[Federal Register Volume 61, Number 82 (Friday, April 26, 1996)]
[Notices]
[Pages 18621-18622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10312]



-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR
National Park Service


Revision of Handcraft Exemption Policy

AGENCY: National Park Service, Interior.

ACTION: Revision of Policy on the Exemption of Handcraft Sales from 
Franchise Fee Calculation.

-----------------------------------------------------------------------

SUMMARY: The National Park Service (NPS) authorizes private businesses 
known as concessioners to provide necessary and appropriate visitor 
facilities and services in areas of the National Park System. NPS is 
undertaking a review of its policies concerning concession management 
activities. Pending completion of a full review, NPS has amended its 
policy regarding the exemption of gross receipts from the sale of 
United States Indian and native handicrafts from franchise fee 
calculations.

EFFECTIVE DATE: April 26, 1996.

FOR FURTHER INFORMATION CONTACT:
Robert Yearout, Chief, Concession Program Division, National Park 
Service, P.O. Box 37127, Washington, D.C. 20013-7127, Tele. (202) 343-
3784.

SUPPLEMENTARY INFORMATION: On January 17, 1995, the National Park 
Service published for public comment in the Federal Register proposed 
amendments to certain concession policies. Two of these policy 
amendments were adopted under separate notice published on July 20, 
1995. The remaining policy amendment proposed to eliminate the 
exemption from franchise fee computation of gross receipts from the 
sale of Native American handicrafts. In reviewing comments received on 
this proposal, NPS noted that the notice incorrectly limited this 
exclusion to Native American handicrafts, although the Standard NPS 
Concession Contract refers to ``genuine United States Indian and native 
handicraft.'' Because this is a much broader category than indicated in 
the January 17, 1995, Federal Register notice, NPS published a revised 
policy amendment for comment in the Federal Register of July 20, 1995.
    NPS received 23 comments concerning its proposal to eliminate the 
handcraft exemption from gross receipts for the purpose of franchise 
fee calculation. Ten of these comments came from NPS concessioners or 
associated companies, 2 from associations representing groups of NPS 
concessioners, one from an interested environmental organization, one 
from an Indian Tribe, one from a State agency, one from an individual, 
and 7 from craftspersons or groups representing craftspersons.

Analysis of Comments

    The following is an analysis of the comments received on the policy 
proposal NPS is adopting under this notice.
    Sixteen commenters felt that elimination of the franchise fee 
exemption would diminish the extent to which handcrafts are marketed 
and sold within the parks, or that elimination of the exemption 
reflects a departure from a long-established objective of NPS to 
encourage handcrafts and merchandise appropriate to the park and 
region. One of these commenters felt that NPS should continue to do 
everything possible to continue to promote the sale of Native American 
handcrafts in the parks. Elimination of the exemption does not change 
the NPS objective of encouraging handcrafts and merchandise appropriate 
to the park and region. It is important to note that this policy 
revision is prospective in nature. Existing contracts which provide for 
the exemption will not be affected by this policy change. However, new 
contracts will contain a provision requiring that concessioners 
implement a plan to assure that all gift merchandise is theme oriented 
specifically to the park in which they operate. A wide range of 
specific local themes such as geology, wildlife, plant life, 
archaeology, applicable local or Native American culture, and themes 
which enhance the idea of conservation and national park values will be 
used to establish the types of merchandise to be sold. NPS believes 
that this is a more positive approach to assuring that appropriate 
merchandise of all types is offered for sale within the parks than 
simply exempting gross receipts from the sale of certain items from 
franchise fees. This approach was also supported by one commenter, who 
felt that concessioners should be encouraged to sell native handcrafts 
through other means.
    Two commenters suggested that NPS should strengthen its policy by 
providing more attention to enforcement and implementation, by 
narrowing the scope of the exemption to encourage the sale in 
particular parks of genuine handcrafts native to their regions, and by 
prohibiting the sale, outright, of imitation arts and crafts within the 
national parks. Again, NPS feels that its planned approach to the sale 
of merchandise, including handcrafts, will accomplish these objectives 
to a much greater extent than the exemption has in the past.
    Nine commenters expressed concern that elimination of the exemption 
may result in less sales of handcrafts, and that gains in franchise 
fees may be offset by increased costs in entitlement programs for 
craftspersons who lose sales. They also expressed concern about the 
effect this might have on artisans in rural communities. NPS intends to 
take an increased proactive role in encouraging the development and 
sale of theme-related handcrafts within the parks, and does not 
anticipate that the sale of handcrafted items will be significantly 
reduced or eliminated as a result of eliminating the exemption. Rather, 
the emphasis that will be placed on merchandise thematically related to 
the park and its resources is likely to increase the sale of handcrafts 
and related items in most areas.
    Three commenters indicated that they felt that NPS efforts to 
extend franchise fees to concessioner sales from facilities outside the 
parks would be illegal. Elimination of the exemption has no effect on 
operations outside of park boundaries, and NPS does not intend to 
extend franchise fees to sales from facilities outside the parks.
    One commenter stated that finding quality handcrafts and the 
individual selection required is costly and time-consuming, and that 
the proposal will penalize concessioners who endeavor to present the 
finest of American workmanship to park visitors. NPS believes that, in 
most cases, concessioners have already identified and selected sources 
for handcrafted, theme-related items and, consequently, the costs 
associated with finding suppliers of appropriate handcraft items have 
been incurred while the exemption was still in effect. As indicated 
previously, existing contracts which permit the exemption will not be 
affected by this policy change, and new contracts will provide for a 
more proactive approach to assuring that merchandise offered for sale 
is related to the park theme. Accordingly, existing concessioners will 
have the remainder of their existing contract terms with the exemption 
still in effect to refine their handcraft purchasing strategies.
    Finally, one commenter suggested that NPS should postpone policy 
changes in view of the legislative proposals currently under 
consideration by the Congress. NPS disagrees, as none of these 
legislative proposals would directly affect this policy revision.

[[Page 18622]]

    In consideration of the foregoing, the exclusion of gross receipts 
from the sale of United States Indian and native handicrafts for 
purposes of franchise fee calculation is hereby eliminated from NPS 
Management Policies, Chapter 10, Section 9(d)(1) of the standard 
concession contract language and Chapters 24 and 28 of NPS-48, the 
Concessions Guideline.

    Dated: April 8, 1996.
John Reynolds,
Director, National Park Service.
[FR Doc. 96-10312 Filed 4-25-96; 8:45 am]
BILLING CODE 4310-70-M