Concession Reform
I was asked to give an update on S208 the
Concessions Reform Act now before Congress. I wish the newsletter deadline were next week,
as Congress has at least one more week in session, but at this moment (which is a key
word) it appears likely S208 will be passed into law. Many people in and out of our
industry have spent the last six months trying to insure S208 deals fairly with guides and
outfitters. Although S208 will have an immediate and direct effect on Grand Canyon
companies, this was viewed by America Outdoors (AO, our national guide and outfitter
organization) as the battleground to the future of the guide and outfitting businesses,
large and small, that conduct their business on public lands. Doug Tims, the President of
America Outdoors, recently sent out a letter on S208 to help explain the current version
of the bill now before Congress. I think it tells the whole story better than I could, so
below is a shortened and slightly altered version of his letter:
BACKGROUND
Every business that operates on public lands is facing substantial review and
changes in their relationship with the federal government. Timber has taken the biggest
hit, with supplies from the National Forest system reduced from 11 billion board feet in
the Reagan era, to 4 billion today. Grazing and mining are struggling with stricter
environmental controls and potential large fee increases. Large concessioners in the
National Parks are facing buyouts of their possessory interests and future bidding on the
their contracts without preference. Eleven years after agreement on the national outfitter
and guide policy that governs Forest Service (FS) and Bureau of Land Management (BLM)
permits, the FS version has expired without formal adoption. Nor have the agencies
implemented a consistent, effective evaluation system for outfitters as required by the
policy. New policy proposals have surfaced in both the Forest Service and Park Service
that are very hostile to the industry. Outfitters in Alaska face bid/prospectus from the
Fish & Wildlife Service. BLM feels it is being pushed towards similar actions with
respect to outfitter and guide rules. Many, including the President, GAO and the
outfitting industry, have called for standardization of outfitter policy among the
agencies. S208, a bill to reform National Park concession policy, became the vehicle for
Congress to give the agencies some guidance.
America Outdoors (AO) didn’t choose the vehicle and we couldn’t
control the process. AO did decide the bill was likely to pass and we needed to influence
the outcome in any way we could. The goal: put into law directions that assure the
agencies must continue preference in renewal, no fee bidding, and a viable business
environment. We think the current version of S208 provides direction to the agencies in
some key areas that are very important to our industry’s future.
PREFERENTIAL RIGHT OF RENEWAL
S208 currently says there will be no preferential right of renewal, with two
exceptions - 1) outfitters and guides, and 2) non-outfitter concessioners grossing less
than $500,000. Prior to S208, preference exists in law only for NPS outfitters. Preference
is common practice for Forest Service, BLM and USF&W permitted outfitters, but
preference is not protected by law. Early versions of S208 eliminated preference for all
concessioners, and if passed in that form, would have been used to end preference for all
outfitters at all agencies in the future. AO wanted a performance based evaluation process
where outfitters could earn preference by doing a good job. The current version of S208
grants preference to outfitters who perform in an “Excellent” manner during half
of their permit term,— a higher standard than current “satisfactory”
requirements. There is concern by many AO leaders and members that ill trained, or biased
agency persons, might use this “Excellent” category unfairly to get rid of
outfitters they don’t like. It is our challenge to assure through future rule making
processes that a fair, understandable, appealable evaluation system is put in place. The
bill states the system must be “clear and achievable”. This should have been
done ten years ago, as directed by the national outfitter policy. If S208 passes in
it’s current form, outfitters will have strong political allies with the force of
recent law behind them to help us assure fair treatment in future rule making.
FRANCHISE FEES S208
currently states, “…the fee shall be determined in a manner that
will provide the concessioner with a reasonable opportunity to realize a profit on the
operations as a whole, commensurate with the capital invested and obligations
assumed.” It further says, “…the Secretary shall establish a standardized
schedule of minimum acceptable franchise fees…” for outfitters and guides
offering “…similar services at the same approximate location within a specific
park…” The word “schedule” allows the National Park Service the
continued option of establishing different fees based on some differences, like we
currently have in Grand Canyon, where fees charges for motorized trips are higher than
fees charged for oar trips. In the negotiations on S208, in order to get preference in
renewal, we had to make some concessions on fees. There is a provision that allows for
some fee bidding at renewal, but it does have a cap which should be something that will
not ruin the industry.
FEES TO SPECIAL ACCOUNT
You’ve probably heard outfitters say they wouldn’t mind the fees so
much if they went to the local resource. S208 has provisions where at least 50 percent of
the franchise fee collected will be returned to the units of the National Park System
where it was collected. There are some special provisions and limitations, but it is the
first time franchise fees have not gone directly into the national treasury to be lost
forever.
FINAL COMMENT
It would be nice in today’s political and business environment if we
could just avoid change. Unfortunately that is not an option. Perhaps we could have sat on
the sidelines and let others decide our fate. We did not. The good ole days—when we
could just float the river or ride through the woods, when no one knew or cared what we
were doing or who we were— are gone. I am proud of the professional effort AO has put
forward to protect the essentials of a viable outfitting industry. I hope you will join me
in continuing our efforts in the coming year to influence the inevitable rule making
process. We are outfitting in the ‘90s. Even with the trials and tribulations of
surviving the current political environment, it beats the hell out of an 8-5 desk job in
an urban environment.
Doug Tims
President
I realize this is pretty dry reading, but some of you have followed the battle quite closely. Thanks are in order to GCRG for their letters of support on some of the issues in S208. At one time it looked pretty bleak for the industry, but I think the current version of S208 (if it passes and is not changed again) is something we can live with. The “Excellent” rating should guarantee a continued high standard of quality for our industry. It will be crucial that we closely follow the rule-making process, so the new regulations don’t sanitize and standardize the industry so much, that the spirit of the industry as expressed in GCRG’s byline, “Celebrating the unique spirit of the river community” becomes a casualty in the process. n
Bruce Winter
Arizona River Runners
