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SEC. 16. NO EFFECT ON ANILCA PROVISIONS.

Nothing in this Act shall be construed to amend, supercede, or otherwise affect any provision of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3101 et seq.).

PURPOSE OF THE MEASURE

The purpose of S. 208, as ordered reported, is to repeal the Concessions Policy Act of 1965 and to establish a competitive selection process for the awarding of concessions contracts within units of the National Park System.

BACKGROUND AND NEED

When Congress established Yellowstone National Park in 1872, the Secretary of the Interior was provided with authority to grant leases for "the erection of buildings for the accommodation of visitors." This marked the beginning of private concessions operations within National Parks, even before the creation of the National Park Service.

Originally the National Park Service provided for visitor services in parks by administrative action pursuant to general authority contained in the National Park Service Organic Act of 1916. In 1950, the Department of the Interior established official guidelines for concessions operations. In 1965, Congress enacted Public Law 89-249, the Concessions Policy Act, which for the most part codified the Department's guidelines. Among the Federal land managing agencies, only the National Park Service operates with specific concessions legislation.

Current National Park concessions vary in size from small, family-owned businesses, to those operated by subsidiaries of large multinational corporations. Services provided by concessioners range from year-round luxury hotels and restaurants to seasonal canoe and boat rentals. As of December 1992, there were 660 concessioners operating in 132 units of the National Park System.

For the most part, concession permits are issued for smaller or seasonal operators while concession contracts tend to be used for larger, long-term operations. Of the 660 concessioners operating within units of the National Park System, 195 operate pursuant to concession contracts and 465 are covered by permits. In addition, another 1,781 businesses operate under commercial use licenses. Commercial use licenses, which are not governed by the provisions of the Concessions Policy Act, are issued to companies based outside of the park but which rely on park entry for their business, such as tour operators.

Concessions policy has been a topic of intense interest for many years. Numerous Congressional oversight hearings have been conducted by both the Senate and House of Representatives. The issue has been the subject of numerous studies, reports, and analyses prepared by the Congress, the General Accounting Office, the Department of the Interior, the Department's Inspector General, the National Park Service, and a variety of independent research organizations.

In April, 1990, former Secretary of the Interior Manuel Lujan established a Departmental Task Force to review the Park Service's concessions policies. The Task Force concluded that several factors,

including the granting of a preferential right of renewal, the valuation of possessory interest, and provisions allowing for the sale or transfer of a concession contract combined to create a non-competitive environment that did not allow the Federal government to achieve a fair return based on franchise fees and other services provided to the government.

In July 1990, the Department of the Interior incorporated the Task Force's recommendations into a new policy for dealing with National Park concessions issues. The new policy emphasized a higher financial return to the Federal government, increased competition, shorter contract terms, and the elimination or revaluation of possessory interest. The Secretary's directives were incorporated into regulations promulgated by the Park Service on September 3, 1992, and which became effective on October 6, 1992. On January 3, 1993, the Park Service published new standard contract language, which also incorporated the Secretary's directives.

As ordered reported by the Committee, Š. 208 would repeal the 1965 Concessions Policy Act and establish a competitive selection process for concessions contracts awarded by the National Park Service. Many of the provisions in the Department's new regulations and standard contract language are incorporated in S. 208.

LEGISLATIVE HISTORY

S. 208 was introduced by Senator Bumpers on January 26, 1993. The bill is cosponsored by Senators Akaka, Bond, Bradley, Chafee, Cochran, Danforth, Daschle, Dorgan, Exon, Jeffords, Kassebaum, Kohl, Leahy, Lieberman, Metzenbaum, Pell, Pryor, Sarbanes, and Simon.

The Subcommittee on Public Lands, National Parks and Forests held a hearing on S. 208 on June 24, 1993. At the business meeting on February 2, 1994, the Committee on Energy and Natural Resources ordered S. 208, as amended, favorably reported.

COMMITTEE RECOMMENDATIONS AND TABULATION OF VOTES

The Committee on Energy and Natural Resources, in open business session on February 2, 1994, by a majority vote of a quorum present, recommends that the Senate pass S. 208, if amended as described herein.

The roll call vote on reporting the measure was 16 yeas, 4 nays, as follows:

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Mr. Nickles 1
Mr. Craig
Mr. Bennett
Mr. Lott 1

1 Indicates voted by proxy.

COMMITTEE AMENDMENTS

During the consideration of S. 208, the Committee adopted an amendment in the nature of a substitute as original text for the purposes of amendment. The Committee subsequently adopted two additional amendments to the substitute. The major provisions of the amendment, as ordered reported, along with significant changes from the text of S. 208 as introduced include:

REPEAL OF CONCESSIONS POLICY ACT OF 1965

The substitute amendment maintains the provision in S. 208 which repeals the 1965 Concessions Policy Act (the "1965 Act"), while providing that the validity of contracts entered into under the 1965 Act will not be affected.

COMPETITIVE SELECTION PROCESS

The amendment establishes a competitive selection process for the awarding of concessions contracts and directs the Secretary of the Interior (the "Secretary") to prepare a prospectus identifying the minimum contract requirements, and to select the "best proposal." In determining the best proposal factors to be considered include the responsiveness of the proposal to protecting and preserving park resources and providing necessary and appropriate facilities and services at reasonable rates; the experience, related background, and expertise of the applicant, the applicant's financial capability; and the franchise fee offered, although the bill makes clear the consideration of revenue is subordinate to the objectives of protecting and preserving park resources, and of providing necessary and appropriate facilities and services at reasonable rates. As introduced, S. 208 would have established competitive bidding procedures, with the contract awarded to the highest bid from among qualified proposals.

LENGTH OF CONTRACT

As introduced, S. 208 limited the maximum contract length to 10 years. The substitute amendment retains the 10 year maximum for standard contracts, but permits the Secretary to enter into contracts up to 20 years when the Secretary determines that the contract requirements and conditions necessitate a longer term.

PREFERENTIAL RIGHT OF RENEWAL

With the following exception, the amendment prohibits the granting to a concessioner of a preferential right to renew a concessions contract. As introduced, S. 208 authorized the Secretary to grant a preferential right of renewal to concessioners providing outfitting, guide, river running, and other similar services within a park, provided that the concessions contract did not grant the concessioner a possessory interest and the concessioner had operated

satisfactorily during the previous contract term. The Committee amendment would require, instead of authorize, that outfitter and guide concessioners be given a preferential right of renewal, provided that such concessioners did not have a possessory interest. In addition, the Secretary would be required to grant a preferential right of renewal to any concessioner with a contract that the Secretary estimates will have annual gross revenues of no more than $500,000, regardless of whether the concessioner had a possessory interest or not. In both cases, the Secretary would be required to find that the concessioner had operated satisfactorily during the previous contract term and that the concessioner's proposal for the new contract satisfied the minimum requirements established by the Secretary, before granting a preferential right of renewal.

In addition, the amendment includes language directing the Secretary, in selecting the best proposal, to take into consideration the experience, expertise, and related background of the applicant in providing the same or similar services as required by the prospectus.

PREFERENTIAL RIGHT TO PROVIDE ADDITIONAL SERVICES

Like S. 208, the amendment prohibits the granting of a preferential right to a concessioner to provide new or additional services at a park.

POSSESSORY INTEREST

The amendment provides that any concessioner who currently has a possessory interest will retain that interest, as defined under the 1965 Act (either as provided in the concessions contract or "sound value") for the duration of the current contract. A concessioner who is covered by the 1965 Act, and who does not renew the contract, would be entitled to receive the value of the possessory interest, in most cases "sound value" as defined in the 1965 Act. A concessioner who is covered by the 1965 Act and renews the contract under this Act, would be required, as a condition of entering into the new contract, to begin reducing the value of the possessory interest (as of the termination of the previous contract), using straight line depreciation over the useful life of the asset. Such depreciation period may not exceed the depreciation period used for Federal income tax purposes for such asset. A concessioner who enters into a contract under this Act and builds a structure would have an interest in such structure equal to the actual original cost of construction, with the value to be depreciated over the useful life of the structure, not to exceed the depreciation period used for Federal income tax purposes for such asset. A concessioner who is not awarded the subsequent contract would be entitled to receive from the United States or a successor concessioner the depreciated, or book value, of the structure. As introduced, S. 208 provided for a depreciation period of 31.5 years.

FRANCHISE FEES

The amendment adds a provision that if multiple contracts are to be awarded to provide the same or similar outfitting, guide, river running, or other similar service at the same approximate resource

or location within a part, the amendment requires the Secretary to establish an identical franchise fee for all such contracts, based on fair market value, as determined by the Secretary.

USE OF FRANCHISE FEES

The amendment provides that franchise fees are to be used for resource management and protection, maintenance activities, interpretation, and research. Fifty percent of the fees are to be allocated among the parks on the basis of need, as determined by the Secretary, and 50 percent are to be made available to parks in the same proportion as the percentage of total franchise fees collected by the park. This provision is identical to S. 208.

PARK IMPROVEMENT FUND

The amendment adds language directing the Secretary, where practicable, to require a concessioner to establish a park improvement fund in lieu of receiving all or a portion of the franchise fees. The fund would be used to finance activities and projects within the park consistent with the park's general management plan, and other applicable plans.

CONGRESSIONAL FINDINGS

S. 208 contained Congressional findings which stated that facilities should be provided within a park only when the private sector or other public agencies could not adequately provide such facilities within the vicinity of the park. The amendment deletes this provision, restates provisions from the 1965 Act, and adds language making clear that concessions facilities should be provided by the private sector, if possible.

DUTIES OF THE SECRETARY

The amendment adds language requiring the Secretary to set forth in any prospectus the facilities or services to be provided by the Secretary for the concessioner. In addition, the Secretary is directed to promulgate regulations to establish a method or procedure for the resolution of disputes between the Secretary and a concessioner in those instances where the Secretary has been unable to meet the conditions or requirements, or is unable to provide the services contained in the prospectus.

CONGRESSIONAL NOTIFICATION

S. 208 would have required Committee review of any concessions contract with anticipated gross receipts of excess of $1 million or a duration of 10 years or more. The substitute raises the threshold to $5 million, indexed to 1993 constant dollars.

PUBLIC REVIEW

The amendment deletes a provision in S. 208 which would have required public review of concession related construction projects in excess of $1 million.

The amendment is explained in detail in the section-by-section analysis, below.

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