The US Forest Service has issued a notice of its intent to make changes to most of its special use authorization forms, including permits for campgrounds, resorts, marinas, recreational residences and ski areas. The changes impact the permittee’s rights to its own or the public’s access to permit areas, the scope of its risk of loss to its structures and the compensation received if the agency effectively terminates the operations before the permit expires. The proposed changes are clearly not intended to enhance any rights held by permittees. Because of the critical importance of these issues to any operation, understanding the potential impacts of these proposed clauses is necessary for assessing the risks of operating pursuant to a Forest Service permit, the value of any agency permit as well as the level of investment supported by that permit and should be part of any due diligence effort related to acquiring such permits.
Proposed revisions to the warranty of access, site suitability or services
The Forest Service is proposing to include a clause in every recreational special use authorization which limits the agency’s responsibility in the event the permittee or public cannot access the permit site or the site itself becomes unsuitable for the permit operations. While the agency’s existing responsibility to ensure access, site suitability and services is already limited, the proposed clause would likely further reduce that responsibility, even for situations where the impacts on permit operations were directly caused by the government. The result could be that, in such events, the permittee has no recourse against the agency for detrimental impacts on its operations caused by the government.
Proposed revisions to risk of loss
The Forest Service is also proposing to revise its standard Risk of Loss clause which is included in all recreational permits. The proposed changes would further enhance the government’s rights and protections under the existing clause but do not dramatically change the impact of the existing clause.
Proposed revisions to compensation under Term Permits
The Forest Service is also proposing to revise its standard compensation clause which is included in all Term Permits. The clause provides certain assurances as to a permit holder being compensated for the value of its structures if the agency terminates the permit operations for reasons in the public interest. The proposed revisions would have a detrimental impact on a permittee’s right to be compensated if the agency effectively terminates its operations in the public interest even though it makes no formal land planning decision to do so. The proposed revisions could also have a detrimental impact on the value a permittee would be paid for its improvements by allowing that value to be reduced for any type of depreciation. This latter proposed change will likely have the largest impact on permittees who own older or historic facilities that are not being regularly updated or modernized.
If The Garden Law Firm can be of assistance to you in assessing the impacts of these clauses to your future operations and assisting you in preparing comments to the agency in an effort to protect your rights, please contact us.
Comments are due by November 16, 2020.