BILL ANALYSIS Ó
AB 2249
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Date of Hearing: March 29, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
AB 2249
(Cooley) - As Introduced February 18, 2016
SUBJECT: State parks
SUMMARY: Prohibits a state park concession contract from
providing a contracting party with, or serving as the basis for,
a claim of a trademark right or other financial or ownership
interest in the names associated with a state park venue.
Specifically, this bill:
1)States legislative findings and declarations regarding the
public interest and historical significance served by
national, state and regional parks, including Yosemite
National Park and facilities therein. States further
legislative findings and declarations regarding California
state parks held in public trust for the people of California,
and that a legal claim by an individual to a trademark right
in a name or names associated with a venue within a state park
derogates the interests of California and is indicative of the
individual's lack of fitness to serve as a steward of state
parks. Finds and declares that an agreement entered into by
any California state agency that compromises the interests of
Californians is "ultra vires" and therefore beyond that
agency's legal authority to enter.
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2)Provides that a state park concession contract shall not
provide the contracting party with, or serve as a basis for,
any legal claim or assertion that the contracting party has a
trademark or other financial or ownership interest in the name
or names associated with a state park venue. Prohibits a
bidder who makes a legal claim or assertion to have a
trademark or other financial or ownership interest in such a
name from being awarded a state park concession contract.
3)Provides that a provision of a contract or other agreement
that violates this prohibition shall be void and
unenforceable.
EXISTING LAW:
1)Authorizes DPR to establish rules and regulations for
administration of properties in the state park system.
2)Authorizes the Department of Parks & Recreation (DPR) to enter
into contracts for the operation of concessions within units
of the state park system. Requires, with specified
exceptions, that concession contracts be awarded to the best
responsible bidder. Sets out requirements for invitations for
bids and bid submittals. Requires that contracts awarded
pursuant to bid processes be approved by the Attorney General
and the Department of General Services. Defines best
responsible bidder as the bidder, as determined by specific
standards established by the department, which, as determined
by the department, will operate the concession consistent with
the contract, in a manner fully compatible with, and
complimentary to, the characteristics, features, and theme of
the unit in which the concession will be operated, and in the
best interests of the state and public.
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3)Alternatively, authorizes DPR, if the director of DPR
determines it is in the best interests of the state, and after
giving notice to the State Park & Recreation Commission, to
award concession contracts to the best responsible person or
entity submitting a proposal for a concession contract in
response to a request for proposal. Defines best responsible
person or entity as the person or entity that, as determined
by specific standards established by the department, will
operate the concession in the best interests of the state and
the public.
4)Requires any proposed concession contract that is expected to
involve a total investment or annual gross sales of over
$1,000,000 to be reviewed by the State Park & Recreation
Commission, and submitted to the Joint Legislative Budget
Committee for review at least 30 days prior to advertising for
bids.
5)Authorizes DPR to accept donations of funds or services in
support of state parks, and to authorize the erection of an
appropriate sign in recognition of a donation or sponsorship.
FISCAL EFFECT: Unknown
COMMENTS: This bill prohibits a state park concession contract
for being construed to provide, or serving as the basis for, any
claim of a trademark right in the name or names associated with
a state park.
1)Author's Statement: To prevent concessionaires from co-opting
state landmarks, this bill puts forth three key ideas. First,
this bill clarifies that an awarded food or lodging contract
does not entitle a company to any legal claim of a trademark.
No State Park official has the authority to agree to
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contractual terms that fail to safeguard the interests of
California by offering a public trademark to a private
corporation. Second, this bill specifically prohibits
concessionaires from claiming ownership of a name associated
with a California State Park. Finally, a concessionaire who
asserts a claim of this type will no longer be viewed as a fit
partner to contract with California State Parks. This bill
permanently disqualifies a concessionaire from consideration
for future contracts if they attempt a trademark claim. This
bill's impact rests on the premise that a state park
concessionaire's business is incompatible with a trademark or
claim of ownership of park facilities which they have been
entrusted with as a steward, but which still remain the
property of the state. The author asserts that California's
treasured heritage sites are a part of our state's public
trust and it is self-evident that the state would never
approve giving away the inherent value associated with those
historic names and places.
2)Background: This bill was sparked by a recent, well
publicized, contract dispute involving Yosemite National Park.
For the last 23 years, the Delaware North Company was the
concessionaire operating visitor services and facilities
within Yosemite National Park under a contract with the
National Park Service. In 2015 the National Park Service
rebid the contract and awarded a new 15 year concession
contract to Aramark who was the successful bidder. After
Delaware North lost the contract they sued the federal
government for "breach of an implied contract" and other
alleged bidding issues. They also asserted they were entitled
to compensation for various trademarks and other intellectual
property rights they had registered while they were the
concessionaire in Yosemite. According to Delaware North, some
of the trademark registrations were acquired by Delaware North
from the Curry Company, the previous concessionaire, along
with other Curry Company assets, and some were newly
registered by Delaware North after they became the
concessionaire. Among the names they claim to have a
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registered trademark property right for are "The Ahwahnee,"
"Yosemite Lodge," "Wawona," "Curry Village," and "Badger
Pass," all of which are well known venues within Yosemite
National Park. The Delaware North Company even claims to have
a registered trademark for the name "Yosemite National Park."
Delaware North has asserted that it is entitled to
compensation for the value of its trademarks and other
intellectual property rights in Yosemite National Park which
it claims is valued at $51 million. The National Park Service
has countered that the value is closer to $1.63 million, and
alleges that many of the trademarks were registered without
its knowledge or consent. The National Park Service has also
filed a petition with the United States Patent and Trademark
Office seeking to cancel the disputed trademarks. While the
litigation is pending, the National Park Service has started
removing the contested names from various signs, bridges, and
other places within the park, and renaming the venues. For
example, the historic Ahwahnee Hotel, which is listed on the
National Register of Historic Places as a National Historic
Landmark, is being renamed "the Majestic Yosemite Hotel." The
dispute has outraged many park visitors who see the trademark
claims as violating the public trust and the deeply held
understanding that the national parks are national treasures
that belong collectively to the people of the country.
In order to prevent a similar situation from occurring in
California state parks, this bill would prohibit a state park
concession contract from providing, or forming the basis for
providing, a trademark or other financial or ownership
interest in the name or names associated with a state park.
This bill would also make any bidder who asserts such a legal
claim ineligible to be awarded a contract.
The contract used by DPR for state park concessions in
California expressly prohibits a concessionaire from obtaining
a trademark claim in any name or logo associated with a state
park, and provides that any such trademark that might be
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created during the period of the contract shall continue in
State Park's exclusive ownership upon termination of the
Contract. While this is the current practice at DPR, this
bill would ensure that such protections continue to apply in
the future.
3)Potential Issues: This bill may raise a couple potential
legal issues worthy of consideration. The Contract Clause of
the federal Constitution (Article 1, Section 10, Clause 1)
prohibits states from enacting any law that retroactively
impairs contract rights. As a general rule of statutory
construction, legislation is deemed to be prospective and not
retroactive, unless expressly so stated. Assuming that is the
case here and the author does not intend for this bill to
apply to existing concession contracts, except in cases where
those contracts may be renewed or amended in the future, this
bill may not raise potential impairment of contract issues.
However, if the intent is for this bill to apply to existing
contracts, an argument could be made that it could raise
potential concerns over possible impairment of existing
contract rights. As a counter argument to such a claim, this
bill's legislative findings and declarations note that an
agreement entered into by any California state agency that
compromises the interests of Californians is "ultra vires" and
therefore beyond the agency's legal authority to enter.
"Ultra vires" is a legal doctrine of law that holds that if a
corporation enters into a contract that is beyond the scope of
its corporate powers, the contract is illegal. Thus the
argument would be that a law that modifies such an illegal
contract would not constitute an unconstitutional impairment
of contract.
As stated above, the concession contract currently used by DPR
in California already prohibits a concessionaire from
obtaining a trademark right in any name associated with a
state park, and provides that any trademark that may be
developed during the term of a state park concession contract
shall continue in State Park's exclusive ownership upon
termination of the contract. Therefore, depending on how
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long this contract language has been in use, there may not be
existing contracts in California under which such claims could
be raised.
The second potential issue is with regard to subdivision (b)
of section 5080.22. That section makes a bidder who makes a
legal claim or assertion to have a trademark or other
financial or ownership interest in a name or names associated
with a state park venue ineligible to be awarded a concession
contract. To the extent that a bidder may have a legitimate
legal claim, that section could be interpreted as penalizing a
bidder for asserting a right that they are legally entitled to
assert.
It should be noted that this bill is double-referred to the
Assembly Judiciary Committee which can further analyze these
or any other potential legal issues that might be relevant.
4)Double-referral: This bill is double-referred to the Assembly
Judiciary Committee where it is scheduled to be heard next.
5)Prior and related Legislation: AB 549 (Committee on Water,
Parks & Wildlife), Chapter 559, Statutes of 2015, amended the
process for approval of concession contracts to require a 30
day notice to the Joint Legislative Budget Committee and
appropriate fiscal and policy committees of the Legislature
prior to soliciting bids or approving an agreement.
SCR 79 (McGuire), Chapter 179, Resolutions of 2015, requested
the State Park and Recreation Commission, working with DPR, to
rename Annadel State Park in the County of Sonoma as Trione
Annadel State Park and, upon the receipt of donations from
non-state sources sufficient to cover the cost, install new
signs reflecting the name change.
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6)Support Arguments: Supporters express full support for
protecting California's treasured heritage park locales and
urge that allowing private concessionaires to own the
trademark to such sites should not be permitted. Insurance
Commissioner Dave Jones in support of this bill similarly
emphasizes that private trademarks within the national and
state parks are inconsistent with public ownership of the
park. He quotes Franklin D. Roosevelt who once said "There is
nothing so American as our national parks?The fundamental idea
behind the parks?is that country belongs to the people,?that
it is in process of making for the enrichment of the lives of
us all." This bill is necessary to protect and preserve the
rich history of California for future generations.
7)Opposition Arguments: None received.
8)Suggested Amendments: In addition to the code sections cited
in this bill as the source of authority for DPR to enter into
concession contracts, DPR may also award a concession contract
pursuant to Public Resources Code Section 5080.23. In order
to fully accomplish the author's intent, this bill should be
amended to reference that section, as follows:
Amend Page 3, line 10 to read: "Section 5080.05, or 5080.16, or
5080.23 shall not be construed to provide the contracting
party?"
Amend Page 3, line 17 to read: "5080.05, or 5080.16, or
5080.23."
Amend Page 3, line 19-20 to read: "pursuant to Section 5080.05,
or 5080.16, or 5080.23 that violates subdivision (a) shall be
void and unenforceable."
REGISTERED SUPPORT / OPPOSITION:
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Support
California Association of Recreation and Park Districts
California State Parks Foundation
Insurance Commissioner Dave Jones
Sierra Club California
Trust for Public Lands
Opposition
None on file.
Analysis Prepared by:Diane Colborn / W., P., & W. / (916)
319-2096
AB 2249
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