§101915 Protection of concessioner investment

Summary

If a business builds a permanent structure, fixture, or nonremovable equipment on United States land under a concession contract, the business gets a “leasehold surrender interest.” That means the business has a right to be paid for that improvement — not ownership. The payment right can be used as loan security if the Secretary approves. The right moves with the contract if it is sold, can be waived, and does not disappear when the contract ends. The government cannot take the improvement without paying fair compensation. The value is normally the original construction cost, adjusted by the percent change in the Consumer Price Index from the date of the investment to the payment date, minus depreciation based on how the item compares to a new one. For new contracts with an expected leasehold surrender interest over $10,000,000, the Secretary may instead use a straight-line annual reduction based on tax rules in effect on November 12, 1998, or another formula after public notice and review; if no bids come in under the alternative method, the ordinary CPI-based method must be used. Costs of additions are added to the current value. Concession contracts made before November 13, 1998, that gave a possessory interest are paid as the old contract or laws as of November 12, 1998 say. If a new contract replaces an old one after November 13, 1998, the leasehold surrender interest continues and the starting value equals the possessory interest value at the old contract’s end; disputes go to binding arbitration. A new concessioner who pays a prior concessioner for their interest gets the same leasehold surrender interest and initial value equal to what was paid. Parties may seek de novo review in the United States Court of Federal Claims within 180 days of certain value decisions. Title to all such improvements stays with the United States.