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CONTENTS

51

[graphic]

Statements, letters, exhibits, etc.:

Blair, Don, superintendent of maintenance and operations, White Page

County Bridge Commission...

52

Broide, Mace, administrative assistant to Senator Hartke..

30

Campbell, Hon. Joseph, Comptroller General of the United States 10

Capehart, Senator Homer..

29

Denton, Hon. Winfield K., Representative in Congress

28, 31

Dirksen, Senator Everett McKinley

28

Engle, Senator Clair

66

Douglas, Senator Paul H.

29

Giles, Hon. Robert E., general counsel, Department of Commerce... 30

Hartke, Senator Vance

23

Helpinstill, Hon. C. M., mayor of Freeport, Tex.

61

Hickenlooper, Senator Bourke B.

29

Hughes, Hon. Phillip S., Assistant Director for Legislative Reference,

Bureau of the Budget-

2, 68

H.R. 3019

57

H.R. 8320

60

H.R. 8921

25

Kuchel, Senator Thomas H.

65

Miller, Senator Jack

29, 30

O'Farrill, Hon. Don Romulo, president, Permanent Executive Com-

mittee, Pan American Highway Congress-

70

Ray, Hon. Philip A., Under Secretary of Commerce

8

San Diego County, Calif., beach erosion control.

Senate bill 48

4

Senate bill 49

5

Senate bill 50

12

Senate bill 307

63

Senate bill 811

16, 19

Senate Report 1835, 86th Congress

21

Schwengel, Hon. Fred, Representative in Congress..

41

Shipley, Hon. George E., Representative in Congress-

39
Stahr, Hon. Elvis J., Jr., Secretary of the Army -

3, 13, 67

Stallings, Louis H., chairman, White County Bridge Commission. 43

Summary of S. 48.

1

Summary of S. 49.

12

Summary of S. 50..

15

Teerink, John R., California Department of Water Resources

68

White County Bridge Commission, summary of operations and

financial statement

45

Yarborough, Senator Ralph W

61

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MISCELLANEOUS BILLS

MONDAY, MAY 8, 1961

U. S. SENATE, SUBCOMMITTEE ON FLOOD CONTROL-RIVERS AND HARBORS,

COMMITTEE ON PUBLIC WORKS,

Washington, D.C. The subcommittee met, pursuant to call, at 10:10 a.m., in room 4200, New Senate Office Building, Senator Jennings Randolph, presiding.

Present: Senators Randolph, Muskie, Moss, Metcalf, and Fong.

Senator RANDOLPH. The Subcommittee on Flood Control–Rivers and Harbors of the Committee on Public Works has been called into session for consideration of several pending measures. Of primary importance in the public hearing will be the consideration of legislation covering the general subject of water pollution control.

There are, however, other bills which it seems appropriate to discuss briefly to clear for the record and, perhaps, to consider later in executive session of the subcommittee.

The eminent chairman of this subcommittee, Senator Kerr, of Okahoma, is necessarily absent at the beginning of this hearing. It is understandable if he has only a few minutes to be with us during the day

Comdr. Alan B. Shepard, America's first space voyager, is being honored today in Washington, D.C., by the President of the United States and unnumbered citizens who are proud of his achievement. Senator Kerr, as chairman of the Aeronautical and Space Sciences Committee, will share with others the significant responsibility of arranging his welcome to Capitol Hill.

We are very happy to have Senators Moss and Metcalf present for consideration of these bills.

The first is S. 48. This legislation will authorize the Secretary of the Army to modify certain leases entered into for the provision of recreational facilities in reservoir areas.

(The bill referred to, together with accompanying letters and statement follow :)

S. 48–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 prior to November 1, 1956, at water resource development projects under the jurisdiction of the Secretary of the Army, to provide for adjustment of rental or other consideration from time to time by either an increase or decrease when and to the extent the Chief Engineers determines such adjustment necessary or advisable in the public interest.

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 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 renego tiation 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 $. 48. For the reasons outlined in the preceding paragraph, the Bureau would not favor enactment of S. 86 or S. 897. Sincerely yours,

PHILLIP S. HUGHES, Assistant Director for Legislative Reference.

DEPARTMENT OF THE ARMY,

Washington, D.C., April 7, 1961. Hon. DENNIS CHAVEZ, Chairman, Committee on Public Works, U.S. Senate.

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

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