BILL ANALYSIS Ó AB 2249 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2249 (Cooley, et al.) As Amended August 18, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |80-0 |(June 2, 2016) |SENATE: | 39-0 | (August 23, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: W., P., & W. 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. The Senate amendments: 1)Clarify that the provision of this bill that prohibits a state park concession contract from providing the contracting party with a trademark or service mark interest in the name or names associated with a state park, and prohibits such a contract from forming the basis for any legal claim to such an interest, does not constitute a change in but is declaratory of existing law. AB 2249 Page 2 2)Clarify that the provision of this bill that declares a contract that violates the above prohibition to be void and unenforceable is effective commencing January 1, 2017. 3)Narrow the provision of this bill which makes a concessionaire who files an application for a trademark or service mark in association with a state park liable for the state's attorney's fees, applicable only if the filing is in bad faith. 4)Add co-authors and technical language to avoid chaptering out problems with SB 1473 (Committee on Natural Resources and Water) in the event both bills pass and amend the same code section. EXISTING LAW: 1)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. Defines best responsible bidder as the bidder who, as determined by the 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 the DPR, if the director of the 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 DPR, will operate the concession in the best interests of the state and the public. AB 2249 Page 3 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 bids. FISCAL EFFECT: According to the Senate Appropriations Committee: 1)One-time costs of $50,000 to $150,000 (General Fund) to the California Department of Parks and Recreation (CDPR) to develop regulations. 2)Unknown, potentially significant costs, to ensure compliance with anti-trademarking provisions and to provide required appeals process, if requested. 3)Unknown cost for potential litigation for contested contract awards. 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 Senate amendments are technical and clarifying. This bill clarifies that a concession contract in a state park does not entitle a company to any legal claim of a trademark, prohibits concessionaires from claiming ownership of a name associated with a California state park, and 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 the premise that a state park concessionaire's business is incompatible with a trademark or claim of ownership of park AB 2249 Page 4 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. 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 bidder who asserts such a legal claim ineligible to be awarded a contract. The contract currently used by the 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 the DPR's exclusive ownership upon termination of the contract. While this is the current practice at the 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: AB 2249 Page 5 0004706