maintain, and operate public park and recreational facilities in reservoir areas and to permit the construction, maintenance, and operation of such facilities. The act also authorizes the Secretary to great leases of lands, including structures or facilities thereon, in reservoir areas for such periods and upon such terms and for such purposes as he may deem reasonable in the public interest. In addition, the Secretary has authority under 10 U.S.C. 2667 to lease lands that are not for the time being required for public use.

In advertising sites for lease for recreational development, it had been the general policy of the Department of the Army to state a fixed annual rental that it expected to receive and then invite competitive bidding among prospective lessees on the basis of the percentage of the annual gross receipts to be paid in addition to the annual rental. However, this procedure in some instances resulted in acceptance of bids requiring payment of a percentage of the annual gross receipts which subsequent events proved to be based on economically unsound forecasts on the part of the lessee.

It is recognized that development of proper recreational facilities requires encouragement of lessees to pursue a profitable lease arrangement, but the Department of the Army was without authority to renegotiate the leases, even though enforcement of a commitment to pay a higher total rental than is economically jusified does not benefit the Government, reduces the lessee's incentive, and increases the management difficulties at the project involved.

The Department of the Army accordingly revised its procedures in November 1956, to emphasize that the development and availability of facilities to the public is the prime consideration. Provision has also been made for renegotiation of leases entered into since that date periodically on the basis of experience in the collection of gross receipts and the development of maximum benefits for the public.

The authority to lease reservoir lands has been, in most instances, an effective means of providing for the construction, maintenance, and operation of public park and recreational facilities by public and private groups.

Several laws have been recently enacted to provide for renegotiation of leases at specific projects entered into prior to November 1, 1956. Inasmuch as most concessions are established under long-term leases, the need for renegotiation may occur from time to time in the future at other projects.

S. 48 will correct inequitable situations which have occurred with respect to many concessionaire leases entered into prior to November 1, 1956. It will not apply to leases entered into since that date as those leases include a renegotiation clause when offered to bidders. The provisions of S. 48 will be applicable to leases granted under any authority of the Secretary of the Army. The Bureau of the Budget and the Secretary of the Army are in favor of S. 48.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D.C., March 29, 1961.

Hon. DENNIS CHAVEZ,

Chairman, Committee on Public Works,
U.S. Senate, Washington, D.C.

MY DEAR MR. CHAIRMAN: This is in reply to your letters of January 10, 1961, requesting views of the Bureau of the Budget on S. 48 and S. 86, and your letter of February 14, 1961, requesting views on S. 897, all bills to authorize the Secretary of the Army to modify certain leases entered into for the provision of recreation facilities in reservoir areas. Bills S. 86 and S. 897 are identical.

The purpose of S. 48 is to permit the renegotiation of concessionaire leases entered into before November 1, 1956, at water resource development projects under the jurisdiction of the Secretary of the Army so as to permit the adjustment of rental from time to time by either increase or decrease whenever the Chief of Engineers determines these actions to be necessary or advisable in the public interest. S. 86 and S. 897 are designed to grant authority to the Secretary of the Army to modify any such concessionaire lease entered into under the act of December 22, 1944 (16 U.S.C. 460d), whenever he determines such modification to be in the public interest.

In reports soon to be submitted to your committee on S. 48, S. 86, and S. 897, the Secretary of the Army indicates that his Department favors enactment of S. 48 since (1) the additional renegotiation authority should be restricted to those leases entered into before November 1, 1956, when a renegotiation clause

was offered to bidders, and (2) the broader language would embrace leases entered into under any authority and not merely the specific act that S. 86 and S. 897 would amend,

The Bureau of the Budget concurs in the views of the Secretary of the Army and, accordingly, would recommend enactment of S. 48. For the reasons outlined in the preceding paragraph, the Bureau would not favor enactment of S. 86 or S. 897.

DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Department of the Army with respect to S. 48 and S. 86, 87th Congress, bills to authorize the Secretary of the Army to modify certain leases entered into for the provision of recreation facilities in reservoir areas.

The purpose of S. 48 is to permit the renegotiation of concessionaire leases entered into before November 1, 1956, at water resource development projects under the jurisdiction of the Secretary of the Army so as to permit the adjustment of rental from time to time by either increase or decrease whenever the Chief of Engineers determines these actions to be necessary or advisable in the public interest. S. 86 is designed to grant authority for the Secretary of the Army to modify any such concessionaire lease entered into under the act of December 22, 1944, as amended (16 U.S.C. 460d), whenever he determines such modification to be in the public interest.

The Department of the Army favors enactment of S. 48.

The Chief of Engineers, under the supervision of the Secretary of the Army, is authorized by the Flood Control Act of 1944 (58 Stat. 889) to construct, maintain, and operate public park and recreational facilities in reservoir areas and to permit the construction, maintenance, and operation of such facilities. The act also authorizes the Secretary of the Army to grant leases of lands, including structures or facilities thereon, in reservoir areas for such periods and upon such terms and for such purposes as he may deem reasonable in the public interest. In addition, the Secretary of the Army has authority under 10 U.S.C. 2667 to lease lands that are not for the time being required for public use. The authority to lease has been, in most instances, an effective means of providing for the construction, maintenance, and operation of public park and recreational facilities by private and public groups.

In advertising sites for lease for recreational development, it had been the general policy of the Department of the Army to state a fixed annual rental that it expected to receive and then invite competitive bidding among prospective lessees on the basis of the percentage of the annual gross receipts to be paid in addition to the annual rental. However, this procedure in some instances resulted in bids and acceptance thereof by the Government-of offers to pay a percentage of the annual gross receipts which subsequent events prove to be based on economically unsound forecasts on the part of the lessee. Nonetheless, and even though it is recognized that development of proper recreational facilities requires encouragement of lessees to pursue a profitable lease arrangement, the Department of the Army was without authority to renegotiate the lease. This was true even though enforcement of a commitment to pay a higher total rental than is economically justified does not benefit the Government, reduces the lessee's incentive, and increases the management difficulties at the project involved. The Department of the Army accordingly revised its procedures in November 1956 to emphasize that the development and availability of facilities to the public is the prime consideration. Provision has also been made for renegotiation of leases periodically in the light of experience in the collection of gross receipts and the development of maximum benefits for the public.

The renegotiation of leases entered into before November 1, 1956, has been the subject of recurring legislation. Renegotiation of concession leases at the Clark Hill Reservoir, the Lake Greeson Reservoir, and the John H. Kerr Reservoir has been authorized by the acts of July 11, 1956, July 2, 1958, and September 6, 1960

(70 Stat. 521; 72 Stat. 294; 74 Stat. 818). In addition, inasmuch as most concessions are established under long-term leases, the need for renegotiation may occur from time to time in the future at other projects. The Department of the Army, therefore, favors enactment of general legislation designed to accomplish this purpose. If the committee favors this principle, it is recommended that S. 48 be enacted because (1) this Department believes that the additional renegotiation authority should be restricted to those leases entered into before November 1, 1956, when a renegotiation clause was offered to bidders, and (2) the broader language would embrace leases entered into under any authority and not merely the specific act that S. 86 would amend.

The fiscal effect of enactment of either S. 48 or S. 86 cannot be readily ascertained.

The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this report for the consideration of the committee.

Sincerely yours,

ELVIS J. STAHR, Jr.,
Secretary of the Army.

[S. 48, 87th Cong., 1st sess.]

A BILL To authorize the Secretary of the Army to modify certain leases entered into for the provision of recreation facilities in reservoir areas

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Chief of Engineers, under the supervision of the Secretary of the Army, is authorized to amend any lease entered into before November 1, 1956, providing for the construction, maintenance, and operation of commercial recreational facilities at a water resource development project under the jurisdiction of the Secretary of the Army so as to provide for the adjustment, either by increase or decrease, from time to time during the term of such lease of the amount of rental or other consideration payable to the United States under such lease, when and to the extent he determines such adjustment or extension to be necessary or advisable in the public interest. No adjustment shall be made under the authority of this Act so as to increase or decrease the amount of rental or other consideration payable under such lease for any period prior to the date of such adjustment.

[S. 48, 87th Cong., 1st sess.]

AN ACT To authorize the Secretary of the Army to modify certain leases entered into for the provision of recreation facilities in reservoir areas

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Chief of Engineers, under the supervision of the Secretary of the Army, is authorized to amend any lease entered into before November 1, 1956, providing for the construction, mainte nance, and operation of commercial recreational facilities at a water resource development project under the jurisdiction of the Secretary of the Army so as to provide for the adjustment, either by increase or decrease, from time to time during the term of such lease of the amount of rental or other consideration payable to the United States under such lease, when and to the extent he determines such adjustment or extension to be necessary or advisable in the public interest. No adjustment shall be made under the authority of this Act so as to increase or decrease the amount of rental or other consideration payable under such lease for any period prior to the date of such adjustment. Passed the Senate June 12, 1961. Attest:

FELTON M. JOHNSTON, Secretary.

Senator RANDOLPH. The Chief of Engineers, under the supervision of the Secretary of the Army, is authorized by the Flood Control Act of 1944, to construct, maintain, and operate public park and recreational facilities in reservoir areas and to permit construction, maintenance, and operation of such facilities.

I shall not labor the matter by discussing the jurisdiction which is given to the Chief of Engineers. It is necessary to indicate that

the Department of the Army has revised its procedures, and there is emphasis on the development and availability of facilities to the public, and this is given, I think it is fair to say, a more important place than it was previously.

As the population of America grows, and the need for recreation increases, it is only reasonable that these reservoirs constructed for another purpose should have facilities for recreation.

The Chair is advised that several laws have been enacted to provide for the renegotiation of leases at specific projects which were entered into prior to November 1, 1956. Inasmuch as most concessions are established under long-term leases, the need for renegotiation may occur from time to time in the future at other projects, and this should be taken into consideration.

So, S. 48 would consider these inequities and allow a renegotiation so that the leases for concessions might be firmly established.

We are advised that the Secretary of the Army is in favor of this legislation. We are also informed that the Bureau of the Budget is agreeable to the passage of this legislation. We will place in the record a full explanation of the pending bill.

I do not believe there is reason for anyone from the Secretary of the Army's Office, through the Chief of Engineers to comment on this measure. Without specific observations from you, Senator Moss, or you, Senator Metcalf, we will indicate that the record has been made and it will be supplemented with this statement. In executive session we will consider appropriate action.

S. 49

The next measure is S. 49. This would provide for the annual audit of bridge commissions and authorities, which have been created by Congress. We would specifically think in terms of the filling of vacancies and membership, and there would be a standard procedure for the anual audit of the financial transactions of various bridge commissions and authorities; to provide for a uniform method of appointment and filling of vacancies and terms of office for the membership of these commissions; to establish uniform rates of compensation for such members; to provide for the transfer of functions and property to State agencies; and to authorize State law enforcement officers to enforce all provisions of the various acts of Congress creating bridge commissions and authorities.

(The bill referred to, S. 49, follows:)

[S. 49, 87th Cong., 1st sess.]

A BILL To provide for the annual audit of bridge commissions and authorities created by Act of Congress, for the filling of vacancies in the membership thereof, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) each bridge commission and authority created by Act of Congress shall provide for an annual audit of its financial transactions by an independent public accountant of recognized standing in such manner as prescribed by the Governors of the States concerned and in accordance with generally accepted auditing standards. Each such commission and authority shall make available for such purposes all books, accounts, financial records, reports, files, and all other papers, documents, or property belonging to or in use by such commission or authority. The General Accounting 75509-61-2

Office is authorized and directed to make available its advice on any matter pertaining to an audit performed pursuant to this section.

(b) The commission or authority within four months following the close of the fiscal year for which the audit is made shall submit a copy of the audit report to the Governors of the States concerned and to the Secretary of Commerce. The report shall set forth the scope of the audit and shall include a statement of assets and liabilities, capital, and surplus or deficit; a statement of surplus or deficit analysis; a statement of income and expense; a statement of sources and application of funds; and such comments and information as may be deemed necessary to keep the Governors of the States concerned and the Secre tary of Commerce informed of the operations and financial condition of the commission.

(c) The Governor of either State concerned or the Secretary of Commerce is authorized to provide for the conduct of further audits of any bridge commission or authority created by Act of Congress if the audit report submitted under subsection (b) is not satisfactory to said Governor or to the Secretary of Commerce, respectively.

(d) The commission or authority shall bear all expenses of the annual audit of its financial transactions as required by this section. All expenses of any additional audit required under this section shall be paid by the official or agency requesting such additional audit.

SEC. 2. (a) Each person who is a member, on the date of enactment of this Act, of a bridge commission or authority created by Act of Congress shall continue in office until the expiration of his present term, except as provided unde subsection (b) of this section.

(b) Where provision is made in the Act creating a bridge commission or authority for membership thereon without limitation as to length of terms of office of the Secretary of Commerce shall, on or before the expiration of ninety days after the date of this Act, reappoint not more than one-third of the persons who are members of such bridge commission or authority on the date of enactment of this Act as members of such bridge commission or authority for a term of two years from the date of reappointment, reappoint not more than one-third of the members of such bridge commission or authority for a term of four years, and reappoint the remaining members for a term of six years. Thereafter the term of each member appointed to such commission or authority shall be six years, except when an appointment is made to fill an unexpired term or when an incum. bent member whose term has expired holds over until his successor is appointed, and vacancies shall be filled as provided under subsection (c) of this section.

(c) A vacancy in the membership of any bridge commission or authority to which this Act is applicable occurring by reason of expiration of term, failure to qualify as a member, death, removal from office, resignation, or otherwise, shall be filled by the Secretary of Commerce. Incumbent members whose terms have expired shall hold over in office until their successors are appointed and qualified. (d) Each member appointed under this Act shall qualify within thirty days after appointment by filing with the Secretary of Commerce an oath that he will faithfully perform the duties imposed upon him by law.

(e) Each member appointed under this Act shall be removable for cause by the Secretary of Commerce.

(f) This section shall not be applicable to ex officio members or State highway department members of such bridge commissions or authorities.

SEC. 3. Each bridge commission and authority created by Act of Congress shall submit an annual report, covering its operations and fiscal transactions during the preceding fiscal year, its financial condition and a statement of all receipts and expenditures during such period, to the Governors of the States concerned and to the Secretary of Commerce not later than four months following the close of the fiscal year for which the audit required under section 1 of this Act is made. SEC. 4. Authority is hereby granted to transfer all functions, powers, duties, responsibilities, authority, assets, liability, obligations, books, records, property, and equipment of any existing bridge commission or authority created by Act of Congress to the highway department or other agency of the State or States concerned, or to joint agencies established by interstate compact or agreement. Such transfer shall be carried out in a manner as may be prescribed or authorized by the laws of the State or States concerned. Upon such transfer, such bridge commission or authority shall cease to exist.