```

[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.

           *       *       *       *       *       *       *

                                  

```