Commission Agenda Item No. 10
Presenter:  Darcy Bontempo

Action
Rules Regarding Official Corporate Partners and Licensing Department Brands
Recommended Adoption of Proposed Changes
November 8, 2012

I.       Executive Summary:  TPWD staff is seeking adoption of amendments to the rules regarding Official Corporate Partners and licensing department brands.

II.      Discussion:  House Bill 1300 (HB 1300), enacted by the 82nd Texas Legislature, addressed the use of private contributions, partnerships, licensing and commercial advertising to provide additional funding for TPWD programs, projects, and sites.  In January, the commission approved adoption of 31 TAC §§51.700-51.704 to implement HB 1300.  The rules went into effect in May 2012.  On July 24, 2012, in accordance with the rules, TPWD issued a Request for Proposals (RFP) to solicit proposals from commercial entities seeking to be designated as department-wide official corporate partners (OCP-Ds).  In spite of the department’s best efforts, including emailing the RFP to more than 3,000 companies and securing statewide media coverage, the department received only a few inquiries and no proposals in response to the RFP.

TPWD continues to receive inquiries from commercial entities wishing to engage in joint promotions or other arrangements to provide financial support to TPWD, including support through licensing TPWD brands or designation as an official corporate sponsor.  To enable TPWD to take full advantage of potential opportunities, the proposed amendments will allow TPWD’s executive director or designee to waive the competitive process requirement for the designation of an OCP-D and for the licensing of TPWD brands when such waiver is determined to be in the best interest of the department.

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

“The Texas Parks and Wildlife Commission adopts amendments to §§51.701, 51.704, as published in the October 5, 2012, issue of the Texas Register (37 Tex. Reg. 7950-7951), with changes as necessary to the proposed text.”

Attachments – 1

  1. Exhibit A — Proposed Rule Amendments

Commission Agenda Item No. 10
Exhibit A

OFFICIAL CORPORATE PARTNERS RULE AMENDMENT

PROPOSAL PREAMBLE

1. Introduction.

         The Texas Parks and Wildlife Department proposes amendments to §51.701 and §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.

         Earlier this year, the commission adopted 31 TAC §§51.700-51.704 to implement HB 1300. The rules went into effect in May 2012. On July 24, 2012, in accordance with the rules, the department issued a Request for Proposals (RFP) to solicit proposals from commercial entities seeking to be designated as department-wide official corporate partners (OCP-Ds). The department notified more than 3,000 companies and publicized the issuance of the RFP through a press release and a number of interviews with various media outlets. The deadline for response to the RFP was August 30, 2012. In spite of the department’s efforts to generate interest, the department received no proposals in response to the RFP.

         However, the department continues to receive inquiries from commercial entities wishing to engage in joint promotions or other arrangements to provide much needed financial support to the department. Such support may involve the licensing of department brands or designation as an official corporate sponsor. Current §51.701 requires that the OCP-D designation be awarded through a competitive process. Similarly, current §51.704 requires that the opportunity to license department brands be awarded through a competitive process. To enable the department to take full advantage of potential opportunities, the department proposes to amend §51.701 and §51.704 to allow the department’s executive director or designee to waive the competitive process requirement for the designation of an OCP-D and for the licensing of department brands when such waiver is determined to be in the best interest of the department.

         The proposed amendment to §51.701(a) would provide that “except as otherwise provided” in the rules, OCP-Ds will be selected through a fair and competitive process. The proposed amendment goes on to authorize the department’s executive director to waive the competitive process requirement for designation of an OCP-D if such a waiver is determined to be in the best interest of the department. Although the department continues to believe that the OCP-D designation should be reserved for companies offering a significant financial benefit to the department, the recent lack of responses to the department’s RFP suggests that a means other than a competitive RFP process may be a more appropriate means of selecting an OCP-D in some circumstances.

         The proposed amendment to §51.704(c) would provide that “except as otherwise provided” in the rules, the department will use a competitive process to award the licensing rights for one or more department’s brands. In addition, the proposed amendment authorizes the department’s executive director to waive the competitive process requirement for awarding licensing rights. Although the use of a competitive process may continue to be an appropriate mechanism for awarding the right to license department brands in some circumstances, the amendment would provide additional flexibility when the award of licensing rights would be in the department’s best interest.

2. Fiscal Note.

         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 rules 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 amendments 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 amendments affect Parks and Wildlife Code, Chapter 11.

6. Text.

         §51.701. Designation of OCPs.

                 (a) Except as otherwise provided herein, [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. Provided, however, the department’s executive director, or designee may waive competitive process requirement if such a waiver is in the best interest of the department.

                 (b) – (n) (No change.)

         §51.704. Licensing of the Department Brands.

                 (a)-(b) (No change.)

                 (c) Except as otherwise provided herein, the [The] department shall use a competitive process to award the licensing rights for one or more department’s brands. Provided, however, the department’s executive director, or designee may waive competitive process requirement if such a waiver is in the best interest of the department.

                 (d) – (g) (No change.)

         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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