Forest Service

Ski operators on Forest Service land are required to pay the government fees that are based on fair market values. Although these ski operators had $737 million in gross sales in 1991, they paid the government only about $13.5 million in fees. GAO concludes that the current fee system does not ensure that the Forest Service receives fair market values for using its land. When the graduated rate fee system was put into place more than 20 years ago, it was expected that rates would be adjusted periodically to reflect economic changes. Yet the rates by which fees are calculated have not been updated in more than two decades. The fee system developed by the ski industry also does not deliver fees that reflect fair market value. GAO agrees with the Forest Service that a simplified system is desirable. The goal of developing a simpler system, however, must be secondary to ensuring that fees are based on fair market value.

GAO found that: (1) GRFS does not ensure that the Service receives a fair-market value return for the use of its land, since the Service has not adjusted GRFS rates to reflect changes in economic conditions; (2) the ski industry's fee system does not ensure that collected fees reflect fair-market value, since the industry has designed its system to generate total fees comparable to collections under GRFS; (3) the ski industry's system is simpler and based on a ski area's overall gross sales; (4) most of the ski area permittees favor the industry's system because of its simplicity; and (5) the industry's system would reduce administrative costs, accounting and auditing workloads, and fee assessment appeals.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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