[Senate Report 111-146]
[From the U.S. Government Publishing Office]
Calendar No. 296
111th Congress Report
SENATE
2d Session 111-146
======================================================================
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.