[Federal Register Volume 63, Number 25 (Friday, February 6, 1998)]
[Notices]
[Pages 6204-6205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2977]
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DEPARTMENT OF THE INTERIOR
National Park Service
NPS Franchise Fee Determination Guidelines
AGENCY: National Park Service, Interior.
ACTION: Consideration of public comments on NPS franchise fee
determination guidelines.
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SUMMARY: On December 5, 1997, the National Park Service (NPS) again
published for public comment that portion of its concession management
staff manual (NPS-48) dealing with guidelines for concession contract
franchise fees. Comments were invited on, among other matters, specific
proposed changes in concept or in detail, for dealing with concession
contract franchise fees. The comment period has closed and NPS has duly
considered the comments received.
[[Page 6205]]
EFFECTIVE DATE: February 6, 1998.
FOR FURTHER INFORMATION CONTACT:
Robert Yearout, Program Manager, Concession Program, National Park
Service, 1849 C Street, NW, Washington, DC 20240.
SUPPLEMENTARY INFORMATION: The franchise fee guidelines contained in
NPS-48 were adopted by NPS on December 31, 1986, after receipt and
consideration of public comments pursuant to Federal Register
notification. The guidelines were amended on July 20, 1995, after
consideration of public comment pursuant to Federal Register
notification. In addition, the guidelines were clarified on August 11,
1997, after consideration of pubic comment pursuant to Federal Register
notification. NPS is presently considering the possibility of
significantly revising the guidelines. If it chooses to do so, the
proposed revisions will be made available for public comment through
Federal Register notification.
Two comments were received in response to the December 5, 1997,
Federal Register notice. One commenter expressed concern that franchise
fee adjustments made as part of a concession contract fee
reconsideration are neither easily quantifiable nor subject to any
``cap'' as to how much a fee may be raised as a result of the
reconsideration. The commenter considers that franchise fees should be
quantifiable for the term of a contract. The commenter suggested that
this would allow better calculation of prospective financial returns,
increase the ability to obtain financing, and decrease the risk of
bidding to obtain a concession contract. Specifically, the commenter
suggested that the basis for fee adjustments should be a pre-determined
formula established at the outset of the contract.
NPS considers that this comment has merit in some respects.
However, it notes that under current concession contract provisions,
franchise fees may be adjusted upwards or downwards as circumstances
warrant during the term of the contract. The present system,
accordingly, treats the concessioner and the Government alike with
respect to franchise fee adjustments.
The commenter also suggested that in analyzing franchise fees, the
complete financial history of the operation should be considered. NPS
notes that its current guidelines permit analysis of as many years of
financial history as is appropriate and that during a franchise fee
consideration the concessioner is likewise able to provide analysis as
it sees fit with respect to the operation's financial returns and
history.
Finally, the commenter noted that, although, in theory, the NPS
consideration of industry ratios would seem equitable in analyzing
franchise fees, published statistics in this regard are not readily
comparable to NPS concession operations in light of their more
extensive mix of facilities and services and other factors related to
operations in areas of the national park system. In addition, the
commenter suggested that the ratios provided in industry statistics
have such a wide swing in results that any assignment of ranking would
be purely subjective on the part of NPS in attempting to recommend a
new franchise fee. NPS has received similar criticisms of using
published industry statistics in franchise fee analysis on other
occasions, including in prior responses to Federal Register requests
for public comment on NPS franchise fee guidelines.
NPS agrees that consideration of published industry statistics in
and of itself would not be an appropriate means to establish a
franchise fee. However, the NPS guidelines only contemplate
consideration of published statistics as one starting point for
franchise fee analysis. The guidelines call for analysis of such
statistics to account for differences between the general industry and
the particular circumstances of the concession operation in question.
In addition, industry statistics as part of a franchise fee
reconsideration process are shared with the concessioner which may
dispute their validity and provide alternative statistics. A decision
on an adjusted franchise fee is made on the basis of all the
information developed during the reconsideration process, including
discussions with the concessioner. In addition, if NPS and the
concessioner cannot agree on an adjustment to the franchise fee, up or
down as the case may be, the concessioner is entitled to request
advisory arbitration on the issue and a final decision from the
Secretary of the Interior based upon the entire record of the matter
and the views of the arbitration panel. In short, NPS appreciates that
published statistics cannot be the exclusive means of analyzing
franchise fees and that they have shortcomings which must be taken into
account. Nonetheless, NPS considers it appropriate to use published
statistics, with appropriate adjustment and consideration of their
limitations, as a franchise fee analytical tool.
The other comment received was concerned that NPS should permit
public comment on the specifics of its proposed changes to its
franchise fee guidelines. This NPS intends to do through Federal
Register notification if significant changes are proposed.
Having considered the comments received, and similar comments
received in response to past Federal Register notification, NPS
believes that its present franchise fee guidelines are adequate and
hereby re-adopts them to the extent legally necessary. However, NPS
does consider that there may be other and perhaps better ways to deal
with concession contract franchise fees and may suggest significant
revisions to the present guidelines in the near future. If this occurs,
further public comment will be invited on the revisions and the
comments received in response to the December 5, 1997, notice and prior
notices will be taken into due account as well in reaching a final
decision on any proposed revisions.
Dated: January 23, 1998.
Wendelin M. Mann,
Acting Concession Program Manager.
[FR Doc. 98-2977 Filed 2-5-98; 8:45 am]
BILLING CODE 4310-70-M
