[Federal Register Volume 68, Number 112 (Wednesday, June 11, 2003)]
[Rules and Regulations]
[Pages 35116-35124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14630]



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Part III





Department of the Interior





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Forest Service



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36 CFR Part 251



Land Uses; Revenue-Producing Visitor Services in Alaska; Final Rule

  Federal Register / Vol. 68, No. 112 / Wednesday, June 11, 2003 / 
Rules and Regulations  

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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 251

RIN 0596-AB57


Land Uses; Revenue-Producing Visitor Services in Alaska

AGENCY: Forest Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department is adopting regulations to establish procedures 
by which certain persons may conduct revenue-producing visitor services 
in Conservation System Units within the National Forests in Alaska. 
These regulations are required by section 1307 of the Alaska National 
Interest Lands Conservation Act. This final rule will guide the 
solicitation, selection of applications, and issuance of permits for 
visitor services within Conservation System Units for the National 
Forests in Alaska. The intent is to establish workable procedures for 
recognizing and administering statutory rights and preferences for 
conducting visitor services within these units.

EFFECTIVE DATE: This rule is effective July 11, 2003.

FOR FURTHER INFORMATION CONTACT: Neil Hagadorn, Recreation, Lands, and 
Minerals Staff, Alaska Region, P.O. Box 21628, Juneau, Alaska 99802, 
(907) 586-9336.

SUPPLEMENTARY INFORMATION:

Statutory Requirements

    The Alaska National Interest Lands Conservation Act (ANILCA) (16 
U.S.C. 3101 et seq.) provides for the disposition and use of a variety 
of federally administered lands in Alaska. Section 1307 (16 U.S.C. 
3197) contains two provisions concerning persons and entities who are 
to be given special rights and preferences with respect to revenue-
producing visitor services on certain lands designated by ANILCA as 
Conservation Units (CSUs) under the administration of the Secretary of 
Agriculture.
    Under section 102(4) of ANILCA, a CSU, as it relates to the 
National Forests, means any unit in Alaska of the National Wild and 
Scenic Rivers System, National Trails System, and National Wilderness 
Preservation System, or a National Forest Monument, including existing 
units or any such unit established, designated, or expanded hereafter 
(16 U.S.C. 3102(4)).
    Section 1307(a) of ANILCA (16 U.S.C. 3197(a)) provides that, 
notwithstanding any other provision of law, the Secretary of 
Agriculture, under such terms and conditions as the Secretary deems 
reasonable, shall allow any person who, on or before January 1, 1979, 
was engaged in adequately providing any type of visitor service within 
any area established as, or added to a CSU, to continue providing that 
type of service and similar types of visitor services within that CSU, 
if those services are consistent with the purposes for which the CSU 
was established or expanded.
    Section 1307(b) of ANILCA (16 U.S.C. 3197(b)) provides that in 
selecting a person to provide any type of visitor service for any CSU, 
except sport fishing and hunting guiding activities, and except as 
provided in section 1307(a), the Secretary of Agriculture shall (1) 
give preference to the Native Corporation which the Secretary 
determines is most directly affected by the establishment or expansion 
of that CSU; and (2) give preference to persons determined to be local 
residents.
    Section 1307(c) of ANILCA (16 U.S.C. 3197(c)) defines ``visitor 
service'' to mean any service made available for a fee or charge to 
persons who visit a CSU, including such services as providing food, 
accommodations, transportation, tours, and outfitting and guiding, 
except the guiding of sport hunting and fishing.

Summary of Public Comments

    The Forest Service proposed rule at 36 CFR part 251, subpart E, was 
published in the Federal Register on April 25, 1997 (62 FR 20140) and 
provided for a 60-day comment period ending June 24, 1997. Efforts to 
notify the public of this proposal included news releases, published 
legal notices, and notification letters to permit holders, Native 
Corporations in southeast and southcentral Alaska, and Federal, State, 
and local community officials. Four written comments on the proposed 
rule were received: One from the State of Alaska, two from Native 
Corporations, and one from a private, nonprofit corporation.
    Most of the comments dealt with (1) Sec.  251.120, involving the 
scope and applicability of the regulations; (2) Sec.  251.122, the 
process of how historical rights would be determined; and (3) Sec.  
251.123, the administration of preferred operator preferences, 
including the effect of the regulations on other operators without 
preferred status. No comments were received on the information 
collection requirements or criteria for determining the most directly 
affected Native Corporation status. One Native Corporation responded 
enthusiastically about the prospect for participating in the visitor 
industry and requested a determination of most directly affected 
status. Minor changes have been made in the final rule to respond to 
the comments received and to achieve clarity and consistency with 
Forest Service policy. In addition, to be consistent with section 1307 
of ANILCA, the final rule will apply only to CSUs on the Tongass and 
Chugach National Forests in Alaska and not to other designations of 
National Forest System lands.

Interagency Coordination

    The Forest Service has coordinated with the National Park Service 
and the U.S. Fish and Wildlife Service in the U.S. Department of the 
Interior in the development of this final rule. While not identical, 
this final rule is consistent (insofar as is practical within the 
framework of each agency's legal mandates) with provisions of the final 
rules of the U.S. Department of the Interior implementing section 1307 
of ANILCA for the National Park Service at 36 CFR part 13 (61 FR 54334, 
Oct. 18, 1996) and for the U.S. Fish and Wildlife Service at 50 CFR 
part 36 (62 FR 1838, Jan. 14, 1997).

Analysis of Public Comments and Section-by-Section Description of Final 
Rule

    The following is an analysis of public comments received on the 
proposed rule and a section-by-section description of the final rule 
for revenue-producing visitor services in Alaska.

Section 251.120 Scope and Applicability

    Section 251.120 of the proposed rule explained that the regulations 
at subpart E would implement section 1307 of ANILCA with regard to the 
continuation of visitor services existing as of January 1, 1979. It 
also explained the preferences granted to local residents and certain 
Native Corporations for obtaining special use authorizations for 
visitor services on designated lands within National Forest System 
lands in Alaska. The proposed rule stated that the provisions of 
subpart E would apply only to existing and future Forest Service-
administered CSUs in Alaska, not to all National Forest System lands, 
and provided a comprehensive list of CSUs within the Tongass and 
Chugach National Forests.
    This section also explained that existing regulations in 36 CFR 
part 251, subpart B, apply to all requests involving revenue-producing 
visitor services in Alaska unless expressly waived by subpart E, and 
that subpart E would not apply to the guiding of sport hunting and 
fishing.

[[Page 35117]]

    The following is an analysis of and response to comments received 
on Sec.  251.120 of the proposed rule.
    Comment: The State of Alaska wanted the Forest Service to clarify 
that the proposed regulations would not apply to State-owned lands and 
waters, including navigable waters, shore lands, tidelands, and 
submerged lands within the boundaries of national forests in Alaska. 
The State of Alaska contends that these lands and waters are, and will 
continue to be, managed and regulated by the State.
    Response: The regulations at 36 CFR part 251, subpart E, apply only 
to CSUs, which, in accordance with section 103(c) of ANILCA, exclude 
State and private lands. To provide further clarification of the 
application of subpart E, the words ``National Forest System lands'' 
have been added to Sec.  251.120(a) in the final rule.
    Comment: The State of Alaska believed that it was unclear whether 
the proposed regulation applied to the Nellie Juan-College Fiord 
Wilderness Study Area and to rivers identified as eligible for 
inclusion in the Wild and Scenic Rivers System. The State of Alaska 
supported application of these regulations to the wilderness study area 
and to these rivers.
    Response: Section 102(4) of ANILCA defines CSUs as existing units 
or units that are established, designated, or expanded in the future. 
Therefore, the statutory rights and preferences created by section 1307 
of ANILCA do not apply to study areas or areas identified as eligible 
units of the Wild and Scenic Rivers System. To clarify the 
applicability of the regulations, the following wording based on 
section 102(4) of ANILCA has been added to the end of the definition of 
``Conservation System Unit'' in Sec.  251.121 of the final rule: ``* * 
* including existing units and any such unit established, designated, 
or expanded hereafter.''
    Comment: One respondent stated that section 506 of ANILCA provides 
certain Alaska natives specific rights on Admiralty Island in addition 
to the more general rights granted by section 1307 of ANILCA.
    Response: Section 506 of ANILCA addresses a number of specific 
lands issues associated with the Admiralty Island National Monument 
that involve several Native Corporations, including a provision for 
consultation and cooperation in the management of specific lands with 
Kootznoowoo, Incorporated. The regulations at 36 CFR part 251, subpart 
E, are not intended to diminish or supersede the provisions of section 
506 of ANILCA; therefore, no change has been made in the final rule 
with regard to this issue.
    In the final rule, the Department has added a sentence to Sec.  
251.120(b) providing that in case of a conflict between subpart B and 
subpart E, subpart E controls.

Section 251.121 Definitions

    Proposed Sec.  251.121 provided definitions for special terms used 
in the regulations. No public comments were received on Sec.  251.121. 
However, the Department has made minor changes in the final rule to 
clarify definitions, revise references, and maintain a format 
consistent with subpart B.
    The term best offer in the proposed rule has been changed to best 
application in the final rule for consistency with the agency's 
competitive application process.
    The definition of Conservation System Unit has been clarified to 
address the applicability of the rule to future CSUs and to additions 
to existing CSUs, consistent with the wording in section 102(4) of 
ANILCA. This change was made in response to a comment from the State of 
Alaska regarding application of the rule to Wilderness Study areas and 
areas eligible for inclusion in the Wild and Scenic Rivers System.
    The definition of controlling interest has been revised by adding 
the phrase ``or its capital'' following ``the entity'' to clarify that 
a controlling interest includes ownership of capital assets. 
Additionally, the word ``business,'' which preceded the word 
``entity,'' has been deleted because it was unnecessary.
    The definition of historical operator has been simplified to remove 
the word ``current'' as a description of a holder because the three 
criteria adequately describe a qualifying holder. Additionally, the 
words ``revenue-producing'' as a description of visitor services have 
been removed because this concept applies to all of subpart E and is 
addressed in its title.
    Local area in the proposed rule was defined as ``that area within 
100 miles * * *'' In the final rule, the definition has been modified 
to read ``any site within 100 miles * * *'' to allow for greater 
specificity in determining the point to which a measurement will be 
made.
    The definition of local resident for individuals has been changed 
by adding the phrase ``Alaska residents.'' This revision clarifies the 
intent of the proposed rule that persons otherwise qualifying as local 
area residents must be Alaska residents. Additionally, the other 
entities in which a controlling interest may be held that are 
referenced in the definition for controlling interest have been added 
to paragraph (2) of the definition for local resident. Finally, the 
following sentence was removed from the definition for local resident 
and inserted at Sec.  251.124(d) to improve the organization and 
clarity of the rule: ``Factors demonstrating the location of an 
individual's primary, permanent residence and business include, but are 
not limited to, the permanent address indicated on licenses issued by 
the State of Alaska, tax returns, and voter registration.''
    In the definition for preferred operator, the reference to Sec.  
251.124 has been changed to Sec.  251.123, and the reference to Sec.  
251.123 has been changed to Sec.  251.124, in accordance with the 
renumbering of those sections in the final rule, as discussed in the 
following descriptions of those sections.
    Responsive offer has been changed to responsive application in the 
final rule for consistency with nomenclature in the agency's 
competitive application process. The phrase ``terms and conditions'' 
was replaced with ``requirements'' because ``terms and conditions'' are 
contained in a permit, not a prospectus.

Section 251.122 Historical Operator Special Use Authorizations

    Section 251.122 of the proposed rule provided that persons who were 
adequately providing visitor services within CSUs on National Forest 
System lands in Alaska prior to January 1, 1979, would be permitted to 
continue to provide those services and similar types of services under 
appropriate terms and conditions, if these services are consistent with 
the purposes for which the CSUs were established or expanded. 
Consequently, persons who, on or before January 1, 1979, were engaged 
in adequately providing any type of visitor service within a CSU in 
Alaska, have continued to provide that visitor service and have 
retained the controlling interest in the business providing the visitor 
service, would be considered ``historical operators'' under these 
regulations and would be entitled to the rights conferred by section 
1307(a) of ANILCA. However, a right to continue to provide visitor 
services under section 1307(a) is not unlimited; rather, it is 
subordinate to the management of the CSU and does not grant a monopoly 
to provide all visitor services in a given area to the exclusion of 
other individuals or entities.
    This section of the proposed rule also specified under what 
circumstances the rights of a historical operator would be lost. These 
included revocation due to failure to comply with special use

[[Page 35118]]

authorization terms and conditions; refusal of an offer to reissue a 
special use authorization; and failure to provide authorized services 
for 24 consecutive months. In addition, the rights of a historical 
operator would terminate upon a change in the controlling interest in 
the business providing the visitor services, unless the controlling 
interest passed to those who otherwise qualify as historical operators.
    The following is an analysis of and response to a comment on Sec.  
251.122 of the proposed rule.
    Comment: One respondent suggested that a provision be added to 
Sec.  251.122 to require that before making a decision to grant 
historical operator status, the authorized officer notify any Native 
Corporations that have applied for designation as the most directly 
affected Native Corporation for the CSU and give them the opportunity 
to comment before making the determination. The respondent stated that 
notice and opportunity to comment are equitable and consistent with due 
process because a determination granting historical operator status for 
a particular CSU may defeat the most directly affected Native 
Corporation's preference right within the same CSU. According to the 
respondent, information that can be provided by the most directly 
affected Native Corporation should, therefore, be obtained before any 
final determination is made regarding historical operator rights within 
an affected CSU.
    Response: The Department disagrees with this respondent and has not 
revised the rule to require notice and comment prior to granting 
historical operator status because the Department disagrees that a 
determination granting historical operator status for a particular CSU 
may defeat a most directly affected Native Corporation's preference 
right within the same CSU. Historical operator rights conferred by 
section 1307(a) of ANILCA are separate from the preferences granted to 
local residents and most directly affected Native Corporations under 
section 1307(b) of ANILCA. In addition, historical operator 
determinations are based on objective, specific statutory criteria 
applied to information contained in established special use 
authorization files. Consequently, the Department believes that public 
notice and comment would be an unnecessary administrative burden and 
would not greatly aid in making historical operator determinations. 
Finally, the Department wants its rule to be as consistent as possible 
with the final rules published by the National Park Service and the 
U.S. Fish and Wildlife Service, neither of which provides for public 
notice and comment in connection with historical operator 
determinations.
    In the final rule, the Department has added a paragraph to Sec.  
251.122 to address a concept in the statute that was omitted in the 
proposed rule. The new paragraph (c) clarifies that a historical 
operator may apply for an authorization to provide visitor services 
similar to but in lieu of those provided by that historical operator 
before January 1, 1979, and specifies the criteria under which that 
type of application will be granted. The new language is almost 
identical to the language governing this subject in the National Park 
Service rule. Under this new provision, the authorized officer shall 
approve the application if the visitor services to be provided are (1) 
similar in kind and scope to the visitor services provided by the 
historical operator before January 1, 1979; (2) consistent with the 
purposes for which the applicable CSU was established or expanded; and 
(3) consistent with the legal rights of any other person.
    A corresponding change was made to paragraph (i) to clarify that 
the preference granted to historical operators applies only to the use 
authorized pursuant to paragraph (d). Any increase in the scope or 
level of use authorized pursuant to paragraph (d) for either the same 
or similar services is not subject to the preference granted to 
historical operators.
    In the final rule, a sentence has been added to paragraph 
(e)(2)(ii) to make it clear that when only historical operators 
participate in a competitive process to allocate use because reductions 
in visitor capacity make it necessary to reduce operators in an area, 
they may not claim a preference as a preferred operator under Sec.  
124.

Section 251.123--Most Directly Affected Native Corporation 
Determination

    Proposed Sec.  251.124 (which has been redesignated at Sec.  
251.123 in the final rule) specified the process for making the most 
directly affected Native Corporation determination.
    No comments were received on this section, and no comments were 
received on the related information requirements or the process for 
applying for most directly affected Native Corporation status.
    In addition to the change in the numbering of this section in the 
final rule, the Department is replacing the phrases ``more than one 
Native Corporation is'' with ``two or more Native Corporations are,'' 
and ``within the meaning of this section'' with ``for purposes of the 
most directly affected Native Corporation determination pursuant to 
this section.'' These changes clarify that if two or more Native 
Corporations are determined to be equally affected for purposes of the 
most directly affected Native Corporation determination, each of those 
Native Corporations is considered a preferred operator.

Section 251.124--Preferred Operator Competitive Special Use 
Authorization Procedures

    Section 251.123 of the proposed rule, which has been redesignated 
at Sec.  251.124 in the final rule, provided for implementation of 
section 1307(b) of ANILCA and would grant a preference to local 
residents (as defined in proposed Sec.  251.121) and to most directly 
affected Native Corporations, as determined under proposed Sec.  
251.124 (Sec.  251.123 of the final rule), in the competitive issuance 
of special use authorizations to provide visitor services in CSUs. In 
the proposed and final rules, local residents and most directly 
affected Native Corporations are collectively referred to as 
``preferred operators'' and have equal preference in the issuance of a 
special use authorization.
    This section further provided that if a preferred operator's offer 
under this subpart was in the form of a joint venture, the offer would 
be considered valid only when it is documented to the satisfaction of 
the authorized officer that the preferred operator holds the 
controlling interest in the joint venture. Additionally, Native 
Corporations and local residents who submitted an offer in the form of 
a joint venture with other persons would retain their preferred 
operator status as long as the Native Corporations or local residents 
have the controlling interest in the joint venture. This provision 
would allow flexibility without compromising the statutory intent of 
section 1307 of ANILCA.
    Section 251.123 in the proposed rule is redesignated Sec.  251.124 
in the final rule, and Sec.  251.124 in the proposed rule is 
redesignated Sec.  251.123 in the final rule. The new sequence in the 
final rule is more logical for two reasons: (1) The section governing 
the determination of most directly affected Native Corporation status 
(Sec.  251.123) now precedes the section in the final rule governing 
the competitive selection process (Sec.  251.124), where the preference 
for most directly affected Native Corporations is applied; and (2) the 
section addressing preferred operator competitive special use 
authorization procedures (Sec.  251.124) now precedes the section 
governing preferred operator privileges and limitations (Sec.  
251.125).

[[Page 35119]]

    Proposed Sec.  251.123(a) (Sec.  251.124(a) in the final rule) set 
out a procedure for the solicitation and issuance of special use 
authorizations that would effectuate the rights of preferred operators 
under section 1307(b) of ANILCA. The proposed rule provided that an 
authorized officer must publicly solicit offers to provide visitor 
services by issuing a prospectus, when the Forest Service determines 
that:
    (1) There is a need for visitor services within the area of a CSU;
    (2) There is a need to limit authorized visitor use in the area 
and/or the number of authorized operators;
    (3) There is an opportunity for competitive bidding to provide such 
services; and
    (4) The proposed visitor services are consistent with the Forest 
Plan direction and all applicable laws and regulations.
    In all other situations, except as provided in proposed Sec.  
251.122 for historical operators, special use authorizations would be 
issued noncompetitively on a first-come, first-served basis upon 
application to the authorized officer in accordance with the provisions 
at 36 CFR part 251, subpart B.
    The following is an analysis of and response to a comment received 
on Sec.  251.123(a) of the proposed rule (now Sec.  251.124(a) of the 
final rule).
    Comment: One respondent was concerned about the process the Forest 
Service would use to determine when authorized use needs to be 
restricted. The respondent stated that determination to restrict use 
should be made only as part of the public planning process, with 
adequate opportunity for notice and comment prior to implementation of 
restrictions.
    Response: The Department agrees with this respondent. Existing 
Forest Service policy provides that decisions to limit use be made in 
accordance with the National Environmental Policy Act of 1969, its 
implementing regulations, and Forest Service Manual (FSM) 1950, which 
provides for public notice and comment. Additionally, land use 
allocations are made through the forest planning process and delineated 
in Forest land and resource management plans. Therefore, no changes 
were made in the final rule in response to this comment.
    The Department has made the following changes to proposed Sec.  
251.123(a), which has been redesignated as Sec.  251.124(a) in the 
final rule. The requirement for public solicitation through issuance of 
a prospectus has been moved to Sec.  251.124(b) in the final rule. The 
remaining provisions in Sec.  251.123(a) of the proposed rule have been 
removed in their entirety since they duplicate agency policy in Forest 
Service Manual (FSM) 2712 and 2343 and in Forest Service Handbook (FSH) 
2709.11, chapter 40, that applies to a competitive selection process 
and establishment of limitations on use. Section 251.124(a) of the 
final rule is similar to Sec.  13.85 of the final National Park Service 
rule, which provides that a preference shall be given to a preferred 
operator when a competitive selection process is used to select a 
provider for visitor services.
    Proposed Sec.  251.123(b) (Sec.  251.124(b) in the final rule) 
specified the evaluation criteria that would be used to select an 
applicant. There were no comments on proposed Sec.  251.123(b). 
However, the Department has made the following changes in the final 
Sec.  251.124(b). The provisions contained in Sec.  251.123(b) of the 
proposed rule have been removed in their entirety since they duplicate 
policy in the FSM 2712 and 2344 that establishes evaluation criteria 
used in a competitive evaluation process. Section 251.124(b) of the 
final rule includes a requirement for public solicitation through 
issuance of a prospectus when the opportunity to issue authorizations 
is limited. This section also provides that when authorizations, 
including priority use permits, expire they shall not be reissued if 
there is a need to limit use and when there is competitive interest by 
preferred operators.
    Proposed Sec.  251.123(c) (Sec.  251.124(c) in the final rule) 
specified that in order to be a preferred operator under subpart E, an 
applicant responding to a prospectus must be a local resident or a most 
directly affected Native Corporation. There were no comments on this 
provision, and no substantive changes have been made in Sec.  
251.124(c) of the final rule.
    Proposed Sec.  251.123(d) (Sec.  251.124(f) in the final rule) 
specified that a qualified preferred operator would be given preference 
over all other operators, except historical operators. The following is 
an analysis and response to comments received on Sec.  251.123(d) of 
the proposed rule.
    Comment: One respondent stated that the proposed regulations do not 
make clear the impacts of a Forest Service decision to restrict access, 
solicit applications, and grant a preference on other commercial 
operators in the affected area and questioned whether existing permits, 
including priority use outfitter-guide permits, would be revoked.
    Response: Existing special use authorizations in CSUs in Alaska 
will be revoked only for cause, such as for noncompliance with their 
terms and conditions. Except for permits held by historical operators, 
authorizations will not be reissued when there is a need to limit use 
and there is competitive interest by preferred operators. The business 
opportunities previously authorized by these permits will be allocated 
through issuance of a prospectus, as provided in Sec.  251.124 of the 
final rule.
    This section of the final rule will preempt the Forest Service's 
national outfitting and guiding policy in FSH 2709.11, chapter 40 (60 
FR 30830), that authorizations providing for priority use are subject 
to renewal. To make the preemptive effect of this rule clearer, the 
Department has added the following sentence at the end of Sec.  
251.124(b): ``Notwithstanding Forest Service outfitting and guiding 
policy in Forest Service Handbook (FSH) 2709.11, chapter 40, when 
authorizations, including priority use permits for activities other 
than sport hunting and fishing, expire in accordance with their terms, 
they shall not be reissued if there is a need to limit use and when 
there is competitive interest by preferred operators.'' Preemption of 
agency policy authorizing reissuance of priority use outfitting and 
guiding permits without competition is required to effectuate the 
preferences granted to Native Corporations and local residents under 
section 1307(b) of ANILCA.
    Additionally, to make clear that priority use permits shall not be 
reissued without competition if the criteria under 36 CFR 251.124(b) 
are met, the Forest Service is issuing Amendment 2709.11-2003-2 to FSH 
2709.11, chapter 40, to revise direction at sections 41.53c and 41.54f 
regarding priority use by adding a reference to 36 CFR part 251, 
subpart E. This amendment is available via the World Wide Web/Internet 
at http://www.fs.fed.us/im/directives.
    Comment: One respondent questioned if the Forest Service intended 
that preferred operators would have exclusive rights to provide visitor 
services in a specific area. The respondent further stated that if this 
were so, it would be clearly contrary to the intent of Congress that 
the preference is not a license to create a monopoly, and that public 
policy favors diversity in the provision of visitor services.
    Response: Section 1307(b) of ANILCA grants a preference, rather 
than exclusive rights or a monopoly, to Native Corporations and local 
residents in the issuance of a visitor service authorization. Where the 
need exists, and where use limits allow, the prospectus may provide for 
more than

[[Page 35120]]

one operator to be allocated a portion of the available use.
    Comment: One respondent questioned how the Forest Service would 
allocate permits if all available use were not allocated to a preferred 
operator. The respondent noted that the preamble to the proposed rule 
suggested that remaining use be allocated by permits on a first-come, 
first-served basis, which would be highly unfair to operators who have 
provided quality, reliable services for a number of years and who have 
made a substantial investment in the continuation of these services.
    The respondent further stated that in all instances where use is 
restricted but some commercial operators, other than those with a 
statutory preference, will be permitted to operate in the area, 
priority should be given to those seeking reissuance of a special use 
authorization, in order of the date their authorization was first 
issued (assuming continuous service).
    Response: If there is a limit on the number of special use 
authorizations for a CSU and all available use is not allocated to a 
preferred operator, the Forest Service will allocate the remaining use 
according to the competitive process set forth in Sec.  251.124 of the 
final rule. The commentary about first-come, first-served in the 
preamble of the proposed rule discussing Sec.  251.123 refers to 
situations where there are no limitations on the number of special use 
authorizations being issued and therefore no competitive issuance of 
special use authorizations.
    In CSUs where there are limits on the number of special use 
authorizations, all authorizations, other than those for historic 
operators under Sec.  251.122, will be issued competitively in 
accordance with Sec.  251.124 of the final rule. However, commercial 
operators without a statutory preference who have performed 
satisfactorily under a special use authorization likely will be more 
competitive than other operators without a statutory preference who 
either do not have satisfactory evaluations or who have not had an 
authorization. No change from the proposed rule is warranted based on 
this comment.
    The Department has added a new Sec.  251.124(d) to the final rule 
to clarify and describe factors that demonstrate local residency for 
applicants seeking preferred operator status. This new paragraph 
incorporates the factors previously set out in the definition of local 
resident at Sec.  251.121 of the proposed rule.
    Proposed Sec.  251.123(e) (Sec.  251.124(g) in the final rule) 
specified that if the best offer to a prospectus is made by a non-
preferred operator, the preferred operator with the best offer would be 
given an opportunity to amend its offer to meet the offer of the non-
preferred operator. No comments were received on this provision. 
However, the Department has made minor changes in the final rule. The 
word ``offer'' has been changed to ``application'' for consistency with 
the definitions and Forest Service policy, and the provisions governing 
application of the preference have been modified for clarity and 
consistency with the final rules promulgated by the National Park 
Service and the U.S. Fish and Wildlife Service.
    Proposed Sec.  251.123(f) (Sec.  251.124(e) in the final rule) 
required a preferred operator to document that it holds the controlling 
interest in a joint venture submitting an application. No comments were 
received on this provision of the proposed rule. The Department has, 
however, modified and clarified this section by adding examples of the 
types of entities for which documentation of a controlling interest 
might be required.

Section 251.125 Preferred Operator Privileges and Limitations

    Proposed Sec.  251.125 contained a number of provisions enumerating 
preferred operator privileges and limitations.
    No comments were received on Sec.  251.125, and no substantive 
changes were made to this section in the final rule; only minor changes 
have been made in this section for consistency with existing Forest 
Service policy. In addition, the order of the paragraphs in this 
section has been changed for clarity. Paragraph (a) in the proposed 
rule has been removed because it repeats a provision in Sec.  
251.124(f) in the final rule, and paragraph (d) in the proposed rule 
has been removed because it repeats a provision in Sec.  251.124(e) in 
the final rule; the remaining paragraphs have been re-designated (a) 
through (e) in the final rule.

Section 251.126 Appeals

    Proposed Sec.  251.126 provided that decisions related to the 
issuance of special use authorizations in response to written 
solicitations by the Forest Service or to the modification of special 
use authorizations to reflect historical use are subject to 
administrative appeal under subpart C of this part.
    No comments were received on Sec.  251.126, and no substantive 
changes were made from the proposed rule.

Regulatory Certifications

Environmental Impact

    An environmental assessment (EA) was prepared for the proposed 
rule. Notice of the availability of this EA was published in the 
Federal Register notice of the proposed rule (62 FR 20143). No comments 
were received on the EA. The Department has determined that there are 
no significant environmental impacts associated with adoption of this 
final rule. A copy of the EA and Finding of No Significant Impact may 
be obtained from the person listed under FOR FURTHER INFORMATION 
CONTACT earlier in this document.

Regulatory Impact

    This final rule has been reviewed under USDA procedures and 
Executive Order 12866 on regulatory planning and review. It has been 
determined that this is not a significant rule. This rule will not have 
an annual effect of $100 million or more on the economy, nor will this 
rule adversely affect productivity, competition, jobs, the environment, 
public health and safety, or State and local governments. This rule 
will not interfere with an action taken or planned by another agency or 
raise new legal or policy issues. Finally, this rule will not alter the 
budgetary impact of entitlements, grants, user fees, loan programs, or 
the rights and obligations of recipients under such programs. 
Accordingly, this final rule is not subject to OMB review under 
Executive Order 12866.

Proper Consideration of Small Entities

    This final rule has been considered in light of Executive Order 
13272 regarding proper consideration of small entities and the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), which 
amended the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). It has 
been determined that this final rule will not have a significant 
economic impact on a substantial number of small entities as defined by 
the act. Section 1307 of ANILCA provides a competitive advantage for 
Native Corporations and local residents that qualify as small entities. 
This rule merely implements section 1307 and does not increase or 
decrease any preference granted by the statute. This final rule will 
not impose record-keeping requirements; will not affect the competitive 
position of small entities in relation to large entities; and will not 
affect their cash flow, liquidity, or ability to remain in the market.

[[Page 35121]]

Federalism

    The Department has considered this final rule under the 
requirements of Executive Order 13132 on federalism and has determined 
that the rule conforms with the federalism principles set out in this 
Executive Order; will not impose any compliance costs on the States; 
and will not have substantial direct effects on the States, on the 
relationship between the Federal Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. No further consultation with State governments is necessary 
upon adoption of this final rule.

No Takings Implications

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 12630, and it has been 
determined that the final rule does not pose a risk of a taking.

Civil Justice Reform

    This final rule has been reviewed under Executive Order 12988 on 
civil justice reform. Upon adoption of this final rule, (1) all State 
and local laws and regulations that are in conflict with this final 
rule or that will impede its full implementation will be preempted; (2) 
no retroactive effect will be given to this final rule; and (3) this 
final rule does not require administrative proceedings before parties 
may file suit in court challenging its provisions.

Unfunded Mandates

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), which the President signed into law on March 22, 
1995, the Department has assessed the effects of this final rule on 
State, local, and tribal governments and the private sector. This rule 
does not compel the expenditure of $100 million or more by any State, 
local, or tribal governments or anyone in the private sector. 
Therefore, a statement under section 202 of the act is not required.

Energy Effects

    This final rule has been reviewed under Executive Order 13211 of 
May 18, 2001, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply.'' It has been determined that this final rule 
will not have an adverse effect on the supply, distribution, and use of 
energy.

Consultation With Tribal Governments

    This final rule has been reviewed under Executive Order 13175 of 
November 6, 2000, ``Consultation and Coordination with Indian Tribal 
Governments.'' It has been determined that this final rule does not 
implicate the consultation provisions of that Executive order. Native 
corporations are not Indian tribes. Providing a preference for certain 
providers of visitor services in CSUs in Alaska does not directly 
affect Indian tribes or the relationship between the Federal government 
and the tribes in the State of Alaska.

Controlling Paperwork Burdens on the Public

    The information requirements associated with implementation of this 
regulation were set out in the proposed rule. No comments were received 
concerning information requirements associated with this rule.
    The information collection required to determine which Alaska 
Native Corporations qualify for the statutory preference in the award 
of competitively issued special use authorizations for commercial 
visitor services on designated lands within the National Forests in 
Alaska is currently covered under the information requirements in 
subpart B of this part, which are assigned OMB control number 0596-
0082.

List of Subjects in 36 CFR Part 251

    Administrative practice and procedure, Electric power, National 
forests, Public lands--rights-of-way, Reporting and record-keeping 
requirements, and Water resources.


0
Therefore, for the reasons set forth in the preamble, amend part 251 of 
Title 36 of the Code of Federal Regulations by adding a new subpart E 
to read as follows:

PART 251--LAND USES

Subpart E--Revenue-Producing Visitor Services in Alaska

Sec.
251.120 Applicability and scope.
251.121 Definitions.
251.122 Historical operator special use authorizations.
251.123 Most directly affected Native Corporation determination.
251.124 Preferred operator competitive special use authorization 
procedures.
251.125 Preferred operator privileges and limitations.
251.126 Appeals.

Subpart E--Revenue-Producing Visitor Services in Alaska

    Authority: 16 U.S.C. 3197.


Sec.  251.120  Applicability and scope.

    (a) These regulations implement section 1307 of the Alaska National 
Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3197) with regard 
to the continuation of visitor services offered as of January 1, 1979, 
and the granting of a preference to local residents and certain Native 
Corporations to obtain special use authorizations for visitor services 
provided on National Forest System lands within Conservation System 
Units of the Tongass and Chugach National Forests in Alaska.
    (b) Except as may be specifically provided in this subpart, the 
regulations at subpart B shall apply to special use authorizations 
issued under this subpart. However, if subpart B conflicts with subpart 
E, subpart E controls.
    (c) This subpart does not apply to the guiding of sport hunting and 
fishing.


Sec.  251.121   Definitions.

    In addition to the definitions in subpart B of this part, the 
following terms apply to this subpart:
    Best application--the application, as determined by the authorized 
officer, that best meets the evaluation criteria contained in a 
prospectus to solicit visitor services.
    Conservation System Unit (CSU) as it relates to the Tongass and 
Chugach National Forests in Alaska--a National Forest Monument or any 
unit of the National Wild and Scenic Rivers System, National Trails 
System, or National Wilderness Preservation System, including existing 
units and any such unit established, designated, or expanded hereafter.
    Controlling interest--in the case of a corporation, an interest, 
beneficial or otherwise, of sufficient outstanding voting securities or 
capital of the business so as to permit the exercise of managerial 
authority over the actions and operations of the corporation or 
election of a majority of the board of directors of the corporation. In 
the case of a partnership, limited partnership, joint venture, or 
individual entrepreneurship, a beneficial ownership of or interest in 
the entity or its capital so as to permit the exercise of managerial 
authority over the actions and operations of the entity. In other 
circumstances, any arrangement under which a third party has the 
ability to exercise management authority over the actions or operations 
of the business.
    Historical operator--a holder of a valid special use authorization 
to provide visitor services in a CSU under Forest Service jurisdiction 
who:

[[Page 35122]]

    (1) On or before January 1, 1979, was lawfully and adequately 
providing visitor services in that CSU;
    (2) Has continued lawfully and adequately to provide the same or 
similar types of visitor services within that CSU; and
    (3) Is otherwise determined by the authorized officer to have a 
right to continue to provide the same or similar visitor services.
    Local area--any site within 100 miles of the location within a CSU 
where any visitor services covered by a single solicitation by the 
Forest Service are to be authorized.
    Local resident:
    (1) For individuals--Alaska residents who have lived within the 
local area for 12 consecutive months prior to issuance of a 
solicitation of applications for a visitor services authorization for a 
CSU; who maintain their primary, permanent residence and business 
within the local area; and who, whenever absent from this primary, 
permanent residence, have the intention of returning to it.
    (2) For corporations, partnerships, limited partnerships, joint 
ventures, individual entrepreneurships, and other circumstances--where 
the controlling interest is held by an individual or individuals who 
qualify as local residents within the meaning of this section.
    (3) For nonprofit entities--where a majority of the board members 
and a majority of the officers qualify as local residents within the 
meaning of this section.
    Native Corporation has the same meaning as under section 102(6) of 
ANILCA (16 U.S.C. 3197).
    Preferred operator--a Native Corporation that is determined, 
pursuant to Sec.  251.123, to be most directly affected by 
establishment or expansion of a CSU; or a local resident, as defined in 
this section, who competes for a visitor service special use 
authorization under Sec.  251.124 of this subpart.
    Responsive application--an application that is received in a timely 
manner and that meets the requirements stated in the prospectus.
    Visitor service--any service or activity for which persons who 
visit a CSU pay a fee, commission, brokerage, or other compensation, 
including such services as providing food, accommodations, 
transportation, tours, and outfitting and guiding, except the guiding 
of sport hunting and fishing.


Sec.  251.122  Historical operator special use authorizations.

    (a) A historical operator has the right to continue to provide 
visitor services under appropriate terms and conditions contained in a 
special use authorization, as long as such services are determined by 
the authorized officer to be consistent with the purposes for which the 
CSU was established or expanded. A historical operator may not operate 
without such an authorization.
    (b) Any person who qualifies as a historical operator under this 
subpart and who wishes to exercise the rights granted to historical 
operators under section 1307(a) of ANILCA (16 U.S.C. 1397(a)) must 
notify the authorized officer responsible for the CSU.
    (c) A historical operator may apply for a special use authorization 
to provide visitor services similar to but in lieu of those provided by 
that historical operator before January 1, 1979. The authorized officer 
shall grant the application if those visitor services are determined by 
the authorized officer to be:
    (1) Consistent with the purposes for which the applicable CSU was 
established or expanded;
    (2) Similar in kind and scope to the visitor services provided by 
the historical operator before January 1, 1979; and
    (3) Consistent with the legal rights of any other person.
    (d) Upon the authorized officer's determination that the person 
qualifies as a historical operator, under either paragraph (a) or 
paragraph (c) of this section, the authorized officer shall amend the 
current special use authorization or issue a new special use 
authorization to identify that portion of the authorized services that 
is deemed to be historical operations. The special use authorization 
shall identify the location, type, and frequency or volume of visitor 
services to be provided.
    (e) When a historical operator's special use authorization expires, 
the authorized officer shall offer to reissue the special use 
authorization for the same or similar visitor services, as long as the 
visitor services remain consistent with the purposes for which the CSU 
was established or expanded, the historical operator was lawfully and 
adequately providing visitor services under the previous special use 
authorization, and the historical operator continues to possess the 
capability to provide the visitor services adequately.
    (1) If the operator accepts the offer to reissue, the authorized 
officer shall issue a new special use authorization that clearly 
identifies the historical operations as required by paragraph (d) of 
this section.
    (2) If the authorized officer determines that it is necessary to 
reduce the visitor services to be provided by a historical operator, 
the authorized officer shall modify the historical operator's special 
use authorization to reflect the reduced services as follows:
    (i) If more than one historical operator provides services in the 
area where visitor service capacity is to be reduced, the authorized 
officer shall apportion the reduction among the historical operators, 
taking into account historical operating levels and such other factors 
as are relevant to achieve a proportionate reduction among the 
operators.
    (ii) If the reductions in visitor service capacity make it 
necessary to reduce operators in an area, the authorized officer shall 
select, through a competitive process that is limited to historical 
operators only, the operator or operators to receive a special use 
authorization from among the historical operators. Historical operators 
participating in this competitive process may not claim a preference as 
a preferred operator under Sec.  251.124.
    (f) Any of the following shall result in the loss of historical 
operator status:
    (1) Revocation of a special use authorization for historical types 
and levels of visitor services for failure to comply with the terms and 
conditions of the special use authorization;
    (2) A historical operator's refusal of an offer to reissue a 
special use authorization made pursuant to paragraph (e) of this 
section;
    (3) A change in the controlling interest of a historical operator 
through sale, assignment, devise, transfer, or otherwise, except as 
provided in paragraph (g) of this section; or
    (4) An operator's failure to provide the authorized services for a 
period of more than 24 consecutive months.
    (g) A change in the controlling interest of a historical operator 
that results only in the acquisition of the controlling interest by an 
individual or individuals, who were personally engaged in the visitor 
service activities of the historical operator before January 1, 1979, 
shall not be deemed a change in the historical operator's controlling 
interest for the purposes of this subpart.
    (h) Nothing in this section shall prohibit the authorized officer 
from authorizing persons other than historical operators to provide 
visitor services in the same area, as long as historical operators 
receive authorization to provide visitor services that are the same as 
or similar to those they provided on or before January 1, 1979.
    (i) If an authorized officer grants to a historical operator an 
increase in the scope or level of visitor services from

[[Page 35123]]

what was provided on or before January 1, 1979, beyond what was 
authorized under paragraph (d) of this section, for either the same or 
similar visitor services, the historical operator has no right of 
preference for the increased amount of authorized services. If 
additional operations are authorized, the special use authorization 
shall explicitly state that they are not subject to the historical 
operator preference.


Sec.  251.123  Most directly affected Native Corporation determination.

    (a) Before issuance of the first special use authorization for a 
specific CSU pursuant to Sec.  251.124 on or after the effective date 
of this subpart, the authorized officer shall give notice to Native 
Corporations interested in providing visitor services within the CSU 
and give them an opportunity to submit an application to be considered 
the Native Corporation most directly affected by the establishment or 
expansion of the CSU under section 1307(b) of ANILCA (16 U.S.C. 
1397(b)). In giving notice of the application procedure, the authorized 
officer shall make clear that this is the only opportunity to apply for 
most directly affected status for that particular CSU.
    (1) At a minimum, an application from an interested Native 
Corporation shall include the following:
    (i) Name, address, and telephone number of the Native Corporation; 
date of its incorporation; its articles of incorporation and structure; 
and the name of the applicable CSU and the solicitation to which the 
Native Corporation is responding;
    (ii) Location of the Native Corporation's population centers; and
    (iii) An assessment of the socioeconomic impacts (including changes 
in historical and traditional use and landownership patterns) on the 
Native Corporation resulting from establishment or expansion of the 
applicable CSU.
    (2) In addition to the minimum information required by paragraph 
(a)(1) of this section, Native Corporations may submit such additional 
information as they consider relevant.
    (b) Upon receipt of all applications from interested Native 
Corporations, the authorized officer shall determine the most directly 
affected Native Corporation considering the following factors:
    (1) Distance and accessibility from the Native Corporation's 
population centers and/or business address to the applicable CSU;
    (2) Socioeconomic impacts (including changes in historical and 
traditional use and landownership patterns) on Native Corporations 
resulting from establishment or expansion of the applicable CSU; and
    (3) Information provided by Native Corporations and other 
information considered relevant by the authorized officer to assessment 
of the effects of establishment or expansion of the applicable CSU.
    (c) In the event that two or more Native Corporations are 
determined to be equally affected for purposes of the most directly 
affected Native Corporation determination pursuant to this section, 
each such Native Corporation shall be considered a preferred operator 
under this subpart.
    (d) A Native Corporation determined to be most directly affected 
for a CSU shall maintain that status for all future visitor service 
solicitations for that CSU.


Sec.  251.124  Preferred operator competitive special use authorization 
procedures.

    (a) In selecting persons to provide visitor services for a CSU, the 
authorized officer shall, if the number of visitor service 
authorizations is to be limited, give a preference (subject to any 
rights of historical operators under this subpart) to preferred 
operators as defined in this subpart who are determined to be qualified 
to provide such visitor services.
    (b) In such circumstances, the authorized officer shall solicit 
applications competitively by issuing a prospectus for persons to apply 
for a visitor services authorization. Notwithstanding Forest Service 
outfitting and guiding policy in Forest Service Handbook 2709.11, 
chapter 40, when authorizations, including priority use permits for 
activities other than sport hunting and fishing, expire in accordance 
with their terms, they shall not be reissued if there is a need to 
limit use and when there is competitive interest by preferred 
operators.
    (c) To qualify as a preferred operator under this subpart, an 
applicant responding to a solicitation made under this section must be 
determined by the authorized officer to be a local resident as defined 
in Sec.  251.121 of this subpart, or the Native Corporation most 
directly affected by establishment or expansion of the CSU covered by 
the solicitation pursuant to Sec.  251.123 of this subpart.
    (d) Applicants seeking preferred operator status based on local 
residency must provide documentation verifying their claim. Factors 
demonstrating the location of an individual's primary, permanent 
residence and business include, but are not limited to, the permanent 
address indicated on licenses issued by the State of Alaska, tax 
returns, and voter registration.
    (e) An application from a preferred operator in the form of a 
corporation, partnership, limited partnership, joint venture, 
individual entrepreneurship, nonprofit entity, or other form of 
organization shall be considered valid only when the application 
documents to the satisfaction of the authorized officer that the 
preferred operator holds the controlling interest in the corporation, 
partnership, limited partnership, joint venture, individual 
entrepreneurship, nonprofit entity, or other form of organization.
    (f) A qualified preferred operator shall be given preference, 
pursuant to paragraph (g) of this section, over all other applicants, 
except with respect to use allocated to historical operators pursuant 
to Sec.  251.122 of this subpart.
    (g) If the best application from a preferred operator is at least 
substantially equal to the best application from a non-preferred 
operator, the preferred operator shall be issued the visitor service 
authorization. If an application from an applicant other than a 
preferred operator is determined to be the best application (and no 
preferred operator submits a responsive application that is 
substantially equal to it), the preferred operator who submitted the 
best application from among the applications submitted by preferred 
operators shall be given the opportunity, by amending its application, 
to meet the terms and conditions of the best application received. If 
the amended application of that preferred operator is considered by the 
authorized officer to be at least substantially equal to the best 
application, the preferred operator shall be issued the visitor service 
authorization. If a preferred operator does not amend its application 
to meet the terms and conditions of the best application, the 
authorized officer shall issue the visitor service authorization to the 
applicant who submitted the best application in response to the 
prospectus.


Sec.  251.125  Preferred operator privileges and limitations.

    (a) A preferred operator has no preference within a National Forest 
in Alaska beyond that authorized by section 1307 of ANILCA (16 U.S.C. 
1397) and by Sec.  251.124 of this subpart.
    (b) Local residents and most directly affected Native Corporations 
have equal priority for consideration in providing visitor services 
pursuant to Sec.  251.124 of this subpart.
    (c) Nothing in this subpart shall prohibit the authorized officer 
from issuing special use authorizations to other applicants within the 
CSU, as long

[[Page 35124]]

as the requirements of Sec.  251.124 are met.
    (d) If an operator qualifies as a local resident for any part of an 
area designated in the solicitation for a specific visitor service, in 
matters related solely to that solicitation, the operator shall be 
treated as a local resident for the entire area covered by that 
solicitation.
    (e) The preferences described in this section may not be sold, 
assigned, transferred, or devised, either directly or indirectly, in 
whole or in part.


Sec.  251.126  Appeals.

    Decisions related to the issuance of special use authorizations in 
response to written solicitations by the Forest Service under this 
subpart or related to the modification of special use authorizations to 
reflect historical use are subject to administrative appeal under 
subpart C of this part.

    Dated: May 27, 2003.
David P. Tenny,
Deputy Under Secretary, Natural Resources and Environment.
[FR Doc. 03-14630 Filed 6-10-03; 8:45 am]
BILLING CODE 3410-11-P