Commission Agenda Item No. 10
Presenter:  Darcy Bontempo

Action
Implementation of Legislation regarding House Bill 1300
Official Corporate Partners and State Park Passes
January 26, 2012

I.       Executive Summary:  This item seeks adoption of 1) proposed new rules governing the selection of for-profit entities for designation as an Official Corporate Partner of the department, and 2) a new rule setting forth the conditions under which the Department would consider authorizing the sale of state park passes by outside entities.  Both rules are proposed pursuant to the enactment of House Bill 1300 by the 82nd Texas Legislature.

II.      Discussion:  House Bill 1300 authorizes the Commission to designate one or more “Official Corporate Partners” (OCP) to work with the Department to raise additional revenue to benefit Department programs, projects, and sites.  HB 1300 also authorizes the Department to contract with any entity the department considers appropriate to sell state park passes.

The proposed amendments were published in the December 23, 2011, issue of the Texas Register (36 TexReg 8730-8738).  Staff will present a summary of public comment at the time of the meeting.

III.     Recommendation:  The staff recommends the Texas Parks and Wildlife Commission adopt the following motion:

“The Texas Parks and Wildlife Commission adopts new §§51.700-51.704, concerning Official Corporate Partners, and §59.8, regarding Outsourcing the Sale of Texas State Park Passes, with changes as necessary to the proposed text as published in the December 23, 2011, issue of the Texas Register (36 TexReg 8730-8738).”

Attachments — 2

  1. Exhibit A – Proposed Official Corporate Partner Rules
  2. Exhibit B – Proposed State Park Pass Outsourcing Rule

Commission Agenda Item No. 10
Exhibit A

RULES REQUIRED OR AUTHORIZED BY LEGISLATION
HOUSE BILL 1300 – OFFICIAL CORPORATE PARTNERS
PROPOSAL PREAMBLE

1. Introduction.

         The Texas Parks and Wildlife Department proposes new §§51.700-51.704, concerning Official Corporate Partners. House Bill 1300 (HB 1300), enacted by the 82nd Texas Legislature, amended Parks and Wildlife Code, Chapter 11, by adding Subchapter J-1 to address the use of private contributions, partnerships, licensing and commercial advertising to provide additional funding for department programs, projects, and sites. Parks and Wildlife Code, §11.225, as added by HB 1300 requires the Texas Parks and Wildlife Commission (commission) to adopt rules to implement the provisions of Subchapter J-1, including rules that establish guidelines or best practices for official corporate partners.

         Proposed new §51.700, concerning Definitions, would set forth the meanings of words and phrases used in the proposed new rules, and is necessary to prevent misinterpretations and misunderstandings with respect to terminology.

         Proposed new §51.700(1) would define the word “department” to mean the Texas Parks and Wildlife Department.

         Proposed new §51.700(2) would define “department brands” as “the department’s trademarks, logos, name, seal, and other intellectual property.” Parks and Wildlife Code, §13.0155, as added by HB 1300, authorizes the department to contract with “any entity the department considers appropriate to use the Parks and Wildlife Department brand in exchange for licensing fees paid by the entity to the department.”  The proposed new rules address the use and licensing of the department brands.  Therefore, a definition of “department brands” is needed for clarity.

         Proposed new §51.700(3) would define “department site (or site)” as “a wildlife management area , fish hatchery, state park, state natural area, or state historic site under the jurisdiction of the department, or other property or facility owned or operated by the department.” HB 1300 authorizes the department to work with for-profit entities to raise funds for state site operations and management, and defines “state site” as “a state park, natural area, wildlife management area, fish hatchery or historic site under jurisdiction of the department.” Parks and Wildlife Code, §13.001 requires the commission to establish a classification system for department sites.  To account for possible changes in classification of department sites, the proposed new definition clarifies that the definition of “department site” includes all properties or facilities owned or operated by the department.  This definition is intended to ensure that all department sites are eligible to benefit from fundraising activities by for-profit entities.

         Proposed new §51.700(4) would define “department-wide Official Corporate Partner (OCP-D)” as “an official corporate partner whose financial support of the department is intended to be broad in nature and not tied or restricted to a specific program, project or site.” The proposed new rules make a distinction between those relationships intended to benefit a specific program, project or site and those relationships intended to provide broader benefits to the department. Therefore, the proposal provides definitions to clearly delineate that distinction and provide an acronym for ease of reference.

         Proposed new §51.700(5) would define “license” as “a written authorization allowing a person or entity to use one or more department brands for the purpose of selling products or services branded with one more department brands, and includes the act of granting a license.”  This definition is intended to include the use of the word “license” as a noun and as a verb.  This definition is necessary to ensure clarity in references to “license” in the proposed rules.

         Proposed new §51.700(6) would define “Local Official Corporate Partner (OCP-L)” as “an Official Corporate Partner whose financial support of the department is intended to be limited to a specific program, project or site and is not broad in nature.” As noted previously, the proposed new rules make a distinction between those relationships intended to benefit a specific program, project or site and those relationships intended to provide broader benefits to the department. Thus, a definition is necessary to clearly delineate that distinction, and to provide an acronym for ease of reference.

         Proposed new §51.700(7) would define “for-profit entity” as “a corporation, organization, business trust, estate, trust, partnership, association, or any other legal entity, that exists for the purpose of generating profits.” The definition is intended to encompass the various types of entities that are established to generate a profit.

         Proposed new §51.700(8) would define “Official Corporate Partner” as “a for-profit entity that is designated as an official corporate partner by the department; works with the department to raise funds for state site operations and maintenance or other priority projects or programs; and is selected as provided in this subchapter.” The proposed definition is taken from Parks and Wildlife Code, §11.221(1) as added by HB 1300.  The definition is included in the proposed rules for ease of reference.  Proposed new §51.700(b) would stipulate that unless clearly identified as being applicable only to an OCP-D and/or OCP-L, the use of the acronym OCP shall apply to both an OCP-D and OCP-L.

         Proposed new §51.701, concerning Designation of OCPs, would set forth the process used by the department to select a for-profit entity as an OCP.  Under Parks and Wildlife Code, §11.223(b) as added by HB 1300, the department is authorized to contract with one or more OCPs to conduct joint promotional campaigns or other fund-raising efforts.

         Proposed new §51.701(a) would stipulate that all OCP-Ds be selected through a fair and competitive process that takes into consideration the amount of support being offered and the needs of the department. The department believes that it is important that the process of selecting an OCP-D be designed to generate the greatest benefit for the department.  The department believes that a fair and competitive process will help ensure that the department is obtaining the greatest benefit from an OCP-D designation.

         Proposed new §51.701(b) would stipulate that all OCP-Ls be selected through a fair process that takes into consideration the availability of other possible OCP-Ls for the program, project, or site; the amount of support being offered; and the needs of the site or program. Since an OCP-L’s support is limited to a specific program, project or site, in many instances there will be an insufficient number of for-profit entities seeking to become an OCP-L to warrant a full competitive process.  Therefore, the selection process should be based on an assessment of the potential of any given prospective relationship to generate the highest and best benefit for the department’s mission by itself or in concert with other OCP-Ls.

         Proposed new §51.701(c) would stipulate that an entity shall not be considered an OCP until it has been so designated by order of the executive director of the department or his or her designee. The proposed new provision is necessary to provide a method of officially acknowledging the commencement of OCP status by the executive authority of the agency.

         Proposed new §51.701(d) would provide for the selection of multiple OCP-Ds and OCP-Ls by the department. The proposed new provision recapitulates the provisions of Parks and Wildlife Code, §11.222(b), as added by HB 1300, for ease of reference.  This provision also provides that the department will determine whether an OCP should be designated as an OCP-D or and OCP-L.  Since there are some differences in benefits and restrictions between and OCP-D and OCP-L, the department must be able to designate an OCP as either an OCP-D or an OCP-L.

         Proposed new §51.701(e) would provide that the department may define the specific business category within which an OCP is designated.  As explained with regard to proposed §51.701(f) the department intends that OCPs be designated within specific categories.  These categories may be based on the type of service or product offered by the OCP, or the industry of which the OCP is a part.  To facilitate such designation by category, the department will define the category in which an OCP will be designated.  To ensure that the department’s regulatory functions are not compromised by the designation, an OCP will not be designated in a business category regulated by the department (e.g. commercial shrimping).

         Proposed new §51.701(f) would require the department to designate each OCP-D within a specific business category and would stipulate that the department will not select another OCP for the same business category within the term of the OCP-D’s designation.  The department believes that designating an OCP-D as the exclusive OCP within a specified category will increase the value of the OCP designation and thus increase the benefits to the department.  Therefore, it is necessary to stipulate that the department will not designate more than one OCP-D per business category.

         Proposed new §51.701(g) would allow the department to designate one or more OCP-Ls within a specific business category for the program, project, or site for which the OCP-L is designated. Unlike the OCP-Ds, which are broader in scope, the OCP-Ls are confined to specific projects, programs or sites. Since OCP-Ls may be able to offer a lower level of support, the department would like to provide for the possibility that multiple entities could be designated as an OCP-L within a business category to maximize support for the project, program or site.

         Proposed new §51.701(h) would stipulate that the designation of an OCP-L is subject to cancellation by the department in the event an OCP-D is designated within the same business category. In making the distinction between OCP-Ds and OCP-Ls, the department recognizes that a situation could arise in which an OCP-L is designated within a business category and the department subsequently enters an agreement with an OCP-D providing a much greater benefit within the same business category. In light of this possibility, the department believes it is prudent to provide for the possibility of cancellation of an OCP-L’s status in this circumstance to enhance benefits to the department. The proposed new provisions also would stipulate that the department will provide reasonable advanced written notice to an OCP-L of such cancellation and shall inform all OCP-Ls of the possibility of such cancellation.

         Proposed new §51.701(i) would require the department to establish minimum criteria that must be met by an entity to be considered for designation as an OCP-D.  Those criteria include, but are not limited to: commitment of a minimum amount in cash, goods, and/or services; a presence in the state that is sufficiently broad for the type of OCP-D designation and the ability of the entity to engage in joint promotional campaigns and/or cooperative ventures utilizing technology and/or systems belonging to the entity;  a mission or purpose that does not conflict with the mission of the department; and other criteria established by the department based on the needs of the department. In general, the department intends to consider designation as OCP-Ds only those entities that can demonstrate a credible potential to provide needed benefits to the department. Therefore, the proposed new rules would stipulate that the department develop minimum standards that an entity would have to meet to be considered for an OCP-D designation.

         Proposed new §51.701(j) would stipulate that the department may establish appropriate criteria for an entity to be considered as an OPC-L. As discussed earlier, OPC-Ls will generally be much smaller and more limited in scope than OCP-Ds, but may be significant for a particular program, project or site. The department therefore prefers to create a more flexible standard for determining whether an entity should be considered for designation as an OCP-L.

         Proposed new §51.701(k) would require an OCP designation to be in effect for a specified period of time. The department does not intend for an OCP designation to be open-ended or perpetual; therefore, the proposed new rules require such designations to be effective for a specific time period.

         Proposed new §51.701(l) would establish that designation as an OCP in no way constitutes an endorsement of products or services of an OPC by the department.  The intent of the proposed rules is to set forth the process and guidelines for developing relationships that are beneficial to the agency’s mission; however, the department believes that it should be made clear that an OCP relationship with the department is for fundraising purposes only and does not in any way extend to an endorsement of products or services by the department.

         Proposed new §51.701(m) would make it clear that the department will not designate an entity as an OCP if the designation would result in a conflict with the department’s regulatory, contractual, or other obligations, or would otherwise create the appearance of a conflict of interest. As noted in the discussion of proposed new §51.701(l), the intent of the proposed rules is to set forth the process and guidelines for developing fundraising relationships that are beneficial to the agency’s mission. The designation of an OCP that creates a conflict of interest or that militates against the department’s mission would not achieve that intent.

         Proposed new §51.701(n) would make it clear that the department is an independent entity and is not to be understood or construed as an agent, partner (as defined by the Business Organizations Code), or joint venture participant with respect to an OCP and is not responsible for the acts, omissions, or conduct of an OCP.  The purpose of this provision is to clarify that although the word “partner” is used colloquially in referring to the relationship between the department and entities designated as OCPs, the use of “partner” is not intended to suggest a legal relationship beyond that incidental to the OCP designation.

         Proposed new §51.702, regarding Guidelines, would set forth provisions establishing the conditions under which a for-profit entity designated as an OCP would be required or allowed to operate.

         Proposed new §51.702(a) would require each OCP to enter into an agreement with the department regarding the terms, conditions, restrictions, benefits, roles, and responsibilities of the department and the OCP and the scope of the OCP designation. The department has determined that in order to ensure that relationships with OCPs are not jeopardized by misunderstandings or misinterpretations, it is prudent to have a written agreement with each OCP that spells out the exact nature of the arrangement between the OCP and the department.

         Proposed new §51.702(b) would stipulate that among the benefits that may be provided by the department to an OCP-D is the right of the OCP-D to be designated as the “official” OCP-D of the department within a business category and to identify itself as the “Official” product or service of Texas Parks and Wildlife or the Texas Parks and Wildlife Department, or some variation thereof. In order to provide an OCP-D with exclusive product visibility in a given business category, the department has determined that it is useful to allow the designation of the product, service or industry as the “official” good, service or industry of Texas Parks and Wildlife, the Texas Parks and Wildlife Department, Texas State Parks, or variations thereof, if such a designation can provide a benefit to the department.

         Proposed new §51.702(c) would stipulate that among the benefits that may be provided by the department to an OCP-L is the right to be designated as the “official” OCP-L for the program, project, or site for which the OCP-L is designated (or within a business category for the program, project, or site) and be allowed to identify itself as the “Official” product, service or industry of the specific program, project or site. For the same reasons noted in the discussion of proposed new §51.702(b), the department believes that it is useful to allow the designation of the product or service as the “official” good, service or industry of a department program, project, or site if such a designation can provide a benefit to department programs, projects, or sites.

         Proposed new §51.702(d) would require an OCP to maintain and retain all work and other supporting documents pertaining to its designation as the OCP and all work performed pursuant to its designation as an OCP, and to provide or make such documentation available, upon request, for purposes of inspecting, monitoring, auditing, or evaluating by the department and any authorized agency of the State of Texas. Obviously, in order to maintain the public trust it is an imperative duty of the department to ensure that all work performed in the role of OCP is documented and available for any purpose authorized by law.

         Proposed new §51.702(e) would require an OCP to carry out the fiscal, business, legal, and tax responsibilities required and appropriate for an entity of the size and structure as the OCP. The department seeks to ensure to the greatest extent possible that an OCP is a responsible business entity.

         Proposed new §51.702(f) would stipulate that an OCP’s work with the department not conflict with the department’s mission and goals. As noted in the discussion of proposed new §51.701(m), the intent of the proposed rules is to set forth the process and ground rules for developing fundraising relationships that are beneficial to the agency’s mission. The department is less likely to benefit from the designation of an OCP that creates a conflict of interest or that militates against the department’s mission.

         Proposed new §51.702(g) would require an OCP to be authorized to conduct business in the state of Texas and must be in good standing with the State of Texas. The department has determined that it is prudent to require all OCPs to be legitimate and lawful businesses with no outstanding issues that would reflect poorly on the department.

         Proposed new §51.702 (h) would require all fundraising activities or programs undertaken by the OCP for the benefit of the department to be approved in advance in writing by the department.  This provision is intended to ensure that an OCP’s fundraising activities address the needs of the department and are not misdirected.

         Proposed new §51.702 (i) would prohibit an OCP from subcontracting or entering into an agreement with another person or entity to carry out the OCP’s functions as an OCP, except as agreed in writing by the department. This provision is intended to ensure appropriate controls of the OCP’s activities on behalf of the department.

         Proposed new §51.702 (j) would require an OCP to submit funds generated on behalf of or for the benefit of the department as soon as possible in a manner as determined by the department and to observe applicable accounting standards during the interim between obtaining such funds and transferring them to the department. Under Parks and Wildlife Code, §11.223(a) as added by HB 1300, the department is required to “ensure that an official corporate partner transfers the contributions, gifs, grants, and promotional campaign proceeds accepted on behalf of the department to the department as soon as possible.” The proposed new subsection includes this statutory requirement for ease of reference. In order to ensure that money, goods, or services accepted on behalf of the department by an OCP can be tracked and audited, it is necessary to require that they be accounted for appropriately.

         Proposed new §51.702(k) would stipulate that all projects undertaken for the department by an OCP-L be related to and supportive of the department project, program, or site for which the OCP-L is designated. The department believes that it is critical that the activities of an OCP-L be consistent with the purpose and goals of the particular project, program, or site.

         Proposed new §51.702(l) would recapitulate the provisions of Parks and Wildlife Code, §11.226 as added by HB 1300, for ease of reference.  This proposed subsection provides that the proposed rules do not limit the department’s authority to accept donations that are otherwise authorized. The proposed new subsection also stipulates that all such other donations shall be in accordance with applicable law and department policy and may be made in support of a specific purpose or program.

         Proposed new §51.703, concerning Advertising, would set forth specific provisions governing the use and content of advertising by an OCP in the context of activities conducted under the subchapter.

         Proposed new §51.703(a) would prohibit the use of department funds to advertise a product and/or service of the OCP, except to provide information about the relationship with the OCP and encourage public participation in OCP-sponsored activities or events support of the department’s mission, to provide information about the availability of products and/or services of an OCP that have been created and/or are being made available pursuant to an agreement with the department to support department programs, projects, or sites, or to offset fulfillment costs or opportunity costs incurred by the department to provide advertising to the OCP in department publications, web sites, at department sites and other department vehicles and outlets. The department believes that it is prudent to limit the use of department resources to only those circumstances in which the department’s interests are clearly and directly being served.

         Proposed new §51.703(b) would prohibit the use of department brands (as defined in §51.700(2)) except as authorized by written agreement with the department. The department must ensure that its brands, like other department property, are used appropriately and for the benefit of the department.

         Proposed new §51.703(c) would set forth the conditions under which the department would allow advertising by an OCP in department publications, web sites, other media vehicles, and/or at department sites. In order to ensure that the positioning of OCP advertising content on department media platforms is managed in a careful and responsible manner, the department has determined that it is prudent to stipulate that no OCP advertising will appear in department media unless and until it has been approved in writing in advance by the department’s executive director or designee, that the advertising must be in the best interest of the department and not conflict with the department’s mission and goals, and that the advertising  not be more prominent than or overshadows the role of the department. Similarly, advertising content or placement at a department site that would have the effect of interfering with public enjoyment or impact the natural or scenic integrity of the site would not be authorized.

         Proposed new §51.703(d) would provide that the designation of an OCP as the exclusive OCP for a specific business category would not limit the department’s ability to accept advertising for department publications (including but not limited to the Texas Parks and Wildlife Magazine), the department web site, or other media from potential competitors of the OCP. This provision is intended to clarify that the designation of an OCP will not impair the department’s ability to seek advertising revenue necessary to support department publications or other media outlets.

         Proposed new §51.703(e) would affirm that the department will not accept any advertisement that does not comply with department rules or Parks and Wildlife Code, §11.0172 or §11.0173. Under Parks and Wildlife Code, §11.0172, the department is required to adopt rules regarding the types of advertising that are inappropriate for viewing by youth. Those rules are contained in §51.72 of this chapter. Parks and Wildlife Code, §11.0173 prohibits the department from accepting advertising in a publication sponsored or published by the agency if the advertising promotes the sale of tobacco.  Similarly, §51.72 of this chapter provides that youth appropriate advertising means advertising that does not include any alcohol or tobacco products.

         Proposed new §51.704 concerning Licensing of the Department Brands, sets forth the conditions under which the department would license the use of department brands and permit an OCP to use them.

         Proposed new §51.704(a) would establish that the department may license the use of department brands as a benefit to an OCP-D or as a means to generate revenue for the department. An incentive that the department may be able to offer a potential OCP-D to enhance revenue to the department may be the ability of the OCP-D to use department brands.  In addition, the department may be able to generate revenue for the department by authorizing the use of the department brand by entities other than an OCP-D.  The intent of HB 1300 is to create the opportunity for the department to enter into financially beneficial relationships with for-profit entities. Appropriate and limited licensing of the department brand is a means to generate revenue for the department.

         Proposed new §51.704(b) would stipulate that the department will not license a use of department brands that conflicts with the department’s mission and goals. The department’s intent in licensing the department’s brands is to generate revenue to further the agency’s mission. A use of department brands that conflicts with the department’s mission would not likely carry out that intent.

         Proposed new §51.704(c) would require the department to use a competitive process to award the licensing rights for one or more department’s brands.  The department believes that it is important that the process of awarding licensing rights be predicated on generating the highest and best benefit for the department’s mission. Therefore, the proposed new rules would provide that the department will award licensing rights through a competitive process.

         Proposed new §51.704(d) would stipulate that any licensing or use of the department brands be subject to the terms, conditions, restrictions, and time frame(s) specified in writing by the department. The department has determined that to ensure that licensing relationships are not jeopardized by misunderstandings or misinterpretations, it is prudent to have a written agreement that spells out the exact nature of the licensing arrangement between the licensee and the department, including the length of time that a licensee may use department brands under an agreement.

         Proposed new §51.704(e) would provide that nothing in §51.704 is to be construed to prohibit the department from authorizing the use of one or more department brands to recognize a person or entity that joins with and/or provides support to the department, including but not limited to an OCP-L, or a sponsor or supporter of a department program, project, or site. The department currently receives a number of donations, gifts, and benefits from the generosity of many for-profit entities. The department does not wish for the provisions of the section to interfere with the department’s ability to recognize all beneficial contributions in furtherance of the agency’s mission.

         Proposed new §51.704(f) would stipulate that unless otherwise authorized, the private use of department brands is not permitted without a prior written agreement with the department.  This provision is intended to ensure that the department’s brands are used to support department purposes.

         Proposed new §51.704(g) would allow the department to deny the use of department brands when such use is not in the best interest of the department. As discussed previously, the department brands are the most visible symbol of the department in the public eye, and the department is therefore eager to prevent situations in which the use of those brands would not be in the best interest of the department. Thus, the proposed new rules would allow the department to deny the use of department brands under such circumstances.

2. Fiscal Note.

         Ms. Darcy Bontempo, Director of Marketing Services, has determined that for each of the first five years that the rules as proposed are in effect, there will be fiscal implications to state government as a result of enforcing or administering the rules. Those implications are expected to be positive, since the purpose of the rules is to enhance fundraising activities; however, there is no historical data upon which to base an estimate.

         There will be no fiscal implications for other units of state or local government as a result of enforcing or administering the rules.

3. Public Benefit/Cost Note.

         Ms. Bontempo also has determined that for each of the first five years the rules as proposed are in effect:

         (A) The public benefit anticipated as a result of enforcing or administering the rules as proposed will be the enhancement of the department’s ability to raise funds to provide and maintain department programs, projects, and sites.

         (B) Under the provisions of Government Code, Chapter 2006, a state agency must prepare an economic impact statement and a regulatory flexibility analysis for a rule that may have an adverse economic affect on small businesses and micro-businesses. As required by Government Code, §2006.002(g), the Office of the Attorney General has prepared guidelines to assist state agencies in determining a proposed rule’s potential adverse economic impact on small businesses. Those guidelines state that an agency need only consider a proposed rule’s “direct adverse economic impacts” to small businesses and micro-businesses to determine if any further analysis is required. For that purpose, commission considers “direct economic impact” to mean a requirement that would directly impose recordkeeping or reporting requirements; impose taxes or fees; result in lost sales or profits; adversely affect market competition; or require the purchase or modification of equipment or services.

         The department has determined that there will be no adverse economic effects on small businesses, microbusinesses, or persons required to comply with the rules as proposed. The rules set forth the guidelines for the selection of official corporate sponsors. The rules as proposed do not require any person or entity be an official corporate sponsor of the department, and any relationship between a person or entity and the department under the proposed rules would be strictly voluntary and set forth by contract. Accordingly, the department has not prepared a regulatory flexibility analysis under Government Code, Chapter 2006.

         (C) The department has not drafted a local employment impact statement under the Administrative Procedures Act, §2001.022, as the agency has determined that the rules as proposed will not impact local economies.

         (D) The department has determined that Government Code, §2001.0225 (Regulatory Analysis of Major Environmental Rules), does not apply to the proposed rules.

         (E) The department has determined that there will not be a taking of private real property, as defined by Government Code, Chapter 2007, as a result of the proposed rules.

4. Request for Public Comment.

         Comments on the proposed rule may be submitted to Ms. Darcy Bontempo, Texas Parks and Wildlife Department 4200 Smith School Road, Austin, Texas, 78744; (512) 389-4574 (e-mail: darcy.bontempo@tpwd.state.tx.us).

5. Statutory Authority.

         The new rules are proposed under the authority of Parks and Wildlife Code, §11.225, as added by House Bill 1300, enacted by the 82nd Texas Legislature, Regular Session (2011), which requires the commission to adopt rules to implement the provisions of Parks and Wildlife Code, Chapter 11, Subchapter J-1, and under Parks and Wildlife Code, §13.303, as added by House Bill 1300, enacted by the 82nd Texas Legislature, Regular Session (2011), which requires the commission to adopt rules to prohibit inappropriate commercial advertising in state parks, natural areas, historic sites, or other sites under the jurisdiction of the department..

         The proposed new rules affect Parks and Wildlife Code, Chapter 11.

§51.700. Definitions.

                 (a) The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. All other words and terms shall have the meanings assigned by Parks and Wildlife Code, Chapter 11, Subchapter J-1.

                         (1) Department—The Texas Parks and Wildlife Department.

                         (2) Department brands—The department’s trademarks, logos, name, seal, and other intellectual property.

                         (3) Department site (or “site”)—A wildlife management area, fish hatchery, state park, state natural area, or state historic site under the jurisdiction of the department, or other property or facility owned or operated by the department.

                         (4) Department-wide Official Corporate Partner (OCP-D) — An Official Corporate Partner whose financial support of the department is intended to be broad in nature and not tied or restricted to a specific program, project or site.

                         (5) License—A written authorization allowing a person or entity to use one or more department brands for the purpose of selling products or services branded with one or more department brands, and includes the act of granting a license.

                         (6)  Local Official Corporate Partner (OCP-L)—An Official Corporate Partner whose financial support of the department is intended to be limited to a specific program, project or site and is not broad in nature.

                         (7) For-profit entity—A corporation, organization, business trust, estate, trust, partnership, association, or any other legal entity, that exists for the purpose of generating profits.

                         (8) Official Corporate Partner (OCP)—A for-profit entity that:

                                  (A) is designated as an official corporate partner by the department;

                                  (B) works with the department to raise funds for state site operations and maintenance or other priority projects or programs; and

                                  (C) is selected as provided in this subchapter.

                 (b) Unless clearly identified as being applicable only to an OCP-D and/or OCP-L, the use of the acronym OCP shall apply to both an OCP-D and OCP-L.

         §51.701. Designation of OCPs.

                 (a) All OCP-Ds shall be selected through a fair and competitive process that takes into consideration the amount of support being offered and the needs of the department.

                 (b) OCP-Ls shall be selected through a fair process that takes into consideration the availability of other possible OCP-Ls for the program, project or site, the amount of support being offered and the needs of the site or program.

                 (c) An entity shall not be considered an OCP until it has been designated as an OCP by order of the department’s executive director, or designee.

                 (d)  The department may select multiple OCP-Ds and/or OCP-Ls.  The department will determine, in its sole discretion whether an OCP should be classified as an OCP-D or OCP-L.

                 (e) The department may define the specific business category within which an OCP is designated.  An OCP will not be designated in a business category regulated by the department.

                 (f) The department shall designate each OCP-D within a specific business category and will not select another OCP for the same business category within the term of the OCP-D’s designation.

                 (g) The department may designate one or more OCP-Ls within a specific business category for the program, project or site for which the OCP-L is designated.

                 (h) The designation of an OCP-L shall be subject to cancellation by the department in the event an OCP-D is designated within the same business category.  The department will provide reasonable advanced written notice to the OCP-L of such cancellation and shall inform all OCP-Ls of the possibility of cancellation under this subsection.

                 (i) The department shall establish minimum criteria that must be met by an entity to be considered for designation as an OCP-D.  Such criteria may include, but are not limited to the following:

                         (1) commitment of a minimum amount in cash, goods, and/or services established by the department;

                         (2) a presence in the state that is sufficiently broad for the type of OCP-D designation and the ability of the entity to engage in joint promotional campaigns and/or cooperative ventures utilizing technology and/or systems belonging to the entity;

                         (3) a mission or purpose that does not conflict with the mission of the department; and

                         (4) other criteria established by the department based on the needs of the department.

                 (j) The department may establish criteria, as appropriate, to be met by an entity to be considered for designation as an OCP-L, which may include some or all of the criteria listed in subsection (i) of this section.

                 (k) The designation of an OCP shall be for a specified period of time.

                 (l) The designation of an OCP shall not constitute an endorsement by the department of the OCP or the OCP’s products and/or services.

                 (m) The department will not designate an entity as an OCP if the designation would result in a conflict with the department’s regulatory, contractual or other obligations, or would otherwise create the appearance of a conflict of interest.

                 (n) Notwithstanding the designation of an entity as an OCP and unless otherwise expressly agreed by the department in writing:

                         (1) the department and an OCP are independent entities and are not agents, partners, joint venture participants or otherwise responsible for the acts, omissions, or conduct of the other party; and

                         (2) the legal relationship of the department and an OCP shall not be considered a “partnership” and neither the department nor an OCP shall be considered a “partner” of the other as those terms are defined and used in the Business Organizations Code.

         §51.702. Guidelines.

                 (a) Each OCP shall enter an agreement with the department regarding the terms, conditions, restrictions, benefits, roles and responsibilities of the department and the OCP and the scope of the OCP designation.

                 (b)  Among the benefits that may be provided by the department to an OCP-D is the right of the OCP-D to be designated as an “official” OCP-D of the department within a business category and to identify itself as the “Official (specific business category) of Texas Parks and Wildlife" or other variations of this designation, including but not limited to the “Official (specific business category) of Texas State Parks.”

                 (c) Among the benefits that may be provided by the department to an OCP-L is the right to be designated as the “official” OCP-L for the program, project or site for which the OCP-L is designated or within a business category for the program, project, or site and be allowed to identify itself as an “Official (specific business category) of the (specific program, project or site).”

                 (d) An OCP shall maintain and retain all work and other supporting documents pertaining to its designation as the OCP and all work performed pursuant to its designation as an OCP.  Such documents shall be provided or made available, upon request, for purposes of inspecting, monitoring, auditing, or evaluating by the department and any authorized agency of the State of Texas.

                 (e) An OCP shall carry out the fiscal, business, legal, and tax responsibilities required and appropriate for an entity of the size and structure as the OCP.

                 (f) An OCP’s work with the department must not conflict with the department’s mission and goals.

                 (g) An OCP must be authorized to conduct business in the State of Texas and must be in good standing with the State of Texas.

                 (h) Any fundraising or programs undertaken by the OCP for the benefit of the department must be approved in advance in writing by the department.

                 (i) An OCP shall not subcontract or enter an agreement with another person or entity to carry out the OCP’s functions as an OCP, except as agreed in writing by the department.

                 (j) The OCP shall submit funds generated on behalf of or for the benefit of the department as soon as possible and in a manner as determined by the department. During the time such funds are being held by the OCP, the OCP shall manage and account for such funds in accordance with applicable accounting standards.

                 (k) All projects undertaken for the department by an OCP-L must be related to and supportive of the department project, program or site for which the OCP-L is designated.

                 (l) Nothing in this subchapter shall limit the ability of an OCP to make an unrestricted donation of cash, goods, or services to the department, so long as the donation is accepted by the department in accordance with applicable law and department policy. Such a donation may be for a specific purpose or program.

         §51.703. Advertising.

                 (a) Department funds shall not be used to advertise a product and/or service of the OCP, except as follows:

                         (1) to provide information about the relationship with the OCP and encourage public participation in OCP-sponsored activities or events in support of the department’s mission;

                         (2) to provide information about the availability of products and/or services of an OCP that have been created and/or are being made available pursuant to an agreement with the department to support department programs, projects or sites; and

                         (3) to offset fulfillment costs or opportunity costs incurred by the department to provide advertising to the OCP in department publications, web sites, at department sites and other department vehicles and outlets.

                 (b) The OCP shall not use department brands, except as authorized by written agreement with the department.

                 (c) The department may provide to an OCP opportunities to run advertising in department publications, web sites, other media vehicles, and/or at department sites so long as such advertising:

                         (1) has been approved in writing in advance by the department’s executive director or designee;

                         (2) is in the best interest of the department and does not conflict with the department’s mission and goals;

                         (3) if on a department site, preserves the natural and scenic integrity of the site and minimizes distractions that may interfere with the enjoyment of the site by visitors; and

                         (4) is not more prominent than and does not overshadow the role of the department.

                 (d) The designation of an OCP as the exclusive OCP for a specific business category shall not limit the department’s ability to accept advertising from potential competitors of the OCP in department publications, web sites and other media, including but not limited to the Texas Parks and Wildlife Magazine.

                 (e) The department will not accept any advertisement that does not comply with the requirements of Parks and Wildlife Code, §11.0172 and §11.0173, and §51.72 of this title, relating to Youth-appropriate Advertising.

         §51.704. Licensing of the Department Brands.

                 (a) The department may license the use of one or more department brands:

                         (1) as a benefit to an OCP-D; or

                         (2) as a means to generate revenue for the department.

                 (b) The department will not license a use of department brands that conflicts with the department’s mission and the goals.

                 (c) The department shall use a competitive process to award the licensing rights for one or more department’s brands.

                 (d) Any licensing or use of the department brands shall be subject to the terms, conditions, restrictions and time frame(s) specified in writing by the department.

                 (e) Nothing in this section shall be construed to prohibit the department from authorizing the use of one or more department brands to recognize a person or entity that joins with and/or provides support to the department, including but not limited to an OCP-L, or a sponsor or supporter of a department program, project or site.

                 (f) Unless otherwise authorized by this subchapter, private use of department brands is not permitted without a prior written agreement with the department.

                 (g) The department may deny the use of department brands when such use is not in the best interest of the department.

         This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency’s authority to adopt.

         Issued in Austin, Texas, on


Commission Agenda Item No. 10
Exhibit B

RULES REQUIRED OR AUTHORIZED BY LEGISLATION
HOUSE BILL 1300 – OUTSOURCING OF STATE PARK PASS SALES
PROPOSAL PREAMBLE

1. Introduction.

         The Texas Parks and Wildlife Department proposes new §59.5, concerning Outsourcing the Sale of State Park Passes. The proposed new rule is necessary to comply with the provisions of House Bill 1300, enacted by the 82nd Texas Legislature, Regular Session (2011). House Bill 1300 (HB 1300) amended Parks and Wildlife Code, Chapter 13 by adding new §13.0151, which authorizes the department to contract with any entity the department considers appropriate to sell state park passes in any of the entity’s retail locations and delegates rulemaking authority to the Parks and Wildlife Commission (commission) for that purpose.

         Under the provisions of Parks and Wildlife Code, §21.111, the department may charge and collect an entrance fee to state park sites. Under Parks and Wildlife Code, §11.027, the commission by rule may establish and provide for the collection of a fee for entering, reserving, or using a facility or property owned or managed by the department. Pursuant to this authority, the department currently sells state parks passes.

         Proposed new §59.5(a) would define “state park pass” as a “pass that allows entry to a state park, state natural area, or state historic site under the jurisdiction of the department.” The definition is necessary to provide a specific meaning for the term.

         Proposed new §59.5(b) would stipulate that the department, at its discretion and following the completion of feasibility and cost-benefit analyses, may outsource the sale of state park passes to commercial entities. The proposed new provision is necessary to allow for the selection of third-party entities only following careful study of the benefits to the department of outsourcing the sale of state park passes.

         Proposed new §59.5(c) would stipulate that prior to outsourcing the sale of state parks passes, the department will determine the form and manner in which awarded commercial entities may issue state park passes. The proposed new provision is necessary to ensure that state park passes being sold by a third-party entity meet department standards.

2. Fiscal Note.

         Mr. Mike Crevier, Director of State Parks Business Management, has determined that for each of the first five years that the rule as proposed is in effect, the fiscal implications to state government as a result of enforcing or administering the rule, if any, will be positive. The intent of HB 1300 is to provide the department with additional methods to increase revenue. Any agreement between the department and a third-party entity to sell state park passes will be contingent on a positive fiscal impact on the agency; however, that impact will be determined by the feasibility and cost-benefit analyses required by the rule.

         There will be no fiscal implications for other units of state or local government as a result of enforcing or administering the rule.

3. Public Benefit/Cost Note.

         Mr. Crevier also has determined that for each of the first five years the rule as proposed is in effect:

         (A) The public benefit anticipated as a result of enforcing or administering the rule as proposed will be the increased availability of state park passes for purchase by the public.

         (B) Under the provisions of Government Code, Chapter 2006, a state agency must prepare an economic impact statement and a regulatory flexibility analysis for a rule that may have an adverse economic affect on small businesses and micro-businesses. As required by Government Code, §2006.002(g), the Office of the Attorney General has prepared guidelines to assist state agencies in determining a proposed rule’s potential adverse economic impact on small businesses. Those guidelines state that an agency need only consider a proposed rule’s “direct adverse economic impacts” to small businesses and micro-businesses to determine if any further analysis is required. For that purpose, commission considers “direct economic impact” to mean a requirement that would directly impose recordkeeping or reporting requirements; impose taxes or fees; result in lost sales or profits; adversely affect market competition; or require the purchase or modification of equipment or services.

         The department has determined that there will be no adverse economic effects on small businesses, microbusinesses, or persons required to comply with the amendments as proposed. Accordingly, the department has not prepared a regulatory flexibility analysis under Government Code, Chapter 2006.

         (C) The department has not drafted a local employment impact statement under the Administrative Procedures Act, §2001.022, as the agency has determined that the rule as proposed will not impact local economies.

         (D) The department has determined that Government Code, §2001.0225 (Regulatory Analysis of Major Environmental Rules), does not apply to the proposed rule.

         (E) The department has determined that there will not be a taking of private real property, as defined by Government Code, Chapter 2007, as a result of the proposed rule.

4. Request for Public Comment.

         Comments on the proposed rule may be submitted to Ms. Darcy Bontempo, Texas Parks and Wildlife Department 4200 Smith School Road, Austin, Texas, 78744; (512) 389-4574 (e-mail: darcy.bontempo@tpwd.state.tx.us).

5. Statutory Authority.

         The new rule is proposed under the authority of Parks and Wildlife Code, §13.051, as added by House Bill 1300, enacted by the 82nd Texas Legislature, Regular Session (2011), which authorizes the commission to adopt rules to implement that section..

         The proposed new rule affects Parks and Wildlife Code, Chapter 13.

         §59.5.  Outsourcing the Sale of State Park Passes.

                 (a) As used in this section, a “state park pass” is pass that allows entry to a state park, state natural area, or state historic site under the jurisdiction of the department.

                 (b) At the discretion of the department, following the completion of feasibility and cost-benefit analyses, the department may outsource the sale of state park passes to commercial entities.

                 (c) Prior to outsourcing the sale of state parks passes, the department will determine the form and manner in which awarded commercial entities may issue state park passes.

         This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency’s authority to adopt.

         Issued in Austin, Texas, on


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