Tim has it absolutely correct. What's legal or not is determined by an act of Congress rather than by local resource managers. The authority of an executive agency (e.g., the NPS) to issue rules is limited to that delegated by Congress; in this case, Congress have significantly restricted the authority to require permits for still photography on public lands. The proposed rule is the attempt by the BLM, FWS, and NPS to implement Public Law 106-206, and as Tim mentions, any rule must comply with that law. Because the intent, per se, to sell photographs is irrelevant under that law, so must it be in the rule.
A brief bit of additional history. Historically, fees for filming in National Parks were limited to cost recovery. Public Law 106-206 was the culmination of efforts in the late 1990s to eliminate this limitation and allow the NPS to charge location fees, in attempt to provide additional revenue for the Park Service. Eventually, the legislation was expanded to cover all lands under the jurisdiction of the Secretary of Agriculture (e.g., Forest Service) and the Secretary of the Interior (e.g., BLM, FWS, and NPS). As usual, still photography got swept into the scheme as an afterthought, and as originally written, the legislation would have required a permit for any photography that was intended for sale. As a result of efforts by ASMP and NANPA, the current provisions for still photography were added; the intent was to incorporate the NPS policy governed by 36 CFR 5.5(b) (which is the primary source of the definition I suggest for commercial photography).
In retrospect, the wording of Public Law 106-206 is not as precise as it might have been; in particular, the meaning of "models" and "props" may be open to varying interpretations, especially because the law does not appear to require a permit for photography of "articles of commerce" (e.g., vehicles) for commercial advertising. It was not the intent of the legislation to eliminate these requirements, and common sense suggests that no federal agency would allow such photography without a permit. The terms model and prop are sufficiently ambiguous that so far, two agencies (the FS and the BLM) have felt it necessary to include definitions in directives to agency personnel; links to these definitions are included in my article under the entries for the BLM and the FS. There are two significant problems with such definitions: as parts of internal agency directives, they don't have the force of law as does an administrative rule; perhaps more important, the definitions are uncommon ones that did not exist until three years after Public Law 106-206 was enacted, so it is difficult to argue that they represent the legislative intent. Yet the law would seem almost impossible to enforce without them.
A glance at the definitions shows that both agencies tie them to commercial advertising. With that constraint, the combination of those definitions and the wording of the proposed rule works to essentially to the same effect as the definition I suggest for commercial photography; the difference is that putting it into one definition is far more clear and concise. Again, my definition is simply derivative of the rule that has long proven workable in National Parks (even if a few folks aren't up to speed on it). I'm really suggesting no more than that we ensure that the workable status quo continues.
Ostensibly, I'm suggesting a few words that don't appear in the governing statutory law, but without the clarifying definitions, the law may not be enforceable. In light of the only definitions proposed this far, I really see no conflict between that law and my definition. Is it better to say up front when permits actually will be required or play games with definitions?
I agree with Scott that it's impossible to have a rule that covers all bases. As Tim suggests, the definition of commercial photography that I suggest certainly isn't perfect; however, I think it has far fewer loopholes than the current wording of the proposed rule.
In retrospect, I would slightly revise the suggested definition, to the effect of,
Commercial photography means the recording of a still image on film, electronic, magnetic, or similar media for the purpose of commercial advertising and using articles of commerce, models, or props or sets that are not a part of the location's natural or cultural resources or administrative facilities.
It's a bit less concise, but it's more deferential to the language of Public Law 106-206 and the proposed rule. To me, it seems essentially the same in effect.
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