BILL ANALYSIS Ó
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: AB 2249 Hearing Date: June 14,
2016
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|Author: |Cooley | | |
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|Version: |May 27, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Matthew Dumlao |
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Subject: State parks
BACKGROUND AND EXISTING LAW
Under existing law, the Department of Parks and Recreation (DPR)
may enter into contracts for the construction, maintenance, and
operation of concessions within units of the state park system.
Existing law also describes the steps required to solicit and
select concession contract bids, including the criteria for
selecting a concession bid.
Concession contracts are required, with specified exceptions, to
be awarded to the best responsible bidder. The best responsible
bidder is a bidder who will (1) operate the concession
consistent with the contract; (2) operate in a manner fully
compatible with and complimentary to the characteristics,
features, and theme of the park; and (3) operate in the best
interests of the state and the public (Public Resources Code §
5080.05).
Alternatively, the director of DPR is authorized to negotiate or
renegotiate a contract under specific conditions, including the
bid process failed to produce a best responsible bidder.
Existing law also requires all concession contracts to contain
several provisions, including:
a. Maximum term shall be 10 years, unless under certain
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conditions, as described.
b. If the concession contract is for construction,
development and operation of a multiple-unit lodging
facility with an initial cost of more than $1.5 million,
the maximum term may be 50 years.
c. Every concessionaire shall submit to DPR all sales
and use tax returns and provide an annual financial
statement. Every concessionaire is subject to audit by
DPR.
d. The state is not obligated to purchase any
improvement made by the concessionaire if a contract is
terminated for substantial breach.
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 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. Also, the Delaware North Company
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claims to have a registered trademark for the name "Yosemite
National Park" and the iconic Half Dome used on logos and other
merchandise sold through the gift shop.
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.
Delaware North offered to let the park keep the names while the
legal process plays out. But, rather than risk an injunction
that might interrupt service at Yosemite, the National Park
Service removed the contested names from various signs, bridges,
and other places within the park, and renamed the venues, at a
total cost of $1.7 million. 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.
PROPOSED LAW
This bill would establish the California Heritage Protection
Act. This act would prohibit a concession contract from
providing a contracting party with a trademark or service mark
of the names associated with a state park.
Specifically, this bill would:
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1. Make several legislative findings and declarations
regarding the public interest and historical significance
served by national, state, and regional parks, including
Yosemite National Park. Find and declare that California
state parks are held in trust for the people of California,
that a legal claim to a trademark right in a name or a
names associated with a state park derogates the interests
of California, and that making such a claim is indicative
of the claimants lack of fitness to serve as a steward of
state parks. Find and declare that an agreement entered
into by a California state agency that compromises the
interests of Californians is "ultra vires" and, therefore,
beyond that agencies legal authority to enter.
2. Modify the definition of best responsible bidder, for
purposes of existing law governing the awarding of
concession contracts for state parks, to include that the
bidder shall operate the concession in a manner that
protects the state's trademark and service mark rights in
the names associated with a state park and state park
resources.
3. Provide that a concessionaire who makes a legal claim to
have a trademark or service mark interest in a state park
in violation of the law, shall forfeit the right to bid on
future state park concession contracts, to the extent
authorized by federal law.
4. Provide that a concessionaire who files an application
for a trademark or service mark associated with a state
park or state park resources that is successfully opposed
or cancelled by the state, shall be responsible for the
state's attorney's fees and costs.
5. Commencing January 1, 2017, prohibit a concession
contract awarded for a state park from providing the
contracting party with a trademark or service mark interest
in the name or names associated with a state park or state
park resources, or from serving as the basis for any legal
claim that the contracting party has such an interest.
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State that this prohibition is declaratory of existing law.
6. Prohibit a bidder from being awarded a state park
concession contract if the bidder has made a legal claim or
assertion to have a trademark associated with a state park
in violation of this statutory prohibition, or if a court
has determined that the bidder has made a claim to have a
trademark or service mark interest in the name or names
associated with a state or federal park venue without
reasonable cause and in bad faith.
7. Require DPR to adopt regulations to provide a bidder who
is denied a contract award on the basis of trademark claims
with written notice and an opportunity to rebut the denial
at a formal hearing.
8. Provide that a provision of a concession contract or
other agreement that violates these provisions shall be
void and unenforceable.
9. Provide that this bill's prohibition on state park
concession contracts providing the basis for a trademark
claim in the name or names associated with a state park
shall not be construed to impact a contracting party's
valid trademark or service mark rights that were held
before the concession contract was awarded.
ARGUMENTS IN SUPPORT
At the core of the arguments in support is the notion that state
parks are part of the state's public trust and that this bill is
essential to protecting the integrity of California's treasured
state parks.
The author argues that "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
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trademark. No State Park official has the authority to agree to
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.
ARGUMENTS IN OPPOSITION
None received.
COMMENTS
Impact on National Park concession contracts: While this bill
targets concession contracts in state parks, it includes
provisions to encourage concessionaires to follow the same rules
when entering into contracts with national parks. This bill
would make a concessionaire ineligible for a state park
concession contract if a court determined that the
concessionaire made a legal claim to have a trademark interest
in the name or names associated with a state or federal park
venue. Thus, while the state cannot dictate the terms of
contracts in federal parks, this bill is attempting to use the
possibility of losing future concession contracts in state parks
as motivation to avoid making trademark claims in national
parks.
Double referred: The Rules Committee referred this bill to both
the Committee on Natural Resources and Water and the Committee
on Judiciary. Therefore, if this bill passes this committee, it
will be referred to the Committee on Judiciary, which will
consider the issues within their jurisdiction.
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SUPPORT
California Association of Professional Scientists
California Association of Recreation and Park Districts
California State Parks Foundation
Dave Jones, Insurance Commissioner, Department of Insurance
Sierra Club California
OPPOSITION
None Received
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