[House Report 104-234]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-234
_______________________________________________________________________


 
 ADMINISTRATION OF CERTAIN PRESIDIO PROPERTIES AT MINIMAL COST TO THE 
                            FEDERAL TAXPAYER

_______________________________________________________________________


 August 4, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1296]

      [Including cost estimate of the Congressional Budget Office]
  The Committee on Resources, to whom was referred the bill 
(H.R. 1296) to provide for the administration of certain 
Presidio properties at minimal cost to the Federal taxpayer, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:
SECTION 1. FINDINGS.

  The Congress finds that--
          (1) the Presidio, located amidst the incomparable scenic 
        splendor of the Golden Gate, is one of America's great natural 
        and historic sites;
          (2) the Presidio is the oldest continuously operated military 
        post in the Nation dating from 1776, and was designated a 
        National Historic Landmark in 1962;
          (3) preservation of the cultural and historic integrity of 
        the Presidio for public use recognizes its significant role in 
        the history of the United States;
          (4) the Presidio, in its entirety, is located within the 
        boundary of the Golden Gate National Recreation Area, in 
        accordance with Public Law 92-589;
          (5) the Presidio's significant natural, historic, scenic, 
        cultural, and recreational resources must be managed in a 
        manner which is consistent with sound principles of land use 
        planning and management, and which protects the Presidio from 
        development and uses which would destroy the scenic beauty and 
        historic and natural character of the area; and
          (6) the Presidio can best be managed through an innovative 
        public/private partnership that minimizes cost to the United 
        States Treasury and makes efficient use of private sector 
        resources that could be utilized in the public interest.

SEC. 2. AUTHORITY AND RESPONSIBILITY OF THE SECRETARY OF THE INTERIOR.

  (a) Interim Authority.--The Secretary of the Interior (hereinafter in 
this Act referred to as the ``Secretary'') is authorized to manage 
leases in existence on the date of this Act for properties under the 
Administrative jurisdiction of the Secretary and located at the 
Presidio. Upon the expiration of any such lease, the Secretary may 
extend the lease for a period terminating 6 months after the first 
meeting of the Presidio Trust at which a quorum is present. After the 
date of the enactment of this Act, the Secretary may not enter into any 
new leases for property at the Presidio to be transferred to the 
Presidio Trust under this Act. Notwithstanding section 1341 of title 31 
of the United States Code, the proceeds from any such lease shall be 
retained by the Secretary and such proceeds shall be available, without 
further appropriation, for the preservation, restoration, operation and 
maintenance, improvement, repair and related expenses incurred with 
respect to Presidio properties. For purposes of any such lease, the 
Secretary may adjust the rental by taking into account any amounts to 
be expended by the lessee for preservation, maintenance, restoration, 
improvement, repair and related expenses with respect to properties 
within the Presidio.
  (b) Public Information and Interpretation.--The Secretary shall be 
responsible, in cooperation with the Presidio Trust, for providing 
public interpretative services, visitor orientation and educational 
programs on all lands within the Presidio.
  (c) Other.--Those lands and facilities within the Presidio that are 
not transferred to the administrative jurisdiction of the Presidio 
Trust shall continue to be managed by the Secretary. The Secretary and 
the Presidio Trust shall cooperate to ensure adequate public access to 
all portions of the Presidio.
  (d) Park Service Employees.--No person who was a career employee of 
the National Park Service as of October 1, 1994, and who is employed at 
the Presidio as of the transfer of lands and facilities to the Presidio 
Trust under this Act shall be involuntarily separated from service by 
reason of such transfer.

SEC. 3. THE PRESIDIO TRUST.

  (a) Establishment.--There is established a wholly owned government 
corporation to be known as the Presidio Trust (hereinafter in this Act 
referred to as the ``Trust'').
  (b) Transfer.--(1) Within 60 days after receipt of a request from the 
Trust for the transfer of any parcel within the area depicted as area B 
on the map entitled ``Presidio Trust Number 1,'' dated June 1995, the 
Secretary shall transfer such parcel to the administrative jurisdiction 
of the Trust. Within one year after the first meeting of the Board of 
Directors of the Trust at which a quorum is present, the Board shall 
request the Secretary to transfer any remaining parcels within such 
area B. Such map shall be on file and available for public inspection 
in the offices of the Trust and in the offices of the National Park 
Service, Department of the Interior. The Trust and the Secretary may 
jointly make technical and clerical revisions in the boundary depicted 
on such map. Such areas shall remain within the boundary of the Golden 
Gate National Recreation Area. The Secretary shall retain those 
portions of the building identified as number 103 as the Secretary 
deems essential for use as a visitor center. The building shall be 
named the ``William Penn Mott Visitor Center''. With the consent of the 
Secretary, the Trust may at any time transfer to the administrative 
jurisdiction of the Secretary any other properties within the Presidio 
which are surplus to the needs of the Trust and which serve essential 
purposes of the Golden Gate National Recreation Area. The Trust is 
encouraged to transfer to the administrative jurisdiction of the 
Secretary open space areas which have a high public use potential and 
are contiguous to other lands administered by the Secretary.
  (2) The Secretary shall transfer, with the transfer of administrative 
jurisdiction over any property, all leases, concessions, licenses, 
permits, and other agreements relating to such property. Upon the 
transfer of such property the Secretary shall transfer the unobligated 
balance of all funds appropriated to the Secretary for the operation of 
the Presidio, together with any revenues and unobligated funds 
associated with leases, concessions, licenses, permits, and agreements 
relating to properties transferred to the Trust.
  (c) Board of Directors.--
          (1) In general.--The powers and management of the Trust shall 
        be vested in a Board of Directors (hereinafter referred to as 
        the ``Board'') consisting of the following 7 members:
                  (A) The Secretary of the Interior or the Secretary's 
                designee.
                  (B) Six individuals, who are not employees of the 
                Federal Government, appointed by the President, who 
                shall possess extensive knowledge and experience in one 
                or more of the fields of city planning, finance, real 
                estate, and resource conservation. At least 3 of these 
                individuals shall reside in the city and county of San 
                Francisco. The President shall make the appointments 
                referred to in this subparagraph within 90 days after 
                the enactment of this Act.
          (2) Terms.--Members of the Board appointed under paragraph 
        (1)(B) shall each serve for a term of 4 years, except that of 
        the members first appointed, 3 shall serve for a term of 2 
        years. Any vacancy in the Board shall be filled in the same 
        manner in which the original appointment was made, and any 
        member appointed to fill a vacancy shall serve for the 
        remainder of the term for which his or her predecessor was 
        appointed. No appointed director may serve more than 8 years in 
        consecutive terms. No member of the Board of Directors may have 
        a development or financial interest in any tenant or property 
        of the Presidio.
          (3) Quorum.--Four members of the Board shall constitute a 
        quorum for the conduct of business by the Board.
          (4) Organization and compensation.--The Board shall organize 
        itself in such a manner as it deems most appropriate to 
        effectively carry out the authorized activities of the Trust. 
        Board members shall serve without pay, but may be reimbursed 
        for the actual and necessary travel and subsistence expenses 
        incurred by them in the performance of the duties of the Trust.
          (5) Liability of directors.--Members of the Board of 
        Directors shall not be considered Federal employees by virtue 
        of their membership on the Board, except for purposes of the 
        Federal Tort Claims Act and the Ethics in Government Act.
          (6) Public liaison.--The Board shall meet at least 3 times 
        per year in San Francisco and at least one meeting shall be 
        open to the public. The Board shall establish procedures for 
        providing public information and opportunities for public 
        comment regarding policy, planning, and design issues through 
        the Golden Gate National Recreation Area Advisory Commission.
  (d) Duties and Authorities.--In accordance with the purposes set 
forth in this Act and in section 1 of the Act entitled ``An Act to 
establish the Golden Gate National Recreation Area in the State of 
California, and for other purposes'', approved October 27, 1972 (Public 
Law 92-589; 86 Stat. 1299; 16 U.S.C. 460bb), and in accordance with the 
general objectives of the general management plan approved for the 
Presidio, the Trust shall manage the leasing, maintenance, 
rehabilitation, repair and improvement of property within the Presidio 
which is under its administrative jurisdiction. The Trust may 
participate in the development of programs and activities at the 
properties that have been transferred to the Trust. In exercising its 
powers and duties, the Trust shall have the following authorities:
          (1) The Trust is authorized to manage, lease, maintain, 
        rehabilitate and improve, either directly or by agreement, 
        those properties within the Presidio which are transferred to 
        the Trust by the Secretary.
          (2)(A) The Trust is authorized to negotiate and enter into 
        such agreements, leases, contracts and other arrangements with 
        any person, firm, association, organization, corporation or 
        governmental entity, including without limitation entities of 
        Federal, State and local governments (except any agreement to 
        convey fee title to any property located at the Presidio) as 
        are necessary and appropriate to finance and carry out its 
        authorized activities. Agreements under this paragraph may be 
        entered into without regard to section 321 of the Act of June 
        30, 1932 (40 U.S.C. 303b).
          (B) Except as provided in subparagraphs (C), (D), and (E), 
        Federal laws and regulations governing procurement by Federal 
        agencies shall apply to the Trust.
          (C) In exercising authority under section 303(g) of the 
        Federal Property and Administrative Services Act of 1949 (41 
        U.S.C. 253(g)) relating to simplified purchase procedures, the 
        Trust is authorized, to use as the dollar limit of each 
        purchase or contract under this subsection an amount which does 
        not exceed $500,000.
          (D) In carrying out the requirement of section 18 of the 
        Office of Federal Procurement Policy Act (41 U.S.C 416), the 
        Trust is authorized to furnish the Secretary of Commerce for 
        publication notices of proposed procurement actions, to use as 
        the applicable dollar threshold for each expected procurement 
        an amount which does not exceed $1,000,000.
          (E) The Trust shall establish procedures for lease agreements 
        and other agreements for use and occupancy of Presidio 
        facilities, including a requirement that in entering into such 
        agreements the Trust shall obtain reasonable competition.
          (F) The Trust shall develop a comprehensive program for 
        management of those lands and facilities within the Presidio 
        which are transferred to the Trust. Such program shall be 
        designed to reduce costs to the maximum extent possible. In 
        carrying out this program, the Trust shall be treated as a 
        successor in interest to the National Park Service with respect 
        to compliance with the National Environmental Policy Act and 
        other environmental compliance statutes. Such program shall 
        consist of--
                  (i) demolition of all structures which cannot be 
                cost-effectively rehabilitated and are not of the 
                highest degree of historical significance,
                  (ii) new construction which would be limited to 
                replacement of existing structures of similar size in 
                existing areas of development, and
                  (iii) examination of a full range of reasonable 
                options for carrying out routine administrative and 
                facility management programs.
        The Trust shall consult with the Secretary in the preparation 
        of this program.
          (3) The Trust is authorized to appoint and fix the 
        compensation and duties of an executive director and such other 
        officers and employees as it deems necessary without regard to 
        the provisions of title 5, United States Code, governing 
        appointments in the competitive service, and may pay them 
        without regard to the provisions of chapter 51, and subchapter 
        III of chapter 53, title 5, United States Code (relating to 
        classification and General Schedule pay rates).
          (4) To augment or encourage the use of non-Federal funds to 
        finance capital improvements on Presidio properties transferred 
        to its jurisdiction, the Trust, in addition to its other 
        authorities, shall have the following authorities:
                  (A) The authority to guarantee any lender against 
                loss of principal or interest on any loan, provided 
                that (i) the terms of the guarantee are approved by the 
                Secretary of the Treasury, (ii) adequate guarantee 
                authority is provided in appropriations Acts, and (iii) 
                such guarantees are structured so as to minimize 
                potential cost to the Federal Government. No loan 
                guarantee under this Act shall cover more than 75 
                percent of the unpaid balance of the loan. The 
                Secretary of the Treasury shall collect a commercially 
                reasonable guarantee fee in connection with each loan 
                guaranteed under this Act. The authority to enter into 
                any such loan guarantee agreement shall expire at the 
                end of 12 years after the date of enactment of this 
                Act.
                  (B) The authority, subject to available 
                appropriations, to make loans to the occupants of 
                property managed by the Trust for the preservation, 
                restoration, maintenance, or repair of such property.
                  (C) The authority to issue obligations to the 
                Secretary of the Treasury, but only if the Secretary of 
                the Treasury agrees to purchase such obligations after 
                determining that the projects to be funded from the 
                proceeds thereof are credit worthy and that a repayment 
                schedule is established. The Secretary of the Treasury 
                is authorized to use as a public debt transaction the 
                proceeds from the sale of any securities issued under 
                chapter 31 of title 31, United States Code, and the 
                purposes for which securities may be issued under such 
                chapter are extended to include any purchase of such 
                notes or obligations acquired by the Secretary of the 
                Treasury under this subsection. The aggregate amount of 
                obligations issued under this subparagraph which are 
                outstanding at any one time may not exceed $50,000,000. 
                Obligations issued under this subparagraph shall be in 
                such forms and denominations, bearing such maturities, 
                and subject to such terms and conditions, as may be 
                prescribed by the Secretary of the Treasury, and shall 
                bear interest at a rate determined by the Secretary of 
                the Treasury, taking into consideration current market 
                yields on outstanding marketable obligations of the 
                United States of comparable maturities. No funds 
                appropriated to the Trust may be used for repayment of 
                principal or interest on, or redemption of, obligations 
                issued under this paragraph. All obligations purchased 
                under authority of this subparagraph must be authorized 
                in advance in appropriations Acts.
                  (D) The Trust shall be deemed to be a public agency 
                for the purpose of entering into joint exercise of 
                powers agreements pursuant to California government 
                code section 6500 and following.
          (5) The Trust may solicit and accept donations of funds, 
        property, supplies, or services from individuals, foundations, 
        corporations, and other private or public entities for the 
        purpose of carrying out its duties. The Trust shall maintain 
        philanthropic liaison with the Golden Gate National Park 
        Association, the fund raising association for the Golden Gate 
        National Recreation Area.
          (6) Notwithstanding section 1341 of title 31 of the United 
        States Code, all proceeds received by the Trust shall be 
        retained by the Trust, and such proceeds shall be available, 
        without further appropriation, for the preservation, 
        restoration, operation and maintenance, improvement, repair and 
        related expenses incurred with respect to Presidio properties 
        under its jurisdiction. Upon the request of the Trust, the 
        Secretary of the Treasury shall invest excess moneys of the 
        Trust in public debt securities with maturities suitable to the 
        needs of the Trust.
          (7) The Trust may sue and be sued in its own name to the same 
        extent as the Federal Government. Litigation arising out of the 
        activities of the Trust shall be conducted by the Attorney 
        General, as needed; except that the Trust may retain private 
        attorneys to provide advice and counsel, and to represent the 
        Trust in proceedings to enforce and defend the contractual 
        obligations of the Trust.
          (8) The Trust shall have all necessary and proper powers for 
        the exercise of the authorities invested in it.
          (9) For the purpose of compliance with applicable laws and 
        regulations concerning properties transferred to the Trust by 
        the Secretary, the Trust shall negotiate directly with 
        regulatory authorities.
  (e) Insurance.--The Trust shall procure insurance against any loss in 
connection with the properties managed by it or its authorized 
activities as is reasonable and customary.
  (f) Building Code Compliance.--The Trust shall bring all properties 
under its jurisdiction into compliance with Federal building codes and 
regulations appropriate to use and occupancy within 10 years after the 
enactment of this Act.
  (g) Taxes.--The Trust shall be exempt from all taxes and special 
assessments of every kind in the State of California, and its political 
subdivisions, including the city and county of San Francisco.
  (h) Financial Information and Report.--(1) The Trust shall be treated 
as a wholly owned Government corporation subject to chapter 91 of title 
31, United States Code (commonly referred to as the Government 
Corporation Control Act). Financial statements of the Trust shall be 
audited annually in accordance with section 9105 of title 31 of the 
United States Code.
  (2) At the end of each calendar year, the Trust shall submit to the 
Congress a comprehensive and detailed report of its operations, 
activities, and accomplishments for the prior fiscal year. The report 
also shall include a section that describes in general terms the 
Trust's goals for the current fiscal year.
  (i) Savings Clause.--Nothing in this section shall preclude the 
Secretary from exercising any of the Secretary's lawful powers within 
the Presidio.
  (j) Leasing.--In managing and leasing the properties transferred to 
it, the Trust should consider the extent to which prospective tenants 
maximize the contribution to the implementation of the General 
Management Plan for the Presidio and to the generation of revenues to 
offset costs of the Presidio. The Trust shall give priority to the 
following categories of tenants: tenants that enhance the financial 
viability of the Presidio thereby contributing to the preservation of 
the scenic beauty and natural character of the area; tenants that 
facilitate the cost-effective preservation of historic buildings 
through their reuse of such buildings, or tenants that promote through 
their activities the general programmatic content of the plan.
  (k) Reversion.--If the Trust reasonably determines by a two-thirds 
vote of its Board of Directors that it has materially failed to, or 
cannot, carry out the provisions of this Act, all lands and facilities 
administered by the Trust shall revert to the Secretary of Defense to 
be disposed of in accordance with section 2905(b) of the Defense 
Authorization Act of 1990 (104 Stat. 1809), except that--
          (1) the terms and conditions of all agreements and loans 
        regarding such lands and facilities entered into by the Trust 
        shall be binding on any successor in interest; and
          (2) the city of San Francisco shall have the first right of 
        refusal to accept all lands and facilities formerly 
        administered by the Trust.
  (l) Limitations on Funding.--(1) From amounts made available to the 
Secretary for the operation of areas within the Golden Gate National 
Recreation Area, not more than $25,000,000 shall be available to carry 
out this Act in each fiscal year after the enactment of this Act until 
the plan is submitted under paragraph (2). Such sums shall remain 
available until expended.
  (2) Within one year after establishment of the Trust, the Trust shall 
submit to Congress a plan which includes a schedule of annual 
decreasing Federally appropriated funding such as will achieve total 
self-sufficiency for the Trust within 12 complete fiscal years after 
establishment of the Trust. That plan shall provide for annual 
reductions in Federally appropriated funding such that the Trust will 
be 80 percent self-sufficient at the end of 7 complete fiscal years 
after establishment. The plan shall provide for elimination of all 
Federally appropriated funding for public safety and fire protection 
purposes on lands or facilities administered by the Trust at the end of 
5 complete fiscal years after establishment of the Trust. For each of 
the 11 fiscal years after fiscal year 1997, there are authorized to be 
appropriated to the Trust not more than the amounts specified in such 
plan. Such sums shall remain available until expended.
  (m) GAO Audit.--Ten years after the date of establishment of the 
Trust, the General Accounting Office shall conduct a complete audit of 
the activities of the Trust and shall report the results of that audit 
to the appropriate congressional committees. The General Accounting 
Office shall include in that audit an analysis of the ability of the 
Trust to initiate payments to the Treasury.
  (n) Separability of Provisions.--If any provisions of this Act or the 
application thereof to any body, agency, situation, or circumstance is 
held invalid, the remainder of the Act and the application of such 
provision to other bodies, agencies, situations, or circumstances shall 
not be affected thereby.
                          purpose of the bill

    The purpose of the bill is to provide a cost-effective 
approach for the future management of the Presidio of San 
Francisco.

                  background and need for legislation

    The 1480-acre Presidio was the longest continuous serving 
military base in the history of the country until it was 
transferred to the National Park Service (NPS) on October 1, 
1994. The former base, located at the foot of the Golden Gate 
Bridge, includes many historic buildings, natural resources and 
provides opportunities for outdoor recreation.
    Overall there are 870 buildings at the Presidio, totaling 
about 6.3 million square feet of space (by comparison there are 
about 4 million square feet in one of the two World Trade 
Center buildings). About 550 of these buildings are historic 
and contribute to the national landmark designation for the 
entire Presidio. Although the military has funded an $80 
million basewide upgrade of utility systems, almost none of the 
buildings meet existing codes for electrical, earth quake 
protection, etc. The current condition of these buildings has a 
negative impact on their revenue/leasing potential.
    About half of the overall Presidio is undeveloped open 
space. While there are scattered opportunities for outdoor 
recreation within the Presidio, most of the recreation areas 
are along the Pacific coast and San Francisco Bay. These lands, 
totaling about 150 acres, have been managed by NPS for over 10 
years, prior to any discussion of the closure of the Presidio.
    In 1972, legislation establishing the Golden Gate National 
Recreation Area in the San Francisco Bay area was enacted. 
Although neither the legislative study completed by NPS or the 
bill passed by Congress contemplated that NPS would manage the 
entire Presidio area, it was all included in the park boundary 
as enacted. Further, the 1972 Act stated that if the Presidio 
ever became surplus to the needs of the Department of Defense, 
it would be transferred to the jurisdiction of the Secretary of 
the Interior for purposes of the Act.
    In 1989, the Base Closure and Realignment Commission 
determined that the Presidio was surplus and should be closed 
by October 1, 1994. NPS subsequently began planning for the 
transition of the base into an area to be managed by NPS. The 
original decision by the Defense Department to vacate the 
Presidio entirely was subsequently modified to permit the 6th 
Army to continue to occupy about one third of the Presidio.
    NPS quickly determined that the Presidio had facilities far 
in excess of agency needs and that it would have to develop a 
plan for other uses of the facilities. In 1993, Congress 
enacted Public Law 103-175, permitting the Secretary of the 
Interior to lease out about 1.2 million square feet of the 
Presidio and to retain all funds from that rental without 
appropriation. That legislation was designed as an experiment 
to determine the viability of NPS as a real estate manager for 
the Presidio. The legislation, which was agreed to on a 
bipartisan basis, provided for the leasing of some of the most 
commercially viable real estate on the entire base. To date, 
NPS has not signed leases for any of those facilities; however, 
they are in the final stages of negotiating a lease for 73,000 
square feet or six percent of that offering.
    While this experimental legislation permitting NPS to 
implement its plans for the Presidio was enacted, legislation 
to fully implement the NPS plan stalled late in the 103rd 
Congress due to opposition in both the House of Representatives 
and the Senate.
    In the fall of 1994, NPS completed their plan for the 
Presidio. The NPS plan calls for the establishment of a trust 
to manage certain portions of the Presidio to reduce the cost 
to the Federal Government. Shortly after the NPS plan was 
completed, the Army announced its plan to leave the Presidio 
entirely on October 1, 1995. The departure of the Army will 
have a significant impact on implementation of the NPS plan, 
since NPS was relying on their annual lease payments (estimated 
$12-15 million annually) to provide the balance of the annual 
operating costs for the Presidio. Under the NPS plan, open 
space at the Presidio would be expanded to 65 percent of the 
area through the demolition of 276 buildings.
    Since the Federal Government already owns the Presidio and 
is already spending $25 million per year at this site, the key 
question is how to develop an approach which minimizes future 
Federal involvement and cost, and yet provides a reasonable 
opportunity for success at the Presidio. There continues to be 
some pressure for sale of the Presidio lands and facilities. In 
fact, the Senate has included sale of the Presidio in their 
budget resolution, calculating the value of the property to be 
$555 million. That is an amount which is both too high and too 
low. It is too high because there is currently no zoning for 
the land and it could take 10-20 years to secure an unknown 
type of zoning and begin development. On the other hand, it is 
too low because the amount is far less than the property would 
be worth if fully developed. Thus, land values are extremely 
speculative.
    One of the major issues at the Presidio has been its 
overall cost. The truth is no one has done an analysis to 
determine the minimum operating cost for the Presidio. Until 
the Army announced their intention to withdraw entirely, NPS 
projected the total annual cost of the Presidio to be about $40 
million, making it by far the most expensive area managed by 
NPS. Now NPS estimates the cost of the Presidio to be about $30 
million. Of this total, $25 million would be the annual NPS 
cost and the balance would be paid by the tenants.
    By comparison, the Fiscal Year 1996 cost to operate the 
next most costly park, Yellowstone National Park, is $20 
million. The total cost to manage the balance of the 73,000-
acre Golden Gate National Recreation Area, which is the most 
heavily visited area in the National Park System, is $11 
million.
    Of course these annual operating costs do not include the 
cost for capital improvements. The NPS plan calls for total 
development costs of $741 million. Of this total, NPS projects 
nearly $400 million would be the responsibility of tenants, 
with the Federal Government responsible for the balance. The 
amount to be contributed by tenants for capital improvements is 
highly speculative, as these contributions would be in lieu of 
rental payments, and at the present time NPS cannot secure 
rental payments adequate to cover its annual operating costs of 
the Presidio, let alone make the basic improvements to 
facilitate leasing of currently unmarketable properties.
    The total cost of the NPS plan for both operations and 
capital improvements over the 15 year life of the plan is $600 
million for operations (15 years at $40 million/year) and $741 
million for development, totaling about $1.3 billion.

                            committee action

    H.R. 1296 was introduced on March 27, 1995, by 
Congresswoman Pelosi. The bill was referred to the Committee on 
Resources, and within the Committee to the Subcommittee on 
National Parks, Forests and Lands. On May 16, 1995, the 
Subcommittee held a hearing on H.R. 1296. On June 27, 1995, the 
Subcommittee met to mark up H.R. 1296. An amendment in the 
nature of a substitute was offered by Congressman Hansen, and 
adopted by voice vote. The bill was then ordered favorably 
reported to the Full Committee in the presence of a quorum. On 
July 12, 1995, the Full Resources Committee met to consider 
H.R. 1296. Congressman Hansen offered an amendment affecting 
the property to be transferred to the Presidio Trust; it was 
adopted by unanimous consent. Congressmen Duncan offered an 
amendment relating to the authority to guarantee loans and to 
reduce the total amount of bonds which can be issued by the 
Secretary of the Treasury. It was adopted by voice vote. The 
bill, as amended, was then ordered favorably reported to the 
House of Representatives, in the presence of a quorum.

                      section-by-section analysis

Section 1. Findings

    This section contains six findings about the Presidio, 
including findings about its natural and historical resources 
and the proposed management structure.

Section 2. Authority and responsibility of the Secretary of the 
        Interior

    This section outlines the responsibilities of the Secretary 
of the Interior at the Presidio, as caretaker of certain 
portions of the Presidio until the Presidio Trust is 
established.
    Subsection (a) allows the Secretary to continue to manage 
leases in existence on the date of enactment of the Act. 
Additionally, the section provides for the continuation of any 
leases which may expire prior to establishment of the Trust. 
This section also permits NPS to retain proceeds from any 
lease, without further appropriation, to assist in funding for 
the Presidio. The bill waives the requirement that the Federal 
Government receive only monetary consideration for a lease to 
give the Secretary flexibility to negotiate a lease agreement 
which would allow the tenant to finance the repair or 
rehabilitation of all or part of the building it is occupying.
    In addition, this subsection specifically precludes the 
Secretary from entering into any new leases. The Committee is 
very concerned that the Secretary is currently pursuing leases 
which will return less than full fair market value. Any such 
action by the Secretary would seriously undermine the ability 
of the Presidio Trust to achieve self-sufficiency.
    Subsection (b) recognizes the expertise of NPS in providing 
visitor information and education programs. This subsection 
establishes that the Secretary shall be responsible for these 
programs throughout the Presidio, both on lands managed by the 
Secretary and on lands administered by the Trust.
    Subsection (c) provides that those lands not transferred to 
the Trust will continue to be managed by the Secretary as part 
of Golden Gate National Recreation Area. These lands consist 
primarily of lands within the Presidio which were managed by 
the Secretary prior to October 1, 1994. Funding for the 
administration of these lands has been previously estimated by 
NPS to be about $400,000 and these funds are already included 
in the operating base for Golden Gate National Recreation Area.
    Subsection (d) protects NPS career employees from adverse 
action as a result of the implementation of this legislation. 
The Committee recognizes that there are a number of long-term 
career employees who could be adversely affected by this 
legislation and expects NPS to find suitable positions for 
these employees within the agency. The Committee does not 
intend for this protection to extend to employees transferred 
to the NPS as part of the transfer of the administrative 
jurisdiction from the Army to NPS. The Trust may elect to hire 
some employees currently working for NPS; however, the 
Committee does not intend this language to establish any 
requirement that the Trust hire NPS employees.

Section 3. The Presidio Trust

    This section establishes the Presidio Trust and outlines 
its duties and authorities. The Presidio Trust would be an 
independent government corporation established in accord with 
the Government Corporation Control Act. The Committee is 
convinced that separation of the Trust from the Interior 
Department will result in an overall cost-savings to the 
government and increase the financial viability of the Trust.
    Subsection (b) transfers administrative jurisdiction over 
about 80 percent of the lands at the Presidio from the 
Secretary to the Trust over a period of up to one year after 
the establishment of the Trust. The lands to be retained for 
administration by the Secretary include mostly open space areas 
and a few historic structures, and constitute the primary 
public use areas at the Presidio. The area for which the Trust 
would be responsible includes essentially all of the leasable 
building space. The Committee rejected a more integrated 
approach to management of the lands where the Trust would be 
responsible for managing just buildings and the Secretary would 
be responsible for managing everything else as unworkable. The 
Committee expects that NPS and the Trust will fully cooperate 
over the one year transition period as provided for in the 
legislation.
    NPS does have clear expertise in interpretation and public 
education, and the Committee provides for utilization of this 
NPS expertise throughout the Presidio. However, NPS does not 
have unique expertise in the management of roads or utilities, 
grounds maintenance, or even forest management. Assigning these 
responsibilities to the Trust would ensure that they are 
undertaken in the most cost-effective manner. Furthermore, the 
Committee notes that Section 3(d)(2) of the legislation 
authorizes the Trust to continue to make use of NPS expertise 
in any of these program areas as desired by the Trust.
    This subsection also authorizes NPS to establish a visitor 
center at the main post of the Presidio. While this site is 
outside the boundary of lands to be administered by the 
Secretary, the Committee believes this would be a suitable site 
for this facility. Since there is a high demand for leasable 
space in the Main Post area, the Committee expects other NPS 
administrative offices would be located on lands administered 
by the Secretary. The Committee directs that the visitor center 
be named in honor of the former visionary NPS Director, William 
Penn Mott.
    Subsection (b) also provides for the future transfer of 
undeveloped, open space lands from the Trust to the Secretary. 
Over time, it is likely that existing buildings will be removed 
and additional open space created. As additional open space 
areas are established adjacent to land administered by the 
Secretary, it is logical for these lands to be administered by 
the Secretary. Such an approach would be consistent with the 
original legislative intent of the 1972 Golden Gate national 
Recreation Area establishment legislation.
    Finally, subsection (b) provides for transfer to the Trust 
of all leases negotiated by the Secretary, as well as any 
unobligated funds the Secretary is holding for the Presidio. 
Since funding for management of lands to be retained by the 
Secretary as part of Golden Gate National Recreation Area is 
already built into the park base funding, the Committee 
believes that no additional funding is necessary.
    Subsection (c) provides for establishment of a seven member 
Board of Directors to guide the activities of the Trust. The 
Committee has included a 90-day deadline for the appointment by 
the President of the Board of Directors. The Committee 
considers it essential that the Board be established as soon as 
possible. The Committee expects the Board of Directors to adopt 
guidelines consistent with current Federal law and regulations 
concerning ethics, conflict of interest and financial 
disclosure.
    The Board would be required to meet at least three times 
per year in San Francisco. The Committee notes that the Trust 
is a government corporation acting on behalf of the public 
benefit and interest. The Committee encourages the Board to be 
open and accessible to persons and organizations interested in 
the activities of the Trust. The Committee encourages the Trust 
to develop a process to provide for community input, in 
particular input from adjacent neighborhoods, which could be 
directly affected by Trust activities.
    Subsection (d) directs that the Trust carry out its 
activities in accord with Section 1 of the legislation 
establishing Golden Gate National Recreation Area, as well as 
the general objectives of the approved general management plan 
for the Presidio. This section sets forth the authorities of 
the Trust.
    Subsection (d)(2) authorizes the Trust to enter into 
contracts, leases, cooperative agreements, or other agreements 
with any person, firm, organization, corporation or government 
entity as necessary to carry out its activities. The Committee 
notes that under this authority, the Trust could execute an 
agreement with NPS to continue to provide for public safety on 
lands managed by the Trust, should the Trust determine this 
arrangement to be beneficial based on cost or other factors. 
This subsection waives the requirement that the Trust receive 
only monetary consideration for a lease to give the Trust the 
flexibility to negotiate a lease agreement which would allow 
the tenant to finance the repair or rehabilitation of part or 
all of the building it is occupying.
    Subsection (d)(2)(B) would exempt the Trust from a small 
number of specifically listed procurement laws. This approach 
will streamline the procurement process for the Trust. The 
exemptions will help the Trust increase efficiency by allowing 
for more innovations in contracting. The Trust faces a 
significant challenge in carrying out its responsibilities. 
This subsection will simplify procurement actions, but maintain 
the integrity of the procurement process.
    Subsection (d)(2)(F) directs the Trust to develop a program 
to reduce costs associated with the Presidio. The Committee 
finds that the cost of the plan for the Presidio as completed 
by NPS is unrealistic. While the Committee does endorse the 
general objectives of that plan, the Committee recognizes that 
development of a reasonable program is essential to ensure the 
success of the Presidio Trust and the long-term preservation of 
the historical and other resources of the Presidio. A key to 
development of a cost-effective program will be an expanded 
program of building demolition. The Committee notes that there 
is no requirement that every historic structure at the Presidio 
be protected in perpetuity. The Committee further recognizes 
that not all historic buildings are of equal significance. The 
Committee urges the Trust to carefully examine the retention of 
each building at the Presidio. The language included in this 
section is not intended to exempt the Trust from any 
environmental or historic preservation law.
    Subsection (d)(4) provides several authorities designed to 
augment or encourage the use of non-Federal funds to finance 
capital improvements. Section 3(d)(4)(A) authorizes the Trust 
to guarantee loans to a potential lessee. This authority could 
only be exercised upon approval of the Treasury Department. The 
Committee expects this authority to be used to a limited 
extent. The main benefit of this authority is that such 
authority would have a substantially smaller budget impact than 
direct appropriations.
    Subsection (d)(4)(C) is identical to language inserted in a 
Presidio bill in the 103rd Congress by the Ways and Means 
Committee. Under this section, the Treasury Department would be 
allowed to purchase debt issued by the Trust to the extent 
provided in advance in appropriation acts. The amount of 
borrowed funds outstanding at any one time could not exceed $50 
million. The authorization of funding under this section would 
be based on the Secretary of the Treasury's determination of 
the creditworthiness of projects.
    Subsection (d)(5) authorizes the Trust to solicit and 
accept donations of funds, property, supplies, or services from 
individuals, foundations, corporations, and other private 
entities. The Committee expects the Trust and the Secretary to 
establish written guidelines and criteria concerning the 
solicitation of donations. The Committee notes that a tax 
deduction would be available for any contributions to the 
United States for public purposes. There is substantial 
interest in the Presidio in the philanthropic community of San 
Francisco and the Committee strongly encourages donations to 
promote the pubic benefit at the Presidio.
    Subsection (d)(6) authorizes the Trust to retain any 
revenues from leases or other agreements concerning property 
managed by the Trust.
    Subsection (d)(9) provides that the Trust shall work 
directly with appropriate local, State and Federal regulatory 
agencies. For example, for the purpose of complying with 
Section 106 of the National Historic Preservation Act, the 
Trust shall work directly with the National Park System, the 
State Historic Preservation Office and the Advisory Council on 
Historic Preservation and enter into programmatic agreements 
where appropriate. The Committee intends for the Presidio Trust 
to comply as a Federal agency with the National Historic 
Preservation Act, including Section 106, Section 110 and 
Section 111 of the Act. By requiring the same level of 
compliance with Federal preservation laws that is required of 
the Department of the Interior and NPS, the Committee feels 
confident that the Presidio Trust will manage historic 
properties located at the Presidio in a manner that will 
protect and preserve their historic and cultural integrity.
    Subsection (g) provides that the Trust will be exempt from 
State and local taxes because it is devoted to an essential 
public and government function and purpose for the benefit of 
the people. The Trust may seek exemption from Federal taxes in 
accordance with procedures established by the Internal Revenue 
Service. This is similar to the treatment of other government 
corporations.
    Subsection (h) provides that the financial records of the 
Trust shall be audited by a reputable firm of certified public 
accountants not less frequently than once per year. This 
analysis, along with a detailed annual report, shall be 
submitted to the appropriate Congressional committees.
    Subsection (j) sets forth the criteria to be used in the 
selection of tenants for the Presidio. The Committee is 
concerned that strict adherence to potential tenants targeted 
in the Presidio general management plan will result in leases 
which are substantially below market value and which will 
seriously undermine the economic viability of the Trust. 
Accordingly, the Committee believes that selection of tenants 
which enhance the financial viability of the Presidio is the 
most important criteria to be used in the tenants selection 
process.
    Subsection (k) outlines a reversionary clause for lands and 
facilities to be administered by the Trust. The Committee 
believes that the establishment of the Trust to manage 
properties at the Presidio is not only feasible, but offers the 
best chance for long-term preservation of Presidio resources. 
However, the Committee also recognizes that this approach is 
largely untested and likely to face unforeseen challenges. 
Accordingly, the Committee included a reversionary clause in 
the unlikely event that the Presidio Trust effort proves 
unsuccessful. Under the reversionary clause, lands and 
facilities administered by the Trust would revert to the 
Department of Defense for disposal following a two-thirds vote 
of the Board of Directors that it cannot carry out the 
provisions of the Act. The Committee notes that there is no 
linkage between this section of the bill and any other specific 
section of the bill. The Committee does not intend that if the 
Presidio Trust is not self-sufficient within 12 years that the 
Board would be automatically required to find that it cannot 
carry out the provisions of the Act.
    Subsection (l) provides limitations on funding for the 
Presidio. The greatest concern of the Committee has been the 
cost of the Presidio. The Committee cannot support funding 
levels for the Presidio as proposed in the NPS plan. Rather 
than authorize a permanent Federal appropriation, the Committee 
believes that all Federal funding should be phased out and that 
the Presidio Trust should become self-sufficient. The Committee 
believes that 12 years is an adequate time period in which to 
achieve self-sufficiency. Since the level of annual funding 
necessary to meet this objective is unknown, the bill directs 
the Trust to submit a schedule for necessary annual finding to 
Congress.
    Subsection (m) provides for a detailed General Accounting 
Office audit of the Trust 10 years after its establishment. The 
Committee recognizes the potential of the Trust to generate 
revenue in excess to its needs and is specifically seeking this 
audit to determine if surplus funds are generated by the Trust 
which could be deposited in the Treasury.

            committee oversight findings and recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of Rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     inflationary impact statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 1296 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                     compliance with house rule xi

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 
1296 does not contain any new budget authority, or an increase 
or decrease in revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
Rule XI of the Rules of the House of Representatives, the 
Committee had received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 1296.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
Rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
1296 from the Director of the Congressional Budget Office.

               congressional budget office cost estimate
                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 3, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1296, a bill to provide for the administration of 
certain Presidio properties at minimal cost to the federal 
taxpayer, as ordered reported by the House Committee on 
Resources on July 12, 1995.
    We estimate that implementing this bill would cost the 
federal government $50 million over the next five years, plus 
any subsidy costs associated with new direct loans and/or 
guarantees, depending on the level and type of credit subsidies 
provided and assuming appropriation of the necessary sums. Most 
of such spending would occur after 1998. Enacting H.R. 1296 
would affect direct spending; therefore, pay-as-you-go 
procedures would apply to the bill.
    H.R. 1296 would have no direct impact on the budgets of 
state or local governments.
    Bill purpose.--H.R. 1296 would establish a wholly owned 
government corporation to be known as the Presidio Trust. Once 
operational, the trust would accept administrative jurisdiction 
of about 80 percent of the property located at the Presidio in 
San Francisco. At that time, the trust would assume 
responsibility for managing, leasing, maintaining, and 
improving this property. The remaining areas of the Presidio, 
along with any lands transferred back by the trust, would 
continue to be administered by the National Park Service (NPS) 
as part of the Golden Gate National Recreation Area (GGNRA).
    The bill would require the NPS to transfer all leases, 
contracts, and other agreements related to lands under the 
trust's jurisdiction, along with: (1) future proceeds from the 
agreements, (2) unobligated balances of previous collections, 
and (3) unobligated funds appropriated for Presidio operations. 
In addition, the bill would authorize the trust to enter into 
new leases and other agreements and to accept donations. The 
trust would be authorized to retain and use, without further 
appropriation, both donated funds and proceeds from commercial 
activities for related operation, maintenance, and capital 
expenditures.
    For the purpose of financing capital improvements to the 
transferred properties, H.R. 1296 would authorize the trust to: 
(1) borrow funds from the federal Treasury, provided that 
outstanding obligations cannot exceed $50 million at any time; 
(2) make loans to occupants of trust properties, subject to 
appropriation; and (3) guarantee loans to occupants made by 
private lenders, subject to approval of the Secretary of the 
Treasury and other conditions. All financing provided from 
these sources would be subject to appropriation of the 
necessary funds.
    Finally, H.R. 1296 would provide for future limitations on 
federal funding for operation of the Presidio. Specifically, 
the bill would authorize the appropriation of no more than $25 
million annually for the Presidio until the trust submits a 
budget plan to eliminate the need for federal appropriations 
within 12 years. For each year covered by the plan, the bill 
would authorize the appropriation of the budgeted amount.
    Estimated cost to the Federal Government.--
    Capital Spending.--The total cost of developing commercial 
space within the Presidio is very uncertain. Depending on the 
condition of each property and the needs of future tenants, 
such costs would include rehabilitation of historic buildings, 
construction of new facilities, and demolition of unusable 
structures. Based on the limited information available at this 
time, CBO estimates that such expenditures would require 
funding of between $125 million and $175 million over the next 
five years, and additional amounts of between $225 million and 
$325 million over the following ten years. Assuming 
appropriation of the authorized amounts, we estimate that the 
trust would borrow $50 million over the 1997-1999 period for 
high-priority projects. Depending on the availability of 
nonfederal financing, and assuming appropriation of the 
necessary amounts for the subsidy costs of providing credit 
assistance, some or all of the remaining capital needs could be 
provided through federal loans or guarantees. Because the bill 
does not establish any limitations on loan levels or specify 
other credit terms, CBO cannot estimate the subsidy cost to the 
federal government of projects that may be funded through such 
assistance.
    Operating Income and Expenses.--For the next few years, 
commercial activities authorized by H.R. 1296 would be limited 
to the rental of properties that can be occupied without 
significant capital improvements. As a result, the trust would 
probably produce little or no net income over this period. Once 
projects involving more marketable buildings have been funded 
and completed, net income would gradually increase.
    Authorizations.--H.R. 1296 would authorize the 
appropriation of up to $25 million annually for the Presidio, 
including the trust established by this bill. Because such 
appropriations (except for the trust) are already authorized 
under current law, and because recent appropriations for 
managing the Presidio are already at the $25 million level, 
this provision would not result in additional spending of 
appropriated funds. Trust expenses (including start-up costs of 
about $2 million for each of fiscal years 1996-1998 and ongoing 
administrative overhead of about $5 million annually beginning 
in 1997 or 1998) are assumed to be included in the $25 million 
operating budget for the Presidio. The bill also provides that 
unobligated balances of previous years' appropriations for the 
Presidio would be transferred to the trust once it becomes 
operational. Presumably any such transfers would be reduced by 
any amounts that the NPS would need to operate its portion of 
the site.
    Basis of estimate.--This estimate is based on information 
provided by the NPS, its consultants, and other affected 
groups, such as prospective tenants. For purposes of this 
estimate, CBO has assumed that H.R. 1296 would be enacted by 
early in fiscal year 1996. We assume that members of the 
Presidio Trust would be appointed during the year and that the 
NPS would transfer all lease properties to the trust sometime 
in 1997.
    Pay-as-you-go effects.--H.R. 1296 would affect direct 
spending by authorizing the trust to collect and spend rental 
and other income from commercial activities as well as donated 
funds. CBO estimates that offsetting receipts generated from 
these sources would be minimal over the 1996-1998 period and 
would in any case be offset by additional direct spending.

------------------------------------------------------------------------
                                 1995       1996       1997       1998  
------------------------------------------------------------------------
Change in outlays...........          0          0          0          0
Change in receipts..........      (\1\)      (\1\)      (\1\)      (\1\)
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                        CHANGES IN EXISTING LAW

    If enacted, H.R. 1296 would make no changes in existing 
law.

                          DEPARTMENTAL REPORTS

    The Committee has received no departmental reports on H.R. 
1296.