[Federal Register Volume 66, Number 248 (Thursday, December 27, 2001)]
[Rules and Regulations]
[Pages 66755-66763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31201]


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DEPARTMENT OF THE INTERIOR

National Park Service

36 CFR Part 18

RIN 1024-AC78


Leasing Regulations

AGENCY: National Park Service, Interior.

ACTION: Final rule.

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SUMMARY: This rule amends current National Park Service (NPS) 
regulations (36 CFR part 18) concerning the leasing of historic 
properties within areas of the national park system to encompass 
additional types of properties as authorized by law and to change in 
certain respects the procedural requirements for leasing of properties. 
This rule was published for public comment in the Federal Register on 
December 12, 2000 (65 FR 77538).

EFFECTIVE DATE: January 28, 2002.

FOR FURTHER INFORMATION CONTACT: Cindy Orlando, National Park Service, 
1849 C Street, NW., Room 7311, Washington DC 20240 (202/565-1212).

SUPPLEMENTARY INFORMATION: Section 802 of the National Parks Omnibus 
Management Act, Pub. L. 105-391 (Section 802), authorizes NPS to grant 
leases for the use of buildings and associated property located within 
areas of the national park system to persons and governmental entities 
under certain conditions. This new leasing authority supplements 
existing NPS leasing authority concerning historic properties set forth 
in 16 U.S.C. 470h-3 and implemented in 36 CFR part 18. This amendment 
of 36 CFR part 18 combines in one regulation the leasing authority 
provided by Section 802 with the leasing authority provided by 16 
U.S.C. 470h-3. In general, this rule permits NPS to lease buildings, 
lands associated with such buildings, and, historic land located within 
the boundaries of park areas. It does not permit the leasing of non-
historic land.
    This amendment of 36 CFR part 18 achieves simplification of the NPS 
historic leasing process as also called for by Section 802 and expands 
the scope of NPS leasing authority to all eligible properties. NPS also 
has authority to lease certain property located within units of the 
national park system under 16 U.S.C. 460l-22(a). This authority is 
implemented by NPS in 36 CFR part 17 which remains unchanged by the 
amended 36 CFR part 18. Eight public comments were received in response 
to the proposed rule. Several changes were made in response to them. In 
addition, the final rule contains a number of editorial changes and 
clarifications.

Section Content

    The following discussion describes the general content of each 
section of the final regulation. Public comments on these sections are 
also addressed as appropriate.

Section 18.1

    Authority and Purposes. Section 18.1 describes the authority for 
the rule. The basic authority is 16 U.S.C. 1 et seq., (the National 
Park Service Organic Act), particularly 16 U.S.C. 1a-2(k) (the general 
NPS leasing authority contained in section 802 of Pub. L. 105-391), and 
16 U.S.C. 470h-3 (government-wide leasing authority applicable to 
historic properties). NPS has included a ``grandfather'' provision in 
this section of the final regulation to permit the execution of 
proposed leases that were solicited under 36 CFR part 18 prior to the 
effective date of this part. In response to comments, NPS has clarified 
the particular categories of NPS property to which this part applies. 
In addition, NPS notes that although this part is couched in terms of 
leasing particular properties, nothing in this part precludes NPS from 
leasing a number of properties in a combined solicitation or from 
engaging management companies (where otherwise authorized) to assist in 
implementing an appropriate overall park area leasing program in 
accordance with the terms of this part.

Section 18.2

    Section 18.2 defines the terms used in the proposed rule. NPS has 
clarified the definition of ``associated property'' in the final 
regulation to make clear that associated property may relate to one or 
more buildings. NPS has also clarified the definition of ``fair market 
value'' by making clear that the particular terms and conditions of the 
lease being offered are to be taken into account in determining the 
fair market value of the lease. Finally, NPS has clarified the 
definitions of property types as used in the regulation and added a 
definition of non-historic property as a clarification. A comment asked 
whether a limited liability company qualifies as a ``person'' for 
purposes of this part. It does. A comment suggested that the definition 
historic property be expanded to include properties determined historic 
by state or local governments. NPS notes that the definition used is 
statutory and, in any event, includes properties of state or local 
significance listed in the National Register of Historic Places.

[[Page 66756]]

Section 18.3

    Section 18.3 describes the types of property that NPS may lease 
under this part. In general, this part applies to leases of both 
historic and non-historic property located within the boundaries of 
park areas. However, Section 18.3(b) makes clear that non-historic 
land, i.e., vacant land that is not located within the boundaries of an 
historic district, may not be leased under this part. This is because 
of the express limitations on the types of property that may be leased 
under the authorities for this part. However, certain types of vacant 
land located in eligible units of the national park system may be 
leased under 36 CFR part 17.

Section 18.4

    Section 18.4 describes the types of determinations NPS must make 
before it may lease property under this part. Before leasing property 
under this part, NPS must determine that the lease: (1) Will not result 
in degradation of the purposes and values of the park area; (2) will 
not deprive the park area of property necessary for appropriate park 
protection, interpretation, visitor enjoyment, or administration of the 
park area; (3) contains such terms and conditions as will assure the 
leased property will be used for an activity and in a manner that is 
consistent with the purposes established by law for the park area in 
which the property is located; (4) is compatible with the programs of 
the National Park Service; (5) is for rent at least equal to the fair 
market value rent of the leased property as described in Section 18.5; 
(6) does not authorize activities that are subject to authorization 
through a concession contract, commercial use authorization or similar 
instrument; and (7), if the lease is to include historic property, that 
the lease will adequately insure the preservation of the historic 
property.
    With respect to the first determination, NPS considers the term 
``degradation'' of park area purposes and values (a term which tracks 
the provisions of Section 802) to provide the same protective standard 
as the terms ``derogation'' and ``impairment'' of park area resources 
as used in other NPS authorities.
    A comment suggested that distinctions be made between the types of 
determinations necessary for ``big'' leases and ``small'' leases. 
However, NPS considers that the determinations required by this section 
are necessary for all leases, noting that a ``small'' lease'' may have 
a significant impact on park area resources.

Section 18.5

    Section 18.5 describes the rent NPS must receive for property 
leased under this part. The rent must be at fair market value, 
determined after taking into account any restrictions NPS may place on 
the use of the leased property and any requirements for rehabilitation 
and maintenance of the leased property. The final regulation has been 
clarified in this respect. Comments suggested that consideration of 
year round occupancy, educational or governmental purposes be taken 
into account when determining fair market value rent. The regulation, 
however, does not preclude consideration of any relevant factor in 
determining fair market value. Another comment suggested that the 
regulation should provide authority for NPS to waive the fair market 
value rent requirement. NPS does not consider that this is within its 
leasing authority or otherwise appropriate. However, in response to a 
comment, NPS notes that cooperative agreements with non-profit 
organizations otherwise authorized by law may provide for assignment of 
government property to the cooperator without requiring the payment of 
fair market value rent. Such agreements are outside the scope of this 
regulation. A comment asked for examples as to the types of 
restrictions on use of the property that may reduce its fair market 
value. Examples are where NPS may not permit a property to be used for 
industrial purposes or may require that a property be used for 
educational purposes in the circumstances of a particular park area.

Section 18.6

    Section 18.6(a) describes the types of uses that are permissible 
for property leased under this part. In general, leased property may be 
used for any lawful purpose subject to the determinations called for in 
Section 18.4. These uses may include, among others, office or other 
commercial uses. Innovative uses that are consistent with the 
requirements of this part are encouraged. Section 18.6(b) states that a 
lease issued under this part may not authorize the lessee to engage in 
activities that are subject to authorization through a concession 
contract, commercial use authorization or similar instrument. Proposed 
lease activities are subject to authorization under a concession 
contract if the Director determines in accordance with 36 CFR part 51 
and park area planning documents and related guidelines and policies 
that the proposed activities meet applicable requirements for issuance 
of a concession contract. Proposed activities are subject to 
authorization under a commercial use authorization if the Director 
determines in accordance with park area planning documents and related 
guidelines and policies that the proposed activities meet applicable 
requirements for issuance of a commercial use authorization.

Section 18.7

    Section 18.7 describes the procedures for leasing property through 
a public bid process. The bid process may only be used if the amount of 
rent is the sole criterion for award of a lease. The bid process calls 
for public notice of the lease opportunity, submission of offers on a 
date certain, and a public bid opening and selection by NPS. One 
comment suggested that award of leases under a bid system should be 
eliminated and another suggested an informal process that does not 
require publication or the submission of bids. NPS considers that the 
public bidding procedures of this section are appropriate. Another 
comment suggested that the bid system should not be used to lease 
historic property. NPS considers that the bid process will not be not 
frequently utilized. However, it wishes to retain the flexibility to do 
so in appropriate circumstances. For example, short-term leases of 
historic farmland for agricultural purposes may most efficiently be 
awarded through the bid process. Another comment in effect asked for 
further guidance on how general federal historic preservation 
requirements and procedures (e.g., 36 CFR part 800) apply to the 
leasing of historic property under this part. This is a subject that is 
beyond the scope of these regulations. However, 36 CFR part 800 
discusses these matters in detail. NPS, in response to a comment, has 
added a financial capability determination as a request for bids 
requirement.

Section 18.8

    Section 18.8 describes the procedures for leasing property through 
a proposal solicitation process. In general, the proposal solicitation 
process calls for public issuance of a Request for Proposals (``RFP'') 
that describes the leasing opportunity and the criteria for selection. 
After submission of proposals, NPS will select the best proposal upon 
application of established selection criteria. These include the 
compatibility of the proposal to the park area and its visitors, the 
experience and financial capability of the offeror, and the ability and 
commitment of the offeror to conduct its activities in an 
environmentally enhancing manner.

[[Page 66757]]

    One comment suggested that the publication period for the 
solicitation should be reduced to thirty days. However, the regulation 
permits the sixty-day publication period to be shortened in appropriate 
circumstances. Another comment suggested that the rent offered be a 
separate selection factor. NPS does not consider this to be appropriate 
and that it would difficult to administer. A comment suggested that the 
``tie-breaker'' standard contained in Section 18.8(f) be eliminated. 
NPS has changed the ``tie-breaker'' standard to a more general 
determination as to which proposal is the most beneficial on an overall 
basis. A comment also suggested that the regulations include a ``best 
and final offer'' provision. NPS, however, considers that the process 
described for proposal amendment is efficient and provides to the 
extent appropriate an equivalent of a ``best and final offer'' 
procedure in the event that two or more proposals are considered as 
substantially equal. A comment suggested that the ``specified'' period 
of time for negotiation of a final lease be changed so as to allow an 
unlimited period for negotiation, subject to termination by NPS. NPS 
considers that requiring a specified negotiation period (which is 
subject to extension by NPS) is a more effective means to conclude the 
negotiation in a timely manner. Another comment suggested that the 
regulation reference the ability of NPS to enter into exclusive 
negotiating agreements with the successful offeror. NPS has included 
reference to such agreements in Section 18.8(d) in the form of a letter 
of intent to negotiate.

Section 18.9

    Section 18.9 permits NPS to lease property to non-profit 
organizations and governmental units without competitive procedures if 
NPS determines that the non-profit or governmental use of the property 
will contribute to the purposes and programs of the park area. This is 
a clarification of the proposed regulation that stated that such leases 
could be entered into when it is in the public interest to do so. NPS 
considers this authority necessary for appropriate implementation and 
integration of park area management and leasing program objectives.
    A comment suggested that the authority for non-competitive award of 
leases should only apply when no proposals were received in response to 
a competitive solicitation. NPS considers this limitation too 
restrictive in light of NPS program needs and objectives. Another 
comment suggested that there should be authority to award leases non-
competitively with private property owners. NPS, however, does not 
consider this to be consistent with its general policy of competitive 
leasing procedures. A comment misunderstood this section as permitting 
receipt of less than fair market value rent and suggested that 
``small'' leases should be awarded through informal processes. Fair 
market value rent is required under this section. NPS considers that 
the formal leasing processes required by this part are necessary for 
effective implementation of NPS authorities.

Section 18.10

    Section 18.10 describes the term of leases to be granted under the 
authority of this part. The term is to be no more than 60 years. 
Several comments suggested a longer-term limitation or no limitation at 
all. However, it has been the experience of NPS that a lease term of 
sixty years (or less) is sufficient for investment purposes (the 
maximum sixty year term permits two thirty year mortgage periods) and 
that a transaction that is seen to need a longer term to be successful 
is not likely to viable in the first instance. NPS notes the provisions 
of Title IV of the National Parks Omnibus Management Act of 1998 that 
limits the term of concession contracts to twenty years (reduced from 
thirty years under prior legislation) and which states that concession 
contracts should be for the shortest possible term. NPS considers that 
this statement of Congressional policy is equally applicable to leases. 
Another comment suggested specific terms for leases for historic 
property. NPS does not consider the inclusion of specific terms to be 
appropriate as the property's historic character will be taken into 
account when determining the lease term. Other comments suggested that 
NPS should have the authority to extend leases. However, NPS in general 
considers extensions to be anti-competitive and that they may result in 
leases that extend beyond any reasonable period of time to the 
detriment of the government. NPS, however, has added language to the 
final regulation that permits leases to be extended for up to one year 
if required by circumstances beyond the control of NPS. This is 
consistent with similar provisions contained in the concession 
contracting provisions of Title IV of the National Parks Omnibus 
Management Act of 1998 that permit short term extensions of concession 
contracts in limited circumstances.

Section 18.11

    Section 18.11 describes the general terms and conditions that a 
lease granted under authority of this part must contain. These include 
provisions that assure use of the property in a manner consistent with 
the purposes of the applicable park area, and, if applicable, the 
preservation of historic property that may be leased.

Section 18.12

    Section 18.12 describes a number of specific terms and conditions 
that a lease granted under the authority of this part must contain. 
These include a termination for cause provision, a clause requiring the 
lessee to maintain the leased property, provisions regarding the use of 
the leased property, and, provisions that state that any improvements a 
lessee may make may only be undertaken with the approval of NPS. 
18.12(c). A comment suggested that Section 18.12(c) should be amended 
to delete the mandatory reference to subleases with respect to 
financial capability determinations. NPS does not agree with this 
suggestion as sublessees are, as a practical matter, the lessee of a 
specified portion of the leased property and therefore should be 
financially capable to carry out applicable terms of the lease.
    18.12(d). NPS deleted reference to the disposition of insurance 
proceeds in this section. The terms of specific leases will address 
this subject. It also deleted specific reference to replacement cost 
insurance in response to a comment.
    18.12(g). A comment suggested that fees NPS may collect from 
lessees for services provided by NPS be referenced in this section. 
NPS, however, does not consider that reference to such fees is 
appropriate as such fees, if any, are variable and implemented on a 
park by basis. Another comment suggested that Section 18.12(g) be 
amended to delete the reference to lease termination with respect to 
compensation for improvements. NPS deleted this provision in its 
entirety from the regulation as unnecessary in light of general legal 
limitations on the authority of NPS to contractually obligate the 
expenditure of unappropriated funds.
    18.12(h). The provisions regarding lease extensions and renewal 
rights have been deleted from this subsection as redundant. A comment 
suggested that the reference in this subsection to the sovereign 
authority of the government to cancel leases may preclude a lender from 
obtaining a reinstated lease in the event of foreclosure and thus make 
the lease unfinancable. However, this subsection does not preclude this 
right in the event of lease foreclosure.
    18.12(i). A comment suggested that leases should permit new 
construction in park areas. NPS considers that the

[[Page 66758]]

terms of this subsection, which do permit new construction in park 
areas in limited circumstances, are necessary in order to avoid 
impairment of park area resources and values.
    18.2(m). A comment suggested modifying the term ``obligations'' in 
this subsection by the term ``monetary.'' However, this ``subject to 
availability of appropriated funds'' clause is a standard provision 
contained in government contracts.

Section 18.13

    Section 18.13 describes the information collection requirements of 
the rule. A comment suggested that 40 hours for preparing a large lease 
proposals seems low. NPS notes that the time estimates are averages 
only.

Drafting Information

    The primary authors of this rule are the members of a task force 
comprised of NPS officials involved in the leasing of national park 
system properties.

Compliance With Laws, Executive Orders and Departmental Policy

Regulatory Planning and Review (E.O. 12866)

     This rule is a significant rule within the meaning of Executive 
Order 12866 because of novel policy issues.
    a. This rule will not have an annual economic effect of $100 
million or more or adversely affect an economic sector, productivity, 
jobs, the environment or other units of government. The rule imposes no 
obligations on any entity except for persons that may seek to be 
awarded an NPS lease. It does not apply to existing NPS leases.
    b. This rule will not create inconsistencies with other agencies' 
actions as it only applies to the National Park Service.
    c. This rule will not materially affect entitlements, grants, user 
fees, loan programs, or the rights and obligations of their recipients. 
The rule only prescribes policies and procedures for leasing lands of 
the national park system.
    d. This rule raises novel policy issues as it prescribes new 
policies and procedures for leasing lands of the national park system 
in accordance with the requirements of Section 802 of Public Law 105-
319 and 16 U.S.C. 470h-3.

Regulatory Flexibility Act

    This rule is not subject to the Regulatory Flexibility Act as it is 
not required to be published for comment before adoption by 5 U.S.C. 
553 or other law. NPS solicited public comment on this proposed rule as 
a matter of policy. The Department of the Interior also considers that 
the final rule will not have a significant effect on a substantial 
number of small entities as defined under the Regulatory Flexibility 
Act (5 U.S.C 601 et seq.). NPS anticipates that less than one hundred 
leases a year will be awarded under this authority. In addition, the 
rule is only applicable to prospective lessees. It has no effect on 
existing NPS leases.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Fairness Enforcement Act. This rule does not have 
an annual effect on the economy of $100 million or more; will not cause 
a major increase in costs or prices for consumers, individual entities, 
Federal, State, or local government agencies, or geographic regions; 
and does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
primary effect of the proposed rule is to establish policies and 
procedures for the granting of leases of certain property located 
within areas of the national park system. Potential lessees will only 
submit lease proposals if the effects are positive.

Takings (E.O. 12630)

    In accordance with Executive Order 12630, this rule does not have 
significant takings implications as this rule does not apply to private 
property. A takings assessment is not required.

Federalism (E.O. 13132)

    In accordance with Executive Order 13132, this rule does not have 
sufficient federalism implications to warrant the preparation of a 
federalism assessment. The rule imposes no requirements on any 
governmental entity other than NPS.

Civil Justice Reform (E.O. 12988)

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule does not unduly burden the 
judicial system and does not meet the requirements of sections 3(a) and 
3(b)(2) of the Order.

Paperwork Reduction Act

    This rule (NPS Leasing Regulations--36 CFR part 18) requires an 
information collection from ten or more parties so a submission under 
the Paperwork Reduction Act was required. OMB has approved the 
information collection requirements of this part. OMB Control No. 1024-
0223, expiration date 01/31/2004. The information collection 
requirements of this rule are for the purpose of awarding and 
administering NPS leases. A federal agency may not conduct or sponsor, 
and a person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number.
    Six categories of information collection are contained in the rule: 
Section 18.7 (Request for Bids); Section 18.8 (Requests for 
Qualifications/Proposals); Section 18.12(c) (Subletting and Assignment 
of Leases); Section 18.12(i)-(j) (Approval of Lessee Construction/
Demolition); Section 18.12(l) (Approval of Lessee Encumbrances); and 
Section 18.12(k) (Amendment of Leases). NPS will use the information 
collected to make administrative decisions with respect to these six 
categories. The respondents to these collections will be NPS lessees 
and prospective NPS lessees. NPS anticipates that there will be a total 
of approximately six hundred respondents per year with respect to 
Sections 18.7 and 18.8 and a total of approximately twenty-seven 
respondents per year with respect to the other information collection 
categories. NPS estimates that the total annual reporting and 
recordkeeping burden that will result from these collections of 
information will be 4392 hours, as set forth in the following chart.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per
                             Section                                 responses       response       Total hours
----------------------------------------------------------------------------------------------------------------
Section 18.7....................................................             200               1             200
Section 18.8--Complex...........................................              20              40             800
Section 18.8--Simple............................................             380               8            3040
Section 18.12(c)--Complex.......................................               1              40              40
Section 18.12(c)--Simple........................................               4               8              32
Section 18.12(i)-(j)--Complex...................................               2              32              64
Section 18.12(i)-(j)--Simple....................................               8               8              64

[[Page 66759]]

 
Section 18.12(k)................................................               2               4               8
Section 18.12(l)--Complex.......................................               2              40              80
Section 18.12(l)--Simple........................................               8               8              64
                                                                 -----------------------------------------------
    Total.......................................................             627             7.0           4392
----------------------------------------------------------------------------------------------------------------
*(average)

    Please send comments regarding this burden or estimate or any other 
aspect of this collection of information, including suggestions for 
reducing the burden, to the Desk Officer for the Interior Department, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503 (with a copy to the Information Collection 
Officer, National Park Service, 1849 C Street, Washington, DC 20240. 
information technology).

National Environmental Policy Act

    This rule does not constitute a major federal action affecting the 
quality of the human environment. A detailed statement under the 
National Environment Policy Act is not required. The rule will not 
increase public use of park areas, introduce noncompatible uses into 
park areas, conflict with adjacent land ownerships or land uses, or 
cause a nuisance to property owners or occupants adjacent to park 
areas. Accordingly, this rule is categorically excluded from procedural 
requirements of the National Environmental Policy Act by 516 DM 6, App. 
7.4A(10).

Clarity of this Rule

    Executive Order 12866 requires federal agencies to write 
regulations that are easy to understand. Comment is invited on how to 
make this rule easier to understand, including answers to the following 
questions: (1) Are the requirements in the rule clearly stated?; (2) 
Does the rule contain undefined technical language or jargon that 
interferes with its clarity?; (3) Does the format of the rule 
(groupings and order of sections, use of headings, paragraphing, etc.) 
aid in or reduce its clarity?; (4) Would the rule be easier to 
understand if it were divided into more but shorter sections?; (5) Is 
the description of the rule in the Supplementary Information section of 
the preamble helpful in understanding the proposed rule?; (6) What else 
could be done to make the rule easier to understand? Please send a copy 
of any comments that concern how this rule could be made easier to 
understand to: Office of Regulatory Affairs, Department of the 
Interior, Room 7229, 1849 C Street NW, Washington, DC 20240.

List of Subjects in 36 CFR Part 18

    Historic preservation, National parks.


    In consideration of the foregoing, 36 CFR part 18 is revised to 
read as follows:

PART 18--LEASING OF PROPERTIES IN PARK AREAS

Sec.
18.1   What is the authority and purpose for this part?
18.2   What definitions do you need to know to understand this part?
18.3   What property may be leased?
18.4   What determinations must the Director make before leasing 
property?
18.5   May property be leased without receiving fair market value 
rent?
18.6   Are there limitations on the use of property leased under 
this part?
18.7   How are lease proposals solicited and selected if the 
Director issues a Request for Bids?
18.8   How are lease proposals solicited and selected if the 
Director issues a Request for Proposals?
18.9   When may the Director lease property without issuing a 
request for bids or a request for proposals?
18.10   How long can the term of a lease be?
18.11   What general provisions must a lease contain?
18.12   What specific provisions must a lease contain?

    Authority: 16 U.S.C. 1 et seq., particularly 16 U.S.C. 1a-2(k), 
and, 16 U.S.C. 470h-3.


Sec. 18.1  What is the authority and purpose for this part?

    16 U.S.C. 1 et seq., particularly 16 U.S.C. 1a-2(k), and, 16 U.S.C. 
470h-3 are the authorities for this part. These authorities allow the 
Director (or delegated officials) to lease certain federally owned or 
administered property located within the boundaries of park areas. All 
leases to be entered into by the Director under these authorities are 
subject to the requirements of this part, except that, proposed leases 
that were solicited pursuant to this part prior to January 28, 2002, 
may be executed in accordance with the terms of the solicitation.


Sec. 18.2  What definitions do you need to know to understand this 
part?

    In addition to the definitions contained in 36 CFR Part 1, the 
following definitions apply to this part:
    (a) Associated property means land and/or structures (e.g., parking 
lots, retaining walls, walkways, infrastructure facilities, farm 
fields) related to a building or buildings and their functional use and 
occupancy.
    (b) Building means an enclosed structure located within the 
boundaries of a park area and constructed with walls and a roof to 
serve a residential, industrial, commercial, agricultural or other 
human use.
     (c) Commercial use authorization means a written authorization to 
provide services to park area visitors issued by the Director pursuant 
to Section 418 of Public Law 105-391 and implementing regulations.
    (d) Concession contract has the meaning stated in 36 CFR part 51.
    (e) Fair market value rent means the most probable rent, as of a 
specific date, in cash or in terms equivalent to cash, for which the 
property to be leased, under the terms and conditions of the lease, 
should rent for its highest and best permitted use after reasonable 
exposure in a competitive market under all conditions requisite to a 
fair leasing opportunity, with the lessor and the lessee each acting 
prudently, knowledgeably, and for self-interest, and assuming that 
neither is under undue duress. Determinations of fair market value rent 
under this part are to be made taking into account the considerations 
stated in Sec. 18.5.
    (f) Historic building means a building or buildings located within 
the boundaries of a park area if the building is part of a pre-historic 
or historic district or site included on, or eligible for inclusion on, 
the National Register of Historic Places.
    (g) Historic land means land located within the boundaries of an 
historic property.
    (h) Historic property means building(s) and land located within the 
boundaries of a park area if the building(s) and land are part of a 
pre-historic or historic district or site

[[Page 66760]]

included on, or eligible for inclusion on, the National Register of 
Historic Places.
    (i) Land means unimproved real property.
    (j) Lease means a written contract entered into under the authority 
of this part through which use and possession of property is granted to 
a person for a specified period of time.
    (k) Non-historic building is a building (or buildings) and its 
associated property located within the boundaries of a park area but 
not part of a pre-historic or historic district or site included on, or 
eligible for inclusion on, the National Register of Historic Places.
    (l) Non-historic land means land located within the boundaries of a 
park area that is not associated property and is not part of a pre-
historic or historic district or site included on, or eligible for 
inclusion on, the National Register of Historic Places.
    (m) Non-historic property means building(s) and/or land that are 
located within the boundaries of a park area but are not part of a pre-
historic or historic district or site included on, or eligible for 
inclusion on, the National Register of Historic Places.
    (n) Park area means a unit of the national park system.
    (o) Property means both historic and non-historic property that is 
located within the boundaries of a park area and is federally owned or 
administered.
    (p) Request for bids refers to the lease bid process described in 
Sec. 18.7.
    (q) Request for proposals refers to the lease proposal process 
described in Sec. 18.8.
    (r) Responsive bid or proposal means a timely submitted bid or 
proposal that meets the material requirements of a request for bids or 
a request for proposals.


Sec. 18.3  What property may be leased?

    (a) In general. The Director may lease any property (except non-
historic land) under this part if the Director makes the determinations 
required by Sec. 18.4.
    (b) Non-historic land. Non-historic land may not be leased under 
this part. Certain non-historic land is eligible for leasing under 36 
CFR part 17.


Sec. 18.4  What determinations must the Director make before leasing 
property?

    Before leasing property in a park area under this part, the 
Director must determine that:
    (a) The lease will not result in degradation of the purposes and 
values of the park area;
    (b) The lease will not deprive the park area of property necessary 
for appropriate park protection, interpretation, visitor enjoyment, or 
administration of the park area;
    (c) The lease contains such terms and conditions as will assure the 
leased property will be used for activity and in a manner that are 
consistent with the purposes established by law for the park area in 
which the property is located;
    (d) The lease is compatible with the programs of the National Park 
Service;
    (e) The lease is for rent at least equal to the fair market value 
rent of the leased property as described in Sec. 18.5;
    (f) The proposed activities under the lease are not subject to 
authorization through a concession contract, commercial use 
authorization or similar instrument; and
    (g) If the lease is to include historic property, the lease will 
adequately insure the preservation of the historic property.


Sec. 18.5  May property be leased without receiving fair market value 
rent?

    Property may be leased under this part only if the lease requires 
payment of rent to the government equal to or higher than the 
property's fair market value rent. The determination of fair market 
value rent shall take into account:
    (a) Any restrictions on the use of the property or terms of the 
lease that limit the value and/or the highest and best use of the 
property; and
    (b) Any requirements under the lease for the lessee to restore, 
rehabilitate or otherwise improve the leased property.


Sec. 18.6  Are there limitations on the use of property leased under 
this part?

    (a) A lease issued under this part may authorize the use of the 
leased property for any lawful purpose, subject to the determinations 
required by Sec. 18.4 and the limitations on activities set forth in 
paragraph (b) of this section.
    (b) Unless otherwise authorized by law, a lease issued under this 
part may not authorize the lessee to engage in activities that are 
subject to authorization through a concession contract, commercial use 
authorization or similar instrument. Proposed lease activities are 
subject to authorization under a concession contract if the Director 
determines in accordance with 36 CFR part 51 and park area planning 
documents and related guidelines and policies that the proposed 
activities meet applicable requirements for issuance of a concession 
contract. Proposed activities are subject to authorization under a 
commercial use authorization if the Director determines in accordance 
with park area planning documents and related guidelines and policies 
that the proposed activities meet applicable requirements for issuance 
of a commercial use authorization.


Sec. 18.7  How are lease proposals solicited and selected if the 
Director issues a Request for Bids?

    (a) If the amount of the rent is the only criterion for award of a 
lease, the Director may solicit bids through issuance of a request for 
bids as described in this section. If historic property is to be leased 
under the authority of this section, the Director must comply with 36 
CFR part 800 (commenting procedures of the Advisory Council on Historic 
Preservation) at an appropriate time during the leasing process.
    (b) A request for bids under this section shall be advertised by 
public notice published at least twice in local and/or national 
newspapers of general circulation. The notice shall provide at least a 
thirty (30) day period from the last date of publication for the 
submission of sealed bids. The notice will provide necessary 
information to prospective bidders. It may specify a minimum rent and/
or require submission of a rent deposit or advance rent payment. Bids 
will be considered only if timely received at the place designated in 
the request. Bids must be in the form specified by the Director, or, if 
no form is specified, a bid must be in writing, signed by the bidder or 
authorized representative, state the amount of the bid, and refer to 
the applicable public notice. If the notice requires submission of a 
rent deposit or advance rent payment, the bids must include the 
required funds in the form of a certified check, post office money 
order, bank drafts, or cashier's checks made out to the United States 
of America. The bid (and payment where applicable) must be enclosed in 
a sealed envelope upon which the bidder shall write: ``Bid on lease of 
property of the National Park Service'' and shall note the date the 
bids are to be opened.
    (c) Bids will be opened publicly by the Director at a time and 
place specified in the public notice. Bidders or their representatives 
may attend the bid opening. The bidder submitting a responsive bid 
offering the highest rent will be selected for award of the lease 
(subject to a determination of financial capability by the Director). A 
responsive bid is a bid that meets the material terms and conditions of 
the request for bids. The Director shall accept no bid in an amount 
less than the fair market rental value as determined by the Director. 
If two or more bids are equal, a drawing shall make the lease award by 
lot limited to the equal responsive bids received.
    (d) When a property is to be leased through a request for bids, the 
bidder that is declared by the Director to be the

[[Page 66761]]

high bidder shall be bound by his bid and this part to execute the 
offered lease, unless the bid is rejected. If the declared high bidder 
fails to enter into the lease for any reason, the Director may choose 
to enter into the lease with the next highest bidder (if that bidder 
offered to pay at least the fair market rent value). The Director may 
reject any and all bids in his discretion and resolicit or cancel a 
lease solicitation under this part at any time without liability to any 
person.


Sec. 18.8  How are lease proposals solicited and selected if the 
Director issues a Request for Proposals?

     (a) When the award of a lease is to be based on selection criteria 
in addition to or other than the amount of the rent, the Director must, 
subject to Sec. 18.9, solicit proposals for the lease through issuance 
of a public Request for Proposals (RFP).
    (b) An RFP may be preceded by issuance of a public Request for 
Qualifications (RFQ). The purpose of an RFQ is to select a ``short 
list'' of potential offerors that meet minimum management, financial 
and other qualifications necessary for submission of a proposal in 
response to an RFP. If the Director issues an RFQ, only persons 
determined as qualified by the Director under the terms of the RFQ 
shall be eligible to submit a proposal under the related RFP.
    (c) The Director must provide public notice of the leasing 
opportunity by publication at least twice in local and/or national 
newspapers of general circulation and/or through publication in the 
Commerce Business Daily. The public notice shall contain general 
information about the leasing opportunity and advise interested persons 
how to obtain a copy of the RFP (or RFQ where applicable). The RFP (and 
RFQ where applicable) shall contain appropriate information about the 
property proposed for lease, including limitations on the uses of the 
property to be leased, information concerning the leasing process, 
information and materials that must be contained in a proposal, the 
time and place for submission of proposals, terms and conditions of the 
lease, and the criteria under which the Director will evaluate 
proposals. The RFP may state the fair market value rent as the minimum 
acceptable rent if determined by the Director at that time. The RFP 
(and RFQ where applicable) must allow at least sixty (60) days for 
submission of proposals (or qualifications under an RFQ) unless a 
shorter period of time is determined to be sufficient in the 
circumstances of a particular solicitation.
    (d) The Director may determine that a proposal is non-responsive 
and not consider it further. A non-responsive proposal is a proposal 
that was not timely submitted or fails to meet the material terms and 
conditions of the RFP. After the submission of offers and prior to the 
selection of the best overall proposal, the Director may request from 
any offeror additional information or written clarification of a 
proposal, provided that proposals may not be amended after the 
submission date unless all offerors that submitted responsive proposals 
are given an opportunity to amend their proposals. The Director may 
choose to reject all proposals received at any time and resolicit or 
cancel a solicitation under this part without liability to any person.
    (e) (1) The criteria to be used in selection of the best proposal 
are:
    (i) The compatibility of the proposal's intended use of the leased 
property with respect to preservation, protection, and visitor 
enjoyment of the park;
    (ii) The financial capability of the offeror to carry out the terms 
of the lease;
    (iii) The experience of the offeror demonstrating the managerial 
capability to carry out the terms of the lease;
    (iv) The ability and commitment of the offeror to conduct its 
activities in the park area in an environmentally enhancing manner 
through, among other programs and actions, energy conservation, waste 
reduction, and recycling; and
    (v) Any other criteria the RFP may specify.
    (2) If the property to be leased is an historic property, the 
compatibility of the proposal with the historic qualities of the 
property shall be an additional selection criterion. If the RFP 
requires proposals to include the amount of rent offered, the amount of 
rent offered also shall be an additional selection criterion.
    (f) The Director will evaluate all responsive proposals received. 
The responsive proposal determined by the Director to best meet on an 
overall basis the evaluation criteria will be selected for negotiation 
of the lease. If two or more responsive proposals are determined by the 
Director to be substantially equal under the evaluation criteria, the 
Director shall provide an opportunity for those proposals to be amended 
by their offerors as necessary for the Director to select the best 
amended proposal. In such circumstances, the Director will provide each 
offeror that submitted a substantially equal proposal appropriate 
information as to how their proposals may be amended in order to 
enhance the possibility of selection as the best amended proposal. If 
two or more proposals remain as substantially equal after amendment, 
the Director will select for negotiation of the lease from among these 
proposals the proposal that the Director determines on an overall basis 
will be most beneficial to effective management of the park area.
    (g) The Director will provide the offeror that submitted the best 
overall responsive proposal as determined by the Director a specified 
period of time to negotiate the final terms of the lease (and may enter 
into a letter of intent to negotiate in this connection). The final 
terms of the lease must be consistent with the requirements of the RFP. 
If the negotiations do not result in an executed lease within the 
specified time period, the Director, in his discretion, may extend the 
negotiation period, terminate negotiations and negotiate with the 
offeror that submitted the next best responsive proposal, or, cancel 
the solicitation.
    (h) RFPs may state that the amount of rent to be paid will be 
negotiated subsequently with the offeror that submitted the best 
proposal, initially or as amended. The Director may execute a lease 
only if the Director determines that it requires the lessee to pay at 
least the fair market value rent of the leased property.
    (i) The Director may execute a lease that includes historic 
property only after complying with 36 CFR part 800 (commenting 
procedures of the Advisory Council on Historic Preservation).


Sec. 18.9  When may the Director lease property without issuing a 
request for bids or a request for proposals?

    The Director, except as provided in this section, may not lease 
property without issuing a request for bids or a request for proposals 
in compliance with Sec. 18.7 or Sec. 18.8. The Director under this part 
may enter into leases with non-profit organizations (recognized as such 
by the Internal Revenue Service) or units of government without 
complying with Sec. Sec. 18.7 or 18.8 if the Director determines that 
the non-profit or governmental use of the property will contribute to 
the purposes and programs of the park area. All other requirements of 
this part are applicable to leases entered into or to be entered into 
under authority of this section. The Director may enter into leases 
under this part with a term of sixty (60) days or less without 
complying with Sec. Sec. 18.7 or 18.8 if the Director determines that 
to do so is in the best interests of the administration of the park 
area. If historic land is to be leased under the

[[Page 66762]]

authority of this section, the Director must comply with 36 CFR part 
800 (commenting procedures of the Advisory Council on Historic 
Preservation) before entering into the lease.


Sec. 18.10  How long can the term of a lease be?

    All leases entered into under this part shall have as short a term 
as possible, taking into account the financial obligations of the 
lessee and other factors related to determining an appropriate lease 
term. No lease shall have a term of more than 60 years. Leases entered 
under the authority of this part may not be extended, except that, 
leases with an initial term of one (1) year or more may be extended 
once for a period not to exceed one (1) additional year if the Director 
determines that an extension is necessary because of circumstances 
beyond the Director's control.


Sec. 18.11  What general provisions must a lease contain?

    All leases entered into under this part must contain terms and 
conditions that are determined necessary by the Director to assure use 
of the leased property in a manner consistent with the purposes of the 
applicable park area as established by law, and where applicable, to 
assure the preservation of historic property.


Sec. 18.12  What specific provisions must a lease contain?

    All leases entered into under this part must contain:
    (a) A termination for cause or default provision;
    (b) Appropriate provisions requiring the lessee to maintain the 
leased property in good condition throughout the term of the lease;
    (c) Appropriate provisions stating that subletting of a portion of 
the leased property and assignment of a lease, if permissible under the 
terms of the lease, must be subject to the Director's written approval. 
Such subleases and assignments shall be approved only of the Director 
determines, among other relevant matters, that the proposed sub-lessee 
or assignee is financially and managerially capable of carrying out the 
terms of the lease. Assignment of a lease for the purpose of 
effectuating an encumbrance to the lease or the leased property is 
subject to approval pursuant to the requirements of paragraph (l) of 
this section;
    (d) Appropriate provisions requiring the lessee to secure and 
maintain from responsible companies liability insurance sufficient to 
cover losses connected with or occasioned by the use and activities 
authorized by the lease. Types and amounts of insurance coverage will 
be specified in writing and periodically reviewed by the Director;
    (e) Appropriate provisions, unless the Director determines 
otherwise in the circumstances of a particular lease, requiring the 
lessee to obtain from responsible companies casualty insurance 
(including flood insurance if applicable) in an amount sufficient to 
protect the interests of the lessee and the government. In the event of 
casualty, the lessee shall be required to repair or replace damaged or 
destroyed property unless otherwise determined by the Director;
    (f) Appropriate provisions requiring the lessee to save, hold 
harmless, and indemnify the United States of America and its agents and 
employees for all losses, damages, or judgments and expenses resulting 
from personal injury, death or property damage of any nature arising 
out of the lessee's activities under the lease, and/or the activities 
of the lessee's employees, subcontractors, sub-lessees, or agents. No 
lease entered into this part may contain provisions intended to provide 
indemnification or other assurances to the lessee regarding the conduct 
or activities of the Director concerning the lease or the 
administration of the applicable park area. Leases may contain 
appropriate provisions that commit the Director to accept 
responsibility for tortious actions of government officials to the 
extent authorized by the Federal Torts Claim Act or as otherwise 
expressly authorized by law;
    (g) Appropriate provisions requiring the lessee to pay for use of 
all utilities used by the lessee and to pay all taxes and assessments 
imposed by federal, state, or local agencies applicable to the leased 
property or to lessee activities;
    (h) Appropriate provisions stating that the lessee has no rights of 
renewal of the lease or to the award of a new lease upon lease 
termination or expiration and that the lease is subject to cancellation 
by the Director in the exercise of the sovereign authority of the 
United States to the extent provided by applicable law;
    (i) Appropriate provisions stating that the lessee may not 
construct new buildings or structures on leased property, provided 
that, a lease may contain appropriate provisions that authorize the 
lessee to construct, subject to the prior written approval of the 
Director, minor additions, buildings and/or structures determined by 
the Director to be necessary for support of the authorized activities 
of the lessee and otherwise to be consistent with the protection and 
purposes of the park area. Approval by the Director of new construction 
may only be granted if the Director makes the determinations required 
by Sec. 18.4;
    (j) Appropriate provisions requiring that:
    (1) Any improvements to or demolition of leased property to be made 
by the lessee may be undertaken only with written approval from the 
Director;
    (2) That any improvements to or demolition of historic property may 
only be approved if the Director determines that the improvements or 
demolition complies with the Secretary of the Interior's Standards for 
the Treatment of Historic Properties (36 CFR part 68); and
    (3) Any improvements made by a lessee shall be the property of the 
United States;
    (k) Appropriate provisions that describe and limit the type of 
activities that may be conducted by the lessee on the leased property. 
The types of activities described in a lease may be modified from time 
to time with the approval of the Director through an amendment to the 
lease. The Director may approve modified activities only if the 
determinations required by Sec. 18.4 remain valid under the proposed 
modified activities and the proposed activities are otherwise 
determined appropriate by the Director;
    (l) Appropriate provisions, unless the Director determines not to 
permit pledges or encumbrances in the circumstances of a particular 
lease, authorizing the lessee to pledge or encumber the lease as 
security, provided that any pledge or encumbrance of the lease and the 
proposed holder of the pledge or encumbrance must be approved in 
writing in advance by the Director and that a pledge or encumbrance may 
only grant the holder the right, in the event of a foreclosure, to 
assume the responsibilities of the lessee under the lease or to select 
a new lessee subject to the approval of the Director. Pledges or 
encumbrances may not grant the holder the right to alter or amend in 
any manner the terms of the lease;
    (m) Appropriate provisions stating that fulfillment of any 
obligations of the government under the lease is subject to the 
availability of appropriated funds. No lease issued under authority of 
this part shall entitle the lessee to claim benefits under the Uniform 
Relocation Assistance Act of 1970 (Public Law 91-646) and all leases 
entered into under the authority of this part shall require the lessee 
to waive any such benefits; and

[[Page 66763]]

    (n) Appropriate provisions granting the Director and the 
Comptroller General access to the records of the lessee as necessary 
for lease administration purposes and/or as provided by applicable law.

    Dated: July 19, 2001.
Joseph E. Doddridge,
Acting Assistant Secretary for, Fish and Wildlife and Parks.
[FR Doc. 01-31201 Filed 12-26-01; 8:45 am]
BILLING CODE 4310-70-P