U.S. Forest Service:

Fees for Recreation Special-Use Permits Do Not Reflect Fair Market Value

RCED-97-16: Published: Dec 20, 1996. Publicly Released: Dec 20, 1996.

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Pursuant to a congressional request, GAO reviewed the Forest Service's management of the recreation special-use program, focusing on whether: (1) the fees currently charged for recreation special-uses reflect fair market value; (2) application processing and review costs are recovered; and (3) fees reflect fair market value and costs are not being recovered, and if not, why.

GAO found that: (1) in many instances, the Forest Service is not getting fair market fees for commercial and noncommercial recreation special-use permits; (2) the Forest Service's fee system that sets fees for most commercial uses has not been updated in nearly 30 years and generally limits fees to less than 3 percent of a permittee's gross revenues; (3) in comparison, fees for similar commercial uses of nearby state-held land average 5 to 15 percent of a permittee's gross revenues; (4) fees for holders of recreation residence permits are based on out-of-date assessments of the value of the land and, as a result, fees for many of these permit holders are lower than they should be on the basis of current market conditions; (5) while the Forest Service has been authorized to recover costs incurred in reviewing and processing all types of special-use permit applications since as far back as 1952, it has not done so; (6) on the basis of Service-provided information, GAO estimated that in 1994 the costs to review and process special-use permits were about $13 million, but this would not represent the cost to run the entire program, which also includes activities such as annual billing, conducting inspections, and training staff; (7) Service officials acknowledge that because they do not have a cost accounting system, they do not know the cost of administering all aspects of the special-use permit program; (8) the lack of priority given to the program by agency management and the lack of incentives to correct known problems contribute to the Service's problems in collecting fees and recovering costs; (9) as a result, resources needed to improve known program weaknesses have not been made available; and (10) since additional fees collected would generally be returned to the U.S. Treasury and not benefit the forest, there is a lack of incentive for the Service to dedicate the additional resources to address these issues.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to update the methods used to calculate fees for commercial and noncommercial special-use permits so they better reflect fair market values and comply with the requirements of the Independent Offices Appropriations Act of 1952 and Office of Management and Budget Circular A-25. To minimize any impact that large increases in fees could have on permittees, the Service may wish to consider phasing in new fees. In addition, once the fees are updated, the Service needs to routinely keep them up to date.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: The Forest Service has nearly completed a 5-year effort to conduct appraisals and update fees on over 15,000 recreation residences. In many cases, these appraisals were likely to result in fees increasing significantly. However, recent appropriations law directed the Forest Service to develop new appraisal guidelines. Because of this, agency officials estimate that it will be at least 3 or 4 more years before appraisal-based fees are implemented.

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to develop and issue cost recovery regulations so that the agency has the proper legal basis for recouping the administrative costs incurred in reviewing and processing special-use permit applications. In order to fully implement this recommendation, it will be necessary for the Service to develop a cost accounting system.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: The Forest Service has drafted regulations to address the recommendation. However, they have not moved towards finalizing the regulations in more than one and one-half years. No further progress is expected anytime soon.

    Recommendation: The Secretary of Agriculture should also consider seeking legislation permitting the Forest Service to retain application and processing fees in the Forest Service unit where the costs were incurred. Permitting the Service to retain the revenues necessary to offset the costs of the program would provide additional incentive and resources for getting the necessary work done.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: The Forest Service's FY2000 appropriations authorized a 5-year pilot program giving the agency the authority to retain application and processing fees in the Forest Service unit where the costs were incurred. Once the Forest Service finalizes its cost recovery regulations, which it expects to do by December 2000, the agency can: (1) begin charging fees to recover the costs of administering permits; and (2) retain those fees.

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