[Senate Report 111-146]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 296
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-146

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                      VIRGIN ISLANDS NATIONAL PARK

                                _______
                                

                 March 2, 2010.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 714]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 714) to authorize the Secretary of the 
Interior to lease certain lands in Virgin Islands National 
Park, and for other purposes, having considered the same, 
reports favorably thereon with amendments and recommends that 
the Act, as amended, do pass.
    The amendments are as follows:
  1. On page 2, line 12, insert ``(as amended, assigned, and 
assumed)'' before the period.
  2. On page 2, line 21, insert ``with the owner of the 
retained use estate'' before ``for''.
  3. On page 3, line 19, strike ``with'' and insert 
``without''.
  4. On page 4, line 5, strike ``and''.
  5. On page 4, between lines 5 and 6, insert the following:
                  (E) include provisions to ensure the 
                protection of the natural, cultural, and 
                historic features of the resort and associated 
                property, consistent with the laws and policies 
                applicable to property managed by the National 
                Park Service; and
  6. On page 4, line 6, strike ``(E)'' and insert ``(F)''.
  7. On page 5, line 3, strike ``effective date'' and insert 
``award''.
  8. On page 5, line 24, strike ``that'' and insert ``who''.

                                PURPOSE

    The purpose of H.R. 714 is to authorize the Secretary of 
the Interior to lease the Caneel Bay resort in Virgin Islands 
National Park.

                          BACKGROUND AND NEED

    The Caneel Bay resort is located on a 170-acre peninsula 
within Virgin Islands National Park, on the island of St. John. 
The resort was established in 1956 by Laurance Rockefeller and 
the Jackson Hole Preserve, a non-profit organization supported 
by the Rockefeller family. The Jackson Hole Preserve also 
purchased and donated most of the land that is now included 
within the park, although initially, the Caneel Bay parcel was 
not included within the park.
    In 1983, the Jackson Hole Preserve donated the land at 
Caneel Bay to the Federal Government for inclusion in the park; 
however, it created a retained use estate and reserved the 
right to continue the resort operations through 2023. Under the 
terms of the reserved use estate, once it expires in 2023 the 
owner of the estate must cease operations and donate the 
buildings and other property covered by the retained use estate 
to the National Park Service.
    In 2004, Jackson Hole Preserve sold the retained use estate 
to CBI Acquisition LLC, which now operates the Caneel Bay 
resort. CBI has a management contract with Rosewood Hotels & 
Resorts to provide the day-to-day operation of the resort.
    H.R. 714 authorizes the Secretary of the Interior to enter 
into a non-competitive lease with the owner of the retained use 
estate for a term of up to 40 years, to provide for the 
continued operation and management of the Caneel Bay resort, if 
the Secretary determines that the lease will provide a greater 
long-term benefit to the park than allowing the retained use 
estate to expire.

                          LEGISLATIVE HISTORY

    H.R. 714, sponsored by Delegate Christensen, passed the 
House of Representatives by a voice vote on February 23, 2009. 
During the 110th Congress, the Committee considered similar 
legislation, H.R. 1143. The Subcommittee on National Parks of 
the Senate Energy and Natural Resources Committee held a 
hearing on that bill on June 17, 2008 (S. Hrg. 110-539), 
although no further action was taken.
    The Subcommittee on National Parks held a hearing on H.R. 
714 on July 15, 2009. (S. Hrg. 111-92). At its business meeting 
on December 16, 2009, the Committee on Energy and Natural 
Resources ordered H.R. 714 favorably reported with amendments.

                        COMMITTEE RECOMMENDATION

    The Committee on Energy and Natural Resources, in open 
business session on December 16, 2009, by a voice vote of a 
quorum present, recommends that the Senate pass H.R. 714, if 
amended as described herein.

                          COMMITTEE AMENDMENTS

    During its consideration of H.R. 714, the Committee adopted 
8 amendments which reflect the recommendations made by the 
National Park Service at the subcommittee hearing. Amendment #5 
adds a requirement that any lease entered into under this Act 
include provisions to ensure the protection of the natural, 
cultural, and historic features of the Caneel Bay resort and 
associated property, consistent with the laws and policies 
applicable to National Park System lands. The other seven 
amendments make technical, clarifying, or conforming changes.

                      SECTION-BY-SECTION ANALYSIS

    Section 1(a) defines key terms used in the bill.
    Subsection (b) authorizes the Secretary of the Interior to 
enter into a lease with the owner of the retained use estate 
for a period not to exceed 40 years, to provide for the 
continued management and operation of the Caneel Bay resort in 
Virgin Islands National Park, if the Secretary determines that 
the long-term benefit to the park would be greater by entering 
into the lease rather than allowing the retained use estate to 
expire and subsequently issuing a concessions contract.
    A lease entered into under the authority of this Act must 
comply with the terms and conditions specified in paragraph 
(b)(4), including that the lease be for the minimum number of 
years practicable; that the lease prohibit any transfer of the 
lease to another party without the written approval of the 
Secretary of the Interior; that the general character of the 
resort property remain unchanged, with no increase in the 
overall size of the resort or the number of guest 
accommodations; that the lease prohibit the sale of partial 
ownership shares or timeshares; that the lease include 
provisions to ensure the protection of the natural, cultural, 
and historic features of the resort, consistent with National 
Park System laws; and that the lease include any other terms 
and conditions the Secretary determines necessary to protect 
Virgin Islands National Park and the public interest.
    Subsection (c) requires the owner of the retained use 
estate, as a condition of the lease, to extinguish and 
relinquish to the Secretary of the Interior all rights under 
the retained use estate, and to transfer, without 
consideration, ownership of improvements on the retained use 
estate to the National Park Service.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

H.R. 714--An act to authorize the Secretary of the Interior to lease 
        certain lands in Virgin Islands National Park

    H.R. 714 would authorize the National Park Service (NPS) to 
execute a lease with property owners at Caneel Bay on St. John 
in the Virgin Islands. Based on information provided by the 
NPS, CBO estimates that implementing the legislation would have 
no effect on discretionary spending. Enacting the legislation 
would increase both offsetting receipts (from lease payments) 
and direct spending of those receipts beginning in fiscal year 
2010, but CBO estimates that any net effect on the federal 
budget would be negligible. Enacting H.R. 714 would not affect 
revenues.
    The legislation contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would not affect the budgets of state, local, or tribal 
governments.
    Under the lease authorized by H.R. 714, the owners of the 
Caneel Bay Resort would continue to operate the facility, which 
is located within the boundary of the Virgin Islands National 
Park, for up to 40 years. The resort is currently operated 
under a retained use estate (RUE) that will expire at the end 
of fiscal year 2023. The RUE was granted by the original owners 
of the resort when they donated the land under that facility to 
the NPS in 1983. The original RUE agreement did not provide for 
any lease payments to the federal government; the lease 
authorized by H.R. 714 would both require such payments and 
authorize the NPS to use the proceeds without further 
appropriation for visitor services and other park expenses.
    The CBO staff contact for this estimate is Deborah Reis. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out H.R. 714.
    The Act is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of H.R. 714, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    H.R. 714, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the National Park Service at the 
July 15, 2009, Subcommittee hearing on H.R. 714 follows:

 Statement of Katherine H. Stevenson, Acting Deputy Director, Support 
      Services, National Park Service, Department of the Interior

    Mr. Chairman, thank you for the opportunity to provide the 
Department of the Interior's views on H.R.714, a bill to 
authorize the Secretary of the Interior to lease certain lands 
in Virgin Islands National Park, and for other purposes.
    The Department supports H.R. 714, with some minor 
amendments.
    This legislation would allow the Secretary of the Interior 
to enter into a lease with the current holder of a retained use 
estate for property at Caneel Bay within Virgin Islands 
National Park after the termination of the retained use estate 
and donation of all improvements to the National Park Service 
(NPS). The Caneel Bay resort is one of two large resorts on the 
island of St. John. Located on a 150-acre peninsula on the 
northwest side of the island, this luxury resort has 
approximately 425 to 450 employees and serves as one of the 
primary economic engines for the U.S. Virgin Islands. A large 
number of employees travel daily to St. John from their 
residences on neighboring St. Thomas. The resort is also an 
Economic Development Center beneficiary and, as such, receives 
various tax exemptions from the Government of the Virgin 
Islands.
    Laurance Rockefeller established the Caneel Bay resort in 
1956. In 1983, Jackson Hole Preserve, a Rockefeller 
corporation, donated the land at Caneel Bay to the United 
States Government for inclusion within Virgin Islands National 
Park and reserved to itself the right to continue its 
operations for 40 years under a retained use estate. Jackson 
Hole Preserve did not convey the improvements on the land to 
the United States at that time. The retained use estate will 
expire on September 30, 2023. The warranty deed stipulates that 
when the retained use estate terminates, the owner of the 
retained use estate must donate the buildings and other 
improvements to the NPS.
    Enactment of H.R. 714 would allow the current holder of the 
retained use estate to negotiate a long-term lease, up to 40 
years, with the NPS that could extend the Caneel Bay Resort 
operation well beyond the year 2023. Such an extension could 
allow the leaseholder to secure financing to undertake capital 
improvements that would most likely not be possible financially 
under the remaining term of the current retained use estate.
    The NPS has evaluated various options for the future use 
and management of the Caneel Bay property. Based upon a value 
analysis, we believe that the continued future operation of 
Caneel Bay as a resort under a lease would provide the greatest 
advantage to the NPS and the U.S. Virgin Islands. A lease could 
provide economic and administrative benefits to the NPS and the 
lessee that are not available or not as viable as under a 
retained use estate or a concession contract, two of the other 
options that were examined.
    Legislation is necessary because the NPS does not have the 
authority to enter into a noncompetitive lease under existing 
regulations (36 CFR Sec.  18, Leasing of Properties in Park 
Areas). The only exceptions to competitive leasing under the 
regulations are for leases to nonprofit organizations or units 
of government, and for leases of duration of 60 days or less.
    We would like to stress that we are supporting this 
legislation because the Caneel Bay resort is an exceptional 
case. In general, where leasing has been determined to be 
appropriate in a national park unit, we support leasing through 
the usual competitive process, consistent with existing law and 
regulations.
    H.R. 714 requires that the operations and maintenance of 
the resort be conducted in a manner consistent with the 
preservation and conservation of the resources and values of 
the park. Additionally, the lease authorized by the bill would 
address the continued protection, preservation, and restoration 
of the property's structures, many of which are more than 50 
years old, and may be eligible for the National Register of 
Historic Places. The lease also would address the fair market 
value rent of the property, constraints on development of 
property during the term of the lease, and the ability to 
transfer the lease in the future.
    The legislation also provides for the rental proceeds to be 
retained by the Virgin Islands National Park and used for 
visitor services and resource protection. It would require 
congressional notification at least 60 days prior to the 
effective date of the lease, similar to the requirement for 
large concession contracts. And, it would require the 
property's conversion to a concession operation after the lease 
expires if the Secretary determines continuation of commercial 
services at the resort to be appropriate. When the current 
retained use estate was created, there were three small 
properties that are integral to the operation of the Caneel Bay 
resort that were not included. These properties could be 
acquired by the NPS and included under the terms of the lease 
that would be authorized by H.R. 714.
    We appreciate the many changes that have been made to this 
legislation since it was first introduced in the 110th Congress 
to help assure that the interests of Virgin Islands National 
Park, and the general public, would be protected if the Caneel 
Bay resort property is leased on a noncompetitive basis. We 
would like to work with the subcommittee on a few minor changes 
that would further clarify the bill language.
    Mr. Chairman, this concludes my prepared remarks. I would 
be pleased to answer any questions you or other members of the 
subcommittee may have.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by H.R. 714 as ordered 
reported.

                                  
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