Guidance for Issuing Commercial Leases for Recreation-Related Businesses
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov
December 31, 2015
In Reply Refer To:
2920/2930 (250/350) P
EMS TRANSMISSION 12/31/2015
Instruction Memorandum No. 2016-030
Permanent
To: All Field Officials
From: Acting Assistant Director, Resources and Planning
Subject: Guidance for Issuing Commercial Leases for Recreation-Related Businesses
Program Area: Recreation and Visitor Services; Lands Realty, and Cadastral Survey
Purpose: This Instruction Memorandum (IM) establishes guidance related to existing “concession” leases and new commercial leases, for recreation related businesses. These commercial leases on Bureau of Land Management (BLM) administered lands consists of one instrument authorized under the Federal Land Policy and Management Act, 43 U.S.C. 1701, et seq., 43 U.S.C 1732, as codified at 43 CFR 2920. This policy is necessary to ensure that appropriate statutory and regulatory authorities are used for all commercial leases for recreation related businesses.
In addition, this IM clarifies that a leaseholder’s request to provide recreation and recreation related services on public lands and waters located outside the scope of the lease will be processed as a special recreation permit authorized under the Federal Lands Recreation Enhancement Act, PL-579 Sec3.2 (h), as codified at 43 CFR 2930.
Policy/Action: All existing “concession” leases will be revised to comply with the 43 CFR 2920 regulations as soon as practicable. Existing leases may continue to be operated until they are assigned, renewed, or amended. These regulations contain cost recovery provisions that also apply.
Issuing and Establishing a Commercial Lease
In accordance with 43 CFR 2920.8, all leases will be issued with rent that is based either upon the fair market value of the use authorized or as determined by competitive bidding. The authorized officer will request an appraisal from the Department of the Interior, Office of Valuation Services to obtain the fair market value of the use authorized prior to renewing, assigning, or amending existing leases or issuing new leases. The rental fee may be adjusted every 5 years or earlier, as determined by the authorized officer, in accordance with 43 CFR 2920.8. All rents received will be deposited in a designated U.S. Treasury account.
The lease must also comply with 43 CFR 2920.7, to include terms and conditions, and other requirements as necessary to protect the interest of the U.S. and the environment. Bonding requirements should be used as a tool for performance and reclamation standards in the terms and conditions of the lease.
Accounting
Proper accounting is essential to the management and oversight of the commercial lease program and will be the responsibility of the authorized officer. Oversight will be provided by the national, state, district and field offices as necessary to assure compliance with agency accounting regulations and policies.
Cost Recovery
Cost recovery is based on actual costs incurred in accordance with 43 CFR 2804.14, 2805.16, and 2920.6(b). The cost recovery amounts for each lease will be calculated independently to ensure reimbursement (actual costs) for processing and monitoring the lease. Starting immediately, each existing lease will be assigned a unique work breakdown structure (WBS) code that will conform to the Financial Budget Management System (FBMS) procedures for accountability purposes. This money will be administered in accordance with BLM Manual 1323, Cost Recovery for Reimbursable Projects/Activities and the FBMS accounting protocols (in subactivity L5440). All applications for new, assigned, amended, or renewed leases will require the execution of a cost recovery agreement to establish a new cost recovery account. Lease program needs, including but not limited to, appraisals, financial audits, property inspections, safety audits of the facilities, evaluation of visitor services and satisfaction, and other needs to manage the project shall be included in cost recovery estimates/determinations or when reporting to applicants/lessees on actual monies that were spent. Labor and operational cost expenditures will be identified with the appropriate WBS code for the specific lease for which they are incurred. All employees working and charging to these accounts shall complete BLM Form 1323-1 (Reimbursable Project Log) each pay period. This form shall be signed by the authorized officer and placed in the lease case file.
Rental Fees
Individual lease rental payments paid to the Government will be deposited into the appropriate U.S. Treasury account.
Issuing a Special Recreation Permit
A leaseholder’s request to provide recreation and recreation-related services on public lands and waters will be processed as a special recreation permit with approval by the authorized officer in accordance with 43 CFR 2930.
Timeframe: This policy will be effective immediately and implemented for all new and existing leases as soon as practicable. Existing leases may continue to be operated until they are assigned, renewed, or amended. The conversion to the accounting processes in this IM will be effective immediately.
Budget Impact: Leases provide a fair return to the Government for the authorization of commercial use of BLM-administered lands. All fees paid to the Government under the leases will be deposited into the appropriate accounts.
Implementing this policy will change the future management of the recreation and visitor services program in the BLM Districts with current “concession” leases. Revising existing leases and their administration to meet the requirements described herein may require a substantial investment of staff time, programming, and workload planning for lands, realty and cadastral staff as well as recreation and visitor services staff in multiple affected offices.
Background: The BLM has managed a number of leases labeled as “concession” leases in Arizona and California since the 1960s. The leases were established and monitored by the Department of the Interior’s Lower Colorado River Land Use Office and assigned to the BLM to administer by Secretarial Order 2915 (December 11, 1968).
The authorities under which the BLM manages the subject leases do not specifically authorize a “concession” lease program. Therefore, the term “concession” should not be used. Further, the existing leases do not clearly distinguish between authorization for commercial use of public lands and authorization to provide recreational activities. Accordingly, the manner in which the leases have historically been administered by both the Lands and Realty and Recreation and Visitor Services programs has been revisited.
The Department of the Interior’s Office of Inspector General issued its Final Evaluation Report - Review of BLM’s Concession Management Practices (C-EV-BLM-0013-2013) on March 30, 2015, and this IM addresses those findings. The BLM will continue to work with the Department of the Interior’s Office of the Solicitor and Office of Policy, Management and Budget to develop a proposal for legislation that establishes explicit “concession” authority for the BLM.
Manual/Handbook Section Affected: None.
Coordination: Development of this IM was coordinated among the Division of Recreation and Visitor Services, (WO-250), Division of Lands, Realty, and Cadastral Survey (WO-350), Arizona State Office (AZ-930), the Colorado River District (AZ-C00), and the Office of the Solicitor.
Contact: If you have questions or concerns please contact Stephen Fusilier, Lands, Realty, and Cadastral Survey Division by email sfusilie@blm.gov, or by phone at 202-912-7148, or David Ballenger, Recreation and Visitor Services Division by email dballeng@blm.gov, or by phone at 202-912-7642.
Signed by: Authenticated by:
Michael H. Tupper Catherine Emmett
Acting Assistant Director Division of IRM Governance, WO-860
Resources and Planning