Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations 66755

northeastward along the Territorial Seas

boundary line to latitude 38°01′39′′ N,

longitude 74°57′18′′ W, thence due west

to the mean low water mark at the

Maryland / Virginia border at latitude

38°01′39′′ N, longitude 75°14′30′′ W.

* * * * *

(d) * * *

(15) Port Security Requirements. No

vessel in excess of 300 gross tons,

including tug and barge combinations in

excess of 300 gross tons (combined),

shall enter the Regulated Navigation

Area, move within the Area, or be

present within the Area unless it

complies with the following

requirements.

(i) Obtain authorization to enter the

Regulated Navigation Area from the

Captain of the Port or his representative

at least thirty minutes prior to entering

the Regulated Navigation Area. All

vessels entering or remaining in the

Area may be subject to a Coast Guard

boarding.

(ii) Follow all instructions issued by

the Captain of the Port or his

representative.

(iii) Ensure that no person who is not

a permanent member of the vessel’s

crew, or a member of a Coast Guard

boarding team, boards the vessel

without presenting valid photo

identification.

(iv) Report any departure from or

movement within the Regulated

Navigation Area to the Captain of the

Port or his representative at least 30

minutes prior to getting underway.

(v) Contact the Captain of the Port or

his representative on VHF–FM channel

13 or 16, or by calling (757) 444–5209

or (757) 444–5210.

(vi) In addition to the authorities

listed in this Part, this section is

promulgated under the authority under

33 U.S.C. 1226.

(16) For purposes of the port security

requirements in paragraph (d)(15) of this

section, the Captain of the Port or his

representative means any official

designated by the Captain of the Port

including, but not limited to, any Coast

Guard patrol vessel. All patrol vessels

shall display the Coast Guard Ensign at

all times when underway.

* * * * *

Dated: December 11, 2001.

T.W. Allen,

Vice Admiral, U.S. Coast Guard Commander,

Fifth Coast Guard District.

[FR Doc. 01–31523 Filed 12–26–01; 8:45 am]

BILLING CODE 4910–15–U

DEPARTMENT OF THE INTERIOR

National Park Service

36 CFR Part 18

RIN 1024–AC78

Leasing Regulations

AGENCY: National Park Service, Interior.

ACTION: Final rule.

SUMMARY: This rule amends current

National Park Service (NPS) regulations

(36 CFR part 18) concerning the leasing

of historic properties within areas of the

national park system to encompass

additional types of properties as

authorized by law and to change in

certain respects the procedural

requirements for leasing of properties.

This rule was published for public

comment in the Federal Register on

December 12, 2000 (65 FR 77538).

EFFECTIVE DATE: January 28, 2002.

FOR FURTHER INFORMATION CONTACT:

Cindy Orlando, National Park Service,

1849 C Street, NW., Room 7311,

Washington DC 20240 (202/565–1212).

SUPPLEMENTARY INFORMATION: Section

802 of the National Parks Omnibus

Management Act, Pub. L. 105–391

(Section 802), authorizes NPS to grant

leases for the use of buildings and

associated property located within areas

of the national park system to persons

and governmental entities under certain

conditions. This new leasing authority

supplements existing NPS leasing

authority concerning historic properties

set forth in 16 U.S.C. 470h–3 and

implemented in 36 CFR part 18. This

amendment of 36 CFR part 18 combines

in one regulation the leasing authority

provided by Section 802 with the

leasing authority provided by 16 U.S.C.

470h–3. In general, this rule permits

NPS to lease buildings, lands associated

with such buildings, and, historic land

located within the boundaries of park

areas. It does not permit the leasing of

non-historic land.

This amendment of 36 CFR part 18

achieves simplification of the NPS

historic leasing process as also called for

by Section 802 and expands the scope

of NPS leasing authority to all eligible

properties. NPS also has authority to

lease certain property located within

units of the national park system under

16 U.S.C. 460l–22(a). This authority is

implemented by NPS in 36 CFR part 17

which remains unchanged by the

amended 36 CFR part 18. Eight public

comments were received in response to

the proposed rule. Several changes were

made in response to them. In addition,

the final rule contains a number of

editorial changes and clarifications.

Section Content

The following discussion describes

the general content of each section of

the final regulation. Public comments

on these sections are also addressed as

appropriate.

Section 18.1

Authority and Purposes. Section 18.1

describes the authority for the rule. The

basic authority is 16 U.S.C. 1 et seq.,

(the National Park Service Organic Act),

particularly 16 U.S.C. 1a–2(k) (the

general NPS leasing authority contained

in section 802 of Pub. L. 105–391), and

16 U.S.C. 470h–3 (government-wide

leasing authority applicable to historic

properties). NPS has included a

‘‘grandfather’’ provision in this section

of the final regulation to permit the

execution of proposed leases that were

solicited under 36 CFR part 18 prior to

the effective date of this part. In

response to comments, NPS has

clarified the particular categories of NPS

property to which this part applies. In

addition, NPS notes that although this

part is couched in terms of leasing

particular properties, nothing in this

part precludes NPS from leasing a

number of properties in a combined

solicitation or from engaging

management companies (where

otherwise authorized) to assist in

implementing an appropriate overall

park area leasing program in accordance

with the terms of this part.

Section 18.2

Section 18.2 defines the terms used in

the proposed rule. NPS has clarified the

definition of ‘‘associated property’’ in

the final regulation to make clear that

associated property may relate to one or

more buildings. NPS has also clarified

the definition of ‘‘fair market value’’ by

making clear that the particular terms

and conditions of the lease being offered

are to be taken into account in

determining the fair market value of the

lease. Finally, NPS has clarified the

definitions of property types as used in

the regulation and added a definition of

non-historic property as a clarification.

A comment asked whether a limited

liability company qualifies as a

‘‘person’’ for purposes of this part. It

does. A comment suggested that the

definition historic property be expanded

to include properties determined

historic by state or local governments.

NPS notes that the definition used is

statutory and, in any event, includes

properties of state or local significance

listed in the National Register of

Historic Places.

66756 Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations

Section 18.3

Section 18.3 describes the types of

property that NPS may lease under this

part. In general, this part applies to

leases of both historic and non-historic

property located within the boundaries

of park areas. However, Section 18.3(b)

makes clear that non-historic land, i.e.,

vacant land that is not located within

the boundaries of an historic district,

may not be leased under this part. This

is because of the express limitations on

the types of property that may be leased

under the authorities for this part.

However, certain types of vacant land

located in eligible units of the national

park system may be leased under 36

CFR part 17.

Section 18.4

Section 18.4 describes the types of

determinations NPS must make before it

may lease property under this part.

Before leasing property under this part,

NPS must determine that the lease: (1)

Will not result in degradation of the

purposes and values of the park area; (2)

will not deprive the park area of

property necessary for appropriate park

protection, interpretation, visitor

enjoyment, or administration of the park

area; (3) contains such terms and

conditions as will assure the leased

property will be used for an activity and

in a manner that is consistent with the

purposes established by law for the park

area in which the property is located; (4)

is compatible with the programs of the

National Park Service; (5) is for rent at

least equal to the fair market value rent

of the leased property as described in

Section 18.5; (6) does not authorize

activities that are subject to

authorization through a concession

contract, commercial use authorization

or similar instrument; and (7), if the

lease is to include historic property, that

the lease will adequately insure the

preservation of the historic property.

With respect to the first

determination, NPS considers the term

‘‘degradation’’ of park area purposes and

values (a term which tracks the

provisions of Section 802) to provide

the same protective standard as the

terms ‘‘derogation’’ and ‘‘impairment’’

of park area resources as used in other

NPS authorities.

A comment suggested that

distinctions be made between the types

of determinations necessary for ‘‘big’’

leases and ‘‘small’’ leases. However,

NPS considers that the determinations

required by this section are necessary

for all leases, noting that a ‘‘small’’

lease’’ may have a significant impact on

park area resources.

Section 18.5

Section 18.5 describes the rent NPS

must receive for property leased under

this part. The rent must be at fair market

value, determined after taking into

account any restrictions NPS may place

on the use of the leased property and

any requirements for rehabilitation and

maintenance of the leased property. The

final regulation has been clarified in this

respect. Comments suggested that

consideration of year round occupancy,

educational or governmental purposes

be taken into account when determining

fair market value rent. The regulation,

however, does not preclude

consideration of any relevant factor in

determining fair market value. Another

comment suggested that the regulation

should provide authority for NPS to

waive the fair market value rent

requirement. NPS does not consider that

this is within its leasing authority or

otherwise appropriate. However, in

response to a comment, NPS notes that

cooperative agreements with non-profit

organizations otherwise authorized by

law may provide for assignment of

government property to the cooperator

without requiring the payment of fair

market value rent. Such agreements are

outside the scope of this regulation. A

comment asked for examples as to the

types of restrictions on use of the

property that may reduce its fair market

value. Examples are where NPS may not

permit a property to be used for

industrial purposes or may require that

a property be used for educational

purposes in the circumstances of a

particular park area.

Section 18.6

Section 18.6(a) describes the types of

uses that are permissible for property

leased under this part. In general, leased

property may be used for any lawful

purpose subject to the determinations

called for in Section 18.4. These uses

may include, among others, office or

other commercial uses. Innovative uses

that are consistent with the

requirements of this part are

encouraged. Section 18.6(b) states that a

lease issued under this part may not

authorize the lessee to engage in

activities that are subject to

authorization through a concession

contract, commercial use authorization

or similar instrument. Proposed lease

activities are subject to authorization

under a concession contract if the

Director determines in accordance with

36 CFR part 51 and park area planning

documents and related guidelines and

policies that the proposed activities

meet applicable requirements for

issuance of a concession contract.

Proposed activities are subject to

authorization under a commercial use

authorization if the Director determines

in accordance with park area planning

documents and related guidelines and

policies that the proposed activities

meet applicable requirements for

issuance of a commercial use

authorization.

Section 18.7

Section 18.7 describes the procedures

for leasing property through a public bid

process. The bid process may only be

used if the amount of rent is the sole

criterion for award of a lease. The bid

process calls for public notice of the

lease opportunity, submission of offers

on a date certain, and a public bid

opening and selection by NPS. One

comment suggested that award of leases

under a bid system should be

eliminated and another suggested an

informal process that does not require

publication or the submission of bids.

NPS considers that the public bidding

procedures of this section are

appropriate. Another comment

suggested that the bid system should not

be used to lease historic property. NPS

considers that the bid process will not

be not frequently utilized. However, it

wishes to retain the flexibility to do so

in appropriate circumstances. For

example, short-term leases of historic

farmland for agricultural purposes may

most efficiently be awarded through the

bid process. Another comment in effect

asked for further guidance on how

general federal historic preservation

requirements and procedures (e.g., 36

CFR part 800) apply to the leasing of

historic property under this part. This is

a subject that is beyond the scope of

these regulations. However, 36 CFR part

800 discusses these matters in detail.

NPS, in response to a comment, has

added a financial capability

determination as a request for bids

requirement.

Section 18.8

Section 18.8 describes the procedures

for leasing property through a proposal

solicitation process. In general, the

proposal solicitation process calls for

public issuance of a Request for

Proposals (‘‘RFP’’) that describes the

leasing opportunity and the criteria for

selection. After submission of proposals,

NPS will select the best proposal upon

application of established selection

criteria. These include the compatibility

of the proposal to the park area and its

visitors, the experience and financial

capability of the offeror, and the ability

and commitment of the offeror to

conduct its activities in an

environmentally enhancing manner.

Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations 66757

One comment suggested that the

publication period for the solicitation

should be reduced to thirty days.

However, the regulation permits the

sixty-day publication period to be

shortened in appropriate circumstances.

Another comment suggested that the

rent offered be a separate selection

factor. NPS does not consider this to be

appropriate and that it would difficult

to administer. A comment suggested

that the ‘‘tie-breaker’’ standard

contained in Section 18.8(f) be

eliminated. NPS has changed the ‘‘tiebreaker’’ standard to a more general

determination as to which proposal is

the most beneficial on an overall basis.

A comment also suggested that the

regulations include a ‘‘best and final

offer’’ provision. NPS, however,

considers that the process described for

proposal amendment is efficient and

provides to the extent appropriate an

equivalent of a ‘‘best and final offer’’

procedure in the event that two or more

proposals are considered as

substantially equal. A comment

suggested that the ‘‘specified’’ period of

time for negotiation of a final lease be

changed so as to allow an unlimited

period for negotiation, subject to

termination by NPS. NPS considers that

requiring a specified negotiation period

(which is subject to extension by NPS)

is a more effective means to conclude

the negotiation in a timely manner.

Another comment suggested that the

regulation reference the ability of NPS

to enter into exclusive negotiating

agreements with the successful offeror.

NPS has included reference to such

agreements in Section 18.8(d) in the

form of a letter of intent to negotiate.

Section 18.9

Section 18.9 permits NPS to lease

property to non-profit organizations and

governmental units without competitive

procedures if NPS determines that the

non-profit or governmental use of the

property will contribute to the purposes

and programs of the park area. This is

a clarification of the proposed

regulation that stated that such leases

could be entered into when it is in the

public interest to do so. NPS considers

this authority necessary for appropriate

implementation and integration of park

area management and leasing program

objectives.

A comment suggested that the

authority for non-competitive award of

leases should only apply when no

proposals were received in response to

a competitive solicitation. NPS

considers this limitation too restrictive

in light of NPS program needs and

objectives. Another comment suggested

that there should be authority to award

leases non-competitively with private

property owners. NPS, however, does

not consider this to be consistent with

its general policy of competitive leasing

procedures. A comment misunderstood

this section as permitting receipt of less

than fair market value rent and

suggested that ‘‘small’’ leases should be

awarded through informal processes.

Fair market value rent is required under

this section. NPS considers that the

formal leasing processes required by

this part are necessary for effective

implementation of NPS authorities.

Section 18.10

Section 18.10 describes the term of

leases to be granted under the authority

of this part. The term is to be no more

than 60 years. Several comments

suggested a longer-term limitation or no

limitation at all. However, it has been

the experience of NPS that a lease term

of sixty years (or less) is sufficient for

investment purposes (the maximum

sixty year term permits two thirty year

mortgage periods) and that a transaction

that is seen to need a longer term to be

successful is not likely to viable in the

first instance. NPS notes the provisions

of Title IV of the National Parks

Omnibus Management Act of 1998 that

limits the term of concession contracts

to twenty years (reduced from thirty

years under prior legislation) and which

states that concession contracts should

be for the shortest possible term. NPS

considers that this statement of

Congressional policy is equally

applicable to leases. Another comment

suggested specific terms for leases for

historic property. NPS does not consider

the inclusion of specific terms to be

appropriate as the property’s historic

character will be taken into account

when determining the lease term. Other

comments suggested that NPS should

have the authority to extend leases.

However, NPS in general considers

extensions to be anti-competitive and

that they may result in leases that

extend beyond any reasonable period of

time to the detriment of the government.

NPS, however, has added language to

the final regulation that permits leases

to be extended for up to one year if

required by circumstances beyond the

control of NPS. This is consistent with

similar provisions contained in the

concession contracting provisions of

Title IV of the National Parks Omnibus

Management Act of 1998 that permit

short term extensions of concession

contracts in limited circumstances.

Section 18.11

Section 18.11 describes the general

terms and conditions that a lease

granted under authority of this part

must contain. These include provisions

that assure use of the property in a

manner consistent with the purposes of

the applicable park area, and, if

applicable, the preservation of historic

property that may be leased.

Section 18.12

Section 18.12 describes a number of

specific terms and conditions that a

lease granted under the authority of this

part must contain. These include a

termination for cause provision, a clause

requiring the lessee to maintain the

leased property, provisions regarding

the use of the leased property, and,

provisions that state that any

improvements a lessee may make may

only be undertaken with the approval of

NPS. 18.12(c). A comment suggested

that Section 18.12(c) should be

amended to delete the mandatory

reference to subleases with respect to

financial capability determinations. NPS

does not agree with this suggestion as

sublessees are, as a practical matter, the

lessee of a specified portion of the

leased property and therefore should be

financially capable to carry out

applicable terms of the lease.

18.12(d). NPS deleted reference to the

disposition of insurance proceeds in

this section. The terms of specific leases

will address this subject. It also deleted

specific reference to replacement cost

insurance in response to a comment.

18.12(g). A comment suggested that

fees NPS may collect from lessees for

services provided by NPS be referenced

in this section. NPS, however, does not

consider that reference to such fees is

appropriate as such fees, if any, are

variable and implemented on a park by

basis. Another comment suggested that

Section 18.12(g) be amended to delete

the reference to lease termination with

respect to compensation for

improvements. NPS deleted this

provision in its entirety from the

regulation as unnecessary in light of

general legal limitations on the

authority of NPS to contractually

obligate the expenditure of

unappropriated funds.

18.12(h). The provisions regarding

lease extensions and renewal rights

have been deleted from this subsection

as redundant. A comment suggested that

the reference in this subsection to the

sovereign authority of the government to

cancel leases may preclude a lender

from obtaining a reinstated lease in the

event of foreclosure and thus make the

lease unfinancable. However, this

subsection does not preclude this right

in the event of lease foreclosure.

18.12(i). A comment suggested that

leases should permit new construction

in park areas. NPS considers that the

66758 Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations

terms of this subsection, which do

permit new construction in park areas

in limited circumstances, are necessary

in order to avoid impairment of park

area resources and values.

18.2(m). A comment suggested

modifying the term ‘‘obligations’’ in this

subsection by the term ‘‘monetary.’’

However, this ‘‘subject to availability of

appropriated funds’’ clause is a standard

provision contained in government

contracts.

Section 18.13

Section 18.13 describes the

information collection requirements of

the rule. A comment suggested that 40

hours for preparing a large lease

proposals seems low. NPS notes that the

time estimates are averages only.

Drafting Information

The primary authors of this rule are

the members of a task force comprised

of NPS officials involved in the leasing

of national park system properties.

Compliance With Laws, Executive

Orders and Departmental Policy

Regulatory Planning and Review (E.O.

12866)

This rule is a significant rule within

the meaning of Executive Order 12866

because of novel policy issues.

a. This rule will not have an annual

economic effect of $100 million or more

or adversely affect an economic sector,

productivity, jobs, the environment or

other units of government. The rule

imposes no obligations on any entity

except for persons that may seek to be

awarded an NPS lease. It does not apply

to existing NPS leases.

b. This rule will not create

inconsistencies with other agencies’

actions as it only applies to the National

Park Service.

c. This rule will not materially affect

entitlements, grants, user fees, loan

programs, or the rights and obligations

of their recipients. The rule only

prescribes policies and procedures for

leasing lands of the national park

system.

d. This rule raises novel policy issues

as it prescribes new policies and

procedures for leasing lands of the

national park system in accordance with

the requirements of Section 802 of

Public Law 105–319 and 16 U.S.C.

470h–3.

Regulatory Flexibility Act

This rule is not subject to the

Regulatory Flexibility Act as it is not

required to be published for comment

before adoption by 5 U.S.C. 553 or other

law. NPS solicited public comment on

this proposed rule as a matter of policy.

The Department of the Interior also

considers that the final rule will not

have a significant effect on a substantial

number of small entities as defined

under the Regulatory Flexibility Act (5

U.S.C 601 et seq.). NPS anticipates that

less than one hundred leases a year will

be awarded under this authority. In

addition, the rule is only applicable to

prospective lessees. It has no effect on

existing NPS leases.

Small Business Regulatory Enforcement

Fairness Act

This rule is not a major rule under 5

U.S.C. 804(2), the Small Business

Regulatory Fairness Enforcement Act.

This rule does not have an annual effect

on the economy of $100 million or

more; will not cause a major increase in

costs or prices for consumers,

individual entities, Federal, State, or

local government agencies, or

geographic regions; and does not have

significant adverse effects on

competition, employment, investment,

productivity, innovation, or the ability

of U.S.-based enterprises to compete

with foreign-based enterprises. The

primary effect of the proposed rule is to

establish policies and procedures for the

granting of leases of certain property

located within areas of the national park

system. Potential lessees will only

submit lease proposals if the effects are

positive.

Takings (E.O. 12630)

In accordance with Executive Order

12630, this rule does not have

significant takings implications as this

rule does not apply to private property.

A takings assessment is not required.

Federalism (E.O. 13132)

In accordance with Executive Order

13132, this rule does not have sufficient

federalism implications to warrant the

preparation of a federalism assessment.

The rule imposes no requirements on

any governmental entity other than

NPS.

Civil Justice Reform (E.O. 12988)

In accordance with Executive Order

12988, the Office of the Solicitor has

determined that this rule does not

unduly burden the judicial system and

does not meet the requirements of

sections 3(a) and 3(b)(2) of the Order.

Paperwork Reduction Act

This rule (NPS Leasing Regulations—

36 CFR part 18) requires an information

collection from ten or more parties so a

submission under the Paperwork

Reduction Act was required. OMB has

approved the information collection

requirements of this part. OMB Control

No. 1024–0223, expiration date 01/31/

2004. The information collection

requirements of this rule are for the

purpose of awarding and administering

NPS leases. A federal agency may not

conduct or sponsor, and a person is not

required to respond to, a collection of

information unless it displays a

currently valid OMB control number.

Six categories of information

collection are contained in the rule:

Section 18.7 (Request for Bids); Section

18.8 (Requests for Qualifications/

Proposals); Section 18.12(c) (Subletting

and Assignment of Leases); Section

18.12(i)–(j) (Approval of Lessee

Construction/Demolition); Section

18.12(l) (Approval of Lessee

Encumbrances); and Section 18.12(k)

(Amendment of Leases). NPS will use

the information collected to make

administrative decisions with respect to

these six categories. The respondents to

these collections will be NPS lessees

and prospective NPS lessees. NPS

anticipates that there will be a total of

approximately six hundred respondents

per year with respect to Sections 18.7

and 18.8 and a total of approximately

twenty-seven respondents per year with

respect to the other information

collection categories. NPS estimates that

the total annual reporting and

recordkeeping burden that will result

from these collections of information

will be 4392 hours, as set forth in the

following chart.

Section Number of responses

Hours per response Total hours

Section 18.7 ................................................................................................................................. 200 1 200

Section 18.8—Complex ............................................................................................................... 20 40 800

Section 18.8—Simple .................................................................................................................. 380 8 3040

Section 18.12(c)—Complex ......................................................................................................... 1 40 40

Section 18.12(c)—Simple ............................................................................................................ 4 8 32

Section 18.12(i)–(j)—Complex ..................................................................................................... 2 32 64

Section 18.12(i)–(j)—Simple ........................................................................................................ 8 8 64

Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations 66759

Section Number of responses

Hours per response Total hours

Section 18.12(k) ........................................................................................................................... 2 4 8

Section 18.12(l)—Complex .......................................................................................................... 2 40 80

Section 18.12(l)—Simple ............................................................................................................. 8 8 64

Total ...................................................................................................................................... 627 7.0 4392

*(average)

Please send comments regarding this

burden or estimate or any other aspect

of this collection of information,

including suggestions for reducing the

burden, to the Desk Officer for the

Interior Department, Office of

Information and Regulatory Affairs,

Office of Management and Budget,

Washington, DC 20503 (with a copy to

the Information Collection Officer,

National Park Service, 1849 C Street,

Washington, DC 20240. information

technology).

National Environmental Policy Act

This rule does not constitute a major

federal action affecting the quality of the

human environment. A detailed

statement under the National

Environment Policy Act is not required.

The rule will not increase public use of

park areas, introduce noncompatible

uses into park areas, conflict with

adjacent land ownerships or land uses,

or cause a nuisance to property owners

or occupants adjacent to park areas.

Accordingly, this rule is categorically

excluded from procedural requirements

of the National Environmental Policy

Act by 516 DM 6, App. 7.4A(10).

Clarity of this Rule

Executive Order 12866 requires

federal agencies to write regulations that

are easy to understand. Comment is

invited on how to make this rule easier

to understand, including answers to the

following questions: (1) Are the

requirements in the rule clearly stated?;

(2) Does the rule contain undefined

technical language or jargon that

interferes with its clarity?; (3) Does the

format of the rule (groupings and order

of sections, use of headings,

paragraphing, etc.) aid in or reduce its

clarity?; (4) Would the rule be easier to

understand if it were divided into more

but shorter sections?; (5) Is the

description of the rule in the

SUPPLEMENTARY INFORMATION section of

the preamble helpful in understanding

the proposed rule?; (6) What else could

be done to make the rule easier to

understand? Please send a copy of any

comments that concern how this rule

could be made easier to understand to:

Office of Regulatory Affairs, Department

of the Interior, Room 7229, 1849 C

Street NW, Washington, DC 20240.

List of Subjects in 36 CFR Part 18

Historic preservation, National parks.

In consideration of the foregoing, 36

CFR part 18 is revised to read as

follows:

PART 18—LEASING OF PROPERTIES

IN PARK AREAS

Sec.

18.1 What is the authority and purpose for

this part?

18.2 What definitions do you need to know

to understand this part?

18.3 What property may be leased?

18.4 What determinations must the Director

make before leasing property?

18.5 May property be leased without

receiving fair market value rent?

18.6 Are there limitations on the use of

property leased under this part?

18.7 How are lease proposals solicited and

selected if the Director issues a Request

for Bids?

18.8 How are lease proposals solicited and

selected if the Director issues a Request

for Proposals?

18.9 When may the Director lease property

without issuing a request for bids or a

request for proposals?

18.10 How long can the term of a lease be?

18.11 What general provisions must a lease

contain?

18.12 What specific provisions must a lease

contain?

Authority: 16 U.S.C. 1 et seq., particularly

16 U.S.C. 1a–2(k), and, 16 U.S.C. 470h–3.

§ 18.1 What is the authority and purpose

for this part?

16 U.S.C. 1 et seq., particularly 16

U.S.C. 1a–2(k), and, 16 U.S.C. 470h–3

are the authorities for this part. These

authorities allow the Director (or

delegated officials) to lease certain

federally owned or administered

property located within the boundaries

of park areas. All leases to be entered

into by the Director under these

authorities are subject to the

requirements of this part, except that,

proposed leases that were solicited

pursuant to this part prior to January 28,

2002, may be executed in accordance

with the terms of the solicitation.

§ 18.2 What definitions do you need to

know to understand this part?

In addition to the definitions

contained in 36 CFR Part 1, the

following definitions apply to this part:

(a) Associated property means land

and/or structures (e.g., parking lots,

retaining walls, walkways,

infrastructure facilities, farm fields)

related to a building or buildings and

their functional use and occupancy.

(b) Building means an enclosed

structure located within the boundaries

of a park area and constructed with

walls and a roof to serve a residential,

industrial, commercial, agricultural or

other human use.

(c) Commercial use authorization

means a written authorization to

provide services to park area visitors

issued by the Director pursuant to

Section 418 of Public Law 105–391 and

implementing regulations.

(d) Concession contract has the

meaning stated in 36 CFR part 51.

(e) Fair market value rent means the

most probable rent, as of a specific date,

in cash or in terms equivalent to cash,

for which the property to be leased,

under the terms and conditions of the

lease, should rent for its highest and

best permitted use after reasonable

exposure in a competitive market under

all conditions requisite to a fair leasing

opportunity, with the lessor and the

lessee each acting prudently,

knowledgeably, and for self-interest,

and assuming that neither is under

undue duress. Determinations of fair

market value rent under this part are to

be made taking into account the

considerations stated in § 18.5.

(f) Historic building means a building

or buildings located within the

boundaries of a park area if the building

is part of a pre-historic or historic

district or site included on, or eligible

for inclusion on, the National Register of

Historic Places.

(g) Historic land means land located

within the boundaries of an historic

property.

(h) Historic property means

building(s) and land located within the

boundaries of a park area if the

building(s) and land are part of a prehistoric or historic district or site

66760 Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations

included on, or eligible for inclusion on,

the National Register of Historic Places.

(i) Land means unimproved real

property.

(j) Lease means a written contract

entered into under the authority of this

part through which use and possession

of property is granted to a person for a

specified period of time.

(k) Non-historic building is a building

(or buildings) and its associated

property located within the boundaries

of a park area but not part of a prehistoric or historic district or site

included on, or eligible for inclusion on,

the National Register of Historic Places.

(l) Non-historic land means land

located within the boundaries of a park

area that is not associated property and

is not part of a pre-historic or historic

district or site included on, or eligible

for inclusion on, the National Register of

Historic Places.

(m) Non-historic property means

building(s) and/or land that are located

within the boundaries of a park area but

are not part of a pre-historic or historic

district or site included on, or eligible

for inclusion on, the National Register of

Historic Places.

(n) Park area means a unit of the

national park system.

(o) Property means both historic and

non-historic property that is located

within the boundaries of a park area and

is federally owned or administered.

(p) Request for bids refers to the lease

bid process described in § 18.7.

(q) Request for proposals refers to the

lease proposal process described in

§ 18.8.

(r) Responsive bid or proposal means

a timely submitted bid or proposal that

meets the material requirements of a

request for bids or a request for

proposals.

§ 18.3 What property may be leased?

(a) In general. The Director may lease

any property (except non-historic land)

under this part if the Director makes the

determinations required by § 18.4.

(b) Non-historic land. Non-historic

land may not be leased under this part.

Certain non-historic land is eligible for

leasing under 36 CFR part 17.

§ 18.4 What determinations must the

Director make before leasing property?

Before leasing property in a park area

under this part, the Director must

determine that:

(a) The lease will not result in

degradation of the purposes and values

of the park area;

(b) The lease will not deprive the park

area of property necessary for

appropriate park protection,

interpretation, visitor enjoyment, or

administration of the park area;

(c) The lease contains such terms and

conditions as will assure the leased

property will be used for activity and in

a manner that are consistent with the

purposes established by law for the park

area in which the property is located;

(d) The lease is compatible with the

programs of the National Park Service;

(e) The lease is for rent at least equal

to the fair market value rent of the

leased property as described in § 18.5;

(f) The proposed activities under the

lease are not subject to authorization

through a concession contract,

commercial use authorization or similar

instrument; and

(g) If the lease is to include historic

property, the lease will adequately

insure the preservation of the historic

property.

§ 18.5 May property be leased without

receiving fair market value rent?

Property may be leased under this

part only if the lease requires payment

of rent to the government equal to or

higher than the property’s fair market

value rent. The determination of fair

market value rent shall take into

account:

(a) Any restrictions on the use of the

property or terms of the lease that limit

the value and/or the highest and best

use of the property; and

(b) Any requirements under the lease

for the lessee to restore, rehabilitate or

otherwise improve the leased property.

§ 18.6 Are there limitations on the use of

property leased under this part?

(a) A lease issued under this part may

authorize the use of the leased property

for any lawful purpose, subject to the

determinations required by § 18.4 and

the limitations on activities set forth in

paragraph (b) of this section.

(b) Unless otherwise authorized by

law, a lease issued under this part may

not authorize the lessee to engage in

activities that are subject to

authorization through a concession

contract, commercial use authorization

or similar instrument. Proposed lease

activities are subject to authorization

under a concession contract if the

Director determines in accordance with

36 CFR part 51 and park area planning

documents and related guidelines and

policies that the proposed activities

meet applicable requirements for

issuance of a concession contract.

Proposed activities are subject to

authorization under a commercial use

authorization if the Director determines

in accordance with park area planning

documents and related guidelines and

policies that the proposed activities

meet applicable requirements for

issuance of a commercial use

authorization.

§ 18.7 How are lease proposals solicited

and selected if the Director issues a

Request for Bids?

(a) If the amount of the rent is the only

criterion for award of a lease, the

Director may solicit bids through

issuance of a request for bids as

described in this section. If historic

property is to be leased under the

authority of this section, the Director

must comply with 36 CFR part 800

(commenting procedures of the

Advisory Council on Historic

Preservation) at an appropriate time

during the leasing process.

(b) A request for bids under this

section shall be advertised by public

notice published at least twice in local

and/or national newspapers of general

circulation. The notice shall provide at

least a thirty (30) day period from the

last date of publication for the

submission of sealed bids. The notice

will provide necessary information to

prospective bidders. It may specify a

minimum rent and/or require

submission of a rent deposit or advance

rent payment. Bids will be considered

only if timely received at the place

designated in the request. Bids must be

in the form specified by the Director, or,

if no form is specified, a bid must be in

writing, signed by the bidder or

authorized representative, state the

amount of the bid, and refer to the

applicable public notice. If the notice

requires submission of a rent deposit or

advance rent payment, the bids must

include the required funds in the form

of a certified check, post office money

order, bank drafts, or cashier’s checks

made out to the United States of

America. The bid (and payment where

applicable) must be enclosed in a sealed

envelope upon which the bidder shall

write: ‘‘Bid on lease of property of the

National Park Service’’ and shall note

the date the bids are to be opened.

(c) Bids will be opened publicly by

the Director at a time and place

specified in the public notice. Bidders

or their representatives may attend the

bid opening. The bidder submitting a

responsive bid offering the highest rent

will be selected for award of the lease

(subject to a determination of financial

capability by the Director). A responsive

bid is a bid that meets the material

terms and conditions of the request for

bids. The Director shall accept no bid in

an amount less than the fair market

rental value as determined by the

Director. If two or more bids are equal,

a drawing shall make the lease award by

lot limited to the equal responsive bids

received.

(d) When a property is to be leased

through a request for bids, the bidder

that is declared by the Director to be the

Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations 66761

high bidder shall be bound by his bid

and this part to execute the offered

lease, unless the bid is rejected. If the

declared high bidder fails to enter into

the lease for any reason, the Director

may choose to enter into the lease with

the next highest bidder (if that bidder

offered to pay at least the fair market

rent value). The Director may reject any

and all bids in his discretion and

resolicit or cancel a lease solicitation

under this part at any time without

liability to any person.

§ 18.8 How are lease proposals solicited

and selected if the Director issues a

Request for Proposals?

(a) When the award of a lease is to be

based on selection criteria in addition to

or other than the amount of the rent, the

Director must, subject to § 18.9, solicit

proposals for the lease through issuance

of a public Request for Proposals (RFP).

(b) An RFP may be preceded by

issuance of a public Request for

Qualifications (RFQ). The purpose of an

RFQ is to select a ‘‘short list’’ of

potential offerors that meet minimum

management, financial and other

qualifications necessary for submission

of a proposal in response to an RFP. If

the Director issues an RFQ, only persons

determined as qualified by the Director

under the terms of the RFQ shall be

eligible to submit a proposal under the

related RFP.

(c) The Director must provide public

notice of the leasing opportunity by

publication at least twice in local and/

or national newspapers of general

circulation and/or through publication

in the Commerce Business Daily. The

public notice shall contain general

information about the leasing

opportunity and advise interested

persons how to obtain a copy of the RFP

(or RFQ where applicable). The RFP

(and RFQ where applicable) shall

contain appropriate information about

the property proposed for lease,

including limitations on the uses of the

property to be leased, information

concerning the leasing process,

information and materials that must be

contained in a proposal, the time and

place for submission of proposals, terms

and conditions of the lease, and the

criteria under which the Director will

evaluate proposals. The RFP may state

the fair market value rent as the

minimum acceptable rent if determined

by the Director at that time. The RFP

(and RFQ where applicable) must allow

at least sixty (60) days for submission of

proposals (or qualifications under an

RFQ) unless a shorter period of time is

determined to be sufficient in the

circumstances of a particular

solicitation.

(d) The Director may determine that a

proposal is non-responsive and not

consider it further. A non-responsive

proposal is a proposal that was not

timely submitted or fails to meet the

material terms and conditions of the

RFP. After the submission of offers and

prior to the selection of the best overall

proposal, the Director may request from

any offeror additional information or

written clarification of a proposal,

provided that proposals may not be

amended after the submission date

unless all offerors that submitted

responsive proposals are given an

opportunity to amend their proposals.

The Director may choose to reject all

proposals received at any time and

resolicit or cancel a solicitation under

this part without liability to any person.

(e) (1) The criteria to be used in

selection of the best proposal are:

(i) The compatibility of the proposal’s

intended use of the leased property with

respect to preservation, protection, and

visitor enjoyment of the park;

(ii) The financial capability of the

offeror to carry out the terms of the

lease;

(iii) The experience of the offeror

demonstrating the managerial capability

to carry out the terms of the lease;

(iv) The ability and commitment of

the offeror to conduct its activities in

the park area in an environmentally

enhancing manner through, among

other programs and actions, energy

conservation, waste reduction, and

recycling; and

(v) Any other criteria the RFP may

specify.

(2) If the property to be leased is an

historic property, the compatibility of

the proposal with the historic qualities

of the property shall be an additional

selection criterion. If the RFP requires

proposals to include the amount of rent

offered, the amount of rent offered also

shall be an additional selection

criterion.

(f) The Director will evaluate all

responsive proposals received. The

responsive proposal determined by the

Director to best meet on an overall basis

the evaluation criteria will be selected

for negotiation of the lease. If two or

more responsive proposals are

determined by the Director to be

substantially equal under the evaluation

criteria, the Director shall provide an

opportunity for those proposals to be

amended by their offerors as necessary

for the Director to select the best

amended proposal. In such

circumstances, the Director will provide

each offeror that submitted a

substantially equal proposal appropriate

information as to how their proposals

may be amended in order to enhance

the possibility of selection as the best

amended proposal. If two or more

proposals remain as substantially equal

after amendment, the Director will

select for negotiation of the lease from

among these proposals the proposal that

the Director determines on an overall

basis will be most beneficial to effective

management of the park area.

(g) The Director will provide the

offeror that submitted the best overall

responsive proposal as determined by

the Director a specified period of time

to negotiate the final terms of the lease

(and may enter into a letter of intent to

negotiate in this connection). The final

terms of the lease must be consistent

with the requirements of the RFP. If the

negotiations do not result in an

executed lease within the specified time

period, the Director, in his discretion,

may extend the negotiation period,

terminate negotiations and negotiate

with the offeror that submitted the next

best responsive proposal, or, cancel the

solicitation.

(h) RFPs may state that the amount of

rent to be paid will be negotiated

subsequently with the offeror that

submitted the best proposal, initially or

as amended. The Director may execute

a lease only if the Director determines

that it requires the lessee to pay at least

the fair market value rent of the leased

property.

(i) The Director may execute a lease

that includes historic property only after

complying with 36 CFR part 800

(commenting procedures of the

Advisory Council on Historic

Preservation).

§ 18.9 When may the Director lease

property without issuing a request for bids

or a request for proposals?

The Director, except as provided in

this section, may not lease property

without issuing a request for bids or a

request for proposals in compliance

with § 18.7 or § 18.8. The Director under

this part may enter into leases with nonprofit organizations (recognized as such

by the Internal Revenue Service) or

units of government without complying

with § § 18.7 or 18.8 if the Director

determines that the non-profit or

governmental use of the property will

contribute to the purposes and programs

of the park area. All other requirements

of this part are applicable to leases

entered into or to be entered into under

authority of this section. The Director

may enter into leases under this part

with a term of sixty (60) days or less

without complying with § § 18.7 or 18.8

if the Director determines that to do so

is in the best interests of the

administration of the park area. If

historic land is to be leased under the

66762 Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations

authority of this section, the Director

must comply with 36 CFR part 800

(commenting procedures of the

Advisory Council on Historic

Preservation) before entering into the

lease.

§ 18.10 How long can the term of a lease

be?

All leases entered into under this part

shall have as short a term as possible,

taking into account the financial

obligations of the lessee and other

factors related to determining an

appropriate lease term. No lease shall

have a term of more than 60 years.

Leases entered under the authority of

this part may not be extended, except

that, leases with an initial term of one

(1) year or more may be extended once

for a period not to exceed one (1)

additional year if the Director

determines that an extension is

necessary because of circumstances

beyond the Director’s control.

§ 18.11 What general provisions must a

lease contain?

All leases entered into under this part

must contain terms and conditions that

are determined necessary by the

Director to assure use of the leased

property in a manner consistent with

the purposes of the applicable park area

as established by law, and where

applicable, to assure the preservation of

historic property.

§ 18.12 What specific provisions must a

lease contain?

All leases entered into under this part

must contain:

(a) A termination for cause or default

provision;

(b) Appropriate provisions requiring

the lessee to maintain the leased

property in good condition throughout

the term of the lease;

(c) Appropriate provisions stating that

subletting of a portion of the leased

property and assignment of a lease, if

permissible under the terms of the lease,

must be subject to the Director’s written

approval. Such subleases and

assignments shall be approved only of

the Director determines, among other

relevant matters, that the proposed sublessee or assignee is financially and

managerially capable of carrying out the

terms of the lease. Assignment of a lease

for the purpose of effectuating an

encumbrance to the lease or the leased

property is subject to approval pursuant

to the requirements of paragraph (l) of

this section;

(d) Appropriate provisions requiring

the lessee to secure and maintain from

responsible companies liability

insurance sufficient to cover losses

connected with or occasioned by the use

and activities authorized by the lease.

Types and amounts of insurance

coverage will be specified in writing

and periodically reviewed by the

Director;

(e) Appropriate provisions, unless the

Director determines otherwise in the

circumstances of a particular lease,

requiring the lessee to obtain from

responsible companies casualty

insurance (including flood insurance if

applicable) in an amount sufficient to

protect the interests of the lessee and

the government. In the event of casualty,

the lessee shall be required to repair or

replace damaged or destroyed property

unless otherwise determined by the

Director;

(f) Appropriate provisions requiring

the lessee to save, hold harmless, and

indemnify the United States of America

and its agents and employees for all

losses, damages, or judgments and

expenses resulting from personal injury,

death or property damage of any nature

arising out of the lessee’s activities

under the lease, and/or the activities of

the lessee’s employees, subcontractors,

sub-lessees, or agents. No lease entered

into this part may contain provisions

intended to provide indemnification or

other assurances to the lessee regarding

the conduct or activities of the Director

concerning the lease or the

administration of the applicable park

area. Leases may contain appropriate

provisions that commit the Director to

accept responsibility for tortious actions

of government officials to the extent

authorized by the Federal Torts Claim

Act or as otherwise expressly authorized

by law;

(g) Appropriate provisions requiring

the lessee to pay for use of all utilities

used by the lessee and to pay all taxes

and assessments imposed by federal,

state, or local agencies applicable to the

leased property or to lessee activities;

(h) Appropriate provisions stating that

the lessee has no rights of renewal of the

lease or to the award of a new lease

upon lease termination or expiration

and that the lease is subject to

cancellation by the Director in the

exercise of the sovereign authority of the

United States to the extent provided by

applicable law;

(i) Appropriate provisions stating that

the lessee may not construct new

buildings or structures on leased

property, provided that, a lease may

contain appropriate provisions that

authorize the lessee to construct, subject

to the prior written approval of the

Director, minor additions, buildings

and/or structures determined by the

Director to be necessary for support of

the authorized activities of the lessee

and otherwise to be consistent with the

protection and purposes of the park

area. Approval by the Director of new

construction may only be granted if the

Director makes the determinations

required by § 18.4;

(j) Appropriate provisions requiring

that:

(1) Any improvements to or

demolition of leased property to be

made by the lessee may be undertaken

only with written approval from the

Director;

(2) That any improvements to or

demolition of historic property may

only be approved if the Director

determines that the improvements or

demolition complies with the Secretary

of the Interior’s Standards for the

Treatment of Historic Properties (36

CFR part 68); and

(3) Any improvements made by a

lessee shall be the property of the

United States;

(k) Appropriate provisions that

describe and limit the type of activities

that may be conducted by the lessee on

the leased property. The types of

activities described in a lease may be

modified from time to time with the

approval of the Director through an

amendment to the lease. The Director

may approve modified activities only if

the determinations required by § 18.4

remain valid under the proposed

modified activities and the proposed

activities are otherwise determined

appropriate by the Director;

(l) Appropriate provisions, unless the

Director determines not to permit

pledges or encumbrances in the

circumstances of a particular lease,

authorizing the lessee to pledge or

encumber the lease as security,

provided that any pledge or

encumbrance of the lease and the

proposed holder of the pledge or

encumbrance must be approved in

writing in advance by the Director and

that a pledge or encumbrance may only

grant the holder the right, in the event

of a foreclosure, to assume the

responsibilities of the lessee under the

lease or to select a new lessee subject to

the approval of the Director. Pledges or

encumbrances may not grant the holder

the right to alter or amend in any

manner the terms of the lease;

(m) Appropriate provisions stating

that fulfillment of any obligations of the

government under the lease is subject to

the availability of appropriated funds.

No lease issued under authority of this

part shall entitle the lessee to claim

benefits under the Uniform Relocation

Assistance Act of 1970 (Public Law 91–

646) and all leases entered into under

the authority of this part shall require

the lessee to waive any such benefits;

and

Federal Register / Vol. 66, No. 248 / Thursday, December 27, 2001 / Rules and Regulations 66763

(n) Appropriate provisions granting

the Director and the Comptroller

General access to the records of the

lessee as necessary for lease

administration purposes and/or as

provided by applicable law.

Dated: July 19, 2001.

Joseph E. Doddridge,

Acting Assistant Secretary for, Fish and

Wildlife and Parks.

[FR Doc. 01–31201 Filed 12–26–01; 8:45 am]

BILLING CODE 4310–70–P

DEPARTMENT OF VETERANS

AFFAIRS

38 CFR Chapter 1, Part 3

RIN 2900–AK65

Filipino Veterans’ Benefits

Improvements

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

SUMMARY: This document amends

Department of Veterans Affairs (VA)

adjudication regulations to reflect

changes made by the Departments of

Veterans Affairs and Housing and Urban

Development, and Independent

Agencies Appropriations Act, 2001,

which changed the rate of compensation

payments to certain Filipino veterans

residing in the United States and the

Veterans Benefits and Health Care

Improvement Act of 2000, which

changed the amount of the burial benefit

paid to the survivors of certain Filipino

veterans who were residing in the

United States at the times of their

deaths.

DATES: Effective Date: December 27,

2001.

Applicability Dates: The provisions of

this interim final rule regarding

compensation benefits, 38 CFR 3.42, 38

CFR 3.405, and 38 CFR 3.505, apply

beginning October 27, 2000. The

provision of this interim final rule

regarding burial benefits, 38 CFR 3.43,

applies when the veteran has died after

November 1, 2000.

Comment Date: Comments must be

received by VA on or before February

25, 2002.

ADDRESSES: Mail or hand-deliver

written comments to: Director, Office of

Regulations Management (02D),

Department of Veterans Affairs, 810

Vermont Ave., NW, Room 1154,

Washington, DC 20420; or fax comments

to (202) 273–9289; or e-mail comments

to OGCRegulations@mail.va.gov.

Comments should indicate that they are

submitted in response to ‘‘RIN 2900–

AK65.’’ All comments received will be

available for public inspection in the

Office of Regulations Management,

Room 1158, between the hours of 8:00

a.m. and 4:30 p.m., Monday through

Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: Bill

Russo, Regulations Staff, Compensation

and Pension Service (211A), Veterans

Benefits Administration, Department of

Veterans Affairs, 810 Vermont Avenue,

NW, Washington, DC 20420, telephone

(202) 273–7211.

SUPPLEMENTARY INFORMATION: The

Philippine Islands achieved

independence from the United States in

1946. The Philippines was still a

commonwealth of the United States

when America entered World War II,

and President Roosevelt ordered many

Filipinos into service. In the years that

followed, a variety of VA benefits were

provided to Filipinos based on service

in different military units. One longstanding provision, 38 U.S.C. 107, gave

certain Filipino veterans certain VA

benefits at half the rate paid to United

States veterans.

I. Compensation Benefits

On October 27, 2000, the President

signed into law the Departments of

Veterans Affairs and Housing and Urban

Development, and Independent

Agencies Appropriations Act, 2001,

Pub. L. 106–377, 114 Stat. 1441. Section

501 of Pub. L. 106–377 amended 38

U.S.C. 107 to provide full-rate payments

of benefits for Filipino veterans who

had ‘‘[s]ervice before July 1, 1946, in the

organized military forces of the

Government of the Commonwealth of

the Philippines, while such forces were

in the service of the Armed Forces of the

United States under the military order

of the President dated July 26, 1941,

including among such military forces

organized guerrilla forces under

commanders appointed, designated, or

subsequently recognized by the

Commander in Chief, Southwest Pacific

Area, or other competent authority in

the Army of the United States. * * *’’

In order to be entitled to full-dollar rate

benefits, Pub. L. 106–377 requires that

the veteran be ‘‘residing in the United

States’’ and also be either a U.S. citizen

or an alien lawfully admitted for

permanent residence in the U.S. To

implement this new law, this document

adds new §§ 3.42 and 3.43 to 38 CFR,

redesignates §§ 3.8 and 3.9 as §§ 3.40

and 3.41, respectively, and amends

§ 3.40.

Legislative Intent

By increasing compensation to

Filipino veterans residing in the U.S.,

Congress indicated its recognition that

Filipino veterans residing in the U.S.

have a higher cost of living than

Filipino veterans living in the

Philippines. However, Congress did not

intend to create a windfall for Filipino

veterans who do not actually face the

higher cost of living in the U.S. In order

to avoid that potential result, Congress

required that Filipino veterans be

residing in the U.S. and either be

citizens of the U.S. or aliens lawfully

admitted for permanent residence in the

U.S.

Definitions

Although Congress did not define the

term ‘‘residing in the United States’’ in

Pub. L. 106–377, we believe Congress

intended that VA pay Filipino veterans

the full-dollar rate for compensation

only while they are actually residing in

the U.S. We are therefore defining the

term to require that the veteran’s

principal, actual dwelling place must be

in the U.S. We have used simple,

objective criteria for determining

whether a veteran meets that definition:

requiring that the veteran be present in

the U.S. for at least the majority of each

calendar year, beginning with the

calendar year in which he or she applies

for the full-dollar rate, and continuing

in each year in which the veteran

receives full-dollar rate benefits; and

that the veteran not be absent from the

U.S. for more than 60 consecutive days.

If a veteran is absent from the U.S. for

longer than these periods, it is

reasonable to conclude that he or she is

not residing in the U.S. In addition, this

definition will be understandable to

veterans and readily applied by VA

employees. This rule will also allow

veterans reasonable periods to travel

outside of the U.S. for business or

personal reasons without having their

benefits reduced.

Congress did not define ‘‘United

States’’ in Pub. L. 106–377, but we

believe that Congress intended to more

adequately compensate Filipino

veterans for the cost-of-living in the

states, territories and possessions of the

United States, the District of Columbia,

and the Commonwealth of Puerto Rico.

Therefore, this rule specifically

references the states, territories and

possessions of the United States, the

District of Columbia, and the

Commonwealth of Puerto Rico.

Congress did not define the terms

‘‘citizen’’ of the U.S. and ’’lawfully

admitted for permanent residence’’ in

Pub. L. 106–377. However, these terms

are well defined by existing federal

immigration and naturalization laws

found in title 8, United States Code, and

we believe that Congress intended for

the terms to have the same meaning.