BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2249|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 2249
Author: Cooley (D), Bigelow (R) and Gray (D), et al.
Amended: 8/18/16 in Senate
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 6/14/16
AYES: Pavley, Stone, Allen, Hertzberg, Hueso, Jackson,
Monning, Vidak, Wolk
SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 80-0, 6/2/16 - See last page for vote
SUBJECT: State parks
SOURCE: Author
DIGEST: This bill establishes the California Heritage
Protection Act, which prohibits a concession contract from
providing a contracting party with a trademark or service mark
of the names associated with a unit of the state park system.
This bill further requires that a concessionaire forfeit the
right to bid on future state parks concession contracts if the
concessionaire makes a legal claim or assertion to a trademark
or service mark of the historical, cultural, or recreational
resources in a state park unit.
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Page 2
Senate Floor Amendments of 8/18/16 add double jointing language
to avoid chaptering out issues with SB 1473 (Senate Natural
Resources and Water Committee).
ANALYSIS:
Existing law:
1)Allows the Department of Parks and Recreation (DPR) to enter
into concession contracts within units of the state park
system. Existing law describes the process required to
solicit and select concession contract bids.
a) 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).
b) Alternatively, the director of DPR is authorized to
negotiate or renegotiate a contract under specific
conditions, including if the bid process failed to produce
a best responsible bidder.
2)Requires all concession contracts to contain several
provisions, including:
a) Maximum term shall be 10 years, unless under certain
conditions, as described.
b) A concession contract may exceed 50 years if it involves
the construction, development and operation of a
multiple-unit lodging facility with an initial cost of more
than $1.5 million.
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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:
1)Makes several legislative findings and declarations regarding
the public interest and historical significance served by
national, state, and regional parks, including Yosemite
National Park. This bill finds and declares 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. This bill finds and declares that an agreement entered
into by a California state agency that compromises the
interests of Californians is "ultra vires" and, therefore,
beyond that agency's legal authority to enter.
2)Modifies 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)Provides 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.
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4)Provides 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)Prohibits, commencing January 1, 2017, 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. States that this prohibition is
declaratory of existing law.
6)Prohibits 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)Requires 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)Provides that a provision of a concession contract or other
agreement that violates these provisions shall be void and
unenforceable.
9)Provides 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.
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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 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
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
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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.
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
makes 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.
Related/Prior Legislation
SB 1473 (Committee on Natural Resources and Water, 2016) allows
concession contracts at Will Rogers State Beach to be awarded
for up to 50 years if the anticipated capital improvements will
exceed $1.5 million. Amendments were also added to avoid
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conflicts with AB 2249. The bill passed the Assembly and has
been ordered to the Senate for concurrence.
AB 744 (Perez, Chapter 463, Statutes of 2012) required the
Department of General Services to identify and provide policy
guidance for state agency management of intellectual property
developed by state employees or with state funds.
AB 1484 (Krekorian, Chapter 711, Statutes of 2007) repealed
California's Trademark Law and replaced it with the Model State
Trademark Law, making numerous changes, including: (1) reducing
the registration period from 10 to five years; (2) requiring
applicants to state whether a similar mark has been registered
in this state; (3) conforming dilution provisions to the federal
"likely to dilute" standard; (4) stating that federal case law
is persuasive authority; and (5) removing a the provision
stating that a registration constitutes prima facie evidence of
the registrant's right to use the mark in California.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
One-time costs of $50,000 to $150,000 (General Fund) to DPR to
develop regulations.
Unknown, potentially significant costs, to ensure compliance
with anti-trademarking provisions and to provide required
appeals process, if requested.
Unknown cost for potential litigation for contested contract
awards.
SUPPORT: (Verified 8/12/16)
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California Insurance Commissioner Dave Jones
California State Treasurer John Chiang
California Association of Professional Scientists
California Association of Recreation and Park Districts
California State Parks Foundation
California Park and Recreation Society
East Bay Regional Park District
Sierra Club California
OPPOSITION: (Verified 8/12/16)
None received
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 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
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with those historic names and places.
ASSEMBLY FLOOR: 80-0, 6/2/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
Prepared by:Matthew Dumlao / N.R. & W. / (916) 651-4116
8/19/16 18:49:20
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