[Federal Register Volume 64, Number 125 (Wednesday, June 30, 1999)]
[Proposed Rules]
[Pages 35516-35536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16490]



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Part III





Department of the Interior





_______________________________________________________________________



National Park Service



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36 CFR Part 51



Concession Contracts; Proposed Rule

  Federal Register / Vol. 64, No. 125 / Wednesday, June 30, 1999 / 
Proposed Rules  

[[Page 35516]]



DEPARTMENT OF THE INTERIOR

National Park Service

36 CFR Part 51

RIN 1024-AC72


Concession Contracts

AGENCY: National Park Service, Interior.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would amend regulations on concession 
contracts to comply with the requirements of Title IV of the National 
Parks Omnibus Management Act of 1998 (the ``1998 Act''), which provides 
new legislative authorities, policies and requirements for the 
solicitation, award and administration of National Park Service 
concession contracts.

DATES: We will accept written comments, suggestions or objections on or 
before August 30, 1999.

ADDRESSES: Written comments should be sent to the Concessions Program 
Manager, National Park Service, 1849 ``C'' Street, NW, Washington, DC 
20240.

FOR FURTHER INFORMATION CONTACT: Wendelin Mann, Concession Program, 
National Park Service, 1849 ``C'' Street, NW, Washington, DC 20240 
(202/565-1219).

SUPPLEMENTARY INFORMATION: The 1998 Act has established a new statutory 
framework for the solicitation, award and administration of National 
Park Service concession contracts. Concession contracts are the form of 
governmental authorization used to permit private businesses 
(``concessioners'') to provide visitor services in areas of the 
national park system. Visitor services include lodging, food service, 
merchandising, transportation, outfitting and guiding, and similar 
activities.
    The National Park Service has been awarding and administering 
concession contracts in various forms since its establishment in 1916. 
In 1965, Congress formally established by the Concession Policies Act 
of 1965 (the ``1965 Act'') a number of policies and procedures 
regarding concession contracts. 36 CFR part 51 as it presently exists 
implemented the 1965 law. On November 13, 1998, the Congress 
substantially revised these policies and procedures by passage of the 
1998 Act.

General Content

    The proposed rule has two major purposes. The first is to set forth 
procedures as to how concession contracts are to be solicited and 
awarded by the National Park Service under the 1998 Act. With certain 
limited exceptions, the 1998 Act requires competitive awards of 
concession contracts. In some circumstances, an existing satisfactory 
concessioner may have a right to match the terms of a competing 
proposal for a new concession contract.
    Second, unlike the existing 36 CFR part 51, the proposed rule sets 
forth in detail the nature of the compensatory interest in capital 
improvements a concessioner may construct on park lands under the terms 
of a concession contract. This interest, called a ``leasehold surrender 
interest,'' is described at length in the 1998 Act. It is our intention 
to establish appropriate contract terms and conditions for leasehold 
surrender interests by this rule so as to assure that the requirements 
of the 1998 Act are strictly followed. Accordingly, the leasehold 
surrender interest subpart of the proposed rule is lengthy. However, 
concession contracts will be proportionately shorter as they will refer 
to the regulations with respect to leasehold surrender terms and 
conditions.
    The proposed rule also contains a number of other provisions 
implementing the policies and procedures of the 1998 Act.

Subpart Content

Subpart A

    Authority and Purpose. Subpart A of the rule describes the 
authority for the rule, its scope, and the scope of concession 
contracts in general. It also describes the statutory policies that 
underlie concession contracts.

Subpart B

    General Definitions. Subpart B provides a number of definitions of 
terms that are used throughout the rule. Readers should refer to these 
definitions whenever a defined term is used in the text of the rule.

Subpart C

    Solicitation, Selection and Award procedures. Subpart C describes 
general procedures for competitive solicitation, selection and award of 
concession contracts in compliance with the 1998 Act. Except as 
described in subpart D, we must award all concession contracts on a 
competitive basis. As part of the competitive process, however, we will 
give great emphasis to the responsiveness of concession contract 
proposals to the objectives of protecting, conserving, and preserving 
resources of park areas, including, but not limited to, the conduct of 
environmentally enhancing operational programs.
    Among other matters, prospectuses must set forth specific 
environmentally enhancing operational objectives and challenge offerors 
to propose means to meet or exceed these objectives. It is our 
intention to ``green'' both government and concessioner operations in 
park areas so as to make them a nationwide model and example. The 
Secretary, the National Park Service and current concessioners are 
already actively pursuing the ``greening'' program, focussing on such 
activities as recycling, waste minimization, environmentally preferable 
procurement (``green procurement''), and hazardous waste response 
capabilities.
    The following chart summarizes the process set forth in Subpart C 
for evaluating proposals in compliance with the 1998 Act to select the 
best proposal.

                                   Summary of Process for Evaluating Proposals
----------------------------------------------------------------------------------------------------------------
                                                                              If two or more are substantially
    Evaluate the proposals for:          Select the one proposal that:                     equal:
----------------------------------------------------------------------------------------------------------------
1. Responsiveness to the prospectus  Is responsive to the prospectus......  Continue with all responsive
 (Sec.  51.14).                                                              proposals. (Reject any that are not
                                                                             responsive) (Sec.  51.14).
2. The four principal factors (Sec.  Is assessed as the best overall        Continue with all substantially
  51.20(a)-(d)).                      proposal.                              equal proposals. (Reject any that
                                                                             are unacceptable under any of these
                                                                             factors) (Sec.  51.24).
3. Program for environmental         Provides the ``most substantial,       Continue with all substantially
 enhancement (Sec.  51.20(a)          comprehensive and effective program    equal proposals.
 subfactor).                          for environmental enhancement''.
                                     Unless Another proposal provides,
                                      through higher than minimum
                                      franchise fees, substantively
                                      greater benefits for the
                                      preservation of the resource

[[Page 35517]]

 
                                     Then Select that other proposal
4. The fifth principal factor (Sec.  Is assessed as the best proposal with  Continue with all substantially
  51.20(e)).                          respect to this factor.                equal proposals.
5. Secondary factors (Sec.  51.22).  Is assessed as best proposal with      Continue with all substantially
                                      respect to the secondary factor.       equal proposals.
6. Additional selection factors      Meets the selection factors better     Request ``best and final'' proposals
 described in the prospectus (if      than any other remaining proposal.     from all remaining offerors. Repeat
 any)(Sec.  51.23b).                                                         evaluation for all ``best and
                                                                             final'' proposals (Sec.  51.23a).
----------------------------------------------------------------------------------------------------------------

Subpart D

    Non-Competitive Award of Concession Contracts. Subpart D describes 
the three limited situations in which we may make non-competitive 
awards of concession contracts. In certain circumstances we may extend 
a concession contract for up to three years on a non-competitive basis, 
we may award a temporary contract for a term of no more than three 
years on a non-competitive basis, and, we may award a concession 
contract on a non-competitive basis in extraordinary circumstances if 
certain findings are made and special procedures followed.

Subpart E

    Right of Preference. Subpart E describes the right of preference to 
a new concession contract that may be obtained by certain existing 
satisfactory concessioners. Only satisfactory outfitter and guide 
concessioners or satisfactory concessioners annually grossing under 
$500,000 are eligible for the preference. If a concessioner is eligible 
for the preference, it must submit a responsive offer pursuant to the 
prospectus issued for the new contract. If the concessioner does so, it 
is entitled under specified conditions to match the terms of a better 
proposal for the concession contract.

Subpart F

    Leasehold Surrender Interest. Subpart F first defines a number of 
terms necessary to understand the leasehold surrender provisions of the 
rule. You should refer to these definitions whenever the defined terms 
are used in the text of the rule. Subpart F then sets forth the terms 
and conditions of leasehold surrender interests which you may obtain 
under a concession contract. Generally, a leasehold surrender interest 
constitutes a right of a concessioner to receive payment for capital 
improvements a concessioner makes on park area lands. As stated above, 
the terms and conditions of leasehold surrender interests are very 
detailed as we intend that these terms and conditions will be 
incorporated by reference into concession contracts, making concession 
contracts proportionately shorter.

Subpart G

    Possessory Interest. Subpart G sets forth transition procedures 
with respect to the form of compensatory interest (``possessory 
interest'') obtained by concessioners under certain concession 
contracts entered into under the 1965 Act and concession contracts to 
be entered into under the 1998 Act. In general terms, a 1965 Act 
concessioner may either receive full compensation for existing 
possessory interest as described in the applicable contract or convert 
the possessory interest to a leasehold surrender interest if it seeks 
and is awarded a new concession contract.

Subpart H

    Concession Contract Provisions. Subpart H describes in general the 
terms of certain concession contract provisions that reflect the 
policies and procedures of the 1998 Act.

Subpart I

    Assignment or Encumbrance of Concession Contracts. Subpart I sets 
forth the standards and procedures applicable to our approval of 
assignments of concession contracts and encumbrance of concessioner 
assets.

Subpart J

    Information and Access to Information. Subpart J describes the 
types of records a concessioner must retain for the purposes of our 
concession contract administration, the access rights of the government 
to the records, and the types of concessioner information that we make 
available to the public.

Subpart K

    The Effect of the 1998 Act's Repeal of the 1965 Act. Subpart K 
describes the effect of the 1998 Act's repeal of the 1965 Act by the 
1998 Act. In this connection, section 415 of the 1998 Act repealed the 
1965 Act but states that the repeal does not affect the validity of any 
concession contract or permit entered into under the 1965 Act. However, 
Section 415 also states that the 1998 Act will apply to existing 
contracts or permits to the extent that the provisions of the 1998 Act 
are not inconsistent with the terms and conditions of the existing 
concession contract or permit.
    Questions have arisen in this regard as to the possible 
continuation of the right of preference in renewal previously provided 
to existing satisfactory concessioners by section 5 of the 1965 Act. It 
is our position, subject to consideration of public comments on this 
matter, that the 1998 Act repealed this right of preference in renewal 
as the right was statutory in nature, not contractual. However, the 
proposed rule also states that we will provide an existing satisfactory 
concessioner a right of preference as otherwise described in the 
proposed regulations if a particular concession contract or permit in 
effect as of November 13, 1998, is determined to have provided a 
preference in renewal as a matter of contract right. We particularly 
request public comment on this matter.

Subpart L

    Information Collection. Subpart L sets forth information collection 
requirements of the rule.

Drafting Information

    The primary authors of this rule are Lars A. Hanslin, Special 
Assistant to the Director, National Park Service, and Wendelin M. Mann, 
Concession Program, National Park Service.

Compliance With Laws, Executive Orders and Departmental Policy

Regulatory Planning and Review (E.O. 12866)

    This rule is a significant rule and has been reviewed by the Office 
of Management and Budget review under Executive Order 12866.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business

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Regulatory Enforcement Fairness 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 industries, 
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 solicitation, award and administration of National Park Service 
concession contracts required by the 1998 Act.

Regulatory Flexibility Act

    The purpose of this rule is to describe policies and procedures for 
the solicitation, award and administration of National Park Service 
concession contracts in accordance with the 1998 Act. The Department of 
the Interior is analyzing what, if any, economic effects this rule will 
have on small entities under the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.). As of the promulgation of this rule, there are only 
approximately 630 National Park Service concession contracts and 
permits. It is likely that upon implementation of this rule and related 
authorities, this number will decrease, perhaps to as few as 350, as 
alternative authorities for providing visitor services in areas of the 
National Park System are now available. Consistent with the Regulatory 
Flexibility Act, the Department of the Interior will publish in the 
Federal Register its initial regulatory flexibility analysis and invite 
public comment on this analysis.

Unfunded Mandates Reform Act

    The National Park Service has determined and certifies pursuant to 
the Unfunded Mandates Reform Act (2 U.S.C. 1502 et seq.) that this rule 
will not impose a cost of $100 million or more in any given year on 
local, State, tribal governments or private entities. As stated above, 
the rule imposes no costs on any entity except for application expenses 
for businesses that seek to be awarded a National Park Service 
concession contract. A statement containing the information required by 
the Unfunded Mandates Reform Act is not required.

Takings. (E.O. 12630)

    In accordance with Executive Order 12360, the rule does not have 
significant takings implications. The rule has no effect on private 
property. A takings implications assessment is not required.

Federalism

    In accordance with Executive Order 12612, the 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 the National Park Service.

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 requires an information collection from ten or more 
parties so a submission under the Paperwork Reduction Act is required. 
The information collection for submission of offers in response to 
concession prospectuses is covered by OMB Approval No. 1024-1025, 
effective through December 31, 1999. An information collection for 
proposed sales of concession operations was previously covered by OMB 
Approval No 1024-0126, which expired January 31, 1996. An OMB form 83-I 
has been submitted to OMB for approval.
    This information is solicited to assist in the administration of 
National Park Service concession contracts. The general public is not 
required to provide information by this rule. The public reporting 
burden relates only to persons or entities applying to become National 
Park Service concessioners. The National Park Service estimates that 
approximately 20 large and 80 small authorizations will expire each 
year. On average, the National Park Service receives approximately 4 
offers for each large authorization and 2 for each small authorization. 
Estimated time to prepare a large offer is 60 working days (480 burden 
hours), and 30 working days (240 burden hours) for a small offer. The 
National Park Service estimates the average cost per hour at $40, 
resulting in an annual cost of $3,072,000. Likewise, the National Park 
Service receives approximately 20 requests to sell or transfer 
concession authorizations each year. The National Park Service 
estimates that approximately 80 hours are required to prepare an 
application, and only 1 application is submitted per transaction. Based 
on an average cost of $40 per hour, the annual cost would be $64,000. 
The total of these estimated annual costs is $3,136,000.
    Comments on the information collection aspect of this rule should 
be directed to the Attention: Desk Officer for the Interior Department, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503. Comments should also be directed to the 
Information Collection Officer, National Park Service, 1849 C Street, 
NW, Washington, DC 20240. OMB has up to 60 days to approve or 
disapprove the information collection but may respond after 30 days. 
Therefore, public comments should be submitted to OMB within 30 days in 
order to assure their maximum consideration.

National Environmental Policy Act

    This rule does not constitute a major federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental 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 the 
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 (grouping 
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?'' 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 51

    Concessions, Government contracts, National parks.

[[Page 35519]]

    In consideration of the forgoing, 36 CFR Part 51 is proposed to be 
revised to read as follows:

PART 51--CONCESSION CONTRACTS

Subpart A--Authority and Purpose

Sec.
51.1  What does this part cover?
51.2  What is the policy underlying concession contracts?

Subpart B--General Definitions

51.3  How are terms defined in this part?

Subpart C--Solicitation, Selection and Award Procedures

51.4  How will the Director invite the general public to apply for 
the award of a concession contract?
51.5  What information will the prospectus include?
51.6  Will a concession contract be developed for a particular 
potential offeror?
51.7  How will information be provided to a potential offeror after 
the prospectus is issued?
51.8  Where will the Director publish the notice of availability of 
the prospectus?
51.9  How do I get a copy of the prospectus?
51.10  How long will I have to submit my proposal?
51.11  May the Director amend, extend, or terminate a prospectus or 
solicitation?
51.12  Do I have any rights if the Director amends, extends or 
terminates a prospectus or solicitation?
51.13  Are there any other procedures that I must follow or that 
apply to the solicitation or to the selection of the best proposal?
51.14  When will the Director determine if proposals are responsive?
51.15  What is a ``responsive proposal''?
51.16  What happens if no responsive proposals are submitted?
51.17  May I clarify, amend or supplement my responsive proposal 
after it is submitted?
51.18  How will the Director select an offeror for award of the 
concession contract?
51.19  How will the Director select the best proposal?
51.20  What are the five principal selection factors?
51.21  How will the Director apply the five selection factors and 
select the best proposal?
51.22  When will the Director apply secondary factors?
51.23  How will the Director select the best proposal if two or more 
proposals are assessed as equal after the Director has applied the 
principal and secondary factors?
51.24  What happens if a proposal is rated ``unacceptable'' under 
any of the first four principal selection factors or if the offeror 
is not a qualified person?
51.25  Must the Director award the concession contract that is set 
forth in the prospectus?
51.26  Does this part limit the authority of the Director?
51.27  When must the selected offeror execute the concession 
contract?
51.28  After the selected offeror executes the concession contract, 
when may the Director execute the concession contract?

Subpart D--Non-Competitive Award of Concession Contracts

51.29  May the Director extend an existing concession contract 
without a public solicitation?
51.30  May the Director award a temporary concession contract 
without a public solicitation?
51.31  Are there any other circumstances in which the Director may 
award a concession contract without public solicitation?

Subpart E--Right of Preference

51.32  Does the existence of a preferred offeror and a possible 
right of preference limit the authority of the Director to establish 
the terms of a concession contract?
51.33  What three conditions must be met before the Director 
determines that a prior concessioner is a preferred offeror?
51.34  How will the Director determine that a concession contract is 
a qualified concession contract?
51.35  How will the Director determine that a concession contract is 
an ``outfitter and guide concession contract''?
51.36  What are some examples of outfitter and guide concession 
contracts?
51.37  What facts and circumstances will the Director take into 
account when determining if a concession contract is an outfitter 
and guide concession contract?
51.38  What are some circumstances that will indicate that outfitter 
and guide operations are conducted in the backcountry?
51.39  If the concession contract grants a compensable interest in 
real property improvements, will the Director find that the 
concession contract is an outfitter and guide concession contract?
51.40  Are there exceptions to this compensable interest 
prohibition?
51.41  Who will make the determination that a concession contract is 
an outfitter and guide contract?
51.42  How will the Director determine if a prior concessioner was 
satisfactory for purposes of this part?
51.43  Will a prior concessioner that has operated for less than 50% 
of the term of a concession contract be considered a satisfactory 
operator?
51.44  May the Director determine that a prior concessioner has not 
operated satisfactorily after a prospectus is issued?
51.45  What happens to a right of preference in the event of 
termination of a concession contract for unsatisfactory performance 
or other breach?
51.46  May the Director grant a right of preference except in 
accordance with this part?
51.47  How will I know if a preferred offeror exists?
51.48  What solicitation, selection and award procedures apply when 
a preferred offeror exists?
51.49  What must a preferred offeror do before he or she may 
exercise a right of preference?
51.50  What happens if the preferred offeror does not submit a 
responsive proposal?
51.51  What is the process if the Director determines that the best 
responsive proposal was not submitted by the preferred offeror?
51.52  What if the preferred offeror does not timely amend its 
proposal to meet the terms and conditions of the best proposal or is 
not a qualified person to carry out the terms of the amended 
proposal?
51.53  What will the Director do if a selected preferred offeror 
does not timely execute the new concession contract?
51.54  What happens to a possible right of preference if the 
Director receives no responsive proposals?
51.55  How do I appeal a decision of the Director that a prior 
concessioner is not a preferred offeror?

Subpart F--Leasehold Surrender Interest

 51.56  What special terms must I know to understand leasehold 
surrender interest?
51.57  How do I obtain a leasehold surrender interest?
51.58  If a concessioner does not comply with the requirements of 
this part or the terms and conditions of a leasehold surrender 
interest concession contract, what happens?
51.59  Why may the Director authorize the construction or 
installation of a capital improvement?
51.60  What must a concessioner do before beginning to construct or 
install a capital improvement in which the concessioner seeks a 
leasehold surrender interest?
51.61  What must a concessioner do after substantial completion of 
the capital improvement?
51.62  How will the Director determine the construction cost for 
purposes of leasehold surrender interest value?
51.63  May the concessioner appeal the Director's determination of 
construction cost?
51.64  What actions may or must the concessioner take with respect 
to a leasehold surrender interest?
51.65  Will leasehold surrender interest be extinguished by 
expiration or termination of a leasehold surrender interest 
concession contract or may it be taken for public use?
51.66  How will a new concession contract awarded to a prior 
concessioner treat a leasehold surrender interest obtained under a 
prior concession contract?
51.67  How is a prior concessioner who is not awarded a new 
concession contract paid for a leasehold surrender interest?
51.68  When a new concessioner pays a prior concessioner for a 
leasehold surrender interest, what is the leasehold surrender 
interest in the related capital improvements for purposes of a new 
concession contract?

[[Page 35520]]

51.69  What is the process to determine the leasehold surrender 
interest value when a new concessioner is to pay a prior 
concessioner for a leasehold surrender interest?
51.70  May the concessioner gain additional leasehold surrender 
interest by adding to a structure in which the concessioner has a 
leasehold surrender interest?
51.71  May the concessioner gain additional leasehold surrender 
interest by replacing a fixture in which the concessioner has a 
leasehold surrender interest?
51.72  Will a concessioner who undertakes a major rehabilitation of 
an existing structure in which the concessioner has a leasehold 
surrender interest increase its leasehold surrender interest?
51.73  Under what conditions will the Director authorize a 
concessioner to obtain a leasehold surrender interest in an existing 
capital improvement in which no leasehold surrender interest exists?
51.74  Will a concessioner receive new or additional leasehold 
surrender interest as a result of a rehabilitation that does not 
qualify as a major rehabilitation?
51.75  Is a concessioner required to maintain capital improvements, 
and if so, will the concessioner obtain a leasehold surrender 
interest in such repair and maintenance?

Subpart G--Possessory Interest

51.76  If a prior concessioner is not awarded a new concession 
contract, how will a prior concessioner that has a possessory 
interest receive compensation for its possessory interest?
51.77  If a prior concessioner is awarded a new concession contract, 
what happens to the concessioner's possessory interest?
51.78  What is the process to be followed if there is a dispute 
between the prior concessioner and the Director as to the value of 
possessory interest?
51.79  If a new concessioner is awarded the contract, what is the 
relationship between leasehold surrender interest and possessory 
interest?
51.80  What happens if there is a dispute between the new 
concessioner and a prior concessioner as to the value of the 
possessory interest?

Subpart H--Concession Contract Provisions

51.81  What is the term or length of a concession contract?
51.82  When may a concession contract be terminated by the Director?
51.83  May the Director split or combine concession contracts?
51.84  May the Director include in a concession contract or 
otherwise grant a concessioner a preferential right to provide new 
or additional visitor services?
51.85  Will a concession contract provide a concessioner an 
exclusive right to provide visitor services?
51.86  Is there a special rule for transportation service contracts?
51.87  Where will the Director deposit franchise fees and how will 
the Director use franchise fees?
51.88  Will franchise fees be subject to renegotiation?
51.89  May the Director waive payment of franchise fee or other 
payments?
51.90  How will the Director establish franchise fees for multiple 
outfitter and guide concession contracts in the same park area?
51.91   May the Director include ``special account'' provisions in 
concession contracts?
51.92  [Reserved]

Subpart I--Assignment or Encumbrance of Concession Contracts

51.93  What special terms must I know to understand this Part?
51.94  What assignments require the approval of the Director?
51.95  What encumbrances require the approval of the Director?
51.96  Does the concessioner have an unconditional right to receive 
the Director's approval for an assignment or encumbrance?
51.97  What happens if an assignment or encumbrance is completed 
without the approval of the Director?
51.98  What happens if there is a default on an encumbrance approved 
by the Director?
51.99  How does the concessioner get the Director's approval before 
making an assignment or encumbrance?
51.100  What information will the Director require in the 
application?
51.101  May the Director waive any of these documentation 
requirements?
51.102  What are standard proformas?
51.103  If the concessioner submits a non-standard proforma, is the 
Director less likely to approve the transaction?
51.104  If the transaction includes more than one concession 
contract, how must required information be provided?

Process To Receive the Director's Approval of Assignments and 
Encumbrances

51.105  In what circumstances will the Director not approve an 
assignment or encumbrance?
51.106  What information will the Director consider when deciding to 
approve a transaction?
51.107  Does the Director's approval of an assignment or encumbrance 
include any representations of any nature?
51.108  May the Director amend or extend a concession contract for 
the purpose of facilitating a transaction?
51.109  May the Director open to renegotiation or modify the terms 
of a concession contract as a condition of the approval of a 
transaction?
51.110  May the Director charge a fee for the review a proposed 
transaction?

Subpart J--Information and Access to Information

51.111  What records must the concessioner keep and what access does 
the Director have to records?
51.112  What access to concessioner records will the Comptroller 
General have?
51.113  What information will the Director make publicly available 
about the concessioner and the concession contract?
51.114  When will the Director make proposals and evaluation 
documents publicly available?

Subpart K--The Effect of the 1998 Act's Repeal of the 1965 Act

51.115  Did the 1998 Act repeal the 1965 Act?
51.116  What is the effect of the 1998 Act's repeal of the 1965 
Act's renewal preference?
51.117  What renewal preference exceptions are made for Glacier Bay 
cruise ships?

Subpart L--Information Collection

51.118  Have information collection procedures been followed?

    Authority: The Act of August 25, 1916, as amended and 
supplemented, 16 U.S.C. 1 et seq., particularly, Title IV of the 
National Parks Omnibus Management Act of 1998 (Pub. L. 105-391)

Subpart A--Authority and Purpose


Sec. 51.1  What does this part cover?

    (a) This part covers the solicitation, award, and administration of 
concession contracts. The Director solicits, awards and administers 
concession contracts on behalf of the Secretary of the Interior under 
the authority of the Act of August 25, 1916, as amended and 
supplemented, 16 U.S.C. 1 et seq., and particularly, Title IV of the 
National Parks Omnibus Management Act of 1998 (Pub. L. 105-391). The 
purpose of concession contracts is to authorize concessioners to 
provide visitor services in park areas. All concession contracts are to 
be consistent with the requirements of this part.
    (b) The Director may award concession contracts only under this 
authority. The Director may not authorize the conduct of visitor 
services by any means other than a concession contract except as 
otherwise may be authorized by law. For example, the Director may issue 
limited commercial use authorizations under section 418 of the 1998 
Act. Or, the Director may enter into agreements with non-profit 
organizations for the sale of interpretive materials and/or the conduct 
of interpretive programs for a fee or charge to visitors. In addition, 
the Director may, as part of an interpretive program agreement 
otherwise authorized by law, authorize the non-profit organization to 
provide other incidental visitor services

[[Page 35521]]

necessary and appropriate for the conduct of the interpretive program.


Sec. 51.2  What is the policy underlying concessions contracts?

    It is the policy of the Congress and the Secretary of the Interior 
that visitor services in park areas may be provided only under 
carefully controlled safeguards against unregulated and indiscriminate 
use so that visitation will not unduly impair park values and 
resources. Development of visitor services in park areas will be 
limited to locations that are consistent to the highest practicable 
degree with the preservation and conservation of the resources and 
values of the park area. It is also the policy of the Congress and the 
Secretary of the Interior that development of visitor services in park 
areas must be limited to those as are necessary and appropriate for 
public use and enjoyment of the park area in which they are located.

Subpart B--General Definitions


Sec. 51.3  How are terms defined in this part?

    To understand this part, you must refer to these definitions, 
applicable in the singular or the plural, whenever these terms are used 
in this part:
    The 1965 Act means Public Law 89-249, commonly known as the 
National Park Service Concessions Policy Act of 1965.
    A 1965 Act concession contract is a concession contract or permit 
entered into under the authority of the 1965 Act.
    The 1998 Act means Title IV of Public Law 105-391.
    The award of a concession contract is the establishment of a 
legally binding concession contract. It occurs only when the Director 
and a selected offeror both fully execute a concession contract.
    A concession contract (or contract), unless otherwise indicated in 
this part, means a binding written agreement between the Director and a 
concessioner under which the concessioner is authorized and/or required 
to provide certain visitor services within a park area under specified 
terms and conditions. Concession contracts are not contracts within the 
meaning of 41 U.S.C. 602 et seq. and are not service or procurement 
contracts within the meaning of statutes, regulations or policies that 
apply to federal service contracts or other types of federal 
procurement actions.
    A concessioner is an individual, corporation, or other legally 
recognized form of business organization that holds a concession 
contract.
    Director means the Director of the National Park Service or an 
authorized representative of the Director, except where a particular 
official is specifically identified in this part.
    A franchise fee is the consideration paid to the Director by a 
concessioner for the privileges granted by a concession contract.
    Offeror means an individual, corporation, or other legally 
recognized form of business organization that submits a proposal for a 
concession contract.
    A park area means a unit of the national park system.
    Possessory interest means a compensable interest in real property 
improvements as defined by the 1965 Act obtained by a prior 
concessioner under a possessory interest concession contract. 
Possessory interest does not include any interest in personal property 
even though a prior concession contract may have provided a compensable 
interest in personal property described as a ``possessory interest.''
    A possessory interest concession contract means a 1965 Act 
concession contract that provided the prior concessioner a possessory 
interest.
    A preferred offeror is a prior concessioner that the Director has 
determined is eligible to exercise a right of preference to the award 
of a concession contract in accordance with this part if the preferred 
offeror submits a responsive proposal under a prospectus.
    A prior concession contract is the concession contract that is or 
was in effect before the effective date of a new concession contract.
    A prior concessioner is a concessioner under a prior concession 
contract.
    A qualified person is an individual, corporation or other legally 
recognized form of business organization that the Director determines 
is qualified to be a concessioner. To be a qualified person, an 
individual, corporation or other legally recognized form of business 
organization must have the experience and financial ability to 
satisfactorily carry out the terms of a concession contract. This 
experience and ability includes, but is not limited to, the ability to 
protect and preserve the resources of the park area and the ability to 
provide satisfactory visitor services at reasonable rates to the 
public.
    A right of preference is the right of a preferred offeror, if it 
submits a responsive proposal, to match in accordance with the 
requirements of this part the terms and conditions of a competing 
responsive proposal that the Director has determined to be the best 
proposal for a concession contract. A right of preference does not 
provide a preferred offeror any rights of any nature to establish or 
negotiate the terms and conditions of a concession contract to which a 
right of preference may apply.
    Visitor services means accommodations, facilities and services 
necessary and appropriate for public use and enjoyment of a park area 
provided to visitors to the area by a person (other than the Director) 
for a fee or charge. The fee or charge paid by the visitor may be 
direct or indirect as part of the provision of comprehensive visitor 
services. Visitor services may include, but are not limited to, 
lodging, food service, merchandising, tours, recreational activities, 
guiding, transportation, and equipment rental. Visitor services may 
include campgrounds not operated by the Director. Visitor services 
include the sale of interpretive materials or the conduct of 
interpretive programs for a fee or charge to visitors.

Subpart C--Solicitation, Selection and Award Procedures


Sec. 51.4  How will the Director invite the general public to apply for 
the award of a concession contract?

    The Director must award all concession contracts, except as 
otherwise expressly provided in this part, through a public 
solicitation process. The public solicitation process begins with the 
issuance of a prospectus. The prospectus will describe the terms and 
conditions of a concession contract to be awarded and will invite the 
general public to submit proposals for the contract.


Sec. 51.5  What information will the prospectus include?

    The prospectus must include the following information:
    (a) The minimum requirements of the concession contract. The 
minimum requirements of the concession contract, include, but are not 
limited to the following:
    (1) The minimum franchise fee or fees, and, other forms of minimum 
consideration, if any, that the concessioner must pay;
    (2) The minimum required visitor services that the concessioner 
must provide and any other visitor services that the concessioner may 
be authorized but not required to provide;
    (3) The minimum capital investment that the concessioner must make;
    (4) The minimum required measures that the concessioner must take 
to ensure the protection, conservation, and preservation of the 
resources of the park area. Such minimum requirements will include 
specific actions and programs

[[Page 35522]]

for the protection and enhancement of the environment as appropriate in 
furtherance of these purposes; and
    (5) Any other minimum requirements that the new contract may 
specify.
    (b) The terms and conditions of a prior concession contract, if 
any, relating to the visitor services to be provided, including all 
fees and other forms of compensation provided to the Director under a 
prior contract;
    (c) A description of facilities and services, if any, that the 
Director may provide to the concessioner under the terms of the 
concession contract, including, but not limited to, public access, 
utilities and buildings;
    (d) An estimate of the amount of any compensation due a prior 
concessioner from a new concessioner under the terms of a prior 
concession contract;
    (e) A statement identifying each principal selection factor for 
proposals, including sub-factors, if any, and secondary factors, if 
any, and the weight and relative importance of the principal and any 
secondary factors in the selection decision;
    (f) Any additional information available to the Director that the 
Director determines is necessary to allow for the submission of 
competitive proposals; and
    (g) Identification of a preferred offeror for the concession 
contract, if any, and, if a preferred offeror exists, a description of 
a right of preference to the award of the concession contract.


Sec. 51.6  Will a concession contract be developed for a particular 
potential offeror?

    The terms and conditions of a concession contract must represent 
the requirements of the Director and must not be developed to 
accommodate the capabilities or limitations of any potential offeror.


Sec. 51.7  How will information be provided to a potential offeror 
after the prospectus is issued?

    Material information directly related to the prospectus and the 
concession contract (except that which is otherwise publicly available) 
that the Director provides to any potential offeror prior to the 
submission of proposals must be made available to all persons who have 
requested a copy of the prospectus.


Sec. 51.8  Where will the Director publish the notice of availability 
of the prospectus?

    The Director will publish a notice of the availability of the 
prospectus at least once in the Commerce Business Daily or in a similar 
publication if the Commerce Business Daily ceases to be published. The 
Director may also publish notices, if determined appropriate by the 
Director, in local or national newspapers or trade magazines.


Sec. 51.9  How do I get a copy of the prospectus?

    The Director will make the prospectus available upon request to all 
interested persons. The Director may charge a reasonable fee for a 
prospectus, not to exceed printing and mailing costs.


Sec. 51.10  How long will I have to submit my proposal?

    The Director will allow an appropriate period of time for 
submission of proposals that is not less than sixty days unless the 
Director determines that a shorter time period is appropriate in the 
circumstances of a particular solicitation.


Sec. 51.11  May the Director amend, extend, or terminate a prospectus 
or solicitation?

    The Director may amend a prospectus and/or extend the submission 
date prior to the date of submission of proposals. The Director may 
terminate a solicitation at any time prior to award of the concession 
contract.


Sec. 51.12  Do I have any rights if the Director amends, extends or 
terminates a prospectus or solicitation?

    No offeror or other person will obtain compensable or other legal 
rights as a result of a canceled or resolicited solicitation for a 
concession contract.


Sec. 51.13  Are there any other procedures that I must follow or that 
apply to the solicitation or to the selection of the best proposal?

    The Director may specify, in a prospectus, additional solicitation 
and/or selection procedures consistent with the requirements of this 
part in the interests of enhancing competition. Such additional 
procedures may include, but are not limited to, issuance of a two-
phased prospectus--a qualifications phase and a proposal phase, and, 
use of a lottery system to select proposals where two or more proposals 
are deemed to be of equal merit. The Director will include simplified 
solicitation and/or information requirements in a prospectus for a 
concession contract that the Director considers is likely to be awarded 
to a sole proprietorship.


Sec. 51.14  When will the Director determine if proposals are 
responsive?

    After the due date for submission of proposals as stated in a 
prospectus, the Director may make a preliminary review of the proposals 
submitted to determine which of them, if any, are responsive to the 
terms of the prospectus. The Director will not further consider 
proposals that the Director determines to be non-responsive.


Sec. 51.15  What is a ``responsive proposal''?

    A ``responsive proposal'' means a timely submitted proposal in 
which the offeror agrees to all of the minimum requirements of the 
concession contract and the prospectus and provides all mandatory 
information specified in the prospectus.


Sec. 51.16  What happens if no responsive proposals are submitted?

    If no responsive proposals are submitted, the Director may cancel 
the prospectus, establish new contract requirements and reissue a 
modified prospectus, or, cancel the solicitation.


Sec. 51.17  May I clarify, amend or supplement my responsive proposal 
after it is submitted?

    The Director may request from any offeror who has submitted a 
responsive proposal written clarification of its proposal. However, an 
offeror may not substantively amend or supplement a responsive proposal 
after the submission date unless the Director provides all offerors 
that submitted responsive proposals a similar opportunity to amend or 
supplement their proposals.


Sec. 51.18  How will the Director select an offeror for award of the 
concession contract?

    The Director, subject to applicable conditions of this part, will 
select for award of the concession contract the offeror that the 
Director determines submitted the best proposal pursuant to the 
prospectus. The ``best proposal'' is the responsive proposal that the 
Director, through the following procedures, determines will result in 
the highest level of performance and benefit to the government, 
including, but not limited to, protection and enhancement of the 
resources of the park area, under the concession contract of all of the 
responsive proposals submitted.


Sec. 51.19  How will the Director select the best proposal?

    The Director will apply to responsive proposals the five principal 
selection factors in Sec. 51.20, taking into account any subfactors and 
secondary factors described in the prospectus, and select the best 
proposal in the manner set forth in that section.


Sec. 51.20  What are the five principal selection factors?

    The five principal selection factors are:
    (a) The responsiveness of the proposal to the objective, as 
described in the

[[Page 35523]]

prospectus, of protecting, conserving, and preserving resources of the 
park area. A subfactor under this principal factor shall be how the 
offeror proposes to conduct its concession operations in an 
environmentally enhancing manner through, among other programs and 
activities, energy conservation, waste reduction, and recycling;
    (b) The responsiveness of the proposal to the objective, as 
described in the prospectus, of providing necessary, appropriate and 
quality visitor services at reasonable rates;
    (c) The experience and related background of the offeror, including 
the past performance and expertise of the offeror in providing the same 
or similar visitor services as those to be provided under the 
concession contract;
    (d) The financial capability of the offeror to carry out its 
proposal; and
    (e) The amount of the proposed franchise fee and/or other forms of 
financial consideration to the Director. However, consideration of 
higher revenue to the United States will be subordinate to the 
objectives of protecting, conserving, and preserving resources of the 
park area and of providing necessary and appropriate visitor services 
to the public at reasonable rates. The Director must establish the 
minimum franchise fee stated in the prospectus in accordance with these 
objectives. The Director may consider a proposed franchise fee higher 
than the established minimum if the Director determines that the 
proposed higher franchise fee is consistent with these objectives.


Sec. 51.21  How will the Director apply the five selection factors and 
select the best proposal?

    (a) Except as indicated in paragraph (b) of this section, the first 
four principal selection factors will have equal weight and relative 
importance in the selection. The Director will assess proposals under 
these four principal selection factors as ``unacceptable,'' ``fair,'' 
``good,'' or ``excellent'' on the basis of a narrative explanation, 
discussing subfactors when applicable. The Director will then determine 
the best proposal taking into account the assessments under each of the 
first four selection factors and the narrative explanation as to the 
reasons for each assessment.
    (b) If two or more proposals are assessed as substantially equal 
with respect to qualifying as the best proposal after the Director 
applies the first four principal selection factors, the Director will 
select as the best proposal the proposal that the Director determines 
credibly offers the most substantial, comprehensive and effective 
program for environmental enhancement, unless the Director determines 
that another substantially equal proposal provides, through an offer of 
a higher than the minimum franchise fee, substantially greater benefits 
for the preservation of the resources of the park area. In this case, 
the Director will select as the best proposal that proposal that 
provides the higher franchise fee and will dedicate the higher portion 
of the franchise fee for expenditure only on park resource protection 
programs.
    (c) If the Director determines that none of the otherwise 
substantially equal proposals credibly offers to provide a more 
substantial, comprehensive and effective program for environmental 
enhancement, the Director will evaluate the applicable proposals under 
the fifth principal selection factor to determine the best proposal, 
subject to the limitations stated in such factor.


Sec. 51.22  When will the Director apply secondary factors?

    If the Director, even after applying the fifth principal selection 
factor, assesses two or more proposals as substantially equal with 
respect to qualifying as the best proposal, the Director will apply any 
secondary selection factors described in the prospectus to select the 
best proposal. The secondary factors may include, to the extent 
otherwise permissible by law, the extent to which a proposal calls for 
the employment of Indians (including Native Alaskans) and involvement 
of businesses owned by Indians, Indian tribes, or Native Alaskans in 
operations under the concession contract.


Sec. 51.23  How will the Director select the best proposal if two or 
more proposals are assessed as substantially equal after the Director 
has applied the principal and secondary factors?

    (a) If, after the Director has applied the principal and any 
secondary selection factors, the Director still assesses two or more 
proposals as substantially equal with respect to qualifying as the best 
proposal, and if the prospectus does not identify an additional 
selection procedure, the Director will require the submission of ``best 
and final'' proposals from the offerors that submitted the 
substantially equal assessed proposals. Based on the ``best and final'' 
proposals, the Director will select for award of the concession 
contract the offeror that submitted the best final proposal as 
determined by the Director. In making this determination, the Director 
will take into account the principal selection factors, including any 
subfactors, any secondary factors, and the purposes, policies and 
objectives of this part.
    (b) If, after the Director has applied the principal and any 
secondary selection factors, the Director still assesses two or more 
proposals as substantially equal with respect to qualifying as the best 
proposal, and if the prospectus does identify an additional selection 
procedure, the Director will follow the specified procedure.


Sec. 51.24  What happens if a proposal is rated ``unacceptable'' under 
any of the first four principal selection factors or if the offeror is 
not a qualified person?

    The Director must reject any proposal received, including a 
proposal from a preferred offeror and regardless of the franchise fee 
offered, if the Director determines the proposal to be ``unacceptable'' 
under any of the first four principal selection factors. The Director 
must reject any proposal received, including a proposal from a 
preferred offeror and regardless of the franchise fee offered, if the 
Director determines that the offeror is not a qualified person as 
defined in this part.


Sec. 51.25  Must the Director award the concession contract that is set 
forth in the prospectus?

    (a) Except for incorporating into the concession contract 
appropriate elements of the best proposal, the Director must not award 
a concession contract which materially amends or does not incorporate 
the terms and conditions of the concession contract as set forth in the 
prospectus, unless the Director determines that:
    (1) The modification is necessary for the protection of visitors or 
the resources and values of the park area; and
    (2) The modification does not provide a financial benefit to the 
selected offeror.
    (b) If the Director wishes to make material modifications that are 
of financial benefit to the offeror, the Director must cancel and 
resolicit the concession contract under this part with the modified 
terms and conditions.


Sec. 51.26  Does this part limit the authority of the Director?

    Nothing in this part may be construed as limiting the authority of 
the Director at any time to determine whether to solicit or award a 
concession contract, to terminate a solicitation, or to terminate a 
concession contract in accordance with its terms.

[[Page 35524]]

Sec. 51.27  When must the selected offeror execute the concession 
contract?

    The selected offeror must execute the concession contract promptly 
after selection of the best proposal and within the time period 
established by the Director. If the selected offeror fails to execute 
the concession contract in this period, the Director may select another 
responsive proposal or may cancel the selection and resolicit the 
concession contract.


Sec. 51.28  After the selected offeror executes the concession 
contract, when may the Director execute the concession contract?

    Before awarding a concession contract with anticipated annual gross 
receipts in excess of $5,000,000 or of more than 10 years in duration, 
including, but not limited to, such contracts awarded non-competitively 
by the Director pursuant to subpart D of this part, the Director must 
submit the concession contract to the Committee on Resources of the 
House of Representatives and the Committee on Energy and Natural 
Resources of the Senate. The Director must not award any such 
concession contract until sixty days after such submission. Award of 
these contracts may not be made without the Director's written 
approval. The Director may not delegate this approval except to a 
Deputy Director or an Associate Director.

Subpart D--Non-Competitive Award of Concession Contracts


Sec. 51.29  May the Director extend an existing concession contract 
without a public solicitation?

    Notwithstanding the public solicitation requirements of this part, 
the Director may award non-competitively an extension of an existing 
concession contract to the existing concessioner for additional terms 
not to exceed three years in the aggregate. The Director may award such 
an extension only if the Director determines that the extension is 
necessary to avoid interruption of visitor services. Before awarding 
such a contract extension, the Director must take all reasonable and 
appropriate steps to consider alternatives to avoid an interruption of 
visitor services.


Sec. 51.30  May the Director award a temporary concession contract 
without a public solicitation?

    Notwithstanding the public solicitation requirements of this part, 
the Director may award non-competitively a temporary concession 
contract for terms not to exceed three years in the aggregate to any 
qualified person if the Director determines that this award is 
necessary to avoid interruption of visitor services. Before awarding a 
temporary contract, the Director must take all reasonable and 
appropriate steps to consider alternatives to avoid an interruption of 
visitor services. The holder of a temporary concession contract will 
not obtain the rights of a preferred offeror as described in this part 
or otherwise obtain a possible right of preference to a concession 
contract which replaces a temporary contract unless the Director 
determines both that relevant circumstances legally require the 
recognition of a preferred offeror under the terms of the 1998 Act, 
and, that the holder of the temporary contract otherwise meets the 
preferred offeror requirements of this part.


Sec. 51.31  Are there any other circumstances in which the Director may 
award a concession contract without public solicitation?

    Notwithstanding the public solicitation requirements of this part, 
the Director may award a concession contract non-competitively to any 
qualified person if the Director determines both that such an award is 
otherwise consistent with the requirements of this part and that 
extraordinary circumstances exist under which compelling and equitable 
considerations require the award of the concession contract to a 
particular qualified person in the public interest. The Director must 
publish a notice of his intention to award a concession contract under 
these circumstances and the reasons for the proposed award in the 
Federal Register at least 30 days before the concession contract is 
awarded. In addition, the Director also must notify the Committee on 
Energy and Natural Resources of the Senate and the Committee on 
Resources of the House of Representatives at least 30 days before the 
contract is awarded. The Director must personally approve of any such 
notifications or award.

Subpart E--Right of Preference


Sec. 51.32  Does the existence of a preferred offeror and a possible 
right of preference limit the authority of the Director to establish 
the terms of a concession contract?

    The existence of a preferred offeror and a possible right of 
preference does not limit the authority of the Director to establish, 
in accordance with this part, the terms and conditions of a concession 
contract, including but not limited to, terms and conditions that 
modify the terms and conditions of a prior concession contract.


Sec. 51.33  What three conditions must be met before the Director 
determines that a prior concessioner is a preferred offeror?

    A prior concessioner is a preferred offeror if the Director 
determines that the following three conditions are met:
    (a) The applicable new concession contract provides only for the 
continuation of the visitor services authorized or required under a 
prior concession contract. The visitor services to be continued under 
the new contract may be expanded or diminished in scope but may not 
materially differ in nature and type from those authorized or required 
under the prior concession contract;
    (b) The applicable prior concession contract is a qualified 
concession contract, determined under this subpart; and
    (c) The applicable prior concessioner was a satisfactory 
concessioner during the term of its prior concession contract, 
determined under this subpart.


Sec. 51.34  How will the Director determine that a concession contract 
is a qualified concession contract?

    A prior concession contract is a qualified concession contract if 
the Director determines either that:
    (a) The new concession contract that is to replace the prior 
concession contract is estimated to result in, as determined by the 
Director, gross annual receipts of less than $500,000 in the first 
calendar year of its term; or
    (b) The prior concession contract was an outfitter and guide 
concession contract and the new concession contract that is to replace 
the prior contract is an outfitter and guide concession contract.


Sec. 51.35  How will the Director determine that a concession contract 
is an ``outfitter and guide concession contract''?

    The Director will determine that a concession contract is an 
``outfitter and guide concession contract'' if the Director determines 
both that:
    (a) The concession contract solely authorizes or requires (except 
for park area access purposes) the conduct of specialized outdoor 
recreation guide services in the backcountry of a park area; and
    (b) The conduct of operations under the concession contract 
requires employment of specially trained and experienced guides to 
accompany park visitors who otherwise may not have the skills and 
equipment to engage in the activity and to provide a safe and enjoyable 
experience for these visitors.

[[Page 35525]]

Sec. 51.36  What are some examples of outfitter and guide concession 
contracts?

    Examples of outfitter and guide concession contracts may include, 
but are not limited to, concession contracts which solely authorize or 
require the conduct of guided river running, hunting (where otherwise 
lawful in a park area), fishing, horseback, camping, and mountaineering 
activities in the backcountry of a park area.


Sec. 51.37  What facts and circumstances will the Director take into 
account when determining if a concession contract is an outfitter and 
guide concession contract?

    In determining whether a concession contract is an outfitter and 
guide contract, the Director will take into account the terms and 
related facts and circumstances of the concession contract and the 
actual operations conducted by the prior concessioner under a prior 
contract. The Director will also take into account the physical and 
geographic features of the applicable park area. If a prior 
concessioner provided visitor services beyond the scope of the 
outfitter and guide services authorized or required by its prior 
concession contract, the Director will determine that the 
concessioner's prior concession contract is not an outfitter and guide 
concession contract. The only exception to this determination is if the 
Director concludes that the additional visitor services were negligible 
in nature.


Sec. 51.38  What are some circumstances that will indicate that 
outfitter and guide operations are conducted in the backcountry?

    Circumstances which indicate that outfitter and guide operations 
are conducted in the backcountry of a park area typically include, but 
are not limited to, the fact that:
    (a) The operations occur in areas remote from roads and developed 
areas;
    (b) The operations are conducted within a designated natural area 
of a park area;
    (c) The operations occur in areas which are inaccessible by 
motorized vehicle;
    (d) The operations occur in areas where search and rescue support 
is not readily available; or
    (e) All or a substantial portion of the operations occur in 
designated or proposed wilderness areas.


Sec. 51.39  If the concession contract grants a compensable interest in 
real property improvements, will the Director find that the concession 
contract is an outfitter and guide concession contract?

    The Director will not find that a concession contract is an 
outfitter and guide contract if the contract grants any compensable 
interest in real property improvements on lands owned by the United 
States within a park area.


Sec. 51.40  Are there exceptions to this compensable interest 
prohibition?

    Two exceptions to this compensable interest prohibition exist:
    (a) The prohibition will not apply to real property improvements 
lawfully constructed by a concessioner with the written approval of the 
Director in accordance with the express terms of a 1965 Act concession 
contract; and
    (b) The prohibition will not apply to real property improvements 
constructed and owned in fee simple by a concessioner or owned in fee 
simple by a concessioner's predecessor before the land on which they 
were constructed was included within the boundaries of the applicable 
park area.


Sec. 51.41  Who will make the determination that a concession contract 
is an outfitter and guide contract?

    Only the Director personally, or a Deputy or Associate Director 
authorized by the Director, will make the determination that a 
concession contract is or is not an outfitter and guide contract as 
described in this section.


Sec. 51.42  How will the Director determine if a prior concessioner was 
satisfactory for purposes of this part?

    (a) To be a satisfactory concessioner for the purposes of this 
part, the Director must determine that a prior concessioner operated 
satisfactorily on an overall basis during the term of a prior 
concession contract, including extensions of the contract. The Director 
will base this determination on annual evaluations made by the Director 
during the term of the applicable prior concession contract and other 
relevant facts and circumstances,
    (b) Among other considerations, the Director will determine that a 
concessioner did not operate satisfactorily during the term of the 
prior contract if an annual evaluation of a prior concessioner was less 
than satisfactory for any year of operation under a prior contract, 
and, any additional annual evaluation was also less than satisfactory. 
In addition, the Director will determine that a concessioner did not 
operate satisfactorily during the term of the prior contract if the 
prior concessioner's annual evaluation in either of the last two years 
of the term of the prior contract was less than satisfactory.


Sec. 51.43  Will a prior concessioner that has operated for less than 
the entire term of a concession contract be considered a satisfactory 
operator?

    The Director will determine that a prior concessioner has not 
operated satisfactorily on an overall basis during the term of a prior 
contract if that concessioner has or will have operated under a prior 
concession contract for less than two years under a concession contract 
with a term of ten years or less than four years under a concession 
contract with a term of more than ten years. For purposes of this 
section, a new concessioner's first day of operation under an assigned 
concession contract will be the day the Director approves the 
assignment pursuant to this part. If the Director determines that the 
assignment was compelled by circumstances beyond the control of the 
assigning concessioner, the Director may make an exception to this 
requirement.


Sec. 51.44  May the Director determine that a prior concessioner has 
not operated satisfactorily after a prospectus is issued?

    If circumstances warrant, the Director may determine that a prior 
concessioner has not operated satisfactorily on an overall basis during 
the term of a prior contract after a prospectus for a new contract has 
been issued. In this event, the prospectus must be amended or canceled 
and reissued without recognition of a preferred offeror or a possible 
right of preference to the concession contract.


Sec. 51.45  What happens to a right of preference in the event of 
termination of a concession contract for unsatisfactory performance or 
other breach?

    Nothing in this part will limit the right of the Director to 
terminate a concession contract pursuant to its terms at any time for 
unsatisfactory performance or otherwise. If a concession contract is 
terminated for unsatisfactory performance or other breach, Director 
will not determine the terminated concessioner, even if otherwise 
qualified, to be a preferred offeror. The fact that the Director may 
not have terminated a prior concession contract for unsatisfactory 
performance or other breach will not limit the authority of the 
Director to determine that a prior concessioner did not operate 
satisfactorily during the term of a prior concession contract.


Sec. 51.46  May the Director grant a right of preference except in 
accordance with this part?

    The Director may not grant a concessioner or any other person a 
right of preference or any other form of

[[Page 35526]]

entitlement of any nature to a new concession contract, except in 
accordance with this part. The right of preference described by this 
part is a statutory right. The Director will not include in concession 
contracts as a matter of contract right a preference or other form of 
entitlement of any nature to a new concession contract.


Sec. 51.47  How will I know if a preferred offeror exists?

    If the Director has determined that a preferred offeror exists 
under the requirements of this subpart, the Director will identify the 
preferred offeror in the applicable prospectus and describe the 
preferred offeror's possible right of preference.


Sec. 51.48  What solicitation, selection and award procedures apply 
when a preferred offeror exists?

    The solicitation, selection and award procedures described in this 
part will apply to the solicitation, selection and award of proposals 
for concession contracts for which a preferred offeror exists, except 
as modified by this subpart.


Sec. 51.49  What must a preferred offeror do before he or she may 
exercise a right of preference?

    A preferred offeror must submit a responsive proposal pursuant to 
the terms of an applicable prospectus if the preferred offeror wishes 
to exercise a right of preference.


Sec. 51.50  What happens if the preferred offeror does not submit a 
responsive proposal?

    If the preferred offeror fails to submit a responsive proposal, the 
preferred offeror may not exercise a right of preference. The 
concession contract will be awarded to the offeror submitting the best 
responsive proposal.


Sec. 51.51  What is the process if the Director determines that the 
best responsive proposal was not submitted by the preferred offeror?

    If the Director determines that a proposal other than the proposal 
of a preferred offeror is the best proposal submitted, and if a 
preferred offeror submitted a responsive proposal, then the Director 
must permit the preferred offeror to amend its proposal. The amended 
proposal must meet the better terms and conditions of the best proposal 
as determined by the Director. If the preferred offeror duly amends its 
proposal within the time period allowed by the Director, and the 
Director determines that the amended proposal is at least equal to the 
best proposal, and the Director determines that the preferred offeror 
is a qualified person as defined in this part with respect to carrying 
out the terms and conditions of its amended proposal, then the Director 
must select the preferred offeror for award of the contract upon the 
amended terms and conditions.


Sec. 51.52  What if the preferred offeror does not timely amend its 
proposal to meet the terms and conditions of the best proposal or is 
not a qualified person to carry out the terms of the amended proposal?

    If a preferred offeror does not amend its proposal to meet the 
terms and conditions of the best proposal within the time period 
allowed by the Director, the Director will award the contract to the 
offeror submitting the best proposal. Additionally, if the Director 
finds that the preferred offeror is not a qualified person with respect 
to carrying out the terms and conditions of its amended proposal, the 
Director will award the contract to the offeror submitting the best 
proposal.


Sec. 51.53  What will the Director do if a selected preferred offeror 
does not timely execute the new concession contract?

    If a selected preferred offeror fails to execute the concession 
contract in the time period specified by the Director, the Director 
either will select for award of the concession contract the offeror 
that submitted the best proposal, or will resolicit the concession 
contract without recognition of a preferred offeror or a possible right 
of preference.


Sec. 51.54  What happens to a possible right of preference if the 
Director receives no responsive proposals?

    If the Director receives no responsive proposals to a prospectus 
for a concession contract for which a preferred offeror exists, the 
Director may resolicit the concession contract. No preferred offeror 
will be recognized and no possible right of preference will apply to 
the resolicited concession contract unless the contract is resolicited 
upon terms and conditions that are materially more favorable to 
offerors than those contained in the original contract.


Sec. 51.55  How do I appeal a decision of the Director that a prior 
concessioner is not a preferred offeror?

    (a) If the Director determines that a prior concessioner is not a 
preferred offeror, the prior concessioner may appeal this determination 
to the Director. This appeal must be received by the Director in 
writing no later than thirty days after the date of the determination. 
Where applicable, the Director will give notice of this appeal to all 
potential offerors that requested a prospectus. A prior concessioner 
that made an appeal must submit a responsive proposal in response to a 
prospectus if its appeal is pending as of the date of submission for 
proposals as set forth in the prospectus. If the prior concessioner 
fails to submit a timely responsive proposal, the Director must 
consider the appeal moot as no right of preference would apply to the 
concession contract under this part.
    (b) The Director must consider this appeal personally or must 
authorize a Deputy or Associate Director to consider the appeal. 
However, the deciding official considering the appeal may not be the 
official who made the disputed determination. The deciding official 
must prepare a written decision on the appeal, taking into account the 
content of the appeal, other written information available, and the 
requirements of this part. The written decision on the appeal must be 
issued before the Director selects the best proposal submitted under 
the prospectus. If the appeal results in a prior concessioner being 
determined as a preferred offeror, then the prior concessioner will 
have a possible right of preference to the contract as described in and 
subject to the conditions of this part including, but not limited to, 
the obligation to submit a responsive proposal.
    (c) A prior concessioner will not have exhausted its administrative 
remedies with respect to the failure of the Director to determine it to 
be a preferred offeror until such time as the Director issues a written 
decision in response to an appeal submitted pursuant to this section.

Subpart F--Leasehold Surrender Interest


Sec. 51.56  What special terms must I know to understand leasehold 
surrender interest?

    To understand leasehold surrender interest, you must refer to these 
definitions, applicable in the singular or the plural, whenever these 
terms are used in this part:
    A capital improvement is a structure, fixture, or non-removable 
equipment provided by a concessioner under the terms of a concession 
contract that is permanently affixed to the land so as to be part of 
the realty. Except as otherwise may be specified in this part, a 
capital improvement does not include any interest in land. 
Additionally, except as otherwise may be specified in this part, a 
capital improvement does not include any interest in personal property 
of any kind including, but not limited to, vehicles, boats, trailers, 
or other objects not permanently affixed to the real estate regardless 
of the size of such objects. Concession contracts may

[[Page 35527]]

further describe, consistent with the limitations of this part and the 
1998 Act, the nature and type of specific capital improvements in which 
a concessioner may obtain a leasehold surrender interest.
    Construction cost of a capital improvement means the total of the 
eligible direct and indirect costs necessary for constructing or 
installing the capital improvement as determined by the Director, other 
than ineligible costs, that are included in the concessioner's basis in 
the capital improvement for federal income tax purposes.
    Consumer Price Index means the national ``Consumer Price Index--All 
Urban Consumers'' published by the Department of Labor. If this index 
ceases to be published, the Director will designate another regularly 
published cost-of-living index approximating the national Consumer 
Price Index.
    Depreciation means the loss of value in a capital improvement from 
physical deterioration and/or functional obsolescence as evidenced by 
the condition and prospective serviceability of the capital improvement 
in comparison with a new unit of like kind.
    Eligible direct costs means the sum of all costs (in amounts no 
higher than those prevailing in the locality of the project), of the 
construction contractor that both are necessary for the construction or 
installation of the capital improvement as determined by the Director 
and are typically elements of a construction contract or fixture 
installation contract. Eligible direct costs may include, but are not 
limited to, the costs of material, labor, contractor's (and 
subcontractors') profit and overhead, and the construction contractor's 
job supervision. Eligible direct costs also may include performance 
bonds and insurance for worker's compensation, fire, liability, and 
unemployment. Additionally, eligible direct costs may include the costs 
of building permits, equipment used in construction, security during 
construction, contractor's shack and temporary fencing, material 
storage facilities, installing power lines and utilities.
    Eligible indirect costs means the sum of all other costs (in 
amounts no higher than those prevailing in locality of the project) 
necessary for the construction or installation of a capital improvement 
as determined by the Director. Eligible indirect costs may include, but 
are not limited to, design services (schematic design, design 
development, construction documents and cost estimating) and 
environmental and other studies if required by the Director. Eligible 
indirect costs may also include the cost of carrying the investment in 
the capital improvement until its substantial completion (as determined 
by the Director); the cost of insuring the capital improvement until 
the date of its substantial completion (as determined by the Director); 
and direct, on-site construction inspection expenses incurred by the 
concessioner.
    Fixtures and non-removable equipment means manufactured items of 
personal property of independent form and utility necessary for the 
basic functioning of a capital improvement that are permanently 
installed in or on land or a capital improvement so as to become part 
of the real estate (e.g., heating, air conditioning and ventilation 
equipment, tubs, street lamps, fire protection systems, etc.). Fixtures 
and non-removable equipment do not include equipment that can be 
disconnected and relocated without substantial damage to a structure 
(e.g. computer printers, portable heating units, table lamps, 
chandeliers, televisions, trade fixtures, trade telephones, vacuum 
cleaners, etc.). Fixtures and non-removable equipment do not include 
building materials (e.g., wallboard, flooring, concrete, cinder blocks, 
steel beams, studs, window frames, windows, rafters, roofing, framing, 
siding, lumber, insulation, foundations, electric wiring, water and gas 
piping, wallpaper, paint, etc.). Except as otherwise indicated, the 
term ``fixture'' as used elsewhere in this part includes the term 
``non-removable equipment.''
    Ineligible costs are direct and indirect costs that may be 
associated with the construction or installation of a capital 
improvement but are not approved by the Director. Ineligible costs also 
include all administrative, overhead and other costs of the 
concessioner (other than direct, on-site construction inspection 
expenses). Ineligible costs further include any otherwise eligible 
costs that are not included in the concessioner's basis in the capital 
improvements for federal income tax purposes.
    Leasehold surrender interest solely means a right to payment in 
accordance with this part for related capital improvements that a 
concessioner makes within a park area on lands owned by the United 
States if the related capital improvements are made both pursuant to 
this part and under the terms and conditions of an applicable 
concession contract. The existence of a leasehold surrender interest 
does not give the concessioner, or any other person, any right to 
conduct business in a park area, to occupy or utilize the related 
capital improvements, or to prevent the Director or another person from 
utilizing the related capital improvements. The existence of a 
leasehold surrender interest does not include any interest in the land 
on which the related capital improvements are located.
    Leasehold surrender interest concession contract means a concession 
contract that provides for leasehold surrender interest in capital 
improvements.
    Leasehold surrender interest value means the amount of compensation 
a concessioner is entitled to be paid for a leasehold surrender 
interest in accordance with this part. Unless otherwise provided by the 
terms of a leasehold surrender interest concession contract, leasehold 
surrender interest value generally is an amount equal to:
    (1) The approved initial construction cost of the related capital 
improvement,
    (2) Adjusted by (increased or decreased) the same percentage 
increase or decrease as the percentage increase or decrease in the 
Consumer Price Index from the date the Director approves the completion 
of the construction or installation of the related capital improvement 
to the date of payment of the leasehold surrender interest value,
    (3) Less depreciation of the related capital improvement on the 
basis of its condition as of the date of termination or expiration of 
the applicable leasehold surrender interest concession contract.
    Major rehabilitation means a planned, comprehensive rehabilitation 
of an existing structure:
    (1) The Director determines is completed within eighteen months 
from start of the rehabilitation work (unless a longer period of time 
is approved by the Director in special circumstances); and
    (2) The construction cost of which exceeds the pre-rehabilitation 
value of the structure. Major rehabilitation does not include expenses 
resulting from routine maintenance and repair.
    Pre-rehabilitation value of a structure means the replacement cost 
of the structure less depreciation.
    Real property improvements means real property other than land, 
including, but not limited to, capital improvements.
    Related capital improvement or related fixture means a capital 
improvement in which a concessioner has or seeks to obtain a leasehold 
surrender interest.
    Replacement cost means the estimated cost to reconstruct, at 
current prices, an existing structure with utility equivalent to the 
existing structure,

[[Page 35528]]

using modern materials and current standards, design and layout.
    Structure means a building, dock, or similar edifice, excluding 
fixtures, permanently affixed to the land so as to be part of the real 
estate. A structure may include both constructed infrastructure (e.g., 
water, power and sewer lines) and constructed site improvements (e.g., 
paved roads, retaining walls, sidewalks, paved driveways, paved parking 
areas) that are permanently affixed to the land so as to be part of the 
real estate and that are in direct support of the use of a building, 
dock, or similar edifice. Landscaping and plantings are not a structure 
or part of a structure. Interior furnishings not attached to the 
structure so as to be part of the real estate are not part of the 
structure.


Sec. 51.57  How do I obtain a leasehold surrender interest?

    Leasehold surrender interest concession contracts will contain 
appropriate leasehold surrender interest terms and conditions 
consistent with this part. A concessioner may obtain a leasehold 
surrender interest in capital improvements only if the concessioner 
complies both with the requirements of this part and the terms and 
conditions of an applicable leasehold surrender interest concession 
contract.


Sec. 51.58  If a concessioner does not comply with the requirements of 
this part or the terms and conditions of a leasehold surrender interest 
concession contract, what happens?

    If a concessioner does not comply with the leasehold surrender 
interest requirements of this part or the applicable terms and 
conditions of a leasehold surrender interest concession contract, the 
concessioner will not obtain a leasehold surrender interest or any 
compensable interest in capital improvements. Any capital improvements 
so constructed or installed by the concessioner will be the property of 
the United States without a right of compensation in any person.


Sec. 51.59  Why may the Director authorize the construction or 
installation of a capital improvement?

    The Director may only authorize or require a concessioner to 
construct capital improvements on park lands for the conduct by the 
concessioner of necessary and appropriate visitor services as 
determined by the Director, including, the construction of capital 
improvements necessary for support of the concessioner's visitor 
services.


Sec. 51.60  What must a concessioner do before beginning to construct 
or install a capital improvement in which the concessioner seeks a 
leasehold surrender interest?

    Before beginning to construct or to install any capital improvement 
in which the concessioner seeks to obtain a leasehold surrender 
interest, the concessioner must obtain written approval from the 
Director in accordance with the terms of its leasehold surrender 
interest concession contract. The request for approval must include 
appropriate plans and specifications for the capital improvement and 
any other information that the Director may specify. The request must 
also include an estimate of the total construction cost of the capital 
improvement. The estimate of the total construction cost must specify 
all elements of the cost in such detail as is necessary to permit the 
Director to determine that they are elements of construction cost as 
defined in this part. Among other matters, the Director must not 
approve the construction or installation of a capital improvement to 
the extent that the Director considers that the estimate of total 
construction cost is unreasonable or if the Director finds that the 
estimate of total construction cost contains ineligible costs. The 
requirements of this section also apply to any change orders to a 
capital improvement project previously approved by the Director and to 
any proposed addition to the capital improvement made after completion 
of its initial construction.


Sec. 51.61  What must a concessioner do after substantial completion of 
the capital improvement?

    Upon substantial completion of the construction or installation of 
a capital improvement, or an addition to an existing capital 
improvement, in which the concessioner seeks a leasehold surrender 
interest, the concessioner must provide the Director a detailed 
financial report. The detailed financial report must be supported by 
actual invoices of the capital improvement's construction cost together 
with, if requested by the Director, a written certification from a 
certified public accountant. The financial report must document and any 
requested certification must state:
    (a) That all the elements of the construction cost were incurred by 
the concessioner;
    (b) That all such elements are eligible under the definition of 
construction cost as defined in Sec. 51.56; and
    (c) That all such elements are included in the concessioner's basis 
in the capital improvement for purposes of its federal income tax 
returns.


Sec. 51.62  How will the Director determine the construction cost for 
purposes of leasehold surrender interest value?

    After receiving the detailed financial report (and certification, 
if requested), from the concessioner, the Director will review the 
report, certification and other information as appropriate. The 
Director will then determine in writing the construction cost that is 
to be recognized as the construction cost of the capital improvement 
for purposes of leasehold surrender interest value, and where 
applicable, identify any ineligible costs. If the Director's 
determination differs from the concessioner's report, the Director will 
state the reasons for the differences.


Sec. 51.63  May the concessioner appeal the Director's determination of 
construction cost?

    If the concessioner disagrees with the Director's determination of 
construction cost, the concessioner may appeal the determination to an 
official designated by the Director. The appeal must be in writing and 
made within thirty days of receipt of the initial determination. The 
designated official will review the concessioner's written appeal and 
the record of the matter and make a final determination as to the 
proper construction cost in accordance with this part. Such 
determination will be the final administrative determination of the 
construction cost of capital improvements for purposes of this part or 
otherwise. If no timely appeal is made, the Director's initial 
determination will be the final determination of the construction cost 
of a capital improvement. The Director may at any time review a 
construction cost determination if the Director has reason to believe 
that it was based on false, misleading or incomplete information.


Sec. 51.64  What actions may or must the concessioner take with respect 
to a leasehold surrender interest?

    The concessioner:
    (a) May encumber a leasehold surrender interest in accordance with 
this part, but only for the purposes specified in this part;
    (b) Where applicable, must transfer or relinquish in accordance 
with this part its leasehold surrender interest in connection with any 
assignment, termination or expiration of the concession contract; and
    (c) May waive, relinquish or agree to an alternative value for a 
leasehold surrender interest.

[[Page 35529]]

Sec. 51.65  Will leasehold surrender interest be extinguished by 
expiration or termination of a leasehold surrender interest concession 
contract or may it be taken for public use?

    A leasehold surrender interest may not be extinguished by the 
expiration or termination of a concession contract and a leasehold 
surrender interest may not be taken for public use except on payment of 
just compensation as described in this part or in an applicable 
leasehold surrender interest concession contract. Payment of leasehold 
surrender interest value pursuant to this part or the terms of an 
applicable leasehold surrender interest concession contract will 
constitute the payment of just compensation for a leasehold surrender 
interest within the meaning of this part and for all other purposes.


Sec. 51.66  How will a new concession contract awarded to a prior 
concessioner treat a leasehold surrender interest obtained under a 
prior concession contract?

    When a prior concessioner under a leasehold surrender interest 
concession contract seeks and is awarded a new concession contract by 
the Director, and the new concession contract continues a leasehold 
surrender interest in related capital improvements, then the 
concessioner's leasehold surrender interest value (established as of 
the date of expiration or termination of its prior concession contract) 
in the related capital improvements will be continued as the initial 
value (instead of initial construction cost) of the concessioner's 
leasehold surrender interest under the terms of the new concession 
contract. No compensation will be due the concessioner for its 
leasehold surrender interest or otherwise in these circumstances except 
as provided by the new concession contract.


Sec. 51.67  How is a prior concessioner who is not awarded a new 
concession contract paid for a leasehold surrender interest?

    When a prior concessioner does not seek or is not awarded a new 
concession contract after expiration or termination of a leasehold 
surrender interest concession contract, the prior concessioner will be 
entitled to be paid its leasehold surrender interest value as defined 
in this part or in an applicable concession contract. The prior 
concessioner will not be required to transfer or otherwise relinquish 
its leasehold surrender interest until such time as the prior 
concessioner is paid the leasehold surrender interest value. The date 
for payment of the leasehold surrender interest value will be no later 
than twelve months after the date of expiration or termination of the 
leasehold surrender contract if the payment is to be made by a new 
concessioner and no later than twenty-four months after the date of 
expiration or termination if the payment is to be made by the Director. 
In such circumstances, the depreciation of the related capital 
improvements will be established as of the date of the expiration or 
termination of the concession contract for leasehold surrender interest 
value purposes. However, the Consumer Price Index adjustment to the 
leasehold surrender interest will continue until the date of payment of 
the leasehold surrender interest value.


Sec. 51.68  When a new concessioner pays a prior concessioner for a 
leasehold surrender interest, what is the leasehold surrender interest 
in the related capital improvements for purposes of a new concession 
contract?

    A new concessioner that pays a prior concessioner for a leasehold 
surrender interest will have a leasehold surrender interest in the 
related capital improvements on a unit by unit basis under the terms of 
a new leasehold surrender interest contract. Instead of initial 
construction cost, the initial value of such leasehold surrender 
interest will be the leasehold surrender interest value that the new 
concessioner was required to pay the prior concessioner.


Sec. 51.69  What is the process to determine the leasehold surrender 
interest value when a new concessioner is to pay a prior concessioner 
for a leasehold surrender interest?

    Leasehold surrender interest concession contracts must contain 
provisions that describe the process by which a prior concessioner and 
a new concessioner resolve a dispute over the prior concessioner's 
leasehold surrender interest value and/or provisions that describe a 
process by which the prior concessioner and the Director determine the 
prior concessioner's leasehold surrender interest value. For purposes 
of this part, the Director's prior determinations of construction cost 
in accordance with this part are final and not subject to arbitration. 
The deduction for depreciation of the related capital improvements will 
be subject to arbitration. The arbitration process will be similar to 
the appraiser panel procedure described in this part for resolving a 
dispute between the Director and a concessioner as to the valuation of 
possessory interest. Except for values established as a result of an 
appraiser panel process, a new concessioner must not agree with a prior 
concessioner as to the prior concessioner's leasehold surrender 
interest value in the aggregate or on a unit by unit basis without the 
prior written approval of the Director. The Director's approval ensures 
that the leasehold surrender interest value is consistent with the 
terms and conditions of the prior concession contract. A new 
concessioner must permit the Director to assist it in the resolution of 
a dispute over a prior concessioner's leasehold surrender interest 
value to the extent requested by the Director.


Sec. 51.70  May the concessioner gain additional leasehold surrender 
interest by adding to a structure in which the concessioner has a 
leasehold surrender interest?

    A concessioner that adds, with the approval of the Director, a new 
structure (e.g., a new wing to an existing building or an extension of 
an existing road or sidewalk, etc.) to an existing structure in which 
the concessioner has a leasehold surrender interest will increase its 
leasehold surrender interest in the related structure, effective as of 
the date of completion of the new structure, by the construction cost 
of the new structure. The Consumer Price Index adjustment for leasehold 
surrender interest value purposes will apply to the construction cost 
of the addition as of the completion of the addition as determined by 
the Director. Approvals for additions to structures are subject to the 
same requirements and conditions applicable to new construction as 
described in this part. If the advance approval required by this 
section is not obtained by the concessioner, no increase in a 
concessioner's leasehold surrender interest will be recognized.


Sec. 51.71  May the concessioner gain additional leasehold surrender 
interest by replacing a fixture in which the concessioner has a 
leasehold surrender interest?

    A concessioner that replaces an existing fixture in which the 
concessioner has a leasehold surrender interest with a like kind 
fixture will not increase its leasehold surrender interest as a result 
of the replacement. If the replacement fixture is not of like kind but 
is a substantial upgrade of the replaced fixture with respect to 
utility and function, and, if the construction cost of this replacement 
fixture exceeds the initial construction cost of the fixture to be 
replaced, all as determined by the Director, an increase to the 
concessioner's leasehold surrender interest will result. This increase 
will be the amount of the difference between the initial construction 
cost of the replaced fixture as determined by the Director and the 
construction cost of the

[[Page 35530]]

upgraded replacement fixture as determined by the Director. Approvals 
for replacement of fixtures are subject to the same requirements and 
conditions applicable to new construction or installation of a fixture 
as described in this part. In addition, where applicable, a 
concessioner must document to the satisfaction of the Director that a 
replacement fixture is upgraded within the meaning of this section and 
the initial constriction cost of the fixture to be replaced and the 
construction cost of the upgraded fixture. If the advance approval for 
a fixture replacement required by this section is not obtained by the 
concessioner, no increase in a concessioner's leasehold surrender 
interest will be recognized.


Sec. 51.72  Will a concessioner who undertakes a major rehabilitation 
of an existing structure in which the concessioner has a leasehold 
surrender interest increase its leasehold surrender interest?

    A concessioner who undertakes with the prior written approval of 
the Director a major rehabilitation of an existing structure in which 
the concessioner has a leasehold surrender interest will obtain 
additional leasehold surrender interest in the structure. This 
additional leasehold surrender interest will be established by adding 
the construction cost of the major rehabilitation as determined by the 
Director to the initial construction cost of the related structure, 
effective as of the date of completion of the major rehabilitation. 
Approval for a proposed major rehabilitation is subject to the same 
requirements and conditions as for new construction or installation of 
capital improvements as described in this part.


Sec. 51.73  Under what conditions will the Director authorize a 
concessioner to obtain a leasehold surrender interest in an existing 
capital improvement in which no leasehold surrender interest exists?

    The Director may not authorize a concessioner to obtain a leasehold 
surrender interest in existing fixtures in which there is no leasehold 
surrender interest (e.g., fixtures attached to an existing government 
building assigned by the Director to the concessioner). The Director 
may not authorize a concessioner to obtain a leasehold surrender 
interest in an existing structure in which there is no leasehold 
surrender interest, unless the concessioner undertakes a major 
rehabilitation of the structure approved in advance by the Director. If 
such an approved major rehabilitation is completed, the concessioner 
will have a leasehold surrender interest in the related structure. The 
initial construction cost of this leasehold surrender interest will be 
the construction cost of the major rehabilitation as determined by the 
Director. Depreciation for purposes of leasehold surrender interest 
value will apply to the entirety of the related structure.


Sec. 51.74  Will a concessioner receive new or additional leasehold 
surrender interest as a result of a rehabilitation that does not 
qualify as a major rehabilitation?

    Rehabilitation projects that do not qualify as major 
rehabilitations are considered as repair and maintenance of existing 
structures for which no new or additional leasehold surrender interest 
may be obtained.


Sec. 51.75  Is a concessioner required to maintain capital 
improvements, and if so, will the concessioner obtain a leasehold 
surrender interest in such repair and maintenance?

    A concession contract must require the concessioner to maintain in 
good condition through a comprehensive repair and maintenance program 
all of the concessioner's personal property used in the performance of 
the concession contract and all land, real property improvements, 
including capital improvements, and government personal property 
assigned to the concessioner by a concession contract. A concessioner 
will not obtain initial or additional leasehold surrender interest as a 
result of repair and maintenance. Concession contracts may contain 
provisions that require specified minimum levels of expenditures for 
repair and maintenance of personal property and real property 
improvements utilized by a concessioner. Concession contracts may also 
contain provisions that require establishment of repair and maintenance 
reserves by a concessioner dedicated to the repair and maintenance of 
personal property and real property improvements.

Subpart G--Possessory Interest


Sec. 51.76  If a prior concessioner is not awarded a new concession 
contract, how will a prior concessioner that has a possessory interest 
receive compensation for its possessory interest?

    A prior concessioner that has possessory interest in real property 
improvements pursuant to the terms of a 1965 Act concession contract, 
will, if the prior concessioner does not seek or is not awarded a new 
concession contract upon termination or expiration of its possessory 
interest concession contract, be entitled to receive compensation for 
its possessory interest in the amount and manner as described by the 
possessory interest contract and be entitled to receive all other 
compensation that the possessory interest contract may provide.


Sec. 51.77  If a prior concessioner is awarded a new concession 
contract, what happens to the concessioner's possessory interest?

    In the event a prior concessioner seeks and is awarded a new 
concession contract replacing a possessory interest concession 
contract, the prior concessioner will obtain a leasehold surrender 
interest in its existing possessory interest real property improvements 
under the terms of the new concession contract. This prior concessioner 
will carry over as the initial value of such leasehold surrender 
interest (instead of initial construction cost) an amount equal to the 
value of its possessory interest in real property improvements as of 
the expiration or other termination of its possessory interest contract 
as determined by the Director on a unit by unit basis. This leasehold 
surrender interest will apply to the concessioner's possessory interest 
real property improvements even if the real property improvements are 
not capital improvements as defined in this part. In the event that a 
prior concessioner had a possessory interest in only a portion of a 
related structure, depreciation of the related structure for purposes 
of leasehold surrender interest value will apply only to the portion of 
the structure to which the possessory interest applied.


Sec. 51.78  What is the process to be followed if there is a dispute 
between the prior concessioner and the Director as to the value of 
possessory interest?

    Unless other procedures are agreed to by the prior concessioner and 
the Director, in the event that a prior concessioner under a possessory 
interest concession contract is awarded a new concession contract and 
there is a dispute between the prior concessioner and the Director as 
to the value of such possessory interest in the aggregate or on a unit 
by unit basis, a panel of three licensed appraisers will establish the 
value or values. One of the appraisers will be selected by the 
concessioner, one of the appraisers will be selected by the Director, 
and the third appraiser will be selected by the initial two appraisers. 
The expenses of the third appraiser and other associated common costs 
of the proceeding will be borne equally by the concessioner and the 
Director. The panel may request presentations by the concessioner and 
the Director as to their positions on possessory interest value. The 
panel must conduct these

[[Page 35531]]

presentations informally without adjudicative procedures. The 
determination of values made by the panel will be binding on the 
concessioner and the Director. Judicial review of the panel's decision 
may be pursued by the concessioner or the Director only in the event of 
allegations of fraud, misconduct or misrepresentation.


Sec. 51.79  If a new concessioner is awarded the contract, what is the 
relationship between leasehold surrender interest and possessory 
interest?

    If a new concessioner is awarded a leasehold surrender interest 
concession contract and is required to pay a prior concessioner for 
possessory interest in real property improvements, then the new 
concessioner will have a leasehold surrender interest in the real 
property improvements under the terms of its new concession contract. 
The initial value of the leasehold surrender interest (instead of 
initial construction cost) will be an amount equal to the lower of the 
value of the possessory interest as of the termination or expiration of 
the possessory interest concession contract or the amount of money the 
new concessioner in fact paid the prior concessioner for its possessory 
interest in real property improvements. The Director will allocate this 
initial leasehold surrender interest value on a unit by unit basis for 
purposes of the new contract. This leasehold surrender interest will 
apply even if the related possessory interest real property 
improvements are not capital improvements as defined in this part. In 
the event the a new concessioner obtains a leasehold surrender interest 
in only a portion of a related structure as a result of the acquisition 
of a possessory interest from a prior concessioner depreciation of the 
related structure for purposes of leasehold surrender interest value 
will apply only to the portion of the structure to which the possessory 
interest applied.


Sec. 51.80  What happens if there is a dispute between the new 
concessioner and a prior concessioner as to the value of the possessory 
interest?

    In the event of a dispute between a new concessioner and a prior 
concessioner as to the value of a prior concessioner's possessory 
interest, the dispute will be resolved under the procedures contained 
in the possessory interest concession contract. A new concessioner 
shall not agree in the aggregate or on a unit by unit basis on the 
value or values of a prior concessioner's possessory interest without 
the prior written approval of the Director unless the value or values 
was determined through a binding value determination process required 
by the possessory interest contract. The Director's written approval is 
to ensure that the value or values are consistent with the terms and 
conditions of the possessory interest concession contract. If a new 
concessioner and a prior concessioner engage in a process to resolve a 
dispute as to the value of the prior concessioner's possessory 
interest, the new concessioner must allow the Director to assist the 
new concessioner in resolving the dispute to the extent requested by 
the Director.

Subpart H--Concession Contract Provisions


Sec. 51.81  What is the term or length of a concession contract?

    The term of a concession contract must be as short as is prudent 
taking into account the financial requirements of the concession 
contract, resource protection and visitor needs, and other factors the 
Director may deem appropriate. Concession contracts will generally be 
for a term of ten years or less. In no event will a concession contract 
have a term of more than twenty years. Except for the non-competitive 
extensions authorized by this part, the Director may not extend 
concession contracts.


Sec. 51.82  When may a concession contract be terminated by the 
Director?

    Concession contracts will contain appropriate provisions for 
suspension of operations under a concession contract and termination of 
a concession contract by the Director for default, including, but not 
limited to unsatisfactory performance, or when necessary to achieve the 
purposes of this part. The purposes of this part include, but are not 
limited to, the purposes of protecting, conserving, and preserving park 
area resources and providing necessary and appropriate visitor services 
in a park area.


Sec. 51.83  May the Director split or combine concession contracts?

    The Director must not segment or otherwise split visitor services 
authorized or required under a single concession contract into separate 
concession contracts if such action would result in a concession 
contract with anticipated annual gross receipts of less than $500,000. 
The Director must not segment or otherwise split visitor services 
authorized or required under a single concession contract into separate 
concession contracts if such action would result in the establishment 
of an outfitter and guide concession contract. The Director may combine 
the visitor services authorized or required by two or more existing 
concession contracts into a single concession contract and may modify 
the type, nature and scope of the visitor services provided under a 
concession contract.


Sec. 51.84  May the Director include in a concession contract or 
otherwise grant a concessioner a preferential right to provide new or 
additional visitor services?

    The Director must not include in a concession contract, amend a 
concession contract to include, or otherwise grant a concessioner a 
preferential right to provide new or additional visitor services under 
the terms of a concession contract or otherwise. For the purpose of 
this section, a ``preferential right to new or additional services'' 
means a right of a concessioner to a preference (in the nature of a 
right of first refusal or otherwise) to provide new or additional 
visitor services in a park area beyond those already provided by the 
concessioner under the terms of a concession contract. A concessioner, 
including, but not limited to, a preferred offeror, that is allocated 
park area entrance, user days or similar resource use allocations for 
the purposes of a concession contract will not obtain any contractual 
or other rights to continuation of a particular allocation level 
pursuant to the terms of a concession contract or otherwise. Such 
allocations will be made, withdrawn and adjusted by the Director from 
time to time in furtherance of the purposes of this part.


Sec. 51.85  Will a concession contract provide a concessioner an 
exclusive right to provide visitor services?

    Concession contracts will not provide in any manner an exclusive 
right to provide certain or all types of visitor services in a park 
area. The Director may limit the number of concession contracts to be 
awarded for the conduct of visitor services in a particular park area 
in furtherance of the purposes described in this part.


Sec. 51.86  Is there a special rule for transportation service 
contracts?

    Notwithstanding any other provision of law, a service contract (not 
a concession contract) entered into by the Director solely for the 
provision of park area transportation services will have a term of no 
more than 10 years. The term of the service contract must include a 
base term of 5 years and may allow for annual extensions for an 
additional five-year period if approved by the Director.

[[Page 35532]]

Sec. 51.87  Where will the Director deposit franchise fees and how will 
the Director use franchise fees?

    All franchise fees and other monetary consideration (excluding 
reimbursements made by a concessioner for services rendered by the 
Director to the concessioner on a reimbursable basis) required to be 
paid to the Director pursuant to a concession contract, including, but 
not limited to, 1965 Act concession contracts, will be deposited in a 
special account in the Treasury of the United States. Twenty percent of 
the funds so deposited will be available for use by the Director, 
without further appropriation, to support authorized activities 
throughout all park areas. Eighty percent of the funds will be 
available for expenditure by the Director without further appropriation 
for use at the park area where the funds were generated to support 
visitor services, visitor support activities conducted by the Director, 
and high priority and urgently needed resource management programs and 
operations.


Sec. 51.88  Will franchise fees be subject to renegotiation?

    Only concession contracts with a term of more than five years will 
contain a provision that provides for the adjustment of the contract's 
established franchise fee. This adjustment will only occur if the 
Director determines that extraordinary, unanticipated changes occurred 
after the effective date of the contract which have or will 
significantly effect the probable value of the privileges granted by 
the contract. The concession contract will provide for binding 
arbitration if the Director and a concessioner cannot agree upon an 
appropriate adjustment to the franchise fee.


Sec. 51.89  May the Director waive payment of franchise fee or other 
payments?

    The Director may not waive the concessioner's payment of a 
franchise fee or other payments or consideration required by a 
concession contract.


Sec. 51.90  How will the Director establish franchise fees for multiple 
outfitter and guide concession contracts in the same park area?

    If the Director awards more than one outfitter and guide concession 
contract that authorizes or requires the concessioners to provide the 
same or similar visitor services at the same approximate location or 
utilizing the same resource within a single park area, the Director 
will establish franchise fees for these concession contracts that are 
comparable, but not necessarily the same. In establishing these 
franchise fees, the Director will take into account, as appropriate, 
variations in the nature and type of visitor services authorized by 
particular concession contracts, including, but not limited to, length 
of the visitor experience, type of equipment utilized, relative expense 
levels, and other relevant factors. The terms and conditions of an 
existing concession contract will not be subject to modification or 
open to renegotiation by the Director because of the award of a new 
concession contract at the same approximate location or utilizing the 
same resource.


Sec. 51.91  May the Director include ``special account'' provisions in 
concession contracts?

    The Director shall not include in concession contracts ``special 
account'' provisions, that is, contract provisions which require or 
authorize a concessioner to undertake with a specified percentage of 
the concessioner's gross receipts the construction of capital 
improvements on park lands. The construction of all such capital 
improvements by the concessioner shall be undertaken pursuant to the 
leasehold surrender interest provisions of this part. Concession 
contracts may contain provisions which require the concessioner to set 
aside a percentage of gross receipts in a maintenance reserve to be 
used for the purpose of maintenance and repair of capital improvements 
in which the concessioner has a leasehold surrender interest. No 
additional leasehold surrender interest value shall be obtained as a 
result of the expenditure of funds from a maintenance reserve. Whether 
or not a concession contract contains maintenance reserve provisions, 
all concession contracts shall contain provisions which require the 
concessioner to maintain and repair all capital improvements in the 
park area in a manner satisfactory to the Director, including, but not 
limited to, capital improvements in which the concessioner has a 
leasehold surrender interest, utilized by the concessioner in the 
conduct of its operations in a manner satisfactory to the Director.


Sec. 51.92   Handcrafts. [Reserved]

Subpart I--Assignment or Encumbrance of Concession Contracts


Sec. 51.93  What special terms must I know to understand this Part?

    To understand this subpart specifically and this part in general 
you must refer to these definitions, applicable in the singular or 
plural, whenever the terms are used in this part.
    A controlling interest in a concession contract means an interest, 
beneficial or otherwise, that permits the exercise of managerial 
authority over a concessioner's performance under the terms of the 
concession contract and/or decisions regarding the rights and 
liabilities of the concessioner.
    A controlling interest in a concessioner means, in the case of 
corporate concessioners, an interest, beneficial or otherwise, of 
sufficient outstanding voting securities or capital of the concessioner 
or related entities that permits either the exercise of managerial 
authority over the actions and operations of the concessioner. A 
``controlling interest'' in a concessioner also means, in the case of 
corporate concessioners, an interest, beneficial or otherwise, of 
sufficient outstanding voting securities or capital of the concessioner 
or related entities that permits the election of a majority of the 
Board of Directors of the concessioner. The term ``controlling 
interest'' in a concessioner, in the instance of a partnership, limited 
partnership, joint venture, other business organization or individual 
entrepreneurship, means ownership or beneficial ownership of the assets 
of the concessioner that permits the exercise of managerial authority 
over the actions and operations of the concessioner.
    Rights to operate and/or manage under a concession contract means 
any arrangement where the concessioner of record under a concession 
contract employs or contracts with a third party to operate and/or 
manage the performance of a concession contract (or any portion 
thereof). The payments to the third party, whether a percentage of 
revenues or otherwise, is not relevant. This does not apply to 
arrangements with an individual employee.
    Subconcessioner means a third party that has been granted by a 
concessioner, with the approval of the Director, rights to operate and/
or manage the performance of a concession contract (or any portion 
thereof), whether in consideration of a percentage of revenues or 
otherwise. Concession contracts may prohibit subconcessioners or limit 
the circumstances in which rights to operate and/or manage may be 
granted by a concessioner.


Sec. 51.94  What assignments require the approval of the Director?

    The concessioner may not assign, sell, convey, grant, contract for, 
or otherwise transfer (these transactions are collectively referred to 
as ``assignments'' for purposes of this part), without the

[[Page 35533]]

prior written approval of the Director, any of the following:
    (a) Any concession contract;
    (b) Any rights to operate and/or manage the performance of a 
concession contract;
    (c) Any revenues generated by a concession contract;
    (d) Any controlling interest in a concessioner;
    (e) Any controlling interest in a concession contract; or
    (f) Any leasehold surrender interest or possessory interest 
obtained under a concession contract.


Sec. 51.95  What encumbrances require the approval of the Director?

    The concessioner may not encumber, pledge, mortgage or otherwise 
provide as a security interest for any purpose (such transactions 
collectively referred to as ``encumbrances'' for purposes of this 
part), without the prior written approval of the Director, any of the 
following:
    (a) Any concession contract;
    (b) Any rights to operate and/or manage performance under a 
concession contract;
    (c) Any revenues generated by a concession contract;
    (d) Any controlling interest in a concessioner;
    (e) Any controlling interest in a concession contract;
    (f) Any tangible personal property used in the performance of the 
concession contract within the park area; or
    (g) Any leasehold surrender interest or possessory interest 
provided by a concession contract.


Sec. 51.96  Does the concessioner have an unconditional right to 
receive the Director's approval for an assignment or encumbrance?

    Approval of a assignment or encumbrance by the Director is not a 
matter of right to a concessioner. In addition to the required 
determinations described in this part, the following limitations apply 
to approvals of assignments and encumbrances:
    (a) The Director may only approve an encumbrance if the sole 
purpose of the encumbrance is either to finance the construction of 
capital improvements under the applicable concession contract in the 
applicable park area or to finance the purchase of the applicable 
concession contract. An encumbrance may not be made for any other 
purpose, including, but not limited to, providing collateral for other 
debt of a concessioner, the parent of a concessioner, or an entity 
related to a concessioner;
    (b) The Director may not approve an encumbrance that purports to 
provide the creditor or assignee any rights beyond those provided by 
the applicable concession contract, including, but not limited to, any 
rights to conduct business in a park area except in strict accordance 
with the terms and conditions of the applicable concession contract;
    (c) The Director may not approve an encumbrance that purports to 
permit a creditor or assignee of a creditor, in the event of default or 
otherwise, to begin operations under the applicable concession contract 
before the Director determines whether the proposed operator is a 
qualified person as defined in this part; and
    (d) The Director will not approve an assignment or encumbrance if 
the transaction purports to assign or encumber assets that are not 
owned by the concessioner or park area entrance, user day, or similar 
use allocations made by the Director.


Sec. 51.97  What happens if an assignment or encumbrance is completed 
without the approval of the Director?

    Assignments or encumbrances completed without the prior written 
approval of the Director will be considered as null and void and a 
material breach of the applicable concession contract which may result 
in termination of the contract for cause. No person will obtain any 
valid or enforceable rights in a concessioner, concession contract, 
rights to operate or manage under a concession contract as a 
subconcessioner or otherwise, revenues generated by a concession 
contract, or leasehold surrender interest or possessory interest, if 
acquired in violation of these requirements.


Sec. 51.98  What happens if there is a default on an encumbrance 
approved by the Director?

    In the event of default on an encumbrance approved by the Director 
in accordance with this part, the creditor, or an assignee of the 
creditor, may succeed to the interests of the concessioner only to the 
extent provided by the approved encumbrance.


Sec. 51.99  How does the concessioner get the Director's approval 
before making an assignment or encumbrance?

    Before completing any assignment or encumbrance which may be 
considered to be the type of transaction described in this part, 
including, but not limited to, the assignment or encumbrance of what 
may possibly be a controlling interest in a concessioner or a 
concession contract, the concessioner must request in writing approval 
of the transaction by the Director. The Director will provide an 
application form for this purpose.


Sec. 51.100  What information will the Director require in the 
application?

    The application for the Director's approval of an assignment or 
encumbrance will require that the following information be provided in 
such detail as the Director may specify:
    (a) All instruments proposed to implement the transaction;
    (b) An opinion of counsel to the effect that the proposed 
transaction is lawful under all applicable federal and state laws;
    (c) A narrative description of the proposed transaction, and, where 
applicable, the transferee's plans for conducting the operation;
    (d) A statement as to the existence and nature of any litigation 
relating to the proposed transaction;
    (e) A description of the management qualifications, financial 
background, and financing and operational plans of any proposed 
transferee;
    (f) A descriptive statement as to whether and in what manner the 
proposed transaction constitutes the assignment or encumbrance of a 
controlling interest as described in this subpart;
    (g) A detailed description of all financial aspects of the proposed 
transaction;
    (h) Prospective financial statements (proformas) that have been 
examined by an independent accounting firm;
    (i) A schedule that allocates in detail the purchase price (or, in 
the case of a transaction other than an asset purchase, the valuation) 
of all assets assigned or encumbered. This includes capital 
improvements on a unit by unit basis, tangible personal property 
individually or aggregated into groups of like items, and intangible 
assets individually itemized. In addition the applicant must provide a 
description of the basis for all allocations and ownership of all 
assets;
    (j) A statement from the transferee that if the assigning 
concessioner does not submit to the Director its final financial 
statement within sixty days after the closing date of the assignment, 
the transferee will do so within one hundred and twenty days after the 
closing date of the assignment;
    (k) A statement and narrative explanation as to why the proposed 
assignment or encumbrance is not prohibited under the limitations 
contained in this part; and
    (l) Such other information as the Director may require.

[[Page 35534]]

Sec. 51.101  May the Director waive any of these documentation 
requirements?

    The Director may waive portions of these documentation requirements 
in circumstances where particular documents are considered unnecessary.


Sec. 51.102  What are standard proformas?

    Concessioners are encouraged to submit standard prospective 
financial statements (proformas) pursuant to this part. A ``standard 
proforma'' is one that:
    (a) Provides projections, including revenues and expenses, that are 
consistent with the concessioner's past operating history. If 
projections that are not consistent with the concessioner's past 
history are used, the proforma must be accompanied by a narrative that 
describes why differing expectations are achievable and realistic;
    (b) Assumes that any loan related to an assignment or encumbrance 
will be paid in full by the expiration of the concession contract. If 
the proforma assumes that a loan related to an assignment or 
encumbrance will not be paid in full by the expiration of the 
concession contract, a narrative description as to why the loan extends 
beyond the term of the contract must be provided. The description must 
include, but is not limited to, identification of the loan's collateral 
after expiration of the concession contract;
    (c) Assumes amortization of any intangible assets assigned or 
encumbered as a result of the transaction over the remaining term of 
the concession contract. If a proforma that assumes otherwise is 
submitted, a narrative description as to why such extended amortization 
period is consistent with a reasonable opportunity for profit over the 
remaining term of the concession contract must be provided; and
    (d) Shows, for the remaining term of the concession contract, 
Internal Rates of Return (IRR), and, where applicable, Returns on 
Gross, Returns on Equity, and Returns on Assets, consistent with common 
industry median expectations as reflected, where applicable, in 
guidelines developed by the Director. If a proforma not showing such 
returns is submitted, it must be accompanied by a narrative description 
that describes in detail how the returns shown are consistent with a 
reasonable opportunity for profit over the remaining term of the 
concession contract.


Sec. 51.103  If the concessioner submits a non-standard proforma, is 
the Director more likely to disapprove the transaction?

    The submission of a non-standard proforma or proformas is more 
likely to result in disapproval of a transaction by the Director as 
demonstrating that the transaction is inconsistent with the criteria 
for approval of assignments and encumbrances as described in this part.


Sec. 51.104  If the transaction includes more that one concession 
contract, how must required information be provided?

    In circumstances of an assignment or encumbrance that includes more 
than one concession contract, the concessioner must provide the 
information described in this subpart on a contract by contract basis.

Process To Receive the Director's Approval of Assignments and 
Encumbrances


Sec. 51.105  In what circumstances will the Director not approve an 
assignment or encumbrance?

    The Director will not approve an assignment or encumbrance 
described in this part if the Director determines that it is prohibited 
by any of the limitations set forth in this part. The Director also 
will not approve an assignment or encumbrance described in this part if 
the Director determines that:
    (a) The transaction would result in the acquisition (directly, or 
indirectly in the event of foreclosure under an encumbrance) by a 
person the Director determines is not a qualified person or otherwise 
may not be able to satisfactorily perform the terms and conditions of 
the applicable concession contract;
    (b) The transaction would have an adverse impact on the protection, 
conservation or preservation of park resources;
    (c) The transaction would have an adverse impact on the provision 
of necessary and appropriate facilities and services to visitors at 
reasonable rates and charges; or
    (d) The terms of the transaction are likely, directly or 
indirectly, to reduce an existing or a new concessioner's opportunity 
to earn a reasonable profit over the remaining term of the applicable 
concession contract, to adversely affect the quality of facilities and 
services pursuant to the contract, or to result in a need for increased 
rates and charges to the public to maintain the quality of concession 
facilities and services.


Sec. 51.106  What information will the Director consider when deciding 
to approve a transaction?

    In deciding whether to approve an assignment or encumbrance, the 
Director will consider the proformas and all other information 
submitted by the concessioner as required by this part.


Sec. 51.107  Does the Director's approval of a assignment or 
encumbrance include any representations of any nature?

    In approving an assignment or encumbrance, the Director has no duty 
to inform a transferee of any information the Director may have 
relating to the concession contract, the park area, or other matters 
relevant to the concession contract. In addition, in approving an 
assignment or encumbrance, the Director makes no representations of any 
nature to any person about any matter, including, but not limited to, 
the value or potential profitability of any concession contract or 
assets of a concessioner.


Sec. 51.108  May the Director amend or extend a concession contract for 
the purpose of facilitating a transaction?

    The Director may not amend or extend a concession contract for the 
purpose of facilitating an assignment or encumbrance. The Director may 
not make commitments regarding rates to the public, contract 
extensions, concession contract terms and conditions, or any other 
matter, for the purpose of facilitating an assignment or encumbrance.


Sec. 51.109  May the Director open to renegotiation or modify the terms 
of a concession contract as a condition of the approval of a 
transaction?

    The Director may not open to renegotiation or modify the terms and 
conditions of a concession contract as a condition of the approval of 
an assignment or encumbrance. The exception is if the Director 
determines that renegotiation or modification is required to avoid an 
adverse impact on the protection, conservation or preservation of the 
resources of a park area or an adverse impact on the provision of 
necessary and appropriate visitor services at reasonable rates and 
charges.


Sec. 51.110  May the Director charge a fee for the review a proposed 
transaction?

    The Director may charge a reasonable fee for the review of a 
proposed assignment or encumbrance. The fee may not exceed the actual 
cost to the Director of reviewing the proposed transaction.

Subpart J--Information and Access to Information


Sec. 51.111  What records must the concessioner keep and what access 
does the Director have to records?

    A concessioner (and any subconcessioners) must keep any

[[Page 35535]]

records that the Director may require for the term of the concession 
contract and for five years after the termination or expiration of the 
concession contract to enable the Director to determine that all terms 
of the concession contract are or were faithfully performed. The 
Director and any duly authorized representative of the Director must, 
for the purpose of audit and examination, have access to all pertinent 
records, books, documents, and papers, of the concessioner and any 
parent or affiliate of the concessioner.


Sec. 51.112  What access to concessioner records will the Comptroller 
General have?

    The Comptroller General or any duly authorized representative of 
the Comptroller General must, until the expiration of five calendar 
years after the close of the business year of each concessioner (or 
subconcessioner), have access to and the right to examine all pertinent 
books, papers, documents and records of the concessioner and 
subconcessioner (and parents and affiliates).


Sec. 51.113  What information will the Director make publicly available 
about the concessioner and the concession contract?

    The Director will make publicly available the following information 
contained in annual financial statements submitted to the Director by 
the concessioner: Gross receipts broken out by department; net income 
or loss before taxes; franchise fees and building use fees; merchandise 
inventories; and depreciable fixed assets and net depreciable fixed 
assets, broken out by leasehold surrender interest or possessory 
interest, as applicable, and personal property. The Director will also 
make publicly available other information provided by a concessioner to 
the Director to the extent permitted by law. Notwithstanding this 
section, the Director will not make publicly available any information 
relating to a particular concession contract in effect as of [the 
effective date of the final rule] if the Director determines that such 
exercise would constitute a material breach of the concession contract.


Sec. 51.114  When will the Director make proposals and evaluation 
documents publicly available?

    The Director will not make publicly available proposals submitted 
in response to a prospectus, information contained in such proposals 
and documents generated by the Director evaluating such proposals, 
until the date that the new concession contract solicited by the 
prospectus is awarded. At that time, the Director will make such 
information and documents available to the extent required by law.

Subpart K--The Effect of the 1998 Act's Repeal of the 1965 Act


Sec. 51.115  Did the 1998 Act repeal the 1965 Act?

    Section 415 of the 1998 Act repealed the 1965 Act and related laws 
as of November 13, 1998. This repeal did not affect the validity of any 
1965 Act concession contract. The provisions of the 1998 Act, however, 
apply to all 1965 Act concession contracts except to the extent that 
such provisions are inconsistent with the terms and conditions of a 
1965 Act concession contract.


Sec. 51.116  What is the effect of the 1998 Act's repeal of the 1965 
Act's renewal preference?

    (a) Section 5 of the 1965 Act granted all existing satisfactory 
concessioners a preference in the renewal (termed a ``renewal 
preference'' for purposes of this section) of its concession contract 
or permit as a statutory right. The repeal of the 1965 Act by the 1998 
Act repealed this statutory renewal preference as of November 13, 1998. 
Standard 1965 Act concession contracts awarded by the Director did not 
provide a renewal preference as a matter of a contract right. However, 
if a concessioner holds a 1965 Act concession contract in effect as of 
November 13, 1998, and the concessioner considers that the particular 
terms and conditions of its 1965 Act concession contract grant the 
concessioner, as a matter of contract right, a renewal preference, the 
concessioner may appeal this position to the Director. Such appeal must 
be in writing and be received by the Director no later than thirty days 
after the issuance of a prospectus for a concession contract under this 
part for which the concessioner asserts a renewal preference. The 
concessioner submitting such an appeal, if its appeal is still pending 
as of the date for submission for proposals pursuant to an applicable 
prospectus, must submit a responsive proposal pursuant to the 
prospectus. If the concessioner fails to submit a responsive proposal, 
the Director must consider the concessioner's appeal moot and no 
renewal preference will apply to the new concession contract. Where 
applicable, the Director will give notice of this appeal to all 
potential offerors that requested a prospectus.
    (b) The Director may delegate consideration of such appeals only to 
a Deputy or Associate Director. The deciding official must prepare a 
written decision on the appeal, taking into account the content of the 
appeal and other available information. The written decision on the 
appeal must be issued before the Director selects the best proposal 
received pursuant to the applicable prospectus. If the appeal results 
in the appealing concessioner being determined as having a renewal 
preference under a 1965 Act contract, and the appealing concessioner 
does or did submit a responsive proposal, the concessioner will be 
entitled to exercise a right of preference to the concession contract 
as otherwise described in and subject to the otherwise applicable 
conditions of this part, including, but not limited to, the requirement 
to submit a responsive offer under an applicable prospectus. No person 
will be considered as having exhausted administrative remedies with 
respect to assertion of the existence of a renewal preference under a 
1965 Act concession contract until the Director makes an appeal 
decision in accordance with this section. Any renewal preference the 
Director may determine to exist pursuant to this section will apply 
only to the award of the first concession contract that replaces a 1965 
Act concession contract.


Sec. 51.117  What renewal preference exceptions are made for Glacier 
Bay cruise ships?

    Notwithstanding the provisions of the 1998 Act which repealed the 
statutory renewal preference provided by the 1965 Act, the Director, in 
awarding future Glacier Bay cruise ship concession contracts covering 
cruise ship entries for which a renewal preference existed prior to the 
passage of the 1998 Act, must provide for such cruise ship entries a 
right of preference as described in this part even though such cruise 
ship concession contracts are not outfitter and guide contracts and may 
result in annual gross receipts in excess of $500,000. The final date 
of expiration of any Glacier Bay cruise ship concession contract 
awarded under this special authority will be December 31, 2009.

Subpart L--Information Collection


Sec. 51.118  Have information collection procedures been followed?

    (a) The information collection for submission of offers in response 
to concession prospectuses contained in this part have been approved by 
the Office of Management and Budget as required by 44 U.S.C. 3501 et 
seq. and assigned clearance number 1024-0125, effective through 
December 31, 1999. An information collection for proposed sales of 
concession operations was previously covered by OMB Approval

[[Page 35536]]

No. 1024-0126, which expired January 31, 1996. An OMB form 83-I has 
been prepared but has not yet been approved by OMB. Response is 
required to obtain a concession contract in accordance with the 1998 
Act.
    (1) As required by 5 CFR 1320.8(d)(1), the National Park Service is 
soliciting public comments as to:
    (i) Whether the collection of information is necessary for the 
proper performance of the functions of the bureau, including whether 
the information will have practical utility;
    (ii) The accuracy of the bureau's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used;
    (iii) The quality, utility, and clarity of the information to be 
collected; and
    (iv) How to minimize the burden of the collection of information on 
those who are to respond, including the use of appropriate automated 
electronic, mechanical, or other forms of information technology.
    (2) 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.
    (b) The public reporting burden for the collection of information 
for the purpose of preparing a proposal in response to a contract 
solicitation is estimated to average 480 hours per proposal for large 
authorizations and 240 hours per proposal for small authorizations. The 
public reporting burden for the collection of information for the 
purpose of requesting approval of a sale or transfer of a concession 
operation is estimated to be 80 hours. Please send comments regarding 
this burden estimate or any other aspect of this collection of 
information, including suggestions for reducing the burden, to the 
Information Collection Officer, National Park Service, 1849 C Street, 
Washington, DC 20240; and to the Attention: Desk Officer for the 
Interior Department, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Washington, DC 20503.

    Dated: June 23, 1999.
Donald J. Barry,
Assistant Secretary for Fish and Wildlife and Parks.
[FR Doc. 99-16490 Filed 6-29-99; 8:45 am]
BILLING CODE 4310-70-P