BLM Publishes Final Rule Governing Rights-of-Way Public and Federal Lands

On April 22, the U.S. Department of the Interior’s Bureau of Land Management (BLM) published new regulations governing rights-of-way issued under both the Federal Land Policy and Management Act (FLPMA) and the Mineral Leasing Act (MLA). This final rule revises BLM cost recovery policies for both processing and monitoring of right-of-way grants; revises procedures for issuing right-of-way grants; and significantly increases fees that had been unchanged since August 1987. 

Overview

Each year, BLM processes thousands of applications to use or occupy public lands for highways and roads, pipelines, transmission lines, communications sites, trails, telephone lines, canals, flumes, and reservoirs on United States-owned land — known as “public lands” and federal lands. At present, BLM administers 89,000 right-of-way authorizations (62,000 under FLPMA and 27,000 under the MLA). In 2004, BLM processed 13,500 applications, including 3,700 new or amended requests and 9,800 assignments or renewals.

Among other changes, the new BLM regulations at 43 C.F.R. Part 2800 (FLPMA grants) and Part 2880 (MLA grants): (1) increase BLM cost recovery fees from applicants; (2) adjust fees each year by an inflation index; (3) establish separate cost recovery rules for processing and monitoring; (4) change the terms and conditions of BLM right-of-way grants, including temporary use permits; (5) change the terms of rents and institute late charges; (6) apply cost recovery rules to other federal agencies (with an exemption for Rural Utility Service financed projects); (7) change rules for administration and operation of grants; (8) change trespass penalties; (9) allow BLM to issue easements; (10) increase the strict liability cap for grant holders from $1 million to $2 million; (11) allow BLM to require bonds from state, local, and tribal governments; and (12) establish a new, BLM-wide Customer Service Standard for processing applications defining time periods and requiring notice of delays. For the first time, the new regulations authorize BLM and applicants to negotiate a “Master Agreement” to govern fees and cost recovery required to process multiple uses within a defined geographic area.

Fees and Cost Recovery Policies

Under its previous regulations, BLM used 11 different cost recovery categories (five for FLPMA applications and six for MLA applications), and processing fees were based on the number of field trips by federal personnel and the amount of data generated. Under the new regulations, there are six cost recovery categories for FLPMA and MLA applications, which range from applications that will take between one and eight hours to process to those which will take more than 50 hours to process. The fees for Categories I through IV are set by schedule. Fees for the other two categories will be negotiated between the applicant and BLM. Processing fees will be based on the number of BLM work hours required, including resources specialists’ time, staff coordination, administrative support, National Environmental Policy Act and Endangered Species Act compliance and documentation time, and overhead costs. The net effect will be substantially higher BLM costs to process all applications.

In return, BLM offers performance standards for “customer service” and the requirement to negotiate fees for Master Agreements and for major “Category VI” applications. BLM’s new Customer Service Standard requires field staff to process minor category applications within 60 days of receiving a completed application. If the application cannot be processed within 60 days, then by the 30th day, the applicant must be notified of: (1) the reason for delay; and (2) when BLM will make its decision. For major applications, BLM must inform the applicant of an estimated processing time within 60 days. The clock for this customer service “guarantee” starts after the application is complete and required fees have been paid to BLM.

Fees for monitoring right-of-way grants are separate from processing fees under the new regulations. These fees also are based on all BLM work hours required after environmental analysis is complete, including inspecting construction, operation, maintenance, and termination of permanent or temporary facilities, and protection and rehabilitation of the right-of-way. For the first time, the new regulations require a Federal Energy Regulatory Commission applicant to reimburse BLM for all BLM costs involved in processing their FERC application. In addition, processing and monitoring fees for Categories I through IV will be adjusted annually upward or downward, based on the Cumulative Implicit Price Deflator-Gross Domestic Product (IPD-GDP).

Grant Issuance Procedures

Under the previous regulations, bond amounts were fixed through the terms of the grant. Under the new regulations, BLM may increase or decrease bond amounts at any time during the term of a grant. Also, BLM will require bonds for hazardous materials, pollutants, or containment under Superfund (CERCLA); any substance contained in or released from underground storage tanks under the Resource Conservation and Recovery Act (RCRA); oil as defined by the Clean Water Act; and other substances that federal, state, local, or tribal laws regulate as hazardous.

Under the previous regulations, BLM charged rents based on the day the grant was issued and did not assess any late fees. Under the new regulations, BLM will charge rents beginning the first day of the month in which the grant is effective through the last day of the month when the grant terminates; will assess late fees and administrative charges for late payments; and may terminate grants that are 90 days or more in arrears. For the first time, BLM will accept one-time rental payments for grants, including so-called perpetual grants. The rent schedules in the new regulations are the same as BLM has used for linear systems (since 1987) and for communications sites (since 1995). The schedules, which are based on market data, are used instead of individual appraisals.