[House Report 109-640]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-640
======================================================================
NPS CONCESSIONS REFORM ACT OF 2006
_______
September 6, 2006.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Pombo, from the Committee on Resources, submitted the following
R E P O R T
[To accompany H.R. 5802]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 5802) to amend the National Park Service Concessions
Management Improvement Act of 1998, to extend to additional
small businesses the preferential right to renew a concessions
contract entered into under such Act, to facilitate the renewal
of a commercial use authorization granted under such Act, and
for other purposes, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``NPS Concessions Reform Act of 2006''.
SEC. 2. ANNUAL GROSS RECEIPTS.
Section 403(8) of the National Park Service Concessions Management
Improvement Act of 1998 (16 U.S.C. 5952(8)) is amended--
(1) by amending subparagraph (A)(ii) to read as follows:
``(ii) Subject to subparagraph (C), concessions contracts
with anticipated annual gross receipts under $750,000, such
amount to be adjusted annually to reflect changes in the
Consumer Price Index as of the date of the enactment of this
clause. An incumbent concessions contract holder with another
concessions contract with annual gross receipts of $750,000 or
more, not including an outfitting and guide concession
contract, is not eligible for the right authorized by paragraph
(7).''; and
(2) in subparagraph (C), by striking ``$500,000'' and
inserting ``$750,000, such amount to be adjusted annually to
reflect changes in the Consumer Price Index as of the date of
the enactment of the NPS Concessions Reform Act of 2006''.
SEC. 3. DEBRIEFING.
Section 403(5) of the National Park Service Concessions Management
Improvement Act of 1998 (16 U.S.C. 5952(5)) is amended by adding at the
end the following:
``(D) Debriefing.--The Secretary shall provide to any person,
corporation, and other entity that submitted a proposal and who
was not awarded a proposed concessions contract a debriefing as
to why they were not selected as submitting the best proposal
for that concessions contract. Such debriefing must be
requested and must be made within 90 days of the award of the
concessions contract. The Secretary shall not be required to
disclose any proprietary information of the person,
corporation, or other entity that was selected as submitting
the best proposal and awarded the concessions contract.''.
SEC. 4. LEASEHOLD SURRENDER INTEREST AND SOURCE OF FUNDS.
Section 405(a)(2)(A) of the National Park Service Concessions
Management Improvement Act of 1998 (16 U.S.C. 5954(a)(2)(A)) is amended
by inserting after ``pursuant to this title'' the following: ``and may
be pledged as security for other National Park Service contracts using
a combination of leasehold surrender interest if holding one or more
contracts with the National Park Service, and the proceeds resulting
from such pledged security shall not be restricted for use in the park
or parks for which the leasehold surrender interest was pledged''.
SEC. 5. COMMERCIAL USE AUTHORIZATION.
Section 418 of the National Park Service Concessions Management
Improvement Act of 1998 (16 U.S.C. 5966) is amended--
(1) in subsection (c), by adding after ``authorized use.''
the following: ``Such uses shall be subject to limitations and
fees comparable to those that may be imposed on other
authorization holders for the same or similar activities.'';
(2) by amending subsection (e), to read as follows:
``(e) Duration.--The term of any authorization, not subject to
limited numbers pursuant to (b)(2)(D), shall not exceed 5 years. Where
it is determined that only limited numbers of authorizations shall be
issued, the term of such authorizations shall not exceed 5 years. Such
authorizations may be issued to those applicants that have--
``(1) demonstrated the capability to provide quality visitor
services; and
``(2) experience with the resources and values in the park
unit for which the authorization is issued.''; and
(3) by adding at the end the following:
``(g) Cost Recovery.--The Secretary shall not seek to recover costs
from applicants or authorized holders related to capacity studies and
recreation activities and monitoring not associated with
authorizations.''.
Purpose of the Bill
The purpose of H.R. 5802 is to amend the National Park
Service Concessions Management Improvement Act of 1998, to
extend to additional small businesses the preferential right to
renew a concessions contract entered into under such Act, to
facilitate the renewal of commercial use authorization granted
under such Act, and for other purposes.
Background and Need for Legislation
In 1998, Congress approved and the President signed into
law the National Park Service Concessions Management
Improvement Act (Public Law 105-391). The Concessions
Management Improvement Act represented a comprehensive overhaul
of the National Park System concessions program. It repealed
the 1965 Concessions Act (although many contacts are still
operating under the 1965 Act criteria) and affirmed the
commitment to conserving national parks and their use and
enjoyment by the American people. Among the significant changes
made by the 1998 Act was the elimination of the preferential
right of renewal for concession contracts valued at more than
$500,000 annual gross receipts. Thus, nearly all concession
contracts were to be subject to a competitive bid and
solicitation process upon renewal.
While this change has increased competition for concession
contracts which in turn will benefit the National Park System
and its visitors, it has also unexpectedly created more of
burden for the National Park Service (NPS) to prepare
prospectuses under the new law, and has frustrated and
concerned many concessioners, especially small single contract
holders who fear consolidation of contracts may occur.
Meanwhile, many individuals who have not been awarded a
contract under the new regime do not know why their bids were
not accepted. H.R. 5802 attempts to address this shortcoming by
requiring the NPS to explain to a concessioner why its proposal
was not selected if requested within 90 days of the awarding of
a concessions contract. The Committee believes a debriefing is
needed by concessioners who were not awarded contracts to be
able to submit a better proposal on future contracts. Current
regulations regarding this practice are discretionary and do
not establish a serious debriefing method. The result of the
debriefing will be better proposals, and ultimately better
visitor services.
Under the terms of the 1998 Act, smaller concessioners
whose annual gross income from the concession is between
$500,000 and $3 million have found it difficult to compete with
larger, more wealthy companies. At the same time, these smaller
concessionaires have found it difficult to obtain necessary
capital funds to improve their operations because there is no
guarantee that they will have their contracts renewed. These
concessionaires have argued that one of the unintended
consequences of the new law is that eliminating their
preferential right of renewal has disproportionally effected
their operations. The right of renewal represented an earned
opportunity for an incumbent concessioner to match the terms
and conditions of the best competing proposal, but was and is
no guarantee that the incumbent will be awarded a contract.
Thus, the preference creates a critical incentive for a
concessioner to provide quality visitor service, offers a small
concessioner stability and continuity, and facilitates long-
term planning and investment.
Congress decided in 1998 that public and visitor services
would benefit by retaining the earned renewal preference for
``small'' concessions and guides/outfitters. Congress agreed
that continuity, via the renewal preference, helped ensure
quality visitor services. ``Small'' was defined as contracts of
$500,000 or less. H.R. 5802 attempts to address this matter by
increasing the threshold from $500,000 to $750,000 to be
adjusted annually to reflect changes in the Consumer Price
Index. The Committee believes there is public value in acting
to assure that local small businesses with important ties to
NPS units and gateway communities can continue to be part of
the concessions community. Enabling these small, local
businesses to remain part of the mix helps provide quality
visitor services and prevents unhealthy concentration of
concessions contracts in the hands of a few very large
companies.
Another issue addressed by H.R. 5802 is cross-
collateralization (when collateral for one loan is also serves
as collateral for another loan). In the current statute,
leasehold surrender interest (LSI)--the contractual right of
compensation for capital improvements made by concessioners
under a concession contract--may only be pledged as security
for acquiring a new contract pursuant to the Secretary's
approval. Many believe this stymies competition and hinders a
small concessioner when bidding against larger companies who
have more assets and therefore find it easier to accumulate
collateral. LSI, by definition, has no debt, and therefore is
an asset that is free and clear.
Finally, in terms of commercial use authorizations (CUA),
the Committee believes the 1998 Act as well as H.R. 5802
authorizes the NPS to limit the number of CUAs where
appropriate. The Committee expects that such limits, if and
when necessary, not be established arbitrarily or as a simple
matter of discretion. Rather, limitations should be preceded by
studies and other forms of documentation and evidence
demonstrating a bona fide need for such limitation. Reasonable
notice to impacted parties and interests should also precede
establishment of limits. Lastly, the purpose of any such
limitations should be clearly demonstrated to ensure
conservation of park resources.
Committee Action
H.R. 5802 was introduced on July 13, 2006, by Congressman
Stevan Pearce (R-NM). The bill was referred to the Committee on
Resources. Prior to the introduction of H.R. 5802, the
Subcommittee on National Parks conducted oversight hearings on
the issues contained in the bill in April 2005 and in March
2003. On July 19, 2006, the Full Resources Committee met to
consider the bill. Congressman Pearce offered an amendment in
the nature of a substitute to reduce the threshold for the
preferential right of renewal from $1.5 million to $750,000;
strike language associated with leasehold surrender, except
language concerning cross collateralization; and strike the
visitor use capacity study for commercial use authorization
permits while increasing the term of a commercial use
authorization permit to five years. It was adopted by unanimous
consent. The bill as amended was then ordered favorably
reported to the House of Representatives by unanimous consent
by unanimous consent.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Resources' oversight findings and recommendations
are reflected in the body of this report.
Constitutional Authority Statement
Article I, section 8, clause 3 of the Constitution of the
United States grants Congress the authority to enact this bill.
Compliance With House Rule XIII
1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act. As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, credit
authority, or an increase or decrease in revenues or tax
expenditures. According to the Congressional Budget Office,
enactment of this bill could affect offsetting receipts and
associated direct spending, but these effects would be less
than $500,000 and would largely offset each other.
3. General Performance Goals and Objectives. This bill does
not authorize funding and therefore, clause 3(c)(4) of rule
XIII of the Rules of the House of Representatives does not
apply.
4. Congressional Budget Office Cost Estimate. Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:
H.R. 5802--NPS Concessions Reform Act of 2006
H.R. 5802 would amend the National Park Service Concessions
Act of 1998. CBO estimates that implementing H.R. 5802 would
have no significant impact on the federal budget. Enacting the
bill could affect offsetting receipts and associated direct
spending, but we expect that these efforts would be less than
$500,000 and would offset each other each year. Enacting H.R.
5802 would not affect revenues.
The bill 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.
H.R. 5802 would raise the statutory threshold under which
companies are granted a preferential right to renew an expiring
contract to operate concessions at units of the National Park
System (NPS). Under existing law, companies that earn gross
annual revenues of less than $500,000 from concessions
operations have this right, which does not guarantee renewal
but does allow the existing concessionaire to match the terms
of any competing proposal. Under the bill, the preferential
right of renewal would apply to all contracts that have
revenues of less than $750,000.
The proposed change could affect future offsetting receipts
earned from franchise fees or deposits to concession
improvement accounts at national parks by dampening the
incentives of competing companies to offer terms that are more
advantageous to the NPS. However, CBO estimates that any such
effect would be minimal because the total amount of offsetting
receipts earned on the concessions that could be affected by
the bill is small; the NPS presently earns less than $500,000 a
year (out of total receipts of more than $45 million) from
contracts with a gross value between $500,000 and $750,000.
Moreover, because franchise fees and deposits to improvement
accounts are available for expenditure without appropriation
action, any loss of receipts would be offset by a corresponding
reduction in direct spending. CBO estimates that other changes
that would be made to NPS concessions practices by the
legislation would have no budgetary effect.
The CBO staff contact for this estimate is Deborah Reis.
This estimate was approved by Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
Compliance With Public Law 104-4
This bill contains no unfunded mandates.
Preemption of State, Local or Tribal Law
This bill is not intended to preempt any State, local or
tribal law.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
NATIONAL PARK SERVICE CONCESSIONS MANAGEMENT IMPROVEMENT ACT OF 1998
* * * * * * *
TITLE IV--NATIONAL PARK SERVICE CONCESSIONS MANAGEMENT
* * * * * * *
SEC. 403. AWARD OF CONCESSIONS CONTRACTS.
In furtherance of the findings and policy stated in section
402, and except as provided by this title or otherwise
authorized by law, the Secretary shall utilize concessions
contracts to authorize a person, corporation, or other entity
to provide accommodations, facilities, and services to visitors
to units of the National Park System. Such concessions
contracts shall be awarded as follows:
(1) * * *
* * * * * * *
(5) Selection of the best proposal.--(A) * * *
* * * * * * *
(D) Debriefing.--The Secretary shall provide to any
person, corporation, and other entity that submitted a
proposal and who was not awarded a proposed concessions
contract a debriefing as to why they were not selected
as submitting the best proposal for that concessions
contract. Such debriefing must be requested and must be
made within 90 days of the award of the concessions
contract. The Secretary shall not be required to
disclose any proprietary information of the person,
corporation, or other entity that was selected as
submitting the best proposal and awarded the
concessions contract.
* * * * * * *
(8) Outfitter and guide services and small
contracts.--(A) The provisions of paragraph (7) shall
apply only to the following:
(i) * * *
[(ii) Subject to subparagraph (C),
concessions contracts with anticipated annual
gross receipts under $500,000.]
(ii) Subject to subparagraph (C), concessions
contracts with anticipated annual gross
receipts under $750,000, such amount to be
adjusted annually to reflect changes in the
Consumer Price Index as of the date of the
enactment of this clause. An incumbent
concessions contract holder with another
concessions contract with annual gross receipts
of $750,000 or more, not including an
outfitting and guide concession contract, is
not eligible for the right authorized by
paragraph (7).
* * * * * * *
(C) A concessioner that holds a concessions contract
that the Secretary estimates will result in gross
annual receipts of less than [$500,000] $750,000, such
amount to be adjusted annually to reflect changes in
the Consumer Price Index as of the date of the
enactment of the NPS Concessions Reform Act of 2006 if
renewed shall be entitled to a preferential right of
renewal under this title if--
(i) * * *
* * * * * * *
SEC. 405. PROTECTION OF CONCESSIONER INVESTMENT.
(a) Leasehold Surrender Interest Under New Concessions
Contracts.--On or after the date of the enactment of this
title, a concessioner that constructs a capital improvement
upon land owned by the United States within a unit of the
National Park System pursuant to a concessions contract shall
have a leasehold surrender interest in such capital improvement
subject to the following terms and conditions:
(1) * * *
* * * * * * *
(2) A leasehold surrender interest--
(A) may be pledged as security for financing
of a capital improvement or the acquisition of
a concessions contract when approved by the
Secretary pursuant to this title and may be
pledged as security for other National Park
Service contracts using a combination of
leasehold surrender interest if holding one or
more contracts with the National Park Service,
and the proceeds resulting from such pledged
security shall not be restricted for use in the
park or parks for which the leasehold surrender
interest was pledged;
* * * * * * *
SEC. 418. COMMERCIAL USE AUTHORIZATIONS.
(a) * * *
* * * * * * *
(c) Limitations.--Any authorization issued under this section
shall be limited to--
(1) * * *
* * * * * * *
(3) such uses by organized children's camps, outdoor
clubs and nonprofit institutions (including back
country use) and such other uses as the Secretary
determines appropriate.
Nonprofit institutions are not required to obtain commercial
use authorizations unless taxable income is derived by the
institution from the authorized use. Such uses shall be subject
to limitations and fees comparable to those that may be imposed
on other authorization holders for the same or similar
activities.
[(e) Duration.--The term of any authorization issued under
this section shall not exceed 2 years. No preferential right of
renewal or similar provisions for renewal shall be granted by
the Secretary.]
(e) Duration.--The term of any authorization, not subject to
limited numbers pursuant to (b)(2)(D), shall not exceed 5
years. Where it is determined that only limited numbers of
authorizations shall be issued, the term of such authorizations
shall not exceed 5 years. Such authorizations may be issued to
those applicants that have--
(1) demonstrated the capability to provide quality
visitor services; and
(2) experience with the resources and values in the
park unit for which the authorization is issued.
* * * * * * *
(g) Cost Recovery.--The Secretary shall not seek to recover
costs from applicants or authorized holders related to capacity
studies and recreation activities and monitoring not associated
with authorizations.
* * * * * * *