[Congressional Record Volume 142, Number 58 (Wednesday, May 1, 1996)]
[Extensions of Remarks]
[Pages E692-E693]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               STRICT LIABILITY/RIGHTS OF WAY LEGISLATION

                                 ______


                            HON. WES COOLEY

                               of oregon

                    in the house of representatives

                         Wednesday, May 1, 1996

  Mr. COOLEY of Oregon. Mr. Speaker, today I am introducing the Rural 
Right-of-Way Fairness Act to make small but necessary adjustments to 
the way the Government manages right-of-ways [ROW] over Federal land. 
The provisions of the bill address situations involving right-of-way 
fees and liability standards affecting rural electric cooperatives and 
other ROW lessees.
  These situations constitute examples of all too typical insensitivity 
on the part of Federal land regulators--particularly felt in the 
Western States where high percentages of Federal land ownership require 
rural citizens to depend on land management agencies to operate as good 
neighbors. Unfortunately, it appears that with regard to the management 
of right-of-ways for the transmission and distribution wires needed to 
bring electricity to the rural West, the Forest Service and the Bureau 
of Land Management have chosen, in some instances, to make life rough 
for the private citizens who live next door.
  The first section of the bill deals with strict liability standards 
included in the contracts between the Forest Service and the Bureau of 
Land Management and ROW lessees. The provisions of those contracts set 
out the responsibility of each party for things that may go wrong on a 
Federal right-of-way.
  Unfortunately, from time to time, things do go wrong. It would seem 
to make common sense that the responsibility for picking up the pieces 
in those instances should lie with those shown to be at fault. However, 
common sense seems to play little part in the calculation. In fact, as 
a matter of being able to qualify for use of a Federal right-of-way, 
rural electric cooperatives and other lessees are currently forced to 
take responsibility for anything that may happen on those right-of-ways 
whether they were at fault or not.
  The 1976 Federal Land Policy and Management Act provided the Federal 
agencies with the authority to impose strict liability for costs 
associated with hazards on Federal lands. Prior to 1976, agencies 
recovered costs associated with hazards, such as costs required to put 
out a fire, through normal negligence. The agencies use crossing 
permits, which are a grant of right-of-way for a certain period of 
time, as the method for imposing strict liability.
  Strict liability means that costs associated with a hazard are 
recovered from the holder of the rights-of-way without regard to who is 
responsible for the hazard or whether or not any negligence was 
involved. Normal negligence requires that costs associated with a 
hazard are recovered from whomever is responsible for that hazard.

  Mr. Speaker, let me illustrate how this works on the ground by 
telling a story involving Midstate Electric Cooperative located in 
LaPine, OR. As a matter of prudent maintenance practice, Midstate 
Electric trims or removes trees on right-of-ways that pose a risk of 
falling onto electric lines. On Federal ROW's, the cooperative consults 
with the appropriate land management agency--who has ultimate authority 
to approve such actions.
  After having proposed the removal of a number of trees on a Forest 
Service ROW in 1984, Midstate was told by the agency that it could cut 
some down, but had to leave other specified trees standing. Of course 
the predictable happened--one of the trees that Midstate had proposed 
cutting, which the Forest Service had refused to allow removed, fell 
into a power line and started a fire. It cost over $350,000 to put that 
fire out--a bill that was eventually forwarded to Midstate Electric. 
Knowing that the fire resulted from a management decision of the Forest 
Service, Midstate was forced to initiate court action to attempt to 
appropriately assign the financial liability of fighting the fire. It 
lost that action because of a ruling which interpreted ROW contracts as 
holding the co-op--and other ROW lessees--to a ``strict'' liability 
standard.
  The legislation that I am introducing today removes that strict 
liability standard for a more commonsense one--returning to a normal 
negligence standard that is routinely used in private ROW contracts. In 
essence, the new standard will say: if you caused it, you are 
responsible for it. By enforcing any standard more rigid than that, the 
Federal Government is purposefully transferring costs to private 
citizens. The minimum impact of the current strict liability policy is 
higher electric rates for those rural communities unfortunate enough to 
live adjacent to public lands. The possibility exists, however, of even 
more punitive impacts in the form of the loss of insurance coverage for 
entities with Federal right-of-way liability.
  Utilities, telecommunications providers, and others in the West find 
it impossible to avoid Federal lands in providing area coverage. In 
some cases, the Federal agencies are the users of the services that 
require crossing permits across Federal lands.
  No other landowner in the United States has the power to impose 
strict liability for hazard costs for grants of rights-of-ways. The 
Federal Government can do it because it owns so much land in the West 
and has the power to pass laws and regulations. Normal negligence is 
seen as adequate protection for landowners and for holders of non-
Federal rights-of-way in the United States. The Federal Government 
should live by that same standard.
  The second section of my bill deals with ROW fees for rural electric 
and telephone cooperatives. In 1984, Congress passed and President 
Reagan signed PL 98-300, an act clarifying that rural electric and 
telephone utilities were to be exempted from Federal ROW fees. The 
legislation was put forward out of frustration that the Forest Service 
and BLM were not using existing authority granted to

[[Page E693]]

them in 504(g) of Federal Land Protection and Management Act [FLPMA] to 
reduce or waive right-of-way fees for nonprofit organizations found to 
operate in the public's interest.
  This congressional fix has not proved entirely successful. 
Unfortunately, as in the case with the strict liability issue, the 
example is a utility located in my district.
  Oregon Trail Electric Cooperative [OTEC] of Baker City, OR, has the 
distinction of being the newest formed rural electric cooperative in 
the United States. It was created by private citizens who formed a 
cooperative to buy out the facilities of an investor-owned utility 
which had found that serving rugged, rural territory is not a 
profitable venture. The buyout served to ensure continued electric 
service for the citizens of that part of Oregon and, significantly, was 
achieved without relying on government financing.
  It is this last fact that is at the root of the issue. Instead of 
being rewarded for avoiding the use of government financing, the Forest 
Service has sought to penalize OTEC. The vehicle they are using is the 
language included in PL 98-300 which describes fee exempted 
cooperatives as ``financed pursuant to The Rural Electrification Act of 
1936.'' What had been a convenient way to describe cooperatives in 
1984--because 100 percent were REA-financed--no longer holds true. 
Despite the obvious congressional intent in PL 98-300 of exempting all 
cooperatives; despite the numerous attempts to get the agency to 
utilize other administrative authorities; the Forest Service is now 
charging OTEC full ROW fees. Ironically, one of the ROW's is used to 
serve a Forest Service Office.
  As an example of the attempts to reason with the Forest Service, I 
ask unanimous consent that a letter to the Forest Service from the 
Pacific Northwest Generating Cooperative on OTEC's behalf be inserted 
in the Record after my statement.
  The language of my bill is simple and straightforward. It would 
change FLPMA to exempt from ROW fees those electric and telephone 
utilities that are eligible for rural utility service financing rather 
than those utilizing it. In this era of budget consciousness, the last 
thing we need is to continue a monetary incentive to perpetuate 
reliance on government funding. We should be congratulating the OTEC's 
of the world rather than burdening them with ROW fees that other, 
government-financed, co-ops are exempted from.
  Mr. Speaker, as you can see, my bill attempts to correct yet two more 
examples of the Federal bureaucracy run amok. I believe that the Forest 
Service and BLM already have the administrative authority to solve the 
problems that I have identified. Unfortunately, they have refused to do 
so. Rural citizens who want nothing more than to have access to 
reasonably priced electric and telephone service have to appeal to the 
jurisdiction of last resort--Congress.
  It is my hope that the Resources Committee will take up this 
legislation, whether as a free-standing measure or as an amendment to 
another bill. As public servants who understand the challenges of 
country life and the importance of keeping the lights on in areas that 
are rural, small, and distant, I trust that the members of the 
committee will ensure that a measure of common sense prevails with 
regard to Federal right-of-way policies.
                                                 Pacific Northwest


                                       Generating Cooperative,

                                      Portland, OR, July 20, 1994.
     Mr. Jim Galaba,
     U.S. Forest Service, Pacific Northwest Region, Portland, OR.
       Dear Jim: Thank you for taking the time to meet with me 
     during my recent trip to Portland. As I mentioned last week, 
     both the Pacific Northwest Generating Cooperative (PNGC) and 
     Oregon Trail Electric Cooperative (OTEC) are very interested 
     in revisiting the issue of whether Forest Service right-of-
     way fees should be waived for OTEC electric transmission 
     lines.
       I appreciated your willingness to run through the Forest 
     Service regulations in an effort to help me understand 
     earlier Forest Service decisions to charge OTEC right-of-way 
     fees and to help explore areas of possible compromise. Per 
     your request, I have attached several documents detailing the 
     Congressional history surrounding the enactment of P.L. 98-
     300--the Federal Lands Policy and Management Act (FLPMA) 
     amendment requiring that ROW fees be waived for rural 
     electric and telephone systems financed by the Rural 
     Electrification Administration (REA).


                          Legislative History

       As you can see from the enclosed Senate Energy Committee 
     report, at the time of the bill's consideration, both the 
     Forest Service and the Bureau of Land Management (BLM) 
     opposed the legislation because of their feeling that ``there 
     is no equitable basis for granting rural electric or 
     telephone cooperatives free access and use of the public 
     lands, especially when regulated private utilities and their 
     customers are treated differently.'' At issue was the BLM and 
     Forest Service's failure to waive right-of-way fees for 
     cooperatives under the existing FLPMA section 504 (g).
       The prevailing concern articulated by the agencies was that 
     cooperatives engage in ``practices comparable to private 
     commercial enterprise.'' It is interesting to note that this 
     is the same basis upon which OTEC's request of a fee waiver 
     has been so far denied. In enacting P.L. 98-300, Congress 
     explicitly rejected the agencies' reasoning in favor of 
     holding down the cost of electric and telephone service to 
     rural consumers. It is also interesting to note that Senator 
     Hatfield, who supports a fee waiver for OTEC, was a member of 
     the Senate Energy Committee at the time of its consideration 
     of the waiver legislation.
       While the legislative history does make a number of 
     references specifically to entities funded through the REA, 
     the enclosed floor statements from Senator Baucus and 
     Congressmen Lujan, Oberstar, and Boucher make clear that 
     Congress's prime concern was supporting rural electric and 
     telephone consumers that receive service from member-owned 
     cooperatives. Mr. Oberstar's statement includes the sentence: 
     ``It makes little sense for a Federal agency to impose new 
     charges on these companies, most of whom borrow from REA to 
     build and improve their systems.'' Mr. Boucher refers to 
     Congressional intent, in passing FLPMA, to ``exempt or reduce 
     fees for nonprofit utilities.''
       As I mentioned during our visit, we believe that Congress, 
     in enacting P.L. 98-300, sought to clarify their intention 
     that the Forest Service and the BLM waive right-of-way fees 
     for rural electric cooperatives--regardless of their 
     financing. The goal, as evidenced by the testimony, was to 
     help keep electric and telephone costs down for rural 
     consumers. This is precisely the reason REA exists in the 
     first place. It is contradictory to charge fees to the types 
     of non-profit associations that are so worthy in the eyes of 
     Congress as to spawn a subsidized loan program. It is 
     important to remember that OTEC remains eligible for REA 
     financing because it is helping to fulfill the REA's mandate 
     of rural electrification.
       A further irony is that OTEC does not now have any REA 
     loans in an effort to keep their costs as low as possible to 
     their members--the exact goal in mind when Congress passed 
     the amendment. OTEC should not be penalized for pursuing that 
     end.


                   Existing Administrative Discretion

       P.L. 98-300 was clearly an attempt to clarify whether rural 
     electric cooperatives provided a public benefit sufficient to 
     warrant a waiver of their right-of-way fees. The legislation 
     originated out of frustration that the agencies were not 
     properly utilizing administrative discretion already enacted 
     by Congress in FLPMA. The Senate report states that ``both 
     FLPMA and the regulations contain a provision which 
     explicitly grants discretionary authority to the relevant 
     Secretary (Agriculture or Interior) to issue rights of way to 
     nonprofit organizations for such lesser (or zero) charge as 
     the Secretary finds equitable and in the public interest.''
       Even if the Forest Service continues to deny OTEC a fee 
     waiver under P.L. 98-300 based on a strict reading of the 
     statute rather than its intent, it is clear the Congress 
     believes that the agencies have broader administrative 
     discretion to grant the waiver under existing FLPMA section 
     504(g). Accordingly, we would be active in urging the Forest 
     Service to exercise that discretion in favor of a fee waiver. 
     Oregon Trail is a non-profit association that provides 
     substantial benefit both to the public and (because they 
     serve the Forest Service) the programs of the Secretary. 
     However, we believe a more immediate decision favorable to 
     OTEC is warranted given that the legislative intent of P.L. 
     98-300 was to provide a fee waver to all rural electric 
     cooperatives.


                           Scope of Decision

       As I mentioned during our meeting, the impact of granting 
     OTEC a waiver, does not set a large precedent. Nationwide, 
     out of roughly 1,000 existing rural electric cooperatives, 
     only approximately 32 do not have REA financing. Of these, 
     the majority are located in the Midwest and South. Only a 
     handful are located in public land states and fewer still 
     have service territory comprised of large amounts of 
     Federally owned acreage. While the amount of money at stake 
     is minuscule in terms of any impact on the Federal Treasury, 
     it is important to the customers of Oregon Trail.
       Again, thank you for taking the time to visit with me. Your 
     willingness to review OTEC's waiver request and to explore a 
     solution to this problem is very much appreciated. If I can 
     provide additional information or be helpful in any other 
     way, please feel free to contact me at either 202/857-4876 or 
     503/288-1234.
           Sincerely,
                                                R. Patrick Reiten.
     Director of Government Relations.

                          ____________________