BILL ANALYSIS Ó AB 2249 Page 1 ASSEMBLY THIRD READING AB 2249 (Cooley, et al.) As Amended May 27, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Water |15-0 |Levine, Gallagher, | | | | |Bigelow, Dababneh, | | | | |Dodd, Gordon, | | | | |Cristina Garcia, | | | | |Gomez, Harper, Lopez, | | | | |Mathis, Medina, | | | | |Olsen, Salas, | | | | |Williams | | | | | | | |----------------+-----+----------------------+--------------------| |Judiciary |10-0 |Mark Stone, Wagner, | | | | |Alejo, Chau, Chiu, | | | | |Gallagher, | | | | | | | | | | | | | | |Cristina Garcia, | | | | |Holden, Maienschein, | | | | |Ting | | | | | | | |----------------+-----+----------------------+--------------------| AB 2249 Page 2 |Appropriations |20-0 |Gonzalez, Bigelow, | | | | |Bloom, Bonilla, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, Eduardo | | | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Jones, Obernolte, | | | | |Quirk, Santiago, | | | | |Wagner, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Enacts the California Heritage Protection Act, which prohibits a concession contract from providing a contracting party with a trademark interest in the name or names associated with a state park. 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. Finds and declares that California state parks are held in trust for the people of California, and that a legal claim to a trademark right in a name or names associated with a state park derogates the interests of California and is indicative of the claimant'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. 2)Modifies the definition of a 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 AB 2249 Page 3 a state park and state park resources. 3)Provides that a concessionaire who makes a legal claim to have a trademark 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)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)Commencing January 1, 2017, prohibits 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 the Department of Parks and Recreation (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 AB 2249 Page 4 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. EXISTING LAW: 1)Authorizes 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. Defines best responsible bidder as the bidder whom, as determined by DPR, will operate the concession consistent with the contract, in a manner fully compatible with and complimentary to the characteristics, features, and theme of the park unit, and in the best interests of the state and public. 2)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 DPR, will operate the concession in the best interests of the state and the public. 3)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 AB 2249 Page 5 bids. FISCAL EFFECT: According to the Assembly Appropriations Committee: 1)Initial costs of up to $500,000 for DPR (General Fund or special fund) to adopt regulations to establish a process for contested contract awards, determine eligibility of concessionaires, and amend existing contracts as necessary. 2)Ongoing annual costs of $335,000 (General Fund or special fund). COMMENTS: This bill prohibits a state park concession contract from providing, or serving as the basis for, any claim of a trademark right in the name or names associated with a state park. The author notes that to prevent concessionaires from co-opting state landmarks, this bill does three things. 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 prohibits concessionaires from claiming ownership of a name associated with a California state park. Third, a concessionaire who asserts such a claim will no longer be viewed as a fit partner to contract with DPR. This bill disqualifies a concessionaire from consideration for future contracts if they assert a trademark claim in violation of this bill's provisions, or are found by a court to have asserted such a claim without reasonable cause and in bad faith. This bill's impact rests on AB 2249 Page 6 the premise that a state park concessionaire's business is incompatible with a trademark or claim of ownership of park facilities, for which they have been entrusted as a steward, but which still remain the property of the state. This bill was sparked by a recent 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. 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, has been renamed the Majestic Yosemite Hotel. Supporters of this bill assert that allowing trademark claims in state or national parks would be a violation of the public trust and the deeply held understanding that state and national parks are treasured resources that belong collectively to the people of the state and 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, a trademark or service mark interest in the name or names associated with a state park. This bill would also make any AB 2249 Page 7 bidder who asserts such a legal claim ineligible to be awarded a contract. The contract currently 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 created during the period of the contract shall continue in DPR'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. Analysis Prepared by: Diane Colborn / W., P., & W. / (916) 319-2096 FN: 0003302