are available for preservation 
and/or conservation work on nationally significant intellectual and 
cultural artifacts and nationally significant historic structures and 
sites- Intellectual and cultural artifacts include artifacts, 
collections, documents, monuments and works of art. Historic structures 
and sites include historic districts, sites, buildings, structures and 
objects. Grants are awarded through a competitive process. Each grant 
requires a dollar-for-dollar nonFederal match

    LHistoric Preservation Fund Grants-Among the kinds of activities 
funded are design guidelines and preservation plans and rehabilitation 
or restoration of National Register listed properties. The UMNH 
currently occupies the George Thomas Library building which is on the 
National Register of Historic Places. This building was financed with 
WPA funds and completed in 1935. In 1968 the University remodeled it to 
house the UMNH. If the UMNH were to continue to occupy this historic 
building, Historic Preservation Fund Grants could be applied to its 
rehabilitation.
Non-Grant Options for Support from Federal Bureaus with Collections at 
        UMNH
    LDepartment of the Interior-The Department is developing discount 
agreements with vendors of specialty museum supplies to apply to non-
Federal museums that house Federal collections. It has agreements in 
place with six vendors.

    LBureau of Indian Affairs (BIA)-BIA is currently developing 
curation agreements with nonFederal institutions to facilitate 
providing funding to manage BIA collections at those institutions. It 
has contracted with the Army Corps of Engineers to survey BIA 
collections in non-Federal institutions. Utah is covered in the current 
survey. Very limited funding is currently available to support these 
activities- The bureauwide museum program is funded at $247,000.
Bureau of Land Management (BLM)
    LMuseum Partnership Program-This program supports cooperative 
projects that involve 13LM collections at non-Federal museums. Modest 
funding of $5,00010,000 per project is provided. UMNH has been 
receiving $5,000 annually from Utah BLM as well as a one-time payment 
of $47,160 this fiscal year.
Bureau of Reclamation (BOR)
    LBOR provides funding to non-Federal repositories on a case-by-case 
basis. To date, BOR has provided $242,000 to UMNH to care for BOR 
collections stored at the museum. This funding has supported 
cataloging, rehousing and reconciliation of records. In addition, each 
summer since 1999, BOR has provided the museum with a student intern to 
work on-the BOR collections. The current cost of the intern is $5,160.
Fish and Wildlife Service (FWS)
    LBecause the FWS collections at UMNH occupy an estimated 14 cubic 
feet and FWS could accommodate this material in another facility, there 
is no need to seek support for keeping these FWS collections at UMNH.
National Park Service (NPS)
    LBacklog Cataloging-The Backlog Catalog program is funded by a 
line-item in the NPS appropriation to catalog the backlog of 52 million 
items in park collections. This program is funded at $2.$ million in 
fiscal year 2001. Under contracts or agreements, parks can pay non-
Federal museums to catalog park .collections into the NPS cataloging 
system, the Automated National Catalog System (ANCS+). No non-Federal 
match required.

    LMuseum Collections Preservation and Protection Program-The Museum 
Collections Preservation and Protection Program (MCPP) is funded by a 
line-item in the NPS appropriation to address deficiencies in the 
preservation and protection of park collections. Service-wide 
facilities housing park collections meet only 66% of museum collections 
preservation and protection standards. The program addresses storage, 
environmental control, 'security and fire protection deficiencies. This 
program is funded at $3.0 million in fiscal year 2001. Parks may 
purchase supplies and equipment needed to maintain park collections in 
non-Federal museums, e.g. storage cabinetry. The equipment, while used 
in the non-Federal museum, remains Federal property. No nonFederal 
match is required.

    LStorage in NPS Facility-To date, the UMNH has identified and 
estimated 216 cubic feet of archaeological collections that belong to 
the NPS. NPS could accommodate these collections in existing NPS 
facilities without incurring any construction costs. UMNH has indicated 
there may be additional natural history collections belonging to NPS, 
but has not yet provided information on storage space required or 
number of specimens. When this information is provided, NPS will 
evaluate its capability to store this material- NPS anticipates that 
this material could also be accommodated in existing NPS facilities. 
Storage in NPS facilities would obviate. the need for UMNH to seek 
funding to store these park materials.


    Question: Mr. Matheson asked if the funding for the museum were 
spread out over time and spread across the Department, rather than just 
the NPS, would the Department still oppose the bill.

    Answer: Although the museum may have merit, the Department would 
still oppose the bill. Even if the funding for this non-Federal museum 
were spread out over time and across the Department, it would still 
take away funds :flora what is available for agencies to address 
priorities and take care of existing Federal responsibilities. Thus, 
this project would not be a top priority compared to other needs , 
including Federal facilities where curatorial needs cannot be met. 
Given the large backlog of deferred maintenance and construction 
projects, agencies need to establish clear priorities and focus 
resources on their priority needs. These needs cannot be addressed if 
large portions of construction funds are diverted to non-Federal 
facilities.
                                 ______
                                 
    Mr. Hansen. Thank you, Mr. Chairman. That is all the 
questions I have for Mr. Ring.
    Mr. Hefley. Thank you. Ms. McCollum.
    Ms. McCollum. No, thank you.
    Mr. Hefley. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. On H.R. 1461, the 
commercial uses authorization for the nonprofits, how much 
revenue are we talking about? What is the average cost of a 
commercial use authorization?
    Mr. Ring. We are still in the process of converting these 
authorizations from the old from the way we did them under the 
old law into the new law, but these things have been issued at 
100 to 200 a year, has been the valuation on them.
    Mr. Simpson. Do you have any idea what the total loss of 
income would be by exempting the nonprofits if they were to 
be--if they were required to have commercial use authorization?
    Mr. Ring. Well, currently we have a little over 3,100 of 
these types of authorizations that we will be converting to the 
new type of authorization under the new law. Right now, about 
77 of those are issued to nonprofits. That is slightly less 
than 2-1/2 percent.
    Mr. Simpson. Okay, thank you. On H.R. 1491, if the State of 
Utah were to declare these artifacts belong to the State of 
Utah and not the Federal Government, would the Federal 
Government have a problem with that?
    Mr. Ring. I think we would like to sit down and understand 
what were those artifacts, where were they collected, when were 
they collected, because I think that there is a lot of 
information that would need to be reviewed to understand 
exactly who they belong to.
    Mr. Simpson. I certainly appreciate the concern that the 
Park Service has with the unmet backlog that they have not only 
in the Park Service, as Congressman Matheson said, and in the 
Forest Service and BLM and other public agencies. I would hope 
that those agencies when legislation comes forwards in this 
Committee dealing with--I believe it is called CARA--that puts 
$900 million into the State and Federal Land and Water 
Conservation Funds--that there are going to be some amendments 
offered to take some of that money to address the backlog needs 
of the National Park Service and in other areas.
    I notice that Secretary Norton was out in Yellowstone and 
Grand Teton National Park a couple of weeks ago and she 
commented on the extraordinary need to address the backlog in 
these national parks, and I would like to see the Park Service 
and the Forest Service and the BLM get together on the need to 
address this backlog and hopefully they can support some of 
these amendments which would direct some of that money to this 
backlog. If we can do that, it would actually free up some 
money not only to address the backlog, but to do some of these 
things that I think are necessary. But I do think the Federal 
Government has a responsibility to maintain some of these 
artifacts that obviously have been collected off Federal lands, 
and I suspect that the Federal Government would object if the 
State of Utah said that they are the State of Utah's and not 
the Federal Government's.
    Mr. Ring. I certainly agree that the issue of care for 
these collections nationwide is a very large issue. The 
Department of Interior alone has over 117 million artifacts. 
About 25 percent of them are being cared for in nonFederal 
institutions. About 3.7 percent of National Park Service's 
collections are being cared for in nonFederal institutions. It 
is a challenge. We recognize it as a challenge to the State of 
Utah, but also to many of us in terms of providing the proper 
care for these artifacts.
    Mr. Simpson. Thank you.
    Mr. Hefley. Thank you, Mr. Simpson.
    Mr. Ring, it is certainly not the purpose of any of us, I 
think, to restrict nonprofit organizations from taking in 
groups and enjoying our great national resources, particularly 
groups like the Boy Scouts and all. The only thing was we had 
some feeling that there are some groups that do make money on 
this that operate like a commercial operator, and those are the 
only groups that we would want something like this, if it were 
to go forward, to affect. If they are a commercial operator, 
even under the guise of nonprofits, then they should pay for 
the permit. If they are not a commercial operator and they take 
their Boy Scout troops or their members in there for something 
and don't make any money offer of it, then they shouldn't pay.
    You in your testimony state that this legislation would 
result in an added administrative burden to evaluate the 
commercial value of nonprofit operations that do generate 
taxable income. How does there Park Service make this 
determination currently?
    Mr. Ring. We would be asking, in an application, for the 
applicant to tell us what their status is and provide a 
certification to us with regards to whether or not they were a 
nonprofit, and, whether or not the revenue being generated by 
this activity was under their nonprofit status or whether it 
would be subject to taxation. If we had any question in that 
regard, we certainly would query the Internal Revenue Service 
and pursue any false statements that may be made to us.
    Mr. Hefley. Well, suppose you have a big organization. You 
were asking them, you know, where they make a taxable income 
profit--and the big organization does not make a taxable income 
profit, let's say, but on this particular operation they make a 
considerable profit, a profit which goes back into their 
organization for lobbying or for education or for fund-raising 
or for other things. Do you have any way of determining whether 
this particular operation makes a profit as opposed to whether 
the whole organization makes a profit?
    Mr. Ring. We basically would turn to the rules set up for 
nonprofit organizations that the IRS administers, and if funds 
are expended on certain activities that are within the scope of 
the law governing nonprofit organizations, then we would be 
guided by IRS' determination on that.
    Mr. Hefley. Okay. Let me mull that a bit while I turn to 
Mr. Matheson. I didn't mean to ignore you. I want to give you 
the opportunity to ask any questions you would like to ask as 
well.
    Mr. Matheson. Well, thank you, and I appreciate the 
Subcommittee allowing me to sit up on the panel today. I 
appreciate that again, Mr. Chairman. I just had a couple of 
questions.
    Mr. Ring, in your statement you took issue with the project 
because it would take resources from the National Park Service 
budget at a time when the administration made national parks a 
priority and what we have all agreed is an important backlog of 
projects that needs to be addressed. If the funding for this 
program is spread out over time, and it came from other sources 
within the Department of Interior, would you then maintain your 
opposition?
    Mr. Ring. That is something I would need to go back and 
examine. We certainly would consider that and be happy to 
respond to you on it.
    Mr. Matheson. In reading this legislation, I see mention of 
the National Park Service only once, and that is sort of a 
cursory mention in the findings section along with all public 
land management agencies that are in the State of Utah. Do you 
see a place in this bill where it says the funding would only 
come from the National Park Service?
    Mr. Ring. I do not see it in this bill, but the routine 
practice is that these types of grants are placed in the 
National Park Service budget.
    Mr. Matheson. Well, I applaud you making the point in your 
testimony that the administration believes this is a valuable 
project and you would be willing to assist this project somehow 
in the future. Do you have a sense of how you could--how we 
could assist this project from a Federal level, if not through 
the funding that is suggested in this bill itself?
    Mr. Ring. We would welcome the opportunity to sit down and 
meet with the museum and discuss what our range of options are.
    Mr. Matheson. Thank you, Mr. Chairman.
    Mr. Hefley. Ms. McCollum.
    Ms. McCollum. Thank you, Mr. Chairman. If I could ask a 
follow-up on what you were talking about earlier, Mr. Ring, I 
think the Chair raises a good question about not-for-profit 
groups--sometimes what they are paying CEOs, what they are 
doing for lobbying and other things--in essence are doing quite 
well.
    Do you ever look at the fee that is being charged by a 
nonprofit for the individuals coming in? I mean, let's say you 
know--I know as a Girl Scout leader, if we go in someplace, how 
much it is going to cost for me for the food for cookouts, for 
incidentals. Sometimes we take it out of dues, or the girls 
ante up. Maybe it would cost me $5 per girl for one night. If 
we are doing something that is $35 for 1 week, that is breaking 
even, that is covering my costs.
    Let's say I charge $100 for the girls to participate that 
night. Then I am increasing the coffers of my treasury. Do you 
ever look at, or do people submit what they are charging for 
using the park as part of when people are coming in?
    Mr. Ring. With these incidental scale authorizations, we 
are focused more on what their status is and whether or not 
they are generating revenue that is subject to taxation. If the 
revenue is being applied to the nonprofit purposes of the 
organization, whether on the same trip or on something else 
that is associated with their nonprofit status, we have not 
made a distinction. In the law that we have on the books now, 
we certainly would be focused on whether or not any of that 
revenue is being devoted to do things that under the Internal 
Revenue Code a nonprofit organization would be taxed on.
    Ms. McCollum. Mr. Chair, if I may, another question. Mr. 
Ring, I find it also kind of, as I am mulling this through--
Girl Scouts--you know my Girl Scout troop might come in once a 
year, maybe once every 4 years. The Girl Scout Council would 
come in more often because of an umbrella group. Would anything 
maybe trigger that you will want to do a further investigation 
versus how--you know, how often a group is coming in, a 
nonprofit group is coming in to use a particular facility?
    Mr. Ring. Well, certainly, we would take any information 
that we got that raised any question concerning the status--
either the nonprofit status or the taxable nature of the 
activity that the nonprofit organization was engaged in, and 
pursue it with the IRS. We also could consider just random spot 
checks on those.
    Ms. McCollum. Thank you, Mr. Chairman.
    Mr. Hefley. Mr. Simpson.
    Mr. Simpson. Mr. Chairman, could I ask a couple more 
questions?
    Mr. Hefley. Sure.
    Mr. Simpson. Mr. Ring, you mentioned--back to this 
nonprofit status. I think we all know what we are talking 
about. We are not talking about the Girl or Boy Scouts, those 
types of organizations. People are using the national parks in 
a nonprofit status, not having to pay the commercial fee. And 
they are using them, organizations are, I suspect for advocacy, 
to try to advance their agenda and so forth, which is okay. But 
you would think that many of these organizations, these 
environmental groups that use this in that manner, would in 
fact want to pay the fee that goes into supporting the national 
parks instead of opposing that fee, wouldn't you?
    Mr. Ring. We would have to ask those organizations. We 
certainly get donations from quite a range of groups and 
individuals. The question you raised with regards to what we 
require versus what they are interested in doing is the issue. 
We feel that in the case of the nonprofits, most, if not all of 
the nonprofits that are not engaged in collecting taxable 
income, are very much dedicated to purposes that are 
educational and have been looked at under the IRS Code and 
determined to be appropriate and consistent with the purposes 
of the national parks. The level of activities that is under 
the $25,000 level that we are talking about, and the nature of 
the activity, where it is typically a group coming in for an 
organized visit or a guided or an educational visit, lies very 
lightly on the land.
    From a resources standpoint, we have very little concern 
over it. We think these are appropriate and are very supportive 
of them.
    Mr. Simpson. If we were to try to change this and not just 
withdraw the nonprofit status, is the only way we could do that 
is go through the IRS Code and change the nonprofit designation 
in the IRS Code, or could we change this so that we were 
actually addressing those groups that do quite well that are 
nonprofits, versus the Boy Scouts and Girl Scouts?
    Mr. Ring. I think you have raised a question of how do you 
set a standard. The standard in the law right now refers to the 
IRS Code. The IRS has reviewed these organizations from the 
standpoint of their purposes, as well as routinely requiring 
them to report their income. It makes distinctions as to which 
of that income is going toward those educational purposes 
versus not. We are certainly willing to work with the Committee 
on an appropriate way to address this issue. But the question 
is what standard do you use and how do you make a distinction 
that is fair and impartial?
    Mr. Simpson. I guess what surprises me, to some degree what 
it remind me of is the demonstration fee project we have in 
some of our national forests. That money stays within the 
national forest to upgrade the trails, and the people that 
object to that the most are the very people that want us to 
upgrade the trails and the forest and so forth, the same hikers 
and backpackers that are opposed to the demonstration fee 
project. And I think the same type of thing is going on within 
the National Park Service and the commercial use fee.
    Mr. Ring. I don't know--.
    Mr. Hefley. I am sorry, we will have to go and vote. If you 
will hold that thought, we will recess and vote and come back.
    [Recess.]
    Mr. Hefley. The Committee will come back to order. Mr. 
Ring, you were in the middle of answering Mr. Simpson's 
question. Mr. Simpson is not here, but if you would like to 
continue it for the record.
    Mr. Ring. For the record, if I could have that read back, 
it would help.
    Mr. Hefley. Do we have someone who can do that? I don't 
think we do. Forget that question. Let's go to another one.
    The IRS has looked askance at recent times in what they 
call unrelated earned income or unrelated business income, and 
one example that is often used is of the YMCA. And the YMCA had 
lofty purposes and they accomplished wonderful things. I am a 
big fan of the YMCA.
    Many of them operate very lucrative health clubs as a part 
of their operation, and the IRS has looked at this as a--well, 
is this really--they are out competing with private health 
clubs. Is this really a part of their basic charitable mission, 
the reason they have a 501(c)(3)? And this is, I think what we 
are getting at is, do some of these organizations who are 
exempt really operate a business, a profitable business, an 
unrelated earned income?
    Now, you can always--you can always figure some 
relationship. For the Y, for instance, one of our charges is to 
keep people healthy, so they have a health club and a masseuse 
and exercise machines and all that goes with that. But do you 
have groups that operate tours that are essentially commercial 
tours but they are doing it under the guise of their 501(c)(3), 
and do you have any way to determine that, any rules and 
regulations that you promulgated based upon the law to 
determine that, other than to just simply, if you checked--and 
I am not sure you do check, because in your testimony there 
seemed to me there was a lot of could have and should have and 
we are able to do this, we are able to check the IRS and so 
forth, but there doesn't seem much indication you are really 
doing that.
    Are you really doing it? Do you have a way to check and 
find out if these suboperations of an overall organization are 
big profit centers for the organization?
    Mr. Ring. That is a good question, Mr. Chairman. I think 
the law itself basically places a limit on the scale of these 
at $25,000, so that there is one constraint. We wouldn't be 
getting into large profit-making operations or nonprofit 
operations in this section of the law.
    We are still in the process of promulgating the regulations 
associated with the commercial use authorizations. The question 
you have raised is a very good one. We would go back and 
examine that in the context of the promulgation of these rules.
    Mr. Hefley. Okay. We are having a--I think we are having a 
hard time getting at what we are trying to get at here, but you 
have been very helpful and I appreciate it. And since there is 
no one else to ask--Mr. Matheson? Or Dale, do you have any--.
    Mr. Kildee. No.
    Mr. Hefley. Thank you very much. We will go to the next 
panel, then.
    The next panel is made up of J. Bernard Machen, President, 
University of Utah, Salt Lake City; Dave Simon, Director of 
Outdoor Activities for the Sierra Club; and Dan Mastromarco, 
Executive Director, Travel Council for Fair Competition.
    And if you all would take your place, and I think we will 
start with President Machen from the University of Utah. And if 
you would, try to keep your comments to 5 minutes, and you will 
see the little lights there that go off, but your full 
statements will, without objection, will be put into the 
record.

STATEMENT OF J. BERNARD MACHEN, PRESIDENT, UNIVERSITY OF UTAH, 
                      SALT LAKE CITY, UTAH

    Mr. Machen. Thank you, Mr. Chairman. Mr. Chairman and 
members of the Subcommittee, we very much appreciate the 
opportunity to appear before you today. We are here to seek 
Congressional support through H.R. 1491 for a new museum of 
science and nature on the University of Utah campus in Salt 
Lake City.
    Utah and the intermountain West is a place that is world 
renowned for it natural and cultural history, and millions of 
Americans and foreign guests visit our State and this region 
every year. Over the years, Utah has yielded vast and unique 
collections recording its history, and these are now in the 
care of the Utah Museum of Natural History at the University of 
Utah. Displayed before you over here on my left are photos of 
some of the extraordinary objects that are in our collection.
    As was stated earlier, Utah is a State that is almost 70 
percent owned by the Federal Government. By necessity, research 
on the State's natural and cultural history takes place on 
Federally managed lands. Collections obtained through this kind 
of research and through other Federally mandated recovery 
programs indicate that these collections are in fact Federally 
owned. The University has numerous pieces of correspondence 
from the Federal Government which clearly establishes their 
presumption of ownership over this collection.
    The museum and the University have not shrunk from our 
responsibility as caretakers. Over the years we have made 
significant investments in infrastructure, personnel and 
programs to support the care for these important collections. 
We have asked for and received very little from the Federal 
Government. In fact, during the collection's history, we have 
received less than $300,000 in direct Federal support for the 
management of these collections.
    But at this point, we do need help. We have made 
significant and successful efforts to conserve these 
collections, but our building is not suitable for any further 
upgrading and renovation as a museum. I draw your attention to 
some of the photographs that were included in the written 
testimony. The overhead water pipes clearly threaten these 
irreplaceable objects, and the accident referred to by 
Congressman Matheson is, unfortunately, not a rare occurrence.
    We have run out of room for existing collections, much less 
any future additions, and yet research in the natural sciences 
continues on the public lands, and the research facilities and 
the exhibit space that is accessed by the American public is 
extraordinarily insufficient for what we are trying to do.
    The University has stepped up to the plate and has designed 
a plan to secure these collections and to meet the American 
public's desire to have access to them. We already have a donor 
who has pledged the largest ever single gift to a cultural 
institution in Utah, and in fact 20 percent of the cost of the 
project has already been raised.
    We have secured the land, 14 acres adjacent to the 
University, with a commercial value of $4.2 million. And the 
state of Utah has agreed to cover the building operation and 
maintenance costs in perpetuity, which is currently estimated 
at $800,000 per year. We are confident that we can match every 
Federal dollar 3 to 1.
    The total cost of the project could be as much as $60 
million, and we are asking from the Federal Government for 25 
percent of that cost, $15 million.
    Museums are places of hope. The American public trusts 
museums implicitly. Museums are about the future, and in them 
we learn about our past in order to make more informed 
decisions about our future. This museum was founded by the 
University and by the community so that Americans could have 
access to the Federal collections that have been recovered in 
our region. And we do ask for your partnership in creating this 
extraordinary new museum for the future. Thank you, sir.
    [The prepared statement of Mr. Machen follows:]

  Statement of J. Bernard Machen, President, University of Utah, Salt 
                            Lake City, Utah

Introduction
    We are here today to seek Congressional support for a project to 
build a new museum of science and nature on the University of Utah 
campus in Salt Lake City. Our request is for about 25 percent of the 
cost of the facility. There are compelling reasons for this project and 
for Federal participation in it. The new museum will ensure the safety 
and future preservation of a vast and priceless collection of Federally 
owned objects that have been recovered from Federally managed lands in 
Utah and surrounding regions during the last 150 years. It will greatly 
improve the accessibility of these collections for scientific study and 
it will make them available to the citizens of the United States and 
their children and visitors. The project addresses several issues of 
deep and abiding interest to the American people: the need to 
understand the natural systems and process that have shaped the Earth 
and life on Earth, to understand the human experience on this continent 
and to be literate in the methods and processes scientists use to 
achieve that understanding.
Utah Museum of Natural History
    The nationally accredited Utah Museum of Natural History \1\ (the 
Museum) is Utah's state museum of natural history. It is a public 
educational institution committed to creating and sharing knowledge in 
all aspects of natural science and human cultures, with emphasis on the 
astonishing richness of the Intermountain West, especially the Great 
Basin and northern Colorado Plateau. The Museum is a primary repository 
for Federal agencies in Utah, holding collections from lands managed by 
the Bureau of Land Management (BLM), Bureau of Reclamation (BOR), 
United States Forest Service (USFS), National Park Service (NPS), Fish 
and Wildlife Service (FWS), Department of Defense (DOD), Bureau of 
Indian Affairs (BIA) and from various National State Recreation Areas 
(NRA) and National Monuments. In addition, the Museum is charged by the 
legislature with creating exhibits and other educational programs in 
the natural sciences for the citizens of Utah and their visitors, 
supporting museum activities in the State, and oversight responsibility 
for the State's archaeological and paleontological collections.
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    \1\ The Museum is accredited by the American Association of Museums 
(AAM). The achievement of is recognition of a museum's commitment to 
and achievement of high professional standards of operations. Museum 
accreditation certifies that a museum has undergone a rigorous, 
professional examination established by the AAM. At present 750 U.S. 
Museums (out of approximately 8,000) are accredited by the AAM . The 
Museum was first accredited in 1972 (first museum in the State and 
among the first nationally); reaccredited in 1985 and again in 1999, 
although the latest accreditation was tabled for almost a year because 
of concerns related to the age, structural integrity and HVAC systems 
in collections storage and lab spaces in its building.
---------------------------------------------------------------------------
    The Museum contains collections of more than one million objects 
and specimens, representing all of the natural sciences and describing 
the natural and human history of this region of North America. These 
systematic collections in the disciplines of geology, biology and 
anthropology rank among the largest and most comprehensive in the 
western states. They are regional in scope but global in importance. 
More than 75 percent of the Museum's collections are Federally owned, 
that is, recovered from Federally managed public lands. Ninety percent 
of some collections, such as the vertebrate fossils and botanical 
holdings, are Federally owned. Of the remaining 25 percent of the 
Museum's collections, significant portions were collected on state 
lands under Federally mandated permitting procedures.
    The large number of Federal collections in the Museum is the 
consequence of the high percentage of Federal lands in Utah. The State 
contains vast tracts of Federally managed public lands. Almost 70 
percent of the land area (32.5 million acres) is administered by the 
Federal Government, the second highest percentage for any state in the 
nation. As a consequence, research in the natural sciences in Utah 
predominantly occurs on Federal lands. \2\
---------------------------------------------------------------------------
    \2\ Of this amount, 42.0 percent is managed by the Bureau of Land 
management, 15.3 percent by the National Forest Service, 3.6 percent by 
the Department of Defense, 3.3 percent by the National Park Service and 
1.7 percent by other Federal agencies.
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The Present
    The Museum is housed in the old University library, built in 1932. 
The building does not meet current professional standards for 
collections care, research or interpretation, and is completely full, 
with no room for growth.
    Most collection store rooms, work areas and research laboratories 
are located in a portion of the building that was originally 
constructed as closed-stacks storage. The 7' 2'' ceilings are supported 
at regular 4' by 3' intervals by load-bearing posts designed to hold 
bookshelves. The building was assessed in 1989 (Reaveley Engineers & 
Associates), \3\ 1993 (Patterson), \4\ and 1994 (Lord Cultural 
Resources) \5\ and found to contain points of serious deficiency, 
especially given that it is located within a quarter mile of the second 
most active seismic fault in the continental United States. These 
deficiencies pose threats to the collections and dramatically constrain 
adequate public access. They include seismic instability, inadequate 
fire protection, an antiquated HVAC system, no expansion for 
overcrowded collections storage, inadequate laboratories, no loading 
dock or freight elevator, oversubscribed classrooms and inadequate 
exhibit space.
---------------------------------------------------------------------------
    \3\ Reaveley Engineers & Associates, 1989 Rapid Seismic Evaluation 
of University of Utah Buildings. Report on file, Utah Museum of Natural 
History, Salt Lake City.
    \4\ Peterson, Carl, 1993 Utah Museum of Natural History: IMS 
Conservation Assessment of Anthropology Collections. Report on file, 
Utah Museum of Natural History, University of Utah, Salt Lake City.
    \5\ Lord Cultural Resources Planning and Management, 1994 Utah 
Museum of Natural History Master Plan: Phase I. Report on file, Utah 
Museum of Natural History, University of Utah, Salt Lake City.
---------------------------------------------------------------------------
    Over the years, the Museum and University have made considerable 
effort and invested significant sums to overcome the worst of these 
problems. For example, seismic bracing has been installed on the open 
rack and shelf systems; special rooms have been constructed with their 
own heating, ventilating and air handling systems to house the most 
delicate specimens; open, wooden shelf storage has been covered with 
inert padding. Consultants, including those from Lord Cultural 
Resources Planning and the American Association of Museums have noted 
that significant and successful efforts have been made by the Museum to 
adequately house and conserve the collections, but the building, 
designed as a library, is not suitable for any further upgrading and 
renovation as a museum and in fact puts the collections at risk.
The Project
    The Museum has conducted a series of studies to assess needs, 
determine operational feasibility, and lay a solid foundation of 
facility planning. Lord Cultural Resources Planning and Management was 
retained in 1994 to write a Master Plan, which articulated the urgent 
need for the Museum to move to a new facility with climate control and 
seismic stability for the fragile collections, larger exhibit galleries 
allowing greater public access to the collections, state of the art 
research laboratories, and significantly improved ease of access for 
the public.
    The Museum Building Committee then weighed a variety of site 
options against the criteria laid out in the Lord Master Plan. \6\ 
These criteria included: site area, visibility, compatibility, 
partnership opportunities, accessibility, serviceability, and technical 
and financial factors. The site that best met the criteria was in 
University Research Park. It is still a part of the University campus, 
enabling students and faculty easy access, necessary for meeting the 
Museum's crucial educational mission. At the same time, it is adjacent 
to Salt Lake City's zoo, living history heritage park, and state 
arboretum; such clustering of cultural institutions encourages 
cooperative and coordinating programs as well as ease of access by the 
public. Located in the eastern foothills of Salt Lake City, the site 
allows extraordinary opportunities in research and interpretation for 
the Museum. Although within the city limits, the site is bounded to the 
east by land controlled by the U.S. Forest Service. It is unusual for 
an urban museum to have such immediate access to wild lands.
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    \6\ The Museum Building Committee is comprised of the University 
Facilities Planning Office, Museum Management staff, and Museum 
Advisory Board members.
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    In 1998, the Museum retained Ralph Appelbaum Associates to develop 
a conceptual plan for the new facility at the Research Park site. The 
plan conceives of a facility carefully integrated into the site, 
relatively invisible from the city side. Collections, exhibits, 
laboratories, classrooms will all be seamlessly connected, with the 
institution serving as a window into the process of science and the 
natural history of Utah.
    The Museum has just completed an architectural pre-program study to 
estimate the project scope and budget, analyze comparable facilities, 
and conduct a site analysis and detailed parking study. The following 
is a summary of the budget for the project, calculated with inflation 
(construction estimated to begin in 2004).
[GRAPHIC] [TIFF OMITTED] T2929.002

Public-Private Partnership
    The new Museum facility is envisioned as a private-state-Federal 
partnership. The University is confident of its ability to match any 
congressional investment in the new facility which, of course, is 
concerned with housing and interpreting primarily Federally owned 
collections. University donors are very much interested in the project 
and have indicated that, should congressional funds become available, 
they will be leveraged three private/state dollars for each Federal 
dollar. The Federal willingness to participate in the project is, of 
course, key to its success.
    The University of Utah has contributed the land, 14 acres with a 
market value of almost $8,000,000. The State of Utah has guaranteed the 
ongoing funds to operate and maintain the building ($800,000 annually). 
To date, $11,955,000 in cash or pledges has been received from eight 
private foundations and individuals for the building itself; this 
includes a single gift of $10,000,000 explicitly pledged as a match for 
congressional funding.
History of Federal Support
    The citizens of Utah have invested a great deal in assembling and 
caring for the Federal collections that are housed in the old library 
on the University of Utah campus. The Museum, its donors, the 
University and the State are heavily vested in the research, planning, 
infrastructure, trained personnel, and ongoing resources required to 
assemble and adequately care for and interpret Federally owned objects. 
Federal laws and regulations govern the recovery and subsequent care of 
objects and data from Federal lands and set properly high standards for 
collections storage conditions, treatment, management and access. The 
Museum uses primarily state and private funds to meet those standards. 
Federal support for the collections has come in the form of grant 
awards for specific collections related projects rather than ongoing 
care.
    Since its founding in 1969, and excluding competitive Federal 
grants, the Museum has received less than $300,000 in Federal funding 
for collections inventory and care. During that period, the Museum also 
has benefited from a number of competitive Federal grants from the 
Institute of Museum and Library Services, the National Science 
Foundation, Department of Education, National Historic Publications and 
Records Commission, the National Endowment for the Humanities and the 
National Endowment for the Arts, to support exhibit development, 
programming, research and collections care. \7\ Some of these awards 
have supported activities required by the provisions of the Native 
American Graves Protection and Repatriation Act (NAGPRA). For example, 
in partnership with the State Division of Indian Affairs and the State 
Division of History, the Museum was recently awarded $67,840 by the NPS 
to provide one year of salary for a State NAGPRA Coordinator. The 
position will be housed at the Museum and will facilitate compliance 
efforts by Federal and state land managing agencies, museums and Indian 
nations throughout the State.. The Museum also recently was honored to 
receive a $50,000 Save America's Treasure grant to support the study 
and conservation of a remarkable trove of prehistoric moccasins 
recovered in the 1930's from a cave near the Great Salt Lake. To date, 
however, there have been no Federal investments in the infrastructures 
(storage facilities, research laboratories etc.) that provide the 
critical foundation for good collections care. \8\ Clearly, more needs 
to be done to keep this important scientific resource safe and 
available to the citizens of United States, their children and 
visitors.
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    \7\ Since its founding, the Museum has received a total of slightly 
more than $1.3 million in competitive Federal grants for the entire 
scope of its activities.
    \8\ It is important to note that Congress recently directed a 
$500,000 Economic Development Initiative grant to the University to 
support design and planning for the new museum building.
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Detailed Descriptions of Federal Collections at the Utah Museum of 
        Natural History
    The collections curated at the Museum document all aspects of the 
region's natural history: birds, mammals, reptiles, insects, plants, 
rocks, minerals. They describe its ancient human past and affirm the 
vibrant contemporary lives of its First Nation inhabitants. They 
testify to the changes resulting from 150 years of urbanization and 
modernization and to hundreds of millions of years of adaptations and 
evolution of its animal and plant communities. Many aspects of the 
collections are of global interest: the carnivorous dinosaurs from the 
world famous Cleveland Lloyd quarry and other Utah sites, the 
perishable prehistoric artifacts from Utah's remarkable dry cave sites, 
and the diversity of the montane life inhabiting the mountain islands 
of the western Utah. The collections constitute a primary resource for 
Native American communities, students, artists, tourists, and the 
general public.
    This region has been a center for research in the natural sciences 
for more than a century. Its arid lands provide large exposures of 
ancient landscapes that produce bones and fossils that date from 10,000 
to over 1 billion years ago, its famous dry caves have captured the 
essence of more than 10,000 years of human occupation prior to 
Euroamerican settlement. In fact, every major period of the earth's 
geologic history is represented in natural exposures in the State. This 
landscape provides remarkable opportunities for geologists, 
paleontologists, archaeologists, historians, and biologists to advance 
the knowledge in their fields for the benefit of the American public. 
Along all these dimensions, and others, the collections held by the 
Utah Museum of Natural History are national public treasures.
Archaeological Collections
    Approximately 3/4 million artifacts recovered from about 3,800 
sites are stored at the Museum. Taken as a whole, the archaeological 
collections describe the deep antiquity and full breadth of human 
experience in the Great Basin. The collections contain material from 
the earliest investigations in the area, including the seminal work at 
Ancestral Pueblo (Anasazi) sites during the first decade of the 20th 
century, and investigation of the caves around the Great Salt Lake 
during the 1930s. The Museum also houses complete collections from 
major Federal salvage programs including the Glen Canyon and Flaming 
Gorge dam projects. Approximately 71 percent of the archaeological 
collections are Federal: 33% BLM, 53% BOR, 7% USFS, 4% NPS, and the 
balance from the FWS and DOD. All of the Museum's archaeological 
collections recovered prior to November 1990 are subject to the 
provisions of NAGPRA. \9\
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    \9\ Because the anthropology collections have special significance 
for Utah's Native American communities, the Museum convened an Indian 
Advisory Committee. The Committee meets regularly to consult on the 
use, care, disposition, and interpretation of Native American 
materials, and repatriation issues. This committee is composed of 
tribal representatives from Utah's eight nations. The committee also 
includes representation from the University's Native American student 
association and Department of Ethnic Studies, the State Division of 
Indian Affairs, the Native American Education Specialist for the State 
Division of Education, and urban Indian organizations. The Museum has 
and continues to implement all applicable provisions of Native American 
Remains Protection and Repatriation Act.
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Biological Collections
    These collections constitute one of the most complete sources of 
information on biodiversity of the Intermountain West, and represent an 
invaluable resource for regional research in systematics, biogeography, 
zooarchaeology, and conservation biology. They include specimens and 
associated data acquired during decades of biological research at the 
University of Utah, as well as material received from other regional 
institutions. The biology collections include:
Plant Collections
    The Garrett Herbarium contains many examples of rare or endangered 
species, including most of Utah's 300+ endemic plants, and 
irreplaceable specimens from riverine environments that are now 
reservoirs (e.g., Glen Canyon and Flaming Gorge). Many recent 
acquisitions are voucher specimens for biochemical and/or cytogenetic 
analyses that have exceptional research value. Other features of the 
Herbarium contribute to the value of the collection. Recent analysis 
indicates that the Herbarium will be an important resource for future 
DNA studies of regional flora. The collection also shows uncommonly 
high levels of seed and spore germination, providing scientists the 
rare opportunity to grow living plants from dried specimens collected 
many years ago. This makes the collection extraordinarily valuable as a 
source of living research materials. The collection comprises nearly 
121,000 specimens, 70 percent from Utah and the remaining 30 percent 
from around the United States and the world. It is the third largest 
herbarium in Utah and ranks in the top 15 percent worldwide. No other 
collection has such a complete representation of plants from Utah's 
Wasatch front and Salt Lake Valley. The flora of this area is rapidly 
being altered and displaced by urbanization and the Herbarium provides 
a crucial historic baseline from which to judge the environmental 
health of the entire Salt Lake region. An estimated 90% of the 
collections are Federal; of those 48% are USFS, 39% are BLM; 1.2% are 
NPS, 1.4% are BIA; 0.62% are NRA; 0.03% are DOD.
Zoological Collections
    The zoology collections housed at the Museum contain materials 
dating from the 1870's. These collections grew rapidly during the first 
half of the 20th century and include the results of pioneering 
statewide biological inventories. By the late 1950's, the University of 
Utah was widely recognized as an important center for work on 
evolutionary systematics of birds, mammals, reptiles and various 
arthropods, (insects, crustaceans, etc.). The research collections 
devoted to these groups are historical archives documenting the rich 
natural diversity of the Intermountain Region and major changes in its 
animal populations.
    The Museum's collection of mammals (30,0000 specimens) is one of 
the 30 largest collections of its kind in the western hemisphere. While 
the collection is primarily regional in scope, from the eastern Great 
Basin, southern Columbia Plateau, northern Colorado Plateau and central 
Rocky Mountains, there are also significant numbers of specimens from 
the eastern U.S., Alaska, Central America and the Philippines.
    The bird collection (20,000 specimens) is one of the largest and 
most complete assemblages in the Intermountain Region, with a large 
number of specimens and nesting records from the late 19th and early 
20th centuries. The collection also includes important holding from 
Alaska, Kansas, Oregon, Arizona, Thailand and the South Pacific.
    The reptiles and amphibian collection (18,000 specimens) is one of 
the largest collections of turtles in the world, and includes Utah 
specimens from the early decades of the 20th century.
    The Museum also holds two separate collections of invertebrates. 
The insect collections (120,000 specimens) contain historically 
significant material collected during the first half of the 20th 
century throughout the western United States. The mollusks (shells) 
includes 25,000 research specimens of native Utah species and shells 
from around the globe. These collections support basic research in 
areas of evolutionary systematics, zoogeography, functional morphology, 
ecology and zooarchaeology and are also a resource for intellectual and 
popular public interest in biological diversity. About 90% of the 
vertebrate specimens and 62% of the balance of the biological 
collections from Utah were recovered on lands managed by agencies of 
the Federal Government (BLM, USFS, NPS, FWS, and DOD).
Paleontology Collections
    The world class paleontology collections at the Utah Museum of 
Natural History contain fossil vertebrates, invertebrates and plant 
specimens collected from Utah and surrounding western states as well as 
numerous international localities. This region is recognized as one of 
the most important sources of Jurassic aged fossils on earth, with 
museums worldwide displaying dinosaurs recovered here.
    The vertebrate fossil collection (animals with backbones, 
approximately 12,000 specimens), is the largest of three paleontology 
collections at the Museum. This collection is rapidly expanding as a 
result of ongoing work in Utah. Currently, the collections are 
dominated by classic dinosaurs from the Late Jurassic (about 150 
million years ago). Most numerous are specimens collected from the 
internationally renowned Cleveland Lloyd Dinosaur Quarry. This gigantic 
predator trap preserves thousands of bones representing numerous 
dinosaur species, but by far the most dominant is Allosaurus fragilis, 
Utah's state fossil. Indeed the Cleveland-Lloyd Quarry includes the 
largest accumulation of Allosaurus known anywhere in the world. The 
Museum is also the repository of thousands of Cretaceous aged (85-65 
million years old) fossils, including fishes, amphibians, and mammals, 
as well as dinosaurs. This region is also famous for Pleistocene (Ice 
Age) remains, and the Museum houses a representative collection of 
large mammals from this period, including giant bears, bison, mammoths 
and mastodons.
    Recently, the Museum accepted transfer of the Ash Paleobotany 
Collection, an important assemblage of fossil plants that represents 
the largest Triassic fossil plant collection outside of the Smithsonian 
Institution. Although a precise count is not yet available, the 
collections occupies some 150 large storage drawers. The paleobotany 
collections also include fossil plants from other geological periods 
and international localities as well.
    Other important aspects of the Museum's holdings include the 
invertebrate fossil collection (animals without backbones), and 7,000 
rocks and minerals recovered from sites around the globe. About 80% of 
the fossil collections are from Federal lands. The remaining 20% 
represent material collected from the Long Walk Quarry, an important 
early Cretaceous dinosaur site that is owned by the Museum, and 
materials from state lands and international sites.
Conclusion
    The project we have described today is one with relevance for an 
important number of American people. The Federally owned collections 
housed at the Utah Museum of Natural History and the research, exhibits 
and programs they support deal with issues of serious concern. They 
document the recent and distant past and thus inform decisions about 
the future.
    The new Museum is proposed to be built at the University of Utah, 
an internationally recognized center for scientific research, in a 
landscape that is known around the world for its natural and cultural 
history and antiquities. It is proposed to be built in Salt Lake City, 
the capital city of Utah and indeed, of the Intermountain West; Salt 
Lake City is the largest city between Denver and San Francisco. It is 
proposed to be built in a state with the second highest percentage of 
Federally managed land in the United States. Federal dollars will be 
matched at a 3:1 ratio. The project will protect a priceless collection 
of Federally owned objects, specimens, records and photographs 
currently at risk, and will make this resource available to the 
American public, their children and their visitors. The Committee's 
favorable consideration of this project is essential to its success. We 
thank you for your time.
                                 ______
                                 
    Mr. Hefley. Thank you, Dr. Machen, and I think we will go 
ahead with the questions for you, because Mr. Matheson is here 
for that purpose, I think, and I don't want to unduly delay 
him.
    Mr. Matheson, do you have questions?
    Mr. Matheson. Well, thank you, Mr. Chairman. I will just 
ask a couple of questions, if I may. President Machen, welcome. 
I would like to ask how much of your future funding is 
contingent upon receipt of Federal support for this project.
    Mr. Machen. The initial $10 million gift we received from 
the Jones Foundation that you mentioned is in fact a matching 
gift. We must raise the additional monies in order to leverage 
this kind of gift, and in our part of the country, private 
donors are very interested in public-matched contributions. 
That is why this partnership is so appealing to our people, and 
that is why I think we have been successful to date and why I 
think it is fundamental for the rest of the project to come 
together.
    Mr. Matheson. When the project is completed, what will the 
role of the Federal Government be in terms of either 
maintenance or administration of the museum?
    Mr. Machen. Their contribution is one time, the part that 
we think is the most palatable to the Federal Government. We 
will maintain the project--the building and the collections--in 
perpetuity with funds from the State and from the University.
    Mr. Matheson. If the natural history museum receives the 
funding we talked about in this bill today, what proportion of 
remaining funds would still be needed, and how is the museum 
going go about--how do you intend to go about raising 
additional funding?
    Mr. Machen. If we were fortunate enough to get the Federal 
contribution, that would put us over 50 percent in our fund-
raising efforts. And we think that kind of support will 
catalyze the remaining fund-raising efforts. The kinds of 
things we are looking at for private contributions are 
individual exhibit halls and individual naming opportunities 
that would come in after the bricks and mortar for the main 
building is secured. We think that would be the easy part. The 
hard part is getting the basic structure built.
    Mr. Matheson. Can you talk a little bit about your sense of 
the public support for this project in Utah and elsewhere 
maybe?
    Mr. Machen. This is the State Museum of Natural History. 
Within 50 miles of the University of Utah campus, 75 percent of 
the people of Utah live. As I told you, most of the land in 
Utah is not private land, so we have a very high concentration 
of people right around our urban campus. Currently the number 
of public school children who visit the current facility is 
extraordinary. We have a constant traffic jam with the yellow 
buses that are parked outside. We believe that the availability 
of additional education space will simply mean that more of our 
school children and more of our visitors will come to this 
facility.
    Mr. Matheson. Well, I appreciate you coming, and, Mr. 
Chairman, I will yield back the balance of my time.
    Mr. Hefley. Thank you. Mr. Simpson?
    Mr. Simpson. Mr. Chairman.
    Dr. Machen, I am sorry that I missed your testimony. Let me 
clarify one thing. The $10 million that you received needs to 
be matched. Does the Federal--if this is appropriate, does that 
qualify as a match, or does it have to be privately raised?
    Mr. Machen. No. This would be qualifying as the match.
    Mr. Simpson. I appreciate that. While I do intend to 
support this, because I think it is important, I must admit 
that I could enthusiastically support it if it went to my alma 
mater, to Utah State University, but that is--you know, that is 
one of those things. Utah is beating up on us too often, but 
that is okay. I appreciate you being here today.
    Mr. Machen. Thanks for your understanding.
    Mr. Hefley. Mr. Simpson, I will entertain an amendment to 
that effect if you would like.
    Mr. Simpson. Well, I am sure that when this comes before 
the full Committee--that as long as we are building a new 
building, Mr. Chairman.
    Mr. Hefley. Are you through, Mr. Simpson?
    Dr. Machen, I think Mr. Simpson does raise an issue, 
though. Does Utah State or Brigham Young have similar 
facilities--similar museums?
    Mr. Machen. They do not.
    Mr. Hefley. They do not. So yours is the only museum--
archaeological museum of this type in Utah?
    Mr. Machen. That is correct. And it is designated as the 
State Museum of Natural History.
    Mr. Hefley. Okay. So you wouldn't be duplicating--.
    Mr. Machen. No, sir.
    Mr. Hefley. --that resource?
    Can you tell me--you mentioned the water pipes, but except 
for the crowdedness of the building, what kind of damage is 
likely to occur to the collections if they are kept there? And 
I suppose one of the things is that you can't display them 
properly, and that is a major concern. But what about damage to 
the collections?
    Mr. Machen. Well, we mentioned the potential for 
earthquakes--this is an old library where Congressman Hansen 
studied as a student, and it is poorly constructed. I won't--I 
am glad he is not here now. But--.
    Mr. Hefley. Let me make sure I spell your name right.
    Mr. Machen. Oh, he knows how to spell it. But the building 
itself is--it is in danger of imploding on the collection. It 
is conceivable that if we can't figure out a way to move it to 
a place where we can display it more openly, we are going to 
have to think in terms of just the safety of the collection, 
because the current facility is dangerous in terms of the fact 
that it could fall in on it.
    Mr. Hefley. I don't think I have any further questions, 
except my background is with the University of Oklahoma, and 
they have an outstanding museum such as this there now. Would 
you consider moving the collection down there? I suppose that 
would be out of the question.
    Mr. Machen. Well, it is a long way to Oklahoma.
    Mr. Hefley. Indeed it is. Thank you very much for making 
the trip out here and for making this case. You make a very 
good--a very good case.
    Mr. Machen. Thank you, sir.
    Mr. Hefley. We appreciate it.
    If there are no further questions related to this subject, 
let us go to the next subject, and Dave Simon, we will start 
with you. Dave, as I mentioned earlier, is the director of 
outdoor activity for the Sierra Club.

STATEMENT OF DAVE SIMON, DIRECTOR OF OUTDOOR ACTIVITIES, SIERRA 
                CLUB, SAN FRANCISCO, CALIFORNIA

    Mr. Simon. Mr. Chairman, thank you, members of the 
Committee. My name is Dave Simon, as he mentioned, and I am the 
Sierra Club's director of outdoor activities. Thank you for the 
opportunity to testify on behalf of the Sierra Club's 700,000 
members in opposition to H.R. 1461, legislation to amend the 
National Parks Omnibus Management Act of 1998. We strongly 
oppose H.R. 1461. It does not benefit the public nor the 
national park resources, and it would curtail or eventually 
terminate the Sierra Club's voluntary educational-led trips in 
the national parks.
    This legislation will not only impair the manner and scope 
of the Sierra activities but those of others. The other groups 
includes such diverse organizations as the Boy Scouts, the Girl 
Scouts, Catholic Youth Organizations and summer camps.
    This year the Sierra Club is celebrating the centennial of 
our outdoor activities program. Beginning with John Muir and 
continuing throughout the Club's history, direct outdoor 
experience has motivated Club members to become advocates for 
environmental protection. As Muir said, ``If people in general 
could be got out into the woods, even for once, to hear the 
trees speak for themselves, all difficulties in the way of 
forest preservation would vanish.'' The only reason we have an 
outdoor activities program is to inspire our members about the 
natural world.
    Outings are led by volunteer leaders and are conducted with 
high regard for the safety of our participants and ethical 
standards of land use. There is a small administrative staff in 
San Francisco. Outdoor activity programs range from locally 
organized day hikes and overnights to week-long backpacking and 
service trips to outings for inner-city youth. Many outings are 
free and others are priced with a goal of recovering cost to 
the extent possible so that this vital educational program is 
not a drain on other Club activities or resources.
    Unfortunately, this is a difficult goal to achieve. In 
fiscal 2000, for example, the audited financial statements of 
the Sierra Club indicate that the outdoor activities program 
had revenues of $4.1 million, expenses of $4.9 million. In 1999 
revenues were 4 million and expenses were 4.4 million.
    Despite the perception of some in the outdoor recreation 
industry, the Sierra Club does not generate a surplus from its 
outdoor activities that it uses to subsidize other programs. 
One-week backpack trips are priced at $450, 10-day service 
trips at $350. There is no surplus to be generated at those 
prices.
    With that background, I would now like to talk about why we 
oppose H.R. 1461. The 1998 act challenged the assumption that 
all visitor services should be provided by commercial 
outfitters. The act allows groups to provide their own guide 
services for their members, as long as no taxable income is 
derived from those trips. This change is good public policy. 
Institutional groups have the competence to guide their own 
trips and do not need commercial outfitter services and should 
not be forced to either pay for them or be denied access to the 
national parks, as is currently the case in some of the parks.
    The reality is that institutional groups and commercial 
outfitters are not in competition with each other for 
commercial recreation users. Unlike commercial outfitters, 
groups conduct far fewer trips involving far fewer visitors. 
And institutional groups engage in educational and civic 
activities that are not generally offered by for-profit travel 
organizations. A dozen Sierra Club members on a trip I led last 
summer to the High Sierra had a Sierra Club experience. They 
learned about leaving little or no trace on the land. They 
shared with the cooking and cleaning chores. They hauled their 
own gear and some of the communal gear. They learned about 
local environmental threats. They did all sorts of things that 
are not the focus of other fine for-profit travel programs.
    The Sierra Club is not looking for preferences. In reality, 
the 1998 act does not confer a preference onto institutional 
groups nor does it lead to a misuse of resources. Institutional 
groups like the Sierra Club must still compete for wilderness 
permits, and we must still conduct our trips in accordance with 
land management plans and regulations.
    If H.R. 1461 is implemented, the Sierra Club, the Boy 
Scouts, the Girl Scouts, church groups, summer camps, groups 
which work with the Park Service on providing visitor education 
and conduct service trips to improve park resources, will be 
unfairly precluded from continued use of the national parks.
    Accordingly, we urge you to reject 1461 so that valuable 
children's educational and civic programs in our national parks 
are not endangered. And I would like to thank you for the 
opportunity to convey the views of the Sierra Club and our 
700,000 members, and we look forward to working with the 
Committee as it further considers H.R. 1461. Thank you.
    Mr. Hefley. Thank you.
    [The prepared statement of Mr. Simon follows:]

  Statement of Dave Simon, Director of Outdoor Activities, The Sierra 
                           Club, on H.R. 1461

    The Sierra Club, a non-profit organization with 700,000 members 
nationwide, appreciates the opportunity to submit testimony to the 
Subcommittee regarding H.R.1461, legislation to Amend the National 
Parks Omnibus Management Act of 1998. Sierra Club strongly opposes H.R. 
1461 because it does not benefit the public or National Park resources 
and it would curtail or eventually terminate the Club's volunteer-led 
environmental education trips in the National Parks.
    The Sierra Club's mission is to explore, enjoy and protect the wild 
places of the earth; to practice and promote the responsible use of the 
earth's ecosystems and resources; to educate and enlist humanity to 
protect and restore the quality of the natural and human environment; 
and to use all lawful means to carry out these objectives. Thus the 
Club operates at local, national and international levels to promote 
and protect the environment, through volunteer leadership and with paid 
staff.
    H.R. 1461 rescinds a key provision of the National Parks Omnibus 
Management Act of 1998 that ensures a better balance of access in the 
National Parks by bona fide non-profit institutional groups and the use 
made by outfitter and guide concessionaires. The proposed legislation 
will not only impair the manner and scope of Sierra Club outdoor 
activities conducted in the National Parks, it will also damage or 
curtail activities of other groups operating children's, educational, 
and civic programs.
    Over the years, institutional groups that make no taxable income 
from Park use have been increasingly required to use outfitter and 
guide concessionaires to access several National Parks. In other cases, 
these groups have had to compete with for-profit ventures for 
commercial use authorizations. The 1998 Act recognized that these 
groups provide a service to their members that is often unavailable 
from commercial ventures. In addition, these groups have the competence 
to guide their own trips without the need for the services of outfitter 
and guide concessionaires. These groups should not be denied access to 
the Parks or forced to pay for services that are not required.
I. SIERRA CLUB OUTDOOR ACTIVITIES OVERVIEW
    In 2001, the Sierra Club is celebrating the Centennial of its 
outdoor activities program. A hundred years ago, at the request of John 
Muir, William Colby led one hundred Sierra Club members on a one-month 
trip in Yosemite that later became known as the ``High Trip''.
    The Sierra Club now has three Outdoor Activities program areas: 
National/International Outings, Group/Chapter Outings, and Inner City 
Outings. All of these programs are integrally related to the mission of 
the Sierra Club--to explore, enjoy and protect the wild places of the 
Earth. Beginning with John Muir and continuing throughout the Club's 
history, direct outdoor experience has motivated and prepared Club 
members to become advocates for wilderness preservation and 
environmental protection. As Muir said, ``If people in general could be 
got out into the woods, even for once, to hear the trees speak for 
themselves, all difficulties in the way of forest preservation would 
vanish.''
    In general, the goal is to conduct outings on which participants:
     Lhave an enjoyable, consciousness-raising outdoor 
experience
     Llearn about the conservation issues relating to the area 
visited and the Club's general conservation goals
     Llearn new outdoor conduct and skills
     Lincrease their natural history awareness
     Lexperience a broad range of cultural values.
    Outings are led by volunteer leaders and are conducted with a high 
regard for the safety of participants and ethical standards of land 
use.
    National/International Outings. The program is conducted on a 
fiscally self-sustaining basis with trip prices set so that the program 
breaks even in the long-term. The program has about 700 active 
volunteers leading approximately 310 domestic and 40 international 
trips per year that provide an outdoor experience for about 4,000 
Sierra Club members. Most trips are between one and two weeks in 
length, with approximately 150 trips in the National Parks, and another 
50 trips on other Federal lands. There is a small staff in the San 
Francisco headquarters that handle administrative duties such as 
answering member questions and taking reservations, publicizing trips, 
arranging volunteer leader training and travel, and paying trip 
expenses.
    The National/International Outing program consists of four 
categories of trips that advance the mission of the Sierra Club in 
unique ways:
     LDomestic Trips. There are a variety of trips throughout 
the United States ranging from base camp (one location) and highlight 
trips (several locations with transportation provided between 
locations), to hard-core Sierra backpacks, to easy family trips. There 
are also specialty trips: women-oriented trips, age-specific trips, and 
singles trips.
     LService Trips. Ever since the first service trip in 1958 
to remove trail garbage in Kearsarge Pass in the southern Sierra 
Nevada, the Club's service trips program has become one of the pre-
eminent wilderness restoration and public lands maintenance programs in 
the United States. Service trip participants build trails, repair 
damage from campers, survey and map fragile Native American 
archaeological sites, and re-vegetate distressed areas.
     LActivist Trips. The activist trips take members to areas 
that the Sierra Club is working to protect and provide trip 
participants with the tools and inspiration to become advocates for 
those areas. Trip participants then return to their local communities 
to share their newly acquired skills, knowledge, and passion with other 
environmentalists and the general public.
     LInternational Trips. A variety of trips are conducted 
including trekking, rafting, alpine hiking, van touring and naturalist 
excursions. International trip participants learn about the native 
cultures and fragile ecosystems while respecting local traditions.
    Group/Chapter Outings. The program is conducted on a direct cost 
recovery basis (park entry fees, etc.) with many outings being free. 
The program has approximately 5,000 active volunteers leading 
approximately 20,000 outings serving several hundred thousand Sierra 
Club members and guests. Most trips are day trips and few are run on 
National Park and other Federal lands. There is a staff of two in the 
San Francisco headquarters that handle administrative duties such as 
providing policy guidance, addressing risk management issues, assisting 
local programs in providing leader training and certification, and 
helping enhance the educational aspects.
    Inner City Outings: The Inner City Outings (ICO) program is 
entirely grant funded through tax-deductible donations. ICO provides 
outdoor experiences for persons who might not otherwise have them, 
including low-income youth of diverse cultural and ethnic backgrounds, 
hearing or visually impaired individuals, and the physically disabled. 
Currently, the 47 ICO groups provide about 1,000 outings per year, 
totaling 19,000 participant days. Only a few of these trips are run on 
Federal lands. The goals of ICO are to:
     Lpromote personal development by linking cultures, 
fostering respect of self and others, and providing leadership skills
     Lpromote appreciation and protection of our local and 
global environments through a process of educating and sharing.
    All of the different types of Sierra Club outings incur some level 
of overhead costs, in particular insurance, publicity, and logistical 
coordination. The Sierra Club Board of Directors has directed the 
Outings Department to recover these costs to the extent possible so 
that this vital program is not a drain on other Club activities or 
resources. Unfortunately, this is a difficult goal to achieve. In 
fiscal year 2000, for example, the audited financial statements of the 
Sierra Club indicate that the Outdoor Activities program had revenues 
of $4.1 million and expenses of $4.9 million; in 1999, revenues were 
4.0 million and expenses were 4.4 million.
    Despite the perception of some in the outdoor recreation industry, 
the Sierra Club does not generate a surplus from its outdoor activities 
that it uses to subsidize other programs. On the contrary, the opposite 
is true - general Club funds are used to subsidize this vital education 
program. The Sierra Club wants to expose our members to the natural 
world so that they will be inspired and take responsibility for its 
protection. That is why one-week backpacking trips are priced at $450 
and ten-day service trips at $350. There is no surplus to be generated 
at these prices.
II. OPPOSITION TO H.R. 1461
    The National Parks Omnibus Management Act of 1998 challenged the 
assumption that all visitor services should be provided through either 
concessionaires or holders of commercial use authorizations. For non-
profit institutional groups not deriving taxable income from their 
trips, the 1998 Act allows groups to provide their own guide services 
for their members. These groups have the competence to guide their own 
trips and do not need the services of concessionaires and guides - and 
should not be forced to pay for them.
    When its provisions are implemented, the 1998 Act will remove the 
requirement that groups either compete with for-profit ventures for 
commercial use authorizations or, as is required in some Parks, use 
outfitter and guide concessionaires in order gain access. These changes 
are good public policy. Unlike commercial outfitters, institutional 
groups, many relying on volunteer leadership, take many fewer trips 
involving far fewer visitors to the Parks. Institutional groups engage 
in educational and civic activities and do not compete with outfitters 
and guides concessionaires for commercial recreation users.
    The Sierra Club is not looking for preferences - it is trying to 
avoid being either denied access to the National Parks or being forced 
to use outfitter or guide concessionaires. In reality, the 1998 Act 
does not confer a preference for institutional groups nor does the 1998 
Act lead to misuse of resources. Non-profit institutional groups like 
the Sierra Club must still compete for wilderness permits and conduct 
its trips in accordance with land management plans and regulations. 
However, while the Club and other groups are not looking for 
preferences, we do want a fair allocation of any resource use that is 
allowed.
    If H.R. 1461 is implemented, various institutional groups which now 
use units of the National Park System would not be able to continue 
their patterns of use. These groups not only include various types of 
youth camps, but also outdoor organizations who typically organize and 
lead their own trips to many types of public land areas. Many of these 
groups work with the Park Service on visitor education. Some even 
conduct service trips to improve Park resources. It would be unfair to 
preclude these groups from continuing this type of use of the National 
Park System.
    Accordingly, we urge you to reject H.R. 1461 so that valuable 
children's, educational and civic programs conducted in our National 
Parks are not endangered.
    We thank you for the opportunity to convey our views and look 
forward to working with the Subcommittee as it further considers H.R. 
1461.
                                 ______
                                 
    Mr. Hefley. Mr. Mastromarco.

   STATEMENT OF DAN MASTROMARCO, EXECUTIVE DIRECTOR, TRAVEL 
       COUNCIL FOR FAIR COMPETITION, ALEXANDRIA, VIRGINIA

    Mr. Mastromarco. Thank you, Mr. Chairman. It is nice to 
begin my testimony knowing that the Sierra Club and the 
administration both support 1461. If it weren't for the first 
and last sentences of their testimony, I would think they fully 
endorse the bill.
    Let me begin in an unusual way by recognizing what this 
hearing is not about today. It is not about denying Boy Scouts 
access to National Parks, nor is it about denying nonprofits 
the ability to use parks or even to conduct profitmaking 
activities in the parks. The hearing is about repealing a 
gaping loophole that allows tax-free, license-free and 
regulatory-free use of National Park lands by a special class 
of business, depending on what tax return they file. It is 
about restoring equity between commercial users of parks; 
returning to local managers the ability to oversee resource 
use; abandoning an ill-conceived notion that nontaxable equates 
to noncommercial.
    Through section 418, Congress gave park managers authority 
to issue CUAs--commercial use authorizations--but only when 
that use has minimal impact on resources, is consistent with 
the preservation and conservation of park resources, and is 
either incidental or involves commercial operations of less 
than $25,000.
    However, during the 11th-hour consideration of this 
language, without debate, without the knowledge of small firms, 
and without any apparent rationale, Congress exempted 
nonprofits from the need to obtain CUAs unless they have 
taxable income.
    So what is the harm in exempting nonprofits who don't have 
taxable income?
    If we listen to the testimony of the Administration, there 
is no problem, but for one: Section 418(c) really just exempts 
all nonprofits from the requirement to obtain CUAs at all 
without expressly doing so.
    Taxable income implicitly refers to the notorious unrelated 
business income tax, a provision that taxes income only when it 
is, not substantially related, to the exempt purposes of the 
organization.
    By requiring a subjective balancing act, UBIT offers a nice 
theoretical and academic standard but one that is famously 
unenforceable. Even the Department of Treasury has admitted 
that UBIT's practical result is an ad hoc test that offers 
inadequate guidance to the courts, exempt organizations and 
revenue agents. In fact, unless advised by thoroughly 
incompetent and bumbling counsel, nearly any nonprofit can 
successfully exempt fees for recreational purposes from tax. 
And they do.
    Take the Sierra Club. The Sierra Club mission is to partly, 
explore and enjoy the wild places of the Earth. So the more the 
exploration, the more enjoyment, the more closely it furthers 
this exempt purpose. There is no surprise that the Sierra 
Club's Form 990 tax return shows more than $6 million in 
taxable income from trips totally exempt.
    Even if the National Park Service decided to train its 
personnel to be tax lawyers and the UBIT bar was raised, 
technical problems with the UBIT standard exist. For example, 
how would the National Park Service determine the appropriate 
level of deductions allocable to that activity?
    The unworkability of the UBIT standard is no small matter, 
because nonprofit activity is not small business anymore. UBIT 
was enacted when nonprofits constituted less than 1 percent of 
the gross domestic product of this country and numbered fewer 
than 46,000. That was in 1950. Tax-exempts constitute more than 
12 percent of gross domestic product today, and there are more 
than 1.5 million of them, 650,000 501(c)(3)s. If you are still 
wondering why small businesses are upset, consider that unfair 
competition was rated a top concern in both the 1995 and 1986 
White House Conferences on Small Businesses. Small businesses 
hoped to see a dismantling of competitive barriers, not 
construction of new ones.
    But you don't need to be a tax lawyer to ask a more 
fundamental question, Mr. Chairman. Is the UBIT standard the 
right standard to employ for resource management reasons? What 
connection is there between the furtherance of an objective to 
explore and enjoy the wild places of the Earth and the need of 
park managers to regulate use? The more exploration, the more 
enjoyment, the more park managers should be able to regulate.
    But don't take our word for it. Take the word of Outward 
Bound, another nonprofit. They said the larger issue here is 
one of accountable use by all parties, regardless of tax 
status. The objective should be to partner with park managers 
and provide quality visitor services, while simultaneously 
protecting and preserving park resources. We could not have 
said it more eloquently. Section 418(c) will not be missed by 
anyone with the exception of a few abusive nonprofits.
    Mr. Hefley. Thank you very much.
    [The prepared statement of Mr. Mastromarco follows:]

Statement of Dan R. Mastromarco, Executive Director, Travel Council for 
                        Fair Competition (TCFC)

    Chairman Hefley and Members of the Subcommittee on National Parks, 
Recreation and Public Lands:
    As Executive Director of the Travel Council for Fair Competition 
(TCFC), I thank you for focusing this hearing on H.R. 1461 and the 
problem it addresses. TCFC was formed 7 years ago with two objectives: 
first; to raise public awareness of a growing problem of unfair 
commercial competition by nonprofits against for-profits; and second, 
to defeat misguided public policies which contribute to that problem. 
We are comprised of eight small business trade associations. 
1 In turn, these organizations represent tens of thousands 
of tax-paying small firms--campground owners, concessionaires, 
outfitters, and hospitality providers--with hundreds of thousands of 
employees who struggle against unfair nonprofit competition. TCFC 
member companies introduce Americans to the National Parks and other 
treasures on a daily basis.
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    \1\ National Tour Association, the American Society of Travel 
Agents, United Motorcoach Association, American Bus Association, 
American Hotel & Motel Association, America Outdoors and the National 
Park Hospitality Association.
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    TCFC applauds Chairman Hefley for your legislation. H.R. 1461 would 
repeal a rifle shot provision in section 418(c) of Public Law 105-391, 
the National Parks Omnibus Management Act of 1998, that effectively 
exempts commercial ``nonprofits'' from the requirement to obtain 
``Commercial Use Authorizations'' or CUAs. H.R. 1461 would simply 
require all commercial organizations to play by the same rules when 
selling goods or services to visitors, regardless of whether the 
commercial enterprise happens to be organized under Subchapter S, 
Subchapter C, Subchapter K or Subchapter F of the Internal Revenue Code 
(IRC). H.R. 1461 is common sense. It is sound resource management 
policy. It is sound environmental policy. It is fundamentally fair. 
With the changes recommended here, we urge your inclusion of this 
legislation in the first available vehicle for passage.
    Section 418(c) has functioned very well in one respect: it has 
given tax-exempt organizations (tax-exempts) a huge competitive 
advantage when offering the same commercial service as their for-profit 
competitors on public lands. Section 418(c), however, is not a garden 
variety special interest break. Section 418(c) provides a lose-lose 
situation for park managers, resource managers, small firms that serve 
the public though the Parks, and the visiting public at large. In 
essence, the provision creates a sort of enterprise zone for entities 
organized as tax-exempt on lands in public trust. Through this 
wholesale exemption, tax-exempts excuse themselves from limitations on 
use, environmental and resource oversight, fees, safety requirements 
and a host of rules. They undermine park management by exonerating 
themselves from oversight. Ironically, they are the very organizations 
that ought to embrace these rules, not seek immunity from them.
    It is important for members of this Subcommittee to recognize what 
this hearing is not about. This hearing is not about denying access to 
Boy Scouts, clubs and church groups who are engaged in noncommercial 
activities inside National Parks. Your legislation can easily be 
written to exclude such noncommercial groups. In fact, it is not even 
about denying access to the Parks by our Nation's largest and most 
commercially oriented nonprofits. We would not support the legislation 
if it were. Instead, this hearing is about closing a gaping loophole 
that allows tax-free, license-free and regulatory free use of national 
park lands by a special class of business. It is about restoring equity 
between commercial users of Parks. It is about returning to local 
managers the ability to oversee resource use. It is about replacing an 
unworkable, unenforceable, illusory and incorrect standard for granting 
CUAs with a realistic standard. It is about abandoning an ill-conceived 
notion that non-taxable equates to noncommercial. It is about adding 
revenues of the Parks, and increasing safety for park users. Tax-exempt 
entities are the largest commercial users of Federal lands, and they 
should be subject to the same regulatory strictures and oversight as 
their for-profit competitors.
    This testimony breaks the issue into several parts. First, we 
discuss the genesis of section 418 and the double-blanketed immunity it 
provides nonprofits. Second, we discuss the problems created by this 
grant of immunity. Third, we discuss the operation of H.R. 1461 and 
offer views on ways your legislation might be improved.
Section 418 ``Commercial Use Authorizations'': How it Operates
a. The General Rule
    Today there are two basic methods by which the Department of 
Interior can authorize commercial activities in National Parks: 
concessions contracts and ``commercial use authorizations'' 
(``CUA's''). 2 Through section 418 3 Congress 
delegated authority to the Secretary (and derivatively to park 
managers) to issue CUAs. Congressional intent in enacting Section 418 
was to fill a void existing since the 1965 National Park Service (NPS) 
authorizing legislation. That legislation had failed to specify the 
processes by which the agency might sanction incidental commercial use. 
The agency filled this gap through executive fiat, specifically by 
issuing ``Incidental Business Permits [IBPs]'' (formerly ``Commercial 
Use Licenses [CULs]). When issuing IBPs the agency was not discharging 
its duties under the organic statute, but acting under assumed 
authority derived from a need to avoid the cumbersome concessions 
contracting mechanism. Section 418 was meant to formalize the agency's 
authority to permit limited commercial activity in Parks, streamline 
the method for seeking and granting such authorizations (a goal not yet 
achieved), and set forth general standards by which requests for such 
for authorizations could be evaluated.
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    \2\ Section 418 provides: ``IN GENERAL- To the extent specified in 
this section, the Secretary--may authorize a private person, 
corporation, or other entity to provide services to visitors to units 
of the National Park System through a commercial use authorization.
    \3\ Title IV, section 418, November 13th, 1998 (112 Stat. 326).
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    The standards for exercising discretion to issue CUAs are described 
in Section 418 as ``limitations,'' ``criteria'' and ``elements of 
authorization.'' The agency may grant CUA's only when: ``the Secretary 
determines [they] will have minimal impact on resources and values of 
the unit of the National Park System and are consistent with the 
purpose for which the unit was established and with all applicable 
management plans and park policies and regulations. 4 The 
Secretary shall, ``require payment of a reasonable fee for issuance of 
an authorization--to recover associated management and administrative 
costs. 5 Additionally the Secretary is to ``require that the 
provision of services under such an authorization be accomplished in a 
manner consistent to the highest practicable degree with the 
preservation and conservation of park resources and values, 
6--take appropriate steps to limit the liability of the 
United States arising from the provision of services under such an 
authorization, 7 and issue [no] more authorizations than are 
consistent with the preservation and proper management of park 
resources and values ``. 8 In the ``limitation'' section of 
the Act, Congress provided the general rule that CUAs are limited to 
``commercial operations with annual gross receipts of not more than 
$25,000 resulting from services originating and provided solely within 
a unit, 9 [or] incidental use of resources of the unit by 
commercial operations which provide services originating and 
terminating outside of the boundaries of the unit''. 10
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    \4\ Section 418(b)(1).
    \5\ Id. at section 418(b)(2)(B).
    \6\ Section 418(b)(2)(A).
    \7\ Section 418(b)(2)(C).
    \8\ Section 418(b)(2)(D). Finally, the Secretary ``shall establish 
such other conditions for issuance of such an authorization as the 
Secretary determines appropriate for the protection of visitors, 
provision of adequate and appropriate visitor services, and protection 
and proper management of the resources and values of the park.
    \9\ Section 418 c (1).
    \10\ Section 418 c (2).
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b. A Double-Blanketed Exemption for Tax-Exempts
    The restrictions are significant for for-profits. However, during 
the 11th hour consideration of Public Law 105-391, without debate, 
without hearings, without the knowledge of small firms and most 
nonprofits and without any apparent rationale--the following language 
was added: ``[n]onprofit institutions are not required to obtain 
commercial use authorities unless taxable income is derived by the 
institution from the authorized use. 11 In one fell swoop, 
Congress exempted any ``nonprofit'' from any of the above requirements, 
without so much as defining ``nonprofit. 12 Section 418 
created three distinct standards: a stringent one for commercial for-
profit firms, and two lenient ones for commercial nonprofits.
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    \11\ Section 418(c).
    \12\ ``Nonprofits'' are distinguishable from tax-exempts, in that 
the former is exempt from tax under Section 501(c)(3). Surprisingly, 
the Sierra Club and other 501(c)(4) organizations also claim exemption 
from Section 418(c).
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    Just how lenient the standard is for nonprofits depends on whether 
it declares taxable income from the commercial enterprise. The vast 
majority of nonprofits enjoy the greatest leniency the law can provide: 
they are fully excused from seeking CUAs because they have no 
``taxable'' income. 13 Section 418, however, provides a 
double layer of protection. On the few occasions taxable recreational 
fee income is earned by a tax-exempt, the so-called ``limitation'' 
section of 418 makes it clear that CUA's can still be provided to 
``nonprofit institutions (including back country use),''14 
irrespective of the conditions applicable to for-profit operations. 
More specifically, when they qualify for CUAs, tax-exempts are 
apparently immune from either the $25,000 dollar limit or the 
requirement that their use shall be ``incidental'' or originate and 
terminate outside of the boundaries.
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    \13\ It should be noted that some nonprofits, including Outward 
Bound, have adhered to the CUA's by their own volition, despite their 
ability to escape its purview.
    \14\ Section 418(c) (3).
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What are the Problems with Section 418(c)
a. Section 418(c) ``Taxability Standard'' Effectively Exempts All 
        Nonprofits from the Requirement to Obtain CUAs
    As noted, section 418(c) effectively exempts tax-exempts from the 
need to seek and obtain permits if no taxable income is derived form 
the commercial enterprise. By employing the term of art ``taxable 
income,'' the section implicitly refers to a notorious section of the 
Internal Revenue Code (26 U.S.C. 512 et seq) commonly referred to as 
the ``unrelated business income tax'' or ``UBIT''. Under IRS sections 
512, income that ``contributes importantly'' (i.e. is ``substantially 
related'') to the exempt mission of a tax-exempt is considered 
nontaxable. Only income that is not ``substantially related'' is UBIT. 
Additionally, unrelated business income (UBI) is gross income from an 
unrelated business regularly carried on, less deductions connected with 
that business.
    To understand why this 52 year-old standard is illusory requires a 
brief tax policy history lesson. The ``substantially related'' UBIT 
standard was indeed developed to forestall unfair competition, but 
mostly in response to a specific anecdote. The quintessential case 
giving rise to the law was the gift of Mueller's Macaroni Company to 
New York University Law School, which wanted to operate the pasta 
producer tax-free, arguing that the income was directed to an 
eleemosynary purpose (i.e. the destination principle). Needless to say, 
their competitors cried foul, arguing the proper goal of NYU was to 
produce students, not pasta. Congress reacted by imposing the regular 
corporate income tax ``with respect to so much of [a tax-exempt's 
income] as arises from active business enterprises--unrelated to the 
exempt purposes of the organizations. `` 15
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    \15\ That Congress intended UBIT to help prevent unfair competition 
by tax-exempt entities against taxable entities is clear. According to 
the Senate and House reports: ``The problem at which the tax on 
unrelated income is directed is primarily that of unfair competition.'' 
P.L. 814 (Ch. 994), 81st Cong., 2nd Sess., 64 Stat. 479, 906. See, S. 
Rep. No. 2375, 81st Congress, 2d Session (1950). See also, H. Rep. No. 
2319, 81st Congress, 2d Session (1950). The Supreme Court has so held 
that this was the legislative intent of the UBIT in the Court's 1986 
decision, U.S. v. American Bar Endowment, 477 U.S. 105. 91 L.Ed.2d 89, 
106 S.Ct. 2426, 2432.
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    UBIT was enacted when nonprofits constituted less than 1 percent of 
the Gross Domestic Product and numbered fewer than 46,000, and the 
growth in the breadth and scope of nonprofit commercial activity was 
unforeseeable. Tax-exempts constitute more than 12 percent of GNP 
today, and their growth rate has far outstripped the growth of the 
private sector. In 1996 there were over 650,000 501(c)(3)'s. 
16 Over the next five years, the IRS projects Form 990 
returns will be filed by 618,000 such organizations. 17 
There were more than 65,059 applications pending in 1999 just for 
501(c)(3) status, and out of 73,605 applications filed in that year, 
only 585 were denied. During the 20-year period from 1975 to 1995, the 
real assets and revenues of nonprofit organizations filing information 
returns with the IRS more than tripled, to $1.9 trillion and $899 
billion, respectively. This compares to real growth in gross domestic 
product (GDP) of 74 percent during the same 20-year period.
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    \16\ This figure is understated because it excludes certain 
organizations such as farmer's cooperatives and religious 
organizations.
    \17\ Returns are filed only when gross receipts are greater than 
$25,000.
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    The UBIT was never meant to withstand the vast volume of nonprofit 
commercial activity, and has failed miserably in application. If the 
``substantially related'' test is a toll bridge upon which all 
commercial activity of nonprofits was expected to cross, it is broken 
in an upward position. Taxes paid by nonprofits have not kept pace with 
their growth. In 1994, all exempt organizations paid a total of $195.1 
million in taxes of all kinds, and the amount of UBIT (unrelated 
business income tax) paid by 501(c)(3) nonprofit organizations was a 
paltry $64.7 million or 1 percent of revenues. While some nonprofits 
did pay taxes on net unrelated business income (UBI), they also claimed 
total deductions of $4.1 billion, for a combined net loss of $955.1 
million. This amounted to about 5/100ths of one percent of their 
program service revenue, or less than 1/20th of what private 
corporations pay in income tax as a percentage of revenues. 
18 Most nonprofits consider commercial activities that 
compete against for-profit small firms as ``substantially related'' and 
therefore tax-free under the UBIT. Finally, the nation's largest 
nonprofits disproportionately rely on commercial as opposed to donative 
sources of revenue. 19
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    \18\ This contrasts to more than one percent of gross receipts in 
income tax paid by corporations. In other words, significantly more 
than 20 times as much. See SOI Bulletin, Table 13, Fall 1998.
    \19\ Only 1 percent of all 990T filers in 1991, or 433 
organizations, had gross income of $1 million or more from unrelated 
sources. These organizations accounted for nearly half of all UBI 
reported and 64 percent of all tax liability from the UBI. Conversely, 
only 2 percent of the total tax, or $2.4 million was reported by the 
smallest nonprofits, which comprised more than 50 percent of the 
taxpayer population.
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    Understanding the full scope of the problem requires us to see its 
economic dimension. Tax-exempt commercial enterprises are not only 
business competitors, they are large businesses, which become 
increasingly more commercially oriented the larger they get.
[GRAPHIC] [TIFF OMITTED] T2929.001


    Organizations with assets of $50 million and above rely on 
contributions, gifts and grants for only 11 percent or their income in 
1991.
    UBIT offers a nice theoretical standard, but its subjective nature 
makes it almost impossible to apply in the real world. Whether or not a 
rafting trip is taxable for example depends on the relationship of the 
particular income producing activity to the tax-exempt's mission. To 
properly apply the provision, the NPS must know precisely how the 
commercial activity furthers the exempt mission of each organization. 
To take an example, let us explore briefly the factors that might enter 
into a decision about the relationship of the commercial activity to 
the exempt mission of a nonprofit. At least 20 factors are most 
apposite to tour and travel activities of educationally based 
organizations:
     LWhether the tour utilizes traditional modes of education;
     LWhether the tour ``focuses'' on or is ``geared toward'' 
education of students or those who have exhibited an interested in the 
subject, 20
---------------------------------------------------------------------------
    \20\ E.g. Revenue Ruling 69-400, 1969-2 C.B. 114, Revenue Ruling 
70-534, 1970-2 C.B. 113.
---------------------------------------------------------------------------
     LWhether the tour is to the location furthered by the 
mission of the group;
     LWhether the tour has qualified scholars and certified 
teachers, 21 or minister and priests, 22
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    \21\ Revenue Ruling 69-400, 1969-2 C.B. 114, Revenue Ruling 70-534, 
1970-2 C.B. 113.
    \22\ Revenue Ruling 77-430, 1977-2 C.B. 194.
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     LWhether the tour mandates organized study, as 
demonstrated by the number of classroom hours or required seminars or 
lectures, 23
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    \23\ Revenue Ruling 77-430, 1977-2 C.B. 194.
---------------------------------------------------------------------------
     LWhether the tour does not schedule recreational 
activities and recreational activities that do exist are only 
``incidental, 24
---------------------------------------------------------------------------
    \24\ Revenue Ruling 70-534, 1970-2 C.B. 113, Revenue Ruling 77-430, 
1977-2 C.B. 194.
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     LWhether a library is provided, 25
---------------------------------------------------------------------------
    \25\ Revenue Ruling 70-534, 1970-2 C.B. 113.
---------------------------------------------------------------------------
     LWhether the organization administers exams, 26
---------------------------------------------------------------------------
    \26\ Revenue Ruling 70-534, 1970-2 C.B. 113.
---------------------------------------------------------------------------
     LWhether a governing board allows credit, 27
---------------------------------------------------------------------------
    \27\ Revenue Ruling 70-534, 1970-2 C.B. 113.
---------------------------------------------------------------------------
     LWhether the tour was commercial in nature 28 
or did not differ substantially from commercially operated tours, 
29
---------------------------------------------------------------------------
    \28\ Revenue Ruling 67-327, 19677-2 C.B. 187.
    \29\ Revenue Ruling 78-43, 1978-1 C.B. 164.
---------------------------------------------------------------------------
     LWhether the tour provided formal educational training, 
30
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    \30\ Revenue Ruling 78-43, 1978-1 C.B. 164.
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     LWhether the tour devoted extensive resources to social 
and recreational programs 31 or those programs were ``not 
insubstantial, 32 of a ``wide range, 33 or 
scheduled; 34 and
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    \31\ Revenue Ruling 77-366, 1977-2 C.B. 192.
    \32\ Schoger Foundation v. Commissioner, 76 T.C. 380 (1981).
    \33\ Schoger Foundation v. Commissioner, 76 T.C. 380 (1981).
    \34\ Revenue Ruling 77-366, 1977-2 C.B. 192.
---------------------------------------------------------------------------
     LWhether the tour's educational activity was not 
mandatory. 35
---------------------------------------------------------------------------
    \35\ Schoger Foundation v. Commissioner, 76 T.C. 380 (1981).
---------------------------------------------------------------------------
    Despite the many pages of authority, neither the statute, the 
regulations, nor the dozens of underlying rulings have so much as dimly 
illuminated what is meant by unrelated in the myriad contexts in which 
the standard must be applied. The subjective standard is not only 
difficult to understand in the abstract, it is impossible for the IRS 
to adequately enforce. Frustration in enforcing this standard has been 
acknowledged at various times by the Congress, the Department of 
Treasury, by the Commissioners of the IRS by the IRS'' field agents and 
by everyone else affected by the standard, except for the nonprofits. 
Treasury, IRS and the General Accounting Office, 36 have 
also, at one time or another, taken swipes at the ``substantially 
related'' standard. According to testimony by former Assistant 
Secretary Don Chapoton during extensive Ways and Means Committee 
hearings on the failure of the law:
---------------------------------------------------------------------------
    \36\ According to Jeannie Stathis, at the same hearings (then 
Associate Director, General Government Division, U.S. General 
Accounting Office): ``Administering this tax can be difficult because 
of the individual circumstances that must be considered to determine 
whether an activity is ``substantially related'' to an exempt purpose.
---------------------------------------------------------------------------
        Our primary concern with the ``substantially related'' test is 
        whether in practice it has been useful in distinguishing 
        activities entitled to exemption, from those that are not. The 
        general concepts enunciated in the regulations inherently 
        require facts and circumstances determinations that are not 
        likely to achieve consistency among different exempt 
        organizations. The practical result appears to be an ad hoc 
        test that, in may cases offers inadequate guidance to the 
        courts, exempt organizations and revenue agents. Moreover, to 
        the extent the relatedness standard has provided guidance, ``it 
        has been applied in an overly generous manner. 37
---------------------------------------------------------------------------
    \37\ Id.
---------------------------------------------------------------------------
    According to then IRS Commissioner, Lawrence Gibbs, at those same 
hearings:
        ...application of the tax requires a very subjective decision 
        that is based on the facts and circumstances of each case. 
        Again, I will not go into them in detail other than to mention 
        them and to express my opinion that they do cause 
        administrative difficulties for the Internal Revenue Service--
        this has been a difficult area for us in making decisions that 
        require an examination of the relationship between the income-
        producing activity itself and the accomplishment of the exempt 
        purpose....
    It should come as little surprise that few if any of the well-
healed tax-exempts ever make the mistake of deriving taxable income 
from the activity. Indeed, unless they are poorly advised by bumbling 
counsel, nearly any nonprofit can successfully exempt the vacations 
they offer their members from taxation. To take the Sierra Club as an 
example, one of their stated missions is ``to explore and enjoy the 
wild places of the earth. 38 Seemingly, the more 
exploration, the more enjoyment and the more commerciality, the more 
related it is to its exempt function. Perhaps it is for this reason 
that the Sierra Club's Form 990 nonprofit tax return shows that more 
than 6 million in taxable income from trips is totally exempt.
---------------------------------------------------------------------------
    \38\ Sierra Club, Mission Statement.
---------------------------------------------------------------------------
    Tax-exempts can not only circumvent the UBIT and the CUA process by 
ensuring their mission is loose, or their commercial activates are 
wordsmithed to match the mission, but also because the nonprofit 
charter is merely a technicality. Section 418(c) will encourage groups 
to consider setting up adjuncts so, through the miracle of 
technicalities, they can take advantage of a loophole that exempts 
those activities from the need to obtain use authorizations in National 
Parks. Any for-profit can establish a nonprofit organization to either 
conduct the tours directly or contract out.
    The truth is that the UBIT standard is one the Internal Revenue 
Service cannot enforce, let alone the park ranger. Even if one could 
find a nonprofit willing to pay taxes on income produced from 
``commercial'' activity in Parks, how would the NPS determine if they 
should pay tax on that income when the IRS cannot do so? How would the 
NPS determine the appropriate level of deductions applied to gross 
income from the Parks? There is no agreement to share micro data with 
the Internal Revenue Service and the nonprofit Form 990T--their tax 
return--is not disclosable. And how would the NPS determine if the 
activity is ``regularly conducted'' within the meaning of IRC section 
512?
b. Section 418(c) Is Unfair To Small Firms and Files in the Face of 
        Federal Policy Goals
1. In General
    Since section 418 only applies when services are being offered to 
the public, the effect of adopting the illusory UBIT standard is to 
exempt commercial tax-exempts from the requirements to pay for a CUA, 
from the monetary ceiling, from the governance or control over the 
number of commercial services provided, from park fees, and from 
control over the impact of the nonprofit on resources. The absence of 
meaningful regulations has therefore fostered an environment where tax-
exempt organizations compete with impunity against small businesses.
    In order to fully understand small firm's frustration with the 
special treatment accorded nonprofits in section 418(c), we should view 
the provision in the context of the burgeoning awareness of unfair 
competition. In both the 1995 and 1986 (the last two conferences) White 
House Conference on Small Business, small firm owners rated unfair 
competition resulting from governmental and nonprofit activities as one 
of their top 15 issues. According to the delegates' recent 1995 
recommendation:
        Support fair competition: Congress should enact legislation 
        that would prohibit government agencies, tax-and antitrust-
        exempt organizations from engaging in commercial activities in 
        direct competition with small business. 39
---------------------------------------------------------------------------
    \39\ Report on the 60 Final Recommendations of the White House 
Conference on Small Business (1995).
---------------------------------------------------------------------------
    Through the White House Conference, small firms hoped to see a 
dismantling of competitive barriers, not the construction of new and 
subtle ones.
    The concerns of small firms has also been echoed by the Department 
of Treasury, which establishes tax policy respecting nonprofits:
        Limits on the scope of such tax exemption are appropriate and 
        necessary. This Nation has prepared through its reliance on 
        private, market-based economy to supply necessary goods and 
        services. The role of the government generally has been 
        restricted to those socially important activities not 
        adequately supported by the private sector. The role of the 
        quasi-governmental, not-for-profit sector should similarly be 
        restricted to that of supplementing, and not supplanting, the 
        activities of for-profit businesses. 40
---------------------------------------------------------------------------
    \40\ Hearings before the Subcommittee on Oversight, Committee on 
Ways and Means (Serial 100-26 (June 1987)).
---------------------------------------------------------------------------
    The for-profit small firms that provide the bulk of our nation's 
travel and tour activities do not resent competition per se, even from 
the Nation's largest commercial nonprofits. However, they do resent 
regulatory and congressional policy that is insensitive to, indifferent 
to, or worse yet, supportive of, unfair competition. When a tax-exempt 
unfairly competes against a small firm, it invariably treads on the 
interests of struggling entrepreneurs. Entrepreneurs contribute not 
only by providing a competing service, but also by paying taxes on that 
service. These small businesses find themselves regularly competing 
against their own tax dollars. Moreover, when nonprofits compete, 
social goals are often reversed because nonprofits frequently market 
their tax-subsidized tours and outings to the most educated and wealthy 
segment of our population. Consumers suffer from the lessening of 
choice. Taxpayers suffer when they pay higher tax rates for the benefit 
nonprofits and the government receives when engaging in such commercial 
activity. Section 418 comes at a time when small businesses are united 
in their fundamental opposition to unfair competition from commercial 
nonprofits, especially when the business community has traditionally 
filled those market needs on their own.
    Underneath their ``halo'', commercial tax-exempts are simply 
business competitors. They can sometimes be viewed as closely held 
businesses operated to no small degree to augment the salaries and 
benefits of the management of the organization. The difference between 
tax-exempt and for-profit business competitors does not lie in the 
markets they serve, the services they market, or the means of marketing 
but in the unjustifiable policy distinctions that are too frequently 
drawn. Both are businesses, but the for-profit business pays tax and 
the nonprofit does not. Commercial nonprofits are often accountable to 
no one--not shareholders, not donors, and not the objects of their 
mission. In this case, they are not even accountable to resource and 
environmental managers.
2. One Example
    To see the potential for abuse within National Parks, one needn't 
look beyond this hearing room. The Sierra Club alone conducts an 
estimated 330 tours and many rafting trips (some utilize for-profit 
rafting operations and river runners, but they needn't do so). The 
Sierra Club is one of the nation's largest adventure travel companies. 
One need only look at the web site to see the numerous tours they 
operate. When reading just a few of the excerpts below from the 
hundreds of extensive printed brochures of the Sierra Club ask yourself 
this question: how do they differ from commercial tours that could be 
offered by a for-profit?:
         LEscape to the Great Outdoors, but enjoy a hearty meal 
        and warm bed at night! Nestled in Donner Summit's pine forest 
        near Lake Tahoe, California, Clair Tappaan Lodge offers outdoor 
        adventures for those eager to escape civilization, but who 
        still want access to the basic amenities--and not-so-basic 
        luxuries, like our hot tub. Activities for all levels of 
        ability.
         LSierra Club Water Trips: ride the exhilarating rapids 
        of canyon country! Float serenely down a canyon, shoot rapids, 
        sample swimming holes and side hikes. For help deciding what to 
        bring on your trip, refer to our Raft Equipment List.
         LJoin an exciting four-day family float through the 
        wild and scenic section of the Rogue River in western Oregon. 
        We'll raft through a lush, forested canyon filled with rapids 
        (Class III) and spectacular scenery. Enjoy the wildlife, 
        swimming in the clear, refreshing water, and hiking to a 
        historic homestead. Minimum age is seven.--We'll stop to visit 
        fern grottos, splash in waterfalls, and play on sandy beaches.
    We decided to ask the Sierra Club leaders that very question. They 
were hard-put to answer. Some actual responses included these: ``all 
Sierra Club members and share common interests and values,'' ``the 
whole group has a common thought,'' ``our rafters are like-minded 
(environmental etc.) people'' who ``share camping chores such as 
cooking, gathering water etc.'' As for the environment, they said 
``concern for the environment is evident,'' or that they ``place a 
conservation emphasis on our trips, which [they] ``feel'' adds value,'' 
or that they ``appeal to those who want to help save wilderness areas, 
not just recreate in them.'' They also justify it on the basis that 
``they have a great tradition and history...well over 100 years old,'' 
My favorite is that they differ because of ``the looks on people's 
faces after our trips.'' Each of these factors could just as easily 
apply to the for-profit outfitters.
    The more honest answers focused on product differentiation. ``As 
far as I know, we are the only ones that do the full trip--Everybody 
else splits it into two trips. We avoid Phantom Ranch, and that way, 
are able to do more side-canyon hikes that most commercial trips do not 
take advantage of.'' As for money, they claim, ``it is an excellent 
value for the money!'' ``Our prices on water trips are about the same 
or a little more than commercial trips when any add-on taxes and permit 
fees are included in their prices.
    The real differences? The blanket exemption provided nonprofits in 
Section 418 ensures that they are also exempt from fees and 
environmental oversight. The enjoyment of the vacation is not taxable 
to the ``volunteers.'' Contributions to the Sierra Club Foundation (and 
to other tax-exempts operating as a 501(c)(3)) are normal deductible, 
so the Sierra Club has lower costs of capital than the commercial 
enterprises. The Sierra club does not pay state sales taxes and real 
estate taxes. They can market services for half the cost, compliments 
of postal rates subsidized by for-profits. And they enjoy instant 
goodwill from their ``halo.'' And because resource use is finite, for 
every use assumed by the tax-exempt, the for-profit must forego their 
use.
c. Section 418(c) Frustrates Resource Management Policy
    One needn't be a tax lawyer to seriously question the 
appropriateness of this standard for CUAs. A more fundamental question 
should be posed. Is the UBIT tax standard the right standard to employ 
for resource management, environmental and safety reasons?
    Whether or not a use should be exempted should depend more on the 
frequency of use, the type of use and the consumption of resources. The 
UBIT standard is relative to a tax-exempts primary purpose. If a tax 
exempt were to have as its mission, ``To explore and enjoy the wild 
places of the earth,'' 41 what does the nexus of that 
mission have to do with the need of the park managers to regulate use? 
In fact, the more exploration, the more enjoyment, the more park 
managers should be able to regulate.
---------------------------------------------------------------------------
    \41\ See, Sierra Club, Mission Statement.
---------------------------------------------------------------------------
    To make this point more clear, we can list the standards now 
applicable to for-profit firms. For example, a CUA requires for-profits 
to adopt an environmental management program (EMP) that includes: (1) a 
specification of goals with specific targets with measurable results, 
(2) responsibility and accountability, 42 (3) plans, 
procedures, manuals, and other documentation maintained by the 
concessionaire, (4) document controls, (5) training and communication 
plans, (6) procedures for notification of discharges. Additionally, NPS 
must approve of promotional materials (including Websites, broadcast 
and print media) and rates and charges, outfitters and guides must wear 
name badges, the business must produce employee manuals for pre-
employment screening, hiring, training, employment and termination, and 
conduct a background review of applicants. They must training 
applicants with up-to-date job skills. They must establish performance 
review procedures, and drug free workplace programs. They must notify 
park officials of violation of any applicable laws by employees, agents 
and contractors, including environmental laws, nondiscrimination laws. 
They must establish environmental management objectives and comply with 
all laws pertaining to protection of human health and the environment. 
Moreover, a concessionaire shall develop, document, implement and 
comply fully with a comprehensive EMP.
---------------------------------------------------------------------------
    \42\ Must have an environmental program manager and program to 
evaluate employee and contractor performance under these 
responsibilities.
---------------------------------------------------------------------------
    As none of these requirements apply to tax-exempts which side-step 
the CUA process, there is no benefit to tourists, to the NPS or to the 
environment from Section 418(c). The exemption excludes the tax-exempts 
from the governance of the NPS over the number of commercial services 
provided and the impact of these services on the Parks resources. Under 
section 418(c), there are no limits on the numbers of nonprofits that 
can provide commercial services, like rafting trips. There is no 
oversight in terms of enduring minimal impact on resources, and there 
is no requirement that they adhere to resource management practices.
    If you desire proof of the merits of this argument, you needn't 
listen only to tax-paying firms. An anonymous Forest Service manager 
had this to say: ``Many non-profits feel that they are entitled to non-
fee, permit-free access. If this was ever the case, my fear is that 
every for-profit would soon have a non-profit arm of their business and 
``soon become unregulated when it came to outfitter and guided use.'' 
The exemption is also opposed by responsible nonprofits, whose managers 
could benefit from its unfair advantages. In criticizing the proposed 
rulemaking on Concession Contracts (Title IV,) the National Outdoor 
Leadership School and Outward Bound USA made the following observations 
in their regulatory comment letter:
         LWEC members did not support this language as a part 
        of S. 1693 and were not involved in or aware of its inclusion 
        in the Act. The members of the WEC are all non-profit 
        institutions with a long history of accountability in our use 
        of public lands. This language will allow unrestricted and 
        unaccountable access by a single category of user--regardless 
        of the amount of use or impact on park resources.
         LWEC members question ... how effectively [park 
        managers] can--control access and manage use in backcountry 
        venues. This is especially true in a world where many General 
        Management Plans [GMPs] are still in process, and wilderness or 
        backcountry plans are not in place and may not be for years to 
        come.
         LThe larger issue here is one of accountable use by 
        all parties, regardless of tax status. The objectives should be 
        to partner with park managers in providing quality visitor 
        services while simultaneously protecting and preserving park 
        resources for future generations. This language provides a 
        limited user class with exemption from administrative, 
        financial and physical accountability.
    We could not have said it more eloquently.
Suggestions for Improving H.R. 1461
    TCFC believes the legislation is primary directed at the heart of 
the problem--it repeals the ability of nonprofits to self-exclude 
themselves from the requirements of obtaining CUAs. This is a critical 
change; however, we would recommend two additional changes.
    First, we recommend subjecting all organizations in the park to the 
requirements specifically applicable to for-profits. For a for-profit 
firm to obtain a CUA, their services must either generate less than 
$25,000 in gross fees or be incidental to the Park. To grant such a 
CUA, the Secretary must affirmatively find that the provision of 
services will have minimal impact on resources, will be conducted in a 
manner consist to the highest practicable decree with the preservation 
and conservation of park resources and values and in a number 
consistent with the preservation and proper management of park 
resources. However, if those same commercial enterprises are conducted 
by a nonprofit, even if that nonprofit were to pay tax on its 
commercial income, it would be able to obtain a CUA. Merely using the 
phrase ``[n]onprofit institutions are not required to obtain commercial 
use authorities unless taxable income is derived by the institution 
from the authorized use'' as the bill would do, would not address this 
problem. It would still allow commercial nonprofits unwarranted leeway 
to conduct sales or services regardless of the gross earnings ceiling 
or the incidental use restriction. Subjecting nonprofits to those 
requirements is simply ensuring that they are placed on a level playing 
field with their for-profit competitors.
    Second we believe it is important to make clear that an exception 
for CUAs is warranted in the case of noncommercial endeavors. We would 
defined these endeavors to encompass scout outings and churches, for 
example, when there is no requisite element of commerciality. For 
example, we might seek to repeal Section 418(c)(3) in its entirely, and 
add the following section:
    (g) Commercial defined. Commercial use means recreational use of 
the public lands and related waters for business or financial gain. The 
activity is commercial if:
    (1) it is conducted by a for-profit organization, or,
    (2) if conducted by an organization organized under section 501(c) 
of the Internal Revenue Code, and such organization
    (A) makes or attempts to make a profit, receive money, amortize 
equipment or obtain goods or services as compensation from 
participating in recreational activities;
    (B) collects a fee or received other compensation that is not 
strictly a sharing of actual expenses, or exceeds actual expenses 
incurred for the purposes of the activity, service or use;
    (C) charges participants for a duty of care or an expectation of 
safety; or,
    (D) publicly advertises to seek participants.
    We would be pleased to work with the Subcommittee and responsible 
nonprofits in developing these modifications to the language.
Conclusion
    Section 418(c) is one sentence on one page comprising many chapters 
in a book of advantages accorded nonprofits unfairly competing against 
small businesses, but it is an excellent example of how commercial 
nonprofits are exempted from the laws that apply with vigor to their 
for-profit competitors. This provision does not affect Boy Scouts, Girl 
Scouts, clubs and church group activities in the Parks. However, it 
does mean that all commercial users are on a level playing field. 
Nonprofits, particularly those who are founded on environmental 
missions, should not seek to avoid rules established for the protection 
of the Parks. They should embrace those rules. Your legislation is a 
win-win. Section 418(c) may be missed by abusive nonprofits, but few 
others.
                                 ______
                                 
    Mr. Hefley. Mrs. Christensen?
    Mrs. Christensen. Can I pass and come back--.
    Mr. Hefley. Sure.
    Mrs. Christensen. --in another round?
    Mr. Hefley. Sure.
    Mr. Simpson?
    Mr. Simpson. Thank you, Mr. Chairman. Mr. Simon, how much 
would it cost you if you were subjected to the commercial use 
permit?
    Mr. Simon. As the Park Service said, they have not yet 
implemented the new regulations. So we do currently have to go 
through what is called the incidental business permit process. 
So we currently operate under the old law. Nothing has changed 
since 1998, as no regs have been issued. The issue for us is 
not fees. My understanding of the fees is actually slightly 
higher than that. They are closer to 2- or $300. But that is 
not the issue. The issue is access. We are denied in certain 
parks the ability to get an IBP, an incidental business permit. 
The park will say we have enough commercial providers, we are 
not issuing anymore, you can't do your backpack for 1 week for 
12 people.
    That is what I am here today about. I am not here today to 
try to exempt ourselves from the $200 fee in the 40 or 50 parks 
that we run trips in. We just want access.
    Mr. Simpson. So you wouldn't be opposed to paying the fee; 
is that correct?
    Mr. Simon. I pay them now.
    Mr. Simpson. You know, it is interesting that you bring up 
the issue of access, because that, quite frankly, is the issue 
surrounding many of the bills and legislation and proposals in 
the West that the Sierra Club opposes, is the issue of access 
of the public to public lands, not just parks but to other 
public lands.
    Mr. Simon. There are two levels of access in the national 
parks and in most public lands. The first is you have to cross 
the hurdle of getting an incidental business permit in the 
parks. Then you go and try to get a back-country permit. So the 
land managers still have the ability to restrict use, and we in 
no way want to upset that balance. If they are going to not 
allow any more trips, there is too much use on a particular 
trail at a particular time of year and there are no trips going 
through there, we are fine with that. But there is this 
preliminary hurdle that you have to go through of getting an 
IBP, or, in the new language, a commercial use authorization, 
that we feel has been unevenly administered and has actually 
precluded us from getting to the second hurdle, which is the 
back-country permits.
    Mr. Simpson. Why should you have an advantage, though, over 
someone else to use that--to use that park?
    Mr. Simon. That is an excellent question, because we feel 
the--
    Mr. Simpson. Of course it is.
    Mr. Simon. We feel the 1998 act--we feel there are more 
than two types of use. We feel that history shows and we feel 
the reality is that it is not just the public and commercial 
providers. We believe that there is a long history and a long 
need of this third body, and that is nonprofit, noncommercial 
providers, such as hiking organizations, boy's clubs, all of 
those organizations. We provide different types of services. 
You can't go into the high Sierra--you can't find someone that 
will lead you--or it is very difficult to find someone who will 
lead you on a 1-week backpack. You can find someone who--where 
you can stay at a posh lodge, who will take you out with a mule 
train and things like that, but there just aren't businesses 
providing those services. Plus they are not providing them to 
our members at a loss, as my testimony stated.
    Mr. Simpson. But I mean, some people prefer to experience 
it at a posh lodge or a pack train or something like that. Why 
should they be disadvantaged? Why should they have less of an 
access to it than you have to it?
    Mr. Simon. But they are not. This bill does not address 
that level of access. That level of access is in the land 
management policies, land management plans created by each land 
manager, and they will allocate a certain portion of their 
resource for outfitters, a certain portion for their 
concessionaires, a certain portion for the public at large, and 
we are not trying to upset that balance. This law doesn't even 
deal with it. This law is at a higher level.
    Mr. Simpson. Well, some commercial operations that I have 
seen, as an example, some of the snow machine trips you take 
into Yellowstone Park, commercial operations regulated by the 
Park Service are very educational, and that is the purpose of 
them. They are not just to go in there and rip up the park and 
throw snow around. They are actually to go in and see 
Yellowstone in the winter and see the bison and so forth, and 
they are as educational, I would suggest, as anything that you 
do, and I don't know why they have one level that they have to 
meet and you have an unrestricted level because you have--
because you don't have to have this commercial license. That 
just confounds me. I am not seeing the difference in the two. 
It is like somehow we are--we provide something that is better 
than some commercial organization does, so we shouldn't have to 
meet the same standard as they do. This is kind of what is 
confusing me.
    Mr. Simon. I believe that nonprofit institutions are 
providing different services, and I don't think that the 
activities on our public lands conducted by nonprofits are the 
same as those by for-profit providers. I am not sure I can 
actually respond to your question.
    Mr. Simpson. They may not be the same, but are they of 
higher quality and benefit, obviously to you, but maybe not to 
the individual that is deciding what they want to do? Why 
should we decide that your use is more beneficial than some 
commercial operators's use?
    Mr. Simon. I believe that commercial operators--there is a 
fundamental difference, and I believe the law in this country--
and I am getting a little out of my field, I am sorry, but I 
believe the law in this country recognizes that there are 
organizations that are doing something for the public good or 
the perception of the public good, and that is why we have the 
concept of nonprofits. And I think if you don't buy into the 
idea that nonprofits provide a service that for-profits 
organizations don't, then you are right. Your view is 
consistent. But I actually--I believe nonprofits do provide a 
different kind of service.
    Mr. Simpson. If I might ask one more question, do you ever 
use commercial operators on your trips?
    Mr. Simon. Yes, we do; where we are obligated to in order 
to gain access to the park. There have been certain cases where 
we were denied access unless we were to use a commercial 
provider, and for certain types of trips, our insurance doesn't 
actually allow us to own boats and things like that, so every 
raft trip that we run uses a commercial outfitter.
    Mr. Simpson. Thank you.
    Mr. Hefley. Mr. Holt?
    Mr. Holt. Thank you, Mr. Chairman. It does seem that it is 
access that we are talking about here, and we have an 
obligation to see that these areas that are intended for the 
public have the access of the public. And of course, that 
access could be apportioned in various ways. It could be on a 
first-come, first-served basis; it could be by some sort of 
geographic quota. It could be by passing a physical fitness 
test. It could be by strict economic restrictions--the highest 
bidder.
    What I would like to know--let me first ask you, Mr. 
Mastromarco, for a 1-week backpacking trip in the Sierra, what 
would one of your providers charge?
    Mr. Mastromarco. Well, I--.
    Mr. Holt. If there is such a trip.
    Mr. Mastromarco. Well, the providers charge approximately 
what the Sierra Club charges, and I can get back with you on 
the specifics, but I don't have the precise fees in hand. If I 
can, would you permit me--.
    Mr. Holt. Yes.
    Mr. Mastromarco. --to address something I think needs to be 
addressed before it is dangling out there? And you hit the nail 
on the head in the early part of your remarks. We are not 
talking about denying the Sierra Club access to the parks. What 
they want, frankly, and the whole genesis of the provision of 
418(c) was through their lobby effort, is simply to exempt 
themselves so they don't have to compete for access for 
commercial use authorizations. But the question here is, if 
their mission is founded on environmental principles, then 
should they not embrace those principles? Should they not be 
the first group in line to say, I want to subject myself to the 
regulations that govern park resources and use?
    Now, we have mentioned earlier the question that was asked 
by Mr. Simpson about posh trips. Well, we can probably live 
with a posh trip standard. It might be better having a posh 
trip standard as opposed to the unrelated business income tax 
standard. But let me point out a specific example from one of 
their trips. Here is one from their brochure, Mr. Holt. This is 
specifically from their brochure.
    Mr. Holt. This is in your testimony. I have read that. You 
probably don't need to put that in the record again.
    Mr. Mastromarco. Okay. Very good.
    Mr. Holt. I understand. Let me just say further that there 
is certainly a long tradition--many of us had our first--most, 
I would argue, Americans had their first and most memorable 
introduction to these areas through Boy Scouts, Sierra Club-
type organizations.
    But let me turn to a related matter. Let me ask you, Mr. 
Simon, let's just choose some area. You seem to be familiar 
with the Sierra. How many service trips a year do you have, you 
know, say in the State of California or something of the sort? 
And then let me ask the same question for you of your 
providers, Mr. Mastromarco.
    Mr. Simon. Mr. Holt, of our roughly 330 national outings, 
approximately this year about 90 or 95 are service trips. In 
the State of California, I don't have the exact number, my 
guess is it is about a dozen, including things like--.
    Mr. Holt. So for that fraction of your trips, the 
percentage of your trips is what?
    Mr. Simon. Just under a third.
    Mr. Holt. Mr. Mastromarco?
    Mr. Mastromarco. We are slightly comparing apples and 
oranges, because Mr. Simon is the outings expert for the Sierra 
Club. I am not. I am a policy spokesman for the Travel Council. 
So--.
    Mr. Holt. Service trips, would it be in the hundreds or the 
dozens or--.
    Mr. Mastromarco. Hundreds.
    Mr. Holt. And what fraction of the total outings would that 
be?
    Mr. Mastromarco. I would say that--and this is just a 
guess, but I think that they are commensurate with the use of 
park country, and so a lot of it is on national forestland. 
Maybe a quarter--
    Mr. Holt. Could you get that number for me?
    Mr. Mastromarco. Yes.
    Mr. Holt. For us, please.
    Mr. Mastromarco. I would be delighted to.
    Mr. Holt. The fraction of your outings that are service 
outings, in the same sense that the Sierra Club are service 
outings?
    Mr. Holt. And if you would like, Mr. Simon, to refine your 
numbers on that, we would appreciate it. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hefley. Thank you, Mr. Holt. Mrs. Christensen?
    Mrs. Christensen. Thank you, Mr. Chairman. I guess before I 
ask my question, I have not had the pleasure of going on a 
Sierra trip or a commercial trip, but I do think that not-for-
profit organizations provide a different kind of service, and 
the people ought to have a choice. And I also heard in the 
prior testimony that the nonprofit organization trips are such 
a small percentage of the overall number of trips that access 
our park system, that I can't really see where that would be 
unfair competition, and I would invite both of you to comment 
on that.
    I guess my question first would go to Mr. Simon. We have 
heard some discussion about the not-for-profit organizations 
operating without restriction, and to my understanding, you do 
have restrictions. I imagine the park restricts how many people 
can enter at any given time. You have to buy permit 
regulations. Would you comment on the charge that you operate 
without restriction?
    Mr. Simon. The charge that we operate without restriction 
is absolutely untrue. Every trip has to get a back-country 
permit. That permit has certain restrictions that vary from 
park to park, and often within a park. It varies from park to 
park based on the land management plan for that Park Service 
unit. Those permits govern number of people, where you can go, 
where you cannot go. It is very specific. You can be going down 
the John Muir Trail and you absolutely cannot camp in these 3 
miles along the John Muir Trail and you need to plan your trip 
accordingly. Full itineraries are submitted with each trip 
application. So there is a high degree of oversight of each of 
these trips.
    Mrs. Christensen. And the other thing that I heard that I 
had sort of a different understanding just came to the response 
of some of the questions, that without the nonprofit status, 
your membership might not have access. Is that true, that your 
having that status does somehow allow your members some access 
that they might not otherwise have?
    Mr. Simon. Yes.
    Mrs. Christensen. Because you said that your being here is 
to talk about the need for access, and while you operate under 
restrictions, there are members of the Sierra Club, of Boy 
Scouts, of other nonprofit organizations that might not have 
access, were it not for the provision that allows nonprofits to 
also come in.
    Mr. Simon. That is our belief. We are currently--again, 
pointing out that the regs that relate to the 1998 act have not 
been issued yet, currently there are a number of parks in which 
we cannot operate trips. We have been denied the ability to get 
an incidental business permit, which then denies you the 
ability to apply for a back-country pass. So the current 
reality is that we cannot get into certain parks, and we feel 
that without this exemption in the 1998 law, that that will 
only become more commonplace.
    Mrs. Christensen. What are the justifications? Is this why 
are you not able to get into certain parks? I am not sure I 
understand.
    Mr. Simon. I don't have firsthand knowledge of some of 
them, but I do know--we have heard things like we have enough 
commercial providers, you are a commercial provider. There are 
other things. I believe it has gotten down to personalities. I 
can't--it is hard for me to speculate on the motivations behind 
all these cases. We have not asked for written justifications 
of those positions, on the assumption that that would--.
    Mrs. Christensen. Is this the Sierra Club, or do other 
nonprofits have the same experience, to the best of your 
knowledge?
    Mr. Simon. I only know anecdotally of some groups in the 
Northwest, the Mozamas and the Mountaineers that have also had 
trouble getting into some of the national parks in the 
northwest.
    Mrs. Christensen. To the other gentlemen, whose name I 
can't see quite--.
    Mr. Mastromarco. You're forgiven. It looks like an eye 
chart at 30 feet.
    Mrs. Christensen. I saw you taking some notes, and I would 
give you an opportunity to comment on anything.
    Mr. Mastromarco. Well, I appreciate it. Thank you. I think 
it is important to point out that nonprofit organizations, 
those, for example, that are exempted under Title 26, United 
States Code, section 501, in one way or another, are the 
largest users, by far, in our country of back-country use in 
the United States. They are the largest users. And all we are 
saying is that tax-exempt entities should function--they should 
be subject to the same regulatory strictures and oversight as 
their for-profit competitors. That is what we are saying.
    Mrs. Christensen. Well, I don't know how that reconciles 
with the small percentage that I heard Mr. Ring--.
    Mr. Mastromarco. Well, I think the small percentage that 
Mr. Ring suggested needs to be clarified. He said, if I 
remember correctly, that there were 700 or so commercial use 
authorizations issued, and only a handful were to nonprofits. 
Well, there is a very good reason for that. What Mr. Ring 
didn't point out is that nonprofits don't need to get 
commercial use authorizations. Therefore, those statistics are 
not relevant.
    Mrs. Christensen. As I recall, that wasn't quite what he 
said. Of all of the--sorry. Of all of the groups, 
organizations, that are given access, a very small--I seem to 
remember that he said about 2 percent are nonprofits. But I 
thank you for your comments. But I disagree with your 
interpretation of what Mr. Ring said.
    Thank you, Mr. Chairman.
    Mr. Hefley. Thank you. Mr. Simpson?
    Mr. Simpson. Thank you, Mr. Chairman. I do have a couple 
other questions that I just need to ask, and then I have to 
slip out to preside. So I appreciate you letting me take this 
opportunity. You said, Mr. Simon, that there were incidental 
business permits that you have been denied in some parks. I 
assume that there are commercial operations that have been 
denied permits in those same parks?
    Mr. Simon. I don't know what the parks--I don't know what 
other--.
    Mr. Simpson. But they are probably full, they figured they 
had enough activity and therefore it is tough to get a permit?
    Mr. Simon. I think in some cases they feel they are full. I 
think in other cases there are other pressures, and sometimes 
the Sierra Club is singled out and denied access while others 
get them. That is only my perception. I could not support that, 
but I could do research if you like.
    Mr. Simpson. And I want to tell you that I am not opposed 
to the trips of the Sierra Club. I think they do good work in 
many cases, and I don't have a problem with their trips. I just 
think they ought to be treated like everybody else.
    And I want you to respond to this comment that was made by 
Herb Grench, who is the Chairman of the Water Trip Subcommittee 
for the Sierra Club. He was asked: I am curious as to the 
difference between your rafting trips and those of other 
companies. I know that you are a nonprofit and focus on 
conservation, but where do the real differences lie? Is there a 
favorable price difference?
    And this was his response: We use commercial outfitters to 
run our trips, along with a trained Sierra Club volunteer 
leader. We feel we employ the best outfitters. Our trips are 
different from most commercial trips, in that our passengers 
are all Sierra Club members and share common interests and 
values. This helps make for a very compatible group. We do 
place a conservation emphasis on our trips, which we feel adds 
value. Our prices on water trips are about the same or a little 
more than commercial trips when any add-on taxes and permit 
fees are included in their prices.
    Now, if that is the difference, that all the members in 
your trip are Sierra Club members and that they share common 
values and that you add an environmental or conservation 
emphasis on your trips, why should you have an advantage over 
someone that does a commercial? This just blows me away I guess 
is the answer.
    Mr. Simon. Well, Mr. Simpson, in that case, we have 
actually hired a commercial outfitter to take that trip. As I 
mentioned, all of our water trips are conducted by commercial 
outfitters. We are just a customer of that commercial outfitter 
at that point, just like the public. Even under the new rules, 
we would not have to get a commercial use authorization, I 
don't believe, to run that trip, depending on how the rules are 
issued.
    I agree with what Mr. Grench said. I believe you 
paraphrased his statement, leaving out a couple of the key 
components. He said say there was a conservation emphasis on 
our trips, and I believe people do learn about the history of 
where they have been, both from a natural history but also from 
public policy standpoint, and we do believe that that does add 
a fair amount of value, and water trips comprise about 25 of 
our 330 nationally run trips.
    Mr. Simpson. I find it interesting that you--as you said in 
this case here, that you are just a customer of this outfitter, 
like any other public customer. And I am wondering why you 
shouldn't be a customer of the public Park Service, just like 
any other customer that uses it.
    Mr. Simon. But at that point, the outfitter is conducting 
the trip, and the Park Service is regulating the outfitter.
    Mr. Simpson. Well, I think we are making a distinction 
without difference here in many cases.
    Mr. Simon. I don't believe so, sir. In this case the Park 
Service has issued the permits to the outfitter, and because 
there is no other way the Sierra Club could possibly get 
anybody on the water, we just go out and hire an outfitter. So 
that is not the kind of trip I believe that would need to be 
affected by the law as it is currently written or as it is 
proposed to be amended.
    Mr. Simpson. I am saying why should other trips be affected 
by the law? Why shouldn't that same regulation apply in all 
trips, whether it is back-country packing or whatever?
    Mr. Simon. Because then we are not using commercial 
outfitters, for the primary reason that there are no commercial 
outfitters, and also we feel that we are providing a different 
kind of experience.
    Mr. Simpson. Well, I appreciate your testimony, and we are 
going to have to--you are going to have to stop by my office, I 
guess. We are a long ways apart on what we are talking about 
here, I think. Thank you.
    Thanks, Mr. Chairman.
    Mr. Hefley. Thank you very much. I used to be a commercial 
outfitter, or more accurately, I suppose, I worked for a 
commercial outfitter, packing people on horseback in the 
wilderness areas, and I loved the experience. Whether it is 
done by a nonprofit or it is done by commercial groups, I 
personally love the experience, whether it be a river rafting 
trip, which I have done, or the wilderness trips, which I spent 
a lot of time on my own in the wilderness. And I notice in this 
expensive four-color ad here in the magazine, for Sierra Club 
trips, they range from--oh, there is 460. There is 355, 495, 
495, 1,995, $2,095. And I am familiar with a lot of--a number 
of outdoor magazines, and you get the ads there for commercial 
outfitters, and these prices seem to be pretty much in 
compliance with--with those kind of prices, and they make a 
profit, or they don't stay in business.
    And I guess if you don't make a profit, Mr. Simon, I wonder 
why. And I am a little confused. In reviewing the Sierra Club's 
form 990, which is the tax return for tax-exempt organizations, 
for the calendar year 1998, on Schedule 6, the Sierra Club 
lists its total annual lodging and outing expenses at $315,500 
and your annual exemption income from outing and lodging 
expenses at approximately $4.5 million. In 1999, that $4.5 
million went from $5.2 million, with the expenses at $358,000.
    Now, in your written testimony, you indicated the Sierra 
Club's expenses for its outdoor activities program is $4.9 
million, and it revenues are $4.1 million.
    I guess I may be reading these forms wrong. Gosh knows that 
the IRS forms are a bit confusing, even to the experts, and I 
am sort of not an expert on it. But I would like to request, 
Mr. Simon, that you submit some kind of supplemental material 
to the Subcommittee to clarify what appears to be a discrepancy 
between your tax returns and your written testimony. And if you 
would like to comment now, fine, or if you would like to submit 
it, fine.
    Mr. Simon. Mr. Hefley, we would be happy to do so, and I 
would like to say that in support of my testimony, I did give 
the Subcommittee staff our audited financials by the company 
KPMG. You know, the nationally known, internationally known, 
CPA firm. So we will be happy to get back to you to map 
accrual-based financial statements to IRS forms.
    Mr. Hefley. Yeah. If we could tie that in. You also 
testified that this proposed legislation would damage or 
curtail activities of many groups operating children, 
educational, and civic programs, and you talked about this 
denying access to the parks. It appears to me that what the 
Park Service does is try to determine how many visitors the 
resource will accommodate and still protect the resource, which 
is of course a very important thing to the Sierra Club.
    And I don't know, can either one of you show--you have 
already talked about this some. Can you show any evidence that 
the Sierra Club had been denied over and above commercial 
outfitters? It seems to me that both are denied if they meet 
the maximum that they think that that park can accommodate.
    Mr. Simon. Mr. Hefley, I can state that in several of the 
park units, we have run trips for many years, and then all of a 
sudden we were denied commercial incidental business permits. 
If you would like details of time and place, those can be 
provided.
    The kinds of parks I am talking about are Glacier, Rocky 
Mountain, Teton, and that is just reality. Now, in that year 
that they started denying us our permits, did they deny others? 
I don't know. Did they do it on first come, first out? I don't 
know. I do not know what their criteria was for deciding who 
would no longer be able to run trips on their lands.
    Mr. Hefley. Mrs. Christensen asked a question about whether 
your people that you take in, the Sierra Club members, would be 
able to take trips if you didn't have this exemption. You 
indicated that some would be denied that. It is my 
understanding that members of the Sierra Club, the average 
income is several times the median income in America, that most 
Sierra Club members are not poor folks. Also the indication is 
that your costs are about the same. So do you still say that 
some would be denied if the law is changed?
    Mr. Simon. I don't have any specific information about the 
income of our members. I do know that we price our trips to 
cover field costs and overhead costs, such as insurance, 
publicity in our magazine and things of that nature. I do also 
know that there are cases where there are not commercial 
providers providing the services that we do, and I do know that 
on every single one of our trips, it is a different experience 
than those provided from the commercial providers in the areas 
where they operate and that we operate.
    Mr. Hefley. I don't believe I have any further questions. 
Do either of you have any further comments you would like to 
make?
    Mr. Mastromarco. I would just like to make one briefly. If 
the Sierra Club is operating at a loss, as they claim, then I 
think that it is important to understand what salary, for 
example, the CEO of Sierra Club would make or how much they pay 
their paid staff. They have to be one of the poorest managed 
tour operators in the country, because commercial firms charge 
the same amount for trips and outings, and they make money. 
Either that, or they have a very creative system of accounting.
    The primary difference--and I will just leave you with 
this--with both for-profits and nonprofits now which constitute 
the growing and commercial share of our gross domestic product, 
is this: The difference is not in the markets they serve or the 
services that they market; the difference is that one pays tax, 
one is subject to the regulations and oversight of Park Service 
resource managers, and one is seeking a thorough exemption from 
that.
    Mr. Hefley. Thank you. Mr. Simon, do you have any further 
comments?
    Mr. Simon. No, sir.
    Mr. Hefley. Thank you both very much. It has been very 
helpful and the Committee stands adjourned.
    [Whereupon, at 11:59 a.m., the Subcommittee was adjourned.]

    [Additional statements submitted for the record follow:]

    [The prepared statement of Mr. Coughlin follows:]

Statement of Cris Coughlin, President, Glacier Wilderness Guides, Inc., 
              Montana Raft Company, West Glacier, Montana

    Chairman Hefley and Members of the Subcommittee on National Parks, 
Recreation and Public Lands:
    Glacier Wilderness Guides, Inc, has been a concessioner since 1983 
in Glacier National Park that guides day hikes and extended backpacking 
trips. The Montana Raft Company has operated under a permit from the 
Flathead National Forest since 1987 on the North and Middle Forks of 
the Flathead River.
    RE: Non profits exempt from requirements of concession contracts 
and CUA's
    I would like to begin by stating that I do not have anything 
against non-profit organizations, as a matter of fact, I think many of 
them provide a wonderful means of education and service. However, 
simply because they do not pay taxes, should not be reason to exempt 
them from any compliance of the vast requirements in the outfitting 
industry.
    As the guided hiking concessioner in Glacier National Park, the 
following is a list of some of the requirements that our guides and 
company are currently required to comply with:
     LAttend NPS Bear Management Training
     LCurrent copies of first aid and CPR certification on 
file, with a list of those expiration dates to the Park
     L``Leave No Trace'' training
     LMonitoring of trips by the NPS staff
     LApproval of rates
     LLoss Control Plan implemented
     LLimits to the party size acceptable in the backcountry
     LThat our advertising is not misleading in any way
     LThat the educational and environmental messages that we 
relay to the public are correct and in sync with that of the NPS
    All of these regulations have been put in place to protect the 
visitor in areas of safety and to protect the resource to environmental 
damage. The new language of future concession contracts will have many 
more requirements to comply with on appropriate service in overseeing 
the outfitting industry. However, under the current law if you are a 
non-profit organization you are exempt from any of these requirements.
    My question to you is why would we want to exempt a large segment 
of the outfitting industry from meeting these standards that provide 
for assured quality and safety of operations? The non-profit outfitting 
industry is grand in scale and needs the same regulations from which to 
adhere. Some of these companies are professional enough in scale to 
give the appearance of a regular outfitter, yet the consumer has no way 
of knowing that the staff taking them on these tours may not have been 
through the types of training assigned to commercial outfitters.
    An example of this would be an experience that we shared with a 
non-profit organization in the late ``80's and early ``90's. They are a 
counseling school for troubled teens, many of which had drug and 
alcohol related problems. The clients were from all walks of life and 
from all across the country. The parents pay $6,000 per month for their 
child's tuition. The school was told by the NPS that they needed to use 
our services. We felt that the schools principles were very worthy and 
for three years we bent over backwards to do everything we could to 
make the trips successful for them and convenient under our contract. 
We offered a $10 per person per day rate for our guides to accompany 
them (normal rate was $80) and they were to provide the food and 
equipment. To start out with the quantity and quality of food on the 
trip became a safety issue in the cold fall weather. We took some of 
their staff and put them through our guide training. On subsequent 
trips in years to follow they showed total disregard to the policies 
the NPS had in place for the backcountry, or to adhere to any of our 
policies. In Glacier, we have approximately 350 grizzly bears and the 
same number of black bears. There are many ``do's and don'ts'' in 
regard to camping in bear country. Of main concern is when it comes to 
food storage and handling. You must hang your food and keep your 
sleeping area away from the food preparation area. They kept some of 
their food in ziplock bags under a rock in a stream. They spent the 
last three days of each trip doing what they called the ``Solo'' 
portion of the trip where the clients needed to be completely separated 
from everyone. This practice alone is not advised in the backcountry 
but they also kept food items in their tents during this portion. 
Needless to say we arrived at the point that we could no longer work 
with this company as they jeopardized our contract after repeated 
attempts for compliance by our guides went unheeded.
    The main point, is that I'm sure the parents of these teens assumed 
that they were in safe hands because the company appeared to be very 
professional. The current exemption of non-profits opens the doors to 
companies as these that don't have the proper supervision to provide 
safe quality services.
    There is a strong need to be consistent in the requirements of the 
outfitters and guides in our National Parks and the only way to achieve 
that is through contracting. Non-profits should not be exempt from the 
contractual and selection process that is designated to protect our 
resources and the safety of the public.
    I thank you for the opportunity to share my views on this much-
needed change in legislation.
                                 ______
                                 
    [The prepared statement of Mr. Jackson follows:]

    Statement of Stefan J. Jackson, Public Policy Manager (Acting), 
          National Outdoor Leadership School, Lander, Wyoming

    Mr. Chairman and members of the Subcommittee, today I address you 
on behalf two partners of the Alliance for Wilderness Education and 
Stewardship (AWES): The National Outdoor Leadership School (NOLS), 
based in Lander, Wyoming, and Outward Bound USA, based in Garrison, NY. 
We support the removal of the provision that exempts non-profit groups 
from the requirement that they obtain Commercial Use Authorizations 
under Public Law 105-391, the ``National Park Omnibus Management Act of 
1998.
    We support this removal as a matter of sound public policy and most 
importantly in seeking what is best for management of the public's 
natural resources--our National Parks. As the law currently stands, we 
will be relieved of an administrative burden, the associated cost in 
money (fees) and time, but our use will go unaccounted for and we will 
not be enabling land management to recover costs for administering our 
programmatic use of public resources--our National Parks.
    We are 501(c)(3), non-profit educational organizations. Critical to 
the comments that follow is the fact that--on Federally managed lands 
and waters--all program days operated by NOLS and Outward Bound are 
fully authorized commercial use days regulated by permit, license or 
contract.
    NOLS, with operations in 12 states, has operations in 22 NPS units. 
This includes three concessions permits/contracts and twenty Incidental 
Business Permits (IBPs). Outward Bound, with operations in 25 states, 
has operation in 19 NPS units. This includes three concession permits/
contracts.
    Through concessions permits/contracts and IBPs all of our access to 
and use of National Park Service units is fully authorized and 
regulated. We are members of the outfitter and guide community. We are 
members of America Outdoors, the national trade association of the 
outfitter and guide industry.
    Our two organizations are the recognized leaders in wilderness 
education. We are non-profit organizations with long histories of 
accountability in our use of public lands. We operate almost 
exclusively on Federal Public Lands. For over 35 years, we have 
utilized the National Parks. The backcountry wild places of the 
National Parks are our classrooms. We have hundreds of thousands of 
graduates in the United States. We have dealt with a dazzling array of 
law, regulation, policy, directive and guidance related to our 
authorized use of public resources.
    The larger issue here is one of accountability of use by all 
parties, regardless of tax status. As it currently stands, this 
exemption will allow unrestricted and unaccountable access by a single 
category of user--regardless of the amount of use or impact on park 
resources. The objectives should be to partner with park managers in 
providing quality visitor services while simultaneously protecting and 
preserving park resources for future generations. This provision 
provides a limited user class with exemption from administrative, 
financial, and physical accountability. The environmental impacts from 
over-use by non-monitored, non-permitted organized user groups are 
likely to be devastating in popular areas, thereby degrading the 
``visitor experience'' for all categories of users.
    A very real threat of accountability of use is that use (access) 
will be capped once land managers understand the true number of users 
and user groups. There exist park units where no more permits are being 
issued and new or infrequent users, or relatively unsophisticated users 
(unschooled in the ways of permit authority) are shut out of the permit 
acquisition process. Despite these frustrations, the problems of 
allocation of limited resources will not be resolved by providing 
statutory pretense that the use does not exist or that land managers do 
not have the authority count such use. Our public resources need all 
users to take responsibility for their activities and to do all they 
can to improve resource management rather than seek paths that 
undermine it.
    National Park Service officials have offered that the need to 
secure backcountry permits and other allocation or administrative tools 
will effectively limit access and account for use within this category 
despite the exemption. We question whether this is the case in all 
parks and how effectively these tools can and will be utilized to 
control access and manage use in backcountry venues. This is especially 
true in a world where many General Management Plans (GMPs) are still in 
process and wilderness or backcountry plans are not in place and may 
not be for years to come. We wonder what sort of challenges Section 
418(c)-exempt-non-profits (or Congress) might raise to an NPS devised 
permit authority that is not explicit in statute.
    Use and enjoyment of these public resources must be subject to 
restraints in order to sustain resources and benefits such as clean air 
and healthy watersheds. As organized users of public resources, we 
should be obligated to protecting natural resources in areas where we 
operate; providing for the public health and safety; and paying an 
equitable share of the agency's cost of administrating recreational and 
educational programs. We should be willing to be held accountable for 
our use of public resources. An agent's consideration of use allocation 
should reflect the complete picture of actual use and not be undermined 
in law by some hidden, unknown, and typically growing X factor (use 
under the exemption).
    In point of fact, some of our operations could exploit the non-
profit exemption. With clever and creative accounting a greater portion 
of our operations could avoid the administrative burden of the 
commercial use authorization. Nonetheless, in the best interest of 
sound resource management, our desire is for accountability for our 
use. The only benefits we would find under the exemption would be some 
cost savings and our avoidance of administrative entanglements. 
Meanwhile the cost of our striving for un-accountability is too high 
for the public resources it is our mission to serve and our privilege 
to use. While the exemption encourages non-profit use to remain 
unaccounted, it also draws artificial distinction between organizations 
that use public resources. Whether or not an organization is non-profit 
and derives income from its authorized use, for- and non-profit 
organizations come in all sizes, in significant numbers and with 
sufficient organization and sophistication to leave tremendous and 
lasting impact on National Park resources.
    Thank you for your careful consideration of this matter. We ask you 
to remove the exemption.
                                 ______
                                 
    [The prepared statement of Mr. Jenkins follows:]

Statement of David Jenkins, Director of Conservation and Public Policy, 
                       American Canoe Association

    The American Canoe Association (ACA), on behalf of its members, and 
on behalf of the more than 200 canoe and kayak clubs who teach safety 
clinics and paddling skills on the nation's public lands and waters, 
respectfully submits its comments regarding H.R.1461, a bill that would 
remove the exemption for nonprofit organizations from the general 
requirement to obtain commercial use authorizations. This legislation 
would adversely affect the ability of local canoe and kayak clubs, 
summer camps, and organizations such as the Boy Scouts of America to 
conduct activities on National Park Service (NPS) managed lands by 
forcing them to directly compete with commercial outfitters for 
allocation of user days.
    Many non-profit organizations require only sporadic use of specific 
public lands or waters and rely heavily on volunteer help. To treat 
them exactly as commercial outfitters who operate on the resource daily 
and have paid staff is unfair. Often the trigger that allows the agency 
to regard non-profit organized trips to be considered ``commercial'' is 
something such as paying for equipment rental or the compensation of an 
instructor hired for a day. Whether the NPS recognizes it or not, there 
is a big difference between an organization simply trying to cover the 
cost of an activity, and a commercial outfitter running trips for 
profit.
    If a local nonprofit canoe club hires an outside instructor to 
teach a class on swiftwater rescue, suddenly the activity is 
``commercial.'' Neither the club nor the instructor is an outfitter, 
neither has a regular operation on the river, yet under this bill they 
would apparently need to become an authorized outfitter. In places 
where such authorizations are limited, these users can be denied access 
because the commercial outfitters have already taken all the commercial 
permits or commercial allocation.
    A good example of this has occurred on the Nantahaha River, a river 
in North Carolina that is managed by the USDA Forest Service. A few 
years ago, summer Camps, schools, and clubs were determined by the 
Forest Service to be commercial users and forced to compete with 
outfitter operations for a limited number of commercial permits. Canoe 
clubs and summer camps that had been teaching kids to paddle on that 
river for decades were suddenly locked out. The ACA managed to secure a 
revoked outfitter permit and use it as an umbrella permit in order to 
restore access for these ``semi-public/institutional'' users.
    Still, that was not enough to restore fairness. Even though ACA is 
treated as a commercial outfitter with respect to the amount of 
paperwork required and the fees required, the ACA (and by extension the 
clubs and camps) is denied weekend use during the summer. The agency 
gives those ``priority use'' days to the truly commercial outfitters. 
The outfitters have been able to convince agencies to give nonprofits 
the burdens of being commercial without giving them the benefits of 
being commercial. There is nothing even remotely fair about this.
    While the example just given is from a USDA Forest Service managed 
resource, the NPS has its own legacy of treating nonprofits unfairly. 
In many national parks the agency has failed to address the allocation 
needs of nonprofit (semi-public/institutional) groups. In many popular 
parks, such as Grand Canyon National Park, NPS does not assign any 
allocation to ``semi-public/institutional'' use. In order to access the 
Colorado River through the Grand Canyon a nonprofit group must hire a 
commercial outfitter--which for many groups makes such a trip 
financially impossible.
    The language that H.R. 1461 would strike was originally proposed 
because of other provisions in S.1693 (the 1998 legislation that became 
the National Parks Omnibus Management Act of 9998) that would adversely 
affect nonprofit organizations. To simply strike this corrective 
language, as H.R. 1461 does, instead of proposing a bill that attempts 
to address the concerns of outfitters and nonprofits alike, seems 
unusually hostile to the nonprofit community. Surely there is a way to 
enact legislation that would protect outfitters from the possibility of 
unfair competition in the arena of outfitter services, while still 
fairly addressing the issue of access for nonprofits.
    The mission-based work of nonprofits in areas such as boating 
safety, teaching outdoor skills, and promoting the stewardship of 
natural resources provide a valuable service to society. Much of this 
work is geared toward providing youth with skills that will keep them 
safe and enrich their lives. Congress should be encouraging these types 
of activities, not throwing roadblocks in the way of them. For these 
reasons the American Canoe Association strongly opposes H.R. 1461 and 
respectfully asks the Committee to reject this legislation.

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