[Federal Register Volume 63, Number 25 (Friday, February 6, 1998)]
[Notices]
[Pages 6204-6205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2977]


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

DEPARTMENT OF THE INTERIOR

National Park Service


NPS Franchise Fee Determination Guidelines

AGENCY: National Park Service, Interior.

ACTION: Consideration of public comments on NPS franchise fee 
determination guidelines.

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

SUMMARY: On December 5, 1997, the National Park Service (NPS) again 
published for public comment that portion of its concession management 
staff manual (NPS-48) dealing with guidelines for concession contract 
franchise fees. Comments were invited on, among other matters, specific 
proposed changes in concept or in detail, for dealing with concession 
contract franchise fees. The comment period has closed and NPS has duly 
considered the comments received.


[[Page 6205]]


EFFECTIVE DATE: February 6, 1998.

FOR FURTHER INFORMATION CONTACT:
Robert Yearout, Program Manager, Concession Program, National Park 
Service, 1849 C Street, NW, Washington, DC 20240.

SUPPLEMENTARY INFORMATION: The franchise fee guidelines contained in 
NPS-48 were adopted by NPS on December 31, 1986, after receipt and 
consideration of public comments pursuant to Federal Register 
notification. The guidelines were amended on July 20, 1995, after 
consideration of public comment pursuant to Federal Register 
notification. In addition, the guidelines were clarified on August 11, 
1997, after consideration of pubic comment pursuant to Federal Register 
notification. NPS is presently considering the possibility of 
significantly revising the guidelines. If it chooses to do so, the 
proposed revisions will be made available for public comment through 
Federal Register notification.

    Two comments were received in response to the December 5, 1997, 
Federal Register notice. One commenter expressed concern that franchise 
fee adjustments made as part of a concession contract fee 
reconsideration are neither easily quantifiable nor subject to any 
``cap'' as to how much a fee may be raised as a result of the 
reconsideration. The commenter considers that franchise fees should be 
quantifiable for the term of a contract. The commenter suggested that 
this would allow better calculation of prospective financial returns, 
increase the ability to obtain financing, and decrease the risk of 
bidding to obtain a concession contract. Specifically, the commenter 
suggested that the basis for fee adjustments should be a pre-determined 
formula established at the outset of the contract.
    NPS considers that this comment has merit in some respects. 
However, it notes that under current concession contract provisions, 
franchise fees may be adjusted upwards or downwards as circumstances 
warrant during the term of the contract. The present system, 
accordingly, treats the concessioner and the Government alike with 
respect to franchise fee adjustments.
    The commenter also suggested that in analyzing franchise fees, the 
complete financial history of the operation should be considered. NPS 
notes that its current guidelines permit analysis of as many years of 
financial history as is appropriate and that during a franchise fee 
consideration the concessioner is likewise able to provide analysis as 
it sees fit with respect to the operation's financial returns and 
history.
    Finally, the commenter noted that, although, in theory, the NPS 
consideration of industry ratios would seem equitable in analyzing 
franchise fees, published statistics in this regard are not readily 
comparable to NPS concession operations in light of their more 
extensive mix of facilities and services and other factors related to 
operations in areas of the national park system. In addition, the 
commenter suggested that the ratios provided in industry statistics 
have such a wide swing in results that any assignment of ranking would 
be purely subjective on the part of NPS in attempting to recommend a 
new franchise fee. NPS has received similar criticisms of using 
published industry statistics in franchise fee analysis on other 
occasions, including in prior responses to Federal Register requests 
for public comment on NPS franchise fee guidelines.
    NPS agrees that consideration of published industry statistics in 
and of itself would not be an appropriate means to establish a 
franchise fee. However, the NPS guidelines only contemplate 
consideration of published statistics as one starting point for 
franchise fee analysis. The guidelines call for analysis of such 
statistics to account for differences between the general industry and 
the particular circumstances of the concession operation in question. 
In addition, industry statistics as part of a franchise fee 
reconsideration process are shared with the concessioner which may 
dispute their validity and provide alternative statistics. A decision 
on an adjusted franchise fee is made on the basis of all the 
information developed during the reconsideration process, including 
discussions with the concessioner. In addition, if NPS and the 
concessioner cannot agree on an adjustment to the franchise fee, up or 
down as the case may be, the concessioner is entitled to request 
advisory arbitration on the issue and a final decision from the 
Secretary of the Interior based upon the entire record of the matter 
and the views of the arbitration panel. In short, NPS appreciates that 
published statistics cannot be the exclusive means of analyzing 
franchise fees and that they have shortcomings which must be taken into 
account. Nonetheless, NPS considers it appropriate to use published 
statistics, with appropriate adjustment and consideration of their 
limitations, as a franchise fee analytical tool.
    The other comment received was concerned that NPS should permit 
public comment on the specifics of its proposed changes to its 
franchise fee guidelines. This NPS intends to do through Federal 
Register notification if significant changes are proposed.
    Having considered the comments received, and similar comments 
received in response to past Federal Register notification, NPS 
believes that its present franchise fee guidelines are adequate and 
hereby re-adopts them to the extent legally necessary. However, NPS 
does consider that there may be other and perhaps better ways to deal 
with concession contract franchise fees and may suggest significant 
revisions to the present guidelines in the near future. If this occurs, 
further public comment will be invited on the revisions and the 
comments received in response to the December 5, 1997, notice and prior 
notices will be taken into due account as well in reaching a final 
decision on any proposed revisions.

    Dated: January 23, 1998.
Wendelin M. Mann,
Acting Concession Program Manager.
[FR Doc. 98-2977 Filed 2-5-98; 8:45 am]
BILLING CODE 4310-70-M