[Federal Register Volume 70, Number 77 (Friday, April 22, 2005)]
[Rules and Regulations]
[Pages 20970-21091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7501]



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Part II





Department of the Interior





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Bureau of Land Management



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43 CFR Part 2800, et al.



Rights-of-Way, Principles and Procedures; Rights-of-Way Under the 
Federal Land Policy and Management Act and the Mineral Leasing Act; 
Final Rule

  Federal Register / Vol. 70, No. 77 / Friday, April 22, 2005 / Rules 
and Regulations  

[[Page 20970]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 2800, 2810, 2880, 2920, 9230, and 9260

[WO 350 05 1430 PN]
RIN 1004-AC74


Rights-of-Way, Principles and Procedures; Rights-of-Way Under the 
Federal Land Policy and Management Act and the Mineral Leasing Act

AGENCY: Bureau of Land Management, Interior.

ACTION: Final rule.

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    The Bureau of Land Management (BLM) is amending its 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 (processing and monitoring fee) policies 
and procedures for issuing right-of-way grants and adjusts cost 
recovery fees to take into account cost increases since the previous 
regulations became effective in August 1987. The rule also eliminates 
automatic exemptions from cost recovery fees for Federal agencies, 
except for those agencies and projects exempted by law. It establishes 
policies related to paying rent in advance and adds a financial penalty 
for paying rents late and allows for automatic adjustment to cost 
recovery fees based on an economic indicator. This final rule also 
clarifies how BLM applies the rent schedules for communication site 
rights-of-way and reorganizes the regulations in a manner similar to 
the sequence in which BLM takes action on applications and monitors 
issued grants.

DATES: Effective Date: This final rule is effective June 21, 2005.

FOR FURTHER INFORMATION CONTACT: Bil Weigand at (208) 373-3862, or Ian 
Senio at (202) 452-5049, or write to Director (630), Bureau of Land 
Management, Eastern States Office, 7450 Boston Boulevard, Springfield, 
Virginia 22153, Attention: RIN 1004-AC 74.
    Persons who use a telecommunications device for the deaf may 
contact these persons through the Federal Information Relay Service at 
1-800-877-8339 24 hours a day, seven days a week.

SUPPLEMENTARY INFORMATION:

I. Background
II. Final Rule as Adopted and Response to Comment
III. Procedural Matters

I. Background

    BLM published the proposed rule in the Federal Register on June 15, 
1999 (see 64 FR 32106) for a 120-day comment period ending on October 
13, 1999. As a result of public requests for extensions of the comment 
period, on October 13, 1999, we extended the public comment period for 
30 days ending on November 12, 1999. We received 63 comment letters on 
the proposed rule. We address public comments in the section-by-section 
discussion of this preamble.
    In these regulations we use the terms ``previous regulations'' and 
``final regulations.'' ``Previous regulations'' refers to the 
regulations in effect prior to June 21, 2005. ``Final regulations'' 
means the regulations in this final rule. This final rule will replace 
the regulations in parts 2800 and 2880 of the October 2004 edition of 
Title 43 of the Code of Federal Regulations.

General Information About BLM Right-of-Way Grants Basis and Purpose of 
These Regulations

    Each year, thousands of individuals and companies apply to BLM to 
obtain a right-of-way grant on public lands. A right-of-way grant is an 
authorization to use a specific piece of public land for a certain 
project, such as roads, pipelines, transmission lines, and 
communication sites. The grant authorizes a specific use of the land 
for a specific period of time. The term ``grant'' is defined in the 
definitions sections in both parts of this rule. The definition of 
``grant'' in part 2800 applies to grants authorized by Title V of 
FLPMA, 43 U.S.C. 1761, and the definition in part 2880 applies to 
grants authorized by the MLA at 30 U.S.C. 185. Generally, BLM issues a 
right-of-way grant for a term commensurate with the life of the 
project. Typically, BLM issues grants with 30-year terms, and most can 
be renewed. This final rule covers FLPMA grants for rights-of-way that 
cross public lands and MLA grants for rights-of-way that cross Federal 
lands. We cover general provisions for right-of-way grants in subparts 
2801 and 2881 of this final rule.
    BLM places a high priority on working with applicants on proposed 
rights-of-way to provide for the protection of resource values and to 
process applications timely. Careful advance planning with BLM 
personnel is strongly encouraged. If we know about your plans early, we 
can work with you to tailor your project to avoid many problems and 
costly delays later in the process.
    If you are not familiar with our right-of-way application process 
or local BLM jurisdictions, the best place to start is by contacting a 
BLM State Office listed in our regulations at 43 CFR 1821.10. Please 
note that each state office oversees a number of field offices. 
Depending on your project, you may be working primarily with personnel 
at a BLM field office.
    As a general rule, you need a right-of-way grant whenever you plan 
to build a right-of-way facility on public lands. Some examples of land 
uses which require a right-of-way grant include: transmission lines, 
communication sites, roads, highways, trails, telephone lines, canals, 
flumes, pipelines, and reservoirs.
    You do not need a right-of-way grant for ``casual use'' activities. 
Examples of casual use include driving vehicles over existing roads, 
sampling, surveying, marking routes, collecting data to prepare an 
application for a right-of-way, and performing certain activities that 
ordinarily result in no, or negligible, disturbance of the public lands 
or resources. ``Casual use'' is defined in sections 2801.5 and 2881.5 
and is addressed in sections 2804.29 and 2884.25 of this final rule. We 
encourage you to contact BLM and discuss your planned activity before 
assuming your use is casual. BLM can then make a judgment based on your 
particular activity.

Steps In Applying for a Right-of-Way

    (A) Contact the BLM office having management responsibility for the 
land where you need the right-of-way.
    (B) Arrange a preapplication meeting with the field office manager 
or appropriate staff. During this meeting, participants will jointly 
review the application requirements and Standard Form (SF) 299, 
Application for Transportation and Utility Systems and Facilities on 
Federal Lands, to determine what information BLM needs. If you contact 
us ahead of time to set up the meeting, we can often arrange to hold 
the meeting at the site of your proposed use.
    (C) When you have all the information, bring or mail the 
application, along with the nonrefundable application processing fee, 
to the appropriate BLM office.
    This final rule covers the application process for FLPMA right-of-
way grants in subparts 2803 and 2804, and the application process for 
MLA grants in subparts 2883 and 2884.

Preapplication Meeting

    The preapplication meeting is an important part of the process for 
both

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you and BLM. The meeting provides the opportunity for you to fully 
discuss and describe your proposal in detail and provides an 
opportunity for BLM to fully explain processing requirements. The 
preapplication meeting may also cover fees, safety, work schedules, and 
other items. This meeting has the potential to save both you and BLM 
time and expense. For example, in FLPMA, Congress directed that 
``rights-of-way in common'' (common use of a right-of-way area by 
multiple grant holders) be required, to the extent practical, in order 
to minimize adverse environmental impacts and the proliferation of 
separate rights-of-way. This is accomplished through a system of 
designated right-of-way corridors and co-locating communication uses on 
existing towers and within multi-occupancy buildings when feasible. 
During the preapplication meeting, BLM staff may examine the proposed 
right-of-way use to see if it would fit in an existing corridor or in 
an existing communication facility. Sections 2804.10 and 2884.10 of 
this final rule address preapplication meetings.
    Application forms are available at every BLM office and on the 
Internet at www.blm.gov/nhp/what/lands/realty/forms/299/index.html. BLM 
wants to make the application process as easy as possible. Accordingly, 
the application form (SF-299) requests a minimum amount of information. 
Even so, incomplete information is often the reason BLM cannot process 
your application quickly.
    To avoid problems, you should review the form prior to your 
preapplication meeting and, if possible, complete it before or during 
the preapplication meeting with BLM. Be sure to bring any information 
that you believe BLM would find useful during this session. For 
example, item 8 requests a map of the project area. You may already 
have a survey or other adequate map that will satisfy this requirement.
    You should arrange for your preapplication meeting well in advance 
of when you would like to start work on the project. Processing time 
for an average grant is 60 to 90 days. However, grants for complex 
projects can take much longer to process. Try to contact BLM as soon as 
possible. The field office manager and staff are ready to provide 
information, advice, and assistance to help you prepare your 
application.

Costs

    Both FLPMA (43 U.S.C. 1764(g)) and the Mineral Leasing Act (30 
U.S.C. 185(l)) authorize BLM to charge processing fees, monitoring 
fees, and rent.
    Processing Fees. This cost recovery charge reimburses the United 
States in advance for the expected administrative and other costs we 
incur in processing the application. You must pay processing fees when 
you submit the written application. BLM will use the information 
presented during the preapplication meeting to estimate the application 
processing fee. Subparts 2804 and 2884 of this final rule address 
processing fees.
    Monitoring Fees. This cost recovery charge is a nonrefundable fee 
to reimburse the United States for the cost of monitoring compliance 
with the terms and conditions of the right-of-way grant, including your 
obligation to protect and rehabilitate the lands covered by the right-
of-way. BLM will monitor your construction, operation, and maintenance 
of the right-of-way and, when the time comes, the shutdown of your 
activities and the termination of the right-of-way grant. Subparts 2805 
and 2885 of this final rule address monitoring fees.
    Rents. This is a charge for locating your right-of-way facility on 
public or Federal lands. It is payable (for a specified term) before we 
issue the grant and is based on the fair market value of the rights we 
authorize. We usually establish the rental for linear and communication 
sites on public lands via two separate administrative schedules. Based 
roughly on land values in the project area, these schedules are 
adjusted annually using an economic index. In some cases, the rental is 
established by an appraisal. Subparts 2806 and 2885 of this final rule 
address these schedules and other rent issues.
    Exemptions, waivers, or reductions in the processing, monitoring, 
or rental fees may apply to your application and BLM officials can 
explain these during the preapplication meeting. Subparts 2804, 2806, 
2884, and 2885 of this final rule cover these issues.

Temporary Use Permits and Short Term Grants

    All activities associated with the construction, operation, 
maintenance, and termination of your right-of-way grant must be within 
the specified limits of the authorization. Item 7 on the right-of-way 
application form is where you would identify your need for the use of 
additional land during, for example, the construction phase of your 
project. This additional land may be necessary for construction, 
stockpiling of excess materials, equipment parking, and the like. If 
you require additional land for your MLA grant, you will need to apply 
for a temporary use permit (TUP). The MLA specifically authorizes BLM 
to issue temporary use permits associated with MLA grants (see 30 
U.S.C. 185(e)). BLM can grant TUPs for up to three years. If you 
require additional land for your FLPMA grant, you will need to apply 
for a short term grant for the additional lands. FLPMA specifically 
authorizes temporary use of additional lands for FLPMA grants (see 43 
U.S.C. 1764(a)). You should discuss TUP and short term right-of-way 
grant needs with BLM during the preapplication meeting.
    You can apply for a TUP or a short term grant at the same time you 
apply for a right-of-way by describing the dimension and location of 
the additional lands, and the term you need in item 7 of the standard 
right-of-way application (SF-299), or by describing this information in 
your Plan of Development, as part of your application. You may also 
apply for a TUP or short term grant after BLM grants your right-of-way. 
In this case, you must use a separate SF-299 form, and pay additional 
processing and monitoring fees for BLM to process the TUP or short term 
grant. This might require a separate environmental clearance and take 
additional processing time. If there is a possibility that you may need 
extra width or space, it is best to identify this in your original 
right-of-way application. Part 2800 of this final rule addresses short 
term grants and part 2880 of this final rule addresses TUPs.

Processing a Right-of-Way Application

    Once you file an application with BLM, we will review it to make 
sure you have included all necessary information. We will then review 
and evaluate the application contents and determine the probable impact 
of the activity on the social, cultural, economic, and physical 
environment. BLM will also check to see if the proposed right-of-way is 
consistent with the existing land use plan, and will check to see what 
valid existing rights currently exist on the lands in question. BLM may 
deny a right-of-way application for any number of reasons. A 
preapplication meeting will reduce the possibility of BLM denying your 
application. Sections 2804.26 and 2804.27 and sections 2884.23 and 
2884.24 of this final rule address denials of grant or TUP 
applications.

Appeals

    If BLM denies your application, the official written decision will 
give the reasons for the denial and information on how to file an 
appeal. You also have appeal rights at many other decision

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points in this final rule. In general, if you are an applicant who is 
adversely affected by a BLM written decision, you may appeal that 
decision. Sections 2801.10 and 2881.10 of these regulations address 
appeals.

Liability

    As holder of a right-of-way grant you are responsible for damage or 
injury to the United States and to third parties in connection with the 
right-of-way use. You, as the holder, must also indemnify or hold the 
United States harmless for third party liability, damages, or claims it 
incurs. Sections 2807.12, 2807.13, 2886.13, and 2886.14 of this final 
rule address liability issues.

Amendments to Your Grant

    If you want to substantially change, improve, or add to a project 
once you have a right-of-way grant, you must file an application with 
BLM to amend your right-of-way grant. You must have BLM's prior written 
approval before you make any substantial change in location or use 
during construction, operation, or maintenance of the right-of-way. You 
must contact the field office manager to determine if your proposed 
changes require you to file an amendment. Sections 2807.20 and 2887.10 
of this final rule cover grant amendments.

Monitoring Your Grant

    BLM may inspect your project for compliance with the terms and 
conditions of the grant and these regulations. In addition, under the 
terms of the grant, BLM reserves the right of access onto the lands 
covered by the right-of-way grant and, with reasonable notice to the 
holder, the right of access and entry to any facility constructed in 
connection with the project (see sections 2805.15 and 2885.13). 
Subparts 2805 and 2885 of this final rule address grant monitoring.

Grant Suspension and Termination

    A right-of-way holder may use the right-of-way for only those 
purposes permitted in the grant. BLM may suspend or terminate a right-
of-way if the holder does not comply with the applicable laws, 
regulations, terms, or conditions. BLM may require an immediate 
temporary suspension of activities within a right-of-way to protect the 
public health or safety or the environment. Sections 2807.16 through 
2807.19 and sections 2886.16 through 2886.19 of this final rule address 
suspensions and terminations.

Assignments

    With BLM approval, you may transfer your right-of-way grant to 
another person. A transfer of your grant is called an assignment. You 
must submit to BLM, in writing, an application for the proposed 
assignment, along with a nonrefundable payment. BLM will not recognize 
an assignment to the new owner until we approve it in writing. BLM will 
approve the assignment if doing so is in the public interest. Sections 
2807.21 and 2887.11 of this final rule address assignments.

Trespass

    If you use, occupy, or develop the public lands or their resources 
without a required authorization or in a way that is beyond the scope 
and terms and conditions of your authorization, you are considered to 
be in trespass and you may be penalized. Subparts 2808 and 2888 of this 
final rule address trespass.

Comparison Between FLPMA and MLA Grants

    There are many similarities and differences between FLPMA and MLA 
grants. The following chart describes FLPMA and MLA right-of-way 
grants, but is not meant to be a complete description of all of the 
nuances, similarities, and differences between FLPMA and MLA grants.

------------------------------------------------------------------------
                                    Part 2800             Part 2880
                                Regulations FLPMA      Regulations MLA
                                     Grants                Grants
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Agency Jurisdiction.........  BLM issues grants on  BLM issues grants on
                               public lands only     all Federal lands
                               (43 U.S.C. 1761(a)).  if the lands are
                                                     administered by two
                                                     or more Federal
                                                     agencies. BLM also
                                                     issues grants on
                                                     public lands (30
                                                     U.S.C. 185(c)).
Term........................  A reasonable term.    A reasonable term
                               This can range from   not to exceed 30
                               a term of one day     years (30 U.S.C.
                               to a term in          185(n)).
                               perpetuity. (43
                               U.S.C. 1764(b)).
Rental......................  Fair market rental    Fair market rental
                               value required from   value required from
                               holders, but          all holders (30
                               exceptions apply.     U.S.C. 185(l)).
                               (43 U.S.C. 1764(g)).
Cost Reimbursement..........  Collect reasonable    Collect actual costs
                               costs of processing   of processing the
                               the application and   application and
                               monitoring except     monitoring except
                               from certain          from certain
                               government agencies   government agencies
                               and cooperative       (43 CFR 2884.13).
                               cost share program
                               participants (43
                               U.S.C. 1764(g)).
Renewal.....................  Renewable if it is    Renewable if the
                               provided for in the   grant is still
                               grant and             being used for
                               satisfactory          commercial
                               operation and         operations and
                               maintenance exists    satisfactory
                               (43 U.S.C. 1764(b)).  operation and
                                                     maintenance exists
                                                     (30 U.S.C. 185(n).
Citizenship.................  Individual applicant  Individual applicant
                               not required to be    required to be U.S.
                               U.S. citizen (43      citizen (30 U.S.C.
                               U.S.C. 1761(b)).      181, 185).
Width.......................  Variable, depending   Maximum 50-foot
                               on purpose of the     permanent width,
                               authorization (43     plus the ground
                               U.S.C. 1764(a)).      occupied by the
                                                     pipeline;
                                                     exceptions are
                                                     possible (30 U.S.C.
                                                     185(d)).
Assignments.................  Assignable with       Assignable with
                               BLM's approval (43    BLM's approval (30
                               U.S.C. 1764(c) and    U.S.C. 185(r)).
                               (g)).
Temporary Use...............  Authorize temporary   Authorize temporary
                               work areas as part    work areas with a
                               of a right-of-way     Temporary Use
                               grant or with a       Permit (30 U.S.C.
                               separate short-term   185(e)).
                               right-of-way grant
                               (43 U.S.C. 1764(a)).
Common Carrier Provision....  Does not apply to     Applies to all
                               FLPMA grants.         pipeline grants (30
                                                     U.S.C. 185(r)).
Application form............  BLM Standard Form     BLM Standard Form
                               299 or APD or         299 or APD or
                               Sundry Notice for     Sundry Notice for
                               off-lease oil and     all off-lease
                               gas access roads.     portions of oil and
                                                     gas pipelines.
------------------------------------------------------------------------


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II. Final Rule as Adopted and Response to Comment

Part 2800--Rights-of-Way Under FLPMA

    We received many comments on the proposed rule that addressed 
issues common to both the part 2800 and part 2880 regulations. So as 
not to be redundant, we address the comments only in the section they 
pertain to in the part 2800 regulations. Comments that specifically 
address the part 2880 regulations are discussed in that section of the 
preamble.

Subpart 2801--General Information

    This subpart contains material that pertains to all of part 2800 
and several sections of part 2880. Part 2800 contains policies and 
procedures related to right-of-way grants BLM issues under the Federal 
Land Policy and Management Act and part 2880 to right-of-way grants and 
temporary use permits BLM issues under the Mineral Leasing Act. More 
specifically, subpart 2801 contains:

    (A) An explanation of the objective of BLM's right-of-way program;
    (B) Acronyms and definitions used in the regulations; and
    (C) Information about which grants the regulations affect and which 
they do not.

General Comments

    Several commenters said that there is no up-to-date data to support 
the need for increases in existing right-of-way fees or the creation of 
new ones, and that BLM should prepare a baseline report and annual 
reports thereafter to document the needed increases. They also said 
that there have been significant technology increases, as well as staff 
reorganizations, that have improved efficiencies that should reduce 
costs. For a discussion of the justification for increasing cost 
recovery fees, please see the proposed rule at 64 FR 32107 through 
32111.
    In 1995, BLM program experts analyzed a cross section of right-of-
way cases. This analysis showed that the cost of processing right-of-
way cases, including labor costs, had increased since 1986 at 
approximately the same rate as the Implicit Price Deflator-Gross 
Domestic Product (IPD-GDP). Therefore, the final rule adjusts costs 
upward based on the IPD-GDP and allows for automatic adjustments based 
on this indicator. Technological improvements and staff reorganizations 
that have taken place recently may have yielded improved right-of-way 
processes in many BLM offices. Since the processing categories in this 
final rule are based on the time (hours) required to process an 
application, this final rule takes into account increases in 
efficiencies. We note, however, that the number of processing hours may 
be increased by the increasingly complex resource issues BLM encounters 
when processing grant applications which add to the amount of 
coordination required to process applications. Increased public 
involvement in the National Environmental Policy Act (NEPA) process 
adds extra levels of analysis and review. Comments relating to BLM 
creating new fees are misdirected since BLM is not proposing any new 
fees in this rule (see previous subparts 2808 and 2883 and previous 
sections 2803.1-2 and 2883.1-2).
    We suggest that commenters who requested reports justifying the fee 
increases refer to the preamble discussion in the proposed rule (64 FR 
32107 and 32108). A 1995 audit of BLM's cost recovery efforts by the 
Office of Inspector General (OIG) for the Department of the Interior 
found BLM was not recovering all the costs of processing applications 
and recommended that BLM revise its regulations to recover all 
applicable costs. The audit estimated that BLM incurred about $640,000 
in additional expense in excess of the fees collected in 1993. (This 
shortfall comes to $213 per application, or $800,000 and $336 
respectively when adjusted for the change in IPD-GDP.) BLM is following 
the OIG's suggestions by increasing the costs for processing and 
monitoring right-of-way applications and providing for future 
adjustments to the costs based on economic indicators to reflect the 
costs of inflation. BLM also prepares yearly reports, some to meet 
requirements imposed by Congress in the Mineral Leasing Act, that 
discuss the relative numbers and types of cases that we process each 
year. BLM publishes this data annually in a statistical report that you 
can find on the Internet at http://www.blm.gov/nhp/browse.htm#annual_reports. While these reports alone do not justify increasing cost 
recovery fees, they show that the number of right-of-way authorizations 
BLM grants and administers continues to increase. As such, the monetary 
losses projected by the OIG in 1995 continue to increase each year. We 
did not amend the final rule as a result of these comments.
    Several commenters from the oil and gas industry suggested that BLM 
should not increase processing fees because the bonuses, rents, and 
royalties industry already pays to the government should cover BLM's 
right-of-way processing costs. We address this comment here because it 
could apply to grants issued under either FLPMA or the MLA, as some oil 
and gas lessees do hold FLPMA rights-of-way to assist in transporting 
product off-lease.
    Congress authorized BLM to recover processing costs, and did so 
fully aware that BLM was already collecting bonuses, rents, and 
royalties. Congress is presumed to understand the state of the existing 
law when it legislates. Bowen v. Massachusetts, 487 U.S. 879, 896 
(1988).
    In the MLA, Congress specified how mineral royalties and bonuses 
are distributed to states and to the Treasury (30 U.S.C. 191), and this 
distribution does not return funds to BLM to cover the costs of 
processing right-of-way applications. However, as discussed in the 
preamble to the proposed rule at 64 FR 32107, section 504(g) of FLPMA 
and section 28(l) of the MLA authorize BLM also to collect the costs to 
process right-of-way applications. Section 504(g) of FLPMA further 
provides that the deposit of reimbursements for reasonable costs be 
placed into a Treasury account to be appropriated to BLM for processing 
applications.
    Also, BLM charges processing fees to everyone who files an 
application, except those specifically exempted by law or regulation, 
pursuant to its authorities under the Independent Offices 
Appropriations Act, as amended, 31 U.S.C. 9701 (IOAA); section 304(a) 
of FLPMA; Office of Management and Budget Circular A-25; the Department 
of the Interior Manual 346 DM 1.2 A; and case law (also see the 
preamble to the proposed rule at 64 FR 32107 and Solicitor's Opinion M-
36987 (December 5, 1996)). Congress clearly intended for agencies to 
recover processing costs in addition to bonuses, rents, and royalties.
    The IOAA states that Federal agencies should be ``self-sustaining 
to the extent possible,'' and authorizes agency heads to ``prescribe 
regulations establishing the charge for a service or thing of value 
provided by the agency.'' Section 304(a) of FLPMA specifically 
authorizes the Secretary of the Interior to ``establish reasonable 
filing and service fees and reasonable charges and commissions with 
respect to applications and other documents relating to the public 
lands.'' IOAA and FLPMA give BLM authority to charge fees for 
processing applications, which we interpret to include amendments and 
assignments.
    OMB Circular A-25 sets forth a general policy that a user charge 
will be assessed against each identifiable recipient for special 
benefits derived from Federal activities beyond those received by the 
general public. Departmental Manual 346 DM 1.2A

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requires (unless otherwise prohibited) that a charge, which recovers 
the bureau's costs, be imposed for services which provide special 
benefits or privileges above and beyond those which accrue to the 
public at large.
    A particularly relevant court ruling is Mississippi Power & Light 
Co. v. United States Nuclear Regulatory Commission, 601 F.2d 223 (5th 
Cir. 1979), cert. denied, 444 U.S. 102 (1980). The court upheld a 
Nuclear Regulatory Commission (NRC) licensing fee schedule. The court 
rejected the petitioners' argument that the work of the NRC benefitted 
the general public solely and that the conferral of a license or permit 
does not bestow upon the petitioners any special benefit whatsoever. 
The court concluded: ``A license from the NRC is an absolute 
prerequisite to operating a nuclear facility, and as such, is a benefit 
`not shared by other members of society.' '' Likewise, a right-of-way 
grant is a benefit not shared by other members of society. Therefore, 
BLM charges applicants for processing their applications for grants 
because they are seeking a benefit not shared by other members of 
society.
    The commenters' contention that BLM should not charge right-of-way 
processing fees to the oil and gas industry because the industry 
already pays bonuses, rentals, and royalties misses the point about 
processing fees. Congress intends for agencies to be reimbursed for 
processing costs when the agency action benefits an identifiable party. 
BLM's processing of right-of-way applications benefits the applicant, 
who will use the right-of-way to aid its operation. Bonuses, rentals, 
and royalties are related to the use of the resource and are unrelated 
to agency processing costs. Congress has provided for agencies to 
collect both for the use of the resource and for the processing of 
applications and other documents.
    Some of these commenters further suggested that any regulations 
pertaining to rights-of-way should be combined with existing oil and 
gas regulations, onshore orders, and notices to lessees and that a 
separate rulemaking is duplicative. We have decided not to combine this 
rule with other oil and gas rules. We believe that since both the FLPMA 
and MLA right-of-way programs are administered under BLM's lands and 
realty program and because of the many similarities between the various 
lands and realty regulations, both as a matter of policy and a matter 
of process, BLM's right-of-way regulations should not be located in the 
same part in 43 Code of Federal Regulations as BLM's oil and gas 
regulations.
    One commenter suggested that BLM should consider the benefits the 
public receives from industry upgrading access roads and performing 
special studies that benefit the public. Previous regulations allowed 
BLM to reduce cost recovery fees to reflect both public benefits from 
studies connected with processing an application and special services 
to the public or a program of the Secretary provided by a project (see 
previous sections 2808.5(b)(5) and (6). Like previous regulations, the 
final rule contains provisions for FLPMA right-of-way applicants to pay 
cost recovery fees that reflect the public service or public benefit 
derived from a right-of-way grant or its processing (see final sections 
2804.20 and 2804.21).
    Several commenters said that the proposed automatic fee adjustments 
appear to be a disincentive for future BLM process improvements. We 
disagree with the commenters. The automatic fee adjustment provisions 
in this final rule will not act as a disincentive to continuing our 
process improvement efforts. Even after this rule becomes final, BLM 
will continue to examine ways to improve processes. The automatic fee 
adjustments are intended to increase fees based on an economic 
indicator that reflects yearly increases in the cost of doing business. 
We have included automatic fee adjustments because the cost to BLM of 
going through rulemaking each time fees needed to be adjusted would be 
prohibitive and inefficient. If during periodic review of the fee 
structure we determine that the fees or fee structure need to be 
revised, apart from applying the IPD-GDP, we will propose new 
rulemaking.
    Some commenters said that the fee increases were not legal since 
they were really special use taxes that must be ``approved by Congress 
and signed by the President.'' BLM does not agree with the commenter. 
Clearly, both FLPMA and MLA give BLM authority to collect the 
reasonable or actual costs of processing right-of-way applications (see 
43 U.S.C. 1764(g) and 30 U.S.C. 185(l)). Neither statute imposes a 
limitation on fee increases. Moreover, the Supreme Court has made clear 
that agencies may charge for special benefits to identifiable 
recipients, which is what BLM is doing in this rule. See National Cable 
Television Association v. U.S., 415 U.S. 336, 341 (1973), and Federal 
Power Commission v. New England Power, 415 U.S. 345, 349 (1973).
    One commenter agreed with the proposal to automatically adjust fees 
to keep pace with inflation. This provision remains in the final rule.
    Some commenters thought that the IPD-GDP was not the appropriate 
indicator for automatic increases in fees. They thought that the 
Consumer Price Index would be a better economic indicator to use since, 
due to streamlining, labor costs have decreased since 1987. We 
disagree. As we stated in the proposed rule's preamble (see 64 FR 
32109), we believe that the IPD-GDP is the correct economic indicator 
on which to base these fee adjustments since the IPD-GDP more closely 
reflects the relationship of labor to other costs than do other 
economic indicators and most of BLM's processing and monitoring costs 
are related to labor costs.
    One commenter stated that BLM was attempting to recover costs in 
excess of the shortfalls in cost recovery identified by the OIG in 
1995, and that the new fees would be indexed annually to guarantee 
additional income. Further, commenters said that BLM was only allowed 
to recover reasonable or actual costs. We agree that BLM can only 
charge reasonable or actual costs for processing right-of-way 
applications. Final section 2804.14 of the FLPMA regulations requires 
that you pay the United States the reasonable costs of processing your 
application, and final section 2884.12 of the MLA regulations requires 
that you pay the United States the actual costs of processing your 
application.
    We believe the commenter who stated that BLM was attempting to 
recover more that its shortfall misunderstood the explanation in the 
proposed rule. In 1995, the OIG sampled 75 of the approximately 3,000 
right-of-way cases BLM processed in fiscal year 1993 and determined 
that there was a shortfall in collected processing fees of $16,000 for 
those 75 cases. The total estimated shortfall for the 3,000 cases 
processed was thus at least $640,000 for that one year. The proposed 
rule stated that the maximum fees that possibly could be generated by 
the proposed regulations over and above fees already being collected, 
was approximately $2.7 million annually (see 64 FR 32123). We 
calculated that figure to show that even under the most extreme 
circumstances this rule would not be considered economically 
``significant'' under Executive Order 12866 (which defines 
``significant'' as having an annual economic impact of $100 million or 
more). The $2.7 million figure does not represent anticipated revenue, 
but indicates the outside limit of the economic impact of the proposed 
rule, over and above the fees already being

[[Page 20975]]

collected, if every right-of-way application, including those that were 
exempted or reduced under previous regulations, were placed at the 
highest fee category available. Therefore, the difference between 
$640,000 and $2.7 million does not represent costs in excess of what 
BLM needs to process grant applications. BLM anticipates that this rule 
will, on an annual basis, generate additional revenue from processing 
fees approximately equivalent to the $640,000 shortfall identified by 
the OIG, corrected for inflation by application of the IPD-GDP.
    One commenter said that BLM and the U.S. Forest Service (FS) should 
adopt the same rules, procedures, and regulations to reduce application 
costs and review times. We agree. BLM and the FS are working together 
on parallel regulations to establish procedures that are consistent to 
the extent possible for the collection of right-of-way processing and 
monitoring fees (see 64 FR 66341 for the FS proposed rule).
    A few commenters said that the difference between FLPMA and MLA 
rights-of-way should be pointed out in the final rule since it is 
confusing to the public and BLM. The basic processing steps, fee 
determination process, and conditions for approval involved in both 
types of applications are nearly identical. However, there are some 
differences between the two types of applications and the two parts of 
the rule, most of which result from distinctions in the statutory 
authority for the two types of grants. The major differences between 
the part 2800 and part 2880 regulations are explained in the table and 
general discussion above.
    A few commenters said that instead of the cost recovery fee in the 
proposed rule, BLM should use a ``minimal impact flat fee'' similar to 
that proposed by the FS for flowlines, roads and electric lines being 
installed in a developing field. The FS proposed a ``minimum impact 
category'' in their rule that would cover one-time authorizations for 
the use of forest system lands for events such as recreation events, 
weddings, or bike races or uses where more than 75 people participate 
(see 64 FR 66341, 66344, and 66350). The BLM requested comments on the 
need for such a category. Both agencies decided not to establish a 
``minimal impact category'' in their final rules. Instead, in this 
final rule BLM establishes a new processing and monitoring category for 
all ROW actions where we spend more than one hour but less than eight 
hours processing the application or monitoring the grant. The FS also 
plans to issue a similar final rule.

R.S. 2477

    Many commenters were concerned that the regulations would impact 
rights associated with R.S. 2477 roads. One commenter said that before 
the rule can be finalized, a Federal court must decide which roads are 
available for rights-of-way as some may be owned by the county under 
R.S. 2477. Similarly, another commenter said that BLM needs to make 
sure we own the road before issuing a right-of-way grant. These final 
regulations do not change the current policy of the Department of the 
Interior for handling R.S. 2477 issues and apply only to public lands 
(Part 2800) and Federal lands (Part 2880). Final section 2801.6 makes 
clear that these regulations do not apply to valid claims under R.S. 
2477.

Temporary Use Permits

    Several commenters supported the continued use of temporary use 
permits (TUPs). Some commenters from the oil and gas industry said that 
we should not eliminate TUPs for FLPMA rights-of-way since the industry 
needs them for testing and emergency situations. Other commenters said 
that BLM only needs to be able to authorize the additional use of 
public land outside a permanent right-of-way, no matter what you call 
the authorization. We agree with the basic point of the last comment 
and have so provided in this rule. Moreover, BLM believes there is 
little difference between approving the use of public land using short 
term right-of-way grants and approving the use of Federal land with 
TUPs. Both authorizations require:
    (A) The same application procedure;
    (B) Compliance with NEPA and land use plans;
    (C) Preparation of a decision; and
    (D) Execution of an authorizing document.
    BLM can authorize all associated uses with a FLPMA grant, whether 
they are short or long term, and therefore TUPs are not needed. This is 
consistent with the proposed rule (see 64 FR 32118).
    One commenter said that BLM should authorize in a right-of-way 
grant access roads, temporary landing sites, and lay down areas rather 
than in a special use permit since these activities are an integral 
part of the construction operations. We agree and the final rule is 
consistent with this comment. The same commenter said that short-term 
incidental activities, such as those short term construction activities 
that would temporarily require additional width for a right-of-way, or 
a temporary access road should be permitted for a term and with 
stipulations, as a right-of-way, not as a special use, because they are 
tied to a longer term use. We agree with the commenter. Under this 
final rule, we will issue right-of-way grants under FLPMA with an 
appropriate term and stipulations for all authorized uses associated 
with a right-of-way, including short term construction and access 
needs.

Section 2801.2 What Is the Objective of BLM's Right-of-Way Program?

    This section is new to the final rule and explains it is BLM's 
objective to grant rights-of-way to qualified individuals and business 
or government entities, and to direct and control the use of rights-of-
way on public lands in a manner that:
    (A) Protects the natural resources;
    (B) Prevents unnecessary or undue degradation to public lands;
    (C) Promotes the use of rights-of-way in common; and
    (D) Coordinates, to the fullest extent possible, all BLM actions 
under the regulations with state and local governments, interested 
individuals, and appropriate quasi-public entities.
    We inadvertently left the objectives section out of the proposed 
rule, but this final section is consistent with previous section 
2800.0-2. We added a similar provision to the part 2880 regulations 
discussed later in this preamble.

Section 2801.5 What Acronyms and Terms Are Used in These Regulations?

    This section contains the acronyms and defines the terms that are 
used in these regulations. Paragraph (a) is new to the final rule and 
contains acronyms that are frequently used in the final rule. We also 
amended the definitions section in the final rule by adding several 
terms, by deleting unnecessary terms, and by amending the definitions 
of the terms we proposed.
    Two terms not defined in the proposed or final regulations are 
``suspension'' and ``termination.'' We discuss those terms here because 
the public and BLM staff often inappropriately use the terms 
interchangeably. The two terms have very different meanings. 
Suspensions involve immediately curtailing activities and privileges 
authorized under a grant for a specified period of time. Suspensions 
may be ordered to protect public health, safety, or the environment. 
Terminations, on the other hand, involve ending the term of a grant 
because the grant has expired or is required by law to terminate, the 
holder requests and BLM consents to the termination, or the holder has 
not complied with laws, regulations, or any

[[Page 20976]]

terms and conditions of the grant, including abandonment.
    Many comments related to redefining terms used in the proposed rule 
or adding new terms to make the rule easier to understand.
    In the final rule we added a definition of ``actual costs'' to mean 
the financial measure of resources BLM expends in processing and 
monitoring right-of-way grants including direct and indirect costs, 
exclusive of management overhead. We added this definition because 
``actual costs'' is one of the criteria spelled out in FLPMA that BLM 
uses to assess whether costs are reasonable. The term is defined 
similarly to previous section 2800.0-5(o).
    One commenter asked that the final regulation define 
``administrative costs of processing,'' as the phrase was vague and 
subject to interpretation. In the final rule we do not use the phrase 
``administrative cost of processing'' and therefore there is no need to 
define the term.
    The Forest Service recommended revising the definition of ``base 
rent'' to read, in part, as follows:

    Base rent means the initial dollar amount required of a facility 
owner or a facility manager based on the highest value use in their 
facility, as determined by the communications rent schedule and the 
population of the community served. If the facility manager rental 
rate or the facility owner's type of use rental rate is equal to or 
greater than other assigned rental rates in that facility, then * * 
*.

    In the final rule we moved the definition of ``base rent'' from 
proposed section 2806.5 to this section. We also modified the final 
definition to make it easier to understand that when a communication 
site facility manager's or facility owner's scheduled rent is equal to 
the rent for the highest use from the communication use rent schedule, 
the facility manager or facility owner's use determines the base rent. 
When the value of any other use in the communication site facility 
exceeds that of the facility manager or facility owner's use, that 
other use determines the base rent. Although we did not copy the FS 
proposed language exactly, we followed the suggested meaning of the FS 
comment in the final definition.
    In the final rule we amended the definition of ``casual use'' to 
mean ``activities ordinarily resulting in no or negligible disturbance 
of the public lands, resources, or improvements.'' We also replaced the 
example proposed with ``Surveying, marking routes, and collecting data 
to use to prepare grant applications.'' We believe the final rule's 
definition of ``casual use'' is a more accurate and useful description 
because it recognizes that casual use may cause no disturbance and 
because it gives examples that are more useful than that provided in 
the proposed rule.
    In the final rule we moved the definition of ``commercial purpose 
or activity'' from proposed section 2806.5 to this section and modified 
it to make it easier to understand. In the final rule, we use the term 
to describe the situation where a holder attempts to produce a profit 
by allowing the use of its facilities by an additional user. Under 
these circumstances BLM may assess an appropriate rent for such 
commercial activities. The holder's use may not otherwise be subject to 
rent charges under BLM's rental provisions.
    In the final rule we moved the definition of ``communication use 
rent schedule'' from proposed section 2806.5 to this section and 
modified it to make it easier to determine where a use will fit into 
the schedule. The final rule also clearly states that the type of use 
identified on an FCC license does not supersede either the definition 
found in this subpart or the procedures for calculating rent in subpart 
2806. The definitions in this rule are different from those in FCC's 
rules because our reason for defining them is so we can determine the 
correct rent for the use of a right-of-way, whereas the FCC regulations 
define them for entirely different reasons, such as licensing 
requirements. Therefore, our definitions continue to focus on 
determining the type of use. However, there may be circumstances where 
BLM cannot accurately determine the type of communication use and 
therefore cannot determine the proper category in the rent schedule for 
the use. Should this occur, BLM may consult with the FCC to help us 
determine the use, based on our definitions, and therefore determine 
where the use would fit into the communication use rent schedule.
    Several commenters said BLM should change its definition of 
``commercial mobile radio service'' (CMRS) (contained in 
``communication use rent schedule) because it differs significantly 
from the regulatory classifications established by Congress and the 
FCC. They said BLM's definition of CMRS did not identify cellular, 
personal communication service, or enhanced specialized mobile radio 
services as specific types of commercial mobile radio services, but 
instead focused on communication services to individual customers and 
ancillary communication equipment for operating, maintaining, or 
monitoring use. One of the commenters suggested that we use the FCC's 
definition of CMRS. Another commenter said that the definition 
contravened section 6002(b) of the Omnibus Budget Reconciliation Act of 
1993, which mandated that similar mobile services be subject to 
consistent regulatory definition and urged BLM to adopt FCC definitions 
in its final rule. We disagree with the commenters. BLM and the FCC 
have different definitions for the terms because we use the terms for 
different purposes. The FCC issues licenses for different 
classifications of primary uses. BLM defines different types of 
communication uses for rental calculation purposes only.
    In the final rule we moved all communication site related 
definitions from proposed section 2806.5 to this section. For example, 
we moved the definition of ``customer'' from proposed section 2806.5 to 
this section. We also modified the definition to make it clear that:

    (A) BLM includes private or internal communication uses located 
in a holder's facility as customer uses; and
    (B) Customer uses are not included in the amount of rent owed by 
a facility owner, facility manager, or tenant unless the facility 
owner or facility manager is operating the facility for a commercial 
purpose. This more accurately describes how we charge for customer 
uses than the proposal and is consistent with existing policy and 
practice.

    Several commenters thought the definition of ``designated right-of-
way corridor'' should be deleted because it is not compatible with oil 
and gas field operational practices. We address this comment here 
because right-of-way corridors, even those for oil and gas operations, 
are designated under FLPMA. The commenters said that the spider web of 
flowlines, gathering lines and roads on specific leases cannot be 
predicted and would not be conducive to corridors. We retained the 
definition in the final rule because of the advantages to locating 
major utility rights-of-way in corridors on public land and because 
section 503 of FLPMA requires that we use rights-of-way in common to 
the extent practical. Further, the final rule does not require that 
rights-of-way for all oil and gas field operations be located in a 
designated right-of-way corridor. Designation of a right-of-way 
corridor is a land use planning decision that BLM makes only after 
fully considering the impacts on other existing and planned land uses, 
including oil and gas development.
    We made minor wording changes to the definition of ``facility'' in 
the final rule to make it easier to understand. The definition makes it 
clear that ``facility'' includes the improvements or structures on a 
right-of-way owned or controlled by the grant or lease holder.

[[Page 20977]]

    In the final rule we moved the definition of ``facility manager'' 
from proposed section 2806.5 to this section. The final definition 
makes clear that a communication site facility manager does not own or 
operate its own equipment, but leases space to tenants and customers in 
a communication facility. We also moved the ``facility owner'' 
definition from proposed section 2806.5 to this section and reworded it 
to be clear that a ``facility owner'' owns and operates its own 
communication equipment in a facility and may or may not lease space to 
other users in the communication facility. Both definitions are 
consistent with current policy and practice.
    Several commenters said that the definition of ``field 
examination'' should make it clear that the BLM staff person making a 
field trip should look at as many rights-of-way and Applications for 
Permits to Drill as possible in one trip to make the trip as efficient 
as possible. We agree. Combining several field examinations or other 
inspections into one field trip is BLM's routine practice. However, we 
deleted the proposed definition of ``field examination'' from the final 
rule because we no longer use the term and it is not part of the 
criteria for determining a cost recovery category in this final rule. 
For further information, please see the preamble discussion of final 
section 2804.14.
    Several commenters asked what ``reasonable costs'' are and said 
that BLM should be responsible for paying for NEPA and other studies 
since it is our responsibility under the law. We use the phrase 
``reasonable costs'' in sections 2804.14, 2804.20, and 2805.16. The 
final rule defines this phrase in section 2801.5, and final section 
2804.20 lists the factors from FLPMA that BLM will use in its 
determination of the reasonable costs for Processing Category 6 or 
Monitoring Category 6.
    We reworded the definition of ``grant'' to state that a grant is 
any authorization or instrument (e.g., easements, leases, licenses, or 
permits) issued under Title V of FLPMA, and that ``grant'' includes 
those authorizations and instruments BLM and its predecessors issued 
for like purposes prior to the passage of FLPMA under now expired 
authorities. Therefore, the term ``grant'' includes communications use 
leases. We use the term ``lease'' for communication site purposes 
because of the nature of the rights we authorize to the holder of the 
authorization. Communication use leases allow holders to sublease space 
to tenants and customers without first obtaining BLM approval. A 
typical BLM right-of-way grant does not allow holders to sublease.
    We received many comments related to the definition of ``hazardous 
material.'' Many commenters said that the Environmental Protection 
Agency (EPA) has an established definition of ``hazardous substance'' 
and that EPA regulates hazardous substances and BLM therefore need not. 
Some commenters said the definition was overly broad, inconsistent with 
other regulatory authorities and should be deleted. Several commenters 
said that the definitions ``hazardous material,'' ``discharge,'' and 
``release'' should all be deleted from the rule and that the rule is 
expanding BLM's jurisdiction beyond what is required by law. Some 
commenters said the rule changes statutory requirements and regulations 
on hazardous materials. The commenters said the rule should not weaken 
or dilute the Resource Conservation and Recovery Act (RCRA) or the 
Comprehensive Environmental Response, Compensation, and Liability Act 
(CERCLA) or eliminate the exemptions provided the oil and gas industry 
in those statutes. We have not changed these definitions as a result of 
these comments. The final rule includes these definitions to make clear 
the regulations addressing use and management of hazardous materials on 
Federal and public lands. As noted in the proposed rule's preamble (see 
64 FR 32118), right-of-way holders use, store, and transport various 
hazardous materials on and across public lands. BLM seeks to ensure 
that those using BLM lands are responsible for damage to health, 
property, and the environment incurred while using and occupying a 
right-of-way and that they understand which materials we consider to be 
hazardous.
    The terms ``discharge'' and ``release'' take their meanings from 
the Clean Water Act (33 U.S.C. 1321(a)(2)) and CERCLA (42 U.S.C. 
9601(22)), respectively. The terms broadly address the range of 
circumstances under which, during the use of a right-of-way, a chemical 
substance may enter the environment.
    The term ``hazardous material'' is also intentionally broad and 
includes, among others:
    (A) Hazardous substances as defined by CERCLA (see 42 U.S.C. 
9601(14);
    (B) Regulated substances managed in tanks as defined by the 
Resource Conservation and Recovery Act (RCRA) (see 42 U.S.C. 6991 et 
seq.);
    (C) Oil, as defined by the Oil Pollution Act (see 33 U.S.C. 
2701(23)), and the Clean Water Act (see 33 U.S.C. 1321(a)); and
    (D) Other substances defined and regulated as ``hazardous'' under 
applicable Federal, state, tribal, or local law.
    We defined ``hazardous material'' by cross-referencing other laws 
to ensure that all pollutants, contaminants, and hazardous substances, 
including oil and petroleum products, fall within the definition. 
Although some commenters stated that BLM should specify hazardous 
substances of concern, and should not incorporate into its rule 
definitions taken from other laws, such an approach would be 
impracticable in light of the large number and types of hazardous 
substances that can cause harm to health, property, or the environment. 
In addition, numerous laws, including CERCLA, define ``hazardous 
substance'' by incorporating definitions found in other laws. (See 
section 101(14) of CERCLA, 42 U.S.C. 9601(14), and section 1001(23) of 
the Oil Pollution Act, 33 U.S.C. 2701(23).) Because numerous 
jurisdictions have adopted definitions of hazardous substances that, in 
many respects, differ from those in CERCLA, RCRA, the Oil Pollution 
Act, and the Clean Water Act, BLM included within its definition a 
catch-all for substances defined as hazardous under Federal, state, 
tribal, or local law. Rather than cause confusion and inconsistency, as 
claimed by some commenters, BLM believes the definition fosters 
consistency in the meaning and application of key terms and provides 
clear guidance to users of their obligations and liability under these 
regulations.
    BLM disagrees that, by incorporating definitions of environmental 
terms taken from other laws, we are attempting to expand our authority 
into areas administered by EPA and state regulatory authorities under 
environmental laws. BLM is not seeking to supplant EPA and state 
authorities to regulate environmental laws on Federal and public lands. 
To the extent that EPA and the state have such authority, nothing in 
this rule affects it. These definitions apply only to BLM's right-of-
way regulations, which seek to ensure that if someone using and 
occupying a right-of-way issued under these regulations causes harm to 
health, property, or the environment, the cost of remedying such harm 
falls on the grant holder, rather than on the public.
    Several commenters stated that BLM should delete the term 
``hazardous material'' and replace it with ``hazardous substance'' as 
defined in CERCLA, because using the term ``hazardous material'' could 
weaken or dilute the exemption granted to the oil and gas industry in 
CERCLA and RCRA. The commenters misunderstand the purpose of the rule. 
Nothing in the rule

[[Page 20978]]

affects the exclusion of petroleum from the definition of ``hazardous 
substance'' under section 101(14) of CERCLA (42 U.S.C. 9601(14)). BLM 
is not seeking through this rule to enforce CERCLA on Federal or public 
lands or to regulate users' management of waste under RCRA. Rather, BLM 
is issuing these regulations to ensure that, as a manager of public 
lands, it places the risk of harm on the grant holder and not on the 
public. In this context, the definitions are used in these regulations 
only as a way to identify which materials we consider to be hazardous 
and which, therefore, may impact Federal or public lands.
    One commenter said that the final rule should define ``holder'' as 
it is defined in the law, to exclude Federal agencies. The commenter is 
correct that FLPMA does not include Federal agencies in its definition 
of holders. However, section 507 of FLPMA clearly provides for rights-
of-way for the use of any department or agency of the United States. 
Title V of FLPMA also applies to any Federal agency that would apply to 
construct an oil or gas pipeline on public lands. Therefore, we believe 
it necessary to include Federal agencies in the definition of holders.
    In the final rule we added a definition of ``management overhead 
costs'' to mean the costs associated with the BLM directorate, 
including all BLM State Directors and the entire Washington Office 
staff, except where a State Director or Washington Office staff member 
is required to perform work on a specific right-of-way case. We added 
the definition because we use the phrase in the definition of actual 
costs and in final section 2804.20.
    In the final rule we also added a definition of ``monetary value of 
the rights and privileges you seek'' to mean the objective value of 
what the right-of-way grant is worth in financial terms to the 
applicant. We added this definition because ``monetary value'' is one 
of the criteria spelled out in FLPMA that BLM uses to assess whether 
costs are reasonable and we use the term in final section 2804.20. The 
meaning of the term is the same as the definition in previous section 
2800.0-5(p).
    Several commenters said the final rule should define ``monitoring'' 
in terms of requirements and time frames and that monitoring should not 
be considered an annual or recurring cost. Another commenter asked if 
the determination of compliance was part of the ``administrative costs 
of (renewal) compliance,'' or part of day-to-day monitoring activities. 
The second comment appears to be asking if compliance inspections prior 
to renewal of a grant are part of day-to-day monitoring or part of the 
cost of processing a renewal. In the final rule we added a definition 
of monitoring, which includes those actions BLM performs to ensure 
compliance with the terms, conditions, and stipulations of the grant.
    Monitoring occurs primarily during the construction and 
rehabilitation phases of a project. During grant application 
processing, BLM will estimate the hours we will need to monitor the 
construction and rehabilitation of a Monitoring Category 1 through 4 
application, and we will collect the applicable fees when the applicant 
accepts the terms, conditions, and stipulations of a grant. For a 
Category 1 through 4 application, compliance inspections for a renewal 
are part of the cost of processing the renewal. Monitoring Category 1 
through 4 fees are one-time fees. Monitoring for Category 5 Master 
Agreements and Category 6 projects are in accordance with the terms of 
the agreement and may include monitoring during the life of the grant 
through the termination phase of the project.
    In the final rule we deleted the definition of ``project'' because 
there is a common understanding of the term as it is used in this rule.
    We also replaced the proposed rule's definition of ``public land'' 
with a definition more closely following section 103(e) of FLPMA.
    In the proposed rule we omitted the definition of ``reasonable 
costs.'' In the final rule we added the definition of the term, citing 
the definition in section 304(b) of FLPMA, which is consistent with 
existing policy and practice.
    In the final rule we moved the definition of ``site'' from proposed 
section 2806.5 to this section.
    One commenter supported using the term ``site,'' but recommended a 
broader definition that would include a geographic area that can 
accommodate multiple communication facilities under the control of one 
or more facility managers supporting a combination of recognized 
communications uses. BLM did not change the definition in response to 
this comment because we believe the commenter's suggestion is actually 
more restrictive than the proposed definition. A site is not limited to 
communication facilities and may contain several other types of right-
of-way facilities and uses besides communications facilities.
    One commenter said that the definition of ``substantial deviation'' 
absorbs rights that a Federal agency may already have in an existing 
grant. As an example, the commenter said that in utility rights-of-way 
it is common practice for the grant to include terms that allow the 
holder to construct, modify, and maintain the facilities. The commenter 
said that if Federal agencies want to do something that is beyond the 
scope of the grant, they should contact BLM. In the proposed rule BLM 
provided an explanation of ``substantial deviation'' that was not 
spelled out in previous regulations (see proposed section 2807.11). We 
moved the description of substantial deviation from proposed section 
2807.11 to final section 2801.5. BLM agrees with the commenter that 
when an activity is beyond the scope of what is authorized in a grant, 
the holder should contact BLM before engaging in the activity. We 
reworded the definition of ``substantial deviation'' to make clear that 
the notification requirement of proposed section 2807.11(b) applies 
only in circumstances where the use is outside the scope of an existing 
grant or outside the boundaries of an existing authorized right-of-way. 
The requirement does not apply to uses that are in an existing grant. 
BLM considers adding facilities that are not specifically authorized in 
the original grant to be a substantial deviation that requires 
supplemental authorization in the form of a grant amendment.
    Several commenters said that as it pertains to the definition of 
``temporary use permit,'' public safety is an ``OSHA function,'' not a 
BLM function. They also said that there should be a definition of 
``natural environment'' in the final rule and that under a temporary 
use permit, there may not be any ``natural environment'' to protect.
    In the final rule we deleted the definition of ``temporary use'' 
from part 2800. Under the final rule, for any use or activity requiring 
a FLPMA grant for a short duration, BLM will issue a short term right-
of-way grant instead of a temporary use permit. When an applicant 
identifies a short term use during application processing, such as the 
need for additional work space outside the right-of-way boundary, BLM 
will approve that use, as appropriate, within the right-of-way grant. 
When the short term use is identified after a right-of-way grant for a 
project has been executed, BLM will approve the additional short term 
use, as appropriate, in a separate short term grant or an amendment to 
the grant. There is no specified term or duration for a short term 
grant and BLM will determine the term on a case by case basis.
    Under the final rule for part 2880, we will continue to issue TUPs 
for uses associated with MLA right-of-way

[[Page 20979]]

grants. We disagree with commenters' suggestion that the definition of 
TUPs should not address public safety. The MLA specifically states that 
BLM may issue TUPS to ``protect the natural environment or public 
safety'' (see 30 U.S.C. 185(e)). We also disagree with the commenters 
that said under a TUP there may not be any natural environment to 
protect. The ``natural environment'' is the land for which BLM issues 
the original grant and any attendant TUP, which holders must protect.
    In the final rule we moved the definition of ``tenant'' from 
proposed section 2806.5 to this section. The final rule's definition is 
similar, but more specific, than the previous rule's definition (see 
previous section 2800.0-5(bb)), and is also consistent with the 
proposed rule.
    We use the term ``third party'' in the proposed and final rules. We 
did not define it in the proposal, but do define it in the final rule 
to make clear that BLM considers a third party to be any party aside 
from the applicant, holder, or BLM.
    In the final rule we added a definition of ``tramway'' to eliminate 
confusion over the meaning of the term. One of the right-of-way uses 
FLPMA specifically mentions is tramways (see 43 U.S.C. 1761(a)(6)). BLM 
administers a large amount of timber property in western Oregon and on 
other public lands where the term is commonly used to describe systems 
for transporting and hauling timber from the forest. Previous 
regulations did not define the term and there has been ongoing 
confusion over what type of transportation system qualifies as a 
tramway. Therefore, in the final rule we added a definition of tramway 
that is consistent with common usage of the word and existing policy.
    One commenter said that we should add a definition of ``trespass'' 
to the final rule, while other commenters said that the proposed 
definition of ``trespass'' was too open ended and gave BLM too much 
discretion. In the proposed rule we defined the term ``trespass'' in 
the body of the regulatory text in section 2808.10, as we do in the 
final rule. We disagree with the commenter that the definition of the 
term is too open ended and gives BLM too much discretion. The final 
definition is consistent with previous regulations (see previous 
sections 2800.0-5(u), (v), and (w)) and does not give BLM any more 
discretion than do previous rules.
    Several commenters said that the definition of ``unnecessary and 
undue degradation'' should be changed to ``unnecessary and undue 
damage'' and should not include ``non-willful'' acts. Other commenters 
said that ``degradation'' can mean almost anything and does not provide 
guidance to industry on what to avoid. The term ``unnecessary or undue 
degradation'' is statutory in origin and for that reason we decline to 
change ``degradation'' to ``damage.'' The term appears in section 
302(b) of FLPMA (43 U.S.C. 1732(b) which states that ``In managing the 
public lands the Secretary shall, by regulation or otherwise, take any 
action necessary to prevent unnecessary or undue degradation of the 
lands.''
    In our 1999 proposed rule, we defined the term ``unnecessary and 
undue degradation'' to mean ``surface disturbance that is greater than 
that which would occur when the same or a similar activity is being 
done by a prudent person in a usual, customary, and proficient manner 
that considers the effects of the activity on other resources and land 
uses outside the area of the activity. The disturbance may be either 
willful or nonwillful.'' We have decided to delete this proposed 
definition (and the existing definition at 43 CFR 2800.0-5(x)) because 
we find it to be unnecessary. Issuing a right-of-way grant is a highly 
discretionary act on BLM's part. In final section 2804.26(a), BLM has 
established standards for exercising this discretion. For instance, as 
final section 2804.26 makes clear, an application may be denied if the 
proposed use is not in the public interest or is inconsistent with the 
purpose for which we manage the public lands.
    ``Unnecessary or undue degradation'' sets a standard far less 
stringent that those in section 2804.26. The Secretary, through BLM, 
will continue to observe the ``unnecessary or undue degradation'' 
standard in addressing a right-of-way application and in assessing and 
administering the terms and conditions and conditions of a grant, but 
will allow the facts posed by a particular situation give meaning to 
this phrase.
    In the final rule we moved the definition of ``zone'' from proposed 
section 2806.5 to this section. We amended the definition in the final 
rule to more accurately describe a zone as ``one of eight geographic 
groupings necessary for linear right-of-way rent assessment purposes, 
covering all lands in the contiguous United States.''

Section 2801.6 Scope

    This section explains what these final regulations apply to and 
what the final regulations do not apply to. In this final rule we 
combined proposed sections 2801.7 and 2801.8 into this section. We also 
amended this section by adding new paragraphs (b)(5), (6), and (7).
    We added new paragraph (b)(5) to alleviate the concerns of some 
commenters that this rule would have a negative effect on rights under 
R.S. 2477.
    We added new paragraph (b)(6) to clarify that the right-of-way 
regulations do not apply to existing rights for private reservoirs, 
ditches, and canals established prior to FLPMA under the Mining Act of 
July 26, 1866. We think this clarification will be helpful in 
eliminating any confusion associated with the previous regulatory 
language found in former section 2801.4.
    In the 1866 Act, Congress granted Federal protection for vested 
state law-based water rights and rights-of-way for ditches, canals and 
other structures necessary for the use of water. Under the Act, a 
private party could acquire a right-of-way across Federal lands without 
any action by the government--no application or filing with the 
government was necessary, and no governmental approval was required. 
The right-of-way vested once a ditch or canal was constructed and a 
water right acquired. Once the right-of-way was created, it existed in 
perpetuity and included the right to operate and maintain the ditch, 
canal or conduit within the right-of-way. See, e.g., Utah Power & Light 
v. United States, 243 U.S. 389, 405 (1917); Gorrie v. Weiser Irr. 
Dist., 153 P. 561, 562 (Id. 1915); Perry v. Reynolds, 122 P.2d 508, 511 
(Id. 1942); United States v. Big Horn Land & Cattle Co., 17 F.2d 357, 
366 (8th Cir. 1927).
    Other statutes enacted after the 1866 Act also allowed private 
parties to acquire rights-of-way across Federal lands. Unlike 1866 Act 
rights-of-way, however, these other statutes required government action 
before rights-of-way vested. For example, the Act of March 3, 1891 
required an applicant to file and get government approval of a map 
before the right-of-way vested. The 1891 Act differed from the 1866 Act 
in several other ways, too. Unlike the 1866 Act, the 1891 Act defined 
the physical extent of the right-of-way. In addition, the 1891 Act 
allowed for establishment of rights-of-way for irrigation purposes on 
reserved lands; the 1866 Act did not apply to reserved lands.
    When FLPMA was enacted in 1976, it repealed the existing laws 
governing rights-of-way and replaced them with a single mechanism for 
establishing a right-of-way over the public lands. Section 501(a) of 
FLPMA provides the Secretary of the Interior with authority to ``grant, 
issue, or renew rights-of-way over, upon, under, or through'' the

[[Page 20980]]

public lands. 43 U.S.C. 1761. In addition, FLPMA provides the Secretary 
with authority to impose terms and conditions on these rights-of-way 
that, among other things, ``minimize damage to scenic and esthetic 
values and fish and wildlife habitat and otherwise protect the 
environment.'' Section 505(a); 43 U.S.C. 1765.
    But FLPMA did not terminate rights-of-way established under the 
prior statutes. Instead, FLPMA expressly preserved and protected such 
pre-existing private rights-of-way. Section 701(a) of FLPMA provides 
that FLPMA does not terminate ``any valid lease, permit, patent, right-
of-way, or other land use right or authorization'' existing at the time 
of FLPMA's enactment. 43 U.S.C. 1701, note 1. In addition, section 
701(h) of FLPMA provides that all actions taken by the Secretary in the 
exercise of her authority under FLPMA are ``subject to valid existing 
rights.'' 43 U.S.C. 1701, note 1. Together, these provisions of FLPMA 
ensure that pre-FLPMA rights-of-way are protected and preserved.
    This final rule therefore reflects long-standing law and BLM's 
historical practice by clarifying that 1866 Act rights-of-way are not 
subject to regulation so long as a right-of-way is being operated and 
maintained in accordance with the scope of the original rights granted. 
Because rights-of-way under the 1866 Act are perpetual and do not 
require renewal, no authorization under FLPMA exists or is required in 
the future. Therefore, unless a right-of-way holder undertakes 
activities that will result in a substantial deviation in the location 
of the ditch or canal, or a substantial deviation in the authorized 
use, no opportunity exists for BLM to step in and regulate a right-of-
way by imposing terms and conditions on the right-of-way's operation 
and maintenance. Simply stated, there is no current BLM authorization 
to which such terms and conditions could be attached. Therefore, Title 
V of FLPMA and BLM's right-of-way regulations do not apply to these 
rights-of-way.
    This does not mean, however, that BLM cannot take action to protect 
the public lands when a holder of an 1866 Act right-of-way undertakes 
activities that are inconsistent with the original right-of-way. In 
such a situation, if the right-of-way holder does not approach BLM for 
a FLPMA permit authorizing such activities, FLPMA and BLM's trespass 
regulations provide BLM with the discretion to take an enforcement 
action against the right-of-way holder.
    Title III of FLPMA provides the Secretary of the Interior with 
broad law enforcement authority. Section 302(b) provides that the 
Secretary ``shall * * * take any action necessary to prevent 
unnecessary or undue degradation of the lands.'' 43 U.S.C. 1732(b). In 
addition, section 303(g) provides: ``The use, occupancy, or development 
of any portion of the public lands contrary to any regulation of the 
Secretary or other responsible authority, or contrary to any order 
issued pursuant to any such regulation, is unlawful and prohibited.'' 
43 U.S.C. 1733(g). BLM's trespass regulations, at 43 CFR part 9230, 
specify that, among other things, the ``extraction, severance, injury, 
or removal of timber or other vegetative resources or mineral materials 
from public lands under the jurisdiction of the Department of the 
Interior, except when authorized by law and the regulations of the 
Department, is an act of trespass.'' 43 CFR 9239.0-7. Trespassers are 
liable to the United States in a civil action for damages and may be 
prosecuted under criminal law. Therefore, with respect to 1866 Act 
rights-of-way, Section 302(b) of FLPMA and the trespass regulations 
provide BLM with the authority to take an enforcement action against a 
right-of-way holder undertaking activities inconsistent with the 
original grant.
    We added new paragraph (b)(7) to address statutory changes to the 
Federal Power Act (FPA) and FLPMA. These changes incorporate existing 
policy and implement FPA and FLPMA amendments.
    One commenter stated that the final rule should state if there are 
any rights-of-way outside the scope of the rule and should address 
rights-of-way in wilderness areas or ``short term rights-of-way on 
wilderness lands.'' We did not amend the final rule as a result of 
these comments. However, the final rule explains what the final 
regulations do not apply to and includes language in paragraph (b)(3) 
that states that the regulations do not apply to ``Lands within 
designated wilderness areas, although BLM may authorize some uses under 
parts 2920 and 6300 of this chapter.''

Section 2801.7 Information Collection Matters

    We deleted this section from the final rule because it is not 
necessary to publish this information in the text of the regulations.
    These regulations contain information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.), we submitted a copy of the proposed information collection 
requirements to the Office of Management and Budget (OMB) for review. 
OMB approved the information collection requirements under Control 
Number 1004-0189, which expires October 31, 2005.

Section 2801.8 Severability

    This section explains that if any court holds provisions of these 
regulations invalid, the remainder of the rules are not affected. This 
principle has always applied to BLM regulations, but it is stated here 
for clarity. This section was proposed as section 2801.10. We made 
editorial changes to the section, but its effect is the same as the 
proposed rule.

Section 2801.9 When Do I Need a Grant?

    This section is a combination of proposed sections 2801.7 and 
2801.8. It explains that you must have a grant when you plan to use 
public lands for certain systems or facilities, whether over, under, 
on, or through public lands. The section lists examples of the types of 
systems or facilities that require grants. The section also explains 
additional requirements for rights-of-way for generating, transmitting, 
or distributing energy. Finally, the section provides a cross-reference 
to BLM regulations for rights-of-way for transporting oil and gas 
resources.

Section 2801.10 How Do I Appeal a BLM Decision Issued Under These 
Regulations?

    This is a new section to these regulations. The proposed rule 
listed the basic contents of this section for each action which allows 
a right to appeal. This final rule replaces the appeals language in 
each of those sections with a cross-reference to this section. This 
eliminates redundancy and brings this rule in line with other BLM 
regulations that handle appeals sections in a similar manner.
    We received several comments on the subject of appeals. One 
commenter wanted the regulations to state whether or not applicants had 
the right of appeal if BLM rejected their applications. As a result of 
this comment, we amended final section 2804.26 and it now states that 
applicants have the right of appeal to the Interior Board of Land 
Appeals (IBLA) if BLM denies their applications.
    Several commenters wanted the opportunity for State Director review 
for initial disagreements with BLM before BLM referred the matter to 
the IBLA. One commenter suggested language to accomplish this 
administrative review. Although other BLM programs have adopted these 
reviews, BLM did not add State Director review provisions to this final 
rule. When you appeal a decision to IBLA, BLM is not prohibited from

[[Page 20981]]

reconsidering or discussing the appealed decision with you or other 
interested parties. If BLM decides to rescind or amend the appealed 
decision as a result of additional review or discussion with you or 
other interested parties, we may rescind or amend only after asking 
IBLA to remand the matter for BLM's further consideration and IBLA's 
consent to this request. We encourage BLM personnel, grant holders, and 
applicants to work toward informal resolution of disputes over BLM 
decisions proposed or made by BLM both before and after appeals are 
filed. In BLM's right-of-way program these informal reviews and 
discussions have been and are a useful way to resolve disputes without 
unnecessarily formal mid-level reviews, such as State Director reviews.
    Several commenters said that there is no part 4 in this title. The 
commenters are mistaken. Part 4 of 43 CFR is in a volume separate from 
the volume where BLM's regulations are located. Parts 1 through 999, 
including part 4, are in the first volume of 43 CFR and parts 1000 
through 10010, including BLM's regulations, are in the second volume.

Subpart 2802--Lands Available for FLPMA Grants

    This subpart describes the lands that are available for rights-of-
way and how BLM designates corridors. Generally, BLM designates lands 
as suitable for right-of-way uses through its land use planning 
process, as described in FLPMA and existing regulations at 43 CFR 1610. 
During this process BLM prepares land-use plans, called either 
``resource management plans'' or ``plan amendments.'' After going 
through a process in which the public helps BLM identify issues the 
plan should address, BLM then:
    (A) Identifies resource and information needs;
    (B) Formulates alternatives;
    (C) Analyzes the effects of the alternatives;
    (D) Prepares a draft plan and environmental document for public 
review and comment; and
    (E) Determines what resource and land-use decisions to make in the 
approved plan. Among these decisions are what land uses are available 
for right-of-way grants. Land use plans designate lands as:
    (1) Open to right-of-way grants;
    (2) Right-of-way avoidance areas (where right-of-way grants would 
not be issued unless there were no other available alternatives); or
    (3) Right-of-way exclusion areas where right-of-way grants would 
not be approved for any reason. Land use plans also designate right-of-
way corridors.

Section 2802.10 What Lands Are Available for Grants?

    This section explains that BLM grants rights-of-way for lands under 
its jurisdiction and lists exceptions when we would not issue a right-
of-way grant. These exceptions include instances when a statute, 
regulation, or public land order excluded right-of-way uses, the lands 
are segregated or withdrawn from right-of-way uses, or when BLM 
identifies areas as inappropriate in a land use plan or in an analysis 
of an application. The section explains that BLM may also require 
common use of rights-of-way and may require location of a right-of-way 
within an existing corridor. This section states that BLM will 
designate right-of-way corridors through land use plan decisions. This 
section also suggests that you contact BLM to determine if the lands 
you are considering for a right-of-way are available for right-of-way 
use.
    We added new paragraphs (a)(1), (a)(2), and (a)(3) to the final 
rule to more completely explain the reasons why certain lands under our 
jurisdiction would not be available for a right-of-way use. These new 
provisions to the rule are consistent with the proposed rule, our 
existing regulations at part 2300 (land withdrawals), subpart 2091 
(segregation and opening of lands), and part 1600 (planning, 
programming, and budgeting). We also eliminated the discussion in 
proposed section 2802.10(b) of notifying the public ``by appropriate 
means'' of designated corridors because it was vague and because we 
already require public notification as part of the land use planning 
process.
    Several commenters said that BLM should replace ``may'' with 
``will'' where it appears in proposed paragraphs (a) and (b) of this 
section. We did not make the change to the final rule in either 
proposed paragraph (a) or (b). Issuing a right-of-way grant remains a 
highly discretionary act on our part. Section 501(a) of FLPMA 
authorizes, but does not compel, the Secretary to issue rights-of-way 
over, upon, under, or through the public lands (see 43 U.S.C. 1761(a)). 
Section 503 of FLPMA requires common use of a right-of-way but only 
``to the extent practical'' (see 43 U.S.C. 1763). There may be 
circumstances where BLM determines that it is not in the public 
interest to issue a right-of-way grant or to require common use of a 
right-of-way area even when the lands are open to the development of 
right-of-way grants. Therefore, the final rule continues to leave the 
discretion to issue a grant or require common right-of-way use in BLM's 
hands.
    One commenter said that in paragraph (b) of this section, we should 
replace ``require'' with ``propose.'' We did not change the final rule 
as suggested by the commenter. As noted above, Section 503 of FLPMA 
provides that BLM, to the extent practical, require, not simply 
propose, common use of a right-of-way. BLM is therefore required to 
issue rights-of-way in common where it is practical and replacing 
``require'' with ``propose'' would be inconsistent with the statute.
    One commenter said that BLM must consider the location of existing 
assets and facilities when determining whether land is available. 
Another commenter said that BLM should not require common use of a 
corridor if location in the corridor would render use of existing 
facilities infeasible or burdensome. We agree with the commenters. When 
issuing rights-of-way in common, or requiring that a right-of-way be 
issued in or adjacent to an existing corridor, BLM will consider 
whether or not the uses are compatible. BLM will also consider the 
possible impacts a proposed use may place on the future usability of a 
corridor. In other words, if a proposed right-of-way use would render a 
corridor unavailable for any future right-of-way uses, BLM could decide 
that the proposed use should be located in some alternate location.
    Several commenters suggested inserting ``or'' between 
``regulation'' and ``planning'' in proposed paragraph (a), and deleting 
the rest of the sentence after ``planning.'' Commenters made this 
suggestion because they said environmental and other resource 
conditions should already be addressed in the land management planning 
process. When BLM completes, updates, or amends a land use plan we 
undertake an environmental analysis. However, when a project is 
proposed, BLM will complete a site-specific NEPA analysis. NEPA 
requires the site-specific environmental analysis and it is designed to 
identify how the project-specific activities may impact the 
environment. The planning documents, on the other hand, are more 
general in nature and generally do not and cannot address site-specific 
impacts of a given project. Therefore, we made no changes to the final 
rule as a result of this comment.
    The same commenters recommended that we replace ``require'' with 
``encourage'' in proposed paragraph (b) since access roads, gathering 
lines, and flowlines do not always fit neatly into existing corridors. 
The commenter said

[[Page 20982]]

that such a requirement could render an oil and gas project uneconomic. 
We did not amend this section as suggested by the commenter. As stated 
above, section 503 of FLPMA says that BLM must require common use of 
rights-of-way to the extent it is practical. When determining whether 
it is practical to require a right-of-way to be located in a corridor, 
BLM will consider whether or not the new use will be compatible with 
the existing use. If it is not, BLM will informally work with you to 
determine a right-of-way location that will both protect the public 
interest and meet your needs. These types of issues are best resolved 
during the preapplication meeting.
    One commenter said that the regulations should make clear that 
communication site facility managers and facility owners need to allow 
shared use of a right-of-way for pipelines and communications cables. 
The commenter said that there should be a minimal process for using 
existing pipeline rights-of-way for fiber optic cables and the like. 
The commenter said that this will serve the public and facilitate the 
installation of facilities with minimal damage to BLM lands. We agree 
with the commenter and encourage co-location of fiber optic facilities 
with power line structures and within pipeline rights-of-way. One of 
the advantages of co-locating uses in one right-of-way is that NEPA 
work has already been done for the existing use and therefore the 
amount of additional environmental analysis necessary for any 
additional use would normally be minimal unless the new use is 
significantly different or other reasons apply. BLM currently has a 
categorical exclusion for the granting of rights-of-way wholly within 
the boundary of compatibly developed rights-of-way. Because exceptions 
to this categorical exclusion may apply, BLM will determine the amount 
of analysis and additional work for additional uses on a case-by-case 
basis. The amount of analysis necessary cannot be determined by a rule 
of general applicability, and as a result we did not amend the rule to 
address the comment.
    Several commenters said that once BLM designates corridors in land-
use plans, it should require common use of the corridor and location of 
new rights-of-way within the corridor to the extent possible. The 
commenters said that the proposed regulations give too much discretion. 
As is stated in the proposed rule's preamble (see 64 FR 32118), BLM 
designates right-of-way corridors and issues grants within these 
corridors to the maximum extent possible, but due to resource concerns 
and conflicts between uses, it is not always possible to restrict uses 
to designated corridors. We disagree with the commenters that the 
proposed regulations give BLM too much discretion in issuing grants in 
right-of-way corridors. BLM must have the flexibility to choose whether 
or not a use should be located in a right-of-way corridor to make sure 
uses are compatible and to ensure that the public interest is 
protected.
    Several commenters said that forcing the use of corridors will make 
lease operations uneconomical and result in a waste of minerals and 
associated royalties from the public good. BLM agrees that the 
designation of a corridor in a land use plan can impact, in some cases, 
the development of mineral resources. The land use planning process 
described above assures that our analysis considers effects on other 
resource uses such as impacts to mineral extraction. It is frequently 
these same mineral extraction interests that need right-of-way 
corridors to support the transportation of materials to and from their 
operations. We made no changes to the final rule as a result of this 
comment.
    One commenter said that requiring common use of a right-of-way may 
be unpractical, for safety considerations, in designing power lines. 
BLM considers issues of safety when requiring common use of a right-of-
way. If BLM determines that common use of a right-of-way is unsafe, BLM 
will not require it.

Section 2802.11 How Does BLM Designate Corridors?

    This section explains that BLM may designate corridors during the 
land use planning process described in 43 CFR 1610. During this process 
BLM coordinates with other Federal agencies, state, local, and tribal 
governments, and the public to identify resource-related issues, 
concerns, and needs. The process results in a resource management plan 
or plan amendment, which addresses to what extent you may use public 
lands and resources for specific purposes. It also explains the factors 
that BLM considers when determining the locations and boundaries of 
right-of-way corridors.
    Paragraph (a) is new to the final rule and generally explains how 
we designate corridors in our land use planning process, which is 
discussed in greater detail in subpart 1610 of existing regulations. 
This provision provides helpful background to an understanding of 
paragraph (b). Final paragraph (b) lists the factors BLM considers when 
designating corridors. Final paragraphs (c) and (d) are new to this 
final rule and are consistent with section 503 of FLPMA and existing 
policy.
    Several commenters said that this section should identify how 
corridors are designated. The commenters also said that the process of 
designation through the land planning process or as provided by section 
503 of FLPMA also needs to be briefly described. Proposed and final 
section 2802.11 identify the factors BLM considers when designating 
corridors. Therefore, the regulations already address the first part of 
the comment. As for the second part of the comment, we do not believe 
these rules should address the land use planning process since BLM's 
existing regulations at subpart 1610 already address the process and it 
is not necessary to repeat those regulations here. Final paragraph (a) 
of this section explains that as part of the planning process under 
subpart 1610, BLM designates corridors. You can find additional 
information about the land use planning process in section 202 of FLPMA 
(see 43 U.S.C. 1712).
    Several commenters said that the regulations should emphasize the 
advantages of reduced NEPA requirements, processing time, and costs 
that could occur through requiring common use of existing or designated 
corridors. We agree with the commenters that common use of rights-of-
way and proper corridor planning and use can lead to reduced processing 
times and decreased costs. However, we do not believe it appropriate to 
discuss motivating factors for using corridors in our implementing 
regulations. Discussions about cost savings and processing time can 
occur during the preapplication meetings discussed elsewhere in this 
final rule.

Subpart 2803--Qualifications for Holding Grants

    This subpart describes the qualifications necessary for applicants 
to receive right-of-way grants. It discusses:
    (A) Who may hold a FLPMA grant;
    (B) Whether another entity can act on a grant holder's behalf; and
    (C) What happens to a grant if the holder dies.

Section 2803.10 Who Can Hold a Grant?

    This section explains the qualifications for holding a grant and 
requires that you are:
    (A) An individual, association, corporation, partnership, or 
similar business entity, or a Federal, state, tribal, or local 
government;
    (B) Technically and financially able to construct, operate, 
maintain, and terminate the grant; and

[[Page 20983]]

    (C) Of legal age and authorized to do business in the state where 
the right-of-way would be located.
    This section is essentially the same as that proposed, except that 
we added a new paragraph (c) stating that you must be of legal age and 
authorized to do business in the state where the right-of-way is 
located. Although this provision was not in the proposed rule, it is 
consistent with previous section 2802.3(a)(5).
    One commenter asked if BLM is authorized to issue grants to foreign 
entities and if so, what the qualifications are. FLPMA is silent on the 
subject of whether BLM may issue a FLPMA grant to foreign entities. The 
part 2800 regulations are similarly silent. Regarding MLA requirements, 
however, 30 U.S.C. 185(a) makes the qualifications provisions of 30 
U.S.C. 181 applicable to section 185. The part 2880 regulations reflect 
these considerations. For example, final section 2883.10 states in 
part:

    To hold a grant or TUP [temporary use permit] under these 
regulations, you must be a United States citizen, an association of 
such citizens, or a corporation * * * organized under the laws of 
the United States, or of any state therein.

    As in previous section 2802.3(a)(5), final section 2803.10 requires 
all entities seeking a right-of-way grant under FLPMA to be qualified 
to do business in the state where the right-of-way is located. Thus 
state law must be examined to determine the eligibility of a right-of-
way applicant. Final section 2803.10 is substantially the same as 
previous regulations.

Section 2803.11 (Proposed) Must I Submit Proof of My Qualifications 
With My Application?

    Due to reorganization, we moved the substance of this proposed 
section to paragraph (b) of final section 2804.12. Please see that 
section for a discussion of this matter.

Section 2803.11 (Final) Can Another Person Act on My Behalf?

    This section allows another person to act on your behalf if you 
have authorized the person to do so under the laws of the state where 
the right-of-way would be or is located. This section is slightly 
different from what we proposed in that the final rule requires that 
you follow the laws of the state where the right-of-way would be or is 
located. We believe this is reasonable, consistent with the intent of 
the proposed rule, but most importantly, it sets the appropriate legal 
standard.

Section 2803.12 What Happens to My Grant If I Die?

    This section explains that if an applicant or grant holder dies, 
any inheritable interest in an application or grant will be distributed 
under state law. In this rule, the term ``inheritable'' is not used in 
its technical sense. Here, it refers to property passing by will or 
intestate succession.
    If the distributee of a grant is not qualified to hold a grant 
under section 2803.10, BLM will recognize the distributee as grant 
holder and allow the distributee to hold its interest in the grant for 
up to two years. During that period, the distributee must either become 
qualified or divest itself of the interest. We added this provision to 
the final rule to make sure we have consistent processes in place for 
cases where an applicant or a grant holder dies.

Subpart 2804--Applying for FLPMA Grants

    This subpart contains information and policies concerning how to 
apply for right-of-way grants under FLPMA. It discusses:
    (A) Where applicants should file their applications;
    (B) What information BLM needs to process their applications;
    (C) Filing fees for the various categories of applications;
    (D) Exemptions from paying filing fees and criteria for 
establishing reasonable costs; and
    (E) How BLM processes applications, including a customer service 
standard.

Section 2804.10 What Should I Do Before I File My Application?

    This section encourages you to schedule a preapplication meeting 
with BLM to discuss your right-of-way grant application. This section 
also explains that we may share any information you provide to us at 
this initial meeting with other agencies to help us to better 
coordinate the application process. Final section 2804.13 provides that 
we will keep confidential any information you submit that you identify 
as such, to the extent allowed by law.
    We received no substantive comments on this section and except for 
editorial changes, it remains as proposed.

Section 2804.11 Where Do I File My Grant Application?

    This section explains where you must file your right-of-way grant 
application.
    We received no substantive comments on this section and except for 
editorial changes, this section remains as proposed.

Section 2804.12 What Information Must I Submit in My Application?

    This section explains the information you must include in your 
application. It requires you to file your application on Standard Form 
299 and fill in the required information. This includes a description 
of the project, a project schedule, the estimated life of the project, 
and construction and reclamation techniques. You must also include a 
map of the project, a statement of your financial and technical ability 
to run the project, and any plans, contracts, and agreements concerning 
the proposed use(s) on the right-of-way and its effect on competition. 
We require a complete proposed project description to process the 
application, to complete an accurate NEPA analysis, and to make a 
determination whether the proposed use(s) indicate existing or 
potential competitive interest. BLM requires materials such as plans, 
contracts, agreements, etc., only if they have a direct bearing on the 
proposed right-of-way uses. Section 501(b)(1) of FLPMA (and this final 
rule at section 2804.12(a)(6)) requires a right-of-way applicant to 
submit and disclose plans, contracts, agreements, or other information 
reasonably related to the use, or intended use, of a proposed right-of-
way, ``including its effect on competition,'' which the Secretary deems 
necessary. BLM typically relies on application filing activity as the 
indicator of competitive interest, but may also examine the plans, 
contracts, and other information supplied by an applicant to make a 
determination on competitive interest. We usually process applications 
on a first come-first serve basis, unless:
    (A) Application activity indicates there is a competitive interest; 
or
    (B) Planning decisions, applicant plans, contracts, agreements, or 
other information indicate there is a competitive interest.
    This section also requires business entities to submit additional 
information about their business. Paragraph (b) of this section was 
proposed as section 2803.11. BLM requires the information in paragraph 
(b) to verify the legal status of applicants, including verification 
that the persons representing the applicant are authorized to do so. 
Under this paragraph a business entity must submit copies of the formal 
documents creating the entity and evidence that the party signing the 
grant application has authority to act on the business entity's behalf. 
To make it clearer, this final rule uses different terminology than the

[[Page 20984]]

proposed rule, but the effect of this final rule is the same as that 
proposed.
    This section also informs you that if you are an oil and gas lessee 
or operator, and you need a right-of-way for access to your production 
facilities or oil and gas lease, you may include your right-of-way 
requirements in your Application for Permit to Drill or Sundry Notice. 
This improves processing and is consistent with existing policy.
    One change from proposed section 2804.12 is our deletion of ``On 
the form, give your name and address and the name and address of any 
authorized agent * * *'' from the second sentence of proposed paragraph 
(a). We did this because the form itself requires you to submit this 
information and therefore these words are redundant. In final paragraph 
(a)(2), we added ``operating'' and ``terminating'' the project to the 
list of things you need to address in your application to ensure that 
you describe a proposed project completely. As a result of these 
changes, final paragraph (a)(2) now includes all phases of a proposed 
project.
    In final paragraph (a)(4), the term ``facilities'' replaces the 
term ``improvements.'' We made this change to make this section 
consistent with the rest of the rule and because the definition of 
``facility'' includes structures and improvements.
    In final paragraph (b)(4), we added text concerning identification 
of the number and percentage of any class of voting shares of the 
entity which certain shareholder(s) are authorized to vote. This makes 
final paragraph (b)(4) consistent with business entity qualification 
requirements in section 501(b)(2)(B) of FLPMA and previous section 
2882.2-1(b)(2). We made the same type of change in final paragraphs 
(b)(6) and (b)(7) by adding ``directly or indirectly,'' to be 
consistent with business entity requirements in section 501(b)(2)(C) of 
FLPMA and previous section 2882.2-1(b)(3) and final section 2883.12 of 
this rule. Also, in final paragraph (d) of this section we corrected 
the citation to BLM's oil and gas operating regulations.
    One commenter said that proposed section 2804.12(a)(6) is vague. 
The commenter also said that we should define ``competition'' in the 
final rule. Section 501(b)(1) of FLPMA requires a right-of-way 
applicant to submit and disclose those plans, contracts, agreements, 
and other information reasonably related to the use, or intended use, 
of the right-of-way, ``including its effect on competition.'' As 
discussed above, BLM typically relies on application filing activity to 
determine whether competition exits, but we may also ask an applicant 
for additional information concerning the proposed right-of-way to 
verify whether competitive conditions exist. We believe that adding a 
definition of competition to this regulation would not add any new or 
useful information to the common understanding of the word, and 
therefore did not add a definition of the term.
    Several commenters said the final rule should provide for 
applicant-prepared Environmental Assessments and third-party prepared 
Environmental Impact Statements. The commenters said this practice is 
authorized by Council on Environmental Quality (CEQ) regulations at 40 
CFR 1506.5. Environmental documentation (resource surveys and reports, 
environmental assessments, and environmental impact statements) 
prepared by third parties or provided by right-of-way applicants is a 
well-established and common practice under existing BLM NEPA guidance 
in H-1790-1. Chapter V-B.1.h, states contracting may be used for 
preparation of an environmental impact statement (EIS) or for certain 
analyses to support preparation of an EIS and that either standard 
Federal contracting procedures or third-party contracting approaches 
may be followed. H-1790-1, Appendix 7.B. further clarifies that a 
third-party contract is an option when BLM cannot prepare a required 
NEPA analysis due to time, budget, or other limitations or when either 
the BLM or the applicant requests that a contractor be hired to prepare 
the EA or EIS. Therefore, adding this guidance to the final rule would 
be repetitive and unnecessary.
    We also agree with the commenters that under CEQ rules the practice 
is acceptable. Although this practice is not specifically restated in 
the final rule under section 2804.12, this option remains available to 
applicants. BLM will consider environmental documentation offered by or 
agreed to by an applicant in determining the appropriate cost recovery 
category under section 2804.14. The environmental documentation, 
however, must meet BLM standards, and any conclusions drawn from the 
documentation remain BLM's jurisdiction. This final rule contains no 
provision to either discourage or prohibit applicants from providing 
environmental documentation for BLM to use to determine appropriate 
cost recovery categories and process applications more efficiently and 
timely.
    Several commenters said that the final rule should make clear that 
the additional information allowed under paragraph (c) of this section 
should be limited to requests for ``relevant'' information or all 
``pertinent'' information, and any requirements in the regulations to 
ask for more information is ``too broad and open-ended,'' and could 
result in limitless requests for additional information. Final section 
2804.12(c) states that BLM can require an applicant to provide 
additional information at any time while processing an application. The 
comment implies that BLM could require information not relevant to 
evaluating an application. We disagree. BLM will implement this 
provision in a common sense manner, limiting requests to only that 
additional information that is both relevant and necessary for BLM to 
properly evaluate a right-of-way proposal and to process an application 
in an efficient and timely manner.
    Examples of the type of information we may require are provided by 
a reference to final section 2884.11(c).
    Several commenters objected to the requirement to give BLM a plan 
of development and stated that it is overly burdensome, expensive, and 
unnecessary. Final section 2804.25(b) does not require submission of a 
plan of development as a universal requirement for all applicants. BLM 
would require a plan of development only where detailed information 
about a proposed right-of-way development and use is both relevant and 
necessary for BLM to properly analyze a proposal and render a decision. 
This is consistent with proposed sections 2804.20(b).
    A few commenters said that BLM should require an applicant to 
provide an ``initial environmental assessment'' as part of the 
application since that would enable BLM, other Federal agencies, and 
state governments to better assess impacts on endangered species, 
cultural resources, and the like. BLM disagrees with the commenter and 
we did not amend the final rule as a result of this comment. Because we 
receive a wide range of applications in terms of scope and impact, we 
believe that a universal requirement that all applicants be required to 
submit environmental studies would be inappropriate. However, under 
this final rule, applicants may continue to volunteer such information 
to facilitate the processing of an application. Under final sections 
2804.12(c) and 2804.25(b), BLM may require an applicant to provide this 
type of information if we determine it is necessary to process an 
application.

[[Page 20985]]

Section 2804.13 Will BLM Keep My Information Confidential?

    This section makes it clear that BLM will keep confidential any 
information in your application that you mark as ``confidential'' or 
``proprietary'' to the extent allowed by law.
    We amended this section slightly by replacing ``to the extent 
allowed under the Freedom of Information Act (5 U.S.C. 552)'' with ``to 
the extent allowed by law'' to be consistent with other BLM 
regulations. We received no substantive comments on this section.

Section 2804.14 What Is the Processing Fee for a Grant Application?

    This section requires you to submit a processing fee for a right-
of-way grant application before BLM incurs the costs to process your 
application.
    This final rule changes the terminology describing this fee. In the 
proposed rule we used the phrase ``filing fee'' to describe the fee. 
The final rule uses the phrase ``processing fee'' because that term 
more accurately describes the fee.
    We added a new provision to paragraph (b) of this section which 
explains that there is no fee if BLM takes one hour or less to process 
your application. We believe that the minimal costs involved to process 
an application requiring one hour or less of work does not justify 
charging a fee.
    We added a provision at final section 2804.14(f) that we 
inadvertently omitted from the proposed rule. This provision allows 
applicants to pay full actual costs for processing applications and 
monitoring grants. Although FLPMA requires the Secretary to consider 
the factors at section 304(b) of FLPMA in determining reasonable fees, 
and these regulations provide for that, BLM has found that some 
applicants prefer to pay actual processing and monitoring costs to 
assist us in processing their applications in a more timely manner. 
This rule is consistent with previous section 2808.3-1(f) and section 
307(c) of FLPMA (43 U.S.C. 1737(c)). Section 307(c) allows the 
Secretary of the Interior to ``accept contributions or donations of 
money, services, and property, real, personal, or mixed, for the 
management, protection, development, acquisition and conveying of the 
public lands * * *.''
    BLM has not increased processing fees since publication of its 
final rule in July 1987. Since January 1986, the Consumer Price Index 
for All Urban Consumers (CPI-U) has risen by an average annual rate of 
about 3.83 percent or a total of about 73 percent. The Implicit Price 
Deflator, Gross Domestic Product (IPD-GDP), has risen by an average 
annual rate of about 2.88 percent or a total of about 55 percent.
    A 1995 audit of BLM's cost recovery efforts by the OIG found BLM 
was not recovering all the costs of processing applications and 
recommended that BLM revise its regulations to recover all applicable 
costs and to provide for adjusting processing costs on an annual basis 
to reflect changes in economic conditions. The audit estimated that BLM 
incurred about $640,000 in additional expense in excess of the fees 
collected in 1993. (This shortfall comes to $213 per application, or 
$800,000 and $336 respectively when adjusted for changes in the IPD-
GDP.) Since section 504(g) of FLPMA requires that BLM set these costs 
by regulation and the current regulations contain fixed charges, BLM 
must revise the regulations to revise the processing fees. The final 
rule will establish a mechanism to adjust the processing fees on an 
annual basis to reflect changes in economic conditions.
    The preamble to the proposed rule at 64 FR 32107 states that BLM 
conducted field studies in 1982 and 1983 which measured the costs of 
processing right-of-way applications and monitoring grants. Between 
November 12, 1982, and July 25, 1986, BLM field offices kept and 
reported actual time and cost on some 500 right-of-way projects in non-
major categories (see 51 FR 26840 (July 25, 1986)). In 1986, the agency 
conducted an extensive field study of processing and monitoring costs, 
which generally verified the processing costs developed from the 
earlier studies (see 64 FR 32108).
    When we set the MLA processing fees in 1985 (50 FR 1308, Jan. 10, 
1985) and in the proposed rule, we set fixed MLA processing and 
monitoring fees at our estimated actual cost, as required by section 28 
of the MLA. The preamble to the rule proposing MLA cost recovery fees 
in 1983 makes plain that the fees were developed by a BLM task force 
consisting of employees with expertise in the processing and monitoring 
of right-of-way cases, budgeting, and cost accounting. The task force 
analyzed data from a representative sample of actual right-of-way cases 
and examined several demographic variables which might influence cost, 
including location and area of the right-of-way or temporary use area. 
Fees were based on the estimated work effort required to accomplish the 
processing actions, including personnel costs, fringe benefits, vehicle 
usage, and indirect costs (see 48 FR 48478, 48479 (Oct. 19, 1983) and 
64 FR 32108 (June 15, 1999)).
    In 1995, BLM program experts analyzed a cross section of our right-
of-way cases. This analysis showed that the cost of processing right-
of-way cases, including labor costs, had increased since 1986 at 
approximately the same rate as the IPD-GDP. Therefore, the final rule 
adjusts costs upward based on the IPD-GDP and allows for automatic 
adjustments based on this indicator. However, in the final rule we also 
made several other adjustments in the proposed rule fee schedule, in 
response to comments, which affect the final amounts and number of 
categories for both the processing and monitoring schedules.
    The proposed rule requested public comment (see 64 FR 32108) on 
whether BLM should adopt a ``Minimum Impact'' category similar to the 
one proposed by the U.S. Forest Service. We received several comments 
suggesting BLM establish a minimum impact processing fee category or a 
category for any action which might take from 1 to 8 hours to process, 
such as most assignments and many renewals. We agree that some right-
of-way actions can be accomplished in less than eight hours, but saw no 
benefit in referring to the category as the ``minimal impact 
category,'' or restricting the category to only work on assignment and/
or renewal applications. Therefore, in the final rule, BLM establishes 
a new processing and monitoring category (Category 1) for all right-of-
way actions where we spend more than one hour, but less than or equal 
to eight hours, processing the application or monitoring the grant, but 
we did not use the ``minimal impact category'' title.
    In the final rule we increased the number of processing categories 
to six from four, adding a Category 1 for processing routine 
applications that require greater than one hour and less than or equal 
to 8 hours to process, as just discussed, and another category for 
processing Master Agreements. Under the final rule no fee is assessed 
for any action that takes 1 hour or less to process. We then adjusted 
new Category 2 to include actions that are estimated to take a maximum 
of 24 hours but greater than eight hours. New Categories 3 (>24 hours 
<= 36 hours) and 4 (>36 hours <= 50 hours) are the same as proposed 
Categories II and III. Category 5 in the final rule is for Master 
Agreements only. The proposed regulations did not contain a 
specifically numbered category for Master Agreements, and in this final 
rule BLM gave these agreements their own category number. Category 6 in 
the final rule (Category IV in the proposed rule) is for processing 
applications where the estimated work hours are greater than 50.

[[Page 20986]]

    For Processing Categories 1 through 4, labor costs are by far the 
largest percentage of processing costs. Costs associated with 
environmental analysis and other application processing steps for these 
categories are predominantly labor costs. The costs of supplies, 
printing, fuel, and lodging are relatively small. For Processing 
Category 5 and 6 applications, the extent of the required environmental 
analysis is usually an important factor in determining processing 
costs, particularly if the application requires an EIS. Processing 
costs for Category 5 and 6 applications are, however, worked out in 
advance between BLM and the applicant either through a Master Agreement 
or a detailed accounting of work hours spent on processing an 
application.
    In the proposed rule we used the term ``field examination'' in the 
category definitions and defined it in section 2801.5 of this part. In 
the final rule we eliminated this term and instead based the categories 
on the number of Federal work hours needed to process the document or 
request. We made this change for Categories 1 through 4 because the 
non-labor costs are relatively insignificant compared to labor costs, 
and for Categories 5 and 6 because the non-labor costs are considered 
as part of a Master Agreement or are otherwise negotiated. As used in 
the proposed rule, field examinations conducted during the processing 
of applications included the time and travel costs for BLM personnel. 
Because, as explained, labor costs constitute nearly all costs 
associated with field examinations, we decided to measure costs by work 
hours.
    For processing and monitoring fees that we collect under FLPMA, we 
are required to consider the ``reasonableness'' factors at section 
304(b) of FLPMA. These factors are:
    (1) BLM's actual costs to process an application, including 
monitoring construction, operation, maintenance, and termination of a 
facility authorized by a right-of-way grant. Actual costs do not 
include management overhead, which means costs of BLM State Directors 
and Washington office staff, except when a member of this group works 
on a specific right-of-way application or grant. Actual cost includes 
both direct and indirect costs and other costs such as money spent on 
special studies, environmental impact statements and other analysis, 
and monitoring activities. We estimated actual cost figures for each 
category using data from the studies described previously. Where an 
appraisal is necessary to calculate rent for a right-of-way, such costs 
may be included in actual costs;
    (2) The monetary value, or objective worth, of the right-of-way or 
what the right-of-way grant is worth in financial terms to the 
applicant. The preamble to the proposed rule at 51 FR 26837 (July 25, 
1986) sets forth a number of ways to estimate monetary value, such as 
computing residual return or the residual profit of the project. 
Monetary value can be an enhancing factor when that value is greater 
than BLM's processing costs. This enhancing factor may offset a 
diminution caused by another of the ``reasonableness'' factors, such as 
public service provided. In considering and applying this factor since 
1987, we have noted that the monetary value of the right or privilege 
sought has been much greater than the processing cost;
    (3) The efficiency with which BLM processes an application. This 
factor refers to BLM's ability to process an application with a minimum 
of waste by carefully managing agency expenses and time. An explanation 
of this factor is set forth at 51 FR 26838 (July 25, 1986). Among the 
considerations there is the establishment of a cost recovery process 
that does not cost more to operate than would be collected under the 
process. Charging fixed fees based on the number of Federal work hours 
necessary to process an application benefits applicants by informing 
them in advance what the fee will be, and eliminates the enormous time 
and expense that would be required to track the processing of each 
document on a case-by-case basis. The use of current average costs to 
set a fee schedule is a commonly accepted practice in both the private 
and public sectors (see 50 FR 1309 (Jan. 10, 1985) (preamble to the 
final rule setting fees for MLA rights-of-way). Our application 
processing and grant administration procedures, which are based on 
standard steps in internal BLM Manuals and Handbooks, are reasonably 
efficient;
    (4) Costs incurred for the benefit of the general public interest 
rather than for the exclusive benefit of the applicant. Under this 
factor, we examine whether any of the costs for such things as studies 
and data collection have value to the Federal Government or the general 
public apart from processing the application. Courts have held that 
processing which an agency is required to perform in connection with a 
specific request (for example, before approving a permit or grant) 
provides a special benefit to an applicant, even if it also provides 
some benefit to the public. (See, e.g., Mississippi Power & Light Co. 
v. United States Nuclear Regulatory Comm'n, 601 F.2d 223 (5th Cir. 
1979), cert. denied, 444 U.S. 1102 (1980)). In our preamble to proposed 
rules at 51 FR 26840 (July 25, 1986), we stated that for non-major 
projects, there is little opportunity for public benefits or public 
services because of the local nature of such projects. We find, in 
practice, that any small benefit to the public provided by the 
processing of fixed-fee right-of-way applications is speculative and 
outweighed by the monetary value to the applicant of the right or 
privilege sought. Major categories 5 and 6 present more opportunities 
for public benefits;
    (5) Any tangible improvements, such as roads, trails, recreation 
facilities, or other direct services to the public, which provide 
significant public service and are expected in connection with 
constructing and operating the project. This is referred to in section 
304(b) of FLPMA as ``public service.'' A negative factor, such as an 
adverse impact on wildlife or surface drainage, may prevent an 
improvement from being a public service. Data collection that we need 
to monitor an activity is not a public service. As mentioned above, for 
non-major projects such as those falling in categories 1 through 4, 
there is little opportunity for public service in such projects. If a 
project provides a small public service, it will usually be outweighed 
by the monetary value to the applicant of the right or privilege; and
    (6) Other relevant factors (see section 2804.21 of the final rule). 
This factor allows BLM State Directors to reduce actual processing 
costs based on a wide range of special circumstances, including unique 
instances of public benefits or services. These reductions generally 
fall under the broad category of ``hardship,'' that is, paying full 
actual costs would create an undue hardship on the applicant. There are 
an insignificant number of applications (less than 1 percent of the 
total processed) where ``other relevant factors'' can be applied.
    In our proposed rule at 64 FR 32110, we acknowledged that ``[f]or 
all but complex projects * * * the reasonability factors have little or 
no effect on actual costs.'' The final rule reflects this conclusion. 
Thus, for categories 1 through 4, processing and monitoring fees under 
FLPMA are identical to the analogous category under the MLA. (As noted 
above, MLA fees are based on actual costs.) For example, a category 2 
processing fee under FLPMA is identical to a category 2 processing fee 
under the MLA. A category 3 monitoring fee under FLPMA

[[Page 20987]]

is identical to a category 3 monitoring fee under the MLA.
    We were aided in this analysis by a 1996 Solicitor's Opinion on 
cost recovery (M-36987), entitled ``BLM's Authority to Recover Costs of 
Minerals Document Processing.'' That opinion clarified that ``[a] 
factor such as `the monetary value of the rights or privileges sought 
by the applicant' could, when that value is greater than BLM's 
processing costs, be weighed as an enhancing factor, offsetting a 
diminution due to another factor such as `the public service provided' 
'' (see M-36987 at 36). Major categories 5 and 6 are more likely to 
reflect differences in FLPMA and MLA fees.
    In the final rule, we define each processing and monitoring 
category by the estimated number of Federal work hours necessary to 
process or monitor the application/grant rather than a combination of 
criteria (number of hours, availability of data, number of field 
examinations, and need for land use plan amendment) which in the 
proposed rule were used to define all the categories (except the Master 
Agreement category). In doing so, it was necessary to determine a 
``mean hour'' or average number of hours for processing or monitoring 
for each category, and then apply the appropriate cost figure to the 
mean hour in each FLPMA or MLA category. This ensures that each 
category is cost-weighted the same. For example, the mean hour for 
Category 1 is 4.5; for Category 2 the mean hour is 16; for Category 3 
the mean hour is 30; and for Category 4 the mean hour is 43.
    The next step in arriving at the cost recovery fees in the final 
rule was to determine the ``mean per hour rate or cost figure'' for 
FLPMA and MLA processing and monitoring categories. In this final rule 
Category 4 (which in the proposed rule was Processing Category III) was 
used as the basis for determining the mean per hour rate for all 
categories. We determined that a mean per hour rate of $21.46 was 
appropriate. Multiplying the mean hour for each category by the mean 
per hour rate gives the fee for each category.
    The following brief analysis verifies the appropriateness of the 
above fees:
    The $21.46 mean per hour rate for processing and monitoring fees 
would approximately equal the hourly wage in 2005 for an employee at 
the GS 9, Step 3 level.
    These rates compare favorably with the 1987 processing fees which, 
if adjusted to a mean per hour rate, would average $11 per mean hour or 
an hourly wage earned by an employee in 1987 (when the existing rule 
was published) at the GS 9, Step 2 level (according to the 1987 General 
Schedule).
    Most right-of-way actions are processed and monitored by employees 
who are at the GS 9 to GS 11 levels and who will earn between $20.02 
(GS 9/1) and $31.48 (GS 11/10) per hour in 2005.
    Several commenters pointed out that reasonable costs criteria only 
apply to FLPMA rights-of-way and that the MLA requires BLM to collect 
actual costs. A few commenters said that we should amend the final 
regulations to make it clear that the applicant and BLM must agree on 
what are reasonable costs and that the applicant must have the ability 
to monitor BLM to make sure it is following the agreement. We received 
similar comments on the MLA right-of-way regulations.
    Sections 304(b) and 504(g) of FLPMA require that right-of-way cost 
recovery fees represent reasonable costs. BLM's process to identify 
reasonable cost recovery fees has been in place since 1987 (see 
previous subpart 2808). This final rule continues to identify 
reasonable costs using cost recovery categories for a right-of-way 
grant under FLPMA. BLM must apply the factors at section 304(b) of 
FLPMA unless the applicant chooses to pay the actual costs. Likewise, 
the MLA requires that we collect ``administrative and other costs'' 
incurred for processing applications under that statute (30 U.S.C. 
185(l)). Under the previous rule, and this final rule, BLM determines 
in a processing fee schedule the cost recovery fees for Categories 1 
through 4. We will determine cost recovery fees in the new Category 5 
(Master Agreement) through a negotiated agreement between the applicant 
and BLM, as the comment suggests. All parties have generally accepted 
the process of identifying set fees in Categories 1 through 4 (and 
their corresponding categories in the previous regulation) as 
reflecting average reasonable costs for processing applications in 
those categories. The same applies for the MLA right-of-way regulations 
at section 2884.12 of this final rule. Although BLM determines whether 
an application falls into Category 6, the decision typically reflects 
an agreement between an applicant and BLM based on communication and 
cooperation. We also added a definition of ``actual costs'' to section 
2801.5 to help explain the difference between actual and reasonable 
costs.
    The previous regulations contained no provision for applicants to 
monitor BLM in its determination of cost recovery fees, whether by 
decision or agreement, and such a provision is unnecessary in this 
final rule. BLM's internal management reviews and periodic Inspector 
General and Government Accounting Office audits ensure that BLM is 
following proper procedures based on law, our regulations, and internal 
guidance. The final rule contains provisions for appeals in the case of 
disagreement with a BLM cost recovery decision (section 2804.14(d)), 
and for consideration of hardship and other factors under section 
2804.21(a).
    Several commenters said that BLM should make cost adjustments based 
on the reasonable or actual processing costs from the previous year 
rather than basing it on the IPD-GDP or any other economic index. 
Previous section 2808.3-1, which established cost recovery fees in 
1987, had no provision to make annual adjustments in its Categories I 
through IV. The preamble to the proposed rule explained BLM's 
determination that periodic adjustment of the fees was reasonable, and 
included consideration of various ways to accomplish it. This final 
rule uses the IPD-GDP as the basis for making annual adjustments in the 
new Categories 1 through 4.
    We evaluated the question of annual indexing while preparing the 
1987 final rule and have used the IDP-GDP since August 1987 to make 
annual adjustment to right-of-way rent schedules under previous section 
2803.1-2(c)(1)(ii). Following consideration of various alternatives, 
and consultation with the Department of Commerce, BLM determined that 
applying this known and generally accepted economic indicator is the 
most efficient method of ensuring that processing category fees adjust 
with changes in economic conditions. Conducting annual reviews and 
analyses of the prior year processing costs would be a time and labor 
intensive effort, which, considering the widely accepted use of 
economic indicators to make these kind of adjustments, we have 
determined is unnecessary. BLM continues to believe that the IPD-GDP is 
the appropriate method for annual indexing of processing fees because 
it reflects a heavily labor-based activity (see 64 FR 32109 and 32110) 
and we retained it in the final rule.
    One commenter said that BLM should make it clear that we may enter 
into a Master Agreement at the applicant's option, but that BLM has 
approval authority over the final agreement. The commenter said the 
proposed rule suggests that entering into a Master Agreement could be 
done entirely at the option of the applicant. We made the rule clearer 
by defining a Master Agreement as a written agreement

[[Page 20988]]

negotiated between BLM and an applicant to document cost recovery and 
other aspects of how application(s) are to be processed. Master 
Agreements are, under the right conditions, available to applicants, 
but it requires agreement between BLM and the applicant, and is not at 
the sole option of either party. Final section 2804.18(b) makes it 
clear that BLM will not enter into a Master Agreement if it is not in 
the public interest.
    Several commenters said that in determining the processing costs, 
BLM should consider reducing fees in cases where the applicant does a 
considerable amount of work that benefits the public, such as 
archaeological collection and mitigation. We agree with the commenter 
that BLM may consider beneficial work performed by an applicant, such 
as archaeological collection above and beyond what is required, in 
determining whether fees might be reduced. BLM can consider such 
factors under final section 2804.21(a)(7), which allows consideration 
of appropriate management of public lands and the applicant's equitable 
interest. We do not agree that BLM should consider reducing fees due to 
mitigation the applicant undertakes. Mitigation addresses the 
consequences of the project; it is not equivalent to, for example, a 
public service provided by a project.
    Several commenters suggested that the final rule should require 
automatic yearly processing fee adjustments for inflation and that BLM 
should review the categories every ten years. We agree with the 
commenters. Final section 2804.14(c) uses the IPD-GDP to make annual 
adjustments and a new section 2804.15 provides that BLM will reevaluate 
the processing fees for each category, and the categories themselves, 
five years after the effective date of this final rule, and then every 
10 years after that.
    Many commenters supported adding a minimal impact cost recovery 
category. As discussed above, this rule does not add a category 
specifically called a ``minimal impact cost recovery'' category. 
However, this final rule establishes a new cost recovery Category 1 for 
any right-of-way action requiring more than one hour, but less than or 
equal to eight hours to process. The Forest Service plans to adopt a 
similar category to replace the ``minimal impact category'' found in 
its proposed rule.
    One industry group thought we should include a minimum impact 
category in the processing fee regulations to take into consideration 
activities such as emergency access for repair of facilities damaged by 
a storm or other disaster. We did not revise the rule in response to 
this comment, because activities necessary to ensure safe and reliable 
right-of-way use are normally provided for by the grant, and would be 
considered within the scope of the authorized use. If maintenance or 
emergency activities are not within the scope of an existing grant, the 
proposed use would require a separate application. Under section 
2804.21(a)(4) of this final rule, if you include relevant information 
in your application, the BLM State Director will consider, in 
determining your processing fee, whether you need a right-of-way grant 
to mitigate certain damages or hazards. We encourage applicants to 
include provisions for emergency use or maintenance in the original 
grant so as to avoid having to apply for the use separately.
    One commenter said that there is no reason to charge a fee for less 
than eight hours of work. We disagree. Section 504(g) of FLPMA requires 
that the United States be reimbursed for reasonable costs associated 
with processing right-of-way applications. FLPMA does not provide for 
fee reduction or elimination based on the number of hours an 
application takes to process. As explained earlier, we determined that 
for actions taking less than one hour to process, the minimal costs 
involved to process an application does not justify charging a fee. For 
all other actions, unless you are exempt, as provided in final section 
2804.16, you must reimburse BLM for the reasonable cost of processing a 
right-of-way application. We did not amend the rule as a result of this 
comment. A similar rationale applies to actual costs under the Mineral 
Leasing Act.
    Several commenters said that there should be criteria for measuring 
``full reasonable costs.'' We believe that the final rule provides 
these. Section 304(b) of FLPMA identifies criteria for determining 
reasonable costs, as did proposed section 2804.18. These ``FLPMA 
factors'' appear in this final rule at sections 2804.20 and 2804.21. 
BLM considered these factors when developing the schedules for this 
rule and previous rules.
    The fixed fees in FLPMA Categories 1 through 4 all reflect 
consideration of the FLPMA factors and represent reasonable costs, as 
FLPMA requires. As explained earlier, the fixed category fees originate 
from field studies conducted in 1982 and 1983, and supplemented with 
additional studies in 1986 and 1995. These studies gathered detailed 
information on processing nearly 3,000 FLPMA and MLA right-of-way 
applications.
    We also apply the FLPMA factors to fees that are determined on a 
case-by-case basis (Category 6) or by agreement (Category 5). For those 
fees, BLM would give the applicant an estimate of the proposed fee 
after estimating the actual cost of processing the application and 
considering the other FLPMA factors. If the fee is set at less than our 
actual costs because of one of the FLPMA factors, processing could not 
proceed until funding for the shortfall became available through the 
BLM budget, contributions by the applicant, or other means.
    For additional information on how BLM applies the FLPMA factors in 
determining processing fees, and other elements affecting processing 
costs, please refer to 64 FR 32107 to 32111 (June 15, 1999) and 51 FR 
26836 to 26841 (July 25, 1986).
    One commenter said that the premise that BLM should determine 
category fees by the number of hours spent in processing the 
application is false, but that there is not enough data to evaluate 
alternatives. Another commenter said that the bulk of an agency's 
processing and monitoring costs is most accurately measured by the 
total number of person hours devoted to processing and monitoring 
activity, not whether the activity involves one or more ``field 
examinations'' and one or more vehicles. BLM has determined that using 
the number of hours spent in processing an application is an 
appropriate measure to identify cost recovery categories. We base this 
determination on previous studies and sampling efforts completed in 
1982-83, 1986, and 1995, and a review of known economic indicators. BLM 
also believes that it is reasonable to equate application processing 
costs to hours of staff time required. We agree with the commenter that 
the number of field examinations should not be the determining factor 
for processing categories and have deleted that requirement from the 
final rule. In the final rule, field examinations are considered only 
to the extent that they add to the number of hours necessary to process 
and monitor a right-of-way use or grant.
    Several commenters asked that we provide a schedule of costs in the 
regulations so that the public will know what the costs are before 
starting a project. We agree with the commenter. Final section 
2804.14(b) identifies the set processing fees for Categories 1 through 
4.
    Several commenters were concerned that BLM will use proposed 
Category IV

[[Page 20989]]

(final Category 6) costs to pay for new NEPA and field studies. There 
is no provision in section 504(g) of FLPMA or in this or previous 
regulations that permits BLM to collect fees from a right-of-way 
applicant for purposes of conducting any work beyond that necessary to 
process an application. Moreover, section 304(b) of FLPMA expressly 
identifies ``environmental impact statements'' and ``special studies'' 
as among the reasonable costs for which an agency may be reimbursed. In 
Nevada Power Co. v. Watt, 711 F. 2d. 913, 933 (10th Cir. 1983), the 
Court of Appeals held that ``[r]easonable costs of processing include 
the reasonable costs of EIS preparation, as determined using the 
section 304(b) factors.''
    Several commenters asked if BLM does routine Category I (in the 
proposed rule, Category 2 in the final rule) applications in blocks and 
stages in which BLM handles several applications at a time, will 
companies be charged the full amount for each right-of-way. Where 
efficiencies can be gained by handling the processing of similar or 
related applications in combination, BLM will do so. If we process 
several applications in a combined effort, BLM will identify that 
portion of the effort, in hours, attributable to each application and 
determine the appropriate cost recovery categories based on those 
hours. Such efficiencies will most likely occur in Categories 1 through 
4, and in the context of a Master Agreement (Category 5).
    Several commenters asked that BLM provide clear-cut examples of 
specific types of activities that fall into each category. Because 
hours are the measure BLM uses to determine the processing costs 
category, and since there may be several proposed right-of-way uses in 
a given category, there is no such thing as a typical application. 
Therefore, we have not provided specific examples for each category in 
the final rule. However, we expect that most assignment and renewal 
applications will require fewer than eight hours to process and will, 
therefore, fall into Category 1. Beyond that, the hours BLM requires to 
process the application, including those for assignments and renewals, 
and not the type of proposed use itself, determines the cost recovery 
category.
    Many commenters said that fees for processing assignments are too 
high. They also said that if the amount of time necessary to process 
the application is less than the category designation, the fee should 
be lower. We changed the final rule to lower processing fees for any 
right-of-way action requiring eight hours or less to process, as 
suggested in these comments. The new Processing Category 1 will apply 
to all applications requiring eight or fewer hours to process. The 
processing fee for Category 1 applications is now $97, a significant 
reduction from the proposed rule's Category I fee of $230. If you 
believe that BLM has incorrectly designated an application's fee 
category, you may appeal our determination to the IBLA.
    Several commenters stated that the oil and gas industry pays its 
own way through bonuses and royalties and therefore should not pay any 
fees for rights-of-way to develop and produce mineral resources. They 
stated that BLM should reduce or eliminate fees for the oil and gas 
industry since:
    (A) The revenue stream to the public good resulting from mineral 
extraction is significant and roadways constructed for oil and gas 
operations are used by the public and other governmental agencies;
    (B) BLM's operating budget is less than the revenues received from 
the oil and gas industry;
    (C) Oil and gas rights-of-way are the infrastructure (roads and 
pipelines) that allows the treasury to realize the revenues being 
developed;
    (D) BLM should recognize the tangible and valuable benefits that 
right-of-way grants provide, such as archaeological and threatened and 
endangered species surveys, road upgrades, and maintenance that 
benefits recreational users; and
    (E) There must be a distinction between those entities that simply 
use the land and those that pay bonuses and develop minerals and pay 
royalties.
    Please see the discussion in the General Comments section at the 
beginning of this preamble for a discussion of why we disagree with the 
commenters. We note that any benefits to the public provided by BLM's 
processing or any public service provided by the applicant through 
tangible improvements are factored into the fees BLM charges. See final 
section 2804.20 and the discussions in the preamble to the proposed 
rule at 64 FR 32110-32111.
    Many commenters said that BLM should not increase fees. They said 
that if we do so, fees should only be adjusted to the 1986/1987 levels, 
based on the study. Commenters said that the public should not suffer a 
30-percent increase because BLM did not make proper administrative 
decisions in the past. BLM does not agree with these comments. First, 
we note that the fees are charged to right-of-way applicants, not the 
public. Second, any increase reflects an adjustment in the proposed 
rule, based on the increase in the IPD-GDP since the 1986 studies and 
comments. BLM has not increased these fees since 1987. As stated in the 
proposed rule, the IPD-GDP is a reasonable measure to adjust fees that 
are heavily dependent on labor costs. This final rule contains a 
periodic review requirement to reevaluate these fees. The adjusted fee 
categories in this final rule represent BLM's determination of current, 
reasonable costs as required by section 504(g) of FLPMA.
    A few commenters said the rule should make clear that fee increases 
will not be applied retroactively. The processing fees in section 
2804.14(b) for new Category 1 through 4 applications and the Monitoring 
Categories in section 2805.16(a) Category 1 through 4 grants apply only 
on and after the effective date of this final rule. Applications 
pending on the effective date of this final rule will be charged 
processing fees under subpart 2808 of the previous rule. However, the 
holder of a new grant authorized after the effective date of these 
regulations will be subject to the new monitoring fees.
    One commenter said that BLM must continue to be responsible for 
NEPA costs and that if industry chooses to pay NEPA costs because of 
BLM delays from staffing issues, industry should be able to offset the 
costs against processing and monitoring fees. We do not agree with the 
comment. FLPMA is clear that the agency may charge fees for NEPA work, 
and any application-related NEPA costs will be charged to the applicant 
in Category 5 or 6. If BLM agrees to allow an applicant to supply NEPA 
or other documentation, that may reduce the time BLM requires to 
process the application (depending on factors such as completeness and 
technical adequacy), which may reduce the fee BLM charges. This could 
also hold true for set fees (Categories 1 through 4) if the number of 
BLM processing hours is reduced enough that the application falls into 
a lower processing fee category. We note, however, that regardless of 
whether BLM or the applicant supplies the documentation, the applicant 
is responsible for the costs.
    A few commenters said BLM needed to make clear what the fees are 
targeted toward recovering. We believe the rule does that. Section 
504(g) of FLPMA and these regulations provide for the reimbursement of 
all reasonable administrative and other costs BLM incurs to process a 
right-of-way application and to inspect and monitor the construction, 
operation, and termination of a facility authorized by a grant. A 
variety of tasks are involved as

[[Page 20990]]

BLM processes an application, including an analysis of environmental 
impacts, as set forth at section 304(b) of FLPMA. In this final rule, 
the range of tasks that BLM performs during application processing is 
measured by the hours necessary to perform them.
    Another comment stated that BLM should recognize that fees could be 
reduced if economic indices go down. We agree with the commenter. As 
provided in final section 2804.14(c), BLM will use the IPD-GDP as the 
basis to make an annual adjustment in fees. The annual adjustment in 
fees will follow any annual second quarter to second quarter change of 
this index, either up or down. Under final section 2804.15, fee 
adjustments, either up or down, may also occur after BLM completes a 
periodic review of the fees and categories.
    Two non-profit cooperatives opposed the fee increases because they 
stated that they would have to pass the costs along to their customers 
and that, instead of increasing the fees, BLM should streamline its 
operations to become more efficient and cost effective. Although non-
profit applicants are not exempt from paying processing fees, final 
section 2804.21 provides a mechanism for BLM to consider the non-
profit's status in determining reasonable processing fees. One of the 
factors BLM may consider is whether the studies undertaken in 
connection with processing the application of a non-profit have a 
public benefit. If during the periodic review of processing fees and 
categories BLM determines that revising the fees and fee structure is 
warranted, we will make an adjustment as set forth in section 2804.15. 
If you believe that BLM's category determination for your application 
is incorrect, you may appeal the decision to IBLA.

Section 2804.15 When Does BLM Reevaluate the Processing and Monitoring 
Fees?

    This is a new section to the final rule that explains that BLM 
reevaluates processing and monitoring fees for each category, and the 
categories themselves, within five years after they go into effect and 
at 10-year intervals after that. This section also lists some examples 
of the types of factors BLM considers when reevaluating these fees.
    Several comments suggested a periodic review and evaluation of the 
processing and monitoring fees and categories, and this section is in 
response to those concerns. Previous rules established fixed processing 
and monitoring fees with no provision for reviewing them. BLM added 
this provision in this final rule to ensure that the fees and 
categories are systematically reviewed. Any adjustment that BLM makes 
to the fees or fee structure as a result of a review under this 
section, apart from applying the IPD-GDP, would require a separate 
rulemaking.

Section 2804.16 Who Is Exempt From Paying Processing and Monitoring 
Fees?

    This section explains that under certain conditions, state and 
local governments or their agencies are exempt from paying processing 
and monitoring fees. It also explains that if a grant application is 
associated with a cost-share road or a reciprocal right-of-way 
agreement, the applicant is exempt from processing and monitoring fees. 
Section 502 of FLPMA and existing regulations at 43 CFR subpart 2812 
provide for the issuance of cost share and reciprocal rights-of-way. A 
reciprocal right-of-way is the grant to the United States of an access 
right or easement across private lands as a condition of receiving a 
right-of-way authorization from the United States. A cost share road 
authorization is created where the United States and a private party 
participate, through agreement, to share costs of road construction and 
maintenance.
    This section was proposed as section 2804.15 and except for minor 
editorial changes, it remains as proposed.
    Several commenters said that BLM should not exempt Federal Power 
Marketing Agencies and other non-profit energy providers from 
processing fees and rent payments because that would give them an 
unfair competitive advantage in an open power market. Other commenters 
said that Federal Power Marketing Agencies and other non-profit energy 
providers should be exempt from processing fees. Under section 504(g) 
of FLPMA, BLM may, by regulation, require an applicant to reimburse the 
United States for all reasonable costs incurred in processing a right-
of-way application. The previous rule at section 2808.1(b) identified 
``automatic'' exemptions from payment of processing costs only for 
Federal agencies; for state and local governments and their 
instrumentalities where the right-of-way use is for governmental 
purposes benefitting the general public; and for cost share roads or 
reciprocal right-of-way agreements. The only substantive change we made 
from previous regulations is that Federal agency applicants are no 
longer automatically exempt. Any applicant, including a Federal Power 
Marketing Agency, that does not meet the new exemption requirements 
must pay reasonable processing costs. Final sections 2804.20 and 
2804.21 identify factors that BLM will take into account for purposes 
of determining these costs.
    Several commenters said that the rule should not eliminate the 
Federal agency exemption for processing fees. Other commenters said we 
should establish a threshold over which we would begin charging an 
agency processing fees. Another commenter said that the rules should 
exempt Federal agencies from having to pay rent, but not from paying 
processing fees. Although previous section 2808.1(b) provided for a 
Federal agency exemption, common practice has been that many Federal 
agency right-of-way applicants do provide funds, usually through a 
negotiated agreement, to reimburse BLM for processing costs. To 
recognize this common practice, and to provide consistency and 
efficiency in fund transactions, we eliminated the automatic Federal 
agency processing costs exemption in this final rule.
    Several commenters said that BLM does not have the authority to 
remove the exemption for Federal agencies or those agencies whose 
facilities are eligible for financing under the Rural Electrification 
Act (REA). The commenters said that this regulatory change would 
require an amendment to FLPMA section 504(g) (43 U.S.C. 1764(g)). We 
disagree. Section 504(g) of FLPMA does not require BLM to exempt 
Federal agencies. It does allow us to require a right-of-way applicant 
to reimburse the United States for reasonable processing costs. 
Although the previous rule provided for an automatic exemption to 
Federal agencies, that rule may be changed by subsequent rulemaking. 
Section 504(g) gives BLM discretion to require, by promulgation of 
regulations, right-of-way applicants, including Federal agencies, to 
pay reasonable processing costs. Regarding facilities eligible for REA 
financing, section 504(g) of FLPMA exempts from rent rights-of-way for 
electric or telephone facilities eligible for financing under the REA, 
but specifically reinforces the authority for requiring reimbursement 
of reasonable processing costs from such applicants. The final proviso 
of section 504(g) addresses this point.
    One commenter said that BLM needs to have the flexibility to 
determine when to waive processing and monitoring payments for Federal 
agencies. Under final sections 2804.20 and 2804.21, BLM will examine a 
number of factors, e.g., public benefits or public services, in 
determining the reasonable costs to be charged an applicant, including 
Federal agencies.

[[Page 20991]]

    One commenter said that a weak argument could be made that the 
Western Power Administration is exempt from paying processing fees 
because it is in the business of supplying electrical power to rural 
electric associations. As explained earlier, section 504(g) of FLPMA 
addresses facilities eligible for REA financing and exempts from rent 
rights-of-way containing these facilities. It does not exempt such 
holders from reimbursement of reasonable application processing costs. 
Therefore, the Western Power Administration is not exempt from payment 
of reasonable processing costs.
    One commenter was concerned that under these regulations, a non-
commercial private individual would pay agency costs for processing a 
grant, but a commercial user may not. The commenter may be referring to 
the fact that an applicant for a right-of-way involving a cost-share 
road or reciprocal right-of-way agreement is exempt from paying 
processing and monitoring fees under section 2804.16. Section 504(g) of 
FLPMA provides that BLM may require reimbursement of the reasonable 
costs associated with processing right-of-way applications. This 
section further provides that BLM need not secure reimbursement in any 
situation where there is in existence a cooperative cost-share right-
of-way program.

Section 2804.17 What Is a Master Agreement (Processing Category 5) and 
What Information Must I Provide to BLM When I Request One?

    This section explains that a Master Agreement is a negotiated 
agreement between you and BLM covering processing and monitoring fees 
for multiple applications and grants within a defined geographic area. 
This section also explains how to apply for a Master Agreement.
    In the final rule we split proposed section 2804.17 into this 
section and the following section, which covers the provisions and 
limitations of a Master Agreement. This revised section provides a 
clearer description of what a Master Agreement is. The proposed rule 
identified it as a ``cost recovery'' Master Agreement, whereas this 
final rule identifies it simply as a Master Agreement. We made this 
change to make clear that a Master Agreement is not strictly limited to 
negotiation of processing and monitoring fees. A Master Agreement may 
contain negotiated agreements between BLM and an applicant concerning 
other aspects of application processing and monitoring as indicated in 
final section 2804.18. Revised section 2804.17 and new section 2804.18 
also provide a clearer distinction between the information BLM requires 
when you request a Master Agreement, and the required content of a 
final negotiated agreement.
    We amended paragraph (a) in the final section 2804.17 to be more 
descriptive of what Master Agreements are and amended paragraph (b)(2) 
of this section by making clear what a preliminary work plan is. Final 
paragraph (b)(3) is also different from the proposal in that the final 
rule requires you to submit a timetable along with the preliminary cost 
estimate. We added this requirement so BLM knows when you expect BLM to 
complete processing your application. The customer service standard in 
final section 2804.25(c) for Processing Category 5 applications is ``As 
specified in the Master Agreement.'' Your expectation of processing 
times is critical information for BLM to know in order to proceed and 
reach a final agreement.
    We also made other changes to this section. We simplified proposed 
paragraph (b)(4) and moved it to final section 2804.18(a)(1). Proposed 
paragraph (b)(5) now appears as section 2804.18(a)(3).
    One commenter said that the rule should require BLM and the 
applicant to meet to determine the scope of the data needed to process 
the application to limit the amount of additional information that BLM 
may request under this section. The same commenter asked who in BLM has 
the authority to sign the agreement. Since this final rule defines a 
Master Agreement as an agreement negotiated between BLM and an 
applicant, communications are by implication necessary to reach such 
agreement. Therefore, a regulatory requirement to compel a meeting is 
unnecessary. Signature levels for right-of-way grants are identified in 
the BLM delegation of authority Manual at section 1203. For most 
rights-of-way, the delegated authority is at the field manager level, 
and therefore, we will usually authorize Master Agreements at that 
level. Master Agreements would not apply to those major rights-of-way 
not delegated below the BLM State Director signature level, as these 
are usually single or related one-time actions which are handled in 
Processing Category 6.
    Two commenters said that BLM must commit to making the private 
party an integral party in agreeing on the level of work necessary to 
adequately monitor and administer plans for lands affected by Master 
Agreements. Several commenters asked that the final rule provide for an 
appeals process for Master Agreements to resolve disagreements over 
Master Agreements. Inherent in the concept of a Master Agreement is a 
cooperative relationship between BLM and an applicant. BLM is committed 
to working with any applicant wishing to pursue a Master Agreement. 
Under the proposed rule and final section 2804.14(d), an applicant's 
signature on a Master Agreement constitutes an agreement with the 
processing category decision. More specifically, an applicant's 
signature on a Master Agreement constitutes agreement with all of its 
provisions, including the negotiated application processing costs. A 
signed Master Agreement documents BLM's decision on the processing 
category and the applicant's agreement with it. Therefore, we believe 
that an appeal of a negotiated agreement would be rare. If there are 
disagreements during the Master Agreement negotiation process that 
cannot be resolved, negotiations would not culminate in an approved 
Master Agreement. At that point, if the applicant still wished to 
pursue applying for a right-of-way grant, BLM would make a processing 
category decision outside the context of the Master Agreement process, 
and that decision would be subject to administrative appeal.

Section 2804.18 What Provisions Do Master Agreements Contain and What 
Are Their Limitations?

    This is a new section that incorporates some new provisions and 
some from proposed section 2804.17. This section describes the 
provisions in a Master Agreement and explains that BLM will not enter 
into any agreement that is not in the public interest. It also explains 
that if you enter into a Master Agreement, you waive your right to 
request a reduction of processing and monitoring fees. We added 
paragraphs (a)(1), (a)(2), (a)(4), and (b) to more clearly describe the 
content of a Master Agreement and added language concerning compliance 
with all applicable laws and regulations, assignment of tasks and 
responsibilities of BLM and an applicant, and the public interest 
standard that will guide BLM's decision to enter into a Master 
Agreement.
    A few commenters recommended that Master Agreements be for a term 
of twenty years or longer. The term of a Master Agreement is negotiated 
and agreed to by an applicant and BLM. A 20-year or longer term may be 
appropriate in some circumstances and not in others, and therefore 
should not be a regulatory standard. Also, a Master Agreement may or 
may not specify a fixed term. A Master Agreement may

[[Page 20992]]

provide that it stays in effect until or unless specific conditions or 
circumstances occur. Whether or not a term is specified, every Master 
Agreement must contain provisions for termination under final section 
2804.18(a)(7).
    Many commenters asked for an explanation of the ``other 
information'' in proposed section 2804.17(b)(9). Others said the 
application form should contain all of the information necessary for 
BLM to process an application. Final section 2804.12(c) allows BLM to 
require you to submit additional information to BLM ``at any time while 
processing your application.'' Similarly, final section 2804.17(b)(5) 
states that the application must contain ``any other relevant 
information that BLM needs to process the application.'' We believe 
that these sections make clear that any additional information we 
request will be relevant to the application, and necessary for us to 
process it. Examples of the type of additional information we may 
request include plans of development, cultural resource surveys, and 
inventories for threatened and endangered species (see sections 
2804.25(b) and 2804.12(c) of these regulations). Due to the wide 
variety and types of right-of-way applications and uses involved in 
BLM's right-of-way program, we must have some flexibility to determine 
the type of additional information we may require to process and 
approve an application. Therefore, we did not amend this section.

Section 2804.19 How Will BLM Process My Processing Category 6 
Application?

    This section describes how BLM will process a Category 6 
application. In processing your application BLM will:
    (A) Determine the issues subject to analysis under NEPA;
    (B) Prepare a preliminary work plan that identifies data needs, 
studies, survey and other reporting requirements, and level of NEPA 
documentation and outline consultation and coordination requirements, 
public involvement needs, and a proposed schedule to complete 
application processing;
    (C) Develop a preliminary financial plan that estimates the costs 
of processing your application and monitoring the project;
    (D) Discuss with you the preliminary plans addressed above; and
    (E) Work with you to develop final work and financial plans which 
reflect any work you have agreed to do. As part of this process BLM 
will complete our final estimate of the costs you must pay BLM for 
processing the application and monitoring the project.
    BLM may allow you to prepare environmental documents and conduct 
any studies related to your application. However, if BLM agrees to 
allow you to perform this work, you must do it to BLM standards. 
Previous section 2808.3-1(d) encouraged applicants to do all or part of 
any study or analysis, including completing a NEPA document, required 
in connection with processing the application. The practice of 
applicant-provided information and NEPA documents is well established 
and is successful in increasing efficiency and reducing BLM costs. 
Under final section 2804.19, dealing with Processing Category 6, we 
continue to encourage this successful practice. BLM will continue to 
allow applicants to provide us additional information to assist us in 
processing their application. As with previous regulations, this final 
rule requires that all environmental information an applicant provides 
meets BLM standards.
    Finally, this section states that BLM will set out timeframes for 
periodic estimates of processing costs for a specific work period. You 
must pay the amount due before we will continue to process your 
application. BLM will refund excess payments or adjust the next payment 
amount to reflect any overpayment.
    Previous section 2808.3-1(f) provided for payment of up to one 
percent of actual construction costs as an alternative method for an 
applicant to pay reasonable processing costs. One commenter said that 
the 1 percent fee would not be used because companies do not want to 
divulge the cost of their projects. Several other commenters supported 
eliminating the 1 percent fee. As mentioned in the preamble to the 
proposed rule (see 64 FR 32110), this provision has only been used once 
by an applicant. This final rule eliminates this provision.

Section 2804.20 How Does BLM Determine Reasonable Costs for Processing 
Category 6 or Monitoring Category 6 Applications?

    This section explains that for Processing Category 6 or Monitoring 
Category 6 applications BLM will consider the factors in this section 
to determine reasonable costs for processing your application, unless 
you agree in writing to waive consideration of reasonable costs and 
elect to pay full actual costs. These factors are set forth in section 
304(b) of FLPMA and are referred to as FLPMA factors in paragraph (a). 
With your application you should provide an analysis that shows how 
your application meets each of the FLPMA factors. After considering 
your analysis, BLM will notify you in writing of what you owe. You may 
appeal this determination under section 2801.10 of this part.
    The provisions in this section and final sections 2804.21 and 
2804.22 were all proposed in section 2804.18. We divided that proposed 
section into these sections and modified the content of the rule 
because we believe the proposed rule did not accurately reflect policy. 
We also replaced the proposed rule's use of the term ``reasonability 
criteria'' with ``FLPMA Factors'' because the latter promotes greater 
clarity owing to its statutory basis. BLM policy is to apply the FLPMA 
Factors when determining processing fees for Category 6 applications. 
BLM has previously used these FLPMA Factors in setting the processing 
fees in Categories 1 through 4.
    In the final rule, we added a definition of ``cost incurred for the 
benefit of the general public interest (public benefit)'' to this 
section to describe that portion of the funds spent in connection with 
processing an application on collecting data or performing studies that 
are determined to have value to the Federal Government or the general 
public aside from being needed to process the application. The term's 
definition is substantially similar to that in previous regulations at 
section 2800.0-5(q). Adding it makes the rule clearer.
    One commenter said that since the word ``actual'' does not appear 
in the cited portion of the MLA, there is no need for the regulations 
to distinguish between the treatment of fees under parts 2800 and 2880. 
The commenter said that the regulations should apply a ``reasonableness 
standard'' to both parts. Section 28 of the Mineral Leasing Act (30 
U.S.C. 185(l)) authorizes the Secretary of the Interior to recover 
administrative and other costs of processing an application, while 
sections 304(b) and 504(g) of FLPMA provide for the recovery of 
reasonable administrative and other costs. Because the standards for 
cost recovery differ between the MLA and FLPMA, so must the 
regulations.
    One commenter said that the regulations sometimes use the term 
``waive'' and sometimes say ``reduce to zero'' when referring to fees. 
The commenter said the regulations should be consistent. We agree. 
Previous section 2808.5 used the terms ``reduction'' and ``waiver.'' 
The preamble to proposed section 2804.18 used the term ``reduction'' to 
include a potential reduction to zero dollars (see 64 FR 32119). In 
this final rule we are

[[Page 20993]]

consistent in our use of the terms ``reduction'' and ``waiver.''

Section 2804.21 What Other Factors Will BLM Consider in Determining 
Processing and Monitoring Fees?

    This section sets out the factors the BLM State Director will 
consider in determining your processing or monitoring fee in any 
category, if you include this information in your application. If the 
factors do apply to your application, you need to include an analysis 
of how each of the factors applies. BLM will notify you in writing of 
the BLM State Director's fee determination. You may appeal this 
decision under section 2801.10 of this part. This is consistent with 
existing policy and previous regulations.
    One commenter suggested eliminating ``financial hardship'' as a 
criterion for waiving or reducing cost recovery fees. The commenter 
said that if a cost recovery fee creates a financial hardship to an 
applicant, BLM should evaluate whether the applicant has the financial 
capability to conduct the proposed use according to the terms and 
conditions of the grant. Financial hardship for waiving or reducing 
cost recovery fees has existed since previous section 2808.5 became 
effective on August 7, 1987. The ``other factors'' mentioned in section 
304(b) of FLPMA is the basis for using financial hardship as a 
criterion for lower cost recovery fees. This provision is rarely 
utilized for the reasons stated by the commenter. Yet, in a very few 
instances, an applicant may show technical and financial capability to 
hold (construct, operate, maintain, and terminate) a right-of-way 
grant, but the additional expense of paying a processing fee may be 
just enough of an additional burden that its payment would create undue 
financial hardship. This final rule continues to allow for 
consideration of an applicant's financial hardship. Section 504(j) of 
FLPMA makes clear that all grant holders must be technically and 
financially able to construct the project for which the right-of-way 
grant is requested. As required by final section 2804.12(a)(5), each 
applicant must provide a statement of financial and technical 
capability.
    One commenter said that the regulations should give BLM the ability 
to waive or recover costs and charge other agencies for its services 
depending on the benefits to the public. As proposed, and as carried 
through in this final rule, BLM has the authority to recover fees from 
other agencies. Final section 2804.16 retains exemptions for state or 
local governments or an agency of such government if a right-of-way 
grant is for governmental purposes benefitting the general public. This 
final rule eliminates the previous automatic exemption for Federal 
agencies.
    One commenter said that small, non-profit associations, such as 
domestic water associations, should be exempt from paying any 
processing fees ``in view of the public benefits derived from our 
services.'' Previous section 2808.1(b) provided no automatic exemption 
for non-profit associations, and we did not propose a change in this 
policy. The final rule makes no provision for an automatic exemption 
for non-profit associations, but does provide that BLM will consider, 
in setting a reasonable processing fee, whether an applicant is a non-
profit organization and the studies undertaken in connection with 
processing its application have a public benefit or the facility or 
project will have a benefit or special service to the general public or 
a program of the Secretary.

Section 2804.22 How Will the Availability of Funds Affect the Timing of 
BLM's Processing?

    This section explains that if BLM has no funds to process your 
application, we will not process it until funds become available or you 
elect to pay full actual costs under section 2804.14(f) of this part. 
If reasonable costs to be charged to an applicant are significantly 
less than BLM's actual processing costs, the customer service standards 
at section 2804.25(c) may not apply, since the resources necessary to 
process these applications will be subject to the availability of 
appropriated funds. This is consistent with existing policy and 
previous section 2808.5.

Section 2804.23 What If There Are Two or More Competing Applications 
for the Same Facility or System?

    This section was proposed as section 2804.19. It explains that if 
there are two or more competing applications for the same facility or 
system and your application is in:
    (A) Processing Category 1 through 4, you must reimburse BLM for 
processing costs as if the other application or applications had not 
been filed; or
    (B) Processing Category 6, you are responsible for processing costs 
identified in your application. Cost sharing agreements by applicants 
are possible. You must pay the processing fee in advance. Consistent 
with existing policy, BLM will not process your application without the 
advance payment.
    This section also explains that BLM determines whether applications 
are compatible in a single right-of-way system, or are competing 
applications for the same system. We added new paragraphs (b) and (c) 
to this section to make it clear that BLM determines whether 
competition exists and the procedures for a bid announcement if we 
determine that competition does exist. Section 501(b)(1) of FLPMA and 
final section 2804.12(a)(6) require a right-of-way applicant to submit 
and disclose plans, contracts, agreements, or other information related 
to the use, or intended use, of a proposed right-of-way, and ``its 
effect on competition.'' You should not construe this filing 
requirement as requiring you to make a determination on whether 
competition exists or is likely. This new paragraph reinforces the fact 
that BLM determines, based on information provided in an application, 
whether competition exists.
    Several commenters said that the current process of BLM's beginning 
to process applications when they are received should remain and that 
BLM should provide the applicant an estimate of processing costs before 
the right-of-way is granted. The majority of right-of-way applications 
BLM processes are on a noncompetitive basis, and we expect this to 
continue. However, if we determine that competition exists, we will 
follow these regulations and FLPMA. Under the previous rule and as 
provided in this final rule and section 2804.25, we will inform the 
applicant in writing of the processing fee and will collect the fee 
before we process a right-of-way application.

Section 2804.24 Do I Always Have To Submit an Application for a Grant 
Using Standard Form 299?

    This section explains that if BLM determines that competition 
exists under section 2804.23 of this subpart, you are not required to 
submit an application using Standard Form 299, because there will be a 
competitive bid process for the lands you propose to use. Section 
2804.23 notes that BLM will describe the procedures in a notice 
published in a newspaper in the area of the lands involved and in the 
Federal Register.
    You are also not required to submit an application if you are an 
oil and gas operator and have need for a FLPMA right-of-way. You may 
submit your right-of-way requirements in your Application for Permit to 
Drill or Sundry Notice. This section is consistent with existing policy 
and except for editorial changes, remains as proposed.

[[Page 20994]]

Section 2804.25 How Will BLM Process My Application?

    This section explains that BLM will notify you in writing when we 
receive your application and will identify your processing fee. BLM may 
require you to submit additional information to complete your 
application. If we need additional information to process your 
application, we will send you a written deficiency notice. BLM will 
also notify you of any other applications for rights-of-way which 
involve lands in your application.
    This section also lays out estimated processing times for the 
different categories of applications based on the complexity of the 
application and the amount of analysis that we must perform. The final 
rule uses a chart in place of the description of the processing times 
that was in the proposed rule. We also replaced the term ``working 
days'' with ``calendar days'' to be consistent with the rest of the 
rule, other BLM regulations, and the Forest Service right-of-way cost 
recovery regulations.
    BLM's current policy for right-of-way approvals, set forth at BLM 
manual section 2801.35.B.2.(1), provides that most ``low impact'' 
right-of-way applications needing a categorical exclusion or EA should 
be processed in 30 days, and requires BLM to notify an applicant in 
writing if processing would take more than 60 days. Proposed section 
2804.20(c) identified very similar customer service standards for 
application processing times. However, the current standard has caused 
confusion for some of our applicants, as well as BLM employees, because 
the notification deadline is twice as long as the processing deadline. 
A more logical standard would have the notification deadline prior to 
the processing deadline, if the processing deadline can not be met. 
This final rule sets the customer service standard for processing a 
completed Category 1 through 4 application at 60 calendar days. 
However, if BLM knows beforehand that this standard can not be met, 
then BLM will notify an applicant (prior to the 30th calendar day) if 
we expect the processing time to take longer than 60 days. The 60 
calendar day processing standard for Categories 1 through 4 does not 
mean that BLM intends to take that long to process all applications in 
these categories. Actual processing times will vary among categories. 
For example, we will generally process Category 1 actions in 
significantly less time than 60 days.
    This section also explains that before BLM will issue a grant, we 
will:
    (A) Complete a NEPA analysis for the application or approve a NEPA 
analysis previously completed for the application. We amended this 
paragraph in the final rule by adding specific citations to the Council 
on Environmental Quality regulations and by making it clear that the 
NEPA analysis may be approved or completed for the specific 
application;
    (B) Determine whether or not your proposed use complies with 
applicable Federal and state laws;
    (C) If your application is for a road, determine whether it is in 
the public interest to require you to grant the United States an 
equivalent authorization across lands that you own. In the final rule 
we made this paragraph clearer by pointing out that situations 
requiring a holder to grant equivalent rights to BLM always involve 
access needs. BLM requires no equivalent rights involving other 
proposed right-of-way uses;
    (D) Consult, as necessary, with other governmental entities;
    (E) Hold public meetings if sufficient public interest exists to 
warrant their time and expense; and
    (F) Take any other action necessary to fully evaluate and decide 
whether to approve or deny your application.
    This final rule moves BLM's notification responsibilities from 
proposed section 2804.20(c) to the ``Conditions'' column in the chart 
in final section 2804.25(c). We also moved proposed section 2804.20(e) 
to final section 2805.10 because these provisions are part of BLM's 
decision concerning the content and terms and conditions in a grant.
    A few commenters suggested that the regulations require the 
applicant to provide the location and extent of designated or existing 
corridors that are proposed for use. This information may be important 
in determining the NEPA classification for the proposal and 
subsequently the processing and monitoring costs for the project. The 
commenters said that they understood that if they use an existing 
corridor or right-of-way they would not be required to perform an EIS, 
but only an EA. Under section 503 of FLPMA, BLM identifies existing 
corridors and designates new corridors. We do this through cooperation 
with industry and other interested parties. Final sections 2802.10(b) 
and 2802.11 contain information on right-of-way corridors. It is not 
incumbent on an applicant to identify or otherwise supply corridor 
information in a right-of-way application. The preapplication meeting 
identified in final section 2804.10(a) provides the opportunity to 
discuss corridor designations. Given this process, BLM believes 
requiring applicants to provide corridor information is not necessary.
    A few commenters said that requiring an inventory for threatened or 
endangered species is another extravagant cost for applicants to bear 
and they opposed it. They also said that it was ``redundant, 
inefficient and costly to our customers'' for them to prepare reports 
and then be charged for BLM staff to go out to the field to confirm 
that they are accurate. Final section 2804.25(b) (proposed section 
2804.20(b)) states that BLM may require an applicant to submit 
additional information ``necessary to process the application.'' This 
same standard applies to BLM review and verification of applicant-
supplied information. If information is not necessary to process an 
application, BLM will not request it.
    Several commenters objected to the provision in proposed section 
2804.20(e)(1) allowing BLM to modify the area applied for and said that 
changing the route or location of facilities may render a project 
uneconomic. Proposed section 2804.20(e)(1) provided that in deciding to 
issue a right-of-way grant, BLM may modify a proposed use or change the 
route or location. This provision is in previous section 2802.4(f) and 
is consistent with section 504(c) of FLPMA and the discretionary nature 
of a right-of-way grant. Final section 2805.10(a)(1) contains a 
provision giving BLM discretion to modify a proposed right-of-way use 
or change its route or location. NEPA and implementing regulations at 
40 CFR 1500-1508 require an evaluation of alternatives to proposed 
actions. These alternatives must be reasonable and capable of meeting 
the purpose and need of the proposed project. We will follow that 
standard when processing applications that may need modifications to 
the proposed use, route, or location.
    Several commenters objected to the requirement in proposed section 
2804.20(e)(2) for a plan of development. The commenters said the plan 
would serve no purpose other than to ``create another document that is 
only for the Federal government.'' Several commenters said that 
requiring plans of development is new to oil and gas and is not cost 
effective. The commenters said that they only fill a file in a BLM 
office and that independents do not have the staff to create a document 
whose only purpose is to fill a file for BLM. Proposed section 
2804.20(b) provided that BLM may require an applicant to submit 
additional

[[Page 20995]]

information, including a plan of development, ``necessary to review the 
application.'' The final rule at section 2804.25(b) does not change 
this provision. Section 501(b)(1) of FLPMA is the authority for BLM to 
require information necessary to determine whether BLM should issue a 
grant and the terms and conditions which BLM should include. Section 
504(d) of FLPMA requires a plan of construction, operation, and 
rehabilitation for proposed rights-of-way uses that may have a 
significant impact on the environment. It is important to note that a 
plan of development is not a universal requirement. We will require one 
when necessary to fully describe the proposed use.
    Several commenters said that there should be mandatory approval 
times for each category. They also said that we should amend the 
proposed rule to require that if BLM does not approve a grant within an 
agreed upon time, then the grant is automatically approved at the 
expiration of that time, whether or not BLM has finished processing the 
application. Several commenters also said that the final rule should 
establish an agreed upon mandatory approval time for Category IV 
applications. The previous rule contained no standards for application 
processing times.
    As stated above, it has been BLM's policy to process ``low impact'' 
right-of-way applications needing a categorical exclusion or EA in 30 
days, and to notify an applicant in writing if processing would take 
more than 60 days. Proposed section 2804.20(c) identified very similar 
customer service standards for application processing times. Paragraph 
(c) of final section 2804.25 contains changed customer service 
standards for application processing times. BLM made these customer 
service standards flexible because there are a variety of factors that 
can influence processing time. Requiring that BLM approve an 
application within a regulatory timeframe or it would be approved by 
default would remove BLM's discretion in granting a right-of-way and 
would be inconsistent with the provisions in FLPMA for management of 
the public lands. Therefore, we did not change the rule.
    One commenter suggested that as costs rise, the services BLM 
provides with the accompanying fee increases should get better. Final 
section 2804.25 establishes a customer service standard which states 
that BLM will attempt to process your completed application within 60 
calendar days of receiving it. If processing is expected to take longer 
than 60 calendar days, then prior to the 30th calendar day after filing 
a complete application BLM will notify you in writing of this fact 
including an estimate of when we will complete processing your 
application.
    One commenter said that the final regulations should require the 
potential grantee to submit an initial assessment of the environmental 
conditions of the land being proposed for use as a right-of-way. The 
commenter said that such assessment was necessary to evaluate the 
impact of the activity on the land and to allow BLM to complete its 
obligations under NEPA, 42 U.S.C. 4321 et seq., and that this 
assessment will also allow the Fish and Wildlife Service, and public 
and private applicants, to comply with the Endangered Species Act, 16 
U.S.C. 1531 et seq., and the Migratory Bird Treaty Act, 16 U.S.C. 701 
et seq. The commenter also said that BLM should require the potential 
grantee to provide an environmental assessment as part of the right-of-
way application and make such assessment available for public comment. 
We did not amend this section as the commenter requested.
    NEPA and its implementing regulations require assessments of 
environmental conditions and impacts. BLM's obligations under the 
authorities the commenters cited are already covered in other parts of 
BLM's regulations. Repeating these existing requirements in this right-
of-way rule is unnecessary. A universal requirement that all applicants 
provide an initial environmental assessment or other environmental 
documentation was not a part of the previous regulation, was not 
proposed, and does not appear in this final rule. Due to the wide range 
and scope of proposed right-of-way uses, from very minor actions to 
major projects, such a requirement is not practical. However, 
applicants may continue to volunteer such information to facilitate the 
processing of an application. Or, under final sections 2804.12(c) and 
2804.25(b), BLM may require an applicant to provide this type of 
information if BLM determines it is necessary to process an 
application. We disagree with the commenter that an applicant should be 
required to provide such preliminary assessment. Neither CEQ 
regulations, NEPA, nor the other statutes cited contain such 
requirements.
    One commenter recommended that BLM should clearly state that the 
agency retains the authority to conduct the environmental analysis that 
is associated with processing a right-of-way grant application, at the 
applicant's expense, in those rare circumstances when BLM determines 
that it may be in the public interest to do so (as opposed to the 
applicant, or its contractor, conducting that activity). We agree with 
the commenter that BLM retains the authority to prepare NEPA-related 
documents. We note too BLM's authority to approve any NEPA-related 
documents prepared by the applicant or a third party. In final section 
2804.19(c) we clearly state that BLM retains the option to prepare any 
environmental document related to a Category 6 application and that if 
BLM allows the applicant to prepare these documents, they must be 
prepared to BLM standards. BLM will make the final determinations and 
conclusions arising from this work. In final section 2804.25(d), we 
state that before issuing a grant, BLM will complete a NEPA analysis 
for the application or approve a NEPA analysis previously completed for 
the application, as required by 40 CFR parts 1500 through 1508.
    Several commenters asked that BLM provide mandatory approval times 
for each category, including proposed Category IV (final Category 6). 
BLM sees the customer service standards in final section 2804.25(c) as 
reasonable goals, and expects to meet them in most cases. However, in 
some cases, other agency consultations or other actions may result in 
extended processing times beyond the standards BLM has identified. 
Therefore, we believe that mandatory processing and approval times set 
by regulation are not appropriate. We did not include them in the final 
rule.
    One commenter said that stating a 30 working day processing time 
for applications may be unrealistic because of cuts in personnel and 
other resources. Final section 2804.25(c) establishes a customer 
service standard of 60 calendar days for Processing Category 1 through 
4 applications. Proposed section 2804.20(c) included a 30 working day 
processing period. Because a 60 calendar day processing period is much 
more realistic and is consistent with the Forest Service's customer 
service standard the final rule sets a customer service standard of 60 
days. If we require more than 60 calendar days to process your Category 
1 through 4 application, we will provide you written notice prior to 
the 30th calendar day.
    Several commenters said that in proposed section 2804.20, BLM 
should change the ``60 working day'' response time to ``30 calendar 
days.'' The proposed rule identified a 30 working day processing time 
for the ``minor'' categories, but included a provision for notification 
to an applicant if the processing time were to take more than 60 
working days. In this final section

[[Page 20996]]

2804.25(c) we set the processing time customer service standard as 60 
calendar days for Categories 1 through 4, a change consistent with the 
provision to notify an applicant if the processing time will be more 
than 60 days in those categories. We did not make the change the 
commenter suggested since 30 calendar days is not enough time to 
thoroughly review and process Category 1 through 4 applications. In the 
final rule we lengthened the processing time from the proposed rule's 
30 working days to the final rule's 60 calendar days to reflect a more 
realistic time for processing MLA grant applications.
    Several commenters said that public hearings are not necessary for 
right-of-way applications affiliated with oil and gas field operations 
and that hearings would cause interminable delays. The previous rule at 
section 2802.4(e), proposed section 2804.20(d)(5), and final section 
2804.25(d)(5) all make it clear that BLM will hold public meetings in 
connection with a right-of-way application only if sufficient public 
interest exists to warrant their time and expense. Depending on how 
applications affiliated with oil and gas field development are handled, 
public meetings may or may not be necessary. For example, there may be 
in place a programmatic NEPA document that includes field development 
activities, and appropriate levels of public review have already been 
conducted. In such a case, public meetings may not be necessary.

Section 2804.26 Under What Circumstances May BLM Deny My Application?

    This section explains that BLM may deny your application if:
    (A) The proposed use is inconsistent with the purpose for which BLM 
manages the lands;
    (B) The proposed use would not be in the public interest;
    (C) You are not qualified to hold a grant;
    (D) Issuing the grant would be inconsistent with the Act, other 
laws, or these or other regulations;
    (E) You do not have or cannot demonstrate the technical or 
financial capability to construct the project or operate facilities 
within the right-of-way; or
    (F) You do not adequately comply with a deficiency notice or with 
any BLM requests for additional information needed to process the 
application.
    You may appeal BLM's decision to deny your application under 
section 2801.10 of this part. With the exception of minor editorial 
changes, this section is the same as proposed section 2804.21.
    Several commenters said that the regulations should state whether 
applicants have the right of appeal if BLM denies their applications 
and should require BLM to indicate in writing reasons for denying an 
application. We agree. Under final section 2804.26(b) you may appeal a 
BLM decision denying an application. As a matter of policy, BLM always 
provides written justification for denying right-of-way applications.

Section 2804.27 What Fees Do I Owe if BLM Denies My application or if I 
Withdraw My Application?

    This section explains that if BLM denies your application or if you 
withdraw your application you owe the processing fee, unless you have a 
Category 5 or 6 application. If you have a Category 5 or 6 application 
that:
    (A) BLM denied, you are liable for all reasonable costs the United 
States incurred processing it. Consistent with existing policy and 
previous regulations (see previous section 2808.3-3), the money you 
have not paid is due within 30 calendar days after you receive a notice 
of payment; or
    (B) You have withdrawn before BLM issues your grant, you are liable 
for all reasonable processing costs the United States has incurred up 
to the time you withdraw the application and for the reasonable costs 
of terminating your application. Any money you paid that is not used to 
cover costs the United States incurred as a result of your application 
will be refunded to you.
    In the final rule we replaced ``BLM'' with ``the United States,'' 
where we talk about the government incurring costs. This is because BLM 
may not be the only Federal agency that incurs costs in processing your 
application. This is consistent with existing policy and section 504(g) 
of FLPMA. We also added a sentence explaining that any money you paid 
that is not used to cover costs the United States incurred as a result 
of your application will be refunded to you. We added this sentence to 
explain existing policy. With the exception of this change and 
editorial changes, the substance of this section is the same as the 
proposed section 2804.22.

Section 2804.28 What Processing Fees Must I Pay for a BLM Grant 
Application Associated With Federal Energy Regulatory Commission (FERC) 
Licenses or Relicense Applications To Which Part I of the Federal Power 
Act (FPA) Applies?

    This section requires that you pay BLM the costs the United States 
incurs in processing your application associated with a FERC licensing 
or relicensing project, other than those described in section 
2801.6(b)(7) of this part. BLM also requires reimbursement for 
processing a right-of-way grant application associated with a FERC 
project licensed before October 24, 1992, that involves the use of 
additional public lands outside the original area reserved under 
section 24 of the FPA. In determining what you owe, BLM will use the 
processing categories in section 2804.14 of this part. FERC will 
address other costs it incurs in processing your license or relicense.
    This section is different from proposed section 2804.24. Section 
2401 of the Energy Policy Act of 1992 (Pub. L. 102-486) amended 
portions of section 501 of FLPMA regarding Federal rights-of-way 
associated with hydropower projects licensed by FERC. The 1992 Act 
amended section 501(a) to authorize the Secretary to issue rights-of-
way with respect to the public lands, including ``public lands, as 
defined in section 103(e) of [FLPMA], which are reserved from entry 
pursuant to section 24 of the Federal Power Act (16 U.S.C. 818).'' BLM 
issues rights-of-way under Title V of FLPMA for public lands withdrawn 
and reserved under the Federal Power Act. The Energy Policy Act also 
amended section 501 of FLPMA by adding a new paragraph (d), which 
provides that no right-of-way authorization is required for continued 
operation on FPA-reserved lands of a project that did not receive a BLM 
right-of-way prior to October 24, 1992. We inadvertently omitted 
regulations to implement these provisions from proposed section 
2804.24. Therefore, we revised final section 2804.28 to be consistent 
with the statutory changes.

Section 2804.29 What Activities May I Conduct on the Lands Covered by 
the Proposed Right-of-Way While BLM Is Processing My Application?

    This section explains that you, or any member of the public, may 
conduct casual use activities on the BLM lands covered by your 
application. For activities that are not casual use, you must get prior 
BLM approval. ``Casual use'' is defined in section 2801.5 of this final 
rule. With the exception of editorial changes, the substance of this 
section is the same as proposed section 2804.25.

Subpart 2805--Terms and Conditions of Grants

    This subpart contains information and policies about:
    (A) The terms and conditions of grants;

[[Page 20997]]

    (B) When a grant is effective;
    (C) The rights that grants convey and that the United States 
retains; and
    (D) Information about monitoring costs.

Section 2805.10 How Will I Know Whether BLM Has Approved or Denied My 
Application?

    This section contains some new information and explains that BLM 
will send you a written response to your application. If we do not deny 
your application, we will include an unsigned right-of-way grant for 
you to review, sign, and return that:
    (A) Will include any terms, conditions, and stipulations that BLM 
determines to be in the public interest. This includes modifying your 
proposed use or changing the route or location of the facilities;
    (B) May prevent your use of the right-of-way until you have an 
approved Plan of Development and BLM has issued a Notice to Proceed; 
and
    (C) Will impose a specific term for the grant and may include 
provisions for periodic review of the grant and its terms and 
conditions.
    These provisions were part of previous regulations.
    Under this section, if you agree with the terms and conditions of 
the unsigned grant, you should sign and return it to BLM with any 
monitoring fee payment that may still be due for the application. If 
the regulations in this part, including section 2804.26, remain 
satisfied, BLM will then sign the grant and return it to you with a 
decision letter.
    If you do not agree with any of the terms and conditions contained 
in the grant, you may appeal BLM's decision to IBLA under section 
2801.10 of this part.
    If BLM denies your application, we will send you a written 
decision:
    (A) Stating the reasons for the denial;
    (B) Identifying any processing costs you must pay; and
    (C) Notifying you of your right to appeal the decision.
    These provisions are consistent with existing policy and previous 
regulations (see previous section 2808.3-3). The substance of this 
section is the same as proposed section 2804.19(e).
    Several commenters said that the language allowing BLM to include 
in a grant any terms or conditions that BLM determines are in the 
public interest is ``gratuitous.'' We disagree. Section 505(b) of FLPMA 
provides that a right-of-way grant contain such terms and conditions as 
the Secretary deems necessary to, among other things, ``otherwise 
protect the public interest in the lands traversed by the right-of-way 
or adjacent thereto.'' The regulatory language implementing that 
provision of FLPMA was in the proposed rule at section 2804.20(e)(1), 
and is in final section 2805.10(a)(1).

Section 2805.11 What Does a Grant Contain?

    The grant states what your rights are on the lands subject to the 
grant and describes what lands you may use or occupy. These lands may 
or may not correspond to the lands in your application. This section 
lists the factors BLM considers when determining which lands to include 
in the grant. This section contains the same four provisions as those 
in proposed section 2805.10(a) and explains that your grant will state 
the length of time that you are authorized to use the right-of-way and 
lists the factors BLM will consider in establishing the term of the 
grant.
    In the final rule we added a provision stating that BLM will limit 
the grant to those lands on which we determine operations will not 
result in unnecessary or undue degradation. We added this provision 
because FLPMA directs BLM, in managing the public lands, to take any 
action necessary to prevent unnecessary or undue degradation of the 
lands (see 43 U.S.C. 1732(b)). We believe that in order to comply with 
FLPMA's mandate, it is necessary to take into consideration the 
unnecessary or undue degradation standard when determining which lands 
to include in a right-of-way grant. Section 504(a)(4) of FLPMA sets 
forth similar, though not identical, language (see 43 U.S.C. 
1764(a)(4)).
    We added a provision to this section stating that the time 
necessary to accomplish the purpose of the grant is a relevant factor 
in fixing the duration of the grant. We inadvertently omitted this 
provision from the proposed rule. This provision, which was in previous 
section 2801.1-1(h), is consistent with section 504(b) of FLPMA and is 
necessary for us in determining the appropriate length of the term of a 
grant.
    In the final rule we also added a provision to this section stating 
that all grants, except those issued for a term of less than one year 
and those issued in perpetuity, will expire on December 31 of the final 
year of the grant. The reason we added this provision is so that the 
expiration date of a grant will coincide with the calendar year rental 
term.
    Several commenters stated that granting an ``easement'' on lands 
that do not correspond to those in the application is unacceptable, 
since doing so may make the grant ``unsatisfactory to accomplish the 
desired project.'' In processing your application, BLM will examine 
your proposed action, and consider all reasonable alternatives to 
accomplish your purpose, including the no action alternative. We 
develop alternatives in consultation with the applicant and potentially 
affected parties. If BLM were to select an alternative that did not 
satisfy you or one that contained conditions or stipulations that were 
unsatisfactory to you, you may challenge those conditions by appealing 
BLM's decision to the IBLA under section 2801.10 of this part.

Section 2805.12 What Terms and Conditions Must I Comply With?

    This section explains that by accepting a grant, you agree to 
comply with and be bound by the terms and conditions set forth in this 
section. This section requires that during construction, operation, 
maintenance, and termination of the project you must:
    (A) To the extent practicable, comply with all existing and 
subsequently enacted, issued, or amended Federal laws and regulations 
and state laws and regulations applicable to the authorized use. We 
made minor changes to this paragraph and added the phrase ``To the 
extent practicable,'' which was inadvertently omitted from proposed 
section 2805.10. The phrase has been in the Department's regulations 
since 1980 and is set forth here to qualify a holder's compliance with 
Federal and state laws and regulations applicable to the authorized 
use. Practicability is important because a right-of-way may cross 
through multiple jurisdictions, and strict compliance with the laws and 
regulations of each may be impractical and inefficient. The phrase will 
be interpreted as in years past. This section also makes clear that a 
holder must comply with any changes to applicable law or regulation 
that occur during the term of the right-of-way grant. This is 
consistent with long-standing BLM policy and previous section 2801.2;
    (B) Rebuild and repair roads, fences, and established trails 
destroyed or damaged by the project;
    (C) Build and maintain suitable crossings for existing roads and 
significant trails that intersect the project;
    (D) Do everything reasonable to prevent and suppress fires on or in 
the immediate vicinity of the right-of-way area;
    (E) Not discriminate against any employee or applicant for 
employment during any phase of the project because of race, creed, 
color, sex, or national origin. You must also require subcontractors to 
not discriminate;

[[Page 20998]]

    (F) Pay monitoring fees and rent described in section 2805.16 of 
this subpart and subpart 2806 of this part;
    (G) If BLM requires, obtain, and/or certify that you have obtained, 
a surety bond or other acceptable security to cover liabilities and 
obligations listed in the regulations. BLM may require a bond, an 
increase or decrease in the value of an existing bond, or other 
acceptable security at any time during the term of the grant;
    (H) Assume full liability if third parties are injured or damages 
occur to property on or near the right-of-way (see section 2807.12);
    (I) Comply with project-specific terms, conditions, and 
stipulations, including those listed in the section. This paragraph 
contains editorial changes to make it easier to understand. BLM added 
the term ``and stipulations'' to the first sentence of paragraph (i) to 
make it clear that a grant may contain standard terms and conditions, 
and also stipulations that address site-specific conditions. The final 
rule lists seven types of requirements that BLM typically adds to 
grants in the form of site-specific terms, conditions, or stipulations. 
Paragraph (i) is not new to our regulations (see previous section 
2801.2(b)). Paragraph (i)(4) of this section uses different terminology 
than that in the proposed rule. In the final rule we replaced the term 
``subsistence purposes'' with the term ``subsistence uses'' since that 
is the term used in the appropriate statute (see 16 U.S.C. 3111 et 
seq.). We also added a new paragraph (i)(6) to this section requiring 
you to comply with state standards for public health and safety, 
environmental protection, and siting, constructing, operating, and 
maintaining any facilities and improvements on the right-of-way when 
state standards are more stringent than Federal standards. This 
provision is authorized by section 505(a) of FLPMA and is in previous 
regulations at section 2801.2(b)(6). We inadvertently omitted it from 
the proposed rule;
    (J) Immediately notify all Federal, state, tribal, and local 
agencies of any release or discharge of hazardous material reportable 
to such entity under applicable law. You must also notify BLM at the 
same time, and send BLM a copy of any written notification you 
prepared. The proposed rule did not include ``tribal'' in the list of 
jurisdictions that you must notify in case of a hazardous material 
spill. BLM added the term ``tribal'' because Federal lands are 
frequently intermingled with tribal lands for many large linear right-
of-way projects and tribes should be notified of any hazardous material 
spill that may occur as a result of operations on a FLPMA right-of-way;
    (K) Not dispose of or store hazardous materials on your right-of-
way, except as provided by the terms, conditions, and stipulations of 
your grant. Any storage of hazardous waste on site must be in 
compliance with applicable Federal and state law;
    (L) Certify your compliance with all requirements of the Emergency 
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et 
seq. (EPCRA), when you receive, assign, renew, amend, or terminate your 
grant. Unless provided otherwise, your signature on an application is 
certification that you have complied with these requirements. This 
provision is consistent with proposed section 2805.10(c)(11). We added 
``amend'' to the list of events when you must certify that you are 
complying with EPCRA. We added it to address situations where a change 
in your use would require a grant amendment. We deleted the 
requirements of annual certification due to commenter's concerns. 
Please see the discussion of comments that follows for an explanation 
of why we eliminated the annual certification;
    (M) Control and remove any release or discharge of hazardous 
materials on or near the right-of-way arising in connection with your 
use and occupancy of the right-of-way, whether or not the grant 
authorizes release or discharge. You must also remediate and restore 
lands and resources affected by the release or discharge to BLM's 
satisfaction and to the satisfaction of any other Federal, state, 
tribal, or local agency having jurisdiction over the land, resource, or 
hazardous material. We added ``tribal'' to this paragraph because a 
tribe could have jurisdiction over land near the right-of-way;
    (N) Comply with all liability and indemnification provisions and 
stipulations in the grant;
    (O) As BLM directs, provide diagrams or maps showing the location 
of any constructed facility. This paragraph is new to the final rule. 
This provision allows BLM to require you to file an as-built survey or 
diagram of the right-of-way facility. Frequently, during the 
construction of a project, BLM approves or even requires changes from 
the original design. These changes may not be incorporated into the 
design drawings or surveys. BLM added this requirement so that if there 
are changes to a right-of-way facility during construction, we will 
have the most up-to-date design drawings and surveys for our records. 
This ongoing policy is consistent with previous section 2802.3; and
    (P) Comply with all other stipulations that BLM may require.
    Except for the changes listed above, and minor editorial changes, 
this section contains provisions substantially the same as those in 
proposed section 2805.10(c).
    Several commenters said that the final rule should make it clear 
that under proposed section 2805.10(c)(1) (final section 2805.12(a)), 
BLM should not require applicants to comply with state requirements 
concerning radio frequency (RF) emissions. They said that would 
contravene section 704(a)(7)(B)(4) of the Telecommunications Act of 
1996 which prohibits state and local governments from regulating 
directly or indirectly ``the placement, construction, and modification 
of personal wireless facilities on the basis of the environmental 
effects of radio frequency emissions to the extent that such facilities 
comply with the [Federal Communications] Commission regulations 
concerning such emissions.'' This is not the forum to decide the merits 
of the commenters' statement. The final rule makes clear that a holder 
must comply to the extent practicable with applicable Federal and state 
law and regulations. Statutes and case law addressing the issue of pre-
emption will determine the question posed by the commenters.
    Several commenters said that proposed section 2805.10(c)(3) (final 
section 2805.12(d)) makes it sound like every right-of-way holder must 
have a fire department. They also said that the requirement is new and 
could be very costly. BLM disagrees. This provision is in previous 
regulations at section 2801.2(a)(4) and has been BLM policy for many 
years. BLM has, on rare occasions, enforced this provision when, for 
example, during construction activities, the holder's or holder's 
contractor's equipment was used for immediate fire suppression 
activities on a fire caused by actions of the holder. More importantly, 
this condition requires holders to maintain their rights-of-way so as 
not to create a fire hazard. BLM expects holders to do only what is 
reasonable to prevent and suppress fires in the immediate vicinity of a 
right-of-way. As a practical matter, BLM will not allow unauthorized 
equipment or untrained personnel to work on any wildland fire.
    Several commenters said that it is inappropriate to include 
provisions relating to discrimination in these regulations as there are 
already laws relating to discrimination and including it here is 
duplicative. BLM disagrees. This provision is in previous regulations

[[Page 20999]]

at section 2801.2(a)(2) and is carried forward into the final rule.
    BLM received many comments regarding bonding. Several commenters 
said that we should allow for bonding coverage to include statewide or 
nationwide oil and gas bonds. We disagree. Statewide and nationwide oil 
and gas bonds are not an acceptable security for MLA or FLPMA right-of-
way grants. Oil and gas leases and right-of-way grants are separate 
instruments, with different terms, conditions, and liabilities, and 
authorize different activities in different locations. An oil and gas 
lease bond covers only those activities on the lease; a right-of-way 
bond covers those activities off the leased lands and on the grant. 
Generally speaking, a lessee would not need a right-of-way to conduct 
activities or to construct or to maintain lease-related structures, 
including roads, on an oil and gas lease. Lessees would need right-of-
way grants for those activities and structures off the lease, such as 
roads connecting drill pads when the roads go off the lease or to 
connect leases. For these reasons, BLM separately bonds oil and gas 
leases and right-of-way grants.
    Another commenter asked BLM to limit the amount of the bond. We 
assume the commenter means we should only require the minimum amount in 
a bond to recover any losses or damages resulting from construction or 
operation of a right-of-way. BLM calculates what is needed to recover 
possible losses, damages, or injuries associated with a right-of-way on 
a case-by-case basis. Bonding continues to be part of BLM standard 
operating procedures. Previous section 2803.1-4 also required bonding.
    Proposed section 2805.10(c)(6) and final section 2805.12(g) add to 
our existing regulations by specifically requiring that bonding cover 
releases or discharges of hazardous materials and by allowing BLM to 
adjust bonding limits over the life of the grant to meet changing 
conditions. Previous section 2803.1-4 allowed BLM to require a bond to 
secure the obligations imposed by the grant and applicable laws and 
regulations. We consider the release or discharge of hazardous 
materials to be an appropriate consideration when setting a right-of-
way bond. This regulation makes explicit what has up to now been 
implicit in our regulations. BLM continues to believe that bonding of 
right-of-way grants is an effective way to protect the Federal 
Government from liabilities associated with right-of-way operations, 
including any liability associated with the use of hazardous materials.
    Another commenter believed that there was no justification for 
automatic increases in a bond. Under this final rule there is no 
automatic increase in the bond amount. The final rule allows BLM to 
increase or decrease the amount of an existing bond at any time during 
the term of a grant if changing conditions warrant it. BLM's experience 
in monitoring grants indicates that there are occasions when conditions 
on a grant change sufficiently to require an increase or decrease in 
the face amount of the bond. For example, if during construction, BLM 
discovers conditions such as unstable slopes or highly erosive 
conditions that we did not identify during application processing, BLM 
could increase the bond amount during the reclamation and restoration 
phase to take into consideration the potential additional liability 
that these conditions may cause. Likewise, BLM may reduce bond amounts 
when you satisfactorily complete components of a project or there are 
other changes in conditions that lower the potential liability of 
right-of-way operations.
    Several commenters objected to the requirement in proposed section 
2805.10(c)(9) that a grant holder notify authorities of any actual or 
threatened release or discharge of hazardous materials. Several 
commenters suggested that we replace the phrase ``actual or 
threatened'' with ``reportable.'' In response to this comment, we 
reworded the final rule at section 2805.12(j) by removing the phrase 
``actual or threatened'' and limiting notification requirements to 
releases or discharges reportable to the named authorities under 
applicable law.
    Several commenters said that proposed section 2805.10(c)(9) is too 
broad since it requires reporting of releases, no matter how small, 
whereas CERCLA requires notice of only reportable quantities of 
hazardous substances. EPA regulations at 40 CFR 302.4 establish a 
specific threshold amount for each substance, commenters noted. We 
reworded the final rule to make clear that the section only applies to 
reportable releases or discharges of hazardous materials. The final 
rule makes clear that if reporting is required under applicable law, 
the grant holder must notify BLM at the same time that it notifies 
appropriate authorities. Under the final rule, the holder must provide 
BLM a copy of any written notification required under applicable law at 
the same time that the holder sends it to the appropriate regulatory 
authority. We believe this notification is reasonable in light of 
FLPMA's mandate that BLM protect public lands and resources.
    A few commenters objected to proposed section 2805.10(c)(10), which 
prohibits a grant holder from storing hazardous materials on the grant 
for more than 90 days, less if required by law. These commenters stated 
that crude oil would be stored on a lease for the life of a producing 
oil well, and other chemicals may be stored for longer than 90 days. 
The commenters said BLM's proposed rule goes beyond the agency's 
jurisdiction and duplicates other requirements. BLM deleted from this 
final rule the prohibition for on-site storage of hazardous materials 
beyond 90 days. Final section 2805.12(k) prohibits any storage or 
disposal of hazardous materials that is not provided for by the terms, 
conditions, or stipulations of the grant. This means that you may store 
or dispose of hazardous materials on the right-of-way, only if the 
grant specifically authorizes that storage or disposal. In approving a 
grant, BLM may place restrictions on the amount of hazardous materials 
stored or disposed of, the length of the time during which such 
material may be stored or disposed of, and the manner in which such 
storage or disposal may take place, among other conditions. Any storage 
of hazardous waste on site must be in compliance with applicable 
Federal and state law.
    Several commenters said that there is no rationale for requiring an 
annual report for each grant on EPCRA and said that proposed section 
2805.10(c)(11) defeats the purpose of streamlining and creates even 
more burden on industry and applicants. Commenters also said that 
right-of-way grantees must already file this under title III of the 
Superfund Amendments and Reauthorization Act. In the final rule we 
removed the requirement for an annual statement from each holder, but 
we expect grant holders to notify BLM, as appropriate, should reporting 
conditions change on their right-of-way, even if there is not an 
assignment, renewal, amendment, or termination action. The purpose of 
this provision is to ensure that BLM has current information about a 
holder's use of certain substances on a right-of-way by requiring 
certifications stating that a holder has complied with EPCRA, including 
emergency reporting, timely submission of inventory forms, preparation 
of emergency response plans, and reporting of toxic chemical releases.
    Several commenters suggested that proposed paragraph 2805.10(c)(12) 
be amended to read ``to a condition as near as possible (or practical) 
to the area's original condition'' rather than to the satisfaction of 
the BLM. We did not change the final rule as a result of this

[[Page 21000]]

comment. In enforcing this final rule at section 2805.12(m), BLM 
expects, in general, to require remediation and restoration to pre-
release conditions. However, BLM is responsible for administration of 
the public lands and is ultimately responsible for determining what is 
acceptable reclamation. BLM cannot rely solely on cleanup standards and 
requirements imposed by other regulatory agencies, because those 
standards and requirements vary widely among jurisdictions, and 
frequently only require that significant public health risks be abated. 
BLM has obligations under FLPMA and other laws to protect public lands 
and resources from degradation and must make the final determination as 
to the adequacy of any remediation or restoration.
    A number of commenters objected to the requirement in proposed 
section 2805.10(c)(12) that a holder control and remove any release or 
discharge of hazardous materials that occurs on or near the right-of-
way. One commenter said that a grantee's duties should be limited to 
those releases and discharges for which a grantee is personally 
responsible because a grantee cannot always restrict access to the 
right-of-way. The commenter said that to control any release on or near 
the right-of-way is an impossible standard. For example, a hunter might 
change the oil in his car while waiting for the birds to come in, or an 
unknown person might dump a load of old batteries and oil filters on a 
right-of-way. The commenter asked how an operator can be held 
responsible for an occurrence near his right-of-way that he has no 
control over. We amended the proposed rule because of these concerns. 
The final rule at section 2805.12(m) imposes an obligation on the 
holder to control and remove any release or discharge of hazardous 
materials arising in connection with the holder's use and occupancy of 
the right-of-way. That is, the grant holder is responsible for 
controlling any release or discharge of such material on or near the 
right-of-way, and attributable to the holder's operations. For example, 
the holder will be responsible for remediating any such releases or 
discharges, whether on the right-of-way or nearby areas, caused or 
contributed to by its construction, use, operation, or maintenance 
activities.
    BLM does not agree, however, that a holder's obligation to control 
and remove releases or discharges of hazardous materials should be 
limited to those releases or discharges caused by the holder. Final 
section 2807.12(b)(2) and its predecessor 43 CFR 2803.1-5(b) impose 
strict liability upon a holder for costs incurred by the United States 
to control or abate conditions, such as fire or oil spills, which 
threaten life, property, or the environment. Consistent with this 
strict liability, holders have a corresponding duty to control and 
remove any release or discharge of hazardous materials, notwithstanding 
the conduct of a third party causing such release or discharge. Thus, 
if a third party enters onto a right-of-way and causes a release or 
discharge of hazardous materials resulting from activities or 
facilities associated with the right-of-way area, even if the release 
or discharge is unauthorized by the grant holder, the grant holder must 
control and remove the hazardous materials. The grant holder can, as 
provided under applicable state or Federal law, seek contribution or 
reimbursement from any otherwise liable third party. Subrogation 
provisions appear at final section 2807.12(b)(5) and previous section 
2803.1-5(c).
    In providing in final section 2805.12(m) that a holder's 
remediation and restoration obligations go beyond the boundaries of the 
right-of-way, BLM intends that holders fully address releases and 
discharges of hazardous materials attributable to the holder's 
operations. Thus a holder's duty extends to any such release or 
discharge on the right-of-way itself and on any nearby lands to which 
the release or discharge has migrated. This duty to address a release 
or discharge of hazardous materials off Federal lands does not enlarge 
the geographic scope of a holder's duty. Previous 43 CFR 2803.1-5(b) 
and final section 2807.12(b) extend a holder's strict liability to 
costs incurred by the United States to control or abate conditions, 
such as fire and oil spills, which threaten lives, property, or the 
environment, regardless of whether the threat occurs on areas that are 
under Federal jurisdiction.

Section 2805.13 When Is a Grant Effective?

    This section explains that a grant is effective after you and BLM 
sign it and that you must accept its terms and conditions in writing 
and pay any necessary rent and monitoring fees. In general, the process 
involves BLM sending you an unsigned right-of-way grant and you 
returning the signed grant for BLM's signature. The package we send you 
will include a:
    (A) Grant, containing terms, conditions, and site specific 
stipulations;
    (B) Determination of the estimated rental, if appropriate; and
    (C) Monitoring fee determination, if that determination was not 
previously made.
    You must accept the provisions of the grant and signify that by 
signing the grant and sending it back to BLM with any required rental 
payment and monitoring fee payment. When BLM receives the grant and all 
fees and signs the grant, it is effective. You may also ask BLM for the 
process to occur face-to-face, so that you may avoid delays caused by 
mailings. This section was proposed as section 2805.11.

Section 2805.14 What Rights Does a Grant Convey?

    This section explains that the grant conveys only those rights it 
expressly contains and that BLM issues the grant subject to valid 
existing rights of others, including the United States. The grant 
conveys to you the right to:
    (A) Use the lands described in the grant for authorized purposes;
    (B) Allow other parties to use, and charge for the use of, your 
facilities on the grant for authorized purposes. You may do this only 
if the grant specifically authorizes it or BLM authorizes or requires 
it in writing;
    (C) Allow others to use your right-of-way as your agent;
    (D) Do minor trimming, pruning, and removing of vegetation to 
maintain the right-of-way or facility;
    (E) Use common varieties of stone and soil which are necessarily 
removed when constructing part of the project, without additional BLM 
authorization or payment, in constructing other parts of the project 
within the authorized right-of-way; and
    (F) Assign the grant to another, provided that you obtain BLM's 
prior written approval.
    With the exception of editorial changes, this final section 
contains the same requirements as proposed section 2805.12.
    One commenter said that the second sentence of proposed paragraph 
(b) should be rewritten to read: ``Otherwise, you may not let anyone 
else use your facility unless BLM authorizes it.'' The commenter said 
that the phrase ``or requires it in writing'' should be stricken. BLM 
disagrees. Paragraph (b) says that you may not allow other parties to 
use your facility unless your grant specifically authorizes it or BLM 
authorizes it or requires it in writing. This means that when a third 
party wants to use your facility and your grant does not specifically 
allow you to sublease your facility or approve the third party use, the 
third party must request and receive a separate right-of-way grant from 
BLM for the use.

[[Page 21001]]

    If the added third party use is a change of use on your right-of-
way, you must request an amendment to your grant so BLM can recognize 
the change in use of the facility beyond what was originally granted. 
An example of this is a proposal for a third party phone cable to be 
installed on an existing electric power distribution line right-of-way. 
If the power line grant did not provide for the phone cable, we would 
require a new right-of-way grant for the phone company use and an 
amendment to the power line right-of-way grant to recognize the change 
in use of the original grant. Experience has shown that there are 
circumstances where BLM will require joint use of an authorized 
facility. For example, we may condition access road grants with 
requirements that you share maintenance responsibilities with other 
authorized road users. This is consistent with final section 
2805.15(b), which allows BLM to require common use of your right-of-way 
for compatible uses.
    The same commenter opposed BLM requiring grant holders to allow 
joint-use on power poles without full consent, a joint-use agreement 
with the second party, and full compliance with the National Electrical 
Safety Code. Paragraph (b) does not give BLM authority to authorize a 
third party to use a grant holder's facility without the holder's 
permission, unless that grant specifically stated that the holder would 
provide space for additional users. The paragraph limits the holder's 
ability to lease or sublease its facility to another party without 
first obtaining BLM approval.
    Several commenters said that the final rule should make clear 
whether BLM intends to preclude electric utilities from charging the 
``just and reasonable rates'' utilities are required to charge 
telecommunications entities who attach facilities to existing utility 
structures under the authority of the Pole Attachments Act (47 U.S.C. 
224). BLM believes the comments are outside the scope of these 
regulations. There is nothing in the final rule that affects the rights 
of a holder to charge a reasonable rate to a telecommunications utility 
that wants to attach facilities to existing structures.
    One commenter wanted a more thorough explanation of the minor 
trimming, pruning, and vegetation removal allowed to maintain a right-
of-way facility because of the importance to insure safety and 
reliability on electric utility rights-of-way. The commenter suggested 
that we amend paragraph (d) by adding ``for the prevention of fire, and 
promotion of public health and safety, using appropriate industry 
standards, and in accordance with an integrated vegetation management 
plan if one is warranted and has been developed as part of the terms of 
the grant'' to the end of the sentence. The commenter said that the 
practice of charging timber cost for the removal of trees that 
jeopardize facilities in an authorized right-of-way is inconsistent 
with the partnership established between BLM and the grant holder at 
the time of the grant regarding safety and fire prevention. Further, 
the commenter said that the regulations should be clarified to exempt 
the cost of removing timber or other vegetation immediately adjacent to 
a grant. The commenter said that holders should not be charged for 
removing trees that may fall into transmission wires and result in 
fires, outages, or injuries to personnel maintaining the right-of-way.
    BLM did not amend the final rule as a result of these comments. 
However, we will describe our trimming, pruning, and removal practices 
in the terms and conditions of the grant, and they will be part of the 
grant's plan of development, as necessary. We recognize the need for 
utility companies to perform maintenance pruning, trimming, and 
clearing under aboveground electric distribution and transmission lines 
for safety purposes. Minor pruning, trimming, and clearing refers only 
to maintenance activities after the right-of-way is constructed, not to 
removal of vegetation during initial construction.
    Any time a holder plans to remove vegetation that is not authorized 
by the terms of the grant or that falls outside the boundary of the 
right-of-way, the holder must submit to BLM a request for approval to 
perform those activities prior to commencing the activity (see section 
504(f) of FLPMA). Although not specifically mentioned in the proposal 
or this rule, the Materials Act of July 31, 1947, as amended (30 U.S.C. 
601, 602), requiring you to pay for the removal of merchantable timber 
or common varieties of stone, applies to rights-of-way issued under 
these regulations (see 43 CFR parts 3600 and 5400). Once you construct 
on the right-of-way, you may perform minor trimming, pruning, and 
clearing of lands covered by the grant to maintain safety of right-of-
way operations. If you need to perform additional work outside the 
boundary of the right-of-way, BLM would require an amended grant or new 
approval. We recommend that you plan and request this well in advance 
of the anticipated work schedule.
    Many utility companies are now cooperating with Federal agencies in 
preparing vegetative treatment plans on a landscape basis to reduce the 
threat of catastrophic fires. These plans address vegetation treatment 
projects near large transmission facilities to help prevent 
catastrophic fires from damaging transmission facilities.
    Oil and gas industry commenters recommended that the following 
language should be incorporated as terms and conditions in lieu of 
BLM's language:

    Lessees and operators have the responsibility to see that their 
exploration, development, production, and construction operations 
are conducted in a manner that conforms with:

(a) Applicable Federal laws and regulations;
(b) State and local laws and regulations;
(c) Terms and conditions of permits and other approvals;
(d) Notices to Lessees; and
(e) Written orders or other BLM instructions.

    BLM did not change the final rule as a result of this comment. The 
language suggested by the commenters is too broad to be useful for 
terms and conditions in FLPMA and MLA right-of-way grants. We believe 
the terms and conditions in this final rule are more appropriate for 
both FLPMA and MLA right-of-way grants than those listed by the 
commenters.

Section 2805.15 What Rights Does the United States Retain?

    This section describes the rights that the United States retains 
when it issues a right-of-way grant. The United States retains any 
rights the grant does not expressly convey to you, including the right 
to:
    (A) Access the lands covered by the grant at any time and enter any 
facility you construct on the right-of-way. BLM will give you 
reasonable notice before it enters any facility on the right-of-way;
    (B) Require common use of your right-of-way, including subsurface 
and air space, and authorize use of the right-of-way for compatible 
uses. You may not charge for the use of the lands made subject to such 
additional right-of-way grants. Proposed section 2805.13(b) stated BLM 
could require common use of the land in your right-of-way. BLM has 
reworded the paragraph and added the phrase ``including subsurface and 
air space'' to the final rule to make it clear that BLM would also 
consider the subsurface and associated air space, including air waves, 
to be areas open to common use. The interest granted in a FLPMA (or 
MLA) right-of-way is, and always has been, a non-exclusive right (see 
section 503 of FLPMA). It does not convey to the holder any right to 
use the land for purposes other than those stated in the grant;
    (C) Retain ownership of the resources of the land. You have no 
right to use

[[Page 21002]]

these resources, except as noted in section 2805.14 of this subpart;
    (D) Determine whether or not your grant is renewable; and
    (E) Change the terms and conditions of your grant through changes 
in legislation or regulation or as otherwise necessary to protect 
public health or safety or the environment.
    Except for the changes noted above, and minor editorial changes, 
the requirements of this section are the same as proposed section 
2805.13.
    Several commenters said that BLM should not be allowed access to 
right-of-way grant areas until its employees can demonstrate adequate 
safety training commensurate with the facility. BLM did not amend the 
final rule to address this comment, but agrees with the comment's 
emphasis on safety. Should activities on the lands in a right-of-way 
grant pose any kind of threat to any visitors of a site, whether during 
construction or operation of the facility, the holder should provide 
adequate safety training to all such visitors. This is not limited to 
BLM personnel, but to anyone visiting the site. It is the holder's 
responsibility to identify unsafe conditions and provide suitable 
training. Where appropriate, this will be a term and condition of a 
grant. Likewise, if any required safety equipment is necessary to visit 
a right-of-way area, the holder should identify those needs and provide 
the appropriate equipment. This is consistent with existing policy.
    A few commenters said that BLM should notify grant holders when 
others request a grant using the same corridor and should allow the 
current grant holder to make recommendations to maintain the integrity 
of its facilities in the corridor. BLM agrees with the comment but did 
not amend the final rule. It is our continued policy to notify all 
affected interests of new right-of-way proposals, especially existing 
right-of-way holders, in situations where we require common use of a 
right-of-way area.
    Several commenters said that it must be clear that both parties, 
BLM and the holder, are bound by grant terms and conditions and BLM 
cannot later change or add conditions. BLM believes it necessary to 
include provisions in the final rule that allow BLM to amend the terms 
and conditions of right-of-way grants. Over the life of a grant, many 
things change that affect management of public lands. New laws are 
passed and new regulations are enacted that holders must comply with. 
Thus, if conditions warrant, BLM must be able to change, add, or delete 
terms and conditions of a grant to comply with these changing 
conditions on affected lands and to protect the public interest. 
Section 2805.12(a) of this final rule is consistent with this position.
    Our position is in harmony with FLPMA. Section 504(e) of FLPMA 
gives the Secretary the authority to ``issue regulations with respect 
to the terms and conditions that will be included in rights-of-way 
pursuant to section 505 of this title,'' and makes revised regulations 
applicable to ``every right-of-way granted or issued pursuant to this 
title and to any subsequent renewal thereof * * *'' In addition, 
protection of public health or safety or the environment is set forth 
at section 506 of FLPMA as a basis for the Secretary to abate and 
temporarily suspend a holder's activities on the right-of-way, even 
prior to an administrative hearing. These two statutory provisions set 
reasonable limits on our ability to change terms and conditions. If BLM 
should add terms and conditions adversely affecting a holder, a right 
of appeal to IBLA would lie under 43 CFR Part 4.

Section 2805.16 If I Hold a Grant, What Monitoring Fees Must I Pay?

    The provisions in this section were proposed in section 2805.14. In 
the final rule we renumbered the monitoring categories and modeled them 
(and the category fees) after the final numbering and associated fees 
of the processing categories in final section 2804.14. We did this to 
make the final rule easier to understand, and to be able to recover the 
necessary costs associated with monitoring a right-of-way grant.
    Under this section you must pay to BLM a fee for the reasonable 
costs the Federal Government incurs in monitoring the following six 
activities: project construction, operation, maintenance, termination, 
and protection and rehabilitation of the public lands the grant covers. 
Category 1 through 4 monitoring fees are one-time fees and are not 
refundable. BLM categorizes the monitoring fees based on the estimated 
number of work hours necessary to monitor your grant.
    In the proposed regulations at section 2805.14(a), we said that BLM 
would use the same category for monitoring as it did in establishing 
the processing fee category. Alternatively, we requested public comment 
on whether to separate processing fees from monitoring fees (see 64 FR 
32109). One commenter thought that processing and monitoring fees 
should remain linked. Another commenter agreed that it is generally 
appropriate to associate monitoring costs with the size of the project, 
and to set a rate schedule accordingly. BLM's alternative proposal 
would establish monitoring fees based on the number of work hours 
required to monitor grants. We have determined that there are enough 
instances where the processing times and monitoring times for a given 
application would not fall into the same category that separating the 
processing and monitoring categories is warranted.
    One commenter stated that BLM should continue to determine both the 
processing and the monitoring category fees as one process because it 
would be more efficient. We disagree with the commenter. BLM will 
determine the processing categories and monitoring categories 
separately, based on hours, as described in the ``revised category 
definitions'' section of the preamble of the proposed rule (64 FR 
32109). Determining processing and monitoring costs separately provides 
a more accurate calculation of reasonable costs. The hours to monitor a 
grant may vary significantly from the hours BLM needs to process the 
application. If there is any increase in staff time to make the 
determinations separately, we expect it to be minimal.
    The final rule uses the total number of hours necessary to ensure 
compliance with the terms, conditions, and stipulations of a grant to 
determine the category. Our rationale for eliminating the proposed 
criteria for setting the monitoring fee is the same as we discussed at 
section 2804.14 of this preamble for eliminating the proposed criteria 
for processing fees.
    For Categories 1 through 4, holders pay monitoring fees in 
accordance with the chart, which will be adjusted annually. For 
Categories 5 and 6, holders pay monitoring fees in accordance with 
signed agreements for those categories (see section 2805.17(b) and 
(c)).
    BLM annually updates Category 1 through 4 monitoring fees in the 
manner described at section 2804.14(c) of this part. BLM updates 
Category 5 monitoring fees as specified in the Master Agreement. The 
monitoring cost schedule is available from any BLM office or on BLM's 
National Home Page on the Internet at http://www.blm.gov and is 
published for calendar year 2005 in the final rule in a chart format.
    In the final rule we added a chart showing monitoring fee amounts 
for each category, similar to the processing fee chart in section 
2804.14(b). The chart clearly describes the divisions between 
monitoring fee categories. We made this chart consistent with the 
anticipated Forest Service rule for cost recovery to minimize confusion 
for those right-of-way customers that do business with both agencies.

[[Page 21003]]

    The Forest Service recommended that we revise the first sentence of 
proposed section 2805.14(b) to read: ``For Categories I through IV, 
there is a one-time payment for all monitoring fees based on a fee 
schedule available from any BLM office.'' BLM agrees that we should 
clarify this. In the final rule we added a sentence to section 2805.16 
to make it clear that Category 1 through 4 monitoring fees are one-time 
fees and are not refundable.
    One commenter thought that categories for monitoring fees based on 
the number of hours it takes to monitor a grant was not an appropriate 
measure because each case and each EA could require different 
monitoring based on the mitigation required for that case. BLM believes 
that by eliminating the link between processing and monitoring fees 
that existed in previous regulations, we will be able to more 
accurately estimate the hours necessary to monitor the grant. When we 
issue a grant, we will have completed an EA or EIS that will set out 
the required mitigation. Therefore, there should be enough information 
to support our estimate of the time required to monitor the project.
    One commenter thought that BLM should not charge for monitoring 
because:
    (A) The costs of monitoring right-of-way grants are paid for out of 
taxpayers' money; and
    (B) Monitoring is a fairly simple, straightforward process.
    BLM disagrees with the comment and did not amend the final rule as 
a result of it. While monitoring can be a fairly straightforward 
process, we believe the costs to perform compliance inspections should 
not be paid for with taxpayers' money. Were it not for the existence of 
the right-of-way, there would not be the need to monitor. The holder of 
the grant should be responsible for these costs. Statutory authority 
supports our position. Section 504(g) of FLPMA gives BLM the authority 
to require right-of-way grant holders to reimburse the United States 
for inspection and monitoring of construction, operation, and 
termination of right-of-way grants. Section 28 of the MLA, 30 U.S.C. 
185(l), provides similar authority.
    One commenter thought that monitoring should be a one time event to 
ensure compliance and not an annual or continuing function. We amended 
the final rule by making it clear in the definition of monitoring (see 
section 2801.5), that we monitor Categories 1 through 4 from the time 
of construction and until the holder completes rehabilitation 
activities and BLM approves them. For Categories 5 and 6, monitoring 
will occur as defined in the agreement for those categories, which may 
include long-term monitoring throughout the life of the project.
    Several commenters thought that taking multiple trips to a right-
of-way was an integral part of the duties of land stewardship and 
should not be charged as part of monitoring fees. They were concerned 
that BLM was proposing to require industry to pay for functions BLM 
currently covers. Under this final rule and previous regulations it is 
the grant holder's responsibility to reimburse the Federal Government 
for monitoring grants. As stated above, section 504(g) of FLPMA makes 
it clear that inspections and monitoring of construction, operation, 
and termination of a facility are costs that the United States can 
require an applicant or holder to reimburse. Most monitoring costs are 
incurred during construction and rehabilitation activities. In order to 
ensure a grant holder is complying with the terms and conditions of the 
grant, it is likely that BLM will make multiple trips to a right-of-way 
area during the construction and rehabilitation phase of the project 
for most types of right-of-way projects that we would not make if there 
were no authorization in place.
    One commenter thought BLM should prorate monitoring fees when the 
costs incurred by the agency are spread over two or more permit holders 
as would be the case with communication sites. The commenter thought 
there should be a fixed schedule in cases where the monitoring activity 
involves a number of different facilities managers/permit holders at 
the same site. They said that BLM's actual monitoring costs per permit 
holder are likely to be lower because monitoring expenses are spread 
over a larger number of permit holders. BLM disagrees and did not amend 
the final rule as a result of this comment. As previously stated, most 
monitoring costs are incurred during construction and rehabilitation 
activities. Even in the case of communication sites where a number of 
facilities are located together, it is unlikely that initial 
construction or other phases of the project would take place for 
multiple holders at the same time. Therefore, prorating monitoring fees 
among various holders, even on a communication site lease, is not 
practical or appropriate.
    Several commenters said that costs associated with BLM's review of 
monitoring data collected by industry should be included in the base 
charge and rental for rights-of-way. We disagree. Section 504(g) of 
FLPMA makes a distinction between rent and those ``reasonable 
administrative and other costs incurred in processing an application * 
* * and in inspection and monitoring.'' Two separate charges are 
authorized, and BLM is careful to avoid mixing the two. BLM typically 
only requests monitoring data for Category 6 applications. In these 
cases, BLM will include the costs of reviewing monitoring data supplied 
by the applicant in our determination of monitoring costs.

Section 2805.17 When Do I Pay Monitoring Fees?

    This section explains that for:
    (A) Monitoring Categories 1 through 4, unless BLM otherwise 
directs, you must pay monitoring fees when you submit to BLM your 
written acceptance of the terms and conditions of the grant;
    (B) Monitoring Category 5, you must pay the monitoring fees as 
specified in the Master Agreement. BLM will not issue your grant until 
it receives the required payment;
    (C) Monitoring Category 6, you must pay the monitoring fee as 
specified in the financial plan of your cost recovery agreement. If BLM 
has underestimated the monitoring costs, we will notify you of the 
shortfall. In addition, BLM may periodically estimate the costs of 
monitoring your use of the grant; and
    (D) Monitoring Categories 1-4 and 6, if you disagree with the 
category BLM has determined for your grant, you may appeal the decision 
under section 2801.10 of this part.

Subpart 2806--Rents

    The final subpart is organized differently from the proposed rule 
in that it is divided into several sections as follows:
    (A) General provisions, applicable to all grants;
    (B) Linear rights-of-way, applicable to linear grants only;
    (C) Communication site rights-of-way, applicable to grants 
containing telecommunications facilities; and
    (D) Other rights-of-way, applicable to miscellaneous grants, such 
as those for wind energy facilities.
    We also divided the final rule into the several different areas by 
subject matter so that it is easier to read and follow.

General Provisions

Section 2806.5 (Proposed) What Definitions Do I Need To Know To 
Understand These Regulations?

    We moved most of the definitions proposed in this section to the 
general definitions section of this rule (see section 2801.5) and 
deleted others from the rule. As a result, we deleted this section from 
the final rule. Please refer to the discussion of section 2801.5 for 
responses to any comments and

[[Page 21004]]

explanations of any changes to the definitions proposed in this 
section.
    We deleted the definitions of ``Reselling'' and ``Zone value'' from 
the final rule. We deleted the definition of ``Reselling'' because the 
term is not used in the final rule. We deleted the definition of ``Zone 
value'' because it is only used in the Per Acre Rent Schedule (see 
final section 2806.20). However, the rule continues to define the term 
``Zone'' (see final section 2801.5) and the schedule makes it clear 
that rent is based on the zone where the linear right-of-way is located 
and that rental values change in each zone.

Section 2806.10 What Rent Must I Pay for My Grant?

    Paragraph (a) of this section explains that before you receive a 
right-of-way grant you must pay in advance a rent that BLM established 
based on sound business management principles and as far as practical 
and feasible, using comparable commercial practices. This section makes 
clear that rent does not include processing or monitoring fees, but is 
in addition to those fees. Also, BLM may exempt, waive, or reduce rent 
as provided in sections 2806.14 and 2806.15 of this final rule.
    Paragraph (b) of this section explains that if your grant was 
issued before FLPMA, you may request an informal hearing with BLM 
before we increase your rent as, for example, a result of initially 
placing your grant on the rent schedule at section 2806.20.
    We amended the final rule to make clear that rent is separate from 
and in addition to processing or monitoring fees to eliminate possible 
confusion for applicants concerning fees that are associated with 
obtaining a right-of-way grant. This section was proposed as the 
opening paragraph of proposed section 2806.10 and with the exception of 
the changes mentioned above and editorial changes, it remains as 
proposed.
    Some commenters asked that the final rule define the term ``sound 
business management principles.'' This term has appeared in BLM's 
rental regulations for over 15 years. When first introduced in 1987, 
BLM described at length the standards and assumptions that inform this 
term (see 52 FR 25811-25818 (July 8, 1987). We did not define ``sound 
business management principles'' in the final rule. We believe it is 
sound business management to determine rent through a system of rent 
schedules. Using rent schedules eliminates the need to prepare an 
individual appraisal report for each of the estimated 3,500 grants and 
leases BLM issues each year. It is not feasible or cost effective to 
prepare, review, and approve individual appraisal reports for each 
right-of-way because of the time and expense required to prepare and 
review appraisal reports. The phrase is in previous section 2803.1-2(a) 
and it is only used once in these regulations in section 2806.10.
    Several commenters asked how BLM establishes fair market value and 
how fair market value compares to the appraised value. Several 
commenters asked if the method for determining fair market value 
established in this section was an accurate method. Another commenter 
said that BLM should establish in the regulations the process for 
determining fair market value.
    As previously explained, BLM uses rent schedules to determine fair 
market value rent for some types of right-of-way grants. The rents in 
the schedules are based on a comparative market analysis of rents for 
rights-of-way in the private sector. Please see the preamble discussion 
in BLM's 1987 rule at 52 FR 25811 for more information. We started 
using a schedule system (in 1987 for the linear schedule and in 1997 
for the communication site schedule) in response to multiple appeals 
and legal challenges to our linear and communication site appraisals 
that we used at the time to determine rent. We believe that if BLM 
reverted to using individual appraisals to determine rent, rentals may 
be higher than under the current schedule system, but the cost to the 
agency to prepare individual appraisals would be more than the amount 
of rent we could collect and therefore would not be justified. BLM 
believes the schedules are customer friendly, efficient to implement 
and use, and reflect fair market value for the use of the land.
    This final rule does not change our existing policy, reflected in 
BLM regulations since 1987 (52 FR 25818, July 8, 1987; 52 FR 36576, 
Sept. 30, 1987, as amended at 60 FR 57070, Nov. 13, 1995) for rent 
schedules for linear rent and since 1995 for communication site rents. 
We developed both the linear rent schedule and the communication site 
rent schedule based on analysis of market data and a great deal of 
public comment and involvement.
    We do not agree with the comment that the process to determine fair 
market value should be established in the rule. BLM is required to 
follow recognized standards in determining fair market value. In 
determining fair market value we rely on the standards in the ``Uniform 
Appraisal Standards for Federal Land Acquisition'' published by the 
Appraisal Institute in cooperation with the Department of Justice and 
the ``Uniform Standards of Professional Appraisal Practice'' published 
by the Appraisal Standards Board.
    Several commenters said that the final regulations should make 
clear what costs the rents are targeted toward recovering and what 
value or rights the payment of rents conveys. The rule does not 
authorize BLM to recover costs through rent collection. With one 
exception, rental payments go directly into the U.S. Treasury and are 
not allocated to BLM. The one circumstance where BLM is allowed to keep 
rental payments is for communication site rights-of-way. In 1996 
Congress passed the 1996 Interior and Related Agencies Appropriation 
Act, which allowed BLM to keep the first $2 million in annual 
communication site rent collections. BLM uses this money to manage 
communication site rights-of-way. We did not change the final rule to 
address this comment.
    The same commenters said that it was unclear to what extent 
improvements on rights-of-way, including the co-location of fiber optic 
transmission facilities, results in additional occupation of Federal 
lands. The commenters said that it seemed reasonable to charge rent for 
the extent to which right-of-way activities foreclose other activities, 
but that it seemed unreasonable to charge grantees additional rent for 
improvements on a line, such as adding telecommunication facilities, 
that have no additional material impact on public lands. We disagree 
with the comment that it is not reasonable to charge rent for co-
located facilities on a right-of-way. BLM establishes rent using 
schedules that reflect what many right-of-way holders pay for 
comparable right-of-way uses on non-public lands.
    BLM issues a non-exclusive grant for right-of-way uses. The terms 
and conditions in BLM grants do not allow additional uses or users 
beyond what the grant specifies. Any co-location of additional 
facilities by third parties requires the party to obtain its own 
separate grant (except in the case of a communication site lease which 
allows third parties to act as customers and tenants without a grant 
from BLM). The third party must pay rent unless the use qualifies for a 
rental reduction or is exempted from paying rent. A proposal by a grant 
holder to co-locate new facilities in an existing right-of-way facility 
requires a grant amendment if there is a substantial deviation or 
change in use from the original grant. Amendments, therefore, usually 
result in added rental for the holder, even when the new use may not 
physically impact public lands. We interpret section 504(g) of FLPMA to 
require the holder to pay the fair market value

[[Page 21005]]

(FMV) of the use of the land, not simply for impacts to the land, as 
the commenter suggests (see 43 U.S.C. 1701(a)(9)). An example of this 
occurs when additional communication facilities are added to an 
existing communication site building with no changes to the structure. 
In many cases, right-of-way grants acquired in the private market do 
not allow the holder to add more facilities without first acquiring 
additional rights from the private landowner at additional cost. BLM 
believes it is reasonable for the Federal Government to require rental 
payments when holders acquire additional rights from BLM to co-locate 
facilities.
    A few commenters said that rents are far too low. They said that 
the public will never receive FMV for rights-of-way unless BLM 
increases rents. This final rule does not change our current policies 
regarding payment of rent except that final section 2806.12 makes 
adjustments to the cycle BLM will use to send out rental notices. We 
believe that existing policy and these regulations provide payment of 
FMV for the use of public lands in accordance with section 504(g) of 
FLPMA (see the preamble to the 1987 rule at 52 FR 25811).

Section 2806.11 How Will BLM Charge Me Rent?

    Paragraph (a) of this section explains that BLM will charge you 
rent beginning on the first day of the month following the effective 
date of the grant through the last day of the month when the grant 
terminates. It also provides an example. This provision will make it 
simpler for field offices to uniformly calculate rents.
    Paragraph (b) of this section explains that BLM will set or adjust 
payment periods to coincide with the calendar year by prorating rents 
based on 12 months.
    We moved the substance of proposed section 2806.10(c) to final 
section 2806.23. Please see the discussion of that section for changes 
to the rule.
    Under final paragraph (c) of this section, if you disagree with the 
rent BLM charges, you may appeal the decision to the IBLA.
    With the exception of editorial changes and the changes noted 
above, this section is the same as proposed sections 2806.10(a), (b), 
and (e).

Section 2806.12 When Do I Pay Rent?

    This section explains that you must pay the rent for the initial 
rental period before BLM issues you a grant. You must make all other 
rental payments for linear rights-of-way according to section 2806.23 
of this subpart.
    This section also explains that after the first rental payment, all 
rent is due on January 1 of the first year of the succeeding rental 
period. We amended the proposed provision of this section to make it 
more administratively efficient to pay and collect rent. This section 
is consistent with previous section 2803.1-2. Prior to the 1987 
regulations, BLM sent rental notices to many right-of-way holders prior 
to the grant's anniversary date and payment was due each year on the 
anniversary date of the grant. This was an ongoing administrative 
burden on BLM personnel because they had to send rental notices to 
holders throughout the entire year on the anniversary date of each 
grant. In a BLM field office that administers thousands of right-of-way 
grants, it made tracking payments and sending rental notices a labor 
intensive task each month. In 1987, BLM modified our right-of-way 
regulations and required that all grants be converted to a calendar 
year billing cycle with rent due January 1 of each year (see 52 FR 
25814). We also started sending consolidated rental notices to the 
holders of multiple grants, instead of multiple notices. This process 
reduces the number of rental notices, and simplifies notifying holders 
of multiple right-of-way grants. A rental notice is provided as a 
courtesy by BLM. Since all of BLM's rental notification workload is 
completed at one time of the year, we find fewer past due rental 
accounts. For these reasons, the final rule carries forward these 
procedures.

Section 2806.13 What Happens If I Pay the Rent Late?

    This section explains that if BLM does not receive your rent 
payment within 15 calendar days after the rent is due (January 15), BLM 
will charge you a late payment fee of $25.00 or 10 percent of the rent 
you owe, whichever is greater, not to exceed $500 per authorization. In 
the proposed rule we asked for your comments on late payment 
assessments and cited 43 CFR 2920.8(a)(3) and 43 CFR 4130.8-1(f) as 
examples. This final provision is similar to existing regulations at 43 
CFR 4130.8-1(f) except that it sets the cap on late payment assessments 
at $500, double the amount in 43 CFR 4130.8-1(f). Under this rule, the 
assessment is for each authorization so that a holder with multiple 
right-of-way grants would be assessed the late payment fee for each 
right-of-way grant. BLM's rental notice is provided as a courtesy. 
Failure to receive a courtesy notice will not excuse late payment of 
rent.
    Under this section, if BLM does not receive your rent payment and 
late payment fee within 30 calendar days after rent is due, BLM may 
collect other administrative fees provided in BLM's National Business 
Center Manual, Collections Reference Guide, 1998, including fees 
chargeable under the Debt Collection Improvement Act, 31 U.S.C. 3701, 
and other statutes. This rule does not change already established 
procedures under the Debt Collection Improvement Act which we follow 
regarding all monetary debts owed.
    If BLM does not receive the rent, late payment fee, and any 
administrative fees within 90 calendar days after the rent is due, BLM 
may terminate your grant under final section 2807.17. If BLM terminates 
your grant for this reason, you may not remove any structures, 
buildings, or equipment without BLM's written permission. Any rent due, 
late payment fees, and administrative fees remain a debt that you owe 
to the United States. Of course, holders may take corrective measures 
within this 90-day period so the grant is not terminated. Proposed 
section 2806.13 stated that BLM may terminate your grant when rent 
payment is delinquent for 30 days after BLM sends you a payment notice.
    If you pay the rent, late payment, and any administrative fees 
after BLM terminated the grant, the grant is not automatically 
reinstated. You must file a new application with BLM. BLM will consider 
the history of your failure to timely pay rent in deciding whether to 
issue you a new grant.
    BLM does not send bills for rent due on a right-of-way grant. 
Instead, BLM sends grant holders a courtesy notice on December 1 for 
any rent that is due on the following January 1. This notice is 
currently generated by our automated lease management system. The 
system consolidates all amounts due for one holder and generates an 
itemized statement for multiple grants. After the first rental payment, 
rent is always due on January 1 of the first year of each succeeding 
rental period for the term of the grant, even if a courtesy notice does 
not reach the holder.
    In addition to the rent, late payment, and administrative fees 
authorized under these regulations, BLM collects interest on 
outstanding debts owed the Federal Government (see 31 U.S.C. 3717). BLM 
currently collects interest for late payment of rental fees and will 
continue to do so after publication of this final rule.
    You may appeal any adverse action BLM takes against your grant to 
the IBLA under section 2801.10 of this part.
    We received several comments on late payment assessments. Several 
commenters supported this concept, as

[[Page 21006]]

it is a standard industry practice to add penalties for late payments. 
One commenter said that the final rule should allow grant holders to 
rectify the error within 90 days of a notice. Several commenters said 
that due to the burden and cost of administering late payment fees, 
they would recommend against using them. In the final rule we adopted a 
late payment fee. If you do not pay your rent, this fee is applied 
automatically 15 calendar days after the due date (e.g., if we do not 
receive your payment by close of business January 15, you will receive 
a notice assessing a late payment fee). We do not agree that holders 
should be given 90 days to rectify errors without assessing the late 
payment fee and did not change the final rule as a result of this 
comment. It is common practice in landlord/tenant situations to charge 
a late payment fee upon default of the payment terms, and we believe it 
is reasonable for the Federal Government to do so.
    One commenter said that it was concerned that under the proposed 
rule, there are situations where a new company could be assessed a 
penalty for a permit that was ``not in the original assignment and was 
found at a later date.'' The commenter said that the cost of the rent 
should rightly be assessed, but the late penalty should not. We agree 
with the commenter in part.
    BLM must approve all proposed assignments in writing before they 
are effective. Prior to this approval, BLM must ensure that the holder 
is in compliance with all terms and conditions of the grant, including 
any rental obligations. Any past due rent, including late fees and 
administrative fees, must be paid before BLM will approve the grant 
assignment to the new entity. The new holder would not be liable for 
late fees or administrative fees incurred by the previous holder, but 
could voluntarily pay past rent, late fees, and administrative fees to 
facilitate completion of the assignment.
    Several commenters said they did not object to late payment charges 
as long as BLM gives the grant holder at least 90 days prior notice 
that rent is due. The commenters said late fees should not apply if 
late payments resulted from BLM's late notice or late credit. BLM 
strives to make sure you receive a courtesy notice of your due rent in 
a timely manner. However, if you do not pay your rent on time, a late 
payment fee will be charged, regardless of whether you received a 
courtesy notice. We do not agree with the comment that holders should 
be given a 90-day notice of rent being due. In many landlord-tenant 
relationships, tenants are not given any notice that rent is due. We 
believe a 30-day courtesy notice is reasonable and provides adequate 
notice. Also, payment of rent is a term and condition of a grant and 
this fact provides additional notice at the outset of the grant of a 
holder's obligation to pay rent.
    Several commenters said the existing regulation's requirements for 
late payment (i.e., grant termination and resubmittal requirements) are 
deterrent enough for late payments and that if BLM decides that there 
should be a late payment fee, the right-of-way industry should be 
involved in setting the guidelines. We disagree with this comment. In a 
1995 report, the Department's Inspector General found that it cost one 
Department of the Interior agency approximately $34 to issue, process, 
and collect individual bills. In light of this finding, the $25 or 10 
percent of the rent owed standard is reasonable, is consistent with 
other BLM regulations (e.g., 43 CFR 4130.8-1(f)), and will apply to 
late payment of right-of-way rents as well.

Section 2806.14 Under What Circumstances am I Exempt From Paying Rent?

    This section explains that you do not have to pay rent for your use 
if:
    (A) BLM issues the grant under a statute which does not allow BLM 
to charge rent;
    (B) You are a Federal, state, or local government or its agent or 
instrumentality, unless you are:
    (1) Using the facility, system, space, or any part of the right-of-
way area for commercial purposes. We added the term ``facility'' and 
the phrase ``any part of the right-of-way area'' to this section to 
help explain that BLM would require a Federal, state, or local 
government to pay rent if any part of the right-of-way area is being 
used for commercial purposes; or
    (2) A municipal utility or cooperative whose principal source of 
revenue is customer charges;
    (C) You have been granted an exemption under a statute providing 
for such; or
    (D) Electric or telephone facilities constructed on the right-of-
way were financed in whole or in part, or eligible for financing, under 
the Rural Electrification Act of 1936, as amended (REA) (7 U.S.C. 901 
et seq.), or are extensions of such facilities. You do not need to have 
sought financing from the Rural Utilities Service to qualify for this 
exemption, but BLM may require you to document the facility's 
eligibility for REA financing. For communication site facilities, the 
addition or inclusion of non-eligible facilities as, for example, by 
tenants or customers, on the right-of-way will subject the holder to 
rent in accordance with sections 2806.30 through 2806.44 of this 
subpart.
    The proposed rule specified that BLM would charge rents to REA 
holders if they operated their right-of-way as a commercial 
communications company, had tenants in their communication site, or 
provided communication services for commercial purposes. We made the 
final rule consistent with the statute and specifically address 
communication site facilities with subleasing provisions.
    We modified the proposed rule to be consistent with changes to the 
statutory provisions dealing with the REA exemptions. In 1996, Congress 
enacted Public Law 104-333, amending section 504(g) of FLPMA to read: 
``Rights-of-way shall be granted, issued, or renewed, without rental 
fees, for electric or telephone facilities eligible for financing 
pursuant to the Rural Electrification Act of 1936, as amended, 
determined without regard to any application requirement under that Act 
or any extensions from such facilities.'' Congress made this change to 
exempt from rent those rights-of-way for electric or telephone 
facilities eligible for REA financing, but not financed through REA. 
Therefore, it is the eligibility of the facilities, rather than the 
eligibility of the owner or operator of the facilities, that is the 
focus of amended section 504(g). If electric or telephone facilities 
within a right-of-way are financed by REA, or are eligible for such 
financing, the right-of-way qualifies for a rent exemption. Thus, large 
utilities and rural cooperatives alike are eligible for rent exemptions 
if the facilities that they build are REA eligible. Previous 
regulations did not reflect the 1996 changes to the statute and final 
paragraph (d) of this section implements current statutory authority.
    Several commenters said that the proposed rent increase would 
disproportionately and adversely impact ``about 750 RUS [Rural 
Utilities System] telephone borrowers that serve sparsely populated 
high cost rural areas.'' The commenters said that they face uncertainty 
about maintaining revenue streams, ever increasing regulatory burdens 
and costs, and ``carrier of last resort'' obligations to serve 
customers throughout their service areas. The commenters said that the 
increases frustrate the goals of the REA and the 1996 
Telecommunications Act. The commenters also said that there are more 
than 200 rural telephone systems eligible for financing, but who do not 
borrow from the Rural Utilities System that administers REA loans, who 
will also be disadvantaged. We believe the

[[Page 21007]]

comments are misplaced because nothing in the proposed or final rule 
increases the amount of rent BLM collects. As explained earlier, REA 
eligible facilities do not pay rent, and the final rule conforms to the 
provisions of section 504(g) of FLPMA.
    Several commenters said that eligibility for telephone loans under 
REA is not determined by corporate structure. They said that section 
201 of REA (7 U.S.C. 922) makes loans eligible to all ``persons now 
providing or who may hereafter provide telephone service in rural 
areas, to public bodies now providing telephone service in rural areas 
and to cooperative, nonprofit, limited dividend, or mutual 
associations.'' One commenter said that the 1996 amendment applied to 
all not-for-profit rural telephone and electric utilities that may 
choose to operate without Federal financing, but not to the exclusion 
of other entities which might be eligible under the amendment. We agree 
and the final rule is consistent with these comments.
    Several commenters said that BLM misinterpreted section 504(g) of 
FLPMA. The commenters said that the 1996 amendment did not restrict the 
rent waiver to non-profit telephone and electric cooperatives whose 
facilities are eligible for REA financing, but expanded the exemption 
to include eligible facilities, regardless of the owner. BLM agrees 
with the commenters that the exemption for REA utilities applies to any 
eligible facility and an entity's non-profit status is not a 
determining factor in whether the facility is qualified for an 
exemption. The final rule is clear on this matter.
    Several commenters said that proposed section 2806.11(d) should be 
deleted in its entirety since it has no basis in the statute and is 
extraneous to it. BLM disagrees. Public Law 104-333 amended FLPMA to 
clarify the exemptions under the REA, and this provision remains in the 
final rule at section 2806.14(d). Based upon the comments above, we 
did, however, replace proposed paragraphs (d)(1), (2), and (3) with a 
new final paragraph (d) that more accurately implements the REA 
exemption. We based these changes on the criteria and definitions in 
the Rural Electrification Act of 1936 and its implementing regulations 
(see the Rural Utilities Service regulations at 7 CFR) for ``eligible'' 
facilities, that is, electric or telephone facilities providing service 
to rural areas. The commenters pointed out that the terms ``telephone 
service'' and ``rural area'' are defined in sections 203(a) and (b) of 
the REA, respectively. Under those provisions, telephone service 
``shall be deemed to mean any communication service for the 
transmission or reception of voice, data, sounds, signals, pictures, 
writing, or signs of all kinds by wire, fiber, radio, light, or other 
visual or electromagnetic means, and shall include all telephone lines, 
facilities, or systems used in the rendition of such service; but shall 
not be deemed to mean message telegram service or community antenna 
television system services or facilities other than those intended 
exclusively for educational purposes, or radio broadcasting services or 
facilities within the meaning of section 3(o) of the Communications Act 
of 1934, as amended.'' Rural area ``shall be deemed to mean any area of 
the United States not included within the boundaries of any 
incorporated or unincorporated city, village, or borough having a 
population in excess of 5000 inhabitants.''
    Final section 2806.14(d) provides rental exemptions to electric or 
telephone facilities that are financed or are eligible for financing 
under the REA. This exemption is for electric or telephone facilities 
that provide service to rural areas. BLM will exempt rent for electric 
or telephone facilities if the facility is either being financed with 
loans pursuant to the REA, or is eligible for financing under that 
statute. BLM may require you to document a facility's eligibility for 
REA financing. Only electric and telephone facilities that serve rural 
areas, as those terms are defined by the REA, are eligible for REA 
loans.
    The last sentence of final section 2806.14(d) only applies to 
communication site authorizations with subleasing provisions. The 
typical right-of-way grant only authorizes a single use. BLM reserves 
the right to issue additional right-of-way authorizations for lands on 
or adjacent to areas described in any previously issued right-of-way. 
The holder does not have the right to sublease to third parties unless 
BLM specifically authorizes it in the grant. BLM only grants subleasing 
rights on a regular basis in authorizations for communication uses and 
facilities, and we will customarily use the term ``leases'' to apply to 
those multiple use authorizations. In these leases the holder and BLM 
have agreed that the holder can lease space in its facility for 
additional communication uses without additional BLM approval and the 
holder is liable for rental payments.
    The REA exemption for communication facilities is limited by the 
statute to ``telephone'' facilities that provide telephone service in a 
rural area. The terms ``telephone service'' and ``rural area'' are 
defined in section 203(a) and (b) of the REA (see above). Non-telephone 
uses (TV and radio broadcasting and message telegram service in 
particular) are not rent-exempt since they are not eligible for 
financing through the REA.
    The last sentence of section 2806.14(d) is intended to provide the 
holder of a rent-exempt authorization with the same benefits that might 
be given to other holders of a communication use authorization. Non-
telephone uses (and the associated facility for those uses such as 
radio and TV broadcasting) cannot be financed via the REA, nor are they 
eligible to be financed via the REA. However, at the request of the 
holder of the rent-exempt authorization, BLM has and will continue 
under this final rule, to allow for subleasing of these non-telephone 
uses. Under these circumstances, BLM will assess rent to the holder 
under final sections 2806.30 through 2806.44 for the non-telephone uses 
within the facility. Thus the holder of the otherwise rent-exempt 
authorization will now pay rent for any facilities not eligible for REA 
financing. This is a benefit to the holder and to BLM since without 
this provision, BLM would either:
    (A) Not allow non-telephone uses in that facility; or
    (B) Issue a separate authorization for the non-telephone uses, and 
assess rent to that holder for that use.
    Several commenters said that the rent waivers for REA-eligible 
facilities prevent a level playing field for those in the electric 
utility industry. This comment is outside the scope of this rule. This 
final rule implements section 504(g) of FLPMA, which requires that we 
provide the exemption to eligible facilities.
    One commenter asked if the rent exemptions are retroactive to the 
date of the Act. Section 1032(b) of Public Law 104-333 provides that 
the amendment to section 504(g) (inserting ``eligible for financing'') 
``shall apply with respect to rights-of-way leases held on or after the 
date of enactment of this Act'' (November 12, 1996). The exemption from 
having to pay rental for REA eligible facilities is established in 
current policy and practice and is not changed by this rule. BLM is not 
currently charging rent to any utility with facilities eligible for REA 
financing unless the utility never told us its facility is eligible or 
requested the rent exemption. Therefore, there should be no retroactive 
exemptions to consider. The burden of notifying BLM of eligibility for 
the rent exemption rests with the right-of-way holder or applicant.

[[Page 21008]]

    Several commenters said that limiting the REA exemption to 
cooperative or non-profit entities would only create another 
disincentive for extending and improving telecommunications service in 
high-cost-to-serve rural areas. The final rule does not restrict or 
limit exemptions to non-profit and cooperative entities. The exemption 
applies to any eligible facility regardless of the holder's 
organizational status. It is worth noting that BLM can consider the 
organizational status of non-profit organizations for rental reduction 
under section 2806.15 of this final rule.
    One commenter said that the tax exemption for non-profits in the 
Federal tax code is section 501(c)(12), not section 501(c)(3). BLM 
amended the proposed rule to make it clear that it is the eligibility 
of a facility for REA financing that is important, not whether or not 
the holder is considered a non-profit organization under the tax code. 
Therefore, for the purposes of these final regulations the question of 
whether the appropriate cite to the tax code is section 501(c)(3) or 
section 501(c)(12) is irrelevant.

Section 2806.15 Under What Circumstances May BLM Waive or Reduce My 
Rent?

    This section explains that BLM may waive or reduce your rent 
payment, even to zero in appropriate circumstances. BLM may require 
that you submit information to support your request for waiver or 
reduction.
    To receive a rental waiver or reduction, you must show BLM that:
    (A) You are a non-profit organization, corporation, or association 
which is not controlled by, or is not a subsidiary of, a profit making 
corporation or business enterprise and the facility or project will 
provide a benefit or special service to the general public or to a 
program of the Secretary. We added the phrase ``and the facility or 
project will provide a benefit or special service to the general public 
or to a program of the Secretary'' to make it clear we do not believe 
that a non-profit entity's rent should be reduced unless, for example, 
the public receives a benefit from the use. Previous regulations only 
required that a holder be a non-profit corporation or association to 
qualify for a waiver or reduction. We made this change because many 
non-profit entities only provide benefits to their members, for 
example, a right-of-way for a homeowners road association. The 
association's status as a non-profit entity would not be the sole 
factor in determining whether to reduce rent. We would consider a rent 
reduction if the road association provided a public benefit such as 
maintenance of a road available to the public at large. The BLM State 
Director could also consider a hardship waiver or reduction under 
paragraph (c) of this section. Therefore, any non-profit grant holder 
has multiple opportunities to request waivers or reductions under the 
final rule;
    (B) You provide without charge, or at reduced rates, a valuable 
benefit to the public at large or to the programs of the Secretary of 
the Interior. This provision is not intended and should not be used by 
either BLM or a holder to avoid the payment of rent in exchange for 
free use of an authorized facility. For example, prior to 1995, it was 
not uncommon for BLM and the FS to require that an applicant reserve a 
percent (typically 20 to 25 percent) of the space in a communication 
facility for use, rent-free, by the agency as a condition of the 
authorization. (The agency would typically house its internal 
communication equipment in the facility.) This practice is no longer 
acceptable;
    (C) You hold a valid Federal authorization in connection with your 
grant and the United States is already receiving compensation for this 
authorization. We reworded this paragraph in the final rule to make 
clear that BLM will provide no waiver or rental reduction for a FLPMA 
right-of-way, such as for a road, that is associated with an oil and 
gas lease. If you need access under FLPMA to reach an oil and gas 
lease, then the holder would pay rent for the off lease road. In the 
final rule we clearly spell out that FLPMA access road grants 
associated with an oil and gas lease are not subject to a waiver or 
reduction in rent; and
    (D) Your grant involves a cost share road or a reciprocal right-of-
way agreement not subject to subpart 2812 of this title. Section 504(g) 
of FLPMA provides that BLM may waive rentals when a FLPMA right-of-way 
holder conveys a right-of-way to the United States in connection with a 
cooperative cost share program between the United States and the 
holder. In these cases, BLM will determine the rent based on the 
proportion of use. For example, if BLM granted a two mile long right-
of-way across public land and the grant holder gave BLM an equivalent 
grant across one mile of its property, under this provision, the holder 
would only pay one-half of the fair market value rent for the FLPMA 
right-of-way. Previous section 2803.1-2(b)(2)(v) stated that BLM may 
waive or reduce rent under similar circumstances.
    This section also explains that if the BLM State Director 
determines that paying the full rent will cause you undue hardship and 
it is in the public interest to waive or reduce your rent, the State 
Director may waive or reduce your rent. Please note that unlike 
paragraph (b) of this section, the BLM State Director makes the 
hardship determination. An undue hardship can be a financial impact on 
a small business or it could involve situations where there is a need 
to relocate the facility to comply with public health and safety and 
environmental protection laws not in effect at the time the original 
grant issued. These conditions are part of existing policy and practice 
and are not changed in the final rule.
    In the final rule we added language to this section to require 
applicants to include information in their requests for rental 
reduction suggesting alternative rental payment plans and time frames 
when applicants expect to resume paying full rental. In addition, BLM 
may also ask for specific financial data or other information that 
corrects or modifies the statement of financial capability required by 
final section 2804.12(a)(5) of this part. The language in final 
paragraph (c) has been clarified so that there will be consistency 
between offices in evaluating requests for hardship rental reductions. 
BLM should approve a rental reduction for hardship reasons only for a 
specified time frame and it will be periodically reevaluated. We 
proposed this section as section 2806.12.

Section 2806.16 When Must I Make Estimated Rent Payments to BLM?

    This section explains that to assist us in the processing of your 
application in a timely manner, BLM may estimate the rental payment and 
collect that amount before it issues the grant. Section 504(g) of FLPMA 
requires you to pay rental in advance of grant approval. Section 
2806.16 does not apply to rental determined from a schedule, only for 
rent BLM otherwise determines. If you make an advance estimated 
payment, BLM will credit any overpayment, and you are liable for any 
underpayment. This provision is consistent with current practice and 
policy (see previous section 2803.1-2(e)(2)) and was proposed in 
section 2806.28(c).

Linear Rights-of-Way

Section 2806.20 What Is the Rent for a Linear Right-of-Way?

    This section contains the linear rent schedule for linear rights-
of-way. The schedule provides consistency in how we determine rent and 
eliminates the need to perform individual appraisals on linear right-
of-way grants. BLM first implemented the linear rent schedule in

[[Page 21009]]

1987 (see 52 FR 25811, 25821, July 8, 1987).
    This section explains that BLM may use an alternate means to 
compute your rent if the rent determined by comparable commercial 
practices or by an appraisal would be 10 or more times the rent from 
the schedule.
    This section also explains that once you are on a rent schedule, 
BLM will use the schedule to calculate rent unless the BLM State 
Director decides to remove you from paying rent under paragraph (d) of 
this section or you file an application to amend your grant. These 
provisions are consistent with existing section 2803.1-2(c)(1)(v) and 
are carried forward in the final rule. Finally, this section explains 
that you may obtain the current linear right-of-way rent schedule from 
any BLM office or from BLM's National Home Page on the Internet.
    One commenter said it opposed the changes proposed section 2806.14 
would make because the rule would allow BLM to recover ``fair market 
value'' based on land use, rather than land value. BLM disagrees. The 
linear rent schedule is based on general land values on a county-by-
county basis. This section is consistent with existing policy and 
procedure.
    One commenter said that there are no criteria in the rule 
explaining what level of expected rent would warrant a separate 
appraisal, or on what this expectation would be based. The commenter 
said that BLM should not use a higher rental valuation for 
telecommunication carriers, as opposed to other types of carriers, and 
that the rent should be based on rent schedules developed through 
traditional appraisal theories, to value the burden placed on the land. 
Final paragraph (c) of this section establishes the conditions under 
which BLM may use alternate means to compute rent. The regulations do 
not mandate that BLM deviate from the schedule, but only provide us 
discretion to do so if certain conditions apply. BLM currently has a 
policy prohibiting us from deviating from the schedule (see WO-IM 2002-
172). That guidance states that BLM will use the current schedule to 
calculate rent for all linear right-of-way uses, including 
telecommunications (fiber optics lines) uses. The current policy of not 
deviating from the linear schedule is in response to Congressional 
direction contained in the appropriations bill for the Department of 
the Interior for FY 2001. BLM bases the schedules we use to calculate 
rent on traditional appraisal methods. BLM expects to use schedules to 
determine rent whenever possible to avoid unnecessary expenditures 
preparing appraisal reports. In response to the comment that we should 
not charge telecommunication carriers higher rent than other carriers, 
these final regulations do not.

Section 2806.21 When and How Does the Linear Rent Schedule Change?

    This section explains that BLM updates the rent schedule each 
calendar year based on the previous year's change in the IPD-GDP, as 
measured second quarter to second quarter. This provision is similar to 
previous section 2803.1-2(c)(1)(ii).
    We received no substantive comments on this section. This section 
was proposed as section 2806.15 and, with the exception of editorial 
changes, is the same as that proposed.

Section 2806.22 How Will BLM Calculate My Rent for Linear Rights-of-Way 
the Schedule Covers?

    This section explains that BLM calculates your rent for a linear 
right-of-way by multiplying the rent per acre for the appropriate 
category of use and county zone price from the current schedule by the 
number of acres in the right-of-way area that fall into those 
categories and the number of years in the rental period (rent per acre 
X number of acres X number of years in the rental period = rent for a 
linear right-of-way). If BLM has not previously used the rent schedule 
to calculate your rent, we may do so after giving you reasonable 
written notice. If an existing grant is a pre-FLPMA authorization, BLM 
will provide you with an opportunity for an informal BLM hearing as 
described in final section 2806.10(b) of this final rule. With the 
exception of editorial changes, this section is the same as proposed 
section 2806.16.

Section 2806.23 How Must I Make Rental Payments for a Linear Grant?

    This section explains that you must make either nonrefundable 
annual rental payments or a nonrefundable payment for more than 1 year, 
as follows:
    (A) You may pay in advance the required rent amount for the entire 
term of the grant; and
    (B) If you choose not to pay the entire amount, you must pay 
according to one of the following methods:
    (1) If your annual rent is less than $100, private individuals must 
pay at 10-year intervals not to exceed the term of the grant. If your 
annual rent is greater than $100, individuals have the option to pay 
annually or at other multi-year intervals that you may choose.
    (2) All other right-of-way holders, including corporations, 
companies, partnerships, and associations, must pay rent at 10-year 
intervals not to exceed the term of the grant.
    These provisions are based on proposed section 2806.10(c), but 
provide additional detail to more accurately describe the process. 
Consistent with existing policy and practice, once you make a rent 
payment, BLM will not refund it. This is because once BLM deposits a 
payment, it goes into the general fund of the U.S. Treasury and is no 
longer accessible to BLM.
    We added a new paragraph (b) to the final rule to further explain 
the process of calculating rent. BLM considers the first partial 
calendar year in the payment period described above to be the first 
year of the rental payment term. We will prorate the first year rental 
amount based on the number of months left in the calendar year after 
the effective date of the grant. For example, the effective date of a 
grant is June 2 and the annual rental is $49.32 per year. Since the 
annual rent is less than $100, a 10-year payment method would be 
appropriate. Rent begins on the first day of the month after the 
effective date of the grant. BLM would calculate rent beginning in July 
and would prorate the first year's rent to cover the six months 
remaining. (e.g., $49.32 x .5 = $24.66 for year one.) Therefore for 
years 2 through 10, rent is $49.32 x 9 years = $443.88. Total rent is 
$443.88 + $24.66 = $468.54.
    BLM received a variety of comments regarding rental terms. Several 
commenters thought that due to the administrative costs of processing 
rent payments, the final rule should bill for rent every five years 
rather than yearly. Several commenters said that in circumstances where 
the annual fee would be less than $1,000, the fee should be a lump-sum 
fee based on a 25-year period. The commenters said that where the 
annual fees are higher than $1,000, the fee should be paid in lump-sum 
every 5-10 years. Another commenter said that BLM should require 
advance payment of rent for lower rent amounts, for which the 
administrative cost of processing monthly or more frequent rent 
payments would expend a significant portion of the rent payment. BLM 
considered several rental terms including one year, five years, ten 
years, and longer. We determined that ten years is a satisfactory 
compromise between minimizing the impact a long-term large rent payment 
might have on a right-of-way holder and the costs to BLM and

[[Page 21010]]

industry of tracking numerous payments for relatively low dollar 
transactions.
    One commenter said that small annual rents may generate less 
revenue than the cost of collecting them. The commenter said that 
therefore BLM should calculate how much it costs to send, collect, and 
process a rent bill, and automatically require advance payment for any 
rent amount below that cost. BLM agrees with the commenter in part and 
the final rule allows all right-of-way grant holders the option of 
making a non-refundable lump sum rental payment for the entire term of 
the grant. For private individuals not electing this one-time payment, 
you must pay at 10-year intervals if the annual rent is $100 or less or 
you may pay annually, or at some other annual interval, if the annual 
rent is more than $100. For all other holders, including corporations, 
associations, or other entities, you pay either a lump sum for the 
entire term or at 10-year intervals regardless of the amount of the 
annual rent. We did not establish a minimum rental requiring an 
automatic advance payment, as suggested, because we believe most grant 
holders having very low rental amounts will opt to pay the lump sum in 
advance so as not to be bothered with multiple future payments.
    Several commenters said that the final rule should allow the option 
of paying all fees in advance and BLM should set grant fee amounts 
using net present value and the payments should be discounted by the 
time value of money. BLM agrees with this comment in part and the final 
rule allows for advance payments for the term of a grant. BLM does not 
agree with using any formula that would discount a lump sum rental 
payment to allow for the time value of money because there are many 
unknown variables used in determining discount rates and future rate 
increases in the schedule. Holders who pay rent in a lump sum up-front 
do not pay the rent increases (based on increases in the IPD-GDP) that 
would occur yearly over the term of the grant. This offsets the need to 
discount the lump sum payment by the time-value of money. This approach 
would reduce the already low linear schedule rentals and is not in the 
public interest.
    Under certain limited circumstances BLM issues grants in perpetuity 
and therefore, BLM needs to establish a consistent process for 
calculating rent for these grants. Current BLM regulations and guidance 
do not specify the conditions under which BLM will issue a grant in 
perpetuity. There are a variety of circumstances under which it would 
be appropriate for us to issue a perpetual grant. For example, a 
perpetual grant may be necessary for BLM to protect the rights of grant 
holders when we dispose of Federal land encumbered by a right-of-way 
grant. We may also need to issue a perpetual grant in circumstances 
when holders must comply with local land use ordinances that may 
require a perpetual right in order to develop private property 
interests. We frequently issue perpetual grants to governmental 
entities for permanent facilities such as county roads.
    In the preamble to the proposed rule, BLM invited comments 
concerning how long advance rental periods should be and what amounts 
should trigger a lump-sum rental payment (64 FR 32112). While we 
received several comments, none were related to determining lump sum 
rent for perpetual grants. Nonetheless, BLM believes it is important to 
establish an advance lump sum rental payment for any grant issued in 
perpetuity so that if BLM disposes of land, the holders will be 
protected from future rent increases imposed by a new landowner.
    Under the final rule, for linear right-of-way grants issued in 
perpetuity, you must make a one-time rental payment before BLM will 
issue the grant, except individuals may make payments as described in 
(a)(2)(i) of this section. BLM calculates rent for grants issued in 
perpetuity by multiplying the annual rent by 100 or you may request 
from BLM a rent determination based on the prevailing price established 
by general practice in the vicinity of the right-of-way. In order for 
BLM to determine rent based on the prevailing price, you must prepare 
an appraisal report that explains how you estimated the rent. The 
appraisal report must meet all Federal appraisal standards and explain 
why you believe the rental amount initially calculated by BLM 
unreasonably exceeds the fair market value of the perpetual grant. You 
must prepare this report at your expense, and submit it for approval by 
a review appraiser delegated by BLM or the Department of the Interior. 
The BLM State Director must concur with the alternative rental payment 
amount approved by the review appraiser before BLM approves your 
request. If BLM denies your request, you must pay the amount BLM 
calculated in paragraph (c)(1) of this section. You may appeal this 
decision under section 2801.10 of this part.
    The provisions in paragraph (c) were not in previous regulations. 
We added these provisions to provide a consistent approach across BLM 
for determining rent for perpetual right-of-way grants.
    BLM believes it is reasonable and practical to collect rent based 
on a 100-year rental for a perpetual right-of-way. A common industry 
practice is to use a 99-year lease to represent near full ownership of 
a property. The 100-year term extends through 2 to 3 generations, and 
is considered sufficient ownership by many banks and lending 
institutions to provide security to justify large loan encumbrances. If 
a right-of-way holder needs a grant for a perpetual term to protect its 
rights, such as when BLM is planning to dispose of a parcel of land 
encumbered by a right-of-way grant, the holder should pay a fair market 
value rent to acquire the perpetual right-of-way grant.
    In its 1995 audit of BLM's right-of-way program (U.S. Department of 
the Interior, Office of Inspector General Audit Report, Right-of-Way 
Grants, Bureau of Land Management, Report No. 95-I-747, March 1995) the 
Inspector General (IG) did a comparison of linear rents between public 
and private lands using a net present value method (see pages 5-7 and 
Appendix 4, pg 19 of the report). The IG obtained data on 18 rights-of-
way (easements) granted by states and private individuals for various 
types of facilities across lands in four different states. These 18 
rights-of-way were issued in perpetuity for a one-time, up-front, lump-
sum payment. This data was converted to a common base to compare what 
the same rights-of-way would have cost had they been located on public 
lands. The data indicated that BLM was collecting only about 18 percent 
(utilizing the linear rent schedule) of the rent that the private and 
state land owners received in one-time, up-front, lump-sum payments. 
However, under final section 2806.23(c)(1), BLM will collect nearly 80% 
of the rent that the private and state land owners received in one-
time, up-front, lump-sum payments. The provisions of section 
2806.23(c)(1) are administratively simple to apply, and, as the above 
data indicates, will return a more realistic rental rate when BLM 
issues grants in perpetuity.
    As noted above, in the proposed rule BLM invited suggestions and 
comments on how long an advance rental payment should cover and what 
amount should trigger an advance lump sum payment (see 64 FR 32106 and 
32112). We received several comments on the subject of advance rental 
payments. Most industry-related comments supported advance rental 
payments for a longer term than one year or five years, including 
payments for the term of the grant, because this approach comes close 
to normal business practice

[[Page 21011]]

for private right-of-way acquisitions. Other commenters thought that 
advance rental payments for the term of a grant would result in lost 
revenues to the government on those lands where property values 
continue to rise. Because of the large number of low dollar rental 
payments, BLM believes it is a good business practice, administratively 
efficient, and cost saving to allow a holder to pay rent for the term 
of a grant. Allowing advance rental payment for the term of a grant 
eliminates BLM's workload associated with annually preparing notices, 
tracking payments, and recording deposits in cases where there is a 
minimal dollar return (see the U.S. Department of the Interior, Office 
of Inspector General Audit Report, Right-of-Way Grants, Bureau of Land 
Management, Report No. 95-I-747, March 1995, showing that 7,700 rental 
notices were for $34 or less). It also reduces paperwork for grant 
holders because they would not be required to track and pay rent 
numerous times over the life of the grant.
    We disagree that collecting rent for the term of a grant, 
frequently a 30-year term, will result in lost revenue. If we collect 
fair market value rent for the term of a grant, the Government has 
ensured the up-front receipt of rental payments to the Treasury. While 
the Government may forego future indexed increases to the rent schedule 
over the term of the grant, this loss is offset by the Government 
saving administrative costs over the term of the right-of-way grant and 
by not having to pay the cost of tracking when payments are due and 
sending notices for those grants. Further, BLM does not reduce the one-
time payment by discounting it to the present value of the payment.

Communication Site Rights-of-Way

    BLM published a rule on November 13, 1995 (see 60 FR 57073), that 
provided for a communication use rent schedule and rent collection 
procedures. The final rule we publish today makes no substantive 
changes to the policies or procedures in that rule. BLM received a 
variety of comments about the communication use rent schedule that were 
previously addressed in the 1995 rule. Where appropriate, this rule 
cross references the preamble to the 1995 rule to address some of the 
public comments on the proposed rule that follow.
    In the final rule we refer to communication use ``leases'' and 
communication use ``grants.'' The standard authorization BLM issues for 
communication site rights-of-way is a Communication Uses Lease, BLM 
Form 2800-18. This form's standard provisions allow the holder to 
sublease space in its facility to other users. When BLM determines it 
is appropriate to issue a right-of-way authorization that does not 
allow subleasing, such as to other Federal agencies, we use a standard 
BLM right-of-way grant Form 2800-14. This authorization does not allow 
the holder to sublease space in its facility without BLM's approval. 
Because a ``grant'' is defined at section 2801.5 to include a lease, a 
communication use lease is a form of a right-of-way grant. The terms 
are frequently used interchangeably, even though the authorizations 
have different terms and conditions, particularly those relating to 
subleasing.

Section 2806.30 What Are the Rents for Communication Site Rights-of-
Way?

    BLM uses the rent schedule for communication uses found in this 
section to calculate the rent for communication site rights-of-way. You 
can find a complete discussion of the rationale for using a schedule 
for determining communication site rent in the proposed rule at 64 FR 
32112 through 32114. Please note that we do not use this schedule to 
calculate rent for telephone line or fiber optic rights-of-way, because 
they are linear rights-of-way and are covered by the linear rent 
schedule in section 2806.20. We amended final paragraph (c)(3) of this 
section to make this clear. Rights-of-way for cellular telephones are 
covered by the schedule in paragraph (b) of this section.
    The communications use schedule is based on nine population strata 
(the population served), as depicted by the Ranally Metro Area 
population rankings (RMA), and the type of communication use or uses 
for which BLM normally grants communication site rights-of-way. You can 
find a detailed discussion of RMAs in the preamble for the 
communication site final rule at 60 FR 57062 (November 13, 1995). The 
uses the schedule covers are listed in the definition of 
``communication use rent schedule,'' set out at section 2801.5 of this 
rule. You may obtain a copy of the communication use rent schedule from 
any BLM office or on BLM's National Home Page on the Internet.
    BLM annually updates the communications use rent schedule based on 
two sources: the U.S. Department of Labor Consumer Price Index for All 
Urban Consumers, U.S. City Average (CPI-U), as of July 31 of each year 
(difference in CPI-U from August 1 of one year to July 31 of the 
following year); and the RMA population estimates. You can find a 
discussion of why BLM uses the CPI-U to update the schedule in the 
preamble to the communication site final rule at 60 FR 57064. The 1995 
rule also explains why BLM limits annual adjustments based on the CPI-U 
to no more than 5 percent. Under this section, at least every 10 years 
BLM will review the rent schedule to ensure that the schedule reflects 
a rational fair market value estimate. Both the provision addressing 
adjustments and the provision addressing the time between reviews of 
the rent schedule are consistent with previous section 2803.1-
2(d)(2)(i). There are several situations to which the communication use 
rent schedule does not apply, and those are listed in this section as 
well. This section is a rewording of proposed sections 2806.17(b)(1) 
through (5) to make them more clear.
    We also made several other changes to proposed section 2806.17. We 
deleted from proposed paragraph (b)(1) (final section 2806.30 (c)(1)) 
``Any other communication use, not directly associated with the lease 
operation, is not excluded'' because the sentence is unnecessary and 
does not add substance to the rule. We also added ``oil and gas 
pipeline grant'' to proposed paragraph (b)(2) (final section 
2806.30(c)(2)) because it is a more common example than that in the 
proposed rule. There are far more communication sites ancillary to 
pipelines than railroad rights-of-way. In proposed paragraph (b)(4) we 
deleted reference to when rent is determined by appraisals or other 
reasonable methods and moved it to final section 2806.50 of these 
regulations. Finally, we reworded proposed paragraph (b)(5) (final 
section 2806.30(c)(5)), making it clear that the BLM State Director is 
the only authority that can make the determination that estimated rent 
would exceed the scheduled rent by five times or that in populations of 
more than one million, the rent is expected to exceed the scheduled 
rent by more than $10,000. For new technologies and the conditions 
listed in final paragraphs (c)(4) and (5), BLM would determine rent 
according to section 2806.50 of this subpart.
    Several commenters addressed various issues related to 
communication site rights-of-way. The comments principally concerned 
the rent schedule and the way in which BLM would charge rents for 
communication sites.
    One commenter said that if BLM increases rent payments for 
communication sites, counties will increase rents also. We believe the 
commenter was concerned that BLM will begin charging rent to the 
counties for communication site uses. Under this

[[Page 21012]]

final rule, local governments are exempt from paying rent, except when 
they are using the facility, system, space, or any part of the right-
of-way area for commercial purposes (see section 2806.14(b)(1)).
    For example, when BLM issues a communication site lease to a local 
government, e.g., a county, and the local government (facility owner) 
leases space to other users for commercial purposes, then the local 
government must pay rent to BLM for the commercial activities being 
conducted on the right-of-way. In these cases the rent the local 
government owes would be based upon the tenant uses in the facility, 
not the local government's uses. In cases where there are only customer 
uses in a facility owned by a local government, and the local 
government is profiting from the occupant uses within the facility, 
then BLM would assess the local government based on the highest value 
use within the facility pursuant to section 2806.34(d). This is 
consistent with existing policy and previous section 2803.1-2(b)(1).
    One commenter stated that BLM appeared to rely on the misapplied 
use of comparables from exceptionally high value urban areas. We 
received similar comments about other sections of this rule. One basis 
for the rent schedule is the population served, which recognizes a 
range of populations, from the high value urban areas to rural 
communities of less than 25,000 people. We believe that basing the rent 
schedules on the population served is a proper consideration in 
arriving at the fair market value of a communication site right-of-way. 
In addition, the population ranges appearing on the schedule fairly 
represent populations on and around public lands. This final rule does 
not change the communication uses rent schedule amounts in previous 
regulations. We continue to believe that the rent schedule amounts 
established pursuant to that rule are appropriate. Therefore, we did 
not amend the final rule as a result of the comments.
    One commenter asserted that charging rents for telecommunications 
facilities was tantamount to a toll imposed by BLM on electronic 
commerce and discouraged co-locating facilities on rights-of-way. We 
disagree. Communication site right-of-way holders on public land paid 
rental under FLPMA and even pre-FLPMA authorities prior to the 1995 
communication site policy (see 60 FR 57058). As previously stated, 
section 504(g) of FLPMA requires holders to pay fair market value for 
the use of public land. This final rule restates existing policy and 
law and is not imposing a ``toll'' on electronic commerce. We also 
disagree that this policy discourages co-locating facilities. This rule 
and the 1995 policy encourage co-location of facilities by allowing a 
holder to sublease space in its facility to customers and tenants. 
Prior to 1995, customers and tenants were required to hold separate 
grants and all users paid full fair market value.
    Several commenters objected to the way that BLM proposed to 
calculate rents for communications sites when the nature of the site is 
such that BLM would conduct a separate appraisal rather than use the 
rent schedule for the site. These commenters asserted that individual 
appraisals would cause undue hardship for many communication site grant 
holders and would single out telecommunications carriers for higher 
rents. We disagree with the commenter. One of the objectives of today's 
rule, consistent with BLM's 1995 communication site rule, is to 
eliminate the need to perform individual appraisals for communication 
sites because of the high costs to perform the analysis. Previous 
regulations at 2803.1-2(c)(1)(i) contained similar provisions. This 
final regulation allows for individual appraisals in population areas 
of 1,000,000 or more when the rent is expected to be $10,000 above the 
scheduled rate, or in situations where estimated rent exceeds the 
schedule by five times. BLM State Director approval is needed in both 
of these circumstances. Appraisals may also be necessary to set minimum 
rents in competitive bid situations and to set rents for uses and 
technologies not currently on the schedule. We believe that there will 
be very few situations where an appraisal will be necessary for 
communication sites.
    Several commenters opposed separating the criteria that BLM would 
use to determine when to conduct a separate appraisal of the rent due 
on a grant. One stated that conducting individual appraisals would be a 
disincentive to co-locate facilities and would cause undue hardship for 
many grant (permit) holders. Another commented that there were no 
criteria as to what types of use would trigger an alternative valuation 
or what level of expected rent would warrant a separate appraisal. The 
final rule is clear on the criteria for not using the schedule. As 
explained above, individual appraisals would be considered if new 
technologies are present or the criteria in final paragraphs (c)(4) and 
(5) are met. We believe that final sections 2806.30(c)(1) through (5) 
adequately describe the situations when BLM would not use the schedule 
to calculate a communication use rent.
    One commenter suggested that the final rule should more accurately 
describe how BLM annually indexes the fees, and suggested the following 
language for the final rule:

    BLM annually updates the schedule based on two sources: the U.S. 
Department of Labor Consumer Price Index for All Urban Consumers, 
published in July of each year and the population estimates for the 
Ranally Metro Areas published annually in the Rand McNally 
Commercial Atlas and Marketing Guide.

We believe that final paragraph (a)(2) of this section provides 
adequate guidance on indexing fees and is similar to what the commenter 
suggested.
    Commenters said that for communities of less than 50,000 people, 
BLM uses the most recent Census Bureau data to determine the size of 
communities served by communication sites. They recommended that size 
be more accurately stated, saying that for communities of less than 
50,000 people, the agency will use the populations listed in the most 
current edition of the Rand-McNally Road Atlas as the source for 
determining the appropriate ``population served'' category in the 
communications use fee schedule. BLM agrees with the commenters. The 
preamble to the proposed rule stated that BLM uses the most recent 
Census Bureau data to determine population size for communities of less 
than 50,000 people. In the final rule we use the most current edition 
of the Rand-McNally Road Atlas as the source for these population 
determinations. The final rule states this clearly (see final section 
2806.32(a)(4)).

Section 2806.31 How Will BLM Calculate Rent for a Right-of-Way for 
Communication Uses in the Schedule?

    This section explains that for single-use facilities, BLM applies 
the rent from the communication use rent schedule for the type of use 
and the population strata it serves. For multiple-use facilities, whose 
authorization provides for subleasing, BLM sets the rent of the highest 
value use in the facility or facilities as the base rent (taken from 
the rent schedule) and adds to it 25 percent of the rent from the rent 
schedule for all tenant uses in the facility or facilities, if a tenant 
use is not used as the base rent (rent = base rent + (25 percent of all 
rent due to additional uses in the facility or facilities). For 
example, a single use commercial mobile radio service (CMRS) facility 
owner would pay the CMRS rate for the population served. If the same 
CMRS facility owner subleased space in his facility to a cellular

[[Page 21013]]

provider, the cellular provider's rent would be the base rent, and 25 
percent of the CMRS rate would be added to that to determine the total 
rent due. You can find additional details on calculations for single-
use facilities in final section 2806.33 and for multiple-use facilities 
in final section 2806.34.
    When calculating rent, BLM will exclude customer uses, except as 
provided for in final sections 2806.34(b)(4) and 2806.42, and those 
exempted uses described in section 2806.14, and any uses whose rent has 
been waived or reduced to zero as described in section 2806.15.
    By October 15 of each year, you, as a communication site grant or 
lease holder, must submit to BLM a certified statement listing any 
tenants and customers in your facility or facilities and the category 
of use for each tenant or customer as of September 30 of the same year. 
BLM may require you to submit any additional information needed to 
calculate your rent, such as private lease agreements with tenants and 
customers that would provide information on fees the building or 
facility owner charges for space in its facility. BLM will determine 
the rent based on the certified statement provided. We require only 
facility owners or facility managers to hold a grant or lease (unless 
you are an occupant in a federally-owned facility as described in 
section 2806.42), and will charge you rent for your grant or lease 
based on the total number of communication uses within the right-of-way 
and the type of uses and population strata the facility or site serves. 
This final rule is slightly different from the proposal. We reworded it 
to provide additional explanation of the process BLM uses to calculate 
rent for communication uses. We originally established this process in 
previous section 2803.1-2(d).
    We reworded proposed sections 2806.18(a)(1) and (a)(2) (final 
sections 2806.31(a)(1) and (a)(2)) to make them clearer and added 
language in final section (a)(2) to explain that in order to have a 
multiple use facility, the authorization must allow for subleasing. We 
added this provision to explain existing policy. We added similar 
language in final sections 2806.34(a) and 2806.36(a).
    Final section 2806.31(b) explains the exclusions that BLM considers 
in calculating rent and references the sections in the final 
regulations where those exclusions are described. Exceptions are also 
noted. Final paragraph (c) of this section makes clear that it is only 
the holder of a grant or lease, not tenants and customers, that must 
submit an annual statement of who is in the facility.
    Several commenters said that in paragraph (c) we should replace 
``tenants'' with ``tenants and customers'' since that is the phrase 
used in the ``clauses or stipulations in the leases used by BLM and the 
Forest Service.'' The commenters also said that facility managers and 
owners may not understand the definition of ``customer or tenant'' and 
therefore may not report an accurate inventory of all of the uses in 
each facility. BLM agrees with the comment and added the phrase 
``tenants and customers'' in this section rather than only ``tenants.'' 
Section 2801.5 of these regulations provides definitions for both 
terms.

Section 2806.32 How Does BLM Determine the Population Strata Served?

    This section outlines the processes currently described in BLM 
policy for determining the population served by a communication 
facility. This information was in the proposed rule at section 
2806.19(b). We made it a separate section in the final rule so that our 
communication site users clearly understand how we determine the 
population served. We also eliminated proposed section 2806.19(c), 
because we do not make case-by-case exceptions to the population 
guidelines described below.
    BLM determines the population served as follows:
    (A) If the site or facility is in a designated RMA, BLM will use 
the population strata of the RMA;
    (B) If the site or facility is in a designated RMA, but serves two 
or more RMAs, BLM will use the population of the RMA having the 
greatest population;
    (C) If the site or facility is outside an RMA, but it serves one or 
more RMAs, BLM will use the population of the RMA having the greatest 
population;
    (D) If the site or facility is outside an RMA and the site does not 
serve an RMA, BLM will use the population of the community it serves 
having the greatest population as identified in the current edition of 
the Rand McNally Road Atlas. BLM will not add the populations of 
several communities together to determine the population served; and
    (E) If the site or facility is outside an RMA and serves a 
community of less than 25,000 persons, BLM will use the lowest 
population strata shown on the rent schedule.
    In calculating rent, all uses within the same facility must serve 
the same RMA or community, and all uses in the same facility or 
authorized under the same lease must serve the same population strata. 
In other words, when BLM issues a grant or lease, the holder and all of 
the tenant and customer uses in the facility are considered to serve 
the RMA or community with the greatest population. High and low power 
uses may be located in the same facility and serve different RMAs or 
communities, but they would all be charged according to the largest RMA 
or community served by any user within the facility. A site may 
accommodate a mix of high and low power users, but as long as these 
users are not located in the same facility or authorized by the same 
lease, BLM can make a case-by-case determination of the population 
served by each facility (e.g., the high power facility could serve an 
RMA and the low power facility could serve a closer community and not 
reach the RMA). The section also makes clear that BLM will not modify 
or change the population rankings published in the Rand McNally 
Commercial Atlas and Marketing Guide or the population of the community 
served.
    Several commenters said that proposed paragraph (b)(2) should make 
clear that if a site or facility is located in an RMA, but serves two 
or more RMAs, you should use the population of the largest RMA served 
in calculating rent. We agree and the final rule is clear on this issue 
at final section 2806.32(a)(2).
    Several commenters said that under the proposed rule, a permit 
holder could serve a ``de minimus percentage of a large RMA'' and still 
be required to pay rent as if the entire RMA was served. The commenters 
said that the proposed rule ensures that BLM will charge the highest 
possible rent regardless of the percentage of the population served in 
a given area and that may be inequitable. In situations where only a 
small part of a large RMA is served, under this final rule and under 
existing policy, we calculate rent for the entire RMA. This is because 
no accurate means exists to measure and verify percentages of the 
population served within any given RMA. Even if it were possible to 
verify that a particular communication use served only 10 percent of 
the population of an RMA, for example, it would be incorrect to use the 
population figure represented by the 10 percent as the basis to 
establish rent. The reason is that RMAs are an indicator of current 
economic activity that is taking place within that area. Markets in a 
particular area determine rent, not the area of the market that the use 
serves. For example, a television station serving the Phoenix market 
pays significantly more rent for its

[[Page 21014]]

communication facility, whether it is located on private or public 
lands, than does a television station serving the Dillon, Montana 
market.
    The rent or payment for a particular communication use is not 
dependent on that service reaching 100 percent of the population in an 
RMA. In fact, most communication uses do not serve the entire 
population of an RMA, either due to natural physical constraints 
(frequency shadow area from mountains, for example) or from the user's 
own business decisions, or because a particular use, such as PCS 
(mobile telephone use), is limited by its own technology to serve only 
a portion of a particular area or RMA. For example, one television 
station may have a 50% market share in an RMA, while another competing 
television station may only have a 10% market share in the same RMA. A 
private communication provider would charge each TV station the same 
rental rate, as should BLM using our communication use rent schedule. 
Likewise, the programming format of a television or radio station, 
which inherently limits the population the station might serve, has no 
bearing on the rent. The programming format of one station may be jazz, 
while another is country, while another is classical, and another talk. 
While most programming is in English, some radio stations may broadcast 
in a different language and intentionally try to reach a very limited 
market. Each may only serve a narrow percentage of the total RMA, but 
the rent for each use is calculated based on the population of the 
entire RMA.
    BLM realizes that some users have been subject to significant rent 
increases when a smaller RMA that their communication use had been 
serving is combined by Rand McNally with a much larger RMA. The 
holder's communication use may still be serving the same number of 
people, but now its service area has been combined and made part of a 
much larger economic unit. Under these conditions, BLM is still 
obligated to determine rent based on service to the new, larger RMA. If 
payment of the new rental amount creates undue financial hardship, the 
holder can request a reduction in rent under final section 2806.15. The 
final rule makes clear that BLM will not modify or change the 
population rankings published in the Rand McNally Commercial Atlas and 
Marketing Guide or the population of the community served due to the 
reasons cited above.

Section 2806.33 How Will BLM Calculate the Rent for a Grant or Lease 
Authorizing a Single Use Communication Facility?

    This section explains that BLM calculates the rent for a grant or 
lease authorizing a single-use communication facility from the 
communication use rent schedule based on the type of use and the 
population served.
    This section was proposed as section 2806.19(a) and is similar to 
that provision. The provisions in proposed sections 2806.19(b) and (c) 
are now in final section 2806.32.

Section 2806.34 How Will BLM Calculate the Rent for a Grant or Lease 
Authorizing a Multiple-Use Communication Facility?

    This section explains that for multiple-use communication 
facilities:
    (A) BLM first determines the population strata the communication 
facility serves according to section 2806.32 of this subpart; and
    (B) Then calculates the rent assessed to facility owners or 
facility managers for a grant or lease for a communication facility 
that authorizes subleasing with tenants, customers, or both, using the 
procedures listed.
    Under this section, using the communication use rent schedule, BLM 
will determine the rent of the highest value use in the facility or 
facilities as the base rent, and add to it 25 percent of the scheduled 
rent for each tenant use in the facility or facilities. The highest 
value use is the use that has the highest dollar value in the 
communication use rent schedule. This highest value use is central to 
the definition of base rent. If the highest value use is not the use of 
the facility owner or facility manager, BLM will consider the owner's 
or manager's use like any tenant or customer use in calculating the 
rent. However, if a facility owner is engaged in a PMRS, internal 
microwave, or ``other'' use, and that use is not the highest value use 
in the facility, then BLM excludes these uses when calculating the 
additional 25 percent amount under paragraph (a)(1) (see final section 
2806.35(b)). Likewise, BLM excludes the facility manager's use in the 
25 percent calculation (see final section 2806.39(a)) when its value 
does not exceed the highest value in the facility. If a tenant's use is 
the highest value use, BLM will exclude the rent for that tenant's use 
when calculating the additional 25 percent amount under paragraph 
(a)(1) of this section.
    If the same grant or lease authorizes a grant holder multiple uses, 
such as a TV and a FM radio station, BLM will calculate the rent as in 
paragraph (a)(1) of this section. In this case, the TV rent would be 
the highest value use and BLM would charge the FM portion according to 
the rent schedule as if it were a tenant use. The proposed rule at 
section 2806.20(a)(4) stated we would use ``the sum of each use'' when 
calculating rent in these situations. We believe that this phrase was 
misleading. For example, one might have incorrectly determined that the 
base rent for the example discussed above was the full value of the TV 
and FM stations added together. Therefore, we deleted the phrase from 
the final rule.
    This section also describes the process to calculate rent for 
several combinations of holder, tenant, and customer situations. These 
rental calculation situations were not covered in previous regulations, 
but are included here so members of the public and BLM staff would 
better understand when certain special calculation policies apply.
    In calculating rents, BLM will exclude a facility owner's or 
facility manager's exempted uses described in final section 2806.14, or 
uses whose rent has been waived or reduced to zero in final section 
2806.15. Uses of certain non-profit corporations providing benefits to 
the public would qualify under this latter citation.
    BLM will exclude exempted uses, or uses whose rent has been waived 
or reduced to zero, of a customer or tenant if they choose to hold 
their own lease or are occupants in a Federal facility.
    BLM will charge rent to a facility owner whose own use is either 
exempted, waived, or reduced to zero, but who has tenants in its 
facility, in an amount equal to the rent of the highest value tenant 
use plus 25 percent of the rent from the rent schedule for each of the 
remaining tenant uses subject to rent. For example, a non-profit 
facility owner operates an FM radio translator whose rent BLM has 
waived, and it has two tenants in the facility, one of which operates a 
CMRS and the other a television translator. Rent for the holder is 
based on the CMRS use, which is the highest value use, and to this is 
added 25 percent of the schedule rate for the television translator. 
Under this example, the holder's not-for-profit FM radio use does not 
contribute to rent.
    This section also explains (at section 2806.34(b)(3)) that BLM will 
not charge rent to a facility owner, facility manager, or tenant (when 
it holds a grant or lease) when all of the following occur:
    (A) BLM exempts from rent, waives, or reduces to zero the rent for 
the holder's use;

[[Page 21015]]

    (B) Rent from all other uses in the facility is exempt, waived, or 
reduced to zero or BLM considers such uses as customer uses; and
    (C) The holder is not operating the facility for commercial 
purposes with respect to such other uses in the facility.
    If a holder whose own use BLM exempts from rent, or whose rent has 
been waived or reduced to zero, is conducting a commercial activity 
with customers or tenants whose uses are similarly without rent, BLM 
will charge rent based on the highest value use within the facility. 
For example, if an exempt county grant holder subleases space to a 
private mobile radio customer (PMRS) and charges the customer a fee to 
locate its equipment in the facility, the county and customer are 
conducting a commercial activity in the facility. BLM would assess rent 
to the county at the PMRS rate. Proposed section 2806.20(b)(4) 
incorrectly stated this rule in providing that the customer or tenant 
uses were ``not'' exempt from rent. The rule only applies to exempted 
uses or those uses whose rent has been waived or reduced to zero. This 
paragraph does not apply to facilities exempt from rent under section 
2806.14(d) of this subpart except when the facility also includes non-
eligible facilities.
    Several commenters said that the final rule should add ``plus 25% 
of the fee schedule rate for all other exempted tenant uses'' to the 
end of proposed section 2806.20(b)(4) (final section 2806.34(b)(4)). 
BLM disagrees. Proposed section 2806.20(b)(4) contained an error that 
changes the meaning of the rule. The phrase ``customers and tenants 
that are not exempt from rent'' should have been ``customers and 
tenants that are also exempt from rent.'' For example, in situations 
where all uses in a facility are customer-related uses or exempted 
tenant uses and the holder of the facility is operating that facility 
for commercial purposes, BLM will assess a rent for the highest value 
use in that facility, but does not add 25 percent for the additional 
exempted uses. This rule recognizes the commercial activity in the 
facility and allows the United States to collect a rental for the 
commercial activity. Therefore, we did not add the language suggested 
by commenters.

Section 2806.35 How Will BLM Calculate Rent for Private Mobile Radio 
Service (PMRS), Internal Microwave, and ``Other'' Category Uses?

    The term ``other'' is defined in section 2801.5 of this rule (see 
the ``Communication use rent schedule at (9)) and is used in the rent 
schedule at the far right of the rent schedule chart. This section 
explains that when an entity engaged in a PMRS, internal microwave, or 
``other'' use is:
    (A) Using space in a facility owned by either a facility owner or 
facility manager, BLM will consider the entity to be a customer and not 
include these uses in the rent calculation for the facility. In the 
final rule we replaced the phrase ``in someone else's facility'' with 
``facility owner or facility manager'' to make the rule more specific 
and easier to understand; or
    (B) The facility owner, BLM will follow the provisions in section 
2806.31 of this subpart to calculate rent for a lease involving these 
uses. However, we include the rent from the rent schedule for a PMRS, 
internal microwave, or other use in the rental calculation only if the 
value of that use is equal to or greater than the value of any other 
use in the facility. BLM excludes these uses in the 25 percent 
calculation (see final section 2806.31(a)) when their value does not 
exceed the highest value in the facility. This is because these uses 
become customer uses and are not subject to rent (see the definition of 
``customer''). We reworded proposed section 2806.21 to make the final 
rule clearer.
    One commenter said that BLM should avoid using the term ``exempt'' 
when describing how BLM considers customer uses when determining 
communication use rentals. The commenter said the final regulations 
should read: ``The PMRS, internal microwave, or ``other'' use would not 
be included in the rental calculation.'' We agree with the commenter. 
In the final rule we do not use the term ``exempt.'' The uses commenter 
listed are excluded from the rental calculation.

Section 2806.36 If I Am a Tenant or Customer in a Facility, Must I Have 
My Own Grant or Lease and, if So, How Will This Affect My Rent?

    This section explains that you may have your own authorization (a 
lease or a grant), but BLM does not require a separate lease for 
tenants and customers using a facility authorized by a grant or lease 
that allows subleasing. BLM charges the facility owner or facility 
manager rent based on the highest value use within the facility 
(including any tenant or customer use authorized by a separate lease) 
and 25 percent of scheduled rent for each of the other uses subject to 
rent (including any tenant or customer use authorized by a separate 
lease and the facility owner's use if it is not the highest value use). 
We included ``facility manager'' in the final rule to reflect the fact 
that a facility manager is generally the right-of-way holder.
    We added a new paragraph (b) to this section to make it clear that 
when someone owns a building, equipment shelter, or tower on public 
lands for communication purposes, they must have a BLM right-of-way 
authorization for their improvements, even if they are a tenant or 
customer in someone else's facility. This provision is consistent with 
current policy and will eliminate confusion among some right-of-way 
holders.
    This section also explains that BLM will charge tenants and 
customers who hold their own lease in a facility, as grant or lease 
holders, the full annual rent for their use based on the BLM 
communication use rent schedule. Moreover, BLM will include such tenant 
or customer use in calculating the rent the facility owner or facility 
manager must pay.
    The provisions in this section were proposed in section 2806.22, 
and except for the changes listed above and minor changes in 
terminology, this section remains as proposed.

Section 2806.37 How Will BLM Calculate Rent for a Grant or Lease 
Involving an Entity With a Single Use (Holder or Tenant) Having 
Equipment or Occupying Space in Multiple BLM-Authorized Facilities To 
Support That Single Use?

    This section explains that for leases involving an entity (holder 
or tenant) with a single use having equipment or occupying space in 
multiple BLM authorized facilities to support that single use, BLM will 
include the single use to calculate rent for each grant or lease 
occupied by that use. A single use occurs, for example, if a television 
station locates its antenna on a tower authorized by lease ``A'' and 
locates its related broadcast equipment in a building authorized by 
lease ``B.'' Under the requirement in final section 2806.31(c) to list 
tenants and customers in each facility, television use would be 
included in each facility because each facility is benefitting 
economically from having the television broadcast equipment located 
there, even though the combined equipment is supporting only one single 
end use. The television station use would be included in the rental 
calculation for both lease ``A'' and lease ``B.'' With the exception of 
minor editorial changes, this section is substantially equivalent to 
proposed section 2806.23(a).

[[Page 21016]]

Section 2806.38 Can I Combine Multiple Grants or Leases for Facilities 
Located on One Site Into a Single Grant or Lease?

    Under this section, with BLM's approval, if you hold multiple 
authorizations for two or more facilities on the same site, you can 
combine all those uses under one grant or lease. The highest value use 
in all the combined facilities becomes the base rent. BLM then charges 
each remaining use in the combined facilities at 25 percent of the rent 
taken from the schedule. These uses include uses we previously 
calculated as base rents when BLM authorized each of the facilities on 
an individual basis. This section was proposed as section 2806.23(b).
    One commenter said that this final section should state that 
authorizations will be combined when it is in the public interest and 
at BLM's discretion. The commenter also said that the final rule should 
make clear that when facilities are combined under a single 
authorization, the previous base rents will be included at the 25 
percent rate as tenants. BLM agrees with this comment and added 
language to the final rule to specify that you must have BLM approval 
to combine multiple leases for facilities on one communication site 
into one lease. We also added the last sentence to the paragraph to 
make it clear that once facilities are combined under one 
authorization, there would be one highest value use determining base 
rent and all other contributing tenant uses would be at the 25 percent 
rate.

Section 2806.39 How Will BLM Calculate Rent for a Lease for a Facility 
Manager's Use?

    This section explains that BLM will follow section 2806.31(a) to 
calculate rent for a lease involving a facility manager's use. However, 
we include the rent from the rent schedule for a facility manager's use 
in the rental calculation only if the value of that use is equal to or 
greater than the value of any other use in the facility. BLM excludes 
the facility manager's use in the 25 percent calculation in section 
2806.31(a) when it does not exceed the highest value use. For example, 
if a facility manager leased space to a lower valued broadcast 
translator, the facility manager would be the highest value use setting 
base rent and the broadcast translator would enter the 25 percent 
calculation in section 2806.31(a). If the facility manager also leased 
space to a cellular company, the higher valued cellular company use 
would determine the base rent, the broadcast translator would enter the 
25 percent calculation, and we would not include the facility manager 
in the rent calculation. This section was proposed as section 2806.24.
    If you are a facility owner and you terminate your use within the 
facility, but want to retain the lease for other purposes, BLM will 
continue to charge you for your authorized use until BLM amends the 
lease to change your use to facility manager or to some other 
communication use. We added this paragraph to the final rule to make it 
clear that when a holder's use changes, the holder needs to amend its 
lease to reflect the change in use. If the holder didn't request an 
amendment, the holder would continue to pay for a use that no longer 
exists in the facility.

Section 2806.40 How Will BLM Calculate Rent for a Grant or Lease for 
Ancillary Communication Uses Associated With Communication Uses on the 
Rent Schedule?

    This section explains that if you use ancillary communication 
equipment, such as a microwave relay, directly related to operating, 
maintaining, and monitoring the primary use of a grant (see the 
definition of ``Communication use rent schedule'' in section 2801.5 of 
this part), BLM will calculate and charge rent only for the primary 
use. This section was proposed as section 2806.25(a). In the final rule 
we replaced the phrase ``internal mobile radio and microwave systems'' 
with ``ancillary communications equipment'' because we no longer use 
the term ``internal mobile radio'' anywhere in this rule. Also, we 
replaced the phrase ``give support or connect one another on the same 
communications facility'' with ``is used solely in direct support of 
the primary use'' and added a cross-reference to the definition of 
``Communication use rent schedule.'' This definition states that 
ancillary communication equipment is directly related to operating, 
maintaining, and monitoring the primary use, and more accurately 
describes what uses we consider to be ancillary. We dropped proposed 
section 2806.25(b) from the final rule because it did not describe 
ancillary uses and was therefore unnecessary in this section. We 
received no substantive comments on this section.

Section 2806.41 How Will BLM Calculate Rent for Communication 
Facilities Ancillary to a Linear Grant or Other Use Authorization?

    When BLM authorizes a communication facility which is ancillary to 
a linear grant, or some other type of use authorization (e.g., a 
mineral lease or sundry notice), BLM will determine the rent using the 
linear rent schedule (see section 2806.20) or rent scheme associated 
with the other authorization, and not the communication use rent 
schedule. This section was proposed as section 2806.25(c). We reworded 
the entire paragraph of the proposed rule making it easier to 
understand. We deleted the last sentence of the proposed rule because 
it was not an accurate statement.

Section 2806.42 How Will BLM Calculate Rent for a Grant or Lease 
Authorizing a Communication Use Within a Federally-Owned Communication 
Facility?

    This section explains that if you are an occupant of a federally-
owned communication facility, you must have your own grant or lease and 
pay the full rent from the rent schedule. If a Federal agency holds a 
grant or lease and agrees to operate the facility as a facility owner 
under section 2806.31 of this subpart, occupants do not need a separate 
BLM grant or lease. In this case, BLM will calculate and charge rent to 
the Federal facility owner under sections 2806.30 through 2806.44 of 
this subpart.
    This section was proposed as section 2806.26. We reworded the 
proposed rule to clear up misunderstandings about Federal agency grant 
holders paying rent. Several commenters were concerned BLM was going to 
start assessing rent for Federal grant holders (see the discussion of 
comments in section 2806.14) and this section explains how that may 
occur in the case of a communication site lease. We reworded the second 
paragraph of the proposed rule to explain that a Federal agency must be 
willing to accept a grant or lease and operate the facility as a 
facility owner before tenants would not need a separate right-of-way 
grant.
    Commenters said that Federal agencies do not fit within the 
definitions of ``facility manager'' or ``facility owner,'' since 
subpart 2806, regarding rent, cannot apply to Federal agencies, even 
those that have commercial ventures and otherwise may fit the 
descriptions of ``facility manager or owner.'' For the reasons 
discussed earlier in sections 2801.5 and 2806.14, BLM disagrees with 
this comment. The final rule allows for a Federal agency to become a 
facility owner if it so chooses. In practical terms, we realize that 
few Federal agencies will choose to become a facility manager or owner.
    One commenter said that we should rewrite the first sentence of 
proposed section 2806.27 as follows: ``In the first year of 
implementation of the rent

[[Page 21017]]

schedule, CY 1997, BLM will phase-in over a 5-year period any rent in 
excess of $1,000 increase from CY 1996 rents.'' The commenter said that 
the proposed rule could be misinterpreted to mean that BLM would apply 
the phase-in of rent any time there was an increase in rent of $1,000 
or more. We assume that the commenter's mention of CY 1997 refers to 
the fact that calendar year 1997 was the first year that the 
communication use rent schedule was effective. The preamble to the 
proposed rule at 64 FR 32113 (June 15, 1999) notes that 1997 was also 
the first year of BLM's 5-year phase-in period for the communication 
use rent schedule. Because more than five years have passed since the 
communication use rent schedule was effective, all qualifying cases for 
phase-in rent have been completed. This fact has caused us to delete 
this section from the final rule.

Section 2806.43 How Does BLM Calculate Rent for Passive Reflectors and 
Local Exchange Networks?

    This section explains that BLM calculates rent for passive 
reflectors and local exchange networks by using the same rent schedules 
for passive reflectors and local exchange networks that the Forest 
Service uses for the region in which the facilities are located. You 
may obtain the pertinent schedules from any Forest Service or from any 
BLM state office in the region in question. For passive reflectors and 
local exchange networks not covered by a Forest Service regional 
schedule, BLM uses the provisions in section 2806.50 of this subpart to 
determine rent.
    This section also includes definitions of the terms ``passive 
reflector'' and ``local exchange networks'' that are new to the final 
rule. We added these terms so that BLM field personnel and grant 
holders understand the terms and, for example, do not confuse a radio 
phone local exchange network with a private mobile radio service. We 
use Forest Service definitions here since we base our rent for these 
uses on the Forest Service schedule (see Forest Service Handbook 
2709.11-2000-1, Chapter 48.12 (e) and (f)). This section was proposed 
as sections 2806.28(a) and (d). Proposed section 2806.28(b) is covered 
in final section 2806.50 and proposed section 2806.28(c) is covered in 
final section 2806.16.

Section 2806.44 How Will BLM Calculate Rent for a Facility Owner or 
Facility Manager's Grant or Lease Which Authorizes Communication Uses 
Subject to the Communication Use Rent Schedule and Communication Uses 
Whose Rent BLM Determines by Other Means?

    This section explains how BLM calculates rent for a facility owner 
or facility manager's lease which includes communication uses subject 
to the communication use rent schedule and communication uses whose 
rent BLM determines by other means. BLM determines the rent for a use 
not on the communication use rent schedule under section 2806.50 of 
this subpart. For those uses on the rent schedule, BLM establishes rent 
using sections 2806.30 and 2806.31 of this subpart. We determine the 
facility owner or the facility manager's rent by identifying the 
highest rent in the facility and adding to it 25 percent of the rent of 
all other uses subject to rent. We erroneously omitted this section 
from the proposed rule. Although it rarely occurs, BLM believes it is 
necessary to make clear how rent should be calculated in these 
situations.

Other Rights-of-Way

Section 2806.50 How Will BLM Determine Rent for a Grant When Neither 
the Linear Rent Schedule at Section 2806.20 Nor the Communication Use 
Rent Schedule at Section 2806.30 Applies?

    This section explains that when neither the linear nor the 
communication use rent schedule is appropriate, BLM determines your 
rent through a process based on comparable commercial practices, 
appraisals, competitive bid, or other reasonable methods, such as 
developing a new schedule. BLM will notify you in writing of the rent 
determination. If you disagree, you may appeal BLM's final 
determination under section 2801.10 of this part. This section is based 
on proposed section 2806.28(b) and the requirements are the same as 
that proposed rule.
    Several commenters were opposed to the alternate rent calculation 
to recover fair market value. The commenters said that the provision 
did not contain criteria ``as to what types of use would trigger an 
alternate valuation or what level of expected rent would warrant a 
separate appraisal or on what the expectation would be based.'' The 
commenters also said that BLM should not use a higher rental valuation 
for telecommunication carriers than we do for other types of carriers. 
BLM disagrees with the commenters. Final section 2806.30(c)(1) through 
(5) sets forth the occasions when we would not use the communication 
use rent schedule to determine rent. Appraisals may be appropriate for 
new technologies, competitive bidding, and certain conditions described 
in paragraph (c)(5) of this section. Finally, we do not use a higher 
valuation for telecommunication carriers than we do for other types of 
carriers.

Subpart 2807--Grant Administration and Operation

    This subpart describes administration and operations activities 
under grants. It covers topics such as:
    (A) When grant holders can start using their right-of-way;
    (B) When grant holders must contact BLM;
    (C) Liability for different kinds of grant holders;
    (D) Policies relating to terminating or suspending grants;
    (E) How to amend or assign grants; and
    (F) Policies relating to renewing grants.

Section 2807.10 When Can I Start Activities Under My Grant?

    This section explains that when you can start activities under your 
grant depends on the terms of the grant. You can start activities when 
you receive the grant you and BLM signed, unless the grant includes a 
requirement for BLM to provide a written Notice to Proceed. If your 
grant contains a Notice to Proceed requirement, you may not initiate 
construction, operation, maintenance, or termination until BLM issues 
you a Notice to Proceed.
    We received no comments on this section. With the exception of 
editorial changes, this section remains as proposed.

Section 2807.11 When Must I Contact BLM During Operations?

    This section explains that you must contact BLM:
    (A) At the times specified in your grant;
    (B) When your use requires a substantial deviation from the grant. 
You must obtain BLM's approval before you begin any activity that is a 
substantial deviation;
    (C) When there is a change affecting your application or grant, 
including, but not limited to, changes in:
    (1) Mailing address;
    (2) Partners;
    (3) Financial conditions; or
    (4) Business or corporate status;
    (D) When you submit a certification of construction, if the terms 
of your grant

[[Page 21018]]

require it. A certification of construction is a document you submit to 
BLM after you have finished constructing a facility, but before you 
begin operating it. The certification verifies that you have 
constructed and tested the facility to ensure that it complies with the 
terms of the grant and with applicable Federal and state laws and 
regulations; and
    (E) When BLM requests it. You must update information or confirm 
that information you submitted before is accurate.
    We changed paragraph (b) of this section by moving the definition 
of the term ``substantial deviation'' from this section to the 
definitions section of subpart 2801. We did this because the term is 
used more than once in these regulations and it is redundant to define 
the term the same way in two separate places. We also added language to 
specify that you must obtain BLM's approval before you begin any 
activity that substantially deviates from the activity the grant 
allows. This is a requirement of previous section 2803.2(b) that we 
inadvertently omitted from the proposed rule.
    We amended paragraph (d) of this section by adding a better 
explanation of a ``certification of construction.''
    We also added a new paragraph (e) to this section. This provision 
is in previous section 2803.2(c). We inadvertently omitted it from the 
proposed rule.
    Several commenters objected to being required to contact BLM every 
time they have to install a piece of equipment on existing poles on the 
lands in the grant to correct for hazardous situations or low 
clearances. Other commenters had the same concerns over small buildings 
used for storage. Some of the commenters said this type of information 
is not essential to BLM. The contact requirement of section 2807.11(b) 
applies only to uses that are not authorized in an existing grant. The 
National Environmental Policy Act requires BLM to assess the impacts of 
uses of the public lands before authorizing or allowing such uses and 
this contact requirement is essential to enable BLM to meet its 
obligations under this statute.

Section 2807.12 If I Hold a Grant, for What Am I Liable?

    This section explains your liabilities as a grant holder. You are 
liable to the United States for any damage or injury it incurs in 
connection with your use and occupancy of the right-of-way. Similarly, 
you are liable to third parties for any damage or injury they incur in 
connection with your use and occupancy of the right-of-way.
    You are also strictly liable for any activity or facility 
associated with your right-of-way area that BLM determines presents a 
foreseeable hazard or risk of damage or injury to the United States. 
BLM will specify in the grant any activity or facility posing such 
hazard or risk, and the financial limitations on damages commensurate 
with such hazard or risk. BLM will not impose strict liability for 
damage or injury resulting primarily from an act of war, an act of God, 
or the negligence of the United States, except as otherwise provided by 
law. As used in this section, strict liability extends to costs 
incurred by the Federal Government to control or abate conditions, such 
as fire or oil spills, which threaten life, property, or the 
environment, even if the threat occurs to areas that are not under 
Federal jurisdiction. This liability is separate and apart from 
liability under other provisions of law.
    This section explains that you are strictly liable to the United 
States for damage or injury up to $2 million for any one incident. BLM 
will determine liability for any amount in excess of this strict 
liability cap through the ordinary rules of negligence under section 
504(h)(2) of FLPMA.
    The proposed rule would have increased the strict liability cap 
from $1 million to $5 million. Many comments indicated that the 
increase was too great. The final rule increases the strict liability 
cap from the previous $1 million cap to a $2 million cap. We arrived at 
the $2 million cap by looking at the increases from 1980 (when the cap 
was instituted) to 2004 in both the IPD-GDP (+ 105%) and the CPI-U (+ 
138%). Adjusting the $1 million cap by the change in the IPD-GDP over 
this period equals $2,050,000. Adjusting the $1 million cap by the 
change in the CPI-U over this same period equals $2,380,000. Therefore, 
we believe that increasing the strict liability cap to $2 million is 
reasonable.
    To keep the cap current with changes in economic conditions, the 
final rule applies an annual adjustment factor based on the change in 
the CPI-U, as of July of each year (the difference in CPI-U from July 
of one year to July of the following year). This increase (rounded to 
the nearest $1,000) will take into account inflation and will provide 
better protection of Federal lands.
    The $2 million cap does not apply to the release or discharge of 
hazardous substances on or near the grant, or where liability is 
unrestricted under other laws.
    This section explains that the rules of subrogation apply in cases 
where a third party caused the damage or injury. This means that when a 
grant holder compensates the United States in strict liability for 
damage or injury caused by a third party, the grant holder steps into 
the place of the United States and has the right to pursue compensation 
from the third party for the damage or injury done to the United 
States.
    If you cannot satisfy claims for injury or damage, all owners of 
any interests in, and all affiliates or subsidiaries of any holder of, 
a grant, except for corporate stockholders, are jointly and severally 
liable to the United States. If BLM issues a grant to more than one 
person, each is jointly and severally liable. Joint and several 
liability in a grant means that each person who holds an interest in a 
grant is responsible for the full amount of liability if the other 
grant holders cannot satisfy the liability. This provision is in 
previous regulations at sections 2803.1-5(g) and (i).
    This section also explains that by accepting the grant, you agree 
to fully indemnify or hold the United States harmless for liability, 
damage, or claims arising in connection with your use and occupancy of 
the right-of-way areas.
    The provisions of this section do not limit or exclude other 
remedies. This provision is consistent with existing policy and 
previous section 2803.1-5. We inadvertently omitted it from the 
proposed rule and therefore added it here.
    We reworded and reorganized proposed sections 2807.12(b) and (f) by 
consolidating the provisions describing the strict liability items that 
will appear in a grant into final section 2807.12(b) and by making it 
clear that the financial limitations on damages specified in the grant 
will be commensurate with the hazard or risk BLM determines. We also 
added wording to make clear that the strict liability cap applies for 
any one incident. Previous section 2803.1-5(b) stated that the 
limitation was for any one event. We inadvertently omitted the wording 
in the proposed rule and therefore added it to the final rule to be 
consistent with ongoing policy and previous regulations.
    We revised proposed section 2807.12(h) to add tribal governments 
and to remove the statement that state and local governments may be 
excepted from the requirements of section 2807.12. This exception 
language may cause confusion and is not consistent with previous 
section 2803.1-5(f) or BLM policy. Liabilities of state, tribal, and 
local governments are discussed in final section 2807.13.
    Except for the changes in the increase in the maximum strict 
liability financial limitation from $1 million to $2 million, and the 
provision for no maximum

[[Page 21019]]

limitation on strict liability resulting from damages or injuries 
caused by the release or discharge of hazardous substances or as 
otherwise provided by law, the final rule is substantially equivalent 
to previous section 2803.1-5.
    Several commenters said that final section 2807.12(a) should make 
clear that the grant holder is only liable to third parties for damage 
or injury that is a result of the grant holder's intentional 
negligence. The provision regarding liability to third parties is a 
requirement of previous section 2803.1-5(d). The proposed rule 
clarified this section, and the proposal has been carried forward into 
the final rule intact.
    Numerous commenters objected to the strict liability provisions of 
proposed section 2807.12(b). Several commenters said that the strict 
liability provisions in this rule are arbitrary and capricious and that 
a right-of-way grant holder cannot be held responsible for activities 
on the right-of-way if he does not have the ability to limit access to 
that right-of-way. Commenters said that if the holder is to be held 
strictly liable, he must be allowed to secure and control the right-of-
way. Several commenters said that the liability provisions should not 
apply to cases involving negligence by a third party and objected to 
being held liable for costs arising from damages, injuries, fees, and 
costs that are beyond their control. One commenter said that any 
responsibility for liability should be limited to acts of or under the 
control of the permit holder, or acts of its customers. The commenter 
said that removing the Federal Government's liability as landowner is 
unfair and shifts liability to the innocent permit holder. One 
commenter said that the strict liability standard is unfair and should 
be replaced with an ordinary negligence standard. The commenter said 
that just as the right-of-way grantee does not enjoy full ownership of 
the right-of-way, it should not bear full liability for all damage. The 
commenter said that the strict liability standard presents a 
potentially crippling expense to the nation's rural electric 
cooperatives that may force some of them to choose not to apply for 
right-of-way grants, and that could result in depriving some rural 
customers of electricity. The commenter said that under an ordinary 
negligence standard, grantees would not be liable for damages that 
could not be prevented by reasonable measures and that standard was 
fairer to grantees. The same commenter said that an ordinary negligence 
standard is not inconsistent with FLPMA. Several commenters said that 
there should be a specific exclusion of liability if the cause of the 
pollution was principally that of another permit holder or another 
party. The commenters also said the final rule should make clear how 
the standard will operate where there are multiple permit holders on a 
site and the polluter is unable to pay damages. Other commenters said 
that the normal negligence rules are adequate protection for landowners 
and for holders of nonfederal rights-of-way in the United States and 
that the Federal Government should be bound by the same standard.
    The strict liability standard in section 2807.12(b) is specifically 
authorized by section 504(h)(2) of FLPMA (43 U.S.C. 1764(h)(2)), which 
provides:

    Any regulation or stipulation imposing liability without fault 
shall include a maximum limitation on damages commensurate with the 
foreseeable risks or hazards presented. Any liability for damage or 
injury in excess of this amount shall be determined by ordinary 
rules of negligence.

    BLM regulations addressing strict liability have been in effect 
since 1980. Previous section 2803.1-5 authorized BLM to impose strict 
liability on grant holders for any activity or facility within the 
right-of-way that presented, in the agency's discretion, a foreseeable 
hazard or risk of damage or injury to the United States. In the 
preamble to the 1980 rule, BLM addressed and rejected concerns similar 
to those expressed by the current commenters that a holder's inability 
to restrict access to the right-of-way precluded the imposition of 
strict liability. BLM stated at 45 FR 44518, 44524 (July 1, 1980):

    Section 504(h) of the Federal Land Policy and Management Act 
gave the Secretary of the Interior discretionary authority to impose 
strict liability in connection with right-of-way grants or temporary 
use permits under the circumstances described. The decision to 
exercise the authority was made after careful consideration of all 
aspects of the issue. The overriding reason for imposing strict 
liability was the need to provide the Federal Government and the tax 
paying public with protection from damages resulting from extra 
hazardous activity on the public lands by those holding a right-of-
way grant or temporary use permit and gaining a benefit from such 
use.

    Additional support for imposing strict liability is in the preamble 
to the 1979 proposed rule at 44 FR 58106, 58113 (October 9, 1979).
    BLM continues to believe that strict liability is properly imposed 
on a holder for certain foreseeable risks and hazards. The fact that a 
holder may not always be able to control access to the right-of-way 
does not mean that strict liability may not be applied to specified 
activities or facilities associated with the right-of-way area. Under 
the common law, strict liability has been regularly applied to 
abnormally dangerous activities, irrespective of the liable party's 
ability to control access to the activity. In fact, it is the inability 
to control the harm that, in turn, can justify imposing strict 
liability in the first place. Certain activities undertaken on FLPMA 
and MLA rights-of-way, such as transmitting electricity, transporting 
oil and gas, and using and storing hazardous materials, are inherently 
dangerous. Strict liability for such activities is both necessary and 
appropriate to ensure that the cost of remediation and restoration 
falls on the grant holder, rather than the public, and to encourage 
grant holders to take extraordinary care when conducting inherently 
dangerous activities on public lands. For these reasons, BLM is 
retaining the strict liability standard in this final rule and is not 
adopting a negligence or knowing and willful standard, as suggested by 
commenters.
    In addition, BLM points out that Congress authorized the imposition 
of strict liability in section 28(x) of the MLA, 30 U.S.C. 185(x), and 
imposed a policy of strict liability in section 204(a) of the Trans-
Alaska Pipeline Authorization Act, 43 U.S.C. 1653(a). Senate Report 94-
583, part of the legislative history of FLPMA, notes the similarities 
(at page 73) between the strict liability provisions of FLPMA and the 
MLA. In the preamble to the 1979 proposed rule, BLM acknowledged that 
the strict liability provisions of FLPMA were modeled after the MLA, as 
amended (see 44 FR 58106, 58113).
    One commenter requested that BLM explain the terms ``primarily'' 
and ``except as otherwise provided by law'' in proposed section 
2807.12(b)(1). As noted above, that paragraph states that BLM will not 
impose strict liability for damage or injury resulting primarily from 
an act of God, act of war, or the negligence of the United States, 
except as otherwise provided by law. BLM intends that the word 
``primarily'' have its commonly accepted meaning.
    ``Primarily'' means principally or chiefly. Accordingly, BLM will 
not impose strict liability where, for example, the negligence of the 
United States was the principal cause of the loss or damage. Strict 
liability would be appropriate, in contrast, where the United States's 
negligence was a contributory factor, provided that it was not the 
principal cause. BLM expects that the law of the state where the right-
of-way is located will govern the rules regarding fault.
    ``Except as otherwise provided by law'' means, for example, that if 
the acts or omissions giving rise to damage or

[[Page 21020]]

injury support a claim under a strict liability statute, such as 
CERCLA, the negligence of the United States will not preclude a strict 
liability claim.
    One commenter remarked that BLM should clarify whether the term 
``right-of-way area,'' as used in proposed sections 2807.12(b) and 
2807.12(f) (final sections 2807.12(b) and 2807.12 (e)), includes land 
not specific to the holder's grant. BLM intends that the phrase 
``right-of-way area'' in these paragraphs refer to the land 
specifically included in the holder's grant.
    Many commenters objected to the proposed raising of the liability 
ceiling to $5 million from the current $1 million, and several even 
objected to the previous regulation's $1 million ceiling. The 
commenters stated that BLM had given no evidence that there was a need 
for the increase and that the increase would discourage, if not 
prevent, oil and gas exploration and small electric cooperatives from 
serving rural areas. Some of the commenters said the liability cap 
increase would disproportionately affect small right-of-way holders who 
may not have access to, or be able to afford, the required commercial 
insurance. Under this final rule, we would only include a strict 
liability provision in a grant after analyzing the foreseeable hazard 
or risk of damage or injury to the United States. It is not common for 
BLM to issue grants with strict liability provisions. Therefore, this 
provision will not have a significant effect on a substantial number of 
small entities. The scarcity of cases challenging BLM's application of 
the strict liability provisions of section 504 suggests that the agency 
has applied these provisions in a reasonable manner.
    Section 504(h)(2) of FLPMA (43 U.S.C. 1764(h)(2)) requires that any 
regulation imposing strict liability without fault include a maximum 
limitation on damages commensurate with the foreseeable risks or 
hazards presented. The ordinary rules of negligence determine any 
liability for damage or injury in excess of this amount. In 1980, BLM 
instituted a $1 million ceiling on strict liability cases. At all 
times, however, damages could exceed this $1 million limit if 
determined by ordinary rules of negligence.
    The previous regulations, issued in July 1980, established a 
maximum strict liability limit of $1 million for any one event. This 
final rule raises the amount to $2 million for any one incident. (We 
changed the term ``event'' to ``incident'' in the final rule to be more 
consistent with the terminology in CERCLA and other environmental 
legislation.) The increase recognizes inflation that has occurred since 
1980 and the increasing complexity involved in responding to incidents 
that damage or threaten life, property, or the environment.
    As noted earlier, the proposed rule included an increase in the 
liability limitation to $5 million. A number of commenters objected to 
the increase and said that it would disproportionately affect small 
right-of-way holders who may not have access to commercial insurance. 
In the final rule, we reduced the increase in the strict liability 
limitation to $2 million in an effort to reduce adverse impacts to 
grant holders while still providing the Federal Government and the tax-
paying public with reasonable protection from damages resulting from 
activities and facilities on the public lands. Inflation alone warrants 
the increase to $2 million. The IPD-GDP has increased 105 percent from 
1980 to 2004 and the CPI-U has increased 138 percent during this same 
period. BLM believes that the CPI-U is a good measure to use in 
estimating inflation in the costs to control or abate conditions which 
threaten life, property, or the environment. The $2 million strict 
liability limit will be updated annually by this index.
    A few commenters supported the ``polluter pays'' strict liability 
standard for hazardous materials. The commenters said that because 
hazardous materials are intrinsically dangerous to the public, 
accidents involving them must be prevented at all costs and a strict 
liability standard gives the proper incentive to prevent such 
accidents. The commenters said that strict liability eliminates 
lengthy, expensive litigation which is costly to both the grantee and 
to BLM. Commenters also said that it is inappropriate to place a cap on 
strict liability even for non-hazardous materials. The commenters said 
that if a company seeks the privilege of using the public's land for 
commercial use, it should be strictly liable for whatever damages occur 
as a result of such use. As stated earlier, the cap on strict liability 
is a requirement of section 504(h)(2) of FLPMA. The cap does not apply 
where another applicable statute (such as CERCLA) provides for 
unlimited damages, or otherwise pre-empts the damage limits in FLPMA.
    Several commenters said that in the final rule we should strike the 
phrase ``even if the threat occurs on areas that are not under federal 
jurisdiction'' because the Federal Government has no jurisdiction or 
right to impose strict liability on any property other than Federal 
property. One commenter said that it is not clear whether the Federal 
Government is entitled to recover such costs under the applicable laws 
and that it would be more logical for the grantee to assume 
responsibility/liability consistent with ``applicable law.'' The final 
rule replaces ``on'' with ``to'' in the cited phrase to make clear that 
strict liability would include costs incurred by the United States for 
a threat that occurred to non-federal land. Examples might include a 
fire or landslide that started on the right-of-way and migrated off 
Federal land, causing damage or injury to non-federal land. A similar 
policy was set forth in the previous regulations at section 2803.1-
5(b). We have not adopted the suggestion that the cited phrase be 
removed from the final rule.
    Several commenters said that we should be consistent in the 
regulations and use either the term ``hazardous substance'' or 
``hazardous materials.'' The commenters said that the term ``hazardous 
substance'' is not defined in the rule. One commenter said that the 
``collective definition'' of hazardous materials is a problem because 
it is doubtful that all the laws referenced in the definition call for 
unlimited financial liability. The commenter said that in the proposed 
rule BLM cites a case decided under CERCLA for the proposition that 
there are no limits to cost recovery under CERCLA, but then uses this 
rationale to support the same principle with respect to liability under 
any of the other statutes in the definition of ``hazardous materials.'' 
To the extent that these other laws would place a limitation on one's 
financial exposure, proposed section 2807.12(f) removed that limitation 
by the collective definition of ``hazardous materials,'' the commenters 
continued. The commenters said that this is inappropriate. One 
commenter said that because this section causes uncertainty for the 
public and BLM, it should be deleted.
    In response to those comments, BLM has changed the language of 
proposed section 2807.12(f) (final section 2807.12(b)(3)) to reference 
``hazardous substances,'' as defined by CERCLA and not ``hazardous 
materials.'' BLM notes, however, that the $2 million cap also may not 
be applicable to other specified pollutants, contaminants, and 
substances where controlling law so provides, such as section 1002(a) 
of the Oil Pollution Act (33 U.S.C. 2702(a)). Where a release would 
give rise to a claim under Federal or state law that provides for 
unlimited damages, or otherwise pre-empts the damage limits contained 
in FLPMA, the limitations of FLPMA will not apply.

[[Page 21021]]

    Several commenters found the provisions of proposed section 
2807.12(g) (final sections 2807.12(b)(3) and (4)) to be confusing. That 
proposed section stated that a holder is strictly liable for all costs 
above $5 million (now $2 million in the final rule) that accrue because 
of negligence regarding hazardous substances. The commenters said that 
this rule adds a new concept of negligence to this provision which for 
the most part imposes strict liability. The commenters also said the 
rule should make clear whose negligence triggers this provision. We 
agree with the commenters. The purpose of final sections 2807.12(b)(3) 
and (4) is to implement section 504(h)(2) of FLPMA (43 U.S.C. 
1764(h)(2)). The final rule, accordingly, removes the reference to 
negligence regarding hazardous substances and states that any liability 
in excess of the $2 million strict liability cap will be determined by 
the ordinary rules of negligence.
    In referring to the strict liability provisions of the proposed 
rule, several commenters asked if there have been verifiable losses to 
the U.S. Treasury as a result of rights-of-way crossing Federal land. 
BLM has not researched case records to determine the extent of 
unreimbursed costs the United States has incurred stemming from damage 
or injury associated with rights-of-way crossing Federal land. The 
intent of the strict liability provisions is to help prevent the public 
from incurring such unreimbursed costs in the future in those 
situations where a foreseeable hazard or risk of damage or injury to 
the United States can be identified at the time a right-of-way grant is 
authorized.
    Several commenters said that the joint and several liability 
provision of proposed section 2807.12(c) ``* * * ignores corporate 
separateness, a fundamental principle of corporate law. Each 
corporation must be held separately liable.'' The provisions of 
proposed section 2807.12(c) to which the commenters object were first 
promulgated in 1980 at 43 CFR 2803.1-4(g) and have been effective ever 
since that time, although the citation changed in 1987 to 43 CFR 
2803.1-5(g). This section is necessary to ensure that, where the loss 
or damage is substantial and potentially exceeds the assets of the 
grant holder, related entities will also be liable. It also ensures 
that between grant holders and the public, the grant holder and not the 
public will pay for rehabilitating damage to the affected lands. 
Similar liability is imposed at paragraph 28(x) of the MLA, 30 U.S.C. 
185(x), and at section 204(c) of the Trans-Alaska Pipeline 
Authorization Act, 43 U.S.C. 1653(c).
    One commenter asked why there is an exception for corporate 
stockholders being jointly and severally liable to the United States 
when the holder cannot satisfy claims for injury or damage. The 
exception for corporate stockholders was first promulgated in 1980 as 
43 CFR 2803.1-4(g) and has been effective since that time, although the 
citation changed in 1987 to 43 CFR 2803.1-5(g). The exception has been 
carried forward into the final rule. It is a fundamental principle of 
corporate law that a corporation is a legal entity distinct from its 
owners. Owners of a corporation are its stockholders. We preserve this 
distinction in final section 2807.12(c) and accordingly did not amend 
this rule to make corporate stockholders jointly and severally liable 
with the corporation.
    Several commenters said that proposed section 2807.12(e) (final 
section 2807.12(d)) should be deleted since multiple holders should be 
jointly and severally liable only to the extent applicable law would 
impose such liability. We first published provisions similar to those 
in this paragraph in our regulations in 1980 at 43 CFR 2803.1-4(i). It 
has been effective since then, although the citation changed in 1987 to 
43 CFR 2803.1-5(i). BLM has retained the provision as final section 
2807.12(d) because it has provided clarity that would be lacking if the 
commenter's view was adopted.
    Several commenters said that the final rule should guarantee that 
the grant holder has sufficient authority to mitigate its liability for 
fires through appropriate maintenance of vegetation. In processing an 
application for a grant, BLM will attempt to incorporate terms and 
conditions relative to the management of vegetation that balance the 
grant holder's need to minimize its liability exposure for fires with 
other environmental concerns that might be present in the right-of-way 
area. Because resource issues and concerns can vary widely among 
locations, BLM does not believe that it is practical or would protect 
the public interest to incorporate such a regulation of general 
applicability in this final rule.
    Several commenters said that BLM should amend the rule so that 
current permit holders would be subject only to current BLM regulations 
on liability until they renew their permit(s). Alternatively, the 
commenters said that the environmental liability under the rule should 
be phased-in over the existing term of a holder's right-of-way permit. 
They said that this would afford innocent permit holders an opportunity 
to assess the environmental condition of the site and make reasonable 
business decisions based on environmental findings, including whether 
to seek renewal of the permit at the current site location. Under the 
previous and final rule, existing holders are subject to changes in 
regulations that occur mid-term. No phase-in is appropriate. Previous 
section 2801.2 and proposed section 2805.10(c)(1) (final section 
2805.12(a)) state that an applicant, by accepting a right-of-way grant, 
agrees to comply with and be bound by all applicable Federal and state 
laws, including regulations, that may be issued during the term of the 
grant. All BLM grants contain the following provision: 'This grant or 
permit is issued subject to the holder's compliance with all applicable 
regulations contained in Title 43 Code of Federal Regulations part 
2800.'' Although the increase in the strict liability cap will occur 
mid-term for many grant holders, holders of FLPMA rights-of-way have at 
all times been liable for amounts in excess of the previous $1 million 
cap. Liability above that amount would have been based on ordinary 
rules of negligence.
    One commenter said that ``* * * because BLM can apply to federal 
agencies only those provisions that are applicable to a federal entity, 
the provisions regarding liability, guarantee bonds, releases of third 
party environmental damage, and other such provision should not apply 
to federal agencies. An agency's liability for torts, for example, is 
covered by the Federal Tort Claims Act.'' BLM agrees generally with the 
comment. Final section 2809.10 states that ``The regulations in this 
part apply to Federal agencies to the extent possible * * *.'' To the 
extent, therefore, that the liability provisions of the rule are not 
appropriate for Federal agencies, they will not apply.

Section 2807.13 As Grant Holders, What Liabilities Do State, Tribal, 
and Local Governments Have?

    This section explains that state, tribal, or local governments or 
their agency or instrumentality are liable to the fullest extent the 
law allows at the time that BLM issues the grant. If a state, tribal, 
or local government or their agency or instrumentality does not have 
the legal power to assume full liability, it must repair damages or 
make restitution to the fullest extent of its powers. Senate Report No. 
94-583 notes at 73, in commenting on section 403(g) of S. 507, a 
predecessor to section 504(h)(1) of FLPMA, that governmental entities 
may not be legally able to assure protection of the United States 
because of limitations in state law or State Constitutions.

[[Page 21022]]

    This section also explains that BLM may require a state, tribal, or 
local government to provide a bond, insurance, or other acceptable 
security to:
    (A) Protect the liability exposure of the United States to claims 
by third parties arising out of your use and occupancy of the right-of-
way;
    (B) Cover any losses, damages, or injury to human health, the 
environment, and property incurred in connection with your use and 
occupancy of the right-of-way; and
    (C) Cover any damages or injuries resulting from the release or 
discharge of hazardous materials incurred in connection with your use 
and occupancy of the right-of-way.
    Based on the state, tribal, or local government's record of 
compliance and changes in risk and conditions, BLM may require it to 
increase or decrease the amount of its security. The provisions of this 
section do not limit or exclude other remedies.
    Except for minor editorial changes and some reorganizing of 
proposed paragraphs (b)(1) through (b)(3), this section is the same as 
in the proposed rule.

Section 2807.14 How Will BLM Notify Me If Someone Else Wants a Right-
of-Way Grant for Land Subject to My Grant or Near or Adjacent to It?

    This section explains that BLM will notify you in writing when it 
receives an application for a right-of-way grant for land subject to 
your grant or near or adjacent to it. BLM will consider your written 
recommendations as to how the proposed use affects the integrity of, or 
your ability to operate, your facilities. The notice will contain a 
time period within which you must respond. The notice may also inform 
you of additional opportunities to comment.
    We added this section to the final rule to provide notice of BLM's 
long-established policy of informing existing grant holders of new 
applications for grants that might affect the use of existing rights-
of-way. This policy helps BLM to avoid authorizing a new grant that 
would adversely affect the integrity of existing uses or the ability of 
existing grant holders to operate their facilities. The recommendations 
of existing grant holders are desirable to help ensure that this does 
not happen.

Section 2807.15 How Is Grant Administration Affected If the Land My 
Right-of-Way Encumbers Is Transferred to Another Federal Agency or Out 
of Federal Ownership?

    This section explains that if there is a proposal to transfer the 
land your right-of-way encumbers to another Federal agency, BLM may, 
after reasonable notice to you, transfer administration of your grant 
for the lands BLM formerly administered to another Federal agency, 
unless doing so would diminish your rights. If BLM determines your 
rights would be diminished by such a transfer, BLM can still transfer 
the land, but retain administration of your grant under existing terms 
and conditions.
    It also explains that if there is a proposal to transfer the land 
your right-of-way encumbers out of Federal ownership, BLM may, after 
reasonable notice to you and in conformance with existing policies and 
procedures, do one of the following three things:
    (A) Transfer the land subject to your grant. In this case, 
administration of your grant for the lands BLM formerly administered is 
transferred to the new owner of the land;
    (B) Transfer the land, but BLM retains administration of your 
grant; or
    (C) Reserve to the United States the land your grant encumbers, and 
BLM retains administration of your grant.
    This section also explains that BLM or, if BLM no longer 
administers the land, the new land owner may negotiate new grant terms 
and conditions with you. This may include increasing the term of your 
grant, should you request it, to a perpetual grant under section 
2806.23(c) of this part or providing for an easement. We added the 
phrase ``for an easement'' to the end of the last paragraph in this 
section to allow BLM to issue easements in cases where an easement 
would be a more appropriate instrument than a perpetual grant. Section 
103 of FLPMA (43 U.S.C. 1702 (f)) defines ``right-of-way'' to include 
easements and therefore recognizes that easements are an acceptable BLM 
authorization.
    We proposed this section as section 2807.14 and have renumbered it 
to account for new section 2807.14, as discussed above. We also 
reworded paragraphs (a) and (b) and added a new paragraph (c) in 
response to public comments. Paragraphs (a) and (b) are consistent with 
previous section 2803.5.
    Under paragraph (b), the option BLM chooses for lands transferred 
out of Federal ownership depends on the circumstances of the proposed 
transfer and the grant involved. Our choice would be that which would 
be the least disruptive to the parties involved and that which is in 
the public interest.
    Several commenters said that in the final rule BLM should:
    (A) Clarify procedures for maintaining rights-of-way on lands that 
are exchanged or transferred;
    (B) Improve its practice of communicating to grant holders its 
intent to transfer, exchange, or sell lands; and
    (C) Grant easements in perpetuity to existing grantees before 
transferring or require transferees to grant easements when there is a 
transfer.
    BLM agrees that the description of procedures in the proposed rule 
at section 2807.14 for maintaining grants on lands that are exchanged 
or otherwise transferred from BLM could be improved. We rewrote this 
section and added detail to make it clearer. We added a new sentence at 
the end of final section 2807.15(a) to describe the existing procedure 
when BLM's transfer of land to another Federal agency would diminish a 
grant holder's rights. In this case, BLM could transfer the land, but 
retain administration of the grant under existing terms and conditions 
so that there would be no change in administration of the grant.
    BLM also agrees that we could improve our practice of communicating 
to grant holders our intent to transfer, exchange, or sell lands. We 
added the phrase ``after reasonable notice to you'' to sections 
2807.15(a) and (b) to specify that BLM will always provide advance 
notice to affected grant holders of any proposal to transfer land 
encumbered by their grants.
    We added section 2807.15(c) in response to the third comment above. 
The new paragraph describes existing practices. Upon the request of a 
grant holder, BLM will consider extending the term of an existing grant 
to that of a perpetual grant before transferring the land encumbered by 
the grant. If an affected grant holder and the proposed new land owner 
can negotiate a new authorization to replace the existing BLM grant, 
BLM can arrange the timing of approvals so that termination of the BLM 
grant and its replacement by the new authorization occur at the same 
time the transfer of the land is completed.

Section 2807.16 Under What Conditions May BLM Order An Immediate 
Temporary Suspension of My Activities?

    This section explains that if BLM determines that you have violated 
one or more of the terms, conditions, or stipulations of your grant, we 
can order an immediate temporary suspension of activities within the 
right-of-way area to protect public health or safety or the 
environment. BLM can require you to stop your activities before holding 
an administrative proceeding on the matter. Existing regulations and 
section 506 of FLPMA authorize BLM to order

[[Page 21023]]

an immediate temporary suspension without an administrative proceeding.
    The section also states that BLM may issue an immediate temporary 
suspension order orally or in writing to you, your contractor or 
subcontractor, or to any representative, agent, or employee 
representing you or conducting the activity. When you receive the 
order, you must stop the activity immediately. BLM will, as soon as 
practical, confirm an oral order by sending or hand delivering to you 
or your agent a written suspension order explaining the reasons for it.
    You may file a written request for permission to resume activities 
at any time after BLM issues the order. In the request, state the facts 
supporting your request and the reasons you believe that BLM should 
lift the order. BLM must grant or deny your request within 5 business 
days after receiving it. If BLM does not respond within 5 business 
days, BLM has denied your request. You may appeal the denial under 
section 2801.10 of this part.
    The immediate temporary suspension order is effective until you 
receive BLM's written notice to proceed with your activities.
    This section was proposed as section 2807.15. In the final rule we 
replaced the term ``promptly'' in paragraph (b), describing when BLM 
will follow an oral order with a written one, with the phrase ``as soon 
as practical.'' This is more consistent than the proposal with previous 
section 2803.3(b). We also reorganized proposed paragraphs (c), (d), 
and (e) to make them clearer. We moved proposed paragraph (c) to final 
paragraph (d) and consolidated proposed paragraph (e) with proposed 
paragraph (d) because the ``request'' in proposed paragraph (e) is 
identical to the request in proposed paragraph (d). The result is final 
paragraph (c). With the exception of minor editorial changes and the 
reorganization of final paragraphs (c) and (d) explained above, this 
section of the final rule remains as proposed. The section is 
consistent with previous section 2803.3.
    Several commenters said that the words ``violation of one or more 
of the terms of the grant'' are too broad and subject to abuse. 
Commenters also said that safety is the Occupational Safety and Health 
Administration's (OSHA) responsibility. We disagree. Both the proposed 
and final rules state that when there is a violation of one or more of 
the terms, conditions, or stipulations of a grant, BLM may order an 
immediate temporary suspension of activities ``to protect public health 
or safety or the environment.'' This provision is not new. It has been 
in previous section 2803.3 since 1980 and is supported by section 506 
of FLPMA (43 U.S.C. 1766). Only violations that cause or threaten 
damage or injury to public health, safety, or the environment can lead 
to an immediate temporary suspension of activities. Under the rule, BLM 
would not have the authority to issue an immediate temporary suspension 
order for any other type of violation. Although OSHA has responsibility 
for occupational health and safety in the workplace, it is not charged 
with responsibility for health and safety in other situations. BLM's 
authority to suspend a holder's activities to protect public health or 
safety or the environment is expressly granted in section 506 of FLPMA. 
This includes the authority to ensure operations on rights-of-way are 
performed safely and in a manner that protects users of public lands.
    Several commenters said that BLM must not be allowed to suspend 
activities without providing an opportunity for an administrative 
hearing, unless it determines that the operator has willfully and 
knowingly created serious permanent damage to the environment or public 
health and safety following a notice. Commenters also said that the 
correct standard is that BLM must have ``convincing evidence'' before 
suspending activities. One commenter said that BLM did not have 
authority to temporarily suspend activities on a grant to protect 
public health and safety or the environment without an administrative 
hearing. We disagree with these comments. Section 506 of FLPMA provides 
authority for this section of the rule. It states:

    If the Secretary concerned determines that an immediate 
temporary suspension of activities within a right-of-way for 
violation of its terms and conditions is necessary to protect public 
health or safety or the environment, he may abate such activities 
prior to an administrative proceeding.

    Section 506 makes clear that BLM may suspend and abate a holder's 
activities prior to an administrative hearing. This provision also 
establishes the standard BLM uses in determining whether to issue an 
immediate temporary suspension order, namely that such an order is 
necessary ``to protect public health or safety or the environment.'' 
Consequently, we have not adopted the alternate standards commenters 
suggested.

Section 2807.17 Under What Conditions May BLM Suspend or Terminate My 
Grant?

    This section explains that BLM may suspend or terminate your grant 
if you do not comply with applicable laws and regulations or any terms, 
conditions, or stipulations of the grant (such as rent payments), or if 
you abandon the right-of-way.
    This section also explains that a grant also terminates when:
    (A) The grant contains a term or condition that has been met that 
requires the grant to terminate;
    (B) BLM consents in writing to your request to terminate the grant; 
or
    (C) It is required by law to terminate.
    Your failure to use your right-of-way for its authorized purpose 
for any continuous 5-year period creates a presumption of abandonment. 
BLM will notify you in writing of this presumption. You may rebut the 
presumption of abandonment by proving that you used the right-of-way or 
that your failure to use the right-of-way was due to circumstances 
beyond your control, such as acts of God, war, or casualties not 
attributable to you.
    You may appeal a decision under this section under section 2801.10 
of this part.
    This section was proposed as section 2807.16. In addition to minor 
editorial changes, we made a number of changes and additions to improve 
the clarity and completeness of the process and to make it more 
consistent with the previous sections 2803.4(a), (b), and (c).
    In this final rule we moved proposed section 2807.16(b) to final 
section 2807.18, discussed below.
    We also modified proposed paragraph (a) by adding the words ``or 
terminate'' and ``or if you abandon the right-of-way.'' Adding ``or 
terminate'' consolidates proposed paragraph (c)(3) into paragraph (a) 
and is more consistent with previous section 2803.4(b). The phrase ``or 
if you abandon the right-of-way'' is part of previous section 
2803.4(b), and refers to a concept which we addressed only indirectly 
in proposed section 2807.16(d). Our addition of this phrase clarifies 
the purpose of proposed section 2807.16(d).
    We amended proposed paragraph (c)(2) ( final paragraph (b)(2)) to 
provide that BLM's acceptance of your request to terminate a grant must 
be in writing. It is longstanding BLM policy that such acceptances be 
in writing.
    We consolidated proposed paragraph (c)(3) with paragraph (a) (see 
discussion above) and added that your grant terminates when it is 
``required by law to terminate.'' We added this language to final 
paragraph (b)(3) to improve the completeness of the section and reflect 
legal requirements contained in certain pre-FLPMA right-of-way 
statutes.
    Proposed paragraph (d) is now paragraph (c) to account for the 
transfer

[[Page 21024]]

of proposed paragraph (b) to final section 2807.18.
    We added a new paragraph (d) to point out that you may appeal a BLM 
decision issued under this section in accordance with section 2801.10 
of this part. Any adverse BLM decision is appealable under the existing 
43 CFR part 4. We added this paragraph to give you additional notice of 
your appeal rights.
    We received no substantive comments on this section.

Section 2807.18 How Will I Know That BLM Intends To Suspend or 
Terminate My Grant?

    This section explains that before BLM suspends or terminates your 
grant under section 2807.17(a) of this part, we will send you a written 
notice stating that we intend to suspend or terminate your grant. We 
will give the grounds for such action. The notice will give you a 
reasonable opportunity to correct any noncompliance or start or resume 
use of the right-of-way, as appropriate.
    Before BLM suspends or terminates a grant issued as an easement, 
BLM must give you written notice and refer the matter to the Office of 
Hearings and Appeals for a hearing before an administrative law judge 
(ALJ) under 5 U.S.C. 554. No hearing is required if the terms of the 
grant provided for termination on the occurrence of a fixed or agreed-
upon condition, event, or time. If the ALJ determines that grounds for 
suspension or termination exist and such action is justified, BLM will 
suspend or terminate the grant.
    This section was proposed as section 2807.17. In addition to minor 
editorial changes, we made a number of changes and additions to improve 
the accuracy and completeness of the process description and to make it 
more consistent with previous sections 2803.4(d) and (e).
    We modified the first sentence of proposed paragraph (a) by adding 
the reference ``under Sec.  2807.17(a)'' to indicate those suspensions 
and terminations for which BLM will send a written notice. Previous 
section 2803.4(d) stated ``Before suspending or terminating a right-of-
way grant pursuant to paragraph (b) of this section, the authorized 
officer shall give the holder written notice that such action is 
contemplated and the grounds therefor and shall allow the holder a 
reasonable opportunity to cure such noncompliance.'' We inadvertently 
omitted the reference from the proposed rule and added it in this rule 
to be consistent with previous regulations.
    We added the phrase ``or start or resume use of the right-of-way'' 
to the last sentence of paragraph (a) which now reads, ``The notice 
will give you a reasonable opportunity to correct any noncompliance or 
start or resume use of the right-of-way'' to make the section 
consistent with FLPMA. Section 506 of FLPMA states:

    Prior to commencing any proceeding to suspend or terminate a 
right-of-way the Secretary concerned shall give written notice to 
the holder of the grounds for such action and shall give the holder 
a reasonable time to resume use of the right-of-way or to comply 
with this title, condition, rule, or regulation as the case may be.

    We modified the first sentence of paragraph (b) to state that 
before suspending or terminating a grant ``issued as an easement,'' BLM 
must refer the matter to the Office of Hearings and Appeals for a 
hearing. Proposed section 2807.17(b) referred to grants ``issued before 
October 21, 1976, any subsequent grants issued as an easement, and 
grants issued under part 2880 of this chapter.'' We moved the 
provisions for hearings regarding grants issued under part 2880 to 
final section 2886.18. The proposed rule was in error by including all 
grants ``issued before October 21, 1976,'' since only those pre-October 
21, 1976 grants that were issued as easements are subject to the 
hearing requirement. Section 506 of FLPMA makes this clear. Previous 
section 2803.4(e) refers to ``a right-of-way grant that is under its 
terms an easement.'' Therefore, the final rule is more accurate than 
the proposal and is more consistent with the previous regulation. We 
also modified the same sentence by adding that a hearing before an 
administrative law judge would be conducted under 5 U.S.C. 554. This 
citation is set forth in section 506 of FLPMA. Previous section 
2803.4(e) stated that the hearing would be ``pursuant to 43 CFR part 
4'' and the existing regulations at 43 CFR 4.1(a) provide for hearings 
``to be conducted pursuant to 5 U.S.C. 554.'' We made the change to 
make the final regulation more complete than the proposal and more 
consistent with FLPMA and the previous regulation.
    We added a new sentence to paragraph (b), providing that a hearing 
is not required if the grant contained terms for termination on the 
occurrence of a fixed or agreed-upon condition, event, or time. We 
added it to accurately describe the hearing process and to reflect 
longstanding BLM practice. The final language is consistent with 
section 506 of FLPMA which states, ``No administrative proceeding shall 
be required where the right-of-way by its terms provides that it 
terminates on the occurrence of a fixed or agreed-upon condition, 
event, or time.''
    We received no substantive comments on this section.

Section 2807.19 When My Grant Terminates, What Happens To Any 
Facilities on It?

    This section explains that after your grant terminates, you must 
remove any facilities within the right-of-way within a reasonable time, 
as determined by BLM, unless BLM instructs you otherwise in writing, or 
termination is due to non-payment of rent.
    After removing the facilities, you must remediate and restore the 
right-of-way area to a condition satisfactory to BLM, including the 
removal and clean up of any hazardous materials.
    If you do not remove all facilities within a reasonable period as 
determined by BLM, we may declare them to be the property of the United 
States. However, you are still liable for the costs of removing them 
and for remediating and restoring the right-of-way area.
    This section was proposed as section 2807.18. In addition to minor 
editorial changes, we made a number of changes and additions to make 
the rule clearer, including dividing the section into three paragraphs. 
We replaced the terms ``improvements'' and ``structures and 
improvements'' with the term ``facilities'' to make the rule clearer 
and consistent with other provisions in the rule and since ``facility'' 
is defined in section 2801.5 of these regulations.
    We added a clause to the last sentence of paragraph (a) providing 
that you must not remove any facilities or equipment from the right-of-
way area if termination of your grant was due to non-payment of rent. 
This is a requirement of previous section 2803.1-2(h). We added the 
clause to make the section clearer and to provide a cross-reference to 
final section 2806.13(c), where similar language also occurs.
    We modified paragraph (c) to specify that the reasonable period for 
the removal of facilities will be ``as determined by BLM.'' This is the 
same language used in previous section 2803.4-1; we added it to be 
consistent with that section.
    Commenters said that the standard ``any condition satisfactory to 
BLM'' in paragraph (b) is too broad and subject to abuse. The 
commenters said that BLM has not presented evidence to justify 
replacing the current standard of ``restoring the area to a condition 
as near as possible to the original condition.'' They said that if BLM 
keeps the change in the rule, it should not also require the former 
right-of-way holder to pay for

[[Page 21025]]

removal. We disagree. The restoration standard in previous section 
2803.4-1 is ``to a condition satisfactory to the authorized officer'' 
and has been in place since 1980. The standard in the proposed and 
final rule, ``to a condition satisfactory to BLM,'' is essentially 
unchanged from previous regulations.

Section 2807.20 When Must I Amend My Application, Seek an Amendment of 
My Grant, or Obtain a New Grant?

    This section explains that you must amend your application or seek 
an amendment to your grant when there is a proposed substantial 
deviation in location or use. The requirements to amend an application 
or grant are the same as those for a new application, including paying 
processing and monitoring fees and rent according to sections 2804.14, 
2805.16, and 2806.10 of this rule.
    Any activity not authorized by your grant may subject you to 
prosecution under applicable law and to trespass charges under subpart 
2808 of this part.
    You must apply for a new grant if BLM issued your grant before 
October 21, 1976, and there is a proposed substantial deviation in the 
location or use of the right-of-way or its terms and conditions. If BLM 
approves your application, BLM will terminate your old grant and you 
will receive a new grant under 43 U.S.C. 1761 et seq. and the 
regulations in this part. BLM may include the same terms and conditions 
in the new grant as were in the original grant as to annual rent, 
duration, and nature of interest if BLM determines, based on current 
land use plans and other management decisions, that it is in the public 
interest to do so. Alternatively, BLM may keep the old grant in effect 
and issue a new grant for the new use or location or terms and 
conditions.
    This section also explains that section 509(b) of FLPMA requires 
you to apply for a new grant to allow realignment of any railroad and 
appurtenant communication facilities. FLPMA requires BLM to issue a 
decision within 6 months after it receives your complete application. 
BLM may include the same terms and conditions in the new grant as were 
in the original grant as to annual rent, duration, and nature of 
interest, if:
    (A) These terms are in the public interest;
    (B) The lands are of approximately equal value; and
    (C) The lands involved are not within an incorporated community.
    This section was proposed as section 2807.19. We reworded and 
reorganized this section in the final rule to make it clear when BLM 
issues a new grant and when BLM amends an existing grant.
    We added the phrase ``or obtain a new grant'' to the title of the 
section to more accurately reflect the contents of the section.
    We modified proposed paragraph (a) by removing the cross reference 
to section 2808.11(b), which describes the penalties BLM may assess for 
unauthorized use of public land, and replaced this cross-reference with 
final paragraph (c). We also modified this paragraph by moving the last 
sentence to final paragraph (b) and by replacing the phrase ``including 
cost reimbursement according to Sec.  2804.14'' with the phrase 
``including payment of processing and monitoring fees and rent 
according to sections 2804.14, 2805.16, and 2806.10 of this part.'' 
Cost reimbursement includes both processing and monitoring fees. In the 
proposed rule, both fees were in section 2804.14. In the final rule, we 
moved the provisions for monitoring fees to section 2805.16, making it 
necessary to add this citation. It is long-standing BLM practice that 
when an amendment to a grant makes changes in acreage that otherwise 
affect the determination of rent for that grant, BLM collects any 
additional rent that may be calculated as part of the amendment 
process. We added a cross-reference to section 2806.10 to the last 
sentence of final paragraph (b) to provide more complete notice of the 
financial impacts that may be involved in an amendment.
    We also reorganized proposed paragraph (b) (final paragraph (d)) 
and modified it in several respects. The proposed rule mirrored 
previous section 2803.6-1(b) in that it stated that we would issue an 
amended grant for pre-FLPMA grants whose use or location substantially 
changed. We believe both the proposed section 2807.19 and previous 
section 2803.6-1(b) do not accurately reflect FLPMA's intent. Section 
509(a) of FLPMA, in referring to grants issued prior to the enactment 
of FLPMA, says:

    Nothing in this title shall have the effect of terminating any 
right-of-way or right-of-use heretofore issued, granted, or 
permitted. However, with the consent of the holder thereof, the 
Secretary concerned may cancel such a right-of-way or right-of-use 
and in its stead issue a right-of-way pursuant to the provisions of 
this title.

    To more accurately reflect the intent of section 509(a) of FLPMA, 
we revised the regulations to clearly state that a pre-FLPMA grant 
could not be amended, but could rather be replaced with a new FLPMA 
grant. Our proposed rule at section 2807.19(b) suggested this approach. 
The cited section of FLPMA provides authority, with the consent of the 
grant holder, for BLM to cancel the pre-FLPMA grant and in its place 
issue a new grant under FLPMA authority. We also rewrote the opening 
paragraph of section (d) to make it clearer as follows:

    If your grant was issued prior to October 21, 1976, and there is 
a proposed substantial deviation in the location or use or terms and 
conditions of your right-of-way grant, you must apply for a new 
grant consistent with the remainder of this section. BLM may respond 
to your request in one of the following ways.

    This changes makes it clear that BLM requires a new grant when you 
want to change the use, or location, or terms and conditions authorized 
by a grant issued before October 21, 1976.
    We also added a new sentence to final paragraph (d)(1) to specify 
that when a pre-FLPMA grant is replaced by a new FLPMA grant, BLM may 
``include the same terms and conditions in the new grant as were in the 
original grant as to annual rent, duration, and nature of interest if 
BLM determines, based on current land use plans and other management 
decisions, that it is in the public interest to do so.'' This is a 
provision similar to previous section 2803.6-1(b) that we inadvertently 
omitted from the proposed rule and we added it to be more consistent 
with that regulation and existing policy.
    We added a new paragraph (d)(2) to make clear that if the pre-FLPMA 
grant holder does not want to consent to the termination of its pre-
FLPMA grant, the holder may apply for a new grant for the new use, 
location, or terms and conditions. BLM would then process the 
application in the same manner as any other application filed under 
this rule. The new grant, as appropriate, would authorize the new 
location (those lands outside the right-of-way included in the pre-
FLPMA grant), the new use (on lands included in the pre-FLPMA grant 
and/or the new location), or would establish new terms and conditions 
for the existing use on lands included in the pre-FLPMA grant. BLM 
would then authorize the holder's operations under two grants (the pre-
FLPMA grant and the new FLPMA grant).
    We modified proposed section 2807.19(c) (final paragraph 
2807.20(e)) to make clear that you must apply for a new grant to allow 
realignment of any railroad and appurtenant communication facilities. 
Both previous section 2803.6-2 and the proposed rule do not accurately 
reflect the intent of FLPMA to the extent that they imply that an 
existing grant may be amended to allow realignment of a railroad and 
appurtenant communication facilities.

[[Page 21026]]

Section 509(b) of FLPMA states ``When the Secretary concerned issues a 
right-of-way under this title for a railroad and appurtenant 
communication facilities in connection with a realinement of a railroad 
on lands under his jurisdiction by virtue of a right-of-way granted by 
the United States, he may * * * provide in the new right-of-way * * 
*.'' This language requires the issuance of a new grant to allow 
realignment of any railroad and appurtenant communication facilities 
and we modified the final rule accordingly.
    With the exception of editorial changes and those discussed above, 
the rest of this section is the same as proposed section 2807.19.
    Several commenters said that BLM cannot require an amendment to an 
existing grant that already provides for additional appurtenances (the 
rights have already been granted). The commenters also said that to the 
extent that a Federal agency wants to install equipment of any kind 
that is beyond the scope of the original grant issued under subpart 
2809 of these regulations, a Federal agency should seek to amend the 
grant. BLM agrees with these comments. An amendment is required only 
when there is a substantial deviation in location or use. This applies 
whether the applicant or grant holder is a Federal agency or a non-
federal entity. The construction, use, or addition of facilities that 
are already authorized within the scope of an existing grant do not 
require a grant amendment.

Section 2807.21 May I Assign My Grant?

    This section explains that with BLM's approval, you may assign, in 
whole or in part, any right or interest in a grant. In order to assign 
a grant, the proposed assignee must file an application and satisfy the 
same procedures and standards as for a new grant, including paying 
processing fees.
    Assignment applications must also include:
    (A) Documentation that the assignor agrees to the assignment; and
    (B) A signed statement that the proposed assignee agrees to comply 
with and be bound by the terms and conditions of the grant that is 
being assigned and all applicable laws and regulations.
    BLM will not recognize an assignment until it approves it in 
writing. BLM will approve the assignment if doing so is in the public 
interest. BLM may modify or add bonding and other requirements, 
including additional terms and conditions, to the grant when approving 
the assignment. This is consistent with previous section 2803.6-3. BLM 
may decrease rents if the new holder qualifies for an exemption or 
waiver or reduction and the previous holder did not. Similarly, BLM may 
increase rents if the previous holder qualified for an exemption or 
waiver or reduction and the new holder does not. If BLM approves the 
assignment, the benefits and liabilities of the grant apply to the new 
grant holder. The processing times and conditions described at section 
2804.25(c) of this part apply to assignment applications.
    We added the last clause ``including paying processing fees (see 
subpart 2804 of this part)'' to paragraph (b) in the final rule to 
address processing fees in this section and deleted proposed section 
2807.21, which also addressed processing fees. We did this because the 
subject matter of processing fees for assignments should be addressed 
in the section having to do with assignments.
    We modified final paragraph (d) by replacing the last sentence of 
proposed section 2807.20(d) with ``BLM may decrease rents if the new 
holder qualifies for an exemption * * * or waiver or reduction * * * 
and the previous holder did not. Similarly, BLM may increase rents if 
the previous holder qualified for an exemption or waiver or reduction 
and the new holder does not.'' We did this to make clear when rents may 
decrease and when they may increase as the result of an assignment. We 
also added ``If BLM approves the assignment, the benefits and 
liabilities of the grant apply to the new grant holder'' to the final 
paragraph to make clear that any benefits or liabilities of the grant, 
including any modifications or additional terms and conditions 
resulting from our approval of the assignment, would apply to the new 
grant holder.
    With the exception of the changes described above, this final 
section is substantially similar to proposed section 2807.20.
    We received many comments on various aspects of assignments. One 
commenter said that someone could misinterpret the phrase ``in part'' 
in paragraph (a) of the proposed rule to mean that BLM is granting to 
someone other than the grant holder the right to construct a project 
within the boundaries of the original grant. The commenter said that 
this could result in the first holder being adversely affected by the 
installation of the second and said that the rule should make clear 
that BLM will protect the rights of existing facilities. BLM's approval 
of an assignment, either in part or in full, cannot create any new 
rights of construction. An assignment can only transfer rights that 
already exist in a grant. Furthermore, the rule provides that an 
assignment must include documentation that the assignor agrees to the 
assignment and without such documentation, BLM will not approve an 
assignment.
    Several commenters believed that the proposed processing fee was 
too high. One commenter said that all assignments should be designated 
Category I since the grant being assigned would have already been 
processed and all information necessary to process the assignment is 
already in the file. BLM agrees that we can process most routine 
assignment applications in less time than would usually be needed to 
process an application for a new grant. We have consequently 
restructured the processing fee categories (see section 2804.14(b)) to 
create a new category (final Category 1) that requires more than one, 
but eight or fewer hours to process. The $97 fee for this category is 
less than that for the existing fee category for an application for a 
new grant. We disagree that all information necessary to process an 
assignment is already in the file. Every assignment application will 
require new information regarding the assignee's qualifications. It may 
also be necessary to gather new information in order to determine if 
the assignor is in compliance with the terms and conditions of the 
grant, if it is in the public interest to approve the assignment, or if 
it may be appropriate for BLM to modify or add bonding requirements or 
to add additional terms and conditions to the grant. If BLM believes 
that the circumstances involved in an individual assignment application 
will require more than eight hours of processing time, the appropriate 
fee category will be determined according to section 2804.14 of this 
rule. The final rule provides that there will be no processing fee if 
BLM can process your application in one hour or less.
    Several commenters believed that the oil and gas industry should 
not have to pay any processing fees for assignments because the oil and 
gas industry produces revenues in the form of royalties and bonuses and 
therefore pays its own way. Please see the general discussion in this 
preamble for an explanation of why BLM charges processing fees.
    Several commenters said that in order to streamline the process, 
the final rule should allow BLM to process multi-assignment requests 
all at one time and that BLM should charge the assignor for the actual 
time it takes to process the assignments. BLM agrees that when multiple 
grants are to be assigned to the

[[Page 21027]]

same assignee, processing a single mass assignment is usually more 
efficient than processing the assignment of each grant separately. The 
final rule does not require an individual application for each grant 
that is to be assigned. An applicant may include as many grants in a 
single application as is desired. BLM will determine the processing fee 
category based on the estimated number of hours that we will need to 
process the application.
    Several commenters opposed any blanket condition of approval that 
would allow for changing the terms of the grant. The commenters said 
the provision would make it very difficult to assign a right-of-way 
where the assignee would have no idea what BLM may change or add to it. 
Section 505 of FLPMA provides in part that:

    Each right-of-way shall contain (a) terms and conditions which 
will * * * (iii) require compliance with applicable air and water 
quality standards established by or pursuant to applicable Federal 
or State law; and (iv) require compliance with State standards for 
public health and safety, environmental protection, and siting, 
construction, operation, and maintenance of or for rights-of-way for 
similar purposes if those standards are more stringent than 
applicable Federal standards;

    To implement this and other requirements of section 505, the FLPMA 
right-of-way regulations have contained the following provision 
(previous section 2801.2(a)(1)) since 1980:

    An applicant by accepting a right-of-way grant, temporary use 
permit, assignment, amendment or renewal agrees and consents to 
comply with and be bound by the following terms and conditions, 
excepting those which the Secretary may waive in a particular case: 
(1) To the extent practicable, all State and Federal laws applicable 
to the authorized use and such additional State and Federal laws, 
along with the implementing regulations, that may be enacted and 
issued during the term of the grant or permit.

    Final section 2805.12 is consistent with previous section 
2801.2(a)(1).
    BLM believes that it is appropriate to review a grant's terms and 
conditions when it is being assigned to determine if the terms and 
conditions are consistent with applicable laws and regulations then in 
effect and to modify the grant, including additional terms and 
conditions, if needed, to make the grant consistent with applicable 
laws and regulations. The grant holder is responsible for complying 
with applicable laws and regulations whether or not the terms and 
conditions of the grant are currently consistent with those laws and 
regulations. We believe that it is desirable for both parties, however, 
that the terms and conditions of a grant reflect current legal and 
regulatory requirements as accurately as possible. We anticipate that 
grant modifications incorporated as part of the approval of an 
assignment application will be uncommon, but that when they are made, 
will be made judiciously and for good reason. You may appeal any 
decision requiring such a grant modification under section 2801.10 of 
the final rule.
    Several commenters said that there should be no requirement to 
submit a new application for an assignment because the substance of the 
grant will not change. BLM disagrees. Whenever a grant holder proposes 
to transfer some or all of the rights contained in the grant to another 
party, BLM must determine, among other things:
    (A) If the proposed assignee is qualified to hold the grant under 
applicable provisions of law and the regulations in subpart 2803;
    (B) Whether the proposed assignee may be exempt from rent or 
eligible for a waiver or reduced rent;
    (C) If it is in the public interest to approve the assignment; and
    (D) If it may be appropriate to modify or add bonding or other 
requirements.
    BLM believes that the most efficient way to obtain the information 
it needs to make these determinations and to meet its responsibilities 
under applicable law and regulations is through the filing of an 
application for assignment.

Section 2807.22 How Do I Renew My Grant?

    This section explains that if your grant specifies that it is 
renewable and you choose to renew it, you must apply to BLM to renew 
the grant at least 120 calendar days before your grant expires. BLM 
will renew the grant if you are complying with the terms, conditions, 
and stipulations of the grant and applicable laws and regulations.
    If your grant does not address whether it is renewable, you may 
apply to BLM to renew the grant. You must send BLM your application at 
least 120 calendar days before your grant expires. In your application 
you must show that you are complying with the terms, conditions, and 
stipulations of the grant and applicable laws and regulations. BLM has 
the discretion to renew the grant if doing so is in the public 
interest.
    You must submit your application in the manner stated in paragraph 
(a) or (b) of this section and include the same information necessary 
for a new application. You must reimburse BLM in advance for the 
administrative costs of processing the renewal in accordance with 
section 2804.14 of this part. BLM will review your application and 
determine the applicable terms and conditions of any renewed grant.
    BLM will not renew grants issued before October 21, 1976. Section 
510(a) of FLPMA supports this practice. If you hold such a grant and 
would like to continue to use the right-of-way beyond your grant's 
expiration date, you must apply to BLM for a new FLPMA grant (see 
subpart 2804 of this part). You must send BLM your application at least 
120 days before your grant expires. If BLM denies your application, you 
may appeal the decision under section 2801.10 of this part.
    We made several changes to the final rule to make it clearer and 
more complete. We modified paragraph (a), which discusses grants that 
specify that they are renewable, to state that you must apply to BLM at 
least 120 calendar days before your grant expires if you choose to 
renew it. The proposed rule specified that an application for renewal 
was required (see proposed section 2807.22(c)), but did not state when 
the application should be filed for such grants. Since a grant cannot 
be renewed after it has expired, it is important that BLM receive the 
renewal application in sufficient time to enable us to complete our 
review process prior to grant expiration. The final rule sets the same 
120 calendar day requirement for all grants.
    We reworded paragraph (b) to remove unnecessary language and to 
make clear that a request for renewal must be in the form of an 
application.
    We added a new paragraph (e) to the final rule stating that grants 
issued before October 21, 1976, under authorities FLPMA repealed will 
not be renewed under those authorities and that if the holder of such a 
grant wishes to continue using the right-of-way beyond the grant's 
expiration date, the holder will need to apply for a new FLPMA grant. 
We added this language to improve the completeness of the section and 
to reflect long-standing BLM practice.
    We also added a new paragraph (f) to inform you that if BLM denies 
your renewal application, you may appeal the decision to IBLA under 
section 2801.10 of this part. We added this paragraph to give you 
additional notice of your appeal rights, especially since previous 
section 2803.6-5(e) states that decisions denying renewals of grants 
that do not contain a provision for renewal are final with no right of 
review or appeal.
    Several commenters said that there should be no charge for renewing 
an existing grant. They said this was particularly appropriate for 
right-of-way

[[Page 21028]]

grant renewals that are categorically excluded from the National 
Environmental Policy Act compliance process. We disagree. BLM charges 
processing fees to everyone who files a renewal application, except 
those specifically exempted by law or regulation. Please see the 
discussion above addressing our authority to recover processing costs.
    Several commenters said that the fee for grant renewal should be an 
administrative fee based on the time and cost it takes to renew the 
grant and not be based on the fee category and information used in 
processing the original grant. Some commenters said that the 
administrative costs of processing such right-of-way renewals should be 
minimal, and the costs of seeking cost recovery could outweigh the 
reasonable costs of processing. Many commenters also said that the 
administrative requirements for a renewal would likely be minimal and 
would not justify charging a grantee the same fees associated with a 
new grant request. Several commenters said that the review time for 
renewals should be minimal since a renewal does not require the same 
paperwork and review that an application for a new right-of-way would. 
One commenter said that the regulations should provide sufficient 
flexibility to charge fees based on the most applicable fee structure 
to the project. The commenter said that fees could be:
    (A) Based on the amount of time it takes to process the renewal;
    (B) Derived from the cost of staff time used to establish the 
processing fee for the original application; or
    (C) Based on an ``as-they-are-processed'' method.
    BLM agrees that we can process most routine renewal applications in 
less time than would usually be needed to process an application for a 
new grant. We have consequently restructured the processing fee 
categories (see section 2804.14(b)) to create a new category (Category 
1) for assignments and renewals that require more than one, but eight 
or fewer hours to process. If BLM believes that the circumstances 
involved with an individual renewal application will require more than 
eight hours of processing time, we will determine the appropriate fee 
category according to section 2804.14 of this rule. Please see the 
discussion on processing fee categories in the discussion of section 
2807.21 for more discussion of this matter.
    Several commenters said that BLM should not require grant holders 
to submit a formal application for a grant renewal if they do not 
propose to modify their existing grant and that a simple notice or 
letter of request should suffice. Several commenters also said that 
they did not see a need to submit the same information in a grant 
renewal application as they initially submitted for the grant. We 
disagree. In renewing a grant, BLM is responsible for complying with 
section 501(b)(1) of FLPMA which states that:

    The Secretary concerned shall require, prior to granting, 
issuing, or renewing a right-of-way, that the applicant submit and 
disclose those plans, contracts, agreements, or other information 
reasonably related to the use, or intended use, of the right-of-way, 
including its effect on competition, which he deems necessary to a 
determination, in accordance with the provisions of this Act, as to 
whether a right-of-way shall be granted, issued, or renewed and the 
terms and conditions which should be included in the right-of-way.

    Statutes such as the National Environmental Policy Act also require 
BLM to assess the impacts of uses of the public lands before 
authorizing or allowing such uses, including authorizing the 
continuation of an existing use. BLM believes that the most efficient 
way to obtain the information it needs to enable it to meet its 
obligations under such statutes is through the filing of an application 
using Standard Form 299. If the authorized facility has already been 
constructed, the information you must include in the renewal 
application is only that which is relevant to the continuing operation, 
maintenance, and termination of the facility. If any of the information 
required on Standard Form 299 was provided in the original grant 
application and there has been no change, a statement to that effect 
will generally suffice.
    Several commenters said that BLM should not change the terms and 
conditions of the existing grant for the renewed grant. One commenter 
said the renewals should include only the minimal administrative 
exercise of ensuring that a grant holder has upheld the terms of the 
grant. BLM is responsible for assuring that the right-of-way 
authorizations it approves are in compliance with applicable statutes 
and regulations in effect at the time the authorization is approved. 
This applies to renewals since a renewal creates a right to use public 
land that would not exist if the BLM does not approve the renewal. In 
order to meet this responsibility, BLM needs to:
    (A) Review the circumstances of an expiring grant beyond the 
holder's compliance with the terms of the grant; and
    (B) Add or modify terms and conditions in order to bring the 
renewed grant into compliance with current regulations and statutes.
    Therefore, we have not adopted the commenters' suggestions.
    One commenter said that the final rule should eliminate annual 
renewals in favor of 5-year renewals or renewals for the original term 
of the grant. Neither the proposed nor final rule contains a provision 
or requirement for annual renewals. In your renewal application you may 
request the renewal term you prefer. BLM determines the term of the 
renewed grant and will do so in the same manner as the term for new 
grants (see section 2805.11(b)).

Subpart 2808--Trespass

    This subpart contains regulations having to do with trespass on 
public lands. It explains:
    (A) What trespass is, including distinguishing between willful and 
non-willful trespass;
    (B) What actions BLM will take if it determines you are in 
trespass; and
    (C) The limitations for receiving a new grant if you are or have 
been in trespass.

Section 2808.10 What Is Trespass?

    This section explains that trespass is using, occupying, or 
developing the public lands or their resources without a required 
authorization or in a way that is beyond the scope and terms and 
conditions of your authorization. Trespass is a prohibited act. The 
final language is slightly different from that in proposed section 
2808.10(a). We replaced ``and specific limitations of your 
authorization'' with ``and terms and conditions of your 
authorization.'' The new language more accurately and clearly describes 
trespass.
    This section also explains that trespass includes acts or omissions 
causing undue or unnecessary degradation to the public lands or their 
resources. In determining if such degradation is occurring, BLM may 
consider the effects of the activity on resources and land uses outside 
the area of the activity. This sentence is new to this section in the 
final rule, but is consistent with the previous regulation's definition 
of ``unnecessary or undue degradation'' (see previous section 2800.0-
5(x)).
    The section also explains that there are two kinds of trespass, 
willful and non-willful.
    (A) ``Willful trespass'' is voluntary or conscious trespass and 
includes trespass committed with criminal or malicious intent. It 
includes a consistent pattern of

[[Page 21029]]

actions taken with knowledge, even if those actions are taken in the 
belief that the conduct is reasonable or legal.
    (B) ``Non-willful trespass'' is trespass committed by mistake or 
inadvertence.
    With the exception of editorial changes and the change mentioned 
above, this section remains as proposed.
    Several commenters said that the final rule should follow the 
common definition of trespass, which requires notice and knowledge and 
then a willful and knowing act. Commenters also said that trespass, by 
definition, cannot be by accident. Commenters said, ``Trespass laws 
require entering or remaining on the property of another knowing that 
consent to remain or enter is denied.''
    We disagree with the commenters. The meaning of the term 
``trespass'' is broader than commenters assert (see Black's Law 
Dictionary and Webster's New University Dictionary). BLM's definition 
of trespass in these and previous regulations is based on section 
303(g) of FLPMA (43 U.S.C. 1733) which states:

    The use, occupancy, or development of any portion of the public 
lands contrary to any regulation of the Secretary or other 
responsible authority, or contrary to any order issued pursuant to 
any such regulation, is unlawful and prohibited.

    Several commenters said in the final rule we should replace 
``unnecessary or undue degradation'' with ``damage.'' The final rule 
continues to use the term ``unnecessary or undue degradation.'' The use 
of the term is consistent with both previous section 2800.0-5(u)), 
proposed section 2808.10(a), and with FLPMA's mandate that BLM ``take 
any action necessary to prevent unnecessary or undue degradation of the 
lands'' (see section 302(b)).
    Other commenters said that the proposed rule is too subjective and 
open-ended. We disagree. The key to trespass is set forth in the terms 
and conditions of the right-of-way grant, which each holder will 
receive in writing from BLM. If there exists a question whether the 
proposed activity goes beyond the scope of the grant, a holder should 
consult BLM in advance to determine if a grant amendment is necessary.

Section 2808.11 What Will BLM Do if It Determines That I Am in 
Trespass?

    If BLM determines you are in trespass, we will notify you in 
writing of the trespass and explain your liability. Your liability 
includes:
    (A) Reimbursing the United States for all costs incurred in 
investigating and terminating the trespass;
    (B) Paying rental for the lands, as provided for in subpart 2806 of 
this part, for the current and past years of trespass, or, where 
applicable, the cumulative value of the current use fee, amortization 
fee, and maintenance fee for unauthorized use of any BLM-administered 
road; and
    (C) Rehabilitating and restoring any damaged lands or resources. If 
you do not rehabilitate and restore the lands and resources within the 
time BLM provides in the notice, you will be liable for the costs the 
United States incurs in rehabilitating and restoring the lands and 
resources.
    This section explains that in addition to amounts you owe under 
paragraph (a) of this section, BLM may assess penalties as follows:
    (A) For willful or repeated non-willful trespass, the penalty is 
two times the rent. For roads, the penalty is two times the charges for 
road use, amortization, and maintenance, which have accrued since the 
trespass began;
    (B) For non-willful trespass not resolved within 30 calendar days 
after receiving the written notice under paragraph (a) of this section, 
the penalty is an amount equal to the rent. To resolve the trespass you 
must meet one of the conditions identified in 43 CFR 9239.7-1. For 
roads, the penalty is an amount equal to the charges for road use, 
amortization, and maintenance, which have accrued since the trespass 
began; and
    (C) The penalty will not be less than the fee for a Processing 
Category 2 application for non-willful trespass or less than three 
times this value for willful or repeated non-willful trespass. You must 
pay whichever is the higher of the:
    (1) Amount computed in paragraph (b) of this section; or
    (2) The minimum penalty amount. We amended this section of the rule 
to make clearer what the amount of the penalty would be. The language 
change does not change the intent of the proposed rule.
    In addition to civil penalties under paragraph (b) of this section, 
you may be tried before a United States magistrate and fined no more 
than $1,000 or imprisoned for no more than 12 months, or both, for a 
knowing and willful trespass, as provided at 43 CFR 9262.1 and 43 
U.S.C. 1733(a).
    Until you comply with the requirements of 43 CFR 9239.7-1, BLM will 
not process any of your applications for any activities on BLM lands. 
We amended this section of the final regulations to be consistent with 
existing regulatory authority in 43 CFR 9239.7-1.
    This section also explains that you may appeal a trespass decision 
under section 2801.10 of this part and that nothing in this section 
limits your liability under any other Federal or state law.
    Several commenters said that as stewards of the land, it is BLM's 
job to manage the public land, and therefore, there should be no cost 
to the grantee for investigations of trespass. We disagree with the 
commenters. Existing 43 CFR 9239.7-1 requires a trespasser to pay 
``costs, damages and penalties'' for a trespass against the United 
States. These final rules are consistent with that provision of 
existing regulations.
    Several commenters said that since land ownership lines are not 
always clear, it seems unfair to require a penalty for trespass without 
giving the permit holder an opportunity to correct the problem. The 
commenters said that the expense of surveying Federal land in the 
vicinity of their facilities would be very expensive and in most cases 
completely unnecessary. The commenters suggested that BLM modify the 
section to state that when an ``encroachment'' is identified, the 
encroacher will pursue reasonable efforts to correct the 
``encroachment'' to BLM's satisfaction. The commenters said that if 
after a reasonable period of time the ``encroachment'' is not removed 
and/or resolved, only then should BLM impose a trespass penalty. We did 
not amend the final regulations as suggested by the commenters. 
However, in many circumstances where BLM determines a party is in 
trespass, we will allow a period of time to correct the trespass 
violation before initiating formal trespass proceedings. BLM must 
maintain the flexibility to immediately begin trespass proceedings for 
those situations where we need to immediately curtail activities that 
may cause damage to the public lands or health and safety.

Section 2808.12 May I Receive a Grant if I Am or Have Been in Trespass?

    This section explains that until you satisfy liability for a 
trespass, BLM will not process any applications you have pending for 
any activity on BLM-administered lands. A history of trespass will not 
necessarily disqualify you from receiving a grant. In order to correct 
a trespass, you must apply under the procedures described at subpart 
2804. BLM will process your application as if it were a new use. Prior 
unauthorized use does not create a preference for receiving a grant.
    We substantially revised this section. In addition to wording 
changes, we moved proposed section 2808.11(e) to this section. We also 
added the phrase ``or have been'' to the section title. We did this to 
provide a more accurate

[[Page 21030]]

description of the contents of the final section, since unsatisfied 
trespass liability may include liability incurred as the result of 
prior trespass actions, even if those actions are no longer occurring. 
We also added language stating that a history of trespass will not 
necessarily disqualify you from receiving a grant and that prior 
unauthorized use does not create a preference for receiving a grant. 
These provisions reflect long-standing BLM practice and policy. We 
added them to provide a more complete description of how we deal with 
applications filed by parties with a history of trespass.
    Several commenters said that proposed section 2808.11(e) (now in 
final section 2808.12) is arbitrary and capricious, since under this 
rule, if there is a trespass dispute under appeal, BLM would not 
process other applications. This rule is not arbitrary and capricious. 
As stated above, it is consistent with current practice and with 
regulations that were subject to the Administrative Procedure Act's 
notice and comment rulemaking. Moreover, 43 CFR 9239.7-1(b) and (c) 
provides for filing a bond as one means of satisfying trespass 
liability. Payment of trespass liability under protest during the 
pendency of an appeal is another means of resolving commenters' 
concerns.
    One commenter said that proposed section 2808.12 was unclear as to 
whether it refers to trespass on other lands or other grants. We agree 
that the proposed section was not as clear or complete as it could have 
been and believe that the changes made in the final rule, as described 
above, make it clear that BLM will not process any applications you 
have pending for any activity on BLM-administered land if you have an 
unsatisfied trespass liability. This includes pending applications for 
activities other than those involved in the trespass and located on 
lands other than those where the trespass occurred.

Subpart 2809--Grants for Federal Agencies

    This subpart:
    (A) Gives information about grants that BLM issues to other Federal 
agencies;
    (B) Explains that these regulations apply to Federal agencies and 
describes limitations; and
    (C) States that Federal agencies are generally not required to pay 
rent for a right-of-way grant.
    The final rule changes the way BLM deals with right-of-way grants 
we issue to other Federal agencies. Under previous regulations in 
subpart 2807 we issued right-of-way ``reservations'' to Federal 
agencies rather than right-of-way grants. In those regulations, right-
of-way reservations contained different terms and conditions than 
right-of-way grants that we issued to individuals, associations, 
partnerships, and corporations. Under this final rule, BLM will issue 
to Federal agencies a right-of-way grant on BLM Form 2800-14 Right-of-
Way Grant/Temporary Use Permit for right-of-way uses on public land. 
This grant will contain the same terms and conditions as the grants BLM 
issues to any other party, unless circumstances warrant different terms 
(see section 2805.12 for terms and conditions contained in right-of-way 
grants). BLM does not typically require bonding from Federal agencies. 
However, this section continues to allow BLM the discretion to require 
it.
    This subpart is different from that which we proposed. We deleted 
proposed section 2809.10 because we state in final section 2809.10 that 
these regulations apply to Federal agencies to the extent possible; it 
is therefore redundant to say that a Federal agency must apply for a 
grant. We deleted proposed section 2809.11, since the provisions in 
that proposed rule are all covered elsewhere in the regulations (see 
for example final section 2805.12). Proposed section 2809.12 is covered 
in final section 2809.10.

Section 2809.10 Do the Regulations in This Part Apply to Federal 
Agencies?

    This section explains that the regulations in this part apply to 
Federal agencies to the extent possible. However, BLM may suspend or 
terminate a Federal agency's grant only if the terms and conditions of 
the Federal agency's grant allow it or the agency head holding the 
grant consents to it. This section also explains that under these 
regulations Federal agencies are generally not required to pay rent for 
a grant (see section 2806.14).
    Several commenters said that the final regulations should make 
clear that none of the provisions outside of subpart 2804 apply to 
Federal agencies. We disagree. Section 507(a) of FLPMA (43 U.S.C. 1767) 
states that the Secretary ``may provide under applicable provisions of 
this title for the use of any department or agency of the United States 
a right-of-way over, upon, under or through the land administered by 
him, subject to such terms and conditions as he may impose.'' Clearly, 
other sections of Title V of FLPMA and other sections of this rule 
apply to grants we issue to other Federal agencies. For example, BLM 
can add terms and conditions (see section 505 of FLPMA and subpart 2805 
of this rule) to a grant issued to another Federal agency appropriate 
to site-specific conditions.
    Other commenters said that the final rule should make clear which 
provisions do apply to Federal agencies. All provisions of the final 
rule apply to grants we issue to other Federal agencies to the extent 
possible. BLM did not change the final rule as a result of this 
comment.
    Several commenters said that BLM does not have the authority to 
charge Federal agencies rents (fair market value) for rights-of-way 
granted to them. The commenters stated that FLPMA does not give BLM the 
authority to charge rent because FLPMA does not include Federal 
agencies in the definition of ``holder'' at 43 U.S.C. 1702(b). The 
commenters also stated that by charging other Federal agencies rent, 
BLM is acting outside the scope of its authority. For the same reason, 
the commenters stated that BLM could not impose on Federal agencies 
requirements for liability, bonding, or allow BLM to release third 
parties from liability for environmental damages.
    Under this final rule (at section 2806.14(b)(1)), a Federal agency 
does not have to pay rent for its use of a right-of-way unless it is 
using the facility, system, space, or any part of the right-of-way for 
a commercial purpose. We believe that we have the authority to require 
other Federal agencies to pay rent for their rights-of-way. The 
commenters base their argument on the use of the term ``holder'' in 
section 504(g) of FLPMA (43 U.S.C. 1764(g)), but overlook the provision 
of that section authorizing the Secretary to issue rights-of-way to 
Federal agencies ``for such lesser charge, including free use,'' as the 
Secretary finds equitable and in the public interest. This provision 
authorizing reduced rent, or no rent at all, would be unnecessary if 
the Secretary lacked authority to charge Federal agencies rent.
    Section 507 of FLPMA (43 U.S.C. 1767) provides that the Secretary 
may issue rights-of-way to any U.S. department or agency, subject to 
``such terms and conditions as he may impose.'' Charging other Federal 
agencies rent in appropriate circumstances is one such applicable term. 
The broad language of section 507 contradicts commenter's statements.

Part 2880--Rights-of-Way Under the Mineral Leasing Act

    We received many comments on the proposed rule that addressed 
issues in both the part 2800 and part 2880 regulations. So as not to be 
redundant, we addressed the comments only in the

[[Page 21031]]

section they pertained to in the part 2800 regulations. In the 
following discussion of the part 2880 regulations, if a comment on the 
part 2800 regulations also pertains to a section in the 2880s, instead 
of repeating the discussion again here, we provide a cross-reference to 
the appropriate section in the part 2800 preamble discussion.

General Comments

    Several commenters said it was inappropriate and a ``conflict of 
due process' to include rules addressing the appeal process and oil and 
gas at a later date. We disagree. Nothing precludes a Federal agency 
from promulgating rules covering different areas of the same program as 
long as the public has notice of any regulatory changes and the 
opportunity to comment. Notice and comment on a rule is due process.
    Several commenters believe that the rule mixes many disparate 
industries in the requirements for a right-of-way. They said that oil 
and gas operations are significantly different from interstate 
transmission lines, communication equipment, or other industries, and 
therefore provisions relating to them should be taken out of the rule. 
BLM disagrees with this comment and believes that there is no 
significant difference in the process to analyze a right-of-way 
application regardless of the industry involved. In this respect, oil 
and gas pipelines are not so dissimilar to water pipelines, roads, or 
other linear surface-disturbing facilities that right-of-way grants 
authorize. In addition, any special character belonging to oil and gas 
operations is accommodated by our treatment of them in part 2880, 
distinct from the part 2800 rights-of-way authorized by FLPMA.
    Several commenters said that the rule is another financial 
disincentive for oil and gas development on public lands. We disagree. 
With the exception of major transmission pipelines, nearly all feeder 
pipeline and trunk pipeline right-of-way applications fall in 
Processing Categories 1 through 4 of the rule. These processing fees 
range from $97 to $923. The minor fee increase this rule implements is 
insignificant compared to the overall cost of constructing an oil and 
gas pipeline. In addition, the oil and gas industry has been paying 
cost reimbursement for grant applications since the previous 
regulations became effective in 1987.
    Several commenters said that the differences between MLA and FLPMA 
regulations are confusing to BLM and the oil and gas industry. The 
commenters asked that the final rule spell out any distinction between 
the MLA right-of-way regulations and the FLPMA right-of-way 
regulations. Please see the table in the general discussion in this 
preamble that explains some of the significant differences and 
similarities between FLPMA and MLA grants.

Subpart 2881--General Information

    This subpart contains general information that pertains to right-
of-way grants that BLM issues under the Mineral Leasing Act (MLA). It 
contains policy, procedure, and acronyms and definitions that apply to 
the part 2880 regulations.

Section 2881.2 What Is the Objective of BLM's Right-of-Way Program?

    This section is new to the final rule and explains it is BLM's 
objective to grant rights-of-way to any qualified individual, business, 
or government entity, and to direct and control the use of rights-of-
way on public lands in a manner that:
    (A) Protects the natural resources;
    (B) Prevents unnecessary or undue degradation to public lands;
    (C) Promotes the use of rights-of-way in common; and
    (D) Coordinates, to the fullest extent possible, all BLM actions 
under the regulations with state and local governments, interested 
individuals, and appropriate quasi-public entities.
    We added this section to the final rule to provide overall guidance 
for BLM's MLA right-of-way program. It is consistent with 30 U.S.C. 185 
and existing policy.

Section 2881.5 What Acronyms and Terms Are Used in These Regulations?

    This section contains the acronyms and defines terms used in part 
2880. Unless an acronym or term is listed in this section, the acronyms 
and terms in part 2800 of this title apply to this part. Paragraph (a) 
is new to the final rule and contains acronyms that are frequently used 
in this part of the final rule.
    Paragraph (b) of this section defines the terms used in this part 
of the rule.
    We deleted the definition of the term ``agency head'' from the 
final rule because the term is only used once in final section 2886.11. 
That section describes an agency head as the head of an agency having 
administrative jurisdiction over the Federal lands involved in an 
application.
    In the final rule we amended the definition of ``casual use'' to 
mean ``activities ordinarily resulting in no or negligible disturbance 
of the public lands, resources, or improvements.'' We also replaced the 
proposed example with ``Surveying, marking routes, and collecting data 
to use to prepare applications for grants or TUPs.'' We believe the 
final rule's definition of ``casual use'' is a more accurate and useful 
description because it recognizes that casual use may cause little or 
no disturbance and because it gives examples that are more useful than 
those provided in the proposed definition.
    In the final rule we amended the definition of ``facility'' by 
removing the reference to communication site rights-of-way or uses, 
since the only communication site uses authorized under the Mineral 
Leasing Act are for internal operations of the pipeline. BLM authorizes 
these internal communication uses as part of the MLA linear right-of-
way grant and not a communication use lease that would allow the holder 
to sublease space for commercial purposes.
    In the final rule we amended the definition of ``Federal lands'' to 
mean all lands owned by the United States, except lands:
    (A) In the National Park System;
    (B) Held in trust for an Indian or Indian tribe; or
    (C) On the Outer Continental Shelf.
    The proposed rule excepted lands administered by the Tennessee 
Valley Authority (TVA) from the definition, which is incorrect. TVA 
lands are acquired lands and are owned by the United States. For the 
purposes of these regulations TVA lands are considered Federal lands. 
We deleted the phrase ``whether surface or mineral estate or both'' to 
make the definition consistent with 30 U.S.C. 185(b)(1). We also 
deleted the phrase ``without reference to how the lands were acquired'' 
because the phrase is unnecessary and does not add to the definition.
    BLM deleted the proposed definition of, and use of the term, 
``field examination'' from the final rule. For all categories of 
applications, labor costs are by far the largest portion of the costs 
of processing an application. Costs associated with environmental 
analysis and other application processing steps are predominately labor 
and time related. While a portion of labor costs are reflected in the 
amount of time it takes to do field examinations for an application, a 
significant amount of time is also spent coordinating with staff, the 
applicant, and other involved parties, drafting documents, and keeping 
case file records current. It is more accurate to base a processing fee 
on the total estimated number of hours it will take for involved staff 
to process an application, than to count the number of field 
examinations needed to process

[[Page 21032]]

the application. For the same reasons, we eliminated the definition of 
``field examination'' from section 2801.5 of this part.
    We added a definition of ``grant'' to this part because the 
definition of the term in final section 2801.5 is for authorizations 
BLM issues under Title V of FLPMA or a previous right-of-way authority, 
and the grant definition in this part of the rule is for authorizations 
BLM issues under the Mineral Leasing Act (30 U.S.C. 185). The final 
definition is consistent with previous section 2880.0-5(n).
    In the final rule we added a definition of ``monitoring'' to this 
part that is the same as in section 2801.5 of the FLPMA right-of-way 
regulations. We added the definition to this part since ``monitoring'' 
is defined in terms of grants and ``grant'' is defined differently in 
the two parts.
    We made edits to the definition of ``production facilities'' that 
do not change the meaning of the term, but make the definition more 
clear. We replaced the proposed definition's phrasing ``on the 
leasehold'' with ``on its Federal oil and gas lease.''
    We added a definition of ``right-of-way'' to this part of the final 
rule because the definition of right-of-way in section 2801.5 is 
legally inaccurate for this part. The proposed and final definitions 
for part 2800 refer to ``public lands.'' This final definition uses 
``Federal lands'' instead. This is an important distinction because 
BLM's authority to issue grants under the MLA applies not just to 
public lands, but to all Federal lands if the right-of-way crosses 
lands under two or more agencies' jurisdiction, even those lands 
managed by departments other than the Department of the Interior.
    We made edits to the definition of the term ``related facilities.'' 
We removed the proposed definition's use of the phrase ``and which are 
authorized under the Act'' because it is unnecessary to the meaning of 
the term. We would not consider facilities to be related unless they 
were authorized under the Act. Therefore the wording was surplus.
    We added a definition of the term ``substantial deviation'' to this 
section of the final rule. We use the term in two sections of this 
final rule and we define it here to indicate a change, in location or 
use, from the terms of a grant or TUP under the MLA.
    In the final rule we amended the definition of ``Temporary Use 
Permit (TUP)'' to mean ``a revocable, nonpossessory privilege to use 
specified Federal lands in the vicinity of and in connection with a 
right-of-way to construct, operate, maintain, or terminate a pipeline 
or to protect the environment or public safety. A TUP does not convey 
any interest in land.'' We made editorial changes to this definition 
and added a sentence stating that TUPs do not convey an interest in 
land. We added this sentence to better explain the nature of a TUP, as 
set forth in previous section 2881.1-2.
    In the final rule we added the definition of ``third party'' to 
mean any person or entity other than BLM, an applicant, or a right-of-
way grant holder. Third party is used several times in these 
regulations, but it was not defined, so we included a definition here.

Section 2881.7 Scope

    We combined proposed section 2881.8 with this section and reworded 
it slightly. This section explains that the regulations in this part 
apply to:
    (A) Issuing grants and TUPs, and to administering, amending, 
assigning, renewing, and terminating grants and TUPs for oil and gas 
pipelines. We replaced the phrase ``oil, natural gas, synthetic liquid 
or gaseous fuels, or any refined product produced from these 
materials'' with the phrase ``oil and gas'' because the definition of 
oil or gas includes those products;
    (B) All grants and TUPs BLM and its predecessors previously issued 
under the Mineral Leasing Act. In the final rule we deleted the phrase 
``and to those [grants or permits] issued by the Secretary of the 
Interior or his delegate in connection with the Trans-Alaska Oil 
Pipeline System [TAPS],'' because it is inaccurate. Under these 
regulations the term ``grant'' means an authorization issued under 30 
U.S.C. 185. TAPS authorizations are issued under 43 U.S.C. 1652(b), not 
30 U.S.C. 185. As a result of this change, we added a new paragraph (c) 
to this section (see the explanation below); and
    (C) Pipeline systems, or parts thereof, on a Federal oil and gas 
lease owned by:
    (1) A party who is not the lessee or lease operator; or
    (2) The lessee or lease operator that are downstream from a custody 
transfer metering device. We reworded this paragraph in the final rule 
and removed the phrase ``from storage tanks or a'' and replaced it with 
``a custody transfer'' because the statement as proposed was incorrect. 
There are situations where a lessee may install a series of oil storage 
tanks which are authorized by the terms of the lease. Pipelines located 
on-lease that are associated with these tanks, either upstream or 
downstream of the tank, can also be authorized by the terms of the 
lease and do not need a right-of-way grant. It is at the point on a 
lease where the oil or gas is metered and sold to a third party 
pipeline carrier that a right-of-way grant is required. This is because 
after the point of sale, the third party is responsible for 
transporting the product downstream. The third party would need a 
right-of-way for any Federal lands crossed downstream from the custody 
point. A right-of-way grant is also needed for any oil or gas pipeline 
located off the lease, regardless of ownership.
    We proposed paragraph (b) of this section as section 2881.8. We 
added this paragraph to this section to make the rule more readable. 
This paragraph explains that these regulations do not apply to:
    (A) Production facilities on an oil and gas lease which operate for 
the benefit of the lease. The lease authorizes these production 
facilities. We reworded this paragraph to make it clear that any 
production related facilities which operate for the benefit of the 
lease do not need a right-of-way;
    (B) Pipelines on Federal lands under the jurisdiction of a single 
Federal department or agency, including bureaus and agencies within the 
Department of the Interior, other than BLM. We made minor changes to 
this paragraph in the final rule, but did not change the meaning from 
the proposed rule;
    (C) Authorizations BLM issues to Federal agencies for oil or gas 
transportation. We deleted the phrase that was in the proposed rule 
``Such grants are subject to the regulations at part 2800 of this 
chapter'' and substituted for it a reference to section 2801.6; or
    (D) Authorizations issued under the authority of the Federal Land 
Policy and Management Act of 1976 (see part 2800 of this chapter).
    We added a new paragraph (c) to this section to explain that 
notwithstanding the definition of ``grant'' in section 2881.5 of this 
subpart, the regulations in this part apply, consistent with 43 U.S.C. 
1652(c), to any authorization issued by the Secretary of the Interior 
or his or her delegate under 43 U.S.C. 1652(b) for the Trans-Alaska Oil 
Pipeline System. We made this change to the final rule to be consistent 
with the statute. The terms of 43 U.S.C. 1652(c) expressly except 
certain provisions of 30 U.S.C. 185 from a TAPS authorization. Chief 
among these exceptions is a holder's liability for damages, which is 
addressed by TAPS at 43 U.S.C. 1653. In determining whether the 
regulations in part 2880 can be applied to a TAPS authorization 
``consistent with 43 U.S.C. 1652(c),'' a careful reading of 43 U.S.C. 
1652-1653 will be required.

[[Page 21033]]

Section 2881.8 Information Collection Matters

    We deleted this section from the final rule because it is not 
necessary to publish this information in the text of the regulations.
    These regulations contain information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.), we submitted a copy of the proposed information collection 
requirements to the Office of Management and Budget (OMB) for review. 
OMB approved the information collection requirements under Control 
Number 1004-0189, which expires October 31, 2005.

Section 2881.9 Severability

    This section was proposed as section 2881.10, and explains that if 
a court holds any provisions of these rules or their applicability to 
any person or circumstances invalid, the remainder of these rules and 
their applicability to other people or circumstances will not be 
affected. With the exception of editorial changes, this section remains 
as proposed.

Section 2881.10 How Do I Appeal a BLM Decision Issued Under the 
Regulations in This Part?

    This is a new section to these regulations. The proposed rule 
listed the basic contents of this section in each place there is a 
right to appeal. This final rule replaces the appeals language in each 
of those sections with a cross-reference to this section. This 
eliminates redundancy and brings this rule in line with other BLM 
regulations that address appeals. This rule makes no changes to current 
BLM policy and practice regarding appeals.

Section 2881.11 When Do I Need a Grant From BLM for an Oil and Gas 
Pipeline?

    This section is new to the final rule and explains that you must 
have a BLM grant issued under the Mineral Leasing Act for an oil and 
gas pipeline or related facility to cross Federal lands under:
    (A) BLM's jurisdiction; or
    (B) The jurisdiction of two or more Federal agencies.
    We added this section to the final rule to make it clear that a BLM 
grant under 30 U.S.C. 185 is necessary for an oil or gas pipeline that 
crosses the jurisdiction of two or more Federal agencies, or crosses 
lands under BLM's sole jurisdiction. This is consistent with previous 
section 2880.0-7 and 30 U.S.C. 185(c). ``Federal agencies'' includes 
Interior agencies such as BLM, U.S. Fish and Wildlife Service, and 
Bureau of Reclamation (the MLA at 30 U.S.C. 185(b) specifically 
excludes National Park System lands from the definition of Federal 
lands and also lands held in trust for an Indian or Indian tribe). It 
also includes non-Interior agencies such as the Forest Service, 
Department of Defense agencies, Department of Energy, Corps of 
Engineers, and Tennessee Valley Authority. Further, under the statute, 
even when BLM is not one of the ``two or more Federal agencies'' whose 
land is crossed, BLM still has the responsibility to issue grants and 
renewals for the Federal lands.

Section 2881.12 When Do I Need a TUP for an Oil and Gas Pipeline?

    This section is new to the final rule and explains that you must 
obtain a TUP from BLM when you require temporary use of more land than 
your grant authorizes to construct, operate, maintain, or terminate 
your pipeline, or to protect the environment or public safety. We added 
this section to the final rule to make it clear that any temporary use 
taking place outside the boundary of your right-of-way for a pipeline 
will require you to obtain a TUP from BLM prior to engaging in the use. 
BLM may grant a TUP for uses occurring any time during the life of the 
right-of-way. This section is consistent with existing policy and 
previous section 2881.1-2.

Subpart 2882--Lands Available for MLA Grants and TUPs

    This subpart explains which lands are available for Mineral Leasing 
Act right-of-way grants and temporary use permits.

Section 2882.10 What Lands Are Available for Grants or TUPs?

    This section explains that for lands BLM exclusively manages, we 
use the same criteria to determine whether lands are available for MLA 
right-of-way grants or TUPs as we do to determine whether lands are 
available for FLPMA right-of-way grants.
    This section also explains that where a proposed oil or gas 
pipeline right-of-way involves lands managed by two or more Federal 
agencies, the regulation at section 2884.26 of this part will be 
followed.
    Finally, this section explains that BLM may require common use of a 
right-of-way and may restrict new grants to existing corridors where 
safety and other considerations allow. Generally, BLM land use plans 
designate corridors. The Forest Service also has the authority to 
designate corridors in its Forest Management Plans. Any MLA right-of-
way BLM authorizes would respect these corridors.
    We amended the proposed rule at subpart 2882 to more accurately 
describe our criteria for determining availability of lands for right-
of-way authorizations. In the final rule we added the phrase ``for 
lands BLM exclusively manages'' to the beginning of the section to make 
it clear that we use the process in subpart 2802 to determine the lands 
available for MLA right-of-way use only if those lands are exclusively 
under BLM's jurisdiction. Final paragraph (c) was proposed as the 
second sentence to this section.
    Final paragraph (b) specifies that BLM may require common use of a 
right-of-way or restrict new grants to existing corridors where safety 
and other considerations allow. The concept of corridors is new to this 
rule. We added this paragraph to be consistent with existing BLM policy 
and previous section 2881.1-3(c). In addition, 30 U.S.C. 185(p) 
requires the use of rights-of-way in common to the extent practical in 
order to minimize adverse environmental impacts and the proliferation 
of separate rights-of-way.
    We received several comments related to common use of right-of-way 
corridors and requiring placement of rights-of-way in existing 
corridors. Several commenters said that instead of designating specific 
corridors, BLM should encourage operators to use existing rights-of-way 
to the extent it is possible and practical. The final rule encourages 
common use of right-of-way areas and 30 U.S.C. 185(p) specifies that 
the use of rights-of-way in common ``shall be required to the extent 
practical.'' BLM reserves the right to require common use as part of 
the terms of all grants we issue under these regulations. This means 
that we may grant an additional right-of-way use that may adjoin or 
overlap your right-of-way. Usually, it is practical and efficient to 
overlap rights-of-ways and locate facilities as close together as 
possible to minimize surface disturbance. However, there may be 
situations where for technical or safety reasons it is not practical to 
overlap them. An example is constructing oil or gas pipelines under 
high voltage transmission lines where the transmission line creates 
corrosion problems for steel pipe buried below the transmission line. 
We will notify you in advance if we anticipate issuing an additional 
grant for the lands covered by your grant. However, we do not agree 
with the comment that using existing rights-of-way will replace 
designated utility corridors on public lands. Corridor designations in 
land use plans serve an important purpose in planning and siting major 
utility projects. Locating a new project in a

[[Page 21034]]

designated corridor may speed up the NEPA analysis for a project.
    Several commenters questioned whether the corridor requirement can 
be applied to MLA rights-of-way. The commenters had concerns over 
siting oil and gas utilities in the same corridor as others. They were 
concerned that their ability to operate, maintain, and prevent leaks 
not be compromised. We believe that oil and gas pipelines are well 
suited to corridor development. There are many thousands of miles of 
major oil and gas pipelines that are located in designated right-of-way 
corridors in the United States. As stated above, our standard procedure 
is to contact existing grant holders whose right-of-way is inside a 
corridor when any new right-of-way is proposed for the same corridor. 
BLM must consider compatibility of uses and possible public health and 
safety issues that can result from utility placement on public lands. 
Under FLPMA, BLM has the authority to designate corridors and require 
corridor use on all public lands, including lands through which an MLA 
right-of-way has or will be authorized. On non-BLM lands, the 
``Secretary concerned'' has authority to establish corridors and 
require their use.
    Several commenters said that forcing the use of corridors could 
make a lease operation uneconomical and result in the waste of minerals 
and associated royalties. We understand the concern that locating a 
right-of-way corridor on an existing oil and gas lease could limit uses 
or production on a lease. Corridor designations are a land use planning 
decision that we make based on a multi-disciplinary analysis. This rule 
does not address the designation of right-of-way corridors. We did not 
change the final rule as a result of this comment.
    Another commenter said that BLM should use caution when requiring 
all rights-of-way to be placed in the same corridor and that BLM must 
recognize that oil and gas rights-of-way must not be compromised in any 
way by another right-of-way grantee, particularly in light of the 
liability requirements BLM proposes to place on grantees. We did not 
change the final rule as a result of this comment. New grants are 
subject to valid existing uses, including the uses of other right-of-
way holders inside or outside of corridors. In response to a liability 
issue similar to that raised by commenter, previous regulations and 
policy established liability requirements for right-of-way grant 
holders in a manner similar to that contained in these regulations. BLM 
will continue to consult with all grant holders when we consider common 
use of existing rights-of-way or designated corridors so as not to 
compromise existing rights.

Subpart 2883--Qualifications for Holding MLA Grants and TUPs

    This subpart explains who is eligible and who is ineligible to hold 
grants and TUPs. It also explains:
    (A) How you prove to BLM that you meet the qualifications to hold a 
grant or TUP; and
    (B) What happens if BLM issues you a grant or TUP and later 
determines that you are not qualified to hold it.

Section 2883.10 Who May Hold a Grant or TUP?

    This section explains that to hold a grant or TUP under these 
regulations, you must be:
    (A) A United States citizen, an association of such citizens, or a 
corporation, partnership, association, or similar business entity 
organized under the laws of the United States, or of any state therein, 
or a state or local government; and
    (B) Financially and technically able to construct, operate, 
maintain, and terminate the proposed facilities.
    We added TUPs to this section since they were mistakenly left out 
of the proposed rule. We added them here and other places in the final 
rule to be consistent with previous regulations and policy and 30 
U.S.C. 185(e). We also added the phrase ``and terminate'' to paragraph 
(b) of this section. We inadvertently omitted it from the proposed 
rule, but it is in previous section 2882.2-3(a)(4).

Section 2883.11 Who May Not Hold a Grant or TUP?

    This section explains that aliens may not acquire or hold any 
direct or indirect interest in grants or TUPs, except that they may own 
or control stock in corporations holding grants or TUPs if the laws of 
their country do not deny similar or like privileges to citizens of the 
United States. This section contains minor rewording changes, but is 
consistent with the proposed rule and previous section 2882.2-1.

Section 2883.12 How Do I Prove I Am Qualified To Hold a Grant or TUP?

    This section explains how you prove to BLM that you are qualified 
to hold a grant or TUP. If you are a private individual, BLM requires 
no proof of citizenship with your application. However, BLM may request 
you provide proof of your citizenship should a question of this nature 
arise during processing your application.
    If you are a partnership, corporation, association, or other 
business entity, you must submit the following information in your 
application:
    (A) Copies of the formal documents creating the business entity, 
such as articles of incorporation, and including the corporate bylaws. 
We inadvertently omitted this provision from the proposed rule, but in 
order to comply with 30 U.S.C. 185(i) and (j), we added the requirement 
to the final rule. BLM needs this information to assist us in tracking 
changes in corporate ownership, corporate mergers, and reorganizations. 
This requirement is consistent with section 2886.12. BLM believes it is 
reasonable to ask corporations to identify how they are structured and 
who is responsible in the organization, especially in light of several 
major corporations' recent financial difficulties;
    (B) Evidence that the party signing the application has the 
authority to bind the applicant. This provision is new to the final 
rule. We added the provision because of our past experiences in working 
with representatives of some companies. It is common for applicants to 
enlist agents to act on their behalf and they may be the only contact 
BLM has with the applicant. It is important and reasonable for us to 
know that the person purporting to be an agent of the grant holder or 
applicant actually has authority to act as such;
    (C) The name, address, and citizenship of each participant in the 
business entity;
    (D) The name, address, and citizenship of each shareholder owning 3 
percent or more of the shares, and the number and percentage of any 
class of voting shares of the business entity which such shareholder is 
authorized to vote;
    (E) The name and address of each affiliate of the business;
    (F) The number of shares and the percentage of any class of voting 
stock owned by the business entity, directly or indirectly, in any 
affiliate controlled by the business; and
    (G) The number of shares and the percentage of any class of voting 
stock owned by an affiliate, directly or indirectly, in the business 
entity controlled by the affiliate.
    If you have already supplied this information to BLM and the 
information remains accurate, you only need to reference the grant 
serial number under which you filed it.

[[Page 21035]]

Section 2883.13 What Happens if BLM Issues Me a Grant or TUP and Later 
Determines That I Am Not Qualified To Hold It?

    This section explains that if BLM issues you a grant or TUP, and 
later determines that you are not qualified to hold it, BLM will 
terminate your grant or TUP under 30 U.S.C. 185(o). You may appeal this 
decision under section 2881.10 of this part.
    In the final rule we added a cross-reference to the appropriate 
section of the Mineral Leasing Act to indicate our authority for 
terminating a grant that you are not qualified to hold. We also added a 
cross-reference to the appeals provisions of these rules.

Section 2883.14 What Happens to My Application, Grant, or TUP if I Die?

    This section explains what happens to an application that we have 
not completely processed or to a grant or TUP that we have issued when 
the applicant or holder dies. This section is new to this part, 
although we addressed this same issue at section 2803.13 of the 
proposed FLPMA regulations (``What happens to my grant if I die?''). We 
inadvertently omitted a similar provision from the MLA regulations, and 
therefore are adding it now. This section is based on and is consistent 
with final section 2803.12 of this rule. This section explains:
    (A) If an applicant or grant or TUP holder dies, any inheritable 
interest in the application, grant, or TUP will be distributed under 
state law. The word ``inheritable'' is not used here in its technical 
sense. It refers to property passing by will or intestate succession; 
and
    (B) If the distributee of a grant or TUP is not qualified to hold a 
grant or TUP under section 2883.10 of this subpart, BLM will recognize 
the distributee as the grant or TUP holder and allow the distributee to 
hold its interest in the grant or TUP for up to two years. During that 
period the distributee must either become qualified or divest itself of 
the interest.
    We added this provision to the final rule to make sure we have 
consistent processes in place for cases where an applicant or a grant 
holder dies.

Subpart 2884--Applying for MLA Grants or TUPs

    Subpart 2884 explains how to apply for a grant or TUP. More 
specifically, it explains:
    (A) The preapplication process;
    (B) What you need to provide in your application;
    (C) The processing fees for applications;
    (D) Where to file your application;
    (E) The public notification requirements for right-of-way and TUP 
applications; and
    (F) Processing of applications for grants and TUPs.

Section 2884.10 What Should I Do Before I File My Application?

    This section explains that when you determine that a proposed oil 
and gas pipeline system would cross Federal lands under BLM's 
jurisdiction, or under the jurisdiction of two or more Federal 
agencies, you should notify BLM. Advance notice to us about your intent 
to propose an oil and gas pipeline system will assist us in planning 
and in processing your application. The preapplication meeting will 
also benefit you by providing you information on known resource issues, 
land use plan constraints, and potential problems you may be able to 
avoid when filling out your application. It may also save you time 
completing your application since we can help you determine the 
information that you need to include in your application.
    Before filing an application with BLM, we encourage you to make an 
appointment for a preapplication meeting with the appropriate personnel 
in the BLM field office nearest the lands you seek to use. If your 
project affects multiple states or multiple BLM field offices within a 
state, you may want to coordinate with the BLM state office so that 
appropriate offices and agencies can be involved in the preapplication 
meeting. During the preapplication meeting BLM can:
    (A) Identify potential routing and other constraints;
    (B) Determine whether or not the lands in the proposed application 
are located within a designated or existing right-of-way corridor;
    (C) Tentatively schedule the processing of your proposed 
application;
    (D) Provide you information about qualifications for holding grants 
and TUPs, and processing, monitoring, and rent costs; and
    (E) Identify any work which will require obtaining one or more 
TUPs.
    BLM may share this information with Federal, state, tribal, and 
local government agencies to ensure that these agencies are aware of 
any authorizations you may need from them. BLM will keep confidential 
any information that you mark as ``confidential'' or ``proprietary'' to 
the extent allowed by law.
    We amended paragraph (a) of proposed section 2884.10 by deleting 
the phrase ``or the Secretary of the Interior.'' We deleted the phrase 
because the Secretary has delegated to BLM authority over rights-of-way 
and therefore it would be more appropriate for you to contact BLM, 
rather than the Secretary.
    We also added a new paragraph (d) to this section to make it clear 
that BLM will keep confidential any information that you mark as 
``confidential'' or ``proprietary'' to the extent allowed by law. This 
is consistent with existing policy and the Department's Freedom of 
Information Act regulations in part 2 of this title.

Section 2884.11 What Information Must I Submit in My Application?

    This section explains the information you must submit in your 
application for a MLA right-of-way grant. It explains that you must 
file your application on Form SF-299, as part of an Application for 
Permit to Drill or Reenter (BLM Form 3160-3), or Sundry Notice and 
Report on Wells (BLM Form 3160-5). In your application you must provide 
a complete description of the project, including:
    (A) The exact diameters of the pipes and locations of the 
pipelines;
    (B) Proposed construction and reclamation techniques; and
    (C) The estimated life of the facility.
    This section also explains that you must file with BLM copies of 
any applications you file with other Federal agencies, such as the 
Federal Energy Regulatory Commission (FERC) (see Title 18 of the Code 
of Federal Regulations for FERC regulations), for licenses, 
certificates, or other authorities involving the right-of-way. This 
provision is consistent with previous section 2882.2-1(c). Copies of 
applications to other Federal agencies, such as the FERC application 
referenced above, may be sufficient for much of the data we may require 
to process your application.
    To assist us in processing your application, BLM may ask you to 
submit additional information beyond what the form requires. This 
information may include:
    (A) A list of any Federal and state approvals required for the 
proposal;
    (B) A description of the alternative route(s) and mode(s) 
considered when developing the proposal;
    (C) Copies of, or reference to, all similar applications or grants 
you have submitted, currently hold, or have held in the past. In the 
final rule we added the phrase ``or have held in the past'' to this 
paragraph to help us evaluate your financial or technical capability to 
implement the project;

[[Page 21036]]

    (D) A statement of need and economic feasibility of the proposed 
project;
    (E) The estimated schedule for constructing, operating, 
maintaining, and terminating the project (a Plan of Development). This 
was proposed in section 2884.19(a);
    (F) A map of the project, showing its proposed location and showing 
existing facilities adjacent to the proposal. This is new to this 
section, but is consistent with previous section 2882.2-3(a)(3);
    (G) A statement certifying that you are of legal age and authorized 
to do business in the state(s) where the right-of-way would be located 
and that you have submitted correct information to the best of your 
knowledge;
    (H) A statement of the environmental, social, and economic effects 
of the proposal;
    (I) A statement of your financial and technical ability to 
construct, operate, maintain, and terminate the project;
    (J) Proof that you are a United States citizen. This provision is 
in previous sections 2882.2-1(a) and 2882.2-3(a)(6). We inadvertently 
left it out of the proposed rule and therefore added it here; and
    (K) Any other information BLM considers necessary to process your 
application. Previous section 2882.3(d) allowed BLM to require a right-
of-way applicant to submit such information as is necessary for review 
of the application. This requirement appears in the proposed rule at 
section 2884.11(c)(5).
    Before BLM reviews your application for a grant, grant amendment, 
or grant renewal, you must submit the following information and 
material to ensure that the facilities will be constructed, operated, 
and maintained as common carriers:
    (A) Conditions for, and agreements among, owners or operators, 
adding pumping facilities and looping, or to otherwise increase the 
pipeline or terminal's throughput capacity in response to actual or 
anticipated increases in demand;
    (B) Conditions for adding or abandoning intake, offtake, or storage 
points or facilities; and
    (C) Minimum shipment or purchase tenders.
    We added the phrase ``grant amendment'' to the opening sentence of 
proposed section 2884.11(c) (final section 2884.11(d)) to clarify that 
we may also require an applicant who is amending an existing grant to 
submit this information.
    If conditions or information affecting your application change, 
promptly notify BLM and submit to BLM in writing the necessary changes 
to your application. BLM may deny your application if you fail to do 
so.
    For information purposes, in the final rule we added a cite in 
paragraph (b) to FERC's regulations.
    Several commenters said that all the information this section 
requires is already in the right-of-way application form and that any 
information BLM requires should be in the form. We agree with this 
comment in theory, however, in practice our experience has shown that 
it is nearly impossible for an applicant to anticipate every question, 
and design their project to address all the issues at the application 
stage of processing. BLM requests for additional information to process 
an application are common, and the provisions of this paragraph are 
necessary to help us to efficiently process applications.

Section 2884.12 What Is the Processing Fee for a Grant or TUP 
Application?

    This section explains that you must pay a nonrefundable processing 
fee with your application to cover costs to the Federal Government of 
processing your application before the Federal Government incurs them. 
We categorize the fees based on an estimate of the amount of time that 
the Federal Government will expend to process your application and to 
issue a decision granting or denying the application. The section also 
explains that there is no processing fee if the work is estimated to 
take one hour or less. This section contains a chart that lists the 
processing fees by category and is based on proposed section 2884.12. 
For Processing Categories 1 through 4, labor costs are by far the 
largest percentage of processing costs. Costs associated with 
environmental analysis and other application processing steps for these 
categories are predominately labor and time costs. The costs of 
supplies, printing, fuel, and lodging are small.
    For Processing Category 5 and 6 applications, the complexity of the 
required environmental analysis is usually an important factor in 
determining processing costs, particularly if the application requires 
an environmental impact statement. Processing costs for Category 5 and 
6 applications are, however, worked out in advance between BLM and the 
applicant either through a Master Agreement or a detailed accounting of 
work hours BLM estimates it will spend on processing the application. 
Because the non-labor costs are insignificant compared to labor costs, 
we eliminated the term ``field examination'' from the category 
definitions for Categories 1 through 4, and in final section 2881.5 of 
this part.
    BLM updates the fees for Categories 1 through 4 in the schedule 
each calendar year, based on the previous year's change in the IPD-GDP, 
as measured second quarter to second quarter. BLM will round these 
changes to the nearest dollar. You may obtain a copy of the annually 
revised schedule from any BLM state or field office or on BLM's 
Internet Home Page at http://www.blm.gov.
    After an initial review of your application, BLM will notify you in 
writing of the category into which your application fits. You must then 
submit to BLM the appropriate payment for that category before BLM 
processes your application. If you disagree with the category that BLM 
has determined for your application, you may appeal the decision under 
section 2881.10 of this part.
    Your signature on a cost recovery Master Agreement (Category 5) 
constitutes your agreement with the processing category decision. 
Inherent in the concept of a Master Agreement is a cooperative 
relationship between BLM and an applicant. BLM is committed to working 
with any applicant wishing to pursue a Master Agreement. Under the 
provisions of the proposed rule and this final rule, an applicant's 
signature on a Master Agreement constitutes an agreement with the 
processing category decision. More generally, an applicant's signature 
on a Master Agreement constitutes agreement with all of its provisions, 
including the negotiated application processing costs. A signed Master 
Agreement documents BLM's decision on the processing category and the 
applicant's agreement with it. Therefore, we believe that an appeal of 
the negotiated agreement would be rare. Any disagreements during a 
Master Agreement negotiation process that could not be resolved would 
not result in consummation and signature of a Master Agreement. At that 
point, BLM would have to make a processing category decision outside 
the context of a Master Agreement, and that decision could be the 
subject of an administrative appeal.
    If you have submitted the processing fee and you appeal a 
Processing Category 1 through 4 or a Processing Category 6 
determination to IBLA, BLM will process your application while the 
appeal is pending. If IBLA finds in your favor, you will receive a 
refund or adjustment of your processing fee. We added this provision to 
the final rule to explain existing processes.
    BLM may determine at any time that the application requires 
preparing an EIS. If this occurs, BLM will send you a decision changing 
your processing

[[Page 21037]]

category to Processing Category 6. You may appeal the decision under 
section 2881.10 of this part.
    If you hold a grant or TUP relating to the Trans-Alaska Pipeline 
System (TAPS), BLM will send you a written statement seeking 
reimbursement of actual costs within 60 calendar days after the close 
of each quarter. Quarters end on the last day of March, June, 
September, and December. In the final rule we added language explaining 
that in processing your application and administering authorizations 
relating to TAPS, the Department of the Interior will avoid unnecessary 
employment of personnel and needless expenditure of funds. This 
provision was not in the proposed rule. We added it to be consistent 
with previous section 2883.1-1(d).
    We added a new provision to paragraph (b) of this section 
explaining that there is no fee if it takes one hour or less to process 
your application. We believe that the minimal costs involved to process 
an application do not justify charging a fee. We also added a new 
Category 1 for processing routine applications that require greater 
than one hour but less than or equal to eight hours to process. Please 
see the preamble to section 2804.14 of this rule for a discussion of 
why we added this new category.
    Several commenters objected to BLM charging grant holders 
``actual'' costs. Some of the commenters claimed that the distinction 
was artificial, as the MLA did not use the word ``actual,'' and BLM 
should charge MLA grant holders reasonable costs, as it does FLPMA 
grant holders.
    BLM charges MLA grant holders actual costs because the law requires 
it. Section 28 of the MLA (30 U.S.C. 185(l)) requires applicants for 
MLA pipeline rights-of-way to reimburse the United States for 
``administrative and other costs'' incurred in processing applications 
and in monitoring the construction, operation, maintenance, and 
termination of an MLA pipeline. The MLA does not limit or qualify this 
requirement, nor does it list any factors that BLM may take into 
account when determining reimbursable costs. This is in marked contrast 
to section 304(b) of FLPMA, which addresses cost recovery for rights-
of-way issued under FLPMA (see 49 FR 25972 (June 25, 1984)). Thus, BLM 
charges its actual administrative and other costs.
    On July 25, 1986, in the preamble to the previous cost recovery 
regulations at subpart 2808, BLM discussed ``actual costs'' (51 FR 
26836-26837). As explained in that preamble and in previous section 
2800.0-5(o), ``actual costs'' are the financial measures of resources 
an agency expends on processing an application for a right-of-way or in 
monitoring the construction, operation, and termination of a facility 
BLM authorizes by a grant or permit. BLM bases actual cost information 
on Federal accounting and reporting systems which conform to the 
accounting principles and standards of the U.S. Comptroller General. 
Costs are divided into ``direct'' and ``indirect'' costs.
    Direct costs include agency expenditures for labor, material, 
stores, and equipment usage associated with performing right-of-way 
responsibilities. These costs include such items as gross wages and 
employee benefits, material, stores, equipment, and contract costs.
    Indirect costs are those costs an agency incurs for providing 
common services not specific to a particular application and include 
purchasing, property management, office fixed costs, accounting, 
automated data management, and personnel services. BLM assesses 
administrative charges against right-of-way cost recovery accounts on a 
percentage basis in order to recover costs of indirect support 
services. Executive and managerial direction are not included in 
indirect costs.
    For Processing Categories 1 through 4, the established fees reflect 
both direct and indirect costs. For Processing Categories 5 and 6, we 
apply the annual indirect cost percentage to the direct costs that we 
determine for a specific application.
    ``Actual costs'' do not include management overhead costs. We have 
defined ``management overhead costs'' in section 2801.5 as Federal 
expenditures associated with BLM's directorate, including all BLM State 
Directors and the entire Washington Office staff, except where a State 
Director or Washington Office staff member is required to perform work 
on a specific right-of-way case. We also note that the costs of studies 
or other work which BLM must do regardless of whether it receives an 
application are considered independent public benefits and are not 
included in processing fees. This work includes preparing land use 
plans.
    Several commenters suggested that BLM and the applicant should 
agree on what the ``reasonable'' costs of processing an application 
should be. They were also concerned that under these regulations BLM 
would do additional field work that is not necessary. Section 504(g) of 
FLPMA requires reimbursement of ``reasonable'' administrative and other 
costs incurred in processing applications for grants, and section 
304(b) identifies factors to consider in determining reasonable costs. 
The MLA, in contrast, requires that applicants for grants and TUPs 
reimburse the United States for ``administrative and other costs'' 
incurred in processing applications, without providing additional 
criteria to consider, as does FLPMA. Therefore, BLM must determine 
administrative and other costs to process an MLA grant or TUP 
application without considering the factors that FLPMA requires us to 
consider for FLPMA rights-of-way (see 49 FR 25972 (June 25, 1984)). BLM 
will undertake or require only that work that is necessary to process 
an application efficiently and in compliance with applicable laws and 
regulations. There is no provision in section 28 of the MLA, or in this 
or previous regulations, that permits BLM to collect processing fees 
from a grant or TUP applicant for any work beyond what is necessary to 
process an application.
    Some commenters also asked for the basis for costs and the staff 
hourly rates. Staff hourly rates are set by a government-wide general 
schedule (see the Office of Personnel Management website at OPM.gov) 
for most BLM employees, and include hourly rates for various levels or 
``grades`` of BLM specialists. Please see section 2804.14 and the 
opening paragraphs of this preamble section for further discussion of 
processing fees.
    Several commenters indicated that the rule uses the wrong 
``inflation factor'' and said they believed that the Consumer Price 
Index would be more appropriate. Previous section 2883.1-1(c), which 
established cost recovery categories in 1985, had no provision to make 
annual adjustments in cost recovery categories I through V. This final 
rule uses the IPD-GDP as the basis for making annual adjustments in the 
new categories 1 through 4. This is an appropriate standard where, as 
here, fees are heavily dependent on labor costs. As noted in the 
preamble to the proposed rule at 64 FR 32109 (June 15, 1999), the 
Consumer Price Index does not reflect a sufficiently high labor 
intensiveness to be used to adjust the cost recovery fee structure. 
Please see the preamble discussion for section 2804.14 for more 
information.
    Several commenters said that significant technological improvements 
are taking place and offer significant cost savings since the 1986 
study and that these savings should be included in the calculations. 
Please see section 2804.14 for more discussion of comments on 
processing fees and a response to this comment.

[[Page 21038]]

    Several commenters asked if they had a right to an appeal if they 
disagreed with BLM's category determination. Final sections 2884.12(d) 
and (e) clearly provide that if an applicant disagrees with a final BLM 
processing category decision, the applicant has the right to appeal 
that decision. This is consistent with previous sections 2883.1-1(a)(4) 
and 2884.1 and proposed sections 2884.12(d) and (f).

Section 2884.13 Who Is Exempt From Paying Processing and Monitoring 
Fees?

    This section explains that you are exempt from paying processing 
and monitoring fees if you are a state or local government or an agency 
of such a government and BLM issues the grant for governmental purposes 
benefitting the general public. If your principal source of revenue 
results from charges you levy on customers for services similar to 
those of a profit-making corporation or business, you are not exempt.
    This section is based on proposed section 2885.14 which cross-
referenced the proposed subpart 2804 regulations. That proposed subpart 
contained proposed section 2804.15, on which this section is based.

Section 2884.14 When Does BLM Reevaluate the Processing and Monitoring 
Fees?

    This is a new section to the final rule that explains that BLM 
reevaluates processing and monitoring fees for each category, and the 
categories themselves, within 5 years after they go into effect and at 
10-year intervals after that. This section also lists some examples of 
the types of factors BLM considers when reevaluating these fees. 
Several comments suggested a periodic review and evaluation of the 
processing and monitoring fees and categories, and this section is 
responsive to those concerns. Any adjustment that BLM makes to the fees 
or fee structure as a result of a review under this section, apart from 
applying the IPD-GDP, would require a separate rulemaking.
    We deleted proposed section 2884.14 because the provisions in that 
section are covered elsewhere in this final rule.

Section 2884.15 What Is a Master Agreement (Processing Category 5) and 
What Information Must I Provide to BLM When I Request One? and

Section 2884.16 What Provisions Do Master Agreements Contain and What 
Are Their Limitations?

    The provisions in these two sections were proposed in section 
2884.13. That section cross-referenced proposed section 2804.7. In this 
final rule, instead of the cross-reference, we added the requirements 
for a Master Agreement application to the sections. Sections 2884.15 
and 2884.16 contain one difference from the final FLPMA right-of-way 
regulations in sections 2804.17 and 2804.18: The provision for the 
waiver of reductions of processing and monitoring fees in final section 
2804.18(c) for FLPMA grants does not appear in this final section 
because the MLA does not provide for reductions.
    Please see the discussion in preamble sections 2804.17 and 2804.18 
for more detailed information on the Master Agreement provisions and 
responses to comments concerning Master Agreements.

Section 2884.17 How Will BLM Process My Processing Category 6 
Application?

    This section describes how BLM will process a Category 6 
application. In processing your application BLM will:
    (A) Determine the issues subject to analysis under NEPA;
    (B) Prepare a preliminary work plan that identifies data needs, 
studies, surveys and other reporting requirements, the level of NEPA 
documentation, consultation and coordination requirements, public 
involvement needs, and a proposed schedule to complete application 
processing;
    (C) Develop a preliminary financial plan that estimates the actual 
costs of processing your application and monitoring the project;
    (D) Discuss with you the preliminary plans discussed above; and
    (E) Work with you to develop final work and financial plans which 
reflect any work you have agreed to do. As part of this process BLM 
will complete our final estimate of the costs you must pay BLM for 
processing the application and monitoring the project.
    BLM may allow you to prepare environmental documents and conduct 
any studies related to your application. However, if BLM agrees to 
allow you to perform this work, you must do it to BLM standards.
    Finally, this section states that BLM will set out timeframes for 
periodic estimates of processing costs for a specific work period. If 
your payment exceeds the costs that the United States incurred for the 
work, BLM will either adjust the next billing to reflect the excess, or 
refund you the excess under 43 U.S.C. 1734. You may not deduct any 
amount from a payment without BLM's prior written approval. You must 
pay any amount due before we will continue to process your application.
    Please see the preamble discussion of section 2804.19 for a 
discussion of Category 6 applications and responses to comments.

Section 2884.18 What If There Are Two or More Competing Applications 
for the Same Pipeline?

    This section explains that if there are two or more competing 
applications for the same pipeline and your application is in:
    (A) Processing Category 1 through 4, you must reimburse BLM for 
processing costs as if the other application or applications had not 
been filed; or
    (B) Processing Category 6, you are responsible for processing costs 
identified in your application. You must pay the processing fee in 
advance. Consistent with existing policy, BLM will not process your 
application without the advance payment. Cost sharing by competing 
applicants may be arranged.
    This section also explains that BLM determines whether applications 
are compatible in a single right-of-way, or are competing applications 
for the same pipeline.
    Finally, this section explains that if BLM determines that 
competition exists, BLM will describe the procedures for a competitive 
bid through a bid announcement in a newspaper of general circulation in 
the area affected by the potential right-of-way and by a notice in the 
Federal Register.
    This section was proposed as section 2884.15 and it mirrors final 
section 2804.23. Please see that final section's discussion for an 
explanation of competing applications, responses to comments, and 
changes to the final rule.

Section 2884.19 Where Do I File My Application for a Grant or TUP?

    This section was proposed as section 2884.16 and explains where you 
should file your application for a grant or TUP. Under this section, if 
BLM has exclusive jurisdiction over the lands involved, you should file 
your application with the BLM field office having jurisdiction over the 
lands described in the application. One of the changes we made to the 
final rule was to replace ``State Office'' with ``Field Office,'' 
because field offices are the most appropriate place of first contact, 
where applicants can readily obtain information about land use 
planning, resources, and issues in the area or areas where their 
pipeline is proposed.
    If another Federal agency has exclusive jurisdiction over the land 
involved, you should file your application with that agency and refer 
to its regulations for its requirements. If there are no BLM-
administered lands involved, but the lands are under the

[[Page 21039]]

jurisdiction of two or more Federal agencies, including other 
Department of the Interior agencies (but not the National Park 
Service), you should file your application at the BLM office in the 
vicinity of the pipeline. BLM will notify you where to direct future 
communications about the pipeline.
    If two or more Federal agencies, including BLM, but not the 
National Park Service, have jurisdiction over the lands in the 
application, file it at any BLM office having jurisdiction over a 
portion of the Federal lands. BLM will notify you where to direct 
future communications about the pipeline.
    With the exception of editorial changes and the change discussed 
above, this section remains as proposed.

Section 2884.20 What Are the Public Notification Requirements for My 
Application?

    This section was proposed as section 2884.17. It explains the 
public notification requirements for grant applications. When BLM 
receives your application, it will publish a notice in the Federal 
Register or a newspaper of general circulation in the vicinity of the 
lands involved. If BLM determines the pipeline will have only minor 
environmental impacts, it is not required to publish this notice. This 
final rule continues to require procedures that are consistent with 
previous section 2882.3(b) and proposed section 2884.17.
    If we do publish a notice, it will, at a minimum, contain:
    (A) A description of the pipeline system; and
    (B) A statement of where the application and related documents are 
available for review.
    BLM will send copies of the published notice for review and comment 
to the:
    (A) Governor of each state within which the pipeline system would 
be located;
    (B) Head of each local government or jurisdiction or tribal 
government within which the pipeline system would be located; and
    (C) Heads of other Federal agencies whose jurisdiction includes 
areas within which the pipeline system would be located.
    If your application involves a pipeline that is 24 inches or more 
in diameter, BLM will also send notice of the application to the 
appropriate committees of Congress in accordance with 30 U.S.C. 185(w). 
We revised previous section 2882.3(a) on September 30, 2002 (67 FR 
61276) to incorporate this Congressional notification requirement to 
comply with amended 30 U.S.C. 185(w). This requirement is carried 
forward in final section 2884.20(c). Please see the preamble to the 
September 30, 2002 rule for an explanation of new paragraph (c).
    BLM may hold public hearings or meetings on your application if we 
determine there is sufficient interest to warrant the time and expense 
of such hearings or meetings. BLM will publish a notice of any such 
hearings or meetings in advance in the Federal Register or in a 
newspaper of general circulation in the vicinity of the lands involved. 
If BLM determines that public hearings or meetings are needed, BLM may 
pay for the cost of holding them, the applicant may pay, or both BLM 
and the applicant may share the costs. Before BLM holds any public 
hearings or meetings, BLM and the applicant must reach an agreement on 
responsibilities and costs associated with them.
    We amended proposed section 2884.17(b)(2) by adding ``or tribal 
government'' to the list of governments we would notify. This corrects 
an omission in the proposed rule and more accurately describes our 
notification process.
    We amended proposed paragraph (d) in the final rule to make it 
clear that we will publish any notices of meetings in a newspaper of 
general circulation in the vicinity of the lands involved. The proposal 
only said ``local newspaper.'' This change makes this section 
consistent with other provisions in the rule and more accurately 
describes where we would publish the notice.
    Several commenters said that the public notification requirements 
should not apply to transmission pipelines and that oil and gas field 
production operations should be excluded from this regulation. We 
disagree. Although oil and gas production facilities, including on and 
off-lease flowlines, generally have minor environmental impacts, there 
may be some instances where potential impacts warrant formal public 
notice. This final rule at paragraph (a) states that BLM is not 
required to provide formal notification through publication in the 
Federal Register or a newspaper of general circulation if it determines 
that proposed rights-of-way will have minor impacts. This final rule is 
consistent with previous section 2882.3(b), which provided BLM with 
discretion in determining whether or not to provide formal notice of 
applications, based on a review of each application. A blanket 
exclusion of public notice for all oil and gas pipelines serving oil 
and gas production facilities could result in the public not being 
provided formal notice in cases where it should occur and consequently, 
we did not make the change suggested by commenters.
    Several commenters said that publication of the notice in the 
Federal Register should suffice and that there is no need to also 
publish in local newspapers. The commenter's suggestion is consistent 
with previous section 2882.3(b). We agree with the commenters in part. 
The final rule leaves it up to local BLM officials to determine whether 
it is more appropriate to publish in either the Federal Register or a 
local newspaper.
    Several commenters said that the requirement to notify the Governor 
and local governments should not apply to oil field projects. They also 
objected that there is no time limit for the Governor or local 
governments to respond after receiving the notice. As discussed above, 
the formal notification requirement would ordinarily not apply to 
``routine'' oil and gas field production grants and TUPs where 
environmental impacts would be minor. However, when formal notification 
is necessary, BLM will send copies of the published notice to the 
Governor and local or tribal governments, and heads of other affected 
Federal agencies. Although not a regulatory requirement, BLM will 
identify in the notification an appropriate review time and request 
that comments be provided within a reasonable period. As a matter of 
practice, BLM does not provide open-ended review and comment when we 
make these notifications.
    Several commenters stated that we should revise proposed section 
2884.17(c) by replacing the word ``refer'' with the word ``notice'' to 
be consistent with the 1990 amendments to the MLA. Final section 
2884.20(c) is consistent with this suggestion.
    Some commenters suggested that we revise proposed paragraphs (b) 
and (c) to include notification of Indian tribes with jurisdiction over 
lands affected by a right-of-way grant application. We added ``tribal 
government'' to the list of those we will notify in final section 
2884.20(b)(2) to address this comment.

Section 2884.21 How Will BLM Process My Application?

    Under this section BLM will notify you in writing when it receives 
your application and will identify your processing fee. BLM will 
process your completed application following the timeframes in the 
chart in paragraph (b) of this section.
    This section was proposed as section 2884.18, which contained 
little more than cross-references to the applicable provisions of the 
part 2800 regulations.

[[Page 21040]]

This final rule replaces the cross-references with the provisions of 
the rule from the part 2800 regulations. Since this final section 
mirrors final section 2804.25 of this rule, please see the discussion 
of that section for changes to the rule and responses to comments.

Section 2884.22 Can BLM Ask Me for Additional Information?

    This section was proposed as section 2884.19 and explains that BLM 
may ask you for additional information necessary to process your 
application. If we require additional information, we will follow the 
procedures in final section 2804.25(b) and therefore we cross reference 
that section here.
    This section also explains that we may also ask other Federal 
agencies for additional information, terms and conditions, and advice 
on whether to issue the grant.

Section 2884.23 Under What Circumstances May BLM Deny My Application?

    This section explains that BLM may deny your application if:
    (A) The proposed use is inconsistent with the purpose for which BLM 
or other Federal agencies manage the lands described in the 
application;
    (B) The proposed use would not be in the public interest;
    (C) You are not qualified to hold a grant or TUP;
    (D) Issuing the grant or TUP would be inconsistent with the Act, 
other laws, or these or other regulations;
    (E) You do not have or cannot demonstrate the technical or 
financial capability to construct the pipeline or operate facilities 
within the right-of-way or TUP area; or
    (F) You do not adequately comply with a deficiency notice or with 
any BLM requests for additional information needed to process the 
application.
    You may appeal BLM's decision to deny your application under 
section 2881.10 of this part.
    This section was proposed as section 2884.20 and mirrors the 
provisions in final section 2804.26. The only difference is that the 
MLA allows for TUPs, whereas the FLPMA regulations in part 2800 of this 
rule address short-term right-of-way authorizations. The provisions in 
this section replace a cross-reference in proposed section 2884.20. We 
made this change to minimize the need for applicants to refer back to 
the FLPMA regulations. Please see the discussion of section 2804.26 in 
this preamble for a discussion of responses to public comments.

Section 2884.24 What Fees Do I Owe If BLM Denies My Application or If I 
Withdraw My Application?

    This section was proposed as section 2884.21 and explains that if 
BLM denies, or you withdraw, your application, you owe the processing 
fee, unless you have a Category 5 or 6 application. Then, the following 
conditions apply:
    (A) If BLM denies your Category 5 or 6 application, you are liable 
for all actual costs that the United States incurred in processing it. 
The money you have not paid is due within 30 calendar days of receiving 
a notice for the amount due; and
    (B) You may withdraw your application in writing before BLM issues 
a grant or TUP. If you withdraw your application before BLM issues a 
grant or TUP, you are liable for all actual processing costs the United 
States has incurred up to the time you withdraw the application and for 
the actual costs of terminating your application. Any money you have 
not paid is due within 30 calendar days after receiving a bill for the 
amount due. Processing fees in Categories 1 through 4 are not 
refundable. We replaced the cross reference in proposed 2884.21 with 
the text in this final rule to minimize the need to refer back to the 
FLPMA regulations.
    Several commenters said that oil and gas lessees should not owe any 
money if BLM rejects their applications. We disagree. The Mineral 
Leasing Act at 30 U.S.C. 185(l) says that ``[t]he applicant for a 
right-of-way or permit shall reimburse the United States for 
administrative and other costs incurred in processing the application * 
* *.'' The plain meaning of the statute and the use of the word 
``applicant'' rather than ``holder,'' which is used elsewhere in the 
section to indicate that an application has been approved, suggests 
that Congress intended that applicants should reimburse costs, whether 
or not BLM approved or rejected the application. We did not amend this 
section as a result of this comment.

Section 2884.25 What Activities May I Conduct on BLM Lands Covered By 
My Application for a Grant or TUP While BLM Is Processing My 
Application?

    This section was proposed as section 2884.22 and explains the 
activities you may conduct before BLM makes a decision on your 
application. Under these regulations you may conduct casual use 
activities (see final section 2881.5 for a definition of ``casual 
use'') on BLM lands covered by the application, as may any other member 
of the public. No grant or TUP is required for casual use on BLM lands.
    This section also explains that for any activities on BLM lands 
that are not casual use, such as surface disturbing surveys or data 
collection, you must obtain prior BLM approval. To conduct activities 
on lands administered by other Federal agencies, you must obtain any 
prior approval those agencies require.
    We amended proposed section 2884.22 by making it clear that a grant 
or TUP is not required for activities on BLM lands that are casual use. 
This change is consistent with existing policy and regulation (see 
previous section 2882.1(d)). We also added language explaining that for 
activities on non-BLM lands administered by other Federal agencies, you 
must follow the rules and obtain any prior approvals from those 
agencies.

Section 2884.26 When Will BLM Issue a Grant or TUP When the Lands Are 
Managed By Two or More Federal Agencies?

    This section was proposed as 2884.23. It explains the processes BLM 
must follow before we issue or renew right-of-way grants or TUPs.
    This section explains that if the application involves lands 
managed by two or more Federal agencies, BLM will not issue or renew 
the grant or TUP until the heads of the agencies administering the 
lands involved have concurred. For example, if a pipeline crosses 
Bureau of Reclamation and U.S. Corps of Engineers lands, BLM would be 
the issuing agency. Likewise, if a pipeline crosses Forest Service and 
Department of Energy lands, BLM would be the issuing agency. BLM would 
also be the issuing agency if a pipeline crossed BLM lands and another 
Federal agency's lands. Where concurrence is not reached, the Secretary 
of the Interior, after consultation with these agencies, may issue or 
renew the grant or TUP, but not through lands within a Federal 
reservation where doing so would be inconsistent with the purposes of 
the reservation.
    We deleted proposed paragraph (d) in the final rule because the 
statement made in that section is unnecessary.

Section 2884.27 What Additional Requirement Is Necessary for Grants or 
TUPs for Pipelines 24 or More Inches in Diameter?

    This section explains that if an application is for a pipeline 24 
inches or more in diameter, BLM will not issue or renew the grant or 
TUP until after we notify the appropriate committees of

[[Page 21041]]

Congress in accordance with 30 U.S.C. 185(w). On September 30, 2002, we 
published this provision as a stand-alone amendment to our regulations. 
Please see 67 FR 61274 for a discussion of that final rule. This 
paragraph is consistent with that final rule.

Subpart 2885--Terms and Conditions of MLA Grants and TUPs

    This subpart contains information and policies about the terms and 
conditions of grants and TUPs. It also explains:
    (A) When grants and TUPs are effective;
    (B) What the terms and conditions of a grant or TUP are;
    (C) How much it costs to hold a grant or TUP; and
    (D) What happens if you default on rental or other payments.

Section 2885.10 When Is a Grant or TUP Effective?

    This section explains that a grant or TUP is effective after both 
you and BLM sign it. You must accept its terms and conditions in 
writing and pay any necessary rent and monitoring fees.
    After receiving and reviewing your application, BLM may send you an 
unsigned right-of-way grant or TUP for you to review. It will include 
terms, conditions, and stipulations that are discussed in section 
2885.11. If you agree with the terms, conditions, and stipulations of 
the unsigned grant or TUP, you should sign and return it to BLM with 
any monitoring fee payment that may still be due for the application. 
If there has been no change in the terms, conditions, or stipulations, 
and all regulations, including section 2884.23, remain satisfied, BLM 
will then sign the grant or TUP and return it to you with a decision 
letter. If we deny your application, the decision letter will notify 
you of the reason(s) and how you can correct any deficiencies.
    Your written acceptance of the grant or TUP constitutes an 
agreement between you and the United States that your right to use the 
Federal lands, as specified in the grant or TUP, is subject to the 
terms and conditions of the grant or TUP and applicable laws and 
regulations.
    Proposed section 2885.10 cross-referenced section 2805.11 of the 
proposed rule (final section 2805.13). The final rule replaces the 
cross-reference with the actual provision that was cross-referenced. In 
the final rule we also added a cross-reference to the rent and 
monitoring fee provisions of the subpart. With the exception of these 
changes and some minor editorial changes, the rule remains as proposed. 
This section is based on final section 2805.13. Please see the 
discussion of section 2805.13 for an explanation of the other changes 
to that and this section.

Section 2885.11 What Terms and Conditions Must I Comply With?

    This section explains the duration and the terms and conditions of 
use of grants and TUPs. Proposed section 2885.11 stated that the 
general provisions of proposed sections 2805.10, 2805.12, and 2805.13 
of this chapter apply. In this final rule we eliminated the cross-
references and replaced them with the actual provisions concerning the 
terms and conditions of grants. Grants or TUPs contain the following 
terms and conditions, as applicable:
    (A) Duration: The term of a grant may not exceed 30 years. Grants 
that BLM issues for a term of one year or longer will terminate on 
December 31 of the final year of the grant. The year in which we issued 
the grant, even though it may be only a partial year, counts as the 
first full year of the grant. This is because the MLA does not allow 
grants for terms of greater than 30 years. For example, a grant issued 
for 30 years on June 12, 2004, would expire on December 31, 2033. 
Another example, a grant issued for ``two years'' on September 21, 
2004, would expire on December 31, 2005.
    The term of a TUP may not exceed 3 years. BLM frequently issues 
TUPs on an anniversary year basis. For example, if BLM issued a grant 
on September 1, 2003, and also issued an associated TUP for a three-
year term, the TUP would expire on September 1, 2006.
    BLM considers the following factors in establishing the term of a 
grant or TUP:
    (1) The cost of the pipeline and related facilities you plan to 
construct, operate, maintain, or terminate. In the final rule we 
reworded this sentence by adding ``and related facilities you plan to 
construct, operate, maintain or terminate'' because we wanted to be 
clear that the cost includes the cost of any related facilities and 
other costs incurred over the life of the project, not just the cost of 
project construction;
    (2) The pipeline or facility's useful life;
    (3) The public purpose served; and
    (4) Any potentially conflicting land uses.
    Paragraph (a) of this section contains minor editorial changes to 
make it easier to understand. We added the provision stating that 
grants with a term of one year or longer terminate on December 31 to 
make this section consistent with the corresponding FLPMA regulation at 
section 2805.11. We did this so that grant expirations will coincide 
with rental periods that are paid through December 31 of the rental 
period. We also added language to final paragraph (a) explaining that 
the maximum term for a TUP is three years. This provision is consistent 
with existing policy. We mistakenly omitted it from the proposed rule;
    (B) By accepting a grant or TUP, you agree to use the lands 
described in the grant or TUP for the purposes set forth in the grant 
or TUP. We reworded the final rule by removing the cross-reference to 
section 2805.10(c) and replaced it with the actual provisions from that 
section. We also included language stating that BLM may modify your 
proposed use or change the route or location of the facilities in your 
application. This provision was proposed as section 2885.11, which 
cross references proposed section 2805.10. This section states that by 
accepting a grant or TUP, you also agree to comply with, and be bound 
by, the terms and conditions set forth in paragraph (b) of this 
section.
    Under this final rule, during construction, operation, maintenance, 
and termination of the project you must:
    (1) To the extent practicable, comply with all existing and 
subsequently enacted, issued, or amended Federal laws and regulations 
and state laws and regulations applicable to the authorized use. We 
reworded this provision in the final rule by adding the phrase ``To the 
extent practicable,'' a phrase that has been in the Department's 
regulations since 1979. A slight variation of this phrase appears in 
section 28(v) of the MLA, 30 U.S.C. 185(v), which states that the 
Secretary ``shall take into consideration and to the extent practical 
comply with State standards for right-of-way construction, operation, 
and maintenance.'' It is worth noting that section 28(h)(2) states in 
part that the Secretary ``shall issue regulations * * * which shall 
include * * * requirements to insure that activities in connection with 
the right-of-way or permit will not violate applicable air and water 
quality standards nor related facility siting standards established by 
or pursuant to law'' (see 30 U.S.C. 185(h)(2)). This section also makes 
clear that a holder must comply with any changes to applicable law or 
regulation that occur during the term of a right-of-way grant. This is 
consistent with longstanding policy and previous section 2881.2(a);
    (2) Rebuild and repair roads, fences, and established trails 
destroyed or damaged by constructing, operating, maintaining, or 
terminating the project;

[[Page 21042]]

    (3) Build and maintain suitable crossings for existing roads and 
significant trails that intersect the project;
    (4) Do everything reasonable to prevent and suppress fires on or in 
the immediate vicinity of the right-of-way or TUP area. We reworded 
this paragraph by removing the phrase ``on your own or at BLM's 
request'' because it was not necessary;
    (5) Not discriminate against any employee or applicant for 
employment during any phase of the project because of race, creed, 
color, sex, or national origin. You must also require subcontractors to 
not discriminate. We added the phrase ``during any phase of the 
project'' to make it clear that the provision not to discriminate 
against any employee applied not only during the construction of the 
facility, but for the term of the grant;
    (6) Pay the monitoring fees and rent;
    (7) If BLM requires, obtain and/or certify that you have a surety 
bond or other acceptable security to cover any losses, damages, or 
injury to human health, the environment, and property incurred in 
connection with your use and occupancy of the right-of-way or TUP area, 
including terminating the grant or TUP, and to secure all obligations 
imposed by the grant or TUP and applicable laws and regulations. We 
added the phrase ``including terminating the grant or TUP'' to 
emphasize that the termination phase of a grant is a time when 
substantial surface disturbing activities may occur, necessitating use 
or modification of the bond. We also added the phrase ``and to secure 
all obligations imposed by the grant or TUP and applicable laws and 
regulations'' to make this section consistent with 30 U.S.C. 185(m) of 
the MLA. This section also explains that your bond must cover liability 
for damages or injuries resulting from releases or discharges of 
hazardous materials. We took out the phrase ``actual or threatened'' 
before ``releases or discharges of hazardous materials'' since we do 
not require a bond for liability for threatened releases, only actual 
releases. BLM may require a bond or increase or decrease the value of 
an existing bond or other acceptable security at any time during the 
term of the grant. We also added the phrase ``or other acceptable 
security'' to be consistent with language in previous regulations and 
30 U.S.C. 185(m) of the MLA. It is not only surety bonds that may 
increase or decrease, but also any other acceptable security that was 
used to secure the obligations imposed by the grant or TUP;
    (8) Assume full liability if third parties are injured or damages 
occur to property on or near the right-of-way or TUP area (see section 
2886.13);
    (9) Comply with project-specific terms, conditions, and 
stipulations, including requirements to:
    (i) Restore, revegetate, and curtail erosion or any other 
rehabilitation measure BLM determines is necessary;
    (ii) Ensure that activities in connection with the grant or TUP 
comply with air and water quality standards or related facility siting 
standards contained in applicable Federal or state law or regulations;
    (iii) Control or prevent damage to scenic, aesthetic, cultural, and 
environmental values, including fish and wildlife habitat, and to 
public and private property and public health and safety. We added the 
phrase ``scenic, aesthetic, cultural, and'' to the final rule to make 
it consistent with final section 2805.12(i)(3) and existing policy and 
added ``private'' property to be consistent with 30 U.S.C. 
185(h)(2)(C);
    (iv) Protect the interests of individuals living in the general 
area who rely on the area for subsistence uses as that term is used in 
Title VIII of ANILCA (16 U.S.C. 3111 et seq.). In the final rule we 
replaced the term ``subsistence purposes'' with ``subsistence uses'' 
because that is the term ANILCA uses. We also added the cite to ANILCA; 
and
    (v) Ensure that you construct, operate, maintain, and terminate the 
facilities on the lands in the right-of-way or TUP area in a manner 
consistent with the grant or TUP;
    (10) Immediately notify all Federal, state, tribal, and local 
agencies of any release or discharge of hazardous materials reportable 
to such entity under applicable law. You must also notify BLM at the 
same time, and send BLM a copy of any written notification you 
delivered. We reworded this paragraph to make it easier to understand 
and removed the phrase ``actual or threatened release'' from the 
proposed rule. Several commenters pointed out that there is no 
requirement to report threatened releases;
    (11) Not dispose of or store hazardous materials on your right-of-
way or TUP area, except as provided by the terms, conditions, and 
stipulations of your grant or TUP. Any storage of hazardous waste on 
site must be in compliance with applicable Federal and state law. The 
proposed rule specified that you may not store hazardous materials on 
your right-of-way for more than 90 days, less if required by law. We 
received several comments related to crude oil storage that would be on 
lease for the life of an oil well and comments that some chemicals will 
be on lease for more than 90 days. After reviewing this clause, we 
amended the final rule because it would be difficult to enforce and 
monitor and a more effective means to address the issue is available. 
The final rule states that you may only store or dispose of hazardous 
materials in accordance with the terms, conditions, and stipulations of 
your grant or TUP;
    (12) Certify your compliance with all requirements of the Emergency 
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et 
seq., when you receive, assign, renew, amend, or terminate your grant 
or TUP. The proposed rule required an annual certification from holders 
that they have complied with all provisions of the Emergency Planning 
and Community Right to Know Act. We amended the final rule to remove 
this annual certification because we did not want to impose unnecessary 
requirements on holders. We also added ``amend'' to the list of 
occasions you would need to certify that you are in compliance with the 
EPCRA;
    (13) Control and remove any release or discharge of hazardous 
material on or near the right-of-way or TUP area arising in connection 
with your use and occupancy of the right-of-way or TUP area, whether or 
not the release or discharge is authorized under the grant or TUP. You 
must also remediate and restore lands and resources affected by the 
release or discharge to BLM's satisfaction and to the satisfaction of 
any other Federal, state, tribal, or local agency having jurisdiction 
over the land, resource, or hazardous material;
    (14) Comply with all liability and indemnification provisions and 
stipulations in the grant or TUP;
    (15) As BLM directs, provide diagrams or maps showing the location 
of any constructed facility. In the final rule we added this provision 
to specify that BLM may require holders to provide as-built surveys, 
maps, or diagrams of constructed facilities. This provision is 
consistent with existing policy and previous section 2881.2(b) which 
states that BLM grants ``shall contain such terms, conditions, and 
stipulations as may be prescribed by the authorized officer regarding 
extent, duration, survey, location, construction, operation, 
maintenance, use, and termination;''
    (16) Construct, operate, and maintain the pipeline as a common 
carrier. This means that the pipeline owners and operators must accept, 
convey, transport, or purchase without discrimination all oil or gas 
delivered to the pipeline without regard to where the oil and gas was 
produced (i.e., whether

[[Page 21043]]

on Federal or non-federal lands). Where natural gas not subject to 
state regulatory or conservation laws governing its purchase by 
pipeline companies is offered for sale, each pipeline company must 
purchase, without discrimination, any such natural gas produced in the 
vicinity of the pipeline. Common carrier provisions of this paragraph 
do not apply to natural gas pipelines operated by:
    (A) A person subject to regulation under the Natural Gas Act (15 
U.S.C. 717 et seq.); or
    (B) A public utility subject to regulation by state or municipal 
agencies with the authority to set rates and charges for the sale of 
natural gas to consumers within the state or municipality.
    We reworded proposed section 2885.11(b) by removing the phrase ``or 
a logical part of the system of which this pipeline right-of-way is a 
part'' from the description of pipeline because the language was not 
consistent with 30 U.S.C. 185(r)(1) of the MLA or with previous 
regulations. We removed a reference to ``joint owners'' for the same 
reason. We also added ``Where natural gas not subject to state 
regulatory or conservation laws governing its purchase by pipeline 
companies is offered for sale, each pipeline company must purchase, 
without discrimination, any such natural gas produced in the vicinity 
of the pipeline'' because it is in previous regulations and in 30 
U.S.C. 185(r)(3)(B) of the MLA. We erroneously omitted it from the 
proposed rule;
    (17) Within 30 calendar days after BLM requests it, file rate 
schedules and tariffs for oil and gas, or derivative products, 
transported by the pipeline as a common carrier with the agency BLM 
prescribes, and provide BLM proof that you made the required filing. 
This provision is in the final rule to resolve situations where a 
holder may not have allowed other companies to transport products in 
its pipelines at a reasonable cost. If the pipeline is an interstate 
pipeline, the operator would have to provide its rate schedule to the 
FERC. If FERC determined the operator was not operating the pipeline as 
a common carrier, BLM would then take corrective action, including 
issuing an immediate temporary suspension of the grant for not 
complying with the common carrier provisions of the grant. If the 
pipeline is an intrastate line, the operator would need to provide its 
rate schedules to the appropriate state agency, such as a state oil and 
gas commission, who would make the same determination as to reasonable 
costs;
    (18) With certain exceptions (listed in the statute), not export 
domestically produced crude oil by pipeline without Presidential 
approval (30 U.S.C. 185(u) and (s) and 50 U.S.C. App. 2401);
    (19) Not exceed the right-of-way width that is specified in the 
grant without BLM's prior written authorization. If you need a right-
of-way wider than 50 feet plus the ground occupied by the pipeline and 
related facilities, see section 2885.14 of this subpart. We reworded 
this paragraph to make it clear that an MLA pipeline right-of-way may 
not always be 50-feet wide. BLM can issue a grant authorizing a right-
of-way less than 50-feet wide if site specific conditions warrant, or 
if 50 feet is not necessary to construct the pipeline. Additionally, 
section 185(d) of the MLA states that a right-of-way ``shall not exceed 
fifty feet plus the ground occupied by the pipeline * * * unless the 
Secretary or agency head finds, and records the reason for his finding, 
that in his judgment a wider right-of-way is necessary for operation 
and maintenance after construction, or to protect the environment or 
public safety;''
    (20) Not use the right-of-way or TUP area for any use other than 
that authorized by the grant or TUP. If you require other pipelines, 
looping lines, or other improvements not authorized by the grant or 
TUP, you must first secure BLM's written authorization;
    (21) Not use or construct on the land in the right-of-way or TUP 
area until:
    (i) BLM approves your detailed plan for construction, operation, 
and termination of the pipeline, including provisions for 
rehabilitation of the right-of-way or TUP area and environmental 
protection. We amended the proposed section 2885.11(b)(6) by removing 
the phrase ``If appropriate'' from this requirement for approval of a 
detailed plan prior to construction because all pipeline rights-of-way 
must have this detailed plan; and
    (ii) You receive a Notice to Proceed for all or any part of the 
right-of-way. In certain situations BLM may waive this requirement in 
writing. We changed proposed section 2885.11(b)(6) to state that BLM 
may not issue a Notice to Proceed (NTP) for some MLA right-of-way 
grants. Your grant will specifically state if an NTP is required prior 
to construction. An NTP is typically issued as part of a 
preconstruction conference with BLM, the holder, and its contractor(s); 
and
    (22) Comply with all other stipulations that BLM may require.
    We received many comments regarding bonding for right-of-way 
grants. Several commenters suggested that the regulations set a $5 
million maximum or an amount comparable to the foreseeable risk and 
hazards present as the bond amount. They said that this would make the 
bond provision consistent with the liability provisions of the rule. We 
did not change the final rule as a result of this comment. There is no 
limitation set by this rule on the maximum bond amount. We believe that 
the bond amount should be set on a case-by-case basis and the amount is 
dependent on the nature and risk of an authorized use. The $5 million 
limit referenced by this commenter seems to be referring to the maximum 
limit for strict liability found at proposed section 2807.12(f). In the 
final rule, we reduced the upper limit for strict liability to $2 
million. Liability in excess of $2 million is possible under parts 2800 
and 2880, but such liability will be determined by the ordinary rules 
of evidence.
    Several commenters said that BLM must identify how we determine the 
amount of the bond. Commenters said that BLM should list those factors, 
which the agency considers when setting the amount of the bond. We did 
not change the final rule as a result of this comment. We believe it 
reasonable to establish the bond amount on a case-by-case basis. This 
decision will be part of the administrative record for the case. Among 
the factors that we will use to determine bond amounts are the expected 
costs to the agency to restore and reclaim disturbed areas and to 
repair damage to scenic, aesthetic, cultural, and environmental values 
and to protect public health and safety. Those costs can include both 
direct costs for things such as equipment and labor and indirect costs 
for administrative overhead costs.
    Several commenters said that applicants should have the right to 
appeal the bond amount, especially since the BLM retains the right to 
increase an existing bond at any time during the term of the grant. BLM 
agrees with the commenter and the final rule contains a provision that 
provides for the appeal of any of the terms, conditions, and 
stipulations of a grant (see section 2881.10 of these regulations). If 
a new right-of-way grant has a bond requirement as one of the terms and 
conditions, the holder would be able to appeal that term and condition. 
If BLM added a bond requirement to an existing right-of-way grant, it 
would be accomplished by sending a new decision changing the terms and 
conditions of the grant. This decision is also appealable.
    Several commenters said that there was ``no such thing as liability 
coverage for potential or threatened damages.'' They said that when 
damage occurs, then there is an event that causes

[[Page 21044]]

damage. BLM agrees and changed the rule in several locations to remove 
the phrase ``threatened release.''

Section 2885.12 What Rights Does a Grant or TUP Convey?

    This section is new to the final rule. The proposed rule at section 
2885.11 only cross-referenced similar provisions in proposed section 
2805.12. This section states the provisions from that section instead. 
It states that a grant or TUP conveys only those rights which it 
expressly contains. BLM issues grants and TUPs subject to the valid 
existing rights of others, including the United States. The rights 
conveyed to a holder by a grant or TUP include the right to:
    (A) Use the described lands to construct, operate, maintain, and 
terminate facilities within the right-of-way or TUP area for authorized 
purposes under the terms and conditions of the grant or TUP;
    (B) Allow others to use the land as your agent in the exercise of 
the rights that the grant or TUP specifies;
    (C) Do minor trimming, pruning, and removing of vegetation on the 
right-of-way or TUP areas to maintain the areas or any facility;
    (D) Use common varieties of stone and soil which are necessarily 
removed during construction of the pipeline, without additional BLM 
authorization or payment, in constructing the pipeline within the 
authorized right-of-way or TUP area; and
    (E) Assign the grant or TUP to another, provided that you obtain 
BLM's prior written approval.
    We did not carry forward into this final rule the provisions in 
proposed section 2805.12(b), because BLM does not issue grants under 
the MLA that would authorize the holder to sublease or allow other 
parties to use the facility.

Section 2885.13 What Rights Does the United States Retain?

    This section is new to the final rule. Proposed section 2885.11 
only cross-referenced similar provisions in proposed section 2805.13. 
This section states the provisions instead. This section describes the 
rights that the United States retains and explains that the United 
States may exercise any rights the grant or TUP does not expressly 
convey to you. These include the United States' right to:
    (A) Access the lands covered by the grant or TUP at any time and 
enter any facility you construct on the right-of-way or TUP area. BLM 
will give you reasonable notice before it enters any facility on the 
right-of-way or TUP area;
    (B) Require common use of your right-of-way or TUP area, including 
subsurface and air space, and authorize use of the right-of-way or TUP 
area for compatible uses. You may not charge for the use of the lands 
made subject to such additional right-of-way grants;
    (C) Retain ownership of the resources of the land covered by the 
grant or TUP, including timber and vegetative or mineral materials. You 
have no right to use these resources, except as noted in section 
2885.12 of this subpart. In the final rule we replaced the phrase 
``products of the land including living and non living resources'' with 
the phrase ``resources of the land covered by the grant or TUP, 
including timber and vegetative or mineral materials and any other 
living or non-living resources.'' This is consistent with proposed 
section 2805.13(c). The amended wording makes it clear that the United 
States retains control over the resources located on the right-of-way 
or TUP areas. Except as noted in section 2885.12, if the holder needs 
to remove timber, vegetative, or mineral materials from these areas 
during construction, it needs a Materials Act permit for that action;
    (D) Determine whether or not your grant is renewable; and
    (E) Change the terms and conditions of your grant or TUP as a 
result of changes in legislation, regulation, or as otherwise necessary 
to protect public health or safety or the environment.
    We did not carry forward proposed section 2805.13(d) into this 
final section because reciprocal access roads do not apply to oil and 
gas pipelines.

Section 2885.14 What Happens If I Need a Right-of-Way Wider Than 50 
Feet Plus the Ground Occupied By the Pipeline and Related Facilities?

    This section explains that you may apply to BLM at any time for a 
right-of-way wider than 50 feet plus the ground occupied by the 
pipeline and related facilities. In your application you must show that 
the wider right-of-way is necessary to:
    (A) Properly operate and maintain the pipeline after you have 
constructed it;
    (B) Protect the environment; or
    (C) Provide for public safety.
    BLM will notify you in writing of its finding(s) and its decision 
on your application for a wider right-of-way. If the decision is 
adverse to you, you may appeal it under section 2881.10 of this part.

Section 2885.15 How Will BLM Charge Me Rent?

    This section explains how BLM will charge rent for MLA right-of-way 
grants or TUPs. Please note that unlike FLPMA, the MLA does not provide 
for any reductions or waivers of rent.
    BLM will charge rent beginning on the first day of the month 
following the effective date of the grant or TUP through the last day 
of the month when the grant or TUP terminates. Example: If a grant or 
TUP becomes effective on January 10 and terminates on September 16, the 
rental period would be February 1 through September 30, or 8 months. 
You would pay rent for \8/12\ of the year.
    BLM sets or adjusts the annual rental periods to coincide with the 
calendar year by prorating the first year's rent based on 12 months. 
For example, a 10-year grant issued August 29, 2004, would expire on 
December 31, 2013. Annual rent would be calculated using the linear 
rent schedule and total rent for the term of the grant would be 
calculated by multiplying the annual rent rate by 9 \4/12\. If you 
disagree with the rent that BLM charges, you may appeal the decision 
under section 2881.10 of this part.

Section 2885.16 When Do I Pay Rent?

    This section explains that you must pay rent for the initial rental 
period before BLM issues you a grant or TUP. For example, a 30-year 
grant issued on July 20, 2004, with a ten-year rental payment plan, 
would expire on December 31, 2033. The initial rental period would be 
from August 1, 2004 through December 31, 2013 or 9 \5/12\ years. The 
rent for the initial rental period would be the annual rental rate 
(from the 2004 linear rent schedule) multiplied by 9 \5/12\. You make 
all other rental payments according to the payment plan described in 
section 2885.21. After the first rental payment, all rental payments 
are due on January 1 of the first year of each succeeding rental period 
for the term of your grant. The second rental payment period in this 
example would be from January 1, 2014 through December 31, 2023. The 
rent for the second rent payment period would be the annual rental rate 
(from the 2014 linear rent schedule) multiplied by 10. The third rental 
payment period would be from January 1, 2024 through December 31, 2033. 
The rent for the third rental payment period would be the annual rental 
rate (from the 2024 linear rent schedule) multiplied by 10.
    In proposed sections 2885.11 and 2885.13 we cross-referenced, but 
did not repeat, the parallel rental provisions in part 2800 to make 
them applicable to the part 2880 regulations. We added this section to 
the final rule so it would stand alone. See the discussion in the 
preamble for section 2806.12 for

[[Page 21045]]

additional information on rental payments.

Section 2885.17 What Happens If I Pay the Rent Late?

    Proposed section 2885.15 incorrectly cross-referenced proposed 
section 2806.12 rather than proposed section 2806.13. Instead of merely 
correcting the cross reference in this section, we repeat here the 
discussion of the late payment policy in final section 2806.13. Please 
see that section of the preamble for a complete discussion of the 
changes from the proposed rule.
    This section explains that if BLM does not receive the rent payment 
within 15 calendar days after the rent was due, BLM will charge you a 
late payment of $25.00 or 10 percent of the rent you owe, whichever is 
greater, not to exceed $500 per authorization. If BLM does not receive 
your rent payment and late payment fee within 30 days after rent was 
due, BLM may collect other administrative fees as provided by statute, 
such as the Debt Collection Improvement Act of 1996. If BLM does not 
receive the rent, late payment fee, and any administrative fees within 
90 calendar days after the rent was due, BLM may terminate your grant 
and you may not remove any facility or equipment without BLM's written 
permission. The rent due, late payment fee, and any administrative fees 
remain a debt that you owe to the United States.
    If you pay the rent, late payment fees, and any administrative fees 
after BLM has terminated the grant, the grant is not automatically 
reinstated. You must file a new application with BLM. BLM will consider 
the history of your failure to timely pay rent in deciding whether to 
issue you a new grant. This is consistent with the proposed rule.
    The most significant change to the rental provisions of this rule 
is adding a late payment fee. We asked for comments on this subject in 
the proposed rule at 64 FR 32112 (June 15, 1999). The procedures are 
the same for both FLPMA and MLA grants. Please see the preamble for 
final section 2806.13 and the discussion related to late payment fees 
and administrative fees for more information about the process.
    You may appeal to the Interior Board of Land Appeals any adverse 
action BLM takes against your grant or TUP under section 2881.10 of 
this part.
    We received several comments on late payment assessments. Please 
see the preamble discussion of section 2806.13 for a discussion of the 
comments.

Section 2885.18 When Must I Make Estimated Rent Payments to BLM?

    This section explains that to assist us in processing your 
application for a right-of-way in a timely manner, BLM may estimate 
rent payments and require you to pay that amount when it issues the 
grant or TUP. The rent amount may change once BLM determines the actual 
rent of the grant or TUP. BLM will credit you for any rental 
overpayment, and you are liable for any underpayment. This section does 
not apply to rent payments made under the linear rent schedule in this 
part. This section is the same as section 2806.16 of this rule. It does 
not apply to rental determined from the linear schedule, only for rent 
determined by an appraisal or by some other means. See the preamble 
discussion in section 2806.16 for an explanation of why we have this 
rule.

Section 2885.19 What Is the Rent for a Linear Right-of-Way?

    This section explains that, except as noted in paragraph (b) of 
this section, BLM will use the Per Acre Rent Schedule at section 
2806.20(b) of this chapter to calculate the rent for MLA grants and 
TUPs and that the schedule is updated annually.
    This section also explains that BLM may determine your rent using 
the methods described in section 2806.50 of this title, rather than by 
using the rent schedule cited in paragraph (a) of this section, if the 
rent determined by comparable commercial practices or an appraisal 
would be 10 or more times the rent from the schedule. This section 
gives BLM the discretion to deviate from the schedule only if certain 
conditions apply. Current policy constrains our use of alternate means 
to determine rent as provided under section 2806.50 of this title. BLM 
policy guidance, outlined in instruction memorandum WO-IM 2002-172, 
states that BLM, at this time, will only use the current schedule to 
calculate rent for all linear right-of-way uses. The current policy of 
not deviating from the linear schedule is in response to Congressional 
direction contained in the appropriations act for the Department of the 
Interior for FY 2001 (Pub. L. 106-291). Once you are on a rent 
schedule, BLM will not remove you from it unless the BLM State Director 
decides to remove you from paying rent under paragraph (b) of this 
section, or you file an application to amend your grant.
    You may obtain the current linear right-of-way rent schedule from 
any BLM state or field office or by writing to: Director, BLM 1849 C 
St. NW., Mail Stop 1000 LS, Washington, DC 20240. BLM also posts the 
current linear schedule on BLM's National Home Page on the Internet at 
http://www.blm.gov.
    Several commenters said that it was arbitrary and capricious for 
BLM to exclude the oil and gas industry from reductions in rent 
payments. We did not change the final rule as a result of this comment. 
The oil and gas industry is not excluded from hardship rental 
reductions for access roads under FLPMA (see section 2806.15). The MLA, 
however, does not permit us to reduce rents for oil and gas pipelines. 
This policy is not new and has been part of previous BLM regulations 
and policy (see previous section 2883.1-2).

Section 2885.20 How Will BLM Calculate My Rent for Linear Rights-of-Way 
the Schedule Covers?

    This section explains that BLM calculates your rent for a linear 
right-of-way by multiplying the rent per acre for the appropriate 
category of use and county zone price from the current schedule by the 
number of acres in the right-of-way or TUP area that fall into those 
categories and the number of years in the rental period. For example: 
(rent per acre) X (number of acres) X (number of years in the rental 
period) = rent for a linear right-of-way. If BLM has not previously 
used the rent schedule to calculate your rent, we may do so after 
giving you reasonable written notice. BLM intends to give reasonable 
written notice to the holders of any existing grant that we put on the 
schedule when rent was previously determined by some other means. With 
the exception of minor editorial changes, this section is similar to 
proposed sections 2885.13 and 2806.16 and final section 2806.22.

Section 2885.21 How Must I Make Rent Payments for My Grant or TUP?

    Under this section, you must make either annual payments or payment 
for more than 1 year, as follows:
    (A) For TUPs you must make a one-time nonrefundable payment for the 
term of the TUP. For grants, you must make either nonrefundable annual 
payments or nonrefundable payments for more than 1 year. Any holder may 
make a one-time payment of the required rent in advance for the entire 
term of the grant. If you choose not to make a one-time payment, you 
must pay according to one of the following methods:
    (1) If you are an individual and your annual rent is $100 or less, 
you must pay at 10-year intervals not to exceed the term of the grant. 
If your annual rent is greater than $100, you may pay

[[Page 21046]]

annually or at multi-year intervals that you may choose; or
    (2) Everyone else must pay rent in advance at ten-year intervals 
not to exceed the term of the grant. For example, if you are a 
corporation and your annual rent is $110, you are required to pay rent 
at ten year intervals and the rent due would be $1,100;
    (B) BLM considers the first partial calendar year in the rent 
payment period to be the first year of the rental payment term. BLM 
pro-rates the first year rental amount based on the number of months 
left in the calendar year after the effective date (issuance date) of 
the grant. For example, if BLM issued the grant in the example 
described above on September 10, 2003, and the annual rental for the 
grant is $110, the first year's rent would be prorated for the 3 months 
(rent begins the first day of the month following the effective date of 
the grant (see section 2885.15)) remaining in 2003, or $27.50. 
Therefore the total rental for the first ten years of this grant would 
be $1,017.50 ($27.50 for the first year + $110 per year for the next 9 
years).
    This section is based on final section 2806.23 of this rule.

Section 2885.22 How Will BLM Calculate Rent for Communication Uses 
Ancillary to a Linear Grant, TUP, or Other Use Authorization?

    This section explains that when a communication use is ancillary 
to, and authorized by BLM under, a grant or TUP for a linear use, or 
some other type of authorization (e.g., a mineral lease or sundry 
notice), BLM will determine the rent using the linear rent schedule or 
rent scheme associated with the other authorization, and not the 
communication use rent schedule.
    It is common for oil and gas companies to need communications 
facilities for internal two-way radio communications and for internal 
microwave relays to control valves and monitor large pipelines. 
Sometimes these facilities are located along the linear pipeline right-
of-way area and sometimes they may be located on nearby mountain tops. 
In either case, these facilities may be authorized by an MLA pipeline 
right-of-way grant as long as they are for internal communications. In 
these cases we do not use the communication use schedule (see section 
2806.30) to determine rent. This is because the communication use only 
supports the operation of the primary use (the pipeline), and rent for 
a pipeline is determined by the linear schedule. Instead, we add the 
acres for the ancillary communication site into the linear rental 
calculation for the pipeline. The holder cannot operate ancillary 
communication facilities for a commercial purpose, (e.g., containing 
tenants or customers). If a grant holder's communication facility is 
not authorized as part of a pipeline grant, TUP, or other 
authorization, BLM would process a communication use lease under part 
2800 of this title and we would calculate rent for the facility under 
section 2806.30 of the FLPMA right-of-way regulations. We proposed this 
provision at section 2806.25 and include it in this part to cover these 
situations. On occasion, BLM authorizes internal communications uses 
for the holder of an oil and gas lease under the oil and gas lease 
itself if the communication facility is located inside the boundary of 
the oil and gas lease and the function of the facility is to serve the 
lease.

Section 2885.23 If I Hold a Grant or TUP, What Monitoring Fees Must I 
Pay?

    This section is based on proposed section 2885.13 and final section 
2805.16. This section explains that you must pay to BLM a fee for any 
costs the United States incurs in monitoring the following six 
activities: Construction, operation, maintenance, and termination of 
the pipeline and protection and rehabilitation of the affected Federal 
lands your grant or TUP covers. We replaced the phrases ``within grant 
areas'' and ``protecting and rehabilitating the affected area'' with 
``of the pipeline'' and ``protection and rehabilitation of the affected 
Federal lands'' to make it clear what activities we are monitoring and 
where.
    This final section explains that all holders must pay to BLM a fee 
for any costs the United States incurs in monitoring the construction, 
operation, maintenance, and termination of a pipeline and protection 
and rehabilitation of Federal land. This is consistent with section 
28(l) of the Mineral Leasing Act which states, ``The applicant for a 
right-of-way or permit shall reimburse the United States for 
administrative and other costs incurred in processing the application, 
and the holder of a right-of-way or permit shall reimburse the United 
States for the costs incurred in monitoring the construction, 
operation, maintenance, and termination of any pipeline and related 
facilities on such right-of-way or permit area * * *.'' (30 U.S.C. 
185(l)).
    BLM bases the monitoring category on the estimated number of work 
hours necessary to monitor your grant or TUP just as we base the 
processing fee on the estimated number of hours to process the grant. 
See the preamble discussion at final section 2805.16 for a discussion 
of the rationale for changing the criteria for charging for monitoring. 
Our proposal at section 2885.13(b) would have placed a holder in the 
same category for monitoring purposes as the holder occupied for 
processing purposes. Alternatively, we noted that if we should 
establish monitoring fees separate from processing fees, we would 
establish monitoring categories based on the number of work hours 
involved, including field examinations (see 64 FR 32109).
    The fee for monitoring Categories 1 through 4 are one-time fees and 
are not refundable. We added this language to the final rule to be 
consistent with previous section 2883.1-1(c), which made these 
application category fees non-refundable.
    This section contains a chart that explains the fees for monitoring 
categories based on the estimated work hours involved. In the final 
rule we add the chart to illustrate the categories, work hours, and 
associated monitoring fee as of the effective date of the rule, similar 
to the chart in section 2805.16 and to make the sections consistent.
    This section also explains that BLM annually updates Category 1 
through 4 monitoring fees in the manner described at section 2884.12(c) 
of this part. BLM updates Category 5 monitoring fees as specified in 
the Master Agreement. The monitoring cost schedule is available from 
any BLM state or field office and on BLM's National Home Page on the 
Internet at http://www.blm.gov.
    We received several comments on the monitoring fees in the proposed 
rule. These comments relate to both part 2800 and 2880. Please see the 
discussion of those comments in the preamble of final section 2805.16.

Section 2885.24 When Do I Pay Monitoring Fees?

    This section explains that for Monitoring Categories 1 through 4, 
unless BLM otherwise directs, you must pay monitoring fees when you 
submit to BLM your written acceptance of the terms and conditions of 
the grant or TUP. If you have a Master Agreement (Monitoring Category 
5) you must pay the monitoring fees as specified in the agreement. BLM 
will not issue your grant or TUP until it receives the required 
payment. Proposed section 2885.13(c) used the words ``BLM will not 
accept your written acceptance of the grant until you pay the fees.'' 
In the final rule we replaced this phrase with ``BLM will not issue 
your grant or TUP until it receives the required payment'' to be more 
clear.
    If you have a Monitoring Category 6 application, BLM may 
periodically

[[Page 21047]]

estimate the costs of monitoring your use of the grant and will include 
this in the costs associated with processing fees described in section 
2884.12 of this part. If BLM has underestimated the monitoring costs, 
we will notify you of the shortfall. If your payments exceed the actual 
costs that Federal employees incur for monitoring, BLM will reimburse 
you the difference or adjust the next payment to reflect the 
overpayment. Unless BLM gives you written authorization, you may not 
offset or deduct the overpayment from your payments. The financial plan 
for your Processing Category 6 application will include BLM's estimate 
of the actual processing and monitoring costs. Both fees are deposited 
into the same project account for your project. If our estimates were 
accurate, we will have spent all the processing fees by the time we are 
ready to issue the grant and you will be asked to deposit the 
monitoring fee estimate when you accept the terms and conditions of the 
grant or TUP. If there is processing money still available in the 
account when the grant is issued, we will apply the balance to the 
monitoring fee amount. At the end of the project, we will return any 
remaining balance in the account to the holder.
    For Monitoring Categories 1 through 4 and 6, if you disagree with 
BLM's category determination, you may appeal the decision under section 
2881.10 of this part.
    This section was proposed as section 2885.13. We made minor word 
changes to the final rule that do not alter the meaning of the section, 
but make it consistent with wording in section 2805.17 of this title.

Subpart 2886--Operations On MLA Grants and TUPs

    Subpart 2886 regulates operational activities on grants and TUPs. 
It explains:
    (A) When you can start activities on your grant or TUP and who 
regulates your activities;
    (B) The times you must contact BLM;
    (C) Your liabilities under the grant or TUP;
    (D) What happens with your grant or TUP if the lands in the grant 
change jurisdiction;
    (E) The conditions under which BLM may suspend your activities or 
terminate a grant or TUP; and
    (F) What happens to any facilities on a grant or TUP when it 
terminates.

Section 2886.10 When Can I Start Activities Under My Grant or TUP?

    This section explains when you can start activities under a grant 
or TUP. When you can start depends on the terms of your grant or TUP. 
You can start activities when you receive the grant or TUP you and BLM 
signed, unless the grant or TUP requires that BLM provide a written 
Notice to Proceed. If your grant or TUP contains a Notice to Proceed 
requirement, you may not initiate construction, operation, maintenance, 
or termination on the right-of-way or TUP area until BLM issues you a 
Notice to Proceed.
    Under this section, before you begin operating your pipeline or 
related facility authorized by a grant or TUP, you must certify in 
writing to BLM that the pipeline system:
    (A) Has been constructed and tested according to the terms of the 
grant or TUP; and
    (B) Is in compliance with all required plans, specifications, and 
Federal and state laws and regulations.
    In the proposed rule at section 2886.10, the first sentence of this 
section cross-referenced proposed section 2807.10. In the final rule we 
took the revised language from final section 2807.10, expanded it to 
include TUPs, and put it in this section as paragraph (a), rather than 
cross-referencing it. We also restructured the remainder of the 
proposed section as paragraph (b), which is consistent with previous 
section 2883.3. With the exception of the substitution and minor 
editorial changes, this section remains as proposed. We received no 
substantive comments on this section.

Section 2886.11 Who Regulates Activities Within My Right-of-Way or TUP 
Area?

    This section explains that after BLM issues the grant or TUP, the 
head of the agency having administrative jurisdiction over the Federal 
lands involved will regulate your grant or TUP activities in 
conformance with the Act, appropriate regulations, and the terms and 
conditions of the grant or TUP. It also explains that BLM and the other 
agency head may reach another agreement for administrative 
jurisdiction.
    Section 28(c)(2) of the MLA, 30 U.S.C. 185(c)(2), provides that 
``Each agency head shall administer and enforce the provisions of this 
section, appropriate regulations, and the terms and conditions of 
rights-of-way or permits insofar as they involve Federal lands under 
the agency head's jurisdiction.'' In the context of final section 
2886.11, ``activities'' refers to construction and operational 
activities, and amendments, assignments, suspensions, terminations, and 
collecting rent and monitoring fees. Under this final rule, BLM is 
responsible for regulating these activities on lands under its 
jurisdiction.
    For grants and TUPs involving lands under the jurisdiction of more 
than one agency (including agencies of the Department of the Interior 
other than BLM), the head of each agency will be responsible for 
regulating the grant or TUP on the lands under its jurisdiction, using 
its own regulations if such regulations exist. BLM and another agency 
may enter into an agreement that specifies that BLM may regulate some 
or all of the activities on the other agency's lands. The MLA at 30 
U.S.C. 185(c)(2) allows for these agreements. Such agreements could be 
specific to individual grants or TUPs or they could be more general, 
covering all MLA grants and TUPs that include lands administered by the 
other agency. Under these regulations and 30 U.S.C. 185(c)(2), BLM is 
responsible for processing renewal applications for all grants 
involving its lands and those involving lands under the jurisdiction of 
two or more agencies, just as it is for processing applications for new 
grants or TUPs.
    We received no substantive comments on this section. With the 
exception of editorial changes, this section remains as proposed.

Section 2886.12 When Must I Contact BLM During Operations?

    This section explains that you must contact BLM:
    (A) At the times specified in your grant or TUP;
    (B) When your use requires a substantial deviation from the grant 
or TUP. You must obtain BLM's approval before you begin any activity 
that is a substantial deviation;
    (C) When there is a change affecting your application, grant, or 
TUP, including, but not limited to, changes in:
    (1) Mailing address;
    (2) Partners;
    (3) Financial conditions; or
    (4) Business or corporate status; or
    (D) When BLM requests it.
    We proposed this section as section 2886.13, which cross-referenced 
proposed section 2807.11. In the final rule we took the revised 
language from final section 2807.11 and put it in this section, rather 
than cross-referencing it. We deleted proposed paragraph 2807.11(d) 
from the final rule because submitting the certificate of construction 
itself is a contact with BLM and therefore adding it to the list of 
times you must contact BLM is unnecessary. We also added references to 
TUPs, where appropriate. Please see the discussion of section 2807.11 
for an

[[Page 21048]]

explanation of the other changes to this final section and responses to 
public comments.

Section 2886.13 If I Hold a Grant or TUP, for What Am I Liable?

    This section explains your liabilities as a grant or TUP holder. 
You are liable to the United States for any damage or injury it incurs 
in connection with your use and occupancy of the right-of-way or TUP 
area. Similarly, you are liable to third parties for any damage or 
injury they incur in connection with your use and occupancy of the 
right-of-way or TUP area.
    You are also strictly liable for any activity or facility 
associated with your right-of-way or TUP area which BLM determines 
presents a foreseeable hazard or risk of damage or injury to the United 
States. BLM will specify in the grant or TUP any activity or facility 
posing such hazard or risk, and the financial limitations on damages 
commensurate with such hazard or risk. BLM will not impose strict 
liability for damage or injury resulting primarily from an act of war 
or the negligence of the United States, except as otherwise provided by 
law. As used in this section, strict liability extends to costs 
incurred by the Federal Government to control or abate conditions, such 
as fire or oil spills, which threaten life, property, or the 
environment, even if the threat occurs to areas that are not under 
Federal jurisdiction. This liability is separate and apart from 
liability under other provisions of law.
    This section explains that you are strictly liable to the United 
States for damage or injury up to $2 million for any one incident. This 
financial limitation does not apply to the release or discharge of 
hazardous substances on or near the grant or TUP area, or as otherwise 
provided by law. BLM will determine your liability under Parts 2800 and 
2880 for any amount in excess of the $2 million strict liability 
limitation (as adjusted) through the ordinary rules of negligence. 
Please see the discussion in section 2807.12 of this preamble for a 
further discussion of the strict liability cap.
    This section explains that the rules of subrogation apply in cases 
where a third party caused the damage or injury. This means that when a 
grant or TUP holder compensates the United States in strict liability 
for damage or injury caused by a third party, the grant or TUP holder 
steps into the place of the United States and has the right to pursue 
compensation from the third party for the damage or injury done to the 
United States. A similar provision appears at 30 U.S.C. 185(x)(7), 
calling for application of laws of the jurisdiction where the damages 
occurred.
    If you cannot satisfy claims for injury or damage, any owners of an 
interest in a grant or TUP and all affiliates or subsidiaries of any 
holder of a grant or TUP, except for corporate stockholders, are 
jointly and severally liable to the United States. If BLM issues a 
grant or TUP to more than one holder, each is jointly and severally 
liable. Joint and several liability in this context means that each 
person is responsible for the full amount of liability if the other(s) 
cannot satisfy the liability. This provision is in previous regulations 
at sections 2883.1-4(g) and (i).
    This section also explains that by accepting the grant or TUP, you 
agree to fully indemnify or hold the United States harmless for 
liability, damage, or claims arising in connection with your use and 
occupancy of right-of-way or TUP areas.
    The provisions of this section do not limit or exclude other 
remedies. This provision is consistent with existing policy and 
previous section 2883.1-4(h).
    In the proposed rule at section 2886.15, we cross-referenced 
proposed section 2807.12. In the final rule we took the revised 
language from final section 2807.12 and put it in this section, rather 
than cross-referencing it. We also made this section applicable to 
TUPs. The language in section 2807.12 does not include TUPs because 
final part 2800 does not provide for TUPs. The MLA does provide for 
TUPs, so it was necessary to add the references to them. Please see the 
discussion of final section 2807.12 for an explanation of the other 
changes to this final rule.
    There were numerous public comments on the liability sections of 
the proposed rules. Three comments specifically related to the proposed 
MLA rule, saying that no company can agree to strict liability for 
facilities in the oil field which are required by BLM to be open to the 
public. Please see the discussion of final section 2807.12 for 
responses to these and the other liability provision comments.

Section 2886.14 As Grant or TUP Holders, What Liabilities Do State, 
Tribal, and Local Governments Have?

    This section explains that if you are a state, tribal, or local 
government or its agency or instrumentality, you are liable to the 
fullest extent law allows at the time that BLM issues your grant or 
TUP. If you do not have the legal power to assume full liability, you 
must repair damages or make restitution to the fullest extent of your 
powers. Senate Report No. 93-207, in commenting on section 104(g) of S. 
1081, a predecessor to section 28(x)(1) of the MLA, notes that 
governmental entities may not be legally able to assure protection of 
the United States because of limitations in state law or State 
Constitutions.
    The section also explains that BLM may require you to provide a 
bond, insurance, or other acceptable security to:
    (A) Protect the liability exposure of the United States to claims 
by third parties arising out of your use and occupancy of the right-of-
way or TUP area;
    (B) Cover any losses, damages, or injury to human health, the 
environment, and property incurred in connection with your use and 
occupancy of the right-of-way or TUP area; and
    (C) Cover any damages or injuries resulting from the release or 
discharge of hazardous materials incurred in connection with your use 
and occupancy of the right-of-way or TUP area. We took out the phrase 
``actual or threatened'' before ``release or discharge of hazardous 
materials'' since we do not require a bond for liability for threatened 
releases, only actual releases.
    The section also explains that based on your record of compliance 
and changes in risk and conditions, BLM may require you to increase or 
decrease the amount of your security.
    The provisions of this section do not limit or exclude other 
remedies.
    This section was proposed as part of section 2886.15, which cross-
references proposed section 2807.12, which in turn cross-references 
proposed section 2807.13. In the final rule we took the revised 
language from final section 2807.13 and put it in this section, rather 
than cross-referencing it, and also added references to TUPs.
    Please see the discussion of section 2807.13 for an explanation of 
the other changes to this final rule and responses to public comments.

Section 2886.15 How Is Grant or TUP Administration Affected if the BLM 
Land My Grant or TUP Encumbers Is Transferred to Another Federal Agency 
or Out of Federal Ownership?

    The section explains that if there is a proposal to transfer the 
BLM land your grant or TUP encumbers to another Federal agency, BLM 
may, after reasonable notice to you, transfer administration of your 
grant or TUP, for the lands BLM formerly administered, to another 
Federal agency, unless doing so would diminish your rights. If BLM 
determines that your rights would be diminished by such a transfer, BLM 
can still transfer the land, but retain

[[Page 21049]]

administration of your grant or TUP under existing terms and 
conditions.
    It also explains that if there is a proposal to transfer the BLM 
land your grant or TUP encumbers out of Federal ownership, BLM may, 
after reasonable notice to you and in conformance with existing 
policies and procedures, do one of the following three things:
    (A) Transfer the land subject to your grant or TUP. In this case, 
administration of your grant or TUP, for the lands BLM formerly 
administered, is transferred to the new owner of the land;
    (B) Transfer the land, but BLM retains administration of your grant 
or TUP; or
    (C) Reserve to the United States the land the grant or TUP 
encumbers, and BLM retains administration of your grant or TUP.
    This section also explains that BLM or the new land owner may 
negotiate new grant or TUP terms and conditions with you.
    This section was proposed as section 2886.16, which cross-
referenced proposed section 2807.14 (now final section 2807.15). In the 
final rule we took the revised language from final section 2807.15 and 
put it in this section, rather than cross-referencing it. We removed 
the second sentence of the proposed section, which stated the section 
also applied to TUPs, and instead inserted references to TUPs at 
appropriate places in the text. We also added ``BLM'' and ``for the 
lands BLM formerly administered'' in several places to make clear that 
this section applies only to lands under BLM's jurisdiction. Because 30 
U.S.C. 185(c)(2) provides that ``Each agency head shall administer and 
enforce the provisions of this section, appropriate regulations, and 
the terms and conditions of rights-of-way or permits insofar as they 
involve Federal lands under the agency head's jurisdiction,'' BLM 
believes that it can address only lands under its jurisdiction in this 
section.
    When BLM-administered land encumbered by a grant or TUP is proposed 
for transfer out of Federal ownership, BLM will consider the comments 
and input of the grant or TUP holder in determining which of the three 
options discussed above we will take. Holder input is especially 
important when only part of the BLM-administered land in a grant or TUP 
is proposed for transfer, because BLM will want to avoid unnecessary 
disruption of the holder's operations, particularly when a major 
pipeline is involved. If significant disruption of the holder's 
operations would result from transfer of a portion of the BLM lands out 
of Federal ownership, reservation (non-transfer) of the lands included 
in the grant could be the most desirable option.
    See the discussion of final section 2807.15 for an explanation of 
the other changes to the final rule and responses to public comments. 
Please also note that the discussion of considering extending the term 
of an existing grant to that of a perpetual grant before transferring 
the land does not apply to grants made under this part. The MLA limits 
grants BLM issues under this part to 30-year terms.

Section 2886.16 Under What Conditions May BLM Order an Immediate 
Temporary Suspension of My Activities?

    We have restructured proposed sections 2886.17 and 2886.18 to 
create final sections 2886.16, 2886.17, and 2886.18. These sections 
contain the provisions on suspension or termination of grants and TUPs. 
We reorganized them to be more clear and to be as consistent as 
possible with the comparable provisions of part 2800.
    Final section 2886.16 explains that, subject to section 2886.11, 
BLM can order an immediate temporary suspension of grant or TUP 
activities within the right-of-way or TUP area to protect public health 
or safety or the environment. In contrast to section 506 of FLPMA, 43 
U.S.C. 1766, and final section 2807.16(a) of this rule, BLM's 
determination that you have violated the terms and conditions of your 
grant is not a necessary preliminary finding (see 30 U.S.C. 185(o)). 
BLM can require you to stop your activities before holding an 
administrative proceeding on the matter and may order immediate 
remedial action. We added ``subject to Sec.  2886.11'' to paragraph (a) 
of this section to make it clear that the head of the agency having 
administrative jurisdiction over the Federal lands involved will 
regulate your grant or TUP unless another agreement is reached. 
Therefore, the other Federal agency will act under 30 U.S.C. 185(o) 
unless there is agreement that BLM will administer the grant. We made 
the same addition to sections 2886.17 and 2886.19 of this part.
    BLM may issue the immediate temporary suspension order orally or in 
writing to you, your contractor, or subcontractor, or to any 
representative, agent, or employee representing you or conducting the 
activity. BLM may take this action whether or not any action is being 
or has been taken by other Federal or state agencies. When you receive 
the order, you must stop the activity immediately. BLM will, as soon as 
practical, confirm an oral order by sending or hand delivering to you 
or your agent at your address a written suspension order explaining the 
reasons for it.
    You may file a written request for permission to resume activities 
at any time after BLM issues the order giving the facts supporting your 
request and the reason(s) you believe that BLM should lift the order. 
BLM must grant or deny your request within 5 business days after 
receiving it. If BLM does not respond within 5 business days, BLM has 
denied your request. You may appeal the denial under section 2881.10 of 
this part.
    The immediate temporary suspension order is effective until you 
receive BLM's written notice to proceed with your activities. Any stay 
of BLM's order is addressed by final section 2881.10.
    This final section replaces proposed section 2886.18(a). We also 
added final paragraph (c) to this section. It discusses how you may 
file a request to resume and how BLM will respond. The provisions of 
this paragraph are in previous sections 2883.5(e) and (f). We 
inadvertently omitted them from the proposed rule.
    Several commenters said that the regulations should give industry 
the opportunity to ``correct the endangerment'' before suspending or 
terminating activities under the grant. This section provides that BLM 
can order an immediate temporary suspension of activities within the 
right-of-way or TUP area when it believes it is necessary ``to protect 
public health or safety or the environment.'' Section 185(o) of the MLA 
provides authority and direction for this section of the rule. It 
states:

    If the Secretary or agency head determines that an immediate 
temporary suspension of activities within a right-of-way or permit 
area is necessary to protect public health or safety or the 
environment, he may abate such activities prior to an administrative 
proceeding.

    This provision of the MLA establishes the standard that BLM uses to 
determine whether to issue an immediate temporary suspension order, 
namely that such an order is necessary ``to protect public health or 
safety or the environment.'' This provision is consistent with the 
Administrative Procedure Act at 5 U.S.C. 558. In those situations 
involving the suspension or termination of a grant or TUP, final 
section 2886.18 states that BLM will provide ``a reasonable opportunity 
to correct the violation'' before taking further action.
    Please see the discussion of final section 2807.16 for an 
explanation of the other changes to this final section.

[[Page 21050]]

Section 2886.17 Under What Conditions May BLM Suspend or Terminate My 
Grant or TUP?

    This section explains that subject to section 2886.11, BLM may 
suspend or terminate your grant if you do not comply with applicable 
laws and regulations or any terms, conditions, or stipulations of the 
grant (such as rent payments), or if you abandon the right-of-way. 
Subject to section 2886.11, BLM may also suspend or terminate your TUP 
if you do not comply with applicable laws and regulations or any terms, 
conditions, or stipulations of the TUP, or if you abandon the TUP area.
    This section also explains that a grant or TUP also terminates 
when:
    (A) The grant or TUP contains a term or condition that has been met 
that requires the grant or TUP to terminate;
    (B) BLM consents in writing to your request to terminate the grant 
or TUP; or
    (C) It is required by law to terminate.
    Your failure to use your right-of-way for its authorized purpose 
for any continuous 2-year period creates a presumption of abandonment. 
BLM will notify you in writing of this presumption. You may rebut the 
presumption of abandonment by proving that you used the right-of-way or 
that your failure to use the right-of-way was due to circumstances 
beyond your control, such as acts of God, war, or casualties not 
attributable to you.
    You may appeal a decision under this section under section 2881.10 
of this part.
    This final section replaces proposed sections 2886.17(a) and (c). 
Proposed section 2886.17(a) erroneously mixed terminology pertaining to 
``grants'' and ``temporary use permits'' which made the paragraph 
unclear and confusing. It also inadvertently omitted several provisions 
of previous sections 2883.6-1 and 2883.6-2. We added several provisions 
to the final rule to make it clearer and more consistent with the 
previous regulations and also to comply with the requirements of 
section 185(o) of the MLA.
    We also redrafted final paragraphs (a) and (b) to separately 
address when BLM may suspend or terminate a grant or a TUP for non-
compliance with applicable laws and regulations or any terms, 
conditions, or stipulations of the authorization, or for abandonment. 
These final paragraphs more accurately follow the previous rule and 
resolve the confusion created by proposed section 2886.17(a).
    We added paragraph (c) to specify that your grant or TUP would also 
terminate when it contains a term or condition that has been met that 
requires it to terminate, when BLM consents in writing to your request 
to terminate it, or when it is required by law to terminate. We did 
this to complete the section and to be consistent with final section 
2807.17. Please see the discussion of final section 2807.17 for an 
additional discussion of these provisions.
    We also added final paragraph (d) to explain that your failure to 
use your right-of-way for its authorized purpose for any continuous 2-
year period creates a presumption of abandonment. This provision is in 
previous section 2883.6-1(b) and section 185(o)(3) of the MLA. We added 
it to be consistent with the MLA and the previous rule.
    Proposed section 2886.17(c) is now final section 2886.17(e). We 
reworded it to be consistent with final section 2807.17(d).
    Several commenters suggested that the regulations define 
``abandonment.'' The commenters said that facilities may be necessary 
for future enhanced oil recovery projects and that the grantee may have 
to wait until oil and gas prices go up. We did not add a definition of 
``abandonment'' to the final rule. The MLA does not define the term or 
describe specific circumstances that would constitute abandonment 
(other than stating at 30 U.S.C. 185(o)(3) that ``Deliberate failure of 
the holder to use the right-of-way for the purpose for which it was 
granted or renewed for any continuous two-year period shall constitute 
a rebuttable presumption of abandonment of the right-of-way''). We 
believe that it is appropriate for BLM and grant and TUP holders to 
rely on the normal meaning of the term and the statutory language in 
interpreting and applying the rule.

Section 2886.18 How Will I Know That BLM Intends To Suspend or 
Terminate My Grant or TUP?

    This section explains that when BLM determines that it will suspend 
or terminate your grant, it will send you a written notice of this 
determination. The determination will provide you a reasonable 
opportunity to correct the violation, start your use, or resume your 
use of the right-of-way, as appropriate. In the notice BLM will state 
the date by which you must correct the violation or start or resume use 
of the right-of-way. If you have not corrected the violation or started 
or resumed use of the right-of-way by the date specified in the notice, 
BLM will refer the matter to the Office of Hearings and Appeals (OHA). 
An administrative law judge (ALJ) in OHA will provide an appropriate 
administrative proceeding under 5 U.S.C. 554 and determine whether 
grounds for suspension or termination exist. BLM will suspend or 
terminate the grant if the ALJ determines that grounds exist for this 
action and that the suspension or termination is justified. Consistent 
with 30 U.S.C. 185(o), no administrative proceeding is required where 
the grant provides that it terminates on the occurrence of a fixed or 
agreed upon condition, event, or time.
    When we determine that we will suspend or terminate your TUP, we 
will send you a written notice of our determination and provide you a 
reasonable opportunity to correct the violation or start or resume use 
of the TUP area. The notice will also provide you information on how to 
file a written request for reconsideration.
    You may file a written request with the BLM office that issued the 
notice, asking for reconsideration of the determination there. BLM must 
receive this request within 10 business days after you receive the 
notice.
    BLM will provide you with a written decision within 20 business 
days after receiving your request for reconsideration. The decision 
will include a finding of fact made by the next higher level of 
authority in BLM than the person who made the initial suspension or 
termination determination. The decision will also inform you of whether 
BLM has suspended or terminated your TUP or cancelled the notice made 
under paragraph (b) of this section. If the decision is adverse to you, 
you may appeal it under section 2881.10 of these regulations.
    This section was proposed as sections 2886.17(b) and (c). These 
proposed paragraphs were not clear regarding which provisions applied 
to grants and which applied to TUPs. Therefore, in this final section 
we reworded the text and separated the provisions addressing grants 
(final section 2886.18(a)) from those addressing TUPs (final section 
2886.18(b)).
    In the final rule we moved proposed section 2886.18(b) to final 
sections 2886.18(a) and (a)(1), which are discussed below. We also 
moved proposed section 2886.17(b) to final sections 2886.18(b), (b)(1), 
and (b)(2), which are discussed above. Proposed section 2886.17(c) is 
now final section 2886.18(b)(3).
    In addition to editorial changes, we made a number of changes and 
additions to improve the clarity and completeness of the process 
description and to make it more consistent with previous sections 
2883.6-1(c), 2883.6-2(b), and (c), and the MLA.

[[Page 21051]]

    In the first sentence of paragraph (a) we added the phrase ``under 
Sec.  2886.17 of this subpart'' to indicate for which suspensions and 
terminations BLM will send a written notice. We also added the phrase 
``and provide you a reasonable opportunity to correct the violation, 
start your use, or resume your use of the right-of-way, as 
appropriate'' and the sentence ``In the notice BLM will state the date 
by which you must correct the violation or start or resume use of the 
right-of-way.'' Section 28(o)(1) of the MLA, 30 U.S.C. 185(o)(1), 
states that ``Abandonment of a right-of-way or noncompliance with any 
provision of this section may be grounds for suspension or termination 
of the right-of-way if (A) after due notice to the holder of the right-
of-way, (B) a reasonable opportunity to comply with this section, and * 
* *.'' We added the phrase and sentence to make the regulation 
consistent with the MLA and in response to comments (see discussion 
under section 2886.16 above).
    We added the phrase ``If you have not corrected the violation or 
started or resumed use of the right-of-way by the date specified in the 
notice'' to the first sentence of final section 2886.18(a)(1) to make 
clear when BLM will refer the matter to OHA. We also added a new 
sentence to the end of this paragraph stating that ``No administrative 
proceeding is required where the grant by its terms provides that it 
terminates on the occurrence of a fixed or agreed upon condition, 
event, or time.'' This is provided for at 30 U.S.C. 185(o)(1) and we 
added the new sentence to be consistent with the Act.
    In paragraph (b), we added the phrase ``and provide you a 
reasonable opportunity to correct the violation or start or resume use 
of the TUP area'' and the sentence ``The notice will also provide you 
information on how to file a written request for reconsideration.'' We 
added the phrase to be consistent with the MLA (see discussion 
regarding paragraph (a) above) and in response to comments (see 
discussion under section 2886.16 above). The sentence reflects 
longstanding BLM policy and practice and we added it to provide a more 
complete and accurate description of the process.

Section 2886.19 When My Grant or TUP Terminates, What Happens to Any 
Facilities on It?

    In the proposed rule, this section cross-referenced proposed 
section 2807.18. In the final rule we took the revised language from 
that section (final section 2807.19) and put it in this section, rather 
than cross-referencing it. We also made this section applicable to 
TUPs. Please see the discussion of final section 2807.19 for an 
explanation of the other changes to this section.

Subpart 2887--Amending, Assigning, or Renewing MLA Grants and TUPs

    Subpart 2887 contains provisions on amending, assigning, and 
renewing grants and TUPs.

Section 2887.10 When Must I Amend My Application, Seek An Amendment of 
My Grant or TUP, or Obtain a New Grant or TUP?

    This section explains that you must amend your application or seek 
an amendment of your grant or TUP when there is a proposed substantial 
deviation in location or use. The requirements to amend an application, 
grant, or TUP are the same as those for a new application, including 
paying processing and monitoring fees and rent according to sections 
2884.12, 2885.23, and 2885.19 of this part.
    This section also explains that any activity not authorized by your 
grant or TUP may subject you to prosecution under applicable law and to 
trespass charges under subpart 2888 of this part.
    Under this section if you hold a pipeline grant issued before 
November 16, 1973 (prior to the MLA amendment), and there is a proposed 
substantial deviation in location or use of the right-of-way, you must 
apply for a new right-of-way grant.
    BLM may ratify or confirm a grant that was issued before November 
16, 1973, if we can modify the grant to comply with the MLA and these 
regulations. BLM and you must jointly agree to any modification of a 
grant made under this paragraph. This provision is consistent with 30 
U.S.C. 185(t).
    This final rule is different from the proposal. In the proposed 
rule, paragraph (a) contained a cross-reference to proposed section 
2807.19. This final rule replaces that cross-reference with final 
paragraphs (a) and (b) and contains references to TUPs. Proposed 
section 2807.19 (final section 2807.20) does not address TUPs. The MLA 
does provide for TUPs, however, so we added references to them to this 
section. Since this section is based on final section 2807.20, please 
see the discussion of that section for other changes to the final rule.
    The last sentence of proposed paragraph (a) is now final paragraph 
(c). Proposed paragraphs (b) and (c) are now final paragraphs (d) and 
(e). We also changed the title of the section to more accurately 
reflect its contents. With the exception of other minor editorial 
changes, the remainder of this final rule is as it was proposed.

Section 2887.11 May I Assign My Grant or TUP?

    This section explains that with BLM's approval, you may assign, in 
whole or in part, any right or interest in a grant or TUP. In order to 
assign a grant or TUP, the proposed assignee must file an application 
with BLM and satisfy the same procedures and standards as for a new 
grant or TUP, including paying processing fees.
    The assignment application must also include:
    (A) Documentation that the assignor agrees to the assignment; and
    (B) A signed statement that the proposed assignee agrees to comply 
with and to be bound by the terms and conditions of the grant or TUP 
that is being assigned, and all applicable laws and regulations.
    BLM will not recognize an assignment until we approve it in 
writing. BLM will approve the assignment if doing so is in the public 
interest. BLM may modify the grant or TUP or add bonding and other 
requirements, including terms and conditions, to the grant or TUP when 
approving the assignment. If BLM approves the assignment, the benefits 
and liabilities of the grant or TUP apply to the new grant or TUP 
holder.
    The processing time and conditions for original applications, as 
described at section 2884.21 of this part, apply to processing 
assignment applications.
    The previous rule provided for the assignment of TUPs (see previous 
2881.1-2(e)). We inadvertently omitted reference to assigning TUPs in 
the proposed rule. Therefore, we added references to TUPs in the final 
rule.
    We modified proposed paragraph (c)(2) by replacing the phrase ``A 
stipulation that * * *'' with ``A signed statement that * * *.'' We 
made this change so as not to confuse the signed statement with 
stipulations that we may attach to an approved grant or TUP.
    We also changed proposed paragraph (d) to add provisions that ``BLM 
will approve the assignment if doing so is in the public interest'' and 
``If BLM approves the assignment, the benefits and liabilities of the 
grant or TUP apply to the new grant or TUP holder.'' We added this 
first sentence to explain that BLM may deny an assignment application 
if it determines that approval of the assignment would not be in the 
public interest. Previous section 2882.3(e) provides that ``An 
application for a right-of-way grant or temporary use permit * * * may 
be denied if the authorized officer determines that the right-of-way or 
use

[[Page 21052]]

applied for would be inconsistent with the purpose to which the Federal 
lands involved have been committed, or would otherwise not be in the 
public interest.'' Previous section 2881.1-1(g) makes an assignee bound 
by the terms and conditions of the grant and the assignee must meet all 
of the requirements of the original grantee. Therefore, the public 
interest requirement in this section is consistent with previous 
regulations. We added the second sentence to make clear that any 
modifications to the grant or TUP during the assignment process (e.g., 
modified or additional terms and conditions) apply to the assignee, a 
fact implicit in section 2887.11(c)(2).
    In final paragraph (e) we replaced the cross-reference to section 
2804.19(c) with a cross reference to section 2884.21, because we 
incorporated the customer service standard referenced into the final 
part 2880 rule, rather than by cross-reference to part 2800, as we 
proposed. Except for the changes discussed above and minor editorial 
changes, the final section remains as proposed.
    We received many comments on various aspects of assignments that 
could apply to the 2800 regulations and these regulations. Please see 
the discussion of final section 2807.21 for descriptions of the 
comments on assignments and responses to them.

Section 2887.12 How Do I Renew My Grant?

    This section explains that you must apply to BLM to renew your 
grant at least 120 calendar days before your grant expires. BLM will 
renew your grant if you are operating the pipeline and maintaining it 
in accordance with the grant, these regulations, and the Act. If your 
grant has expired or terminated, you must apply for a new grant under 
subpart 2884 of this part.
    BLM may modify the terms and conditions of the grant at the time of 
renewal, and you must pay the processing fees in advance.
    The time and conditions for processing applications for rights-of-
way, as described at section 2884.21 of this part, apply to 
applications for renewals.
    Under final paragraph (a) you must submit to BLM an application for 
renewal at least 120 calendar days prior to grant termination. We added 
this time requirement to the final rule because we require at least 120 
calendar days to process an application for renewal and approve it 
before the grant expires. The same 120-day standard was proposed in 
section 2807.22(b) and is in final section 2807.22(a) and (b).
    We also revised the title of the section from ``May I renew my 
grant?'' to ``How do I renew my grant?'' to more accurately describe 
its content.
    Except for the changes discussed above and minor editorial changes, 
the final section remains as proposed.
    Several commenters said that the renewal of an existing right-of-
way should be a simple request in writing. Please see the discussion of 
final section 2807.22 for the response to this comment.
    A few commenters asked if BLM can deny a grant renewal request if 
the current and continued use, operation, and maintenance of an 
existing facility is causing environmental effects that are 
inconsistent with a current land use and resource management plan. A 
few commenters also asked if modifications of the terms and conditions 
of a grant, at the time of renewal, could include provisions requiring 
the relocation of segments of the facility, if necessary, to comply 
with then-existing laws, regulations, and resource management plans. 
Final section 2887.12(a) states that ``BLM will renew the grant if the 
pipeline is being operated and maintained in accordance with the grant, 
these regulations, and the Act.'' Final section 2885.11(b) states that 
``During construction, operation, maintenance and termination of the 
project you must: (1) To the extent practicable, comply with all 
existing and subsequently enacted, issued, or amended Federal laws and 
regulations * * * applicable to the authorized use.'' We may modify the 
terms and conditions of the grant at the time of renewal to require the 
grant holder to bring its operations and facilities into compliance 
with the laws and regulations mentioned in section 2885.11(b). The 
modification could include provisions requiring the relocation of 
segments of the facility, if necessary, to comply with then existing 
laws and regulations. If the holder does not accept such modified terms 
and conditions, BLM may deny the renewal application. Inconsistencies 
with current resource management plans are addressed at 43 CFR 1610.5-
3.
    One commenter stated that under existing regulations TAPS receives 
unique treatment since it is permitted to make its cost recovery 
payments 60 days after the close of each quarter, rather than in 
advance. The commenter said that to avoid confusion, the final 
regulations should make it explicit that the quarterly reimbursement 
schedule applies to renewal costs as well. The final rule states at 
paragraph (b) ``* * * you must pay the processing fees (see Sec.  
2884.12 of this part) in advance.'' Final section 2884.12(f) provides 
for payments for applications related to TAPS to be made within 60 days 
after the close of each quarter. We believe that the cross-reference to 
section 2884.12 of this part is sufficient to make clear that the 
payment provisions of section 2884.12(f) apply to renewal applications.
    A few commenters asked what would happen if the grant holder did 
not request a renewal in time for the agency to fully process the 
application prior to the expiration date of the current authorization. 
The final rule states that you must apply to BLM to renew a grant at 
least 120 calendar days before the grant expires. BLM will not accept a 
renewal application if we receive it less than120 calendar days before 
the grant expires. In these circumstances, the grant holder should 
instead file an application for a new authorization under subpart 2884. 
If BLM is able to complete processing such an application for a new 
authorization before the original grant expires, BLM may, at its 
discretion, renew the original grant.

Subpart 2888--Trespass

    This subpart contains provisions pertaining to trespass on Federal 
lands and:
    (A) Defines trespass;
    (B) Cross-references trespass provisions in the part 2800 
regulations that are applicable to the part 2880 regulations; and
    (C) Explains that other Federal agencies address trespass on non-
BLM lands under their respective laws and regulations.

Section 2888.10 What Is Trespass?

    This section explains that:
    (A) Trespass is using, occupying, or developing the public lands or 
their resources without a required authorization or in a way that is 
beyond the scope and terms and conditions of your authorization. 
Trespass is a prohibited act;
    (B) Trespass includes acts or omissions causing unnecessary or 
undue degradation to the public lands or their resources. In 
determining whether such degradation is occurring, BLM may consider the 
effects of the activity on resources and land uses outside the area of 
the activity;
    (C) BLM will administer trespass actions for grants and TUPs as set 
forth in sections 2808.10(c) and 2808.11 of this chapter; and
    (D) Other Federal agencies address trespass on non-BLM lands under 
their respective laws and regulations.

[[Page 21053]]

    This proposed section included only cross-references to proposed 
subpart 2808 and part 2800 of the rule. In the final rule, we replace 
those general cross-references with an explanation of what trespass is, 
some additional information about trespass on BLM and other agency 
lands, and more specific cross-references to the final trespass rules 
in part 2800. We also added language to this section explaining that 
the rent exemption provisions of the part 2800 regulations do not apply 
to grants issued under this part. This section does not impose 
additional requirements to the rule as it was proposed, but is more 
specific and informative.

Section 2888.11 May I Receive a Grant If I Am or Have Been in Trespass?

    This section is new to this part of the final rule. It was proposed 
as section 2808.12 and made applicable in the proposed rule to this 
part via a cross-reference.
    This section explains that until you satisfy liability for a 
trespass, BLM will not process any applications you have pending for 
any activity on BLM-administered lands. A history of trespass will not 
necessarily disqualify you from receiving a grant. In order to correct 
a trespass, you must apply under the procedures described at subpart 
2884. BLM will process your application as if it were a new use. Prior 
unauthorized use does not create a preference for receiving a grant.
    Please see the preamble to section 2808.12 for a discussion of the 
changes to this section and for responses to public comment.
    This final rule also corrects cross-references to this rule in 
existing regulations in sections 2812.1-3, 2920.6, 9239.7-1, and 
9262.1.

III. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

    In accordance with the criteria in Executive Order 12866, this rule 
is not a significant regulatory action. The Office of Management and 
Budget will make the final determination as to its significance under 
Executive Order 12866.
    a. This rule will not have an annual economic effect of $100 
million or more or adversely affect in a material way an economic 
sector, productivity, jobs, competition, the environment, public health 
or safety, other units of government, or communities. A cost-benefit 
and economic analysis has not been prepared.
    Processing and monitoring fee increases. The rule could potentially 
increase processing and monitoring revenues to BLM and conversely, 
costs to applicants and grant holders, by an estimated maximum of $9.0 
million each year. This number represents the largest impact possible 
under the revised rules. To arrive at the $9.0 million, we assume that 
all right-of-way actions would be assessed the maximum fixed processing 
fee and the maximum fixed monitoring fee. The following shows the 
maximum possible annual economic effect of increasing the right-of-way 
cost recovery processing and monitoring fees.
Assumptions
    (1) The average number of FLPMA and MLA right-of-way applications 
processed over a four year period in FY 2001-2004 for amended, 
assigned, new, and renewed grants represents the demand for right-of-
way services for a typical year and is appropriate for use in this 
calculation.
    (2) The number of all types of right-of-way applications that BLM 
processed can be accurately derived from BLM's automated lands records 
data bases (LR 2000).
    (3) The number of applications that BLM rejects each year is less 
than 1 percent and will not affect these calculations significantly.
    (4) The regulations will not affect the processing and monitoring 
costs associated with the full reasonable (FLPMA) and full actual (MLA) 
cost categories because applicants currently pay these amounts under 
existing rules.
    (5) To determine whether the rule has an economic effect of $100 
million or more annually, it is appropriate to use the ``worst case'' 
scenario, that is, using the most expensive fixed fee application 
processing and monitoring categories to make the calculations 
(Processing Category 4 and Monitoring Category 4).
    (6) The rate of inflation in the economic indicator used will not 
significantly increase over the next 5 years. It is not likely that 
there will be a period of deflation.
Calculations
    The average number of FLPMA right-of-way applications for new or 
amended grants and assignments and renewals processed in FY 2001-2004 
(2,855) multiplied by (the final rule's fees for FLPMA Processing 
Category 4 ($923) plus the final rule's fees for FLPMA Monitoring 
Category 4 ($923)):

($923 + $923 ) x (2,855) = $5,270,330

    The average number of MLA right-of-way applications for new or 
amended grants and assignments and renewals processed in FY 2001-2004 
(2,624) multiplied by the final rule's fees for MLA Processing Category 
4 ($923) plus the final rule's fees for MLA Monitoring Category 4 
($923):

($923 + $923) x (2,624) = $4,843,904

    The maximum total annual collection of FLPMA right-of-way cost 
recovery processing and monitoring fees for new or amended grants and 
assignments and renewals ($5,270,330) plus the maximum total annual 
collection of MLA right-of-way cost recovery processing and monitoring 
fees for new or amended grants and assignments and renewals 
($4,843,904) equals the maximum total annual collection of right-of-way 
cost recovery processing and monitoring fees ($10,114,234).
    $5,270,330 + $4,843,904 = $10,114,234 (Maximum total annual 
collection of FLPMA and MLA right-of-way cost recovery processing and 
monitoring fees).
    Average FY 2001-2004 FLPMA and MLA processing and monitoring fees 
collected = $1,086,556.
    $10,114,234 (Maximum total annual collection of FLPMA and MLA 
processing and monitoring fees) minus (-) $1,086,556 (Average of 2001-
2004 FLPMA and MLA processing and monitoring fees collected) = 
$9,027,678) (or, rounded down to $9.0 million) (maximum annual impact 
of fee increases).
    The final processing fees are generally the fees in the 1999 
proposed rule adjusted for increases in the IPD-GDP between the date of 
the proposed rule and now. However, in the final rule we made four 
important additional adjustments in the fee schedule which affect the 
final amounts and number of categories for both the processing and 
monitoring schedules.
    The first adjustment is that in the final rule we define each 
processing and monitoring category by only the estimated number of 
Federal work hours necessary to process or monitor the application/
grant rather than a combination of criteria (number of hours, 
availability of data, number of field examinations, and need for land 
use plan amendment) which in the proposed rule were used to define all 
the categories (except the Master Agreement category). In doing so, it 
was necessary to determine a ``mean'' or average hour for each 
category, and then apply the appropriate hourly rate to the mean hour 
in each FLPMA or MLA category. This ensures that each category is cost-
weighted the same.
    The second adjustment establishes a new category (Category 1) for 
any right-of-way action that is estimated to take more than 1 hour, but 
eight hours or

[[Page 21054]]

less, to process or monitor. Under the final rule no fee is assessed 
for any action that takes 1 hour or less to process. We then adjusted 
new Category 2 to include actions that are estimated to take a maximum 
of 24 hours but greater than eight hours. New Categories 3 (> 24 hours 
<= 36 hours) and 4 (> 36 hours <= 50 hours) are the same as proposed 
Categories II and III.
    The third adjustment recognizes that for categories 1 through 4, 
processing and monitoring fees under FLPMA are identical to the 
analogous category under the MLA. For example, a category 2 processing 
fee under FLPMA is identical to a category 2 processing fee under the 
MLA. A category 3 monitoring fee under FLPMA is identical to a category 
3 monitoring fee under the MLA.
    The preamble discussion of section 2804.14 explains in detail how 
the six ``reasonableness'' factors at section 304(b) of FLPMA apply to 
right-of-way projects under FLPMA. As explained there, factors such as 
public benefit and public service could potentially cause BLM to charge 
processing or monitoring fees for a FLPMA right-of-way at less than 
actual costs. We note, however, that we found in 1986 that for non-
major projects, there is little opportunity for public benefits or 
public services because of the local nature of such projects (see the 
preamble to the proposed rule at 51 FR 26840, July 25, 1986). We note 
further that in practice any small benefit or service to the public 
provided by the processing of a fixed fee application or monitoring a 
fixed fee project was outweighed by the monetary value to the applicant 
of the right or privilege sought by the applicant.
    Again in 1999, we noted: ``Actual costs, less management overhead, 
forms the amount to which BLM applies the reasonability factors listed 
in section 304(b) of FLPMA. For all but complex projects * * * the 
reasonability factors have little or no effect on actual costs'' (see 
64 FR 32110 (June 15, 1999)).
    Our decision to equate FLPMA and MLA fees for categories 1 through 
4 was aided by a 1996 Solicitor's Opinion on cost recovery (M-36987), 
entitled ``BLM's Authority to Recover Costs of Minerals Document 
Processing.'' That opinion clarified that ``[a] factor such as `the 
monetary value of the rights or privileges sought by the applicant' 
could, when that value is greater than BLM's processing costs, be 
weighed as an enhancing factor, offsetting a diminution due to another 
factor such as `the public service provided' '' (see M-36987 at 36). 
Major categories 5 and 6 are more likely to reflect differences in 
FLPMA and MLA fees.
    The fourth adjustment applies the mean per hour rate of $21.46 to 
the mean hour of each category. The basis for this $21.46 rate is data 
assembled for category 4 projects (category III in the proposed rule). 
Category 4 projects are those requiring more than 36 hours to process 
(and less than or equal to 50 hours). The mean hour for category 4 is 
43 (which is equal to (50 - 36)/2 + 36). Multiplying $21.46 by 43 gives 
the fee for category 4 ($923). Multiplying $21.46 by the mean hour for 
categories 1 through 3 likewise gives the fee for these categories.
    As stated earlier, BLM conducted field studies in 1982 and 1983 
which measured the costs of processing right-of-way applications and 
monitoring grants (see also 64 FR 32107 (June 15, 1999)). Between 
November 12, 1982, and July 25, 1986, BLM field offices kept and 
reported actual time and cost on some 500 right-of-way projects in non-
major categories (see 51 FR 26840 (July 25, 1986)). In 1986, the agency 
conducted an extensive field study of processing and monitoring costs, 
which generally verified the processing costs developed from the 
earlier studies (see 64 FR 32108).
    When we set the MLA processing fees in 1985 (see 50 FR 1308, Jan. 
10, 1985), we set fixed MLA processing and monitoring fees at our 
estimated actual cost, as required by section 28 of the MLA. The 
preamble to the rule proposing MLA cost recovery fees in 1983 makes 
plain that the fees were developed by a BLM task force consisting of 
employees with expertise in the processing and monitoring of right-of-
way cases, budgeting, and cost accounting. The task force analyzed data 
from a representative sample of actual right-of-way cases and examined 
several demographic variables which might influence cost, including 
location and area of the right-of-way or temporary use area. Fees were 
based on the estimated work effort required to accomplish the 
processing actions, including personnel costs, fringe benefits, vehicle 
usage, and indirect costs (see 48 FR 48478, 48479 (Oct. 19, 1983) and 
64 FR 32108 (June 15, 1999)).
    In 1995, BLM program experts analyzed a cross section of our right-
of-way cases. This analysis showed that the cost of processing right-
of-way cases, including labor costs, had increased since 1986 at 
approximately the same rate as the Implicit Price Deflator--Gross 
Domestic Product (see 64 FR 32109 (June 15, 1999)).
    To verify the appropriateness of the above fees, we offer the 
following brief analysis:

    The $21.46 mean per hour rate for processing and monitoring fees 
would approximately equal the hourly wage in 2005 for an employee at 
the GS 9, Step 3 level.
    These rates compare favorably with the 1987 processing fees 
which, if adjusted to a mean per hour rate, would average $11 per 
mean hour or an hourly wage earned by an employee in 1987 (when the 
existing rule was published) at the GS 9, Step 2 level (according to 
the 1987 General Schedule).
    Most right-of-way actions are processed and monitored by 
employees who are at the GS 9 to GS 11 levels and who will earn 
between $20.02 (GS 9/1) and $31.48 (GS 11/10) per hour in 2005.

    Under the final rule, FLPMA and MLA fees are identical for fixed 
fee categories. Because of the change in category definitions, we 
expect that 70 percent of the new FLPMA applications will be assessed 
either a Category 3 ($644) or Category 4 ($923) processing fee. Under 
the 1987 FLPMA processing fee schedule, 60 percent of the new 
applications were assessed a Category II ($300) fee. For MLA 
applications, we expect that 55 percent of the new applications will be 
assessed either a Category 3 ($644) or Category 4 ($923) processing 
fee. Under the 1987 MLA fee schedule, 63 percent of the applications 
were assessed a Category II ($275 ) fee. As a result, BLM expects to 
collect a minimum of $344 ($644 - $300 = $344) in increased processing 
fees per application for the majority of processing actions under the 
new cost recovery fee schedules. To put these figures in perspective, 
the 1995 IG audit found for 1993 that BLM was collecting, on average, 
$280 to process a typical right-of-way application, while its costs 
were $493 (or a deficit of $213 per application for processing fees). 
When adjusted for inflation (the change in IPD-GDP from 1993 to 2005 is 
25 percent), the BLM must collect, on average, approximately $616 per 
application (an additional $336 above the current fee average 
identified by the IG) to process a typical right-of-way application. We 
believe that the adjustments made in the FLPMA and MLA processing fee 
schedules, as described above, will allow BLM to recover the 
appropriate costs associated with processing all right-of-way 
applications in 2005 and beyond.
    Under the 1987 rules BLM determined the monitoring category based 
on the processing cost categories. For example, a Category I 
application for processing fees would automatically be considered a 
Category I application for monitoring fees. This technique for

[[Page 21055]]

charging monitoring fees has proven inadequate. BLM collected nearly 
$1.2 million in minor category processing and monitoring fees in FY 
2004. However, less than $222,000 of the total fees (or an average $65 
per grant) were for monitoring purposes. In most cases, the same 
employees which process the application, also monitor grant activities, 
so the hourly cost is the same. The primary variable between processing 
activities and monitoring activities, which could vary widely, is the 
number of hours required to accomplish each activity. For this reason, 
in the final rule, BLM will have the ability to determine monitoring 
categories separately from processing categories, and as a result, 
should have adequate resources to properly conduct these activities. 
The economic impact of this change will be minimal since increases in 
one fee category will tend to cancel out decreases in another. That is 
because we believe that it is just as likely that an application will 
fall into a higher category under the new rule as it is that they will 
fall into a lower category.
    However, we estimate the total maximum economic impact from the new 
monitoring fees will be $4.8 million. This figure is calculated by 
multiplying the average number of FLPMA (2,855) and MLA (2,624) right-
of-way actions for FY 2001, FY 2002, FY 2003 and FY 2004 (5,479 total 
applications) by the maximum monitoring fee in the final rule ($923) 
(5,479 multiplied by $923), or $5,057,117, less $221,910 (the total 
monitoring fees collected in FY 2004 for the fixed fee categories) or 
$4.8 million (5,057,117 minus $221,910 = $4,835,207 or $4.8 million).
    Clarifications to communication site right-of-way policies. The 
revisions to the communication site right-of-way policies will have no 
direct economic effects. They clarify how BLM assesses rents for 
communication site rights-of-way, based on regulatory changes made in 
November 1995. Communication site rights-of-way fall within one of 
three major categories of communication uses on public lands:

    (1) Broadcast, including television, FM radio, rebroadcast 
devices, and cable television;
    (2) Non-broadcast, including commercial mobile radio service, 
cellular telephone service, private mobile communications, common 
carrier and microwave communications; and
    (3) Other, including small, unobtrusive, low-power uses serving 
small numbers of customers.

    Rents correlate to the population of the community served or to the 
community where the facility is located, or both. The communication 
site rent schedule became effective in late 1995. This final rule 
contains revisions that address the most frequently asked questions 
about applying the rent schedule to various situations and clarifies 
certain policies that were ambiguous. This final rule does not change 
the rent amounts except by the amount of the yearly change in the CPI-
U, which is consistent with existing rules and policy.
    REA-financed v. Eligible for REA financing. As mentioned earlier, 
the Omnibus Parks and Public Lands Management Act of 1996 amended 
section 504(g) of FLPMA. The effect of the amendment is to increase the 
number of rights-of-way that may qualify for an exemption from paying 
rent. Prior to 1996, Section 504(g) specified that the holder of a 
right-of-way pay the fair market value for the use authorized by the 
grant, but specifically exempted from rent rights-of-way for electric 
or telephone facilities ``financed'' under the Rural Electrification 
Act of 1936, as amended (REA). The 1996 amendment replaced the phrase 
``financed pursuant to the Rural Electrification Act of 1936, as 
amended,'' with ``eligible for financing pursuant to the Rural 
Electrification Act of 1936, as amended, determined without regard to 
any application requirement under that Act.'' This change allows 
rights-of-way for electric or telephone facilities that are ``eligible 
for financing'' under the REA to receive an exemption from rent 
payments. The final rule is consistent with the statute.
    The REA exemption is only for electric or telephone facilities that 
provide service to rural areas. BLM exempts rent for electric or 
telephone facilities when the Rural Utility Service (at the request of 
the applicant/holder) provides the necessary documentation that the 
facility is being financed with loans pursuant to the REA, or is 
eligible for financing under that statute. Loans are only provided for 
electric and telephone facilities that serve rural areas, as those 
terms are defined by REA.
    Since the expanded REA exemption is new to BLM regulations and 
since the request for rent exemption must be initiated by the grant 
holder, it is impossible to predict with any certainty the actual 
economic impact of this rule change. However, the potential loss of 
rental receipts due to the REA exemption can be estimated as follows:

    The average annual rent received in 2004 per right-of-way grant 
was $249 ($12,005,260 (total rental income) divided by 48,190 (total 
number of grants paying rent) = $249).
    Of the 48,190 grants paying rent, 10,760 are grants for electric 
transmission, telephone, or fiber optic facilities which are not 
financed by REA loans, but which might be eligible for financing.
    Currently, 7,278 electric and telephone facilities are not being 
assessed rent.
    If all grants for electric and telephone facilities that now pay 
rent (10,760), become rent exempt, the loss of rental revenue would 
be approximately $2,679,240 ($249 (average annual rent per grant) X 
10,760 (number of existing electric and telephone facilities now 
paying rent)).

    In summary, $2.7 million of annual rental receipts could be lost if 
all currently authorized telephone and electric lines now paying rent 
were to become rent exempt. In a ``worst case'' scenario, where all 
current rental receipts of $12.0 million were to be lost, this rule 
will not have an annual economic effect of $100 million and the 
economic impact would not be significant, even when combined with the 
other changes the rule makes.
    b. This rule will not create serious inconsistencies or otherwise 
interfere with other agencies' actions. BLM has worked closely with the 
Forest Service in assuring the maximum consistency possible between the 
policies of the two agencies with respect to managing communication 
site rights-of-way. BLM and the Forest Service have several working 
groups examining various aspects of their right-of-way programs, 
including ensuring consistency of regulations and policies to the 
extent possible. In fact, the Forest Service plans to publish cost 
recovery regulations similar to BLM's.
    c. This rule will not materially alter the budgetary impact of 
entitlements, grants, user fees, loan programs, or the rights and 
obligations of their recipients. This rule does increase processing and 
monitoring fees, but only in amounts necessary to ensure that the 
Federal government receives fees to pay for the reasonable or actual 
costs of processing applications and monitoring grants consistent with 
FLPMA and the MLA. The increases in processing and monitoring fees will 
not be retroactive, but they will apply to existing grant holders who 
apply for new authorizations under the regulations.
    Under the final rule, Federal agencies and their instrumentalities 
are no longer automatically exempt from paying processing and 
monitoring costs. However, these agencies may still benefit from the 
``reasonableness factors'' listed in section 304(b) of FLPMA. Hardship 
is one such factor. Removing the automatic exemption would not affect 
any agency's ability or eligibility to benefit from these factors.

[[Page 21056]]

    d. This rule will not raise novel legal or policy issues. Section 
304 of FLPMA allows the Secretary of the Interior to ``establish 
reasonable filing and service fees and reasonable charges, and 
commissions with respect to applications and other documents relating 
to the public lands * * *'' and to ``require a deposit of any payments 
intended to reimburse the United States for reasonable costs with 
respect to applications and other documents relating to such lands.'' 
The reasonable costs include the costs of special studies, 
environmental analyses, and the monitoring of construction, operation, 
maintenance, and termination of any authorized facility * * *'' Section 
28(l) of the Mineral Leasing Act of 1920, as amended, requires 
applicants for oil and gas pipeline rights-of-way to reimburse the 
United States for the administrative and other costs, i.e., actual 
costs, for processing the application and for monitoring activities 
under their grants. BLM currently collects these fees.
    Other regulatory revisions clarify existing right-of-way 
regulations in determining rents for communication site rights-of-way 
and implement a statutory change relating to rent exemptions for 
facilities that are eligible for REA financing. These regulations also 
add a provision requiring that grant holders who use hazardous 
materials in the operation of their grant provide bonding to cover 
liability for damages or injuries resulting from releases or discharges 
of hazardous materials. BLM has always had the authority to require 
this type of bonding and adding this provision makes explicit what has 
always been implicit in our regulations.

Regulatory Flexibility Act

    This rule will not have a significant economic effect on a 
substantial number of small entities as defined under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.). A Regulatory Flexibility 
Analysis is not required. Accordingly, a Small Entity Compliance Guide 
is not required. The BLM has estimated that approximately 18 percent of 
all applicants and grantees (approximately 5 percent of MLA applicants 
and grantees and approximately 23 percent of FLPMA applicants and 
grantees) may qualify as small entities. Of these applicants and 
grantees which may qualify as small entities, we estimate that less 
than 5 percent will be adversely affected by the rule. Although the 
processing and monitoring fee changes vary widely in percentage terms, 
in absolute dollar amounts, they range from a minus $77 to a plus $723, 
with the largest increases occurring in monitoring fees for MLA 
applications. Processing and monitoring fees for fixed fee categories 
are one-time fees and when compared to the average cost of 
constructing, operating, and maintaining a right-of-way, are not 
significant.
    BLM does not officially track right-of-way costs, but grant holders 
have estimated that pipeline facilities cost between $300,000 (12'' 
pipeline) to $1.5 million per mile (36'' pipeline); rocked logging 
roads cost between $40,000/mile for a ridge top road to $150,000/mile 
for a full bench road or an average of $70,000 /mile for a road through 
moderate terrain; electric distribution and transmission lines cost 
between $24,000/mile (24kV distribution line) to $1 million/mile (500kV 
transmission line); wind turbines average $1 million per installed 
megawatt; and cellular communication facilities can vary between 
$250,000 and $500,000. (These estimated costs come from informal 
contacts BLM made with several current grant holders in December 2003.) 
When compared to the cost of constructing a right-of-way, the fee 
increases this final rule makes are relatively small.
    Applicants of most large utility projects will pay either 
reasonable or actual processing and monitoring costs under the final 
rule, as they currently do, and would not be significantly impacted by 
the final rule. Many other facilities such as oil and gas gathering 
pipelines, domestic water pipelines, buried telephone lines, and all-
weather roads can be installed for less than $25,000 per mile. BLM can 
process most of these types of applications, depending upon the length 
and total surface disturbance, in less than 36 hours. This correlates 
to a fee of $644 under the final rule for both FLPMA and MLA 
applications. Under the current fee schedules, an applicant might only 
pay $300 (FLPMA) or $275 (MLA) for the same application, primarily due 
to the category definitions of the new fee schedules compared to the 
current fee schedules.
    Small entities are more likely to apply for rights-of-way having 
the lowest fixed fees (Categories 1 through 3) than they are for 
Categories 4 through 6, which have the highest fees. The fee increases 
in Categories 1 through 3, as well as the differences between fee 
categories, are both relatively small. When compared to the overall 
cost of constructing rights-of-ways under this final rule, the 
increases in the fees will not significantly impact even small 
entities.
    Based on a comparison with the size characteristics for each 
industry code from the Census of Business in 1997, we estimated the 
number of firms which are eligible for Small Business Administration 
(SBA) programs and likely to hold right-of-way grants. Based on these 
comparisons across industry codes, we estimate that about 5.3% of 
existing MLA grantees may be eligible for SBA programs and about 22.9% 
of FLPMA grantees may be eligible for SBA programs. Whether they choose 
to join the SBA programs is strictly an individual firm's decision as 
is whether or not a small business applies for a right-of-way grant 
under these regulations.
    The proportion of grantees eligible for SBA programs shows that 
there is an opportunity for small businesses in BLM's right-of-way 
program. However, the burden of increased cost recovery fees will not 
have a significant economic impact on a substantial number of small 
entities or fall disproportionately on small businesses.
    Moreover, any entity which believes that it might be adversely 
affected by the fee schedule may qualify for hardship consideration. A 
review of the right-of-way data base indicates that of the 
approximately 13,586 applications for grants, amended grants, 
assignments, and renewals in FY 2004, BLM exempted 271 applicants from 
processing and monitoring fees and granted reductions or waivers from 
processing and monitoring costs to 39 applicants for various reasons, 
including undue financial hardship (see existing 43 CFR 2808.5 and 
final section 2804.21).

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more. See the Executive Order 12866 discussion above.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, state, or local government 
agencies, or geographic regions. As discussed above, when compared to 
the cost of constructing a right-of-way, the fee increases this final 
rule makes are relatively small and therefore should not cause any 
major increase in costs or prices. In addition, any applicant that 
believes that the fee increases will cause them difficulty may benefit 
from the criteria set forth at section 304(b) of FLPMA, especially the 
hardship criteria. The rule will affect Federal agencies by eliminating 
the automatic exemption from cost recovery for Federal agencies. 
Federal agencies, however, are able to

[[Page 21057]]

benefit from the section 304(b) criteria as well. Currently, many 
Federal agencies fund BLM's processing of their applications for 
rights-of-way across Federal lands. The amount they pay results from 
lengthy negotiations, a process which does not always produce 
consistency across BLM organizational units. The final rule will help 
achieve consistency by assigning each Federal project to a cost 
recovery category. The category designation will enable other Federal 
agencies to determine their costs in advance and will also reduce the 
administrative paperwork involved in Federal transactions. The fee 
increases this rule makes are small when compared to costs of right-of-
way operations on Federal lands (see the discussion above). Therefore, 
the fee increases should not cause a major increase in costs or prices 
for consumers, individual industries, Federal, state, or local 
government agencies, or geographic regions.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
rule should result in no change in any of the above factors. See the 
discussions above for a discussion of the economic effects of the fee 
increases. In general, the fee increases are small in comparison with 
the overall costs of constructing, maintaining, operating, and 
terminating large projects located within right-of-way grants. With the 
possible exception of MLA grants for pipelines, the projects located on 
right-of-way grants support domestic, not foreign, activities and do 
not involve products and services which are exported. MLA pipelines may 
transport oil and gas and their related products destined for foreign 
markets, but the increase in fees, compared to the cost of, and profits 
from, running an oil and gas pipeline that would feed into a foreign 
market, is minimal.

Unfunded Mandates Reform Act

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 
et seq.):
    a. This rule will not ``significantly or uniquely'' affect small 
governments. A Small Government Agency Plan is not required. See the 
Executive Order 12866 discussion above.
    b. This rule will not produce a Federal mandate on state, local, or 
tribal governments, in the aggregate, or the private sector of $100 
million or greater in any year, i.e., it is not a ``significant 
regulatory action'' under the Unfunded Mandates Reform Act. The total 
maximum increases in cost recovery fees (processing and monitoring 
fees) are estimated to be approximately $9.0 million per year.

Executive Order 12630, Governmental Actions and Interference With 
Constitutionally Protected Property Rights (Takings)

    In accordance with Executive Order 12630, the rule does not have 
significant takings implications. A takings implication assessment is 
not required. A right-of-way application is not private property. BLM 
has discretion under the governing statutes to issue a grant or not 
(see 30 U.S.C. 185(a) and 43 U.S.C. 1761(a)). Once a grant is issued, a 
holder's continued use of the land covered by the grant is conditioned 
upon compliance with various statutes, regulations, and terms and 
conditions. Consistent with FLPMA and the MLA, violation of the 
relevant statutes, regulations, or terms and conditions of the grant 
can result in termination of the grant before the end of the grant's 
term. The holder of a grant acknowledges this possibility in accepting 
a grant. Increased cost recovery fees (processing and monitoring fees) 
for right-of-way grants authorizing use of Federal lands do not have 
takings implications.

Executive Order 13132, Federalism

    In accordance with Executive Order 13132, the rule does not have 
Federalism implications to warrant the preparation of a Federalism 
assessment. A Federalism assessment is not required because the rule 
does not have a substantial direct effect on the states, on the 
relationship between the national government and the states, or on the 
distribution of power and responsibilities among the various levels of 
government. Under the final rule qualifying states continue to be 
exempt from paying processing and monitoring fees and the final rule 
does not otherwise affect states, the national government's 
relationship with them, or the distribution of power and 
responsibilities among the various levels of government.

Executive Order 12988, Civil Justice Reform

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that the rule does not unduly burden the 
judicial system and meets the requirements of sections 3(a) and 3(b)(2) 
of the Order. For example, we have reviewed these regulations to 
eliminate drafting errors and ambiguity. They have been written to 
minimize litigation, provide clear legal standards for affected conduct 
rather than general standards, and promote simplification and burden 
reduction. Drafting the regulations in plain language and working 
closely with legal counsel assists in all of these areas.

Paperwork Reduction Act

    This regulation requires an information collection under the 
Paperwork Reduction Act. The current rule is covered by OMB Approval 
Number 1004-0189, which expires on October 31, 2005.

National Environmental Policy Act and Endangered Species Act

    We have analyzed this rule in accordance with the criteria of the 
National Environmental Policy Act and 516 DM. This rule does not 
constitute a major Federal action significantly affecting the quality 
of the human environment. The BLM prepared an environmental assessment 
and determined that the rule will not have a significant effect on the 
quality of the human environment because:

    (a) The direct economic impacts resulting from increasing 
processing and monitoring fees are not significant and would not be 
substantial enough to cause applicants or grant holders to withdraw 
their applications or forfeit their grants; and
    (b) The procedural and clarifying changes would have no 
meaningful impact of any kind on the physical or economic 
environment.

    Any environmental effects of issuing right-of-way grants on public 
and Federal lands are analyzed on a case-by-case basis and in land use 
plans. BLM has issued a Finding of No Significant Impact. The 
Environmental Assessment is part of the Administrative Record for the 
rule.
    We have examined this rule to determine whether it requires 
compliance under section 7 of the Endangered Species Act (ESA). The ESA 
requires agencies to consult or confer with the Fish and Wildlife 
Service or National Marine Fisheries Service (Service) on an action 
when there is ``discretionary Federal involvement or control'' over the 
action. 50 CFR 402.03. Formal consultation under section 7 of the ESA 
is required when an agency determines that a proposed action may affect 
listed species or critical habitat. If an agency determines that a 
proposed action is not likely to adversely affect listed species or 
critical habitat, the agency may request concurrence with this 
determination from the Service. If, however, an agency determines that 
a proposed action will have no effect on listed species or critical 
habitat, no further compliance under Section 7 is required.

[[Page 21058]]

    We have determined that except for section 2801.6 of the final rule 
(dealing with certain, private pre-FLPMA rights-of-way) this rule 
governs discretionary Federal control over rights-of-way and is 
therefore subject to compliance with the ESA. We have further 
determined that the final rule will have no effect on listed or 
proposed species or on designated or proposed critical habitat under 
the ESA and therefore consultation under section 7 of the ESA is not 
required. Our determination is based on the fact that nothing in the 
final rule changes existing processes and procedures that ensure the 
protection of listed or proposed species or designated or proposed 
critical habitat. Existing processes and procedures have been in effect 
since BLM promulgated right-of-way regulations in 1979-80. Moreover, 
the promulgation of regulations is not an ongoing agency action in that 
once a rule is adopted, the Federal action is complete. See Norton v. 
Southern Utah Wilderness Alliance, 124 S. Ct. 2372 (2004). Therefore, 
any further compliance with the ESA will occur when an application for 
a right-of-way is filed with BLM.
    The rule's provision relating to rights-of-way for reservoirs, 
ditches, and canals established by the Mining Act of July 26, 1866 is 
not subject to ESA compliance. Section 2801.6 of the final rule 
reflects long-standing law by providing that these rights-of-way are 
not subject to the rule. Rights-of-way under the 1866 Act are 
Congressional grants that are perpetual and do not require renewal; no 
authorization under FLPMA exists or is required in the future. 
Therefore, unless the holder of the right-of-way acts in a manner that 
exceeds the scope of, or is otherwise inconsistent with, the right-of-
way granted (e.g., by moving the existing ditch), no opportunity exists 
for BLM to exercise its discretion. And where there is no Federal 
discretion or control, section 7 of the ESA does not apply.
    In March, 2004, the District Court for the District of Idaho ruled 
that BLM has discretion to impose conditions on the operation of water 
diversions authorized by the 1866 Act and that BLM's decision not to 
impose conditions--as evidenced by BLM's right-of-way regulations--
constitute an action that triggers consultation under the ESA. Western 
Watersheds Project, et al. v. Matejko, et al., No. CIV 01-0259-E-BLW 
(D. Idaho 2004). The United States has filed a protective notice of 
appeal of this ruling. As noted above, this final rule reflects well-
established law and is consistent with BLM's historical practice 
related to 1866 Act rights-of-way.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    In accordance with Executive Order 13175, BLM evaluated possible 
effects on federally recognized Indian tribes and determined that there 
are no potential effects. The rule does not contain policies that have 
tribal implications. The BLM may only issue right-of-way grants across 
public lands that it manages or across Federal lands held by two or 
more Federal agencies. Indian tribes have jurisdiction over their own 
lands, subject to the Secretary's trust responsibility. To our 
knowledge, no Indian tribes are involved in any multi-agency grants.

Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This regulation is not a significant energy action and, 
accordingly, no Statement of Energy Effects is required. This rule is 
not likely to have a significant adverse effect on the nation's energy 
supply, distribution, or use. To the extent that the rule will have any 
effect, we anticipate it will be positive. The rule makes application 
and other procedures clearer, which should expedite application 
processing.

Authors

    The principal authors of this final rule are Bil Weigand, Idaho 
State Office, and Rick Stamm, Washington Office, Mike DeKeyrel, Utah 
State Office, and Tom Hurshman, Montrose Field Office, assisted by Ian 
Senio of the Regulatory Affairs Group and Michael Hickey of the Office 
of the Solicitor.

List of Subjects

43 CFR Part 2800

    Communications, Electric power, Highways and roads, Penalties, 
Public lands and rights-of-way, and Reporting and recordkeeping 
requirements.

43 CFR Part 2810

    Highways and roads, Public lands rights-of-way, and Reporting and 
recordkeeping requirements.

43 CFR Part 2880

    Administrative practice and procedures, Common carriers, Pipelines, 
Public lands rights-of-way, and Reporting and recordkeeping 
requirements.

43 CFR Part 2920

    Penalties, Public lands, and Reporting and recordkeeping 
requirements.

43 CFR Part 9230

    Penalties and Public lands.

43 CFR Part 9260

    Continental shelf, Forests and forest products, Law enforcement, 
Penalties, Public lands, Range management, Recreation and recreation 
areas, and Wildlife.

    Dated: November 4, 2004.
Rebecca W. Watson,
Assistant Secretary, Land and Minerals Management.

    Editorial Note: This document was received at the Office of the 
Federal Register on April 11, 2005.

0
For the reasons set out in the preamble and under the authorities cited 
below, amend Title 43, Subtitle B, Chapter II, Subchapter B, Parts 
2800, 2810, 2880, and 2920, and Subchapter I, Parts 9230 and 9260 as 
follows:
0
1. Revise part 2800 to read as follows:

PART 2800--RIGHTS-OF-WAY UNDER THE FEDERAL LAND POLICY MANAGEMENT 
ACT

Subpart 2801--General Information
Sec.
2801.2 What is the objective of BLM's right-of-way program?
2801.5 What acronyms and terms are used in the regulations in this 
part?
2801.6 Scope.
2801.8 Severability.
2801.9 When do I need a grant?
2801.10 How do I appeal a BLM decision issued under the regulations 
in this part?
Subpart 2802--Lands Available for FLPMA Grants
2802.10 What lands are available for grants?
2802.11 How does BLM designate corridors?
Subpart 2803--Qualifications for Holding FLPMA Grants
2803.10 Who may hold a grant?
2803.11 Can another person act on my behalf?
2803.12 What happens to my application or grant if I die?
Subpart 2804--Applying for FLPMA Grants
2804.10 What should I do before I file my application?
2804.11 Where do I file my grant application?
2804.12 What information must I submit in my application?
2804.13 Will BLM keep my information confidential?
2804.14 What is the processing fee for a grant application?
2804.15 When does BLM reevaluate the processing and monitoring fees?
2804.16 Who is exempt from paying processing and monitoring fees?

[[Page 21059]]

2804.17 What is a Master Agreement (Processing Category 5) and what 
information must I provide to BLM when I request one?
2804.18 What provisions do Master Agreements contain and what are 
their limitations?
2804.19 How will BLM process my Processing Category 6 application?
2804.20 How does BLM determine reasonable costs for Processing 
Category 6 or Monitoring Category 6 applications?
2804.21 What other factors will BLM consider in determining 
processing and monitoring fees?
2804.22 How will the availability of funds affect the timing of 
BLM's processing?
2804.23 What if there are two or more competing applications for the 
same facility or system?
2804.24 Do I always have to submit an application for a grant using 
Standard Form 299?
2804.25 How will BLM process my application?
2804.26 Under what circumstances may BLM deny my application?
2804.27 What fees do I owe if BLM denies my application or if I 
withdraw my application?
2804.28 What processing fees must I pay for a BLM grant application 
associated with Federal Energy Regulatory Commission (FERC) licenses 
or re-license applications under part I of the Federal Power Act 
(FPA)?
2804.29 What activities may I conduct on the lands covered by the 
proposed right-of-way while BLM is processing my application?
Subpart 2805--Terms and Conditions of Grants
2805.10 How will I know whether BLM has approved or denied my 
application?
2805.11 What does a grant contain?
2805.12 What terms and conditions must I comply with?
2805.13 When is a grant effective?
2805.14 What rights does a grant convey?
2805.15 What rights does the United States retain?
2805.16 If I hold a grant, what monitoring fees must I pay?
2805.17 When do I pay monitoring fees?
Subpart 2806--Rents

General Provisions

2806.10 What rent must I pay for my grant?
2806.11 How will BLM charge me rent?
2806.12 When do I pay rent?
2806.13 What happens if I pay the rent late?
2806.14 Under what circumstances am I exempt from paying rent?
2806.15 Under what circumstances may BLM waive or reduce my rent?
2806.16 When must I make estimated rent payments to BLM?

Linear Rights-of-Way

2806.20 What is the rent for a linear right-of-way?
2806.21 When and how does the linear rent schedule change?
2806.22 How will BLM calculate my rent for linear rights-of-way the 
schedule covers?
2806.23 How must I make rental payments for a linear grant?

Communication Site Rights-of-Way

2806.30 What are the rents for communication site rights-of-way?
2806.31 How will BLM calculate rent for a right-of-way for 
communication uses in the schedule?
2806.32 How does BLM determine the population strata served?
2806.33 How will BLM calculate the rent for a grant or lease 
authorizing a single use communication facility?
2806.34 How will BLM calculate the rent for a grant or lease 
authorizing a multiple-use communication facility?
2806.35 How will BLM calculate rent for private mobile radio service 
(PMRS), internal microwave, and 'other'' category uses?
2806.36 If I am a tenant or customer in a facility, must I have my 
own grant or lease and if so, how will this affect my rent?
2806.37 How will BLM calculate rent for a grant or lease involving 
an entity with a single use (holder or tenant) having equipment or 
occupying space in multiple BLM-authorized facilities to support 
that single use?
2806.38 Can I combine multiple grants or leases for facilities 
located on one site into a single grant or lease?
2806.39 How will BLM calculate rent for a lease for a facility 
manager's use?
2806.40 How will BLM calculate rent for a grant or lease for 
ancillary communication uses associated with communication uses on 
the rent schedule?
2806.41 How will BLM calculate rent for communication facilities 
ancillary to a linear grant or other use authorization?
2806.42 How will BLM calculate rent for a grant or lease authorizing 
a communication use within a federally-owned communication facility?
2806.43 How does BLM calculate rent for passive reflectors and local 
exchange networks?
2806.44 How will BLM calculate rent for a facility owner's or 
facility manager's grant or lease which authorizes communication 
uses subject to the communication use rent schedule and 
communication uses whose rent BLM determines by other means?

Other Rights-of-Way

2806.50 How Will BLM Determine the Rent for a Grant When Neither the 
Linear Rent Schedule at Sec.  2806.20 nor the communication use rent 
schedule at Sec.  2806.30 applies?
Subpart 2807--Grant Administration and Operation
2807.10 When can I start activities under my grant?
2807.11 When must I contact BLM during operations?
2807.12 If I hold a grant, for what am I liable?
2807.13 As grant holders, what liabilities do state, tribal, and 
local governments have?
2807.14 How will BLM notify me if someone else wants a grant for 
land subject to my grant or near or adjacent to it?
2807.15 How is grant administration affected if the land my grant 
encumbers is transferred to another Federal agency or out of Federal 
ownership?
2807.16 Under what conditions may BLM order an immediate temporary 
suspension of my activities?
2807.17 Under what conditions may BLM suspend or terminate my grant?
2807.18 How will I know that BLM intends to suspend or terminate my 
grant?
2807.19 When my grant terminates, what happens to any facilities on 
it?
2807.20 When must I amend my application, seek an amendment of my 
grant, or obtain a new grant?
2807.21 May I assign my grant?
2807.22 How do I renew my grant?
Subpart 2808--Trespass
2808.10 What is trespass?
2808.11 What will BLM do if it determines that I am in trespass?
2808.12 May I receive a grant if I am or have been in trespass?
Subpart 2809--Grants for Federal Agencies
2809.10 Do the regulations in this part apply to Federal agencies?

    Authority: 43 U.S.C. 1733, 1740, 1763, and 1764.

Subpart 2801--General information


Sec.  2801.2  What is the objective of BLM's right-of-way program?

    It is BLM's objective to grant rights-of-way under the regulations 
in this part to any qualified individual, business, or government 
entity and to direct and control the use of rights-of-way on public 
lands in a manner that:
    (a) Protects the natural resources associated with public lands and 
adjacent lands, whether private or administered by a government entity;
    (b) Prevents unnecessary or undue degradation to public lands;
    (c) Promotes the use of rights-of-way in common considering 
engineering and technological compatibility, national security, and 
land use plans; and
    (d) Coordinates, to the fullest extent possible, all BLM actions 
under the regulations in this part with state and local governments, 
interested individuals, and appropriate quasi-public entities.


Sec.  2801.5  What acronyms and terms are used in the regulations in 
this part?

    (a) Acronyms. As used in this part:
    ALJ means Administrative Law Judge.
    BLM means the Bureau of Land Management.
    CERCLA means the Comprehensive Environmental Response Compensation 
and Liability Act (42 U.S.C. 9601 et seq.).

[[Page 21060]]

    EA means environmental assessment.
    EIS means environmental impact statement.
    IBLA means the Department of the Interior, Board of Land Appeals.
    IPD-GDP means the Implicit Price Deflator, Gross Domestic Product, 
as published in the most recent edition of the Survey of Current 
Business of the Department of Commerce, Bureau of Economic Analysis.
    NEPA means the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.).
    RMA means the Ranally Metro Area Population Ranking as published in 
the most recent edition of the Rand McNally Commercial Atlas and 
Marketing Guide.
    (b) Terms. As used in this part, the term:
    Act means the Federal Land Policy and Management Act of 1976 (43 
U.S.C. 1701 et seq.).
    Actual costs means the financial measure of resources the Federal 
government expends or uses in processing a right-of-way application or 
in monitoring the construction, operation, and termination of a 
facility authorized by a grant or permit. Actual costs includes both 
direct and indirect costs, exclusive of management overhead costs.
    Base rent means the dollar amount required from a grant or lease 
holder on BLM managed lands based on the communication use with the 
highest value in the associated facility or facilities, as calculated 
according to the communication use rent schedule. If a facility 
manager's or facility owner's scheduled rent is equal to the highest 
rent charged a tenant in the facility or facilities, then the facility 
manager's or facility owner's use determines the dollar amount of the 
base rent. Otherwise, the facility owner's, facility manager's, 
customer's, or tenant's use with the highest value, and which is not 
otherwise excluded from rent, determines the base rent.
    Casual use means activities ordinarily resulting in no or 
negligible disturbance of the public lands, resources, or improvements. 
Examples of casual use include: Surveying, marking routes, and 
collecting data to use to prepare grant applications.
    Commercial purpose or activity refers to the circumstance where a 
holder attempts to produce a profit by allowing the use of its 
facilities by an additional party. BLM may assess an appropriate rent 
for such commercial activities. The holder's use may not otherwise be 
subject to rent charges under BLM's rental provisions.
    Communication use rent schedule is a schedule of rents for the 
following types of communication uses, including related technologies, 
located in a facility associated with a particular grant or lease. All 
use categories include ancillary communications equipment, such as 
internal microwave or internal one-or two-way radio, that are directly 
related to operating, maintaining, and monitoring the primary uses 
listed below. The Federal Communications Commission (FCC) may or may 
not license the primary uses. The type of use and community served, 
identified on an FCC license, if one has been issued, do not supersede 
either the definitions in this subpart or the procedures in Sec.  
2806.30 of this part for calculating rent for communication facilities 
and uses located on public land:
    (1) Television broadcast means a use that broadcasts UHF and VHF 
audio and video signals for general public reception. This category 
does not include low-power television (LPTV) or rebroadcast devices, 
such as translators, or transmitting devices, such as microwave relays 
serving broadcast translators;
    (2) AM and FM radio broadcast means a use that broadcasts amplitude 
modulation (AM) or frequency modulation (FM) audio signals for general 
public reception. This category does not include low-power FM radio; 
rebroadcast devices, such as translators; or boosters or microwave 
relays serving broadcast translators;
    (3) Cable television means a use that transmits video programming 
to multiple subscribers in a community over a wired or wireless 
network. This category does not include rebroadcast devices that 
retransmit television signals of one or more television broadcast 
stations, or personal or internal antenna systems, such as private 
systems serving hotels and residences;
    (4) Broadcast translator, low-power television, and low-power FM 
radio means a use of translators, LPTV, or low-power FM radio (LPFM). 
Translators receive a television or FM radio broadcast signal and 
rebroadcast it on a different channel or frequency for local reception. 
In some cases the translator relays the true signal to an amplifier or 
another translator. LPTV and LPFM are broadcast translators that 
originate programming. This category also includes translators 
associated with public telecommunication services;
    (5) Commercial mobile radio service (CMRS)/facility manager means 
commercial mobile radio uses that provide mobile communication service 
to individual customers. Examples of CMRS include: Community repeaters, 
trunked radio (specialized mobile radio), two-way radio voice dispatch, 
public switched network (telephone/data) interconnect service, 
microwave communications link equipment, and other two-way voice and 
paging services. ``Facility Managers'' are grant or lease holders that 
lease building, tower, and related facility space to a variety of 
tenants and customers as part of the holder's business enterprise, but 
do not own or operate communication equipment in the facility for their 
own uses;
    (6) Cellular telephone means a system of mobile or fixed 
communication devices that use a combination of radio and telephone 
switching technology and provide public switched network services to 
fixed or mobile users, or both, within a defined geographic area. The 
system consists of one or more cell sites containing transmitting and 
receiving antennas, cellular base station radio, telephone equipment, 
or microwave communications link equipment. Examples of cellular 
telephone include: Personal Communication Service, Enhanced Specialized 
Mobile Radio, Improved Mobile Telephone Service, Air-to-Ground, 
Offshore Radio Telephone Service, Cell Site Extenders, and Local 
Multipoint Distribution Service;
    (7) Private mobile radio service (PMRS) means uses supporting 
private mobile radio systems primarily for a single entity for mobile 
internal communications. PMRS service is not sold and is exclusively 
limited to the user in support of business, community activities, or 
other organizational communication needs. Examples of PMRS include: 
Private local radio dispatch, private paging services, and ancillary 
microwave communications equipment for controlling mobile facilities;
    (8) Microwave means communication uses that:
    (i) Provide long-line intrastate and interstate public telephone, 
television, and data transmissions; or
    (ii) Support the primary business of pipeline and power companies, 
railroads, land resource management companies, or wireless internet 
service provider (ISP) companies; and
    (9) Other communication uses means private communication uses, such 
as amateur radio, personal/private receive-only antennas, natural 
resource and environmental monitoring equipment, and other small, low-
power devices used to monitor or control remote activities;
    Customer means an occupant who is paying a facility manager, 
facility owner, or tenant for using all or any part

[[Page 21061]]

of the space in the facility, or for communication services, and is not 
selling communication services or broadcasting to others. We consider 
persons or entities benefitting from private or internal communication 
uses located in a holder's facility as customers for purposes of 
calculating rent. Customer uses are not included in calculating the 
amount of rent owed by a facility owner, facility manager, or tenant, 
except as noted in Sec. Sec.  2806.34(b)(4) and 2806.42 of this part. 
Examples of customers include: Users of PMRS, users in the microwave 
category when the microwave use is limited to internal communications, 
and all users in the category of ``Other communication uses'' (see 
paragraph (a) of the definition of Communication Use Rent Schedule in 
this section).
    Designated right-of-way corridor means a parcel of land with 
specific boundaries identified by law, Secretarial order, the land-use 
planning process, or other management decision, as being a preferred 
location for existing and future rights-of-way and facilities. The 
corridor may be suitable to accommodate more than one type of right-of-
way use or facility or one or more right-of-way uses or facilities 
which are similar, identical, or compatible.
    Discharge has the meaning found at 33 U.S.C. 1321(a)(2) of the 
Clean Water Act.
    Facility means an improvement or structure, whether existing or 
planned, that is or would be owned and controlled by the grant or lease 
holder within a right-of-way. For purposes of communication site 
rights-of-way or uses, facility means the building, tower, and related 
incidental structures or improvements authorized under the terms of the 
grant or lease.
    Facility manager means a person or entity that leases space in a 
facility to communication users and:
    (1) Holds a communication use grant or lease;
    (2) Owns a communications facility on lands covered by that grant 
or lease; and
    (3) Does not own or operate communications equipment in the 
facility for personal or commercial purposes.
    Facility owner means a person or entity that may or may not lease 
space in a facility to communication users and:
    (1) Holds a communication use grant or lease;
    (2) Owns a communications facility on lands covered by that grant 
or lease; and
    (3) Owns and operates his or her own communications equipment in 
the facility for personal or commercial purposes.
    Grant means any authorization or instrument (e.g., easement, lease, 
license, or permit) BLM issues under Title V of the Federal Land Policy 
and Management Act, 43 U.S.C. 1761 et seq., and those authorizations 
and instruments BLM and its predecessors issued for like purposes 
before October 21, 1976, under then existing statutory authority. It 
does not include authorizations issued under the Mineral Leasing Act 
(30 U.S.C. 185).
    Hazardous material means:
    (1) Any substance or material defined as hazardous, a pollutant, or 
a contaminant under CERCLA at 42 U.S.C. 9601(14) and (33);
    (2) Any regulated substance contained in or released from 
underground storage tanks, as defined by the Resource Conservation and 
Recovery Act at 42 U.S.C. 6991;
    (3) Oil, as defined by the Clean Water Act at 33 U.S.C. 1321(a) and 
the Oil Pollution Act at 33 U.S.C. 2701(23); or
    (4) Other substances applicable Federal, state, tribal, or local 
law define and regulate as ``hazardous.''
    Holder means any entity with a BLM right-of-way authorization.
    Management overhead costs means Federal expenditures associated 
with BLM's directorate, including all BLM State Directors and the 
entire Washington Office staff, except where a State Director or 
Washington Office staff member is required to perform work on a 
specific right-of-way case.
    Monetary value of the rights and privileges you seek means the 
objective value of the right-of-way or what the right-of-way grant is 
worth in financial terms to the applicant.
    Monitoring means those actions the Federal government performs to 
ensure compliance with the terms, conditions, and stipulations of a 
grant.
    (1) For Monitoring Categories 1 through 4, the actions include 
inspecting construction, operation, maintenance, and termination of 
permanent or temporary facilities and protection and rehabilitation 
activities until the holder completes rehabilitation of the right-of-
way and BLM approves it;
    (2) For Monitoring Category 5 (Master Agreements), those actions 
agreed to in the Master Agreement; and
    (3) For Monitoring Category 6, those actions agreed to between BLM 
and the applicant before BLM issues the grant.
    Public lands means any land and interest in land owned by the 
United States within the several states and administered by the 
Secretary of the Interior through BLM without regard to how the United 
States acquired ownership, except lands:
    (1) Located on the Outer Continental Shelf; and
    (2) Held for the benefit of Indians, Aleuts, and Eskimos.
    Reasonable costs has the meaning found at section 304(b) of the 
Act.
    Release has the meaning found at 42 U.S.C. 9601(22) of CERCLA.
    Right-of-way means the public lands BLM authorizes a holder to use 
or occupy under a grant.
    Site means an area, such as a mountaintop, where a holder locates 
one or more communication or other right-of-way facilities.
    Substantial deviation means a change in the authorized location or 
use which requires:
    (1) Construction or use outside the boundaries of the right-of-way; 
or
    (2) Any change from, or modification of, the authorized use. 
Examples of substantial deviation include: Adding equipment, overhead 
or underground lines, pipelines, structures, or other facilities not 
included in the original grant.
    Tenant means an occupant who is paying a facility manager, facility 
owner, or other entity for occupying and using all or any part of a 
facility. A tenant operates communication equipment in the facility for 
profit by broadcasting to others or selling communication services. For 
purposes of calculating the amount of rent that BLM charges, a tenant's 
use does not include:
    (1) Private mobile radio or internal microwave use that is not 
being sold; or
    (2) A use in the category of ``Other Communication Uses'' (see 
paragraph (a) of the definition of Communication Use Rent Schedule in 
this section).
    Third party means any person or entity other than BLM, the 
applicant, or the holder of a right-of-way authorization.
    Tramway means a system for carrying passengers, logs, or other 
material using traveling carriages or cars suspended from an overhead 
cable or cables supported by a series of towers, hangers, tailhold 
anchors, guyline trees, etc.
    Transportation and utility corridor means a parcel of land, without 
fixed limits or boundaries, that holders use as the location for one or 
more transportation or utility rights-of-way.
    Zone means one of eight geographic groupings necessary for linear 
right-of-way rent assessment purposes, covering all lands in the 
contiguous United States.

[[Page 21062]]

Sec.  2801.6  Scope.

    (a) What do these regulations apply to? The regulations in this 
part apply to:
    (1) Grants for necessary transportation or other systems and 
facilities which are in the public interest and which require the use 
of public lands for the purposes identified in 43 U.S.C. 1761, and 
administering, amending, assigning, renewing, and terminating them;
    (2) Grants to Federal departments or agencies for transporting by 
pipeline and related facilities oil, natural gas, synthetic liquid or 
gaseous fuels, and any refined products produced from them; and
    (3) Grants issued on or before October 21, 1976, under then 
existing statutory authority, unless application of these regulations 
would diminish or reduce any rights conferred by the original grant or 
the statute under which it was issued. Where there would be a 
diminishment or reduction in any right, the grant or statute applies.
    (b) What don't these regulations apply to? The regulations in this 
part do not apply to:
    (1) Federal Aid Highways, for which Federal Highway Administration 
procedures apply;
    (2) Roads constructed or used according to reciprocal and cost 
share road use agreement under subpart 2812 of this chapter;
    (3) Lands within designated wilderness areas, although BLM may 
authorize some uses under parts 2920 and 6300 of this chapter;
    (4) Grants to holders other than Federal departments or agencies 
for transporting by pipeline and related facilities oil, natural gas, 
synthetic liquid or gaseous fuels, or any refined product produced from 
them (see part 2880 of this chapter);
    (5) Public highways constructed under the authority of Revised 
Statute (R.S.) 2477 (43 U.S.C. 932, repealed October 21, 1976);
    (6) Reservoirs, canals, and ditches constructed under the authority 
of R.S. 2339 and R.S. 2340 (43 U.S.C. 661, repealed in part, October 
21, 1976); or
    (7)(i) Any project or portion of a project that, prior to October 
24, 1992, was licensed under, or granted an exemption from, part I of 
the Federal Power Act (FPA) (16 U.S.C. 791a et seq.) which:
    (A) Is located on lands subject to a reservation under section 24 
(16 U.S.C. 818) of the FPA;
    (B) Did not receive a grant under Title V of the Federal Land 
Policy and Management Act (FLPMA) before October 24, 1992; and
    (C) Includes continued operation of such project (license renewal) 
under section 15 (16 U.S.C. 808) of the FPA;
    (ii) Paragraph (b)(7)(i) of this section does not apply to any 
additional public lands the project uses that are not subject to the 
reservation in paragraph (b)(7)(i)(A) of this section.


Sec.  2801.8  Severability.

    If a court holds any provisions of the regulations in this part or 
their applicability to any person or circumstances invalid, the 
remainder of these rules and their applicability to other people or 
circumstances will not be affected.


Sec.  2801.9  When do I need a grant?

    (a) You must have a grant under this part when you plan to use 
public lands for systems or facilities over, under, on, or through 
public lands. These include, but are not limited to:
    (1) Reservoirs, canals, ditches, flumes, laterals, pipelines, 
tunnels, and other systems which impound, store, transport, or 
distribute water;
    (2) Pipelines and other systems for transporting or distributing 
liquids and gases, other than water and other than oil, natural gas, 
synthetic liquid or gaseous fuels, or any refined products from them, 
or for storage and terminal facilities used in connection with them;
    (3) Pipelines, slurry and emulsion systems, and conveyor belts for 
transporting and distributing solid materials and facilities for 
storing such materials in connection with them;
    (4) Systems for generating, transmitting, and distributing 
electricity;
    (5) Systems for transmitting or receiving electronic signals and 
other means of communication;
    (6) Transportation systems, such as roads, trails, highways, 
railroads, canals, tunnels, tramways, airways, and livestock driveways; 
and
    (7) Such other necessary transportation or other systems or 
facilities which are in the public interest and which require rights-
of-way.
    (b) If you apply for a right-of-way grant for generating, 
transmitting, and distributing electricity, you must also comply with 
the applicable requirements of the Federal Energy Regulatory Commission 
under the Federal Power Act of 1935, 16 U.S.C. 791a et seq., and 18 CFR 
chapter I.
    (c) See part 2880 of this chapter for information about 
authorizations BLM issues under the Mineral Leasing Act for 
transporting oil and gas resources.


Sec.  2801.10  How do I appeal a BLM decision issued under the 
regulations in this part?

    (a) You may appeal a BLM decision issued under the regulations in 
this part in accordance with part 4 of this title.
    (b) All BLM decisions under this part remain in effect pending 
appeal unless the Secretary of the Interior rules otherwise, or as 
noted in this part. You may petition for a stay of a BLM decision under 
this part with the Office of Hearings and Appeals, Department of the 
Interior. Unless otherwise noted in this part, BLM will take no action 
on your application while your appeal is pending.

Subpart 2802--Lands Available for FLPMA Grants


Sec.  2802.10  What lands are available for grants?

    (a) In its discretion, BLM may grant rights-of-way on any lands 
under its jurisdiction except when:
    (1) A statute, regulation, or public land order specifically 
excludes rights-of-way;
    (2) The lands are specifically segregated or withdrawn from right-
of-way uses; or
    (3) BLM identifies areas in its land use plans or in the analysis 
of an application as inappropriate for right-of-way uses.
    (b) BLM may require common use of a right-of-way and may require, 
to the extent practical, location of new rights-of-way within existing 
or designated right-of-way corridors (see Sec.  2802.11 of this 
subpart). Safety and other considerations may limit the extent to which 
you may share a right-of-way. BLM will designate right-of-way corridors 
through land use plan decisions.
    (c) You should contact the BLM office nearest the lands you seek to 
use to:
    (1) Determine whether or not the land you want to use is available 
for that use; and
    (2) Begin discussions about any application you may need to file.


Sec.  2802.11  How does BLM designate corridors?

    (a) BLM may determine the locations and boundaries of right-of-way 
corridors during the land-use planning process described in part 1600 
of this chapter. During this process BLM coordinates with other Federal 
agencies, state, local, and tribal governments, and the public to 
identify resource-related issues, concerns, and needs. The process 
results in a resource management plan or plan amendment, which 
addresses to what extent you may use public lands and resources for 
specific purposes.

[[Page 21063]]

    (b) When determining which lands may be suitable for right-of-way 
corridors, the factors BLM considers include, but are not limited to, 
the following:
    (1) Federal, state, and local land use plans, and applicable 
Federal, state, local, and tribal laws;
    (2) Environmental impacts on cultural resources and natural 
resources, including air, water, soil, fish, wildlife, and vegetation;
    (3) Physical effects and constraints on corridor placement due to 
geology, hydrology, meteorology, soil, or land forms;
    (4) Costs of construction, operation, and maintenance and costs of 
modifying or relocating existing facilities in a proposed right-of-way 
corridor (i.e., the economic efficiency of placing a right-of-way 
within a proposed corridor);
    (5) Risks to national security;
    (6) Potential health and safety hazards imposed on the public by 
facilities or activities located within the proposed right-of-way 
corridor;
    (7) Social and economic impacts of the right-of-way corridor on 
public land users, adjacent landowners, and other groups or 
individuals;
    (8) Transportation and utility corridor studies previously 
developed by user groups; and
    (9) Engineering and technological compatibility of proposed and 
existing facilities.
    (c) BLM may designate any transportation and utility corridor 
existing prior to October 21, 1976, as a transportation and utility 
corridor without further review.
    (d) The resource management plan or plan amendment may also 
identify areas where BLM will not allow right-of-way corridors for 
environmental, safety, or other reasons.

Subpart 2803--Qualifications for Holding FLPMA Grants


Sec.  2803.10  Who may hold a grant?

    To hold a grant under these regulations, you must be:
    (a) An individual, association, corporation, partnership, or 
similar business entity, or a Federal agency or state, tribal, or local 
government;
    (b) Technically and financially able to construct, operate, 
maintain, and terminate the use of the public lands you are applying 
for; and
    (c) Of legal age and authorized to do business in the state where 
the right-of-way you seek is located.


Sec.  2803.11  Can another person act on my behalf?

    Another person may act on your behalf if you have authorized the 
person to do so under the laws of the state where the right-of-way is 
or will be located.


Sec.  2803.12  What happens to my application or grant if I die?

    (a) If an applicant or grant holder dies, any inheritable interest 
in an application or grant will be distributed under state law.
    (b) If the distributee of a grant is not qualified to hold a grant 
under Sec.  2803.10 of this subpart, BLM will recognize the distributee 
as grant holder and allow the distributee to hold its interest in the 
grant for up to two years. During that period, the distributee must 
either become qualified or divest itself of the interest.

Subpart 2804--Applying for FLPMA Grants


Sec.  2804.10  What should I do before I file my application?

    (a) Before filing an application with BLM, we encourage you to make 
an appointment for a preapplication meeting with the appropriate 
personnel in the BLM field office having jurisdiction over the lands 
you seek to use. During the preapplication meeting, BLM can:
    (1) Identify potential routing and other constraints;
    (2) Determine whether or not the lands are located within a 
designated or existing right-of-way corridor;
    (3) Tentatively schedule the processing of your proposed 
application; and
    (4) Inform you of your financial obligations, such as processing 
and monitoring costs and rents.
    (b) Subject to Sec.  2804.13 of this subpart, BLM may share any 
information you provide under paragraph (a) of this section with 
Federal, state, tribal, and local government agencies to ensure that:
    (1) These agencies are aware of any authorizations you may need 
from them; and
    (2) We initiate effective coordinated planning as soon as possible.


Sec.  2804.11  Where do I file my grant application?

    (a) You must file the grant application in the BLM field office 
having jurisdiction over the lands affected by your application.
    (b) If your application affects more than one BLM administrative 
unit, you may file at any BLM office having jurisdiction over any part 
of the project. BLM will notify you where to direct subsequent 
communications.


Sec.  2804.12  What information must I submit in my application?

    (a) File your application on Standard Form 299, available from any 
BLM office, and fill in the required information as completely as 
possible. Your completed application must include:
    (1) A description of the project and the scope of the facilities;
    (2) The estimated schedule for constructing, operating, 
maintaining, and terminating the project;
    (3) The estimated life of the project and the proposed construction 
and reclamation techniques;
    (4) A map of the project, showing its proposed location and 
existing facilities adjacent to the proposal;
    (5) A statement of your financial and technical capability to 
construct, operate, maintain, and terminate the project;
    (6) Any plans, contracts, agreements, or other information 
concerning your use of the right-of-way and its effect on competition; 
and
    (7) A statement certifying that you are of legal age and authorized 
to do business in the state(s) where the right-of-way would be located, 
and that you have submitted correct information to the best of your 
knowledge.
    (b) If you are a business entity, you must also submit the 
following information:
    (1) Copies of the formal documents creating the entity, such as 
articles of incorporation, and including the corporate bylaws;
    (2) Evidence that the party signing the application has the 
authority to bind the applicant;
    (3) The name and address of each participant in the business;
    (4) The name and address of each shareholder owning 3 percent or 
more of the shares, and the number and percentage of any class of 
voting shares of the entity which such shareholder is authorized to 
vote;
    (5) The name and address of each affiliate of the business;
    (6) The number of shares and the percentage of any class of voting 
stock owned by the business, directly or indirectly, in any affiliate 
controlled by the business;
    (7) The number of shares and the percentage of any class of voting 
stock owned by an affiliate, directly or indirectly, in the business 
controlled by the affiliate; and
    (8) If you have already provided the information in paragraphs 
(b)(1) through (7) of this section to BLM and the information remains 
accurate, you need only reference the BLM serial number under which you 
previously filed it.

[[Page 21064]]

    (c) BLM may require you to submit additional information at any 
time while processing your application. See Sec.  2884.11(c) of this 
chapter for the type of information we may require.
    (d) If you are a Federal oil and gas lessee or operator and you 
need a right-of-way for access to your production facilities or oil and 
gas lease, you may include your right-of-way requirements with your 
Application for Permit to Drill or Sundry Notice required under parts 
3160 through 3190 of this chapter.
    (e) If you are filing with another Federal agency for a license, 
certificate of public convenience and necessity, or other authorization 
for a project involving a right-of-way on public lands, simultaneously 
file an application with BLM for a grant. Include a copy of the 
materials, or reference all the information, you filed with the other 
Federal agency.


Sec.  2804.13  Will BLM keep my information confidential?

    BLM will keep confidential any information in your application that 
you mark as ``confidential'' or ``proprietary'' to the extent allowed 
by law.


Sec.  2804.14  What is the processing fee for a grant application?

    (a) Unless you are exempt under Sec.  2804.16 of this subpart, you 
must pay a fee to BLM for the reasonable costs of processing your 
application before the Federal Government incurs them. The fees for 
Processing Categories 1 through 4 (see paragraph (b) of this section) 
are one-time fees and are not refundable. The fees are categorized 
based on an estimate of the amount of time that BLM will expend to 
process your application and issue a decision granting or denying the 
application.
    (b) There is no processing fee if BLM's work is estimated to take 
one hour or less. Processing fees are based on categories. These 
categories and fees for 2005 are:

                                          2005 Processing Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                                  Processing fee per application as of June 21,
                                          Federal work hours    2005. To be adjusted annually for changes in the
         Processing category                   involved          IPD-GDP. See paragraph (c) of this section for
                                                                               update information
----------------------------------------------------------------------------------------------------------------
(1) Applications for new grants,       Estimated Federal work   $97.
 assignments, renewals, and to          hours are >1 <= 8.
 existing grants assignments,
 renewals, and amendments to existing
 grants.
(2) Applications for new grants,       Estimated Federal work   $343.
 assignments, renewals, and             hours are > 8 <= 24.
 amendments to existing grants.
(3) Applications for new grants,       Estimated Federal work   $644.
 assignments, renewals, and             hours are > 24 <= 36.
 amendments to existing grants.
(4) Applications for new grants,       Estimated Federal work   $923.
 assignments, renewals, and             hours are > 36 <= 50.
 amendments to existing grants.
(5) Master agreements................  Varies.................  As specified in the agreement.
(6) Applications for new grants,       Estimated Federal work   Full reasonable costs.
 assignments, renewals, and             hours are > 50.
 amendments to existing grants.
----------------------------------------------------------------------------------------------------------------

    (c) BLM will revise paragraph (b) of this section to update the 
processing fees for Categories 1 through 4 in the schedule each 
calendar year, based on the previous year's change in the IPD-GDP, as 
measured second quarter to second quarter. BLM will round these changes 
to the nearest dollar. BLM will update Category 5 processing fees as 
specified in the Master Agreement. You also may obtain a copy of the 
current schedule from any BLM state or field office or by writing: 
Director, BLM, 1849 C St., NW., Mail Stop 1000LS, Washington, DC 20240. 
BLM also posts the current schedule on the BLM Homepage on the Internet 
at http://www.blm.gov.
    (d) After an initial review of your application, BLM will notify 
you of the processing category into which your application fits. You 
must then submit the appropriate payment for that category before BLM 
begins processing your application. Your signature on a cost recovery 
Master Agreement constitutes your agreement with the processing 
category decision. If you disagree with the category that BLM has 
determined for your application, you may appeal the decision under 
Sec.  2801.10 of this part. For Processing Categories 5 and 6 
applications, see Sec. Sec.  2804.17, 2804.18, and 2804.19 of this 
subpart. If you paid the processing fee and you appeal a Processing 
Category 1 through 4 or a Processing Category 6 determination, BLM will 
process your application while the appeal is pending. If IBLA finds in 
your favor, you will receive a refund or adjustment of your processing 
fee.
    (e) In processing your application, BLM may determine at any time 
that the application requires preparing an EIS. If this occurs, BLM 
will send you a decision changing your processing category to 
Processing Category 6. You may appeal this decision under Sec.  2801.10 
of this part.
    (f) To expedite processing of your application, you may notify BLM 
in writing that you are waiving paying reasonable costs and are 
electing to pay the full actual costs incurred by BLM in processing 
your application and monitoring your grant.


Sec.  2804.15  When does BLM reevaluate the processing and monitoring 
fees?

    BLM reevaluates the processing and monitoring fees (see Sec.  
2805.16 of this part) for each category and the categories themselves 
within 5 years after they go into effect and at 10-year intervals after 
that. When reevaluating processing and monitoring fees, BLM considers 
all factors that affect the fees, including, but not limited to, any 
changes in:
    (a) Technology;
    (b) The procedures for processing applications and monitoring 
grants;
    (c) Statutes and regulations relating to the right-of-way program; 
or
    (d) The IPD-GDP.


Sec.  2804.16  Who is exempt from paying processing and monitoring 
fees?

    You are exempt from paying processing and monitoring fees if:
    (a) You are a state or local government, or an agency of such a 
government, and BLM issues the grant for governmental purposes 
benefitting the general public. If your principal source of revenue 
results from charges you levy on customers for services similar to 
those of a profit-making corporation or business, you are not exempt; 
or
    (b) Your application under this subpart is associated with a cost-
share

[[Page 21065]]

road or reciprocal right-of-way agreement.


Sec.  2804.17  What is a Master Agreement (Processing Category 5) and 
what information must I provide to BLM when I request one?

    (a) A Master Agreement (Processing Category 5) is a written 
agreement covering processing and monitoring fees (see Sec.  2805.16 of 
this part) negotiated between BLM and you that involves multiple BLM 
grant approvals for projects within a defined geographic area.
    (b) Your request for a Master Agreement must:
    (1) Describe the geographic area covered by the Agreement and the 
scope of the activity you plan;
    (2) Include a preliminary work plan. This plan must state what work 
you must do and what work BLM must do to process your application. Both 
parties must periodically update the work plan, as specified in the 
Agreement, and mutually agree to the changes;
    (3) Contain a preliminary cost estimate and a timetable for 
processing the application and completing the projects;
    (4) State whether you want the Agreement to apply to future 
applications in the same geographic area that are not part of the same 
projects; and
    (5) Contain any other relevant information that BLM needs to 
process the application.


Sec.  2804.18  What provisions do Master Agreements contain and what 
are their limitations?

    (a) A Master Agreement:
    (1) Specifies that you must comply with all applicable laws and 
regulations;
    (2) Describes the work you will do and the work BLM will do to 
process the application;
    (3) Describes the method of periodic billing, payment, and 
auditing;
    (4) Describes the processes, studies, or evaluations you will pay 
for;
    (5) Explains how BLM will monitor the grant and how BLM will 
recover monitoring costs;
    (6) Contains provisions allowing for periodic review and updating, 
if required;
    (7) Contains specific conditions for terminating the Agreement; and
    (8) Contains any other provisions BLM considers necessary.
    (b) BLM will not enter into any Agreement that is not in the public 
interest.
    (c) If you sign a Master Agreement, you waive your right to request 
a reduction of processing and monitoring fees.


Sec.  2804.19  How will BLM process my Processing Category 6 
application?

    (a) For Processing Category 6 applications, you and BLM must enter 
into a written agreement that describes how BLM will process your 
application. The final agreement consists of a work plan and a 
financial plan.
    (b) In processing your application, BLM will:
    (1) Determine the issues subject to analysis under NEPA;
    (2) Prepare a preliminary work plan;
    (3) Develop a preliminary financial plan, which estimates the 
reasonable costs of processing your application and monitoring your 
project;
    (4) Discuss with you:
    (i) The preliminary plans and data;
    (ii) The availability of funds and personnel;
    (iii) Your options for the timing of processing and monitoring fee 
payments; and
    (iv) Financial information you must submit; and
    (5) Complete final scoping and develop final work and financial 
plans which reflect any work you have agreed to do. BLM will also 
present you with the final estimate of the reasonable costs you must 
reimburse BLM, including the cost for monitoring the project, using the 
factors in Sec. Sec.  2804.20 and 2804.21 of this subpart.
    (c) BLM retains the option to prepare any environmental documents 
related to your application. If BLM allows you to prepare any 
environmental documents and conduct any studies that BLM needs to 
process your application, you must do the work following BLM standards. 
For this purpose, you and BLM may enter into a written agreement. BLM 
will make the final determinations and conclusions arising from such 
work.
    (d) BLM will periodically, as stated in the agreement, estimate 
processing costs for a specific work period and notify you of the 
amount due. You must pay the amount due before BLM will continue 
working on your application. If your payment exceeds the reasonable 
costs that BLM incurred for the work, BLM will either adjust the next 
billing to reflect the excess, or refund you the excess under 43 U.S.C. 
1734. You may not deduct any amount from a payment without BLM's prior 
written approval.


Sec.  2804.20  How does BLM determine reasonable costs for Processing 
Category 6 or Monitoring Category 6 applications?

    BLM will consider the factors in paragraph (a) of this section and 
Sec.  2804.21 of this subpart to determine reasonable costs. Submit to 
the BLM field office having jurisdiction over the lands covered by your 
application a written analysis of those factors applicable to your 
project, unless you agree in writing to waive consideration of 
reasonable costs and elect to pay full actual costs (see Sec.  
2804.14(f) of this subpart). Submitting your analysis with the 
application will expedite its handling. BLM may require you to submit 
additional information in support of your position. While we consider 
your written analysis, BLM will not process your Category 6 
application.
    (a) FLPMA factors. If your application is for a Processing Category 
6, or a Monitoring Category 6 project, the BLM State Director having 
jurisdiction over the lands you are applying to use will apply the 
following factors set forth at section 304(b) of FLPMA, 43 U.S.C. 
1734(b), to determine the amount you owe. With your application, submit 
your analysis of how each of the following factors applies to your 
application:
    (1) Actual costs to BLM (exclusive of management overhead costs) of 
processing your application and of monitoring construction, operation, 
maintenance, and termination of a facility authorized by the right-of-
way grant;
    (2) Monetary value of the rights or privileges you seek;
    (3) BLM's ability to process an application with maximum efficiency 
and minimum expense, waste, and effort;
    (4) Costs incurred for the benefit of the general public interest 
rather than for the exclusive benefit of the applicant. That is, the 
costs for studies and data collection that have value to the Federal 
Government or the general public apart from processing the application;
    (5) Any tangible improvements, such as roads, trails, and 
recreation facilities, which provide significant public service and are 
expected in connection with constructing and operating the project; and
    (6) Other factors relevant to the reasonableness of the costs (see 
Sec.  2804.21 of this subpart).
    (b) Fee determination. After considering your analysis and other 
information, BLM will notify you in writing of what you owe. If you 
disagree with BLM's determination, you may appeal it under Sec.  
2801.10 of this part.


Sec.  2804.21  What other factors will BLM consider in determining 
processing and monitoring fees?

    (a) Other factors. If you include this information in your 
application, in arriving at your processing or

[[Page 21066]]

monitoring fee in any category, the BLM State Director will consider 
whether:
    (1) Payment of actual costs would:
    (i) Result in undue financial hardship to your small business, and 
you would receive little monetary value from your grant as compared to 
the costs of processing and monitoring; or
    (ii) Create such undue financial hardship as to prevent your use 
and enjoyment of your right-of-way for a non-commercial purpose.
    (2) The costs of processing the application and monitoring the 
issued grant grossly exceed the costs of constructing the project;
    (3) You are a non-profit organization, corporation, or association 
which is not controlled by or a subsidiary of a profit-making 
enterprise; and
    (i) The studies undertaken in connection with processing the 
application or monitoring the grant have a public benefit; or
    (ii) The facility or project will provide a benefit or special 
service to the general public or to a program of the Secretary;
    (4) You need a grant to prevent or mitigate damages to any lands or 
property or to mitigate hazards or danger to public health and safety 
resulting from an act of God, an act of war, or negligence of the 
United States;
    (5) You have a grant and need to secure a new or amended grant in 
order to relocate an authorized facility to comply with public health 
and safety and environmental protection laws, regulations, and 
standards which were not in effect at the time BLM issued your original 
grant;
    (6) You have a grant and need to secure a new grant to relocate 
facilities which you have to move because a Federal agency or 
federally-funded project needs the lands and the United States does not 
pay the costs associated with your relocation; or
    (7) For whatever other reason, such as public benefits or public 
services provided, collecting processing and monitoring fees would be 
inconsistent with prudent and appropriate management of public lands 
and with your equitable interests or the equitable interests of the 
United States.
    (b) Fee determination. With your written application, submit your 
analysis of how each of the factors, as applicable, in paragraph (a) of 
this section pertain to your application. BLM will notify you in 
writing of the BLM State Director's fee determination. You may appeal 
this decision under Sec.  2801.10 of this part.


Sec.  2804.22  How will the availability of funds affect the timing of 
BLM's processing?

    If BLM has insufficient funds to process your application, we will 
not process it until funds become available or you elect to pay full 
actual costs under Sec.  2804.14(f) of this part.


Sec.  2804.23  What if there are two or more competing applications for 
the same facility or system?

    (a) If there are two or more competing applications for the same 
facility or system and your application is in:
    (1) Processing Category 1 through 4. You must reimburse BLM for 
processing costs as if the other application or applications had not 
been filed.
    (2) Processing Category 6. You are responsible for processing costs 
identified in your application. If BLM cannot readily separate costs, 
such as costs associated with preparing environmental analyses, you and 
any competing applicants must pay an equal share or a proportion agreed 
to in writing among all applicants and BLM. If you agree to share costs 
that are common to your application and that of a competing applicant, 
and the competitor does not pay the agreed upon amount, you are liable 
for the entire amount due. The applicants must pay the entire 
processing fee in advance. BLM will not process your application until 
we receive the advance payments.
    (b) Who determines whether competition exists? BLM determines 
whether the applications are compatible in a single right-of-way system 
or are competing applications for the same system.
    (c) If BLM determines that competition exists, BLM will describe 
the procedures for a competitive bid through a bid announcement in a 
newspaper of general circulation in the area affected by the potential 
right-of-way and by a notice in the Federal Register.


Sec.  2804.24  Do I always have to submit an application for a grant 
using Standard Form 299?

    You do not have to file an application using Standard Form 299 if:
    (a) BLM determines that competition exists (see Sec.  2804.23(c) of 
this subpart); or
    (b) You are an oil and gas operator. You may include your right-of-
way requirements for a FLPMA grant as part of your Application for 
Permit to Drill or Sundry Notice under the regulations in parts 3160 
through 3190 of this chapter.


Sec.  2804.25  How will BLM process my application?

    (a) BLM will notify you in writing when it receives your 
application and will identify your processing fee described at Sec.  
2804.14 of this subpart.
    (b) BLM may require you to submit additional information necessary 
to process the application. This information may include a detailed 
construction, operation, rehabilitation, and environmental protection 
plan, i.e., a ``Plan of Development,'' and any needed cultural resource 
surveys or inventories for threatened or endangered species. If BLM 
needs more information, we will identify this information in a written 
deficiency notice asking you to provide the additional information 
within a specified period of time. BLM will notify you of any other 
grant applications which involve all or part of the lands for which you 
applied.
    (c) Customer service standard. BLM will process your completed 
application as follows:

------------------------------------------------------------------------
 Processing category      Processing time             Conditions
------------------------------------------------------------------------
1-4.................  60 calendar days......  If processing your
                                               application will take
                                               longer than 60 calendar
                                               days, BLM will notify you
                                               in writing of this fact
                                               prior to the 30th
                                               calendar day and inform
                                               you of when you can
                                               expect a final decision
                                               on your application.
5...................  As specified in the     BLM will process
                       Master Agreement.       applications as specified
                                               in the Agreement.
6...................  Over 60 calendar days.  BLM will notify you in
                                               writing within the
                                               initial 60-day processing
                                               period of the estimated
                                               processing time.
------------------------------------------------------------------------

    (d) Before issuing a grant, BLM will:
    (1) Complete a NEPA analysis for the application or approve a NEPA 
analysis previously completed for the application, as required by 40 
CFR parts 1500 through 1508;
    (2) Determine whether or not your proposed use complies with 
applicable Federal and state laws;

[[Page 21067]]

    (3) If your application is for a road, determine whether it is in 
the public interest to require you to grant the United States an 
equivalent authorization across lands that you own;
    (4) Consult, as necessary, with other governmental entities;
    (5) Hold public meetings if sufficient public interest exists to 
warrant their time and expense. BLM will publish a notice in the 
Federal Register, a newspaper of general circulation in the vicinity of 
the lands involved, or both, announcing in advance any public hearings 
or meetings; and
    (6) Take any other action necessary to fully evaluate and decide 
whether to approve or deny your application.


Sec.  2804.26  Under what circumstances may BLM deny my application?

    (a) BLM may deny your application if:
    (1) The proposed use is inconsistent with the purpose for which BLM 
manages the public lands described in your application;
    (2) The proposed use would not be in the public interest;
    (3) You are not qualified to hold a grant;
    (4) Issuing the grant would be inconsistent with the Act, other 
laws, or these or other regulations;
    (5) You do not have or cannot demonstrate the technical or 
financial capability to construct the project or operate facilities 
within the right-of-way; or
    (6) You do not adequately comply with a deficiency notice (see 
Sec.  2804.25(b) of this subpart) or with any BLM requests for 
additional information needed to process the application.
    (b) If BLM denies your application, you may appeal this decision 
under Sec.  2801.10 of this part.


Sec.  2804.27  What fees do I owe if BLM denies my application or if I 
withdraw my application?

    If BLM denies your application or you withdraw it, you owe the 
processing fee set forth at Sec.  2804.14 of this subpart, unless you 
have a Processing Category 5 or 6 application. Then, the following 
conditions apply:
    (a) If BLM denies your Processing Category 5 or 6 application, you 
are liable for all reasonable costs that the United States incurred in 
processing it. The money you have not paid is due within 30 calendar 
days after receiving a bill for the amount due.
    (b) You may withdraw your application in writing before BLM issues 
a grant. If you do so, you are liable for all reasonable processing 
costs the United States has incurred up to the time you withdraw the 
application and for the reasonable costs of terminating your 
application. Any money you have not paid is due within 30 calendar days 
after receiving a bill for the amount due. Any money you paid that is 
not used to cover costs the United States incurred as a result of your 
application will be refunded to you.


Sec.  2804.28  What processing fees must I pay for a BLM grant 
application associated with Federal Energy Regulatory Commission (FERC) 
licenses or re-license applications under part I of the Federal Power 
Act (FPA)?

    (a) You must reimburse BLM for the costs which the United States 
incurs in processing your grant application associated with a FERC 
project, other than those described at Sec.  2801.6(b)(7) of this part. 
BLM also requires reimbursement for processing a grant application 
associated with a FERC project licensed before October 24, 1992, that 
involves the use of additional public lands outside the original area 
reserved under section 24 of the FPA.
    (b) BLM will determine the amount you must pay by using the 
processing fee categories described at Sec.  2804.14 of this subpart 
and bill you for the costs. FERC will address other costs associated 
with processing a FERC license or relicense (see 18 CFR chapter I).


Sec.  2804.29  What activities may I conduct on the lands covered by 
the proposed right-of-way while BLM is processing my application?

    (a) You may conduct casual use activities on the BLM lands covered 
by the application, as may any other member of the public. BLM does not 
require a grant for casual use on BLM lands.
    (b) For any activities on BLM lands that are not casual use, you 
must obtain prior BLM approval.

Subpart 2805--Terms and Conditions of Grants


Sec.  2805.10  How will I know whether BLM has approved or denied my 
application?

    (a) BLM will send you a written response on your application. If we 
do not deny the application, we will send you an unsigned grant for 
your review and signature that:
    (1) Includes any terms, conditions, and stipulations that BLM 
determines to be in the public interest. This includes modifying your 
proposed use or changing the route or location of the facilities;
    (2) May include terms that prevent your use of the right-of-way 
until you have an approved Plan of Development and BLM has issued a 
Notice to Proceed; and
    (3) Will impose a specific term for the grant. Each grant that BLM 
issues for 20 or more years will contain a provision requiring periodic 
review at the end of the twentieth year and subsequently at 10-year 
intervals. BLM may change the terms and conditions of the grant as a 
result of these reviews in accordance with Sec.  2805.15(e) of this 
subpart.
    (b) If you agree with the terms and conditions of the unsigned 
grant, you should sign and return it to BLM with any payment required 
under Sec.  2805.16 of this subpart. BLM will sign the grant and return 
it to you with a final decision issuing the grant if the regulations in 
this part, including Sec.  2804.26, remain satisfied. You may appeal 
this decision under Sec.  2801.10 of this part.
    (c) If BLM denies your application, we will send you a written 
decision that will:
    (1) State the reasons for the denial (see Sec.  2804.26 of this 
part);
    (2) Identify any processing costs you must pay (see Sec.  2804.14 
of this part); and
    (3) Notify you of your right to appeal this decision under Sec.  
2801.10 of this part.


Sec.  2805.11  What does a grant contain?

    The grant states what your rights are on the lands subject to the 
grant and contains information about:
    (a) What lands you can use or occupy. The lands may or may not 
correspond to those for which you applied. BLM will limit the grant to 
those lands which BLM determines:
    (1) You will occupy with authorized facilities;
    (2) Are necessary for constructing, operating, maintaining, and 
terminating the authorized facilities;
    (3) Are necessary to protect the public health and safety;
    (4) Will not unnecessarily damage the environment; and
    (5) Will not result in unnecessary or undue degradation.
    (b) How long you can use the right-of-way. Each grant will state 
the length of time that you are authorized to use the right-of-way.
    (1) BLM will consider the following factors in establishing a 
reasonable term:
    (i) The public purpose served;
    (ii) Cost and useful life of the facility;
    (iii) Time limitations imposed by licenses or permits required by 
other Federal agencies and state, tribal, or local governments; and
    (iv) The time necessary to accomplish the purpose of the grant.
    (2) All grants, except those issued for a term of less than one 
year and those issued in perpetuity, expire on December 31 of the final 
year of the grant.

[[Page 21068]]

    (c) How you can use the right-of-way. You may only use the right-
of-way for the specific use the grant authorizes.


Sec.  2805.12  What terms and conditions must I comply with?

    By accepting a grant, you agree to comply with and be bound by the 
following terms and conditions. During construction, operation, 
maintenance, and termination of the project you must:
    (a) To the extent practicable, comply with all existing and 
subsequently enacted, issued, or amended Federal laws and regulations 
and state laws and regulations applicable to the authorized use;
    (b) Rebuild and repair roads, fences, and established trails 
destroyed or damaged by the project;
    (c) Build and maintain suitable crossings for existing roads and 
significant trails that intersect the project;
    (d) Do everything reasonable to prevent and suppress wildfires on 
or in the immediate vicinity of the right-of-way area;
    (e) Not discriminate against any employee or applicant for 
employment during any phase of the project because of race, creed, 
color, sex, or national origin. You must also require subcontractors to 
not discriminate;
    (f) Pay monitoring fees and rent described in Sec.  2805.16 of this 
subpart and subpart 2806 of this part;
    (g) If BLM requires, obtain, and/or certify that you have obtained, 
a surety bond or other acceptable security to cover any losses, 
damages, or injury to human health, the environment, and property in 
connection with your use and occupancy of the right-of-way, including 
terminating the grant, and to secure all obligations imposed by the 
grant and applicable laws and regulations. If you plan to use hazardous 
materials in the operation of your grant, you must provide a bond that 
covers liability for damages or injuries resulting from releases or 
discharges of hazardous materials. BLM may require a bond, an increase 
or decrease in the value of an existing bond, or other acceptable 
security at any time during the term of the grant;
    (h) Assume full liability if third parties are injured or damages 
occur to property on or near the right-of-way (see Sec.  2807.12 of 
this part);
    (i) Comply with project-specific terms, conditions, and 
stipulations, including requirements to:
    (1) Restore, revegetate, and curtail erosion or conduct any other 
rehabilitation measure BLM determines necessary;
    (2) Ensure that activities in connection with the grant comply with 
air and water quality standards or related facility siting standards 
contained in applicable Federal or state law or regulations;
    (3) Control or prevent damage to:
    (i) Scenic, aesthetic, cultural, and environmental values, 
including fish and wildlife habitat;
    (ii) Public and private property; and
    (iii) Public health and safety;
    (4) Protect the interests of individuals living in the general area 
who rely on the area for subsistence uses as that term is used in Title 
VIII of Alaska National Interest Lands Conservation Act (ANILCA) (16 
U.S.C. 3111 et seq.);
    (5) Ensure that you construct, operate, maintain, and terminate the 
facilities on the lands in the right-of-way in a manner consistent with 
the grant;
    (6) When the state standards are more stringent than Federal 
standards, comply with state standards for public health and safety, 
environmental protection, and siting, constructing, operating, and 
maintaining any facilities and improvements on the right-of-way; and
    (7) Grant BLM an equivalent authorization for an access road across 
your land if BLM determines the reciprocal authorization is needed in 
the public interest and the authorization BLM issues to you is also for 
road access;
    (j) Immediately notify all Federal, state, tribal, and local 
agencies of any release or discharge of hazardous material reportable 
to such entity under applicable law. You must also notify BLM at the 
same time, and send BLM a copy of any written notification you 
prepared;
    (k) Not dispose of or store hazardous material on your right-of-
way, except as provided by the terms, conditions, and stipulations of 
your grant;
    (l) Certify your compliance with all requirements of the Emergency 
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et 
seq., when you receive, assign, renew, amend, or terminate your grant;
    (m) Control and remove any release or discharge of hazardous 
material on or near the right-of-way arising in connection with your 
use and occupancy of the right-of-way, whether or not the release or 
discharge is authorized under the grant. You must also remediate and 
restore lands and resources affected by the release or discharge to 
BLM's satisfaction and to the satisfaction of any other Federal, state, 
tribal, or local agency having jurisdiction over the land, resource, or 
hazardous material;
    (n) Comply with all liability and indemnification provisions and 
stipulations in the grant;
    (o) As BLM directs, provide diagrams or maps showing the location 
of any constructed facility; and
    (p) Comply with all other stipulations that BLM may require.


Sec.  2805.13  When is a grant effective?

    A grant is effective after both you and BLM sign it. You must 
accept its terms and conditions in writing and pay any necessary rent 
and monitoring fees as set forth in subpart 2806 of this part and Sec.  
2805.16 of this subpart. Your written acceptance constitutes an 
agreement between you and BLM that your right to use the public lands, 
as specified in the grant, is subject to the terms and conditions of 
the grant and applicable laws and regulations.


Sec.  2805.14  What rights does a grant convey?

    The grant conveys to you only those rights which it expressly 
contains. BLM issues it subject to the valid existing rights of others, 
including the United States. Rights which the grant conveys to you 
include the right to:
    (a) Use the described lands to construct, operate, maintain, and 
terminate facilities within the right-of-way for authorized purposes 
under the terms and conditions of the grant;
    (b) If your grant specifically authorizes, allow other parties to 
use your facility for the purposes specified in your grant and you may 
charge for such use. If your grant does not specifically authorize it, 
you may not let anyone else use your facility and you may not charge 
for its use unless BLM authorizes or requires it in writing;
    (c) Allow others to use the land as your agent in the exercise of 
the rights that the grant specifies;
    (d) Do minor trimming, pruning, and removing of vegetation to 
maintain the right-of-way or facility;
    (e) Use common varieties of stone and soil which are necessarily 
removed during construction of the project, without additional BLM 
authorization or payment, in constructing the project within the 
authorized right-of-way; and
    (f) Assign the grant to another, provided that you obtain BLM's 
prior written approval.


Sec.  2805.15  What rights does the United States retain?

    The United States retains and may exercise any rights the grant 
does not expressly convey to you. These include BLM's right to:
    (a) Access the lands covered by the grant at any time and enter any 
facility

[[Page 21069]]

you construct on the right-of-way. BLM will give you reasonable notice 
before it enters any facility on the right-of-way;
    (b) Require common use of your right-of-way, including subsurface 
and air space, and authorize use of the right-of-way for compatible 
uses. You may not charge for the use of the lands made subject to such 
additional right-of-way grants;
    (c) Retain ownership of the resources of the land, including timber 
and vegetative or mineral materials and any other living or non-living 
resources. You have no right to use these resources, except as noted in 
Sec.  2805.14(e) of this subpart;
    (d) Determine whether or not your grant is renewable; and
    (e) Change the terms and conditions of your grant as a result of 
changes in legislation, regulation, or as otherwise necessary to 
protect public health or safety or the environment.


Sec.  2805.16  If I hold a grant, what monitoring fees must I pay?

    (a) Monitoring fees. You must pay a fee to BLM for the reasonable 
costs the Federal government incurs in monitoring the construction, 
operation, maintenance, and termination of the project and protection 
and rehabilitation of the public lands your grant covers. BLM 
categorizes the monitoring fees based on the estimated number of work 
hours necessary to monitor your grant. Monitoring Category 1 through 4 
fees are one-time fees and are not refundable. The work hours and fees 
for 2005 are as follows:

                                          2005 Monitoring Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                                    Monitoring fee as of June 21, 2005. To be
                                          Federal work hours      adjusted annually for changes in the IPD-GDP.
         Monitoring category                   involved           See paragraph (b) of this section for update
                                                                                   information
----------------------------------------------------------------------------------------------------------------
(1) Applications for new grants,       Estimated Federal work   $97.
 assignments, renewals, and             hours are > 1 <= 8.
 amendments to existing grants.
(2) Applications for new grants,       Estimated Federal work   $343.
 assignments, renewals, and             hours are > 8 <= 24.
 amendments to existing grants.
(3) Applications for new grants,       Estimated Federal work   $644.
 assignments, renewals, and             hours are > 24 <= 36.
 amendments to existing grants.
(4) Applications for new grants,       Estimated Federal work   $923.
 assignments, renewals, and             hours > 36 <= 50.
 amendments to existing grants.
(5) Master Agreements................  Varies.................  As specified in the Agreement.
(6) Applications for new grants,       Estimated Federal work   Full reasonable costs.
 assignments, renewals, and             hours are > 50.
 amendments to existing grants.
----------------------------------------------------------------------------------------------------------------

    (b) Updating the schedule. BLM will revise paragraph (a) of this 
section annually to update Category 1 through 4 monitoring fees in the 
manner described at Sec.  2804.14(c) of this part. BLM will update 
Category 5 monitoring fees as specified in the Master Agreement. The 
monitoring cost schedule is available from any BLM state or field 
office or by writing: Director, Bureau of Land Management, 1849 C St., 
NW., Mail Stop 1000LS, Washington, DC 20240. BLM also posts the current 
schedule on the BLM Homepage on the Internet at http://www.blm.gov.


Sec.  2805.17  When do I pay monitoring fees?

    (a) Monitoring Categories 1 through 4. Unless BLM otherwise 
directs, you must pay monitoring fees when you submit to BLM your 
written acceptance of the terms and conditions of the grant.
    (b) Monitoring Category 5. You must pay monitoring fees as 
specified in the Master Agreement. BLM will not issue your grant until 
it receives the required payment.
    (c) Monitoring Category 6. BLM may periodically estimate the costs 
of monitoring your use of the grant. BLM will include this fee in the 
costs associated with processing fees described at Sec.  2804.14 of 
this part. If BLM has underestimated the monitoring costs, we will 
notify you of the shortfall. If your payments exceed the reasonable 
costs that Federal employees incurred for monitoring, BLM will either 
reimburse you the difference, or adjust the next billing to reflect the 
overpayment. Unless BLM gives you written authorization, you may not 
offset or deduct the overpayment from your payments.
    (d) Monitoring Categories 1-4 and 6. If you disagree with the 
category BLM has determined for your grant, you may appeal the decision 
under Sec.  2801.10 of this part.

Subpart 2806--Rents

General Provisions


Sec.  2806.10  What rent must I pay for my grant?

    (a) You must pay in advance a rent BLM establishes based on sound 
business management principles and, as far as practical and feasible, 
using comparable commercial practices. Rent does not include processing 
or monitoring fees and rent is not offset by such fees. BLM may exempt, 
waive, or reduce rent for a grant under Sec. Sec.  2806.14 and 2806.15 
of this subpart.
    (b) If BLM issued your grant on or before October 21, 1976, under 
then existing statutory authority, upon request, BLM will conduct an 
informal hearing before a proposed rent increase becomes effective. 
This applies to rent increases due to a BLM-initiated change in the 
rent or from initially being put on a rent schedule. You are not 
entitled to a hearing on annual adjustments once you are on a rent 
schedule.


Sec.  2806.11  How will BLM charge me rent?

    (a) BLM will charge rent beginning on the first day of the month 
following the effective date of the grant through the last day of the 
month when the grant terminates. Example: If a grant became effective 
on January 10 and terminated on September 16, the rental period would 
be February 1 through September 30, or 8 months.
    (b) BLM will set or adjust the annual billing periods to coincide 
with the calendar year by prorating the rent based on 12 months.
    (c) If you disagree with the rent that BLM charges, you may appeal 
the decision under Sec.  2801.10 of this part.


Sec.  2806.12  When do I pay rent?

    (a) You must pay rent for the initial rental period before BLM 
issues you a grant.
    (b) You make all other rental payments for linear rights-of-way

[[Page 21070]]

according to the payment plan described in Sec.  2806.23 of this 
subpart.
    (c) After the first rental payment, all rent is due on January 1 of 
the first year of each succeeding rental period for the term of your 
grant.


Sec.  2806.13  What happens if I pay the rent late?

    (a) If BLM does not receive the rent payment within 15 calendar 
days after the rent was due under Sec.  2806.12 of this subpart, BLM 
will charge you a late payment fee of $25.00 or 10 percent of the rent 
you owe, whichever is greater, not to exceed $500 per authorization.
    (b) If BLM does not receive your rent payment and late payment fee 
within 30 calendar days after rent was due, BLM may collect other 
administrative fees provided by statute.
    (c) If BLM does not receive your rent, late payment fee, and any 
administrative fees within 90 calendar days after the rent was due, BLM 
may terminate your grant under Sec.  2807.17 of this part and you may 
not remove any facility or equipment without BLM's written permission 
(see Sec.  2807.19 of this part). The rent due, late payment fees, and 
any administrative fees remain a debt that you owe to the United 
States.
    (d) If you pay the rent, late payment fee, and any administrative 
fees after BLM has terminated the grant, BLM does not automatically 
reinstate the grant. You must file a new application with BLM. BLM will 
consider the history of your failure to timely pay rent in deciding 
whether to issue you a new grant.
    (e) You may appeal any adverse decision BLM takes against your 
grant under Sec.  2801.10 of this part.


Sec.  2806.14  Under what circumstances am I exempt from paying rent?

    You do not have to pay rent for your use if:
    (a) BLM issues the grant under a statute which does not allow BLM 
to charge rent;
    (b) You are a Federal, state, or local government or its agent or 
instrumentality, unless you are:
    (1) Using the facility, system, space, or any part of the right-of-
way area for commercial purposes; or
    (2) A municipal utility or cooperative whose principal source of 
revenue is customer charges;
    (c) You have been granted an exemption under a statute providing 
for such; or
    (d) Electric or telephone facilities constructed on the right-of-
way were financed in whole or in part, or eligible for financing, under 
the Rural Electrification Act of 1936, as amended (REA) (7 U.S.C. 901 
et seq.), or are extensions of such facilities. You do not need to have 
sought financing from the Rural Utilities Service to qualify for this 
exemption. BLM may require you to document the facility's eligibility 
for REA financing. For communication site facilities, adding or 
including non-eligible facilities as, for example, by tenants or 
customers, on the right-of-way will subject the holder to rent in 
accordance with Sec. Sec.  2806.30 through 2806.44 of this subpart.


Sec.  2806.15  Under what circumstances may BLM waive or reduce my 
rent?

    (a) BLM may waive or reduce your rent payment, even to zero in 
appropriate circumstances. BLM may require you to submit information to 
support a finding that your grant qualifies for a waiver or a reduction 
of rent.
    (b) BLM may waive or reduce your rent if you show BLM that:
    (1) You are a non-profit organization, corporation, or association 
which is not controlled by, or is not a subsidiary of, a profit making 
corporation or business enterprise and the facility or project will 
provide a benefit or special service to the general public or to a 
program of the Secretary;
    (2) You provide without charge, or at reduced rates, a valuable 
benefit to the public at large or to the programs of the Secretary of 
the Interior;
    (3) You hold a valid Federal authorization in connection with your 
grant and the United States is already receiving compensation for this 
authorization. This paragraph does not apply to oil and gas leases 
issued under part 3100 of this chapter; or
    (4) Your grant involves a cost share road or a reciprocal right-of-
way agreement not subject to subpart 2812 of this chapter. In these 
cases, BLM will determine the rent based on the proportion of use.
    (c) The BLM State Director may waive or reduce your rent payment if 
the BLM State Director determines that paying the full rent will cause 
you undue hardship and it is in the public interest to waive or reduce 
your rent. In your request for a waiver or rental reduction you must 
include a suggested alternative rental payment plan or timeframe within 
which you anticipate resuming full rental payments. BLM may also 
require you to submit specific financial and technical data or other 
information that corrects or modifies the statement of financial 
capability required by Sec.  2804.12(a)(5) of this part.


Sec.  2806.16  When must I make estimated rent payments to BLM?

    To expedite the processing of your grant application, BLM may 
estimate rent payments and collect that amount before it issues the 
grant. The amount may change once BLM determines the actual rent of the 
right-of-way. BLM will credit any rental overpayment, and you are 
liable for any underpayment. This section does not apply to rent 
payments made under a rent schedule in this part.

Linear Rights-of-Way


Sec.  2806.20  What is the rent for a linear right-of-way?

    (a) Except as noted in paragraph (c) of this section, BLM will use 
the Per Acre Rent Schedule found at paragraph (b) of this section to 
calculate rent for linear rights-of-way. The Per Acre Rent Schedule is 
updated annually in accordance with Sec.  2806.21 of this subpart.
    (b) The Per Acre Rent Schedule for calendar year 2005 is as 
follows:

                                           2005 Per Acre Rent Schedule
----------------------------------------------------------------------------------------------------------------
                                                                                            Per acre rent for
                                                                 Per acre rent for oil    electric transmission
                                                                   and gas and other      and distributionlines,
                                                                     energy related       telephone lines, non-
                                                                   pipeline, and all      related pipelines, and
          County zone number and per acre zone price              roads, ditches, and    other linear rights-of-
                                                                 canals. To be adjusted    way. To be adjusted
                                                                annually for changes in  annually for changes in
                                                                 the IPD-GDP. See Sec.    the IPD-GDP. See Sec.
                                                                   2806.21 for update       2806.21 for update
                                                                      information              information
----------------------------------------------------------------------------------------------------------------
Zone 1 $50....................................................                    $3.89                    $3.40
Zone 2 $100...................................................                     7.76                     6.79
Zone 3 $200...................................................                    15.58                    13.61

[[Page 21071]]

 
Zone 4 $300...................................................                    23.31                    20.43
Zone 5 $400...................................................                    31.14                    27.23
Zone 6 $500...................................................                    38.89                    34.03
Zone 7 $600...................................................                    46.66                    40.86
Zone 8 $1,000.................................................                    77.78                    68.05
----------------------------------------------------------------------------------------------------------------

    (c) BLM may use an alternate means to compute your rent if the rent 
determined by comparable commercial practices or an appraisal would be 
10 or more times the rent from the schedule.
    (d) Once you are on a rent schedule, BLM will not remove you from 
it unless:
    (1) The BLM State Director decides to remove you from the schedule 
under paragraph (c) of this section; or
    (2) You file an application to amend your grant.
    (e) You may obtain the current linear right-of-way rent schedule 
from any BLM state or field office or by writing: Director, BLM, 1849 C 
St., NW., Mail Stop 1000 LS, Washington, DC 20240. BLM also posts the 
most current rent schedule on the BLM Homepage on the Internet at 
http://www.blm.gov.


Sec.  2806.21  When and how does the linear rent schedule change?

    BLM will revise Sec.  2806.20(b) to update the rent schedule each 
calendar year based on the previous year's change in the IPD-GDP, as 
measured second quarter to second quarter.


Sec.  2806.22  How will BLM calculate my rent for linear rights-of-way 
the schedule covers?

    (a) BLM calculates your rent by multiplying the rent per acre for 
the appropriate category of use and county zone price from the current 
schedule by the number of acres in the right-of-way area that fall in 
those categories and multiplying the result by the number of years in 
the rental period.
    (b) If BLM has not previously used the rent schedule to calculate 
your rent, we may do so after giving you reasonable written notice.


Sec.  2806.23  How must I make rental payments for a linear grant?

    (a) For linear grants, except those issued in perpetuity, you must 
make either nonrefundable annual payments or a nonrefundable payment 
for more than 1 year, as follows:
    (1) One-time payments. You may pay in advance the required rent 
amount for the entire term of the grant.
    (2) If you choose not to make a one-time payment, you must pay 
according to one of the following methods, as applicable:
    (i) Payments by individuals. If your annual rent is $100 or less, 
you must pay at 10-year intervals not to exceed the term of the grant. 
If your annual rent is greater than $100, you may pay annually or at 
multi-year intervals that you may choose.
    (ii) Payments by all others. You must pay rent at 10-year intervals 
not to exceed the term of the grant.
    (b) BLM considers the first partial calendar year in the rent 
payment period to be the first year of the rental payment term. BLM 
prorates the first year rental amount based on the number of months 
left in the calendar year after the effective date of the grant.
    (c) Perpetual grants. For linear grants issued in perpetuity, you 
must make a one-time rental payment before BLM will issue the grant, 
except individuals may choose to make rental payments as provided in 
paragraph (a)(2)(i) of this section. BLM determines the one-time 
payment as follows:
    (1) BLM will calculate rent for grants issued in perpetuity by 
multiplying the annual rent by 100; or
    (2) You may request from BLM a rent determination based on the 
prevailing price established by general practice in the vicinity of the 
right-of-way. You must:
    (i) Prepare a report, at your expense, that explains how you 
estimated the rent;
    (ii) Complete it to Federal appraisal standards; and
    (iii) Submit it for consideration and approval by the BLM State 
Director with jurisdiction over the lands in the grant. If the BLM 
State Director does not approve the rent estimated in your report, you 
may appeal the decision under Sec.  2801.10 of this part.

Communication Site Rights-of-Way


Sec.  2806.30  What are the rents for communication site rights-of-way?

    (a) Rent schedule. (1) BLM uses the rent schedule for communication 
uses found in paragraph (b) of this section to calculate the rent for 
communication site rights-of-way. The schedule is based on nine 
population strata (the population served), as depicted in the most 
recent version of the Ranally Metro Area Population Ranking, and the 
type of communication use or uses for which BLM normally grants 
communication site rights-of-way. These uses are listed as part of the 
definition of ``communication use rent schedule,'' set out at Sec.  
2801.5(b) of this part. You may obtain a copy of the current schedule 
from any BLM state or field office or by writing: Director, BLM, 1849 C 
St., NW., Mail Stop 1000 LS, Washington, DC 20240. BLM also posts the 
current communication use rent schedule on the BLM Home Page on the 
Internet at http://www.blm.gov.
    (2) BLM will revise paragraph (b) of this section annually to 
update the schedule based on two sources: the U.S. Department of Labor 
Consumer Price Index for All Urban Consumers, U.S. City Average (CPI-
U), as of July of each year (difference in CPI-U from July of one year 
to July of the following year), and the RMA population rankings.
    (3) BLM will limit the annual adjustment based on the Consumer 
Price Index to no more than 5 percent. At least every 10 years BLM will 
review the rent schedule to ensure that the schedule reflects fair 
market value.
    (b) The annual rent schedule for communication uses for calendar 
year 2005 is as follows:

[[Page 21072]]



                                                       Communication Use Rent Schedule Annual Fees
                                                                  [Calendar year 2005]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   Private
                                    Television  Am/FM radio     Cable      Broadcast      CMRS/       Cellular      mobile                     Other
            Population              broadcast   broadcast 1   television  translator/    facility    telephone      radio      Microwave   communication
                                                                           LPTV/LPFM     manager                   service                      uses
--------------------------------------------------------------------------------------------------------------------------------------------------------
5,000,000 plus...................   $55,861.13   $42,206.21          (2)          (2)   $14,896.30   $14,896.30   $12,413.59   $12,413.59        $93.10
2,500,000 to 4,999,999...........    37,240.76    26,068.54          (2)          (2)    12,413.59    12,413.59     7,448.15     9,930.88         93.10
1,000,000 to 2,499,999...........    22,344.46    17,379.01          (2)          (2)     9,930.88     9,930.88     7,448.15     8,689.51         93.10
500,000 to 999,999...............    17,379.01    12,413.59          (2)          (2)     6,206.79     7,448.15     4,965.43     6,827.47         93.10
300,000 to 499,999...............    14,896.30     9,930.88          (2)          (2)     4,965.43     6,206.79     3,103.39     3,103.39         93.10
100,000 to 299,999...............     7,448.15     4,965.43     2,979.25     2,979.25     3,724.08     4,965.43     2,482.72     2,482.72         93.10
50,000 to 99,999.................     3,724.08     2,482.72     1,489.63     1,489.63     1,489.63     3,724.08     1,241.36     1,862.03         93.10
25,000 to 49,999.................     1,862.03     1,489.63     1,241.36       620.68     1,241.36     3,103.39       744.81     1,862.03         93.10
Less Than 25,000.................     1,489.63     1,117.22       744.81       124.14       744.81     3,103.39       434.47     1,862.03        93.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 Rent for AM Radio is 70% of the FM Scheduled Rent.
2 Fee to be determined by appraisal or other methods.


[[Page 21073]]

    (c) Uses not covered by the schedule. The communication use rent 
schedule does not apply to:
    (1) Communication site uses, facilities, and devices located 
entirely within the exterior boundaries of an oil and gas lease, and 
directly supporting the operations of the oil and gas lease (see parts 
3160 through 3190 of this chapter);
    (2) Communication facilities and uses ancillary to and authorized 
under a linear grant, such as a railroad grant or an oil and gas 
pipeline grant;
    (3) Communication uses not listed on the schedule, such as 
telephone lines, fiber optic cables, and new technologies;
    (4) Grants for which BLM determines the rent by competitive 
bidding; or
    (5) Communication facilities and uses for which the BLM State 
Director concurs that:
    (i) The expected annual rent, as BLM estimates from market data, 
exceeds the rent from the rent schedule by five times; or
    (ii) The communication site serves a population of one million or 
more and the expected annual rent for the communication use or uses is 
more than $10,000 above the rent from the rent schedule.


Sec.  2806.31  How will BLM calculate rent for a right-of-way for 
communication uses in the schedule?

    (a) Basic rule. BLM calculates rents for:
    (1) Single-use facilities by applying the rent from the 
communication use rent schedule (see Sec.  2806.30 of this subpart) for 
the type of use and the population strata served; and
    (2) Multiple-use facilities, whose authorizations provide for 
subleasing, by setting the rent of the highest value use in the 
facility or facilities as the base rent (taken from the rent schedule) 
and adding to it 25 percent of the rent from the rent schedule for all 
tenant uses in the facility or facilities, if a tenant use is not used 
as the base rent (rent = base rent + 25 percent of all rent due to 
additional tenant uses in the facility or facilities) (see also 
Sec. Sec.  2806.32 and 2806.34 of this subpart).
    (b) Exclusions. When calculating rent, BLM will exclude customer 
uses, except as provided for at Sec. Sec.  2806.34(b)(4) and 2806.42 of 
this subpart. BLM will also exclude those uses exempted from rent by 
Sec.  2806.14 of this subpart, and any uses whose rent has been waived 
or reduced to zero as described in Sec.  2806.15 of this subpart.
    (c) Annual statement. By October 15 of each year, you, as a grant 
or lease holder, must submit to BLM a certified statement listing any 
tenants and customers in your facility or facilities and the category 
of use for each tenant or customer as of September 30 of the same year. 
BLM may require you to submit any additional information needed to 
calculate your rent. BLM will determine the rent based on the certified 
statement provided. We require only facility owners or facility 
managers to hold a grant or lease (unless you are an occupant in a 
federally-owned facility as described in Sec.  2806.42 of this 
subpart), and will charge you rent for your grant or lease based on the 
total number of communication uses within the right-of-way and the type 
of uses and population strata the facility or site serves.


Sec.  2806.32  How does BLM determine the population strata served?

    (a) BLM determines the population strata served as follows:
    (1) If the site or facility is within a designated RMA, BLM will 
use the population strata of the RMA;
    (2) If the site or facility is within a designated RMA, and it 
serves two or more RMAs, BLM will use the population strata of the RMA 
having the greatest population;
    (3) If the site or facility is outside an RMA, and it serves one or 
more RMAs, BLM will use the population strata of the RMA served having 
the greatest population;
    (4) If the site or facility is outside an RMA and the site does not 
serve an RMA, BLM will use the population strata of the community it 
serves having the greatest population, as identified in the current 
edition of the Rand McNally Road Atlas;
    (5) If the site or facility is outside an RMA, and it serves a 
community of less than 25,000, BLM will use the lowest population 
strata shown on the rent schedule.
    (b)(1) BLM considers all facilities (and all uses within the same 
facility) located at one site to serve the same RMA or community. 
However, BLM may make case-by-case exceptions in determining the 
population served at a particular site by uses not located within the 
same facility and not authorized under the same grant or lease. BLM has 
the sole responsibility to make this determination. For example, when a 
site has a mix of high-power and low-power uses that are authorized by 
separate grants or leases, and only the high-power uses are capable of 
serving an RMA or community with the greatest population, BLM may 
separately determine the population strata served by the low-power uses 
(if not collocated in the same facility with the high-power uses), and 
calculate their rent as described in Sec.  2806.30 of this subpart.
    (2) For purposes of rent calculation, all uses within the same 
facility and/or authorized under the same grant or lease must serve the 
same population strata.
    (3) For purposes of rent calculation, BLM will not modify the 
population rankings published in the Rand McNally Commercial Atlas and 
Marketing Guide or the population of the community served.


Sec.  2806.33  How will BLM calculate the rent for a grant or lease 
authorizing a single use communication facility?

    BLM calculates the rent for a grant or lease authorizing a single-
use communication facility from the communication use rent schedule 
(see Sec.  2806.30 of this subpart), based on your authorized single 
use and the population strata it serves (see Sec.  2806.32 of this 
subpart).


Sec.  2806.34  How will BLM calculate the rent for a grant or lease 
authorizing a multiple-use communication facility?

    (a) Basic rule. BLM first determines the population strata the 
communication facility serves according to Sec.  2806.32 of this 
subpart and then calculates the rent assessed to facility owners and 
facility managers for a grant or lease for a communication facility 
that authorizes subleasing with tenants, customers, or both, as 
follows:
    (1) Using the communication use rent schedule. BLM will determine 
the rent of the highest value use in the facility or facilities as the 
base rent, and add to it 25 percent of the rent from the rent schedule 
(see Sec.  2806.30 of this subpart) for each tenant use in the facility 
or facilities;
    (2) If the highest value use is not the use of the facility owner 
or facility manager, BLM will consider the owner's or manager's use 
like any tenant or customer use in calculating the rent (see Sec.  
2806.35(b) for facility owners and Sec.  2806.39(a) for facility 
managers);
    (3) If a tenant use is the highest value use, BLM will exclude the 
rent for that tenant's use when calculating the additional 25 percent 
amount under paragraph (a)(1) of this section for tenant uses;
    (4) If a holder has multiple uses authorized under the same grant 
or lease, such as a TV and a FM radio station, BLM will calculate the 
rent as in paragraph (a)(1) of this section. In this case, the TV rent 
would be the highest value use and BLM would charge the FM portion 
according to the rent schedule as if it were a tenant use.
    (b) Special applications. The following provisions apply when

[[Page 21074]]

calculating rents for communication uses exempted from rent under Sec.  
2806.14 of this subpart or communication uses whose rent has been 
waived or reduced to zero under Sec.  2806.15 of this subpart:
    (1) BLM will exclude exempted uses or uses whose rent has been 
waived or reduced to zero (see Sec. Sec.  2806.14 and 2806.15 of this 
subpart) of either a facility owner or a facility manager in 
calculating rents. BLM will exclude similar uses (see Sec. Sec.  
2806.14 and 2806.15 of this subpart) of a customer or tenant if they 
choose to hold their own grant or lease (see Sec.  2806.36 of this 
subpart) or are occupants in a Federal facility (see Sec.  2806.42(a) 
of this subpart);
    (2) BLM will charge rent to a facility owner whose own use is 
either exempted from rent or whose rent has been waived or reduced to 
zero (see Sec. Sec.  2806.14 and 2806.15 of this subpart), but who has 
tenants in the facility, in an amount equal to the rent of the highest 
value tenant use plus 25 percent of the rent from the rent schedule for 
each of the remaining tenant uses subject to rent;
    (3) BLM will not charge rent to a facility owner, facility manager, 
or tenant (when holding a grant or lease) when all of the following 
occur:
    (i) BLM exempts from rent, waives, or reduces to zero the rent for 
the holder's use (see Sec. Sec.  2806.14 and 2806.15 of this subpart);
    (ii) Rent from all other uses in the facility is exempted, waived, 
or reduced to zero, or BLM considers such uses as customer uses; and
    (iii) The holder is not operating the facility for commercial 
purposes (see Sec.  2801.5(b) of this part) with respect to such other 
uses in the facility; and
    (4) If a holder, whose own use is exempted from rent or whose rent 
has been waived or reduced to zero, is conducting a commercial activity 
with customers or tenants whose uses are also exempted from rent or 
whose rent has been waived or reduced to zero (see Sec. Sec.  2806.14 
and 2806.15 of this subpart), BLM will charge rent, notwithstanding 
section 2806.31(b), based on the highest value use within the facility. 
This paragraph does not apply to facilities exempt from rent under 
Sec.  2806.14(d) of this subpart except when the facility also includes 
non-eligible facilities.


Sec.  2806.35  How will BLM calculate rent for private mobile radio 
service (PMRS), internal microwave, and ``other'' category uses?

    If an entity engaged in a PMRS, internal microwave, or ``other'' 
use is:
    (a) Using space in a facility owned by either a facility owner or 
facility manager, BLM will consider the entity to be a customer and not 
include these uses in the rent calculation for the facility; or
    (b) The facility owner, BLM will follow the provisions in Sec.  
2806.31 of this subpart to calculate rent for a lease involving these 
uses. However, we include the rent from the rent schedule for a PMRS, 
internal microwave, or other use in the rental calculation only if the 
value of that use is equal to or greater than the value of any other 
use in the facility. BLM excludes these uses in the 25 percent 
calculation (see Sec.  2806.31(a) of this subpart) when their value 
does not exceed the highest value in the facility.


Sec.  2806.36  If I am a tenant or customer in a facility, must I have 
my own grant or lease and if so, how will this affect my rent?

    (a) You may have your own authorization, but BLM does not require a 
separate grant or lease for tenants and customers using a facility 
authorized by a BLM grant or lease that contains a subleasing 
provision. BLM charges the facility owner or facility manager rent 
based on the highest value use within the facility (including any 
tenant or customer use authorized by a separate grant or lease) and 25 
percent of the rent from the rent schedule for each of the other uses 
subject to rent (including any tenant or customer use a separate grant 
or lease authorizes and the facility owner's use if it is not the 
highest value use).
    (b) If you own a building, equipment shelter, or tower on public 
lands for communication purposes, you must have an authorization under 
this part, even if you are also a tenant or customer in someone else's 
facility.
    (c) BLM will charge tenants and customers who hold their own grant 
or lease in a facility, as grant or lease holders, the full annual rent 
for their use based on the BLM communication use rent schedule. BLM 
will also include such tenant or customer use in calculating the rent 
the facility owner or facility manager must pay.


Sec.  2806.37  How will BLM calculate rent for a grant or lease 
involving an entity with a single use (holder or tenant) having 
equipment or occupying space in multiple BLM-authorized facilities to 
support that single use?

    BLM will include the single use in calculating rent for each grant 
or lease authorizing that use. For example, a television station 
locates its antenna on a tower authorized by grant or lease ``A'' and 
locates its related broadcast equipment in a building authorized by 
grant or lease ``B.'' The statement listing tenants and customers for 
each facility (see Sec.  2806.31(c) of this subpart) must include the 
television use because each facility is benefitting economically from 
having the television broadcast equipment located there, even though 
the combined equipment is supporting only one single end use.


Sec.  2806.38  Can I combine multiple grants or leases for facilities 
located on one site into a single grant or lease?

    If you hold authorizations for two or more facilities on the same 
site, you can combine all those uses under one grant or lease, with 
BLM's approval. The highest value use in all the combined facilities 
determines the base rent. BLM then charges for each remaining use in 
the combined facilities at 25 percent of the rent from the rent 
schedule. These uses include those uses we previously calculated as 
base rents when BLM authorized each of the facilities on an individual 
basis.


Sec.  2806.39  How will BLM calculate rent for a lease for a facility 
manager's use?

    (a) BLM will follow the provisions in Sec.  2806.31 of this subpart 
to calculate rent for a lease involving a facility manager's use. 
However, we include the rent from the rent schedule for a facility 
manager's use in the rental calculation only if the value of that use 
is equal to or greater than the value of any other use in the facility. 
BLM excludes the facility manager's use in the 25 percent calculation 
(see Sec.  2806.31(a) of this subpart) when its value does not exceed 
the highest value in the facility.
    (b) If you are a facility owner and you terminate your use within 
the facility, but want to retain the lease for other purposes, BLM will 
continue to charge you for your authorized use until BLM amends the 
lease to change your use to facility manager or to some other 
communication use.


Sec.  2806.40  How will BLM calculate rent for a grant or lease for 
ancillary communication uses associated with communication uses on the 
rent schedule?

    If the ancillary communication equipment is used solely in direct 
support of the primary use (see the definition of communication use 
rent schedule in Sec.  2801.5 of this part), BLM will calculate and 
charge rent only for the primary use.


Sec.  2806.41  How will BLM calculate rent for communication facilities 
ancillary to a linear grant or other use authorization?

    When a communication facility is ancillary to, and authorized by 
BLM under, a grant for a linear use, or some other type of use 
authorization (e.g., a mineral lease or sundry notice), BLM will 
determine the rent using the linear

[[Page 21075]]

rent schedule (see Sec.  2806.20 of this subpart) or rent scheme 
associated with the other authorization, and not the communication use 
rent schedule.


Sec.  2806.42  How will BLM calculate rent for a grant or lease 
authorizing a communication use within a federally-owned communication 
facility?

    (a) If you are an occupant of a federally-owned communication 
facility, you must have your own grant or lease and pay rent in 
accordance with these regulations.
    (b) If a Federal agency holds a grant or lease and agrees to 
operate the facility as a facility owner under Sec.  2806.31 of this 
subpart, occupants do not need a separate BLM grant or lease and BLM 
will calculate and charge rent to the Federal facility owner under 
Sec. Sec.  2806.30 through 2806.44 of this subpart.


Sec.  2806.43  How does BLM calculate rent for passive reflectors and 
local exchange networks?

    (a) BLM calculates rent for passive reflectors and local exchange 
networks by using the same rent schedules for passive reflectors and 
local exchange networks as the Forest Service uses for the region in 
which the facilities are located. You may obtain the pertinent 
schedules from the Forest Service or from any BLM state or field office 
in the region in question. For passive reflectors and local exchange 
networks not covered by a Forest Service regional schedule, BLM uses 
the provisions in Sec.  2806.50 of this subpart to determine rent. See 
Forest Service regulations at 36 CFR chapter II.
    (b) For the purposes of this subpart, the term:
    (1) Passive reflector includes various types of nonpowered 
reflector devices used to bend or ricochet electronic signals between 
active relay stations or between an active relay station and a 
terminal. A passive reflector commonly serves a microwave communication 
system. The reflector requires point-to-point line-of-sight with the 
connecting relay stations, but does not require electric power; and
    (2) Local exchange network means radio service which provides basic 
telephone service, primarily to rural communities.


Sec.  2806.44  How will BLM calculate rent for a facility owner's or 
facility manager's grant or lease which authorizes communication uses 
subject to the communication use rent schedule and communication uses 
whose rent BLM determines by other means?

    (a) BLM establishes the rent for each of the uses in the facility 
that are not covered by the communication use rent schedule using Sec.  
2806.50 of this subpart.
    (b) BLM establishes the rent for each of the uses in the facility 
that are covered by the rent schedule using Sec. Sec.  2806.30 and 
2806.31 of this subpart.
    (c) BLM determines the facility owner or facility manager's rent by 
identifying the highest rent in the facility of those established under 
paragraphs (a) and (b) of this section, and adding to it 25 percent of 
the rent of all other uses subject to rent.

Other Rights-of-Way


Sec.  2806.50  How will BLM determine the rent for a grant when neither 
the linear rent schedule at Sec.  2806.20 nor the communication use 
rent schedule at Sec.  2806.30 applies?

    When neither the linear nor the communication use rent schedule is 
appropriate, BLM determines your rent through a process based on 
comparable commercial practices, appraisals, competitive bid, or other 
reasonable methods. BLM will notify you in writing of the rent 
determination. If you disagree with the rent determination, you may 
appeal BLM's final determination under Sec.  2801.10 of this part.

Subpart 2807--Grant Administration and Operation


Sec.  2807.10  When can I start activities under my grant?

    When you can start depends on the terms of your grant. You can 
start activities when you receive the grant you and BLM signed, unless 
the grant includes a requirement for BLM to provide a written Notice to 
Proceed. If your grant contains a Notice to Proceed requirement, you 
may not initiate construction, operation, maintenance, or termination 
until BLM issues you a Notice to Proceed.


Sec.  2807.11  When must I contact BLM during operations?

    You must contact BLM:
    (a) At the times specified in your grant;
    (b) When your use requires a substantial deviation from the grant. 
You must obtain BLM's approval before you begin any activity that is a 
substantial deviation;
    (c) When there is a change affecting your application or grant, 
including, but not limited to, changes in:
    (1) Mailing address;
    (2) Partners;
    (3) Financial conditions; or
    (4) Business or corporate status;
    (d) When you submit a certification of construction, if the terms 
of your grant require it. A certification of construction is a document 
you submit to BLM after you have finished constructing a facility, but 
before you begin operating it, verifying that you have constructed and 
tested the facility to ensure that it complies with the terms of the 
grant and with applicable Federal and state laws and regulations; or
    (e) When BLM requests it. You must update information or confirm 
that information you submitted before is accurate.


Sec.  2807.12  If I hold a grant, for what am I liable?

    (a) If you hold a grant, you are liable to the United States and to 
third parties for any damage or injury they incur in connection with 
your use and occupancy of the right-of-way.
    (b) You are strictly liable for any activity or facility associated 
with your right-of-way area which BLM determines presents a foreseeable 
hazard or risk of damage or injury to the United States. BLM will 
specify in the grant any activity or facility posing such hazard or 
risk, and the financial limitations on damages commensurate with such 
hazard or risk.
    (1) BLM will not impose strict liability for damage or injury 
resulting primarily from an act of war, an act of God, or the 
negligence of the United States, except as otherwise provided by law.
    (2) As used in this section, strict liability extends to costs 
incurred by the Federal government to control or abate conditions, such 
as fire or oil spills, which threaten life, property, or the 
environment, even if the threat occurs to areas that are not under 
Federal jurisdiction. This liability is separate and apart from 
liability under other provisions of law.
    (3) You are strictly liable to the United States for damage or 
injury up to $2 million for any one incident. BLM will update this 
amount annually to adjust for changes in the Consumer Price Index for 
All Urban Consumers, U.S. City Average (CPI-U) as of July of each year 
(difference in CPI-U from July of one year to July of the following 
year), rounded to the nearest $1,000. This financial limitation does 
not apply to the release or discharge of hazardous substances on or 
near the grant, or where liability is otherwise not subject to this 
financial limitation under applicable law.
    (4) BLM will determine your liability for any amount in excess of 
the $2 million strict liability limitation (as adjusted) through the 
ordinary rules of negligence.
    (5) The rules of subrogation apply in cases where a third party 
caused the damage or injury.

[[Page 21076]]

    (c) If you cannot satisfy claims for injury or damage, all owners 
of any interests in, and all affiliates or subsidiaries of any holder 
of, a grant, except for corporate stockholders, are jointly and 
severally liable to the United States.
    (d) If BLM issues a grant to more than one person, each is jointly 
and severally liable.
    (e) By accepting the grant, you agree to fully indemnify or hold 
the United States harmless for liability, damage, or claims arising in 
connection with your use and occupancy of the right-of-way area.
    (f) We address liability of state, tribal, and local governments in 
Sec.  2807.13 of this subpart.
    (g) The provisions of this section do not limit or exclude other 
remedies.


Sec.  2807.13  As grant holders, what liabilities do state, tribal, and 
local governments have?

    (a) If you are a state, tribal, or local government or its agency 
or instrumentality, you are liable to the fullest extent law allows at 
the time that BLM issues your grant. If you do not have the legal power 
to assume full liability, you must repair damages or make restitution 
to the fullest extent of your powers.
    (b) BLM may require you to provide a bond, insurance, or other 
acceptable security to:
    (1) Protect the liability exposure of the United States to claims 
by third parties arising out of your use and occupancy of the right-of-
way;
    (2) Cover any losses, damages, or injury to human health, the 
environment, and property incurred in connection with your use and 
occupancy of the right-of-way; and
    (3) Cover any damages or injuries resulting from the release or 
discharge of hazardous materials incurred in connection with your use 
and occupancy of the right-of-way.
    (c) Based on your record of compliance and changes in risk and 
conditions, BLM may require you to increase or decrease the amount of 
your bond, insurance, or security.
    (d) The provisions of this section do not limit or exclude other 
remedies.


Sec.  2807.14  How will BLM notify me if someone else wants a grant for 
land subject to my grant or near or adjacent to it?

    BLM will notify you in writing when it receives a grant application 
for land subject to your grant or near or adjacent to it. BLM will 
consider your written recommendations as to how the proposed use 
affects the integrity of, or your ability to operate, your facilities. 
The notice will contain a time period within which you must respond. 
The notice may also notify you of additional opportunities to comment.


Sec.  2807.15  How is grant administration affected if the land my 
grant encumbers is transferred to another Federal agency or out of 
Federal ownership?

    (a) If there is a proposal to transfer the land your grant 
encumbers to another Federal agency, BLM may, after reasonable notice 
to you, transfer administration of your grant for the lands BLM 
formerly administered to another Federal agency, unless doing so would 
diminish your rights. If BLM determines your rights would be diminished 
by such a transfer, BLM can still transfer the land, but retain 
administration of your grant under existing terms and conditions.
    (b) If there is a proposal to transfer the land your grant 
encumbers out of Federal ownership, BLM may, after reasonable notice to 
you and in conformance with existing policies and procedures:
    (1) Transfer the land subject to your grant. In this case, 
administration of your grant for the lands BLM formerly administered is 
transferred to the new owner of the land;
    (2) Transfer the land, but BLM retains administration of your 
grant; or
    (3) Reserve to the United States the land your grant encumbers, and 
BLM retains administration of your grant.
    (c) BLM or, if BLM no longer administers the land, the new land 
owner may negotiate new grant terms and conditions with you. This may 
include increasing the term of your grant, should you request it, to a 
perpetual grant under Sec.  2806.23(c) of this part or providing for an 
easement.


Sec.  2807.16  Under what conditions may BLM order an immediate 
temporary suspension of my activities?

    (a) If BLM determines that you have violated one or more of the 
terms, conditions, or stipulations of your grant, we can order an 
immediate temporary suspension of activities within the right-of-way 
area to protect public health or safety or the environment. BLM can 
require you to stop your activities before holding an administrative 
proceeding on the matter.
    (b) BLM may issue the immediate temporary suspension order orally 
or in writing to you, your contractor or subcontractor, or to any 
representative, agent, or employee representing you or conducting the 
activity. When you receive the order, you must stop the activity 
immediately. BLM will, as soon as practical, confirm an oral order by 
sending or hand delivering to you or your agent at your address a 
written suspension order explaining the reasons for it.
    (c) You may file a written request for permission to resume 
activities at any time after BLM issues the order. In the request, give 
the facts supporting your request and the reasons you believe that BLM 
should lift the order. BLM must grant or deny your request within 5 
business days after receiving it. If BLM does not respond within 5 
business days, BLM has denied your request. You may appeal the denial 
under Sec.  2801.10 of this part.
    (d) The immediate temporary suspension order is effective until you 
receive BLM's written notice to proceed with your activities.


Sec.  2807.17  Under what conditions may BLM suspend or terminate my 
grant?

    (a) BLM may suspend or terminate your grant if you do not comply 
with applicable laws and regulations or any terms, conditions, or 
stipulations of the grant (such as rent payments), or if you abandon 
the right-of-way.
    (b) A grant also terminates when:
    (1) The grant contains a term or condition that has been met that 
requires the grant to terminate;
    (2) BLM consents in writing to your request to terminate the grant; 
or
    (3) It is required by law to terminate.
    (c) Your failure to use your right-of-way for its authorized 
purpose for any continuous 5-year period creates a presumption of 
abandonment. BLM will notify you in writing of this presumption. You 
may rebut the presumption of abandonment by proving that you used the 
right-of-way or that your failure to use the right-of-way was due to 
circumstances beyond your control, such as acts of God, war, or 
casualties not attributable to you.
    (d) You may appeal a decision under this section under Sec.  
2801.10 of this part.


Sec.  2807.18  How will I know that BLM intends to suspend or terminate 
my grant?

    (a) Before BLM suspends or terminates your grant under Sec.  
2807.17(a) of this subpart, it will send you a written notice stating 
that it intends to suspend or terminate your grant and giving the 
grounds for such action. The notice will give you a reasonable 
opportunity to correct any noncompliance or start or resume use of the 
right-of-way, as appropriate.
    (b) To suspend or terminate a grant issued as an easement, BLM must 
give you written notice and refer the matter to the Office of Hearings 
and Appeals for a hearing before an ALJ under 5 U.S.C. 554. No hearing 
is required if the grant provided by its terms for

[[Page 21077]]

termination on the occurrence of a fixed or agreed upon condition, 
event, or time. If the ALJ determines that grounds for suspension or 
termination exist and such action is justified, BLM will suspend or 
terminate the grant.


Sec.  2807.19  When my grant terminates, what happens to any facilities 
on it?

    (a) After your grant terminates, you must remove any facilities 
within the right-of-way within a reasonable time, as determined by BLM, 
unless BLM instructs you otherwise in writing, or termination is due to 
non-payment of rent (see Sec.  2806.13(c) of this part).
    (b) After removing the facilities, you must remediate and restore 
the right-of-way area to a condition satisfactory to BLM, including the 
removal and clean up of any hazardous materials.
    (c) If you do not remove all facilities within a reasonable period 
as determined by BLM, BLM may declare them to be the property of the 
United States. However, you are still liable for the costs of removing 
them and for remediating and restoring the right-of-way area.


Sec.  2807.20  When must I amend my application, seek an amendment of 
my grant, or obtain a new grant?

    (a) You must amend your application or seek an amendment of your 
grant when there is a proposed substantial deviation in location or 
use.
    (b) The requirements to amend an application or grant are the same 
as those for a new application, including paying processing and 
monitoring fees and rent according to Sec. Sec.  2804.14, 2805.16, and 
2806.10 of this part.
    (c) Any activity not authorized by your grant may subject you to 
prosecution under applicable law and to trespass charges under subpart 
2808 of this part.
    (d) If your grant was issued prior to October 21, 1976, and there 
is a proposed substantial deviation in the location or use or terms and 
conditions of your right-of-way grant, you must apply for a new grant 
consistent with the remainder of this section. BLM may respond to your 
request in one of the following ways:
    (1) If BLM approves your application, BLM will terminate your old 
grant and you will receive a new grant under 43 U.S.C. 1761 et seq. and 
the regulations in this part. BLM may include the same terms and 
conditions in the new grant as were in the original grant as to annual 
rent, duration, and nature of interest if BLM determines, based on 
current land use plans and other management decisions, that it is in 
the public interest to do so; or
    (2) Alternatively, BLM may keep the old grant in effect and issue a 
new grant for the new use or location, or terms and conditions.
    (e) You must apply for a new grant to allow realignment of your 
railroad and appurtenant communication facilities. BLM must issue a 
decision within 6 months after it receives your complete application. 
BLM may include the same terms and conditions in the new grant as were 
in the original grant as to annual rent, duration, and nature of 
interest if:
    (1) These terms are in the public interest;
    (2) The lands are of approximately equal value; and
    (3) The lands involved are not within an incorporated community.


Sec.  2807.21  May I assign my grant?

    (a) With BLM's approval, you may assign, in whole or in part, any 
right or interest in a grant.
    (b) In order to assign a grant, the proposed assignee must file an 
application and satisfy the same procedures and standards as for a new 
grant, including paying processing fees (see subpart 2804 of this 
part).
    (c) The assignment application must also include:
    (1) Documentation that the assignor agrees to the assignment; and
    (2) A signed statement that the proposed assignee agrees to comply 
with and be bound by the terms and conditions of the grant that is 
being assigned and all applicable laws and regulations.
    (d) BLM will not recognize an assignment until it approves it in 
writing. BLM will approve the assignment if doing so is in the public 
interest. BLM may modify the grant or add bonding and other 
requirements, including additional terms and conditions, to the grant 
when approving the assignment. BLM may decrease rents if the new holder 
qualifies for an exemption (see Sec.  2806.14 of this part), or waiver 
or reduction (see Sec.  2806.15 of this part) and the previous holder 
did not. Similarly, BLM may increase rents if the previous holder 
qualified for an exemption or waiver or reduction and the new holder 
does not. If BLM approves the assignment, the benefits and liabilities 
of the grant apply to the new grant holder.
    (e) The processing time and conditions described at Sec.  
2804.25(c) of this part apply to assignment applications.


Sec.  2807.22  How do I renew my grant?

    (a) If your grant specifies that it is renewable, and you choose to 
renew it, you must apply to BLM to renew the grant at least 120 
calendar days before your grant expires. BLM will renew the grant if 
you are complying with the terms, conditions, and stipulations of the 
grant and applicable laws and regulations.
    (b) If your grant does not address whether it is renewable, you may 
apply to BLM to renew the grant. You must send BLM your application at 
least 120 calendar days before your grant expires. In your application 
you must show that you are complying with the terms, conditions, and 
stipulations of the grant and applicable laws and regulations. BLM has 
the discretion to renew the grant if doing so is in the public 
interest.
    (c) Submit your application under paragraph (a) or (b) of this 
section and include the same information necessary for a new 
application (see subpart 2804 of this part). You must reimburse BLM in 
advance for the administrative costs of processing the renewal in 
accordance with Sec.  2804.14 of this part.
    (d) BLM will review your application and determine the applicable 
terms and conditions of any renewed grant.
    (e) BLM will not renew grants issued before October 21, 1976. If 
you hold such a grant and would like to continue to use the right-of-
way beyond your grant's expiration date, you must apply to BLM for a 
new FLPMA grant (see subpart 2804 of this part). You must send BLM your 
application at least 120 calendar days before your grant expires.
    (f) If BLM denies your application, you may appeal the decision 
under Sec.  2801.10 of this part.

Subpart 2808--Trespass


Sec.  2808.10  What is trespass?

    (a) Trespass is using, occupying, or developing the public lands or 
their resources without a required authorization or in a way that is 
beyond the scope and terms and conditions of your authorization. 
Trespass is a prohibited act.
    (b) Trespass includes acts or omissions causing unnecessary or 
undue degradation to the public lands or their resources. In 
determining whether such degradation is occurring, BLM may consider the 
effects of the activity on resources and land uses outside the area of 
the activity.
    (c) There are two kinds of trespass, willful and non-willful.
    (1) Willful trespass is voluntary or conscious trespass and 
includes trespass committed with criminal or malicious intent. It 
includes a consistent pattern of actions taken with knowledge, even if 
those actions are taken in the belief that the conduct is reasonable or 
legal.

[[Page 21078]]

    (2) Non-willful trespass is trespass committed by mistake or 
inadvertence.


Sec.  2808.11  What will BLM do if it determines that I am in trespass?

    (a) BLM will notify you in writing of the trespass and explain your 
liability. Your liability includes:
    (1) Reimbursing the United States for all costs incurred in 
investigating and terminating the trespass;
    (2) Paying the rental for the lands, as provided for in subpart 
2806 of this part, for the current and past years of trespass, or, 
where applicable, the cumulative value of the current use fee, 
amortization fee, and maintenance fee for unauthorized use of any BLM-
administered road; and
    (3) Rehabilitating and restoring any damaged lands or resources. If 
you do not rehabilitate and restore the lands and resources within the 
time set by BLM in the notice, you will be liable for the costs the 
United States incurs in rehabilitating and restoring the lands and 
resources.
    (b) In addition to amounts you owe under paragraph (a) of this 
section, BLM may assess penalties as follows:
    (1) For willful or repeated non-willful trespass, the penalty is 
two times the rent. For roads, the penalty is two times the charges for 
road use, amortization, and maintenance which have accrued since the 
trespass began.
    (2) For non-willful trespass not resolved within 30 calendar days 
after receiving the written notice under paragraph (a) of this section, 
the penalty is an amount equal to the rent. To resolve the trespass you 
must meet one of the conditions identified in 43 CFR 9239.7-1. For 
roads, the penalty is an amount equal to the charges for road use, 
amortization, and maintenance which have accrued since the trespass 
began.
    (c) The penalty will not be less than the fee for a Processing 
Category 2 application (see Sec.  2804.14 of this part) for non-willful 
trespass or less than three times this amount for willful or repeated 
non-willful trespass. You must pay whichever is the higher of:
    (1) The amount computed in paragraph (b) of this section; or
    (2) The minimum penalty amount in paragraph (c) of this section.
    (d) In addition to civil penalties under paragraph (b) of this 
section, you may be tried before a United States magistrate judge and 
fined no more than $1,000 or imprisoned for no more than 12 months, or 
both, for a knowing and willful trespass, as provided at 43 CFR 9262.1 
and 43 U.S.C. 1733(a).
    (e) Until you comply with the requirements of 43 CFR 9239.7-1, BLM 
will not process any of your applications for any activities on BLM 
lands.
    (f) You may appeal a trespass decision under Sec.  2801.10 of this 
part.
    (g) Nothing in this section limits your liability under any other 
Federal or state law.


Sec.  2808.12  May I receive a grant if I am or have been in trespass?

    Until you satisfy your liability for a trespass, BLM will not 
process any applications you have pending for any activity on BLM-
administered lands. A history of trespass will not necessarily 
disqualify you from receiving a grant. In order to correct a trespass, 
you must apply under the procedures described at subpart 2804 of this 
part. BLM will process your application as if it were a new use. Prior 
unauthorized use does not create a preference for receiving a grant.

Subpart 2809--Grants for Federal Agencies


Sec.  2809.10  Do the regulations in this part apply to Federal 
agencies?

    The regulations in this part apply to Federal agencies to the 
extent possible, except that:
    (a) BLM may suspend or terminate a Federal agency's grant only if:
    (1) The terms and conditions of the Federal agency's grant allow 
it; or
    (2) The agency head holding the grant consents to it; and
    (b) Federal agencies are generally not required to pay rent for a 
grant (see Sec.  2806.14 of this part).

PART 2810--TRAMROADS AND LOGGING ROADS

0
2. Revise the authority citation for part 2810 to read as follows:

    Authority: 43 U.S.C. 1181e, 1732, 1733, and 1740.


0
3. Revise Sec.  2812.1-3 to read as follows:


Sec.  2812.1-3  Unauthorized use, occupancy, or development.

    Any use, occupancy, or development of the Revested Oregon and 
California Railroad and Reconveyed Coos Bay Wagon Road Grant Lands 
(O&C) lands (as is defined in 43 CFR 2812.0-5(e)), for tramroads 
without an authorization pursuant to this subpart, or which is beyond 
the scope and specific limitations of such an authorization, or that 
cause unnecessary or undue degradation, is prohibited and shall 
constitute a trespass as defined in Sec.  2808.10 of this chapter. 
Anyone determined by the authorized officer to be in violation of this 
section shall be notified of such trespass in writing and shall be 
liable to the United States for all costs and payments determined in 
the same manner as set forth in subpart 2808 of this chapter.

0
4. Revise part 2880 to read as follows:

PART 2880--RIGHTS-OF-WAY UNDER THE MINERAL LEASING ACT

Subpart 2881--General Information
Sec.
2881.2 What is the objective of BLM's right-of-way program?
2881.5 What acronyms and terms are used in the regulations in this 
part?
2881.7 Scope.
2881.9 Severability.
2881.10 How do I appeal a BLM decision issued under the regulations 
in this part?
2881.11 When do I need a grant from BLM for an oil and gas pipeline?
2881.12 When do I need a TUP for an oil and gas pipeline?
Subpart 2882--Lands Available for MLA Grants and TUPs
2882.10 What lands are available for grants or TUPs?
Subpart 2883--Qualifications for Holding MLA Grants and TUPs
2883.10 Who may hold a grant or TUP?
2883.11 Who may not hold a grant or TUP?
2883.12 How do I prove I am qualified to hold a grant or TUP?
2883.13 What happens if BLM issues me a grant or TUP and later 
determines that I am not qualified to hold it?
2883.14 What happens to my application, grant, or TUP if I die?
Subpart 2884--Applying For MLA Grants or TUPs
2884.10 What should I do before I file my application?
2884.11 What information must I submit in my application?
2884.12 What is the processing fee for a grant or TUP application?
2884.13 Who is exempt from paying processing and monitoring fees?
2884.14 When does BLM reevaluate the processing and monitoring fees?
2884.15 What is a Master Agreement (Processing Category 5) and what 
information must I provide to BLM when I request one?
2884.16 What provisions do Master Agreements contain and what are 
their limitations?
2884.17 How will BLM process my Processing Category 6 application?
2884.18 What if there are two or more competing applications for the 
same pipeline?
2884.19 Where do I file my application for a grant or TUP?
2884.20 What are the public notification requirements for my 
application?
2884.21 How will BLM process my application?
2884.22 Can BLM ask me for additional information?
2884.23 Under what circumstances may BLM deny my application?

[[Page 21079]]

2884.24 What fees do I owe if BLM denies my application or if I 
withdraw my application?
2884.25 What activities may I conduct on BLM lands covered by my 
application for a grant or TUP while BLM is processing my 
application?
2884.26 When will BLM issue the grant or TUP when the lands are 
managed by two or more Federal agencies?
2884.27 What additional requirement is necessary for grants or TUPs 
for pipelines 24 or more inches in diameter?
Subpart 2885--Terms and Conditions of MLA Grants and TUPs
2885.10 When is a grant or TUP effective?
2885.11 What terms and conditions must I comply with?
2885.12 What rights does a grant or TUP convey?
2885.13 What rights does the United States retain?
2885.14 What happens if I need a right-of-way wider than 50 feet 
plus the ground occupied by the pipeline and related facilities?
2885.15 How will BLM charge me rent?
2885.16 When do I pay rent?
2885.17 What happens if I pay the rent late?
2885.18 When must I make estimated rent payments to BLM?
2885.19 What is the rent for a linear right-of-way?
2885.20 How will BLM calculate my rent for linear rights-of-way the 
schedule covers?
2885.21 How must I make rent payments for my grant or TUP?
2885.22 How will BLM calculate rent for communication uses ancillary 
to a linear grant, TUP, or other use authorization?
2885.23 If I hold a grant or TUP, what monitoring fees must I pay?
2885.24 When do I pay monitoring fees?
Subpart 2886--Operations on MLA Grants and TUPs
2886.10 When can I start activities under my grant or TUP?
2886.11 Who regulates activities within my right-of-way or TUP area?
2886.12 When must I contact BLM during operations?
2886.13 If I hold a grant or TUP, for what am I liable?
2886.14 As grant or TUP holders, what liabilities do state, tribal, 
and local governments have?
2886.15 How is grant or TUP administration affected if the BLM land 
my grant or TUP encumbers is transferred to another Federal agency 
or out of Federal ownership?
2886.16 Under what conditions may BLM order an immediate temporary 
suspension of my activities?
2886.17 Under what conditions may BLM suspend or terminate my grant 
or TUP?
2886.18 How will I know that BLM intends to suspend or terminate my 
grant or TUP?
2886.19 When my grant or TUP terminates, what happens to any 
facilities on it?
Subpart 2887--Amending, Assigning, or Renewing MLA Grants and TUPs
2887.10 When must I amend my application, seek an amendment of my 
grant or TUP, or obtain a new grant or TUP?
2887.11 May I assign my grant or TUP?
2887.12 How do I renew my grant?
Subpart 2888--Trespass
2888.10 What is trespass?
2888.11 May I receive a grant if I am or have been in trespass?

    Authority: 30 U.S.C. 185 and 189.

Subpart 2881--General Information


Sec.  2881.2  What is the objective of BLM's right-of-way program?

    It is BLM's objective to grant rights-of-way under the regulations 
in this part to any qualified individual, business, or government 
entity and to direct and control the use of rights-of-way on public 
lands in a manner that:
    (a) Protects the natural resources associated with Federal lands 
and adjacent lands, whether private or administered by a government 
entity;
    (b) Prevents unnecessary or undue degradation to public lands;
    (c) Promotes the use of rights-of-way in common considering 
engineering and technological compatibility, national security, and 
land use plans; and
    (d) Coordinates, to the fullest extent possible, all BLM actions 
under the regulations in this part with state and local governments, 
interested individuals, and appropriate quasi-public entities.


Sec.  2881.5  What acronyms and terms are used in the regulations in 
this part?

    (a) Acronyms. Unless an acronym is listed in this section, the 
acronyms listed in part 2800 of this chapter apply to this part. As 
used in this part:
    MLA means the Mineral Leasing Act of 1920, as amended (30 U.S.C. 
185).
    TAPS means the Trans-Alaska Oil Pipeline System.
    TUP means a temporary use permit.
    (b) Terms. Unless a term is defined in this part, the defined terms 
in part 2800 of this chapter apply to this part. As used in this part, 
the term:
    Act means section 28 of the Mineral Leasing Act of 1920, as amended 
(30 U.S.C. 185).
    Actual costs means the financial measure of resources the Federal 
government expends or uses in processing a right-of-way application or 
in monitoring the construction, operation, and termination of a 
facility authorized by a grant or permit. Actual costs include both 
direct and indirect costs, exclusive of management overhead costs.
    Casual use means activities ordinarily resulting in no or 
negligible disturbance of the public lands, resources, or improvements. 
Examples of casual use include: Surveying, marking routes, and 
collecting data to prepare applications for grants or TUPs.
    Facility means an improvement or structure, whether existing or 
planned, that is, or would be, owned and controlled by the grant or TUP 
holder within the right-of-way or TUP area.
    Federal lands means all lands owned by the United States, except 
lands:
    (1) In the National Park System;
    (2) Held in trust for an Indian or Indian tribe; or
    (3) On the Outer Continental Shelf.
    Grant means any authorization or instrument BLM issues under 
section 28 of the Mineral Leasing Act, 30 U.S.C. 185, authorizing a 
nonpossessory, nonexclusive right to use Federal lands to construct, 
operate, maintain, or terminate a pipeline. The term includes those 
authorizations and instruments BLM and its predecessors issued for like 
purposes before November 16, 1973, under then existing statutory 
authority. It does not include authorizations issued under FLPMA (43 
U.S.C. 1761 et seq.).
    Monitoring means those actions, subject to Sec.  2886.11 of this 
part, that the Federal government performs to ensure compliance with 
the terms, conditions, and stipulations of a grant or TUP.
    (1) For Monitoring Categories 1 through 4, the actions include 
inspecting construction, operation, maintenance, and termination of 
permanent or temporary facilities and protection and rehabilitation 
activities until the holder completes rehabilitation of the right-of-
way or TUP area and BLM approves it;
    (2) For Monitoring Category 5 (Master Agreements), those actions 
agreed to in the Master Agreement; and
    (3) For Monitoring Category 6, those actions agreed to between BLM 
and the applicant before BLM issues the grant or TUP.
    Oil or gas means oil, natural gas, synthetic liquid or gaseous 
fuels, or any refined product produced from them.
    Pipeline means a line crossing Federal lands for transportation of 
oil or gas. The term includes feeder lines, trunk lines, and related 
facilities, but does not include a lessee's or lease operator's 
production facilities located on its oil and gas lease.
    Pipeline system means all facilities, whether or not located on 
Federal lands, used by a grant holder in connection with the 
construction, operation, maintenance, or termination of a pipeline.

[[Page 21080]]

    Production facilities means a lessee's or lease operator's pipes 
and equipment used on its oil and gas lease to aid in extracting, 
processing, and storing oil or gas. The term includes:
    (1) Storage tanks and processing equipment;
    (2) Gathering lines upstream from such tanks and equipment, or in 
the case of gas, upstream from the point of delivery; and
    (3) Pipes and equipment, such as water and gas injection lines, 
used in the production process for purposes other than carrying oil and 
gas downstream from the wellhead.
    Related facilities means those structures, devices, improvements, 
and sites, located on Federal lands, which may or may not be connected 
or contiguous to the pipeline, the substantially continuous use of 
which is necessary for the operation or maintenance of a pipeline, such 
as:
    (1) Supporting structures;
    (2) Airstrips;
    (3) Roads;
    (4) Campsites;
    (5) Pump stations, including associated heliports, structures, 
yards, and fences;
    (6) Valves and other control devices;
    (7) Surge and storage tanks;
    (8) Bridges;
    (9) Monitoring and communication devices and structures housing 
them;
    (10) Terminals, including structures, yards, docks, fences, and 
storage tank facilities;
    (11) Retaining walls, berms, dikes, ditches, cuts and fills; and
    (12) Structures and areas for storing supplies and equipment.
    Right-of-way means the Federal lands BLM authorizes a holder to use 
or occupy under a grant.
    Substantial deviation means a change in the authorized location or 
use which requires:
    (1) Construction or use outside the boundaries of the right-of-way 
or TUP area; or
    (2) Any change from, or modification of, the authorized use. 
Examples of substantial deviation include: Adding equipment, overhead 
or underground lines, pipelines, structures, or other facilities not 
included in the original grant or TUP.
    Temporary use permit or TUP means a document BLM issues under 30 
U.S.C. 185 that is a revocable, nonpossessory privilege to use 
specified Federal lands in the vicinity of and in connection with a 
right-of-way, to construct, operate, maintain, or terminate a pipeline 
or to protect the environment or public safety. A TUP does not convey 
any interest in land.
    Third party means any person or entity other than BLM, the 
applicant, or the holder of a right-of-way authorization.


Sec.  2881.7  Scope.

    (a) What do these regulations apply to? The regulations in this 
part apply to:
    (1) Issuing grants and TUPs for pipelines to transport oil or gas, 
and administering, amending, assigning, renewing, and terminating them;
    (2) All grants and permits BLM and its predecessors previously 
issued under section 28 of the Act; and
    (3) Pipeline systems, or parts thereof, within a Federal oil and 
gas lease owned by:
    (i) A party who is not the lessee or lease operator; or
    (ii) The lessee or lease operator which are downstream from a 
custody transfer metering device.
    (b) What don't these regulations apply to? The regulations in this 
part do not apply to:
    (1) Production facilities on an oil and gas lease which operate for 
the benefit of the lease. The lease authorizes these production 
facilities;
    (2) Pipelines crossing Federal lands under the jurisdiction of a 
single Federal department or agency other than BLM, including bureaus 
and agencies within the Department of the Interior;
    (3) Authorizations BLM issues to Federal agencies for oil or gas 
transportation under Sec.  2801.6 of this chapter; or
    (4) Authorizations BLM issues under Title V of the Federal Land 
Policy and Management Act of 1976 (see part 2800 of this chapter).
    (c) Notwithstanding the definition of ``grant'' in section 2881.5 
of this subpart, the regulations in this part apply, consistent with 43 
U.S.C. 1652(c), to any authorization issued by the Secretary of the 
Interior or his or her delegate under 43 U.S.C. 1652(b) for the Trans-
Alaska Oil Pipeline System.


Sec.  2881.9  Severability.

    If a court holds any provisions of the regulations in this part or 
their applicability to any person or circumstances invalid, the 
remainder of these rules and their applicability to other people or 
circumstances will not be affected.


Sec.  2881.10  How do I appeal a BLM decision issued under the 
regulations in this part?

    (a) You may appeal a BLM decision issued under the regulations in 
this part in accordance with part 4 of this title.
    (b) All BLM decisions under this part remain in effect pending 
appeal unless the Secretary of the Interior rules otherwise, or as 
noted in this part. You may petition for a stay of a BLM decision under 
this part with the Office of Hearings and Appeals, Department of the 
Interior. Unless otherwise noted in this part, BLM will take no action 
on your application while your appeal is pending.


Sec.  2881.11  When do I need a grant from BLM for an oil and gas 
pipeline?

    You must have a BLM grant under 30 U.S.C. 185 for an oil or gas 
pipeline or related facility to cross Federal lands under:
    (a) BLM's jurisdiction; or
    (b) The jurisdiction of two or more Federal agencies.


Sec.  2881.12  When do I need a TUP for an oil and gas pipeline?

    You must obtain a TUP from BLM when you require temporary use of 
more land than your grant authorizes in order to construct, operate, 
maintain, or terminate your pipeline, or to protect the environment or 
public safety.

Subpart 2882--Lands Available for MLA Grants and TUPs


Sec.  2882.10  What lands are available for grants or TUPs?

    (a) For lands BLM exclusively manages, we use the same criteria to 
determine whether lands are available for grants or TUPs as we do to 
determine whether lands are available for FLPMA grants (see subpart 
2802 of this chapter).
    (b) BLM may require common use of a right-of-way and may restrict 
new grants to existing right-of-way corridors where safety and other 
considerations allow. Generally, BLM land use plans designate right-of-
way corridors.
    (c) Where a proposed oil or gas right-of-way involves lands managed 
by two or more Federal agencies, see Sec.  2884.26 of this part.

Subpart 2883--Qualifications for Holding MLA Grants and TUPs


Sec.  2883.10  Who may hold a grant or TUP?

    To hold a grant or TUP under these regulations, you must be:
    (a)(1) A United States citizen, an association of such citizens, or 
a corporation, partnership, association, or similar business entity 
organized under the laws of the United States, or of any state therein; 
or
    (2) A state or local government; and
    (b) Financially and technically able to construct, operate, 
maintain, and terminate the proposed facilities.

[[Page 21081]]

Sec.  2883.11  Who may not hold a grant or TUP?

    Aliens may not acquire or hold any direct or indirect interest in 
grants or TUPs, except that they may own or control stock in 
corporations holding grants or TUPs if the laws of their country do not 
deny similar or like privileges to citizens of the United States.


Sec.  2883.12  How do I prove I am qualified to hold a grant or TUP?

    (a) If you are a private individual, BLM requires no proof of 
citizenship with your application;
    (b) If you are a partnership, corporation, association, or other 
business entity, submit the following information, as applicable, in 
your application:
    (1) Copies of the formal documents creating the business entity, 
such as articles of incorporation, and including the corporate bylaws;
    (2) Evidence that the party signing the application has the 
authority to bind the applicant;
    (3) The name, address, and citizenship of each participant (e.g., 
partner, associate, or other) in the business entity;
    (4) The name, address, and citizenship of each shareholder owning 3 
percent or more of each class of shares, and the number and percentage 
of any class of voting shares of the business entity which such 
shareholder is authorized to vote;
    (5) The name and address of each affiliate of the business entity;
    (6) The number of shares and the percentage of any class of voting 
stock owned by the business entity, directly or indirectly, in any 
affiliate controlled by the business entity; and
    (7) The number of shares and the percentage of any class of voting 
stock owned by an affiliate, directly or indirectly, in the business 
entity controlled by the affiliate.
    (c) If you have already supplied this information to BLM and the 
information remains accurate, you only need to reference the existing 
or previous BLM serial number under which it is filed.


Sec.  2883.13  What happens if BLM issues me a grant or TUP and later 
determines that I am not qualified to hold it?

    If BLM issues you a grant or TUP, and later determines that you are 
not qualified to hold it, BLM will terminate your grant or TUP under 30 
U.S.C. 185(o). You may appeal this decision under Sec.  2881.10 of this 
part.


Sec.  2883.14  What happens to my application, grant, or TUP if I die?

    (a) If an applicant or grant or TUP holder dies, any inheritable 
interest in the application, grant, or TUP will be distributed under 
state law.
    (b) If the distributee of a grant or TUP is not qualified to hold a 
grant or TUP under Sec.  2883.10 of this subpart, BLM will recognize 
the distributee as grant or TUP holder and allow the distributee to 
hold its interest in the grant or TUP for up to two years. During that 
period, the distributee must either become qualified or divest itself 
of the interest.

Subpart 2884--Applying for MLA Grants or TUPs


Sec.  2884.10  What should I do before I file my application?

    (a) When you determine that a proposed oil and gas pipeline system 
would cross Federal lands under BLM jurisdiction, or under the 
jurisdiction of two or more Federal agencies, you should notify BLM.
    (b) Before filing an application with BLM, we encourage you to make 
an appointment for a preapplication meeting with the appropriate 
personnel in the BLM field office nearest the lands you seek to use. 
During the preapplication meeting BLM can:
    (1) Identify potential routing and other constraints;
    (2) Determine whether or not the lands are located within a 
designated or existing right-of-way corridor;
    (3) Tentatively schedule the processing of your proposed 
application;
    (4) Provide you information about qualifications for holding grants 
and TUPs, and inform you of your financial obligations, such as 
processing and monitoring costs and rents; and
    (5) Identify any work which will require obtaining one or more 
TUPs.
    (c) BLM may share this information with Federal, state, tribal, and 
local government agencies to ensure that these agencies are aware of 
any authorizations you may need from them.
    (d) BLM will keep confidential any information in your application 
that you mark as ``confidential'' or ``proprietary'' to the extent 
allowed by law.


Sec.  2884.11  What information must I submit in my application?

    (a) File your application on Form SF-299 or as part of an 
Application for Permit to Drill or Reenter (BLM Form 3160-3) or Sundry 
Notice and Report on Wells (BLM Form 3160-5), available from any BLM 
office. Provide a complete description of the project, including:
    (1) The exact diameters of the pipes and locations of the 
pipelines;
    (2) Proposed construction and reclamation techniques; and
    (3) The estimated life of the facility.
    (b) File with BLM copies of any applications you file with other 
Federal agencies, such as the Federal Energy Regulatory Commission (see 
18 CFR chapter I), for licenses, certificates, or other authorities 
involving the right-of-way.
    (c) BLM may ask you to submit additional information beyond that 
required in the form to assist us in processing your application. This 
information may include:
    (1) A list of any Federal and state approvals required for the 
proposal;
    (2) A description of alternative route(s) and mode(s) you 
considered when developing the proposal;
    (3) Copies of, or reference to, all similar applications or grants 
you have submitted, currently hold, or have held in the past;
    (4) A statement of the need and economic feasibility of the 
proposed project;
    (5) The estimated schedule for constructing, operating, 
maintaining, and terminating the project (a Plan of Development);
    (6) A map of the project, showing its proposed location and showing 
existing facilities adjacent to the proposal;
    (7) A statement certifying that you are of legal age and authorized 
to do business in the state(s) where the right-of-way would be located, 
and that you have submitted correct information to the best of your 
knowledge;
    (8) A statement of the environmental, social, and economic effects 
of the proposal;
    (9) A statement of your financial and technical capability to 
construct, operate, maintain, and terminate the project;
    (10) Proof that you are a United States citizen; and
    (11) Any other information BLM considers necessary to process your 
application.
    (d) Before BLM reviews your application for a grant, grant 
amendment, or grant renewal, you must submit the following information 
and material to ensure that the facilities will be constructed, 
operated, and maintained as common carriers under 30 U.S.C. 185(r):
    (1) Conditions for, and agreements among, owners or operators to 
add pumping facilities and looping, or otherwise to increase the 
pipeline or terminal's throughput capacity in response to actual or 
anticipated increases in demand;

[[Page 21082]]

    (2) Conditions for adding or abandoning intake, offtake, or storage 
points or facilities; and
    (3) Minimum shipment or purchase tenders.
    (e) If conditions or information affecting your application change, 
promptly notify BLM and submit to BLM in writing the necessary changes 
to your application. BLM may deny your application if you fail to do 
so.


Sec.  2884.12  What is the processing fee for a grant or TUP 
application?

    (a) You must pay a fee with the application to cover the costs to 
the Federal Government of processing your application before the 
Federal Government incurs them. The fees for Processing Categories 1 
through 4 (see paragraph (b) of this section) are one-time fees and are 
not refundable. The fees are categorized based on an estimate of the 
amount of time that the Federal Government will expend to process your 
application and issue a decision granting or denying the application.
    (b) There is no processing fee if work is estimated to take one 
hour or less. Processing fees are based on categories. These categories 
and fees for 2005 are:

                                          2005 Processing Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                                  Processing fee per application as of June 21,
                                          Federal work hours    2005. To be adjusted annually for changes in the
         Processing category                   involved          IPD-GDP. See paragraph (c) of this section for
                                                                               update information
----------------------------------------------------------------------------------------------------------------
(1) Applications for new grants or     Estimated Federal work   $97.
 TUPs, assignments, renewals, and       hours are >1 <=8.
 amendments to existing grants or
 TUPs.
(2) Applications for new grants or     Estimated Federal work   $343.
 TUPs, assignments, renewals, and       hours are >8 <=24.
 amendments to existing grants or
 TUPs.
(3) Applications for new grants or     Estimated Federal work   $644.
 TUPs, assignments, renewals, and       hours are >24 <=36.
 amendments to existing grants or
 TUPs.
(4) Applications for new grants or     Estimated Federal work   $923.
 TUPs, assignments, renewals, and       hours are >36 <=50.
 amendments to existing grants or
 TUPs.
(5) Master Agreements................  Varies.................  As specified in the Agreement.
(6) Applications for new grants or     Estimated Federal work   Actual costs (see Sec.   2884.17 of this part).
 TUPs, assignments, renewals, and       hours are >50.
 amendments to existing grants or
 TUPs.
----------------------------------------------------------------------------------------------------------------

    (c) BLM will revise paragraph (b) of this section to update the 
processing fees for Categories 1 through 4 in the schedule each 
calendar year, based on the previous year's change in the IPD-GDP, as 
measured second quarter to second quarter. BLM will round these changes 
to the nearest dollar. BLM will update Category 5 processing fees as 
specified in the Master Agreement. You also may obtain a copy of the 
current schedule from any BLM state or field office or by writing: 
Director, BLM, 1849 C St., NW., Mail Stop 1000LS, Washington, DC 20240. 
BLM also posts the current schedule on the BLM Homepage on the Internet 
at http://www.blm.gov.
    (d) After an initial review of your application, BLM will notify 
you of the processing category into which your application fits. You 
must then submit the appropriate payment for that category before BLM 
begins processing your application. Your signature on a cost recovery 
Master Agreement constitutes your agreement with the processing 
category decision. If you disagree with the category that BLM has 
determined for your application, you may appeal the decision under 
Sec.  2881.10 of this part. If you paid the processing fee and you 
appeal a Processing Category 1 through 4 or a Processing Category 6 
determination to IBLA, BLM will process your application while the 
appeal is pending. If IBLA finds in your favor, you will receive a 
refund or adjustment of your processing fee.
    (e) In processing your application, BLM may determine at any time 
that the application requires preparing an EIS. If this occurs, BLM 
will send you a decision changing your processing category to 
Processing Category 6. You may appeal the decision under Sec.  2881.10 
of this part.
    (f) If you hold an authorization relating to TAPS, BLM will send 
you a written statement seeking reimbursement of actual costs within 60 
calendar days after the close of each quarter. Quarters end on the last 
day of March, June, September, and December. In processing applications 
and administering authorizations relating to TAPS, the Department of 
the Interior will avoid unnecessary employment of personnel and 
needless expenditure of funds.


Sec.  2884.13  Who is exempt from paying processing and monitoring 
fees?

    You are exempt from paying processing and monitoring fees if you 
are a state or local government or an agency of such a government and 
BLM issues the grant for governmental purposes benefitting the general 
public. If your principal source of revenue results from charges you 
levy on customers for services similar to those of a profit-making 
corporation or business, you are not exempt.


Sec.  2884.14  When does BLM reevaluate the processing and monitoring 
fees?

    BLM reevaluates the processing and monitoring fees (see Sec.  
2885.23 of this part) for each category and the categories themselves 
within 5 years after they go into effect and at 10-year intervals after 
that. When reevaluating processing and monitoring fees, BLM considers 
all factors that affect the fees, including, but not limited to, any 
changes in:
    (a) Technology;
    (b) The procedures for processing applications and monitoring 
grants;
    (c) Statutes and regulations relating to the right-of-way program; 
or
    (d) The IPD-GDP.


Sec.  2884.15  What is a Master Agreement (Processing Category 5) and 
what information must I provide to BLM when I request one?

    (a) A Master Agreement (Processing Category 5) is a written 
agreement covering processing and monitoring fees (see Sec.  2885.23 of 
this part) negotiated between BLM and you that involves multiple BLM 
grant or TUP approvals for projects within a defined geographic area.
    (b) Your request for a Master Agreement must:
    (1) Describe the geographic area covered by the Agreement and the 
scope of the activity you plan;
    (2) Include a preliminary work plan. This plan must state what work 
you

[[Page 21083]]

must do and what work BLM must do to process your application. Both 
parties must periodically update the work plan, as specified in the 
Agreement, and mutually agree to the changes;
    (3) Contain a preliminary cost estimate and a timetable for 
processing the application and completing the project;
    (4) State whether you want the Agreement to apply to future 
applications in the same geographic area that are not part of the same 
project(s); and
    (5) Contain any other relevant information that BLM needs to 
process the application.


Sec.  2884.16  What provisions do Master Agreements contain and what 
are their limitations?

    (a) A Master Agreement:
    (1) Specifies that you must comply with all applicable laws and 
regulations;
    (2) Describes the work you will do and the work BLM will do to 
process the application;
    (3) Describes the method of periodic billing, payment, and 
auditing;
    (4) Describes the processes, studies, or evaluations you will pay 
for;
    (5) Explains how BLM will monitor the grant and how BLM will 
recover monitoring costs;
    (6) Contains provisions allowing for periodic review and updating, 
if required;
    (7) Contains specific conditions for terminating the Agreement; and
    (8) Contains any other provisions BLM considers necessary.
    (b) BLM will not enter into any Agreement that is not in the public 
interest.


Sec.  2884.17  How will BLM process my Processing Category 6 
application?

    (a) For Processing Category 6 applications, you and BLM must enter 
into a written agreement that describes how BLM will process your 
application. The final agreement consists of a work plan and a 
financial plan.
    (b) In processing your application, BLM will:
    (1) Determine the issues subject to analysis under NEPA;
    (2) Prepare a preliminary work plan;
    (3) Develop a preliminary financial plan, which estimates the 
actual costs of processing your application and monitoring your 
project;
    (4) Discuss with you:
    (i) The preliminary plans and data;
    (ii) The availability of funds and personnel;
    (iii) Your options for the timing of processing and monitoring fee 
payments; and
    (iv) Financial information you must submit; and
    (5) Complete final scoping and develop final work and financial 
plans which reflect any work you have agreed to do. BLM will also 
present you with the final estimate of the costs you must reimburse the 
United States, including the cost for monitoring the project.
    (c) BLM retains the option to prepare any environmental documents 
related to your application. If BLM allows you to prepare any 
environmental documents and conduct any studies that BLM needs to 
process your application, you must do the work following BLM standards. 
For this purpose, you and BLM may enter into a written agreement. BLM 
will make the final determinations and conclusions arising from such 
work.
    (d) BLM will periodically, as stated in the agreement, estimate 
processing costs for a specific work period and notify you of the 
amount due. You must pay the amount due before BLM will continue 
working on your application. If your payment exceeds the costs that the 
United States incurred for the work, BLM will either adjust the next 
billing to reflect the excess, or refund you the excess under 43 U.S.C. 
1734. You may not deduct any amount from a payment without BLM's prior 
written approval.


Sec.  2884.18  What if there are two or more competing applications for 
the same pipeline?

    (a) If there are two or more competing applications for the same 
pipeline and your application is in:
    (1) Processing Categories 1 through 4. You must reimburse BLM for 
processing costs as if the other application or applications had not 
been filed.
    (2) Processing Category 6. You are responsible for processing costs 
identified in your application. If BLM cannot readily separate costs, 
such as costs associated with preparing environmental analyses, you and 
any competing applicants must pay an equal share or a proportion agreed 
to in writing among all applicants and BLM. If you agree to share costs 
that are common to your application and that of a competing applicant, 
and the competitor does not pay the agreed upon amount, you are liable 
for the entire amount due. The applicants must pay the entire 
processing fee in advance. BLM will not process the application until 
we receive the advance payments.
    (b) Who determines whether competition exists? BLM determines 
whether the applications are compatible in a single right-of-way or are 
competing applications to build the same pipeline.
    (c) If BLM determines that competition exists, BLM will describe 
the procedures for a competitive bid through a bid announcement in a 
newspaper of general circulation in the area affected by the potential 
right-of-way and by a notice in the Federal Register.


Sec.  2884.19  Where do I file my application for a grant or TUP?

    (a) If BLM has exclusive jurisdiction over the lands involved, file 
your application with the BLM Field Office having jurisdiction over the 
lands described in the application.
    (b) If another Federal agency has exclusive jurisdiction over the 
land involved, file your application with that agency and refer to its 
regulations for its requirements.
    (c) If there are no BLM-administered lands involved, but the lands 
are under the jurisdiction of two or more Federal agencies, you may 
file your application at the BLM office in the vicinity of the 
pipeline. BLM will notify you where to direct future communications 
about the pipeline.
    (d) If two or more Federal agencies, including BLM, have 
jurisdiction over the lands in the application, file it at any BLM 
office having jurisdiction over a portion of the Federal lands. BLM 
will notify you where to direct future communications about the 
pipeline.


Sec.  2884.20  What are the public notification requirements for my 
application?

    (a) When BLM receives your application, it will publish a notice in 
the Federal Register or a newspaper of general circulation in the 
vicinity of the lands involved. If BLM determines the pipeline(s) will 
have only minor environmental impacts, it is not required to publish 
this notice. The notice will, at a minimum, contain:
    (1) A description of the pipeline system; and
    (2) A statement of where the application and related documents are 
available for review.
    (b) BLM will send copies of the published notice for review and 
comment to the:
    (1) Governor of each state within which the pipeline system would 
be located;
    (2) Head of each local or tribal government or jurisdiction within 
which the pipeline system would be located; and
    (3) Heads of other Federal agencies whose jurisdiction includes 
lands within which the pipeline system would be located.
    (c) If your application involves a pipeline that is 24 inches or 
more in

[[Page 21084]]

diameter, BLM will also send notice of the application to the 
appropriate committees of Congress in accordance with 30 U.S.C. 185(w).
    (d) BLM may hold public hearings or meetings on your application if 
we determine there is sufficient interest to warrant the time and 
expense of such hearings or meetings. BLM will publish a notice of any 
such hearings or meetings in advance in the Federal Register or in a 
newspaper of general circulation in the vicinity of the lands involved.


Sec.  2884.21  How will BLM process my application?

    (a) BLM will notify you in writing when it receives your 
application and will identify your processing fee described at Sec.  
2884.12 of this subpart.
    (b) Customer service standard. BLM will process your completed 
application as follows:

------------------------------------------------------------------------
     Processing category        Processing time         Conditions
------------------------------------------------------------------------
1-4..........................  60 calendar days.  If processing your
                                                   application will take
                                                   longer than 60
                                                   calendar days, BLM
                                                   will notify you in
                                                   writing of this fact
                                                   prior to the 30th
                                                   calendar day and
                                                   inform you of when
                                                   you can expect a
                                                   final decision on
                                                   your application.
5............................  As specified in    BLM will process
                                the Master         applications as
                                Agreement.         specified in the
                                                   Agreement.
6............................  Over 60 calendar   BLM will notify you in
                                days.              writing within the
                                                   initial 60 day
                                                   processing period of
                                                   the estimated
                                                   processing time.
------------------------------------------------------------------------

    (c) Before issuing a grant or TUP, BLM will:
    (1) Complete a NEPA analysis for the application or approve a NEPA 
analysis previously completed for the application, as required by 40 
CFR parts 1500 through 1508;
    (2) Determine whether or not your proposed use complies with 
applicable Federal and state laws, regulations, and local ordinances;
    (3) Consult, as necessary, with other governmental entities;
    (4) Hold public meetings, if sufficient public interest exists to 
warrant their time and expense. BLM will publish a notice in the 
Federal Register, a newspaper of general circulation in the vicinity of 
the lands involved, or both, announcing in advance any public hearings 
or meetings; and
    (5) Take any other action necessary to fully evaluate and decide 
whether to approve or deny your application.


Sec.  2884.22  Can BLM ask me for additional information?

    (a) If we ask for additional information we will follow the 
procedures in Sec.  2804.25(b) of this chapter.
    (b) BLM may also ask other Federal agencies for additional 
information, for terms and conditions or stipulations which the grant 
or TUP should contain, and for advice as to whether or not to issue the 
grant or TUP.


Sec.  2884.23  Under what circumstances may BLM deny my application?

    (a) BLM may deny your application if:
    (1) The proposed use is inconsistent with the purpose for which BLM 
or other Federal agencies manage the lands described in your 
application;
    (2) The proposed use would not be in the public interest;
    (3) You are not qualified to hold a grant or TUP;
    (4) Issuing the grant or TUP would be inconsistent with the Act, 
other laws, or these or other regulations;
    (5) You do not have or cannot demonstrate the technical or 
financial capability to construct the pipeline or operate facilities 
within the right-of-way or TUP area; or
    (6) You do not adequately comply with a deficiency notice (see 
Sec.  2804.25(b) of this chapter) or with any BLM requests for 
additional information needed to process the application.
    (b) If BLM denies your application, you may appeal the decision 
under Sec.  2881.10 of this part.


Sec.  2884.24  What fees do I owe if BLM denies my application or if I 
withdraw my application?

    If BLM denies your application, or you withdraw it, you owe the 
processing fee set forth at Sec.  2884.12(b) of this subpart, unless 
you have a Processing Category 5 or 6 application. Then, the following 
conditions apply:
    (a) If BLM denies your Processing Category 5 or 6 application, you 
are liable for all actual costs that the United States incurred in 
processing it. The money you have not paid is due within 30 calendar 
days after receiving a bill for the amount due; and
    (b) You may withdraw your application in writing before BLM issues 
a grant or TUP. If you do so, you are liable for all actual processing 
costs the United States has incurred up to the time you withdraw the 
application and for the actual costs of terminating your application. 
Any money you have not paid is due within 30 calendar days after 
receiving a bill for the amount due.


Sec.  2884.25  What activities may I conduct on BLM lands covered by my 
application for a grant or TUP while BLM is processing my application?

    (a) You may conduct casual use activities on BLM lands covered by 
the application, as may any other member of the public. BLM does not 
require a grant or TUP for casual use on BLM lands.
    (b) For any activities on BLM lands that are not casual use, you 
must obtain prior BLM approval. To conduct activities on lands 
administered by other Federal agencies, you must obtain any prior 
approval those agencies require.


Sec.  2884.26  When will BLM issue a grant or TUP when the lands are 
managed by two or more Federal agencies?

    If the application involves lands managed by two or more Federal 
agencies, BLM will not issue or renew the grant or TUP until the heads 
of the agencies administering the lands involved have concurred. Where 
concurrence is not reached, the Secretary of the Interior, after 
consultation with these agencies, may issue or renew the grant or TUP, 
but not through lands within a Federal reservation where doing so would 
be inconsistent with the purposes of the reservation.


Sec.  2884.27  What additional requirement is necessary for grants or 
TUPs for pipelines 24 or more inches in diameter?

    If an application is for a grant or TUP for a pipeline 24 inches or 
more in diameter, BLM will not issue or renew the grant or TUP until 
after we notify the appropriate committees of Congress in accordance 
with 30 U.S.C. 185(w).

Subpart 2885--Terms and Conditions of MLA Grants and TUPs


Sec.  2885.10  When is a grant or TUP effective?

    A grant or TUP is effective after both you and BLM sign it. You 
must accept its terms and conditions in writing and pay any necessary 
rent and monitoring fees as set out in Sec. Sec.  2885.19 and 2885.23

[[Page 21085]]

of this subpart. Your written acceptance constitutes an agreement 
between you and the United States that your right to use the Federal 
lands, as specified in the grant or TUP, is subject to the terms and 
conditions of the grant or TUP and applicable laws and regulations.


Sec.  2885.11  What terms and conditions must I comply with?

    (a) Duration. All grants with a term of one year or longer will 
terminate on December 31 of the final year of the grant. The term of a 
grant may not exceed 30 years. The term of a TUP may not exceed 3 
years. BLM will consider the following factors in establishing a 
reasonable term:
    (1) The cost of the pipeline and related facilities you plan to 
construct, operate, maintain, or terminate;
    (2) The pipeline's or related facility's useful life;
    (3) The public purpose served; and
    (4) Any potentially conflicting land uses; and
    (b) Terms and conditions of use. BLM may modify your proposed use 
or change the route or location of the facilities in your application. 
By accepting a grant or TUP, you agree to use the lands described in 
the grant or TUP for the purposes set forth in the grant or TUP. You 
also agree to comply with, and be bound by, the following terms and 
conditions. During construction, operation, maintenance, and 
termination of the project you must:
    (1) To the extent practicable, comply with all existing and 
subsequently enacted, issued, or amended Federal laws and regulations, 
and state laws and regulations applicable to the authorized use;
    (2) Rebuild and repair roads, fences, and established trails 
destroyed or damaged by constructing, operating, maintaining, or 
terminating the project;
    (3) Build and maintain suitable crossings for existing roads and 
significant trails that intersect the project;
    (4) Do everything reasonable to prevent and suppress fires on or in 
the immediate vicinity of the right-of-way or TUP area;
    (5) Not discriminate against any employee or applicant for 
employment during any phase of the project because of race, creed, 
color, sex, or national origin. You must also require subcontractors to 
not discriminate;
    (6) Pay the rent and monitoring fees described in Sec. Sec.  
2885.19 and 2885.23 of this subpart;
    (7) If BLM requires, obtain and/or certify that you have obtained a 
surety bond or other acceptable security to cover any losses, damages, 
or injury to human health, the environment, and property incurred in 
connection with your use and occupancy of the right-of-way or TUP area, 
including terminating the grant or TUP, and to secure all obligations 
imposed by the grant or TUP and applicable laws and regulations. Your 
bond must cover liability for damages or injuries resulting from 
releases or discharges of hazardous materials. BLM may require a bond, 
an increase or decrease in the value of an existing bond, or other 
acceptable security at any time during the term of the grant or TUP. 
This bond is in addition to any individual lease, statewide, or 
nationwide oil and gas bonds you may have;
    (8) Assume full liability if third parties are injured or damages 
occur to property on or near the right-of-way or TUP area (see Sec.  
2886.13 of this part);
    (9) Comply with project-specific terms, conditions, and 
stipulations, including requirements to:
    (i) Restore, revegetate, and curtail erosion or any other 
rehabilitation measure BLM determines is necessary;
    (ii) Ensure that activities in connection with the grant or TUP 
comply with air and water quality standards or related facility siting 
standards contained in applicable Federal or state law or regulations;
    (iii) Control or prevent damage to scenic, aesthetic, cultural, and 
environmental values, including fish and wildlife habitat, and to 
public and private property and public health and safety;
    (iv) Protect the interests of individuals living in the general 
area who rely on the area for subsistence uses as that term is used in 
Title VIII of ANILCA (16 U.S.C. 3111 et seq.); and
    (v) Ensure that you construct, operate, maintain, and terminate the 
facilities on the lands in the right-of-way or TUP area in a manner 
consistent with the grant or TUP;
    (10) Immediately notify all Federal, state, tribal, and local 
agencies of any release or discharge of hazardous material reportable 
to such entity under applicable law. You must also notify BLM at the 
same time, and send BLM a copy of any written notification you 
prepared;
    (11) Not dispose of or store hazardous material on your right-of-
way or TUP area, except as provided by the terms, conditions, and 
stipulation of your grant or TUP;
    (12) Certify that your compliance with all requirements of the 
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. 
11001 et seq., when you receive, assign, renew, amend, or terminate 
your grant or TUP;
    (13) Control and remove any release or discharge of hazardous 
material on or near the right-of-way or TUP area arising in connection 
with your use and occupancy of the right-of-way or TUP area, whether or 
not the release or discharge is authorized under the grant or TUP. You 
must also remediate and restore lands and resources affected by the 
release or discharge to BLM's satisfaction and to the satisfaction of 
any other Federal, state, tribal, or local agency having jurisdiction 
over the land, resource, or hazardous material;
    (14) Comply with all liability and indemnification provisions and 
stipulations in the grant or TUP;
    (15) As BLM directs, provide diagrams or maps showing the location 
of any constructed facility;
    (16) Construct, operate, and maintain the pipeline as a common 
carrier. This means that the pipeline owners and operators must accept, 
convey, transport, or purchase without discrimination all oil or gas 
delivered to the pipeline without regard to where the oil and gas was 
produced (i.e., whether on Federal or non-federal lands). Where natural 
gas not subject to state regulatory or conservation laws governing its 
purchase by pipeline companies is offered for sale, each pipeline 
company must purchase, without discrimination, any such natural gas 
produced in the vicinity of the pipeline. Common carrier provisions of 
this paragraph do not apply to natural gas pipelines operated by a:
    (i) Person subject to regulation under the Natural Gas Act (15 
U.S.C. 717 et seq.); or
    (ii) Public utility subject to regulation by state or municipal 
agencies with the authority to set rates and charges for the sale of 
natural gas to consumers within the state or municipality.
    (17) Within 30 calendar days after BLM requests it, file rate 
schedules and tariffs for oil and gas, or derivative products, 
transported by the pipeline as a common carrier with the agency BLM 
prescribes, and provide BLM proof that you made the required filing;
    (18) With certain exceptions (listed in the statute), not export 
domestically produced crude oil by pipeline without Presidential 
approval (see 30 U.S.C. 185(u) and (s) and 50 U.S.C. App. 2401);
    (19) Not exceed the right-of-way width that is specified in the 
grant without BLM's prior written authorization. If you need a right-
of-way wider than 50 feet plus the ground occupied by the pipeline and 
related facilities, see Sec.  2885.14 of this subpart;
    (20) Not use the right-of-way or TUP area for any use other than 
that authorized by the grant or TUP. If you

[[Page 21086]]

require other pipelines, looping lines, or other improvements not 
authorized by the grant or TUP, you must first secure BLM's written 
authorization;
    (21) Not use or construct on the land in the right-of-way or TUP 
area until:
    (i) BLM approves your detailed plan for construction, operation, 
and termination of the pipeline, including provisions for 
rehabilitation of the right-of-way or TUP area and environmental 
protection; and
    (ii) You receive a Notice to Proceed for all or any part of the 
right-of-way or TUP area. In certain situations BLM may waive this 
requirement in writing; and
    (22) Comply with all other stipulations that BLM may require.


Sec.  2885.12  What rights does a grant or TUP convey?

    The grant or TUP conveys to you only those rights which it 
expressly contains. BLM issues it subject to the valid existing rights 
of others, including the United States. Rights which the grant or TUP 
conveys to you include the right to:
    (a) Use the described lands to construct, operate, maintain, and 
terminate facilities within the right-of-way or TUP area for authorized 
purposes under the terms and conditions of the grant or TUP;
    (b) Allow others to use the land as your agent in the exercise of 
the rights that the grant or TUP specifies;
    (c) Do minor trimming, pruning, and removing of vegetation to 
maintain the right-of-way or TUP area or facility;
    (d) Use common varieties of stone and soil which are necessarily 
removed during construction of the pipeline, without additional BLM 
authorization or payment, in constructing the pipeline within the 
authorized right-of-way or TUP area; and
    (e) Assign the grant or TUP to another, provided that you obtain 
BLM's prior written approval.


Sec.  2885.13  What rights does the United States retain?

    The United States retains and may exercise any rights the grant or 
TUP does not expressly convey to you. These include the United States' 
right to:
    (a) Access the lands covered by the grant or TUP at any time and 
enter any facility you construct on the right-of-way or TUP area. BLM 
will give you reasonable notice before it enters any facility on the 
right-of-way or TUP area;
    (b) Require common use of your right-of-way or TUP area, including 
subsurface and air space, and authorize use of the right-of-way or TUP 
area for compatible uses. You may not charge for the use of the lands 
made subject to such additional right-of-way grants;
    (c) Retain ownership of the resources of the land covered by the 
grant or TUP, including timber and vegetative or mineral materials and 
any other living or non-living resources. You have no right to use 
these resources, except as noted in Sec.  2885.12 of this subpart;
    (d) Determine whether or not your grant is renewable; and
    (e) Change the terms and conditions of your grant or TUP as a 
result of changes in legislation, regulation, or as otherwise necessary 
to protect public health or safety or the environment.


Sec.  2885.14  What happens if I need a right-of-way wider than 50 feet 
plus the ground occupied by the pipeline and related facilities?

    (a) You may apply to BLM at any time for a right-of-way wider than 
50 feet plus the ground occupied by the pipeline and related 
facilities. In your application you must show that the wider right-of-
way is necessary to:
    (1) Properly operate and maintain the pipeline after you have 
constructed it;
    (2) Protect the environment; or
    (3) Provide for public safety.
    (b) BLM will notify you in writing of its finding(s) and its 
decision on your application for a wider right-of-way. If the decision 
is adverse to you, you may appeal it under Sec.  2881.10 of this part.


Sec.  2885.15  How will BLM charge me rent?

    (a) BLM will charge rent beginning on the first day of the month 
following the effective date of the grant or TUP through the last day 
of the month when the grant or TUP terminates. Example: If a grant or 
TUP becomes effective on January 10 and terminates on September 16, the 
rental period would be February 1 through September 30, or 8 months.
    (b) There are no reductions or waivers of rent for grants or TUPs.
    (c) BLM will set or adjust the annual billing periods to coincide 
with the calendar year by prorating the rent based on 12 months.
    (d) If you disagree with the rent that BLM charges, you may appeal 
the decision under Sec.  2881.10 of this part.


Sec.  2885.16  When do I pay rent?

    (a) You must pay rent for the initial rental period before BLM 
issues you a grant or TUP.
    (b) You make all other rental payments according to the payment 
plan described in Sec.  2885.21 of this subpart.
    (c) After the first rental payment, all rent is due on January 1 of 
the first year of each succeeding rental period for the term of your 
grant.


Sec.  2885.17  What happens if I pay the rent late?

    (a) If BLM does not receive the rent payment within 15 calendar 
days after the rent was due under Sec.  2885.16 of this subpart, BLM 
will charge you a late payment fee of $25.00 or 10 percent of the rent 
you owe, whichever is greater, not to exceed $500 per authorization.
    (b) If BLM does not receive your rent payment and late payment fee 
within 30 calendar days after rent was due, BLM may collect other 
administrative fees provided by statute.
    (c) If BLM does not receive your rent, late payment fee, and any 
administrative fees within 90 calendar days after the rent was due, BLM 
may terminate your grant under Sec.  2886.17 of this part and you may 
not remove any facility or equipment without BLM's written permission. 
The rent due, late payment fees, and any administrative fees remain a 
debt that you owe to the United States.
    (d) If you pay the rent, late payment fees, and any administrative 
fees after BLM has terminated the grant, BLM does not automatically 
reinstate the grant. You must file a new application with BLM. BLM will 
consider the history of your failure to timely pay rent in deciding 
whether to issue you a new grant.
    (e) You may appeal any adverse decision BLM takes against your 
grant or TUP under Sec.  2881.10 of this part.


Sec.  2885.18  When must I make estimated rent payments to BLM?

    To expedite the processing of your application for a grant or TUP, 
BLM may estimate rent payments and require you to pay that amount when 
it issues the grant or TUP. The rent amount may change once BLM 
determines the actual rent of the grant or TUP. BLM will credit you any 
rental overpayment, and you are liable for any underpayment. This 
section does not apply to rent payments made under the rent schedule in 
this part.


Sec.  2885.19  What is the rent for a linear right-of-way?

    (a) Except as noted in paragraph (b) of this section, BLM will use 
the Per Acre Rent Schedule at Sec.  2806.20(b) of this chapter to 
calculate the rent. The Per Acre Rent Schedule is updated annually in 
accordance with Sec.  2806.21 of this chapter.
    (b) BLM may determine your rent using the methods described in 
Sec.  2806.50 of this chapter, rather than by using the rent schedule 
cited in paragraph (a) of this section if the rent determined by 
comparable commercial practices or an appraisal would be 10 or more 
times the rent from the schedule.

[[Page 21087]]

    (c) Once you are on a rent schedule, BLM will not remove you from 
it, unless:
    (1) The BLM State Director decides to remove you from the schedule 
under paragraph (b) of this section; or
    (2) You file an application to amend your grant.
    (d) You may obtain the current linear right-of-way rent schedule 
from any BLM state or field office or by writing: Director, BLM, 1849 C 
St., NW., Mail Stop 1000 LS, Washington, DC 20240. BLM also posts the 
current rent schedule on the BLM Homepage on the Internet at http://www.blm.gov.


Sec.  2885.20  How will BLM calculate my rent for linear rights-of-way 
the schedule covers?

    (a) BLM calculates your rent by multiplying the rent per acre for 
the appropriate category of use and county zone price from the current 
schedule by the number of acres in the right-of-way or TUP area that 
fall in those categories and multiplying the result by the number of 
years in the rental period.
    (b) If BLM has not previously used the rent schedule to calculate 
your rent, we may do so after giving you reasonable written notice.


Sec.  2885.21  How must I make rent payments for my grant or TUP?

    (a) For TUPs you must make a one-time nonrefundable payment for the 
term of the TUP. For grants, you must make either nonrefundable annual 
payments or nonrefundable payments for more than 1 year, as follows:
    (1) One-time payments. You may pay in advance the required rent 
amount for the entire term of the grant.
    (2) If you choose not to make a one-time payment, you must pay 
according to one of the following methods, as applicable:
    (i) Payments by individuals. If your annual rent is $100 or less, 
you must pay at 10-year intervals not to exceed the term of the grant. 
If your annual rent is greater than $100, you may pay annually or at 
multi-year intervals that you may choose.
    (ii) Payments by all others. You must pay rent in advance at ten-
year intervals not to exceed the term of the grant.
    (b) BLM considers the first partial calendar year in the rent 
payment period to be the first year of the rental payment term. BLM 
prorates the first year rental amount based on the number of months 
left in the calendar year after the effective date of the grant.


Sec.  2885.22  How will BLM calculate rent for communication uses 
ancillary to a linear grant, TUP, or other use authorization?

    When a communication use is ancillary to, and authorized by BLM 
under, a grant or TUP for a linear use, or some other type of 
authorization (e.g., a mineral lease or sundry notice), BLM will 
determine the rent using the linear rent schedule (see Sec.  2885.19 of 
this subpart) or rent scheme associated with the other authorization, 
and not the communication use rent schedule (see Sec.  2806.30 of this 
chapter).


Sec.  2885.23  If I hold a grant or TUP, what monitoring fees must I 
pay?

    (a) Monitoring fees. Subject to Sec.  2886.11 of this part, you 
must pay a fee to BLM for any costs the Federal Government incurs in 
monitoring the construction, operation, maintenance, and termination of 
the pipeline and protection and rehabilitation of the affected Federal 
lands your grant or TUP covers. BLM categorizes the monitoring fees 
based on the estimated number of work hours necessary to monitor your 
grant or TUP. Category 1 through 4 monitoring fees are one-time fees 
and are not refundable. The work hours and fees for 2005 are as 
follows:

                                          2005 Monitoring Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                                    Monitoring fee as of June 21, 2005. To be
                                          Federal work hours      adjusted annually for changes in the IPD-GDP.
         Monitoring category                   involved           See paragraph (b) of this section for update
                                                                                   information
----------------------------------------------------------------------------------------------------------------
(1) Applications for new grants and    Estimated Federal work   $97.
 TUPs, assignments, renewals, and       hours are > 1 <= 8.
 amendments to existing grants and
 TUPs.
(2) Applications for new grants and    Estimated Federal work   $343.
 TUPs, assignments, renewals, and       hours are > 8 <= 24.
 amendments to existing grants and
 TUPs.
(3) Applications for new grants and    Estimated Federal work   $644.
 TUPs, assignments, renewals, and       hours are > 24 <= 36.
 amendments to existing grants and
 TUPs.
(4) Applications for new grants and    Estimated Federal work   $923.
 TUPs, assignments, renewals, and       hours are > 36 <= 50.
 amendments to existing grants and
 TUPS.
(5) Master Agreements................  Varies.................  As specified in the Agreement.
(6) Applications for new grants and    Estimated Federal work   Actual costs.
 TUPs, assignments, renewals, and       hours > 50..
 amendments to existing grants and
 TUPs.
----------------------------------------------------------------------------------------------------------------

    (b) Updating the schedule. BLM will revise paragraph (a) of this 
section annually to update Category 1 through 4 monitoring fees in the 
manner described at Sec.  2884.12(c) of this part. BLM will update 
Category 5 monitoring fees as specified in the Master Agreement. The 
monitoring cost schedule is available from any BLM state or field 
office or by writing: Director, Bureau of Land Management, 1849 C St., 
NW., Mail Stop 1000LS, Washington, DC 20240. BLM also posts the current 
schedule on the BLM Homepage on the Internet at http://www.blm.gov.


Sec.  2885.24  When do I pay monitoring fees?

    (a) Monitoring Categories 1 through 4. Unless BLM otherwise 
directs, you must pay monitoring fees when you submit to BLM your 
written acceptance of the terms and conditions of the grant or TUP.
    (b) Monitoring Category 5. You must pay the monitoring fees as 
specified in the Master Agreement. BLM will not issue your grant or TUP 
until it receives the required payment.
    (c) Monitoring Category 6. BLM may periodically estimate the costs 
of monitoring your use of the grant or TUP. BLM will include this fee 
in the costs associated with processing fees described at Sec.  2884.12 
of this part. If BLM has underestimated the monitoring costs, we will 
notify you of the shortfall. If your payments exceed the actual costs 
that Federal employees incurred for monitoring, BLM will either 
reimburse you the difference, or adjust the next billing to reflect the 
overpayment. Unless BLM gives you written authorization, you may not 
offset or deduct the overpayment from your payments.
    (d) Monitoring Categories 1-4 and 6. If you disagree with the 
category BLM has determined for your application,

[[Page 21088]]

you may appeal the decision under Sec.  2881.10 of this part.

Subpart 2886--Operations on MLA Grants and TUPs


Sec.  2886.10  When can I start activities under my grant or TUP?

    (a) When you can start depends on the terms of your grant or TUP. 
You can start activities when you receive the grant or TUP you and BLM 
signed, unless the grant or TUP includes a requirement for BLM to 
provide a written Notice to Proceed. If your grant or TUP contains a 
Notice to Proceed requirement, you may not initiate construction, 
operation, maintenance, or termination until BLM issues you a Notice to 
Proceed.
    (b) Before you begin operating your pipeline or related facility 
authorized by a grant or TUP, you must certify in writing to BLM that 
the pipeline system:
    (1) Has been constructed and tested according to the terms of the 
grant or TUP; and
    (2) Is in compliance with all required plans, specifications, and 
Federal and state laws and regulations.


Sec.  2886.11  Who regulates activities within my right-of-way or TUP 
area?

    After BLM has issued the grant or TUP, the head of the agency 
having administrative jurisdiction over the Federal lands involved will 
regulate your grant or TUP activities in conformance with the Act, 
appropriate regulations, and the terms and conditions of the grant or 
TUP. BLM and the other agency head may reach another agreement under 30 
U.S.C. 185(c).


Sec.  2886.12  When must I contact BLM during operations?

    You must contact BLM:
    (a) At the times specified in your grant or TUP;
    (b) When your use requires a substantial deviation from the grant 
or TUP. You must obtain BLM's approval before you begin any activity 
that is a substantial deviation;
    (c) When there is a change affecting your application, grant, or 
TUP including, but not limited to changes in:
    (1) Mailing address;
    (2) Partners;
    (3) Financial conditions; or
    (4) Business or corporate status; and
    (d) When BLM requests it, such as to update information or confirm 
that information you submitted before is accurate.


Sec.  2886.13  If I hold a grant or TUP, for what am I liable?

    (a) If you hold a grant or TUP, you are liable to the United States 
and to third parties for any damage or injury they incur in connection 
with your use and occupancy of the right-of-way or TUP area.
    (b) You are strictly liable for any activity or facility associated 
with your right-of-way or TUP area which BLM determines presents a 
foreseeable hazard or risk of damage or injury to the United States. 
BLM will specify in the grant or TUP any activity or facility posing 
such hazard or risk, and the financial limitations on damages 
commensurate with such hazard or risk.
    (1) BLM will not impose strict liability for damage or injury 
resulting primarily from an act of war or the negligence of the United 
States, except as otherwise provided by law.
    (2) As used in this section, strict liability extends to costs 
incurred by the Federal government to control or abate conditions, such 
as fire or oil spills, which threaten life, property, or the 
environment, even if the threat occurs to areas that are not under 
Federal jurisdiction. This liability is separate and apart from 
liability under other provisions of law.
    (3) You are strictly liable to the United States for damage or 
injury up to $2 million for any one incident. BLM will update this 
amount annually to adjust for changes in the Consumer Price Index for 
All Urban Consumers, U.S. City Average (CPI-U) as of July of each year 
(difference in CPI-U from July of one year to July of the following 
year), rounded to the nearest $1,000. This financial limitation does 
not apply to the release or discharge of hazardous substances on or 
near the grant or TUP area, or where liability is otherwise not subject 
to this financial limitation under applicable law.
    (4) BLM will determine your liability for any amount in excess of 
the $2 million strict liability limitation (as adjusted) through the 
ordinary rules of negligence.
    (5) The rules of subrogation apply in cases where a third party 
caused the damage or injury.
    (c) If you cannot satisfy claims for injury or damage, all owners 
of any interests in, and all affiliates or subsidiaries of any holder 
of, a grant or TUP, except for corporate stockholders, are jointly and 
severally liable to the United States.
    (d) If BLM issues a grant or TUP to more than one holder, each is 
jointly and severally liable.
    (e) By accepting the grant or TUP, you agree to fully indemnify or 
hold the United States harmless for liability, damage, or claims 
arising in connection with your use and occupancy of the right-of-way 
or TUP area.
    (f) We address liability of state, tribal, and local governments in 
Sec.  2886.14 of this subpart.
    (g) The provisions of this section do not limit or exclude other 
remedies.


Sec.  2886.14  As grant or TUP holders, what liabilities do state, 
tribal, and local governments have?

    (a) If you are a state, tribal, or local government or its agency 
or instrumentality, you are liable to the fullest extent law allows at 
the time that BLM issues your grant or TUP. If you do not have the 
legal power to assume full liability, you must repair damages or make 
restitution to the fullest extent of your powers.
    (b) BLM may require you to provide a bond, insurance, or other 
acceptable security to:
    (1) Protect the liability exposure of the United States to claims 
by third parties arising out of your use and occupancy of the right-of-
way or TUP area;
    (2) Cover any losses, damages, or injury to human health, the 
environment, and property incurred in connection with your use and 
occupancy of the right-of-way or TUP area; and
    (3) Cover any damages or injuries resulting from the release or 
discharge of hazardous materials incurred in connection with your use 
and occupancy of the right-of-way or TUP area.
    (c) Based on your record of compliance and changes in risk and 
conditions, BLM may require you to increase or decrease the amount of 
your bond, insurance, or security.
    (d) The provisions of this section do not limit or exclude other 
remedies.


Sec.  2886.15  How is grant or TUP administration affected if the BLM 
land my grant or TUP encumbers is transferred to another Federal agency 
or out of Federal ownership?

    (a) If there is a proposal to transfer the BLM land your grant or 
TUP encumbers to another Federal agency, BLM may, after reasonable 
notice to you, transfer administration of your grant or TUP, for the 
lands BLM formerly administered, to another Federal agency, unless 
doing so would diminish your rights. If BLM determines your rights 
would be diminished by such a transfer, BLM can still transfer the 
land, but retain administration of your grant or TUP under existing 
terms and conditions.
    (b) If there is a proposal to transfer the BLM land your grant or 
TUP encumbers out of Federal ownership, BLM may, after reasonable 
notice to you and in conformance with existing policies and procedures:

[[Page 21089]]

    (1) Transfer the land subject to your grant or TUP. In this case, 
administration of your grant or TUP, for the lands BLM formerly 
administered, is transferred to the new owner of the land;
    (2) Transfer the land, but BLM retains administration of your grant 
or TUP; or
    (3) Reserve to the United States the land your grant or TUP 
encumbers, and BLM retains administration of your grant or TUP.
    (c) BLM or, if BLM no longer administers the land, the new land 
owner may negotiate new grant or TUP terms and conditions with you.


Sec.  2886.16  Under what conditions may BLM order an immediate 
temporary suspension of my activities?

    (a) Subject to Sec.  2886.11, BLM can order an immediate temporary 
suspension of grant or TUP activities within the right-of-way or TUP 
area to protect public health or safety or the environment. BLM can 
require you to stop your activities before holding an administrative 
proceeding on the matter and may order immediate remedial action.
    (b) BLM may issue the immediate temporary suspension order orally 
or in writing to you, your contractor or subcontractor, or to any 
representative, agent, or employee representing you or conducting the 
activity. BLM may take this action whether or not any action is being 
or has been taken by other Federal or state agencies. When you receive 
the order, you must stop the activity immediately. BLM will, as soon as 
practical, confirm an oral order by sending or hand delivering to you 
or your agent at your address a written suspension order explaining the 
reasons for it.
    (c) You may file a written request for permission to resume 
activities at any time after BLM issues the order. In the request, give 
the facts supporting your request and the reasons you believe that BLM 
should lift the order. BLM must grant or deny your request within 5 
business days after receiving it. If BLM does not respond within 5 
business days, BLM has denied your request. You may appeal the denial 
under Sec.  2881.10 of this part.
    (d) The immediate temporary suspension order is effective until you 
receive BLM's written notice to proceed with your activities.


Sec.  2886.17  Under what conditions may BLM suspend or terminate my 
grant or TUP?

    (a) Subject to Sec.  2886.11, BLM may suspend or terminate your 
grant if you do not comply with applicable laws and regulations or any 
terms, conditions, or stipulations of the grant, or if you abandon the 
right-of-way.
    (b) Subject to Sec.  2886.11, BLM may suspend or terminate your TUP 
if you do not comply with applicable laws and regulations or any terms, 
conditions, or stipulations of the TUP, or if you abandon the TUP area.
    (c) A grant or TUP also terminates when:
    (1) The grant or TUP contains a term or condition that has been met 
that requires the grant or TUP to terminate;
    (2) BLM consents in writing to your request to terminate the grant 
or TUP; or
    (3) It is required by law to terminate.
    (d) Your failure to use your right-of-way for its authorized 
purpose for any continuous 2-year period creates a presumption of 
abandonment. BLM will notify you in writing of this presumption. You 
may rebut the presumption of abandonment by proving that you used the 
right-of-way or that your failure to use the right-of-way was due to 
circumstances beyond your control, such as acts of God, war, or 
casualties not attributable to you.
    (e) You may appeal a decision under this section under Sec.  
2881.10 of this part.


Sec.  2886.18  How will I know that BLM intends to suspend or terminate 
my grant or TUP?

    (a) Grants. When BLM determines that it will suspend or terminate 
your grant under Sec.  2886.17 of this subpart, it will send you a 
written notice of this determination. The determination will provide 
you a reasonable opportunity to correct the violation, start your use, 
or resume your use of the right-of-way, as appropriate. In the notice 
BLM will state the date by which you must correct the violation or 
start or resume use of the right-of-way.
    (1) If you have not corrected the violation or started or resumed 
use of the right-of-way by the date specified in the notice, BLM will 
refer the matter to the Office of Hearings and Appeals. An ALJ in the 
Office of Hearings and Appeals will provide an appropriate 
administrative proceeding under 5 U.S.C. 554 and determine whether 
grounds for suspension or termination exist. No administrative 
proceeding is required where the grant by its terms provides that it 
terminates on the occurrence of a fixed or agreed upon condition, 
event, or time.
    (2) BLM will suspend or terminate the grant if the ALJ determines 
that grounds exist for suspension or termination and the suspension or 
termination is justified.
    (b) TUPs. When BLM determines that it will suspend or terminate 
your TUP, it will send you a written notice and provide you a 
reasonable opportunity to correct the violation or start or resume use 
of the TUP area. The notice will also provide you information on how to 
file a written request for reconsideration.
    (1) You may file a written request with the BLM office that issued 
the notice, asking for reconsideration of the determination to suspend 
or terminate your TUP. BLM must receive this request within 10 business 
days after you receive the notice.
    (2) BLM will provide you with a written decision within 20 business 
days after receiving your request for reconsideration. The decision 
will include a finding of fact made by the next higher level of 
authority than that who made the suspension or termination 
determination. The decision will also inform you whether BLM suspended 
or terminated your TUP or cancelled the notice made under paragraph (b) 
of this section.
    (3) If the decision is adverse to you, you may appeal it under 
Sec.  2881.10 of this part.


Sec.  2886.19  When my grant or TUP terminates, what happens to any 
facilities on it?

    (a) Subject to Sec.  2886.11, after your grant or TUP terminates, 
you must remove any facilities within the right-of-way or TUP area 
within a reasonable time, as determined by BLM, unless BLM instructs 
you otherwise in writing, or termination is due to non-payment of rent 
(see Sec.  2885.17(c) of this part).
    (b) After removing the facilities, you must remediate and restore 
the right-of-way or TUP area to a condition satisfactory to BLM, 
including the removal and clean-up of any hazardous materials.
    (c) If you do not remove all facilities within a reasonable period, 
as determined by BLM, BLM may declare them to be the property of the 
United States. However, you are still liable for the costs of removing 
them and for remediating and restoring the right-of-way or TUP area.

Subpart 2887--Amending, Assigning, or Renewing MLA Grants and TUPs


Sec.  2887.10  When must I amend my application, seek an amendment of 
my grant or TUP, or obtain a new grant or TUP?

    (a) You must amend your application or seek an amendment of your 
grant or TUP when there is a proposed substantial deviation in location 
or use.
    (b) The requirements to amend an application or a grant or TUP are 
the same as those for a new application, including paying processing 
and monitoring fees and rent according to

[[Page 21090]]

Sec. Sec.  2884.12, 2885.23, 2885.19, and 2886.11 of this part.
    (c) Any activity not authorized by your grant or TUP may subject 
you to prosecution under applicable law and to trespass charges under 
subpart 2888 of this part.
    (d) Notwithstanding paragraph (a) of this section, if you hold a 
pipeline grant issued before November 16, 1973, and there is a proposed 
substantial deviation in location or use of the right-of-way, you must 
apply for a new grant.
    (e) BLM may ratify or confirm a grant that was issued before 
November 16, 1973, if we can modify the grant to comply with the Act 
and these regulations. BLM and you must jointly agree to any 
modification of a grant made under this paragraph.


Sec.  2887.11  May I assign my grant or TUP?

    (a) With BLM's approval, you may assign, in whole or in part, any 
right or interest in a grant or TUP.
    (b) In order to assign a grant or TUP, the proposed assignee, 
subject to Sec.  2886.11 of this part, must file an application and 
satisfy the same procedures and standards as for a new grant or TUP, 
including paying processing fees (see Sec.  2884.12 of this part).
    (c) The assignment application must also include:
    (1) Documentation that the assignor agrees to the assignment; and
    (2) A signed statement that the proposed assignee agrees to comply 
with and to be bound by the terms and conditions of the grant or TUP 
that is being assigned, and all applicable laws and regulations.
    (d) BLM will not recognize an assignment until we approve it in 
writing. BLM will approve the assignment if doing so is in the public 
interest. BLM may modify the grant or TUP or add bonding and other 
requirements, including terms and conditions, to the grant or TUP when 
approving the assignment. If BLM approves the assignment, the benefits 
and liabilities of the grant or TUP apply to the new grant or TUP 
holder.
    (e) The processing time and conditions described at Sec.  2884.21 
of this part apply to assignment applications.


Sec.  2887.12  How do I renew my grant?

    (a) You must apply to BLM to renew the grant at least 120 calendar 
days before your grant expires. BLM will renew the grant if the 
pipeline is being operated and maintained in accordance with the grant, 
these regulations, and the Act. If your grant has expired or 
terminated, you must apply for a new grant under subpart 2884 of this 
part.
    (b) BLM may modify the terms and conditions of the grant at the 
time of renewal, and you must pay the processing fees (see Sec.  
2884.12 of this part) in advance.
    (c) The time and conditions for processing applications for rights-
of-way, as described at Sec.  2884.21 of this part, apply to 
applications for renewals.

Subpart 2888--Trespass


Sec.  2888.10  What is trespass?

    (a) Trespass is using, occupying, or developing the public lands or 
their resources without a required authorization or in a way that is 
beyond the scope and terms and conditions of your authorization. 
Trespass is a prohibited act.
    (b) Trespass includes acts or omissions causing unnecessary or 
undue degradation to the public lands or their resources. In 
determining whether such degradation is occurring, BLM may consider the 
effects of the activity on resources and land uses outside the area of 
the activity.
    (c) BLM will administer trespass actions for grants and TUPs as set 
forth in Sec. Sec.  2808.10(c), and 2808.11 of this chapter, except 
that the rental exemption provisions of part 2800 do not apply to 
grants issued under this part.
    (d) Other Federal agencies will address trespass on non-BLM lands 
under their respective laws and regulations.


Sec.  2888.11  May I receive a grant if I am or have been in trespass?

    Until you satisfy your liability for a trespass, BLM will not 
process any applications you have pending for any activity on BLM-
administered lands. A history of trespass will not necessarily 
disqualify you from receiving a grant. In order to correct a trespass, 
you must apply under the procedures described at subpart 2884 of this 
part. BLM will process your application as if it were a new use. Prior 
unauthorized use does not create a preference for receiving a grant.

PART 2920--LEASES, PERMITS, AND EASEMENTS

0
5. The authority citation for part 2920 continues to read as follows:

    Authority: 43 U.S.C. 1740.



0
6. Amend Sec.  2920.6 by revising the second sentence of paragraph (b) 
and the third sentence of paragraph (c) as follows:


Sec.  2920.6  Reimbursement of costs.

* * * * *
    (b) * * * The reimbursement of costs shall be in accordance with 
the provisions of Sec. Sec.  2804.14 and 2805.16 of this chapter, 
except that any permit whose total rental is less than $250 shall be 
exempt from reimbursement of costs requirements.
    (c) * * * This payment shall be determined in accordance with the 
provisions of Sec. Sec.  2804.14 and 2805.16 of this chapter.
* * * * *

PART 9230--TRESPASS

0
7. Revise the authority citation for part 9230 to read as follows:

    Authority: R.S. 2478 and 43 U.S.C. 1740.


0
8. Amend Sec.  9239.7-1 by revising the introductory paragraph to read 
as follows:


Sec.  9239.7-1  Public lands.

    The filing of an application under part 2800, 2810, or 2880, of 
this chapter does not authorize the applicant to use or occupy the 
public lands for right-of-way purposes, except as provided by the 
definition of ``Casual use'' in Sec.  2801.5(b) and by Sec. Sec.  
2804.29 and 2884.25 of this chapter, until written authorization has 
been issued by the authorized officer. Any unauthorized occupancy or 
use of public lands or improvements for right-of-way purposes 
constitutes a trespass against the United States for which the 
trespasser is liable for costs, damages, and penalties as provided in 
subpart 2808 and Sec. Sec.  2812.1-3 and 2888.10 of this chapter. No 
new permit, license, authorization, or grant of any kind shall be 
issued to a trespasser until:
* * * * *

PART 9260--LAW ENFORCEMENT--CRIMINAL

0
9. Revise the authority citation for part 9260 to read as follows:

    Authority: 16 U.S.C. 4601-6a, 16 U.S.C. 670h, 16 U.S.C. 1246(i), 
16 U.S.C. 1336, 43 U.S.C. 315a, 43 U.S.C. 1733(a), 43 U.S.C. 1740, 
and Executive Order 11644, 37 FR 2877, 3 CFR, 1971-1975 Comp., p. 
666.


0
10. Revise Sec.  9262.1 to read as follows:


9262.1  Penalties for unauthorized use, occupancy, or development of 
public lands.

    Under section 303(a) of the Federal Land Policy and Management Act 
of 1976 (43 U.S.C. 1733(a)) any person who knowingly and willfully 
violates the provisions of Sec. Sec.  2808.10(a), 2812.1-3, 2888.10, or 
2920.1-2(a) of this chapter, by using public lands without the 
requisite authorization, may be tried before a United States magistrate 
and fined no more than $1,000 or

[[Page 21091]]

imprisoned for no more than 12 months, or both.

[FR Doc. 05-7501 Filed 4-21-05; 8:45 am]
BILLING CODE 4310-84-P